Sony 2015 Annual Report Download - page 37

contracts of life insurance companies specified in the Insurance Business Act’s regulations, and a contingency
reserve in amounts no lower than the amount of the “standard policy reserve” as set forth by the regulatory
guidelines. The FSA maintains a solvency standard which is used by Japanese regulators to monitor the financial
strength of insurance companies. Non-life insurance companies are also required to provide a policy reserve.
Sony Bank is also subject to regulation by the FSA under the Banking Act of Japan, including the requirement
that it maintain a minimum capital adequacy ratio in accordance with capital adequacy guidelines adopted by the
FSA based on the Basel III agreement. The FSA has broad regulatory powers over insurance and banking
businesses in Japan, including the authority to grant or revoke operating licenses and to request information and
conduct onsite inspections of books and records. Sony’s subsidiaries in the Financial Services segment are
subject to the Japanese Insurance Business Act and Banking Act that require insurance and business companies
to maintain their financial credibility and to secure protection for policyholders and depositors in view of the
public importance of insurance and banking services. As such, lending and borrowing between subsidiaries in the
Financial Service segment and the other companies within Sony Group is strictly limited.
In addition, Sony’s telecommunication businesses in Japan are subject to approvals and oversight from the
Ministry of Internal Affairs and Communications, under the Telecommunications Business Act and other
regulations related to the Internet businesses and communication methods in Japan.
Social Responsibility Regulations Such as Environmental and Human Rights Regulations
Sony monitors, evaluates, and complies with new environmental requirements that may affect its operations.
For example, in Europe, Sony is required to comply with a number of environmental regulations enacted by the
EU such as the Restriction of Hazardous Substances (“RoHS”) Directive, the Waste Electrical and Electronic
Equipment (“WEEE”) Directive and the Registration, Evaluation, Authorization and Restriction of Chemicals
(“REACH”) regulation. Similar regulations are being formulated in other areas of the world, including South
American and Southeast Asian countries.
Sony has taken steps to address new regulations or governmental policies related to climate change
including carbon disclosure, greenhouse gas emission reduction, carbon taxes and energy efficiency for
electronics products. For example, Sony has established an internal management system in response to the
EU directive on energy-related products and their energy efficiency (“ErP”).
Sony also monitors and evaluates newly adopted laws and regulations that may affect its operations
applicable to purchasing activities including the procurement of raw materials, with respect to environmental,
occupational health and safety, human rights, labor and armed conflict issues, and complies as appropriate.
Also refer to “Risk Factors” in “Item 3. Key Information.”
Disclosure pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012
Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012 added Section 13(r) to the
Securities Exchange Act of 1934 (the “Exchange Act”), as amended. Section 13(r) requires an issuer to disclose
in its annual or quarterly reports, as applicable, whether it or any of its affiliates knowingly engaged in certain
activities, transactions or dealings relating to Iran or with designated natural persons or entities sanctioned under
programs relating to terrorism or the proliferation of weapons of mass destruction. Disclosure is required even
where the activities, transactions or dealings are conducted outside the U.S. by non-U.S. affiliates in compliance
with applicable law, and whether or not the activities are sanctionable under U.S. law.
Sony is aware that certain transactions during the fiscal year ended March 31, 2016, as described below,
may be disclosable pursuant to Section 13(r) of the Exchange Act.
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