Annual Report 1998

Annual Report 1998
EMI purchases remaining 50%
Gar$ Brooks' Ser.ens debus in
fie US widr 897,000 units, a
of LA-based urban label
Priority Records.
record opening Y\€ek for a
country a6 and sells 1.5 million
uniB in its first two u/eeks.
YannilTV special, featuring live
performances of his Tribute tcur
at the Taj Mahal and Forbidden
Cny, debuts on USTV
Spiceworld, the second album
by the Spice Girls and Seyens
by Ganh Brook released -
both top the UK and US
charu respectively.
Acquisition of 50% interest
in Jobete music publishing
catalogues containint
classic Motown son8s.
Roberto Alagna and Angela
Gheorghiu win record of
the year and best opera for
their EMI recording of
Puccini's Lo Rondine at the
UK Gramophone awards.

Highlights of theyear
I ChairTruni slalenenl
6 OperaiinE md fimcial review
21 Corponre Sovemanc€
2t Renunenrion Commitee r€port
32 Staremenl oi Direcrors responsililiries
Finan

Chairman's statement
Dear Shareholder,
I hi\ has been anorher er en tlul lear lor the L\ll (;l()up. lt r!a: ottc o1 gre.tt c hange and
exc(,ll('nr prosress. \\i'dclivtrcd a good pcrloruance achier ed narkcl sliare .qrorvth
in dillicult markcl .on(lirions,'lnd Iook nan)'posilive steps lo strcngthen the long ternl
posirion of the Compan,v Setttrg aside the in.rP,tcl ol curlenc)'. both (lrouP lurno!cr
ol L l.5 86. I million ,r nd opcrating profi t ol f.408.5 milljon increast'd bv 5 .8"1' ar\d 2.3"/,
respccrir,ell',inaglobal music narket lhnl Sft'\\'oth 3.2%.OLlr(onlinLlinEcorfidence
in lhe luture prospr( ls o' our business is tellcr rtd in the 6.1% int lease in the firll rr'.rr
diviclend to 16.0p.
Evcr),one in thc rrusi[ industry \r.]\ nllected b1'thc rre.tkncss in laPan and
Sourh [asr AsL]. and L Nl l $'as no exception. I lowcver. tol the Inost part, rve had a r"er1'
.qood ) car in rhe rest ol the rr orld. perhaps better than mosL O\1'rall. \1'e increased olrr
$ orld marker sh,irc lrorn 1.1.3% Io I 4.8% Icinforcins our po:itton as the ir orld s lhid
largest music cotnl),rt)t
I am panicularli, pleascd u'iLh our pct lormance in Notth ,\merica n'here n t' gained
marker sharc ancl rl^'ed irom being nLlnber six jn the marl(el lo lumbel [our. \{ilh Ihe
exception ol Gerorar)\: our European bLisinesses deliverecl grxrd results, maitlta tn illl , ,r t
overallposirlonasrhenumberlttonrLtsiccomPan) inFuroPe \\ I gaincd sh.lrt'. ,t nd lilther
srrengrhcncd our nunber ore position in Ihe UK. desPjlc it small deciine in thc n,lrkt't
In Francc. \\,c increased markel sharc clue ro lhe strensth ol our local rePertoirc. our snall
bul .erorving businesses in [,rslern Ittrope also tutned itt cxccllent resu]ts. In L,llir America,

Chainnan's statement continued
From left to righc Now JB
compiladon, Pa!l Mccaftney,
'Brir' award. Maria Callas,
Joe Cockei Vanessa l"1ae,
Blur, Thalia, Marcy PlaySround.
Jetr Chang (top) and E la Saila
Sola (below), show the rich
d versity ol interna! onal talent
across al musical Senres n
ElYl Recorded Music.
EMI started to see srrong Sains in sales and profits, particularly in Mexico. ArSentina and
Chile. We also continued ro build our local roster and expand into new markets such as
Bolivia. Ecuador, Paraguay. Peru and UruSuay.
On the creative side, r.l'e have had one of our most successful years ever 32 releases
sold in excess of one million units: seven of rhose albums sold over Ihree milliot units.
Most encouratinS is the number of million-sellint arrisrs \\,ho are eirher new developing
or newly signed to EMI rhis year; arrisrs such as Meredith Brooks. Robbie U/illiams, Foo
Fighters and Dreams Come lrue, to name onl)/ a few The Verue. for example. have risen to
being superstars in ayearwith the release o'i Urban Hymns a res(imony ro their ralenr and
the abiliries of our A&R and inlernational marketing reams.
Our aim is ro become the world's leadint music compaly and our busine\s srraregjes
t
support rhis objective. Ir is the inrenrion oI rhe Board and the nanagemeot team
conlinually to improve our global business operarjons and to seek efficiencies to drive
down our cost base.
In May 1997, we announced a resrructuring ofour North American business, led by
Ken Berry Chief Execurive Officer of EMI Recorded Music. Nor only have we made grear
slrides in market share, but we have done so al rhe same rime as significanrly reducing our

cost basc. Throush out resuuclLrrins, \\'e ha\ie reached our tar.qeted cosl 5n! itl8s ,lncl cleated
a srroil3cr. nore llexible orE,rrisatior in lhe process.
1he reorganisarion ol oLr Japanese business is proceeclil.< n cll n ith a ncrt
teneratjon ol leadership nor'v in platr. A nunbcr of important 5teps \\'ere takt'n in the
)'ear. Thc new managemenl l0(lm h.rs st.rrted to restruclutc thc companv lo it1( r( .1\(
its market orlentation, palliculnrh in Inusic selection and ma rketins. A& R tea rn5 h,l! ('
been rer.iralised. lhe rosler h.rs bcen reduced and energv i5 bcjnS Iocused on tho;i' artists
rr rrl^ rneFrearcrl polenr.dllur '..,, ' \.
In Europe, \\'e completecl reorganisations in E-\11 Electrola in German) and
1n E\11 Classics in the L K and r\ e conr inued to bulld upon our sllon.q prcscncc
throushour rhe major markcls. Onr ol lhc mosr inlportant issues lacing Etr/il in Iurop('.
1r
-
ho!\,evcr. is lhe impacr ol corvertitg markets as a result ol the intlodu( lion ol lhc Euro.
Our response is to build ,ln inlr.islruature which will realise the econonics ol s(.tl('
allorded by a single. iltegrated m.rtketpLace \,vhile ensurin.-c that \,\'e conlinut ('llc( liVel\ lo
serve local music needs.
Our manulacrurinS is :lalc ol lhc-arl in all mark..ts. but r'r-c continued lo push ottr
planrs ro lou'er their costs cr,cn ltrrthcr Continuous improvemcnt in our dislribulion

capabiliries and further procurement savings also remained an area of focus during the year.
suGcesses
1997 Billboard Music Awards:
EMI Music Publishing
Pop Publisher of the year.
R&B Publisher of the yean
Country Publisher of the year.
Rap single of the year - Ill be
missing you Puff Doddy.
Rap artist of the y€ar-
Puff Daddy.
1998 Brit Awards:
EMI Recorded Music
gest British Group - fhe Yerve.
Eest British Album by a British
High€st-sellinS British album
acr worldwide SPrce 6irls.
EMI Music PublishinS
Best British Male Solo Artist
Finley Quoye.
Best Brhish Dance Act -
The ProdiEt.
4oth Annual Grammy Awards:
EMI Music Publishint received over
100 nominations coverinS every
musical genre. EMI l'1usic
Publishint won 20 Grammys
and ElYl Recorded Music v/on L
ASCAP Awards:
EMI Music Publishing
1997 Pop Publisher of the year,
Rhythm and Soul Publisher of
the year plus tour individual
awards for EMI songwriters.
1997 Gramophone Awards:
EMI R€corded Music
Best opera - Rob€rto AlaSna and
AnSela GheorShiu! Lo Rondine.
Record of the year Roberto
Alagna and Angela Gheorghius
Best Concerto Recording -
Sir Simon Rattl€ with fhomos
Zehetnair.
Several key acquisitions were complered in 199798. In luly, we announced the
purchase of a 50% interest in the highly prized lobete music publishinS cataloSues.
Containint all the classic sonts from the Motolr.r era, the acquisition fufiher reinforces EMI
Music PublishinSs position as the world's number one music publisher In March 1998, EMI
Recorded Music announced the completion of the acquisition of Priority Records, one of the
largest remaininS independent US record labels in the growing urban/rap 6enre.
Also in March, we announced the substantial completion of the sale of the HMV
Croup to a new retailinS venrure, combining HMV, Dillons and waterstones in a single
enterpdse called HMV Media Croup, for up ro €50O million. The Croup retained an initial
investment of €87.5 million, which tave us a 45.2% interest in the new compaly at
31 March 1998. The transacrion broughl together rllree leading specialist retailers with
cornmon operating characteristics and strengths. h enabled EMI to realise a cash value
for rhe HMV Group as well as providin8 it with the opportuniry to participate in the
future performance of rhe HMV Media Croup. The divestment of HMV Group also enabled
us ro reduce indebtedness and released capital for continued investment in our global
music business-
The sale of the HMV Croup is the culmination of a se es of steps begun in the
mid'1980s ro enalle us to concentate on businesses which own and exploit the rights to
world-class intellectual properry and creative assets. We are now focused purely on music
recordlng and music publishing, We have a simpler, more music focused manaSement
structure and a mole efficient orSanisation upon which to pursue our aim of becomilg the
world's leading music company.
Upon the sale of the HMV Croup, Stuart McAllister, Chief Executive, resi8ned from
the EMI Croup Board to join rhe Board of HMV Media croup. Stuafl had been Chief
Executive of HMV Group for over ten years and oversaw its transition from a UK based
music retailer to the largest inlenational specialist retailer in the world.
Accordingly, I would like to thank Stuart for his guiding role and to wish him ard
HMV Media Croup (onrinued success.
Shordy after year end, in April 1998, Iim Fifield resigned as President and CEo of
EMI Music ard as a Direcror of EMI Group plc, after ten years with the Group during
which time EMI grew hom being lhe world's fifth largest music company to number three.
I would like ro thank Jim for the pivotal role he has played in positioninS EMI as one
of the leading and mosr respected rnusic companies in the world and to wish him every
success in the furure.
Also in April, Ken Berry chief Executive officer of EMI Recorded Music, and Marrin
Bandier, Chief Executive officer of IMI Music Publishing, were appointed to the EMI Group
Board as Executive Directors. Ken and Marry have over fifty years' experience in the music
indusrry berween them and rheir operational experience will be invaluable to the Board s
deliberations and the continued stewardship of the IMI Group.
At the same rime, Simon Duffy was appointed Joint Deputy Chairman. Simon has been
Croup Finance Director since 1992 andwill continue in that role in addition to his new
duties as loint Depury Chairman. I am delighted the Board has acknowledged his imponanr
contribution to the company in this way.

I would also like to welcome Kathleen o'Donovan and Sir Dominic Cadbury to the
Board as Non-executive Directors. Both have a wealth of business experience and their
skills will complement those of our existing Non-executive Directors.
Sir Graham Day has indicated his wish to retire from the Board following the AGM
this year Graham has been a Non-executive Director with THORN EMI and EMI since 1990
and we will rniss his wise counsel and tremendous business experience.
Nothing we have achieved throughout the year would have been possible without the
comrnitmenr of oul employees. In addition to the ortanisadonal changes to which they have
had ro adjusr, EMI has also been the subject of often very speculative and misleading
comment and media coverage. Throughout this potentially destabilising time, our
employees uound the world continued ro focus on building the business. on your behalf
I would like to thank them for their undeterred enthusiasm and loyalry to EMI.
EMI remains confident about the prospects for the music industry. we continue lo
invest in those businesses and genres which offer the greatesr growth potential. The quality
of our manatemen! teart the inftinsic value of our recorded music and music PublishinS
copyrights and our powerful posilion in both emer8ing ard developed markets will enable
us to exploit opportunities successfully for developing shareholder value against a
background of industry change.
EMI has the riSht manaSement tearn, the right stntegy and the financial strength to be
a vigorous and successful compedtor in the music industry. we look forward to a great
future as an independent force in music.
SirColin Southgate
Chairman

Operating and financial review
REVIEW OF COMMERCIAL PERFORMANCE
EMI R€corded Music
In unit terms. album sales were up nearly 3%. wirh growth in CD sales offsettint a decline
as ever
5pjce
.Best sellinS US album last
year,5.lm units sold.
. Second biSSest-selling debut
album in US by a UK acr.
.The groupl frrst six sinSles
went to No.l in UK charts.
.tirst act since 1989 to have
two of UKI top frve selling
albums in any one y€ar (1997).
.Album sales to date. 3lm
and rising.
in music casselle sales. In total, CDs now represenr nearly 82% of total a]bum sales.
199798 was a goodyear for EMI Recorded Music, continuing our track record of
arlislic success and skill in the marketing of new ralent. 'Superstar' releases, including those
from Ihe Spice Cirls, Carth Brooks. Janet Jackson and The Rolling Stones. achieved Srear
commercial success. Additionally, Recorded Music beneflted from important breakthrough
albums by The Verve, Meredith Brooks. Radiohead and Marcy Playground. Albums from
successful recent sitnings included those from Yanni. Dreams Come True and Robbie
Williams. In addilion, EMIs compilation series Nou and Brauo continued ro sell well wirh
lhe Nor, series on its 38th volume ard Brduo on irs l9rh. In rotal. 32 releases sold more rhan
one million units, compared to 25 last year.
Despite the small decline in the UK wholesale market, EMI retained its number one
position with a strong increase in market share. The Verve. the Spice cirls, Radiohead.
Eternal, Robbie Williams and continued stront sales ftom EMI and Virgins NoD and Besr
Eurr.... compilation series were norable contribulors to this success.
The music markets ofContinental Europe generally showed improvement over last year
One of the stronsest markers was France, which recovered from a p or year deficit
lo grow in excess of 8%. EMI tained market share in France, largely on the strength of its
local repertoire. including Daf[ Punk, 2 Be 3, Julian Clerc and I AM.
EMI's pedormance in Germany was disappointing. Allhough EMI and VirSin had
Sreat success with inrernational acts such as Chumbawamba, a relatively weak local release
schedule resulted in a loss of marker share.
The emerging markets of Eastern Europe conrinued thet strong growth, helpinS
Europe overall achieve an increase of over 4%. IMI maintained irs marker leading posirion
in Eastem Europe and number two position in Europe overall.
Garth Brooks 67m units
fastest-selling album artist in tlS historygilyJoel
59m unirs
EaSles 6lm units

Operating and financial review
REVIEW OF COMMERCIAL PERFORMANCE
EMI R€corded Music
In unit terms. album sales were up nearly 3%. wirh growth in CD sales offsettint a decline
as ever
5pjce
.Best sellinS US album last
year,5.lm units sold.
. Second biSSest-selling debut
album in US by a UK acr.
.The groupl frrst six sinSles
went to No.l in UK charts.
.tirst act since 1989 to have
two of UKI top frve selling
albums in any one y€ar (1997).
.Album sales to date. 3lm
and rising.
in music casselle sales. In total, CDs now represenr nearly 82% of total a]bum sales.
199798 was a goodyear for EMI Recorded Music, continuing our track record of
arlislic success and skill in the marketing of new ralent. 'Superstar' releases, including those
from Ihe Spice Cirls, Carth Brooks. Janet Jackson and The Rolling Stones. achieved Srear
commercial success. Additionally, Recorded Music beneflted from important breakthrough
albums by The Verve, Meredith Brooks. Radiohead and Marcy Playground. Albums from
successful recent sitnings included those from Yanni. Dreams Come True and Robbie
Williams. In addilion, EMIs compilation series Nou and Brauo continued ro sell well wirh
lhe Nor, series on its 38th volume ard Brduo on irs l9rh. In rotal. 32 releases sold more rhan
one million units, compared to 25 last year.
Despite the small decline in the UK wholesale market, EMI retained its number one
position with a strong increase in market share. The Verve. the Spice cirls, Radiohead.
Eternal, Robbie Williams and continued stront sales ftom EMI and Virgins NoD and Besr
Eurr.... compilation series were norable contribulors to this success.
The music markets ofContinental Europe generally showed improvement over last year
One of the stronsest markers was France, which recovered from a p or year deficit
lo grow in excess of 8%. EMI tained market share in France, largely on the strength of its
local repertoire. including Daf[ Punk, 2 Be 3, Julian Clerc and I AM.
EMI's pedormance in Germany was disappointing. Allhough EMI and VirSin had
Sreat success with inrernational acts such as Chumbawamba, a relatively weak local release
schedule resulted in a loss of marker share.
The emerging markets of Eastern Europe conrinued thet strong growth, helpinS
Europe overall achieve an increase of over 4%. IMI maintained irs marker leading posirion
in Eastem Europe and number two position in Europe overall.
Garth Brooks 67m units
fastest-selling album artist in tlS historygilyJoel
59m unirs
EaSles 6lm units

IMI made several keyacquisirions of local reperroire. In Brazil, the successlul
Op€rating and finaDcial Eview continued
The US lvholesale marke
as measured by rerai, ,r,"r, ,"nt
t'"* uoour 1% durinS the year aithough consumer demand,
During lhe /ear Racorded
Music completed rhe
acquisjrion of priorit/
Records ro gjve Efll a leadrng
posjrion in rhe growing
urban/rip 8enre. Below,
Wesrstde Co/rnecriof, one of
Prioriry s platinum.selling acrs.
overall, the marker con,rnu"O ,rarn.O
r,.ong. growing at 5.5% according ro sotndsrdn.
rarionalisarion occurred. :o show signs of slabilisa rion as retail reorganisa rion and
Through a srrong release s
Spiccwasrhebiggesr,urtn,u,o,tn"o''"'MIaSSressiveiySrewmarketshareintheUS.
5 million unirs sold. wh,," our,,]l
tn.tu'"noar 1997 accordint to s'rndsrcn, wilh over
utoout s/u?ns came in
successfur at number releases
four orher cun-," highly
,ao,n ,u' Yanni' The
compilation
RollinB stones album.
and the
Et,
I'ure Mods
o",n"t'utoton
",ro
incrudins Masrer r M,"" r;-,;i,ff:Havrcry successrul vear with prioriry arrisrs
The economic weakness ar
music marker. Airhough rMr harl
rtainty in IaPan conlinued to depress rhe local
Dreams come rrue BJ;;;;l; ;:i::]: ;:TillJ::J":::l:T::::Tl
maintained our numier three position in the market.
Music malkers in Sourh Easl
region, rhe hardesr hir being rhe m
uffered in line with the economic woes in rhe
condirions EMI main,",n"O n]urk.arO.,,
of Sourh Korea and Thailand. Despile rhe difncuh
lhe spice Girls, Michu"t ,".rn, ,o ot
tnjtt in the retion lnlemalional successes came from
trom Faye wong and an"", an," ,Jil
d vanessa Mae' while local successes came
In conrast, rhe Latin Ame c;
to experience hith growrh. rut cort sic market' led by Brazil and Mexico, continued
Panicdariy stront gu,n, ,n ,",", .n,tounies
jn Mexico' Argentina and chiie made
included rhe spice Girls, Backsrreer
rs The reSion's maior international seilers
the Rolling
to.ut ,u.."rr., srones and Yanni.
.orin6;;, ar,.r,,i"tt
wirh srrong
as. legiao
and Exajrasamba
Urbana. tos fu(anes de Tjiudna
IMI gained market share in N€
where major inrernar';;;;;;,;::,tealand and south Arrica durins the
.,rded vear
rhe Sprce Cirls,
and Meredirh Brookr.
laner lackson. Radiohead
Overall, EMI Recorded Music ir
reinlorcing irs posiri"".;,;";;;;ttttased its market share ftom143%tot4.8%,
third largesl music companla
Strategic acquisitions _ Recorded Musir
During rhe year, EMI Recorded Mult't tade several srrategic
its iont investments rerm position.
to srrengthen
In rhe US. ir ar quired rhe rem.
in rhe growing urbaa'7ra;;.;,;1'"'* 50% orPrioriry Records, a leading iaber
Virsin Record: Amer;"r.;;;;;
^:1T-t.acqurred
rhe jniridl 50% in rhe prjor vear
and disrribution comp.ni-'-"'" "otuou Media a leadint rndependent New Age" laber
The combinarioa of Naracla.s ar
::i:lsrincrudinsyan",;".*;;;;;*;T"'ffiT:::;::::*:.i::il,,Xl*"
pre5ence and new djsrrjburion oppor
also acquired wesrwo"na.,n""riJ*lll'ies in rhis trowirt tenre virEirr Records Anerica
one of the iargesr
companies direct response
in the world.
music marketinE

Bravo l9 comp lar on
Million sellerc (tucalyear 97198)
Spice Girls
levens
Urban Hymns
Janet lackson Ihe Velvet Rope
The Rolling Stones Bridges to Babylon 3.5+ million
0l{ Computer
Yanni
Spice Girls Spiceworld ll million
Garth Brooks
The Verve
Meredith aro9tl l]uryq tle tjggs
Backstreet Boys Backstreet! Back
Foo Fighters
Eternal
Compilation
John Lennon
Boowy
Greatest Hits
Bravo l9
Various Artists Pure lloods
Spice Girls 5pice Girls Video
| 3 Paul McCartney tlaming Pie
l4 Compilation
Ihe Colour & the Shape 1.5+ million
€ompilation
€hemical Brothers Dig your own hole
22 Soundtrack Romeo and Juliet vol I l+ million
23 Joe Cocker Across from I'lidnight l+ mrllion
€ompilation
Dreams Come True Sing or Die
26 Marcy Playground llarcy Playground
27 Megadeth Cryptir Writings
Compilation
3l Queen
Rock Compilation
32 Compilation

Bravo l9 comp lar on
Million sellerc (tucalyear 97198)
Spice Girls
levens
Urban Hymns
Janet lackson Ihe Velvet Rope
The Rolling Stones Bridges to Babylon 3.5+ million
0l{ Computer
Yanni
Spice Girls Spiceworld ll million
Garth Brooks
The Verve
Meredith aro9tl l]uryq tle tjggs
Backstreet Boys Backstreet! Back
Foo Fighters
Eternal
Compilation
John Lennon
Boowy
Greatest Hits
Bravo l9
Various Artists Pure lloods
Spice Girls 5pice Girls Video
| 3 Paul McCartney tlaming Pie
l4 Compilation
Ihe Colour & the Shape 1.5+ million
€ompilation
€hemical Brothers Dig your own hole
22 Soundtrack Romeo and Juliet vol I l+ million
23 Joe Cocker Across from I'lidnight l+ mrllion
€ompilation
Dreams Come True Sing or Die
26 Marcy Playground llarcy Playground
27 Megadeth Cryptir Writings
Compilation
3l Queen
Rock Compilation
32 Compilation

operating and fnancial review aontinued
Copacabana catalogue was acquired Siving EMI the worldwide riShts to 4.300 master
recordings encompassing a rante of geffes, including 5amba, Sertaneja and retional music.
ln Europe. IMI acquired l0O% of CMC Records. a Danish record company specialising
in local pop/dance repertoire. EMI also acquired an addirional 30% of Minos'EMl S.A.,
specialising in Greek local repenoire, increasins its interesl in the company to 90%.
In addirion. EMI Recorded Music established new companies in the emersinB music
markels of Bolivia, Ecuador, Paraguay, Peru, and Uruguay.
1998/99 R€corded Music release schedule
Major arrist leleases scheduled for 1998/99 include: new studio albums from Smashing
Pumpkins, Beasrie Boys, Blur, Backsneet Boys,lenny Kravitz, !ni8ma, Roxette, Deana
Carrer Lurher Vandross. Fun Lovin Criminals, Ice Cube and Massive Attack; "Live" albums
from Garth Brooks. Bob Seger and The Rolling Stones; a createst Hits album from Meat
Loaf and major tapanese releases by Dreams Come True, Yumi Matsutoya, Kuroyume, Hotei
and Aska.
lYusic Pob ishinS generates
income from copyright
royalc esr mechanical,
synchronisat on. l'1ajor
successes in mechanical and
performance roya ties ast year
included The Prod sy (oP),
Sting (/€ft), Ihe Fuli/vlonty
soundrrack a bum and Texas.
Synchronisation royakies are
due when a song is us€d in an
advert or f m. For example,
CraiSArmstrongs Rise' was
us€d on the Citroen X$ra
advert in the lJK.
EMI Music Publishing
Music PublishinE, the world's leader with over one million copyriShts, mairtained its
uack record of continued sales and profit growth despite the lower growth m major
developed markets.
Major successes this year included The ProdiSy, The VeNe, Iamiroquai, Matchbox 20,
Savage carden, Puff Daddy & the Family. Iros Ramazzotli. The Nororious B.l.G.. Third Eye
Blind, Deana Carter, CountinS Crows and Texas.
once again this year, EMI Music PublishinB received numerous indusrry awards.
including Billboard's Pop, R&B and Country Publisher of Ihe Year in the US. and top music
publisher in the US, UK, Germany and Canada.
In one of the most significant music publishing arrangements, EMI Music Publishing
acquired a 5O% interest in the lobete Music publishing companies. tobetei calaloSues
contain the great hit songs of the Motown era, including My Girl'. 'l ll Be There". "l Heard
it Through the Grapevine". You Are the Sunshine of My Life and l IusI Called lo Say I Love
You'. Iobere's 15,000 copyriShts include rnore than lo0 number one songs, recorded by such
letendary artists as Stevie wonder. Maruin Gaye, The Temptations, Diana Ross and the
Supremes and Smokey Robinson.
In arother major deal, IMI Music Publishing secured a long term publishing
arangemenr with Sthg, and will represent his entire back'catalogue (both solo works
and as a mem-ber ofThe Police) and cunent and future material throughout the world on a
long term basis. orher significant deals included Keith Sweat. Cleopalra. Usher, Matchbox
20, Meredirh Brook and Chumbawamba, and the renewal of publishint arrantements with
Aerosmith, Ianet lackson and Carlton TV
Throuthout rhe year. EMI Music Publishing entered new markets, operinS offices in
Taiwan and South Korea - firsts for an iltemadona] publisher ald entered into an
agreement with the Music Copyright Sociery of China to represerl our music in
mainlard China.
Expansion also continued into Easrern Europe with direct opera ons being
The acqulsirion of a 50% inlerest
in rhe Jobete rnuslc publish ng
catalogues further reinforces
El'4li position as the world\
leading pub isher.
ln the year El4l Music Publishing
introduced its on-lne lyric
cataloSue for profession:l music
research€rs. (enrimus cpub.com)

op.fathg 6nd finarkid lwlcvr .ondrucd
Globrl waming pot€ntial
CO, emiRed du€ to eners
!se in b!ildingsfactories
established in the Czech and Slovak Republics, Poland and Hun8ary and licensint
anansemenls in Russia, Slovenia, Croatia, Turkey and the Baltic Srates.
oTHER TSSUES - 8US|I{ESS
Piracy and technology
For many years now our intellectual properry rights have been subject to pincy. In
September 1997, the International Federation of Phonographic Industries undertook
a furdamental reassessment ol Slobal pincy, the results of which were disconcertinS.
It is now believed the pirare marker is wonh in excess of US$5 billion and rhat, globally,
Global waming pot.nti.l
COr emifted doe to en€rty
use in buildings/hctorie!
(Ionne'/fl million)
one in every three music carde$ is a pirate copy.
Such evidence reinforces the need for a tough and orchesnated approach to pirary-
Illustmdve of this was the recent adoption of rwo treades under the auspices of the World
Imellectual Properry Ortanisation.
Pressure from industry and Sovernments will continue on those failing to enforce
or protect intellectual properry rights around the world and we continue to support,
throuSh industry and govemment initiatives, any measures which help protect our valuable
recording and publishing copyrights.
Providint proSress continues to be made towards both establishing and enforcing
copyright legislation, the long tem growth opportunities afforded by technology and diSiral
distribution will far oufweith any threats in the short lerm.
(1997 and 1998 turnove. ar

srandard for environmental management. This means that over 60% of EMI'S CD outPut now
comes from ISO ceflified facto es.
Charitable donations
Charitable donations for the croup totalled f3 6 milllon this year, includinB f2.lmillion
in rhe UK. The Music sound Foundation, established in our centenary year last year,
has made a commendable start and next year will publish its fust annual report for lhe
pedod ended 3l March 1999. This will include details of its activities and allocation
of its funds.
FII{ANCIAL REYIEW
Basis of presentation
The results presented in the Annual RePon focus on EMI & HMV excluding Thom, which
is included under'demerged business in the financial statements section.
For the second consecutive year the results have been srgnificandy alfected by the
movemenr in exchange rates and, therefore, in order to show the underlying performance
of the Croup in its operatinS cunencies, we have reported some of our key financial
paramerers ar bolh constanl (1997 reported) and actual (1998 reported) exchange rates
Turnover
EMI & HMV turnover rose 5.8% to €3,586 1 million at constanl exchanEe rates However'
rhe continued strentth of sterling, mainly aSainst the Deutschmark, US dollar, laPanese yen
and the French franc, reduced reporred revenues to f3,309.4 million.
EMI Music's turnover at conslant exchanSe rates increased 4.1%to 82,592.5 million,
ahhough at acrual rates it fell 5.6% to €2,352-7 million. HMV crouPs turnover Srew 13 1%
at constanl rates to €993.6 million and by 8 9% at actual rates to €956 7 million'
Costs
Cost of sales as a percentage of turnover and total costs is consistent year'on'year Music
publishing royalry cosrs have fallen slightly as a percentage of rurnover, but this has been
offset mainly by increased marketinS and promotion spend in Recorded Music. Dist bution
costs remained broadly unchanged as a percentate of turnover whilst administration costs
have fallen year on-year.
other operating income
orher operating lncome fell from €71.7 million to f45.6 million. This was mainly due to
lower joint venture income as a result of fewer N0 , compilation albums being released and
lower total income fiom the Brduo series during the year'
Associated undertakings
our share of profits less losses of associated undertakinSs increased by el 3millionto
fO.9 million mainly due ro the imPact of Priority Records, held as an associate for rhe full
year. The remaininS 50% of Prioriry Records was acquir€d on 27 March 1998.

operating and inamlal rwiew conti r€d
operating profit by
origin- 1998 El'll & Hi.lV
operating prolit
EMI & HMV reported an increase in operating profir before exceptional items of 2.3% ro
f4O8.5 million at constalt exchange rates. However, rhe srrengrh of srerling resuhed in a
decline to f 371.4 million at acrual exchange rares.
EMI Musics operaring profir before exceptional items rose l 0% ar consram exchange
rates to €378.7 million, while ar actual exchante rates ir fell 8.8% to f341.8 million.
HMV 6loup's operating profit before exceptional irems rose 17.9% to €29.6 million or
18.7% at consranr exchange rares to €29.8 million.
Us doL /l
Analysi3 of impad of
et(hange on operating profit
in 1998 EHI & Hl'lY
The further appreciarion of srerling, mainly against rhe US dollar, rhe Deurschmark,
French franc, Netherlands guilder, and other European currencies. resulred in ar adverse
exchanSe translation impacr of f37.1 million on operating profit at actual exchante rates.
Return on sales
Retum on sales for the conrinuing operarions declined slightly ro 14.6% ar consiant
exchanSe rates, l4.5Zo ar acrual rares, mainly reflecting rhe disappoindng performance in
Japan, Sourh Easr Asia and Germany.
Finance charges
CharSes were f45.3 million higher than in rhe prior year. lnteresr rates rose in borh rhe
UK and US malkets. However, the increase of bonowings in the bonowings,ro,cash mix
in the year. plus fee and inreresr earnings generated from the bridging loan provided ro
HMV Media Group, have resulted in a slighr reducrion in rhe overall average interest rate
on net bo[owin8s. The favourable impacl of the reduced average interest rate was
outweithed by the increased borrowing levels from the rerurn of capiral ro shareholders
and acquisitions (mainly Iobete) made in the year, as well as the high level of borrowings
at 3l March 1997.
Profit before taxation
EMI & HMV profir before aax (PBT) and exceprional items ar consranr exchange rares fell
lO.O% to f342.4 million, while at acrual rares ir fell €73.4 millior (19.3%) ro €307.1 million.
The fall in PBT largely reflects rhe increase in finance charges followint acquisitions atd the
return of capital ro shareholders.
Taxation
EMI & HMV s tax rare was reduced to 31.7% compared ro a rax rare of 36.5% in the prior
year. fhis reflects rhe conrinued change in rhe geographic mix of earnings, funher tax
planning and the favourable impacr of Foreign lncome Dividends.
Minority intcrests
The minoriry interests' charge has fallen from fl 1.2 million in rhe pdor year ro f9.9 million.
The main change was the reducrion in rhe Toshiba-EMt (TOEMI) minoriry lnteresr charge,
pardy offset by the inclusion of 5O% of Jobetes profit afrer tax since July 1997. Ar constanr
exchalge rates, rhe rninoriry interests' charge is flat.

Earnings per share
The adjusred fully diluted EPS was 24.6p for the year, compared to 26.5p (restated) in the
prior year At consrant exchange rates, the adjusred fully diluted EPS is 27.4p, an increase of
3.4% against the prior year This was aided by a reduction in the weighted average number
of shares over the year, followinS the retum of f48o million in capital io shareholders in
l\ly 1997 .
Dividend
The Board is recommendinS a 6.7% increase in the full year dividend to 16.0p, resulting in
dividend cover of 1.5 times.
l{et borrowings
Net bonowings increased by f646.3 million to f95 3.5 million. This was principally due to
rhe return ofcapiral to shareholden of €480 million and total interest, tax and dividend
payments of €26 5.8 million, partially offset by a net benefrt of €93.2 million from the sale of
HMV and lower capital expenditure.
[et borrcwinsr novement (m
I t997 r 1998
operating exceptional item
The €43.3 million charSe for operatinS exceptional items consisted principally of the
costs ofmanagement and property rationalisation consequent upon closing EMI'S head
office in New York, including the termination payment to Jim Fifield, and the disposal
of HMV. I[ a]so included a number of integntion costs following the acquisidon of
businesses during the year
on-operating exceptional item
The profit of f 101.3 million on businesses disposed of or teminated, shown as a
non-operatinS excepdonal item, relates substandally to the disposal of HMV
Disposal of Hl'lV Group
The disposal of HMV for up to f500 million (subject to funher adjustments) was amounced
on 25 February 1998 and substantially completed on 28 March 1998. The Group received
f4l3.l million cash as proceeds before 3l March 1998, but then provided a €20o.o million
bridging loan, which has since been refinanced from the proceeds of a hi6h yield debt issue
made by HMV Media Group plc. Further consideration of €50.0 million is subjecr to certain

oP.rad.B.rd fr|.nd.l nrlcw cotrtirrtd
conditions beinS mer by HMV Media 6roup.
The Group retained an initial investmenr of €87.5 million, which gave us a 45.2%
inreresr in HMV Media Group (which comprises HMV Group and Waterstone's booksellers
which HMV Media Group acquired from 1VH Smirh croup plc on 23 March 1998).
We have accounred for rhis interest as an associate at 3l March 1998, and funher
information is shown on pates 47, 49, 63 and 65 in the financial statements.
Turnover- Op.rating prolit
Con.tant rates b.fore oper-
({.) Constant rate3
(.m)
Second-half performancc
Our srong second.half release schedule lrom Ocrober ro March, which included multi
million selling albums from rhe Spice Cirls, Carrh Brooks, Janet Jackson and The Verve,
produced a 5.1% increase in opemrint proflr on sales up 6.5% ar constant exchange rares,
with sales up by 4.9% in IMI Music and by 12.4% inHMY. Operatint pronr increased
by 3.5% in EMI Music and 17.7% in HMVon rhe same basis.
This reflects at improved performance across the world, including Japan, which
benefited ftom a release schedule and sales better than expected at the dme of the
Christmas rading updare. Performance in other Asian mukers has been affecred
by softer market
conditions, provisions against anist advances
and rarionalisation.
A further adverse exchange impact of €2 3- l million on operatin6 profit and
€ 133.6 million on sales in the second half reduced this improvemenr ro a reported
3.1% and 0.5% decline r€spectively at actual exchange rates. profit before taxation and
exceptional items fell by 5.4% at constant exchange rates due ro increased finance char6es.
Net cash inJlow from operaring acrivities ar f 32 5.2 million was l9.l % higher rhan
the pdor year This was mainly due to lower working capital requiremenB of €67.3 million
partially offset by an increased spend againsr provisions of f41.5 million-
Financial needs and resolrces
Additional working capital requirements decreased from fl34-5 million in rhe year ended
3l March 1997 to €67.1 million in the cuffenr year. This improvement is Iargely rhe resulr
of a smaller outflow on advalces, lower founh qua er shipments and faster pal,rnents by
some US retailers than in the prior year.
The net cash inJlow from operadng acdvities of f298.9 million reflects reduced
working capital requiremenrs offset partially by the increased spend against provisions.
Reconciliation of movemenas
i. 3h.rcholderc' funds am
Shareholders' funds
Shueholders' funds have fallen by €656.1 million rhis year ro a deflcit of f652.6 million
at 3l March 199E, from a posirive f3.5 million ar 3l March 1997. profit for rhe year of
f228.7 million has been offser by dividends of €126.0 rnillion, the return of capital, together
with associated cosrs, of f484.0 million, together wirh ner goodwill charged in rhe year
off276.l million,largely rcladng to the acquisitions of prioriry Records and of an interesr in
HMV Media GrouP.
oTHER TSSUES - FD|AI|CE
Y€ar 2000 cost
We commenled in lasr year s Annual Repofi thar special sreering commirlees had been

set up throughout the Group to correct the systems applications that will be alTected as
the year changes from I 999 to 2000.
Acrion plans have been put in place and EMI'S internal audit unit has been reviewing
their prosress. The Group believes that all vulnerable systems have been identified and will
be rectified ahead of time.
we estimate that the total costs to fhe Group will be €25.0 million which, in
accordance with UITF 20, are being written offas incurred or capitalised where the costs
are value enhalcing to the systerns concemed The costs charyed to the profit and loss
account in the cunent year were €5.2 million whilst f3.9 million has been capitalised
within fixed assets.
EltlU prognmme
The gradual implementation of the sinSle cunency unit (Euro) is likely to incur considerable
costs both in training and in systems application.
We curendy intend to charge these costs to the profit and loss account as incurred.
Costs ro date have not been siSnificafi.
There still remain a number of issues to be resolved with European Monetary Union
and, for this reason, EMI has decided to become a late adopter The issue and process of
possible implementation will be monitored through steering committees and progress will
be included in subsequent Annual or Interim Reports.
Changes in accounting pollcles
FRSg "Associates and Joint Ventures" and FRS l0 "Goodwill and Intangible Assets" were
issued in November and December 1997. Neither were rnandatory for the year ended
3 I March I 998. Both standards were adopted with effect from I April I 998. The main
impact of FRsg will be on the accounting and disclosue of oul new associate, HMV Media
Group. Following the introduction of FRslo, we will have amonisation charges to be bome
in the profit and loss account for goodwill on future acquisitions ald cunent and future
music publishing copyrights held on the balance sheet. The life over which the assets will
During the year EMI continu€d
its international expansion and
now has a presence in over
70 countries.

Trc rlvr rad grea: rL,rtss:r
rl.c 998 Br r awr,:s w rr r ;
both Besr Brrsf Gro!r rr.8€5!
8r rilh Albunr by a Erir r r A rsr
.+-

opereting and fimn.ial nyiw Goitinued
be amorrised is llmiled by FRS 10 ard since we do not feel rhat the amortisation charge
necessarily reflects the diminution in the value for all assers over rime, these charSes will
be removed in the calculation of the adjusted earnings per share.
TREASURY MAI{AGEMENT
Treasurt policies
The treasury activities of the Group are carried out in accordance with policies approved
by the Board. these policies cover lhe managernent of funding, inreresr rare and foreign
exchange rate exposure, and counter.party risk. The policies also cover the use oI financial
inslruments, hcluding derivatives.
The purpose of these policies is to ensure that adequate. cost-effective fundins
is available to the Croup at all times and that exposure to financial risk is minimised.
Group Treasury does not operate as a profit cenfie and the Croup's policies prohibir the
use of financial instruments for speculative purposes.
Appropdare controls and monitoring systems are in place ro ensure all Treasury
aclivities are undertaken within the policy parameters. The Treasury Management
Committee, chaired by the Croup Finance Director, meers tegularly to monitor ald
control Treasurys activities. The department is subject to regular audir by an independent
extemal auditor
Funding and interest rate exposure
The Group is currently funded throu6h the use of short and medium term commirred
and uncommined bank faciliries. Additional bank facilities were a anged in June 1997
to fund the return of capital to shareholders. Overall, the facilities urilised have a broad
range of marurities which are re-negotiated as they fall due in compliance wirh the
Treasury policy of havins facilities available to cover I I 5 % of anticipated peak net
bonowinSs, taking into accounl any set oIT arrangements with rhe Croups bankers,
The croup works with a select group of inrernational banks which service the
Croups requirements.
Following rhe retum of capinl and pursuanr ro the Treasury policy of fixing interest
rates on between 2 5% and 7 5% of ner bonowings, the Group enlered into a series of lhree
year interest rate caps ro hedge against future increases in UK and US irreresr rales. Deails
of rhese are set our on paSe 53, note 17.
The Group also uses interest rate swaps to manage its fixed/floatint Iate mix. Swaps
held at 3l March 1998 are detailed on paEe 53. note l7(iv)a).
Foreign currency exposure
The croup. due to the international nature of irs opemtions, has faced particular currency
exposure in view of sterling s srengrh. The croup has conrinued irs policy, revised in 1997
followinS demerger, of not hed$Dt translation exposures, except to the extent thar overseas
liabilities, including borrowings, provide a narural hedge.
It is also the Group's poliry not ro hedge profir ard loss account translation exposure.
Transaction exposure is hedged where deemed appropriare.
Forward rate contracts held ar 3l March 1998 are derailed on page 53. nore l7(iv)b).

Board of Dircctors
ErecutiYe Directors
Sir Colin Southgate
Lnqtrrnan
Sir Cohn (59) joined thecompnny
in 1983 afrer23yearsln the
inlormal jon rechnology jndustry
llejoined tbe Board rn 1984.
bccam€ \lanaeinS Direclor in
l985 Chief lxecurive in 1987
and was elected Chairman in 1989.
Sircolin is Chairlllan of rhe
noyalopera House andfte Music
Sound Foundarion as w€ll as r
Trusree oI fie NalionalCallery
He is a member of rhe coun of
tbe Bank ot [nSland md is a
Non execurive Director of
The Terence chapmrn Cloup plc
and whirehend Mann Group plc.
Simon Duffy A r'ro^
Ioint Deput\ chairman and
Group Finance Director
Simon Dufiy (48) {'as appoinred
Group Finance Dlecror in 1992
and. in April I998. i r'as.ppoinred
Ioinr Depury Chairman. I Ie joined
from Unired Dilrillen !t here he had
been Operations Direcror since
1989. havinS previously been
Direcror of Corporare tinancc
atGninness.
Prior .o loining Cuinness.
Simon worked in rhe merchanr
banking. m. natement (onsulring
and rhe oll and mining indusrrles.
Simon ha Non execurive
Direcror ot Bcrislord plc. hperial
Iobacocroup plc. HMV Media
Croup pl( and Gl\T. Group plc.
He ii iko r Cove.nor ofThe
lnreilecrual frop€n_! lnstilur€.
Martin Bandi€r
Chi?f Ex?(utive offrcer.
rMI Mustc Publishnq
I'lartin Bandicr(56) ioined the
EN,tl Boird in April 19S8.Iiejoined
EMI M!sic I'ublishing di itsVice
chnirman in 1989. upon lhe
acqulsirion ot sBK Interrai n€nr
$orld.lnc.. in i(hich hc ifas a
loundioSpaftn€r. He is
appoirred C[o of IM I Music
l'ublishinE in 1991.
Maflin beganhis carccr in
music p! bLishing in 197 5.
He is d direcor oi,^SCAI
(Anerican So(
jeq ol Comp()sers.
Aulhols and Publirhers). Ihe
Narional \lusic Publisheri
r\soci:rion (NiltPA), the BMI
Foundarion. Lhe Songwrircrs Hall
ofFime rhe Rock and RoI llall of
l'am€ rnd rhe Syn.use UniveEiry
New York Cily Advisory Boad.
\atere he is ilsoamemberolthe
Board oflrusrees. He is also a
mehber ol NARA5 (NarionJ
Academy of RecordnrS Anr and
S.iences)and rhc Friars
Ken Berry
Chiel Executve 1Jfrct,
FMI Reorded Musi(
K€n Berry (46) joined rhe Board
in April 1998.IIe is Chietlxccurive
ollicerot IMI Recorded Music.
responsible tor rhe Companyi
recordedmusi( business op€rarions
(cn ioined IMI in 1992 is
Chairm,rn and CIO oI ViISin ]\'lusic
on its acquisidon lromrheVirgjn
Grorp.In 1994 he was promored
ro lhe new pon o'Presidenrand
CBO of [M] Recolded Musi..
respontible tor EM I s recorded
mosi. operalionl' ourside ot Nonh
,{meric,r. IIe {'rs appoinled Io his
cunent posilion in June 1997.
Ken began his careel in the
music indusrry in l9?3 with Vir8in
Group whcrc hc eventually beca mc
m.ron8irrg directur 01 Virgin Music.
l{on-executiY€ Directors
Summary of Board
commlttees
Sir Peter Walte6
Joint Depury Chairmon
Sir Perer(67) $'as appoinred lo rhe
Board in 1989 and became DePutY
Chairman in 1990.
sir lerer is chairman of
smirhKline Beecham plc. D€puty
chairnan ol HSBC Holdings pLc and
a Directorol saarchi & Saar.hiplc.
He is Chairnan of $e Truslees oI
rhe Police toundadoD and: Trustee
ol $e lnsrilure oilconomic Alfaits.
He spenr rhe maiority ofhis
ca-r€er s ifi Brilish Pel roletrm
where he !!'as a ManaSing Direcror
for sevenleen y€ars and Chairnan
loreishLyears.
Eric Nicoli
Eric Nicoli (47) was appoinled
torhe Boad in 1993. He isGroup
Chief Fxe.urive olUnired Biscui$
(Holdings) plc which he joined
irom Rown rree Mackinlosh in
1980. Hewasappoinred ro lhe
IIB BGrd 1989 as Chiel
Execudve 'n ot lhe Croup's Iulopean
Opelauons, asquminS his currenr
role in 1991.
tr'c's Chairnan ol rhe Percenr
Club, Deputy Chaiman of Bulinets
in rhe Communirya member of rhe
Execudve Commillee of I he Food
rnd Dfnk Federadon and of lhe
Policy hsues Council oI I hc
lnsrirure of Clocery DislIibution.
Sir Graham Day
Sir Cralam (65) $,a! appoinred lo rhe
Board in 1990 lle iscouns.lto rhe
Adan r ic Canada law finn. Stewarr
McKe[y Yirlinf Scales and is
chanc€llor of Dalhousie Unive15iry
Hc was formerly ChairnDn ol
Cadbury Schw€ppes, Powercen, The
Rover crcup and Brirish shipbuilders.
Sir Griham is Depur! chaiman
of Ugland lnrernar ional HoldinSs plc.
He is also a Drrecrol ola numbel oI
companie! in rhe UK and canada.
includin8 tzird Group plc. The Bank
ot Nova Scoria and EmPireCompany
Limired, He ira consulnol lo the law
tirm Ashulsr \'lonis Crisp in rhe UK
and an Adlisor Io rhe Bosron
consulting Group.
Sir Dominic Cadbury
I'ta I'tBl
SirDominic(58) io'ned lhe Soard
in 1998. He n Chairman ofcadbury
Schwepper plc. Sir Dominic ioined
cadbury khw'eppes in t964 afier
gl]dlrarion from Sranford universiry.
lle joined rhe Board of Cadbury
Schweppes in 197t as lilanaging
Direcrorol rheir loods Dlvision and
subsequently held a number of Board
posirions. b€coning Chairman in
t993
Sir Dominic ir Chairnan of The
E(onornjsr Croup and Dcpury
chrirman ofrhe Qualifrcarions &
Curiculu m Aulhorily ln lanuary
1998, he was appoinr€d h€sidenl of
rhe Food and ftink Federarion.
Dr Harald Einsmann
Harald Einsmann(64)was
appoinredro the Boald in 1992.
He is lx€cutlve vice fresidenr ;nd
a menbcr oI ltoder & Camble!
Main Borrd and Executlve
Commi.tee.ltc began his (areer
r'r'irh Procrer& Gamble in 196l d
was nppoint€d lresidenr of ils
Europ€. Middlc Inst and ftica
ReSion in 1990.
Harald is a Direcror ol lhe
American Chamber ot comm€rce
in BelSiumand a member ol lhe
Advisory Board olrhe lniversiry oI
Bosron inBrusselt. He isa member
ol th€ Board ofSrola. a member
(ompany ot rhe Srvedish
uallenberg Croup.
Hugh lenkins c[E
IIoEh lenkins (64) joined rhe
Boad in 1995. HuEh is Chairman
olThom plc.
IIe is nNon-cxe.rdv€ Diteclor
of rhe R.ank croup plc. ,ohn:on
Ma hey plc and cdrtmore
European Trusr and wa' unlil 1995,
chairman and cbiel E-.(ecudve of
Prudenrial lonfolio vanaSels and a
Direcror ot ft'udenrial Corporalion.
Kathleen 0'Donovan
8SC ACA
KalNeeno Donovan (41) joined
lhe Bonrd in 1997
Karhleen joined BTR as Finance
Dirccror in l99l . She u?s formelly
a praner with lmsl & Youns.
Audit committec
Chatred btt tfu Non.exetutue
Ioint Deputll Chairmon
It'lembership: All Non-execulive
Direcrols. The Group Finance
Direrror and arepresenldrive oI
th€ compdny s exrernal auditors
nomDlly ar rend Jl meel ings.
Remuneration
committe€
choiredbu the N on executive
loint Depiury Chairman
Memberhip: All Non execurlve
Dirccrors. The Chiilmnn normally
,I rend5 meer ings by invilarion.
llomination committee
Choired bu the N on executive
loint Deputy Chairman
l\'lembeIshjpr All Non execulive
Direclors and lhe chailman.
Er€cutive committee
Chaired by the Chairman
Mem bershipr All Execolive
Direcrors. Seniol Compnny
€xecudves may be invird
Finance committee
Chairedby the senior Director
present
Membership: The ChaimDn and
rhe Croop linance Diledor 'Ihe
Croup Trensurel a(endr meetin8s,
as reqdred.
Cap€x committee
(haired bq the Charman
Membership: l hc Chairman
and rhe croup Finance Dileclor
Olher Directon. senior CornPany
exe(uriv6 and exlemal advisers
may be invjred ro anend mee(ings.

Corporate governance
Cadbury Committee
The Directors' report includes on pages 23 and 24 the annual statemenr of compliance wirh rhe Code of Besr practice.
As recommended by the Cadbury Committee, the Board contains a balance of borh Execurive and independenl
Non execurive Direcrors. The Execurive Direcrors comprise the Chairman, rhe Ioinr Depury Chairman & Group
Finance Direclor, and lhe Chief Executive Officers of EMI Recorded Music and EMI Music publishing, the operaring
heads of our two business divisions. The biographies of the EMI Board members appear opposire.
All Directors are required to be re'elecred by shareholders at regular intervals. The appoinrmenr of
each Non-executive Director is for a fixed term of not rnore lhan three years with re-appointment subject to review
by the Nomination Commirree.
Board committees
The principal commitees dre listed opposire.
Greenbury Committee
The EMI Croup has complied with the disclosure requirements in respect of Directors remuneration arising from
the Greenbury Committee recommendadons. These are contained within the Remuneration Committee report
or paEes 25 to 3 l.
Y€ar 2000
As I stated last year, a steering committee has been monitoring any porenrially vulnerable systems across the croup,
andwe are conJident that our operatinS systems will be fully functional when we cross the millennium threshold.
As recommended by the Urgent lssues Task Force of the Accounting Standards Board, a statement on our year 2000
policy and cosrs is included in rhe Operating and financial reviewon pages t6 and 17.
Hampel Committee
Since the publicarion ofthe HamPel Report on corporare Soverlance, the London Srock Exchange has published a
consultative documenr serrinE out proposed principles of good governance and a code ofbest practice on corporate
governance - the 'Combined Code, which consolidates the recomme.ndarions of rhe Greenbury and Cadbury codes
with those of Hampel.
I[ is the intention thar rhe combined Code will be appended ro the Lisring Rules of the London Stock Exchange.
Companies will be required to disclose in lheir Annual Reports how rhey have applied principles ofgood governatce,
whether they have complied with the provisions oI rhe code of best pracrice and explain any areas where rhey have
not.
For the EMI crouP. it is likely rhat our first compliance srarement will appear in our nexr Annual Report, for the
year ended 3l March 1999. I am coffidenl that the Board will conrinue ro guide rhe Company in rhe best inreresrs of
its shareholders and to meer wirh rhe principles and spirit ofgovernance of rhe new cornbined code.
,--
Sir Perer Wahers
Joint Depury Choirnqn

Directors' report
for rheyear ended 3l Mrich 1998
The Chairman's sratement together with the operating and finalcial review il this Annual Report contain details of
the principal operations of the Group during the year and likely future developments.
The sale of HMV Croup (comprising HMV atd Dillons) lo HMV Media Group plc, in which the Company
retains a 43.2% interest (4O.8% on a fully diluted basis) was substantially completed on 28 March 1998.
Dividends
An inrerim dividend of 4.2 5p per Ordinary Share was paid as a Foreign Income Dividend (FID) on 6 March 1998. The
Board is recommending a final dividend of I 1.7 5p per Ordinary Share, making a total of 16.0p (1997: I 5.0p restated).
The final dividend will be payable as a FID on Friday, 2 October 1998 to Ordimry shareholders on the register as at
close ofbusiness on Friday, 28 AuSust 1998, wirh the shales going ex-dividend on Monday 24 August 1998.
Share capital
On 2l Iuly I 997, rhe Company effecred a share capital reorSanisation with the aim of relurninS approximately one
renth of the Croup's rnarket capitalisation to shareholders on the register as at the close of business on l8 luly 1997
and enhancing the Croup's financial structure.
Details of the share capiral reorganisarion and shares issued during lhe year are set out in Note 23 on paSe 57.
In connecrion wirh rhe share capital reorganisation, the Company purchased and cancelled its own shares, as follows:
a) on I 7 June 1997. pursuanr ro the Companys rhen existin8 8eneral market purchase authority granted at the
1996 Atnual Ceneral Meering, the Company made an on'market purchase of 120.000 of its own Ordinary
Shares of 2 5p each for an aggregare amounr paid of f l.404.00O. This purchase was made ro simplify the ta-x
consequences for the share capital reorganisariol of certain share issues rhat mitht not otherwise have been
regarded as paid up by the receipt of new consideration for tax purposes; and.
b) on 22 July 1997, pursuant to rhe specific authoriry tranted at the Extraordinary Ceneral Meeting of the
Company held on l8 July 1997, rhe Company made an off-market purchase from Swiss Bank CorPoration of rwo
ol irs own 123/tp Undesignared Shares and 13.192 of irs own l4p Ordinary Shares for an atgregate amourt paid
of €7 1,642. The shares purchased represenred rhe fractional entitlements that arose lbllowing the share capital
consolidation that formed part of the share caPital reorganisarion.
Substantial shareholder
As ar 20 May 1998, lhe Company had been notified by the Prudenrial Corporation Sroup of companies that it had
a material inrerest of 34.963,05 7 Ordinary Shares (4.44%) ln rhe Company s ordinary shale caPital
Emplolment policies
The EMI Group is a decenrralised organisarion wirh rhe aim ofemploying and developing the best people, puning
them in rhe right posirions wirh a significant level of deleSaled authoriry and responsibiliry and suPPorlirg them with
rhe infrastrucrure and technology required to perform ar the hi8hest levels and at the lowest costs with the quickest
response time.
Responsibility for employment maners therefore rests primarily wirh each business operation under the teneral
urnbrella of EMI Groups policy and procedure guidelines.
EMt Group companies are commifted to the maintenance of a work environment free of discdmination on the
grounds of gender, nationality, ethnic or racial origin, non-job related disabiliry or marital status
The inaugural meeting of the Croupb European Round Table was held in September 1997, in keePing wilh
another of rhe Croups key employmenr goals of encouraSing employee involvement and communication across
as wide a range of business issues as Possible.
Informadon on share options Sranted to employees ls Siven in Note 23(iv) on Page 58.
Supplier payment policy
The Company negotiares paymenr lerms wirh its suppliers on an individual basis, with the normal spread being
payment ar rhe end of rhe monfi following delivery plus 30 or 60 days. It is the Companys policy to senle the terms
of payment when agreeing the terms of each transaction, to ensure that the suppliers are made aware of the rerms. and
to abide by them. The number of days purchases outstanding ar 3l March 1998 is calculated at 22 days.
Charitable and political contributions
Charitable, sponsorship and fund raising activities carried out durint the year within the Group contributed some
€3.6m ro charitable organisations and communities around the world. These included UK charirable donations
amounrinS ao f2.lm. No UK political conlributions wete made

Research and deYelopment
Research and developmenl is the responsibility of the croups businesses. During rhe year, Group expendirure on
research and development rotalled €0.1m.
Directors
The present Directors of the Company are named on page 2O. All served as Directors rluoughout rhe year, other rhan
IGdleen O Dorovan, who was appoinred a Director on 2l November 1997, Sir Dominic Cadbury who was appointed
on 2O February 1998, and Mr M N Bandier and Mr K M Berry who were both appointed after the year end on
l7Ap l1998.
Mr S McAllisrer and Mr J G Fifield also serued as Directors during the year Mr McAllisrer resitned as a Directol
on 28 March 1998, followin8 rhe subsranrial completion of rhe sale of HMV Croup to HMV Media Croup plc.
Mr Fifield resigned as a Director on l7 April 1998.
As advised in the Chairman's stalement on page 5, 5t craham Day has indicared his wish lo relire as a Direcror
with effect from rhe conclusion of the Annual General Meering.
Sir Peter Walters retires by rctadon pursuant to Arricle 1 l2 at the Annual Ceneral Meetint and, being eligible,
offers himself for re-elecrion.
MI Bandier, Mr Berry Sir Dominic Cadbury and Katl e€n O'Donovan all retire ar the Annual General Meeting
pursuant to Arricle I l9 and, being eligible, offer themselves for re election.
No Director had a marerial interest in any contract of significance subsisting at the end of or during the year
involvinS any Croup compaly, other than those who have a service conrract. Details of Direcrors' inreresrs in the
shares of the Company at the year end and entidement to notice are set oul in the Remuneration Cornmittee report
on pages 25 to 31.
Auditors
Emst & Young have expressed their willingness to continue in office as auditors and a resolurion proposing rheir
reappoiffment and authorising the Directors to determine their remuneration will be put ro the Annual ceneral Meeting.
Corporate governance, going conceln and internal financial control
The ComPany has complied throuShout the year with the provisions of the Code of Besr Pracrice issued by the
Commi[ee on the Financial Aspects of Corporare Covernance (rhe 'Cadbury Committee").
The Directors, having made appropriate inquiries, believe that the Group has adequare resources ro conrinue in
oPerational existence for rhe foreseeable future. For rhis reason, they continue to adopt the going concem basis in
preparin6 the accounts.
The Board of Directors has overall responsibiliry for the croups syslem of inremal financial confiol. The full
Board meers regularly throughoul the year and a number of matters are specifically reserved for irs approval. This
ensures that the Directors maintain control over siSnificant strateSic, financial and compliance ma[ers. The system
of controls can provide only reasonable and not absolute assurance against material misslatement or loss.
The Group has an esrablished oryanisarional structure with clearly defined lines of responsibiliry and reporting.
The Board has devolved to executive manatement the responsibiliry for rhe implementation and mainrenance of the
crouP's system of internal financial control. Each business unir operates in accordance with procedures and policies
ser our in Croup manuals which dicrate policies applicable, in common, to all unirs.
The Croup operates a comprehensive annual planning and linancial reporting process and prepares borh
medium-lerm statetic Plans, which focus on key business risks, and annual budgers, both of which are formally
approved by the Board. The Croup's performance is monirored a8ainst budger on a monlhly basis and all significant
vadances are invesligared. The Group also has defined aurhorisalion procedures in respect oI cerrain mallers,
including caPital exPenditure, investrnenrs, the Srantins of Buarantees and rhe use of financial instruments.
The srrength of an internal financial control system is dependent on rhe quality and inregriry of manatemenr
and staff. Intetriry is reinforced by an annual compliance cerrificarion process throughout rhe croup, under which key
executives and managers siSn a cenificate confirmint their compliance with rhe Croups rnanuals.
The internal financial control syslem is monitored and supporred by an inrernal audir funclion in each of rhe
major business units which reports both to the Audit Comminee and management. The responsibilities of the internal
audit function include assessint risks, recommendint improvements in the conrrol environmetr and ensuring
comPliance wilh the Groups procedures and policies. The work of the internal audit departmenrs is focused on rhose
areas lhat are considered to have the highest risk. The Audit Commlttee reviews the risk assessment and audit plan
prepared by each of rhe internal audil deparrmenrs.

DliEtorC itPat cor hu.d
The Board has reviewed the effectiveness of the Groups system of internal financial control as it oPerated during
the year.
Emst & Young have reviewed the above statements in so far as they relate to the paragraphs in the Code of Best
Practice that the Iondon Stock Exchange has specified ior their review and their report is set out on page 33.
lssues of share capital
The existing general authority of the Directors to allot shares and the culrent disapplication of rhe slatutory preemption
rights, as confened at the 1997 Amual ceneml Meeting, will expire at rhe conclusior of the 1998 Anrual
CeneralMeeting-
Article l4 of the Company's Articles of Association contains a general authorily for the Directors to allot shares
in rhe Company for the period (not exceeding I 5 months) ("rhe prescribed period') and up to a maximum a8EreSate
nominal amount ('the section 80 amounr") approved by an ordinary or a Special Resolution ofthe Company. In
addirion, tuticle l4 empowers the Directors to disapply statutory pre'emption riShts durin8 the prescribed period in
order to allot shares for cash in connection with a rights issue and in other circumstances up to a maximum aSSresale
nominal amount approved by a Special Resolution of the Company ('ihe Section 89 amouni ).
A Special Resolurion will be pur to shareholders lo renew the authority to allot shares up to €38,209,477
(referred to in rhe resolution as the Section 80 amouni) representing approximately 34.7% of the company's total
share capiral in issue at 20 May I 998 and which comprises the a8gregate of €36.7 I 6,8 5 5 (being an amoun t equal to
one-third of such issued share capital) an d, El,492,622 (beinl the amount required to be set aside to meet ri6hts of
subscription over shares in the Company). However, in conformity with the pre emption guidelines of the
lnvestment Committees ofthe Association of British lnsurers and the National Association of l'ension Funds, this
authodty is limited as retards issues of shares wholly for cash otherwise than by way of a rithts issue to a maximum
of€5,507,528 (reiened to in the resolution as ihe Section 89 amouni'), rePresentinB 5% of the ComPanys lotal
ordinary share capital in issue at 20 May 1998.
Other than rhe allotmenl of shares arisint from the exercise ofoptions in respect of the Executive and SavinSs-
Relared Share Option Schemes, rhe Direcrors have no current intention of using the authority Siven in order to allot
further shares. The autho ty will expire on l6 October 1999 or al the conclusion oI the Annual General Meeting in
1999. whichever is sooner
The Special Resolution dealint with this matter appears as Resolution 5 in the Notice convenint the Annual
General MeetinS on page 70 of this Annual Reporr.
Purchase of own shares
The current aulhorily for the Company to purchase its own Ordinary Shares, as conferred at the 1997 Annual Celeral
Meering, expires al lhe conclusion of the 1998 Annual Ceneral MeetinS.
A Special Resolution will be put to shareholders to renew the aurhority for the Company to purchase up to a
maximum of 78,678,976 Ordinary Shares, beinE l0% of rhe issued shale capital of the Company al 20 May 1998.
The Directors have no present intention of using rhis authority and, in reaching any decision to purchase
Ordinary Shares pursuant to this authority, would take into account lhe ComPanys cash resources, capiral
requirements and rhe effect of aly such purchase on the lax position of the croup and of shareholders as a whole
and on earnings per share. The authoriry will expire on l6 October 1999 or at the conclusion ol the Annual General
Meeling in 1999, whichever is sooner It is envisaged thal the Directors will continue to seek renewal of lhe
aurhority annually.
The Special Resolurion dealing with this matter appear as Resolution 6 in lhe Notlce convening the Annual
Ceneral Meetin8 on paSe 70 of this Annual Report.
Annual General Meeting
The 1998 Arnuai General Meerint of the Company will be held at I i.30am on Friday, l7 luly 1998 at the Royal
lancaster Hotel, Lancaster Terrace, London W2.
By Order of the Board
C P Ashcrofl
Secrelary
2J May 1998

Remuneration Committee rcport
Ior rhelear cnd.d Jl N1.rrch 1998
The Remuneration Committee ("the Committee")
The Commirtee's role is to esrablish and review the lerms of employment ald remuneration of lhe Executive Directors
and other key senior executives. I chair the Committee which comprises all the Non'executive Directors (listed on
page 2O). No Execurive Direcror sirs on rhe Committee a]though Sir Colin Southgale is inviled to anend its meetinSs
on matrers other than those conceming himsell The Committee has access to advice from internal sources and seeks
external advice as and when it requires.
The Company has lhroughour rhe year complied wirh Secrion A of the best practice provisions annexed to rhe
London Srock Exchange Lisring Rules and rhe Commiltee, in serrint remuneralion policy. Sives full consideralion to
Section B ol those best practice provtston..
Remuneration policy
The Committee's policy, in deciding appropriate levels and forms of remuneration' reflects:
. the need t0 rectui( and retain tlp cdlibre intematilnol management hauinq reqord to remuneration let els and praclices in the
intemqtilnal music and entertainment industry ;
. a strlng linkbenneen reward and perJormarce. with emphasis on the lonqer term retums to the shareholders.
The Commirree has developed remunerarion plans which align the inlerests of executives and shareholders byl
. prlDiding qhighlL1 clmpet ine blol pau packngebur only when truly wdnanted bt1perJormante:
. re(1,gnising the inrylnance olanoiningthe c\mponys Jinanciol targets;
. emphasising the longer term through awards of shares which executives arc enfiunged or required to hold.
ln assessing remuneration, the Committee looks at competitive market practice, supported by external and
independent surveys covering a range of companies. The Committee takes into account such factots as the nature,
size, complexiry and internalional profile of these companies. relative to our comPary.
Elements of r€muneration
Base salary andbeneJits
The Executive Directors' base salaries are ser by rhe Commirtee and are normally reviewed annually. Benelits
rypically include car,life. disability and healthcare benefits.
P e rf o r mant e - r elat e d int entiv e plons
The Execurive Dlrectors and orher key executives normally parlicipate in Ihe shareholder approved Senior Execulive
Incenrive Plan which provides the opportunity to earn annual boluses, based on achievement of pre-established
Group or business unit targets, payable in cash or as share awards with provisions which encourage or require the
shares ro be held. There are rwo important profir levels established for rneasuring perfotmance: a deman dir.STargel
Pr0lif kurl, ar which the targer award is earned; and a Maxinrn Prd,fir truei. at which rhe maximurn award is earned.
The value oI target and maximum awards is calculared as a percenrage of each panicipant s base salary'. The current
values ar rarget and maximum perfbrmance respectively are 7O% and 140% for Sir Colin Southgate and 5 O% and IOO%
for Mr Dufry
Following confirmarion of rhe year's perforrnance, the appropriate award is made in two pafis. The first part,
rhe incentive award. is paid inrnedialely or, a( the execurive's requesr, may be made in the form of a deferred share
award. During deferral rhe shares do not earn dividends bur the num-ber of shares is increased by one-third if deferred
for rhree years or by rwo-rhirds if deferred for at least six years (any increase being included in reported remuneration
only at the end of three and/or six years'delenal),
The second parf ls a performance share award normallyvesting only after a further tatget is achieved over at
leasr a three-year period (ir being incJuded in reporred remuneration only if and when this tartet is achieved). The
current rarSer requires EPS growth to exceed inflation by 2% per annum compound. If and when the target is
achieved, the award is paid immediarely or, ar rhe execurive s request. may be deferred lbr three furrher years. DurinS
deferral the shares do not eam dividends bur the nurnber of shares is increased by one-Ihird if deferred for three years
(any increase being included in reporled remuneralion only at the end of three years deferral).
While the Executive Directors now only panicipate in lhe Senior Executive Incentive Plan, awards remain
outstanding under former incentive plans as derailed in previous years Alnual Reports.
The Execulive Direcrors share inlerests arisint lrom fhe Senior lxecutive lncenlive I'lan and the forrner
rncenrive plans are noled on pdte 29.

Remuneration Committee rEport aontinued
Share options and. share appreciatian riqhts
Execurive options are granted to the lxecutive Direclors and other key executives based on the achievement of
the same tarSels as appJy under the Senior Executive lncentive Plan. Executive options are normally exercisable
between three and ten years from the dale of tranr and, il Sranred o[ or afrer 2 5 August 199 5, ooly if performance
targets set by the Committee are mel. The target set for execurive options granred in the year relates to Total
Shareholder Return, i.e. based or share price growth plus rhe value of dividends paid. To become exercisable, EMI
Croup's Total Sharehoider Return must have at leasr equalled the nedian of those companies which comprised rhe
FT-SE 100 al the start of the year
The assregate exercise price of outstandint executive options over new issue shares is limited lo four rimes
annual earnings with any excess being granted over exislint shares. Up to 22 July lg94, any excess was granled
as a share appreciation rlght whereby, inslead ofbuying the shares on exercise, rhe execurive js paid the value
ofany share price appreciation (over and above UK inflalion) berween the dale olgranr and exercise.
The UK-based Execulive Direclors alons with all other eligible employees are also entitled ro apply for options,
normalJy annually, under the Savings-Relared Share Option Scheme ( ShareSave ).
The [xecutive Directors'share oprions and share apprecialion rights are noted on page 30.
Ret ircme nt b en el it s d n d c o ntr ib ut i ons
The UK based Executive Direclors are executive members of rhe UK Pension Fund which provides them, on normal
retirement at age 60, with a pension of up to two-rhirds of base salary. Menbers conrribute 4% of base salary
On death rhere is a spouse's pension of two thirds of the member's pension (i$odnt rhe impact of any exchange
of pension for a lump sum on retirement). plus child allowances if applicable.
An early retjremenl pension may be pajd on leavint on or after age 50 bur the pension is reduced by %% for
each lnonlh that pension starts earlier than age 60. Subject to rhe Companys conserr, rhe reducrion applied may
be less.
Pensions in payment are guaranteed to increase each year. Up ro age 65, the whole pension is guaratteed to
increase by LPI (the )ower of the previous year's increase in Retail P ces Index or 5%).Afrerage65, the pension
io excess of the Guaranreed Minimum Pension or GMP (lhat parl of the pension which replaces the State Earnlngs
Related Pension) is guaranteed to increase by Ll'l while rhar pan of rhe CMP which built up since 6 April 1988 is
guaranteed to increase by the lower of the previous year's increase in Retail Prices Index or 3%.
Transfer values are calculared on a basis which assunes rhe pension would be drawn at rhe earliesr date
where no reduction would apply and with allowance for future pension increases (both before and after pension
commences) to reflect rhe past pracrice of granting increases greater than those guaranteed.
For those joininS the UK Penslon Fund afrer 31 May 1989 (including only Mr Duffy of the current Executive
Directors), the Cap" (as defined in the Finance Act 1989) limits salary for pension purposes to f87,600 from 6 April
1998 (1997: f84,000). A separale defined cont bution plan provides benefits to rhose affected by the Cap, to which
the Company makes an age related contriburion ranging from 12% to 24% ofbase salary above the Cap.
Mr Fifield panicipated jn IMI Music's US defined contribution plals, the total contriburion to which was 14%
and approximately 35% of pay by Mr Fifield and the Croup respeclively (pay included rhe value of the incentive
award pafi of the Senior Executive lncentive Plan, consistenr wirh US pracrice).

The Execulive Dhectors retirement benefits and contributions
are shown below:
Defined Eenetir Plan OnlY
Accrued pcnsion en lem.nt
Ag. d at Dir€crors comPiny ]ot:
tl I'lrfrh conrribuion! conoiburiont lndease 3l il'rch
t998 inye;rt iryeai in -!e8l
19901
Y'aF I ooo tooo t oooPd COOG
sir colin southSate 59 22 Nil 45 386
S P Duffy 48 3 69+ 3 t7
j G Fifield 55 292 725
i lacettner {reslgnea 28 March 1998J 50 10 Nil :25 100
rctull oI thc Fund! srronsIinancjal Position)
had he leh emplolrenr r llI4d,hlqqEud(rudlddreolh'\rnP rle"r|(r
leav'n8. ifeadl€r'
, i..i"ai"S trt.t't t,nnt,.2t 725) Paid in rcspecr orrhc charSe adsinE irom rhecomPanvt'onrdburions on basc sahN in excessof rhe cap
Seruie contruats
SilcolinsouthSateandMrDuffyhaveseruicecontractswithrhecomPanywhichhavenoticeperiodsofoneyear
o, t"r, "*."p,
,i.r. rollowing the pasr reducrion in the normal norice period. borh sewice contracrs provide for a
36 months notice period to apply from the Company following a change of control'
Mr I c FiJield
Mr Fifield hada service conrracr wirh a subsidiary EMI croup Nonh America Holdin8s, Inc ( EMIGNAII') under
which rerminarion could nor normalf have occurred before 3l March 1999. Mr Fifield would have been entitled
to, broadly, three rimes base salary pltls average annual bonus plus the value of fringe benefits had' prior to 3l March
in*, .u,ii, ,rro*AH rerminatedrhe contra-cr wirhout cause or Mr Fifield rerminared the conrracr because of
EMIGNAHs breach. Under rhe terms of rhe conlracl' Mr Fifield had a dury ro mitigate his entillement to damates
""itlii*"t^n *d terminated the conlract without cause and then only to a limited extent.
on t7 April 1998 Mr Fifield resilned from the Board and as presidenr and Chief Execurive officer of EMI Music'
EMIGNAH has paid torul .ornp"nr.tio"n of $10.6m (f6.27m) for rhe early rermination of the contract and has made the
reriremenr contribution of $ 10.4m (€; 15m) whictrwas due to be paid on 3l March 1999 under the contract These
amounrs will be included in n"xr yJerrnual Reporr. Details of Mr Fifieldls remunerarion, retirement contriburions
and share interesrs ald options as at anJror rhe year ended 31 March 1998 are included in rhe appropriate tables in
rhis Report and, in addirion, rhe tootnores ro th;appropriare rables on pages 29 and 30 detail Mr Fifield s entillement
ro share awards and oPlions on hi\ leavint
Non-€r€cutive Directors
EachNon-executiveDireclorleceivesabasicfeeplusanadditionalsumlorallcommitteememberships.Ileceivea
fultheramountinlespectofmyaddirionaldutiesandresponsibililiesinmycapacityasJointDepuryCiairman.The
level of these fees is ser by rhe Board on which matter rhe Non,execurive Direcrors play no part. The Non-exectttive
Directo$ do not parlicipate in the companys incentive' share oPtion or retirement plans' nor do they have service
aon,r"a,r, bu, is subject to review at least every three years'
""ah "pP;intment

Remuncradon Camrittae nDort contirued
Remuneration details
Annual remuneration'
Executive Directors:
t998
t99i
t6..rl*t tn.enttv€ lot t lbral
or r.., B.n.fiE nmrn.ation in ,Ea
a'ooo a'otxt {,000 a!00 I OOO
Sir Colin Sourhgare 543.3 2 t.3 lo5.5t 670. t 1a4.5
S P Duffy
280.8 t7.4 3g.7r 336.9 3J4.g
I G Fifield (highesr paid Direcror) 2,083.3 430.6 t{it 2,5 t 3.9 3,782.7
S McAllisreri 252.5 t6.O 220.0 530.5 133.0
M E Mercalf (resigned l9 Augusl 1996)
Non-executive Directo^: - 122 6
Sir Perer Walrers 52.5 52.5 52.5
Sir Dominic Cadbury (appoinred 20 February 1998) 2.4 2.4
Sir Graham Day Z2.S Zl.S 22.5
::'l'T-" zz.s zz.s 22.5
lr K JenKrrs 22.5 22.5 22.5
t L Nicoli 22.5 2Z.S 22.5
KA O'Donovan (appoinred 2t November 1997) 8.0 8,0
Lord Criffirhs of Fforesrfach (rerired 16 Axgust 1996) g.4
Total 1998
3,3t2.8 4gS.3 414.2 4,2t2,,
Toral lq97 j.2j2.g 410.2 L6b6.5 5,J49.6
p.rrorronceand/orsubi(r ro rorrr nure ( see n.h rahtc bcto", n" ,qr'us,,", n."";";;;;;;":.;,"8,r,
' il::::ilf;:,::T:i:ii:1,:il':$n:::llili::il)^nr,r,"',"-."r.,i,'-a,'.""",",'"".i*",li"""o,,".adius,in'rorin,eresronbonowi,rss,ncured,o
on 2E \'rarh r ee8 he resi8ned lrom rhe Boa.d ro ro,n r Mv u"a" o."p pr.
""a
r,o lnur;,;:i.ilu;r;."",,," "".
p€rrornance awar* lnder rhe senior Exe.unve
Remunerotian from pnot year shats qwq , sgqsmq nbe.lntma t,
sircorinsourhsa,e
t998
sharc awardd awads ydu.t ,;;; \,atuei
t"'1*: *r";'It ,ii: ^"""ffi 'ffi
s l'Duffy _ t6,620 g2.t Nil Njl
I C Filield
s McA isrer*
Totat
I,749,0a2 2t2'708 9'788.0 171,393 1,966.7
_ 46,789 243.8 Nil Nil
,749,082 3t4,353 t0,335.7 t7t.t93 t,96b.7
:ijtili,i::;:i;;:iliil:ji1.":l:li:ili,1:llil:l'-"::)iiliT.;".1:l::l::,-*'*"".,e.Jedd,,JrdnEh
r rhF,.Dr..pnr(v, r,r"rd.d,,,rtr,n"n,ro,F,rr,r.d,h er.a,s,ndl\s,"n,.dLndohhJi,:.;.,^
. 3l Mrch 1998 tlheteupon ,r'" *. t", *." ,*t""r"o r.,o"a"*t1, e(rive IAP I1993 whichbccam.mn.o rilgenron
I
"
I lF t{J c ut \hrrer tr based on rhe,halc on.e $hc,,
-'---
* on,hesa,;o,rhcH\,rvbu;;;;;;;.;;;;;11;;:'l;i::::::::l.l,j1^:l'"1:l::
uderdresenio,Exe.u,Nern;,,,;;,,.;;;;;;;,'*;i::l:li::i:;T":::Ln'ii::"i.,,"#il,l",jii:;:iJ,f#ilt::I:ff,Ifff:lil,ffi:l*:
'',r:1,'::i''y,-"*"'--,r'"""-,..r,."p'J

ordln.rr sharcs or l4p .i.h
odrndy shares or 2 5p each
& .t 3l lhEh 1998
K A O'Donovan (appointed 2l November 1997)
t
inleresrs under perrormance{elared incenrive phns as noled in lhe followinS rable.
Ar thedare olappoinmerr ro rhe Eoard.
I Followins Mr Fitield s resi8narion on l7 Apnl 1998, all 629.?51 ot rh$e shires utuler non.conin8enl rharc awatds b€came avaiLble Ior release.
l APril
1997 Mjosmenri
inyeart in year added in yer inyear
. ConrinSenr share awarG aF ft6e which remin dependenr on fururc ?€rformance and/ol subjed to lorlenure. The tiStrl€s shown therelore rened the nnximun
I
F:sible potendal sh.r€ inrehts.
adjusred lor lhe share capital reor8a,nisalion in lhe subsequent columns
These awards are in respe.r oI perlormance in fie year ro 3 | Marh 1997 .waded on 6 lune 199?. No share awards will be made in lespecl oI lhe,€ar lo 3l Mar.h ls98
unril alrer rhe 1996 pr€lirniniry Announcenrefl and rhe €xact number ot shares awarded will be delermined by fte ma*el share Price a! fte dne of lhe award and wlll
be included in ne y€ar3 Annual Repon.
ln addilion m rhe shares shoM tor Mr Fifield, u I,39I shares became non.conringenr und€r lhe lMl Music lon8.Term In.enlive Plin In resp€cl ol lhe rhree year ry(le
end€d 3l Mdch 1997, as noled in lasl yeal s Annuai RePon
* rollowins Mr Fitield s resignation oo 17 April 1998. l9?.6t9 oI fiese shar€s und€r (onriqenr shir€ awdds vesGd and beGme available for rel€a5e all his remaitung
contin8e shaF awalds over 662.224 shares have laFed
tn additioL n ludiq adiustmenr lor rhe share €piral r€oryanisaion on 2l ,uly 1997 149.lt6 shares (orr oi a maximum porential 318, 127 shatet wlll be rcleased
ro Mr Fifield aier rh€ 1998 Preliminary Announcemenr in respecl ol rhe rhree.year cyde ol th€ lMl Musi( LonS.Tern lDcendve ?lan ended 3l Mar.h 1998

R€r ncrdbn Comrittee nport cot inuad
Sir Coiin Southgate
Total
D.re
25 Augusr 19951
23 Augusl 19961
23 AuSusr 19961
2'l Marcll 1991"
6 June 1997t
shi(h t904.181 r€lired ro Nrr Fiiield)
In addir ion ro he sharc oPl ions shown in lhe rable. iollowjng his lervinS rhe compa ny on 28 \4irch l99s on rhc sale of rhe HMV business. Mr lvc^lliner is enridcd ro
exer.ise ,rll or his execur ive share opr ions. o!€. a roral ol 180.224 shdr\ ar a h?iShrcd exerce pricc ot 518.206p (inclu.linE 39. I to shres :r I t7 5p granren on 6 lune
19911ror i pedod oi onc y..r and ro cxercise pan othis sharesJve oprion over :r.7oo shares ar 466p Ior a penod ofsix monrh!.
Thc.losinS mjd narkcl share Pnce on 3 L March ls98 was496.5p. Th. rans. ofclosin8 nid marker share pdces dldng rhe ye,r! (idjusred for rhe share.ipirat
r@r6ani5ar jon) \es 647.82p ro 428.tp
I FollosinS h1s resi8nation on lTApil 1998. Mr Fifield; rh.re oprion 8ranrcd on 22luty 1994 remdins exer.j$ble ror a period or one year: allhis rerininS share options
t txe.urivc sh,rleoplion - nomally cxclcisable dulinS lhe pedod comnen.inS no carlier ihan three yeaA andending nolaler rh,rn len yea$ kom ftedircgranred: fe
exeKise oralloprions Snnred on otilr€r2t ugusl 1995 is nom,)lly subjecr roichisenenr oi pcrforDnc. tarSers as relered to on piSe 26. [xecuiive shire oDrion
n8hr\ $ere rnended 23 auSusr 1996 ro refleq rhcdeme€er For non U( residenrran appropiareadjuemenr was rude ro r(h opr;u hu,. i\ rhe tntirnd RNenue
vJlue opr ion ivas sranlcd inrcnd.d to achicve broadly rhc sanc cllccr rs ir rhe adjunmenr had bccn made and whi.h can ont) be exerised wirh a;d
",
,r," ,"." ,"^ ",
rbc oriSinal oprion ro whi(h ir relares
4 sharetrve oPdon nonnrll} exer.i!.lble tor r six nonrh period folloi! inE.ompler ion of evints ro eirher a rhree or a iive.ycar Sharesrvc conrracr.
Dire lrs shorc lppreoanon rrqhrs' $djuskd I0r hc sharc pinl rnrqdnsaliln)
indexed
pncear
Price ar 3l -U .h
Erant l99Et
ren ye s rrom rhe dar. granred. No shde apprcciadon riEhrs s cre gr,rnred. excrcj*d or liFcd in rhe ],.ear.
olanyappre.iarion by conparison wirh rhe share pri.e ar rhedare otexercise orrhe share appreciarion rghr.

ieneral maftcrs
The Company hedges the cost of providing share awards under incenrive plans rhrough the EMI Croup ceneral
Employee Benefit Trust (see Note 14 on page 5O). As potential beneficiaries under the terms of rhis Trust, all EMI
Group employees, includins the Executive Directors, have a potential interest in th€ shares held by the Trust.
On 29 April 1998 the beneficial interests of Sir Colin SouthSare, Mr Duffy and Mr Nicoli increased by a further
35, 37 and 2E shares respectively as a result of dividend related re-investmenrs under EMI Group Personal Equiry
Plans. No other uansacdons subsequent to 3l March 1998 had been notified as at 20 May 1998.
No Director had any intercst in any shares or debenrures ofany subsidiary of the Company.
The Companys Register of Directo$ lnterests is available for inspection in accordance wirh rhe provisions
of the Companies Act 1985 and the London Stock Exchange Listing Rules.
l{ew Executive Dlrectors
MrMN Bandier and Mr KM Berry
Mr Bandier and Mr Beny were appoinred as Directo$ of rhe Company on l7 Apdl 1998.
Mr Bandier's current service conmact with EMI Entertainment World, Inc.. a US subsidiary provides a fixed
five'year telm to 3l March 2001. Mr Benys cuIrent seruice connact with EMI Music Limited, a UK subsidiary
provides a fixed five-year term to 3l August 1999.
Following thet appointment to the Board, agreement in principle has been reached wirh Mr Bandier and
Mr Beny under which their service contracts will be amended from fixed ro rolling rwo-year rerms.
Taking into account common practice in the music and entertainmenr industry the Remuneration Commirtee
considers rhat these terms are appropriate.

Std€rsrt of Dirccton'rcsponsibilities in rc+ect of the financhl stdements
Company law requires lhe Dirccto$ to prepare financial statements for each financial year which give a true and
fair view of the shte of affatus of the Company and of the crcup and of the profit or loss of the Group for that period-
In preparing those financial statements, the Directors are required to:
c select suitable auounting policies and thm aWlU then couisttn y:
. mokc judgenentsand atimatsthat arerewnable ondpndmt: ai
. stote u,hetlut Mitable acuunting stadardshavekenfullmd, subjat to any nataial depafiures disclosed and explalnedin
tl1a lincncial sutonrnlf.
The Directors confirm that they have complied with the above requirements in Feparing
the fimncial statements.
The Directors are responsible for keeping proper accounting records which disdosg with reasonable accuacy at any
time, the financial position of the Group and enable them to ensure that the financial statements comply with the
companies Act 1985.Ihey ue also resporsible for saleguarding the assets of the Group and hence for takinS
reasonable steps for the prevention and detection of ftaud and other ineSularities.
Financid contents
33 Auditors'repon
34 Consolidated profit and loss account
36 Balance sheets
3? Statement of total recoSnised gains and losses
3'1 Reconciliation of movements in shareholden'funds
38 Consolidated cash flow stalement
40 AccountinS policies
43 Notes to the financial statements
68 Fiveyear summary

Auditors'report
Report of the Auditors to the I'lembers of Elill Group plc
We have audited the financial statemenm on pages 34 to 67 which have been prepared under the histodcal cost
convendon and on the basis of the accounting policies set out on paSes 40 to 42.
Respectiye responsibilities of Dlrectors and Auditors
As descdbed on pa6e 32, EMI Group's Directors are responsible for rhe preparation of the financial statemenm. It is our
responsibility ro form an independent opinion, based on our audit, on those financial sratements and to report our
opinion to you.
Basis of opinion
We conducred our audit in accordance with Auditing Standards issued by the Audiring Pracrices Board. An audit
includes examination, on a test basis, of evidence relevant to the amounts and dlsclosures in the financial staternents.
Ir also includes al assessment of the significant estimates and]udgements made by the Directors in the preparation
of the financial statements, and of whether the accounting policies are appropriate to the Croups circumstances,
consistenrly applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered
necessary il order to provide us with sufficient evidence to give reasonable assurance that the financial statements
are fiee ftom material misstatement, whether caused by fraud or other ineSuladry, or enor. In forming our opinion
we also evaluared the overall adequary of the presenlation of information ir the financial sratements.
0pinion
ln our opinion the financial slatements give a rrue and fair view of the state of affairs of the Company and of the Group
as at 3l March 1998 and of the profit of the Croup for the year then ended ald have been properly prepared in
accordance with the Companies Act I 98 5 .
Corporata govcrnance matters
ln addition to oul audir of the financial statements we have reviewed the Directors' statements on pages 23 and 24 on
the Company's compliance with the paragraphs of the Code of B€st Practice specified for our review by the London
Stock Exchange and their adoption of the going concern basis in preparing the financial statements. The obiective of
our review is ro draw altention to any non-compliance with Listing Rules 12.43(j) ard 12.43(v).
We carried out our review in accotdance with Suidance issued by the Auditing Practices Board, and assessed
wherher the Directo$' statements on going concern and internal financial control arc consistent with the information
of which we are aware ftom our audit. That Suidance does nor require us to pedorm additlonal work necessary to,
and we do not, express any opinion on the effectiveness of either the croups system of intemal financial con[ol or
its corporate govemance procedures, nor on the abiliry of the Croup to continue in operational existence.
Opinion
wirh respecr to the Dtectors' statements on intemal financial control and Soing concem on pages 23 and 24, in our
opinion the Directors have provided the disclosures required by the ListinS Rules referred to above and such
statements are consistent with the information of which we are aware fiom our audit work on the financial
statements.
Based on enquiry of cenain Directors ald officers of the Company. and examination of relevant documents.
in our opinion the Direcrors' statement on pages 23 and 24 appropriately reflect the Companys compliance with rhe
other paragraphs of the Code specified for oul review by Listin8 Rule 12.43(j).
Emst & Young
Chartered Accountants
Registered Auditor
London
27 May 1998

Consolidated profit and loss account
Tumover
- continuinS operations
- difqlrttgg4gp-qlions ( 1998: HMV; 1997: HMV and Thom)
Total tumover
Cost of sales
Gross profit
Distribution costs
Administntion expenses
Other operating income (expenses)
Opgra!{rg prolt
Non-opentint exceptional items:
Profits 0osses) on businesses disposed of or terminated
Profits (losses) on disposal of fixed assets and investments
hofit before finance charges
Finalce charges
hofit on ordinary actMties before taxation
Taxation on profit on ordinary aclivities
hofit on ordinary acrivities alrer taxation
Minoriry interests (equity)
Profit attributable to members of the HoldinE company
Dividends (preference)
Dividends (equiry)
Dividends (demerger)
Transfer to (from) profit and loss reserve
oter R.conclllatlon of adjustcd earnlngs
hofit anributable to members of the HoldinS Company
(includinS exceptiona.l items)
Dividends (preference)
Eamings
Eamints
Adiustments:

lxcepnonal
D€m€rged business
rool (Exl r llt.lY)

Fixed asscts
Music publishing coppighrs
Tangible fixed asse(s
Investments
Investmenm: own shares
Curent arsets
Stocks
Debtors: amounrs falling due within one year
Debtors: amounts falling due after more thal one year
Investments and short,term deposits
Cash at bank and in hand
Cruditors: amounts falling due within one year
Boffowings
Orher creditors
l{et current assets (llabiliti€t
Total assets lcss current liabilities
Crrditors: amounrs falling due after more thal one year
Bonowings
other creditors
Capital and rcserves
Called-up shue capiral
Share premium account
Capital redempdon reserve
Other reserves
coodwill
Profit and loss resewe
Equity shercholderc' funds
l{inority interrsts (equig)

Statement of total rccognised gains and loeses
Profit for the financia.l year
cunency retranslation
(tojset galns grrlorelgn cunency bonowings
Reconciliation of rnovements in strareholders' funds
for fte year ended 3l Mdch lsBE
Profir for rhe financial yedr
DMdends (preference)
Dividends (equity)
Dividends (demerger)
Scrip dividend adjustmenr
Other recognised (losses) gains
Goodwill:
On acquisitions (subsidiaries)
On acquisitions (associates)
On disposals
On demerger
Shues issued
Share capiral reorganisarion
Net decrease in shareholders' funds for the year

Consolidated cash flow statement
for lhe year ended 3l March 1998
EMI & HMv
Demerted
buslnets
Net cash inflow from operating actiyltics
Returns on investments and sewicing of llnance
lnterest received
Interest paid
Interest element of finance lease paymens
Dividends paid to minorities
Dividends paid to preference shareholders
l{et cash outflow from rcturns on investments and
servicing of finance
Tax paid
Capital erpenditur€ and financial investmcnt
Purchase of tangible fixed assets
Sale of tangible fixed assets
Purchase of investmentsr own shares
Purchase of fixed asset investments
sale of fixed asset investments
Loans made to associated unde akinSs
l{et cash outflow from capital erPenditurc
and flnancial inYestment
Acquisitions and dliposals
Purchase of associated undertakings
Loans repaid by associated unde akinSs
Purchase of businesses'
Deferred consideration Paid
Disposal of businesses'
Defened consideration received
Demerter ofThorn'
llet cash inf,ow (outfiow) from acquisitions and disposals
Equity Dividends paid
et cash (outflow) inflow before manaS€mcnt of
liquid tesources d financlng
lssue of ordinary Share caPital
Share capital reorganisation
ManaSement of liquid resouces
FinancinS: New loans
Loans rePaid
Capital element of flnance leases
llet cash inf,orv (outfiow) from manaSement of
liquid rcsources and financing
lncrrase (decrease) in cash
'lncludins.ash acquircd/disp6€d
I eo fut a utravTdemerged business split is not available for the year ended 3l March 199?'

to net cash inflow from
Operatiq PIofit
Depreciation charge
Exceplional asset wdte dotrrn
Amouffs Fovided
Provisions utilisedl
Disposals and fundamental reo4anisations
Other
(hoflt) loss before tax of associated undeftakirys
Dividends received from associatd undefiakirys
(Incease) deoease in working capital:
Stock
Debrors
Creditors

Accounting policies
Easis of pr"paration
The consolidaled financial statements are prepared under rhe hisrorical cost convenrion and in accordance wirh
applicable accoundng staldards. The results of the Thorn business up to demerger (Autusr 1996) are included under
demerged business in the comparatives. Meaningful comparisons for rhe cunent year can be made ar the EMI
& HMV level.
Following the disposal of HMV ard Dillons ("HM\r') on 28 March 1998 and in accordance wirh FRS3.
discontinued operations in the curent year includes HMV and in the comparative includes borh HMVand the Thom
business, up ro the dare of disposal/demerger
The share capital reorganisation took place on 2l luly 1997 and earnings per share and divid€nds per share for
the year ended 3l March 1997 have been restated to reflecr the preliminary reorganisation €lements refeffed to in
Note 23 as required by UK CAAP and to enable meaningful comparisons to be made.
Basis of consolidation
The consolidated financial statements comprise the accounts of the company atd its subsidiaries. The results
ofall subsidiaries are taken from their accounts made up ro 3l March. The results of sulsidiaries and associated
undertakings disposed of or acquired during the year are included up to, or from, the dare rhat control passes.
Changes in eccounting policics and pr€sentation of ftnancial lnformation
During the year, the Accoundng Standards Board issued Financial Repofiing Srandard 9 - Asslciates and llintventures
(FRsg) and Financial Reporting Srandard lo - Goodwill and tntonqible Ass?ts (FRs l0). FRS9 affecrs mainly rhe disclosure
of investments cunently classified as associates, with addirional information beint required. The main impact of
FRs 10 is to require the capitalisation and amonisation of goodwill and intangible assers. These standards will be
adopred by rhe Croup wirh effecr from I April 1998.
Foreign currcncies
Transacrions denominated in foreiSn cunencies are recorded ar the rares ofexchange ruling at the date of the
tnnsaction. Monetary assets and liabilities denominated in foreign currencies are rettanslated into sterling eirher
at year-end rares or, where there are related forward foreign exchan6e contracts, ar conftact rates. The resulting
exchalge differences are dealt with in the determinafion of profit for rhe financial year
On consolldation, averaSe exchange rates have been used to translate rhe resulrs of overseas subsidiuies
and associated undenakings.
The assers and liabilities ofoverseas subsidiaries and associated undertakings are fianslated into srerling
at year'end rates. Exchange differences adsin8 from the re[anslarion ar year-end exchange rates of:
(i) the openinS net investment in overceas subsidiaries and associared undertakings and foreign currency
bonowings in so far as they are matched by those overseas invesrments; and
(ii) rhe results of overseas subsldiades and associated undertakings,
are dealt with in Group reserves.
Turnovcr
Tumover represents the invoicedvalue of goods and services supplied by the company and its subsidiades.
Tumover excludes value added tax and similar sales-relared taxes.
Reorganisation and integration costs
costs reladng to fundamental reorganisation are charged as non,opendng exceptional items. other reorganisadon
costs are charged asainst oPerating Profit and are separately disclosed when material due to their size or incidence.
P€nsion costs
Pension costs which are determined in accordance wirh Satemenr of Standard Accounting practice 24 - Accounting f\r
Pensiln clsts (ssAP 24), are charged to the profit and loss account so as to spread the cosr of pensions over the working
lives ofthe employees within the GrouP. Valuation surpluses or deficirs are amorrised oveithe expected remaining
workinS life wirhin rhe Group ofthe relevant employees (estimated ro be g years in respect of rhe uK). The
amortisation ofvaluation surPluses is resficted to an amount equal to the regular pension cost. Accordingly, employer
exPense in resPect of the main scheme, which covers employees in fhe UK, has been taken as nil for each of tn" t-o
years ended 3l March 1998 for reasons of conseruatism.

Asso(iated undertakings
Associated undertakings are those business€s, other than subsidiaries, in which the Group has a beneficial interesr
and over which it exercises siSnificant inlluence. The Group includes its share of profits and losses of all associated
underrakings. The results ofassociated undertakings are taken from thet accounts made up ro 3l March or such eulier
date (not prior to 3l December) which represents their financial period end. Invesrmens in associated undertakings
are stated at the Group's shue of the underlying net asset values.
As mentioned above, FRSg will be adopred wirh effecr from I April 1998.
Goodwill
Coodwill, being the excess of the consideration paid over the fair value ofthe separable ner assets acquired, is charged
directly against shareholders' funds in the year of acquisition. ln view of the significanr amounts involved, rhe
curnulative 8oodwill arisint on acquisitions after 3l March 1985 and charged atainsr shareholders' funds, is separately
idenlified in the Group balance sheet in a goodwill reserve.
On the disposal or closure ofany business acquired aJrer 3l March 1985, the profit and loss account includes a
charge in respecr ofthe Soodwill previously wdtren offagainst shareholders' funds on the acquisition of the business.
As mentioned above, FRSIO will be adopred wirh effecr ftom I April 1998.
l,lusic publishing copyrights
Music publishing coplrights purchasedprior to I April 1989 were lwirten off againsr shreholdem funds on
acquisition. CopyriShts acquired as a result ofacquisitions on or after I April 1989 are treared as intalgible assers
in the Group balance sheel. The capitalised amount ofsuch copyrighrs. being their purchase cosr, is subjecr to
amorrisadon only to the extent that royalty income generated by the rotal music publishing copyrights portfolio
is insu-fficient to suPPon ils bookvalue. All costs anributable to copyrighrs obrained in rhe normal course of trade,
and not as a result ofthe acquisidon of a business, are wdtten off as incurred.
As mentioned above, FRS10 will be adoptedwith effecr from I Apdl 1998.
AdYances to artists
Advances to artists and repertoire owners are assessed and rhe value of rhe unrecouped portion ro be included
in debtors is determined by the prospects offufure recoupment, based on past sales performance, curent populariry
and projected sales.
Leased assets
Assets held under finance leases are included as tangible fixed assets at theh estimated purchase cost and depreciated
over their expected useful lives, or over the primary lease period, whichever is shorter The obligations relating ro
finance leases (net of finance charges allocated to future periods) ue included under borrowings due within oiafter
one year, as aPPropriate. oPerating lease rentals are charged to the prolit and loss accounr on a srraighFline basis over
the lease term.
Deprcciation of tangible lixed assets
DePreciation of tanEible fixed assets is calculated on cost ar rares estimated to \4,rire off rhe cost less the estimated
residualvalue oI the relevant assets by equal annual amounts over their expected useful lives; effecr is 6iven, where
necessary, to commercial and technical obsolescence.
The alnual rares used are:
Freehold buildings and long-term leasehold properry Z%
Short-rerm leasehold properry
Period of lease
Plant, equipment and vehicles
lQ-33t/z%
Stocks
Stocks and work in progress are stated at the lower ofcosr and net realisable varue, less pro$ess paymenrs on
uncompleted contracts and provisions for expecred losses. cost includes manufacruring overheads where appropriate.

f.dlllll poli..dfr.d
trrldlcn
lte conpany has uDdeftak€n to disdurge the liabiliry to coryorauon ax of dre rnajodty of its wholy oy\tned IJK
suboidiarie& Iheir UKEX llab ities ar€ thelefore dealt wtuh ln the accoun6 of the Conpany.
Ilefened ta&tlon ts calculared using fte liabtlity flErbod in rspect of timlDt diffeNnces atulry pr|rrarily fton
the diffelEncc between tbe accountiry and hx teauDetrts of deprcciation hovision is made, oI recovery andclPate4
wherc tlming differences are expected tio r€vqse wnhout r€placn€nt in the forcse€able fuiu€.
Hnrnalrl hrtrlrlnJlt3
Interest nte ageetrtenr whidr are used to manage inter€st rate dsk on the Group's bonowings ue accounted for on
an accruals basis. Finarce ctrarygs indude the net htoest payable or rcceivable utrder lat€rest rate sw-dP ageenrents.
Interest rale cap premia art amordsed wer the life&ne of the caP throuth ffnance cba{es

By cless of business:
!MI Music
other businesses
Gontinulng op"tatlons
Discontinued opentions
-HMV
El.ll & Hlilv
Discontinued operadons
- Demerged business
Total
operating exceptional items
Operating profit
By orlgln:
The table below shows the by origin segmental analyses for the EMI Music business as representative of the fuure
pdncipal business of the Group.
By origin - El'll l,lusic:'
United Kingdom
Rest of Euope
North Ame ca
Asia Pacific
Other
Eltll Music
Operating exceptional items
openting profit
,lncludes corporat€ ernplo''€es
By destination:
United Kintdom
Rest of Euope
North America
Asia Pacific
other
El,ll & Hilv
Demer8ed bushess
Total

l{otes to the fin rxial itateftents continued
The reconclllation of operatlng .rsets to net as3cts (llablliti€s) is as follms:
Capital employed
!q!Slqt4nC'
Net assets (liabilities)
C.ndEiit Continuint
an €n
Dis.onIinued
- DenerS€d
[Ml& HMv busin€ss
Cost of sales is analysed as:
- normal
- exceptlonal
Net operatint expenses:
Dist bution costs
Administration expenses
Other operating (income)
analysed as:
- normal
- exceptiona.l
Shue of (profits) less losses of
associated undenakings (0.9)
other operating income principally comprises income from joint rnarkedng agreements, prope y income and net
patent income.
Operatint profir is srated a_fter charging:
Depreciation of tangible fixed assers
Operaring lease rentals:
Property
Plant, equipmenr and vehicles
Research and development expenditure
Year 2000 costs
The Year 2000 costs are being heated ln accordance with UITF 20 and being written off as incured, or capiralised
where the costs are value enhancing to the systems concemed. The costs charged to the profit and loss account this
year were f 5.2m.

4. Fees to auditors
Audit fees
Other fees paid to Emst & Young:
UK
Non-UK
WaSes and salades
Social security costs
Other pension cosrs (see Nore 28)
Details of remuneralion for each Director, compensation for loss of office. pinsion enrirlements. long-tem incentive
scheme interests and share options are included in lhe Remuneration comminee repofl on pages 2 5 to 3 I .
Interest payalle onl
Bank overdralts and loans
Bank andother inrerest receivable
I an ruI a ulrvTdemerged business sPlit is nor available for rhe year ended 3l Much
1997. The an"ryo, or ,o,a
net finance charSes for that year of f2 5.5m was: interest payable on bank overdrafts and loans f39.5m other interesr
payable f,6.3m: bank and other interest receivable f2o.3n
During the year, a number of interest late caps were acquired by the croup in order to manate interest Iate dsk.
Dehils of these caps and other financial instruments held at the yeu end to manage interest rate risk are given in
Note I 7(iv).

Notes to tfic finan ial stat€ments continued
7. Taxation
Taxarion on profit on ordinary aclivities:
United Kingdom:
Corporation tax
Advance corporation tax $Titten back
Dou-ble laxation relief
Ove$eas taxalion
Defened taxation:
United Kingdom
Overseas
Associated undertakings' taxation:
Overseas
wirhholding taxes
Prior year adiustments:
cunent taxation
Defened taxation
Demerged business
1
97
Total 't 292
rhe chuge for taxation has bien ieducea by utilisation of tax losses of fo'4m ( 1997: fl 8m)'
There is no unprovided defened taxation arising in the year.
(l) Preferencc
A preference divi

(i) Opcratlng exccptlonal ltcms
EMI Music - resructurint costs
costs of integration an4 other
(ll) Ion-opcr.ting €rccptiond ltcms
Profits (losses) on business disposed ofor rerminatedt
HMV
other
Profits oosses) on disposal of fixed assets and investments'
Et' & HrV
Demerged business - Fofit on disposal of fixed assers
Tolal l9!,3 28-7
t Prolirs 0osees) on businesses dlsPosed of or terininated lnclude 141.2m ( 1997: fNil) of 8oodwiU wnllen back in the year'
* nofits 0osses) on fie disposal ot liied assels and invesmenls includes €Nil ( 199?: f l.l m) of toodwil wriften back in tu y€ar.
The attributable raxarion charge relating ro non,openting exceptional items is f 32.9m (1997: EMI & HMV €17.6m,
DemerSed business €0.7m).
10. Earnings per ordinary share
Basic eaminSs per ordinary Share is calculated as follows:
Profit atnibutable to members ol the HoldinS Company
Weighted average nurnber of ordinary Shares in issue
Eamilrgs per Ordinary Share
Fully diluted eamings per Ordinary Share is ca.lculated as follows:
Adjusted profit amibuta.ble to membe$ of the Holding Compaly
Adiusted weighted average number of Ordinary Shares
Adjusted basic earninSs per Ordinary Share is ca.lculated as follows:
Adjusted eamings
Weighted average number of ordinary shares in issue
Adjusted eamilgs per ordinary Share
Adjusted fully diluted eamings per ordinary Share is calculated as follows:
Adjusted fully diluted earnings
Adjusted we{hted average number of ordinary Shares
{200.5m f232.lm €26s'4m
815.5m 8'14-7m 8'15'4m
Adjusted eamings per Ordinary Shue 24.6p 26.5p 30.8P
Adiusted earnirys per Ordinary Shue calculations are based on eamings before the impact of both operating and
non,op€rating exceprional irems. They are included as they provide a better understanding of the underlying trading
performance of the GrouP on a normalised basis.
The Ordhary Share figures and, therefore, eamings per Ordinary Share fitures for the year ended 3l March 1997
have been restated for the effecr of the preliminary reorSanisation elements of the share caPilal reorSanisadon on
21 July 1997. (see Note 23(vi)).

otes to the ffnarkial sftern€nts continu€d
I l. Music publishing copyrights
Group
No amortisation was provided at 31 March 1998, or at 31 March 1997, in accordance with the Group's accounting
policy as set out on page 41.
12. Tangible lixed assets
Group
Cost at 3l March 1997
Cu[ency retranslation
Acquisition of businesses
Disposal of businesses - HMV
Addirions
Disposals
Depreciation at 3l March 199?
Currency retranslation
Disposal of businesses - HMV
Charge for year
Exceptional asset write doPns
Leasehold
properry
Plant
equipment
and
vehicles
17.7 290.2
(o.e) (23.7)
(8.0) (131.2)
3.9 86.6
0.8 6.1
( r.1) (3o.1)
Disposals
Depreciation at 3l March 1998
Freehold property includes land having a cost of €69.Im ( 1997: f89.lrn) which is nor depreciated.
The net book values shown above include the followingl
long-term leasehold property
Short-term leasehold property
Finance lease assets
Assets in the course of construction
Company
planr
equipmenr
rrasehold
ar
Eoperty vehjcles
Cost at 3l March 1997
Additions
!lPgEl!
Cost at 3l I'larch 1998
Depreciation at 31 March
charg€ for year
Disposals
at 3l
Eltrq!!!9n
llet book values 3l

13. Fixed asset investments
lnvestments compdsel
Subsidiary undertakings
Associated undenakints - HMV Media Group plc
Orher investments
Listed investments
tlnlisred investments
- Other
t991
t991
€m
(i) lnvestm€nts in subsidiary undertakings
Company
At 3l March 1997
Addidons
Disposals, transfem and other movements
At 3l ltarch 1997
Details of significant subsidiary undertakints are set out in Note 32.
(ii) ksociatcd undertekings
Group
coodwill Shar€ oI
Mirren olf ner asFts
At 3l March 1997
Currenry refanslation
Additions'- HMV Media Group plc
- other
Ner losses for the period
Disposals, loan repayments ald reclassifications
.Toral considendon on purchase of associated underr.kin8t comPrises cosIs and loans lolallinS t87.9m ( 1997: f54.6m)
The bridging loan rnade ro HI{V Media Group plc was not made by the Company, but by another company within the
EMI Group. (See Notes 29 ard 3l for further details of the HMV Media Group plc ransaction).
Company
The Company holds investments at cost.

Notcs to th€ finan.ial statements continued
13. Fixed asset investments continued
(iii) Other inYcstments
Gro0p
€m
43.5
(1.4)
s.9
14, lnvestments: own shares
The EMI Group ceneral Employee Benefir Trusr ( EBT) was established in order ro hedge the future obligarions of the
Group in respecr of shares awarded under the Senior lxecutive Incenriv€ Plan, the IMI Music Long-Term Incendve
Plan and other share-based plans. ell shares held at 3l March 1998 were held for this puryose. The Trustee of rhe EBT,
EMI Group Trustees (Guemsey) Limited, purchases the Company s ordinary Shares in the open muket with financht
Provided by the Company, as required, on the basls of regular reviews of the anticipated share lialilides of the Croup.
On 21 July 1997, the Company effected a share capital reorganisation (see Note 23(vi)), the commercial effect of
which was to double lhe num-ber of shares via a bonus issue and then return one tenth of the Group's market
capllalisation to shareholders on the register at 18 .July 1997 (the "R€cord Dare'). The reor6anisation involved several
stages which had an ultimate effect of convertint every five Ordinary shares of 25 pence each, held at the Record
Date, into nine new Ordinary Shares of 14 pence each ald five cumularive redeemable preference B Shares ofnominal
value 114.5 pence each.
At the Record Date, the EBT holding of 5,850,245 Ordinary Shares of 25 pence was restated to 10,530,441 new
Ordinary Shares of 14 pence each and 5,850,245 cumularive redeemable preference B Shares of l14-5 pence each. The
cumulatlve redeemable preference B Shares could not be used to setde the future obligations of the Group in respect
of share awards and were redeemed at their nominal value. The proceeds of this share redempdon were rhen used to
purchase new Ordinary Shares of 14 pence each in the Company, wer the period berween 29 July 1997 and 6 August
1997, at prices rangint ftom 566 pence to 583.5 pence per share.
Furure obliSadons under existing plans have been rebased to reflect the commercial effecr ofthe share capita.l
reorSanisation.
The cost of the shares expecred to be awarded under each plan is amo ised evenly over the period from the
original grant of the pa.rticulal award to the time ofvesting. This is normally a period of not less than thrce years.

14. lnvestm€ntsi own shares continucd
Group and Company
At I April 1997
Sha.res puchased
Awarded by the EBT pre shue
capilal reorSanisation
he sha.re capital reorSanisation
share capital reortanisatio! alljustment 4,q8046
Raw materials and comPonents
Due within one year:
Trade debto$
Amounts owed by subsidiary undertakings
Amounts owed by associated undertakinSs
Corporate taxation recovenble
Defened consideration receivable
other debtors
lrepayments
and accluqlingqme
Due after more than one year
hepaid pension contribudons
Corporate taxation recovenble
other debto$
hepayments and accrued lncome

t{otes to th€ ffnancia! stat€ments continued
Long-term borrowings
.Loans
Finance leases
Less: loars repayable wirhin one year
Total long-term borrowings
Short-term borrowings
toals ald overdrafts
Finance leases
Shorr-term element of long.lerm loans
Total short-term borrowings
Total borrowings
Iiquid Iundsr
Investments and short-term deposits
Cash at bank and in hand
Lct bomwings
Long'rerm borowints include flol.5m ( 199'l: Et25.6m) of bonowings repayable wirhin one year, which are
drawings under long-term commirred facilities and therefore have been classified as such.
LonS'term bonowings also include a US dollu privare placernent (book vatue f I 7.9m) with a fair value of
fl7.lm(de ved from a valuation model). The majoriry of other bonowings and liquid tunds are shon-term in narure
and carrying values approximate to market values.
Under their banklng arrantements, overdnft and cash balances of the Company and of cenain subsidiaries are
pooled or offset and cross-guaranteed. Such pooling and offsets are reflected in the Group balance sheet as appropriare.
GrouP borowings include €5.8m (1997: f8.2m) which is secured on assets held under finance leases.
(i) Analysis of net borr,owings by curency
Group
US dollar
fapanese yen
Australian dollar
French franc
Swedish krona
Dutch 6uilder
Deutschmark
Sterling
Othet currencies
Finance leases
(ii) Analysis of net bonowings by
Gruup
interest rate
Fixed rate
Floating rate
W.lghtd
ta
am
1.6 953.5

17. Borrowings continued
(iii) l.latudt analFis of long-tcrm borrcrylngs
Amounts fallint due after more than one year
are repaya-ble as follows:
Between one and two years
Berween two and five yea$
Alter five years:
By instalrnents
The amount of debi, any of which falls due tor pJy,rnen- xter rnore thal five years, is f5.8m ( 1997: f8.2m).
(lv) Financid instrumcne
a) Interest rate a8reements
ln order to matage inrerest late risk the Group has entered into certain interest late cap aEreements and ituerest rate
swap aSreements.
As at 3l March 1998, outstanding interest rate cap agreements were as follows:
Group
Nononal Terminadon
pincip3l dat€
The oumtanding interest rate swap agreements at 3l March l99E related to the Group's Us dollar lonS-term
borrowings and were as follows:
Group and Company
Norioml T€rminadon
principal dai€
Interest rate swaps:
US dollar - pay floatinS rate and receive fixed late
The croup had no other interest late derivatives at 3l March 1998.
b) Forward exchange agreements
Forward exchange rate connacts held at 3l March 199E by the GrouP were as follows:
Group
FundinS
Forward contncts reladng to HMV Media Group plc
(see Note 3l for further detail'
Tnnsacdon hedging
The Group had no other foreign cunency derivatives at 31 March 1998.
€m
0.1
0.1
*whee Milable ldker nr6 haE b€€n us€d ro derermine f.ir valrcs. valuad,on models hive b€en used wher€ su€h rales are nol avallible.

tlot€s ta th€ financi J slalenl€nts corntinu€d
18. Cash, liquid resources and financing
The following definitions have been used:
Cash: Cash in hand and deposits repayable on demand if available within 24 hours without penalry ard including
overdrafts.
Liquid rcsourre: Investments ald depmits, orher rhan rhose included as cash, which are readily convertible into
knowrl amounts of cash.
Financing: Borowings less overdrafts which have been treated as cash.
Andysis of mov.ment in thc Grcup's n€t bonowlngs ln the year
Cash at bank and in hand
overdraffs
Cash
Debt due after more than one year
Debt due within one year
Finance leases
Dirpoel or
HMV
rxchinSe
Cash flow on financing of €(608.9)m is split betlveen new loans of €(717.9)m.loani repua ot e tOO.Sn and capital
element of finance leases repaid of€2.1m.
on 28 March 1998, the Group disposed of the net assets and goodwill of HMV The impact of this disposal on the
cash flow statement is a net cash inflow ftom disposals of f434.2m, the liquid rcsouces and financing disposal impact
of €(5 3.5)m (non'cash element of bonowings) is included in the analysis of movement in the croup s net bofiowings
above. (see Nore 29).
Analysilof mwement in th. Grlup's nct borrcwings in the tcar cnded 3l March 1997
cash at banli and in hand
Overdrafts
Cash
Financin8
Current asset investments
Cash deposits
Liquid resouces
46.5 (sz.',t) (lo.e) 100.2
Total
Thc Grrup's net borrowings at 3l l,larch 1998 comprised:
Investments and shon-term deposits
cash at bank and in hand
BorowinSs due within one year
Borrowings due after more than one year

19. Other creditors: amounts falling due within qne year
Trade creditors
Royalties and fees payable
Amounts owed to subsidiary undertakinSs
Amomts owed to associated undertakints
Corporate taxation
Other laxes including VAT and social security costs
DMdends payable
other creditors
Accruals and defened income
Group
20. Other creditors: amounts falling due after more than one year
Amounts owed to subsidiary undertakings
Corponte taxation
Def ened consideration payable
Accruals and defened income
21. Deferred taxation
Excess of accumulated taxation allowances over
depreciarion provided against tangible fixed assets
Other dming differences
Advance corporation tax
No provision has been made for further taxes which could arise iI subsidiary or associated uldertakings are disposed
of or iI ove$eas companies were to remit dividends to the UK in excess of those anticipated in these accounts; it is
considered impracticable to esdmate the amount of such taxes.
The Company has undertaken to discharge the liabiliry to corpontion tax of the majority of its wholly owned UK
subsidiaries; their defened rax liabilities ue therefore dealt with in the accounts of the Company.
There is no unpmvided defened tax lia.bility at 3l March 1998.

Noies to the finarrial stdeaEnts (ontinued
22, Other proyisions for liabilities and charges
Grcup
curency retranslalion
Provisions udlised
charged atainst:
Operating profit
Exceptional items
(Disposal) acquisition of businesses
Reclassilicadon
The pension provisions adse in overseas companies in respect of state schemes and employees covered by the Group s
unfunded schemes.
Trading provisions include royalry audit and orher tnding provisions charged through operating profit before
excepdonal items and res[ucturint and reorganisation provisions charSed throuSh operating exceptiona] items.
ftwisions utilised relating to restructuring and reorSanisation provisions in the cash flow include f72.0m spent
against the EMI Music restructuring provision set up h 1997 and f7.8m spent against restrucruring provisions set up
in previous yea$.
Provisions utilised telating to disposals and fundamental reorgadsations in the cash flow include f0.7m
spent a8ainst the provision for HMV disposal costs set up in the year and f8-4m spem against provisions sel up in
previous yea$.
Company
Transfe$ to Croup companies
Disposaland Acqsisidon
fundamental and
reorganisation inregation
23. Share capital and share premium account
Grcup and Company
Aurhoris€d
sharc capital
r9t8 t991

23. Share capital and share premium account continued
(i) Ordln.ry Sh.res in lssue
At 2l llly 199'l
One for one bonus issue of
f:p shares
Prcliminary reorganisation,
consolidation and share split"'
Allotment of B shares
Share capital consolidationt
Shares purchasedl
share capital reorganisation
exPenses
share issue expenses
shares issued during the period
ftom 2l luly 1997 on:
Exercise ofoptionsl
Execudve schemes
Savings-Related Schemes
t2'hp
conve$ion of B sharesl
. Od I? tune l99tuhe Company made .It on.mirker Nr.has€ of I2O,OOO ofir! own dlrlary ShaFs of25p erch a price ol II?OP Pfl shaE. Thes€ shares werc rhen
cancell€d
- On2l july 199?, as pan of th€ prelimln y r€ortanbnrioll ea.h 25p frinary Shire and iE relaed bonu5 issue,rP share was consolidaled i oa2t7tps]Ereandrhen
rplir inrolwo l27f undesiSnared Shar6
. On 2l Iuly 1997, dery len undeiSnired Sharet of l2%P w€rc consolidaled inlo nine New ordinary shares of l4P each
t On 22 Iuty 1997. ih€ Conpany mad€ otf.mark€l pulch,ar€s ol rwo of iis own l27rp UndeslSnat€d Shars ai a price of 488.7p per share and 13.192 of i$ own l4P
odinary Shares at a price of t43p per sh.r€. The!€ shares were then cancelled.
I S€e Fn (ii) and (vi) of lhis note for mote details alout E shares.
Shares of I 14.5p eech
Alloned at 2l luly 1997
Redeemed
Converted
Issued at 29 Seplember 199?
Cancelled

t{otes to the financial stat n€nts .Mtinkd
23. Share capital and share premium account continued
(lv) Sharc options
Options to subscribe for the Companys ordinary Shares were outstanding as follows (adjusred for the 1992 Rights
Issue and the 1996 d€rnerger,x'here appropriate):
25p Sharcs
At 3l March 1997
Gnnted'
Exercised
Lapsed
At 2l Iuly 1997
Share capital reorganisation adiuJtment*
l4p Sharcs
At 21 Iuly 1997, following restatemenr
Ixercised
Lapsed
At 3l l.larch 1998
oprion pfice per t+p share (rangi)
Final exercise dates-
' lte options gnnr€d under rhe lgg5 Executve Sh e Oplion schem€were l,Zl8,370a( lltopand 149,694ar ;p
t AI shaie.apnal oFioru were adjusted as a r6dr of rhe share capnal reor8anrsition.
" opdons Srdnted under lhe l9E4 Execulive share Option Scheme ire nomally €x€rcisable no €arlier rhan three yea6 and no later than reo years lollowiq fte d.ie oI
8nn! as are opdons ganted undel lhe 199 t rxecutive Share Opdon Scheme (which are, how€vea suljecl (o lhe achievemenr of pedo.mince r€quir€menG which Incr
be met betore th€ oPlions nolnally become exe(ieble). Options gtu€d under the 1994 S.lings.R€lared Shar€ Oprion kheme ar€ nomilly ex€rcisalle lor a six-monrh
penod toliosnt compledon of savin8s to eith€r a rhree or five.yed savinSs conoad.
(v) Sharu Prcmium account
The principal elements rhat make up the Company's Share Premium account arose as follows :
Conve$ions to Ordinary Shares of 7% Convertible Redeemable Second
Cumulative Preference Sha-res 1992/99 of fl each
A placing of Ordinary Shares linked to rhe offer fot Thames Television
Issue of Ordinary Shares on exercise of subscription rights of wanants originally
attached to 73ls% bonds due 1992; and
the transfer from other reserves in respect ofamounts paid for the wanants exercised
Issue of Ordinary Shares on conveNion of Convertible Unsecured Loan
Stock to fund the acquisition of Virgln Music Group
Issue of Ordinary Shares on conversion of 5 37r% Guaranteed Redeemable
Preference Shares 2004 ofTHORN EMI Capital NV
One for one bonus issue of frp Ordinary Shues
Issue of Redeemable heference B Sharcs
Share capital reortanisation expenses
Other issues of Ordinary Shares
Belance at 3l l.larch 1998

and share
(vi) Share capital r€organisation
account continued
On 2l July 1997, the Company effected a share capital reorSanisation with the aim of retuminS approximately one
tenth of the 6roup's market capiralisation to shareholders on the register at the close ofbusiness on 18luly 1997
(the "Record Date') and enhancing the Groups financial structure
p1ior ro (he rcorganisarion, rhe Company made an on-market puchase, on l7 lune 1997, of 120,000 ofits oftn
25 pence ordinary Shares at a price of 1170 pence per share. The shares were then cancelled.
The reorganisation involved several stages as follows:
Preliminary Reortanisation
One fr pence share was issued for each 25 pence Ordinary Share held on the Record Date: a total of
434,694,106 bonus shares were issued- Each fr pence share was consolidated with an Existint Ordinary Share
of 25 pence to create a share of 25 75 Pence. Each 25 7t pence share was then split into iwo 12 75 pence
Undesignated Shares.
Share Capital Consolidarion
Every ten shares of 123/: pence were consolidared into nine New Ordhary Shues of 14 pence each. Fractional
entirlements were satisfied in cash dlough an off-market Purchase by the comPany, on22lnly 1997, of the
resulting rwo Undesignated Shues of l2l5 pence at a price of 488.7 Pence pel shale and 13,192 Oldinary Shales
of 14 pence, at a price of 543 pence per share. The shares purchasedwere then cancelled.
Bonus Issue of Redeemable Preference B Shares
One cumulative redeemable pleference B Share of nominal value 114.5 pence was issued for each 25 pence
Existing Ordinary Share held on the Record Date; a total of434,694,106 B Shares were issued.
d) Redemption of B Shares
Early redemption - as a result ofelections made up to l8luly 1997, 368,713,624 B Shares were redeemed at par
on 22 July 1997 and cancelled.
Inirial Redemprion Period-as a resulr of elections made betwe en22 July 1997 and 19 AuSust 1997,afu her
50,340,763 B Shares were redeemed at par on 21 August 1997 and cancelled.
In addition, the 15,639,719 B Shares remaining unredeemed were converted on 29 September 1997 into 3,035,070
Ordinary Shares of 14 pence each and 3,496,513,690,000 Defened Shares of O.OOO5 pence eactl In accordance with
the Articles of Association, the rare of convercion of one ordinary Share of 14 pence for every 5.153 B Shares was
based on the average closing market price of Ordinary Shares for the five business days preceding the conversion.
The Deferred Shares were cancelled.
The cesh flows rclating to thc sharc c.Pltal rco:Sanisation arc as follrys:
Purchase and cancellation of l2O,OO0 Ordinary Shares of 2 5 pence each
purchase and cancellation of shares relatinS to ftactional endtlements which wele satisfied in cash

l{otes to the financial statem€nts continued
24. Reserves
At 3l March 1997
Culrency retranslation
Gains (losses) on foreitn cunency
borrowings
Goodwill adsing in the year
- on purchase o[ subsidiaies
- on purchase ol associares
Goodwill written back on disposal
hofit atfiibutable to members ofrhe
Holding Company
Preference dividend
Equity dividend
Transfer of u ealised reserves
Share capital reorganisation
Capitai
- (t32.2)
- ( 185. r)
- 41.2
At 3l l,larch 1998 257.5 495.8 (1,,149.5) (505.5) 786.3 4t5.8 522.t
CrouP reserves incluAieO.Jm i rssr, el .4m) in respecr of irs share of post-acquisilion relained profirs ol associared
undertakings.
Other reserves of the Company relate to a special reserve which reflects the shue premium account reduction
of luly 1988, and unrealised profits on disposals of investmenb.
In accordance with the exemption permitted by 5230(3) of the Companies Acr 1985, the profit and loss accounr
of the compaty is not separately presented. The profir anributable to shareholders, dealt wirh in rhe accounts of the
Company, is f839.0m (1997: €160.7m).
As part of the share capital reorganisarion (see Nore 23(vi)), f479.8m was retumed ro shareholders on
redemPtion of the B Shares. Distributalle reserves have been reduced by this amount and a transfer has been made
from the profit and loss account to rhe capital redemption resewe to reflect this. Further amounts relating to the
conversion of unredeemed B Shares and cancellation of shares associated with the share capital reorgarisation have
also been charged against the reserue making a rotal of €495.8m.
25. Minodty interests (equity)
Group

26. Financial commitments
Grrup
Capital expenditure: Contracted
Annual commitmcn6 undcr operathg lcases at 3l l.larrh wct: es follows;
Group
L:ld ald buildings:
Expiring in the lirst year
Expiring in the second to fifth yea$ inclusive
Expiring after the fifth year
Plant, equipment and vehicles:
Expiring in the first year
Expiring in the second to fifth years inclusive
The Company has no commitments.
27. Contingent liabilities
EMI Group which may have ary liability significantly in excess of provisions in the financial statements.
Guarantees and other contingent liabilities (other than those reladng to HMV and HMV Media croup plc - see
below) total f 16.8m (1997: €23.6m) for the Group, of which f,13.5m (199?: €20.3m) relare ro cerrain contracts
entered into by fomer Group compani€s. There are several guarantees and other contintent liabilities in respect
of HMV and HMV Media Group plc. (See Note 3l for details).
Pursuant to the pmvisions of the ldsh Companies (Amendment) Act 1986, rhe Company has guaranteed rhe
liabilities of its Irish subsidiafles, thus exemptint those companies from the requirement to file their annual accounts
in Ireland.

tlot€s to th€ finaffial statem€nts contihued
28. Pension arrangements
employees in the UK is the EMI Group Pension Fund (lhe Fund'). Staffenga8ed outside the UK are covered by local
arangements which, h rhe case of the Group schemes, are largely of the defined contribution rype. The assets of
EMI Croup's pension schemes are held mainly in separate tustee administered funds.
The Fund is based in the UK and is of the defined benefit type. The Fund is open to all permanent employees over
rhe age of l8 employed by the Company and cenain subsidiaries in the UK. Benefits provided by the Fund are based
on final pensionable pay. Pensions payable from the Fund are guaranteed to increase by 5% per annum, or by the cost
of livinS ifless. Members contribute to the Fund at the rate of 4% ofpensionable pay.
The Fund, previously the THORN EMI Pension Fund, was, until 3l March 1997, open to emPloyees of what is
now Thorn plc. Thorns active mem.bers and cenain pensioners and defened pensione$ were oansfened ro the Thom
Pension Fund on I Ap l 1997. A share of assers of rhe Fmd, determined by the actuaries to be appropriate, is also
being transferred to the Thom Pension Fund.
The larest available actuadal valuation of the Fundwas made by a qualified actuary as at I April 1997 usinS the
projected unit rnethod. Ar rhat dare, the marker value of the assets of the Fund was taken to be f809.8m alter allowin8
for the full transfer paymenr ro the Thorn Pension Fund. The acmarialvalue of the assets was sufficient to cover 121%
of the value of the benefirs that had accrued to the members, alter allowing for assumed increases in eamings. Part of
the surplus disclosed by the 199? valuarion was allocated towards the reduction of employer contriburions below the
long-term rate, rhe balance bein6 canied fotward as a reserve in the Fund.
Employer expense in respect of the Fund has been calculated in accordance with Statement of Standard
Accounting Practice 24 - Accounttng l0r Persion Cosrs (SSA? 24). on lhe basis of acruarial advice, it is calculated that
employer expense would represent a credit to the profit and loss account on full application of SSAP 24 PdnciPles.
However, for reasons of conseruatisffL such expense has been taken as nil for the two years ended 3l March 1998.
The long-term financial assumptions used to calculate employer expense under SSAI 24 ue shown below:
These rates included allowance for the effects of the rax credit charges introduced by the Finance (No. 2) Act 199'1.
Employer condbutions of €15.8m (1997: €16.5m) were charged to the profit and loss account. These
conribudons primarily related ro overseas schemes and were determined in accordance with local practice.

Tangi.ble fixed assets
stocks
Debtors
Creditors and provisions
Non-cash element of borowings disposed 0iquid resoures andJinancing)
Net assets disposed of (excluding cash)
coodwill \ /ritten back on disposal
Profit on disposal (after elimination against goodwill)
Adjusment for ilteryompany element of profit
Tota.l proceeds net of expjnses and cash disposed of
Satisfied byr
Gross consideration received
Net (cash) overdrafts disposed
Expenses paid
Net cash consideration (net of cash disposed and expenses paid)
Defened considention receivable
Expenses not yet paid and wananty provisions
In order to determine lhe profit on disposal reco8nised in the proflt and loss account for the year, in accordance with
UK GMB the disposal of HMV to HMv Media Group plc has been considered in coniuncdon wirh the Group's
subsequent acquisition of an initial 45.2% equity invesrment in HMV Media Group plc. Looking at both of these
fiansactions togerher results in 45.2% of the Sross profit on disposal being deemed intercompany. This intercompany
element of the profil, together with the associated taxation charge, has been eliminated on consolidation and treated
as a reserves movement nettint aSainst the toodwill on the acquisition of the investment in HMV Media Group plc.
The estirnated net goodwill aising on acquisition of the associated undenaking HMV Media Group plc is fl84.7nL
f278.1m on acquisition Oased on estimated net lia-bilities; see Note I 3(ii)) less a net f93.4m intercompany
elimination (gross profit: fl20.5m less taxation chuge f27.lm).
HMV contdbuted f84.3m to the Group s cash flow from operating activities and spent a net f38.4m on capital
expenditue and financia.l investment for the year ended 3l March 1998. Cash flows in relation to retuns on
investments and sewicing of finance, and tax paid, are not representative of those which will no longer be incuned
post disposal due to financing and tax arrangements which have existed within the croup prior to the disposal.

tlot€s to th. finarirl st tsrlents .ontiru€d
30. Purchase of businesses
Several acquisitions have been made in the year, including lobete, Priorify (remaining 50%), Copacabana,
CMC Records, AV Music Publishers, westwood Promotions and Narada Media. The combined fat value to fte
Group is shom below.
Music copyriShts
Tangibl€ fixed assets
Investments
stocks
Deblors
Creditors
Minorify interests
Net assets acquired (before cash)
coodwill
hovisions for future eamout liabilities
Defened consideration payable
Net cash considention
Satisfied by:
Total consideration
DefenEd considention payable and eamout provisions
Cash consideration
Net cash acquired
Net cash considention
Iookvalue
The adjustments to book value of €71.3m were made to bring the valuation of the assets acquired in line u,ith the
Group's accounting policies.
Goodwill arising on acquisifions in the year comprises:
Tolal consideration
Net cash acquired
Fair v4tr_e to the croup Oeforgcash acqrired)
coodwill
ell acquisitions have biin accounted for using the acquisition mithod-

31. Related party transactions
The Company has taken advantage of the exempdon rnder Financial Reporting Standud 8 - Relared Party D$Iosur.s
(FRS8) not to disclose related parry transactions between wholly owned Group underrakings. The Group had several
transacdons with other related parties durinS the year-
(i) HMY and HMY l.ledia Group plc
On 25 February 1998, the EMI Group ('EMI ) entered into an agreement for the sale of the companies and
assets comprising HMV to HMV Media Croup plc ("HMV Media Group ). On or about 28 March 1998 ('Completion'),
lMI sold all of the companies and assers of HMV in the UK, Japan, Ireland, Singapore and Cermany. Completion of the
sale of the companies and assets of HMV in Canada, the United States, Ausnalia and Hon6 Kong (the "Minor Entities )
remains outstandln6 pending the obtainin6 of certain third party consents (includint those of landlords where
necessary) or waive$ in such judsdictions, though consents have now been obrained in respect of sufficient
properties in Canada, the United Slates and Australia to allow completion to take place in respect of those properties.
Pursuant to the agreement, HMV Media Croup agreed to pay an initial consideration of f450m (subiect to ce ain
further adjustments) and an addirional f50m (subject ro ceftain conditions) in the future for the companies and assets
comprisinS HMV
On 28 March 1998, the Company acquired a 45.2% equity stake, IOO% of rhe 'B' Prefened Ordinary Shares and
50% of the Iunior Preference Shares in HMV Media croup for 987.5m. The other shareholde$ ar 28 March 1998
were Advent Internarional Corporadon and partners ("Advent') who also acquired a 45.2% equity stake, 100%
of the A Preferred Ordinary Sharcs and 50% of the Junior Preference Shares, and management who acquired a 9.6%
equiry stake. ManaSement and certain employees will also be granted options to subscribe for additional Ordinary
Shares of HMV Media Group upon cenain events.
On Completion, EMI received €418m (subject ro certain fufther adjustments) as consideration for the sale of the
companies and assets of HMV in the UK, lapan, Ireland, Singapore ald Germany. This amount was derived by
adjustinS the initial purchase price of f450m by (i) subtractinS f66m which will be payable in whole or in part, as
applicable, by HMVMedia Group if and when the sales of rhe Minor Indties are completed; (ii) subtractint E42mof,
assumed debt; and (iii) addin8 f 76m of assmed cash. f4l3.l m of the f,418m was actually received before 3l March
1998. Afurther p ce adjustment, reducing the consideration by €26.3m, was made following complerion due to
vaiation of the net cash, debt and working capital of HMV on disposal.
Until the relevant conditions are satisfied and fie various Minor Entities are sold ( Subsequent Completion ), EMI
has provided, to the extent possible, for HMV Media Croup to manage each of the relevanr Minor Entities and HMV
Media croup has undertaken to fund the workint capiral requiremenrs of such Minor Entiries. In the event that a
Minor Entity is not sold by 28 March 1999, EMI has undenaken to repay all working capital amounts provided by
HMV Media Group in respect ofthe relevant Minor Entities. and the obligadons of the pa.rties in respect of the
relevart Minor lntities (including sale and acquisition of such Minor Entities) will then cease. In the event of
Subsequent Completion, HMV Media Group will be required to pay that part of the considerarion arrributable to any
such Minor Entities. In the event that certain of HMVs businesses in the United Stares are not sold within one year
of Completion, HMV Media Group has aSreed to pay EMI addidonal considerarion ofup ro €20m.
Ar additional €25m, in the form of defened consideration, will be receivable on the €arlier of a listing of any
pafi of the share capital of HMV Media Group on any recognised stock exchange, rhe sale of at least 7 5% of rhe votinS
rights of HMV Media Group or the fifth anniversary ofCompletion. In addition, an amounr of up (o €25m further
consideration is contingent and will be receivable if Advent achieves a specified retum on its investment in HMV
Media Group on a listing or sale. Such defened and contingent consideration is subordinated to the payment ofcertain
other liabilities and payments will be subject to certair covenants. None of this additional €50m consideration has
been recognised in the calculation of EMI's profit on disposal for reasons of prudence.
on 28 March 1998, HMV Media Group entered into rhe EMI Bridte Facilitywirh EMI. Under this facility, EMI
provided f200m in immediately available funds to HMVMedia croup and the faciliry was drawn down on rhis date
to part finance the acquisitions of HMV and Waterstone's by HMV Media Group. IMI received a conrfrmenr fee of
1.25% of the principal amount of f200m and an additional funding fee of 1.25% of the pdncipal amounr. The faciliry
also caflied an interest rate per annum equal to LIBOR plus a margin of 4%. The EMI Bridge Faci]ity was repaid in full
on22 May 1998.
IMI has also made available to HMV M€dia Croup a f 50m working capital revolving credir facility (the "EMI
Revolving Credit Facility ).
A number of forward exchange rate contracts purchased by EMI on behalf of HMV Media Croup will be retained
until they mature and are matched by forward exchalge rare conracrs berween EMI and HMV Media Group.

tlotcs to th€ finandai statements continued
31. Related party transactions continued
EMI entered into an indemniry deed (the "EMI lease Indenniry) with HMV Media Group relatin6, amon6 other
thinSs, to tuarantees Siven by EMI of approximately lo5 leases under which the HMV Media Group agreed to
indemnify EMI against any pq/ments made under those guarantees and certain other guarantees and indemnities.
HMV Media Group has undertaken ro use reasonable efforts to anange for the release of these guarantees.
Guarantees vary ftom lease to lease and EMI must asceftain whether or not the non-pa)rment was warranted ulder
rhe circumstances before seeking to collect ftom HMv Media Group. The atgregate annual rental payments under
guaralreed leases are approximately €28m, although they are subject to adjustment both up and down under cerain
circumstances. The guaranteed leases have terms expiring from one to 27 years, and many of the Ieases expire in years
beyond 2008.
All of HMV Media Groups obligations to EMI in respect of the EMi Revolving Credit Faciliry ard the EMI Lease
lndemnity ue secured under a Debenture.
Since Compledon, HMV Media Group has raised additional equiry financinS of approximately f,5om, in the form
of at issue of units consistinS of Senior Preference Shares and Ordinary Shares. On 22 May 1998, EMI and Advent
each purchased approximately f9m of these units increasing EMI'S investment in HMV Media Group to f96.5m, but
reducing its equiry holding ro 43.2% (4o.8% on a fully diluted basis).
(ii) fther
on 1 Apdl 1993, Chules Koppelrnan received al interest free loan of Us$8.0m (€4.9m) as part ofhis employment
contract. This loan was repaid on 30 June 1997 followint the termination of Mr KoPpelman's contract.
In May 1995, EMI Group acqulred a majodty holding of 75% in Disky communicalions Euope BV ("Disky") from
Hermans Holdings BV and agreed to acquire the remainint 25% by no later than 31 March 2000. In April 1997, the
atreement was vaded so that the remaining mino ty interest will be acquired no later than 31 March 2004. The total
maximum considemtion now payalle is €1 s.olrl Hermans Holdings BV is an associate of Mr Kees HemDn, who is the
Managing Director of Disky and who will, as a result of the vadation, continue to manage Disky for an addirional four
years. During the year, NLG 10.0m ([2.9m) was paid to Hermans Holdints BV as an advance against the purchase Price
for the remaining 2 5 % of Disky.
During rhe year, EMI Group acquired from Makis Matsas, afurther 30% holding in Minos-EMI SA for f 12.2m,
reducing his remaining minodry interest to 10%.
In March 1998, EMI Group acquired the remaining 50% interest in its associated undertakinS Priority Records,
LLC from Tuami, Inc. for an estimated considention of €41.8m.
The Group continues to have a number of nansactions with Thorn plc subsequent to demerter These nansactions
include the fiansirional arrangement for the provision of certain seryices includinS insurarce management and
underwriting. head office manatemenr sys(ems, pension administntion and nanaSement ofsome of the GrouP's
vehicles by Thom plc. The Group received €54,300 in the year as remuneration for Sir Colin Soutt$ate's services as
chairman of Thom plc, until his resiSnation on 14luly 1997.

32. Signifrcant investments
The businesses sel out b"lo- ure thos
"
Direcrors si8nificantly a-ffected the Groups results and net assets during the year. Except where otherwise stated, the
counrry ofincorpontion is intland, operations are within the United Kintdom, shares are in equity share capital and
the businesses are wholly ovrrned.
Subsidiary undcrt kings
Elll ilusic
capirol-EMl Music, lnc. (usA)
Capitol Records, Inc. (USA)
chrysalis Records Ltd
EMI Electrola GmbH (GermanD
EMI Enrenainment World, lnc. (USA)
EMI Music Australia Pry Ltd (Australia)
EMI Music France S.A. (France)
EMI Music ltaly SpA (Italy)
IMI Music Publishiry Ltd
EMI Recods Ltd
croupe VirSin Disques S.A. (France)
Jobere Music co., lnc. (USA) (50% owned)
Priority Records, LLc (UsA)
Toshiba.EMl Ltd (Iapan) (5 5 % owned)
Virgin Records America, Inc. (USA)
Corporate
EMI Group Finance plc'
EMI Grorp Intemational Holdings Ltd'
EMI Group Nonh America Holdings, Inc. (USA)
EMI croup North America, Inc. (USA)
Virgin Recods Ltd'
virgin Schallplatten GmbH (cennany)
' Held ditectly bY lhe comPan).
* Job.t. l.lutt. co., tn.. has b"en consolidared asasubsidiary even rhouth ir ii only 50% owned. in accold cewifisedion258(4)offiecomPaniesAcl1965.
Associated undertakings
The principal investment of the 6roup (and the Company) in the equiry share capital of associated undertakings
at 31 March 1998 was as follows:
Retail-books &
,".",filll,
Business localionl equiry holdrnt
HMI Media Group plc recorded music Eqslald
.453%
nt Ji March t 99S, rhe Gioup and the Company held a 45.2% equiry stake, IOO% of the 'B' Prefened Ordinary Shares,
50% of the lunior heference Shares and none of rhe A hefened Ordinary Shares in HMV Media GrouP plc.
t ftiftipai counrry of incorpotuion. The uK and canada are the pnn.iPal coundes or op€ralior
33. Post balance sheet events
HMV to HMV Medla Group as follows:
nce sheet events relating to the substaldal disposal of
Since completion, HMV Media Group has raised additional equity financing of aPproxirnately f50m, in the form
ofan issue ofunirs consisting of Senior Preference Shares and Ordinary Shares. On 22 May 1998, EMI and Advent
each puchased approximately f9m of these units, increasint EMIs investment in HMV Media Group to f96 5m' but
reducing irs equity holdinS to 43.2% (40.8% on a fully diluted basis)
The EMI Brid8e Facilirywas repaid in full on 22 May 1998.
completion of the sale of the companies and assets of HMV in Canada, the Uniled States, Ausfialia and HonS Kong
(rhe Mhor Entities") remains outsranding pending the obnining of cenain third parry consents (including those of
landlords where necessary) or waive$ in such juisdictions, though consents have now been obtained in resPect of
sufficienl prope ies in Canada, the United States and Australia to allow completion to take place in respect of those
Properties.

Five year summary
Rcsults
Tumoveri
EMI Music
Other businesses
Continuing of"t tions
Discontinued operatlons - HMV
El.fl & HMV
Discontinued operarions
- Demerged business
- other
Operating profii:
EMI Music
Other businesses
Continuinl oferatlons
Discontinued operarions - HMV
EMI & HT{Y
Discontinued operations
- Demerged business
- other
Operiting profir before
excepdonal items
Operating exceptional items
Non-operadng exceprional items:
Fundamental reorganisations
and restructurin6
Profit anributable to members of the
Holding Company
Profits (losses) on businesses disposed of
or teminated lol.3
Profits (loses) on disposal of fixed assets
hofit before finance charges
Finance charges
hofit before taxation
Taxation
Profit after taxation
Minoriry inrerests
Operating assets
Music publishing cop).righrs sl9.l
Properry planr, equipment and vehicles 156.1
Rental equipment
Fixed asset investments
Investments: olvn shares
Stock and debrors, excluding taxation
dividends and interest payable (t,t68.t) (1,416.8) (1,416.8) (1,516.6) (1,S75.3)
OperatinS assets
687.0 561.3 561.3 506.7 1,27g.6

l(.y st tlstlcs
Net bonowinSs
Net cash flow from operatinE actMties
capital expenditure:
Fixed assets (EMI Music)
Fixed assets (HMV)
Fixed assets (other businesses)
Renta.l equipment
Total capital expenditue
Eamings per Odinary Share:
Basic
Adjusted fully diluted
Dividelqr pg Ordinary shalg
Return on sales:
EMI Music
HMV
Effecrive tax nte (before excepdonal items) 31.7?t
Interestcover 5.8r
Dividendcover
l.5r
Signi.ncant chanSes were made to the financing soucture of the Group as part of the demerger making the Group results
difficult to compare year on year as results for the Thom business are included for the full year in 1994, 1995 and 1996,
up to demerger in 1997, but excluded post demerter Meaningful comparisons for the curent year can be made at the
EMI & HMV level; comparative results at this level are Siven for 1996 and 1997. The total and EMI & HMV rcsults are the
same for 1998.
Follo$'ing the disposal of HMV on 28 March 1998 and in accordance with FRS3, discontinued opeRtions includes
HMV Thom is included as discontinued operarions - demerged business.
The share capital reorganisation look place on 2l ,uly 1997 and eamings per share and dividends per share for the
years ended 31 March 1994, L995 , 1996 and 1997 have been restaied to reflect the preliminary reor8anisation elements
in accordance with UK GAAP and to enable meaningful comparisons to be made.

Notice ofAnnual General Meeting
Notice is hereby given that the AlnualGeneral Meering of EMI Group plc will be held at the Royal Lancaster
Hotel, lancaster Tenace, London W2 on Friday, U July 1998 at ll.30am.
l. To receive and consider th€ Dircctors'icport and the Financial Statem€nts for the year ended
3l l.larch 1998.
2. To declarr a final dividend.
3. To re-elect ar 0irccto6:
(a) Sir Peter walters
(b) M N Bandier
(c) KM Berry
(d) Sir Dominic Cadbury
(e) KAO Donovan
4. To reappoint Ernst & Young as auditors and to authorise th€ Dlrccto6 to determine their
r€munerltion.
As spccial business
To consider and, if thought fit, to pass the followin8 Resolutions < and 6 which will be proposed as
Special Resolutions.
5. Spccial Rcsolution
THAT the authoriry and power to allot relevant securities and equity securities confened on the Directo$ by
Anicl€ 14 of the Company's tuticles of Associadon be and are hereby granted for the period ending on l6 October
1999 or at the conclusion of the 1999 Annual ceneral Meering (whichever is the earlier) and for such periodl
i) the Section 80 amount shall be € 3 8,2 O9,4'17; allld
ii) the Section E9 amount shall be f5,5o7,528.
6. Special nesolution
THAT pursuant ro the authority contained in its Articles of Association, the Company be and is hereby granted
general and unconditional authoriry to make market purchases (within the meaning of Secdon 163(3) of the
Companies Act 1985) up to a maximum of 78,678,976 Ordinary Shares of l4p each, provided that:
i) the maximum pdce per Ordinary share is not more than 5% above the average of the middle market
quotations for an Ordinary Share as derived from the Daily Official List of the London Stock Exchange
for rhe five business days in respect of whlch such Daily Official List is published before the purchase
is made, and the minimum p ce per ordinary Share is not less than l4p, the maximum and rninimurn
prices being exclusive of any advance corporation tax and expenses; ard
ii) this authodry unless previously renewed" shall expire on 16 October 1999 or at the conclusion of the
1999 Amual General Meeting (whichever is the earlier) except in relation to the purchase of Ordinary
Shares the contmct for which was concluded before the date of expiry of the authodfy and which would
or might be completed wholly or pudy after such date.
By Order of the Board
c P Ashcroft
Secretary
l8]une 1998
(a) Pursuinl to Retularion 34 or rhe Uncerrificated S€curiries tugularions 199 t, rhe Conpany sp€cilies $ar only rhose shd€hold€rs qisrered in rhe ReSisrer of
Membe6 of rhe Company as ai 6.0opm on It luly 1998 shall be €nrirl€d ro an€nd or vor€ ar rhe Meerint in .espeo oI fie number ol shares rcSisrcr€d in rheir
names d fiar time. Chantes ro entries on rbe Retiste. ol Members afier 6.O0pm on 15 luly 1998 shall be disreSad€d in dererinining rhe ri8hrr of any p€don
to arcnd orvote at lhe Meeting.
(b) Any Memb€r of the Compdny enirled ro artend and vor€ ar rhe Meeriu niy appoinr one or more proxies ro arrend and. on a poll, ro vor€ on his/her behilt
A proxy ne€d nor be a M€mb€r Cornpl€tion of rh€ Form of Proxy Ior rhe MeetinE does nor prdenr a Mem|€r from anendin8 and voring in person it he/she
is entided ro do so and so wish€s.
(c) Copies ol contracb oI sewice berween any Dir€ctor and rhe Company or a.y ot its strbsidinJi6 de avairll€ lor inspecrion .r rhe Re8lsrered Oftice ol the
Comp.ny on eaci business day durint normal bosinEs hou6 and will be railable on the diy oI rhe Me€rn& ar rhe place ol rhe MeetlnS, hom at Ieau 15
ninur€s prior to fie Me€nnt unnl i$ conclurion. The Re$ster of Dircqols InIeEsr! wiil also be available tor inspecrion trom rh€ conmen€€menr oI lhe
Me€tlna unril irs con€luiion.

lnvestor information
Registrar
Enquides concerning shareholdings or dividends should, in the first instance, be addressed to the Company's registrar,
Lloyds Bank ReSistrars, (Team 58), The Causeway, Worthing, West Sussex BN99 6DA. A helpline, al local call rates in
the UK, operates during normal office hours on 0345- 125921 (+44,1903.833112 from ourside the UK).
Shareholders should notify the registrar prompdy of any chan6e of address or other particulars.
Any Shareholder wishing dividends to be paid directly into a bank or building sociery with the tax voucher
beinE sent dir€ctly to the Shareholder s registered address, should contact the registrar for a dividend mardate form.
Dividends paid in this way will be paid throu6h the Balkers Automated Clearing Sysrem (BACS).
Personal Equity Plans (PEPS)
Details of the lMI Group Corporate and Single Compary PEPS may be obtained from Halifax Invesrment Seruices Ltd
('HISI,), which is approved by the Inland Revenue as a Plan Manager and is regulated by the Investment Maragement
ReSulatory organisation ltd (lMRo). HISL is a member of the Halifax Croup. An explanarory booklet is available from
HISL, Trinity Road, Halifax, West Yorkshire HX1 2RC. Tel: 08OO.371768.
On 6 April 1999 a new tax'p vileged Individual Savlngs Account (lSA) will be introduced and from that date no
further investments may be made to PEPs. All money invested in PEPS on 5 Ap l 1999 can continue to be held in PEPs
and outside the ISA. PEPs will receive the same tax benefits as the ISA.
The publicalon ol rhis information has been app.oved. for rhe pueoses oi secrDn t 7 of the Findcial Services Acr 1986, by Halifax lDvesmerr Sedices Lld.
Low-cost share dealing service
An execution'only service exists for buying and selling the Company's shares at an atuactive commission late.
The service is operated independendy of the Company by The Share Centre Ltd, by anargement with the
Company's stockbrokers, SBC Warburg Dillon Read, a division of Swiss Bark corporarion. Details are available
ftom The Share Cenrre Lrd, PO Box 1000, Tring, Herts HP23 5AN. Tel: 01442 890844.
The publication ol this infomarion has been approved, for rhe purposes ol sedion 57 ol rhe Financial S€Nices A.t I 986, by The Shar€ Cente Lrd. which is reSulat€d
by The Secu.iries and lururer Audoriry Lrd.
American Depositary Receipts (ADRs)
The Company's ADRS trade on the over-the'counter market, with one Ame can Depositary Share (ADS) equalling
two EMI Group plc Ordinary Shares.
Morgan cuaranty Trust Company of New York ls Deposirary for the Company's ADSS. Enquiries should be
directed to Morgan ADR Service Center, PO Box 8205, Boston, MAO2266-82O5.USA. Tel: l'800 428-4237.

lnvestor infonnaiion continued
Ul( capital g.ins tar lnformation
For UK capital gains tax purposes, the base cost of THORN EMI plc Ordinary Shues acquired prior to the demerger
of 19 Augusr 1996 will need to be appofiioned between EMI Group plc Ordinary Shares of 25p each and Thom plc
Ordinary Shares of 2 5 p each in the proportic[r 7 8.8% to 2l .2%.
The base cost of tMI croup plc ordinary shares of 25p each acquired or held prior to the share caPital
reorganisation of 2l July 1997 will then need to be apponioned between the new ordinary shares of l4P each
and the former B Shares of ll4.5p each in the proportion 89.4% to 10.6%.
Cnvironmcntal report
Copies of the Group s Environmental Report are available from the Company s Corporate Affairs department, as below.
General enqulries
General enquides may also be adftessed to the company's coryorate Affats depafiment, as below:
EMI Group plc
4Tenterden Street
Hanover Square
London WIA 2AY
Tel:0171-355 4848
Intemer - http://wwwemi$oup.com
Summary of main announcements
27 May 1997 Announcement of preliminary results for the year ended 3l March 1997.
l7 June 1997
I luly 1997
lE July 1997
Details of prcposed capinl reorganisation and retum of capital announced to shareholders,
includinS proposed bonus issue of B Shares.
EMI Music Publishing acquires a 50% share in the Jobete music publishin8 catalogues - all the
classic songs of the Motown era.
Approval of capital reorganisation and retum of capital to shueholders.
21 November 1997 Kathleen o'Donovan appointed as a Non-executive Director of EMI CrouP plc.
25 November 1997 Announcement of half-year results.
23 lanuary 1998 Christmas rading update.
20 February 1998 Sir Dominic Cadbury appointed as a Non-executive Director of EMI Group plc.
25 February 1998 Announcement of formation of jointventure to acquire HMV Group from EMI Group and
Wate$tone s from wH Smith Croup.
27 March 1998 Acquisition of the renainint 50% interest in Priority Records.
30 March 1998 Announcement that EMI croup substantially completed the sale of HMV Group to
HMV Media Group plc.

iubiect index
Accounting Policies
X*"g5;P*"nh;**'*L-,
Artists
advances to
*,"'I"1lool'""Tffi"u
Auditors
fees
IePoIt
Bdancesheets -
Board commtttee>
ioard of Directors
Bo owings
Cadbury Conmi$ee
4n'2
l't ,40 1l
'12
', a.
'10
4l
4
41,49,6'1
23
45
33
ponsrbiliry

Paul McCartney\ Floming Pie
album debuts at No.2 in both
UK and US chars.
l*ns,H,*-[
affiliates in Poland. the Czech
Republic, the Slovak Republic,
and Hungary and licensees in
Russia, Slovenia, Croatia,Turkey,
September
The Rolling Stones' Endges to
Bobylon album debus at No.l
in Germany.
February
NTilJJ::T"::JJ::. HMV '
and the Baltic Statesalbum
Dig Your
Own Hole sells
over I million
units worldwide.
Together Agoin becomes Janet
lacksons lSth gold single in
the US, outpacing all other
female solo artists.
Eternal has three singles in the
Top 100 in 1997 (UK).They
also claim the biggest radio hit
by a UK-signed act of the yean