Untitled

A of the art6t mages 

you w l5ee n ths annua 

report are taken from the 

art sts approved \ rebs(es 

These \a/€bs tes include 

ne\ ,s, chatrooms, photos, 

video5, sonq lyrics and a 

k nds of other nformaton 

that enhance the Prof e 

of our aftsts and catalogue 

and heip them to conn-"ct 

wth more fans from a 

over the world

Highlights 

EMlRecorded Music's 

market share grew in 

Europe, Japan, the rest of 

Asia and Latin America 

30 albums sold over 

a million units 

EMI Music PublishingS 

turnover increased 

by 11 8%, helped by 

the acquisition of two 

important catalogues, 

Windswept and 

Hit & Run 

Group return on sales 

increased lo 12.2o/o 

 

Brooks became the biggest Agreements were signed 

selling male artist in the wrth 15 internet and new 

US in the 1990s with album technology businesses 

sales of over 100 million 

 

 

orofits grew by 7.1% 

On 24 January 2000, 

EMI announced a proposal 

tor a 50:50 venture with 

Time Warner to combine 

EMI Music and Warner 

 

Music Group and 

create a new company, 

Warner EMI Music 

 

 

 

 

 

Adjusted diluted earnings 

 

 

 

FinancialSummary 

Group turnover 

Group operating profit before operating exceptional items and amortisation 

Profit fFfore batkn, excqtiorol itefla ard anaftisatia 0 

 

 

Dividends per share

As I approach the end of an encouraginq 

and eventful frrst vear as chairman ot 

tMl Grouo. I am bleased to report thal tne 

company 

's 

,n excellenl shape to grasp the 

oooortunrties and deal wlth the challenqes 

airead at an exciting time in the hlstory 

of the music rnoustry During the past 

vear our focus has been on strengthening 

bur core recorded music and publishing 

busrneses and preparing To part,clpaLe 

rn the digital revolution while del'venng 

steady profit growth. 

For the group as a whole, protrts belore 

€x, exceptional items and amo'tisation 

improved in the year bY 8.1% to 

f245.4 million. 

Group operating profits improved by 7 7% 

to f290.6 million on turnover marginally 

ahead at f2,386.5 million, an encouraging 

oerformance in a worldwide music market 

bxpenencrng limited groMh i'l the near term. 

Net earninqs improvedbY 29.2ok 1o 

f 1 58.4 niilion boosteo by the profit on the 

sale of non-strategic assets including Elvll3 

shareholding in GWR GrouP PLC. 

The Board is recommending a final 

oividend of 11.75p per share wh;ch grves 

a total dividend for the year of 16 0p 

per share. 

Both our Recorded Music and Music 

Publisl.,nq divisions improved operating 

profits Vear on Vear whrle the overall 

iurnover increase was driven by significant 

oroMh (1 1.8olo) in Music Publishing - 

6nhanced by a fint time contribution lrom 

the Windswept and Hit & Run acqultllons 

- more than offsetting a small dec|ne 

('1.2%) in Recorded Music. 

ln Recorded Music, we made significant 

market share gains in a number of 

rmponant reglons. ln Jdpan, Lhe world's 

second larqest mudc market, a string 

of successful releases resulted in a marked 

improvement in share. In addition, we 

saw share qains in Europe, Latin America 

and the rest of Asia. ln the important 

US rnarket, however, we saw our 

share decline. As a result, we estimate 

that our global share fell marginally to 

approxrmately 12.5olo. Despite thls, we 

maintained our positlon as the world's 

third largest record company 

We have continued to invest heavily in 

supporting the ( reative er^deavours ol 

our artists and writers whrle continurng 

to improve operatronal efficiencies. During 

the vear, a nurrbe'of initrat'ves a med 

at reducinq the cost base have been 

progressed. These include a shared 

services prolect and the restructuring 

of our European distribution and 

manufacturing operations. 

In Music Publishinq, we have continued 

io expand and explort our outsunding 

catalooue and have maintarned our track 

record"of earnings groMh. We have 

made significant gains in the buoyant US 

market, through both a strong underlyinq 

performance ino the positive impact of 

ihe Windswept catalogue acqurred in July 

ln November, we also acquired a 51% 

stake in the Hit & Run catalogue. 

We believe we are well positioned to 

take advantage of the many opportunities 

and address the challenges presented 

bv new medra, with o-' b'oad range 

oi international and local repertoire 

reoresenlinq manv different musical styles 

comptemenied by our impressive catalogue 

of past recordinqs and a high quality library 

of over a million publishing copyrighs 

During the yeat we embarked on a 

proqrimme o{ digitising oLr assets and 

forminq strateqrc alliances with a number 

of new media companies which are 

oevelop'ng new channels for music delivery 

and are supporting the infrasrrudure 

changes necessary to operate in a digrtal 

ldnds(ape. ln addition, these transact'ons 

have created value for EMI shareholden, 

through the acquisition of new media 

equity stakes in return for access to content 

Our woddwide management teams 

under Ken Berry and Martin Eandier have 

L,een strenothened and we believe that we 

have a qoo,'d foundation for luture success 

Our commendable performance was, as 

ever, made possible by the extraordinary 

commitment and professionalism of 

our colleagues across the world. I take 

this opportunity to thank them for their 

continuing effort and support. 

Lookrng anead, we are ootlmistic about 

our stronger recorded music release 

schedule for the current year and we are 

confident that the momentum we have 

built in music publishing in recent yean 

will be maintained. 

lam excited bV our propoed 50:50 

recorded musrc and musrc publishing 

venture with Time Warner lnc, announced 

on 24 Januarv 2000. The strategic and 

financial ratronale for the transaction ls 

compellinq. We believe that the geographrc, 

rnanaqement and cultural match of EMI 

and Warner Music Group, rhe combinatton 

of our rosteE and publishing catalogues 

and the anticipated operational benefits 

and synergies will improve our groMh 

prospects and create substantial 

shareholder value. 

The orooosed combination is conditlonal 

on, jmdnq other things, EMI shareholder 

aoproval, EN4l continuing to qualify for 

liitirq on the o+tic,ar List of the UK Listing 

Authonty, requrste regulatory clearances 

in the ELl, US and Canada, and certain UK 

tax clearances. Closing of the transction 

continues to be targeted for the second 

half of 2000. 

Finallv, I want to pay tribute to three dlrectors 

who'left the Board during the year Sir 

Cohn Southgate retrred in July 1999 havrng 

been chairman for 10 yeas. Colin led 

the conpany wilh greal vson and courage 

from 1985. As managinq dlreclot chief 

executive and then chairman, he was the 

architect of a transformation from broadlybased 

industrial conglomerate to world class, 

focused music busrness. 5rr Peter Walters 

also retired from the Board in July 1999 

He was a non€xecutive director for 1 0 

vea6, the last nine as deputy chairman 

Simon Duffv, ioint deputy chairman and 

linance directbr; resigned from the Board 

and left the company after almost eight 

vea6' service to join World Online. All thre€ 

Grved the company with distinction and 

commitment. lndividually and collectively, 

their contnbution was of inestimable value 

and on behalf of the Board and 

shareholders, I thank them. 

Eric Nicoli 

Chairman

fr\ux tna-tL.nerao I 

i.re.V Faur I ,\. 

T!rnei! latesi 'e\,en a b"'n, t.ra5 

her I qFest eler U5 debLrt 

and she per+ormed for 

orer 600 m on peope 

at S.rperoow XXXIV

fr\ux tna-tL.nerao I 

i.re.V Faur I ,\. 

T!rnei! latesi 'e\,en a b"'n, t.ra5 

her I qFest eler U5 debLrt 

and she per+ormed for 

orer 600 m on peope 

at S.rperoow XXXIV

Recorded Music 

EMlmusic market share 2000 (o/o) 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Regional creative 

strategies began to 

bear fruit 

A stronger release 

schedule for 

the coming year 

EMI Recorded Music made progress in a 

number of important respects rn a year in 

which the world music market grew by 

3.1% rn value terms {3.5% in the previous 

yea.) and the recorded nusic rndustry faced 

new challenges as rnternet developments 

highlighted the need to protect music 

rights. Operating profit improved 7.1% 

on turnover down by 1.2%. 

Our regional creaive strategies began to 

bear fruit. ln Europe our market share rose 

marginally from 17,0% to 17.1% with a 

continued strong performance in the UK 

and including some significant gains in ltaly, 

Scandinavia, France and Spain. 

In Japan, despite the market declining 

bV 7.3olo, we enjoyed strong share groMh 

with contiruing succes by Utada Hikaru, 

supported by a number of other artists 

including Ringo Sheena, Dreams Come 

True and Tomoyasu Hotei. 

The Asian market outside Japan returned 

to qrowth with a 5.1% rise (following 

a decline of 14.4% last year) and our 

businesses gained share. ln the key market 

of Taiwan, we broke more l\,4andarin artists 

to gold status tran any other company. 

The reoion is exoected to continue to 

recovei from the economic crrsis of the 

past two yea6. 

Latrn America was a,so a pos'tive regron 

for us. Strengthened regional and national 

manaqement teams delivered market Share 

groMh in every country most notably in 

the key market of Brazil. 

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The US was the only major market in 

which we falled to make progress in the 

year. Although the market grew a healthy 

14.0%, our market share fell from l2.3% 

1o 9.0%. Performance in clasycs, jazz, 

Latin and Christian music continued to 

be strong but new mainstream pop and 

R&B releases underperforrned. 

The loss in market share in the US more 

than accounted for our estimated globat 

market shar €ductio- frorn 13.2% to 

approximately 12.5%. 

Reflecting the USS importance as a prime 

source of international repertoire for 

the global music market place, we have 

continued to take steps to ensure that our 

artist and repertoire teams produce stars 

who have the abiljty to sell internationally. 

ln the past two yea6 new A&R resources 

have been added to the North Amencan 

portfol o. However, the time lag betnieen 

srgning and releasing new records 

means that the benefits have not yet 

flowed through. 

Last yeat we announced our intention 

to expand our US presence in the areas 

of pop and R&B. One of the first releases 

in the new fiscal year was the plat num 

soundtrack Rorneo Must D/.e featuring 

Aaliyah, which was a product of one of our 

new A&R relationships. I remain optimistic 

that this and other relationships, together 

with an improved release schedule, will 

bring further success in the U5 as the 

year proceeds. 

Worldwrde a total of 30 EMI albums sold 

over 1 million units from artists including 

Utada Hikaru, Backstreet Boys, George 

Michael, Brtney Spea6, Tina Turnet Queen, 

Garth Brooks, The Chemical Brothe6, 

Lenny Kravitz and D'Angelo as well as 

the UKS Volume 44 in the Nory fha6 

What I Call Music hits compilatio'l series. 

Our clasical division substantially increased 

its turnover, with best selling artists 

inc{uding Sarah Brightman, Placido 

Domingo and Sir Simon Rattle. 

Our global release schedule for the 

current year includes new albums from 

many of our major artists, lncluding 

Utada Hikaru, Robbie Williams, Spice 

Girls, Radiohead, Rrchard Ashcroft, 

Lenny Kravitz, .lanet Jackson, Thalia, 

Snoop Dogg and Sarah Brightman. 

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snoopdogg

Recorded llus c (continued) 

Digital download 

programme launch 

in .luly 2000 

New media developments represent 

considerable growth opportunities for 

the music industry which we believe 

outv/eigh the potential risks of piracy. 

We are remodelling our business in 

order to maximise the opportunities and 

benefits of the new envrronment. Thrs 

involves digitsing 100% of our global 

content, developing busines models 

for digital downloading and exploring 

important new marketing and promotion 

opportunities. 

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Investing in new media 

infrastructure 

Exploring new market 

opportunities 

P.otected access to our 

musical content is essential 

Growth opporlunities 

outweigh the potential 

risks 

The internet and re ated technologies 

present challenges to the music ndustrys 

abi|Di to p'ole.l rb rnveslnenl 1 TJsr( 

copyrights. EI\,41, n conjunct on with a 

number of other companies including 

representatves of the muslc and consumer 

electronics lndustries, has been supporting 

the Secure D gital Music lnitiative. 

This forum, wh ch nvoves over180 

companies from around the world, has 

the oblective of establishing voluntary 

standards for the secure transmissron of 

music over the nternet. The forum has 

recently published its f rst set of standards 

and many companies in the mus c, 

informatlon technology and consumer 

electron cs industries have adopted them. 

The extent to which these standards 

prove effective n contain ng piracy 

of new record ngs will depend on the 

comprehensiveness and durability of 

these and other protecr ons berng 

imp emented and the level of comp iance 

by hardwo.e ano so'tware produce's. 

There have been s gn ficant egislatve 

developments both in Europe, through 

the European Copyright D recr ve, wh ch 

s currently n the Council ofthe EU forthe 

preparation of a common position, and 

the E-Commerce Direct ve, which was 

adopted by the EU in May 2000, and in 

the us through the Dig tal M llennium 

Copyr ght Act. Legislative act on supported 

by litigar on -o prevell ab-'e ol 'nJ\i( 

company rights is crucial to the future of 

the mus c ndustry Howeve; we believe 

that '1 ) e))erlidl to deve op busiress 

mode s that provide protected access to 

our musica content n a manner that s 

corvenierr ard acreprable [o Ihe .rJsrc 

consumer. 

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W th 9le5 ol three million 

for lhe Hush- the sublirne 

Texas are stlll ridinq hiqh

www matchbor0.com 

Rob Thomas fiom 

matchbox hr/enty co-wrote 

9noot/,, he winn€r of 

three Gramm!6 ncludrng 

Sonq of the Year, and 

pedomed tw$ Caror 

Santana

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After r'o decades at the 

top, St ng continues to break 

nev! ground as an anrst 

and songwiter with his lat6t 

Grammy award'winn ng 

album Bmnd Day 

^lew

Music Publishing 

Strong und 

 

 

\ /ww.kpmmusic.com 

Continued geographic 

expansion and significant 

investment 

EMI Music Publlshing delivered excellent 

'esults for the year, with turnover increasing 

by 11.8%. Net publisherS share rose 9.7% 

and operating profit by 9.1%. Our results 

reflect strong underlying growth together 

with first time contributions from catalogue 

acquisitions such as Windswept and Hit & 

Run, as well as continued geographrc 

expansion and significant investment in 

lT to increase our internet presence. 

We punued multipte strareg,es 'icluding 

act ve rnvest.nent in loca acts, the acqJisition 

of new catalogle when {rnancially viabre, 

and the creation of a wide range of 

opportunttes tor our songwriters - through 

the licensing of songs for advertising, filmi 

and televrsion and through digrtar dehvery 

and the internet. 

We had anotrer gooo yea. rn the US, 

where revenues from mechanical. 

performance and synchronisation were 

each well ahead of last yearS levels. 

The strong mechanical revenues in the US 

came from artists such as TLC, Blink 'i82, 

matchbox t\renty and the Goo Goo Dolls. 

Our strategy of signing writer/produceE 

such as Rodney Jerkins (Whitney Housto't, 

Destiny5 Child) and Sean 'Puffy' Combs 

(Notonous B.l.G ano Jennifer Lopez) also 

produced excellent results. ln addition, lhe 

matching of songwriter Rob Thomas from 

matchbox twenty with Carlos Santana 

resulted in the worldwide hit and Grammywinning 

Song o{ the Year, Smcr;th. 

Our US business also benefited from 

the acquisition in July of nearly 40,000 

active titles from the Windswept Pacific 

catalogue, rncluding such hrsrorically prvotal 

rock and roll titles as shout. Louie Louie 

and Mony Mony and strong offerings 

ot doo-wop, drsco and Lar't sonqs. The 

catalogue offers great potentiai for future 

growth opportunities and has the added 

benefit of including the rights to the 

Spice Girls' songs. 

European sales were also higher with 

significant increases in the UK, Germany 

and ltaly. The UK showed improvement 

across all revenue streams, boosted 

by Genesrs and Phil Collins sonqs in the 

recently acquired Hit & Run catalogue. 

Germanyb higher mechanical income was 

helped by artists such as Echt and Stefan 

Raab, while ltalyS results reflected strong 

mechanrcal receipB from locaj repertoire, 

strong synchronisation income and the 

acquisition of the back catalogue of the 

European superstar Eros Ramazzotti 

during the year. 

lnjapan, we achieved outstanding success 

with songs written or performed by local 

supeEtars such as Utada Hikaru and Keqi 

Ozawa, against the backdrop of a declining 

market. As our music publishing assets 

grow, we are looking for cost reductions, 

particularly by keeping overheads under 

control. ln Japan, Fujipacific was taken on 

during the year to manage our business 

in the territory, allowing us to achieve cost 

savings while maintaining control over our 

catalogue. 

Spread of radio and 

TV increases demand 

for music 

Du.ing recent years, the emergrng markels 

ot Easlern Europe, Asra and Ldtin America 

have been under consrderable economic 

pressure. Even so. we have invested in 

these marke6 to ouild strong and growing

)rlyi ng gro\ rth 

d by acquisitions 

businesses and the results for the year 

are evidence of the benefits of these 

investments. We opened a reg onal Latin 

American office in Miami and increased 

our investment n Latrn reperto re generally. 

As a result, we saw malor success from 

Ldti'l w'ler/a1'sts sJch a' Enriqre lg esias 

and the rock band Mana. 

As the number of radio and ry $ations 

around the wor d increases, so does their 

demand for music, drving growth in 

all aspects of our publishing business. ln 

particular, we beleve there are good groMh 

oppo'1u'rities'or syrchton sat on cers,ng, 

as expenditures on advertising and motion 

picrure and televisron productons cont nue 

to ncrease. 

!vw\l enrqLreq corn 

EMI Music Publshing intends to remaln at 

the foref'orl ol explor rg lhe oppo'tlr.rtres 

and responding to the cha lenges created 

by the nternet. ln addition to our strong 

financial performance, we are also proud 

lo have receved some of the nalor nt>rc 

puohsher awards a oJnd the world - 

inc udinq the prestiqious Publisher of the 

Year from both ASCAP and BMl. We 

believe that our roster of songwriters, 

rich catalogue and award-w nning team 

will ensure that we are well positioned 

for continued future qrowth. 

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$\\\{ srmp yred co uk 

 

 

 

 

 

Exploring new 

internet opporlu n ities 

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)rlyi ng gro\ rth 

d by acquisitions 

businesses and the results for the year 

are evidence of the benefits of these 

investments. We opened a reg onal Latin 

American office in Miami and increased 

our investment n Latrn reperto re generally. 

As a result, we saw malor success from 

Ldti'l w'ler/a1'sts sJch a' Enriqre lg esias 

and the rock band Mana. 

As the number of radio and ry $ations 

around the wor d increases, so does their 

demand for music, drving growth in 

all aspects of our publishing business. ln 

particular, we beleve there are good groMh 

oppo'1u'rities'or syrchton sat on cers,ng, 

as expenditures on advertising and motion 

picrure and televisron productons cont nue 

to ncrease. 

!vw\l enrqLreq corn 

EMI Music Publshing intends to remaln at 

the foref'orl ol explor rg lhe oppo'tlr.rtres 

and responding to the cha lenges created 

by the nternet. ln addition to our strong 

financial performance, we are also proud 

lo have receved some of the nalor nt>rc 

puohsher awards a oJnd the world - 

inc udinq the prestiqious Publisher of the 

Year from both ASCAP and BMl. We 

believe that our roster of songwriters, 

rich catalogue and award-w nning team 

will ensure that we are well positioned 

for continued future qrowth. 

\'\ 'v\'\r.atlan1 c recordg com 

$\\\{ srmp yred co uk 

 

 

 

 

 

Exploring new 

internet opporlu n ities 

,"\'.,v!v tlcfanma com 

VV\!w googoodo s.com



Group total 

Return on sales 

'Before operating exceptional items and amortigtion 

 

Operating prof if 

 

 

1999 Change 

 

fmo/o 

 

 

 

 

 

 

increased 

 

0.5% to f2,386.5rn, with 

 

exchange on translation having a significant 

impact by region but no overall impact. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ln total, group turnover for the year 

Overall Recorded l\,4usic sales for the year 

were down 1.2ok, wilh groMh in market 

snare n all regions except Nonh America. 

Sales in Asia, particularly Japan, were 

significantly up on last year, despite a 

declining market, due lo our strength in 

domestic repertoire. kst years particularly 

strong US release schedule was not 

repeated, leading to lower turnover in 

North America. Music Publishing sales 

increased by '1 1.8% with a strong overall 

performance being enhanced by 

acquisitions including substantially all 

of the Windswept Pacific catalogue and 

51 o/o of the Hft & Run catalogue. Sales rn 

North America were significantly ahead 

of last year reflecting strong groMh 

in US mechanical, performance and 

synchronisation income and the impact 

of the Windswept acquisition. European 

performance was also strong. particularly 

in the UK (which benefited from both 

acquisitions), Germany and ltaly. 

Overall, group operating proJit (EBITA) 

was up 7.7o/o at f290.6m. Exchange on 

translation again had a significant impact 

by region but no overall impact. Adding 

back depreciation gives EBITDA for the 

year of f348.4m, a 6.9% improvement 

over last year (1999: f326.0m). 

Operating profit improved at Recorded 

Music by 7.1 % to f 195.1m. Profits 

improved in all regions except North 

America, driven primarily by increased 

sales and the first profits from our new 

media strategy (including f24.7m from 

musicmaker.com which has been allocated 

across the regions). Within North America, 

US profits fell reflecting both lower sales 

and further investment into the label 

infrastructure. Music Publishing operating 

profits improved by 9.1% with a strong 

overall performance, particularly in the US, 

being enhanced by the Windswept and 

Hit & Run acquisitions. 

A detailed explanation of the trading 

performance is grven in the Business 

Reviews on pages 4 to 1 7. 

Total group turnover Jor the second 

half of f '1,306.4m was f73.1 m lower 

than last year with foreign exchange losses 

on translation accounting for f31.5m of 

the change. Recorded Music sales were 

down f98.7m or 8.2o/o al f1,111 .1m 

following particularly strong performances 

last year in both Japan and the US. Music 

Pub ishing turnover was up f25.6m or 

15.1% to f 195.3m with acquisitions aiding 

strong performances in the U5 and UK.

]UK 

2 Rest of Europe 

I North Arneica 

4Asa 

 

 

 

 

 

 

 

 

lUK 

2 Rest of Europe 

3 Nodh America 

5 Other 

 

 

 

 

Total group operating profit for the 

second half of f 171.5m was f7.0m ower 

than last year including foreign exchange 

losses of f7.1 m. EBITDA for the second 

half was f20'!.4m, f6.4m lower than 

last year including an adverse exchange 

impact of f7.6m. Recorded Music 

operating profit was down f 14.0m or 

10.7ob at f 1 16.7m rairly as a result 

of lower sales. Music Publishing operating 

prof t was up f7.0m or 14.6a/o al f54.8m 

reflecting the good U5 performance 

and recent acquisitions. 

Group finance charges for the year 

of f50.3m were f5.9m higher than last 

year (1999: f44.4m). This cost consists 

of tr,,ro main elemen6: interest charges 

on borrowings, and other interest and 

fees. lnterest on bonowings was 

unchanged year on yeat with improved 

treasury management strateg es offsetting 

the acquisit on driven increase in average 

bonowings. Other nterest and fees have 

increased by f6.3m, as the f7.1 m received 

last year in conjunction with the loan to 

HMV [/]edia Group was not repeated th s 

year. lnterest cover at the end of the 

year was a healthy 6.9 times. 

ElVl has a 42.65% investment in Hl\4V 

Media Group, the musrc and book retailer. 

This investment ylelded a net contribut on 

to pre-tax profits of f4.3m ('1999: f2.5m). 

W thin th,s resuh, EM|S sha.e of joint 

venture operating profit for the year 

was down 8.0% to f27.7m with a nrong 

performance from the HMV music 

stores being offset by a disappointing 

performance from the Wate6tone5 book 

stores and the frrst year start-up losses from 

the nternet operations of both businesses. 

The fall in operating profits was, however, 

more than offset by a 15.2% reduction 

n joint venture finance charges to 

f23.4rn. 

fu a result of the increase in operating 

profit, f nance charges and EMlS share 

o{ its joint venture and associates' pretax 

prof ts, adjusted profit before 

tax (adjusted PBT - ie profit before tax, 

amortisation and exceptionals) ncreased 

by 8.1% to f245.4m (1999: f227]m). 

As a result of the Windswept and Hit & 

Run acquisitions, copyright arnortisatron 

increased by f6.6m to f33.5m (1999: 

f26.9m). Goodwill amortisation for the 

year was f '1 .1m (1999: f0.4m). This 

gave a total amortisation charge for 

the year of f34.6rn (1999: f27 3m). 

The operating exceptional charge 

of 14.0m (1999: f ni ) consists mairly 

of integration costs associated with the 

Windswept Pacific acquisition. 

During the year EMI sold tts shares in 

GWR Group PLC (GWR), realising a profit 

on the disposa of this investment in a 

non

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wwwsarah-brightman.com 

.]: 

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Treasury management 

The qroupS {undrng, liquidity and interest 

rate and foreign exchange rate risks 

are managed by the groups treasury 

departmenl. Treasury activities are carried 

oui wthin a framework of policies and 

guidelines approved by the board, with 

iontrol and monitoring delegated to the 

Treasury Management Committee, chaired 

by the group finance director Treasury does 

not operate as a profit centre and po|cres 

specifically prohibit the use of fir^ancial 

instruments for speculative purposes. 

Financial instruments held by the group 

comp/tse derivatives, bonowings, cash 

and irquid resources and other frnancial 

assets and liabilities. including certain 

creditors and provisions which are payable 

after more than one year. The main 

purpose of these financial instruments is 

to raise finance for the groupS operations. 

Treasury policies cover the use of financial 

instruments within the group and have 

remained unchanged throughout the 

financial year. These policies also ensure 

that adequate, cost-effective funding is 

available to the group at all times and that 

exposure to financial risk is minimised. 

Funding and interest rate risk 

Group funding is managed via the use 

of short and medium-term committed and 

uncommitted bank facilities. ln addition, in 

Auqust 1999, the group issued U5$500m 

of 1O-year Guaranteed Notes to finance 

the Windsvvept Pacific acquisition and 

to replace existing US bank borrowings. 

Bank tacilities used by the group have 

a broad range of maturities, which are 

renegotiated as they fall due to ensure 

sufficient funding for the group. 

The group borrows in a variety of 

currencies at both fixed and floating rates 

and then uses interest rate s\lr'aps, caps 

and collars to manage group exposure to 

interest rate fluctuations. Treasury policy 

is to keep between 25o/o and75ok oI 

its borrowngs at fixed or capped rates. 

Al the year end, 54.4olo of the group's 

bonowings were fixeo or capped after 

taking account of interest rate swaps, caps 

and collars. Financial instruments held by 

the group to manage interest rate risk at 

31 l\,4arch 2000 are disclosed on page 

59, note 19 (vii). 

Foreign currency risk 

Due to the international nature of its 

operations, the group faces cunency 

exposure in respect of exchange rate 

fluctuation against sterling. Balance sheet 

translation exposures are hedged to the 

extent that overseas liabilities, including 

bonowings, provide a natural hedge, 

Group policy is not to undeftake additional 

hedging measures. 

It is also the groups policy not to 

hedge profit and loss account translation 

exposure. Transaction exposures are 

hedged, where deemed appropriate and 

where they can be reliably forecast, with 

the use of forward exchange rate contracts. 

FoMard rate contracts held by the group 

at 3l March 2000 are disclosed on page 

59, note 19 (vii). 

Warner EMI Music 

As discused in the Chairmans Statement, 

on 24 January 2000 we announced that 

an agreement had been reached betureen 

ElVl and Time Warner to combine our 

respective music busineses to form Warner 

EMI Music. This agreement is conditional 

on, among other things, regulatory and 

tax clearances and obtaining shareholder 

approval at an Extraordinary General 

Meeting (EGM). A Circular and Lining 

Particula6 explaining the deal in further 

detail will be issued at the beginning of 

June with a Notice convening the EGM. 

Year 2000 

Leading up to the year 2000, we 

implemented a programme to update or 

replace all date dependent internal lEtems 

that are critical to the groupb ongoing 

operations or preparation of financial 

information. This proJect has been 

completed successfully with total cosb 

to the group of lust over f22m. 

EMU programme 

There still remain a number of issues to 

be resolved concerning European Monetary 

Union and EMI has therefore decided to 

become a late adopter. EM|S EMU 

programme is nevertheless well under way 

and is giving rise to costs both in trainrng 

and systems modification. These costs 

are being charged to the profit and loss 

account as incurred. Costs to date have 

not been significant and total costs are 

estimated at f 5m, the majority of which 

will be incuned in the financial year 

200cv01.

wwwemqroup.com 

waste sheea {rom 

our CD booklets povided 

the p nt stock for 

last year's slmmary 

envonmental review

httpi//atsahool.eduvreb.co. 

uk/nlsbinswmd 

We recognise that our responsibilities as a 

business extend into the wider community 

in which we operate. This commitment 

is addressed through our environmental 

 

programme, the Music Sound Foundation, 

and a wide range of charitable, community 

and arts initiatives around the world. 

 

Environment 

Our environmental programme began in 

1991; since 1993 we have made the details 

of our performance pubhcly available in 

an Environmental Report. 

Although the music business has a low 

environmental impact relative to other 

industries, we consider it important to 

reduce our impacts wherever practicable. 

There is also plenty of evidence that the 

environment matteE to our stakeholdeE 

- shareholders, artists, employees and 

consumers. 

Our worldwide businesses undertake a 

range of initiatives; full information is on 

our website, wvvw.emigrdJp.com. Energy 

use is our biggest environmental issue. 

 

We translate our consumption into CO2 

emissions to provide an indication of our 

contribution to global warming; this year, 

it fell by 2ol". Within manufacturjng, 

 

the significant gains of the early years 

are becoming harder to replicate. Solvent 

use was reduced by 3% this yeal but 

hazardous waste rose slightly; we expect 

to correct that next year 

 

 

The EMI Group was the highest ranked 

media company on the FISE 100 in 

Business in the Environments 1999'lndex 

of Corporate Environmental Engagement', 

and is included in the 1999 Dow Jones 

Sustainability Group lndex. Approximately 

60% ot our CD output comes from 

plan6 with lso-certified environmental 

management systems; this year the UK 

CD plant also achieved certification to the 

Eco-Management and Audil Scheme. 

The Music Sound Foundation 

ln its first three yea6 the Music Sound 

Foundation, the rndependent charity 

established in the uK by EN/t, has made 

donations exceeding f945,000 to schools 

and individuals. lts mission is to improve 

music education. 

f245,000 was awarded to students, 

schools and music teacheE to be used 

primarily for musical instruments and 

teacher training. 

f700,000 was awarded to 10 secondary 

schools enabling them to apply successfully 

for Arts College status within the 

governments specialist schools programme. 

The Foundation also sponson an annual 

three.day visit for music teacheB to 

key music industry sites, and co-funds - 

together with the Bntish Phonographic 

Industry and the Department for Educalion 

and Employment - an adlrsory service 

for the specialst Art Colleges. ' 

In September 1999, five music colleges 

were each gven f5,000 to award bursaries 

to music students. 

Community initiatives 

At a local level, our commitment is 

reflected in a variety of ways. From 

university scholarship programmes 

established in memory of EMI artists, 

to support of local community and 

employment initiatives, to arts 

sponsorship, our individual busineses 

focus their resources and efforts on what 

is most appropriate to their local and 

national communities.

1 Eric Ni.o i (49) 

Erc N co Wa5 aopo nted to the Boad . l99l .rs a Nof 

ere.Jt!e Dre.toi be(omnq €xetut,/eCharran l^ l"y 1999 

Urt l0 Apr 1999, re,,!.s Group C'ltl Exe{Liiie 1r: !_ ied 

I(Lr5 Hold Esr p.,uB), \,;' c. l'eIr.ec lro- R.\rn:'€e 

l.lac

Corporate Governance 

EMI remains committed to high standards of corporate go€mance. 

lhe Board considers that the Company has, throughout the yeat 

complied with the Code prwisions set out in Section 1 of the 

Combined Code issued by the Commiftee on Corporate 

Go\€rnance, apart from those relating to the length of Directo6' 

service contracts, which are discussed in the Remuneration Repon 

(on page 33). ln accordance with guidance issued by the London 

Stod Exchange, the statement on pages 26 and 27 regarding 

the Companys system of internal control is limited to internal 

financial controls. 

Ernst & Young have reMewed the Company's statement as to 

its compliance wth the Combined Code, in so far as it relates to 

those parts of the Combined Code which the UK Listing Authority 

specifies for their review, and their report is set out on page 37. 

The remainder of this section provides an explanation of hcnrrr 

EMI applies the principles of good governance which are set out 

in the Combined Code. 

The Board 

The Board of EMI cunently comprises four Executile Directors 

and five Non-executive Directors. All of the I'lon€xecutle DiEctors 

are considered to be independent of management and free from 

any business or other relationship which could material! interfere 

wrth the exercise of their independent judgement. As reflected 

in their biographies, which appear on page 24, the DirectoB 

hare a wide range of experience in muhinational and consumer 

orientated businesses. fte Board therefore has a balanced range 

of experience. 

Mr Eric Nicoli is both Chairman and the senior executive officer 

of the Company Mr Nicoli took over these posittons followng 

Sir Colin Southgates retirement after the conclusion of the 1999 

Annual General Meeting. Dayto-day executive responsibility for 

the running of the Company3 two main businesses lies wth Mr 

Ken Berry as Chief Executive Officer, EMI Recorded Music, and 

with Mr Martin Bandier as Chief Executive Officet EMI Music 

Publishing, Given the importance of the roles of Mr Berry and Mr 

Bandier, the Board consideB that the appointment of an executive 

chairman, who brings complementary skills and experience and 

to whom the divisional chief executive officers report, is the most 

effective structure for EMI and is in the best interesB of both 

the Company and its shareholders. The Board also considers that 

the nature and level of matters reserved for decision, erther to 

the Board as a whole or to standing committees of the Board, 

appropriately limit the authority of the Chairman and reflect 

the fact that the posts of chairman and senior executilte officer 

are combined in one person. 

It is the Boards policy that, so long as the Chairman is also the 

senior executive officer of the Company, the independent Nonexecutive 

Directo6 should comprise a numerical majority of the 

Board and that the senior independent Non-€xecutive Director 

should also be either sole or joint Deputy Chairman. Sir Dominic 

cadbury is the senior independent Non€xecutive Directot haMng 

succeeded Sir Peter Walte6, vvho retired at the conclusion of the 

1999 AGM. Sir Dominic became the sole Deputy Chairman 

following the resignation of Mr Simon Duffy on 31 December 

1999. Prior to then, Sir Dominic and Mr Duffy were joint Deputy 

Chairmen. Mr Dufry was also Group Finance Dircctor and has 

been succeeded in that role by Mr Tony Bat6, who combines 

his naru mponsibilitig with his preMous role as Executive Vice 

President and Chief Financial Officer, EMI Recorded Music. 

The appointment of Directo6 and executive appointmena wthin 

the Board are considercd by the Board as a rrvhole based on 

recommendations from the Nomination Committee. The Articles 

of Association include a requirement that all Directors should 

submit themset!€s for reelection by the shareholdeB at least 

once every three years. 

The Board meets at least six times each year, with additional 

meetings or contact betl^/een meetings as necessary The 

programme for each year is approred by the Board and. cunently, 

involves reviarvs of strategy and the operations and results of 

the two marn business units, as well as the approval of annual 

budges and medium-term plans. Actual results for the Group and 

individual business units are reported to all Directos each month. 

At least once each year the Board meets at the premises of one of 

the Groups business operations, to allow for presentations by, and 

more detailed discusions with, local management. 

These procedures, together with other regular and ad hoc reports, 

are antended to ensure that the Board is supplied in a timely 

manner with information appropriate to enable it to discharge 

its duties. 

lhe Board has delegated certain matte6 to standing committees, 

details of which are set out belcMi. Horvgrer, to ensure its overall 

control of the Companys affairs, the Board has resened certain 

matteB to itself for decision. lhese include the Groups nrategic 

plans and annual operatrng budgeb, sgnificant acqursitions 

or disposals of companies, businesses or asets, and signfficant 

contractual commitmen6 or items of expenditure, together 

with policies relating to the Groups treasury function, pensions, 

major lrtigation, employee share schemes, and environmental 

and ethical isues. 

All Directom have access to the services and advice of the 

Company Secretary and there are also procedures for Director 

to obtain independent professional advice at the cost of the 

Company in appropriate circumstances.

Corporate Governance (continued) 

To broaden their experience, the Executive Directo6 are 

errouragd to tnke external appointrnenb as non€xecutive 

dirrtors, usually up to a maxmum of t\ o. They may retain 

the remuneration from such appointments. All appotntmenb 

must be appored by the Board to aloid conflicts of inter6l 

Board committees 

The committees established by the Board and their membeEhip 

are set out on page 24. Each committee has witten terms of 

reference and levels of authority and, except in the case of the 

Remuneration Committee, minutes of meetings are circulated 

to all Directo6. 

The principal committees are the Audrt, Remuneration, 

l"lomination and Executi\,e Committees. Reflecting the important 

role played by the independent Non€,\ecutrve Directon in 

ensuring high standards of corporate gcrrernance, the Audit 

and Remuneration Committees comprise all the Non€,\ecutive 

Directo6. Follc fiing the retrrement of Sir Peter Watters, the Audit 

Committee has been chaired by Kahben O'Doncnran, wfiilst 

the Remuneration Committee has been chaired by Sir Dominic 

Cadbury the senior independent Non+xeolti\€ Dircctor. The 

Nomination Committee comprises the Chairman, in addition to 

all the Non+xecutive Directo6, and is also chaired by the senior 

Nonexecuttve Director. The Executive Committee comprises the 

Chairman, the Group Finance Dircctor and the Chief Executive 

fficers of the Companyt two main busines units. 

The role of the Remuneration Committee is described on 

page 30. tt rneets at least three times each year. The nnin 

responsibilities and procedures of the other three principal 

Committees are a follovrr: 

Audit Conmitte - makes recommendations to the Board 

regarding the appointment of the o\ternal auditors, and rans,tus 

their independence and obJecttvity. lhe Committee Igr'iqrs the 

half-year and annual financial statemen6 with particular €ference 

to accounting policies and practices, and the scope and results 

of the audit. lt also reviq 6 the nsk assesment and audit plan of 

the internal audit department and other control procedures. The 

Committee mees three times each year, and iB meetings are 

normally attended by the Group Finance Directot the enernal 

audito6, the Group Financial Controller and the Head of lnternal 

Audit. At least once eadr )€ar the Committee meets with the 

e,rternal auditon wi'i*rout the presence of Executive Dircctors or 

other management. 

N@iinatbn Committ@ - makes recommendations to the Board 

on the appointment of Directors and senior executilres and the 

reappointment of Non€xe€utrve Directols on the expiry of their 

threeyear term of appointment. Ihe Committee meets when 

required. 

Exer't/tive Cqnmitte - mponsible for the approval of acquisitions, 

divestments, capital expenditure and contractual commitrnents 

belcn/t/ the leuel vvhich the Board has reserved to rtsetf for deasion, 

and for certain operational, administratile and other routine 

matters. The Committee also regularly rwie!,\6 and reporb to 

the Board on the performance of the Groups businesses. Ihe 

Committee meeb at le6t six times each year 

Directon' remuneration 

lnformation about the Companyb remuneratton policy and 

procedures and about the Directo6' remuneration is grven in 

the Remuneration Report on pages 30 to 36. 

Directors responsibilities 

UK company law requires th€ Directors to prepare financial 

statemenb for each linancial year which grve a true and fair vis / 

oJ the state of affaiE of the Cbmpany an-d of the Group and of 

the profh or loss of the Group for that period. ln preparing those 

financial statemenE, the Dirccto6 are required to select suhable 

accounting policies and then appt them consistently, to make 

.iudgements and estimates that are reasonable and prudent 

and to state whether applicable accountrng standarcls ha\€ been 

followed, subject to any material departures disclosed and 

explained in the financial statemenb. The DiEctors confirm that 

they have complied with these requiremenb in preparing the 

financial statements on pages 38 to 69. 

The Directors are responsible for keeping poper accounting 

recor* wtrich disdose, with reasonable accuracy at any time, the 

financial positron of the Group and enable them to ensure that 

the financial statemen$ comply wrth the Companies Act 1985. 

They are also responsible for safeguarding th€ assets of the Group 

and hence for taking reasonable steps for the praention and 

detection of fraud and other inegularities. 

Going concern 

The Directors belieue, after maktng inquiries that they consider 

to be appropriate, that the Group has adequate resources to 

continue in operational existence for the foreseeable future. For 

this reason, they continue to adopt the going concern basis in 

preparing the financial statements. 

lntemal control 

Ihe Combined Code requires the Board to maintain a sound 

q6tem oJ internal control, to revierrv rts effectircness, and to report 

to shareholdeE that it has done so. This extends the prwious 

requirement ccn€ring internal finarKial controls to those contol 

policies and procedures relating to significant business, operational, 

compliance and other rsls. Guidance on this section of the 

Combined Code was published in September 1999 in /ntemal 

Control: Guidance for Dr

The Board is responsible for the Groupb system of internal 

control, and h6 revrq €d the effectiveness of the Groups slFtem 

of internal finanaal control as it operated during the year The 

full Board meeb regularly throughout the year and the matteG 

specifically resen€d for ib approval ensure that the Dirccto6 

maintain control over significant strategic, financial and 

compliance rEtte6. ?re q6tem of contols can provrde only 

reasonable and not absolute assurance against material 

m isstatement or loss. 

lnvestor relations 

The Executive Directors regularly hold discusions with individual 

institutional shareholden and analysB and, in addhion, there 

are general presentations after the half-year and annual results. 

lndividual shareholders have the opportunity to question the 

Chairman and other Directo6 at the AGM, and the Diecto6 

meet informally with the shareholdea after the AGM. 

The Group has an established organisational structure whh 

dearly defined lines of responsibility and reporting. lhe Board 

has devolred to orecutive management the responsibilrty for 

the implementation and maintenance of the Groups s)/stem 

of internal frnancial control. Each busines unit operates in 

accodance wth manuals that dictate policies and procedures 

applicable, in common, to all of the Groupb unib. 

the Group operates a comprehensive annual planning and 

financial reportrng process and prepares both medium-term 

strategic planl which focus on key business risk, and annual 

budgeE, both of which are formally appnwed by tte Board. the 

Group5 performance is monitored against budget on a rnonth! 

basis and all significant variances are investrgated. There are 

defined aLnhorisatbn procedures in respect of certain matters, 

including capital expenditure, investments, the granting of 

guarantees and the use of financial instruments. The Board also 

receives twice-yeart a r€vrew of all material liiigation undertaken 

by or against the Groups companies and considen the associated 

risk to the Groups o€rall asset b6e and operations. 

The strength of an internal control s)/stem is dependent on 

the quality and integrity of management and staff. This integrity 

is reinforced by a routine compliance certificatron proces 

throughout the Group, under vvfiich key executi\,€s and managers 

confirm their compliance whh the Gr@ps polichs and prccedures. 

The internal audit function operates as one Groupwide 

department, which monitoE and supports the internal financial 

control q6tem and reports both to the Audit Committee and the 

GroupS senior management. The respon$bilities of the internal 

audit function indude recommending impro€ments in the control 

environment and enzuring compliance with the GroupS procedurs 

and policies. The Audit Committee re/io/ys the risk assesment 

and audit plan prepared by the internal audit department.

Directors' Report 

for the year ended 3l March 2000 

The Chairmans Statement, the Business Revtews and the 

Financial Revisr in this Annual Report together contain details 

of the principal operations of the Group and their resulb during 

the year as well as likev future de€lopmenb. 

Wamer EMI Music 

On 24 January 2000, the Company and Time Warner lnc. 

announced their intentron, subject to shareholder approval, 

regulatory clearance and the satisfaction of certain other 

conditions, to combine their respectile music busineses to form 

Warner EMI Musrc. The apprwal of the Companyb sirareholders 

to the propo6al will be sought at an E;rtraordinary General 

Meeting which is expected to be held on 26 June 2000, 

Regulatory clearances and certain other conditions remain 

outsanding as at the date of this Report. 

Share capital 

changes in the Companys st''are capital during the year are set 

out in Note 25 on page 53. 

Employment policies 

The Group3 decentralised organietion empo\ €rs local 

manag€ment, encouraging them to make the best decisions on a 

timely, but informed, basis. Responsibility for employnrent matters 

therefore rests primarily with each business operation under the 

general umbrella of EMI Group5 policy and procedure guidelines. 

EMI Group companies are committed to the maintenance of 

a \ lork environment free of discrimination on the grounds of 

gender nationality, ethnic or racial ongin, non-job-related disability 

or marital status. 

Detailed information on the proposed combination will be 

set out in the Listing Partrculars which are expected to be posted 

to slEreholde6 on 2 June 2000. tf the combinaron is comdeted, 

the Company intends to change its financial period end to 

31 December with effect from 31 December 2000. 

Dividends 

An intedm dMdend of 4.25p per Ordinary Share was paid on 

3 March 2000. The Board is recommending a final dividend of 

'11.75p per Ordinary Share, making a total of 16.0p (1999: 16.0p). 

The final dMdend will be paid on Monday, 2 kober 2000 to 

Ordinary Shareholders on the register as at the close of business 

on Monday, 4 September 2000, with the shares going exdMdend 

on Tuesday, 29 Augun 2000. 

sub6tantial shareholders 

As at 18 May 2000 the Cornpany had been notified of the 

follo,ving interess in iE Ordinary Shares of 30lo or more: 

The Capital Grdp Companies, lnc. 37,127 ,310 

&,4€3228 

Janus Capital Corporation 

Merill Lynch & Co, lnc. group of 

companies including 

Mercury Asset Managernent Limited 57 ,929,030 

Prudential plc Aroup of companies 30,239,983 

Putnam lm€stment Management, lnc. and 

__nrelutnam 

Advisory company, Inc. 

3:il1ffi;.?,,:H,:l"rf.?';"13!8 

 

 

 

 

V" oI 

capital 

held 

4.71 

5.14 

ln keeping with the Groups goal of continuing to develop an 

open and two-way communication process, the Chairman has 

initiated a series of all+mplqpe communications. ln additron, 

an +mail baed process has been deeloped to encourage dircct 

feedback to indMdual employees on their questions regarding 

the Groups policies and busines isues. 

lnformation on share options granted to emplqlees is gtwn in 

Note 25(ii) on page 63. 

Supplier payment poliqy 

The Company negotiates payment terms with ib suppliers on 

an indMdual bais, with the normal spread being payment at the 

end of the month folloruing delirery plus 30 or 60 day5. lt is the 

Companys policy to settle the terms of payment wtren agreeinq 

the terms of each transaction, to ensure that the suppliers are 

made aware of the terms, and to abide by them. 

The number of days' purchases outstanding at 31 March 2000 

is calculated at 24 days (1999: 18 days). 

Charitable and politi@l contributions 

charitable, sponsorship and fund-raising activities canied out 

during the year within the Group contribr"rted some f 1.7m 

(1999: f2.8m) to charitable organisations and communities 

aound the uorld. These included UK charitable donations 

amounting to f0.5m (1999: fl.7m). No political contributions 

were made (1999: fnil). 

7 .35 

3.83 Research and development 

Research and darelopment is the responsibility of the Groups 

on research and 

?8:#iture

Directors 

lhe present Diectors of the Company are namd on page 24. 

All served as Directors throuqhout the year, other than 

Mr M R Jackson and Mr A J Bates, vvho v\€re appointd on 

19 October 1999 and 1 January 2000 r6pecti\€ly. 

sir Colin Southgate and sir Peter Walte6 ceased to be 

Directors at the condusion of the 1999 Annual General Meeting 

held on 16 July 1999. Mr S P Duffy served as a DiEctor up to 

31 December 1999 when he resigned. 

Mr E L Nicoli, who succeeded Sir Colin SouthgEte 6 Chairman 

on 1 6 JuV 1999, retires by rotatron pu6uant to Article 1 l2(A) at 

the Annual General Meeting and, being eligible, offers himself 

for re€lection. 

Mr Bates and Mr Jackson both retire at the Annual General 

Meeting puBuant to Article 1 12(B) and, being eligible. offer 

themselves for election. 

No Director had a material interest in any contract of significance 

subsisting at the end of or during the year involving any Group 

company, other than those who have a service contract and 

Mr Bert vvho has an option to purchae, at fair market value, the 

house in Los Angeles provided to him rent-free by the Group. 

Details of Directo6' interests in the shares of the Company are set 

out in the Remuneration Report on paqes 35 and 35. 

Auditors 

Ernst & Young have expressed their willingness to continue in 

office as auditors and resolutions proposing their reappointment 

and authonsng the Directo6 to determine their remuneration 

wll be put to the Annual General Meeting. 

Annual General Meeting 

The 2000 Annual General Meeting of the Company will be held 

at 1 1.30am on Friday, 21 July 2000 at the Hotel lnter-Continental 

London, 1 Hamilton Place, Hyde Park Corner, London Wl. The 

Notice of the Annual General Meeting accompanies this Annual 

Report. ln addition to the ordinary businEss ol the meeting, 

reiolutions will be put to shareholdeG giving authority to the 

Directors to allot shares, to disapply pr€mption rights and to 

purchase the Companys own shares. Further explanations of 

ihese matten are provided in the letter to shareholden that 

accompanies the Notice. 

By Order of the Board 

C P Ashcroft 

Secretary 

22 May 2000

Remuneration Report 

for the year ended 31 March 2000 

Remuneration poliqy 

EM|S remuneration policies reflect the need to attract, retain 

and motivate top calibre international management in the context 

of remunera{on leyels and practices in the international music 

and entertainment industry many of vvhich are set in the USA. 

Remuneration packages for senior executiues are designed to 

create a strong link bet\eeen reward and performance, with 

emphasis on longeFterm returns to strareholders and linkinq 

incentiles to objectrre measum of perfornrance. Leds and= 

forms of remuneration are tailorcd to the different marketplaces 

in which the Group compet6, and recognise the importance 

of creatrve talenL as \ €ll as the fact that Music fublishing and 

Recorded Music are distlnct marketplaces. 

The remuneration packages of the Executive Directors are 

designed to help them attain, and encourage them to retain, 

long-term interests in the Companys shares, and to align their 

interes6 with those of the shareholden. Performanc+related 

ehmenB represent a significant proportion, currently about 

one-half to twqthirds, of their total annual remuneiatron 

opportunity 

Remuneration Committee 

the Board has delegated to the Remuneration Committee 

apprwal of the remuneration and emplqment terms of the 

Executile Directors and other senior executi!€s, induding pension 

righ$ and any compensation paymen6. 

'lhe Committee consists entrely of the Non€xecutive Directors. 

tt is chaied by Sir Dominic Cadbury the Deputy Chairman and 

senior independent Non-executirc Director. Sir Dominic succeeded 

Sir Peter Walters who retired follorving the 1999 AGM. The nam6 

of the memben of the Committee are listed on page 24. 'lhe 

Chairman is inMted to attend the Committees meetinos on 

matteG other than those concerning himself. 

The Committee has access to advice from internal souKes and 

seeks external advlce as and when it requires. ln addition, to assist 

it in monitoring the leyel and mix of remuneration packages, the 

Committee has access to a number of music and general industry 

remuneration surv€J,s, both lo(al and international, co€rinq a 

range of companies. lhe Committee takes into account faitors 

such as the nature, size, complexity and international profile of 

those companies relative to EMl. 

Elements of rem uneration 

Bae sahry and funefis 

the Executte Directors' base salanes are set by the Committee 

and are normally revio,raed annually. Benefits typically include car. 

life asurance, disability and heahha"re plans. iri addition, follouuing 

his relocation to the US, the Group provides Mr Berry with a hous6 

in Los Angeles rent-free. Mr Berry has the optron to purchase the 

house at fair market value at ani trrne. He dbo receives tax 

equalisation payments relating to seMce in California. 

Details of the base elaries and benefis for individual Executive 

Directo6 are set out on page 34. 

Annual fuius 

As participans in EM|S Senior Executive lncentive Plan (SEIP), 

the Executive Directors and other senior execr.rtnes are eligible for 

an annual bonus based on profit performance targets set by the 

Remuneration Committee for the Group or indivrdual busines 

units. Performance is measured by reference to a demanding 

F,ryet Fofit level alvvhich the target award is earned, and a 

maximum profit l*elat which the maximum award is earned. 

Target and maximum awards are calculated as a percenbge of 

base salary or, in the case of Mr Berry and Mr Bandier, as cash 

amounts. Any cash bonus earned is paid immediatet oi at the 

executves request, is made in the form of a defened share 

award. During defenal, the shares do not earn dividends but, to 

encourage_shares to be held, the number of shares is increased by 

one-third if defened for three years and by twethirds if deferred 

for at least six yea6. These increases are iricluded in reported 

remuneration only at the end of the applicable defenal period. 

For the year to 31 March 2000, the bonus opportunity at target 

and maximum performance respectively was 40% and 8oo/o-of 

base salary for both Mr Nrcoli and Mr Bates. The performance 

targ€t for Mr Nicoll was related to the Groupb profit after tax. 

Re{lectrng Mr Bates' dual oles, his performance targets partly 

related to Recorded Musicb profit after interest and in pan to 

Group profit after tax. Mr BerryS bonus opportunity for the 

year was US$1,000,000 at target and US$2,000,000 at 

mglrmgm performance, whilst Mr Bandie6 opportunity was 

US$900,000 at target and US$1,800,000 at maximum 

performance. Their performance targets related to the profit 

atter interest achieved by Recorded Music and Music publishinq 

respectvely. Details of the bonuses achieved during the year by 

indMdual Executile Directo6 are set out on page :+. 

Long-Hm incffitives 

Executive Directors and other senior executtv6 are also normallv 

eligible each year for performancerelated share awards under ihe 

SEIB calculated a< a percentage of base salary Each year,s award 

vesb at the end of a three-year performance period. the number 

of sham released depending upon Group or business unit 

performance against profit targeb for the three-year peiod set 

by the Remuneration Committee. In certain circumstances, for 

example upon a change of control, awards may be released 

before the normal vesting date. As with the anhual bonus, to 

encourage long-term interests in the Companys shares, executives 

may opt to defer the share award for a further threeyear period, 

with the number of shares being increased by onethird ai the 

end of the deferral period. 

ln the case of the Executile Directors, relede of the share award 

is subject to a further performance requirem€nt related to the 

Groups_Total Shareholder Return, i.e. share price growth plus the 

value of dividends paid. For the award to be released, EMIS Total 

Shareholder Return must have at least equalled the median of 

those companig that comprised the ffSE 100 at the start of 

the threeyear performance cycle. 

Share awards to the Executive Directo6 are noted in the tables 

on pages 34 and 35, but are included in reported remuneration 

only on release at the end of the three.year performance cycle. 

The cunent potential value of the performance-related share 

awards at target and maximum performance respectively is 

600/o and 120o/o of base salary for both Mr Nicoii and Mr Bates.

ln place of the normal oredapping annual share awar& based 

on threeyear performance cycles, Mr Berry and Mr Bandier harre 

been granted onetime share awards under the SEIP of 1,000,000 

and 650,000 shares respectively. these awards wll be released 

at the end of a fouFyear performance penod ending on 31 March 

2002, the number of shares released depending upon the releuant 

business units performance against aggregate profrt grcMith 

targe6 o€r the four-year performance period. Release of these 

share awards rs also subject to the Total Shareholder Return test 

applicable to b€GJtive Dircctors. ln certain arcumsbnces the 

awar& may be released before the wsting date, for example on 

termination of the executives employment agreement beca$e 

of breach by EMl, or follodng a change of control. The awards 

lapse il prior to the \€sting date, the executi!€ resigns voluntanly 

or his employnent agreement is terminated by the Goup for 

cause (as defined in the contract). The Committee consideB that 

these on+time share awards reinforce the primary focus of the 

business units' top management to achie!€ growth in profis orer 

the long run, as well as providing a strong incentive for them to 

remain with the Group. 

As described in l.lote 15 on page 54, entrtlements to 

performancerelated and restricted share awar* under the SEIP 

are met from shares purchased in the maket and held by the 

EMI Group General Employee Benefit Trust, and therefore do not 

dilute shareholders' equity. 

While the Executive Directors novv participate only in the SEIB 

awards remain ouBtanding under former incentirre plans as 

detailed in previous yea6' Annual Reports. The Executi!€ Dirccto6' 

share interests arising from the SEIP and the former incentile plans 

are noted on page 35. 

fiestntted #pres 

Mr Berry and Mr Bandier have been granted rcstncted share 

awards under the SEIP of, respectively, 725,000 and 350,000 

shares. These shares will vest at the end of the fouFyear period 

to 31 March 2002. Ihe awarcls are in lieu of addhional base salary 

and are not subject to performance requirements. lhe aim of 

the awards is to bnng Mr Beny's and Mr Bandier's basic annual 

remuneration into line with competiue practice in the usA, where 

both executives are based, whilst aligning their interests more 

closely with those of the shareholders and providing them whh 

a stong incentile to remain with the Group. 

Mr Nico{i ha been granted a restricted share award under the SEIP 

of 65,000 shares, whidr will ven on 31 March 2002. The award 

provides Mr Nicoli with a replacement for lost potential value from 

emplqtee share incenti\€s operated by his prwious employer and 

is not subject to performance requiremenb. 

The restricted share awarch of Mr Nicoli, Mr Berry and Mr Bandier 

will lape if, prior to the !€stlng date the o€cutive resigrs 

voluntarily or his employment agreement is terminated for cause. 

All or part of the awar* may also vest before the planned !€sting 

date in certain circumstances, including if the executives 

employment agreement is terminated without cause, or upon 

a change of conuol. lhe rcstricted share award of Mr Bates will 

vest pro rata to the number of rnoritf|s elapd betv\,€en 1 January 

2000 and 31 December 2002 if he leares the employrnent of the 

Groups music interests. 

Since these restricted share arards of Mr Berry Mr Bandier and 

Mr Bates are in lieu of base salary a proportion of their value is 

included in reported remuneration eadr year, aren though in 

certain circumstances the awards may lap6e or be releaed before 

the vesting date. A proportion of the restricted share award of Mr 

Nicoli is also included in reported remuneration each year, even 

though it tm could lape or be released before the vesting date. 

Share optias atd shate apryeiation igh5 

The Executive Directors and other senior executives who 

participate in the SEIP are no longer generally eligible fo the grant 

of options under the Executive Share Option kheme. The UKbased 

Executive Directon are entrtled, hororer; together with all 

other eligibh emplq€es, to appv for optionl nornnlly annually, 

under the SavingeRelated Share Option Scireme (ShareSare). 

The Executive Directors' share opttons and share appreciation 

righG arising from grants in respect of preuious yean or under 

prwious incentive schemes are noted on page 36. Executive 

share options are normally exercisable betvwen three and ten 

years from the date of grant and, if granted on or after 25 

August 1995, only if performance targeb set b/ the Remureration 

Committee are met. The target set for these options relate6 to 

the Groups Total Shareholder Return. The aggregate exercise price 

of ouStanding o

Remuneration Report (cont nued) 

Reflrement benefits and contnbutbns 

The UK-based Executive Directo6 are executive membeB of 

the UK Pension Fund, which provides them. on normal retirement 

at age 60, with a pension of up to twGthirds of base salary 

Members contribute 4% of base salary On death there is a spouse 

pension of two-thirds of the member's pension (ignoring the 

impact of any exchange of pension for a lump sum on retirement), 

plus child allowances if applicable. An early retirement pension 

may be paid on leaving on or after age 50, but the pension is 

reduced by t/:o/o for each month that pension staris earlier than 

aqe 60. Subject to the Company5 consent, the reduction applied 

may be les. 

Up to age 65, the whole of a pension in payment is guaranteed 

to increase by LPI (the lc ,,r'er of the prer'ious yea/s increase in the 

Retail Prices lndex or 5%). After age 65, the pension in excess of 

the Guaranteed Minimum Pension or GMP (that part of the 

pension which replaces the State Earninqs Related Pension) is 

guaranteed to increase by LPl, while that part of the GIVP which 

6uilt up since 6 April 1988 is guaranteed to increase by the lower 

of the previous yearg increase in the Retail Prices lndex or 3%. 

For thoe joining the UK Pension Fund after 31 May 1989, the 

'Cap' (as defined in the Finance Act 1989) limits salary for pension 

purposes to f91,800 from 6 April 2000 (1999: f90,600). 'lhe 

Company therefore makes contributions to a separate defind 

contribution plan vvhich provides additional benefits to those 

affected by the Cap. Executive Directo6 affected by the Cap and 

the after-tax value of contributions, expressed as a percentage of 

base salary in excess of the Cap, which the Company paid to the 

defined contribution plan in respect of them were: 

MrELNicoli 33.42% 

MrAJ Bates 33.90% 

MrSPDuffy 21.00% 

Mr Bandier participates in EMI Musicb U5 defined contribution 

plans, which aim to provide a pension at normal retirement date 

of 50% of pay. Contnbutions to the plans were 14o/o and 24o/o ol 

pay by Mr Bandier and the Group respectively. Consinent with US 

practice, pay forthis purpose includes the value of annual cash 

bonuses under the SE|P 

Transfer values are calculated on a basis that assumes the pension 

would b€ dravvn at the earliest date where no reduction would 

apply and wrth allcnrrance for future pension increases (both 

before and after pension commences) to reflect the past practice 

of granting increases greater than those guaranteed. 

The Executive Directo6' retirement benefits and contributions during the year were as follows: 

Executive Directors' retirement 

and contributions 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sir Colin Southgate (resigned 16 July 1999) 

 

 

 

 

 

Orreoors LOLF lo " 

, onUnuarron ol lS ltpenton ol .onmhnlorll 6 d ?$n ol $e tund\ strong hrDr

Service contracts 

The Board considers that. in the light of competitive practices 

in the global entertainment industry, it is not appropriate for the 

Company to comply with the principle in the Combined Code 

that one-year notice periods or contract terms be set as a firm 

objective for Executive Directors. Howevet the Company intends 

to continue its current practice of providing contracts normally 

terminable on one years notice for those Executive Directo6 to 

whom industry competitive practices do not directly apply. 

The Remuneration Committee endoEes the principle of mitiqation 

of loss on early termination of a service contract. lt also recognises 

the advantage of service contracts including an explicit calculation 

of compensation payable upon early termination, other than for 

misconduct or in other circumstances justifying summary 

termination. However, it is the Committees policy that where a 

service contrad provides such a calculation, it should also include 

an explicjt obligation to mitigate and to offset earnings from 

alternative employment against all or part of the compensation 

payment. 

Mr Nicoli has a service contract terminable on one years notice, 

except that the notice period from the Company is increaed 

to two yea6 up to 30 April 2001. Following a change of control 

of the Company the notice period from the Company will be 

at least two years. 

ln the light of competitive music industry practice, Mr Berry Mr 

Bandier and Mr Bates have service contracts which allow the 

employer to terminate the contract at any time without notice, 

with a specified severance payment (broadly, base salary, benefits 

and target bonus for two years) being payable on termination by 

the employer without cause or by the executive for good reason 

(each as defined in the contract). However, there is an express 

obligation on the executive to mitigate, and any earnings from 

alternat've employment during the year following termination are 

offset against the severance payment; for Mr Bates, this period 

of one year commences 12 months after termination. ln other 

circumstances, the executive must give one years notice of 

termination. Following a change of control of the Company, 

Mr Berry and Mr Bandier are entitled to terminate their service 

contracts after a one-year transitional period and to receive a 

severance payment as if they had terminated the contract with 

good reason. Mr Bandier's contract also provides for its automatic 

expiry on 31 March 2003. 

Any compensation payable to Mr Nicoli on early termination of 

his service contract would be sublect to a requirement to mitigate, 

except that in the case of termination following a change of 

control of the Company, the first years compensation would 

not be subject to this requirement. 

Non-executive DirectoB 

Fees for Non-executive Directos were increased during the year 

for the fir:l time in four yean. Each Non€xecutive Director receives 

a basic fee, which, {ollowing the increase. is nor,rr inclusive of all 

committee memberships. Sir Dominic Cadbury receives a further 

amount in respect of his addrtional duties and responstbilittes in 

his capacity as Deputy Chairman and senior independent Nonexecutive 

Director. Ms O'Donovan also receives a further sum 

for chairinq the Audit Committee. The level of these fees is set 

by the Board and the Non-executive Directors take no part in 

the discussion and do not vote on the matter. The Non-executive 

Directors do not pafticipate in the Companys incentive, share 

option or retfement plans. nor do they have service contracts, but 

each appointment is subject to review at least every three years. 

Formation of Warner EMI Music 

lf the proposed combination of the Company5 music business 

with that of Time Warner. to form Warner EMI Music, is 

implemented the malority of the options granted under the 

Companys share option schemes will become exercisable for 

a limited period of time, and share awards under the SEIP will 

become vested. Further information on these and other matters 

related to Directors' remuneration will be given in the Circular and 

Listing Particulars relating to the proposed combination which are 

expected to be posted to shareholders on 2 June 2000.

Remuneraton Report (continued) 

Remuneration details 

Annual reynurffiaticr-t" 

86e 

salary 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sir Graham 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exdud€6 t"ti€rr€nt conrihnirE (s€e table on palp 32) rd tte vdue of 5tlale a iBrG ceaing to be cortjngErt 6 Rported in the table shown belo\ /. 

 

 

 

 

 

 

 

 

 

 

Rer.lunenticn fian gior yes,r iare awat& @ing to b contingent

Compny's Odinary Sharc of l4p wh"b, 

As at 

 

3lM.rdl2m 

Totrlrha6 ofwt.n 

h€ld Oft€ro 

 

 

 

 

 

 

 

 

 

lhe Comp€rll^ R€girler of Diecto6' lnielEsls is avaihble for il6pe

Remuneration Report (contrnued) 

Dirxtors' share optans ovu Ordirnry 

5har6 of 14p each"o 

Dale Exercr€ 

Eanted _ 

po.e 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

K M Berry 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

M N Bandier 

 

 

 

 

;;i" i;;;;-;ta;',ilh" JGr"*r dia n"o" onry ex;ros€d orienaropto., towhrh,t reraes 

6r*arv_tn" *." liik tt" uOi,jsr'r*r Ua o..n und vlhld) cnn only be exsos€d wth and on fie s.m€ termt as th€ orignaroptro.r rt relales 

"t,f "ui" 

 

Appo,;r€d cha,n'nan D€5lgBte I Mary 1999 

a.m^rtrl 1 L.n'Dtu 2m0 

 

 

 

 

 

 

 

 

Directots' share appreriatnn righa" 

 

 

 

 

 

 

Sha€Prce 3l Mardl 

exeKrs€ al exercE€ 2m0 

23 )uly 

 

 

 

7 December 

 

22 July 

 

 

 

 

 

 

 

 

;"il,;fi; 

 

 

 

 

 

;" .;; in;"- ."in i""**'r o"ie e,c Gd ,n b Fe equar udrir€). dnd no 'dre, 

rhdn rp yedq r-on FF ddre sranred tro saFs aee q,drred or rap\Fd 'n trY ved 

".]n" 

wtrh rhe (DF .r(e r rtF da€ of exelcls€ ol dr 5ARt 

R€lgned 16 JuV 1999. SARS €main outstanding unl 3r July2000. 

Res'gred 3r D€emlFr 1999 

Dale ol

Auditors'Report 

Report of the Auditors to the members of EMI Group plc 

We have audited the financial statements on pages 38 to 69 

which haw been preparcd under the historical cost con€ntion 

and on the basis of the accounting policies set out on pages 

4 and 45. 

Respective responsibilities of Directors and Auditors 

EMI Group plc! DirectoB are responsible for preparing the 

Annual Report. As described on page 26, this includes 

responsibility for preparing the financial staternents in accordance 

with applicabh United Kingdom law and accounting standards. 

our responsibilities, as independent audito6, are established in 

the United Kingdom by statne, the Auditing Ptactices Board, 

the Lining Rules of the United Kingdom Usting Authonty and 

by our profession3 ethical guidance. 

We report to tou our opinion as to whether the financial 

statements give a true and fair veu/ and are properly prepared 

in accordance with tre Companr€s Act. We also report to you 

if, in our opinbn, the Di€ctors' Repon is not consinent with 

the financial statemens, if the Company has not kept proper 

accounting records, if we hale not receiwd all the information 

and explanations ue require for our audit or if the information 

specified bv larv or the Lining Rules regarding Directo6' 

remuneration and transactions with the Company is not disclosed. 

We revrs,v whether the Corporate Gc /€mance Statefi€nt on 

paqes 25 to 27 reflecb the Companys compliance with the ss/en 

provisons of the combined Code pecified fo our reuiaru by tlre 

iJnited Kinqdorn Listing Authority, and we report ff it does not. 

We are not required to consider whether the Boardb statements 

on intemal control corer all risk and controls, or form an oprnion 

on the effectrcness of either the Company's corporate 

golernance procedures or its risk and control procedures. 

Basis of audit opinion 

We condrrted our audit in accordance wittt Auditing Standards 

issued by the Auditing Practices Board. An audit includes 

examination, on a test basis, of eviderrce relevant to the amounts 

and drrlosures in the financial statements. tt also indudes an 

assessment of the significant estimates and.iudgemens made b/ 

the Directors in the preparatinn of the financial statemenB, and 

of whether the accounting policies are appropriate to the Groups 

ciKumstances, consistently applied and adequately disclosed. 

We planned and performed our audit so as to obtain all the 

informatron and explanations which vre consideted necessary 

in oder to prwde us with sufficient evtdence to give reasonable 

assurance that the financial statements are free from nntenal 

misstatement, vvt€ther caused by fraud o other inegularity 

or enor. ln forming our opinion vre also eualuated the overall 

adequacy of the presentation of information in the financial 

staternents. 

Opinion 

ln our opinion ttre financial statemens give a true and fair viaru 

of the state of affaiB of the Company and of the Group as at 

31 March 2000 and of th€ profit of the Group for the year tt€n 

ended and hare been properly prepared in accordance with the 

Companies Act 1985. 

Emst & Young 

Reginercd Auditor 

London 

22 May 2000 

We read the other information contained in the Annual Report, 

induding the Corporate Go€rnan€e Statement, and consider 

whetlrer it is consistent wifl the audited financial statements. 

We consider the implications for our report if we become aware 

of any apparent missbternents or matenal inconsistencies with 

the financial statemens.

Turnover: 

 

Less: ioint \enture turnclrer 

 

 

 

 

 

 

 

 

Share of operatrng profit in jont \€nture 

 

Mnoperating orceptional hems: 

(losses) profiE on businesses di+osed of or terminatd 

of fxed asset im,Estrnent 

 

 

 

 

 

Finance 

Group (including asociated u ndertakings) 

.l,oint \,enture 

 

Taxation on 

 

 

 

 

 

 

Earnings/baic EPS 

Adjustmenb: 

Operaing excefiional itenr 

Nonoperating exceptional items 

Amatbation of Soodrv l and m6ic copyrights

Y..r rrd.d 3l M{dr 2q! 

EMI Grotrp (odrrdiE H \r' Mdia Oo(p pld 

8eiorc 

€repdond 

€!.ep6ond 

itenEand 

it€lrlsad 

 

 

 

 

EMI Gqp GdudirE lilvlv N,leda G'oup pld 

8€fo8 

Exapdd'd 

icnEand 

ibn6 and 

 

€Epltcrd 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year erdd 3l li,ladr 2000 

Fer *Ere 

 

\b e.ded 31 Mani lgp 

per 

{lae

Balance Sheets 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets 

Stocks 

Debtors: arnounb falling due within one year 

Debtors: arnounts falling due after more than one year 

lnvestments: liquid funds 

Cash at bank and in hand and cash deposis 

CreditoB: amounts falling due wthin one year 

Bonowngs 

Other creditors 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bono/tdngs 

Other creditoa 

Provisions for liabilhies and charges 

Defened taxation 

Other provisions 

lnvestments: joint venture (HMV Media Group plc) 

Share of gross assets 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital and reserves 

Called-up share capital 

Share premium account 

Capital redemption reserve 

Other reserves

Statement of Total Recognised Gains and Losses 

 

 

 

 

 

 

translation - oint venture 

 

 

 

Reconciliation of Movements in Shareholders' Funds 

for the year ended 31 March 2000 

Opening shareholders' f unds: 

As reported 

 

DMdends (equM 

Other recognised gains (bsses)

Net cash inflow from 

 

 

Interest received 

lnterest paid 

lnterest element of finance lease payments 

 

returns on investments 

 

 

 

 

 

 

 

Purchase of music copyrights 

Purchase of tangible fxed assets 

Sale of tangible fixed asseS 

Purchase of investments: own shares 

Purchase o{ other fixed asset investmenb 

Sale of other fxed asset investmenb 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchase of further investment in joint venture 

Purchase of associated undertakings 

Loans made to associated undertakings 

Disposal of asociated undertakings 

Purchase of busneses net of cash acquired 

Defened consideration paid 

Disposal of businesses 

Defened consderation received 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Management of liquid resources 

Financng: 

Ne\rr' loans 

Loans repaid 

element of finance leases 

 

lncrease

R€corrilbtion of group operatirE profit to .€t c6h inffo,\, frorn operating activities 

Gro+ operatirg gofit 

Deprecirlbn dtaqe 

Arnortisatlx durge: 

Music copyrighb 

G@drvill 

FD@d 6et wite (bacld dovm 

Atno.Jnb pro|/i(k 

Rwbiqs utilised: 

Dispcab and fundannntal reorganisatbm 

Ottter 

(lnqea6e) deo€6e in uo*irq capital: 

Stock 

Htols 

Cleditols 

Net 

---_---6 

t'bcr frn fm 

 

 

 

 

 

 

 

5.1 

os.0) 

7

Accounting Policies 

Basis of preparation 

The consolidaed finanoal statements are prepared under the 

historical cost convention and in accordance with applicable 

accounting standards. The resufs for the years ended 31 March 

2000 and 31 March 1999 represent continuing operations. 

The geographical segmen6 shq,'rn in llote t ha\€ been re/ised to 

reflect rnore accurately the way the business is currently managed. 

The prior-par comparatrves hale been restated to reflect this. 

Basis of consolidation 

The consolidated financial statements comprise the accounts of 

the Company and its subsidiaries. the resuls of all subsidiaries are 

taken from therr accoun6 made up to 31 March. The resuls of 

subsidiaries, joint ventures and asociated undertakings disposed 

of or acquired during the year are included up to, or from, the 

date that control pass6. 

Changes in accounting policies and presentation of 

financial information 

The Accounting Standards Board isued the {ollowing Financial 

Reporting Standard effectrve for the CompanyS year ended 31 

Mirch 2000: FPSIS - Tangible Fixd Asse6. lhis standard was 

ad@ted by the Group Wth effect from 1 April 1999 and has had 

no material impact on the accounB as transitional anangements 

have been adopted. Addibonally, a naau accounting policy for 

na,v media holdings, as detailed below, has been applied during 

the year. 

Foreign currencies 

Transaictions denominated in foreign currencies are recorded 

at the rates of exchange ruling at the date of the transaction. 

Monetary asse6 and liabilities denominated in foreign cunencies 

are retranslated into sterling either at year+nd rates or, where 

there are related forward foreign exchange contracb. at contact 

rates. The resuhing o(hange differences are dealt with in the 

determination of profrt for the financial year. 

On consolidation, a\erage exchange rates hale been used to 

translate the resulB of overseas subsidiaries, joint ventures and 

associated undertakings. The assets and liabilities of cwerseas 

subsidiaries and associated undertakings are translated into sterling 

at year+nd rates. 

Exchange differencs arising from the retranslation at year€nd 

exchange rates of: 

(i) the opening net investment in o/erseas subsdiaries, joint 

lenttjres anid associated undertakings and foreign currency 

bonor,rurngs in so far as they are matched by those overseas 

investments; and 

(ii) the resulb of o/erseas subsidiaries, Joint venturcs and 

associated undertakings, 

are dealt with in Group reserves. 

Tumover 

Turnover represents the invoiced value or contracted amount of 

gmds and services supplied by the Company and is subsdiaries. 

Turnoer excludes value added tax and similar sales-related taxes. 

Pension cosE 

Pension cosb, which are determined in xcordance with 

Statement of Standard Accountrng Practice 24 - Accounting 

for ftnsrbn CosB (SSAP 24), are charged to the profit and loss 

account so as to spread the cost of pensions over the woking 

li\es of the employees within the Group. Valuation surpluses or 

deficlts are amortised wer the expected remaining working life 

within the Group of the relevant emplqpes (6tjmated to be 8 years 

in respect of the UK). The amortisation of valuation surpluses 

is rcstricted to an amount equal to the regular pension cost. 

Accordingly, emplqpr expense in respect of the main scheme, 

which covers employees in the UK. has been taken as nilfor 

each of the two yeam ended 31 March 2000 for reasons of 

conservatism. 

Joint ventures and associated undertakings 

Where the Group has an in€stment in an entrty which is sufflcient 

to give the Group a participating interest, and over vvhich it is in 

a posrtion to exercise significant influence, the entity is treated as 

an associated undertaking and is rcounted for using the equity 

method. Entities in vvhich the Group holds an interest on a longterm 

basis and which are jointly controlled by the Group and one 

or more other parties under a contractual anangement, are 

treated as joint ventum and are accounted for using the gros 

equity method. 

fhe resutts of joint \€ntures and associated undertakings are taken 

from their accounts made up to 31 March or such earlier date (not 

prior to 31 December)which represents their financial period end 

as adjusted for.material items that have occuned in the 

rntervenrng penod. 

Goodwill and other intangibles 

Goodwill and recorded catalogue intangibles arising on 

acquisitions made after 31 March 1998 are opitalised and 

amortised c €r their expected useful life, principally restricted 

to 20 vea6, in accordance wth FRS10. They are revis/'/ed for 

rmpairhent at the end of the finl {ull iinancial year follorrurng 

acquietion and in other penods if orens or changes in 

ciromstances indicate that the carrying value may not be 

recoverable. 

Goodwill arising on acquisitions made before 31 March 1998 

has been charged directly against shareholders' funds in the year 

of acquisitron and is included within the profit and loss reserve, 

yet sebarately identffied within the reserves note. This goodwill will 

iemaiir in reirves until, on the disposl or closure of any business, 

the profn and loss account includes a charge in respect of the 

good\,,/ill prs/iously witten off against shareholders' funds on 

the acquisition of the business.

Music copyrighB 

Music copyrigh$ purchased prior to I April 1989 were witten 

off against shareholders' fun& on acquisition. Copynghts rquired 

as a resuh of acqusitiors on or after 1 April 1989 are capitalised 

as intangible assets in the Group balance sheet, and are arnortised 

by equal annual amounts o/er not morc than 20 yean, other than 

in exceptional circumstances when sufftcient ongoing impainr€nt 

tests can be perfonned to support a useful economk life of over 

20 years. Where a useful economic life of up to 20 years has been 

adopted, copyrights are revia,,ued for impairment at the end of the 

first full financial year follcM/ing acquisition and in other periods if 

sr'ents or changes in circumstances indicate that the carrying value 

may rot be recolerable. 

Advanc6 to artists 

Advances to artisb and repertcite oivners ale assessed and the 

valte of the unrecouped portion to be induded in debtors is 

determined ry the prospecb of futuc recoupment based on 

past sales performance, ornent popuhrity and pro.iected sales. 

Leased a$eb 

Assets held under finance leases arc induded a tangible fixed 

assets at their estimated purchase cost and depreciated cner their 

oeected useful lives, or c /er the primary lease period, whicharer 

is shortw. The obligations relating to finance leases (net of finance 

chargs allocated to future periods) are induded under bonorauings 

due within or after one year, as appropriate. Operating lease 

rentals are charged to the profit and loss account on a straightline 

bais orer the lease term. 

Depreciation of tangible fixed aseB 

Depreciation of tangible fixed assets is cakuhted on cost at rates 

estimated to wite off the cost less the 6timated residual value of 

the relEr'ant asseb ry equal annual amounts o€r their expected 

useful lives; effect is given, where necessary, to commercial and 

technical obEolescence. 

 

 

 

 

 

 

 

 

 

 

 

Stocks 

Stocks and wok in progress are statd at the lo^/er of cost 

and net realisable value, less progms payrnents on uncompleted 

contracts and prwisions for expected losss. Cost includes 

manufactunng o€*rea& wtere appropriate. 

Provisions 

FRS12 - Povigont Conttue/],t As5€B ard Cqtiryent Liabilitis, 

was adopted with effect frorn 1 April 1998. 

Ta€tion 

The Company ha undertaken to dirharge the liability to 

corporation tax of $e majority of is wholt o/vrEd UK 

subsidiaries. Their UK tax liabilities are therefore deatt with 

in the accounb of the Company. 

 

Deferred taxation is calculated using the liability method in respect 

of timing differences arising primarily from the difference between 

the accounting and tax ueatrnen$ of depreciation. Provision is 

made, or recoery antrcipated, vvhere timing differences are 

oeected to re€rse without redtrement in the foreseeable future. 

Financial instruments 

Any premium or disco.rnt associated with the purchase of intetest 

rate instruments is amortised oer the lffe of the transaction. 

lntercst receipts and paymens are accrued to match tl€ net 

income or cost with the related finance expene. No arnounB 

are recognised rn respect of future periods. 

New media holdings 

Holdings in nan media companies that arise as a consequence of 

licensing, distnbution and other simihr deals wrth such companies, 

are canied at cost, which is typicalh/ minimal. lncome from these 

holdings, net of cosB, is only recognised when recenred as cash 

and is treaed as other operating incorne. The cosb relating to 

frese investrnenB are held within debtors until being recognised 

with the relaed incorne.

Notes to the Financial Statements 

for the year ended 31 Nilarch 2000 

l. seqmental analyses 

 

 

 

 

 

 

 

2m0 

 

 

 

 

 

 

 

 

 

 

 

By clas of business: 


Music tublishing 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

and amortisation# 

Group operating prof it. 

 

 

 

 

By origin: 

United Kingdom 

Rest of Europe 

North America 

Asla 

Other 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Group 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By class of business: 

8y origin: 

t\,4usic PublEhing 

Ott€r (HlW Media Group pld 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating asseb

2. Analwis of profit and los account 

 

 

 

 

 

 

 

- normal 

 

 

 

 

 

 

 

 

 

 

Net operating expenses are anal\6d as: 

 

 

 

- normal 

 

 

- exceptional items and gmdwill 

amortrsation 

 

Other operating income pnncipally comprises the GroupS share of income from joint maketing arrangements, income from entering 

into manufacturing and distribution anangemen8, net patent income and income from nevr media inr,estments, including 

musicmaker.com f24.7m (1999: f nil). 

3. Operating profit 

operatrng profit is stated after charging: 

Amortistion of music copyrights 

Amorti-tion of goodwill 

Deprecration of tangible fixed asets 

Operating lease rentals: 

Property 

Plant, equipment and vehicles 

Research and development expenditure 

Year 2000 costs 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4. Fees to auditon 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Details of each Directors remuneration, compensation for loss of office, pension entitlemenb, long-term incentive scheme intemb and 

share options are included in the Remuneration Report on pages 30 to 36.

Notes to the Financial Statements (con nued) 

 

 

 

 

 

 

 

Bank balances 

Other 

 

 

Joint venture finance 

 

 

 

 

The Group holds various financial instrumens in order to nEnage intergt rate risk. Details of thoe financial instrumen8 held at the year 

end are given in Note '19. 

 

 

 

 

Taxation on pofit on ordinary activities: 

United Kingdom: 

Corporation tax 

Advance corporation tax vvntten back 

 

O€rseas taGtion - cunent year charge 

O€rseas taction - prior year adjustrnent 

Nened taxation: 

United Kingdom 

Oerseas - cunent year charge 

Overseas - prior year adjustment 

Associated underlakings' taxation: 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Overseas 

 

 

 

 

 

 

The charge for taxatron has been reduced by r-rtilisation of tax losses of f0.1m (1999: f0.1m). 

There is no unprovided defened taction aristng in the year.

(Losses) profib on businesses disposed of or temlnated. 

Profit on of fixed asset in€stment - GWR 

*0@s) piofib on busin€5s6 di?o*d o{ or temirEFd idude fnil (1999: fnil) of good,vil vvdsen bad in th€ y€f, 

 

 

 

 

 

 

 

 

The attributable ta)€tion charge relating to non{perating exceptional items is fnil (1999: f 1.5m).

l',lotes to the Financjal StatemenB (continued) 

 

 

Basic earnrngs per Ordinary Share is calolated as follovvs: 

Earnings 

 

Weighted a€r4e number of Ordinary Shaes in isue 

 

 

 

 

 

Eamings 

Adjusted weighted a!€rage number of Ordinary Shares 

 

 

Adjusted earnings 

WbQhted ar,rerage number of Ordinary Shares in isue 

 

 

Adjwted eaming 

Adjusted \ €ighted alerage number of frinary Shares 

 

 

 

 

 

 

 

Adjtrted eaming per Odinary Share cakuhtions are based on earnings before the impact of both operating and nonoperating 

exceptional items and amortiition of goodwill and musk mpyriqhs. ihey are indudeil a thev prwiile 

a b&er understjndinq 6 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Co6t at 31 March 1999 

Curency etrarulation 

Acquisition of hsinesses 

Additions 

 

 

 

 

 

 

 

 

 

 

 

 

Cost at 31 Mardr 1999 

CurEncy rcfandatbn 

 

 

 

 

Cunency retranslation

Group 

Cost at 31 March 1999 

Cunency retranslation 

Acquisition of businesses 


Reclassfication 

Additions 

 

Cunency retranslation 


charge for year 

Asset write-back 

Reclasification 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Group 

Ihe net book values shonin above include the follouuing: 

Long-term leasehold ProPertY 

Short-term leasehold ProPertY 

Finance lease assets 

Assets in the cou6e of construction 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company 

 

 

 

 

 

and transfers

Notes to the Financial Statements (continued) 

14. Fixed asset investment 

ln!€stmenb comprise: 

Subsidiary undertakings 

Joint venture (HMV Media Group pk) 

Associated undertakings 

Other fixed asset in\,estrn€n$ 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

lnvestments in 

 

 

transfers and other mc r'emen8 

 

Details of sgnfficant zubsidiary undertakings are set out in Note 34. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

taken to resen€s 

 

 

 

 

 

 

 

 

 

 

 

Theprwisionoff1.0mrepresenbtheeliminationoftheGroup!shareofunrealiseapro@ 

Company 

 

 

 

 

 

 

 

The Company holds inrestments at cost, less provisions for diminution in value,

Fixed 6seb 

Current assets 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 31 March 1999 

CunerKy retranslation 

Additions. and ns/l/ loans 

Net profits after tax 

DMdends 

and reclasifications 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*Total corsid€ralion on pudr* of asodrt d undertakirE6 conprir€. c61s ard lo€.8 tc{aling f9.6.n (1999: f0.9rn). 

 

 

 

 

 

 

 

 

 

The Company holds investments at cost, less prwisions for diminution in value. 

 

 

 

and redasifications


15. lnvestments: own shares 

The EMI Group General Employee Benefit Trust (EBT) was established to hedge the future obligations of the Group in respect of shares 

awarded under the Senior Executrve lncenti\€ Plan (SEIP), the EMI Music Long-Term lncentive Plan and other sharebased plans. The 

Trunee of the EBI ENy'l Group Trustees (Guernsey) Limrted, purchases the Companys Ordinary Shares in the open market with financing 

provided by the Company, as required, on the basis of regular revrs/l6 of the anticipated share liabilities of the Group. The EBT has, 

since December '1998, waved any entitlement to the receipt of dividends in respect of all of its holding of the CompanyS Ordinary 

Shares. The EBT3 waiver of dividends may be revoked or varied at any time. 

The cost of the shares expected to be awarded under each plan is amortised wenly over the period from the onginal grant of the 

particular award to the time of vesting. This is normally a period of not less than three years. 

Group and Company 

 

 

 

Amortisation in the 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Raw matenals and consumables 

Work rn progress 

 

 

 

 

Finished qoods 29.8 35 6 - 

rotal 39F - 

17. Debtors 

Due within one year: 

Trade debtors 

Amouns c'\ /ed by subsidiary undertakings 

Amounts owed by associated undertakings 

Amounts owed by joint venture (HMV Media Group plc) 

Corporate taxation recoverable 

Other debton 

and accrued income 

 

Corporate taxation recoverable 

Other debtors 

and accrued income

l8'Bot*in9t 

6fr; 

-*t 

20m r9e9 2m 1999 

Long-term bonorivings 

Loans 

Finance les 

within one 

 

 

 

 

 

Loans and cverdrafts 

Finance leases 

Short-term element of 

Liquid funds: 

lnvestments: liquid fun* 

Cash at bank and in hand and caslt 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term bonorvtngs include f62.6m (1999: f41.0m) of bonoivinE repayable within one year, which are drawings under long-term 

comhitted facilities and, therefore. have been clasified as such. 

Under their banking anangernenb, o€rdraft and cash balances of the Company and of certain subsidiaries are pooled or offset and 

oossguaranteed. Such pooling and offses are reflected in the Group balance sheet as appropriate. 

Group bonoruings indude f4.8m (1999: f5.7m) which is secured on asse8 held under finance leases. 

Maturity analvsis of lonq-term bonowinqs 

Arnouns falling due after more than one year are repayable as follow: 

Betlveen one and two years 

Between tvvo and fi\,€ years 

After five yean: 

By instalments 

Other


19. Derivatives and other financial instruments 

The Group has excluded all short-term debtos and creditom from the following disclosures, other than curency exposures. 

(i) lnterest rate risk profile of the financial liabilities of the Group 

Sterling# 

US dollar 

Yen 

Euro 

Swedish krona 

Danish krone 

Other 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wbighted aver.ge 

Weigtn€d av€(aqe period for whidr 

interest.ate rate k fixed 

% Yea6 

 

 

 

 

 

 

 

At 3l Mardl2m0 

Finaftial 

Fixed rate liabiliti€s on 

finarrial v'fikh no 

liabilitjE intergt is paid 

fm fm 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Werght€d a\€€ge 

Weiqhted a\€raqe p€rin forwhich 

intefed rate rate i5 i,€d 

% Yea6 

 

 

 

 

 

Floating rate financial liabilities comprise bank borowings and the proceeds of the US$500m issue of l Gyear Guaranteed Notes 

swapped to floating rate funding. Due to the strong performance of EMI Recorded Music in Japan and restrictions under the terms of 

the operating agreement with Toshiba (the minority partner), the Group has financial assets (excluding short-term debtors) which include 

f84.5m of bank deposits in Yen. The Group also has f54.5m o{ bank deposits in the UK arising from short-term timing differences 

spanning the year end, associated with operating cash requiremenb. The Group has no other individually material financial assets. All 

floating rate financial liabilities and assets bear or earn interest at rates fixed in advance by reference to the applicable bank reference 

rate in the relevant country for periods ranging from oruernight to sx months. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The figures shown in the tables above take into account various interest rate and cunency vuaps used to manage interest rate risk 

and the currency profile of financial liabilities. Further protection from interest rate movements is provided by interest rate caps and 

collars. See Note 19 (vii) for further details of interest rate caps, collars and swaps.

19. Derivatives and other financial instruments (continued) 

(ii) Currency exposures 

As explained on page 21 in the Financial Review, the Groupb objecti\es in managing currency exposures arising from its net investments 

oveEeas (ib structural currency exposures) are to maintain appropnate levels of bonor'vings by currency to hedge partially against currency 

depreciation. Gains and losses arising from these structural currency exposures are recognised in the statement of total recognised gains 

and loses. 

The table below sho\ /s the Groups cunency exposures, being those trading asseb and liabilities (or non-structural exposures) that give 

rise to the net curency gains and losses recognised in the profit and loss account. Such exposures comprise the monetary assets and 

monetary liabilities of the Group that are not denominated in the operating (or 'functional') cunency of the operating unit involved, 

other than certain nonsteding borrovvings treated as hedges of net investments in overseas operations. These exposures were as follorus: 

 

Functional ofiency of Grdrp operation 

Net for€ign orency monetary 6rets (liaLtlitie.) 

Yen Arm Oher 

Sterling 

US dollar 

Yen 

Euro 

Other 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

fl€t foEign o]n€ncy rno.Etary ass€E (Ebilitj€s) 

Yen Eub Othd 

fm fm fm 

 

 

 

 

 

 

 

 

 

(iii) Maturity of financial liabilities 

'lhe maturity profile of the Groups financial liabilities, other than short-term credrtors such as trade creditors and accruals, was as follo\ /s: 

 

 

 

 

In one year or less, or on demand 

In more than one year but not more than tvvo yea6 

ln more than two yea6 but not more than five yea6


 

 

 

 

 

 

 

conditions 

had been rnet at that date urere as follows: 

Expiring in one year or les 

 

Expiring in more than one year but not more than two years 

 

 

 

 

Fair values of financial asets and financial liabilities 

 

 

 

 

 

Primary financial instrumenb held or issued to finance the Group3 op€rations: 

Short{erm bonolvings and cunent porton of long-term bonorvings 

Longterm bonor/ings 

Liquid tun* 

Oher fi nancial liabilities 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

instrumenB held to manage the interest rate and currency profile: 

 

lnterest rate caps and collars 

Currencv lvaDs and forward 

 

 

 

 

Financial asseB: 

Financial assets - listed in!'estmen$ 

Financial asets - other 

'lraftet rdter ha€ been ured to detefiine fair !alu6. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term bono\,vinE i$ude q US$500m Guaranteed Notes issue (book value f311.0m) with a fair value of f321.8m. fhe majority 

of other bono\ /ings and liquid funds are short-tem in nature and book values approximate to fair values. The market value of list

19. Derivatives and other financial instruments 

(viD Financial instrumenb 

lnterest rate agreement 

To manage interest rate risk, the Group has enterd into certain interest rate cap, collar and swap agreen€nb, which 6 at 31 March 

2000 were a follovrrs: 

Teminalon capped 

 

 

dats 

rae 

lntercst rate collars: 

US dollar 

Euro 

 

 

 

 

 

 

 

 

 

lnteregt rate svvaps: 

Euro - pay fixed rate and receilfe floatng rate 

 

 

Yen - pay fixed rate and recet\e floating rate 

 

 

rate and receive fxed rate 

Exchange rate agreements 

To mana=qe exdraiqe rate risk on intra{rdp funding, the Goup has entered into certain cunency swap6 and forward foreign cunency 

 

 

 

 

 

 

Canadian dollar 

US dollar


20. Cash, liquid resources and financing 

lhe follouuing definitions have been used: 

fash: Cash in hand and deposits repayable on demand if available within 24 hours wthout penalty and rncluding overdrafE. 

Liquid resources: Investments and deposits, other than those included as cash, which are readily conlertible into linown amounts of cash. 

Financing: Bonowings les overdrafb which have been treated as cash. 

of movement in the in the vear ended 3'l March 2000 

 

Cash lloe 

 

fm 

 

 

 

 

 

Cash at bank and in hand 

 

 

 

 

 

Debt due within one year 

 

 


 

 

 

 

lnvestmenE: 

 

 

 

 

 

 

 

 

 

of movement in the 

 

 

 

 

 

 

 

Cash at bank and in hand 

Overdrafts 

 

Debt due within one year 


lnvestmen8: 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash floru on financing of f24.7m is split between new loans of f(628.4)m, loans repaid of f867.8m and capital elemeni of fin-arrce 

leases repaid of f 1.3m. 

lnvestments: liquid f unds 

Cash at bank and in hand and cash deposits 

Borrowings due within one year 

due after more than one 

 

 

 

 

 

14u'd 

fimnarg 

fm

21. Other creditors: amounb 

Trade credrtors 

Royalties and fees payable 

Amounts c ,rr'ed to subsidiary undertakings 

Amounts owed to associated undertakings 

Corporate talction 

Other tax6 including VAT and social secuflty costs 

DMdend payable 

Other creditors 

Accruals and defened income 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

due after more than one 

Amounb c^/ved to subsidiary undertakings 

Coeorate taxation 

Defened consideration payable 

Accruals and defened incorne 

 

 

 

 

 

 

 

 

 

 

23. Deferred taxation 

 

 

 

 

 

Excess of accumulated taxation allcMr'ances o\€r 

depreciation provided against tangible fixed assets 

 

 

 

Mcvemenb during the year: 


 

 

Currency retranslation 

 

 

 

 

 

No prwision has been made for further taxes which could arise if subsidiary or associated undertakings are disposed of or if overseas 

compani6 \ /ere to remit dividends to the UK in excess of those anticipated in these accounE; it is considered impracticable to estimate 

the amount of such taxes. 

The Company has undertaken to discharge the liability to corporation tax of the maprity of its wholly orvned UK subsidiaries; their 

defened tax liabilities are therefore dealt Wth in the accounts of the Company. 

There is no unprwided defeaed tax liability as at 31 March 2000.

24 Other fo\riidrs for liabilities and darg€s 

 

 

 

 

 

 

 

 

 

At 31 [radr 1999 

Cualency ret"arrhion 

Provi$r6 utili-d 

Chatged against: 

Operaing profit 

ExcQtbnal iEm6 

 

 

 

 

 

 

 

 

 

 

 

Ttre perEim ptovtiorE aise in oeisea onpar$es in espect of sbb dsr€s ad emplqBes o,ered ry fu Gtu.pg unfr.rnded sdefis. 

 

Trading pro\,isir6 indude oyalty axtt ard othe uading goislns daged throtAh operating pofit befote elaeptiond itefiE, ard 

rcsfiwhiirE and r€oqanisdbn poisions dtilged tuough operating ecptiond iFfits. 

Rovisions rxillsed rdating to re5uucturirE ard teqgadsation prttl/isiorE in the ch flofi indude f2.9rn Sera agairEt $e EMI Mt6k 

restwudng porisi:n set up in ffm. 

Rovi$ns utilised relating to cfi$Gab and ftndanEntal rcorganbatixr in the c6h flo,v indude f l.sm spent agair6t d*6d ptqii0r6 

set up in pr€r,i)s years.

25. Share capital and strare premium account 

Group and Company 

 

 

 

 

 

 

B Shares of 1 14.5p each 479.8 479.8 

Defened shares of 0 0005p each 

17.5 17.5 

656.1 656r ,0.4 r 10.2 

(i) Ordinary Shares in isue 

 

 

 

 


Sham isued during the year on the exercise of options: 

Executive Schemes 

 

 

 

 

 

 

Options to subrscribe for the CompanyS Ordinary Shares were outsanding as folloan (adjusted for the 1992 righb issue, the 

and the 1997 share capital reorqanisation, vvhere 

becniw StB€ Optidr sd'ernet 

1995 sclcfi)€ 

SavinggRelaEd 

sharc Ofiirn klrme 

l99t SdEn€ 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 2009

Notes to the Financral statemefts (contrnued) 

25.Share capital and share premium account (continued) 

(iii) Share premium account 

The principal elements that make up the Company3 share premium account qrose as follouis: 

GrouP and ComPanY 

yea'- anlne !m 

Conve6ions to ordinary Shares of 7% Convertible Redeemable Second 

Cumulative Preference Shares 1992/99 of f1 each 

A placing of Ordinary Shares linked to the offer for Thames Television 

lssue of Ordinary Shares on exercise of subscription rights of wanants originally 

attached to 77s% bonds due 1992; and 

the transfer from other reserves in respect of amounb paid for the warrants exercised 

lssue of Ordinary Shares on conversion of Convertible Unsecured Loan 

Stock to fund the acquisition of Virgin Music Group 

lssue of Ordinary Shares on conversion of 5%% Guaranteed Redeemable 

Preference Shares 2004 of THORN EMI capital NV 

Share capital reorqanisation (inc. isue of Redeemable Preference B Shares) 

otler_ isues of Ordinary Shares 

Balance at 31 March 2000 

 

 

 

 

 

 

 

 

 

 

 

At 3l t\4arch 1999 

Currency translation 

Goodwll adjustments: 

Joint venture 

subsidiary undertakings 

Profit attributable to members oi the 

Holding ComPany 

Equity dividend 

Minority interest adjustment 

Tran#er of realised reserves 

 

 

 

 

fm 

 

 

 

 

fm 

 

 

 

 

@respectofisshareofpost-acquisitionretainedlo5se5ofjointVentUresandassociatd 

undertakings. 

Other reserves of the Company relate to a special reserve which reflects the share premium account reduction of July 1988 and 

unrealised profits on disposl of investments. 

In accordance with the exemption permitted by 5230(3) of the Companies Act 1985, the profit,and los account of the Company 

is noi separately presented. fhe pr6fit attributable to shareholders, dealt with in the accounts of the Company, is f739.4m 

(1999: f 157.4m). 

The Group profit and loss reserve includes f 1,454.5m (1999. fl,4A.7m)in respect of goodwill previously wntten off 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Group 

 

 

Other

28. Financial commitmen8 

Group 

 

 

 

 

Capital expendhure: Contracted 

 

 

 

 

 

 

 

 

 

 

Land and buildings: 

Expiring in the first year 

Expiring in the second to fifth years indusive 

 

 

 

 

 

Expiring after the fifth }€ar 4.2 4.3 

Total 

 

 

Plant, equipment and vehicles: 

Expiring in the first year 

Expiring in the second to fifth years inclusive 

 

 

 

 

 

 

 

 

 

 

-


30. Pension arrangements 

is the EMI Group Pension Fund ('the Fund'). Staff engaged outside the UK are covered by local anangments whch, in the case of the 

Group xhemes, are largely of the defined contribution type. Ihe asseb of EMI GroupS pension schemes are held mainly in separate 

trustee-administercd f unds. 

'The Fund is based in the UK and is of the defined benefit type. lhe Fund is open to all permanent employees over the age of 18 

employed by the Company and certain subsidiaries in the UK. BenefiB provided by the Fund are-based on final pensionable pay. 

pensiohs payable from theFund are guaranteed to rncrease by 57o per annum, or by the cost of living ff less. Membe6 contribute 

to the Fund at th€ rate of 4olo of pensonable pay. 

the latest available actuarial valuation of the Fund was made by a qualffied actuary as at I April 1997 using the projected unttmethod. 

At that date, the market value of the assets of the Fund was taken to be f809.8m. The actuanal value of the asse$ was sufficient to 

couer 121% of the value of the benefils ttrat had accrued to the members, after allowing for asumed increases in earnings. Part of the 

surplus disclosed by the 1997 valuation was allocated towards a reduction of employer contributions Hc,vv the long-term rate. the 

balance being carried fon,uard as a reserve in the Fund. 

Emplqpr expense in respect of the Fund has been calculated in accordance with Statement of Standard Accountinq Practice 24 - 

aciot inting tor ftnsion Coss (SSnp Za). On the basis of actuarial advice, it is calculated that the emplqpr expense would represent. 

a oedit toihe profit and loss account on full application of SSAP 24 principles. Hou,ever, for reasons of conservatism, such expense has 

been taken as nil for the two years ended 3'l March 2000. The long-term fnancial assumptions used to calculate employer expense 

under SSAP 24 are shown belcuu: 

G.o\^/th €hi€ to nvestrEnt ,elum 

Rate of imrestment return 

Rate of pay increas€s 

Rate of pension increases 

Rate o{ dMdend go\^/th 

Theselates included allo,,uance for the effects of the tax credit changes introduced b/ the Finance (Nlo. 2) Act 1997 

8.0olo P.a. 

6.0% p.a. 

3.5o/o P.a. 

4.5o/o p.a. 

EmplqEr contributions of fl2.9m (1999: f l 1 .6m) were charged to the profit and loss account. These contributions pnmarily related 

io 6ueiiias schemes aM were determined in rcordance whh local practice. Other post retirement bene{it e\penses of f1 .1m 

(1999: fnil)uere also charged to the profit and los account.

31. Purchase of businesses 

Acquisitions during the year indude Windswept Pacific copyrights, Hit & Run Music Publishing, Pelago (an ftalian music publishing 

company), Ccalian (a US recorded music company), Be's Songs (a Eelgian music publishing company) and No6ke Gram (a Norwegian 

recorded music compalry), The com,bined fair value to the Group is as {ollo/vs: 

 

 

 

 

 

 

 

 

 

Earnout liabilities paid 

Provisions for future earnout liabilities 

Deferred consideration payable 

Net cash consideration 

 

 

__,Sgle4dlg6rderatigqrqllable eldllcqeaqsqlpre4qSls 

Cash consideration 

Net cash acquired 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash consideration 149.1 

The adjustments to book value of f 1tr.1m weE m-ach to bring the vatuaiion of ttre asses xquired in tine wittr tfre Croups 

accounting policies. 

 

 

 

Fair value to the Group (beiore cash acquired) 

Earnout provrsrom utilised or vwitten back 

Goodwill 

The qoodwill includes f 15.9m of capitalised goodwill and f(2.3)m relating to prior-yeaa' acquisrtions which has been witten back to 

reserves. Adjustments to goodwll written off to resenres arise on adjustments to estimates of future earnout liabilitre for prior-yea6' 

acquisitions. 

All acquisitions ha!,e been accounted for using the acquistion method. 

 

 

 

 

 

 

 

 

(2q.0) 

 

 

 

 

 

 

 

 

?? l-ricrwrcrl n{ hr rcina

Notes to the Financral Statemen6 (continued) 

?? Ralafa.l rrarlv tran

Joint venture 

in\€stment of the share 

venture6 at 31 March 2000 was as follovr: 

 

tcounuy of in(oeoralitn Tt€ UK rd Canada ale the Fnopal .oirnitie! of @er.litl 

At 31 March 2000, the Group and Company held a 42.55olo equity stake comprising: 4l .10,o/o of the _Ordinary 

Shar6; '1007o of the 

;B: i.i;;A Odil;ry itrirer 5nA none df thir 'q Preferred Ordinary Shares; 18.087o-of the Senior 'A Preference Shares; and 49.15o/o 

of the Junior Prefereirce Shares in HMV Media Group plc.

Five Year Summary 

Resutb 

Turnover: 

EMI Music 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other businesses 

operatiom 

 

 

Discontinued operations - 

OpeAiinqndii: -- 

EMI Music 

Other businesses 

- Gntinting operatidns ffi 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share gl assoclates operating_profrt 0.8 

Total operating profit before exce[fional - 

items and amortisation 

 

 

 

 

Operating exceptional iterm (4.0) 

_AprtiSqon of goodMll and m(-6k cogf'ghb (34.6) 

280.5 

Non{perating exceptional items: 

Fundamental reorganisations and restructuring 

Profits (losses) on businesses disposed of 

or terminated (9.9) 

ProfiB (losses) on disposal of fixed ass€ts

Operating assets 

Music copynghts 

Goodr/ill 

Property, plant, equipment and vehicles 

Rental equipment 

Fixed asset investments 

lnvestments: orun shares 

Stock and debto6, excluding taxation 

and interest 

Credrtors and prorsions, excluding taxatton, 

dMdends and interest payable 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net bonowings 

t'.let cash inflouu from operattng actMties 

Caphal expenditure: 

Fixed assets (continuing operations) 

Fixed assets (discontinued operations) 

Rental equipment 

I91iL !a!'ta!gP9!ttt!re _ 

Earnings per Ordinary Share: 

Basic 

Adjusted diluted 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

27 .3p 21 .9p 24.1p 

 

 

 

 

 

 

 

 

 

 

 

Dividend cover 

 

Several nsau accounting siandads have been adopted Wth effect from 1 Apnl 1998 (FRS 9 to FRS14) and, where appropriate, 

comparatN€ r6ulb hale been rstated to reflect the resuhing changes in accounting policies and presentation of information. 

Signfficant changes were made to the financing structure of the Group as part of the demerger, making the Group resutts difficuh to 

compare year on year as resulB ior the Thorn business are included for the full year in 1996, up to demerger in 1997, but o(cluded p6t 

demerger. Cornparatire results for EMI & HMV excluding the Thorn busines are given for 1996 and 1997. 

Folloruing the disposal of HMV on 28 March 1998, in accordance with FR53 discontinued operations includes HMV Thorn is included 

as discontinued operations - demerged business. 

The share capital reorgnnisatron tmk place on 21 July 1997 and eamings per share and dividends per share for the years ended 31 

March 1996 and 1997 ha,e been restated to reflect the preliminary reorganietion elements to enable meaningful comparisons 

to be made.

lnvestor lnformation 

 

 

 

 

 

outside the UK). 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Llqlds TSB Registrars 

Qu6tions about shareholdinE, o changes of address or any 

other particulars, strould be sent to: tloj.rt I58 Rqgistars flearn 

l8), Ilr€ Atsny, V1i.uttirg, V1/st Su*t< Bl\t99 6DA UK. A 

helpline, available a local call rates in the UK only, operates during 

normal office houa on 0gl5 7125921 (+44 1g)3 833112 frcm 

Uoyds TSB Registran also ha!€ a v\eb6ite at: 

www:sharaniqttco.uk from which information can be obtained 

on how to regrster a change of nanc and what to do if a strae 

 

certificate is lost. Therc are also facilities to doivnload change of 

 

address, dMdend mandate and stock transfer forms. 

 

 

Services available to shareholders, whether they are holders of 

 

 

Ordinary Shares or Amencan Depositary Receipts, are summarised 

in a leaflet obtainable from the Company Secretary at the address 

shorvn h r'fialts under Gereral enquiris. 

 

 

 

 

Low

American Depositary Receipts (ADRs) 

The Company's ADRs trade on the O/er-thecounter rnarke! with 

one American DeposRary Share (ADS) equalling two EMI Group 

plc Ordinary Sham. Morgan Guaranty Trust Company of Near 

York is the Depositary for the Company's ADSS. Enquiries should 

Box A206, Boston, MA022U-2N6, b4* Tel: 1300 428 4237 

(toll fre in tJ}e USA) or 1 -781 575 4328. 

WebiE: hwwvw.adrcorn 

UK capital gains tax information 

For the purposes of UK capital gains tax, the market value of the 

Ordinary Shares of EMI Group plc (then knorvn as THORN EMI plc) 

held on 31 March 1982, as adjusted for subsequent capitalisation 

issuel was 4O8.1 5p per share. 

Environmental Report 

the full r,ersion of the GroupS 2000 Environmental Report will 

be available on the EMI web6ite at the addres sho,vn belorv. For 

further lnformation on this topic, please write to the Corporate 

Communications DepartfiEnt at the address shcwn under 

Genenlequiriesfulw* 

General enquiries 

General enquiries may be addresed to the Company's Corporate 

Communications Department at: 

EMI Group dc, 4 lentenden Street Hanover &uare, 

Ldltu1WlA 2AY UK Tel: 020 7355 4&A. 

W&site: hW : ilvwltul.emiyanp.can 

For UK capital gains tnx purposes, the base cost of EMI Goup plc 

Ordinary Shares acquired prior to the demerger of 19 August 1995 

will need to be apportioned between EMI Group plc Ordinary 

Shares of 25p each and Thorn plc Ordinary Shares of 25p each in 

the proportion 78.8 per cent to 21 .2 per cent. 

The base con of EMI Group plc ordinary Shares of 25p each 

acquired or held prior to the share capital reorganisation of 

21 July 1997 will then need to be apportioned between the neuv 

Ordinary Shares of 14p each and the former B Shares of 1 14.5p 

eadr in the proportion 89.4 per cent to 10.6 per cent. 

Analysis of Ordinary Shareholdings at 18 May 20fl)

New Media Deals Summary 

Arnounced deals as at 22 May 2000 

lnterneudot.com sites 

1. Musicmaker.com - A limited, exclugve licence agreement 

wth musacmaker for custom compilation CDs. Custome6 

accessing the musicmaker.com website can select tracks {rom 

different artisE and create their c rr'n custom compilations, which 

are manufactured in CD format and shipped to the customer 

As previously announced, EMI holds an equity interest in 

musicmaker.com. 

2. Sanity.com. - A limited, exclusrve strategic agreement 

with sanity in connection with Sanitys online music business. 

Sanity.com, the ercmmerce operation of Sanity N/usic, Australias 

largest music retailei will use its brand to build an ecommerce 

internet site and establish sanitycom as a free lnternet Service 

Provider (lSP). As previously announced, EMI holds an equity 

interest in Sanity. 

3. Listen.com - An in€stment in Listen.com. Listen.com is 

the internets comprehensi!'e directory of dor,unloadable music. 

Listen.coms internet music download directory helps users find 

music on the net that has been digitised through various 

technologies including Liquid Audio. 

4. Radiowave.com - A non€xclusive agreement with 

Radiowave.com to produce branded, internet{nly, radio 

channels. RadioWave.com creates customised interactive radio 

channels that provide a stream of music. artin biographies and 

discographies. The branded channels contain links through 

whah an online consumer can purchase CD' Blue Note Radio 

has already been created by Radiowave and EM|S jaz label, 

Blue I'lote Records. As prer ously announced, EMI holds an equity 

interest in Radiowave. 

5. LAUNCH Media - A non-exclusive agreement with LAUNCH 

to stream promotional music videos from the launch.com web6ite. 

LAUNCH is an internet music portal wth over 2 million registered 

members. The videos are free and available on demand to 

IAUNCHS users. As previously announced, EMI holds an equity 

interest in LAUNCH. 

6. Entertainment Boulevard^/idnet - A non-exclusive 

agreement wlth Entertainment BoulEr'ard (also kno,,un as Vidnet) 

to stream promotional music vifus from the vidnet,com web'site. 

Vidnet is an internet music portal. The videos are free and available 

on demand to Vidnets users. As previously announced, EMI holds 

an equity interest in Vrdnet. 

7. DiscoverMusic.com - A non€xclusive agreement with 

DiscoverMusic.com to stream 30-second samples (6Gsecond in 

the case of instrumentallaz and classical samples) of EMI artins' 

music to music retailers through the internet. As previously 

announced, EMI holds an equrty interest in DiscoverMusic. 

8. Net4Music.com - A non€xclusive arrangement puEuant 

to \ /hich EMI supplies advrce to Net4Music in connection wth 

Net4Musicb online musc business, and permits Net4Music 

to digitis€ and distribute electronic sheet music embodying 

compositions from EMI Music Publishings catalogue. 

2. Microsoft - A nonexclusive agreement wth Microsoft under 

which Microsoft has given EMI credits to encode up to 5,000 

music videos in Wrndows Media format. Encoded videos will 

reside on EM|S primary websites and will be made available 

by EMI to its licensees. 

3. Preview Systems - A non-exclusive strategic agreement with 

Preview, under which EMI will endone Previq,v as its preferred 

technology provider for the secure electronic delrvery of music. 

heview Systemg technology enables secure containerisatjon and 

distribution of digital files and integration of etransactions into 

retail environments. As previously announced, EMI holds an equity 

interest in Preview 

4. SuperTracks - A non-€xclusive strategic agreement with 

SuperTrack under which EMI will endoEe SuperTracK as its 

preferred provider of solutions for the secure digital distribution 

oi music (DDM). SuperTracks was the frrst licensee of Preview5 

Ziplock DDM technology for secure digital delvery and transaction 

handling of music. As previously announced, EMI holds an equity 

intercst in SuperTrack. 

Other new media 

1. IMC Promotion - An agreement with Urocket and SuperTraclc 

for a joint limited do,,/nload promotion an support of NECS Home 

Music Studio rc and SuperTracks' lnternet Music Card (lMC). 

Virgin Records has made available selected recordings for secure 

digital download over the internet. Consume6 are able to use 

the IMC to purchae and do\r/nload these recordings. 

2. BT Cellnet - An exclueve deal betvveen EMI and BT Cellnets 

Genie lnternet Partne6 to deliver the latest nerl6 from the wodd 

of pop music drrect to the UKS 20 million mobile phone users. 

Customers can access the Genie lnternet portal where they will be 

able to get exclusive ns/6 headlines on EMI artists delivered direct 

to their rnobile phone from the internet via free SMS text 

messages. 

3. On-Line Entertainment Network (OEN) - A non€xclusi\e 

strategic agreement with OEN to promote OEN! ondemand. 

pay-to-use online programming seMces. As previously announced, 

EMI holds an equity interest in OEN and in the parent company 

to OEN, GlobalNet S)6tems, Ltd. 

4. Digital On-Demand (DOD) - A non-exclusve agreement 

with DOD to manufacture and sell albums through DOD3 in-store 

kio6ks. DOD distributes digital content over high-speed proprietary 

net\ ork through iB interactive kiosk. vvhich are located at retail 

locations. lnteractive previsr/ stations alloir/ customeB to find, 

previs/u and select albums to purchase. Once selected, the content 

is burned onsite to a CD. the original packaging including corer 

art and album notes is also produced onsite at a high quality level. 

DOD recently merged with Alliance Entenainment Corp. As 

previously announced, EMI holds an equity inter6t in the postmerger 

entity. 

Encryption and other secure technology 

1. Liquid Audio - A non€xdusive agreement wth Lrquid Audio 

to create digitally encoded copies of EMI audio product for digatal 

delivery Liquid Audio is a provider of internet services and 

software for the secure delivery of digital content. As previously 

announced. EMI holds an equity interest in Liquid Audio.

Accounting Policies 44-45 

Acquisitons and disposals 42,67 

Advances to anists 45 

American Depositary Receipts (ADRS) 73 

Annual General Meeting 29,72 

Assets 

current 

fixed 

leased 

operating 

Associated undertakings 

Exceptional items 

Share capital 

Executive Committee 

and share premrum account 40.63-64 

Exe€utlve Directo6' 

Share dealing service 

 

annual bonus 

Shareholders 

base salary and benefits 

service contracts 

 

 

funds 

substantial 

 

 

 

 

long-term incentjves 

remuneration 

Shareholdings. analysis of 

Social Responsibility 

 

 

renricted shares 

Statement of Total 

retirement benefiB and 

Recognised Gains and Losses 

contributions 

Stocks 

 

share options 

Subsidiary undertakings 

 

Financial 

Supplier payment policy 

 

calendar 

Taxation 

 

commitments 

capital gains tax information 

inf ormation, presentation of 

deferred 

 

 

Treasury management 

 

 

Turnbull Report 

 

 

Turnover 

 

 

Warner EMI N.4usic 

 

 

Year 2000 

 

 

 

 

lnternal control 

lndividual Savings Accoun6 (SAs) 

 

 

 

Audit 

basis of opinion 

committee 

Auditors 

fees to 

Report 

Balance Sheets 

Board 

committees 

of Directors 

Borrowings 

 

Busines Reviews 


 


 

Capital 

lnvestments 

 

expenditure and financial 

fixed asset 

 

investment 

own shares 

 

and reserves 

significant 

 

Cash 

lnvestor 

 

 

 

 

 

 

 

 

 

 

 

Employee Benefit Trust (EBT) 

Employees 

Employment policies 

EMU programme 

Environmental Report 

Equity 

dividends paid 

shareholders' funds 

 

Reserves 

Results announcement 

Segmental analyses 

Senior Executive lncentive Plan 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

and employees' costs 

 

interests 

 

remuneration 

 

Report 

 

responsibilities 

 

share options 

 

see a/so Executive Directors; 

 

Non-executive Directo6 

 

 

 

 

 

 

 

 

 

Remuneration 

Committee 

Report

Desrgn 

SEA 

Pnnt 

Litho{ech 

Drgltal Photoqraphy 

John Ross 

Board Photography 

Marcus Lyon @ The Glassworks 

Printed on 

Pages I -24: Parilux Silk 170gsm 

Manufactured with 100% chlorinefree 

pulp. biodegradable and recyclable. 

The pulp is sourced from mills operating 

a strict reforestation programme. 

Pages 25 -76: Colorplan 135gsm 

Fully recyclable stock made using 

elemental chlorine-free pulps f rom 

managed forests operating a strict 

reforestation programme.

7/ii r,r,tr grorry

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