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EMI Group PLC (EMI)

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Tuesday 23 May, 2006

EMI Group PLC

Final Results


23 May 2006

EMI GROUP PLC PRELIMINARY RESULTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2006

EMI Group reports strong growth in full year profits, with EMI Music and EMI
Music Publishing both outperforming the global recorded music industry

  * Strong performance, delivering improvement across key financial measures
    including a 12.9% increase in underlying profit before tax (PBT)
   
  * Group revenues increased by 3.9% on a reported basis and by 2.1% at
    constant currency, with both EMI Music and EMI Music Publishing
    outperforming the global recorded music industry
   
  * Creative excellence across both divisions with releases from
   
  * Coldplay, Dem Franchize Boyz, Gorillaz, Korn, Raphael, RBD, KT Tunstall,
    Keith Urban, Robbie Williams in EMI Music
   
  * Arctic Monkeys, Black Eyed Peas, James Blunt, Kelly Clarkson, Daddy Yankee,
    Dem Franchize Boyz, Eminem, Gorillaz, Kanye West in EMI Music Publishing
   
  * Group digital sales increased to £112.1m from £46.9m. Momentum remained
    strong during the fourth quarter, with group digital sales more than
    doubling to £41.2m
   
  * Group operating margin increased by almost a full percentage point to 12.0%
    from 11.2%. This improvement was driven by higher revenues, a greater
    proportion of revenues from digital, and the delivery of previously
    announced cost savings
   
  * Underlying profit before tax increased by 12.9% to £159.3m from £141.1m
   
  * Underlying diluted earnings per share increased by 19.8% to 15.7p from
    13.1p
   
  * The full year dividend is maintained at 8.0p per share
   
Financial Summary

                                      Year Ended     Year Ended     Change     
                                                                               
                                      31 March 2006  31 March 2005             
                                                                               
                                      £m             £m                        
                                                                               
Total Group revenue                   2,079.9        2,001.2        3.9%       
                                                                               
Total EBITDA(i)                       275.8          250.2          10.2%      
                                                                               
Total Group profit from operations    250.5          225.1          11.3%      
(EBITA)(ii)                                                                    
                                                                               
Underlying PBT(iii)                   159.3          141.1          12.9%      
                                                                               
Total Profit before taxation          118.1          98.8           19.5%      
                                                                               
Underlying diluted earnings per share 15.7p          13.1p          19.8%      
(iv)                                                                           
                                                                               
Basic earnings per share              10.9p          9.6p           13.5%      
                                                                               
Dividend per share                    8.0p           8.0p           -          
                                                                               
Return on sales(v)                    12.0%          11.2%          -          
                                                                               
Interest cover(vi)                    3.0x           2.9x           -          

(i)    EBITDA is Group profit from operations before depreciation, operating   
       exceptional items and amortisation.                                     
                                                                               
(ii)   Group profit from operations (EBITA) is before operating exceptional    
       items and amortisation.                                                 
                                                                               
(iii)  Underlying PBT is before exceptional items and amortisation.            
                                                                               
(iv)   Underlying diluted earnings per share is before exceptional items and   
       amortisation.                                                           
                                                                               
(v)    Return on sales is defined as Group profit from operations before       
       operating exceptional items and amortisation, as a percentage of Group  
       revenue.                                                                
                                                                               
(vi)   Interest cover is defined as the number of times EBITDA is greater than 
       Group underlying net finance charges.                                   

Exceptional items include operating exceptional items and financial exceptional
items. Operating exceptional items include impairment of goodwill and
intangible assets, gains (losses) on disposal of property, plant and equipment
and re-measurement of listed investments. Finance exceptional items include
re-measurement of financial assets and liabilities to be included within
finance charges and exceptional refinancing costs.

Eric Nicoli, Chairman of EMI Group, said, "EMI Group has delivered an excellent
performance across all areas for the financial year ended 31 March.

"EMI Music has significantly outperformed the industry, gaining market share in
almost all territories including the US. This strong performance demonstrates
creative excellence across the spectrum of our artist roster with success from
major global superstars such as Coldplay, Gorillaz, Keith Urban and Robbie
Williams, as well as strong performances from new and developing artists such
as Dem Franchize Boyz, Radja, Corinne Bailey Rae, Raphael, RBD and KT Tunstall.
EMI Music is benefiting from its global reach as it maximises revenue
opportunities on both a local and worldwide basis.

"EMI Music Publishing had another very strong year, reporting growth in both
revenues and profits. This performance reflects a continuation of the
division's successful and proven strategy of signing and investing in the best
songwriting talent in the industry and maximising all potential revenue
opportunities.

"Digital revenues continue to grow at a very rapid pace in both divisions as we
aggressively pursue new digital uses and demand for our exclusive music
content. In 2005, Coldplay's latest album release, X&Y, was not only the
industry's biggest selling album globally but also the largest selling digital
album release in the US.

"Looking to the current financial year, EMI is in a very strong position to
capitalise on the market's evolution led by the growing demand for digital
music. We have exciting release schedules planned for both divisions with new
music expected from a diverse range of artists. From EMI Music we expect
releases from Tiziano Ferro, Janet Jackson, Norah Jones, Joss Stone, The
Beatles, KT Tunstall, Keith Urban, Hikaru Utada and Robbie Williams amongst
others. From EMI Music Publishing we expect to benefit from a range of
releases, including those from Audioslave, Diddy, Embrace, Goo Goo Dolls,
Jewel, Pharrell Williams, Scissor Sisters and The Zutons. Moreover, our
recently announced restructuring plans are aimed at further optimising our
business structures and ensuring that we remain flexible and innovative, best
positioning us for the many opportunities that lie ahead.''

Enquiries

EMI Group plc

Amanda Conroy         Corporate Communications    +44 20 7795 7529           
                                                                             
Claudia Palmer        Investor Relations          +44 20 7795 7635           
                                                                             
Susie Bell            Investor Relations          +44 20 7795 7971           
                                                                             
Sonia Shah            Investor Relations          +44 20 7795 7625           

Brunswick Group LLP

Patrick Handley                                    +44 20 7404 5959            

A live webcast of EMI's presentation to investors and analysts will take place
at 9.30 am (UK time) today, 23 May, and can be accessed via the Company's web
site, www.emigroup.com. An archive will be available for viewing shortly
thereafter.

Interviews with Eric Nicoli, Chairman EMI Group, Martin Stewart, Group Chief
Financial Officer, Alain Levy, Chairman & CEO EMI Music and Roger Faxon,
President & co-CEO EMI Music Publishing in video, audio and text are available
on www.emigroup.com and www.cantos.com.

EMI Group performance review

Recorded music industry

Our two divisions continue to operate in a marketplace that is undergoing
significant change, primarily driven by the rapid development of digital music.
The industry's digital sales more than doubled in value over the year, with
both mobile and fixed line platforms enjoying rapid growth. This strong digital
growth significantly mitigated the 5.3% decline in physical sales, resulting in
an overall industry decline of 0.9% for the period.

The digital environment is proving to be extremely dynamic with new entrants,
new services and new devices and functionality appearing all the time.
Globally, according to IFPI statistics for 2005, there were 335 legal digital
music services, up from 50 just two years previously. In this past year alone,
we have seen the first legal peer to peer agreement signed, iTunes expand to
over 20 countries, the launch of portable subscription services, such as
Napster To Go and Yahoo Music Unlimited, and the introduction of a la carte
music video services. Consumers are now able to access up to 2m tracks and
165,000 albums in a legitimate digital environment.

The industry has also continued to make progress in combating both physical and
digital piracy. Notable legal victories against illegal peer to peer sites
Grokster (US), KaZaa (Australia), Kuro (Taiwan) and Soribada (South Korea) have
improved the business landscape for legitimate music sales.

EMI Music

EMI Music's strong performance for the year demonstrates both its creative
excellence as well as its position at the forefront of the rapidly evolving
digital landscape. The division's revenues increased by 1.9% at constant
currency, significantly outperforming the global recorded music industry.
Within this EMI Music's digital revenues grew to £92.4m, increasing by 169% at
constant currency.

Operating profit (EBITA) grew by 15.6% to £145.1m, resulting in a substantial
improvement in the operating margin to 8.7%. This improved profitability was
driven by the flow through of profits from the growth in revenues, an increased
proportion of revenues from digital sales and delivery of the remaining £15m of
cost savings announced in March 2004.

EMI Music's distinctive approach to the development of its roster focuses on
making consistent investments in artists with long-term career potential and is
designed to maximise both local and global sales. This has shown clear results
in the year, with the division's sales coming from a broad range of artists
including releases from established superstars Coldplay, Gorillaz, the Rolling
Stones, Keith Urban and Robbie Williams, breaking acts Corinne Bailey Rae, Dem
Franchize Boyz and KT Tunstall, and local artists RBD (EMI Mexico), Radja (EMI
Indonesia) and Raphael (EMI France).

EMI Music is focused on creating the most attractive music content for
consumers and making it available where they want it, when they want it and in
the format they want it. In this way, we aim to maximise demand for our
artists' works and, importantly, our financial return. The creation of new
products, formats, distribution channels and partnerships is now a routine part
of our business and our energies are focussed on harnessing these new
possibilities to capture all available revenue streams. Over the year we
secured over 220 new partnerships, further strengthening our digital footprint
across both online and mobile platforms, bringing our total digital
partnerships to almost 400 and making our music now available in 56 countries.
EMI Music has reached pioneering digital deals around the world, for example,
in Europe with GNAB for peer to peer services, in China with Sohu for digital
music and in the US with Sprint for over the air mobile downloads.

In addition to establishing the right relationships on the right terms, we are
at the forefront of the industry in exploiting the new product, format and
windowing possibilities that digital enables. For example, our innovative
approach to content bundling and windowing meant that Coldplay's X&Y was the
first-ever album available on iTunes as a pre-order and US downloads included
video interviews, a digital booklet and two bonus tracks. In fact, X&Y went on
to become the best-selling full digital album download on iTunes, as well as
the highest-selling album, worldwide, in 2005. This initiative gives just a
flavour of the way that EMI Music is actively exploiting the new opportunities
that digital brings.

EMI Music geographic review

North America

During the year, the North American market declined by 1.5%, with strong growth
in digital sales substantially offsetting declines in physical sales.

Against this backdrop, our North American business showed strong sales growth,
gaining significant market share. Releases from Keith Urban, Dierks Bentley,
Trace Adkins, and Korn, in combination with the effective marketing and
promotion of international releases from Coldplay, Gorillaz and the Rolling
Stones, drove this performance. Virgin's Dem Franchize Boyz was established as
one of the most exciting new urban bands in the US, with the release of their
debut album On Top of Our Game. So far, sales of ring tunes of tracks from this
album have topped 2m, fuelling purchases of the album itself which has been
certified as a gold release in the US.

EMI Music's digital sales in North America almost tripled over the year. Our
revenues from mobile products grew at the fastest rate, increasing by a factor
of over 9 times, as the likes of Verizon and Sprint launched new mobile music
services. Online downloads continued to represent the largest digital segment,
accounting for almost 70% of our digital sales in the region. The proliferation
of new digital products and services continues at a fast pace with, for
example, iTunes introducing online music video downloads during the year. EMI
Music has consistently been an innovator of new products and services, most
recently becoming the first major music company to trial advertiser-funded
music video content for consumers' mobiles.

We continue to focus on further strengthening our US business and during the
year appointed Jason Flom as Chairman and CEO of Virgin Records. Jason has 26
years of experience in the music industry and, as founder of Lava Records, he
discovered, signed and developed multi platinum selling artists such as Kid
Rock, matchbox twenty and The Corrs. With his exceptional A&R and business
leadership skills, we believe that Jason is well placed to improve further upon
Virgin's performance to date.

UK & Ireland

In the UK market, physical sales declined by an estimated 4.9%, with digital
sales increasing by 170% to give a total industry decline of 3.0% over the
financial year. Weakness in compilation sales, particularly over the key
Christmas period, accounted for the decline in industry sales.

The strength and depth of our UK artist roster was again demonstrated this
year, with our business delivering an increase in revenues and gaining
significant market share in the UK and Ireland. New album releases from
international superstars delivered strong performances. Coldplay's X&Y sold
almost 10m units across both physical and digital formats and was the
biggest-selling album across the global industry in 2005. Albums from Gorillaz
and Robbie Williams sold in excess of 5m units each worldwide. A number of new
UK artists also broke through to success during the year, including KT
Tunstall, Corinne Bailey Rae and The Magic Numbers. KT Tunstall's debut album
Eye to the Telescope met with critical and commercial success, earning her the
title of `Best British Female Solo Artist' at the industry's Brit Awards and
selling 2.6m units during the financial year alone. Corinne Bailey Rae's
self-titled debut album was released in February and entered the UK album chart
at number 1.

Our digital sales in the UK grew by 170% over the year with fixed-line
downloads tripling over the period. In exploring the new opportunities which
digital delivery brings for capturing new revenue streams, EMI Music announced
a unique 18-month partnership between T-Mobile and Robbie Williams. T-Mobile
was able to offer their consumers exclusive content as well as making certain
content available to them earlier than its general release. For EMI, the
partnership proved to be an effective and innovative platform from which to
launch the album.

Continental Europe

Market conditions in Continental Europe were mixed over the year, with total
industry sales declining by 3.7%. Trends varied across the region, with France,
Spain and Italy showing an improving environment versus the prior year. Germany
remained a challenging market. The industry's digital sales virtually tripled
in value over the year.

EMI Music had another highly successful year, gaining significant market share
across the region with particularly strong performances from EMI Music France,
Spain and Germany. These share gains came from a broad range of established and
new artists including Raphael, Souchon, Diam's, Camille, Wir Sind Helden, Bebe
and Amaral, in combination with effective marketing and promotion of our
international repertoire.

We have seen enormous growth in our digital revenues in Continental Europe
during the year, with sales increasing by 245%. Mobile revenues represent a
larger portion of digital sales in Continental Europe compared to the US and
the UK but fixed-line sales still account for the majority of digital sales in
Europe. We are at the forefront of digital development in the region and
continue to be innovative in the digital products, formats and services that we
create. For example, for the launch of Placebo's album Meds, we partnered with
SFR to offer consumers a series of `mobisodes' along with standard product
offerings such as ring tunes and over the air tracks. The mobisode was
specifically designed for use on a mobile and the content was targeted to the
profile of a Placebo fan. The campaign generated huge interest and Meds entered
the French album chart at number 1. The album has sold almost 1m units
worldwide since its March release.

Japan

The Japanese market recovered during the financial year and, taking physical
and digital together, grew by an estimated 6%.

While we saw success from artists such as Tokyo Jihen, Noriyuki Makihara,
Tomoyasu Hotei, Coldplay and the Rolling Stones, our Japanese business lost
market share in the year reflecting a lack of local releases. In April 2006, we
announced a major restructuring of this business to improve the efficiency of
our operations, to reinvest a proportion of these savings in the key areas of A
&R and marketing, and to introduce a new multi-label organisational structure.
We believe that these initiatives will create a company which is better
positioned to increase revenues and profits in the coming years. In conjunction
with this restructuring, we recently announced our plans to enter into a sale
and leaseback of our two Tokyo freehold properties, with a substantial cash
inflow expected from the transaction. We sold our former manufacturing plant in
Japan to a consortium led by Memory-Tech Corporation on 26 December 2005.

EMI's digital sales showed strong growth, rising by 130%. Mobile products
continue to be the most popular platform in Japan and have again shown robust
growth, almost doubling in value. August's launch of iTunes has helped to fuel
growth in the online sector and we have been extremely active in promoting our
content on this platform, with our online digital sales increasing by a factor
of over six times during the year.

South East Asia

The major markets in South East Asia experienced a significant decline in
physical sales as physical and digital piracy continued to take their toll.
Rapid digital revenue growth across the industry partly mitigated this impact,
to bring the overall market decline to 3.7%.

Despite major releases from Indonesia's Radja, whose album Langkah Baru sold
over 1m units in the financial year, as well as releases from S.H.E., Ada Band
and The Flowers, EMI Music lost market share across the region. We saw strong
growth in digital revenues across all platforms, with mobile comprising the
largest portion of our digital sales.

Australasia

Market conditions in Australasia worsened towards the end of the financial
year, with an overall industry decline of 6%. EMI Music gained market share
versus the prior period, driven by releases from local superstar Missy Higgins
as well as international releases from Coldplay, Korn and Ben Harper.

Latin America

The industry's sales in Latin America enjoyed good growth, rising by 6.1% over
the year. Argentina and Colombia saw the strongest growth rates across the
region.

Our Latin American business had a very strong year, showing robust revenue and
profit growth. EMI gained market share in every Latin American territory, with
the largest out-performance in Brazil. Local superstars RBD had a terrific
year, with total sales of over 3m units across four album releases. Releases
from local artists Marissa Monte, Quintanilla III, Intocable and Thalia, as
well as releases from international artists Coldplay and Robbie Williams, drove
sales in the region. In July 2005, we announced a major new joint venture with
Grupo Televisa S.A., the largest media company in the Spanish-speaking world,
to develop and exploit new Latin music both in Latin America and the US.

EMI Classics

EMI Classics had a strong year and grew its global share with particular
successes in Continental Europe and Japan. Notable achievements were the
success in Japan and many other countries of Best Classics 100, and the release
of Mozart's 100 which reached a number 5 position in the French pop chart. Such
recordings illustrate the considerable value of EMI's extensive classical
catalogue.

One of EMI Classics most important releases during the year was the critically
acclaimed studio recording of Wagner's Tristan and Isolde with Placido Domingo
and Nina Stemme, the distinguished Swedish soprano who has recently signed to
the label.

Virgin Classics also had a good year producing some excellent new recordings,
particularly with the world renowned coloratura soprano, Nathalie Dessay, and
the young Mexican tenor, Rolando Villazon.

Note: All industry and share data are EMI internal estimates based on official
data received from the global recording industry association, the IFPI. EMI
measures its revenues for market share purposes following the guidelines used
by the IFPI to ensure comparability with the market data.

EMI Music Publishing

EMI Music Publishing delivered another strong performance for the financial
year ended 31 March 2006. Reported revenues were £419.6m, an increase of 2.6%
at constant currency. This reflects strength across the business, with almost
all regions and revenue types delivering underlying revenue growth. Of
particular note, mechanical revenues grew by 3.2% at constant currency, the
first growth in this revenue type for four years. Operating profit increased by
£5.8m to £105.4m with operating margin improving to 25.1%. These results
reflect a continuation of EMI Music Publishing's successful and proven strategy
of signing the best songwriting talent in the industry and maximising all
potential revenue opportunities, both existing and new.

A broad range of songs, songwriters and products underpinned this performance,
reflecting the quality and depth of the catalogue and the innovative ways in
which we are monetising it. Notable successes during the period included songs
by Arctic Monkeys, Black Eyed Peas, Natasha Bedingfield, James Blunt, Kelly
Clarkson, Daddy Yankee, Jermaine Dupri, Eminem, Enya, Gorillaz, Jay-Z, Alicia
Keys, Daniel Powter, Eros Ramazzotti, Kanye West and Pharrell Williams.

Digital revenues continued to grow strongly, increasing by 46% at constant
currency on the prior year, to £19.7m. Revenues from digital music are
currently classified amongst the various revenue categories - mechanical,
performance, synchronisation and other uses - based on the varying status of
income collection for these new uses in different countries.

Growth in digital revenues in music publishing continues to lag the recorded
music industry, reflecting an under-developed infrastructure for the tracking
and collection of digital royalties and a lack of agreements on digital royalty
rates for certain products in some regions. EMI Music Publishing is at the
forefront of the industry's effort to ensure that the right structures and
rates are in place to identify and collect fully all past and future digital
revenues. In a ground-breaking move, EMI Music Publishing signed a heads of
agreement in January 2006 that represents the first steps towards a
pan-European one-stop shop for the licensing of online rights. EMI will work
with the UK's MCPS-PRS Alliance and Germany's GEMA to license the rights of
EMI's English language songs across Europe for online and mobile usage.

The use of songs in mobile phone products remains the most significant early
digital revenue contributor for EMI Music Publishing and continues to enjoy
very strong growth. For the revenue from mobile products, we have seen the
percentage contribution from ring tunes increase significantly during the year
whilst the contribution from ring tones has decreased, a trend we would expect
to see as the marketplace becomes more developed. Revenues from digital
downloads and other newer products, such as video downloads, have also grown
strongly yet remain relatively small. Recently, EMI Music Publishing announced
an agreement with the global internet communications company Skype. The deal,
which was the first of its kind, opens up an important new channel for the
delivery of music in the ever-expanding digital arena. It enables the licensing
of song copyrights from our catalogue for downloading, subscription and ring
tunes across Skype's online retail store on a worldwide basis.

Mechanical revenue

Our mechanical revenues, which are derived from the sale of recorded music,
reported growth for the first time in four years, increasing by 3.2% at
constant currency despite the global recorded music market continuing to show
year-on-year declines during the same period. Mechanical revenues now represent
45% of total divisional sales on a constant currency basis. On a regional
basis, our mechanical revenues were particularly strong in the US, reflecting
income tracking initiatives that have been taken to ensure collections are
maximised.

Performance revenue

Performance revenues, earned when a song is performed live on stage, played in
a bar or other public venue or broadcast on the radio or television, grew by
3.4% at constant currency for the year and now represent 27% of divisional
revenues on a constant currency basis. Key drivers of growth in this business
are the chart success of songs from our roster of active songwriters and the
proliferation of new media channels, especially across Europe. On a regional
basis, performance income was particularly strong in the UK, reflecting the
faster flow of royalties from the PRS, in the US, with a general increase in
income from ASCAP and BMI, in Spain, where we saw favourable TV income, and in
Germany, where a new tariff and income type for discos was introduced.

Synchronisation revenue

Synchronisation revenue, which is generated by the use of songs in audiovisual
works such as advertisements, television programmes, films, computer games and
in mobile phones, increased by 5.4% at constant currency, representing more
than eleven years of consecutive growth and now contributes 17% to divisional
revenues. From the high level achieved in 2004/05, EMI Music Publishing was
able to drive meaningful growth in synchronisation by gaining greater
penetration in commercials and video, particularly in the US. Significant
licences were issued worldwide for a number of major advertising campaigns,
including Coca Cola, the Automobile Association, Fuji, Fiat and American
Express as well as for TV programmes such as American Idol, Supernanny, Gilmore
Girls, Nip/Tuck, Crossing Jordan, Scrubs and Lost.

Other revenue

Other revenue typically represents about 10% of revenues, although the absolute
amount can vary significantly from year to year. An important driver of the
growth in other revenue in recent years has been revenue gained from stepped up
efforts in enforcing proper use of our copyrights. By their nature, these
revenues tend to be irregular and unpredictable, accounting for the overall
decline on a constant currency basis in this revenue category. Excluding these
items, the underlying growth in other revenue was strong at over 20%, largely
driven by increased background library income.

EMI Group future outlook

The recorded music market is undergoing significant change as it becomes
increasingly digitised. At this early stage, it is impossible to predict
accurately how the market will evolve. However, our analysis, based on recent
industry trends, EMI's performance to date and proprietary econometric
research, leads us to believe that the global recorded music industry will
return to growth in due course driven by consumer demand for digital music
products of all types. In this context, we anticipate declining physical sales
and have structured our business accordingly. Given the current growth rate of
digital music and our future expectations based on this analysis, we continue
to believe that digital music sales could represent up to 25% of total global
music sales by 2010.

We will continue to invest significantly in A&R, marketing, and in our systems'
infrastructure so that we remain positioned at the forefront of the industry in
capitalising on the exciting opportunities arising from the market's evolution.

In April 2006, we announced a series of restructuring initiatives aimed at
further strengthening our business. These initiatives will involve most regions
and will be focused on improving and re-aligning resources to ensure the
organisation remains flexible and progressive. A particular area of focus is
EMI Music's Japanese business where new skills and a new organisational
structure will be introduced to enable the re-allocation of resources into the
key areas of A&R and marketing whilst maintaining an aggressive approach to
digital business development. These initiatives together are expected to
generate £30m of annualised cost savings. We expect that not less than £10m of
these savings will be achieved in the financial year ending in March 2007, with
the full run rate achieved by the end of the following financial year. In
conjunction with these restructuring initiatives, EMI Music plans to enter into
sale and leaseback arrangements for its two Tokyo properties and the Capitol
Tower in the US. The lease costs that will be incurred as a result of these
agreements have already been taken into account in our planned delivery of a
net £30m of annualised cost savings.

In the current financial year, EMI Music is planning releases from Chingy,
Tiziano Ferro, Janet Jackson, Norah Jones, Stacie Orrico, RBD, Renaud, Joss
Stone, KT Tunstall, Keith Urban, Hikaru Utada and Robbie Williams. EMI Music
Publishing expects to benefit from releases from artists including Audioslave,
Embrace, Goo Goo Dolls, Jewel, Diddy, Pharrell Williams, Pink, Scissor Sisters,
The Zutons and Tool.

On 3 May 2006, we announced that on 1 May 2006 the Group made an approach to
Warner Music Group Corp (Warner Music) in connection with a proposed offer by
EMI to acquire all of the outstanding shares of Warner Music for US$28.50 per
share, in a combination of cash and EMI shares. Subsequently, Warner Music
informed us that it did not wish to enter into discussions regarding our
proposal. We continue to believe that an acquisition of Warner Music by EMI
would be very attractive to both sets of shareholders but we will only pursue a
transaction that delivers enhanced value and earnings accretion to our
shareholders.

EMI Group financial review

Revenue

Reported Group revenue increased by 3.9% or £78.7m to £2,079.9m. The
improvement, excluding the impact of currency movements, was 2.1% or £41.5m.
The favourable exchange movement was largely driven by a decline in the
weighted average rate of the US Dollar against Sterling from $1.85 last year to
$1.78 in 2005/06.

At constant currency, revenue in EMI Music grew by 1.9%, with notable increases
in North America, UK and Ireland and Latin America.

At constant currency, revenue in EMI Music Publishing was up on the prior year
in all major territories, apart from Italy and France, and by 2.6% at a
divisional level. The increase in revenue was driven by strong growth in
mechanical, performance and synchronisation revenues.

Group digital revenue increased to £112.1m, up 135% from the prior year at
constant currency. Digital revenue represented 5.4% of total Group revenue for
the year.

Costs

During the course of the year, costs in both divisions were tightly controlled.
The underlying gross margin, after distribution costs, improved from 36.4% to
37.2%.

Royalty and copyright costs, manufacturing and distribution costs, together
with marketing and promotion costs have increased modestly in total in absolute
terms in the year, reflecting the increase in revenue. However, these costs in
aggregate have declined as a percentage of total revenue from the prior year.
During the year, we delivered the remaining £15m of cost savings from our
restructuring initiatives announced in March 2004, taking the total annualised
savings from this programme to £50m. These savings were largely reflected in
reduced manufacturing and distribution costs and overheads. Group corporate
costs were lower in comparison to the prior year in spite of increased legal,
regulatory and consultancy costs.

Profit from operations

Group profit from operations (EBITA) increased by £25.4m or 11.3% from £225.1m
to £250.5m. Excluding exchange, the increase in EBITA was £21.6m or 9.6%. Group
operating margin increased from 11.2% to 12.0%.

EMI Music delivered EBITA of £145.1m, an improvement of £18.1m or 14.4% at
constant currency on the prior year. This increase in EBITA was largely driven
by particularly good performances in Continental Europe, UK and Ireland, and
Latin America. Operating margin improved from 7.8% to 8.7%.

EMI Music Publishing generated EBITA of £105.4m, a growth of 3.5% at constant
currency on the prior year. Operating margin improved from 24.9% to 25.1%,
reflecting improved net publisher's share and continued strong overhead
control.

The Group's share of profit in its associated company investments reduced from
£1.1m in 2004/05 to £1.0m in 2005/06. Consequently, the underlying profit from
operations for the Group increased from £226.2m in the prior year to £251.5m
this year.

Underlying Group finance charges rose by £7.1m to £92.2m. The largest items
contributing to this increase were the interest rate rises in both Europe and
the US, two of our major funding territories, a lower gain from the
amortisation of the 2003 swap unwind and higher average net borrowings over the
year, offset only partly by savings from the refinancing of our revolving
credit facility completed earlier in the year.

Underlying profit before tax increased by 12.9% from £141.1m to £159.3m,
reflecting both the increase in revenue and the continued tight cost control.

The underlying Group tax rate was 17.6% against 22.3% in the prior year. The
reduced rate reflected a movement in profitability towards countries where
there were brought-forward tax losses available for offset. The rate has been
further reduced due to the settlement of prior liabilities at a lower amount
than expected.

As a result of the above, the Group's underlying profit after taxation
increased from £109.6m to £131.2m, an increase of 19.7%.

Underlying basic earnings per share were 16.2p, an increase of 2.8p from the
prior year. Underlying diluted earnings per share, the calculation of which
includes the impact of the potential conversion of convertible bonds (and
related bond interest) together with the possible exercise of dilutive share
options, increased from 13.1p to 15.7p.

Other items affecting earnings

Exceptional items and amortisation comprise operating exceptional costs,
finance exceptional costs and amortisation of music copyrights and intangibles.

The Group is reporting operating exceptional income of £4.0m compared with
costs of £17.5m in the prior year. Operating exceptional income is net of
property impairment charges of £1.1m in the UK in 2005/06 (2004/05: £18.5m
charge in Japan). The remaining operating exceptional income of £5.1m includes
gains on property disposals, the gain on disposal of our manufacturing
operation in Japan and fair value adjustments to listed investments. The
prior-year charge included income of £1.0m in respect of the same components.

The Group is reporting finance exceptional net income relating to
remeasurements and refinancing costs of £4.7m compared to net income of £23.2m
last year. This primarily relates to the gain on revaluation to fair value of
the convertible bond derivative of £4.1m (2004/05: £31.2m gain), the gain on
revaluation of the Eurobond embedded call feature of £8.2m (2004/5 £0.2m loss)
and the foreign exchange loss on Euro borrowings of £4.1m (2004/05: £9.5m
loss). The finance exceptional net income for 2005/06 includes exceptional
refinancing costs of £5.2m in connection with the refinancing programme carried
out in July 2005 (2004/05: £nil).

Amortisation of music copyrights and other intangibles and impairment of
goodwill amounted to £49.9m in comparison with £48.0m last year.

The minority interest cost has increased from a credit of £0.5m in the previous
year to a charge of £3.9m this year. This is largely the consequence of
increased profitability and the absence of a property impairment charge in our
Music business in Japan in which there is a 45% minority.

Profit attributable to members of the Company was £86.1m in comparison with an
attributable profit last year of £75.4m.

The Board is recommending a final dividend of 6.0p per share, maintaining a
full-year dividend of 8.0p per share and reflecting our strong performance for
the year and our continued confidence in the outlook for the business.

Reported results

Total Group profit from operations (including share of associates) was £205.6m
in comparison with £160.7m last year. This increase was entirely due to
improved trading and reduced property impairment charges.

Total profit before taxation was £118.1m as against £98.8m in the prior year.
This increase reflected the improvement in Group profit from operations, partly
offset by the reduction in finance exceptional net income.

Cash flow and net borrowings

Improvement in cash conversion and overall cash management remains a key area
of focus for the Group. The net cash inflow from operating activities was £
188.3m, a small reduction from last year's inflow of £189.0m.

After the net cash inflow from operating activities, we had cash outflows of £
2.6m for investment activity and £246.9m for financing activity including £
61.2m for dividends. Taking into account the loss on exchange of foreign
currency denominated borrowings of £42.8m, year-end net debt has increased by £
22.0m from £857.5m to £879.5m.

The net cash inflow from operations after investing activities has approximated
the operating result of both divisions in recent years.

ATTACHMENTS

EMI GROUP PLC FINANCIAL STATEMENTS 2005/06

(a)      Financial summary for the year ended 31 March 2006.                  
                                                                              
(b)      Group consolidated income statement for the year ended 31 March 2006.
                                                                              
(c)      Group consolidated balance sheet at 31 March 2006.                   
                                                                              
(d)      Group consolidated statement of recognised income and expense for the
         year ended 31 March 2006.                                            
                                                                              
(e)      Group consolidated cash flow statement for the year ended 31 March   
         2006.                                                                
                                                                              
(f)      Note to the Group consolidated cash flow statement for the year ended
         31 March 2006.                                                       
                                                                              
(g)-(l)  Group accounting policies                                            
                                                                              
(m)-(u)  Notes to the Group financial statements for the year ended 31 March  
         2006.                                                                

                                                                Attachment (a)

FINANCIAL SUMMARY

for the year ended 31 March 2006

                                                           2006            2005
                                                                               
                                                                       Restated
                                                                               
                                                             £m              £m
                                                                               
Total Group revenue                                     2,079.9         2,001.2
                                                                               
Total EBITDA (i)                                          275.8           250.2
                                                                               
Underlying Group profit from operations                   250.5           225.1
(EBITA) (ii)                                                                   
                                                                               
Underlying PBT (iii)                                      159.3           141.1
                                                                               
Total profit before taxation                              118.1            98.8
                                                                               
Underlying diluted earnings per share                     15.7p           13.1p
(iv)                                                                           
                                                                               
Basic earnings per share                                  10.9p            9.6p
                                                                               
Dividends per share                                        8.0p            8.0p
                                                                               
Return on sales (v)                                       12.0%           11.2%
                                                                               
Interest cover (vi)                                        3.0x            2.9x

 (i)  EBITDA is Group profit from operations before depreciation and           
      exceptional items and amortisation.                                      
                                                                               
(ii)  Underlying Group profit from operations (EBITA) is before exceptional    
      items and amortisation.                                                  
                                                                               
(iii) Underlying PBT is before exceptional items and amortisation.             
                                                                               
(iv)  Underlying diluted earnings per share is before exceptional items and    
      amortisation.                                                            
                                                                               
 (v)  Return on sales is defined as underlying Group profit from operations as 
      a percentage of total Group revenue.                                     
                                                                               
(vi)  Interest cover is defined as the number of times EBITDA is greater than  
      Group net finance charges excluding finance exceptional items            

Exceptional items include operating exceptional items and finance exceptional
items. Operating exceptional items include impairment of goodwill, gains
(losses) on disposal of property, plant and equipment and remeasurement of
listed investments. Finance exceptional items include remeasurement of
financial assets and liabilities to be included within finance charges and
exceptional refinancing costs.

                                                                 Attachment (b)

GROUP CONSOLIDATED INCOME STATEMENT

for the year ended 31 March 2006

                                                       2006                 2005
                                                                                
                                          Total  Underlying Underlying     Total
                                                                        Restated
                                                              Restated          
                                                                                
                                             £m          £m         £m        £m
                                                                                
Revenue                                 2,079.9     2,079.9    2,001.2   2,001.2
                                                                                
Group profit from operations before       250.5       250.5      225.1     225.1
exceptional items and amortisation                                              
                                                                                
Exceptional items and amortisation       (45.9)           -          -    (65.5)
                                                                                
Share of profits from associates            1.0         1.0        1.1       1.1
                                                                                
Profit from operations*                   205.6       251.5      226.2     160.7
                                                                                
Finance charges                                                                 
                                                                                
Finance income                             71.4        57.4       58.6      91.5
                                                                                
Finance costs                           (158.9)     (149.6)    (143.7)   (153.4)
                                                                                
Total net finance charges                (87.5)      (92.2)     (85.1)    (61.9)
                                                                                
Profit (loss) before taxation             118.1       159.3      141.1      98.8
                                                                                
Overseas                                 (33.1)      (33.1)     (38.5)    (30.9)
                                                                                
UK                                          5.0         5.0        7.0       7.0
                                                                                
Total taxation                           (28.1)      (28.1)     (31.5)    (23.9)
                                                                                
Profit (loss) from continuing              90.0       131.2      109.6      74.9
operations after taxation                                                       
                                                                                
Attributable to:                                                                
                                                                                
Equity holders of the parent               86.1                             75.4
                                                                                
Minority interest                           3.9                            (0.5)
                                                                                
* The following items are included within                                       
Profit from operations                                                          
                                                                                
Cost of sales                         (1,280.3)   (1,230.4)  (1,201.8) (1,247.6)
                                                                                
Distribution costs                       (75.0)      (75.0)     (70.3)    (70.3)
                                                                                
Gross Profit                              724.6       774.5      729.1     683.3
                                                                                
Administration expenses                 (533.5)     (532.4)    (506.8)   (527.5)
                                                                                
Other operating income, net                13.5         8.4        2.8       3.8
                                                                                

Earnings per share (EPS)                  2006                             2005
                                                                               
Basic earnings per Ordinary Share (note  10.9p                             9.6p
6)                                                                             
                                                                               
Diluted earnings per Ordinary Share      10.5p                             6.1p
(note 6)                                                                       
                                                                               
Underlying basic earnings per Ordinary   16.2p                            13.4p
Share (note 6)                                                                 
                                                                               
Underlying diluted earnings per          15.7p                            13.1p
Ordinary Share (note 6)                                                        
                                                                               
Underlying earnings are included as they provide a better understanding of the 
underlying trading performance of the Group on a normalised basis.             

Average exchange rates for the year       2006                             2005
                                                                               
US Dollar to £1                           1.78                             1.85
                                                                               
Euro to £1                                1.47                             1.45
                                                                               
Yen to £1                               203.69                           198.32
                                                                               
The results for the year have been translated into Sterling at the appropriate 
average exchange rates.                                                        

                                                                 Attachment (c)

GROUP CONSOLIDATED BALANCE SHEET

at 31 March 2006

                                                             2006          2005
                                                                               
                                                                       Restated
                                                                               
                                                               £m            £m
                                                                               
ASSETS                                                                         
                                                                               
Non-current assets                                                             
                                                                               
Music copyrights and intangibles                            389.3         404.6
                                                                               
Goodwill                                                     43.0          35.1
                                                                               
Property, plant and equipment                               196.8         200.0
                                                                               
Investments in associates                                     8.8           8.5
                                                                               
Other investments                                            15.0          17.6
                                                                               
Deferred taxation                                            22.8          29.9
                                                                               
Financial derivatives                                        41.3          39.0
                                                                               
Other receivables                                             4.4           6.6
                                                                               
                                                            721.4         741.3
                                                                               
Current assets                                                                 
                                                                               
Inventories                                                  37.2          28.2
                                                                               
Advances                                                    330.1         336.0
                                                                               
Trade receivables                                           408.5         300.1
                                                                               
Corporation tax recoverable                                  16.7          21.2
                                                                               
Other receivables                                           110.6         109.7
                                                                               
Investments: liquid funds                                     1.6           1.6
                                                                               
Cash and cash equivalents                                   190.9         240.9
                                                                               
                                                          1,095.6       1,037.7
                                                                               
Total assets                                              1,817.0       1,779.0
                                                                               
LIABILITIES                                                                    
                                                                               
Non-current liabilities                                                        
                                                                               
Borrowings                                              (1,049.4)     (1,068.7)
                                                                               
Other payables                                              (9.5)        (10.2)
                                                                               
Deferred taxation                                           (5.1)         (8.2)
                                                                               
Pension provisions                                         (31.1)       (100.1)
                                                                               
Financial derivatives                                     (100.3)        (92.8)
                                                                               
                                                        (1,195.4)     (1,280.0)
                                                                               
Current liabilities                                                            
                                                                               
Borrowings                                                 (22.6)        (31.3)
                                                                               
Other payables                                          (1,149.0)     (1,060.1)
                                                                               
Current tax liability                                     (143.1)       (160.3)
                                                                               
Other provisions for liabilities and charges               (33.5)        (43.6)
                                                                               
                                                        (1,348.2)     (1,295.3)
                                                                               
Total liabilities                                       (2,543.6)     (2,575.3)
                                                                               
NET LIABILITIES                                           (726.6)       (796.3)
                                                                               
EQUITY                                                                         
                                                                               
Capital and reserves                                                           
                                                                               
Share capital                                               110.7         110.6
                                                                               
Share premium account                                       447.8         447.3
                                                                               
Capital redemption reserve                                  495.8         495.8
                                                                               
Foreign exchange reserve                                   (17.1)           3.8
                                                                               
Other reserves                                              206.4         204.0
                                                                               
Retained earnings                                       (2,019.0)     (2,107.1)
                                                                               
Equity attributable to equity holders of the              (775.4)       (845.6)
parent                                                                         
                                                                               
Minority interests (equity)                                  48.8          49.3
                                                                               
TOTAL EQUITY                                              (726.6)       (796.3)

Year end exchange rates                                                        
                                                                               
                                                             2006          2005
                                                                               
US Dollar to £1                                              1.73          1.89
                                                                               
Euro to £1                                                   1.43          1.45
                                                                               
Yen to £1                                                  204.66        202.11
                                                                               
The balance sheet has been translated into Sterling at the appropriate year end
exchange rates.                                                                

                                                                 Attachment (d)

GROUP CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE

for the year ended 31 March 2006

                                                             2006          2005
                                                                               
Income and expense recognised directly in equity                               
                                                                               
Revaluation of intangibles                                    4.8             -
                                                                               
Exchange difference on retranslation of foreign            (21.2)           0.2
operations                                                                     
                                                                               
Pension funds: actuarial gains and losses                    58.3           4.7
                                                                               
Gains (losses) on the revaluation to fair value of          (0.9)             -
available-for-sale investments                                                 
                                                                               
Net income directly recognised in equity                     41.0           4.9
                                                                               
Profit for the year                                          90.0          74.9
                                                                               
Total recognised income and expense for the year            131.0          79.8
                                                                               
Attributable to:                                                               
                                                                               
Equity holders of the parent                                126.4          92.7
                                                                               
Minority interest                                             4.6        (12.9)
                                                                               
Balance at 31 March                                         131.0          79.8

                                                                 Attachment (e)

GROUP CONSOLIDATED CASH FLOW STATEMENT

for the year ended 31 March 2006

                                                            2006           2005
                                                                               
                                                                       restated
                                                                               
                                                              £m             £m
                                                                               
Cash flows from operating activities                                           
                                                                               
Cash receipts from operations                            1,982.4        1,984.7
                                                                               
Cash used in operations                                (1,754.3)      (1,763.0)
                                                                               
Tax paid                                                  (39.8)         (32.7)
                                                                               
Net cash generated from (used in) operating                188.3          189.0
activities                                                                     
                                                                               
Cash flows from investing activities                                           
                                                                               
Purchase of businesses, net of cash acquired               (6.9)          (6.8)
                                                                               
Deferred consideration paid                                (0.9)         (64.1)
                                                                               
Purchase of associates                                     (0.3)          (2.1)
                                                                               
Disposal of associates                                         -            0.1
                                                                               
Purchase of music copyrights and intangibles               (4.1)          (6.0)
                                                                               
Disposal of music copyrights and intangibles                 7.3            0.2
                                                                               
Purchase of property, plant and equipment                 (30.2)         (29.9)
                                                                               
Disposal of property, plant and equipment                   16.3            3.3
                                                                               
Purchase of other investments                                  -          (3.1)
                                                                               
Dividends received from associated undertakings              1.0              -
                                                                               
Disposal of other investments                                5.9            1.1
                                                                               
Interest received                                            9.3            5.2
                                                                               
Net cash generated from (used in) investing                (2.6)        (102.1)
activities                                                                     
                                                                               
Cash flows from financing activities                                           
                                                                               
Issue of ordinary share capital                              0.6            1.7
                                                                               
Purchase of own shares                                     (0.5)          (0.3)
                                                                               
Equity dividends paid                                     (61.2)         (62.9)
                                                                               
Dividends paid to minorities                               (2.5)          (1.3)
                                                                               
Management of liquid funds                                 (0.6)          (0.8)
                                                                               
Financing:                                                                     
                                                                               
New loans                                                  207.8          128.9
                                                                               
Loans repaid                                             (277.6)        (127.1)
                                                                               
Capital element of finance leases repaid                   (0.6)          (0.8)
                                                                               
Interest paid                                            (111.6)        (105.5)
                                                                               
Interest element of finance lease repayments               (0.7)          (0.5)
                                                                               
Net cash generated from (used in) financing              (246.9)        (168.6)
activities                                                                     
                                                                               
Net increase (decrease) in cash and cash                  (61.2)         (81.7)
equivalents                                                                    
                                                                               
Cash and cash equivalents at the beginning of the          227.3          310.2
period                                                                         
                                                                               
Exchange gains (losses) on cash and cash                     2.6          (1.2)
equivalents in the year                                                        
                                                                               
Cash and cash equivalents at the end of the year           168.7          227.3
                                                                               
Cash and cash equivalents at the end of the year                               
comprise of:                                                                   
                                                                               
Cash at bank and in hand                                   188.3          239.1
                                                                               
Overdrafts                                                (19.6)         (11.8)
                                                                               
                                                           168.7          227.3

                                                                 Attachment (f)

NOTE TO THE GROUP CONSOLIDATED CASH FLOW STATEMENT

for the year ended 31 March 2006

a) Reconciliation of Group profit from operations to net cash flow from
operating activities:

                                                           2006            2005
                                                                               
                                                                       Restated
                                                                               
                                                             £m              £m
                                                                               
Group profit from operations (before share of             204.6           159.6
profit in associates)                                                          
                                                                               
Depreciation charge                                        25.3            25.1
                                                                               
Property impairment charge                                  1.1            18.5
                                                                               
Gain on disposal of property, plant and                   (9.4)           (0.8)
equipment and music copyrights and intangibles                                 
                                                                               
Amortisation and impairment of music copyrights            49.9            45.8
and intangibles                                                                
                                                                               
Impairment of goodwill                                        -             2.2
                                                                               
Remeasurements - revaluation to fair value of             (2.6)               -
listed investments                                                             
                                                                               
Share-based payment transactions                            4.9             2.3
                                                                               
Amounts provided                                           18.2            15.0
                                                                               
Provisions utilised                                      (36.1)          (75.7)
                                                                               
(Increase) decrease in inventories                        (7.3)           (0.1)
                                                                               
(Increase) decrease in receivables                       (74.1)            39.1
                                                                               
(Increase) decrease in payables                            53.6           (9.3)
                                                                               
Net cash generated from (used in) operations              228.1           221.7
                                                                               
Tax paid                                                 (39.8)          (32.7)
                                                                               
Net cash generated from (used in) operating               188.3           189.0
activities                                                                     

                                                                Attachment (g)

GROUP ACCOUNTING POLICIES

Basis of preparation

The consolidated financial information comprises the accounts of the Company
and its subsidiaries which have been prepared in accordance with applicable
accounting standards.

Following a regulation adopted by the European Parliament, the consolidated
financial information has been prepared in accordance with International
Financial Reporting Standards (IFRS). The Group's principal accounting policies
under IFRS are set out below. The transition date for the application of IFRS
is 1 April 2004, and the comparative figures for year ended 31 March 2005 have
been restated accordingly.

This preliminary financial information does not constitute statutory accounts
under S.240 of the Companies Act 1985. The Company's auditor has issued an
unqualified opinion of the financial statements for the year ended 31 March
2006.

IFRS 1 First-time adoption of IFRS

When preparing its IFRS balance sheet as at 31 March 2006, the Group has taken
the following options available under IFRS 1 in applying IFRS:

  * The requirements of IFRS 3 Business Combinations have been applied
    prospectively from 1 April 2003;
   
  * Certain properties were held at revalued amount as at 31 March 2004. On
    conversion, these revalued amounts were frozen and deemed cost in the case
    of these properties;
   
  * All actuarial gains and losses in respect of defined benefit pension and
    post-retirement schemes have been recognised in full in equity from 1 April
    2004;
   
  * Cumulative translation differences relating to net investments in overseas
    companies that arose prior to 1 April 2004 have been set to zero and will
    not be included in any subsequent calculation of profit or loss on
    disposal;
   
  * Only those employee share options granted after 7 November 2002 that had
    not vested as at 1 January 2005 have been remeasured at fair value; and
   
  * The Group has chosen to adopt IAS 32 Financial Instruments: Disclosure and
    Presentation and IAS 39 Financial Instruments: Recognition and Measurement
    from 1 April 2004.
   
Basis of consolidation

The consolidated financial statements comprise the financial statements of EMI
Group plc and its subsidiaries for the year ended 31 March 2006.

All intercompany balances and transactions, including unrealised profits and
losses arising from intra-group transactions, have been eliminated in full.

Subsidiaries are consolidated from the date on which control is transferred to
the Group and cease to be consolidated from the date on which control is
transferred out of the Group. Where there is a loss of control of a subsidiary,
the consolidated financial statements include the results for the part of the
reporting year during which EMI Group plc has control.

Foreign currency translation

Sterling (£) is the functional currency of the parent undertaking and the
presentational currency of the Group. The functional currency of subsidiaries,
joint ventures and associated companies ("foreign operations") is the currency
of the primary economic environment in which they operate.

Transactions in foreign currencies are initially recorded in the functional
currency at the rate ruling on the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies are translated at the functional
currency rate of exchange ruling at the balance sheet date. All differences are
taken to the income statement with the exception of differences on foreign
currency borrowings that provide a hedge against a net investment in a foreign
operation. These are taken directly to equity until the disposal of the net
investment, at which time they are recognised in the income statement. Tax
charges and credits attributable to exchange differences on those borrowings
are also dealt with in equity. Non-monetary items that are measured in terms of
historical cost in a foreign currency are translated using the exchange rates
at the dates of the initial transactions. Non-monetary items measured at fair
value in a foreign currency are translated using the exchange rates at the date
when the fair values were determined.

The assets and liabilities of foreign operations are translated into sterling
at the rate of exchange ruling at the balance sheet date and their income
statements are translated at the weighted average exchange rates for the
period. The exchange differences arising on the retranslation of foreign
operations are taken directly to a separate component of equity. On disposal of
a foreign operation, the deferred cumulative amount recognised in equity
relating to that particular foreign operation is recognised in the income
statement.

                                                                Attachment (h)

GROUP ACCOUNTING POLICIES

Business combinations and goodwill

The purchase method of accounting is used to account for the acquisition of
subsidiaries. The cost of an acquisition is measured as the fair value of the
assets given, equity instruments issued and liabilities incurred or assumed at
the date of exchange, plus costs directly attributable to the acquisition.
Identifiable assets acquired, and liabilities and contingent liabilities
assumed, in a business combination are measured initially at their fair values
at the acquisition date, irrespective of the extent of any minority interest.
The excess of the cost of the acquisition over the fair value of the Group's
share of the identifiable net assets acquired is recorded as goodwill.

Goodwill on acquisition is initially measured at cost. Following initial
recognition, goodwill is measured at cost less any accumulated impairment
losses.

Due to the adoption of IFRS 3 Business Combinations from 1 April 2003, goodwill
on acquisitions from 1 April 2003 is not amortised and goodwill already carried
in the balance sheet is not amortised from 1 April 2003. Goodwill is reviewed
for impairment annually, or more frequently if events or changes in
circumstances indicate that the carrying value may be impaired.

For an asset, such as goodwill, that does not generate largely independent cash
flows, the recoverable amount is determined for the smallest identifiable group
of assets including that asset that generates cash inflows that are largely
independent of the cash inflows from other assets or groups of assets (a `cash
generating unit').

Intangible assets

Intangible assets include music copyrights and other intangibles. Intangible
assets acquired separately are capitalised at cost, whilst those acquired as
part of a business acquisition are capitalised at fair value at the date of
acquisition.

Following initial recognition, intangible assets with finite lives are
amortised on a systematic basis over their economic useful lives. These lives
are estimated on an individual basis at periods of anything up to and including
20 years. Intangible assets are tested for impairment if events or changes in
circumstances indicate that the carrying value may be impaired. Useful lives
are examined on an annual basis and adjustments, where applicable, are made on
a prospective basis.

Intangible assets created within the business that cannot be distinguished from
the cost of developing the business as a whole are not capitalised. Any
relevant expenditure is charged against profit from operations in the period in
which the expenditure is incurred.

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation
and any impairment in value. Depreciation is calculated on a straight line
basis to write off the cost, less residual value, of assets over the estimated
useful life of the asset. The annual rates used are:

Freehold buildings 2%

Property held under finance leases and leasehold improvements Period of lease

Plant, equipment and vehicles 10 - 33 1/3%

The carrying values of property, plant and equipment are reviewed for
impairment when events or changes in circumstances indicate that the carrying
value may not be recoverable. Where an indicator of impairment exists, the
Group makes an estimate of the recoverable amount. Where the carrying amount of
an asset exceeds its recoverable amount, the asset is considered impaired and
is written down to its recoverable amount.

Assets are derecognised upon disposal or when no future economic benefits are
expected to arise from the continued use of the asset. Any gain or loss arising
on derecognition of the asset (calculated as the difference between the net
disposal proceeds and the carrying value of the asset) is included in the
income statement in the period in which the item is derecognised.

Assets are held at historical cost with the exception that certain properties
in the subsidiary undertaking Toshiba-EMI Limited are carried at revalued
amounts that were frozen. This frozen carrying value was deemed cost in the
case of these properties.

                                                                Attachment (i)

GROUP ACCOUNTING POLICIES

Leases

Assets which are held under a finance lease, which transfers to the Group
substantially all the risks and benefits incidental to ownership of the leased
item, are capitalised at the inception of the lease, with a corresponding
liability being recognised for the fair value of the leased asset or, if lower,
at the present value of the minimum lease payments. Lease payments are
apportioned between finance charges and a reduction of the lease liability so
as to achieve a constant rate of interest on the remaining balance of the lease
liability. Capitalised leased assets are depreciated over the shorter of the
estimated useful life of the asset or the lease term.

Leases where the lessor retains substantially all the risks and benefits of
ownership of the asset are classified as operating leases. Operating lease
payments are recognised as an expense in the income statement on a straight
line basis over the lease term.

Investments in joint ventures and associates

The Group's investments in its associates are accounted for using the equity
method. The investment is carried in the balance sheet at cost plus
post-acquisition changes in the Group's share of net assets of the associate,
less any impairment in value or dividends received. The Group's share of the
results after interest and tax of the associate are included in profit from
operations. When an associate has recognised a change in net assets other than
through the income statement, the Group recognises its share of the change and
discloses it, when applicable, in the statement of recognised income and
expense.

The Group has a number of jointly controlled operations where there is no
separate legal entity. The expenses that the Group incurs, and the share of the
income that the Group earns from the sale of goods by these jointly controlled
operations, are included in the income statement. The assets that the Group
controls, and the liabilities that the Group incurs, in respect of these
jointly controlled operations are included in the balance sheet.

Other investments

All investments are initially recognised at cost, being the fair value of the
consideration given and including acquisition charges associated with the
investment. At acquisition, all investments are classified as either fair value
through profit and loss, held-to-maturity or available-for-sale in accordance
with IAS 39 Financial Instruments: Recognition and Measurement.

Those investments classified as held-to-maturity or available-for-sale are
designated as non-current assets. Unlisted held-to-maturity or
available-for-sale investments are held on the balance sheet at cost less any
impairment in value. Listed held-to-maturity or available-for-sale investments
are held on the balance sheet at fair value, with any changes in fair value
being recognised in equity.

Those investments classified as fair value through profit and loss are
designated as current assets and are held on the balance sheet at fair value,
with any changes in fair value being recognised in the income statement along
with gains or losses on disposal.

Advances

In the ordinary course of business the Group pays advances and other expenses
recoupable from future royalties to performing artists, songwriters, producers
and third party repertoire owners. The amounts paid are carried at cost less
recoupment and less an allowance for any unrecoupable amounts. The allowance is
based on past revenue performance, current popularity and projected revenue.

Advances are recoupable during the business operating cycle. All advances are
therefore reported as current assets, including advances recoupable more than
12 months after the balance sheet date.

Inventories

Inventories are valued at the lower of cost and net realisable value. Cost
includes manufacturing overheads where appropriate.

Trade receivables

Trade receivables, which generally have 30-90 day terms, are recognised and
carried at the originally invoiced amount less an allowance for any doubtful
debts. An estimate for doubtful debts is made when collection of the full
amount is no longer probable. Bad debts are written off when identified.

Cash and cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at bank and in
hand and short-term deposits with an original maturity of three months or less.
For the purpose of the consolidated cash flow statement, cash and cash
equivalents consist of cash at bank and in hand net of outstanding bank
overdrafts.

                                                                Attachment (j)

GROUP ACCOUNTING POLICIES

Borrowings

All loans and borrowings are initially recognised at the fair value of the
consideration received net of issue costs associated with the borrowing. After
initial recognition, interest-bearing loans and borrowings are subsequently
measured at amortised cost using the effective interest method. Amortised cost
is calculated by taking into account any issue costs and any discount or
premium on settlement. Gains and losses on derecognition are recognised in
finance charges.

Hedge accounting is adopted where derivatives, such as "fixed to floating"
interest rate swaps, are held as fair value hedges against fixed interest rate
borrowings. Under fair value hedge accounting, fixed interest rate borrowings
are revalued at each balance sheet date by the change in fair value
attributable to the interest rate risk being hedged.

Financial derivatives

The Group uses derivative financial instruments such as interest rate swaps and
foreign currency contracts to hedge risks associated with interest and exchange
rate fluctuations. Such derivative financial instruments are stated at fair
value. The fair values of interest rate swaps and foreign currency contracts
are determined by reference to market rates for similar instruments.

For the purpose of hedge accounting, hedges are classified as either: fair
value hedges when they hedge the exposure to changes in the fair value of a
recognised asset or liability; or cash flow hedges where they hedge exposure to
variability in cash flows that is attributable to either a particular risk
associated with a recognised asset or liability or a forecast transaction.

In relation to fair value hedges (e.g. fixed to floating interest rate swaps
held as fair value hedges against fixed interest rate borrowings) which meet
the conditions for hedge accounting, any gain or loss from remeasuring the
hedging instrument at fair value is recognised immediately in the income
statement. Any gain or loss on the hedged item attributable to the hedged risk
is adjusted against the carrying amount of the hedged item and recognised in
the income statement.

For derivatives that do not qualify for hedge accounting, any gains or losses
arising from changes in fair value are taken directly to the income statement.

Guaranteed convertible bonds

The component of the guaranteed convertible bonds that exhibits characteristics
of a liability is recognised as a liability in the balance sheet, net of issue
costs. On issue of the guaranteed convertible bonds, the fair value of the
liability component was determined using a market rate for an equivalent
non-convertible bond. This amount is carried as a liability on an amortised
cost basis until extinguished on conversion or redemption. As the convertible
bonds are denominated in US dollars but are convertible to sterling shares, the
remainder of the proceeds is allocated to the conversion option that is
recognised and included as a derivative liability, net of issue costs. The
value of the conversion option is revalued to fair value at each balance sheet
date, with movements in fair value reflected as finance costs or finance
income.

Issue costs were apportioned between the liability and derivative components of
the guaranteed convertible bonds based on the allocation of proceeds to the
liability and derivative components when the instruments were first recognised.

Provisions

Provisions are recognised when the Group has a present obligation (legal or
constructive) as a result of a past event, when it is probable that an outflow
of resources embodying economic benefits will be required to settle the
obligation and when a reliable estimate can be made of the amount of the
obligation. Where the Group expects some or all of a provision to be
reimbursed, for example under an insurance contract, the reimbursement is
recognised as a separate asset but only when the reimbursement is virtually
certain. The expense relating to any provision is presented in the income
statement net of any reimbursement. If the effect of the time value of money on
the quantification of the provision is material, provisions are determined by
discounting the expected future cash flows at a pre-tax rate that reflects
current market assessments of the time value of money and, where appropriate,
the risks specific to the liability. Where discounting is used, the increase in
the provision due to the passage of time is recognised as finance costs.

                                                                Attachment (k)

GROUP ACCOUNTING POLICIES

Pensions and other employee benefits

The Group operates three major defined benefit pension schemes, plus a number
of smaller defined benefit pension schemes. The cost of providing benefits
under the schemes is determined separately for each scheme using the projected
unit actuarial valuation method.

Liabilities of the schemes are discounted by the current rate of return of an
AA-rated corporate bond of equivalent term and currency to the liabilities.
Assets of the schemes are measured at fair value at the balance sheet date.
Actuarially calculated surpluses or deficits on the defined benefit schemes are
included within the consolidated balance sheet. The current service cost of
each of the schemes is charged against profit from operations. Expected returns
on defined benefit scheme assets and interest on defined benefit scheme
liabilities are included as finance income and finance costs respectively. With
effect from 1 April 2004, the Group has adopted the amendment to IAS 19
Employee Benefits that permits actuarial gains and losses to be charged or
credited directly to equity through the statement of recognised income and
expense.

In addition, the Group operates a number of defined contribution schemes.
Contributions to defined contribution schemes are charged to the income
statement as incurred.

Employee benefits other than post-employment benefits that can be carried
forward if they have not been used are accrued as they are earned until the
benefit is paid or used. Those employee benefits that are foregone if not taken
at the time are expensed when incurred.

Revenue

Revenue is recognised to the extent that it is probable that the economic
benefits will flow to the Group and the revenue can be reliably measured. The
following specific recognition criteria must also be met before revenue is
recognised:

  * Sale of goods: revenue is recognised when the significant risks and rewards
    of ownership of the goods have passed to the buyer and can be reliably
    measured. Revenue is measured at fair value after making provision in
    respect of expected future returns of goods and services supplied by the
    Group prior to the balance sheet date;
   
  * Royalty and other income: all royalty and other income is recognised when
    it has been earned and can be reliably measured.
   
Interest income is recognised when it has been earned and can be reliably
measured.

Share-based payments

The share option programme allows certain Group employees to acquire shares of
the Company. The fair value of options granted is recognised as an employee
expense with a corresponding increase in equity. The fair value is measured at
grant date and the expense is spread over the period during which the employees
become unconditionally entitled to the options. The fair value of the options
granted is measured using a binomial lattice model, taking into account the
terms and conditions upon which the options were granted.

The amount recognised as an expense reflects the extent to which the vesting
period has expired and the Group's best estimate of the number of awards that
will ultimately vest. No expense is recognised for awards that do not
ultimately vest, except for awards where the vesting is conditional upon a
market condition, which are treated as vesting irrespective of whether or not
the market condition is satisfied, provided that all other performance
conditions are satisfied.

Employees of certain subsidiaries of the Group participate in the employee
share incentive plans and the Group has an employee share trust to satisfy
non-transferable options granted to executives and senior employees. Shares in
the Group held by the employee share trust are treated as treasury shares and
presented in the balance sheet as a deduction from equity.

The Group has taken advantage of the transitional provisions of IFRS 2 in
respect of equity-settled awards and has applied IFRS 2 only to equity-settled
awards granted after 7 November 2002 that had not vested on or before 1 January
2005.

Finance charges

Finance costs comprise interest payable on borrowings calculated using the
effective interest rate method, foreign exchange losses and losses on hedging
instruments that are recognised in the income statement.

Finance income comprises interest receivable on funds invested calculated using
the effective interest rate method, dividend income, foreign exchange gains and
gains on hedging instruments that are recognised in the income statement.

                                                                Attachment (l)

GROUP ACCOUNTING POLICIES

Income tax

Income tax on the profit or loss for the period comprises current and deferred
tax. Income tax is recognised in the income statement except to the extent that
it relates to items recognised directly in equity, in which case it is
recognised in equity.

Current tax is the expected tax payable on the taxable income for the period,
using tax rates enacted or substantively enacted at the balance sheet date and
any adjustment to tax payable in respect of previous periods.

Deferred tax is recognised for all temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the tax
base. The following temporary differences are not provided for: the initial
recognition of goodwill or of assets or liabilities that affect neither
accounting nor taxable profit that is not a business combination; and temporary
differences relating to investments in subsidiaries, joint ventures and
associates where the timing of the reversal of the temporary difference can be
controlled and to the extent that it is probable that the temporary difference
will not reverse in the foreseeable future. The amount of deferred tax provided
is based on the expected manner of realisation or settlement of the carrying
amount of assets and liabilities, using tax rates enacted or substantially
enacted at the balance sheet date.

A deferred tax asset is recognised only to the extent that it is probable that
future taxable profits will be available against which the asset can be
utilised.

Segments

A business segment is a group of assets and operations engaged in providing
products or services that are subject to risks and returns that are different
from those of other business segments. A geographical segment is engaged in
providing products or services within a particular economic environment that
are subject to risks and returns that are different from those segments
operating in other economic environments.

Exceptional items and amortisation

Exceptional items and amortisation are excluded from underlying results in
order to provide a better understanding of the normalised trading of the Group.
The Group considers that such items would fall into either of two categories:
operating exceptional items and amortisation; and finance exceptional items.

The Group defines operating exceptional items and amortisation as items which
derive either from events or transactions that it considers fall outwith the
ordinary activities of the Group or from events or transactions that fall
within the ordinary activities of the Group but which, individually or, if of a
similar type, in aggregate, need to be disclosed separately by virtue of their
size or incidence if the financial statements are to give a true and fair view.
Similarly, the Group defines finance exceptional items as items which derive
either from events or transactions that it considers fall outwith the ordinary
financing activities of the Group or and from events or transactions that fall
within the ordinary financing activities of the Group but which, individually
or, if of a similar type, in aggregate, need to be disclosed separately by
virtue of their size or incidence if the financial statements are to give a
true and fair view.

Events or transactions that the Group would consider as falling outwith its
ordinary activities could include, but are not limited to: the revaluation and/
or disposal of property, plant and equipment; the revaluation and/or disposal
of held-to-maturity or available-for-sale investments or investments at fair
value through profit and loss; the disposal and/or closure of a business,
jointly controlled operation or associate; and the costs of a fundamental
reorganisation or restructuring. Events or transactions that the Group would
consider as falling within its ordinary activities but which need to be
disclosed separately could include, but are not limited to: the amortisation
and impairment of music copyrights and intangibles; the impairment of goodwill;
and the impairment of the cost of an investment in a business, jointly
controlled operation or associate. Events or transactions that the Group would
consider as falling outwith its ordinary financing activities could include,
but are not limited to: gains or losses on the revaluation of derivative
financial instruments; gains or losses on the retranslation of foreign
currency-denominated borrowings to the extent that they do not provide a hedge
against foreign currency-denominated investments; and gains or losses from the
ineffectiveness of the interest rate swaps hedge. Events or transactions that
the Group would consider as falling within its ordinary financing activities
but which need to be disclosed separately could include, but are not limited
to, costs incurred as part of the Group's refinancing programmes.

                                                                Attachment (m)

NOTES TO THE GROUP FINANCIAL STATEMENTS

for the year ended 31 March 2006

1. Segmental analysis

At 31 March 2006, the Group is organised on a worldwide basis into two main         
business segments - Music and Music Publishing. These divisions are the basis       
on which the Group reports its primary segment information.                         
                                                                                    
Results                                                                             
                                                                                    
                                                   2006                         2005
                                                                                    
                                 EMI  EMI Music   Total      EMI  EMI Music    Total
                               Music Publishing            Music Publishing         
                                                                   Restated Restated
                                                        Restated                    
                                                                                    
                                  £m         £m      £m       £m         £m       £m
                                                                                    
Group revenue                1,660.3      419.6 2,079.9  1,600.5      400.7  2,001.2
                                                                                    
Group profit (loss) from       145.1      105.4   250.5    125.5       99.6    225.1
operations before                                                                   
exceptional items and                                                               
amortisation                                                                        
                                                                                    
Share of profit (loss)         (0.1)        1.1     1.0      0.6        0.5      1.1
from associate                                                                      
                                                                                    
Segmental operating                                                                 
exceptional items and                                                               
amortisation:                                                                       
                                                                                    
Amortisation of music          (3.6)     (46.3)  (49.9)    (3.0)     (42.8)   (45.8)
copyrights and intangibles                                                          
                                                                                    
Gain on disposal of              0.6      (0.2)     0.4   (17.7)          -   (17.7)
property, plant and                                                                 
equipment                                                                           
                                                                                    
Segmental result               142.0       60.0   202.0    105.4       57.3    162.7
                                                                                    
Non-segmental operating                             3.6                        (2.0)
exceptional items and                                                               
amortisation                                                                        
                                                                                    
Group profit from                                 205.6                        160.7
operations                                                                          
                                                                                    
Total net finance charges                        (87.5)                       (61.9)
                                                                                    
Profit (loss) before                              118.1                         98.8
taxation                                                                            
                                                                                    
Taxation                                         (28.1)                       (23.9)
                                                                                    
Profit (loss) from                                 90.0                         74.9
continuing operations                                                               
after taxation                                                                      
                                                                                    
Other segmental items included in the income                                        
                                                                                    
statement include:                                                                  
                                                                                    
Depreciation                    22.1        3.2    25.3     22.0        3.1     25.1
                                                                                    
Amortisation of music            3.6       44.3    47.9      3.0       42.8     45.8
copyrights and intangibles                                                          
                                                                                    
Impairment of music                -        2.0     2.0        -          -        -
copyrights and intangibles                                                          
                                                                                    
Impairment of goodwill             -          -       -      2.2          -      2.2
                                                                                    
Impairment of property           0.9        0.2     1.1     18.5          -     18.5
                                                                                    
Release of overprovision       (2.3)          -   (2.3)    (3.8)          -    (3.8)
for reorganisation costs                                                            
changed in prior years                                                              
                                                                                    
Reorganisation costs             2.3          -     2.3      3.8          -      3.8
                                                                                    

                                                                Attachment (n)

NOTES TO THE GROUP FINANCIAL STATEMENTS

continued

1. Segmental analysis (continued)

Assets and liabilities                                                                
                                                                                      
                                                    2006                          2005
                                                                                      
                                EMI  EMI Music     Total      EMI  EMI Music     Total
                              Music Publishing              Music Publishing          
                                                                    Restated  Restated
                                                         Restated                     
                                                                                      
                                 £m         £m        £m       £m         £m        £m
                                                                                      
Segment assets                926.3      578.0   1,504.3    813.4      586.8   1,400.2
                                                                                      
Investment: associates          5.9        2.3       8.2      6.8        1.1       7.9
                                                                                      
Unallocated assets                                 304.5                         370.9
                                                                                      
Consolidated total assets                        1,817.0                       1,779.0
                                                                                      
Segmental liabilities       (898.1)    (282.4) (1,180.5)  (835.3)    (256.5) (1,091.8)
                                                                                      
Unallocated liabilities                        (1,363.1)                     (1,483.5)
                                                                                      
Consolidated total                             (2,543.6)                     (2,575.3)
liabilities                                                                           
                                                                                      
Other segment items                                                                   
included in the balance                                                               
sheet include:                                                                        
                                                                                      
Capital expenditure            25.5        8.8      34.3     30.4        5.5      35.9
                                                                                      
Average employees (No.)       5,672        640     6,312    6,043        629     6,672
                                                                                      
Profit from operations is analysed instead of profit before taxation as finance       
charges are borne centrally and are not allocated to the operating businesses.        
                                                                                      
The Group's two business segments operate in six main geographical areas, even        
though they are managed on a worldwide basis.                                         
                                                                                      
                                                                                  2006
                                                                                      
                            United  Rest of    Latin   North     Asia    Other   Total
                           Kingdom   Europe  America America  Pacific                 
                                                                                      
                                £m       £m       £m      £m       £m       £m      £m
                                                                                      
Segment revenue              348.0    630.2     84.4   649.1    338.8     29.4 2,079.9
                                                                                      
Segment assets               267.1    288.5     58.8   657.5    155.6     76.8 1,504.3
                                                                                      
Investment: associates           -      0.4        -     6.6      1.2        -     8.2
                                                                                      
Unallocated assets               -        -        -       -        -        -   304.5
                                                                                      
Consolidated total assets    267.1    288.9     58.8   664.1    156.8     76.8 1,817.0
                                                                                      
Capital expenditure           15.3      6.9      0.6     8.7      2.2      0.6    34.3
                                                                                      
Average Employees (No.)      1,201    1,393      311   2,034    1,241      132   6,312
                                                                                      

                                                                Attachment (o)

NOTES TO THE GROUP FINANCIAL STATEMENTS

continued

1. Segmental analysis (continued)

                                                                                  2005
                                                                                      
                          United  Rest of    Latin    North     Asia    Other    Total
                         Kingdom   Europe  America  America  Pacific                  
                                                                                      
                        Restated Restated Restated Restated Restated Restated Restated
                                                                                      
                              £m       £m       £m       £m       £m       £m       £m
                                                                                      
Segment revenue            339.6    633.9     55.8    581.2    366.3     24.4  2,001.2
                                                                                      
Segment assets             257.1    291.5     34.2    605.7    145.5     66.2  1,400.2
                                                                                      
Investment: associates         -      0.2        -      5.9      1.8        -      7.9
                                                                                      
Unallocated assets             -        -        -        -        -        -    370.9
                                                                                      
Consolidated total         257.1    291.7     34.2    611.6    147.3     66.2  1,779.0
assets                                                                                
                                                                                      
Capital expenditure         17.3      6.1      0.6      9.8      1.6      0.5     35.9
                                                                                      
Average Employees (No.)    1,156    1,623      293    2,124    1,345      131    6,672
                                                                                      

2. Exceptional items and amortisation



Exceptional items and amortisation are excluded from underlying results in
order to provide a better understanding of the normalised trading of the Group,
and include operating exceptional items and amortisation and finance
exceptional items. See the Group accounting policies section of these financial
statements for definitions of these terms and for examples of the types of
transactions that may fall into each category.

(i) Operating exceptional items and amortisation                               
                                                                               
                                                            2006           2005
                                                                               
                                                                       Restated
                                                                               
                                                              £m             £m
                                                                               
Net gain on sale of property, plant and                      1.5            0.8
equipment                                                                      
                                                                               
Gain on disposal of business                                 1.0              -
                                                                               
Gain (loss) on revaluation to fair value of                  2.6            0.2
investments at fair value through profit and                                   
loss                                                                           
                                                                               
Restructuring and reorganisation costs:                                        
                                                                               
Music: headcount reduction                                 (2.3)          (3.8)
                                                                               
Release of overprovision for reorganisation                  2.3            3.8
costs charged in prior years                                                   
                                                                               
Property impairment                                        (1.1)         (18.5)
                                                                               
Amortisation and impairment of music copyrights           (49.9)         (45.8)
and intangibles                                                                
                                                                               
Impairment of goodwill                                         -          (2.2)
                                                                               
Total                                                     (45.9)         (65.5)

The attributable taxation charge (credit) relating to operating exceptional
items and amortisation is £nil (2005: £(7.6)m).

The share of the operating exceptional items and amortisation attributable to
minority interests is £0.1m (2005: £(5.1)m).

                                                                Attachment (p)

NOTES TO THE GROUP FINANCIAL STATEMENTS

continued

(ii) Finance exceptional items                                                 
                                                                               
                                                            2006           2005
                                                                               
                                                                       Restated
                                                                               
                                                              £m             £m
                                                                               
Fair value revaluation of convertible bond                   4.1           31.2
derivative liability                                                           
                                                                               
Fair value revaluation of interest rate swaps                1.4            1.7
                                                                               
Fair value revaluation of Eurobond call feature              8.2          (0.2)
derivative asset                                                               
                                                                               
Foreign exchange on unhedged Euro borrowings               (4.1)          (9.5)
                                                                               
Foreign exchange on unhedged foreign currency                0.3              -
borrowings                                                                     
                                                                               
Exceptional refinancing costs                              (5.2)              -
                                                                               
Total                                                        4.7           23.2

The attributable taxation charge relating to finance exceptional items is £nil
(2005: £nil).

3. Finance charges

                                                           2006            2005
                                                                               
                                                                       Restated
                                                                               
                                                             £m              £m
                                                                               
Finance costs:                                                                 
                                                                               
Interest payable on bank overdrafts and loans              92.8            83.8
                                                                               
Interest payable on other loans                             7.4            11.3
                                                                               
Interest payable on finance leases                          0.7             0.5
                                                                               
                                                          100.9            95.6
                                                                               
Interest payable on defined benefit pension                48.7            48.1
scheme liabilities                                                             
                                                                               
                                                          149.6           143.7
                                                                               
Finance income:                                                                
                                                                               
Interest receivable on bank balances                      (2.1)           (2.2)
                                                                               
Other interest receivable                                 (0.3)           (0.6)
                                                                               
                                                          (2.4)           (2.8)
                                                                               
Expected return from defined benefit pension             (55.0)          (55.8)
scheme assets                                                                  
                                                                               
                                                         (57.4)          (58.6)
                                                                               
Net finance charges                                        92.2            85.1
                                                                               
Finance exceptional items (see Note 2)                    (4.7)          (23.2)
                                                                               
Total net finance charges                                  87.5            61.9

                                                                Attachment (q)

NOTES TO THE GROUP FINANCIAL STATEMENTS

continued

4. Taxation

                                                            2006           2005
                                                                               
                                                                       Restated
                                                                               
                                                              £m             £m
                                                                               
Current tax                                                 23.8           28.4
                                                                               
Deferred tax                                                 4.3          (4.5)
                                                                               
                                                            28.1           23.9
                                                                               
The tax on the Group's profit before tax differs from the theoretical amount   
that would arise using the weighted average tax rate applicable to profits of  
the consolidated companies as follows:                                         
                                                                               
Profit before tax                                          118.1           98.8
                                                                               
Tax calculated at domestic rates applicable to              45.8           39.6
profits in the respective countries at 38.8%                                   
(2005: 40.0%)                                                                  
                                                                               
Effects of:                                                                    
                                                                               
Income not subject to tax                                  (4.2)          (7.7)
                                                                               
Expenses not deductible for tax purposes                    23.7           21.0
                                                                               
Utilisation of previously unrecognised tax                (42.3)         (37.9)
losses                                                                         
                                                                               
Tax losses for which no deferred income tax                 16.9           15.8
asset was recognised                                                           
                                                                               
Adjustment in respect of prior years                      (11.8)          (6.9)
                                                                               
Current tax on profit (loss) before taxation                28.1           23.9

5. Dividends (equity)

                                             2006      2005      2006      2005
                                                                               
                                                                       Restated
                                                                               
                                        Per share Per share        £m        £m
                                                                               
Ordinary dividends:                                                            
                                                                               
2005/2004 final dividend                     6.0p      6.0p      47.2      47.1
                                                                               
2005/2004 interim dividend                   2.0p      2.0p      15.7      15.8
                                                                               
Total                                        8.0p      8.0p      62.9      62.9

The interim dividend of 2.0p per share was paid on 1 April 2005 to shareholders
on the register at the close of business on 4 March 2005. The final dividend of
6.0p per share was paid on 7 October 2005 to shareholders on the register at
the close of business on 9 September 2005.

Subject to the approval of shareholders, the final dividend of 6.0p per share
will be paid on 2 October 2006 to shareholders on the register at the close of
business on 21 July 2006. It is the Board's intention to apply the Scrip
Dividend Scheme to the final dividend.

                                                                Attachment (r)

NOTES TO THE GROUP FINANCIAL STATEMENTS

continued

6. Earnings per share

                                                            2006           2005
                                                                               
                                                                       Restated
                                                                               
Earnings per Ordinary Share is calculated using                                
the following:                                                                 
                                                                               
Earnings                                                  £86.1m         £75.4m
                                                                               
Underlying earnings                                      £127.4m        £105.0m
                                                                               
Basic                                                                          
                                                                               
Weighted average number of Ordinary Shares                786.8m         785.6m
                                                                               
Diluted                                                                        
                                                                               
Adjusted weighted average number of Ordinary              874.2m         872.8m
Shares                                                                         
                                                                               
The adjusted weighted average number of Ordinary Shares used in the diluted    
earnings per share calculations, 874.2m (2005: 872.8m), is the weighted average
number of Ordinary shares, 786.8m (2005: 785.6m), plus adjustments for dilutive
share options, 8.5m (2005: 8.4m), plus adjustments for convertible bond        
options, 78.9m (2005: 78.9m).                                                  

Reconciliation of adjusted earnings                                            
                                                                               
                                      Year ended 31 March  Year ended 31 March 
                                             2006                 2005         
                                                                               
                                             £m Per Share          £m Per Share
                                                                               
                                                             Restated  Restated
                                                                               
Earnings/basic EPS                         86.1     10.9p        75.4      9.6p
                                                                               
Dilutive adjustments:                                                          
                                                                               
Convertible bond - attributable              5.4   (0.3)p      (22.2)    (3.4)p
interest cost* and dilution                                                    
                                                                               
Dilutive share options - dilution              -   (0.1)p           -    (0.1)p
                                                                               
Earnings adjusted for effects of            91.5    10.5p        53.2      6.1p
dilution / diluted EPS                                                         

* Including fair value revaluation of convertible bond derivative liability
included within finance exceptional items.

Reconciliation from basic to underlying basic and underlying diluted earnings  
per share                                                                      
                                                                               
                                      Year ended 31 March  Year ended 31 March 
                                             2006                 2005         
                                                                               
                                             £m Per Share          £m Per Share
                                                                               
                                                             Restated  Restated
                                                                               
Earnings/basic EPS                         86.1     10.9p        75.4      9.6p
                                                                               
Exceptional items and amortisation:                                            
                                                                               
Operating exceptional items and           (4.0)    (0.5)p         9.9      1.3p
attributable taxation                                                          
                                                                               
Amortisation of music copyrights and       47.9      6.1p        45.8      5.8p
intangibles                                                                    
                                                                               
Impairment of music copyrights and          2.0      0.3p           -      0.0p
intangibles                                                                    
                                                                               
Impairment of goodwill                        -      0.0p         2.2      0.3p
                                                                               
Minority interest in operating              0.4      0.1p       (4.8)    (0.6)p
exceptional items and attributable                                             
taxation                                                                       
                                                                               
Minority interest in amortisation of      (0.3)    (0.1)p       (0.3)      0.0p
music copyrights and intangibles                                               
                                                                               
Finance exceptional items                 (4.7)    (0.6)p      (23.2)    (3.0)p
                                                                               
Underlying earnings / underlying          127.4     16.2p       105.0     13.4p
basic EPS                                                                      
                                                                               
Dilutive adjustments:                                                          
                                                                               
Convertible bond - attributable              9.5   (0.4)p         9.0    (0.2)p
interest cost and dilution                                                     
                                                                               
Dilutive share options - dilution              -   (0.1)p           -    (0.1)p
                                                                               
Underlying earnings adjusted for           136.9    15.7p       114.0     13.1p
effects of dilution / underlying                                               
diluted EPS                                                                    

                                                                Attachment (s)

NOTES TO THE GROUP FINANCIAL STATEMENTS

continued

7. Borrowings

                                                              2006         2005
                                                                               
                                                                       Restated
                                                                               
                                                                £m           £m
                                                                               
Non-current                                                                    
                                                                               
US$500m 8.375% guaranteed notes                              287.7        273.8
                                                                               
£325m 8.25% Sterling bonds                                   323.1        322.1
                                                                               
US$123.8m 6.96% senior notes (by instalments)                    -         48.7
                                                                               
US$243.3m 5.25% guaranteed convertible bonds                 121.1        107.4
                                                                               
€425m 8.625% senior notes                                    300.0        301.6
                                                                               
Long-term committed facilities*                              (1.5)        (1.9)
                                                                               
Term loan                                                      2.0          1.1
                                                                               
Finance leases                                                17.0         15.9
                                                                               
                                                           1,049.4      1,068.7
                                                                               
Current                                                                        
                                                                               
Overdrafts                                                    19.6         11.8
                                                                               
Term loan                                                      1.2          1.8
                                                                               
US$123.8m 6.96% senior notes (first instalments)                 -         16.4
                                                                               
Finance leases                                                 1.8          1.3
                                                                               
                                                              22.6         31.3
                                                                               
Total borrowings                                           1,072.0      1,100.0

* Includes issue costs of syndicated loan facility of £1.5m (2005: £1.9m).

The fair value of publicly traded borrowings has been calculated using the
appropriate market prices at the balance sheet date. For the borrowings which
are not publicly traded, the fair value has been calculated by discounting
their future cash flows at the appropriate market rate. The directors estimate
the fair value of the Group's borrowings to be as follows:

                                          Book value           Fair value      
                                                                               
                                           2006      2005        2006      2005
                                                                               
                                                                       Restated
                                                                               
                                             £m        £m          £m        £m
                                                                               
Loans and overdrafts                       19.6      11.8        19.6      11.8
                                                                               
US$500m 8.375% guaranteed notes           287.7     273.8       306.0     286.8
                                                                               
£325m 8.25% Sterling bonds                323.1     322.1       348.0     349.9
                                                                               
US$123.8m 6.96% senior notes                  -      65.1           -      39.4
                                                                               
US$243.3m 5.25% guaranteed                121.1     107.4       133.5     123.1
convertible bonds                                                              
                                                                               
€425m 8.625% senior notes                 300.0     301.6       368.1     347.0
                                                                               
Long-term committed facilities            (1.5)     (1.9)       (1.5)     (1.9)
                                                                               
Term loan                                   3.2       2.9         3.2       2.9
                                                                               
Finance leases                             18.8      17.2        18.8      17.2
                                                                               
                                        1,072.0   1,100.0     1,195.7   1,176.2

                                                                Attachment (t)

NOTES TO THE GROUP FINANCIAL STATEMENTS

continued

7. Borrowings (continued)

Year ended 31 March 2006                                                                           
                                                                                                   
                   Current Effective Within 1      1-2      2-3      3-4      4-5     More    Total
                   coupon  interest      year    years    years    years    years   than 5         
                    rate     rate                                                    years         
                                                                                                   
                                           £m       £m       £m       £m       £m       £m       £m
                                                                                                   
Non-current                                                                                        
                                                                                                   
US$500m 8.375%      8.375%     8.49%        -        -        -    287.7        -        -    287.7
guaranteed notes                                                                                   
                                                                                                   
£325m 8.25%          9.75%     9.92%        -        -    323.1        -        -        -    323.1
Sterling bonds                                                                                     
                                                                                                   
US$123.8m 6.96%      8.46%     8.63%        -        -        -        -        -        -        -
senior notes (by                                                                                   
instalment)                                                                                        
                                                                                                   
US$243.3m 5.25%      5.25%      9.3%        -        -        -        -    121.1        -    121.1
guaranteed                                                                                         
convertible bonds                                                                                  
                                                                                                   
€425m 8.625%        8.625%     8.94%        -        -        -        -        -    300.0    300.0
senior notes                                                                                       
                                                                                                   
Long-term                                   -        -        -        -    (1.5)        -    (1.5)
committed                                                                                          
facilities*                                                                                        
                                                                                                   
Term loan                                   -      2.0        -        -        -        -      2.0
                                                                                                   
Finance leases                              -        -        -        -        -     17.0     17.0
                                                                                                   
                                            -      2.0    323.1    287.7    119.6    317.0  1,049.4
                                                                                                   
Current                                                                                            
                                                                                                   
Overdrafts                               19.6        -        -        -        -        -     19.6
                                                                                                   
Term loan                                 1.2        -        -        -        -        -      1.2
                                                                                                   
US$123.8m 6.96%                             -        -        -        -        -        -        -
senior notes                                                                                       
(first                                                                                             
instalments)                                                                                       
                                                                                                   
Finance leases                            1.8        -        -        -        -        -      1.8
                                                                                                   
                                         22.6        -        -        -        -        -     22.6
                                                                                                   
Total borrowings                         22.6      2.0    323.1    287.7    119.6    317.0  1,072.0
                                                                                                   
Year ended 31 March 2005                                                                           
                                                                                                   
                   Current Effective Within 1      1-2      2-3      3-4      4-5     More    Total
                   coupon  interest      year    years    years    years    years   than 5         
                    rate     rate                                                    years         
                                                                                                   
                                     Restated Restated Restated Restated Restated Restated Restated
                                                                                                   
                                           £m       £m       £m       £m       £m       £m       £m
                                                                                                   
Non-current                                                                                        
                                                                                                   
US$500m 8.375%      8.375%     8.49%        -        -        -        -    273.8        -    273.8
guaranteed notes                                                                                   
                                                                                                   
£325m 8.25%          9.75%     9.92%        -        -        -    322.1        -        -    322.1
Sterling bonds                                                                                     
                                                                                                   
US$123.8m 6.96%      8.46%     8.63%        -        -     48.7        -        -        -     48.7
senior notes                                                                                       
                                                                                                   
US$243.3m 5.25%      5.25%      9.3%        -        -        -        -        -    107.4    107.4
guaranteed                                                                                         
convertible bonds                                                                                  
                                                                                                   
€425m 8.625%        8.625%     8.94%        -        -        -        -        -    301.6    301.6
senior notes                                                                                       
                                                                                                   
Long-term                                   -        -    (1.9)        -        -        -    (1.9)
committed                                                                                          
facilities*                                                                                        
                                                                                                   
Term loan                                   -      1.1        -        -        -        -      1.1
                                                                                                   
Finance leases                              -        -        -        -        -     15.9     15.9
                                                                                                   
                                            -      1.1     46.8    322.1    273.8    424.9  1,068.7
                                                                                                   
Current                                                                                            
                                                                                                   
Overdrafts                               11.8        -        -        -        -        -     11.8
                                                                                                   
Term loan                                 1.8        -        -        -        -        -      1.8
                                                                                                   
Short term element                       16.4        -        -        -        -        -     16.4
of long term loan                                                                                  
                                                                                                   
Finance leases                            1.3        -        -        -        -        -      1.3
                                                                                                   
                                         31.3        -        -        -        -        -     31.3
                                                                                                   
Total borrowings                         31.3      1.1     46.8    322.1    273.8    424.9  1,100.0

* Includes issue costs of syndicated loan facility of £1.5m (2005: £1.9m).

In July 2005 the Group signed a new £450m revolving credit facility with a
group of banks. This facility replaced a revolving credit facility (£250m), a
364 day facility (£100m) and the US$123.8m 6.96% senior notes. The bilateral
facilities (£40m) were also not renewed. The resulted in exceptional
refinancing costs of £5.2m (2005: £nil) of which £3.5m is in respect of issue
and repayment costs of the US$123.8m 6.96% senior notes and £1.7m in respect of
issue costs relating to the £250m revolving credit facility.

On 11 March 2003 Moody's Investor Service downgraded the Group's credit rating
from Baa2 to Ba1. As a consequence the coupon of the £325m 8.25% Sterling bonds
was increased from 8.25% to 9.75% with effect from 20 May 2003 and the coupon
of the US$ 123.8m 6.96% senior notes was increased from 6.96% to 8.46% with
effect from 21 August 2003.

The Group holds equivalent US Dollar nominal value interest rate swaps matching
the coupon and the term of the US$500m 8.375% guaranteed notes effectively
converting the interest basis of the issue to floating rate (set in arrears).

The Group holds equivalent Euro nominal value interest rate swaps matching the
coupon and the term of the €425m 8.625% senior notes effectively converting the
interest basis of the issue to floating rate (set in arrears).

                                                                Attachment (u)

NOTES TO THE GROUP FINANCIAL STATEMENTS

continued

7. Borrowings (continued)

At 31 March 2006, the Group had available £437.1m (2005: £349.1m) of undrawn
committed borrowing facilities in respect of which all conditions precedent had
been met.

The term loan of £3.2m (2005: £2.9m) was raised in the period July 2004 to
December 2005. Repayments will commence in August 2006 and will continue until
January 2008. The loan carries a floating rate of interest at LIBOR + 1.5%.

Overdrafts are unsecured, repayable on demand, and are charged interest at
variable rates.

8. Other provisions for liabilities and charges

                            Trading  Employee Acquisition   Disposal and   Total
                                     Benefits                fundamental        
                                                      and reorganisation        
                                                                                
                                              integration                       
                                                                                
                                 £m        £m          £m             £m      £m
                                                                                
At 1 April 2005                32.9         -         2.7            8.0    43.6
                                                                                
Currency retranslation          1.7         -           -            0.4     2.1
                                                                                
Provisions utilised          (13.8)         -           -          (7.3)  (21.1)
                                                                                
Charged (released)              6.4       0.3         2.4          (0.7)     8.4
                                                                                
Transfer from pensions            -       0.5           -              -     0.5
provision                                                                       
                                                                                
At 31 March 2006               27.2       0.8         5.1            0.4    33.5
                                                                                
Current portion:                                                                
                                                                                
At 1 April 2005                32.9         -         2.7            8.0    43.6
                                                                                
At 31 March 2006               27.2       0.8         5.1            0.4    33.5
                                                                                
Non-current portion:                                                            
                                                                                
At 1 April 2005                   -         -           -              -       -
                                                                                
At 31 March 2006                  -         -           -              -       -
                                                                                
Total:                                                                          
                                                                                
At 1 April 2005                32.9         -         2.7            8.0    43.6
                                                                                
At 31 March 2006               27.2       0.8         5.1            0.4    33.5

Trading

Trading provisions include royalty audit and other trading provisions charged
through profit from operations before operating exceptional items and
amortisation. They also include restructuring and reorganisation provisions
charged through operating exceptional items.

Disposal and fundamental reorganisation

This provision relates to the reorganisation costs for the closure and or sale
of EMI's manufacturing businesses in North America and Europe.

Acquisition and integration

This provision relates to acquisition and integration costs that were created
for earnouts.

Employee benefits

This provision relates to long term and termination benefits.