KPMG has issued a going concern warning against music giant EMI, the home of James Blunt and Take That, in accounts which reports say reveal the business lost more than £1bn in the year up to March 2009.

The warning comes in the accounts of Maltby Capital, the investment vehicle which owns the recording label for private equity house Terra Firma, run by Guy Hands.

There have been reports in the press that EMI could breach its banking covenants.

In its report KPMG said that the group's ability to continue as a going concern rested on continued banking facilities and complying with the covenants and that, in turn, relies upon the raising of further funds from shareholders.

KPMG also highlighted that a demand for more pension fund contributions to fill a deficit would exacerbate the funding difficulties faced by the company.

"These conditions...indicate the existence of a material uncertainty which may cast significant doubt on the group's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the group were unable to continue as a going concern," KPMG's report concluded.