Thorn-EMI 1995 Annual Report

accounts

Average number of employees
Operating assets

Operating profit

linancial highlights
for the year ended 31 March 1995
Turnover
Operating pro6t before operating exceptional items
Operating exceptional items
Operating profit
Non-operating exceptional items
Profit before finance charges
Finance charges
Profit before taxation
Prortt bcforc taratior, and erceptional items#
Net borrowings
Net cash inflow from operating activities
Capital expendirure - property, plant etc.
- rental equipment
- total
Earnings per share - fully diluted
Adjusted earnings per share - fully diluted*
Free cash flow per share*
Dividends per share
Return on salesf (continuing operations)
Capital expenditure as a percentage ofdepreciation
Interest cover*
Dividend cover*
Net borowings: Shareholders' funds (inc. Minority interests)
Net borowings; Capital employed
#PtoJtt b.fo/. tatation and erz?t;onal itNfit is stukd b.fole both opdating and non-o?aatina .te.ptio'ral it n'
'Adj$tcd&minss pa shan aadfrcc eashjoapct $an arc d.jn.duithi rt. Finn cial R.r;.s on ?agc' 6 to9.lnkl.st tolr.f i' d.fn.d a!
tb. n",,tb./ oJ tir".' opentinS lof't b.fo'. opdat;nS.reepnoial ik 't' i' seakl tha,'fnana etaccs. Dtu)id.sd .wa ;s d.J',.d at th.
"r bel of ifia tb. a4j'tst.dfill dikud ami4s ptr shatc i' g.atel tban rt. dit'idend' p./ JRttrn u salzs is d{taed as op.tuti"s ploftt b.fo/. op.tunns cn ptio"al;bnt as a pcl.dbg. "a/.. of b.,now.
Flnanclels
33 Financial contents
76 Five year summary
78 InYestorinformation
79 Summary of main
announcements
Buslncrs ovcrvlcw
8l Introduction
82 EMI Music
94 THORN
102 HMV

ETHoRN EMt
Annual General Meeting
THIS DO(UMENT IS IMPORTANTAND REQUIRES YOUR IMMEDIATE ATTENTION.
lf you are in any doubt about what action to take, you should consult your stockbroker,
bank manager, solicitor, accountant or other independent professional adviser immediately.
lf you have sold or transferred all your holding of Ordinary Shares in THORN EMI pl< please
send this document, together with the a

Other than the allotment of shares arising lrom scrip dividend elections, subscriptions to the THORN EMI
Personal Equity Plans and the exercise of options in respect of the Executive and Savings-Related Share Option
Schemes, the Directors have no current intention of using the authority given in order to allot further shares.
The authority will expire at the conclusion of the Annual General Meeting in 1996 or, if earlier, 15 months fion.r
the date fixed for the 1995 Annual General Meeting i.e. on 20 October 1996.
2. Purchase of own shares (Resolution 6)
The current authority given at the 1994 Annual General Meeting for the Company to purchase its own Ordinary
Shares expires at the conclusion of the 1995 Annual General Meeting.
At the present time, the Directors have no wish to exercise the power to purchase any of the issued Ordinary
Shares of the Company. However, they consider it is appropriate to continue to have the flexibility to do so.
Accordingly, they recommend that the power given to the Company at the 1994 Annual General Meeting in cert.rin
circumstances to buy in and cancel Ordinary Shares up to a maximum prescribed lirnit be renewed fbr a further period.
The Directors will only implement such purchases, which will reduce the issued share capital of the Company,
if they are satisfied, after carelul consideration, that these are in the best interests of the Company and all its
shareholders and would result in an increase in expected earnings per share. Furthermore, account will be taken of
the overall financial implications for the Company.
Resolution 6, which will be proposed as a Special Resolution, authorises the Company to purchase up to a
maxinum of42,812,367 Ordinary Shares, i.e. 10 per cetrt ofthe issued share capital ofthe Company, and provides
that the maximum price per Ordinary Share payable on any exercise of the authority shall not be more than 5 per
cent above the average of the middle market quotations for the Ordinary Shares as derived fron the Daily Official
List of the London Stock Exchange for the 10 business days prior to making any purchase. The minimum price
payable shall be 25 pence per Ordinary Share, being the nominal value of an Ordinary Share. For this purpose both
the maxinum and minimum prices permitted to be paid are exclusive of advance corporation tax payable by the
Company and expenses.
The authority will expire on 20 October 1996 or at the conclusion ol the Annual General Meeting in 1996,
whichever is sooner. lt is envisaged that the Directors will continue to seek renewal of the authority annually.
3. Scrip Dividend S(heme (Resolution 7)
The option fbr shareholders to take Ordinary Shares in lieu of a cash dividend continues to be o[ interest.
Accordingly, Resolution I which will be proposed as an Ordinary Resolution, authorises the Directors to oiler the
scrip dividend alternative in respect of the accounting relerence period ending on 31 March 1996.
4. Executive Share Option Scheme (Resolution 8)
The Directors are of the opinion that the 198,1 Executive Share Option Scheme ("the 1984 Scheme"), which expired
on 14 September 1994, has been most beneflcial in creating a greater union of interest between participating
employees and shareholders.
Accordingly, as indicated in the 199,t Annual Report, the Directors are now seeking shareholders' approval of a
new scheme, to be known as the 1995 THORN EMI Executive Share Option Scheme ("the Scheme"), to replace the
1984 Scheme.
Under the Scheme, the Remuneration Committee of the Board will have the ability to grant options to selected
employees of the Group, including the Executive Directors. The exercise of options granted under the Scheme will be
subject to the achievenent of perfbrmance requirements which will be set at the date of grant by the Remuuer.rtion
Conmittee. The Remuneratjon Committee is composed of all the Non executive Directors and myself, although of
course I take no part in any matters regarding my own participation in the Scheme. The Non-executive Directors did
not participate in the 198,1 Scheme and will not participate in the 1995 Scheme.

It is the Remuneration Committee's intention that the performance requirement for the exercise of the ftrst
options granted under the Scheme will be based on THORN EMI's Total Shareholder Return ("TSR") over the
measurem€nt period determined by the Remuneration Committee relative to the other companies comprising the
FT-SE 100 at the start of that period. TSR is the notional return based on share price growth plus the dividends paid
on a share and therelore it is a measurement of performance which, as closely as possible, reflects the return provided
to shareholders. To reflect the long-term share price position of THORN EMI and those other companies, the
calculation (both at the start and the end of the period) uses their share prices averaged over the preceding
12 months. The Remuneration Committee believes poor performance or failure should not be rewarded and,
accordingly, an option will only become exercisable if THORN EMI's TSR, on the appropriate date, is equal to or
better than the median of the original FT-SE 100 companies. This calculation is undertaken when the option would
frrst normally become exercisable (usually after three years) and if this perlbrmance requirement has not then been
met, the calculation will be repeated at regular intervals until either it has been met or th€ option lapses. If and when
this perforrnance requirement has been met, the option becomes exercisable for the remainder of the period
until it lapses.
Each year's Annual Report will set out the performance requirements established by the Remuneration
Committee subject to which grants have been made in that year.
In relation to UK employees, the Scheme will be submitted to tbe Inland Revenue for approval in accordance
with Schedule 9 to the Income and Corporation Taxes Act 1988. The percentage limit on the number of shares which
may be issued pursuant to the Scheme as compared to the 1984 Scheme has not increased. The Rules of the Scheme
have been prepared taking account ofthe current guidelines published by the investment committees represenling
institutional investors and it is intended that such guidelines will continue to be taken account of in operaring
the Scheme.
Additionally, the Directors are proposing in Resolution 8 that arrangements may be made to give the Group's
overseas employees the opportunity to participate in the Scheme or schemes similar to the Scheme but tailored
to local circumstances. Such arrangements will, however, operate within the limits on the issue of new shares as
approved by shareholders for the Scheme.
The principal terms of the Rules of the Scheme are summarised in the Appendix to this letter. Copies of the
Rules of the Scheme will be available for inspection at the Register€d Office of the Company during normal business
hours lrom today's date until the close of the Annual General Meeting and, on the day of the Meeting, at the place
of the Meeting fiom at least 15 minutes prior to the Meeting until its conclusion.
Action to be taken by shareholders
Shareholders will find accon.rpanying this document a pre addressed Form of Proxy for use at the Annual General
Meeting which they are urged to complete and return to the Company's registrar, Lloyds Bank Registrars, so as to
arrive not later than 48 hours before the time fixed lor the Meeting.
The return of the Form of Proxy will not prevent a shareholder from attending the Meeting and voting in person
if he/she is entitled to do so and so wishes.
Recommendation
Your Directors consider that the proposals set out above are in the best interests of the Company and its shareholders
in general. They recommend that you vote in favour of the Resolutions set out in the Notice of Annual General
Meeting, as they intend to do in respect oftheir own beneficial holdings.
Yours sincerely,
5ir (olln Southgate Chairman

Appendix
Summary of the 1995 THORN EMI Executive Share Option Scheme ("the S

(d) On exercise of options the Company may issue new shares to the participant or procure the ttansfer to him or her ofexisting
shares. Alternatively, the Company may, at its discretion, issue (at not less than par value) or procure the transler of that number
ofshares (or provide cash) equal in value to the difference between the option price and the market value of a share multiplied
by the number of shares over which the oPtion is exercised.
(e) Options may also be exercised in the event of a takeover, reconstruction, winding-up of the Company or demerger or
alternativell in the case of a takeover and with the agreement ofany acquiring company, existing oPtions may be exchanged for
options over the shares ofsuch acquiring company.
5. Adiustment of Optlons
On a variation ofcapital ofthe Company or demerger, the exercise price and the number ofshares subj€ct to the option may be
adjusted in such manner as the Committee determines.
6. Allotment and Transfer of Shares
(a) Upon the exercise ofoptions, shares will be issued or transferred at the exercise price unless the Company has exer.ised the
discretion referred to in 4(d). Such shares will not rank lor dividends payable by relerence to a record date f;lling before the date
on which the option is exercised but will otherwise rank pari passz with the existing shares.
(b) Application will be made to the London Stock Exchange for admission to the Official List ofshares that are to be issued
following the exercise ofoptions.
7. Amendments
(a) The Scheme will be governed by the Rules of the Scheme, which may be amended by the Committee save that no ameldment
to the advantage of existing or future participants will be made (except for minor amendments to benefit administration, to take
account ofa change in legislation and amendments to obtain or maintain favourable tax, exchange control or regulatory treatment
lbr participants or the Company or members ofthe Group) without the prior consent ofthe Company in general meetint.
(b) Subject to (a) above the Committee shall have full power to decide any matter relating to the Scheme'
UK Schedule
(a) The UK Schedule includes provisions modifying certain of the principal terms summarised above in order to meet the
requirements of the Inland Revenue for approval of options in accordance with Schedule 9 to the Income and Corporation
Taxes Act 1988.
(b) The aggregate number of shares over which Inland Revenue approved options may be granted to an employee under the
Scheme shall be limited so that the aggregate exercise price paid or payable for shares under Inland Revenue approved options
shall not exceed che greater of four times the emPloyee's relevant emoluments or I100,000.
(c) No amendment may be made to the approved UK Schedule without the prior approval ofthe Inland Revenue
Note
This summary sets out the principal terms ofthe Scheme but does not form part ofthe Scheme and should not be taken as
aflecting the interpretation ofthe Scheme's terms and conditions.The Directors reserve the right up to the forthcoming Annual
General Meeting to make such amendments and additions to the Scheme as they may consider appropriate, provided thrt such
amendments do not conflict in any material respect with the summary set out above.

Notice of Annual General Meeting
Notice is hereby given that the Annual General Meeting of THORN EMI plc will be held at the London Marriott
Hotel, Grosvenor Square, London rVl on Fridan 21July 1995 at 11.30 am for the following purposes:
l. To feceive and conslder the Diredors'Report and the Statement of Ac

7. Ordinary Resolution
THAT the Directors be and are hereby authorised to exercise the power contained in the Articles ofAssociation to
permit, to the extent and in the manner determined by the Directors, the holders of Ordinary Shares of25 pence
each in the capital ofthe Company to elect to receive new Ordinary Shares of25 pence each credited as fully paid,
instead ofthe whole or a part ofany declared cash dividend ofthe Company in respect ofthe accounting reference
period ending on 3l March 1996.
8, Ordinary Reiolution
THAT
i) the rules ofthe 1995 THORN EMI Executive Share Option Scheme ("the Scheme") produced in draft form to
the Meeting and for the purpose of identifrcation initialled by the Chairman thereof, the principal terms ofwhich are
summarised in the letter to shareholders dated 16 June 1995 which accompanied the Notice convening the Meeting,
be and are hereby approved and adopted subject to such further modifications as may be necessary to secure the
approval ofthe Commissioners oflnland Revenue thereto pursuant to Paragraph I ofSchedule 9 to the Income and
Corporation Taxes Act 1988 (as amended from time to time) and the Directors be and are hereby authorised to do all
acts and things necessary or expedient to secure such approval and to carry the same into effect; and
ii) the Directors be and are hereby authorised to adopt or amend any schedules to the rules ofthe Scheme or any
other schemes ("overseas schemes") providing for the grant to eligible employees ofthe Company and/or any ofits
subsidiaries who work outside the United Kingdom ofoptions to subscribe for Ordinary Shares of25 pence each in
the capital ofthe Company and corresponding in all material respects with the Scheme but containing such different
provisions as the Directors shall consider appropriate having regard to any securities, exchange control or trxation
laws or regulations or similar factors which may have application in relation to options so granted, provided that the
limits on the aggregate number of shares over which options to subscribe may be granted under the overseas schemes
and the Scheme shall be subject to the limits specifred in the Scheme.
By Order ofthe Board
Robin (harlton
Sec/etaDl
4 Tenterden Street
I-ondon Wl A 2AY
16 June 1995
Noter:
(a) Any Member ofthe Comp.rny entitled to attend and vote al the Meeting may appoint one or more proxies ro
attend and, on a poll, to vote on his/her behalf. A proxy need not be a Member. Forms ofProxy should be lodged
with the Company's registrar, Lloyds Bank Registrars, not later than 48 hours before the time for which the Meeting
is convened. Completion of the Form ofProxy does not prevent a Member from attending and voting in person if
he/she is entitled to do so and so wishes.
(b) Members are informed that copies of contracts of service between any Director and the Company or any of its
subsidiaries will be available for inspection at the Registered Offrce of the Company during normal business hours
from the date of this Notice until the close ofthe Annual General Meeting and, on the day of the Meeting, at the
place of the Meeting from at least 15 minutes prior to the Meeting until its conclusion. The Register of Directoff'
Interests will also be available for inspection fiom the commencement of the Meeting until its conclusion.

Adlurted fully
dlluted c.ralngs
Per rhar€
(pen.€)
Dlvldend
per sha?e
(p€nce)
Operating profit
before op€r.ting
ex(€Ptional ltems
per employce
(.)
The year's main developments
Sale ofTHORN Security Group.
Sale ofinterest in BabcockThorn.
Acquisition of Intercord in Germany.
Shareholding in Toshiba-EMI inJapan increased to 55 per cent;
Toshiba-EMI music publishing company acquired.
Acquisition ofUS Christian music company, Star Song Communications.
Sale of Automation Division.
Sale of Malco.
Accelerated exit from remaining Rumbelows electrical retailing operations in the UK.
Acquisition ofselected assets of Dillons the Bookstore.
Exit from defence electronics sector with completion ofSensors and
Defence Group sales.

Chairman's statement
The year was one ofexcellent achievement for the Group. It also marked the culmination of
a ten-y€ar strategy to restructure and reposition THORN EMI. With the divestment of th€
remaining businesses in Defence Electronics, THORN EMI now comprises thtee, strong
international businesses poised to deliver sustained growth in high quality earnings.
These three businesses - EMI,THORN and HMV - continued their upward trend in
performance with a combined 20.9 per cent increase in underlying operating profit to !461.3m
before exceptional charges.They also achieved an increase in return on sales from 10.5 to
10.8 per cent.
ln its seventh consecutive year ofoutstanding results, EMI Music reported profits up 19.8
per cent to f294.9m. THORN's progress in revitalising its worldwide rental business was also
reflected in an 18.0 per cent increase in profits to I152.4m. HMV continued to excel in all
markets, reporting an impressive 129.5 per cent rise in profits to €14.0m.
The overall improvement in the Group's strong underlying trading performance was
5ir €olin louthgate
reflected in a l9.l percent increase in operating profit to €455.4m before accounting for
exceptional charges. Exceptional charges include the impact ofcertain actions taken to strengthen
the Group materially in the future, the most significant ofwhich was the closure ofRumbelows,
and also reflect the effect ofthe early adoption ofFRS 7, the new standard covering accounting
for acquisitions. The adjusted fully diluted earnings per share increased by 179 per cent to 51.9p.
Net borrowings reduced by f58.3m to f363.3m, while interest cover continued to improve, with
an increase of4.3 times in the year to 14.3 times.
These strong results and the prospects for the Group in the coming yeaL tempered by the
Board's desire to rebuild dividend cover, is reflected in the recommendation ofan increase of
1.75p in the frnal dividend to 26.75p per share, bringing the total dividend for the year to 36.5p.
Dividend cover improved from 1.5 to 1.7 times.
Major divestments
The year saw a number of important divestments which marked a watershed in the Group's history,
leaving a clear field for the future development of our three businesses - EMI,THORN and HMV.
TheTHOnN EMI1994 Annual
R€port won the awa.d for
'8e5t Repo* aod A

created a pre-eminent Christian music company in one ofthe fastest growing segments ofthe US
music market.
Other moves to strengthen EMI's position in international markets included the acquisition
in July 1994, of the leading German independent record company, Intercord Tongesellschaft,
making EMI a leader in Europe's largest music market. A loint venture investment in a major pan-
Asian music television channel, Channel {V], based in Hong Kong will bring music television into
more than 50 million homes across Asia,India and the Middle East.
The opportunity to strengthen the HMV Group and create another income stream arose in
March 1995 with the acquisition from the receiver ofcertain assets and liabilities ofthe Dillons
bookstore business in the UK.The Group acquired 101 shops representing 90 per cent ofturnover
in the year to 3l December 1994. The retailing of music and books is very complementary. Dillons
is now a division of HMV, whose expertise in specialist retailing will be applied to improve both
the efficiency and profitability ofbook retailing.
Capital investment reached an all-time high at t652.2m, a 25.3 per cent increase over the
prior year, with all three businesses investing heavily. EMI invested {99.8m, ofwhich
approximately f78m was spent directly on productivity improvements, principally in
manufacturing and distribution and enhancing IT systems especially in North America; f504.9m
was invested byTHORN, ofwhich 14379m was in rental assets, and !35.0m was invested by
HMV in new and existing stores and in the implementation of lT and financial systems.
Further information on the financial impact ofthese and other transactions is given in the
Financial Review on pages 6 to 9.
Vv4rile the detailed operating reviews for our principal businesses are presented separately in
this Annual Report on pages 10 to 19,l would like to mention a few highlights here.
EMI Music
EMI Music remains one of the world's top music companies and continued to go from strength
to strength, with 30 albums achieving sales in excess of one million units in 1995. North America
achieved its best ever performance in sales and profits. Virgin Music Group, EMI UK, Europe and
International all reported record results, withJapan having strong sales ofboth domestic and
international repertoire. The company's recent investments in Eastern Europe - Hungary, the
Czech Republic and Poland - all traded profitably.
EMI's German music television joint venture, VIVA, performed extremely well prompting
the launch of a second channel, VIVA 2. Another joint venture investment, Channel [V], the pan-
Asian music television channel based in Hong Kong, and addressing the markets ofAsia,lndia
and the Middle East, is offto an impressive start. EMI also remained at the forefront of
investment in emerging technologies. New multimedia applications such as CD-ROM, Enhanced
CD, Digital Video Disc and the use of the Internet are all being developed by EMI to expand
its business.
EMI Music Publishing - the world's largest music publisher - had another record-breaking
EMI Music continued
to go from strength
to strength, with 3O
albums selling more
than one million
units last yea1.
year in both sales and profrts. EMI Music Publhhing UK is to be congratulated on winning a
coveted 1995 Qreen's Award for Export Achievement. This recognition ofthe great value ofthe
publishing business, taken together with the Export Achievement Award to EMI Records UK last
year, underscores the important contribution made by the UK music industry to the British

Chairman's statement
economy and to music internationally. EMI Music Publishing North America was named Pop and
Rl.rythm * Blues Publisher of the Year for an unprecedented sixth consecutive year by US
Billboard Magazine, and EMI Publishing artists won four ofthe eight 1994 MTV European
Writer/Artist Awards.
Overall, EMI continued to build its catalogue of music recordings and copyrights through a
broad range ofinitiatives during the year.It made great improvements to its creative managemenr,
developed category-speciflc strategies both to sign artists and market their recordings, and
brought forward new and innovative approaches to repertoire creation and marketing.With these
initiatives EMI's future continues to be one frlled with great opportunity for further growth.
THORN
The pace ofprogress accelerated atTHORN during the year resulting in an 18.0 per cent increase
in operating profit, and 6 per cent growth in the revenue value of the worldwide rental base. This
strengthening peformance reflects the transformation occurring in THORN's business as a result
of its strategic focus on the successful introduction ofnew financial and product offerings on a
worldwide basis as well as productivity improvement. THORN remains the only global operator
in the rental sector.
THORN Americas achieved an 11.5 per cent gain in agreements on rent - with a 6.9 per cent
increase in dollar operating profit in the fourth quarter- and continued to gain market share at
the expense of competitors,
In the UK, a milestone in the year was the achievement ofgrowth of over 2 per cent in the
revenue base, reversing several years ofdecline and reflecting the successful introduction ofnew
ownership options and THORN's extended product range. The 276 per cent increase in THORN
UK profit was achieved despite the losses incurred by the Rumbelows brand over the year and was
underpinned by strengthening revenue performance and productivity improvement in service
and distribution.
'With regard to Rumbelows, we are pleased to report that the closure has proceeded more
quickly and at lower cost than anticipated at the time ofthe announcement in February.The
agreement with Escom, the German PC retailer, whereby they assumed responsibility for 231
properties, underpinned a reduction from fl16.0m to f979m in the exceptional charge against
operating profit (before UITF3 goodwill and taxation adjustments). The closure ofRumbelows
allows THORN UK to fully focus its resources on its growth opportunities.
THORN Europe, helped by the continued growth ofthe Nordic businesses and productivity
measures elsewhere, delivered a strong result, with operating profit rising 30.0 per cent at constant
exchange rates and turnover up l6.l per cent.
Operating profit in Asia-Pacific rose, helped by a particularly noteworthy performance from
Australia where local currency profit growth was 19.0 per cent in a very competitive market.
As THORN's performance is demonstrating, millions of people around the world are
attracted to its highly flexible ownership options.Through continued high investment in market
research, the company is deepening its understanding ofthe aspirations ofdifferent consumer
groups in different economies in order to identily new or related areas ofopportunity and growth.
The overall aim is to provide customers, in widely varying circumstances, with easy access to an
ever increasing range ofproducts.

HMV
HMV continued its global expansion adding a further 22 stores in its malor markets last year,
bringing the total to 201 and extending the chain to Hong Kong. Markets outside the UK now
account for over half of the store network and 48.8 per cent of HMV's total music store turnover.
All markets enjoyed successful trading and contributed to the impressive 129.5 Per cent
improvement in operating profrt. HMVJapan, in particular, had an excellent year moving into
profit ahead of expectations.
The year's results confirm the continuing success of HMV's international approach to
music retailing based on the quality and skills ofits people and supported by investment in
sophisticated lT and finance systems to increase operating efficiency and profitability.
We welcome Dillons to the Group and are delighted that the integration ofthe l0l Dillons
stores acquired in March 1995 is proceeding according to plan. Now trading as a division of HMV
Dillons is expected to make a small positive contribution to profrt in the current year.
A wider responsibility
Overall, it has been a successful year folTHORN EMI's businesses and we are proud oftheir track
record. However, our definition ofsuccess includes more than strong financial performance:
businesses have responsibilities beyond their immediate commercial preoccupations. We
recognise that our business activities have a direct influence on the communities in which we
operate and on the environment on which we and future generations depend.tve are therelore
particularly pleased to report to shareholders on the good progress made during the year in the
areas of community relations and environmental management - two important areas of
Corporate activitywhich we also include as benchmarks ofgood business performance.The
relationship between a well-managed business and the communities in which it operates, as well
as good environmental performance, is now an important factor in the overall value ofa company.
An overview ofour community and environmental reports may be found on pages 2l to 27
In conclusion, THORN EMI today consists ofthree very strong businesses which compete
successfully on a global basis. Our strategy to date has been to grow EMI,THORN and HMV
through investment and by acquisition, creating high quality businesses delivering strong,
sustainable growth. Each is taking a vigorous approach to developing new markets and tackling
the opportunities presented by new technologies and products to create comPetitive advantage.
We have the vision, strategies and resources to continue to deliververy good returns for
shareholders.
On behalfofthe Board ofDirectors,l should like to congratulate every one ofTHORN
EMI's more than 33,000 employees around the world for their individual contribution to this
excellent year.
TheTHORN EMI
Environmental Reportwon
the 1994 award for'BGrt
f,nvironmental Report'
prerented by the chartered
Arso(iation of Certif ied
1.,
. :/-.i l^ _ !./r!Lu r _'" v
Sir Colin Southgate Chairman

Financial review
Simon Duffy
Group Finance
Director
Highlights
Operating profit before
operating ex

Operating profit
Operating profit before operating exceptional items increased by 19.1 per cent to f455.4m.
Continuing strong performances from the principal businesses resulted in increases of19.8 per
cent by EMI Music, i8.0 per cent byTHORN and 129.5 per cent by HMV Return on sales from
continuing operations increased from l0.l to 10,6 per cent (10.9 per cent after adjusting to reflect
a comparable basis forToshiba-EMI (TOEMI)).
(onsolidatlon of TOEMI
The change in the status of TOEMI fiom a 50 Per cent owned associate to a 55 per cent owned
subsidiary halfuay through the year inevitably renders year-on-year comparisons diffrcult.
TOEMI's return on sales is slightly below that of the re st of EMI, but of itself this would
only have had a minimal impact on the overall margins of EMI. However, the accounting imPact
ofthis change in TOEMI's status is to reduce EMI's reponed return on sales from 14.6 Per cent to
13.5 per cent. Had the change taken place at the beginning ofthe year, the reduction in return on
sales would have been 1.8 per cent.
This accounting impact arises from the fact that the change in TOEMI's status from associate
to subsidiary means thatTHORN EMI's turnover has been augmented by the full amount of
TOEMI's revenues while the Group's operating profit has been increased only by the 50 per cent
ofTOEMI's profit that was not already incorporated when it was an associate.
Exceptlonal items
Exceptional items have been divided into two categories - oPerating and non-oP€rating.
The f13.0m ofrationalisation and integration costs have been disclosed in accordance with FRS 7
as operating exceptional items as noted in the paragraph on changes in accounting policies on
page 6.We have categorised the exit from the remaining Rumbelows stores (cost: €113.9m) as an
operating exceptional item since, despite its size, we did not feel that Rumbelows was any longer
sufficiently separable fiom the rest of THORN UK to satis$' the criteria ofFRS 3.

Financial review
Other exceptional costs, amounting to €25.6m and reflecting the results ofour disposal
activities have, as in previous years, been classified as non-operating exceptional items.The
f,25.6m is calculated after charging €31.5m ofgoodwill that had previously been written off
against shareholders' funds on acquisirion.
Finance charges
Net finance charges reduced by 17.0 per cent to f31.8m. The net beneficial impact ofacquisitions
and disposals (f4.lm), strong underlying cashflow (f4.9m) and the full year beneflt oflast year's
Redeemable Convertible Preference Shares (RCPS) conversion (!4.2m) were partially offset by
the impact ofhigher interest rates (i5.4m) and the financing ofthe EBT (fl.7m). Interest cover has
continued to improve and now stands at a very healthy 14.3 times (1994: 10.0 times).
Taxation
The tax charge offl57.6m includes f7.3m relating to exceptional items.Tax on underlying
operations is ther-efore €150.3m at an underlying rate of 35.5 per cent (1994: 34.4 per cent).
The increase in the underlying tax rate is due to the consolidation of TOEMI's profits for
the second halfofthe year, taxed at a higher rate inJapan.
With most of the Group's profits coming from outside the UK, we continue to w te off
significant amounts ofadvance corporation tax.The write-offin the yearwas f30.4m, bringing the
cumulative total to f140.0m.This amount will be available for future use against the UK
corporation tax charge.
Earnings
Adjusted fully diluted earnings per share increased by 179 per cent to 61.9p. Adjusted earnings
exclude the impact ofboth operating and non-operating exceptional items and therefore provide
a better understanding ofthe underlying trading performance ofthe Group on a normalised basis.
A reconciliation ofthe basic and adjusted earnings is provided above.

Cash flow and borrowlngs
It is not evident from the statutory consolidated cash flow statement on Page 41 as to why our
borrowings have fallen by f58.3m from f421.5m to !363'3m.The reconciliation from the
statement on page 41to the movement in borrowings is shown above.
The main driver behind the reduction in borrowings was a 26.7 per cent increase in net cash
inflow fiom operating activities to f938.8m, reflecting the strong growth in underlying operating
profit as well as tight working capital management. This, togetherwith disposal proceeds of
f80.4m and inflow ofi80.7m from the sale of tangible fixed assets, enabled us to finance both an
increase in capital expenditure of€131.7rn(to [.652.2m) and expenditure on acquisitions of
!l12.2m,while still showing an improvement in the GrouP's financial position.
Treasury pollcles
During the year the Board approved an updated set ofpolicies for, inter alia,the management of
interest and exchange rate exPosure, counteryarty risk,liquidity and liability management and the
use offinancial instruments, including derivatives.The purpose ofthe policies is to ensure both
that the Group has adequat€ access to funds at all times and that tlansactions are only undertaken
by Group Treasury when it is necessary to manage risks that arise from the Group's trading and
investment activities. Treasury continues to operate as a cost centre and will not undertake any
speculative activities.
Controls and monitoring systems arc in place to ensure that allTreasury activities are
undertaken within the parameters laid down by the Board.
Slmon Duffy Group Finance Director

EMI
a repeat
performance
Country supc.3tar carth Brook5
andVirgln's S(arfa.e.
EMI Music achieved record results for the seventh consecutive year, as sales climbed to
f2,189.0m and operating profit before operating exceptional items rose by 19.8 per cent to
f294.9m. Return on sales excluding the impact of Toshiba-EMI increased to 14.6 per cent.
Thirty albums had sales ofmore than 1 million units,led by superstars Garth Brooks,The
Beatles,The Rolling Stones, Pink Floyd, Roxette, Bob Seger, Frank Sinatra,Yumi Matsutoya
and the Beastie Boys. EMI's impressive results also reflected substantially increased catalogue
sales; the company's growing pre-eminence as a music publisher; and the unprecedented
success ofthe company's promotional partnership with McDonald's.
EMI Record5 Group North Ameri(a
EMI Records Group North America enjoyed its best year ever in both sales and profits.
Garth Brooks "The Hits" topped the US Billboard Album chart for eight weeks and sold
"Llve at the BBC" by The
Beatles and "The Dlvlilon
Bell"by Plnk floyd werc
amoog 3(, albums whlch 3old
moae than one mlllion unltt
laityear.
6.6 million copies worldwide. Releases from a wide range ofestablished artists - including
Grammy-winner Bonnie Raitt, the Beastie Boys,The Beatles, Megadeth, Qreensrj;che, Frank
Sinatra,Jon Secada and Bob Seger- all performed strongly.In addition, North America had
success with emerging artists including Mazzy Star,Joshua Kadison and Luscious Jackson. Capitol
Records, EMI Latin, Angel and EMI Canada each had record years. EMI's partnership with
McDonald's produced sales of 8.9 million units while raising almost $10m for Ronald McDonald
Children's Charities.The promotion stood out as an innovative vehicle to utilise the wide reach
ofpopular music to raise charitable funds and helped achieve great exposure for an array ofEMl
artists: superstars Garth Brooks, Tina TUrner, and Roxette; a group of EMI's hottest Latin stars;
and Us3, who were featured in a hip-hop compilation.
Virgin Muslc Group
Virgin Music continued to perform exceptionally well, Grammy-winners The Rolling Stones
*Voodoo Lounge", the group's first album forVirgin, sold more than 4.5 million units worldwide,

strengthening
the business
worldwide
making it one of The Stones' best-selling albums ever.Virgin's new rap music label Noo-Trybe
scored a big success with Scarface, which reached No. 3 on the US Billboard chart and sold more
than I million units. Releases from Smashing Pumpkins, Simple Minds, Enigma and a number of
successful compilation albums in the UK also contributed to Mrgin's success.
Internationally,Virgin artists continued to achieve success. Artists such as Alain Souchon,
IAM, and Renaud in France;Enigma andThe Bates in Germany; Riccardo Cocciante in Italy; and
Nacho Cano in Spain all performed extremely well.
EMI Records UK & Eire
In the UK, EMI continued to enjoy excellent results. The Beatles "Live at the BBC", reached No. I
in the UK chart and sold more than 5 million copies worldwide. Also contributing were successful
releases from Pink Floyd; the "NowThaCs \X/hat I Call Music" series with combined NOV 27 and
NOV 28 sales totalling 2.7 million; and the new rock sensation BIur, who reached No 2 with
"Parklife" and won four Brit Awards, including Best Single, Best Album, Best Video and Best Band.
EMI lnternational
International sales were very strong. Maior EMI international successes included Pink Floyd's
"The Division Bell", which reached No. I in all major European markets, and Roxette's "Crash !
Boom ! Bang!'which reached the top 5 in the UK, Germany, Sweden and Spain. Other strong
international performers included UK artist Sinead O'Connor; Magic Affair in Germany; Yumi
Matsutoya, Tomoyasu Hotei, Aska and Kyosuke Himuro inJapan; Eric Moo in Taiwan and
Ricardo Montaner in Latin America.The EMI BRAVO series of compilations in Germany sold
more than 3.5 million units.
A particular high point has beenJapan where strong sales ofboth domestic and international
repertoire were reported.Yumi Matsutoya's "Dancing Sun" album and Tsuyoshi Nagabuchi's
"Best of" album reached No. I and No.2 in the charts respectiveln while sales ofthe "NOri(/2"
compilation, the Norwegian actTrine Rein and British act Shampoo exceeded forecasts.
EMI ne.ordr G?oup North
Amerl(a enioyed lts best yeat
ev€rwith hlt. ftom a wlde
range of artlrtr, ln.luding
the Beaiti€ 80)13,"lll
(ommuni(atlon", lon Se

strong
releases
Steven Crlftls Chapm.n
EMI Classlcg
EMI Classics enjoyed continuing strong sales from the 1993 release ofCanto Gregoriano by the
Benedictine Monks ofSanto Domingo. In August, EMI Classics signed a major contract with
world-renowned cellist and maestro Mstislav Rostropovich for his frrst-ever recording ofthe
lnt€rnation.l su

Other business developments
EMI made several strategic investments during the year to position itself for future growth. EMI,
along with three other music companies, made a joint venture investment in Channel [V], a
24-hourAsian music video channel on the Hong Kong-based StarTV. Channel [V] currently
broadcasts to more than 50 million homes across Asia,lndia and the Middle East, regions with
huge grolvth potential.In North America, EMI created the music industry's pre-eminent Christian
music group through the acquisition of Star Song Communications - which, along with EMI's
Sparrow Records, became the EMI Christian Music Group - and the formation ofChordant
Distribution, distributing the leading artists in Christian music through EMI-owned labels as well
as all distributed labels, including Forefront, Warner Alliance, GospoCentric and others.
EMI was active on a number of other inyestment fronts. It acquired lntercord
Tongesellschaft, the leading independent record company in Germany. EMI firmly established
Virgin's start-up label Noo-Trybe as a formidable player in rap music while also acquiring the
rights to the recordings ofseveral artists ofthe rap music label Rap-A-Lot.
Internationalln EMI gained controlling interest in Toshiba-EMI which, with the full
Among rtrong lntern.tional
performels for EMlwere
ln lap.n, and G€rmany's
MaglcAffair.
acquisition of the Toshiba-EMI music publishing compann will allow EMI to strengthen its
Norway'sTrlne Rcln (top),
position as the No.2 music company inJapan, the world's second largest music market.
who.(hl€Ycd strong saleg
Continuing its global expansion, EMI also started an operating company in Poland, purchased a
controlling interest in a Philippines company and will be opening companies in the Middle East
and Colombia over the next several months.
lim Flfield Presjdent and Chief Executiue Officer. EMI Music

increasing Pace of
THORN achieved a record operating profit before operating exceptional items off152.4rn,
up 18.0 per cent on the previous year. This strong performance was reflected in continued
improvement in return on sal€s to 9.6 per cent, compared with 8.7 per cent in 1993/94.
The increasing pace ofprogress was also demonstrated by the growing revenue value ofthe
worldwide rental base - which was up 6 p€r c€nt at 31 March 1995 conpared with the prior
year-end.These results confirm the continuing benefrs flowing from cost effrciencies and
the successful introduction in recent years ofnew propositions coupled with the expanded
product range. Overall,THORN is confident of further strong profit growth in the current
financial year.
The decision to effect an accelerated exit from the remaining Rumbelows electrical retailing
operations in the UKwas announced in February 1995. Store activity had ceased byyear-end.
This decision is reflected in an exceptional charge against op€rating profit amounting to f97,9m
(before UITF3 and attributable taxation adiustments); this represents a significant saving to the
estimate disclosed on the announcement date.This rationalisation is expected to secure an
estimated incremental profit contribution offl5m in 1995/96 and allows the skills and resources
in THORN UK to be concentrated on attractive grou,th opportunities.
Moves to increase effectiveness throughout the business continue. From 31 Mardt1995,a
single management structure (THORN Europe) has been formed to run all operations in
Continental Europe and the UK.This structure improves our ability to realise the significant
synergies across the European operations and thereby increase our competitive strength.
Amerlcas
THORNAmericas achieved a solid gain in agreements on rent over the yeat despite the
competitive conditions evident in the industry. At 31 March 1995, agreements on rent were 11.5
per cent ahead ofthe prior year- with the great bulk ofthe increase attributable to organic growth

lnnovations,
new frontiers
- and market share further improved to 34 per cent from 31 per cent. As predicted, profrtability
was constrained by the investment in aggressive marketing activities and increased store stafftng
and training (which will be maintained at these higher levels to reinforce operational standards).
Additional spending was also allocated to the vigorous defence ofthe legal status ofthe rentalpurchase
transaction, research into related market opportunities and the development ofa new
store operating system.
The US business now has 1,109 company-owned stores (with a further 173 franchised).
Together these span 49 states and the District of Columbia.The Canadian chain achieved much
improved results over the year and is now undergoing rapid expansion, having grown to 15 stores
by 31 March 1995, compared with nine at the previous year-end.
Overall, dollar operating profit grew by 6.9 per cent in the final quarter versus the same
period last time, but was little changed over the full year, following dull results in the frrst nine
months. Despite the high levels ofrevenue investment planned,THORN Americas projects
continued profrt growth in the current financial year, although it is not anticipated that the
growth rate will match that ofearlier years.
utld€

Reshaping
business
NewZealand was established in the final quarter to improve overall efficiency without detracting
from the business focus. Elsewhere, the business in Hong Kong achieved further profit growth in
local currency through tight cost control while testing a new proposition aimed at the hirepurchase
seginent.
Europe
THORN Europe operating profit rose 30.0 per cent at constant exchang€ rates, helped by earlier
restructuing activity as well as the continuing success of the recently launched new propositions.
At 31 March 1995, total domestic rental and credit agreements were 3.1 per cent higher than the
prior year, while Institutional sales remained buoyantwith a 4.6 percent increase in units on rent
over the year. The performance ofthe Danish business was excellent, with like-for-like sales in the
(lary George" "New 8uy
Scheme' qnderplnr lt'.t.on9

Focusing
o" growth
units on rent.This reversal ofthe revenue decline apparent in recent years reflects the successful
introduction ofthe Option-2-Own proposition combined with the extended product range: rentto-own
contracts accounted for 50 per cent ofrental revenues arising on new installations over the
year.rVith encouraging volume performance in PCs, home enteltainment centres and mobile
phones, THORN UK further improved its market share of all installations to 54.8 per cent from
60.4 per cent in the previous year.The CrazyGeorge's concept, launched in April 1994 to meet the
needs ofcash and credit constrained households, has proved extraordinarily successful.It was
pleasing that, of the six stores operating by the year-end, two were already trading profitably. A
further 22 stores are planned for1.995/96.
Closure of Rumbelows retail operations
It was announced in February 1995 that the UKbusiness would make an accelerated exit from
the remaining Rumbelows stores, the trial Fona concept and certain in-store concessions, with
consequent rationalisation ofservice, distribution and administrative support facilities. Store
activity had ceased, ahead of schedule, by 31 March 1995. Of the 321stores,2TI are being sold to
third parties, 30 have imminent lease ends, 19 are being transferred to Radio Rentals or Crazy
George's, leaving just one still available.This satisfactory outcome was particularly helped by the
acquisition of231 stores by Escom AG (the German-owned PC retailer). It was also heartening
The avallability of the
d.nMAX proposltion a.roir a
wide produd range has be€n
w€l

HMV
customer-driven
performance
An almost 130 per cent year-on-year improvement in operating profit before operating
exc€ptional items to f14.0m marked another year of important progr€ss by HMV, with sales
up by 24.6 per cent to f503.2m and an average like-for-like sales increase of9.0 per cent.
Approximately 50 per cent of HMV's music store turnover was gen€rated by its operations
outside the UK, which accounted for 108 ofits total chain of201 stores. All markets
contributed to HMV's impressive performance.
HMV's organic growth continued, with a further net 22 new stores being added to the chain
during the year. Investment in new stores was made in all its major markets. HMVJapan
successfully extended its reach into the Osaka and Nagoya markets. In Canada, HMV has
continued the development ofthe British Columbia market, while strategically in-frlling in local
Drawing th€ (rowds - HMv"
new taPanere Jtorer.t
Shiniuku,Tokyo (top).nd
Nagoya.
markets with further good potential. HMV UK successfully completed major re-siting of stores in
several important centres.
HMV opened its fust store in Hong Kong during the year. It is encouraging that its
performance has been well ahead oforiginal expectations. In Australia, HMV expanded its
operation in New South Wales and is well placed for future inter-state growth.
HMV USA brought another four stores into operation: in Downtown Boston; Avon,
Connecticut; Georgetown, Vashington; and Atlanta, Georgia, bringing its total network to seven.
It was particularly pleasing that the US music industry voted HMV USA Retailer ofthe Year in its
category for the second year running.
The introduction ofthe highly effective, purpose designed 'Track' point-of-sale and stock
management IT system continued during the year. It is now present in all major markets.
Substantial progress was made in introducing a common worldwide finance system to increase
operating efficiency.
The year's results confirm the continuing success of HMV's imaginative approach to
attracting and satisfying the interest of music lovers, backed by investment in carefully chosen

locations,IT support, and in developing the skills and knowledge ofits people.
HMVwelcomed the UK bookshop chain, Dillons, incorPorating Hatchards and (in Ireland)
Hodges Figgis, into the opelating group from the beginning of March 1995, following its
acquisition byTHORN EMI. HMV's expertise in specialist retailing will be applied to develop
Dillons as a profrtable second business stream alongside the record retailing operations.
Stuart McAlllster Chairman and Chief Executive, HMV
The 8o5ton, Mass.

lnvestih$ in tomorrow's world...
CRL turnover by reglon
New horizons in technology innovation
In three years, our research centre - CRL - has fundamentally changed
direction. It now operates as a research and development business, pursuing the most
appropdate commercial routes for exploiting its innovations and know-how.
Tl.ris concept closely links research rvith market opportunity whether through licensing or
marketing its new technologies, or through other forms ofthird party collaboration. It has created
a strongly commercial research operation - sales outside THORN EMI last year rose by 170 per
ln on€ of thes€'identiGal'
images a CRt-invented
technique har embedded a
Gode, invi5ible to the naked
eye.ln both movlng and itill
imager, the code is repli

Caring for our communities
and the environment
Contrlbutiont from
worldwide activities
Businesses have responsibilities beyond their immediate commercial preoccupations that
should not be ignored.THORN EMI recognises that our responsibility extends not only to
our shareholders, but also to our stakeholders. The health ofthe communities in which we
operate around the world, and the well-being of the environment on which we and future
generations depend, rely on sustainable competitive performance and development.
In THORN EMI this commitment is reflecte d at every ler-cl of our orgrn r'.r rior. rn a \'-r ictv
ofways appropriate to each business, and by the efforts and concern ofour pcople.
'We regard our continuecl business success as being interdependent rvith the cconomic ancl
social well-being ofthe conmunities in which we operate.lVe estinate that last year, the value oi
the conmunit,v support byTHORN EMI and its businessel, through donations, sponsorships,
lund-raising initiatives and practical assistance, exceeded 19.5rr a frgure which cannot take ilto
account the time, enthusiasm and involvenrent given bv our cmployees around the u'orld to
projects both largc and small, national and local.
THORN EMI also belicves that we have a duty to report on cnvironmental issues as part of
our financial reporting. Wc are confident that the relationsl-rip bctween a u'ell rnan:rgecl business
and good environmental perfbrmance will, in the luture, become a kcf iactor in the overall value
ofa company. Therelbre, while continuing to publish a seprrate, detailed Environrneltal Report
as we have done in the previous trvo years,l'e give highlights, starting or-r page 2,:1, ofthe
continuing progress of ourGroup-wide environmental policy.
(above, left) Helping proieds
big and rmall - from
Australia" Aankria
Environmental Edu

A ta rg eted programme of
community support
THORN EMI
helped
Worldwide spend
(Dire

Principal beneficiariet worldwide include:
Aurfu alia Eaak5iJ Environmental f oundation
Erazil A.tion to citizens
(anada Kids Help Phone, NationalTree Plr n
Cermany Nordoff Robbin, Mu5i. Iherapy
lapan 5hinjuku Ward welfare Foundation
Malayria Nalional W€lrare Foundation
New Zealand Deaf 455ociatio.
5outh Afri

Prog ress towa rds
env:ronmental improvement
Envlronmental
rerPonrlbilltles
Priorlty issuei
lMl Mu5i< m.nufacturlng ir.pptttng

Setting targets
monitoring performance
Envaronmental
expendlture
(apital expenditure
fl.48m
Operating corti analyslt
TllORl{ EMI won thel994 atya.d
f or'Bett Envlronment.l RcPotl'
prerent€d by the Ch.rtc.ed
Atio(i.tlon of Certlf l€d
Ac.ount.n$ whlch, in 1994,
alio rcle

controlling key impacts
CO, emifted due to energy
ure in buildings per unit
turnover (tonnes/trI million)
ilx
llr
or. ..^o\d
I rsgr
I rggl
I rccs
CfC ure (kglyear)
I rgqr
f 'egt
I rggs
co,
carbon dioride is a maior
cau re of global warming
Ot
Ozone fourd in th€ earth't
upp€r atmorpher€ prorects
all forms of lif€ by {iltering
out the iun'! harmful
tn*rrql/ i r.'.rl:+r:;!tt;oil The combustiorr offossil fuels is the predominant source ofglobai
energy supplies. The resulting ernission ofcarbon dioxide (CO2) is a majorcause ofglobal
warming. In addition enrissions of sulphur and nitrogen oxides cause 'acid rain'. The energv
cor.rsumed bvTHORN EMI in its buiidings and manuficturing plants generated approxinately
2,42,000 tonnes ofCOl last year. Although energ,v use has increased as the business has grorvn,
signiltcant inprovements in energ;'elficicncy have been m;rde. Our aim is to cotrtinue to achieve
an overall reduction in energy consumption rclative to the Group's increlsJng tur nover.
C i{ .r}.rt{, Ozone (Oj), in the upper atmosphere, protecrs all lorms of life by filtering out the
sun's harmful ultra violet ra,vs. The emission ol CFCs (chlorofluorocarbons) contributes to
depletion ofthe ozone layer.
THORN EMI presently uses CFCs in the refurbisl.rment of reliigerarors and in the
cFc
Chlorofluorocarbon5

The ultimate aim a
sustainable future
VOC uJe (tonner,/year)
& rccn
I rgss
Generation of hazardous
waste (tonnertear)
R
Fi - l;;:
ll. r::ji:::",i.
"o+;|1,'a'"
While THORN EMI will continue to set and report on environme ntal targets and
performance, it is the broader issues surrounding sustainable development that need
to be addressed to secure the futur€ for generations yet to come.ITe have identifred the
concepts of eco-efficiency and social sustainability as key routes in our drive towards
sustainable development.
No organisation can hope to achieve such goals unilaterally. Being ecologically and
economically efficient - eco-efflcient - requires connitment lrom business, and support and
enabling fiameworks fiom governnrents and ftnancial markets. At a local levcl social
responsibility can be developed through the community by ibstering conmunal links and
participating in joint projects with local groups.To respond to global inequalities both social
and economic - requires international co-operation with deveioping nations to transfer best
environmental practice.
THORN EMI believes that long-ternr profitability and growth depends on planning for
change, and a readiness to alter business practice to reflect social shifts in which er-rvironmental
considerations are an increasing inlluence.
Sustajnability prese nts a major challenge. We regard business commitment as instrumental in
the development ofinnovative alternatives to unsustainrble practices, and aim to lead the drive
towards sustainabilitv in our business sectors.
Over IOO,OOO tr€€r were
dirtributed when HMv
Canada, in partn€rrhip with
Tr€e Plan Canada, offered

Board of Directors
Sir Colin Southgate Choirmon
Sir Colin (55) was appointed Chairman in 1989. He joined THORN EMI in 1983 after 22 years in the
information technology industry and was appointed to the Board in 1984. He became Managing Director in
1985, and ChiefExecutive in 1987, relinquishing both positions in 1993. He is Non executive Chairman of
PowerGen, a Director ofthe Bank ofEngland and Depury President of the CBL
Simon Duffy Croup finonce Director
Simon Duffy (45) was appointed to the Board in February 1992 on joiningTHORN EMI lrom United
Distillers, where he had been Operations Directorsince 1989, having previouslybeen Director of Corporate
Finance at Guinness PLC since 1986. He is a Non-executive Director ofGartmore plc-
,ame' Flfleld BBA MgA President ond Chief Executive Officer, EMI Music
Jim Fifreld (53) was appointed to the Board in 1990. He joined EMI Music in 1988 and became President
and CEO in 1989. He served as President and CEO of CBS Fox from 1985 ro 1988. Prior ro thar he was an
Executive Vice-President ofGeneral Mills,where he pursued a 20-yearcareer. He is a Director of
lnternational Multifoods, the International Federation ofthe Phonographic Industry (IFPI) and
The Rhythm and Blues Foundation.
Michael Metcalf BSc. EcA Ch ief Executive, TH ORN
Mike Metcalf(43)was appointed to the Board in 1989 as Group Finance Director, a position he held until
January 1992 in parallel with his appointment to his present position inJuly 1991. He joinedTHORN EMI
in 1985 and became Deputy Group Finance Director in 1988. He was previously a divisional Finance
Director with United Biscuits Group. He became a Non-executive Director ofNorthern Foods plc in
August 1994.
Slr Peter Walters Non-executive Deputy Choirmon
Sir Peter (64) was appointed to the Board in 1989 and became Deputy Chairman in 1990. He is Chairman of
Blue Circle Industries, Chairman ofSmithKline Beecharn and a Deputy ChairmaD ofHSBC Holdings. He
retired in March 1990 as Chairman ofBritish Petroleum, which he joined in 1954.
Sir Graham Day Non-executive
Sir Graham (62) was appointed to the Board in 1990. He is Counsel to Atlantic Canada law firm, Stewart
McKehy Stirling Scales and is Chancellor ofDalhousie University.The former Chairman ofCadbury
Schweppes and ofPowerGen, he is a Director ofcompanies in the UK, Europe and Canada, including the
Laird Group,The Bank of Nova Scotia, Extendicare Inc., NOVA Corporation, John Labatt Ltd, Nova Scotia
Power Inc., Empire Company Ltd and the Shaw Group-
Dr llarald Einsmann Non-executive
Harald Einsmann (61) was appointed to the Board in May 1992. He is a member ofProcter& Gamble's Main
Board and a member ofits Ex€cutive Committee. He began his career with Procter & Gamble in 1961 and
was appointed President, Europe, Middle East and Africa in 1990, with responsibility for operations in
37 countries.
Lord Grifflths of fforertfach Non-executive
Lord Griffrths (53) was appointed to the Board in 1991. He is an International Adviser to Goldman Sachs, a
Director ofHerman Miller Inc., Times Newspapers Holdings,TeleVest Communications and Servicemaster
Inc., and Chairman of the Centre for Policy Studies. He was Head ofthe Prime Minister's Policy Unit from
1985 to 1990 and is a former Director ofthe Bank ofEngland-
Eri< Nlcoli Non-executive
Eric Nicoli (44)was appointed to the Board inJuly 1993. He is Group ChiefExecutive ofUnited Biscuits
(Holdings) plc. He joined United Biscuits in 1980, was appointed to its board in 1989 and assumed his current
role in January 1991. He is a Deputy Chairman ofboth Business in the Community and the PerCent Club.

Corporate Governance
In previous Annual Reports, I have described how I, as Non-executive Deputy Chairman, and my
fellow Non-executive Directors carry out our responsibilities to ensure thatTHORN EMI
measures up to the issues which, together, are regarded as representing 'good corporate
governance'. An important way in which we exercise these responsibilities is through three
committees: the Audit Committee, the Remuneration Committee and the Nomination
Committee. I chair th€se committees which are formed either exclusively by Non-executive
Directors, or on which Non-executive Directors form the majority ofthe membership.
Our overriding duty as Non-executive Directors is to ensure that the procedures followed by
the Company and the decisions which the Board takes reflect the best interests ofthe Company's
shareholders and its other stakeholders, The effectiveness ofourcommittees in achieving this is
not simply a function oftheir terms of reference. It is also greatly influenced by the strongly
independent opinions which we, as Non-executive Directors, bring to their deliberations, based
upon the extensive experience each ofus has gained from ourwidely differing backgrounds. Our
role is to be supportive of the management of THORN EMI but at the same time to vigorously
challenge its assumptions and objectively monitor its performance.
One ofthe issues which is attractingwide topical attention is that ofexecutive remuneration.
The Remuneration Committee which I chair and which, apart from the Chairman, comprises Nonexecutive
Directors, takes a robust view on this issue.
We believe that shareholders should be able to reach an informed view ofthe
appropriateness ofthe remuneration relative to the performance ofthe Company and the returns
received by shareholders.To do so requires that they should have sufficient information regarding
both the principles and policies on which the Remuneration Committee bases its decisions and
the detail ofthe Executive Directors' remuneration and benefits.
Clearly, the amount of information required to provide this is too great to include in my
comments. Therefore, I would refer you to Note 32 on pages 56 to 75 ofthis Annual Report which
covers the subject in the detail that should enable shareholders to form such a view. I would
comment, however, that I and the other Non-executive Directors believe that the principles it
describes, and the relationship it establishes between remuneration, performance against agreed
targets and the return to the shareholder demonstrate thatTHORN EMI is also at the forefront
ofbest practice in this aspect ofcorporate governance.
THORN EMI's executive remuneration policy reflects the competitive reality of the
different sectors in which its three individual businesses operate.It also recognises the importance
ofnot only recruiting but retaining the high calibre ofinternational management needed for it to
continue to comp€te successfully on a global basis.In emphasising the award ofshares and the
use oftotal shareholder return as a key benchmark for reward, the interests of its executives are
directly aligned with those ofthe shareholder. Such an approach to remuneration emphasises long
term perlormance and, most importantln denies reward when performance is poor.
Slr Peter Walters Deputy Chairman
summary of Board
(ommitteej
Audit Committee
Chaied by the Deputy Choirmon
Membership:All Nonexecutive
Directors.The
Chairrnan and the Group
Finance Director regularly
attend by invitation. A
representative ofthe
Company's external ar.rditors
attends all meetings.
Remuneration Committee
Choircd by the Deput/ Chaitmon
Membership: All Nonexecutive
Directors and the
Chairman. Advised, as required,
by the Director ofHuman
Resources.
Nomination Committee
Choired by the Depury Choirmon
Membership: All Nonexecutive
Directors and rhe
Chairman.
Executive Committee
Choned by the Choirmon
Membership: All Executive
Directors. Company senior
executives may be invited to
attend meetings.
Finance Committee
Chaied by the senior Diectot present
Membership:The Chairman
and Group Finance Director.
The GroupTreasurer attends, as
required.
Cape)( Committee
Chaired bythe Choirmon
Membership: The Chairman
and Group Finance Director.
Other Directors, Company
senior executives and external
advisers may be invited to
attend meetings.

Directors'Report
for the year ended 31 March 1995
The Chairman's Statement on pages 2 to 5 togetherwith the Financial Review on pages 6 to 9 and
the review ofbusiness activities on pages l0 to 19 in this Annual Report contain details ofthe
principal operations ofthe Group during the year and likely future developments.
Dividends
An interim dividend of 9.75p per share (1994: 9.0p) was paid in March 1995. The Board is
recommending a final dividend of26.75p per share (1994: 25.0p), payable on 6 October 1995 to
Ordinary Shareholders on the register as at 15 August 1995, making a total of36.5p (1994: 34.0p)
for the full year.It is proposed that the retained loss of!49.4m be transferred to the profit and
loss reserve.
Scrip dividend
The Scrip Dividend Scheme, which enables Ordinary Shareholders to elect to receive new
Ordinary Shares in lieu ofa cash dividend, continued to be ofinterest to certain shareholders.
During the year under review, 466,537 new Ordinary Shares were issued under the Scheme, which
resulted in a cash saving to the Company in respect ofdividends forgone ofapproximately f4.7m.
ln addition, there was a cash flow saving in respect ofadvance corporation tax.
Details of the scrip dividend in respect of the llnal dividend for the year ended 31 March 1995
will be despatched to shareholders in August.
Resear

Board and reports regularly to the membership, as do the smaller funds in other counties,
as appropriate.
Share option schemes
Information on share options granted to employees is given in Note 23 on page 58.
The 1984 Executive Share Option Scheme expired on 14 September 1994 and it is proposed
to seek shareholder approval for a new Executive Share Option Scheme at the 1995 Annual
General Meeting.
Charitable and political (ontributions
As indicated in the Corporate Activities section on page 21, charitable, sponsorship and fundraising
activities carried out during the yearwithin the Group contributed in excess off9.5m to
charitable organisations and communities around the world. These included UK charitable
donations amounting to I0.7m. No political contributions were made.
Directors and auditors
The present Directors ofthe Company are named on page 28. All served as Directors throughout
the year.
MrJ D F Barnes retired as a Director at the conclusion ofthe Annual General Meeting on
t5 July 1994.
Mr S P DufS', MrJ G Fifreld and Sir PeterWalters now retire by rotation pursuant to Article
109 at the Annual General Meeting and, being eligible, each oflers himself for re-election.
Mr Duffy has a service contract with the Company which is terminable in normal
circumstances at the option ofthe Company on 24 months'prior notice in writing and by
Mr Duf!' on 12 months' prior notice in writing. Mr Fifield has a service contract with a subsidiary
companywhich is terminable in normal circumstances by either party on 35 months'prior notice
in writing. SirPeterWalters does not have a service agreement with the Company.
No Director had a material interest in any contract ofsignificance, other than a service
contract, subsisting at the end ofor during the year, involving any Group company. Details of
Directors' interests in the shares ofthe Company are set out in Note 32 on pages 66 to 75.
Ernst&Young have expressed their willingness to continue in office as auditors and a
resolution proposing their reappointment and authorising the Directors to determine their
remuneration will be put to the Annual General Meeting.
Directors' and Offlcers' liability insurance
The Company has maintained insurance to cover Directors' and Officers' liability as permitted by
Section 310(3) ofthe Companies Act 1985.
Corpoiate Governan

Directors' Report
The internal control system is subject to regular review by the Internal Audit Department.The
independence ofthe internal audit function is safeguarded. All Heads oflnternal Audit have
direct access to the Group Finance Director and the Audit Committee, and all internal audit
reports are reviewed independently ofthe businesses concerned.The Audit Committee considers
developments in THORN EMI's business environment and has reviewed the system ofinternal
frnancial control based on reporting by management and both the Group's external and internal
auditors. Any system ofinternal control can, however, only provide reasonable, and not absolute,
assurance against material accounting errors or losses.
The Directors hold regular meetings and a number of matters are specifically reserved for
their approval.The Group has an established organisational structure with clearly defrned lines of
responsibility and reporting, all ofwhich is supported by Group Manuals which dictate policies
and procedures applicable in common to all business units.
The Group has prepared both medium-term strategic plans, which focus on key business risks,
and annual budgets. Formal procedures are in force which require Board and the operating
businesses' approval ofthe medium-term strategic plans and the annual budget.The Group's
performance is monitored against budget and all significant variances are investigated. There are
also specifrc guidelines for capital and investment expenditure appraisal.
The strength ofan internal control system is dependent on the quality and integdty of
management and staff. The Group is committed to developing personnel ofhigh qualiry and
key executives and managers are required to sign an annual certificate ofcompliance with the
Group Manuals.
Annual General Meeting
The Annual General Meeting will be held at 11.30 am on Friday,2lJuly 1995 at the
London Marriott Hotel, Grosvenor Square, London Wl.
As well as dealing with the routine business ofthe Annual General Meeting, resolutions will
be put to the Meeting to authorise the Directors to allot relevant securities and to disapply
statutory pr€-emption rights; to authorise the purchase ofown shares; to authorise the Directors
to offer scrip dividends; and to approve the 1995 Executive Share Option Scheme and to authorise
the Directors to adopt and amend "overseas schemes".
A full explanation ofthe resolutions is set out in the separate letter from the Chairman
contained in the document accompanying this Annual Report and the resolutions are set out in
the Notice ofAnnual General Meeting on pages 6 and 7 ofthat document.
By Order ofthe Board
Robin Charlton
Secretary
23 May \995

Statement of Directors' responsibilities in respect
of the accounts
Company law requires the Directors to prepare accounts for each financial year which give a true
and fair view of the state of affain of the Company and of the Group and of the profit or loss of
the Group for that period. In preparing those accounts, the Directors are required to:
a
a
select suitable accounting policies and then apply them consistently;
make iudgements and estimates that are reasonable and prudent;
state whether applicable accounting standards have been followed, subject to any material
departures disclosed and explained in the accounts; and
prepare the accounts on the going concern basis unless it is inappropriate to presume that the
Group will continue in business.
The Directors confirm that the accounts comply with the above requirements.
The Directors are responsible for keeping proper accounting records which disclose with
reasonable accuracy at any time the financial position ofthe Group and enable them to ensure
that the accounts comply with the Companies Act 1985, They are also responsible for
safeguarding the assets ofthe Group and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
tinancial contents
Auditors'report
Accounting policies
Consolidated profit
and loss account
Balance sheets
Consolidated cash flow
statement
Statement of total
recognised gains and losses
42
43
76
78
Reconciliation of movements
in shareholders' funds
Notes to the accounts
Five year summary
Investor information

Auditors'report
Report of the Auditors to the Members of THORN EMI pl(
'We have audited the accounts on pages 35 to 75 which have been prepared under the historical
cost convention and on the basis of the accounting policies set out on pages 35 to 37
Respective responsibilities of Directors and Auditors
As described on page 33,THORN EMI'S Directors are responsible forthe preparation ofthe
accounts. It is our responsibility to form an independent opinion, based on our audit, on those
accounts and to report our opinion to you.
Basis of opinion
We conducted our audit in accordance with Auditing Standards issued by the Auditing Practices
Board. An audit includes examination, on a test basis, of evidence televant to the amounts and
disclosures in the accounts. It also includes an assessment of the signiftcant estimates and
judgements made by the Directors in the preparation of the accounts, and ofwhether the
accounting policies are appropriate to the Group's circumstances, consistently applied and
adequately disclosed.
We planned and perlormed our audit so as to obtain all the information and explanations
which we considered necessary in order to provide us with sufficient evidence to give reasonable
assurance that the accounts are free from material misstatement, whether caused by fraud or
other irregularity, or error. In forming our opinion we also evaluated the overall adequacy of the
presentation of information in the accounts.
Opinion
In our opinion the accounts give a true and fair view of the state of affairs of the Company and
ofthe Group as at 31 March 1995 and of the profrt ofthe Group for the year then ended and
have been properly prepared in accordance with the Companies Act 1985.
Cof porate governance matters
In addition to our audit of the accounts we have reviewed the Directors' statements on page 31
on the Company's compliance with the paragraphs of the Code of Best Practice specifted for our
review by the London Stock Exchange. The objective of our review is to draw attention to any
non-compliance with those paragraphs of the Code which is not disclosed.
We carried out our review in accordance with Bulletin 1995/l'Disclosures relating to
corporate governance' issued by the Auditing Practices Board. That Bulletin does not require us
to perform the additional work necessary to, and we do not, express any opinion on the
elfectiveness of the Cornpany's corporate governance procedures nor on the ability of the
Group to .ontinue in operarional eristenr e.
With respect to the Directors'statement on going ronrern on page 3l in our opinion the
Directors have provided the disclosures required by paragraph 4.6 of the Code (as supplemented
by the related guidance fbr directors) and such statement is not inconsistent with the
information ofwhich we are aware from our audit work on the accounts.
Based on enquiry of certain Directors and officers of the Company, and examination of
relevant documents, in our opinion the Directors' statements on page 3l appropriately reflects
the Company's compliance with the other paragraphs of the Codc speci[ted for our review.
Ernst & Young
Chartered Accountants
Registered Auditor
London
23 May 1995

Accounting policies
Basis of preparation
The accounts are prepared under the historical cost convention and in accordance with
applicable accounting standards.
As explained in Note 30, the normal basis ofcalculating goodwill set out in the Companies
Act 1985 has been modifred in order to show a ffue and fair view.
Basls of consolidation
The consolidated accounts comprise the accounts of the Company and its subsidiaries.
The results of all subsidiaries are taken from their accounts made up to 31 March. The results of
subsidiaries and associated undertakings disposed of or acquired during the year are included up
to, or from, the dates that control passes.
Goodwlll
Goodwill, being the excess of the consideration paid over the fair value of the separable net
assets acquired, is charged directly against shareholders' funds in the year of acquisition. In view
of the significant amounts involved, the cumulative goodwill arising on acquisitions after
31 March 1985, and charged against shareholders' funds, is separately identifred in the Group
balance sheet.
On the disposal or closure of any business acquired after 3l March 1985, the profrt and loss
account includes a charge in respect of the goodwill previously written off against shareholders'
funds on the a.quisition ofthe business.
Aisociated undertakings
Associated undertakings are those businesses, other than subsidiaries, in which the Group has a
beneficial interest and over which it exercises signifrcant influence, The Group includes its share
ofprofits and losses ofall associated undertakings. The results ofassociated undertakings are
taken from their accounts made up to 31 March or such earlier date (not prior to 31 December)
which represents their frnancial period end. The investment in associated undertakings is stated
at the Group's share of the underlying net asset values.
Foreign currencies
Transactions dominated in foreign currencies are recorded at the rates of exchange ruling at the
date of the transactions. Monetary assets and liabilities denominated in foreign cuffencies are
retranslated into sterling either at year-end rates or, where there are related forward foreign
exchange contracts, at contract rates. The resulting exchange differences are dealt with in the
determination ofprofit for the financial year.
On consolidation, average exchange rates have been used to translate the results of overseas
subsidiaries and associated undertakings.
The assets and liabilities of overseas subsidiaries and associated undertakings are translated
into sterling at year-end rates. Exchange differences arising from the retranslation at year-end
exchange rates of:
(i) the opening net investment in overseas subsidiaries and associated undertakings and
foreign currency borrowings in so far as they are matched by those overseas investments,
and (ii) the results ofoverseas subsidiaries and associated undertakings
are dealt with in Group reserves.
Turnover
Tirrnover represents the invoiced value ofgoods and services supplied (including rental income)
by the Company and its subsidiaries, except for domestic rental revenue and associated income
which is recognised on a cash receipts basis. Turnover excludes value added tax and similar salesrelated
taxes.

Accounting policies
Depreciation of tangible fixed assets
Depreciation of tangible fixed assets is calculated on cost at rates estimated to write off the
cost less the estimated residual value of the relevant assets by equal annual amounts over their
expected useful lives; effect is given, where necessary, to commercial and technical obsolescence.
The annual rates used are:
Freehold buildings and long-term leasehold property
Short-term leasehold property
Plant, equipment and vehicles
2 per cent
Period of lease
10 - 331/: per cent
Rental equipment (other than that on rent-to-own contracts) is depreciated at rates estimated
to write off the cost to a nil residual value by equal annual amounts over its estimated useful
life, from the monrh ofinsrrllarion.
The estimated useful lives ofrental equipment (other than that on rent-to-own contracts) are:
Colour television sets:
UK, Ireland, Australia and New Zealand
All other countries
Video recorder equipment
Appliances
Personal computers
Rental equipment placed on rent-to-own contracts is depreciated over the expected life of those
contracts, for periods ranging from 12 months to 60 months.
ChangeJ in a((ounting policies and presentation of flnancial lnformation
During the year the Accounting Standards Board issued Financial Reporting Standard 5
Reporting the Substance ofTiansactions (FRS 5), Financial Reporting Standard 6 -Ac4uiitions
and Mergers (FRS 6) and Financial Reporting Standard 7 - Fair Values in Ac1uisition Accoantirg
(FRS 7). These accounts comply with these standards and comparative figures have been restated
where applicable.
FRS 5 requires the substance, rather than the legal form, of a transaction to be reflected in
the accounts. The assets, liabilities, income and costs of the THORN EMI Group General
Employee Benefrt Trust (EBT) have therefore been incorporated in the accounts. The Ordinary
Shares of the Company held by the EBT are included in current asset investments and written
down to nil over the minimum period of service to which the conditions of shares awarded to
employees relate. The borrowings of the EBT, which have been guaranteed by the Company, are
included in borrowings with the net financing costs of the EBT being shown as finance charges
in the profit and loss account.
FRS 5 has extended the disclosures required for business combinations.
FRS 7 provides rules on the recognition of assets and liabilities acquired and the
measurement of their fair values under acquisition accounting. Certain costs associated with
the reorganisation and integration of acquired businesses are now required to be taken to the
profit and loss account (previously charged to goodwill) and these are shown as operating
exceptional items.
Reorganisation and integration (osts
Costs relating to fundamental reorganisation are charged as non-operating exceptional items.
Other reorganisation costs are charged against operating profit and are separately disclosed
where material due to their size or incidence.
6 years
5 years
5 years
5 years
3 years

Pension cotts
Pension costs, which are determined in accordance with Statement of Standard Accounting
Ptactice 24 - Accoantingfor Pension Co-rrs (SSAP 24), are charged to the profit and loss account so
as to spread the cost ofpensions over the working lives ofthe employees within the Group.
Valuation surpluses or deficits are amortised over the expected remaining working life within
the Group of the relevant employees (estimated to be 10 years in respect of the UK). The
amortisation ofvaluation surpluses is restricted to an amount equal to the regular pension cost.
Accordingly, employer expense in respect of the main scheme, which covers employees in the UK,
has been taken as nil for each of the two years ended 31 March 1995 for reasons of conservatism.
Research and development
Research and development expenditure is written off as incurred.
Music publishing copyrights
Music publishing copyrights purchased prior to l April 1989 were written offagainst
shareholders' funds on acquisition. Copyrights acquired as a result of the acquisitions on or after
I Aprii 1989 are treated as intangible assets in the Group balance sheet. The capitalised amount
of such copyrights, being their purchase cost, is subject to amortisation only to the extent that
royalty income generated by the total music publishing copyright portfolio is insufficient to
support its book value. All costs attributable to copyrights obtained in the normal course of
trade, and not as a result of the acquisition of a business, are written off as incurred.
Leas€d assets
Leased assets held under finance leases are included as tangible fixed assets at their estimated
purchase cost and depreciated over their expected useful lives, or over the primary lease period,
whichever is shorter. The obligations relating to finance leases (net of finance charges allocated
to future periods) are included under borrowings due within or after one year, as appropriate.
Operating lease rentals are charged to the profrt and loss account on a straight-line basis over
the lease term.
Stocks
Stocks and work in progress are stated at the lower of cost and net realisable value, less progress
payments on uncompleted contracts and provisions For expected losses. Cost includes
mJn u fu( turing overheads where appropriate.
Profit on long-term contracts is recognised by recording turnover and related costs as
contract activity progresses, if the final outcome can be assessed with reasonable certainty.
Advanc€s to artists
Advances to artists and repertoire owners are assessed and the value of the unrecouped portion
to be included in debtors is determined by the prospects of Future recoupment, based on past
sales performance, cuffent popularity and projected sales.
Warranty provisions
Many products carry formal guarantees of satisfactory performance of varying periods
following their purchase by customers. Provision is made lor the estimated cost of honouring
unexpired warranties.
Taxation
The Company has undertaken to discharge the liability to corporation tax of the majority of its
wholly-owned UK subsidiaries. Their UK tax liabilities are therefore dealt with in the accounts of
the Company.
Deferred taxation is calculated using the liability method in respect of timing differences
arising primarily from the difference between the accounting and tax treatments ofdepreciation.
Provision is made, or recovery anticipated, where timing differences are expected to reverse
without replacement in the foreseeable future.

Consolidated profit and loss account
for the year ended 3l March 1995
Turnover
Continuing operations
Acquisitions
Cost of sales
Gross profit
Distribution costs
Administration expenses
Other operating income (expenses)
Utilisation ofprovisions by discontinued operations 2 -
Share ofprofits less losses ofassociated undertakings 2
Operating profit
Continuing operations
Discontinued operations
Non-operating exceptional items :
Profrts (losses) on businesses disposed
of or terminated
- continuing operations
- discontinued operations
Profits (losses) on disposal of fixed assets
and investments
Profit before frnance charges
Finance charges
- continuing operations 9.7 9.7
Profit on ordinary activities before taxation
Taxation on profrt on ordrnary activities
Profit on ordinary activities after taxation
Minority interests (equity)
Profit attributable to members of the Holding Company
Transfer (from) to profit and loss reserve
Note: Reconciliation of adiusted earnings
Profit attributable to members of the Holding Company 9
Adjustments : Exceptional items
Attributable taxation
Adjusted earnings
Eanings
Tbe bas;. eardings per Ordinary Sbare of25.0p (1994: 48.2p) is c.lculated upon the Profrt attributable to nenb€rs of the Holdin8 Company.
Th€re is no dilution inpact on basic earninss in the year and the fully diluted earnin8s p€r ordinary Shar€ ; therefore also 25.0p (1994: 477p).

Betbre

Group
Fixed arsetr
Music publishing copyrights
Tangible frxed assets
Investments
Current aisett
Stocks
Debtors: amounts falling due within one year
Debtors: amounts falling due after more than
one year
Investments: own shares
Investments: short-term deposits
Cash at bank and in hand
Credltors: amounts falling due within one year
Borrowings
Other creditors
Net current assets (liabilities)
Total assets less curlent liablllties
Credltors: amounts falling due after more
than one year
Borrowings
Other creditors
Provisions for llabllities and

Consolidated cash flow statement
for the year ended 31 March 1995
Net cash inflow from operating activltlej
Retrrns on inyestmentt and servicing of finance
Interest received 37.8
Interest paid (73.71
Interest element offinance lease rental payments (0.9)
Dividends paid to preference shareholders
of subsidiaries
Dividends paid to minorities
Dividends received from associated undertakings
Dividends paid
Net cash outflow from returns on
investments and serviclng of finance
Tax pald
Inveitlng adiYitlet
Purchase of tangible fixed assets
Sale of tangible fixed assets
Purchase of current and fixed asset investments
Sale ofcurrent and fixed asset investments
Purchase of businesses*
Disposal of businesses"
Deferred consideration received
Net cash outflow from investing activities
Net cash lnflow before financing
Flnancing
Issue of Ordinary Share capital
Net new (deposits) loans
Capital element offinance lease rental payments
Net (ash (outflow)
inflow from financlng
lncrease in cash and cash equivalents
*Net ofcash and cash equivalents
Note:T\e reconciliation of operating profit to net
cash inflow from operating activities is as follows:
Operating profit
Depreciation charge
Goodwill written offwithin operating exceptional items
Amounts provided
Provisions utilised:
Dispo'als and lundamental reorganisationr
Other
Profit before tax of associated undertakings
Decrease (increase) in working capital:
Stock
Debtors
Creditors
Net Gash inflow from operatlng actlyities

Statement of total recognised galns and losses
for the year ended 31 March 1995
Profit for the financial year
Currency retranslation
Gains (losses) on foreign curency borowings
Revaluation of property on acquisition of business
Other recognised gains (losses)
Total recognised gains and losses relating to the year
Reconciliation of movements in shareholders'funds
for the year ended 31 March 1995
Proit for the financial year
Dividends
Scrip dividend adiustment
Other recognised gains (losses)
Goodwill:
On acquisitions
On disposals
On closure
Shares issued
Shares issued for non-cash consideration
Net (decrease) increase in shareholders' funds for the year
Opening shareholders' funds
Closing shareholders' funds

Notes to the accounts
Operating Operating
Turnover profit .tsets
Opcratint
Turnover profit
Operating Averare
assets enployees
Principal businesses 4'281.6
Other businesses 47.4
Corporate
Continuing operations
Discontinued operations
Operating exceptional items
Operating profrt
By orlgin:
United Kingdom
Rest ofEurope
North America
Asia-Pacific
Other
Operatingexceptionalitems (126.91
Operating profrt
By destlnation:
United Kingdom
Rest ofEurope
North America
Asia-Pacific
Other
Operating exceptional items arise by business and origin as follows:
By class of businessr EMI Music €ll.2m; THORN f113.9m; HMV !1.8m.
By origin: United Kingdom i115.7m; Rest of Europe f4.5m; North America f 1.5m;
Asia-Pacifrc i5.2m.
The reconciliation of operating assets to net assets is as follows:
Operating assets
Tax, dividends and net interest payable
Capital employed
Net borrowings
Net assets

Notes to the accountr
2. Analysis of profit and loss a(count
Cortinuirs Di.continuGd
Total Continuinr Discontinu€d
Cost of sales
Cost ofsales are analysed as:
- normal
- exceptional
Net operating expenses:
Distribution costs
Administration expenses
Other operating (income) expenses
Utilisation of provisions by
discontinued operations
Net operating expenses are analysed as;
- normal 594.5
- exceptional 30,0
Share of profrts of
associated undertakings
Net operating expenses for continuing operations include the following amounts relating to
acquisitions: cost ofsales 1248.2m, distribution costs fl0.0m, administration expenses f21.2m
and other operating expenses of f2.7m.
Operating profit is stated after charging:
Depreciation of tangible flxed assets
Operating lease rentals:
Property
Plant, equipment and vehicles
Research and development expenditure
Other operating income principally comprises realised exchange gains on trading transactions,
property income and net patent income less goodwill written offon closure ofRumbelows.
4. Fees to audltots
EMI Music is developing and has implemented several new management information systems
in the year and other fees paid to Ernst &Young include f6.5m for information technology
consultancy services. Other fees also include fl.5m for tax consultancy and f1.1m for due
diligence and other services in relation to acquisitions and disposals.

5. Finance

Notes to the accounts
8. Exceptlonal items
(l) Operatlng exceptlonal ltems
coortwill
Gross niirter ofr
Goodvill
Continulng*
Costs of closure of remaining
Rumbelows retail operations
Acqulsitions*
Cost of integntion:
Toshiba-EMI Ltd (TOEMI)
Dillons the Bookstore (Dillons)
Intercord Tongesellschaft mbH
(Intercord)
Other
(il) Non-operating exceptlonal it€mJ
Goodwilt
Gro3i writrcn ofr
1995 1r%
Goodwill
Profits (lo$es) on businesses
dlsposed of or terminated
Sensors
Defence Group
Thorn Security*
Malco
Babcock Thorn
Thames Television
THORN Lighting
Systron Donner
Electron Tubes
Proflts (losses) on the dliposal of
fired assets and lnvestments*
SGS-ThomsonMicroelectronicsNV 9.6
Other
O.l
*Continuing operations

Basic earnings per Ordinary Share is calculated as follows:
Profrt attributable to members of the Holding Company
Weighted average number of Ordinary Shares in issue
Earnings per Ordinary Share
Fully diluted earnings per Ordinary Share is calculated as follows:
Adjusted profrt attributable to members of the Holding Company
Adjusted weighted average number of Ordinary Shares
Earnings per Ordinary Share
Adjusted basic earnings per Ordinary Share is calculated as follows:
Adjusted earnings
Weighted average number of Ordinary Shares in issue
Adjusted earnings per Ordinary Share
Adjusted fully diluted earnings per Ordinary Share is calculated as follows:
Adjusted fully diluted earnings
Adjusted weighted average number of Ordinary Shares
Adjusted earnings per Ordinary Share
Adjusted earnings per Ordinary Share is based on earnings before the impact ofboth operating
and non-operating exceptional items. It is included as it provides a better understanding of the
underlying trading performance of the Group on a normalised basis.
Cost at 3l March 1994
Currency retranslation
Acquisition of copyrights
No amortisation was provided at 31 March 1995, or at 3l March 1994, in accordance with the
Group's accounting policy as set out on page 37

Noter to the accounts
I l.Tanglble fhed asrets
Cost at 31 March 1994
Cunency retranslation
Acquisition of businesses
Disposal ofbusinesses
Additions
Disposals
Depreciation at 31 March 1994
Currency retranslation
Acquisition of businesses
Disposal of businesses
Exceptional provision for disposal
Charge for year
Disposals
Net bool valuer: 3l llrrch 1995
Freehold property includes land having a cost off133.1m (1994; f32.5m) which is not
depreciated.
The net book values shown above include the following:
Long-term leasehold property
Short-term leasehold property
Finance lease assets
Assets in the course ofconstruction

I I . Tangible fixed assets continued
Plant
Cost at 31 March 1994
Disposal ofbusinesses
Additions
Net transfers from Group companies
Disposals
Depreciation at 3l March 1994
Disposal of businesses
Charge for year
Net transfers from Group companies
Disposals
Deprcclation at 31 March 1995
12. Flxed astet investments
Group
Investments comprise:
Subsidiary undertakings
Associated undertakings
Other investments
Listed investments
Unlisted investments
Listed lnvestments
Group and Company
Listed in the UK
Listed abroad

Notes to the accounts
12, Flxed asset inyertmentr continued
lnyertments In subsidlary undertakangs
At 31 March 1994
Additions
Disposals, transfers and other movements
Associated undertaklngs
Group
Goodwill Share of
Cost written off
At 3l March 1994
Currency translation
Additions
Net profits for the period
Disposals and reclassifications
Cost of
sha.es Prorisions
Details ofsignificant subsidiary and associated undertakings are set out in Note 31.
Other investmcntr G?oup Company
shares Provisions
Net book Cost of
value shares Provisions v:lue
At 3l March 1994
Currency retranslation
Additions
Disposals

Group
Raw materials and components
'Work in progress
Finished goods
Development properties
Other
Long-term contracts:
Costs to date less provisions for losses
Applicable payments on account
Group
Due within one year:
Trade debtors
Amounts owed by subsidiary undertakings
Amounts owed by associated undertakings
Corporate taxation recoverable
Deferred consideration receivable
Other debtors
Prepayments and accrued income
Due after more than one year:
Trade debtors
Prepaid pension contributions
Corporate taxation recoverable
Deferred consideration receivable
Other debtors
Prepayments and accrued income

Notes to the account3
15. lnvestmentr: own shares
The Employee BenefitTrust (EBT) was established in July 1993 in order to hedge the furure
obligations ofthe Group in respect ofshares awarded under the Senior Executiye Incentive Plan
(SEIP), the EMI Music Long Term Incentive Plan (LTIP) and other share-based plans. The Trustee
of the EBT, THORN EMI Trustees (Guernsey) Ltd, either purchases the Company's Ordinary
Shares in the open market or is granted an option to purchase Ordinary Shares purchased in the
open market by National Westminster Bank Plc (NWB Plc) under a !65m facility guaranteed by
the Company. The Company has an obligation to fund purchases ofshares fiom NWB Plc by
the EBT at the average purchase price and also to meet the net financing costs ofthe EBT.
Group and Company
N.t book
CostAmortisation value
At 31 March 1994
Purchases
Scrip dividends
Charge for the year
2,183,7 t7
2,820,500
16,540
0.6
0.7
23.1
29.8
(4.e) t8.2
- 29.8
(e.2) (e.2)
5,020,757 1.3 52.9 (r4.1) 38.8
At 31 March 1995 f4.9m (1994: f4.9m) had been loaned by the Company to the EBT to finance
the purchase of Ordinary Shares. A further f49.7m (1994: L18.2m) has been drawn down under
the NWB Plc facility and, under FRS 5, must be shown as borrowings in the Group balance
sheet. Borrowings in 1994 have accordingly been restated by !18.2m.
The market value ofthe Ordinary Shares held in the EBT, which are listed in the UK at 31 March
1995, was f55.0m (!994: 923.2m).

Long-term borrowlngs
US dollar private placements
Other US dollar
Other currencies
EBT loan
Finance leases
Less: repayable within one year
Total long-term borrowlngs
Shoit-term borrowings
Loans and overdrafts:
IiS dollar
Other currencies
Other EBT related loan
Finance leases
Short-term element of long-term loans
Total short-term borrowings
Total borrowlngs
Liquid funds:
InYestments: short-term deposits
Cash at bank and in hand
Nct borrorvlngs
Long-t€rm borrowings include f292.lm (1994: !.245.1m\ ofborrowings repayable within one
year, which are drawings under committed facilities and have therefore been classified as
long-term borrowings.
Under their bankint arrangements, the Company and certain subsidiaries accumulate overdraft
and cash balances which are offset. Such offsets are reflected in the Group and Company
balance sheets as appropriate.
Group borrowings include f20.9m (1994: fl8.9m) which is secured.

Noter to the accounts
16. Borrowings continued
US dollar
Japanese yen
Australian dollar
French fianc
Danish lqone
Deutschemark
Sterling
Other currencies
Finance leases
Group
gLisf,t€d
Fixed rate
Floating rate
(ill) ilaturlty analysls of long-term borrowlngs
Group
Comp.ny
Amounts falling due after more than one year
are repayable as follows:
Between one and two years
Between two and five years
After five years:
By instalments
Other
During the year, f300m ofa f450m syndicated loan facility maturing in April 1995 has been
cancelled and replaced with facilities, which total f350m and mature in three, frve and
seven years.

17. Cash and cash equivalents
The following definitions have been used:
Cash: Cash in hand and deposits repayable on demand.
(ash equlvalents: Short-term investments, which are readily convertible into known
amounts of cash without notice and which were within 90 days of maturity when acquired, less
bank loans and overdrafts repayable within 90 days from the date of advance.
On the above basis the Group's net borrowings at 31 March 1995 comprised:
cash Non'cash Net
rquivalents equivalents borowinss
Investments: short-term deposits
Cash at bank and in hand
Bank overdrafts and borrowings
Movement of (ash and cash equivalents
InYestments : short-term dePosits
Cash at bank and in hand
Bank overdrafts and borrowings
Investments : short-term dePosits
Cash at bank and in hand
Auction Preferred Stock
Bank overdrafts and borrowings
Opening balance
Net cash inflow belore adjustments for
the effect of foreign exchange rate changes
Effect of foreign exchange rate changes
Closing balance

Notes to the accounts
of changer in finance during the
and share Minorny
premium
interests
Opening balance
Currency retranslation
Net cash inflow (outflow) from financing
RCPS conversion*
Shares issued for non-cash consideration
Acquisition of businesses
Reduction on business disposals
Share ofprofit for the period
Closing balance
*The Redeemable Convertible Preference Shares (RCPS) were converted into Ordinary Shares of
the Company up to and including 13 September 1993.
19. Othcr cledltors: amounts falling due within one year
Group
Trade creditors
Customer deposits and rentals in advance
Royalties and fees payable
Amounts owed to subsidiary undertakings
Amounts owed to associated undertakings
Corporate taxation
Other taxes including VAT and social security costs
Dividends payable
Payments received on account
Other creditors
Accruals and deferred income
2O, Other creditofs: amounts falling due after one year
Group
Amounts owed to subsidiary undertakings
Corporate taxation
Deferred consideration payable
Accruals and deferred income

21. Deferred taratlon
Gi oup
Excess of accumulated taxation allowances over
depreciation provided against tangible fixed assets
Other timing differences
Advance corporation tax
Movements during the year:
At 3l March 1994
Currency retranslation
Released to profrt on ordinary activities
Other movements
No provision has been made for further taxes which could arise if subsidiary or associated
undertakings are disposed of or if overseas companies were to remit dividends to the UK in
excess of those anticipated in these accounts; it is considered impracticable to estimate the
amount of such taxes.
The Company has undertaken to discharge the liability to corporation tax of the majority of its
wholly-owned UK subsidiaries; their deferred tax liabilities are therefore dealt with in the
accounts of the Company,
22. Other provisions for liabilities and charges
Group
and other
Pensioos
Disposaland Acquisition
fundahental and
reorgadisation int€t!atio.
At 3l March 1994
Currency retranslation
Provisions utilised
Charged against:
Operating profrt
Exceptional items
(Disposal) acquisition of businesses
Reclassifications
Company
At 31 March 1994
Provisions utilised
Charged against:
Operating profit
Exceptional items
The pension provisions arise in overseas companies in respect of state schemes and employees
covered by the Group's unfunded schemes.

Notes to the a(counts
23.5hare capital and rhare premium account
Group and Company
called-up & fully paid
Ordinary Shares of 25p each
Ordinarv Shares in issue:
At 31 March 1994
Shares issued during the year on:
Elections under the Scrip Dividend Scheme
Subscriptions to the THORN EMI Personal Equity Plans
Exercise of options:
Executive Scheme
Savings-Related Schemes
Share issue expenses
Share optlons
Options to subscribe lor the Company's Ordinary Shares were outstanding as follows:
SavingsRelated
Share Option Schemes
Option price per share (range)
Final exercise datest Aug 1999 Oct 2000
In the year to 31 March 1995 the options granted under the 1984 Executive Share Option
Scheme were 714,800 at 1068p and 483,650 at 1073p, and all the options granted under the 1994
Savings-Related Share Option Scheme were at 834p.
"Adjusted for 1992 Rights Issue.
tOptions granted under the Executive Share Option Scheme are normally exercisable within the
period commencing on the third anniversary and ending no later than on the tenth anniversary
ofthe date ofgrant. Options granted under the Savings-Related Share Option Schemes are
normally exercisable within the period of six months following the frfth anniversary of the entry
into the relevant savings contract.

24. Reserves
and lo$ Other
At 31 March 1994
Currency retranslation
Gains on foreign currency borrowings
Goodwill arising in the year
Goodwill written back on disposals
Goodwill written back on closure
Revaluarion of properry on acquisttion
Scrip dividend adjustment
Retained loss (profit) for the year
Group reserves include !1.8m (1994: f5l.lm) in respect ofits share of post-acquisition retained
profi ts of associated undertakings.
Other reserves of the Company include a special reserve of f282.0m which reflects the share
premium account reduction ofJuly 1988.
In accordance with the exemption permitted by S230(3) of the Companies Act 1985, the prof{
and loss account of the Company is not separately presented. The profrt attributable to
shareholders, dealt with in the accounts of the Compann is f329.9m (1994 loss f6.0m).
25. Mlnolity interests (equity)
Group

NoteJ to the accounts
26. tinancial commitments
Capital expenditure : Contracted
Authorised but not contracted
73.5
18.9
34.5
40.6
75.1
The Group has commitments, which are largely performance related, to pay advances to artists
and repertoire owners amounting to approximately €351.8m at 31 March 1995 (1994: f335.9m).
Annual commitments under operating leases at 3l March were as follows:
Land and buildings: Expiring in the first year
Expiring in the second to fifth years inclusive
Expiring after the frfth year
14.6
60.1
81.2
13.7
45.3
68.4
Plant, equipment and vehicles: Expiring in the fust year
Expiring in the second to frfth years inclusive
Expiring after the frfth year
7.6
162
1.0
22.3
12.6
24.8 34.9
Commitments had not been entered into in respect of the Dillons stores at 31 March 1995 and
consequently have not been included in the table above. However, since the balance sheet date,
contracts have been signed with an annual commitment of!9.1m for land and buildings (fl.2m
expiring in the second to fifth years and !7.9m expiring after the fifth year).
27. Contingent liabilities
(i) Litigation
Legal proceedings continue in the class action law suits referred to in the 1994 Annual
Report and Accounts.
ln addition, proceedings were commenced in respect of the following further class
actions in the course of the year.
THORN Americas, Inc. and other members of the Group are defendants in a class
action alle1rn1, inter a/ra, that Rent-A-Center's Rental-Purchase Agreements are credit sales
and do not comply with the requirements of NewJersey law. The amount claimed in
damages is unspecified.
THORN Americas, Inc. and other members of the Group are defendants in a class
action alleging, izler a/1, that Rent-A-Center's Rental-Purchase Agreements violate the
Visconsin Consumer Act and various federal laws. The amount claimed in damages is
unspecified and the class action has not yet been certified by the court.
THORN Americas, Inc. is also defendant in a class action alleging, inter alia, that
Rent-A-Center's RentalPurchase Agreements violate the Pennsylvania Goods and Services
Installment Sales Act. The amount claimed in damages is unspecified and the class action
has not yet been certified by the court.
These claims are being vigorously defended and their outcome is not expected to affect
Rent-A-Center's business outside these states.

27. Contlngent liabilities continued
Save as disclosed, the Directors are not aware ofany legal or arbitration proceedings
pending or threatened against any member of the THORN EMI Group which may have
any liability significantly in excess of provisions in the accounts.
(ii) Guarantees, bills discounted and other contingent liabilities (excluding litigation referred to
in (i) above) total f62.8m (1994: f79.9m) for the Group, ofwhich f41.9m (1994: nil) relate
to certain contracts entered into by former Group companies.
(iii) Pursuant to the provisions ofthe Irish Companies (Amendment) Act 1986, the Company
has guaranteed the liabilities of its Irish subsidiaries, thus exempting those companies from
the requirement to file their annual accounts in Ireland.
28. Pension arrangements
THORN EMI operates a number of pension schemes throughout the world. The main scheme,
which covers employees in the UK, is the THoRN EMI pension Fund. staffengaged outside the
uK are covered by local arrangements, which in the case of the Group schemes are largely of the
defrned contribution type. With the principal exception of the EMI Electrola pension plan,
the assets of rHORN EMI's pension schemes are held in separate trustee administered funds.
The THORN EMI Pension Fund is based in the UK and is of the defined benefit type. The
Fund is open to permanent staffover the age of18 employed by the Company and certain
subsidiaries in the UK. Benefits provided by the Fund are based on frnal pensionable pay.
Pensions payable from the Fund are guaranteed to increase by 5 per cent per annum, or by the
increase in the cost ofliving ifless. Members contribute to the Fund at the rate of4 per cent of
pensionable pay.
The latest actuarial valuation of the THORN EMI Pension Fund was made by a qualifred
actuary at 31 March 1994 using the projected unit method. At that date, the market value of the
assets of the THORN EMI Pension Fund amounted to f1,410m. The actuarial value of the assets
was sufficient to cover 121 per cent of the value of the benefits that had accrued to the members,
after allowing for assumed increases in earnings and for improvements to the benefits of the
Fund implemented with effect from I January 1995. Part of the surplus disclosed by the 1994
valuation was allocated towards the reduction ofemployer contributions below the long-term
rate, the balance being carried forward as a reserve in the Fund.
With effect lrom 1 April 1988 employer expense in respect ofthe Fund has been calculated
in accordance with SSAP 24 - Accountingfor Pension Corls. On the basis of actuarial advice, it is
calculated that employer expense would represent a credit to the profit and loss account on full
application of SSAP 24 principles. However, for reasons of conservatism, such expense has been
taken as nil for the years ended 31 March 1995 and 31 March 1994. The long-term annual growth
rate assumptions used for calculating employer expense under SSAP 24 are shown below:
Crowth relative to investment return
Pay increases
Pension increases
Dividend increases
(2.s\ok
(5.0)o/o
(4.5)o/o
Employer contributions of f11.8m (1994: !10.8m) were charged to the proflt and loss account.
These contributions all related to ovetseas schemes and were determined in accordance with
local practice.

Notes to the accounts
29, Dispotal of butinerses
Tangible fixed assets
Investments
Stocks
Debtors
Creditors and provisions
Minority interests
Net assets disposed of
(Loss) profit on disposal before adiustment of goodwill written off
Total proceeds net of expenses
Satisfied by:
Cash consideration (net of cash and cash equivalents disposed)
Loan notes
Deferred consideration less deferred costs
Residual investments
3O. Purchare of businesses
Turnover and operating profit before operating exceptional items attributed to acquisitions on
the face of the profit and loss account are !306.5m and €374m respectively. The operating Profit
included foTTOEMI represents the full operating profrt for the second half of the year as
required by FRS 3. It does not rePresent the true year on year impact of the acquisition on the
Group's results as had the additional 5 Per cent acquisition not taken Place, the GrouP's
operating profit would have already included the share of profits of the associated undertaking
for that period.
TOEMI - On 3 October 1994, THORN EMI plc increased its shareholding in TOEMI from
50 to 55 per cent. TOEMI became a consolidated subsidiary on this date, having previously been
accounted for as an associated comPany.
The transaction was effected by a redemption of shares owned by the joint venture
partner,Toshiba Corporation, and funded byTOEMI's cash reserves in which the Group
already had a 50 per cent beneficial interest. The indirect cost to the Group was therefore
Yen 3.75 billion (€24.Im).
The Companies Act 1985 normally requires goodwill arising on the acquisition of a
subsidiary undertaking to be calculated as the difference between the total acquisition cost of
the undertaking and the fair value of the Group's share of the identifrable assets and liabilities at
the date it became a subsidiary undertaking.
FRS 2 recognises that, where an investment in an associated undertaking is increased and it
becomes a subsidiary undertaking, in order to show a true and fair view goodwill should be
calculated on each purchase as the difference between the cost of that Purchase and the fair
value at the date of that purchase.
If goodwill had been calculated in accordance with the basis set out in the Companies Act
1985, {61.2m of the Group's share of the retained earnings of TOEMI would have been
reclassified as goodwill and in total negative goodwill of f53.9m would have been recognised.
Integration costs of f5.0m have been accrued as operating exceptional items in the current
year results.

3O. Purchase of businesses continued
TOEMI's lair value to the Group is shown below:
.cquircd Adiustnors
Tangible fixed assets
Investments
Stock
Debtors
Creditors
Provisions
Taxation
Investment in associate disposed
Revaluation reserve acquired
Minority interests share of fair value net assets acquired
Net liabilities acquired (before cash)
Total consideration
Satisfied by:
Cash
Net cash acquired
Net cash consideration
The adjustments to book value include the revaluation of land and buildings by f101.8m, a stock
revaluation of f 18.8m to bring TOEMI in line with EMI Music's more Lonseryarive accountrng
policies, the creation of a pension provision of f2l.9n in accordance with SSAP 24, and further
adjustments of f14.6m, including writing offprepayments which would not be classifred as such
under UK GAAP.
Dillons -The Group purchased certain assets of Dillons from the administrative receiver on
2 March l995.ln addition, fl.8m ofintegration costs have been accrued as ope.ating
exceptional items in the current year results. Fair value to the Group is shown below:
the Group
Tangible fixed assets
Stock
Debtors
Creditors
Net assets acquired
Total consideration: satislred b) cash
No analysis ofthe book value of Dillons immediately prior to acquisition is given as insufficient
information relating to that period is available.

Notes to the a(counts
3O. Purchase of bullnesses continued
Otber acquisitions - Several other smaller acquisitions have been made in the year, principally
Intercord inJuly 1994 and Star Song Communications in October 1994. Integration costs of
L6.2m have been accrued as operating exceptional items in the current year results. The
combined fair value balance sheet is provided below.
Book v.luc of
..s.ts.cquired Adiurtmdtr
the Group
Music copyrights
Tangible fixed assets
Stock
Debtors
Creditors
Provisions
Minority interest
Net liabilities acquired (before cash)
Total consideration
Satisfied by:
Cash
Net cash acquired
Net cash consideration
The adjustments to book value of f3.0m were made to bring the valuation of the assets acquired
in line with the Group's accounting policies.
Goodwill arising on acquisitions in the year comprises:
Purchase price
Cash acquired
Net cash consideration
Fair value to the Group (before cash acquired)

3l, tlgnificant investments
The businesses set out below are those which, in the opinion ofthe Directors, significantly
affected the Group's results and net assets during the year. Except where otherwise stated, the
country of incorporation is England, the operations are within the United Kingdom, the shares
are in equity share capital and the businesses are wholly owned.
Subsidiary undertaklngs
THORN
THORN UK Ltd
UK Rental Division
THORN High Street Properties Ltd
THORN EMI International A/S (Denmark)
THORN EMI (Australia) Ltd
Radio Rentals Division (Australia)
THORN Svenska AB (Sweden)
THORN Americas Inc. (USA)
Visea THORN EMI S.A. (France)
Remco America Inc. (USA)
Consumer Electronics Insurance
Company Ltd
Other businesses
THORN EMI Home Electronics (UK) Ltd"
HMV Division
Dillons the Bookstore Division
THORN EMI Electronics Ltd
Corporate
THORN EMI Finance plc*
THORN EMI North America
Holdings lnc. (USA)
THORN EMI North America lnc. (USA)
THORN EMI International Holdings Ltd*'
EMI Music
EMI Records Ltd
EMI Music Publishing Ltd
Capitol-EMl Music lnc. (USA)
EMI Entertainment World Inc. (USA)
EMI France S.A. (France)
EMI ltaliana SpA (Italy)
EMI Electrola GmbH (Germany)
THORN EMI (Australia) Ltd
EMI Records Division (Australia)
Chrysalis Records Ltd
Capitol Records Inc. (USA)
Virgin Records Ltd
Virgin Records America Inc. (USA)
Virgin Schallplatten GmbH (Germany)
Groupe Virgin Disques S.A. (France)
Toshiba-EMI Ltd [apan)
AJJociated undertakings
(550/o ouned)
The principal investment of the Group
shown below:
" Held directly by Company.
in the equity share capital of associated undertakings is
Is5ued.aprirl ro.r'onl
Thorn Security Group Ltd Security services and appliances !31,040 England 43.20lo
The Group also holds 50.00/o of the !2739,557 issued non-voting preference shares of
Thorn Securiry Group Ltd.
t Principal country of incorporation and operation.

Notes to the accounts
32. Directors' and employees' emoluments and Directors' interests
Throughout this Note, reference to shares is to Ordinary Shares in THORN EMI plc.
Dlrectors' and employees' costsI
rWages and salaries
Social security costs
Other pension costs (see Note 28)
(i) Directors' Remuneration Policy
The remuneration of Executive Directors and other senior executives is determined by the
Remuneration Committee ("the Committee"), chaired by Sir Peter Walters and comprising all the
Non-executive Directors plus Sir Colin Southgate (other than in matters concerning himseltJ.
The Committee follows certain fundamental principles in deciding appropriate levels and
forms of remuneration, including a policy reflecting:
o the dtcentralised and differing natares of ou businesses and a focus
on sustainetl growth
o the importance ofrecraiting and retaining intemational management of the appropriate calibre
o a strong link betueen reward and perfofttane against dgreed targex, speciftcal$ recognising tbe retarn
prodded to shareholders and the long-term performance of both the basiness and the indioidual.
The Committee has applied these principles in the development oFreward plans which:
. Pa) d mid natket bdse sala1t Trrhile prooiding a higbly competitioe total pq package bat oxll uhen
trul1 uarrantetl b1 performance
c recognie the importance of attaining the targets set in the Companl's budgets and threeyar plans
. etuPbasise lons-teftt performance b1 proaiding awards of sbares which executioes are either encouragetl
or re4 red to hoLl
o direct! align the intelests of erec tizles with those of the shareholfurs.
The following is intended as a summary of the remuneration packages for Executive Directors
and other senior executives. Copies of the full documentation covering the various plans,
together with the Executive Directors' employment contracts, are available for inspection
by shareholders.
Base Salary and Benefits
The base salaries and benefits (typically including car and life, disability and health insurance) of
Executive Directors and other senior executives are reviewed, normally annually, by the
Committee, having regard to competitive market practice supported by external, independent
surveys. Any increase reflects both individual and business perlormance.
Annual and Longer-Term Incentive Plans
TArget Setting
THORN EMI operates a systematic, annual planning and budgeting review process covering
each business. The financial targets arising out of this process are reviewed and approved by the
Board and the Committee. There are two important proflt targets identified for incentive plans:
o a demanding Tirge t Proftt, at which the target reward is earned
o a Maximum Proftt target (typically set between 1050/o and ll0o/o ofTarget Profrt) at which the
maximum reward is earned.

32. Directort'and employees' emoluments and Directorl' interests continued
The Sexior Executiae Incentiae Plan ("SEIP")
As first reported in the 1993 Annual Report and Accounts, the Committee approved the SEIP
with effect from I April 1993 to cover the uK Executive Directors and certain other senior
executives,It includes an annual and a longer-term bonus element which are both payable in the
form of share awards (or rights to acquire such shares) and with provisions that either encourage
or require these to be held.
Awards under the annual element of the plan are based on appropriate Group or business
sector profit targets set at the beginning of each year by the Committee. Such awards are
generally equal in value to 200/o of base salary if the Target Profit is achieved and increase to
a maximum of 350/o ofbase salary if the Maximum Proftt target is exceeded. Following
confrrmation of the year's profit performance, the appropriate award may be released (and the
shares may be sold immediately) or, at the executive's request, may be deferred. The value of the
award is increased by one-third provided it is deferred for at least three years (the value of this
one-third increase being included in reported emoluments only at the end of the three-year
deferal period). The share equivalent of dividends which would have been paid on the deferred
shares will be added to the award during the deferral period.
The longer-term element of the plan is equal to the annual element but vests only after a
deferral period ofbetween three and seven years and then only on achievement of a further
performance target (the value of the award being included in reported emoluments only if and
when this target is achieved). This target currently demands that real (i.e. inflation corrected)
profit growth be achieved by the Group or appropriate business sector over the deferral period.
Failure to have met the target after seven years results in the loss of the award. The share
equivalent of dividends which would have been paid on the shares will be added to the award
during the deferral period.
EMI Music Execative Incentiue PIan ("EIP") and Long-lZrm Incentiae PIan ("LTIP")
The E1P is an annual cash bonus based on EMI Music profit targets set at the beginning of each
year by the Committee. At the most senior level it is equal to 500/o ofbase salary if the Target
Profit is achieved and increases to a maximum of 1000/o of base salary if the Maximum Profit
target is exceeded.
The LTIP, created in 1989, is a bonus based on a continued substantial improvement in
EMI Music profrts ovet successive three-year cycles set at the beginning ofeach cycle by the
Committee. For the cycles up to and including the cycle which ended on 31 March 1995
(cycle 4), an individually-set cash amount was payable if the three-yearTarget Profit was
achieved increasing to a maximum of1500/o ofthe cash amount if the Maximum Profit target
was exceeded. For future cycles (the frrst ofwhich, cycle 5, ends 31 March 1995) the Committee
has modified the LIIP to provide share awards (rather than cash) which the executives are
encouraged to continue to hold beyond the three-year cycle.
The LIIP is now converted into a share award at the beginning ofthe cycle. Following
confirmation of the profrt performance over the cycle, the appropriate award may be released
(and the shares may be sold immediately) or, at the executive's request, may be deferred. The
value of the award is increased by one-quarter provided it is deferred for three years (the value of
the one-quarter increase being included in reported emoluments only at the end of the threeyear
delerral period). The share equivalent of dividends which would have been paid on the
deferred shares will be added to the award during the deferral period.
Share Optlons and Share Appreciatlon Rightt ("SARs")
Executives, including the Executive Directors, are normally granted options annuall% at the
discretion of the Committee. An option is the right (but not the obligation) to buy shares in the
future at the market share price prevailing when the option was granted. The "gain" is thus the

Notes to the accounts
32. Directors'and employees, emoluments and Directors, interests contjnued
diff-erence between the market share price when the option is exercised and the price to be paid
lor the shares. The greater the share price growth between grant and exercise, the more valuable
the option. Tax is due on the gain either on exercise or on the sale of the resulting shares.
The right to exercise normally only arises in the period between three and ten years from
the grant, after which the option cannot be exercised. options granted in 1995 and thereafter
(under the new Executive Share Option Scheme to be put to shareholders for approval at the
1995 Annual General Meeting) can only be exercised ifperformance targets, as set by the
committee, are met. It is intended that the initial performance target will be Total Shareholder
Return ("TSR"), i.e. based on share price growth plus dividends, over the measurement period
determined by the Committee. For an option to be exercisable, THORN EMI,s TSR must be at
least at the median of the companies comprising the FT-SE 100 at the start of the period.
A share option is generally granted in relation to its "face value" i.e. the number of shares
under option multiplied by the price to be paid on exercise. Each year the uK Executive Directors
are typically granted share options with a lace value of1000/o ofbase salary, to a maximum over
any ten-year period ofeight times annual earnings. Options with a face value ofup to four times
annual earnings are granted under shareholder-approved Executive Share Option Schemes. The
remainder may be in the form of SARs whereby, instead of buying the shares on exercise,
the executive is paid the "gain" between the market share price at the grant and the exercise.
To reinforce its long-term nature, an SAR cannot normally be exercised in part earlier than
four years and in lull earlier than six years from grant. For SARS granted on or before July 1994,
to ensure that gains reflect true performance and not simply inflationary share price rises, any
"gain" is reduced to the amount by which the share price growth exceeds the UK Retail Prices
Index ("RPI") over the period between the grant and the exercise. The exercise of SARs granted
afterJuly 1994, as with all Executive Options granted after this date, is subtect to the
achievement of performance targets as set by the Committee.
In addition, the UK Executive Directors and all other eligible employees are entitled to
apply for options under the shareholder-approved Savings-Related Share Option Scheme
("ShareSave Scheme"). The number of options granted is related to the value of savings made by
the employee under a Save-As-You-Earn contract over frve years. The maximum total monthly
savings an employee may make is currently !250. The option price is currently set at 800/o of the
market share price prior to the grant and the right to exercise normally only arises for a sixmonth
period once the five years savings have been completed.
Retirement Benefits
UK Executive Directors are members of the Group's UK contributory Pension Fund which,
subject to Inland Revenue limits, provides them with a pension of up to two-thirds of base
salary after 20 years membership (or 10 years for those who joined before 17 March 1987),
together with benehts on death or disability. Mr Fifield is a member of three co-ordinated
defined contribution retirement plans operated by EMI Music in the US (see section (v) of this
Note).
Entitlement to notice
Each Executive Director has an employment contract with entitlement to notice. During
the year, all the UK Executive Directors voluntarily agreed (without compensation) to reduce
their normal notice period to 24 months (increasing to 36 months in the event of a change in
control of the Company). It is the Company's intention to limit the normal notice period of
future Executive Directors to 24 months. Furthermore, it has been and continues to be the
Committee's practice to scrutinise the compensation entitlement of any departing Executive
Director with particular focus on his or her legal duty to mitigate loss, thereby reducing any
termination payment. Mr Fifleld's employment contract has specific terms covering his
obligation to mitigate in the event of the termination ofhis employment. Non-executive
Directors do not have contracts, but each appointment is subject to review every three years.

:!2. Directors'and employees'emolumentJ and Directors' interests continued
(ll) Directors' emoluments:
Incertiveremudation* Rctir@€rl
Bcncfrts (i) (it bmefrts
8000 1000 t'ooo foo0
Notes on the Non-executive Directors, sir colin southgate (chairman and highest Paid uKbased
Director) and Mr Fifreld are given below to ensure a full understanding of the Directors'
emoluments (including all elements ofincentive remuneration) The basis ofremuneration for
Mr Duffu and Mr Metcalf broadly follows that for Sir Colin Southgate'
(iil) Non-erecutlve Directors
Non-executive Directors receive a basic fee plus an additional sum in respect of commlttee
membership. Sir PeterWalters, the Deputy Chairman, receives a further fee for his extra duties
and responsibilities. The Non-executive Directors do not participate in any of the incentive or
share option plans.

Notes to the accounts
32. Directors' and employees' emoluments and Directors, interests continued
(iv) Sir Colin Southgate (Chairman and highest paid UK-based Diredor)
Base Salary and Beneflts
Sir Colin Southgate's base salary is f505,000 (increased from f460,000 with eflect from l July
1994, his previous increase having been on l January 1992). Including Profit-Related pay (paid to
all THORN EMI plc employees) his total base salarv during the year was t494,451 (1994:
f450,399). He is also provided with a fully-expensed company car, a car phone and a driver, and
he and his family are covered by the uK medical insurance plan. In the year these benefits had a
total taxable value of fl5,O37 (1994: Lt3,948).
ln(entive Remunetation
For the 1994/95 year onwards, the committee decided to adjust Sir colin Southgate's specific
awards under each of the SEIP annual and longer-term elements to be equal in value to 250/o of
base salary if the Target Profit is achieved increasing to a maximum of 500/o of base sararv if the
Maximum Profrt target is exceeded.
(a) Year to 31 March 1995
During the year Sir Colin Southgate earned a SEIp annual bonus equal in value to f202,O00
(1994: f110'630), payable as a share award which, at his request, is being deferred. The number of
shares will be based on the market share price after the award has been confrrmed by the
Committee (expected to be in June 1995).
He also earned a SEIP longer-term bonus equal in value to f202,000 (1994; f110,630)
payable as a deferred share award, as above, which vests only on the achievement of a further
performance target.
These incentives, equal to 450/o of total earnings (base salary plus these incentives), were
earned because the Group's 1994/95 profit belore tax was 1060/o of the Target set by the Committee.
(b) Preaiors 1,ears
sir colin southgate's 1993/94 sErP annual bonus (included within his reported emoluments for
the year ended 3l March 1994), payable as an award of10,63g shares is, at his request, being
delerred for at least three years, subject to which its value will be increased by one_third, to
14,184 shares. His 1993/94 sEIP longer-term bonus, payabre as an award of 10,63g shares, is being
deferred for at least three years and vests subject to achievement of a further performance target.
All of the awards in (a) and (b) above are granted under the terms of the sEIp. summarised
on page 67
Share Options and Share Appre(iation Rightj (,,SARs,,)
Full details ofSir Colin Southgate's Share Options and SARs are reported in section (vi) (b) and
(c) of this Note.
Retirement Benefits
The UKTHORN EMI Pension Fund will provide Sir Colin Southgate with a pension of
two-thirds ofhis final year's base sarary on his retirement. He contributes at the rate of 4olo of
base salary with effect from April 1995. During the year the Company contributed €nil (1994:
fnil) to the Fund in respect ofsir colin southgate (due to its continuing contribution horidav
arising from the surplus in the Fund).

32. Directors' and employees' emoluments and Directors' lnterests continued
(v) | G Fifield (President and Chief Executive Offlcer, EMI Music) - except
where otherwise stated, the US$/!sterling conversion rate used below is the average exchange
rate for the appropriate year.
Base Salary and Benefits
Mr Fifield's base salary is US$3,000,000 ot 81,923,O77 (1994: 11,986,755) which was fixed on
1 April 1993 to apply until 3l March 1996. He also receives a cash allowance in lieu of a company
car, and he and (where applicable) his family are covered by the US life, disability and health
insurance plans. In the year these, together with sundry benefits, had a total taxable value of
US$181,285 or f116'208 (1994: t118,520).
Incentive Remuneration
(a) Earned
During the year Mr Fifield earned a cash bonus under the EIP of US$3,000,000 or fl'923'O77
(1994 tr,986,755).
He also earned a bonus for the three-year LTIP cycle ended 31 March 1995 (cycle 4) of
US$4,158.000 or f2,665,385 (cycle 3: f3,059,603).
These incentives, equal to 700/0 of total earnings (base salary plus these incentives), were
earned because EMI Music's proftt after notional interest for 1994l95 and the three-year period
to 31 March 1995 were lllo/o and 1050/o of the respective targets set by the Committee.
(b) Accrued
A further amount was accrued for the two current LTIP cycles which will provide potential
awards ofshares r:.1995/96 and 1996197 subject to the proflt performance of EMI Music over
the three-year periods ending 31 March 1996 (cycle 5) and 3l March 1997 (cycle 6) respectively.
The shares awarded will be 113,200 (for cycle 5) and 94,800 (for cycle 6) if the Profrt Target for
the cycle is achieved, increasing to 169,800 (for cycle 5) ar'd 142,200 (for cycle 6) if the
Maximum Profit Target for the cycle is exceeded. These awards are granted under the terms oF
the LIIP, summarised on page 67
Executive Share Pur(hase OPtion
Under the Executive Share Purchase Option, so as to encourage the further alignment of
Mr Fifield's interests with those of the shareholders, the value of share awards purchased by
Mr Fifreld with cash bonuses under the EIP or LIIP cycles 3 and 4 will be increased by onequarter
provided the awards are deferred for at least three years. The share equivalent of
dividends which would have been paid on the shares is added during the deferral period and,
provided these dividend equivalents are themselves deferred for three years, their value will also
be increased by one-quarter. To date, Mr Fifield has elected to use a total ofUS$2,500,000 to
purchase deferred share awards as follows:
71

Notes to the a

32. Dlrectors'and employees' emoluments and Dlrectors' interetts continued
(vl) Directors' Interests
(a) Directors' interests (all benefcial) in tl)e share caPital of tbe Companl
Ordinary Shares
l April 1994
Sir Colin Southgate
153,956
10,63t
164,594
152,480
Sir PeterWalters
3,000
3,000
3,000
Sir Graham Day
1,408
1,408
1,408
S P Duffu
3,O24
4,625
7,649
3,000
H Einsmann
J G Fifreld
Lord Griffrths of Fforestfach
M E Metcalf
E L Nicoli
1,000
3,500
2so
3,504
1262
9722;
1,000
too,723
250
3,504
1262
1,000
3,500
250
3,504
r,220
*'Other' interests refers to shares under the terms of the SEIP (where such interests are expressed as rights to acquire
shares at nominal cost), the LIIP and other share-based plans, which are not subject to further conditions They are
recorded in the tabte above even where they have already been disclosed in the individual details provided in this Note.
In addition, the Executive Directors have contingent interests in shares under the terms ofthe SEIP, the LTIP and other
share,based plans,wbere failur€ to achieve the relevant conditions will result in either the reduction in the number, or the
forfeiture, ofthe shares. For Sir Colin Southgate and Mr Fifreld these contingent interests are detailed respectively in
sections (iv) and (v) ofthis Note. Mr Duflj' ind Mr Metcalfhave continsent int€rests over 6,167 and 4,524 shrres
respectively under the 1993/94 SEIP (Dil as at l April 1994).

Notes to the a(counts
32, Directors' and employees'emoluments and Directors' Intererts continued
(b) Directors' Executiae and ShareSazte Options'l
As at
Exeicise l April crant€d Exercised
?licer 1994 in year in year,
Date of
exercise
As at
Price at 3r Mrrch
" ri7lere appropriate, figures have been adjusted for the 1992 Rights lsue.
f Options granted under th€ Sharesave Scheme.
I Executive Options are based on the average rnarket share price over a three-day period prior to the date ofgrant and are
normally exercisable between three and no Iiter than ten years from the date ofgrant. ShareSave Options are based on a
discount of 200/o to tbe average market share price over a three-day period prior to the date ofgrant and are normally
exercisable for a six'montb period five years after the date ofgrant.The options under the 1984 Executive Share Option
Scheme and the 1984 and 1994 Savings,Related Share Option Schemes are sunmarised in Note 23 on page 58.
As a result ofthe exercise of these two Options, Mr Metcalf made a total notional gain of!151,463. He immediately sold
'?
al1 the shares and, after all costs. realised a cash sain, before tax, o1f149,650. No other Direcrors' Executive or ShareSave
Options were exercised or lapsed unexercrsed during the year.

32. Directors'and employees' emoluments and Directors' interetts continued
(c) Share Appreciation Rights ("SARs")
SARs do not constitute notifiable interests in shares, although they are detailed in this section of
the Note to reflect their similarity to Executive Options.
987p 1025p 93,000
1068p ll07p - 20.550
1068p ll07p - 26.550
. SARs are based on the average rnarket share price over a three-day period prior to the date ofgrant and cannot
normally be exercised in part €arlier than fbur years and in full earlier than six years, and no later than ten years, from the
date ofgrant.
* The Indexed Price (beins the Price ,t Grant indexed by UK RPI) is the price for the purpose ofcalculatins any"gain"
compared to the market share price at the drte ofexercrse ofthe SAR.
(d) General matters
The Company hedges the cost of providing shares awarded under the SEIB LIIP and other
share-based plans through the EBT (see Note 15 on Page 52). As potential beneficiaries under the
terms of the EBT, employees of the THORN EMI Group, including the Executive Directors,
have a potential interest in the shares in the EBT.
The closing mid-market price of THORN EMI plc shares as at 31 March 1995 was 1096p
and the range ofclosing mid-market prices during the year was 963p to 1156p.
On 1 April 1995 the benefrcial interests of Sir Colin Southgate increased by a further
645 shares as a result ofthe exercise ofhis option granted on 20 December 1989 under the
ShareSave Scheme from which, on 3 April 1995 and 5 April 1995, he made transfers of 272 and.
271 shares respectively into the THORN EMI Single Company Personal Equity Plan.
On 4 April 1995 the beneficial interests of Mr Metcalf increased by a further 1,291 shares
as a result of the exercise of his option granted on 20 December 1989 under the ShareSave
Scheme.
On 3 May 1995 the benefrcial interests ofSir Colin Southgate and Mr Nicoli increased by a
further 9 and 10 shares respectively as the result of the re-investment by the Plan Manager of the
1995 lnterim Dividend and the tax credit thereon received in respect of the THORN EMI
Personal Equity Plans.
No other transactions subsequent to 31 March 1995 had been notifred as at 17 May 1995.
No Director had any interest in any shares or debentures of any subsidiary of the Company.
The Company's Register of Directors' Interests contains full details ofDirectors'
shareholdings and options and is available for inspection in accordance with the provisions of
the Companies Act 1985 and the London Stock Exchange's Listing Rules.

Five year summary
for the years to 31 March
Results
Tirrnover
Continuing operations
Discontinued operations
Operating profit
Continuing operations - normal
Continuing operations - exceptional
Discontinued operations
Exceptional items
328.5
Profits (losses) on businesses disposed
or terminate d (35.3)
Cost of fundamental reorganisations and
restructuring
Profits (losses) on disposal offixed assets 9,7
Profit before frnance charges
Finance charges
Profit on ordinary activities before taxation
Taxation on profit on ordinary activities
Profrt on ordinary activities after taxation
Minority interests
Profrt attributable to members of the
Holding Company
Key statistiGs
Net cash flow from operating activities
Crpital expenditure: property. planr, equipment
Total capital expenditure
and vehicles
rental equipment
Basic earnings per Ordinary Share
Fully diluted earnings per Ordinary Share
Adjusted basic earnings per Ordinary Share
Adjusted fully diluted earnings per
Ordinary Share
Free cash flow per Ordinary Share
Dividends per Ordinary Share
lnternational proportion of operating profrt
before operating exceptional items
Return on sales (continuing operations)
Effective tax rate (before exceptional items)
Interest cover
Dividend cover
l.7x
Debt: Shareholders' funds (inc. Minority interests) 5520/0
Debt: Capital employed

Employment of capital
Music publishing copyrights
Property, plant, equipment and vehicles
Rental equipment
Fixed asset investments
Stock' and debror:. excluding taxation
and interest
Investments: own shares
Creditors and provisions, excluding
borrowings, taxation, dividends and
interest payable
Operating assets
Deferred taxation
Corporate taxation
Dividends and net interest payable
Capital employed
Share capital
Share premium account
Profit and loss reserve
Other reserves
Goodwill
Convertible Unsecured Loan Stock
Shareholders' funds
Minority interests
Net borrowings
Change in accountlng policies and presentation of financlal lnformation
During the year the Accounting Standards Board issued Financial Reporting Standard 5 -
Reporting the Sabstance ofTiansactions (FRS 5), Financial Reporting Standad 6 - Acqaisitions and
Mergers (FRS 5) and Financial Reporting Standard 7 - Fair Valaes in Acquisition Accounting (FRS 7\.
FRS 5 requires the substance, rather than the legal form, of a transaction to be reflected in
the accounts. The assets, liabilities, income and costs of THORN EMI Group General Employee
Benefit Trust (EBT) have therefore been incorporated in the accounts. The Ordinary Shares of
the Company held by the EBT are included in current asset investments and written down to nil
over the minimum period of service to which the conditions of shares awarded to employees
relate. The borrowings ofthe EBT, which have been guaranteed by the Company, are included in
borrowings with the net financing costs of the EBT being shown as finance charges in the profit
and loss account.
FRS 7 provides rules on the recognition of assets and liabilities acquired and the
measurement of their fair values under acquisition accounting. Certain costs associated with the
reorganisation and integration of acquired businesses are now required to be taken to the proht
and loss account (previously charged to goodwill) and these are shown as operating exceptional
items.
The comparatives have been restated where applicable.

lnvestor information
Financial calendar
Results announcements
3 months to 3OJune 1995 -August 1995
Interim to 30 September1995 November1995
9 months to 3l December1995 February 1996
frnal to Jl Marth 1qq6 .28 May lo9o
Dividend payments
1994/95 FnaI- 6 October 1995
1995/96lntettm - | March 1996
Annual Report and AGMs
1995 Annual General Meeting - 21July 1995
1995 Report and Accounts -June 1996
1996 Annual General Meeting 19
July 1996
Registrar
Enquiries concerning shareholdings or dividends should, in the first instance, be addressed to the
Company's registrar, Lloyds Bank Registrars,The Causeway, Worthing, Vest Sussex BN99 6DA.
A THORN EMI helpline, at local call rates in the UK, operates during normal office hours on
0345 125921 (+44 1903 833398 from overseas).
Shareholders should noti$r the registrar promptly ofany change ofaddress orother
particulars.
Personal Equity Plans (PEPs)
The THORN EMI Corporate Personal Equity Plan and the THORN EMI Single Company
Personal Equity Plan enable UK residents to hold the Company's shares tax free. Both Plans are
operated by Halifax Investment Services Ltd ('HISL ), a wholly-owned subsidiary of Halifax
Building Societn which is regulated by the Investment Management Regulatory Organisation Ltd
(IMRO). Explanatory booklets are available from HISL, Trinity Road, Halifax, West Yorkshire HXI
2RG.Tel: 01422 335991.
Low-

Summary of main announcements
for the 1994/95 frnancial year
Preliminary results for the year to 3l March 1994
Sale of THORN Security Group
David Barnes' intention to retire from THORN EMI Board
Reaction to MMC Report on the supply of recorded music in the UK
Agreement in principle with Thomson-CSF on sale of THORN EMI
Electronics' Defence Group
Sale of35 per cent interest in BabcockThorn
Acquisition of German recorded music company, Intercord
AGM statement
Intention to increase interest in Toshiba-EMI (TOEMI) (|apan) from
50 to 55 per cent
Results for the three months to 30June 1994
Completion of transaction to increase Toshiba-EMI shareholding;
acquisition of TOEMI music publishing company
Acquisition of US Christian music company, Star Song
Communications
Discussions with Racal on possible sale of THORN EMI Electronics'
Sensors business
lnterim results for the six months to 30 September 1994
Sale of Automation Division
Conditional sale of Delence Group to Thomson-CSF
Results for the nine months to 31 December 1994; accelerated exit from
remaining Rumbelows electrical retailing operations in the UK
Acquisition ofselected assets of Dillons, Hatchards and Hodges Figgis
Retention of Dillons outlets
Sale of Sensors businesses to Racal agreed
Exit from defence electronics sector with completion on 31 March 1995
of Sensors and Defence Group divestments

Tlte nz,er and bus;flut otnlaieu pas\ aft pr;nted on Mep Mau pa?el uhich t nadeJron 500k /eclcbd and 50% chhlinetee ?LIp
fron nantriet ubicb operak an i tensi?e rlu fe?lant;ns poliJ.
Tbe reriew oJtbeyar and'tnandal p/rse' a'e plinted on%nohaukuhirh ue! ? lp.fron counnlesubich opelate a/' inknsite
D.siAr, - %t Peuen.n O Paineft Ltd.
Pbotogtdpbr Lo.at;on: Pa"l Conltdnt, Dereh Richards. NeillY/alhet Michael Hatdias; Strdio' Pa BradJbth; Channar
Pa lCoflsta t. Page 92: Phato co ltery ofTum.r Etterraianext Co.Jion the notie lv;zdld ofoz.A /i4hk lesetued.
Ilta"ratio,' - Dircdot afld Exec,tioes:Job" Lawftna. Cdrtoon (i,t'idefont cooe/).o|ltu'r ofP"bt h;ks Ntu!.
TJpet.tti's lvo Do'hpL.
Plifttcd in E"gla,'d b Litho T.h .
THORN EMI gatdrlb achnouhdges the klp oJ THORN c ltonen in conflettior loith photostupb, palti"kiJ Mane Belsh
Oale 17). dftdWajrle a"dAnita Mittz a"d Enna (pas6 94 and 9s).

From
Turnover by burinesi 1985
(ft,2o4.4m,
to
Turnover by bu3inesr 1995
(t4,5O7.tm'
oiher 4.9%
Today's THORN EMI is focuse d on
three businesses - EMI, THORN
and HMV- each with strong growth
potential in dynamic worldwide
markets, It would have been
unrecognisable a decade ago'
EMI
HMV
ln 1985,THORN EMI had a sprawling
portfolio of businesses, which
stretched from the rental ofhome
electronics products to hydraulic
equipment; from machine tools to
music; from semiconductors to
domestic central heating. It was
heavily dependent on the UK
economy; and its declining financial
performance was putting its future
in jeopardy.
The transformation began with a
new strategy- to locus on a small
number ofbusinesses with real
potential for prohtable growth in the
international arena. In an aggressive
programme of disposals some 100
businesses with combined sales of
more than !2.6 billion were shed over
the years. At the same time,THORN
EMI concentrated on building and
strengthening its selected businesses
by acquisition and investment in
organic growth. Now, ten years later,
THORN EMI and its performance
have changed radically.
Focused on growth
THORN EMI is now firmly
concentrated on three exciting
international businesses with the
competitiveness and resources to
deliver sustained, high quality growth.
EMI,THORN and HMVare
distinct businesses, with their
individual strategies for growth in
their different markets. Yet they each
demonstrate creative thinking,
innovation, and deep professionalism.
Each holds a leading position and
exerts substantial competitive
influence in its international
market-place.
In the following pages, we
portray the scope and excitement of
EMI,THORN and HMV, beyond just
the facts and figures ofthe year
in review.

"The British music scene is enioying a
growing revival, and at EMI a number
ofour breaking acts are enioying
healrhy 'ale..Wirlr emerging a tt.t'
such as Supergrass, Sbampoo and
Radiohead, togetherwith our
superstars and rich catalogue, EMI's
music will continue to sell strongly
in Britain and overseas."
Rapert Perry - Chairman, EMI
Records UK O Eire
"Virgin has been involved with the
resurgence ofthe British music scene
at every level. Artists like Carleen
Ander.on and M.rs.ir e Artr, k have
become household names, while
Smasl.r and These Animal Men wcre
leaders in the movement labelled
'New\(ave of the NewrWave'."
PaaI Conrol - Managing Director,
Virgin Records UK
"ln American music today therc's rnore
of a willingness to experiment than
we've seen in years. Bands such as the
Beastie Boys, Luscious Jackson,
Spearhead and Triple Fast Action are
inventing a musical language that
speaks directly to ,voung peopJe.
That's what the luture of music is
all about."
Gary Gersb - Preside tandCEO,
Capitol Record;
"Rap nusic has come so 1)r that people
don't even notice it as sornething
diflerent any more. It's everywherc,
from commercials to the novies.
Wrth arri.rr liks r111fuqq. \eo Tlbe r.
working to present serious positive
rap that ians will recognise as the
real thing."
Eric Broohs - President, Noo-TrJtbe
ScdrJice

From
{\
"Alternative music is quickly becoming
the foundation ofrock and roll
around the world. At Virgin, artists
such as Smashing Pumpkins and
Cracker typily the incredibly strong
songwriting and high level of
craftsmanship that lie at the heart of
today's successful bands."
Kaz Utsanomi2a - Etecatil)e Vice
President, A(zR, Virgin Records
America
''A rremendou: *.rve of young arLi't.
like Cassandra !0ilson and Rachelle
Ferrell are creating new audiences for
jazz whrlre traditional artists are being
discovered all over again. !(/ith talent
spanning the generations from the
legendary Lena Horne to jazz hip-hop
sensation Us3, Blue Note is truly
hauing an rmpa.t on lhe revrrJlr\atlot)
of tazz."
Brace Ludaall - President, Blae Note
"Latin music has changed dramatically.
Artists such asJon Secada and the
Barrio Boyzz - with fresh music and
hot lyrics - are what young Latinos are
listening to today. EMI is playing a
major role in shaping this genre."
Jose Behat - Presid.ent, EMI Latin
"Canada is beginning to be recognised
r' a breedin!, Bround lbr rlrernaLive
music. EMI bands, from the first
major Inuit artist Susan Aglukark to
the Rankin Family and the
emerging The Tea Partl
are all part ofa continuing legacy of
strong, vibrant songwriting and are on
the verge of breaking internationally."
Deaxe Caneron - President,
EMI Canada
"Music fans are more en-rpowered than
ever to demand the types of music
they want. That's changing the rules of
the bu'ine::. By pre.entint new arrisr.
such as Blessid Union ofSouls, Rappin'
4-Tay and Milla, EMI is responding."
Daztitt Sigerson - President and CEO,
EMI Record.s
"Virgin is a distinctive label not just
because ofthe edgy bands that we
break, but in howwe work with artists.
'We've used unconventional strategies
to promote established acts like
The Rolling Stones andJanet
Jackson, and we're
Smashing
Pampkins

From
{\
"Alternative music is quickly becoming
the foundation ofrock and roll
around the world. At Virgin, artists
such as Smashing Pumpkins and
Cracker typily the incredibly strong
songwriting and high level of
craftsmanship that lie at the heart of
today's successful bands."
Kaz Utsanomi2a - Etecatil)e Vice
President, A(zR, Virgin Records
America
''A rremendou: *.rve of young arLi't.
like Cassandra !0ilson and Rachelle
Ferrell are creating new audiences for
jazz whrlre traditional artists are being
discovered all over again. !(/ith talent
spanning the generations from the
legendary Lena Horne to jazz hip-hop
sensation Us3, Blue Note is truly
hauing an rmpa.t on lhe revrrJlr\atlot)
of tazz."
Brace Ludaall - President, Blae Note
"Latin music has changed dramatically.
Artists such asJon Secada and the
Barrio Boyzz - with fresh music and
hot lyrics - are what young Latinos are
listening to today. EMI is playing a
major role in shaping this genre."
Jose Behat - Presid.ent, EMI Latin
"Canada is beginning to be recognised
r' a breedin!, Bround lbr rlrernaLive
music. EMI bands, from the first
major Inuit artist Susan Aglukark to
the Rankin Family and the
emerging The Tea Partl
are all part ofa continuing legacy of
strong, vibrant songwriting and are on
the verge of breaking internationally."
Deaxe Caneron - President,
EMI Canada
"Music fans are more en-rpowered than
ever to demand the types of music
they want. That's changing the rules of
the bu'ine::. By pre.entint new arrisr.
such as Blessid Union ofSouls, Rappin'
4-Tay and Milla, EMI is responding."
Daztitt Sigerson - President and CEO,
EMI Record.s
"Virgin is a distinctive label not just
because ofthe edgy bands that we
break, but in howwe work with artists.
'We've used unconventional strategies
to promote established acts like
The Rolling Stones andJanet
Jackson, and we're
Smashing
Pampkins

Fnont
''Lcd by.the Benedictine \1onlis. tht
major ne*. mu:ical ,r,r.r"arrr"n, au,,rtn*
out of Sp.rin is tr'eu Age rrus ji . \\! rlc
no* cl* eLoping other .rrrists such as
PortLrgel's \{.rdrcdcus to iicd tlre
popul.rritr.oi this cenrc as rvell ls
rr ni -r r',t r,it r' \l' 1..
[.11] a]so continucs to devclop
Spanish acts lihe El L.llrimo De Lr Fi1.r
lncl llerocs Del Srlencio l ho lre
popui:r .rcross !.uropc."
RaJitel Gil Presidtnt, EMI lbtia
"\ Lr-rre ,e rr rr
.. 1 -. -.
bar ricr clr"rickll slippin.r, rr. at rncl
,r]lo.r,irg auc|enccs to be more open
to iIltenratioDll tepertoirc. D.rnce
trusic..r tLets Europern trcnd. hrr
trrmly ral

iii0 . ,'.'
H'] .I .
artists such as Etbma are alsd*
enjoying increased international,fs:
success. Locally, Virgin continues to
develop exciting emerging artists such
as Six Was Nine and Stiltskin, and last
year we had the first number one
album forThe Rolling Stones with
'Voodoo Lounge'."
Uda Lange - Mataging Director,
Virgin Germanl
;iif !FTh.
tremendous success that we have
highlights has been $ephenomenal seen with Eric Moo proves that
succqe ofCass Pang, who has broken people across South East Asia are very
KFthrough the traditional male
open to and excited about local
dominance ofthe Cantonese market. Mandarin artists. So we are devoting
Equally important is the f-ast growing our energy to nurturing more and
trend for regional artists to cross over more regional talent such as
into Hong Kong."
Jeff Chang and ChangYu."
Herman Ho - Managins Dircctor,
Ken Hung Tik - Managing Director,
EM I Hong Kong
EMIThiwan
"French music is growing in many
directions. Venerable artists like
Charles Aznavour colltinue to bring
French music to intemational
audiences, while emerging artists like
Soon E MC are creating exciting
French rap music and TribalJam is
leading the way in forming the'new
jack swing' genre."
Gilbert Ohayn - President,
EM I France/ Benelax
"We are finding great success in Japan
from .ome unexpected .our.e'.The
breakthrough of Nor-wegian artist
Trine Rein and the continuing success
of the NOW series, the country's
first multi-artist, TV-advertised
( ompilation. J re ju.t two example:.
Meanwhile , we continue to have
tremendous success with our
Japanese artists, including superstar
Yumi Matsutoya and emerging star
Kenji Ozawa."
Taheshi Okkoxa - President,
Tbsltiba-EMI
Cass Pang
Kenji Ozawa

,/
TO
7
"t,'.ei{.ntinr.
trkids tL" 1
between t
worlds.
Senre ls
8aP
and Enanitos Verdes are creatind a
nusical language that resonates with.l
young people. With P"tri.i, Sor",
{
EMI alro h.rr one ofAruentina r l/rre't
"x
popr brll.rd p{ngcr '.
" !
Ednardo ]ian - President, EMI r
Argentina
"In Chilean music today there is a great
deal ofcreativity in all genres, from
folk and ballads to new lbrms such as
rock, pop and even underground
punk. At EMI, rve are working across
the spectrum by both re-issuing
classic artists like Chilean leger.rd
Cecilia as well as breaking new acts
like La Sociedad."
Luigi Martoztani - Mandging Director,
EMI Chile
Rontt.
"The potential of the Mexican music
market rem:in. er,tr rordinan de.pite
the recent economic downturn. The
popularity ofrock and pop acts
conrnue' to.kyro.kel. whlle morr
traditional nusic maintains its
audience .We have achieved great
success in all these areas with rock
strr' Azul Violeta and B.-rnJa lar ouritr
Craciela Beltran."
Mario Ruiz - President- EMI Mexicu
"Virgin France has taken the lead in the
ncw wave ofFrench music with hipl.rop
acts IAM, funk-rock band Sinclair
and Tonton David the llrst major
French ragga artist. OtherVirgin
artists, such as Alain Souchon,Julien
Clerc and Etienne Daho are the soul
of contemporary French pop."
Emmanuel de Buretel
Managixg D i re ct o/, Wtgin Franc e
"Local repertoire has always been very
important in Swedcn and major local
artists continuc to outsell
international superstars. EMI has
been a leader in local Swedish
repertoire for years, and norv with
Roxette we have a band tl-rat is also
enormously popular around the world."
Rolf Nlgren - President ,
E M I S can d.in azt i a / F i n lax d

develop a unique catalogue of
recordirgs specialising in areas of
repertoire including historic period
perfornrance and lesser-known 20th
century repertoire, featuring some of
the flnest young artistic talent of
manifested in our successful
introduction ofthe British soprano
Amanda Roocrofi."
Roger Leuis - Managing Director
Claxical, EMI Records
today - for example, Mikhail Pletnev. 'At EMI Classics, US, we are
Our success so far has demonstrated locusing on local artists
rh:r we have e.trbli'hed rhe lrbel in.r with worldwide porenti.Ll.
ilifjlJ:*1:']:#:'.' j;l*::**i (
Jonathan Miall-Director,
Virgin Classics
"People are hungry to experience
classical music in its many varied
business by developing a
.
' repertoire for an audience
outside of the traditional
classical narket, an audience
tl.rat is interested in
classics less intimidating and more
tfrg average consuner.
in packaging design, we
avoid unnecessary
Ll language and include critical
endorsements to nurture tlte classical
newcomer. At the same time, we are
building on our heritage of
.ommitnrent to artistic excellence irr
classical music.This has recently been
Gregorian chants
VanttttMac
,1
to show tunes toThe Beatles.rWe are
using sophisticated pop-rrarketing to
rttr.r( t thi\.rudien.e to.la",.rl nu sr.
projects such as 'Char.rt' and 'Vision'
as well as developing projects that
cater to their other tastes like
Broadway and film soundtracks."
Steve Maryh1- Preident,
Angel Records/EMI
C las si cs / Virgin C las sics U S
A na nda R,r'trrtt Mikl,ail flernta

"Music is more than the records we buv. iverywhere: on television, in
movies, in commercials, on the radio, even in video games. It fills our world.
Everywhere music goes, EMI Music Publishing is leading the way."
Jim Fifuld - Pruident and CEO, EMI Music
"We are in the song business. Great songs - whether they are current hits or classic
pieces - are the stars ofour business.rMe concentrate on searching out, promoting
and nurturing gified songwriters around the world, working with new emerging
artists as well as finding a new home for old classics. The bottom line is finding
songs that have the musical strength to keep their power across the years."
Martin Bardier- Chairman and CEO, EMI Masic Pablisbixg
"We are constantJy looking lbr that timeless song and songwriter who can cre.rte it.
'We work the clubs to find artists early in their careers, even before the record
labels. We have the best in the R&B business with JimmyJam and Terry Lewis, who
write and produce forJanetJackson and Boyz II Men among others, as well as the
rising star ofpop-rock bands Hootie & the Blowfrsh."
Eaan Lamberg -Vice Presid.ent, General Manager, Creatiae Operations,
EMI Masic Pablisbing
"The right music is more crucial to the success ofa movie from a marketing
perspective than ever belbre. Producers and directors now use music to help target
Grcep
,,til, tJ ii r\, i:(
FireandRain
t'r Ngw YAfk,
The Woy We Werd (Q,2Ar1,c,
LMng on the Edge
W'$rw'trhefffie From

thc,rcore,rudielceorlttr,rctrl,rrger,ruclience.SoLrndtrrrlillbLrms,ri.lltorcrr,
.rppc.rling to rccorcl bul'cls. s,ho !c. thtrl ,l! .r n.r1'ro .'nto1'l r.'ic1c t.tngc ol nr us ic ."
Pat LLLds [)irutive Vie ]rnsilert/(]rn(ral Mn ag(r, EM I Mutic l\thlishitg. biln
t+ Sountltrach Di sion
',\n increlsing nunbcr oich.irt su..esses hive been publishcr iLri'en p.r'olects Lr
thcsc projccts, ri c br ing togethcr srvcr.rl clillcrcnt creitivr clerrrei)rs ro lcliic..c .r
icrllctrvr froLlu(t. -,\ prol('ct sLr.lr rs Conrc To.gc rh cr.'.Am t'ricl S.rlutcs Tlrc tlr,rLles'.
llrerc rrc nrltchccl our llcetlrs c.ttlloguc r,, ith rornc ot tocl.n s best rountrr..rnil
Pop
,r fti\r\. rs .r pr inr r e-r.rmp1c ot I orr' $'c tird licsh $ l!s oi r it.rLisirg ourc\t.Dsr\
c L.rt.rlogua."
Paul'lanntr Viu Pnsident o/ ()alaloguL Expbilalion, EMI Mrtic l\rblitlting
l:,11 1,1 I tt t i, P r lt I i' it i I t
:l
t t t i.\ t, t l. I i t i:
Ii rt rt ('t ht i t r,/.\'iii,rtaa. i,/rr,r'
''\\'e're in Lhc proccss oiusir3, OD RO\{.rrcl on line \rrvice\ to pronrot. E\{l
io11!i\ \'i.r l viltLr,rl iuliebo-r'. \\ie .rrc.tLsoprcssiugintoLrn.liscortredtllrLiits
-.uch .rs booli publislrinr r,hcrc tr .rri :rctivcl\,fronroring usc oi our
ron3, lrric..1nr.lalitior,$'.,re.rctivelr nr,rrlirrin-q.rnd pr-oDrcllrr!.
vith soil*.r'c dcvclopers lncl supplicrs to rir.L('.rs(- oLlr
position in tbc *orlcl oicmcrgurg rcchnolosre!.'
.loanne Boris Etttrtiat Vce Prcsident, ,llusic
9roius, E,lI I Mtsic I\tltlitLixg
f
t,
lt

Continuing devclopment ofour propositions to match changing patterns of
consumer requiretrrents remaills key. Our nerv propositions fbster the customers'
s€rlse ol ownership in the products rvhich the,v rent, thereby increasing the
liltelihood ofrctcntion. Such propositions give customers the means to budget a
ser ies oi:rccluisitions over time $ ithout the *.orry of an irrevocable fr nancial
commitment. In the USA, ibr exanple, extellsive research has been conductecl to
assess horv rve approach consuners tbr n'hon traditional credjt olfers lre
inappropriate but u'ho are not attricted to the rental purchlse proposition. Such
consumers seek credit but require a'safety net'to protect thenl against unexpected
changes in their circunstances.
Outside the USA,THORN had become very dependent on
the rental of TVs and i-ideo recorders.
rnosrly rr'lrhou t llv

to
ownership opportunity. The introduction oi our new propositions allied to a
signifrcant expansion in the product categories olfered is transforming our
prospects. An important example is provided by PCs which were originaily
launched in the USA in 1991, tested in Denmark in 1993 and had been launched in
a1l majorTHORN markets by March 1995. The scope of the opportunity opened
up by this single product category is illustrated by the growth in the annual
revenue value of PC equipment on rent worldwide: from zero a few years ago, it
had risen to more than f40m byyear-end.We beiieve that demand lor multimedia
PCs represents a najor consumer opportunity IoTTHORN in the coming years.
The PC market is just one rew category in which THORN is building
substnntial rental revenues. Domestic appliances have become a mainstay ofour
product range almost everyr'here and offer significant further growth. Furniture is
well established in the Americas and initial results from its introduction alongside
home electrical products in a number ofother markets have been encouraging.
THORN's confrdence in its ability to deliver solid and sustained revenue
growth is underpinned by the opporturity implicit in an expanding product range.
Jeuellery has become a ?a?Llatfeatarc
of THORN Anerias'product range .
Ptrsonal tomputers hatr nota been
launched in aIITHORN's major
markets, whik resuhs-from the
lntro dtct i on oflurxi Lure in seural
neu markets are encouraging.

t'.'
rl
rrfrF
lr I
-l
lrr
rrt
ta
a
':fl
I l.
'r"+fl
THORN is committed to offering its
customers the best value ofany
options available to them. However,
competition in our market-place will
inevitably intensify: retailers will
strive to improve the value oftheir
offer; finance companies will broaden
their customer base through greater
sophistication in vetting applications
and in managing custorner
relationships. This is a spur to
continual investment in our
propositions and customer care. It
also underlines the necessity for
THORN to bring its global
experience and scale to bear in each
local market-place. To do this,
effective organisation is key.
THORN is now structured into
three operational management
groupings: Americas, Europe and
Asia-Pacific. The structure corresponds
to major economic blocs within which
integrated management teams can
operate and where support synergies
can be aggressively exploited. In
Americas, the service, primary
distribution and administrative
functions ofthe two brands (Rent-A-
Center and Remco) are being merged
to form a single support resource. The
previously separate UK and
Continental Europe management
structures have recently been
consolidated as THORN Europe and
various initiatives have been launched

to idcntif,v and exploit synerg-r;
opportunities across the region. Fiotel
chains, ibr instance, are ke,v
ilsritutional customers foTTHORN
Europe. More rnd more thev require
1-righ levels of scrvice co-ordlnation
and comnon operational standards
on a pan-European basis. To this end,
THORN Europe is creating a fbcused
nanageme nt structr.rre speciftcall-v ttt
,JJre'. tlre ne.J.oi.u, , Lr'lonrc-'.
THORN sees supplier
partnerships:rs an integr.rl part of'
thc process ofachieving maxitnunt
operational ethciencv in the olenll
suppl-r'chein. A distinctivc le.rture of
THORN's busincss is our continuin.e
responsibilitl' for the product lfir'r'it
has passecl into the custonrer's horle.
Close co-operation t'irh sufpliers in
terms ol product dcsign, rpare plrt
lvail:rbllin'. service lnd refurbishment
requircmelts. ils \{'eil es distributior-r
and stockholding arrdngernenrs alL
oilc r substantiel opportuuitier fol
inrprovcd elhciencl.. As the product
range is broadcncd, it becorncs lcss
prilcticnble fbTTHORN ro prolide in
lr. r., rlr..fe, . r'r\...i1.. r.., '. '
ro support el1 proclucts.The bcnefrts
of close rclatiouships rvith supplrers
arc thercfbre particularlv apparent
wtel ncl' products.rrc being intro'
duced. At the rame timc,THOllN
oliers a uurquc and rttractivc
distribution channcl to suppliers.

Fnofl
Product and propositions cannot
ensure success; ultimately thk will be
determined by the quality and
dedication of THORN employees.
During 1994195, senior managers from
around the world came together in
order to discuss the fundamentals of
THORN's business and identify the
values and commitments which
should be instilled throughout the
organisation to drive business growth
through unsurpassed curtomer care.
The overriding conclusion was simple:
excellent custoner relationsh ip s depentl
aPo exceptiottalenPloJee
cotnmitment. To giv e pr acttcal
effect to this deceptively simple
principle demands continuous
effort to improve two-way
communications, investment in
training and development
opportunities for all employees and
reward structures tailored to better
reflect the delivery ofcusromer, are.
Upgrading employee skills and
motivation is clearly a long-term
programme, but is an
inve stment
thatTHORN knows to be crucial to
sustained, strong performance.
Accordingly, regular measurement of
employee attitudes has now become a
key element in helping to determine
progress in these areas.
Our senior managers also
highlighted the need foTTHORN to
demonstrate its concern for the
communitle\ in whi, h its rustomer:
and employees live and work.This not
only refl ects THORN's responsibility
as a corporate citizen, but also the
desirability- for sound
business reasons -
ofbeing
recognised as a
trusted member
ofthe specific
communities
which we serve-
We believe that
customers will
appreciate the
wider role which we play in improving
the quality oftheir lives and that our
employees will derive a sense ofpride
and confrdence from such activities. A
number of noteworthy initiatives were
commenced during 1994195: THORN
Australia sponsored the Banksia
Environmental Award Scheme for
schoolchildren; THORN UK
appointed a Community Affairs
Director to lead and optimise its
community involvement; while
THORN Americas expanded its
United Way fund-raising to include all
co-workers and engaged in various
community-based charitable activities
throughout the USA.
Customer satisfaction is the
objective ofall ofour efforts and
investments: its continrred
achievement will keep us ahead ofthe
fre1d.Ife will continue to develop our
propositions, our product range and
our organisation to address the
opportunities arising from changing
customer needs and aspirations. By
doing so, we believe we will
continually grow the quality,
scope and profitability ofour
unique business.

Curtomer 5atisfa

From Mino[*"
Few industries are as
iast-noving and
d,vnamic as music
retailing. So it might
seem a paradox that HMV, the
organisation setting the pace in nanv
of the rvorld's ke_v music nurkets, wrrs
lounded almost 75 ye:rrs ago.
The HMV Group l.ras e arned a
reputatio1r as the most authoritative
nusic retailer in its chosen, and higl.rl-v
conpetitive, narket-places. HMV has
combinec{ its long experiencc rvith the
most imaginitive lpproaches to
attracting and satisiying the interest of
lovers of music ofall kinds. Our
'formula', which hirs take n us to
r rss rn tl.< rrrjor ntu.i. nt.rrlet. rr
'uL
both herrispheres, goes much deeper
than the razzmrtazz and bustle ofour
superstores. Underlying it is a hard
headed polic,v of investment: in prime
sites in tl.re prinary markets; in the
sophisticated systems essential to
efficienc,v and profitabilit,v in a
business rvhere margins are slender;
and, most inportantly, in the quality
ar.rd skills of our people.
lh. rr'r HVV rc, o1.l .191q \r!d.
set up in London's Oxfbrd Street in
1921. Arguably the most famous
record store in the rvorld, it still
flourishes on the s:rme site while:1
short distance away, also in Oxfbrd
122 stores
HMV Group store growth
97 stores
1985/86 -1994/95
56 stores
43 stores
102

Street, HMV's UK 1-lagship store
remains the rvorld's largest.
As rvell as being HMV's
birthplace, a few years ago the UK was
our only market-p1ace. The 43 store
now account fbr over halfofthe total
store network and ,18.8 per cent of
HMV's total turnover.
f ron small beginr.rings, HMV
has grown to be a big noise and a
201 stores
UK chain ofthat time is now a 200-
plus chain in markets extending from
the USA and Canada toJapan, Hong
Kong and Australia, as rvell as the UK
anJ L

Financial calendar
(ontacts
Index lpr"rpa *r.*"*,1
Accounting policies 35
Accounting standards 6,36,77
Acquisitions 2,46,62,63
Adjusted earnings
per share front coverflrp,8,38,47
Am€rican Depositary Receipts 78, back cover
Analysis offrnance charges 8
AnrlysisofordinaryShareholdings 78
Analysis ofprofrt and loss account 44
Annual General Meetins 32,78, bacl cover
Audit Committee
Auditors' remuneration
Balance sheets
Board Committees
Board ofDirectors
Borrowings
Cap€x Committee
Capital expenditure
Capital gains td
Cash and cash equivalents
Cash flow
Cheirman's stateme.t
Changes in accounting policies
Chanses in financ€ - rnalysis
Charitable support
Community support
Consolid,ted cash flow strtement
Consolidated profit and loss account 38
Contingent liabilities
Corporate governance
CRI-
Currencies/exchange rat€s 7
Debt: Capital enployed ratio 7
Debtors
5l
Deferred taxation 57
Dillons the Bookstore 3, 19,63
Directors'and€mployees'emoluments 66
DirectorC bi ogaphies
Directors' interes ts
Dir€ctors' remun eration 29.66
Directori repo
Directors' responsibi lities 33
2a
7J
J0
Directors' service contracts
Disposals/divestm€nts
Dividend payment dates
Dividends
Earnings per Ordinary Share
EMI Classics
EMI Music - overview
EMI Music Publishing
EMI Music-businex review
EMI Internationrl
Enployee nunbers
Employn€nt policies
Environmental Report
Exceptional items
Executive Committ€e
Ex€cutiv€ remuneration
Finance Committee
Financirl calendar
Financid commitments
Financial contents
Financial hishlights
Five year summary
Fix€d rsset invesrments
Going concern
Group profrle
HMV-overview
HMV- busin€ss ieview
Intercord TonSesetlschaft
front cov€rflap,2,38,45
EMI R€cords Group North America 3, 10, 82
ins;de front cover,43
Employees' emoluments 66
Inv€stments: own shares
Investor informa ti on
Low-cost share dealing senice
Main announcements - summary
Main developments - Iisr
Minori ty interests (equiry)
Music publishing copyrighrs
Nomination Committee
Notes to the rccounts
Operating pro6t - Group
Other cr€ditors
Otherprovisions for liabilities and charges
Pension arransements
Personal Equity Pla.s
Political contributions
Principal exchange rates
Principal subsidiaries
Profrt and loss account fotmat
Purchase ofhusinesses
Reconciliation of movements in
shareholders' funds
Registrat: contact details
Remuneration Committ€€
Research and development
R€turn on sales - Group
Rumbelows/el€ctrical retailing
Scrip dividend 30
Segmental analyses inside front cover,43
Shar€ Appr€ciation Rights
Share tapiral and rhare premium ac( ounr 58
Share options
Signifrcant investments 65
Stat€ment of Directors' resp on sibilities 33
Statem€nt of total recognis€d gains
Stocks
Substantial interests
Sustainable developnent
Trngible frxed asrets
THoRN- overview
THORN- busin€ss r€view
THORNArnericas
THORN Asia-Pacif'c
THORN Europe
THORN UK
Toshiba-EMr
Treasurypolicies
Virgin Music croup