Thorn-EMI 1995 Annual Report

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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.
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accounts
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Operating profit
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ETHoRN EMt Annual General Meeting T
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It is the Remuneration Committee's
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(d) On exercise of options the Comp
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7. Ordinary Resolution THAT the Dir
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Chairman's statement The year was o
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Chairman's statement economy and to
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Financial review Simon Duffy Group
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Financial review Other exceptional
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EMI a repeat performance Country su
Page 24 and 25: strong releases Steven Crlftls Chap
Page 26 and 27: increasing Pace of THORN achieved
Page 28 and 29: Reshaping business NewZealand was e
Page 30 and 31: HMV customer-driven performance An
Page 32 and 33: lnvestih$ in tomorrow's world...
Page 34 and 35: A ta rg eted programme of community
Page 36 and 37: Prog ress towa rds env:ronmental im
Page 38 and 39: controlling key impacts CO, emifted
Page 40 and 41: Board of Directors Sir Colin Southg
Page 42 and 43: Directors'Report for the year ended
Page 44 and 45: Directors' Report The internal cont
Page 46 and 47: Auditors'report Report of the Audit
Page 48 and 49: Accounting policies Depreciation of
Page 50 and 51: Consolidated profit and loss accoun
Page 52 and 53: Group Fixed arsetr Music publis
Page 54 and 55: Statement of total recognised galns
Page 56 and 57: Notes to the accountr 2. Analysis o
Page 58 and 59: Notes to the accounts 8. Exceptlona
Page 60 and 61: Noter to the accounts I l.Tanglble
Page 62 and 63: Notes to the accounts 12, Flxed ass
Page 64 and 65: Notes to the account3 15. lnvestmen
Page 66 and 67: Noter to the accounts 16. Borrowing
Page 68 and 69: Notes to the accounts of changer i
Page 70 and 71: Notes to the a(counts 23.5hare capi
Page 72 and 73: NoteJ to the accounts 26. tinancial
Page 76 and 77: Notes to the a(counts 3O. Purchase
Page 78 and 79: Notes to the accounts 32. Directors
Page 84 and 85: Notes to the a
Page 86 and 87: Notes to the a(counts 32, Directors
Page 88 and 89: Five year summary for the years to
Page 90 and 91: lnvestor information Financial cale
Page 92 and 93: Tlte nz,er and bus;flut otnlaieu pa
Page 95 and 96: "The British music scene is enioyin
Page 97 and 98: From {\ "Alternative music is quick
Page 99: iii0 . ,'.' H'] .I . ar
Page 103 and 104: develop a unique catalogue of recor
Page 105: thc,rcore,rudielceorlttr,rctrl,rrge
Page 109 and 110: to ownership opportunity. The intro
Page 111 and 112: to idcntif,v and exploit synerg-r;
Page 113 and 114: Curtomer 5atisfa
Page 115: Street, HMV's UK 1-lagship store re
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Thorn-EMI 1995 Annual Report

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