If there is a single defining moment in the massive retrospective collection released tomorrow to mark Virgin Records's 40th anniversary, it comes on the first of three discs covering the years 1976 to 1979.

More precisely, it comes 79 seconds into EMI by the Sex Pistols, at the moment John Lydon snarls: "We are an addition. We are ruled by none."

Lydon is talking about the Pistols themselves, of course, and a chequered career which had already seen them booted off record labels EMI and A&M by the spring of 1977. But the line could equally apply to the label on which they finally settled and which a few months later would release their seminal debut album, Never Mind The Bollocks, Here's The Sex Pistols.

Virgin Records was certainly an addition. It was founded in 1972 by 21-year-old public school-educated entrepreneur Richard Branson, who by then was already running a mail order record business and a shop-cum-hippie hangout on London's Oxford Street.

He wanted to shake up the music industry by undercutting the retail operations of his bigger competitors and creating a new, top-to-bottom music operation with a label at its head and its feet on the high street. If you're looking for the wellspring from which other countercultural business empires rose - Apple, for instance - you can find it here. It's no surprise that Branson and Sex Pistols manager Malcolm McLaren detested each other: both were disruptors, tricksters, mischief-makers.

It's true, too, that Virgin was ruled by none - except perhaps Her Majesty's Revenue & Customs, which slapped Branson and his fledgling operation with a £40,000 tax bill in 1971. Backed by Coutts Bank he came up smiling, however, and within a year had added both the UK's first residential recording studio - The Manor, a converted country house in Oxfordshire - and the Virgin Records label itself. In 1973, bearing the catalogue number V2001 and with a logo designed by artist Roger Dean, the label released its first album, Mike Oldfield's Tubular Bells. It would spend 279 weeks in the British album charts, though its climb to number one was so slow that Oldfield's follow-up, 1974's Hergest Ridge, was already in the top spot when it got there.

Four decades on, the Virgin Records name remains, though Branson bowed out in 1992 when he sold the business to what was then Thorn EMI. He never liked music much anyway, and he had other plans for what was by then a brand with worldwide recognition. The label is currently owned by Universal Music Group, which bought EMI in 2012, and among its recent signings is Glasgow band Chvrches. In March 2013 - irony of ironies - the label was rebranded as Virgin EMI. John Lydon probably wasn't the only one smiling.

So how do you celebrate 40 years of music-making? If you're Virgin, you do it with a 15-CD set which, as well as offering a retrospective of tracks from seminal releases including Tubular Bells and Never Mind The Bollocks, offers rarities and "lost" recordings. Under the grandiose banner 40 Years Of Disruptions, there is also a series of London concerts planned - Emeli Sandé plays tomorrow, Simple Minds on Thursday - as well as a recreation of the original Oxford Street shop and an exhibition of photographs, stage costumes and cover art.

The CDs themselves are split into five "chapters" of three CDs each. Each "chapter" tells a different aspect of the Virgin story. So Losing Our Virginity deals with the pre-punk years, when Virgin was home to people like Oldfield, stoner psychedelia acts such as Gong and Henry Cow, German Krautrock band Faust and remnants of the so-called Canterbury Scene that produced Soft Machine.

New Gold Dreams covers the post-punk and New Romantic era (there are tracks by Culture Club, Simple Minds, Japan, The Human League and, er, The Flying Pickets) while Methods Of Dance and Fascinating Rhythms cover the electronica and dance music of the pre- and post-Acid House years. Here you will find everyone from Sparks and Tangerine Dream's noodler-in-chief Edgar Froese to The Chemical Brothers, Massive Attack and Swedish House Mafia.

But it's the set titled Never Trust A Hippy which contains the music that has most defined Virgin Records: punk and New Wave. In 1975, the label had tried to sign 10CC and The Rolling Stones and been turned down by both bands. Just 24 months later that must have looked like a blessing as Virgin snapped up te Sex Pistols and, almost overnight, became one of the hottest labels on the planet. The introduction just a year later of the Virgin "signature" also gave them one of the world's most recognisable logos. Virgin missed out on The Clash and The Buzzcocks, but nestling alongside The Sex Pistols in the roster of punk talent were XTC, The Ruts, X-Ray Spex, Magazine and, from Scotland, The Skids.

There are notable absences from this collection, however. Despite being one of the biggest acts on the planet in the mid-1990s, there is nothing by the Spice Girls, whose 1996 debut on Virgin went platinum in 20 countries. Nor is there anything from The Verve, who were signed to Virgin subsidiary Hut Records. Daft Punk are another glaring miss and while there are four tracks by the Sex Pistols (including Neil Barnes's thumping 2002 remix of God Save The Queen) there are six by Public Image Ltd. Go figure.

A niche label, Virgin was not. Eccentric, risk-taking, diverse and game-changing, it certainly was. No-one could make any claims of greatness for Sandra's 1985 Europop hit (I'll Never Be) Maria Magdalena or Snakefinger's frankly woeful cover of Kraftwerk's The Model - both feature here - but in a 40-year career, everyone is allowed a few duds. And alongside them, perhaps the rest shine that little bit brighter.