Thorn-EMI 1995 Annual Report

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