Cathay Pacific 2011 Annual Report Download - page 47

Cathay Pacific Airways Limited Annual Report 2011 45
Expenditure Control Committee
The Expenditure Control Committee meets monthly to
evaluate and approve capital expenditure. It is chaired by
one executive Director, Ivan Chu and includes two other
executive Directors, W.E. James Barrington and
Martin Murray.
Internal Control and Internal Audit
The internal control system has been designed to
safeguard corporate assets, maintain proper accounting
records and ensure transactions are executed in
accordance with management’s authorisation. The
system comprises a well-established organisational
structure and comprehensive policies and standards.
The Internal Audit Department provides an independent
review of the adequacy and effectiveness of the internal
control system. The audit plan, which is prepared based
on risk assessment methodology, is discussed and
agreed every year with the Audit Committee. In addition
to its agreed annual schedule of work, the Department
conducts other special reviews as required. The Internal
Audit Manager has direct access to the Audit Committee.
Audit reports are sent to the Chief Operating Officer, the
Finance Director, external auditors and the relevant
management of the audited department. A summary of
major audit findings is reported quarterly to the Board and
reviewed by the Audit Committee. As a key criterion of
assessing the effectiveness of the internal control
system, the Board and the Committee actively monitor
the number and seriousness of findings raised by the
Internal Audit Department and also the corrective actions
taken by relevant departments.
Detailed control guidelines have been set and made
available to all employees of the Company regarding
handling and dissemination of corporate data which is
price sensitive.
Systems and procedures are in place to identify, control
and report on major risks, including business, safety,
legal, financial, environmental and reputational risks.
Exposures to these risks are monitored by the Board
with the assistance of various committees and
senior management.
The Board is responsible for the system of internal control
and for reviewing its effectiveness. For the year under
review, the Board considered that the Company’s internal
control system is adequate and effective and the
Company has complied with the code provisions on
internal control of the CG Code.
External Auditors
The external auditors are primarily responsible for auditing
and reporting on the annual accounts. In 2011 the total
remuneration paid to the external auditors was HK$28
million, being HK$11 million for audit, HK$16 million for
tax advice and HK$1 million for other professional
services.
Airline Safety Review Committee
The Airline Safety Review Committee meets monthly to
review the Company’s exposure to operational risk. It
reviews the work of the Cabin Safety Review Committee,
the Operational Ramp Safety Committee and the
Engineering Mandatory Occurrence Report Meeting. It is
chaired by the Head of Corporate Safety and comprises
Directors and senior management of all operational
departments as well as senior management from the
ground handling company, HAS, and the aircraft
maintenance company, HAECO.
Investor Relations
The Company continues to enhance relationships and
communication with its investors. Extensive information
about the Company’s performance and activities is
provided in the Annual Report and the Interim Report
which are sent to shareholders. Regular dialogue with
institutional investors and analysts is in place to keep
them abreast of the Company’s development. Inquiries
from investors are dealt with in an informative and timely
manner. All shareholders are encouraged to attend the
annual general meeting to discuss matters relating to the
Company. Any inquiries from shareholders can be
addressed to the Corporate Communication Department
whose contact details are given on page 104.
In order to promote effective communication, the
Company maintains its website at www.cathaypacific.com
on which financial and other information relating to the
Company and its business is disclosed.
Shareholders may request an extraordinary general
meeting to be convened in accordance with Section 113
of the Companies Ordinance.
Corporate Governance