Cathay Pacific 2014 Annual Report Download - page 50

Cathay Pacific Airways Limited
48 Corporate Governance Report
The annual Internal Audit work plan and resources are
reviewed and agreed with the Audit Committee.
Detailed control guidelines have been set and made
available to all employees of the Company about the
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.
External Auditors
The Audit Committee acts as a point of contact,
independent from management, with the external auditors
(the “auditors”). The auditors have direct access to the
Chairman of the Audit Committee, who meets with them
periodically without management present.
The Audit Committee’s duties in relation to the auditors
include:
• recommending to the Board, for approval by
shareholders, the auditors’ appointment
• approval of the auditors’ terms of engagement
• consideration of the letters of representation to be
provided to the auditors in respect of the interim and
annual financial statements
• review of reports and other ad-hoc papers from
the auditors
• annual appraisal of the quality and effectiveness of
the auditors
• assessment of the auditors’ independence and
objectivity, including the monitoring of non-audit
services provided, with a view to ensuring that their
independence and objectivity is not, and is not seen to
be, compromised
• approval of audit and non-audit fees.
Auditors’ Independence
Independence of the auditors is of critical importance to the
Audit Committee, the Board and shareholders. The auditors
write annually to the members of the Audit Committee
confirming that they are independent accountants within
the meaning of Section 290 of the Code of Ethics for
Professional Accountants of the Hong Kong Institute of
Certified Public Accountants and that they are not aware of
any matters which may reasonably be thought to bear on
their independence. The Audit Committee assesses the
independence of the auditors by considering and
discussing each such letter (and having regard to the fees
payable to the auditors for audit and non-audit work and
the nature of the non-audit work) at a meeting of the
Audit Committee.
Provision of Non-audit Services
In deciding whether the auditors should provide non-audit
services the following key principles are considered:
• the auditors should not audit their own firm’s work
• the auditors should not make management decisions
• the auditors’ independence should not be impaired
• quality of service.
In addition, any services which may be considered to be in
conflict with the role of the auditors must be submitted to
the Audit Committee for approval prior to engagement,
regardless of the amounts involved.
In 2014 the total remuneration paid to the external
auditors was HK$28 million, being HK$15 million for audit,
HK$10 million for tax advice and HK$3 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
General Manager Corporate Safety & Security 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.
Shareholders
Communication with Shareholders and Investors
The Board and senior management recognise their
responsibility to represent the interests of all shareholders
and to maximise shareholder value. Communication with
shareholders and accountability to shareholders is a high
priority of the Company.