Cathay Pacific 2006 Annual Report Download - page 40

Annual fees of independent non-executive Directors in
2006 were as follows:
Director’s fee HK$160,000
Fee for serving on Audit Committee HK$150,000
Fee for serving on Remuneration
Committee HK$50,000
The Remuneration Committee held two meetings
during 2006, the attendance of which was as follows:
James Hughes-Hallett (2/2), Peter Lee (2/2) and
Tung Chee Chen (2/2).
Audit Committee
The Audit Committee is responsible to the Board and
consists of four non-executive Directors, three of
whom are independent. The members currently are
Zhang Lan, Peter Lee and Jack So. It is chaired by an
independent non-executive Director, Raymond Or.
The Committee reviewed the completeness, accuracy
and fairness of the Company’s reports and accounts
and provided assurance to the Board that these
comply with accounting standards, stock exchange
and legal requirements. The Committee also reviewed
the adequacy and effectiveness of the internal control
and risk management systems. It reviewed the work
done by the internal and external auditors, the relevant
fees and terms, results of audits performed by the
external auditors and appropriate actions required on
significant control weaknesses. The external auditors,
the Finance Director and the Internal Audit Manager
also attended these meetings.
The Audit Committee held three meetings during
2006, the attendance of which, taking into account
dates of appointment or resignation, was as follows:
Peter Lee (3/3), Vernon Moore (2/2), Raymond Or (3/3),
Jack So (3/3) and Zhang Lan (1/1).
Expenditure Control Committee
The Expenditure Control Committee meets monthly
to evaluate and approve capital expenditure. It is
chaired by one executive Director, Tony Tyler and
comprises two executive Directors, Robert Atkinson
and Augustus Tang.
Internal Control and Internal Audit
The internal control system has been designed to
safeguard corporate assets, maintaining 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 auditee 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.
Cathay Pacific Airways Limited Annual Report 2006
38
Corporate Governance