Cathay Pacific 2009 Annual Report Download - page 47

Corporate Governance
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
Fan Cheng, Irene Lee and Peter Wong. It is chaired by
an independent non-executive Director, Jack So.
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, including the adequacy of
the resources, qualifications and experience of the
staff of the Company’s accounting and financial
reporting function, and their training programmes and
budget. 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
2009, the attendance of which, taking into account
dates of appointment or resignation/cessation, was as
follows:
Peter Lee (2/2), Vernon Moore (1/1), Raymond Or (1/1),
Jack So (3/3), Peter Wong (1/1) and Zhang Lan (0/2).
Expenditure Control Committee
The Expenditure Control Committee meets monthly to
evaluate and approve capital expenditure. It is chaired
by one executive Director, John Slosar and includes
two other executive Directors, James E. Hughes-
Hallett and Ian Shiu.
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 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.
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.
Cathay Pacific Airways Limited Annual Report 2009 45