TANJUNG OFFSHORE BERHAD

TANJUNG OFFSHORE BERHAD (662315-U)
ANNUAL REPORT 2009
STATEMENT ON INTERNAL CONTROL
Introduction
Paragraph 15.27(b) of Listing Requirements of Bursa Securities requires the Board of Directors of public listed companies to
include a statement in the Annual Report on the state of internal controls in the Company as a Group. The Board is pleased to
provide the following statement on internal control of the Group for the fi nancial year under review prepared in accordance with
the “Statement on Internal Control - Guidance for Directors of Public Listed Companies” issued by the Institute of Internal Auditors
Malaysia and adopted by Bursa Securities.
Board Responsibilities
The Board of Directors recognises the importance of sound internal controls and risk management practices in the maintenance
of good corporate governance. The system of internal control is designed to identify and manage the principal risks facing the
Group in pursuit of its objectives. The system covers control relating to fi nancial, operational, risk management and compliance
with applicable rules and regulations.
The responsibilities of the Board in relation to the system extend to all subsidiaries of the Group. In view of the limitations
inherent in any system of internal control, the Group’s system of internal control can only manage rather than eliminate the risk
of failure to achieve corporate objectives and therefore can only provide reasonable and not absolute assurance against material
misstatement, loss and fraud.
The Group continues to take measures of the adequacy and integrity of the system of internal control. The ongoing process of
identifi cation, evaluation and management of signifi cant risk has been in place during the fi nancial year under review. This process
is reviewed on a regular basis by the Audit Committee and the Board of Directors. The key features of the internal control system
are outlined below.
Systems of Internal Control
The Group maintains a system of internal control that serves to safeguard its assets; identify and manage risk; ensure compliance
with statutory and regulatory requirements; and to ensure operational results are closely monitored and substantial variances are
promptly explained.
The salient features of the Group’s system of internal control include, inter alia :-
An organisational structure with clearly defi ned lines of responsibility and relevant authority has been set up for the Group.
The Group’s management with the assistance of a centralised human resource function sets the policies for recruitment,
training and appraisal of the employees within the Group.
Policies and procedures which sets out the compliance standards for daily operations for the respective business units of
the Group;
The Board of Directors evaluates risks involved and seeks appropriate experts’ advice in considering business proposals and
operational issues so as to make an effective decision in the best interest of the Group.
The Group’s management sets clearly defi ned authorisation procedures which are clearly documented and implemented so
as to exercise strict control on compliance therewith by all levels of employees.
The Group’s management meets monthly to review the operational and fi nancial performance of the businesses in the Group
and its subsidiaries, and to discuss key business, operational and management issues.
The Board of Directors receives and reviews quarterly performance reports on the Group and its subsidiaries from the
management, and discuss on signifi cant business and risk issues.
The Group’s management and internal auditors have conducted reviews on the system of internal control to ensure compliance
with the established policies and procedures of the Group. Weaknesses are properly communicated to management and
prompt corrective actions have been taken.
Established system of performance appraisal to monitor and maintain good performance standards from employees.
Conclusion
The Board is of the view that the system of internal control that had been implemented within the Group is sound and effective.
The internal control procedures will be reviewed continuously in order to improve and strengthen the system to ensure ongoing
adequacy, integrity and effectiveness so as to safeguard the Group’s assets and shareholders’ investments.
This statement is made in accordance with a resolution of the Board of Directors dated 28 April 2010.
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