Audit Committee’s time allocation in 2012 26% 17% 25% 26% 4% 2% Financial reporting/results announcements/  impairment/audit results External auditors: planning; independence;  management letters Internal audit/IT/control environment Internal controls and risk management/  enterprise risk management/pensions Compliance and ethics/governance  developments Review of Committee’s performance As part of its response to the difficult trading  conditions in recent years, the Group has  implemented a programme of cost savings and  has periodically announced updates on the  annualised savings under that programme. The  Head of Internal Audit reviews these savings, and  the related implementation costs, and reports his  findings each year to the Committee. The work of the Committee is outlined on page  46. During 2012, we gave particular emphasis to  the following matters: Governance developments – the impairment charges recorded in the 2012  financial statements, in particular, in respect of  the Group’s minority stake in Corporación  Uniland, S.A. (‘Uniland’). For further details,  please see note 10 to the financial statements  on page 90; – the models used for, and the outcome of, the  goodwill impairment and sensitivity analysis  referred to in note 15 to the financial  statements; – the plans and initiatives in place to mitigate the  Group’s pension scheme liabilities; – the implementation of significant IT projects  across the Group; – the Group’s enterprise risk management  systems; – the rules of the Public Company Accounting  Oversight Board (‘PCAOB’) and, in particular,  the potential effects on auditor independence  of Ernst & Young providing those tax-related  services included in the Group’s policy on  non-audit services.  Updates to the UK Corporate Governance Code,  which are effective for accounting periods  beginning on or after 1 October 2012, were  published in September 2012. Among the  changes introduced in the revised Code was a  requirement that FTSE350 companies should put  the external audit out to tender at least once every  10 years. To avoid any major disruptions to the  audit market resulting from a large number of  companies tendering at the same time, the UK  Financial Reporting Council (FRC) has suggested  some transitional arrangements whereby the  timing of audit tenders would be aligned with the  cycle for rotating the audit engagement partner,  which for CRH would be after the 2015 audit. We  will consider the new provisions in detail during  the course of 2013, when forthcoming additional  guidance on this matter is published by the FRC.  We also await, with interest, clarification on EU  proposals in the area of audit tenure, which may  require mandatory audit rotation after a set period.  Other changes to the UK Corporate Governance  Code included revised provisions regarding  reporting to the Board and to shareholders.  The Committee also met with senior finance  personnel from the Group’s operations to  discuss inter-alia, internal audit review findings,  the implementation of resulting changes to  control structures, work in relation to improving  the control environment in each Division,  co-ordination with the work of the external  auditors and actions being taken to prevent  fraud. In addition, the Committee met with the  Head of Compliance and Ethics to review the  Group’s compliance and ethics programme,  including the compliance organisation, new or  revised codes and policies and the core training  modules (incorporating Code of Business  Conduct, Anti-Bribery Corruption & Fraud and  Competition Law). In order to take account of the updates to the UK  Corporate Governance Code referred to above,  the Committee’s Terms of Reference have been  updated. Terms of reference Jan Maarten de Jong  Audit Committee Chairman February 2013 CRH 45