Directors’ Report |  continued Human resources:  Existing processes to recruit,  develop and retain talented individuals and promote  their mobility within a decentralised Group may be  inadequate thus giving rise to management attrition  and difficulties in succession planning and potentially  impeding the continued realisation of the Group’s  core strategy of performance and growth. Insurance counterparties:  In its worldwide insurance  programme, the Group carries appropriate levels of  insurance for typical business risks (including  product liability) with various leading insurance  companies. However, in the event of the failure of  one or more of its insurance counterparties, the  Group could be impacted by losses where recovery  from such counterparties is not possible.  provisions contained in the UK Corporate  Governance Code, the Board has decided that all  Directors eligible for re-election should retire at each  Annual General Meeting and offer themselves for  re-election.  Section 160(2) of the Companies Act, 1963 provides  that the auditor of an Irish company shall be  automatically re-appointed at a company’s annual  general meeting unless the auditor has given notice  in writing of his unwillingness to be re-appointed or a  resolution has been passed at that meeting  appointing someone else or providing expressly that  the incumbent auditor shall not be re-appointed. In  this respect, Irish company law differs from the  requirements that apply in other jurisdictions, for  example in the UK, where auditors must be  re-appointed annually by shareholders at the Annual  General Meeting. The Auditors, Ernst & Young,  Chartered Accountants, are willing to continue in  office.  Foreign currency translation:  CRH’s activities are  conducted primarily in the local currency of the  country of operation resulting in low levels of foreign  currency transactional risk. The principal foreign  exchange risks to which the consolidated financial  statements are exposed pertain to adverse  movements in reported results when translated into  euro (which is the Group’s reporting currency)  together with declines in the euro value of the  Group’s net investments which are denominated in a  wide basket of currencies other than the euro. Corporate communications:  As a publicly-listed  company, CRH undertakes regular communication  with its stakeholders. Given that these  communications may contain forward-looking  statements, which by their nature involve  uncertainty, actual results and developments may  differ from those communicated due to a variety of  external and internal factors giving rise to  reputational risk. Corporate Social Responsibility:  CRH is subject to  stringent and evolving laws, regulations, standards  and best practices in the area of Corporate Social  Responsibility (comprising corporate governance,  environmental management and climate change  (specifically capping of emissions), health and safety  management and social performance) which may  give rise to increased ongoing remediation and/or  other compliance costs and may adversely affect  the Group’s reported results and financial condition. Goodwill impairment:  Significant under-performance  in any of CRH’s major cash-generating units may  give rise to a material write-down of goodwill which  would have a substantial impact on the Group’s  income and equity.  As required under Irish law, a resolution authorising  the Directors to fix the remuneration of the Auditors  will be submitted to the Annual General Meeting.  A special resolution will be proposed at the Annual  General Meeting to renew the Directors’ authority to  disapply statutory pre-emption rights in relation to  allotments of shares for cash. In respect of  allotments other than for rights issues to ordinary  shareholders and employees’ share schemes, the  authority is limited to Ordinary/Income Shares  (including the re-issue of Treasury Shares) having a  nominal value of €12,474,000, representing 5%  approximately of the issued Ordinary/Income share  capital at 25 February 2013. This authority will expire  on the earlier of the date of the Annual General  Meeting in 2014 or 7 August 2014.  Inspections by Public Company Accounting  Oversight Board (‘PCAOB’):  Our auditors, like other  independent registered public accounting firms  operating in Ireland and a number of other European  countries, are not currently permitted to be subject  to inspection by the PCAOB, and as such, investors  are deprived of the benefits of PCAOB inspections.  The principal financial and reporting risks and  uncertainties are subject to further disclosure in the  notes to the consolidated financial statements and  the accompanying accounting policies. Laws and regulations:  CRH is subject to many laws  and regulations (both local and international),  including those relating to competition law,  corruption and fraud, throughout the many  jurisdictions in which it operates and is thus exposed  to changes in those laws and regulations and to the  outcome of any investigations conducted by  governmental, international and other regulatory  authorities, which may result in the imposition of  fines and/or sanctions for non-compliance and may  damage the Group’s reputation. As demonstrated by CRH’s proven record of  superior performance, the Group’s management  team has substantial and long experience in dealing  with the impact of these risks. The mechanisms  through which the principal risks and uncertainties  are managed are addressed in the “Risk  Management and Internal Control” section of the  Corporate Governance Report. The Directors intend to follow the Pre-Emption  Group’s Statement of Principles in that allotments of  shares for cash and the re-issue of Treasury Shares  on a non pre-emptive basis, other than for rights  issues to ordinary shareholders and employees’  share schemes, will not exceed 7.5% of the issued  Ordinary/Income share capital within a rolling three  year period without prior consultation with  shareholders.  During 2012, 1,317,872 (2011: 287,950) Treasury  Shares were re-issued under the Group’s Share  Schemes. In addition, 226,617 (2011: 150,330)  Ordinary Shares were transferred to the Trustees of  the CRH plc Employee Benefit Trust at €15.82 per  Ordinary Share for the purpose of satisfying the  release of awards, made under the CRH 2006  Performance Share Plan, which vested in 2012. As  at 25 February 2013, 7,360,558 shares were held  as Treasury Shares, equivalent to 1.01% of the  Ordinary Shares in issue (excluding Treasury  Shares). A special resolution will be proposed at the 2013  Annual General Meeting to renew the authority of  the Company, or any of its subsidiaries, to purchase  up to 10% of the Company’s Ordinary/ Income  Shares in issue at the date of the Annual General  Under the Company’s Articles of Association,  co-opted Directors are required to submit  themselves to shareholders for election at the  Annual General Meeting following their appointment  and all the Directors are required to submit  themselves for re-election at intervals of not more  than three years. However, in accordance with the  Ms. H.A. McSharry was appointed to the Board on  22 February 2012.  Mr. K. McGowan retired from the Board on 9 May 2012.  Resolution 3 to be proposed at the Annual General  Meeting deals with the Report on Directors’  Remuneration, as set out on pages 54 to 67, which  the Board has decided to present to shareholders  for the purposes of a non-binding advisory vote.  This is in line with international best practice and the  Directors believe that the resolution will afford  shareholders an opportunity to have a “say on pay”. Financial instruments:  CRH uses financial  instruments throughout its businesses giving rise to  interest rate, foreign currency, credit/counterparty  and liquidity risks. A downgrade of CRH’s credit  ratings may give rise to increases in funding costs in  respect of future debt and may impair the Group’s  ability to raise funds on acceptable terms. In  addition, against the backdrop of heightened  uncertainties, in particular in the eurozone,  insolvency of the financial institutions with which  CRH conducts business (or a downgrade in their  credit ratings) may lead to losses in CRH’s liquid  investments, derivative assets and cash and cash  equivalents balances or render it more difficult either  to utilise the Group’s existing debt capacity or  otherwise obtain financing for the Group’s  operations.  Defined benefit pension schemes:  CRH operates  a number of defined benefit pension schemes in  certain of its operating jurisdictions. The assets  and liabilities of these schemes may exhibit  significant period-on-period volatility attributable  primarily to asset valuations, changes in bond  yields and longevity. In addition to future service  contributions, significant cash contributions may  be required to remediate deficits applicable to  past service.  CRH 69 Transactions in Own Shares Report on Directors’ Remuneration Board of Directors Principal financial and reporting risks and  uncertainties Disapplication of Pre-emption Rights Auditors 