20 ... Dialog Semiconductor Plc | Annual report and accounts 2012 |  Section 2 | Business review “The Internet of Things is dependent  on having an ultra low energy wireless  standard that has ceiling to cellar reach  and beyond, sensors that can last a decade with a single AAA battery pack and the addition of voice control or telephony if required. Dialog has  developed SmartPulse™ to deliver this  smart home functionality and more.” Sean McGrath Vice President and General Manager  Connectivity, Automotive and Industrial Group 21 The Internet of Things is at last becoming a reality. Consumers’ desire for greater comfort, and convenience, to conserve energy in their homes  and the advent of the always-on computing power of the smartphone and tablet is driving a new wave of innovation. We will start to see the emergence of wireless light switches and thermostats, smoke and gas detectors, home central locking systems and medical pendants for the elderly that can be controlled and monitored from a single smartphone or tablet app. 10 11 Dialog Semiconductor Plc | Annual report and accounts 2012 |  Section 1 | Overview “Consumer electronics manufacturers in personal,  portable, connected markets build products based on  standard application processor platforms. Dialog is a  leader in forging strategic partnerships and supplying  companion power management ICs with the world’s  leading application processor providers to deliver its  customers fully optimised solutions.” Mark Tyndall Vice President, Business Development and Corporate Strategy “Dialog’s customers increasingly use our audio CODECs to deliver natural,  realistic audio with a wider sound field  to the wireless and wired headphones  and small form factor speakers that  consumers increasingly want to use.  We also apply our connectivity expertise  to high-quality digital cordless phones  and next generation wireless  microphones and headsets.” Andrew Austin Vice President, Sales  Dialog’s audio CODECs provide full-range, high fidelity audio capture and playback to a variety of portable devices and audio accessories. They feature programmable Digital Signal Processors (DSPs) that offload audio software from the host processor and include advanced echo cancellation technology to filter out extreme background noise. They are complemented by our amplifier technology to provide a rich, deep bass and clear high frequencies to wireless and wired headphones, speakers and handsets.  ... 04 05 Dialog Semiconductor Plc | Annual report and accounts 2012 |  Section 1 | Overview ...$^{Consumers today want to be able to use exciting new entertainment }$ apps on their smartphones and tablets and interact via high-speed, 4G LTE networks. Video streaming, sharing and calls are becoming  increasingly popular, alongside enhanced gaming, GPS, data and  voice services. ...$^{“Dialog’s innovative technology}$ increases the battery life that a  smartphone or tablet can deliver,  enabling consumers to multi-task and  enjoy high-quality multimedia content  on the go. Our power management  chips can be programmed to enable  each of the multicore processors to be  powered in and out of sleep mode in  specific sequences and meet the exact  voltage and current requirements  of each sub-system, including the  application and baseband processors,  display, audio, graphics, GPS and  memory components.” Udo Kratz Senior Vice President, General Manager, Mobile Systems Business Group P20-21 › P10-11 › P04-05 › Section 4 | Consolidated financial  statements and notes Section 1 | Overview Section 2 | Business review Section 3 | Management and governance Section 5 | Company financial statements  and notes Section 6 | Additional information 117  Glossary 119 Advisers and corporate information 120 Group directory 02 Dialog at a glance and our markets 06 Chairman’s statement 07 Dialog Semiconductor shares in 2012 12 Our business strategy and performance 16 Our products and key customers 14 Chief Executive’s review 22 Financial review 27 Risks and their management 30 Sustainability 34 Executive management 36 Board of Directors 38 Directors’ report 40 Corporate Governance 46 Directors’ remuneration report  53 Statement of Directors’ responsibilities 53 Responsibility statement 54 Independent Auditors’ report to the  members of Dialog Semiconductor Plc 55 Consolidated statement of  financial position 56 Consolidated income statement 57 Consolidated statement of comprehensive income 58 Consolidated statement of cash flows 59 Consolidated statement of changes  in equity 60 Notes to the consolidated  financial statements 113 Company statement of financial position 114 Company statement of changes in equity 115 Company statement of cash flows 116 Notes to the Company financial statements