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## Corporate Governance continued 

## Audit Committee 

The Board of Directors has established an Audit Committee and has delegated authority to this committee to consider and report to the Board on the Company’s financial reporting, internal control and risk management procedures and the work of the internal and external auditors. 

The Audit Committee comprises only independent, non-executive Directors. The members during the year were Aidan Hughes (Chairman), John McMonigall and Peter Tan. Mr Tan ceased to be a member of the Committee upon his resignation as a Director on 24 April 2012. Chang-Bun Yoon joined the Committee on 18 July 2012. As set out on page 41, the Board has determined that Aidan Hughes has recent and relevant financial experience and is the Audit Committee financial expert. He is a qualified chartered accountant, an associate member of the Institute of Chartered Accountants in England and Wales, and has significant experience as a senior accountant and Finance Director at a number of public companies. The other members of the Audit Committee have a wide range of business experience, which is evidenced by their biographies on pages 36 and 37. 

## Meetings 

The Audit Committee meets a minimum of four times a year. During 2012, the Committee met five times. Attendance at meetings held is set out in the table on page 42. The Committee also meets privately with the internal and external auditors and separately with the executive management and executive Director. 

The Audit Committee’s main responsibilities include to: 

■ Review and advise the Board on the integrity of the financial statements of the Company, including the annual report, quarterly financial statements and other formal announcements relating to the Company’s financial performance; 

■ Review and advise the Board on the effectiveness of the Company’s internal controls, including its “whistle-blowing” procedures; 

■ Review the nature and scope of the work performed by the external and internal auditors, the results of their audit work and the response of the management team; 

■ Make recommendations on the appointment and remuneration of external auditors and to monitor their performance and independence; 

■ Approve and monitor the policy for non-audit services provided by the external auditors to ensure that the independence and objectivity of the auditors is not compromised. 

In order to fulfil its duties, the Committee receives sufficient, reliable and timely information from the Dialog management team. 

The Audit Committee discharged its obligations during the year as follows: 

## Financial reporting 

During the year the Committee reviewed the financial statements of the Company, including the annual report, quarterly financial statements and other announcements relating to the Company’s financial performance and received reports from the external auditors setting out the accounting or judgemental areas that required its attention. 

## Internal controls 

The Committee considered reports from internal audit on the operation of, and issues arising from, the Group’s internal control procedures, together with observations from the external auditors and discussions with senior management. In addition, the Committee monitored the effectiveness of the Group’s risk management process. 

## Specific issues 

On occasions the Committee takes a detailed look at specific issues outside of the course of the regular Committee meetings. 

## Internal audit 

Internal audit activities and responsibilities are provided by an in-house internal audit team. An internal audit charter is also in place which outlines the objectives, authority, scope and responsibilities of internal audit. 

An internal audit plan is approved by the Committee and the work specified in the plan is designed to monitor the effectiveness of the Group’s system of internal controls. 

The ongoing results of the work of the internal audit function are reviewed by the Committee at each meeting and where appropriate issues are brought to the attention of the executive management and the Board. 

## External auditor 

The Committee is responsible for the development, implementation and monitoring of the Group’s policy on external audit. This policy assigns oversight responsibility for monitoring the independence, objectivity and compliance with ethical and regulatory requirements to the Audit Committee and day-to-day responsibility to the Chief Financial Officer. 

The external auditor audits all of the Company’s financial statements. Prior to the Audit Committee proposing the appointment or re-appointment of the external auditor, the proposed auditor provides details of any professional, financial and other relationship which may exist between the auditor and the Company that could call its independence into question. This includes the extent to which other (non-audit) services were performed for the Company in the past year or which are contracted for the following year. 

The external auditor has committed to inform the Chairman of the Audit Committee of any grounds for disqualification or impartiality of the auditor occurring during the audit, unless such grounds are eliminated. 

The external auditor has committed to report to the Audit Committee, without delay, on all facts and events of importance that should be brought to the attention of the Board of Directors, which come to light during the performance of the audit, including the Company’s financial performance and compliance with the Company’s corporate governance principles. 

The external auditor takes part in Audit Committee meetings on the annual and quarterly consolidated financial statements and reports on the essential results of its audit. 

