Corporate governance report Audit, risk and Dear Shareholder This year has continued to be impacted by the Covid-19 internal control pandemic and the substantial impact on our customers,colleagues and operations. It is notable therefore that the Group has maintained a robust financial position and continued to Audit and Risk maintain and improve its internal controls and risk management, despite being significantly impacted by ongoing challenges Committee report due to government restrictions resulting in store and support centre closures and revised ways of working, and industry-wide international supply disruption, including Brexit. The full- and half-year audit processes, though more complex due to the pandemic, were completed within the planned timetable. I would like to thank the Finance team and PwC for the additional planning and commitment that contributed to this. Last year, we agreed a set of objectives and targets for the Committee to improve our effectiveness over the next three financial years. You will read below that this has also been a busy and productive year around the reviews of financial and Ian Bull operational controls and processes, many of which have been Chair of Audit and Risk readily agreed and adopted by the management into plans for Committee the coming years. The Committee has regularly reviewed these and is pleased to report that good progress has been made against the objectives and plans despite the need to balance Audit and Risk Committee membership ongoing and continuous improvements with recovery and The following Directors served on the Committee during the re-planning around the substantia dil srpouti n that everyone has year, and meeting attendance is set out in the table below: felt from the crisis. More details are set out in this report. I am satisfied that overall the Group is achieving good practice. Meetings Member From To attended Skill area KPMG completed their first full year as our Internal Auditor. Ian Bull 10 July To date 3/3 Financial During the year they completed reports on payroll, core (Chair) 2019 controls in finance and supporting IT controls and cyber William Reeve 1 July To date 3/3 Operational security, andscoped out their next planned review of 2015 supplier payments. These topics were identified through the Peter Ruis 10 To date 3/3 Operational initial controls ‘health check’ that they completed just after September they were appointed in FY20, and by the risk management 2015 process. Management has already accepted the majority of Arja Taaveniku1 15 February To date 1/1 Operational the recommendations and putin place plans and resource 2021 to address them. Good progress has been made during Paula Vennells2 4 September 25 April 2/2 Operational the year against the agreed actions. KPMG also completed 2019 2021 a risk assurance map which shows the assurance that the 1. Arja Taaveniku was appointed to the Board during the financial year andCommittee and the Board receive that the principal risk joined the Committee on appointment. mitigations are working effectively; this will also inform the 2. Paula Vennells stepped down from the Board during the financial year.topics in the Internal Audit plan. The Company Secretary, Dawn Durrant, acts as secretary to the Committee. The Committee also met in September 2021. The Board also commissioned Deloitte to conduct an The Chief Executive Officer, Chief Financial Officer, the Chairman andassessment of our operating capabilities, processes and Deputy Chairmanof the Board usuallyattend meetings by invittiona . technologies to assess their robustness as the business In addition, the following attended: Group Finance Director, Chief Information Officer, representatives of PwC (for external audit matters) andcontinues togrow in scale and complexity. Further details representatives of KPMG (for internal audit matters). are in the report below. The output of this assessment has The Board considers that Ian Bull has recent and relevant financial been built into a three-year plan to upgrade our core systems experience to chair the Committee, byvirtue of his professional qualificationand processes. While overall progress is being monitored by and his previous executive roles, including as Chief Financial Officer of Parkdean Resorts Group, Ladbrokes plc and Greene King plc. Members of the Board, the Committee has oversight of any aspects that the Committee also demonstrate a breadth of experience across the retailimpact internal controls. and consumer goods sector through their current and previous roles – please see the Directors’ biographies on pages 96 to 99 for full details. Our Executive Board has continued to build on our risk management by establishing a Risk and Resilience Committee, which meets regularly to carry out a ‘deep dive’ peer review of each of our principal risks by rotation. While this is not a formal Board committee, the conclusions and actions are circulated to the Board and the Audit and Risk Committee, and feed into theBoard risk review process. The Committee has also adopted a formal ‘Risk Appetite Statement’, linked to our corporate purpose and strategic ambitions, and this is embedded into our risk management process through a monthly review of KPIs by the Risk and Resilience Committee. 130 DUNELM GROUP PLCANNUAL REPORT & ACCOUNTS 2021