AUDIT AND RISK COMMITTEE DUTIES The Group has maintained a robust financial position and continued to The principal duties of the Committee are to: maintain and improve its internal • Oversee the integrity of the Group’s controls and risk management, financial statements and public announcements relating to financial despite being significantly performance. impacted by ongoing challenges • Hold the relationship with the external auditor, agree the audit fee and oversee due to government restrictions.” the external audit process. • Establish formal and transparent arrangements for considering how the The Audit and Risk Committee’s twice-yearly review of risk Company should apply the corporate management and internal controls has continued; in February reporting, risk management and internal 2021 we were able to remove ‘Brexit’ from our principal control principles. risk register, reflecting the successful management by the • Oversee the internal audit process. business of the transition, and the fact that any ongoing • Monitor the effectiveness of financial impact is not material. As part of the Group’s increasing controls and the process for identifying focus on climate change and sustainability, management and managing risk throughout the Group. has worked with Carbon Trust to carry out an assessment • Monitor the financial reporting process of the risks and opportunities presented by climate change. and submit recommendations. The output of this review informed the Board’s strategy discussions in May, and have been fed into the principal • Monitor the statutory audit of the Annual risk register. Further details are in the Risks and Risk Report and financial statements. Management section on pages 76 to 78, the Principal Risks • Review and monitor the external auditor’s and Uncertainties section on pages 79 to 88, and in the effectiveness, independence and the preliminary report on page 48 prepared in line with the Task provision of additional services. Force on Climate-related Financial Disclosures (TCFD). THE FULL TERMS OF REFERENCE FOR THE Regulators and shareholders continue to raise the bar COMMITTEE CAN BE FOUND ON THE on the content and quality of narrative disclosures in the GROUP’S WEBSITE, CORPORATE.DUNELM. annual report, particularly on how the Directors have COM. THESE TERMS WERE LAST REVIEWED discharged their duties under s172 Companies Act, and on BY THE COMMITTEE IN JUNE 2021. environmental, social and governance matters, particularly climate change. The Committee has reviewed management plans to further improve andenhance our reporting, as well as the preparations to fully report under TCFD from next year. I am confident that we will continue to develop the transparency of our reporting in this area. The Committee has considered the proposals for the reform of audit and corporate governance set out in the consultation paper issued by Department for Business, Energy and Industrial Strategy (BEIS) in March 2021. The Board and the Committee support measures that increase the quality of governance, audit and transparency for the benefit of our shareholders and other stakeholders. We are already assessing what actions we would need to take to introduce an attestation statement surrounding the Internal Control Financial Review process and would expect to be well prepared if new regulations are introduced as a result of the consultation. Yours faithfully, Ian Bull Chair of Audit and Risk Committee 8 September 2021 DUNELM GROUP PLC ANNUAL REPORT & ACCOUNTS 2021 131 GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTSOTHER INFORMATION