Corporate governance report Audit, risk and internal control continued SUMMARY OF PRINCIPAL ACTIVITIES AND FOCUS AREAS FOR FY21 AND BEYOND FOCUS FY21 • Preparing for implementation of audit and corporate Routine items governance reforms anticipated following the BEIS • Approval of the FY20 full-year results issued in September consultation 2020 and the approval of the FY21 half-year results issued • Continuing to evolve our approach to risk and resilience in February 2021 and full-year results issued in September through oversight of the Risk and Resilience Committee 2021 • Ensuring risk management is instrumental in driving the • Assessment of the key estimates and adjustments used in internal audit and assurance plan respect of the half- and full-year results • Continuing close oversight by the Board of development • Review of the process for identifying and managing risk of our cyber security capabilities and a full review of the principal risks and how they are • New reporting requirements for FY21, FY22 and beyond. managed in September 2020, a mid-year review in February • First full report under the Task Force on Climate-related 2021, and a further review in September 2021 Financial Disclosures • Review of business continuity and crisis management • Continuing to evolve our environmental, social and planning governance reporting and the quality of supporting data, • Verification of the independence of the external auditor, in line with emerging regulation and investor requirements approval of the scope of the audit plan and the audit fee, • Maintaining high standards in relation to material estimates, and review of the external auditor’s audit findings judgements and rationale • Review of fraud and Bribery Act controls and cyber security, which are standing agenda items for each meeting AUDIT AND RISK COMMITTEE ACTIVITIES IN MORE • Review of supplier payment practices DETAIL FY21 • Receipt of internal audit reports This report provides details ofthe role of the Audit and Risk • Approval of the annual Audit and Risk Committee Report Committee and the work it has undertaken during the year • Review of whether the FY20 and FY21 Annual Reports are and at its meeting in September 2021 when this Annual ‘fair, balanced and understandable’ Report and financial statements were approved. • Annual review of committeeterms of reference, Tax COMMITTEE EFFECTIVENESS Strategy, policy on use of auditors for non-audit services, The effectiveness of the Committee was reviewed through and auditor rotation policy the formal Board review process in June 2021. • Formal review of external auditor performance • Formal review of committee effectiveness This concluded that the Committee is well chaired, properly constituted, effectively performs its delegated role and Specific topics and items reviewed reports back clearly and fully to the Board. The review • Enhanced Going Concern and Viability Statement in the also considered the practice that we welcome of regular light of Covid-19 attendance by all Board members at Committee meetings, • Establishment of the Risk and Resilience Committee and it was concluded that this remains an effective way for all Board members to understand the finances and internal • Board ‘What keeps us awake at night?’ discussion held. control and risk management for which the Board • Development of a formal Risk Appetite Statement and is accountable. consideration of how this is embedded into core risk management processes SIGNIFICANT ISSUES AND JUDGEMENTS RELATING • Review of an Assurance Map in relation to the principal risks TO THE FINANCIAL STATEMENTS • New reporting requirements for FY20 and FY21, including Within its terms of reference, the Committee monitors the the Corporate Governance Statement against the 2018 integrity of the annual and interim reports, including a review Corporate Governance Code, enhanced disclosure under of the significant financial reporting matters and judgements s172 Companies Act and new executive pay reporting contained in them. requirements • Approach to climate change risk assessment and reporting, At its meetings in September 2020, February 2021 and and preparation for reporting under the Task Force on September 2021, the Committee reviewed a comprehensive Climate-related Financial Disclosures paper prepared by the Chief Financial Officer, which analysed • Assessment of our environmental, social and governance the Group’s results for the financial year; highlighted matters reporting against the recommendations issued by the arising in the preparation of the Group financial statements; World Economic Forum (WEF) and the Sustainability and provided information to support the Directors’ viability Accounting Standards Board (SASB) and going concern statements. The Committee also considered a paper prepared by the external auditor, • Understanding and considering our approach to proposed which included significant reporting and accounting matters. audit and corporate governance reforms as set out in the There wereno material matters requiring the Committee to BEIS consultation issued in March 2021 make amendments to the reports. 132 DUNELM GROUP PLC ANNUAL REPORT & ACCOUNTS 2021