Parent Company Accounting Policies For the 52 weeks ended 26 June 2021 GENERAL INFORMATION Non-market performance and service conditions are Dunelm Group plc (the ‘Company’) is incorporated and included in assumptions about the number of options that domiciled in the UK. Dunelm Group plc is a listed public are expected to vest. The total expense is recognised over company, limited by shares and the Company registration the vesting period, which is the period over which all of the number is 04708277. The registered office is Watermead specified vesting conditions are to be satisfied. Business Park, Syston, Leicestershire, England, LE7 1AD. In addition, in some circumstances employees may provide BASIS OF PREPARATION services in advance of the grant date and therefore the These financial statements have been prepared in accordance grant date fair value is estimated for the purposes of with international accounting standards in conformity with recognising the expense during the period between service the requirements of the Companies Act 2006 (‘IFRS’) and the commencement period and grant date. applicable legal requirements of the Companies Act 2006. In addition to complying with international accounting standards At the end of each reporting period, the Company revises its in conformity with the requirements of the Companies Act estimates of the number of options that are expected to vest 2006, the consolidated financial statements also comply with based on the non-market vesting conditions. It recognises international financial reporting standards adopted pursuant the impact of the revision to original estimates, if any, in to Regulation (EC) No 1606/2002 as it applies in the European the Income Statement, with a corresponding adjustment to Union. These financial statements are presented on pages 217 equity. to 224. When the options are exercised, the Company either issues The accounting policies set out below have, unless otherwise new shares, or uses treasury shares purchased for this stated, been applied consistently to all periods presented in purpose. For issued new shares, the proceeds received net these financial statements. of any directly attributable transaction costs are credited to share capital (nominal value) and share premium. The annual financial statements are prepared under the historical cost convention. The financial statements are The social security contributions payable in connection with prepared in pounds sterling, rounded to the nearest the grant of the share options are considered an integral part 0.1 million. of the grant itself, and the charge will be treated as a cash- settled transaction. GOING CONCERN TAXATION After making enquiries, the Directors have a reasonable expectation that the Company has adequate resources to Tax on the profit or loss for the period comprises current continue in operational existence for the foreseeable future. and deferred tax. Tax is recognised in the Income Statement Accordingly, they continue to adopt the going concern basis except to the extent that it relates to items recognised directly in preparing the financial statements. in equity, in which case it is recognised in equity. Additional considerations relating to the potential downturn Current tax represents the expected tax payable on the in the homewares market and other Covid-19 implications taxable income for the period, using tax rates enacted or on the going concern assumption are set out in the Group’s substantively enacted at the Statement of Financial Position financial statements on page 190. date, together with any adjustment to tax payable in respect of previous periods. SHARE-BASED PAYMENTS Deferred tax provides for temporary differences between Employees of the Company have been granted options the carrying amounts of assets and liabilities for financial for two equity-settled, share-based compensation plans, reporting purposes and the amounts used for taxation under which the entity receives services from employees purposes. Deferred tax is determined using tax rates (and as consideration for equity instruments (options) of the laws) that have been enacted or substantively enacted at Company. The fair value of the employee services received the Statement of Financial Position date and are expected to in exchange for the grant of the options is recognised as an apply when the related deferred tax asset is realised or the expense. The total amount to be expensed is determined by deferred tax liability is settled. reference to the fair value of the options granted: • Including any market performance conditions (for example, A deferred tax asset is recognised only to the extent that it is an entity’s share price); probable that future taxable profits will be available against • Excluding the impact of any service and non-market which the asset can be recognised. performance vesting conditions (for example, profitability, sales growth targets and remaining an employee of the entity over a specified time period); and • Including the impact of any non-vesting conditions (for example, the requirement for employees to save). DUNELM GROUP PLC ANNUAL REPORT & ACCOUNTS 2021 219 FINANCIAL STATEMENTSSTRATEGIC REPORTGOVERNANCE OTHER INFORMATION