GOING CONCERN AND VIABILITY CONCLUSION S172(1) COMPANIES ACT 2006 CONFIRMATION In both downside scenarios Dunelm has sufficient liquidity STATEMENT to continue trading, including maintaining the payment of The Board of Directors confirms that during the year under dividends in line with its dividend policy and comfortably review, it has acted to promote the long-term success of the meet its financial covenants. The reverse stress modelling has Company for the benefit of shareholders, whilst having due demonstrated that a prolonged sales reduction of 30% from regard to the matters set out in section 172(1) (a) to (f) of the Q2 FY22 is required to breach covenants by the end of FY23 Companies Act 2006. Full details are set out on pages 14 to and a 50% sales reduction is required to breach the RCF limit 17 of this report and in the Corporate Governance report on by the end of FY23. pages 100to 113, which are incorporated into this Strategic Report by reference. In such an event, management would follow a similar course of actions to those initially undertaken in March 2020, which STRATEGIC REPORT include but are not limited to: This report was reviewed and signed by order of the Board • Reducing discretionary spend (e.g. marketing and on 8 September 2021. maintenance) • A reduction in capital investment (e.g. new stores and refits) • Manage stock levels closely to demand Nick Wilkinson • Suspension of ordinary dividends, and no special dividends Chief Executive Officer • Reduce operating model costs (e.g. reduced store opening 8 September 2021 hours, lower technology spend with third-party developers) • Delay in payments, including landlords and other suppliers • Reduction in support centre headcount. In addition, similar to during FY20 and FY21, the government could reintroduce actions to address specific closure periods(Job Retention Scheme; rates olidays, delay in VATh payments) from which the Group could choose to benefit. As a result, the Board believes that the Group is well placed to manage its financing and other significant risks satisfactorily and that the Group will be able to operate within the level of its facilities for the foreseeable future. For this reason, the Board considers it appropriate for the Group to adopt the going concern basis in preparing its financial statements. DUNELM GROUP PLCANNUAL REPORT & ACCOUNTS 2021 91 STRATEGIC REPORT GOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION