Corporate Governance

Ensuring high standards of corporate governance is core to our strategy. On this page you will find our approach to compliance with the UK Corporate Governance Code, along with more information on our committees.

This statement was last updated on 11th April 2023

The directors recognise the importance of good corporate governance practice is in the best interests of all stakeholders of the business.  Under the London Stock Exchange’s AIM rule 26 the directors have adopted the Corporate Governance Code of the Quoted Companies Alliance (QCA).  This corporate governance report sets out our governance framework and the work we have done to ensure good governance within the Group.  We’ve detailed how we have complied with the ten principles of the QCA code.  Our website at www.handt.co.uk will provide updates on compliance matters as appropriate. 

H&T Group plc is subject to the UK City Code on Takeovers and Mergers.

We describe our compliance with the ten principles of the QCA code at https://handt.co.uk/about/corporate-governance-statement.

We describe our compliance with the ten principles of the QCA code at https://handt.co.uk/about/corporate-governance-statement.

Principle 1: Establish a strategy and business model which promote long-term value for shareholders

The Board is responsible for the delivery of the Group’s long-term strategic objectives. Our high-level strategy is: To make pawnbroking a more widely accepted and valued financial service. We will continue investment in our retail and digital footprint to deliver a service that exceeds our customers’ expectations and delivers attractive returns for shareholders whilst broadening the business offering.

During the year the Group acquired Swiss Time Services, bringing watch repair and servicing expertise in-house and thereby supporting the Group’s watch growth strategy.

We continuously develop our capabilities to address a changing market and customer needs. We are focused on maximising the potential from our core services while investing in the development of new products and channels.

Our network of stores supports this development. This real-world presence supported by an effective digital proposition creates an important distinction between H&T and a purely online business.

Principle 2: Seek to understand and meet shareholder needs and expectations

The Group is committed to engaging with its shareholders to ensure its strategy and performance is clearly understood. Feedback from investors is obtained through direct interaction between the CEO, supported by the CFO, at one-to-one shareholder meetings following its full-year and half-year results and certain other ad hoc meetings between Board members, Executive Management and shareholders that take place throughout the year.

The Annual General Meeting (AGM) is the primary method of engagement with our private shareholders, through both the distribution of the Annual Report and attendance at the meeting. We encourage our private and institutional shareholders to attend our AGM. The voting record at the AGM is monitored and we are pleased that all resolutions have been passed by shareholders. There is also regular investor dialogue through the medium of the Group’s corporate broker, Shore Capital, and the Group seeks to stay abreast of shareholder expectations and reactions through its regular investor roadshows and update meetings.

The Board recognises the importance of communications with shareholders.

There is a regular dialogue with institutional shareholders including presentations after the Group’s preliminary announcement of the year-end results and at the half-year results.

More information on those responsible for shareholder liaison and contact information can be found at https://handt.co.uk/investor-relations.

Principle 3: Take into account wider stakeholder and social responsibilities and their implications for long-term success

At H&T we believe that it is important to engage with our full range of stakeholders. Active engagement strengthens our relationships and helps us deliver our strategic goals whilst maintaining our values and delivering returns for all our stakeholders.

The fair treatment of our customers, whose interests are at the centre of all decisions and actions we carry out, is core to our longterm success. We have developed a diverse range of products to meet, as best we can, the unique needs of each customer. We offer a transparent, efficient, and professional service and constantly review our products to identify areas for improvement. We consistently receive valuable feedback from our customers; we also acknowledge that, despite our best efforts, things can go wrong, and if customers have cause to complain, we listen to them and ensure that we remedy any mistakes made.

We understand that many customers may experience some form of vulnerability during their lives. Identifying and supporting vulnerable customers is important to us. We have continued to strengthen our team responsible for identifying and supporting vulnerable customers through the course of their interaction with the Group. Additionally, we have formed a strategic partnership with the Money Advice Trust, who continue to provide bespoke training and advice for our vulnerable customer policies and procedures.

Aside from our responsibilities to shareholders, suppliers and customers, and our regulator, we believe that our employees are our single greatest asset and accordingly we endeavour to ensure our workforce are safe, highly trained, motivated and feel valued. We strive to develop and retain our staff and an important part of this is to provide opportunities within the Group where possible. We advertise positions weekly to every employee in order to encourage them to apply for these positions; where appropriate we use the management and development programmes to help individuals progress.

We endeavour to ensure our workforce is highly trained, motivated and rewarded. Training is key to the delivery of a motivated and skilled workforce which is important in successfully providing great service to our customers across a large product range as well as protecting our customers’ and investors’ assets.

The Group has invested in diversity and inclusion training across the business and has ensured that staff are able to raise and discuss any inclusion or diversity issues that may impact them.

We hold regular Your Voice, council-style meetings with employees from a variety of positions within the Group, and geographically from around the country. These provide a forum to discuss suggestions and ideas with senior management. The meetings are very productive as they allow direct feedback on any issues that arise in our stores or the wider organisation.

The Group has an Innovations Committee which reviews ideas and suggestions for changes to products, policies, and procedures from its employees.

The health and safety of our customers and employees is of paramount importance to the Group. All employees complete annual training, and a programme of annual Health and Safety Risk Assessments is in place.

Health and safety standards and benchmarks have also been established in the business and compliance to these standards are monitored by the Board.

Responsible lending

The Group recognises that many people may require financial help at some point in their lives and we believe that everyone should have a choice in how to meet that need. As a responsible lender, we aim at all times to treat customers fairly. We will do our utmost to try to help, whilst at the same time ensuring our customers do not become unduly burdened. It is our priority to carry out appropriate checks on all customers prior to loan approval. Under the requirements of the FCA’s new Consumer Duty, we are in the process of reviewing how to support customers in achieving the right outcome.

We also understand that things can and do go wrong. When customers have cause to complain we ensure that we do everything we can to put things right for them. We complete root-cause analysis in response to any customer complaints and adapt our processes and procedures in response.

Modern slavery

The Group is opposed to slavery and human trafficking. The Group will not knowingly support or do business with any organisation involved in slavery or human trafficking. We have established policies to ensure that we are conducting business in an ethical manner and address the risk of slavery and human trafficking in our supply chain. These include the Purchasing Policy and internal Whistle-Blowing Policy. Our full statement can be found at https://handt.co.uk/ about/anti-slavery-and-human-trafficking-statement Environment, Social Responsibility and Governance (ESG) The Group is committed to reducing its impact on the environment, with continual investment in video conferencing technology, encouraging staff to use public transport for business travel when possible, and enabling use of energy-efficient technology in stores.

During 2022 the Group completed a full carbon audit as we commenced our journey to achieve our goal to become carbon neutral. This has allowed us to assess our current impact and carbon emissions of the Group’s operations, from which we can track our progress to net zero.

The Board regularly completes reviews of its operation and effectiveness; in previous years this has been conducted through the means of a robust internally facilitated review of Board and Committee effectiveness.

A Board Effectiveness review was conducted early in 2022. Action has been taken, with further action planned to broaden and diversify Board member representation and skill set.

In the Community

We encourage community engagement and partnered with FareShare in 2022 resulting in the provision of over 300,000 meals through Company and employee donations.

As a business we are committed to the high-street and the communities that we support from our high-street presence. We continue to invest in new stores and refurbishment of our existing estate.

A list of our most relevant policies are available to review on our website https://www.handt.co.uk/esg.

Principle 4: Embed effective risk management, considering both opportunities and threats, throughout the organisation

The Board has well-established Audit and Risk Committees which have the responsibility of managing the Group’s internal control environment and risk framework.

The internal control environment is constructed on the threelines model, which is widely used to describe how large corporate entities manage the risks and uncertainties that they encounter. Development and adoption of a principles-based approach to corporate governance and risk management assists in achieving corporate objectives.

First Line – Operational Management

The first line’s roles are those that are directly aligned with the delivery of products and services to our customers. This is the most important element of any control environment – it is the operational teams following the established policies and procedures of the business on a day-to-day basis.

Second Line – Risk & Compliance

The second line is concerned with aiding management of risk through the provision and application of expertise, support, monitoring and challenge. The second line ensures: compliance with laws and regulations, acceptable behaviour; internal control; and quality assurance.

The first and second lines work closely together, however, the responsibility for managing risk remains part of the first line’s role.

Third Line – Internal Audit

Internal Audit provides independent and objective assurance and advice on the adequacy and effectiveness of governance and risk management. It reports its findings to both management and the governing body to promote and facilitate continuous improvement. Internal Audit’s independence and objectivity are established through accountability to the Board; unfettered access to people, resources and data; and freedom from bias or interference.

Governing Body – The Board

The governing body ensures that the appropriate governance structures and processes are in place. The Board delegates responsibility and provides resources to management to achieve the objectives of the Company whilst nurturing a culture that promotes ethical behaviour, diversity, inclusion and accountability. See principle 9 for further details.

Principle 5: Maintain the Board as a well-functioning, balanced team led by the Chair

The Board comprises the Non-Executive Chairman, the Senior Independent Director, two Executive Directors, two further Non- Executive Directors and the Company Secretary.

In May 2022 two Non-Executive Directors, Mark J Smith and Elaine Draper, stepped down from the Board. Two new Non- Executives, Toni Wood and Simon Walker, were appointed in May and September 2022 respectively.

The Board considers, after careful review, that the Non-Executive Directors bring sufficient independent judgement to the Group. Directors’ conflicts of interest are discussed at each Board meeting and steps taken to address any actual or perceived conflicts. The Board has carefully considered the independence of all Directors and considers that in all cases they continue to be independent of the Company. In reaching this conclusion the Board has considered the following points in relation to all Non-Executive Directors.

The Board confirms that no Non-Executive Director:

* Has ever been an employee of H&T;
* Has ever had a material business relationship with H&T either directly or as a partner, shareholder, Director or senior employee of a body that has such a relationship with H&T;
* Has received or receive additional remuneration from H&T apart from the Director’s fee; has participated in H&T’s performance related pay scheme;
* Has been a member of H&T’s pension scheme;
* Has any close family ties with any of H&T’s advisers, Directors or senior employees; or
* Holds cross-Directorships or has significant links with other H&T Directors through involvement in other Companies or bodies.

Non-Executive Directors each confirm that they are:


* Independent from Executive Directors.
* Financially independent on the remuneration they receive from H&T.
* Act in an independent manner, giving their objective opinion and advice on situations discussed and not seen to be led by other Non-Executive Directors.
* Only spend the required time in H&T so they do not become over familiar with the day-to-day running of operational issues.
* Ensure there is no conflict of interest at the time of appointment and throughout their term of office, bringing to the Board’s attention when there is a potential conflict of interest.

All Directors use their independent judgement to challenge matters, whether strategic or operational. The Chairman holds regular update meetings with each Director to ensure they are performing as they are required.

Board Audit Remuneration Risk Nomination
Peter McNamara (*) 2(2) N/A 1(1) N/A 4(4)
James Thornton 9(9) 3(3) 4(4) 3(3) 5(5)
Chris Gillespie 9(9) 3(3) 4(4) 3(3) 5(5)
Diane Giddy 9(9) 3(3) N/A 3(3) N/A
Toni Wood 5(5) N/A 2(2) 2(2)** 5(5)
Simon Walker 5(5) N/A 2(2) 3(3) 5(5)
Catherine Nunn 3(4) N/A 2(2) 2(2) N/A
Sally Veith 4(4) 2(2) 2(2) 2(2) N/A
Lawrence Guthrie 3(4) 2(2) 2(2) 2(2) N/A
Robert Van Breda 4(4) 2(2) 2(2) 2(2) N/A
* Peter McNamara stepped down from the board at the end of March 2023.

**Toni Wood attended July’s Risk Committee as an observer

Principle 6: Ensure that between them the Directors have the necessary up-todate experience, skills and capabilities

In addition, to reviewing materials for Board and Committee meetings prior to attendance, the Non-Executive Directors are required to commit such time to the Group’s affairs that allows them to discharge their oversight responsibilities. The Non Executive Directors also provide their skills and experience in assisting the Group with areas that complement their industry skills and experiences including strategy, acquisitions, risk management and regulation. The time commitment from the Non-Executive Directors is a minimum of c. 23.5 days per annum.

The Board has satisfied itself that between them the Directors have the necessary up-to-date experience, skills and capabilities. Each Director undertakes learning and development throughout the year to ensure their skillset remains up to date. Directors also complete the Group’s annual mandatory training delivered through the e-learning platform, and can receive ad hoc additional training as required.

Independent advice

All Directors can take independent professional advice in the furtherance of their duties, if necessary, at the Company’s expense. In addition, the Directors have direct access to the advice and services of the Company Secretary.

Principle 7: Evaluate board performance based on clear and relevant objectives, seeking continuous improvement

The Board recognises that regular performance evaluation is crucial for effective governance and the long-term success of the Group. In previous years the Board completed a wide-ranging internal survey and follow up meeting to evaluate Board performances across arrange of criteria covering strategy development and articulation, meeting the needs and objectives of shareholders, stakeholders and social responsibility, governance processes and accountability, risk management and internal control, and Board skills, capabilities, dynamics and performance.

An independent Board Effectiveness review was conducted during2022. Action has been taken with further action currently under wayto broaden and diversify the Board member representation and skillset. We are committed to continuous improvement and along with our obligation for developing our Board capabilities, effectiveness and succession planning.

Principle 8: Promote a corporate culture that is based on ethical values and behaviours

Our corporate culture and ethical values are key to delivering the Group’s objectives and strategic goals. The Board and management team work to ensure this culture is pervasive within the Group and all our employees share our collective values. The Group’s business model and strategy are aligned with the core principle of providing products that our customers value and ensuring that they receive positive outcomes whenever they engage with the Group. Our operational controls, staff training and culture ensure that we drive this consistent message across our business. In the year ahead, and in line with regulatory deadlines, we plan to implement policies and training updates to ensure we comply with the new FCA Consumer Duty rules.

Ensuring compliance with our processes, procedures and values is core to the Group’s operation; our area managers are in our stores on a weekly basis promoting the culture and values we all stand for. Our stores’ internal audit team aim to visit our stores at least twice a year on a risk-based methodology and we have a comprehensive schedule of mystery shopping. The Group holds an annual strategy meeting which involves the full Senior Management Team. A further combined Board and Executive strategy meeting is also conducted. Board meetings are regularly held at our Sutton Head Office allowing Executive and Non-Executive Directors to meet and discuss issues with all levels of staff. Subsequent to the acquisition of Swiss Time Services, a Board Meeting was also held at their premises, in Essex, during Q4 2022. Non-Executive Directors visit stores and departments throughout the year and will attend long-service award events. All of these together allow the Board to monitor that our ethical values and behaviours are recognised and respected.

Principle 9: Maintain governance structures and processes that are fit for purpose and support good decision-making by the board

The Board comprises two Executive Directors and four Non- Executive Directors and brings a range of experience and expertise sufficient to provide independent judgement on issues of strategy, performance, resources and standards of conduct which are vital to the success of the Group.

There is no entitlement to share options for Non-Executive Directors, and there are no cross-Directorships between Executive and Non-Executive Directors. The Non- Executive Directors are considered to be independent; full details of the assessment of Directors’ independence is included on Page 50 of the Annual Report. The Chairman, who is a regulated person, leads the Board and is principally responsible for considering regulatory and strategic matters on behalf of the shareholders, in support of the CEO.

The Senior Independent Director (SID) supports the functioning of the Board and acts as a conduit between the Executive and Non- Executive Directors. The SID leads the Board effectiveness review, Chair-succession process, and assists with the preparation and approval of the Annual Report and accounts.

The Company Secretary acts as a trusted advisor to the Board facilitating meetings and providing advice on legal and regulatory matters.

Board meetings

The Board is responsible to the shareholders for the effective and suitable management of the Group. A Directors’ responsibilities statement in respect of the financial statements is set out in this Annual Report on Page 59. The Board meets formally at least eight times during the year. To enable the Board to discharge its duties, all Directors receive appropriate and timely information. Briefing papers are distributed to all Directors in advance of the Board meetings. There is a formal schedule of matters reserved to the Board which include the determination of strategy, approval of acquisitions, approval of budget and major capital expenditure.

At Board meetings, the standing agenda normally comprises a review of the financial results and update of operations, a CEO report and an update on the progress of the Group’s other strategic objectives. During the year, the Board hears from departmental managers and asks questions on their progress, issues and prospects. The Board meetings in August and March cover the approval of the interim and preliminary financial results respectively and the November meeting deals with the approval of the annual budget.

COMPLIANCE STATEMENT CONTINUED Remuneration Committee The Remuneration Committee comprises independent Non-Executive Directors of the Company. The members of the Committee are: James F Thornton (Chair) Peter D McNamara Toni Wood Board Observer: Simon Walker The Committee meets at least twice in each year and at such other times as the Chairman of the Committee sees fit. The Chairman of the Committee is appointed by the Board on the recommendation of the Nomination Committee. The quorum for the Committee is two. The duties of the Committee are: • To determine and agree with the Board the framework or broad policy for the remuneration of the Chair, Chief Executive, all other Executive Directors, and such other members of the Executive Management as it is designated to consider, including levels of base pay, potential bonus and long-term incentives. • Within the terms of the agreed policy, determine individual remuneration packages including bonuses, incentive payments, share options, pension arrangements and any other benefits. • Determine the contractual terms on termination and individual termination payments, ensuring that the duty of the individual to mitigate loss is fully recognised. • In determining individual packages and arrangements, give due regard to the comments and recommendations of the QCA Code. • Be told of and be given the chance to advise on any major changes to employee benefit structures in the Company. • Recommend and monitor levels and structure of remuneration for senior managers below Board level as determined. • Agree the policy for authorising claims for expenses from the Chief Executive and the Chairman of the Board. The Committee is authorised by the Board to: • Seek any information it requires from any employees or officers to perform its duties. • Be responsible for establishing the selection criteria and then for selecting, appointing, and setting the terms of reference for any remuneration consultants providing advice to the Committee at the Group’s expense. During 2022, the Remuneration Committee reviewed and approved as part of the standard agenda schedule, the outcome of the 2021 Bonus Scheme and setting of the 2022 Bonus Scheme financial and non-financial targets, the Performance Share Plan for 2022, the Gender Pay Report, the Terms of Reference for the Remuneration Committee, and the 2023 salary review proposals. The Committee had considered the following priorities for 2022: • Ensuring the entry pay level for H&T employees is ahead of the National Living Wage. • Re-aligning the store pay structure, in line with a balanced scorecard approach, to provide motivation, retention and to acknowledge completion of training modules. Audit Committee The Audit Committee comprises independent Non-Executive Directors of the Company. The members of the Committee are: James F Thornton (Chair) Peter D McNamara Simon Walker Board Observer: Toni Wood The Committee meets at least three times a year. The quorum for the Committee is two members. The Audit Committee reviews the prudence, accuracy and consistency of the financial results, and within the remit the key judgements made and the effectiveness and robustness of the financial control system that supports the financial results. It reviews the scope, the outcomes from, and the performance and costeffectiveness of internal and external audit. It has delegated power from the Board to exercise the power from shareholders to agree fees for external auditors. The Audit Committee is responsible for satisfying itself on the independence and objectivity of external and internal auditors. As directed by the Audit Committee, the principal function of the Group’s internal audit team is to verify the design and operational effectiveness of all controls across the business. Internal audits are undertaken covering all aspects of the Group’s key risks and financial controls. The Head of Internal Audit reports directly to the Audit Committee Chair. The Audit Committee has access to all Internal Audit reports. The Committee reviews the operation of internal controls and reports to the Board on the annual review of the internal control and risk management. To ensure appropriate independence the Audit Committee, on behalf of the Board, reviews and agrees the Internal Audit plan for the year and the Head of Internal Audit reports separately to and meets regularly with the Chair of the Audit Committee, who reviews all corporate audit reports as they arise. Nomination Committee The Nomination Committee comprises independent Non-Executive Directors of the Company. The members of the Committee are: Peter D McNamara (Chair) James F Thornton Simon Walker Toni Wood The function of the Nomination Committee is to provide a formal, rigorous and transparent procedure for the appointment of new Directors to the Board. In carrying out its duties, the Nomination Committee is primarily responsible for: • identifying and nominating candidates to fill Board vacancies; • evaluating the structure and composition of the Board with regard to the balance of skills, knowledge and experience and making recommendations accordingly; • reviewing the time requirements of Non-Executive Directors; • giving full consideration to succession planning; and • reviewing the leadership of the Group. In respect of Chair succession, the Chair and any Director directly affected, are excluded from discussions, and the SID assumes the role of Chair. Risk Committee The Risk Committee comprises independent Non-Executive Directors of the Company. The members of the Committee are: Peter D McNamara (Chair) James F Thornton Simon Walker Board Observer: Toni Wood The Risk Committee meets at least three times in each year and at such times as is required, and is responsible for reviewing and reporting to the Board on: • the Group’s risk appetite (the extent and categories of risk which the Board regards as acceptable for the Group to bear); • the Group’s risk management and internal control framework (its principles, policies, methodologies, systems, processes, procedures, and people); • the Group’s current risk exposure including horizon scanning for new and potential risks and the capability to manage those risks; and • in respect of the processes and procedures, the arrangements for the identification, assessment, monitoring, management and oversight of risk. The Risk Committee owns the Group’s Risk Appetite Statement which sets out the Group’s attitude to risk and the ranges and limits of acceptable risk-taking. The Committee establishes the high-level qualitative Risk Appetite Statement for the Group, the quantitative Risk Appetite Statement and the Key Risk Indicators used to measure risk exposure. The statement is subject to annual review by the Risk Committee and the Group Board. The Risk Committee is responsible for the Risk Framework in place for identification of enterprise-level risks (top-down approach) and identifying risks that occur in the day-to-day processes and operations of the business (bottom-up approach). The risks identified are recorded in the Corporate Risk Register and reviewed by the Committee on a biannual basis. The Risk Committee reviews the regular reports of the Head of Risk and Compliance to oversee the operational effectiveness of the risk management framework and the current risk exposure measured through the Key Risk Indicators. The Committee makes recommendations to the Board in respect of all risks faced by the Company outside of its declared risk appetite.

Principle 10: Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders

Our strategy is discussed in the Strategic report section of our Annual Report on pages 12-16.

The Board is responsible for the delivery of the Group’s long-term strategic objectives.  Our high-level strategy is: “To make pawnbroking a widely accepted and valued financial service by ensuring that borrowing against an asset is simple and inclusive, alongside offering a suite of transparent products and services which exceeds our customers’ expectations.”

During the year the Group launched the ‘at home service’, Pawnbroking anywhere, allowing customers to complete loans and gold buying from their homes for the first time.  In addition, we continue to open new stores and re-develop our existing branches.  An updated version of the retail website EST1897.co.uk was also launched during 2021, we have continued to evolve this website and expand our retail position including new and pre-owned jewellery, the Group’s main website (handt.co.uk) is constantly being updated. These developments continue our growth in the online and eCommerce sectors and help to establish H&T as one of the UK's leading providers of both pre-owned retail and financial services. 

We continuously develop our capabilities to address a changing market and customer needs.  We are focused on maximising the potential from our core services while investing in the development of new products and channels.

Our network of stores supports this development.  This real-world presence supported by an effective digital proposition creates an important distinction between H&T and a purely online business.

The Group communicates to its shareholders and other relevant stakeholders through a combination of dialogue, the publication of the Annual Report and financial statements, investor presentations, supported by additional information available on its website. The Audit Committee is a principal Committee within the Group’s governance framework and provides the role of monitoring the integrity of the Group’s financial results as outlined below. Audit Committee Report

The Audit Committee monitors the integrity of the financial statements of the Group and any formal announcements relating to financial performance, reviewing and challenging where necessary the consistency of accounting policies, and the application of critical accounting policies and practices and any changes to them. The Audit Committee reviews the scope, outcomes from and cost-effectiveness of internal and external audit, and has delegated power from the Board to exercise the power from shareholders to agree fees for external auditors.

It is responsible each year for satisfying itself on the independence and objectivity of internal and external audit functions. The Audit Committee reviews the regular reports of the Head of Internal Audit and the findings and agreed management actions contained within Internal Audit’s reports.

The Audit Committee meets at least three times a year. In the normal course, the Audit Committee meets to review plans for the year-end audit and at least seven days prior to each year-end and Interim Board meeting.

Significant issues and areas of judgement considered by the Audit Committee

The significant issues and areas of judgement considered by the Audit Committee in relation to the Annual Report and financial statements 2022 are outlined below. We discussed these with the external auditor during the year and, where appropriate, these have been addressed as areas of audit focus as outlined in the independent auditor’s report on Page 60-63.

Internal Control

The Board acknowledges that it is responsible for the Group’s system of control and for the continuing process of reviewing the adequate design and operational effectiveness of the controls. Control systems are designed to manage, rather than eliminate, the risk of failure to achieve business objectives and can only provide reasonable and not absolute assurance against material misstatement or loss. The Directors confirm that they have reviewed the effectiveness of the systems of control that have been in operation during the year. The Group operates a three-lines-model. The first line’s roles are those that are directly aligned with the delivery of products and services to our customers. This is the most important element of any control environment – it is the operational teams following the established policies and procedures of the business on a day-today basis. The second line is Risk & Compliance, which provides oversight and challenge through the provision and application of expertise, support, and monitoring. The second line ensures: compliance with laws, regulations, acceptable behaviour, internal control and quality assurance. The third line is Internal Audit which provides independent and objective assurance and advice on the adequacy and effectiveness of governance and risk management. It reports its findings to both management and the governing body to promote and facilitate continuous improvement. Internal Audit’s independence and objectivity are established through accountability to the Board; unfettered access to people, resources and data; and freedom from bias or interference.

Internal control: financial The control process has been reviewed and its main features are: Financial reporting: there is a comprehensive budgeting process withan annual budget approved by the Board. Monthly trading results are reported against the corresponding figures from the budget and previous year, and are reviewed by the Board.
Capital expenditure: there is a comprehensive budgeting process for capital expenditure with an annual budget approved by the Board. The CFO authorises individual items of capital expenditure and material items are also authorised by the Board or CEO.
Cash flow: an annual cash-flow forecast is drawn up and approved by the Board and actual cash flows are reviewed monthly against this forecast.
Organisational structure: a clear organisational structure with defined responsibilities and clear authority levels has been set.
Internal audits: the internal audit corporate team has a defined audit universe and conducts risk-based audits in line with the annual plan to address all processes within the business; the audit universe and plan is approved by the Audit Committee. The Internal Audit stores’ team ensures that Group procedures regarding cash, pledges and stock-handling are being adhered to across the store estate. Internal Audit aims to visit all stores bi-annually, subject to evolving risk priorities (e.g., new stores are prioritised as are those where operational management has expressed specific concerns or there is a below-standard audit history)

Articles of Association

Articles currently adopted can be found below: