Annual Report (ESEF) • Aug 8, 2022
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Download Source File2138001E12GWLLDQQF162021-05-022022-04-30iso4217:GBP2138001E12GWLLDQQF162020-05-032021-05-01iso4217:GBPxbrli:shares2138001E12GWLLDQQF162022-04-302138001E12GWLLDQQF162021-05-012138001E12GWLLDQQF162020-05-02ifrs-full:IssuedCapitalMember2138001E12GWLLDQQF162020-05-02ifrs-full:SharePremiumMember2138001E12GWLLDQQF162020-05-02ifrs-full:OtherReservesMember2138001E12GWLLDQQF162020-05-02ifrs-full:RetainedEarningsMember2138001E12GWLLDQQF162020-05-022138001E12GWLLDQQF162020-05-032021-05-01ifrs-full:IssuedCapitalMember2138001E12GWLLDQQF162020-05-032021-05-01ifrs-full:SharePremiumMember2138001E12GWLLDQQF162020-05-032021-05-01ifrs-full:OtherReservesMember2138001E12GWLLDQQF162020-05-032021-05-01ifrs-full:RetainedEarningsMember2138001E12GWLLDQQF162021-05-01ifrs-full:IssuedCapitalMember2138001E12GWLLDQQF162021-05-01ifrs-full:SharePremiumMember2138001E12GWLLDQQF162021-05-01ifrs-full:OtherReservesMember2138001E12GWLLDQQF162021-05-01ifrs-full:RetainedEarningsMember2138001E12GWLLDQQF162021-05-022022-04-30ifrs-full:IssuedCapitalMember2138001E12GWLLDQQF162021-05-022022-04-30ifrs-full:SharePremiumMember2138001E12GWLLDQQF162021-05-022022-04-30ifrs-full:OtherReservesMember2138001E12GWLLDQQF162021-05-022022-04-30ifrs-full:RetainedEarningsMember2138001E12GWLLDQQF162022-04-30ifrs-full:IssuedCapitalMember2138001E12GWLLDQQF162022-04-30ifrs-full:SharePremiumMember2138001E12GWLLDQQF162022-04-30ifrs-full:OtherReservesMember2138001E12GWLLDQQF162022-04-30ifrs-full:RetainedEarningsMember Currys plc 1 Portal Way London W3 6RS United Kingdom T: +44 (0) 203 110 3251 E: [email protected] www.currysplc.com Currys plc Annual Report & Accounts 2021/22 COVER OPTION 1 Annual Report & Accounts 2021/22 We help everyone enjoy amazing technology Currys plc Annual Report & Accounts 2021/22 Currys plc 1 Portal Way London W3 6RS United Kingdom T: +44 (0) 203 110 3251 E: [email protected] www.currysplc.com Currys plc Annual Report & Accounts 2021/22 COVER OPTION 2 Annual Report & Accounts 2021/22 We help everyone enjoy amazing technology Currys plc Annual Report & Accounts 2021/22 Currys What we do Currys plc is a leading omnichannel retailer of technology products and services, operating online and through XXX stores in X countries. We Help Everyone Enjoy Amazing Technology, however they choose to shop with us. In the UK&I we trade as Currys; in the Nordics under the Elkjøp brand and as Kotsovolos in Greece. In each of these markets we are the market leader, employing XX,XXX capable and committed colleagues. Our full range of services and support makes it easy for our customers to discover, choose, afford and enjoy the right technology for them, throughout their lives. The Group’s operations are supported by a sourcing office in Hong Kong, state-of-the-art repair facilities and an extensive distribution network, enabling fast and efficient delivery to stores and homes. Our vision, we help everyone enjoy amazing technology, has a powerful social purpose at its heart. We believe in the power of technology to improve lives, help people stay connected, productive, healthy, and entertained. We’re here to help everyone enjoy those benefits and with our scale and expertise, we are uniquely placed to do so. We’re a leader in giving technology a longer life through repair, recycling and reuse. We’re reducing our impact on the environment in our operations and our wider value chain and we will achieve net zero emissions by 2040. We offer customers products that help them save energy, reduce waste and save water, and we partner with charitable organisations to bring the benefits of amazing technology to those who might otherwise be excluded. We are a leading omnichannel retailer of technology Quick links New Recycling Initiative 6 Our Business Model 10 Strategy in Action 18 www.currysplc.com/investors For the latest news visit our website. 1 Governance Financial Statements Investor information Strategic Report £10,170m £10,344m £10,144m 2021/22 2020/21 2019/20 £116m £156m £186m 2021/22 2020/21 2019/20 6.7p 10.7p XX.Xp 2021/22 2020/21 2019/20 £109m £438m £72m 2021/22 2020/21 2019/20 £(140)m £33m £126m 2021/22 2020/21 2019/20 (13.9)p 0.0p 8.0p 2021/22 2020/21 2019/20 2021/22 Highlights Operational highlights • Moved to a single brand in the UK&I. Currys is now customers’ single destination for all things tech • Launched new omnichannel platforms in both UK and across the Nordics • Strong progress against recycling and net zero targets, recognised by CDP “A” score • Successfully entered Cyprus, our 8th market • Resumed dividend payments and commenced a share buyback Financial highlights Revenue £10,144m (2)% Free cash flow £72m (84)% Adjusted profit before tax £186m +19% Adjusted EPS [X.X]p [+XX]% Statutory EPS 8.0p Statutory profit/loss before tax £126m Contents Strategic Report 1 2021/22 Highlights 2 Our Vision 3 Our Strategic priorities 4 The importance of Technology X Our Business at a glance X Our Business Model X Chair of the Boards’ statement X Group Chief Executive’s statement X Strategy in Action X Our Stakeholders and s172(1) statement X Sustainable Business X Risk Management X Principal Risks and Uncertainties X Going Concern and Viability Statement X Key Performance Indicators X Performance Review Governance X Board of Directors X Governance at a glance X Directors’ Report X Corporate Governance Report X Audit Committee Report X Disclosure Committee Report X Nominations Committee Report X ESG Committee Report X Remuneration Committee Chair’s statement X Remuneration Policy X Remuneration Committee Report X Annual Remuneration Report 2021/22 X Statement of Directors’ Responsibilities Financial Statements X Independent Auditor’s Report X Consolidated Income Statement X Consolidated Statement of Comprehensive Income X Consolidated Balance Sheet X Consolidated Statement of Changes in Equity X Consolidated Cash Flow Statement X Notes to the Group Financial Statements X Company Balance Sheet X Company Statement of Changes in Equity X Notes to the Company Financial Statements X Five Year Record (unaudited) Investor Information X Glossary and Definitions X Shareholder and Corporate Information Non-Financial Information Statement We aim to comply with the Non-Financial Reporting requirements contained in sections 414CA and 414CB of the Companies Act 2006. The requirements of this disclosure are addressed within this section by means of cross reference in order to avoid duplication and to help stakeholders understand our position on key non-financial matters: Environmental matters (including impact of business on the environment) page [X] TCFD Report page [X] Colleagues page [X] Social matters page [X] Respect for human rights page [X] Anti-corruption and anti-bribery matters page [X] Description of our business model page [X] Details of the principal risks relating to non-financial matters page [X] non-financial KPIs page [X] See our Key Performance Indicators on pages XX to XX. CONTENTS TO BE FINALISED AT FINAL PROOFING STAGE KT 2 Currys plc Annual Report & Accounts 2021/22 We put our customers first We win together We own it Choose Afford Enjoy for life Overview Our Vision Our business model We help customers choose, afford and enjoy amazing technology however they choose to shop with us. As a market leading technology products and services retailer, our vision drives everything we do, in all countries in which we operate. Customers find technology incredibly exciting, but also confusing and expensive. Our vision goes beyond ensuring customers can choose, afford and enjoy the right tech. We put our purpose at the heart of what we do, using our expertise, scale and reach, to bring technology to everyone. The assets, colleagues, capabilities and scale that we have means that no one is better placed than Currys to help customers do all this. We help customers choose the right technology, across a huge range of products, through stores or online. Our capable and committed colleagues provide expert advice to help customers make the right choice. Technology’s amazing. And we’re here to help everyone enjoy it. So, we don’t just sell products to people, we make sure they have the knowledge and confidence to get everything they can out of them. We know that our advice, our enthusiasm, our commitment to do what’s right for customers brings them joy. And it’s through this energy and determination that we’ll keep more customers for life. Customers find technology exciting, but confusing and expensive. We help everyone afford the technology they want. We won't be beaten on price and we can spread the cost of tech through the responsible use of credit. We help customers make the most of their amazing tech through our unique services. We get the product working, help give tech a longer life and help customers make the most of their products. We are uniquely positioned to help customers throughout their life, and by doing so we will drive relationships that are long-lasting and more valuable to our customers and to us. While there are thousands of us, in hundreds of roles and positions, we’re all united by the same love for technology and helping people enjoy it. We value our differences and the difference we make because that’s what makes us unique. When we come together amazing things happen and we win together as one. We all take change of our future and we’re not afraid of change. It’s how we succeed. So, we find what works well and we make it work better. We share ideas to help make our customers’ lives easier and we go above and beyond to help others out. As individuals and as a business, we’re committed to learning, growing and taking responsibility for making things happen. Our Values Our values unite us, helping us achieve our strategic objectives. We help everyone enjoy amazing technology Read more about our values on page [18]. Read more about our business model on page [XX]. TROPHY ICON - TO COME FROM CLIENT STAR ICON - TO COME FROM CLIENT HEART ICON - TO COME FROM CLIENT 3 Governance Financial Statements Investor information Strategic Report Growing shareholder return Annual sustainable free cash flow >£XXXm Capable and committed colleagues – our greatest advantage Happy colleagues make happy customers and happy shareholders, and none of our competitors can match our thousands of expert colleagues. Read more about our colleagues on page [XX]. Annual sustainable free cash flow is defined as operating cash flow less capital expenditure, exceptional cash flow, cash tax and interest. It excludes any movements in working capital which are not expected to be significant by 2023/24. Customers need an easy shopping experience For our customers, we will be easy to shop. We're strongest when we offer the best of both online and stores to customers, an omnichannel shopping experience. Read more about Omnichannel on page [XX]. We are building customers for life We want to be more valuable to customers. This means helping them to afford and enjoy their technology, Our Credit and other Services, fuelled by data, help us build those longer-term customer relationships. Read about Customers for Life on page [XX]. Net Zero by 2040 Eradicate Digital Poverty Grow our Circular Business Model Our strategic priorities Sustainability priorities Financial benefits by 2023/24 EBIT margin X% Capital expenditure XX% of sales New cash exceptionals £minimal Steady Growth 4 Currys plc Annual Report & Accounts 2021/22 The importance of technology to our customers Amazing technology plays a vital role in our customers’ lives Connected Fed Fit & Healthy Helping our customers stay… Productive Entertained Clean 5 Governance Financial Statements Investor information Strategic Report £21.2bn £22.5bn £18.6bn £19.0bn £19.1bn £18.8bn 2016/17 2021/22 2020/21 2019/20 2018/19 2017/18 NOK 188bn NOK 185bn NOK 158bn NOK 152bn NOK 147bn NOK 142bn 2016/17 2021/22 2020/21 2019/20 2018/19 2017/18 Cloud Gaming Foldable Phones Dual Screen Laptops Food Preservation 8K TVs Energy Efficiency Smart Security Windows 11 Continuing growth drivers Trends • Hybrid working • E-learning • Home entertainment • Smart tech Faster replacement • Greater usage • Greater familiarity with benefits of new tech • High rate of innovation Larger installed base • Complementary products and services opportunities Supplier innovation UK electricals market size (£bn) Nordics electricals market size (BNNOK) 7 out of 10 of the top global R&D spend companies are suppliers to us. We are proud to partner with many of the world’s largest and most innovative companies. The developments coming from them are incredibly exciting.” Ed Connolly Chief Commercial Officer +14% Yo2Y +19% Yo2Y 6 Currys plc Annual Report & Accounts 2021/22 Overview Sustainable business Our vision is to help everyone enjoy amazing technology. That’s why we exist. Technology plays a vital role in every aspect of our lives, whether it’s helping you stay connected with friends and family, working from home, or keeping you fed, clean, fit, healthy and entertained. We all love new technology and want to feel good about buying a new piece of tech. But we also know that electronic waste is the world’s fastest growing waste stream and is expected to grow to nearly 75 million tonnes by 2030. We have to face facts: we can’t keep throwingtechnology away. So, let’s change our relationship with tech. We believe there’s a far better way. Instead of throwing your old kit away, we want to give technology longer life. At Currys, we don’t just sell amazing technology; we save it too. It’s not just good for the planet, it’s also great for your pocket. Our recent UK ‘Cash for Trash’ campaign encouraged people in the UK to give Currys their unwanted tech in return for a £5 voucher. In just three weeks, we saved the equivalent of ten double decker buses of e-waste ending up in landfill. As the #1 tech retailer in all the markets we operate in, we’re uniquely placed to lead the way in changing this relationship. 80% of UK households have shopped with us in the past three years, putting us in prime position to make a difference and help our customers extend the life of their tech. Curabitur eget orci tincidunt, vestibulum dolor non, tincidunt mi. In eu lectus lacinia, laoreet libero ut, placerat mi. Vestibulum lorem tortor, lobortis non nisi sit amet, rhoncus porttitor tortor.” Outquote name Title Long Live Your Tech DESIGN REVIEW REQUIRED 7 Governance Financial Statements Investor information Strategic Report So, here’s how we’re doing it at every stage of the product’s life. When you buy the amazing technology Expert face-to-face help is at the heart of why customers shop with us, and our colleagues are passionate about helping customers buy new technology and make decisions that are right for them. And for the planet. We’ll always lead the way with the best new products and the best prices. Our Go-Greener range continues to grow as we all look for ways to reduce our impact on the environment. From energy- efficient washing machines, tumble driers and ovens to water-saving dishwashers, we’re working hard with our customers and suppliers to help everyone make better choices. And when you buy your amazing technology, we help you protect it from Day one so your tech can have longer life. You want to enjoy the technology and that’s why, through our care and repair plans, over eleven million of our customers are getting peace of mind and giving their new technology longer life. Our plans are a promise that we’ll help you give your technology longer life if something goes wrong. When you need help to repair it And we’re delivering on that promise. Last year, we made nearly two million repairs across the Currys Group. Our Repair Lab in Newark is the largest electrical repair facility in Europe, with over 1300 skilled colleagues working to give technology longer life. That team is supported by 270 field engineers, who carried out 250,000 repairs in the UK. 80% of those were completed on the first visit. In the Nordics, we make several million spare parts available to customers via an online platform. When you’re ready for something new Trade-in is the bridge between your old and your new tech. When you want to upgrade, we do it in a way that’s good for your pocket by using the trade-in value to make sure your new technology is more affordable. 1,234 Statistic heading 5,678 mt Selling space 910 Statistic heading We’ll also give it longer life in a different form to somebody else. We’ll try to refurbish and re-use the tech. We can sell it second hand – and we’ve done that with over 250k products this year. Or we’ll donate it to those who need it most. In the UK, 32% of young people are at risk of becoming digitally excluded because they’re unable to get access to a device when they need it. Through our work with the Digital Poverty Alliance, Pennies and our Tech4Families campaign, we believe we’ll raise between £250k and £300k each year to provide a mix of new and refurbished laptops and connectivity to families who would otherwise be excluded from personal access. Through the ‘Second Home’ programme in our Kotsovolos stores, over 1,500 refurbished appliances have been distributed to families in need since 2017. When it’s reached the end of life We want everyone to bring their old or unwanted tech into our stores to be recycled or reused for free – whether they bought it from us or not. If we can’t re-use it, then we can harvest the parts which can be put to good use by our amazing repair colleagues in our repair lab. Or we can recycle it. We already collect our customers’ unwanted electrical equipment and small electrical appliances for recycling when we deliver their new technology. We currently recycle over 100,000 tonnes of used tech every year across our Group – that’s over 50,000 London black cabs. Giving technology longer life shows how purpose and profit can – and must – go hand in hand. We’re doing the right thing and making a profit – and that means we’re in it for the long-run. After all, we’ve been repairing tech since the 80s and we’ve recycled over a million tonnes of tech [in the last decade]. Everyone benefits because it makes commercial sense for us, financial sense for customers and environmental sense for the planet. We’re leading the way in changing everyone’s relationship with tech for the better. We’ve come a long way but we’re just getting started. Read more, our sustainable business on page [XX]. 8 Currys plc Annual Report & Accounts 2021/22 UK&I Revenue 2021/22 £5.5bn Read more, our performance review on page [XX]. International Revenue 2021/22 £[4 . 6] bn Read more, our performance review on page [XX]. £10.1bn Total revenue Our business at a glance Currys plc is a leading omnichannel retailer of technology products and services, operating online and through 830 stores in 8 countries. We Help Everyone Enjoy Amazing Technology, however they choose to shop with us. In the UK&I we trade as Currys; in the Nordics under the Elkjøp brand and as Kotsovolos in Greece and Cyprus. In each of these markets we are the market leader, employing 32,000 capable and committed colleagues. Our full range of services and support makes it easy for our customers to discover, choose, afford and enjoy the right technology for them, throughout their lives. The Group’s operations are supported by a sourcing office in Hong Kong, state-of-the-art repair facilities and an extensive distribution network, enabling fast and efficient delivery to stores and homes. Our vision, we help everyone enjoy amazing technology, has a powerful social purpose at its heart. We believe in the power of technology to improve lives, help people stay connected, productive, healthy, and entertained. We’re here to help everyone enjoy those benefits and with our scale and expertise, we are uniquely placed to do so. We’re a leader in giving technology a longer life through repair, recycling and reuse. We’re reducing our impact on the environment in our operations and our wider value chain and we will achieve net zero emissions by 2040. We offer customers products that help them save energy, reduce waste and save water, and we partner with charitable organisations to bring the benefits of amazing technology to those who might otherwise be excluded. 8 Countries 32k Colleagues 360m Website visits 830 Stores 25.6% 24.7% 26.5% 25.8% 25.2% 2021/22 2020/21 2019/20 2018/19 2017/18 25.9% 26.8% 26.0% 25.5% 25.0% 2021/22 2020/21 2019/20 2018/19 2017/18 UK Market share Nordics Market share 54% UK&I 41% Nordics 5% Greece 9 Governance Financial Statements Investor information Strategic Report Our Markets at a Glance Electricals Market 29.8m (1) Households £21.2bn (2) Annual spend (20/21: £22.5bn) 65% Online share (20/21: 76%) Our footprint 18,067 Colleagues (20/21: 21,000) 360m Website visits (20/21: 500m) 309 Stores (20/21: 314) 5.5m Store area sq ft (20/21: 5.6m) XX Logistics (20/21: 27) X.Xm Logistics area sq ft (20/21: 3m) Electricals Market 4.1m (4) Households £XX.Xbn (2) Annual spend (20/21: [£XX.Xbn]) XX% Online share (20/21: [XX]%) Our footprint 2,922 Colleagues (20/21: 3,000) 2m Website visits (20/21: [XX]m) 94 Stores (20/21: 93) 1.1m Store area sq ft (20/21: 1m) XX Logistics (20/21: [XX]) Xm Logistics area sq ft (20/21: [X]m) Electricals Market 13.2m (3) Households £15,9bn (2) Annual spend (20/21: £15.7bn) 24% (5) Online share (20/21: 24%) Our footprint 10,984 Colleagues (20/21: 11,000) 320m Website visits (20/21: 369m) 427 Stores (20/21: 422) 4.8m Store area sqft (20/21: 4.8m) XX Logistics (20/21: [XX]) XXXm Logistics area sq ft (20/21: [XX]m) (1) Source: UK Office for National Statistics and Central Statistics Office (Ireland) (2) Source: GFK (3) Detail of households in Nordic countries: in Sweden 5.1m, in Norway 2.5m, in Denmark 2.8m and in Finland 2.8m – Source: National Statistical Offices (4) Source: Hellenic Statistical Authority (5) Source: GFK. Nordics online share is reported excluded Telecom Sweden. Also, in the Nordics C&C sales are reported as Store Sales and are not part of the online share 10 Currys plc Annual Report & Accounts 2021/22 C h o o s e A f f o r d E n j o y f o r l i f e Our business model Customers Competitive strengths Our business model is to help everyone to choose, afford and enjoy technology however they want to shop. Modern omnichannel network Our network of over XXX stores are well located and well invested to provide an excellent customer experience. Aligned with our online digital channels, we provide a true omnichannel experience. Read more on page [XX]. Large and flexible infrastructure Our extensive infrastructure can be flexed to support sales and provide services in any channel and wherever is most convenient for our customers. Read more on page [XX]. Established and well loved brands Each of our brands has a long history as the customers' preferred brand in all our markets. Our move to a single brand in the UK&I will make it even easier for customers to see and experience us as number one. Read more on page [XX]. Strong supplier relationships Our strong relationships with suppliers enable us to provide the best range of relevant products at unbeatable prices. Read more on page [XX]. Capable and committed colleagues Our colleagues are our greatest advantage in helping customers choose, afford and enjoy the technology that is right for them. Read more on colleagues and culture on page [XX]. Customers are at the heart of everything we do. Constant focus on improving customer experience is key to achieving our objectives and delivering value for all stakeholders. We are uniquely positioned to help customers throughout their life, and by doing so we drive relationships that are long-lasting and more valuable to our customers and to us. • Delivery • Installation • Set up • Protection • Repair • Trade-in • Refurbish • Recycle • Connectivity • Help and Support • Tutorials • Subscriptions We help customers choose the right technology across a huge range of products, through our stores or online. Our capable and committed colleagues provide expert face-to-face advice to help customers make the right choices. Right Products Large and relevant range of products including more sustainable products in every market Expert Advice Our 32,000 highly trained, capable and committed colleagues provide expert advice to help customers shop where and when they want Omnichannel We help customers choose the right technology, from the best range of products and through stores or online Shoplive Live video shopping service to help customers choose the right tech when and where it suits them We help you get started We help give your tech longer life We help you get the most out of your tech 11 Governance Financial Statements Investor information Strategic Report A f f o r d E n j o y f o r l i f e Tonnes e-waste collected across our group for reuse or recycling 103k tonnes Reduction in scope 1, 2 & 3 emissions against a 2019/20 baseline XXX Contributed to charities and communities through key programmes & initiatives £XXX Customers Satisfying our customers Customers need the amazing technology we sell to keep connected, healthy, productive and entertained. Helping them choose from the vast range of products and making sure they can get the most out of it is at the heart of what we do. Read more on customers and sustainability on page [XX]. Engaging our colleagues We can only keep our customers happy if we have happy colleagues. Paying colleagues fairly, building skills for life and making all colleagues shareholders are essential to our long term success. Read more on colleague engagement on page [XX]. Generating growth for our suppliers Our scale and our stores provide an omnichannel customer experience that our suppliers can find nowhere else, and because of that we have strong relationships with all the major manufacturers. Read more on suppliers and sustainability on page [XX]. Supporting our environment and communities We care for the world around us. We are proud to be a leading retail repairer and recycler of tech in all our markets. We will reduce our impact on the globe while investing in our communities and good causes. Read more on our sustainable approach on page [XX]. Delivering returns for our shareholders Our business is cash generative and we ensure sustainability of this cash generation through considered capital deployment. Value creation for stakeholders Value created during the year Customers find technology exciting, but confusing and expensive. We help everyone afford the technology they need. We won't be beaten on price and we can spread the cost of tech through the responsible use of credit. UK NPS +2 Nordics HappyOrNot 90% Group eSat 77 Revenue growth (like-for- like, Yo2Y) +10% Dividend per Share 3.00p Share buyback commenced £75m Right Price and Price Match “We won’t be beaten on price” Credit Spread the cost of products usingcredit 12 Currys plc Annual Report & Accounts 2021/22 Chair’s statement Currys exists to help everyone enjoy amazing technology Despite all of this, we finished the year in a stronger shape. Profits grew, shareholders were rewarded with both dividend and a share buyback, and both colleague and customer satisfaction continued to grow. This was only possible with a great team led by Alex Baldock and the commitment of our tens of thousands of great colleagues. Thank you to all of them. All of our stakeholders rightly expect a great business striving to be better every year and we think we made pretty good progress last year, but there still remains the opportunity and necessity to do better for all of them. Colleagues The role of our colleagues is critical to the continued success of this business. We cannot deliver highly valued advice and service without well trained and motivated colleagues. Investment in tools, training and reward is key and we have continued by investing in areas such as a new Colleague Hub in the UK, thousands of hours of colleague training and through share awards that saw almost 13,000 colleagues receive shares this year with a further 3,000 granted awards that will vest after three years of employment. Overview As an executive and returning as Chair, this is my 18th year at Currys – it will also be my last. As part of a well-planned succession process, Ian Dyson will be taking over as Chair following the AGM in September. No year in Currys is dull. It is a dynamic business in a fast-moving environment. Last year was no different as we exited (in fits and starts) from Covid restrictions, saw war in Europe unfolding and dealt with both supply chain disruptions and inflation. Customers Our customers are noticing the difference from our better trained more committed colleagues, with better systems and processes to back them up to give the best tech advice and service in the market. Our UK Net Promoter Score continues to grow and the work on removing customer pain points is showing real success. In the Nordics, our customer club has now grown to [6.8]m members. Sharing this great idea across the Group, we launched Currys Perks in the UK in October. Already [xx.x]m customers have used Perks, enabling us to reward our loyal customers and create more personalised and relevant propositions. Suppliers Our suppliers are amongst the largest and most highly regarded companies in the world – of the ten companies that spend the most on R&D each year, seven are suppliers to us. The innovation and technological advances that are being made to enhance people’s lives and help them make more sustainable choices are incredible, and we are in a privileged position to be a trusted partner to these companies helping them showcase their amazing technology to our customers. 13 Governance Financial Statements Investor information Strategic Report Currys is a business that is very close to my heart but I am leaving with it in great shape and a very exciting future ahead of it.” Lord Livingston of Parkhead Chair of the Board Communities We want everyone to be able to enjoy equal access to the benefits of technology and are committed to making digital inclusive for everyone, in every country we operate in. In 2020/21 we became one of the three founding partners of a new Digital Poverty Alliance (DPA). This was supported by an initial £1m donation from Currys which funded the first proof of concept for the charity, by equipping 1,000 teachers and teaching assistants in the country’s poorest communities with the technology and support they need to deliver high quality home schooling to their pupils. We are delighted to confirm our ongoing commitment to the DPA and in 2022/23 we will be using Pennies customer donations to support vulnerable families with life changing access to technology. Meanwhile Elkjop has committed [6m ill NOK] to a number of strategic partnerships that will help fight digital exclusion in each of the countries in which it operates. While we don’t have a business in the Ukraine, we have partners there and colleagues nearby, so I was humbled and proud to see Currys donate funds and devices to help support those fleeing theirhomes. Environment We are striving to become not only a more sustainable company but also to help our customers in their journey. It is not just because this is what we and our stakeholders think is the right thing to do, but also that providing more energy efficient products and services to help keep tech working longer and to be recycled at the end of its life, is something we are uniquely able to do and can be a key differentiator in our market. We have reduced our carbon emissions by an additional [xx]% during the year. Supported by new initiatives such as “Cash for Trash” in the UK, we collected xx tonnes of waste tech, up [xx]% compared to last year. This effort will continue to feature centrally in our proposition of helping our customers choose and afford amazing technology, helping them get that tech started, giving that tech a longer life and helping them get the most out of the tech. Our progress in sustainability has been recognised by some of the leading rating agencies with significantly improved scores from S&P Global ratings and Sustainalytics and an “A” score from CDP, which ranked Currys plc amongst the top 2% of 11,000 global companies surveyed. Shareholders We continue to enjoy the engagement and support of our shareholders. We have returned this support through paying a 3p dividend during 2021/22 and will pay an increased dividend in 2022/23, while also commencing a £75m annual buyback. Due to market concerns on the near-term outlook for European consumer spending, our share price has not improved as we all would have liked, but our net cash balance sheet combined with market leadership and quality of operations make us confident that we can deliver long term cashflow and value to our shareholders. Board The Board of Currys plc brings together a diverse range of relevant skills and expertise. Bruce Marsh, our new CFO, has been a welcome addition to the Board in the year. In May, it was announced that I will be stepping down in September. I will be leaving Currys with sadness as it is a business very close to my heart, but I am delighted to be succeeded by someone of the calibre and experience of Ian Dyson. Ian brings a wealth of experience across consumer facing industries and public company boards. He will be a great support to Alex and the rest of theteam. Looking ahead My time at Currys has been challenging but hugely enjoyable. Despite a difficult external environment, the business is in really good shape; it has a great management team, strategic clarity, strong finances and a very exciting future ahead of it. Although the immediate future will continue to be challenging, I have no doubt that the business is well positioned to deliver value for all stakeholders, as it has done for almost 140 years. I look forward to watching the continuing progress from the sidelines. Lord Livingston of Parkhead Chair of the Board 6 July 2022 14 Currys plc Annual Report & Accounts 2021/22 Chief executive’s statement Heading to go here Suspendisse tincidunt scelerisque est ut vestibulum. Etiam tempus orci gravida ante commodo malesuada. Pellentesque posuere molestie elit, aliquam pharetra risus pellentesque vitae. Morbi euismod placerat pulvinar. Aliquam ut posuere lorem. Donec at metus viverra, dictum erat id, rhoncus dolor. Nunc dignissim vehicula viverra. Interdum et malesuada fames ac ante ipsum primis in faucibus. In mi erat, dignissim id dui sit amet, consectetur tristique turpis. Nulla facilisi. Integer sodales laoreet tincidunt. Maecenas quis tellus ligula. Integer accumsan, sapien eu imperdiet mattis, nulla felis vehicula libero, at vulputate ligula metus ac lectus. Maecenas non orci felis. Cras in pulvinar nunc. In a nulla ac ipsum elementum convallis sed vitae tellus. Vivamus a tellus vel dolor gravida convallis quis eu quam. Donec suscipit lorem nec enim laoreet, vel convallis velit efficitur. Nam quis dolor a sapien dictum hendrerit sit amet non est. Nullam suscipit, lacus nec scelerisque varius, sapien sem ultrices nulla, nec accumsan quam purus sit amet odio. Pellentesque posuere diam eu suscipit eleifend. Vestibulum mattis leo ultrices sem ornare mattis. Sed a metus non mauris consectetur condimentum vitae a purus. Performance In vestibulum a lectus vel dapibus. Sed mollis aliquam tristique. In blandit nunc sed pellentesque tincidunt. In condimentum dapibus magna pretium malesuada. Integer semper ante sit amet massa maximus, quis faucibus enim molestie. Pellentesque ornare nec tellus a rhoncus. Phasellus gravida, metus vel condimentum interdum, leo turpis auctor purus, id facilisis mauris felis nec urna. Duis tincidunt purus non lorem tempus viverra. Nam ultrices iaculis magna et consequat. Duis accumsan dolor orci, hendrerit tempor nunc finibus non. Suspendisse sem eros, rutrum sed auctor ut, lobortis vitae ligula. This has been an extraordinary year for our business and society, and our colleagues have stepped up magnificently to the exceptional pressures Covid-19 has presented.” Alex Baldock Chief Executive CONTENT TO BE CONFIRMED 15 Governance Financial Statements Investor information Strategic Report In ut placerat tellus. Ut efficitur massa ut enim accumsan, eget auctor neque mollis. Nulla at urna leo. Vivamus lobortis, nibh vitae lobortis volutpat, ipsum turpis tincidunt tellus, non tincidunt tortor purus non augue. Duis sit amet bibendum leo. Nam interdum arcu quis varius vulputate. Curabitur eget orci tincidunt, vestibulum dolor non, tincidunt mi. In eu lectus lacinia, laoreet libero ut, placerat mi. Vestibulum lorem tortor, lobortis non nisi sit amet, rhoncus porttitor tortor. Pellentesque habitant morbi tristique senectus et netus et malesuada fames ac turpis egestas. Fusce blandit leo eu nibh scelerisque auctor. Aenean eu ipsum nec urna consequat porttitor. Sed ac pulvinar dui, sit amet aliquet lorem. Vivamus tristique leo justo, at euismod augue semper in. Pellentesque habitant morbi tristique senectus et netus et malesuada fames ac turpis egestas. Suspendisse in nunc rhoncus, egestas lacus sed, elementum sem. Vivamus a nisl ac arcu euismod luctus ut in metus. Phasellus gravida erat et ante porta luctus. Aenean quis scelerisque felis. Morbi scelerisque cursus nunc sit amet condimentum. Phasellus tempus velit vitae mattis sollicitudin. Nullam sollicitudin vestibulum condimentum. Cras purus magna, eleifend venenatis velit eu, pulvinar faucibus libero. Nunc sed ex iaculis, convallis odio sed, rutrum eros. Phasellus et fermentum risus. Pellentesque in purus ut risus dictum facilisis. Ut eu rhoncus sapien. Nulla facilisi. Suspendisse tincidunt scelerisque est ut vestibulum. Etiam tempus orci gravida ante commodo malesuada. Pellentesque posuere molestie elit, aliquam pharetra risus pellentesque vitae. Morbi euismod placerat pulvinar. Aliquam ut posuere lorem. Donec at metus viverra, dictum erat id, rhoncus dolor. Nunc dignissim vehicula viverra. Interdum et malesuada fames ac ante ipsum primis in faucibus. In mi erat, dignissim id dui sit amet, consectetur tristique turpis. Nulla facilisi. Integer sodales laoreet tincidunt. In ut placerat tellus. Ut efficitur massa ut enim accumsan, eget auctor neque mollis. Nulla at urna leo. Vivamus lobortis, nibh vitae lobortis volutpat, ipsum turpis tincidunt tellus, non tincidunt tortor purus non augue. Duis sit amet bibendum leo. Nam interdum arcu quis varius vulputate. Curabitur eget orci tincidunt, vestibulum dolor non, tincidunt mi. In eu lectus lacinia, laoreet libero ut, placerat mi. Vestibulum lorem tortor, lobortis non nisi sit amet, rhoncus porttitor tortor. Pellentesque habitant morbi tristique senectus et netus et malesuada fames ac turpis egestas. Fusce blandit leo eu nibh scelerisque auctor. Aenean eu ipsum nec urna consequat porttitor. Sed ac pulvinar dui, sit amet aliquet lorem. Sustainability Euis tellus ligula. Integer accumsan, sapien eu imperdiet mattis, nulla felis vehicula libero, at vulputate ligula metus ac lectus. Maecenas non orci felis. Cras in pulvinar nunc. In a nulla ac ipsum elementum convallis sed vitae tellus. Vivamus a tellus vel dolor gravida convallis quis eu quam. Donec suscipit lorem nec enim laoreet, vel convallis velit efficitur. Nam quis dolor a sapien dictum hendrerit sit amet non est. Nullam suscipit, lacus nec scelerisque varius, sapien sem ultrices nulla, nec accumsan quam purus sit amet odio. Pellentesque posuere diam eu suscipit eleifend. Vestibulum mattis leo ultrices sem ornare mattis. Sed a metus non mauris consectetur condimentum vitae a purus. Digital poverty Ut efficitur massa ut enim accumsan, eget auctor neque mollis. Nulla at urna leo. Vivamus lobortis, nibh vitae lobortis quis varius vulputate. Curabitur eget orci tincidunt, vestibulum dolor non, tincidunt mi. In eu lectus lacinia, laoreet libero ut, placerat mi. Vestibulum lorem tortor, lobortis non nisi sit amet, porttitor tortor. Net-zero target Sit amet bibendum leo. Nam interdum arcu quis varius vulputate. Curabitur eget orci tincidunt, vestibulum dolor non, tincidunt mi. In eu lectus lacinia, laoreet libero ut, placerat mi. Vestibulum lorem tortor, lobortis non nisi sit amet, rhoncus porttitor tortor. Pellentesque habitant morbi tristique senectus et netus et malesuada fames ac turpis egestas. Fusce blandit leo eu nibh scelerisque auctor. Aenean eu ipsum nec urna consequat porttitor. Sed ac pulvinar dui, sit amet aliquet lorem. Pellentesque ornare nec tellus a rhoncus. Phasellus gravida, metus vel condimentum interdum, leo turpis auctor purus, id facilisis mauris felis nec urna. Duis tincidunt purus non lorem tempus viverra. Nam ultrices iaculis magna et consequat. Duis accumsan dolor orci, hendrerit tempor nunc finibus non. Nunc dignissim vehicula viverra. Interdum et malesuada fames ac ante ipsum primis in faucibus. In mi erat, dignissim id dui sit amet, consectetur tristique turpis. Nulla facilisi. Integer sodales laoreet tincidunt. Alex Baldock Chief Executive 6 July 2022 Read more on our strategy on page [XX]. Strategic progress Ecum fuga. Riorecus ut expedig endanti bearum coreribea quis ese provid moluptatias pro il esequaesti bea in re et, omnimet pratium labo. Nem elibusanias eos accus, sum qui Onecepudae pro beritia nis. CONTENT TO BE CONFIRMED 16 Currys plc Annual Report & Accounts 2021/22 78 77 68 Nov 2021 May 2021 Nov 2020 48.8 41.0 Peak 2021 Peak 2020 Strategy in action Colleagues [Our capable and committed colleagues – our greatest advantage] Colleagues Our vision is to help everyone enjoy amazing technology. We know that our customers find technology exciting, but they also find it confusing and expensive. Our capable and committed colleagues provide the magic ingredient in helping our customers discover, choose and enjoy amazing technology. That’s why we’ve invested nearly £25m in the last two years in skills, wellbeing and reward programmes for colleagues. Happy colleagues make for happy customers. Expert face-to-face help is at the heart of why customers shop with us, and that takes skilled and dedicated colleagues. Our investment in colleagues is rewarded through increased customer satisfaction, leading to market share gains and higher sales. This in turn supports margin growth as colleagues become ever-better at helping customers enjoy the benefits of all the amazing technology and amazing services that we offer. And the results speak for themselves. Our most recent employee engagement survey results shows that we’re becoming a world leader in engagement. We’re now ahead of the external global and retail benchmarks. These are encouraging results, particularly as they were achieved during a year of significant change, uncertainty and disruption. 80% of customers say our colleagues are the main reason for a ‘great experience’ Currys UK&I Employee Satisfaction Total UK&I NPS The Nordics customer satisfaction KPI (Happy or Not) was 89.5% in 2021/22. Happy colleagues… …create happy customers +10pts +7. 8pts 17 Governance Financial Statements Investor information Strategic Report Vivamus rutrum lobortis lectus, in aliquam ipsum tincidunt ac. Maecenas amet. In consectetur sem ligula, eu euismod justo nec. Vestibulum hendrerit diam nisl, vel vestibulum justo sodales. Name Title Covid-19 – keeping colleagues and customers safe We have continued to create Covid-19 safe environments for our colleagues and customers throughout the Group. Within the UK & Ireland business (UK&I), our safety measures have proved very successful and ensured that the infection rate across our business remained below that of the general population. For example, we have conducted over 32,000 colleague tests to make sure our colleagues can safely continue selling and delivering amazing technology to customers. In Greece and the Nordics, we have also continued our pandemic safety measures, including rapid testing, plexi-glass to protect colleagues and customers, hand sanitisers, masks and on-demand disinfection for our physical locations. We have remained mindful of colleague sentiment and have communicated and consulted throughout this challenging period. Our phased approach to the gradual easing of our internal restrictions has been well received and supported. Looking ahead We are not immune to the economic and political uncertainty which is fuelling high inflation and the rising cost of living for households. This volatility is leading to predictions of pay inflation and a new battle for talent. Within the UK specifically, data points to a smaller workforce. Recent studies have suggested that over a million people born overseas may have left the UK during the Covid-19 pandemic. The impact of the pandemic has also accelerated trends that are reshaping the workplace. These include the move towards flexible working and the importance of wellbeing for colleagues. How we’re responding – Our People Plan There are three pillars to our People Plan: 1. Ready for the Future: To be a modern retailer that’s responding to changing customer demands and expectations through a workforce that’s flexible, skilled and financially sustainable. 2. Home for the Best Talent: To be a destination for talent with a compelling brand proposition. We want people to aspire to work at Currys and feel they can grow their career with us. 3. Great Place to Work: To be an organisation that brings our vision and values to life through highly engaged colleagues that are proud to work for Currys and feel like they belong. OUTQUOTE TO BE CONFIRMED 18 Currys plc Annual Report & Accounts 2021/22 Strategy in action Colleagues continued Ready for the future Progress in 2021/22 Building skills for life In Retail, customer demands are changing fast, as are their expectations around how they want to shop. As we develop the workforce of the future for our omnichannel colleagues, we’re committed to responding to these changes and building skills for life. In the UK and Ireland, we’ve spent in excess of £500,000 in skills-based learning for our colleagues, increasing colleague capability and contributing to the experience and satisfaction of our customers. Our three new Technical Training Centres for Supply Chain and Service Operations are now fully operational. We induct our Driver Installer and Technicians in these centres, with a full range of products and categories available to be trained in. A recent example of how we’re building skills for life is our ‘Unleashing Colleagues’ programme in the UK&I. Customers tell us that it’s our expert advice they value most. So, we want our store colleagues to work in new, more flexible ways so that they have more time to sell, and better serve and support our customers. We’ve asked all of our store colleagues to adopt a broader, multiskilled role while maintaining their specialism. They will now flex to sell, serve and support customers. For some Support colleagues who have limited customer facing experience, we’ll help them to get the skills they need to flourish. New Currys London Campus As part of our new model, we announced a partnership with the world’s leading co-working company, WeWork, to create our New Currys London Campus at Waterloo. Our teams will be able to use WeWork locations across the UK. In a further step to ensure this new collaborative approach extends throughout the UK, we’re also refurbishing several spaces in stores, Customer Service Centres and our Learning Academy at Fort Dunlop too, giving colleagues even more flexibility about where they work. Flexible Working We’re committed to leading the way in making Currys a world-class place to work for colleagues, one that keeps and attracts top talent. New model In March 2022, we introduced a refreshed hybrid working model for all corporate and commercial colleagues in the UK, which reinforces our commitment to hybrid working and the importance of face-to- face collaboration. Our model includes clear guiding principles: • Be Connected • Be Intentional • Be Inclusive • Be Flexible 19 Governance Financial Statements Investor information Strategic Report Just as the future of shopping is hybrid, so is the future of work. We’re all preparing for a mix of remote working and face-to- face collaboration. We like digital… But we’re still human.” Alex Baldock CEO Flexibility in customer-facing roles Elsewhere in Currys, across our UK Customer Management Centres (CMCs), over 200 colleagues are able to work flexibly from home. We’ve also introduced technology to enable colleagues to work flexibly when selling and serving customers face-to-face or through video channels. One example is ShopLive, our 24/7 live video shopping service which brings amazing instore expertise to customers online. Nearly 40 colleagues currently work flexibly to provide this service around the clock. Our commitment to flexible working is helping us to attract new talent and increase colleague engagement. Colleagues value the work/life balance that it brings, as well as the financial benefits through reduced travelling costs etc. 20 Currys plc Annual Report & Accounts 2021/22 Strategy in action Colleagues continued Home for the best talent Progress in 2021/22 The battle for talent – attracting talent We recognise the challenging labour market and battle for talent, but we’ve continued to attract talent across the Group. In the UK&I, we received over 44,000 applications and hired nearly 2,500 colleagues on Fixed Term Contracts to support Peak 2021. We went on to retain over 900 of these colleagues with permanent contracts. In addition, we leveraged our partnerships with DHL and GXO, using our combined scale, to bring in colleagues to support our Warehouse and Transport logistics teams for Peak. Internationally, over 3,500 colleagues joined our Nordics business in the last year, and nearly 1,000 joined our ranks in Greece. Pension and Flexible Benefits. All UK&I colleagues have access to a defined contribution workplace pension. We also provide a wide range of benefits to all colleagues throughout the Group. In the UK, for example, colleagues can benefit from Life Assurance; Employee Assistance Programme; Digital GP; Thrive: Mental Wellbeing app; and the Aviva Wellbeing app. Share ownership. Our award-winning Colleague Shareholder Scheme was launched in February 2019, and the first award vested in February 2022 with over 12,600 current colleagues in 11 countries receiving their shares. We have also continued to grant awards to new participants throughout 2021/22, granting awards to nearly 3,000 colleagues globally. Careers – Developing our talent Expert face-to-face help is at the heart of why customers shop with us, and that takes skilled and dedicated colleagues. Colleagues have embraced our culture of learning. UK&I. In the UK&I, they consumed over three million modules/resources between May 2021 and the end of April 2022. We’ve provided over: • 188,000 hours of classroom learning • 384,000 hours of online learning • 572,000 hours of combined learning International • Elkjøp Nordics: over 550 training programmes were offered through more than 100 suppliers and in-house training programs. In total, over 22,200 training hours have been completed from e-learning alone and 97% of training was rated four stars or above by colleagues on a 5-point rating scale. • Kotsovolos: nearly 1,100 store and call centre employees have taken part in product and services training, totalling over 13,000 training hours. We remain committed to emerging talent, supporting people into employment and creating skills for life. In the UK&I, 173 new apprentices started on various programmes such as LGV driving, gas engineering and white good engineering with 288 on programme currently. Elsewhere, Elkjøp Nordic HQ has introduced a 12-week long ‘try-and-hire’ programme for junior developers in our Nordic IT department. We’ve also continued to develop our internal and external Careers site with a complete brand refresh in line with our Currys launch. In the Nordics, we’ve built a bespoke onboarding solution – called ‘All on Board’ – to support new hires with the onboarding process. Pay inflation – Rewarding our colleagues Real Living Wage. From 1st August 2022, we plan to pay a minimum base hourly rate of £10, to all hourly paid UK colleagues. This is above the Real Living Wage (RLW) for colleagues outside London. The new London rate will continue to align to the RLW rate of £11.05 per hour. This will result in an average increase of 5.2%. Almost 12,00 hourly paid frontline colleagues will benefit from the increase. Bonus. In May 2021, we introduced our new quarterly Suuply Chain& Service Operations (SC&SO) bonus plan to better align performance with the strategy and day to day activities within SC&SO and drive the team and individual behaviours necessary to deliver on the new strategy. Be Amazing. Within our UK&I stores, the launch of our ‘Be Amazing’ colleague portal has been transformational in linking the delivery of fantastic customer service to colleague bonus. Colleagues now directly receive Customer CSAT scores and comments for sales they have transacted. During 2021/22, there were 900,000 total portal visits and 3.7m page views. 12,600 Colleagues received shares across the Group UK & Ireland total learning hours 572k 21 Governance Financial Statements Investor information Strategic Report Some examples of development throughout the Group include: • Connect Conversations between Colleagues and Managers (which are part of PEAK Performance across UK&I) have been introduced to the entire UK&I organisation and provide a platform to discuss performance, career aspirations and development planning. • A comprehensive onboarding programme of training in the Nordics. Modules were delivered face-to-face or online through ‘Academy’, our internal training platform. • Launch of the ‘UX aKademy’ in Kotsovolos, designed to build User Experience (UX) capability, and the ‘CX aKademy’, designed to build a customer experience culture and develop capabilities in areas such as customer journeys and design thinking. • A comprehensive suite of learning for our CCO (Commercial) Colleagues, covering intermediate and advanced negotiation, programme management, financial performance and commercial decision-making. Developing our leaders Developing our leadership capability is essential for growth – for the colleague, the team and the Group. We’re doing this in many ways, such as: • UK&I: Launch of ‘Amazing Managers’, a programme to build people manager capability across Retail and Supply Chain and Service Operations: – Nearly 300 General Managers and Regional Managers went through the programme. – Over 200 First Line Managers and Site & Operations Managers went through the programme. • International: – Elkjøp Nordics: A comprehensive suite of leadership programmes in the Nordics designed for colleagues at all stages in their leadership journey, from ‘Emerging Leaders’, to ‘Leading Others’, ‘Leading Leaders’ and a specific programme for ‘Leading Functions’. Nearly 170 colleagues participated across all four programmes. – Kotsovolos: A new ‘Supercharging Virtual Leaders’ programme for leaders in Kotsovolos designed to build the skills to lead in a hybrid world. Over 90 leaders have taken part so far. They have also launched ‘U-Lead’, a new programme for first time non- front-line managers to build core fundamental leadership skills. This is in addition to existing leadership programmes, from ‘Stepping into Management’ for new people managers, to ‘Up-Lead’ for all store and call centre managers. AWAITING HIGH RES IMAGE 22 Currys plc Annual Report & Accounts 2021/22 Join our LGBTQ+ network. Pride at Currys Pride at Currys is open to LGBTQ+ colleagues and allies. It’s a safe place to socialise whilst giving focus on internal policies - building an inclusive and diverse community. Scan to join the Workplace group. Great place to work Progress in 2021/22 Strategy in action Colleagues continued Creating a culture of well-being UK&I. We’re proud of our continued progress to place well-being at the heart of our business. We’ve: • seen a 13-point increase in well-being through our colleague engagement survey. • up-skilled over 1,200 people managers as mental health champions. • continued to develop our ‘well-being Corner’, which has been accessed by 20,000 colleagues. • shared over 100 online Weekly well- being Webinar sessions in collaboration with our current partners. • Integrated well-being into our review process to ensure managers have meaningful connections with their teams throughout the year. International • Elkjøp Nordics: health insurance is available for all colleagues who work more than 80% of the time, covering benefits such as specialist appointments, diagnostics and treatments. The business also organised for psychologists to run online sessions for colleagues, providing advice on how to cope with stress, loneliness and other challenges. • Kotsovolos: a comprehensive well- being programme called ‘Better Me Better Teams’ which focuses on physical, mental and financial fitness. The programme provides practical support in areas such as exercise, healthy eating, mindfulness and financial support. Creating a culture of Diversity and Inclusion We’re at our strongest when we embrace the full spectrum of society, regardless of what we look like, where we come from, or who we love. We’re proud of the steps we are taking to make Currys an even more inclusive place to work. UK&I. We’ve: • conducted our first ever inclusion survey with 6,000 responses helping shape our ongoing inclusion action plans. • listened and responded to colleague feedback that inspired the creation of a new Equality, Inclusion & Diversity Dignity at Work Policy. • designed new learning modules to help managers create a more inclusive environment. • worked even more closely with our existing partners such as ‘Everywoman’ and ‘Business in The Community’. • became a founding member of ‘Diversity In Retail’ and are currently investing in our internal talent pipelines through participation in their Board Readiness, Ethnic Future Leaders and Senior Women Leadership programmes. • continued to work closely with our Pride at Currys LGBTQ+ colleague network to celebrate equality. International • Elkjøp Nordics: Introduced a Diversity, Equality & Inclusion policy for the entire Elkjøp Group. Also signed a partnership and collaboration agreement with EqualityCheck, a Norwegian/Nordic based organisation, built to help companies create more equal workplaces for all by combining data-driven technology with third-party domain expertise into a single solution. • Kotsovolos: Signed the Diversity Charter for Greek companies in May 2021. Forums. We remain committed to ensuring our colleagues have a voice. In UK&I, we have 11 colleague forums representing colleagues from across the organisation and have played a key role across a number of business priorities throughout the year. A central International Colleague Forum brings the existing country forums into a single listening and engagement forum for all colleagues. Gender Pay. On 4 April 2022, we published our annual Gender Pay Report. Our combined Group data showed that our comparative median hourly Gender Pay Gap continues to track below the ONS national average (15.4%) at 8.2%. Similarly, year on year the median Gender Bonus Gap decreased from 22.9% to 20.1%. You can read our report here https://www.currysplc.com/media/ og4enx1y/d2996_currys_gender_pay_ gap_2_022_a4_v27.pdf Number of employees as at 30/4/2022 [Insert Country/Region] Total Female Male PLC Board 8 3 38% 5 63% Executive Committee 8 2 25% 6 75% Direct Reports of Executive Committee 65 22 34% 43 66% All Employees 31,717 9,846 31% 21,871 69% 23 Governance Financial Statements Investor information Strategic Report Creating a culture of communications and engagement We have run a comprehensive programme of engagement events at all levels of the organisation. Some highlights include: On The Pulse colleague engagement We conducted two On the Pulse Surveys during 2021. Results from our May survey demonstrated our commitment to engaging colleagues which saw all 21 questions increased in score and a significant (8 point) increase in colleague engagement and double-digit improvements across two of our three focus areas. In October, these positive results continued: • We continued to enjoy high engagement, with a 78% response rate, with colleagues leaving over 23,000 comments. • We’re now ahead of the external global and retail benchmarks. • We’re now seeing consistently high engagement scores throughout Currys with scores on 12 questions above the global benchmark. Our eSat employee satisfaction score for the Group (‘I am happy working at Currys’) is once again 77, equalling our May score. • Our colleagues in the UK&I increased their eSat score by one point to 78. This puts them in the top 25% of companies that are part of the global benchmark. In April 2022, the Nordics joined the Currys On the Pulse survey and move to more active listening. All business units are included in the survey and approximately 13,000 colleagues were invited. Kotsovolos already take part in the surveys. Virtual Peak 2.0. We held our second Virtual Peak event in October 2021 which was open to all UK&I colleagues. Highlights included: • Over 3,000 colleagues tuned in live to the launch of Virtual Peak 2.0. • More than 10 hours of on demand content. • A Currys Café, which had over 5,500 visits from colleagues exploring the best of our new brand. • Our Amazing Technology exhibition, which had over 33,500 interactions between colleagues and 35 suppliers. • The Chairman’s Shield awards, with over 1,500 colleagues watching live. Currys Brand Launch An engagement programme was developed to build excitement around the launch of the new Currys brand in October 2021. There was huge colleague engagement on our internal channel (‘Workplace’) with thousands of posts celebrating store rebranding, new uniforms etc. Video content, microsites, Day one colleague guides were also developed to support the launch. Values Refresh The three values – We Put Our Customers First, We Win Together, We Own It – were launched in October 2019 with the input of over 7,000 colleagues. Since then, we’ve: • continued to embed the values. Our most recent colleague engagement survey reported a score of 74 on the question ‘People at Currys Live our Values’ (above global benchmark). • recognised individuals and teams who are living our values through events such as the annual Chairman’s Shield. • engaged all colleagues in a ‘Values refresh’ which was launched as part of the Currys Brand launch in October 2021. Using a ‘values bot’, 2,350 colleagues took part online. 24 Currys plc Annual Report & Accounts 2021/22 Strategy in action Omnichannel Omnichannel is our way of bringing the strengths of stores and online to all our customers, however they may be shopping Omnichannel Omnichannel is our strategy to create seamless journeys across all channels, whether that is online, in our 830 stores or using a combination of both channels, we will provide customers an easy and connected shopping experience across the full range of our products and services. Our online business offers customers a 24/7 shopping experience across our full range of products with the convenience of delivery. Stores are places of discovery and allow customers to see, touch and feel amazing technology while getting trusted face-to-face advice from our expert colleagues. Omnichannel is the best of both worlds; customers in-store can access our full range of products and have them delivered to home meaning we are never out-of-stock for these customers, our online customers can pick up products in-store shortly after ordering, providing an immediacy that online retailers cannot match, while ShopLive allows our customers to get the trusted face-to-face advice of our expert colleagues from the comfort of their own homes. The flexibility omnichannel provides is also what customers prefer. Even through the pandemic, almost half of UK customers used both stores and online during their shopping journey for tech. Improving the ease of shopping in both channels will help us grow market share, while delivering the best of both worlds will help us grow sales and improve gross margins. Customers prefer omnichannel December 2021 Survey (1) Store customers cite the ability to see, touch and feel products before buying and the expert advice as main reasons to shop in-store. Online customers cite convenience and availability as main reasons for using that channel. Providing both allows us to serve all customers across our markets. 38% Online only 46% Both online and in-store 16% In-store only (1) Source: Currys consumer insight survey. Purchase channel used in L12M. Base 1,184 purchasers buying from any retailer. Sep 20 to Oct 21. 25 Governance Financial Statements Investor information Strategic Report 46 28 63 51 2021/22 2021/22 2018/19 2018/19 23k 18k 12k 2021/22 2020/21 2019/20 £1.0bn Elkjop Competitor 1 Competitor 2 Competitor 3 £1.4bn £2.5bn Currys Competitor 1 Omnichannel starts with better retail basics Online we are big and have proven our credentials UK&I online compared to closest competitor Nordics online compared to closest competitors Larger Range UK&I more than doubled in two years Easier experience Improved delivery and collection experience Easier experience [Vendreet eugiamet rit faciduisim elesequisim Ita nim hil et lautam nihil ipsa cus reperitio blatiunt aute quos que officipsum vellore hendaep repuditem dolum velianditem ipidunt. Et por ma nobit audanto magnim quodis repuditas eos expellit, sum quis eostemo lorecab ipsapitiae consect et ant optatur, et, re, repuditem dolum velianditem ipidunt. Et por ma nobit audanto magnim quodis repuditas eos expellit, sum quis utatemquis quodiam voluptaturia idenimus aut inctaturibus esed ut vent mil ma anienisci ab int.] lnvesting in price Clear price promise “You won’t find it cheaper” Notes: UK&I Currys UK includes Order&Collect. Competitor 1 reported numbers, financial year Apr-Mar 21 Nordics Elkjøp Nordic online retail sales includes Order & Collect. Total sales for Competitor 1, Competitor 2 and Competitor 3. Significant part of Competitor 3 business is not online sales and including other categories than electronics, but they don’t disclose the breakdown. Competitor 1 sales including stores and distribution business. Competitor 1 and Competitor 3 use calendar years. UK Delivery CSAT UK Collection CSATUK&I Product Range Lots of headroom; Nordics at 140k+ SKUs Happy or Not 2020/21 revenue (in £bn) 2020/21 revenue (in £bn) Regardless of channel, good retail starts with getting the basics right. That includes making sure we have a large and relevant range of products, have a clear price promise and are delivering an easy customer experience. >100% 56% 47% 59% 90% [XX]% [XX]% Never out of stock Get your product right now Help 24/7 26 Currys plc Annual Report & Accounts 2021/22 2021/22 2020/21 2019/20 2021/22 2020/21 2019/20 865 865 849 824 773 735 630 70 552 524 479 447 375 368 361 358 314 309 8.5 8.2 7.6 7.5 6.6 6.5 6.4 5.8 5.6 5.5 2021/ 22 2020/ 21 20 1 9/ 20 2018/ 19 20 1 7/ 18 2016/ 17 2015/ 16 2014/ 15 2012/ 13 2013/ 14 Strategy in action Omnichannel continued Omnichannel: Giving customers the best of both worlds UK&I online-in-store sales UK&I Order & Collect sales ShopLive 4.4/5 Customer rating Vs unassisted online ~5x Conversion >55% AOV Our UK&I store estate is now rightsized under one brand Number of stores and total selling space at end of financial year Dixons/PC World/Currys Carphone Warehouse Total selling space (m sq ft) +118% +18% 27 Governance Financial Statements Investor information Strategic Report [Link to new websites, platforms etc] What we did this year • Brand new currys.co.uk website launched and moved onto the new Salesforce platform. Benefits include improved site speed, improved recommendation engine, intuitive cross sell and trade up, and enhanced funnel analytics. • Next Generation Retail, our Nordic omnichannel platform went live in all markets. This is new online B2C and B2B platforms and includes the back office connectivity of store sales, store operations, call centre systems and direct distribution. • Launch of new Colleague Hub in the UK&I to give access to to-do lists and calendars, and access to communications and reports. • Our first store ranging trial using customer data to tailor the range in two stores has demonstrated a strong uplift in store sales with a halo impact on our online sales. What we will do next • Upgrading UK&I websites to include more personalisation and a seamless end-to-end journey. • Launching UK&I colleague hub to put every tool in one place for customer facing colleagues. • New credit platform to be launched. • New customer app. • A further upgrade to our currys.co.uk website including moving Account and Checkout onto the Salesforce based platform. • Expand the Colleague Hub to increasingly guide and personalise each customer’s in-store experience, making it easier for the colleague to make the most out of everything we know about that customer. • Lorem ipsum • Lorem ipsumQui que doluptatiis id quist, asi as eatur 28 Currys plc Annual Report & Accounts 2021/22 Strategy in action Customers for life We’re changing from a business that just ‘sells boxes’ to anonymous customers, to one that has deep customer relationships Customers for life As the leading technology retailer in all our markets, with the ability to serve customers across both channels, we have a significant opportunity to increase our share of wallet. This starts by using data to fuel CRM and personalisation. We are building our customer data in two ways; first through our Customer Club in the Nordics and Currys Perks in UK, we are building a large data set on customers. Second, we are starting the process of joining together disparate customer bases to create a single view of our customers. The combined insight from this will allow us to personalise experiences for all customers and develop propositions that customers value. The propositions that customers value revolve around our Services. We are uniquely positioned within tech retail to help customers afford tech through credit, help them get started with delivery, installation and set-up, help give tech a longer life through protection, repair, trade-in and recycling, and get the most out of tech through connectivity, subscriptions and tutorials. These Services are profitable on their own, but more importantly they help customers make more sustainable choices and they drive increased customer loyalty. We will evolve our Service propositions to give us more chances to speak to more of our customers more often and therefore increase loyalty and share of wallet. Over the medium term, growing our share of wallet drives a higher margin as it lowers our net spend on acquiring and retaining customers. ~80% of UK households shop for electricals with us (1) But we only get a ~30% share of their wallet We have a high share of customers but a low share of wallet (1) Unique identifiable households who have shopped for electricals with Currys in the past three years. We don't need to invest lots in acquiring new customers… …but significant headroom remains to grow share of wallet with our existing customers 80% 30% 29 Governance Financial Statements Investor information Strategic Report 6.8m 5.4m 3.2m 1.3m 2021/22 2020/21 2019/20 2018/19 XX% £ XXbn £ XXbn 2021/22 Club Non-club In the Nordics we have built a successful loyalty program (1) Unique customer households who have purchased electricals within the last 12 months. (2) Unique customers with whom we have an ongoing contractual relationship. Successful rollout in the Nordics # of customer club members Clear customer benefits Always discount on specific product categories VIP shopping Every [X] for free – accessories and essential Club deals every month Extended Buy & Try Collaboration with streaming services Higher engagement Annual shopping frequency per customer 21/22 Equivalent to more than [50%] of Nordic households being club member Higher shopping frequency Higher margins We are bringing our disparate customer bases together to create a single view of our customers With this combined insight we can: Personalise experiences for all customers Develop propositions that reflect what customers value Use Services to enable us to keep talking to customers 12.5m customers (1) 1.5m customers (2) 1.4m customers 8.5m customers (2) 1.1m customers (2) In the UK, we have taken the first steps to bringing together our disparate data sets 30 Currys plc Annual Report & Accounts 2021/22 Strategy in action Customers for life continued We’re building on strengths across all stages of Services 2021/22 - Group [12.4]% Sales through credit [3.2]m Credit customers [11.7]m Deliveries [1.4]m Installations [XX]k Product set-ups [XX]m Products collected from home [4. 8]m Protection plans [1.5]m Repairs/year Europe's largest electrical repair centre [145]k Trade-ins [103]k Tonnes of e-waste recycled [XX]m Subscriptions & tutorials Our Services help everyone enjoy amazing technology. We are in a unique position to be able to help customers get technology products started, give them a longer life and get the most out of their technology. We help you afford the amazing tech We help you get started We help give your tech longer life We help you get the most out of your tech 31 Governance Financial Statements Investor information Strategic Report 1.7m 1.4m 1.2m 0.9m 2023/24 target 2021/22 2020/21 2019/20 2018/ 19 16% Credit helps customers afford the technology they want and drives loyalty Customers for Life – Credit Active credit accounts in UK # Accounts (m) Pink Line = Credit Adoption Rate (%) Active credit accounts in UK What we did this year • Grew Nordics customer club to [6. 8]m members, representing [51]% of Nordic households. • Launched Currys Perks in the UK, so far [XX]m customers have used the benefits of Perks. • Moved UK data into Microsoft Azure platform. • We recorded new highs in customer satisfaction …[Data TBC] • In the UK, a new data platform was set up, this will become centre of our data ecosystem. • Used Loyalty segmentation with our CRM to enable our first personalisation trials. • We successfully introduced a Delivery & Installation charging strategy, enabling a standard charge of £4 for home delivery for small box baskets under £50. This is leading to uplifts in basket size and encouraging customers to raise basket sizes to qualify for free delivery. What we will do next • Delivery & Installation charging enhancements including big box price elasticity testing. • Launch tech insurance for tablets, giving customers important cover for accidental damage and theft/loss for portable devices which are not covered by our current Care & Repair plans. • Vivamus placerat nisl elit, ac lobortis magna aliquet a. • Nullam erat mauris, aliquet a odio vitae. Credit is a driver of loyalty - credit customers are 70% more likely to return than non-credit customers 88% Credit balances unutilised 12% Credit balances used 32 Currys plc Annual Report & Accounts 2021/22 Section 172(1) statement What this means Capable and Committed Colleagues are the interface between the Company and our customers and are critical to the long-term success of the Company. The Board considers the needs of colleagues and how any decision will impact them. What this means The Board ensures that any decision is made in the context of the need to be a responsible partner, to collaborate effectively with suppliers and to maintain successful relationships with customers. The Board seeks to ensure that the Company has strong relationships with external stakeholders including its regulators, banks and the external Auditor. What this means The Board considers how any decision will affect the communities in which the Group operates together with any environmental implications. What this means The Board challenges whether any decision made is the ‘right thing to do’ to ensure a fair outcome for all stakeholders. What this means The Board challenges what impacts any decision will have on the Company’s stakeholder groups and ensures that both the immediate implications and possible cumulative outcomes are considered. What this means The Company’s shareholders include institutional investors and retail shareholders. In considering the impact decisions have on shareholders, the Board takes this into account and ensures that all shareholders have equal access to information and engagement opportunities. Our Stakeholders Section 172(1) of the Companies Act 2006 requires each director to act in the way he or she considers, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole and in doing so have regard (amongst other matters) to the: This statement explains how the Board has embedded stakeholder considerations across decision-making and, in particular, how directors have had regard to the factors included in section 172(1) in addition to other factors relevant to any decision being made. This report sets out the Company’s approach to stakeholder management – likely consequences of any decisions in the long term; – interests of the company’s employees; – need to foster the company’s business relationships with suppliers, customers and others; – impact of the company’s operations on the community and environment; – desirability of the company maintaining a reputation for high standards of business conduct; and – need to act fairly as between members of the company. HIGH RES VERSION OF BACKGROUND TO BE CREATED KT 33 Governance Financial Statements Investor information Strategic Report Section 172(1) statement Our approach to stakeholder management There are different processes across the business to ensure stakeholder considerations are embedded into the Group’s decision-making. A clear corporate governance structure is in place which, together with the Group’s Delegated Authority Policy, ensures that business decisions are made by the appropriate people and in the appropriate forum (in accordance with the terms of reference of that forum). The supporting documentation for each Board and committee meeting includes, for reference, a summary of section 172(1) responsibilities immediately after the meeting agenda. To ensure that the impact on stakeholders is duly considered, Board and committee decision paper templates include mandatory fields for papers’ authors to include an impact assessment on each stakeholder group. The Board acknowledges that decisions made will not necessarily result in a positive outcome for every stakeholder group. By considering the Group’s purpose, vision and values together with its strategic priorities and having a process in place for decision-making, the Board does, however, aim to make sure that all decisions are considered and made following reflection across a broader view of stakeholder considerations. This report includes examples, for each of the Company’s key stakeholder groups, of the matters that the Board considered during the year, including how decisions were reached and stakeholder considerations that were central to discussions and outcomes. 34 Currys plc Annual Report & Accounts 2021/22 Our Stakeholders Stakeholder Management CASE STUDY: Environment, Social and Governance (‘ESG’) Strategy During the year the Board discussed and challenged the ESG strategy and the extent to which it remained fit for purpose. The Board considered the function that the Group performs for Our Customers, in providing technology that helps people stay connected, productive, healthy, and entertained. The Board agreed that the ESG Strategy had to reflect that sustainability considerations are increasingly important to customers. The Board considered the opportunities that the Group has to support customers in making more sustainable choices by clearly communicating the ‘Green’ credentials of products (such as energy efficiency and water use) and helping them give their technology longer life through trade-in, protection, repair and recycling. The Group holds an annual ‘Peak’ event for Our Colleagues prior to the busy Christmas trading period. This event is used to update colleagues on the product proposition and the strategic priorities for the business. The Peak event held in October 2021 was held virtually enabling the attendance of colleagues from across the Group. The event included updates on environmental and charitable initiatives in the Group to engage colleagues with the programme of initiatives underway to achieve ESG goals and to inspire them to think of additional ways in which they can support these goals. The Board discussed the need to empower colleagues to deliver improvements and the impact of the social purpose of the business on colleague engagement. During the year the Remuneration Committee approved the addition of environment metrics into the 2021/22 Bonus plan. ESG metrics now make up a significant proportion of the Company bonus scorecard to ensure that colleague remuneration is aligned to ‘doing the right thing’. The Board considered the appropriate ESG Strategy in context of Our Communities and Environment. This included the social purpose that underpins the Group vision; We Help Everyone Enjoy Amazing Technology and the role the Group can play using its scale and innovation to contribute to key societal issues. The Board agreed that the ESG Strategy needed to include specific plans to reduce the impact of the Group on the environment in both our operations and our wider value chain. The Group has committed to achieve net zero emissions by 2040. The Board agreed that the ESG Strategy should accelerate the Group providing products that help customers save energy, reduce waste, and save water. The Board considered the wider community as part of an evaluation of the Group’s charitable partnerships to assess how the Group can most effectively make a charitable contribution including to bring the benefits of amazing technology to those who might otherwise be excluded. Collaboration with Our Suppliers is critical to reduce the environmental impact of products sold within the Group. The Board agreed that the ESG Strategy had to include a programme of activities involving suppliers, partners, manufacturers, and colleagues working towards a common goal to offer more sustainable products and ensure responsible sourcing and ethical standards across the Group’s supply chain. The Board recognised that there has been increased interest from Our Shareholders on the detailed plans supporting ESG initiatives. The Board agreed that the Group would need to enhance current ESG disclosures and reporting and share more information on existing recycling and other ESG initiatives in the business. There was a presentation on ESG at the Capital Markets Day held in November 2021 and this was supported by ESG investor roadshows. During the year the Group has been recognised externally by various organisations in relation to the ESG approach. The Board agreed that helping customers give their technology longer life through trade-in, protection, repair, and recycling is a proposition the Group is uniquely positioned to offer. It will be both attractive to customers and position the Group as a long-term sustainable business. Further information on the ESG Strategy is available in the Sustainable Business report on page [x]. ALLOW SPACE FOR BOARD IN HIGH VIZ IMAGE 35 Governance Financial Statements Investor information Strategic Report Our Customers How we engage • In-store • Online • ShopLive • Customer app • Customer care centres • Email • Post-sales survey • Media including social media Stakeholder focus • Product availability • Product range • Product value and affordability • Product sustainability and ethical sourcing • Customer journey experience • Services and Credit • Advice and support • Choice of how to purchase; online or in-store • Seamless delivery experience Our approach to engagement and how the Board is kept informed • The Board receives an update on customer satisfaction metrics each week. Root cause analysis is carried out to understand and resolve any concerning trends. A Voice of the Customer Dashboard is in place for UK and Ireland and the Nordics region has a separate ‘Happy or Not’ satisfaction measure. In June 2021 the Board received a more detailed UK&I customer satisfaction scores update including customer experience highlights for 2020/21 and an update on how key customer ‘pain points’ had been identified and addressed. A deep dive on Nordics in April 2022 included an update on customers. • Verbatim customer feedback is captured from thousands of customers each week to gain insights and help the business better understand customer expectations and concerns. Machine learning and AI solutions are used to quantify the sentiment of the comments. This information is reviewed internally and used to generate improvements to the customer experience. The Board continued to receive a synopsis of the results of this feedback during the year and these insights into the customer experience are considered by directors as part of Board decision-making. • ShopLive provides customers in Nordics, Ireland and the UK an in-store experience from their own homes via video link with sales colleagues. This functionality enables customers to receive advice on laptops, TVs, washing machines and refrigeration products to ensure that customers, including the most vulnerable, can benefit from store colleagues’ expertise remotely. The Board receives regular updates on the performance of ShopLive. • During the year, the Board considered customer feedback as part of the decision to approve proposals to enhance the customer experience including a 3-year transformation plan for UK&I Customer Management Centre and the establishment of a new Nordic distribution centre that would substantially reduce the CO 2 impact of distribution. CASE STUDY: Board decision on UK logistics operations During the year the Board considered the interests of the Company’s stakeholders during a review of the logistics operations in UK&I. The Board considered whether an enhanced in-house model or an outsourced model for warehouse and transport operations could best deliver a clearer, simpler, faster Supply Chain and Services Operation in the UK that would benefit the Company’s key stakeholder groups. The Board considered the needs and expectations of OurCustomers and the ability of each model to deliver greater customer choice, availability and fulfilment options and meet customer promises. The Board agreed that increasing functionality in respect of speed, choice and convenience would be critical to meet customer expectations. The Board agreed that the use of technology and innovation to continuously improve the working environment for OurColleagues would be beneficial for colleague engagement and well-being in addition to increasing the time colleagues have to offer a customer-centric service. The risks of each proposal were considered together with the impact on Our Communities and Environment. The accountable Executive Committee member for the logistics operations is the Chief Supply Chain Officer who also attends ESG Committee meetings and monitors the Group’s progress against emissions and e-waste targets and other ESG metrics. The Board considered the needs of Our Suppliers and Partners relevant to the logistics operations and assessed the proposals in terms of the efficiency improvements including improved stock management, forecasting and capacity and supplier management. The customer, colleague and financial benefits of the proposals were considered together with costs to evaluate the option that would provide the best overall value for Our Shareholders and support the long-term sustainable success of the business. Following consideration of the proposal, including the impact on the Company’s key stakeholder groups, the Board approved that the business enter into an agreement with XPO logistics to run the Company’s key warehouses and distribution centres and transport operations. 36 Currys plc Annual Report & Accounts 2021/22 Our Stakeholders Stakeholder Management continued Our Communities and EnvironmentOur Colleagues How we engage • Surveys and forums • Website, reports and media including social media • Engagement meetings and events • Charity and supplier partnerships • Multi-stakeholder collaborations Stakeholder focus • We Help Everyone Enjoy Amazing Technology • Being a responsible contributor to society • Being a good employer • Having sustainable business practices and minimising impact to the environment and addressing climate change Our approach to engagement and how the Board is kept informed • An Environment, Social and Governance (‘ESG’) Committee is in place to oversee all charitable and ESG activities carried out across the Group. Representatives from all countries attend this forum and provide updates. The ESG Committee is attended by a non-executive director of the Board, Andrea Gisle Joosen, is chaired by the General Counsel and Company Secretary and reports into the Executive Committee. More information is available on page [x]. • The Company has a Sustainable Business team that leads the management of the Group’s charitable partnerships and environment initiatives. • The Company was awarded the highest available rating, an A, by global environmental non-profit CDP, for its leadership in corporate sustainability in tackling climate change putting it in the top 1.5% of 13,000 companies for climate change disclosure. • Through design, repair, recycling and re-use the Company is working to improve its use of resources and create circular business models. The Company will use its scale and expertise to help drive industry action and in November 2021 joined the Circular Electronic Partnership (CEP), who maximise the value of components, products and materials throughout their lifecycle. • The Company seeks to help accelerate industry change by working with other retailers and suppliers to share best practice and reduce the industry’s reliance on plastic packaging. For example, unrestricted access has been given to Product Packaging Guidance to share best practice with the wider industry. This guide outlines to suppliers and other retailers preferred materials to use and which materials to avoid based on data sources and engagement with a number of specialist organisations and experts. • Through a £1m donation to found the Digital Poverty Alliance, the Company has equipped 1,000 teachers and teaching assistants in the country’s poorest communities with the technology and support they need to deliver high quality teaching. These teachers are in turn forming a community of ideas and best practice to help create digital inclusion for everyone. • The Board received comprehensive ESG updates in September and December 2021 and regular reporting on sustainability and charitable activities is included within the CEO report at Board meetings. The Board agreed an approach for a new ESG strategy during the year and this included consideration of the needs of key stakeholder groups. How we engage • Internal communications; Executive Committee member updates, Workplace intranet, emails, ‘Ask Alex’ Group Chief Executive interactive videocalls, interactive calls hosted by Executive Committee members, team meetings, individual meetings with line managers • Colleague surveys – engagement and for feedback on specific topics such as hybrid working • Events – annual Peak event – online during 2021, campus event for Nordics region, training at The Academy@Fort Dunlop • Colleague listening forums • Inclusion and Diversity Forum Stakeholder focus • Company culture and values • Well-being • Reward • Benefits • Flexible working • Health and safety • Training and development • Inclusion and diversity • Company social purpose and sustainability Our approach to engagement and how the Board is kept informed • New store-based colleagues that join the business in the UK attend a training event at the Academy@Fort Dunlop centre before they start work serving customers in stores. Similar training is also provided in Nordics and Greece. A separate induction programme is in place for corporate colleagues. • A central ‘People Place’ intranet site is available to UK&I colleagues and provides access to all HR policies and guidance and allows colleagues to log any issues or questions and a ‘well-being corner’ Intranet site is available to support colleagues. • A central International Colleague Forum is in place to unify the long- term existing country forums into a single listening and engagement forum for all colleagues. Tony DeNunzio, the Deputy Chair and Senior Independent Director, attends these forum meetings with the Chief People, Communications and Sustainability Officer, Paula Coughlan. Andrea Gisle Joosen, our Swedish based Non-Executive Director, attends the Nordics colleague forum meetings. The Board received an update on Colleague Listening at a Board meeting in April 2022. • The annual Peak event was held virtually during November 2021 to provide colleagues with strategic updates from the Executive Committee members and to provide colleagues with information and training. Topics included strategic plans, ESG updates and the Company values. • Regular colleague surveys are used to seek feedback which is then shared with the Board and used in decision-making. Surveys seek feedback on engagement and include ESG questions and specific surveys have been used during the year to assess colleagues’ views on hybrid working and office facilities to support the design of a new hybrid model of working. • Directors visit stores and meet colleagues in person. Whilst these visits were less frequent than previously due to Covid, the Board visited the UK&I distribution centre in Newark during March 2022. This visit included meeting many colleagues from Supply Chain & Services Operations, receiving updates on current priorities for the team as well as new areas of innovation. • A Colleague Shareholder award scheme is in place to allow colleagues to share in the success of the business. Further details of this scheme are available in the Remuneration Report on page [x]. • Board and committee paper authors include their contact details on papers submitted to the directors and directors frequently contact them directly when they have queries on papers or are interested to receive more detail. 37 Governance Financial Statements Investor information Strategic Report Our ShareholdersOur Suppliers and Partners How we engage • Results announcements and presentations • Annual report and accounts • Annual General Meeting • Investor roadshows • Shareholder meetings • Company website • Registrar contact • Consultation with major shareholders on key topics • Capital Markets Day 2021 Stakeholder focus • Ensuring the long-term sustainable future of the business • Financial and share price performance • Dividend policy • Current trading • Business strategy and vision • Director remuneration • Shareholder communications and engagement • Environment, Social and Governance issues Our approach to engagement and how the Board is kept informed • The Board receives updates from the Investor Relations team at every Board meeting. These include updates on any material changes to the composition of the shareholder register, a summary of investor interactions that have taken place during the period as well as upcoming interactions and a summary of investor questions received, and topics discussed. • The Investor Relations team manages a programme of meetings with the top 30 shareholders and most of these meetings are also attended by at least one Board director. For other shareholders, the primary point of contact is the Company’s registrar, although any matters can be escalated to either the Investor Relations or Company Secretariat teams as appropriate. • A Capital Markets Day was held in November 2021 to provide shareholders with an update on the Group transformation and strategy. The event was attended by most of the Company’s largest shareholders and the presentations are available on www.currysplc.com. This included a presentation on ESG and was supported by ESG investor roadshows. • The Chair of the Board requests an engagement meeting with each of the top 30 shareholders of the Company on at least an annual basis to discuss any topics of interest to the shareholder. • The Chair of the Remuneration Committee also contacted the Company’s largest shareholders during the year to consult with them in advance of the Remuneration Policy being submitted to shareholders for approval at the Company’s Annual General Meeting in 2022. How we engage • Formal engagement strategy including regular visits and meetings • Supplier relationship management team • Supplier questionnaires • Due diligence process for new suppliers Stakeholder focus • Strong customer demand • Good collaboration • Reliability • Value • Health and safety • Compliance • Effective communications • Sustainability and ethical sourcing Our approach to engagement and how the Board is kept informed • The Board receives regular feedback on substantive Supplier matters via the Group Chief Executive and the Chief Commercial Officer. • The Group Chief Executive participates in regular meetings with the Group’s largest suppliers and receives regular updates on all suppliers from the Chief Commercial Officer. • The Commercial team put in place a formal engagement strategy with each large supplier. This strategy is customised in each case but includes regular meetings and calls between the Group Chief Executive and their counterpart at the Supplier company and between the Chief Commercial Officer and their counterpart. This is supported by a team of colleagues engaging regularly to assess progress against agreed business plans. • A suite of policies and standards are in place to ensure that suppliers and partners adhere to high ethical standards including prevention of modern slavery and anti-bribery. More information on this is available in the Sustainable Business report on page [x]. 38 Currys plc Annual Report & Accounts 2021/22 Sustainable business Our approach Our material issues What we do Link to UN Sustainable Development Goals What we did this year Achievements What we will do next Circular Economy Objective: We will improve our use of resources and create circular business models. Read about our focus on circular economy on pages [xxx]. • We are a leader in extending the life of technology through repair, recycling and reuse. • We work together with manufacturers and suppliers to offer customers more sustainable products. • Joined the Circular Electronics Partnership (‘CEP’) which brings together experts, business leaders and global organisations to set a vision and roadmap to a circular economy for electronics by 2030. • Launched our new UK&I Services Strategy – Giving Tech Longer Life - and ran our first ever financial recycling incentive ‘Cash for Trash’ for customer e-waste in the UK. • Elkjøp marked World Recycling Day and took part in the Board of the industry’s joint effort Ombrukt (Re-used) through the industry association Elektronikkbransjen. • Kotsovolos increased the collection of e-waste for recycling and re-use by 25%. [XXX] tonnes e-waste collected across our Group for reuse or recycling. 1.7m repairs across our Group to keep tech working. [11m] Care & Repair customers in the UK&I. • Utilise our scale with brands to develop, scale up and promote circular economy opportunities for our products and make it more affordable for customers to upgrade their technology. • Launch proof of concept projects as part of our UK&I Services Strategy. • Improve our pre-loved offering. • Continue to expand our e-waste collection services. • Widen our product trade-in capabilities. • Continue to work with the CEP and its members to help move the electronics sector towards a more circular economy by 2030. Climate change Objective: We will achieve net zero by 2040. Read about our focus on climate change on pages [xxx]. • We are reducing our impact on the environment not only through the energy and resources used by our operations, but also in our wider value chain. • We report our energy and greenhouse gas emissions publicly, respond to the CDP questionnaire on Climate Change and support the Task Force on Climate-related Financial Disclosures (‘TCFD’) and its recommendations. • Achieved an A rating for CDP. • Assessed the impact of key climate risks and opportunities for our operations. • Increased the procurement of renewable electricity across the Group. • [Outcome of] colleague bonus scorecard on scope 1 & 2 emissions reduction. • Increased our focus on environmental messages in our customer and product messaging. A Currys score for climate change in CDP. [XXX] reduction in scope 1, 2 & 3 emissions against a 2019/20 baseline. [XXX] reduction in energy (kWh) consumption. • Continue to take steps to reduce emissions, including trialling electric and low-carbon alternative fuelled vehicles. • Continue to increase our disclosure and publish a net zero roadmap. • Share best practice on climate related risk management and monitoring across the Group. • Assess the impact of key climate risks and opportunities of our supply chains. Our communities Objective: We will eradicate digital poverty. Read about our communities on pages [xxx]. • We bring technology to everyone everyday. • We partner with charitable organisations to bring the benefits of amazing technology to those who might otherwise be excluded. • Supported the Digital Poverty Alliance (DPA) to set out its strategy for the next two years to convene, compel and inspire collaboration within the UK community to lead sustainable action against digital poverty. • Supported Age UK to develop and launch 21 Digital Support Guides on topics older people identified as being in most need of to help them access and enjoy technology. • Continued to support people to enjoy amazing technology through our Kotsovolos Second Home programme and the work of The Elkjøp Foundation. • Provided humanitarian aid through the Red Cross and supported refugees in our local communities. £350k+ raised for our partnership with Age UK. £445k+ committed by Elkjøp to number of long-term strategic partnerships to strengthen the ability to fight digital exclusion. 1000+ Kotsovolos colleagues from stores, offices, warehouses and distribution centres participated in Good Deed Day activities. • Work with Age UK to support the successful delivery of a tablet loan scheme, one to one support and awareness raising sessions for four local Age UKs to help enable older people to get and stay connected to their loved ones through tech. • Work with the DPA to launch a Tech4Families project to support vulnerable families in need with life changing access to technology. • Continue to support people to enjoy amazing technology through our Good Deed Day, relaunching our Kotsovolos Second Home programme and The Elkjøp Foundation. • Establish Group principles and policies for Social Impact, and share best practice. Our vision, to help everyone enjoy amazing technology, has a powerful social purpose at its heart. We believe in the power of technology to improve lives, help people stay connected, productive, healthy and entertained. We’re here to help everyone enjoy those benefits and with our scale and expertise we are uniquely placed to do so. We are committed to operating a responsible business by understanding stakeholder expectations and best practice. During the year, we reviewed our Sustainability and Social Impact strategy to ensure this continued to reflect those issues that are most important for our business, our stakeholders and our value chain. We identified three material issues that we are now focused on and will drive meaningful difference on through long-term objectives. We report our progress against these three material issues alongside updates on how our work is underpinned by a strong foundation of responsible sourcing, corporate governance and being a good employer. An Environment, Social and Governance (‘ESG’) Committee is in place to oversee all ESG activities carried out across the Group. Read the Report from our ESG Committee on page [105]. 39 Governance Financial Statements Investor information Strategic Report Our material issues What we do Link to UN Sustainable Development Goals What we did this year Achievements What we will do next Circular Economy Objective: We will improve our use of resources and create circular business models. Read about our focus on circular economy on pages [xxx]. • We are a leader in extending the life of technology through repair, recycling and reuse. • We work together with manufacturers and suppliers to offer customers more sustainable products. • Joined the Circular Electronics Partnership (‘CEP’) which brings together experts, business leaders and global organisations to set a vision and roadmap to a circular economy for electronics by 2030. • Launched our new UK&I Services Strategy – Giving Tech Longer Life - and ran our first ever financial recycling incentive ‘Cash for Trash’ for customer e-waste in the UK. • Elkjøp marked World Recycling Day and took part in the Board of the industry’s joint effort Ombrukt (Re-used) through the industry association Elektronikkbransjen. • Kotsovolos increased the collection of e-waste for recycling and re-use by 25%. [XXX] tonnes e-waste collected across our Group for reuse or recycling. 1.7m repairs across our Group to keep tech working. [11m] Care & Repair customers in the UK&I. • Utilise our scale with brands to develop, scale up and promote circular economy opportunities for our products and make it more affordable for customers to upgrade their technology. • Launch proof of concept projects as part of our UK&I Services Strategy. • Improve our pre-loved offering. • Continue to expand our e-waste collection services. • Widen our product trade-in capabilities. • Continue to work with the CEP and its members to help move the electronics sector towards a more circular economy by 2030. Climate change Objective: We will achieve net zero by 2040. Read about our focus on climate change on pages [xxx]. • We are reducing our impact on the environment not only through the energy and resources used by our operations, but also in our wider value chain. • We report our energy and greenhouse gas emissions publicly, respond to the CDP questionnaire on Climate Change and support the Task Force on Climate-related Financial Disclosures (‘TCFD’) and its recommendations. • Achieved an A rating for CDP. • Assessed the impact of key climate risks and opportunities for our operations. • Increased the procurement of renewable electricity across the Group. • [Outcome of] colleague bonus scorecard on scope 1 & 2 emissions reduction. • Increased our focus on environmental messages in our customer and product messaging. A Currys score for climate change in CDP. [XXX] reduction in scope 1, 2 & 3 emissions against a 2019/20 baseline. [XXX] reduction in energy (kWh) consumption. • Continue to take steps to reduce emissions, including trialling electric and low-carbon alternative fuelled vehicles. • Continue to increase our disclosure and publish a net zero roadmap. • Share best practice on climate related risk management and monitoring across the Group. • Assess the impact of key climate risks and opportunities of our supply chains. Our communities Objective: We will eradicate digital poverty. Read about our communities on pages [xxx]. • We bring technology to everyone everyday. • We partner with charitable organisations to bring the benefits of amazing technology to those who might otherwise be excluded. • Supported the Digital Poverty Alliance (DPA) to set out its strategy for the next two years to convene, compel and inspire collaboration within the UK community to lead sustainable action against digital poverty. • Supported Age UK to develop and launch 21 Digital Support Guides on topics older people identified as being in most need of to help them access and enjoy technology. • Continued to support people to enjoy amazing technology through our Kotsovolos Second Home programme and the work of The Elkjøp Foundation. • Provided humanitarian aid through the Red Cross and supported refugees in our local communities. £350k+ raised for our partnership with Age UK. £445k+ committed by Elkjøp to number of long-term strategic partnerships to strengthen the ability to fight digital exclusion. 1000+ Kotsovolos colleagues from stores, offices, warehouses and distribution centres participated in Good Deed Day activities. • Work with Age UK to support the successful delivery of a tablet loan scheme, one to one support and awareness raising sessions for four local Age UKs to help enable older people to get and stay connected to their loved ones through tech. • Work with the DPA to launch a Tech4Families project to support vulnerable families in need with life changing access to technology. • Continue to support people to enjoy amazing technology through our Good Deed Day, relaunching our Kotsovolos Second Home programme and The Elkjøp Foundation. • Establish Group principles and policies for Social Impact, and share best practice. Engagement Read about our engagement with key stakeholder groups on pages [section 172 content]. Colleague Read about our focus on colleagueengagement to create a happier, healthier and more productive workforce, united through our values and culture on pages [xxx]. Risks Information on our Group Principal Risks, which includes ESG, on pages [xxx]. Information on our activities is also available on our website. www.currysplc.com/sustainable-business United Nations SDGs Read more about the 17 UN Sustainable Development Goals (‘SDGs’) at: https://sdgs.un.org/goals 40 Currys plc Annual Report & Accounts 2021/22 Sustainable business Circular economy We will improve our use of resources and create circular business models Our relationship with tech needs to change and as the #1 tech retailer in all the markets we operate in, we’re uniquely placed to lead the way in changing this relationship. At Currys we don’t just sell amazing technology; we save it too. We believe there’s a far better way – better for you, better for us, better for communities and better for the planet. And that better way is to give technology longer life. Amazing technology We know our customers are looking to reduce their impact on the environment, and it’s our job to make that easier while also ensuring we reflect guidelines from consumer authorities who are intensifying their work to stop greenwashing – where something is deemed to have been conveyed as more sustainable than it really is. We help customers make more sustainable buying decisions: our in- store and online ‘Go Greener’ events promote the attributes of the products and services we sell in the UK&I that save energy, reduce waste and save water. In 2021/22 Elkjøp launched several campaigns aimed at helping consumers take care of their products. With Electrolux the campaign “Make it last” encouraged consumers to take better care of their clothing in washing so they may last longer and with BSH the message was how to avoid food waste. Elkjøp also offer products with strong credentials such as Fairphone – known as the most sustainable alternative for mobile phones – and the Acer Vero PC with a lot of extraordinary sustainability features, such as easiness to dismantle and high content of recycled plastic. Care & Repair There’s no feeling quite like helping a customer find some new tech that suits their needs. But keeping their tech working is important too, and it’s an area of focus we’re really proud of. We offer a range of services to enable longer life of tech. In the UK&I our 1,300-person repair team processes and repairs over 800,000 products a year. Elkjøp also repair over 800,000 products each year, and lead the way on electronic repairs in Norway. Through extended warranties, technical support and online tips and tricks we help our customers take care of their tech. Trade in We help customers make the most of their tech, but when they are finished with it our customers can trade-in their unneeded products so that they can have a longer life. We offer trade-in for key tech items [and Elkjøp and Currys are increasing their focus on trade-in], where we offer money for old devices that are then given new life elsewhere. They can be sold as pre- loved, broken down for reusable parts or provided to those without access to their own. 1.7m repairs completed across our Group, ensuring customers can continue to enjoy their amazing technology. [XXX] tonnes of e-waste collected for reuse and recycling. £3m saved from our parts harvesting operation in our UK Customer Repair Centre, reducing the demand for new parts and lead time on repairs. [XXX] items provided for reuse. Key facts As part of the Currys rebrand we enabled old uniform to be repurposed Our recycling partner shredded and de-branded items which were then made into 2,000 cushions to be sold via our charity partner Age UK and 500 sleeper suits which we donated to charities to distribute to homeless people. Anything not able to be used in one of these ways was sent to an energy recovery plant, avoiding landfill. IMAGE TO BE SUPPLIED 41 Governance Financial Statements Investor information Strategic Report We give tech longer life Choose, afford, enjoy Discover and Choose Afford Delivery and Installation Set up and connectivity Protect Maintain Product packaging We’re working to reduce product packaging, and we’ve committed to making all our own label and licensed brand packaging reusable or recyclable by 2023. At the end of 2021/22, [99]% was recyclable, with [76%] recyclable at kerbside. We remain committed to finding solutions that reduce environmental impact whilst also protecting the product from damage. We encourage all our suppliers to eliminate all unnecessary plastics and packaging and proactively work with suppliers of own label and licensed brand products to reduce packaging. Recent initiatives have included trials that have reduced the amount of plastic packaging on refrigeration products by [up to 86%] and on microwaves by [90%] and feedback has been encouraging. We have also rolled out changes such as swapping polyethylene terephthalate (PET) plastic blister trays for paper trays and removing single use items such as cable ties and plug pin covers. As a result in 2021/22 we removed 2.23m items of plastic packaging from own label and licensed brand products, almost 40 tonnes. Since the start of the initiative in 2019 we have removed over 4m pieces equivalent to over 80 tonnes. Collaborating with others To increase our impact we are helping to accelerate industry change by working with other retailers and suppliers to share best practice and reduce the industry’s reliance on plastic packaging. For example, we have given unrestricted access to our Product Packaging Guidance to share best practice with the wider industry. This guide outlines to suppliers and other retailers preferred materials to use and which materials to avoid based on data sources and engagement with a number of specialist organisations and experts. Read our Packaging Guidance on www.currysplc.com. Help our customers recycle packaging In the UK&I, we also offer our customers a free packaging recycling service when we deliver and unbox large household appliances. It’s resulted in [thousands of tonnes] of packaging being retrieved. In fact, we’re one of the largest recyclers of polystyrene in the UK, recycling 14.5% of all post-consumer polystyrene recycled across the country. This market leading approach to recycling polystyrene led us to launch the first polystyrene recycling services in our UK stores for customers who purchase a TV from store. It allows a customer to return all the packaging from their new purchase to any Currys store. This ensures the polystyrene, which currently isn’t collected at kerbside for recycling, to be recovered and processed into something new. Looking ahead In 2022/23 we will carry out further trials on large white goods and work with suppliers to investigate options to get used packaging and other raw materials back to them for circular production. Repair 1.7m product lifespans extended through repair 1,654 people in our repair team across the Group Reuse and recycling #1 retail recycler of tech in UK [103k] tonnes of electrical reuse and recycling >[£9m] value of products provided for reuse Trade-in and resale 145k customer products collected through trade-in [253k] used and refurbished products sold New products Recycled components used to build new products 42 Currys plc Annual Report & Accounts 2021/22 Sustainable business Circular economy continued E-waste is among the fastest growing environmental problems in the world At Currys we don’t just sell amazing technology; we save it too. We help repair, recycle, refurbish and donate unwanted tech. It’s all part of changing our relationship with tech and giving it longer life. Collecting used tech We help customers make the most of their tech, but when they are finished with it, our customers can trade-in or hand over their unneeded products so that they can have a longer life. Currys have worked on responsible recycling for many years. To maintain our focus, the collection of e-waste for recycling and reuse is one of two environmental metrics introduced into our annual bonus scorecard in 2021/22. We offer trade-in for key tech items. Elkjøp and Currys are also increasing their focus on trade-in, where we offer gift cards or money for old devices that are then given new life elsewhere, or recycled. We offer recycling collection services of redundant products when a new one is delivered, as well as free in store drop off for products across the Group. Each year, we collect [XXXX] of e-waste from customers. The waste is collected by local recycling partners, handled properly, and recycled or reused help tech live on and on. While larger electronic products such as washing machines and TVs are commonly collected, there is a challenge to collect smaller electronic devices such as cables, small appliances and computing accessories for reuse and recycling. Mobile phones, tablets and other devices with stored data often remain with customers due to a lack of awareness on how data is handled before recycling. Our aim is to make it easy and normal for all electronics to be recycled. For example, in the Nordics, Elkjøp marked World Recycling Day (18th March) and in the UK Currys promoted recycling through its ‘Cash for Trash’ month-long promotion. This resulted in an increase of 98 tonnes of small electricals and an uplift in our trade-in service as the promotion launched. By raising awareness, encouraging consumers to recycle everything that is outdated or not in use, we help give everything longer life. Focus on services such as trade-in and [subscription based consumption models will continue in 2022/23.] Giving tech a longer life When technology is at the end of its useful life for a customer, their used technology can go on to have benefits for many other people, helping them in turn to enjoy amazing technology. We screen products that are returned to us, repair if relevant and have mechanisms in place to sell these through store or online outlets to give these products a chance of a second life. We also use these items to help train new repair or installation engineers or to harvest parts for use in our repair services. Elkjøp takes part in the board of the industry’s joint effort Ombrukt (Re-used) through the industry assosciation Elektronikkbransjen. The project aims at taking products out of waste streams, and by providing 3rd party certification, enable safe re-use with a 2-year warranty. And when we can, we repair and refurbish them to support local causes and low- income families. 88 old mobile phones contain enough gold to make a wedding ring yet in the Nordics, each person has an average of 2.3 mobile phones lying around in a drawer or in the attic unused. 96 different elements can be found in electronic products – the world is running out of materials like magnesium, cobalt, tungsten and rare minerals. 75m number of tonnes e-waste is expected to grow to globally by 2030. Treasure it. Don’t stash it. 43 Governance Financial Statements Investor information Strategic Report In the [UK&I] we provided more than [xx] products for reuse last year. This was achieved through our partnership with the Reuse Network and the 150+ charities they support across the UK which helped 7,024 low income households save £1.3m in [2021/22]. And our work with the UK’s largest independent recycler of e-waste and provider of reuse, Environcom, to support major UK charities, with [7,024] refurbished white goods. We also donated refurbished items to specific causes, including 200 devices to Humans in Need in April 2022 to support their work in assisting refugees from the Ukraine. It’s not just in the [UK&I] that we’re making a difference, either. Through the ‘Second Home’ programme in our Kotsovolos stores, [1,500] refurbished appliances have been distributed to families in need since 2017. This means our customers can enjoy our amazing technology even more, in the knowledge that they are using a product that is good for their pocket and better for the planet, and that can be enjoyed again by others. [xxx] [XXX] Number of tech items provided to charities for reuse [XXX] STATS TO BE CONIFRMED 44 Currys plc Annual Report & Accounts 2021/22 Sustainable business Climate change We will achieve net zero by 2040 The climate crisis remains one of the greatest threats to our planet and we recognise the impact this has on business and supply chains, including our own. Addressing our climate risks and opportunities is a part of our Sustainability and Social Impact strategy. Climate change strategy Our purpose, to help everyone enjoy amazing technology, goes beyond ensuring customers can choose, afford and enjoy the right technology. We recognise our responsibility in ensuring that our corporate purpose is one which is sustainable and responds to our climate risks and opportunities. This is why we embed this thinking within our Sustainability and Social Impact strategy. We recognise that the impacts of climate change are hard to predict with accuracy and that they will impact businesses in many different ways, at different times and these impacts may also be compounded by one another. We support the Task Force on Climate- related Financial Disclosures (‘TCFD’) and its recommendations. Understanding the impacts of climate change on our business provides us with the opportunity to develop a strategic response to mitigate the risks, whilst building on the opportunities this presents for Currys. We have carried out this work and are disclosing our progress in line with the recommendations of the TCFD. We have made significant progress this year with the completion of quantitative scenario analysis to further strengthen our strategy and enable us to build a roadmap to increased climate resilience. We have responded to the CDP questionnaire on climate change since 2016, scoring an A in the latest 2021 disclosure, and as part of this report we included the material climate-related risks and opportunities we identified through climate risk and opportunity identification workshops which we ran in 2021/22. These workshops identified short, medium and long-term physical and transitional climate-related risks which have been reflected in our ESG Risk Register. Our ESG Risk Register is monitored by our ESG Committee. We recognise that climate-related risks and opportunities cannot be assessed through traditional risk management processes only. As such, we have undertaken a pilot scenario analysis exercise in this reporting year. We applied scenario analysis to the two most material climate-related risks for our operations, identified through internal workshops: • Policy driven changes to energy costs, and their impacts on the cost of running our stores, distribution centres and vehicles. • Increasing severity and frequency of extreme weather events, and their impacts on damage to facilities, stock and operational disruption. The analysis considered each risk independently of the other, except for energy costs where we included the additional cost of cooling our facilities because of increasing average external temperatures. In each analysis we used consistent time horizons of 2025, 2030 and 2040 to align with our current Risk Management time horizons and extending out to the target years of our climate goals. Analysis was based on the latest climate models and scientific understanding. We used the three climate scenario models developed by the IPCC (RCP 4.5 Low, RCP 4.5 High and RCP 8.5) using NEX-GDDP and EnerData datasets, across three different time horizons. Following this work, we will now seek to improve our existing measures to adapt to and mitigate climate change with a strategy which is informed by scenario analysis. We continue to invest in measures to mitigate our climate change impact, and as part of this we have near-term emissions targets approved by the Science Based Target initiative (‘SBTi’) with a net zero target by 2040. This pilot exercise also highlighted areas where data can be improved to enhance the robustness of model outcomes. We recognise the importance of collaborative action; we have committed our support to EV100 and the British Retail Consortium Climate Action Roadmap. We have actively supported business commitments to climate action, including being signatories to the Business Ambition for 1.5°C and the We Mean Business Coalition G20 open letter. We also proactively support policy changes and recommendation through our memberships of EV100 and the UK Electric Fleets Coalition. More information on our Sustainability and Social Impact strategy and material issues is on pages [xxx]. Climate governance Our management and response to climate-related risks is led by our ESG Committee, chaired by General Counsel and Company Secretary Nigel Paterson. The Committee considers, monitors and reviews climate change related issues in their meetings to ensure that the appropriate strategy, programmes and investments are in place to build robust and effective risk management. They submit progress to the Risk Committee, Executive Committee and Board. The ESG Committee has four scheduled meetings a year with representation from all business regions including two Board members and one Executive Committee member. CDP score for climate change in 2021 A 45 Governance Financial Statements Investor information Strategic Report The ESG Committee has a clear communication line to the Board with regards to climate-related matters; reporting to the Executive Committee which in turn reports to the Board. Further, the Risk Committee reports up to the Main Operating Subsidiaries which report to the Board. A diagram of our governance structure is included on page [xxx] and a report from the ESG Committee is available on page [xxx]. During the year the Board discussed and challenged the ESG strategy and the extent to which it remained fit for purpose. In day-to-day operations, we have assigned management level responsibility for different climate-related issues in the business and climate-related risks and opportunities are incorporated into the ESG Risk Register. These risks and opportunities are included in Board agendas both through ESG update papers and Risk Committee papers, both of which are provided twice a year. Progress against climate targets are reported to the Executive Committee quarterly. The Board is continuously seeking to increase their knowledge on climate related risks and opportunities. For example, a climate related risks and opportunities workshop was held for members of our Board and Executive Committee in May 2022. This included information and discussion on why net zero is so important, the impacts of climate change on businesses and the key learnings from pilot scenario analysis exercise. The majority of the Board and Executive Committee attended and those that we unable to attend were provided with a recording of the session. The Board fully support Currys science- based targets and commitment to net zero by 2040 across our scope 1, 2 and 3 emissions, with a specific budget allocated over the next three years for investment in emission reduction projects. In 2021/22, emissions related KPIs were included in the annual bonus scorecard for employees and will continue to be KPIs for 2022/23. Whilst not currently in place, Long Term Incentive Plans linked to climate targets have been reviewed and we plan to have them in place within the next two to threeyears. Risk management & opportunities Group risk assessment criteria have been determined and the net and gross risk profile. Priority risks have been agreed by the ESG Committee [and Board] and in [2020/21] a principal risk relating to Sustainability which includes climate- related matters was added to the Principal Risk Register. We will continue to monitor changes to risk (increase, decrease or no change), assess climate change as a principal risk within the business and report risk annually in the Annual Report and Accounts. We have an ESG Risk Register which incorporates short, medium and long-term physical and transitional climate-related risks identified. This ESG Risk Register is reviewed [twice a year], with climate related risks covering both transitional and physical risks scored against impact and likelihood, along with further mitigation actions identified and assigned to relevant management team. Actions identified as a result of this year’s pilot scenario analysis exercise will be added to our ESG Risk Register. Further information Read about our risk management on pages [XX and XX]. Climate metrics & targets We’re committed to achieving net zero emissions by 2040 by reducing the impact of the energy and resources we use in our operations - but also in our wider value chain. Our near term emissions reduction targets to reduce Scope 1, 2 and 3 greenhouse gas (GHG) emissions by 50% across the Group by 2029/30, have been approved by the Science Based Targets initiative (‘SBTi’) as consistent with levels required to meet the goals of the Paris Agreement. In this way, our definition of net zero meets a number of the requirements of the SBTi Corporate Net-Zero Standard. The targets covering greenhouse gas emissions from Currys operations (Scope 1 and 2) are consistent with reductions required to keep warming to 1.5°C, the most ambitious goal of the Paris Agreement. Currys target for the emissions from its value chain (Scope 3) meet the SBTi’s criteria for ambitious value chain goals, meaning they are in line with current best practice. For 2021/22 we introduced a new emission based KPI in the bonus scorecard for colleagues, affirming the importance of reducing emissions and tackling climate change as a business. This KPI will be present again in the 2022/23 bonus scorecard. We report on intensity metrics, MWh/1000sqft for energy and MPG for fleet vehicles and have set a target for zero waste to landfill for commercial waste in UK&I; in 2021/22 we diverted [xxx] from landfill. We also measure the proportion of our business that uses renewable electricity and the number of electric vehicles in our fleet (see Operational emissions). Our Scope 1, 2 and business travel (Scope 3) emissions have been assured against the ISAE 3410 standard by KPMG. An update on our progress against our targets is included on pages [xxx] and our data methodology is available on www.currysplc.com. We will refine the metrics that we monitor for the physical impacts from the identified material acute risk drivers; and have identified further metrics to manage our response to energy cost increases such as percentage of vehicles converted to electric vehicles or alternative fuels. We are actively addressing wider climate-related risks and report on the key data we use to monitor our progress, for example our transition to renewable energy (see pages [xxx]) and moving towards circular business models (see pages [xxx]). Further information Read about our energy and carbon data on pages [XX and XX]. Read about [xxx] on page [XX]. Information on our Environmental policy is available on our website. www.currysplc.com/sustainable- business/policies-disclosures 46 Currys plc Annual Report & Accounts 2021/22 Operational emissions Energy We’re taking action to reduce our use of energy. In fact we maintained our certification of our Energy Management System (‘EnMS’) in 2021/22 for our UK&I estate and fleet. And in line with the British Retail Consortium’s Climate Action Roadmap, we have set a target to operate 100% LED coverage in all new buildings by 2025 – we made progress in 2021/22 and now 68% of our UK&I portfolio uses LED technology as the main source of lighting. We also achieved 100% of our properties on the UK&I, Greece and in the Nordics being powered by renewable electricity, expanding this in the UK to now include sites where we aren’t responsible for the supplier contract (back by REGOs in the UK and GOs in Europe). We also have four [UK] sites with Solar PV installed, with a capacity of over 2MWp, reducing our emissions by approximately [413] tonnes. Fuel We are a signatory to the Climate Group’s EV100 initiative and are fully committed to transitioning 100% of our company cars and small van fleet and 50% of our medium to heavy fleet to electric or alternative fuel fleet by 2030. EV100 is a global initiative bringing together companies committed to accelerating the transition to electric vehicles (EVs). In 2021/22 we submitted our first roadmap and second progress update to EV100. We currently have [three] electric vehicles in service across the Group, along with [34] charging points installed across [seven] sites. Whilst this represents a small proportion of the total vehicles in our owned fleet, our approach is to run trials for up to a year with a number of different drivers to give them a true on-the-job experience and to gain their feedback. So far feedback has been overwhelmingly positive which will help support our business case for expanding the use of these vehicles. Sustainable business Climate change continued [Lorem ipsum] Through our supplier, Calor, [x]% of LPG provided to power our forklifts in the UK was a bioLPG blend, which has 40% less CO 2 e emissions than traditional LPG. We aim to increase to % of bioLPG we use in our forklifts alongside Calor’s own target of providing 100% bioLPG before 2030. 76% of our portfolio across the Group uses LED technology as the main source of lighting. 100% of our properties in UK&I, Greece and the Nordics are powered by renewable electricity where we are responsible for supplier contracts. We are in talks with many of the major vehicle manufacturers to continue trialling car and van options, with the plan to introduce more EVs at scale in 2022. As well as develop and test other innovations such as our work with TRAILER in the UK to reduce our emissions. In partnership with TRAILAR, we have invested in solar powered vans to help reduce the fuel consumption of nearly 200 vans across our network. Across the next four years, this initiative will aim to reduce our CO 2 by 271 tonnes a year, equivalent to 1.39 tonnes a year per vehicle. This will save an estimated 552 litres of diesel per vehicle each year. We are also continuing to target reductions through improved driver training, the use of telematics and our ‘in-cab’ driver alert system and – in the UK&I – implementing ISO 50001. Key facts IMAGE TO BE CONIFRMED 47 Governance Financial Statements Investor information Strategic Report Scope 3 emissions Our Scope 3 emissions include the indirect emissions from across our value chain which account for over [xx]% of our total emissions. The most material impacts are within purchased goods and services and the use of sold products. We will achieve reductions in these emissions through a programme of activities involving our suppliers, our manufacturers and through colleague engagement. The following table details Currys Scope 3 emissions. This data has not been externally verified. This data includes indirect GHG emissions across our value chain which account for over [90%] of our total emissions. We have [been able to use more primary data to calculate our Scope 3 emissions for 2021/22]. Other notable changes include [emissions from the use of sold products decreasing due to grid greening resulting in significant reductions in emissions]. Category Tonnes of CO 2 e emitted 2021/22 % change from baseline Tonnes of CO 2 e emitted 2020/21 Tonnes of CO 2 e emitted 2019/20 Purchased goods and services [XXX] [XX]% 3,250,795 4,300,532 Fuel and energy-related emissions [XXX] [XX]% 13,085 15,905 Upstream transportation and distribution [XXX] [XX]% 53,653 165,115 Waste generated in operations [XXX] [XX]% 2,588 972 Business travel [XXX] [XX]% 415 2,754 Employee commuting [XXX] [XX]% 19,390 27,275 Downstream transportation and distribution [XXX] [XX]% 16,904 35,906 Use of sold products [XXX] [XX]% 23,061,342 34,001,509 End-of-life treatment of sold products [XXX] [XX]% 9,990 9,843 Total: [XXX] [XX]% 26,428,162 38,559,811 Assessing supplier performance We’ve also partnered with one of the leading providers of business sustainability ratings: EcoVadis. This helps us to measure supplier performance across a wide range of metrics and identify ways we can champion positive activities, collaborate to improve performance, reduce our emissions and benefit wider society. Looking ahead We plan to build on our pilot climate scenario analysis and learnings, ensuring it is embedded into our Governance, Risk Management and Strategic approach. In time, we also intend to expand this to other areas of our value chain to further assess business resilience under different scenarios. We will continue to quantify the transitional and physical risk outputs from our scenario analysis and incorporate this into our business strategy. We will develop and publish a robust net zero emissions roadmap for the Group which will provide detail on carbon abatement for key emissions sources and neutralisation plans of any source of residual emissions that remain unfeasible to remove. TCFD Statement of Compliance Currys is disclosing in accordance with the [Financial Conduct Authority (‘FCA’) Policy Statement 20/17 and listing rule LR 9.8.6R(8)]. The main disclosures are set out on pages [xxx]. The disclosures describe activity to date and future areas of focus to further strengthen our strategic approach and communication of climate- related issues. 48 Currys plc Annual Report & Accounts 2021/22 Sustainable business Climate change continued The company-wide kWh energy consumption for the reporting period [1 May 2021 – 30 April 2022], are as follows: Energy and Carbon Reporting This section details the energy consumption and greenhouse gas emissions from the activities of Currys for the period 1 May 2021 to 30 April 2022, as required by the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 (‘the 2013 Regulations’) and the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 (‘the SECR Regulations’). An operational control approach has been used to define the Greenhouse Gas (GHG) emissions boundary. This captures emissions associated with the operation of offices, retails, warehouses, and distribution sites, plus transport; company-owned, leased and employee- owned vehicles used for business travel. This includes emissions from the UK and Offshore including the Republic of Ireland, Greece, Sweden, Norway, Finland, Denmark. There are no material omissions from the mandatory Scope 1 and 2 emission reporting requirements. This information was collected and reported using the methodology in Defra’s updated greenhouse gas reporting guidance, Environmental Reporting Guidelines (ref. PB 13944), issued June 2019. Emissions have been calculated using the 2020 conversion factors provided by Department of Business, Energy and Industrial Strategy for emissions in the UK and Association of Issuing Bodies (AIB) for overseas electricity conversion factors. Limited assurance was provided by KPMG over selected information for the current reporting year 2021/22 only. [Two successive Covid-19 lockdown periods had a significant impact on the operation of our estate. Store closures, changing operational hours, energy efficiency interventions, increased home working and less business-related travel contributed to a reduction in energy consumption]. Global energy consumption Currys Energy consumption (kWh) UK and Offshore 2021/22 Global Total 2021/22 Global Change (%) UK and Offshore 2020/21 Global Total 2020/21 UK and Offshore 2019/20 Global Total 2019/20 Transport (including Diesel, Petrol, LPG) [XXX] [XXX] [XX]% 54,936,222 61,599,577 63,377,377 71,261,546 Natural Gas [XXX] [XXX] [XX]% 27,318,959 28,500,590 20,301,590 22,142,355 Heating Oil [XXX] [XXX] [XX]% 98,860 331 ,876 214,868 214,868 Electricity [XXX] [XXX] [XX]% 90,122,184 192,890,720 131,070,522 236,971,131 Total: [XXX] [XXX] [XX]% 172,476,225 283,322,763 214,964,357 330,589,900 Intensity (MWh/ 1,000 ft 2 ) [XXX] [XXX] [XX]% 14.58 13.65 18.02 16.24 The GHG emissions for our business for the reporting period 1 May 2021 – 30 April 2022, are as follows: Emissions on location basis (1) Currys Category Tonnes of CO 2 e emitted 2021/22 Change (%) Tonnes of CO 2 e emitted 2020/21 Tonnes of CO 2 e emitted 2019/20 Emissions from combustion of fuel (3) (Scope 1) [XXX] [XX]% 19,638 19,868 Emissions from the operation of facilities (6) (Scope 1) [XXX] [XX]% 1,314 874 Emissions from purchase of electricity (4, 5) (Scope 2) [XXX] [XX]% 36,817 51,131 Total: [XXX] [XX]% 57,769 71,873 Intensity ratio: tCO 2 e / 1,000 ft 2 occupied floor area (2) [XXX] [XX]% 2.78 3.53 49 Governance Financial Statements Investor information Strategic Report (1) A location-based method reflects the average emissions intensity of grids on which energy consumption occurs and a market-based method reflects emissions from electricity that companies have selected. (2) Overall floor area of the Currys is estimated to be [20,758,660ft 2] . (3) ‘Emissions from combustion of fuel’, includes a proportion of private cars being used for business travel, which would be classified as Scope 3, in keeping with previousyears. (4) The electricity consumption figure includes Scope 2 generation emissions but not Scope 3 transmission and distribution losses. (5) Electricity and gas usage is based on supplier bills. Manual gap filling was conducted for a small proportion of supplies in the UK and Ireland, using an average of the consumption year to date. This is because this report was due before some electricity and gas bills had been provided by the suppliers. This report also includes electricity consumption through supplies where the landlord procures the energy; this has been estimated either based on the average energy consumption per floor area for site type or using last year’s data estimation, all these have been treated as non-green and therefore subject to the residual factor, due to lack of evidence. (6) Refrigerant data processing methodology and exclusions: Where refrigerant top-ups are reported, we assume this covers leakage across the estate under that contractor’s responsibility to repair the leak and top-up the refrigerant, as such no estimation of leakage has been completed for units where no top-ups were carriedout. Emissions on market basis (1) Currys Category Tonnes of CO 2 e emitted 2021/22 Change (%) Tonnes of CO 2 e emitted 2020/21 Tonnes of CO 2 e emitted 2019/20 Emissions from combustion of fuel (3) (Scope 1) [XXX] [XX]% 19,638 19,868 Emissions from the operation of facilities (6) (Scope 1) [XXX] [XX]% 1,314 874 Emissions from purchase of electricity (4, 5) (Scope 2) [XXX] [XX]% 14,368 16,121 Total: [XXX] [XX]% 35,321 36,863 Intensity ratio: tCO 2 e / 1,000 ft 2 occupied floor area (2) [XXX] [XX]% 1.70 1.81 Emissions on location basis By Region Category Tonnes of CO 2 e emitted 2021/22 Change (%) Tonnes of CO 2 e emitted 2020/21 Tonnes of CO 2 e emitted 2019/20 Tonnes of CO 2 e emitted per 1,000 ft 2 of floor area 2021/22 Tonnes of CO 2 e emitted per 1,000 ft 2 of floor area 2020/21 Tonnes of CO 2 e emitted per 1,000 ft 2 of floor area 2019/20 UK and Offshore (7) (Scope 1 & 2) [XXX] [XX]% 39,951 51,866 [XXX] 3.38 4.35 Global (excluding UK and Offshore) (Scope 1 & 2) [XXX] [XX]% 17,817 20,006 [XXX] 2.11 2.37 Total: [XXX] [XX]% 57,769 71,873 [XXX] 2.78 3.53 Emissions on market basis By Region Category Tonnes of CO 2 e emitted 2021/22 Change (%) Tonnes of CO 2 e emitted 2020/21 Tonnes of CO 2 e emitted 2019/20 Tonnes of CO 2 e emitted per 1,000 ft 2 of floor area 2021/22 Tonnes of CO 2 e emitted per 1,000 ft 2 of floor area 2020/21 Tonnes of CO 2 e emitted per 1,000 ft 2 of floor area 2019/20 UK and Offshore (7) (Scope 1 & 2) [XXX] [XX]% 20,038 21 ,762 [XXX] 1.70 1.82 Global (excluding UK and Offshore) (Scope 1 & 2) [XXX] [XX]% 15,263 15,101 [XXX] 1.71 1.79 Total: [XXX] [XX]% 35,321 36,863 [XXX] 1.70 1.81 2019/20 2020/21 2021/22 Non-renewable fuels purchased and consumed (MWh) 93,619 90,432 [xxx] Non-renewable electricity purchased (MWh) 110,845 32,420 [xxx] Total renewable energy purchased or generated (MWh) 126,100 157,858 [xxx] Total non-renewable energy consumption (MWh) 204,464 122,852 [xxx] 50 Currys plc Annual Report & Accounts 2021/22 Sustainable business Our communities We bring technology to everyone everyday We pride ourselves on bringing technology to more people through our competitive pricing, access to online and physical stores, and affordable and responsible credit offering. But that’s not all: because our social purpose is at the heart of what we do, we also support causes that help those who might otherwise be excluded. Digital equality We want everyone to be able to enjoy equal access to the benefits of technology. We are committed to helping eradicate digital poverty, in all countries we operate in. In the UK alone 25% of vulnerable children do not have access to a suitable device for learning and 42% of offline users said “it’s not for people like me”. While in the Nordics 20 percent of people have products at home that they do not know how to use. Wherever we operate we can help: • Our colleagues help people in their local communities access and enjoy tech • Our customers help us raise funds to help those who are digitally excluded • Our suppliers work collaboratively with us to be a force for good. The UK Digital Poverty Alliance We are one of three founding partners of the Digital Poverty Alliance (part of the Learning Foundation, registered charity number 1086306) alongside the Institute of Engineering and Technology (‘IET’). The start-up phase of the Digital Poverty Alliance (DPA) was funded by a £1m donation from Currys and we are proud that the last year has seen the DPA set out its strategy over the next two years to convene, compel and inspire collaboration within the UK community to lead sustainable action against digital poverty. Our donation also funded the first DPA proof of concept project, Tech4Teachers, by equipping 1,000 teachers and teaching assistants in the country’s poorest communities with the technology and support they need to deliver high quality home schooling to their pupils. These proof of concept projects are intended to innovate where there are gaps, and the success of the pilot has led to further support for this scheme from other companies seeking to drive change. We are delighted to confirm our ongoing commitment to the DPA and in 2022/23 we will be using Pennies funds to support vulnerable families in need with life changing access to technology. Appliance poverty In 2021/22 in the UK&I we continued our supplier collaboration with Grundig to provide over £50,000 worth of kitchen technology to food related charities nominated by colleagues across the UK. This takes our total support since 2018 to 425 appliances donated, to 215 charities helped at a value of £196,737. IMAGE TO BE CONIFRMED 51 Governance Financial Statements Investor information Strategic Report Amount raised for Age UK’s Tech Connected programme £350,000+ Value of donations made to support those impacted by the war in Ukraine £170k Helping digitally excluded older persons in the UK Age UK was chosen by UK colleagues in March 2020 as our corporate charity partner for a two year period, with the aim of helping digitally excluded older people benefit from amazing technology and connecting them to those that love and need them. With thanks to our colleagues and customers, in that time we have raised over £350,000 for Age UK’s Tech Connected programme. In 2021/22 our customers raised £229,394 through Pennies instore donations and our colleagues raised £7,200 through our fundraising activities. Seven colleagues have also volunteered and made been friendship calld, spending 76 hours, 40 minutes and 42 seconds speaking to lonely older people. With the money raised over the last two years Age UK has been able to develop and launch 21 much needed Digital Support Guides on topics older people have identified as being in most need of. There are Beginner, Intermediate and Advanced guides covering topics such as: an introduction to technology & key terminology; getting connected to the internet & browsing the web; video calling; email; online entertainment, hobbies & shopping, as well as staying safe online. These guides will help enable older people to get and stay connected to their loved ones, supporting their mental health and importantly keeping them safe in the online world. This funds raised will also: • Enable Age UK to develop a Digital Inclusion Service Handbook with information, guidance and tools to help local Age UKs set up a digital skills service in their community. • Launch a tablet loan scheme of over [600] tablets, addressing one of the main barriers to older people wanting to get online: access to technology. • Provide support to four local Age UKs to provide one to one support and awareness raising sessions to older people in their communities through the recruitment and training of local Digital Champions who will help inspire, motivate and support older persons with their digital capabilities. Support to the people of Ukraine: • Prioritised the safety and well- being of our colleagues and partners who have employees working on behalf of Currys - such as Softserve – ensuring they know what support is available. This is particularly the case for our colleagues who live and work near the Ukrainian border (Brno), as well as those who have personal connections within Ukraine. • Joined other large mobile telecoms providers to waiver text and call charges to Ukraine numbers, as well as crediting back calls, texts, and unlimited data for our iD Mobile customers in Ukraine. • Donated £100k as a Group to the Red Cross and advised colleagues of ways in which they can make contributions. • The Brno team are directly supporting refugee & colleague families, which included 200 refurbished devices worth over £42,000 donated from the UK&I business to support Brno’s chosen charity, Humans In Need. • Elkjøp have given an additional £30,000 through direct donations from the business units operating in a number of the Nordic countries. • Kotsovolos supplied more than 100 devices for use by refugees locally through their partnership with The Smile of the Child. To see the guides visit www.ageuk.org. uk/information-advice/work-learning/ technology-internet/digital-instruction- guides/ 52 Currys plc Annual Report & Accounts 2021/22 Sustainable business Our communities continued Elkjøp is fighting digital exclusion Through our annual research Tech Trouble, we have identified a number of groups that due to age, socioeconomic status, disabilities, language and cultural barriers, or other matters, find themselves on the wrong side of the technological divide. We keep track of our customers challenges when it comes to technology through our Tech Trouble survey. According to our research one out of three people in the Nordics find it difficult to keep up with the changes in technology, and 20 percent say they have products at home that they do not know how to use. Even more admit that they are not utilising their products to full potential, not knowing how to use all the features. Elkjøp’s partnerships and Foundation [In 2021/22] Elkjøp has entered into a number of long-term strategic partnerships to strengthen the ability to fight digital exclusion more effectively. Over £400,000 has been contributed. • Norway: SOS Children’s Villages International, focusing on their project “Digital Village”. • Finland: Save the Children, focusing on their interactive learning solution and contributing to their digital childhood competence center, Kidital. We have also joined the cross-sector Kaikille Kone initiative. • Denmark: Danish Peoples Aid, focusing on “School Start Assistance”, ensuring that those with low income also get a good start at school. • Sweden: Läxhjälpen (“Homework Assistance”), focusing on kids having the right digital equipment to be able to do homework in an efficient way. Also new is the partnership with Barnens Dator (“Computers for kids”), focusing on donating gaming computers to kids and families that risk missing out due to low income. In addition, The Elkjøp Foundation was established to fight digital exclusion. It works to raise awareness, increase knowledge, and enable access to people who are falling behind in the rapid development of technology. To connect, play or learn with technology should be easy and fun but that is not always the case. That is why The Elkjøp Foundation supports organisations and associations with products and guidance – in addition to financial resources. This is very close to our vision and our hearts, and work we are incredibly proud of. Elkjøp funding to fight digital exclusion £400k+ IMAGE TO BE CONIFRMED IMAGE TO BE CONIFRMED 53 Governance Financial Statements Investor information Strategic Report Kotsovolos’ support Kotsovolos support low income families and the move to a circular economy through their Second Home initiative. Colleagues motivate customers to offer their unused devices and donate them to families in need. Second Home Kotsovolos support low income families and the move to a circular economy through their Second Home initiative. Through the programme, Kotsovolos enables people who have functional devices they no longer use, to donate them and support families in need. Colleagues motivate customers to offer their unused devices and donate them to families in need. Kotsovolos undertakes to collect the device, repair it and disinfect it, and then offer it to another family. If the appliance cannot be repaired, the company undertakes to recycle. Between 2018-2020 more than 1,000 families received at least one basic appliance, such as refrigerator, oven or washing machine. During the last year the process has been updated and redesigned. Despite this c. 100 devices were offered at a total cost of £22,757 to: K.Y.A.D.A (Athens Municipality Solidarity Center), The Smile of the Child, The Ark of the World and local causes working in cooperation with local stores. This programme will be relaunched in summer 2022. Kotsovolos Technology without obstacles programme Kotsovolos strives to empower people to live a better life with technology. This initiative aims to maximize access to technology for people with disabilities. Their ‘Technology without Obstacles’ programme is key to enabling digital inclusion for people with disabilities, and creating equal access for all. Kotsovolos is the first retailer in Greece that is investing in store and product accessibility for people with disabilities. For example: • 14 accessible stores are already recognised by the Hellenic Society for Protection and Rehabilitation of Disabled Persons as accessible to people with disabilities and 18 more stores are expected to be recognised as accessible to people with disabilities in the next 12 months. • First retailer in Greece to offer sign language assistance through contact centre agents and also to offer the opportunity to blind people to be able to read their insurance contracts summary in braille. • A dedicated microsite explains all supportive technologies for those with visual impairments, hearing disabilities and mobility impairments. • A dedicated qualitative survey for people with disabilities was implemented and shared through a digital event to Greek retailers. Kotsovolos has held two training sessions for colleagues and in 2022/23 aims to provide sessions for all colleagues as well as develop dedicated corporate campaigns raising awareness about disability issues among consumers. Kotsovolos has also worked with Laddroller to create its next generation wheelchair. Laddroller was made to help wheelchair users worldwide to overcome their loss of autonomy. It is an entirely new, innovative approach to mobility compared to existing devices, allowing users to stand up when using Laddroller. The first of this generation of Laddroller wheelchair will be donated to a child with physical disabilities in cooperation with ELEPAP, a charity committed to providing lifelong support to those with disabilities. Kotsovolos Good Deeds day In Greece, our teams spend a day every year taking part in ‘Good Deed Day,’ where they agree among themselves how they will support local causes. Good Deed Day was established in 2013 and is the biggest volunteer action for Kotsovolos’ people that takes place once a year on a Sunday in May or June. Every year, more than 1,000 volunteers from stores, offices, warehouses and their distribution center participate in multiple actions focusing on children, minority social groups, older persons or the environment. In 2021/22 colleagues gave up their time to volunteer on Good Deeds Day, organising 17 blood donation drives totalling 256 pints of blood, supporting hospitals in Greece and Cyprus. IMAGE TO BE SUPPLIED 54 Currys plc Annual Report & Accounts 2021/22 Sustainable business [Lorem ipsum] Our suppliers Bringing amazing and more sustainable tech to our customers isn’t something we do alone. Our partnerships with suppliers make a big difference too. Responsible sourcing We collaborate with our manufacturers and suppliers to make sure the products we sell are safe and responsibly sourced. And when selecting our suppliers or renegotiating existing contracts, we consider their overall sustainability performance, particularly their energy efficiency, climate change impact, water- use and biodiversity impact. Our standards For customers to enjoy our amazing technology they need peace of mind that we’re sourcing responsibly. With around 7,000 suppliers across the globe, we want to make sure we’re using our size and unique capabilities to do good. In addition to compliance with all relevant national and international legislation, we’ve created our own Standards for Responsible Sourcing which set out our expectations for all suppliers, partners and subsequent supply chains. The Standards reflect our commitment to acting with integrity in business relationships. Modern slavery We’re committed to eradicating all forms of modern slavery and human trafficking. The fact that modern slavery still exists today is abhorrent and eradication requires collaboration and transparency. Our Modern Slavery Statement and Policy has been issued to all our colleagues, suppliers and partners. It clearly states the actions to take if a case of modern slavery is discovered or suspected. We work with our suppliers to ensure they adhere to our Modern Slavery Policy. We continue to expand our efforts to tackle the issue - collating existing actions and working on new initiatives across our business and supply chain to mitigate risk and identify areas that need additional focus. Our progress In 2021/22 we: • Invited more suppliers to join the EcoVadis platform to enable us to measure their sustainability performance, with nearly half of total revenue of the Group now assessed. • Joined the Responsible Business Alliance, an organisation with over 400 members involved in the manufacture of electronics and with an aim of driving sustainable value for workers, the environment and business through global supply chains. • Updated our Modern Slavery Policy and issued new Child Labour Remediation and Conflict Minerals policies. • Rolled out our enhanced ethical and quality audit criteria for own label and licensed brand suppliers based in China and the Far East. • Completed our assessment of tier 2 waste and recycling partners here in the UK in conjunction with Slave Free Alliance and our direct (tier 1) supplier. Standards Read our Standards for Responsible Sourcing: https://www.currysplc.com/ media/l15njpci/currys-plc-standards-for- responsible-sourcing-april-2019.pdf Responsible sourcing Read more on our website: https://www. currysplc.com/sustainable-business/ suppliers Modern slavery Read more in our Modern Slavery Statement: https://www.currysplc.com/ media/ekvfjju1/d2752_cpcw_modern- slavery-statement-8.pdf IMAGE TO BE CONIFRMED IMAGE TO BE CONIFRMED 55 Governance Financial Statements Investor information Strategic Report Governance At Currys we’re fully committed to operating a responsible business. We talk to our stakeholders about their expectations, we search out best practice and we reflect these in the decisions we make. is monitored by the ESG Committee and the Executive Committee, with the aim of better managing the broad spectrum of ESG risks. In 2021/22 an Internal Audit of ESG was conducted and we are using the results to drive further improvements in our measurement and reporting of material issues. Our progress in 2021/22 has seen the level of risk attached to sustainability reduce. Our performance which has also been recognised through improved performance in a number of ratings and assessment of our business including: • [In June 2022, our progress in developing and reporting our performance was recognised with our repeated inclusion in the FTSE4Good UK Index]. • We continue to respond to the Carbon Disclosure Project (‘CDP’) questionnaire on Climate Change, demonstrating our continued commitment to identifying, assessing and managing climate- related risks and opportunities across the Group. In 2021, we achieved an ‘A’ score. • As of 28 March 2022, Currys performed in the top quartile in the RTS retailing Industry in the S&P Global Corporate Sustainability Assessment with a score of 32 reflecting an improvement of 12 points over the last year. We’re serious about our responsibilities and want to inspire more engaged colleagues and build a business investors feel good about investing in. Environmental targets continue to feature in our annual bonus scorecard with metrics on e-waste collection volumes (5%) and progress to net zero emissions (scope 1 & 2) (5%). Read more about our remuneration in on page [xxx]. Our Sustainability and Social Impact strategy is signed off by our Group Chief Executive and approved by the Environmental, Social and Governance (‘ESG’) Committee. It is driven and delivered by our colleagues – subject matter experts that are fully integrated across our business. Their work is coordinated by the Director of Group Sustainability and overseen by the ESG Committee which reports into the Executive Committee and comprises representatives from all levels across the business. The business has a systematic approach to ESG risk management. Our approach has been benchmarked against other leading organisations, which resulted in the development of a more comprehensive ESG risk profile and risk appetite statement. Details on our principal risk relating to Sustainability is available on [page xx]. This Principal risk Being a good employer Our people are at the centre of who we are because it makes us what we are. Read more about our colleagues including: • Our new People Plan strategy on pages [xxx]] • Developing talent on pages [xxx] • Creating a culture of well-being on pages [xxx.] • Creating a culture of inclusion and diversity on pages [xxx.] • Communication and engagement on pages [xxx.] • Health and safety on pages [xxx.] Gender pay Read our Gender Pay Report online at www.currysplc.com More information Tax strategy Read our Tax Strategy online at www.currysplc.com ESG Committee Read the Terms of Reference for the ESG Committee: https:// www.currysplc.com/media/4zriehtt/ currysplcesgcommitteetor_nov21.pdf Governance Read more about Governance at Currys: https://www.currysplc.com/about-us/ governance/ [Orepellab imos magnam incto comnitat ligent Orepellab imos magnam incto comnitat ligent Orepellab imos magnam incto comnitat ligent Orepellab imos magnam incto comnitat ligent .”] [Name Surname] [Job Title] OUTQUOTE TO BE CONIFRMED 56 Currys plc Annual Report & Accounts 2021/22 Risk management Approach Principal risks to achieving the Group’s objectives The Group recognises that taking risks is an inherent part of doing business and that competitive advantage can be gained through effectively managing risk. The Group has developed and continues to evolve robust risk management processes, and risk management is integrated into business decision-making. The Group’s approach to risk management and risk governance framework is set out in the Corporate Governance Report on pages [X] to [X]. The risks are linked to the strategic priorities on pages [X] to [X]. Key changes to the Risk Profile During 2021/22 a number of changes were made to the Group Risk profile, these included: • following a reduction in the threat from Covid-19, this risk was removed as a standalone risk and subsumed within the existing Group Health and Safety risk; • our Key Supplier relationship risk was updated to include supply chain related challenges such as reliance on China and factory capacity limitations, chip-set shortages, rising shipping costs, delays at ports and the shortage of HGV drivers. To reflect its wider ambit, the risk was renamed Supply Chain Resilience; and • the risk relating to the Long Term and Diversification of Funding was removed on completion of the refinancing of the Group’s debt and in light of the strong current net cash position. RISK PROFILE Likelihood Impact Increased 2 4 Decreased 11 7 No Change 1 3 5 6 7 8 9 10 12 1 2 3 4 5 6 8 9 10 11 12 Principal Risks 1 Supply Chain 2 Business Transformation 3 FCA 4 Data Protection 5 IT systems and infrastructure 6 Information security 7 Health and Safety 8 Business Continuity 9 Tax liabilities 10 Product Safety 11 Our commitment to Sustainability 12 People 57 Governance Financial Statements Investor information Strategic Report The impact of the Russian invasion of Ukraine The business does not operate in Russia, Belarus or Ukraine and we have obtained confirmations from our Brand and Own Band suppliers that none of the products we sell are produced in these territories. However, there are risks to our business related to the invasion which are being managed, including: • risks to our supply chain caused by transport disruption, scarcity of raw materials and components which are being mitigated through our Commercial forecasting and planning activities, • impacts on our colleagues, especially in relation to our operations in Czech Republic, which are being mitigated through practical assistance and advice being offered to local colleagues through people management channels, and • reputational risks which could occur if the Group was perceived to not be doing the right thing in response to emerging sanctions. We are confident that the Group remains fully compliant with all UK sanctions on Russian and Belarussian entities. Risks and potential impacts The Group continues to develop its risk management processes, fully integrating risk management into business decision- making. The risk management process mirrors the operating model with each business unit responsible for the ongoing identification, assessment and management of their existing and emerging risks. The output of these assessments is aggregated to compile an overall Group-level view of risk. The principal risks and uncertainties, together with their potential impacts and changes in net risk since the last report, are set out in the tables below along with an illustration of actions being taken to mitigate them. Our approach to horizon scanning and emerging risks In order to promote sustainable success, the business continues to analyse the risks likely to emerge in the short, medium and longer term that may impact the delivery of our Strategy. To provide a view over the medium to longer term, a horizon scanning approach is required. Our approach to undertaking horizon scanning is based on conducting both reviews of external thought leadership and also through obtaining the views of key business stakeholders on emerging risks. The horizon scanning exercise is updated at least semi-annually to ensure that the horizon is consistently scanned for developments and changes that may impact the business. The Group Risk and Compliance Committee is asked to review and discuss the horizon risks and to form a view as to whether any of these should be considered in the Principal Risk process or additional actions should be factored into strategic planning for the business. 58 Currys plc Annual Report & Accounts 2021/22 1 Supply Chain Resilience Risk owner: Chief Commercial Officer Risk category: Strategic Risk movement: Link to strategy Considered in the Viability statement: [No] What is the risk? Exposure to disruption to our supply chain that could impede our ability to provide Amazing Technology to our customers and impact our customer satisfaction, profitability, cash flow and market share. What is the impact? • Investments by suppliers scaled down • Pricing and stock availability terms could worsen, leading to deceasing sales/reduced margin • Reduced revenue and profitability • Deteriorating cash flow • Reduced market share How we manage it • Ensuring alignment of key suppliers to future strategy; “Project Board Meetings” with strategic suppliers’ management • Continuing to leverage the scale of operations to strengthen relationships with key suppliers and maintain a good supply of scarce products • Working with suppliers to ensure availability of products through Key Supplier Group engagement program • Ethical supply chain due diligence over our supplier base • Control structures to ensure appropriate Supplier Relationship Management for GFR, GNFR and OEM Changes since last report The scoring has remained stable over 2021/22. 2 Business Transformation Risk owner: Chief Information Officer Risk category: Strategic Risk movement: Link to strategy Considered in the Viability statement: [No] What is the risk? Failure to respond with a business model that enables the business to compete against a broad range of competitors on service, price and/or product range. Failure to optimise Digital opportunities. Failure to respond to changes in consumer preferences and behaviours. What is the impact? • Reduced revenue and profitability • Deteriorating cash flow • Reduced market share How we manage it • Continued strengthening of digital expertise as part of omni channel capability • Transformation Programme office established and delivering key strategic objectives • Development of customer credit propositions • Development of omnichannel capabilities • Enhancement of data analytics capabilities • Robust portfolio governance Changes since last report This risk has increased over 2021/22. There are a number of critical projects to deliver in support of the business strategy. 3 Non-compliance with Financial Conduct Authority (‘FCA’) and other financial services regulation Risk owner: Chief Commercial Officer Risk category: Regulatory Risk movement: Link to strategy Considered in the Viability statement: [Yes] What is the risk? Failure to manage the business of the Group in compliance with FCA regulation and other financial services regulation to which the Group is subject in a number of areas including the mobile insurance operations and consumer credit activities of Currys Retail Limited. What is the impact? • Enforcement action by the regulator • Loss of authorisation and inability to trade regulated products. • Reputational damage • Financial penalties • Reduced revenues and profitability • Deteriorating cash flow • Customer compensation How we manage it • Board oversight and risk management structures monitor compliance and ensure that the Company’s culture puts good customer outcomes first • Senior Manager and Certification Regime and if required CBI/other regulators certification implemented. • Regulatory Compliance Committee, Product Governance and other internal governance structures • Control structures to ensure appropriate compliance • Compliance monitoring and internal audit review of the operation and effectiveness of compliance standards and controls • Recruitment, remuneration and training competency programmes, • Conduct risk and control framework, including defined minimum control standards Changes since last report This risk has remained stable over 2021/22. Principal risks and uncertainties continued NOTE: RISK MOVEMENT, LINK TO STRATEGY, VIABILITY ALL TBC. 59 Governance Financial Statements Investor information Strategic Report 4 Data Protection Risk owner: Chief Information Officer Risk category: Regulatory Risk movement: Link to strategy Considered in the Viability statement: [Yes] What is the risk? Major loss of customer, colleague or business sensitive data. Adequacy of internal systems, policy, procedures and processes to comply with the requirements of EU General Data Protection Regulation (‘GDPR’). What is the impact? • Reputational damage • Financial penalties • Reduced revenue and profitability • Deteriorating cash flow • Loss of competitive advantage • Customer compensation How we manage it • The operation of a Data Management Function to ensure compliance with GDPR compliant operational processes and controls • The operation of a Data Protection Office to ensure appropriate governance and oversight on the Group’s data protection activities • Control activities operate over management of customer and employee data in accordance with the Group’s data protection policy and processes • Investment in information security safeguards and IT security controls and monitoring Changes since last report The risk has reduced over 2021/22 due to increased levels of assurance over the strength of the data protection control environment. 5 IT systems and infrastructure Risk owner: Chief Information Officer Risk category: Technology Risk movement: Link to strategy Considered in the Viability statement: [No] What is the risk? A key system becomes unavailable for a period of time. What is the impact? • Reduced revenue and profitability • Deteriorating cash flow • Loss of competitive advantage • Restricted growth and adaptability • Reputational damage How we manage it • Ongoing IT transformation to align IT infrastructure to future strategy • PEAK planning and preparation to ensure system stability and availability over high-demand periods • Individual system recovery plans in place in the event of failure which are tested in line with an annual plan, with full recovery infrastructure available for critical systems • Long-term partnerships with ‘tier 1’ application and infrastructure providers established • Strengthening of Technology leadership team • A mature IT Service Design & Transition process controls and manages the transition of new and changed services into production Changes since last report This risk has remained stable over 2021/22. Risk movement Increased Stable Decreased Link to strategy Colleages Omnichannel Customers for life NOTE: RISK MOVEMENT, LINK TO STRATEGY, VIABILITY ALL TBC. 60 Currys plc Annual Report & Accounts 2021/22 6 Information security Risk owner: Chief Information Officer Risk category: Operational Risk movement: Link to strategy Considered in the Viability statement: [Yes] What is the risk? Inadequate governance and control around information security could result in an information security breach compromising the confidentiality, integrity and / or availability of customer, colleague or supplier data. What is the impact? • Reputational damage • Financial penalties • Reduced revenue and profitability • Deteriorating cash flow • Customer compensation • Loss of competitive advantage How we manage it • Significant investment in information security safeguards, IT security controls, monitoring, in-house expertise and resources as part of a managed information security improvement plan • Information security policy and standards defined and communicated • Information Security and Data Protection Committee and Technology Risk Forum set up with responsibility for oversight, co-ordination and monitoring of information security policy and risk • Infosec training and awareness programmes for employees • Audit programme over key suppliers’ information security standards • Introduction of enhanced security tooling and operations • Ongoing programme of penetration testing • Future Security Operations Centre implemented Changes since last report This risk has remained stable over 2021/22. 7 Health and Safety Risk owner: Chief Operating Officer Risk category: Operational Risk movement: Link to strategy Considered in the Viability statement: [Yes] What is the risk? Failure to prevent injury or loss of life to customers, colleagues, contractors, franchisee partners, agency staff and the public which may have serious financial and reputational consequences. What is the impact? • Employee/customer illness, injury or loss of life • Reputational damage • Financial penalties • Legal action • Ongoing repercussions of Covid-19 How we manage it • Implementation of Covid-19 controls to protect colleagues in the workplace and customers in the retail estate, including continuous monitoring of changing government regulation in all jurisdictions • Group Health and Safety strategy • Comprehensive Health and Safety policies and standards supporting continued improvement • Health and Safety governance committee • Operational Health and Safety teams located across business units • Risk assessment programme covering retail, support centres, distribution and home services • Incident reporting tool and process • Health and Safety training and development framework • Health and Safety inspection programme • Audit programme including factory audits for own brand products and third-party supply chains Changes since last report This risk has decreased over 2021/22, largely attributable to the suppression of Covid-19. Principal risks and uncertainties continued NOTE: RISK MOVEMENT, LINK TO STRATEGY, VIABILITY ALL TBC. 61 Governance Financial Statements Investor information Strategic Report Risk movement Increased Stable Decreased Link to strategy Colleages Omnichannel Customers for life 8 Business Continuity Risk owner: Chief Information Officer Risk category: Operational Risk movement: Link to strategy Considered in the Viability statement: [No] What is the risk? A major incident impacts the Group’s ability to trade and business continuity plans are not effective, resulting in an inadequate incident response. What is the impact? • Reduced revenue and profitability • Deteriorating cash flow • Reputational damage • Loss of competitive advantage How we manage it • Business continuity and crisis management plans in place and tested for key business locations • Enablement of home working for office-based and contact centre colleagues • Disaster recovery plans in place and tested for key IT systems and data centres • Cross functional Crisis team appointed to manage response to significant events • Major risks insured • Group Business Continuity strategy Changes since last report This risk has remained unchanged over 2021/22. 9 Tax liabilities Risk owner: Chief Financial Officer Risk category: Financial Risk movement: Link to strategy Considered in the Viability statement: [Yes] What is the risk? Crystallisation of potential tax exposures resulting from legacy corporate transactions, employee and sales taxes arising from periodic tax audits and investigations across the various jurisdictions in which the Group operates. What is the impact? • Financial penalties • Reduced cash flow • Reputational damage How we manage it • Board and internal committee oversight actively monitors tax strategy implementation • Appropriate engagement of third-party specialists to provide independent advice where deemed appropriate • The Group remains committed to achieving a resolution with HMRC in relation to open tax enquiries Changes since last report The Net Risk remains unchanged, but the relative likelihood & impact assessment has changed over 2021/22. 10 Product Safety Risk owner: Chief Operating Officer Risk category: Operational Risk movement: Link to strategy Considered in the Viability statement: [No] What is the risk? Unsuitable procedures and due diligence regarding product safety, particularly in relation to OEM sourced product, may result in poor quality or unsafe products provided to customers which pose risk to customer health and safety. What is the impact? • Financial penalties • Reduced cash flow • Reputational damage How we manage it • Factory Audits conducted over OEM suppliers • Technical Evaluation of OEM products prior to production • Product inspection of OEM products prior to shipment • Monitoring of reported incidents • Safety Governance reviews conducted by internal by Technical and Business Standards teams • Establish protocols and procedures to manage product recalls Changes since last report This risk remains unchanged over 2021/22. NOTE: RISK MOVEMENT, LINK TO STRATEGY, VIABILITY ALL TBC. 62 Currys plc Annual Report & Accounts 2021/22 Principal risks and uncertainties continued 11 Our commitment to Sustainability Risk owner: Chief People, Communications & Sustainability Officer Risk category: Operational Risk movement: Link to strategy Considered in the Viability statement: [No] What is the risk? Our commitment to sustainability and being a good corporate citizen is either not delivered or not adequately communicated to or recognised by customers and investors. What is the impact? • Reduced cash flow as customers shop elsewhere • Reputational damage • Loss of competitive advantage How we manage it • Roadmap to Net Zero by 2040 • Commitment to EV100 • Oversight from ESG Committee, ExCo and the Board • Group ESG strategy regularly reviewed • Maintenance of a brand tracker • Commitment to TCFD ahead of mandatory compliance • Independent reviews on environmental practices e.g. CDP Changes since last report This risk has decreased over 2021/22 reflecting the progress made advancing our ESG initiatives. 12 People Risk owner: Chief People, Communications & Sustainability Officer Risk category: People Risk movement: Link to strategy Considered in the Viability statement: [No] What is the risk? Not having the right workforce capacity, capability, and colleague commitment necessary to deliver on our strategy. What is the impact? • Reduced revenue and profitability • Failure to achieve strategic objectives without strong leadership and capable and committed colleagues How we manage it • Strengthening leadership capability and succession • Increasing colleague capability and engagement to deliver against customer promise • Approach for remuneration and incentives that supports a high- performance culture, reinforces the right behaviours aligned to our values and supports selling responsibility to customers • Frequent Pulse Engagement surveys • Perform and Transform Forum Changes since last report This risk remains unchanged over 2021/22. Risk movement Increased Stable Decreased Link to strategy Colleages Omnichannel Customers for life NOTE: RISK MOVEMENT, LINK TO STRATEGY, VIABILITY ALL TBC. 63 Governance Financial Statements Investor information Strategic Report Going concern and viability statement Going Concern For further information on Going Concern, see note 1 to the financial stements on page XX. FURTHER INFORMATION Going concern A review of the Group’s business activities, together with the factors likely to affect its future development, performance, and position, are set out within this Strategic Report, including the risk management section. The financial position of the Group, its cash flows, liquidity position and borrowing facilities are shown in the balance sheet, cash flow statement and accompanying notes to the Annual Report and Accounts. The directors have outlined the assessment approach for going concern in the accounting policy disclosure in note 1 of the consolidated financial statements. Following that review the directors have concluded that the going concern basis remains appropriate. Viability statement In accordance with the UK Corporate Governance Code, the directors have assessed the viability of the Group over a period longer than the 12 months covered by the 'Going Concern' provision above. The directors, in making the assessment that three years was appropriate, considered the current financial and operational positions of the Group, the potential impact of the risks and uncertainties as outlined on pages [x] to [x] of the Strategic Report and the uncertainty regarding the recovery from the Covid-19 pandemic, the impact from inflation exacerbated by the conflict in Eastern Europe plus the further mitigating actions available to the Board. The Board concluded that a period of three years was appropriate for this assessment as this period is covered by the Group’s strategic planning process, which is updated annually, and reflects the period where there is greater certainty of cash flows associated with the Group’s major revenue streams. The strategic plan considers the forecast revenue, EBITDA, working capital, cash flows and funding requirements on a business by business basis, which are assessed in aggregate with reference to the available borrowing facilities to the Group over the assessment period including seasonal cash flow and borrowing requirements on a monthly basis and the financial covenants to which those facilities need to comply. The model assessed by the directors has been derived from the Board-approved annual Group budget for 2022/23, and Board- approved strategic plan for the remaining two year period. These forecasts have been subject to robust stress-testing, modelling the impact of a combination of severe but plausible adverse scenarios based on those principal risks facing the Group, including specific consideration of a range of impacts that could arise from the continued Covid-19 pandemic and the impact from inflation exacerbated by the conflict in Eastern Europe. These scenarios included a downside risk to sales across the group to reflect the risk caused by the current macroeconomic environment with rising energy costs, interst rates, and inflation that could place additional pressure on consumer spending as well as the supply chain risks associated with the Covid-19 pandemic and the conflict in Eastern Europe. Going concern is the basis of preparation of the financial statements that assumes an entity will remain in operation for a period of at least 12 months from the date of approval of the financial statements. The viability statement takes account of the company’s current position and principal risks, stating whether there is a reasonable expectation that the company will be able to continue in operation and meet its liabilities as they fall due over a longer term than the going concern period. As part of this analysis, mitigating actions within the Group’s control have also been considered. These forecast cash flows indicate that there remains sufficient headroom in the viability period for the Group to operate within the committed facilities and to comply with all relevant banking covenants. As well as focusing on the potential downside to sales caused by the current macroeconomic environment, these scenarios also included other principal risks such as regulation or information security incidents and reduced forecast profitability and cash flow as a result in a significant change in consumer behaviour. The model assumes no further funding facilities are required over and above those currently committed to the Group as disclosed in note 18 to the Annual Report and Accounts. Based on the results of this analysis, the directors have an expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the three year period of their assessment. In doing so, it is recognised that such future assessments are subject to a level of uncertainty and as such future outcomes cannot be guaranteed or predicted with certainty. 64 Currys plc Annual Report & Accounts 2021/22 £116m £156m £[186]m 2021/22 2020/21 2019/20 £(140)m £33m £[128]m 2021/22 2020/21 2019/20 6.70p 10.70p X.XXp 2021/22 2020/21 2019/20 (13.90)p 0.00p X.XXp 2021/22 2020/21 2019/20 2% 14% (3)% 2021/22 2020/21 2019/20 £10,190m £10,344m £10,144m 2021/22 2020/21 2019/20 £109m £438m £78m 2021/22 2020/21 2019/20 Key performance indicators Financial What we measure and why its key Like-for-like (LFL) revenue growth is the revenue growth of the business using a constant currency, adjusted for new and closed stores and other changes in business. The metric enables us to measure the underlying trading performance of the Group on a consistent year-on-year basis. Performance in 2021/22 Like-for-like revenue decline due to the expected decline in mobile revenue within UK & Ireland and prior year benefitting from particularly strong performance during lockdown periods. What we measure and why its key Sustainable growth of profit before tax and adjusting items represents a clear measure of performance against our strategic priorities and an indication of how we create long term value for all stakeholders. Performance in 2021/22 On an adjusted and statutory basis, profit before tax increased during the year due to sales mix and improved cost control. What we measure and why its key Adjusted Basic EPS represents the profit after tax, but before adjusting items, attributable to each share after taking into account the change in number of shares in issue from year to year. The level of growth provides a clear measure of the financial health of the Group and its ability to deliver returns to shareholders each year. Performance in 2021/22 Continued growth in adjusted basic EPS driven by increased profit before tax combined with a stable tax rate and reduced share count during the year. What we measure and why its key Revenue represents total revenue generated by the Group with sustainable growth being an important measure of our brands appeal and competitive position. Performance in 2021/22 Group revenue declined (2)% on a reported basis due to the like-for-like decline and closure of the Carphone Warehouse Ireland business at the end of the prior year. What we measure and why its key Free cash flow represents available cash after operational cash outflows, cash tax and interest paid and capital investment but before pension contributions. It is a measure of the Groups ability to both generate cash and efficiently manage working capital such that it optimises cash resources available for the Group to invest in its future growth and to generate shareholder return. Performance in 2021/22 Free cash flow declined as in line adjusted EBITDAR and a reduction in cash lease payments were more than offset by a working capital outflow to secure future supply. The prior year comparative benefited from a large working capital inflows as the mobile network receivable unwound. LFL Revenue growth (1) (3)% Adjusted Profit Before Tax (1) £186m Adjusted Earnings Per Share (1) [x.xx]p Statutory Profit/Loss Before Tax £126m Statutory Earnings/Loss Per Share [0.00]p Revenue £10,144m Free cash flow (1),(2) £72m Our ten Key Performance Indicators (KPIs) comprise a balanced set of financial and non-financial metrics that are consistent with our strategy and vision and enable management to evaluate the Groups strategic performance. Statutory equivalents of our KPIs are provided where relevant. (1) Alternative Performance Measure. Definitions, purpose and reconciliations to the closest statutory equivalent for our Alternative Performance Measures are provided within the glossary and definitions on pages [x to x]. (2) The Directors consider free cash flow to be a useful measure as, unlike statutory equivalents, it is a good indicator of cash generated from continuing operations which is available to fund future growth or be distributed to shareholders. Link to strategy Colleages Customers for life Omnichannel Remuneration 65 Governance Financial Statements Investor information Strategic Report +64 +65 +66 2021/22 2020/21 2019/20 103k 104k 103k 2021/22 2020/21 2019/20 +62 +68 +77 2021/22 2020/21 2019/20 26.5% 24.7% 25.6% 2021/22 2020/21 2019/20 26.0% 26.8% 25.9% 2021/22 2020/21 2019/20 36,863 35,321 XXX 2021/22 2020/21 2019/20 What we measure and why We calculate the reduction in Scope 1 and 2 greenhouse gas emissions, in line with the standards of the GHG protocol and using the methodology set out in Defra’s Environmental Reporting Guidelines, by reference to the Groups total emissions in financial year 2019/20 as the clearest measure of our progress to achieving net zero emissions by 2040. Performance in 2021/22 [xx.] Changes to KPIs Net Zero by 2040 (scope 1 & 2 tonnes CO 2 e) and tonnes of electrical reuse and recycling have been added as sustainability is a central part of our vision. Wehave also pivoted to LFL Revenue growth from our previous LFL Electricals Revenue growth KPI following consolidation of the previously disclosed UK & Ireland Electricals and UK & Ireland Mobile reportable segments as mobile is no longer reported separately. Non-Financial What we measure and why its key Market share is the clearest indicator that the proposition we are delivering to customers is more appealing than the competition. Market share is defined as the Group's product sales relative to total consumer sales of technology products in each market. Performance in 2021/22 In the UK we gained 0.9% of market share as stores remained open. Compared to two years ago we have gained 2ppts share in both store and online markets, but overall share declined as the market shifts online. Increased competitive pressure on price and availability across the Nordics meant that sales underperformed the market but we remain market leader in all regions. What we measure and why its key Customer satisfaction a key indicator how we’re performing. NPS is the % of Promoters minus Critics answering the question ‘How likely are you to recommend Currys.com to a friend or colleague?’ Performance in 2021/22 NPS improved 2.3 points in UK & Ireland which more than offset the marginal decline in Nordics and Greece. What we measure and why its key Tonnes of e-waste collected across our Group for reuse or recycling is a key indicator of our progress in creating circular business models and reducing the impact that used electronics have on the environment. It is the sum of all electronics received via trade-in and recycling services from customers. Performance in 2021/22 Tonnes of electricals reused and recycling was declined marginally year on year. Approval of Strategic Report This Strategic Report was approved by the Board and signed on its behalf by: Alex Baldock Group Chief Executive 6 July 2022 What we measure and why its key Our capable and committed colleagues are our greatest advantage. Keeping colleagues engaged drives better experiences for customers. Our Employee Satisfaction measure is measured through our colleague’s response to the question ‘How happy are you working at Currys?’ and forms just one part of our employee engagement survey that enables our colleagues to provide honest and open feedback. Performance in 2021/22 Employee engagement increased 9 points as investment in training, wellbeing and reward drove a significant increase in the number of employees who are happy working for Currys in UK & Ireland, Nordics and Greece. Currys market share 25.6% Net Promoter Score (“NPS”) +66 Colleague Engagement +77 Nordics market share 25.9% Net Zero by 2040 (scope 1 & 2 tonnes CO 2 e) [26.8]% Tonnes of electrical reuse and recycling 103k 66 Currys plc Annual Report & Accounts 2021/22 Performance review 2021/22 Group sales were +2% higher than last year, as +12% growth in our Electricals business was offset by the anticipated decline in Mobile sales. Adjusted EBIT grew +22% as UK & Ireland Electricals and Nordics grew profits, offset by a small decline in Greece and large operating losses in UK & Ireland Mobile. Segmental free cash flow more than tripled to £497m, because of large working capital inflow in UK & Ireland Mobile more than offsetting the operating losses and restructuring costs. Total free cash flow was £438m which after pension and other payments generated cash flow of £373m, improving the year end position to net cash of £169m. Income statement 2021/22 £m 2020/21 £m Reported % change Currency neutral % change Revenue 10,344 10,170 2% 1% Adjusted EBITDA 598 556 8% 7% Adjusted EBITDA margin 5.8% 5.4% 40 bps 40 bps Depreciation on right-of-use assets (200) (217) Depreciation on other assets (79) (81) Amortisation (57) (44) Adjusted EBIT 262 214 22% 22% Adjusted EBIT margin 2.5% 2.1% 40 bps Interest on right-of-use assets (77) (80) Finance income 6 10 Adjusted finance costs (35) (28) Adjusted PBT 156 116 34% 34% Adjusted PBT margin 1.5% 1.1% 40 bps 40 bps Adjusted tax (33) (38) Adjusted Profit after tax 123 78 Adjusted EPS 10.7p 6.7p Statutory reconciliation Adjusting items to EBITDA (89) (217) Statutory EBITDA 509 339 Adjusting items to depreciation and amortisation (26) (25) Statutory EBIT 147 (28) 625% 603% EBIT Margin 1.4% (0.3)% 170 bps 170 bps Adjusting items to finance costs (8) (14) Statutory PBT 33 (140) Adjusting items to tax – 17 Discontinued operations 12 (2) Profit/(loss) after tax 12 (163) EPS – total 1.0p (14.1)p 67 Governance Financial Statements Investor information Strategic Report Cash flow 2021/22 £m 2020/21 £m Reported % change Currency neutral % change Adjusted EBITDAR 611 596 3% 5% Adjusted EBITDAR margin 5.9% 5.8% 10 bps 30 bps Cash payments of leasing costs, debt and interest (1) (288) (324) Other non-cash items in EBIT 15 27 Operating cash flow (1) 338 299 13% 18% Operating cash flow margin 3.3% 2.9% 40 bps Capital expenditure (122) (191) 36% Adjusting items to cash flow (1) (173) (94) (84)% Free cash flow before working capital 43 14 Working capital 454 141 Segmental free cash flow 497 155 221% 232% Cash tax paid (35) (20) Cash interest paid (24) (26) Free cash flow 438 109 302% 324% Dividend – (78) Purchase of own shares (13) (12) Pension (47) (46) Other (5) 5 Movement in net cash/(debt) 373 (22) Net cash/(debt) 169 (204) (1) Cash payments of leasing costs, debt and interest have been revised to exclude non-trading stores, which is now included within adjusting items to cash flow. As such, results for the year ended 2 May 2020 have been restated. The non-trading stores relate to the remaining closed stores under the Currys PCWorld 3-in-1 and Carphone Warehouse programme announced in 2015/16 and closed standalone UK Carphone Warehouse stores as announced on 17th March 2020. Online Share of Business 2021/22 2020/21 YoY (%pts) UK & Ireland Electricals 69% 35% +34% International 28% 18% +10% – Nordics 29% 19% +10% – Greece 21% 8% +13% Electricals 49% 27% +22% 68 Currys plc Annual Report & Accounts 2021/22 Performance review 2021/22 continued Income statement 2021/22 £m 2020/21 £m Reported % change Currency neutral % change Revenue 4,921 4,538 8% 8% Adjusted EBITDA 393 344 14% 14% Adjusted EBITDA margin 8.0% 7.6% 40 bps Depreciation on right-of-use assets (104) (111) Depreciation on other assets (42) (4 4) Amortisation (38) (25) Adjusted EBIT 209 164 27% 27% Adjusted EBIT margin 4.2% 3.6% 60 bps Adjusting items to EBIT (131) (4 5) Statutory EBIT 78 119 (34)% (34)% Statutory EBIT margin 1.6% 2.6% (100) bps Cash flow Adjusted EBITDAR 401 368 9% Adjusted EBITDAR margin 8.1% 8.1% –bps Cash payments of leasing costs, debt and interest (1) (155) (170) Other non-cash items in EBIT – 12 Operating cash flow (1) 246 210 17% 22% Operating cash flow margin 5.0% 4.6% 40 bps Capital expenditure (59) (106) 44% Adjusting items to cash flow (1) (63) (4 6) (37)% Free cash flow before working capital 124 58 Working capital 3 34 Segmental free cash flow 127 92 38% 36% (1) Cash payments of leasing costs, debt and interest have been revised to exclude non-trading stores, which is now included within adjusting items to cash flow. As such, results for the year ended 2 May 2020 have been restated. The non-trading stores relate to the remaining closed stores under the Currys PCWorld 3-in-1 and Carphone Warehouse programme announced in 2015/16. UK and Ireland Electricals Etiam purus ex, tempus in tellus nec, lobortis pulvinar turpis. Nam ut ex sed arcu laoreet congue. Mauris augue urna, aliquam suscipit elementum at, mollis at urna. Donec pharetra quam at tempus varius. Fusce scelerisque, nisl nec dictum fringilla. Subhead Level 1 Aenean malesuada blandit purus in porta. Nullam blandit elit pulvinar felis condimentum, quis aliquam arcu tempor. Morbi quis erat eu lectus fermentum mollis. Vestibulum eu augue sodales, maximus arcu in, commodo ligula. Curabitur velit elit, tincidunt sit amet finibus eu, semper facilisis risus. Etiam vel dolor nec risus vulputate vestibulum. In id auctor augue. Nulla rhoncus dolor ut metus egestas feugiat. Etiam tincidunt mi urna, sit amet gravida erat pellentesque vitae. Aliquam et condimentum urna. Subhead level 2 Mauris tempor odio ac facilisis convallis. Mauris interdum lectus nulla, a elementum nisi ultrices id. Integer leo erat, vestibulum ut congue nec, sagittis ac odio. In placerat, eros non rutrum facilisis, lectus metus commodo odio, quis congue odio nunc id felis. Nunc vestibulum odio ut erat tincidunt placerat. Curabitur tellus mi, luctus sit amet iaculis in, dapibus et nulla. Etiam laoreet mollis nibh eu accumsan. Proin vitae leo nec ante sollicitudin interdum. Etiam magna dolor, rutrum nec tempus non, accumsan vitae. Maecenas volutpat bibendum mi, ac posuere eros ornare sed. Sed hendrerit vehicula turpis eget commodo. Proin odio purus, dignissim sed condimentum condimentum, scelerisque ut sem. Nullam eu felis imperdiet velit lacinia bibendum eu sed tellus. Ut nec efficitur eros. Subhead Level 1 Curabitur nibh urna, maximus vitae fermentum ut, aliquam varius sapien. Ut auctor elit et gravida iaculis. Phasellus porttitor nisi nec massa mattis ullamcorper. Integer cursus porttitor urna, Etiam vel turpis nec elit elementum tristique. Ut lacinia justo non odio rhoncus, in ullamcorper metus varius. Phasellus non hendrerit est. Duis sed odio pulvinar, aliquet turpis sed, dictum sapien. TABLE CONTENT TO BE SUPPLIED 69 Governance Financial Statements Investor information Strategic Report Subhead level 2 Mauris tempor odio ac facilisis convallis. Mauris interdum lectus nulla, a elementum nisi ultrices id. Integer leo erat, vestibulum ut congue nec, sagittis ac odio. In placerat, eros non rutrum facilisis, lectus metus commodo odio, quis congue odio nunc id felis. Nunc vestibulum odio ut erat tincidunt placerat. Curabitur tellus mi, luctus sit amet iaculis in, dapibus et nulla. Etiam laoreet mollis nibh eu accumsan. Proin vitae leo nec ante sollicitudin interdum. Etiam magna dolor, rutrum nec tempus non, accumsan vitae. Maecenas volutpat bibendum mi, ac posuere eros ornare sed. Sed hendrerit vehicula turpis eget commodo. Proin odio purus, dignissim sed condimentum condimentum, scelerisque ut sem. Subhead Level 1 Mauris tempor odio ac facilisis convallis. Mauris interdum lectus nulla, a elementum nisi ultrices id. Integer leo erat, vestibulum ut congue nec, sagittis ac odio. In placerat, eros non rutrum facilisis, lectus metus commodo odio, quis congue odio nunc id felis. Nunc vestibulum odio ut erat tincidunt placerat. Curabitur tellus mi, luctus sit amet iaculis in, dapibus et nulla. Etiam laoreet mollis nibh eu accumsan. Proin vitae leo nec ante sollicitudin interdum. Etiam magna dolor, rutrum nec tempus non, accumsan vitae. Maecenas volutpat bibendum mi, ac posuere eros ornare sed. Sed hendrerit vehicula turpis eget commodo. Proin odio purus, dignissim sed condimentum condimentum, scelerisque ut sem. 2020/21 2019/20 P&L Cash P&L Cash Acquisition/disposal related items (14) – (14) – Strategic change programmes (21) (51) (13) (41) Data incident costs – (1) – (5) Impairment losses and onerous contracts (100) (16) (18) – Regulatory (1) – – – Other 5 5 – – Total (131) (63) (4 5) (46) Maecenas volutpat bibendum mi, ac posuere eros ornare sed. Sed hendrerit vehicula turpis eget commodo. Proin odio purus, dignissim sed condimentum condimentum, scelerisque ut sem. Nullam eu felis imperdiet velit lacinia bibendum eu sed tellus. Ut nec efficitur eros. Mauris tempor odio ac facilisis convallis. Mauris interdum lectus nulla, a elementum nisi ultrices id. Integer leo erat, vestibulum ut congue nec, sagittis ac odio. In placerat, eros non rutrum facilisis, lectus metus commodo odio, quis congue odio nunc id felis. Nunc vestibulum odio ut erat tincidunt placerat. Curabitur tellus mi, luctus sit amet iaculis in, dapibus et nulla. Etiam laoreet mollis nibh eu accumsan. Proin vitae leo nec ante sollicitudin interdum. Etiam magna dolor, rutrum nec tempus non, accumsan vitae. Duis sed odio pulvinar, aliquet turpis sed, dictum sapien. 12% CONTENT TO BE SUPPLIED TABLE CONTENT TO BE SUPPLIED 70 Currys plc Annual Report & Accounts 2021/22 Subhead Level 1 Aenean malesuada blandit purus in porta. Nullam blandit elit pulvinar felis condimentum, quis aliquam arcu tempor. Morbi quis erat eu lectus fermentum mollis. Vestibulum eu augue sodales, maximus arcu in, commodo ligula. Curabitur velit elit, tincidunt sit amet finibus eu, semper facilisis risus. Etiam vel dolor nec risus vulputate vestibulum. In id auctor augue. Nulla rhoncus dolor ut metus egestas feugiat. Etiam tincidunt mi urna, sit amet gravida erat pellentesque vitae. Aliquam et condimentum urna. Subhead level 2 Mauris tempor odio ac facilisis convallis. Mauris interdum lectus nulla, a elementum nisi ultrices id. Integer leo erat, vestibulum ut congue nec, sagittis ac odio. In placerat, eros non rutrum facilisis, lectus metus commodo odio, quis congue odio nunc id felis. Nunc vestibulum odio ut erat tincidunt placerat. Curabitur tellus mi, luctus sit amet iaculis in, dapibus et nulla. Etiam laoreet mollis nibh eu accumsan. Proin vitae leo nec ante sollicitudin interdum. Etiam magna dolor, rutrum nec tempus non, accumsan vitae. Maecenas volutpat bibendum mi, ac posuere eros orodio purus, dignissim sed condimentum condimentum, scelerisque ut sem. Nullam eu felis imperdiet velit lacinia bibendum eu sed tellus. Ut nec efficitur eros. Subhead Level 1 Curabitur nibh urna, maximus vitae fermentum ut, aliquam varius sapien. Ut auctor elit et gravida iaculis. Phasellus porttitor nisi nec massa mattis ullamcorper. Integer cursus porttitor urna, tristique. Ut lacinia justo non odio rhoncus, in ullamcorper metus varius. Phasellus non hendrerit est. Duis sed odio pulvinar, aliquet turpis sed, dictum sapien. Income statement 2021/22 £m 2020/21 £m Reported % change Currency neutral % change Revenue 4,186 3,573 17% 15% Adjusted EBITDA 267 240 11% 11% Adjusted EBITDA margin 6.4% 6.7% (30) bps Depreciation on right-of-use assets (77) ( 74) Depreciation on other assets (27) (25) Amortisation (12) (15) Adjusted EBIT 151 126 20% 20% Adjusted EBIT margin 3.6% 3.5% 10 bps Adjusting items to EBIT (12) (11) Statutory EBIT 139 115 21% 23% Statutory EBIT margin 3.3% 3.2% 10 bps Cash flow Adjusted EBITDAR 271 248 9% Adjusted EBITDAR margin 6.5% 6.9% (40) b p s Cash payments of leasing costs, debt and interest (100) (91) Other non-cash items in EBIT 5 5 Operating cash flow 176 162 9% 7% Operating cash flow margin 4.2% 4.5% (30) bps Capital expenditure (52) (63) 17% Adjusting items to cash flow – – – Free cash flow before working capital 124 99 Working capital 64 117 Segmental free cash flow 188 216 (13)% (11)% Nordics [Etiam purus ex, tempus in tellus nec, lobortis pulvinar turpis. Nam ut ex sed arcu laoreet congue. Mauris augue urna, aliquam suscipit elementum at, mollis at urna. Donec pharetra quam at tempus varius. Fusce scelerisque, nisl nec dictum fringilla.] Performance review 2021/22 continued TABLE CONTENT TO BE SUPPLIED 71 Governance Financial Statements Investor information Strategic Report Subhead level 2 Mauris tempor odio ac facilisis convallis. Mauris interdum lectus nulla, a elementum nisi ultrices id. Integer leo erat, vestibulum ut congue nec, sagittis ac odio. In placerat, eros non rutrum facilisis, lectus metus commodo odio, quis congue odio nunc id felis. Nunc vestibulum odio ut erat tincidunt placerat. Curabitur tellus mi, luctus sit amet iaculis in, dapibus et nulla. Etiam laoreet mollis nibh eu accumsan. Proin vitae leo nec ante sollicitudin interdum. Etiam magna dolor, rutrum nec tempus non, accumsan vitae.Maecenas volutpat bibendum mi, ac posuere eros ornare sed. Sed hendrerit vehicula turpis eget commodo. Proin odio purus, dignissim sed condimentum condimentum, scelerisque ut sem. Nullam eu felis imperdiet velit lacinia bibendum eu sed tellus. Ut nec efficitur eros. Subhead Level 1 Nam sit amet tellus nunc. Sed sit amet vehicula erat. Morbi vel orci vehicula, luctus mi vitae, fermentum sapien. Suspendisse nec est et orci consequat blandit eu ac sem. Morbi lobortis enim a tortor dictum blandit. Fusce vel metus nisl. Mauris iaculis convallis vulputate. Maecenas volutpat bibendum mi, ac posuere eros ornare sed. Sed hendrerit vehicula turpis eget commodo. Proin odio purus, dignissim sed condimentum condimentum, scelerisque ut sem. Nullam eu felis imperdiet velit lacinia bibendum eu sed tellus. Ut nec efficitur eros. Donec volutpat lectus vitae massa vehicula bibendum. Maecenas condimentum magna nec arcu ullamcorper maximus. Pellentesque habitant morbi tristique senectus et netus et malesuada fames ac turpis egestas. Subhead level 2 Mauris tempor odio ac facilisis convallis. Mauris interdum lectus nulla, a elementum nisi ultrices id. Integer leo erat, vestibulum ut congue nec, sagittis ac odio. In placerat, eros non rutrum facilisis, lectus metus commodo odio, quis congue odio nunc id felis. Nunc vestibulum odio ut erat tincidunt placerat. Curabitur tellus mi, luctus sit amet iaculis in, dapibus et nulla. Etiam laoreet mollis nibh eu accumsan. Proin vitae leo nec ante sollicitudin interdum. Etiam magna dolor, rutrum nec tempus non, accumsan vitae. Duis sed odio pulvinar, aliquet turpis sed, dictum sapien. 12% Duis sed odio pulvinar, aliquet turpis sed, dictum sapien. 12% CONTENT TO BE SUPPLIED 72 Currys plc Annual Report & Accounts 2021/22 6 75% 2 25% 6 75% 2 25% 1 12.5% 1 12.5% 6 75% 4 66.7% 2 33.3% Compliance with the UK Corporate Governance Code 2018 The Board confirms that throughout the year ended 30 April 2022 and as at the date of this report, the Company applied the principles of, and was fully compliant with the provisions of the Code. A copy of the Code is available from the website of the Financial Reporting Council www.frc.org.uk Further information on how the Company has implemented each of the Code provisions matters can be found as follows: Board leadership and company purpose Page [xx] Division of responsibilities Page [xx] Composition, succession and evaluation Page [xx] Audit, risk and internal control Page [xx] Remuneration Page [xx] Governance at a Glance Board attendance Directors Meetings attended Directors Meetings attended Lord Livingston of Parkhead Eileen Burbidge MBE Tony DeNunzio Fiona McBain (2) Alex Baldock Gerry Murphy Bruce Marsh (1) Nigel Paterson Andrea Gisle Joosen (1) Bruce has attended all Board meetings since his appointment on 12 July 2021. He attended a Board meeting as an observer prior to his appointment. (2) Fiona was absent from two meetings due to illness. Female Male Executive Non-Executive 0–3 years 3–6 years Over 6 years Dual nationality UK/US Swedish UK Board composition Board diversity by gender Balance of the Board Non-executive director tenure Director Nationality 73 Governance Financial Statements Investor information Strategic Report Board highlights from 2021/22 • approved Three-Year Plan • reviewed the strategic plans for Credit, Mobile and Services • considered partial listing of the Nordics business and decided not to proceed • appointed a new Chair of the Board from September 2022 • UK&I Commercial Trading deep dive • approved the decisions to outsource logistics in UK and establish a new distribution centre in Nordics • received customer experience updates • received update on colleague listening • approved the 2023-25 People Plan and priorities • visited the Company’s distribution centre in Newark including a site tour and meetiing several colleagues from Supply Chain and Services Operations • approved the approach to ESG strategy • completed an externally facilitated Board evaluation process • completed a share buy-back and approved the payment of a dividend to shareholders Board skills and experience Ian Dyson Chair Ian will join the Board as a non-executive director on 1 September 2022. He will become Chair of the Board and Nominations Committee on 8 September 2022. Ian has more than 20 years of experience in the public market arena and has held both executive and non-executive directorships at FTSE 100 and FTSE 250 companies. He was group finance and operations director at Marks & Spencer Group plc from 2005 to 2021 before becoming chief executive of Punch Taverns plc in 2010. Before that, Ian was group finance director of Rank Group Plc and was formerly non-executive director and chair of the audit committees of Misys Plc, Flutter Entertainment plc (formerly Paddy Power Betfair) and SSP Group plc. Directors Bruce Marsh Alex Baldock Gerry Murphy Fiona McBain Andrea Gisle Joosen Tony DeNunzio Eileen Burbidge Ian Livingston General retailing experience Online retailing experience Strategy (development and implementation) Accounting, finance and audit Corporate transactions Risk management Governance Regulatory Human Resources Management IT and technology Marketing/advertising Consumer Financial Services Current executive leadership International Gender Ethnic CONTENT TO BE CONFIRMED- CD AWAITING IMAGE 74 Currys plc Annual Report & Accounts 2021/22 Board of Directors CC C Lord Livingston of Parkhead (57) Chair of the Board Tony DeNunzio CBE (62) Deputy Chair and Senior Independent Director Alex Baldock (51) Group Chief Executive Bruce Marsh (54) Group Chief Financial Officer Andrea Gisle Joosen (58) Independent Non-Executive Director Eileen Burbidge MBE (51) Independent Non-Executive Director Fiona McBain (61) Independent Non-Executive Director Gerry Murphy (69) Independent Non-Executive Director Nigel Paterson (55) General Counsel and Company Secretary Appointed December 2015 (as Deputy Chair and Non-Executive Director) April 2017 (as Chair of the Board and Chair of the Nominations Committee) December 2015 (as Senior Independent Director and Non-Executive Director) April 2017 (as Deputy Chair, Senior Independent Director and Chair of the Remuneration Committee) April 2018 July 2021 August 2014 (having served on the Dixons Retail board since March 2013) January 2019 March 2017 (as a Non-Executive Director) September 2018 (as Chair of the Audit Committee) April 2014 April 2015 Current external roles Member of the House of Lords, Non-Executive Director of National Grid plc, Non-Executive Director of S&P Global Inc, and Strategic Advisory Board member of Livingbridge. Chairman of the British Retail Consortium, Chairman of Evri UK, Senior Adviser at Kohlberg, Kravis, Roberts & Co L.P. and a Non-Executive Director of PrimaPrix SL. Non-Executive Director of RS Group plc None. Non-Executive Director of Billerud AB, Bilprovningen AB, Nu Company GmbH, and Stadium AB. HM Treasury Special Envoy for Fintech, Tech Ambassador for the Mayor of London’s office, co- founder of Passion Capital in 2011, and a director of several Passion Capital portfolio companies including Monzo Bank Limited. Chair of Scottish Mortgage Investment Trust PLC, Non- Executive Director of Direct Line Insurance Group plc and Monzo Bank Limited. Non-Executive board member of the Department of Health and Social Care. None. Skills and experience Skills: Ian is a chartered accountant with over twenty years’ board level experience. He is an experienced chair, chief financial officer and non-executive director of public listed companies. Ian has a strong track record of successfully growing complex businesses and overseeing transformation programmes. He is a diligent, conscientious Chair and is valued for both his extensive knowledge and experience and his effective leadership of the Board. Experience: Ian was Chairman of Man Group plc from 2016 to 2019, Minister of State for Trade and Investment from 2013 to 2015 and Chief Executive Officer at BT Group plc from 2008 to 2013. Prior to that he was Chief Executive Officer, BT Retail and Group Chief Financial Officer of BT. He was Group Finance Director of Dixons Group plc between 1996 and 2002, having served in a number of roles over more than a decade with the Group. Skills: Tony has extensive experience in the European retail and consumer goods sectors in finance, CEO and chairman roles. Experience: Tony was Non-Executive Chairman of Pets at Home Group Plc from February 2014 to May 2020 and President and Chief Executive Officer of Asda / Walmart UK from 2002 to 2005, having previously served as Chief Financial Officer of Asda PLC. He started his career in the fast-moving consumer goods sector with financial positions in Unilever PLC, L’Oréal and PepsiCo, Inc. He was also previously Non-Executive Director of Alliance Boots GmbH, Chairman of Maxeda Retail Group BV, and Deputy Chairman and Senior Independent Director of MFI Furniture Group plc (now Howden Joinery Group Plc). He was Chairman of the advisory board of Manchester Business School and was awarded a CBE for services to retail in 2005. Skills: Alex has an outstanding track record in leading large, complex consumer-facing businesses. He led Shop Direct through its digital transformation from a catalogue retailer to the UK’s second largest e-commerce pureplay,, delivering four consecutive years of record growth in sales, profits, customer satisfaction and colleague engagement. Before that, he led the successful transformation of Lombard . Alex is particularly valued for his strategic clarity, relentless execution and his ability to inspire individuals around him. Experience: Alex has been Group Chief Executive of Currys since 2018 and was CEO of Shop Direct, now the Very Group (2012-18). Before that, Alex was Managing Director of Lombard (2008-12), and Commercial Director at Barclays. He started his career in strategy and operations consulting with Kalchas and Bain & Company.. Skills: Bruce has a strong track record over many years in retail, and in the successful delivery of large complex business transformations in rapidly changing environments. He has extensive experience in leading high-quality Finance teams, maintaining robust financial controls and improving planning and performance. Experience: Bruce was Finance Director, UK & Ireland, at Tesco plc prior to joining Currys. Before that Bruce was at Kingfisher plc, where he was Managing Director of Kingfisher Future Homes and Group Strategy Director. Previously, Bruce held several senior finance roles at Currys plc. Skills: Andrea has extensive international business experience in a variety of sectors including marketing, brand management, business development and consumer electronics. Experience: Andrea was Chair of Teknikmagasinet AB, a Non-Executive Director of Acast AB, Lighthouse Group, ICA Gruppen AB, James Hardie Industries plc and BillerudKorsnäs AB. She was Chief Executive of Boxer TV Access AB in Sweden and Managing Director (Nordic region) of Panasonic, Chantelle AB and Twentieth Century Fox. Her early career involved several senior marketing roles with Procter & Gamble and Johnson & Johnson. Skills: Eileen has a strong technology background and is a leader in the development of the UK’s increasingly renowned fintech industry. Eileen brings a constructive, challenging, and balanced perspective to the Board including a focus on technology innovation, value creation and an informed perspective on the digital consumer. Experience: Eileen has a university degree in computer science and since beginning her career in telecoms at Verizon Wireless, she has held various roles at Apple, Sun Microsystems, Openwave, PalmSource, Skype and Yahoo!. Eileen was previously a member of the Prime Minister’s Business Advisory Group and chair of Tech Nation, a UK Government-supported technology industry group. Skills: Fiona is a chartered accountant and has over 30 years’ experience in retail financial services, both in the industry and as an auditor. She has an outstanding record of business leadership and is an experienced CEO and chair. Experience: Fiona was Vice-Chair of Save the Children from 2012 to 2019 and Trustee Director of the Humanitarian Leadership Academy from 2015 to 2019. Fiona was Chief Executive Officer of Scottish Friendly Group until December 2016, having joined the company in 1998. She has worked in the finance functions at Prudential plc and Scottish Amicable and earlier in her career, across a number of industry sectors in the UK and then in the US with Arthur Young (now EY). Skills: Gerry has extensive audit and finance experience in consumer business, retail, technology, media and communications sectors. Experience: Gerry was a Non-Executive Director of Capital & Counties Properties PLC from 2015 to 2018 and the Senior Independent Director from 2018 to 2020. Gerry is a former Deloitte LLP partner and was leader of its Professional Practices Group with direct industry experience in consumer business, retail and technology, media and telecommunications. He was a member of the Deloitte Board and Chairman of its audit committee for a number of years and was Chairman of the Audit & Assurance Faculty of the Institute of Chartered Accountants in England and Wales. Skills: Nigel is a solicitor and has extensive legal, risk and governance experience and a strong background in UK and international telecommunications. Experience: Nigel held several senior legal roles at BT Group plc including General Counsel of BT Consumer, Head of Competition & Regulatory law, and Vice President and Chief Counsel for UK and major transactions. Prior to BT, Nigel was engaged as legal counsel at ExxonMobil International Limited. He trained and qualified as a solicitor with Linklaters. * Ian will step down from the Board on 8 September 2022. 75 Governance Financial Statements Investor information Strategic Report Committee Membership Audit Committee Disclosure Committee Nominations Committee Remuneration Committee C Committee Chair C Lord Livingston of Parkhead (57) Chair of the Board Tony DeNunzio CBE (62) Deputy Chair and Senior Independent Director Alex Baldock (51) Group Chief Executive Bruce Marsh (54) Group Chief Financial Officer Andrea Gisle Joosen (58) Independent Non-Executive Director Eileen Burbidge MBE (51) Independent Non-Executive Director Fiona McBain (61) Independent Non-Executive Director Gerry Murphy (69) Independent Non-Executive Director Nigel Paterson (55) General Counsel and Company Secretary Appointed December 2015 (as Deputy Chair and Non-Executive Director) April 2017 (as Chair of the Board and Chair of the Nominations Committee) December 2015 (as Senior Independent Director and Non-Executive Director) April 2017 (as Deputy Chair, Senior Independent Director and Chair of the Remuneration Committee) April 2018 July 2021 August 2014 (having served on the Dixons Retail board since March 2013) January 2019 March 2017 (as a Non-Executive Director) September 2018 (as Chair of the Audit Committee) April 2014 April 2015 Current external roles Member of the House of Lords, Non-Executive Director of National Grid plc, Non-Executive Director of S&P Global Inc, and Strategic Advisory Board member of Livingbridge. Chairman of the British Retail Consortium, Chairman of Evri UK, Senior Adviser at Kohlberg, Kravis, Roberts & Co L.P. and a Non-Executive Director of PrimaPrix SL. Non-Executive Director of RS Group plc None. Non-Executive Director of Billerud AB, Bilprovningen AB, Nu Company GmbH, and Stadium AB. HM Treasury Special Envoy for Fintech, Tech Ambassador for the Mayor of London’s office, co- founder of Passion Capital in 2011, and a director of several Passion Capital portfolio companies including Monzo Bank Limited. Chair of Scottish Mortgage Investment Trust PLC, Non- Executive Director of Direct Line Insurance Group plc and Monzo Bank Limited. Non-Executive board member of the Department of Health and Social Care. None. Skills and experience Skills: Ian is a chartered accountant with over twenty years’ board level experience. He is an experienced chair, chief financial officer and non-executive director of public listed companies. Ian has a strong track record of successfully growing complex businesses and overseeing transformation programmes. He is a diligent, conscientious Chair and is valued for both his extensive knowledge and experience and his effective leadership of the Board. Experience: Ian was Chairman of Man Group plc from 2016 to 2019, Minister of State for Trade and Investment from 2013 to 2015 and Chief Executive Officer at BT Group plc from 2008 to 2013. Prior to that he was Chief Executive Officer, BT Retail and Group Chief Financial Officer of BT. He was Group Finance Director of Dixons Group plc between 1996 and 2002, having served in a number of roles over more than a decade with the Group. Skills: Tony has extensive experience in the European retail and consumer goods sectors in finance, CEO and chairman roles. Experience: Tony was Non-Executive Chairman of Pets at Home Group Plc from February 2014 to May 2020 and President and Chief Executive Officer of Asda / Walmart UK from 2002 to 2005, having previously served as Chief Financial Officer of Asda PLC. He started his career in the fast-moving consumer goods sector with financial positions in Unilever PLC, L’Oréal and PepsiCo, Inc. He was also previously Non-Executive Director of Alliance Boots GmbH, Chairman of Maxeda Retail Group BV, and Deputy Chairman and Senior Independent Director of MFI Furniture Group plc (now Howden Joinery Group Plc). He was Chairman of the advisory board of Manchester Business School and was awarded a CBE for services to retail in 2005. Skills: Alex has an outstanding track record in leading large, complex consumer-facing businesses. He led Shop Direct through its digital transformation from a catalogue retailer to the UK’s second largest e-commerce pureplay,, delivering four consecutive years of record growth in sales, profits, customer satisfaction and colleague engagement. Before that, he led the successful transformation of Lombard . Alex is particularly valued for his strategic clarity, relentless execution and his ability to inspire individuals around him. Experience: Alex has been Group Chief Executive of Currys since 2018 and was CEO of Shop Direct, now the Very Group (2012-18). Before that, Alex was Managing Director of Lombard (2008-12), and Commercial Director at Barclays. He started his career in strategy and operations consulting with Kalchas and Bain & Company.. Skills: Bruce has a strong track record over many years in retail, and in the successful delivery of large complex business transformations in rapidly changing environments. He has extensive experience in leading high-quality Finance teams, maintaining robust financial controls and improving planning and performance. Experience: Bruce was Finance Director, UK & Ireland, at Tesco plc prior to joining Currys. Before that Bruce was at Kingfisher plc, where he was Managing Director of Kingfisher Future Homes and Group Strategy Director. Previously, Bruce held several senior finance roles at Currys plc. Skills: Andrea has extensive international business experience in a variety of sectors including marketing, brand management, business development and consumer electronics. Experience: Andrea was Chair of Teknikmagasinet AB, a Non-Executive Director of Acast AB, Lighthouse Group, ICA Gruppen AB, James Hardie Industries plc and BillerudKorsnäs AB. She was Chief Executive of Boxer TV Access AB in Sweden and Managing Director (Nordic region) of Panasonic, Chantelle AB and Twentieth Century Fox. Her early career involved several senior marketing roles with Procter & Gamble and Johnson & Johnson. Skills: Eileen has a strong technology background and is a leader in the development of the UK’s increasingly renowned fintech industry. Eileen brings a constructive, challenging, and balanced perspective to the Board including a focus on technology innovation, value creation and an informed perspective on the digital consumer. Experience: Eileen has a university degree in computer science and since beginning her career in telecoms at Verizon Wireless, she has held various roles at Apple, Sun Microsystems, Openwave, PalmSource, Skype and Yahoo!. Eileen was previously a member of the Prime Minister’s Business Advisory Group and chair of Tech Nation, a UK Government-supported technology industry group. Skills: Fiona is a chartered accountant and has over 30 years’ experience in retail financial services, both in the industry and as an auditor. She has an outstanding record of business leadership and is an experienced CEO and chair. Experience: Fiona was Vice-Chair of Save the Children from 2012 to 2019 and Trustee Director of the Humanitarian Leadership Academy from 2015 to 2019. Fiona was Chief Executive Officer of Scottish Friendly Group until December 2016, having joined the company in 1998. She has worked in the finance functions at Prudential plc and Scottish Amicable and earlier in her career, across a number of industry sectors in the UK and then in the US with Arthur Young (now EY). Skills: Gerry has extensive audit and finance experience in consumer business, retail, technology, media and communications sectors. Experience: Gerry was a Non-Executive Director of Capital & Counties Properties PLC from 2015 to 2018 and the Senior Independent Director from 2018 to 2020. Gerry is a former Deloitte LLP partner and was leader of its Professional Practices Group with direct industry experience in consumer business, retail and technology, media and telecommunications. He was a member of the Deloitte Board and Chairman of its audit committee for a number of years and was Chairman of the Audit & Assurance Faculty of the Institute of Chartered Accountants in England and Wales. Skills: Nigel is a solicitor and has extensive legal, risk and governance experience and a strong background in UK and international telecommunications. Experience: Nigel held several senior legal roles at BT Group plc including General Counsel of BT Consumer, Head of Competition & Regulatory law, and Vice President and Chief Counsel for UK and major transactions. Prior to BT, Nigel was engaged as legal counsel at ExxonMobil International Limited. He trained and qualified as a solicitor with Linklaters. 76 Currys plc Annual Report & Accounts 2021/22 Directors’ Report Directors The names, biographies, committee memberships and dates of appointment of each member of the Board are provided on pages [x] and [x]. During the year, Jonny Mason stepped down as a director on 9 July 2021 and Bruce Marsh was appointed as an executive director and the Group Chief Financial Officer with effect from 12 July 2021. On 8 September 2022, Ian Livingston will step down from the Board and Ian Dyson will be appointed as Chair of the Board and Nominations Committee. The Board is permitted by its Articles of Association (the ‘Articles’), to appoint new directors to fill a vacancy as long as the total number of directors does not exceed the maximum limit of 15. The Articles may be amended by special resolution of the shareholders and require that any director appointed by the Board stand for election at the following annual general meeting. In accordance with the UK Corporate Governance Code, all directors submit themselves for election or re-election on an annual basis. The Remuneration Report provides details of applicable service agreements for executive directors and terms of appointment for non-executive directors. All the directors proposed by the Board for re-election are being unanimously recommended for their skills, experience and the contribution they can bring to Board deliberations. During the year, no director had any material interest in any contract of significance to the Group’s business. Their interests in the shares of the Company, including those of any connected persons, are outlined in the Remuneration Report. The Board exercise all the powers of the Company subject to the Articles, the Act and shareholder resolutions. A formal schedule of matters reserved for the Board is in place and is available on the Company’s website at www.currysplc.com. Directors’ responsibilities The directors’ responsibilities for the financial statements contained within this Annual Report and Accounts and the directors’ confirmations as required under DTR 4.1.12 are set out on page [x]. Directors’ indemnities and insurance The Company has made qualifying third-party indemnity provisions (as defined in the Act) for the benefit of its directors during the year; these provisions remain in force at the date of this Directors’ Report. In accordance with the Articles, and to the extent permitted by law, the Company may indemnify its directors out of its own funds to cover liabilities incurred as a result of their office. The Group holds directors’ and officers’ liability insurance cover for any claim brought against directors or officers for alleged wrongful acts in connection with their positions, to the point where any culpability for wrongdoing is established. The insurance provided does not extend to claims arising from fraud or dishonesty. Information required by Listing Rule 9.8.4R Details of long-term incentive schemes as required by Listing Rule 9.4.3R are located in the Directors’ Remuneration Report on pages [x] to [x]. There is no further information required to be disclosed under Listing Rule 9.8.4R. Dividend The Board has proposed a final dividend for the year ended 30 April 2022. Details of the final and interim dividends for the year are included in the below table. As at 6 July 2022, the Company’s Employee Benefit Trust (‘EBT’) held [xxx,xxx,xxx] shares. The right to receive the final dividend for 2021/22 will be waived by the trustees of the EBT in respect of the balance of shares held as at the dividend record date on [XX] September 2022. Year ended 30 April 2022 Year ended 1 May 2021 Interim dividend 1.00p Nil Final dividend [X.00p] Nil Full year dividend Nil 3.00p Total dividends [ X.00p] 3.00p Colleague involvement The Group has a robust communications programme in place to provide colleagues with information on matters of concern to them. This includes regular publications on the Group’s intranet, email updates from the Group Chief Executive and regular meetings with line managers. The members of the Executive Committee regularly communicate matters of current interest and concern to colleagues. There are colleague forums in place in UK and Ireland and an International Forum has been established representing all other countries in the Group as the centre of a colleague listening framework. This ensures that colleague feedback is received effectively and consistently across all countries that the Group operates in. This forum supports various initiatives and more details are available on page [x]. Details of the colleagues’ involvement in the Group’s share plans are disclosed in the Remuneration Report on pages [x] to [x]. The Directors’ Report required by the Companies Act 2006 (the ‘Act’), the corporate governance statement as required by DTR 7.2 and the management report required by DTR 4.1 comprises the Strategic Report on pages [x] to [x], the Corporate Governance Report on pages [x] to [x], together with this Directors’ Report on pages [x] to [x]. All information is incorporated by reference into this Directors’ Report. 77 Governance Financial Statements Investor information Strategic Report Employment of disabled people The business is committed to providing equal opportunities in recruitment, training, development and promotion. We encourage applications from individuals with disabilities. All efforts are made to retain disabled colleagues in our employment, including making any reasonable re-adjustments to their roles. Every endeavour is made to find suitable alternative employment and to re-train and support the career development of any employee who becomes disabled while serving the Group. Information on greenhouse gas emissions The information on greenhouse gas emissions that the Company is required to disclose is set out in the Sustainable Business report on page [x]. This information is incorporated into this Directors’ Report by reference and is deemed to form part of this Directors’ Report. Political donations No political donations were made by the Group during the period. It remains the policy of the Company not to make political donations nor incur political expenditure as those expressions are normally understood. As the definitions of political donations and political expenditure in the Act are very wide and could extend to bodies such as those involved with policy review, law reform and the representation of the business community, the directors seek shareholder authority for political donations and political expenditure each year on a precautionary basis to avoid inadvertent infringement of the Act. Capital structure The Company’s only class of share is ordinary shares. Details of the movements in issued share capital during the year are provided in note [x] to the Group financial statements. The voting rights of the Company’s shares are identical, with each share carrying the right to one vote. The Company holds no shares in treasury. Details of employee share schemes are provided in note [x] to the Group financial statements. As at 30 April 2022, the EBT held 33,215,940 shares. The EBT acquired 34,667,982 shares by market purchase during the financial year. Restrictions on transfer of securities of the Company There are no specific restrictions on the size of a holding nor on the transfer of shares, which are both governed by the general provisions of the Articles and prevailing legislation. The directors are not aware of any agreements between holders of the Company’s shares that may result in restrictions on the transfer of securities or on voting rights. No person has any special rights of control over the Company’s share capital and all issued shares are fully paid. Change of control – significant agreements All of the Company’s share incentive scheme rules contain provisions which may cause options and awards granted under these schemes to vest and become exercisable in the event of a change of control. The Group’s main committed borrowing facility has a change of control clause whereby the participating banks can require the Company to repay all outstanding amounts under the facility agreement in the event of a change of control. There are a number of significant agreements which would allow the counterparties to terminate or alter those arrangements in the event of a change of control of the Company. These arrangements are commercially confidential, and their disclosure could be seriously prejudicial to the Company. Furthermore, the directors are not aware of any agreements between the Company and its directors or employees that provide for compensation for loss of office or employment in the event of a takeover bid. Significant shareholdings As at 30 April 2022, the Company had been notified of the following voting interests in the ordinary share capital of the Company in accordance with Chapter 5 of the FCA’s DTR. Percentages are shown as notified, calculated with reference to the Company’s disclosed share capital as at the date of the notification. Name Number of shares Percentage of share capital RWC Asset Management LLP 136,282,392 11.95% Artemis Investment Management LLP 88,211,458 7.56% Cobas Asset Management 69,140,994 6.00% Wishbone Management LLP 41,500,000 5.25% Greater Manchester Pension Fund 59,107,872 5.11% D P J Ross 55,738,699 4.80% Ruffer 52,373,898 4.62% Majedie Asset Management 44,288,264 3.80% Equiniti Trust (Jersey), trustee of the EBT 33,788,905 2.90% On 10 May 2022, RWC Asset Management LLP disclosed a holding of 171,500,831 shares or 15.13% and Schroders plc disclosed a holding of 59,677,996 shares or 5.26%. On 24 May 2022 Cobas Asset Management disclosed a holding of 80,987,739 shares or 7.15%. [On 6 July 2022, being the last practicable date prior to the publication of this Annual Report and Accounts, no further changes to the shareholdings reported above had been notified to the Company in accordance with DTR 5]. Directors’ interests in the Company’s shares and the movements thereof are detailed in the Remuneration Report on pages [x]. Issue of shares In accordance with section 551 of the Act, the Articles and within the limits prescribed by The Investment Association, shareholders can authorise the directors to allot shares in the Company up to one third of the issued share capital of the Company. Accordingly, at the AGM in 2021 shareholders approved a resolution to give the directors authority to allot shares up to an aggregate nominal value of £388,819. The directors have no present intention to issue ordinary shares, other than pursuant 78 Currys plc Annual Report & Accounts 2021/22 Directors’ Report continued to obligations under employee share schemes. This resolution remains valid until 30 October 2022 or, if earlier, until the conclusion of the Company’s AGM in 2022. The Company will seek the usual renewal of this authority at the 2022 AGM. Purchase of own shares Authority was given by the shareholders at the AGM in 2021 to purchase a maximum of 116,645,844 shares, such authority remaining valid until 30 October 2022 or, if earlier, until the conclusion of the Company’s AGM in 2022. The authority was exercised during the year. Following a review of the capital allocation framework and consideration of the interest of the Company’s main stakeholder groups, the Board decided to commence a share buyback programme. On 4 November 2021 the Company announced that £75m of shares would be repurchased over the following twelve months. 32,963,792 shares were repurchased between 14 January 2022 and 30 April 2022. The Company will seek the usual renewal of this authority to purchase its own shares at the 2022 AGM. Use of financial instruments Information about the use of financial instruments is given in note [x] to the Group financial statements. Post-balance sheet date events Events after the balance sheet date are disclosed in note [x] to the Group financial statements. Auditor Each director at the date of approval of this Annual Report and Accounts confirms that: • so far as the director is aware, there is no relevant audit information of which the Company’s auditor is unaware; and • the director has taken all the steps that they ought to have taken as a director in order to make themself aware of any relevant audit information and to establish that the Company’s auditor is aware of that information. This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Act. Following a tender process carried out during 2020/21, KPMG LLP will be appointed as external auditor for the 2022/23 financial year subject to shareholder approval at the Company’s AGM in September 2022. Certain information required to be included in this Directors’ Report may be found within the Strategic Report. By Order of the Board Nigel Paterson Company Secretary 6 July 2022 79 Governance Financial Statements Investor information Strategic Report Corporate Governance Report Board Leadership and Company Purpose Role of the Board The Board is responsible for the overall leadership and promotion of the long-term sustainable success of the Company, generating value for shareholders and contributing to wider society. The Board sets the Company strategy and oversees its implementation within a framework of efficient and effective controls that allow the key issues and risks facing the business to be assessed and managed. The Board considers the impact on, and the responsibility it has to the Company’s stakeholders as part of its decision-making. The Board delegates clearly defined responsibilities to its committees and the terms of reference for these committees are available on the Company’s website at www.currysplc.com/investors. The Company’s vision, purpose, values and strategy are described in more detail in the Strategic Report on pages [XX] to [XX]. The Board oversees the delivery of the strategy within the context of the values and culture. Culture The directors are focused on monitoring the culture in the business and receive regular updates on the results of colleague ‘Pulse surveys’. All non-executive directors have access to the Company’s intranet and corporate email addresses and receive all communications sent to colleagues. In addition, the non- executive directors frequently have direct contact with Executive Committee members and their direct reports. Non-executive directors are invited to Company events such as the Capital Markets Day held in November 2021 and the annual Peak event. This event was held virtually in October 2021 due to Covid-19. The Board also visit key sites and stores. The March 2022 Board meeting was held at the Company’s main UK distribution and service centre in Newark and included a site tour and opportunities for directors to interact directly with supply chain and services colleagues. One non-executive director attends Inclusion and Diversity forum meetings and two non-executive directors attend colleague listening forums. Each of these forums provide an opportunity for non-executive directors to hear feedback directly from colleagues and share insights on corporate culture with the whole Board. A non-executive director also attends the ESG Committee. Corporate Governance Framework The Currys plc Board is supported by four committees: • Audit Committee – oversees the financial reporting, internal controls and the relationship with the external Auditor; • Disclosure Committee – oversees the procedures and controls for the identification and disclosure of price sensitive information; • Nominations Committee – oversees the composition of the Board and its committees and that a diverse pipeline is in place for succession planning; and • Remuneration Committee – oversees the remuneration of the executive directors and senior management and the structure of remuneration for the workforce. These committees are each comprised of directors of the Currys plc Board with the exception of the General Counsel and Company Secretary who is a member of the Disclosure Committee. This Corporate Governance report describes the governance framework in place to ensure that the Board is operating effectively and supporting and challenging management to maintain high standards of corporate governance across the Group. I believe that robust corporate governance is the foundation to ensuring the long-term sustainable success of a business and helps us deliver the right outcomes for our shareholders, our customers, our colleagues, our suppliers and our communities. The Board is fully compliant with all provisions of the 2018 UK Corporate Governance Code (the ‘Code’). We have structured this report by the Code provisions to help show how we have applied these in each case. Chair of the Board statement I am pleased to present the Corporate Governance report for the year to 30 April 2022. The Board is responsible for the overall leadership of the Group to ensure the long-term, sustainable success of the business.” Lord Livingston of Parkhead Chair of the Board 80 Currys plc Annual Report & Accounts 2021/22 Corporate Governance Report continued The day-to-day management of the business is delegated to the Group Chief Executive who is responsible for leading the implementation of the strategy that has been approved by the Board. The Group Chief Executive is supported by an Executive Committee which consists of eight senior leaders in the business and also by a wider Group Leadership Team of approximately 80 colleagues who support the Executive Committee in driving the management agenda. The Group Risk and Compliance Committee comprises the members of the Executive Committee and oversees the management of principal and emerging risks, (see page [XX] for further information), Audit, Risk and internal Controls. The Environmental, Social and Governance (‘ESG’) Committee reports into the Executive Committee. The ESG Committee drives the sustainability, well-being and social and ethical impact initiatives in the Group including consideration of the impacts of climate change. Currys plc is the ultimate beneficial owner of the main operating subsidiaries in the Group. In UK and Ireland, the Regulatory Compliance Committee overseas the management of risks in relation to regulated products and the Product Governance Committee oversees the development of, and any subsequent material changes to, such products. Similar governance frameworks for regulated products are replicated in the International businesses. Board Reserved Matters The formal schedule of matters reserved for the decision of the Board is considered by the directors on an annual basis. This was last approved on 18 January 2022 and the directors agreed that the balance of matters reserved and matters delegated remain appropriate. The matters reserved for Board decision are available on the Company’s website www.currysplc.com and these include: • approval of published financial statements, dividend policy and other disclosures requiring Board approval; • declaration of interim and recommendation of final dividends; • approval of budget and Group strategy and objectives; • appointment and remuneration of directors, the Company Secretary and other senior executives; • approval of major acquisitions and disposals; • approval of authority levels for expenditure; • approval of certain Group policies; and • approval of shareholder communications. Key areas of focus for the Board during the year • Succession and leadership • Financial and operational performance • Assessing and managing the impact of Covid-19 on our colleagues and the business model • Major capital and IT projects • Colleague engagement and well-being • Evaluation of a partial listing of the Nordics business • Oversight of transformation of the UK&I Contact Centre and outsource of the UK Logistics contract • Consideration of refined ESG strategy and enhanced reporting Updating shareholders on the Company’s Strategy at November 2021 Capital Markets Day The Board and Committees Structure Currys plc Board Audit Committee Disclosure Committee Nominations Committee Remuneration Committee Executive Committee Main Operating Subsidiaries ESG Committee Group Risk & Compliance Committee Risk & Regulatory Committee Product Governance Committee 81 Governance Financial Statements Investor information Strategic Report Board activities during 2021/22 Strategy • Strategy update to investors at November 2021 Capital Markets Day • Considered partial listing of the Nordic business and agreed not to proceed • Omnichannel Connected Customer update • Future Mobile Offer • Outsource of the UK logistics • UK&I Credit deep dive • Customer promises update • Customer Contact & Support Strategy update • Oversight of Group performance against strategy and delivery of transformation projects • ESG Strategy Financial and operational performance • The Company’s Preliminary and Interim results, trading statements and the Annual Report • Going Concern and Viability Statements • Fair, balanced and understandable assessment • Dividend, treasury and tax strategies • Budget approval • Three year plan approval • New banking facility arrangements approval • Capex approvals • International business updates Committee updates • Detailed updates from each Committee Chair – Audit, Disclosure, Nominations and Remuneration – following committee meetings Stakeholders Customers • Customer experience updates and insights • Customer feedback and metrics • Covid-19 measures in place Shareholders • Annual General Meeting documents • Investor Relations updates and feedback • Feedback from shareholder consultation on Directors’ Remuneration Policy • Dividend approval • 2022 Share Buyback programme approval • 2021 Capital Markets Day Colleagues • Annual health and safety review • Colleague Share Schemes • Modern slavery update and statement • 2023-25 people plan and priorities • Talent, succession planning and leadership • Inclusion and diversity update • Colleague engagement and colleague listening updates • Gender pay gap reporting Communities and Environment • ESG strategy updates • Partnership with Digital Poverty Alliance Governance and risk • Risk framework and internal control review • Principal risks and uncertainties review • Risk horizon scanning • Regulatory Compliance updates • Litigation and disputes updates • Insurance review • Conflicts of Interest & new appointments • Group Delegation of Authority Policy • Board Matters Reserved and Committee Terms of Reference review • Role descriptions of the Chair of the Board, the Group Chief Executive and the Senior Independent Director review • Externally facilitated Board effectiveness process completed 82 Currys plc Annual Report & Accounts 2021/22 Communication with investors The Board supports the initiatives set out in the Code and the UK Stewardship Code and encourages regular engagement with both existing and potential institutional shareholders and other stakeholders. The Board believes that it is important to explain business developments and financial results to the Company’s shareholders and to understand shareholder concerns. The principal communication methods used to impart information to shareholders are news releases (including results announcements), investor presentations and Company publications. In addition, the Chair of the Board invites each of the Company’s largest shareholders to attend an engagement meeting on at least an annual basis. All shareholders are invited to submit any questions they have for the Board to [email protected] or [email protected] at any time of the year. A Capital Markets Day was held in November 2021 to update investors on the strategic progress the Group has made in creating long-term sustainable value for stakeholders. The session included updates on the Nordics business, the new Omnichannel strategy, Sustainability and the financial profile and capital structure. The event was attended by most of the Group’s largest shareholders and the presentations and Q&A from the event are available on currysplc.com The Board receives a report from the Investor Relations team at every scheduled meeting and this includes a summary of investor interactions during the period and a synopsis of questions and feedback from shareholders. The Group Chief Executive has principal responsibility for investor relations. He is supported by a dedicated investor relations department that, amongst other matters, ensures there is a full programme of regular dialogue with major institutional shareholders and potential shareholders as well as with sell- side analysts throughout the year. In all such dialogue, care is taken to ensure that no price-sensitive information is released. The Chair of the Board and non-executive directors are available to meet with major shareholders as required, and the Chair of the Remuneration Committee communicates with major shareholders on remuneration matters. The Company is committed to fostering effective communication with all members, be they institutional investors, private or employee shareholders. The Company communicates formally to its members when its full year and half year results are published. These results are posted on the corporate website, as are other external announcements and press releases. The Annual General Meeting (‘AGM’) provides an opportunity for the Company to engage with shareholders and for the Board to provide an account of the progress made by the business during the year, along with a synopsis of current issues facing the business. Our stakeholders The directors are fully aware of their responsibilities to promote the success of the Company in accordance with section 172(1) of the Act. The Board considers the impact on, and the responsibility it has to, all the Company’s stakeholders as part of its decision-making. By considering the Company’s strategic priorities and having processes in place for decision-making, they do, however, aim to make sure that their decisions are consistent. The Group communicates with external stakeholders, including industry bodies and regulators on the management of risks and issues. Workforce The Board remains committed to ensuring that it gives due regard to the interests of all of its stakeholders, including colleagues. In its discussions, the Board has sought to understand and consider the views of our colleagues. Further details are available in the Colleagues section on pages [XX] to [XX]. Further information on workforce policies and practices and how the Company invests in and rewards colleagues is also available in this section. Authorisation of conflicts of interest Each director has a duty under the Act to avoid a situation where they have or may have a conflict of interest. They are also required to disclose to the Board any interest in a transaction or arrangement that is under consideration by the Company. The General Counsel and Company Secretary supports the directors in identifying potential conflicts of interest and reporting them to the Board. The Board is permitted by the Company’s articles of association to authorise conflicts when appropriate. Potential conflicts are approved by the Board, or by two independent directors if authorisation is needed urgently, and then reported to the Board at its next meeting. A register of directors’ conflicts is maintained and reviewed at least annually. Directors are asked to confirm periodically that the information on the register is correct. The Board is satisfied that the Company’s procedures to identify, authorise and manage conflicts of interest have operated effectively during the year. Stakeholder Engagement Information on how we engage with stakeholders including our colleagues. Read more on page [XX]. FURTHER INFORMATION Corporate Governance Report continued 83 Governance Financial Statements Investor information Strategic Report Division of Responsibilities Board Structure The Board is comprised of two executive directors, five independent non-executive directors and the Chair of the Board to limit the ability for any individual or small group to dominate Board decision-making. There is a clear division of responsibilities between the executive leadership of the business and the leadership of the Board. Director responsibilities In accordance with the Code, there is a clear division of responsibility between the Chair of the Board and the Group Chief Executive. Role descriptions are in place for the Chair of the Board, Group Chief Executive and Senior Independent Director and the Nominations Committee reviews and considers these on an annual basis and recommends any changes to the Board. The role descriptions were last approved by the Board on 18 January 2022 and are available on the Company’s website www.currysplc.com. The main responsibilities of the different components of the Board are set out below. Chair of the Board’s responsibilities • overall Board effectiveness and leadership; • Board culture, including the encouragement of openness and debate and constructive relations between the executive and non-executive directors; • the appropriate balance of skills, experience and knowledge on the Board; • oversight of the induction, development, performance evaluation, and succession planning of the Board; • promotion of diversity and equality of opportunity across the Group; • representation of all stakeholders’ interests; and • promotion (with the support of the Company Secretary) of the highest standards of corporate governance. Group Chief Executive’s responsibilities • formulation and proposal of the Group strategy and delivery of the strategy approved by the Board; • delivery of Group financial performance; • leadership of the Group and senior management including effective performance and succession planning; • representation of the Company to key stakeholders; • communication of Company culture and ensuring operational practices drive appropriate behaviours; • communication to the Board of views of the workforce; • promotion of diversity and equality of opportunity across the Group; • identification of business development opportunities; • management of Group risk profile and ensuring internal controls and risk mitigation measures are in place; • ensuring compliant management of the Group’s business; and • oversight of the operational and support functions. Senior Independent Director’s responsibilities • available to communicate with shareholders; • annual appraisal of the performance of the Chair of the Board; • oversight of an orderly succession for the position of Chair of the Board; • support the Chair of the Board in the performance of their duties; and • work with the Chair of the Board, other directors and shareholders to resolve significant issues and to maintain Board and Company stability in periods of stress. Independent Non-Executive Director’s responsibilities • provision of an independent perspective; • ensuring constructive challenge of management; • considering the effectiveness of the implementation of the strategy within the risk appetite; and • contribution of diversity of experience and backgrounds to Board deliberations. General Counsel and Company Secretary’s responsibilities • trusted advisor to the Board on corporate governance matters; • support for the Chair of the Board and non-executive directors; • ensuring that the Board and committees have the appropriate type and quality of information they need to make sound business decisions; and • ensuring that the corporate governance framework and practices remain fit for purpose. 84 Currys plc Annual Report & Accounts 2021/22 Corporate Governance Report continued Time commitment and attendance The Nominations Committee has considered the commitment shown by the non-executive directors to the Company and is satisfied that all directors devote appropriate time to their roles. The Nominations Committee considers the external appointments of each of the directors on at least an annual basis. It was concluded again for 2021/22 that none of the directors had external commitments that would hinder their ability to devote sufficient time to discharging their board role. Details of the directors’ attendance at the Board meetings that took place during the year can be found on page [XX]. Board meetings and information The Chair of the Board is responsible for ensuring that all directors are properly briefed on issues arising at Board meetings and that they have full and timely access to relevant information. A comprehensive rolling forward agenda is in place for the Board and each committee to ensure that all regular updates and approvals can be considered in sufficient detail whilst leaving appropriate space on meeting agendas for the consideration of current issues. The Company uses an electronic board paper system which enables the safe and secure dissemination of quality information to the Board. Paper templates and guidance are provided to ensure that directors are provided with the information they need to be able to discharge their duties. Formal minutes of the Board and committee meetings are prepared by the General Counsel and Company Secretary, or their nominee, and are reviewed and approved by the Board or committee at the next meeting. The Chair of the Board maintains regular communications with the non-executive directors in between meetings. Time is provided before and after every Board meeting for the non-executive directors to meet without the executives present. Board dinners are held periodically on an evening prior to a Board meeting to provide the opportunity to discuss corporate strategy, business performance and other matters in an informal setting. The directors attended a virtual Board dinner in December 2021 due to Covid-19 but were able to attend board dinners in person in September 2021, March 2022 and April 2022. Board meetings are usually held at the Company’s head office but were held by videoconference during the Covid-19 pandemic when it was not safe to meet in person. The Board usually holds meetings at other Group locations from time to time. This enables directors to visit stores and operational centres throughout the portfolio and gain a deeper understanding of the business. The March 2022 Board meeting was held at the Company’s distribution centre in Newark. 85 Governance Financial Statements Investor information Strategic Report Composition, Succession and Evaluation Board composition and independence At year end, the Board comprised eight members: the Chair of the Board, two executive directors and five non-executive directors, each of whom is determined by the Board to be independent in character and judgement and who provide effective challenge to the Board and the business. The Nominations Committee considers the criteria set out in the Code when considering independence, as well as contributions made during Board deliberations. These independent non-executive directors are Tony DeNunzio, Eileen Burbidge, Andrea Gisle Joosen, Fiona McBain and Gerry Murphy. More than half of the Board (excluding the Chair of the Board, Lord Livingston of Parkhead) is considered to be independent in accordance with the Code. Every year the Board, supported by the Nominations Committee, considers the collective skills, experience and the composition of the Board and assesses whether or not the Board membership enables the effective delivery of the Company’s strategy. During the year, Bruce Marsh joined the Company on 12 July 2021 as the Group Chief Financial Officer, replacing Jonny Mason who stepped down from the Board on 9 July 2021. On 8 September 2022, Ian Livingston will step down from the Board and Ian Dyson will become Chair of the Board and Nominations Committee. The Board, with the support of the Nominations Committee, considered the composition of the Board and its committees during the year. The Chair of the Board keeps Board composition under regular review and addressed this specifically with each director as part of the one-to-one meetings held during the Board effectiveness review process. Overall, the Board is satisfied that the current composition is appropriate given the needs of the business. In accordance with the Code, all directors will stand for re-election at the Company’s 2022 AGM other than Lord Livingston who will step down from the Board at the meeting. Biographical information, Committee membership and the Board meeting attendance of each of the directors submitting themselves for re-election is shown on pages [XX] and [XX]. Ian Dyson will stand for election at the Company’s 2022 AGM and his biography is included in the Notice of AGM. Board Succession and changes to the Board The current average director tenure is six years. Two non-executive directors have been on the Board since the formation of the Company in 2014. The Board, with the support of the Nominations Committee, continues to view the need for robust succession plans as a priority. Further information on succession planning is available in the Nominations Committee report on page [XX]. In respect of senior management succession planning, the Board was briefed on changes to the Executive Committee membership during the year and received an update on the performance of this Committee at a Board dinner during April 2022. The Executive Committee complete a detailed talent review of GLT members on a quarterly basis and have reviewed the top 30 critical roles in the business to monitor diversity and ensure that strong development plans are in place. The Board receive regular updates on talent and succession planning via the Group Chief Executive and the Chief People, Communications and Sustainability Officer. Annual Board Evaluation 2020/21 process outcomes The 2020/21 Board performance evaluation was conducted by way of the circulation of questionnaires and individual interviews between the Chair of the Board and each director. The outcomes of this process are summarised below. The directors provided positive feedback including in particular: • that the Board members work together effectively and constructively to promote the long-term sustainable success of the Company; • that the executive team had shown excellent leadership during the Covid-19 pandemic; • that the new colleague listening forums had been effective; • that Board agendas had improved during the year to enable increased quality of discussions on key topics; • that there is significant Board discussion and challenge on the impact that decisions made will have on the Company’s stakeholders; and • that the talent review updates the Board has received during the year have provided a good view of the talent pipeline and a framework for executive team succession planning. The process identified some opportunities to enhance Board effectiveness: • the Board to receive additional training on topics relevant to the Group for example trends in technology evolution and the impact of climate change goals on the business and its products and services; • the Board to receive more frequent updates on the results of colleague surveys and feedback; • the quality of Board papers had improved during the year but there was an opportunity to further improve consistency; and • the Board to consider the appropriate balance of meetings that should be held in person or by videoconference once it was safe to resume travel and business meetings in person. Each of these follow up actions has either been successfully implemented or is in progress. 2021/22 process The Code recommends that the performance of the Board be reviewed externally every three years and an external evaluation of the Board was carried out in 2021/22. Clare Chalmers Limited was engaged to carry out this evaluation. The process included a document review, director and key stakeholder interviews and the observation of Board meetings held on 18 January and 9 March 2022 and an Audit Committee meeting held on 7 March 2022. 86 Currys plc Annual Report & Accounts 2021/22 The process addressed all matters relating to the performance of the Board and included the roles of the executive and non-executive directors, the Board, committees, the effectiveness of each director and the Chair of the Board, leadership, culture, strategy and corporate governance. A report summarising the findings of the review was tabled at the Board meeting on 27 April 2022. Overall, the directors provided positive feedback on the performance of the Board, highlighting in particular that: • the Board has a good mix and balance of skills, good gender and cognitive diversity, and the non-executive directors contribute valuable experience and insights; • the Board is led by a supportive and collaborative Chair who has a strong understanding of the business and makes valuable contributions whilst ensuring that all Board members contribute, and meeting time is used effectively; • the Board is inclusive of the wider management team and receives regular presentations from a variety of colleagues across the business; • sharing an early view of the three-year plan in June and giving the Board the opportunity to discuss this with the full Executive Committee ahead of the submission of the final plan in November had worked well and increased the transparency of the process for non-executive directors; • performance reporting had improved during the year including KPIs and performance against the three strategic priorities; • risk governance had improved considerably with better integration of risk into business planning and monitoring; and • the Board has a strong customer-centric mentality. The process identified some further actions to help enhance effectiveness: • ensure more time is spent on Chair and non-executive director succession planning given the number of directors due to step down from the Board in the next three years and the need to enhance Board diversity – the full Board to be involved in this process; • enhance the Board skills matrix to distinguish the level of expertise directors have in each skill area to support Board succession discussions; • increase the number of Board training sessions, to keep directors updated on evolving and technical topics; • the Board to receive more granular information on external insights, market trends, competitors and market share; • enhance performance and programme oversight by way of dashboards that include the main metrics and improve the view the Board has of progress against strategic goals and how effectively investments are delivering; • increase the frequency of reporting on colleague matters including workforce engagement and invite a representative from the International Colleague Forum to interact directly with the non-executive directors in the absence of management; and • take a more structured approach to evaluation of and feedback from suppliers. An externally facilitated Board effectiveness review will next be completed during 2024/25. Chair of the Board performance The Senior Independent Director collated feedback from the Board on the performance of the Chair of the Board and carried out his annual performance review. The directors provided positive feedback on the Chair of the Board’s leadership during the year. The Board is of the opinion that the Chair of the Board had no other commitments during the year that adversely affected his performance, that his effectiveness in leading the Board was not impaired and that he cultivated an atmosphere that enabled challenging and constructive debate. Individual Director performance Following the results of the external evaluation, the Board confirms that all directors, including the Chair of the Board, continue to be effective and demonstrate commitment to the role, including having time to attend all necessary meetings and to carry out other appropriate duties. Board diversity The Board composition review takes account of all forms of diversity, including gender, social and ethnic backgrounds, cognitive and personal strengths. At year end, the Board had three female directors (37.5% of the Board), one of whom is based outside the UK, one director that meets the ethnic minority criteria as set out in the Parker review and the majority of the directors have substantial international business experience. 25% of the Executive Committee members are female. The review this year again concluded that the Board possessed the necessary personal attributes, skills and experience to discharge its duties fully and to challenge management effectively. The Company is committed to developing a diverse workforce and equal opportunities for all. The Board recognises that enhancing diversity in all its forms is a critical part of having an effective and engaged workforce which in turn supports the long-term sustainable success of the business. Whilst the Board is strongly supportive of enhancing all forms of diversity across the Board and workforce as a matter of priority, the Board does not currently set specific targets on gender balance or ethnicity. The Committee and the Board continue to be very mindful of the benefits of greater diversity of gender, social and ethnic backgrounds, and cognitive and personal strengths, in all appointments. In accordance with DTR 7.2.8A, the Committee confirms that the Board has adopted the same diversity policy as in place for UK and Ireland colleagues and senior management. The Equality, Inclusion & Diversity: Dignity at Work Policy was last reviewed in November 2021. Corporate Governance Report continued 87 Governance Financial Statements Investor information Strategic Report Board induction and training New directors appointed to the Board receive a personal induction programme, together with guidance and training appropriate to their level of previous experience. Each director is given the opportunity to meet with senior management and store colleagues and to visit the Group’s key sites. This enables familiarisation with the businesses, operations, systems and markets in which the Group operates. New directors also meet with the Group’s auditor and advisors. An example of a typical induction programme is included in the table below. The Chair of the Board will meet with a new director on appointment to agree any appropriate changes to be made before the start of the induction. Directors are provided with a comprehensive induction pack on appointment and in addition, group information and policies are maintained within the electronic board paper portal to ensure directors have access to current resources. Bruce Marsh joined the Board on 12 July 2021 and completed his induction during the year. The directors are invited to nominate topics that they would like to receive training on and briefings are arranged from time to time on governance, compliance and company knowledge as requested. During the year, the directors received training on climate change. Directors arrange individual meetings with Executive Committee members as required when they require additional information or context on a topic. Standard induction programme briefings and information Induction plans are customised for each incoming director depending on their individual requirements but will usually cover the following key areas, meetings and locations: Business and strategy • business model and strategy • markets and competitive landscape • overview of each business area • market opportunities • environment, social and governance matters Finance and audit • finance, treasury and tax overviews • current financial position and future projections • budget • accounting issues • audit report and findings • risk and internal controls Investor relations • shareholder base and communications • analyst coverage and perspectives • communication policies Governance • overview of committees • UK Corporate Governance Code and best practice guidance • UK listed company requirements including Market Abuse Regime • Companies Act and directors’ duties • Company articles and the role of the Board People to meet • directors • committee chairs • General Counsel and Company Secretary • members of the Executive Committee • senior management, including the Group Director of Internal Audit • members of the external audit team • store and distribution centre colleagues Sites to visit • different format stores that are convenient for new director to visit; • the Newark distribution centre; and • the store colleague training centre The Academy@FortDunlop. 88 Currys plc Annual Report & Accounts 2021/22 Corporate Governance Report continued Audit, Risk and Internal Control The Audit Committee report is available on pages [XX] to [XX] and this covers all the reporting included in this section of the Code. Risk management and internal control The Board has overall responsibility for the Group’s system of risk management and internal control and for reviewing its effectiveness. The Board is supported by the Audit Committee, the Group Risk and Compliance Committee, the Regulatory Compliance Committee, business unit risk committees and the Risk team in delivering on this responsibility. The Group operates a process of continuous identification and review of business risks. This includes the monitoring of principal risks, undertaking horizon scanning to identify emerging risks, evaluating how risks may affect the achievement of business objectives and, by taking into account risk appetite, reviewing management’s treatment of the risks. The main business units, locations and functions are responsible for preparing and maintaining risk registers and operating risk management processes for their areas of responsibility. Risk registers and the risk processes are undertaken in accordance with a consistent Group Risk Management methodology, toolkit and process. The Group Risk and Compliance Committee meets at least three times annually and additionally each month any changes to the profile of each principal risk are presented to, and reviewed by, this committee. The work of the Group Risk and Compliance Committee includes: assessing and challenging the consolidated risk profile, agreeing and monitoring the Group’s principal risks; determining the prioritisation of mitigating actions; reviewing the Company’s horizon-scanning processes and its emerging risks; providing reports and recommendations to the Audit Committee and Board including to assist with the setting of risk appetite with regard to the principal risks. Our approach to risk management continues to evolve as part of our organisational focus on transformation and how we continue in optimal decision-making in an increasingly fast-moving environment. The Group Risk team has continued to facilitate the evaluation of the principal risks facing the Group. Assurance provision Board Responsible for risk management and internal control Defines Currys risk appetite Reviews and approves the business risk profile Group Risk and Compliance Committee • Reviews Group and business unit risk registers • Monitors the management of key risks • Considers new and emerging risks Audit Committee • Reviews the effectiveness of internal control and risk management • Approves the annual internal and external audit plans • Considers the internal audit reviews across the Group Executive management • Responsible for the implementation of the risk management process and the operation of the internal control environment Supported by the Group Director Internal Audit, Risk & Insurance Environmental, Social and Governance Committee Regulatory Compliance Committee Business Continuity Planning Steering Committee Information Security and Data Protection Committee Business unit and functional risk experts Group Risk Management Structure 89 Governance Financial Statements Investor information Strategic Report In addition to the Group’s principal risks, the business faces emerging threats which have been identified through horizon scanning that may potentially impact the business in the longer-term. The Group Risk and Compliance Committee evaluates the appropriateness of management planning to address such emerging risks. In some areas, there may be insufficient information to understand the scale, impact or velocity of these risks. Emerging risks continue to be monitored as part of the ongoing risk management process in order to ensure that action is taken at the right time. The Directors confirm that they have carried out a robust assessment of the principal and emerging risks facing the Group, including those that would threaten its business model, future performance, solvency or liquidity. A description of these risks, together with details of how they are managed or mitigated, is set out on pages [XX] to [XX]. The system of risk management and internal control can only provide reasonable and not absolute assurance against material errors, losses, fraud or breaches of laws and regulations. The Board also monitors the Company’s system of risk management and internal control and conducts a review of its effectiveness at least once a year. This year’s review covered all material controls during the year and up to the date of approval of the Annual Report and Accounts 2021/22 and concluded that an effective system of risk management and internal control operated throughout the period. The review was approved by the Audit Committee and the Board. The diagram opposite shows the governance structure in place over the Group’s risk management activities, as at [XX]/[XX]/2022. Risk appetite Currys faces a broad range of risks reflecting the business environment in which it operates. The risks arising from Currys’ business environment and operating model can be significant. Successful financial performance for the business is achieved by managing these risks through intelligent decision-making and an effective control environment that details the processes and controls required to mitigate risk. The Company’s risk appetite is set by the Board and governs the amount of acceptable risk within which we operate. Our Group risk appetite is further disaggregated by principal risk and takes into consideration the acceptable level of risk across strategic, operational, financial and regulatory risks faced by the business. Reference to our appetite in business decisions provides guidance for objective, risk-aware decision-making. A three-point scale is used to assess the risk appetite for each of our principal risks. If excessive levels of risk are being taken, a series of actions are identified to bring the risk back within an acceptable level. Currys’ general risk appetite is a balanced one that allows taking measured risk as the Company pursues its strategic objectives, whilst aiming to manage and minimise risk in its operations. Currys recognises that it is not possible or necessarily desirable to eliminate all of the risks inherent in its activities. Acceptance of some risk is inherent in operations and necessary to foster innovation and growth within its business practices. Committed to effective risk management The Board has overall responsibility for the system of internal control and for reviewing its effectiveness. It relies on the Audit and Risk Committees to assist in this process. In addition, members of the Executive Committee, operating through the Risk Committee, are accountable for identifying, mitigating and managing risks in their area of responsibility. Management is also responsible for implementing controls that are designed to ensure regulatory compliance, financial and operational control and to confirm that these operate effectively to protect the business from loss. The Board has conducted a review over the effectiveness of the process for identifying, evaluating and managing the significant risks faced by the Group and the operation of related controls. The Audit Committee further reviewed aspects of the internal control environment as outlined in the Audit Committee Report on page 92. The Board has considered the controls findings raised in the Independent Auditor’s report on pages [XX] to [XX]. No other significant failings or weaknesses were identified during the period ending 31 April 2022. Where areas have been identified that require improvement, plans are in place to ensure that necessary actions are taken and that progress is monitored. A report of the Principal Risks together with the Viability Statement can be found on pages [XX] to [XX]. Controls, by their very nature, are designed to manage rather than eliminate risk and can only provide reasonable assurance against material misstatement or loss. 90 Currys plc Annual Report & Accounts 2021/22 Corporate Governance Report continued Our system of internal control Our system of internal control is built on the pillars of Governance, the Tone from the Top, risk management, control activities and assurance. These are more fully described below: Governance • The Board has defined a risk appetite which sets the boundaries within which risk-based decision-making can occur and outlines the expectations for the operation of the control environment. • A Delegation of Authorities operates across the Group. • Business planning, annual budgeting process and the setting of personal business objectives are aligned to ensure focus on delivery of activities to support the delivery of strategic objectives. • Policies and procedures are in place outlining the requirements for the control in finance, operational, technology, regulatory and people areas. These include detailed standards for the operation of Infosec, PCI and Data compliance. • Across the business, central functions and business committees support the operation of an effective risk & control environment. The Tone from the Top • The Tone from the Top communicates a clear commitment to do the right thing for customers, colleagues and shareholders. Colleague behaviours are outlined in the Code of Business Conduct. • The organisation demonstrates its commitment to ethical values through its range of ESG initiatives and programmes. • The business is committed to maintaining an ethical supply chain and undertakes activities to ensure that our suppliers satisfy our Responsible Sourcing policy. • All senior managers and colleagues engaged in FCA regulated activities are required to complete an annual Ethical Conduct declaration. • The operation of a 24/7 whistleblowing hotline to enable the reporting of breaches of ethical or policy requirements. Control Activities • All major capital and change programmes are evaluated by the Change Board. This includes consideration of the risk involved to achievement of successful delivery and the achievement of projected benefits. • A Programme Management Office operates to oversee delivery of our major Perform and Transform change initiatives. • Control activities operate to manage risk associated with our Technology and Information Security. These continue to evolve in line with the deployment of new systems and to meet the challenges posed by external threats. • A Minimum Controls Framework is in place defining the key financial controls that are expected to operate across the businesses core processes and activities. • A Conduct Risk and Control Framework identifies control objectives for activities that underpin the delivery of Good Customer Outcomes in our Financial Services regulated activities. • Training and development is provided to colleagues to cover their responsibilities for risk management, compliance, and their operational obligations. • Our performance management process holds colleagues accountable for their responsibilities. • Fraud and loss prevention processes operate across our omnichannel and Supply Chain activities. • Continuous improvement takes place throughout the organisation to improve the operation of processes and controls. This is informed by actions identified through Internal Audit and Compliance Monitoring reviews as well as customer feedback, the results of Quality Assurance and through the Complaints Management process. • The business is working towards compliance with potential UK Sox requirements. 91 Governance Financial Statements Investor information Strategic Report Risk Management • A risk identification process operates in accordance with the Group Risk Management methodology. This ensures that risk management takes place consistently across the Group to identify and evaluate the significant risks faced by the Group. • The Group risk register covers the principal risks faced by the business, their potential impact and likelihood of occurrence and the key controls or actions established to mitigate these risks. • The risk management framework operates across the business with key business units undertaking risk assessment and risk management activities. • The Group Risk team undertakes horizon scanning reviews to identify emerging risks and opportunities that may impact the business. • The Group Risk and Compliance Committee meets at least three times a year to review the management of risk arising out of the Group’s activities and to monitor the status or risk and actions at the Group and business unit level. • The Board carries out an assessment of the principal risks, emerging risks together with matters that would threaten the business model, future performance, solvency and liquidity. • The Board conducts a review over the effectiveness of the process for identifying, evaluating and managing the significant risks faced by the Group and the operation of related controls. Assurance • The Audit Committee approves the annual internal audit programme. The progress of the plan and the results of the audits are reviewed throughout the year. • A Compliance Monitoring function reviews operation of financial Services regulated activities. • Annual evaluations are undertaken by business management against the Minimum Control framework in order to ensure that the control environment operates as intended. Any deficiencies identified are subject to remedial action. • A broad range of assurance activities are undertaken across the business by functional management to review the management of key risks. • The Group communicates with external stakeholders, including industry bodies and regulators on the management of risks and issues. Internal audit The Group has an internal audit department which conducts audits of selected business processes and functions. The Group’s internal audit plan sets out the internal audit programme for the year and is usually agreed at the April Audit Committee meeting for the year ahead. The internal audit plans are prepared taking into account the principal risks across the Group with input from management and the Audit Committee. The internal audit plan is designed each year to test the robustness of financial and operational controls and to determine whether operating procedures are designed and operating effectively. The Audit Committee considers the alignment of the internal audit plan with the principal risks faced by the Group as part of its approval process. The Audit Committee approved the 2022/23 internal audit plan in April 2022, having considered the audit priorities. The Audit Committee Chair receives and reviews all reports from the internal audit department detailing its material findings from testing performed and any recommendations for improvement. The Audit Committee receives each audit report with a summary at each meeting. The internal audit team tracks and reports on the progress against the audit plan and the implementation of action plans agreed with management. Once closed, the action plans agreed with management can be reviewed to determine whether any new controls and procedures have been implemented effectively. The Audit Committee considered the effectiveness of the internal audit department by considering; scope, resources and access to information as laid out in the internal audit charter; the reporting line of internal audit; the annual internal audit work plan; and the results of the work of internal audit. The Audit Committee concluded that the internal audit function operated effectively during the year. Capital and constitutional disclosures Information on the Company’s share capital and constitution required to be included in this Corporate Governance statement is contained in the Directors’ Report on pages [xx] to [xx] Such information is incorporated into this Corporate Governance statement by reference and is deemed to be part of it. The AGM provides an opportunity for the Company to engage with shareholders and for the Board to provide an account of the progress made by the business during the year, along with a synopsis of current issues facing the business. Shareholders can also submit any questions to the Board at any time of the year via the General Counsel and Company Secretary at cosec@currys. co.uk. We look forward to receiving your feedback and questions. Further financial and business information is available on the Group’s corporate website, www.currysplc.com. Lord Livingston of Parkhead Chair of the Board 6 July 2022 92 Currys plc Annual Report & Accounts 2021/22 2021/22 HIGHLIGHTS • Consideration of accounting and management judgements • Consideration of the assurance process for ESG data disclosures • Business deep dives including IT General controls, information security, data and internal controls in Nordics and Greece • Consideration of the continuing implications of the Covid-19 pandemic and challenging trading environment Chair’s statement I am pleased to present the Audit Committee (the ‘Committee’) report for the year ended 30 April 2022. This report describes how the Committee has carried out its duties to provide independent scrutiny of the Group’s financial reporting, risk management and internal control systems during the year, in order to determine whether these remain effective and appropriate. During the year, I met regularly with the Group Chief Financial Officer, the Chief Information Security Officer and the Group Director of Internal Audit between scheduled Committee meetings and in the absence of management to discuss their reports as well as any relevant issues. The other Committee members also frequently contacted members of management directly when they had questions on Committee papers received. I met regularly with members of the Deloitte LLP audit team as part of the ongoing review of their effectiveness. [I met with Deloitte LLP’s Head of Audit Quality and Risk, UK to discuss Deloitte’s approach to audit quality and assurance in connection with the audit of the Group]. I have also met with members of the KPMG LLP audit team as they have commenced their preparation to take over as external Auditor for the 2022/23 financial year. This year, the Committee has considered accounting and management judgements and particularly in respect of the continuing implications of Covid-19 and the challenging external trading environment. [The Committee has received assurance on the process for capturing ESG metrics as the Group’s disclosures are enhanced in this area.] Oversight of information security and cyber security programmes have been a key area of focus for the Committee this year. An update on Cyber has been provided at each scheduled quarterly Committee meeting. Data management and regulatory compliance continue to be important areas of Committee focus in addition to accounting matters and other duties. The Committee continues to have oversight across the international footprint of the Group. There have not been any significant changes to the responsibilities and role of the Committee during this financial year. The Committee continues to monitor with interest the external market reforms designed to enhance the quality of audits and anticipates that there will be an evolution of the duties of audit committees. The Committee considered the requirements arising from the Companies (Miscellaneous Reporting) Regulations 2018 and the 2018 UK Corporate Governance Code as part of the process to review the non-financial information included in this Annual Report and Accounts, including in particular the section 172(1) statement on pages [XX] and [XX]. Number of meetings 6 The biographical details for each Committee member are available on pages [XX] and [XX]. Audit Committee topics coverage 2021/22 (1) Fiona was absent from two Committee meetings during the year due to illness. (2) Gerry was appointed as Acting Committee Chair for two meetings during the year in Fiona’s absence. Bribery and Corruption: 1 Data protection: 1 Compliance: 5 Information and Cyber security: 5 www.currysplc.com Committee Terms of Reference last approved: 18 January 2022 and available on www.currysplc.com FURTHER INFORMATION Committee members Meeting Attendance Fiona McBain (Chair) 4/6 (1) Eileen Burbidge 6/6 Gerry Murphy 6/6 (2) Internal Controls: 4 IT General Controls: 5 Risk Review: 4 Whistleblowing: 5 Audit Committee Report 93 Governance Financial Statements Investor information Strategic Report Meetings and membership The Committee met six times during the period under review. There were five scheduled meetings. One additional Committee meeting was arranged with management during the year to enable an additional detailed discussion on the accounting judgements for the Annual Report and Accounts. Since the year end, there has been [two] further Committee meetings. The Chair of the Board, Group Chief Executive, Group Chief Financial Officer, Group Financial Controller, Group Director of Internal Audit, General Counsel and Company Secretary and representatives from Deloitte LLP, the external Auditor, have a standing invite from the Committee Chair to join all Committee meetings. Other members of senior management attend Committee meetings by invitation including team members with responsibility for Information Security and Data Management, those with responsibility for internal controls including from the International businesses and the Director of Group Risk and Insurance. The Committee’s deliberations are reported by its Chair at the next Board meeting and the minutes of each meeting are circulated to all members of the Board. There have not been any changes to the membership of the Committee during the financial year. Gerry Murphy was appointed as Acting Committee Chair for two meetings. In compliance with the Code, the Committee continues to consist exclusively of independent non-executive directors. The Board continues to be satisfied that the Chair of the Committee, a member of the Institute of Chartered Accountants in England and Wales, and Gerry Murphy, also a member of the Institute of Chartered Accountants in England and Wales, meet the requirement for recent and relevant financial experience. The Committee, as a whole, has competence relevant to the sector in which the Company operates. The biographical details outlining the relevant experience of the Committee members can be found on pages [XX] and [XX]. The Company Secretary, or their nominee, acts as Secretary to the Committee and attends all meetings. The Committee’s deliberations are reported by its Chair at the subsequent Board meeting and the minutes of each meeting are circulated to all members of the Board following approval. The Committee members meet without management present before and after each Committee meeting. The Group Director of Internal Audit and representatives of Deloitte LLP are invited to these private discussions periodically to allow discussion of matters which they may wish to raise in the absence of management. In undertaking its duties, the Committee has access to the services of the Group Director of Internal Audit, the Group Chief Financial Officer, the General Counsel and Company Secretary and their respective teams, as well as external professional advice as necessary. The Board makes funds available to the Committee to enable it to take independent legal, accounting or other advice when the Committee believes it necessary to do so. Looking ahead Some aspects of the business transformation of the Group were delayed by the impacts of the Covid-19 pandemic. The Covid-19 pandemic has also had extensive impact on the Group’s operations by causing fundamental changes to current and most likely future customer behaviours and the risks to which companies are exposed. The Committee will continue to keep those considerations and risks that fall within the Committee’s remit under review. The Committee will continue to support the business transformation work by reviewing and challenging the governance, risk and control environments relating to strategic plans. The Committee will continue to receive presentations from management on the challenges faced by the business and the operation of internal controls. The Committee will also continue to monitor the operation of the ‘three lines of defence’, as well as the evolving enterprise risk landscape and regulatory environment. Responsibilities The Committee assists the Board in fulfilling its oversight responsibilities by acting independently from the executive directors. There is an annual schedule of items which are allocated to the meetings during the year to monitor that the Committee covers fully those items within its Terms of Reference. These items are supplemented throughout the year as key matters arise. Key matters considered The principal activities of the Committee during 2021/22 included: • considering significant accounting and reporting judgements, the appropriateness of taxation disclosures and the appropriateness of the Group’s going concern position and longer-term viability statement; • considering and recommending that the Annual Report and Accounts (‘ARA’) 2021/22, when taken as a whole, are fair, balanced and understandable; • reviewing the interim results on December 2021; • considering the presentation, fairness, and balance of the Group’s alternative performance measures (APMs); • considering the implications of the Covid-19 outbreak relevant to the remit of the Committee; • reviewing the Group Risk Register and considering the effectiveness of the risk management system and internal controls, operated by management; • considering updates on IT General Controls, Information Security, IT infrastructure and Data Management; • providing oversight of the businesses regulated by the Financial Conduct Authority (‘FCA’) and receiving reports from the Head of Compliance; • approving the internal audit annual plan, considering internal audit reports and management actions, and monitoring the effectiveness of internal audit in line with the approved internal audit charter; • considering the external audit plan, audit reports and updates from Deloitte LLP; 94 Currys plc Annual Report & Accounts 2021/22 Audit Committee Report continued Principal Duties of the Committee Accounting and financial reporting matters • monitoring the integrity of the interim statement and annual report and accounts, and any formal announcements relating to the Group’s financial performance, reporting to the Board on significant reporting issues and judgement contained in them; • reviewing significant financial reporting judgements and accounting policies; • reviewing the Committee’s report outlining the Committee’s activities for inclusion in the Company’s annual report and accounts; • advising the Board on whether, as a whole, the annual report and accounts are fair, balanced and understandable; • considering the going concern statement; • considering and reviewing the statement of the Group’s viability over a specified period; • having regard to the applicable legal, regulatory and best practice requirements and standards for reporting including the UK Corporate Governance Code, the UK Financial Reporting Council, the FCA’s Disclosure and Transparency Rules and Listing Rules and the recommendations of the Taskforce on Climate-related Financial Disclosure; Risk management and internal control • reviewing the Group’s financial controls and internal control effectiveness and maturity; • reviewing the Group’s risk management systems and risk appetite; • review and approve the statements to be included in the annual report and accounts concerning internal control, risk management and the viability statement; Compliance, Conflicts, Whistleblowing and Fraud • reviewing the adequacy of the Company’s whistleblowing arrangements; • reviewing the Company’s procedures to detect and manage fraud; • review the Company’s systems and controls for the prevention of bribery; • considering the effectiveness of the Company’s compliance function; Internal audit • approving the appointment of the Group Director of Internal Audit; • monitoring and assessing the effectiveness of the Group’s internal audit function; • approving the internal audit plan; • considering the reports of work performed by internal audit and reviewing the actions taken by management to implement the recommendations of internal audit; • considering the major findings of internal investigations; External audit • considering recommendation of the external Auditor’s appointment, reappointment and removal to the shareholders in the annual general meeting and approving their remuneration; • reviewing the results and conclusions of work performed by the external Auditor; • reviewing and monitoring the relationship with the external Auditor, including their independence, objectivity, effectiveness and terms of engagement; General matters • any specific topics as defined by the Board; and • referring matters to the Board which, in its opinion, should be addressed at a meeting of the Board. • considering the effectiveness of the external Auditor and the appointment of KPMG LLP as the external Auditor from 2022/23; and • receiving presentations and challenging management on matters such as system access controls, data management, payment processes, supplier funding, regulatory compliance-related customer claims, minimum control standards assessments, whistleblowing and procedures in place to prevent bribery and corruption. Accounting and financial reporting matters The Committee is responsible for considering reports from the external Auditor and monitoring the integrity of the interim statement and annual report and accounts in conjunction with senior management. During the year ended 30 April 2022, consideration was given to the suitability and application of the Group’s accounting policies and practices, including areas where significant levels of judgement have been applied or significant items have been discussed with the external Auditor. 95 Governance Financial Statements Investor information Strategic Report Accounting and financial reporting matters Matters considered and how the Committee discharged its duties Going concern and viability statements The Committee reviewed the processes and assumptions underlying both the going concern and longer-term viability statements made on page [XX] of the ARA 2021/22. In particular, the Committee considered: • the impact in respect of uncertainties including the Covid-19 pandemic, a macroeconomic downturn and climate risk; • management’s assessment of the Group’s prospects including its current position, assessment of principal business risks and its current business model, future cash forecasts, historical cash flow forecasting accuracy, profit projections, available financing facilities, facility headroom and banking covenants; • the appropriateness of the three-year time period under assessment, noting the alignment of the period with the Group’s detailed strategic planning process, as well as the shorter-term nature of the retail market in which the Group operates; and • the robustness and severity of the stress-test scenarios with reference to the Group’s risk register, those principal risks and mitigating actions as described on pages [XX] to [XX] of the ARA 2021/22, the latest Board-approved budgets, strategic plans, and indicative headroom under the current facilities available – examples of which included the impact of regulatory, taxation or information security incidents, and reduced forecast profitability and cash flow as a result of a significant change in mobile phone consumer behaviour. The Committee concurred with management’s conclusions that the viability statement, including the three-year period of assessment, disclosed on page [XX] of the ARA 2021/22 is appropriate. The Board was advised accordingly. Fair, balanced and understandable In ensuring that the Group’s reporting is fair, balanced and understandable, the Committee reviewed the classification of items between adjusting and non-adjusting items including consideration of the £[X] million pre-tax adjusting items disclosed in note [XX] in the glossary and definitions section of the ARA 2021/22, and the tax impact thereon. The assessment considered whether items fell within the Group’s definition of adjusting items as well as the consistency of treatment of such items year on year. The Committee gave due consideration to the integrity and sufficiency of information disclosed in the ARA 2021/22 to ensure that they explain the Group’s position, performance, business model and strategy. An assessment of narrative reporting was included to ensure consistency with the financial reporting section, including appropriate disclosure of material adjusting items, and appropriate balance and prominence of statutory and non-statutory performance measures. In response to the guidelines on Alternative Performance Measures (‘APMs’) issued by the European Securities and Markets Authority (‘ESMA’), the Committee considered the use of such measures and the additional information on those APMs used by the Group is provided in the glossary on pages [XX] to [XX]. The Committee concluded that the ARA 2021/22, taken as a whole, are fair, balanced and understandable, and that the measures used and disclosures made are appropriate to provide users of the ARA 2021/22 with a meaningful assessment of the performance of the underlying operations of the Group; the Board was advised of the conclusion. Matters of significance and areas of judgement The Committee received reports and recommendations from management and the external Auditor setting out the significant accounting issues and judgements applicable to the following key areas. These were discussed and challenged, where appropriate, by the Committee. Following debate, the Committee concurred with management’s conclusions. 96 Currys plc Annual Report & Accounts 2021/22 Audit Committee Report continued Accounting and financial reporting matters Matters considered and how the Committee discharged its duties Revenue recognition The Group discloses revenue recognition in relation to network commissions as a ‘key source of estimation uncertainty’ as set out in note [XX] to the Group financial statements. The Committee reviewed management’s assessment of these policies with reference to contractual terms, the Group’s historical experience of customer behaviour, reliability of information received from MNOs, legislative changes, future expectation of consumer behaviour and changes in the trends within the mobile industry. Particular attention was paid to the consistency of application of the underlying assumptions used, significant changes in inputs to the valuation model, historical forecasting accuracy, and the network commission contract assets and receivables disclosures included in note 15 to the Group financial statements. The carrying value of ongoing network commission contract assets and receivables at the balance sheet date was [XX] million (2020/21: £239 million). Supplier funding A number of arrangements exist relating to supplier funding across the Group, including promotional support and volume rebates. The Committee has continued to challenge and debate with management its approach to its recognition and accounting treatment of supplier funding. In addition, the Committee continues to monitor the effectiveness of the controls in place to mitigate the risk of material misstatement of supplier funding recognition. Further information in relation to supplier funding can be found in note [XX] to the Group financial statements. Impairment testing of goodwill, intangible assets and store-based investments The Group has significant goodwill, intangible assets and fixed asset investments which are reviewed for impairment annually, or where there is an indicator of impairment. The Committee reviewed appropriateness and accuracy of cash flow forecasts, discount rates and long-term growth rates used in the impairment review performed at both the interim and year end dates. Specific attention was paid to cash flow forecasts in light of uncertainties such as the Covid-19 pandemic, a macroeconomic downturn, climate risk and the level of sensitivities applied by management in determining reasonably possible changes to cash flows. As part of the review of the store-based asset impairment assessment, whereby a material impairment and impairment reversal was recognised within the period, particular attention was given to the key assumptions of how customers will behave in the future, in terms of shopping in store and/or online and the implications on the impairment modelling. As a result of a number of strategic changes, specifically related to our Future Mobile Offer and the decision to close the West London head office after signing a deal with WeWork, a significant impairment charge and onerous contract costs were recognised as adjusting items. Further information can be found in note 9 to the Group financial statements. Taxation The Group operates across multiple tax jurisdictions. The complex nature of tax legislation in certain jurisdictions can necessitate the use of judgement. The Committee reviewed the judgements and assumptions concerning any significant tax exposures, including progress made on matters being discussed with tax authorities and, where applicable, advice provided by external advisors. The total provisions recognised at the balance sheet date amounted to £[X] (2020/21: £65m). The Committee also reviewed the appropriateness of the disclosures made around tax provisions, the related contingent liabilities, and the deferred tax balances. 97 Governance Financial Statements Investor information Strategic Report Risk management and internal control The Committee is responsible for reviewing the Group’s risk management and internal control systems. Details of the overall risk management and governance policies and procedures are given in the Corporate Governance Report on pages [XX] to [XX] of this ARA 2021/22. The Committee reviewed management’s assessment of risk and internal control, results of work performed by the second lines of defence and internal audit, and the results and controls observations arising from the interim review procedures and the annual audit performed by the external Auditor. The Committee also ensured that all Risk topics were covered, as defined by its Terms of Reference, with detailed reviews of risk topics scheduled throughout the year monitoring potential areas of concern. Specific matters considered by the Committee to discharge its duties are detailed below: Risk management and internal control Matters considered and how the Committee discharged its duties Bribery & corruption • The Committee reviewed the arrangements put in place to satisfy requirements to comply with regulation for anti-bribery & corruption. Data protection • The Committee reviewed data protection compliance throughout the Group, particularly in relation to the embedding of policies, procedures and processes implemented to comply with the requirements of EU General Data Protection Regulation (‘GDPR’). Compliance • The Committee reviewed the nature of financial services regulated activities across the Group’s business operations and the governance and oversight arrangements for the operation of an effective FCA compliance regime in the business. The Committee considered compliance and regulatory reports prepared by the Regulatory Compliance Committee (‘RCC’) and monitored key developments and ongoing activities for the compliance team in areas of governance, policy and compliance monitoring. Information security and IT controls framework • The Committee regularly reviews the progress of the ongoing security improvement programme and periodically considers and reviews the IT general controls (“ITGC”) framework and related improvement initiatives progressed by the management team, in order to monitor that appropriate actions are taken. • The Company is currently undergoing a large transformation programme across many areas of the business including its IT infrastructure. All transformation programmes are managed in line with the Group risk management methodology to manage the risk appropriately in order to provide reasonable reassurance against material losses. This control framework is intended to manage rather than eliminate the risk of failure and oversight of the security programme is provided by the Committee that, along with the Board, receives regular updates on the progress and maturity of our control environment. Internal controls • As per the obligations placed on the Committee under the Code, the Committee formally considered a review of the system of risk management and internal control. The Committee noted developments in the system of risk management and internal control, management plans for 2021/22 and agreed the statements contained in the ARA 2021/22. The Committee continues to review the results of Internal Audit reviews and Minimum Controls Standards assessments. Whistleblowing • The Committee reviews a summary at every meeting of all whistleblowing calls received by the Group, both through the independently operated hotline and other channels. The Committee confirmed that the calls had been appropriately dealt with (both individually and in aggregate) in accordance with the Group’s whistleblowing policy. 98 Currys plc Annual Report & Accounts 2021/22 Audit Committee Report continued Internal audit Internal audit is an independent, objective assurance function that impartially appraises the Group’s control activities. Internal audit works with management to help improve the overall control environment and assist Group management, the Committee and the Board in discharging their respective duties relating to maintaining an adequate and effective system of internal control and risk management, and safeguarding the assets, activities and interests of the Group. Internal audit Matters considered and how the Committee discharged its duties Audit reviews of significant risk areas • The Committee considered the alignment of the annual internal audit plan with the key risks of the business. • During the period, internal audits included coverage of the following significant risk areas of the business: – information security and data protection; – business transformation; – IT resilience, integrity and disaster recovery; – relationships with major suppliers; – health and safety; – business continuity; – product safety; and – financial services regulatory compliance. • The Committee considered the key trends and material findings arising from internal audit’s work and the adequacy of the agreed management actions in relation to those findings. Assurance programme • The Committee approved the annual internal audit plan and received an update relating to the execution of the annual plan at each Committee meeting. • As part of the rolling assurance programme, audits were performed over the following processes to provide assurance to the Committee that controls were operating within these areas: – general business controls relating to UK & Ireland operations including the financial services conduct risk framework, transformation project processes, Identity and access management, product safety, financial controls, customer experience processes, ESG reporting; – Nordics IT general controls, data protection, major change assurance, and product safety; and – Greek IT general controls and product safety. • The Committee considered the actions taken by management in relation to the audit findings. • The Committee considered the results from these audits during its assessment of the effectiveness of the system of internal control operated by management. The Committee concluded that the system of internal control was appropriately monitored and managed. Effectiveness of internal audit and adequacy of its resources • The Committee approved the internal audit charter, concluding the role and mandate were appropriate to the current needs of the organisation. • The Committee monitored the work of internal audit and formally reviewed the effectiveness of internal audit and the adequacy of its resources, considering: – scope, resources and access to information as laid out in the internal audit charter; – the reporting line of internal audit; – the annual internal audit work plan; and – the results of the work of internal audit. • The Committee concluded that the internal audit department had in all respects been effective during the period under review and performed its duties in accordance with its agreed charter. 99 Governance Financial Statements Investor information Strategic Report External audit The external Auditor is appointed by shareholders to provide an opinion on the annual report and accounts and certain disclosures prepared by Group management. Deloitte LLP acted as the external Auditor to the Group throughout the year. The Committee is responsible for oversight of the external Auditor, including approving the annual audit plan and all associated audit fees. The key matters in relation to external audit that were considered by the Committee were: External audit Matters considered and how the Committee discharged its duties Effectiveness of the external Auditor • The Committee reviewed and agreed the annual audit plan, specifically considering the appropriateness of the key risks identified and proposed audit work, the scope of the audit and materiality levels applied which are detailed in the Independent Auditor’s report on pages [XX] to [XX]. • As part of the reporting of the half year and full year results, the Committee reviewed the reports presented by Deloitte LLP in assessing the Group’s significant accounting judgements and estimates, and considered the audit work undertaken, level of challenge and quality of reporting. • Following the 2020/21 year end, feedback on the effectiveness of the audit process in addressing areas of key audit risk was obtained from members of the Committee and regular attendees, members of the finance team and senior management within the businesses via a specifically designed questionnaire. The responses were then considered by the Committee in conjunction with the outputs received and responsiveness of the Auditor during the audit process. The results showed a favourable view of the audit process and of Deloitte LLP as the external Auditor, specifically in relation to the consistent performance noted for quality of audit delivery, level of challenge, integrity and service of the team, the constructive relationship and the effectiveness of the communication. • Following due consideration of the above, the Committee continues to be satisfied with the quality and effectiveness of the external audit. Auditor independence • The Committee considered the external Auditor’s assessment of and declaration of independence presented in the annual audit plan and final audit report, and the safeguards in place to make such declarations. • The Committee considered the annual audit fee and fees for non-audit services, with due regard to the balance between audit and non-audit fees and the nature of non-audit fees undertaken in accordance with the policy as set out below. • The Committee reviewed and approved the Group policy on the employment of former employees of the external Auditor in March 2022. 100 Currys plc Annual Report & Accounts 2021/22 Audit Committee Report continued Policy on provision of non-audit services provided by the external Auditor Under the Group’s policy on Auditor independence, the Auditor may only provide services which include: a) audit services comprising issuing audit opinions on the Group’s consolidated financial statements and on the statutory financial statements of subsidiaries and joint ventures; b) audit-related services comprising review of the Group’s consolidated interim financial statements, and opinions / audit reports on information provided by the Group upon request from a third party such as prospectuses, comfort letters and rent certificates, etc; and c) services otherwise required of the Auditor by local law or regulation. Any exceptions are subject to pre-approval by the Group Chief Financial Officer, and such permission is only granted in exceptional circumstances. Where the non-audit assignment is expected to generate fees of over £100,000, prior approval must be obtained from the Committee. During the period under review, the non-audit services performed by the external Auditor primarily arose from the interim financial review procedures and the requirement in Greek law for the external auditor of the company to provide tax compliance services. The Committee has reviewed the services performed by the external Auditor during the year and is satisfied that these services did not prejudice the external Auditor’s independence and that it was appropriate for them to perform these services. The level of non-audit fees paid to the external Auditor, which was approved by the Committee, is set out in note [XX] to the Group financial statements and amounted to £[XX] (2020/21: £0.5m) compared with £[XX]m (2020/21: £1.6m) of audit fees. The non-audit fees as a percentage of audit fees were [XX]% (2020/21: 31.3%), which reflects the restrictive policy governing the use of Deloitte LLP for non-audit services. External Auditor Deloitte LLP has been the Company’s external Auditor since the Company was formed on 7 August 2014 by the merger of Carphone Warehouse and Dixons Retail. Deloitte LLP was the external Auditor of both Carphone Warehouse and Dixons Retail prior to 2014. In accordance with the Competition and Markets Authority (‘CMA’) Statutory Audit Services Order, which is designed to align with provisions of the EU Regulations on external audit tender and rotation, and current guidance, the last period that Deloitte LLP could have remained as external Auditor was the 2022/23 financial year. At the end of the 2020/21 financial year, lead audit partner Stephen Griggs (appointed from the 2016/17 audit) stepped down in accordance with the Auditing Practices Board Ethical Standards requirement to rotate the lead audit partner every five years. David Griffin, formerly the Key Audit Partner for UK and Group, moved into the role of lead audit partner for the 2021/22 financial year. During 2020/21, the Committee led a comprehensive tender process to select a new external Auditor for the 2022/23 financial year. A full description of the process is available in the annual report and accounts 2020/21. KPMG LLP will be appointed as the Auditor of the Company for the financial year 2022/23 subject to shareholder approval to be sought at the Company’s Annual General Meeting in September 2022. Where necessary, any non-audit services provided by KPMG to the Company ceased by 1 May 2021 in order to meet specified ‘cooling-in’ requirements in the year before appointment. Consideration of external Auditor appointment and independence The Committee considers the appropriateness of the appointment of the external Auditor each year, including the rotation of the audit partner. The Committee oversaw a formal and comprehensive tender process for the appointment of the external Auditor during 2020/21. The Committee’s recommendation, that KPMG LLP be appointed as external Auditor of the Company for the 2022/23 financial year was accepted and endorsed by the Board. Accordingly, shareholder approval will be sought at the Annual General Meeting in September 2022 to confirm the appointment of KPMG LLP as external Auditor of the Company. Fiona McBain Chair of the Audit Committee 6 July 2022 SIGNATURE TO BE SUPPLIED - SH 101 Governance Financial Statements Investor information Strategic Report Disclosure Committee Report 2021/22 HIGHLIGHTS • Assessment of whether the Company was in possession of inside information • Preliminary results for the financial year ended 1 May 2021 • Trading updates including announcement of a £75m share buyback • Interim results for the half year ended 30 October 2021 Chair’s statement I am pleased to present the Disclosure Committee (the ‘Committee’) Report for the year ended 30 April 2022. The principal role of the Committee is to ensure that adequate procedures, systems and controls are maintained to enable the Company to fully meet its legal and regulatory obligations regarding the timely and accurate identification and disclosure of all price sensitive information. The Committee is comprised of the Group Chief Financial Officer (Committee Chair), the Group Chief Executive and the General Counsel and Company Secretary. The Chair of the Board and the Senior Independent Director receive notices and papers for all meetings and are able to act as ‘alternates’ to the Committee members in the event that the quorum of three members cannot be met. This has not been necessary during the year and all Committee members have been able to attend all meetings. The Company Secretary, or their nominee, acts as Secretary to the Committee. The Committee’s deliberations are reported by its Chair at the next Board meeting and the minutes of each meeting are circulated to all members of the Board. The Committee was considered as part of the externally facilitated board and committee effectiveness review that was carried out this year and this review concluded that the Committee discharges its duties effectively. Meetings There were five Committee meetings during 2021/22. Since the financial year end, there has been one further meeting. Committee meetings are scheduled in advance of preliminary and interim results announcements and in advance of scheduled trading updates. Meetings can be convened by the Company Secretary as requested by the Committee Chair at other times as required. The Committee receives input as appropriate from the other directors, the Company’s brokers and senior management and invites a member of the Investor Relations team to attend all meetings. Responsibilities The principal duties of the Disclosure Committee are to: • establish and maintain adequate procedures, policies, systems and controls to enable the Company to fully comply with its legal and regulatory obligations regarding the timely and accurate identification and disclosure of all price sensitive information; • determine whether information is inside information and if it requires immediate disclosure; • keep under review the adequacy of the Disclosure and Communications Policies, implement and monitor compliance; • monitor communications received from any regulatory body in relation to the conduct of the Group, and review any proposed responses; • consider generally the requirement for announcements, including in relation to the delayed disclosure of inside information, substantive market rumours, and leaks of inside information; • consider and give final approval for trading statements and / or results to be released in order to meet legal and regulatory requirements; and • review the content of all material regulatory announcements, transactional shareholder circulars, prospectuses, and any other documents issued by the Company, and ensure that these comply with all applicable requirements. Key matters considered During the year ended 30 April 2022, the Committee met to consider the following key matters: • assessments as to whether the Company was in possession of inside information; • the preliminary results for the financial year ended 1 May 2021; • a trading update including the announcement of a £75m Share Buyback programme; • the interim results for the 26 weeks ended 30 October 2021; and • the Peak trading update for the 10 weeks ended 8 January 2022. Bruce Marsh Chair of the Disclosure Committee 6 July 2022 Number of meetings 5 (1) Bruce Marsh joined the Board and the Committee during the year on 12 July 2021 and has attended all Committee meetings held since his appointment. Jonny Mason stepped down from the Board and the Committee on 9 July 2021 and attended the two Committee meetings held during the financial year prior to this date. Committee members Meeting Attendance Bruce Marsh (Chair) 3/3 (1) Alex Baldock 5/5 Nigel Paterson 5/5 Alternate members: Ian Livingston, Chair of the Board and Tony DeNunzio, Senior Independent Director The biographical details for each Committee member are available on pages [xx] and [xx]. FURTHER INFORMATION SIGNATURE TO BE SUPPLIED - CD 102 Currys plc Annual Report & Accounts 2021/22 Nominations Committee Report 2021/22 HIGHLIGHTS • Considered succession planning for key Board roles • led the process to recruit a new Chair and recommended the appointment of Ian Dyson to the Board • Adopted a new Equality, Inclusion, & Diversity: Dignity at Work Policy Chair’s statement I am pleased to present the Nominations Committee (the ‘Committee’) report for the year ended 30 April 2022. The Committee has continued to oversee the structure, size and composition of the Board during the year, having regard to the collective skills, knowledge, experience and diversity in all its forms. This report sets out the key responsibilities of the Nominations Committee and describes how it has discharged its duties. The Committee received an update on the external governance and best practice standards that relate to its remit in November 2021. These requirements were discussed, and the Committee concluded that the Board’s size and composition remained appropriate to meet the current leadership needs of the Group. It was agreed that temporary increases to the size of the Board might help manage sucession planning. The Committee considered the time commitments of each director, director independence, director tenure, the diversity of the Board, the collective skills and experience of the Board, directors’ external appointments and potential conflicts of interests. The Board currently meets the voluntary diversity targets in both the Hampton Alexander Review and Parker Review although is not complacent about diversity and will seek opportunities to further increase diversity on the Board. An Inclusion and Diversity forum is in place to focus on increasing the diversity of the workforce and more details about this forum are available on page [xx]. All directors receive updates on colleague issues including diversity at Board meetings. Although succession planning and the oversight of the development of a diverse pipeline for succession fall within the remit of the Committee, these discussions have also taken place at Board meetings during 2021/22. The Board received a comprehensive People Plan update in April 2022 and this included talent and succession planning. Enhancing diversity and overseeing the succession planning process for key roles remains a priority for the whole Board. As delivering the colleague agenda is a critical component of the successful business transformation of the Group, this work has been led by the Committee but has warranted further input from all directors. Meetings and membership The Committee meets as and when required and at least twice a year. The Committee held two meetings during the financial year and a further meeting in May 2022. The majority of the members of the Committee are independent non-executive directors as required by the Code. Other members of the Board or senior management can attend meetings at the invitation of the Committee Chair. The Company Secretary, or their nominee, acts as Secretary to the Committee. The Committee’s deliberations are reported by its Chair at the next Board meeting and the minutes of each meeting are circulated to all members of the Board. Responsibilities The principal duties of the Committee are to: • review the structure, size and composition of the Board, and recommend changes to the Board as necessary; • give full consideration to orderly succession planning for both the Board and senior management positions and oversee the development of a diverse pipeline for succession; • identify and nominate candidates to fill vacancies on the Board when they arise; • carry out a formal, rigorous and transparent selection process of candidates, giving due regard to promoting the benefits of diversity on the Board and senior management team, including gender, social and ethnic backgrounds, and cognitive and personal strengths; and • review all the recommendations from the annual board effectiveness process that relate to Board composition, diversity or how effectively board members work together. Number of meetings 2 Committee members Meeting Attendance Ian Livingston (Chair) 2/2 Tony DeNunzio 2/2 Andrea Gisle Joosen 2/2 The biographical details for each Committee member are available on pages [xx] and [xx]. www.currys.co.uk Committee Terms of Reference last approved: 18 January 2022 and available on www.currysplc.com FURTHER INFORMATION 103 Governance Financial Statements Investor information Strategic Report Key matters considered The principal activities of the Committee during 2021/22 included the: • evaluation of the size, composition and structure of the Board and its committees; • oversight of the process to recruit a new Chair of the Board, consideration of candidates and recommendation of the appointment of Ian Dyson; • consideration of the independence and time commitments of the directors; • evaluation of director effectiveness during the year and approval that each director be recommended for re-election at the 2022 AGM; • approval of the Company’s Equality, Inclusion, & Diversity: Dignity at Work Policy; • approval of the director external appointments policy; • approval of Committee’s Terms of Reference; • approval of the role descriptions of the Chair of the Board, Senior Independent Director and the Group Chief Executive; and • consideration of the external corporate governance developments relating to the remit of the Committee. Board evaluation An externally facilitated Board effectiveness review was carried out in 2021/22 by Clare Chalmers Limited. The evaluation process concluded that overall, the Committee is operating effectively. Further details on the outcomes of the Board effectiveness review are available on page [xx]. Appointments to the Board The Committee has a formal, rigorous and transparent procedure for the appointment of new directors. Appointments are made to the Board based on objective criteria and with due regard to the benefits of diversity and the leadership needs of the Company. External search consultancies are used when recruiting directors. The Committee uses a skills matrix tool when assessing the skills and capabilities required in a new director, taking into account the existing experience and expertise on the Board. The Committee develops candidate profiles describing the skills, knowledge and experience required for each new role. Bruce Marsh joined the Board in July 2021. During the year the Committee led the process to appoint a new Chair of the Board. Ian Dyson will join the Board on 1 September 2022 and become Chair of the Board and Nominations Committee on 8 September 2022. The process to recruit a new Chair was led by the Senior Independent Director and executive search firm Korn Ferry supported the Committee. The Committee agreed a role profile taking into account the Board skills matrix and the skills and capabilities needed to Chair a substantial consumer business operating in a number of countries. The Senior Independent Director discussed the draft role profile with each of the other directors. The process included consideration of a long list of over 60 candidates. Members of the Committee (excluding the Chair) participated in over 30 candidate interviews as well as discussions with Korn Ferry. Five candidates were shortlisted, and this group included candidates with diverse characteristics. Ian Dyson was the candidate who best met the criteria that the Company had set for the new Chair. The Committee recommended the appointment of Ian Dyson to the Board. Succession planning The Group requires a talented Board with appropriate experience, expertise and diversity. The Committee monitors the size and composition of the Board, leads the recruitment of new directors and proposes any suitable candidates to the Board for approval. The Committee continue to be satisfied that the current Board size of eight directors is appropriate and effective for the leadership of the Group although increasing to a Board size of nine or ten temporarily might be appropriate to enable succession planning for key Board roles. During the year the Committee considered Board tenure and, in particular, that two non-executive directors will reach a nine-year tenure in August 2023 and the Chair of the Board and Senior Independent Director both reach a nine-year tenure in December 2024. The Committee agreed to initiate a search for a successor to the Chair of the Board role and this search was completed in May 2022. The Committee considered it prudent to start this search early to allow sufficient time to identify the most appropriate candidate and for the orderly management of the succession of other Board roles. The new Chair of the Board will participate in the recruitment of new non-executive directors. The Executive Committee carry out a detailed talent review process across every area of the business. Succession plans are in place for every member of the Executive Committee. The full Board including the Committee members receive regular updates on talent and succession from the Chief People Officer. The Chair of the Board who is also the Committee Chair receives regular updates during the year directly from the People team on key appointments and initiatives. The Committee, together with the Board, is focused on ensuring that credible succession plans are maintained and that there is a talent pipeline for future business leaders. 104 Currys plc Annual Report & Accounts 2021/22 Diversity The Company is committed to developing a diverse workforce and equal opportunities for all. The Board recognises that enhancing diversity in all its forms is a critical part of having an effective and engaged workforce which in turn supports the long-term sustainable success of the business. The Board meets the voluntary targets recommended by the Hampton-Alexander Review and the Parker Review. At the end of the financial year 37.5% of the Board, and 25% of the Executive Committee, are female. One member of the Board meets the criteria as set out in the Parker Review. Whilst the Board is strongly supportive of enhancing all forms of diversity across the Board and wider workforce as a matter of priority, the Board does not currently set specific targets on gender balance or ethnicity. The Committee and the Board continue to be very mindful of the benefits of greater diversity of gender, social and ethnic backgrounds, and cognitive and personal strengths, in all appointments. The Board will actively seek to enhance diversity on the Board during 2022/23 by taking steps to increase the number of diverse candidates to be included in the process. An Inclusion and Diversity Forum is in place to seek to enhance diversity across the wider workforce and further information on this forum and the activities the Group is carrying out in order to enhance diversity is available on page [xx]. In accordance with DTR 7.2.8A, the Committee confirms that a Diversity Policy is in place (the Equality, Inclusion, & Diversity: Dignity at Work Policy). This was last reviewed and approved by the Committee in November 2021. The Board no longer has a separate policy that only applies to the Board but has approved the adoption of the Group policy to include all Board and senior management appointments. The policy is in place to encourage diversity across the Group and to ensure an inclusive culture is in place. The Board considers the celebration of divesity and an inclusive culture to be a competitive differentiator for the business. The policy establishes clear values and behavior standards for colleagues and confirms that any form of bullying, harassment or discrimination is unacceptable. The policy does not include any quotas and emphasises the need for appointments to be made on the basis of merit. In performing its annual review, the Board also looked at other aspects of diversity relevant to the Group. With a large proportion of the business in the Nordics, we have a Swedish Non-Executive Director on the Board to enhance the Board’s knowledge of these international markets. This Non-Executive Director also attends the Nordics colleague forum to support colleague listening and engagement. More information on this forum is included in the Strategic Report on page [xx]. Election and re-election At the forthcoming AGM, all directors as listed on pages [xx] and [xx] will present themselves for re-election other than I, Ian Livingston, as I will step down from the Board on the date of the AGM. Ian Dyson will present himself for election and his biographical information is available in the Notice of AGM. Each of the directors submitting themselves for election or re-election is being unanimously recommended by the other members of the Board due to their experience, knowledge, wider management and industry experience, continued effectiveness and commitment to their role. More information on the individual contributions of each director is available within their biographies. Lord Livingston of Parkhead Chair of the Board 6 July 2022 Nominations Committee Report continued 105 Governance Financial Statements Investor information Strategic Report 2021/22 HIGHLIGHTS • Agreed principles and approach for a new Group ESG Strategy • Integrated the International businesses into ESG Committee • Completed a review of Committee effectiveness and implemented outcomes Chair’s statement I am pleased to present the first ESG Committee (the ‘Committee’) Report for the year ended 30 April 2022. The principal role of the Committee is to oversee the development of the Group’s Social Purpose Strategy and approve the Environmental, Social and Governance objectives required to deliver it and the appropriate key performance indicators to monitor progress. The Committee is comprised of the General Counsel and Company Secretary (Committee Chair), a Non-Executive Director of Currys plc, the Chief People, Communications and Sustainability Officer and the Director of Sustainable Business and ESG. The Company Secretary, or their nominee, acts as Secretary to the Committee. The Committee reports into the Executive Committee and provides a verbal update after each meeting. Key activities of the Committee are also included in the CEO report to the Currys plc Board as appropriate. The Board receives a comprehensive update on ESG at least once a year and received two updates during 2021/22 on both the new Group ESG strategy and action on climate change. A Committee effectiveness review was completed during the year. The review found that the Committee is operating effectively but provided useful suggestions to further enhance the operation of the Committee. Suggestions included ensuring that additional teams are represented at Committee meetings and adjusting the allocation of agenda time to increase the focus on Nordics and Greek businesses. The Committee has considered and implemented these suggestions. Meetings There were four Committee scheduled meetings during 2021/22. Meetings are convened by the Company Secretary as required. Representatives from the Sustainable Business, Risk, Investor Relations, People, Health and Safety, Supply Chain and Marketing teams are standing attendees at Committee meetings and others are invited to attend at the discretion of the Committee Chair. Responsibilities The principal duties of the Committee are to: • Oversee the development of the Group’s Social Purpose Strategy, ensure it remains fit for purpose and aligned to the Group’s vision; We Help Everyone Enjoy Amazing Technology and recommend it to the Board for approval; • identify and approve the Environmental, Social and Governance objectives and KPIs required to deliver the Group’s Social Purpose Strategy and review reporting against these at Committee meetings; • review the ESG risk profile at each meeting to ensure that the risks to achieving the objectives are being appropriately managed; • monitor external developments in respect of Environmental, Social and Governance issues and consider any implications for the Group; • develop and maintain the Group’s policies and practices relating to Environmental, Social and Governance matters to ensure that they remain effective, compliant with legal and regulatory requirements and industry standards and recommend these to the Board for approval; • To receive specific reports from Group Responsible Sourcing over the operation of processes and controls in place to ensure compliance with requirements of Modern Slavery regulation; • oversee the Group’s community, charitable and environmental partnerships; • to review and approve all Environmental, Social and Governance content to be published in the Company’s annual report and accounts; and • make any recommendations to the Executive Committee on any area within its remit. Key matters considered During the year ended 30 April 2022, the Committee considered the following key matters: • ESG strategic approach; • ESG emissions and e-waste bonus scorecard metrics; • ESG risk; • ESG communications to customers; • ESG disclosures in the 2021/22 Annual Report and Accounts; • responsible sourcing including the use of packaging; • received an ISO50001 Energy Management System management review for UK&I; • the circular economy and Currys next steps on Giving Technology Longer Life; • community and charitable partnerships and next steps for helping eradicate digital poverty; • colleague well-being; • inclusion and diversity; • ESG horizon scanning and external developments; • Internal Audit management systems, measurements and targets; • Review of Committee Terms of Reference; and • ESG policies review. Nigel Paterson Chair of the ESG Committee 6 July 2022 Number of meetings 4 (1) Paula Coughlan joined the ESG Committee as a member on 31 January 2022. (2) Assad Malic stepped down as a member on 31 January 2022. Committee members Meeting Attendance Nigel Paterson (Chair) 4/4 Andrea Gisle Joosen 4/4 Paula Coughlan 1/1 (1) Moira Thomas 4/4 Assad Malic 3/3 (2) Environmental, Social and Governance (ESG) Committee Report 142 Currys plc Annual Report & Accounts 2021/22 Statement of Directors Responsibilities Company law requires the directors to prepare financial statements for each financial year. Under that law, the directors are required to prepare the consolidated financial statements in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and IFRS adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union. The consolidated financial statements are also prepared in accordance with IFRS as issued by the International Accounting Standards Board. The directors have also elected to prepare the Company financial statements in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework. Under company law, the directors must not approve the accounts unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Company and the Group for that period. In preparing the Company financial statements, the directors are required to: • select suitable accounting policies and then apply them consistently; • make judgements and accounting estimates that are reasonable and prudent; • state whether Financial Reporting Standard 101 ‘Reduced Disclosure Framework’ has been followed, subject to any material departures disclosed and explained in the financial statements; and • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business. In preparing the consolidated financial statements, IAS 1: ‘Presentation of Financial Statements’ requires that directors: • properly select and apply accounting policies; • present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information; • provide additional disclosures when compliance with the specific requirements in IFRS are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Group’s financial position and financial performance; and • make an assessment of the Group’s ability to continue as a going concern. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Group’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. Responsibility Statement We confirm that to the best of our knowledge: • the financial statements, prepared in accordance with the relevant financial reporting framework, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; • the Strategic Report includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face; and • the Annual Report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Group and the Company’s performance, business model and strategy. By Order of the Board Alex Baldock Group Chief Executive 6 July 2022 Bruce Marsh Group Chief Financial Officer 6 July 2022 The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations. SIGNATURE TO BE SUPPLIED - CD 143 Governance Financial Statements Investor information Strategic Report Independent Auditor’s Report Report on the audit of the financial statements 1. Opinion In our opinion: • the financial statements of Dixons Carphone plc (the ‘Company’ or the ‘parent company’) and its subsidiaries (the ‘Group’) give a true and fair view of the state of the Group’s and of the parent company’s affairs as at 1 May 2021 and of the Group’s profit for the year then ended; • the Group financial statements have been properly prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and International Financial Reporting Standards (IFRSs) as adopted by the European Union; • the parent company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice, including Financial Reporting Standard 101 ‘Reduced Disclosure Framework’; and • the financial statements have been prepared in accordance with the requirements of the Companies Act 2006. We have audited the financial statements which comprise: • the consolidated income statement; • the consolidated statement of comprehensive income; • the consolidated and parent company balance sheets; • the consolidated and parent company statements of changes in equity; • the consolidated cash flow statement; and • the related notes 1 to 34 of the Group financial statements and notes C1 to C10 of the parent company financial statements The financial reporting framework that has been applied in the preparation of the Group financial statements is applicable law, international accounting standards in conformity with the requirements of the Companies Act 2006 and IFRSs as adopted by the European Union. The financial reporting framework that has been applied in the preparation of the parent company financial statements is applicable law and United Kingdom Accounting Standards, including FRS 101 ‘Reduced Disclosure Framework’ (United Kingdom Generally Accepted Accounting Practice). 2. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Group and the parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. The non-audit services provided to the Group and Company for the year are disclosed in note 3 to the financial statements. We confirm that the non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or the Company. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 144 Currys plc Annual Report & Accounts 2021/22 3. Summary of our audit approach Key audit matters The key audit matters that we identified in the current year were: • Revenue recognition – valuation of UK network receivables; • Impairment of UK & Ireland Electricals goodwill and store assets; and • Impairment of UK & Ireland Electricals assets in the course of construction. Materiality The materiality that we used for the Group financial statements was £10.5m. Consistent with the prior year, this was determined on the basis of considering a number of different metrics used by investors and other users of the financial statements. These included adjusted profit before tax, net assets and revenue. For further details refer to section 6 of this report. Scoping Our full scope audit procedures provided coverage at the Group’s key locations, being the retail operations in the UK and Nordics, representing 94% of the Group’s revenue. Significant changes in our approach Last year we included key audit matters in respect of Carphone Warehouse UK restructuring, going concern basis of accounting and tax provisioning, which are not considered to be key audit matters for this year. Carphone Warehouse UK restructuring was a one off event during 2019/20 and thus has no impact in 2020/21 and has been excluded from the key audit matters. Going concern was considered as a key audit matter in the previous year due to the increase in the level of audit effort, judgement and complexity as a result of the Covid-19 pandemic. The improved trading performance, despite Covid-19 restrictions in place for a sustained period, and the refinancing activities undertaken in April 2021, reduced the level of judgement in the current period. As such, going concern is no longer considered a key audit matter. There have been no significant developments during the period in respect of tax provisioning for the two largest exposures in the UK, and as such the extent of our audit procedures in respect of this audit matter has reduced compared to the previous period. We therefore have not identified this as a key audit matter in the current period. We have refined our impairment key audit matter to no longer include Company investments and central assets. Whilst there remains potential exposure, as indicated by the premium of net assets above market capitalisation, there is a significant level of headroom available at the combined cash generating unit level based on management’s forecasts. We included a new key audit matter in respect of impairment of UK assets in the course of construction. This reflects the increased level of management judgement required as a result of recent changes in business strategy in light of the Covid-19 pandemic. Independent Auditor’s Report continued 145 Governance Financial Statements Investor information Strategic Report 4. Conclusions relating to going concern In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors’ assessment of the Group’s and parent company’s ability to continue to adopt the going concern basis of accounting included: • Consideration of the nature of the Group, its business model and related risks including where relevant the impact of both the Covid-19 pandemic and Brexit, the requirements of the applicable financial reporting framework and the system of internal control; • Evaluation of the directors’ assessment of the Group’s ability to continue as a going concern, including challenging the underlying data and key assumptions used, such as forecast revenue and operating costs, against historical and forward looking data; • Evaluation of the directors’ plans for future actions in relation to their going concern assessment; • Evaluation of mitigations in place and further mitigations available to the Group beyond those included within the forecast. This included challenging the extent to which these mitigations are within the control of management in the context of historical performance and costs included in management’s underlying forecasts; • Assessment of the Group’s financing agreements, covenant calculations and forecast covenant compliance over the relevant outlook period; and • Assessment of the appropriateness of the going concern disclosures in the financial statements. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group’s and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. In relation to the reporting on how the Group has applied the UK Corporate Governance Code, we have nothing material to add or draw attention to in relation to the directors’ statement in the financial statements about whether the directors considered it appropriate to adopt the going concern basis of accounting. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. 5. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included those which had the greatest effect on the overall audit strategy, the allocation of resources in the audit and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. 146 Currys plc Annual Report & Accounts 2021/22 5.1. Revenue recognition – Valuation of UK network receivables Key audit matter description The Group sells mobile phone contracts on behalf of mobile operators. The valuation of gross network commission receivable and contract assets of £405m (2 May 2020: £1,005m), being commission for which there is a contractual entitlement based on mobile phone connections already made, and for which there are no ongoing performance obligations, is subject to significant management judgement. Included within the gross value are contract assets of £207m (2 May 2020: £546m). These are recognised where the performance obligations have been met but the quantum of consideration from the customer is variable due to factors other than the passage of time. The valuation is based on management’s estimate of the extent to which it is highly probable that recognised revenue will not be subject to a material reversal in the future. As described in note 15, the valuation of the expected receivable is determined by four key assumptions: • the expected level of customer spend in excess of their current contracted amount (known as ‘out of bundle’ spend); • the forecast customer default rate within the contract period; • the forecast rate of customer renewals with the same network provider; and • the expected customer behaviour beyond the initial contract period (the propensity of customers to ‘sleep’). We have focused our risk related to the valuation of contract assets on the determination of these four key assumptions. Due to the level of judgement involved, we have determined that there is potential for manipulation of this balance by management. The value of these assumptions influences the level of network commission revenue that the Group recognises. A change in these assumptions can also lead to the adjustment of revenue that has been recognised in prior periods. In determining these assumptions the Group considers historical activity by customers and operators and makes an assessment as to how this activity will change in the future, taking into account other factors such as new regulations. These future variations can be influenced by external factors, including customer behaviour, operator behaviour and changes to market regulations. The current year reflects an out of period revaluation gain of £14m (2019/20: loss of £(47)m). During the financial year the contract with one of the network operators ended in September 2020 and in March 2021 the full debtor was settled. The Group also settled an ongoing contractual dispute with a counterparty and upon settlement recognised a gain of £28m, which has been recognised as other operating income. As described in note 1e to the Group financial statements, remeasurement of prior period assumptions due to changes in consumer behaviour, or where more recent information becomes available, are recognised as revenue in the income statement. Any changes in prior period assumptions, and their consequential impact on revenue, are eliminated from the Group’s adjusted profit before tax which is an alternative performance measure, which can be found in Appendix A5 on page 221. The key judgements and estimates involved are described in more detail in the Audit Committee report on page 91, in the key sources of estimation uncertainty disclosed in note 1t and in note 15 to the Group financial statements. Independent Auditor’s Report continued 147 Governance Financial Statements Investor information Strategic Report How the scope of our audit responded to the key audit matter We obtained an understanding of the senior management review control of the key assumptions used to determine the UK network receivables balance. We assessed the valuation of revenue recognised through review of the contractual agreements, comparison of data used by management to data submitted by the mobile operators, and performing procedures to assess the reasonableness of the four key assumptions. We challenged: • the forecast customer spend assumptions by comparison to actual customer spend data trends from the network operators and with reference to external market data and trends; • the forecast customer default rate by comparison to the actual rates of default seen in the latest data from the networks and with reference to the external economic environment and default rates observed in external market data; • the forecast rate of customer renewals with the same network provider by comparison to the latest renewals data from the network operators and with reference to other external market data; and • the expected customer behaviour beyond the initial contract period by comparison to actual rates of customers continuing their contract after their fixed contract term and with reference to external market data and analysis. In considering the assumptions, we analysed existing and forthcoming changes in regulation and wider macroeconomic environment. We considered whether these could lead to behavioural changes which would impact the amount of revenue recognised in the current year. Such changes could also risk the reversal of revenue recognised in previous accounting periods and the recoverability of the receivable on the balance sheet. Specifically, we considered expected behavioural changes relating to the events described in note15(iv) and challenged the quantum of constraint applied to the contract asset recognised at the year end. We considered whether management’s assumptions in respect of the impact of possible behavioural changes and the resulting impact on the valuation of the UK network receivables balance were reasonable. We assessed management’s judgement that the settlement of an ongoing dispute with one of the network operators should be recognised in other operating income. We reviewed the settlement agreement and challenged management on whether there was any contradictory evidence to demonstrate that the settlement should instead be recognised within revenue. In order to confirm the settlements we inspected the receipt on the bank statements and reviewed the contracts. We assessed the changes in assumptions in relation to the revenue recognised for current year connections between consumers and operators, and in relation to revenue recognised in previous accounting periods. In doing so we assessed whether the amount of revenue recognised in each circumstance is consistent with the disclosure in note 15. We assessed the disclosures relating to the treatment of out of period revaluations as an adjusting item in the reconciliation of adjusted profit before tax, a key alternative performance measure. Key observations We consider the treatment adopted in relation to the valuation of the UK network commission receivable and the related assumptions applied by management to be appropriate. We consider the recognition of the gain arising upon settlement of an ongoing dispute with one of the network operators to be appropriately recognised within other operating income. We agree that the disclosures relating to network commissions, summarised in note 15, provide an appropriate understanding of the estimates taken by management and how changes in these estimates have influenced the total revenue recognised from network commissions in the year. 5.1. Revenue recognition – Valuation of UK network receivables continued 148 Currys plc Annual Report & Accounts 2021/22 5.2. Impairment of UK & Ireland Electricals goodwill and store assets Key audit matter description In light of the impact of Covid-19, there is a heightened risk of impairment in respect of the UK & Ireland Electricals goodwill of £1,840m (2019/20: £1,840m) and UK store and right-of-use assets of £505m (2019/20: £546m). £1,840m of goodwill is reviewed by management for impairment within the UK & Ireland Electricals group of cash generating units (CGUs). As set out in note 8b to the Group financial statements, management assesses the recoverable amount of the group of CGUs by calculating its value in use using projections covering a five- year period. Following their impairment review, management did not identify any impairment of goodwill being required. There is judgement required by management in determining forecast cash flows, particularly in respect of the later and terminal years of their five-year period projections. As disclosed in note 8 we note that a reasonably possible change in management’s forecast annual operating profit throughout their Strategic Plan forecasts would result in headroom of the UK & Ireland combined groups of CGUs being eroded to nil. We note there is uncertainty in the assumptions underlying these forecasts, particularly in respect of forecast operating profit and the future EBIT margin that the Group will generate. Management has included a key source of estimation uncertainty in note 1t, and provided associated sensitivity disclosures in respect of the long term operating profit of the UK & Ireland Electricals group of CGUs as set out in note 8 to the financial statements. Management has completed a full impairment review of UK store assets, consisting of £442m of right-of- use assets and £63m of store assets, by comparing the value in use indicated by management’s store level forecasts to the carrying value of fixed assets of that store. As a result of this review, an impairment of £15m was recognised as described in note 3 to the financial statements. There is an inherent key assumption in management’s forecasts as to how customers will behave in the future, in particular the proportion of customers that will shop in store or online. As a result, management has identified that a reasonably possible change in consumer behaviour could result in a further material impairment, and have included a key source of estimation uncertainty in note 1t to the financial statements. Further information in this area is discussed in the Audit Committee report on page 91 and in note 8 to the Group financial statements. How the scope of our audit responded to the key audit matter We have completed the following procedures in respect of goodwill and store impairment: • obtained an understanding of relevant controls relating to the review and approval of the impairment reviews; • tested the mechanical accuracy of the value in use models and cash flow forecasts and assessed whether the methodology used in determining the recoverable amount is consistent with IAS 36: ‘Impairment of Assets’; • challenged the key assumptions used by management in the impairment reviews through comparison to historical performance and external evidence. In particular, we challenged management in respect of the forecast improvement in operating profit. We assessed this by: – challenging management on the key reconciling items that bridge between the EBIT margin generated in the current and prior periods to the EBIT margin that is forecast over the term of the strategic plan and into perpetuity; – considering the reasonableness of management’s short term cash flow forecasts, including cost savings related to the transformation of the go to market strategy for one of the Group’s main sales categories that the Group expects to achieve, which forms a key part of management’s value in use model used to derive the recoverable amount of the group of CGUs. We assessed whether the Group was committed to these plans to the extent that the cost savings can be included in an impairment assessment under IAS 36; – challenging management on the forecast proportion of customers that will shop in store or online by comparison to the historical proportion before the impact of Covid-19, the actual proportion experienced during the period and considering forward looking analysis, and reviewing the associated sensitivity disclosures; and – evaluating management’s assessment of the sensitivity to forecast operating profit margin required to indicate an impairment. We compared the breakeven operating profit margin to the margins achieved by comparator companies. • challenged management’s rationale for the premium of the net assets of the Group above the market capitalisation of the Group by evaluating the reconciling amounts in management’s analysis; • assessed the completeness of assets being included in the asset base and the appropriateness of any liability balances included by management; • evaluated management’s assessment of assets which cannot be allocated on a reasonable and consistent basis to the UK & Ireland Electricals group of CGUs; and • assessed the completeness and accuracy of disclosures against the requirements of IAS 1 and IAS 36 respectively. Independent Auditor’s Report continued 149 Governance Financial Statements Investor information Strategic Report 5.2. Impairment of UK & Ireland Electricals goodwill and store assets continued Key observations We considered that the related disclosures appropriately summarise the uncertainties associated with management’s impairment reviews. We concur with management’s conclusion that no impairment of goodwill is required and that the impairment of store assets recognised is appropriate. 5.3. Impairment of UK & Ireland Electricals assets in the course of construction Key audit matter description The Group invests significant amounts in both tangible and intangible assets in relation to strategic change projects. These projects are typically multiyear and therefore significant capitalised development costs are classified as assets in the course of construction at key reporting dates. The total UK & Ireland Electricals assets in the course of construction is £47m at 1 May 2021 (2019/20: £110m). Within the year, and following a strategic change by the Group, a £55m impairment charge was recognised in relation to intangible assets, primarily related to software development costs, as described in note 9 to the financial statements. Given the recent strategic changes in the business, there remains a risk of impairment in respect of the assets in the course of construction held at year end, and whether there remains a viable business case for these assets. Where the business case is no longer viable, then an impairment of the corresponding asset value is recorded. Further information in this area is discussed in the Audit Committee report on page 91 and in note 9 to the Group financial statements. How the scope of our audit responded to the key audit matter We have completed the following procedures in respect of assets in the course of construction: • obtained an understanding of relevant controls relating to the management review of the assets in the course of construction ledger and associated business approval controls; • for a sample of the largest and most aged assets under construction, we have obtained the business case plans prepared by management and assessed whether there continues to be a valid business case by challenging the changes in strategic direction in the year against the original business case plans; • challenged the impairment recognised in the period by comparison to the wider trading performance of the UK trading business and assessing whether there is any indicator of management bias; • made enquiries of management throughout the organisation to further understand the purpose of the project and assess whether it is appropriate the asset remains in assets under construction; and • where impairments have arisen in the year, we have understood why the project costs have been written-off and challenged management on whether this constitutes a prior period error. Key observations We concur with management’s conclusion that the impairment recognised in the year is appropriate. 6. Our application of materiality 6.1. Materiality We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope of our audit work and in evaluating the results of our work. Based on our professional judgement, we determined materiality for the financial statements as a whole as follows: Consolidated financial statements Company financial statements Materiality £10.5m (2019/20: £9.5m) £9.9m (2019/20: £9.0m) Basis for determining materiality We considered the following metrics: • Adjusted profit before tax (see note A5); • Net assets; and • Revenue. Using professional judgement, we determined materiality to be £10.5m (£9.5m). Materiality for the current year represents 8.6% of adjusted profit before tax (2019/20: 7.5%), 0.15% of total assets (2019/20: 0.12%) and 0.12% of revenue (2019/20: 0.09%). Company materiality is determined as a percentage of net assets. Determined company materiality equates to 0.36% (2019/20: 0.33%) of net assets, which is capped at 95% (2019/20: 95%) of group materiality. Rationale for the benchmark applied In determining our benchmark for materiality, we considered a number of different metrics used by investors and other users of the financial statements. Net assets was selected as an appropriate benchmark for determining materiality, as the Company acts as a holding company. statements. 150 Currys plc Annual Report & Accounts 2021/22 6.2. Performance materiality We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and undetected misstatements exceed the materiality for the financial statements as a whole. Group financial statements Parent company financial statements Performance materiality 65% (2019/20: 70%) of group materiality 65% (2019/20: 70%) of parent company materiality Basis and rationale for determining performance materiality Performance materiality as a percentage of materiality has reduced from 70% to 65% to reflect the impact of a remote working environment and associated increase in risk of control failures and error. In determining performance materiality, we also considered the following factors: a. the impact of Covid-19 and industry wide pressure on the financial statements, the judgements taken by management and the associated disclosures; b. our risk assessment, including our assessment of the Group’s overall control environment and our reliance on controls in the Nordics; and c. our past experience of the audit, including the profit impacting misstatements identified in prior periods and management’s willingness to correct any misstatements identified. 6.3. Error reporting threshold We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of £0.5m (2019/20: £0.5m), as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We also report to the Audit Committee on disclosure matters that we identified when assessing the overall presentation of the financial statements. 7. An overview of the scope of our audit 7.1. Identification and scoping of components Our group audit was scoped by obtaining an understanding of the Group and its environment, including group-wide controls, and assessing the risks of material misstatement at the Group level. Based on that assessment, we focused our group audit scope primarily on the audit work of the significant components, being the retail operations in the UK and the Nordics, which is consistent with the previous year. Each of these components requires a local statutory audit. These significant components represent the principal business units and account for approximately 94% of the Group’s revenue from continuing operations (2019/20: 94%). Each location was selected to provide an appropriate basis for undertaking audit work to address the risks of material misstatement identified above. Our audit work at these locations was executed at levels of materiality applicable to each individual entity which were lower than group materiality and ranged from £5.3m to £9.9m (2019/20: £5.7m to £9.0m). At the Dixons Carphone plc Group level we also tested the consolidation process and carried out analytical procedures to confirm our conclusion that there were no significant risks of material misstatement of the aggregated financial information of the remaining components not subject to audit or audit of specified account balances. 7.2. Our consideration of the control environment Dixons Carphone plc is reliant on the effectiveness of a number of IT applications and controls to ensure that financial transactions are processed and recorded completely and accurately. UK control environment We involved our IT specialists to obtain an understanding of the relevant general IT controls. Due to the IT deficiencies identified in prior years, we did not plan to rely on the relevant controls over a number of operating cycles as these rely on automated controls. The revenue earned from extended warranty service agreements with customers relies upon a single financial reporting system, the general IT controls of which we relied on in the past but were unable to rely on the relevant controls this year due to deficiencies identified in our assessment of these controls. We planned to rely on the relevant controls associated with the Dixons supplier funding operating cycle, as certain aspects of this process do not rely upon automated controls, but were unable to as a result of immaterial errors identified in our substantive testing, which indicated a failure in the implementation of controls. As a result of the IT deficiencies identified in the prior and current years, we completed additional substantive procedures. Whilst, for audit purposes, the additional procedures performed mitigated the risk presented by the deficiencies, management is in the course of performing further stabilisation activities associated with the Group’s IT infrastructure. Independent Auditor’s Report continued 151 Governance Financial Statements Investor information Strategic Report 7.2. Our consideration of the control environment continued General IT controls continue to be a focus area for management and the Audit Committee. Further information is set out in the risk management and internal control section of the Audit Committee report on page 92. Nordics control environment In the Nordics, we relied upon controls across the following operating cycles: inventory, supplier funding, cash, property, plant and equipment, trade payables, revenue and cost of goods sold. We tested and relied upon the relevant controls of two finance systems for our testing of these operating cycles. 7.3. Working with other auditors The same audit team is responsible for both the Group and UK component audit work. The Group audit team engaged a component audit team from Deloitte Norway to perform an audit of the Nordics sub-consolidation. The Group audit team held regular communication with the component auditor ahead of and during the year end audit process. Oversight of the component audit team included reviewing the audit work of the component audit team via video conferencing. 8. Other information The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. 9. Responsibilities of directors As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the Group’s and the parent company’s ability to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the parent company or to cease operations, or have no realistic alternative but to do so. 10. Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but it is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report. 152 Currys plc Annual Report & Accounts 2021/22 11. Extent to which the audit was considered capable of detecting irregularities, including fraud Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. 11.1. Identifying and assessing potential risks related to irregularities In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following: • the nature of the industry and sector, control environment and business performance including the design of the Group remuneration policies, key drivers for directors’ remuneration, bonus levels and performance targets; • results of our enquiries of management, internal audit and the audit committee about their own identification and assessment of the risks of irregularities; • any matters we identified having obtained and reviewed the Group’s documentation of their policies and procedures relating to: – identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of noncompliance; – detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; – the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations; and • the matters discussed among the audit engagement team including significant component audit teams and relevant internal specialists, including tax, valuations, pensions, IT, and industry specialists regarding how and where fraud might occur in the financial statements and any potential indicators of fraud. As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: valuation of UK network receivables and supplier funding. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override. We also obtained an understanding of the legal and regulatory frameworks that the Group operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act, Listing Rules, pension legislations, tax legislations and FCA regulations. In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the Group’s ability to operate or to avoid a material penalty. These included the Group’s health and safety, insurance selling and environmental regulations. 11.2. Audit response to risks identified As a result of performing the above, we identified the valuation of UK network receivables as a key audit matter related to the potential risk of fraud. The key audit matters section of our report explains the matter in more detail and also describes the specific procedures we performed in response to this key audit matter. In addition to the above, our procedures to respond to risks identified included the following: • reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements; • considering any indicators of management bias across the key judgements and estimates in the financial statements, in particular whether any of the judgements and estimates indicated systematic or consistent directional bias; • enquiring of management, the audit committee and external legal counsel concerning actual and potential litigation and claims; • performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; • reading minutes of meetings of those charged with governance, reviewing internal audit reports and reviewing correspondence with HMRC; • assessing the valuation of UK & Ireland Electricals supplier funding related accruals that require the most significant level of management judgment by confirming a sample of accruals directly with the supplier; and • in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business. We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members including internal specialists and significant component audit teams, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. Independent Auditor’s Report continued 153 Governance Financial Statements Investor information Strategic Report Report on other legal and regulatory requirements 12. Opinions on other matters prescribed by the Companies Act 2006 In our opinion the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006. In our opinion, based on the work undertaken in the course of the audit: • the information given in the strategic report and the Directors’ Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and • the strategic report and the Directors’ Report have been prepared in accordance with applicable legal requirements. In the light of the knowledge and understanding of the Group and the parent company and their environment obtained in the course of the audit, we have not identified any material misstatements in the strategic report or the Directors’ Report. 13. Corporate Governance Statement The Listing Rules require us to review the directors’ statement in relation to going concern, longer-term viability and that part of the Corporate Governance Statement relating to the Group’s compliance with the provisions of the UK Corporate Governance Code specified for our review. Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement is materially consistent with the financial statements and our knowledge obtained during the audit: • the directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material uncertainties identified set out on page 53; • the directors’ explanation as to its assessment of the Group’s prospects, the period this assessment covers and why the period is appropriate set out on page 53; • the directors’ statement on fair, balanced and understandable set out on page 130; • the Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 53; • the section of the annual report that describes the review of effectiveness of risk management and internal control systems set out on page 46; and • the section describing the work of the audit committee set out on page 87. 14. Matters on which we are required to report by exception 14.1. Adequacy of explanations received and accounting records Under the Companies Act 2006 we are required to report to you if, in our opinion: • we have not received all the information and explanations we require for our audit; or • adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or • the parent company financial statements are not in agreement with the accounting records and returns. We have nothing to report in respect of these matters. 14.2. Directors’ remuneration Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures of directors’ remuneration have not been made or the part of the Directors’ Remuneration Report to be audited is not in agreement with the accounting records and returns. We have nothing to report in respect of these matters. 154 Currys plc Annual Report & Accounts 2021/22 15. Other matters which we are required to address 15.1. Auditor tenure Following the recommendation of the Audit Committee, we were appointed by the Board on 31 July 2003 to audit the financial statements of the Group for the year ending 29 March 2003 and subsequent financial periods. The period of total uninterrupted engagement as the Group auditors, including previous renewals and reappointments of the firm is 19 years, covering the years ending 29 March 2003 to 1 May 2021. The period of engagement as the Company’s auditor, following a group restructuring, since being incorporated in 2009, is 11 years, covering the years ending 26 March 2011 to 1 May 2021. As set out in the Audit Committee report on page 95, 2021/22 will be the final year of our audit tenure. 15.2. Consistency of the audit report with the additional report to the audit committee Our audit opinion is consistent with the additional report to the audit committee we are required to provide in accordance with ISAs (UK). 16. Use of our report This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed. Stephen Griggs Senior Statutory Auditor for and on behalf of Deloitte LLP Statutory Auditor London, United Kingdom 06 July 2022 Independent Auditor’s Report continued 155 Governance Financial Statements Investor information Strategic Report Consolidated Income Statement Note Year ended 30 April 2022 £m Year ended 1 May 2021 £m Continuing operations Revenue 2,3 1 0 ,14 4 1 0, 34 4 Profit before interest and tax 2,3 222 1 47 Finance income 2 6 Finance costs (98) (1 2 0) Net finance costs 5 (96) (1 14) Profit before tax 126 33 Income tax expense 6 (6 7) (33) Profit after tax – continuing operations 59 – Profit after tax – discontinued operations 24 - 12 Profit after tax for the period 59 12 Earnings per share (pence) 7 Basic – continuing operations [x x] p –p Diluted – continuing operations [x x] p –p Basic – total [x x] p 1 .0p Diluted – total [x x] p 1 .0p 156 Currys plc Annual Report & Accounts 2021/22 Consolidated Statement of Comprehensive Income Note Year ended 30 April 2022 £m Year ended 1 May 2021 £m Profit after tax for the period 59 12 Items that may be reclassified to the income statement in subsequent years: Cash flow hedges 22 Fair value movements recognised in other comprehensive income 14 (51) Reclassified and reported in income statement (28) 11 Tax on movements on cash flow hedges 6 (2) - Exchange (loss) / gain arising on translation of foreign operations (32) 46 (4 8) 6 Items that will not be reclassified to the income statement in subsequent years: Actuarial gain on defined benefit pension schemes – UK 21 1 56 30 – Overseas 21 3 – Tax on movements on defined benefit pension schemes 6 (12) 13 Gains on financial assets measured by fair value through other comprehensive income - 8 147 51 Other comprehensive income for the period (taken to equity) 99 57 Total comprehensive income for the period 158 69 157 Governance Financial Statements Investor information Strategic Report Consolidated Balance Sheet Note 30 April 2022 £m 1 May 2021 £m Non-current assets Goodwill 8 2 , 814 2 , 8 51 Intangible assets 9 385 4 26 Property, plant and equipment 10 162 184 Right-of-use assets 11 1 ,0 07 1 , 0 51 Lease receivable 12 3 3 Trade and other receivables 14 123 138 Deferred tax assets 6 20 6 26 2 4 , 70 0 4 ,9 1 5 Current assets Inventory 13 1 , 28 6 1 ,1 78 Lease receivable 12 1 1 Trade and other receivables 14 696 5 87 Derivative assets 25 28 24 Cash and cash equivalents 15 1 26 175 2 ,1 37 1 ,9 6 5 Total assets 6,837 6 ,880 Current liabilities Trade and other payables 16 (2, 368) (2 , 23 3) Derivative liabilities 25 (1 1) (4 2) Contingent consideration 17 – (2) Income tax payable (6 3) (6 4) Loans and other borrowings 18 (2) (6) Lease liabilities 19 (2 1 0) (2 1 6) Provisions 20 (4 8) (5 8) (2,702) (2 , 62 1) Non-current liabilities Trade and other payables 16 (9 6) (97) Loans and other borrowings 18 (8 0) – Lease liabilities 19 (1 ,0 57) (1 ,1 1 0) Retirement benefit obligations 21 (2 57) (4 8 2) Deferred tax liabilities 6 (1 63) (16 2) Provisions 20 (1 1) (2 7) (1 , 6 6 4) (1 , 878) Total liabilities (4 ,366) (4,499) Net assets 2 , 47 1 2, 3 81 Capital and reserves 22 Share capital 1 1 Share premium reserve 2 , 263 2, 26 3 Other reserves (7 99) (76 4) Accumulated profits 1,0 06 8 81 Equity attributable to equity holders of the parent company 2 , 47 1 2, 3 81 The financial statements were approved by the directors on 6 July 2022 and signed on their behalf by: Alex Baldock Group Chief Executive Bruce Marsh Group Chief Financial Officer Company registration number: 7105905 158 Currys plc Annual Report & Accounts 2021/22 Consolidated Statement of Changes in Equity Note Share capital £m Share premium reserve £m Other reserves £m Accumulated profits £m Total equity £m At 2 May 2020 1 2 , 26 3 (7 75) 791 2 , 280 Profit for the period – – – 12 12 Other comprehensive income recognised directly in equity – – 14 43 57 Total comprehensive income for the period – – 14 55 69 Amounts transferred to the carrying value of inventory purchased during the year – – 24 – 24 Net movement in relation to share schemes – – 4 17 21 Amounts transferred from investments revaluation reserve – – (1 8) 18 – Purchase of own shares – employee benefit trust 22 – – (1 3) – (1 3) At 1 May 2021 1 2 , 26 3 (76 4) 881 2 , 3 81 Profit for the period – – – 59 59 Other comprehensive income / (expense) recognised directly in equity – – (4 6) 145 99 Total comprehensive income / (expense) for the period – – (4 6) 20 4 158 Amounts transferred to the carrying value of inventory purchased during the year – – 28 - 28 Net movement in relation to share schemes – – 24 (1) 23 Purchase of own shares – employee benefit trust 22 – – (41) - (41) Purchase of shares – share buyback 22 – – (32) – (3 2) Cancellation of treasury shares 22 – – 32 (32) – Equity dividend 23 – – – (4 6) (4 6) At 30 April 2022 1 2 , 26 3 (79 9) 1 ,0 06 2 , 47 1 * A detailed reconciliation of Other reserves is provided in note 22b. 159 Governance Financial Statements Investor information Strategic Report Consolidated Cash Flow Statement Note Year ended 30 April 2022 £m Year ended 1 May 2021 £m Operating activities Cash generated from operations 26 524 926 Contributions to defined benefit pension scheme (78) (4 7 ) Income tax paid (1 8) (3 5) Net cash flows from operating activities 4 28 844 Investing activities Net cash outflow arising from acquisitions (2) (1) Proceeds from sale of financial assets at FVTOCI - 18 Proceeds on sale of business 1 2 Acquisition of property, plant and equipment and other intangibles (1 3 3) (1 22) Net cash flows from investing activities (1 3 4) (10 3) Financing activities Interest paid (87) (1 0 1) Capital repayment of lease liabilities (20 8) (2 32) Purchase of ordinary shares – employee benefit trust (4 1) (13) Purchase of shares – share buyback (32) – Equity dividends paid (4 6) – Drawdown / (Repayment) of borrowings 80 (3 2 6) Facility arrangement fees paid (6) – Net cash flows from financing activities (3 4 0) (67 2) (Decrease) / Increase in cash and cash equivalents and bank overdrafts (4 6) 69 Cash and cash equivalents and bank overdrafts at the beginning of the period 169 1 20 Currency translation differences 1 (2 0) Cash and cash equivalents and bank overdrafts at the end of the period 26 124 1 69 160 Currys plc Annual Report & Accounts 2021/22 Notes to the Group Financial Statements 1 Significant Accounting policies a) Basis of preparation Currys plc (the Company) is a public company limited by shares incorporated in the United Kingdom, which is registered in England and Wales under the Companies Act 2006. The consolidated financial statements have been prepared on a going concern basis in accordance with UK adopted international accounting standards in conformity with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards. The financial statements have been presented in Pound Sterling, based on the Group’s primary economic environment, and on the historical cost convention except for the revaluation of certain financial instruments and defined benefit pension obligations, as explained below. All amounts have been rounded to the nearest million (‘£m’), unless otherwise stated. Significant accounting policies have been included in the relevant notes to the financial statements to which the policies relate. These are presented as text highlighted on pages [x] to [x]. Where accounting policies are applied to the financial statements as a whole, they are detailed further below. Unless otherwise stated, the accounting policies are the same as those which have been applied consistently to all periods presented and in previous financial years. Alternative performance measures (APMs) In addition to IFRS measures, the Group uses certain alternative performance measures that are considered to be additional informative measures of ongoing trading performance of the Group and are consistent with how performance is measured internally. The alternative performance measures used by the Group in addition to IFRS measures are included within the glossary and definitions section of the Annual Report on page [x]. This includes further information on the definitions, purpose, and reconciliation to IFRS measures of those alternative performance measures that are used for internal reporting and presented to the Group’s Chief Operating Decision Maker (CODM). The CODM has been determined to be the Board. Going concern Going concern is the basis of preparation of the financial statements that assumes an entity will remain in operation for a period of at least 12 months from the date of approval of the financial statements. The Group and Company’s business activities, factors likely to affect future development, performance, and position, as well as the principal risks are set out in the Strategic Report on pages [x] to [x]. The Group and Company’s funding arrangements and processes for managing its exposure to liquidity risk are set out in notes 18 and 25. In their consideration of going concern, the directors have reviewed the Group’s future cash forecasts and profit projections, which are based on market data and past experience. The directors are of the opinion that the Group’s forecasts and projections, which take into account reasonably possible changes in trading performance, including the potentially prolonged impact of Covid-19 and the impact from inflation exacerbated by the conflict in Eastern Europe, show that the Group is able to operate within its current facilities and comply with its banking covenants for the foreseeable future. In arriving at their conclusion that the Group has adequate financial resources, the directors considered the level of borrowings and facilities as set out in note 18 to the Group financial statements and that the Group has a robust policy towards liquidity and cash flow management. As a result of the uncertainties surrounding the forecasts due to the Covid-19 pandemic and the current macroeconomic environment, the Group has also modelled a reverse stress test scenario. The reverse stress test models the decline in sales that the Group would be able to absorb before requiring additional sources of financing in excess of those that are committed. Such a scenario, and the sequence of events which could lead to it, is considered to be remote. 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. The long-term impact of Covid-19 as well as other macroeconomic factors are uncertain and should the impacts on trading conditions be more prolonged or severe than what the directors consider to be reasonably possible, the Group would need to implement additional operational or financial measures. 161 Governance Financial Statements Investor information Strategic Report 1 Significant Accounting policies continued b) Accounting convention and basis of consolidation The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries). Control is achieved where the Company has the power over the investee; is exposed, or has rights, to variable return from its involvement with the investee; and has the ability to use its power to affect its returns. The results of subsidiaries and joint ventures acquired or sold during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal as appropriate, which is the date from which the power to control passes. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group. All intercompany transactions and balances are eliminated on consolidation. c) Foreign currency translation and transactions Foreign currency transactions Transactions denominated in foreign currencies are translated to the Group’s presentational currency using the exchange rate at the date of the transaction. The Group uses foreign exchange forward contracts to hedge material transactions denominated in foreign currencies, as outlined in note 25. Foreign exchange differences arising are recognised in the Group’s income statement in the year in which they arise. Foreign currency translation Material monetary assets and liabilities denominated in foreign currencies are hedged, mainly using forward foreign exchange contracts to create matching liabilities and assets, and are translated at the rates prevailing at the balance sheet date. The results of foreign operations are translated each month at the monthly rate, and their balance sheets are translated at the rates prevailing at the balance sheet date. Goodwill and acquisition intangible assets are held in the currency of the operation to which they relate. Exchange differences arising on the translation of net assets, goodwill and results of foreign operations are recognised in the Group statement of other comprehensive income and are included in the Group’s translation reserve. The principal exchange rates against Pound Sterling used in these financial statements are as follows: Average Closing 2022 2021 2022 2021 Euro 1.18 1.12 1.19 1.15 Norwegian Krone 11.86 11.90 11.78 11.50 Swedish Krona 12.11 11.56 12.31 11.69 US Dollar 1.35 1.33 1.26 1.38 d) Key sources of estimation uncertainty and Critical accounting judgements Critical accounting judgements and estimates used in the preparation of the financial statements are continually reviewed and revised as necessary. Whilst every effort is made to ensure that such judgements and estimates are reasonable, by their nature they are uncertain, and as such changes may have a material impact. Key sources of estimation uncertainty Defined benefit pension schemes The surplus or deficit in the UK defined benefit pension scheme that is recognised through the consolidated statement of comprehensive income and expense is subject to a number of assumptions and uncertainties. The calculated liabilities of the scheme are based on assumptions regarding inflation rates, discount rates and member longevity. Such assumptions are based on actuarial advice and are benchmarked against similar pension schemes. Refer to note 21 for further information. 162 Currys plc Annual Report & Accounts 2021/22 1 Significant Accounting policies continued d) Key sources of estimation uncertainty and Critical accounting judgements continued Key sources of estimation uncertainty continued Revenue recognition – network commissions For certain transactions with MNOs, the quantum of commission receivable on mobile phone connections depends on consumer behaviour after the point of sale. This leads to an estimate over the transaction price due to the variability of revenue. A level of constraint is applied to the revenue recognition to ensure revenue is only recognised when it is highly probable there will not be a significant reversal. By the nature of this constraint, applied in line with IFRS 15: ‘Revenue from Contracts with Customers’, it is possible that additional revenue will be recognised in future periods from performance obligations satisfied in prior periods. For example, the network commission receivables are routinely increased each year in line with RPI, however as part of the variable revenue constraint, the Group does not include this RPI estimate in the revenue recognised at point of sale. For the year ended 30 April 2022, the revenue recognised includes a value of £11m (2020/21: £6m) relating to the application of RPI increases on end consumer contracts by the respective MNOs relating to performance obligations satisfied in prior periods. As a result of the revenue constraints applied, it is reasonably possible that additional revenue may be recognised in future periods from performance obligations satisfied in prior periods of between nil and £20m. Further details of the estimations involved with network commissions can be found in note 3 and a reconciliation of the movements in the network commission receivables within the year is included within note 14. Impairment of non-financial assets The Group tests whether goodwill has suffered any impairment on an annual basis based on the value of the discounted future cash flows allocated to the group of CGUs to which it is allocated. The methodology and key assumptions used in assessing the carrying value of goodwill are set out further below. The key assumptions made for long term projections, sales growth rates, cost saving initiatives and discount rate all include an element of estimation that may give rise to a difference between the value ascribed and the actual outcomes. Due to the current macroeconomic environment, there is an increased level of risk and therefore a key source of estimation uncertainty with the sales and cost growth assumptions that drive the operating profit forecasts. It is reasonably possible that a change in these assumptions could lead to a material change in the carrying value of goodwill specifically within the UK & Ireland operating segment, where £1,840m of goodwill is allocated, within the next financial year. Further details of the key assumptions used and the sensitivity analysis in respect of the recoverable amount of UK & Ireland goodwill is disclosed in note 8. Property, plant and equipment, right-of-use assets, and other non-current assets are reviewed for impairment if events or changes in circumstances indicate that the carrying amount of an asset or cash generating unit is not recoverable. A cash generating unit is an individual store. The recoverable amount is the greater of the fair value less costs to sell and value-in-use. In calculating the value in use of each store CGU, order & collect sales (and associated costs) have been included, as well as an allocation of e-commerce sales that have been delivered directly to the consumer (rather than ordered in store or collected in store) based on data obtained from customer surveys that support the allocation to stores. Due to the current macroeconomic environment there is an increased level of risk associated with the forecast operating profit contribution generated by the stores (including the online sales allocations). Therefore a key source of estimation uncertainty associated with the sales and cost growth assumptions that drive the operating profit forecasts attributable directly to the store portfolio has been identified. It is considered reasonably possible that a change in these operating profit forecast assumptions could lead to a material change in the carrying value of assets specifically attributed to the UK stores, within the next financial year. If the operating profit generated by the store portfolio (including order & collect and an allocation of e-commerce sales delivered directly to the consumer) reduces by a reasonably possible 20% from 2022/23 onwards, this would result in a further impairment of store assets by £10m. The directors do not consider that the relevant change in this assumption would have a consequential effect on other key assumptions. Notes to the Group Financial Statements continued 163 Governance Financial Statements Investor information Strategic Report 1 Significant Accounting policies continued d) Key sources of estimation uncertainty and Critical accounting judgements continued Key sources of estimation uncertainty continued Deferred tax asset - UK losses carried forward The Group recognises, and regularly remeasures, deferred tax assets for the carry forward of unused tax losses within the UK to the extent that future taxable profit will be available against which the unused tax losses can be utilised. The calculated asset is therefore based on a number of management’s projections over the next 3 years based on the Board approved strategic plan, including sales and costs growth rates and any potential impact of the risks to achieving the Group’s objectives. All of which may give rise to a difference between the value ascribed and the actual outcome. It is reasonably possible that a change in assumption could result in a material change in the forecast taxable profit that will be available against which the unused tax losses can be utilised, and a subsequent change in the deferred tax asset that is recognised, within the next year. The Group has modelled a number of different scenarios to assess the impact on the deferred tax asset and based on these the deferred tax asset could range from £39m to £52m. For instance, the lower end of the range is aligned to the assumptions applied in the reasonable worse case scenarios used in our going concern modelling, and would result in the deferred tax asset reducing to £39m. Conversely, the higher end of the range models the external market assumptions used for sales estimates in the 2022/23 forecast assuming they outperform expectations by a reasonably possible amount, and would result in a larger deferred tax asset of £52m being recognised. Critical accounting judgements Taxation The Group is subject to income taxes in a number of different jurisdictions and judgement is required in determining the appropriate provision for transactions where the ultimate tax determination is uncertain. The Group recognises a provision when it is probable that an obligation to pay tax will crystallise as a result of a past event. The quantum of provision recognised is based on the best information available and has been assessed by in-house tax specialists, and where appropriate third-party taxation and legal advisers, and represents the Group’s best estimate of the most likely outcome. Where the final outcome of such matters differs from the amounts initially recorded, any differences will impact the income tax and deferred tax provisions in the year to which such determination is made. Tax laws that apply to the Group’s businesses may be amended by the relevant authorities, for example as a result of changes in fiscal circumstances or priorities. Such potential amendments and their application to the Group are monitored regularly and the requirement for recognition of any liabilities (or changes in existing provisions) assessed where necessary. The Group has recognised provisions in relation to uncertain tax positions of £66m at 30 April 2022 (2020/21: £65m). Due to the nature of the provisions recorded, the timing of the settlement of these amounts remains uncertain. Furthermore, the Group is currently cooperating with HMRC in relation to open tax enquiries arising from pre-merger legacy corporate transactions in the Carphone Warehouse Group. One of the underlying pre-merger transactions under enquiry is considered to have a ‘more likely than not’ chance of resulting in settlement. The Group therefore determined, due to this level of risk, that a provision was appropriate and this was recognised in the 2018/19 financial statements. This enquiry is still open and the treatment as a provision continues to be deemed appropriate, with £42m (2020/21: £41m) (comprising both the amount of tax due on settlement together with interest up to 30 April 2022) included within the uncertain tax provisions balance explained above as at 30 April 2022. This enquiry is linked to another pre-merger tax risk that has a ‘more likely than not’ chance of resulting in settlement and has therefore been fully provided for at £18m (2020/21: £17m) (comprising both the amount of tax due together with interest) where discussions with HMRC are held in abeyance pending finalisation of the original enquiry. This provision is included within the uncertain tax provisions balance explained above as at 30 April 2022. In addition, the Group has a further open tax enquiry arising from a separate pre-merger legacy corporate transaction. Based on the strength of third-party legal advice it is considered ‘more likely than not’ that this enquiry will not result in an economic outflow to the Group and therefore no provision has been made. The potential range of tax exposures relating to this enquiry is estimated to be approximately £nil – £214m excluding interest and penalties. Interest on the upper end of the range is approximately £61m up to 30 April 2022. Penalties could range from nil to 30% of the principal amount of any tax. Any potential cash outflow would occur in greater than 1 year and less than 5 years. This potential outflow has been disclosed as a contingent liability within note 31. 164 Currys plc Annual Report & Accounts 2021/22 1 Significant Accounting policies continued e) Recent accounting developments In the current year, the Group has applied a number of amendments to IFRS Standards and Interpretations issued by the International Accounting Standards Board (IASB) that are effective for the financial year beginning 2 May 2021. Their adoption has not had any material impact on the disclosures or on the amounts reported in these financial statements. The Group has considered the following standards whose impact is not deemed to be material: • Amendments to IFRS 9: ‘Financial Instruments’, IAS 39: ‘Financial Instruments: Recognition and Measurement’ and IFRS 7: ‘Financial Instruments: Disclosures’ on Phase 2 of interest rate benchmark reform • Amendment to IFRS 16 Covid-19 Related Rent Concessions beyond 30 June 2021. Certain other new accounting standards, amendments to existing accounting standards and interpretations which are in issue but not yet effective, either do not apply to the Group or are not expected to have any material impact on the Group’s net results or net assets: • IFRS 17: ‘Insurance Contracts’ • IFRS 10 and IAS 28 (amendments) Sale or Contribution of Assets between an Investor and its Associate or Joint Venture • Amendments to IAS 1 Classification of Liabilities as Current or Non-current • Amendments to IFRS 3 Reference to the Conceptual Framework • Amendments to IAS 16 Property, Plant and Equipment – Proceeds before Intended Use • Amendments to IAS 37 Onerous Contracts – Cost of Fulfilling a Contract • Annual Improvements to IFRS Standards 2018-2020 Cycle: Amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards, IFRS 9 Financial Instruments, IFRS 16 Leases, and IAS 41 Agriculture • Amendments to IAS 1 and IFRS Practice Statement 2: Disclosure of Accounting Policies • Amendments to IAS 8 Definition of Accounting Estimates • Amendments to IAS 12 Deferred Tax related to Assets and Liabilities arising from a Single Transaction. 2 Segmental analysis The Group’s operating segments reflect the segments routinely reviewed by the CODM and which are used to manage performance and allocate resources. This information is predominantly based on geographical areas which are either managed separately or have similar trading characteristics such that they can be aggregated together into one segment. Changes to operating segments During the period the operating and reporting segments of the Group have changed and reflect the updated segments reported to the Board, who are considered CODM under IFRS 8 “Operating Segments”. Following the closure of the Carphone Warehouse standalone store estate within the UK in April 2020, Carphone Warehouse Ireland business in April 2021, the final legacy network contract with volume commitments ending in June 2021, along with the rebrand in the UK to Currys and mobile becoming a category within the Currys business, the previously disclosed UK & Ireland Electricals and UK & Ireland Mobile segments have been combined into UK & Ireland. It was subsequently determined that by including mobile as a category within Currys and the removal of the legacy network volume commitments, that the previously disclosed UK & Ireland mobile segment incurs expenses in the same manner and sells similar products to that of the UK & Ireland Electricals segment. The Group has therefore consolidated the information presented to the Board to provide greater clarity over the relative performance of the UK & Ireland business and to support decisions related to the allocation of the Group’s resources. The restatement of comparative information for these segments has been set out in part (b) of this note. The Group’s operating and reportable segments have therefore been identified as follows: • UK & Ireland comprises the operations of Currys, Carphone Warehouse, iD Mobile and B2B operations • Nordics operates in Norway, Sweden, Finland, Denmark with franchise operations in Iceland, Greenland and the Faroe Islands. • Greece, consisting of our ongoing operations in Greece and Cyprus. UK & Ireland, Nordics and Greece are involved in the sale of consumer electronics and mobile technology products and services, primarily through stores or online channels. Transactions between segments are on an arm’s length basis. In accordance with IFRS 5, discontinued operations are disclosed separately as a single amount within the Group’s consolidated income statement after profit after tax for continuing operations. Discontinued operations are therefore excluded from the segmental analysis. Further information on the Group’s operations classified as discontinued is outlined in note 24. Notes to the Group Financial Statements continued 165 Governance Financial Statements Investor information Strategic Report 2 Segmental analysis continued a) Segmental results Year ended 30 April 2022 UK & Ireland £m Nordics £m Greece £m Eliminations £m Total £m External revenue 5,485 4,105 554 – 10,144 Inter-segmental revenue 67 – – (67) – Total revenue 5,552 4,105 554 (67) 10,144 Profit before interest and tax 71 130 21 – 222 Year ended 1 May 2021 (restated) UK & Ireland £m Nordics £m Greece £m Eliminations £m Total £m External revenue 5,642 4,186 516 – 10,344 Inter-segmental revenue 56 – – (56) – Total revenue 5,698 4,186 516 10,344 Profit / (loss) before interest and tax (11) 139 19 – 147 * As discussed above, during the period the Group’s reportable segments have been changed to reflect the updated segments reported to the Board. As a result, inter- segmental revenue has been restated from £194m to £56m for the year ended 1 May 2021. This is to remove inter-segmental revenue transactions between the previously disclosed UK & Ireland Electricals and UK & Ireland Mobile CGUs. A full restatement of segmental information from what was disclosed in prior periods is presented below in note 2b. No individual customer represented more than 10% of the Group’s revenue within the current or preceding period. b) Restatement of segmental information As discussed above, during the period the Group’s reportable segments have been changed, and comparatives have been restated accordingly. The below tables provide reconciliations for external revenue and profit / (loss) before interest and tax for the year ended 1 May 2021. The relevant adjustment is a reconciliation of the previously disclosed UK & Ireland Electricals and UK & Ireland Mobile segments to the UK & Ireland segment. External revenue As previously reported £m Reallocate UK & Ireland Electricals £m Reallocate UK & Ireland Mobile £m Total £m UK & Ireland – 4,921 721 5,642 UK & Ireland Electricals (as previously reported) 4,921 (4 ,921) – – UK & Ireland Mobile (as previously reported) 721 – (721) – Nordics 4,186 – – 4,186 Greece 516 – – 516 Total revenue 10,344 – – 10,344 Profit / (loss) before interest and tax As previously reported £m Reallocate UK & Ireland Electricals £m Reallocate UK & Ireland Mobile £m Total £m UK & Ireland – 78 (89) (11) UK & Ireland Electricals (as previously reported) 78 (78) – – UK & Ireland Mobile (as previously reported) (89) – 89 – Nordics 139 – – 139 Greece 19 – – 19 Profit / (loss) before interest and tax 147 – – 147 166 Currys plc Annual Report & Accounts 2021/22 2 Segmental analysis continued c) Geographical information Revenues are allocated to countries according to the entity’s country of domicile. Revenue by destination is not materially different to that shown by domicile. Non-current assets exclude financial instruments and deferred tax assets. Year ended 30 April 2022 Year ended 1 May 2020 UK £m Norway £m Sweden £m Other £m Total £m UK £m Norway £m Sweden £m Other £m Total £m Revenue 5,299 1,245 1,387 2,213 10,144 5,352 1,269 1,375 2,348 10,344 Non-current assets 2,718 588 457 690 4,453 2,886 581 461 684 4,612 Capital expenditure 64 32 10 27 133 60 36 7 19 122 3 Revenue and profit before interest and taxation Accounting policies Revenue primarily comprises sales of goods and services net of returns, expected returns and excluding sales taxes. Revenue is measured based on the consideration to which the Group expects to be entitled in a contract with a customer and excludes amounts collected on behalf of third parties. The Group recognises revenue when it transfers control of a product or service to a customer. The following accounting policies are applied to the principal revenue generating activities in which the Group is engaged: a) Sale of goods: Revenue from the sale of goods is recognised at the point of sale or, where later, upon delivery to the customer. Where consideration is received, or receivable, in advance of the customer obtaining control and the performance obligations being satisfied, a contract liability is recognised It is Group policy to grant customers the right to return their products within a defined period of time. As this does not represent a separate performance obligation, the Group only recognises revenue to which it expects to be entitled. The Group uses the most likely amount method to estimate the expected value of goods to be returned by customers exercising their rights in line with the Group’s refund policy based on the prior period return rates. A refund liability is recognised as a component of trade and other payables for the amount of variable consideration that the Group does not expect to be entitled. A separate right to return asset is recognised within inventory to represent the right to recover goods from customers on settlement of the refund liability. This is measured by reference to the former carrying amount of the goods sold less any recoverability costs and decrease in value. b) Network commissions: Revenue from newtork comissions is recognised at a point in time on completion of the performance obligation under the individual contract with the Mobile Network Operator (MNO). The Group operates under contracts with a number of Mobile Network Operators (‘MNOs’). Over the life of these contracts the service provided by the Group to each MNO is the procurement of connections to the MNOs’ networks. Each connection made to an MNO’s network relates to an individual consumer. The consumer enters into a contract with the MNO for the MNO to supply the ongoing airtime over that contract period. The Group earns a commission for the service provided to each MNO (‘network commission’). Revenue is recognised at the point the individual consumer signs a contract with the MNO. Consideration from the MNO becomes receivable over the course of the contract between the MNO and the consumer. A judgement associated with this recognition is the unit of account used in measurement. As there is a large population of homogeneous items, in measuring the amount of revenue to recognise the Group has determined that the number and value of consumers provided to each MNO in any given month (a ‘cohort’) represents the best unit of account. Notes to the Group Financial Statements continued 167 Governance Financial Statements Investor information Strategic Report 3 Revenue and profit before interest and taxation continued b) Network commissions: continued The level of network commission earned is based on a share of the monthly payments made by the consumer to the MNO, including contractual monthly line rental payments together with a share of ‘out-of-bundle’ spend, spend after the contractual term, and amounts due from customer upgrades performed directly by the network. The total consideration receivable is determined by consumer behaviour after the point of recognition. The transaction price includes elements of variability and is therefore an area of estimation. The method of measuring the value of the revenue and contract asset in the month of connection is to estimate all future cash flows that will be received from the network and discount these based on the expected timing of receipt. A constrained estimate of the determined commission is recognised in full in the month of connection of the consumer to the MNO as this is the point at which we have completed the service obligation relating to the consumer connection. Transaction price is estimated based on extensive historical evidence obtained from the networks and an adjustment is made for expected and possible changes in consumer behaviour including as a result of regulatory changes impacting the sector. The consideration for a cohort of consumers is estimated by modelling the expected value of the portfolio of individual sales. Revenue is only recognised to the extent that it is highly probable that a significant reversal in the amount of revenue recognised will not occur. Management makes a quarterly, and the directors a twice-yearly, assessment of this data. This is based on the best estimate of expected future trends. c) Insurance revenue: Insurance revenue relates to the sale of third-party insurance products. Sales commission received from third parties is recognised when the insurance policies to which it relates are sold. Although there are no ongoing performance obligations, future commission receivable can vary due to consumer behaviour however it is only recognised to the extent that it is highly probable that there will not be a significant reversal of revenue. The Group recognises a contract asset in relation to this revenue. Any amount previously recognised as a contract asset is reclassified to trade receivables at the point in which it becomes billable and is no longer conditioned on something other than the passage of time. Revenue from the provision of insurance administration services is recognised over the life of the relevant policies when the Group’s performance obligations are satisfied. d) Support services – customer support agreements: Revenue earned from the sale of customer support agreements is recognised in full as the stand-ready performance obligations are satisfied under the contracts with the customer. Where consideration is received in advance of the performance of the obligations being satisfied, a contract liability is recognised. Due to the cancellation options and customer refund clauses, contract terms have been assessed to either be monthly or a series of day to day contracts with revenue recognised respectively in the month to which payment relates, or on a ‘straight-line’ basis e) Other services: Other services revenue, including delivery and installation, product repairs and product support, is recognised when the obligation to the customer has been fulfilled. Year ended 30 April 2022 £m Year ended 1 May 2021 £m Revenue 10,144 10,344 Cost of sales (8,356) (8,592) Gross profit 1,788 1,752 Operating expenses (1,566) (1,605) Profit before interest and tax 222 147 168 Currys plc Annual Report & Accounts 2021/22 3 Revenue and profit interest and taxation continued The Group’s disaggregated revenues recognised under ‘Revenue from Contracts with Customers’ in accordance with IFRS 15 relates to the following operating segments and revenue streams: Year ended 30 April 2022 UK & Ireland £m Nordics £m Greece £m Total £m Sale of goods 4,647 3,756 511 8,914 Commission revenue 458 220 18 696 Support services revenue 239 57 17 313 Other services revenue 140 72 8 220 Other revenue 1 - - 1 Total revenue 5,485 4,105 554 10,144 Year ended 1 May 2021 UK & Ireland £m Nordics £m Greece £m Total £m Sale of goods 4,751 3,797 491 9,039 Commission revenue 469 252 1 722 Support services revenue 260 60 17 337 Other services revenue 157 77 7 241 Other revenue 5 – – 5 Total revenue 5,642 4,186 516 10,344 Revenue from commissions relates predominantly to network and insurance commissions which are further explained within the accounting policies section above. Income received from suppliers such as volume rebates The Group’s agreements with suppliers contain a price for units purchased as well as other rebates and discounts which are summarised below: Volume Rebates: This income is linked to purchases made from suppliers and is recognised as a reduction to cost of goods sold as inventory is sold. Rebates that relate to inventory not sold are recognised within the value of inventory at the period end. Where an agreement spans period ends, estimation is required regarding amounts to be recognised. Forecasts are used as well as historical data in the estimation of the level of income recognised. Amounts are only recognised where the Group has a clear entitlement to the receipt of the rebate and a reliable estimate can be made. Customer discount support: This income is received from suppliers on a price per unit basis. The level of estimation is minimal as amounts are recognised as a reduction to cost of goods sold based on the agreement terms and only once the item is sold. Marketing income: This income is received in relation to marketing activities that are performed on behalf of suppliers. Marketing income is recognised over the period as set out in the specific supplier agreements and is recognised as a reduction to cost of sales. Supplier funding amounts that have been recognised and not invoiced are shown within accrued income on the balance sheet. Cash inflows for supplier funding received are classified as operating cash flows. Notes to the Group Financial Statements continued 169 Governance Financial Statements Investor information Strategic Report 3 Revenue and profit before interest and taxation continued Profit before interest and taxation for continuing operations is stated after charging / (crediting) the following: Year ended 30 April 2022 £m Year ended 1 May 2021 £m Depreciation of property, plant and equipment 62 79 Impairment of property, plant and equipment 6 5 Depreciation of right-of-use assets 190 200 Impairment of right-of-use assets 42 15 Impairment reversal of right-of-use assets (15) - Amortisation of acquisition intangibles 24 26 Impairment of acquisition intangibles - 8 Amortisation of other intangibles 62 57 Impairment of other intangibles 33 47 Impairment of inventory 72 80 Net impairment on financial assets (see note 14) - – Cost of inventory recognised as an expense 8,013 8,175 Cash flow hedge amounts reclassified and reported in income statement (28) 11 Government grant income (2) (6) Net foreign exchange gains (6) (2) Share-based payments expense 23 21 Other employee costs (see note 4) 985 1,054 Restructuring costs 11 54 Other exceptional income (19) (31) Regulatory income (1) (7) * Restructuring costs, other exceptional income and regulatory income are further detailed within note A5 of the glossary. Auditor’s remuneration comprises the following: Year ended 30 April 2022 £m Year ended 1 May 2021 £m Fees payable to the Company’s auditor for the audit of the Company’s annual accounts 0.1 0.1 Fees payable to the Company’s auditor and its associates for their audit of the Company’s subsidiaries 1.7 1.5 Total audit fees 1.8 1.6 Audit-related assurance services: Review of interim statement 0.2 0.2 Other assurance services - 0.2 Total audit and audit-related assurance services 2.0 2.0 Tax compliance services 0.1 0.1 Total audit and non-audit fees 2.1 2.1 170 Currys plc Annual Report & Accounts 2021/22 4 Employee costs and share-based payments a) Employee costs The aggregate remuneration recognised in the income statement for continuing operations is as follows: Year ended 30 April 2022 £m Year ended 1 May 2021 £m Salaries and performance bonuses 845 901 Social security costs 110 119 Other pension costs 30 34 985 1,054 Share-based payments 23 21 1,008 1,075 The average number of employees for continuing operations is: Year ended 30 April 2022 number Year ended 1 May 2021 (restated) number UK & Ireland 19,625 23,025 Nordics 10,984 10,399 Greece 2,923 2,663 33,532 36,087 * Figures for the year ended 1 May 2021 have been restated to reflect the change in operating segments reported to the Board as per IFRS 8 “Operating Segments”. The average number of employees for continuing operations previously disclosed for the UK & Ireland Electricals of 18,591 and UK & Ireland Mobile of 4,434 have been merged into the singular UK & Ireland operating segment. Compensation earned by key management, comprising the Board of Directors and senior Executives, is as follows: Year ended 30 April 2022 £m Year ended 1 May 2021 £m Short-term employee benefits 10 10 Share-based payments 6 4 16 14 Further information about individual directors’ remuneration, share interests, share options, pensions and other entitlements, which form part of these financial statements, is provided in the Remuneration Report. Notes to the Group Financial Statements continued 171 Governance Financial Statements Investor information Strategic Report 4 Employee costs and share-based payments continued b) Share-based payments Accounting policies Equity settled share-based payments are measured at fair value at the date of grant and expensed on a straight-line basis over the vesting period, based on an estimate of the number of shares that will eventually vest. A Monte Carlo model is used to measure fair value. For all schemes, the number of options expected to vest is recalculated at each balance sheet date, based on expectations of leavers prior to vesting. For schemes with internal performance criteria such as free cash flow, the number of options expected to vest is also adjusted based on expectations of performance against target. No adjustment is made for expected performance against external performance criteria such as TSR, because the likelihood that the performance criteria will be met is taken into account when estimating the fair value of the award on the grant date. The movement in cumulative expense since the previous balance sheet date is recognised in the income statement, with a corresponding entry in reserves. i) Share option schemes The Group offers discretionary awards of nil-priced options under the Long Term Incentive Plan (LTIP) to senior employees. Awards are granted annually and will usually vest after three years subject to continued service. Some awards are also subject to the achievement of performance conditions. For awards granted during the years ended 27 April 2019 and 2 May 2020, awards granted to Executive Directors and key management are subject to performance conditions. For awards issued to other senior management, awards are not subject to performance conditions. For awards granted during the years ended 1 May 2021 and 30 April 2022, all awards issued are subject to performance conditions, detailed below. For awards granted during the year ended 27 April 2019, performance conditions are based on a combination of relative TSR performance against the constituents of the FTSE 51-150 at the beginning of the performance period and cumulative free cash flow. For awards granted during the years ended 2 May 2020, 1 May 2021 and 30 April 2022, performance conditions are based on a combination of relative TSR performance against a bespoke comparator group of 22 European Special Line Retailers and other comparable companies and cumulative free cash flow. In February 2019, the Group launched the Colleague Shareholder Award which granted every permanent colleague with 12 months service at least £1,000 of options which will vest after three years. These awards are not subject to performance conditions. The following table summarises the number and weighted average exercise price (WAEP) of share options for these schemes: Year ended 30 April 2022 Year ended 1 May 2021 Number m WAEP £ Number m WAEP £ Outstanding at the beginning of the period 78 – 63 – Granted during the period 20 – 32 – Forfeited during the period (13) – (12) – Exercised during the period (21) – (5) – Outstanding at the end of the period 64 – 78 – Exercisable at the end of the period 3 – – – Year ended 30 April 2022 Year ended 1 May 2021 Weighted average market price of options exercised in the period £1.09 £1.01 Weighted average remaining contractual life of awards outstanding 8.3 yrs 8.5 yrs Exercise price for options outstanding £nil £nil 172 Currys plc Annual Report & Accounts 2021/22 4 Employee costs and share-based payments continued b) Share-based payments continued ii) SAYE scheme The Group has SAYE schemes which allow participants to save up to £500 per month for either three or five years. At the end of the savings period, participants can purchase shares in the Company based on a discounted share price determined at the commencement of the scheme. The following table summarises the number and WAEP of share options for these schemes: Year ended 30 April 2022 Year ended 1 May 2021 Number m WAEP £ Number m WAEP £ Outstanding at the beginning of the period 19 0.82 15 1.19 Granted during the period 8 0.93 14 0.67 Exercised during the period - 0.81 – 0.86 Forfeited during period (7) 0.98 (10) 1.1619 Outstanding at the end of the period 20 – 19 0.82 Exercisable at the end of the period - 0.97 1 1.53 Year ended 30 April 2022 Year ended 1 May 2021 Weighted average market price of options exercised in the period £1.12 £1.36 Weighted average remaining contractual life of awards outstanding 2.3 yrs 2.7 yrs Range of exercise prices for options outstanding £0.67 - £2.52 £0.67 – £3.77 iii) Fair value model The fair value of options was estimated at the date of grant using a Monte Carlo model. The model combines the market price of a share at the date of grant with the probability of meeting performance criteria, based on the historical performance of the Group. The weighted average fair value of options granted during the period was £0.79 (2020/21: £0.56). The following table lists the inputs to the model: Year ended 30 April 2022 Year ended 1 May 2021 Exercise price £nil – £0.93 £nil – £0.67 Dividend yield 0% – 3.8% 0% – 3.8% Historical and expected volatility 42% 41% Expected option life 4 – 10 yrs 4 – 10 yrs Weighted average share price £1.30 £0.91 The expected volatility reflects the assumption that the historical volatility is indicative of future trends. iv) Charge to the income statement and entries in reserves During the year ended 30 April 2022, the Group recognised a non-cash accounting charge to profit and loss of £23m (2020/21: £21m) in respect of equity settled share-based payments, with a corresponding credit through reserves. Notes to the Group Financial Statements continued 173 Governance Financial Statements Investor information Strategic Report 4 Employee costs and share-based payments continued c) Employee Benefit Trust (‘EBT’) 30 April 2022 1 May 2021 Market value £m Nominal value £m Number m Market value £m Nominal value £m Number m Investment in own shares 31 - 33.2 28 – 20.5 Maximum number of shares held during the period 48 - 51.9 28 – 20.5 The number of shares held by the EBT remain held for potential awards under outstanding plans. The costs of administering the EBT are charged to the income statement in the year to which they relate. Investment in own shares are recorded at cost and are recognised directly in equity within other reserves. The EBT acquired 34.7m of the Company’s shares during the year ended 30 April 2022 via market purchases for cash consideration of £41m. For the comparative period 4.1m shares were acquired at nominal value and 11.6m via market purchases for cash consideration of £13m. The EBT has waived rights to receive dividends and agrees to abstain from exercising their right to vote. The shares have not been allocated to specific schemes as further disclosed in the Directors’ Report. At 30 April 2022, the EBT held 2.9% (2020/21: 1.8%) of the issued share capital of the Company. 5 Net finance costs Accounting policies Net finance costs comprise both finance income and finance costs. Finance income for financial assets and finance costs for financial liabilities that are measured at amortised cost is calculated using the effective interest method. Finance income includes income on cash and cash equivalents and income on the unwind of the Network commission contract assets and receivables as further disclosed in note 14. Finance costs include interest costs in relation to financial liabilities, including lease liabilities which represent the unwind of the discount rate applied at the commencement date of the lease, and finance costs related to the groups defined benefit pension obligation. Year ended 30 April 2022 £m Year ended 1 May 2021 £m Unwind of discounts on trade and other receivables 2 6 Finance income 2 6 Interest on bank overdrafts, loans and borrowings (6) (8) Interest expense on lease liabilities (70) (77) Net interest on defined benefit pension obligations (8) (8) Amortisation of facility fees (2) (11) Other interest expense (12) (16) Finance costs (98) (120) Total net finance costs (96) (114) * In April 2021, the Group refinanced its existing debt with two new Revolving Credit Facilities. As such, all other facilities were cancelled as part of the refinancing and the fees relating to these facilities were subsequently written off. All finance costs in the above table represent interest costs of financial liabilities and assets, other than amortisation of facility fees which represent non-financial assets and net interest on defined benefit pension obligations which represent the net defined benefit liabilities. 174 Currys plc Annual Report & Accounts 2021/22 6 Tax Accounting policies Current tax Current tax is provided at amounts expected to be paid or recovered using the prevailing tax rates and laws that have been enacted or substantively enacted by the balance sheet date and adjusted for any tax payable in respect of previous years. Deferred tax Deferred tax liabilities are recognised for all temporary differences between the carrying amount of an asset or liability in the balance sheet and the tax base value and represent tax payable in future periods. Deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. No provision is made for tax that would have been payable on the distribution of retained profits of overseas subsidiaries or associated undertakings where it has been determined that these profits will not be distributed in the foreseeable future. Current and deferred tax is recognised in the income statement except where it relates to an item recognised directly in other comprehensive income or reserves, in which case it is recognised directly in other comprehensive income or reserves as appropriate. Deferred tax is measured at the average tax rates that are expected to apply in the years in which the timing differences are expected to reverse, based on tax rates and laws that have been enacted, or substantively enacted by the balance sheet date. Deferred tax assets and liabilities are offset against each other when they relate to income taxes levied by the same tax jurisdiction and when the Group intends to settle its current tax assets and liabilities on a net basis. Deferred tax balances are not discounted. a) Tax expense The corporation tax charge comprises: Year ended 30 April 2022 £m Year ended 1 May 2021 £m Current tax UK corporation tax at 19% (2020/21:19%) 14 7 Overseas tax 21 36 35 43 Adjustments made in respect of prior years: UK corporation tax 1 (12) Overseas tax 1 (1) 2 (13) Total current tax 37 30 Deferred tax UK tax 13 5 Overseas tax 8 (6) 21 (1) Adjustments in respect of prior years: UK corporation tax 8 5 Overseas tax 1 (1) 9 4 Total deferred tax 30 3 Total tax charge 67 33 * This is further disclosed in note 6(b)iii Tax related to discontinued operations is included in the figures set out in note 24. Notes to the Group Financial Statements continued 175 Governance Financial Statements Investor information Strategic Report 6 Tax continued b) Reconciliation of standard to actual (effective) tax rate The principal differences between the total tax charge shown above and the amount calculated by applying the standard rate of UK corporation tax to profit / (loss) before taxation are as follows: Year ended 30 April 2022 £m Year ended 1 May 2021 £m Profit before taxation 126 33 Tax at UK statutory rate of 19% (2020/21:19%) 24 6 Items attracting no tax relief or liability (i) (3) 12 Movement in unprovided deferred tax (ii) 37 16 Effect of change in statutory tax rate (5) 1 Differences in effective overseas tax rates 2 6 Increase in provisions 1 1 Adjustments in respect of prior years – provisions (iii) 1 (13) Adjustments in respect of prior years – other (iv) 10 4 Total tax charge 67 33 (i) Items attracting no tax relief or liability relate mainly to non-deductible depreciation and share based payments in the UK business. (ii) Deferred tax assets relating principally to tax losses in the UK business have not been recognised due to uncertainty over the Group’s ability to utilise the losses in the future. (iii) Provision releases in the prior year are predominantly where the window for recovery has now closed in relation to pre-merger uncertain tax positions. (iv) Other adjustments in respect of prior years are mainly due to lower tax relief on fixed assets through capital allowances in submitted tax returns. c) Deferred tax Accelerated capital allowances £m Retirement benefit obligations £m Losses carried forward £m Other temporary differences £m Total £m At 2 May 2020 (51) 53 39 56 97 (Charged) / credited directly to income statement (1) – (13) 11 (3) Credited to equity – 6 – – 6 At 1 May 2021 (52) 59 26 67 100 (Charged) / credited directly to income statement (22) - (14) 6 (30) Charged to equity - (24) - (3) (27) At 30 April 2022 (74) 35 12 70 43 Deferred tax comprises the following balances: 30 April 2022 £m 1 May 2021 £m Deferred tax assets 206 262 Deferred tax liabilities (163) (162) 43 100 Analysis of deferred tax relating to items (charged) / credited to equity in the period: Year ended 30 April 2022 £m Year ended 1 May 2021 £m Defined benefit pension schemes (24) 6 Other temporary differences (3) - (27) 6 176 Currys plc Annual Report & Accounts 2021/22 6 Tax continued c) Deferred tax continued The Group has total unrecognised deferred tax assets relating to gross tax losses of £1,757m (2020/21: £1,491m) of which £1,415m relates to the UK (2020/21: £1,459m). £1,052m (2020/21: £1,052m) of these losses relate to carried forward capital losses in the legacy Dixons Group. The balance of the losses relates to carried forward trading losses, principally due to the losses realised in the Carphone Warehouse business in the UK. A deferred tax asset has not been recognised in respect of the losses (£705m), other deductible temporary differences (£122m) and pension contributions (£118m) expected to reverse after the period of the Group’s 3-year plan which is used to determine the availability of future taxable profits. There were no temporary differences associated with non-distributable earnings of subsidiaries for which deferred tax liabilities had not been recognised at the end of the current period or the prior period. The Group has a current tax credit of £14m (2020/21: £7m) recognised through equity in relation to pensions. On 24 May 2021 the Finance Bill 2021 passed through all stages in the House of Commons and became substantively enacted, which included a legislative change to increase the rate of corporation tax to 25% with effect from 1 April 2023. 7 Earnings per share Year ended 30 April 2022 £m Year ended 1 May 2021 £m Total profit Continuing operations 59 – Discontinued operations - 12 Total 59 12 Million Million Weighted average number of shares Average shares in issue 1,165 1,166 Less average holding by Group EBT and Treasury shares held by Company (35) (14) For basic earnings per share 1,130 1,152 Dilutive effect of share options and other incentive schemes [xx] 42 For diluted earnings per share [xx] 1,194 Pence Pence Basic earnings per share Total (continuing and discontinued operations) 5.2 1.0 Adjustment in respect of discontinued operations - (1.0) Continuing operations 5.2 – Diluted earnings per share Total (continuing and discontinued operations) [xx] 1.0 Adjustment in respect of discontinued operations [xx] (1.0) Continuing operations [xx] – Basic and diluted earnings per share are based on the profit for the period attributable to equity shareholders. Notes to the Group Financial Statements continued 177 Governance Financial Statements Investor information Strategic Report 8 Goodwill Accounting policies On acquisition of a subsidiary or associate, the fair value of the consideration is allocated between the identifiable net tangible and intangible assets and liabilities on a fair value basis, with any excess consideration representing goodwill. At the acquisition date, goodwill is allocated to each group of Cash Generating Units (‘CGUs’) expected to benefit from the combination and held in the currency of the operations to which the goodwill relates. Goodwill is not amortised, but is assessed annually for impairment, or more frequently where there is an indication that goodwill may be impaired. Impairment is assessed by measuring the future cash flows of the group of CGUs to which the goodwill relates, at the level at which this is monitored by management. Where the future discounted cash flows or recoverable amount is less than the carrying value of goodwill, an impairment charge is recognised in the income statement. On disposal of subsidiary undertakings and businesses, the relevant goodwill is included in the calculation of the profit or loss on disposal. Cost £m As at 2 May 2020 3,028 Foreign exchange 48 As at 1 May 2021 3,076 Foreign exchange (37) As at 30 April 2022 3,039 Accumulated impairment £m As at 2 May 2020 and 1 May 2021 (225) Impairment - As at 30 April 2022 (225) Carrying amount £m As at 2 May 2020 2,803 As at 1 May 2021 2,851 As at 30 April 2022 2,814 No impairment charge has been recognised over goodwill in the current or prior period. a) Carrying value of goodwill The components of goodwill comprise the following businesses: 30 April 2022 £m 1 May 2021 £m UK & Ireland 1,840 1,840 Nordics 974 1,011 2,814 2,851 As part of the strategic review and change in information reported to the Board as described in note 2, the Group has merged the previously disclosed UK & Ireland Electricals and UK & Ireland Mobile operating segments into the combined UK & Ireland operating segment. As a result of the change, the goodwill previously allocated to the UK & Ireland Electricals CGU has been consolidated into the UK & Ireland CGU. 178 Currys plc Annual Report & Accounts 2021/22 8 Goodwill continued b) Goodwill impairment testing As required by IAS 36, goodwill is subject to annual impairment reviews. These reviews are carried out using the following criteria: • business acquisitions generate an attributed amount of goodwill; • the manner in which these businesses are run and managed is used to determine the CGU grouping as defined in IAS 36: ‘Impairment of Assets’; • the recoverable amount of each CGU Group is determined based on calculating its value in use (‘VIU’); • the VIU is calculated by applying discounted cash flow modelling to management’s own projections covering a three-year period; • cash flows beyond the three-year period are extrapolated using a long-term growth rate equivalent to long-term forecasts of Gross Domestic Product (‘GDP’) growth rates for the relevant market; and • the VIU is then compared to the carrying amount in order to determine whether impairment has occurred. The key assumptions used in calculating value in use are: • management’s projections; • the growth rate beyond three years; and • the pre-tax discount rate. The long term projections are based on Board approved budgets for 2022/23 together with the Board approved three-year strategic plan. These projections have regard to the relative performance of competitors and knowledge of the current market together with management’s views on the future achievable growth in market share and impact of the committed initiatives, including long term sustainability targets committed by the Group, any longer-term impact of the Covid-19 pandemic and any impact to the Group, inflationary or otherwise, as a result of the uncertain conflict arising in Eastern Europe. The cash flows which derive from these three-year projections include ongoing capital expenditure required to develop and upgrade the store network and e-commerce channels in order to maintain and operate the omnichannel businesses and to compete in their respective markets. In forming the three-year projections, management draws on past experience as a measure to forecast future performance. Key assumptions used in determining the three-year projections comprise the growth in sales and costs over this period. The compound annual growth rate in sales and costs can rise as well as fall year-on-year depending not only on the year three targets, but also on the current financial year base. These targets, when combined, accordingly drive the resulting profit margins and the profit in year three of the projections which is in turn used to calculate the terminal value in the VIU calculation. Historical amounts for the businesses under impairment review as well as from other parts of the Group are used to generate the values attributed to these assumptions. The value attributed to these assumptions for the most significant components of goodwill are as follows: 30 April 2022 1 May 2021 Compound annual growth in sales Compound annual growth in costs Growth rate beyond five years Pre-tax discount rate Compound annual growth in sales Compound annual growth in costs Growth rate beyond five years Pre-tax discount rate UK & Ireland 1.4% 0.9% 1.5% 10.6% (2.6)% (3.2)% 1.4% 8.7% Nordics 0.4% 0.3% 1.8% 9.6% 1.3% 1.3% 1.8% 7.8% Growth rates used were determined based on third-party long-term growth rate forecasts and are based on the GDP growth rate for the territories in which the businesses operate. The pre-tax discount rates applied to the forecast cash flows are based on a riskfree rate of interest appropriate to the geographic location of the cash flows related to the asset being tested. The risks specific to the asset are reflected as an adjustment to the future estimated cash flows. Pre-tax discount rates have been calculated using the capital asset pricing model, the inputs of which include a country risk-free rate, equity risk premium, Group size premium and a risk adjustment (beta). The discount rate is calculated by reference to a weighted average cost of capital (WACC) calculated by reference to an industry peer group of quoted companies using post-tax rates which are subsequently grossed up to a pre-tax rate. As disclosed above, the VIU is calculated using long-term projections that are based on Board approved budgets for 2022/23 together with the Board approved three-year strategic plan. This has been updated during the year ended 30 April 2022 from the previously adopted five-year projections and represents the information presented and approved by the board. For the year ended 1 May 2021, the Compound annual growth in sales and costs have therefore been restated for the UK & Ireland and Nordics CGUs. Notes to the Group Financial Statements continued 179 Governance Financial Statements Investor information Strategic Report 8 Goodwill continued c) Goodwill impairment sensitivity analysis In line with the assumptions noted above and highlighted in note 1d, the Group undertook an impairment review of the UK & Ireland group of CGUs, where £1,840m of goodwill is allocated. These impairment tests are prepared using the methodology required by IAS 36. The recoverable amount, based on value in use, shows headroom of £756m above the carrying amount of UK & Ireland CGU. Within the value in use model growth in sales and growth in costs assumptions drive the operating profit forecasts in line with the Group’s strategic plan. The key assumption within the value in use model is therefore the operating profit forecast in the strategic plan which is underpinned by the successful delivery of a number of key strategic initiatives that are either currently underway or committed. In accordance with IAS 36, the Group performed sensitivity analysis on the estimates of recoverable amounts and found that the excess of recoverable amount over the carrying amount of the UK & Ireland CGU would be reduced to nil as a result of a reasonably possible change in the key assumption. The recoverable amount would equal the carrying value if operating profit were reduced by 30% within the value in use model, and then extrapolated for the remainder of the forecast period including the period beyond the strategic plan. The directors do not consider that the relevant change in this assumption would have a consequential effect on other key assumptions. For the Nordics group of CGUs, where £974m of goodwill is allocated, the directors do not consider that any reasonably possible changes to the key assumptions would reduce the recoverable amount to its carrying value. 9 Intangible assets Accounting policies Acquisition intangibles Acquisition intangibles comprise brand names and customer relationships purchased as part of acquisitions of businesses and are capitalised and amortised over their useful economic lives on a straight-line basis. These intangible assets are stated at cost less accumulated amortisation and, where appropriate, provision for impairment in value or estimated loss on disposal. Amortisation is provided to write off the cost of assets on a straight-line basis as follows: Brands 7% – 13.3% per annum Customer relationships 13.3% per annum This amortisation is included in the income statement as an administrative expense and, as further described in note A5 of the glossary, this is recognised as an adjusting item. Software and licences Software and licences include costs incurred to acquire the assets as well as internal infrastructure and design costs incurred in the development of software in order to bring the assets into use. Internally generated software is recognised as an intangible asset only if it can be separately identified, it is probable that the asset will generate future economic benefits which exceed one year, and the development cost can be measured reliably. Where these conditions are not met, development expenditure is recognised as an expense in the year in which it is incurred. Costs associated with maintaining computer software are recognised as an expense as incurred unless they increase the future economic benefits of the asset, in which case they are capitalised. The expenditure capitalised includes the cost of materials, direct labour and an appropriate proportion of overheads. Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. Software is stated at cost less accumulated amortisation and, where appropriate, provision for impairment in value or estimated loss on disposal. Amortisation is provided to write off the cost of assets on a straight-line basis between three and ten years, and is recorded in administrative expenses. Intangible assets are assessed on an ongoing basis to determine whether circumstances exist that could lead to the conclusion that the net book value is not supportable. Where assets are to be taken out of use, an impairment charge is levied. Where the intangible assets form part of a separate CGU, such as a store or business unit, and business indicators exist which could lead to the conclusions that the net book value is not supportable, the recoverable amount of the CGU is determined by calculating its value in use. The value in use is calculated by applying discounted cash flow modelling to management’s projection of future profitability and any impairment is determined by comparing the net book value with the value in use. 180 Currys plc Annual Report & Accounts 2021/22 9 Intangible assets continued Acquisition intangibles Brands £m Customer relationships £m Sub-total £m Software and licences £m Total £m Balance at 2 May 2021 191 – 191 235 426 Additions - - - 83 83 Amortisation (24) - (24) (62) (86) Impairment - - - (33) (33) Disposals - - - - - Foreign exchange (3) - (3) (2) (5) Balance at 30 April 2022 164 - 164 221 385 Cost 369 73 442 883 1,325 Accumulated amortisation and impairment losses (205) (73) (278) (662) (940) Balance at 30 April 2022 164 - 164 221 385 Included in net book value as at 30 April 2022 Assets in the course of construction - - - 9 9 Acquisition intangibles Brands £m Customer relationships £m Sub-total £m Software and licences £m Total £m Balance at 3 May 2020 218 2 220 249 469 Additions – – – 84 84 Amortisation (24) (2) (26) (57) (83) Impairment (8) – (8) (47 ) (55) Disposals – – – (1) (1) Foreign exchange 5 – 5 7 12 Balance at 1 May 2021 191 – 191 235 426 Cost 372 73 445 802 1,247 Accumulated amortisation and impairment losses (181) (73) (254) (567) (821) Balance at 1 May 2021 191 – 191 235 426 Included in net book value as at 1 May 2021 Assets in the course of construction – – – 50 50 During the year ended 30 April 2022 management took the decision to stop selling its credit-based mobile offer which resulted in a £24m impairment of intangible assets. The Group continues the operational roll out of its long term strategic plan in moving towards a full omnichannel offering, bringing stores and online together, giving customers the best of both worlds at scale. This change, accelerated by the pandemic, has resulted in the identification of a material non-cash impairment charge over intangible assets of £8m (2020/21: £46m), primarily related to software development costs as the Group moves towards best-in-class cloud-based solutions to achieve operational efficiencies and improve the customer journey. During the year ended 1 May 2021, an £8m impairment was recognised over acquisition intangibles, that arose on the Dixons Retail Merger, following the decision to close the Dixons Travel business during the year ended 1 May 2021. Further information on the impairments recognised in the year is disclosed in note A5. Notes to the Group Financial Statements continued 181 Governance Financial Statements Investor information Strategic Report 9 Intangible assets continued Individually material intangible assets Customer relationships and brands include intangible assets which are considered individually material to the financial statements. The primary intangible assets, their net book values and remaining amortisation periods are as follows: 30 April 2022 1 May 2021 Net book value £m Remaining amortisation period Years Net book value £m Remaining amortisation period Years Currys 83 8 94 9 Elgiganten 36 8 43 9 Elkjøp 27 8 31 9 Gigantti 18 8 22 9 10 Property, plant and equipment Accounting policies Property, plant and equipment are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Assets under construction are held at cost less any accumulated impairment losses. Cost includes the original purchase price of the asset, costs attributable to bringing the asset to the location and condition necessary for intended use and any capitalised borrowing costs. Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates while maintenance related costs are recognised in the income statement when incurred. With the exception of land, depreciation is provided to write off the cost of the assets over their expected useful lives from the date the asset was brought into use or capable of being used on a straight-line basis. Rates applied to different classes of property, plant and equipment are as follows: Land and buildings 1.7% – 4% per annum Fixtures, fittings and equipment 10% – 33.3% per annum Property, plant and equipment are assessed on an ongoing basis to determine whether circumstances exist that could lead to the conclusion that the net book value is not supportable. Where assets are to be taken out of use, an impairment charge is levied. Where the property, plant and equipment form part of a separate CGU, such as a store, and business indicators exist which could lead to the conclusions that the net book value is not supportable, the recoverable amount of the CGU is determined by calculating its value in use. The value in use is calculated by applying discounted cash flow modelling to management’s projection of future profitability and any impairment is determined by comparing the net book value with the value in use. 182 Currys plc Annual Report & Accounts 2021/22 10 Property, plant and equipment continued Land and buildings £m Fixtures, fittings and other equipment £m Total £m Balance at 2 May 2021 28 156 184 Additions 20 30 50 Depreciation (8) (54) (62) Disposals - - - Impairment (4) (2) (6) Foreign exchange - (4) (4) Balance as at 30 April 2022 36 126 162 Cost 70 681 751 Accumulated depreciation (34) (555) (589) Balance as at 30 April 2022 36 126 162 Included in net book value as at 30 April 2022 Assets in the course of construction - 8 8 Land and buildings £m Fixtures, fittings and other equipment £m Total £m Balance at 3 May 2020 25 215 240 Additions 9 17 26 Depreciation (6) (73) (79) Disposals – (2) (2) Impairment – (5) (5) Foreign exchange – 4 4 Balance as at 1 May 2021 28 156 184 Cost 61 702 763 Accumulated depreciation (33) (546) (579) Balance as at 1 May 2021 28 156 184 Included in net book value as at 1 May 2021 Assets in the course of construction – 15 15 Notes to the Group Financial Statements continued 183 Governance Financial Statements Investor information Strategic Report 11 Right-of-use assets Accounting policies Right-of-use assets are recognised at the commencement of the lease, when the underlying asset becomes available for use, and comprises the initial measurement of the corresponding lease liability, lease payments made at or before the commencement date, any initial direct costs and any dilapidation costs less any lease incentives received upon initial recognition. They are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any subsequent remeasurements of lease liabilities. Right-of-use assets are depreciated on a straight-line basis over the shorter period of lease term and useful life of the underlying asset. Variable rents that do not depend on an index or rate are not included in the measurement of the lease liability and the right- of-use asset. The related payments are recognised as an expense in the period in which the event or condition that triggers those payments occurs. 30 April 2022 £m 1 May 2021 £m Land and buildings 983 1,026 Vehicles, equipment and other 25 25 1,007 1,051 Additions to the right-of-use assets for the period were £187m (2020/21: £137m). The total cash outflow for leases amounts to £278m (2020/21: £310m). Amounts recognised in the Consolidated Income Statement 30 April 2022 £m 1 May 2021 £m Depreciation expense on right-of-use assets: Land and buildings 180 191 Vehicles, equipment and other 10 9 Total depreciation on right-of-use assets 190 200 Impairment of right-of-use assets 42 15 Impairment reversal of right-of-use assets (15) - Interest expense on lease liabilities 70 77 Expense relating to short-term leases 11 10 Expense relating to leases of low value assets 1 1 Expense relating to variable lease payments not included in the measurement of the lease liability 2 5 Income from subleasing right-of-use assets - (3) 184 Currys plc Annual Report & Accounts 2021/22 12 Lease receivables Accounting policies A lease is classified as a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration. The Group as a lessor The Group is a lessor predominantly when subleasing retail store properties that are no longer open for trading. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. Amounts due from lessees under finance leases are recognised as receivables at the amount of the Group’s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the Group’s net investment outstanding in respect of the leases. Under IFRS 16, an intermediate lessor accounts for the head lease and sublease as two separate contracts. The intermediate lessor is required to classify the sublease as a finance or operating lease by reference to the right-of-use asset arising from the head lease. The Group’s finance lease arrangements do not include variable payments. 30 April 2022 £m 1 May 2021 £m Net investment in the lease analysed as: Recoverable after 12 months 3 3 Recoverable within 12 months 1 1 4 4 The Group applies the simplified model in accordance with IFRS 9 to recognise lifetime expected credit losses on lease receivables. The value of the expected credit loss on lease receivables is immaterial. The Group is not exposed to foreign currency risk as a result of the lease arrangements, as all leases are denominated in functional currency. 30 April 2022 £m 1 May 2021 £m Undiscounted amounts receivable under finance leases: Year 1 1 1 Year 2 1 1 Year 3 1 1 Year 4 1 1 Year 5 1 1 Onwards - – Undiscounted amounts receivable 5 5 Less: unearned finance income (1) (1) Net investment in the lease 4 4 Notes to the Group Financial Statements continued 185 Governance Financial Statements Investor information Strategic Report 13 Inventory Accounting policies Inventories are stated at the lower of cost and net realisable value, and on a weighted average cost basis. Cost comprises direct purchase cost and those overheads that have been incurred in bringing the inventories to their present location and condition less any attributable discounts and bonuses received from suppliers in respect of that inventory. Net realisable value is based on estimated selling price, less further costs expected to be incurred to disposal. Provision is made for obsolete, slow moving or defective items where appropriate. Certain purchases of inventories may be subject to cash flow hedges to address foreign exchange risk. Where this is the case a basis adjustment is made; the initial cost of hedged inventory is adjusted by the associated gain or loss transferred from the cash flow hedge reserve. 30 April 2022 £m 1 May 2021 £m Finished goods and goods for resale 1,286 1,178 14 Trade and other receivables Accounting policies Trade receivables are initially measured at their transaction price. Where there is a significant financing component, trade and other receivables are discounted at contract inception using a discount rate that is at an arm’s length basis and such that would be reflected in a separate financing transaction between the Group and the customer. Other receivables are initially measured at fair value plus transaction costs that are directly attributable to the acquisition or issue of the financial asset. Subsequently, trade and other receivables are measured at amortised cost. The loss allowance for trade receivables, accrued income and contract assets is measured using simplified approach (lifetime expected credit losses). Loss allowance for other debtors is measured using 12-months expected credit losses unless there was a significant increase in credit risk and then the loss allowance is measured using lifetime expected credit losses. See note 25 for further disclosures. 30 April 2022 £m 1 May 2021 £m Trade receivables 419 347 Less expected credit loss allowances (29) (21) 390 326 Contract assets 180 220 Prepayments 82 55 Other receivables 56 60 Accrued income 111 64 819 725 Non-current 123 138 Current 696 587 819 725 The majority of trade and other receivables are non-interest bearing. Non-current receivables mainly comprise commission receivable on sales, as described below. In the comparative period, included within other receivables is £3m of government grants receivable. This related to compensation for expenses already incurred by the Group that had been pledged by national governments in light of the Covid-19 pandemic. This is further disclosed in note 29. 186 Currys plc Annual Report & Accounts 2021/22 14 Trade and other receivables continued As set out in the table below, adjustments are made in the trade receivables balance for expected credit loss allowances. 30 April 2022 1 May 2021 Gross trade receivables £m Expected credit loss allowances £m Net trade receivables £m Gross trade receivables £m Expected credit loss allowances £m Net trade receivables £m Ageing of gross trade receivables and expected credit loss allowances: Not yet due 347 (5) 342 308 (1) 307 Past due: Under two months 29 (1) 28 13 (1) 12 Two to four months 6 (1) 5 5 (1) 4 Over four months 37 (22) 15 21 (18) 3 72 (24) 48 39 (20) 19 419 (29) 390 347 (21) 326 Movements in the expected credit loss allowances for trade receivables is as follows: 30 April 2022 £m 1 May 2021 £m Opening balance (21) (26) Charged to the income statement (14) (2) Receivables written off as irrecoverable 2 4 Amounts recovered during the year 4 3 Disposal of business - 1 Closing balance (29) (21) Management also consider the counter party risk relating to its accrued income balance, which comprises amounts where the Group has fulfilled its performance obligations but not yet invoiced. The amounts are primarily due from large multi-nationals and blue chip companies and hence the loss allowances made are not material. Further details with regards to trade receivables credit risk are included in note 25. Contract assets 30 April 2022 £m 1 May 2021 £m Insurance commission contract assets 5 12 Network commission contract assets 175 207 180 220 The Group recognises contract assets where the performance obligations have been met but the right to consideration from the customer is conditional on something other than the passage of time. This occurs on both insurance commission revenue and network commission revenue as detailed in the accounting policies in note 3. Upon the initial recognition of revenue from contracts with customers, the Group considers the risk profile for amounts due from network and insurance customers based on historical experience and forward looking information in accordance with IFRS 15. As such, credit risk is factored into the initial recognition of revenue, while contract assets are adjusted at each reporting date to reflect the future expected value. Therefore, no further expected credit loss is recognised as it is included within the initial measurement of the Group’s contract assets. Further information is disclosed in note 25, while additional information on the measurement of expected consideration is detailed below. Notes to the Group Financial Statements continued 187 Governance Financial Statements Investor information Strategic Report 14 Trade and other receivables continued Network commission contract assets and receivables As described in the accounting policies in note 3, the revenue earned by the Group for the acquisition of consumers on behalf of third-party network operators is subject to variable consideration. Some consideration is paid by the MNOs at the time of connection with the remainder paid over the duration of the consumer’s contractual relationship with the MNO which is usually between one and five years. Whilst the underlying contract with the consumer predominately constitutes a fixed monthly value, variability arises due to future expected behaviour of such consumers after the point of connection. Under IFRS 15: ‘Revenue from Contracts with Customers’ the Group only recognises revenue to the extent that it is highly probable that there will not be a significant reversal in the future. Determining the amount of revenue to recognise is judgemental and subject to a degree of estimation uncertainty in particular due to the nature of the variable revenue constraint applied in line with IFRS 15 as described in note 1d. In previous periods, the Group has estimated such revenue with a high level of accuracy, as evidenced and regularly monitored by the level of cash the Group receives from MNOs in the periods subsequent to acquiring consumers on their behalf. In determining the amount of revenue to recognise, the Group estimates the amount that it expects to receive in respect of each consumer based on historical trends and anticipated changes in consumer behaviour. The Group also discusses and analyses emerging behavioural trends with the respective MNOs, considers external sources of industry and market analysis and models the impact of potential regulatory changes, if any are proposed. A discounted cash flow methodology is used to measure the expected consideration, by estimating all future cash flows that will be received from the MNO and discounting these based on the timing of receipt. The key inputs to the model are: • revenue share percentage – the percentage of the consumer’s spend (to the MNO) to which the Group is entitled; • minimum contract period – the length of contract entered into by the consumer; • out-of-bundle spend – additional spend by the consumer measured as a percentage of contractual spend; • consumer default rate – rate at which consumers disconnect from the MNO; • spend beyond the initial contract period – period of time the consumer remains connected to the MNO after the initial contract term; and • upgrade propensity – the percentage of consumers initially connected by the Group estimated to be subsequently upgraded by an MNO. Having estimated the expected consideration, the Group applies a constraint to reduce to a level where any future significant reversal of revenue would be considered highly improbable. Management makes a regular assessment of historical amounts and market data to ensure that the amounts recognised still meet the requirements of IFRS 15. In the current year ended 30 April 2022, the net revaluation recognised from performance obligations satisfied in previous periods was an increase of £43m (2020/21: £3m). 188 Currys plc Annual Report & Accounts 2021/22 14 Trade and other receivables continued Network commission contract assets and receivables continued Amounts recognised in the financial statements in respect of such variable consideration are summarised and reconciled from prior year below: Note 30 April 2022 £m 1 May 2021 £m Gross network commission receivable and contract asset: Opening balance (i) 405 1,005 Less: amounts received in advance from MNOs (166) (389) Net network commission receivable and contract asset: Opening balance (ii) 239 616 Revenue recognised in respect of current year sales (iii) 337 388 Revaluation of opening network commission contract asset (iv) 22 14 Revenue recognised / (reversed) in respect of prior period sales not previously included in the estimation of revenue recognised (v) 21 (11) Revenue recognised in respect of prior period sales 43 3 Revenue recognised in the period 380 391 Cash received from mobile network operators (vi) (431) ( 7 74) Movements due to the effect of discounting 2 6 Net network commission receivable and contract asset: closing balance (vii) 190 239 Comprising: Net network commission receivable and contract asset in more than one year 84 100 Net network commission receivable and contract asset in less than one year 106 139 190 239 Less amount billed (network commission trade receivable) (viii) (15) (32) Net network commission contract asset (ix) 175 207 i. Net of discounting for the time value of money. The unwind of this discounting is recognised as finance income in the relevant period. The amount of related finance income within the year, as shown in the table above, was £2m (2020/21: £6m). ii. Payment terms with the MNOs are based on a mix of cash received upon connection and future payments as the MNO receives monthly instalments from end consumers over the life of the consumer contract. This balance shows the net amounts receivable from the MNOs. Further information is included below to explain the classification split of this balance between trade receivables and contract assets. iii. This relates to revenue recognised from connections made in the current year. This revenue is recognised at point of sale as explained within the accounting policies in note 3. This figure includes in-year adjustments to the carrying value of revenue recognised (net of constraints) where the estimated consideration has changed since point of recognition within the year. iv. The Group continues to monitor the level of this revaluation as an indicator of estimation uncertainty in respect of previously recognised variable consideration. The current year reflects a positive revaluation of the prior period contract asset and is what the Group would expect as a result of the variable revenue constraint under IFRS 15. This revaluation of £22m (2020/21: £14m) discussed above is the figure that has historically been used by the Group to monitor the accuracy of assumptions made in previous periods and is excluded from measuring the performance of the UK & Ireland segment in our alternative performance measures as explained within the glossary to the Annual Report. This amount is also presented as the Group has received feedback from certain stakeholders that its separate presentation is helpful, in order to present more clearly the underlying performance in year. v. These amounts were not previously recognised as revenue due to the application of the constraint (described above) and include a value of £11m (2020/21: £6m) relating to the uplift in the profit share the Group receives associated with RPI on commission receivable where the performance obligations were satisfied in prior periods. These amounts also include other out of period amounts settled with MNOs in respect of prior period transactions of £10m (2020/21: £(17)m). As the Group does not recognise an estimate of these amounts within revenue at the point of sale, they are recognised in revenue within each financial year once the amounts for that period are known. Therefore, the RPI uplift and the other out of period amounts settled with MNOs are included within the Group’s alternative performance measures as explained within the glossary to the Annual Report. vi. Cash received in the period. For the prior year this includes the cash settlement of £189m received from EE on 1 April 2021 to settle the outstanding EE network debtor receivable. The majority of this payment was previously expected over the course of 2021/22 and 2022/23. vii. Gross network receivable and contract asset balance of £281m, offset by amounts received in advance of £91m. This is in line with the explanation in (ii) above. viii. Amounts that have been invoiced to the network operators and are no longer conditional on something other than the passage of time. These amounts are therefore classified as trade receivables. ix. This is the contract asset element of the network commissions receivable. This is variable based on future consumer behaviour and hence conditional on something other than the passage of time therefore as per IFRS 15 this is classified as a contract asset. Notes to the Group Financial Statements continued 189 Governance Financial Statements Investor information Strategic Report 15 Cash and cash equivalents Accounting policies Cash and cash equivalents are classified as held at amortised cost, comprising cash at bank and in hand, bank overdrafts and short term highly liquid deposits which have an orignal maturity of less than three months, are available on demand and are subject to an insignificant risk of changes in value. Bank overdrafts, which form part of cash and cash equivalents for the purpose of the cash flow statement, are shown under current liabilities and further disclosed in note 18. Cash and cash equivalents include restricted cash which predominantly comprises funds held by the Group’s insurance businesses to cover regulatory reserve requirements. These funds are not available to offset the Group’s borrowings. 30 April 2022 £m 1 May 2021 £m Cash at bank and on deposit 126 175 Included within cash and cash equivalents is £30m (2020/21: £35m) of restricted cash. 16 Trade and other payables Accounting policies Trade and other payables are initially recorded at fair value and subsequently measured at amortised cost. Contract liabilities predominantly relate to the sale of customer support agreements. Revenue is recognised in full as each performance obligation is satisfied under the contracts with the customer. Where consideration is received in advance of the performance of the obligations being satisfied, a contract liability is recognised. Due to the cancellation options and customer refund clauses, contract terms have been assessed to either be monthly or a series of day to day contracts with revenue recognised respectively in the month to which payment relates, or on a ‘straight-line’ basis. 30 April 2022 1 May 2021 Current £m Non-current £m Current £m Non-current £m Trade payables 1,614 - 1,420 – Other taxes and social security 221 - 236 – Other creditors 1 - 1 – Contract liabilities 215 88 203 92 Accruals 317 8 373 5 2,368 96 2,233 97 The carrying amount of trade and other payables approximates their fair value. Contract liabilities 30 April 2022 £m 1 May 2021 £m Opening balance 295 276 Revenue recognised in the period that was included in the opening balance (162) (165) Increase in contract liabilities in the period not yet recognised in revenue 170 184 Closing balance 303 295 190 Currys plc Annual Report & Accounts 2021/22 17 Contingent consideration Accounting policies On initial recognition, contingent consideration is measured at fair value using the income approach. Contingent consideration that does not qualify as a measurement period adjustment is subsequently remeasured to fair value at each reporting date with changes in fair value recognised in profit or loss. 30 April 2022 £m 1 May 2021 £m Opening balance 2 3 Settlements (2) (1) Closing balance – 2 During the year the Group cash settled the final instalment of earn-out consideration, totalling £2m, for the previously acquired Epoq kitchen business. For the year ended 1 May 2021 £2m remained contingent on the performance of the Epoq kitchen business against earnings growth targets following the balance sheet date. The fair value of contingent consideration arrangements had previously been estimated by applying the income approach. 18 Loans and other borrowings Accounting policies Borrowings in the Group’s balance sheet represent bank loans drawn under committed and uncommitted facilities. Borrowings are initially recorded at fair value less attributable transaction costs. Transaction fees such as bank fees and legal costs associated with the securing of financing are capitalised and amortised through the income statement over the term of the relevant facility. All other borrowing costs are recognised in the income statement in the period in which they are incurred. Subsequent to initial recognition, borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the income statement over the period of the borrowings on an effective interest basis. Bank overdrafts, which form part of cash and cash equivalents for the purpose of the cash flow statement, are classified as held at amortised cost. 30 April 2022 £m 1 May 2021 £m Current liabilities Bank overdrafts 2 6 Loans and other borrowings – – 2 6 Non-current liabilities Loans and other borrowings 80 – 82 6 Notes to the Group Financial Statements continued 191 Governance Financial Statements Investor information Strategic Report 18 Loans and other borrowings continued Committed facilities In April 2021, the Group refinanced its existing debt with two new Revolving Credit Facilities totalling £543m (2020/21: £551m), which were initially due to expire in April 2025. In April 2022, the Group extended these two facilities by 1 year to expire in April 2026. As part of the refinancing all other facilities available to the Group in April 2021 were cancelled. The Group’s facilities available throughout the current and prior year are detailed below. £200m Revolving Credit Facility In April 2021, the Group signed a £200m Revolving Credit Facility (‘RCF’) with a number of relationship banks which was initially due to expire in April 2025. In April 2022, this facility was extended by 1 year to expire in April 2026. The interest rate payable for drawings under this facility is at a margin over risk free rates (or other applicable interest basis) for the relevant currency and for the appropriate period. The actual margin applicable to any drawing depends on the fixed charges cover ratio calculated in respect of the most recent accounting period. A non-utilisation fee is payable in respect of amounts available but undrawn under this facility and a utilisation fee is payable when aggregate drawings exceed certain levels. At 30 April 2022, the Group had drawn down on this facility by £80m. This facility was undrawn as at 1 May 2021. NOK 4,036m Revolving Credit Facility In April 2021, the Group signed a NOK 4,036m (£343m) (2020/21: £351m) RCF with a number of relationship banks which initially due to expire in April 2025. In April 2022, this facility was extended by 1 year to expire in April 2026. This is on broadly similar terms to the £200m facility. This facility was undrawn as at 30 April 2022 and 1 May 2021. Facilities previously available that have now lapsed or been cancelled £800m Revolving Credit Facility In October 2015, the Group signed a five-year £800m RCF with a number of relationship banks; this facility was extended in October 2016 and 2017 by an additional year and the facility was due to expire in October 2022. The interest rate payable for drawings under this facility was at a margin over LIBOR (or other applicable interest basis) for the relevant currency and for the appropriate period. The actual margin applicable to any drawing depended on the fixed charges cover ratio calculated in respect of the most recent accounting period. A non-utilisation fee was payable in respect of amounts available but undrawn under this facility and a utilisation fee was payable when aggregate drawings exceeded certain levels. This facility was cancelled in April 2021. £250m Revolving Credit Facility In October 2016, the Group signed a four-year £250m RCF with a group of relationship banks; this facility was on broadly similar terms to the £800m RCF; this facility was extended in February 2019 by an additional two years and the facility was due to expire in October 2022. This facility was cancelled in April 2021. £266m Revolving Credit Facility In April 2020, the Group signed a one-year £266m RCF to mitigate any potential impact of the Covid-19 pandemic with a group of relationship banks; this facility was on broadly similar terms to the £800m and £250m RCF. The facility was due to expire in April 2021 and was cancelled in February 2021 with no amounts having been drawn down. €50m term loan The Group had access to a €50m term loan with BBVA. The terms of this facility were broadly similar to the £800m and £250m RCF. This facility expired in October 2020. Uncommitted facilities The Group also has overdrafts and short-term money market lines from UK and European banks denominated in various currencies, all of which are repayable on demand. Interest is charged at the market rates applicable in the countries concerned and these facilities are used to assist in short-term liquidity management. Total available facilities are £70m (2020/21: £70m). All borrowings are unsecured. 192 Currys plc Annual Report & Accounts 2021/22 19 Lease Liabilities Accounting policies The Group as a lessee The Group’s leasing activities predominantly relate to retail store properties and distribution properties as well as distribution vehicle fleet. The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets (which comprise IT equipment and small items of office furniture). For these leases, the Group recognises the lease payments as an operating expense on a straight-line basis over the term of the lease with no corresponding right-of use asset. Lease liabilities The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the incremental borrowing rate and subsequently held at amortised cost in accordance with IFRS 9. The incremental borrowing rate is determined based on a series of inputs including: the risk-free rate based on government bond rates; a country-specific risk adjustment; and a credit risk adjustment. This is the rate that the Group would have to pay for a loan of a similar term, and with similar security, to obtain an asset of similar value. Lease payments included in the measurement of the lease liability comprise: • Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable; • Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date; • The amount expected to be payable by the lessee under residual value guarantees; • The exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and • Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease. The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever: • The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate. • The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used). • A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification. 30 April 2022 £m 1 May 2021 £m Analysed as: Current 210 216 Non-current 1,057 1,110 1,267 1,326 Total undiscounted future committed payments due are as follows: 30 April 2022 £m 1 May 2021 £m Amounts due: Year 1 260 271 Year 2 236 253 Year 3 222 227 Year 4 187 200 Year 5 161 162 Onward 485 534 1,551 1,647 The Group does not face a significant liquidity risk with regard to its lease liabilities. Lease liabilities are monitored within the Group’s Treasury function. Notes to the Group Financial Statements continued 193 Governance Financial Statements Investor information Strategic Report 20 Provisions Accounting policies Provisions are recognised when a legal or constructive obligation exists as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are discounted where the time value of money is considered to be material. Provisions for onerous contracts are recognised when the Group believes that the unavoidable costs of meeting or exiting the contract exceed the economic benefits expected to be received under the contract. Where the Group has assets dedicated to the fulfilment of a contract that cannot be redirected, an impairment loss is recognised before a separate provision for an onerous contract. A restructuring provision is recognised when the Group has developed a detailed formal plan for the restructuring, and has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement the plan or announcing its main features to those affected by it. The measurement of a restructuring provision includes only the direct expenditures arising from the restructuring, which are those amounts that are both necessarily entailed by the restructuring and not associated with the ongoing activities of the entity. All provisions are assessed by reference to the best available information at the balance sheet date. 30 April 2022 Reorganisation £m Sales £m Property £m Other £m Total £m At the beginning of the period 10 7 51 17 85 Additions 16 55 - - 71 Released in the period (1) - (17) (1) (19) Utilised in the period (15) (49) (10) (4) (78) Foreign exchange - - - - - At the end of the period 10 13 24 12 59 Analysed as: Current 9 12 20 7 48 Non-current 1 1 4 5 11 10 13 24 12 59 1 May 2021 Reorganisation £m Sales £m Property £m Other £m Total £m At the beginning of the period 39 7 64 40 150 Additions 54 10 21 5 90 Released in the period (6) – (22) (19) (47) Utilised in the period (77) (11) (12) (9) (109) Foreign exchange – 1 – – 1 At the end of the period 10 7 51 17 85 Analysed as: Current 10 5 34 9 58 Non-current – 2 17 8 27 10 7 51 17 85 194 Currys plc Annual Report & Accounts 2021/22 20 Provisions continued Reorganisation Reorganisation provisions of £3m have been provided for following management’s decision to stop selling its credit-based mobile offer. This amount represents the unavoidable costs the Group is obligated to pay for services over the next two years which are not applicable to its post-pay mobile offer. In addition, £7m relates to redundancy costs for employees who are still employed at the reporting date but will be departing within the following 12 months. Reorganisation provisions are only recognised when a detailed formal plan is in place and it has been communicated to those affected. Sales Sales provisions relate to product and service warranties. The anticipated costs of these are assessed by reference to historical trends and any other information that is considered relevant. Management estimates the related provision for future related claims based on historical information, as well as recent trends that might suggest that past cost information might differ from future claims. Property Following the previously announced store closure programmes, the Group has a number of present obligations related to its property portfolio that are explicitly excluded from the measurement of lease liabilities in accordance with IFRS 16. As such, at the reporting date the Group has onerous contracts for unavoidable store closure costs including service fees, legal costs and dilapidations of £23m primarily relating to the Currys PCWorld 3-in-1 programme and Carphone Warehouse store closures in the UK and Ireland. Provisions for the costs described above are only recognised where there is a definitive business decision to exit a leased property, it is believed the unavoidable cost of meeting or exiting the obligations exceed the expected benefit to be received and after any impairment being recorded over right-of-use and store related assets in accordance with IAS 36. The amounts of future expenditures for store closure costs are reviewed throughout the year and are based on readily available information at the reporting date as well as management’s historical experience of similar transactions. Of the £23m related to closure programmes announced in prior periods, utilisation is to be incurred in conjunction with the profile of the leases to which they relate. The longest lease will unwind over the next 8 years. Where appropriate and in the interests of the Group, management will proactively seek to exit any liabilities early. Where there is a substantive expectation that the unavoidable costs provided for will be reduced as a result of exit negotiations, the provision will be remeasured based on the best available information and an amount released, as seen in the period. In addition and as announced in the prior reporting period, management made the decision to close the Dixons Travel business. The Group has a provision of £1m as at 30 April 2022 which represents its remaining obligations under these contracts, which is expected to be utilised in full within the following 12 months. Other Other provisions predominantly relate to regulatory costs, data incident costs, and warranties in relation to discontinued operations. In the year ended 27 April 2019 the Group reported that it was subject to a £29m fine imposed by the FCA following the conclusion of an investigation into historical Geek Squad mobile phone insurance selling processes for a period prior to June 2015. The Group ran two voluntary customer redress programmes which led to the refund of £1.5m paid in the year ended 2 May 2020. The Group subsequently received claims from a number of customers who believe they were mis-sold Geek Squad policies. All customer claims are carefully considered by the Group on a case by case basis with the majority of claims received being invalid and no new claims having been received during the period. Nevertheless, the volume and value of outstanding claims remains uncertain with utilisation of the provision expected to be incurred over the next two years as the Group continues to co-operate with the relative authorities. Management estimates the related provision based on historical claims information and applying this against any remaining potential claimants using an expected value approach. As at 30 April 2022, this particular provision had a carrying value of £11m (2020/21: £13m), with a release of £1m recognised in the income statement during the period. In determining the amounts to be provided management have considered the utilisation profile and do not consider the time value of money to be material. Notes to the Group Financial Statements continued 195 Governance Financial Statements Investor information Strategic Report 21 Retirement and other post-employment benefit obligations Accounting policies Company contributions to defined contribution pension schemes and contributions made to state pension schemes for certain overseas employees are charged to the income statement on an accruals basis when employees have rendered service entitling them to the contributions. For defined benefit pension schemes, the difference between the market value of the assets and the present value of the accrued pension liabilities is shown as an asset or liability in the consolidated balance sheet. The calculation of the present value is determined using the projected unit credit method. Actuarial gains and losses arising from changes in actuarial assumptions together with experience adjustments and actual return on assets are recognised in the consolidated statement of comprehensive income and expensed as they arise. Such amounts are not reclassified to the income statement in subsequent years. Defined benefit costs recognised in the income statement comprise mainly of net interest expense or income with such interest being recognised within finance costs. Net interest is calculated by applying the discount rate to the net defined benefit liability or asset taking into account any changes in the net defined benefit obligation during the year as a result of contribution or benefit payments. 30 April 2022 £m 1 May 2021 £m Retirement benefit obligations – UK 257 482 – Nordics - – 257 482 The Group operates a defined benefit and a number of defined contribution schemes. The principal scheme which operates in the UK includes a funded final salary defined benefit section whose assets are held in a separate trustee administered fund. The scheme is valued by a qualified actuary at least every three years and contributions are assessed in accordance with the actuary’s advice. Since 1 September 2002, the defined benefit section of the scheme has been closed to new entrants and on 30 April 2010 was closed to future accrual with automatic entry into the defined contribution section being offered to those active members of the defined benefit section at that time. Membership of the defined contribution section is offered to eligible employees. In the Nordics division, the Group operates small funded secured defined benefit pension schemes, which are also closed to new entrants, with assets held by a life insurance company as well as an unsecured pension arrangement. In addition, contributions are made to state pension schemes with defined benefit characteristics. The defined benefit pension schemes expose the Group to actuarial risks such as longer than expected longevity of members, lower than expected return on investments and higher than expected inflation, which may increase the liabilities or reduce the value of assets of the plans. a) Defined contribution pension schemes The pension charge in respect of defined contribution schemes was £30m (2020/21: £34m). b) UK defined benefit pension scheme – actuarial valuation and assumptions A full actuarial valuation of the scheme was carried out as at 31 March 2019 and showed a shortfall of assets compared with liabilities of £645m. A ‘recovery plan’ based on this valuation was agreed with the Trustees such that contributions in respect of the scheme were £47m for the 2020/21 financial year, rising to £78m per year from the 2021/22 financial year until 2027/28, with a final payment of £52m in 2028/29. 196 Currys plc Annual Report & Accounts 2021/22 21 Retirement and other post-employment benefit obligations continued b) UK defined benefit pension scheme – actuarial valuation and assumptions continued The principal actuarial assumptions as at 31 March 2019 were: Rate per annum Discount rate for accrued benefits – Equity portfolio 3.85% – Multi-asset credit portfolio 3.00% – Matching portfolio 1.50% Rate of increase to pensions 0.00% – 3.80% Inflation 3.40% * The discount rate is based on a linear de-risking methodology which assumes the Scheme’s investment strategy switches investments from growth assets (such as equities) to matching assets (such as bonds) and multi-asset credit over a period of eight years from 2026 to 2034 so that by 2034 the asset portfolio is projected to be 100% invested in matching assets and multi-asset credit. At 31 March 2019, the market value of the scheme’s investments was £1,210m and, based on the above assumptions, the value of the assets was sufficient to cover 65% of the benefits accrued to members with the liabilities amounting to £1,855m. c) UK Defined benefit pension scheme – IAS 19 The following summarises the components of net defined benefit expense recognised in the consolidated income statement, the funded status and amounts recognised in the consolidated balance sheet and other amounts recognised in the statement of comprehensive income. The methods set out in IAS 19 are different from those used by the scheme actuaries in determining funding arrangements. (i) Principal assumptions adopted The assumptions used in calculating the expenses and obligations are set by the directors after consultation with the independent actuaries. 30 April 2022 1 May 2021 Rates per annum: Discount rate 3.05% 1.90% Rate of increase in pensions in payment / deferred pensions (pre / post April 2006 accrual) 3.30% / 2.25% 3.20% / 2.20% Inflation 3.40% 3.20% The Group uses demographic assumptions underlying the formal actuarial valuation of the scheme as at 31 March 2019. Post retirement mortality has been assumed to follow the standard mortality tables ‘S3’ All Pensioners tables published by the CMI, based on the experience of Self-Administered Pension Schemes (SAPS) with multipliers of 108% for males and 104% for females. In addition, an allowance has been made for future improvements in longevity by using the new CMI 2020 Core projections with a long term rate of improvement of 1.5% per annum for men and 1.25% per annum for women. Applying such tables results in an average expected longevity of between 86.5 years and 88.1 years for men and between 89.0 years and 90.4 years for women for those reaching 65 over the next 20 years. (ii) Amounts recognised in consolidated income statement Year ended 30 April 2022 £m Year ended 1 May 2021 £m Past service cost - 1 Net interest expense on defined benefit obligation 8 8 Total expense recognised in the income statement 8 9 On 20 November 2020, the High Court issued a judgement in relation to historical transfer values impacted by Guaranteed Minimum Pensions (GMPs) equalisation in the Lloyds Banking Group’s defined benefits pension schemes. This judgement is in addition to an earlier judgement on unequal GMPs in October 2018. We estimate that this will increase the liability by £1m, and therefore recorded this as a past service cost in the year ended 1 May 2021. Notes to the Group Financial Statements continued 197 Governance Financial Statements Investor information Strategic Report 21 Retirement and other post-employment benefit obligations continued c) UK Defined benefit pension scheme – IAS 19 continued (iii) Amounts recognised in other comprehensive income Year ended 30 April 2022 £m Year ended 1 May 2021 £m Remeasurement of defined benefit obligation – actuarial gains / (losses) arising from: Changes in demographic assumptions 3 (4) Changes in financial assumptions 334 (70) Experience adjustments (85) 17 Remeasurement of scheme assets: Actual return on plan assets (excluding amounts included in net interest expense) (96) 87 Cumulative actuarial gain 156 30 (iv) Amounts recognised in the consolidated balance sheet 30 April 2022 £m 1 May 2021 £m Present value of defined benefit obligations (1,620) (1,885) Fair value of plan assets 1,363 1,403 Net obligation (257) (482) Changes in the present value of the defined benefit obligation: 30 April 2022 £m 1 May 2021 £m Opening obligation 1,885 1,850 Past service cost - 1 Interest cost 35 29 Remeasurements in other comprehensive income – actuarial (gains) / losses arising from changes in: Demographic assumptions (3) 4 Financial assumptions (334) 70 Experience adjustments 85 (17) Benefits paid (49) (52) Closing obligation 1,620 1,885 The weighted average maturity profile of the defined benefit obligation at the end of the year is 20 years (2020/21: 20 years), comprising an average maturity of 25 years (2020/21: 25 years) for deferred members and 12 years (2020/21: 12 years) for pensioners. Changes in the fair value of the scheme assets: 30 April 2022 £m 1 May 2021 £m Opening fair value 1,403 1,300 Interest income 27 21 Employer contributions 78 47 Remeasurements in other comprehensive income: Actual return on plan assets (excluding interest income) (96) 87 Benefits paid (49) (52) Closing fair value 1,363 1,403 198 Currys plc Annual Report & Accounts 2021/22 21 Retirement and other post-employment benefit obligations continued c) UK Defined benefit pension scheme – IAS 19 continued (iv) Amounts recognised in the consolidated balance sheet continued Analysis of scheme assets: 30 April 2022 £m 1 May 2021 £m Multi-asset credit funds – Listed 215 125 – Unlisted 226 176 Private equity – Unlisted 10 18 Corporate bonds – Listed - 110 Other credit linked funds – Listed 426 345 – Unlisted - 41 Liability driven investments (‘LDIs’) – Listed 819 104 – Unlisted (599) (4 3) Synthetic equity – Unlisted 250 499 Cash and cash instruments – Listed - – – Unlisted 15 27 Other – Unlisted 1 1 1,363 1,403 * These assets are managed together as part of one investment portfolio. The table above provides the market value of the Scheme’s assets split into key categories as at 30 April 2022. The Scheme’s investment strategy is to: • gain economic exposure to equity markets equivalent to a third of its assets through derivatives; • invest a third of its assets in credit markets; and • use a third of its assets to hedge inflation and interest rate risk. The Scheme invests part of its assets in a bespoke fund to achieve this strategy. The fund consists of a synthetic equity portfolio, a credit portfolio and a liability hedging portfolio. The synthetic equity portfolio uses equity total return swaps and equity futures to provide economic exposure to a range of equity markets while the credit portfolio provides economic exposure to short duration global credit. The objective of the liability hedging portfolio is to hedge the Scheme’s liabilities against inflation and interest rate risk up to the value of the Scheme’s assets. In the fair value hierarchy, listed investments are categorised as level 1. Unlisted investments (including unlisted LDIs and synthetic equity) relate to derivatives, which are categorised as level 2, and private credit and private equity funds which are categorised as level 3. Private credit investments are valued by aggregating bid and offer quotes from brokers where this information is available. If this information is not available, investments are valued at amortised cost, with provision for impairment where appropriate. Private equity fund valuations are based on the last audited accounts of each investment plus any known movements including distributions since the last audited accounts. The investment strategy of the Scheme is determined by the independent Trustees through advice provided by an independent investment consultant. The Trustee’s objective is to achieve an above average long term return on the Scheme’s assets from a mixture of capital growth and income, whilst managing investment risk and ensuring the strategy remains within the guidelines set out in the Pensions Act 1995 and 2004 and the Scheme’s statement of investment principles. In setting the strategy, the nature and duration of the Scheme’s liabilities are taken into account, ensuring that an integrated approach is taken to investment risk and both short term and long term funding requirements. The Scheme invests in a diverse range of asset classes as set out above with matching assets primarily comprising holdings in inflation linked gilts, corporate bonds and liability driven investments. To reduce volatility risk a liability driven investment (LDI) strategy forms part of the Trustee’s management of the UK defined benefit scheme’s assets, including government bonds, corporate bonds and derivatives. Repurchase agreements are entered into with counterparties to better offset the scheme’s exposure to interest and inflation rates, whilst remaining invested in assets of a similar risk profile. Interest rate and inflation rate derivatives are also employed to complement the use of fixed and index-linked bonds in matching the profile of the scheme’s liabilities. Actual return on the scheme assets was a loss of £96m (2020/21: gain of £87m). Notes to the Group Financial Statements continued 199 Governance Financial Statements Investor information Strategic Report 21 Retirement and other post-employment benefit obligations continued c) UK Defined benefit pension scheme – IAS 19 continued (v) Sensitivities The value of the UK defined benefit pension scheme assets is sensitive to market conditions. Changes in assumptions used for determining retirement benefit costs and liabilities may have a material impact on the 2022/23 income statement and the balance sheet. The main assumptions are the discount rate, the rate of inflation and the assumed mortality rate. The following table provides an estimate of the potential impacts of each of these variables if applied to the current year consolidated income statement and balance sheet. Net finance costs Net deficit Year ended 30 April 2022 £m Year ended 1 May 2021 £m Year ended 30 April 2022 £m Year ended 1 May 2021 £m Positive / (negative) effect Discount rate: 0.5% increase 2 1 139 179 Inflation rate: 0.5% increase (3) (2) (110) (147) Mortality rate: 1 year increase (1) (1) (65) (75) * The increase in scheme benefits provided to members on retirement is subject to an inflation cap. The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the changes in assumptions would occur in isolation of one another as some of the assumptions may be correlated. d) Other post-employment benefits – IAS 19 The Group offers other post-employment benefits to employees in overseas territories, in particular in Greece. These benefits are unfunded. At 30 April 2022 the net obligation in relation to these benefits was £1m (2020/21: £5m) which is included in trade and other payables. 22 Share capital, retained earnings and reserves a) Share capital 30 April 2022 million 1 May 2021 million 30 April 2022 £m 1 May 2021 £m Authorised, allotted, called-up and fully paid ordinary shares of 0.1p each 1,133 1,166 1 1 30 April 2022 million 1 May 2021 million 30 April 2022 £m 1 May 2021 £m Ordinary shares of 0.1p each in issue at the beginning of the period 1,166 1,162 1 1 Issued during the period - 4 - – Repurchased and cancelled during the period (33) – - – Ordinary shares of 0.1p each in issue at the end of the period 1,133 1,166 1 1 During the period the Company bought back 32,963,792 Ordinary shares of 0.1p each. The Company paid cash consideration of £32m at an average price of 98p per Ordinary share. The repurchased shares were cancelled in the period, with the nominal value of the cancelled shares transferred to the capital redemption reserve. During the year ended 1 May 2021, 4,098,442 Ordinary shares with nominal value of 0.1p each were issued for consideration at nominal value to satisfy awards under the Group’s share option schemes. 200 Currys plc Annual Report & Accounts 2021/22 22 Share capital, retained earnings and reserves continued b) Retained earnings and reserves Movements in retained earnings and reserves during the reported periods are presented in the consolidated statement of changes in equity. Movements within the individual reserves are as follows: Hedging reserve £m Investments revaluation reserve £m Treasury share reserve £m Investment in own share reserve £m Translation reserve £m Demerger reserve £m Total £m As at 2 May 2020 8 10 – (13) (30) (750) (775) Other comprehensive income and expense recognised directly in equity (40) 8 – – 46 – 14 Amounts transferred to the carrying value of inventory purchased during the year 24 – – – – – 24 Amounts transferred to accumulated profits (18) – 4 (14) Purchase of own shares - EBT – – – (13) – – (13) As at 1 May 2021 (8) – – (22) 16 (750) (764) Other comprehensive income and expense recognised directly in equity (14) - - - (32) - (46) Amounts transferred to the carrying value of inventory purchased during the year 28 - - - - - 28 Amounts transferred to accumulated profits - - - 24 - - 24 Purchase of own shares – EBT - - - (41) - - (41) Purchase of own shares – share buyback - - (32) - - - (32) Cancellation of treasury shares - - 32 - - - 32 As at 30 April 2022 6 - - (39) (16) (750) (799) Hedging reserve The hedging reserve is used to recognise the effective portion of gains or losses on derivatives that are designated and qualify as cash flow hedges. Amounts are subsequently either transferred to the initial cost of inventory or reclassified to profit or loss as appropriate. Investment revaluation reserve The Group previously held an equity investment in Unieuro S.p.A, an Italian retailer of consumer electronics and household appliances listed on the Borsa Italiana. The Group subsequently disposed of the equity instruments for consideration of £18m during the year ended 1 May 2021 as it no longer aligned to the Group’s long-term strategic direction. Treasury share reserve The treasury share reserve represents the repurchase of shares recognised as equity in the parent company, Currys plc. Repurchased shares are classified as treasury shares and presented in the treasury share reserve at cost, inclusive of any directly attributable cost as disclosed above, as a deduction in total equity. When treasury shares are cancelled, the cost of those cancelled is transferred to accumulated profits. All shares purchased by the Company as treasury shares in the period were done so as part of the buyback programme previously announced on 4 November 2021. All shares purchased in treasury during the period were subsequently cancelled. Investment in own shares reserve The investment in own shares reserve is used to recognise the cost of shares in the Company held by the EBT. As further disclosed in note 4 the shares held by the EBT are purchased in order to satisfy share option and save as you earn share option plans issued by the Company as part of employee share incentive schemes. At the reporting date, the EBT held 33.2m shares (2020/21: 20.5m). When shares are issued by the EBT to employees in order to satisfy employee share awards, the cost of these shares is transferred to accumulated profits. During the period the EBT subsequently disposed, by way of share issue, 21.9m of Ordinary shares in the Company (2020/21: 5.4m). Translation reserve The translation reserve accumulates exchange differences arising on translation of foreign subsidiaries which are recognised in other comprehensive income. The cumulative amount is reclassified to accumulated profits when the related net investment is disposed of. Demerger reserve The demerger reserve arose as part of the demerger of the Group from TalkTalk in 2010. Notes to the Group Financial Statements continued 201 Governance Financial Statements Investor information Strategic Report 23 Equity dividends 30 April 2022 £m 1 May 2021 £m Final dividend for the year ended 2 May 2020 of nil per ordinary share – – Interim dividend for the year ended 1 May 2021 of nil per ordinary share – – Final dividend for the year ended 1 May 2021 of 3.00p per ordinary share 34 – Interim dividend for the year ended 30 April 2022 of 1.00p per ordinary share 12 – Amounts recognised as distributions to equity shareholders in the period - on ordinary shares of 0.1p each 46 – The following distribution is proposed but has not been effected at 30 April 2022 and is subject to shareholders’ approval at the forthcoming Annual General Meeting: £m Final dividend for the year ended 30 April 2022 of [x.xx]p per ordinary share [xx] The payment of this dividend will not have any tax consequences for the Group. 24 Discontinued operations and assets held for sale Accounting policies A discontinued operation is a component of the Group which represents a significant separate line of business, either through its activity or geographical area of operation, which has been sold, is held for sale or has been closed. Where the sale of a component of the Group is considered highly probable at the balance sheet date and the business is available for immediate sale in its present condition, it is classified as held for sale. Such classification assumes the expectation that the sale will complete within one year from the date of classification. Assets and liabilities held for sale are measured at the lower of carrying amount and fair value less costs to sell. Once classified as held for sale, intangible assets and property, plant and equipment are no longer amortised or depreciated. There have been no additional operations classified as discontinued during the year ended 30 April 2022. The following were classified as discontinued in previous years and have continued to incur costs and cash flows in the current financial year: honeybee No profit or loss has been recognised in relation to the disposal of the honeybee operation in the current or comparative period. During the year the Group received the final cash payment of £1m for the disposal of trade and assets in relation to the honeybee operations (2020/21: £2m). Spain On 29 September 2017, the Group completed the disposal of The Phone House Spain S.L.U., Connected World Services Europe S.L. and Smarthouse Spain S.A., which together represented the trading operations in Spain. For the year ended 1 May 2021, a £2m credit was recognised in relation to the reversal of previously held provisions no longer required. No further costs in relation to the disposal have been recognised during the period while further information on the contingent liability that the Group has recognised in relation to the disposal can be found in note 31. Other No profit or loss or cash flows have been recognised in relation to other previously disposed operations during the period. For the year ended 1 May 2021 the Group recognised a credit of £5m as the Group released the remaining provision held in relation to. following the settlement of the claim. In prior periods the Group had deemed it probable that it would need to pay amounts covered by warranties provided under the sale agreement for the previously disposed Phonehouse Germany business. The claim was subsequently settled in the second half of the year ended 1 May 2021. The Group subsequently recorded a cash outflow of £3m, released excess amounts provided, thereby recognising a credit of £5m in the income statement as the provision was reduced to £nil. 202 Currys plc Annual Report & Accounts 2021/22 24 Discontinued operations and assets held for sale continued Other continued As a result of the settlement as set out above the Group does not expect any further warranty claims in respect of tax risks in territories within which the legacy Carphone group used to operate. As such, a further £5m was released during the year ended 1 May 2021. a) Profit after tax from discontinued operations Year ended 30 April 2022 Year ended 1 May 2021 honeybee £m Spain £m Other £m Total £m honeybee £m Spain £m Other £m Total £m Revenue – – – – – – – – Expenses – – – – – 2 5 7 Profit before tax – – – – – 2 5 7 Income tax – – – – – – 5 5 – – – – – 2 10 12 b) Cash flows from discontinued operations Year ended 30 April 2022 Year ended 1 May 2021 honeybee £m Spain £m Other £m Total £m honeybee £m Spain £m Other £m Total £m Operating activities – – – – – – (3) (3) Investing activities 1 – – 1 2 – – 2 1 – – 1 2 – (3) (1) 25 Financial risk management and derivative financial instruments Accounting policies Non-derivative financial assets Financial assets are recognised in the Group’s balance sheet when the Group becomes party to the contractual provisions of the investment. The Group’s financial assets comprise cash and cash equivalents, receivables which involve a contractual right to receive cash from external parties, and for the prior period, financial assets designated as at fair value through other comprehensive income (FVTOCI). Financial assets comprise all items shown in notes 12, 14 and 15 with the exception of prepayments and contract assets. When the Group recognises a financial asset, it classifies it in accordance with IFRS 9 depending on the Group’s intention with regard to the collection, or sale, of contractual cash flows and whether the financial asset’s cash flows relate solely to the payment of principal and interest on principal outstanding. All of the Group’s assets measured at amortised cost are subject to impairments driven by the expected credit loss (ECL) model as further stipulated in notes 15 and below. Financial assets are derecognised when the contractual rights to the cash flows expire or the Group has transferred the financial asset in a way that qualifies for derecognition in accordance with IFRS 9. Non-derivative financial liabilities The Group’s financial liabilities are those which involve a contractual obligation to deliver cash to external parties at a future date. Financial liabilities comprise all items shown in notes 16 to 19 with the exception of other taxes and social security, contract liabilities and accruals for wages, bonuses and holiday pay. Financial liabilities are recognised in the Group’s balance sheet when the Group becomes a party to the contractual provisions of the instrument. Financial liabilities (or a part of a financial liability) are derecognised when the obligation specified in the contract is discharged, cancelled or expires. In the event that the terms in which the Group are contractually obliged are substantially modified, the financial liability to which it relates is derecognised and subsequently re-recognised on the modified terms. Where the Group has the right and intention to offset in relation to financial assets and liabilities under IAS 32, these are presented on a net basis. Notes to the Group Financial Statements continued 203 Governance Financial Statements Investor information Strategic Report 25 Financial risk management and derivative financial instruments continued Accounting policies continued Non-derivative financial liabilities continued The Group reviews several factors when considering a significant increase in credit risk including but not limited to: credit rating changes; adverse changes in general economic and / or market conditions; and material changes in the operating results or financial position of the debtor. Indicators that an asset is credit-impaired would include: observable data in relation to the financial health of the debtor; significant financial difficulty of the issuer or the debtor; the debtor breaches contract; or it is probable that the debtor will enter bankruptcy or financial reorganisation. The Group uses derivatives to manage its exposures to fluctuating interest and foreign exchange rates. These instruments are initially recognised at fair value on the date the contract is entered into and are subsequently remeasured to fair value at each prevailing balance sheet date and are recorded within assets or liabilities as appropriate. The treatment of the resulting gain or loss depends on whether the derivative is designated as a hedging instrument and if so, the nature of the item being hedged. Derivatives that qualify for hedge accounting are treated as a hedge of a highly probable forecast transaction (cash flow hedge) in the case of foreign exchange hedging, and a hedge of the exposure arising from changes in the cash flows of a financial liability due to interest rate risk on a floating rate debt instrument in the case of interest rate hedging. Cash flow hedge accounting At inception the relationship between the hedging instrument and the hedged item is documented, as well as an assessment of the effectiveness of the derivative instrument used in the hedging transaction in offsetting changes in the cash flow of the hedged item. This effectiveness assessment is repeated on an ongoing basis during the life of the hedging instrument to ensure that the instrument remains an effective hedge. The effective portion of changes in the fair value is recognised in other comprehensive income and accumulated in the cash flow hedge reserve. Any gain or loss relating to the ineffective portion is recognised immediately in the income statement within finance costs. Amounts recognised in other comprehensive income and accumulated in the cash flow hedge reserve are recycled to the income statement, in the same line as the recognised hedged item, in the period when the hedged item will affect profit or loss. If the hedging instrument expires or is sold, or no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in other comprehensive income at that time remains in other comprehensive income and is recognised when the forecast transaction is ultimately recognised in the income statement. If the forecast transaction is no longer expected to occur, the cumulative gain or loss in other comprehensive income is immediately transferred to the income statement and recognised within finance costs. Where hedged forecast transactions result in the recognition of a non-financial asset or liability, the gains and losses previously recognised and accumulated in the cash flow hedge reserve are subsequently removed and included in the initial cost of the non-financial asset or liability. Such transfers will not affect other comprehensive income. Derivatives that do not qualify for hedge accounting Derivatives that do not qualify for hedge accounting are classified at fair value through profit or loss. All changes in fair value of derivative instruments that do not qualify for hedge accounting are recognised immediately in the income statement within finance costs. The carrying amount of the Group’s financial assets, liabilities and derivative financial instruments are as follows: 30 April 2022 £m 1 May 2021 £m Cash and cash equivalents (1) 126 175 Trade and other receivables excluding derivative financial assets (1) 558 450 Derivative financial assets (2) 28 24 Derivative financial liabilities (2) (11) (4 2) Trade and other payables (1) (1,940) (1,799) Contingent consideration (2) – (2) Loans and other borrowings (1) (82) (6) (1) Held at amortised cost. (2) Held at fair value through profit or loss. 204 Currys plc Annual Report & Accounts 2021/22 Financial instruments that are measured at fair value in the financial statements require disclosure of fair value measurements by level based on the following fair value measurement hierarchy: • Level 1 – quoted prices (unadjusted) in active markets for identical assets and liabilities; • Level 2 – inputs other than quoted prices included within level 1 that are observable for the asset or liability either directly (that is, as prices) or indirectly (that is, derived from prices); • Level 3 – inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs). Listed investments held are categorised as level 1 in the fair value hierarchy and are valued based on quoted bid prices in an active market. Contingent consideration is categorised as level 3 in the fair value hierarchy as the valuation requires the use of significant unobservable inputs. An explanation of the valuation methodologies and the inputs to the valuation model are provided in note 17. The fair value of contingent consideration was immaterial in the prior year and nil in the current year, due to the consideration being settled, therefore no additional disclosure was required. The impact of Covid-19 has had no material impact on the fair value of contingent consideration. The significant inputs required to measure the Group’s remaining financial instruments at fair value on the balance sheet, being derivative financial assets and liabilities, are observable and are classified as level 2 in the fair value hierarchy. There have also been no transfers of assets or liabilities between levels of the fair value hierarchy. 25 Financial risk management and derivative financial instruments continued Fair values have been arrived at by discounting future cash flows (where the impact of discounting is material), assuming no early redemption, or by revaluing forward currency contracts and interest rate swaps to period end market rates as appropriate to the instrument. Management consider that the carrying amount of financial assets and liabilities recorded at amortised cost and their fair value are not materially different. Offsetting financial assets and financial liabilities The Group has forward foreign exchange contracts that are subject to enforceable master netting arrangements. Under these master netting agreements gross assets and liabilities could be offset in the case of a counterparty default. (i) Financial assets 30 April 2022 Gross amounts of recognised financial assets £m Gross amounts of recognised financial liabilities set off in the balance sheet £m Net amounts of financial assets presented in the balance sheet £m Financial instruments not set off in the balance sheet £m Net amount £m Forward foreign exchange contracts 28 - 28 (11) 17 Cash and cash equivalents 126 - 126 (2) 124 154 - 154 (13) 141 1 May 2021 Gross amounts of recognised financial assets £m Gross amounts of recognised financial liabilities set off in the balance sheet £m Net amounts of financial assets presented in the balance sheet £m Financial instruments not set off in the balance sheet £m Net amount £m Forward foreign exchange contracts 24 – 24 (23) 1 Cash and cash equivalents 175 – 175 (6) 169 199 – 199 (29) 170 Notes to the Group Financial Statements continued 205 Governance Financial Statements Investor information Strategic Report 25 Financial risk management and derivative financial instruments continued Offsetting financial assets and financial liabilities continued (ii) Financial liabilities 30 April 2022 Gross amounts of recognised financial liabilities £m Gross amounts of recognised financial liabilities set off in the balance sheet £m Net amounts of financial liabilities presented in the balance sheet £m Financial instruments not set off in the balance sheet £m Net amount £m Forward foreign exchange contracts (11) - (11) 11 - Overdrafts (2) - (2) 2 - (13) - (13) 13 - 1 May 2021 Gross amounts of recognised financial liabilities £m Gross amounts of recognised financial liabilities set off in the balance sheet £m Net amounts of financial liabilities presented in the balance sheet £m Financial instruments not set off in the balance sheet £m Net amount £m Forward foreign exchange contracts (42) – (42) 23 (19) Overdrafts (6) – (6) 6 – (48) – (4 8) 29 (19) * The forward foreign exchange contract assets and liabilities are recognised within the statement of financial position as derivative assets and derivative liabilities respectively. The change in fair value of the forward foreign exchange contract assets is accounted for as a qualifying cash flow hedge. a) Financial risk management policies The Group’s activities expose it to certain financial risks including market risk (such as foreign exchange risk and interest rate risk), credit risk and liquidity risk. The Group’s treasury function, which operates under treasury policies approved by the Board, uses certain financial instruments to mitigate potentially adverse effects on the Group’s financial performance from these risks. These financial instruments consist of bank loans and deposits, spot and forward foreign exchange contracts, foreign exchange swaps and interest rate swaps. Throughout the period under review, in accordance with Group policy, no speculative use of derivatives or other instruments was permitted. No contracts with embedded derivatives have been identified and, accordingly, no such derivatives have been accounted for separately. b) Foreign exchange risk The Group undertakes certain transactions that are denominated in foreign currencies and as a consequence has exposure to exchange rate fluctuations. These exposures primarily arise from inventory purchases, with most of the Group’s exposure being to Euro and US Dollar. The Group uses spot and forward currency contracts to mitigate these exposures, with such contracts designed to cover exposures ranging from one month to one year. The translation risk on converting overseas currency profits or losses is not hedged and such profits or losses are converted into Sterling at average exchange rates throughout the year. The Group’s principal translation currency exposures are the Euro and Norwegian Krone. At 30 April 2022, the total notional principal amount of outstanding currency contracts was £1,925m (2020/21: £2,872m) and had a net fair value of £17m asset (2020/21: £18m liability). Monetary assets and liabilities and foreign exchange contracts are sensitive to movements in foreign exchange rates. 206 Currys plc Annual Report & Accounts 2021/22 25 Financial risk management and derivative financial instruments continued b) Foreign exchange risk continued The impact of fluctuations in foreign exchange rates on profit and loss is mitigated by using offsetting exposures and non-hedged derivatives however there may be residual minimal impact on P&L from residual exposures that are not fully matched. This sensitivity can be analysed in comparison to year end rates (assuming all other variables remain constant) as follows: Year ended 30 April 2022 Year ended 1 May 2021 Effect on profit before tax £m Effect on total equity £m Effect on profit before tax £m Effect on total equity £m 10% movement in the US dollar exchange rate – 8 – 13 10% movement in the Euro exchange rate – 22 – 60 10% movement in the Norwegian Krone exchange rate – 14 – 30 10% movement in the Swedish Krona exchange rate – 9 – 27 10% movement in the exchange rate Danish Krone – 6 – 17 10% movement in the Chinese Yuan Offshore exchange rate – 5 – 6 * Wherever possible the group offsets foreign exchange fluctuations using matching foreign currency assets or liabilities or unhedged derivatives, the group targets profit and loss impact of nil however unmatched exposures may cause a profit and loss impact. c) Interest rate risk The Group’s interest rate risk arises primarily on cash, cash equivalents and loans and other borrowings, all of which are at floating rates of interest and which therefore expose the Group to cash flow interest rate risk. These floating rates are linked to risk free rates and other applicable interest rate bases as appropriate to the instrument and currency. Future cash flows arising from these financial instruments depend on interest rates and periods agreed at the time of rollover. Group policy permits the use of long-term interest rate derivatives in managing the risks associated with movements in interest rates. The effect on the income statement and equity of 100 basis point movements in the interest rate for the currencies in which most Group cash, cash equivalents, loans and other borrowings are denominated and on which the valuation of most derivative financial instruments is based is as follows, assuming that the year end positions prevail throughout the year: Year ended 30 April 2022 Year ended 1 May 2021 Effect on profit before tax increase / (decrease) £m Effect on profit before tax increase / (decrease) £m 1% increase in the Sterling interest rate - 2 d) Liquidity risk Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group manages its exposure to liquidity risk by reviewing regularly the long term and short term cash flow projections for the business against the resources available to it. In response to Covid-19, the Group entered into a one year facility of £266m in April 2020; this was cancelled in February 2021. In order to ensure that sufficient funds are available for ongoing and future developments, the Group has committed bank facilities, excluding overdrafts repayable on demand, totalling £543m (2020/21: £551m). The lower amount of facilities reflect strong cash flow generation in financial year ended 1 May 2021 and a lower requirement for debt going forward. Further details of committed borrowing facilities are shown in note 18. Notes to the Group Financial Statements continued 207 Governance Financial Statements Investor information Strategic Report 25 Financial risk management and derivative financial instruments continued d) Liquidity risk continued The table below analyses the Group’s financial liabilities and derivative assets and liabilities into relevant maturity groupings. The amounts disclosed in the table are the contractual undiscounted cash flows, including both principal and interest flows, assuming that interest rates remain constant and that borrowings are paid in full in the year of maturity. 30 April 2022 Within one year £m In more than one year but not more than five years £m In more than five years £m Total £m Lease liabilities (260) (806) (485) (1,551) Derivative financial instruments – gross cash outflows: Forward foreign exchange contracts (1,925) - - (1,925) Derivative financial instruments – gross cash inflows: Forward foreign exchange contracts 1,942 - - 1,942 Loans and other borrowings (2) (80) - (82) Trade and other payables (1,932) (8) - (1,940) (2,177) (894) (485) (3,556) 1 May 2021 Within one year £m In more than one year but not more than five years £m In more than five years £m Total £m Lease liabilities (271) (842) (534) (1,647) Derivative financial instruments – gross cash outflows: Forward foreign exchange contracts (2,872) – – (2,872) Derivative financial instruments – gross cash inflows: Forward foreign exchange contracts 2,854 – – 2,854 Loans and other borrowings (6) – – (6) Deferred consideration (2) – – (2) Trade and other payables (1,794) (5) – (1,799) (2,091) (847) (534) (3,472) e) Credit risk Credit risk is the risk of financial loss to the Group if a counterparty fails to meet its contractual obligations and arises principally from the Group’s receivables from consumers. The Group’s exposure to credit risk is regularly monitored and the Group’s policy is updated as appropriate. The credit risk associated with cash and cash equivalents and derivative financial instruments are closely monitored and credit ratings are used in determining maximum counterparty credit risk. Surplus cash is invested in investment grade institutions using only low risk, highly liquid instruments such as overnight deposits and money market funds. Cash and cash equivalents comprise cash balances and other deposits with a maturity of less than three months when deposited. The Group only invests in money market funds where cash can be withdrawn the same day, and which are comprised of assets with a weighted-average maturity of less than ninety days hence meeting the definition of cash and cash equivalents. For the purposes of short term operational requirements in Greece, local banks which are below investment grade are used to service short term liquidity needs. Any surplus cash in Greece is moved to an investment grade institution. Counterparty credit rating 30 April 2022 £m 1 May 2021 £m AAA to AA- 72 78 A+ to A- 37 81 BBB+ to BBB- 1 6 Cash held for short term operational requirements within Greece 16 10 126 175 208 Currys plc Annual Report & Accounts 2021/22 25 Financial risk management and derivative financial instruments continued e) Credit risk continued All derivative assets are considered low risk financial instruments as they are held at banks that are investment grade. The Group’s contract assets of £180m (2020/21: £220m) are generally owed to the Group by major multi-national enterprises with whom the Group has well-established relationships and are consequently not considered to add significantly to the Group’s credit risk exposure. In addition, credit risk is also inherently associated with the MNO end subscribers. Exposure to credit risk associated with the MNO subscriber is managed through an extensive consumer credit checking process prior to connection with the network. The large volume of MNO subscribers reduces the Group’s exposure to concentration of credit risk. Further information for credit risk associated to contract assets and the MNOs is disclosed within note 14. For the Group’s trade receivables in the UK and Nordics, it has adopted the simplified approach to calculating expected credit losses allowed by IFRS 9. Historical credit loss rates are applied consistently to groups of financial assets with similar risk characteristics. These are then adjusted for known changes in, or any forward-looking impacts on creditworthiness. In Greece the Group has adopted both the simplified approach for business to business and a debtor by debtor expected credit loss model based on the probability of default. Of the Group’s £558m trade and other receivables that fall within the classification of financial assets (2020/21: £450m), £152m is deemed by the Group to have a material level of credit risk (2020/21: £135m). Other amounts within trade and other receivables are not considered to have a material level of credit risk because they primarily relate to receivables with blue chip multi-national companies with no history of default and no concentration of credit risk to the Group. The Group applies the expected credit loss model, as described above, to all financial assets. The areas of risk and corresponding expected credit loss are as follows: 30 April 2022 1 May 2021 Gross carrying amount £m Expected credit loss £m Gross carrying amount £m Expected credit loss £m UK – PC World Business (B2B) 17 6 13 3 UK – DSG Retail – Main Sales Ledger 62 4 39 4 UK – CPW Concessions 2 2 2 2 UK - iD Mobile - 4 - - Nordics – Business to Business 29 2 24 3 Nordics – Franchise Debtors 29 1 30 1 Greece – Business to Business 4 - 4 – Greece – Franchise Debtors 1 1 2 1 Greece – Consumer Credit - 1 15 1 Greece – Main Sales Ledger 8 - 6 1 152 21 135 16 Ageing of the areas of credit risk is set out in the tables below: Gross amounts of recognised financial assets 30 April 2022 £m 1 May 2021 £m Not Yet Due [xx] 108 0–90 Days [xx] 13 91–180 Days [xx] 2 180+ Days [xx] 12 [xx] 135 The carrying amount of financial assets recorded in the financial statements, which is net of impairment losses, represents the Group’s maximum exposure to credit risk. f) Capital risk The Group manages its capital to ensure that entities within the Group will be able to continue as a going concern, whilst maximising the return to shareholders through a suitable mix of debt and equity. The capital structure of the Group consists of cash and cash equivalents, loans and other borrowings and equity attributable to equity holders of the Company, comprising issued capital, reserves and accumulated profits. Except in relation to minimum capital requirements in its insurance business, the Group is not subject to any externally imposed capital requirements. The Group monitors its capital structure on an ongoing basis, including assessing the risks associated with each class of capital. Notes to the Group Financial Statements continued 209 Governance Financial Statements Investor information Strategic Report 25 Financial risk management and derivative financial instruments continued g) Derivatives Derivative financial instruments comprise forward foreign exchange contracts, foreign exchange swaps and interest rate swaps. The Group has designated financial instruments under IFRS 9 as explained below. Cash flow hedges Foreign exchange The objective of the Group’s policy on foreign exchange hedging is to protect the Group from adverse currency fluctuations and to gain greater certainty of earnings by protecting the Group from sudden currency movements. All hedging of foreign currency exposures is managed centrally within the Group Treasury function. The Group analyses its exposure to foreign exchange rate movements without assuming any correlations between currency pairs and uses this analysis to hedge up to the level prescribed in its transactional hedging policy (a target of up to 80% hedged a year in advance). The Group generally prefers to use vanilla forward foreign exchange contracts as hedging instruments for hedges of forecasted transactions. The Group has a policy that all its foreign exchange rate derivatives must be eligible for hedge accounting. The Group can use more complex derivatives including options when management considers that they are more appropriate, based on management’s views on potential foreign exchange rate movements. Any amendments to the Group’s policies or strategy on managing foreign currency risk must be approved by the Group’s Tax and Treasury Committee. At 30 April 2022 the Group had forward and swap foreign exchange contracts in place with a notional value of £737m (2020/21: £1,570m) and a net fair value of £7m asset (2020/21: £17m liability) that were designated and effective as cash flow hedges. These contracts are expected to cover exposures ranging from one month to one year. The fair value of derivative foreign exchange contracts and foreign exchange swaps not designated as cash flow hedges was a £10m asset (2020/21: £1m liability). Possible sources of ineffectiveness are scenarios where future cash flows are delayed to a later period or brought forward to a prior period. Ineffectiveness can also be caused by credit risk (both own risk and that of the counterparty) as well as currency basis spread which is not included in the effectiveness calculation. All hedges are expected to be highly effective. Supply chain issues have had an impact on the timing and volume of foreign currency purchases into the business. However, all hedged items are considered highly probable, therefore no material ineffectiveness has been recognised. The situation in Ukraine and subsequent sanctions imposed on Russia has had no significant impact on foreign currency purchases. As of 30 April 2022, the Group holds the following levels of foreign exchange hedging derivatives (foreign exchange forwards) to hedge its exposure to fluctuating foreign exchange rates of the next 12 months: Year ended 30 April 2022 Year ended 1 May 2021 Maturing hedges in the next 12 months £m Weighted average hedge rate £m Change in fair value used to calculate hedge ineffectiveness £m Maturing hedges in the next 12 months £m Weighted average hedge rate £m Change in fair value used to calculate hedge ineffectiveness £m Hedging USD purchases into GBP (UK) 62 1.3480 4 66 1.3704 (1) Hedging EUR purchases into GBP (UK) 30 1.1753 - 24 1.1247 – Hedging CNY purchases into GBP (UK) 52 8.7825 3 61 9.0489 – Hedging EUR purchases into NOK (Nordics) 305 10.1009 (6) 761 10.4977 (33) Hedging USD purchases into NOK (Nordics) 30 8.7826 2 84 8.7562 (4) Hedging SEK sales into NOK (Nordics) 103 1.0237 2 301 0.9787 12 Hedging DKK sales into NOK (Nordics) 73 0.7388 1 189 0.7100 8 Hedging EUR purchases into GBP (Ireland) 81 1.1724 1 84 0.8864 1 736 7 1,570 (17) The change in value of hedged items is a total of £7m (2020/21: £(17)m). This is used in assessing the economic relationship between hedged items and hedging instruments. Ineffectiveness caused by foreign currency basis spread and credit risk was highly immaterial during the period. 210 Currys plc Annual Report & Accounts 2021/22 25 Financial risk management and derivative financial instruments continued g) Derivatives Cash flow hedges continued Interest rate The Group’s interest rate risk management objective is to limit the amount of additional expense incurred if interest rates rise to unexpected levels. To manage the interest rate exposure, the Group generally enters interest rate swaps to fix its floating rate borrowings, in which the Group agrees to exchange, at specified intervals, the difference between fixed and variable rate interest amounts calculated by reference to an agreed-upon notional principal amount. The Group monitors and manages its interest rate risk individually in each currency and it does not make any assumptions about how interest rates in different currencies may move in tandem. Any amendments to the Group’s policies or strategy on managing interest rate risk must be approved by the Group’s Tax and Treasury Committee. Interest rate continued As at the 30th April 2022 there are no interest rate swaps in place. Whilst the Group’s policy and strategy on interest rate risk has not changed, £60m of interest rate hedges were discontinued in April 2021 because they no longer fulfilled the criteria for hedge accounting under IFRS 9. In the prior period, the Group held interest rate swaps with a notional value of £nil and a fair value of £nil, whereby the Group received a floating rate of interest based on LIBOR and paid a fixed interest rate. All interest rate swap contracts were terminated in April 2021. IBOR Reform During the year, the Group adopted the ‘Interest Rate Benchmark Reform Phase 2’ amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16. During the year the Group has established that it has no material contracts that use an IBOR benchmark which would require the remeasurement of any assets, liabilities or derivatives. In April 2021, the Group extinguished its instruments linked to IBOR. This included the refinancing of the Group’s Revolving Credit Facilities which were replaced with new agreements linked to risk-free rate indices as set out in note 18. The Group simultaneously cancelled all of its interest rate hedging as they no longer met with the requirements of IFRS 9. The Group continues to operate with no significant core level of debt and as such has no interest rate hedging arrangements in place. The Group’s interest rate risk management strategy and policies remain unchanged and if circumstances change, the Group’s interest rate programme may be recommenced in future. 26 Notes to the cash flow statement a) Reconciliation of cash and cash equivalents and bank overdrafts at the end of the period Year ended 30 April 2022 £m Year ended 1 May 2021 £m Cash at bank and on deposit 126 175 Bank overdrafts (2) (6) Cash and cash equivalents and bank overdrafts at end of the period 124 169 Notes to the Group Financial Statements continued 211 Governance Financial Statements Investor information Strategic Report 26 Notes to the cash flow statement continued b) Reconciliation of operating profit to net cash inflow from operating activities Year ended 30 April 2022 £m Year ended 1 May 2021 £m Profit before interest and tax – continuing operations 222 147 Profit before interest and tax – discontinued operations - 7 Depreciation and amortisation 338 362 Share-based payment charge 23 21 Profit on disposal of fixed assets (1) (6) Impairments and other non-cash items 65 76 Operating cash flows before movements in working capital 647 607 Movements in working capital: Increase in inventory (130) (174) (Increase) / decrease in receivables (92) 404 Increase in payables 143 182 Decrease in provisions (44) (93) (123) 319 Cash generated from operations 524 926 c) Changes in liabilities arising from financing activities The table below details changes in the Group’s liabilities arising from financing activities, including both cash and non-cash changes. Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be, classified in the Group’s consolidated cash flow statement as cash flows from financing activities. 2 May 2021 £m Financing cash flows £m Lease additions, modifications and disposals £m Foreign exchange £m Interest £m 30 April 2022 £m Loans and other borrowings (note 18) (i) – (63) - - (17) (80) Lease liabilities (note 19) (ii) (1,326) 279 (165) 15 (70) (1,267) Total liabilities from financing activities (1,326) 216 (165) 15 (87) (1,347) 3 May 2020 £m Financing cash flows £m Lease additions, modifications and disposals £m Foreign exchange £m Interest £m 1 May 2021 £m Loans and other borrowings (note 18) (i) (324) 348 – – (24) – Lease liabilities (note 19) (ii) (1,444) 310 (96) (19) (77) (1,326) Total liabilities from financing activities (1 ,768) 658 (96) (19) (101) (1,326) (i) The Group used interest rate swaps and foreign exchange forward contracts to hedge borrowings. The fair value of these derivatives rounded to £nil (2020/21: £nil). There were no material cash flows or changes in fair value on these instruments during the year. (ii) Lease liabilities are secured over the Group’s right-of-use assets. 27 Related party transactions Transactions between the Group’s subsidiary undertakings, which are related parties, have been eliminated on consolidation and accordingly are not disclosed. See note 4a for details of related party transactions with key management personnel. The Group had the following transactions and balances with its associates and joint venture: 30 April 2022 £m 1 May 2021 £m Revenue from sale of goods and services 15 16 Amounts owed to the Group - – All transactions entered into with related parties were completed on an arm’s length basis. 212 Currys plc Annual Report & Accounts 2021/22 28 Capital commitments 30 April 2022 £m 1 May 2021 £m Intangible assets 7 14 Property, plant and equipment 3 5 Contracted for but not provided for in the accounts 10 19 29 Government support Accounting policies Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions attaching to them and that the grants will be received. Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises expenses as related costs which the grants are intended to compensate. Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognised in profit or loss in the period in which they become receivable. During the year ended 30 April 2022, the Group received further government support designed to mitigate the impact of Covid-19 in several countries in which the Group operates. In the United Kingdom, the Group received further benefit in the form of business rates relief under the ‘Retail Discount’ for the year ended 30 April 2022. Under the scheme the business benefited from 100% relief from business rate bills for the first 2 months of the period and 66% off the remaining bills up to a total of £2m. This has led to a reduction in operating costs totalling £18m (2020/21: £62m). The Group also benefited from government backed Covid-19 related rent concessions for closed stores in Greece. The Group elected to take the practical expedient related to rent concessions under IFRS 16, subsequently recognising a £1m credit (2020/21: £6m) against rental expense to reflect the variable element of the reduction and a corresponding adjustment to the lease liability. In addition, the Group has made use of government-backed tax and social security payment deferral schemes. During the prior period the Group also received government grants to cover the salaries for those employees who had been ‘furloughed’ through the Coronavirus Job Retention Scheme in the United Kingdom. A similar subsidy was also received in Ireland through the Temporary Wage Subsidy Scheme and subsequently the Employment Wage Subsidy Scheme. These were subsequently repaid to the respective governments on 28 April 2021 while no further benefit has been taken in relation to such schemes in the year ended 30 April 2022. The Group also received £1m (2020/21: £6m) in relation to similar employment cost subsidy schemes in the Nordics. During the year ended 1 May 2021 £2m of social security payments for the Group’s Danish operations had been deferred under government backed schemes. There are no unfulfilled conditions or contingencies attached to these grants. Notes to the Group Financial Statements continued 213 Governance Financial Statements Investor information Strategic Report 30 Operating lease arrangements Accounting policies A lease is classified as a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration. The Group as a lessor The Group is a lessor predominantly when subleasing retail store properties that are no longer open for trading. Leases for which the Group is a lessor are classified as finance or operating leases. All leases that are not finance leases are classified as operating leases. See note 12 for further disclosure where the Group is a lessor and the contracts are classified as finance leases. Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term. Under IFRS 16, an intermediate lessor is required to classify the sublease as a finance lease or an operating lease by reference to the right-of-use asset arising from the head lease. As such, operating leases in which the Group is a lessor relate to right-of- use assets subleased to external third parties. A maturity analysis of undiscounted lease payments to be received relating to these operating leases is shown below. Undiscounted amounts receivable under sub-leases classified as operating leases: 30 April 2022 £m 1 May 2021 £m Year 1 - 1 Year 2 - – Year 3 - – Year 4 - – Year 5 - – Onwards - – 31 Contingent liabilities The Group continues to cooperate with HMRC in relation to open tax enquiries arising from pre-merger legacy corporate transactions in the former Carphone Warehouse group. It is possible that a future economic outflow will arise from one of these matters, and therefore a contingent liability has been disclosed. This determination is based on the strength of third-party legal advice on the matter and therefore the Group considers it ‘more likely than not’ that these enquiries will not result in an economic outflow. The potential range of tax exposures relating to this enquiry is estimated to be approximately £nil – £214m excluding interest and penalties. Interest on the upper end of the range is approximately £61m up to 30 April 2022. Penalties could range from nil to 30% of the principal amount of any tax. Any potential cash outflow would occur in greater than 1 year and less than 5 years. The Group received a Spanish tax assessment connected to a business that was disposed of by the legacy Carphone Warehouse Group in 2014. This issue will enter litigation and is likely to take a minimum of three years to reach resolution. The Group considers that it is not probable the claim will result in an economic outflow based on third party legal advice. The maximum potential exposure as a result of the claim is £10m. 32 Events after the balance sheet date There were no material events after the balance sheet date. 214 Currys plc Annual Report & Accounts 2021/22 Company Balance Sheet Note 30 April 2022 £m 1 May 2021 £m Non-current assets Investments in subsidiaries C4 2,670 2,670 2,670 2,670 Current assets Cash and cash equivalents 12 55 Debtors C5 3,306 3,583 Derivative assets C7 39 63 3,357 3,701 Current liabilities Creditors C6 (3,338) (3,578) Loans payable C8 - – Derivative liabilities C7 (30) (6 5) Net current (liabilities) / assets (11) 58 Total assets less current liabilities 2,659 2,728 Net assets 2,659 2,728 Capital and reserves Share capital C9 1 1 Share premium reserve C9 2,263 2,263 Profit and loss account 395 464 2,659 2,728 The Company’s profit for the year was £50m (2020/21: £20m). The financial statements of the Company were approved by the Board on 6 July 2022 and signed on its behalf by: Alex Baldock Group Chief Executive Bruce Marsh Group Chief Financial Officer Company registration number: 7105905 215 Governance Financial Statements Investor information Strategic Report Company Statement of Changes in Equity Share capital £m Share premium reserve £m Profit and loss account £m Total equity £m At 2 May 2020 1 2,263 456 2,720 Profit for the year – – 20 20 Other comprehensive income – – 1 1 Total comprehensive income for the year – – 21 21 Purchase of own shares – employee benefit trust – – (13) (13) At 1 May 2021 1 2,263 464 2,728 Total comprehensive income for the year – – 50 50 Purchase of own shares – employee benefit trust – – (41) (41) Purchase of own shares – share buy back – – (32) (32) Equity dividend – – (46) (46) At 30 April 2022 1 2,263 395 2,659 216 Currys plc Annual Report & Accounts 2021/22 Notes to the Company Financial Statements C1 Accounting policies Basis of preparation The Company is incorporated in the United Kingdom. The financial statements have been prepared on a going concern basis (see note 1 to the Group financial statements). The separate financial statements of the Company are presented as required by the Companies Act 2006. The Company meets the definition of a qualifying entity under FRS 100 (Financial Reporting Standard 100) issued by the Financial Reporting Council. Accordingly, the financial statements have therefore been prepared in accordance with FRS 101 (Financial Reporting Standard 101) ‘Reduced Disclosure Framework’ as issued by the Financial Reporting Council, incorporating the Amendments to FRS 101 as issued by the Financial Reporting Council. As permitted by FRS 101, the Company has taken advantage of the disclosure exemptions available under that standard in relation to share-based payments, financial instruments, capital management, presentation of comparative information in respect of certain assets, presentation of a cash flow statement and certain related party transactions. Where required, equivalent disclosures are given in the consolidated financial statements. The financial statements have been prepared on the historical cost basis except for the re-measurement of certain financial instruments to fair value. The principal accounting policies adopted are the same as those set out in the notes to the Group financial statements except as noted below. The directors consider there are no critical accounting judgements or key sources of estimation uncertainty which affect these financial statements. Investments in subsidiaries are stated at cost less, where appropriate, provisions for impairment. The Company had no employees during the year ended 30 April 2022 (2020/21: nil). All directors were remunerated by other group companies. C2 Profit and loss account In accordance with the exemption permitted by section 408 of the Companies Act 2006, the profit and loss account of the Company is not presented separately. The profit recognised for the year ended 30 April 2022 was £50m (2020/21: £20m). Included in the profit recognised for the year ended 1 May 2021 is £1m of charitable donations. Information regarding the audit fees for the Group is provided in note 3 to the Group financial statements. C3 Equity dividends Details of amounts recognised as distributions to shareholders in the period and those proposed are detailed in note 23 of the Group financial statements. C4 Investments in subsidiaries 30 April 2022 £m 1 May 2021 £m Opening balance 2,670 2,670 Impairments – – Closing balance 2,670 2,670 Cost 2,776 2,7 76 Accumulated impairments (106) (106) Net carrying amount 2,670 2,670 Balances comprise investments in subsidiary undertakings and other minority investments. Details of the Company’s investments in subsidiary undertakings are provided in note C9. 217 Governance Financial Statements Investor information Strategic Report C4 Investments in subsidiaries continued The directors acknowledged that as at 30 April 2022 the market capitalisation of Currys plc was less than the net assets of the company which primarily consists of investments in subsidiaries. This was considered to be an indicator of impairment and an impairment test over the investment in subsidiaries was performed in accordance with IAS 36. The recoverable amounts of the investments have been determined based on value-in-use calculations where management have prepared discounted cash flows based on the latest five year strategic plan and require the use of estimates. The recoverable amount, based on the value-in-use, shows a headroom of £3,575m above the carrying amount of the investments in subsidiaries. As such, no impairment charge was recognised over investment in subsidiaries as a result of the impairment test detailed above. C5 Debtors 30 April 2022 £m 1 May 2021 £m Amounts owed by Group undertakings 3,305 3,582 Other debtors 1 1 Amounts falling due within one year 3,306 3,583 Amounts owed by Group undertakings are unsecured, repayable on demand and any interest charged is at current market rates. Receivable balances with other Group entities are reviewed for potential impairment based on the ability of the counterparty to meet its obligations. The net current asset / liability position of the entity is considered and where the amount due to the Company is not covered, the estimated future cash flows of the counterparty and subsidiary companies with the ability to distribute cash to it are considered. An impairment of £49m (2020/21: £nil) was recognised in relation to amounts owed by Group undertakings. Other than the amounts impaired there has been no significant change in credit risk to all of the balances and therefore the 12 month expected credit loss method has been applied. . C6 Creditors 30 April 2022 £m 1 May 2021 £m Amounts owed to Group undertakings 3,329 3, 576 Overdrafts 9 2 Amounts falling due within one year 3,338 3,578 C7 Derivatives 30 April 2022 £m 1 May 2021 £m Foreign exchange contracts 39 63 Derivative assets 39 63 Foreign exchange contracts (30) (6 5) Derivative liabilities (30) (6 5) This value is determined using forward exchange and interest rates derived from market sourced data at the balance sheet date, with the resulting value discounted back to present value (level 2 classification). See note 25 of the Group financial statements for further details. Included within the Company’s derivatives are £11m of assets (2020/21: £39m asset) and £18m of liabilities (2020/21: £23m liability) related to internal trades with Group undertakings. 218 Currys plc Annual Report & Accounts 2021/22 C7 Derivatives continued At 30 April 2022 the Company had external forward and swap foreign exchange contracts in place with a notional value of £736m (2020/21: £1,570m). The external derivative contracts are passed down to the hedging subsidiary using an internal derivative and designated as an effective cash flow hedge with a notional fair value of £736m (2020/21: £1,570m), resulting in a total net fair value of £nil (2020/21: £nil). These contracts are expected to cover exposures ranging from one month to one year. The gross fair value of derivative foreign exchange contracts and foreign exchange swaps passed down and not designated as cash flow hedges was £12m asset and £2m liabilities (2020/21: £3m asset and £5m liabilities). As of 30 April 2022, the Company holds the following levels of foreign exchange hedging derivatives (foreign exchange forwards) to hedge its exposure to fluctuating foreign exchange rates of the next 12 months: Year ended 30 April 2022 Year ended 1 May 2021 Maturing hedges in the next 12 months £m Weighted average hedge rate £m Change in fair value used to calculate hedge ineffectiveness £m Maturing hedges in the next 12 months £m Weighted average hedge rate £m Change in fair value used to calculate hedge ineffectiveness £m External trades: Hedging USD purchases into GBP (UK) 62 1.3480 4 66 1.3704 (1) Hedging EUR purchases into GBP (UK) 30 1.1753 – 24 1.1247 – Hedging CNY purchases into GBP (UK) 52 8.7825 3 61 9.0489 – Hedging EUR purchases into NOK (Nordics) 305 10.1009 (6) 761 10.4977 (33) Hedging USD purchases into NOK (Nordics) 30 8.7826 2 84 8.7562 (4) Hedging SEK sales into NOK (Nordics) 103 1.0237 2 301 0.9787 12 Hedging DKK sales into NOK (Nordics) 73 0.7388 1 189 0.7100 8 Hedging EUR purchases into GBP (Ireland) 81 1.1724 1 84 0.8864 1 736 7 1,570 (17) Internal trades: Hedging USD purchases into GBP (UK) 62 1.3480 (4) 66 1.3704 1 Hedging EUR purchases into GBP (UK) 30 1.1753 – 24 1.1247 – Hedging CNY purchases into GBP (UK) 52 8.7825 (3) 61 9.0489 – Hedging EUR purchases into NOK (Nordics) 305 10.1009 6 761 10.4977 33 Hedging USD purchases into NOK (Nordics) 30 8.7826 (2) 84 8.7562 4 Hedging SEK sales into NOK (Nordics) 103 1.0237 (2) 301 0.9787 (12) Hedging DKK sales into NOK (Nordics) 73 0.7388 (1) 189 0.7100 (8) Hedging EUR purchases into GBP (Ireland) 81 1.1724 (1) 84 0.8864 (1) 736 (7) 1,570 17 C8 Share capital and share premium Details of movements in share capital and share premium are disclosed in note 22 to the Group financial statements. Notes to the Company Financial Statements continued 219 Governance Financial Statements Investor information Strategic Report C9 Subsidiary undertakings a) Principal subsidiaries as at 30 April 2022 The Company has investments in the following principal subsidiary undertakings. All holdings are in equity share capital and give the Group an effective holding of 100% on consolidation. Name Registered office address Country of incorporation or registration Share class(es) held % held Business activity Carphone Warehouse Europe Limited 1 Portal Way, London, W3 6RS United Kingdom A and B Ordinary 100 Holding company CPW Technology Services Limited 1 Portal Way, London, W3 6RS United Kingdom Ordinary 100 IT Dixons Carphone Holdings Limited company 1 Portal Way, London, W3 6RS United Kingdom Ordinary 100 Holding Deferred 100 A Ordinary 84.6 B Ordinary 100 Dixons Retail Group Limited 1 Portal Way, London, W3 6RS United Kingdom Ordinary 100 Holding company Deferred 100 Dixons South East Europe A.E.V.E. 90 Marinou Antypa str., Neo Irakleio, Athens 14121 Greece Ordinary 100 Retail DSG International Holdings Limited 1 Portal Way, London, W3 6RS United Kingdom Ordinary 100 Holding company DSG Retail Ireland Limited 3rd Floor Office Suite,Omni Park Shopping Centre, Santry, Dublin 9 Ireland Ordinary 100 Retail DSG Retail Limited 1 Portal Way, London, W3 6RS United Kingdom Irredeemable Cumulative Preference and Ordinary 100 Retail Elgiganten Aktiebolag Box 1264, 164, 29 Kista, Stockholm Sweden Ordinary 100 Retail ElGiganten A/S Arne Jacobsens Allé 16, 2.sal København S, 2300 Copenhagen Denmark Ordinary 100 Retail Elkjøp Nordic AS Nydalsveien 18A, NO-0484 Oslo Norway Ordinary 100 Retail Elkjøp Norge AS Solheimveien 10, NO-1473, Lørenskog Norway Ordinary 100 Retail Gigantti Oy Töölönlahdenkatu 2, FI-00100, Helsinki Finland Ordinary 100 Retail The Carphone Warehouse Limited 1 Portal Way, London, W3 6RS United Kingdom Ordinary 100 Retail The Carphone Warehouse Limited 3rd Floor Office Suite, Omni Park Shopping Centre, Santry, Dublin 9 Ireland Ordinary 100 Retail * Interest held directly by Dixons Carphone plc. ** This is the only interest of Dixons Carphone plc, directly or indirectly, in this class of shares. 220 Currys plc Annual Report & Accounts 2021/22 C9 Subsidiary undertakings continued b) Other subsidiary undertakings The following are the other subsidiary undertakings of the Group, all of which are wholly owned unless otherwise indicated. All these companies are either holding companies or provide general support to the principal subsidiaries listed on the previous page. Name Registered office address Country of incorporation or registration Share class(es) held % held Alfa s.r.l. Via monte Napoleone n. 29, 20121 Milano Italy Ordinary 100 Carphone Warehouse Ireland Mobile Limited (in liquidation) 44 Fitzwilliam Place, Dublin 2 Ireland Ordinary 100 CCC Nordic A/S Arne Jacobsens Allé 15, 8., 2300 København S. Denmark Ordinary 100 Codic GmbH (in liquidation) Eschenheimer Anlage 1, 60316, Frankfurt Germany Ordinary 100 Connected World Services Distributions Limited 1 Portal Way, London, W3 6RS United Kingdom Ordinary 100 Connected World Services LLC 2711 Centerville Road, Suite 400 Wilmington DE 19808 United States Ordinary 100 Connected World Services Netherlands BV Watermanweg 96, 3067 GG, Rotterdam Netherlands Ordinary 100 Connected World Services SAS (in liquidation) 26 rue de Cambacérès, 75008 Paris France Ordinary 100 CPW Acton Five Limited 1 Portal Way, London, W3 6RS United Kingdom Ordinary 100 CPW Brands 2 Limited 1 Portal Way, London, W3 6RS United Kingdom Ordinary 100 CPW CP Limited 1 Portal Way, London, W3 6RS United Kingdom Ordinary 100 CPW Tulketh Mill Limited 1 Portal Way, London, W3 6RS United Kingdom Ordinary 100 Currys Limited (1) 1 Portal Way, London, W3 6RS United Kingdom Ordinary 100 Currys Retail Limited (2) 1 Portal Way, London, W3 6RS United Kingdom Ordinary 100 DISL 2 Limited 6th Floor, Victory House, Prospect Hill, Douglas, IM1 1EQ Isle of Man Ordinary 100 DISL Limited 6th Floor, Victory House, Prospect Hill, Douglas, IM1 1EQ Isle of Man Ordinary 100 Dixons Carphone CoE s.r.o. Trnita, 491/5, 602 00 Brno Czech Republic Business Shares 100 Dixons Deutschland GmbH i.L (in liquidation) Ottostraße 21, 80333 Munich Germany Ordinary 100 Dixons Sourcing Limited 31/F, AXA Tower Landmark East, 100 How Ming Street, Kwun Tong Kowloon Hong Kong Ordinary 100 Dixons Stores Group Retail Norway AS Nydalsveien 18A, NO-0484 Oslo Norway Ordinary 100 Dixons Travel srl (in liquidation) Foro Buonaparte 70, 20121, Milan Italy Ordinary 100 DSG Card Handling Services Limited 1 Portal Way, London, W3 6RS United Kingdom Ordinary 100 DSG Corporate Services Limited 1 Portal Way, London, W3 6RS United Kingdom Ordinary 100 DSG European Investments Limited 1 Portal Way, London, W3 6RS United Kingdom Ordinary 100 DSG Hong Kong Sourcing Limited 31/F, AXA Tower Landmark East, 100 How Ming Street, Kwun Tong Kowloon Hong Kong Ordinary 100 Notes to the Company Financial Statements continued 221 Governance Financial Statements Investor information Strategic Report Name Registered office address Country of incorporation or registration Share class(es) held % held DSG International Belgium BVBA (in lquidation) Havenlaan 86C, Box 204, B-1000 Brussels Belgium Ordinary 100 DSG International Retail Properties Limited 1 Portal Way, London, W3 6RS United Kingdom Ordinary 100 DSG Ireland Limited 1 Portal Way, London, W3 6RS United Kingdom Ordinary 100 DSG KHI Limited 1 Portal Way, London, W3 6RS United Kingdom Ordinary 100 DSG Overseas Investments Limited 1 Portal Way, London, W3 6RS United Kingdom Ordinary 100 DSG Retail Ireland Pension Trust Limited 40 Upper Mount Street, Dublin 2, D02 PR89 Ireland Ordinary 100 Elcare Workshop AS (3) Industrivegen, 53, 2212, Kongsvinger Norway Ordinary 100 Elcare Workshop Oy (4) Silvastintie 1, 01510, Vantaa Finland Ordinary 100 Electrocare Nordic AB (5) Arabygatan 9, 35246 Växjö, Kronobergs län Sweden Ordinary 100 El-Giganten Logistik AB Mobelvagen 51, 556 52 Jönköping Sweden Ordinary 100 Elkjøp Holdco AS Nydalsveien 18A, NO-0484 Oslo Norway Ordinary 100 Epoq Logistic DC k.s. Evropská 868, 664 42 Modrˇice Czech Republic Ordinary 100 iD Mobile Limited 1 Portal Way, London, W3 6RS United Kingdom Ordinary 100 Kungsgatan Concept Store AB Box 1264, 164, 29 Kista, Stockholm Sweden Ordinary 100 Mastercare Service and Distribution Limited 1 Portal Way, London, W3 6RS United Kingdom Ordinary 100 MTIS Limited Carphone Warehouse, Dixons Unit, 301 Omni Park Shopping Centre, Swords Road, Dublin 9 Ireland Ordinary 100 New CPWM Limited 1 Portal Way, London, W3 6RS United Kingdom Ordinary 100 PC City (France) SNC (in liquidation) 52 rue de la Victoire 75009 Paris France Partnership 100 Petrus Insurance Company Limited 2 Irish Town Gibraltar Ordinary 100 Simplify Digital Limited 1 Portal Way, London, W3 6RS United Kingdom Ordinary 100 TalkM Limited 1 Portal Way, London, W3 6RS United Kingdom Ordinary 100 Team Knowhow Limited 1 Portal Way, London, W3 6RS United Kingdom Ordinary 100 The Carphone Warehouse (Digital) Limited 1 Portal Way, London, W3 6RS United Kingdom Ordinary 100 The Carphone Warehouse UK Limited 1 Portal Way, London, W3 6RS United Kingdom Ordinary 100 The Phone House Holdings (UK) Limited 1 Portal Way, London, W3 6RS United Kingdom Ordinary 100 * Interest held directly by Dixons Carphone plc. (1) Currys Limited was called Kereru Limited until 13 May 2021. (2) Currys Retail Limited was called Mohua Limited until 13 May 2021. (3) Formerly named InfoCare Workshop AS. (4) Formerly named InfoCare Workshop Oy. (5) Formerly named InfoCare CS AB. 222 Currys plc Annual Report & Accounts 2021/22 C9 Subsidiary undertakings continued c) Other significant shareholdings The following are the other significant shareholdings of the Company, all of which are held indirectly Name Registered office address Country of incorporation or registration Share class(es) held % held Business activity Elkjøp Fjordane AS Fugleskjærgata 10, 6905 Florø Norway Ordinary 30 Retail d) Subsidiary undertakings exempt from audit The following subsidiaries, all of which are incorporated in England and Wales are exempt from the requirements of the Companies Act 2006 relating to the audit of individual accounts by virtue of section 479A of that Act: Name Company registration number Carphone Warehouse Europe Limited 06534088 Connected World Services Distributions Limited 01847868 CPW Acton Five Limited 05738735 CPW Technology Services Limited 02881162 Currys Limited (1) 05929750 Currys Retail Limited (2) 05929753 Dixons Carphone Holdings Limited 07866062 Dixons Retail Group Limited 03847921 DSG Card Handling Services Limited 04185110 DSG European Investments Limited 03891149 DSG International Holdings Limited 03887870 DSG International Retail Properties Limited 00476440 DSG Ireland Limited 00240621 DSG KHI Limited 09012752 DSG Overseas Investments Limited 02734677 Simplify Digital Limited 06095563 TalkM Limited 04682207 The Carphone Warehouse (Digital) Limited 03966947 The Phone House Holdings (UK) Limited 03663563 (1) Currys Limited was called Kereru Limited until 13 May 2021. (2) Currys Retail Limited was called Mohua Limited until 13 May 2021. Notes to the Company Financial Statements continued 223 Governance Financial Statements Investor information Strategic Report Five Year Record (Unaudited) 2021/22 £m 2020/21 £m 2019/20 £m 2018/19 £m 2017/18 £m Adjusted results Revenue 10,122 10,330 10,217 10,474 10,555 EBIT 274 262 214 363 430 Interest (88) (106) (98) (24) (18) Profit before tax 186 156 116 339 412 Tax (42) (33) (38) (70) (85) Profit after tax 144 123 78 269 327 Earnings per share – Basic [xx] 10.7p 6.7p 23.2p 28.3p – Diluted [xx] 10.3p 6.6p 23.0p 28.2p 224 Currys plc Annual Report & Accounts 2021/22 Glossary and Definitions Alternative performance measures (‘APMs’) In the reporting of financial information, the Group uses certain measures that are not required under IFRS. These are presented in accordance with the Guidelines on APMs issued by the European Securities and Markets Authority (“ESMA”). These measures are consistent with those used internally by the Group’s Chief Operating Decision Maker (CODM) in order to evaluate trends, monitor performance and forecast results. These alternative performance measures may not be directly comparable with other similarly titled measures of ‘adjusted’ or ‘underlying’ revenue or profit measures used by other companies, including those within our industry, and are not intended to be a substitute for, or superior to, IFRS measures. We consider these additional measures (commonly referred to as ‘alternative performance measures’) to provide additional information on the performance of the business and trends to shareholders. The below, and supplementary notes to the APMs, provides further information on the definitions, purpose and reconciliations to IFRS measures of those APMs that are used internally in order to provide parity and transparency between the users of this financial information and the CODM in assessing the core results of the business in conjunction with IFRS measures. Adjusted results Included within our APMs the Group reports a number of adjusted revenues, profit, and other earnings measures, all of which are described throughout the glossary and definitions section of this report. The Group subsequently refers to adjusted results as those which reflect the in-period trading performance of the ongoing omnichannel retail operations (referred to below as underlying operations and trade) and excludes from IFRS measures certain items that are significant in size or volatility or by nature are non- trading or highly infrequent. Those items that the Group consider to be adjusting, as well as the threshold used to determine the departure from IFRS measures is defined below. Adjusting items When determining whether an item is to be classified as adjusting, and the departure from IFRS measures is deemed more appropriate than the additional disclosure requirements for material items under IAS 1, it must meet at least one of the following criteria: • It is non-operating in nature; • It is one-off in nature, such as material non-cash impairments; • Significant strategic implementation programmes that may span multiple reporting periods, where the classification as adjusting removes volatility and aids comparability between periods; or • Causes significant change to the underlying business operations as a result of acquisition, divestiture or closure of operations. Management will classify items as adjusting where an item meets one of the above criteria and it is considered more appropriate to depart from IFRS measures. Below highlights the grouping in which management allocate adjusting items and provides further detail on how management consider such items to meet the criteria set out above. Further information on the adjusting items recognised in the current and comparative period can be found in note A5. Out of period network debtor revaluations Adjusting items includes the impact of out of period network debtor revaluations due to changes in the initial underlying assumptions, primarily driven by the introduction of new regulations or other external factors that drive significant changes in consumer behaviours, where the original transaction was recorded in periods prior to the current financial reporting year. They do not include the incremental amounts that form part of the constraint as these elements are not recognised initially when the performance obligation is satisfied. Although they can recur each period management consider these out of period network revaluations to be non- operating in nature, and thereby distorting the underlying trading performance within the period. Further information can be found in note 14 of the financial statements. The inclusion of such items is considered to be additional useful information for users to aid the understanding of current year trading. Acquisition and disposal related items Includes costs incurred in relation to the acquisition, and income for the disposal of business operations, as the related costs and income reflect significant changes to the Group’s underlying business operations and trading performance. Adjusted results do not exclude the related revenues that have been earned in relation to previous acquisitions but continue to exclude the amortisation of intangibles, such as brands, that would not have been recognised prior to their acquisition. Where practically possible amounts are restated in comparative periods to reflect where a business operation has subsequently been disposed. 225 Governance Financial Statements Investor information Strategic Report Alternative performance measures (‘APMs’) continued Adjusting items continued Strategic change programmes Primarily relate to costs incurred for the execution and delivery of a change in strategic direction, such as; severance and other direct employee costs incurred following the announcement of detailed formal restructuring plans as they are considered one- off; property rationalisation programmes where a business decision is made to rebase the store estate as this is considered both one-off in nature and to cause a significant change to the underlying business operations; and implementation costs for strategic change delivery projects that are considered one-off in nature. Such costs incurred do not reflect the Group’s underlying trading performance. Results are therefore adjusted to exclude such items in order to aid comparability between periods. Regulatory costs While ongoing compliance costs are considered to be operating in nature, and included within adjusted results, in certain instances costs are to be incurred following significant one-off events that lead to the Group incurring material one-off charges. As such, these are considered to be included within adjusting items. Impairment losses and onerous contracts In order to aid comparability, costs incurred for material non-cash impairments and onerous contracts are included within adjusting items where they are considered so material that they distort the underlying performance of the Group. While the recognition of such is considered to be one-off in nature, the unavoidable costs for those contracts considered onerous is continuously reviewed and therefore based on readily available information at the reporting date as well as managements historical experience of similar transactions. As a result, future cash outflows and total charges to the income statement may fluctuate in future periods. Other items Other items include those items that are non-operating and one-off in nature that are material enough to distort the underlying results of the business but do not fall into the categories disclosed above. Such items include the settlement of legal cases and other contractual disputes where the corresponding income, or costs, would be considered to distort users understanding of trading performance during the period. Net interest income / (costs) Included within adjusting interest income / (costs) are the finance income / (costs) of businesses to be exited, previously disposed operations, net pension interest costs on the defined benefit pension scheme within the UK and other exceptional items considered so one-off or material that they distort underlying finance costs of the Group. As disclosed above, the disposal of businesses represents a significant change to the underlying business operations, as such, the related interest income / (costs) are removed from adjusted results to assist users’ understanding of the trading business. The net interest charge on defined benefit pension schemes represents the non-cash remeasurement calculated by applying the corporate bond yield rates applicable on the last day of the previous financial year to the net defined benefit obligation. As a non-cash remeasurement cost which is unrepresentative of the actual investment gains or losses made or the liabilities paid and payable, and given the defined benefit section of the scheme having closed to future accrual on 30 April 2010, the accounting effect of this is excluded from adjusted results. Tax Included within taxation is the tax impact on those items defined above as adjusting. The exclusion from adjusted results ensures that users, and management, can assess the overall performance of the Groups underlying operations. Where the Group is co-operating with tax authorities in relation to tax treatments arising from changes in underlying business operations as a result of acquisition, divestiture or closure of operations, the respective costs will also be included within adjusting items. Management considers it appropriate to divert from IFRS measures in such circumstance as the one-off charges related to prior periods could distort users understanding of the Group’s ongoing operational performance. The Group also includes the movement of deferred tax recognised in relation to the carry forward of unused tax losses within adjusting items. Management considers that the exclusion from adjusted results aids users in the determination of current period performance as the recognition and derecognition of deferred tax is impacted by management’s forecast of future performance and the ability to utilise unused tax losses. Items excluded from adjusted results can evolve from one financial year to the next depending on the nature of exceptional items or one-off type activities. Where appropriate, for example where a business is classified as exited / to be exited, comparative information is restated accordingly. 226 Currys plc Annual Report & Accounts 2021/22 Alternative performance measures (‘APMs’) continued Definitions, purpose and reconciliations In line with the Guidelines on Alternative Performance Measures issued by the European Securities and Markets Authority (‘ESMA’), we have provided additional information on the APMs used by the Group below, including full reconciliations back to the closest equivalent statutory measure. EBIT / EBITDA In the key highlights and performance review we reference financial metrics such as EBIT and EBITDA. We would like to draw to the user’s attention that these are shown to aid comparison of our adjusted measures to the closest IFRS measure. We acknowledge that the terminology of EBIT and EBITDA are not IFRS defined labels but are compiled directly from the IFRS measures of profit without making any adjustments for adjusting items explained above. These measures are: Profit for the year before deducting interest and tax, termed as EBIT; and profit for the year before deducting interest, tax, depreciation, and amortisation, termed as for EBITDA. These metrics are further explained and reconciled within notes A2 and A3 below. Currency neutral Some comparative performance measures are translated at constant exchange rates, called ‘currency neutral’ measures. This restates the prior period results at a common exchange rate to the current year in order to provide appropriate year-on-year movement measures without the impact of foreign exchange movements. Like-for-like (LFL) % change Like-for-like revenue is calculated based on adjusted store and online revenue (including Order & Collect, Online In-Store and ShopLive) using constant exchange rates consistent with the currency neutral % change measure detailed above. New stores are included where they have been open for a full financial year both at the beginning and end of the financial period. Revenue from franchise stores are excluded and closed stores (where closed by the company’s decision and not where closed due to government imposed restrictions related to the global Covid-19 pandemic) are excluded for any period of closure during either period. Customer support agreement, insurance and wholesale revenues along with revenue from other non-retail businesses are excluded from like-for-like calculations. We consider that LFL revenue represents a useful measure of the trading performance of our underlying and ongoing store and online portfolio. Year-on-two-year (Yo2Y) Within the key highlights and performance review we present year-on-two-year (Yo2Y) results for certain metrics in order to aid users in making meaningful comparisons of the Group’s performance following the influence that government enforced store closures had on the Group in the prior year. A1 Reconciliation from revenue to adjusted revenue Adjusted revenues are adjusted to remove out of period mobile network debtor revaluations and the revenues of those operations in which the Group classifies as exited or to be exited but do not meet the definition of discontinued in accordance with IFRS 5 ‘Non-Current Assets Held for Sale and Discontinued Operations’. The exclusion of such revenues helps management and users with the comparability of results, based on the underlying trading performance of continuing operations within the relevant reporting period. The below reconciles revenue, which is considered to be the closes equivalent IFRS measure, to adjusted revenue. Year ended 30 April 2022 UK & Ireland £m Nordics £m Greece £m Eliminations £m Total £m Statutory external revenue 5,485 4,105 554 – 10,144 Out of period mobile network debtor revaluations (22) – – – (22) Adjusted external revenue 5,463 4,105 554 – 10,122 Inter-segmental revenue 67 – – (67) – Total adjusted revenue 5,530 4,105 554 (67) 10,122 Glossary and Definitions continued 227 Governance Financial Statements Investor information Strategic Report A1 Reconciliation from revenue to adjusted revenue continued Year ended 1 May 2021 UK & Ireland £m Nordics £m Greece £m Eliminations £m Total £m Statutory external revenue 5,642 4,186 516 – 10,344 Out of period mobile network debtor revaluations (14) – – – (14) Adjusted external revenue 5,628 4,186 516 – 10,330 Inter-segmental revenue 56 – – (56) – Total adjusted revenue 5,684 4,186 516 (56) 10,330 * As discussed in note 1, during the period the Group’s reportable segments have been changed to reflect the updated segments reported to the Board. As a result, inter- segmental revenue has been restated from £194m to £56m for the year ended 1 May 2021. This is to remove inter-segmental revenue transactions between the previously disclosed UK & Ireland Electricals and UK & Ireland Mobile CGUs. A2 Reconciliation from statutory profit before interest and tax to adjusted EBIT and adjusted PBT Adjusted EBIT and adjusted PBT are measures of profitability that are adjusted from total IFRS measures to remove adjusting items, the nature of which are disclosed above. A description of costs included within adjusting items during the period and comparative periods is further disclosed in note A5. As discussed above, the Group uses adjusted profit measures in order to provide a useful measure of the ongoing performance of the Group. The below reconciles profit before tax and profit before interest and tax, which are considered to be the closest equivalent IFRS measures, to adjusted EBIT and adjusted PBT. Year ended 30 April 2022 Total profit £m Mobile network debtor revaluations £m Acquisition / disposal related items £m Strategic change programmes £m Regulatory costs £m Impairment losses and onerous contracts £m Other £m Pension scheme interest £m Adjusted profit £m UK & Ireland 71 (22) 13 6 (1) 62 (18) – 111 Nordics 130 – 12 – – – – – 142 Greece 21 – – – – – – – 21 EBIT 222 (22) 25 6 (1) 62 (18) – 274 Finance income 2 – – – – – – – 2 Finance costs (98) – – – – – – 8 (90) Profit before tax 126 (22) 25 6 (1) 62 (18) 8 186 Year ended 1 May 2021 Total profit / (loss) £m Mobile network debtor revaluations £m Acquisition / disposal related items £m Strategic change programmes £m Regulatory costs £m Impairment losses and onerous contracts £m Other £m Pension scheme interest £m Adjusted profit / (loss) £m UK & Ireland (11) (14) 14 41 (7) 100 (31) – 92 Nordics 139 – 12 – – – – – 151 Greece 19 – – – – – – – 19 EBIT 147 (14) 26 41 (7) 100 (31) – 262 Finance income 6 – – – – – – – 6 Finance costs (120) – – – – – – 8 (112) Profit before tax 33 (14) 26 41 (7) 100 (31) 8 156 228 Currys plc Annual Report & Accounts 2021/22 A3 Reconciliation from statutory profit before interest and tax to EBITDA EBITDA represents earnings before interest, tax, depreciation and amortisation. It provides a useful measure of profitability for users by adjusting for the volatility of depreciation and amortisation expense which, due to variable useful lives and timing of capital investment, could distort the underlying profit generated from the Group in relative periods. The below reconciles profit before interest and tax, which are considered to be the closest equivalent IFRS measures, to EBITDA. Year ended 30 April 2022 £m Year ended 1 May 2021 £m Profit before interest and tax 222 147 Depreciation 252 279 Amortisation 86 83 EBITDA 560 509 A4 Reconciliation from adjusted EBIT to adjusted EBITDA and adjusted EBITDAR Adjusted EBITDA represents earnings before interest, tax, depreciation and amortisation. This measure also excludes adjusting items, the nature of which are disclosed above and with further detail in note A5. It provides a useful measure of profitability for users by adjusting for the items noted in A2 above as well as the volatility of depreciation and amortisation expense which, due to variable useful lives and timing of capital investment, could distort the underlying profit generated from the Group in relative periods. The depreciation adjusted within adjusted EBITDA includes right-of-use asset depreciation on leased assets under IFRS 16. As some lease expenses fall outside the scope of IFRS 16 due to being short-term, low value or variable, a similar measure of adjusted EBITDAR is provided. Adjusted EBITDAR, provides a measure of profitability based on the above adjusted EBITDA definition as well as deducting rental expenses outside the scope of IFRS 16. The purpose of this measure is aligned to the adjusted EBITDA purpose above however with the addition of excluding the full cost base of leases which can vary from year to year of being in scope or out of scope of IFRS 16 for example due to when leases are short term whilst negotiations are in place regarding lease renewals. The below reconciles adjusted EBIT to adjusted EBITDA and adjusted EBITDAR. The closes equivalent IFRS measures are considered to be profit before interest and tax, the reconciliation of such from adjusted EBIT can be found in note A2. Year ended 30 April 2022 £m Year ended 1 May 2021 £m Adjusted EBIT 274 262 Depreciation 252 279 Amortisation 62 57 Adjusted EBITDA 588 598 Leasing costs in EBITDA 14 13 Adjusted EBITDAR 602 611 Glossary and Definitions continued 229 Governance Financial Statements Investor information Strategic Report A5 Further information on the adjusting items between IFRS measures to adjusted profit measures noted above Note Year ended 30 April 2022 £m Year ended 1 May 2021 £m Included in revenue Mobile network debtor revaluation (i) (22) (14) (22) (14) Included in profit before interest and tax Mobile network debtor revaluation (i) (22) (14) Acquisition / disposal related items (ii) 25 26 Strategic change programmes (iii) 6 41 Regulatory costs (iv) (1) (7) Impairment losses and onerous contracts (v) 62 100 Other (vi) (18) (31) 52 115 Included in net finance costs Net non-cash finance costs on defined benefit pension schemes (vii) 8 8 Total impact on profit before tax – continuing operations 60 123 Tax regulatory matters (viii) 1 1 Tax on other adjusting items (ix) 24 (1) Total impact on profit after tax – continuing operations 85 123 Discontinued operations 24 – (12) Total impact on profit after tax 85 111 (i) Mobile network debtor revaluations In the current period changes in consumer behaviour on previously recognised transactions have led to positive revaluations of network receivables of £22m (2020/21: £14m). Further information can be found in footnote (iv) of the network commission receivables and contract assets reconciliation table within note 14 to the Group financial statements. (ii) Acquisition / disposal related items A charge of £25m (2020/21: £26m) relates primarily to amortisation of acquisition intangibles arising on the Dixons Retail Merger. (iii) Strategic change programmes During the period, further costs of £28m have been incurred as the Group continues to deliver the long-term strategic plan set back in 2018; becoming clearer simpler and faster, improving the overall customer experience with an omnichannel offering and building customers for life. The Group have included such items within adjusting items as, at the balance sheet date, the projects remain on going, with further significant costs and corresponding cash outflows to be recognised. There is expected to be no significant timing difference between the recognition of charges to the income statement and cash outflows. The costs incurred relate to the following strategic change programmes: • £10m one off implementation costs of the Currys rebrand which was announced and completed within the current period; • £12m (2020/21: £41m) of restructuring costs for central operations and UK & Ireland retail operations; and • £6m in relation to costs of implementing the cloud-based omnichannel strategy. The significant one-off costs of the front end omnichannel implementation were initiated and substantially completed in the period. For the year ended 1 May 2021, £13m of restructuring costs were incurred relating to Carphone Warehouse UK standalone store closures and the strategic decision to close the Carphone Warehouse Ireland business. 230 Currys plc Annual Report & Accounts 2021/22 A5 Further information on the adjusting items between IFRS measures to adjusted profit measures noted above continued (iii) Strategic change programmes continued Property rationalisation: Included within strategic change programmes is a credit of £23m (2020/21: £19m) that primarily relates to the release of excess property provisions following successful early exit negotiations on stores included within previously announced rationalisation and closure programmes. For the year ended 1 May 2021 the Group has also incurred £9m of property costs following the announcement to close the Carphone Warehouse Ireland business, £3m of which relates to non-cash impairments over right-of-use assets and £6m for dilapidation and closure related costs. (iv) Regulatory costs In periods prior, the Group provided for redress related to the mis-selling of Geek Squad mobile phone insurance policies following the FCA investigation for periods preceding June 2015. All customer claims are carefully considered by the Group on a case by case basis with the majority of claims received being invalid. As a result, the Group reduced the provision in relation to redress by a further £1m during the year ended 30 April 2022 (2020/21: £8m) as, although the outstanding claims remain uncertain, no new claims were received. For the year ended 1 May 2021, costs of £1m were also recognised in relation to past service costs for the Group’s defined benefit pension scheme following an additional judgement on GMP equalisation. This is further disclosed in note 21, with the cumulative adjustment recognised within adjusting items in relation to the judgement totalling £16m to date. (v) Impairment losses and onerous contracts Management continues to closely monitor the trading performance of the omnichannel business as we emerge from the pandemic and acknowledged a change in consumer shopping habits between our store-mix during the year ended 30 April 2022. This led to the identification and recognition of a non-cash impairment charge of £17m (2020/21: £14m) over store assets within the UK. Also in the current period a non-cash impairment reversal (credit) of £17m was recognised on store assets which had been impaired in a prior period but where indicators of impairment no longer exist. In March 2022 as part of its hybrid-working policy the Group announced it would close its head office in Acton and relocate to facilities operated by WeWork. As a result of this announcement, a non-cash impairment of £31m was recognised, £26m over right-of- use assets and £5m on other fixed assets. The lease contains a lessor-only break option which, if exercised, could result in a material lease remeasurement and reversal of impairment in a future period. In addition, during the period the Group negotiated an early termination settlement on a non-trading lease premises which resulted in an impairment to right-of-use assets of £2m. Further, during the year ended 30 April 2022 management took the decision to stop selling its credit-based mobile offer which resulted in a £24m impairment of fixed assets and recognition of a £4m provision for onerous contracts relating to the unavoidable costs the Group is obligated to pay for services which are not applicable to the ongoing post-pay mobile offer. The Group continues the operational roll out of its long term strategic plan in moving towards a full omnichannel offering, bringing stores and online together, giving customers the best of both worlds at scale. This change, accelerated by the pandemic, has resulted in the identification of a material non-cash impairment charge over intangible assets of £8m (2020/21: £46m), primarily related to software development costs as the Group moves towards best-in-class cloud-based solutions to achieve operational efficiencies and improve the customer journey. In the year ended 1 May 2021, these strategic changes also resulted in the recognition of a one- off £16m contract termination fee. A credit of £7m has also been recognised within the UK & Ireland operating segment following a release of previously recognised onerous contracts related to the closure of the Dixons Travel business following successful exit negotiations and lower than expected closure costs. During the year ended 1 May 2021, the Group recognised an £8m impairment over acquisition intangibles and £16m for onerous contracts and store related asset impairments following the announcement to close the Dixons Travel business. Glossary and Definitions continued 231 Governance Financial Statements Investor information Strategic Report A5 Further information on the adjusting items between IFRS measures to adjusted profit measures noted above continued (vi) Other Credits of £18m primarily relate to compensation received following the settlement of a legal case in relation to anti-competitive behaviour engaged by the counterparty. For the year ended 1 May 2021 the Group recognised a credit of £28m following the settlement of a contractual dispute with the counterparty that caused damage to the Group. A further £5m was also recognised following the settlement of a separate legal case, similar to that of the settlement in the current year but with a different counterparty, in relation to anti-competitive practices engaged. This was marginally offset by £2m of fees incurred. (vii) Net non-cash financing costs on defined benefit pension schemes The net interest charge on defined benefit pension schemes represents the non-cash remeasurement calculated by applying the corporate bond yield rates applicable on the last day of the previous financial year to the net defined benefit obligation. (viii) Tax regulatory matters As previously disclosed, the Group has been co-operating with HMRC in relation to the tax treatment arising due to pre-merger legacy corporate transactions. The Group maintains the tax treatment was appropriate, however, the likelihood of litigation, and therefore risk associated with this matter is such that the Group holds a provision for the probable economic outflow. There have been no significant developments in the year and as such the principal has been retained while further interest of £1m has accumulated throughout the year. (ix) Tax on other adjusting items The effective tax rate on adjusting items is (42%). The rate is higher than the UK statutory rate of 19% predominantly due to movements in unrecognised deferred tax assets in the UK where it is not considered there are sufficient future taxable profits to recognise all of the deferred tax asset in respect of losses, pensions and other timing differences. A6 Reconciliation from statutory net finance costs to adjusted net finance costs Adjusted net finance costs exclude certain adjusting finance cost items from total finance costs. The adjusting items include the finance charges of businesses to be exited, net pension interest costs, finance income from previously disposed operations not classified as discontinued, and other exceptional items considered so one-off or material that they distort underlying finance costs of the Group. Further information on these items being removed from our adjusted earnings measures is included within the definitions above. The below provides a reconciliation from net finance costs, which is considered to be the closest IFRS measure, to adjusted net finance costs. Year ended 30 April 2022 £m Year ended 1 May 2021 £m Total net finance costs (96) (114) Net interest on defined benefit pension obligations 8 8 Adjusted total net finance costs (88) (106) 232 Currys plc Annual Report & Accounts 2021/22 A7 Adjusted tax expense a) Tax expense The corporation tax charge comprises: Year ended 30 April 2022 Year ended 1 May 2021 Adjusted £m Adjusting items £m Statutory £m Adjusted £m Adjusting items £m Statutory £m Current tax UK corporation tax at 19% (2020/21: 19%) 21 (7) 14 5 2 7 Overseas tax 21 – 21 36 – 36 42 (7) 35 41 2 43 Adjustments made in respect of prior years: UK corporation tax 1 – 1 (12) – (12) Overseas 1 – 1 (1) – (1) 2 – 2 (13) – (13) Total current tax 44 (7) 37 28 2 30 Deferred tax UK tax (22) 35 13 4 1 5 Overseas tax 11 (3) 8 (3) (3) (6) (11) 32 21 1 (2) (1) Adjustments made in respect of prior years: UK corporation tax 8 – 8 5 – 5 Overseas tax 1 – 1 (1) – (1) 9 – 9 4 – 4 Total deferred tax (2) 32 30 5 (2) 3 Total tax charge 42 25 67 33 – 33 Tax related to discontinued operations is included in the figures set out in note 24 to the consolidated financial statements. b) Reconciliation of standard to actual (effective) tax rate The principal differences between the total tax charge shown above and the amount calculated by applying the standard rate of UK corporation tax to profit / (loss) before taxation are as follows: Year ended 30 April 2022 Year ended 1 May 2021 Adjusted £m Adjusting items £m Statutory £m Adjusted £m Adjusting items £m Statutory £m Profit / (loss) before taxation 186 (60) 126 156 (123) 33 Tax at UK statutory rate of 19% (2020/21: 19%) 35 (11) 24 30 (24) 6 Items attracting no tax relief or liability (i ,v) 2 (5) (3) 4 8 12 Movement in unprovided deferred tax (iv) (7) 44 37 1 15 16 Effect of change in statutory tax rate (1) (4) (5) 1 – 1 Differences in effective overseas tax rates 2 – 2 6 – 6 Increase in provisions 1 – 1 1 – 1 Adjustments in respect of prior years – provision (ii) – 1 1 (14) 1 (13) Adjustments in respect of prior years – other (iii) 10 – 10 4 – 4 Total tax charge 42 25 67 33 – 33 The effective tax rate on adjusted earnings for the year ended 30 April 2022 is 23% (2020/21: 21%). The effective tax rate on adjusting items is (42)% (2020/21: nil). The future effective tax rate is likely to be impacted by the geographical mix of profits and the Group’s ability to take advantage of currently unrecognised deferred tax assets. (i) Items attracting no tax relief or liability relate mainly to non-deductible depreciation and share-based payments in the UK business. (ii) Provision releases are predominantly where the window for recovery has now closed in relation to pre-merger uncertain tax positions. (iii) Other adjustments in respect of prior years are mainly due to lower tax relief on fixed assets through capital allowances in submitted tax returns than originally estimated. (iv) Deferred tax assets relating principally to tax losses in the UK business have not been recognised due to uncertainty over the Group’s ability to utilise the losses in the future. (v) Items attracting no tax relief or liability relate mainly to non-deductible store closure costs. Glossary and Definitions continued 233 Governance Financial Statements Investor information Strategic Report A8 Adjusted earnings per share EPS measures are adjusted in order to show an adjusted EPS figure, which reflects the adjusted earnings per share of the Group. Weconsider the adjusted EPS to provide a useful measure of the ongoing earnings of the underlying Group. The below table shows a reconciliation of statutory basic and diluated EPS to adjusted basic and diluted EPS on both a continuing and total basis as this is considered to be the closest IFRS equivalent. Year ended 30 April 2022 £m Year ended 1 May 2021 £m Adjusted profit Continuing operations 144 123 Total profit Continuing operations 59 – Discontinued operations – 12 Total profit 59 12 Million Million Weighted average number of shares Average shares in issue 1,165 1,166 Less average holding by Group EBT and Treasury shares held by Company (35) (14) For basic earnings per share 1,130 1,152 Dilutive effect of share options and other incentive schemes [xx] 42 For diluted earnings per share [xx] 1,194 Pence Pence Basic earnings per share Total (continuing and discontinued operations) 5.2 1.0 Adjustment in respect of discontinued operations – (1.0) Continuing operations 5.2 – Adjustments – continuing operations (net of taxation) 7.5 10.7 Adjusted basic earnings per share 12.7 10.7 Diluted earnings per share Total (continuing and discontinued operations) [xx] 1.0 Adjustment in respect of discontinued operations [xx] (1.0) Continuing operations [xx] – Adjustments – continuing operations (net of taxation) [xx] 10.3 Adjusted diluted earnings per share [xx] 10.3 Basic and diluted earnings per share are based on the profit for the period attributable to equity shareholders. Adjusted earnings per share is presented in order to show the underlying performance of the Group. Adjustments used to determine adjusted earnings are described further in note A5. A9 Reconciliations of cash generated from operations to free cash flow Operating cash flow comprises cash generated from / (utilised by) operations, but before cash generated from / (utilised by) discontinued operations, adjusting items (the nature of which are disclosed above), and after repayments of lease liabilities (excluding non-trading stores) and movements in segmental working capital. The measure aims to provide users a clear understanding of cash generated from the continuing operations of the Group. Free cash flow comprises cash generated from / (utilised by) operations, but before cash generated from / (utilised by) discontinued operations and after capital expenditure, capital repayments of lease liabilities, net cash interest paid, and income tax paid. Free cash flow is considered to be useful for users as it represents available cash resources after operational cash outflows and capital investment to generate future economic inflows. 234 Currys plc Annual Report & Accounts 2021/22 A9 Reconciliations of cash generated from operations to free cash flow continued The below provides a reconciliation of cash generated from operations, which is considered the closest equivalent IFRS measure, to both operating cash flow and free cash flow. Reconciliation of cash inflow from operations to free cash flow Year ended 30 April 2022 £m Year ended 1 May 2021 £m Cash generated from operations 524 926 Operating cash flows from discontinued operations – 3 Capital repayment of leases cost and interest (278) (310) Less adjusting items to cash flow 33 173 Less movements in segmental working capital (note A11) 88 (4 5 4) Facility arrangement fees (6) – Operating cash flow 361 338 Capital expenditure (133) (122) Add back adjusting items to cash flow (33) (172) Add back movements in segmental working capital (note A11) (88) 454 Taxation (18) (35) Cash interest paid (17) (24) Free cash flow 72 438 Reconciliation of adjusted EBIT to free cash flow Year ended 30 April 2022 £m Year ended 1 May 2021 £m Adjusted EBIT (note A2) 274 262 Depreciation and amortisation (note A4) 314 336 Segmental working capital (note A11) (88) 454 Share-based payments 23 21 Capital expenditure (133) (122) Taxation (18) (35) Interest (17) (24) Repayment of leases (249) (275) Profit on disposal of fixed assets (1) (6) Free cash flow before exceptional items 105 611 Exceptional costs (33) (173) Free cash flow 72 438 * Other non-cash items in EBIT, as disclosed within the Performance Review, comprises share-based payments and profit on disposal of fixed assets in the above reconciliation to free cash flow. Glossary and Definitions continued 235 Governance Financial Statements Investor information Strategic Report A10 Reconciliation from liabilities arising from financing activities to total indebtedness and net cash Total indebtedness is a new measure used for the first time this reporting period and represents period end net cash, pension deficit and lease liabilities, less any restricted cash. The purpose of this is to evaluate the liquidity of the Group with the inclusion of all interest-bearing liabilities. Net cash comprises cash and cash equivalents and short-term deposits, less borrowings. We consider that this provides a useful alternative measure of the indebtedness of the Group and is used within our banking covenants as part of the leverage ratio. The below provides a reconciliation of total liabilities from financing activities, which is considered the closest equivalent IFRS measure, to total indebtedness and net cash. Year ended 30 April 2022 £m Year ended 1 May 2021 £m Loans and other borrowings (note 18) (80) – Lease liabilities (note 19) (1,267) (1,326) Total liabilities from financing activities (note 26c) (1,347) (1,326) Cash and cash equivalents less restricted cash (note 15) 96 140 Overdrafts (note 18) (2) (6) Pension liability (257) (482) Total indebtedness (1,510) (1 , 674) Restricted cash 30 35 Add back pension liability 257 482 Add back lease liabilities 1,267 1,326 Net cash 44 169 Within the performance review management also refer to average net cash / (debt). Average net cash / (debt) comprises the same items as included in net cash as defined above, however calculated as the arithmetic mean average between April – April for the full year to align to the Group’s Remuneration Committee calculation and as reported internally. A11 Reconciliation of statutory working capital cash inflow to segmental working capital cash inflow Within the performance review on page [x], a reconciliation of the adjusted EBIT to free cash flow is provided. Within this, the working capital balance of £(88)m (2020/21: £454m) differs to the statutory working capital balance of £(123)m (2020/21: £319m) as cash flows on adjusting items are separately disclosed. A reconciliation of the disclosed working capital balance is as follows: Year ended 30 April 2022 £m Year ended 1 May 2021 £m Working capital cash (outflow) / inflow (note 26b) (123) 319 Exceptional provisions 53 93 Network debtor out of period revaluation 22 14 Exceptional receivable – legal settlement (note A5(vi)) (34) 28 Facility arrangement fees (6) – Segmental working capital (88) 454 236 Currys plc Annual Report & Accounts 2021/22 A12 Summary of working capital presented within the performance review Within the performance review on page [x], a summary balance sheet is provided which includes a working capital balance of £(530)m (2020/21: £(684)m). The below table provides a breakdown of how the summary working capital balance ties through to the statutory balance sheet. Network commission receivables are excluded from the breakdown as they are presented separately. Further information on network commission receivables can be found in note 14. Note 30 April 2022 £m 1 May 2021 £m Non-current assets Trade and other receivables 14 39 38 Current assets Inventory 13 1,286 1,178 Trade and other receivables 14 590 448 Derivative assets 25 28 24 Current liabilities Trade and other payables 16 (2,368) (2,233) Derivative liabilities 25 (11) (4 2) Non-current liabilities Trade and other payables 16 (96) (97) Working capital presented within the performance review (532) (684) * Trade and other receivables excludes network commission receivables and contract assets of £190m (2020/21: £239m) as these are presented separately within the condensed balance sheet in the performance review. Glossary and Definitions continued 237 Governance Financial Statements Investor information Strategic Report A13 Restatement of segmental information within the performance review As discussed above, during the period the Group’s reportable segments have been changed, and comparatives have been restated accordingly. The below table provides a reconciliation of results as presented within the performance review for the year ended 1 May 2021. The relevant adjustment is a reconciliation of the previously disclosed UK & Ireland Electricals and UK & Ireland Mobile segments to the UK & Ireland segment. Year ended 1 May 2021 UK & Ireland Electricals as previously reported £m UK & Ireland Mobile as previously reported £m UK & Ireland £m Income Statement Adjusted revenue 4,921 707 5,628 Revenue 4,921 721 5,642 Adjusted EBITDA 393 (102) 291 Adjusted EBITDA margin 8.0% (14.4)% 5.2% Depreciation on right-of-use assets (104) (6) (110) Depreciation on other assets (42) (4) (46) Amortisation (38) (5) (4 3) Adjusted EBIT 209 (117) 92 Adjusted EBIT margin 4.2% (16.5)% 1.6% Adjusting items to EBIT (131) 28 (103) EBIT 78 (89) (11) Margin 1.6% (12.3)% (0.2)% Cash flow Adjusted EBITDAR 401 (103) 298 Adjusted EBITDAR margin 8.1% (14.6)% 5.3% Cash payments of leasing costs, debt and interest (155) (13) (168) Other non-cash items in EBIT – 8 8 Operating cash flow 246 (108) 138 Operating cash flow margin 5.0% (15.3)% 2.5% Capital expenditure (59) (1) (60) Adjusting items to cash flow (63) (110) (173) Free cash flow before working capital 124 (219) (95) Network debtor – 391 391 Segmental working capital 3 (29) (26) Segmental free cash flow 127 143 270 238 Currys plc Annual Report & Accounts 2021/22 Other definitions The following definitions apply throughout this Annual Report and Accounts unless the context otherwise requires: Acquisition intangibles Acquired intangible assets such as customer bases, brands and other intangible assets acquired through a business combination capitalised separately from goodwill. Where businesses have grown organically rather than through acquisition, there is no amortisation of acquired intangibles and therefore the non-cash amortisation charge is removed from our adjusted earnings measures in order to increase comparability between segments Active credit customers Customers with an open ‘Your Plan’ account ADRs American Depositary Receipts ARPU Average monthly revenue per user B2B Business to business Board The Board of Directors of the Company Carphone, Carphone Warehouse or Carphone Group The Company or Group prior to the Merger on 6 August 2014 CGU Cash Generating Unit CODM Chief Operating Decision Maker Company or the Company Currys plc (incorporated in England & Wales under the Act, with registered number 07105905), whose registered office is at 1 Portal Way, London W3 6RS Credit adoption Sales on Credit as a proportion of total sales CRM Customer Relationship Management Currys plc or Group The Company, its subsidiaries, interests in joint ventures and other investments Dixons Retail Merger or Merger The all-share merger of Dixons Retail plc and Carphone Warehouse plc which occurred on 6 August 2014 EBT Employee benefit trust ESG Environmental, social and governance FVTOCI Financial assets measured at fair value through other comprehensive income GfK Growth from Knowledge HMRC Her Majesty’s Revenue and Customs honeybee honeybee was our proprietary IT software operation for which an asset sale was completed on 31 May 2018 IFRS International Financial Reporting Standards as adopted by the UK Market position Ranking against competitors in the electrical and mobile retail market, measured by market share. Market share is measured for each of the Group’s markets by comparing data for revenue or volume of units sold relative to similar metrics for competitors in the same market MNO Mobile network operator MVNO Mobile virtual network operator NPS Net Promoter Score, a rating used by the Group to measure customers’ likelihood to recommend its operations Online Online sales and Online market share relate to all sales where the journey is completed via the website or app. This includes online home delivered, order & collect, Online In-Store and ShopLive Online In-store Online In-store is the term used for sales that are generated through in-store tablets for product that is not stocked in the store Order & collect Order & collect is the term used for sales where the sale is made via the website or app and collected in store Peak / post peak Peak refers to the 10 week trading period ended on 8 January 2022 as reported in the Group’s Christmas Trading statement on 14 January 2022. Post peak refers to the trading period from 9 January 2022 to the Group’s year end on 30 April 2022 RCF Revolving credit facility Sharesave or SAYE Save as you earn share scheme Glossary and Definitions continued 239 Governance Financial Statements Investor information Strategic Report ShopLive The Group’s own video shopping service where store colleagues can assist, advise and demonstrate the use of products to customers online face-to-face SIMO Sales of SIM-only contracts, without attached handset TSR Total shareholder return UK GAAP Generally Accepted Accounting Practice in the UK is the body of accounting standards published by the UK’s Financial Reporting Council WAEP Weighted average exercise price 240 Currys plc Annual Report & Accounts 2021/22 Shareholder and Corporate Information Currys plc is listed on the main market of the London Stock Exchange (stock symbol: CURY) and is a constituent of the FTSE 250. Company registration number 07105905 Registered office 1 Portal Way, London, W3 6RS, United Kingdom Corporate website www.currysplc.com The website includes information about the Group’s vision and strategy, business performance, corporate governance, sustainability, latest news and press releases. The Investors section includes information on the latest trading performance, records of past financial results, share price information and analyst coverage. Share Registrar Equiniti is the share registrar for Currys plc. Shareholders can contact Equiniti as follows: Post – Aspect House, Spencer Road, Lancing, West Sussex, BN996DA, United Kingdom Online – https://equiniti.com/uk/contact-us/shareholder-enquiries Telephone – 0371 384 2089 (UK callers) or +44 (0)121 415 7047 (International callers). Telephone lines are open on UK business days between 8.30am and 5.30pm UK time. Shareholder enquiries Any queries that shareholders have regarding their shareholdings, such as a change of name or address, transfer of shares or lost share certificates, should be referred to Equiniti using the contact details above. Managing shares online Shareholders can manage their holdings online by registering with Shareview at www.shareview.co.uk. This is a secure online platform which is provided by Equiniti. To register, you will need your shareholder reference number and this can be found on your share certificate, form of proxy or any correspondence from Equiniti. Unauthorised brokers (boiler room scams) Currys plc is legally obliged to make its share register available to the general public in certain circumstances. Consequently, some shareholders may receive unsolicited phone calls or correspondence concerning investment matters which may imply a connection to the company concerned. These are typically from overseas-based ‘brokers’ who target UK shareholders offering to buy their shares or sell them what can turn out to be worthless or high-risk shares in US or UK investments. These communications can be persistent and extremely persuasive. Share fraud includes scams where investors are called out of the blue and offered shares that often turn out to be worthless or non-existent, or an inflated price for shares they own. These calls come from fraudsters operating in ‘boiler rooms’ that are mostly based abroad. While high profits are promised, those who buy or sell shares in this way usually lose their money. If you are approached about a share scam, you should tell the FCA using the share fraud reporting form at www.fca.org.uk/ consumers/report-scam-us where you can find out about the latest investment scams. You can also call the Consumer Helpline on 0800 111 6768. ShareGift If you have a very small shareholding that is uneconomical to sell, you may wish to consider donating it to ShareGift (Registered charity no. 1052686), a charity that specialises in the donation of small, unwanted shareholdings to good causes. You can find more information by visiting sharegift.org or by calling 0207 930 3737. Electronic communications Shareholders will receive annual reports and other documentation electronically, unless they tell our registrar that they would like to continue to receive printed materials. This is in line with best practice and underpins our commitment to reduce waste. Shareholders may view shareholder communications online instead of receiving them in hard copy. Shareholders may elect to receive notifications by email whenever shareholder communications are added to the website by visiting www.shareview.co.uk and registering online. Auditor Deloitte LLP, 1 New Street Square, London, EC4A 3BZ www.deloitte.com Joint Stockbrokers Deutsche Bank AG, 1 Great Winchester Street, London, EC2N 2DB www.db.com Citigroup Global Markets Limited, 33 Canada Square, Canary Wharf, London, E14 5LB www.citigroup.com Company Secretary Nigel Paterson, General Counsel and Company Secretary [email protected] Investor relations Dan Homan, Investor Relations Director [email protected] The outer cover of this report has been laminated with a biodegradable film. Around 20 months after composting, an additive within the film will initiate the process of oxidation. FSC DETAILS TBC
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