AUDIT AND RISK COMMITTEE REPORT
Dear Shareholder, I am pleased to report on the activities of the Audit and Risk Committee (the “Committee”) during the year under review. Role of the Committee The Committee’s role is central in bringing together the Group’s risk management activities and control framework to ensure adherence to policies, the integrity of financial reporting and the maintenance of a strong, risk-focused culture. The Committee oversees and reviews the management of risk, financial results, and the Group Internal Audit function. This includes reviews of recent and upcoming regulatory changes and the Group’s exposure to all risks and opportunities, including those related to climate change and the changes to the UK Corporate Governance Code announced in January 2024. During the year, the Committee discharged its duties under its Terms of Reference, and in line with the FRC’s Minimum Standard. As Chair of the Audit and Risk Committee, I attend the Annual General Meeting and make myself available for any Shareholder questions within the Committee’s remit. Key responsibilities of the Committee: ■ Consideration of the appropriateness of the accounting principles, policies and practices adopted in the Group’s accounts ■ Review of external financial reporting and associated announcements to ensure they are fair, balanced and understandable ■ Managing the appointment and remuneration of the Group’s external auditor, together with an assessment of the effectiveness and independence of the audit, including the policy on the award of non-audit services ■ Initiating and supervising a competitive tender process for the external audit, as and when required ■ Oversight of the Group Internal Audit function ■ Ensuring the effectiveness of the Group’s risk management processes and internal controls ■ Oversight of, and updates to the Group Risk Register ■ Oversight of the Group’s whistleblowing procedures in conjunction with the Board. Where issues are reported that require further investigation, this is typically conducted by the Group Internal Audit function, which reports back to the Committee as to its findings and whether any further action is necessary or desirable. Additionally, where any investigations reveal wrongdoing, or where remedial actions are required, the Committee maintains oversight of those actions until such time as it is satisfied that the underlying issues have been adequately addressed. ■ Monitoring compliance with the UK Corporate Governance Code Meetings During the year, the Committee met three times and also met privately with the external auditor. The Committee comprised the people shown in the table above, all of whom are Non-Executive Directors.
■ Approved the Group’s material controls and assurance framework for complying with Provision 29 of the UK Corporate Governance Code due to come into effect from 1 January 2026 (effective for the Group from the financial year ending 31 March 2027), including requesting the completion of a dry run exercise to be delivered for FY 2025/26 ■ Reviewed a fraud risk assessment undertaken by the Risk & Internal Audit team January 2026 ■ Reviewed the external audit planning report for the 2026 Annual Report and Accounts (including review and approval of audit scope) ■ Reviewed and approved the 2026 Annual Report and Accounts timetable along with the approach for ensuring the Annual Report would be fair, balanced and understandable ■ Agreed a risk management and internal audit programme and resource requirements in detail for FY 2026/27, and at a higher level for the following three years to ensure all businesses would be audited over a four-year cycle ■ Agreed the assurance mechanisms for the Group’s material controls in line with Provision 29 of UK Corporate Governance Code ■ Annual review and update of the Non-Audit Services Policy ■ Annual review and update of the Group’s Tax Strategy ■ Reviewed the Group’s Anti-Bribery & Corruption Policy and its implementation May 2026 ■ Reviewed the results of the external audit of the 2026 Annual Report and Accounts ■ Reviewed the going concern and viability statements ■ Reviewed the 2026 Annual Report and Accounts, including assessing and confirming that the Report was fair, balanced and understandable ■ Assessed and agreed the independent status of the external auditor ■ Discussed the overall adequacy and effectiveness of the Group’s internal controls, including reviewing the Group Internal Audit function’s annual opinion on the Group’s control framework ■ Reviewed the results of the dry run exercise to provide assurance over the Group’s material controls in line with Provision 29 of the UK Corporate Governance Code, including actions to improve the process for the next financial year ■ Reviewed progress against the recommendations arising from the self-assessment of the Internal Audit function’s effectiveness ■ Half-yearly review of the Group Risk Register, including agreeing key risks for inclusion in the 2026 Annual Report and Accounts
In addition to the Committee members, the Group Chairman, Group Chief Executive Officer, Group Finance Director, Group Financial Controller, representatives from the external auditor, the Head of Risk and Internal Audit, the Head of Group Reporting, and the Group Head of Infrastructure and Support attended some or all of these meetings by invitation. As Chair of the Committee, I maintain direct communication with the external auditor and the Head of Risk and Internal Audit, independently of the management of the Group. Meetings of the Committee are scheduled so as to ensure the Committee is informed fully, and on a timely basis, on areas of significant risks and judgement. The Committee also receives sufficient, reliable and timely information from management on significant changes to financial accounting standards and reporting requirements, regulatory and governance changes and developments concerning risk management, fraud prevention and detection, and cyber security. As Chair of the Committee, I report to the Board on any significant matters arising from the activities of the Committee. The Board is satisfied that the members of the Committee have both recent and relevant experience (as set out on pages 88 and 89). The Committee is satisfied that the Group’s executive compensation arrangements do not prejudice robust controls and good stewardship. Committee activities during FY 2025/26 and FY 2026/27 to date May 2025 ■ Reviewed the results of the external audit of the 2025 Annual Report and Accounts ■ Reviewed the going concern and viability statements ■ Reviewed the 2025 Annual Report and Accounts, including assessing and confirming the presentation of the consolidated Statement of Profit and Loss and that the Report was fair, balanced and understandable ■ Assessed and agreed the independent status of the external auditor ■ Discussed the overall adequacy and effectiveness of the Group’s internal controls and reviewed the Group Internal Audit function’s annual opinion on the Group’s control framework ■ Reviewed the half yearly update of the Group Risk Register, including agreeing key risks for inclusion in the 2025 Annual Report and Accounts November 2025 ■ Reviewed half-year results and judgemental accounting areas ■ Reviewed the external auditor’s preliminary view of FY 2025/26 audit planning considerations ■ Reviewed the half yearly update of the Group Risk Register, including risk reporting by each operating business
Clive Watson Chair of the Audit & Risk Committee
Members
Member since
Clive Watson (Chair) Rosalind Kainyah
2019 2022 2023
Celia Baxter
The Group Company Secretary acts as Secretary to the Committee.
The Committee will continue to engage closely with management, to monitor developments in best practice and ensure the Group’s approach to internal controls and risk management remains robust and appropriate.”
104
105
discoverIE Group plc Innovative Electronics
Annual Report and Accounts for the year ended 31 March 2026
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