Dunelm : Notice of AGM 2020

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt about the contents of this document or the action you should take, you should consult your stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under the Financial Services and Markets Act 2000 immediately.

If you sell or otherwise transfer or have sold or otherwise transferred all of your Ordinary Shares you should send this document and the accompanying Form of Proxy as soon as possible to the purchaser or transferee, or to the stockbroker, bank or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee. However such documents should not be distributed, forwarded or transmitted into any jurisdiction in which to do so would constitute a breach of the relevant laws of such jurisdiction. If you sell or have sold or otherwise transferred only part of your holding, you should retain these documents and consult the stockbroker, bank or other agent through whom the sale or transfer was effected.

DUNELM GROUP PLC

(Incorporated and registered in England and Wales with No. 4708277)

Notice of 2020 Annual General Meeting including Authority to Make Market Purchases of its Ordinary Shares, adoption of

new Articles of Association and certain other matters

CONTENTS

PART 1	: LETTER FROM THE CHAIRMAN	2
PART 2	: DEFINITIONS	6
PART 3	: NOTICE OF ANNUAL GENERAL MEETING	8
APPENDIX 1	: SUMMARY OF THE PRINCIPAL TERMS OF THE DUNELM 2020 SHARE PLAN	14
APPENDIX 2	: SUMMARY OF THE PRINCIPAL CHANGES TO THE COMPANY'S ARTICLES OF ASSOCIATION	17

1 Dunelm Group plc General Meeting Circular 17 November 2020

PART 1

LETTER FROM THE CHAIRMAN

DUNELM GROUP PLC (the "Company")

(Incorporated and registered in England and Wales with No. 4708277)

Directors:	Registered office:
W L Adderley (Deputy Chairman)	Watermead Business Park
I Bull (Independent Non-Executive Director)	Syston
L E Carr (Chief Financial Officer)	Leicester
A Harrison (Chairman)	Leicestershire
W Reeve (Independent Non-Executive Director)	LE7 1AD
P Ruis (Independent Non-Executive Director)
M J Sears (Non-Executive Director)
P A Vennells (Independent Non-Executive Director)
N G Wilkinson (Chief Executive Officer)

9 October 2020

To Shareholders of the Company

Dear Shareholder

1. Introduction

The purpose of this letter is to provide you with an explanation of the Resolutions to be proposed at the Annual General Meeting of the Company which will be held at Dunelm's Store Support Centre, Pontylue Way, Watermead Business Park, Syston, Leicestershire, LE7 1AD at 11.30am on 17 November 2020, and to recommend that you vote in favour of them. The Notice of Annual General Meeting is set out at Part 3 of this document, and definitions which apply throughout this document are set out in Part 2.

The evolving situation in relation to COVID-19 and related governmental restrictions may significantly impact the ability of shareholders to attend the Annual General Meeting. Shareholders are strongly encouraged to very carefully consider public health and government advice at the time of the Annual General Meeting and to exercise their right to cast their votes in respect

of the business of the Annual General Meeting by voting via proxy or using our electronic voting facility. Shareholders are strongly encouraged to appoint the Chairman of the Meeting as a proxy for the Meeting. It is currently expected that the Annual General Meeting will be held as a physical meeting at the venue specified above, but this may be subject to change. Shareholders should regularly check the Company's website for updates in relation to the Annual General Meeting. If you are planning to attend the meeting, please register with [e-mail] so that we know that you will be attending the meeting and can plan to take measures to ensure your safety and to apply any social distancing guidelines in place.

2. Ordinary business

The ordinary business of the Annual General Meeting comprises Resolutions 1 to 20 inclusive.

Resolution 1: Report and accounts

The Directors are required to lay the Directors' Report, the audited annual accounts of the Company and the independent Auditor's Report before Shareholders at the Annual General Meeting. Accordingly, Resolution 1 presents the accounts for the year ended 27 June 2020 and, although not a statutory requirement, proposes the accounts for adoption. A copy of the Annual Report accompanies this document.

Resolutions 2 to 16: Re-election of Directors

In accordance with the provisions of the UK Corporate Governance Code, all Directors will be retiring and will offer themselves for re-election at the Annual General Meeting.

In accordance with Listing Rule 9.2.2E R (2), there will be an ordinary resolution and a separate resolution of the Independent Shareholders in respect of the reappointment of each of the independent Directors of the Company. The Board considers that the following Directors are independent for these purposes: Ian Bull, Andy Harrison, William Reeve, Peter Ruis and Paula Vennells. Although no longer considered by the Board to be an independent Director due to her tenure of over nine years, Marion Sears will also put herself forward for reappointment by Independent Shareholders. No Controlling Shareholder or Associate of a Controlling Shareholder will be eligible to vote in respect of these additional resolutions.

At the date of this document Will Adderley and the other members of the Concert Party are the only Controlling Shareholders, and are precluded from voting on Resolutions 6, 8, 10, 12, 14 and 16.

Dunelm Group plc General Meeting Circular 17 November 2020 2

Biographies of each of the Directors are contained on pages 82 to 84 of the Annual Report, which can be found at https:// corporate.dunelm.com, and a hard copy is available on request from Dawn Durrant at [e-mail].

The Board believes, following the completion of the annual performance evaluation and appraisal exercise, that the performance of the Directors seeking re-election continues to be effective and that these Directors demonstrate commitment to their roles.

Further information is given below in relation to the independence of the independent Directors named above:

1. confirmation is given that none of the independent Directors named above has or had any existing or previous relationship, transaction or arrangement with the Company, any of its Directors, any Controlling Shareholder or any other Associate of a Controlling Shareholder;
2. the independence of Non-Executive Directors is considered on appointment and then reviewed annually by the Chairman as part of the evaluation process. There is also an annual Board review. The Board takes into account the provisions of the UK Corporate Governance Code, as well as policies and guidelines issued by investor representatives such as the Investment Association and the Pensions and Lifetime Savings Association; and
3. the process for the selection of new Directors is described in the report of the Nominations Committee in the Annual Report. Thereafter the Nominations Committee formally puts forward the names of Directors to be proposed for reappointment at the Annual General Meeting.

Resolution 17: Approval of revised

Remuneration Policy

This is a resolution to approve a revised Remuneration Policy, which is set out on pages 128 to 141 of the Annual Report. Under Schedule 8 of the Large and Medium- sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013 (the "Regulations"), the Directors must prepare a binding Remuneration Policy

to be put forward for approval by Shareholders at least every three years. Once the Remuneration Policy has been approved, no payment may be paid to a Director or past Director unless it is consistent with the approved policy unless Shareholder approval is sought. The exception to this is if the payment is made pursuant to a contractual obligation that was in force at 27 June 2012.

Shareholders approved a binding Remuneration Policy at the Annual General Meeting on 21 November 2017. An amended policy is now being put forward for approval. A summary of the amendments is set out in the Annual Report, and the proposed revised policy is set out in full in the Annual Report, which accompanies this document. The Shareholder vote will be binding, and if not passed the Board will either retain the existing policy approved in 2017, or amend the proposed new policy and put it forward

for approval at a further vote at a specially convened general meeting.

Resolution 18: Directors' Annual Report on Implementation

Under Schedule 8 of the Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013 (the "Regulations"), the Directors must prepare an annual report which sets out how the directors' remuneration policy that has been in force during the financial year has been applied during the year, and how the applicable policy will be applied in the coming year. The Directors' Annual Report on Implementation must also be put to Shareholders for approval at the Annual General Meeting, although this vote is advisory. If this

vote was not passed, the Company would consult with Shareholders and would be obliged to put the directors' remuneration policy back to Shareholders for approval at the Annual General Meeting of the Company in 2021.

This is the resolution to approve the Directors' Annual Report on Implementation, which is set out on pages 142 to 155 of the Annual Report.

Resolution 19: Appointment of the auditors

The Company's auditors must offer themselves for reappointment at each general meeting at which accounts are presented. The Company proposes that PricewaterhouseCoopers LLP, who have been the Company's auditors since January 2014, be appointed by Shareholders as auditors of the Company.

Resolution 20: Remuneration of the auditors

This Resolution, which is conditional on the passing of Resolution 19, gives authority to the Directors to agree the auditors' remuneration. In accordance with the UK Corporate Governance Code and the Competition and Markets Authority Order on statutory audit services, the Audit and Risk Committee will agree this on behalf of the Board.

3 Special business

The special business to be considered at the Annual General Meeting comprises Resolutions 21 to 27 inclusive.

Resolution 21: Authority to allot Ordinary Shares This Resolution gives the Directors authority to allot share capital with a nominal value of up to £674,338 which, as at the Latest Practicable Date, represented approximately one third of the Company's issued Ordinary Share capital

of £2,976,986.

This authority will expire at the conclusion of the next annual general meeting of the Company after the passing of this Resolution or, if earlier, on 31 December 2021 unless it is previously renewed, varied or revoked.

The Company held 532,579 Ordinary Shares in treasury as at the Latest Practicable Date.

3 Dunelm Group plc General Meeting Circular 17 November 2020