Docusign En¥ÈlopÈ ID". 857gF2Fc-D58￿26s-8F42-7FC2los7EA7l Charity Registration No. 1134359 Company Registration No. 07130031 {England and Wales) HOUNDS FOR HEROES ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023 TOGETHER WE CAN Docusign En¥ÈlopÈ ID". 857gF2Fc-D58￿26s-8F42-7FC2los7EA7l HOUNDS FOR HEROES LEGAL AND ADMINISTRATIVE INFORMATION Tru$ts9S Allen Parton Amanda Ferguson Peter Grinsled Daniel Connor Olivia Brown Jade Norman Elizabeth Ridgeway Charty number (England & Wales) 1134359 Charlty number IS¢ollandl SC043751 Company number 07130031 Chalr Amanda Ferguson Vice-chair Allen Parton Registered office Unil 2B Rookery Farm Buildings Ramsdean Pelersfield Hampshire GU32 1RU Auditor Fiander Tovell Limited Stsg Gales House 63184 TheAvenue Southampton Hampshire S017 1XS Bankers Lloyds Bank plc 5 The Square Pelersfield Hampshire GU32 3HL Docusign En¥ÈlopÈ ID". 857gF2Fc-D58￿26s-8F42-7FC2los7EA7l HOUNDS FOR HEROES CONTENTS Pagg Trustees. report Independent auditorfs report 9-11 Statement of financial activities Balance sheet 13 Statement of cash flows 14 Notes lo the financial statements 15-30 Docusign En¥ÈlopÈ ID". 8579F2FC-D5834269-8F42-7FC21097EA71 HOUND5 FOR HEROE5 TRUSTEES. REPORT (INCLUDING DIREcfoRS' REPORT) FOR THE YEAR ENDING 31 MARCH 2023 The Trustees present their report and accounts for the financial year ended 31" March 2023. The financial statements have been prepared in accordance with the accounting policies set out in note 1 to the financial statements and comply with the Charity's Articles of Association, the Companies Act 2006 and Accounting and Reporting by Charities. Slalemenl of Recommended Practice applicable lo charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland IFRS 1021 leffective 1 January 20191" 1 Objectives and Activities 1.1 Our Obje￿iveS Our principal objective is to enhance the quality ol life of HM Armed Forces and Emergency Services personnel who have become disabled Ihiough injury or illness at any time. The Charity's Mernorandum of Articles and Association allows a broad range of mechanisms by which the Charity may achieve this objective, however, the Charity only came into existence because of a remarkable life changing partnership that formed between a dog and an injured serviceman. Therefore, it remains the Chaiity's purpose to deliver our Ch8rit8ble Benefit primarily through the provision of speaally trained Assistan￿ Dogs. This is the raison d'et￿ ol the Charity. Sinoe the Start of oper8tion. the Charity has chosen lo fund the whole working life of our dog5 up lo the dog's retirement. In this way the Charity can best safeguard the welfare of all our dogs throughout their working lives as well as relieve our partners from the financial commitment of being partnered with an assistance dog. 1.2 Our 5 Year Strategy {FY22123- FY26127) The Charity developed an updated S Year Strategic Plan for the start of this fiscal year FY22123, so this report covers Yr1 of that strategy. The strategy sets out to accelerate the delivery of charitable benefit. increasing the number of partners it is able to support balanced with our ability to generate income to fund this rate of delivery. The Strategy is very much about building on the current solid foundations and development of the Charity to ensure il can meet the vision whilst maintaining the quality of output and the GharaGtei of the Charity th81 have become ils hallmarks. Key elements of the 5 Year Sti8legy as follows.. The acceleration of delivery of charitable benefit is qu8nlified by steadity increasing the nLrtErof puwxes aryired eath year to (XxThrE￿ tsainiro fr(m 5 puppies this to 24 ¥￿e$ li the fnal year of Ihe strategic rAan and for the number of established new partnerships therefore to grow by an average of 8 new partnerships per year over the 5 wstrategy period. The acceleration of delivery of charitable benefit will require increased expenditure which will be rnet by a growth in income generated by a rnoie 51gnificant fundiaising activity plan, supported by expert resource as required and increased communication to key audiences. The strategic plan assumes that, as it will take time for the fundraising momentum to build, any cash deficit resulting from the inbalance befvveen income and expenditure in the first two years of the plan will be rnet by the use of unrestricted gene[81 funds, wlh th8 largel th* the Chairty will r8ach 3 breakeven position during FY24125 It is important that awareness of the support the Charity provides reaches those service personnel who could potentially benefit trom a partnership with an assistance dog. 11 is therefore a key component ol the Strategy that the Charity continues to build it5 relationship with other tnilitary and ern8rgency servic8 SUPPOrt organisation5 to facilit8t communication and also offer mutual support to beneficiaries The standards to which Hounds for Heroes operates are comparable to, and guided by, those deterrnined by Assistance Dogs International IADII and are embedded as part of our heritage and what the Charity strives to maintain foi our partners The governance of the Charity shall be delivered by a team of Trustees who are unpaid volunteers. The ownership of the Charity's strategic plan will remain with the Trustees, and during the strategy period stiategic decisions will be made by the Trustees, with the involvement of the Charity Manager. The day-to-day operational rllanagement will be conducted by the Charity's Senior Management Team. TOGETHE Docusign En¥ÈlopÈ ID". 8579F2FC-D5834269-8F42-7FC21097EA71 HOUND5 FOR HEROE5 TRUSTEES. REPORT (INCLUDING DIREcfoRS' REPORT) FOR THE YEAR ENDING 31 MARCH 2023 1.3 Our Achievements and Performance At the start of this fiscal. the Charitys overarching objective forthe coming year. afterthe disruptions caused by Covid in the prior couple of years, was to have a year of full operations, return to our planned levels of Servi￿ and delivery , rebuild our income streams and rnaintain the quality of our dog training and partner support in order to deliver our charitable benefit as effectively as we could. Given that many of our applicants and partners are dassed as clinically extremely vulnerable, even though the thi8at and Issues caused by covid have eased, we continue to be very mindful to operate In a Covid-safe rnann8r, regularly reviewing our operating piactices, so that our applicants and partners land also staff and volunteersl feel they are not placed at risk when dealing with the Charity. Having been able to reintrodu￿ applicant visits and matching sessions at the Charity's centre from the summer of 2021. we were delighted in FY22123 to be able to deliver 5 advanced dogs into partnerships, one of which was replacernent dog for an existing Partner whose original dog had reached our sel retirement age of 10 years old. thus meeting the target we had set for FY22123. Having put on hokl accepting new applications for partnerships in FY20121 and nearfy all of FY21122 due to Covid, our application process has been open throughout the year. We had aimed to acquire 8 puppies in FY22123 but unfortunately were only able to bring in 5 puppies due to unforeseen constraints in training resour￿ in the rniddle of the fiscal 8nd a reduction in the avai18bility of volunteer puppy parents. The Charity is reliant on having a pool of puppy parents who do an amazing job of 5UPPOrting the Charity by providing the puppies with a loving, safe home and giving basic training for the first one to two years of their lives. The Charity conducts regular recruitment drives to attract new puppy parents as it is a critical factor in our ability to expand our int8k8 of puppies as planned in our current 5 Year Strategy. We were able to return to using our training centre throughout the year for advanced dog training and the running of puppy classes. as well as providing ongoing support lo the PLJPPY parents, with our dog tiainer5 conducting 8 level of general training in extemal environments and providing one-to-one support as required. Similady, after having to deliver aftercare remotely during the Covid period, our rewlarschedLAeofafteThrevBrts been r&estsNiqW Partners and their dogs pleased to be able to see our staff In person in their hotne environrnent. The Charity does not receive any govemment funding and therefore is totally dependent upon the income it can raise to fund the development and delivery of its charitable benefit. As stated earlier, it is our intention, as set out in the 5 Year Strategic Plan, lo steadily iNcre8se the number of dogs in trainin9 and in partnerships. This will require increased expenditure and therefore it is critical that the Chaiity grows ils income significantly over the coming years. Therefore, at the beginning of this fiscal year. the Gharity recruited 8n experienced Fundr8ising Managerlo proactively generate and coordinate our inoome generation activities. It is pleasing to report that. despite the challenging economic environment. our total income inoieased in FY22123 by 77P/o. recovering lo pre-pandemic levels. This will, however. continue to be a rnajor area of focus for the Charity 8s further continuous growth in income is required. We are very grateful for the generous donations made by 8 broad rnix of inslilulions, ￿rpOrate sponsors and individuals who h8ve undertaken a number of oh311enge$ and activities lo geneiale our rnuch needed funds. Expenditure continued to be very tightly Tnan8ged but inevitably as the Charity returned lo a full year of mole normal operations our cost5 increased, resuKing in our full year expenditure being +17¢/0 VS the prior yeai. We continLJe to develop our ways of working to be able to operate as effi￿ent￿ as possib￿. To facilitate the desired growth In the number of partnerships and in income generation, the Charity has been working on developing an ongoing communications programme which aims to increase awareness of the Charity, who and how it helps, and how it can be supported amongst its key audiences. A key adivity in this fiscal was to launch an improved, updated website which went live in March'23 and we have grown our marketing activity, particularly on social media channels, increasing our engagement with supporters and attended a larger number of relevant events and the Charity's Founder has continued to deliver an Awareness Programme to increase understanding of the Charity's objectives amongst both the communities it wishes to deliver charitable benefit to, and with current and potential supporters. TOGETHE Docusign En¥ÈlopÈ ID". 8579F2FC-D5834269-8F42-7FC21097EA71 HOUND5 FOR HEROE5 TRUSTEES. REPORT (INCLUDING DIREcfoRS' REPORT) FOR THE YEAR ENDING 31 MARCH 2023 The Charity was registered in 2010. Since starting operations, we have monitored our performance by measuring how bng each dog receives puppy training, how long each dog receives advanced training and how long each dog has been in partnership. In Ihisway we knowwhal we have achieved from our registration and what we h8ve achieved each ye8r. Thes8 achievern8nt5. or deliv81ie5, are measured in units of production of dog-years where 8 dog-y88r is the delivery of 1 year of training or 1 year of partnership support for one dog for one year. By the end of FY22123 the Charity had achieved the following.. More than 138 dog-years of dog training have been delivered 30 successful placements of partneiing a specially trained assistance dog with a dient have been achieved Nearly 70 dog-years of partnership with proper partnership support have been delivered to Partners living throughout the UK The Charity continues to use the comparison of the number of successful placements wrth the number of puppies that have started the training course as a key perfomance indicator. sin￿ commenang operations in 2011, by the end of FY22123 the Charity had achieved 30 successful placements and this represents 62 /0 of the number of puppies that have started the training course and would have been expected lo have been suwessfully pla￿d with 8 Partner. The Gharily aims to continue to impr(>ve performance in this area by our knowledge ol breeds and breeders, by increasing the awareness arnongsl breeders of the Charity's needs and by continuously improving our dog training and partnering processes. And finally, The Trustees would like to pay tribute to the hard work and dedication of our staff and volunteers throughout this p81iod. 1.4 Our Focus for the Coming Year The Charity's overarthing objedive forthe coming year is to continue to develop the Charity to deliverthe key elements of our 5 Year Strategic Plan The areas of focus for FY23124 identified by the Trustees are.. To continue lo deliver high quality support and after-care to our existing Partners and to develop new partnerships. The number of dogs in active partnerships al the end of FY22123 wa5 15 and the largel is lo establish a further 7 new partnerships by the close of the fiscal and it is pleasing to report that lo date 3 new partnerships have been achieved. Taking into account the desire lo have an ongoing. steadty irw>p85ing, pipeline of dogs lo lake through the various stages of tiaining and plaoernent and ensure we deliver Ihe ￿a￿lled new partnerships in each year. we aim lo acquire 10 puppies in FY23124. So far, we have welcomed 6 new puppies to the Hounds for Heroes team th 4 planned to join in the final quarter of the fiscal. It is to be noted that the average cost of a puppy. which in¢rea5ed signilicantly due to the high dem8nd during the p8ndemi¢. has now decreased lo a more 8ccept8ble level, a￿hOUgh still remains above the pre-pandemic average cost In ordei to support the growth in the pipeline of dogs. it is critical that the number of volunteer puppy parents is also increased. Sever81 reciuitment drives are p18nned for the year and the Charity will shortly18un¢h 8 PUPPY training hub in Portsmouth to extend its puppy parent catchtnent area In order to fund increase in the delivery of charitable benefit whilst 8150 ieducing our operating defiat, continued growth in income generation is vitsl. We will continue to develop both our breadth and depth of incorne streams. investing in additional additional lundiaising iesource and expertise as required. Th15 will also be supported by our marketing and communications activity to raise awareness (rfthe work of the charity, increase supporter engagement and grow OLJr supportei base. To increase awareness of who the charity helps and the support It provide, th8 Charity will build its Ctstntnuniixtion and relationship5 Wlth relevant organi5ations in older to reach more potential applicants The Charity will continue to manage expenditure carefully, keeping a tight control on costs and seeking efficiencies to offset cost inflation if at all possible The Board of Trustees will regularly review and monitor progress of the ini1181ives lo be prosecuted to deliver the Obl￿tIveS of the 5 Year Stiategy TOGETHE Docusign En¥ÈlopÈ ID". 8579F2FC-D5834269-8F42-7FC21097EA71 HOUND5 FOR HEROE5 TRUSTEES. REPORT (INCLUDING DIREcfoRS' REPORT) FOR THE YEAR ENDING 31 MARCH 2023 2. Financial Review 2.1 OveNiew The prior 5 Year Strategy put in place at the start of FY17118 anticipated 8 decrease In the level of unrestricted general funds as the planned acceleration of the delivery of chaiitable benefit was over time expected to see outgoings increase above income. At the time that the Strategy was implemented, we did of course not anticipate a global pandemic and the resulting impact to the Charity's income and expenditure. Due to the exceptional circurnslances of the p8ndemic. costs were decreased where possible starting in FY20121 and continue lo be very carefully managed on an ongoing basis beyond FY22123. As we continue to return lo a higher level of activity following the end of Covid restrictions, our fundraising and charitable activity expenditure increased on the prior year. Expenditure in FY22123 increased by 14D/o on FY21122. Our income frorn donations and legacies for FY22123 increased 4201¢ compared to FY21122. Our new 5 Year Strategy anticipates, and we have budgeted. for increased growth on our income into FY23124, as we oan continue lo increase our fundraising activity. Atthough at FY22f23 we rernain In a cash deficrt for the year. thi5 deficit is 24Q/ts lowei than FY21f22 and we anticipate a further redu￿￿ deficit in FV23f24. The Charty has sUffi￿ent reser¥e$ lo continue our objectives whilst we reduce our delicit and retum to a nel positive position. The level of unrestricted general funds has increased £147.466 since P121122, but decreased by £408,058 since the beginning of the prior 5 Year Strategy. For this reason, the Gharily has been tsking a more proactive approach to fundraising to ensure future income will rernain sufficient. will deliver a more balanced position versus expenditure and will rneet the Charity's growth objectives. At the end of FY22123 the Charity had total funds of £1,601,769. As outlined in the Charity's Reserves Policy below. the Charity has set aside £128,792 as Restricted Reserves and £1,164,775 as Designated Reserves leaving a balance of £308,202 as Unrestricted General Funds. At the end of FY22123 the Charity has the strength of assets required to successfully move forward and deliver the qU81ity and volurne of charitable benefit that the Charity and our donors wish for. Al the time that this report is prepared. we are ¢onfidenl th81 the Ch8rity will continue as a going and viable concem. 2.2 Reserves Policy The Charity's Reserves Policy continues to evolve in line with the needs of the Charity, and therefore the Trustees have reviewed and amended the Designated Working Life Reserve (see note 2.2.21 It is the policy ol the Charity to hold Restricted ReseNes and a range of Designated Reserves. The balance of funds not held in reserve are Unrestricted General Funds which are used to meet the day to day needs of operating the Charity. The Restricted Reserve holds restricted funds that are the balance of all the as yet unspent donations where the donor has specified the task to be achieved by their donation. The Designated Reserves hold unrestricted funds which the Trustees agree are required to ensure, for instance, the welfare of all the dogs in our care and as required to mitigate against identified financial risks such as the uncertainty of income that all charities face. 2.2.1 Restricted ReseNe The Restricted Reserve has increased from £109,096 as at the end of FY21122 to £128,792 at the end of FY22f23. When a donor specifies the task to be achieved by a donation and this is declared at the time the donation is made, then the donation is placed in the Restricted Reserve. In most cases the task identified takes several months to complete. When a donor sponsors a dog's name, it may take More than 2 years lor the sponsored dog to be placed and for the Charity to deem that the specified task has been achieved. Therefore, the Restricted Reserve is reduced by the spend made by the charity as it progresses the delivery of the specified tasks. In this way the value of the Restricted Reserve always reflects the spend yet to be made to achieve the outcomes specified by the donors. TOGETHE Docusign En¥ÈlopÈ ID". 8579F2FC-D5834269-8F42-7FC21097EA71 HOUND5 FOR HEROE5 TRUSTEES. REPORT (INCLUDING DIREcfoRS' REPORT) FOR THE YEAR ENDING 31 MARCH 2023 2.2.2 Designated Working Life ReseNe The Charity chooses to deliver Charitable Benefit by funding the ents're working life of the dog. The Working Lrfe Reserve is therefore required to ensure that this commitment may be delivered irrespective of the bngevity of the Charity. During the strategic review of the Charity. the Trustees agreed that the Working Life Reserve was adjusted lo sel aside funds to support 2 years of costs for all dogs in service. The current designation represents a change from the prior year, where monies were set aside to fund all future costs of dogs currently in training and in service, through to the dog's retirement. The Trustees have agreed that the cost per year per dog will be £5.000 For FY22123 this represents a requirernent for a Working Life Reserve of £300,CQO IFY21f22.. £783,839). Due lo the change in policy of this reserve this enabled the Charity to release £483.839 into unrestricted general funds. 2.2.3 Designated Operating Reserve The Charity survives through charitable donations and it is recognised that from time to time any of our sponsors may wish to redirect their sponsorship to other worthy causes. Replacement of a major sponsor may take more than years and so this reserve is prudent protection against the uncertainties of income that all charities face. The Trustees have derided lo rnainlain the Operating Reserve to allow the Charity lo function at its current rate of expenditure for 18 months. The projected indirect running costs ol the Charity for the 18 months from the start of FY23124 are £571,753. Direct costs are already covered within the Designated Working Lrfe Reserve. At the time that this report is being prepared, the Charity's income has still not retumed to p￿pa￿deMiC levels. Throughout the remainder of FY23124 the Trustees will remain watchful of the need to release part or all of this designated reseNe into unrestricted general funds should the need arise. 2.2.4 Designated Named Dog ReseNe The Charity has re￿IVed many donations for the Sponsorship of a dog with a specific name. This donation is inib.ally placed within the Restricted Reserve. The Restricted Reserve decreases 8S the Charity spend5 funds delivering the tasks specified by the donors. The Trustee5 have agreed to create the Designated Named Dog Reserve which identifies where a donation that was initially placed within the Restricted Reserve has been spent but the desired outcome has not yet been achieved. This Reserve is prudent pitstection against the identified risk that a dontsr may request the return of the donab"on, in lull or ill part, should the donor deem the desired outcotne has not beell achieved in a 5Lrficiently titnely manner. The Designated Named Dog Reserve closing balance for FY22123 is £258,022 IFY21122". £280,451) 2.2.5 Designated Property Maintenance ReSe￿e The Charity currently occupies rented premises. The use of the prernises causes weal and t88r and the Charity 15 responsible for costs of the repair and maintenance of the prernises. Property maintenance is conducted Ihioughout the year. The Property Maintenance Reserve represents rnonie5 set aside to covei these costs. The Pioperty Maintenance Reserve has been set at 235,0(K) and is reviewed 8nnu811y. 2.2.6 Designated In-memoriam Reserve The Charity is very grateful for donations it has received in-memoriam" Vvhen donors do not specify how their°in- merroriarn" donation should be used. the Charity nonetheless wishes to be able to dernonstrate how the donation has been used. During the ye81. the balance of the In-mernoiiurn fund was ulilized by the introduolion of Recce joining the tr81ning piogr8rnme and therefore the funds were Iransfetred lo the Named Dog Reserve. These funds will be held in the Named Dog Reserve until Recce 15 placed in 8 partnership. At the end of FY22123 th8 Designated In-tnemori8m Reserve is £NIL IFY21f22. £28.2351 TOGETHE Docusign En¥ÈlopÈ ID". 8579F2FC-D5834269-8F42-7FC21097EA71 HOUND5 FOR HEROE5 TRUSTEES. REPORT (INCLUDING DIREcfoRS' REPORT) FOR THE YEAR ENDING 31 MARCH 2023 2.3 Management of Funds The Trustees continue lo pay high regard to the guidance of the Charity Cornmission in shaping how the Charity delivers charitable benefit. The 5 Year Strategy. which commenced in FY17118, aC￿lerate3 the delivery of charitable benefit. In this way the Charity seeks lo utilise the Charity's funds in as timely a manner as our current premises permit. As anticipated in previous Trustees, reports the Charity's expenditure has risen. The forecast made 4 years ago was that our incorne would not increase over the short term and so a reduction in funds was forecast. This was the expectation of the 5 Ye8r Strategy and is in line with the expectation of the Chaiity Cornrni5SIOn. The management of the Charity's funds through the allocation of Restricted and Designated Reserves is a key aspect of the 5 Year Strategy and will continue to be a priority for the Trustees. 2.4 Support from Sponsors During the year the Charity has been extremely fortunate to receive support from a number of organisations including the following.. Allianz Insurance PLC, operating as Petplan Bet Fred- Gibralter BFBS- Big Salute Bloomberg Frazer Nash Consultancy Goodwood The Kennels Groundwork UK- Tesco Community Grant Scheme HMS Victory Hogsback Chapter UK Julia Hodgson Solicitors Kestrelway Gun Dogs Lord Barnby's Foundation National Lottery Community Fund Pets At Home Foundation Pavillion Row Ltd Portsmouth Water RAF Cranwell RAF High Vtycombe Rotary Club Fareham Reedyford Dog Training Club Seafarers Charrty UK Th8 Forces Trust The Girdlers Cotnpany Charitable Trust The Hurst School Viking Cruises UK Ltd 2.5 Pay Policy for Trustees and Stsff All Trustees give their time freely and no Trustee received remuneration from the Charity in the year. There is no intention for this to change. Details of Trustees, expenses and related party transactions are disclosed in Note 10 to the accounts The pay of staff is reviewed annually by the Trustees supported by the Charity Manager. Staff pay nomially is increased by a cost of living increment at the start of each financial year guided by CPI and RPI in February lor the prior year. Changes in salary to reflect changes in the level ol responsibility of staff members are also usually but not exdusively timed to come into effect at the start of the financial year. TOGETHE Docusign En¥ÈlopÈ ID". 8579F2FC-D5834269-8F42-7FC21097EA71 HOUND5 FOR HEROE5 TRUSTEES. REPORT (INCLUDING DIREcfoRS' REPORT) FOR THE YEAR ENDING 31 MARCH 2023 3. Risk Management The Trustees have a risk management strategy which comprises.. A review of the prinapal finanaal risks is held at the Finance Ctsmmittee meeting, and are reviewed on 8 regular basis.The Reserves Policy OLrtlined earlier reflects the perceived finanual risks and how the Charity has mitigated against those risks. The establishment and maintenance of a Risk Register which identifies all material risks to the operation of the Charity and the implementation. Plans are identified to reduce the likelihoodlimpact of the identified risks and the Trustees review the Risk Register quartedy. 4. Structure, Governance and Management The Hounds for Heroes Charity is a company limited by guarantee, without share capital. The Charity's governing document is its Articles of Association, dated 1° April 2015. The Trustees meet regularfy, currently monthly, lo review perforrnance, discuss current projects and how the Charity's long term aims and objectives are being met. Presently the Trustees cdleclively act as the board of directors responsible for strategy and the delivery of governance. In addition. the Trustees work through suiFcommiltees, comprising of a mix of Trustees, the Charity Manager and the relevant fvnctional managers for discrete areas of the Charity's operations. namely Finance,. Income Generation and Service Delivery (dog supportitraining & partnerships). Al the Trustees Board meetings. the Trustees may vole on any decisions that are required to be made for which a majority of Trustees must be in agreement. Should any decision rnaking be fundamental when not all Trustees are present, then relevant documents are circulated and all Trustees are required to vote. Day to day operational matters are the responsibility of the Ch8rity's Senior Management Tearn comprising the Charity Manager and the Senioi Managers. The Trustees iecognise that th8 Charity benefits from having a teatn of tIU5tees that have a bioad variety of skills 8nd experience that are allied to the operations of the Charity. A candidate Trustee is only appointed to the Board of Trustees after a screening and interview process by the Chair. Vice-chair and selected other Trustees and after satisfactory cornpletion ol appropriate searches by the Disclosing and Barring Service. New Trustees receive an induction in order lo brief them on their legal obligations under charity 8nd cornp8Ny law, the Charity Commission guidance on public benefit and inform them of the content of the Memorandum and Artides of Association, the cornrnittee and decision-making processes, the strategic plan and recent financial performance of the charity. They also meet key employees and other Trustees. Trustees are encouraged lo attend appropriate external training events where these will facilitate the undertaking of their role. In FY22f23, Chiistopher Beynon, Katrina Young and Claire Newman stood down as Trustees and we thank them for their service. We are activety reowiting additi￿81 Trustees in FY 2W24. 5. Auditors Fiander Tovell Limited were re-appointed as auditor to the Charity and will be deemed to be reappointed in accordan th the Companie5 Act 2006. 6. Statement of Trustees. Responsibilities The Trustees. who are also the directors of Hounds foi Heroes foi the purpose of Company law. are responsible for pieparing the TrLJStee5' Report and the account5 in accordan￿ wth applicable law and United Kingdom Accountin9 Standards (United Kingdom Generally Accepted Accounting practi￿). Company Law requires the Trustees to prepare accounts for each financial year which give a true and fair view of the state of affairs of the Hounds for Heroes and of the incorning resources and application of resources. induding the income and expenditure, ol the charitable company for that year. TOGETHE Docusign En¥ÈlopÈ ID". 8579F2FC-D5834269-8F42-7FC21097EA71 HOUND5 FOR HEROE5 TRUSTEES. REPORT (INCLUDING DIREcfoRS' REPORT) FOR THE YEAR ENDING 31 MARCH 2023 In preparing these accounts, the Trustees are required to.. Select sulta￿e accounting policie5 and then apply them consistently., Observe the methods and prinaple5 In the Charities SORP", Make judgements and estimates that are ieasonable and prudent.. and Prepare the accounts on the going concern basis unless it is inappropriate to presume that the Hounds for Heroes will continue in operation, and State whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the accounts The Tiustees are responsible for keeping adequate accounting records that disdose with reasonable accuracy at any time the financial position of Hounds for Heroes and enable them to ensure that the accounts comply with the Companies Aci 2006. They are also responsible lor safeguarding the assets ol Hounds for Heroes and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Trustees a￿ responsible for the maintenance and integrity of the corporate and financial information induded on the Charity's website. Legislation in the United Kingdom goveming the preparation and dissemination ol financial statements may differ from legislation in other jurisdictions. 7. Disclosure of information to auditor Each of the Trustees has confimed that there is no irfomiation of which they are aware which is relevant to the audrt, but of which the auditor is unaware. They have further confirmed that they have taken appropriate steps to identify such relevant information and to establish that the auditor is aware of such information. In preparing this report, the directors have taken advantage of the small companies exernptions provided by section 415A of the Companies Act 2006. The Trustees. report was approved by the Board of Trustees. 11/10/2023 1 08:21 BST Amanda Ferguson Dated TOGETHE Docusign En¥ÈlopÈ ID". 857gF2Fc-D58￿26s-8F42-7FC2los7EA7l HOUNDS FOR HEROES INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF HOUNDS FOR HEROES Oplnlon We have audited the financial statements of Hounds for Heroes {the 'charity'l for the year ended 31 March 2023 which comprise the slalement of financial aclivilies, the balance sheet, the statement of cash flcms and notes lo the financial stslemenls, including significant accounting policies. The finanaal reporting framework that has been applied in their preparation Is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). In our opinion, the financial slatemenls". give a true and fair view of the state of the ¢harilable company's affairs as al 31 March 2023 and of its incoming resou￿$ and applicab'on of resources. including its income and expenditure, for the year then ended., have been properly prepared in accordance wf(h United Kingdom Generally AC￿pIed Aecounling Praclit*', and have been prepared in accordance with the requirements of the Companies Act 2006. Basls for oplnlon We conducted Dur audit in accordance with International Standards on Auditing IUKI IISAS IUKII and applicable law. Our responsibilities under those standards are further described In the Audilorts ￿SpOnsibl1rt1es for the audit of the financial slalements section of our report. We are Independent of the charity in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC'S Ethical Stsndard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate lo provide a basis for our opinion. Conclusions relating to going concern In auditing the financial stalemenls, we have concluded that the Trustees, use of the going COn￿M basis of accounting in the preparation of the financial staternenls is appropriate. Based on the work we have performed, we have not identified any material uncertainties relating lo events or conditions that, Individually or collectively, may ca51 significant doubl on the charity's ability lo continue as a going concern lor a period of at least twelve months from when the financial slalements are 8Uthorised for issue. Our responsibilities and the responsibilities of the Trustees ￿rith respect to going concern are described in the relevant sections of this report. Other Infomiatlon The other information comprises the information induded in the annual report other than the finamial statements and our auditor's report thereon. The Trustees are responsible for the other infomiation contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly staled in our report, we do not express any form of assurance conclusion Ihereon. Our responsibility is lo read the other information and, in doing so, consider whether the other informth.on is materially inconsislenl wth the financial slalements or our knowledge obtsined in the course of the audit, or otherwise appears to be materially misstated. If we idenb'fy such material in¢onsislencies or apparent material misslalemenls, we are required to determine whether this gives rise to a material misslatemenl in the financial statements themselves. If, based on the work we have performed, we condude that there is a material misststement of this other information, we are required to report that fact. We have nothing to report in this regard. Opinions on other matters prescribed by the Companies Act 2006 In our opinion, based on the work undertaken in the course of our audit.. the information given in the Trustees. report for the financial year for which the financial statements are prepared. which includes the directors. report prepared for the purposes of company law, is consistent with the financial statements., and the directors, ￿port included within the Trustees, report has been p￿pared in accordance with applicable legal requirements. Docusign En¥ÈlopÈ ID". 857gF2Fc-D58￿26s-8F42-7FC2los7EA7l HOUNDS FOR HEROES INDEPENDENT AUDITOR'S REPORT (CONTINUED) TO THE MEMBERS OF HOUNDS FOR HEROES Matters on whl¢h we are requlred to report by exceptlon In the light of the knowledge and understanding of the charity and its environment obtained in the course of the audit, we have not identified material misstatements in the directors, report included wthin the Trustees. report. We have nothing lo report in respect of the following mallers in relab'on lo which the Companies Act 2006 requires us to report lo you if, in our opinion.. adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us", or the financial statements are not in agreement with the accounting records and returns., or rtain disdosures of Iruslees, remuneration specified by law are not made., or we have not received all the information and explanations we require for our audit., or the Trustees were not entitled to prepare the financial statements in accordance with the small companies regime and lake advantage of the small companies, exempts'ons in preparing the Trustees, report and from the requirement lo prepare a strategic report. Responsibilities of Trustees As explained more fully in the statement of Trustees, responsibilities, the Trustees, who are also the directors of the charity for the purpose of company law, 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 Trustees determine is necessary lo enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the finanaal statements. the Trustees are responsible for assessing the charity'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 Trustees either intend to liquidate the charitable Company or lo cease operations, or have no realistic altemalive but to do so. Auditorfs responsibilities for the audit of the financial statements Our objectives are lo obtain reasonable assurance about whelhei the financial slalements as a wholè are free from material misslatemenl, whether due lo fraud or error. and lo issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance bul is not a guarantee that an audit conducted in accordance with ISAS IUKI will always delect a material misslalement 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. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below. Extent to whlch the audlt was consldgred capabl& of dgtectlng Irregularltlgs, Includlng fraud Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows.. the engagement partner ensured that the engagement team collectively had the appropriate Competen￿, Capabilities and skills to identify or recognise non-¢ompliance with applicable laws and regulations. • we identified the laws and regulations applicable to the company through discussions with directors and other management, and from Dur commercial knowledge and experience. we focused on specific laws and regulations which we considered may have a direct material effect on the financi81 slalements or the operations of the company, including the Companies Act 2006, laxalion legislation, data protection, employment, environmental and health and safety legislation. we assessed the exlenl of compliance wth the laws and regulations identified above through making enquiries of management. We assessed the susceplibilily of the company's financial slalements lo material misslatemenl, induding obtaining an understsnding of how fraud might occur, by.. making enquiries of management as lo where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud. considering the intemal controls in place to mitigate risks of fraud and non-complianee wlh laws and regulations. 10- Docusign En¥ÈlopÈ ID". 857gF2Fc-D58￿26s-8F42-7FC2los7EA7l HOUNDS FOR HEROES INDEPENDENT AUDITOR'S REPORT (CONTINUED) TO THE MEMBERS OF HOUNDS FOR HEROES Audlt response to rlsks Identlfled To address Ihe risk of fraud through management bias and override of controls, we.. perfomed analytical procedures lo identify any unusual or unexpected relationships. lesled journal entries lo identify unusual Iransaclions. lesled a sample of BACS payments to identify payments being made to unexpected bank accounts. perfomied transactional testing on payroll costs in respect of those employees with responsibility or authority in connection with the payroll function. assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potents.al bias. investigated the rationale behind signrficant or unusual transactions. In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, bul were not limited to.. agreeing financial slalemenl dis¢losures to underfying supporting documenlalion. enquiring of management as to actual and potential litigation and daims. reading minutes of those charged with governance There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of n0￿coMplianCe. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal corresponden￿, if any. Material misslalements that arise due to fraud can be harder lo detect than those that arise from error as they may involve deliberate concealment or collusion. A further description of our responsibilities is available on the Financial Reporting Council's website al.. https.'Il www.frc.org.LJklaLJditorsresponsibilities. This description forms part of our auditorfs report. Use of our report This report is made solely lo the charitsble company's members, as a body, in accordance wlh Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might stsle lo the charilatle company's members those matters we are required to slate lo them in an auditorfs report and for no other purpose. To the fullest extent permitted by law, we do not a¢cepl or assume responsibility to anyone other than the ¢harilable company and the charitable company's members as a body, for our audit work, for this report, or for the opinions we have formed. H￿6 Mark Gregory ACA Isenior Statutory Auditor) for and on behalf of Flander Tovell Llmlted 11/10/2023 | 15:40 BST Chartered Accountants ststutory Auditor Stag Gates House 63164 The Avenue Southampton Hampshire S017 1XS Docusign En¥ÈlopÈ ID". 857gF2Fc-D58￿26s-8F42-7FC2los7EA7l HOUNDS FOR HEROES STATEMENT OF FINANCIAL ACTIVITIES INCLUDING INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31 MARCH 2023 Unrestrlcted Unrestrlcted Restrfcted funds funds funds general designated Total 2023 Total 2022 Note$ ncome and endowments Donations and legacies Other trading ath'vities Investments Other income 196,388 3,557 30,025 6,150 89,428 291,966 3,557 30,025 168,680 4,285 8,910 1,686 Totsl Income 229,970 6,150 89,428 325,548 183,561 Raising funds Charitable activities 165,123 365,115 165.123 365,115 128,654 325,688 Totsl re$ource$ &xpendgd 530,238 530.238 454,342 Net loutgolnglllncomlng resources before transfers 1300,2681 6,150 89,428 1204,6901 1270,7811 Gross transfers between funds 447,734 1378,0021 169,7321 Net incomellexpenditurel for the yearl Net mov&ment In funds 147,466 {371,8521 19,696 1204,6901 1270,7811 Fund balances al 1 April 2022 160,736 1,536,627 109,096 1,806,459 2,077,240 Fund balances at 31 March 2023 308,202 1,164,775 128,792 1,601,769 1,806,459 The statement of financial a¢tivilies indudes all gains and losses recognised in the year. All income and expenditure derive from continuing aclivilies. The stslemenl of financial activities also complies with the requirements for an income and expendture account under the Companies Act 2006. 12- Docusign En¥ÈlopÈ ID". 857gF2Fc-D58￿26s-8F42-7FC2los7EA7l HOUNDS FOR HEROES BALANCE SHEET AS AT 31 MARCH 2023 2023 2022 Notss Flxgd assets Intangible assets Tangible assets 16,150 7,543 6,392 11,618 14 23,693 18,010 Current assets Stocks Debtors Cash at bank and in hand 5,282 101.861 1,507,686 16,735 60,208 1,740,658 16 1,614,829 1,817,599 Creditors- amounts falling due within one year 17 136,7531 129,1501 Net current assets 1,578,076 1,788,449 Total assets less current liabilities 1,601,769 1,806,459 Income funds Reslri¢ted ftjnds Unrestricted funds Designated funds General unrestricted funds 19 128.792 109,096 20 1,164,775 308,202 1,536,627 160,736 1,472,977 1.697,363 1,601,769 1,806,459 These financial slalements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime. 11110/2023 1 09:21 BST The financial stslemenls were approved by the Trustees on IlehL Allen Parton Trustoa Company Reglstratlon No. 07130031 13- Docusign En¥ÈlopÈ ID". 857gF2Fc-D58￿26s-8F42-7FC2los7EA7l HOUNDS FOR HEROES STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 MARCH 2023 2023 2022 Notss Cash flows from opgratlng a￿l¥It1&S Cash absorbed by operations 24 1244,4281 1183,383) Investing activities Purchase of intangible assets Purchase of tangible fixed assets Interest received 116,1501 12,4191 30,025 11.4981 8,910 Net cash gon9rat9d from Invgstlng activities 11,456 7,412 Net cash used in financing activities Net decrease In cash and cash equlvalents 1232,9721 1175,9711 Cash and cash equivalents at beginning of year 1,740,658 1,916,629 Cash and cash equivalents at end of year 1,507,686 1,740,658 Relating to.. Cash at bank and in hand 1,507,686 1,740,658 14- Docusign En¥ÈlopÈ ID". 857gF2Fc-D58￿26s-8F42-7FC2los7EA7l HOUNDS FOR HEROES NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2023 Accountlng pollcles Charity infomiation Hounds for Heroes is a private charitable Company limited by guarantee in￿rpOrated in England and Wales, and registered with the Charity Commission in England and Vvales, and Scotland. The registered office is Unil 2B, Rookery Farm Buildings, Ramsdean, Petersfield, Hampshire, GU32 1 RU. 1.1 A¢counllng ¢onventlon The financial statements have been prepared In accordance wlh the charity's governing document, the Companies Act 2006 and 'Accounting and Reporting by Charities.. Statement of Recommended Practice applicable lo chaiilies preparing their accounts In accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland IFRS 1021 leffeclive 1 January 20191" The charity is a Public Benefit Entity as defined by FRS 102. The financial stslemenls are prepared in sleding, which is the functional currency of the charity. Monetary amounts in these financial stslemenls are rounded lo the nearest £. The financial slalements have been prepa￿d under the historical cost convention. The principal accounting policies adopted are sel out below. 1.2 Going concern At the time of approving the financial statements, the Trustees have a reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future. Thus the Trustees continue to adopt the going concern basis of accounting in preparing the financial statements. 1.3 Charitable funds Unreslri¢led funds are available for use at the discretion of the Trustees in furtherance of their charitable objectives unless the fLJnds have been designated for other purposes. Such ftjnds may be held in order lo finance both working capital and capital investment. Designated fund5 comprise funds which have been sel aside at the discretion of the Trustees for SPEcific putpose5. The purposes and uses of the designated funds are Set out In the notes to the financial slalement5. Restricted funds are subject to specifi¢ conditions by donors as to how they may be used. The purwses and uses of the restricted funds are set out in the notes to the financial statements. 1.4 Income Cash donations are recognised on receipt. Other donations are recognised once the charity has been notified of the donation, unless performance condvcions require deferral of the amount. Income lax recoverable in relation to donations received under GiftAid or deeds of covenant is recognised at the time of the donation. Legacies are recognised on re￿Ipt or otherwse if the charity has been notified of an Impending distribution, the amount is kno4￿, and receipt is expected. If the amount is not known, the legacy is Irealed as a conlingenl asset. Government grants relate lo claims made under the coronavirus job retention scheme and are recognised in the stslemenl of financial activities in the same period as the costs to which they relate. 15- Docusign En¥ÈlopÈ ID". 857gF2Fc-D58￿26s-8F42-7FC2los7EA7l HOUNDS FOR HEROES NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2023 A¢¢ounllng poll¢lg$ Icontlnugdl Induded within other trading activities, is income from the sale of merchandise. Income is re￿nised on the exchange of goods for cash. Bank interest is accounted for when receivable. Included within charitable activities income is donations received in retum for Trustees or trainers to speak al events. These speakers, fees are considered lo be voluntary and are accounted for on receipt, which is usually the dale the event lakes place. 1.5 Expenditure Expenditure is recognised once there is a legal or constructive obligats.on to make a payment to a third party, il is probable that settlement wll be required and the amount of the obligation can be measured ieliably. Expenditure is classified under the following activity headings.. Costs of raising funds comprise the costs of staging fundraising events, advertising and marketing and the assoaated support costs. Expenditure on charitable activities includes the costs of purchasing puppies, their associated costs and staff costs in relation to training the puppies. Other expenditure relating to the running of the charity Is allocated to the charity's sole charitable activity. Govemance costs include expenditure in relation lo conslilulional and slalulory obligations including audit and statutory accounts preparation, and any reimbursable expenses of the Trustees. Irrecoverable VAT is charged as a cost against the activity for which the expenditure was incurred. SuptK)rt costs a￿ those functions that assist the work of the charity but do not directly undertake charitable adivilies. Support costs include back office costs, finance, personnel and goveman¢e costs which support the Charity's activities. These costs have been allocated between cost of raising funds and expenditure on charitsble a¢livilies. The basis on which support costs have been allocated are sel out in note 9. 1.6 Intsnglble flxed assets other than goodwlll Intangible assets acquired separately from a business are recognised at cost and are subsequently measured al cost less accumulated amortisation and accumulated impaimient losses. Amortisation is recognised so as lo write off the Cost or valuation of assets less their residual values over their useful lives on the following bases.. So￿are 20% straight line 1.7 Tangible fixed assets Tangible fixed assets are initially measured al cost and subsequently measured al cost or valuation. net of depreciation and any impaimient losses. Depreaalion is recognised so as lo write off the cost or valuation of assets less their residual values over their useful lives on the following bases.. Equipment Fixtures and fittings Motor vehicles 200/0 slraighl line 20Qh straight line 200A slraighl line The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset. and is recognised in the statement of financial activities. 16- Docusign En¥ÈlopÈ ID". 857gF2Fc-D58￿26s-8F42-7FC2los7EA7l HOUNDS FOR HEROES NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2023 A¢¢ounllng poll¢lg$ Icontlnugdl 1.8 Impalrment of flxed a$$ets Al each reporting end dale, the charity reviews the carying amounts of ils tangible and Intangible assets lo determine whether there is any indication that those assets have suffered an irnpairmenl loss. If any such indication exist5, the recoverable arnounl of the asset 15 eslimaled in order lo determine the extent of the impaiment loss lif anyl. 1.9 Stocks Stock is valued al the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. Nel realisable value is the estimated selling price less all estimated wsts of completion and costs to be incurred in marketing. selling and distribution. 1.10 Cash and cash equlvalents Cash and cash equivalents indude cash in hand, deposits held at call with banks, other short-lerm liquid investments with original maturities of three months or less, and bank overdrafts. 1.11 Financial instruments The charty has elected to apply the provisions of Section 11 'Basic Financial Instruments, and Section 12 'Olher Financial Instruments Issues, of FRS 102 to all of ils financial inslrumenls. Financial instruments are recognised in the charity's balance sheet when the charity becomes paty lo the contractual provisions of the inslrumenl. Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right lo sel off the recognised amounts and there is an intention lo sellle on a net basis or lo realise the asset and setue the liability simultaneously. Basic financial assets Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried al amortised cost using the effective interest method unless the arrangement conslilules a financing Iransaclion, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised. Impairment of financial assgts Financial assets, other than those held at fair value through income and expenditure, are assessed for indicators of Impairment 81 each reporting dale. Financial assets are impaired where there is objeth.ve evidence that, as a ￿sU11 of one or more events that occurrèd after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired. the impairment loss is the difference between the Carrying amount and the present value of the estimated cash flows discounted at the asset's original effective interest rate. The impairment loss is recognised in net incomellexpenditurel for the year. If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the Carrying amount would have been, had the impaimienl not previously been recognised. The impaimient reversal is recognised in net incomellexpendilurel for the year. 17- Docusign En¥ÈlopÈ ID". 857gF2Fc-D58￿26s-8F42-7FC2los7EA7l HOUNDS FOR HEROES NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2023 A¢¢ounllng poll¢lg$ Icontlnugdl Derècognition of financial assets Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the charity transfers the financial asset and subslanlially 811 the risks and rewards of ownership to another enlily, or rf some significant risks and rewards of ownèrship a￿ retained bul control of the asset has transferred lo another party that is able lo sell the asset in its entirely lo an unrelated third paty. Basic financial liabilities Basic financial liabilities. including creditors and bank loans are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future re￿iptS discounted al a market rale of interest. Financial liabilities dassified as payable thin one year are not amortised. Trade creditors are obligations lo pay for goods or services that have been acquired in the ordinary course of operations from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non