Charity reglstratlon number 1134359 (England and Wales Charity reglstratlon number SC043751 (Scotland) Company reglstratlon number 071300311England and Wales) HOUNDS FOR HEROES ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024 TOGETHER WE CAN HOUNDS FOR HEROES LEGALAND ADMINISTRATIVE INFORMATION Trusteos A Parton A Ferguson P J Grinsted D J Connor J Noman JHForth P A Kelley M J Perkins H Slater AFSmith (Appointed 1 Odober 2023) (Appointed 30 January 2024) (Appointed 30 January 2024) (Appointed 30 January 2024) (Appoinled 30 January 2024) Chair A Ferguson Wice4halr AParton Charity Manager G Grant Charfty number IEngland and Wale5) 1134359 harity number (Scolland) SC043751 Company number 07130031 Registered office Unit 2B Rookery Fa￿ Buildings Ramsdean Pete￿ffieId Hampshire GU32 1 RU Auditor Moore (South) LLP Cty Gates 2 - 4 Southgate Chichester Wesl Sussex P019 8DJ Bankers Uoyds Bank plc 5 The Square Petersfield Hampshire GU32 3HL HOUNDS FOR HEROES CONTENTS Page Trustees, report Independent authlorfs report 9-12 Slatement of financial activiiies 13 Balance sheet 14 SLgtement of cash flows 15 Notes to the finanaal statements 16-32 HOUNDS FOR HEROES TRUSTEES, REPORT (INCLUDING DIRECTORS. REPORT) FOR THE YEAR ENDED 31 MARCH 2024 The trustees present their annual report and finanaal statements for the year ended 31 March 2024. The financial stalements have been prepared in ac¢ordan¢e viith the a￿Unting policies set OLrt in note 1 to the financial statements and comply with the charivs Arbdes of Associ81ion. the Companies Act 2006, the Charities and Trustee Investment [S￿lIand} Act 2005, the Charities Armunts (Scolland) Regulalions 20(E (as am8nd8d) and "Accounting and Reporting by Charities: Ststement of Recommended Practi￿ applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019). 1 Objectlves and actlvEtles 1.1 Our Objecttv8s Our prin￿paI objective is to enhance the qualty of life of HM Amed Forces and Emergency Serwces personnel who have become physically disabled through injury or illness at any time - Servi￿ or non-service attributable. The Charity's Memorandum of Articles of Assoaation allows a broad range of mechanisms by whith the Chaiity may achieve this objective. however. the Chaiity only came into existence because of a remarkable life changing partnership that fonned bets¥een a dog and an injured serviceman. Therefore, it remains the Char7tls purpose to deliver our charitable benefit primarity through th8 provision of specially trained Assistan￿ Dogs. This is the raison d'etre of the Charity. The Trustees Ixjnfirm they have had regard to the Charity Commission's guidance on publlc benefft. The Charity can fund the whole working lrfe of our dogs up lo the dts3's retirem6nl. although Gontribulions lo costs from Partners who are in a financial position to do so. are always welcome. In this way the Chartty can best safeguard the welfare of all our dogs throughout their working lives as well as relieve our Partners from the financial Gommitment of being partnered with an assistance dog. 1.2 Our 5 Year Strategy (FY22f23- FY26127) The Chartty updated its 5 Year Strategic Plan for the start of fiscal year FY22123. so this report covers Yr 2 of that strategy. The strategy aims to accel8rat8 the delivery of charitable benefft. increasing the number of Partners it is able to support, balan￿d with our abilty to generate income to fund this rate of delivery. The Strategy continues development of the Charity, building on our solid foundations. to ensure it can meet the vision whilst maintaining the quality of output and the chatader of the Charity that have become its hallmat*s. Key elements of the 5 Year Strategy are as follows: The strategic target of acceleration of delsvery of Charitable benefit is quantified by steadily increasing the number of puppies acquired each year to commence training from 5 puppies in Yr 1 to 24 puppies in the final year of the strategic plan and for the number of established new p2rtnerships therefore to grow by an 8verage of 8 new partnerships per year over the 5 year strategy period. The acceleration cf delivery of charitable benefit requires increased expenditure which will be met by a growth in income generated by a more significant fundraising activity plan, SUPPDrted by expert resource as required and increased communi¢￿tIon to key aUdien￿S. The strat8gic plan assumes Ihat. as it will take time for the fvndraising momentum lo build, any cash deficit resulting from the inbalance be￿een In￿Me and expendtture in the )Iist Iwo years of the plan will be met by the use of unrestricted general funds, with the target that the Charity will reach a breakeven position during FY24125. It is import8nt thal awareness of the support the Charity provides reaches those servicelex servi personnel who could potentialty benefft from a partnership with an assistance dog. It is therefore a key component of the Strategy that the Charity ￿ntinUeS to build its relationships with other military and emergen￿ servirE support organisation5 to fa(ilitale (xlmmunration and also offer mutual support to beneficiaries. The standards to whith Hounds for Heroes operates are comparable to. and guided by, those deterniined by Assistance Dogs Intemational {ADI) and are embedded as part of our heritage as what the Charity strives to maintaln for our Partners. HOUNDS *- FOR HEROES HOUNDS FOR HEROES TRUSTEES. REPORT (INCLUDING DIRECTORS. REPORT) (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2024 The governan￿ of Ihe Charity shall be delivered by a le￿n of Twslees who are unpaid volunteers. The ownership of the Charity's Strategic Plan will remain with the Trustees. and during the strat8gy period strategic decisions will be made by the Truslees. wth the involvement of the Charity Manager. The day-t day operational management will be conducted by the Charity's Senior Management Team. 1.3 OurAchievements and Perforniance Due to the ongoing difficuli UK economic siivatron. it has remained a challenging environment for charities to Operate within. Despite that. Hounds for Heroes has made encouraging steps towards achieving it's strategic targets for this fiscal and whilst not all have been achieved, we have seen progress in virtiually all areas. We aimed to deliver 7 advanced dogs into partnership5 in FY23124 and by the end of the fiscal had 4 dogs swJned over into partnerships. but with anolher 3 potential partnetships making good progress and likely to b8 signed off in the earty part of the current fiscal. l( is ahvays difficult to predict how long it will take for a potential partnership to progress from the initial matching process through to the signing of the full partnership agreemenl as the devek>prnenl of the relalionship belween each dog and their Partner is individual to that partnership. Two of the part￿[shIpS in FY23124 were for successor dogs for existing PartnetB whose original dogs had reai*ed the end of their working lives. It was pleasing to be able to continue to support these Partners and know the value they derive from ha￿ing an assistance dog aid them in their everyday Ir¥es. We acquired 8 puppies in FY23f24. 2 les5 than IYJT taTyet but slill 60% more than in the prior year. W& had to halt puppy ac4uisttion towards the end of the ￿SCal due lo a redudion in the availabdity of volunteer puppy parents. The Charity is ￿lIant on having a pool of puppy parents who do an amazing job of supporting 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 recnjilment drives to attract new puppy parents and foster parents as li is a ¢riiical factor in our ability to expand our intake of puppies and therefore increase delivery of charitsble benefit as planned. Recruitsnenl. and then retention, af volunteer puppy parents has become inlxeasingly diffi¢ull over Ihe past few years and is believed lo be due to a combination of people needing to work morellonger due to ewnomic circumstsnces and also relired people wanting lo have the flexibility to travevsupporl famity tnembets and are therefore wary to take on the commtlmenl of a young puppy. The Charity, therefore. needs to expand its cecruitment areas and as a first slep in September 2023 opened a puppy training hub in Portsmouth to exiend its puppy parent catchmenl area. We continue to use our training ￿ntre throughout the year foi both ￿l￿a￿l￿d dog training and Ihe running of puppy classes. as well as proifjding ongoing support to the puppy parents. with our dog trainers conducting a level of general training in exlemal environments arKI prowding one-t¢>one support as required. Similarly, our regular schedule of aftercare vt5its with Partners and their dogs has been deliveted with the dogs and their Partners always pleased to see our staff in person in their home environment. Our application process remains open throughout the year. We were thrilled in MaW23 to be able lo hold our fitst PaTlnership Celebration event Sin￿ 2019, Whe￿ we hosted six Partners, their dogs and the wonderful puppy parents and traineTS and celebrated the successful establishment of their partnerships. The Charity does not re￿1ve any govemment funding and thèrefore is lotally dependent upon the income it can raise to fund the development and delivery of its charitable benefft. As stated eariter. we intend, as set out in the 5 Year Strategic Plan. to in¢rease the numbei of dogs in training and in partnerships. This will require an annual increase in expendiiure and Iherefore il is critical that the Charity grows its income significanlly over the coming years. Hawng invested in incieased Fundraising resource at the beginning of the Strategic Plan period. il ffts really pleasing to see th8 positive impact the small team ¢ontinue to make through their initiatives and despite the thallenging economic environmenL our total income increased in FY23124 by 59%1 We are very grateful for the generous granls and donations made by a broad mix of insb'tutions, corporate sponsors and individ￿alS who have undertaken a number of challenges and activiti8s to generate our much needed fund& HOUNDS ¢-.- FOR HEROES HOUNDS FOR HEROES TRUSTEES, REPORT (INCLUDING DIRECTORS, REPORT) (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2024 Expendilure intxeased by 12% Compared lo FY22123, as anti(ypated, due to the resources required to deliver and support an increase in the number of dogs in training and the number of active partnerships. However, costs are very lighlly managed and the operational team continue to develop our ways of working to be able to operat& as efficiently as possible. Increasing awareness of the Charity. who and how it helps, and how it Gan be supported, is one of our key priorities in order to facrlitate the desired growth in the number of partnerships and in income generation. The Charity has an ongoing, and constantly evolving, communications programme tsrgeled at reaching. 1.4 Our Focus for the Coming Year The Chaiity's overarching objective for the cx>ming year is to ￿ntinUe to develop the Charity to deliver the key elements of our 5 Year Strategic Plan The areas of focus for FY24f25 rdentified by lh8 Trustees are: To continue to deliver high qualty support and after-care to our existing Partners and to develop new partnerships. The number of dogs in active partnerships at the end of FY23f24 was 18 and the targel is lo establish a further 7 new partnerships by the dose of the fiscal and it is pleasing to report that to date 4 new partnerships have been athieved Taking into account the desire to have an ongoiw, steadily increasing, pipeline of dogs to take through the various stages of trainin9 and pla￿ment and ensure we can deliver the planned new partnerships in eath year, we aimed to acquire 14 puppies in FY24f25. As we cuffently stand, due to the shortage of available puppy parents. we have had to slow down our acquisilion of puppies and so far, we have welcomed 3 new puppies to the Hounds for Heroes team. We are actively working on recnjitinent campaigns for both our core and Portsmouth catchment areas as well as the development of another puppy training hub in a different area which will hopefully launch in the autumn. We would therefore hope thal our acquisition of puppies will pick up in the second half of Ihis fiscal. In ordei to fund an increase in the delivery of charitable beneffit whilst also redueAng our operatng daficit, continued growth in income generats'on is vital. We will rJ)nlinue to develop both our breadth and depth of income streams which we have detemined requi￿$ a further investment in additional fundraising resource this fiscal. This will also be supported by our marketing and communications acttvity lo raise awareness of the work of the Charity, increase supporter engagement and grow our supporter ba58. The Board, whilst it set an aspiration in the Strategic Plan for the Charity to break even in FY24f25. has decided to dalay achievemenl of that target in order to focus on development and delivery of increased charitable benefit. Our financial position is sufficienlly sound to suppcKt Ihis decAsion but it IS POS5ible therefore that the Charity may not achieve a breakeven position in this coming year. To increase awareness of who the Charity helps and the support it (xn provide. the Charity will build its communication and relationships wtth relevant organisalions in order to reach more potential applicants The Charity will continue to manage expenditure L2refully, keeping a tight control on costs and seeking efficiencies to offsel cost inflation where possible. The Board of Trustees will regularly review and monitor progress of the initiatives to be prosecuted to d@IN8r Ihe objec*iv8s of the 5 Y8ar Strategy. 2 Flnancial revlew 2.1 OveNiew The financia] perfornian￿ of Hounds for Heroes for the year ended 31 March 2024 reflects a period of significant activity and development, despite e¢onomi¢ thallenges. The Charity continues to be committed to training and providing assistano dogs for injured and disabled men and women of both the UK Arnied Forces and Emergency Services. For FY23124, the trustees set ambtknous budget goals to increase our income through the Charity's growth. This targeted expansion was expected lo result in higher expenditure5 for fvndraising and charitable activrties, but we aimed to redu￿ our annual deficit compared lo Ihe previous year. We Successful￿ met thi5 goal. HOUNDS *"- FOR HEROES HOUNDS FOR HEROES TRUSTEES, REPORT (INCLUDING DIRECTORS. REPORT) (coKfiNUED) FOR THE YEAR ENDED 31 MARCH 2024 EXpendrtu￿ in FY23124 rose by 12% Gompared to FY2ZP23. Meanwhile. ftom donations and legacies surged by 59Y.. Although we ended FY23124 with a cash deficit. il was 65¥0 lower than in FY22123. aligning with the Trustees. projections as we work towards a POSTlrve n81 posi￿n. The Charity has ample reserves to sustain our objectives during this period of growth. At the end of FY23124 the Charity had totsl funds of £1,522.328. As oullined in the Charity's Reserve5 Policy below, the Charity has set aside £120.518 as Restricted Reserve5 and £1.231,488 as Designaled Re5eTVfjS leaving a balance of £170,322 as Unrestricted General Funds. As of FY23124. the Charity possesses the ne￿$sary ass￿ strength to move foTward effeGtively and delwer the quality and volume of charitable benefits that both the Charity and our donors aspi￿ to achieve. At Ihe time of this report we remain confidenl in the Charitys abl￿ to contiwe as a wiable and (￿gOIng ￿nCem. Hounds for Heroes has demonstrated resllie￿e and finarKial pT￿jence in 2024. sucossfully increasing its income and managing its expendilures to conlinue supporting ils Nilal mission. The trustees remain dedicaled to ensuring the Charitys financial health and suslainabilty. all￿1ng il to provide life-changing assistance dogs to those in need. 2.2 ReseNes Policy The Charity fflaintains a policy of holding both Restricled and Designated ReseTves. The remaining funds, not allocated to these ieserv85. are calegotized as Unreslricted General Funds. which support the day-towday operations of the Charity. The Restricted Resepde holds restricted funds that are the balan￿ of all the as yet unspent donations where the donor has specified the ts5k to be achieved by their donation. The Designated Resetves hold unrestricted funds which the Trustees agree are required to ensure, foi 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 fa￿. 2.2.1 Restricted Reserve The Restricted Reserve has decreased from £128.792 as a( the end of FY22123 to £120,518 at the end of FY23124 (note 19). When a donor specifies the task to be achieved by a donation and this is dedared at th8 time the donation is made. then the donation is placed in Ihe Restrided Reserve. In most cases the task identif18d takes several months to rnmplete. When a donor sponsors a dog's name. it may take more Ihan 2 years for the sponsored dcw to be placed and for Ihe Charity to deem thal the speofied task has been achieved. Thetefore, the Restrtcied ResetV8 is reduced by the spend made by the Charity as it progresses the delivery of the specrfied tasks. In this way the value of the Restricted Reserve always releds the spend yet to be made to a(*iieve the outcomes specifjed by the donors. 2.2.2 DesigtTrated Working Life ReSe￿e The Chawity chooses to deliver charitable benefft ty funding the enttre wothing lrfe of Ihe dog. The Working Lrfe Reserve is therefore required lo ensure that (his commitment may be delrvered itrespective of the longevity of the Charity. The WorkirKJ Lrfe Resepde reflects funds to support 2 years of costs for al dogs in seNice. The Trustees have agreed Ihat the cost per year per dog wll be £5.000 (FY22123 £5.000}. The w0￿7ng Life Reserve at FY23124 is £360,000 (FY 22123 £300.000). 2.2.3 De5ignaled Operating ReseNe The Charily SU￿1veS through charitable donations and il is recognised Ihat from time to time any of our sponsors may wish to redireci their sponsorship to other worthy causes. Replacement of a major sponsor may lake more than Iwo yeaTS and 50 this reserve is prudent prolection against Ihe Un￿rtaInlieS of income that all charities face. The Truslees have decided to mainlain the Opetaling Reserve to allow the Chatity to tunction al its (yjtrent rate of expenditure for 18 months. HOUNDS ¢-. FOR HEROES HOUNDS FOR HEROES TRUSTEES. REPORT (INCLUDING DIRECTORS, REPORT) (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2024 The projecled indirect running costs of the Charity foi the 18 rnonths frorn the start of FY24f25 are £598.227. Direct costs are already covered within the Designated lvo￿1ng Life Res8fVe. The Trustees remain mindfvl of the need to release part or al of this designated reseprfe into unrestricted general funds should the need arise. 2.2.4 Designated Named Dog Reserve The Charity has received many donations for the sponsorship of a dog wtth a spectfi¢ name. This donation is initially placed within the Restricted Reserve. The Restricted Reserve decreases as the Chartty spends funds delivering Ihe task5 specified by the donoTS. The Truslees have agreed to create the Designated Named Dog Reserve which id8titifies where a donation that was initially placed wrthin the Restricted Reserve has been spent but the desired outcome has not yet been achiev8d. This Reserve is prudent protedion against the identtfied risk that a donor may quest the retum of the donallon, In full or in part. should the donor deem the desired outcome has not been achieved in a sufficienlly timely manner. The Designated Named Dog Reserve dosnig balance for FY23124 is £238,261 (FY22123: £258,022). 2.2.5 Designated Propety Maintenance Reserve The Charity currentty occupies rented premises. The use of the premises causes wear and lear and the Charity is responsible for costs of the repair and maintenance of the premises. Property maintenance is conducted throughout the year. The Property Maintenance Reserve represents monies set aside to cover these costs. The Property Maintenants Reserve has been sel at £35,000 and is reviewed annually. 2.3 Management of Funds The Trustees continue to pay high regard to the guidan￿ of the Charity Commission in shaping how the Charty delivers charitsble benefiL The management of the Charity's fijnds through the allocation of Re5trtGted and Designated Reserves is a key aspect of the Charivs 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 re￿1ve support from a number of organisations including the following- • Allianz Insurance. operating as PetPlan B81 Fred Greenwich Hospital Pets Foundation Veterans. Foundation • The Seafarers. Charty Army Benevolenl Fund The National Lottery Community Fund Ladies Section Amiy GoEf Club Dogrobés Ltd Thomas's School Bemard Sunley Foundation . The Red Arrows Trust BFBS - Big Salute Aquila -Air Traffic Management SeNices Hogsba¢k Chapter UK Hunt Foresl Group • Johnson's Vetinary Products Lid . HMS Victory HOUNDS ¢.- FOR HEROES HOUNDS FOR HEROES TRUSTEES, REPORT (INCLUDING DIRECTORS. REPORT) (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2024 Fareporl Soclal Club The Barratt Foundation . Paw Paddock Grey Fern Park Equestrian Centre st John the Evangalist Church Gosport SubmarinersAssociation UK Submariners Godolphin School 2.5 Pay Policy for Trustees and Staff All Trustees give their time freety and no Trustee received remuneration from the Charity in the year. There is no intention for Ihis to change. Details of Trustees, expenses and related party transactions are disdosed in Note 10 to the aGcounts. The pay of staff is reviewed annually by Ihe Twstees supported by the Chafity Manager. Staff pay normalty is incTeas8d by a c05t of living increment at the start of eath ￿nancial year guided by CPI and RPI in February for the prior year. Changes in salary to reflect changes in the level of responsbll ity of slaff members are also usually but not exclusive]y timed to come into effect at the start of the financial year. 3 Rlsk management The Trustees have a risk management stralegy which compris A review of the principal financial risks is held at the Fin2no Committee meeting. and are reviewed on a regular basis. The Reserves Policy ouuined earlier refiects the perceived fjnanGial risks and how Ihe Charity has mitigated against those risks, The establishment and maintenance of a Risk Register which identffies aTI material risks to the operalion of the Chatity and the implementation. Plans are identified to redLJce the likelihoodfimpact of the identified risks and the Trustees review Ihe Risk Register quarterly. 4 Structure• governance and management The Hounds for Heroes Charity is a company limited by guarantee. without share cakytal. The Chariws goveming document is its Articles of Assoclation, dated 1st Aprtl 2015. The Trustees meet regularly. currenlly monthly, lo review perf¢m)an¢e, disGuss Gurrent projects and how the Charivs long temi aims and objectives are being met. Presently the Trustees colleciNely act as the board of direclot5 tesponsible for strategy and the delivery of govemance. In addition. the Truslees through sub-committees. comprising of a mrx of Trustees. the Charity Manager and the relevant functional managers for discrete areas of the Charitys operations, namely Finance: Income Generation and servi￿ Delivery (dog supporvtraining & parinerships). At the Trustees Board meetings, the Trustees may vote on any decisions thal are required lo be made for vthich a majority of Trustees must be in agreemenL Should any dectsion making b8 fvndam8rital when not al Trustees are present. thèn relevant documents are circulated and all Trustees are required to vote. Day to day operational matters are the responsibilty of the Charivs Senior Management Tearn comprising Ihe Charity Manager and fhe Senior Managers. HOUNDS ¢-. FOR HEROES HOUNDS FOR HEROES TRUSTEES. REPORT (INCLUDING DIRECTORS. REPORT) (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2024 The trustees, vtho are also the directors for the purwse of company law, and who served during the year and up to Ihe date of signature of the financial statements were: A Parton A Ferguson P J Grin5ted D J Connor J Nomian E Ridgway C J Beynon O Brown JHForth PA Ketley M J Perkins H Slater A F Smrth (Resigned 21 July 2024) (Resigned 17 May 2023) (Resigned 2 February 2024) (Appointed 1 October 2023) (Appoinied 30 January 2024) {Appointed 30 January 2024) {Appointed 30 January 2024) (Appoirrted 30 January 2024) The Trustees recognise that the Charity beneffts from having a team of trustees that have a broad variety of skills and experience that are allied to the operations of the Charty- A candidate Trustee is on]y appointed to the Board of Trustees after a screening and intervie4Y PrO￿$S by the Chair, Vice-chair and selected other Trustees and after satisfadory completion of appropriate searthes by the Disdosing and Barring se￿ICe. New Trustees rective an indLKtion in order to brief them on their legal obligations under charity and company law. the Charity Commission guidance on public benefit and inform them of the content of the Memorandum and Artides of Association, the committee and de￿$lOn-makin9 pro￿sses, the strategic plan and recent financial performance of the Chaiity. They also meel key employees and other Trustees. Trustees are encouraged to attend appropriate extemal training events wher8 thase will facilitate the undertaking of their mle. In FY23124 we aGtively reuuited addttiorkgl trustees and during the financial year we have had the add￿On of 5 new trustees to our board brtnging a raTrJe of skills and experien HOUNDS ¢-. FOR HEROES HOUNDS FOR HEROES TRUSTEES. REPORT (INCLUDING DIRECTORS. REPORT) (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2024 5 Statement of Irustees. responslbllities The trustees. who are also the directors of Hound5 for Heroe5 for the purpose of company law. are re5ponslble fr preparing the Trustees. Report and the financial statements in aLxordance wilh applicable law and United Kingdom Accountlng Standards {Unllod Kingdom Generally Accepted Acci)unling Pfactice)- Company Law iequires the trustees to prepare financial statements for each financial year which give a true and falr view of the state of affairs of the charity and of the incoming resources and applitxtion of resources. including the incoma and expenditure. of t1￿ charitable company for that year. In preparing these flnancial ststemenls. the trust8es are required to. - select suitable accounting policies and then apply them consstently: - observe the methods and prin(iples in the Charilies SORP: - mak8 judgements and e51ifftates that are ￿asonable and pr￿ent. state whelher appliGable UK Accounting Standards havè baen follow8d. subj8ct to any matarial d8partur6S disclosed and explained in the finandal statements: and - prepare Ihe financial stalements on the going (xjncem basis un18S5 it is inappropriate to pr8sume that th8 charity will continue in operatlon. The trustees are responsible for keeping adequate accounting records that drsclose wilh reasonable accuracy al any time the financial position of the charity and enable them to ensure that the ffinancial statemonts (xjmply wilh Ihe Companies Act 2006. th& Charities and Trustee Investment (Scotland) Act 24)05 and th8 Charities Accounts (Scotland) Regulatlons 2006 (as amended). They are also responsible for safeguarding the assets of the charity and hence for taking reasonalAe steps for the prevention and detection of fraud and other irregularities. 6 Auditor The auditor. Moore (SC￿th) LLP. vleré appointad as the new auditors to th8 Charity for th8 202312024 FY and will be is deemed to be reappdnted In accordan￿ with the Companies Act 2IXI6. 7 Dlsclosure of Inforniatlon to audltor Each of the trustees has confjnned that there is no informalion of which they are aware whlch is relevant to th8 audit, but of which the auditor is unaware. They have further conffmed that they have taken appropriate steps to identify such relevant infotmation and to estabfish Ihat the auditor is aware of such infonnation. In preparing this report, the directors have taken advantage of the small conyanies exemptions provided by sectlon 415A of the Companies Act 2006. The trusleas. rèport was approved by the Board of Trust88S. A Ferguson Trustee HOUNDS4-. FOR HEROES HOUNDS FOR HEROES INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS AND TRUSTEES OF HOUNDS FOR HEROES Opinion We have aLJdtted the financial statements of Hounds for Heroes (the 'chariV) for the year ended 31 March 2024 which comprise the stat8ment of finanual aclivities, the balance sheet. the statement of cash flows and rK)tes to the flnancial statements. induding significant accounting policies. Tho financial reporting framework that has bean applied in their preparation is applicable law and United Kingdom Accounting Standards. induding Finanaal Reporting Standard 102 The Finanual Reportsng Standard applicable in the UK and Republic of Ireland (United Kingjom Generally Accepted A(£ounting Practice}. In our opinion, the financial stat8ments: give a true and fair view of the state of the charilable compan￿$ affairs a5 at 31 March 2024 and of its incoming ￿soUrceS and application of resources, in¢luding its income and expendlture. for the year then ended.. have been proper￿ prepared in accordance wiEh United lfjngdom Generally Acc8Pt8d Accounting Practir£: and havg b8en prepared in ac(l)rdan￿ with the requirements of the Companies Act 2006, the Charfties and Trustee Invesbnent (s￿lIand) Act 21X)5 and regulation 8 of the Charities Accounts (Scotland} Regulations 2006 (as amended). Basi3 for opinion Wa conducted our audit in accordan￿ wth International Standards on Auditing {UK) {ISAs IUK)} and applicable law. Our responsibilities under those standards are further described in the Audito¢s ￿spOnSI￿11ties for the 8udit of the financial statements sectbon of our report. We are independent of the charity in accordan￿ wlth the ethical requirem8nts that are relevant to our audit of the financial statements in the UK including Ihe FRC'S Ethical Standard, and we have fUlfil￿d our other ethical responsibilitie5 in accordance with these requirements. We believe Ihat the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Conclusions relating to going concem In auditing the financial statements. we have concluded that the trustees. use of the golng con￿rn basis of accounting in the preparalion of the financial staternents is appropriate. Based on the work we have perforr￿, we have not identified any material uncertainties relallng to evants or collditions that, individually or collectively, may cast significant doubt on the chariws abilily to continue as a going concem for a pariod of at18ast ￿e1ve months from when the financial ststements are aulhorised for issue. Our responsibilities and the rosponsibilities of the Irustees ￿1th respect to going concwn are d8scrib8d in the relevant sections of this report. other infarmatlon The other infomiath)n comprises the infr)miation inclLKled in the annual report other than tha finandal statam8nts and our auditorfs report thereon. The trustees are responsible for the other infomiation contained within the annual r8POrt. Our 0￿.￿lOn on the financial ststements does not cover the other irrformation and, ex￿pt to the extent otherwise explicitty stated in our T8porl. we do nol express any form of assurancE condusion thereon. Our responsibiuty is to raad the other inlomiation and. in doing so, con&d8r whether the other information is materialty inconsistent with the financial Statements or ¢)ur knowledge obtained in the cours8 of thè audit, or otherwise appears to be materialty misstated. If we identify such material inconsistencie5 or apparent material misstatements, we are required to determine whether this gives ris8 to a mateTial misstatement in the finanual statements Ihemselves, If. based on the work we have perf0M￿l. we condude that Ihere is a maten.al misStatem8nl of this other infomiation, we are required to report that fact. We have nothing to repcKi in this regard. HOUNDS FOR HEROES INDEPENDENT AUDITOR'S REPORT (CONTINUED) TO THE MEMBERS AND TRUSTEES OF HOUNDS FOR HEROES Opinions on other matters prescribed by the Companies Act 2006 In our opinion. based on the work undertaken in the ¢outse of our audit: the information given in the truslees, report for the finanaal year for which the financial stalernents are prepared. which indudes Ihe dTiedors' report prepared for the purposes of company law. is consistent wilh the finanrAal statements.. and the diredors, report induded wilhin the tNstees' report has been p￿pared in a¢cordan¢e with applicable legal requirements. Matters on which we are requlred to report by exception In th8 light of the knowledge and understanding of the tharity and its environment obtained in the course of the audit. we have not identified material misstatements in the directors. Teport Included within the trustees, report. We have nothing to réport in respect of the following matters in relation to whith the Companies Apl 2006 and the CharitiesAccounts (Scouand) Regulations 2006 (as amended) require us to report to you if. in our opinion: adequate and proper a¢¢ounting records h￿￿ not been kept. or returns adequate for our audit have not been received from branches not visited by u5- or the financial statements are not in agreemenl with the a￿￿￿nting rerxjrds and returns: or certain disdosures of twstees, remuneralion speufied by law aTe not niade: or we have not re￿IVed all the infomiation and explaTBlions we require for our audit.. or the trustees were not entitled to prepare the financial statements in a(xoidance with Ihe small companies regime and take advantage of the smail companies. exemptions in preparing the truslees, report and from the requirement to prepare a strategic reporL Responsibilities of trustees As explained more fully in the statement of trustees, responsknli ities. the trustees, who are also the directors of the charity for the purpose of company law, are ￿spOnSible for the preparation of Ihe financial statements and for being satisfied that they gfrve a Irue and fair view. and for such intemal control as the trustees detemiine is necessary to enable the preparation of financial statements that are free from material misstatement. whelher due to fraud or error. In preparing the financial slatements. the Irustees are responsible for assessing the charitys abiltty to ntlnue as a going ¢on*m. disdosing. as appficable. matters related to going COn￿M and using the going concem basis of accounting unless the Irustees either intend lo liquidale the charitable company or to ￿ase operalions. or have no realistic allemalive but to do so. Auditorfs responsibilities for the audit of the financial statements We have been appointed as auditor under seclion 44{1)(c) of the Charities and TTUStee Investment {Scotland} Act 2005 and under the Companies Ad 2006 and report in accordance with Ihe Acts and rejevanl regulations made or having effect Ihereunder. Our objecknves are to obtaMI reasonable assurance about whether the financial statements as a whole are free from material misstatemenl. whether due to fraud or error. and to issue an auditorfs report Ihat indudes our opinion. Reasonable assuranrE is a high level of assurance but is not a guarantee Ihat an audit conducted in accordan with ISAS (UIQ will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, Individu￿lY or in Ihe aggregale. they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial stalements. A further description of our responsibiltbes for the audii of Ihe ffinancial statements is located on the Financial Reporting Councils website at: www.frc.org.uklauditorsresponsibllilies. This desuiplion forms part of our audttor's report. Irregularities, including fraud. are instances of norFcompliano with laws and regulations. We design procedures in line with our responsibiltties. (iutlined above. lo detect material misslatements in respect of irregularities. including fraud. Th6 extent to which our procedures are 12pable of delecling irregularilies, induding fraud. is detailed below. 10- HOUNDS FOR HEROES INDEPENDENT AUDITOR'S REPORT {CONTINUED) TO THE MEMBERS AND TRUSTEES OF HOUNDS FOR HEROES Explanation as to what extent the audit Wds consider8d capable of detectlng Irregularfties, including fraud The objectives of our audil in resped of fraud. are; to identify and assess the risks of material misstatement of the finan￿al ststements due to fraud,. to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud. through designing and implementing appropriate responses to those assessed tisks,- and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention atKI detection of ftaud rests with both management and those charged wrth governance of the chatitable company. Our approach was as follows.. The engagemeni partner selecled stsff for the audit who had prior knowledge of the dient and who had the required competence and skills in the not for profit sector to be able to identify or recognise non-compliance with law5 and regulations. We assessed the risk of i￿egUlar1tieS as part of our audit planning. including due to fraud. management override was identified as a significant fraud rrsk from our assessment. This is due to the ability to bypass controls through inappropriate expenditure and accounling poliaes adopted. Completeness of income was also identified as a significanl risk to the audit, m05t signrficantly legacy In￿rne as there is a degree of judgemenl as to whelher this inCOTne should be included. Additionally, some income received is restricted in its use. A significant risk was identified regarding the correct classification of In￿Me between restricted and unrestricted funds and that the expenditure against this income was in line with any spectfied restriciion$. We obtained an understanding of the legal and regulatory requiremerrts applicable to the charttable ompany and we considered the most signific2nt lo be the Companies Act 2005, the Charities Act 2011, the Charities Accounts (Scotland) Regulations 2006 (as amended). Ihe Charities SORP, and the UK financial reporting ￿andardS as issued by th8 FinancÈal Reporting Council. We considered how the charilable mpany complies with these requirements by discussions wilh management and Ihose Gharged with goveman¢e. We enquired of managemenl and those charged with g0Veman￿ as to any known instances of non- compliance or suspected non-compliance with laws and regulations. Consideration was also made of the internal controls in place to mitsgate the identified risks. We assessed the control enmronmenl, documenling the systems. controls and processes adopted. The audit approach incorporated a combination of conlrols where appropriate, analytical review and substantive procedures involving tests of transactions and balances. Any irregularibes noted were discussed with management and addrtlonal Corroborative evidence was obtained as required. We obtained an understanding and assessed Ihe irnpact and effect of Covid-19 on the operations of the charitable company and adapted our audrl approath accordingly. We enquired and obtained evidence lo support the going concem assumption and reviewed grant received. dovetailed with the work undertaken on management override. To address the risk of frdud through management override we: Performed analytical procedures to identfy any unusual or unexpectsd relationships: Tested joumal entries to identfy any unusual transactions: Reviewed sensitive nominal ledgeT codes. Reviewed transactions wilh related parties; and Assessed whether judgements and assumptions made in determining the a￿ountIng estimates were indicative of potential bias. In response to the risk of i￿egula￿tieS with regard510 the completeness of income we= Agreed a sample of income re￿iVed from Sour￿ documentation into the accounling records. Obtsined details of legactes due to be receiv6d al the year end from source documènlation and ensuring that none were omitted from the a¢￿Unts and th0￿ induded were at the correct value,. Discussed with management thal there wa5 no fijrther income they were aware of thal needed to be accounled for, and Reviewed board minutes for evidence of any further unracorded incom 11 HOUNDS FOR HEROES INDEPENDENT AUDITOR'S REPORT (CONTINUED) TO THE MEMBERS AND TRUSTEES OF HOUNDS FOR HEROES In response to the dassification of income belween restricted and unrestricted we: Agreed a sample of income re￿Ived from souro doGumentation into the accounting records to ensure any restrictions to the inojme were Co￿ec￿Y identified: Reviewed the dients analysis of restrided funds fc￿ any othfjous misallocations of incom8 or expenditure.. Confimied that expenses and payroll Costs alloGated against ffestricted funds met the purpose for which lh8 in¢ome VRS given" and Tesled a sample of expenditure lo ensure it was allocated against the o)rreGt fUnd￿[g received. 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 norFcompliance. Auditing stsndards also limit the audit procedures required lo identrfy non-cofftpliance with laws and regulations to enquiry of the directo￿ and other managemenl and Ihe inspection (rf reg￿atOry and legal corr8spondence. if any. Malerial misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion. Use of our report This report ts made solely to the charitabSe companys members. as a body. in accordance with Chapter 3 of Part 16 of the Companies Act 2(K16 and to the regulalion 10 of the Charities Accounls (Scotland) Regulations 2006. Oui audit work has been undertaken so that we might State to the chatitable ￿mpanrfs members and trustees those matters we are required to state to them in an audttorfs report and for no other purposa. To the fullest extent permitted by law, we do not accept or assume responsibilty to anyone other than the charitable company, the charitable company's members as a body.and the charitable company's tNstees as a body, for our audit work. for this report. or for the opinions we have formed. Louise Hastings {Senior Statutory Auditor) for and on behalf of Moore (South) LLP 04.101.1.tsk CharteTed Accountarrts statutory Auditor Cty Gates 2 - 4 SoLrthgate Chichester West Sussex P019 8DJ 12- n3Jrn Éx LO (D o) (o N) cn o) co HOUNDS FOR HEROES BALANCE SHEET ASAT31 MARCH 2024 2024 2023 Notes Flxed assets Intangible assets Tangible asset5 13 14 12.920 2.881 16.150 7.543 15,801 23,693 Current assets Stocks Oèbtors Cash at bank and in hand 15 16 5.282 101.861 1.507,686 106.082 1,427.259 1.536.021 1.614.829 Credltors: amounts falllng due within one year 17 (29.494) (36,753) Net current assets 1.50G.527 1.578.076 Total assets less current Ilabllltles 1.522.328 1,601.769 Net assots excluding pension liability 1.522.328 1,601.769 The funds of the charity Restrict8d income funds Unresblcted lunds - general Unrestricted funds- designated 19 21 20 120.518 170.322 1.231.488 128.792 308.202 1,164.775 1,522,328 1,601.769 These finanoal statements have been prepwl in accordance with Ihe provtsions applicable to ¢ompanies subject to the small companios regime. The finan(aal 8 tements Proved ty the tNslees on .. . . .... A Parton Trustee Company registration number 0713(1031 (England and Wales) 14~ HOUNDS FOR HEROES STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 MARCH 2024 2024 2023 Cash flows from owating actlvltles Cash absorbed by operations {143.494) 1244,428) Investlng actlyltlos Purchase of intangTble assets Purchase of tangible fixed assets Investrn8nt inojme received {16.150) (2,419) 30,025 63.067 Net cash genernted from Investlng activities 63.067 11,456 Net cash used In financing actlvllles Net decrease in cash and cash equivalents (80.427) (232,972) Cash and cash equlvalents at baglnning of year 1.507.686 1.740,658 Cash and cash equivalents at end of year 1.427.259 1,507,686 15- HOUNDS FOR HEROES NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024 Accounting policies Charity informatlon Hounds for Heroes is a ptivate charitable company fimited by guarantee incorporated in England and Wales. and registered with the Charity Commission in England and V*Jales. and S(x)tland. The registered office is Unit 2B. Rookery Farm Buildings. Ramsdean. Petersfield. Hampshire. GU32 1 RU. 1.1 Accounting conventlon The financial statements have been prepared in accordance with the thariiys [goveming document], the Companies Act 2(￿. the Chatiiies and Ttustee Inveslmenl (Scolland) Act 2005, the Chariti8s Accounts (Scotland) Regulations 2006 (as amended). FRS 102 Tre Financial Reporting Standard applicable in the UK and Republic of Irelan¢f ('FRS 102? and the Charities SORP 'A¢¢ounting and Reporfing by Charities: Statement of Recommended praCt￿e applicable to chatities preparing their accounls in accordance With the Financial Reporbng Standard applicable in the UK and Republic of Ireknd (FRS 102)" (effective 1 January 2019). The charrty is a Public Benefit Entity as defined by FRS 102. The financial statements are piepated in slerling, whtch is Ihe fundional <￿t[enCY of the charity. Monetary amounts in these fina￿la1 stalements are rounded to the nearesl £1. The financial slaternents have been PTepaTed under the historical cost convention. The principal accounting polictes adopted are sel out below. 1.2 Going concern At the time of approving the financial sLotements, the trustees have a reasonable expedation that tho charity has adequate resources to continue in operational exrstence for the foreseeable future. Thus the trustees continue to adopt the going concern ba515 of accounting in preparing the financial statements. 1.3 Charitable funds Unrestricted funds are available for use at the discretion of the trustees in fvrtherance of their charitsble objectives unless the funds have been designated for other purposes. Suth funds may be held in order to finance both working captlal and capital investment. De￿gnated funds comprise funds whith have been set aside at the discretion of the trustees for speiific purposes. The purposes and uses of the designated funds are set out in the notes to the financial slatements. Restricied funds are sthject io specific conditions by donors or grantOTS as to how they may be used. The purposes and uses of the restricted funds are set out in Ihe notes to the financial slatements. 1.4 Income Cash donations are recognised on recept. Other donations awe Tecognised once the charity has been notified of the donation. unless pertorrnance Gonditions require deferral of the amount. Income tsx recoverable in relation to donations ieceived under GifiAid 01 deeds of (x)venant is rec)sts of completion and (x)sts to be incurred in matheting. selling and distribulion. 1.10 Cash and cash equivalents Cash and cash equivalents include Ixsh in hand. deposits held at call wrth banks. other short-temi liquid investments with original maturities of three months or less. and bank overdrafts. Bank overdrafts are shown within borrowngs in current liabilitie& 1.11 Financial instruments The tharity has elected to apply the provisions of Section 11 'Basic Financial Instruments. and Section 12 'Olher Financial Inslrurnents Issues. of FRS 102 to all of its fir￿nCIal instruments. Financial instruments are recognised ￿ the charity's balance sheet when the charity becomes party to Ihe ntrac*ual provisions of the instrumenl Financial assets and liatmlities are offset, Wtth the net amounts presented in the financial statements. when there is a legally enforceable right to set off the recognised amounts and there is an intention lo selue on a net basis or to realise the asset and settle the liability simultaneously. Basic financial assets Basic financial assets. which indude debtors and (xsh and bank balances, are initially measured at transaction price induding transaction costs and are subsequantly carried at amortised cost using Ihe effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the fulure receipts discounted at a maTket rale of interest. Financial assets dasssfied as receivable within one year ate not amotlised. Impalmient of financlal assets Financial assels. other Ihan those ￿ld at fair value through inwme and expendilure. are assessed ft)r indicators of impaimient al each reporb.ng date. Financial assets are iTnpaited where there is objective evtdence that. as a result of one or more events that 0¢￿rTed after the initial recognition of the ffinanaal asset. the estimated future cash flows have been affecled. If an asset is impaired. the impairment loss is Ihe dIfferen￿ beiween the catrying amount and the present value of the eslimated cash flows discounled at the assefs original effective interest rata. The impairm8nt loss is re¢ognised in net in¢omel(expendiIu￿) for the year. If there is a decrease in Ihe impairment loss arising from an evenl oc£uNing after the irnpairment wa5 recognised. the impairment is reversed. The reversal is such that the ￿ffent carrying amount does not exrEed what the caTrying amounl would have been. had the impaimient nol previously been recognised. The impaimient reversal is we￿gnISed in net incomel(expenditurE) for the year. 18- HOUNDS FOR HEROES NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2024 Accounting policies (Continued) Derecognition of financial assets Financial assets ar8 d8recognised only when the contracbjal righls to the cash flows from the asset expire or are settled. or when the charity transfers the finan(aal asset and substantially all the risks and rewards of ownership to another entity, or rf some significant risks and rewards of ownership are retained bul control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party. Basic financial liabilities Basic financial liabiltbes, including creditors are initially recognised at transadion price unless the arrangement constitules a financing transaction, where the debt instrument is measured at Ihe present value of Ihe fLrture payments discounled at a market rate of interesL Financial liabilities classrfied as payable within one year are not amortised. Trade ¢reditors are obligation5 to pay for good5 or servifx Ihat have been acquired in the ordinary course of OP6ralions from suppliers. Arnounts payable are classified as current liabililies if payment is due within on8 year or less. If not, they are presented as norFcurrent liabilities. Trade c*edilors are recognised initially at transaction price and subsequently measured at amortised cosl using the effective interest method. Derecognition of financial liabilities Financial liabilibes a￿ derewgnised when the charity's contractual obligations expire or are discharged or can￿lled. 1.12 Employee benefits The cost of any unused holiday entiuement is rewgnised in the period in which the employee's servios are received. 1.13 Retirement benefrts Payments to defined contribution retirement benefrt schemes are charged as an expense as they fall due. 1.14 Debtors Trade and other debtors are recognised at the settlement amount due. Prepayments are valued at the amounl prepaid. 1.15 Creditors Creditors and provisions are recognised where the ¢*arity has a present obligats.on resulting from a past event that will probably res￿￿ in the transfer of funds to a third paty and thé amount due to settle the obligation can be measured reliably. Creditors and provisions are normally recognised al their sethement amount. Critical accounting estimates and judgements In the application of Ihe charit￿S accounting policies, the trustees are required to make judgemenls. estimates and assumptions about the carying amount of assets and liabilities that are not readily apparent frorn other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevanL Actual results may differ from these estimates. The estimates and undetying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period. or in Ihe period of the rewsion and fulure periods where the revision affects both c￿￿ent and future periods. The trustee5 consider that there are no material areas of judgement or estimation unc8rtainty. 19- 141 Th1 0 (l) r 104)tO oo¢o 7) orjv d> CJ OOvThl J(> * thl v ) CO L HOUNDS FOR HEROES NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2024 IncoTne from donations and legacies (Continued) Donated goods and services Donated setvices are induded at the value to the charity. where this can be quanttfied. Donated goods and services received for which the trustees have been able to value include donations of insurance, vehide repairs and receipt of a puppy. In addibon to this, lh8 trust8es are very grat8fv1 for Ih? time volunteered by individuals in wnning events and fundraising activities. This is invaluable support for the Gharity, and Ihe Irustees are not able to value this in monetary terms. Income from other trading activities Unrestricted Unrestricted funds funds 2024 2023 Sale of charity products Speaker fees 3.881 310 3,557 Other trading aGtrvities 4,191 3,557 In both the current and prior year, this income is classified as unre5triGtsd. Income from investments Unrestrictsd Unrestn'cted funds funds 2024 2023 Interest receivable 63.067 30,025 In both the cu￿ent and prior year. this wicome is dassffied as unrestricted. -21- HOUNDS FOR HEROES NOTES TO THE FINANCIAL STATEMENTS {CONTINUED) FOR THE YEAR ENDED 31 MARCH 2024 Expendituffe on raising funds Unrestrictod Unrostricted funds funds 2024 2023 Fundrnising and publicity Govemance costs Staging fundraising events Advertlsing Other fundraising costs Staff costs Support costs 5,626 5,501 4,489 6.741 12.734 12.983 122,675 8,287 1.894 32.882 138.472 195.617 165,123 In both the current and piior year, costs relating to raisiry funds were expensed from unrestricted funds. G) fn IIC)11 Jq) O (0 co ¢5) (n *& ) CO ¢yJ 6) ¢0 0￿0(0000 co ca UL ¢D o h) (T)