CHAS Annual Report and Accounts 2012-13 by Gemma Smith

Caring for children, young people and their families is at the heart of all that we do.

Annual Report and Accounts 2012-13

2012-13 For the year ended 31 March 2013 Scottish company number SC 136410

Scottish charity number SC 019724

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2013

DIRECTORS’ REPORT The Directors have pleasure in presenting the Annual Report and Accounts of Children’s Hospice Association Scotland (CHAS) for the year ended 31 March 2013.

WHAT CHAS DOES CHAS is the sole provider of children’s hospice services in Scotland, caring for children and young people with a wide range of life-shortening conditions, many of which are rare. CHAS offers care in two children’s hospices, Rachel House and Robin House, and through the CHAS at Home service. Current research estimates that in Scotland there are more than 800 children and young people with palliative care needs. In 2013, CHAS is providing care to over 300 of these children, young people and their families across Scotland. CHAS understands that for many families the decision to accept palliative care for their child is very difficult. We provide children (including babies), young people and their families with the opportunity to be cared for, respected and nurtured as individuals and as a family in an environment which offers rest and recuperation from the demands of caring. Both hospices provide a sense of continuity and stability, and encourage trusting relationships to develop between families and staff. CHAS provides holistic care and support in a variety of care settings and geographical locations by offering a comprehensive range of services including: ■ ■ ■ ■ ■

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Short planned breaks for the individual and/or family Emergency or unplanned admissions to the hospice Symptom management End of life care Care and support at home, in children’s hospitals and in local communities 24 hour advice for families and professionals Bereavement care and support

CHAS is also involved in the education and training of nursing, medical, social care and allied professionals throughout Scotland and the UK. CHAS is funded predominantly through the generosity of supporters across Scotland and beyond. In addition, statutory funders contribute towards the running costs of the hospices. CHAS is a Scottish registered charity and a company limited by guarantee and has one subsidiary company, CHAS Trading Limited.

CHAS PLAN 2011-2016 The CHAS Plan 2011-2016 sets out the aspirations for the development of CHAS over the five years to 2016 and beyond. It was developed in consultation with families, young adults, staff, and volunteers and is in line with national policy. The full plan is available as a separate publication, but the information provided below is a summary of its key elements.

Core Value, Vision and Purpose of CHAS

Caring for children, young people and their families is at the heart of all that we do. Our vision is that children and young people in Scotland will have access to palliative care when and where they need it. We will achieve this by being passionate about: ■ Delivering high quality palliative care and support to children, young people and their families. ■ Working with children, young people, families and those closest to them to ensure that care is right for everyone, every time. ■ Having appropriately skilled teams who are able to work in a range of care settings. ■ Ensuring CHAS has the necessary resources to support services for the long term. ■ Using our influence, expertise and connections to shape the development of palliative care provision across Scotland. Our specific objectives for 2011 to 2016 are organised under three strategic themes as follows: Care We will continue to develop CHAS’s model of palliative care to support children, young people and their families in a way that offers them genuine choices in an ever changing world. We will further develop services to ensure we are able to reach more children and young people who need us, wherever they live in Scotland. Support To support the delivery of the best possible care to children, young people and their families, CHAS needs teams of highly skilled and motivated staff and volunteers, a sound organisational structure, adequate resources, and to be financially secure. Connections CHAS will be at the forefront of children and young people’s palliative care in Scotland, and we recognise that the connections we make with others are vital to the successful delivery of this care. Progress against the plan is reviewed on a regular basis by the Senior Management Team and the Board of Directors.

2012-13 HIGHLIGHTS Care

CHAS continues to attract referrals from across Scotland and accepted 58 new children and young people during the year. Each of these individuals is provided with person-centred care in response to their needs. In total, more than 350 children, young people and their families were supported in 2012-13, and in so doing, CHAS provided them with almost 10,000 bed nights and 1,300 outreach or homecare visits. As at 31 March 2013, 305 children or young people and their families were using CHAS services compared with 292 at the end of the previous year.

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2013

DIRECTORS’ REPORT (Continued) Responding to the needs of families Following the launch of an additional CHAS at Home team in Aberdeen last year, CHAS has continued to expand its service across Scotland. Currently, at least 60 families are supported in their own homes each month. In addition to the 850 homecare visits carried out during the year, numerous group events were held allowing families the opportunity to spend time with each other as well as access care and support from the CHAS at Home team. An initial research and evaluation project was conducted in 2012 with families across CHAS services to identify their information and communication needs. The recommendations from the research findings are being taken forward by our communications team and hospice staff. A section of the CHAS website is being designed specifically for children, young people and their families which will give greater access to advice and support as well as create a forum for families to communicate with each other. Delivering quality care Rachel House and Robin House are regulated by Healthcare Improvement Scotland (HIS) and CHAS at Home is regulated by the Care Inspectorate. All three services received unannounced inspections recently and each received very positive reports. In particular, the inspection reports confirmed that children and young people were at the heart of CHAS’s work. Families reported that they valued the service and they felt staff listened and responded to their views to improve the outcomes for them. Following on from the introduction of a medication strategy in 2011-12, CHAS continues to develop its practice in this area. To take forward this work, a Lead Paediatric Palliative Care Pharmacist was appointed across both hospices in November 2012. This is the first post of this kind in Scotland and will contribute to the development of paediatric palliative care pharmacy. In light of the increasing complexity of clinical care required by the children and young people supported by CHAS, a continuing challenge in the last year has been the assessment and provision of adequate levels of medical cover. To this end, a full time medical Specialist in Children’s and Young People’s Palliative Care was recruited for Robin House. An overall review of CHAS’s needs in the future for medical staff and involvement of other senior clinicians is ongoing. Family support In addition to the significant number of families who actively receive bereavement support from our family support team, there were a further 40 deaths of children and young people during 2012-13. Bereaved families continue to be supported through Remembering Days held at the hospices, the Forget-Me-Not and Dragonfly support groups, and programmes of befriending.

CHAS research shows that siblings of dying children experience very particular challenges. We have continued to develop our work in providing support to these family members. In addition to the range of events, publications and support already provided for siblings, a group of siblings using Rachel House completed a specially designed residential programme in Skye with Columba 1400 and CHAS staff. Columba 1400 is an award winning social enterprise and charity whose purpose is to help young people develop and realise their own inner confidence. At Robin House, a structured sibling support group, known as ‘4U’, was set up and met regularly over a six month period. Both initiatives were evaluated as being highly successful and beneficial to the siblings involved. Young people who use CHAS participated in workshops with the Scottish Youth Parliament. The workshops were interactive and encouraged everyone to share their thoughts and opinions on topical political issues. Young people and transition into adult services CHAS is committed to playing its part in supporting young people to prepare successfully for their transition into adult life. The CHAS Plan states that ‘we will support and empower young people through transition into adult services while delivering age appropriate care’. Standard HIS certification for the hospices sets an upper age limit of 18 years, but a variation to this certificate was issued to enable CHAS to continue to care for young people up to age 35. Previous CHAS research into young adults and issues of transition resulted in a short life working group being established by CHAS to review the ways in which current services support young people to prepare for adulthood and to agree an upper age limit in CHAS. This group was supported by Together for Short Lives and also heard from staff from other children’s hospices who were able to share their experiences of introducing a upper age limit. This work resulted in a Transition Policy which identified an upper age limit of 21 years for using CHAS services. Following agreement by our Board of Directors, CHAS announced the intoduction of a Transition Policy in May 2013. To support this new policy and ensure we can continue to offer the best possible service to young people and their families, we are recruiting a new and dedicated transition team who will work with young people and their families to plan their transition over a three year period. CHAS has committed to ensuring that each young person’s transition is person-centred and takes a personalised, sensitive and holistic approach to their individual needs.

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2013

DIRECTORS’ REPORT (Continued) Creative approaches Fun and play remains a very important part of life in CHAS and in-house specialists working alongside partner organisations allow us to offer children and young people a variety of creative participatory experiences. These activities include regular visits from Clowndoctors, music therapists, entertainers and magicians who are a welcome part of hospice life. This year, the CHAS at Home team has occasionally been able to take music therapists to family homes. A number of residencies with both Scottish Opera and the Royal Scottish National Orchestra took place during 2012-13. These resulted in DVDs of musically inspired projects involving many children, young people and their families as well as an Olympics 2012 themed garden party and sports day for all to enjoy. Other significant highlights include a young person pursuing his interest in art and design with support from CHAS at Home and Highland Hospice culminating in his own art exhibition in Eden Court Theatre in Inverness. Teenagers using CHAS took part in a ‘Dragon’s Den’ event with students from Duncan of Jordanstone College of Art & Design, turning their new product ideas into prototypes. The Teapot Trust carried out a pilot project involving two art therapists visiting Rachel House on a weekly basis. This was positively evaluated and the service is likely to continue with a focus on bereavement support groups at both hospices. Hospices and gardens Regular refurbishments and innovative garden developments continue at both hospices. An Options Appraisal exercise is currently underway at Rachel House to explore how this hospice could be further developed to meet the needs of the service today and in the future. The views of children, young people and their families have been sought during the process using a variety of methods such as focus groups, email feedback, telephone interviews, or contributions on shared information boards.

Support CHAS currently has 263 staff working alongside 830 volunteers operating throughout Scotland delivering care and raising the funds required to run the vital care services. CHAS is committed to ensuring these individuals are highly skilled and motivated in order to provide the highest quality of service. Staff Our highly professional staff have once again worked with great skill, commitment and enthusiasm to deliver care to children, young people and families and all staff continue to work towards the successful implementation of the CHAS Plan. New staff have been introduced in response to service developments and expanding fundraising activities.

Volunteers We were delighted to be one of only 60 organisations in the UK to be awarded the Queen’s Diamond Jubilee Volunteering Award 2012 in December of last year. This followed CHAS’s reaccreditation for the Investing in Volunteers Award in May 2012, having been the first charity in Scotland to achieve this standard three times since 2005. CHAS volunteers continue to make a very significant contribution in terms of time, commitment and skills. In 2012-13, these volunteers in total donated 78,000 hours of time which CHAS estimates to have an economic value in the region of £1.3 million. Volunteers are involved in a wide range of roles in almost every area of CHAS from fundraising, administration and retail to gardening, catering and befriending. A number of new volunteering roles were developed during the year such as helping care staff with children at bed time and specialist support in both human resources and communications. There has also been a significant focus on the recruitment of additional retail volunteers for new CHAS shops in Glasgow and Dunfermline. Furthermore, there has been a significant increase in the involvement of companies through our Employer Supported Volunteering programme. Learning and development Over the past year, CHAS staff took part in almost 10,000 hours of learning and development. Including CHAS online courses, staff completed over 4,000 individual learning activities, attended 22 different conferences and seminars, and participated in over 140 different training courses and other events. In addition, 18 individuals either completed or worked towards formal qualifications supported by CHAS. Advancing clinical best practice continues to be a focus in CHAS. During 2012, a member of our nursing team became CHAS’s first non‑medical prescriber after completing a course with the University of the West of Scotland. A further two nurses have started the course for completion during 2013-14. In addition, clinical supervision and a competencies framework are being introduced as well as new initiatives such as a monthly Journal Club. Fundraising Supporters across Scotland and beyond continued to give generously to CHAS throughout 2012-13. CHAS received income from a range of sources including community fundraising, events, companies, trusts, adult groups and individuals. Many supporters left generous gifts to CHAS in their wills. CHAS continued to diversify income streams in order to maintain income levels in a continuing economic downturn. A new outdoor event for CHAS called Beat the Borders was developed and the selling of places for summer 2013 is well underway. A Trust Fundraiser has been recruited to build on the current levels of support from Trusts and Foundations.

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2013

DIRECTORS’ REPORT (Continued) CHAS was pleased to continue significant partnerships which include the Kiltwalk, Real Radio, and Frankie & Benny’s. Some exciting new events included being a beneficiary charity of the Scottish Open in the North of Scotland and holding the first Glasgow Ladies Lunch for CHAS. Increasing numbers of companies supported CHAS in the last year, not only raising funds but also encouraging their staff to volunteer for CHAS in offices, shops and hospices. A number of sizeable gifts in kind were also donated from companies including Carillion which helped considerably with work in the grounds of Robin House. Individual donations continued to be challenged by the economic climate, although the numbers of people taking part in fundraising events increased. CHAS now offers a wide range of outdoor events including bungee jumps, golf days, runs, walks, and cycle events. CHAS Trading enjoyed encouraging results especially from eBay and from goods donated to our shops. A new charity boutique, CHAS at Byres Road, opened in Glasgow selling contemporary, vintage and designer clothing, and a further two shops opened recently in Dunfermline. Raising awareness CHAS continues to have a significant presence throughout the communities of Scotland and maintains this through all types of media and its network of fundraising volunteers. CHAS is marking its 21st year in 2013 and a number of events have already been held to promote this milestone. These included a reception at the Scottish Parliament, attended by MSPs, health and social care workers, and a supporter reception at Robin House. Aligned with the national policy for palliative and end of life care, ‘Living and Dying Well: Building on Progress’, CHAS launched a community engagement project early in 2013, The 100% Project. It aims to tackle issues surrounding death, dying and bereavement in a positive, life-affirming way. This project was launched through a social media campaign to decide Scotland’s top tear jerker movie, in association with Filmhouse in Edinburgh. Maximising efficiency CHAS continues to use technology to increase its operational efficiency and provide timely and effective information to staff in carrying out their work. In 2012, the first phase of a new electronic system for children and young people’s records was successfully introduced, with the second phase on schedule for implementation during the summer of 2013. The new system allows for more effective recording of and access to notes on all types of care provided to each child, young person and their family members as well as essential hospice administration such as bed bookings and correspondence.

Robust IT infrastructure is essential to ensuring the effectiveness of IT systems. CHAS has invested in higher capacity lines at both hospices, and installed wireless networks at most sites. Video conferencing facilities have been increased and are used extensively across CHAS, saving on staff time and travel costs. As a continuously developing organisation, CHAS relies on sound administrative services to support all areas of its work. During 2012-13, an administration forum was established with the purpose of the administration teams across CHAS working together and sharing their skills and expertise to maximise effectiveness and efficiency.

Connections In order to realise our vision of children and young people in Scotland having access to palliative care when and where they need it, it is essential that we work with others in delivering that care and making plans for the future. Influencing policy CHAS hosted a National Square Table event in Edinburgh in November 2012. Around the table were 30 participants including a number of parents who use CHAS services as well as ministers, leaders and policy makers from the health, education and social care sectors and other representatives from the children’s palliative care community. As well as those around the table, over 60 observers attended and social media was used to connect with other interested parties during the event. The event offered a unique opportunity to explore the future development of children’s palliative care at a critical time. Cabinet Secretary for Health and Well‑being, Alex Neil MSP, attended the first session of the Square Table and heard directly from parents of children with palliative care needs as to where they saw improvements to service provision being necessary. A number of key organisations made a pledge to take action in their own area of work. Following a pledge from the Cabinet Secretary, CHAS attended a cross cabinet meeting at the Scottish Parliament in early 2013 to discuss a number of key issues emerging from the Square Table. CHAS continued to contribute significantly to the work of the Scottish Children and Young People’s Palliative Care Executive (SCYPPEx), particularly in the development of the Framework for the Delivery of Palliative Care for Children and Young People in Scotland. Following publication and distribution of the framework by the Scottish Government in November 2012, CHAS led a series of road shows across Scotland to raise awareness of the new framework.

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2013

DIRECTORS’ REPORT (Continued) During 2012-13, the CHAS Medical Director, Dr Pat Carragher, was elected a Fellow of the Royal College of Paediatrics and Child Health. This is a significant honour as applicants are required to demonstrate distinction in their field and must be nominated by existing fellows. In addition, Dr Carragher, was recently elected Chair of the Association of Paediatric Palliative Medicine. Effective partnership working CHAS, in collaboration with the Royal Hospital for Sick Children in Glasgow, has developed a night sitting service for children and young people with a cancer diagnosis at end of life. This service is being funded by the Emma Cameron Foundation and is being piloted in the West of Scotland with the intention of extending its reach across Scotland. In January 2013, Scotland’s Council Leaders agreed an historic deal with CHAS for a National Funding Agreement for the two years from 1 April 2013. This agreement will see Scotland’s 32 Local Authorities pay CHAS a total of almost £680,000 per annum as well as facilitate more effective communications and partnership working. Research and education As the only provider of children’s hospice services in Scotland, CHAS has demonstrated a commitment to evidence based practice in children’s palliative care through a structured programme of learning, research and development. A commitment has recently been made to fund a research project with University of Dundee to explore the end of life care needs of younger adults. CHAS staff have continued to share research and best practice through presentations at national and international conferences. Three oral presentations and four poster presentations were delivered at the 19th International Congress on Palliative Care in Canada in October 2012. Other conferences attended included the 3rd International Public Health and Palliative Care Conference in Ireland, the 13th World Congress of the European Association for Palliative Care in the Czech Republic, and the 2nd Paediatric Nursing Association of Europe Congress on Paediatric Nursing held in Scotland. Voluntary sector networks CHAS is involved with key voluntary sector organisations relevant to its work to help maintain standards and follow best practice. In particular, CHAS plays an active part in Together for Short Lives, the Scottish Partnership for Palliative Care, and Help the Hospices, and is a member of the Fundraising Standards Board.

FINANCIAL REVIEW

The Consolidated Statement of Financial Activities shown on page 11 reports total incoming resources of £8.5 million and total outgoing resources of £10.7 million for the year ended 31 March 2013. These totals result in net outgoing resources before other recognised gains and losses of £2.3 million compared with £1.7 million for the previous year. After adjustment for investment gains and actuarial losses, total funds increased by £182,000 to £42.5 million at the end of the financial year. These results are in line with expectations following the introduction of the CHAS Plan 2011-2016. Income continues to be generated from a wide range of sources. The increase in 2012-13 compared with the previous year is mainly attributable to higher legacy income. Total expenditure also rose in 2012-13 reflecting the continued expansion of the services provided by CHAS for children, young people and families. With a strong financial position, CHAS can continue to enhance these vital care services in line with the CHAS Plan. Further details of the results for the financial year are provided below as well as in the Notes to the Accounts.

Voluntary income and activities for generating funds

Thanks to the continued generosity of our supporters in a difficult economic climate, annual income from gifts, donations and community fundraising was maintained at £3.9 million in 2012-13. Legacies continue to be a valuable income source with £2.0 million being recorded for the year. Trading income of £401,000 was generated mainly from donated goods and gift shop sales.

Investment income

Following withdrawals from the investment portfolios during the year to fund developments, income from investments reduced to £870,000 in addition to modest interest receivable of £20,000.

Statutory funding and grant income

Statutory funding and grant income for the year ended 31 March 2013 increased to £1.2 million representing 14.0% of expenditure on charitable activities. Scottish NHS Boards made an increased contribution towards hospice running costs, and funding was received from all 32 Scottish Local Authorities. A further amount was received from the Scottish Government towards the cost of running the CHAS at Home service.

Costs of generating voluntary income and trading

Following the introduction of additional fundraising initiatives in line with the CHAS Plan, costs of generating voluntary income increased to £1.3 million for 2012-13. With increased legacies, the ratio of the costs of generating voluntary income to total voluntary income fell from 23.5% to 22.7%. Reflecting set up costs of an additional three donated goods shops, trading costs rose to £546,000 for 2012-13.

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2013

DIRECTORS’ REPORT (Continued) Charitable activities

The total cost of delivering CHAS care services increased by 10.5% to £8.5 million for 2012-13. The rise above inflation reflects the developments in specialist care being provided to an increasing number of children, young people and their families. Support costs are allocated between charitable activities, costs of generating voluntary income and trading on the basis of staff numbers. Total allocated support costs increased slightly to £1.5 million for the year ended 31 March 2013, mainly as a result of the extra support required for the expanding care services offered by CHAS.

Investments and investment policy

Investments as at 31 March 2013 totalled £26.9 million compared with £27.9 million as at 31 March 2012. During 2012-13, CHAS withdrew £3 million of the capital invested in the portfolios to fund developments in line with the CHAS Plan. Valuation gains of £3.1 million in the remaining investments offset these withdrawals, with the balance of £1.1 million being held in cash contributing to the increased cash at bank and in hand of £4.2 million. Any funds held by CHAS in excess of working capital are invested in higher interest bank accounts or in fixed term deposits. During the year to 31 March 2013, stock markets performed well boosted by the policies of the governments of the major economies. This resulted in significant increases in valuations of global equities as well as modest rises in government and corporate bonds both in the UK and overseas. Two investment management companies invest funds in long term portfolios on behalf of CHAS. The Finance and Audit Committee agrees investment instructions with the managers and regularly monitors portfolio performance against an agreed benchmark. In light of the strategy outlined in the CHAS Plan, the investment policy is regularly reviewed by the Finance and Audit Committee to reflect the requirement for some of the funds to be used to finance developments in the next few years. This requirement is explained further in the reserves section below. The investment instructions and the benchmark were amended early in 2012-13 to reflect expected cash withdrawals and the consequential reduction in the capital invested. Both portfolios were managed to provide total real return over the medium to long term balanced between capital growth and income within a liquid portfolio. When cash deposits held by CHAS are combined with invested funds, the overall risk profile can be classified as low. During 2012-13, the performance of each portfolio exceeded the new benchmark. Our investment approach reflects CHAS’s ability to raise voluntary and other income whilst continuing to develop its services, combined with the desire for longer term capital growth. Previous restrictions continued in that no investment is permitted in derivatives, nor direct investments in companies involved in tobacco or the exploitation of children, nor in investments that are not readily realisable.

The two investment management companies used by CHAS are: ■

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Adam & Company Investment Management Limited, 25 St Andrew Square, Edinburgh EH2 1AF Newton Investment Management Limited, 2 Festival Square, Edinburgh EH3 9SU

For banking services, CHAS principally uses Bank of Scotland, The Mound, Edinburgh EH1 1YZ.

Unrestricted funds and reserves policy Total unrestricted funds increased slightly to £42.3 million as at 31 March 2013. Of this, £12.0 million related to fixed assets, leaving free reserves of £30.3 million which the Directors have designated for future operating costs. The CHAS Plan aims to reach more children, young people and families as well as further enhance and expand the care CHAS provides. Alongside these service development plans are fundraising and retail strategies. The CHAS Plan was developed in the knowledge that CHAS would use some of its free reserves to fund service developments while annual income is gradually increased to cover annual costs. However, CHAS continues to adopt a policy of retaining free reserves to protect it against any future decline in income generated or funds held which could prevent it from fulfilling its strategy for the five years of the CHAS Plan and beyond. Each year, the Finance and Audit Committee reviews the level of free reserves by considering risks associated with income streams, expenditure plans and other balance sheet items including CHAS’s pension commitments. The risks include the likelihood of downturns in the various sources of income, the desire to maintain the service provided to children, young people and families, and a potential significant fall in the value of the investment portfolio. The Directors continue to adopt a policy of managing CHAS’s reserves for the benefit of children, young people and families now and in the future. Consequently, the Directors aim to maintain reserves of at least 18 months of total resources expended for the duration of the CHAS Plan 2011-2016. This policy is reviewed and adjusted annually as appropriate.

GOVERNANCE The Annual Report and Accounts are prepared in accordance with the Statement of Recommended Practice (SORP) ‘Accounting and Reporting by Charities’ published in 2005.

Legal Structure CHAS is a company limited by guarantee of £1 per member and has no share capital. It is registered in Scotland with company number SC136410 and is governed by its Memorandum and Articles of Association dated 28 February 1994.

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2013

DIRECTORS’ REPORT (Continued) CHAS is registered on the Scottish Charity Register under number SC019724. CHAS meets the definition of a charitable company for UK corporation tax purposes. Consequently, there is no liability to taxation on any of its income used for charitable purposes.

Following appointment, each Director follows an induction process and is supplied with details about CHAS and their role as both a Director and a Trustee. Any Director appointed during the year must stand for re‑appointment at the following Annual General Meeting.

CHAS Trading Limited, which is a wholly owned subsidiary of CHAS, operates a number of shops as well as a small online and mail order business, and benefits from a clothes collection partnership.

CHAS Board Directors normally serve no more than eight years, subject to ensuring appropriate succession for key office bearers. Under the Articles, Directors of CHAS are not entitled to any remuneration, but can be reimbursed for expenses incurred in carrying out their duties.

Registered Office

Canal Court, 42 Craiglockhart Avenue, Edinburgh EH14 1LT

Board Meetings

Board of Directors

Full Board meetings are held six times each year to review and agree matters of strategy and principle as well as review performance against agreed plans and budgets.

CHAS is governed by a Board of Directors which is responsible for the overall management of CHAS. For the purposes of charity law, the Directors are Trustees of the charity. Directors who served during the year are listed as follows: Professor Gordon C A Dickson (Chairperson) Dr Mary Ray (Vice-Chairperson) Tabitha K M Bell (retired 30 November 2012) Barry G Cameron Rory R D Farrelly Dr Peter W Fowlie Susan H Green Jack G Lyall George M Reid Ian M Thomson Dr, The Hon. E Claire Walker Kenneth W Wilson

Company Secretary

Moira J McCaig

Board Appointments

Directors are appointed in accordance with the Articles of Association and are recruited for their skills and experience in areas relevant to the activities of CHAS such as parents, nursing, paediatrics, social services, local authorities, finance, business, investment management, legal, risk management, PR/communications, and fundraising. Each Director is expected to contribute those skills to relevant Board Committees described later. When Board positions become vacant, the position is advertised in the press and any professional publications relevant to the skills and experience required. Applications are sought and shortlisted by a sub-group of the Corporate Governance Committee acting as a Nominations Committee. Shortlisted applicants are interviewed by the Nominations Committee. The Chairperson then circulates the details of the recommended applicant/s to the full Board of Directors, and asks for their comments. When a majority of the Board accepts the recommendation, the Chief Executive writes to the applicant/s informing them that they have been offered the position as a Board Director subject to necessary recruitment checks.

A Board performance review process is in operation. This consists of a full Board performance review and individual Directors’ performance reviews, conducted on alternate years. The Chief Executive and Senior Managers attend all Board meetings, but immediately after every second meeting, the Board meets without the Senior Management Team present. This time is not agenda driven and is an opportunity for the Board to discuss general matters and to consider its development as a Board.

Board Committees Responsibility for key areas of activity and policy are delegated to four Committees in accordance with CHAS’s Articles of Association and a Scheme of Delegation adopted by the Board. The Committees normally meet four times each year and minutes of meetings are presented at Board meetings. The current membership of the four Board Committees is set out below: Clinical Governance Committee Dr Mary Ray (Convenor) Rory R D Farrelly Dr Peter W Fowlie Susan H Green Dr, The Hon. E Claire Walker In attendance: Chief Executive Medical Director Directors of Care

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2013

DIRECTORS’ REPORT (Continued) Finance and Audit Committee Ian M Thomson (Convenor) Barry G Cameron George M Reid Kenneth W Wilson

The role of the Planning and Development Committee is to ensure that:

In attendance: Chief Executive Director of Finance and Administration Director of Fundraising and Communications

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major capital projects are managed to ensure the operational effectiveness of buildings and equipment; and CHAS operates its premises in accordance with statutory obligations and best practice in relation to property matters.

Executive Management

Corporate Governance Committee Professor Gordon C A Dickson (Convenor) Barry G Cameron George M Reid

The day to day running of CHAS and the exercise of executive responsibilities are carried out by the Senior Management Team, all of whom attend meetings of the Board and of at least one Board Committee.

In attendance: Chief Executive Director of Organisational Development

Chief Executive

Planning and Development Committee Jack G Lyall (Convenor) Professor Gordon C A Dickson Ian M Thomson Kenneth W Wilson

Dr Patrick J Carragher, Medical Director Libby Gold, Director of Care, Robin House Babs Henderson, Director of Care, CHAS at Home Sue Hogg, Director of Care, Rachel House Moira J McCaig, Director of Finance and Administration Roslyn Neely, Director of Fundraising and Communications Ros Scott, Director of Organisational Development

In attendance: Chief Executive Director of Finance and Administration The Clinical Governance Committee is established to: ■ provide strategic direction to the development of clinical governance within CHAS; ■ ensure the views of children, young people and families are incorporated in all aspects of care development, delivery and review; ■ ensure systems are in place to support the delivery of consistent and high standards of care; and ■ ensure excellence in care is maintained through continuing professional development which includes education and training, clinical supervision, reflective practice and staff appraisal. The Finance and Audit Committee is responsible for ensuring that: ■ robust financial governance and accountability exists throughout CHAS; ■ CHAS is complying with all financial aspects of the law, relevant regulations, and best practice; and ■ CHAS has appropriate controls over managing its assets and maximising its income. The remit of the Corporate Governance Committee is to ensure that: ■ a strategic overview is maintained of the direction and performance of the Board, its Committees and CHAS; ■ key structures, policies and practices are in place to ensure effective management of risk, staff and volunteers; and ■ CHAS is complying with all employment and corporate aspects of the law, relevant regulations, and best practice.

Maria McGill

Senior Managers

Risk Management

The Board is ultimately responsible for the management of risk with detailed review delegated to the Corporate Governance Committee. A Risk Management Plan is submitted to this Committee on a six monthly basis. This Plan is prepared by the Senior Management Team and details risks facing CHAS, rates risks according to likelihood and impact, and records the controls in place and additional actions required to mitigate those risks. The Risk Management Plan is presented to the Board annually. The Directors are satisfied that systems are in place to address and mitigate exposure to major risks. Similar to other charities in the care sector, the risk of a major clinical incident is always present. Consequently, control measures are in place across CHAS’s care services to reduce the likelihood of such an incident, including policies and procedures alongside effective recruitment, training and professional development. Details of these measures are reported to and reviewed by the Clinical Governance Committee. CHAS has a comprehensive set of governance policies which underpin its systems of internal controls and practices. When required, CHAS uses the services of the following solicitors: ■ Brechin Tindal Oatts, 48 St Vincent Street, Glasgow G2 5HS ■ Harper Macleod LLP, The Ca’d’oro, 45 Gordon Street, Glasgow G1 3PE

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2013

DIRECTORS’ REPORT (Continued) Regulation and Standards

DISCLOSURE OF INFORMATION TO AUDITOR

In addition to legislation associated with being a registered company, charity and hospice service, CHAS remains committed to the highest standards of fundraising through its membership of the Fundraising Standards Board. All fundraising staff are members of the Institute of Fundraising and as such abide by the Codes of Conduct and Practice.

The Directors who held office at the date of approval of this Directors’ Report confirm that, so far as they are each aware, there is no relevant audit information of which the charitable company’s auditor is unaware; and each Director has taken all the steps that they ought to have taken as a Director to make themselves aware of any relevant audit information and to establish that the charitable company’s auditor is aware of that information.

STATEMENT OF RESPONSIBILITIES OF THE DIRECTORS OF CHILDREN’S HOSPICE ASSOCIATION SCOTLAND IN RESPECT OF THE DIRECTORS’ REPORT AND THE ACCOUNTS The Directors are responsible for preparing the Directors’ Report and the accounts in accordance with applicable law and regulations. Company law requires the Directors to prepare accounts for each financial year. Under that law they are required to prepare the group and charitable company accounts in accordance with UK Accounting Standards and applicable law (UK Generally Accepted Accounting Practice). Under company law the Directors must not approve the accounts unless they are satisfied that they give a true and fair view of the state of affairs of the group and charitable company and of the group’s excess of expenditure over income for that period. In preparing each of the group and charitable company accounts, the Directors are required to: ■

■

select suitable accounting policies and then apply them consistently; make judgements and estimates that are reasonable and prudent; state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the accounts; and prepare the accounts on a going concern basis unless it is inappropriate to presume that the group and the charitable company will continue its activities.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the charitable company’s transactions and disclose with reasonable accuracy at any time the financial position of the charitable company and enable them to ensure that its accounts comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the group and to prevent and detect fraud and other irregularities. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the charitable company’s website. Legislation in the UK, governing the preparation and dissemination of accounts may differ from legislation in other jurisdictions.

AUDITOR Pursuant to Section 487 of the Companies Act 2006, the auditor will be deemed to be re-appointed and KPMG LLP will therefore continue in office. KPMG LLP is based at Saltire Court, 20 Castle Terrace, Edinburgh EH1 2EG.

ACKNOWLEDGEMENT CHAS is an organisation of which the people of Scotland can be truly proud. Our mission is to care for children, young people and their families and this is at the very heart of all that we do. CHAS is inspired by the challenges we face and also welcomes the opportunities that we will embrace in the future as the sole provider of children’s hospice services in the country. On behalf of the Board of Directors, I would like to extend a huge thank you to all the staff and volunteers who work with and for CHAS. I would also like to take this opportunity to thank the communities, statutory bodies and other friends and partners who continue to support our vital work with some of the most vulnerable children, young people and families in Scotland. In this time of financial uncertainty in our society, the loyal and sustained commitment we continue to receive is genuinely appreciated by all here at CHAS. By order of the Board

Professor Gordon C A Dickson, Chairperson 1 July 2013

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2013

AUDITOR’S REPORT INDEPENDENT AUDITOR’S REPORT TO THE TRUSTEES AND MEMBERS OF CHILDREN’S HOSPICE ASSOCIATION SCOTLAND LIMITED We have audited the accounts of Children’s Hospice Association Scotland for the year ended 31 March 2013 set out on pages 11 to 27. The financial reporting framework that has been applied in their preparation is applicable law and UK Accounting Standards (UK Generally Accepted Accounting Practice). This report is made solely to the charitable company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006, and to the charity’s trustees, as a body, in accordance with section 44 (1)(c) of the Charities and Trustee Investment (Scotland) Act 2005 and regulation 10 of the Charities Accounts (Scotland) Regulations 2006. Our audit work has been undertaken so that we might state to the charitable company’s members and the charity’s trustees those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charity, its members as a body and its trustees as a body, for our audit work, for this report or for the opinions we have formed.

Respective responsibilities of Directors and auditor As explained more fully in the Statement of Directors’ Responsibilities set out on page 9, the Directors (who are also the trustees of the charitable company for the purposes of charity law) are responsible for the preparation of the accounts and for being satisfied that they give a true and fair view. We have been appointed as auditor under section 44 (1)(c) of the Charities and Trustee Investment (Scotland) Act 2005 and under the Companies Act 2006 and report in accordance with regulations made under those Acts. Our responsibility is to audit the accounts in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.

Scope of the audit of the accounts A description of the scope of an audit of accounts is provided on the APB’s website at www.frc.org.uk/auditscopeukprivate

Opinion on accounts In our opinion the accounts: give a true and fair view of the state of the group’s and the charitable company’s affairs as at 31 March 2013 and of the group’s incoming resources and application of resources, including its income and expenditure, for the year then ended; have been properly prepared in accordance with UK Generally Accepted Accounting Practice; and have been prepared in accordance with the Companies Act 2006, the Charities and Trustee Investment (Scotland) Act 2005 and regulation 8 of the Charities Accounts (Scotland) Regulations 2006 (as amended).

Opinion on other matter prescribed by the Companies Act 2006 In our opinion the information in the Directors’ Report for the financial year for which the accounts are prepared is consistent with the accounts.

Matters on which we are required to report by exception We have nothing to report in respect of the following matters where the Companies Act 2006 and the Charities Accounts (Scotland) Regulations 2006 (as amended) require us to report to you if in our opinion: the charitable company has not kept adequate and proper accounting records or returns adequate for our audit have not been received from branches not visited by us; or the charitable company accounts are not in agreement with the accounting records and returns; or certain disclosures of directors’ remuneration specified by law are not made; or we have not received all the information and explanations we require for our audit.

Stephen Reid (Senior Statutory Auditor) for and on behalf of KPMG LLP, Statutory Auditor Chartered Accountants KPMG LLP, Saltire Court, 20 Castle Terrace, Edinburgh EH1 2EG

KPMG LLP is eligible to act as an auditor in terms of section 1212 of the Companies Act 2006 10 July 2013

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2013

Scottish company number SC 136410

CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES (incorporating an income and expenditure account) for the year ended 31 March 2013 Unrestricted Funds £000

Restricted Funds £000

Totals 2013 £000

Totals 2012 £000

3,258 1,576

607 449

3,865 2,025

3,885 1,405

401

530

870 20 83

957 20 121

1,193

1,066

Total incoming resources

6,208

2,249

8,457

7,984

Resources expended Cost of generating funds: Costs of generating voluntary income

(1,338)

(1,244)

Fundraising trading – cost of goods sold and other costs: Shop sales and other trading costs

(546)

(405)

Investment management costs

(110)

(115)

(8,545)

(7,734)

(205)

(199)

Note Incoming resources Incoming resources from generated funds: Voluntary income: Gifts, donations and community fundraising Legacies Activities for generating funds: Shop sales and other trading

Investment income: Income from investments Interest receivable Other income Incoming resources from charitable activities: Statutory funding and grant income

(6,415)

Charitable activities

(205)

Governance costs

(2,130) -

Total resources expended

(8,614)

(2,130)

(10,744)

(9,697)

Net (outgoing)/incoming resources before other recognised gains and losses

(2,406)

119

(2,287)

(1,713)

9 14

5 3,099 (635)

(353) 499 (571)

119

182

(2,138)

Other recognised gains/(losses) Net gains/(losses) on investments – realised – unrealised Actuarial losses on defined benefit pension scheme Net movement in funds Reconciliation of funds Funds brought forward

42,266

42,312

44,450

Funds carried forward

42,329

165

42,494

42,312

All the above results are derived from continuing activities. All gains and losses recognised in the year are included above. The net loss for the year for Companies Act purposes comprises the net outgoing resources for the year plus the realised gains on investments and was £2,282,000. All of the net income arises in the Charity. As permitted by section 408 of the Companies Act 2006, a statement of financial activities for the charitable company is not presented. Net outgoing resources dealt with in the accounts of the charitable company for the year ended 31 March 2013 amounted to £2,140,000 (2012-£1,713,000).

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2013

Scottish company number SC 136410

BALANCE SHEETS as at 31 March 2013

Note Fixed assets Tangible assets Investments Investment in subsidiary

Group 2013 £000

2012 £000

Company 2013 £000

2012 £000

12,021 26,884 –

12,029 27,861 –

11,978 26,884 –

12,031 27,861 –

38,905

39,890

38,862

39,892

37 363 4,211

38 248 2,558

– 583 4,186

– 326 2,522

4,611

2,844

4,769

2,848

(617)

(671)

(539)

(631)

3,994

2,173

4,230

2,217

42,899

42,063

43,092

42,109

(405)

249

(405)

249

42,494

42,312

42,687

42,358

165

Unrestricted funds General funds Designated funds

– 42,734

– 42,017

– 42,927

– 42,063

Unrestricted income funds excluding pension reserve

42,734

42,017

42,927

42,063

Current assets Stock Debtors Cash at bank and in hand

Creditors Amounts falling due within one year

8 9 15

Net current assets

Net assets excluding pension (deficit)/surplus Defined benefit pension scheme (deficit)/surplus

Net assets including pension (deficit)/surplus The funds of the charity: Restricted income funds

(405)

249

(405)

249

Pension reserve

Total unrestricted funds

42,329

42,266

42,522

42,312

Total funds

42,494

42,312

42,687

42,358

Approved by the Directors on 1 July 2013 Professor Gordon C A Dickson, Chairperson

The notes on pages 14 to 27 form part of these accounts.

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2013

Scottish company number SC 136410

CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 March 2013

£000 Net cash outflow from operating activities (i) Returns on investments and servicing of finance Income from investments Interest received

£000

2012 £000 (2,473)

(2,835)

957 23

870 20

Net cash inflow from returns on investments and servicing of finance Capital expenditure and financial investment Payments to acquire tangible fixed assets Receipts from disposal of tangible fixed assets Investments purchased Investments disposed

2013 £000

980

890 (377) 4 (3,777) 4,706

(488) 5 (2,549) 6,630

Net cash inflow from investing activities

3,598

556

Increase/(decrease) in cash and cash equivalents (ii)

1,653

(937)

(i) Reconciliation of net outgoing resources to the net cash outflow from operating activities 2013 £000

2012 £000

Net outgoing resources for the year Depreciation charge Pension deficit/surplus movement Actuarial losses on defined benefit pension scheme Loss on disposal of tangible fixed assets Interest receivable and investment income Decrease in stock Increase in debtors (Decrease)/increase in creditors

(2,287) 494 654 (635) 1 (890) 1 (120) (53)

(1,713) 447 189 (571) 6 (977) 14 (24) 156

Net cash outflow from operating activities

(2,835)

(2,473)

(ii) Analysis of net funds 2013 £000

2012 £000

Cash balances at beginning of year Increase/(decrease) in the year

2,558 1,653

3,495 (937)

Cash balances at end of year

4,211

2,558

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2013

NOTES TO THE ACCOUNTS 1 Accounting policies The following accounting policies have been applied consistently in dealing with items which are considered material to the accounts. (a) Basis of preparation The accounts have been prepared under the historical cost convention, with the exception of investments which are included at market value. The accounts have been prepared in accordance with the Companies Act 2006, the Statement of Recommended Practice (SORP) ‘Accounting and Reporting by Charities’ published in February 2005, and applicable accounting standards. The statement of financial activities (‘SOFA’) and balance sheet consolidate the accounts of Children’s Hospice Association Scotland (‘the Charity’) and its subsidiary undertaking. The results of the subsidiary are consolidated on a line by line basis. The Charity has availed itself of the provisions of Companies Act 2006 and adapted the statutory formats to reflect the special nature of the Charity’s activities. No separate SOFA has been presented for the Charity alone as permitted by Section 408 of the Companies Act 2006 and paragraph 304 of the SORP. (b) Company status The Charity is a company limited by guarantee and is registered as a Scottish charity with the Office of the Scottish Charity Regulator under number SC019724. The Charity is considered to pass the tests set out in Paragraph 1 Schedule 6 Finance Act 2010 and therefore it meets the definition of a charitable company for UK corporation tax purposes. Accordingly, the charity is potentially exempt from taxation in respect of income or capital gains received within categories covered by Chapter 3 Part 11 Corporation Tax Act 2010 or Section 256 of the Taxation of Chargeable Gains Act 1992, to the extent that such income or gains are applied exclusively to charitable purposes. (c) Fund accounting Unrestricted funds are either general or designated. General funds are available for use at the discretion of the Directors in furtherance of the general objectives of the Charity and which have not been designated for another purpose. Designated funds are those set aside for particular purposes. The aim and use of each designated fund is set out in the notes to the accounts.

Restricted funds are those to be used in accordance with specific instructions imposed by donors or which have been raised by the Charity for particular purposes. The aim and use of each restricted fund is set out in the notes to the accounts where material. Transfers are made between funds on a periodic basis. (d) Incoming resources All incoming resources are included in the SOFA when the Charity is legally entitled to the income and the amount can be quantified with reasonable accuracy. Legacy income is recognised only when there is sufficient evidence of each individual case to provide the necessary certainty that the legacy will be received and the value of the incoming resources can be measured with sufficient reliability. Income from shop sales is recognised at the point of sale, which is generally on the receipt of cash. All profits earned by the subsidiary company in the year are paid to the Charity by deed of covenant. (e) Gifts in kind Assets given for use by the Charity are included in income when receivable at a reasonable estimate of their value to the Charity. No monetary value is attributed to human resource secondments to the Charity or to services donated by volunteers. (f) Resources expended All expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all costs related to the category. Where costs cannot be directly attributed to particular headings, they have been allocated to activities on a basis consistent with use of the resources. Costs of generating funds include the costs incurred in generating voluntary income, fundraising trading costs and investment management costs. These costs are regarded as necessary to generate funds that are needed to finance charitable activities. Charitable activities expenditure enables the Charity to meet its charitable aims and objectives. Governance costs are associated with the strategic planning and management of the Charity and reflect an element of the costs of the office of the Chief Executive and members of senior management. They also include professional advice for the Directors, audit fees and Directors’ expenses. Support costs are those which enable fundraising and charitable activities to be undertaken. Notes 4 and 5 give further information on what support costs include and the basis of apportionment to cost categories.

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2013

NOTES TO THE ACCOUNTS 1 Accounting policies (continued) (g) Value Added Tax The Charity is not registered for Value Added Tax and accordingly expenditure for the parent company includes VAT where appropriate. The subsidiary company is registered for VAT and is able to reclaim VAT on its expenditure. (h) Fixed assets Tangible fixed assets with a cost greater than £500 are capitalised at cost and are depreciated in equal annual instalments over their estimated useful lives as follows: Property Short leasehold Motor vehicles Hospice equipment – Kitchen – Care Computer equipment Furniture and fittings

50 years 5 years or period of lease if shorter 3 years 5 years 7 years 3 years 10 years

(i) Investments Fixed asset investments are stated at stock market valuation. Unrealised gains and losses represent the difference between the market value at the beginning and end of the financial year. Disposals are either measured at cost (if bought in the year) or at market value at the beginning of the financial year if bought in a prior year. Realised gains and losses represent the difference between the proceeds and either the cost or the market value at the beginning of the financial year depending on when the investments were bought. (j) Stock Stocks of goods purchased for resale are stated at the lower of cost and net realisable value. Stocks of donated assets are not valued. (k) Operating lease rental Rentals payable in respect of an operating lease are charged in the statement of financial activities for the period to which they relate. (l) Pensions Post-retirement benefits – Lothian Pension Fund The Charity participates in the Lothian Pension Fund, a pension scheme providing benefits based on final pensionable pay, on behalf of certain employees. The assets of the scheme are held separately from those of the Charity and its subsidiary company.

Pension scheme assets are measured using market values. Pension scheme liabilities are measured using a projected unit method and discounted at the current rate of return on a high quality corporate bond of equivalent term and currency to the liability. The pension scheme surplus (to the extent that it is considered recoverable) or deficit is recognised in full. The movement in the scheme surplus/deficit is split between other income, resources expended, and actuarial gains and losses on defined benefit pension scheme in the statement of financial activities. Post-retirement benefits – National Health Service Superannuation Scheme (Scotland) The National Health Service Superannuation Scheme (Scotland) is a multi-employer scheme where the share of the assets and liabilities applicable to each employer is not identified. The Charity therefore accounts for its pension costs to this scheme on a defined contribution basis as permitted by FRS 17. Personal pension contributions Where an employee is ineligible for membership of either the Lothian Pension Fund or the National Health Service Superannuation Scheme (Scotland), the Charity contributes to a personal pension plan for that employee. These contributions are accounted for on a defined contribution basis in accordance with FRS 17. The amounts charged as resources expended represent contributions payable to those plans in respect of the accounting year.

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2013

NOTES TO THE ACCOUNTS 2 Incoming resources from charitable activities 2013 £000

2012 £000

Statutory funding and grant income Scottish NHS Boards – for operation of Rachel House and Robin House

637

631

Scottish Local Authorities: – Operation of Rachel House and Robin House current year – Operation of Rachel House and Robin House previous years

529 -

375 33

1,193

1,066

Scottish Government – for CHAS at Home

3 Income from trading company subsidiary The Charity has one wholly owned subsidiary, CHAS Trading Limited (further details are given in note 15). A summary of its results is shown below and audited accounts will be filed with the Registrar of Companies. CHAS Trading Limited reported a loss for the year ended 31 March 2013. The loss was mainly attributable to delays and set up costs associated with the opening of new shops. It is anticipated that CHAS Trading Limited will generate profits in future years. All profits earned by the subsidiary are covenanted to the Charity.

Gift and charity shops

Income £000

Expenditure £000

Profit/(Loss) £000

2012 £000

401

(548)

(147)

124

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2013

NOTES TO THE ACCOUNTS 4 Resources expended

Direct costs £000

Support costs £000

Total £000

2012 £000

Cost of generating funds Costs of generating voluntary income Shop sales and other trading Investment management costs

1,195 477 110

143 69 -

1,338 546 110

1,244 405 115

Charitable activities

7,490

1,055

8,545

7,734

205

199

9,272

1,472

10,744

9,697

Governance costs

The activities underlying the costs above, under each heading are: Costs of raising voluntary income – promoting the awareness of the Charity and its work to create the income flow needed to support the Charity’s activities. Costs of shop sales and other trading – operating gift and charity shops, mail order, clothes collection partnership, and online sales to create additional income flow needed to support the Charity’s activities. Charitable activities – providing children’s hospice services and supporting the whole family throughout Scotland. Governance costs – expenditure incurred in providing strategic planning and management as well as the costs of professional advice for the Directors, audit fees and Directors’ expenses.

5 Allocation of support costs

Activity Central management and administration

Costs of generating voluntary income £000

Shop sales and other trading £000

Charitable activities £000

Governance £000

Total £000

2012 £000

143

1,055

205

1,472

1,421

Central management and administration are the support departments which enable the activities set out above to be carried out. The support departments include senior management, public relations, finance, IT, property, human resources, voluntary services management as well as general administration. The governance costs are allocated first and these reflect the costs of strategic planning and management as well as the costs of professional advice for the Directors, audit fees and Directors’ expenses. The balance of the support costs has been apportioned on the basis of staff numbers.

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2013

NOTES TO THE ACCOUNTS 6 Staff costs

Salaries Social security costs Pensions

2013 £000

2012 £000

6,874 537 768

6,260 482 682

8,179

7,424

The number of employees whose emoluments as defined for taxation purposes amounted to over £60,000 in the year was as follows: 2013 Number

2012 Number

1 1 1 1

1 1 1 -

£60,001 – £70,000 £80,001 – £90,000 £90,001 – £100,000 £110,001 – £120,000 £120,001 – £130,000

For the above employees, £40,542 in total (2012-£41,440 for three employees) was paid to the National Health Service Superannuation Scheme for Scotland and Lothian Pension Fund. By the end of the year the number of employees was 268 (2012-243). In addition, there were 830 volunteers at no cost to CHAS. The average number of employees was 256, of whom 70 (44 full-time equivalent) were part-time. 7 Net outgoing resources This is stated after charging:

Auditor’s remuneration: – Audit of these accounts Amounts receivable by auditor and associates in respect of: – Audit of accounts of subsidiaries pursuant to legislation – All other services Indemnity insurance for Directors Operating lease rentals – land and buildings

2013 £000

2012 £000

2 – 2 175

2 – 2 173

No remuneration was paid to the Directors in respect of their services to the Charity (2012-Nil). Travel expenses totalling £1,191 were reimbursed to four Directors (2012-£978 to two Directors).

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2013

NOTES TO THE ACCOUNTS 8 Tangible fixed assets Freehold land and buildings £000

Short leasehold £000

Motor vehicles £000

Hospice equipment £000

Computer equipment £000

Furniture and fittings £000

Total £000

Cost at beginning of year Additions Disposals

13,739 50 -

176 41 -

225 107 -

450 135 (5)

469 84 (42)

452 71 (5)

15,511 488 (52)

Cost at end of year

13,789

217

332

580

511

518

15,947

Accumulated depreciation at beginning of year Charge for year Disposals

2,354 276 -

148 15 -

182 36 -

212 60 (4)

366 61 (41)

220 46 (5)

3,482 494 (50)

Accumulated depreciation at end of year

2,630

163

218

268

386

261

3,926

Net book value at 31 March 2013

11,159

114

312

125

257

12,021

Net book value at 31 March 2012

11,385

238

103

232

12,029

Group

The purposes for which the tangible fixed assets held for charity use at 31 March 2013 were as follows:

Hospice services Fundraising, management and administration

Freehold land and buildings £000

Short leasehold £000

Motor vehicles £000

Hospice equipment £000

Computer equipment £000

Furniture and fittings £000

Total £000

10,936

114

312

226

11,623

223

398

11,159

114

312

125

257

12,021

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2013

NOTES TO THE ACCOUNTS 8 Tangible fixed assets (continued) Freehold land and buildings £000

Short leasehold £000

Motor vehicles £000

Hospice equipment £000

Computer equipment £000

Furniture and fittings £000

Total £000

Cost at beginning of year Additions Disposals

13,774 48 -

169 -

225 107 -

450 135 (5)

442 73 (42)

443 68 (5)

15,503 431 (52)

Cost at end of year

13,822

169

332

580

473

506

15,882

Accumulated depreciation at beginning of year Charge for year Disposals

2,354 275 -

146 13 -

182 36 -

212 60 (4)

358 53 (41)

220 45 (5)

3,472 482 (50)

Accumulated depreciation at end of year

2,629

159

218

268

370

260

3,904

Net book value at 31 March 2013

11,193

114

312

103

246

11,978

Net book value at 31 March 2012

11,420

238

223

12,031

Company

The purposes for which the tangible fixed assets held for charity use at 31 March 2013 were as follows:

Hospice services Fundraising, management and administration

Freehold land and buildings £000

Short leasehold £000

Motor vehicles £000

Hospice equipment £000

Computer equipment £000

Furniture and fittings £000

Total £000

10,983

114

312

226

11,670

210

308

11,193

114

312

103

246

11,978

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2013

NOTES TO THE ACCOUNTS 9 Fixed asset investments 2013 £000

2012 £000

27,861 2,549 (6,625)

28,791 3,961 (5,390)

23,785

27,362

3,099

499

Market value at end of year

26,884

27,861

Historical cost at end of year

19,928

22,932

Group and Company Quoted investments at market value at beginning of year Additions during year Disposals during year

Net unrealised gains

2013 £000

2012 £000

UK equities Investment and unit trusts Overseas equities

11,720 7,204 3,070

43.6 26.8 11.4

12,902 7,088 2,654

46.4 25.4 9.5

Fixed interest securities UK debentures and loan stocks

21,994 3,136 1,754

81.8 11.7 6.5

22,644 3,969 1,248

81.3 14.2 4.5

Total managed portfolio

26,884

100.0

27,861

100.0

Fixed asset investments are represented by:

There are no individual investments which represent more than 5% of the Charity’s investments.

10 Debtors

Taxation refunds VAT Prepayments and interest receivable Amounts due from CHAS Trading Limited (note 15) Scottish Local Authority grants due Sundry debtors Legacies receivable

Group 2013 £000

Group 2012 £000

Company 2013 £000

Company 2012 £000

13 2 119 – 23 65 141

15 – 131 – 18 81 3

13 – 113 243 23 50 141

15 – 131 97 18 62 3

363

248

583

326

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2013

NOTES TO THE ACCOUNTS 11 Creditors: amounts falling due within one year

Accruals and sundry creditors VAT and NI/PAYE payable Amounts due to CHAS Trading Limited (note 15)

Group 2013 £000

Group 2012 £000

Company 2013 £000

Company 2012 £000

458 159 –

493 178 –

379 159 1

477 145 9

617

671

539

631

12 Statement of funds As at Transfers 31 March 2013 £000 £000

As at 1 April 2012 £000

Incoming resources £000

Resources expended £000

Investment/ other gains £000

–

6,208

(8,614)

–

2,406

–

12,029

–

(8)

12,021

30,237

–

2,469

(2,398)

30,308

Total unrestricted funds

42,266

6,208

(8,614)

2,469

–

42,329

Restricted funds Robin House Rachel House Service Development CHAS at Home Scottish NHS Boards Scottish Local Authorities Scottish Government

13 6 26 1 – – –

363 593 42 58 637 529 27

(312) (552) (35) (38) (637) (529) (27)

– – – – – – –

64 47 33 21 – – –

Total restricted funds

2,249

(2,130)

–

165

42,312

8,457

(10,744)

2,469

–

42,494

Group

General reserve Designated funds Fixed Asset Fund Invested for future operating costs

Total funds

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2013

NOTES TO THE ACCOUNTS 12 Statement of funds (continued) As at Transfers 31 March 2013 £000 £000

As at 1 April 2012 £000

Incoming resources £000

Resources expended £000

Investment/ other gains £000

–

5,807

(8,066)

–

2,259

–

12,031

–

(53)

11,978

30,281

–

2,469

(2,206)

30,544

Total unrestricted funds

42,312

5,807

(8,066)

2,469

–

42,522

Restricted funds Robin House Rachel House Service Development CHAS at Home Scottish NHS Boards Scottish Local Authorities Scottish Government

13 6 26 1 – – –

363 593 42 58 637 529 27

(312) (552) (35) (38) (637) (529) (27)

– – – – – – –

64 47 33 21 – – –

Total restricted funds

2,249

(2,130)

–

165

42,358

8,056

(10,196)

2,469

–

42,687

Company

General reserve Designated funds Fixed Asset Fund Invested for future operating costs

Total funds

The General Reserve represents the free funds of the Charity to the extent that they have not been designated for particular purposes. The Fixed Asset Fund has been set up to assist in identifying those funds which are not free funds and it represents the net book value of tangible fixed assets. The funds invested for future operating costs are designated by the Directors in line with the policy of retaining free reserves to protect CHAS against any future decline in income which could prevent it from fulfilling its strategy. Restricted funds as at 31 March 2013 for Robin House, Rachel House, Service Development and CHAS at Home shown above relate to specific expenditure yet to be incurred. Income in the year relates to legacies and gifts. Scottish NHS Boards and Scottish Local Authorities contributed to the funding of the operating costs for the year ended 31 March 2013 of both Rachel House and Robin House. The Scottish Government currently contributes £27,000 per annum in respect of CHAS at Home costs.

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2013

NOTES TO THE ACCOUNTS 13 Analysis of group net assets between funds

Restricted Funds £000

Designated Funds £000

Fund balances at 31 March 2013 are represented by: Tangible fixed assets Investments Current assets Current liabilities

– – 165 –

12,021 26,884 4,446 (617)

12,021 26,884 4,611 (617)

Total net assets excluding pension surplus

165

42,734

42,899

Total £000

14 Pension schemes Lothian Pension Fund The Charity participates in the Lothian Pension Fund, a pension scheme providing benefits based on final pensionable pay. The information disclosed below is in respect of the Charity’s share of the assets and liabilities of the whole scheme under an agreed policy throughout the years shown. The assumptions used by the Charity, as disclosed below, were recommended by independent actuaries for application, approved by Lothian Pension Fund and adopted by the Directors.

Fair value of assets attributed to the Charity Present value of defined benefit obligation attributed to the Charity Net (deficit)/surplus recognised as an asset in the balance sheet

2013 £000

2012 £000

8,824 (9,229)

7,003 (6,754)

(405)

249

Changes in the present value of the defined benefit obligation attributed to the Charity are as follows: 2013 £000

2012 £000

Opening defined benefit obligation attributed to the Charity Current service cost Interest cost Contributions paid by members Actuarial losses Estimated benefits paid

6,754 633 343 224 1,350 (75)

5,160 484 301 203 672 (66)

Closing defined benefit obligation attributed to the Charity

9,229

6,754

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2013

NOTES TO THE ACCOUNTS 14 Pension schemes (continued) Changes in the fair value of assets attributed to the Charity are as follows: 2013 £000

2012 £000

Opening fair value of assets attributed to the Charity Expected return on assets attributed to the Charity Contributions paid by members Contributions paid by the Charity Actuarial gains Estimated benefits paid

7,003 426 224 531 715 (75)

5,598 422 203 745 101 (66)

Closing fair value of assets attributed to the Charity

8,824

7,003

2013 £000

2012 £000

633 343 (426)

484 301 (422)

550

363

1,144

128

The amounts recognised in the statement of financial activities are as follows:

Current service cost Interest cost Expected return on assets attributed to the Charity

Actual return on assets attributed to the Charity

The amounts recognised in the other recognised gains and losses section of the statement of financial activities are as follows:

Actuarial losses

2013 £000

2012 £000

635

571

The fair value of the scheme’s assets attributed to the Charity, which are not intended to be realised in the short term and may be subject to significant change before they are realised, and the present value of the scheme’s liabilities, which are derived from cash flow projections over long periods and thus inherently uncertain, were:

Equities Bonds Property Cash Fair value of assets attributed to the Charity Present value of defined benefit obligation attributed to the Charity Net (deficit)/surplus recognised as an asset in the balance sheet

2013 £000

2012 £000

6,971 706 794 353

5,533 560 770 140

8,824 (9,229)

7,003 (6,754)

(405)

249

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2013

NOTES TO THE ACCOUNTS 14 Pension schemes (continued) The major assumptions used in this valuation were:

Rate of increase in salaries (1.0% per annum until 31 March 2015) Rate of increase in pensions in payment and deferred pensions Discount rate applied to scheme liabilities Expected return on assets

2013 £000

2012 £000

5.1% 2.8% 4.5% 5.3%

4.8% 2.5% 4.8% 5.8%

Life expectancy is based on the PFA92 and PMA92 year of birth tables. Based on these assumptions, the average future life expectancies at age 65 are summarised below: Male 20.4 years 22.6 years

Current pensioners Future pensioners

Female 22.8 years 25.4 years

The assumptions used by the actuary are chosen from a range of possible actuarial assumptions which, due to the timescale covered, may not necessarily be borne out in practice. The history of the scheme is as follows:

Fair value of assets attributed to the Charity Present value of defined benefit obligation attributed to the Charity (Deficit)/surplus Experience adjustments on assets Experience adjustments on liabilities

2013 £000

2012 £000

2011 £000

2010 £000

2009 £000

8,824

7,003

5,598

4,573

2,900

(9,229) (405) 715 5

(6,754) 249 101 (445)

(5,160) 438 (91) –

(5,398) (825) 887 –

(2,606) 294 (820) 89

It is estimated that the Charity will contribute £534,000 to this defined benefit scheme in the year ending 31 March 2014. National Health Service Superannuation Scheme (Scotland) The National Health Service Superannuation Scheme (Scotland) is a multi-employer scheme where the share of the assets and liabilities applicable to each employer is not identified. The Charity will therefore account for its pension costs to this scheme on a defined contribution basis as permitted by Financial Reporting Standard 17. The Government Actuary’s Department has assessed the scheme deficit at 31 March 2012 at £25.3 billion. As a result of this deficit, contributions are likely to remain in excess of current service costs. In the year ended 31 March 2013, normal employer contributions of £288,000 were payable to the Scottish Public Pensions Agency (2012- £258,000) at the rate of 13.5% of pensionable salaries (2012-13.5%). Members pay between 5% and 10.9%. The Scottish Government has, however, refunded the Charity employer contributions totalling £50,000 (2012- £58,000) in respect of increased employer contributions for those employees in post as at 1 April 2004.

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2013

NOTES TO THE ACCOUNTS 15 Subsidiary company The Charity has a wholly owned subsidiary, CHAS Trading Limited, which operates gift and charity shops and a clothes collection partnership as well as a mail order and online sales operation. A Deed of Covenant exists by which all annual profits generated by CHAS Trading Limited are covenanted to the Charity. There was no profit covenanted to the Charity from CHAS Trading Limited in 2013 (2012-£124,000). The net assets of CHAS Trading Limited at 31 March 2013 were: £000 Fixed assets

Stocks Debtors Cash at bank

37 24 25

Total current assets

Creditors: amounts falling due within one year

(322)

Net current liabilities

(236)

Total assets less current liabilities

(147)

Included in debtors is an amount of £1,000 (2012- £9,000) due from the Charity. In creditors there is an amount of £243,000 (2012- £97,000) due to the Charity.

16 Commitments Annual commitments under non-cancellable operating leases are as follows: 2013 £000

2012 £000

14 56 160

– 37 135

230

172

Land and buildings Operating leases which expire: Within one year In the second to fifth years inclusive In over five years

CHAS Head Office Canal Court, 42 Craiglockhart Avenue, Edinburgh, EH14 1LT tel: 0131 444 1900 email: info@chas.org.uk

www.chas.org.uk

f Scottish company number SC 136410 Scottish charity number SC 019724 Front Cover Photo: RobMcDougall.com