CHAS Annual Report and Acounts 2014-15 by Gemma Smith

Annual Report and Accounts 2014-15 f

2014-15 For the year ended 31 March 2015 Scottish company number SC 136410

Scottish charity number SC 019724

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2015

2014-15 ANNUAL REPORT The Directors are pleased to present the Annual Report and Accounts of Children’s Hospice Association Scotland (CHAS) for the year ended 31 March 2015. The Annual Report and Accounts are prepared in accordance with the Statement of Recommended Practice (SORP) ‘Accounting and Reporting by Charities’ published in 2005 and the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013.

ABOUT CHAS CHAS is Scotland’s only children’s hospice service providing care and support for babies, children and young people with life-shortening conditions. Our role as a charity is threefold: ■ We provide care through our two hospices – Rachel House in Kinross and Robin House in Balloch – and also through CHAS at Home which has teams working from Rachel House and Robin House as well as dedicated teams in Aberdeen and Inverness, caring for families in their own homes when they need it most. ■

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We generate support for our work through year-round fundraising to secure the funds needed every year to run our services. We make connections between families, health and social care professionals, the media, supporters and influencers to raise awareness of our work and promote joined up service provision for families.

We support the whole family, as and when they need it, throughout their journey from referral to bereavement. The services we offer can be in one of our purpose built hospices, in the family home or in a hospital setting. Each of our children’s hospices can accommodate up to eight individuals and their families, for planned or emergency visits. Our CHAS at Home service covers the whole of Scotland offering nursing care in the family home to give families a break from caring for their child. Children and young people with palliative care needs are offered the opportunity to be cared for, respected and nurtured as individuals and with their family in an environment which offers rest and recuperation from the demands of caring. We support their choice of lifeenriching opportunities, helping the child and his or her siblings to live life to the full, creating shared experiences and treasured memories. As a registered charity, our services are funded predominantly through the generosity of supporters across Scotland and beyond. Statutory funders contribute towards the running costs of the hospices and particular services, plus we receive funding for specific projects and developments from trusts and foundations.

OBJECTIVES AND FUTURE PLANS The CHAS Plan 2011-2016 sets out the current aspirations for our development. It was developed in consultation with families, young people, staff and volunteers and is in line with national policy. The full plan is available as a separate publication. The information provided below is a summary of its key elements. Core Value, Vision and Purpose 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.

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2015

ANNUAL REPORT (Continued) 2014-15 Activities and Performance

Specialist and advanced practitioner roles for nurses are something that we see as an important future development. A number of our nurses and our pharmacist have already gained the non-medical prescribing qualification which means that they have the skills to prescribe medicines to support the work of the medical team and enhance the provision of safe, effective and person-centred care to children and young people.

End of life care and support was provided for the 66 children and young people who died, whether in one of our hospices, at home, or in hospital. We continued to offer a range of bespoke bereavement services to those families whose child has died.

More children and young people are being referred to CHAS for end of life care, and families are asking for more care at home, particularly as their child approaches the end of life. CHAS therefore needs to have a clinical team who can continue to respond safely to these needs while maintaining the ethos of the homely environment that the families cherish.

In the year, we delivered our specialist services to a total of 386 children and young people. In doing this, we provided almost 10,000 bed nights at Rachel House and Robin House for the whole family, plus CHAS at Home carried out over 1,000 home care visits across Scotland. We also made numerous other outreach visits, meetings and phone calls with families and professionals.

A number of key developments progressed in year four of the CHAS Plan. The highlights of the year are described below under key strategic priorities. Extending reach Our three Diana Children’s Nurses have all been in post for almost a year. These specialist nurses are employed by CHAS and work predominantly in the hospital and community setting supporting children and young people with palliative care needs and their families. All three Diana Children’s Nurses have established themselves in their respective NHS sites and are promoting earlier recognition of palliative care needs as well as establishing their new roles within their area of clinical expertise. They work closely with the CHAS nursing teams and NHS colleagues in addition to developing effective relationships with key stakeholders. These posts are enabling us to reach more children, provide those children with more choice as to where and how to be cared for, and educate and support other professionals working in hospitals and the community. We are already seeing a significant increase in referrals of neonates and children with cancer to our services. CHAS at Home continued to expand its services and cared for 130 families across Scotland in their own homes. The Family Support team also visited families throughout Scotland and held remembering events for bereaved families including a candlelight service in Bridge of Allan Parish Church during December. Improving quality care Following a comprehensive review of our nurse staffing requirements to address the increasingly complex clinical care we provide to children and young people, we introduced a new nursing structure during 2014-15. This has resulted in the recruitment of more qualified children’s nurses as well as the creation of new roles including charge nurses, senior staff nurses and practice educators. We have also continued to review the staffing needs for our senior medical team. In partnership with NHS Lothian, the new post of consultant paediatrician has been created and will be joining our team from July 2015.

Our new Clinical Effectiveness team is supporting the work of the nursing teams to sustain and further develop the specialist skills required to provide excellent, evidence based palliative care to children and young people. The team is leading a review of all clinical policies, procedures and guidelines and is using quality improvement models to ensure systems and processes are safe, efficient and effective. Rachel House and Robin House are regulated by Healthcare Improvement Scotland (HIS) and CHAS at Home is regulated by the Care Inspectorate. HIS inspectors carried out unannounced inspections of both Rachel House and Robin House at the end of 2014. Both Hospices received very positive reports and were praised for continuing to offer a high quality service which was appreciated and commended by children, young people and families. The inspectors had talked to families who said how much they valued the care and support provided at the hospices. CHAS at Home also received a positive inspection which includes quotes from families which underline the positive difference CHAS makes to families through this service. Empowering young people Our new Transition team is helping young people aged 21 and over to move from CHAS services to age appropriate care within adult services. The team is working alongside each young person and their family, as well as with relevant statutory and voluntary agencies, to help them find an individual care package that best supports their needs. We were successful in an application to the Big Lottery Fund for the cost of our Transition service. Since their appointment, the team has been supporting individuals and families to identify their aspirations, wishes and goals, using person-centred approaches. Individual action plans are being developed and these will be the focus of the team’s activity with young people and their families. Already there have been successes in individual transitions. Our team has also spent time mapping local services and provisions, developing links with all Local Authorities, NHS Boards and communities.

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2015

ANNUAL REPORT (Continued) Evidencing practice We demonstrate our commitment to evidence based practice in children and young people’s palliative care through a structured programme of learning, research and development. This area of work is co-ordinated and supported internally by our Evaluation, Audit and Research group. In 2014, the University of York started an 18 month research project entitled ‘Children in Scotland requiring Palliative Care: identifying numbers and needs’ (ChiSP). This project was commissioned by CHAS and funded by the Scottish Government through the Managed Service Network for Children and Young People with Cancer. Its findings will provide vital information to help the Scottish Government, CHAS and key partners to scope and plan essential services to meet the needs of the children and young people in Scotland with palliative care needs. It is due to report in November 2015. The University of Dundee has completed the research project funded by CHAS called ‘Multiple and Multi-dimensional transitions: Understanding the life transitions of young adults cared for by CHAS and the impact on their parents, siblings and professionals’. The results are being reported in June 2015 and are being anticipated around the UK. We are also actively involved in a project with the University of Surrey on the development of an e-supportive care system to support children and young people with complex health care needs and their families to stay at home. We continue to have success with conference abstracts, posters and verbal presentations being accepted for various conferences in the UK and internationally. In addition to presentations in Edinburgh, Rome and Montreal, we recently delivered three presentations at the 14th World Congress of the European Association for Palliative Care in Copenhagen with around 2,800 delegates. Working in partnership CHAS is committed to collaborating with other organisations to enhance the palliative care services available to children, young people and their families in Scotland. Examples include: ■ providing ‘Sleep Tight’ overnight care at end of life with the Royal Hospital for Sick Children in Glasgow (RHSC) funded by the Emma Cameron Foundation ■ delivering the ‘Rest Assured’ home service for end of life care with Marie Curie aimed at young people aged 16 years and over ■ developing a framework to offer 24 hour home care and support at end of life with NHS Lothian and NHS Fife children’s community nursing teams ■ working with NHS Lothian on the development of a National Anticipatory Care Plan which helps to capture the hopes, wishes and care needs of children and young people and their families facing a life-shortening condition

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seconding a CHAS nurse to a newly created two year Palliative Care Nurse Specialist post at RHSC in Glasgow creating a secondment in Robin House for a nurse from RHSC co-authoring a new Neonatal Care Pathway which has been launched through the Neonatal Managed Clinical Network

We continued to play an active part in key third sector organisations and other groups relevant to our work such as Together for Short Lives, Association for Paediatric Palliative Medicine, Hospice UK, Scottish Partnership for Palliative Care, Scottish Government’s Palliative and End of Life Care National Advisory Group, Scottish Children and Young People’s Palliative Care Executive, Scottish Children and Young People Palliative Care Network, and Children in Scotland. Encouraging creativity Providing opportunities for fun, play and enjoyment, alongside palliative and end of life care is a core part of our service as we understand their importance even against a background of serious life-shortening illness. In addition to the daily creativity of the CHAS specialist activities team, children, young people and families enjoy regular visits from Nordoff Robbins music therapists, RSNO, Scottish Opera, Therapets, Zoolabs and the Clowndoctors. We also offer a busy programme of trips to fun attractions such as Blair Drummond Safari Park, cinemas, theatres, parks and beaches. Highlights over the past year included: ■ the Queen’s Baton Relay visiting Robin House while we hosted a sports day party in the garden for the 2014 Commonwealth Games ■ a comedy and music festival being held over a weekend at Rachel House ■ miniature ponies visiting Robin House to allow children to groom and pet them ■ staff from Indepen-dance delivering music, dance and movement workshops in Robin House ■ a local falconry expert bringing a Harry Potter snowy owl to see the children at Rachel House on Christmas Day ■ the charity Lifelites gifting us new specialist equipment with eyegaze technology and sensory apps, together with training for staff, enabling all children and young people to enjoy fun and interactive computer games ■ Edinburgh Zoo hosting an amazing day where several families had exclusive, behinds the scenes access to the zoo, making toys for the pandas

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2015

ANNUAL REPORT (Continued) Enhancing facilities As Robin House reaches its 10th birthday, we have progressed our Space Creation project to enhance facilities and services provided at the hospice. The conceptual designs produced in 2013-14 are now being developed into detailed plans through consultation with children, young people and families as well as staff, volunteers and other stakeholders. An architect-led design team experienced in hospice design is working with us in the delivery of the project. Safe and healthy working through every area of CHAS remains a priority for all staff and volunteers. In line with legislative requirements, work is well underway to meet the new standards required under the Energy Savings Opportunity Scheme. We continued to develop our IT services across Scotland to enable staff and volunteers in all areas to work as efficiently as possible and share information safely and easily. Key projects included installing enhanced wireless networks at our hospices for families and staff, the introduction of a new staff Intranet, and the increased availability of online collaboration and communication tools. Delivering and supporting services Through their skills, commitment and energy, our highly professional staff continue to deliver and support the vital care services CHAS provides. In 2014-15, more than 260 staff operated throughout Scotland delivering care, supporting services, fundraising, and working collaboratively to deliver on the objectives of the CHAS Plan. We continued to offer engagement opportunities for our staff and volunteers to ensure that their voices are heard and influence both the operational performance and strategic objectives of CHAS. For example, we have been holding sessions for staff and volunteers to generate ideas for maximising fundraising income. Volunteering CHAS was founded on the principle of successful volunteer involvement and we are proud to have nearly 900 volunteers supporting almost every area of our work throughout Scotland. Throughout the year, these individuals carried out a wide range of volunteer roles in our hospices, gardens, shops, fundraising teams and offices, plus employer supported volunteers took part in 33 projects. In total, these volunteers donated a remarkable 1,400 hours of time per week across Scotland which CHAS estimates to have an economic value in the region of £1.1 million in the year.

We are also delighted to have continued our home support partnership with Volunteering Matters (formerly CSV) into a second year. The partnership exists to inspire communities through promoting the power of social action and volunteering and this initiative attracts and supports volunteers to provide practical help to families in their own homes. 10 years ago, CHAS was the first charity in Scotland to achieve the Investing in Volunteers accreditation. In 2014-15, we renewed this accreditation for the fourth time, reinforcing our commitment to volunteers and their importance to CHAS. Our volunteers’ energy and passion is remarkable and we simply would not be able to provide our services across Scotland without their support and dedication. Learning and developing Throughout the year, staff and volunteers took part in a wide variety of in-house and external learning activities covering professional training needs as well as personal skills development. These activities included formal qualifications, training courses, conferences and seminars, team development days, and statutory online modules. On average, each member of staff spent 33 hours in specific learning activities. ‘A Day for CHAS Volunteers’ held in June each year continues to be a valuable opportunity to update volunteers and offer learning opportunities. Specific initiatives in 2014-15 included several training programmes to help embed the new nursing structure in practice, particularly for the new roles with management and leadership responsibilities. Seven members of staff completed an Association for Coaching accredited course to become CHAS’s first trained workplace coaches. These staff are now using their skills to coach colleagues across CHAS. Generating income 2014-15 was an incredible year for fundraising in CHAS, generating our highest ever annual voluntary income total. The public showed their support in their communities, at events, through their workplaces, in trust awards, and by leaving legacy gifts. We have continued to expand and diversify our fundraising income streams to enable us to increase funding for the vital services CHAS provides. The range of ways that supporters can raise money for us is ever growing. There are individuals who take on the challenge of a lifetime for CHAS, perhaps bungee jumping from the Titan Crane in Glasgow or completing a cycle sportive, those who attend a CHAS organised event such as a Ladies Lunch, or those who respond to our Christmas appeal or get involved with the CHAS Local Hospice Lottery partnership. There is no ‘one size fits all’ for CHAS fundraising.

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2015

ANNUAL REPORT (Continued) We benefitted from an increase in gifts from trusts and foundations during the year. These included notable awards from the Big Lottery Fund for our Transition service and from BBC Children in Need for our specialist activities team. In 2014-15, our retail operations consolidated on previous years of expansion. Our shops continued to receive and sell quality stock and we initiated work to increase the profitability of each of our trading outlets, whilst acknowledging the important awareness raised by our shops in Kinross, Dunfermline, Glasgow and Stirling. Every penny raised really does count, and we are hugely grateful for the continued generosity and commitment of our supporters throughout Scotland, and indeed across the world. As CHAS’s services expand and increase so too must our income generation to ensure sustainable funding for the long term. Raising awareness During 2014-15, we continued to focus on making sure that CHAS is known throughout Scotland by working closely with local and national media. Highlights from the year included working with CBeebies on an episode of ‘My Pet and Me’ filmed at Robin House, a family taking part in the annual national ‘Text Santa’ campaign, and regular articles for ‘Friends of The Scotsman’. We also worked on keeping our social media channels and website engaging, informative and inspiring, reflecting the increasingly diverse range of services provided by CHAS. The number of active followers on our Facebook, Twitter and LinkedIn pages evidence increased levels of positive engagement. Work has begun to look more closely at our messaging and branding and we are soon to update our website to make sure that it is optimised to meet the needs of the online public today. More information about CHAS and our services are available online at www.chas.org.uk, on our Facebook, Twitter and LinkedIn pages and in our various publications.

Financial Review

CHAS reached new highs for both income and expenditure in 2014-15 with amounts raised totalling £10.1 million and expenditure amounting to £12.6 million as shown in the Consolidated Statement of Financial Activities on page 11. After the £2.5 million deficit is adjusted for investment gains and pension losses, total funds reduced by £2.8 million to £36.6 million as at 31 March 2015. These results are in line with expectations following the introduction of the CHAS Plan and the decision to use some of our reserves to develop services.

Income Income continued to be generated from a variety of sources and growth was achieved in 2014-15 for every reported category with the exception of investment income. Fundraising income increased by 8.0% to £4.1 million mainly as a result of increased income from trusts. Legacies of £2.8 million included one amount of £860,000. Increased trading income of £630,000 was generated from our shops selling donated goods. Statutory funding increased to £1.6 million. Contributions from NHS Boards and Local Authorities through national funding agreements represented 13.5% of our expenditure on charitable activities. In addition, the Scottish Government provided funding for Diana Children’s Nurses as well as a contribution towards the cost of operating the CHAS at Home service. Expenditure Total costs of running the services provided by CHAS for children, young people and families increased by 10.7% to £10.0 million in 2014-15. With approximately 80% of expenditure relating to staff, the rise reflects the additional specialist staff involved in delivering increasingly complex care to the children and young people we support. Costs of generating voluntary income for 2014-15 rose by 4.0% to £1.5 million resulting in the increased fundraising income. Trading costs rose to £776,000 reflecting a full year of running additional shops. 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 to £1.8 million for 2014-15 as a result of a full year of additional staff and central services introduced in 2013-14 to support the expanding care services offered by CHAS across Scotland. Further details of the results for the financial year are provided in the Notes to the Accounts. Reserves policy and unrestricted funds The CHAS Plan was developed in the knowledge that CHAS would use some of its reserves to fund service developments while annual income is gradually increased to cover annual costs. Alongside this, CHAS continues to adopt a policy of retaining reserves to protect it against any future decline in income generated or funds held which could prevent it from delivering services and fulfilling its strategy set out in the CHAS Plan and in the future. Each year, the Finance and Investment Committee reviews the level of reserves designated for future operating costs and capital projects by considering risks associated with income streams, expenditure plans and other balance sheet items including CHAS’s pension commitments.

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2015

ANNUAL REPORT (Continued) The risks include the timing of the receipt of fundraising income, the likelihood of downturns in the various sources of income, the desire to maintain services provided to children, young people and families, the possibility of the pension scheme deficit crystallising, and a potential significant fall in the value of the investment portfolio. As they continue to adopt a policy of managing CHAS’s reserves for the benefit of children, young people and families now and in the future, the Directors aim to hold reserves for future operating costs and capital projects equating to at least 12 months of total resources expended. This policy is reviewed and adjusted annually as appropriate. As at 31 March 2015, the Directors designated £23.9 million for future operating costs and capital projects. A further £11.4 million related to the fixed asset fund and £4.6 million for short term operational commitments. After deduction of the pension deficit, total unrestricted income funds were £36.2 million. Investments and investment policy Investments as at 31 March 2015 totalled £22.2 million compared with £25.8 million as at 31 March 2014. During 2014-15, CHAS withdrew £5.0 million of the capital invested in the portfolios to fund service developments in line with the CHAS Plan and increase working capital balances. Unrealised valuation gains of £1.4 million offset these withdrawals. On behalf of CHAS, two investment management companies invest funds in diversified portfolios of shares and fixed interest securities. CHAS’s Finance and Investment Committee agrees asset allocation with the managers and regularly monitors portfolio performance against an agreed benchmark and inflation. 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. Cash held by CHAS is invested in higher interest bank accounts or in fixed term deposits. Throughout 2014-15, both portfolios were managed to provide total real return balanced between capital growth and income within a liquid portfolio. When cash balances held by CHAS are combined with invested funds, the overall risk profile can be classified as low. For 2014-15, each portfolio performed slightly below the benchmark, which was considered satisfactory given the level of capital withdrawals. The two investment management companies used by CHAS are: ■ Adam & Company Investment Management Limited, 25 St Andrew Square, Edinburgh EH2 1AF ■ Standard Life Wealth, Standard Life House, 30 Lothian Road, Edinburgh EH1 2DH For banking services, CHAS principally uses Bank of Scotland, The Mound, Edinburgh EH1 1YZ.

Principal risks and uncertainties

We regularly assess the principal risks and uncertainties faced by CHAS and have measures in place to control and monitor these. A Risk Management Plan is reviewed and updated every six months by the Senior Management Team. This Plan details the various 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 Corporate Governance and Audit Committee every six months and to the Board annually for their review. The Board is ultimately responsible for the management of risk and 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.

GOVERNANCE Legal Status

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. 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. CHAS Trading Limited, which is a wholly owned subsidiary of CHAS, runs charity shops and a mail order operation as well as a clothes collection partnership.

Registered Office

Canal Court, 42 Craiglockhart Avenue, Edinburgh EH14 1LT

Board of Directors

CHAS has a Board of Directors which is responsible for the overall governance of CHAS. For the purposes of charity law, the Directors are Trustees of the charity.

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2015

ANNUAL REPORT (Continued) Directors who served during the year are listed as follows: Professor Gordon C A Dickson (Chairperson) Alan G Baird Barry G Cameron Rory R D Farrelly (resigned 30 June 2014) Dr Peter W Fowlie Elaine Love (appointed 24 November 2014) Eileen C MacDonald Marianne S McJannett (previously Gilhooly) George M Reid Ian M Thomson Dr, The Hon. E Claire Walker Kenneth W Wilson Gwen P Westgarth (appointed 30 June 2014)

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, finance, business, investment management, legal, risk management and PR/communications. Further information on each of our current Board members is provided on our website. When Board positions become vacant, various methods of recruitment are used to attract suitable candidates with the skills and experience required. A Nominations Committee acting as a sub-group of the Corporate Governance and Audit Committee takes forward the selection process before making a recommendation to the Board. Once the Board agrees, the applicant is informed of their appointment subject to necessary recruitment checks. Once appointed, 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 next Annual General Meeting. 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.

Board Meetings Full Board meetings are held at least five times each year to review and agree matters of strategy and principle as well as review performance against agreed plans and budgets. 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. 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 Committees in accordance with CHAS’s Articles of Association and a Scheme of Delegation adopted by the Board. Each Committee meets normally four times each year and minutes of meetings are presented at Board meetings. Terms of reference for each of the Committees is reviewed and approved by the Board every two years. The current membership and remit of each of the three Board Committees is set out below. Clinical Governance Committee Dr Peter W Fowlie (Convenor) Alan G Baird Elaine Love Dr, The Hon. E Claire Walker Gwen P Westgarth In attendance: Director for Children and Families Medical Director 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 ■ ensure excellence in care is maintained through continuing professional development which includes reflective practice and staff appraisal Corporate Governance and Audit Committee Professor Gordon C A Dickson (Convenor) Barry G Cameron Eileen C MacDonald George M Reid In attendance: Chief Executive Director of Finance and Administration Director of Organisational Development

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2015

ANNUAL REPORT (Continued) The remit of the Corporate Governance and Audit 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, human resources and voluntary services ■ CHAS is complying with all employment and corporate aspects of the law, relevant regulations, and best practice ■ a robust and independent statutory audit of the CHAS annual accounts is carried out each year Finance and Investment Committee Ian M Thomson (Convenor) Alan G Baird Marianne S McJannett Kenneth W Wilson In attendance: Chief Executive Director of Finance and Administration Director of Fundraising and Communications The Finance and Investment 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 ■ CHAS has appropriate controls over managing its assets and maximising its income ■ major capital projects are managed to ensure the operational effectiveness of buildings and equipment

Executive Management

Operational responsibilities and day to day running of CHAS are carried out by the Senior Management Team.

Chief Executive Maria McGill

Senior Managers

Dr Patrick J Carragher, Medical Director Jon Heggie, Director of Fundraising and Communications Sue Hogg, Director for Children and Families Moira J McCaig, Director of Finance and Administration Scott Semple, Director of Organisational Development

Regulation and Standards

To support compliance with legislation and regulations associated with being a hospice service, employer, registered charity and company, CHAS has a comprehensive set of policies and procedures which underpin its systems of internal controls and operational practices. 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.

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 ■ Shepherd and Wedderburn, 1 Exchange Crescent, Conference Square, Edinburgh EH3 8UL

ACKNOWLEDGEMENT

This has been another busy year for the community of CHAS, during which we have seen significant progress in implementing key features of the CHAS Plan. This report has described the ways in which we have transformed some of our activities and enhanced our service and care for children and families. While there is much still to be done, we are confident that the professionalism and dedication of our staff and volunteers will ensure success in reaching the aspirations and goals we set to meet the needs of children and families. CHAS is an inspirational charity - full of joy, happiness, comfort and care, meeting the needs of children and families whenever and wherever required. We have continued to expand our services across Scotland to reach more children and families. We have also seen a significant rise in referrals of babies and we should acknowledge the highly skilled work of all our teams involved in delivering this specialist care. On behalf of the Board of Directors, I would like to extend my heartfelt gratitude to the staff and volunteers for their commitment, enthusiasm and professionalism which touches the lives of everyone we support in a very special way. We acknowledge the loyal and sustained commitment we receive from the Scottish people. This magnificent support is truly appreciated by all here at CHAS.

STATEMENT OF RESPONSIBILITIES OF THE DIRECTORS OF CHILDREN’S HOSPICE ASSOCIATION SCOTLAND IN RESPECT OF THE ANNUAL REPORT AND ACCOUNTS The Directors are responsible for preparing the Annual Report, which includes the Directors’ Report and Strategic 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).

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2015

ANNUAL REPORT (Continued) 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 the 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 proper 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.

DISCLOSURE OF INFORMATION TO AUDITOR The Directors who held office at the date of approval of this Annual 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.

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.

APPROVAL The Board approved the Annual Report, which includes the Directors’ Report and Strategic Report, at its meeting on 29 June 2015. By order of the Board Professor Gordon C A Dickson, Chairperson

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2015

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 2015 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. 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 pages 8 to 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 to you in accordance with regulations made under those Acts. Our responsibility is to audit and express an opinion on, the accounts in accordance with applicable law 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 Financial Reporting Council’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 2015 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 Annual Report, which includes the Directors’ Report and Strategic 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 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.

Hugh Harvie (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 20 July 2015

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2015

Scottish company number SC 136410

CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES (incorporating an income and expenditure account) for the year ended 31 March 2015 Unrestricted Funds £000

Restricted Funds £000

Totals 2015 £000

Totals 2014 £000

3,016 2,424

1,097 397

4,113 2,821

3,808 1,875

Activities for generating funds: Shop sales and other trading

630

584

Investment income: Income from investments Interest receivable Other income

748 26 111

850 22 48

1,635

1,528

6,955

3,129

10,084

8,715

(1,487)

(1,442)

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

(776)

(733)

Investment management costs

(101)

(110)

(7,082)

(2,947)

(10,029)

(9,042)

(235)

(212)

Note Incoming resources from generated funds: Voluntary income: Gifts, donations and community fundraising Legacies

Incoming resources from charitable activities: Statutory funding and grant income

Total incoming resources

Cost of generating funds: Costs of generating voluntary income

Charitable activities Governance costs Total resources expended

(9,681)

(2,947)

(12,628)

(11,539)

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

(2,726)

182

(2,544)

(2,824)

8 12

106 1,408 (1,816)

33 589 (833)

(3,028)

182

(2,846)

(3,035)

39,191

268

39,459

42,494

36,163

450

36,613

39,459

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

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 £2,438,000 (2014-£2,791,000). 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 2015 amounted to £2,395,000 (2014-£2,674,000).

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2015

Scottish company number SC 136410

BALANCE SHEETS as at 31 March 2015

Note Fixed assets Tangible assets Investments Investment in subsidiary

Group 2015 £000

2014 £000

Company 2015 £000

2014 £000

11,442 22,235 –

11,720 25,766 –

11,391 22,235 –

11,652 25,766 –

33,677

37,486

33,626

37,418

5 613 6,764

29 394 4,459

– 1,131 6,755

– 785 4,454

7,382

4,882

7,886

5,239

(609)

(1,373)

(571)

(1,319)

6,773

3,509

7,315

3,920

40,450

40,995

40,941

41,338

(3,837)

(1,536)

(3,837)

(1,536)

36,613

39,459

37,104

39,802

450

268

450

268

Unrestricted income funds Designated funds: Fixed asset fund Short term operational commitments Invested for future operating costs and capital projects

11,442 4,633 23,925

11,720 29,007

11,391 4,624 24,476

11,652 29,418

Unrestricted income funds excluding pension reserve

40,000

40,727

40,491

41,070

Current assets Stock Debtors Cash at bank and in hand

Creditors Amounts falling due within one year

7 8 9

Net current assets

Net assets excluding pension deficit Defined benefit pension scheme deficit

Net assets including pension deficit The funds of the charity: Restricted income funds

Pension reserve

(3,837)

(1,536)

(3,837)

(1,536)

Total unrestricted funds

36,163

39,191

36,654

39,534

36,613

39,459

37,104

39,802

Total funds

Approved by the Directors on 29 June 2015 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 2015

Scottish company number SC 136410

CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 March 2015

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

£000

2014 £000 (2,823)

(2,460)

850 22

748 18

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

2015 £000

872

766 (247) 5 (5,235) 7,676

(275) 4 (3,153) 7,423

Net cash inflow from investing activities

3,999

2,199

Increase in cash and cash equivalents (ii)

2,305

248

(i) Reconciliation of net outgoing resources to the net cash outflow from operating activities 2015 £000

2014 £000

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

(2,544) 556 2,301 (1,816) (1) (773) 24 (138) (69)

(2,824) 546 1,131 (833) (4) (872) 8 (31) 56

Net cash outflow from operating activities

(2,460)

(2,823)

2015 £000

2014 £000

Cash balances at beginning of year Increase in the year

4,459 2,305

4,211 248

Cash balances at end of year

6,764

4,459

(ii) Analysis of net funds

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2015

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. 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. 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. 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. 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. Any annual profits earned by the subsidiary company are paid to the Charity by deed of covenant. 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. 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 3 and 4 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 2015

NOTES TO THE ACCOUNTS 1 Accounting policies (continued) 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. 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

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. Stocks of goods purchased for resale are stated at the lower of cost and net realisable value. Stocks of donated assets are not valued. Rentals payable in respect of an operating lease are charged in the statement of financial activities for the period to which they relate.

The Charity participates in the Lothian Pension Fund, a defined benefit pension scheme open to all eligible 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.

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2015

NOTES TO THE ACCOUNTS 2 Incoming resources from charitable activities

Statutory funding and grant income Scottish Local Authorities – for operation of Rachel House and Robin House Scottish NHS Boards – for operation of Rachel House and Robin House Scottish Government: – for Diana Children’s Nurses – for CHAS at Home – for research project

3 Resources expended

2015 £000

2014 £000

681 672

681 655

255 27 -

39 27 126

1,635

1,528

Direct costs £000

Support costs £000

Total £000

2014 £000

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

1,336 697 101

151 79 -

1,487 776 101

1,442 733 110

Charitable activities

8,720

1,309

10,029

9,042

235

212

10,854

1,774

12,628

11,539

Governance costs

The activities underlying the costs above, under each heading are: Costs of generating voluntary income – raise the income needed to support the Charity’s activities. Costs of shop sales and other trading – operating charity shops, mail order, clothes collection partnership, and online sales to create additional income 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.

4 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

2014 £000

151

1,309

235

1,774

1,633

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 and 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 2015

NOTES TO THE ACCOUNTS 5 Staff costs

Salaries Social security costs Pensions

2015 £000

2014 £000

7,414 548 1,573

7,238 553 972

9,535

8,763

The number of employees whose emoluments as defined for taxation purposes amounted to over £60,000 in the year was as follows: 2015 Number £60,001 – £70,000 £70,001 – £80,000 £80,001 – £90,000 £90,001 – £100,000 £120,001 – £130,000

2 1 2 1

2014 Number 1 1 1 1

For the above employees, £71,303 in total (2014-£52,424) 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 260 (2014-257). In addition, there were 883 volunteers at no cost to CHAS. The average number of employees was 259, of whom 77 (52 full-time equivalent) were part-time.

6 Net (outgoing)/incoming resources This is stated after charging: 2015 £000 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

2014 £000

3 – 1 242

1 – 2 232

No remuneration was paid to the Directors in respect of their services to the Charity (2014-Nil). Travel expenses totalling £1,055 were reimbursed to three Directors (2014-£881 to two Directors).

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2015

NOTES TO THE ACCOUNTS 7 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

13,820 18 -

263 5 -

333 27 (75)

641 66 (29)

421 64 (24)

536 101 (24)

16,014 281 (152)

Cost at end of year

13,838

268

285

678

461

613

16,143

Accumulated depreciation at beginning of year Charge for year Disposals

2,907 277 -

182 23 -

237 63 (75)

324 72 (28)

334 67 (23)

310 54 (23)

4,294 556 (149)

Accumulated depreciation at end of year

3,184

205

225

368

378

341

4,701

Net book value at 31 March 2015

10,654

310

272

11,442

Net book value at 31 March 2014

10,913

317

226

11,720

The purposes for which the tangible fixed assets held for charity use at 31 March 2015 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

10,426

310

248

11,041

228

401

10,654

310

272

11,442

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2015

NOTES TO THE ACCOUNTS 7 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

13,853 18 -

169 5 -

333 12 (75)

641 66 (29)

378 64 (24)

523 101 (24)

15,897 266 (152)

Cost at end of year

13,871

174

270

678

418

600

16,011

Accumulated depreciation at beginning of year Charge for year Disposals

2,906 277 -

165 3 -

237 63 (75)

324 72 (28)

306 56 (23)

307 53 (23)

4,245 524 (149)

Accumulated depreciation at end of year

3,183

168

225

368

339

337

4,620

Net book value at 31 March 2015

10,688

310

263

11,391

Net book value at 31 March 2014

10,947

317

216

11,652

The purposes for which the tangible fixed assets held for charity use at 31 March 2015 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

10,472

310

248

11,087

216

304

10,688

310

263

11,391

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2015

NOTES TO THE ACCOUNTS 8 Fixed asset investments 2015 £000

2014 £000

25,766 2,423 (7,362)

26,884 5,965 (7,672)

20,827

25,177

1,408

589

Market value at end of year

22,235

25,766

Historical cost at end of year

16,754

19,858

Quoted investments at market value at beginning of year Additions during year Disposals during year

Net unrealised gains

Fixed asset investments are represented by:

2015 £000

2014 £000

UK equities Investment and unit trusts Overseas equities

7,871 7,292 2,659

35.3 32.8 12.0

10,224 7,273 3,442

39.7 28.2 13.4

Fixed interest securities UK debentures and loan stocks

17,822 2,531 1,882

80.1 11.4 8.5

20,939 2,663 2,164

81.3 10.3 8.4

Total managed portfolio

22,235

100.0

25,766

100.0

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

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2015

NOTES TO THE ACCOUNTS 9 Subsidiary company The Charity has a wholly owned subsidiary, CHAS Trading Limited, which operates charity shops and a clothes collection partnership as well as a mail order operation. A summary of its results is shown below and audited accounts will be filed with the Registrar of Companies. 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 2015 (2014-Nil). The reported loss for the year ended 31 March 2015 is after deduction of support costs from CHAS (shown in note 4) and reflects disappointing sales and profitability at some of the shops. A comprehensive strategic review of all retail operations is ongoing with the objective of returning to profitability as soon as possible. Income £000

Expenditure £000

Profit/(Loss) £000

2014 £000

630

(779)

(149)

(150)

Gift and charity shops

The net assets of CHAS Trading Limited at 31 March 2015 were:

£000

Fixed assets

Stocks Debtors Cash at bank

5 39 9

Total current assets

Creditors: amounts falling due within one year

(596)

Net current liabilities

(543)

Total assets less current liabilities

(446)

Included in debtors is an amount of £15,000 (2014- £1,000) due from the Charity. In creditors there is an amount of £544,000 (2014- £406,000) due to the Charity.

10 Debtors

Taxation refunds VAT Prepayments Amounts due from CHAS Trading Limited (note 15) Sundry debtors Legacies receivable

Group 2015 £000

Group 2014 £000

Company 2015 £000

Company 2014 £000

11 5 140 – 97 360

13 – 127 – 213 41

11 – 128 544 88 360

13 – 116 406 209 41

613

394

1,131

785

115 29 15 5 49

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2015

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 9)

Group 2015 £000

Group 2014 £000

Company 2015 £000

Company 2014 £000

448 161 –

1,215 158 –

395 161 15

1,164 154 1

609

1,373

571

1,319

12 Pension schemes

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 recognised as a liability in the balance sheet

2015 £000

2014 £000

12,734 (16,571)

10,097 (11,633)

(3,837)

(1,536)

Changes in the present value of the defined benefit obligation attributed to the Charity are as follows: 2015 £000

2014 £000

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

11,633 1,269 530 289 2,977 (127)

9,229 912 439 244 895 (86)

Closing defined benefit obligation attributed to the Charity

16,571

11,633

(461) (412) (297)

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2015

NOTES TO THE ACCOUNTS 12 Pension schemes (continued) Changes in the fair value of assets attributed to the Charity are as follows: 2015 £000

2014 £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

10,097 641 289 673 1,161 (127)

8,824 487 244 566 62 (86)

Closing fair value of assets attributed to the Charity

12,734

10,097

2015 £000

2014 £000

1,269 530 (641)

912 439 (487)

1,158

864

1,804

548

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

2015 £000

2014 £000

1,816

833

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 recognised as a liability in the balance sheet

2015 £000

2014 £000

8,786 2,165 1,019 764

7,774 909 808 606

12,734 (16,571)

10,097 (11,633)

(3,837)

(1,536)

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2015

NOTES TO THE ACCOUNTS 12 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

2015 £000

2014 £000

4.4% 2.5% 3.3% 3.3%

5.2% 2.9% 4.3% 6.1%

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 22.1 years 24.2 years

Current pensioners Future pensioners

Female 23.7 years 26.3 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

2015 £000

2014 £000

2013 £000

2012 £000

2011 £000

12,734

10,097

8,824

7,003

5,598

(16,571) (3,837) 1,161 (644)

(11,633) (1,536) 62 2

(9,229) (405) 715 5

(6,754) 249 101 (445)

(5,160) 438 (91) –

It is estimated that the Charity will contribute £673,000 to this defined benefit scheme in the year ending 31 March 2016. As at 31 March 2015, 179 staff were members of the scheme (2014-178).

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 2014 at £39.5 billion. As a result of this deficit, contributions are likely to remain in excess of current service costs. In the year ended 31 March 2015, normal employer contributions of £307,000 were payable to the Scottish Public Pensions Agency (2014- £294,000) at the rate of 13.5% of pensionable earnings (2014-13.5%). As at 31 March 2015, 66 staff were members of the scheme (2014– 57) paying between 5.6% and 14.5% of pensionable earnings. In the year ended 31 March 2014, the Scottish Government paid CHAS £250,000 in full and final settlement of any refunds due 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 2015

NOTES TO THE ACCOUNTS 13 Statement of funds As at 1 April 2014 £000

Incoming resources £000

Resources expended £000

Investment gains /other losses £000

Restricted income funds Space Creation Rachel House Scottish Government Big Lottery Service Development Robin House CHAS at Home Scottish Local Authorities Scottish NHS Boards

– 28 126 – 24 75 15 – –

194 661 282 97 8 513 21 681 672

(18) (598) (332) (66) (14) (534) (32) (681) (672)

– – – – – – – – –

39 – – – – (39) – – –

215 91 76 31 18 15 4 -

Total restricted income funds

268

3,129

(2,947)

–

450

11,720

–

(278)

11,442

–

4,633

27,471

–

(302)

(3,244)

23,925

Pension reserve

–

(3,837)

General reserve

–

6,955

(9,681)

–

2,726

Total unrestricted income funds

39,191

6,955

(9,681)

(302)

–

36,163

Total funds

39,459

10,084

(12,628)

(302)

–

36,613

Unrestricted income funds Fixed asset fund Short term operational commitments Invested for future operating costs and capital projects

As at Transfers 31 March 2015 £000 £000

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2015

NOTES TO THE ACCOUNTS 13 Statement of funds (continued) As at 1 April 2014 £000

Incoming resources £000

Resources expended £000

Investment gains /other losses £000

Restricted income funds Space Creation Rachel House Scottish Government Big Lottery Service Development Robin House CHAS at Home Scottish Local Authorities Scottish NHS Boards

– 28 126 – 24 75 15 – –

194 661 282 97 8 513 21 681 672

(18) (598) (332) (66) (14) (534) (32) (681) (672)

– – – – – – – – –

39 – – – – (39) – – –

215 91 76 31 18 15 4 -

Total restricted income funds

268

3,129

(2,947)

–

450

11,652

–

(261)

11,391

–

4,624

27,882

–

(302)

(3,104)

24,476

Pension reserve

–

(3,837)

General reserve

–

6,325

(8,903)

–

2,578

Total unrestricted income funds

39,534

6,325

(8,903)

(302)

–

36,654

Total funds

39,802

9,454

(11,850)

(302)

–

37,104

Unresticted income funds Fixed asset fund Short term operational commitments Invested for future operating costs and capital projects

As at Transfers 31 March 2015 £000 £000

Restricted income received in the year relates to trust funding, legacies, donations and statutory funding for particular projects or areas and the funds as at 31 March 2015 relate to specific expenditure yet to be incurred. The restricted funds from the Scottish Government relate to the ongoing research project and the Diana Children’s Nurses; restricted income for CHAS at Home was spent in the year. The Big Lottery is providing funding for the CHAS Transition Team. Restricted income from Scottish Local Authorities and Scottish NHS Boards was used in the year for the operation of both Rachel House and Robin House. The fixed asset fund represents the net book value of tangible fixed assets. The funds designated for short term operational commitments represent working capital required by CHAS. The funds invested for future operating costs and capital projects are designated by the Directors in line with the policy of retaining reserves to protect CHAS against any future decline in income which could prevent it from delivering services and fulfilling its strategy. The general reserve represents any free funds of the Charity to the extent that they have not been designated for particular purposes.

CHILDREN’S HOSPICE ASSOCIATION SCOTLAND ANNUAL REPORT AND ACCOUNTS 31 MARCH 2015

NOTES TO THE ACCOUNTS 14 Analysis of group net assets between funds

Restricted Funds £000

Designated Funds £000

Total £000

Fund balances at 31 March 2015 are represented by: Tangible fixed assets Investments Current assets Current liabilities

– – 472 –

11,442 22,235 6,910 (609)

11,442 22,235 7,382 (609)

Net assets excluding pension deficit

472

39,978

40,450

2015 £000

2014 £000

5 135 109

– 139 95

249

234

15 Commitments Annual commitments under non-cancellable operating leases are as follows: Land and buildings Operating leases which expire: Within one year In the second to fifth years inclusive In over five years

Childrenâ&#x20AC;&#x2122;s Hospice Association Scotland Rachel House | Robin House | CHAS at Home CHAS Head Office Canal Court, 42 Craiglockhart Avenue, Edinburgh EH14 1LT t: 0131 444 1900 e: info@chas.org.uk CHAS is very grateful to all our supporters, including:

www.chas.org.uk childrenshospiceassociationscotland @SupportCHAS Scottish charity number SC 019724

CHAScharity Scottish company number SC 136410

Drawings by Morghan McKenzie, Emma MacDonald and John MacDonald. Photo credits: Back cover, top row, L-R: Nadine Ishaq, Sally Jubb. Back cover, bottom row, L-R: Both Paul Hampton. Front cover, top row, L-R: Paul Hampton, Stevie Purves. Front cover, bottom row, L-R: Both Paul Hampton.