the sick children's trust - gov.uk

THE SICK CHILDREN'S TRUST

Company No: 01618435 Charity No: 284416

FINANCIAL STATEMENTS

FOR THE YEAR ENDED

31 MARCH 2017

i

The Sick Children's Trust

Page

Legal and administrative information 3-4

Report of the Trustees 5-15

Independent Auditor's Report 16-17

Statement o f Financial Activities (SOFA) 18

Balance Sheet 19

Cash Flow Statement 20

Notes to the Financial Statements 21-31

2

The Sick Children's Trust Legal and Administrative Information

Address 4th Floor

28-30 Worship Street London EC2A 2AH

President Michael Crawford CBE

Founders Professor J Malpas

Dr J Pritchard

Vice-Presidents Dame Judi Dench

Loyd Grossman OBE Gary LinekerOBE Carmel Kinnear

Christopher Timothy Dame Esther Rantzen CBE

Chris Tarrant OBE Alice Beer

Anita Dobson Paul A Young

Members o f the Council Paul Jardine (Chairman)

Gary Boom Vicky Carter (appointed 28 March 2017)

Peter Cunard Stephen Masters

Jo Mier Patrick Rigby

Michael Robinson Dr Jack Singer Fiona Smart

Polly Staveley Pernille Tholstrup (resigned 22 September 2016)

Soren Tholstrup

Secretary Stephen Masters

Principal Bankers Coutts and Co

Specialist Commercial Banking 440 Strand

London WC2R0QS

3

The Sick Children's Trust Legal and Administrative information (Continued)

Solicitors CMS Cameron McKenna LLP

Cannon Place 78 Cannon Street

London EC4N 6AF

Weil Gotshal & Manges 110 Fetter Lane

London EC4A 1AY

Both CMS Cameron McKenna and Weil Gotshal & Manges, provide legal services on a pro bono basis

Independent Auditor UNW LLP

Chartered Accountants and Statutory Auditor Citygate

St James' Boulevard Newcastle upon Tyne

NE1 4JE

4

The Sick Children's Trust Trustees' Report for Annual Accounts 2016-17

The trustees (who are also directors o f the charity for the purposes o f the Companies Act) present their annual report together with the audited financial statements o f The Sick Children's Trust (the SCT) for the year ended 31 March 2017. The trustees confirm that the annual report and financial statements o f the company comply with the current statutory requirements, the requirements o f

the company's governing document and the provisions o f the Statement o f Recommended Practice (SORP) applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic o f Ireland (FRS 102} (effective 1 January 2015).

Objectives and Activities

Policies and objectives

The core purpose o f the charity as set out in the company's memorandum o f association is to benefit

the public by promoting and furthering the care, relief and treatment o f sick children at any hospital

in Great Britain and Northern Ireland. To meet this aim the objectives o f the charity are as follows:

The provision o f essential accommodation and amenities for parents, guardians, relatives and friends in need thereof when visiting such children. This accommodation is provided in the following houses:

• Rainbow House - supporting Great Ormond Street Hospital (London) - Opened 1984

• Guilford Street - supporting Great Ormond Street Hospital (London) - Opened 1990 • Eckersley House - opened in 1993 at St James's Hospital (Leeds), moved to the Leeds General Infirmary 2010

• Crawford House - supporting The Royal Victoria Infirmary (Newcastle upon Tyne) - Opened 1996

• Acorn House - supporting Addenbrooke's Hospital (Cambridge) - Opened 2000

• Treetop House - supporting Sheffield Children's Hospital (Sheffield) - Opened 2001 • Stevenson House - supporting The Royal London Children's Hospital (London) - Opened 2003

• Chestnut House - supporting Rosie Hospital (Cambridge) - Opened 2012

• Magnolia House - supporting Sheffield Children's Hospital (Sheffield) - Opened December 2013

• Scott House - supporting the children's heart unit at The Freeman Hospital (Newcastle upon Tyne) - Opened September 2014

The provision o f toys, games and play facilities for children being treated at hospital and for any children visiting them.

The provision o f facilities and assistance to parents, guardians, relatives and friends o f sick

children in order to promote the welfare o f such children.

Acquire property for the promotion o f the purpose o f The Sick Children's Trust.

5

The Sick Children's Trust Trustees' Report for Annual Accounts 2016-17 (Continued)

Strategies and activities for achieving objectives

Our main activities are described below. All of our charitable activities focus on the provision of 'Home from Home' accommodation for the families o f sick children receiving treatment in hospital. These are our main beneficiaries. The activities we undertake promote our charitable purposes for

the public benefit in the UK. We believe we fully satisfy the public benefit test.

Operations - who used and benefited from our service

The Sick Children's Trust has ten 'Homes from Home' providing services to support seriously ill children and their families at eight hospitals in five cities around the UK. Our houses provide both

practical and emotional support to families with seriously ill children in hospital. All our houses vary in size and layout but the key elements remain the same - private family bedrooms so family members can relax in privacy and communal kitchens and living areas so families can have a degree o f normal family life. House staff ensure the smooth running of the house and offer emotional and practical support to families.

The service provided by The Sick Children's Trust 'Homes from Home' is free o f charge and we

welcome all families irrespective o f their personal circumstances, financial or otherwise. We work with the medical teams to ensure that families most in need are able to utilise our services. The

majority o f referrals are based on a family's needs and requirements i.e. distance from home,

siblings in attendance, type o f illness and length o f stay. 60% o f the families we supported last year

had a child on paediatric intensive care, neo-natal intensive care or the high dependency unit. Families with a child on intensive care or high dependency are our highest priority when it comes to

allocating rooms in our 'Homes from Home' because there is nowhere else for them to stay at the hospital.

The Sick Children's Trust last year supported 3,910 families made up o f 2,741 new families and 1,169

returning families. The average length o f stay across our ten houses was 12.2 nights. Last year we supported 1,297 siblings, our highest number to date. We now have 146 family bedrooms, which

includes three flats - a bone marrow transplant flat at Rainbow House in London, a liver transplant

flat at Eckersley House in Leeds and a heart transplant flat at Scott House in Newcastle upon Tyne.

These allow post-transplant children to stay with their families so that they can recover and prepare to go home.

Demand for our services remains high with waiting lists in operation in the majority o f the houses. The average occupancy for the year is very high at 91%. In line with current NHS provision, paediatric

services have become more centralised at specialist centres across the UK, so children are having to

travel far from home to receive the treatment they need, making our services even more essential.

6


Continuing efficiency

The impact o f our work goes beyond those who we help directly and includes reducing the physical stress o f the hospital environment, taking the family away for much needed rest and quiet periods.

We continue to review our services on a regular basis and ask all families who use our services to complete a feedback form. This feedback helps us to evaluate the services we provide and shapes future services and developments. In 2016/17 we saw a 148% increase in feedback forms returned

compared to the prior year.

99.5% o f our families said that having the whole family close by was beneficial for their child's

wellbeing and recovery and 99.9% o f our families said they would recommend the 'Home from

Home' to another family in a similar position.

99% o f families who completed the survey felt having the opportunity to stay in a private room helped them cope with the strain o f having a seriously ill child in hospital and 99% o f house users felt staying in a 'Home from Home' allowed their family to keep a sense o f normality and that this was

important to them.

Our houses not only provide practical support but our dedicated house staff are at the heart of our work and are on hand to offer emotional support too. 99% o f families felt that it was important to

have house staff on hand to give support during their stay. And families gain comfort from being

with families in a similar situation. 94% o f families who spent time talking with other families in the house found it to be a supportive aspect o f staying in a 'Home from Home'.

By providing accommodation parents are able to play an active part in their child's care and treatment. 86% o f families helped with the personal care (washing and dressing) o f their seriously ill

child in hospital and 45% learned to use medical equipment whilst their child was in hospital.

Volunteers

We are very fortunate to have a number o f volunteers that give their time to support our work. Volunteers support in a number or ways including fundraising and communications, office and

administration and working in our 'Homes from Homes' themselves. A number o f corporate

supporters provide volunteers who have decorated our houses, prepared meals for families staying in the houses and carried out important research for us.

Gifts in Kind

We are fortunate that our office premises in London were donated free o f charge from corporate

supporter XL Catlin. This represented an estimated cost saving o f £52,473 for the year.

7


Review o f activities

The charity reviews the aims, objectives and activities each year. This review looks at what we have achieved and the outcomes o f our work in the previous twelve months, and the benefits that have been brought to the people we were set up to help. It also keeps us focused on our stated purpose.

Our key achievements this year are:

• Helped 3,910 families with sick children in hospital.

• Provided a total of 48,068 nights' accommodation across all our 'Homes from Home'.

• Achieved an occupancy level o f 91% nationally.

• Successfully completed refurbishment projects in our 'Homes from Home' including a new

kitchen and new bathrooms in Eckersley House, bathroom and bedroom conversions at

Magnolia House, new vanity units at Acorn House and new bathrooms at Treetop House.

• Received the donation o f our Head Office premises in the heart o f the city by Corporate Supporter, XL Catlin, amounting to a £52,473 gift in kind.

• Following the end o f our Gift in Kind o f our office premises in London in March '17, we found new Head Office premises starting in March '17 and completed the refurbishment projects such that we were able to move into our new Head Offices in May '17.

• Held a strategic planning day to focus on our strategic direction following the finalisation of our 5 year strategic plan in the prior year.

• Successfully held our first Golf day in London raising over £13,000 and created a new Pyjama Party campaign raising over £11,000.

• Won the BBC Lifeline TV Appeal which will be broadcast in January '18.

• Received the donation o f our Head Office premises in the heart o f the city by Corporate Supporter, XL Catlin, amounting to a £52,473 gift in kind.

• Increased media coverage in 2016/17 by 73%.

• Increased our social media following by 26% over the 12 month period.

• Raised income o f £2,421,399.

• For every £1 spent on fundraising £4.75 was raised, representing an 11% increase on this statistic from last year.

Fundraising and Communications

Fundraising activities undertaken by the charity are carried out with reference to the Code of

Fundraising Practice. All complaints received by the charity are recorded and investigated in line with the charity's complaints policy. During the year we received 4 complaints in relation to our

fundraising practices. The complaints were all managed effectively by being dealt with locally where possible, swiftly and consistently across the board. As soon as the complainants had been communicated with, all relevant areas o f The Sick Children's Trust, led by the CEO, were briefed on

what the complaint related to, and changes made to our processes and procedures where necessary to avoid such complaints arising in the future.

8


The media's focus on the way in which charities in general conduct their fundraising activities has

continued in 2016/17 with some high-profile stories about the use o f supporter data by some of the large national charities. As a charity, we do not use the services o f external call centres or sales canvassing companies to support our fundraising activities, and we do not engage in some

fundraising methods that have proved controversial, such as face-to-face fundraising in the street or on the doorstep. We greatly value our donors' privacy, and so do not engage in practices such as data-matching, tele-matching, or sharing o f personal data, and do not buy donor mailing lists.

In order to provide a sustainable income base for the future operations o f our 'Homes from Home', we endeavour to have a wide and balanced range o f income streams, including charitable trusts,

corporate partners, organised events and individuals' fundraising, with a policy that no single income stream should make up more than 30% o f our overall income. A significant portion o f our income comes from fundraising by our beneficiaries, who put on their own events or take on challenges as a way o f saying 'thank you' for the support they have received in our 'Homes from Home'. The charity

therefore provides guidance and training to employees and volunteers on dealing with people in vulnerable circumstances, with a particular emphasis on ensuring that no family member feels

unduly pressured to donate.

Our communications team is helping to reach new supporters and make them aware o f the need for our services and the impact our 'Homes from Home' have on families. They do this through press

coverage, our website and our social media channels.

Financial review

With continued public support and increased activities the charity is pleased to report a financially

successful year.

Income decreased by 4% to £2,421,399 due to the fact that the annual Supper Club event took place

in April '17 rather than the usual March date and hence the related income o f £228,981 falls within the 2017/18 accounts. The Statement o f Financial Activities (SOFA) shows that our main source o f

income is voluntary income. Investment income remains low due to low interest rates on short-term deposits and cash will remain on short-term deposit due to liquidity requirements for anticipated

projects in 2017/18.

Donations were split between £1,571,212 unrestricted (72%) and £596,261 restricted income (28%).

The restricted income was raised to meet running costs o f the individual houses.

Total expenditure in 2016/17 increased to £2,166,399, up £66,999 (3%) on 2015/16, as a result of increases in staff costs and professional fees. The increase in staff costs was as a result o f our annual salary review and ensuring our staff are paid competitive industry rates across the organisation.

Furthermore just over £24,000 o f the increase related to feasibility study costs carried out at Guilford Street House and Rainbow House to ascertain the costs o f works that will need to be carried

out over the next five years.

9


Cost o f generating funds came to £509,583 and expressed as a ratio for every £1 spent, a return of £4.75 was achieved (2016: £4.27).

Charitable activity costs account for 76% o f the total resources expended. The SCT continues t o annually review how to keep its costs low and operations as efficient as possible, through optimising costs and undertaking efficiency drives.

At the end o f this financial year the Trust had cash resources o f £2,862,305 o f which restricted funds accounts for £217,374 to be spent on the 'Homes from Home' operations and upcoming capital projects. This is in line with our reserves policy which is discussed further below.

The trustees are satisfied that the income streams o f the charity continue to hold up well in a difficult climate. During the year the trustees maintained a programme o f review that will continue and which will ensure the operations o f the charity are streamlined to ensure the delivery o f the

stated aims and objectives as efficiently as possible.

Reserves policy

The Sick Children's Trust has total reserves o f £9,649,664. £217,374 is restricted for specific purposes

and £6,881,996 has been designated as the funds tied up in the operational homes and fixed assets and so is not available to spend. In 2016/17, a further £600,000 has been designated by the trustees as funds set aside for specific capital projects including upgrades to houses which we expect t o

spend in the next 2 to 3 years and new houses that are currently under discussion. This leaves a balance o f £1,194,336 as general unrestricted funds or what the Charity Commission define as 'free' reserves to provide for the charity's working capital needs, and provide a sensible contingency

against an unexpected shortfall in fundraising income, emergency expenditure or seed money for new projects. At the start o f 2017/18 financial year we are committed to raising funds for a new

'Home from Home' at The Royal National Orthopaedic Hospital in Stanmore whose progress was

delayed in 2016/17.

In line wi th the guidance issued by The Charity Commission, the trustees have considered the future expenditure needs o f the charity and deem that in 2017/18 such reserves should be between six and

twelve months' running costs. This is between approximately £1,100,000 and £2,200,000 for the forthcoming year, which will ensure uninterrupted services and delivery o f the Charity's objectives. The trustees therefore believe that the current level o f 'free' reserves is satisfactory, but will keep this under constant review to ensure they are adequate for The SCT's future expected operational

needs.

10


Plans for the future

In 2017/18 we will continue to provide high quality, comfortable accommodation for families with

children in hospital as well as emotional and practical support through a very difficult time. Refurbishment o f the bathrooms at Acorn House are planned for Q4, a new kitchen and bathroom refurbishments at Eckersley House are planned in Q l , refurbishment o f the Bone Marrow Transplant

flat at Rainbow is planned in Q2, and we will launch an appeal to raise funds for new bathrooms and

bedroom vanity units at Crawford House that has been delayed to 2017/18.

Following the sign of f in the prior year o f our five year business plan, we have rolled this out externally and now monitor our performance against the plan focusing on our four organisational aims:

• We will ensure our 'Homes from Home' positively impact the health and wellbeing o f sick children and their families - 99.5% o f our families have said that having the whole family close by was beneficial for their child's wellbeing and recovery.

• We will attract and retain the best people who share our vision and values - we have performed a detailed salary review and ensured all salaries are competitive in the industry, ensuring the organisation is doing all that is necessary to retain the best people

• We will raise the profile o f The Sick Children's Trust as the leading provider of 'Home from Home' family accommodation at hospitals in the UK - the significant increase in both media coverage and social media following has raised The Sick Children's Trust's profile

significantly.

• We will increase income and revenue streams to maintain existing 'Homes from Home' and meet the demand for new family accommodation - income and revenue streams have been

increased through the creating of new campaigns and special events. We look forward to 2017/18 where we hope to be able to launch several capital project appeals, that will further

our income and revenue streams.

A key element o f the plan focuses on growth in the number of families we can help each year and in line with this, discussions continue with the Royal National Orthopaedic Hospital in Stanmore. The

hospital will undergo a major re-configuration programme in the coming years and The Sick

Children's Trust plan to launch a fundraising appeal to raise funds for a new 12 bedroom 'Home from Home' on the hospital site. We are also in discussions with other hospitals, namely the Royal

Victoria Infirmary in Newcastle and the Leeds General Infirmary, about potential new projects and

hope to move these plans forward over the coming year.

The charity's mission and vision remain unchanged. The trustees are encouraged by the year's

results and look forward to another successful year.

11


Structure, governance and management

Constitution

The SCT is a company registered in England and Wales under company number 01618435 and is governed by its memorandum and articles of association. It does not have share capital and the

liability o f members is limited by guarantee.

The SCT is a charity under the terms o f Section 3 o f the Charities Act 1993 and the registration number is 284416.

The principal activity o f the SCT is to provide essential accommodation and amenities for parents, guardians, relatives and friends o f children undergoing treatment at a number o f leading hospitals around the country. There have been no material changes to this policy in the year under review. We work in collaboration with NHS Hospitals to develop 'Homes from Home' within minutes of the ward.

Management

The management o f the charity is the responsibility o f the trustees who are also the directors o f the charitable company.

The trustees are always looking to have a full complement o f skill sets, so that every member o f the board has something different to contribute to the work o f the charity. The board likes to have at

least eight serving members at any one time, but not more than twelve.

The recruitment o f new trustees takes place in the form o f a tour o f one or two o f our 'Homes from

Home' followed by an interview with one or two o f the existing trustees. Upon a satisfactory interview, the candidate is invited to present his or her credentials at the next trustees' meeting

after which a vote takes place to determine whether the person will become a new trustee.

Policies adopted for the induction and training of trustees

Depending on the role the new trustee has been appointed to fulfil, the trustee will meet with the relevant staff and/or outside agencies with which the charity has any dealings or contact. Courses

are offered within the industry for trustees to attend throughout the year.

Organisational structure and decision making

The trustees collectively are responsible for directing the affairs o f the charity ensuring that it is

solvent, well run and delivering the charitable outcomes for which it was set up, and ensuring compliance with charity law and all other applicable legislation and regulation. The trustees also

12


determine the strategy and key objectives and vote on major policy decisions affecting the charity

which they monitor through regular meetings.

The board meets quarterly and is responsible for the strategic direction and policy o f the charity. Presently the board has members from a variety of professional backgrounds relevant to the work o f the charity. The trustees are responsible for appointing a chief executive (Mrs J Featherstone) and it

is she who is the link between the board and staff.

The chief executive is responsible for ensuring that the charity delivers the services set out in its

objectives, meets its performance targets and that the staff continue to develop their skills and

working methods in line with good practice.

The day to day running o f the head office is the responsibility o f the chief executive with a total staff o f 19 employees. This includes finance and administration, fundraising and communications staff

and senior managers lead in these areas.

The Head o f house operations and house operations manager have responsibility for the day to day

operational management of the 'Homes from Home', and individual supervision o f the house team. The Head o f house operations and house operations manager report directly to the chief executive.

Significant organisational changes

In 2016-17 there have been no key changes in senior personnel.

Public benefit

In accordance with S17 o f the Charities Act 2011, the trustees have referred to the guidance

contained in the Charity Commission's general guidance on public benefit when reviewing the aims and objectives o f the charity and when planning the future activities. The trustees assess how new activities planned will contribute to the overall aims and objectives they have set and periodically

review existing activities to ensure ongoing public benefit.

13


Principal risks and uncertainties

As part o f their responsibilities the trustees ensure that the major risks to which the charity is exposed are reviewed and systems established to mitigate those risks. The Trustees consider the

key risks o f the Charity to be:

• Governance - inadequate strategy, planning, structure or objectives for the charity

• People - loss o f key individuals with appropriate skills, adversely impacting the delivery of

our services

• Operational - inability to provide agreed service across our 10 'Homes from Home'

• IT - systems fail to meet ongoing operational needs o r the risk o f loss resulting from cyber

crime, malicious disruption to our networks o r from theft, misplacing, interception, corruption or deletion o f information

• Financial - lack o f accurate financial information or reporting or fraud, including fundraising

fraud • Environment & External - poor or adverse publicity or external issues which reflect on SCT

• Compliance - inadequate compliance with laws and regulation

Procedures are in place covering Strategic, People, Operational, Financial, IT, Environmental & External, Compliance, Reputation and Data Protection; these are regularly monitored (monthly) and

reviewed on an annual basis by both the management and Board o f Trustees.

A Risk sub-group (comprising three trustees, the CEO and an independent representative) is in place to ensure that the SCT's risks are assessed on a periodic basis and for any issues identified,

appropriate remediation plans are put into place and tracked to completion in a timely manner.

14


Statement of trustees' responsibilities

The trustees (who are also directors o f The Sick Children's Trust for the purposes of company law) are responsible for preparing the Trustees report and the financial statements in accordance wi th

applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Company law requires the trustees to prepare financial statements for each financial year. Under company law the trustees must not approve the financial statements unless they are satisfied that

they give a true and fair view o f the state o f affairs o f the charitable company and o f the incoming resources and application o f resources, including the income and expenditure, o f the charitable company for that period. In preparing these financial statements, the trustees are required to:

• select suitable accounting policies and then apply them consistently;

• observe the methods and principles o f the Charities SORP;

• make judgments and accounting 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 financial statements;

• prepare the financial statements on the going concern basis unless it is inappropriate to

presume that the charitable company will continue in operation.

The trustees 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 o f the charitable company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the

assets o f the charitable company and hence for taking reasonable steps for the prevention and detection o f fraud and other irregularities.

Disclosure of information to auditors

Each o f the persons who are trustees at the time when this trustees report is approved has confirmed that:

• So far as that trustee is aware, there is no relevant audit information o f which the charity's

auditors are unaware, and

• That trustee has taken all the steps that ought to be taken as a trustee in order to be aware

o f any relevant audit information and to establish that the company's auditors are aware of

that information.

This report was approved by the board on 12 September 2017 and signed on its behalf by.

Fiona Smart (Trustee)

15

The Sick Children's Trust Independent Auditors' Report t o the Members

We have audited the financial statements o f The Sick Children's Trust for the year ended 31 March 2017. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

This report is made solely to the charitable company's members, as a body, in accordance with Chapter 3 o f Part 16 o f the Companies Act 2006. Our audit work has been undertaken so that we might state t o the company's members 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 t o any party other than the charitable company and charitable company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective Responsibilities of Trustees and Auditors As explained more fully in the Trustees' Responsibilities Statement, the trustees (who are also the directors o f the charitable company for the purposes o f company law) are responsible for the preparation o f the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance wi th applicable law and International Standards on Auditing (UK and Ireland). Those standards require us t o comply with the Auditing Practices Board's (APB's) Ethical Standards for Auditors.

Scope o f the audit o f the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud o r error. This includes an assessment of: whether the accounting policies are appropriate to the company's circumstances and have been consistently applied and adequately disclosed; the reasonableness o f significant accounting estimates made by the directors; and the overall presentation o f the financial statements. In addition we read all the financial and non-financial information in the trustees' report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course o f performing the audit. If we become aware o f any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on the financial statements In our opinion the financial statements: • give a true and fair view o f the state of the charitable company's affairs as at 31 March 2017 and

o f its incoming resources and application o f resources, including its income and expenditure, for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements o f the Companies Act 2006.

Opinion on other matters prescribed by the Companies Act 2006 In our opinion the information given in the trustees' report for the financial year for which the financial statements are prepared is consistent with the financial statements.

16

The Sick Children's Trust Independent Auditors' Report t o the Members (Continued)

In the light o f our knowledge and understanding o f the company and its environment obtained in the course o f the audit, we have not identified material misstatements in the trustees' report.

Matters on which we are required to report by exception We have nothing to report in respect o f the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept or returns adequate for our audit have not been received from branches not visited by us; or

• the financial statements are not in agreement with the accounting records and returns; or • certain disclosures o f trustees' remuneration specified by law are not made; or • we have not received all the information and explanations we require for our audit; or • the trustees were not entitled to prepare the financial statements in accordance with the

small companies regime and to take advantage o f the small companies exemption from the requirement to prepare a strategic report o r in preparing the trustees' report.

Anne Hallowell BA DChA (Senior Statutory Auditor) fo r and on behalf o f UNW LLP, Statutory Auditor Chartered Accountants Newcastle upon Tyne

Date: 12 September 2017

17

The Sick Children's Trust Statement of Financial Activities for the year ended 31st March 2017

Note Unrestricted

funds Restricted

funds Total 2017

Total 2016

Income and endowments f rom: Donations and legacies Other trading activities Investments

1,571,212 248,210

1,949

596,261 3,767

2,167,473 251,977

1,949

2,181,033 327,145

3,496

Total

Expenditure on: Raising funds Charitable activities

Total

Net income / expenditure

1,821,371 600,028 2,421,399

509,583 - 509,583 263,557 1,393,259 1,656,816

773,140 1,393,259 2,166,399

1,048,231 (793,231) 255,000

2,511,674

588,804 1,510,596

2,099,400

412,274

Transfers between funds

Net income after transfers

Reconciliation o f funds

Funds at 1st April 2016

14 (749,189) 749,189

299,042 (44,042) 255,000 412,274

9,133,248 261,416 9,394,664 8,982,390

Funds at 31st March 2017 14 9,432,290 217,374 9,649,664 9,394,664

All amounts relate to continuing operations. There are no other recognised gains and losses other than those shown above.

The notes on pages 21 to 31 form part of these financial statements.

18

The Sick Children's Trust Balance Sheet as at 31st March 2017

Notes

Fixed assets Tangible fixed assets

Current assets Debtors and prepayments Cash at bank and in hand

Creditors: amounts falling due within one year

Net current assets

Total assets less current liabilities

Creditors: amounts falling due after more than one year

10

2017 £

129,260 2,862,305

2,991,565

(177,410)

2017 £

6,881,996

2,814,155

9,696,151

(46,487)

2016 £

93,529 2,402,299

2,495,828

(184,147)

2016 £

7,132,080

2,311,681

9,443,761

(49,097)

Net assets 9,649,664 9,394,664

Represented by:

Restricted funds

Unrestricted funds Designated funds - Fixed assets Designated funds - Capital projects General unrestricted funds

217,374

6,881,996 1,400,000 1,150,294

261,416

7,132,080 800,000

1,201,168

Total funds 14 9,649,664 9,394,664

These accounts have been prepared in accordance with the provisions applicable to companies

subject to the small companies regime.

The financial statements were approved and authorised for issue by the board and were signed on

its behalf on 12 September 2017.

Fiona Smart (Trustee)

Registered company number 01618435

The notes on pages 21 to 31 form part o f these financial statements.

19

The Sick Children's Trust Statement of Cash Flows for the year ended 31st March 2017

Note 2017 2016

Cash flows from operating activities: Net cash provided by/(used in) operating activities 12 570,268 639,170

Cash flow from investing activities Interest received Payments to acquire fixed assets

1,949 (112,211)

3,496 (93,628)

Net cash provided by/(used in) financing activities (110,262) (90,132)

Change in cash and cash equivalents in the year 460,006 549,038

Cash and cash equivalents at the beginning o f the year 2,402,299 1,853,261

Net funds at end o f year 2,862,305 2,402,299

The notes on pages 21 to 31 form part o f these financial statements.

20

The Sick Children's Trust Notes to the Financial Statements for the year ended 31st March 2017

1 Accounting Policies

Basis o f accounting

The financial statements have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS102) (effective 1 January 2015) - (Charities SORP (FRS 102)), the Financial Reporting Standard applicable in the UK and Republic of Ireland

(FRS 102) and the Companies Act 2006.

The financial statements are prepared in sterling which is the functional currency of the charity and are

rounded to the nearest £1.

The charity meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy.

Company status

The charity is a company limited by guarantee. The members of the company are the members of the Council of Management named in the annual report. In the event of the charity being wound up, the liability in respect of the guarantee is limited to £1 per member of the charity.

Fund accounting

Unrestricted funds are funds which are available for use at the discretion of the trustees in furtherance of the general objectives of the charity and which have not been designated for other purposes.

Restricted funds are funds which are to be used in accordance with specific restrictions imposed by donors or which have been raised by the charity for particular purposes.

The cost of raising and administering such funds are charged against the specific fund.

Investment income is allocated to the appropriate fund.

Income

All income is included in the statement of financial activities when the charity is legally entitled to the income, receipt is probable and the amount can be quantified with reasonable accuracy. Where income is performance related it is deferred or accrued into the period to which it relates. For legacies, entitlement is the earlier of the company being notified of an impending distribution or the legacy being received.

Donated income represents donations, covenanted income and income from fundraising activies, received and banked in the year, and donations certified as held by third parties at the year end on behalf of the Trust. Gifts in kind are recognised when the value can easily be identified.

Income received in relation to fundraising events or lottery draws that have not yet taken place is deferred into the period in which the event that gives rise to the income occurs.

Income tax recoverable in relation to donations received under Gift Aid or deed of covenant is recognised at the time of the donation.

21

The Sick Children's Trust Notes t o the Financial Statements for the year ended 31st March 2017 (Continued)

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. The majority of costs are directly attributable to specific activities. Where costs cannot be directly attributed to particular headings they have been allocated to activities on a staff time basis consistent with use of resources and estimated amount attributable to that activity in the year.

Cost of activities in furtherance of the charity's objects represents expenses incurred in the running of the Trust's homes.

Fundraising costs are those incurred in seeking voluntary contributions and do not include the costs of disseminating information in support of charitable activities.

Support costs are those incurred directly in support of expenditure on the objects of the company, including those incurred in connection with the administration of the company and compliance with constitutional and statutory requirements.

All resources expended are inclusive of irrecoverable VAT.

Tangible fixed assets and depreciation Tangible assets are stated at cost less depreciation. Depreciation is provided on all tangible fixed assets at rates calculated to write off the cost, less their estimated residual value, over their expected useful economic lives at the following rates:

Freehold property: over the shorter of 40 years or its estimated remaining useful life, on a

Assets purchased at a cost of less than £1,000 are expensed in the year of purchase.

Trade debtors Trade and other debtors are recognised at the settlement amount after any trade discount offered. Prepayments are valued at the amount repaid net of any trade discounts due.

Cash at bank and in hand Cash at bank and in hand includes cash and short term highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account.

Creditors are recognised where the company has a present obligation resulting from a past event that will probably result in the transfer of funds to a third party and the amount due to the settle the obligation can be measured or estimated reliably. Creditors are normally recognised at their settlement amount after allowing for any trade discounts due.

Furniture and office equipment: Website:

Leasehold property: straight line basis over the shorter of the period of the lease or its estimated remaining useful life, on a reducing balance basis 20% per annum, straight line basis 3 years, straight line basis

Creditors

22


Finance leases

Assets obtained under finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the company. Obligations under such agreements are included in creditors net of the finance charge allocated to future period.

Pensions The Trust has one member who is a participant in The Pensions Trust Growth Plan Scheme which is a multiemployer defined benefit scheme. The charity is unable to identify its share of the underlying assets and liabilities and therefore accounts for this scheme as if it was a defined contribution scheme. Accordingly contributions are charged to the statement of financial activities as they become payable.

The Trust also participates in a defined contribution scheme with Scottish Widows. The assets of the scheme are held separately from those of the Trust in an independently administered fund, and contributions to the scheme are charged to the SOFA as they fall due.

Critical accounting estimates and areas o f judgement

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

In preparing these financial statements the directors do not consider there were any significant areas of judgement that were required in applying the company's accounting policies as set out above.

23

The Sick Children's Trust Notes to the Financial Statements for the year ended 31st March 2017 (Continued)

2 Donations and legacies

2017 2016 Donations and legacies Unrestricted Restricted Total Total

£ £ £ £ Legacies & covenants 37,541 - 37,541 225,000 Donations & appeals 1,481,198 596,261 2,077,459 1,935,049 Gifts in Kind 52,473 - 52,473 20,984

1,571,212 596,261 2,167,473 2,181,033

Gifts in kind comprise Head Office space.

Analysis of total income

Donations Other Invest 2017 2016 and trading ments

legacies activities Total Total £ £ £ £ £

Supporter events and activities 509,821 100,948 - 610,769 457,912 Events programme 53,613 108,759 - 162,372 252,268 Corporate 340,649 - - 340,649 438,019 Charitable Trusts 329,814 - - 329,814 407,368 Hospitals 177,110 - - 177,110 140,808 Community 208,913 - - 208,913 118,679 Income from houses 168,259 16,280 - 184,539 154,344 Other income 128,819 25,990 1,949 156,758 115,123 Major Gifts 57,210 - - 57,210 115,925 Donations in memoriam 103,251 - - 103,251 65,244 Legacies 37,541 - - 37,541 225,000 Gifts in kind 52,473 - - 52,473 20,984

2,167,473 251,977 1,949 2,421,399 2,511,674

24


Total resources expended

Basis o f Costs of Charitable 2017 2016 allocation raising activities

funds

Costs directly allocated to activities £ £ £ £ Staff costs (note 6) Direct 314,301 782,769 1,043,070 1,000,295 Property costs Direct 3,956 266,417 270,373 252,380 Advertising & publications Direct 26,404 23,274 49,678 59,355 Professional fees Direct 7,058 50,472 57,530 32,080 Recruitment & training Direct 3,781 12,752 16,533 19,917 Events Direct 67,283 26,151 93,434 111,749 Catering Direct 47 257 304 1,494 Equipment rental Direct 185 151 336 87 Insurance Direct 5,157 20,603 25,760 21,080 Merchandising costs Direct 30 10,815 10,845 11,015 Audit & accountancy Direct - 10,020 10,020 11,260 Depreciation Direct - 362,295 362,295 354,883

Support costs allocated to activities Staff costs (note 6) Headcount 57,596 86,393 143,989 131,105 Postage & telephone Headcount 7,244 10,764 18,008 21,423 Stationery Headcount 2,492 6,539 9,031 9,401 T ravel Headcount 2,564 18,137 20,701 24,748 Recruitment & training Headcount 522 1,760 2,282 2,346 Sundry (incl computing costs) Headcount 10,251 18,403 28,655 32,299 Insurance Headcount 712 2,844 3,556 2,483

509,583 1,656,816 2,166,399 2,099,400

At 31 March 2016 588,804 1,510,596

4 Net increase in funds

The net increase in funds is arrived at after charging:

2017 2016 £ £

Depreciation 362,295 354,883 Auditor's remuneration 10,020 9,780 Hire o f equipment 336 87

25


5 Taxation

The company is considered to pass the tests set out in Paragraph 1 Schedule 6 of the Finance Act 2010 and therefore it meets the definition o f charitable company for UK corporation tax purposes. Accordingly the company is potentially exempt from taxation in respect o f income or capital gains received within categories covered by Chapter 3 Part 11 o f the Corporation Tax Act 2010 or Section 256 o f the Taxation o f Chargeable Gains Act 1992 to the extent that such income or gains are applied exclusively to charitable purposes.

6 Staff costs

2017 2016 £ £

Salaries and wages 1,036,738 988,480 Social security costs 89,911 85,616 Pension costs 60,410 57,304

1,187,059 1,131,400

No employees received emoluments in excess o f £60,000 during the year.

The average number o f full time equivalent employees analysed by function was:

2017 2016 Number Number

House managers and assistants 17 18 Management & administration o f the charity 5 4 Cost o f generating funds 15 14

37 37

The average number o f employees analysed by function was:

2017 2016 Number Number

House managers and assistants 26 25 Management & administration of the charity 5 5 Cost o f generating funds 16 16

47 46

None o f the Members o f the Council, nor the President and Vice-Presidents, received any remuneration from the Trust during the year. Total expenses o f £nil (2016: £nil), relating to travel on Trust business, were reimbursed to trustees during the year.

26


6 Staff costs (continued)

Key management personnel

Key management personnel are deemed to be those having authority and responsibility, delegated to them by the full board o f trustees for planning, directing and controlling the activities o f the charity. During 2016/17 they were:

• S Cartwright • J Darling • L D'Angelo • J Featherstone • A Fisher • S Fuller • PJardine -trustee • F Smart - trustee

The total employee benefits o f the key management personnel o f the charity were £253,985 relating to FTE equivalent o f 6 (2016: £235,371 relating to FTE equivalent o f 6).

7 Tangible Fixed Assets

Freehold Short Furniture Property Leasehold 8i Office

Property Website Equipment Total £ £ £ £ £

Cost At 1 April 2016 957,775 9,516,340 17,813 707,800 11,199,728 Additions - 81,983 - 30,228 112,211 Transfers - 23,921 - (23,921) -

At 31 March 2017 957,775 9,622,244 17,813 714,107 11,311,939

Depreciation At 1 April 2016 379,747 3,112,872 17,813 557,216 4,067,648 Charge for year 23,943 302,172 - 36,180 362,295

At 31 March 2017 403,690 3,415,044 17,813 593,396 4,429,943

Net Book Value At 31 March 2017 554,085 6,207,200 - 120,711 6,881,996

At 31 March 2016 578,028 6,403,468 . 150,584 7,132,080

The retention o f the above properties at 31 March 2017 is intrinsic to the Trust continuing to meet its charitable aims o f providing essential accommodation and amenities to relatives and friends of patients undergoing treatment. Accordingly, the trustees generally have no intention to dispose o f

the Trust's properties.

27


8 Debtors

2017 2016 £ £

Trade debtors 1,715 40,595 Other debtors 80,792 40,989 Prepayments & accrued income 46,753 11,945

129,260 93,529

All amounts included within debtors fall due within one year.

9 Creditors: Amounts falling due within one year

2017 2016 £ £

Trade creditors 69,367 19,059 Taxation and social security 23,588 22,328 Other creditors 8,827 8,757 Accruals and deferred income 75,628 134,003

177,410 184,147

Deferred income £

Deferred income at 1 April 2016 36,192 Resources deferred during the year 39,082 Amounts released from previous years (36,192)

Deferred income at 31 March 2017 39,082

10 Creditors: Amounts falling due after more than one year

2017 2016 £ £

Defined benefit pension liability (note 15) 46,487 49,097

28


11 Commitments under operating leases

At 31 March 2017 the company had future minimum lease payments under non cancellable operating leases as follows:

2017 2016 £ £

Not later than 1 year 75,516 Later than 1 year and not later than 5 years 151,032 -

226,548

12 Reconciliation of net Income/expenditure to net cash flow from operating

activities

2017 2016 £ £

Net income for the year 255,000 412,274 Interest receivable (1,949) (3,496) Depreciation charge 362,295 354,883 Decrease in debtors (35,731) 17,789 (DecreaseJ/increase in creditors (9,347) (142,280)

Net cash provided by/ (used in) operating activities 570,268 639,170

13 Analysis o f Net Assets be tween Funds

Unrestricted General Designated Restricted Total

£ £ £ £

Tangible fixed assets - 6,881,996 - 6,881,996 Net assets 2,594,336 - 173,332 2,767,668

2,594,336 6,881,996 173,332 9,649,664

29


14 Statement of Funds

Balance b / f at 1 Incoming

April 2016 Resources £

Resources expended

£

Transfers between

funds £

Balance c / f at 31 March

2017 £

Restricted funds General Unrestricted Funds Designated Funds - Fixed assets Designated Funds - Capital projects

261,416 1,201,168 7,132,080

600,028 (1,393,259) 749,189 217,374 1,821,371 (773,140) (1,099,105) 1,150,294

(250,084) 6,881,996

800,000 600,000 1,400,000

Total funds 9,394,664 2,421,399 (2,166,399) 9,649,664

Restricted funds represent balances where funds have been raised for specific purposes and not yet spent. Each o f the "Home from Homes" has a restricted fund where income has been received specifically for that house, and these funds are used towards the running costs o f that particular house in any given year.

Designated funds - Fixed Assets represent the value o f fixed assets held on the balance sheet. The funds are designated to demonstrate that the funds have been ringfenced by the trustees and are not freely available to spend. The transfer from general to designated funds represents the movement in these fixed assets in the year.

Designated funds - Capital Projects represent the value of those funds set aside for specific future capital projects including upgrades to the houses which we expect to be carried out in the next 2-3 years and new houses that are currently under discussion. The funds are designated to demonstrate that the funds are tied up in capital and are not freely available to spend. The transfer from designated to general funds represents the movement in these 'tied up funds' in the year.

15 Pension schemes

The Pensions Trust Growth Plan Scheme

The Trust participates in The Pensions Trust Growth Plan Series 3 Scheme which is a multi-employer defined benefit scheme. At 31 March 2017 the Trust has one active member in the Scheme.

The Trust is unable to identify its share of the underlying assets and liabilities as each employer is exposed to actuarial risks associated with the current and former employees o f other entities participating in the Scheme. The scheme is currently in deficit, arising from changes in pension legislation and resulting in all employers becoming liable for additional accrued benefits under the scheme, although no additional payments to the scheme have been requested for Series Three members to date.

Where the assets and liabilities cannot be separately identified, FRS 102 requires the Trust t o account for pension costs on the basis o f contributions actually payable to the Scheme in the year.

30


Contributions for the year totalled £5,110 (2016: £4,937) and £466 (2016: £0) are outstanding at the year end.

FRS 102 requires agreed deficit recovery payments to be recognised as a liability. The balance sheet liability at 31 March 2017 was £46,487 (2016: £49,097).

The Plan's buy-out deficit reduced overall to £217.1m in 2016, a decrease o f £13.5m from 2015. This improvement is largely due to greater than expected investment returns, at a time o f reduced government bonds yields, which increase liabilities in the scheme.

When an employer withdraws from a multi-employer defined benefit (DB) pension scheme where it is in deficit, the employer must - by law - to pay its share o f the deficit, calculated on a statutory basis known as the buy-out valuation basis.

The estimated cost o f withdrawal has been calculated to be £103,261. This figure has an effective date o f 30 September 2015.

Scottish Widows Stakeholder Pension Scheme

The Trust participates in a defined contribution scheme with Scottish Widows.

At 31 March 2017 the Trust has 40 active members in the scheme.

Contributions for the year totalled £52,645 (2016: £39,702). The total amounts outstanding as at the

year end were £4,814 (2016: £4,588).

31

the sick children's trust - gov.uk

Documents