Report & Accounts 2011/12. Charity No

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1 Report & Accounts 2011/12 Charity No

2 Contents 4 Chairman s Message 5 Trustees 6 Professional Advisers 7 Staff 8 Our Mission 8 Our Commitment to Patients and Public Benefit 8 Our Principal Objectives 8 Grants Strategy 11 Financial Overview 12 Our Plans for Next Year Investment Policy 12 Reserves Policy 12 Governance 14 Statement of Trustees Responsibilities 15 Independent Auditor s Report 16 Financial Statements The King s College Hospital Charity is one of 294 NHSlinked Charities in England and Wales. The Charity was a founder Member Charity of the Association of NHS Charities (registered Charity number ), details of which may be found on the Association s website The Charity is pleased to be a Member of the Association, an organisation seeking to enhance the standing and work of all NHS Charities.

3 Report & Accounts 2011/12 Trustees of the King s College Hospital Charity and Other Related Charities Registered Charity Copies of this Report and Accounts for 2011/2012 may be obtained from: Director King s College Hospital Charity Denmark Hill London SE5 9RS or viewed on the Charity Commission s website:

4 Chairman s message The Charity s overarching aim is to contribute towards the improvement of healthcare for the benefit of patients. The very difficult financial environment that now confronts all charities has greatly affected our ability to continue many of our grants as our investment income has reduced by a third since Despite this we were still able to fund activities in our four priority areas. To enhance the involvement of staff, volunteers and the community, the Charity has been able to continue its support for King s College Hospital s Volunteer Programme which is aiming in to repeat the achievement of recruiting 500 trained volunteers. Levels of patient satisfaction are increasing on the wards which have a regular volunteer presence. To support the development of staff and their skills we have funded a range of staff development opportunities in the hospital which encourage and recognise exemplary service. To contribute towards leading edge research, this year we have contributed matched funding towards a new King s Health Partners Research and Development Challenge Fund and have made a further grant from a fundraising appeal for the Cell Therapy Unit in the new Clinical Research Facility on the Denmark Hill campus. To support the specialties for which King s College Hospital is renowned, the Charity has continued to support over 100 areas of clinical work through the 8 million of Designated Funds which it administers with the clinical fund-holders. It has recently been confirmed that in the future the Charity will support some of the cost of a new Chair in neuro-trauma. In total, the Charity made grants of 2.383m from both the Designated and General Funds in For a decade the Charity has been paying the operating costs of the fundraising department at the Foundation Trust and about half of the 12m in income from donations over the past 6 years has been raised from the hospital s specific fundraising appeals. This changed early in 2011 when the Charity entered a Fundraising Partnership with the Kings Health Partners (KHP) Academic Health Science Centre, (King s College Hospital, Guy s and St Thomas and the South London and the Maudsley Foundation Trusts with their associated NHS charities, and King s College London). As part of this agreement, all fundraising has been unified under the King s College London fundraising directorate. We have agreed to fund a share of the costs of this unified unit until July The agreement recognised fundraising priorities including cancer, children s services, neurosciences, mental health and trauma/critical care (itself a key service for King s). We continue to be grateful for the support and close links that we have with King s College Hospital NHS Foundation Trust, including the network of around 300 Fund Advisors who work to ensure that charitable are raised and applied as effectively as possible for the benefit of their patients. I should like to take this opportunity to express our particular appreciation to Heather Gilmour, whose seven year term as a Trustee came to an end in the autumn of It was a pleasure to welcome Dr. Marion Mackay in her stead. Once again, all my Trustee colleagues have been unwavering in their support for the work of the Charity for which I am personally very grateful. As I retire in September 2012 at the end of my 8 year tour as Chairman, I can reflect on the very real achievements of the Charity most recently, for example, the purchase of a dedicated scanner in the A&E department, our support for a highly regarded volunteer programme and grants towards a number of the major new academic institutes at Denmark Hill such as the James Black Centre, and the Cicely Saunders Palliative Care Institute. Fundraising for the refurbishment of the Variety Club Children s Hospital was another significant achievement and there are many hospital departments which have benefited from the support provided by the Charity s Small Grants Programme. In these difficult financial times we are particularly grateful to all of our supporters who give so generously to King s and its Charity. The Trustees will continue to strive to ensure that the beneficiaries of such gifts will be the patients and those who work at the hospital to care for them. Finally, our thanks go also to the Charity s small team of employees for all their hard work and dedication during the year. Anthony Merifield, Chairman 4

5 Trustees Sir Anthony Merifield KCVO CB Appointed from 1 October 2004 to 30 September 2012 Former Civil Servant in the Department of Health (& Social Security) and the Cabinet Office Former Member of the NHS Management Board Formerly Chairman of Centre 70 Lambeth Ms Heather Gilmour MA Appointed from 1 October 2004 to 27 September 2011 Former Non-Executive Director and Vice Chairman of King s College Hospital NHS Trust Ms Linda Smith BA (Hons) MBA FCIPD Appointed from 8 January 2010 to 7 January 2014 Director, Change-fx Consulting Former Chair of the South East London Strategic Health Authority Former Trustee of Guy s & St Thomas Charity Independent Chair of Southwark & Lambeth NHS Transformation Partnership Board Mr John Beck MA (Oxon) Appointed from 1 December 2010 to 30 November 2014 Co Director of the International Fixed Income Board of Franklin Templeton Investment Management Ltd and Trustee of the Company s UK Pension Scheme King s College Hospital Charity has an Investment Sub-Committee whose membership is as follows: Mr John Beck Chairman from 1 December 2010 Ms Caroline Hewitt From 1 October 2009 Sir Anthony Merifield From 1 October 2004 Objects The objects of the Charity are for any charitable purpose or purposes relating to the general or specific purposes of King s College Hospital NHS Foundation Trust or the purposes of the Health Service (as described in Section 1 of the NHS Act 2006 or any statutory modification of that section) Ms Caroline Hewitt BA (Hons) Appointed from 1 January 2008 to 31 December 2015 Chair of NHS South East London Former Chair of Lambeth Primary Care Trust Former Non-Executive Director and Vice-Chairman of King s College Hospital NHS Foundation Trust Dr Marion Mackay FRCP(C) Appointed from 1 December 2011 to 30 November 2015 Magistrate on the Buckinghamshire County Bench Former consultant anaesthetist and Vice President as a pharmaceutical physician with GlaxoSmithKline Former Non-Executive Director with Buckinghamshire PCT and member of the South Sub-committee of ACCEA (Advisory Committee for Clinical Excellence Awards) Former Chairman of Ronald McDonald House Charities 5

6 Professional Advisers Bankers Lloyds Bank plc 25 Camberwell Green London SE5 7AB Legal Advisers Withers LLP 16 Old Bailey London EC4M 7EG Investment Managers Cazenove Capital Management Ltd 12 Moorgate London EC2R 6DA Legal & General Investment Management Ltd One Coleman Street London EC2R 5AA Financial Advisers WM Performance Services (until April 2012) World Markets House Crewe Toll Edinburgh EH4 2PY External Auditors Kingston Smith LLP Chartered Accountants Devonshire House, 60 Goswell Road, London EC1M 7AD Internal Auditors Mazars LLP 45 Church Street Birmingham B3 2RT Chartered Surveyors Nigel Carter & Co 40 Westwood Park Forest Hill London SE23 3QH 6

7 Staff Director Mrs Mary Bishop FRSA MBA Office Manager and Personal Assistant to Director Mr John Rayson MA From 3 May 2011 Treasurer Mr Keith Ford OBE CPFA Accountant Miss Kerry Jessiman ACCA Assistant Accountant Ms Monique Matthieu Offices located at King s College Hospital 2 Binfield Court 111 Coldharbour Lane London SE5 9NT Postal Address King s College Hospital Charity King s College Hospital Denmark Hill London SE5 9RS Telephone & Contact kch-tr.charity@nhs.net Website John Collinson OBE Trustees and Staff were saddened to hear of the death, in July 2012, of John Collinson, who was the Director of the Charity from 1996 until his retirement in March Before that he had held positions as an NHS manager, having been appointed initially as House Governor/Secretary to the Board of Governors of King s College Hospital in His long contribution to King s, and the Charity, was widely admired. 7

8 Our Mission The Charity s mission is to assist and support the King s College Hospital NHS Foundation Trust and, where considered appropriate, other bodies relating to the NHS in England in order to enhance services and facilities for patients and the working environment for staff, and to support research for the ultimate benefit of patients. Our Commitment to Patients and Public Benefit The Trustees agreed four high level objectives for the financial year 2011/2012, which are summarised below. The Trustees confirm that they have taken into account the Charity Commission s Guidance on public benefit in reviewing the Charity s strategic objectives; in setting their grant-giving policies for and planning their future activities. The Trustees are committed to ensuring that patients are the ultimate beneficiaries from their grant giving. Our Principal Objectives and Activities for the Public Benefit in 2011/2012 A summary of the main activites and progress that has been made against each of the Charity s four principal objectives is provided below: Objective 1: To develop a pro-active grant-giving strategy that directs funding to key areas for the benefit of patients. The Charity delivers its mission by providing grants which contribute towards the overall improvement of healthcare for patients. The Charity seeks evidence of positive impact from its grants on health improvement. Our mission sets out our strategic alignment with King s College Hospital NHS Foundation Trust as our principal beneficiary. We also work with King s Health Partners in its ambition for excellent teaching and clinical care, underpinned by world class research and the wider NHS. Over the past twelve months the Charity has consulted with colleagues in King s College Hospital NHS Foundation Trust on the development of a pro-active grants strategy. The strategy has been conditioned by three factors: the fall in the value of the General Fund to around 8m, the Trustees decision to shield the Designated Funds from the volatility of the stock market and the recognition that due to the difficult investment environment the Charity has less income than in the past to distribute as grants. Our new grant strategy is as follows. Grants Strategy Our strategic priorities are to improve patient care by: Enhancing the involvement of employees, volunteers and the community Supporting the development of staff and their skills Contributing to leading edge research Providing support for the key specialties at King s College Hospital. A summary of the Grants Strategy for 2011/2012 and the major grants awarded under each priority theme is set out below. Theme 1: To improve the quality of patient care by enhancing the involvement of employees, volunteers and the community Case Study: King s College Hospital Volunteering Programme In the Charity awarded an initial grant of 100,000 to enable King s College Hospital to develop its Volunteer Programme throughout The Programme has been a huge success, and delivered 500 trained volunteers in place by April 2012, a quadrupling of previous provision. The new volunteers are atypical of other voluntary programmes: 75% of new volunteers are under the age of 35, and are representative of the diversity of the local community that the hospital serves. Levels of patient satisfaction are increasing on the wards which have a regular volunteer presence, and the ambition for 2012/13, as well as sustaining the current programme, is to achieve coverage across all areas of the Foundation Trust by doubling the size of the cohort to 1,000. Much of this success has been due to the provision of a dedicated Volunteer Project Manager. In the light of the positive outcomes achieved through the Volunteer Programme, the Charity agreed this year to award a further grant of 70,000 to cover the costs of the Volunteer Project Manager for 2012/13. The Charity has also provided some smaller grants to King s College Hospital for patient and staff engagement. For example, this year we provided a grant for the King s Commendation Awards which recognise outstanding contributions from employees. We also funded the development of a patients questionnaire that will comprehensively assess the current service provided to patients undergoing combined orthodontic treatment and facial surgery. 8

9 Theme 2: To improve local community health by supporting the development of staff and their skills This year the Charity has continued to support the Foundation Trust s staff in improving their skills to deliver high quality patient-centred care. The King s Development Awards Programme and the Charity s Designated Funds have supported employees to have access to a wide range of additional development and training opportunities. Theme 3: To contribute to leading edge research The Charity contributed a grant of 100,000 funding towards a new King s Health Partners initiative to encourage more research. The KHP Research and Development Challenge Fund assists employees to develop innovative ideas to respond to recent and emerging medical challenges and also pump-primes new research. We also gave some small grants for research projects in King s College Hospital and funded research from some of the Designated Funds. Our grants fund researchers and students of healthcare and academic bodies who use these in their work to ultimately improve the lives of patients. Any benefit received by researchers or students is purely incidental to the objects of our work. In 2011/2012, the Charity also made a further grant from the Acorns to Oaks fundraising appeal for the Cell Therapy Unit in the new Clinical Research Facility on the Denmark Hill campus. Theme 4: To support the specialties of King s College Hospital, particularly those which have a resonance with the local community The Charity supports a wide range of specialties across the hospital each year through the administration of around 150 Designated Funds. Case study: Trauma In the Trustees made a large grant to the King s College Hospital NHS Foundation Trust for a new CT Scanner for the Emergency Department, together with ward equipment in support of the programme for enhancing Major Trauma and Stroke Services. King s College Hospital has been designated as both a Hyper Acute Stroke Unit and Major Trauma Centre for south east London. The purchase of a 1 million state-ofthe-art scanner located in the Emergency Department has enabled the Staff Team to translate their vision of a straight to CT scanner admission into reality. The work of the Emergency Department can be seen in Channel 4 s award winning documentary series 24 hours in A&E. The Trustees have continued to support this important area of work in 2011/12 through the provision of particular Designated Funds and have recently agreed with the Foundation Trust and King s College London to collectively fund a Chair of Neuro Trauma. Summary of Grants In total, the Charity made grants of 2.383m in 2011/2012, as set out below. Individual grants were awarded for the following: - King s Health Partners Fundraising Support Costs - King s Health Partners Research and Development Challenge Fund - King s College Hospital s Volunteers Programme Summary of other grants were awarded for: - Medical Research Acorns to Oaks Fundraising 405 Appeal for the Cell Therapy Unit in the Clinical Research Facility - Staff Training & Development General Equipment Small Grants Programme Patient Welfare 77 - Staff Welfare & Motivation 39 - Administrative Support for 38 Research and Professional Activities - Miscellaneous 39 TOTAL 2,383 9

10 Trustees pursued three other objectives over the past year, which were designed to maximise the effectiveness of the Charity s grant-making. These were as follows: Objective 2: To continue to develop partnership working with the King s Health Partners NHS charities in order to develop a co-ordinated approach to improving the health outcomes for local people Objective 4: To review governance and operational policies, systems, and processes to continuously improve service quality and increase efficiency and effectiveness Alongside the above, the Charity has undertaken a considerable amount of work to review and update our systems, policies and procedures to increase the efficiency and effectiveness of our grant-giving. Over the past year, the Charity has continued to work in partnership with the two other NHS Charities in King s Health Partners, having jointly funded some partnership projects with Guy s and St Thomas, and the Maudsley, Charities. Objective 3: To develop joint working with the new King s Health Partners Fundraising and Supporter Development Team to maximise fundraising potential In February 2011, King s Health Partners developed a new venture which introduced a collaborative approach to fundraising, with one integrated team raising money for all the partners. This built on the Charity s support for fundraising over the last five years. In addition to raising general for the three King s Health Partners NHS charities, the Partnership Fundraising team has a particular focus on raising philanthropic support for the KHP priority areas of clinical care and research: relating to cancer, paediatrics, neuroscience and mental health of our patients. 10

11 Financial Overview 2011/ /11 Summary Net assets at the start of the year (1 April 2011) 19,219 19,628 Income for the year % - Donations 1,884 4 % - Legacies % - Investment Income 493 2,472 2,031 Increase/(Decrease) in market value of investments (502) 935 Expenditure during the year (2,726) (3,375) The Trustees agreed expenditure on - Grants (2,383) - Grant Support Costs (159) - Fundraising Events (11) - Governance Costs (66) - Investment Management Costs (107) The total net assets value of m is held in the following. 000 Endowment Funds 1,971 Restricted Funds 278 Unrestricted - General Fund 8,203 Unrestricted - Designated Funds 8,011 These are described in more detail in note 2.3 of the accounts. 11

12 Our Plans for Next Year The Trustees have agreed a number of high level objectives for next year, which are summarised below: To implement, and further develop, the Charity s grant-giving strategy in order to maximise the benefits to patients within the available resources To continue the partnership working with King s Health Partners NHS Charities in order to co-ordinate our work in improving the health outcomes for local people To maximise the financial income available for grant-giving by supporting the work of the King s Health Partners Fundraising and Supporter Development Team To continue to review both the Charity s governance and operational policies and processes to continuously improve service quality and increase efficiency and effectiveness. Investment Policy The Trustees Investment Policy that was approved in March 2009 is as follows: Unrestricted Funds The Unrestricted Funds comprising the General Fund and Designated Funds will be backed by investments in: an index-tracking fund (currently the CAF UK Equitrack Fund, accessed via Legal & General Investment Management) a hedge fund for charities (currently The Absolute Return Trust for Charities (ARTC) accessed via Cazenove Capital Management) cash as an investment (currently BlackRock Cash Fund (BR Fund) accessed via Cazenove Capital Management). The proportions allocated to these will be determined from time to time by the Trustees in the light of market conditions, advised by the Investment Sub-Committee. There is one property holding. Endowment Fund The D E Hughes Endowment Fund will be held in the CAF UK Equitrack Fund. Restricted Funds Restricted Funds will be held in cash. Investment Cash Cash held as an investment will be in money market (BR Fund). Exposure to any single bank will be avoided. A cash balance will be maintained at Lloyds TSB for day to day liquidity, and any temporary excess will be transferred to the BR Fund. Reserves Policy The Trustees have a policy of keeping 8m as a Strategic Reserve. The intention is that grants and other expenditure should be constrained so that the unrestricted fund does not fall below 8m, which is therefore available should a strategically important opportunity present itself. At the end of March 2012 the General Fund had fallen to 8.2m. Trustees have set a budget for where expenditure is constrained to match anticipated income; even so, the Strategic Reserve is vulnerable should there be further falls in market values or investments. A further 8m is maintained in the form of Designated Funds, but this figure is not available for strategic purposes. Governance The Trustees The Trustees are appointed as Trustees for the King s College Hospital NHS Foundation Trust under s51 of the National Health Service Act The appointments process has been managed by the Appointments Commission, on behalf of the Secretary of State for Health, and appointments are for a term of office not exceeding four years (but subject to renewal up to a maximum of ten years). All five Trustees are appointed in accordance with the procedures applicable to public appointments, although two must come with a background associated with local NHS interests. All new Trustees are given appropriate induction into their responsibilities as a Trustee, as laid down in the Charity Commission s guidance. At the completion of this induction they are required to confirm formally that they understand and accept their responsibilities as a Trustee. The Trustees elect their Chairman annually. In January 2003, the Charity Commission granted a Certificate of Incorporation to the Trustees, in their capacity as Trustees of the Charity and the other related charities for which they are responsible and which are all registered with the Charity Commission under the umbrella registration for the Charity: King s College Hospital Special Trust; Cancer Treatment & Research Special Trust; David E Hughes Special Trust; King s College Hospital Patients Special Trust. This certificate was updated on 21 March All Trustees give of their time freely and no Trustee remuneration was paid in the year. Details of related party transactions are disclosed in note 7 of the accounts. Trustees are required to disclose all relevant interests and withdraw from decisions where a conflict of interest arises. 12

13 Constitution and Powers The Trustees of the Charity are successors to the Special Trustees, who were established in 1974 by the National Health Service (Reorganisation) Act 1973 as a body of charity trustees, independent of the management of the Hospital, to administer the Hospital s endowment and properties and to receive new charitable. The Trustees activities are principally governed by the Charities Act of 2011 and the Trustee Acts 1925 and On 16 December 1998 the Charity Commission approved a Scheme for the Charity which sets out its formal constitution and the powers of the Trustees in relation to the Charity s assets (including the Trustees power to appeal for ). The Scheme enabled the Trustees to establish the title of the Charity, which was changed in 2007 from the King s College Hospital Charitable Trust to the King s College Hospital Charity. The objects of the Charity were revised in a new Charity Commission Scheme resolved by Trustees on 27 March 2011, which came into force on 11 June 2011 to be for any charitable purpose or purposes relating to the general or any specific purposes of King s College Hospital NHS Foundation Trust or the purposes of the health service (as described in section 1 of the NHS Act 2006 or any statutory modification of that section). Management of risk The Trustees recognise that they are ultimately responsible for all the Charity s assets. During the year they have, with their senior staff, assessed the major risks to which the Charity is potentially exposed, in particular those relating to the operation and financial management of the Charity. With regard to Investment Risk, the Trustees have established an Investment Sub- Committee of three Trustees who, with the Director and Treasurer, will meet not less than twice a year. At least one of these meetings will be attended by an Investment Adviser, (until April 2012 this was undertaken by WM Performance Services), who provide independent advice on the investment performance and prospects. With regard to other risks, the Trustees are satisfied that systems are in place to mitigate their exposure to risk, which will be kept under continual review. Purpose of the Charity The Trustees hold the of the Charity on the trusts prescribed by s93 of the National Health Service Act 1977 (now s220 of the National Health Service Act 2006). The principal aim of the Trustees in fulfillment of these trusts is to invest and use their to the best possible effect, consistent with the Charity s charitable status, to assist and support King s College Hospital, and the National Health Service elsewhere, in enhancing services and facilities for patients and the working environment for staff, and supporting research for the ultimate benefit of patients. King s College Hospital is managed by the King s College Hospital NHS Foundation Trust, with which the Trustees work in close association. 13

14 Statement of Trustees Responsibilities The Trustees are responsible for preparing the Trustees Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). The law applicable to charities in England & Wales requires the Trustees to prepare financial statements for each financial year which give a true and fair view of the state of the affairs of the charity and of the incoming resources and application of resources of the Charity 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 in the Charities SORP make judgements and estimates that are reasonable and prudent state whether applicable 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 Charity will continue in business. The Trustees are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Charity and enable them to ensure that the financial statements comply with the Charities Act 2011 and the provisions of the trust deeds. They are also responsible for safeguarding the assets of the Charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. By Order of the Trustees Chairman Sir Anthony Merifield Date Trustee Caroline Hewitt Date 14

15 Independent Auditor s report to the Trustees of King s College Hospital Charity We have audited the financial statements of King s College Hospital Charity for the year ended 31 March 2012 which comprise the Statement of Financial Activities, the Balance Sheet, the Cash Flow Statement and the related notes. 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 Charity s Trustees, as a body, in accordance with Chapter 3 of Part 8 of the Charities Act Our audit work has been undertaken so that we might state to 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 to any party other than the Charity and Charity s trustees as a body, for our audit work, for this report, or for the opinion we have formed. Respective responsibilities of trustees and auditor As explained more fully in the Trustees Responsibilities Statement [set out on page 14] the Trustees are responsible for the preparation of financial statements which give a true and fair view. We have been appointed as auditor under section 144 of the Charities Act 2011 and report in accordance with regulations made under section 154 of that Act. Our responsibility is to audit the financial statements 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 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 or error. This includes an assessment of: whether the accounting policies are appropriate to the Charity s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the trustees; and the overall presentation of the financial statements. In addition we read all the financial and non-financial information in the annual report to identify material inconsistencies with the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report. Opinion on financial statements In our opinion the financial statements: give a true and fair view of the state of the Charity s affairs as at 31 March 2012, and of its incoming resources and application of resources, 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 of the Charities Act Matters on which we are required to report by exception We have nothing to report in respect of the following matters where the Charities Act 2011 requires us to report to you if, in our opinion: the information given in the Trustees Annual Report is inconsistent in any material respect with the financial statements; or sufficient accounting records have not been kept; or the financial statements are not in agreement with the accounting records and returns; or we have not received all the information and explanations we require for our audit. Statutory auditor Kingston Smith LLP Devonshire House 60 Goswell Road London EC1M 7AD Date Kingston Smith LLP is eligible to act as auditor in terms of Section 1212 of the Companies Act

16 Statement of Financial Activities for the year ended 31 March 2012 INCOMING RESOURCES Incoming From Generated Funds Notes Unrestricted Funds Restricted Funds Endowment Funds Total 2012 Total 2011 Voluntary Income - Donations 1,828, ,828,082 1,163,063 Voluntary Income - Legacies , , ,385 Total Voluntary Income 1,923, ,923,512 1,577,448 Activities for generating 55, ,654 44,804 Investment Income ,811 1, , ,906 TOTAL INCOMING RESOURCES 2,469,978 1,796-2,471,774 2,031,158 RESOURCES EXPENDED Costs of Generating Funds Costs of Generating Voluntary Income , , ,975 Investment Management Costs ,426-4, , ,864 Totol Cost of Generating Funds 113,315-4, , ,839 Charitable Activities Grantmaking 4.3 2,542, ,542,107 2,803,240 Governance Costs , , ,465 TOTAL RESOURCES EXPENDED 2,721,190-4,623 2,725,814 3,375,544 Net Incoming/(Outgoing) Before Transfers (251,213) 1,796 (4,623) (254,039) (1,344,386) Transfers Gross Transfer Between Funds 2.5 (4,623) - 4, NET INCOMING/(OUTGOING) RESOURCES (255,836) 1,796 0 (254,039) (1,344,386) Other Recognised Gains/(Losses) Gains/(Losses) on Investment Assets 5.1 (457,006) - (45,167) (502,172) 935,289 NET MOVEMENT IN FUNDS (712,842) 1,796 (45,166) (756,212) (409,097) Reconciliation of Funds Total Funds Brought Forward ,926, ,354 2,016,479 19,219,498 19,628,595 Total Funds Carried Forward ,213, ,151 1,971,312 18,463,286 19,219,498 16

17 Balance Sheet as at 31 March 2012 Fixed Assets Notes Unrestricted Funds Restricted Funds Endowment Funds Total 2012 Total 2011 Investments ,699,062-1,906,028 18,605,090 19,181,833 Total Fixed Assets 16,699,062-1,906,028 18,605,090 19,181,833 Current Assets Debtors , , ,271 Short Term Investments and Deposits , ,151 65,283 1,275,067 1,715,758 Cash at Bank 104, , ,170 Total Current Assets 1,360, ,151 65,283 1,703,978 2,318,199 Creditors: Amounts Falling Due Within One Year 5.3 1,745, ,745,782 2,124,534 Net Current Assets (385,239) 278,151 65,283 (41,804) 193,665 Total Assets Less Current Liabilities 16,313, ,151 1,971,312 18,563,286 19,375,498 Creditors: Amounts Falling Due After More Than One Year , , ,000 Total Net Assets 16,213, ,151 1,971,312 18,463,286 19,219,498 Funds of the Charity Unrestricted - General & Designated ,213, ,213,823 16,926,665 Restricted , , ,354 Endowment Funds ,971,312 1,971,312 2,016,479 Total Funds 16,213, ,151 1,971,312 18,463,286 19,219,498 By Order of the Trustees Chairman Sir Anthony Merifield Date Trustee Caroline Hewitt Date 17

18 Cash flow statement for the year ended 31 March 2012 Notes 2011/ /11 Net Cash Inflow/(Outflow) from Operating Activities A (694,873) (2,302,349) Capital Expenditure and Financial Investment Purchase of investments - - Proceeds of sale of investments - 3,120,528 Transfer of Land - 14,000-3,134,528 Financing Endowment received - - Management of Liquid (Increase)/Decrease in Short Term Deposits B 440,691 (819,675) Increase/(Decrease) in Cash C (254,182) 12,504 (A) Reconciliation of Changes in to Net Cash 2011/ /11 Inflow/(Outflow) from Operating Activities Net Incoming/(Outgoing) (254,039) (1,344,386) Plus Investment Management Fees paid from Capital 74,571 94,784 Less Endowment received - - (Increase)/Decrease in Debtors (80,653) 275,108 Increase/(Decrease) in Creditors (434,752) (1,327,855) Net Cash Inflow/(Outflow) from Operating Activities (694,873) (2,302,349) (B) Analysis of Change in Short Term Investments 2011/ /11 At 31/03/2011 1,715, ,083 Increase/(Decrease) in year (440,691) 819,675 At 31/03/2012 1,275,067 1,715,758 (C) Analysis of Change in Cash at bank and in hand 2011/ /11 At 31/03/ , ,666 Increase/(Decrease) in year (254,183) 12,504 At 31/03/ , ,170 18

19 Notes to the Accounts 1. Accounting Policies 1.1. Accounting Convention The financial statements have been prepared under the historic cost convention, as modified for the revaluation of certain investments, and in accordance with applicable United Kingdom accounting standards and policies for the NHS approved by the Secretary of State for Health and the Statement of Recommended Practice Accounting and Reporting by Charities issued by the Charity Commission in Incoming a) Recognition All incoming resources including legacies are included in full in the Statement of Financial Activities as soon as the following three factors can be met: i) entitlement - arises when a particular resource is receivable or the Charity s right becomes legally enforceable ii) certainty - when there is reasonable certainty that the incoming resource will be received iii) measurement - when the monetary value of the incoming resources can be measured with sufficient reliability. b) Donated Services and Facilities Not all services received by the Trustees from King s College Hospital NHS Foundation Trust are charged; the sums involved are, however, insignificant and it has not been possible to estimate the actual amount expended The accounts are prepared in accordance with the accruals concept. All expenditure is recognised once there is a legal or constructive obligation to make a payment to a third party. a) Cost of generating The costs of generating are the costs associated with generating income for King s College Hospital Charity. b) Grants payable Grants payable are payments, made to third parties in the furtherance of the Charity s objectives. They are accounted for on an accruals basis where the conditions for their payment have been met or where a third party has a reasonable expectation that they will receive the grant. This includes grants paid to NHS bodies. c) Governance costs These are accounted for on an accruals basis Investment Fixed Assets Investment fixed assets are shown at market value. Property assets are not depreciated but are shown at market valuation. Valuations are carried out by a Chartered Surveyor annually, unless noted otherwise (see note 5.1). Valuation gains and losses are recorded in the Statement of Financial Activities with the balance sheet reflecting the re-valued amounts. Apportionment of investment management costs between the Endowment and Unrestricted Funds (where this information is not provided by the investment manager) is done pro rata according to the respective market values Realised gains and losses All gains and losses are taken to the Statement of Financial Activities as they arise. Realised gains and losses on investments are calculated as the difference between sales proceeds and opening market value (or date of purchase if later). Unrealised gains and losses are calculated as the difference between market value at the year end and opening market value (or date of purchase if later) Pensions Contributions Past and present seconded employees to the Charity from the King s College Hospital NHS Foundation Trust are covered by the NHS Pension scheme. The pension costs are charged to the Statement of Financial Activities when they become due. The Charity Director is a member of a Private Pension Scheme; contributions are not funded by the Charity but as part of a salary sacrifice arrangement Change in the Basis of Accounting There has been no change in the basis of accounting during the year Prior Year Adjustments There has been no prior year adjustments Pooling Scheme Each of the following Charities: Cancer Treatment and Research Special Trust KCH Special Trust KCH Patient Special Trust David E Hughes Endowment Special Trust is registered separately with the Charity Commission under the umbrella registration for the main Charity. The Trustees do not operate a Pooling scheme. Each charity has a separate portfolio. 19

20 2. Funds 2.1. Statement of movement of Funds During 2011/12, the value of all held by the Trustees of the King s College Hospital Charity fell from m to m. The value of the investments held fell by 0.5m. The Net excess of expenditure over income was 0.5m. There was one major draw down from Designated Funds during the year, the Acorns to Oaks appeal, with 0.4m for the Cell Therapy Unit, funded by donations received during 2011/12 for that particular purpose. The table below sets out the movement on the various held: Funds at 31 March 2011 Incoming Expended Transfers Gains/ (Losses) Funds at 31 March 2012 Endowment Funds D E Hughes Special Trust 1,951,194 - (4,623) 4,623 (45,167) 1,906,028 KCH Patients Special Trust 17, ,952 Phyllis O Rourke Endowment 47, ,332 2,016,479 - (4,623) 4,623 (45,167) 1,971,312 Restricted Funds Cancer Treatment and Research 234,344 1, ,644 Phyllis O Rourke Prize Fund ,084 King s College Hospital Special Trust 41, , ,354 1, ,151 Unrestricted Funds Designated 7,734,061 1,706,693 (1,776,552) 346,582-8,010,785 General 9,192, ,286 (944,638) (351,205) (457,006) 8,203,041 16,926,665 2,469,981 (2,721,192) (4,623) (457,006) 16,213,823 All Funds 19,219,498 2,471,777 (2,725,815) 0 (502,172) 18,463, Analysis of net assets between The net assets which back these are as follows: Fixed Assets - Investments 20 Unrestricted Restricted Endowment Funds at 31 March 2012 Funds at 31 March 2011 Cazenove s The Absolute Return Trust for Charities 4,825, ,825,296 5,124,746 Legal and General CAF UK Equitrack Fund 11,483,765-1,906,028 13,389,793 13,707,087 Investment property 390, , ,000 Current Assets - Short term investments 16,699,062-1,906,028 18,605,090 19,181,833 BlackRock Sterling Liquidity First Fund 931, ,151 65,283 1,275,067 1,715,758 Other net current assets/(liabilities) (1,316,871) - - (1,316,871) (1,522,093) Long term liabilities & Provisions (100,000) - - (100,000) (156,000) 16,213, ,151 1,971,312 18,463,286 19,219,498

21 The Absolute Return Trust for Charities is a hedge fund for charities accessed via Cazenove Capital Management, which aims to produce returns of one-month LIBOR plus 4% pa, net of fees, over rolling five year periods. The CAF UK Equitrack Fund, accessed via Legal & General Investment Management, tracks the performance of the UK FTSE All- Share Index. The BlackRock Sterling Liquidity First Fund, accessed via Cazenove Capital Management, is a money market fund which manages risk by holding a spread of investments across a range of banks and corporate bonds. The overall decrease in the capital value of during financial year 2011/12 was 0.502m Description and structure of Funds a) Endowment Funds Funds where the capital is held to generate income for charitable purposes and cannot itself be spent are accounted for as Endowment Funds. Investment income deriving from these Funds is credited to the Unrestricted Funds (General Fund), unless specified otherwise. The D E Hughes Special Trust Fund is a permanent endowment. Income from the Fund is available for the Charity s general purposes. The capital is wholly invested in the CAF UK Equitrack Fund. The KCH Patients Special Trust Fund is a permanent endowment. Income from the Fund is available for general patient expenditure after discharge. The capital is wholly held in short term investments. The Phyllis O Rourke Endowment Fund is a permanent endowment. Income from the Fund is held in a Restricted Fund (see below), for expenditure on prizes for nurses. The capital is wholly held in short term investments. b) Restricted Funds Where there is a legal restriction on the purpose to which a fund may be put, the fund is classified in the accounts as a Restricted Fund. The Cancer Treatment and Research Fund consists of money donated for Cancer Treatment and Research. This Fund is wholly held in short term investments. The Phyllis O Rourke Prize Fund consists of money for prizes for nurses, deriving from the Phyllis O Rourke Endowment Fund (see above). This Fund is wholly held in short term investments. The King s College Hospital Special Trust consists of money donated for King s College Hospital. This Fund is wholly held in short term investments. c) Unrestricted Funds Other are classified as Unrestricted Funds, parts of which are treated as Designated Funds, with the balance remaining as a General Unrestricted Fund. Designated Funds are those not legally restricted but which the Trustees have chosen to earmark for set purposes (see list in note 9). Donations and legacies are allocated to Designated Funds where the donor has given an indication that they wish the to be used for a particular purpose relating to King s College Hospital. The Charity s Operating Instructions for Designated Funds provide that Designated Funds belong legally to the Trustees and that their Terms of Reference should relate to the overall objectives of the Charity. They further provide for the appointment of two Fund Advisers for each Designated Fund, who in practice may confine their use of the fund to a particular department or function of the Hospital. Expenditure up to 10,000 may be authorised, without the prior approval of the Trustees, by either of the named Fund Advisers, but they must do so within the terms of reference of the Designated Fund. Donations and legacies are allocated to the General Fund where the income is given generally for the purpose of patients and staff of King s College Hospital. Expenditure from the General Fund is approved by the Trustees, either specifically as grants, or by approval of a budget for spending. By its nature, some expenditure may benefit patients or staff from a particular department or function, but such expenditure is still recorded as General Fund expenditure in the Accounts. Unrestricted Funds are backed by holdings in the CAF UK Equitrack Fund, the Absolute Return Trust for Charities, a small property holding, short term investments, other current assets & liabilities and long term liabilities (see note 2.2). The proportions in which these holdings are held are adjusted from time to time as determined by the Trustees acting on advice from their Investment Sub- Committee Trustee Policy on allocating interest to Designated Funds The Trustees have set out a policy with the aim to smooth the growth of Designated Funds by crediting them each year with a level of interest which corresponds to the prevailing Bank of England Base Rate Transfers between Funds The Charity splits its Unrestricted Funds into General and Designated. In 2009/10 the classification of Designated Funds was those with delegated Fund Advisers. During 2010/11 we adopted the plan to include as Designated Funds those Unrestricted Funds which Trustees have designated for a specific purpose. During the year the Trustees transferred 300,000 between the General Fund and the Designated Funds to reflect the decision to designate a Chair in Trauma fund to reflect the Trustees decision to contribute towards a new post in developing King s College Hospital as a Trauma Centre. The Charity s contribution of 300,000 is based on 100,000 per annum over three years starting in 2013/14. 21

22 The Charity transferred 5,728 between the Designated Funds and the General Fund to reflect the decision to close six dormant Designated Funds. The Trustees transferred a total of 39,932 to Designated Funds in respect of interest earned on these Funds during the year. Interest earned remained low due to the prevailing Bank of England Base Rate of 0.5%. The Trustees transfer to top up the balance on each of the following Designated Funds on an annual basis to an agreed amount. The total transfer from the General Fund to those Designated Funds during financial year 2011/12 was 12,378 Chairman/CE Amenities Samaritan (Adults) Samaritan (Women & Families) Accident & Emergency The transfer of 4,623 from the General Fund to the D E Hughes Endowment Fund represents the payment by the General Fund of investment management costs relating to this Endowment Fund. The investment management costs are deducted automatically from investment income, which is attributable to the General Fund. 3. Analysis of Incoming 3.1. Legacy Income All legacy income received during 2011/12 was unrestricted. The split between General and Designated Fund legacy income was: General Fund 41,619 Designated Funds 53, /12 Estate of O M Radford 32,500 Estate of T Little 25,000 Estate of I A Wiggs 10,790 Estate of S M Bache 10,611 Estate of Ransted 7,806 Estate of V J Caseley 5,000 Estate of M Evans 2,016 Estate of Laidlaw 1,000 Estate of M Curry 500 Estate of G A Lowe 200 Estate of R Payne 8 95,430 The corresponding legacy income in 2010/11 was 414,

23 3.2. Investment Income UK Unit Trusts: Unrestricted Restricted Endowment 2011/ /11 Cazenove s The Absolute Return Trust for Charities ,255 Legal and General CAF UK Equitrack Fund 478, , ,849 Short Term Investments 7,609 1,796-9,405 7,836 Bank & Miscellaneous Interest 4, ,386 1,966 Investment property ,811 1, , ,906 Investment income received during financial year 2011/12 is higher than in the previous year. This was principally due to the increase in the return from the Legal and General CAF UK Equitrack Fund. The Charity received no yield from the The Absolute Return Trust for Charities; the reduction in the capital investment during 2011 was 6.96%. 4. Analysis of Expended 4.1. Costs of Generating Voluntary Income Unrestricted Restricted Endowment 2011/ /11 KHP Fundraising ,542 Other direct fundraising costs ,095 Support costs of fundraising activities 10, ,112 14,338 10, , , ,542 was recorded for 2010/11 as a cost of generating voluntary income. This arose from a payment made to meet the costs of staff who undertook fundraising for the Charity. These staff had been employed by King s College Hospital, but were transferred to King s College London in February 2011 as part of a centralisation of fundraising across all the partners of the King s Health Partners. The full implications of centralisation are now clear. The majority of income raised by fundraising no longer forms income of this Charity, but is distributed directly to King s College Hospital or other King s Health Partners as part of the wider fundraising campaign for programmes of clinical activity across the partnership. This Charity does not have any contractual relationship with King s College London to provide fundraising; rather it makes a grant to King s College Hospital to assist them in meeting a share of fundraising costs. In consequence this grant is now shown in these Accounts within Grantmaking. 23