Combat Stress Annual Report and Accounts 2012/2013

Tyrwhitt House, Oaklawn Road, Leatherhead, Surrey KT22 0BX

Tel: 01372 587100 Fax: 01372 587101

Email: [email protected]

Website: www.combatstress.org.uk

Company Limited by Guarantee Registered in England and Wales No 256353

Charity Registration No England & Wales 206002 Charity Registration No Scotland SC038828

Annual Report and Accounts

For the year ended

31 March 2013

http://www.combatstress.org.uk/

Combat Stress (Ex-Services Mental Welfare Society)

Company Limited by Guarantee Charity Registration No England & Wales 206002

Registered in England and Wales No 256353 Charity Registration No Scotland SC038828

1

Trustees’ Report

Our vision, mission and aims 2

Review of 2012/13

Developing integrated Community Outreach, Out-patient and In-patient Services

3

Establishing an effective evidence base 8

Securing our Financial base 8

Developing an appropriate brand and image to deliver excellence

9

Plans for the future 11

Financial Review 13

Public Benefit, policies and governance 15

Trustees’ statement of responsibilities 18

Independent auditor’s report to the Trustees and members 19

Financial Statements

Statement of Financial Activities 21

Balance sheet 22

Cash flow statement 23

Notes to the financial statements 24

Trustees and advisors 38

Combat Stress (Ex-Services Mental Welfare Society) Report of the Trustees



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Founded in 1919, the Ex-Services Mental Welfare Society, more widely known today as Combat Stress, is the leading national charity specialising in Veterans’ mental health.

Our vision

Our vision is that all Veterans (ex-service personnel) will be able to live lives unimpeded by the harmful effect of psychological wounds.

Our mission

Our mission is to provide timely, effective clinical treatment and welfare support to Veterans who suffer from psychological wounds.

To realise this Combat Stress we must:

Be accessible to those who need help;

Be expert at what we do and be recognised as such;

Work in partnership with others;

Raise awareness of Veterans’ needs.

Our values

Our values are to:

Always put Veterans at the centre of our work;

To aspire to excellence in everything we do;

To foster a culture of respect and integrity.

Our strategic aims

Over the five years from 2012 to 2017 we are focussing on the following strategic aims:

1. Developing integrated Community, Outreach, Out-patient and In-patient Services;

2. Establishing an effective evidence base of therapeutic practice;

3. Securing our financial base;

4. Developing an appropriate brand and image culture to deliver excellence.

These aims will enable the Society to develop its services, respond to a changing environment and increased demand for our services.

This report details what we have done to achieve these aims in the year ended 31 March 2013 and our plans for the future.




3

There are over 10,800 Veterans on the Combat Stress database, with over 5,200 actively receiving care, either in the community, a residential treatment service, or both. In the last six years we have seen a 72% increase in referrals. In the same period the average age of those in treatment has fallen from 60 to 43 years old. Whilst the true scale of the mental health problem in Veterans in the United Kingdom is unknown, evidence suggests that we should expect a substantial increase over the next decade.

Recent studies of 25,000 of the 180,000 UK personnel who have so far been deployed to Iraq and Afghanistan show that 19.7% suffered common mental disorders such as phobias and anxiety, with rates of alcohol misuse as high as 13-27% at 3-4 months post deployment. Veterans of the operations in Iraq and Afghanistan also present symptoms of mental ill-health earlier than those from other conflicts and now account for 944 of those receiving treatment.

Combat Stress has moved rapidly over the last five years from a ‘one size fits all’ clinical service to offer multiple services designed to meet the needs of the individual Veteran. We are continuing to evolve in the way we work, finding innovative approaches to improve our services to Veterans.

Review of activities

1. Developing integrated Community Outreach, Out-patient and In-patient Services.

We plan to deliver an integrated service that ensures that those in need of help can receive the right support, in the right place, at the right time and from the right people.

Community Outreach

During 2012/13 the clinical and welfare support offered by our Community Outreach Teams provided an invaluable service for Veterans. Each team comprises at least one Regional Welfare Officer and a minimum of two mental health professionals. During 2012/13 Combat Stress had 14 Community Outreach Teams operating throughout the UK.

4400

4500

4600

4700

4800

4900

5000

5100

5200

5300

5400

apr may jun jul aug sep oct nov dec jan feb mar

Active Clients

2011/12

2012/13

There were 5,272 active Veterans at the end of 2012/13 compared to 4,966 at the end

of 2011/12. This represents 5.8% growth in active Veterans

this year.

This year a total of 780 Veterans were sufficiently

recovered to be discharged. These Veterans have

successfully completed their treatment and are now living independently in their own

communities.




4

In addition we deliver specific advice through the Chain of Command to Reserve units. Two Territorial Army and Reservist Liaison Officers are funded by the Duke of Westminster’s Foundation.

Regional Welfare Officers visit Veterans in their homes and are often the first face-to-face contact with Combat Stress. The Welfare Officer, invariably an ex-serviceman or woman, will listen to the Veteran’s story and either refer them to the Outreach Clinical team or to a Treatment Centre for an assessment.

In addition to mental health issues, Veterans also need to cope with practical issues such as finances, benefits, housing and pensions. The Regional Welfare Officer will call on help from other partners and agencies, such as the Royal British Legion (RBL), the Soldiers, Sailors, Airmen and Families Association (SSAFA), Services Personnel and Veterans Agency (SPVA) or Help for Heroes, and will stay in touch with the Veteran should further support be needed.

Community Psychiatric Nurses and Mental Health Practitioners comprise the clinical component of the Outreach Teams. They conduct needs and risk assessments, provide support, counselling and Cognitive Behavioural Therapy (CBT). In addition, they signpost Veterans to local services for assessment or intervention, liaise with General Practitioners, community mental health teams and other services. They also run Veteran Support Groups, in which Veterans can meet people with common experiences, as well as being offered clinical support by Combat Stress or the NHS.

In 2012/13, for the first full year, all 14 of our Community Outreach teams were operational. Our evidence showed that the services have:

Made earlier engagement and treatment less complicated for clinical presentations;

Improved access to clinical assessment and management through closer working with local NHS services, including General Practitioners and Community Mental Health teams;

Created better management of residential services by providing community assessment;

Allowed better targeted residential treatment;

Provided family/carer groups and general group treatment.

All Outreach Services are funded by donations. In 2012/13 a significant amount of funding of the 14 regional teams was provided by a number of ex-service charities, including The Royal British Legion, Help for Heroes, The Army Benevolent Fund, The Royal Air Force Benevolent Fund, Seafarers UK and The Royal Navy and Royal Marines Charity. Some of these arrangements will end soon and funding for the future is being sought.

Out-patient care

Rapid assessment and access to appropriate treatment in our Centres or the NHS is essential for Veterans. To achieve this, Combat Stress is developing out-patient services in Treatment Centres and, when needed and appropriate, in the community.

Our aim is that our out-patient services will be the hub around which our clinical services revolve and will provide:

Assessment of needs, including admittance to the Residential Brief Intervention Programme and other Short Stay programmes;

Second opinions requested through the NHS or other agencies;

Signposting and advice;

Outpatient stabilisation, for the Residential In-Patient and other programmes and treatment;

Targeted and appropriate admissions;

Welfare assistance.

In 2012/13 we have developed dedicated space for out-patient departments within our three Treatment Centres and recruited further psychologists and a consultant psychiatrist to strengthen our ability to assess Veterans quickly. The out-patient service complements the stabilisation

917 Veterans were assessed by RWOs in 2012/13 (compared to 817 in 2011/12).

In addition RWOs provided 2,473 follow-up welfare visits.

Our Community Clinicians undertook 837 clinical assessments, provided 3,399 treatment episodes and there were 4,160 Veteran attendances at the group treatment programme.



5

programme preparing Veterans for intensive trauma focused treatment, enables their medication to be reviewed and prepares them for attendance on the residential or community based programmes. In addition, Veterans living within a commutable distance now receive trauma focused treatment as an out-patient.

Use of out-patient services during 2012/13 has enabled many more Veterans to receive a consultant review and now provides access to treatment which does not necessarily lead to an in-patient admission.

In-patient care

Delivery of the National Specialised Commissioning (NSC) Intensive Post Traumatic Stress Disorder (PTSD) Rehabilitation Programme began at Tyrwhitt House in September 2011 and at Hollybush House and Audley Court in September 2012. 152 Veterans completed the six week programme in 2012/13. Initial outcomes have shown an improvement in function and a reduction in symptoms at follow-up.

The programme now attracts referrals direct from the NHS and an amendment to the Combat Stress referral pathway is under consideration to improve access to the treatment programme.

Combat Stress continued to deliver short stay Brief Intervention residential treatment programmes in all three Treatment Centres during 2012/13.

We have expanded our Well-Being and Rehabilitation Programme which is now available at each centre. A ‘whole person’ approach to treatment and therapy has enabled Veterans to participate in new group activities both on and off-site. These activities focus on creativity, skill development and peer support with the aim of improving self-motivation. The programmes also provide access to community resources from which Veterans gain positive feedback, leading to increased feelings of personal competence and accomplishment.

Art therapy features in our residential programmes for Veterans. Traumatic memories, once expressed through art, can be decoded and put into words to make sense of experiences using left brain reasoning and analysis, to help process the trauma.

Over the year a total of 1,294 Veterans were admitted into residential treatment centres. They received 6,883 individual treatment sessions which included:

Trauma focused therapy

One-to-one counselling

Anger and anxiety management

Art psychotherapy

During 2012/13, working with the RBL and the Royal Air Force Benevolent Fund (RAFBF), we piloted a scheme to provide rehabilitation and reintegration at four residential facilities, three run by RBL and one by RAFBF. Combat Stress clinical staff provided treatment sessions which included Mindfulness, Improving Social Skills, Sleep Hygiene and Effective Coping Mechanisms in either one-to-one or group sessions. Veterans and their partners stayed for one week and completed an evaluation survey before going home. The feedback and outcomes from this pilot were positive. We plan to continue the pilot and refine it to ensure it meets the needs of our Veterans and maintains our commitment to, and focus on, recovery.

OUTCOMES

An analysis of a sample of 113 Veterans who completed the Intensive Post Traumatic Stress Disorder (PTSD) programme indicates a significant improvement in the PTSD scores at discharge and this was maintained (all except one) at six weeks, six months and 12 months follow-up.

On the measure for dissociation, Veterans achieved reductions at discharge and six weeks follow-up. Whilst similar improvements are seen at six months and 12 months follow-up these are not statistically significant.

Results indicate improvements on common PTSD co-morbid illnesses are maintained at discharge, six weeks and six months follow-up which is significant when compared to the

Veterans’ admission data.



6

Quality

Each Treatment Centre is subject to Quality Care Standards and is periodically inspected by the regulatory authority: the Care Quality Commission in England and for Scotland, the Scottish Commission for the Regulation of Care. In 2012/13 the regulators visited all three Treatment Centres as follows:

Hollybush House, Scotland was inspected on 6 December 2012. The Centre was graded ‘good’ for the quality of care and support and for the quality of staffing. It was assessed as ‘very good’ for the quality of the environment and for the quality of leadership and management. The inspector concluded that “Hollybush House continues to deliver a very good standard of care and support. Service users continue to speak very highly of the support offered to them and the positive difference this service has made to their lives.”

Tyrwhitt House, Leatherhead, Surrey was inspected on 9 October 2012. Recommendations were received in relation to supporting workers and the care and welfare of people who used the service. The recommendations were acted on and a further visit was carried out by the Inspector on 16 April 2013. At the latter visit it was noted that improvements had been made, in particular with regard to regular contact with the Veteran’s key worker and in one-to-one supervision and support of staff. The inspector noted that “One person who used the service told us "My Key worker is fantastic" they also said "I can always approach staff to talk to them.".”

Audley Court, Newport, Shropshire, received an inspection on 25 January 2013 which found all care standards had been met. In the report summary, the inspector noted “People told us they felt safe and welcome at Audley Court. They said they were very pleased with the treatment and support they had received. People agreed the staff team had a good understanding of their needs and preferences.”

Improved Facilities

During 2012/13 the following improvements were made to our facilities:

A major re-development programme at Tyrwhitt House was completed in July 2012 which provided improved bedroom facilities, together with a new out-patients facility, Welfare office and therapeutic garden.

Two cottages were converted to provide additional space for clinical treatment and Welfare offices at Hollybush House in Ayrshire.

We have started a major building programme to expand facilities at Audley Court in Shropshire. During 2012/13 a substantial extension was in progress with completion due at the end of May 2013. The extension increases the number of rooms available for group therapies and training. The next phase of work during 2013/14 is construction of a further bedroom wing.

We recognise the importance of contact with work, families and loved ones while Veterans are attending residential care programmes. During 2012/13 we installed free Wi-Fi access across the three Treatment Centres to enable Veterans to keep in touch via their computers and mobile devices.




7

Helpline

The National telephone helpline offers a support line 24 hours a day, 365 days a year which benefits serving personnel, reservists, Veterans and their families. The service is delivered in partnership with Re-Think Mental Illness. Professional, trained staff listen, support and direct callers to relevant key workers within Combat Stress or other relevant organisations.

The Helpline is a key part of the range of services that we provide and is a first step for many of those who need more intensive support from Combat Stress.

The total number of contacts has increased by 44% over the last year with the number of crisis calls, whilst still low in number, increasing by 180%. These calls are from those who have suicidal thoughts or are at risk of causing harm to themselves or others.

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

Inbound calls Inbound hang-ups

Outboundcalls

Outbound noresponse

Voicemails TextsReceived

EmailsReceived

Total contacts to Helpline2011/12

2012/13

“The voice on

the other end of the phone has made all the difference.”

0

200

400

600

800

1000

1200

1400

1600

1800

2000

Main Issues/Reason For Call2011/12

2012/13




8

2. Establishing an effective evidence base.

Within the healthcare and charity environment there is an increasing need to provide transparent information on performance and outcomes to funders, stakeholders and, most importantly, to the Veterans themselves. Trustees and Directors also need improved management information to guide decision making for activities which are increasingly complex and where treatments and therapies must compete for scarce resources.

During 2012/13 we established an ‘Information Management Programme’ to:

Improve the quality and effectiveness of management information across all of Combat Stress’ activities

Assess the quality of services and shape their development, and

Report to stakeholders in a timely and effective way.

The Programme will include a review of the suitability of our Patient Administration and Clinical databases and systems and consideration of options for further development and/or purchase of new systems.

The Information Management Programme also includes replacement of our financial software and a review of other systems, such as our Human Resource software. This comprehensive review will enable us to maximise integration and functionality across the organisation.

3. Securing our financial base.

Given the economic climate, the fundraising environment continued to be challenging during 2012/13 and is expected to remain so in the medium term. We recognised that more effort and investment was needed in our fundraising to secure the levels of income necessary to support the changes and expansion in our clinical services.

The plight of the military disabled and, therefore, awareness of Service Charities has been very high in recent years. With the planned cessation of Operations in Afghanistan in 2014, public awareness will decline and therefore the potential to build sustainable fundraising into the future is likely to be more difficult. To ensure the continued delivery of our services, it is vital that we have a secure financial base and we must therefore diversify to maintain our income levels.

Over the last few years we have made substantial investment in our Treatment Centres in order to provide additional facilities for Veterans’ clinical care. The level of expenditure spent on our charitable activities has increased to £12.1m in 2012/13 from £10.8m in 2011/12. Our capital building projects and increased spending on our clinical activities has been possible due to the fantastic success of the Enemy Within Appeal which ended in March 2013. We must now build on this success and engage new and existing supporters to raise income at our current levels from voluntary sources. We also need to work with our partners within the NHS and MoD to maintain, and where possible, increase statutory funding for the treatment of a growing Veteran population with wounded minds. However, it is vital that we do not become overly dependent on statutory funding and that we maintain our appeal to our private donors.

Fundraising summary

Our voluntary income for 2012/13 was £8.3m compared with £8.9m in 2011/12. The fall was partly due to income from legacies being £0.3m lower than the previous year. General donations fell from £4.8m in 2011/12 to £4.5m which reflects the difficult economic environment and is in line with sector benchmarks.

The three year Enemy Within Appeal finished in the Spring of 2013 having raised £32m.

Through the Enemy Within Appeal, Combat Stress attracted a considerable number of high-net-

worth supporters. A programme to engage with these new donors is being created and income

from this source is anticipated to grow during the next year.

The newly established Corporate Fundraising Team successfully completed its first year. It doubled corporate income compared to last year. Particular highlights included donations from ICAP and Thales, as well as being selected for the BBC charity appeal to be realised later in 2013.

Fundraising by Community Groups continued to flourish but volunteer-led (individual) fundraising activities were adversely affected by a bad summer and other major events such as the Olympics and the Queen’s Diamond Jubilee.



9

Increased investment in donor recruitment has produced good results with almost twice as many new donors (2100) having been recruited this year compared to 2011/12. The average gift from our donors is higher than the national average. We are very grateful to all those individuals who give so generously.

With the Board’s agreement to sustained investment we can be reasonably confident in our ability

to raise sufficient funds while the high level of public support continues, both for our Armed Forces

and for the plight of injured Veterans. Our cause achieved a higher profile and awareness,

particularly amongst our major funders. Success is also shown by an increase in the active donor

base which has doubled in the last three years to more than 30,000 individuals, companies,

organisations and trusts.

We acknowledge with much gratitude the support Combat Stress receives from the Service Charities, without whose help the needs of Veterans suffering from mental injury could not be alleviated. Income received from Help for Heroes, the RAFBF, ABF The Soldiers Charity and the RBL continue to be the largest sources of voluntary income.

Combat Stress is very grateful to our Patron, HRH The Prince of Wales KG, KT, GCB, OM, AK, QSO, PC, ADC, for his support during the year.

Ongoing Contracts

Combat Stress’s UK-wide reach, partnerships with the NHS, MoD and DoH as well as major Service Charities, good government relations and historic roots mean that we are a significant and respected service provider in the Veterans’ mental health arena. However, there are challenges to secure statutory funding:

Maintaining good relations with NHS departments and Local Authorities which are dynamic and ever-changing;

The adoption of any “qualified provider” concept by the NHS increases competition for Combat Stress’ services.

MoD Funding

Under Article 21 of the War Pensions Act, the MoD is responsible for the provision of remedial treatment to those suffering from mental ill health that is attributable to or has been aggravated by their service prior to 2005. Where this treatment is not available in the NHS, another qualified provider can be paid for treatment delivery. Many ex-Service personnel who are entitled to a War Pension for their disability have not registered their claim and a declining number of Veterans are eligible. We have sought to improve access to War Pensions for those who are entitled to receive it and have negotiated increases in the amount paid to ensure that treatment costs are fully funded.

NHS Funding

Combat Stress achieved recognition as a provider of quality services for ex Service personnel suffering mental health disorders by NHS England. Payment for the delivery of the six week residential intensive programme in England was funded by a National Specialised Commissioning contract during 2012/13. Similarly, in Scotland the NHS funded a contract to deliver the programme to Scottish Veterans.

4. Developing an appropriate brand and image to deliver excellence.

Combat Stress has evolved over time from a mental welfare driven organisation, providing comfort for emotional needs with limited clinical interventions, to one which provides high quality, integrated clinical and welfare services to help achieve independence.

In the past, the charity focussed on the difficult situations with which Veterans are faced that cause them to turn to us for support. This approach made the Veterans seem like passive victims. As the leading organisation in our field, we feel it is crucial that our emphasis shifts towards positive outcomes and the better lives that Veterans can and do live with our assistance.

The Board of Trustees felt that our brand did not match our ambition to offer hope and encouragement to those who need our help. It commissioned research among our volunteers, staff and Veterans which revealed that those who are engaged with Combat Stress see us as a lifeline and a positive force. We convey strength in the face of adversity and stability embedded in a military ethos. It is these characteristics we need to portray more clearly.



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Combat Stress is the leader in supporting Veterans suffering from psychological injuries. We believe that excellence is a product, not just of processes and style, but also the efforts of staff. How we think of and present ourselves is a point of pride. We must also ensure Combat Stress empowers Veterans and their families to live a life beyond their symptoms. Our identity needs to reflect the dedication, commitment and professionalism of everyone who works in Combat Stress for Veterans to regain fulfilling lives.

After a thorough process involving all our stakeholders, a new, clearer brand and image has been created which will be launched at the Annual General Meeting on 25 September 2013.

Stigma

One in three of our Veterans say that the fear of stigma prevents them from even telling their own families about their suffering. Veterans must be able to come to us sooner for the help that they so desperately need. To achieve this, we must address three key issues:

The lack of education and understanding about mental health issues

The fear of stigma and discrimination that surrounds Veterans’ mental health

The isolation of Veterans with wounded minds who feel alone and are too ashamed or embarrassed to seek help.

A second year of funding from Comic Relief enabled us to continue to raise awareness of stigma and to address the issues that surround Veterans’ mental health.




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Plans for the future

Our future plans are to continue to work with our partners to build holistic, integrated services for well-being and mental healthcare to Veterans. We seek innovative approaches to respond to our Veterans’ needs and to measure and monitor outcomes to demonstrate our effectiveness.

1. Developing integrated Community Outreach, Out-patient and In-patient Services.

Community Outreach

Introduction of a community service has proved successful. It provides a comprehensive patient-centred treatment package which ensures that Veterans are able, in collaboration with other service providers, to access treatment as close to home as possible. The number of referrals has increased incrementally and we are reviewing our services to ensure that we are able to respond to the needs of Veterans. We will:

Work in partnership with the RBL/NHS to provide Community based facilities on the high street enabling Veterans to access a range of services to meet their health, social and welfare needs;

Provide a coherent pathway of care to make it easier to get the right treatment (residential and community) based on the needs of Veterans;

More fully link the community and outreach clinical service to the Treatment Centres through supervision and clinical leadership;

Explore innovative ways through the use of technology to provide treatment for all Veterans seeking help including those who live in remote areas of the country.

Out-patient services

Over the next three years out-patient services will evolve, subject to cost, in two phases:

2013/14 Phase 1: Meeting the needs of the intensive PTSD Rehabilitation Programme o Assessment, preparation and stabilisation o Reviews at six weeks, six months and one year o Develop NHS/Combat Stress collaborative working o One-to-one community and Outreach services o Group sessions

2014/16 Phase 2: Meeting broader needs/further development o Out-patient services available to all, providing psychiatry and out-patient

treatment including psychological input o A comprehensive national service working with other qualified providers.

In-patient programmes

We will be continuing to consolidate the intensive PTSD Rehabilitation Programme and will be setting up specific care pathways for regularly occurring conditions by further developing the Brief Intervention programmes.

Over the next three years we will:

Improve assessment and follow-up for those attending all of our residential programmes

Further develop a therapy led Wellbeing Programme to improve essential personal skills

Develop, cost and then prioritise short stay residential programmes that address among other issues:

o Psycho-education for alcohol/PTSD rehabilitation; o Mood management, boundary setting and assertiveness training; o Relationships, anger and domestic violence; o Individual trauma focused brief intervention.

Helpline

We aim to continue to provide the 24 hour a day Helpline and to monitor the usage and outcomes. The service is currently funded by the Department of Health for 2013/14 but we will need to secure funding for future years.



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2. Establishing an effective evidence base.

With the advances made to our services and the collaboration and partnerships enjoyed by the Society, there is a need to quantify the benefits of what is offered. We must also contribute both nationally and internationally to the growing knowledge base of Veteran care. To achieve this we will:

Contribute to an information management process that measures outcomes effectively;

Measure patient response to specific interventions;

Develop IT systems which will be compatible with local NHS requirements;

Lead on the standardisation of psychometric data collection.

3. Securing our financial base.

In the existing economic climate there can be no guarantee that current levels of income will be sustained over the long term, particularly when withdrawal from Afghanistan is complete and there is a possibility less awareness Veterans’ issues. To assure the delivery of our services we must:

Maintain, and where possible increase, the current value of MoD and NHS funding, aiming for approximately 40% statutory and 60% charitable funding;

Identify alternative sources of income;

Maintain our reserves at the agreed levels.

4. Developing an appropriate brand and image to deliver excellence.

Within the next three years we plan to:

Contribute to research, publish findings, and disseminate information through national and international conferences;

Pursue a campaign to reduce stigma and increase awareness of Veterans with mental ill health and wounds;

Collect information about patterns of mental disorders and mental illnesses in Veteran groups in other countries to compare with our Veteran population;

Rebrand and embed our values by proactive leadership and project Combat Stress as having both military and medical charity ethos;

Build staff competencies and identify development opportunities, partnerships and secondment experiences.




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Financial Review

In recent years, we have substantially increased and improved our services and facilities. Over the last ten years our charitable expenditure has increased from £4.4m in 2003 to £12.1m in 2013, an increase of 175%. This growth has only been possible as a result of generating surpluses each year which have funded capital projects to give us capacity to treat more Veterans and to plan for increased expenditure on services in subsequent years.

Building projects to improve and expand our Treatment Centres over the last ten years have cost £7.4m (cost of fixed assets at 1 April 2013 £12.0m, (2003: £4.6m)). The cost of these building improvements is depreciated over 40 years but careful planning and use of our surpluses has provided the necessary cash to finance the projects. A further £1.8m capital expenditure is planned for 2013/14.

The considerable development in our scope and size over recent years is reflected in the following summary. The growth is evidence of the increasing number of referrals and demand for our services. Our donors and funders have supported our plans for growth and have given generously in response to the Enemy Within Appeal over the last three years. However, for 2013/14 we estimate that our costs will be in the region of £17m (see budget figures for 2013/14 below) and therefore the need to sustain the levels of income raised from fundraising is greater than ever to fund our new and improved services.

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

restated (Note 5)

2013 2014

Budget

£'000 £'000 £'000 £'00

0 £'000 £'000 £'000 £'000 £'000 £’000

£'000 £’000

Incoming Resources

Voluntary income 2,229 2,465 2,771 3,257 4,189 4,752 5,522 7,113 11,318 8,942 8,335 8,024

Activities for generating funds

224 208 433 384 448 860 907 971 431 578 470 1,709

Charitable activities 2,570 2,724 2,876 3,091 3,352 4,072 4,318 4,454 4,411 6,196 6,698 6,185

Other incoming resources

764 11 12 4 727 17 10 7 6 39 64 14

Total incoming resources

5,787 5,408 6,092 6,736 8,716 9,701 10,757 12,545 16,166 15,754 15,567 15,932

Cost of generating funds

(491) (582) (621) (627) (551) (761) (778) (1,201) (1,469) (1,307) (1,667)* (2,931)*

Incoming resources 5,296 4,826 5,471 6,109 8,165 8,940 9,979 11,344 14,697 14,447 13,900 13,001

Expenditure on charitable activities

Charitable activities 4,438 4,898 5,020 5,252 5,799 6,855 8,362 9,072 10,451 10,837 12,083 13,793

Governance costs 134 166 127 196 206 120 216 133 143 149 183 181

4,572 5,064 5,147 5,448 6,005 6,975 8,578 9,205 10,594 10,986 12,266 13,974

Net incoming/ (outgoing) resources 724 (235) 324 661 2,160 1,965 1,401 2,139 4,103 3,461 1,634 (973)

(Decrease)/Increase in cost of Tangible Fixed Assets (112) 215 31 415 1,178 910 652 1,441 329 1,146 1,072 1,773

* Our fundraising costs for 2012/13 and our budgeted fundraising costs for 2013/14 include expenditure invested in campaigns and appeals where income is expected to be received in future years.

For the year ended 31 March 2013 net incoming resources amounted to £1.63m [2012:£3.46m]. There has been some recovery in the value of investments and this has led to unrealised gains of £0.64m on investments and a reduction in the Society’s pension scheme liability. This has resulted in a net increase in funds of £2.27m for the year.

We have budgeted for a deficit of expenditure over income of approximately £1m in 2013/14. We plan to use the surplus generated in 2012/13 to fund this deficit in 2013/14.



14

Incoming resources

The financial statements show total incoming resources for the year of £15.6m (2012: £15.8m), a decrease of £0.187m (1.2%) on the previous year. Voluntary income has fallen by 6.8% from £8.9m in 2011/12 to £8.3m in 2012/13 (see notes on page 8). However, our income from charitable activities has increased by 8% to £6.7m from £6.2m in 2011/12. As shown in note 3 on page 26, this is due to the increased contract funding for the six-week Intensive PTSD Rehabilitation Programme which is now being provided in all three Treatment Centres (see notes on in-patient care on page 5).

The chart below shows the relative sources of income for 2012/13 and 2011/12.

Resources expended

Total resources expended for 2012/13 was £13.93m [2011/12: £12.29m] with 87% being spent on service delivery [2011/12: 87%]. Our expenditure on charitable activities has increased by 11.5% from £10.84m in 2011/12 to £12.08m in 2012/13.

The cost of fundraising has increased from £1.3m in 2011/12 to £1.6m in 2012/13. Much of this increase was due to a legacy campaign and additional mailings, which are expected to generate income over the longer term. However, it is also indicative of the challenging economic environment which means that our fundraising efforts and costs have to increase in order to raise the required levels of income. The income generated is in line with sector benchmarks with £5.20 raised for every £1 spent on fundraising.

As we have moved to more clinical based treatments we have recruited more qualified staff. This has resulted in higher employment costs which have risen from £8.08m in 2011/12 to £8.96m in 2012/13 as shown in note 8 on page 29. Due to the expansion of services several new posts were created during 2012/13 and therefore staff costs will increase again in 2013/14 to reflect the full annualised costs of these additional posts.

6,516

4,502

2,253

1,329

421 300 182 64

5,984

4,958

2,0181,667

374 340 212 203

ClinicalServices

Donations &Events

ServiceCharities

Legacies InvestmentIncome

StatutoryGrants

Helpline Other Income

2012/13 2011/12

8,265

3,154

195 469

1,667

183

7,262

3,031

258 286

1,307

149

Clinical Services CommunityOutreach Services

Helpline Improving Access Activities forgenerating funds

Governance

2012/13 2011/12




15

Public Benefit, Policies and Governance

Public Benefit

Whilst evaluating the public benefit provided by Combat Stress, the Trustees have referred to the Charity Commission’s general guidance. When reviewing our aims and objectives and in planning future activities the Trustees consider whether or not there are identifiable public benefits, what they are, how they are related to the aims, and how they are balanced against any detriment or harm.

Combat Stress is totally committed to reach out in order to access those Veterans who need help. To achieve this, the Society will work with whoever is most appropriate to ensure that the right support and care are given at the right time, in the right place, by the right people. In this context, the Society’s work demonstrates clear and significant public benefit through its specialist help for Veterans. By doing this, it assists those suffering from psychological wounds to integrate more fully back into civilian life, maximising their mental, physical and social capabilities.

Combat Stress is increasingly acknowledged within the medical profession and the NHS as a specialist in the treatment of Veterans suffering from Service-related mental illness.

Combat Stress also has the respect of the Serving and ex-Service communities. By continuing to raise awareness of combat-related psychological injury within the Armed Forces and society at large the cost to society as a whole is reduced.

By successful campaigning and education Combat Stress contributes to a better understanding of mental illness in the country as a whole and particularly in the Armed Forces. By working in partnership with the NHS, other service charities, statutory agencies and the media we are now seeing a growing understanding of the needs of those with wounded minds.

Investment policy and returns

Under the Memorandum and Articles of Association, Combat Stress has the power to make any investment that the trustees see fit. The investment policy and performance are regularly reviewed and the investment policy has been confirmed during the course of the year.

During the year Combat Stress held its investment portfolio in the Schroder Charity Multi-Asset Fund. The investment objective is to preserve the capital in real terms over a three year period with a total return target of the Consumer Price Index plus 4%. This should be achieved through a combination of income and capital growth and underpinned by a 3.25% income yield. The portfolio should be sufficiently diversified so as to reduce risk.

The market value of our equity portfolio showed an increase to £8.07m at 31 March 2013 [2012: £6.56m], representing capital growth of 23.1% [2012: 0.8%]. The income yield of £421k represents an average income return for the period of 3.1%. Cash balances totalling £6.06m [2012: £6.59m] were held by the investment manager at year end.

Governance

The Ex-Services Mental Welfare Society is a charitable company limited by guarantee. It was incorporated on 11 May 1931 and is governed by Memorandum and Articles of Association which were revised on 14 November 1991 and then amended by resolution on 21 September 2006, 20 September 2007 and 17 July 2008.

This governing document states that the objects of the charity are “to provide, establish and maintain recuperative homes, hospitals, sanatoria, schools of training, clubs, workshops and other centres, for all ranks of all branches of HM Forces, including the Merchant Navy, suffering from war psychoses and neuroses.” The charity operates throughout the United Kingdom.

The Board of Trustees is responsible for selecting and recommending suitable trustees for election to office at the annual general meeting. A maximum of fifteen trustees are elected, each of whom serve for an initial period of three years. One third of the trustees shall retire from office at each Annual General Meeting. The retiring trustees are those who have been longest in office since the last election, but do not include ex-officio members of the Board of Trustees. A retiring trustee is eligible for re-election and may serve a maximum of two consecutive terms of three years unless there is an extenuating reason for their retention approved by the Company in General Meeting, or they are elected to the position of Chairman, Vice Chairman or Honorary Treasurer. The Board of Trustees is empowered to appoint a Trustee to fill a casual vacancy until



16

the next Annual General Meeting. There is no age limit imposed on trustees. The trustees are the Directors of Combat Stress for the purposes of company law.

New trustees are inducted through a process of briefings by the Chairman and executive management. They are provided with information relating to Combat Stress’s governance and operation. The induction process includes a visit to the Treatment Centre at Tyrwhitt House and the Head Office, and a trustee might also accompany a Regional Welfare Officer visiting Veterans in the community. Ongoing training and visits to Treatment Centres are encouraged.

The Board of Trustees meets four times a year and has appointed committees with responsibility for finance, fundraising, audit and risk management, medical services, remuneration and nominations. A further committee is responsible for stewardship of the closed defined benefit pension scheme. The Board delegates day to day control of activities to the Chief Executive and a team of operational directors.

Reserves policy

Combat Stress operates on the basis of a long-term commitment to registered Veterans. The trustees believe the level of free reserves (that is those funds not tied up in fixed assets, designated and restricted funds) should be between nine and 12 months budgeted expenditure. This is necessary to meet working capital requirements essential for the maintenance of its operations, to even out cash flow fluctuations and to provide a prudent financial base from which to continue to develop Combat Stress and its services. In setting the reserves policy the Trustees have also taken account of the financial demands which would arise in the event of a reduction in service or the inability to sustain continued operations.

The general reserve at 31 March 2013 stood at £12.43m, or 10.7 months expenditure [2012: £11.47m or 11.3 months]. However, when measured against the 2013/14 budgeted expenditure of £16.9m, which projects further expansion of the charity’s services, the level of free reserves is projected to be 8.8 months.

Restricted and designated funds are held for specific purposes, detailed in note 19 to these accounts.

The actuarial valuation of the Ex-Services Mental Welfare Society 1974 Pension & Life Assurance Scheme 31 March 2013, as required by FRS17, showed a funding deficit of £0.15m [2012: £0.72m] which is included in unrestricted funds. The date of the last triennial actuarial valuation was 1 October 2011. As a result of this valuation, employer contributions were set at 30.3% of pensionable salaries with employee contributions being made at 5%. Combat Stress approved a Pension Recovery Plan to address the deficit over 8 years, through the payment of £0.2m per year. Following a consultation with active members the Scheme was closed to future accrual on 31 March 2013. Details of the Scheme are disclosed in Note 17 of the accounts.

Risk, audit and internal control

Combat Stress aims to achieve a culture where risk management is everyone’s business, embedded in the core processes, systems and business.

The Board of Trustees has overarching responsibility for risk. However, the authority to develop and oversee risk management arrangements within Combat Stress and how they are being managed and mitigated has been delegated to the Audit and Risk Management Committee, which meets 4 times each year. It monitors, reviews and reports to the Board on all processes of governance. This committee also reports on anything that threatens or adversely affects the accomplishment of Combat Stress aims and objectives, its assets, the reliability of its records and information, its compliance with all relevant laws, regulations, policies and its governing document.

Responsibility has been further delegated to the individual committees of Combat Stress to manage risk and implement such internal or external controls as are appropriate to their respective spans of control. The Chairs of each Committee make regular reports to the Board.

The risk management system is formalised. A Risk Register captures the risks faced by Combat Stress and identifies the Committee responsible for managing each one. It is based on an ongoing process designed to:

identify those risks most likely to impact on the realisation of Combat Stress aims, objectives and policies,

evaluate the likelihood of those risks being encountered and the impact should this occur and



17

manage and prioritise actions to mitigate them efficiently, effectively and economically.

As part of the risk management process, major risks have been reviewed and actions taken in mitigation. Combat Stress complies with the Charity Commission’s list of internal financial controls in all material respects, though significant risks arise in the following areas:

Service quality and delivery: Through service governance there is the requirement to ensure that the service provided is of the highest standard, which requires an adequate mix of skills in order to deliver best practice;

Employee welfare: Combat Stress has a duty to protect its employees but there is risk to the physical and mental health of those staff working with Veterans. We have comprehensive supervision, support and protection procedures and policies in place to reduce the possibility of problems occurring;

Funding: diversification of income streams such that Combat Stress is less dependent on fees received for the treatment of war pensioners whose disablement qualifies them for funding by the Ministry of Defence (Veterans Agency); and

Demand for services: The increasing demand for our services is such that it might exceed resources and the ability to deliver those services.

The Trustees have responsibility for ensuring that Combat Stress has an appropriate system of controls, financial and otherwise. They are also responsible for safeguarding the assets of Combat Stress and for taking reasonable steps for the prevention and detection of fraud and other irregularities, and to provide reasonable assurance that:

Combat Stress is operating efficiently and effectively;

its assets are safeguarded against unauthorised use or disposition;

proper records are maintained and financial information used within Combat Stress or for publication is reliable; and

Combat Stress complies with relevant laws and regulations.

The systems of internal control are designed to provide reasonable, but not absolute, assurance against material misstatement or loss. They include:

an annual budget approved by the Trustees;

regular consideration by the Trustees of financial results, variance from budgets and non-financial performance indicators;

delegation of authority and segregation of duties; and

identification and management of risks;

development of a regular independent internal audit cycle to visit different areas of the business and comment on the policies, processes and controls implemented by the executive.

Clinical and service related incidents are reported to the Director of Operations and serious incidents to the Medical Services Committee, the Board of Trustees and externally through the appropriate mechanisms. All incidents undergo full investigation and where required, have follow-up actions.



18

Statement of Trustees’ Responsibilities The Trustees (who are also directors of Combat Stress for the purposes of company law) 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.) Company law 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 Combat Stress and of the incoming resources and application of resources, including the income and expenditure of Combat Stress 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 the Statement of Recommended Practice (SORP), “Accounting and Reporting by Charities” (Revised 2005);

make judgements and estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company 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 Combat Stress and enable them to ensure that the financial statements comply with the Companies Act 2006, the Charities and Trustee Investment (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 2006. They are also responsible for safeguarding the assets of Combat Stress and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. In so far as the Trustees are aware:

there is no relevant audit information of which the charitable company’s auditor is unaware; and

the Trustees have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.

The Board of Trustees approved this report on 22 July 2013.

R Ward Honorary Treasurer

19

Independent auditors' report to the Members of Ex-Services Mental Welfare Society We have audited the financial statements of Ex-Services Mental Welfare Society for the year ended 31 March 2013 which comprise the Statement of Financial Activities incorporating the Summary Income and Expenditure Account, 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 charitable company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and to the charitable company's trustees, as a body, in accordance with section 44 (1)(c) of the Charities and Trustee Investment (Scotland) Act 2005. Our audit work has been undertaken for no purpose other than to draw to the attention of the charitable company's trustees and members those matters which we are required to include in an auditor's report addressed to them. To the fullest extent permitted by law, we do not accept or assume responsibility to any party other than the charitable company and the charitable company's trustees and 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 of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. We have been appointed auditors under section 44 (1)(c ) of the Charities and Trustee Investment (Scotland) Act 2005 and under the Companies Act 2006 and report to you in accordance with those Acts. Our responsibility is to audit and express an opinion on 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 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 charitable company'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 Trustees 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 the financial statements

In our opinion the financial statements:

give a true and fair view of the state of the charitable company's affairs as at 31 March 2013 and of its incoming resources and application of resources, including its income and expenditure for the year then ended;

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

have been prepared in accordance with the Companies Act 2006, the Charities and Trustee Investment (Scotland) Act 2005 And regulation 8 of the Charities Accounts (Scotland) Regulations 2006.

20

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

Matters on which we are required to report by exception We have nothing to report in respect of the following matters where the Companies Act 2006 and the Charities Accounts (Scotland) Regulations 2006 (as amended) requires us to report to you if, in our opinion:

the charitable company has not kept proper and adequate accounting records 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 of trustees' remunerations specified by law are not made; or

we have not received all the information and explanations we require for our audit.

Neil Finlayson: Senior Statutory Auditor Devonshire House for and on behalf of Kingston Smith LLP 60 Goswell Road Statutory Auditor London EC1M 7AD 7 August 2013 Kingston Smith LLP is eligible to act as an auditor in terms of section 1212 of the Companies Act 2006.




21

The notes on pages 24 to 37 form part of these financial statements. All activities relate to continuing operations.

There are no gains and losses for either the current or prior years other than those recognised above. All items in the Statement of Financial Activities would appear in the Income and Expenditure Account with the exception of the realised and unrealised gain/(loss) on investments.

There is no difference between the net incoming resources before other recognised gains and losses and their historical cost equivalents.

Statement of Financial Activities (incorporating an Income and Expenditure Account)

for the year ended 31 March 2013

Unrestricted Restricted Totals Totals

Restated (Note 5)

Funds Funds 2013 2012

Notes £’000 £’000 £’000 £’000

Incoming resources

Incoming resources from generated funds

Voluntary income 2 5,369 2,966 8,335 8,942

Activities for generating funds 49 - 49 204

Investment income 421 - 421 374

Incoming Resources from charitable activities 3 6,698 - 6,698 6,196

Other incoming resources 64 - 64 37

Total incoming resources 12,601 2,966 15,567 15,753

Resources expended

Costs of generating funds

Cost of generating voluntary income 1,614 - 1,614 1,141

Fundraising events and trading - - - 137

Investment management fees 53 - 53 29

1,667 - 1,667 1,307

Charitable activities

Clinical services 8,098 167 8,265 7,262

Community Outreach Services 887 2,267 3,154 3,031

Helpline - 195 195 258

Raising awareness and improving access 251 218 469 286

9,236 2,847 12,083 10,837

Governance costs 183 - 183 149

Total Resources Expended 4 11,086 2,847 13,933 12,293

Net incoming / (outgoing) resources before transfers

1,515 119 1,634 3,460

Transfers between funds 19 232 (232) - -

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

1,747

(113)

1,634

3,460

Increase/(decrease) in value of investments 564 - 564 (237)

Actuarial surplus/(loss) on defined benefit pension scheme

17 78 - 78 (1,206)

Net movement in funds 2,389 (113) 2,276 2,017

Fund balances brought forward at 1 April 22,107 370 22,477 20,460

Fund balances carried forward at 31 March 19 24,496 257 24,753 22,477




22

Balance Sheet at 31 March 2013

Notes 2013 2012

£’000 £’000

Fixed assets

Tangible fixed assets 9 9,028 8,306

Fixed asset investments 10 14,137 13,134

23,165 21,440

Current assets

Investments 10 - 1

Debtors 11 759 785

Cash at bank and in hand 1,950 2,056

2,709 2,842

Creditors: amounts falling due within one year 12 (974) (1,088)

Net current assets excluding Pension Asset 1,735 1,754

Defined Benefit Pension Scheme Liability 17 (147) (717)

Net assets 18 24,753 22,477

Funds

Unrestricted funds

General fund 12,427 11,799

Investment revaluation reserve 288 (276)

Defined benefit pension scheme deficit (147) (716)

Designated funds 11,928 11,300

24,496 22,107

Restricted funds 257 370

Total Funds 19 24,753 22,477

The notes on pages 24 to 37 form part of these financial statements. The accounts were approved and authorised for issue by the Board of Trustees on 22 July 2013 and signed on its behalf by:

APN Currie CB R Ward Major General Honorary Treasurer Chairman




23

Cash flow statement for the year ended 31 March 2013

2013 2012

£000 £000 £000 £000

Net incoming resources before transfers 1,634 3,460

Adjustment of net surplus / (deficit) to net cash outflow from operating activities

Depreciation 370 326

Decrease in debtors 26 315

Decrease in creditors (114) (245)

Pensions scheme costs under FRS 17 (492) (925)

(210) (529)

Net cash inflow / (outflow) from operating activities 1,424 2,931

Capital expenditure and financial investment

Payments to acquire tangible fixed assets (1,091) (1,162)

Purchase of investments (952) (284)

Receipts from sales of investments - 13

(2,043) (1,433)

Increase / (decrease) in cash (619) 1,498

At 1 April 2012

Cash flows

At 31 March

2013

Changes in net funds during the year £000 £000 £000

Cash at bank, in hand and short term deposits 2,056 (106) 1,950

Cash held by investment manager 6,575 (513) 6,062

8,631 (619) 8,012




24

Notes forming part of the financial statements for the year ended 31 March 2013

1 Accounting policies

a Basis of preparation

The financial statements have been prepared under the historical cost convention, with the exception of investments which are included at market value. The financial statements have been prepared in accordance with the Statement of Recommended Practice (SORP), “Accounting and Reporting by Charities” (Revised 2005) and applicable accounting standards. The charity has presented its accounts as an individual undertaking, not as a group. The subsidiary has not been included as the results are immaterial to the charity accounts (see note 16).

b Company status

The Ex-Services Mental Welfare Society, also known as Combat Stress, is a company limited by guarantee. The directors of the company are the members of the Board of Trustees named on page 38. In the event of Combat Stress being wound up, the liability in respect of the guarantee is limited to £1 per member.

c Fund accounting

General funds are unrestricted funds which are available for use at the discretion of the trustees in furtherance of the general objects of Combat Stress and which have not been designated for other purposes. Designated funds comprise unrestricted funds that have been set aside by the Board of Trustees for particular purposes. The aim and use of each designated fund is set out in the notes to the financial statements. Restricted funds are funds which are to be used in accordance with specific restrictions imposed by donors or which have been raised for particular purposes. The cost of raising and administering such funds are charged against the specific fund. The aim and use of each restricted fund is set out in the notes to the financial statements.

d Incoming resources

All incoming resources are included in the SOFA when Combat Stress is legally entitled to the income, and the amount can be quantified with reasonable accuracy. The following specific policies apply to categories of income:

Legacies

Entitlement is the earlier of Combat Stress being notified of an impending distribution or the legacy being received. No value is included where the legacy is subject to a life interest held by another party.

Donated services and facilities These are included at the value to Combat Stress where this can be quantified. No amounts are included in the financial statements for services donated by volunteers.

Conduit funds Combat Stress acts as agent for other organisations and receives funds on their behalf in respect of registered Veterans. These funds are not recognised as income and are excluded from the Statement of Financial Activities and Balance Sheet.




25

e Resources expended

All expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all costs related to the category. Where costs cannot be directly attributed to particular headings they have been allocated to activities on a basis consistent with use of the resources. Expenditure is allocated as follows: i Cost of generating funds

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

ii Clinical Services This represents all direct expenditure incurred in the running of Treatment Centres, including related payroll, office and other costs. A proportion of central support costs is allocated on the basis set out in note 6. .

iii Community Outreach Services Costs represent the direct expenditure on Community Outreach Services and a proportion of central support costs allocated on the basis set out in note 6.

iv Helpline This represents the direct cost of providing the 24/7 Helpline and a proportion of central support costs allocated on the basis set out in note 6.

v Raising awareness and improving access This represents the direct costs of publicising and promoting our services directly to Veterans, their families and medical health professionals. It includes a proportion of central support costs allocated on the basis set out in note 6.

vi Governance costs These costs are associated with the governance arrangements that relate to the central administration and statutory compliance of Combat Stress as a charity and a limited company. Included within this category are costs associated with strategic management, costs of committees and Board meetings, and Audit fees. It does not include the cost of day to day operational activities.

f Tangible fixed assets

Tangible fixed assets are stated at cost less depreciation and provision for impairment. Only items over £1,000 are capitalised. Repairs are written off as incurred. Depreciation is provided from the date assets are brought into use, to write down cost to estimated residual value over the estimated useful life by equal annual instalments, as follows:

Freehold property 40 years Furniture and equipment 5 years Computer equipment 3 years

g Investments

Investments are stated at market value. Valuations are kept up to date such that when investments are sold there is no gain or loss arising. As a result the statement of financial activities only includes those unrealised gains and losses arising from the revaluation of the investment portfolio throughout the year.

h Pension costs

Contributions to the Ex-Services Mental Welfare Society 1974 Pension & Life Assurance Scheme are charged so as to spread the costs of pensions over the estimated service lives of employees. Contributions to the Group Personal Pension Scheme are charged as incurred.

i Leases

Rentals applicable to operating leases are charged to the Statement of Financial Activities over the period in which the cost is incurred.




26

2 Voluntary income


2013 2012

£'000 £'000 £'000 £'000

Donations 4,095 2,611 6,706 6,772

Statutory Grants - 300 300 340

Legacies 1,274 55 1,329 1,666

Capital appeals - - - 164

5,369 2,966 8,335 8,942

3 Incoming resources from charitable activities


2013 2012

£'000 £'000 £'000 £'000

Clinical services Ministry of Defence - Veterans Agency Fees 1,766 - 1,766 2,649

Contract funding 4,678 - 4,678 3,259

Other income 84 - 84 76

6,528 - 6,528 5,984

Helpline 170 - 170 212

6,698 - 6,698 6,196

4 Total resources expended

Activities undertaken

directly

Allocated Support

Costs Total Total

2013 2012

Restated

£’000 £’000 £’000 £’000

Cost of generating funds 1,537 130 1,667 1,307


Clinical services 7,372 893 8,265 7,262

COS 2,823 331 3,154 3,031

Helpline 189 6 195 258

Awareness raising and improving access 446 23 469 286

10,830 1,253 12,083 10,837

Governance 177 6 183 149

12,544 1,389 13,933 12,293

Resources expended included:

2013 2012

£’000 £’000

Audit fee 11 12

Operating leases 321 564

Depreciation 370 326




27

5 Prior year adjustment

As outlined in note 6 below, the support costs of the charity are allocated to the relevant activity cost category they support. The basis for this allocation has been reviewed and a revised method adopted which is believed to more accurately reflect the costs involved in delivering each activity.

The Statement of Recommended Practice suggests that, where appropriate, expenditure should be allocated directly to an activity cost category. Following changes in our activities it was felt that certain costs should be more correctly allocated directly to an activity cost category, rather than being treated as support costs.

Additionally, the costs of our Public Relations and Communications team were previously included as Fundraising costs. However, we believe that 50% of this team’s costs can be attributed to raising awareness of the mental health problems experienced by Veterans, addressing the stigma of Veterans’ mental health and to improving accessibility to the charity’s services for Veterans. Therefore, we have reallocated the relevant expenditure as direct costs of charitable activities.

The expenditure previously shown in the accounts for the year ended 31 March 2012 have been re-stated to a basis consistent with the new method of allocation used in the year ended 31 March 2013. The effect of the changes is shown below.


directly

Allocated Support

Costs

Total 2012

Restated

£’000 £’000 £’000

Cost of generating funds 1,210 97 1,307


Clinical services 6,416 846 7,262

Community Outreach services 2,702 329 3,031

Helpline 252 6 258

Awareness raising and improving access 267 19 286

9,637 1,200 10,837

Governance 144 5 149

10,991 1,302 12,293


directly

Allocated Support

Costs

Total 2012

As previously

stated

£’000 £’000 £’000

Cost of generating funds 1,522 - 1,522


Clinical services 5,825 1,084 6,909

Community Outreach services 2,977 522 3,499

Treatment centre maintenance & improvements 214 - 214

9,016 1,606 10,622

Governance 149 - 149

10,687 1,606 12,293




28

6 Support costs

Finance Management Human

Resources Information Technology

2013 Total

£’000 £’000 £’000 £’000 £’000

Activities for generating funds 52 18 19 41 130

Clinical Services 240 133 147 373 893

Community Outreach 98 52 57 124 331

Helpline 6 - - - 6 Awareness raising and improving access

13

2

3 5 23

Governance 6 - - - 6

415 205 226 543 1,389

Finance Management Human

Resources Information Technology

2012 Total

Restated

£’000 £’000 £’000 £’000 £’000

Activities for generating funds

36 18 11 32 97

Clinical Services 192 179 113 362 846

Community Outreach 92 72 45 120 329

Helpline 6 - - - 6 Awareness raising and improving access

8

3

2

6

19

Governance 5 - - - 5

339 272 171 520 1,302

Basis of allocation The support costs expenditure is allocated on the following bases: Finance costs On the basis of the value of direct costs incurred by each activity Human resource costs On the basis of Full time equivalent numbers of employees directly employed in each activity Information Technology On the basis of the number of employees directly employed in

each activity Management costs On the basis of the Full-time equivalent number of employees

directly employed in each activity.

7 Trustee Expenses

Out of pocket expenses were reimbursed as follows.

2013 2012

Number £’000 Number £’000

Travel & Sundry Expenses 11 5 10 5

No members of the Board of Trustees received any remuneration or emoluments in respect of their services as a member of the Board of Trustees during the year (2012: £Nil) nor had any beneficial interest in any contract with Combat Stress during the year.




29

8 Staff Costs

2013 2012 £'000 £'000

Wages and salaries 7,649 7,023

Social security costs 753 739

Pension costs 816 1,002

FRS 17 (492) (925)

Other costs 231 244

8,959 8,083

The Remuneration Committee determines the salaries and benefits of the Executive Management Team. Emoluments for employees above £60,000

2013 2012

Number Number

Between £60,001 - £70,000 2 -

Between £70,001 - £80,000 1 2

Between £90,001 - £100,000 2 1

Between £110,001 - £120,000 - 1

Between £150,001 - £160,000 1 1

6 5

Pension contributions for employees above £60,000

2013 2012

Number £’000 Number £’000

Defined contribution schemes 1 16 1 16

Defined benefit schemes - - - -

The number of employees including bank and casual staff, analysed by function was:

2013 2012 (restated)

Number FTE* Number FTE*

Clinical services 190 152 188 155

COS 63 59 60 60

Fundraising and communications

24 23 19 17

Management and administration 19 17 19 19

296 251 286 251

* FTE = Full Time Equivalent




30

9 Tangible Fixed Assets

Assets in the course

of construction

Freehold property

Furniture and

Equipment Total

£'000 £'000 £'000 £'000

Asset Cost

At 1 April 2012 1,283 8,977 651 10,911

Additions 1,059 (193) 225 1,091

Disposals - (19) (19)

Transfers (1,975) 1,975 - -

At 31 March 2013 367 10,759 857 11,983

Accumulated Depreciation

At 1 April 2012 - 2,137 467 2,604

Charge for period - 251 119 370

Disposals - (19) (19)

At 31 March 2013 - 2,388 567 2,955

Net book values

At 1 April 2012 1,282 6,840 184 8,306

At 31 March 2013 367 8,371 290 9,028

10 Investments

Fixed asset investments

2013 2012

£’000 £’000

Investments at start of the period 13,134 9,536

Less cash held by investment manager (6,575) (3,011)

Market value at start of the period 6,559 6,525

Additions at cost 952 284

Disposal proceeds - (13)

7,511 6,796

Net investment gain / (loss) 564 (237)

Market value at end of period 8,075 6,559

Cash held by investment manager 6,062 6,575

14,137 13,134

Analysis of investments held at end of the period Schroders Charity Multi Asset Fund 8,075 6,559

Historical cost of listed investments at end of period 7,211 6,259

Unrealised gains / (losses) 864 300

The cash held by the investment manager is held for cash management purposes.

Current asset investment

2013 2012

£’000 £’000

Short Term Deposits - 1

- 1




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11 Debtors

2013 2012

£’000 £’000

Veterans Agency fees 192 486

Accrued income 149 58

Income tax recoverable 126 19

Other debtors 208 16

Prepayments 84 206

759 785

12 Creditors: amounts falling due within one year

2013 2012

£’000 £’000

Trade creditors 406 661

Other taxes & national insurance 209 205

Accruals & Deferred Income 272 194

Pension fund 87 28

974 1,088

13 Capital and financial commitments

2013 2012

£'000 £'000

Annual commitments under non-cancellable leases:

Less than one year 62 39

One to two years 162 160

Two to five years 113 291

Over five years - 73

14 Contingent Liabilities

In 2011/12 Funding had been received from Help for Heroes for Tyrwhitt House in an amount up to £3.5 million for:

the refurbishment and extension to the Welfare Block

the extension to the Activities Centre

the extension of Tyrwhitt House – the “Living Zone”

the reorganisation of the ground floor of Tyrwhitt House including the construction of a new main entrance

other associated work including profession fees and expenses for design and project management, infrastructure, external works, furnishings and equipment

If Combat Stress disposes of Tyrwhitt House or ceases to make use of it in accordance with its charitable objects then for a period of ten years from 31 March 2011 funding shall be repayable on reducing terms calculated as a proportion of the period yet to expire.




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15 Taxation

As a registered charity the Ex-Services Mental Welfare Society is exempt from taxation of income and gains falling within Section 505 Income and Corporation Taxes Act 1988 or Section 256 Taxation of Chargeable Gains Act 1992 to the extent that these are applied to its charitable objectives. No tax charge has arisen in the year.

16 Trading subsidiary

The charity has one wholly owned trading subsidiary, Combat Stress Trading Limited, which is registered in England and Wales (Company registration number 07839816). The company was incorporated on 9 November 2011 and started to trade on 1 April 2012 and there were therefore no transactions during the year ended 31 March 2011. The following is a summary of the assets and liabilities at 31 March 2013.

2013 2012

£ £

Net assets at 31 March

Current assets 81,557 -

Current liabilities (81,556) -

Share Capital 1 -

Combat Stress Trading Limited’s issued share capital comprises two £1 ordinary shares, which are held by the charity. The main source of income for the company has been the sale of merchandise and promotional material bearing the Combat Stress logo, such as the sale of Christmas cards, clothing and badges. An agreement is in place between Combat Stress and the trading subsidiary such that the profits are gifted annually to Combat Stress.

2013

£

Turnover 157,702

Cost of Sales (101,867)

Gross profit 55,835

Administrative costs (6,540)

Profit for the year 49,295

Gift aid donation to Combat Stress (49,295)

Retained profit for the year -




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17 Pension Costs

2013 2012

£'000 £'000

Defined benefit scheme 723 923

Defined contribution scheme 93 78

816 1,001

Ex-Services Mental Welfare Society 1974 Pension & Life Assurance Scheme

The Ex-Services Mental Welfare Society 1974 Pension & Life Assurance Scheme is a defined benefit scheme which was closed to new entrants on 31 August 2000 and closed to future accrual on 31 March 2013. Over time, under the projected unit method, the current service cost will increase as the members of the scheme approach retirement. The assets of the Scheme are held separately from Combat Stress in a Trustee-administered fund. The Trustees administer the fund in accordance with the Trust Deed and Rules of the Scheme, and in the best interest of the Scheme. Contributions to the Scheme are determined by a qualified actuary on the bases of triennial valuations using the projected unit method. The last valuation of the Scheme was at 30 September 2011, which showed that the actuarial value of the Scheme’s assets represented 84% of the benefits that had accrued to members, after allowing for future increases in earnings. The market value of the scheme assets at the valuation date was £10,594,506 (0f which £5,220,000 related to the value of secured annuities).

The trustees agreed that during the period contributions would be paid at the overall rate of 35.3% of pensionable salaries, inclusive of employee’s contributions of 5% of pensionable salary. Additional contributions of £140,000 were paid under the existing Pension Recovery Plan. Two additional payments were made during the year totalling £300,000. A new Pension Recovery Plan commenced from October 2012 with the employer contributing £200,000 per annum for a period of 8 years. FRS 17 Disclosures In accordance with the requirements of Financial Reporting Standard 17 the full actuarial valuation dated 30 September 2011 has been updated at 31 March 2013 by a qualified actuary using membership data at 30 September 2011, updated for materially significant changes that occurred up to 31 March 2013. Combat Stress has selected assumptions based on actuarial advice. Investments have been valued, for this purpose, at market value. The major assumptions used for the actuarial valuation were:

2013 2012

Discount rate 4.1% 4.6%

Price Inflation 2.8% 2.8%

Pensionable salary increases 2.8% 4.3%

Revaluation of deferred benefits 2.8% 2.8%

Increases to pension in payment at 5% or RPI if less, subject to a minimum of 3% pa Pre 97 Pensions Post 97 Pensions

3.0% 3.3%

3.0% 3.3%

Mortality 2013 2012

Current Pensioners (born 1946) Male 88.6 years 88.4 years

Female 91.1 years 91.0 years

Future Pensioners (born 1968) Male 91.6 years 91.5 years

Female 94.1 years 94.0 years




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17 Pension Costs (continued) Analysis of the scheme assets and liabilities recognised in the Balance Sheet 2013 2012 £'000 £'000

Assets 12,073 10,360 Liabilities (12,220) (11,077)

Surplus / (Deficit) (147) (717)

Analysis of the amount charged to the Statement of Financial Activities under FRS17 2013 2012 £'000 £'000 Current service cost 253 295 Expected return on pension scheme assets (519) (585) Interest on pension scheme liabilities 509 536

Total 243 246

Analysis of changes in the present value of the defined benefit obligations and fair value of assets

Present value of defined benefit

obligation Value of

Scheme Assets

Net (Asset) / Liability

Recognised in the Balance Sheet

2013 2012 2013 2012 2013 2012

£'000 £'000 £'000 £'000 £'000 £'000

Scheme liabilities at the start of the year 11,077 9,738 10,360 9,303 717 435

Current service cost 253 295 - - 253 295

Interest cost 509 536 - - 509 536

Expected return on scheme assets - - 519 585 (519) (585)

Employer contributions - - 735 1,170 (735) (1,170)

Members contributions 43 46 43 46 - -

Benefits received / paid (314) (317) (314) (317) - -

Actuarial (gain) / loss 652 779 730 (427) (78) 1,206 Scheme liabilities at the end of the year

12,220 11,077 12,073 10,360 147 717

2013 2012

% of Scheme

Assets £’000

% of Scheme

Assets £’000

Experience adjustments on scheme liabilities (5.3%) (652) (7.0%) (779) Experience adjustments on scheme assets 6.0% 730 4.1% (427) Actuarial (gain) / loss recognised in STRGL

(10.9%) 78 (10.9%) (1,206)




35

Scheme Assets The assets of the scheme are invested in a Cash Accumulation Policy issued by Prudential. The market value of the assets has been taken as the amount available if the scheme had surrendered its policies with Prudential in accordance with the terms available on surrender. In addition the scheme holds an asset in respect of annuities in payment that have been fully secured with an insurance policy. The value of assets in respect of these policies is taken as equal to the value of the liabilities.

2013 2012

£'000 £'000 Estimated surrender value of Prudential Cash Accumulation Policy 6,003 6,003 Value of annuities secured in respect of pensions in payment 6,070 4,357

12,073 10,360

18 Analysis of net assets between funds

Fund balances at 31 March 2013 are represented by:

Restricted

Funds Designated

Funds General

Funds Total

£'000 £'000 £'000 £'000

Tangible Fixed Assets - 9,028 - 9,028

Investments - 3,041 11,096 14,137

Current assets 257 - 2,452 2,709

Current liabilities - - (974) (974)

Defined benefit pension scheme liability - - (147) (147)

257 12,069 12,427 24,753




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19 Statement of funds

At 1 April

2012 Income Expenditure Gains /

(Losses) Transfers

At 31 March

2013

£'000 £'000 £'000 £'000 £'000 £'000

General reserves 11,799 12,601 (11,577) - (396) 12,427

Investment revaluation reserve (276) - - 564 - 288

Defined benefit pension scheme asset / (liability)

(716) - 491 78 - (147)

Designated funds

Fixed asset fund 7,950 - - - 1,078 9,028

Audley Court project 300 - - - 1,100 1,400

Hollybush House project 300 - - - (300) -

Tyrwhitt House project 1,500 - - - (1,250) 250

IT development fund 750 - - - (250) 500

Property maintenance fund 500 - - - 250 750

Total unrestricted funds 22,107 12,601 (11,086) 642 232 24,496

Restricted funds

Treatment Centres:

Audley Court - 3 - - - 3

Hollybush House - 81 - - - 81

Tyrwhitt House 24 41 (13) - - 52

Community Outreach - 2,138 (2,138) - - -

Helpline - 170 (195) - 25 -

TA/Reservists - 250 (250) - - -

Improving access 272 229 (218) - (257) 26

Clinical services 74 54 (33) - - 95

Total restricted funds 370 2,966 (2,847) - (232) 257

Total funds 22,477 15,567 (13,933) 642 - 24,753

General (Free) Reserves: these are funds which are available for general use and are not designated or restricted to particular purposes.

Investment Revaluation Reserve: this represents the excess of the market value of investments over their historical cost at the balance sheet date.

Defined Benefits Pension Scheme liability: this represents the actuarial deficit calculated under the requirements of FRS17.

Designated Funds:

o Fixed Asset Fund: this represents the net book value of fixed assets and is designated to reflect the fact that the reserve value is tied up in property and assets and therefore the funds cannot be spent on operational activity.

o Audley Court, Tyrwhitt House and Hollybush House Project Funds: these are designated funds which have been set aside for planned capital work.

o IT Development Fund enables Combat Stress to undertake planned development of the Information Technology infrastructure and database software.

o The Property Maintenance Fund is to ensure that sufficient funds are set aside for any unforeseen major property issues.

Restricted funds

o Treatment Centres: These funds have been received for use within the specific Treatment Centres.




37

o Community Outreach: These funds represent donations or grants which have been received for regional Community Outreach Services.

o Helpline: This represents grant funding from the Department of Health for running the Helpline.

o TA/Reservists: This funding is from the Duke of Westminster’s Foundation and funds our work with those who have served in the Territorial Army or Reservists.

o Improving access: This funding has been provided to address stigma issues and to work to improve knowledge of the mental health problems encountered by Veterans so that ex-Service personnel are informed about our Services and can access them more easily.

o Clinical services: this represents two donations, one from BAE Systems which goes towards the costs of The Head of Psychological Therapies, and the other from the Cabinet Office Young Philanthropist Syndicate which is to fund EMDR (Eye Movement and Desensitisation Reprocessing) Therapy.

20 Disclosure of Funding

Funding is acknowledged under the terms and conditions of the following grants:

Funder Purpose Funding Received

Expenditure

£'000 £'000

ABF – The Soldiers’ Charity

Community Outreach and clinical Treatment

320 320

Comic Relief Anti-Stigma Campaign 228 228

Department of Health

Helpline 170 170

Help for Heroes Community Outreach and clinical Treatment

1,000 1,000

Royal Air Force Benevolent Fund


554 554

Royal Navy and Royal Marines Charity


100 100

Scottish Government – Section 10 Grant

Community Outreach - Scotland 200 200

Seafarers UK Community Outreach 40 40

Victims & Survivors Service – Northern Ireland

Community Outreach Team – Northern Ireland

82 82

Wates Family Enterprise Trust

Building work 13 13

Welsh Assembly Community Outreach - Wales 14 14

Westminster Foundation

TA and Reservists Community Outreach

250 250




38

Legal and Administrative Information

Patron

HRH The Prince of Wales KG, KT, GCB, OM, AK, QSO, PC, ADC

President

General Sir Redmond Watt KCB KCVO CBE The members of the Board of Trustees are directors of the charitable company under The Companies Act and are also its trustees for the purposes of charity law. They are collectively referred to as the Trustees. Those who served on the main board and the Society’s committees, supported by members of the Executive during the year and since the year-end were:

Name

Role

Committees

Fin

an

ce

Au

dit

& R

isk

Man

ag

em

en

t

Fu

nd

rais

ing

Med

ical S

erv

ice

s

Rem

un

era

tio

n

No

min

ati

on

s

TRUSTEES Major General APN Currie CB Chair of Trustees X* X*

Colonel P Baxter X*

R Bieber MBE MA R

Air Commodore O Delany OBE MBA BA FCIPD FCMI FBIFM

X X

Lieutenant General A Graham CB CBE X

JM Green OBE MA (Oxon) PGCE Deputy Chair X X X

Major General WEB Loudon CBE X

M Molesworth-St.Aubyn DL A X

RAH Nunneley R

H Pernelet Lic en Droit; Dip Law X*

A Pollitt OBE MA X

TB Royle MA FRSE X

S G Smith X

C Sterba R

Mr R Thompson OBE FInstF X

Dr S Walton BSc MSc PhD CPsychol CSci AFBPsS MRI CDir FRSA

X

Colonel MRL Ward RM Honorary Treasurer X* X X X

Professor Sir Simon C Wessely MA BM BCh MSc MD FRCP FKC FRCPsych FMedSci

X

EXECUTIVE MANAGEMENT Commodore AJB Cameron MA, FCMI, RN Chief Executive X X X X X

Dr W Busuttil MB, ChB, MPhil, MRCGP, MRCPsych

Director of Medical Services X X

Uta Hope MA MInstF Director of Fundraising & Communications

X X

Lieutenant Colonel PM Poole MBE, MILT Director of Strategic Planning and Partnerships

X X

Victoria Reynolds FCCA Director of Finance, Information Management & Governance

X X

Natalie Styles MSc MCIPD Director of Corporate Management X X

Garrett Taylor RGN, DPSN, BSc (Hons), LLM Director of Operations X X

* Committee Chair R Retired/resigned as a trustee on 12 September 2012 A Appointed as a trustee on 12 September 2012




39

Chief Executive

Commodore AJB Cameron MA, FCMI, RN

Company Secretary Victoria Reynolds, FCCA

Registered Office Tyrwhitt House Oaklawn Road Leatherhead Surrey KT22 0BX

Auditors Kingston Smith LLP Devonshire House 60 Goswell Road London EC1M 7AD

Bankers National Westminster Bank plc City of London Office PO Box 12258 1 Princes Street London EC2R 8PA

Investment Managers Schroder & Co Limited 31 Gresham Street London EC2V 7QA

Solicitors Buss Murton Law LLP Wellington Gate 7-9 Church Gate Tunbridge Wells Kent TN1 1HT

Radcliffes Le Brasseur 5 Great College Street Westminster London SW1P 3SJ

McTaggart & Co P O Box 18 72/74 Main Street Largs Ayrshire KA30 8AL

Documents

Combat Stress Annual Report and Accounts 2012/2013