REGISTERED CHARITY NUMBER: 1159334

REPORT OF THE TRUSTEES AND

UNAUDITED FINANCIAL STATEMENTS FOR THE YEAR
ENDED 31 DECEMBER 2018
FOR
Narconon United Kingdom

Grant Sellers
Bank Court
Manor Road
Verwood
Dorset
BH31 6DY
Narconon United Kingdom

CONTENTS OF THE FINANCIAL STATEMENTS

For The Year Ended 31 December 2018

Page

Report of the Trustees 1 to4

Independent Examiner's Report

Statement of Financial Activities

Balance Sheet

Cash Flow Statement

Notes to the Cash Flow Statement

Notes to the Financial Statements 10 to 16

Narconon United Kingdom

REPORT OF THE TRUSTEES

For The Year Ended 31 December 2018

The trustees present their report with the financial statements of the charity for the year ended 31 December 2018, The
trustees have adopted the provisions of Accounting and Reporting by Charities: Statement of Recommended Practice
applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the
UK and Republic of Ireland (FRS 102) (effective 1 January 2015).

OMECTIVES AND ACTIVITIES

Objectives and aims
Our charity's purposes are to:

(1) To reform and rehabilitate persons who are for the time being or who have at any time been drug addicts;
(2) To assist in the reformation and rehabilitation of persons who have at any time been convicted (whether in the United
Kingdom or elsewhere) of any crime;
(3) To advance the education of the public and/or persons who are or have been dependent upon or affected by the use
of drugs about all matters relating to drug abuse/addiction in particular by the provision of advice, information and
support.

Ensuring our work delivers our aims:

We review our aims, objectives and activities each year. This review looks at what we achieved and the outcomes of our
work in the previous year. The review looks at the success of each key activity and the benefits they have brought to
those groups of people we are set up to help.

The review also helps us ensure our aim, objectives and activities remained focused on our stated purposes. We have
referred to the guidance contained m the Charity Commission's general guidance on public benefit when reviewing our
aim and objectives and in planning our future activities. In particular, the trustees consider how planned activities will
contribute to the aims and objectives they have set.

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 Narconon United Kingdom

REPORT OF THE TRUSTEES

For The Year Ended 31 December 2018

ACHIEVEMENT AND PERFORMANCE

Charitable activities
Our main objective is to rehabilitate substance misusers and train specialist staff in the delivery of the Narconon
abstinence based programme.

At Narconon United Kingdom, we recognise that our very existence depends on our providing services and products
which are of high quality and which closely meet the substance misuser's needs. This involves a commitment to provide
a reliable service; to give a quick and authoritative response and to be able to gain first-hand experience about how our
service is experienced by our clients by the use of a Routine Outcome Monitoring (ROM) system during their
programme, and up to two years following the programme completion.

Senior managers and all staff are able to clearly identify and articulate the value system of Narconon and then to
effectively communicate this through personal attention, persistence and direct intervention. This emphasis on values is
clearly illustrated in Narconon's goal, which is to deliver a unique rehabilitation programme, which not only gets a
person off drugs or alcohol, but also gives them back control of their life.

Narconon is an evidence-based approach, developed over four decades.

After completing drug free withdrawal, where the client receives 24-hour assistance and supervision, and dependent on
medical approval, they then do the detoxification programme. This includes sauna, exercise and nutrition to help reduce
craving, cleattse the body and improve health. The remainder of the programme consists of five learning modules, each
with a purpose, expected outcome, and typical duration but specifically geared to each individuals care plan. These steps
foster motivation for change while managing attendant painful responses to change, teach the person coping skills,
reinforce contingency awareness, and promote enduring positive behaviour. Narconon clients are referred to as
students.

Narconon has expanded its form of clinical governance and clinical audit the trustees have dexdsed a system/ process for
maintaining and improving the quality of care. That designated responsibility for clinical governance exists at Trustee
level, and the trustees have prepared an Annual Review of Clinical Governance to report on quality of care and its
maintenance. It is the responsibility of the registered manager to interpret the principle of clinical governance into
appropriate structures, processes, roles and responsibility.

Staff training is based on person-centered care. Each student has a detailed care plan which is monitored against each
module completion. This allows the student to see what progress they are making as the go through the programme.
Some students have low literacy skills. In these situations they have been given a staff member to work with them on a
one to one basis. In the course room course supervisors are skilled in the detection of barriers to study and how to help
the student. Staff were trained in different protected characteristics, which require different needs. To address some of
the issues arising &om the Mental Capacity Act 2005 (MCA) and as part of the pre-admission assessment, we have
upgraded our admission and pre-admission processes and are better able to risk assess as well as draw conclusions based
upon age, sex, domestic arrangements, type of substance misuse etc. those students most likely to revert and need
ongoing support and atler care.

Over the year we continued to connect the Narconon programme with policy and practice to better the lives of students,
their families and their wider community adversely impacted by substance use and addiction. Our vision through our
continued aims and objectives is: lasting solutions that f'ree individuals and communities &om the devastation of
substance use and addiction.

We are pleased to have a skilled multi-disciplinary team who have adapted well to a challenging year of change. They
have successfully delivered the Narconon programme to a range of service users from different ethnic and culturally
diverse groups including service users on mandatory orders as part of Drug Rehabilitation Requirements.
Externally we
have supported people with drug or alcohol issues and have delivered various types of treatment ranging &om basic
advice and information to structured interventions.

We also developed a Crisis Team who responds by aiding ex-student service users who present a high risk of recidivism.
Our supervisor reported the following positive out-comes fiom the students who graduated the programme:

"l. I am still in regular contact with this student. He has been successful in pursing his ambitions of working for the
MOD.

2. This student has completed two years drug free and is still in contact via Facebook.
Page 2
 Narconon United Kingdom

REPORT OF THE TRUSTEES

For The Year Ended 31 December 2018

ACHIEVEMENT AND PERFORMANCE

Charitable activities

3. This student went on to achieve his dream of studying for an MBA and securing a job. I stayed in contact with him
for
two years. As he now considers us a part of his previous life history, he is no longer in
regular contact with me except
through Facebook.

4. This student went through a traumatic time with his family and business partner because of his previous cocaine
addiction. His family including his wife and children have all been assisted
by Narconon over the past two years. He is
in regular contact and is now doing well both domestically and in his business life.

5. This student lives abroad and stayed in regular contact during her ROM monitoring. She is in full time work and is not
drinking she is now in contact with a Narconon volunteer.

6. This student successfully gained a post graduate place at King' s. She is in regular contact with Gisella a Narconon
field staff member

7. This student has gone from strength to strength he is in regular contact with me. He works in IT and
contacted me last
week to say he had just been promoted. He remains drug free.

8. I worked with this student to help her gain custody of her children. She is drug &ee and still in
regular contact via
Facebook. She is now working in the Drug and Alcohol field. She recently did a media interview
outlining her success
on the Narconon pro-gramme

9. This student is in regular contact. She has set up her own business and has re-gained full custody of her daughter. She
remains drug &ee.

The outcome shows the remarkable success of graduates who remain drug and alcohol &ee and returned to productive
and happy lifestyles.

FINANCIAL REVIEW
Principal funding sources
The activities of Narconon United Kingdom in the year have been facilitated by donations from Narconon
International
and grants received from Narconon Trust, along with income &om rehabilitation services provided.

Investment policy and objectives

The charity has the power to invest in any way the trustees wish. The trustees, having
regard to the liquidity
requirements of the charity's operations and to the reserves policy, will operate a policy of
keeping available funds in
interest bearing deposit accounts which pay a rate of interest in excess of the rate of inflation.

Reserves policy
The Trustees are conscious of the need to hold adequate reserves to react to challenging economic times whilst also
ensuring that the maximum level of resources are applied to the people who depend upon the charity to provide
rehabilitation, education and assistance.

FUTURE PLANS
The charity plans continuing the activities outlined above in the forthcoming years so as to provide
drug education and
rehabilitation and training of volunteers for other Narconon drug rehabilitation and prevention faciTities.

STRUCTURE, GOVERNANCE AND MANAGEMENT

Governing document
The organisation is a charitable incorporated organisation registered on 24 November 2014.

Recruitment and appointment of new trustees

New trustees are appointed by existing trustees. New trustees undergo an orientation session to
brief them on their legal
obligations under charity law, the content of the memorandum and articles of association, the decision
making processes,
the business plan and recent financial performance of the charity.

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 Narconon United Kingdom

REPORT OF THE TRUSTEES

For The Year Ended 3l December 20lg

STRUCTURE, GOVERNANCE AND MANAGEMENT

Organisational structure
The Trustees are responsible for the administration and ruruting of the activities of' the Charity.

REFERENCE AND ADMlNISTRATlVE DETAlLS

Registered Cbarity number
ll59334

Principal address
42/44 Copthome Road
frelbridge
East Grinstead
West Sussex
RH l9 2NS

Trustees
Mrs H A Rose
Ms B S Bradley
lvls 3 R Gardner - resigned 2.8.2019
bls M C Angius - appointed 2.S.20 l 9

Independent examiner
Stephen Sellers
institute ol'Chartered Accountants in England and Wales
Grant Sellers
Bank Court
Manor Road
Ven, sood
Dorset
BH3I 6DY

Solicitors

„.9
Hodkin and Company. 42-44 Copthorne Road. Felbridge. East Cirinstead. West Sussex. RH19 2NS

Approved by order of the board ot trustees on . + P. . t .~P... '. ~ and signed on its behalf by:

Mrs H A Rose - Trustee

Page 4
 INDEPENDENT EXAMINER'S REPORT TO THE TRUSTEES OF
NARCONON UNITED KINGDOM

Independent examiner's report to the trustees of Narconon United Kingdom

I report to the charity trustees on my examination of the accounts of the Narconon United Kingdom (the Trust) for the
year ended 31 December 2018.

Responsibilities and basis of report

As the charity trustees of the Trust you are responsible for the preparation of the accounts in accordance with the
requirements of the Charities Act 2011 ('the Act').

I report in respect of my examination of the Trust's accounts carried out under section 145 of the Act and in carrying out
my examination I have followed all applicable Directions given by the Charity Commission under section 145(5)(b) of
the Act.

Independent examiner's statement

Since your charity's gross income exceeded f250, 000 your examiner must be a member of a listed body. I can confirm
that I am qualified to undertake the examination because I am a registered member of Institute of Chartered Accountants
in England and Wales which is one of the listed bodies

I have completed my examination. I confirm that no material matters have come to my attention in connection with the
examination giving me cause to believe that in any material respect:

l. accounting records were not kept in respect of the Trust as required by section 130 of the Act; or
2. the accounts do not accord with those records; or
3. the accounts do not comply with the applicable requirements concerning the form and content of accounts set out
in the Charities (Accounts and Reports) Regulations 2008 other than any requirement that the accounts
give a
true and fair view which is not a matter considered as part of an independent examination.

I have no concerns and have come across no other matters in connection with the exmunation to which attention should
be drawn in this report in order to enable a proper understanding of the accounts to be reached.

Stephen Sellers
Institute of Chartered Accountants in England and Wales
Grant Sellers
Bank Court
Manor Road
Verwood
Dorset
BH31 6DY

Date
.~ I

Page 5
 Narconon United Kingdom

STATEMENT OF FINANCIAL ACTIVITIES

For The Year Ended 31 December 2018

2018 2017
Unrestricted Restricted Total funds Total funds
funds funds
Not f
es
INCOME AND ENDOWMENTS FROM
Donations and legacies 4, 192 389,974 394, 166 17,552
Charitable activities income 322, 464 322, 464 297, 957
Investment income 24 24
Total 326,680 389,974 716,654 315,509

EXPENDITURE ON
Raising funds 7,426 93,166 100,592 43, 073
Charitable activities
Drug and offender rehabilitation 309081 249, 7S4 559, 165 327, 252
Other 3 051 32 059 35 110 7, 780
Total 319,858 375,009 694, 867 378, 105

NET INCOME/(EXPENDITURE) 6,822 14,965 21,787 (62, 596)

RECONCILIATION OF FUNDS

Total funds brought forward 30,015 30,015 92, 611

TOTAL FUNDS CARRIED FORWARD 36 837 14 965 51 802 30 015

The notes form part of these financial statements

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 Narconon United Kingdom

BALANCE SHEET
At 31 December 2018

2018 2017
Unrestricted Restricted Total Total
funds funds funds funds
Notes f f
FIXED ASSETS
Tangible assets 3~3 3~3 4.457
CURRENT ASSETS
Debtors 12 11,579 11579 20, 846
Cash at bank and in hand 51422 14,965 66,487 44, 858

63, 101 14,965 78,066 65, 704

CREDITORS
Amounts falling due vvithin one year 13 (29,607) (29,607) (40. 146)

NET CURRENT ASSETS 33,494 14,965 48,459 25, 558

TOTAL ASSETS LESS CURRENT

LIABILITIES 36437 14,965 51W2 30.015

NET ASSETS 36,837 14,965 51,802 30,015

FUNDS 15
Unrestricted t'unds 36W7 30.015
Restricted funds 14,965

TOTAL FUNDS 51,802 30.015

The tinancial statements vvere approved by the Board of Trustees ~.

on ...... ~..!....[p,
ag, f9
....."....!....l. . . and were signed on its
behalf bv::

4(tv(@4+
W(rs H A Rose -Trustee

The notes form part ot these financial statements

Page 7
Narconon United Kingdom

CASH FLOW STATEMENT

For The Year Ended 31 December 2018

2018 2017
Notes
Cash flows from operating activities:
Cash generated Irom operations 21,605 (64, 738)

Net cash provided by (used in) operating

activities 21,605 (64, 738)

Cash flows from investing activities:

Interest received 24

Net cash provided by (used in) investing activities

Change in cash and cash equivalents in the

reporting period 21,629 (64, 738 )
Cash and cash equivalents at the beginning of the
reporting period 44, 848 109,586

Cash and cash equivalents at the end of the

reporting period 66,477 44, 848

The notes form part of these financial statements

Page 8
Narconon United Kingdom

NOTES TO THE CASH FLOW STATEMENT

For The Year Ended 31 December 2018

1. RECONCILIATION OF NET INCOME/(EXPENDITURE) TO NET CASH FLOW FROM

OPERATING ACTIVITIES
2018 2017
Net income/(expenditure) for the reporting period (as per the statement
of financial activities) 21,787 (62, 596)
Adjustments for:
Depreciation charges 1,114 1,486
Interest received (24)
Decrease/(increase) in debtors 9,267 (14, 132)
(Decrease)/increase in creditors (10,539) 10,504

Net cash provided by (used in) operating activities 21,605 (64, 738)

2. ANALYSIS OF CASH AND CASH EQUIVALENTS

2018 2017
Cash in hand 1,258 1,258
Notice deposits (less than 3 months) 65,229 43, 600
OverdraAs included in bank loans and overdrafts falling due within one year (10) (10)
Total cash and cash equivalents 66,477 44, 848

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Narconon United Kingdom

NOTES TO THE FINANCIAL STATEMENTS

For The Year Ended 31 December 2018

ACCOUNTING POLICIES

Basis of preparing the financial statements

The financial statements of the charity, which is a public benefit entity under FRS 102, have been
prepared in
accordance with the Charities SORP (FRS 102) 'Accounting and Reporting by Charities: Statement
of
Recommended Practice applicable to charities preparing their accounts in accordance with the Financial
Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2015)',
Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic
of
Ireland' and the Charities Act 2011. The financial statements have been
prepared under the historical cost
convention.

The functional currency of the charity is GBP.

Income
All income is recognised in the Statement of Financial Activities once the charity has entitlement to the funds, it
is probable that the income will be received and the amount can be measured reliably.

Expenditure
Liabilities are recognised as expenditure as soon as there is a legal or constructive obligation committing
the
charity to that expenditure, it is probable that a transfer of economic benefits will be required in settlement and
the amount of the obligation can be measured reliably. Expenditure is accounted for on an accruals basis and has
been classified under headings that aggregate all cost related to the category. Where costs cannot be directly
attributed to particular headings they have been allocated to activities on a basis consistent with the
use of
resources.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful
life.

Plant and machinery - 25% on reducing balance

Taxation
The charity is exempt from tax on its charitable activities.

Fund accounting
Unrestricted funds can be used in accordance with the charitable objectives at the discretion of the trustees.

Restricted funds can only be used for particular restricted purposes within the objects of the charity. Restrictions
arise when specified by the donor or when funds are raised for particular restricted purposes.

Further explanation of the nature and purpose of each fund is included in the notes to the financial statements.

Foreign currencies
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the
balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange
ruling at
the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Pension costs and other post-retirement benefits

The charity operates a defined contribution pension scheme. Contributions payable to the charity's pension
scheme are charged to the Statement of Financial Activities in the period to which they relate.

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 Narconon United Kingdom

NOTES TO THE FINANCIAL STATEMENTS - CONTINUED

For The Year Ended 31 December 2018

2. DONATIONS AND LEGACIES

2018 2017
Donations
4, 189 10,975
Grants 389 977 6 577

394, 166 17 552

Grants received, included in the above, are as follows:

2018 2017
Able Grant
6, 577
Narconon Trust 389,977

389 977 6 577

3. CHARITABLE ACTIVITIES INCOME

2018 2017
f
Rehabilitation Centre income 322 464 297, 957

4, INVESTMENT INCOME

2018 2017
Deposit account interest 24

5. RAISING FUNDS

Raising donations and legacies

2018 2017
f
Training 3,922 6, 969
Advertising 96 670 36 104

100 592 43 073

6. CHARITABLE ACTIVITIES COSTS

Direct costs Support costs Totals

(See note 7)
f f
Drug and offender rehabilitation 504 984 54 181 559 165

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 Narconon United Kingdom

NOTES TO THE FINANCIAL STATEMENTS - CONTINUED

For The Year Ended 31 December 2018

7. SUPPORT COSTS

Information Governance
Management Finance technology costs Totals

Drug and offender

rehabilitation 21,503 4,088 378 28,212 54, 181

8. TRUSTEES' REMUNERATION AND BENEFITS

There were no trtistees' remuneration or other benefits for the year ended 31 December 2018 nor for the year
ended 31 December 2017,

Trustees' expenses
There were no trustees' expenses paid for the year ended 31 December 2018 nor for the year ended
31 December 2017 .

STAFF COSTS

2018 2017
Wages and salaries 227, 447 114,456
Social security cosW 17,799 6, 934
Other pension costs 2,263

247, 509 121,390

The average monthly number of employees during the year was as follows:

2018 2017
Average number of employees 12 8

No employees received emoluments in excess of $60, 000.

10. COMPARATIVES FOR THE STATEMENT OF FINANCIAL ACTIVITIES

Unrestricted Restricted Total

funds fund funds

INCOME AND ENDOWMENTS FROM

Donations and legacies 17,552 17,552

Other trading activities 297, 957 297, 957

Total 315,509 315,509

EXPENDITURE ON
Raising funds 43,073 43, 073
Charitable activities
Drug and offender rehabilitation 327, 252 327, 252

Other 7,780 7, 780

Total 378, 105 378, 105

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 Narconon United Kingdom

NOTES TO THE FINANCIAL STATEMENTS - CONTINUED

For The Year Ended 31 December 2018

10. COMPARATIVES FOR THE STATEMENT OF FINANCIAL ACTIVITIES - continued

Unrestricted Restricted Total
funds fund funds

NET INCOME/(EXPENDITURE) (62,596) (62, 596)

RECONCILIATION OF FUNDS

Total funds brought forward 92,611 92, 611

TOTAL FUNDS CARRIED FORWARD 30,015 30,015

11. TANGIBLE FIXED ASSETS

Plant and
machinery

COST
At 1 January 2018 and 31 December 2018 7,314

DEPRECIATION
At 1 January 2018 2, 857
Charge for year
1,114
At 31 December 2018
3,971

NET BOOK VALUE

At 31 December 2018
3,343
At 31 December 2017 4, 457

12. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2018 2017
Trade debtors 1i/79 20, 846

13. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2018 2017
Bank loans and overdraAs (see note 14) 10 10
Trade creditors 2,522 4, 096
Taxation and social security 8, 146 12,622
Other creditors 18,929 23,418

29,607 40, 146

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Narconon United Kingdom

NOTES TO THE FINANCIAL STATEMENTS - CONTINUED

For The Year Ended 31 December 2018

14. LOANS

An analysis of the maturity of loans is given below:

2018 2017
Amounts falling due within one year on demand:
Bank overdraAs 10

15. MOVEMENT IN FUNDS

Net
movement in
At 1/1/18 funds At 31/12/18

Unrestricted funds
General fund 30,015 6,822 36,837

Restricted funds
Narconon Trust Grant 4 477 477
Narconon Trust Grant 5 3,477 3,477
Narconon Trust Grant 8 11,011 11,011

14,965 14,965

TOTAL FUNDS 30,015 21,787 51,802

Net movement in funds, included in the above are as follows:

Incoming Resources Movement in

resources expended funds

Unrestricted funds
General fund 326,680 (319,858) 6, 822

Restricted funds
Narconon Trust Grant 1 9,649 (9,649)
Narconon Trust Grant 2 43/29 (43,229)
Narconon Trust Grant 3 23,027 (23,027)
Narconon Trust Grant 4 208, 671 (208, 194) 477
Narconon Trust Grant 5 30,000 (26,523) 3,477
Narconon Trust Grant 6 12/99 (12399)
Narconon Trust Grant 7 32,999 (32,999)
Narconon Trust Grant 8 30,000 (18,989) 11,011

389,974 (375,009) 14,965

TOTAL FUNDS 716,654 (694,867) 21,787

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Narconon United Kingdom

NOTES TO THE FINANCIAl. STATEMENTS - CONTINUED

For The Year Ended 31 December 2018

15. MOVEMENT IN FUNDS - continued

Comparatives for movement in funds

Net
movement in
At 1/1/17 funds At 31/12/17
f f
Unrestricted Funds
General fund 92,611 (62, 596) 30,015

TOTAL FUNDS 92,611 (62, 596) 30,015

Comparative net movement in funds, included in the above are as follows:

Incoming Resources Movement in

resources expended funds

Unrestricted funds
General fund 315,509 (378, 105) (62,596)

TOTAL FUNDS 315,509 (378, 105) (62,596)

A current year 12 months aud prior year 12 months combined position is as follows:

Net
movement in
At 1/1/17 funds At 31/12/18

Unrestricted funds
General fund 92,611 (55,774) 36,837

Restricted funds
Narconon Trust Grant 4 477 477
Narconon Trust Grant 5 3,477 3,477
Narconon Trust Grant 8 11,011 11,011

14,965 14,965

TOTAL FUNDS 92,611 (40, 809) 51,802

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Narconon United Kingdom

NOTES TO THE FINANCIAL STATEMENTS - CONTINUED

For The Year Ended 31 December 2018

15. MOVEMENT IN FUNDS - continued

A current year 12 months and prior year 12 months combined net movement in funds, included in the above are
as follows:

Incoming Resources Movement in

resources expended funds

Unrestricted funds
General fund 642, 189 (697,963) (55,774)

Restricted funds
Narconon Trust Grant 1 9,649 (9,649)
Narconon Trust Grant 2 43,229 (43,229)
Narconon Trust Grant 3 23,027 (23,027)
Narconon Trust Grant 4 208, 671 (208, 194) 477
Narconon Trust Grant 5 30,000 (26,523) 3,477
Narconon Trust Grant 6 12/99 (12399)
Narconon Trust Grant 7 32,999 (32,999)
Narconon Trust Grant 8 30,000 (18,989) 11,011

389,974 (375,009) 14,965

TOTAL FUNDS 1,032, 163 (1,072,972 ) (40,809)

16. RELATED PARTY DISCLOSURES

Narconon United Kingdom and Narconon Trust share similar aims and f'rom time to time provide mutual
assistance to each other and therefore arguably qualify as related parties as defined by FRS102.

During the year the main property was rented &om Narconon Trust rent-free.

There v ere grants received in the year from Narconon Trust totalling f 389,977 (2017: fNil).

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