2021-10-31-accounts

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SHAREAfrica (A company limited by guarantee)

Report and Financial Statements For the year ended 31 October 2021

Charity number: 1094198 Company number: 4554704

	Page
Legal and Administrative Information	2
Trustees’ Report	3 to 9
Independent Examiner’s Report	10
Statement of Financial Activities	11
Balance Sheet	12
Notes to the Accounts	13 to 16

LEGAL AND ADMINISTRATIVE INFORMATION

CHAIRMAN OF THE TRUSTEES: Mr J McPhail COMPANY SECRETARY: Mr P Richardson TREASURER: Mr A S Rogers TRUSTEES: Mr L Currie Mr J McPhail Mr P Richardson Mr A S Rogers Mr E Morrow Mr P Cherrie CHARITY NUMBER: 1094198 COMPANY NUMBER: 4554704 REGISTERED OFFICE: 43 Green Lane Harrogate North Yorkshire HG2 9LP PRINCIPAL OFFICE ADDRESS: PO Box 401 Harrogate North Yorkshire HG2 9LP INDEPENDENT EXAMINER: Mr J Allen North Muir Muir of Kinellar Aberdeenshire AB21 0SD BANKERS: Barclays Bank plc 1 St Andrews Square Edinburgh EH2 2BD

TRUSTEES’ REPORT FOR THE YEAR ENDED 31 OCTOBER 2021

The trustees, who are also directors of the charity for the purposes of the Companies Act 2006, present their report with the financial statements of the charity for the year ended 31[st] October 2021. 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 United Kingdom and the Republic of Ireland (FRS102) effective from 1[st] January 2015.

Aims, Objectives, Achievements and Performance

Purposes and Aims

The aims of the charity are to support fellow Christians and others living in impoverished conditions in Africa by donating, sponsoring, and investing in activities that will create opportunities for sustained improvement in livelihoods. Our aims fully reflect the purposes that the charity was set up to further.

Ensuring our work delivers our aims

Our aims, objectives and activities are kept under constant review and discussed at each meeting of the trustees. The outcomes of these reviews are summarised in this report. Fundamental to the review process is the requirement for public benefit as set out in the Charity Commission’s general guidance.

The focus of our work

Our objective for the year continued to be the reduction of poverty in Zambia. To meet this objective SHAREAfrica UK partners with SHAREAfrica Zambia (SAZ, a company registered in Zambia as a company ‘limited by guarantee’) to fulfil the objective of SHAREAfrica UK.

This objective is met through SHAREAfrica Zambia’s business structure which is set up to control the financial and operational activities of all aspects of the business. Presently there are three business units:

SAZ Agri: Provides support for rural smallholder farmers to improve farming yields. This is done through several programmes designed to meet the farming needs in the communities where we operate.
Seed Growing: Different varieties of legume seed are grown so that smallholder farmers have access to quality seed. The seed is bred at the SAZ farms in Chipata in conjunction with support from the Ministry of Agricultures R&D Agency.
Farmer Support Programmes : Smallholder farmers are selected based on predefined criteria aimed at giving those in greatest need the opportunity to become more successful. All farmers are given quality seed at the beginning of the planting season along with training, fertiliser, cash loans, and in some cases oxen and small-scale equipment. SAZ also buys back the farming outputs at a price above the market price at the time of purchase.
Seed and Grain Trading : The seed and grain produced by farmers is collected, sorted, bagged, then stored in purpose-built grain storage sheds. The grain is then sold in bulk soon after it is collected. Seed, however, is kept in storage until the next planting season then distributed to the farmers on the programmes. Surplus seed is sold to seed agents at a considerable markup. The profits are used to expand the Farmer Support Schemes and to provide the tools, training and equipment needed improve farmer outputs in coming years.
SAZ Food Processing: Focuses on using farming outputs to make affordable nutritious food. This meets the growing demand for locally produced food that can compete with the well-

known imported brands. Profits made from selling to supermarkets are used to expand capacity and to produce a highly nutritious breakfast porridge for children on the SAZ Orphan Programme. The breakfast porridge is a Corn Soya Blend made according to the World Food Organisation’s recipe for malnourished children. The factory meets all food and safety standards required by Zambian law. Capital for investment comes from grants (SHAREAfrica UK and international aid agencies) or from loans which are repaid in accordance with the loan conditions.

SAZ Support Programmes: The Farming and Food activities provide many with the opportunity to improve their livelihoods through work and earnings, however, many others living in acute poverty cannot help themselves. These are mainly orphans, widows, and the elderly. The SAZ Support Programmes use profits from the commercial activities along with donations from SHAREAfrica UK, to undertake several charitable activities.
Orphan Support Programme: We support orphans and vulnerable children by providing the means for them to attend school. We also provide a monthly ration of CSB (breakfast porridge) for them and their families. The project is funded by private donors who sponsor a child and donate a monthly amount for the child’s support. The programme is administered by SAZ employees uses a bespoke software to control and account for all donations. The children are visited regularly both at home and at school with visit reports logged in the Orphan Administration System.
Church Support: Food supplies and practical help is given to churches in poor communities where widows and other vulnerable people need support. We also provide help with building repairs such as roofs and extensions, but we do not build churches, we only provide materials so local congregations can take responsibility for the work. Money donated for church support is clearly identified with appropriate tracking on how the money is spent. We do not own church premises nor do we pay pastors or evangelists.
Administration : Central administration covers all aspects of finance, planning, legal, human resource, and general management for all the above. A cloud-based business system (Palladium) is used for all financial and cost accounting. It covers all aspects of the business and allows authorised access from SHAREAfrica UK to check and trace the disbursement of allocated funds.

How our objectives deliver public benefit

All our objectives are delivered through SAZ activities mentioned above. Our approach involves developing skills and infrastructure that allows people to prosper through productivity. This improves earnings which in turn improves the health and wellbeing of families, extended families, and the community at large.

Productivity and earnings are central to improving livelihoods.

Who used and benefitted from our activities in 2021?

1. Seed Growing: 110 Farmers have been trained to grow seed from a variety of parent seed developed at the SAZ farm. The Ministry of Agriculture and the Zambian Agricultural Research Agency provide staff to oversee the growing process. The choice of seed is based on advice from the research agency who breed varieties suitable to the soil and climatic conditions in the area. New higher yielding and disease resistant varieties continue to be tested.

2. Farmer Support Programme : 370 farmers were given seed, training, loans and transport. Some were also given oxen to enable them to cultivate more land. In the end of season survey,

it was reported that most farmers had increased their earnings, and all were keen to participate in the programme the following year. Capital investment in equipment and grain storage facilities has improved yields and profit margins. Recognition by local government of the good work done by SAZ has been very positive.

3. Food Factory : 14 people have been trained to operate specialised equipment. All factory workers are routinely tested by Ministry of Health inspectors. The food recipes and production processes have been developed by SAZ. A special blend of precooked food has been produced using the World Health Organisations specification which is recommended to treat the undernourished.

4. The Orphan Programme: 214 orphans and vulnerable children were supported during the year. The children are selected according to published criteria to ensure that those in greatest need have priority. Although the government now pays for children’s education, some children attend private school because there is no suitable alternative in their area. Each child on the programme receives a monthly food ration, and a personal allowance to assist with their education.

5. Administration and Charitable Activities:

a) Emergency food rations were distributed to people in need.
b) Hospital costs were paid for children suffering with a with chronic illness
c) Designated gifts were delivered to widows and farmers
d) Churches were given Bibles, hymnbooks, and materials to assist with new buildings and building repairs.

6. Direct and indirect beneficiaries

a) In total 33 people are employed by SAZ. Each employee supports on average 6 dependents
b) A further 150+ people are hired as casual workers during the harvest season.
c) 15 Lead farmers receive commissions for their work in training and overseeing other farmers.
d) 480 farmers with an average of 6 dependants are helped improve their food security and increase household incomes.
e) 214 orphans received allowances.

Zambian Economy

Covid: The number of infections reported by the Zambian Government are low compared to many countries in Europe, nevertheless the lockdown restrictions have affected many businesses. The SAZ factory was affected by a drop in supermarket sales, but the farming and other charitable activities were unaffected.

Inflation: inflation for the year remained high at around 20%. Food prices increased significantly which has affected the cost of the weekly food basket, especially for the poor. The high inflation has not been matched with an equivalent increase in wages which means people are worse off overall.

Currency : Recently, the value of the Kwacha has improved against the US Dollar and other major currencies which should eventually see a drop in the price of imported goods, however this may not be seen until the middle of next year.

Financial Review

1 Overall Income

Total Income for the year increased by 12% to £464,517 compared with 2019/20 (£415,270)

2 Balances

Overall opening funds were £227,654. Closing funds were £306,801, which includes £107,136 loans recoverable.

3. Funding Sources

Major donors, those giving more that £10,000, represents 40% of total income. Monthly recurring payments from orphan and farmer support amount to less than 20% of total income. The remainder comes from ad-hoc donations. The spread in sources of income is similar to previous years.

4. Grants Given to SAZ

Grants given to SAZ amounted to £377,448 to SAZ. In addition, loans of £107,136 were extended during the year to SAZ.

Grant funding was allocated as follows:-

Farming £214,122 Orphans £66,061 General £53,870 Church £22,429 Feeding £18,828 Students £2,138 -------------------Total £377,448

The farming programmes have the greatest number of beneficiaries. They also contribute most to the overall growth of the sustainability programmes supported by SHAREAfrica, therefore more money has been allocated to farming to build on proven success.

In the SAZ accounts, Admin is spread to the other business units to reflect the true cost of the programmes being supported by SHAREAfrica UK.

Other SAZ Funding

SAZ generates income from their commercial activities and grant funding from other agencies. This is separate from the funding provided by SHAREAfrica UK.

Investment powers

The Charity’s investment powers are conferred by the Trustee Act 2000.

Reserves Policy

The agreed target is to maintain cash reserves at between 3 and 6 month’s expenditure. At 31[st] October 2021 reserves amounted to just over 6 months of the year’s expenditure.

Basis of Accounting

The financial statements have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland (FRS102). Advantage has been taken of the special provisions of Part 15 of the Companies Act 2006 to allow the format of the financial statement to be adapted to reflect the nature of the company’s operation.

Plans for Future Periods

The charity plans to continue with and, as funding permits, support SAZ in expanding programmes in 2022. These include:

Expanding the seed programme by 25% by introducing new varieties and getting more farmers to grow seed.
Expanding the Outgrowers scheme by 20% by including new farmers from different areas within the Chipata province.
Building an Office and additional storage sheds in Chipata to support the expanding programmes.
Grow the factory sales to justify new investments and return a surplus before tax of 25%
Expand the food programmes to support the growing needs of the poor.

These developments are aimed at increasing the number of beneficiaries while at the same time remaining true to the ‘not-for-profit’ and ‘fair-share’ principles of the organisation.

Management Reporting from SAZ

SAZ is responsible for controlling projects in line with approvals given by SA.

Each month SAZ provided reports to SA which include a monthly income and expenditure statement for each business activity including an explanation of any variances are necessary. Activity and status reports covering all aspects of the business are also issued.

SAZ accounts are audited by professional external auditors.

Structure, Governance and Management

Governing Document

The organisation is a charitable company limited by guarantee, incorporated on 7 October 2002 and registered as a charity on 16 October 2002. The company was established under a Memorandum of Association which established its objects and powers and is governed under its Articles of Association. In the event of the company being wound up members are required to contribute an amount not exceeding £1.

Trustee Induction and Training

New trustees are given a thorough induction into the workings of the charity. Each trustee has a copy of the charity’s memorandum and Articles of Association which is explained by the Company Secretary, together with copies of the organisation’s financial statements, policies and procedures.

Risk Management

The trustees, who have a duty to identify and review the risks to which the charity is exposed and to ensure appropriate controls are in place to provide reasonable assurance against fraud and error, confirm a risk management strategy has been implemented. Strategic risks are considered and, as appropriate, procedures are established to mitigate those identified. Economic conditions in Zambia and fundamental reliance on good rains for our farmers are major factors which are kept under review.

Bribery

The provisions of the Bribery Act 2010 have been noted by the trustees and a resolution agreed to maintain our long established zero tolerance approach both in the UK and Africa. Our agents in Zambia are aware of and in agreement with this policy. We will monitor implementation of our policy in Zambia by requiring annual confirmation statements.

Fundraising and Safeguards

The charity does not employ or work with professional fund raisers or fundraising bodies. The charity takes its responsibility towards supporters who may be considered to be in vulnerable circumstances very seriously. The trustees respond sensitively and appropriately when they become aware of any individual whom they might consider to be in a vulnerable circumstance. The charity ensures that those individuals and bodies supporting the charity understand how their money will be used to assist the charity deliver its aims and objectives. In future impact statements will be sent out to all donors.

Organisation Structure

The trustees comprise the management of the charity. The trustees are all directors of the company and there are no directors who are not trustees. The trustees come from business, financial and administrative backgrounds appropriate to the activities of the charity. The trustees undertake most of the required administrative duties and no salaries or allowances are paid, other than legitimate expenses.

The charity’s activities in Zambia are mainly carried out through a local organisation - SHAREAfrica Zambia (SAZ) – with which the charity has no financial link. When funds are transferred, these are for specific projects, programmes or services and we review to ensure they are used for the purpose they are requested for. Controls are in place to monitor and manage the status and impact of all activities.

Responsibilities of the Trustees

Company law requires the trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charitable company as at the balance sheet date and of its incoming resources and application of resources for the financial year. In preparing these financial statements, the trustees should follow best practice by:

Selecting suitable accounting policies and then apply them consistently;
Making judgements and estimates that are reasonable and prudent; and
Preparing the financial statements on the going concern basis of accounting, unless it is not appropriate to assume that the company will continue on that basis.

The trustees are responsible for maintaining proper accounting records which disclose with reasonable accuracy at any time the financial position of the charitable company and to enable them to ensure that the financial statements comply with the Companies Act 2006. The trustees are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Trustees

The trustees are all directors for the purpose of company law and trustees for the purpose of charity law. Those who served during the year and up to the date of this report are set out on page 2.

In accordance with company law the company’s directors certify that:

so far as we are aware, there is no relevant information of which the company’s independent examiner is unaware; and
we have taken all the steps that we ought to have taken to make ourselves aware of any relevant information and to establish that the charity’s independent examiner is aware of that information.

Independent Examiner

Mr J Allen has expressed his willingness to continue as the charity company’s independent examiner again this year.

This report has been prepared in accordance with the special provisions of Part 15 of the Companies Act 2006 applicable to small companies.

Approved by order of the board of trustees on 29 July 2022 and signed on their behalf by:

Mr J McPhail (Chairman)

INDEPENDENT EXAMINER’S REPORT TO THE TRUSTEES OF SHAREAFRICA

I report on the accounts of the company for the year ended 31 October 2021, which are set out on pages 11 to 16.

Respective responsibilities of trustees and examiner

The charity’s trustees (who are also the directors for the purposes of company law) are responsible for the preparation of the accounts. The charity’s trustees consider that an audit is not required for this year (under Section 144(2) of the Charities Act 2011 (the 2011 Act)) and that an independent examination is required.

Having satisfied myself that the charity is not subject to audit under company law and is eligible for independent examination, it is my responsibility to:

examine the accounts under section 145 of the 2011 Act;
observe the methods and principles in the Charities SORP;
to follow the procedures laid down in the General Directions given by the Charity Commission (under Section 145(5)(b) of the 2011 Act); and
to state whether particular matters have come to my attention.

Basis of independent examiner’s report

My examination was carried out in accordance with the General Directions given by the Charity Commission. An examination includes a review of the accounting records kept by the charity and a comparison of the accounts presented with those records. It also includes consideration of any unusual items or disclosures in the accounts and seeking explanations from you as trustees concerning any such matters. The procedures undertaken do not provide all the evidence that would be required in an audit and consequently no opinion is given as to whether the accounts present a ‘true and fair view’ and the report is limited to those matters set out in the statement below.

Independent examiner’s statement

In connection with my examination, no matter has come to my attention:

1) which gives me reasonable cause to believe that in any material respect the requirements:
to keep accounting records in accordance with section 386 of the Companies Act 2006; and
• to prepare accounts which accord with the accounting records, comply with the accounting requirements sections 394 and 395 of the Companies Act 2006 and with the methods and principals of the 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 United Kingdom and the Republic of Ireland (FRS102) (effective 1 January 2015)

have not been met; or

2) to which, in my opinion, attention should be drawn in order to enable a proper understanding of the accounts to be reached.

Mr J Allen CA Chartered Accountant

STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 OCTOBER 2021

Unrestricted Funds £ 318,257 11	Restricted Funds £ 146,248 -	2020 Total £ 414,773 497
318,268 244,089 244,089 74,179 187,559 261,738	146,248 141,280 141,280 4,968 40,095 45,063	415,270
		382,014
		382,014
		33,256 194,398
		227,654

CONTINUING OPERATIONS

All income and expenditure has arisen from continuing operations.

The notes form part of these financial statements.

BALANCE SHEET AS AT 31 OCTOBER 2021

Notes Current Assets Debtors 5 Cash at bank and in hand Creditors Amounts falling due within one year. 6 Net Assets Funds Unrestricted general fund 7 Restricted funds 7	Unrestricted Funds £ 107,262 156,245 263,507 (1,769) 261,738 261,738 - 261,738	Restricted Funds £ 2,835 42,228 45,063 - 45,063 - 45,063 45,063	2021 Total £ 110,097 198,473 308,570 (1,769) 306,801 261,738 45,063 306,801	2020 Total £ 424 227,230
				227,654 -
				227,654
				187,559 40,095
				227,654

In the Directors’ opinion the company is entitled to exemption from audit under Section 477 of the Companies Act 2006 for the year ended 31 October 2021.

The members have not required the company to obtain an audit of its financial statements for the year ended 31 October 2021 in accordance with Section 476 of the Companies Act 2006.

The directors acknowledge their responsibilities for:

(a) ensuring that the company keeps accounting records which comply with Sections 386 and 387 of the Companies Act 2006 and
(b) preparing financial statements which give a true and fair view of the state of affairs of the company as at the end of each financial year and of its profit or loss for each financial year in accordance with the requirements of Sections 394 and 395 and which otherwise comply with the requirements of the Companies Act 2006 relating to financial statements, so far as applicable to the company.

The financial statements have been prepared in accordance with the special provisions of Part 15 of the Companies Act 2006 relating to small charitable companies.

The notes on pages 13 to 16 form an integral part of these accounts.

The financial statements were approved by the Board of Trustees on 29 July 2022 and were signed on its behalf by:

Mr J. McPhail (Trustee)

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 OCTOBER 2021

1. ACCOUNTING POLICIES

Basis of preparing the financial statements

The financial statements of the charitable company, which is a public benefit entity under FRS102, have been prepared in accordance with the Charities SORP (FRS102) 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 United Kingdom and Republic of Ireland (FRS102) (effective from 1[st] January 2015), Financial Reporting Standard 102, the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland the Companies Act 2016. The financial statements have been prepared under the historical cost convention.

Income

Donations and legacies are accounted for when received by the Charity. All other 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 the headings that aggregate all costs related to the category. Where costs cannot be directly attributable to particular headings they have been allocated to activities on a basis consistent with the use of resources.

Taxation

The charity is exempt from Corporation Tax on its charitable activities.

Fund accounting

Unrestricted funds can be used in accordance with a charitable objective 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 explanations of the nature and purpose of each fund is included in the note in the financial statements.

Restricted Funds £ 130,064 - 16,184	2021 Total £ 438,090 - 26,415 11	2020 Total £ 392,800 18 21,955 497
146,248 Restricted Funds £ 3,213 52,097 66,061 2,138 17,771 - - 141,280 - - - - -	464,516 2021 Total £ 22,429 214,122 66,061 2,138 18,828 - 7,921 385,369 5,405 - 1,148 1,368 7,921	415,270
		2020 Total £ 15,514 48,226 77,099 2,848 - 560 12,559
		382,014
		7,063 1,978 890 2,628
		12,559

4. STAFF COSTS AND EMOLUMENTS

There were no employees during either this or the previous year.

5. DEBTORS

6.

DEBTORS
Unrestricted Funds £ Gift Aid SAZ Loan 126 107,136 Paypal - 107,262 CREDITORS: amounts falling due within one year Unrestricted Funds £ Trade Creditors 1,769 1,769	Restricted Funds £ 2,290 - 545 2,835 Restricted Funds £ - -	2021 £ 2,416 107,136 545 110,097 2021 £ 1,769 1,769	2020 £ 229 - 195
			424
			2020 £ -
			-

7. MOVEMENT IN FUNDS

At 01.11.20 Net movement in funds £ £ Unrestricted funds General Reserve 187,559 74,179 Restricted funds Church - - Farmers 1,006 1,030 Orphans 23,297 6,004 Further/Higher Education 14,844 (2,139) Feeding 166 (166) Water 184 - Special Needs 598 239 40,095 4,968 TOTAL FUNDS 227,654 79,147 Net movement in funds, included in the above are as follows:- Incoming resources Resources expended £ £ Unrestricted funds General Reserve 318,268 244,089 Restricted funds Church 3,213 3,213 Farmers 53,127 52,097 Orphans 72,063 66,061 Further/Higher Education - 2,138 Feeding 17,605 17,771 Water - - Special Needs 240 - 146,248 141,280 TOTAL FUNDS 464,516 385,369	At 31.10.21 £ 261,738
	- 2,036 29,301 12,705 0 184 837
	45,063
	306,801
	Movement in funds £ 74,179
	- 1,030 6,002 (2,138) (166) - 240
	4,968
	79,147

The General Reserve represents the “free funds” of the charity which are not designated for particular purposes.

8. TRUSTEES’ EXPENSES

. TRUSTEES’ EXPENSES
Number of trustees who were paid expenses Nature of expenses: Travel	2021 0 - -	2020 1 -
		1,978

No remuneration or expenses were paid to the trustees during this year. (Expenses of £1,978 were paid to one trustee in 2020)

9. GENERAL MATTERS

a. SHAREAfrica is a company limited by guarantee and incorporated in England. Its registered office is at 43 Green Lane, Harrogate, North Yorkshire HG2 9LP.
b. The financial statements are presented in sterling which is a functional currency of the company.
c. The charitable activities undertaken focus on poverty relief in Zambia. The activities in Zambia are undertaken through a local organisation SHAREAfrica Zambia with which the charity has no financial link. Funds by way of aid are transferred to SHAREAfrica Zambia for specific projects and services with controls being in place to monitor and manage the status and impact of the activities funded. Mr J McPhail is a controlling director of SHAREAfrica Zambia and has a casting vote in that company in order to protect the funding provided by the charity. It is the opinion of the trustees that SHAREAfrica Zambia is a related party in view of the management control which can be exercised. Funds advanced to SHAREAfrica Zambia in fulfilment of charitable purposes during the financial year were £377,448 (2020: £364,455). In addition, loans totalling £107,136 were advanced during the financial year.

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