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2022-12-31-accounts

KARUNA ACTION

Trustees Report and Financial Statements

1[st] January to 31[st] December 2022

Registered Charity: 1185570

Karuna Action, 11 Wellington Street, Aldershot, Hampshire, GU11 1DX T: +44 (0) 1252 333233 F: +44 (0) 1252 310814 office@karunaaction.org www.karunaaction.org Registered charity: 1185570

Accounting year 1[st] January to 31[st] December 2022

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Karuna Action

CONTENTS

Page

Contents 1
Chairman’s Report 2
Trustees Report 3-6
Legal details 3
Objectives and activities 3
Public benefit 3
Structure, Governance and Management 4
Review of the financial period 4
Achievements and Performance 4
Karuna Coffee 5
Volunteer Support 5
Future Strategic Plans 5
Funds in Deficit 5
Related Charities 5
Government Grants 5
Donation Policies 5
Investment Powers 6
Review and Management of Risks 6
Reserves 6
Responsibilities of the Trustees 6
Independent Examiners Report 7
Statement of Financial Activities 8
Balance Sheet 9
Notes to the Financial Statements 10-14
Note 1
Accounting Policies		 10
Note 2
Expenditure by type and activity		 11
Notes 3-7
SOFA notes		 12
Notes 8-11
Balance sheet notes		 13
Note 12
Movement of Unrestricted		 14
and Restricted funds

Accounting year 1[st] January to 31[st] December 2022

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Karuna Action

CHAIRMAN’S REPORT

2022 and start of 2023 were a return to the more familiar patterns of activity post pandemic with an increase in local action and the further development of the coffee house. It was also a time of reflection on how the core activities are in line with the principles and vision of the charity.

It was a year of change with Lewis Tonks moving on from working in the roastery. This led to an evaluation of coffee production and a decision to reduce production, stop coffee subscriptions and just continue roasting for local people and the coffee house. This led to a re-development of the roastery area into an extension of the coffee house. This in turn has increased the need for additional part-time staffing alongside the volunteers who work in the coffee house.

In the coming year there is a need for travel to visit partners to ensure that we have strong continuing relationships with our partner projects. Financially the reduction of coffee production and the change in staffing has supported the growth of our reserves.

I would like to thank all the staff at Karuna and in particular Simon and Jess for their hard work and dedication in ensuring that Karuna's vision to support people in poverty is fulfilled.

Paul Walsh

.

Accounting year 1[st] January to 31[st] December 2022 3 of 14

Karuna Action

TRUSTEES REPORT

The trustees present their report and the financial statements for the year from 1[st] January to 31[st] December 2022.

LEGAL DETAILS

Trustees

Anna Bland Clare Brown Paul Clements Resigned November 2022 George Dowdell Martin Hannington Catherine Harris Catherine Raine Paul Walsh (Chairman)

Director

Simon Hannington

Address

11 Wellington Street Aldershot Hampshire GU11 1DX

Bankers

Cooperative Bank PLC PO Box 250 Delph House, Southway Skelmersdale, WM8 6WT

Independent Examiners Ltd

Unit 2 The Broadbridge Centre Delling Lane Bosham West Sussex PO18 8NF

Email

office@karunaaction.org

OBJECTIVES AND ACTIVITIES

Our Objective is to be a voice of justice for the oppressed, ending poverty through compassion in sustainable communities and to bring the message of the gospel to a new generation. Our faith calls us to “remember the poor” (Galatians 2:10) and we aim to do this through the relief of poverty and suffering throughout the world. The main activities and aims for the public benefit are:

Activities Aims
Education and To ensure that children are able to receive a good education to secondary level or higher
Youth education in some cases.
Income Generation To give families the opportunity of setting up a small business to provide for or supplement
family income.
Health Care To provide healthcare for those without easy access or the financial ability.
Orphans/Widows To care for children who do not have anyone else to care for them.
Emergency Relief Relief for those affected by war, drought and natural disasters.
Community Action To work with local communities in the Aldershot area and the United Kingdom generally.
To set up and run a community coffee shop for the benefit of the local community and to
generate funds to further the work of the charity.
Raising Awareness To raise awareness to the public of the effects of poverty around the world and to encourage
people to get involved.

PUBLIC BENEFIT

In determining our programmes, we have to regard both the Charity Commission’s general guidance on public benefit and prevention and relief of poverty for the public benefit. The trustees ensure that our programmes are in line with our charitable objects and aims.

Accounting year 1[st] January to 31[st] December 2022 4 of 14

Karuna Action

STRUCTURE, GOVERNANCE AND MANAGEMENT

The name of the charity is KARUNA ACTION. It was formerly known as KINGSCARE, the name being changed in February 2012. The charity was formerly governed by the Declaration of Trust dated 21st October 1998 and registered with the Charity Commission as charity number 1072613.

On the 30[th] of September 2019, the charity registered with The Charity Commission as a C.I.O. (Charitable Incorporated Organisation) number 1185570. The charity name and objects remain unchanged.

New trustees are appointed by a resolution of the Trustees at a meeting of the Trustees at which there is a majority of the Trustees present. New Trustees meet with the chairman of the Trustees and the Director and are given copies of the accounts for the last 3 years, minutes of Trustee meetings, a copy of the governing trust deed and a copy of the relevant Charity Commission booklet.

The Trustees meet formally once or twice a year, though these meetings can be supplemented by Focus Groups on particular aspects of the charity each consisting a few trustees. All trustees are entitled to attend these Focus Groups. In addition the director makes extensive use of email facilities to keep trustees up to date on projects and developments.

Trustees are responsible for strategic decisions taking into account the advice of the director and his team. The Trustees along with the director are responsible for making major decisions on donations to partners and overseeing the expenditure of the charity. Our Trustees are unpaid, and details of any Trustee expenses are disclosed in the notes to the accounts.

The Director and his team are responsible for day-to-day operations, making minor changes to grants, controlling expenditure and monitoring the effectiveness of projects. The Director meets regularly with the chairman of the Trustees and other Trustees as appropriate.

REVIEW OF THE PERIOD

Our income for the year January to December 2022 was around £427,000. Most of this income originates from individuals and churches in the United Kingdom. Total resources expended were approximately £434,000.

The main ministry of Karuna Action continues to be the relief of poverty throughout the world and the United Kingdom through the support of our partners who are Christian churches or organisations in Albania, Democratic Republic of the Congo, India, Mongolia, Peru, Russia, Sri Lanka, Uganda and Zambia.

Most fundraising activities have been through the distribution of leaflets and newsletters. A few supporters also initiated small fund-raising events on a voluntary basis and passed on the proceeds to Karuna Action.

The Trustees consider Karuna Action as a going concern and are committed to the charity’s growth and development.

ACHIEVEMENTS AND PERFORMANCE

Financial accounts do not directly measure the impact of the charity upon human lives. The main projects have a direct impact on the lives of thousands of children, adults and families. Praise God for the effect of the following projects on the lives of people:

Education and Youth:

Health Care:

Orphans/Widows:

Accounting year 1[st] January to 31[st] December 2022

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Karuna Action

Emergency Relief and Miscellaneous:

Community Action

Raising Awareness

KARUNA COFFEE and Coffee Shop

The selling of Karuna Coffee has grown in this financial period. The main reasons for selling coffee are;

VOLUNTEER SUPPORT

Karuna Action benefitted from the support of volunteers who undertook various tasks in the governance, administration, and the operation of the coffee shop and bulk coffee distribution.

FUTURE PLANS

Most of our expenditure overseas is committed to existing projects and the plan for 2023 was to maintain those projects. In 2023 we plan to expand the work and scope of Karuna Action by looking for further opportunities and fundraising to meet the expanding needs of our partners and their initiatives.

FUNDS IN DEFICIT

There were no funds with deficits at the end of the financial year.

RELATED CHARITIES

None.

GOVERNMENT GRANTS

There were no government grants in this financial year.

DONATION POLICIES

Donations are made to churches, organisations and individuals where we have a relationship based on trust and mutual respect. Most donations are made as a part of a regular commitment, but they are dependent on donations received into the appropriate restricted fund.

Accounting year 1[st] January to 31[st] December 2022 6 of 14

Karuna Action

INVESTMENT POWERS

The CIO foundation document authorises the trustees to make and hold investments using the general funds of the charity, but no such investments are presently held.

REVIEW AND MANAGEMENT OF RISKS

The Trustees review the major risks to which the charity is exposed. A risk register has been established and is updated periodically. Where appropriate, systems or procedures have been established to mitigate the risks the charity faces.

RESERVES

We have non-binding commitments to many of our operational projects, largely matched by regular commitments from donors, limiting the requirement to keep reserves. Usable reserves (general fund balance, less fixed assets) at the 31[st] December are around £8,550.

RESPONSIBILITY OF THE TRUSTEES

The trustees are responsible for preparing the trustees report and the financial statements in accordance with applicable law and United Kingdom accounting standards.

Charity law requires the trustees to prepare financial statements for each financial period that give a true and fair view of the state of affairs of the CIO and of the surplus or deficit of the CIO for that period. In preparing those financial statements the trustees are required to:

The trustees are also responsible for:

This report was approved by the Trustees and signed on their behalf

Signature:

Date 31[st] March 2023 Name: P Walsh, Chairman and Trustee

Accounting year 1[st] January to 31[st] December 2022

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Karuna Action

INDEPENDENT EXAMINER’S REPORT ON THE ACCOUNTS

I report to the trustees on my examination of the accounts of Karuna Action for the period 1st January 2022 to 31st December 2022.

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

Responsibilities and basis of report

I report in respect of my examination of the Trust’s accounts carried out under section 145 of the 2011 Act and in carrying out my examination, I have followed all the applicable Directions given by the Charity Commission under section 145(5)(b) of the Act.

Independent examiner's statement

The charity’s gross income exceeded £250,000 and I am qualified to undertake the examination by being a qualified Fellow member of the Association of Charity Independent Examiners.

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

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

Signed:

…......................................FCIE

Independent Examiners Ltd Unit 2 The Broadbridge Centre Bosham West Sussex PO18 8NF

Date: 25th May 2023

Accounting year 1[st] January to 31[st] December 2022

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Karuna Action

STATEMENT OF FINANCIAL ACTIVITIES

For the Period 1st January 2022 to 31st December 2022

Notes
Income from:
Donations and legacies
3
Fundraising Activities
3
Charitable Activities
3
Investments
3
Other
3/6
Total
Expenditure on:
Fundraising Expenditure
2
Charitable Activities
2
Total
Net Income/(Expenditure)
Total funds brought forward
Transfers between funds
12
Total funds carried forward		 Unrestricted
Funds
Restricted
Funds
January to
December 2022
January to
December 2021
£
£
£
£
39,009
262,281
301,290
332,426
-
-
-
12
125,859
70
125,929
93,465
-
-
-
-
-
-
-
-
164,868
262,351
427,219
425,903
215
463
678
587
160,574
272,933
433,507
454,299
160,789
273,396
434,185
454,886
4,079
(11,045)
(6,966)
(28,983)
39,351
37,757
77,108
106,091
(12,292)
12,292
-
-
31,138
39,004
70,142
77,108

There were no recognised gains or losses for the accounting period other than those included in the Statement of Financial Activities.

The notes on pages 10 to 14 form part of these financial statements.

Accounting year 1[st] January to 31[st] December 2022

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Karuna Action

BALANCE SHEET

As at 31st December 2022

Notes
Tangible Fixed Assets
8
Current Assets:
Debtors owing within one year
9
Cash at Bank and In Hand
10
Stock in hand
10A
Total Current Assets
Current Liabilities
Creditors due within one year
11
Total Current Liabilities
Net Current Assets
Total Assets less Current Liabilities
The funds of the charity
Unrestricted Funds
12
Restricted Funds
12
Total charity funds		 Unrestricted
funds
Restricted
funds
As at 31st
December
2022
As at 31st
December
2021
£
£
£
£
22,591
-
22,591
31,560
5,091
11,083
16,174
13,733
3,561
27,969
31,530
36,479
5,361
-
5,361
3,959
14,013
39,052
53,065
54,171
5,467
47
5,514
8,623
5,467
47
5,514
8,623
8,546
39,005
47,551
45,548
31,137
39,005
70,142
77,108
31,137
-
31,137
39,350
-
39,005
39,005
37,758
31,137
39,005
70,142
77,108

Approved by the Trustees and signed on their behalf

Signature:

Date: 31[st] March 2023 Name: P Walsh Chairman and Trustee

The notes on pages 10 to 14 form part of these financial statements.

Accounting year 1[st] January to 31[st] December 2022

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Karuna Action

NOTES TO THE FINANCIAL STATEMENTS

Note 1 ACCOUNTING POLICIES

a) Accounting Convention

These accounts have been prepared under the historical cost convention with items recognised at

cost or transaction value unless otherwise stated in the relevant note(s) to these accounts. The accounts have been

prepared in accordance with: Accounting and Reporting by Charities: Statement of Recommended Practice applicable to Charities preparing their accounts in accordance with FRS 102 (effective 1 January 2019) - (Charities SORP (FRS 102)) and the Charities Act 2011.

b) Fund Accounting

The balances in the Unrestricted Funds are available for use at the discretion of the Trustees in the furtherance of the charitable objectives and represent the usable reserves of the charity

Restricted funds are subject to specific conditions imposed by the donors. At the period end, any fund deficits are eliminated by a transfer from unrestricted funds unless the Trustees are of the opinion that such deficits will be eliminated by future committed giving.

Expenditure within restricted funds includes direct project development and core costs associated with project development and support allocated according to income received.

Expendable Endowment Funds are those funds which are given to generate income for specific purposes but if the income is insufficient the income from the expendable fund can be used.

c) Incoming Resources

Recognition of Incoming Resources

These are included in the Statement of Financial Activities (SOFA) when:

Incoming Resources with related expenditure

Where incoming resources have related expenditure (as with fundraising or contract income) the incoming resource and related expenditure are reported gross in the SOFA.

Grants and Donations

Grants and Donations are only included in the SOFA when the charity has unconditional entitlement to the resources. The CIO has not received any government grants during the accounting period.

Tax reclaims on Donations and Gifts

Incoming resources from tax reclaims are included in the SOFA during the same period as the gift to which they relate

Contractual Income and Performance Related Grants

This is only included in the SOFA once the related goods or services has been delivered

Gifts in Kind

Gifts in kind are accounted for at a reasonable estimate of their value to the charity or the amount actually realised. Gifts in kind for sale or distribution are included in the accounts as gifts only when sold or distributed by the charity. Gifts in kind for use by the charity are included in the SOFA as incoming resources when receivable.

Donated Services and Facilities

These are only included in incoming resources (with an equivalent amount in resources expended) where the benefit to the charity is reasonably quantifiable, measurable and material. The value placed on these resources is the estimated value to the charity of the service or facility received.

Volunteer Help

The value of any voluntary help received is not included in the accounts but is described in the trustees' annual report

Investment Income

This is included in the accounts when receivable.

Investment gains and losses

This included any gain or loss on the sale of investments and any gain or loss resulting from revaluing investments to market value at the end of the period.

d) Resources Expended

All expenditure is accounted for on an accruals basis unless indicated otherwise and includes VAT where relevant.

e) Tangible Fixed Assets and Depreciation

Tangible fixed assets are stated at cost less depreciation. Depreciation of tangible fixed assets is calculated to write off the cost over their estimated useful lives as follows:

Accounting year 1[st] January to 31[st] December 2022

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f) Transfers between funds

Where restricted funds have a deficit at the end of the accounting period, transfers are made from unrestricted funds to make good such deficits with the approval of the trustees.

g) Foreign Currencies

Transactions in foreign currencies are translated at rates prevailing at the date of the transaction. Balance sheet items denominated in foreign currencies are translated at the rate of exchange prevailing at the period end.

h) Pension Contributions

The trust participates in a defined contribution pension scheme and the pension charge represents the amount payable by the trust to the fund in respect of the period.

i) Operating Leases

Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged to the Statement of Financial Activities as incurred.

Note 2 - Expenditure by type of fund
Fundraising Expenditure
Charitable Activities:
Directly attributable Costs
Project Expenditure
Coffee cost of Sales
Community Action
Subtotal
Core costs
Personnel expenditure
Premises expenditure
Office expenditure
Governance
Reallocation of Core costs
Subtotal
Other costs
Raising Awareness
Depreciation
TOTAL EXPENDITURE
Note 2A - Analysis of
Expenditure by Activity
Support for
Overseas
Partner Projects
£
Fundraising Expenditure
610
Project Expenditure
168,036
Coffee cost of Sales
-
Core costs
55,594
Other Costs
4,201		 Unrestricted
funds
Restricted
Funds
January to
December 2022
January to
December 2021
£
£
£
£
215
463
678
587
3,369
183,712
187,081
237,641
79,687
-
79,687
52,129
3,366
3,366
829
83,056
187,078
270,134
290,599
114,758
-
114,758
115,184
21,868
-
21,868
17,577
11,197
1,936
13,133
15,929
2,137
-
2,137
3,909
(83,919)
83,919
-
-
66,041
85,855
151,896
152,599
106
-
106
-
11,371
-
11,371
11,101
160,789
273,396
434,185
454,886
Community
Action in
U.K.
Raising
Awareness
of Poverty
January to
December 2022
January to
December 2021
£
£
£
£
68
-
678
587
22,411
-
190,447
237,641
55,781
23,906
79,687
52,129
65,011
31,291
151,896
152,599
4,912
2,364
11,477
11,930
148,183
57,561
434,185
454,886
TOTAL EXPENDITURE
228,441

Accounting year 1[st] January to 31[st] December 2022

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Karuna Action

NOTES TO THE FINANCIAL STATEMENTS (Continued)

Note
Unrestricted
funds
Restricted
funds
3
Income
£
£
Donations and legacies
Donations Received
36,228
253,741
Donations from Charites
50
8,540
Legacies
2,731
-
Subtotal
39,009
262,281
Charitable Activities
Sale of coffee and sales in coffee shop
125,859
70
Subtotal
125,859
70
Fundraising Activities
-
-
Investments (interest on Bank Account)
-
-
Other (Gain on disposal of fixed assets)
-
-
TOTAL INCOME
164,868
262,351
4
Staff Costs and Trustees Remuneration
Gross Salaries
Employers National Insurance
Employees life insurance
Employers Pension Contributions (see note 5)
The average number of employees during the accounting period was:
No employee received remuneration of more than £60,000 per annum
Trustees Remuneration
Trustees’ re-imbursement of expenses
Related Parties
Two related parties to Trustee M Hannington:
1 Son - Gross remuneration for role of CEO Director
2 Daughter in law - Gross remuneration for role of Projects/Partnership Co-ordinator
- Employer pension contributions paid on her behalf
Outstanding balances at reporting date
Key Management Personnel
The key management personnel comprise the Trustees, the Director and the
Projects and Partnerships Co-Ordinator. The Trustees are not remunerated.
The total employee benefits (including employer national insurance and
employer pension contributions) of the key management personnel of the CIO
were:
5
Pension contributions
The trust operates a defined contribution pension scheme, with SMART PENSIONS,
available for all employees. The assets of the fund are held separately from those of
the trust in an independently administered fund. There were no unpaid contributions at
the balance sheet date. (Currently 2 employees are in the scheme).
6
Movement in total funds for the year
This is stated after charging:
Gain on disposal of fixed assets
Loss on disposal of fixed assets
Depreciation of fixed assets
Estimated Independent Examination fee (accrual)
7
Leases
As at 31 December 2022 the charity had annual commitments under non-cancellable
operating leases between one and five years as follows:
Coffee machine, new lease		 Unrestricted
funds
Restricted
funds
£
£
36,228
253,741
50
8,540
2,731
-		 January to
December 2022
January to
December 2021
£
£
289,969
279,239
8,590
18,164
2,731
35,023
39,009
262,281
125,859
70		 301,290
332,426
125,929
93,465
125,859
70
-
-
-
-
-
-		 125,929
93,465
-
12
-
-
-
-
164,868
262,351		 427,219
425,903
119,339
105,473
5,975
5,548
-
46
909
443
126,223
111,510
4.7
4.0
Nil
Nil
Nil
Nil
Nil
Nil
33,474
32,820
30,831
30,288
738
361
Nil
Nil
71,857
69,744
909
443
-
-
113
-
11,258
11,101
1,600
1,500
5,122
5,087

Accounting year 1[st] January to 31[st] December 2022

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Karuna Action

NOTES TO THE FINANCIAL STATEMENTS (Continued)

Unrestricted Restricted
Note funds funds Total Funds
£ £ £
8 Tangible Fixed Assets
Equipment Cost
Balances brought forward at 1st
January 2022 60,368 - 60,368
Additions 2,402 - 2,402
Disposals (2,315) - (2,315)
Balances carried forward at
31st December 2022		 60,455 - 60,455
Accumulated Depreciation
Balances brought forward at 1st
January 2022 (28,808) - (28,808)
Disposals 2,202 - 2,202
Charge for year 6 (11,258) - (11,258)
Balances carried forward at
31st December 2022		 (37,864) - (37,864)
Net Book Value
Balances carried forward at
31st December 2022		 22,591 - 22,591
All fixed assets are used for raising funds and charitable activities
As at 31st
Unrestricted Restricted As at 31st December
funds funds December 2022 2021
£ £ £ £
Debtors owing within one
9 year
Income Tax Recoverable 232 11,083 11,315 10,318
Sundry Debtors owing 325 - 325 301
Pre-payments 4,534 - 4,534 3,114
Total 5,091 11,083 16,174 13,733
10 Cash at Bank and In Hand
Current Account 3,561 27,969 31,530 36,479
Cash - - - -
Total 3,561 27,969 31,530 36,479
10A Stock in hand
Stock of Coffee etc for sale 5,361 - 5,361 3,959
Total 5,361 - 5,361 3,959
11 Creditors due within one year
Sundry Creditors - - - -
Credit cards o/s 3,056 47 3,103 3,086
Accruals 2,411 - 2,411 5,537
Total 5,467 47 5,514 8,623

Accounting year 1[st] January to 31[st] December 2022

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Karuna Action

NOTES TO THE FINANCIAL STATEMENTS (Continued)

12 Movement of
Unrestricted and
Restricted funds
Balances
brought
forward at 1st
January 2022
Total
Incoming
Resources
Total
Resources
Expended
Transfers
between
Funds
As at 31st
December
2022
£
£
£
£
£
General fund
39,350
164,868
(160,789)
(12,292)
31,137
Total Unrestricted Funds
39,350
164,868
(160,789)
(12,292)
31,137
Bethshalom
52
1,506
(1,653)
95
-
Calvary Grace Care
23
5,444
(5,561)
94
-
Child Promotion School
878
44,361
(52,082)
6,993
149
Children’s home General
-
3,285
-
42
Christmas Fund
1,182
8,737
(9,650)
-
269
Clinic General
247
1,690
(1,686)
-
251
Clinic Zambia
598
9,235
(10,437)
603
(0)
Community Action
1,507
20,020
(19,490)
-
2,037
Education General
639
-
Education Jinja
-
10,116
-
7,601
-
114
Education Sponsorship
248
31,676
(34,564)
2,640
(0)
Emergency Relief
-
1,810
-
153
Income Generation
126
1,818
(1,940)
-
5
Jubilee Society Mongolia
29,993
156
(1,545)
-
28,604
Kilibula Primary School
-
-
(1,300)
1,300
-
Living Waters Russia
112
3,443
(3,596)
42
1
New Beginnings Children's home
2,537
100,143
(95,300)
-
7,380
New Generation Delhi
-
4,753
189
-
Paula support
35
6,257
(6,409)
116
(0)
Raising Awareness
220
300
(100)
(420)
-
(3,243)
(10,755)
(7,487)
(1,657)
(4,942)
Total Restricted Funds
37,758
262,351
(273,396)
12,292
39,005
Total Funds
77,108
427,219
(434,185)
(0)
70,142