The trustees present their annual report and financial statements for the year ended 31 December 2023.
The financial statements have been prepared in accordance with the accounting policies set out in note 1 to the financial statements and comply with the charitable company's Memorandum and Articles of Association, the Companies Act 2006 and "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 2019)".
Legal and Charitable Status
Serve Afghanistan (“the charity”) is a company limited by guarantee (No. 4759091) and a registered English charity (No. 1105086), governed by its Memorandum and Articles of Association.
The charitable company's objects are:
a) To relieve poverty, suffering and distress among the sick, the aged, the homeless, the needy and displaced persons in any part of the world.
b) To promote and provide for the advancement of education and training.
The trustees have referred to the Charity Commission’s general guidance on public benefit when reviewing our aims and objectives and planning our future activities. In particular, the trustees consider how planned activities will contribute to the aims and objectives of the charitable company. Serve Afghanistan works with poor and marginalised people in Afghanistan irrespective of their ethnic background, religion, gender or social standing.
The charitable company is dependant on the services of its expatriate staff to carry out its objectives. Most of the expatriates give their time without charge. It is not possible to quantify the value of this benefit to the charitable company. Out of pocket expenses are reimbursed to the staff and are shown under travelling expenses in the financial statements.
During the year, the charitable company carried out various activities in Afghanistan, in pursuit of the aims stated above.
The charitable company’s activities have been categorised according to five types:
HUMANITARIAN RESPONSE PROGRAMME (HRP)
Under these project activities we submitted a proposal for Income Generation Programmes and Health Programmes. These programmes were implemented through 7 projects across three regions, Central Region (Kabul), Eastern Region (Laghman and Nangahar) and Kandahar Region.
Across the three regions, a total of 2,101 people were assisted to start income generation programmes (IGP) such as carpentry, masonry, welding, animal husbandry, poultry, mini car mechanic workshop, electrical workshop, tailoring, painting, sewing, quilt making, car wash, fruit selling, running a petty shop, cobbler, knitting, water hand pump repairing and stonework.
1. Achievement of Central Region Humanitarian Response
621 people were supported for income generation programmes (358 men, 57 disabled men, 155 women 155, 26 disabled women, 4 boys and 21 girls). This project has been implemented with the support from Tearfund Australia and GC Relief. People are getting approx.150-300 AFN per day as a regular income through the IGP.
2. Achievement of Eastern Region Humanitarian response
a) Nangarhar
In the Nangarhar Province, 465 people were supported for IGP. (294 men (16 disabled) 171 women (3 disabled). This project has been implemented with the support from Tear Australia, Tearfund UK and CAM.
b) Laghman
In the Laghman Province, 333 people were supported for IGP (190 men, 8 disabled men, 130 women and 5 disabled women. This project was implemented with the support of Tearfund Australia and CAM.
3. Achievement of Kandahar Region Humanitarian response
In Kandahar Province, 638 beneficiaries were supported. (67 child headed household 67 (63 male and 4 female), 289 people with disability 289 (273 male and 16 female), 57 internally displaced people (41 male and 16 female), 25 women headed household (12 male and 13 female and 200 drug rehabilitated people (200 male). All people opted for livestock rearing and so livestock were provided to them. This project was supported by Tearfund Australia, Tearfund UK, GC Relief and CAM. In addition to the 638 beneficiaries, through the livelihood programme of FiF 44 people were supported in Kandahar.
EDUCATION PROGRAMME
Under the HRP we also implemented the Serve Education Programme in Crisis where in the Minority (Pashai) children were provided preschool class and after school programme. This project is supported by Cedar Fund.
Under this project, School-aged Pashai boys and girls affected by shocks or crises have access to quality, basic education in a safe learning environment in their own mother tongue to be equipped to do well in their studies during the crisis situation. In the preschool programme there are 320 children (220 boys and 100 girls) in 11 classes. In the after-school programme, there are 320 children (100 boys and 220 girls) in 16 classes. Nine training programmes were conducted for 32 incentive teachers (16 male and 16 female) and 4 supervisors (2 male and 2 female), by the field team leader and field supervisor. Monitoring was done by the project coordinator. Distribution of stationery and education materials was done every month. Pashai writing workshops were conducted for 60 people (30 male and 30 female) in Dari Noor and Shewa district.
HEALTH PROGRAMME
Health projects have been implemented in 3 locations in 2023, Alishang in Laghman Province, Panjwayee in Kandahar Province and Kakor in Kabul Province.
SEHAT – Under the SEHAT project, the implementation was done in Alishang and Kandahar. These projects were funded by GC Relief.
Alishang Project – A health clinic was set up. 1 doctor, 1 male nurse % 1 female nurse, 1 Pharmacist cum logistic officer, 1 midwife, 1 vaccinator, 1 lab technician and other support staff were recruited. Purchased lab and general equipment, surgical items, medicines, iron folic acid etc. Furniture such as delivery bed, newborn bed, inverter & battery, water filter, refrigerator, safe for petty cash etc. were purchased. Vaccines were procured and administered. 3,199 children were immunized for polio according to the government rules. 19,563 people received treatment from the health clinic. 1,324 women are living a healthy life without any maternal issues and 2,436 of the targeted children live a healthy life due to the access to treatment and health awareness programme in the community. 334 children received IMNCI (Integrated Management of Neonatal and Childhood Illness) services. 521 pregnant and lactating mothers have normal Body Mass Index (BMI).
Panjawayee Project – A health clinic was set up. 1 doctor, 1 male nurse, 1 female nurse, 1 Pharmacist cum logistic officer, 1 midwife, 1 vaccinator, 1 lab technician and other support staff were recruited. Purchase of lab and general equipment, surgical items, medicines, iron folic acid etc. Furniture such as delivery bed, newborn bed, inverter & battery, water filter, refrigerator, safe for petty cash etc were purchased. 4,100 people got treatment from health clinic. 1220 women are living a health life without any maternal issues and 1,434 under 5 children live a healthy life due to the access to treatment and health awareness programme in the community. In Panjwayee, 305 received IMNCI and 204 pregnant women have normal BMI.
Kakor MCH project – This project is supported by Trust Bridge. A health clinic was set up by the project. A doctor and health professional were recruited to run the clinic. 7 deliveries were conducted by the Kakor clinic midwife. 1,004 women had four or more health check-ups during their pregnancy period. About 387 mothers received a post-partum visit from an appropriately trained health worker. 571 babies received appropriate newborn care. About 12,971 people have better health through the treatment at Kakor health clinic. 987 women were trained about safe deliveries and danger signs during delivery among women aged 18 to 50 years. 314 pregnant women received at least two TT vaccinations. 621 pregnant women consumed iron supplements.1,333 mothers/family can name at least three essential newborn care practices. 801 Children aged 0 to 2 years were fully immunized. 1,479 children 0-5 months were exclusively breastfed. 383 children given appropriate complementary feeding after 6 months. 3,611 lactating mothers were treated.
MAINSTREAMING PEOPLE WITH DISABILITIES
This project aims to empower and equip institutions and communities towards the integration of people with disability (mainly those with visual and hearing impairments) into mainstream life. Serve works with visually impaired (VI, hearing impaired (HI) and low vision (LV) children. The particular focus has become inclusive education. For sustainability, Serve Afghanistan works with Model Schools where the school and community take responsibility for the inclusion of disabled children in the education system and Serve phases out after 3 years. In 2023, 881 children with disabilities such were supported to continue their education in early intervention programme, preschool Programme, Inclusive Education Programme in government school and University. Three Projects were implemented in Eastern Region, Central Region and Kandahar Region.
Serve's Eastern Region Disability Project (ERDP)
The project focuses mainly on the hearing and visually impaired children (HI and VI) and seeks to influence the wider community in Nangarhar and Laghman Provinces regarding attitudes to disabled people. The project works to improve the quality of life for people with disabilities by promoting rehabilitation, equal opportunities, integration and protection of the rights of persons with disability, leading to their full participation in educational, economic, social, political and cultural activities in their communities. This project is supported by KNH and Tearfund UK.
Achievements in 2023 included:
A total of 301 CwDs attended home-based classes, re-school programme and inclusive education classes this year. 44 HI students (20 female and 24 male) are in segregated classes. The HI students were taught in separate classes in school. 94 HI (61 male and 33 female) attended preparation classes for entry to inclusive classes. 18 HI (13 male, 5 female) students were in inclusive classes in the Government schools. 30 VI (21 male, and 9 female) students attended schools in inclusive classes. 40 VI (22 male and 18 female) students attended PSP. 25 (11 male and 14 female) attended home based education programmes. 50 physically impaired (PI) (35 male and 15 female) students attended inclusive education programmes in government schools.
16 incentive teachers were hired for supporting kindergarden and grades 1 and 2. 3 interpreters were hired for 4 Inclusive classes in the government schools this year due to ban or sanction of the girls to study above grade six.
This year the project distributed class materials and stationery to 156 HI and 95 VI students. Braille papers, sport materials for VI, whiteboard, trunk, farsh, water coolers, note books, pen, pencil, colour pencil, marker, eraser, slate, stylus, stylus frame, braille board, braille sixer were purchased for HI and VI students and were distributed to them.
60 government teachers were trained as planned. However, the PED of Laghman did not let us implement our training for 20 government teachers in Mastora high School because the protocol was not signed by the government.
4 IEAC members were trained.
100 (50 male and 50 female) hearing students received one day training in 2 government schools. They learned Afghan Sign Language (AFSL) so that they can communicate with HI students.
Central Region Disability Project (CRDP)
The project aims to strengthen and empower people with disabilities towards full participation in every aspect of life – utilising rehabilitation, awareness, advocacy, education, as well as social support. This project is support by KNH, Tearfund UK and for Braille materials by Linda Norgrove Trust.
Achievements in 2023 included:
420 CwDs were supported with educational materials so that they can continue their education without putting pressure on their poverty-stricken parents. Young VI children were also provided preschool provision to prepare them for higher education in MoE schools. Total of CWDs supported are 113 VI (72 male, 41 female), 85 LV (50 male, 35 female), 135 HI (75 male, 60 female), 28 PI (18 male, 10 female), 20 intellectually impaired (15 male, 5 female), 23 male university students and home visit support for 16 female university students who cannot attend university anymore. Braille books were printed as planned and distributed to the students.
The project was able to work with 18,500 school students by conducting awareness programmes in the morning assembly on issues of disability, how to communicate with them and how to create a conducive environment.
68 Ministry of Education schools are adopting inclusive education systems and functioning effectively due the project support over the years.
The project master trainer could train 77 male teachers from 3 government schools.
35 advocacy meetings conducted by project staff with the different Ministry of Education sectors.
3. Kandahar Disability Project (KDP)
The project aims to provide inclusive education of visually and hearing-impaired children in government schools. This project is supported by Cedar Fund.
Achievements in 2023 included:
24 HI and 26 VI CwDs are in preschool program. 93 HI and 7 VI CwDs are in inclusive education classes in government schools.
Braille books provided to VI Students and other educational materials including desks, talking watches, and Mp3s according to their needs. Provided braille A4 papers at different times during the year.
Purchased stationary including school bags, schoolbooks, notebooks, and other education materials which were provided to 117 HI and 33 VI students at different times according to their needs.
2 LV and 2 VI were referred to the eye hospital for treatment.
EMERGENCY RELIEF PROGRAMMES
During 2023, the charity undertook emergency relief programmes in different location of the county in response to the effects of the conflict and crisis situation in Afghanistan. A total of three relief operations were carried out with a total of 2,605 families reached though the relief operation.
Under the support of GC Relief, emergency relief was conducted for 2,000 families in the following places-
Nangarhar Province, Pacheer Agam district on 27.03.2023 for 500 families.
Kandahar Province, Panjwayee district on 21.03.2023 for 500 families.
Laghman Province, Alingar district on 22.05.2023 for 500 families.
Parwan Province, Charikar City on 19.04.23 for 500 families.
The relief package for each household consisted of:
Food package- 24.5kg of rice, 50kg of wheat, 5 litres of cooking oil, 7kg of red beans and 2kg of salt.
WASH kit- 4 pieces of hand washing soap, 5 pieces of laundry soap, 2 tubes of toothpaste, 8 toothbrushes and 8 washable face masks.
Winterized item- Two blankets
Kandahar Relief - Under the support of FiF, 140 poor and vulnerable families were provided emergency relief in Arghistan district in Kandahar Province. The distribution took place on 22nd February 2023.
The relief package for each household consisted of:
Food package- 25kg of rice, 50kg of wheat, 5 litres of cooking oil, 7kg of red beans and 2kg of salt.
Hygiene kit- 4 pieces of hand washing soap, 5 pieces of laundry soap, 2 tubes of toothpaste, 8 toothbrushes and 8 washable face masks.
Winterized item- Two blankets to each family.
Herat Earthquake Relief - With the support from Tearfund Australia, SRG, KNH and Cedar fund, earthquake relief was conducted in Zindajan district of Herat Province. The relief covered 465 families. The relief package consisted of $167 (AFN 12,500) per household.
The financial statements for the year are set out in pages 16 to 42. The Statement of Financial Activities on pages 16 and 17 reflects net outgoing resources of $233,385 (2022: net incoming resources $47,084).
The trustees review the charitable company’s reserves policy annually and regularly assess the adequacy of reserves against this policy.
The charitable company’s policy aims to achieve a balance between its operating working capital and a level of reserves to be able to cope with unexpected events. Such events may include crisis response, evacuation and repatriation of expatriate and local staff, unexpected gaps in donor funding, local disaster response or sudden loss of assets or premises. Due to the highly unpredictable nature of the operating environment in Afghanistan and a degree of uncertainty over income flows, it has been the charity's policy to maintain unrestricted funds (excluding asset funds), which have arisen from past operating results, of 6 months of unrestricted operating expenditure plus a fixed amount necessary to close the organisation in the event of an emergency.
At 31 December 2023 unrestricted funds amounted to $454,773 (2022: $490,500), (of which designated funds amounted to $106,027 (2022: $106,027)) and restricted funds were $163,299 (2022: $360,957), totalling $618,072 (2022: $851,457). This is slightly below the target level of the Reserve Fund.
Restricted funds are subject to specific conditions imposed by donors.
The charity receives the majority of its funding in the form of grants from international relief and development charities. A breakdown of expenditure according to the categories of activity shown above is shown in the Statement of Financial Activities and accompanying notes.
The trustees have overall responsibility for the charitable company’s system of internal control. Such a system can provide only reasonable and not absolute assurance against errors or frauds. There is a clear delegation of the trustees’ authority through the Executive Director to the rest of the organisation.
The charitable company operates an annual planning and budgeting system with an annual budget approved by the Board of trustees. A financial reporting system compares results with the budget on a monthly basis.
A detailed register of the risks faced by the charitable company is maintained. This register identifies the major strategic and operational risks faced and how they are being managed. This register is reviewed annually by the trustees to reassess these risks and introduce procedures to address them as required.
The trustees are satisfied that systems are in place to monitor, manage and mitigate the charitable company's exposure to major risks. They consider that maintaining the charitable company's general reserves at the levels stated above and reviewing progress on addressing the charitable company's risk environment through the risk register will provide the charitable company with adequate risk assurance and sufficient resources in the event of adverse conditions. They also recognise that the nature of some of the charitable company's work requires active acceptance and management of some risks when undertaking activities to achieve its objectives.
Financial risk
The charitable company does not use complex financial instruments; it manages its activities using cash and cash equivalents and various items that arise directly from its operations.
The existence of these financial instruments exposes the charitable company to a number of financial risks which are described in more detail below. The main risks arising from the Trust's financial instruments are liquidity risk and cash flow interest rate risk.
Liquidity risk - the charitable company manages its cash and cash equivalent resources, including sufficient working capital, so that all its operating needs are met without the need for short-term borrowing.
Interest rate risk - the charitable company earns interest on cash and cash equivalent deposits. With recent increases in interest rates, the trustees are exploring ways to improve income from these deposits, provided it does not jeopardise the liquidity or security of the trust's assets.
Credit risk – this arises from the possibility that amounts owed to the charitable company will not be repaid. The charitable company does not undertake credit activities so it is only exposed to credit risk as it arises from normal business. Credit risk is managed through the use of approved banks and investment companies and the prompt collection of amounts due.
Future Plans
In 2022 Serve prepared a strategic plan for the period 2024 - 2026. Suggestions to strengthen the projects which are implemented and new geographical areas and sectors were identified. The areas of funding and personnel recruitment were also discussed as an agenda given the current situation in Afghanistan. The on-going climate of insecurity and unpredictability has of course, always to be taken into account.
Serve Afghanistan is a company limited by guarantee and a charity registered in England and Wales. The charitable company operates from Taimani, Kabul, Afghanistan.
The trustees, who are also the directors for the purpose of company law, and who served during the year and up to the date of signature of the financial statements were:
Nominations for appointment of trustees come from within the trustee board. Appointments are approved by a majority of the other trustees. Usually, those appointed will have connections to the organisation and have had exposure to the charity’s work in Afghanistan.
There is an informal induction and training process for trustees.
The trustees (listed above) are responsible for the overall direction of the charity. Responsibility for the day to day management of the Charity’s central administration is delegated to the Executive Director who is supported by two Directors and Finance Manager. During the year, the senior members of staff were the Executive Director and the Senior Management Team:
Kennedy Dhanabalan: Executive Director
Mohammad Saber Alimi: Director (Projects)
Ghulam Mujtaba Khan: Director (Operations)
Bakht Mohammad Momand: Manager (Finance)
Masood Mahzoon: Manager (Projects)
Abdul Hasib Abid: Manager (HR)
Remuneration of key management personnel is discussed at board meetings. Consideration is made of the pay required for expatriate staff to work in Afghanistan.
The trustees' report was approved by the Board of Trustees.
The trustees, who are also the directors of Serve Afghanistan for the purpose of company law, are responsible for preparing the Trustees' Report and the accounts in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
Company Law requires the trustees to prepare accounts for each financial year which give a true and fair view of the state of affairs of the charitable company and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that year.
In preparing these accounts, the trustees are required to:
- select suitable accounting policies and then apply them consistently;
- observe the methods and principles in the Charities SORP;
- make judgements and estimates that are reasonable and prudent; and
- prepare the accounts on the going concern basis unless it is inappropriate to presume that the charitable company will continue in operation.
The trustees are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the charitable company and enable them to ensure that the accounts comply with the Companies Act 2006. They 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.
Opinion
We have audited the financial statements of Serve Afghanistan (the ‘charitable company’) for the year ended 31 December 2023 which comprise the statement of financial activities, the balance sheet, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the financial statements:
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In auditing the financial statements, we have concluded that the trustees' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charitable company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The trustees are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the trustees' report for the financial year for which the financial statements are prepared, which includes the directors' report prepared for the purposes of company law, is consistent with the financial statements; and
the directors' report included within the trustees' report has been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the directors' report included within the trustees' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, 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
we have not received all the information and explanations we require for our audit.
the trustees were not entitled to prepare the financial statements in accordance with the companies regime and take advantage of the small companies' exemptions in preparing the trustees' report and from the requirement to prepare a strategic report.
As explained more fully in the statement of trustees' responsibilities, the trustees, who are also the directors of the charitable company for the purpose of company law, are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the trustees are responsible for assessing the charitable company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the charity and the sector in which it operates, we identified the principal risks of non-compliance with laws and regulations related to the acts by the charity, which were contrary to applicable laws and regulations including fraud, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to inflated revenue and the charity's net income for the year.
Audit procedures performed included: review of the financial statement disclosures to underlying supporting documentation, review of correspondence with and reports to the regulators, including correspondence with the Charity Commission, review of correspondence with legal advisors, enquiries of management and review of internal audit reports in so far as they related to the financial statements, and in testing of journals and evaluating whether there was evidence of bias by the trustees that represented a risk of material misstatement due to fraud.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with section 391 of the Companies Act 2014. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
designated
designated
The statement of financial activities includes all gains and losses recognised in the year.
All income and expenditure derive from continuing activities.
The charity is a company limited by guarantee, incorporated in England and Wales and has no share capital. The liability of each member in the event of winding-up is limited to £5. At 31 December 2023, there were 7 members (2022: 6 members).
The financial statements have been prepared in accordance with the charitable company's Memorandum and Articles of Association, the Companies Act 2006 and "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 2019)". The charitable company is a Public Benefit Entity as defined by FRS 102.
The accounts are prepared in US Dollars ($). Monetary amounts in these accounts are rounded to the nearest $.
The currency of the primary economic environment in which the organisation operates (its functional currency) is Afghanistan Afghani (AFN).
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
At the time of approving the financial statements, the trustees have a reasonable expectation that the charitable company has adequate resources to continue in operational existence for a period of at least 12 months from the date of the approval of these accounts.
In reaching that conclusion the trustees are confident that the charity has sufficient liquidity and unrestricted reserves to meet its debts as they fall due over that period. They have also considered the possibility of having to cease operations in Afghanistan and are confident that they have sufficient reserves for an orderly reduction in operations. The charity has a history of having Ministry of Economy approval to operate in Afghanistan and despite the political changes they have continued to receive approval from the Ministry of Public Health until 30 June 2026. The trustees also continue to have support from their funding partners, with funds of $2.25million already being pledged for 2025 and 2026. The trustees are confident that the charity can continue providing support through their work in community development and empowering of people with disabilities.
Unrestricted funds are available for use at the discretion of the trustees in furtherance of their charitable objectives unless the funds have been designated for other purposes.
Designated funds comprise funds which have been set aside at the discretion of the trustees for specific purposes. The purposes and uses of the designated funds are set out in the notes to the financial statements.
Restricted funds are subject to specific conditions by donors as to how they may be used. The purposes and uses of the restricted funds are set out in the notes to the financial statements.
Cash donations are recognised on receipt. Other grants and donations are recognised once the charitable company has been notified of the grant or donation, unless performance conditions require deferral of the amount. Income tax recoverable in relation to donations received under Gift Aid or deeds of covenant is recognised at the time of the donation.
The charity is dependent on the services of its expatriate staff to carry out its objectives. Most of the expatriates give their time without charge and it is not possible to quantify the value of this benefit to the charity. Out-of-pocket expenses are reimbursed to the staff and are shown under travelling expenses in the financial statements.
Trading income represents income from evaluation services provided to other charities and the printing of Braille material.
Expenditure is recognised once there is a legal or constructive obligation to make a payment to a third party, it is probable that settlement will be required and the amount of the obligation can be measured reliably.
Irrecoverable VAT is charged as a cost against the activity for which the expenditure was incurred.
Regional office support costs have been allocated to activities based upon annual budgeted expenditure and other support costs have been allocated to activities based upon actual expenditure.
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the statement of financial activities.
At each reporting end date, the charitable company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in income/(expenditure) for the year, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately, unless the relevant asset is carried in at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
Ethical investments are social investments made in support of development projects, which benefit disadvantaged and marginalised individuals.
The charity has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised when the charitable company becomes party to the contractual provisions of the instrument.
Financial assets are offset, with the net amounts presented in the accounts when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Financial assets, other than those held at fair value through income and expenditure, are assessed for indicators of impairment at each reporting date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in net income/(expenditure) for the year.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in net income/(expenditure) for the year.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the charitable company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Basic financial liabilities, including creditors and bank loans are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of operations from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the charitable company’s contractual obligations expire or are discharged or cancelled.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the charity is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Transactions in currencies other than US Dollars are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation are included in net income/(expenditure) for the period.
Employee savings fund
All Serve employees become part of the Serve savings scheme after working for one year. Under this scheme an amount is deducted monthly for each employee according to their grade on the Serve salary scale and the same amount is contributed by Serve towards a fund that is available to the employee for certain expenses. The Employee Savings Fund is kept in a separate account to the rest of Serve's funds. The fund is included in creditors.
In the application of the charitable company’s accounting policies, the trustees are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The trustees do not consider there to be any critical accounting judgements or estimates.
Other donations are donations from individuals.
All investment income is unrestricted.
Disability
Community Development
Relief Programmes
Disability
Community Development
Relief Programmes
Activities and materials
Staff training
Incentive workers
Travel expenses
Office supplies
Communications
Premises
Bank charges
Legal and professional fees
Disaster relief
Description of charitable activities:
Disability
To mainstream people with disabilities, Serve, in partnership with others, aims to empower and equip institutions and communities towards the integration of people with disability (mainly blind, deaf, mentally challenged and physically disabled) into mainstream life.
Community Development
Activities facilitate processes within local communities leading to their ability to develop and access local, provincial and national resources and to strengthen livelihood opportunities of vulnerable groups in the concentration areas where Serve is active.
Relief Programmes
The charity undertakes emergency relief programmes in different locations of the country in response to the effects of the conflict and crisis situation in Afghanistan. A total of 6 (2022: 10) relief operations were carried out, which helped 2,605 displaced families.
Community Development
Relief Programmes
Disability
Community Development
Relief Programmes
Other support costs
Governance costs includes payments to the auditors of $32,112 (2022- $28,920) for audit fees.
None of the trustees (or any persons connected with them) received any remuneration during the year, but 7 (2022- 4) of them were reimbursed or had expenditure paid on their behalf to third parties totalling $16,812 for travelling expenses (2022- $3,998).
The average monthly number of employees during the year was:
No remuneration was paid to any employee in excess of $76,395.
The charity is exempt from tax on income and gains falling within section 505 of the Taxes Act 1988 or section 252 of the Taxation of Chargeable Gains Act 1992 to the extent that these are applied to its charitable objects.
Eastern Region Humanitarian Response- Nangarhar Project (ERHR-N) - to empower vulnerable families in the target communities in the Eastern Region (Nangarhar) and to improve their livelihood through improved adult literacy and development of animal husbandry.
Serve's Eastern Region Disability Project (ERDP) (formerly Serve's Hearing-Impaired Project (SHIP)) - to empower Afghan communities towards the integration of people with disabilities in all aspects of life.
Serve's Central Region Disability Project (CRDP) (formerly Enabling and Mobilizing Afghans with Disabilities Project (EMAD)) - to empower Afghan communities towards the integration of people with disabilities in all aspects of life.
Central Region Humanitarian Response Project (CRHR) - to bring sustainable livelihood improvement for vulnerable people of Guldara district of Afghanistan.
Kandahar Community Development Project (KRHR) - to bring sustainable livelihood improvement for vulnerable people of Kandahar in Afghanistan.
Kandahar Disability Programme (KDP) - This programme works to provide inclusive education for blind and deaf children in government schools. The programme aims to support children suffering these disabilities throughout their school lives and ensure they do not have any barriers or discrimination to their education.
Eastern Region Humanitarian Response- Laghman Project (ERHR-L) - to empower vulnerable families in the target communities in the Eastern Region (Laghman)and to improve their livelihood through improved adult literacy and development of animal husbandry.
Eastern Region Community Disability Programme (ERCDP) - This programme works to provide inclusive education for blind and deaf children in government schools. The programme aims to support children suffering these disabilities throughout their school lives and ensure they do not have any barriers or discrimination to their education.
Alishang Health Clinic (AHC) -This project will provide and assist the people to access medical care and increase their knowledge on preventive and health care as the sanctions have affected them to access health care facilities. The project will specifically focus on mother and child health care and nutrition.
Panjwayee Health Clinic (PHC) - This project will provide and assist the people to access medical care and increase their knowledge on preventive and health care as the sanctions have affected them to access health care facilities. The project will specifically focus on mother and child health care and nutrition.
Kakor Health Clinic (KHC) - This project will provide and assist the people to access medical care and increase their knowledge on preventive and health care as the sanctions have affected them to access health care facilities. The project will specifically focus on mother and child health care and nutrition.
LGM, Parwan, KDH, NGR Relief for poor 2000 families (GCR) - Total of 2000 families benefitted from the project. 500 internally displace people (IDP) families in Jalalabad City and Pacheer Agam district in Nangarhar Province on 28th March 2023, 500 IDP families in Mehtarlam City and Alingar district in Laghman Province on 23rd May 2023, 500 IDP families in Kandahar and Panjwayee district in Kandahar Province on 21st March 2023 and 500 families in Charikar District in Parwan Province on 19th April 2023 received relief materials.
Kandahar IDP 140 families (FiF) - Total of 140 families benefitted. The distribution was done on 13th February 2023 at Arghasan District in Kandahar province.
Kandahar IGP 44 families (FiF) - Total of 44 families benefitted. The distribution was done on 25th December 2023 at A Panjwayee District in Kandahar province.
Heart Earthquake Relief 465 families (Cedar fund, KNH, SRG, TF Aus) - 465 families affected by the earthquake from Herat Province were provided 12,500 Afghani each as a multi-purpose cash assistance (MPCA) on 21st October 2023. These beneficiaries’ houses were fully or partially damaged by the earthquake.
Assets Fund - represents the net book value of the assets acquired by the restricted funds used for restricted purposes.
Transfers
$147,769 (2022: $191,837) transfer from restricted funds relates to the allocation of overhead costs in the year.
$nil (2022: $40,480) transferred from restricted funds relates to the allocation of security costs in the year.
$45,753 (2022: $26,623) transferred from restricted funds relates to the reallocation of funds to other projects.
Large Equipment Replacement Fund - This fund represents money set aside by the Directors for future acquisition of vehicles and other large equipment for the general purposes of the charity.
Unrestricted funds
Designated funds
Restricted funds
Unrestricted funds
Designated funds
Restricted funds
The remuneration of key management personnel, is as follows.
There were no further related party transactions in the year (2022: none).
The charitable company had no debt during the year.