Elrdhma Charity Trust (fonnerly Charity Islamic Trust Elrahma) Annual report and financial statements for the year ended 31 December 2020 Charlty Reg15traflon Number 1026927 Annual report and financial statements for the year ended 31 December 2020 Page Truste&s, Officers and Professional AdVis￿3................................................................ Report of the Trustees fortheyear endal 31 December 2020................................. Independent auditors, report to the of Elrahma Cbarity Trust.................. Statement of finaDcial activities (including income and expenditure account).......... Balance sheet as at 31 December 2020....................................................................... 10 Statement of Cash Flows..............................................................................................ii Notes to the accounts.............................................................................................. 12-21 Mr. Abubaker Megerisi (Chair￿) Mr. Patiick D Daniels (d￿ease￿I z7 February 2020) Mr. Mohamed Megerisi Mr. Ali Abubaker Megwisi Audltor8 Ha)smaeint)Te Il io Queen Street Pla¢e IDndon EC4R National Westm1￿er Bank P ccadilly & New Bond Street IA) Bra[￿1 63415 Piccadilly I￿ndoll W￿0 So]idtonT 64 North Row IA)ndon W￿7DA JieWred Suite 201 Stanmore Place Howard Road HA7 Jwr Elrahma Charity Trust Report ofthe Trustees for the year ended 31 December 2020 The TrLLStees present their annual rewrt and the audited financial ststements for the year ended 31 DeCern￿ 2020. The a￿oUnts have been pretArvJ in accordance with the accounting po]icies set out in note i to the accounts and comply with the Ckjaritys Th]st De& the Charities Act 2011 and the Statement of Reconunended Prartice for Clwities (SORP 20￿) (Seeond Editio￿ effective i January 2019). The Objects for which Flrahma ClwityTh]stis establis1￿ are.the re]ief of pO￿ty and advancement of education and religion in the Mwlim Con]munity. to a&stst the p(x)r and orphans of the Islamic religion. to erect or help to er￿l 5ch(M)M charitable institutioThs. m(W> orphanages and nurseri&s for the Ithic Community in the United Ku¥dorn and abroad Priority is given to such charitable The Charity proNides donatio￿5 and grants to individuaL8 and other charitable organisations In accordance with its object& ApplicatioDS for educational grants are receiv￿ by the Charity and reviewed by the tnLStees. Awards are made to applicartts who meet the speafie Lyiteria. In the )Ear the charity has fo]lowed policies of prOVidll￿ financial ￿lstanCe to only those organisations in the United Thgdom and abroad whose aitns and obJ￿tiveS were similar to its own and were aelivety engaged in achiebing these obj￿tiveS The clwity proludes fiDaniial assistance to only those organisations with E(•na.fide registered charitable siatus. The cljaritable institutions seelung finanaal assist￿ are required to submit in support of their applicatio￿ their constitution in the forni of a ThLSt Deed Memorandum and Articles of A4¥*llation of a limited Company with cftjaritable objectives and registered as such as a clwity. Fllwiaal ￿lStance18rallts are awarded onty to full lime students studying ID an internationa]ly reeogni5ed universityand their app]ication must be accomtkvkied byreferences and recommendations from fornier and present educational Institutio￿ Applications from only those students are considered who have achieved ¢xceptioDallygocKJ results in theirprevious academic qua]ifi¢atioDsand are exMed to produee gwd results in their future studies. The followin8 properties are held as investments: 25 and 26 IA)vat IA)ndon EC& is let to 14)ndon It￿1t￿e of kn and Banking. li to 35 Si. John's Street, I￿ndoll ECI, was let to WPP Gro￿ limited until Decem￿ 2018 when the propeTty t*came vacant. In October 2019 an tndewtht valuation of the freehold inv&8tinent properties was vndertaken by Ms Emma Bailey MIU(3 of cUshm￿ & Wakefield IJTr which resulted in a valuation of the properties as at 31 December 2018 at £29,450.000. TheTrustees bave reviewed the Fosition at 31 December 2020 and are of the opinion that, given the current cbanges to the one propetyand amounts being Spent to refitrbish it. and the other being Id on the same tern]s as the previous year, that there ha8 been no njaterial movetttent in the ￿lUatiO In line with its overall objectives the CharityR)as for sy)rne years owned prwrties wbich it provides to other cl]arities for them to operate as places of worship. This aspect of its activities the properties concerned have been Separatelyiderktlfi￿ as Prc8rame Related Investmerjts in the ae¢ount& Elrahma Charity Trust Report ofthe Trustees for the year ended 31 December 2020 (continued) DetsiL8 of the main actiNTrties undertaken to finther the charl￿S purwses for the public benefit are described alx)ve under grant.makDg and belowunderAchievements and Perforn]ance. The ThLStees confinn that they have referr￿ to the guidanee eontained in the ch￿ltycoMMi￿0n's general guidanee on public benefit when reviewing theTrust's ainL8 and objecti￿, in p]anning its future aetiVAties and in setting its grant tM)Iicy. The audited accounts for the year ended 31 D￿ni￿r 2020 ha￿ been prepar&l and accompany this reporL The Tr￿SteeS are pleased and Satisfi￿ that the eharityhas aeR)ieTrtd its objectivesin accordance with its conslilutico aThdhoFefi￿y￿ll continue to its fimds to achieve the similar obJ￿tiV￿g in the futUT& The totsl numt*r of donations n)2de to elwitable organisations and overseas institutiOnB was i and the total value of this donation was £23&195 (2019: £450,975). The lotal number of students who reeeived ￿uCatiOnal grants was ll3 and the total amount of grants awarded to these students was £145.200 (2019: £48.058).Thefinancialrelief tO[￿r fami]ies amount￿ to £44,637 (2019: £53.556). The organisatioAL8 ￿￿efiting from the ckwitable donations in the United Thgdom and abToad were involved in runJ]ing sehooLs, mosques, adult ￿UCatiOll c]asses orphanages nurseri&8, srA￿Tsb1p of orpl]ans. students p(￿ fami]ies and provision of humaDitarian aid The charity does not fund raise with memivs of the public and ace0rdi￿ there have been no complaints rtteived ryth8 fimd raiw¥ in the year (2019: Nonek The income for the year ended 31 D￿ernber 2020 Wds £947,747 {2019: £1,004.660). tnvestment income of £694&7 (2019: £67&011) was supplementgj b) income ￿1Ved in respect of a Property sold in 2016 of £253.200. The cost of cE]aritable acttvitie4 exduding g()Ven￿Ce costs. was £800￿40 (2019: £1.286,278). The Governance costs arnounted io £4.238 (2019: £8.610). The operating incoD]e for this periixl was £72,969 (2019 - operating loss £290.228) and at the year end the aggregate value of the funds w28 £55,270,636 (2019: £5&1￿7,667). CoDsiduation has b￿￿ given to the impaet on cash flow and the Trustees are satisfied Ihat the ChaTiW5 cash reserves are more than adequate to offset any negative impact arising from the eri8i& The EK)weTS of the ThLStee4 incI￿]ng the ￿)￿r$ of inv8stmenL are set out in the Trust D*L These include investment in freehold and leasehold prO￿tieS (more than 60 years) and in approftl investment fund& The Trustees seek to invest in properties in So￿hl after k￿atiOnS ￿le￿ they consider offer a satisfaclory return EK)th in terms of income and prosE￿tive capitsl appreciation in the long tern without assuri￿ an undue degree of risk The Incon￿ is used to ll￿ke el)aritsble donations and to meet the cost ofmaintaining the charity. The reqUirem￿t that a property offers prospects of capital appreciation is intelld￿ to ensure that the ctwity maintains sufficient capitsL in the forni of iDcome- producing property, to be able to meet its commitments in the fillur& The trW$t￿ are satisfied with the [￿rfOrmaD￿ of Ihe investM￿ts giv￿ the level of (xcupancy in the EIrahn￿ Charity Trust Report of the Trustees for the year ended 31 December 2020 (contlnued) The a&sets that make up the charitys hmds are unrestricted and accor(￿nglY they are also available as the general reserve& tn addition to careful planning of the cash flow. so as to meet both grant commitments payable in the year and the administrdtion expenditure from the agreed budgec the charity maintsins a osh reserve to cover anticipat￿ grdnt and other firture conunitments in the Tent and forthcoming financial year& refurbishment of one of its properti&% Once the amount needed to fund thi8 is dear to the ThLsiees it is their plan to invest anyfurthersurplus in another investment proFety. Key perfornwice Indi￿torS Given the straightforward nature of the aettvities of the ckwity. trustxs are of the OPiDion that analysis usingKPIs is notnecessaryforanunderstandiDgof the developmenL Ferforn)ance or position of the bwine The TnLStees consider the major iisks to which the organisation May￿ exEKwI at their me*tings and coL8ider the likeli￿ and impact of all &gDificant risks. All significant iisk% together with current mitigation action& are ￿eWed re￿thty throughout the year and the Trustees are satisfied that systems have been develoFel and are in place to mitigate identified risks to an acceptable level. The primapal Tisks and uncertainties ldenlifi￿bY the Ch￿ityare as follows: Risk identified Shortfall on receipt of protwtyincom The Trustees put emphasis on the quality of tenant covenant& In addition the cbarity has st]bstantial reserves which would provkde cover for aetivitie8 should there be a shortfall. The I￿￿ee￿ D￿IntaIn a dose inw)Ivement in the chariws day to day activities and donatioTh8. In addition procedures and controls are aCti￿tie& Impart of Covid Criss Approrffiate action hast*en taken to ensure the proteetion of all employees. The Ixisis is considered to ha￿ a limited aff￿t on the eEJaritys activitie& The Tr￿￿teeS are keeping tbe impaet of the Cri￿ under review to the extent that it impacts on its investsnent propety. Reduction in applications r￿ed for charitsble hdp. Amarketing plan for the Ckjarityis under consideratso Elrahma Charity Trust Report of the Trustees for the year ended 31 December 2020 (contfinued) The tnLStees will continue to tske steps to m&xirnise income from investments by seeking higher level of occupancy on its freehold investment propertie& In addition fi]rther investrnents in investment propety are planned. Following the vacation of the St John Street property the Trustees are pursuing a p]an of refurbishment of this investment with a view to ma>illllsing the long terni return thereon. The trttstees proTride properties for the use of other ch￿iti￿. Should the opportunity further prcyamme re]ated investments be made. The Trustees are mindful of the potential ne&1 for clwitable help ￿lSiDg from the impact of the CoronaVin￿ outbreak andMll provide help slKnJld a suitable need be identifie E]rahma Charity TnLSt Wds registered as a charity with the Ch￿lty Commiwoners (Rwstration numt*r 1026927) under a ThLSt Deed executed on 27 Wtember 1993. TheTrustees, all of whom held office duriDg ended ￿ Decem￿ 2020 and up to date of this Mr Omar Megerisi Mr Hazem Megerisi Mr Patrick D Daniels {D￿eased ￿ February 2020) Mr. Mohamed Megerisi Mr. AliAbubaker Megeri8i Mr. Ahmed Tarek Megerisi Thefirstfive tnlstees are the fOUnd￿memt*rs0f t￿Th]stsInce itsdthtion on 27Wtember 1993. apwinttnent of furt￿ trwstees. In selecthg furtkn persons to be app)inted as trustees, the trLLStees are required to take into alzount thebenefits of app)iTrti￿ a person who is able byvirtue ofhis or her personal or professional qua]ifieations to a contribution to the pursuit of the objeets or the management of the Charity. The governing body of the ChaTityis the Board OfTr￿$teeS whichcomprises eight members and meets at least twice a year to review the performan￿ of the Charity. The Board of TnLStees has set up a Con)mittee of two tr￿slee$ including the cbaIr￿ of the BoariL It meets on a regular basis and is aCt1￿Y Invol￿ in supe￿iS1￿ the Chariws administrative and fU￿]cial affairs and also makes day to day management decision& It approves thtional grants to Muslim stL¥lents and funding lo the Islamic iDstitution& NewThLStees undergo aninduetion process which includes abriefing session and n￿etingS￿1th other trustees. An induction pack is given to new ThLStees ajid additional opw>rtunities to attend external Report of the Trustees for the year ended 31 DeCem1￿r 2020 (contlnnedj Elrahma Charity Trust Oplnlon We haye audited the financial statements of FJr2bma Charity TrLLSt] for the year ended 31 December 2020 vA]ich comprise the Statement of Finaneial Activiti* Balance Sheet, Statement of Cash Flows and notes to the financial statements, inc1￿11ng a sumw of Si￿]ficant accounting ￿liC￿e$. The finaneial reportiDg framework that h&8 been applied in their preparation is applicable law and United Kingdom Accowlting Standards. including Mnancial RewTting Standard 102 The Fllwiillal ReFM)rting Standard applieable in the UK and Repub]ie of Ireland (United thgdom Generally Accepted Accounting Practice). give a true and fair view of the state of the charitys affairs as at 31 2020 and of the charity's net m(Ivement in fund8 for the year then ended; have been proterly prepared in a(Tordan￿ with United Thgdom Generally Accept AeeouDting Practictr and have been prepared in accordan￿ with the requirements of the Charities Act 2011. Ba818 for opinlon We have been ap￿]nted as a￿lItOr utmler ￿tIOn 44 of tbe ch￿ltieS Act 20u and report in accordance with the Aet and relevant r￿tio￿ made or having effect thereunder. We conducted our audit in accordance with International Standarth on A￿]Iting (UK) (ISAS (UK)) and app]icable12w. Our responsibilities under those standards are ftllther desaibed in the Auditor's reS[￿bIlitieS for the audit of the financial statements section of our rekx*t. We are independent of the chwity in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK including the FRCS Ethical Standard and we bave fu]filled our other ethical responsibi]itie$ in accordance with these requirements. We itlieve that the audit evidence we have obtained 18 sufficient and appropriate to provide a basis for our opinio Conduslons relatln8 to goln8 conLvn In auditing the financial statements. we have conduded thai the trustees, use of the going concern ba818 of acCoL￿tir￿ in the preparatico of the finan￿ stateTnents is appropriate. Based on the work we have perforrned. we have not Identifi￿ any material ￿certaintieS relating to events or conditions that, individually or colleetively. may cast significant doubt on the [group/ch￿lty]'S ability to continue as a going concern for a Ferlod of at least t*tlve months from when the financial ststements are authoris&4 for iswe. in the relevant 8e¢tioDs of this reporL Other Irforn￿t[0n The trustees are resFonsible for the other inforn]ation. The other inforn]ation comprises the information incI￿￿ed in the Rey)rt of the Trustees. Our opinion on the fllwiaal statements does not cover the other infOrn￿tiOn an(L ex￿pt to the extent otlLer4￿￿ explicitly slated in our rep)rt. we do Elrahma Charity Trust In connertion with ow audit of the finan￿ 8tatements, our res￿[w￿l)Ity 18 to read the other Inforn￿tion in doing ￿ consider whetkr the other infortllation is llwterially inconsistent with the financial staterwits or our knowledge Obtain￿ in the audit or Otherwi￿ apFe2rs to be materially misstatd If we identify SLth material ineonsAStenoes or apparent material misstatements, we are requir&1 to determine whether there is a matrxial misstatement in the finaThci31 statements or a material mi&statement of the otherinf0nnati0￿ I£ based on the workwehave ttrforn]e4 we conclude that there is a ￿￿terIal mi&statement of this other inforrnatio￿ we are wuired to report that faeL We bave nothing to rep)rt in this regar We have notlllDg to report in re8Fect of the following matters in relation to which the Charitie8 (Accounts and Retths) RegulatioDS 2008 require u8 to re[￿rt toyou if, in ow opinion: adequate accountiDg records have not been kept by the C￿￿lty, sufficient accounting record5 have not teen kept: or or we bave not ￿e1v￿ all the information and explanations ￿￿ Tquire for our audit. As exp]ained more in the tr￿SleeS. resrKj￿billtieS statement set out on page 6, the tn￿ee8 are responsible for the prepanlion of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the tr￿stee$ deterniine is necessary to enable the preparation of finan(ll￿ statements that arefree from mateTial misstateD]enL Wheth￿ due to fraud or or. In rffepari￿ the finaniial ststement& the tr￿Stee$ are rey)￿￿le for aSSes￿g the charitys ability to continue as a going conc￿ disclosing. as applicable, matters related to going concern and ustng the going concern basis of accounting unle&% the tr￿sleeS either intend to liquidate the charity or to cease operation4 or have Tro realistic 31ternatiNt but to do so. Auditorf8 responslbllltles for the auditof the finandal StateM￿ts Our obj￿tiveS are to obtain reasonable a&surance atmt Wheth￿ the financial statements as a whole are free from material mi&8taternenL whether due to frdud or error, and to i&sue an auditor's reEK)rt that includes our Opinio￿ Reasonable a&surdnce is a high level of &￿ranc¢ but is not a guarantee that an audit cOnd￿ted inacCordan￿With ISKS (UK) will alwaysdetect a material misststementwhen it exist& Misstatements can arise from fraud or error and are eottsidered material if. individually or in the aggregate. theycould reasonablybe to infiuencethe ￿noMiC decisi0Thg of users taken on the basis of these finanaal statemen I￿gularitieS. Inc1￿]ng fraud are Instan￿ of non-complianL* bws and rwdations. We design procedures inline wlthourrw)￿8IbIlltie& outlined at(SNE. to detect material misstatements in respect of irregularitie4 incI￿lIng fraud The extent to which our pr(ttdures are capabk of det￿tIng irregularities. inclu(bDg fraud is detailed ttlow. Based on our ￿derstanth￿ of thectwityand the environment in thicbit operate4 we identified that the principal risks of ThonTO FIL)W FROM Net iFuXM￿/(eX￿￿l1ure)fvp the ¥wCaspep the (290928) Depreciation charges Gains from sale of property Rerrt5 from investments A59 317 (25&200) (567,coo) (￿547) (675.oll) (49.996) 267,682 (IA9A79) Net ¢ash (Msed In) o ANALYSIS OF1￿ DEBT At31 At iJaLuary 2020 Cth Flow 2020 Cash at bonk and In harnl (86J67) 4370,587 Totsl 22As6.954 {86a67) 2%?370￿87 12 Notes to the accounts For the year ended 31 December 2020 i Accounting polic&es Basls of preparatlon The finaThei￿ ststements have iEen prepared in atxordantr with the Slaternent of Recon)mended Practtce for Charities (SORP 20￿) (Second Ellitio￿ effective i January 2019) and the Ifuwioal Reporting Standard applicable in the UK and Republic of Ireland (FRS 102). FJrahll￿ Charity TnLSt meets the definition of a pub]ie benefit entity un(kr FRS I02. A8sets and liabilities are initially rwised at hi*orid or transaction value unless 0theTh4ry￿ stated In the relevant accounting tKAicynote& Tangible Ilxed assets any incidental exFenses of aequisition. All tangible assets eosting more than £100 are capitalised, and any item costing than this is written off &$ expenditu￿ Depreciation is calcu]ated so as to write off the cost of tangible fixed asset& less their estimated residual values. over the expected usefi Office Equipment Fixtures and fittings 25% per annum 25% per anThum The Investment Pror*Jtie5 are held at fair valw No depreuation is charged and movements in valuation are taken to the Statement of Fuw)illal Aetivities. The most recent indeFendent Valuation of the freehold investment properties was undertaken in October 2019 by Ms Emma Bailey MRtCS of cush￿ & Wakefield LLP. Pr(grame related investments are those a&sets that are used for clwitable purpcw and not for financial retUllL These assets are valued at oriwal eL*t and are not depr￿lat￿. Monetary assets and liabilities havebeen traL8]atwJ into sterling at the rntes of exchange nlling at the year eniL All other foreign excbange differti￿ are tsken to the Summaryof FU￿]el31ACtIv1ties in The ckjarity recognises income when all of the following ￿￿teria are met: the el)arity has entitlement to the fun