MIRZA SHARIF AHMAD FOUNDATION
+1Tr1AGE
ANNUAL REPORT
YEAR ENDED
- 2020
## TABLE OF CONTENTS
1 TRUSTEES’ & ADVISORS 2-15 TRUSTEES’ REPORT 16-18 INDEPENDENT AUDITOR’S REPORT 19 STATEMENT OF FINANCIAL ACTIVITIES STATEMENT OF FINANCIAL POSITION 20 STATEMENT OF CASH FLOW 21 NOTES TO FINANCIAL STATEMENT 22-32
## TRUSTEES AND ADVISORS
## **Board of Trustees**
Dr C N Ahmad - Chairman M M Ahmad ACA Z A Choudhry F A K Dahri S A Farooqi FCA
## **Company Secretary**
SA Farooqi FCA
## **Registered/Principal Office:**
Tahir House, 22 Deer Park Road, London, SW19 3TL **Telephone:** +44 (0) 208 544 7602 / 7627-8 **Fax:** +44 (0) 208 542 8896 **Email:** info@msaf.org.uk **Website:** www.msaf.org.uk
**Registered Charity Number:** 1115258 **Company Registration Number:** 5689730
## **INDEPENDENT AUDITOR**
RSM UK Audit LLP Chartered Accountants and Statutory Auditor Davidson House,Forbury Square,Reading, Berkshire RG1 3EU
## **SOLICITORS**
Bishop & Sewell LLP 59-60 Russell Square, London, WC1 B 4HP, United Kingdom
## **BANKERS**
National Westminster Bank 2[nd] Floor G3, 2 Cathedral Hill, Guildford, GU1 32R, United Kingdom
## TRUSTEES’ REPORT
## **Trustees’ Report**
The trustees (who are also directors of the Charity For the purpose of the Companies Act) are pleased to present their report together with the financial statements of the Charity For the year.
The financial statements have been prepared in accordance with the accounting policies set out in the notes to the financial statements and comply with the Charity’s governing document, the Companies Act 2006, the Statement of Recommended Practice (SORP) “Accounting and Reporting by Charities” including FRS102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”(2019).
Mirza Sharif Ahmad Foundation (MSAF) is a charitable company limited by guarantee, incorporated on 27 January 2006 and governed by its Memorandum and Articles of Association of same date.
The trustees are solely responsible for the decision making process. Based on this, they are considered to be the Charity’s key management personnel.
Under the terms of the guarantee, each member has agreed to contribute one pound in the event that the Charity is wound up.
## **Our Objectives**
The objects for which the Charity is established are:
- a. the advancement of the Muslim Faith worldwide as expounded by Hadhrat Mirza Ghulam Ahmad of Qadian, the Promised Messiah and the Founder of the Ahmadiyya Movement and interpreted by his successor known as Khalifatul Masih. The present Khalifatul Masih is Hadhrat Mirza Masroor Ahmad Khalifatul Masih V;
- b. the advancement of religious and secular education;
- c. the advancement of education, in particular in the field of scientific research and learning;
- d. the relief of those in financial need, hardship and distress;
- e. the relief of sickness and those in poor health;
- f. the relief and assistance of people in any part of the world who are the victims of war or other conflicts, natural disaster, trouble, or catastrophe;
- g. holding, managing and dealing with property which shall include (amongst other things) to improve, manage, construct, repair, develop, exchange, let on or lease, mortgage, charge, sell, dispose of, turn to account, grant licenses, options, rights and privileges in respect of, or otherwise deal with, all or any part of such property.
2
## TRUSTEES’ REPORT
## **Our Activities**
Our activities are as follows:
- the propagation of Islam worldwide;
- the building of mosques, hospitals and schools;
- scientific research and development;
- the award of scholarships for higher education;
- the provision of emergency relief in cases of natural disasters; and
- Assistance to the deserving and needy.
## **Public Benefit**
The trustees confirm that they have referred to the guidance contained in the Charity Commission’s general guidance on public benefit when reviewing the Charity’s aims and objectives (as set out above) and in planning future activities and setting appropriate policies for the year.
## **Financial Review**
The Charity has been reliant on income from Ahmadiyya Muslim Jamaat International, which amounted to £1,590k during the year to 30 September 2020 (30 September 2019, £1,075k). £1,295k was expended on the charitable objectives during the year (30 September 2019, £929k). The Charity has had an increase in borrowing to £32,909k (30 September 2019, £29,525k) from Ahmadiyya Muslim Jamaat International as a social investment which was invested mainly in Islamabad redevelopment project and in 11 other properties (30 September 2019, 11 properties).
## **Achievements and Performance**
The board is proud to announce that the Charity has successfully achieved its objective of the advancement of the Muslim faith by providing free residential accommodation to ministers of religion through 21 properties acquired so far.
The main objectives for future periods are to continue to support the advancement of the Muslim faith by providing residence to religious scholars and providing scholarships for higher education.
3
## ISLAMABAD PROJECT
The Islamabad site in Tilford initially contained an all-inclusive school, which was set up during the Second World War for evacuees and was in the end shut down in July 1977. The land was gained by the Ahmadiyya Muslim Association (AMA) in 1984.
The existing structures were in an incredibly poor state of fix and were a long way from being classed as “fit for purpose”. Ecologically they failed to perform and were in an urgent need of substitution.
The development provides new purpose-built educational, office, religious and residential spaces on the footprint of the existing buildings, replacing the existing with highly sustainable modern structures that have been appropriately designed for this context and perform exceptionally in terms of environmental and energy-efficient criteria. The development offers increased flexibility of space and benefits from proper levels of natural daylighting and natural ventilation with views out onto ‘green’ amenity spaces externally.
4
Since Beard’s practical completion of the Islamabad Development Project in May 2019, CCL continued to carry out the postconstruction works. Beard Construction team de-mobilised from the site at the same time however, they returned to site periodically and carried on completing the snag items both in Phase-I and Phase-II.
During this period, in addition to the snagging work completed by Beard, several other activities were carried out site wide under kind instructions of Hadhrat Khalifatul Masih (aba) and MSAF/IDPC. A glimpse of the key activities completed is as below:
- Widening of footpath leading to Masroor hall
- Construction of new kitchen to North of Bungalow
- New car parking bays in Phase-II residences
- New car parking in the main playing field
- Erection of new carport in block-5 (CD)
- Construction of new retaining wall using gabion baskets and RC brick masonry at boundary between Phase-I & Phase-II
- Erection of entrance canopy to Masroor Hall
- Construction of Laundry room at rear of existing bungalow (guest accommodation)
- Construction of new road to Qasr-e-Khilafat (Shahrah e Sadr) with new drainage system, soakaways etc
- Construction of storage rooms at rear of the Masroor Hall
- Construction of pot wash shelter for the main kitchen in Masroor hall
- Installation of new chain linked boundary fencing around Islamabad
- Tree plantation
- Water supply and utility ducts installation for the drip irrigation system around holy ground
- Construction of link roads between Shahra e Mahmud and Shahra e Sadr
- Completed renovation of Nusrat Block to include new serving room and outside toilets
- Completed construction of Sarai Mahmud leading to exit gate-2
5
## OTHER ACTIVITIES
Conservatory in Bungalow
- Construction of new car porch to accommodate 4x cars adjacent to block-15
- Construction of new conservatory in existing bungalow
- Provision of new Distribution supply in the main field with kiosks with new cable installation from main switch room
- Widening of Sarai Mahmud for two-way traffic using plastic grid finish
- Widening of Sarai Mahmud on the west side to accommodate car parking spaces throughout the length of the road
- Construction of Camper Van bays
- Construction of covered walkway between Osman Chao block and Aafiyat block
- Construction of new footpath to Hilmi Al-Shafi Road
Water supply scheme in the main field
- New access ramp to the ladies scanning
- Construction of additional water storage system
- Installation of new secondary generator and switch rooms
- Construction of new water supply and utilities ducting systems in the main field
- Construction of new porta-cabin offices and associated services
- Construction of new speed ramps in Phase-I and Phase –II
- Birds mouth fencing and widening of Hilmi Al-Shafi Road using plastic grids
- Construction of new speed ramps in Phase-I and Phase –II
- Birds mouth fencing and widening of Hilmi Al-Shafi Road using plastic grids
Construction of Shahra e Sadar
6
Line marking in progress
Additional water storage system
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-
-
-
-
-
-
-
-
-
New false ceiling in corridor of block-16
Footpath to block-7 phase-II
Footpath re-surfacing (resin bonding) Hilmi Al-Shafi Road
Installed hard surfacing to access storage yard and allotments
Installation of new bi-fold gates at second exit of Islamabad
New Arm barrier at Shahrah e Sadar
Installation of new digital screen opposite Osman Chao block
Installation of car charging points
Strengthening work to Jackson fencing
Construction of new chiller and freezer outside of kitchen of Masroor Hall
New rear entrance canopy to Masroor Hall
7
## MISCELLANEOUS WORKS AT ISLAMABAD
Raised arm barrier on Shahra e Sadar
Additional car park facility in the main field
Storage space at rear of Masroor Hall
Link road construction in progress
8
Soakaways construction for the road drainage system
RC/Masonry retaining wall in progress
Porta-cabin offices for maintenance team
Widening of footpath leading to Masroor Hall
New Switch Room
Retaining wall built using Gabion baskets
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IMAGE LIBRAR
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## TRUSTEES’ REPORT (continued)
## **Statement of trustees’ responsibilities**
The trustees (who are also directors of Mirza Sharif Ahmad Foundation for the purposes of company law) are responsible for preparing the Trustees’ Annual Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
Company law requires the trustees to prepare financial statements for each financial year. Under company law the trustees must not approve the financial statements unless they are satisfied that they 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 period. In preparing these financial statements, the trustees are required to:
## **Corporate Governance**
The governing body of MSAF is the Board of Trustees, which comprises 5 members. The board meets formally at least three times a year, but the trustees do meet informally many times.
Potential Board members are selected from the worldwide Ahmadiyya Muslim Community. The existing board then considers its existing skill and experience requirements to ensure that potential trustees are recruited to maintain a balanced range of professional, academic and necessary skills and experience.
The induction process for any newly-appointed trustee comprises an initial meeting with the trustees, followed by a review of the grant-making process, powers and responsibilities of the board. Information supplied as part of the introduction process includes copies of the latest Board minutes, a copy of the latest annual report and financial statements, a copy of the Memorandum and Articles of Association and a copy of the Charity Commission’s guidance “The Essential Trustee: What you need to know, what you need to do”. On an ongoing basis, trustees are encouraged to attend seminars and conferences about sector issues and matters relevant to the Charity.
- select suitable accounting policies and apply them consistently;
- observe the methods and principles in the Charities SORP;
- make judgments and estimates that are reasonable and prudent;
- state whether applicable UK accounting standards have been followed, subject to any departures disclosed and explained in the financial statements; and
- prepare the accounts on a going concern basis unless it is inappropriate to presume that the charity will continue in business.
The trustees are responsible for maintaining proper accounting records which disclose with reasonable accuracy at any time the financial position of the charitable company and to enable them to ensure that the 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.’
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## TRUSTEES’ REPORT (continued)
## **Risk and internal control**
The trustees have set policies on risk and internal controls which cover the following:
- the responsibility of management to implement the trustees’ policies and identify and evaluate risks for their consideration on an ongoing basis;
- consideration of the type of risks the Charity faces;
- the level of risks which they regard as acceptable;
- the likelihood of the risks concerned materialising;
- the Charity’s ability to reduce the incidence and impact on the business of risks that do materialise;
- the costs of operating particular controls relative to the benefit obtained; and
- arrangements for monitoring and reporting on risk and control matters of importance, together with details of corrective action being undertaken.
## **Risk and internal control**
The trustees have overall responsibility for ensuring that the Charity has an appropriate system of controls, financial and otherwise. They are also responsible for safeguarding the assets of the Charity and hence taking reasonable steps for the prevention and detection of fraud and other irregularities and to provide reassurance that:
- its assets are safeguarded against unauthorised use or disposition;
- proper records are maintained, and financial information used within the Charity or for publication is reliable; and
- the Charity complies with relevant laws and regulations.
As part of the Charity’s risk management process, the trustees acknowledge their responsibility for the Charity’s system of internal control and reviewing its effectiveness. It is also recognised by the trustees that such a system is designed to manage rather than eliminate the risk of failure to achieve the Charity’s objectives and can only provide reasonable, not absolute, reassurance against material misstatement or loss.
A summary of the trustees’ consideration of the major risks to which the Charity is exposed, together with the management of those risks, is as follows:
## **RISK APPROACH**
Income is not available MSAF provide properties to Ahmadiyya from funding. Muslim Community and in return, the Community would ensure any related costs are met.
Properties in the portfolio may get damaged.
MSAF has taken out full insurance cover - the properties are maintained and supervised to a high standard and regularly reviewed.
Covid-19
Given the unprecedented real-time circumstances, it is extremely difficult to predict what will happen in the coming months. Still, the trustees consider the charity holds adequate cash reserves to fund its liabilities as they fall due for the foreseeable future.
13
## TRUSTEES’ REPORT (continued)
## **Reserves**
At present, any excess of income over expenditure is retained as unrestricted funds unless received as part of a specific grant or designated to a specific purpose by the trustees.
The balance on undesignated reserves as at 30 September 2020 is £768k (30 September 2019, £120k).
The balance on designated property asset funds as at 30 September 2020 is £7,116k (30 September 2019, £7,116k). This balance has been designated to reflect the net value of the property assets to the Charity.
The restricted reserves of £550k (30 September 2019, £550k) are those specifically allocated to particular property purchases.
It is the trustees’ policy to establish a level of reserves sufficient to enable the Charity to operate as a going concern. This objective is specifically to ensure the Charity could cover one year’s worth of grants payable from reserves, which for 2020 would equate to £107k.
## **Investments**
Investment decisions are taken by the Board of Trustees. Funds are invested in properties.
## **Social Investments**
The Charity has borrowed funds from Ahmadiyya Muslim Jamaat International for objectives similar to those of MSAF. This is to provide help to the poor and needy and to provide a reasonable standard of accommodation.
## **Grant making policies**
Grants are awarded by the trustees to other charities with similar objectives and the Ahmadiyya Muslim Community both the UK, where they are most needed, having first been assessed by the trustees on a case-by-case basis. As a result, grants are made to institutions and individuals to ensure that work is done on all our objectives throughout the period.
The grant application process is designed to be as easy as possible whilst still drawing out the key information needed for a decision.
14
## **Going Concern**
At the date of this report, the Coronavirus disease (COVID-19) has been declared a pandemic. The COVID-19 pandemic is unprecedented and still evolving and therefore brings challenges and uncertainties. Financial forecasts have been prepared to demonstrate that the charity has, through a combination of bank balances and the support of its social investors, sufficient cash to remain a going concern for the foreseeable future. Having considered the uncertainties posed by the pandemic, the trustees consider For the above reasons that there are no material uncertainties about the Charity’s ability to continue as a going concern and have accordingly prepared the financial statements on a going concern basis.
## **Auditor**
RSM UK Audit LLP has indicated its willingness to continue in office.
## **Statement as to disclosure of information to auditor**
The trustees who were in office on the date of approval of these financial statements have confirmed, as far as they are aware, that there is no relevant audit information of which the auditor is unaware. Each of the trustees has confirmed that they have taken all the steps that they ought to have taken as trustees in order to make themselves aware of any relevant audit information and to establish that it has been communicated to the auditor.
This report has been prepared in accordance with the provisions applicable to companies subject to the small companies’ regime.
Approved and authorised for issue by the Board of Trustees and signed on its behalf on 22/06/2021 by:
Shajar Ahmad Farooqi FCA Trustee
15
## Independent Auditor’s Report to the members of Mirza Sharif Ahmad Foundation
## **Opinion on financial statements**
We have audited the financial statements of Mirza Sharif Ahmad Foundation (the ‘charitable company’) for the year ended 30 September 2020 which comprise the Statement of Financial Activities, the Balance Sheet, the Cash Flow Statement and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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:
- give a true and fair view of the state of the charitable company’s affairs as at 30 September 2020 and of its incoming resources and application of resources, including its income and expenditure, for the year then ended;
- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
- have been prepared in accordance with the requirements of the Companies Act 2006.
## **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.
## **Conclusions relating to going concern**
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
- the trustees’ use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
- the trustees have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the charitable company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
## **Other information**
The trustees are responsible for the other information. The other information comprises the information included in the Trustees’ Report other than the financial statements and our auditor’s report thereon. 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.
In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.
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## Independent Auditor’s Report to the members of Mirza Sharif Ahmad Foundation
## **Opinion on other matters prescribed by the Companies Act 2006**
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the Trustees’ Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the Trustees’ Report has been prepared in accordance with applicable legal requirements.
## **Matters on which we are required to report by exception**
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 Trustees’ Report.
We have nothing to report in respect of the following matters where 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
- certain disclosures of trustees’ remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit; or
- the Trustees were not entitled to take advantage of the small companies exemption from the requirement to prepare a Strategic Report.
## **Responsibilities of trustees**
As explained more fully in the Statement of Trustees’ responsibilities set out on page 12, the trustees (who are also the directors of the charitable company for the purposes 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.
## **Auditor’s responsibilities for the audit of the financial statements**
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.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at **http://www.frc.org.uk/auditorsresponsibilities** . This description Forms part of our auditor’s report.
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## Independent Auditor’s Report to the members of Mirza Sharif Ahmad Foundation
## **Use of our report**
This report is made solely to the charitable company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable 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 charitable company and the charitable company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Kerry Gallagher (Senior Statutory Auditor) For and on behalf of RSM UK AUDIT LLP, Statutory Auditor Chartered Accountants Davidson House,Forbury Square,Reading, Berkshire RG1 3EU
Date 23 June 2021
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## **Statement of Financial Activities**
(incorporating Income and Expenditure Account) for the year ended 30 September 2020
**----- Start of picture text -----**
Note Unrestricted Restricted Total Funds to Total Funds to
Funds Funds 30 September 30 September
2020 2019
INCOME FROM: £ ‘000 £ ‘000 £ ‘000 £ ‘000
-
Donations and legacies 2 1,590 1,590 1,075
-
Other trading activities 3 353 353 267
TOTAL INCOME 1,943 - 1,943 1,342
EXPENDITURE ON:
-
Charitable activities 4 1,295 1,295 929
TOTAL EXPENDITURE 1,295 - 1,295 929
NET INCOME BEFORE TRANSFERS 648 - 648 413
GROSS TRANSFERS BETWEEN FUNDS - - - -
NET MOVEMENT IN FUNDS 648 - 648 413
RECONCILIATION OF FUNDS
Total funds at 1 October 2019 7,236 550 7,786 7,373
Total funds at 30 September 2020 7,884 550 8,434 7,786
**----- End of picture text -----**
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## **Statement of Financial Position** for the year ended 30 September 2020
|**Note**
**FIXED ASSETS**
Tangible assets
8
**CURRENT ASSETS**
Debtors
9
Cash at bank and in hand
**CREDITORS: amounts falling due**
**within one year**
10
**NET CURRENT ASSETS**
**TOTAL ASSETS LESS**
**CURRENT LIABILITIES**
**CREDITORS: amounts falling due**
**after more than one year**
11
**NET ASSETS**
**FUNDS**
Unrestricted Funds
Undesignated general funds
13
Designated property assets funds
13
Restricted Funds
13|**As at 30 September**
**2020**
**As at 30 September**
**2019**
**£ ‘000**
**£ ‘000**
42,494
39,598
75
158
23
555|
|---|---|
||98
713
(379)
(52)|
||(281)
661|
||**42,213**
**40,259**
(33,779)
(32,473)|
||**8,434**
**7,786**|
||768
120
7,116
7,116
550
550|
||**8,434**
**7,786**|
Approved and authorised for issue by the Trustees on 22/06/2021 and signed on their behalf by:
**S. A. Farooqi FCA** Trustee and Secretary
**Ch. Nasir Ahmad** Chairman
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## **Statement of Cash Flows** for the year ended 30 September 2020
|**Note**
**Cash inflow from operating activities:**
Net cash used in operating activities
14
Interest paid
**Cash flow from investing activities:**
Purchase of tangible fixed assets
Net cash used in investing activities
**Cash flow from financing activities:**
Proceeds of new borrowings
(social investment)
Proceeds of new borrowings (Other Loans)
Proceeds of new borrowings (bank loan)
**Net cash used in financing activities:**
Net decrease in cash and cash equivalents
Cash and cash equivalents brought forward
Cash and cash equivalents carried forward
**Relating to:**
Cash at bank and in hand
**Total**|**As at 30 September**
**2020**
**As at 30 September**
**2019**
**£ ‘000**
**£ ‘000**
1,091
(486)
(18)
(18)|
|---|---|
||1,073
(504)
(2,950)
(6,212)|
||(2,950)
(6,212)
**3,384**
**5,615**
(2,002)
2
**(37)**
**(32)**|
||1,345
5,585
(532)
(1,131)
555
1,686|
||23
555|
||23
555|
||**23**
**555**|
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# **Notes to the financial statements** for the year ended 30 September 2020
## **1. LEGAL STATUS**
The charity is a company limited by guarantee and incorporated in England and Wales. In the event of the charity being wound up, the liability in respect of the guarantee is limited to £1 per voting member of the Charity .
The Charity ‘s objectives and aims are disclosed in the Trustees’ report on page 2.
## **ACCOUNTING CONVENTION**
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”, the requirements of the Companies Act 2006 and under the historical cost convention. The financial statements have also been prepared in accordance with the accounting policies set out in more detail below, to comply with the Charity’s governing document 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 published on 16 July 2014 (the FRS 102 Charities SORP 2019).
The financial statements are prepared in sterling, which is the functional currency of the charitable company. Monetary amounts in these financial statements are rounded to the nearest £1,000.
The Charity meets the definition of a public benefit entity under FRS 102.
## **GOING CONCERN**
The trustees assess whether the use of going concern is appropriate, i.e. whether there are any material uncertainties related to events or conditions that may cast significant doubt on the ability of the Charity to continue as a going concern. The trustees make this assessment in respect of a period of at least one year from the date of authorisation for issue of the accounts. The trustees are satisfied that the Charity has adequate resources to continue in operational existence for the foreseeable future and there are no material uncertainties about its ability to continue as a going concern. This conclusion has been formed as a result of the strong net assets position of the Charity at the yearend of £8,434k and from the continued support from Ahmadiyya Muslim Jamaat International by means of grants provided and the social investment funding For the Islamabad project. Thus, the trustees continue to adopt the going concern basis of accounting in preparing the financial statements.
## **COVID-19**
At the time of signing these financial statements the Coronavirus disease (COVID-19) has been declared a pandemic. The COVID-19 pandemic is unprecedented and still evolving and therefore brings challenges and uncertainties. Financial forecasts have been prepared demonstrating that the charity has, through a combination of bank balances and the support of its social investors, sufficient cash to remain a going concern for the foreseeable future. Having considered the uncertainties posed by the pandemic, the trustees consider for the above reasons that there are no material uncertainties about the Charity’s ability to continue as a going concern and have accordingly prepared the financial statements on a going concern basis.
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# **Notes to the financial statements** for the year ended 30 September 2020
## **TANGIBLE FIXED ASSETS AND DEPRECIATION**
Items of a capital nature are reviewed for their purpose and are capitalised where they are considered to provide an ongoing use to the Charity. Freehold property is valued at cost or on a valuation carried out at the initial date of transfer to MSAF.
Depreciation is charged against fixed assets commencing with the year of acquisition at rates estimated to write off their cost or valuation less any residual value over the expected useful lives which are as Follows:
Fixtures, fittings and equipment 1 year Motor vehicles 4 year
Assets under construction are currently not being depreciated, due to the assets not being in use at the year end.
Any assets which are impaired in value are written down to their recoverable amount.
It is the charity’s policy to depreciate freehold buildings over their expected useful lives to their residual value. During the year the Trustees have reassessed the residual values of the charity’s freehold properties and have adjusted their accounting estimate in respect of depreciation charge to reflect this. No depreciation is provided on freehold land
## **CASH AND CASH EQUIVALENTS**
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.
## **FINANCIAL INSTRUMENTS**
The Charity only has financial assets and financial liabilities of a kind that qualify as basic financial instruments under section 11 of FRS 102. Financial instruments are recognised when the charity becomes party to the contractual provisions of the instrument.
Financial assets and financial liabilities are recognised when the charity becomes a party to the contractual provisions of the instrument, and are offset only when the charity currently has a legally enforceable right to set off the recognised amounts and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
## **FINANCIAL ASSETS**
Trade and other debtors which are receivable within one year and which do not constitute a financing transaction initially measured at the transaction value and subsequently measured at settlement value.
## **FINANCIAL LIABILITIES**
Basic financial liabilities, including trade and other payables are initially recognised at transaction value unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the present value of the future payments discounted at a market rate of interest.
Debt instruments are subsequently measured at settlement value.
## **DONATIONS AND GIFTS**
Donations and gifts are recognised in the Statement of Financial Activities when the charity has entitlement to the funds and it is probable that the income will be received and the amount can be measured reliably. Gifts in kind are recognised at market value.
## **RENTAL INCOME**
Rental income is included in the Statement of Financial Activities when receivable.
23
# **Notes to the financial statements** for the year ended 30 September 2020
## **GRANTS PAYABLE**
Grants payable are expensed when events have created a valid expectation in other parties that the Charity will discharge its liabilities.
## **EXPENDITURE**
Expenditure is recognised on an accruals basis as a liability is incurred.
## **APPORTIONMENT OF EXPENDITURE**
Expenditure (including irrecoverable VAT) is apportioned under the guidance of SORP and analysed between costs of generating funds, charitable activities and governance costs:
Expenditure is recognised on an accruals basis as a liability is incurred. The method of apportionment is as follows:
1. Costs attributable solely to one activity are allocated to that activity;
2. Costs which contribute directly to the output of more than one activity are apportioned on a reasonable, justifiable and consistent basis;
3. Support costs are apportioned based on the following criteria:
General Management Total cost of activity PR & Communication Total cost of activity Administration Total cost of activity Finance Total cost of activity Currency translation gains Total cost of activity Governance Total cost of activity
## **FOREIGN CURRENCIES**
Transactions in foreign currency are recorded at the rate of exchange prevailing at the time of transaction. Foreign currency balances are translated into sterling at the exchange rates prevailing at the balance sheet date. Any gains or losses are included in the Statement of Financial Activities.
## **FUND ACCOUNTING**
Unrestricted funds are donations and other incoming resources receivable or generated in furtherance of the charity ’s objectives without further specified purpose and are available as general funds. Designated funds are unrestricted funds earmarked by the trustees for particular purposes. Restricted funds are to be used in accordance with specific restrictions imposed by donors or which have been raised by the charity for specific purposes.
## **JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY**
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 following judgements (apart from those involving estimates) have been made in the process of applying the above accounting policies that have had the most significant effect on amounts recognised in the financial statements:
24
# **Notes to the financial statements** for the year ended 30 September 2020
## **USEFUL ECONOMIC LIVES OF TANGIBLE ASSETS**
The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets. See note 8 for the carrying amount of the property plant and equipment, and the corresponding accounting policy for the useful economic lives for each class of assets.
There are no key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.
## **2. DONATIONS AND LEGACIES**
|Unrestricted
Funds
£’000
**Total Funds**
**2020**
**£’000**
Total Funds
2019
£’000
Donations from institutions and individuals
1,590
**1,590**
1,075
In the year to 30 September 2020, £550,000 donations (2019: £550,000) from institutions and individuals were restricted.
**2020**
**£’000**
2019
£’000
Donations and legacies are split as follows:
Income from UK sources
**1,590**
1,075
**3. OTHER TRADING ACTIVITIES**|Unrestricted
Funds
£’000
**Total Funds**
**2020**
**£’000**
Total Funds
2019
£’000
Donations from institutions and individuals
1,590
**1,590**
1,075
In the year to 30 September 2020, £550,000 donations (2019: £550,000) from institutions and individuals were restricted.
**2020**
**£’000**
2019
£’000
Donations and legacies are split as follows:
Income from UK sources
**1,590**
1,075
**3. OTHER TRADING ACTIVITIES**|Unrestricted
Funds
£’000
**Total Funds**
**2020**
**£’000**
Total Funds
2019
£’000
Donations from institutions and individuals
1,590
**1,590**
1,075
In the year to 30 September 2020, £550,000 donations (2019: £550,000) from institutions and individuals were restricted.
**2020**
**£’000**
2019
£’000
Donations and legacies are split as follows:
Income from UK sources
**1,590**
1,075
**3. OTHER TRADING ACTIVITIES**|Unrestricted
Funds
£’000
**Total Funds**
**2020**
**£’000**
Total Funds
2019
£’000
Donations from institutions and individuals
1,590
**1,590**
1,075
In the year to 30 September 2020, £550,000 donations (2019: £550,000) from institutions and individuals were restricted.
**2020**
**£’000**
2019
£’000
Donations and legacies are split as follows:
Income from UK sources
**1,590**
1,075
**3. OTHER TRADING ACTIVITIES**|
|---|---|---|---|
|||**2020**|2019|
|||**£’000**|£’000|
|Rent receivable||353|267|
25
## **Notes to the financial statements** for the year ended 30 September 2020
## **4. CHARITABLE ACTIVITIES**
|||||**Activities**|**Grant**|**Support**|**Total**|**Total**|
|---|---|---|---|---|---|---|---|---|
|||||**undertaken**|**funding &**|**costs**|**cost**|**cost**|
|||||**directly**|**expenditure**||**2020**|**2019**|
||1. Propagation of Islam worldwide
2. Building of Mosques, Hospitals & Schools
3. Scientific Research & Development
4. Scholarships for Higher Education
5. Emergency Relief - Natural Disasters
6. Assistance to deservingand needy
Total charitable expenditure
**Activities undertaken directly**
**Activity 1**
**£’000**
Central properties
883
**Total payable for the year ended**
**30 September 2020**
883
**Total payable for the year ended**
**30 September 2019**
457||**Activity 2**
**£’000**
-
-
-|**£’000**
883
-
-
-
-
-
883
**Activity 3**
**£’000**
-
-
-|**of**
**activities**
**£’000**
173
-
-
-
-
4
177
**Activity 4**
**£’000**
-
-
-|**£’000**
235
-
-
-
-
-
235
**Activity 5**
**£’000**
-
-
-|**£’000**
1,291
-
-
-
-
4
1,295
**Activity 6**
**£’000**
-
-
-|**£’000**
925
-
-
-
-
4
929
**Total**
**£’000**
883
883
457|
||**Grant funding and**
**Expenditure of activities**
**Ahmadiyya Muslim Association,**
**United Kingdom**
**Al Shirkatul Islamiyyah**
**Grants to individuals**
**Total payable for the year ended**
**30 September 2020**
**Total payable for the year ended**
**30 September 2019**|**Activity 1**
**£’000**
128
45
-
173
103|**Activity 2**
**£’000**
-
-
-
-
-|**Activity 3**
**£’000**
-
-
-
-
-|**Activity 4**
**£’000**
-
-
-
-
-|**Activity 5**
**£’000**
-
-
-
-
-|**Activity 6**
**£’000**
-
-
4
4
4|**Total**
**£’000**
128
45
4
177
107|
26
## **Notes to the financial statements** for the year ended 30 September 2020
|**Support costs**
**General Management**
**Administration**
**Total payable for the year ended**
**30 September 2020**
**Total payable for the year ended**
**30 September 2019**|**Activity 1**
**£’000**
97
138
235
367|**Activity 2**
**£’000**
-
-
-
-|**Activity 3**
**£’000**
-
-
-
-|**Activity 4**
**£’000**
-
-
-
-|**Activity 5**
**£’000**
-
-
-
-|**Activity 6**
**£’000**
-
-
-
-|**Total**
**£’000**
97
138
235
361|
|---|---|---|---|---|---|---|---|
**Of the total charitable expenditure in the year to 30 September 2020, £1,295,000 was attributable to unrestricted funds and £nil to restricted funds.**
**Included within support costs are governance costs amounting to £9,000 (2019: £9,000) . These costs are apportioned on the total cost of each activity.**
## **5. AUDITOR’S REMUNERATION**
**The auditor’s remuneration amounted to £10,550 (2019: £9,750). The remuneration received for non audit services amounted to £ Nil (2018: £ Nil).**
## **6. STAFF COSTS AND REMUNERATION OF KEY MANAGEMENT PERSONNEL**
|**Wages and salaries**
**National Insurance**
**Pension**|2020
£’000
2019
£’000
92
135
4
6
1
-|
|---|---|
||97
141|
**The average number of employees during the year was 4 (2019: 4). During the year 3 (2019: 3) employees were engaged in the**
**propagation of Islam worldwide with 1 employee engaged in administration. No employees received emoluments in excess of £60,000 during either year.**
**The charity considers its Board of Trustees as its key management personnel. No members of the key management personnel received remuneration in the current or previous year.**
**The trustees did not receive any emoluments or reimbursed expenses during either year.**
## **7. TAXATION**
**The company is a registered charity and as such its income and gains falling within Section 471 to 489 of the Corporation Tax Act 2010 or Section 256 of the Taxation of Chargeable Gains Act 1992 are exempt from corporation tax to the extent that they are applied to its charitable objectives.**
27
## **Notes to the financial statements** for the year ended 30 September 2020
## **8. TANGIBLE FIXED ASSETS**
|||Freehold
Fixtures,|Motor||
|---|---|---|---|---|
|||land &
fittings &|vehicle||
||**COST**
**At 1 October 2019**
**Additions**
**At 30 September 2020**
**DEPRECIATION**
**At 1 October 2019**
**Depreciation charge**
At 30 September 2020
**NET BOOK VALUE**
**At 1 October 2019**
**At 30 September 2020**
**The net book value of fixture, fittings & equipment at 30**
**purposes.**
**9. DEBTORS**|buildings
£’000
equipment
£’000
40,094
123
2,898
50
42,992
173
**505**
**123**
-
50
505
173
39,589
-
**42,487**
**-**
**September 2020 represents fixed assets used for**
**2020**
**£’000**|£’000
25
2
27
**16**
4
20
9
**7**
**administration**
**2019**
**£’000**|Total
£’000
40,242
2,950
43,192
**644**
54
698
39,598
**42,494**
|
||**Other debtors**
**Advance to Centenary Construction**
**Prepayments**
**Loan repayable in more than one year**|3
-
22
25
50
75|12
79
17
108
50
158||
28
## **Notes to the financial statements** for the year ended 30 September 2020
## **10. CREDITORS - amounts falling due within one year**
|Other Creditors
Other tax and social security
Payroll due to employees
Accruals
Bank Loan due less than 1 year|**2020**
**£’000**
**2019**
**£’000**
284
11
2
2
3
6
51
33
39
-|
|---|---|
||379
52|
## **11. CREDITORS - amounts falling due in more than one year**
|DUE
Loan from Ahmadiyya Muslim Jamaat International
Loan from Lajna Imaillah
Bank Loans|**2020**
**£’000**
**2019**
**£’000**
2 - 5
YEARS
MORE THAN
5 YEARS
**TOTAL**
-
32,909
**32,909**
29,525
-
-
**-**
2,002
132
738
**870**
946|
|---|---|
||132
33,647
**33,779**
32,473|
Ahmadiyya Muslim Jamaat International, a registered charity , has provided funds to MSAF. Their objective is to help the poor and needy and providing a reasonable standard of accommodation. MSAF has invested these funds in residential properties. AMJ International retains a formal charge on these properties and its trustees retain the right to charge interest. No interest has been charged for the year ended 30 September 2020 (2019: Nil). The loan is not due for repayment within 12 months from the balance sheet date.
The full amount of the bank loans are secured against properties purchased the value of which is included within freehold land and buildings in note 8.
## **12. FINANCIAL INSTRUMENTS**
|**12. FINANCIAL INSTRUMENTS**||
|---|---|
|**Carrying amount of financial assets**
Debt instruments measured at amortised cost
**Carrying amount of financial liabilities**
Measured at amortised cost|**2020**
**£’000**
**2019**
**£’000**
53
141|
||34,158
30,523|
29
## **Notes to the financial statements** for the year ended 30 September 2020
## **13. FUNDS**
|**Year Ended**
**30 September 2020**
Unrestricted funds
Undesignated general funds
Designated property assets funds
Restricted funds|**Balance**
**b/fwd**
**£’000**
**Incoming**
**Resources**
**£’000**
**Outgoing**
**Resources**
**£’000**
**Transfers**
**£’000**
**Balance**
**c/fwd**
**£’000**
120
1,943
(1,295)
-
768
7,116
-
-
-
7,116
550
-
-
-
550|
|---|---|
||7,786
1,943
(1,295)
-
7,786|
The transfers are to reflect the balance on the building project fund and additions made to properties in the year
|**Year Ended**
**30 September 2019**
Unrestricted funds
Undesignated general funds
Designated fund for building projects
Designated property assets funds
Restricted funds
**ANALYSIS OF NET ASSETS BETWEEN FUNDS**
**Year Ended 30 September 2020**
Tangible fixed assets
Current assets
Current liabilities
Long term liabilities
Net assets||**Balance**
**b/fwd**
**£’000**
**Incoming**
**Resources**
**£’000**
**Outgoing**
**Resources**
**£’000**
**Transfers**
**£’000**
Balance
c/fwd
£’000
104
1,342
(929)
(397)
120
1,674
-
-
(1,674)
-
3,913
-
-
3,203
7,116
1,682
-
-
(1,132)
550|
|---|---|---|
|||7,373
1,342
(929)
-
7,786|
|||Unrestricted
Restricted
2020
Total
2019
Total
Designated
funds for
building
projects
£’000
Designated
property
assets
funds
£’000
£’000
£’000
£’000
-
42,214
-
42,494
39,598
-
-
550
648
713
-
-
-
(340)
(52)
-
(34,368)
-
(34,368)
(32,473)|
||Un-designated
general funds
£’000
7
98
(340)
-||
||(235)|-
7,846
550
8,434
7,786|
30
## **Notes to the financial statements** for the year ended 30 September 2020
## **13. FUNDS (continued)**
|**Year Ended 30 September 2019**
Tangible fixed assets
Current assets
Current liabilities
Long term liabilities
Net assets|Unrestricted
Restricted
Total
Un-designated
general funds
£’000
Designated
funds for
building
projects
£’000
Designated
property
assets
funds
£’000
£’000
£’000
9
-
39,589
-
39,598
163
-
-
550
713
(52)
-
-
-
(52)
-
-
(32,473)
-
(32,473)|
|---|---|
||120
-
7,116
550
7,786|
Undesignated general funds are available for use at the discretion of the trustees in furtherance of the general objectives of the charity and which have not been designated for other purposes.
The designated building project fund are funds utilised by the charity towards their building projects, this includes funds provided by third parties.
The designated property fund represents the amount of unrestricted funds attributable to the charity ’s freehold property.
The restricted funds represent a specific donation made by a third party towards a particular property purchase.
## **14. NET CASH FLOW FROM OPERATIONS**
|Net income for year
Depreciation
(Increase) in debtors
(Decrease)/Increase in creditors
Interest paid
Net cash flow from operating activities|2020
£’000
2019
£’000
648
413
54
137
83
(87)
288
(967)
18
18|
|---|---|
||1,091
(486)|
31
## **Notes to the financial statements** for the year ended 30 September 2020
## **15. CAPITAL COMMITMENTS**
|**15. CAPITAL COMMITMENTS**|||
|---|---|---|
||**2020**|**2019**|
||**£’000**|**£’000**|
|Authorised but not contracted|-|550|
## **16. RELATED PARTY TRANSACTIONS**
No related party transactions occurred during the period (2019: Nil).
32