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← Mercy Mission UK

2023-12-31-accounts

Charity registration number 1122922

Company registration number 06380231 (England and Wales)

MERCY MISSION UK

ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023

PEARLMAN ROSE

Chartered Accountants & Statutory Auditors Suite 1, First Floor Jack Dash House 2 Lawn House Close London E14 9YQ

MERCY MISSION UK

LEGAL AND ADMINISTRATIVE INFORMATION

Trustees Mr M S Ikram
Ms F Mohammad
Mr I Mansha
Ms Z A Kidwai (Appointed 23 January 2023)
Secretary Ms A Imran
Mr M S Ikram
Charity number 1122922
Company number 06380231
Registered office 203 Westgate
Bradford
England
BD1 3AD
Auditor Pearlman Rose
Chartered Accountants & Statutory Auditors
Suite 1, First Floor
Jack Dash House
2 Lawn House Close
London
E14 9YQ

MERCY MISSION UK

CONTENTS

Page
Trustees' report 1 - 3
Independent auditor's report 4 - 6
Statement of financial activities 7
Balance sheet 8
Statement of cash flows 9
Notes to the financial statements 10 - 22

MERCY MISSION UK

TRUSTEES' REPORT (INCLUDING DIRECTOR'S REPORT) FOR THE YEAR ENDED 31 DECEMBER 2023

The trustees present their annual report and financial statements for the year ended 31 December 2023.

Introduction

We extend our heartfelt thanks to all our donors, volunteers, and partner organisations for their unwavering support and commitment to our mission. Your contributions have made a significant difference in the lives of many. Specific thanks go to our enterprise partner, the Collective Continuum, with whom we have worked on designing some super innovative projects.

As we reflect on the past year, we are grateful for the opportunities to serve and uplift communities. We are committed to continuing our efforts in alignment with Islamic values and principles, ensuring that our work contributes to a more just and equitable society. 2023 has been a very tough year for Muslim charities that are responding to global challenges. The war on Gaza has been hard to watch, not only the mass killings since October, but also the many incidences throughout the year, especially in Ramadan. We call for peace and justice for the fallen and are proud to enable our donors and partners have a well governed and legal means by which to support good causes across the world.

2023 has been tough, and we are hopeful our 2024 activities play some role in dealing with the mass challenges people face in the world. This year we hosted Sir Keir Starmer, leader of the Labour Party to discuss some of these realities and pray for a peace and a new government in which the dignity of human life is put before commercial and political interests.

Objectives and activities

Our charity is guided by Islamic principles and is committed to enhancing civil society through grants to organisations that promote social justice, education, health, and community development, both in the UK and selected international locations.

We aim to support initiatives that empower communities, promote well-being, and foster social cohesion in accordance with our values, the legislative rules of Zakat and principles of good community service. We have three key drivers as we continue our growth as a donor advised fund, and are seeking to ensure every pound we spend is in line with our strategic priorities, which we have identified as:

During the year, we focused on the following key activities:

MERCY MISSION UK

TRUSTEES' REPORT (INCLUDING DIRECTOR'S REPORT) (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023

Structure, governance and management

The charity is a company limited by guarantee and incorporated under the Companies Act 2006. The company’s governing document is its Articles of Association. The companies charity number is 1122922 with its company number of 06380231.

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:

Mr M S Ikram Ms F Mohammad Mr I Mansha Ms Z A Kidwai (Appointed 23 January 2023)

None of the trustees has any beneficial interest in the company. All of the trustees are members of the company and guarantee to contribute £1 in the event of a winding up.

The charity is governed by a board of Trustees who meet regularly to oversee operations, ensure compliance with regulatory requirements, and guide the strategic direction of the organisation. The board seeks to meet on a quarterly cycle and seeks to ensure more regular oversight through a monthly Chairman-CEO engagement. This enables optimal agility and for the organisation to take a balanced approach to taking advantage of opportunities that emerge while staying focussed on its strategic plan.

Our financial management practices ensure transparency and accountability. The charity’s accounts are independently audited, and we adhere to the principles set forth by the Charity Commission. At the end of 2023 it was also decided to ensure in the next round of trustee recruitment we secure another finance/ investment professional to join the board as the scale of our finances continue to grow rapidly.

Financial review

The Statement of Financial Activities on page 11 shows a net surplus of £3,903,237 (2022: £1,963,576).

The trustees consider the state of the charity's affairs to be satisfactory.

At the year end, overall reserves totalled £6,476,500 (2022: £2,573,263), The charity retains reserves as a contingency against operational risks and for investment in strategic projects.

Reserves policy

It is the policy of the charity that unrestricted funds which have not been designated for a specific use should be maintained at a level equivalent to between three and six month’s expenditure. The trustees consider that reserves at this level will ensure that, in the event of a significant drop in funding, they will be able to continue the charity’s current activities while consideration is given to ways in which additional funds may be raised. This level of reserves has been maintained throughout the year.

Plans for future periods

Looking ahead, we aim to:

MERCY MISSION UK

TRUSTEES' REPORT (INCLUDING DIRECTOR'S REPORT) (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023

We have successfully added some key talent to the board advisory and through 2023 we were able to see the amazing benefit of some of the country’s leading talent.

We are committed to adding at least two new trustees to the board in 2024 who are highly skilled and strengthen our board competency in technology, human resources and finances/ investments.

Statement of Trustees' responsibilities

The trustees, who are also the directors of MERCY MISSION UK for the purpose of company law, are responsible for preparing the Trustees' 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 which give a true and fair view of the state of affairs of the charity and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that year.

In preparing these financial statements, the trustees are required to:

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

Auditor

In accordance with the company's articles, a resolution proposing that Pearlman Rose be reappointed as auditor of the company will be put at a General Meeting.

Disclosure of information to auditor

Each of the trustees has confirmed that there is no information of which they are aware which is relevant to the audit, but of which the auditor is unaware. They have further confirmed that they have taken appropriate steps to identify such relevant information and to establish that the auditor is aware of such information.

The Trustees' report was approved by the Board of Trustees.

Mr M S Ikram Trustee

29 October 2024

MERCY MISSION UK

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MERCY MISSION UK

Opinion

We have audited the financial statements of MERCY MISSION UK (the ‘charity’) 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 charity 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

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 charity’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:

MERCY MISSION UK

INDEPENDENT AUDITOR'S REPORT (CONTINUED) TO THE MEMBERS OF MERCY MISSION UK

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the charity 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:

Responsibilities of trustees

As explained more fully in the statement of Trustees' responsibilities, the trustees, who are also the directors of the charity 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 charity’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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

We gained an understanding of the legal and regulatory framework applicable to the Trust and the charitable sector in which it operates, and considered the risk of acts by the Trust that were contrary to applicable laws and regulations, including fraud. We designed audit procedures to respond to the risk, recognising that 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.

We focused on laws and regulations which could give rise to a material misstatement in the financial statements, including, but not limited to, the Companies Act 2006 and UK Charity legislation. Our tests included agreeing the financial statement disclosures to underlying supporting documentation, enquiries with management and enquiries of legal professionals. 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. We did not identify any key audit matters relating to irregularities, including fraud. As in all our audits, we also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.

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.

MERCY MISSION UK

INDEPENDENT AUDITOR'S REPORT (CONTINUED) TO THE MEMBERS OF MERCY MISSION UK

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.

.............................................. Mohammad Jilani (Senior Statutory Auditor) 30 October 2024 for and on behalf of Pearlman Rose

Chartered Accountants & Statutory Auditor

Suite 1, First Floor Jack Dash House 2 Lawn House Close London E14 9YQ

MERCY MISSION UK

STATEMENT OF FINANCIAL ACTIVITIES

FOR THE YEAR ENDED 31 DECEMBER 2023

Unrestricted
funds
2023
Notes
£
Income from:
Donations and legacies
3
701,593
Charitable activities
4
237,249
Investments
5
54,108
Total income and
endowments
992,950
Expenditure on:
Raising funds
6
-
Charitable activities
7
717,312
Other expenditure
12
-
Total expenditure
717,312
Net income and movement in
funds
275,638
Reconciliation of funds:
Fund balances at 1 January 2023
327,410
Fund balances at 31 December
2023
603,048		 Restricted
Endowment
funds
funds
2023
2023
£
£
15,614,336
50,010
171,331
-
-
-
15,785,667
50,010
25,951
-
12,126,083
-
56,044
-
12,208,078
-
3,577,589
50,010
2,245,853
-
5,823,442
50,010		 Total
2023
£
16,365,939
408,580
54,108
16,828,627
25,951
12,843,395
56,044
12,925,390
3,903,237
2,573,263
6,476,500		 Total
2022
£
11,705,866
1,106,777
13,645
12,826,288
178,392
10,684,320
-
10,862,712
1,963,576
609,687
2,573,263

The statement of financial activities includes all gains and losses recognised in the year. All income and expenditure derive from continuing activities.

MERCY MISSION UK

BALANCE SHEET

AS AT 31 DECEMBER 2023

Notes
Fixed assets
Intangible assets
14
Tangible assets
15
Investments
16
Current assets
Debtors
17
Cash at bank and in hand
Creditors: amounts falling due within
one year
19
Net current assets
Total assets less current liabilities
Creditors: amounts falling due after
more than one year
20
Net assets
The funds of the charity
Endowment funds
22
Restricted income funds
23
Unrestricted funds		 2023
£
£
20,433
1,501,953
325,010
1,847,396
19,810
6,033,679
6,053,489
410,377
5,643,112
7,490,508
(1,014,008)
6,476,500
50,010
5,823,442
603,048
6,476,500		 2022
£
£
20,433
1,403,775
-
1,424,208
37,584
2,118,116
2,155,700
165,797
1,989,903
3,414,111
(840,848)
2,573,263
-
2,245,853
327,410
2,573,263

The financial statements were approved by the trustees on 29 October 2024

Mr M S Ikram Trustee

Company registration number 06380231 (England and Wales)

MERCY MISSION UK

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2023

Notes
Cash flows from operating activities
Cash generated from operations
27
Investing activities
Purchase of intangible assets
Purchase of tangible fixed assets
Purchase of investments
Investment income received
Net cash (used in)/generated from
investing activities
Financing activities
Proceeds from new bank loans
Repayment of bank loans
Net cash generated from/(used in)
financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year		 2023
£
£
4,123,935
-
(110,000)
(325,010)
54,108
(380,902)
237,321
(64,791)
172,530
3,915,563
2,118,116
6,033,679		 2022
£
£
1,951,489
(7,847)
(1,744)
-
13,645
4,054
-
(64,791)
(64,791)
1,890,752
227,364
2,118,116

MERCY MISSION UK

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023

1 Accounting policies

Charity information

MERCY MISSION UK is a private company limited by guarantee incorporated in England and Wales. The registered office is 203 Westgate, Bradford, BD1 3AD, England.

1.1 Accounting convention

The financial statements have been prepared in accordance with the charity's governing document, the Companies Act 2006, FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the Charities SORP "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 charity is a Public Benefit Entity as defined by FRS 102.

The financial statements are prepared in sterling, which is the functional currency of the charity. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.2 Going concern

At the time of approving the financial statements, the trustees have a reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future. Thus the trustees continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3 Charitable funds

Unrestricted funds are available for use at the discretion of the trustees in furtherance of their charitable objectives.

Restricted funds are subject to specific conditions by donors or grantors 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.

Endowment funds are subject to specific conditions by donors that the capital must be maintained by the charity.

1.4 Income

Income is recognised when the charity is legally entitled to it after any performance conditions have been met, the amounts can be measured reliably, and it is probable that income will be received.

Cash donations are recognised on receipt. Other donations are recognised once the charity has been notified of the 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.

Legacies are recognised on receipt or otherwise if the charity has been notified of an impending distribution, the amount is known, and receipt is expected. If the amount is not known, the legacy is treated as a contingent asset.

Income that is generated in Ramadan and not expended during the accounting period is carried forward as a surplus and expended in the following accounting period.

MERCY MISSION UK

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023

1 Accounting policies

(Continued)

1.5 Expenditure

Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit to a third party, it is probable that a transfer of economic benefits will be required in settlement, and the amount of the obligation can be measured reliably.

Expenditure is classified by activity. The costs of each activity are made up of the total of direct costs and shared costs, including support costs involved in undertaking each activity. Direct costs attributable to a single activity are allocated directly to that activity. Shared costs which contribute to more than one activity and support costs which are not attributable to a single activity are apportioned between those activities on a basis consistent with the use of resources. Central staff costs are allocated on the basis of time spent, and depreciation charges are allocated on the portion of the asset’s use.

1.6 Research and development expenditure

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

1.7 Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation 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:

Development costs No amortisation

1.8 Tangible fixed assets

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:

Freehold land and buildings Not depreciated Fixtures and fittings 20-33% straight line basis

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.

1.9 Fixed asset investments

Fixed asset investments are initially measured at transaction price excluding transaction costs, and are subsequently measured at fair value at each reporting date. Changes in fair value are recognised in net income/(expenditure) for the year. Transaction costs are expensed as incurred.

MERCY MISSION UK

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023

1 Accounting policies

(Continued)

1.10 Impairment of fixed assets

At each reporting end date, the charity reviews the carrying amounts of its tangible and intangible 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).

1.11 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, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.12 Financial instruments

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 in the charity's balance sheet when the charity becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, 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

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.

Basic financial liabilities

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.

Derecognition of financial liabilities

Financial liabilities are derecognised when the charity’s contractual obligations expire or are discharged or cancelled.

1.13 Employee benefits

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.

MERCY MISSION UK

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023

1 Accounting policies

(Continued)

1.14 Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

2 Critical accounting estimates and judgements

In the application of the charity’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.

3 Income from donations and legacies

Unrestricted
funds
2023
£
Donations and gifts
701,593
Unrestricted
funds
2022
£
Donations and gifts
433,251
433,251		 Restricted
Endowment
funds
funds
2023
2023
£
£
15,614,336
50,010
Restricted
Endowment
funds
funds
2022
2022
£
£
11,272,615
-
11,272,615
-		 Total
2023
£
16,365,939
Total
2022
£
11,705,866
11,705,866

MERCY MISSION UK

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023

4 Income from charitable activities

Unrestricted
Restricted
funds
funds
2023
2023
£
£
Services provided under
contract
237,249
-
Charitable rental income
-
171,331
237,249
171,331		 Total
Unrestricted
Restricted
funds
funds
2023
2022
2022
£
£
£
237,249
957,671
-
171,331
-
149,106
408,580
957,671
149,106		 Total
2022
£
957,671
149,106
1,106,777

5 Income from investments

Unrestricted Unrestricted
funds funds
2023 2022
£ £
Licence income - 10,847
Interest receivable 54,108 2,798
54,108 13,645
Expenditure on raising funds
Restricted Restricted
funds funds
2023 2022
£ £
Fundraising and publicity
Fundraising agents 25,951 178,392

6 Expenditure on raising funds

MERCY MISSION UK

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023

7 Expenditure on charitable activities

Direct costs
Staff costs
Depreciation and impairment
Subcontractor costs
Rent and rates
Telecommunications
Travel
Information technology
Subscriptions
Advertising
Printing and stationery
Legal and professional
Consultancy
Accountancy
Audit
Admin and finance
Programme cost
Research and development
Bank charges
General expenses
Merchant charges
Exchange rate differences
Building insurance
Building repairs
Property maintenance
Grant funding of activities (see note 8)
Analysis by fund
Unrestricted funds
Restricted funds		 Total
2023
£
71,545
11,822
232,476
28,777
191
52,281
44,683
3,729
368,116
1,988
33,057
166,645
7,200
10,800
162,749
142,020
138,188
2,621
9,005
-
-
17,314
17,063
14,282
1,536,552
11,306,843
12,843,395
717,312
12,126,083
12,843,395		 Total
2022
£
66,693
11,554
22,010
5,600
433
17,883
-
3,057
75,615
980
105,309
145,731
4,550
10,764
19,882
-
830
13,331
2,361
(15,843)
14,358
15,965
822
521,885
10,162,435
10,684,320
1,267,104
9,417,216
10,684,320

MERCY MISSION UK

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023

8
Grants payable
Grants to institutions:
Other
Grants to individuals
9
Net movement in funds
Net movement in funds is stated after charging/(crediting)
Depreciation of owned tangible fixed assets		 2023
£
11,298,632
8,211
2023
£
11,822		 2022
£
10,150,775
11,660
2022
£
11,554

10 Trustees

None of the trustees (or any persons connected with them) received any remuneration or benefits from the charity during the year. 11 Employees

The average monthly number of employees during the year was:

Employment costs
Wages and salaries
Social security costs
Other pension costs		 2023
Number
3
2023
£
60,083
9,727
1,735
71,545		 2022
Number
3
2022
£
65,653
964
76
66,693

There were no employees whose annual remuneration was more than £60,000.

Remuneration of key management personnel

The remuneration of key management personnel is as follows.

MERCY MISSION UK

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023

12 Other expenditure

Restricted Restricted
funds funds
2023 2022
£ £
Financing costs 56,044 -
56,044 -

13 Taxation

The charity is exempt from taxation on its activities because all its income is applied for charitable purposes.

14 Intangible fixed assets

Intangible fixed assets
Development
costs
£
Cost
At 1 January 2023 and 31 December 2023 20,433
Amortisation and impairment
At 1 January 2023 and 31 December 2023 -
Carrying amount
At 31 December 2023 20,433
At 31 December 2022 20,433

MERCY MISSION UK

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023

15 Tangible fixed assets

Freehold land
and buildings
Fixtures and
fittings
£
£
Cost
At 1 January 2023
1,360,000
75,031
Additions
110,000
-
At 31 December 2023
1,470,000
75,031
Depreciation and impairment
At 1 January 2023
-
31,256
Depreciation charged in the year
-
11,822
At 31 December 2023
-
43,078
Carrying amount
At 31 December 2023
1,470,000
31,953
At 31 December 2022
1,360,000
43,775		 Total
£
1,435,031
110,000
1,545,031
31,256
11,822
43,078
1,501,953
1,403,775

The trustees are of the opinion that the carrying value of the freehold property carried forward is materially correct as at the balance sheet date.

16 Fixed asset investments

Other
investments
Cost or valuation
At 1 January 2023 -
Additions 325,010
At 31 December 2023 325,010
Carrying amount
At 31 December 2023 325,010
At 31 December 2022 -

MERCY MISSION UK

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2023

17 Debtors

Amounts falling due within one year:
Trade debtors
Other debtors
Prepayments and accrued income		 2023
£
9,569
-
10,241
19,810		 2022
£
7,399
30,010
175
37,584

18 Loans and overdrafts

Loans and overdrafts
Bank loans
Payable within one year
Payable after one year		 2023
£
1,078,169
64,161
1,014,008		 2022
£
905,639
64,791
840,848

The long-term loans contain a negative pledge and are secured by way of a fixed charge over the assets of the company.

19 Creditors: amounts falling due within one year

Notes
Bank loans
18
Other taxation and social security
Trade creditors
Other creditors
Accruals and deferred income
Creditors: amounts falling due after more than one year
Notes
Bank loans
18		 2023
£
64,161
18,077
185,139
125,000
18,000
410,377
2023
£
1,014,008		 2022
£
64,791
5,505
81,161
76
14,264
165,797
2022
£
840,848

20 Creditors: amounts falling due after more than one year

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023

MERCY MISSION UK

21 Retirement benefit schemes

Defined contribution schemes

The charity operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the charity in an independently administered fund.

The charge to profit or loss in respect of defined contribution schemes was £1,735 (2022 - £76).

22 Endowment funds

Endowment funds represent assets which must be held permanently by the charity. Income arising on the endowment funds can be used in accordance with the objects of the charity and is included as unrestricted income. Any capital gains or losses arising on the assets form part of the fund.

At 1 January Incoming At 31
2023 resources December
2023
£ £ £
Permanent endowments
Waqf - 50,010 50,010

23 Restricted funds

The restricted funds of the charity comprise the unexpended balances of donations and grants held on trust subject to specific conditions by donors as to how they may be used.

At 1 January
2023
£
Waqf
38,000
FiG
326,832
Rasullah
54,908
Shamaazi
1,677,828
Creative lofts - rental income
149,107
Restricted funds <50,000
(822)
Other venture funds
-
2,245,853		 Incoming
resources
Resources
expended
£
£
-
-
-
(3,067)
-
-
15,614,336
(12,179,060)
171,331
(25,951)
-
-
-
-
15,785,667
(12,208,078)		 Transfers
£
(38,000)
-
(54,908)
37,086
(170,000)
822
225,000
-		 At 31
December
2023
£
-
323,765
-
5,150,190
124,487
-
225,000
5,823,442

MERCY MISSION UK

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023

23
Restricted funds
Previous year:
At 1 January
2022
£
Waqf
38,000
FiG
326,832
Rasullah
54,908
Shamaazi
-
Creative lofts - rental income
-
Restricted funds < £50,000
-
419,740		 Incoming
resources
£
-
-
-
11,272,614
149,107
-
11,421,721		 Resources
expended
£
-
-
-
(9,594,786)
-
(822)
(9,595,608)		 (Continued)
Transfers
At 31
December
2022
£
£
-
38,000
-
326,832
-
54,908
-
1,677,828
-
149,107
-
(822)
-
2,245,853

24 Unrestricted funds

The unrestricted funds of the charity comprise the unexpended balances of donations and grants which are not subject to specific conditions by donors and grantors as to how they may be used. These include designated funds which have been set aside out of unrestricted funds by the trustees for specific purposes.

At 1 January
2023
£
General funds
327,410
Previous year:
At 1 January
2022
£
General funds
189,947
25
Analysis of net assets between funds
Unrestricted
funds
2023
£
Fund balances at 31 December 2023 are represented by:
Intangible fixed assets
20,433
Tangible assets
31,953
Investments
-
Current assets/(liabilities)
550,662
Long term liabilities
-
603,048		 Incoming
resources
Resources
expended
£
£
992,950
(717,312)
Incoming
resources
Resources
expended
£
£
1,404,567
(1,267,104)
Restricted
Endowment
funds
funds
2023
2023
£
£
-
-
1,470,000
-
275,000
50,010
5,092,450
-
(1,014,008)
-
5,823,442
50,010		 At 31
December
2023
£
603,048
At 31
December
2022
£
327,410
Total
2023
£
20,433
1,501,953
325,010
5,643,112
(1,014,008)
6,476,500

MERCY MISSION UK

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2023

25 Analysis of net assets between funds (Continued)
Unrestricted Restricted Endowment Total
funds funds funds
2022 2022 2022 2022
£ £ £ £
Fund balances at 31 December 2022 are represented by:
Intangible fixed assets 20,433 - - 20,433
Tangible assets 43,775 1,360,000 - 1,403,775
Current assets/(liabilities) 263,202 1,726,701 - 1,989,903
Long term liabilities - (840,848) - (840,848)
327,410 2,245,853 - 2,573,263
26 Related party transactions
There were no disclosable related party transactions during the year (2022 - none).
27 Cash generated from operations 2023 2022
£ £
Surplus for the year 3,903,237 1,963,576
Adjustments for:
Investment income recognised in statement of financial activities (54,108) (13,645)
Depreciation and impairment of tangible fixed assets 11,822 11,554
Movements in working capital:
Decrease/(increase) in debtors 17,774 (31,632)
Increase in creditors 245,210 21,636
Cash generated from operations 4,123,935 1,951,489
28 Analysis of changes in net funds
At 1 January **Cash flows ** At 31 December
2023 2023
£ £ £
Cash at bank and in hand 2,118,116 3,915,563 6,033,679
Loans falling due within one year (64,791) 630 (64,161)
Loans falling due after more than one year (840,848) (173,160) (1,014,008)
1,212,477 3,743,033 4,955,510