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← Mercy Mission UK

2024-12-31-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 2024

PEARLMAN ROSE

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

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MERCY MISSION UK

LEGAL AND ADMINISTRATIVE INFORMATION

Trustees Mr M S Ikram Ms F A Mohammad Ms Z A Kidwai 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

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MERCY MISSION UK

CONTENTS

Page
Chairman's statement 1
Trustees' report 2 - 5
Statement of Trustees' responsibilities 6
Independent auditor's report 7 - 9
Statement of financial activities 10
Balance sheet 11
Statement of cash flows 12
Notes to the financial statements 13 - 25

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MERCY MISSION UK

CHAIRMAN'S STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2024

Foreword

Despite the horrific challenges of 2024, Mercy Mission UK has continued to stand firm in its mission to serve the needy—both within our country and across the world. In times marked by uncertainty, economic strain, and humanitarian crises, we have remained unwavering in our belief that compassion, collaboration, and faith can light even the darkest of paths.

Over the past year, British Muslim civil society has shown remarkable resilience and maturity. What began as a modest network of charitable initiatives has now evolved into a sophisticated landscape of organisations, community associations, advocacy groups, and social enterprises. Together, they represent a vibrant ecosystem of service and hope, one that contributes positively and visibly to the fabric of modern British society. We have been honoured to work alongside many of these institutions—supporting their missions, strengthening their capacity, and learning from their incredible examples of dedication and integrity.

For Mercy Mission UK, 2024 was a year of both challenge and triumph. We were privileged to extend unprecedented levels of support to countless charitable endeavours led by British Muslims, empowering communities to respond to need with professionalism and purpose. Every grant made, every partnership forged, and every initiative launched was guided by our founding vision—to make faith a force for good in society.

As Chairman, I have sought to ensure that we continue to coordinate with all key stakeholders across the sector, encouraging collaboration, transparency, and shared learning. Our role is not only to strengthen Muslim organisations, but also to enhance the impact they have on the wider society they serve. I believe deeply that our success will be measured not simply in what we achieve as a community, but in how our actions uplift all those around us—Muslim and non-Muslim alike.

My fellow Trustees share this conviction wholeheartedly. Each brings a unique set of experiences and skills, united by a common goal: to build a more connected, capable, and confident community infrastructure for the future. Together, we strive to bring diverse actors around one table—to listen, to learn, and to lead collectively toward a stronger, fairer, and more compassionate Britain.

Looking ahead, we remain hopeful. The challenges of recent years have tested us, but they have also revealed our capacity for innovation and resilience. In 2025, we will redouble our efforts to serve with excellence, humility, and courage. We will also be expanding our leadership, inviting new Trustees and partners to join us in this vital work. The road ahead will demand creativity and unity, and we are determined to rise to the moment.

As always, we pray that Allah continues to guide our efforts, bless our partners, and enable Mercy Mission UK to be a source of light, hope, and lasting impact in the world.

.............................. Mr M S Ikram Chairman 31 / 10 / 2025 Date: .........................

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MERCY MISSION UK

TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) FOR THE YEAR ENDED 31 DECEMBER 2024

The trustees present their annual report and financial statements for the year ended 31 December 2024.

Introduction

The Trustees of Mercy Mission UK are pleased to present their report for the year 2024. This has been a year of exceptional progress and impact, defined by deepened partnerships, meaningful investment in community infrastructure, and the strengthening of the institutions that form the backbone of Muslim civil society in Britain.

At the heart of all our work remains the guiding vision of Mercy Mission UK: to empower the British Muslim community to be a source of good for humanity . Through capacity building, research, leadership development and philanthropic innovation, we continue to nurture the ecosystem of social impact organisations and leaders that sustain this vision.

1. Expanding Our Impact: Grants to 130 Charities

In 2025, Mercy Mission UK distributed grants to 130 charitable organisations across the United Kingdom, spanning a diverse range of causes—from poverty alleviation and mental health support, to education, youth leadership and refugee resettlement.

This milestone demonstrates not only the breadth of our engagement but also the trust placed in Mercy Mission UK as a responsible steward of donor funds. Each grant was made following careful due diligence and a commitment to long-term capacity building. Beyond funding, we continued to provide advisory support and facilitate collaboration between grantees, ensuring that resources translate into measurable and sustainable community outcomes.

Through this network of 130 grantees, Mercy Mission UK is helping shape a more connected and confident British Muslim civil society—one that is responsive, transparent, and accountable.

2. A Global Partnership: Launching the Muslim Impact Forum

This year also marked a defining step forward in Mercy Mission UK’s international engagement. We successfully entered into a strategic partnership with the Global Donors Forum , one of the world’s leading conveners of Muslim philanthropists, to launch the Muslim Impact Forum .

The Forum represents a pioneering space for dialogue and coordination among high-impact Muslim donors, foundations, and social investors. Its purpose is to align global philanthropic capital with the most pressing social and humanitarian challenges of our time, while amplifying the voice of Muslim philanthropy within the global social finance ecosystem.

Mercy Mission UK’s leadership in co-designing and hosting the Forum reaffirms our commitment to ensuring that Muslim philanthropy is not only generous, but also strategic, data-driven, and aligned to the Sustainable Development Goals and broader ESG frameworks.

3. Seeding the Future: The Launch of Equi

Another landmark achievement this year was the seed funding of Equi , the first British Muslim policy-focused think tank .

Recognising that true social progress requires representation not only in charity and service delivery, but also in the shaping of public policy, Mercy Mission UK took the initiative to invest in Equi’s establishment. This new institution will provide independent, evidence-based research and policy recommendations that address the needs and aspirations of Britain’s Muslim communities.

By supporting Equi, we are helping to elevate informed discourse, strengthen democratic participation, and ensure that the British Muslim perspective contributes constructively to national debates on equality, inclusion and opportunity.

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MERCY MISSION UK

TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024

4. Strengthening Understanding: The British Muslim Civil Society Report

Mercy Mission UK’s British Muslim Civil Society Report 2024 represents another milestone in our commitment to data-led strategy and impact measurement. The report—developed in collaboration with academic partners and sector experts—offers a comprehensive analysis of the needs, assets, and successes of British Muslim organisations nationwide.

The findings are both encouraging and instructive. They show a community of civic actors who are increasingly professionalised, innovative, and outward-looking. At the same time, they highlight continued gaps in infrastructure, governance capacity, and access to mainstream funding.

This work has reaffirmed Mercy Mission UK’s central role as a knowledge leader in the field of Muslim civil society development, helping both donors and institutions make better-informed decisions for the collective good.

5. Investing in People: The Future Leaders Program

We were delighted to welcome another cohort of high-performing young Muslim professionals into the Future Leaders Program —our flagship leadership development initiative.

Through structured mentorship, experiential learning, and exposure to best practice in governance and social entrepreneurship, the program continues to nurture a new generation of Muslim leaders equipped to serve with integrity, excellence, and a global outlook.

The alumni network now represents one of the most dynamic communities of purpose-driven Muslim professionals in the UK, many of whom are already leading charitable, corporate, and public sector institutions.

Civil Society at the Heart of Our Mission

The Trustees reaffirm that the development of British Muslim civil society remains at the core of Mercy Mission UK’s purpose. Strong, transparent, and collaborative institutions are essential for lasting social change. Our work therefore extends beyond charity—to building the infrastructure of collective action, thought leadership, and ethical stewardship that underpin a flourishing civil society.

We take pride in being a bridge between donors and implementers, between local communities and national frameworks, and between faith inspiration and professional execution.

Philanthropic Innovation: The Donor Advised Fund

This year also saw remarkable progress in the growth and refinement of Mercy Mission UK’s Donor Advised Fund (DAF) facility . The DAF has provided donors with a trusted, compliant, and efficient platform to manage their giving strategically—enabling both immediate charitable disbursements and long-term impact planning.

All legal and regulatory updates required to optimise the DAF’s operation have been completed, ensuring continued alignment with Charity Commission and HMRC guidance. The Trustees commend the team for building one of the most transparent and user-friendly faith-based donor vehicles in the sector.

This facility now stands as a cornerstone of our wider ambition: to create an intelligent ecosystem for Muslim philanthropy that combines spiritual motivation with professional excellence.

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MERCY MISSION UK

TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024

Looking Ahead

As we reflect on this remarkable year, the Trustees express their gratitude to our donors, partners, volunteers, and team members. Each of our achievements—whether the launch of a global forum, the founding of a new think tank, or the development of a new leader—speaks to a collective commitment to service.

In the coming year, Mercy Mission UK will continue to expand its strategic grantmaking, enhance the DAF offering, and invest further in research and leadership. Our direction is clear: to help shape a resilient, values-driven Muslim civil society that contributes meaningfully to Britain and the wider world.

Together, we remain, as ever, making waves in social impact .

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:

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 A Mohammad Mr I Mansha (Resigned 31 December 2024) Ms Z A Kidwai

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.

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MERCY MISSION UK

TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024

Financial review

The Statement of Financial Activities on page 11 shows a net surplus of £1,832,765 (2023: £3,903,237).

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

At the year end, overall reserves totalled £8,309,265 (2023: £6,476,500). 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.

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

31 / 10 / 2025 Date: .............................................

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MERCY MISSION UK

STATEMENT OF TRUSTEES' RESPONSIBILITIES

FOR THE YEAR ENDED 31 DECEMBER 2024

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.

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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 2024 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:

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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.

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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.

.............................................. fect Yor

..............................................

Mohammad Jilani (Senior Statutory Auditor) 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

31 / 10 / 2025

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MERCY MISSION UK

STATEMENT OF FINANCIAL ACTIVITIES

FOR THE YEAR ENDED 31 DECEMBER 2024

Unrestricted
funds
2024
Notes
£
Income from:
Donations and legacies
3
1,017,797
Charitable activities
4
605,977
Investments
5
85,495
Total income and
endowments
1,709,269
Expenditure on:
Raising funds
6
-
Charitable activities
7
1,068,057
Other expenditure
12
-
Total expenditure
1,068,057
Net income and movement in
funds
641,212
Reconciliation of funds:
Fund balances at 1 January 2024
603,048
Fund balances at 31 December
2024
1,244,260		 Restricted
Endowment
funds
funds
2024
2024
£
£
21,614,935
-
170,470
-
-
-
21,785,405
-
-
-
20,446,634
-
142,380
-
20,589,014
-
1,196,391
-
5,823,442
50,010
7,019,833
50,010		 Total
2024
£
22,632,732
776,447
85,495
23,494,674
-
21,514,691
142,380
21,657,071
1,837,603
6,476,500
8,314,103		 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

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

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MERCY MISSION UK

BALANCE SHEET

AS AT 31 DECEMBER 2024

2024 2023 2023
Notes £ £ £ £
Fixed assets
Intangible assets 14 13,622 20,433
Tangible assets 15 1,748,141 1,501,953
Investments 16 2,620,191 325,010
4,381,954 1,847,396
Current assets
Debtors 17 115,531 19,810
Cash at bank and in hand 5,124,945 6,033,679
5,240,476 6,053,489
Creditors: amounts falling due within 19
one year (343,946) (410,377)
Net current assets 4,896,530 5,643,112
Total assets less current liabilities 9,278,484 7,490,508
Creditors: amounts falling due after
more than one year 20 (964,381) (1,014,008)
Net assets 8,314,103 6,476,500
The funds of the charity
Endowment funds 22 50,010 50,010
Restricted income funds 23 7,019,833 5,823,442
Unrestricted funds 24 1,244,260 603,048
8,314,103 6,476,500

The financial statements were approved by the trustees on ......................... 31 / 10 / 2025 .............................. wie Mr M S Ikram Trustee

Company registration number 06380231 (England and Wales)

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MERCY MISSION UK

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2024

2024
Notes
£
£
Cash flows from operating activities
Cash generated from operations
27
1,605,381
Investing activities
Purchase of tangible fixed assets
(258,010)
Purchase of investments
(2,295,181)
Investment income received
85,495
Net cash used in investing activities
(2,467,696)
Financing activities
Proceeds from new bank loans
-
Repayment of bank loans
(46,419)
Net cash (used in)/generated from
financing activities
(46,419)
Net (decrease)/increase in cash and cash
equivalents
(908,734)
Cash and cash equivalents at beginning of year
6,033,679
Cash and cash equivalents at end of year
5,124,945		 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

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MERCY MISSION UK

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

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.

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MERCY MISSION UK

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024

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 3-4 years straight line

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.

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MERCY MISSION UK

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024

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.

Doc ID: b3bef56d60ee3f1d49c3689c9eb3d57696683a55

MERCY MISSION UK

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024

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
2024
£
Donations and gifts
1,017,797
Unrestricted
funds
2023
£
Donations and gifts
701,593
701,593		 Restricted
funds
2024
£
21,614,935
Restricted
funds
2023
£
15,614,336
15,614,336		 Total
2024
£
22,632,732
Total
2023
£
16,365,939
16,365,939

Doc ID: b3bef56d60ee3f1d49c3689c9eb3d57696683a55

MERCY MISSION UK

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024

4 Income from charitable activities

Unrestricted
Restricted
funds
funds
2024
2024
£
£
Services provided under
contract
605,977
-
Charitable rental income
-
170,470
605,977
170,470		 Total
Unrestricted
Restricted
funds
funds
2024
2023
2023
£
£
£
605,977
237,249
-
170,470
-
171,331
776,447
237,249
171,331		 Total
2023
£
237,249
171,331
408,580

5 Income from investments

Unrestricted Unrestricted
funds funds
2024 2023
£ £
Interest receivable 85,495 54,108
6 Expenditure on raising funds
Restricted Restricted
funds funds
2024 2023
£ £
Fundraising and publicity
Fundraising agents - 25,951

Doc ID: b3bef56d60ee3f1d49c3689c9eb3d57696683a55

MERCY MISSION UK

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024

7 Expenditure on charitable activities

Direct costs
Staff costs
Depreciation and amortisation
Subcontractor costs
Rent and rates
Telecommunications
Travel
Information technology
Subscriptions
Advertising
Printing and stationery
Legal and professional
Consultancy
Accountancy
Audit
Admin and finance
Bank charges
General expenses
Exchange rate differences
Building insurance
Building repairs
Property maintenance
Grant funding of activities (see note 8)
Analysis by fund
Unrestricted funds
Restricted funds		 Total
2024
£
129,672
18,633
1
47,401
264
114,707
185,534
11,920
372,337
1,608
449,786
526,201
7,200
10,800
1,111,827
4,872
143,476
163,607
16,583
7,680
13,142
3,337,251
18,177,440
21,514,691
1,068,057
20,446,634
21,514,691		 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
2,621
9,005
-
17,314
17,063
14,282
1,256,344
11,306,843
12,563,187
717,312
12,126,083
12,843,395

8 Grants payable

2024 2023
£ £
Grants to institutions:
Other 18,166,440 11,298,632
Grants to individuals 11,000 8,211

Doc ID: b3bef56d60ee3f1d49c3689c9eb3d57696683a55

MERCY MISSION UK

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024

8 Grants payable (Continued)
9 Net movement in funds 2024 2023
£ £
The net movement in funds is stated after charging/(crediting):
Fees payable for the audit of the charity's financial statements 10,800 10,800
Depreciation of owned tangible fixed assets 11,822 11,822
Amortisation of intangible assets 6,811 -

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		 2024
Number
4
2024
£
119,078
8,295
2,299
129,672		 2023
Number
3
2023
£
60,083
9,727
1,735
71,545

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

Remuneration of key management personnel

The remuneration of key management personnel was as follows:

12 Other expenditure

Restricted Restricted
funds funds
2024 2023
£ £
Financing costs 142,380 56,044
142,380 56,044

Doc ID: b3bef56d60ee3f1d49c3689c9eb3d57696683a55

MERCY MISSION UK

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024

13 Taxation

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

14 Intangible fixed assets

Development
costs
£
Cost
At 1 January 2024 and 31 December 2024 20,433
Amortisation and impairment
At 1 January 2024 -
Amortisation charged for the year 6,811
At 31 December 2024 6,811
Carrying amount
At 31 December 2024 13,622
At 31 December 2023 20,433

15 Tangible fixed assets

Freehold land
and buildings
Fixtures and
fittings
£
£
Cost
At 1 January 2024
1,470,000
75,031
Additions
258,010
-
At 31 December 2024
1,728,010
75,031
Depreciation and impairment
At 1 January 2024
-
43,078
Depreciation charged in the year
-
11,822
At 31 December 2024
-
54,900
Carrying amount
At 31 December 2024
1,728,010
20,131
At 31 December 2023
1,470,000
31,953		 Total
£
1,545,031
258,010
1,803,041
43,078
11,822
54,900
1,748,141
1,501,953

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.

Doc ID: b3bef56d60ee3f1d49c3689c9eb3d57696683a55

MERCY MISSION UK

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024

16 Fixed asset investments

Cost or valuation
At 1 January 2024
Additions
At 31 December 2024
Carrying amount
At 31 December 2024
At 31 December 2023
17
Debtors
Amounts falling due within one year:
Trade debtors
Prepayments and accrued income
18
Loans and overdrafts
Bank loans
Payable within one year
Payable after one year		 Other
investments
£
325,010
2,295,181
2,620,191
2,620,191
325,010
2024
2023
£
£
100,866
9,569
14,665
10,241
115,531
19,810
2024
2023
£
£
1,031,750
1,078,169
67,369
64,161
964,381
1,014,008

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

Doc ID: b3bef56d60ee3f1d49c3689c9eb3d57696683a55

MERCY MISSION UK

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024

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
20
Creditors: amounts falling due after more than one year
Notes
Bank loans
18
21
Retirement benefit schemes
Defined contribution schemes
Charge to profit or loss in respect of defined contribution schemes		 2024
£
67,369
174
139,403
119,000
18,000
343,946
2024
£
964,381
2024
£
2,299		 2023
£
64,161
18,077
185,139
125,000
18,000
410,377
2023
£
1,014,008
2023
£
1,735

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.

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
Permanent endowments
Waqf
Previous year:
At
Permanent endowments
Waqf		 1 January
2024
Incoming
resources
At 31
December
2024
£
£
£
50,010
-
50,010
1 January
2023
Incoming
resources
At 31
December
2023
£
£
£
-
50,010
50,010

Doc ID: b3bef56d60ee3f1d49c3689c9eb3d57696683a55

MERCY MISSION UK

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024

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
2024
£
Donor Advised Fund (DAF)
5,473,955
Rental income
124,487
Other venture funds
225,000
5,823,442
Previous year:
At 1 January
2023
£
Waqf
38,000
Donor Advised Fund (DAF)
2,004,660
Rasullah
54,908
Rental income
149,107
Restricted funds <50,000
(822)
Other venture funds
-
2,245,853		 Incoming
resources
Resources
expended
£
£
21,614,935
(20,179,812)
170,470
(184,202)
-
(225,000)
21,785,405
(20,589,014)
Incoming
resources
Resources
expended
£
£
-
-
15,614,336
(12,182,127)
-
-
171,331
(25,951)
-
-
-
-
15,785,667
(12,208,078)		 Transfers
£
-
-
-
-
Transfers
£
(38,000)
37,086
(54,908)
(170,000)
822
225,000
-		 At 31
December
2024
£
6,909,078
110,755
-
7,019,833
At 31
December
2023
£
-
5,473,955
-
124,487
-
225,000
5,823,442

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
2024
£
General funds
603,048
Previous year:
At 1 January
2023
£
General funds
327,410		 Incoming
resources
£
1,709,269
Incoming
resources
£
992,950		 Resources
expended
£
(1,068,057)
Resources
expended
£
(717,312)		 At 31
December
2024
£
1,244,260
At 31
December
2023
£
603,048

Doc ID: b3bef56d60ee3f1d49c3689c9eb3d57696683a55

MERCY MISSION UK

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024

25 Analysis of net assets between funds

Unrestricted Restricted Endowment Total
funds funds funds
2024 2024 2024 2024
£ £ £ £
At 31 December 2024:
Intangible fixed assets 13,622 - - 13,622
Tangible assets 20,131 1,728,010 - 1,748,141
Investments - 2,620,191 - 2,620,191
Current assets/(liabilities) 1,210,507 3,636,013 50,010 4,896,530
Long term liabilities - (964,381) - (964,381)
1,244,260 7,019,833 50,010 8,314,103
Unrestricted Restricted Endowment Total
funds funds funds
2023 2023 2023 2023
£ £ £ £
At 31 December 2023:
Intangible fixed assets 20,433 - - 20,433
Tangible assets 31,953 1,470,000 - 1,501,953
Investments - 275,000 50,010 325,010
Current assets/(liabilities) 550,662 5,092,450 - 5,643,112
Long term liabilities - (1,014,008) - (1,014,008)
603,048 5,823,442 50,010 6,476,500

26 Related party transactions

There were no disclosable related party transactions during the year (2023 - none).

27
Cash generated from operations
Surplus for the year
Adjustments for:
Investment income recognised in statement of financial activities
Depreciation and impairment of tangible fixed assets
Movements in working capital:
(Increase)/decrease in debtors
(Decrease)/increase in creditors
Cash generated from operations		 2024
£
1,837,603
(85,495)
18,633
(95,721)
(69,639)
1,605,381		 2023
£
3,903,237
(54,108)
11,822
17,774
245,210
4,123,935

Doc ID: b3bef56d60ee3f1d49c3689c9eb3d57696683a55

MERCY MISSION UK

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024

28
Analysis of changes in net funds
At 1 January
2024
£
Cash at bank and in hand
6,033,679
Loans falling due within one year
(64,161)
Loans falling due after more than one year
(1,014,008)
4,955,510		 Cash flows At 31 December
2024
£
£
(908,734)
5,124,945
(3,208)
(67,369)
49,627
(964,381)
(862,315)
4,093,195

Doc ID: b3bef56d60ee3f1d49c3689c9eb3d57696683a55

Mercy Mission UK - Full AC's Y.E. 31.12.2024
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