2020-08-31-accounts - The Jerusalem Interest-Free Microfinance Fund Limited

This text was generated using OCR and may contain errors. Check the original PDF to see the document submitted to the regulator.

                                                       Company No. 6681463
                                                       Registered in England
                                                             and Wales

`THE JERUSALEM INTEREST FREE MICROFINANCE FUND LIMITED`

`FINANCIAL STATEMENTS`

FOR THE YEAR ENDED 31[ST] AUGUST 2020

FOR THE FOR THE YEAR ENDED 31[ST] AUGUST 2020

`THE JERUSALEM INTEREST FREE MICROFINANCE FUND LIMITED`

`FINANCIAL STATEMENTS`

`Directors and Trustees`

Donald Franklin PhD
Fiyaz Mughal OBE
Rabbi Michael Pollak

`Secretary`

Rabbi Michael Pollak

Charity No.

`Registered Office`

19 The Park
London NW11 7ST

`THE JERUSALEM INTEREST FREE MICROFINANCE FUND LIMITED`

FINANCIAL STATEMENTS FOR THE FOR THE YEAR ENDED 31[ST] AUGUST 2020 I N D E X Page Nos. Report of the directors and trustees 1 Independent examiner’s report 2 Profit and loss account 3 Balance sheet as at 31 August 2020 4 Notes to the accounts 5 ****** ****** ******

Page 1

THE JERUSALEM INTEREST FREE MICROFINANCE FUND LIMITED

`REPORT OF THE DIRECTORS AND TRUSTEES`

The directors and trustees have pleasure in presenting their report and
financial statements for the year ended 31[st] August 2020.

The accounts have been prepared in accordance with the accounting policies
as set out in Note 1 of the accounts and comply with the Charity’s governing
document, applicable law and the requirements of the Statement of
Recommended Practice, “Accounting and Reporting by Charities” (SORP 2005)
issued in March 2005.

`Status`

The Charity is a Company limited by guarantee and was incorporated on 26
August 2008 and registered as a charity on 8 January 2009. The Charity
operates from 19 The Park, London NW11 7ST. The Company was established
under a Memorandum of Association which established the objects and powers
of the charitable company and is governed by its Articles of Association.

`Directors and Trustees`

Donald Franklin PhD
Fiyaz Mughal OBE
Rabbi Michael Pollak

`Aims and Organisation`

The relief of financial hardship amongst people in poor communities in
Jerusalem by enabling them to establish and grow their own businesses
through the provision of micro finance and technical assistance.
(Microfinance includes loans and/or equity funding for small enterprises and
or their proprietors as appropriate for the individuals and firms seeking
assistance.)

`Investment and Reserves Policy`

`Risk Factors`

The trustees have taken advantage of the exemption available to charities
with incoming resources of less that £ 500,000 per year, from carrying out a
risk assessment of the charity, a requirement under SORP 2005.

`Developments During 2019/20`

The year under report (2019-20) saw a continuation in JIMF’s activity – with
a similar number of businesswomen (thirtysix) receiving new funding for
their businesses. Growth in the programme has been interrupted by lock-downs
associated with coronavirus. This has both led to a hiatus in the assessment
of business proposals, and to a drop in repayments; the net result was an
accumulation of cash for disbursement as lending activity gets fully under
way again. (It had initially been expected that there would be a call for
emergency loans, but the process of application proved too difficult to
organise in the circumstances for loans of this size, and the best support
that JIMF could offer distressed businesses was simply to allow repayment
schedules to slip by a few months.)

New loans were made to a value of over £113,000 whilst repayments were
£106,000. After provisions and write-offs, loans outstanding exceed
£210,000.

Page 1 Continued

THE JERUSALEM INTEREST FREE MICROFINANCE FUND LIMITED

`REPORT OF THE DIRECTORS AND TRUSTEES – Continued`

`Developments During 2019/20 – Continued`

The programme continues to operation in partnership with MATI Jerusalem, and with a separate partnership with KIVA. As reported previously, there has been an interruption in JIMF’s support to the charedi community; all loans made in the period under report were to the Palestinian community in Jerusalem. To fulfil its objective to offer support also to the Charedi community, JIMF has agreed to support a parallel partnership with MATI to offer loans to charedi women to whom MATI has provided business training. This programme also has been interrupted by coronavirus restrictions, but should revive shortly.

MATI continues to emphasise the importance of the loan programme to motivate and to build upon their business-training in East Jerusalem for disadvantaged women. MATI continues to run a branch in East Jerusalem; they confirm that they have funding for training and post loan support. (Some ear-marked support for this training programme has this year been donated to JIMF and passed onto MATI.)

JIMF and MATI continue to be supported in this work by Rehaam Jaber, a Palestinian lawyer, who runs the East Jerusalem office. Rehaam has built a relationship of trust for JIMF with our Palestinian clients, manifest in a strong repayment record for loans issued since Rehaam was involved (2011). When payments are missed, Rehaam follows up to understand the nature of the problem, and in all cases has secured a recognition of obligation and (with few exceptions) a resumption of repayment. We have agreed policies for moving from persuasion to stronger interventions, in particular to refer the obligation to the guarantors, but our strong preference is to avoid this step, which embarrasses the women, but rather to work with the women so that they themselves can take pride in being able to repay their loans.

JIMF continues to be designated an Experimental Field Partner with Kiva, an NGO that sources funding from hundreds of thousands of individual donors for microfinance organisations. See http://www.kiva.org/partners and linked pages for details, including a reference to JIMF’s partnership. JIMF’s credit limit remains at US$ 50,000. An expansion is under consideration. Four of the new loans issued during 2019/20 have been funded through KIVA.

JIMF continued to be supported by donations from several regular funders.

The businesses and vocations that are being supported by JIMF are diverse. The businesses supported by JIMF in 2019/20 comprised:

Creche (three

Birthday and party products
Bee hives and honey-making
Conditorei
Cosmetics distribution
Clothing imports
Home cooking (two

Home cosmetics and nailbar

Cosmetics centre

`Page 1 Continued`

`THE JERUSALEM INTEREST FREE MICROFINANCE FUND LIMITED`

`REPORT OF THE DIRECTORS AND TRUSTEES - Continued`

`Developments During 2019/20 – Continued`

Infant clothing home sales Events design Employment agency Evening clothes for hire Cafeteria Beauty salon Complementary therapy Clothes outlet Home cleaning service Take-away drinks Household goods.

With MATI’s support, the student loan programme is now firmly under way; 13 of the 36 loans were for student loans on the Palestinian side. These loans enable young women to obtain degrees and to build the expertise needed for profitable work, in a variety of fields:

speech therapy,
law (two students),
finance and banking,
nursing,
film production,
nursery education (two students),
dentistry,
accountancy (two students),
psychology
dietetics.

JIMF with MATI evaluates businesses for their viability, for the neediness of the applicants, and for the value added to the local community (as JIMF wishes to avoid supporting one business merely to displace others). We are seeking accordingly to support creation of innovative businesses that fill clear gaps in the local economy. Vocational loans are similarly assessed against criteria of the credibility of the course and the expectation that it will support profitable employment, against the neediness of the applicants and the worthiness of the vocation sought.

Page 1 Continued

`THE JERUSALEM INTEREST FREE MICROFINANCE FUND LIMITED`

`REPORT OF THE DIRECTORS AND TRUSTEES - Continued`

`Statement of directors’ and trustees’ responsibilities`

The directors and trustees are responsible for preparing the Annual Report
and the Financial Statements in accordance with applicable law and
regulations. Company law requires the directors to prepare financial
statements for each financial year. Under that law the directors have
elected to prepare the financial statements in accordance with United
Kingdom Generally Accepted Accounting Practice. The financial statements are
required to give a true and fair view of the state of affairs of the company
and of the profit or loss of the company for that period. In preparing those
financial statements the directors and trustees are required:

to select suitable accounting policies and then apply them consistently;
to make judgements and estimates that are reasonable and prudent;
to state whether the Financial Reporting Standard for Smaller Entities has been followed, subject to any material departures disclosed and explained in the financial statements;
to prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Company will continue in business.

The directors and trustees are responsible for keeping proper accounting
records which disclose, with reasonable accuracy at any time, the financial
position of the company and that enable them to ensure that the financial
statements comply with the Companies Act 2006. They are also responsible for
safeguarding the assets of the company and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities. The
provisions within Part 15 of the Companies Act 2006 relating to small
companies.

Signed on behalf of the board of directors and the trustees

D. Franklin

.....................
D. Franklin
Director and trustee

Approved by the board on 17[th] May 2021

19 The Park,
London NW11 7ST

Page 2

THE JERUSALEM INTEREST FREE MICROFINANCE FUND LIMITED

Independent Examiner’s Reporton theaccounts for theyear ended31[st] August
2020assetouton pages3-5

I report to the charity trustees on my examination of the accounts of the
Company for the year ended 31[st] August 2020.

As the charity’s trustees of the Company (who are also the directors of the
company for the purposes of company law), you are responsible for the
preparation of the accounts in accordance with the requirements of the
Companies Act 2006 (“the 2006 Act”).

Having satisfied myself that the accounts of the Company are not required to
be audited for this year under Part 16 of the 2006 Act and are eligible for
independent examination, I report in respect of my examination of your
charity’s accounts as carried out under section 145 of the Charities Act
2011 (“the 2011 Act”). In carrying out my examination, I have followed the
Directions given by the Charity Commission (under section 145(5)(b) of the
2011 Act).

I have completed my examination. I confirm that no material matters have
come to my attention which gives me cause to believe that: a. accounting
records were not kept in accordance with section 386 of the Companies Act
2006; or b. the accounts do not accord with such records; or c. the accounts
do not comply with relevant accounting requirements under section 386 of the
Companies Act 2006 other than any requirement that the accounts give a ‘true
and fair’ view which is not a matter considered as part of an independent
examination; or d. the accounts have not been prepared in accordance with
the Charities SORP (FRS102).

I have no concerns and have come across no other matters in connexion with
the examination to which attention should be drawn in this report in order
to enable a proper understanding of the accounts to be reached.

         M. S. Emanuel

Signed ……………………………………………
         M. S. Emanuel,
   Chartered Accountants,
   5, Lexham Gardens Mews,
   Kensington,
   London W85JQ

         12[th] May2021

Dated  ……………………………………………

Page3

THE JERUSALEM INTEREST FREE MICROFINANCE FUND LIMITED

`INCOME AND EXPENDITURE`	`ACCOUNT FOR THE`	`YEAR ENDED31 AUGUST`	`2020`
	`Note`	`£`
		`----------------------`
		`2020`	`2019`
`Income`	`-1-`
`Donations received and total`	`incoming resources 31,670`		`24,998`
`Tax reclaim`		`-`	`5,495`
		`------`	`------`
`Total income`		`31,670`	`30,493`
		`------`	`----`
`Expenditure`
`Expenses`	`-5-`	`-`	`1,086`
`Training services`	`-5-`	`10,000`	`-`
`Legal fees`		`-`	`-`
`Bank charges and similar`
`administration charges`		`1,078`	`1,213`
`(Profit)/loss arising on the`
`translation of foreign currency`		`10,979`	`(20,000)`
`Provision and write-off for non-recoverability of loans`
	`- 2 -`	`8,603`	`(537)`
		`------`	`-----`
`Total expenditure`		`30,660`	`(18,238)`
		`------`	`-----`
`Surplus of income over`
`expenditure for the year`		`1,010`	`48,731`
`Balance brought forward`		`286,769`	`238,038`
		`-------`	`-------`
`Balance carried forward`		`£ 287,779`	`£ 286,769`
		`=======`	`=======`

The notes on page 5 form part of these financial statements.

Page 4

THE JERUSALEM INTEREST FREE MICROFINANCE FUND LIMITED

`BALANCE SHEET AS AT 31 AUGUST 2020`

	`Note`	`£`
		`---------------------------`
		`2020`	`2019`
`Current Assets`
`Balances at bank`		`120,177`	`113,928`
`Loans due from clients`	`-2-`	`210,861`	`221,874`
		`-------`	`-------`
		`331,038`	`335,802`
`Creditors: amounts falling`
`due withinone year`	`-3-`	`(29,769)`	`(31,805)`
		`-------`	`-------`
`Net Current assets`		`301,269`	`303,997`
`Creditors: amounts falling`
`after more than one year`	`-4-`	`(13,490)`	`(17,229)`
		`-------`	`-------`
`Net assets`		`£ 287,779`	`£ 286,768`
		`=======`	`=======`
`Represented by:-`
`Unrestricted funds`	`-6-`	`£ 287,779`	`£ 286,768`
		`=======`	`=======`
`Average number of employees`		`0`	`0`
		`==`	`==`

For the period 1 September 2019 to 31 August 2020, the company was entitled
to exemption from audit under section 477 of the Companies Act 2006 relating
to small companies and no notice has been deposited under section 476
requiring the Company to obtain an audit of the accounts for the period in
accordance with section 476.

The directors acknowledge their responsibilities for complying with the
requirements of the Companies Act 2006 with respect to accounting records
and the preparation of the accounts.

These accounts have been prepared under the historical cost convention in
accordance with FRS 105, the Financial Reporting Standard applicable to the
micro-entity regime and the provisions of the Companies Act 2006. The
company has decided not to file a profit and loss account with the Registrar
of Companies.

The Company is a private company limited by guarantee, registered in
England, Company No. 6681463 and its registered office is 19 The Park,
London NW11 7ST.

These accounts were approved by the board of directors on 17[th] May 2021 and
were signed on its behalf by:

`D. Franklin`

...................  Director

D. Franklin

The notes on page 5 form part of these financial statements.

Page5

THE JERUSALEM INTEREST FREE MICROFINANCE FUND LIMITED

`NOTES TO THE FINANCIAL STATEMENTS`

`1. Accounting Policies`

`Accounting basis and standards`

    The financial statements have been prepared under the historical cost
    convention and in accordance with the accounting policies set out
    below.

    These financial statements have been prepared in compliance with
    FRS 105 – The Financial Reporting Standard applicable in UK and
    Republic of Ireland and the Companies Act 2006.

`Compliance with SORP and legislation`

    The accounts have been prepared in accordance with the accounting
    policies and comply with the Charity’s governing document, applicable
    law and the requirements of the Statement of Recommended Practice,
    “Accounting and Reporting by Charities” (SORP 2005) issued in March
    2005.

    Incoming resourcesandexpenses

    Incoming resources represent donations and fees receivable. Resources
    expended are recognised in the year in which they are incurred.

`Fund accounting`

Funds are donations received or generated for the charity without
further specified purpose. These are funds that can be used in
accordance with the charitable objects at the discretion of the
directors (Trustees).

`Legal status of the charity`

The charity is a company limited by guarantee and has no share capital.
The liability of each member in the event of a winding up is limited to
one pound.

`Statement of cash flows`

The charity’s financial statements do not include a statement of cash
flows, since, in the opinion of the directors and trustees, such a
statement would not add significant information to that already
contained in the financial statements, including the note on loan
disbursements and repayments.

`Exchange rates`

Major transactions during the period were converted at rates prevailing
at the time of the transaction, minor transactions were converted using
an average of the rates prevailing at start and end of the year. Assets
and liabilities which existed at the balance sheet date were converted
at the rate prevailing at the year end. Any differences were
transferred to the profit and loss account.

Page5Continued

THE JERUSALEM INTEREST FREE MICROFINANCE FUND LIMITED

`NOTES TO THE FINANCIAL STATEMENTS - Continued`

			`£`
		`----------------------`
		`2020`	`2019`
`2.`	`Loans due from clients`
	`Loans due from clients repayable`
	`within 12 months`	`127,744`	`120,188`
	`Provision made for non-recoverability`	`3,789`	`(642)`
		`-------`	`-------`
		`123,956`	`119,546`
	`Loans due from clients repayable`
	`after more than 12 months`	`86,906`	`102,328`
		`-------`	`-------`
		`£ 210,861`	`£ 221,874`
		`=======`	`=======`

Loans provided to clients are shown in the balance sheet after
deducting repayments made during the year, and after deducting write-
offs of bad debt for extended delinquency of £5,456 (2019: £5,790).

Loans disbursed during the year amounted to £113,280 (2019: £ 129,552).
Loans repaid during the year amounted to £ 106,022(2019: £ 104,828).
The remaining difference in the amount outstanding, after allowing for
write-offs and provisions, is attributable to the rate of exchange
prevailing at the year ends.

`3. Creditors: amounts falling due within one year`

`Loan due to D. Franklin (See Note 5)`	`10,268`	`10,268`
`Loan due to KIVA`	`19,502`	`21,537`
	`------`	`------`
	`£ 29,770`	`£ 31,805`
	`======`	`======`

The US Dollar loans from Kiva are interest-free and repayable by
instalments linked to specific client loan repayments made in Israeli
Shekels, or may be used to fund new loans to clients, by agreement
between the Company and KIVA. The Company’s exposure to any exchange
difference is limited to 15% and is calculated at the time of repayment
to KIVA. For the purpose of preparing the annual accounts, provisions
for losses on exchange are charged in the Company’s profit and loss
account at the balance sheet date.

`4. Creditors: amounts falling after more than one year`

Loan due to KIVA                                £ 13,490       £ 17,229
                                                      ======         ======

Page5Continued

THE JERUSALEM INTEREST FREE MICROFINANCE FUND LIMITED

`NOTES TO THE FINANCIAL STATEMENTS - Continued`

`5. Related Party Transactions, and Training Services`

The outstanding loan from Mr D Franklin of £ 10,268 (2019: £ 10,268),
is interest-free and repayable on demand, but remains available to the
fund.

Donations received include £7,000 (2019: £13,000) from charities of
whom the trustees include relatives of Donald Franklin, and £14,658
(2019: £11,993) from another charity on which Donald Franklin is a
trustee.

A donation of £10,000 was received for the specific purpose of
contributing to MATI’s training programme (onto which loan applicants
are invited to prepare them for starting or expanding their
businesses).

6. £
-------
Unrestricted funds
Balance 1 September 2017 221,539
Surplus income over expenditure for the year 16,499
-------
Balance 31 August 2018 £ 238,038
Surplus income over expenditure for the year 48,730
-------
Balance 31 August 2019 £ 286,768
Surplus income over expenditure for the year
1,010
-------
Balance 31 August 2020
£ 287,779
=======

`7. Share Capital`

    The Company has no issued share capital but the Company is limited by
    guarantee.

`8. Ultimate Controlling Party`

    The Company is controlled by its directors.