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← Al-Hikmeh Foundation

2023-12-31-accounts

Company Registered Number: CE007585 Charity Registration Number: 1167756

AL-HIKMEH FOUNDATION

(A Charitable Incorporated Organisation)

TRUSTEES' REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

AL-HIKMEH FOUNDATION

(A Charitable Incorporated Organisation)

CONTENTS

Page
Reference and Administrative Details of the Charity, its Trustees and Advisers 1
Trustees' Report 2 - 8
Statement of Trustees' Responsibilities 9
Independent Auditor's Report on the Financial Statements 10 - 13
Statement of Financial Activities 14
Balance Sheet 15
Statement of Cash Flows 16
Notes to the Financial Statements 17 - 26

(A Charitable Incorporated Organisation)

AL-HIKMEH FOUNDATION

REFERENCE AND ADMINISTRATIVE DETAILS OF THE CHARITY, ITS TRUSTEES AND ADVISERS FOR THE YEAR ENDED 31 DECEMBER 2023

Trustees Dr Z Thamer, Chair
Dr B Thamer
Mr K Elkorishy
Mr H Al-Khoee
Charity registered
number
1167756
Principal office
Al-Hikmeh Foundation
Office 5
211 Kingsbury Road
London
NW9 8AQ
CIO number
CE007585
Honorary Executive
Director
Mr M Marashi
Independent auditor
MHA
Statutory Auditor
6th Floor
2 London Wall Place
London, United Kingdom
EC2Y 5AU
Bankers
Barclays Bank PLC
75 King Street
Hammersmith
London
W6 9HY
Solicitors
BDB Pitmans LLP
One Bartholomew Close
London
EC1A 7BL

Page 1

AL-HIKMEH FOUNDATION (A Charitable Incorporated Organisation)

TRUSTEES’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2023

The Trustees present their report and the financial statements of the Charity for the year ended 31 December 2023.

Structure, governance and management

Governing document

The governing document of Al-Hikmeh Foundation is its Charitable Incorporated Constitution, approved on 21st June 2016 which encompasses the charitable objectives that Al-Hikmeh Foundation's activities must be in line with. Furthermore, it establishes rules and procedures for the running of the Charity.

How the Charity is constituted

Al-Hikmeh Foundation is a charitable incorporated organisation (CIO), registered with the Charity Commission for England and Wales on 21 June 2016 with the registered Charity number 1167756.

Organisation Structure

Recruitment and appointment of Trustees

Induction of Trustees

Trustees undergo on-going training through the means of workshops and events whenever necessary.

Page 2

AL-HIKMEH FOUNDATION (A Charitable Incorporated Organisation)

TRUSTEES’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2023

Objectives and activities

Purposes and Aims

Our objectives, as set out in the Charity's constitution, are as follows:

Activities for achieving objectives

Our partner, Orphan Charity Foundation was chosen after research of potential partners in the region who had the reach and capability to carry out the foundation's objectives. We manage our relationship with our partner through ongoing reporting, site visits and executive communication with partner’s management.

Through our fundraising efforts, the Charity is able to provide grant funding to our partner organisation to carry out charitable work towards the relief of poverty and sickness, which includes the following programmes:

Page 3

AL-HIKMEH FOUNDATION (A Charitable Incorporated Organisation)

TRUSTEES’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2023

Grant Making Policy

Grant funding is the main activity carried out in achieving Al-Hikmeh Foundation's charitable aims and objectives. Funding is sent to its partner organisation whose aims are aligned with that of Al-Hikmeh Foundation’s.

The Charity has adopted a grant making policy that guides the process of making grants to its partner.

Contribution Made by Volunteers

The Honorary Executive Directors' involvement is performed on a voluntary basis and is not paid any amount of salary from the Charity. Furthermore, website maintenance, graphics and designs are done by volunteers who are not paid any amount of salary from the Charity. It is difficult to obtain a reliable figure for the amounts of donated services by volunteers.

Contribution Made by Staff

The Foundation did not have any full or part-time employees during 2023.

Fundraising

The Charity’s fundraising is primarily from private donors. Donations from private donors are generally unsolicited and are received because the person is interested in supporting the Charity’s activities. Some fundraising is also done through the platform of Amazon Smile through customers who support our Charity through their shopping – although Amazon has discontinued this initiative in February 2023. A small percentage of income has been recouped from Gift Aid.

The Charity carries out all fundraising through its internal teams and does not employ external or commercial firms, either professional fundraisers or commercial participators. The Charity is not subject to any undertaking to be bound by any voluntary scheme for regulating fundraising or any voluntary standard of fundraising in respect of its activities. No complaints have been received in respect of the Charity’s fundraising activities during the financial year.

Public Benefit

The charitable objects and activities which Al-Hikmeh Foundation undertakes for the public benefit and achievement in delivering these are set out in the relevant sections in this Trustees’ Report. The Board of Trustees of Al-Hikmeh Foundation ensure that the activities undertaken by Al-Hikmeh Foundation are relevant and beneficial to the needs of our beneficiaries in the following manner:

Page 4

AL-HIKMEH FOUNDATION (A Charitable Incorporated Organisation)

TRUSTEES’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2023

The Board of Trustees of this Charity declare and confirm that they have had regard to and have complied with the guidance issued by the Charity Commission on Public Benefit.

Achievements and Performance

Over the 2023 period, our charitable activities were implemented in 14 regions across Iraq by our partner, Orphan Charity Foundation, in the form of several programmes outlined in the ‘activities for achieving objectives’ heading. The breakdown of the spending for each programme this year was:

Page 5

AL-HIKMEH FOUNDATION (A Charitable Incorporated Organisation)

TRUSTEES’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2023

Measuring Achievements

All activities carried out by Al-Hikmeh Foundation during this reporting period are subject to performance reviews which are received and reviewed by the Trustees. These include the reviews of our partner to determine the overall impact, achievements and performances of our activities in addition to site monitoring visits and sample inspection of project implementation and sample examination of financial records.

The impact Al-Hikmeh Foundation has had on the lives of those afflicted in Iraq has been incredibly positive with the number of families that have benefited from the various programmes funded by Al-Hikmeh Foundation. Beneficiaries have expressed their gratefulness to the Charity in turning around their lives from having no hope, to being provided a stepping stone to achieving more than they ever could have thought with their lives. Here are some case studies about the beneficiaries of the partner organisation

An orphan boy A.G. Aged 11 was working on a farm to earn money to support his mother and two sisters. He worked long hours, day after day, to help with the income his mother was making from sewing for others. A.G. was identified by the partner organisation and started receiving monthly support. now he will not only not have to work but also he can go to school. His family would be taken care of, and he and his sisters can have a better future.

An orphaned girl Y.H. aged 9, who was registered and supported by the charity, was diagnosed with chronic debases that needed immediate treatment. The partner organisation investigated her case and made contact with the medical facilities to arrange her treatment. After receiving the treatment, she is able to get along with her daily life and focus on her education without the health challenges she was suffering from.

A widow Z.A. who has tragically lost her husband and therefore must take over his duties but it was very hard for her because she has 4 children and among them two are still infants. Providing food and basic necessities were hard for her. They were living in a small rented room within a house with multiple families. Even the room was not available for them on a long-term basis so she had to keep moving to other places from time to time which impacted the schooling of her two children who were at school age. She registered herself with the partner organisation and started receiving support for her orphaned children via different programmes. They have now been allocated with a stable accommodation and are receiving support towards the living cost of the children which in turn allows the mother to focus on looking after the family and raising the children to become self sufficient individuals in the future.

It is evident that because of the opportunities given to the orphans, they grow up having better health, education, and quality of life, and therefore are empowered to make a meaningful contribution to society and move towards independence. Across 2023, through AHF’s grants totalling $4,558,750 (2022 - $3,890,900), we were able to reach around 63,178 people (2022 - 81,286 people) who benefitted through various programs that our partner runs.

Financial review

For the year ended 31 December 2023, the Foundation received an income £3,667,918 (2022 - £3,434,732). Expenditure totalled £3,691,745 (2022 - £3,157,335). Total unrestricted funds carried forward for the Foundation as 31 December 2023 were £266,987 (2022 - £290,814).

Page 6

AL-HIKMEH FOUNDATION (A Charitable Incorporated Organisation)

TRUSTEES’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2023

Reserves Policy

Subsequent to consultation, the Board of Trustees concluded that it is to preserve a policy on reserves of £12,000 should a reduction in income occur. The Trustees consider that this amount of reserve is adequate funds to ensure governance and other operating costs are covered. Potential risks facing the Charity have been considered through the means of risk assessment in defining this policy. It is the Trustees’ view that the level of reserves maintained by the Charity is deemed sufficient. At the year end the Charity held unrestricted fund of £266,987, of which free reserves were £266,987 after excluding the net book value of tangible fixed assets. This level of free reserve is higher than the policy requirement and it can be used to help our partner adjust their financials should the Charity cease operation. This level was in line with Charity’s policy.

Going Concern

The Board of Trustees have regarded the financial position of the Foundation to be healthy, sustainable and ready to move forward to the next financial year. For this reason, they continue to adopt the going concern basis in preparing the financial statements. Further details regarding the adoption of the going concern basis can be found in the Accounting Policies.

The charity does not have on-going commitments of any significance and hence is not reliant on future funding to sustain its going concern position.

Risk Management

An effective risk management is essential to ensure that the Trustees can take appropriate and timely action where risks are identified and are better placed to achieve the Charity's mission statement. The Charity manages the risks through a risk assessment which is regularly reviewed, updated and monitored. This proactive approach allows Trustees to take the necessary course of action once risks have been identified, either to:

The Trustees should be clear about the risks in the context of Al-Hikmeh Foundation's charitable mission and in identifying risks, which may impede its ability to deliver its strategic objectives. This policy is, therefore, reviewed and aligned with any strategic plans for the Charity as developed over time to ensure that relevant risks are identified and dealt with accordingly.

Principal risks facing the Charity

The Board of Trustees, having discussed and analysed, have identified the following principal risks:

These risks are constantly investigated, and suitable actions are carried out adhering to the policy outline above. The risks are regularly re-visited, monitored and updated as decided by the Board of Trustees.

Page 7

AL-HIKMEH FOUNDATION (A Charitable Incorporated Organisation)

TRUSTEES’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2023

Plans for the future

The Board of Trustees of Al-Hikmeh Foundation have agreed on a one-year plan of activities of the Charity which include:

The Charity will continue to focus on how to improve to maximise the effects on the lives of the beneficiaries and society in general through its charitable objectives.

Policy for the remuneration of Key Management Personnel

The Charity considers the Key Management Personnel of the Charity to be the Trustees.

This report was approved and authorised for issue by the Trustees and signed on its behalf by:

…………………………… Dr Z Thamer Chair

Date: 08 October 2024

Page 8

AL-HIKMEH FOUNDATION

(A Charitable Incorporated Organisation)

STATEMENT OF TRUSTEES' RESPONSIBILITIES FOR THE YEAR ENDED 31 DECEMBER 2023

The Trustees 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).

The law applicable to charities in England & Wales 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 its incoming resources and application of resources, including its income and expenditure, for that period. In preparing these financial statements, the Trustees are required to:

The Trustees are responsible for keeping proper accounting records that are sufficient to show and explain the Charity's transactions and 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 Charities Act 2011, the Charity (Accounts and Reports) Regulations 2008 and the provisions of the Constitution. 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.

Approved by order of the Members of the Board of Trustees and signed on its behalf by:

................................................ Dr Z Thamer Chair of Trustees Date: 08 October 2024

Page 9

AL-HIKMEH FOUNDATION (A Charitable Incorporated Organisation)

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF AL-HIKMEH FOUNDATION

Opinion

We have audited the financial statements of Al-Hikmeh Foundation (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 the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

The financial statements have been prepared in accordance with Accounting and Reporting by Charities preparing their accounts in accordance with the Financial Reporting Standards applicable in the UK and Republic of Ireland (FRS 102) in preference to the Accounting and Reporting by Charities: Statement of Recommended Practice issued on 1 April 2005 which is referred to in the extant regulations but has been withdrawn.

This has been done in order for the accounts to provide a true and fair view in accordance with the Generally Accepted Accounting Practice effective for reporting periods beginning on or after 1 January 2015.

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 United Kingdom, including the Financial Reporting Council'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.

Page 10

AL-HIKMEH FOUNDATION (A Charitable Incorporated Organisation)

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF AL-HIKMEH FOUNDATION (CONTINUED)

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.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Charities (Accounts and Reports) Regulations 2008 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 are responsible for the preparation of the financial statements which 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 charity or to cease operations, or have no realistic alternative but to do so.

Page 11

AL-HIKMEH FOUNDATION (A Charitable Incorporated Organisation)

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF AL-HIKMEH FOUNDATION (CONTINUED)

Auditor's responsibilities for the audit of the financial statements

We have been appointed as auditor under section 144 of the Charities Act 2011 and report in accordance with the Act and relevant regulations made or having effect thereunder.

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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occuring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditor's Report.

Page 12

AL-HIKMEH FOUNDATION

(A Charitable Incorporated Organisation)

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF AL-HIKMEH FOUNDATION (CONTINUED)

Use of our report

This report is made solely to the Charity's Trustees, as a body, in accordance with Part 4 of the Charities (Accounts and Reports) Regulations 2008. Our audit work has been undertaken so that we might state to the Charity's Trustees 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 Charity and its Trustees, as a body, for our audit work, for this report, or for the opinions we have formed.

MHA

Statutory Auditor London, United Kingdom Date: 30 October 2024

MHA are eligible to act as auditors in terms of section 1212 of the Companies Act 2006.

MHA is the trading name of MacIntyre Hudson LLP, a limited liability partnership in England and Wales (registered number OC312313).

Page 13

AL-HIKMEH FOUNDATION

(A Charitable Incorporated Organisation)

STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 DECEMBER 2023

Note
Income from:
Donations
3
Total income
Expenditure on:
Charitable activities
4
Total expenditure
Net movement in funds
Reconciliation of funds:
Total funds brought forward
Net movement in funds
Total funds carried forward		 Unrestricted
funds
2023
£
3,667,918
3,667,918
3,691,745
3,691,745
(23,827)
290,814
(23,827)
266,987		 Total
funds
2023
£
3,667,918
3,667,918
3,691,745
3,691,745
(23,827)
290,814
(23,827)
266,987		 Total
funds
2022
£
3,434,732
3,434,732
3,157,335
3,157,335
277,397
13,417
277,397
290,814

The Statement of Financial Activities includes all gains and losses recognised in the year.

All income and expenditure derive from continuing activities.

The notes on pages 17 to 26 form part of these financial statements.

Page 14

AL-HIKMEH FOUNDATION

(A Charitable Incorporated Organisation)

BALANCE SHEET AS AT 31 DECEMBER 2023

Note
Fixed assets
Tangible assets
9
Current assets
Debtors: Amounts falling due within one year
10
Cash at bank and in hand
13
Creditors: Amounts falling due within one
year
11
Net current assets
Total net assets
Charity funds
Unrestricted funds
Total funds		 2023
£
300
280,497
280,797
(13,810)		 2023
£
-
-
266,987
266,987
266,987
266,987		 2022
£
300
303,134
303,434
(12,672)		 2022
£
52
52
290,762
290,814
290,814
290,814

The financial statements were approved and authorised for issue by the Trustees and signed on their behalf by:

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

Dr Z Thamer Chair Date: 08 October 2024

The notes on pages 17 to 26 form part of these financial statements.

Page 15

AL-HIKMEH FOUNDATION

(A Charitable Incorporated Organisation)

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2023

Note
Cash flows from operating activities
Net cash (used in) / provided by operating activities
12
Change in cash and cash equivalents in the year
Cash and cash equivalents at the beginning of the year
Change in cash and cash equivalents due to exchange rate movements
Cash and cash equivalents at the end of the year
13		 2023
£
(41,665)
(41,665)
303,134
19,028
280,497		 2022
£
266,370
266,370
24,534
12,230
303,134

The notes on pages 17 to 26 form part of these financial statements.

Page 16

AL-HIKMEH FOUNDATION

(A Charitable Incorporated Organisation)

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

1. General information

The Charity is a Charitable Incorporated Organisation (''CIO''), registered in England and Wales, and a registered Charity (Charity Registered Number 1167756) in England and Wales.

The address of the registered office is given in the Charity information on page 1 of these financial statements. The nature of the Charity’s operations and principal activities are detailed in the Trustees' Report.

In the event of the Charity being wound up, the liability in respect of the guarantee is limited to £1 per Member of the Charity.

2. Accounting policies

2.1 Basis of preparation of financial statements

The financial statements have been prepared in accordance with the Charities SORP (FRS 102) - 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), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Charities Act 2011.

The financial statements have been prepared to give a 'true and fair' view and have departed from the Charities (Accounts and Reports) Regulations 2008 only to the extent required to provide a 'true and fair' view. This departure has involved following the Charities SORP (FRS 102) published in October 2019 rather than the Accounting and Reporting by Charities: Statement of Recommended Practice effective from 1 April 2005 which has since been withdrawn.

Al-Hikmeh Foundation meets the definition of a public benefit entity under FRS102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy.

The financial statements are presented in sterling which is the functional currency of the Charity and amounts are rounded to the nearest pound.

2.2 Going concern

There are no material uncertainties about the Charity's ability to continue. The Trustees have considered the level of funds held and the expected income and expenditure for at least 12 months from authorising the financial statements. The budgeted income and expenditure is sufficient with the level of reserves for the Charity to be able to continue as a going concern.

2.3 Foreign currencies

Foreign currency transactions are initially recorded in the functional currency, by applying the spot exchange rate as at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate ruling at the reporting date, with any gains or losses being taken to the Statement of Financial Activities.

Page 17

AL-HIKMEH FOUNDATION

(A Charitable Incorporated Organisation)

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

2. Accounting policies (continued)

2.4 Income

Donations are recognised once the Charity has entitlement to the income, it is probable that the income will be received and the amount of income receivable can be measured reliably.

Where the donated good is a fixed asset, it is measured at fair value, unless it is impractical to measure this reliably, in which case the cost of the item to the donor should be used. The gain is recognised as income from donations and a corresponding amount is included in the appropriate fixed asset class and depreciated over the useful economic life in accordance with the Charity's accounting policies.

On receipt, donated professional services and facilities are recognised on the basis of the value of the gift to the Charity which is the amount it would have been willing to pay to obtain services or facilities of equivalent economic benefit on the open market; a corresponding amount is then recognised in expenditure in the period of receipt.

2.5 Expenditure

All expenditure is accounted for on an accruals basis. 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 allocated on the portion of the asset’s use.

Expenditure on charitable activities is incurred on directly undertaking the activities which further the Charity's objectives, as well as any associated support costs.

Grants payable are charged in the year when the offer is made except in those cases where the offer is conditional, such grants being recognised as expenditure when the conditions attaching are fulfilled. Grants offered subject to conditions which have not been met at the year end are noted as a commitment, but not accrued as expenditure.

All expenditure is inclusive of irrecoverable VAT.

Page 18

AL-HIKMEH FOUNDATION

(A Charitable Incorporated Organisation)

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

2. Accounting policies (continued)

2.6 Tangible fixed assets and depreciation

Tangible fixed assets costing £500 or more are capitalised and recognised when future economic benefits are probable and the cost or value of the asset can be measured reliably.

Tangible fixed assets are initially recognised at cost. After recognition, under the cost model, tangible fixed assets are measured at cost less accumulated depreciation and any accumulated impairment losses. All costs incurred to bring a tangible fixed asset into its intended working condition should be included in the measurement of cost.

Depreciation is charged so as to allocate the cost of tangible fixed assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Plant and machinery

25% Straight line

2.7 Debtors

Trade and other debtors are recognised at the settlement amount after any trade discount offered. Prepayments are valued at the amount prepaid net of any trade discounts due.

2.8 Cash at bank and in hand

Cash at bank and in hand includes cash and short-term highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account.

2.9 Liabilities and provisions

Liabilities are recognised when there is an obligation at the Balance Sheet date as a result of a past event, it is probable that a transfer of economic benefit will be required in settlement, and the amount of the settlement can be estimated reliably.

Liabilities are recognised at the amount that the Charity anticipates it will pay to settle the debt or the amount it has received as advanced payments for the goods or services it must provide.

Provisions are measured at the best estimate of the amounts required to settle the obligation. Where the effect of the time value of money is material, the provision is based on the present value of those amounts, discounted at the pre-tax discount rate that reflects the risks specific to the liability. The unwinding of the discount is recognised in the Statement of Financial Activities as a finance cost.

Page 19

AL-HIKMEH FOUNDATION

(A Charitable Incorporated Organisation)

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

2. Accounting policies (continued)

2.10 Financial instruments

The Charity does not have a material holding in complex financial instruments. The Charity only holds basic Financial Instruments. The financial assets and financial liabilities of the Charity are as follows:

Debtors - trade and other debtors (including accrued income) are basic financial instruments and are debt instruments measured at amortised cost as detailed in Note 10. Prepayments are not financial instruments.

Cash at bank - is classified as a basic financial instrument and is measured at face value.

Liabilities - trade creditors, accruals and other creditors will be classified as financial instruments, and are measured at amortised cost as detailed in Note 11. Taxation and social security are not included in the financial instruments disclosure. Deferred income is not deemed to be a financial liability, as in the cash settlement has already taken place and there is simply an obligation to deliver charitable services rather than cash or another financial instrument.

2.11 Fund accounting

General funds are unrestricted funds which are available for use at the discretion of the Trustees in furtherance of the general objectives of the Charity and which have not been designated for other purposes.

Restricted funds are funds which are to be used in accordance with specific restrictions imposed by donors or which have been raised by the Charity for particular purposes. The costs of raising and administering such funds are charged against the specific fund. The aim and use of each restricted fund is set out in the notes to the financial statements.

2.12 Accounting estimates, estimation uncertainty and judgements

The Trustees consider there to be no key estimates or judgements applied in the production of these financial statements.

Page 20

AL-HIKMEH FOUNDATION

(A Charitable Incorporated Organisation)

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

3.
Income from donations
Unrestricted
funds
2023
£
Donations
3,667,918
Unrestricted
funds
2022
£
Donations
3,434,732		 Total
funds
2023
£
3,667,918
Total
funds
2022
£
3,434,732

Page 21

AL-HIKMEH FOUNDATION

(A Charitable Incorporated Organisation)

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

4. Analysis of expenditure on charitable activities

Relief of Poverty
Relief of Poverty
Analysis of support costs
Staff costs
Depreciation
Bank charges
Travel costs
Insurance
Governance costs
Account/subscription fees
Telephone
Rent
Other office costs
Foreign exchange gain
Registration costs
Total 2023		 Grant
funding of
activities
2023
£
3,691,678
Grant
funding of
activities
2022
£
3,149,625		 Support
costs
2023
£
67
Support
costs
2022
£
7,710
Total
funds
2023
£
-
52
497
-
846
13,860
405
46
3,300
17
(19,028)
72
67		 Total
funds
2023
£
3,691,745
Total
funds
2022
£
3,157,335
Total
funds
2022
£
1,200
51
516
589
834
12,672
365
41
3,600
-
(12,230)
72
7,710

Page 22

AL-HIKMEH FOUNDATION

(A Charitable Incorporated Organisation)

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

5. Grants to institutions

Orphan Charity Foundation 2023
£
3,691,678
3,691,678		 2022
£
3,149,625
3,149,625

The Orphan Charity Foundation is registered in Iraq with General Secretariat to the Council of Ministers, NGO Directorate with registration number 1K73462 as a non-governmental organisation.

6. Governance costs

Auditor's remuneration - Other services
Auditor's remuneration - Audit of the financial statements
Total		 2023
£
3,060
10,800
13,860		 2022
£
2,904
9,768
12,672

7. Staff costs

Wages and salaries 2023
£
-
-		 2022
£
1,200
1,200

The average number of persons employed by the Charity during the year was as follows:

2023 2022
No. No.
Staff - 1

No employee received remuneration amounting to more than £60,000 in either year.

Page 23

(A Charitable Incorporated Organisation)

AL-HIKMEH FOUNDATION

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

8. Trustees' remuneration and expenses

During the year, no Trustees, who comprise all the Key Management Personnel of the Charity, received any remuneration or other benefits (2022 - £NIL) .

During the year ended 31 December 2023, no Trustee expenses have been incurred (2022 - £NIL) .

9. Tangible fixed assets

Cost or valuation
At 1 January 2023
At 31 December 2023
Depreciation
At 1 January 2023
Charge for the year
At 31 December 2023
Net book value
At 31 December 2023
At 31 December 2022		 Plant and
machinery
£
819
819
767
52
819
-
52

Page 24

AL-HIKMEH FOUNDATION

(A Charitable Incorporated Organisation)

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

10.
Debtors
2023
£
Due within one year
Other debtors
300
300
11.
Creditors: Amounts falling due within one year
2023
£
Accruals
13,810
12.
Reconciliation of net movement in funds to net cash flow from operating activities
2023
£
Net income for the year (as per Statement of Financial Activities)
(23,827)
Adjustments for:
Depreciation charges
9
52
Increase in creditors
11
1,138
Foreign exchange rate gain
4
(19,028)
Net cash (used in)/provided by operating activities
(41,665)
13.
Analysis of cash and cash equivalents
2023
£
Cash in hand
280,497
Total cash and cash equivalents
280,497		 2022
£
300
300
2022
£
12,672
2022
£
277,397
51
1,152
(12,230)
266,370
2022
£
303,134
303,134

Page 25

AL-HIKMEH FOUNDATION

(A Charitable Incorporated Organisation)

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

14. Analysis of changes in net debt

Cash at bank and in hand At 1
January
2023
£
303,134
303,134		 Cash flows
£
(22,637)
(22,637)		 At 31
December
2023
£
280,497
280,497

15. Related party transactions

During the year an unrestricted donation of £4,045 was made to the Charity by one Trustee (2022 - £26,800 from one Trustee).

Donations of £6,580 were also received from two related parties of one Trustee (2022 - £24,025 from two related parties of one Trustee).

Page 26