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2022-12-31-accounts

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www. hujjat .org
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Husaini Shia Islamic Centre,
Wood Lane, Stanmore, HA7 4LQ, UK
T: +44 (0)20 8954 6247
E: admin@hujjat.org
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THE KHOJA SHIA ITHNAASHERI MUSLIM COMMUNITY OF LONDON

Registered Charity in UK No. 288356

TRUSTEES' REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED

31 DECEMBER 2022

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THE KHOJA SHIA ITHNAASHERI MUSLIM COMMUNITY OF LONDON

CONTENTS

CONTENTS
Page no
Legal and Administrative Details 3
President's Statement 4
Trustees' Report 5 - 9
Independent Auditors' Report 10 - 11
Statement of Financial Activities 12
Balance Sheet 13
Statement of cash flows 14
Notes to the Financial Statements 15 - 23

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THE KHOJA SHIA ITHNAASHERI MUSLIM COMMUNITY OF LONDON

LEGAL & ADMINISTRATIVE DETAILS

Status

The Khoja Shia Ithnaasheri Muslim Community of London is an Unincorporated charitable body governed by its constitution and is constituted as a charitable trust. The constitution was adopted on 2 October 1983 and as amended on 26 March 2017 and on 20 September 2020.

Charity Number 288356 Registered Office Husseini Islamic Centre Wood Lane, Stanmore Middx HA7 4LQ

Other Names Husseini Islamic Centre Stanmore Mosque Trustees Sibtain Allibhai President & Custodian Trustee (appointed 6 December 2021, reappointed 8 May 2022) Sajjad Tejani Vice President & Custodian Trustee (appointed 8 May 2022) Hon. Secretary & Custodian Trustee (appointed Committee Member on 17 May Mohammed Akil Kanani 2022 and as Secretary on 18 July 2022) Asst. Secretary (re appointed 8 May 2022, resigned 5 January 2023, Mohamedasif Riyaz Rajabali appointed as Committee Member on 5 January 2023) Asst. Secretary (appointed as Committee Member on 8 May 2022 and as Asst Sec Assad Abdulla on 5 January 2023) Mushtakali Kassam Hon. Treasurer & Custodian Trustee (appointed 8 May 2022) Ali M Ali Asst. Treasurer (appointed 8 May 2022) Nasima Azim Karim Chairlady (reappointed 8 May 2022) Sukaina Nurmohamed Committee Member (appointed 8 May 2022) Tahera Kassam Committee Member (appointed 8 May 2022) Dr Ali Abbas R Hasham Committee Member (appointed 8 May 2022) Hasnain Mamdani Committee Member (appointed 8 May 2022) Salim Hamir Committee Member (appointed 8 May 2022)

Bankers Habib Bank AG Zurich Limited Barclays Bank Plc The Co-operative Bank Auditors Stephen Coleman Gerald Edelman LLP Cornhill 73 Cornhill London EC3V 3QQ

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THE KHOJA SHIA ITHNAASHERI MUSLIM COMMUNITY OF LONDON

PRESIDENT’S STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2022

Bismillahirrahmanirahim – I begin in the name of Allah SWT , The Most Merciful , The Most Beneficent.

We are delighted to present to you the audited financial statements for The KSIMC of London for the year ended 31 December 2022.

The KSIMC of London is fortunate and acknowledges the immense contribution of the dedicated volunteers to provide selfless services to all our members and non members alike. Post Covid our dedicated volunteers have kept activities of the centre ongoing seven days a week catering for members of all ages and genders alike.

Our organisation is a fully registered charity relying heavily on the generous and magnanimous donations from our members and their families. Everyone in some way or the other is a contributor to our centre and this is how we are able to cater for services we provide on a daily basis to infants, children , youths , adults and seniors. Our activities include Religious Education, Marriages, Funerals, Sporting events, Secular education, Tuition centre to name but a few. Both genders benefit from these facilities. This also creates a great community atmosphere in the centre and helps bonding and lasting friendship between the members within it.

I am pleased to report that with the blessings of Allah (swt) and the support of our members the year 2022 has been progressive for our community. In October 2022, we were able to complete on our purchase of Widewater Place Harefield – Hujjat Harefield. A 6.3 acre site with135,000 sq ft of internal space split between 3 buildings with onsite parking of over 500 cars. This is something we have been aspiring for over a decade but not able to. Hujjat Harefield inshallah will serve many generations to come and will be an icon for our community globally.

We were also able to finally appoint a resident Aalim. Sheikh Anwar Jaffar will help guide our community and be an anchor person for all religious matters. As you are aware we already have a team of ladies Aalima under the Hidayah team serving the ladies & girls of our community.

In regards to Stanmore Refurbishment, its been an on going process but with each passing day, we are inching closer to a settlement and inshallah works will start soon to restore our centre back to its glory. As parts of our building are listed hence the process to get pass the council for any works takes that extra bit longer.

The Covid 19 pandemic has affected many lives and businesses across the world and our charity and members are no exception. As we see the end of this pandemic with the blessings of Allah swt, let’s not forget the lives we have lost due to Covid. I request you all to remember them in your prayers. May Allah SWT grant them a lofty station in Paradise. Ameen.

The unavailability of full use of centre and costs of refurbishment has been felt in our finances with a reduction in our unrestricted funds and revenue. In addition, the damage caused to our centre by the storm has increased the financial burden on the Jamaat as not all refurbishment costs will be paid by the insurers. We have continued to facilitate events under a temp marque which also has a substantial cost. I humbly request you to continue to support us by your generous donations and volunteer work for the community.

I would like to thank the members of my executive committee who have worked tirelessly during this period. I would also like to say a big thank you to all Buju's and volunteers who have helped serve this community for the sole pleasure of Allah (swt). May Allah bless you all. Our Volunteers are the heartbeat of this community and we are ever so grateful for their services.

Finally, to our members, please forgive me and my team for any short comings and I pray that we continue to work together and stay united.

Wasalaam

Sibtain Alibhai President The KSIMC of London

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THE KHOJA SHIA ITHNAASHERI MUSLIM COMMUNITY OF LONDON

TRUSTEES' REPORT FOR THE YEAR ENDED 31 DECEMBER 2022

The Trustees are pleased to present their annual report and the audited financial statements for the year ended 31 December 2022. The legal and administrative information appearing on page 3 forms a part of this report.

Structure, governance and management

The Charity is an unincorporated Charity governed by its Constitution adopted on 2 October 1983 and as amended on 26 March 2017 and on 20 September 2020, with periodic amendments to the Constitution as disclosed in the Minutes of the relevant general meetings.

In accordance with the provisions in the Constitution, the Trustees are elected every two years. The elections normally take place two weeks prior to the relevant Annual General Meeting. The current executive committee was elected on 8 May 2022.

The Charity is managed by the office bearers and the Executive Committee whose roles are clearly defined in the constitution, and who meet at least 10 times a year.

The Trustees receive information about their role and responsibilities from a range of sources, including the Charity Commission and professional advisors to the Charity. Arrangements are in place for the induction of all newly appointed Trustees who receive a formal induction from the President of the Charity relating to their role and responsibilities as a trustee, prior to their first meeting.

The Charity, although independent, is involved with a wider network of charities. It is a member of a regional council, The Council of European Jamaats (CoEJ) which represents The KSIMC of London at the global organisation, The World Federation of Khoja Shia Ithna-asheri Muslim Communities (WF). Both charities are registered with the Charities Commission in the UK.

The following trustees resigned during the year:

Aqeel Merchant - resigned on 07 March 2022 Muntazir Aunali Kanji - resigned on 28 March 2022 Bashir Pirbhai - appointed on 09 March 2022 and resigned on 08 May 2022 Abbas Ismail - resigned on 08 May 2022 Muhammad Datoo - resigned on 08 May 2022 Mumtaz Merali - resigned on 08 May 2022 Dr Mohammed Asad Abdullah - resigned on 08 May 2022 Dr Samana Fazel - resigned on 08 May 2022 Imran Shirazali Mohamedali Gulamhusein - resigned on 08 May 2022 Shiraz Jamal - resigned on 08 May 2022 Moshin Kassam - resigned on 27 June 2022

Conflicts of Interest

Trustees and staff are expected to conduct the business of the Charity with integrity at all times. A Conflict of Interest Policy is in place to ensure that there is no personal gain from the Charity's work. All staff and Trustees have to declare their interests. At each Executive Committee meeting the Trustees are expected to inform those present to any interests, and may be asked not to participate during the relevant decision-making process. Any relevant gift or hospitality received by Trustees and staff is also reported to the Executive Committee.

Public Benefit Statement

The Charity is a Public Benefit Entity.

The Trustees have referred to the guidance in the Charity Commission's general guidance on Public Benefit and have complied with the duty in section 17 of the Charities Act 2011 when reviewing the aims and objectives that have been set, and in planning the Charity's future activities.

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THE KHOJA SHIA ITHNAASHERI MUSLIM COMMUNITY OF LONDON

TRUSTEES' REPORT FOR THE YEAR ENDED 31 DECEMBER 2022

Object, objectives and activities for the public benefit

The objects for which the Charity has been established is to promote and advance the Islamic Religion in accordance with the principles of the Shia Ithna-Asheri faith and to provide for the relief of poverty among Muslims of the Shia Ithna-Asheri faith.

The Charity through its Executive Committee has the power:

(a) To encourage the practice of the Islamic Religion as taught by the Shia Ithna-Asheri faith in the City of London, across the UK and throughout the whole world.

(b) To spread knowledge of the Islamic Religion as taught by the Shia Ithna-Asheri faith with a view to gaining adherents.

(c) To secure the provision of Mosques and Imambara and to provide for the upkeep restoration and repair of their fabric and the maintenance of the services therein and to supply and embellish the furniture and fittings of such Mosques and Imambara.

(d) To hold and arrange Islamic Religious services and ceremonies and in particular the performance of nikah.

(e) To provide religious education in the principles of the Islamic faith as taught by the Shia Ithna-Asheri faith.

(f) To pay or assist in paying the funeral expenses of deceased Muslims who have died in straitened circumstances.

(g) To establish, take over, maintain, endow or otherwise assist in the formation of religious or educational establishments where the Islamic Religion is taught in accordance with the principles laid down by the Shia Ithnaasheri faith so long as the objects of such establishments are exclusively charitable.

(h) To receive donations whether impressed with any special trust (provided such trust is exclusively charitable) or not to be held and applied for the promotion of the Charity.

(i) To issue appeals for donations and periodical reports on the work of the Charity.

As a result of the general guidance on public benefit, the Trustees have assessed the objectives as follows:

Achievements and Performance

In order to meet the objectives, the Trustees carried out several activities and are pleased to report the following achievements:

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THE KHOJA SHIA ITHNAASHERI MUSLIM COMMUNITY OF LONDON

TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2022

These achievements would not have been made without both the commitment and dedication of volunteers and the

Investment Policy

The funds of the Charity that are not required for immediate application may be invested in such manner as the Trustees, from time to time, may approve.

During the year ended 31 December 2022 the funds were invested in various bank accounts and in investment property.

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.

Risk Management

The Trustees recognise that effective risk management is essential in achieving the Charity’s objectives. Risk management is considered as an integral element of all decision making and identifying appropriate procedures to ensure that risk levels are acceptable in each case. The Trustees believe that it is important to develop and enhance the approach in risk management, to ensure it remains fit for purpose. The Charity will formalise the risk management and create a risk register which will be reviewed on regular basis.

Policy on reserves

The Charity has undertaken a review of the reserves policy having regard for the risk assessment.

To safeguard the core activities in periods of fluctuating income, where possible, the Trustees have determined to establish free reserves (i.e. those unrestricted reserves not tied up in tangible fixed assets) at a level sufficient to meet the Charity’s requirements for a minimum period of 3 months of unrestricted expenditure in any given year equating to approximately £300,000.

The level of General Funds as at 31 December 2022 is £383,031 (2021 - £919,103). As at the year end the Charity also had £687,023 (2021 - £589,012), mainly in cash, as funds designated for specific use as shown in note 13 and 14 to the accounts.

As at 31 December 2022 the Charity's Restricted funds were £16,938,133 (2021 - £8,532,239) of which £16,233,787 (2021 - £7,882,259) is represented by fixed assets and balance of £714,346 (2021 - £649,980) in cash is represented by various funds as shown in note 14 to the accounts.

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THE KHOJA SHIA ITHNAASHERI MUSLIM COMMUNITY OF LONDON

TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2022

Financial review

The results of the Charity’s activities are shown on pages 12 to 23 of the financial statements.

The Charity’s main objective is to promote and advance the Islamic Religion in accordance with the principles of the Shia Itna-Asheri faith. All the activities including the divisions under its control namely, The Islamic Montesorri School, Shia Ithnaasheri Madressa, Hujjat Saturday Workshop, Husaini Tuition Centre, Islamic Bookshop and the Burial Fund contribute in achieving this main objective. All the income from these divisions and the donations received from the members and well-wishers of the Charity assist the Charity in meeting its main charitable objective of providing services to the community at large.

Income relating to unrestricted and restricted funds increased by £8,800,564 (2021 - decreased by £21,487). Expenditure on these activities also increased by £836,796 (2021 - decreased by £55,346). The increase in income mainly relates to a increase in rental income from the purchase of new property in Harefield. An amount of £8,341,528 was recieved as donation towards the purchase of Harefield property.

Overall, net expenditure from unrestricted and designated activities is £429,968 (2021 - £7,449), and net income from restricted funds is £8,386,287 (net expenditure 2021 - £20,211). It is the intention of the Trustees to utilise the carry forward surpluses in unrestricted fund for the benefit of the members and fund future projects. £8,341,528 was spent on the acquistion of Harefield Property.

Future Plans

In addition to the objectives outlined above, the Charity has additional objectives over the forthcoming 12 month period:

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THE KHOJA SHIA ITHNAASHERI MUSLIM COMMUNITY OF LONDON

TRUSTEES' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2022

Statement of Trustees’ responsibilities

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 the affairs of the charity and of the incoming resources and application of resources of the charity for that period. In preparing these financial statements, the trustees are required to:

The Trustees are responsible for keeping proper 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 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.

The Trustees are responsible for the maintenance and integrity of the financial and other information included on the Charity’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Appreciation

The Charity relies heavily on services of volunteers. The Trustees wish to thank the Jamaat staff and all the volunteers for their unstinting hard work during 2022 and their on-going efforts in the daily administration of numerous areas of work we do.

The Trustees also wish to acknowledge the immense quantity of high quality work undertaken by staff, officers and volunteers in helping to achieve and deliver the charitable objectives of the Charity.

Auditors

Gerald Edelman LLP were appointed as auditors of the Charity at the AGM held in June 2023 by a general body resolution.

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 are aware of such information.

The Trustees' report was approved and signed on behalf of the Trustees on 13 October 2023

Mohammed Akil Kanani Hon. Secretary

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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF THE KHOJA SHIA ITHNAASHERI MUSLIM COMMUNITY OF LONDON

Opinion

We have audited the financial statements of The Khoja Shia Ithnaasheri Muslim Community of London for the year ended 31 December 2022 which comprise the Statement of Financial Activities, the Balance Sheet, Statement of Cash flows, and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including 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, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

Other information

The trustees are responsible for the other information. The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identity such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

In the light of the knowledge and understanding of the Charity and environment obtained in the course of the audit, we have not identified material misstatements in the Trustees' Annual Report.

We have nothing to report in respect of the following matters in relation to which the Charities Act 2011 requires us to report to you if, in our opinion:

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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF THE KHOJA SHIA ITHNAASHERI MUSLIM COMMUNITY OF LONDON

Responsibilities of the trustees

As explained more fully in the trustees' responsibilities statement set out on Page 7, the trustees 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 they 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 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

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.

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:

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 t

Use of our report

This report is made solely to the Charity's trustees, as a body, in accordance with section 144 of the Charities Act 2011 and the regulations made under section 154 of that Act. 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's trustees as a body, for our audit work, for this report, or for the opinions we have formed.

Stephen Coleman - ACA (Senior Statutory Auditor) Gerald Edelman LLP

73 Cornhill London EC3V 3QQ Date: 13 October 2023

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THE KHOJA SHIA ITHNAASHERI MUSLIM COMMUNITY OF LONDON

STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 DECEMBER 2022

Notes
Income
Income from generated funds
Donations
2
Subscriptions
Activities for generating funds
Sundry income
3
Investment income
4
Income from charitable activities
Activities of the centre
Burial facilities
Education
Total income
Expenditure
Expenditure on charitable activities
Religious and spiritual activities
Secular education
Burial facilities
Youth, children and volunteers
Relief of the needy, poor, orphaned and widowed
Nyaz
Investment property expenditure
Governance
Total expenditure
5
Net income / (expenditure)
Transfer of funds
12, 13
Unrealised gain on revaluation of tangible fixed assets
Net movements in funds
Funds brought forward at the start of the year
Funds carried forward at the end of the year
12, 13
Costs of generating funds
Net movements in funds		 Unrestricted
Funds
£
549,721
319,443
83,730
378,456
58,235
214,505
386,631
1,990,721
44,467
528,128
266,417
536,839
48,185
-
281,739
664,662
50,252
2,420,689
(429,968)
(19,608)
(449,576)
-
(449,576)
1,508,115
1,058,539
1,058,539		 Restricted
Funds
£
8,718,724
-
-
-
-
-
-
8,718,724
-
-
620
-
39,058
292,759
-
-
332,437
8,386,287
19,608
8,405,895
-
8,405,895
8,532,238
16,938,133
16,938,133		 Total Funds
2022
£
9,268,445
319,443
83,730
378,456
58,235
214,505
386,631
10,709,445
44,467
528,128
267,037
536,839
87,243
292,759
281,739
664,662
50,252
2,753,126
7,956,319
-
7,956,319
-
7,956,319
10,040,354
17,996,672		 Total Funds
2021
£
818,465
309,840
99,288
71,830
400
381,675
227,383
1,908,881
19,930
357,310
259,825
661,581
8,213
414,706
126,196
68,569
1,916,330
(7,449)
-
(7,449)
-
(7,449)
10,047,803
10,040,354

There are no other recognised gains and losses other than those passing through the Statement of Financial Activities. All income and expenditure derive from continuing activities.

The notes on pages 15 to 23 form a part of these financial statements.

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THE KHOJA SHIA ITHNAASHERI MUSLIM COMMUNITY OF LONDON

BALANCE SHEET AS AT 31 DECEMBER 2022

Note
Fixed assets
Investment properties
7
Tangible assets
8
Total fixed assets
Current assets
Stock
Debtors
9
Cash at bank and in hand
Total current assets
Debtors: Amounts falling due
after more than one year
10
Liabilities
Creditors: amounts falling due
within one year
11
Creditors: Amounts falling due
after more than one year
12
Net assets
The funds of the charity
Unrestricted funds
13
Designated funds
General funds
Restricted funds
14
Revaluation reserve
Other
Total charity funds
15		 2022
£
52,322
400,235
3,206,255
3,658,812
73,518
3,732,330
(2,730,018)
(24,494,227)
687,023
371,516
2,887,720
14,050,413		 2022
£
34,625,000
6,863,587
41,488,587
(23,491,915)
17,996,672
1,058,539
16,938,133
17,996,672		 2021
£
48,110
69,196
1,629,083
1,746,389
145,484
1,891,873
(275,113)
(100,000)
589,012
919,103
2,887,720
5,644,519		 2021
£
1,625,000
6,898,594
8,523,594
1,516,760
10,040,354
1,508,115
8,532,239
10,040,354

The notes on pages 15 to 23 form a part of these financial statements

Approved for issue by the board of trustees on 13 October 2023 and signed on its behalf by:

Sibtain Alibhai - (President)

Mushtakali Kassam - (Honorary Treasurer)

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THE KHOJA SHIA ITHNAASHERI MUSLIM COMMUNITY OF LONDON

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2022

Note
Cash used in operating activities
Net movement in funds
Add back depreciation charge
Less interest income
Increase in stock
Increase in debtors
Increase in creditors
Net cash generated from / (used in) operating activities
Cashflows from investing activities
Interest income
Sale of tangible fixed assets
Purchase of tangible fixed assets
Purchase of investment property
Net cash used in investing activities
Decrease in cash and cash equivalents in the year
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year		 2022
£
7,956,319
41,694
(5,887)
(4,213)
(259,073)
26,849,132
34,577,972
5,887
-
(6,687)
(33,000,000)
(33,000,800)
1,577,172
1,629,083
3,206,255		 2021
£
(7,449)
45,651
(2,344)
3,505
120,831
75,622
235,816
2,344
-
(27,399)
(25,055)
210,761
1,418,322
1,629,083

The notes on pages 15 to 23 form a part of these financial statements

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THE KHOJA SHIA ITHNAASHERI MUSLIM COMMUNITY OF LONDON

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

1 Accounting Policies

General Information and basis of preparation

The Khoja Shia Ithnaasheri Muslim Community of London is a registered charity (Charity No 288356) in England and Wales. The nature of the chairty's operations and activities are reported in the Trustee's Report. The legal and administrative information appearing on page 3 forms a part of these notes.

Basis of preparation

The financial statements have been prepared in accordance with 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 January 2019) - (Charities SORP (FRS 102)) and the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Charities Act 2011. The Charity constitutes a public benefit entity as defined by FRS 102.

The financial statements are prepared on a going concern basis under the historical cost convention, modified to include certain items at fair value. The financial statements are presented in sterling which is the functional currency of the charity and are rounded to the nearest £1.

Income recognition

All incoming resources are included in the Statement of Financial Activities (SoFA) when the charity is legally entitled to the income after certain conditions have been met, the amount can measured reliably and it is probable that the income will be recieved.

For donations to be recognised the charity will have been notified of the amounts and the settlement date In writing. If there are conditions attached to the donation and thls requires a level of performance before entitlement can be obtained then income Is deferred until those conditions are fully met or the fulfilment of those conditions is within the control of the charity and It is probable that they will be fulfilled.

Voluntary income is included in the Statement of Financial Activities upon receipt. Income from charitable activities (including membership income) is recognised as incoming resources when receivable, except when incapable of financial measurement.

Investment income is earned through renting of charity's assets. It is recorded on accruals basis.

Grants and Gift Aid are recognised when receivable, Government Grants and subscriptions for membership are recognised when received. Gift Aid received is treated as unrestricted income and utilised against the support costs of the charity.

All income is included net of VAT and related expenditure includes any VAT which is not recoverable.

Taxation

No provision has been made for corporation tax or deferred tax as the charity is a registered charity and is therefore exempt within the meaning of schedule 3 of the Charities Act 2011 and therefore is exempt from taxation.

Expenditure

All expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all costs related to the category. Expenditure is recognised where there is a legal or constructive obligation to make payments to third parties, it is probable that the settlement will be required and the amount of the obligation can be measured reliably.

Expenditure on charitable activities comprise the resources applied by the charity in meeting its charitable objectives. Such costs include the direct costs of the charitable activities together with those support costs incurred that enable these activities to be undertaken.

15 of 23

THE KHOJA SHIA ITHNAASHERI MUSLIM COMMUNITY OF LONDON

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2022

1 Accounting Policies (continued)

Support costs allocation

Support costs are those that assist the work of the charity but do not directly represent charitable activities and Include office costs, governance costs, administrative payroll costs. They are incurred directly in support of expenditure on the objects of the charity. Where support costs cannot be directly attributed to particular headings they have been allocated to the cost of raising funds and expenditure on charitable activities on a basis consistent with use of the resources. The support costs have been allocated to the charity's activities based on the number of staff employed in each area and the proportionate use of resources. The analysis of these costs is included in note 5.

In accordance with the Charities SORP (FRS 102), the general volunteer time of members and trustees is not recognised. The Trustees’ annual report includes more information about their contribution.

Pension

Employees of the charity are entitled to join a defined contribution scheme unless they have exercised their right to opt out of the scheme membership. The pension fund is then converted into a pension upon the employee's normal retirement age which is defined as when they are eligible for a state pension. The charity has no liability beyond making its contribution and paying across the deductions for the employee's contributions.

Tangible Fixed Assets and Depreciation

Fixed assets are included at cost or, where original cost is not ascertainable, at valuation at the time such assets were first capitalised, less depreciation where appropriate.

Depreciation has been provided at the following rates in order to write down the cost or valuation, less estimated residual value, of all tangible fixed assets, over their expected useful lives:

estimated residual value, of all tangible fixed assets, over their expected useful li
Building over 50 years on a Straight Line Basis
Equipment over 4 years on a Straight Line basis
Furniture and Fixtures between 3 and 7 years on a Straight Line basis
Motor Vehicle over 5 years on a Straight Line basis

The Land and other religious artefacts have not been depreciated in view of their nature. The freehold property is recognised at a valuation based on the information available to the Trustees and in their opinions. Professional valuations are carried out at regular intervals. The Trustees do not consider that it is economic to carry out professional revaluations each year.

Investment Property

Investment property is included in the Balance Sheet at open market value. The value is generally established by reference to independent third party valuations obtained by the Trustees.

Cash and cash equivalents

Cash and cash equivalents include cash In hand, deposits held at call with banks and other short-term llquid Investments with original maturities of three months or less.

Debtors and creditors

Debtors and creditors with no stated interest rate and receivable or payable are recorded at transaction price. Any losses arising from impairment are recognised in expenditure.

Stock

Stock consists of books in the bookshop. The stock is valued at lower of cost and net realisable value.

Provisions

Provisions are recognised when the charity has an obligation at the balance sheet date as a result of a past event, it is probable that an outflow of economic benefits will be required in settlement and the amount can be reliably estimated.

Impairment

Assets not measured at fair value are reviewed for any indication that the asset may be impaired at each balance sheet date. If such indication exists, the recoverable amount of the asset, or the asset's cash generating unit, is estimated and compared to the carrying amount. Where the carrying amount exceeds its recoverable amount, an impairment loss is recognised in profit or loss unless the asset is carried at a revalued amount where the impairment loss is a revaluation decrease.

16 of 23

THE KHOJA SHIA ITHNAASHERI MUSLIM COMMUNITY OF LONDON

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2022

Funds

Unrestircted general funds are are available for use at the discretion of the Trustees in furtherance of the general objects of the charity and which have not been designated for other purposes. Investment income and gains are allocated to the unrestricted funds.

Designated funds comprise unrestricted funds that have been set aside by the Trustees for particular purposes. The aim and use of the designated funds is set out in notes to the financial statements.

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 cost of raising and administering such funds are charged against the specific fund, if appropriate. The aim and use of each restricted fund is set out in notes to the financial statements. Transfers are made to/from restricted funds on approval by the Trustees when required to do so in order to enable the restricted fund to carry out its activities.

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.

2 Donations

Unrestricted
Funds
£
Chawda Masumin, Jula and Imam
Zamin
74,558
General donations
141,771
Nyaz
204,464
-
Relief, religious and spiritual
activities
-
128,928
549,721
Activities for generating funds
Unrestricted
Funds
£
Parking
11,460
Announcement and adverts
7,233
Directory and calendar
10,724
Other Fundraising
4,291
Furlough Grants
-
Islamic bookshop
50,022
83,730
Investment income
Unrestricted
Funds
£
Rent received
372,569
Interest received
5,887
378,456
Sadka, Welfare and Bewa Yatim
Gift Aid		 Restricted
Funds
£
-
8,364,315
-
94,275
260,134
-
8,718,724
Restricted
Funds
£
-
-
-
-
-
-
-
Restricted
Funds
£
-
-
-		 Total
2022
£
74,558
8,506,086
204,464
94,275
260,134
128,928
9,268,445
Total
2022
£
11,460
7,233
10,724
4,291
-
50,022
83,730
Total
2022
£
372,569
5,887
378,456		 Total
2021
£
31,670
156,334
210,007
121,937
215,269
83,248
818,465
Total
2021
£
2,230
4,416
4,693
2,516
29,083
56,350
99,288
Total
2021
£
69,486
2,344
71,830

4 Investment income

17 of 23

THE KHOJA SHIA ITHNAASHERI MUSLIM COMMUNITY OF LONDON

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2022

5a
Total Expenditure
Costs of Generating Funds
Charitable Activities
Religious and spiritual activities
Secular education
Burial
Youth, children and volunteers
Relief of the poor, orphaned and widowed
Food & Nyaz
Governance (see Note 5d)
Exepnditure, maintenance & service charge
incurred in respect to investment property		 Direct
Costs
£
355,086
179,542
360,943
87,243
292,759
189,426
664,662
48,698
2,178,359		 Support
Costs
£
44,467
173,042
87,495
175,896
-
-
92,313
1,554
574,767		 Total
2022
£
44,467
528,128
267,037
536,839
87,243
292,759
281,739
664,662
50,252
2,753,126		 Total
2021
£
19,930
357,310
259,825
661,581
8,213
414,706
126,196
-
68,569
1,916,330

The support cost is allocated on the basis either on a directly attributable to charity activities or apportioned basis. Certain expenditure are apportioned 5% as cost of generating funds and 5% as governance costs.

5b Support costs
1
Motor vehicles expenditure
Car parking
Printing Postage Stationery
Telephone and internet
Insurances
Accountancy fees
Light & Heat
Rates & Water
Salaries and social security
Cleaning & Refuse Collection
Repairs & Maintenance
IT, Audio and Visual
Sundry Expenses
Mental Health
Education and Training
Bank & card charges
Seniors Costs
Depreciation
Staff costs
5c
Staff costs comprise:
Wages and salaries
Social security costs
Pension contributions
Full time employees
Part time employees
Staff numbers as analysed by category:
Charitable activities
Governance
The average number of employees during the year was as follows:		 2022
£
6,815
12,335
7,516
11,232
11,430
-
53,838
2,894
165,636
36,531
128,515
48,850
15,959
-
-
33,784
-
39,431
574,766
2022
£
353,693
19,776
4,112
377,581
16
10
26
23
3
26		 2021
£
6,642
-
4,351
7,417
13,408
593
20,755
4,748
135,628
10,650
91,596
38,163
10,591
2,340
3,405
17,906
350
43,389
411,932
2021
£
321,372
21,048
4,436
346,856
15
28
43
38
5
43

18 of 23

THE KHOJA SHIA ITHNAASHERI MUSLIM COMMUNITY OF LONDON

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2022

5d Governance costs

Governance costs
Auditors remuneration
Legal and professional fees
Subscriptions
Share of support costs		 2022
£
7,500
39,071
2,127
1,554
50,252		 2021
£
5,020
59,812
2,478
1,259
68,569

6 Trustees

No Trustee received any remuneration from the Charity for performing their duties as a trustee (2021 - £Nil). During the year a total of no money was paid to a Trustee (2021 £Nil), during their tenure as a Trustee, as remuneration for support services other than performing their duties as a Trustee.

No Trustees received reimbursement for costs for attending meetings and travelling expenses during the year (2021 - £Nil).

7 Investment properties

Investment properties
Cost or Valuation
At 1 January 2022
Additions
Disposals
At 31 December 2022
Depreciation
At 1 January 2022
Charge for the year
Disposals
At 31 December 2022
Net Book Value
At 31 December 2022
At 31 December 2021		 Investment
Property
£
1,625,000
33,000,000
-
34,625,000
-
-
-
-
34,625,000
1,625,000

At the year the charity had 3 investment properties and 1 freehold property:

  1. During the year the charity acquired a investment property in Harefield for £33m. The charity currently receives rental income from this investment.

  2. An investment property in Ruislip was acquired for £423,043 was valued at £1.2m. This is was valued in 2016 by a Chartered Surveyor, Roger Lumby, Penn Court, Church Road, Penn, High Wycombe, HP10 8NU.

  3. An investment property, a 3 bedroom flat in gated development in Bushey was purchased for £425,000 in October 2019.

  4. A freehold property in Stanmore was acquired over 35 years ago has historical cost of £4,889,237.

All the properties have been appraised by Trustees based on guidance from independent third parties and concluded that the freehold property and investment properties are fairly stated.

19 of 23

THE KHOJA SHIA ITHNAASHERI MUSLIM COMMUNITY OF LONDON

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2022

8
Tangible Fixed Assets
Freehold
Property
Equipment
Cost or Valuation
£
£
At 1 January 2022
7,000,000
266,702
Additions
-
3,403
Disposals
-
-
At 31 December 2022
7,000,000
270,105
Depreciation
At 1 January 2022
160,000
233,971
Charge for the year
20,000
12,883
Disposals
-
-
At 31 December 2022
180,000
246,854
Net Book Value
At 31 December 2022
6,820,000
23,251
At 31 December 2021
6,840,000
32,731
9
Debtors
Prepayments and accrued income
Other debtors
10
Debtors: Amounts falling due after more than one year
Hujjat Housing Scheme		 Furniture &
Fittings
£
201,545
3,284
-
204,829
175,682
8,811
-
184,493
20,336
25,863		 Motor
Vehicles
£
87,621
-
87,621
87,621
87,621
-
-
2022
£
400,235
-
400,235
2022
£
73,518		 Total
£
7,555,868
6,687
-
7,562,555
657,274
41,694
-
698,968
6,863,587
6,898,594
2021
£
62,248
6,948
69,196
2021
£
145,484

The amount is held in trust by two ex-trustees to facilitate the Hujjat Housing Scheme (HHS). The money is used as a guarantee for first time buyers taking out a Springboard mortgage with Barclays Bank.

11a Creditors: Amounts falling due within one year
Trade creditors
Other creditors
Accruals and deferred income (see Note 11b for deferred income breakdown)		 2022
£
252,552
2,243,461
234,005
2,730,018		 2021
£
24,974
-
250,139
275,113

20 of 23

THE KHOJA SHIA ITHNAASHERI MUSLIM COMMUNITY OF LONDON

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2022

11b Deferred income
At 1 January
Released to income
Deferred in year
At 31 December		 2022
£
289,590
(289,590)
234,005
234,005		 2021
£
250,139
(35,044)
74,495
289,590

Deferred income at the year end relates to education fees and subscriptions paid in advance

12
Creditors: Amounts falling due after more than one year
Bank loan
Other Creditors		 2022
£
14,100,000
10,394,227
24,494,227		 2021
£
-
100,000
100,000

The bank loan attracts interest at 3.25% per annum above the Bank of England base rate. The term of the loan is 3 years expiring on 10 Oct 2025. This term is extendable subject to terms and conditions. The loan is secured over the property at Widewater Place, Harefield only.

Other creditors includes an unsecured advance received from The World Federation of KSIMC (WF), an associated organisation serving members of our community. The advance is towards the acquisition of the property and use of the property by WF with no interest being charged.

13 Unrestricted Funds

Designated fund
Burial
Secular Education
Religious Education
Seniors Activities
Al Haadi
Other
General fund		 At
1 January
2022
£
409,037
16,215
145,601
18,146
1,801
(1,788)
589,012
919,103
1,508,115		 Income
£
212,226
220,766
170,504
15,975
28,083
23,850
671,404
1,299,317
1,970,721		 Expenditure
£
(151,338)
(188,922)
(183,756)
(15,148)
(26,265)
(7,964)
(573,393)
(1,827,296)
(2,400,689)		 Transfers
-
-
-
-
-
-
-
(19,608)
(19,608)		 At
31 December
2022
£
469,925
48,059
132,349
18,973
3,619
14,098
687,023
371,516
1,058,539

Burial fund

Burial fund relates to membership subscriptions for future burial needs.

Secular Education fund

Education fund relates to surplus reserves which the Trustees have designated specifically for future educational uses by Islamic Montessori School and Husaini Tuition Centre.

Religious Education fund

Education fund relates to surplus reserves which the Trustees have designated specifically for future educational uses by Shia Ithnasheri Madressa and Hujjat Saturday Workshop

Seniors Activities fund

Seniors Actvities fund relates to surplus reserves which the Trustees have designated specifically for future uses by the Seniors for their activities

Other fund

Other fund relates funds designated by the Trustees for future use for specific religious activities

21 of 23

THE KHOJA SHIA ITHNAASHERI MUSLIM COMMUNITY OF LONDON

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2022

14 Restricted Funds

Children gifts
Husaini voluntary corps
Sadka and welfare
Relief and Khums
Bewa and yatim
Welfare Loans
Friday Social
Stanmore Jaffery
Library
Medical
Who is Hussein
Ladies activities
Fountain fund
British Sign Language
Covid Fund
Lady Zainab Repairs Fund
Hujjat Orphan Burial Fund
Capital (fixed asset) fund
Foundation Fund
Financial Independent scheme
Revaluation reserve		 At
1 January
2022
£
-
742
15,246
6,079
458
26,700
1,100
(120)
189
353
50
1,256
150
1,579
7,848
408,331
23,673
4,994,539
121
156,224
5,644,518
2,887,720
8,532,238		 Income
£
113
-
79,530
260,134
6,170
8,575
10,117
-
-
-
-
6,242
140
-
37
6,078
-
8,341,528
60
-
8,718,724
-
8,718,724		 At
31 December
Expenditure
Transfer
2022
£
£
£
(2,945)
2,832
-
-
(742)
-
(48,114)
-
46,662
(231,145)
-
35,068
-
-
6,628
(10,000)
-
25,275
(29,856)
18,639
-
(750)
870
-
-
-
189
-
-
353
-
-
50
(5,507)
(1,991)
-
-
-
290
(620)
-
959
(3,500)
-
4,385
-
-
414,409
-
-
23,673
-
-
13,336,067
-
-
181
-
-
156,224
(332,437)
19,608
14,050,413
-
-
2,887,720
(332,437)
19,608
16,938,133

Descriptions of funds

Children gifts - donations given for the benefit of childfren within the community.

Library - funds provided for the provision of Islamic material for use by the membership body.

Husaini Voluntary Corps - donations specifically given for the welfare of the volunteers of the community.

Stanmore Jaffery - comprises funds collected on behalf of and paid to the youth body.

Medical - donations specifically given for medical supplies.

Sadka and welfare - donations collected and to be used for the poor and the needy of the wider community.

Fountain fund - a specific donation given for building a fountain in the centre.

Ladies activities - funds donated for the provision of ladies activities and sports.

Relief and Khums - provision of funds for world relief projects and obligatory religious payments.

Bewa and yatim - donations collected and to be used for the welfare of orphans and widows within the community and abro Welfare Loans - funds donated for Karz e Hasna for eligible members. Welfare loans are kept separate from welfare grants and their repayments are kept in this fund for future such loans.

British Sign Language - a specific donation given to facilitate members who require sign language.

Covid Fund - provision of funds those affected by the Covid 19 pandemic, including grants received from Council.

Lady Zainab Repairs Fund - Fund set up to for repairs and restoration of the Hussaini Shia Islamic Centre

Hujjat Burial Orphan Fund - Fund set up to assist those who cannot afford the cost of burial

Capital fund - donations given in respect to capital expenditure on buildings.

Foundation fund - life subscriptions given by the members of the community.

Financial Independent scheme - donations for future capital projects.

Revaluation reserve - restricted reserve created on revaluation of the properties.

22 of 23

THE KHOJA SHIA ITHNAASHERI MUSLIM COMMUNITY OF LONDON

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2022

15 Analysis of Net Assets between Funds

Analysis of Net Assets between Funds
Fund balances at 31 December 2022
represented by:
Total fixed assets
Net current assets
Total net assets		 General
Funds
£
25,263,253
(24,891,737)
371,516		 Designated
Funds
£
1,547
685,476
687,023		 Restricted
Funds
£
16,223,787
714,346
16,938,133		 Total
Funds
£
41,488,587
(23,491,915)
17,996,672

16 Operating lease commitments

Lessee

At the reporting end date the charity had outstanding commitments for future minimun lease payments under non-cancellable operating leases, which fall due as follows:


non-cancellable operating leases, which fall due as follows:
Within one year
Between one and five years		 2022
£
109,454
59,276
168,730		 2021
£
82,423
53,888
136,311

Lessor

At the reporting end date the charity had contracted with tenants for the following minimum lease payments:

Within one year
Between one and five years		 2022
£
1,311,919
2,335,644
3,647,563		 2021
£
64,300
21,192
85,492

17 Related parties

The Charity, although independent, is involved with a wider network of charities. It is a member of a regional council, The Council of European Jamaats (CoEJ) which represents The KSIMC of London at the global organization, The World Federation of Khoja Shia Ithna-sheri Muslim Communities (WF). Both charities are registered with the Charities Commission in the UK. The World Federation of Khoja Shia Ithna-sheri Muslim Communities represents the charity when dealing with international work which includes disaster and general reliefs outside of the UK. Certain trustees of The KSIMC of London are also trustees of CoEJ and therefore CoEJ is a related party. £260,134 (2021: £205,365) has been collected on behalf of CoEJ and £231,145 (2021: £334,549) - including £1,500 sadka payments - has been paid out to CoEJ. Included within creditors, amounts falling due after more than one year (other creditors) is an amount £8 million from the World Federation. There is no interest attached to this amount.

In 2018 the KSIMC of London received a £100,000 loan from CoEJ via WF to be used for the Hujjat Housing Scheme (HHS). This loan has no set repayment date and no interest will be charged.

The KSIMC of London is a community based organisation and we are reliant on members of the community to provide their time to serve as Trustees of the Charity, for which they do not receive any remuneration. We also encourage the use of community members as the source for people, goods and services. As a consequence of the regular turnover of Trustees due to the 2 year term of each Executive Committee, there are occasions where the Charity has employees (in most cases such employment contracts typically pre date and outlast the Trustee’s tenure) and/or procures goods and/or services from individuals who would otherwise be classified as related parties during the tenure of the relevant Trustee. During 2022, any related party employment contracts and contracts to procure goods and/or services were negotiated and managed independent of the relevant Trustee to ensure that such contracts were bona fide and were dealt with independently and at arm’s length. In 2022 the aggregate of payments by the Charity to such related parties totalled £4,342 (2021: £932).

During the year the charity received donations of £50,697 (2021: £5,651) from the trustees.

During the year the charity took loans from the trustees of £70,000 (2021: Nil). £5,000 was paid back before the year end. £50,000 is due to be repaid in 2023 and £15,000 due to be repaid by 2026. The loans are interest free, unsecured and no guarantees have been provided.

18 Post Balance Sheet Event

The charity finalised an insurance claim of £1.5m in relation to the claim against the works at the property at Wood Lane, Stanmore and it is committed to spend over £2m towards the restoration of the centre.

23 of 23