The Trustees present their annual report and financial statements for the year ended 31 December 2023.
The financial statements have been prepared in accordance with the accounting policies set out in note 1 to the financial statements and comply with the Income Funds's governing document, the Companies Act 2006 and "Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)" (effective 1 January 2019).
The principal object of the Charity is the advancement, preservation and welfare of Islam in accordance with the doctrines of the Shia Ithna-Asheri Jafari faith and this is achieved through offering educational opportunities in the context of nursery, secular and religion education facilities.
ME School of Excellence and Examination Centre
- 80 pupils average during the year
- we offer 95% of all GCSE and A Level exams under the following boards OCR, Edexcel, AQA and WJEC
- 75% of our students securing a Grammar School place
- All GCSE students gained over grade 4 including several level 9 passes in English and Chemistry.
The syllabus and scheme of work developed for Key Stage I and II, in addition, to the bespoke 11+ course and test material, is consistently reviewed and updated in line with the National Curriculum. In Secondary and A Level, MES offer English, Mathematics and all three Sciences from Year 7 to AS2, as well as iGSCE English to students from Year 9 and controlled science experiments.
The Trustees keep under regular review the major risks to which the Charity is exposed, to ensure that steps are taken to mitigate those risks as far as possible.
The Income Funds is a
The Charity is affiliated to the Khoja Shia Ithna-Asheri Muslim Community of Birmingham.
The Trustees, who are also the directors for the purpose of company law, and who served during the year and up to the date of signature of the financial statements were:
None of the Trustees has any beneficial interest in the company. All of the Trustees are members of the company and guarantee to contribute £1 in the event of a winding up.
The Trustees meet regularly to manage strategy and the organisation. The day to day operations for the different educational activities are delegated to nominated individuals. The management of residential investment properties is undertaken by Khoja Shia Ithna-Asheri Muslim Community (Jaafery) Limited ("Jaafery"), the wholly owned subsidiary of the charitable company.
In accordance with the company's articles, a resolution proposing that Deitch Cooper LLP be reappointed as auditor of the company will be put at a General Meeting.
The Trustees' report was approved by the Board of Trustees.
Opinion
We have audited the financial statements of Khoja Shia Ithna-Asheri Muslim Community (Baquir) Limited (the ‘Income Funds’) for the year ended 31 December 2023 which comprise the statement of financial activities, the statement of financial position and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the financial statements:
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Income Funds in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
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 Income Funds’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the Trustees with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The Trustees are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the Trustees' report for the financial year for which the financial statements are prepared, which includes the directors' report prepared for the purposes of company law, is consistent with the financial statements; and
the directors' report included within the Trustees' report has been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Income Funds and its environment obtained in the course of the audit, we have not identified material misstatements in the directors' report included within the Trustees' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
we have not received all the information and explanations we require for our audit; or
the Trustees were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemptions in preparing the Trustees' report and from the requirement to prepare a strategic report.
As explained more fully in the statement of Trustees' responsibilities, the Trustees, who are also the directors of the Income Funds for the purpose of company law, are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Trustees are responsible for assessing the Income Funds’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Trustees either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements, including how fraud may occur, by making enquiries of management and considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations. We also considered potential financial or other pressures, opportunity and motivations for fraud. As part of this, we identified the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations and how management monitor these processes. Appropriate procedures included the review and testing of journals.
We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates including those that relate generally to the operating aspects of the business. There are many laws and regulations, relating principally to the operating aspects of the company, that typically do not affect the financial statements and as such are not captured by the entity's information systems relevant to financial reporting. It is the responsibility of management to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations. The auditor is not responsible for preventing non-compliance and we cannot be expected to detect non-compliance with all laws and regulations. Representations were obtained from the board of directors that there is no identified or suspected non-compliance with any laws and regulations.
Our audit procedures focused on laws and regulations that are generally recognised to have a material effect on the financial statements or a direct effect on the determination of material amounts and disclosures, including the Charities (Accounts and Reports) Regulations 2008 and the Charities Act 2011. We considered the risk of acts by the company that may be contrary to these laws and regulations, including fraud. We assessed the extent of compliance with the laws and regulations identified through making enquiries of management and inspecting documentation and the audit team remained alert to instances of non-compliance with laws and regulations throughout the audit. Any unusual findings were investigated.
As in all of our audits, we also addressed the risk of management override of internal controls including testing and evaluation of whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud. We completed a review of transactions and journals taken from throughout the period. We did not identify any key audit matters relating to irregularities, including fraud.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud my involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the charitable company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and the charitable company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Investments
Cost of raising funds
The statement of financial activities includes all gains and losses recognised in the year.
All income and expenditure derive from continuing activities.
Khoja Shia Ithna-Asheri Muslim Community (Baquir) Limited is a private company limited by guarantee incorporated in England and Wales. The registered office is 17 Clifton Road, Balsall Heath, Birmingham, B12 8SX.
The financial statements have been prepared in accordance with the Income Funds's governing document, the Companies Act 2006, FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the Charities SORP "Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)" (effective 1 January 2019). The Income Funds is a Public Benefit Entity as defined by FRS 102.
The Income Funds has taken advantage of the provisions in the Charities SORP for charities not to prepare a Statement of Cash Flows.
The financial statements are prepared in sterling, which is the functional currency of the Income Funds. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
These financial statements are separate company financial statements of the Charity and not of its group. The Charity is part of a wider group and consolidated financial statements are prepared which include the Charity and its group.
At the time of approving the financial statements, the Trustees have a reasonable expectation that the Income Funds 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.
Unrestricted funds are available for use at the discretion of the Trustees in furtherance of their charitable objectives.
Restricted funds are subject to specific conditions by donors or grantors as to how they may be used. The purposes and uses of the restricted funds are set out in the notes to the financial statements.
Cash donations are recognised on receipt. Other donations are recognised once the Income Funds has been notified of the donation, unless performance conditions require deferral of the amount. Income tax recoverable in relation to donations received under Gift Aid or deeds of covenant is recognised at the time of the donation.
Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit to a third party, it is probable that a transfer of economic benefits will be required in settlement, and the amount of the obligation can be measured reliably.
Expenditure is classified by activity. The costs of each activity are made up of the total of direct costs and shared costs, including support costs involved in undertaking each activity. Direct costs attributable to a single activity are allocated directly to that activity. Shared costs which contribute to more than one activity and support costs which are not attributable to a single activity are apportioned between those activities on a basis consistent with the use of resources. Central staff costs are allocated on the basis of time spent, and depreciation charges are allocated on the portion of the asset’s use.
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the statement of financial activities.
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Investment properties rented to another group entity are accounted for using the cost model. Other investment properties are subsequently measured at fair value at the reporting end date. The surplus or deficit on revaluation is recognised in the income and expenditure account.
Fixed asset investments are initially measured at transaction price excluding transaction costs, and are subsequently measured at fair value at each reporting date. Changes in fair value are recognised in net income/(expenditure) for the year. Transaction costs are expensed as incurred.
A subsidiary is an entity controlled by the Income Funds. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting end date, the Income Funds reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
The Income Funds has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the Income Funds's balance sheet when the Income Funds becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Basic financial liabilities, including creditors and bank loans are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of operations from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the Income Funds’s contractual obligations expire or are discharged or cancelled.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the Income Funds is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
In the application of the Income Funds’s accounting policies, the Trustees are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Estimates include the valuation of tangible assets and investment properties. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Income from charitable activities
Income from charitable activities
Income from charitable activities
Cost of raising funds
Investment property costs
Share of governance costs
Investment property costs
Activities undertaken directly
None of the Trustees (or any persons connected with them) received any remuneration or benefits from the charity during the year.
The average monthly number of employees during the year was:
The charity is exempt from tax on income and gains falling within section 505 of the Taxes Act 1988 or section 252 of the Taxation of Chargeable Gains Act 1992 to the extent that these are applied to its charitable objects.
Investment properties rented to another group entity have been accounted for using the cost model. Other investment properties are carried at fair value. The fair value of the revalued investment property has been arrived at by the Trustees from reviewing market evidence, from sources not connected with the charity, and nearby recent transactions and events.
The long-term bank loan represents an interest-only mortgage relating to certain investment properties, repayable other than by instalments. A market rate of interest is charged until the loan is repaid.
Bank loans are secured by way of charges over investment properties owned by the group.
The Charity operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the Charity in an independently administered fund.
The unrestricted funds of the charity comprise the unexpended balances of donations and grants which are not subject to specific conditions by donors and grantors as to how they may be used. These include designated funds which have been set aside out of unrestricted funds by the trustees for specific purposes.
During the year, there was a donation of £3,000 from Lady Sumayya Humanitarian Aid Foundation an organisation in which Muslim Khoja is one of the trustees. (2022: £nil).
The company has taken advantage of the exemption available under FRS102 whereby it has not disclosed transactions with the ultimate parent undertaking or any wholly owned subsidiary undertaking of the group.
These financial statements are separate company financial statements of the Charity and not of its group.
Separate company financial statements of the Charity are required to be prepared by law. The Charity is exempt by virtue of the Companies Act 2006 from the requirement to prepare group accounts. Separate consolidated financial statements which include the Charity and all its subsidiaries are prepared and publicly available.
Details of the Charity's subsidiaries at 31 December 2023 are as follows:
Investments in subsidiaries are all stated at cost.
The ultimate controlling party is the Khoja Shia Ithna-Asheri Muslim Community of Birmingham (UK registered charity no. 1170675), whose principal place of business is 17 Clifton Road, Balsall Heath, Birmingham, B12 8SX. The Khoja Shia Ithna-Asheri Muslim Community of Birmingham prepares publicly available group accounts in which the Charity is consolidated.