Charity registration number 1182954
Company registration number 08835716 (England and Wales)
THE MERCY TRUST
ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
THE MERCY TRUST
LEGAL AND ADMINISTRATIVE INFORMATION
Trustees
Y Kansouh
H Nawab
M R Mohammadi Araghi
K Fathi
K Shirazi
Charity number
1182954
Company number
08835716
Registered office
449 Edgware Road
London
W2 1TH
Accountants
Deitch Cooper LLP
3 Hobbs House
Harrovian Business Village
Bessborough Road
Harrow
Middlesex
HA1 3EX
THE MERCY TRUST
CONTENTS
Page
Trustees' report
1 - 2
Accountants' report
3
Statement of financial activities
4
Balance sheet
5
Notes to the financial statements
6 - 9
THE MERCY TRUST
TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT)
FOR THE YEAR ENDED 31 JANUARY 2024
- 1 -

The Trustees present their annual report and financial statements for the year ended 31 January 2024.

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 charity'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)".

Objectives and activities

The charity's objects are:

a) to advance and promote the Islamic religion via the principles and tenets of the Shia Ithna Asheri faith for the benefit of the public in particular but without limitation through the holding of prayer meetings, establishment of religious places and distributing literature to enlighten others about the Islamic religion.

b) for the public benefit to promote the education (including social and physical training) of people anywhere in the world in such ways as the charity trustees think fit.

The Trustees have paid due regard to guidance issued by the Charity Commission in deciding what activities the charity should undertake.

Achievements and performance

The impact of the Covid-19 coronavirus pandemic has temporarily disrupted the performance of charitable activities. After assessing the risks facing the charity and government guidelines, the trustees took the decision to postpone activities until after the end of this reporting period.

Financial review

During the period the charity received no income and incurred no direct costs, due to the disruption caused by the Covid-19 coronavirus pandemic. The charity made a deficit for the year of £613 (2023: £613 deficit). Total funds carried forward amounted to £1,212 (2023: £1,825), which represents wholly unrestricted funds. Unrestricted funds may be used for any purpose that is in the furtherance of the charitable objects, at the discretion of the trustees.

It is the policy of the charity that unrestricted funds which have not been designated for a specific use should be maintained at a level that will ensure that, in the event of a significant drop in funding, they will be able to continue the charity’s current activities while consideration is given to ways in which additional funds may be raised. This level of reserves has been maintained throughout the year.

The Trustees have assessed the major risks to which the charity is exposed, and are satisfied that systems are in place to mitigate exposure to the major risks. The response to risks presented by the Covid-19 coronavirus pandemic, which was considered a major risk this year, was to follow government guidelines and monitor identified risks. In order to ensure the safety of staff, volunteers and beneficiaries, activities that cannot be adequately performed without undue risk have been postponed. Risk processes are periodically reviewed to ensure they meet the needs of the charity in the environment in which it operates.

Plans for future periods

The Trustees plan for the charity to perform religious and educational activities in the furtherance of the charity's objects. Donations in future periods will enable the charity to achieve this goal.

Structure, governance and management

The charity is a company limited by guarantee and is governed by its articles of association, adopted by special resolution dated 13 March 2019.

THE MERCY TRUST
TRUSTEES' REPORT (INCLUDING DIRECTORS' REPORT) (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 2 -

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:

 

Y Kansouh
H Nawab
M R Mohammadi Araghi
K Fathi
(Appointed 14 December 2023)
K Shirazi
(Appointed 14 December 2023)

Trustees are elected by the members or co-opted by the trustees. The articles of association of the company provided details of the requirements to be a trustee and circumstances in which a trustees term of office will automatically terminate. These include ceasing to practice Islam according to the Shia Ithna Asheri Faith. Members have the power to remove a trustee at a general meeting under the Companies Act.

 

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. Membership is terminated if the member concerned ceases to be a trustee.

Trustees hold at least 4 meetings each year. A quorum at a meeting of the trustees is at least three or one third of the trustees (if greater). Any issue may be determined by a simple majority of the votes cast at a meeting or by a written resolution agreed by all the trustees. In the case of equality of votes, the chairman of the meeting has a casting vote.

Trustees must receive no remuneration or material benefit in respect of their duties as trustees. The charity's governing document contains details of permissible payments to trustees. No payments or reimbursements were made to trustees during the year or preceding year.

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).

 

Company Law requires the Trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charity and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that year.

 

The Trustees are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the charity and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The trustees' report was approved by the Board of Trustees.

Y Kansouh
Trustee
4 June 2024
THE MERCY TRUST
CERTIFIED ACCOUNTANTS' REPORT TO THE TRUSTEES ON THE PREPARATION OF THE UNAUDITED STATUTORY FINANCIAL STATEMENTS OF THE MERCY TRUST FOR THE YEAR ENDED 31 JANUARY 2024
- 3 -

In order to assist you to fulfil your duties under the Companies Act 2006, we have prepared for your approval the financial statements of The Mercy Trust for the year ended 31 January 2024, which comprise the statement of financial activities and the related notes from the charity’s accounting records and from information and explanations you have given us.

 

As a practising member firm of the Association of Chartered Certified Accountants, we are subject to its ethical and other professional requirements.

This report is made to the charity's Trustees, as a body, in accordance with the terms of our engagement letter. Our work has been undertaken solely to prepare for your approval the financial statements of The Mercy Trust and state those matters that we have agreed to state to the charity's Trustees, as a body, in this report in accordance with the requirements of the Association of Chartered Certified Accountants. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than The Mercy Trust and the charity's Trustees as a body, for our work or for this report.

It is your duty to ensure that The Mercy Trust has kept adequate accounting records and to prepare statutory financial statements that give a true and fair view of the assets, liabilities, financial position and deficit of The Mercy Trust. You consider that The Mercy Trust is exempt from the statutory audit requirement for the year, and is not required to obtain an independent examiner's report.

We have not been instructed to carry out an audit or a review of the financial statements of The Mercy Trust. For this reason, we have not verified the accuracy or completeness of the accounting records or information and explanations you have given to us and we do not, therefore, express any opinion on the statutory financial statements.

Deitch Cooper LLP
4 June 2024
Accountants
3 Hobbs House
Harrovian Business Village
Bessborough Road
Harrow
Middlesex
HA1 3EX
THE MERCY TRUST
STATEMENT OF FINANCIAL ACTIVITIES
INCLUDING INCOME AND EXPENDITURE ACCOUNT
FOR THE YEAR ENDED 31 JANUARY 2024
- 4 -
Unrestricted
Unrestricted
funds
funds
2024
2023
Notes
£
£
Expenditure on:
Charitable activities
3
613
613
Total expenditure
613
613
Net expenditure and movement in funds
(613)
(613)
Reconciliation of funds:
Fund balances at 1 February 2023
1,825
2,438
Fund balances at 31 January 2024
1,212
1,825

The statement of financial activities includes all gains and losses recognised in the year.

 

All income and expenditure derive from continuing activities.

 

The statement of financial activities also complies with the requirements for an income and expenditure account under the Companies Act 2006.

 

THE MERCY TRUST
BALANCE SHEET
AS AT
31 JANUARY 2024
31 January 2024
- 5 -
2024
2023
Notes
£
£
£
£
Current assets
Cash at bank and in hand
1,825
2,438
Creditors: amounts falling due within one year
8
(613)
(613)
Net current assets
1,212
1,825
Net assets excluding pension liability
1,212
1,825
The funds of the charity
Unrestricted funds
1,212
1,825
1,212
1,825

The company is entitled to the exemption from the audit requirement contained in section 477 of the Companies Act 2006, for the year ended 31 January 2024.

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

The members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476.

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the Trustees on 4 June 2024
Y  Kansouh
Trustee
Company registration number 08835716 (England and Wales)
THE MERCY TRUST
NOTES TO THE  FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
- 6 -
1
Accounting policies
Charity information

The Mercy Trust is a private company limited by guarantee incorporated in England and Wales. The registered office is 449 Edgware Road, London, W2 1TH.

1.1
Accounting convention

The financial statements have been prepared in accordance with the charity's governing document, the Companies Act 2006, FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the Charities SORP "Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)" (effective 1 January 2019). The charity is a Public Benefit Entity as defined by FRS 102.

 

The charity has taken advantage of the provisions in the Charities SORP (FRS102) (2019) not to prepare a Statement of Cash Flows.

The financial statements are prepared in sterling, which is the functional currency of the charity. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.2
Going concern

At the time of approving the financial statements, the Trustees have a reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future. The Trustees have considered the risks facing the charity and are of the opinion that all risks can be adequately mitigated. Thus the Trustees continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Charitable funds

Unrestricted funds are available for use at the discretion of the Trustees in furtherance of their charitable objectives.

Restricted funds are subject to specific conditions by donors or grantors as to how they may be used. The purposes and uses of the restricted funds are set out in the notes to the financial statements.

Endowment funds are subject to specific conditions by donors that the capital must be maintained by the charity.
1.4
Income
Income is recognised when the charity is legally entitled to it after any performance conditions have been met, the amounts can be measured reliably, and it is probable that income will be received.

Cash donations are recognised on receipt. Other donations are recognised once the charity has been notified of the donation, unless performance conditions require deferral of the amount. Income tax recoverable in relation to donations received under Gift Aid or deeds of covenant is recognised at the time of the donation.

Legacies are recognised on receipt or otherwise if the charity has been notified of an impending distribution, the amount is known, and receipt is expected. If the amount is not known, the legacy is treated as a contingent asset.

Income is deferred within creditors if it has been received but performance conditions have not been met.

Income from fundraising activities is recognised in the period in which the related activity is performed.

THE MERCY TRUST
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 7 -

Turnover from trading activities is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts, VAT and other sales related taxes.

1.5
Expenditure

Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit to a third party, it is probable that a transfer of economic benefits will be required in settlement, and the amount of the obligation can be measured reliably.

 

Expenditure is classified by activity. The costs of each activity are made up of the total of direct costs and shared costs, including support costs involved in undertaking each activity. Direct costs attributable to a single activity are allocated directly to that activity. Shared costs which contribute to more than one activity and support costs which are not attributable to a single activity are apportioned between those activities on a basis consistent with the use of resources. Central staff costs are allocated on the basis of time spent, and depreciation charges are allocated on the portion of the asset’s use.

All expenditure relating to charitable activities is recognised on an accruals basis in the period to which it relates.

 

Costs of generating funds are recognised on an accruals basis, which is normally the period in which the related activity is performed or the related service is provided.

 

Those support costs that are not directly attributable to a certain charitable activity are allocated and apportioned between activities on a basis that, in the opinion of the trustees, most fairly reflects how resources have been used.

1.6
Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Basic financial liabilities

Basic financial liabilities, including creditors and bank loans are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of operations from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

Financial liabilities are derecognised when the charity’s contractual obligations expire or are discharged or cancelled.

THE MERCY TRUST
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 8 -
1.7
Employee benefits

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the charity is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

2
Critical accounting estimates and judgements

In the application of the charity’s accounting policies, the Trustees are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

3
Charitable activities

Charitable Activities

Charitable Activities

2024
2023
£
£
Share of support costs (see note 5)
613
613
4
Description of charitable activities

Charitable Activities

The charitable activities of the charity are the organising of religious and educational events in the furtherance of its established charitable objectives.

 

5
Support costs allocated to activities
2024
2023
£
£
Accountancy
600
600
Sundry Expenses
13
13
613
613
Analysed between:
Charitable activities
613
613

In accordance with the Charities SORP (FRS102) (2019), the cost of services donated-in-kind by volunteers has not been included where a true and fair value of their contribution cannot be reliably determined.

THE MERCY TRUST
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 9 -
6
Trustees
None of the Trustees (or any persons connected with them) received any remuneration or benefits from the charity during the year.
7
Employees

The average monthly number of employees during the year, including trustees, was:

2024
2023
Number
Number
3
3
There were no employees whose annual remuneration was more than £60,000.
8
Creditors: amounts falling due within one year
2024
2023
£
£
Accruals and deferred income
613
613
9
Related party transactions

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

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