The Directors present their annual report and financial statements for the Period 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 charity's [governing document], the Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended) 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 Al-Maktoum College of Higher Education was founded in 2001 to bridge the possible gap between the Muslim and western worlds by focusing on intelligent debate and scientific understanding of Islam and the role of Muslims in the contemporary world. In its relatively short history, over 1800 students from over 40 countries have successfully graduated from College programmes. The College has widened its scope as a Scottish Qualifications Authority (SQA) Centre and has collaborative arrangements with several higher education institutions at home and abroad.
During the period, the College has embarked on implementing its strategy for 2022 – 2027. The vision for the next phase of our development is to be a higher education institution dedicated to multi-cultural learning, recognised internationally, nationally, and locally for the quality of its teaching and research.
The objective of the college, since it’s foundation by the late Shaikh Hamdan Bin Rashid Al-Maktoum, has been to establish itself as an internationally acclaimed, independent, free standing university college. To get there, it has been necessary to form links with several partner institutions, and to enable the College to engage in teaching and award degrees under the auspices of these institutions. This has proved at times a fraught process. But the objective was to get us in a position where we can award degrees ourselves, and to do so as an institution which brought credit to the name of the College, and the memory of our late founder.
The College corporate and academic governance operated successfully during period from 1st August 2022 to 31st December 2023. The Academic Council along with its main Committees (Teaching, Learning and Student Experience Committee, Academic Quality and Standards Committee and the Boards of Study) have operated effectively and efficiently in ensuring academic standards at the College and governing the efficient delivery of the academic programmes. The College Council and its committees, Finance and General Purposes and Community Services Committee have continued to provide support and valuable advice to the College management team. This serves to ensure the College is functioning in accordance with a clear structure and rationale to achieve its stated aims and objectives.
The Scottish Qualifications Authority (SQA) remains the College’s main accrediting body providing SCQF accreditation to our suite of customised awards as well as SQA HNC/HND qualifications. As a result, we continue to engage with the Students Awards Agency for Scotland (SAAS) who approve the College as a Scottish private college and training provider. This allows students taking SQA HNC/HND qualifications at the College access to government funding, we aim to increase the offering of these qualifications at the College.
The College continues to be recognised as a provider of UK higher education by the Quality Assurance Agency (QAA) having successfully undergone a Higher Education Review and UK Visa & Immigration (UKVI) as a Sponsor. We work extremely hard to ensure this highly important recognition is maintained.
The relationship with the University of Dundee is progressing satisfactorily. The MSc programmes in Islamic Finance continue to be offered and are gaining in academic reputation as manifested by the levels of student recruitment. Recruitment on the PhD programmes in Islamic Finance has also seen significant interest and have recruited several candidates undertaking postgraduate research. These programmes generate significant income for the College from tuition fees. Addition of further pathways on the MSc programme as well as an undergraduate degree programme in Islamic Accountancy and Finance were agreed and will be offered from September 2024.
Further to the establishment of the ‘Al-Maktoum Centre for Middle Eastern Studies’ at Trinity College Dublin, the MPhil programme in ‘The Middle East in a Global Context’ accredited by Trinity College Dublin has been offered as an online course since September 2022. Plans are progressing to offer this as a hybrid programme with students based in Dundee.
Two of the programmes offered in collaboration with Abertay University, MSc Strategic Organisational Learning, and MSc Moral Economy, Sustainable Development have recruited well when first offered in January and September 2023. The Postgraduate research programme was also launched towards the end of 2023 and students are currently being recruited. Discussions are on-going to add to the range of programmes on offer.
This is in addition to the existing articulation agreement with Abertay University providing a route into 2nd or 3rd year university degree programme in relevant subjects upon successful completion of HNC/HND programmes in Business, Human Resource Management and Management & Leadership offered at the College.
We believe that with these links, we are on our way to being an independent, self-sustained institution, both academically and financially. And there are further possible links which would, if successful, further strengthen our position. Our strategic plans provide an indication of the potential for the College to become increasingly financially sustainable as a result of current and future growth and development initiatives. We continue to seek to develop new income streams, through developing a blended learning and online learning approaches to our teaching and assessment. This has contributed already to the growth in our student numbers, and we are seeking to continue to invest in and develop our teaching approaches.
The financial results are set out in the statement of financial activities on pages 7 - 8.
The College is funded primarily through donations from the Al-Maktoum Foundation to continue to support the College's programmes. The College continues to develop other revenue streams to ensure it is financially and operationally sustainable.
The Al-Maktoum College will hold reserves for the following main purposes:
A working balance to help cushion the impact of uneven cashflows and avoid unnecessary temporary borrowing - this forms part of the Unrestricted (General) Reserves.
A contingency to cushion the impact of unexpected events or emergencies - this also forms part of the Unrestricted (General) Reserves.
Types of Reserves
Reserves are the funds that are available which can be freely spent on any charitable purpose. Reserves can be categorised as Unrestricted (General) or Restricted.
Unrestricted (General) Reserves
Unrestricted (General) Reserves Unrestricted Reserves are funds which do not have any restrictions as to their use. The level of Unrestricted Reserves is a matter of judgement and so this policy does not attempt to prescribe a blanket level. The primary means of building general reserves will be through an allocation from the annual budget. This will be in addition to any amounts needed to replenish reserves that have been consumed in the previous year.
Restricted Reserves
Restricted reserves will be established on a "needs“ basis, in line with anticipated requirements. Restricted Reserves that have been used to meet a specific liability (or project) would not need to be replenished, having served the purpose for which they were originally established.
Current level of financial reserves
The Board of Directors have considered the reserves required by the College, having taken into account their current and future liabilities. The directors aim to maintain unrestricted (General) funds, which are those not committed or invested in tangible fixed assets, at a level which equates to approximately six months unrestricted charitable expenditure. The directors consider that this level will provide sufficient funds to ensure that both ongoing charitable expenditure and support and governance costs are covered. The directors consider it will be prudent to add to the general reserves each year to maintain an adequate level of reserves. This level of general reserves will be maintained through topping up the reserves out of any savings realised during the year and/or by inclusion of a percentage amount to the annual budget as required.
At present the free reserves amount to £1,129,540 (2022 - £1,263,666). The free reserves amount means that the conditions of the reserves policy have been met this year.
Total reserves amount to £1,175,139(2022 - £1,315,728) of which restricted reserves amount to £45,599 (2022 - £52,062).
Policy Monitoring and Review
It is recognised that the reserves policy is not a static document as needs may change, the financial position of the College may change or plans may alter. If reserves during the year fall below or exceed target, the College should consider whether this is a short term situation or an indicator of a long-term issue. In such cases action may be required to replenish or spend reserves. This highlights the need for active monitoring and review of the policy.
This policy will be monitored on a quarterly basis and reviewed and approved annually (at financial year-end) by the Senior Management Team.
The main source of funding for the College continues to be the Al-Maktoum Foundation in Dubai. Income representing 30-40% of the College's operational budget is raised from student tuition fees and other income generation activities.
All the College's funds are to be spent in the short term so there are no funds for the long term.
The overriding objective for the College is to embark on the road towards financial sustainability, we should be operating as an educational business with a clear business strategy for effective income generation, growth, and development. We will continue to further develop our potential, and to have a clear philosophy in place to enable us to put a model for future growth into practice in all that we do in the future.
Our key strategic priorities for the future include:
1. The College will constantly strive for excellence as we continue our commitment to delivering high quality and affordable education in different disciplines with a range of courses, offering value for money, competitive tuition fees with flexible payment options.
2. Working with our partners we will continue to develop educational programmes and professional development courses to establish, maintain and enhance a distinctive contribution to society at the local, national, and international levels. In addition, we will significantly increase student numbers and maximise our income generation activities.
3. Fully explore the potential for innovative teaching methods developing potential for Blended/Hybrid and fully on-line teaching methods to reach wider markets widening access to educational programmes and demonstrating flexibility.
4. Further to the development of the Dundee Centre for Business Excellence, develop and deliver a range of residential training and development programmes aimed at governmental and corporate levels in a range of areas.
5. Our organisational culture will continue to embrace and value the richness that a diverse, multicultural student and staff community brings to the life of the College. We will continue to be multi-disciplinary - linking studies of different cultures with business, finance and associated subjects, striving for quality in all that we do and deliver.
Charitable grants and donations
During the period the company made charitable grants and donations amounting to £8,317 (2021 - £59,011). Small donation applications are considered by a sub-committee of the College Council members.
Company status
The company is limited by guarantee under the Companies Act 2006 and is a recognised charity. The liability of the members is limited to £1. Permission has been granted by the Secretary of State for Trade and Industry for the word “Limited” to be omitted.
Members of the Board of Directors
Members of the Board of Directors, who are directors for the purpose of company law and trustees for the purpose of charity law, who served during the period and up to the date of this report are set out on page 1.
The organisation is a charitable company limited by guarantee, incorporated on 26 March 2001 and obtained charitable status from the Inland Revenue with effect from 26 March 2001 and registered as a charity with the Scottish Charity Regulator (OSCR). The company was established under a Memorandum of Association which established the objects and powers of the charitable company and is governed under its Articles of Association.
All directors are already familiar with the practical work for the College and are familiar with the following:
The obligations of the Board of Directors members.
The main documents which set out the operational framework for the charity including the Memorandum and Articles.
Resourcing and the current financial position as set out in the latest published financial statements.
Future plans and objectives.
The directors have considered a policy on induction and training prior to new directors being approached. This includes an awareness of a director's responsibilities, the governing document, administrative procedures, the history and philosophical approach of the charity. A new director trustee would receive copies of the previous period’s financial statements, minutes of directors’ meetings and a copy of the OSCR leaflet “Guidance for Charity Trustees - acting with care and diligence appropriate.
Training is offered to current directors as and when required.
Key management
The directors consider the board of directors, which includes the Head of College and Vice Chancellor, comprise key management personnel of the charity in charge of directing, controlling, running, and operating the College on a day-to-day basis. One director is remunerated in his capacity as Head of College and Vice Chancellor. A further director (now deceased) was reimbursed expenses for attendance at board meetings. The remuneration of the Head of College is reviewed annually and normally increased in accordance with average earnings.
The directors of the company are also charity trustees for the purposes of charity law and under the company's Articles are known as members of the Board of Directors. Under the requirements of the Memorandum and Articles of Association there is no age limit for members of the Board of Directors.
Organisational Structure
The Al-Maktoum College of Higher Education is managed under the authority of the Board of Directors. The directors determine the strategy and general policy of the College. The Head of College and Vice Chancellor is the Chief Executive Officer of the College, who may delegate part of his authority and responsibility to any senior member of the College.
The College corporate and academic governance continues to operate successfully. The Academic Council along with its main Committees (Teaching, Learning and Student Experience Committee and Academic Quality and Standards Committee) operate effectively and efficiently in ensuring academic standards at the College and governing the efficient delivery of the academic programmes.
Corporate Governance at the College has seen substantial restructuring with several changes been introduced. The main change was to disband the College Council as an advisory body. The Board of Directors was expanded with several members of the College Council transitioning to the new Board. The Memorandum and Articles of Association were also updated.
The College is now embarking on the next phase of its journey, to reconnect with its early achievements and to drive forward an exciting path of development and growth to ensure its sustainable success. We are demonstrating our contribution and longevity within higher education, as a valid, authoritative, and high-quality provider of programmes and inter- and multi-disciplinary research relating to the subject areas of interest.
Risk Management
The directors have assessed the major risks to which the College is exposed, in particular those related to the operations and finances of the College and are satisfied systems have been put in place to mitigate the College’s exposure to the major risks. These procedures are periodically reviewed to ensure that they continue to meet the needs of the College. The principal risk is the reliance on continued funding from Al-Maktoum Foundation in Dubai. This is mitigated by submitting budgets for the following year to the funder and seeking approval well in advance of the year end. In addition, the College has embarked on a growth strategy, setting up new partnerships, increasing programmes of study on offer, recruiting more students, generating income from tuition fees, and developing new income streams.
In so far as the directors are aware:
There is no relevant audit information of which the charitable company's audit is unaware; and
The directors have taken all steps that the ought to have taken to make themselves aware of any relevant audit information and to establish that the audit is aware of that information
This report has been prepared in accordance with the special provisions of Part 15 of the Companies Act 2006 relating to small entities.
The Directors' report was approved by the Board of Directors.
The directors, who also act as trustees for the charitable activities of #cd2, are responsible for preparing the Directors' 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 Directors 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 Period.
In preparing these financial statements, the Directors are required to:
- select suitable accounting policies and then apply them consistently;
- observe the methods and principles in the Charities SORP;
- make judgements and estimates that are reasonable and prudent;
- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in operation.
The Directors 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 Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended) and 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.
Opinion
We have audited the financial statements of Al-Maktoum College of Higher Education (the ‘charity’) for the Period ended 31 December 2023 which comprise the statement of financial activities, the balance sheet, the statement of cash flows 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 charity 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 the provisions available for small entities, in the circumstances set out in note 29 to the financial statements, 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.
Material Uncertainty relating to Going Concern
In auditing the financial statements, we have concluded that the Directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
We draw your attention to note 1 in the financial statements with regard to the going concern of the company. As stated the financial needs of the company are met with support from the Foundation in Dubai. At the time of approving the accounts no formal confirmation had been received regarding the full funding and there had been historical delays in funding being received. The directors are confident this funding will be forthcoming.
The uncertainty over the receipt of the full funding required indicate that a material uncertainty exists which may cast doubt on the ability of the charity’s ability to continue as a going concern, although the accounts continue to be prepared on a going concern basis.
Our opinion is not modified in respect of this matter
Our responsibilities and the responsibilities of the Directors 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 Directors 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:
In our opinion, based on the work undertaken in the course of our audit:
the directors' report included within the Directors' report has been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the charity and its environment obtained in the course of the audit, we have not identified material misstatements in the directors' report included within the Directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 and the Charities Accounts (Scotland) Regulations 2006 (as amended) requires us to report to you if, in our opinion:
adequate and proper 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 Directors 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 Directors' report and from the requirement to prepare a strategic report.
As explained more fully in the statement of Directors' responsibilities, the Directors 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 Directors 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 Directors are responsible for assessing the charity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.
We have been appointed as auditor under Chapter 3 of Part 16 of the Companies Act 2006 and section 44(1)(c) of the Charities and Trustee Investment (Scotland) Act 2005 and report in accordance with the Acts and relevant regulations made or having effect thereunder.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material mis-statements in respect of irregularities, including fraud and non-compliance with laws and regulations is detailed below
The audit team has appropriate skills and expertise required and through discussions with management and Directors knowledge of the sector to ensure any non compliance is recognised and all necessary disclosures are made. The controls in place help the charity mitigate the risk of fraud and also aids them in highlighting any instances of fraud that might have occurred.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Making enquiries of management about any known or suspected instances of non compliance with laws and regulations, including GDPR, health and safety employment law and fraud
Enquiries of Management and Directors as to where they consider the susceptibility to fraud and their knowledge of how actual, suspected and alleged fraud might occur
Review of any correspondence with regulators including HMRC and grant providers such as Skills Development Scotland
review of Board Minutes
Challenging assumptions and judgements made by management in their significant accounting estimates
Auditing the risk of management override controls, including through testing of journal entries and bank transactions and other judgments for appropriateness
Legal fees were reviewed to ensure they were correctly disclosed.
review of any areas where there is a potential of management bias, large and unusual transactions
Because of the field in which the client operates we identified the following areas as those most likely to have a material impact on the financial statements:
Direct impact on financial statements:
SORP FRS 102
The Charities Accounts (Scotland) Regulations 2006
Charities & Trustees Investment (Scotland) Act 2005
HMRC Regulations
Indirect impact on financial statements:
Healthy and Safety Act
Employers Public Liability Insurance
GDPR
Employment Law
SQA Accreditation
Charity's constitution
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
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 and to the charity’s trustees, as a body, in accordance with regulation 10 of the Charities Accounts (Scotland) Regulations 2006. Our audit work has been undertaken so that we might state to the charitable company's members and 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 charitable company, the charitable company’s members as a body,and the charitable company’s trustees as a body, for our audit work, for this report, or for the opinions we have formed.
The statement of financial activities includes all gains and losses recognised in the Period. All income and expenditure derive from continuing activities.
The notes on pages 15 to 30 form part of these financial statements.
The notes on pages 15 to 30 form part of these financial statements.
The notes on pages 15 to 30 form part of these financial statements.
Al-Maktoum College of Higher Education is a private company limited by guarantee incorporated in Scotland. The registered office is 124 Blackness Road, Dundee, DD1 5PE.
The financial statements cover the period from 1 August 2022 until 31 December 2023. There was a change of year end which has resulted in the longer period to align the reporting period with the main charitable donor. The comparative amounts included within the financial statements cover a 12 month period to 31 July 2022.
The financial statements have been prepared in accordance with the charity's [governing document], the Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended), 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 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.
The charitable company has suffered a loss in the year and expects a loss in the current year. The directors have undergone a detailed review of costs to reduce overheads and this has been carried out in the current year and they continue to monitor costs and income very closely. The directors continue to assess the performance of the college against the budgets and projections prepared and maintain costs if the funding from the Foundation in Dubai is limited. The financial needs of the charitable company are met from the college's activities and regular support from the Foundation. The College is making good progress working with the university partners to develop new opportunities and maximise income from tuition fees and other sources. This is an important part of the College's strategy to develop new and sustainable income streams and decrease the dependence on core funding from the Foundation. The directors also recognise the continuing present and historical delays in the receipt of core funding which has made it challenging at times to manage the cashflow during these delays. After recent discussions with the Foundation in Dubai they remain confident this funding is imminent and will continue going forward. Based on this at the time of approving the financial statements, the Directors are satisfied that the charity has adequate resources to continue in operational existence for the foreseeable future. Thus the directors 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 Directors 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 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.
Fees
Income from fees is included in income in the period to which it relates and includes all fees chargeable to students or their sponsors, e.g. The Al-Maktoum Foundation in Dubai.
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.
Governance costs include those costs associated with meeting the constitutional and statutory requirements of the charity and include the audit fees and costs linked to the strategic management of the charity.
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.
At each reporting end date, the charity 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 charity 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 charity's balance sheet when the charity 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 charity’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 charity 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.
The college participates in the Universities Superannuation Scheme. The scheme is a hybrid pension scheme, proving defined benefits (for all members), as well as defined contribution benefits. The assets of the scheme are held in a separate trustee-administered fund. Because of the mutual nature of the scheme, the assets are not attributed to individual institutions and a scheme-wide contribution rate is set. The institution is therefore exposed to actuarial risks associated with other institutions employees and is unable to identify its share of the underlying assets and liabilities of the scheme on a consistent and reasonable basis. As required by section 28 of FRS102 'Employee benefits', the institution therefore accounts for the scheme as if it were a wholly defined contribution scheme. As a result, the amount charged to the profit and loss account represents the contributions payable to the scheme. Since the institution has entered into an agreement (the recovery plan) that determines how each employer within the scheme will fund the overall deficit, the institution recognises a liability for the contributions payable that arise from the agreement (to the extent that they relate to the deficit) and therefore an expense is recognised.
FRS102 makes the distinction between a group plan and a multi-employer scheme. A group plan consists of a collection of entities under common control typically with a sponsoring employer. A multi-employer scheme is a scheme for entities not under common control and represents (typically) an industry-wide scheme such as Universities Superannuation Scheme. The accounting for a multi-employer scheme where the employer has entered into an agreement with the scheme that determines how the employer will fund a deficit results in the recognition of a liability for the contributions payable that arise from the agreement (to the extent that they relate to the deficit) and the resulting expense in the profit or loss in accordance with section 28 of FRS102. The directors are satisfied that Universities Superannuation Scheme meets the definition of a multi-employer scheme and has therefore recognised the discounted fair value of the contractual contributions under the funding plan in existence at the date of approving the financial statements.
The College also operates a defined contribution pension scheme which requires contributions to be made to a separately administered fund. Contributions to this fund are charged to the statement of financial activities in the year they are payable
The cost of providing benefits under defined benefit plans is determined separately for each plan using the projected unit credit method, and is based on actuarial advice.
The change in the net defined benefit liability arising from employee service during the year is recognised as an employee cost. The cost of plan introductions, benefit changes, settlements and curtailments are recognised as incurred.
Rentals payable under operating leases, including any lease incentives received, are charged as an expense on a straight line basis over the term of the relevant lease.
In the application of the charity’s accounting policies, the Directors 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.
Tangible fixed assets are depreciated over period to reflect their estimated useful lives. The applicability of the assumed lives is reviewed annually, taking into account factors such as physical condition, maintenance and obsolescence. Fixed assets are also assessed as to whether there are indicators of impairment.
Credit control is an important function which requires assessment, on an ongoing basis, of the recoverability of amounts due from debtors. Where recovery is in doubt, the directors will adequately provide against this specific debt and will arrive at such conclusions based on the knowledge of the debtor and their "ability to pay". The directors adopt a prudent approach to credit control.
In the directors' opinion the defined benefit pension scheme deficit liability results from a significant estimate, calculated using information from the pension scheme actuary in compliance with FRS102. The actual performance is unlikely to be in line with the actuarial valuation as a result of the valuation being based upon assumptions on the future unpredictable events such as return on assets and mortality rates. The estimate has a material impact on the financial statements.
Gross college fees
Less: Scholarships/fee waivers awarded
Ancillary trading income
Other income
Teaching costs
Teaching support costs
Premises costs
Summer school for United Arab Emirates students
Academic training programme for United Arab Emirates students
Pension deficit movement
These donations were individual amounts given to each organisation.
(a) - to provide general support to Greenpeace
(b) to (f) - to provide general support to the school
(g) - to provide general support to the sports team
(h) - to provide general support to Helm Training
(i) - to provide general support to the NESS charity
Cyclathon & Claverhouse Rotary - to provide support to the event to raise funds for charity
DCBE - to provide sponsorship of the event
Claverhouse Trust - provide a donation towards the school hardship fund
Gulf Conference - donation towards costs of the conference
Abubaker Abubaker received total remuneration in the period including employers national insurance contributions of £161,205 (2022 - £121,877).
Business expenses were reimbursed to two directors in the 17 month period relating to travel expenses and amounted to £36,536 (2022 - 14,940).
The average monthly number of employees during the Period was:
The remuneration of key management personnel was as follows:
The charity consider its key management personnel to comprise of directors, which includes, the head of college.
The charity is exempt from taxation on its activities because all its income is applied for charitable purposes.
The property which the charity occupies is rented on a long term lease from Meadowbrook Limited, a company associated to our Patron. The amount paid each year is a nominal value and less than the market value however the rental market value is not easily identifiable to include as part of the financial statements
Deferred income is included in the financial statements as follows:
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 restricted funds of the charity comprise the unexpended balances of donations and grants held on trust subject to specific conditions by donors as to how they may be used.
Restricted funds included in the accounts relate to monies received for specific capital expenditure. The works carried out have been capitalised and future depreciation will be offset against the funds.
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.
The total cost charged to the profit and loss account is £52,133 (2022 - £29,724). Also included within pension costs in the profit and loss account is £12,178 (2022 - (30,442) in relation to the movement in amounts due in relation to the defined benefit pension deficit. The latest available complete actuarial valuation of the Retirement Income Builder is at 31 March 2020 (the valuation date), which was carried out using the projected unit method.
Since the institution cannot identify its share of USS Retirement Income Builder assets and liabilities, the following disclosures reflect those relevant for those assets and liabilities as a whole.
The 2020 valuation was the sixth valuation for the scheme under the scheme-specific funding regime introduced by the Pensions Act 2004, which requires schemes to adopt a statutory funding objective, which is to have sufficient and appropriate assets to cover their technical provisions. At the valuation date, the value of the assets of the scheme was £66.5 billion and the value of the scheme's technical provisions was £80.6 billion indicating a shortfall of £14.1 billion and a funding ration of 83%
At 31 March 2023, an interim assessment was performed, with the value of the assets and technical provisions of the scheme being calculated at £88.9 billion and £91 billion respectively, indicating a shortfall of £2.1 billion and a funding ratio of 98%. The next full actuarial valuation is expected in 2024.
The key financial assumptions used in the 2020 valuation are described below. more detail is set out in the Statement of Funding Principles.
Pension Increases (CPI) Term dependent rates in line with the difference between the fixed interest and index linked yield curses less: 1.1%pa to 2030, reducing linearly by 0.1%pa to a long term difference of 0.1%pa from 2040.
Discount rate Fixed interest gilt yield curve plus: Pre-retirement: 2.75%pa Post-retirement: 1.00%pa
The main demographic assumption used relates to the mortality assumptions. These assumptions are based on analysis of the scheme's experience carried out as part of the 2020 actuarial valuation. The mortality assumptions used in these figures are as follows:
Mortality base table 101% of S2PMA 'light' for males and 95% of S3PFA for females
Future improvements to mortality CMI 2019 with a smoothing parameter of 7.5, and initial addition of 0.50% pa and a long term improvement rate of 1.80% pa for males and 1.60% for females
The main demographic assumption used relates to mortality assumptions. These assumptions have been updated for the 31 March 2023 accounting position of the pension scheme, based on updated analysis of the Scheme's experience carried out as part of the 2020 actuarial valuation. the morality assumptions used in these figures are as follows:
2023 2022
Males currently aged 65 (years) 23.9 23.9
Females currently aged 65 (years) 25.5 25.5
Males currently aged 45 (years) 25.9 25.9
Females currently aged 45 (years) 27.3 27.3
A deficit recovery plan was put in place as part of the 2020 valuation, which requires payment of 6.2% of salaries over a period from 1 April 2022 until 31 March 2024, at which point will increase to 6.3%. The 2023 pension liability provision reflects this plan. the provision figures have been produced using the following assumptions.
2023 2022
Discount Rate 2.65% 2.65%
Pensionable salary growth n/a n/a
Pension increases (CPI) 2.53% 2.53%
At the reporting end date the charity had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
The college received revenue funding of £1,318,069 (2022 - £1,193,458) from the Al-Maktoum Foundation in Dubai. The former patron, His Highness Shaikh Hamdan Bin Rashid Al-Maktoum was the Chairman of the Al-Maktoum Foundation in Dubai and Mr Mirza Al-Sayegh, a Director is also a trustee of the Al-Maktoum Foundation in Dubai.
The charity had no material debt during the year.
In common with many businesses of our size and nature we use our auditor to assist with the preparation of the financial statements.