The trustees present their annual report and financial statements for the year ended 31 March 2025.
The financial statements have been prepared in accordance with the accounting policies set out in the notes to the financial statements and comply with the charity's governing document, the Companies Act 2006, FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" 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)".
Message from CEO, Lucy Lees
As we reflect on the past twelve months, we are immensely proud of Mahdlo Youth Zone’s achievements and the life-changing impact we continue to create across Oldham. In a year marked by growing challenges for young people and families, rising living costs, increasing isolation, and widening inequality, Mahdlo has remained a constant source of support, opportunity, and hope.
The charitable objectives as set out in the Memorandum and Articles are “to help and educate children in the North West of England through their leisure time activities by promoting their full physical and spiritual potential in order that they may grow to full maturity as individuals and members of society and that their conditions of life may improve”.
Our mission is “to deliver high quality activities and experiences for young people from Oldham aged 8-19 (25 with a disability) to enhance the quality of their lives and provide support services for those who need additional help to achieve their potential.”
We achieve this through our six programme areas:
Get Active – Young people’s participation in a wide range of sports and physical activities at a ‘try, train or team’ level that promote good health, fitness and build self-esteem.
Get Creative – Utilising the specialist dance studio, music room and media suite young people can engage in a broad range of arts and media opportunities that develop creativity skills and confidence.
Get Outdoors – We give young people the chance to get out of their usual neighbourhood, experience outdoor adventure and reconnect with the environment promoting confidence, teamwork and social skills.
Get Sorted – Young people are able to access support around personal health and wellbeing issues. We link with existing services in the town to ensure we are supporting young people to access the information advice and guidance they really need. Through one-to-ones and group workshops, we promote healthy minds, lifestyles and positive choices.
Get Ahead – We recognise that getting the right skills and support is key to getting ahead. With the help of partners and local businesses, our team support young people to get on the right path for the future.
Get Connected – We want young people to play a real role in the running of Mahdlo and to have a clear and coherent voice in the wider community. We support them to be more connected through community projects and volunteering opportunities that promote citizenship and leadership skills.
The activities of the charity are undertaken to further its charitable purposes for public benefit and, in shaping our objectives for the year and planning our activities, the trustees have considered the Charity Commission’s guidance on public benefit, including the guidance “public benefit: running a charity (PB2)”. The trustees have paid due regard to guidance issued by the Charity Commission in deciding what activities the charity should undertake.
The provision of a high-quality facility for young people responds to a clear, ongoing demand from young people, parents and the wider community for more and better places for young people to go. Our universal services, mainly based around our Get Active, Get Creative and Get Outdoors offer, are open to all young people in Oldham. For those experiencing disadvantage or needing additional support we offer additional targeted services. Short-term outcomes are happier young people making healthier choices with increased social skills, achievements and enhanced aspirations. This has the wider impact of improved health and wellbeing, reduced crime, enhanced learning and employability and greater community cohesion.
This year, Mahdlo Youth Zone continued to stand as a vital lifeline for Oldham’s young people and families, responding to deepening social and economic challenges with compassion, innovation, and measurable impact.
In a borough where 44% of children live in poverty, and youth isolation and anxiety are among the highest in the region, Mahdlo’s role has never been more critical. We have continued to provide a safe, inclusive, and inspiring environment, somewhere to go, something to do, and someone to talk to.
Over the past year, Mahdlo delivered 4,800 hours of sessions across its programmes, with 4,981 young people registered as members.
69% of members live in the most deprived communities.
44% identify as from BAME backgrounds.
20% have a disability or additional needs.
19% of Oldham’s care-experienced young people attended Mahdlo.
Our youth work continues to deliver measurable outcomes:
78% of members reported increased or maintained self-confidence.
71% improved or maintained social skills.
68% increased or maintained mental wellbeing.
75% reported a stronger sense of belonging and community.
Recognising the ongoing cost-of-living pressures, Mahdlo continued its commitment to removing barriers to participation. We provided 19,976 free meals, ensuring that every young person accessing our services could do so without worrying about basic needs.
Creativity remained at the heart of our approach, nurturing self-expression and resilience through art, performance, and enterprise. Our enterprise projects enabled young artists to sell their work, with one young member’s artwork raising £760 at the Mahdlo Ball, symbolising the transformative power of self-belief and opportunity.
From mentoring programmes that helped young people secure employment and education, to leadership pathways such as the 39 Young Leaders who volunteered within Mahdlo, we are creating a generation of confident, community-minded young adults.
The journey of Shaunnine, who progressed from young member to Youth Work Manager, exemplifies Mahdlo’s investment in people, demonstrating how early engagement can lead to professional and personal success.
Our success is powered by dedicated staff and volunteers, who contributed 5,560 hours of their time this year. Mahdlo now employs 60 local residents, supported by an incredible network of 178 volunteers, patrons, and corporate partners.
Our partnerships with local schools, the council, and community organisations have enabled us to reach more young people than ever before, especially those experiencing poverty, isolation, and reduced access to leisure or educational opportunities.
The statement of financial activities (page 14) shows an increase in total income, from £1.53m for FY2024 to £1.76m for FY2025. Details of the main income sources and the variances between the two years can be found in notes 3 to 9 of the financial statements. Total expenditure (note 8 & 9) has increased to £1.86m (FY2024: £1.68M), resulting in a deficit for the year of £105k compared with a deficit of £151k for FY2024. The effect of the deficit on the balance sheet (page 15) is that the charity’s net assets have reduced from £6.24m as at 31 March 2024 to £6.14m as at 31 March 2025. Of that amount, £5.29m are restricted funds and £0.85m unrestricted.
The Board of Directors of Mahdlo has established a reserves policy, in compliance with which it will annually review both the sum it wishes to hold in reserve in the unrestricted budget and the basis for that figure. The Directors continually strive to manage the charity’s finances so that an adequate level of reserves can be maintained in compliance with the reserves policy.
Reserves to be maintained at a level, which ensures that at least 3 months of the organisation’s core activity, could continue during a period of unforeseen difficulty.
That these reserves are readily realisable unrestricted reserves and are in addition to funding the fixed assets.
This level of reserves has been agreed for the following reasons:
To provide working capital to allow for retrospective funding and the associated time difference between expenditure and receipt of funds.
Mahdlo’s income sources (particularly the Patrons programme and fundraising activities) are vulnerable to changes in the economic situation and any notice period for loss of major donors could be relatively short.
To support new service development to enable Mahdlo to be responsive to beneficiary needs and to facilitate improvements to the operational running of the organisation.
To ensure that the building can be kept fully functional, well equipped and in a good state of repair and remains a major attraction and asset.
To invest in staff and volunteer training and development to ensure quality of service delivery.
To enable Mahdlo to meet its delivery commitments without interruption in times of economic hardship.
To be seen as a responsible charity by the Charity Commission, our Funders, partners and the community that engage with Mahdlo.
To avoid the creation or retention of unnecessary surpluses for which there is no planned requirement in line with the organisation’s charitable aims.
Due to the type of funding Mahdlo can and is likely to access, which can take up to 6 months to secure, there is a need for a longer-term policy to increase reserves to an appropriate amount of working capital to fund these time delays. This will be achieved by:
Developing a funding strategy that enables forward planning of income generation including targets over and above immediate running costs.
Prioritising fundraising activities and events and ensuring a continual focus on fundraising not just in times of need.
Appropriate accounting, including building into budgets, accounts and reports a sum for depreciation.
Building Mahdlo’s reputation as a quality charity, worthy of support and investment.
This reserves policy will be reviewed by the Chief Executive and the Board on an annual basis. It is the intention to increase reserve levels incrementally toward 6 months as the organisation’s activity grows.
With having relatively low unrestricted reserves and a variable income stream, funds built up in advance of expenditure need to be reasonably liquid; however, some funds may be retained and invested for future use. To ensure such investments are safeguarded:
Any decision about investments will be made by the Board (potentially having taken professional advice) considering the suitability and diversification of investments, including investments in deposit accounts, to ensure that the failure of one investment or institution does not have a major impact on Mahdlo.
Investments will be made in line with Mahdlo’s values and ethos.
Investment performance will be regularly reviewed.
Records will be maintained of all investments held (including details of all those sold or purchased) by the charity.
Accounting controls will be fully implemented to ensure that all dividends or interest payments due are received and accounted for.
As we look ahead, Mahdlo will continue to expand its reach and relevance across Oldham’s communities. Our priorities include:
Extending access to those unable to attend our town centre facility through outreach and partnership-based delivery.
Investing in our workforce, building capacity through training, development, and wellbeing support.
Deepening impact measurement, using data and youth voice to continuously improve the quality and inclusivity of our offer.
Strengthening sustainability, by broadening our base of patrons, donors, and corporate supporters in an increasingly competitive funding landscape.
Above all, we remain unwavering in our mission, to empower every young person in Oldham to thrive, discover their potential, and shape a brighter future for themselves and their community.
The Board of Trustees
The Board comprises 12 Trustees including the Chair. Individual Trustees hold portfolios relevant to their professional backgrounds and interests. These include Finance, Fundraising, HR, Safeguarding and Facilities management.
Trustees can be nominated for a fixed period. One third of the Trustees will retire by rotation at each Annual General Meeting. Retiring Trustees can be reappointed. The Trustees meet on a bi-monthly basis.
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:
New trustees will be recruited according to the needs of the charity and the suitability of possible candidates. The unanimous approval of existing Trustees would lead to their appointment.
The Memorandum and Articles of Association state that the number of members shall have no maximum and shall not be less than three.
Full details of the rules are contained in the company’s Memorandum and Articles of Association which may be inspected at the registered office.
Induction of Trustees
Newly appointed trustees are provided with a comprehensive induction to Mahdlo through the provision of in-house training. This includes key information about the organisation and its development, governance and safeguarding. The Board undertakes annual strategy reviews. Individual appraisals between Trustees, the Chair and Chief Executive have been implemented to develop Board capacity.
Governance
Mahdlo (Oldham Youth Zone) is a charity and a company limited by guarantee without share capital. Mahdlo is registered under the Companies Act 1985, registration number 06946098. The company is governed by its Memorandum and Articles of Association, dated 27th June 2009. Management of the company’s affairs is vested in the co-directors.
In the event of a winding-up, the present members and those who have ceased to be a member within one year of such an event have guaranteed the liabilities of the company to the sum not exceeding one pound each.
Mahdlo is governed by its board of Trustees which retains overall responsibility for the strategic direction and the policy of the organisation. The Trustees carry the ultimate responsibility for the conduct of Mahdlo and for ensuring that the charity satisfies its legal and contractual obligations.
The Board approves the strategic plan, the 3 year plan and the annual Business Plan and scrutinises business performance including financial performance as well as providing advice to the Chief Executive on operational matters of importance.
A Chief Executive is appointed by the Board to manage the day-to-day operations. To facilitate effective operations the Chief Executive has delegated authority as approved by the Board for operational matters including finance, human resources and operational delivery allowing the Chief Executive to support the Board in developing and delivering strategy and ensuring the agreed Business Plan KPI’s are met.
The senior management team has a range of qualifications and experiences including Accountancy, Youth Work, HR and Facilities management. The Board agreed the structure during annual Business Planning and are required to approve any substantial changes to the Senior Team.
All salaries are benchmarked by an independent HR specialist against other Youth Zones, Local Authority and the local labour market. The board agrees all pay increases as a result of cost of living during the Business Planning cycle. Any new post created at any level requires CEO, HR and Finance approval. Senior posts would be agreed by the Trustee with HR portfolio prior to presentation to Board.
All posts are subject to interview and are advertised internally and/or externally.
Mahdlo is part of the family of youth zones established by OnSide. We have a network agreement with OnSide, which allows us to be part of a large, trusted youth organisation, which has the ability to lobby government and access support from large funders, and share best practice within the network. A representative of OnSide operates as a Trustee on the Mahdlo Board ensuring a strategic communications link exists between Mahdlo and OnSide.
Risk Management
The Board fully accepts its responsibilities under the Charity Commission’s Statement of Recommended Practice (SORP). The Trustees have considered the major risks to which the charity is exposed and are committed to ensuring these are effectively managed.
The Chief Executive and senior managers have undertaken comprehensive risk assessments and established risk registers from an organisational and operational perspective and have established suitable risk management and control procedures which are reviewed regularly by the Board.
Key risks to the organisation include Financial, Reputational, Regulatory and Operational.
The Risk Register is updated quarterly and reported to Board with major risks highlighted and control measures discussed. Comprehensive financial accounts including cash flow, I&E and the Balance sheet are reported to Board bi-monthly.
The Key financial risks relate to funding shortfalls and uncontrolled expenditure. As with most charities, developing sustainable funding streams in order to deliver Mahdlo’s objectives is of paramount importance. The overall strategy is to balance restricted funding from specific projects and grants with unrestricted funds primarily from Patrons, Donors and fundraising events. In the longer term, a key objective is to develop commercially viable income streams, which will underpin core delivery.
Expenditure is tightly managed with operational managers responsible for budgets relating to their operational responsibilities. Costs are monitored and managed by the CEO and the senior management team using the organisation’s centralised staff management system.
Regulatory risk is the responsibility of the CEO, Finance manager and Facilities manager who manages Health and Safety and Fire and other statutory risk areas. The Board is appointed and reviewed within the context of Charities Commission guidelines, and new regulatory judgements will be reported to Board as required.
The key operational risks are managed through operational risk planning with a clear hierarchy of responsibility. Specific procedures exist to manage Safeguarding and Health and Safety.
The trustees, who are also the directors of Mahdlo (Oldham Youth Zone) for the purpose of company law, 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.
In preparing these financial statements, the trustees 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; and
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in operation.
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.
In accordance with the company's articles, a resolution proposing that BK Plus Audit Limited 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 Mahdlo (Oldham Youth Zone) (the ‘charity’) for the year ended 31 March 2025 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 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 charity’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report.
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 charity 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
certain disclosures of trustees' remuneration specified by law are not made; 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 charity 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 charity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the 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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,including fraud is detailed below:
Based on our understanding of the charitable company, we identified that the principal risks of non-compliance related to those laws and regulations that have a direct impact on the financial statements such as the Companies Act 2006 and the Charities SORP (FRS 102). We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to manipulate financial results and management bias in accounting estimates. Appropriate audit procedures were performed to address those risks including testing journal entries and challenging assumptions and judgements made by management in their significant accounting estimates. There are inherent limitations in the audit procedures described above 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 would become aware of it. Also, 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 may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
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.
The statement of financial activities includes all gains and losses recognised in the year. All income and expenditure derive from continuing activities.
Mahdlo (Oldham Youth Zone) is a private company limited by guarantee incorporated in England and Wales. The registered office is Egerton Street, Oldham, OL1 3SE.
The members of the company are drawn from throughout Oldham's civic, business, education and training, and voluntary sector communities. In the event of the charity being wound up, the liability in respect of the guarantee is limited to £1 per member of the charity.
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" 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)". The charity is a Public Benefit Entity as defined by FRS 102.
The Charity meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historic cost or transaction value unless otherwise stated in the relevant accounting policy notes.
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, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
At the time of approving the financial statements, the trustees have a reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future. Thus the trustees continue to adopt the going concern basis of accounting in preparing the financial statements.
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.
Items of income are recognised and included in the accounts when the charity is legally entitled to the income, any performance conditions attached to the item(s) of income have been met or are fully within the control of the charity, there is sufficient certainty that receipt of the income is considered probable and the amount can be measured reliably. The following specific policies apply to categories of income:
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 receipt.
Donated services or facilities are recognised when the charity has control over the item, any conditions associated with the donated item have been met, the receipt of the economic benefit from the use by the charity of the item is probable and that economic benefit can be measured reliably. On receipt, donated services and facilities are recognised on the basis of the value of the gift to the charity which is the amount the charity would have been willing to pay to obtain services or facilities of equivalent economic benefit on the open market; a corresponding amount is then recognised in expenditure in the period of receipt.
Grants for core funding, which do not impose performance related conditions, are recognised when received. Grants towards specific project costs are recognised based on the performance model, as the project is delivered.
Income relating to contracts is deferred where the services have only been partially performed at the year end.
Investment income
Investment income is recognised on a receivable basis. |
|
|
Expenditure is recognised once there is a legal or constructive obligation to make a payment to a third party, it is probable that settlement will be required and the amount of the obligation can be measured reliably. Expenditure is classified under headings that aggregate all costs related to the category. Where costs cannot be directly attributed to particular headings they have been allocated to activities on a basis consistent with use of the resources..Costs relating to a particular activity are allocated directly, others are apportioned on an appropriate basis (eg. number of employees or estimated usage). Expenditure is classified under the following activity headings:
- Costs of raising funds are those costs incurred in trading activities that raise funds.
- Charitable expenditure comprises those costs incurred by the charity in the delivery of its activities and services, and include both the direct costs and support costs relating to these activities.
- Governance costs, which are included within charitable activities, 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.
Individual fixed assets costing £500 or more are capitalised at costn and ddepreciation 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).
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition. Items held for distribution at no or nominal consideration are measured the lower of replacement cost and cost.
Cash at bank and in hand includes cash and short term highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account.
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 company is a registered charity and as such is entitled to the exemption from tax to the extent that the income received falls within section 505 ICTA 1988 and section 256 CGTA 1992 and is applied to charitable purposes only.
Fund accounting
Unrestricted funds comprise accumulated surpluses and deficits on general funds that are available for use at the discretion of the trustees/directors in furtherance of the general objectives of the Charity and that have not been designated for other purposes.
Restricted funds are funds subject to restrictions imposed by the donor or by the specific terms of the appeal under which the funds are raised.
Designated funds comprise unrestricted funds that have been put aside at the discretion of the trustees/directors for particular purposes.
Holiday pay
The holiday year end does not coincide with the financial year end and consequently, provision is made in the accounts for holidays accrued but not taken as at the end of the financial year.
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.
The average monthly number of employees during the year was:
The charity considers its key management personnel to comprise the trustees and the chief executive officer. The total employment benefits excluding employer pension contributions of the key management personnel was as follows:
The charity is exempt from taxation on its activities because all its income is applied for charitable purposes.
The company has no share capital, and the liability of members is limited by guarantee to £1 per member.
Deferred income is included in the financial statements as follows:
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.
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.
There is a contingent liability in connection with a grant relating to the charity's long leasehold property whereby if, during a period of 20 years from the date of the grant offer letter dated 28 February 2009, the charity shall be in breach of any of the grant conditions, the grant shall be repayable upon receipt of a written demand from The Secretary of State for Education. The amount of the grant was £4,994,577 and The Secretary of State for Education holds a legal charge over the charity's long leasehold property in respect of this potential liability.
During the year the charity received the following income from related parties without conditions. Donations received from trustees in the year were:
As of 31 March 2025, the charity purchased goods and services for £430 (2024: £16,268) and there was balance of £nil (2024: £6,973) to PSO Trading Ltd which is a related party. There were also amounts owed by Bedspace Resources Ltd and The Mahdlo Endowment Trust for £nil (2024: £3,330) and £375,400 (2024: £425,400) respectively. Services totalling £1,125 were made to Monteros (UK) Ltd.
Mrs J Barker, a trustee/director of the charity, is a trustee of The Barker Foundation.
Mr J Ainley, a trustee/director of the charity, is a partner in North Ainley Solicitors.
Mr P Axon, a trustee/director of the charity is a director of PSO Trading Ltd.
Mr C Wareing is a trustee/director of the charity and a director of Bedspace Resourcs Ltd.
Matthew Taylor is a trustee/director of the charity is a partner of James Scott Accountants.
T Flanagan, is a trustee/director of the charity and a director of Monteros (UK) Ltd.
The Mahdlo Endowment Trust is a separate charity, whose objects are to support the charitable work of Mahdlo (Oldham Youth Zone). Mr J Ainley and Mrs J M Barker, trustees of Mahdlo (Oldham Youth Zone), are also trustees of The Mahdlo Endowment Trust.