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Company registration number: 5441337

Charity registration number: 1110114

DAWAT-E-ISLAMI UK

(A company limited by guarantee)

Annual Report and Financial Statements

For the Year Ended 31 May 2018

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DAWAT-E-ISLAMI UK

Contents

Reference and Administrative Details 3

Strategic Report 4

Trustees' Report 6

Statement of Trustees' Responsibilities 43

Independent Auditors' Report 44

Statement of Financial Activities 47

Balance Sheet 49

Statement of Cash Flows 50

Notes to the Financial Statements 51

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DAWAT-E-ISLAMI UK

Reference and Administrative Details

Trustees

Mr Khalid Nazir Mirza

Mr Mughal (resigned 3 March 2018)

Mr Mohammad Saddiq (resigned 3 March 2018)

Mr Rafaqat Ali (resigned 3 March 2018)

Mr Muhammad Jami I

Mr Mohammed Waseem Nazir (appointed 3 March 2018 and resigned 9 July 2018)

Mr Hassan Ali Safdar (appointed 3 March 2018)

Mr Basharat Mohammad ( appointed 3 March 2018)

Secretary

Mr Khalid Nazir Mirza

Principal Office

Cannon Street Bolton BL35AP

Registered Office

Cannon Street Bolton BL3 SAP

Company Registration Number

5441337

Charity Registration Number

1110114

Bankers

HSBC Bank pie

Auditor

Riaz Ahmad & Co Limited Registered Auditors Lord House

51 Lord Street Manchester M3 lHE

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DAWAT-E-ISLAMI UK

Strategic Report for the Year Ended 31 May 2018

The trustees, who are directors for the purposes of company law, present their strategic report for the year ended 31 May 2018, in compliance with s414C of the Companies Act 2006.

Achievements and performance

We continue to offer praying facilities, religious education and community services in a large number of towns and cities across United Kingdom. We also operate a 24/7 TV Channel exclusively for the religious purposes, with no advertising.

Our fundraising is our strength and continues to hold and grow despite austerity and state of the economy.

New centres have been acquired in Burnley, Bolton, Manchester and Luton. Leeds project construction is also on target.

Financial review

The Charity enjoyed another successful year. Fundraising increased in line with inflation and we were able to contribute to charitable causes and also acquired four new centres in Manchester, Luton, Bolton and Burnley.

Policy 011 reserves

The Charity has strong, unrestricted and restricted; reserves and this will ensure long time sustainability.

Funds in deficit

There are no funds in deficit.

Principal fu11di11g sources

Public donations are the main source of funding. We run special events as well as regular collections ate Friday's prayer times. We do not receive any grants or political donations.

Investment policy and objectives

We only invest in the opening new centres and increasing our footprint throughout United Kingdom.

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DAWAT-E-ISLAMI UK

Strategic Report for the Year Ended 31 May 2018

Principal risks and uncertainties

Safeguarding

Risk: Centre provides religious education to children

Action:

All Staff regardless of duties are DBS checked. Staffs are given Safeguarding training.

Fire Safety Risk: Large congregations in our buildings

Action:

Regular Fire, Electricity and Gas inspections and certifications Building kept in good state of repair. Emergency lighting installed, exits fully signposted.

Radicalisation Risk: Students being preached extremism

Action:

Prevent Training Al documentation is checked and vetted by management Aims and Objectives of the Organisation do not lend themselves to extremism

Health & Safety Risk: Physical Well being of all attendees at the Centres

Action:

Risk assessment carried out on all buildings First Aid Training provided to key personnel First Aid Kits in every building Paediatric training provided in all Centres

The strategic report was approved by the trustees of the charity on 5 November 2018 and signed on its behalf by:

Mr Khalil:! Nazir Mirza Trustee

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DAWAT-E-ISLAMI UK

Trustees' Report

The trustees, who are directors for the purposes of company law, present the annual report together with the financial statements and auditors' report of the charitable company for the year ended 31 May 2018

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Trustees Report: Dawate lslami UK

Financial Year End May 31st 2018

Report for Dawat e lslami UK

Charity Number 1110114

Registered Company Number 5441337

Registered Office

Dawat e lslami UK Head Office

48 Cannon Street

Bolton

BL3 SAP

In the name of Allah, Most Merciful, Most Kind

Message from the Chairman

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This year Dawat e lslami UK has achieved what was once considered a dream. During this year we

had our first set of students graduating from our Islamic College in Bradford which is producing

English speaking scholars. This is a 6 year full time course and in years to come these graduates will

serve the community across the UK in our centres as well as other Islamic centres. 15 Students

graduated and all of them are now serving the community in different departments.

PERSONAL INVITATION

WE CORDIALLY INVITE YOU TO ATTEND

THE GRADUATION CEREMONY OF

JAMIA TUL MADINA UK

UNDER SUPERVISION OF

NI GRAN E SHU RA

MAULANA HAJI IMRAN ATTARI

FAIZAN E MADINA MAUDSLEV STREET• BRADFORD• B03 9LE

u 17 GRADUATION STARTING AT 2PM

FOR MORE INFORMATION CONTACT 07961 166660

MADANI CHANNEL SKY 828

Most have gone into teaching this course at the establishment where they graduated. Going forward

in the following years the new graduates will be encouraged to assist us in opening other centres

across the UK where this course can also be held. Some have taken up the position of Imam and

others have been involved in provided teaching to other courses including courses for new Muslims

Currently this course is being provided at

1. Bradford (Maudesley Street campus)

2. Birmingham (Stechford)

3. Slough

In Slough we have already outgrown the capacity and the trustees have decided that in the new

academic year it will move to our newly purchased Luton premises.

In the following year we aim to provide this course at the following centres

1. Bradford (Maudesley Street campus)

2. Birmingham (Stechford)

3. Luton

4. Leicester

5. Blackburn

6. Rochdale

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Another major achievement in the last financial year is the opening of the sister's jam ia in Bradford

at our Harris Street site. The course is similar to the brother's course but 5 years instead of 6. The

demand for this course has been huge and we have to enrol only limited students.

With regards to the sisters jamia we plan to open in Birmingham in this financial year and Rochdale

or Bolton in the next financial year

As previously mentioned Jamia was a dream of the trustees 10 years ago. The aim is to produce

English speaking scholars; male and female who can serve the community and understand the needs

of the people of this country.

With regards to other areas of progress we have managed to increase our madressah (after school

classes) capacity by over 30%

In this financial year (June l51 2017 till May 31st 2018), the work of Dawat- e - Isla mi UK has once

again continued to go from strength to strength

We have been able to serve more people and provide more services for public benefit than ever

before.

Some of our other achievements.

Work is taking place in virtually all of our buildings in the UK to improve the services we are provided

to the local communities, below are just a glimpse of some of the work that is taking place

Leeds

This is a huge project. When the project started it was our 1st purpose built masjid. Because of the

size of the project by time of completion it will no longer be our 1 st as others have been built

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Preston

This building was purchased in the last financial year and is now up and serving the community

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New Acquisitions

Burnley

This was another area where the demand was increasing for us to establish a centre.

A building was purchased that was previously a church was purchased for £180,000. Being a

relatively new building there was not a lot of external work required. Work inside was required for

ablution facilities, prayer hall, classrooms etc. but with the great support of the community this was

very quickly completed and is a now a fully functioning centre which serves a large community in

Burnley and surrounding areas. Pictures below show the appeal poster as well as the completed

building

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Dawat-e-lslami INTERNATIONAL NON POLITICAL MOVEMENT OF THE HOLY QUR'AN & SUNNAH

Contact Numbers: 07545 779337 07828 594566 07534 446008

Bank Name: HSBC

Account Name:

DI L SHIRE 1

Account No: 45128943

Sort Code: 40-27-15

Reference: FMBURNLEV

A receipt will be issued for all dona lions and building will be used specifically for

a Masjid and Madrassa, also many other uses.

BRIERCLIFFE ROAD BURNLEY 8B10 lXA Please donate with the intention of giving permission to Dawat-e-lslami to use for any righteous Madani cause.

1 UNIT PRICE: £200

IOTAl PRICE: £200,000 1000 UNITSNEEDED

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Bolton.

Although we already had a project on Cannon street in Bolton, this is very close to capacity use. Prior

to buying Cannon street, local representatives in consultation with the trustees identified 5 areas in

Bolton where centres were required. Cannon street is in the Deane area. The other 4 areas of Bolton

are Great lever, Lady bridge, Farnworth and Halliwell. Following the completion of work required at

Cannon Street, the next project was discussed and a property came on the market in the Deane

area. It was previously a community centre (so no planning issues) and in the heart of the

community. This was purchased for £415000. Unlike the canon street building this needs extensive

refurbishment work and will probably take in the region of 2 years to raise the funds and complete

the work.

Manchester

A major city in the UK where we were struggling to find a building. Previously we had attempted to

buy a building in Manchester but problems occurred when the searches and surveys were done. As a

result of not being able to fulfil that project the trustees were actively looking for a building. The

building located was in the heart of the community and after a little discussion with the owner a

price of £425000 was agreed upon. The timescales for completion where very short, but with the

help of local supporters the deadline was met. After a small refurbishment the 1st phase of the

building has now opened and after school classes take place

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For More info:

07766024050 - 07q006022q6 - Attari@Dawat<2islami

Luton

Luton was another area where we have been working and we quickly got to the stage where we

needed a building. Unlike the North of England, the further south you go the property prices

increase. A property came up in Luton which was suitable for our needs, however the asking price

was £1.2 million. This would become our most expensive building purchase. After several meetings

with local volunteers and trustees the decision was finally made to purchase the building and the

price of £1,150,000 was agreed upon. Extensive funding would be required to be able to purchase

this building. The trustees decided that we should use our satellite channel to assist us in this and we

had a one day telethon to raise funds for the building

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P OJECT

U SKYU

91 High Street Leagrave,

Luton, W4 9JU. .--- -����

- ----�

Fund raising

Held on

September 2017

3:00 PM (UK Time)

For the establishment of every

kind of DAWAT-E-ISLAMl1S

worldly and religious departments, Please co-operate for the purchase of this buitding.

� ��UK£ 100 i� Per Unit

We Need £ 1.2

'LLL,111..11'-l=all �J BANK NAME: HSBC nne OF ACCOUNT; DAWATEISLAMI NAFlLA

ACCOUNT NO: 85128951

SORT CODE: -40-27-15

IBAN; GB52MIOL40271585128951

ere: MIDLGB21058

Telephone 0121-3189292

0121-3182541

0121-31898.(8

0121·3187866

ft\ Whatsapp � 07902764025

Following the telethon on the 10th September we completed the purchase 9 days later on the 19th

September

Our Future

Plans for the future have been drawn up. The trustees have in place are 1 year, 2 year, 5 year and 10

year plans were we hope to deliver further public benefits across the cities and towns of the UK.

This year we have been able to exceed our goals which have given all our members a positive feel

that we can achieve our future targets.

We hope that the following year will enable us to go from strength to strength, but this is only

possible with the support of all the hard workers who are mainly volunteers who sacrifice their time

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to support our work and also the general public who support us financially. We hope we can

continue to receive the support of all so we can move from strength to strength

Khalid Mirza

Chairman

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Board of Trustees

Company directors - known as trustees - make up our Board of Trustees, which directs and controls

the organisation. The Board of Trustees sets our future aims and priorities, focussing on strategic

planning and governance, and also evaluates our performance and progress in our work to alleviate

poverty and suffering. The Board of Trustees appraises the Executive management team and can

make appointments to these positions as well as dismissals. The Board of Trustees also makes sure

that we satisfy the regulatory requirements on us as a charity.

Recruiting and appointing trustees

All of our trustees are volunteers, chosen because they have the diverse range of skills, knowledge

and experience that we need to respond to the challenges of today. In recent years we have not

been able to find suitable trustees and are constantly looking to improve the strength of the team

Trustees Code Of Conduct

A trustees code of conduct policy is in place whereby all trustees must read sign and abide by

Current Trustees

1. Khalid Nazir Mirza

2. Muhammad Jam ii

3. Hasan Ali Safdar

4. Muhammad Basharat

5. Waseem Khan

Governing document

Dawat e lslami UK refers to the charity incorporated as a company limited by guarantee in England

and Wales, with a governing document known as Memorandum and Articles originally dated 3rd May

2005. Dawat e lslami UK is also registered with the Charity Commission of England and Wales.

Objectives and Activities

To advance the Islamic faith for the benefit of the public in accordance with the teachings of Ahle

Sunnat wal Jamaat. Namely Dawat e Islam i. Brelwi school of thought by following the doctrines of

Shah Ahmed Raza Khan, Sheikh Abdul Haq Muhadith Dehlvi, Hazrat Syed Pir Mehr Ali Shah Golarvi

and Hazrat Muhammad llyas Attar Qadri; may the blessing of Allah be upon them all.

The above objectives are fulfilled with various activities; namely

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Madrassah tul Madinah

After school madrassahs providing Quranic and Islamic education to children after school. This is

currently taking place in 21 centres with 3625 students; which is an increase on previous year of

1153 students and increase of over 30%. Student breakdown on 31st May 2018 was 2005 boys and

1620 girls

In 2015 the trustees identified the need for quality training for all madrassah teachers and with this

in mind, training was provided for all teachers. The trustees are now pleased to announce that all

teachers are now qualified to teach and all teachers have the necessary DBS checks done on them.

All teachers are required to pass an examination to be able to teach, if the teacher is lacking then

assistance is provided in the form of one to one training to enable them to pass the relevant

examinations.

There are two levels of qualification.

1. Qaida Test. This allows the teacher to teacher the qaida: the Arabic alphabet and basic rules

2. Nazra. This enables the teacher to be able to teach the students to read the actual Quran

applying the rules learned in the Qaida

If a teacher has passed the test but has not taught for a period of 3 months then he/she is required

to take the test again.

If at any time the head teacher in the madrassah feels the need for any teacher to do the test again

then he/she will be requested as such

The department heads (one male for boy's side and one female for girls side have the responsibility

to periodically visit all of the UK madrassah and ensure the quality standards that we have set out

are being met. At the same time they will go around and provide the necessary teaching training for

teachers and check the administration side of the establishment to ensure adequate records are

being kept and policies and procedures are being followed.

The demand for our after school is such that the combined waiting list of all out madrassah is over

2500. With this in mind last year trustees had taken it upon themselves to asses each building as to

what is the capacity of the building, do we need more space or more teachers. As a result of this we

have been able to increase our capacity as can be seen with the figures above. This is an ongoing

process to ensure we get maximum usage of our buildings and resources available

In those areas where there is a great demand and sufficient manpower exists the trustees have

agreed that they will look into the possibility of buying or renting suitable buildings

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Masjids.

These are the heart of any Islamic community. Providing Muslims facilities to fulfil the Islamic right of

praying 5 times a day this is currently being provided in 25 centres

Madrassah tul Balighan. :Quranic and Islamic classes for elders.

These are traditionally provided in the evening before the final prayer and are a 41 minute class for

adults. This is currently taking place in 51 places and class size always fluctuates with an average

class size of 10-12

Jamia tul Madinah

Residential (Bradford) and non-residential (Birmingham) jamias are running and have been running

for 6 years. In years to come these will provide the future English speaking scholars and imams for

the UK

We have successfully completed our 1st graduation of students from the jamia. These jamias (in

Bradford and Birmingham) will in years to come provide the UK with English speaking scholars and

Imams relieving all the Mosques with the need to bring scholars and !mamas from abroad.

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The above picture shows the main jamia residence in Bradford.

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Students taking their half yearly exams in Bradford

Outreach work (known as Madani qaffilas)

This is where brothers will travel to a different masjids in a different locality and stay there for a

minimum of 3 days. During this period they will be taught the basics of Islam as well as providing the

same service to the locals in that community

Visiting people in the local community.

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Self-rectification cards (known as Madni Ina mat cards)

These are provided for brothers and sisters. These self-rectification cards are filled in daily with

intention to improve themselves not only from a spiritual point of view but also to improve one's

character

An application has also been created for this were you can fill in the card online or on your mobile

phone

Madani Channel.

Sky 828 is a channel run by Dawat e lslami UK to widen the message to all in the UK

Originally this channel was 100% urdu, but gradually in the UK we have started to record English

programmes. These have been very beneficial especially in those cases were the topics are affected

the youth today; social issues etc.

In the next year we aim to increase the English recordings. These will be recorded in our Bradford,

Rochdale and Birmingham centres were some of the rooms have been modified to use as a studio

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Bradford Studio

Courses.

Short courses ranging from a few hours to 41 days are provided throughout the UK and cover topics

that are needs by the Muslim community

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These courses include the following

1. Basic Quran

2. Blessings of Ramadhan (21 days)

3. Taharat (purity course: 7 days)

4. Hajj Training (1 day)

5. Umrah Training (1 day)

6. The Prophets Life (5 days)

7. New Muslims Course

8. Washing and Shrouding the Body Course

9. Salah Course

10. Isiah e amal course. (Character improvement course)

11. 3 day residential dawah course for sisters

12. 12 day residential dawah course for sisters

13. 12 day residential dawah course for brothers

14. lmamat Course (6 months) for Brothers

15. Faizan e Shariat Course for Sisters.

Unless otherwise stated, the above courses are for brothers and sisters.

These courses take place in virtually all our buildings. In most cases they are at weekends or take

advantage of school holidays. If anybody wishes to participate in any of the courses then they need

to contact the local centres where details are available. Most of these courses have limited places.

Students of all ages attending our basic Quran course

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Funeral rights course

Weekly ljtems (gatherings)

Weekly ijtemas take place in all of our centres.

For brothers this takes place on Thursday evening and sisters on Sunday mornings. In those towns

were we don't have buildings permission is sought from the other mosques for these weekly

gatherings

There are more than 50 brothers and more than 100 sister's gatherings every week.

Attendance in these gatherings varies from 20 to 200

These gatherings cover topics that are traditional as well as those topics that are the need of the

day; for example drugs, alcohol, gangs, knife crime, bullying, ill effects of internet etc. All speeches

are vetted and checked before use.

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Funeral services and bereavement support.

When a person in the community passes away support is provided to the family and all the Islamic

funeral rights are assisted with.

This will include bathing and shrouding the deceased as well as assisted in the actual burial.

Gatherings are also held pray for and to attain blessing for the deceased in our centres

As well as assisting in the funeral rights of the deceased, we also provide training at our centres

where we train individuals to wash the deceased and shroud the deceased

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Going forward we are aiming in 2019 to provide full facilities at our centres whereby from the point

of when the person passes away, through to the funeral Dawat e lslami will assist them. This will

include transporting the deceased, assisting in paperwork, coroner's report, obtaining the plot etc.

We will also arrange special gatherings at the request of the deceased whereby Quran recitation and

extra prayers are recited to assist the deceased after they have departed this world.

Qurbani.

Sacrificing an animal once a year at a specific time is considered obligatory on Muslims. Dawat e

lslami has been able to provide this service for thousands of people in the UK and the animals were

all sacrificed in Pakistan were we have a good relationship and the meat was distributed amongst

the poor and needy in the country.

The chairman has visited Pakistan twice during the year to ensure that this meat is distributed

correctly and also to audit other funds sent

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Zakah.

Muslims are expected to donate 2.5% of their savings annually to specific good causes. Dawat e

lslami has provided this service to the Muslims of UK, whereby their funds have been distributed to

those people and good causes who are able to receive these funds.

Collecting funds including zakah outside shopping centre

Jaloos.

Every year to celebrate the birth of the Prophet Muhammad (peace and blessings be upon him) The

Muslims hold various celebrations as well as various gatherings take place. Amongst other things a

jaloos (march) take place to show their devotion. Dawat e lslami either joins the jaloos in their cities

or if 1 does not take place Dawat e lslami takes the lead

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A jaloos taking place in Scotland

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Fundraising Methods

Charity boxes have continued to be a very good source of our donations.

, r J

• :. I u rt 1 t�r■.-... ·.�·.I

. -�, I •· l .,, , � • '"'"-.... - -- J tll : .,-

--.....__ .

. ·-- .

These money boxes are being placed in business and hiomes. Policies and procedures are in place

with regards to collection methods.

All money box collectors have ID cards.

The trustees also made us of the satellite channel this year to raise funds to pay the wages of the

madressah staff

The trustees have also looked at the accounts and realised that our banking expenses are increasing

significantly. The main reason for this is that the majority of collections are cash and banking

chances are huge for this. For this reason the trustees have looked at other ways of collecting funds.

Worldpay, paypal, donate by text, standing orders etc have all been employed in the hope to reduce

our banking costs. The benefits of this are that we will reduce our banking costs and managing our

funds are a lot easier.

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Responsibilities of Directors and Trustees

The Annual Report and the Financial Statements are prepared according to the relevant law and

regulations and approved by the directors.

Under company law, the directors have to prepare financial statements for each financial year, and

have chosen to prepare the group and parent company financial statements according to the United

Kingdom Generally Accepted Accounting Practice (United Kingdom accounting standards and

applicable law).

In line with company law, the directors only approve the financial statements when they are

satisfied that they give a true and fair view of the state of affairs, and of the profit or loss for that

period.

In preparing the financial statements, the directors must:

• Choose suitable accounting policies and apply them consistently

• Make reasonable and prudent judgements and accounting estimates

• State whether applicable UK accounting standards have been followed, subject to any material

departures disclosed and explained in the financial statements

• Prepare the financial statements on the going concern basis - unless it is inappropriate to presume

that the company will continue in business.

The directors must keep adequate accounting records, and these have to show and explain our

transactions. The records must also disclose our financial position with reasonable accuracy at any

time, and enable directors to ensure that the financial statements comply with the Companies Act

2006 and the Charity Commission Statement of Recommended Practice (SORP) 2005.

Directors also have to safeguard our assets, and this means taking reasonable steps to prevent and

detect fraud or other irregularities.

Public benefit

We develop strategic plans to make certain that we provide maximum public benefit and achieve

our strategic objectives, which fall under purposes defined by the Charities Act 2006.

The trustees along with the members have drawn up 1 year, 2 year, 5 year and 10 year plans of what

they we want to achieve. The main aim is to fully utilise the facilities and buildings we already have

and provide more public benefit in those areas as well as expand further in the UK to provide more

facilities that will meet the objectives of the organisation and provide benefit to the local

communities

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Employees

We support and develop the skills of our employees. We encourage all of our colleagues to engage

with the strategy and objectives, and to give their suggestions and views on performance and

strategy. We are an equal opportunities employer and are proud to recruit and promote our staff

based on their aptitude and ability, without discrimination. The majority of staff benefit from

policies focussing on training and career development as well as regular supervision

All our staff irrespective of duty are DBS checked.

In house Safeguarding training has also been provided to all employees and volunteers at level 1.

Level 2 safeguarding courses are provided for all staff online. Prevent courses are also provided for

all as well as FGM courses for all female staff and volunteers

Training been given to our staff who go out and preach to individuals

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Training been given to our madrassah staff who teach at our after school classes. This takes

periodically at all our madrassahs

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First aid training has also been provided for all our madrassah and jamia staff

We also provide in-house training for specific areas of work that we do, including HR, finance and

activities that enable us to carry out their activities.

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Help from volunteers' in-kind gifts

Our dedicated volunteers are the heart and soul of our operations, and we rely on them to be able

to deliver our services. We manage all of our volunteers. During 2018/8, volunteers in the UK alone

contributed substantial hours of work by donating their time in fulfilling the objectives of the charity,

through administration, and by being involved in fundraising activities. Details totalling volunteer

hours been collated during this period and we have recorded data of approximately 1000 hours per

week given by non paid volunteers, this includes both brothers and sisters. It is also felt that the

actual figure could be as much as double this time as many volunteers have given time and it has not

been recorded

This does not include trustee's time

Overseas Work and Grant aid

In this financial year our trustees made several visits to Pakistan where Dawat e Isla mi UK has

funded several projects. The main projects being as follows.

Qurbani. During the Islamic month of Zull Hajj where all Muslims who are financial capable

they are encouraged to slaughter an animal and give the meat to the needy. As this is

difficult in UK. Dawat elslami UK provided this service to the Muslims of UK and as such 916

goats, 8494 shares in cows (1214 cows in total) and 72 shares in Camels (11 camels in

total) were slaughtered in Pakistan and the meat distributed to the needy. At the same time

people give us their money to do aqeeqa for their children. This is a sunnah of the Prophet

where when a child is born an animal is sacrificed. In this case 7 goats and 33 shares where

also given

This enabled many poor families who throughout the year cannot afford meat to be able to

have this and also hundreds of Muslims in the UK to fulfil their Islamic obligation

Trustees make regular visits to Pakistan (on their own expenses) to do an audit to ensure that the

funds have been used as prescribed and to discuss any further projects.

A lot of donors donate for various causes in Pakistan, were these are against the norm and we are

unsure of whether these funds we can utilise them we write a request to Pakistan and they confirm

either way weather they can spend or not. In some cases they reply that they are not in a position to

spend just yet and will be able to in a few months. In this case we keep the money here until they

confirm that they can utilise it.

If the feedback is that it cannot be utilised then the fund is returned to the donor.

With regards to projects abroad the trustees have come under pressure to provide aid to those

areas in the world which are in great need, namely floods in Bangladesh and conflict areas in Syria,

Sudan and Palestine and especially this case the Rohangiya refugees in Bangladesh. However the

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trustees have refused to take these projects on board as we do not have the ground force or local

contacts to be confident to be able to fulfil these projects.

The trustees have agreed to look further into the possibility of providing aid in areas such as this in

the future , but the decision to implement this will be only be possible if we can guarantee that we

can make maximum use of the donations in that area and we have suitable on ground connections

to assist us.

Financial Review

In 2017 /8 we generated and income of £8,767,907 which is an increase on the previous year of

£1,982,309. This consists of £1,097,477 of restricted funds, eg Qurbani or the donor has requested a

specific place he wishes his donation to go.

This is a substantial increase on previously year funding. This was in main due to new projects taking

place.

This is·due the great help we receive from volunteers. However with the work continuing to increase

and communities around the UK requesting us to do work in their local communities the need for

further funding will always increase.

The trustees are constantly looking into new ways to raise funds and hopefully within the next 12

months new fundraising method will be put into place.

Principal Source Of Funding

Funding is exclusively from public donations, which consists of cash donations as well as standing

orders.

We have also utilised our satellite channel Madani Channel to appeal for funds. Telethons have also

taken place twice this year appealing for funds. In these instances live transmission was conducted

for up to 10 hours where the works of Dawat e lslami were promoted and appeals were made for

the running of our jamias and madrassahs. During this telethon appeal, all our buildings were open

so the general public could come in with their donations as well as having a centre where a team of

volunteers answered calls and took pledges and donations. Donations were taken using the

merchant world pay system

The trustees have realised that the majority of their donations are cash based and this in itself

creates a lot of problems, as such various means of donating have been looked at namely paypal,

world pay, donate by text etc but the majority of our donations are still cash

The trustees are committed to increasing the percentage of funds donated through non cash

methods

38

Payment To Trustees

Trustees do not receive any remuneration or payment in kind for their services

Investments

The charity holds no investments.

Buildings

Our current buildings in UK are as follows:

1. Southend on Sea

2. Stratford London

3. Slough

4. Bristol

5. Newport

6. Birmingham (6 buildings)

7. Coventry

8. Walsall

9. Stoke

10. Derby

11. Nottingham

12. Leicester

13. Rotherham (2 buildings)

14. Sheffield

15. Bradford (6.9 acre site with 13 buildings)

16. Bradford (2 more)

17. Halifax

18. Leeds (plot)

19. Rochdale (3 buildings)

20. Accrington

21. Blackburn

22. Darwen

23. Preston

24. Bury

25. Glasgow

26. Oldham (plot)

27. Oldham Building

28. Bristol

29. Bolton (2 off)

30. Manchester

31. Luton

32. Burnley

39

The Future

The trustees have a strategic 10 year plan in which they plan to open education centres in every

major city in the UK. The plan being also to open Jamias (Islamic colleges) in the larger cities. Some

of the cities have been identified and ground work in those areas is taking place through awareness

programmes.

With regards to Islamic colleges we need trained teachers. As the graduates start to come out of our

jamias we are hopeful that we can fill the needs of the community with these graduates.

Projects at local level or international level will only be executed when there are sufficient personnel

in that area that can run the project. With the help of our outreach work and our satellite channel

local volunteers will increase and the demand on the charity to provide more facilities will follow.

The immediate plan in the next few years it to completely utilise the buildings we have to the

maximum capacity. The demand is there as in some of our institutes we have waiting lists for

students greater than 750 with a total UK waiting list of close to 3000. This will only be achieved

through teacher training via courses that suit the availability of suitable teachers. The trustees will

also look into a grading system to ensure that we get the best teachers in our madrassahs and our

jamias so we can provide the best education to create the best Islamic role models of the future.

We are now being approached from various communities across the country requesting us to set up

centres in their respective towns and cities.

The trustees will look at each of these cases on their own merit and decide the way forward

From a financial perspective we feel the charity is in a very strong position as it has a lot of support

for the work it does throughout the country.

40

Going concern

The trustees believe that the Charity does not have any Going Concern issues and considering its charitable work, organisational reputation, growing membership and audience, it has a bright future.

Structure, governance and management

Nature of governing document

The Charity is governed by its constitution. It also complies with the Companies Act legislation and the Charity Commission requirement

Recruitment and appointment of trustees

The Trustees are appointed from the volunteers based on their service to the Charity, general qualification and experience. All Trustees are subject to DBS Checks. All trustees have to sign up to abide by the Code of Conduct Policy.

Induction and training of trustees

The Trustees are trained on the Charity ethics, legal requirements, Safeguarding and Prevent etc. They are also trained in First Aid.

Arrangements for setting key management personnel remuneration

Trustees provide their services free of charge. Incidental expenses if claimed are recompensed.

Organisational structure

Dawat e Islami UK has been split up into 4 regions I. South (London and surrounding areas)

2.Midlands (including Wales)

3. North

4. Scotland.

In each area there is a separate representative that looks after the brother's work and one that looks after the sister's work.

They will then have a team with them to look after the various activities in their region. The regions are then subdivided into a total of9 areas across the UK South has been split into I . London 2. Surrounding areas

Midlands has been split in two areas I . East Midlands 2. West Midlands (including wales)

North has been split into 4 areas I . North Yorkshire 2. South Yorkshire3. Manchester and surrounding areas

4. Lancashire

41

Scotland has not been subdivided. In the same way there are representatives on the regional level there are also representatives on the sub regional level. Where needed these sub regions are further divided and appropriate representatives are given the task to look after the work in that area The trustees oversee all of this and meet with the regional representatives approximately every 4 weeks to assess the work and plan forward. This format is then passed down whereby all sub regions will meet monthly as well

Relationships with related parties

Dawat E lslami in Other Countries

Relationship by association. Loose Confederate.

Major risks and management of tlwse risks

Safeguarding Risk Centre provides religious education to children Action All Staff regardless of duties are DBS checked. Staff is given Safeguarding training.

Fire Safety Risk Large congregations in our buildings Action: Regular Fire, Electricity and Gas inspections and certifications Building kept in good state of repair. Emergency lighting installed exits fully signposted.

Radicalisation Risk, Students being preached extremism Action

Prevent Training Al documentation is checked and vetted by management Aims and Objectives of the Organisation do not lend themselves to extremism

Health & Safety Risk Physical Well being of all attendees at the Centres Action

Risk assessment carried out on all buildings

First Aid Training provided to key personnel First Aid Kits in every building Paediatric training provided in all Centres

42

Financial instruments

Objectives and policies

The charity's activities expose it to a number of financial risks including credit risk, cash flow risk and liquidity risk. The use of financial derivatives is governed by the charity's policies approved by the board of trustees, which provide written principles on the use of financial derivatives to manage these risks. The charity does not use derivative financial instruments for speculative purposes.

Cash flow risk

The charity's activities expose it primarily to the financial risks of changes in foreign currency exchange rates and

interest rates. The charity uses foreign exchange forward contracts and interest rate swap contracts to hedge these exposures. Interest bearing assets and liabilities are held at fixed rate to ensure certainty of cash flow

Credit risk

The charity's principal financial assets are bank balances and cash, trade and other receivables, and investments. The charity's credit risk is primarily attributable to its trade receivables. The amounts presented in the balance sheet are net of allowances for doubtful receivables. An allowance for impairment is made where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows. The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies. The charity has no significant concentration of credit risk, with exposure spread over a large number of counterparties and customers.

Liquidity risk

In order to maintain liquidity to ensure that sufficient funds are available for ongoing operations and future developments, the charity uses a mixture of long-term and short-term debt finance. Further details regarding liquidity risk can be found in the Statement of accounting policies in the financial statements.

Funds held as custodian trustee on behalf of others

No funds or assets are held by trustees on behalf of the Charity. All the Charity funds and assets are held in the Charity name.

Disclosure of information to auditor

Each trustee has taken steps that they ought to have taken as a trustee in order to make themselves aware of any relevant audit information and to establish that the charity's auditor is aware of that information. The trustees confirm that there is no relevant information that they know of and of which they know the auditor is unaware.

Reappointment of auditor

The auditors Riaz Ahmad & Co Limited are deemed to be reappointed under section 487(2) of the Companies Act 2006.

The annual report was approved by the trustees of the charity on 5 November 2018 and signed on its behalf by:

43

DAWAT-E-ISLAMI UK

Statement of Trustees' Responsibilities

The trustees (who are also the directors of DA WAT-E-ISLAMI UK for the purposes of company law) are responsible for preparing the trustees' report and the financial statements in accordance with the United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) and applicable law and regulations.

Company law requires the trustees to prepare financial statements for each financial year. Under company law the trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of

the state of affairs of the charitable company and of its incoming resources and application of resources, including its income and expenditure, for that period. In preparing these financial statements, the trustees are required to:

• select suitable accounting policies and 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 departuresdisclosed and explained in the financial statements; and

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that thecharitable company will continue in business.

The trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the charitable company's transactions and disclose with reasonable accuracy at any time the financial position of the charitable company 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 charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Approved by the trustees of the charity on 5 November 2018 and signed on its behalf by:

� .......Mr Khalid Nazir Mirza Trustee

44

DAWAT-E-ISLAMI UK

Independent Auditor's Report to the Members ofDAWAT-E-ISLAMI UK

Opinion

We have audited the financial statements of DA WAT-E-ISLAMI UK (the 'charity') for the year ended 31 May 2018, which comprise the Statement of Financial Activities, Balance Sheet, Statement of Cash Flows, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is United Kingdom Accounting Standards, comprising Charities SORP - FRS I 02 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and applicable law (United Kingdom Generally Accepted Accounting Practice).

This report is made solely to the charitable company's trustees, 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 charity's trustees those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and its trustees as a body, for our audit work, for this report, or for the opinions we have formed.

In our opinion the financial statements:

• give a true and fair view of the state of the charity's affairs as at 31 May 2018 and of its results for the yearthen ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice;�d

• have been prepared in accordance with the requirements of the Companies Act 2006.

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.

Conclusions relating to going concern

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

• the trustees use of the going concern basis of accounting in the preparation of the financial statements is notappropriate; or

• the trustees have not disclosed in the financial statements any identified material uncertainties that may castsignificant doubt about the charity's ability to continue to adopt the going concern basis of accounting for aperiod of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The trustees are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

45

DAWAT-E-ISLAMI UK

Independent Auditor's Report to the Members of DAWAT-E-ISLAMI UK

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact.

We have nothing to report in this regard.

Opinion on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

• the information given in the Strategic Report and Trustees' Report for the financial year for which the financialstatements are prepared is consistent with the financial statements; and

• the Strategic Report and Trustees' Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of our knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report and the Trustees' Report.

We have nothing to report in respect of the following matters where 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 frombranches 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.

Responsibilities of trustees

As explained more fully in the Statement of Trustees' Responsibilities [set out on page 13], the trustees are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as 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 charity or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs (UK), we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

46

DA WAT-E-ISLAMI UK

Independent Auditor's Report to the Members of DAW AT-E-ISLAMI UK

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentionalomissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of thecharity's internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates andrelated disclosures made by the trustees.

• Conclude on the appropriateness of the trustee's use of the going concern basis of accounting and, based on theaudit evidence obtained, whether a material uncertainty exists related to events or conditions that may castsignificant doubt on the charity's ability to continue as a going concern. If we conclude that a materialuncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in thefinancial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are basedon the audit evidence obtained up to the date of our auditor's report. However, future events or conditions maycause the charity to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures,and whether the financial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or businessactivities within the charity to express an opinion on the financial statements. We are responsible for thedirection, supervision and performance of the charity audit. We remain solely responsible for our auditopinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

�17--Riaz Ahma enior Statutory Auditor) For and on behalf of Riaz Ahmad & Co Limited, Statutory Auditor

Lord House 51 Lord Street Manchester M3 IHE

Date 5 November 2018

47

DAWAT-E-ISLAMI UK

Statement of Financial Activities for the Year Ended 31 May 2018

(Including Income and Expenditure Account and Statement of Total Recognised Gains and Losses)

Income and Endowments from:

Donations and legacies

Other trading activities

Investment income

Total Income

Expenditure on:

Raising funds

Charitable activities

Total Expenditure

Net income

Net movement in funds

Reconciliation of funds

Total funds brought forward

Total funds carried forward

Income and Endowments from:

Donations and legacies

Other trading activities

Investment income

Total Income

Expenditure on:

Raising funds

Charitable activities

Total Expenditure

Net (expenditure)/income

Net movement in funds

Reconciliation of funds

Total funds brought forward

Total funds carried forward

Unrestricted Total

funds Restricted funds 2018

�k £ £ £

3

4

5

6

6

17

Note

3

4

5

6

17

3,383,843

328,400

151

3,712,394

(412,582)

(1,613,995)

(2,026,577)

1,685,816

1,685,816

4,059,972

5,745,788 Unrestricted

funds

2,182,013

330,285

139

2,761,563

(265,990)

(2,667,277)

(2,933,177)

(171,614)

(171,614)

4,237,586

4,065,972

5,033,656

5,033,656

(136,028)

(4,806,886)

(4,942,914)

90,742

90,742

7,043,536

7,134,278

Restricted funds

£

4,023,955

4,023,955

(2,684,703)

(2,684,703)

1,339,252

1,339,252

5,704,284

7,043,536

8,417,499

328,400

151

8,746,050

(548,610)

(6,420,881)

(6,969,492)

1,776,558

1,776,558

11,103,509

12,880,067 Total

2017

£

6,449,094

330,285

139

6,779,518

(4,732,433)

(5,351,980)

(5,617,881)

1,161,637

I, 161,637

9,941,872

11,103,509

All of the charity's activities derive from continuing operations during the above two periods.

48

The funds breakdown for 2017 is shown in note 17.

Fixed assets

Intangible assets

Tangible assets

Current assets

Stocks

Cash at bank and in hand

49

DAWAT-E-ISLAMI UK

(Registration number: 5441337)

Balance Sheet as at 31 May 2018

Note

13

14

15

Creditors: Amounts falling due within one year

Net current assets

16

Net assets

Funds of the charity:

Restricted funds

Unrestricted income funds

Unrestricted funds

Total funds 17

2018 2017

£ £

53,600 56,950

10,483,532 8,320,986

10,537,132 8,377,936

134,966 101,305

2,241,119 2,711,577

2,376,085 2,812,882

(33,150) (87,309)

2,342,935 2,725,573

12,880,067 11,103,509

5,614,731 7,892,494

7,265,336 3,211,015

12,880,067 11,103,509

The financial statements on pages 17 to 31 were approved by the trustees, and authorised for issue on 5 November 2018 and signed on their behalf by:

y� ......... � ..

Mr Khalid Nazir Mirza Trustee

50

DAWAT-E-ISLAMI UK

Statement of Cash Flows for the Year Ended 31 May 2018

Note

Cash flows from operating activities

Net cash income

Adjustments to cash flows from non-cash items

Depreciation

Amortisation

Investment income .5

Loss on disposal of fixed assets held for the charity's own use 8

Working capital adjustments

Increase in stocks

Decrease in debtors

Decrease in creditors

Net cash flows from operating activities

Cash flows from investing activities

Interest receivable and similar income

Purchase of tangible fixed assets

Sale of tangible fixed assets

Net cash flows from investing activities

Net (decrease)/increase in cash and cash equivalents

Cash and cash equivalents at I June

Cash and cash equivalents at 3 1 May

15

16

5

14

2018 £

1,776,558

67,223

3,350

(151)

1,846,980

(33,661)

54,159

1,759,160

151

(2,229,769)

2,229,618

(470,458)

2,711,577

2,241,119

All of the cash flows are derived from continuing operations during the above two periods.

2017 £

1,161,637

61,782

3,350

( 139)

109,795

1,336,425

(15,630)

239,351

1,560,146

139

(1,016,159)

172,800

(843,220)

716,926

1,994,651

2,711,577

51

DAWAT-E-ISLAMI UK

Notes to the Financial Statements for the Year Ended 31 May 2018

I Charity status

The charity is a charity limited by guarantee and consequently does not have share capital. Each of the trustees is liable to contribute an amount not exceeding£ 1 towards the assets of the charity in the event of liquidation.

2 Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

The financial statements have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2015) - (Charities SORP (FRS 102)), the Financial Reporting Standard applicable in the UK and Republic of Ireland(FRS 102) and the Companies Act 2006.

Basis of preparation

DA WAT-E-ISLAMI UK meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy notes.

Going concern

The trustees consider that there are no material uncertainties about the charity's ability to continue as a going concern nor any significant areas of uncertainty that affect the carrying value of assets held by the charity.

Exemption from preparing a cash flow statement

The charity opted to early adopt Bulletin I published on 2 February 2016 and have therefore not included a cash flow statement in these financial statements.

Income and endowments

All income is recognised once the charity has entitlement to the income, it is probable that the income will be received and the amount of the income receivable can be measured reliably.

Donations and legacies

Donations are recognised when the charity has been notified in writing of both the amount and settlement date. ln the event that a donation is subject to conditions that require a level of performance by the charity before the charity is entitled to the funds, the income is deferred and not recognised until either those conditions are fully met, or the fulfilment of those conditions is wholly within the control of the charity and it is probable that these conditions will be fulfilled in the reporting period.

Investment income

Dividends are recognised once the dividend has been declared and notification has been received of the dividend due.

52

DAWAT-E-ISLAMI UK

Notes to the Financial Statements for the Year Ended 31 May 2018

Expenditure

All expenditure is recognised once there is a legal or constructive obligation to that expenditure, it is probable settlement is required and the amount can be measured reliably. All costs are allocated to the applicable expenditure heading that aggregate similar costs to that category. Where costs cannot be directly attributed to particular headings they have been allocated on a basis consistent with the use of resources, with central staff costs allocated on the basis of time spent, and depreciation charges allocated on the portion of the asset's use. Other support costs are allocated based on the spread of staff costs.

Raising funds

These are costs incurred in attracting voluntary income, the management of investments and those incurred in trading activities that raise funds.

Grant provisions

Provisions for grants are made when the intention to make a grant has been communicated to the recipient but there is uncertainty about either the timing of the grant or the amount of grant payable.

Support costs

Support costs include central functions and have been allocated to activity cost categories on a basis consistent with the use of resources, for example, allocating property costs by floor areas, or per capita, staff costs by the time spent and other costs by their usage.

Governance costs

These include the costs attributable to the charity's compliance with constitutional and statutory requirements, including audit, strategic management and trustees' meetings and reimbursed expenses.

Taxation

The charity is considered to pass the tests set out in Paragraph I Schedule 6 of the Finance Act 20 I O and therefore it meets the definition of a charitable company for UK corporation tax purposes. Accordingly, the charity is potentially exempt from taxation in respect of income or capital gains received within categories covered by Chapter 3 Part 11 of the Corporation Tax Act 2010 or Section 256 of the Taxation of Chargeable Gains Act 1992, to the extent that such income or gains are applied exclusively to charitable purposes.

Goodwill

Goodwill is amortised over its useful life, which shall not exceed ten years if a reliable estimate of the useful life cannot be made.

Tangible fixed assets

Individual fixed assets costing £0.00 or more are initially recorded at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

Amortisation

Amortisation is provided on intangible fixed assets so as to write off the cost, less any estimated residual value, over their expected useful economic life as follows:

Asset class

Goodwill

Amortisation method and rate

5% straight line basis

53

DAWAT-E-ISLAMI UK

Notes to the Financial Statements for the Year Ended 31 May 2018

Depreciation and amortisation

Depreciation is provided on tangible fixed assets so as to write off the cost or valuation, less any estimated residual value, over their expected useful economic life as follows:

Stock

Stock is valued at the lower of cost and estimated selling price less costs to complete and sell, after due regard for obsolete and slow moving stocks. Cost is determined using the first-in, first-out (FIFO).

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the Statement of Financial Activities over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the charity has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Fund structure

Unrestricted income funds are general funds that are available for use at the trustees' discretion in furtherance of the objectives of the charity.

Designated funds are unrestricted funds set aside for specific pw·poses at the discretion of the trustees.

Restricted income funds are those donated for use in a particular area or for specific purposes, the use of which is restricted to that area or purpose.

Financial instruments

Classification

Financial assets and financial liabilities are recognised when the charity becomes a party to the contractual provisions of the instrument. Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the charity after deducting all of its liabilities.

54

DAWAT-E-ISLAMI UK

Notes to the Financial Statements for the Year Ended 31 May 2018

Recognition and measurement

All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. [fan arrangement constitutes a financing transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

Financial assets and liabilities are only offset in the statement of financial position when, and only when there exists a legally enforceable right to set off the recognised amounts and the charity intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Financial assets are derecognised when and only when a) the contractual rights to the cash flows from the financial asset expire or are settled, b) the charity transfers to another party substantially all of the risks and rewards of ownership of the financial asset, or c) the charity, despite having retained some, but not all, significant risks and rewards of ownership, has transferred control of the asset to another party.

Financial liabilities are derecognised only when the obligation specified in the contract is discharged, cancelled or expires.

SS

DAWAT-E-ISLAMI UK

Notes to the Financial Statements for the Year Ended 31 May 2018

Debt instruments

Debt instruments which meet the following conditions are subsequently measured at amortised cost using the effective interest method:

(a) The contractual return to the holder is (I) a fixed amount; (ii) a positive fixed rate or a positive variable rate;or (iii) a combination of a positive or a negative fixed rate and a positive variable rate.

(b) The contract may provide for repayments of the principal or the return to the holder (but not both) to be linkedto a single relevant observable index of general price inflation of the currency in which the debt instrument isdenominated, provided such links are not leveraged.

(c) The contract may provide for a determinable variation of the return to the holder during the life of theinstrument, provided that (l) the new rate satisfies condition (a) and the variation is not contingent on future eventsother than (1) a change of a contractual variable rate; (2) to protect the holder against credit deterioration of theissuer; (3) changes in levies applied by a central bank or arising from changes in relevant taxation or law; or (ii)the new rate is a market rate of interest and satisfies condition (a).

(d) There is no contractual provision that could, by its terms, result in the holder losing the principal amount orany interest attributable to the current period or prior periods.

(e) Contractual provisions that permit the issuer to prepay a debt instrument or permit the holder to put it back tothe issuer before maturity are not contingent on future events, other than to protect the holder against the creditdeterioration of the issuer or a change in control of the issuer, or to protect the holder or issuer against changes inlevies applied by a central bank or arising from changes in relevant taxation or law.

(t) Contractual provisions may permit the extension of the term of the debt instrument, provided that the return tothe holder and any other contractual provisions applicable during the extended term satisfy the conditions ofparagraphs (a) to (c).

Debt instruments that are classified as payable or receivable within one year on initial recognition and which meet the above conditions are measured at the undiscounted amount of the cash or other consideration expected to be paid or received, net of impairment.

With the exception of some hedging instruments, other debt instruments not meeting these conditions are measured at fair value through profit or loss.

Commitments to make and receive loans which meet the conditions mentioned above are measured at cost (which may be nil) less impairment.

Investments

Investments in non-convertible preference shares and non-puttable ordinary or preference shares (where shares are publicly traded or their fair value is reliably measurable) are measured at fair value through profit or loss. Where fair value cannot be measured reliably, investments are measured at cost less impairment.

Investments in subsidiaries and associates are measured at cost less impairment. For investments in subsidiaries acquired for consideration including the issue of shares qua! ifying for merger relief, cost is measured by reference to the nominal value of the shares issued plus fair value of other consideration. Any premium is ignored.

56

DAWAT-E-ISLAMI UK

Notes to the Financial Statements for the Year Ended 31 May 2018

Derivative financial instruments

The charity uses derivative financial instruments to reduce exposure to foreign exchange risk and interest rate

movements. The charity does not hold or issue derivative financial instruments for speculative purposes.

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date. The resulting gain or loss is recognised in

statement of financial activities immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in statement of financial activities depends on the nature of the hedge relationship.

Fair value measurement

The best evidence of fair value is a quoted price for an identical asset in an active market. When quoted prices are unavailable, the price of a recent transaction for an identical asset provides evidence of fair value as long as there has not been a significant change in economic circumstances or a significant lapse of time since the transaction took place. If the market is not active and recent transactions of an identical asset on their own are not a good estimate of fair value, the fair value is estimated by using a valuation technique.

3 Income from donations and legacies

Unrestricted funds

Total Total

General Restricted funds 2018 2017

£ £ £ £

Donations and legacies;

Donations to major appeals 3,936,179 3,936,179 472,043

Donations from individuals 3,349,338 1,097,477 4,446,815 5,962,124

Gift aid reclaimed 34,505 34,505 14,927

4,525,557 5,033,656 8,417,499 6,449,094

4 Income from other trading activities

Unrestricted funds

Total Total

General 2018 2017

£ £ £

Trading income;

Sales of goods and services 328,400 328,400 330,285

328,400 328,400 330,285

57

DAWAT-E-ISLAMI UK

Notes to the Financial Statements for the Year Ended 31 May 2018

5 Investment income

Un restricted

funds Total Total

General 2018 2017

£ £ £

Interest receivable and similar income;

Interest receivable on bank deposits 151 151 139

6 Expenditure on charitable activities

Total Total

General 2018 2017

Note £ £ £

Grant funding of activities 2.335.188 2.335.188 1,790,532

Allocated support costs 7 1,582,744 1,582,744 I, 185,424

Depreciation 70,573 70.573 102,719

Governance costs 7 6,000 6,000 6,000

Payroll Costs 2,974,986 2,974,986 2,196,338

6,969,491 6,969,491 5,617,881

7 Governance & Support Costs 2018 2017

£ £

Rent & Rates 213,728 222,355

Light & Heat 155,638 138,541 Insurance 21,790 47,798 Repairs 780,109 484,821 Telephone 16,087 11,231 Printing/Stationery 55,617 15,358 Travel 121,668 88,762 Cleaning/Sundries 8,382 23,108 Advertising 33,824 32,154 Accountancy 6,870 4,800 Legal & Professional 50,352 102,001

Bank Charges 54,879 14,496 Hire of Assets 28,440

1,582,743 I, 185,425

58

Audit fees 6,000 6,000

Depreciation 70,573 102,719

1,659,316 1,294,144

Payroll Costs 2,974,987 2,196,338

Total Governance and Support Costs 4.634.303 3,420,482

59

DAWAT-E-ISLAMI UK

Notes to the Financial Statements for the Year Ended 31 May 2018

8 Net incoming/outgoing resources

Net incoming resources for the year include:

Loss on disposal of fixed assets held for the charity's own use

9 Trustees remuneration and expenses

10 Staff costs

The aggregate payroll costs were as follows:

Staff costs during the year were:

Wages and salaries

Social security costs

No employee received emoluments of more than £60,000 during the year.

11 Auditors' remuneration

Audit of the financial statements

2018

£

2018

£

2,827,980

147,007

2,974,987

2018

£

6,000

2017

£

37.587

2017

£

2,098,407

97,931

2,196,338

2017

£

6,000

60

DAWAT-E-ISLAMI UK

Notes to the Financial Statements for the Year Ended 31 May 2018

12 Taxation

The charity is a registered charity and is therefore exempt from taxation.

13 Intangible fixed assets

Cost

At 1 June 2017

At 31 May 2018

Amortisation

At l June 2017

Charge for the year

At 31 May 2018

Net book value

At 3 I May 2018

At 3 I May 2017

Goodwill £

67,000

67,000

10,050

3,350

13,400

53,600

56,950

Total £

67,000

67,000

10,050

3,350

13,400

53,600

56,950

61

DAWAT-E-ISLAMI UK

Notes to the Financial Statements for the Year Ended 31 May 2018

Development costs

Development costs have been capitalised in accordance with FRS 102 Section 18 Intangible Assets other than Goodwill and are therefore not treated as a deficit to the charity.

14 Tangible fixed assets

Land and Furniture and

buildings equipment Motor vehicles Total

£ £ £ £

Cost

At 1 June 2017 7,945,380 617,823 2 8,563,205

Additions 2,175,361 54,408 2,229,769

At 31 May 2018 10,120,741 672,231 2 10,792,974

Depreciation

At 1 June 2017 242,219 242,219

Charge for the year 67,223 67,223

At 31 May 2018 309,442 309,442

Net book value

At 31 May 2018 10,120,741 362,789 2 10,483,532

At31 May2017 7,945,380 375,604 2 8,320,986

15 Stock

2018 2017

£ £

Stocks 134,966 101,305

16 Creditors: amounts falling due within one year

2018 2017

£ £

Other taxation and social security 33,150 25,415

Other creditors 54,294

Accruals 7,600

33,150 87,309

17 Funds

62

DAWAT-E-ISLAMI UK

Notes to the Financial Statements for the Year Ended 31 May 2018

Balance at I June Incoming Resources Balance at 31

2017 resources expended May 2018

£ £ £ £

Unrestricted funds

General (1,161,637) (4,854,108) 6,969,492 953,747

Designated {5,424,6182 (2,794,465) (8,219,083)

Total unrestricted funds (6,586,255) (7,648,573) 6,969,492 (7,265,336)

Restricted funds {4,517,2542 (1,097,477) {5,614,7312

Total funds ( 11, I 03,509) (8,746,050) 6,969,492 (12,880,067) Balance at 1 June Incoming Resources Balance at 31

2016 resources expended May 2017 £ £ £ £

Unrestricted funds

General (2,883,328) 5,313,868 2,430,540

Designated (5,424,618) (207,307) (9,630 (5,641,555

Total unrestricted funds (5,424,618) (3,090,635) 5,304,238 (3,211,015)

Restricted funds (4,517,254) (3,688,883) 313,643 (7,892,494)

Total funds (9,941,872) (6,779,518) 5,617,881 (11,103,509)

18 Analysis of net assets between funds

Unrestricted funds

General Designated Restricted funds Total funds £ £ £

Intangible fixed assets 53,600 53,600 Tangible fixed assets 54,408 8,253,763 2,175,361 10,483,532 CWTent assets 2,376,085 2,376,085 CWTent liabilities (33,150) (33,150

Total net assets 2,397,343 8,307,363 2,175,361 12,880,067

19 Analysis of net funds

At 1 June 2017 Cash flow At 31 May 2018

£ £ £

Cash at bank and in hand 2,711,577 (470,458) 2,241,119

Net debt 2,711,577 (470,458) 2,24 I, 119

63

DAWAT-E-ISLAMI UK

Notes to the Financial Statements for the Year Ended 31 May 2018

20 Related party transactions

There were no related party transactions in the year.