The governing document (Memorandum and Articles of Association) empowers the charity to invest any available moneys in such investments, securities or property as it sees fit, subject to any conditions or consents that may be imposed or required by law.
Islamic Relief Worldwide (IRW) will engage in short-, medium- or long-term investments, subject to the amount and nature of funds available. The policy applies to the centrally managed funds in the United Kingdom only and does not cover Islamic Relief offices in other parts of the world.
The main principles governing all investments are:
-that funds are protected from risk and inflation
-that Islamic principles are observed
- that the best income is obtained from fundsfor its purpose.
Islamic Relief will invest in fixed assets such as property, equipment, stocks (with the exception of stocks related to areas mentioned under its ethical investment policy) or other current assets such
as cash.
Ethical investment policy
Our investment policy is based on Islamic finance principles. Our investments will not be made in companies engaged in promoting, producing or trading in any of the following: weapons, pornography, alcoholic beverages, gambling, usury or any other areas deemed as inappropriate to the vision, mission and values of Islamic Relief, as stated by the Board of Trustees.
Investment properties
Islamic Relief holds an investment property in Paris through SIF Invest that has been rented to Secours Islamique. SIF Invest is incorporated in France and effectively owns the investment property. IRW owns 99% of the share capital of SIF Invest. SIF Invest’s sole function is managing the property rented out to Secours Islamique. It does not engage in any other trading activities. Please refer to Note 25 for further details.
Islamic Relief has an investment in TIC International Limited, which is a wholly owned trading subsidiary of IRW. Please refer to Note 25 for further details.
Endowment (waqf) investments
Waqf is the Islamic concept of endowment where the capital is invested and either the returns are spent on charitable purposes, or on waqf projects that are long term in nature.
The history of waqf
From the early days of Islam, waqf generally took the form of a donated property or an institution to help others. For example, houses were converted to inns for travellers, and waterways were built to bring water to villages. Waqf played a key role in the development of Islamic civilisations as Muslims began to donate their pieces of land for mosques. As mosques provide the main logistic for the teachings of Islamic knowledge and culture, the waqf tradition was then expanded into buildings of centres of education, hospitals, public facilities and residential areas, some of which are still used today.
Waqf today
Today, Islamic Relief has the inspiration to continue to build this important branch of Islamic charity. IRW invests the waqf capital it receives and uses 80% of the returns on charitable projects. The remaining 20% is split equally between reinvesting in the capital amount and covering administrative costs. Waqf funds are invested in properties used by Islamic Relief that would otherwise have to be rented. The various sections of the organisation that use the premises pay the rent for it, including the United Kingdom operation (Lower Marsh, London), international operations (Rea Street, Birmingham) and the subsidiary companies TIC International (Landor Street, Birmingham) and SIF Invest (Paris, France). The Rea Street buildings were partly paid for with funds (£130,000) received for the purpose of acquiring premises for Islamic Relief. Apart from Rea Street, the other premises generate a rental income. Please refer to the balance sheet for the charity’s assets.
Waqf funds are endowments held to generate further funds. Currently, IRW has invested these funds in properties. The yield of investment is 7% for 2009, which amounted to £182,933 (2008: £108,831).
Our waqf programme has been a success because, every year, as well as providing Islamic Relief with premises to continue providing valuable services to humanity, the return on the waqf investments allow us to implement charitable projects to help the poor and needy. These include projects relating to Qurbani, the Feed the Needy campaign, and focusing on our key aims of responding to emergencies, caring for orphans, supporting education and promoting sustainable livelihoods.
The charity’s assets
The fixed assets held by the charity include the properties held for its own use at 19 Rea Street South, and Sampson House, Sampson Road North in Birmingham. These properties comprise offices and were bought in 1992 and 2003 respectively. The value included in the balance sheet comprises the original cost of the properties in 1992 and 2003, plus the cost of major improvements since their purchase. In 2002, we bought a second property in Birmingham, which comprises a large warehouse and small offices. It is used by the trading subsidiary TIC International Limited for additional warehouse space. In 2008, Islamic Relief acquired 16 Lower Marsh, London, which comprises offices, for its own use.
Supplier payment policy and practice
It is the policy of Islamic Relief that payments are made to suppliers in accordance with those terms and conditions agreed between IRW and its suppliers, provided that the supplier is also complying with relevant trading terms and conditions. The amount of trade creditors outstanding at the year end is stated in Note 28.
Independent auditors
A resolution to re-appoint PricewaterhouseCoopers LLP as auditors will be put to the members at the Annual General Meeting.
On behalf of the board
Ibrahim El-Zayat
14 September 2010