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ANNUAL REPORT AND FINANCIAL STATEMENTS 2016

Registered Charity Number: 1087864 (England and Wales) | Company Number: 4075959

2 2016 ANNUAL REPORT AND FINANCIAL STATEMENTS

Our History

In 1995, a group of businessmen put their own money into a pilot project to build 5 schools in Karachi’s worst slums that did not have electricity, sanitation, or clean water. Rising out of the open sewers and heaps of trash, the schools were an oasis, looking more like elite schools - complete with playgrounds, science labs, and libraries - than schools for the world’s poorest. The founders believed that a quality education should not be reserved for children with privileged backgrounds. The philanthropic movement

that they started came to be known as The Citiz ens Founda tion (TCF).

In 2014, TCF reached its goal of establishing 1,000 high quality schools for the poor. Today, TCF is the largest network of philanthropy-based schools for the underprivileged in the world.

At April 2017, the foundation has 1,441 schools in over 100 of the worst slums and villages in Pakistan, as well as a new program to operate Government Schools to rapidly scale up its impact.

ANNUAL REPORT AND FINANCIAL STATEMENTS 2016 3


TCF School Network

TCF Schools by Province

66 9 78

Primary/ Secondary School Ratio

341

1,441 School Units

618 670

1,441 School Units

Punjab Sindh Balochistan Primary Secondary

Khyber Pakhtoonkhwa AJK

Quetta

Morning/ Afternoon Shift Ratio

307

1,441School Units uDad

1,134sb lLa e a

aGwad r

Morning Afternoon hKarac i

1,096

4

Higher Secondary Units & TCF College


Battagram

Peshawar

Mardan

Nowshera

Swabi

Mansehra

Islamabad

Karak

Mianwali

Attock

Chakwal

Rawalpindi

Jhelum

Gujrat

Muzaffarabad

Bagh

Poonch

Khushab

SargodhaGujranwala

Narowal

JhangFaisalabad

Sheikhupura

Kasur

Lahore

D.G Khan Khanewal

Vehari

Lodhran

Nasirabad

Jacobabad

Rahimyarkhan

Kashmore

Bahawalpur

Larkana

N.Feroze

Sukkur

Khairpur

Gothki

S.Benazirabad

Jamshoro

Hyderabad

T.M Khan

Badin

Sanghar

School Units

1 - 4 5 - 9 10 - 19 20 - 29

30 - 49 50 - 59 400 or more

Thatta

TCF schools are spread across 100+ townsand cities across Pakistan

Mirpurkhas

Mitiari

Tando

Allahyaar


letter from TCF-UK trustees

Dear TCF-UK Donors,

This is our second annual letter to you summarising how TCF Pakistan and TCF-UK have progressed their goals to eradicate illiteracy in Pakistan.

Sadly, the problem of illiteracy in Pakistan remains substantial and unsolved: • 10% of children not in school around the world are in Pakistan• 24 million Pakistani children are out of school, 12% of Pakistan’s population• Nearly 16 million girls are not in school today

This drives a vicious downward spiral through underutilised resources, an undervalued population, continued poverty and disease, diminished future potential and, worst of all, negativity to fill the void that education leaves.

Therefore, TCF’s goals are to provide more than just a solution to illiteracy. From its roots in 1995, the primary goal of TCF has always been to take students off the streets and to provide them with a quality education as a first life-step for them and their families in a journey out of poverty.

TCF measures its impact in terms of reach and quality. Providing a quality education is always a primary objective for TCF as it has grown over the last 22 years.

TCF Reach: • 1,441 schools operated by TCF• 204,000 students across the TCF network

Consistent Quality of Education: • 48% of students achieving A+ / A (up from 43% last year)• 95% pass rate (up from 91%)• 85% of students leaving TCF now go onto Intermediate Education (up from 72% historically)

Job creation: • 12,000 female faculty• 5,400 TCF employees• 500+ TCF alumni who have returned to TCF as teachers or principals

Donors: Our donors in the UK have been critical in the development of TCF from its inception. From 2008, UK donors have contributed nearly £10.5 million to TCF. All of you are recognised fully for your contributions to TCF over the years and we are ever grateful to you.


Our message of supporting the existing infrastructure has been well received by each of you. Unfortunately, some of the benefit of our fund raising was offset by the impact of Brexit, as the British Pound weakened by 17% against the Pakistani Rupee.

Government Schools Program (GSP) Last year we announced our future plans for growth. Our primary goal was to be able to provide 1.5 million students with a TCF education in ten years. To that end, and as we highlighted last year, in the 2015/16 academic year TCF adopted 79 government schools in Punjab. This has now expanded to 272 schools, with pilot adoption programs started in all the other provinces as well. Consequently, our growth from 1,202 schools last year to 1,441 at the start of the new academic year in 2017 was driven primarily by the adoption of government schools. Similarly, the increase in our student population was also driven by the adoption of government schools. The government has also contributed towards the funding for each child in the adopted schools.

The GSP is our first step to providing a quality education on a large scale. TCF has spent the last year benchmarking the education standards, the quality of teaching and the infrastructure available in the government schools we have adopted. The gaps are tremendous, from a lack of physical space to abuse of power and teacher absenteeism. The positive news is that there are some very easy wins for us to achieve in these adopted schools. In future years, we will be able to report on the impact of the changes we are making today in infrastructure and in the quality of teaching. The GSP is one of the most important steps we have taken in our history. Our aim is to have same standards as core TCF schools. With your continued support, we look forward to making this a success story to report to you in the future.

Other Programs In addition, we also emphasised last year that we were piloting a TCF college. This pilot has now expanded from 1 college to 4 colleges. As this program grows, we will update you on its progress.

Our other programs (which utilises TCF’s skills and infrastructure) focusing on Mentorship (Rahbar), Adult Female Literacy (Aagahi) and Vocational Training programs continue to flourish.

Continued Support Without your support, TCF would not be able to work for the betterment of the children of Pakistan. We continue to be humbled by your ever-growing financial support, and ask you to help us increase our visibility across the UK:

• Talk to your friends and family about the work of TCF to spread the word;• Partner with TCF office to host a small group dinner to introduce TCF;• Call our office in the UK to get first hand updates on TCF’s progress; and• Visit a TCF school in Pakistan

TCF would not be here today without you; and without new donors we may not achieve our goal of eradicating illiteracy from Pakistan.

On behalf of the children of Pakistan, TCF-UK and TCF Pakistan, we thank you for your continued support!

The Trustees TCF-UK


activities in the UK ACHIEVEMENTS AND PROGRESS AT TCF- UK

TCF-UK has been raising funds and awareness for TCF since 2001 and is one of the largest international TCF chapters. Our principal objective is to raise awareness of, and funds for TCF, Pakistan’s leading charity in the field of formal education for underprivileged children.

None of our success would be made possible without our active community of supporters who, year after year, demonstrate an inspiring level of commitment to our mission, both as advocates and as donors. Their dedication and enthusiasm has pushed TCF-UK from strength to strength.

To all our monthly donors whose sponsorship provides TCF a lifeline, our major donors, corporates, trusts and foundations whose contributions make a mark on entire towns and villages, and to our enthusiastic volunteers who have put in countless hours towards the cause: on behalf of everyone a TCF education reaches, thank you.


Income

Totals Running costs of schools

Building schools Endowment fund

£ £ £ £

1,485,117 1,313,074 77,335 94,708 Individuals, including gift aid

120,965 120,965 - - Fundraising events

6,524 6,524 - - Corporates

88,882 88,882 - - Grants: Trusts & Foundations

1,701,488 1,529,445 77,335 94,708

9,432 9,432 Investment income

1,710,920 1,538,877 77,335 94,708 2016 total incoming resources

1,384,089 1,005,137 7,303 371,649 2015 total incoming resources

Total gift aid receivable for 2016 and included above was £69,675 (2015: £42,660).

Our Activities During the year, TCF-UK provided grants totaling £1,499,682 to TCF (2015: £977,725).

Total Support Build Endowment

£ £ £ £

1,499,682 1,327,639 77,335 94,708 2016 grants provided to TCF 977,725 876,636 7,108 93,981 2015 grants provided to TCF

The 2016 support grants of £1,327,639 to TCF paid the full running costs of just over 84 TCF schools, teaching 12,277 students. This amounted to just over 7% of TCF’s total expenditure on running its schools.

Since 2001 a total of 43 TCF schools have been built by TCF-UK donors, of which 18 now run afternoon shifts, for a total of 61 school units (49 primary and 12 secondary) at the start of the academic year on 1 April 2017.

Of the endowment donations of £94,708, £88,747 was a general endowment. The balance of £5,961 was from donors that have previously funded the building of TCF schools and their endowment income will be restricted to supporting their schools.

Restricted funds of £456,858 on the Balance Sheet at 31 December 2016 were made up of endowment funds of £413,160 and support funds , the latter having been remitted to TCF after the year end.

PFL: Overseas Pakistanis Education Foundation - Pakistan Foundation London As mentioned in our 2014 Annual Report, PFL has transferred its assets, database and income stream to TCF-UK. For a limited period, part of PFL’s ongoing income stream shall be applied by TCF-UK towards grants to former PFL beneficiaries. Thus, in 2016, TCF-UK made grants of £14,337 (2015: £21,253) to former PFL benef iciaries: all schools and educational institutions in Pakistan that serve the poorest segment of the population. These were in addition to the above grants to TCF.

£43,698 of


22 YEARS

1,441 SCHOOL UNITS

204,000 CHILDREN ENROLLED

about TCF The Citizens Foundation (UK) raises funds on behalf of The Citizens Foundation (TCF), Pakistan’s leading education charity working in poorest parts of rural and urban areas across Pakistan. We build schools and provide education wherever it is needed most.

We believe in the power of education and its ability to transform the lives of people. By providing future generations, and especially girls, with the education they need to reach their potential, we are encouraging local communities across Pakistan to be an active part in building solutions to improve their life circumstances.

TCF schools are supported almost entirely by the generosity of individuals all around the world who believe that education is the most sustainable way of helping people out of poverty.

10


1.1 BILLION

HOURS SPENT BY OUR CHILDREN IN SCHOOL AND OFF

THE STREETS

11

122

2016 ANNUAL REPORT AND FINANCIAL STATEMENTS

what we do TCF’s vision is a Pakistan free from class barriers and privilege where all citizens, regardless of gender, ethnicity or class can participate in society. Our ethos is to create and sustain the conditions that will enable vulnerable children to go to school, providing them with the tools they need to reach their full potential.

TCF’s school facilities, highly qualified teaching staff, and means-tested tuition fees are designed to ensure that all students, regardless of circumstances, are able to receive an education without compromising on the basic necessities of life, such as food, water and clothing.

Empowering Local Communities TCF schools are situated in the heart of slums and villages so that they are accessible to the communities they are built for. To engender a sense of pride and

ownership of the schools among the local community, we make sure they are included at every level in the process of building and running the schools. The locations of schools are selected by local community leaders. The materials for the school are procured from surrounding villages, and the construction workers to build the schools are hired from within the village. To promote sustainable local employment, TCF hires and trains women from surrounding villages to run the school.

Because TCF schools are so accessible to local communities, partner organisations often find it convenient to use the premises after school hours to provide other much needed services to local communities, including literacy classes for women and water wells for the communities.

Education for the cost of two pieces of bread To ensure that parents remain active stakeholders in their child’s education, TCF charges a minimal, means-tested fee which is capped at 5% of household income.

As of 2016:

On average our students pay just over 80p per month, equivalent to as little as the price of two pieces of bread per month.

Getting girls into schools remains at the centre of our ethos. TCF maintains a near equal number of girls to boys across all our schools, which is compared to a national average of 40% and 15-20% in the areas that TCF schools are located in.

Many of our female students are the first in their family to attend school. To ensure that we maintain a high percentage of girls in our schools, all our teachers and principals are women. We hire from within the communities of our schools to provide well-paying career opportunities to women in those areas. TCF has created over 14,000 jobs, of which over 12,000 are faculty roles filled by women. In a society where positive female role models are hard to find, our teachers are an example of what is possible. Measures are taken, in co-ordination with community leaders on the ground, to ensure that TCF schools are a safe place to learn.

TCF schools are surrounded by boundary walls, and are situated in accessible locations, so that girls do not have to travel far to get to school.

TCF’s success in providing mass-scale, high quality education to the poorest communities in Pakistan is what makes our model unique. Every year, we invest into curriculum development to increase our quality of education, so that our students are able to surpass the learning outcomes of what children could otherwise receive in a public education system.

Our curriculum is an enhanced version of the state curriculum that encourages creativity and builds on critical thinking skills. Our teaching-aids, books and student materials are produced in-house, drawing from the best of international curriculums. We make learning as interactive as possible so that students are actively engaged in the material they are learning. English as a Second Language (ESL) studies starts from Class I (age 5), as opposed to the government curriculum, which starts in Class 6.

TCF schools also offer remedial programmes to help older children who have never been to school to catch up with their peers, providing basic literacy and numeracy skills.

Our success in providing high quality education is reflected in the outstanding academic performance of our students. In the most recent academic year, 95% of TCF students passed nationwide year 10 exams, compared to the national average of only 56%. Over 85% of TCF graduate enrol into intermediate education (the equivalent of A-levels), and of that number, many enrol into university education.

Many TCF graduates, with the support of TCF scholarships, have ended up in Pakistan’s top business schools, and abroad in universities such as Harvard, University of Michigan, Lewis and Clark College as well as colleges across Europe. These students return to their communities to make a difference. For example, Nadeem Hussain, who grew up in a slum in Karachi, now works on public education reforms as a World Bank employee; Anum Fatima, whose father was a labourer, is implementing a micro-lending program in her village, which she designed during an internship in Washington, DC; Mairaj Ahmed, is now working on re-foresting the mangrove in his fishing village; and Afzal Channa is a trained paramedic and provides emergency first aid.

£20 million invested in our programmes in 2016

204,000 students

50% gender ratio

12,000 all-female faculty

95% Matriculation pass rate

2,200 TCF students pursue higher education

48% achieve an A/A+ on board level exams

64,400 Aagahi graduates (TCF’sfemale adult literacy programme)

20,000 local community members benefit from TCF’s clean drinking water projects per a day


Challenging Gender Norms in Local Communities

High Quality Education

TCF Alumni are Breaking Barriers


our programmes Teacher Training TCF recognises that its strongest weapon in the fight against illiteracy are its teachers.

Finding qualified teachers in the places TCF operates in - which are regularly afflicted by poverty, instability and violence - is challenging. Many teachers across Pakistan, especially in rural areas, are hired with a secondary school qualification and receive almost no on the job training (UNESCO Pakistan, 2006-07). These teachers struggle to meet the needs of their students, contributing to the high dropout rates in these areas.

TCF on the other hand, provides well trained, local teaching posts to over 12,000 women across Pakistan. Teachers are hired based on merit and receive over 100 hours of pre-service training before being allowed to step foot in a classroom. Throughout the year, TCF teachers are required to participate in at least 70 hours of in-service training and their performance is benchmarked through

rigorous monitoring and evaluation. Our Learning Management System (LMS) is designed to supplement our teacher training programme by providing teaching aids and competency tests to ensure that the quality of education our teachers provide is the best possible. This level of investment in the teaching faculty is comparable to private schools in Pakistan.

Our teacher training programme focuses on the professional development and capacity building of principals and teachers. We focus on fostering strong leadership and management skills which correlates with increased student achievement and nurtures a continued community buy in the education of future generations of TCF students.

Water Projects Polluted water causes a staggering 40% of deaths in Pakistan. Access to clean drinking water in Pakistan, resulting in the spread of water related diseases includingdiarrhea, hepatitis, and typhoid. For school children, this means missing school due to water and sanitation diseases.

The effects of polluted water do not stop here. Women and girls often have to travel long distances to collect

1

1. Mohsin et al, 2013


water for their families. As a result, girls are often taken out of school to do water fetching duties.

Many TCF schools are located in areas where there is limited access to clean drinking water. In partnership with Community Advisory Welfare Services (CAWS) and So Safe Pakistan, TCF has begun rolling out water wells to provide access to quality drinking water in communities where its schools are located. After a successful pilot, TCF plans to install water filtration plants across all TCF school locations, with the help of its partners. As of 2016, TCF has set up 16 water plants across the country serving 20,000 beneficiaries daily.

Alumni Development ProgrammePakistan has one of the lowest numbers of university graduates in the world with only 6 per cent of people between the ages of 17-23 years enrolled in higher

education. Among the students who do attend university,

At TCF, we encourage our students to continue on with higher education. We offer full college and university scholarships – and with the help of our supporters - equip our alumni with the skills to become the next generations of entrepreneurs, politicians, doctors and lawyers in the country.

TCF’s Alumni Office provides one-on-one career counselling, vocational and employment opportunities across Pakistan.

Adult Literacy ProgrammePakistan has one of the lowest literacy rates in the world, with more than 50 million illiterate people with a literacy rate of a mere 45.8% for adult women and 69% for men.

Women, especially, have trouble accessing quality education, not just physically but also culturally and financially.

TCF’s Aagahi Adult Literacy programme is designed to provide basic literacy and numeracy skills in poor neighbourhoods. Classes are held at (or in close vicinity to) TCF schools. At the end of a typical three-month course, an individual is able to read a newspaper, write a letter and do basic arithmetic for household budgeting and buying or selling goods in a market place.

The programme benefits illiterate community members aged 12-65 living in the vicinity of a TCF school and who have never been to school. As of 2015, the programme has over 53,000 learners enrolled in over 2,800 centre’s across the country.

Rahbar Rahbar is a mentorship programme for young adults. TCF began its flagship mentorship programme in 2008. The programme aims to nurture creativity, confidence and critical thinking skills in our students.

The programme provides volunteer mentors for eighth and ninth grade students. TCF children interact with their mentors at an important stage in their lives, enabling them to forge connections outside their immediate community. It exposes them to potential career paths that they would not be exposed to otherwise.

Today, the programme serves over 25,300 mentees with the help of 6,000 mentor volunteers from across the country.

TCF’s success continues to be recognised internationally Our work has been recognised internationally for its contribution. In 2016, TCF was one of the top 10 finalists for the OECD DAC prize. In 2015, TCF was selected for Schwab’s Social Entrepreneur of the Year. In 2014, TCF won the Ramon Magsaysay Award, informally thought to be the “Nobel Prize for Asia”. In 2013, TCF won the Skoll Foundation Award for Social Entrepreneurs. Since 2011 TCF was invited to participate in the Clinton Global Initiative. TCF was also the recipient of the 2010 WISE (World Innovation Summit for Education) Award by the Qatar Foundation.

TCF School in Balochistan

retention rates are low.

2

2. British Council 2015.


government school adoption programme In Pakistan, the government has failed to produce a sustainable public sector education system for its people, contributing to one of the biggest education crises in the world.

Poor infrastructure and school management are correlated with poor learning outcomes and high drop-out rates among students. Even if they believe in education, parents are uncomfortable sending their children to schools that have broken infrastructure, no running water and electricity, and where teachers do not turn up to class.

As a result, children in government schools perform poorly in their exams and are unable to pursue higher education or a sustainable employment and the cycle of poverty continues.

Our InterventionTCF Government School Adoption Programme aims to leverage TCF’s key learnings over the past 20 years – that is of providing high quality education at a large scale and low cost –and implement them in the government’s worst performing schools. Broadly, this includes rehabilitating the infrastructure and developing an effective system of operational management to run the schools.

In the 2016 academic year, TCF signed MoUs with the governments of Sindh, Punjab and KPK to revive 271 failing government schools. Over the course of a year, TCF has refurnished over 60 classrooms, hired and trained 1,900 teachers, implemented high quality curriculum standards and run enrolment campaigns in local areas to encourage parents to send their children to school.

Rehabilitation of InfrastructureWhen management of these schools was handed over to TCF, many looked like prison cells. They were unfurnished, and classrooms were multi-grade - which means that children from Years 1 to 5 sat in the same classroom and were taught by a single teacher.

Over a few short months, TCF provided basic improvements to the schools including, furniture, water and

washroom facilities. This not only ensured the schools were safe for students to study in, but encouraged more parents to send their children to school.

Studies show that better infrastructure helps more children into school. Indeed, within a few months, enrolment increased from an average of 30 to 126 students per school.

Improving Quality of EducationThe failing schools we adopted suffered high levels of teacher absenteeism, poor teacher training and a lack of learning materials. Students told us that they were regularly subject to corporal punishment, and forced to do chores for their teachers such as cleaning and laundry.

Since government school teachers are political appointees, it makes it difficult to hold them accountable in the face of a high rate of teacher absenteeism and poor student learning outcomes. TCF has a unique teacher training programme that is used to facilitate year round training of over 12,000 teachers every year. We were able to adapt the same programme to hire and train over 1,900 new teachers in the adopted government schools. To reduce the likelihood of our teachers not turning up to work, TCF provides door to door transportation for all our faculty, including our new hire in government schools.

Finally, student learning outcomes are carefully monitored through TCF’s rigorous processes of monitoring and evaluation. TCF carries out routine competency tests to monitor student learning outcomes and identify specific areas for improvement.

State of government school at the time of adoption


TCF Remedial Programme The average student in the government schools we

adopted were 2 years behind their expected grade level.

TCF’s immediate challenge therefore is to bring these students to the required literacy and numeracy level so that their teachers can build on their learnings and take them forward in their respective grades.

Remedial classes in the form of speed literacy and numeracy classes were carried out to close the gap between what students know and what they are expected to know at their grade level. These programmes were designed building on the success of TCF’s Aagahi programme (female adult literacy classes).

A baseline study revealed the poor quality of education in government schools

The project reached 9,500 students across 253 schools across

districts namely, Chakwal, Attock, Narowal, Rawalpindi,

Sargodha and Kasur.

55%

of Class 5 students could not write Class 2 level sentences in English

78%

of Class 5 students could not perform Class 3 level two-digit division

47%

of Class 5 students could not read Class 2 level text in English

AVERAGE ENROLMENT

JUMPED FROM37TO126 STUDENTS

PER SCHOOL


support TCF

TCF-UK is grateful to our long list of individuals,

corporates, trusts and foundations who have

shown us tremendous support. Our

success would not be possible without you

It does not take much to make a big difference in supporting education for underprivileged children in Pakistan. Here are some of the ways your donation can change a life of a child, a family and a community:

£10 can support one child through education for a month £120 can support one child through education for an entire year £769 can restock an entire school library £1,270 can support a child through education from KG to Metric £2,769 can support a classroom for a year £17,500 can support the running costs of a school of up to 180 children for

one year

Ways to donate:

For more information on giving a gift to TCF-UK please call 020 3585 3011/12 or email

[email protected] Cheques can be made

payable to ‘The Citizens Foundation (UK)’ and sent to:

TCF-UK 48 Charlotte Street London, W1T 2NS

One- off DonationsMake a one-off donation in your name or in the name of a close loved one in support of a classroom, library or a school unit. If you are a UK taxpayer, this may be increased through the Gift Aid scheme.

Direct Debits £10 a month can help TCF provide an education to Pakistan’s most vulnerable children.

Match your donation through your employer Many companies match donations that their employees make to charity. Increase the value of your contribution by taking advantage of your company’s matching gift scheme.

Get Involved

Whether you are an individual, a university society or a community group, there are many ways you can get involved to help raise awareness of our cause, such as: holding an information evening among your friends, family and colleagues to raise awareness, organising your own fundraising event (whether big or small), such as an Iftaar party, musical night or film screening and doing challenges to raise funds for TCF like a sponsored run.


who we are

Volunteers

None of our work would be possible without the hard work and dedication of TCF-UK’s active volunteers who have worked tirelessly this year to help make our success possible:

Sabah Sufi Huma Nawaz Mahgul Khan Irim Hussain Sana’a Ghani Soniya Ghani Ali Shahid Iman Virji Sahar Zafar Sara Zafar ...and countless others

TCF-UK Team

Shazia Syed - Director of Fundraising Zaynab Hasan - Volunteer & Admin Coordinator Sumaiya Virji - Fundraising & Advocacy Executive

Trustees

TCF-UK Trustees are responsible for the Foundation’s strategic direction and custodianship of resources and fundraising activities undertaken.

Atif Ali Atif first started volunteering for TCF-UK in 2006 having established CVBoosters with some friends as a fundraising venture for the cause. He works as a research analyst in the city.

Imtiaz Dossa Imtiaz has been a supporter of TCF since its inception in Pakistan in 1995 and has supported female education since before then. Until 2010, Imtiaz was also a trustee of a major international charity. Prior to this, Imtiaz ran a trading company and qualified as a Chartered Accountant.

Tariq Hussain Tariq has been associated with TCF since 1998, firstly as a donor and then as part of the team that registered TCF-UK as a registered charity in 2001. Tariq is an investment banker and Chartered Accountant by profession and holds an MBA from IMD, Lausanne.

Bilal Raja Bilal has been a supporter of TCF since 1998, and then as a Trustee in the UK since 2008. By profession, Bilal is a fund manager in the city and holds a Masters in Finance from London Business School and is a qualified Chartered Financial Analyst.

THE CITIZENS FOUNDATION (UK) company no: 4075959

Annual Report and Financial Statements for the year ended 31 December 2016

COMPANY INFORMATION

DIRECTORS: T R Hussain B Raja M A Ali I S Dossa

SECRETARY: T R Hussain

REGISTERED OFFICE: 48 Charlotte Street London W1T 2NS

REGISTERED NUMBER: 4075959 (England & Wales)

CHARITY NUMBER: 1087864 (England & Wales)

AUDITORS: Haines Watts Chartered Accountants Statutory Auditors Aissela, 46 High Street, Esher, Surrey, KT10 9QY

BANKERS: Lloyds Bank plc 70-71 CheapsideLondonEC2V 6EN

HSBC Bank plc 95 Grace Church Street London EC3V 0DQ

TRUSTEES' REPORT

The Trustees (who are directors for the purposes of the Companies Act 2006) are pleased to present their annual trustees' report together with the financial statements of the charity for the year ended 31 December 2016 which are also prepared to meet the requirements for a direc tors' report and accounts for Companies Act purposes.

The financial statements comply with the Charities Act 2011, the Companies Act 2006, and Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2015).




TRUSTEES' REPORT (cont'd)

CONSTITUTION, POLICIES AND OBJECTIVES

The Citizens Foundation (UK) (TCF-UK) is constituted as a company (No: 4075959) limited by guarantee incorporated in London (England and Wales) on 21 September 2000, and registered as a charity (No: 1087864) in England and Wales on 6 August 2001.

TCF-UK's principal objective is to raise awareness of and funds for The Citizens Foundation (TCF), Pakistan’s leading charity in the field of formal education for underprivileged children.

There have been no changes in the objectives since the last Annual Report.

In earlier pages of this Annual Report, the Trustees have provided a great deal of additional detail and analysis of the income and expenditure of the Charity as well as comprehensive information on TCF: its work, ethos, current status and future plans and aspirations.

The Trustees have considered the Charity Commission's guidance on public benefit and believe that our work and purposes clearly meet the public benefit requirement.

FUTURE PLANS

TCF-UK is committed to support the long-term, sustained growth of TCF. Our priority in 2017, as in 2016, continues to be to build a passionate, committed and diversified donor -base to provide a secure and sustainable foundation for TCF. TCF's schools, including the 271 failed government schools it recently adopted, nurture and produce tolerant, economically self-reliant, self-confident and civic-minded citizens.

MEMBERSHIP

TCF-UK is currently not a member of any professional body or umbrella organisation, other than TCF. The Trustees are satisfied with the results and activities of the Company for the year and do not anticipate any significant changes in the forthcoming year.

RESERVES POLICY

2016 2015 Restricted funds

Endowment fund investment 413,160 376,860

Other restricted funds 43,698 35,157

Restricted funds 456,858 412,017

Unrestricted funds 109,224 94,059

Accumulated funds 566,082 506,076


£ £




Restricted funds - see notes 3, 5, 11 & 12 for full details: Endowment fund investment £413,160 (2015: £376,860): these shares - their income and any

proceeds from their sale, are restricted by the donor to be used solely for the benefit of the donor's school units.

Other restricted funds £43,698 (2015: £35,157): these are restricted funds received from donors towards the end of each year and remitted to TCF early in the following year. The amount of these restricted donations or grants received late in the year and therefore left over with the charity at the year end is normally outside the control of the charity.

Unrestricted funds: see notes 11 & 12. The charity aims to maintain unrestricted funds, which are the free reserves of the charity, at a level of about £100,000 which equates to approximately one year’s on-going expenditure on the governance, management and administration of the charity. The Trustees believe this should provide sufficient funds to enable the charity to respond to unexpected contingencies. At 31 December 2016 total unrestricted retained funds were £109,224 ( 2015: £94,059) which is

broadly in accordance with the above basis.

RISK MANAGEMENT

The Trustees have assessed the major risks to which TCF-UK is exposed, in particular those related to the operations and finances of the Company, and are satisfied that systems are in place to mitigate their exposure to those major risks.

STRUCTURE, GOVERNANCE AND MANAGEMENT

All the Trustees participate in the management of the Charity. Existing Trustees appoint new trustees after a six-month induction process. The Trustees rely on the excellent guidance for new and existing trustees published by the Charity Commission.

STATEMENT OF TRUSTEES’ RESPONSIBILITIES

The Trustees (who are also directors of The Citizens Foundation (UK) for the purposes of company law) are responsible for preparing the Trustees’ Annual 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 charitable company and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that period. In preparing these financial statements, the T rustees are required to:

• select suitable accounting policies and then apply them consistently;• observe the methods and principles in the Charities SORP 2015 (FRS 102);• make judgements and estimates that are reasonable and prudent;• state whether applicable UK Accounting Standards have been followed, subject to any

material departures disclosed and explained in the financial statements;• prepare the financial statements on the going concern basis unless it is inappropriate to


presume that the charitable company 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 charitable company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are als o 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. The trustees are responsible for the maintenance and integrity of the corporate and financial information included on the charitable company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions .

In so far as the Trustees are aware:

• there is no relevant audit information of which the charitable company’s auditor isunaware; and

• the Trustees have taken all steps that they ought to have taken to make themselves awareof any relevant audit information and to establish that the auditor is aware of thatinformation.

AUDITORS

TCF-UK’s Financial Statements are subject to a statutory audit. This has been completed by Haines Watts.

The report has been prepared having taken advantage of the small companies exemption in the Companies Act 2006.

Signed on behalf of the Board:

_________________

T R HUSSAIN

17 July 2017




Independent Auditor’s Report to the members of The Citizens Foundations (UK) Limited (by guarantee)

We have audited the financial statements of The Citizens Foundation (UK) for the year ended 31 December 2016 which comprise of the Statement of Financial Activities, the Balance Sheet, the Cash Flow Statement and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) including FRS 102 ‘‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’’.

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.

Respective responsibilities of trustees and auditor

As explained more fully in the Trustees’ Responsibilities Statement set out on page s 22 & 23, the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.

Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the charitable company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the trustees; and the overall presentation of the financi al statements. In addition, we read all the financial and non -financial information in the Trustees’ Annual Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on fina ncial statements

In our opinion the financial statements:

• give a true and fair view of the state of the charitable company’s affairs as at 31 December2016, and of its incoming resources and application of resources, including its income andexpenditure, for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally AcceptedAccounting Practice; and

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




INDEPENDENT AUDITOR'S REPORT (Cont.)

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 Trustees’ Annual Report for the financial year for which the financial statementsare pre pared is consistent with the financial statements; and

• the Trustees Annual Report has been prepared in accordance with applicable legal requirements.

• In the light of our knowledge and understanding of the company and its environment obtained in the courseof the audit, we have not identified material misstatements in the Trustees’ Annual Report.

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 Trustees Annual 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 receivedfrom branches not visited by us; or

• the financial statements are not in agreement with the accounting records and re turns; 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 companiesregime and take advantage of the small companies exemption in preparing the Trustees’ Annual Report andtake advantage of the small companies exemption from the requirement to prepare a strategic report.

Jane Wills FCA MA

Senior Statutory Auditor

For and on behalf of

Haines Watts Chartered Accountants Statutory Auditors Aissela 46 High Street Esher Surrey KT10 9QY

20 July 2017




STATEMENT OF FINANCIAL ACTIVITIES (including income and expenditure account)

Unrestricted Restricted 2016 2015 Note s Funds Funds Total Funds Total Funds

£ £ £ £ Income

Donations, grants and endowments 1 & 10 1,006,350 574,173 1,580,523 1,373,681 Other trading activities (fundraising events) 1 48,141 72,824 120,965 9,874 Income from Investments 1 618 8,814 9,432 534 Total income and endowments 1,055,109 655,811 1,710,920 1,384,089

Expenditure

Cost of raising funds (including fundraising events) 1, 2, 8 & 9 165,916 1,035 166,951 107,153 Expenditure on Charitable activities 1 874,028 646,235 1,520,263 1,002,434 Total expenditure 1,039,944 647,270 1,687,214 1,109,587

Net gains/(losses) on investments 3 & 5 - 36,300 36,300 23,760

Net income/(expenditure) and net movement in funds for the year 15,165 44,841 60,006 298,262

Reconciliation of funds

Total funds brought forward 94,059 412,017 506,076 207,814

Total funds carried forward 3 & 11 109,224 456,858 566,082 506,076




BALANCE SHEET as at 31 December 2016

Notes 2016 2015 £ £ £ £

FIXED ASSETS

Tangible assets 4 382 570 Investments (endowment fund) 3, 5 & 12 413,160 376,860

413,542 377,430

CURRENT ASSETS

Cash at bank and in hand 12 152,734 134,196 Debtors 6 & 12 9,476 4,783

162,210 138,979

Creditors Amounts falling due within one year 7 & 12 (9,670) (10,333)

NET CURRENT ASSETS 152,540 128,646 566,082 506,076

REPRESENTED BY

Accumulated Funds

Unrestricted funds 11 & 12 109,224 94,059 Restricted funds 3, 11 & 12 456,858 412,017

566,082 506,076

The financial statements have been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small companies .

Signed on behalf of the Board

__________________ __________________

T R HUSSAIN I S DOSSA Director Director

Approved by the Board on 17 July 2017


2016 2015

£ £Cash flows from operating activities:Net cash provided by (used in) operating activities Note A 9,106 (69,957)

Cash flows from investing activities:Dividends from investments 8,814 -Purchase of property, plant and equipment - (796)Bank Interest received 618 534Net cash provided by (used in) investing activities 9,432 (262)

Cash flows from financing activities:Receipt of endowment - -Net cash provided by (used in) financing activities 0 0

Change in cash and cash equivalents in the reporting period 18,538Cash and cash equivalents at the beginning of the reporting period Note B 134,196

(70,219) 204,415

Cash and cash equivalents at the end of the reporting period Note B 152,734 134,196

Note A: Reconciliation of net movement in funds to net cash flow from operating activities 2016 2015

£ £

Net movement in funds for the reporting period (as per the statement of financial activities) 60,006 298,262Adjustments for:Depreciation charges 188 1,073Donation of shares (353,100)Gain on investment (36,300) (23,760)

STATEMENT OF CASH FLOWS

for the year ended 31st December 2016Annual Report and Financial Statements

THE CITIZENS FOUNDATION (UK)company no. 4075959


Dividends received included in investing activities (8,814)Interest received included in investing activities (618) (Increase)/decrease in debtors (4,693)

(534) 7,271

Increase/(decrease) in creditors (663) 831Net cash provided by (used in) operating activities 9,106 (69,957)

Note B: Analysis of cash and cash equivalents 2016 2015 £ £

Cash in hand 152,734 134,196Notice deposits (less than 30 days) - -Overdraft facility repayable on demand - -Total cash and cash equivalents 152,734 134,196



NOTES TO THE FINANCIAL STATEMENTS

1) ACCOUNTING POLICIES

Basis of preparation of Financial Statements:

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

The Citizens Foundation (UK) meets the definition of a public benefit entity under FRS 102.Assets and liabilities are initially recognised at historical cost or transaction value unlessotherwise stated in the relevant accounting policy notes.

Company Status

The Company is a company limited by guarantee. The members of the Company are theTrustees named above. In the event of the company being wound up, the liability in respect ofthe guarantee is limited to £10 per member of the Company.

Fund Accounting

Unrestricted funds are available to spend on activities that further any of the purposes of thecharity. Restricted funds are donations which the donor has specified are to be used solely fora particular purpose, for example to build or support the running costs of a nominated schoolor other defin ed educational purpose.

Income Recognition policies

Income is recognised and included in the accounts when all of the following criteria are met:• The Charity has entitlement to the funds;• Any performance conditions have been met;• There is sufficient certainty that the receipt of the income is considered probable; and• The amount can be measured reliably.

Gift aid: Income includes gift aid outstanding and receivable from HMRC at the year end.

Donated Services: The charity benefits greatly from the involvement and enthusiastic support of its many volunteers, details of which are given in our annual report. In accordance with accounting standards, the economic contribution of general volunteers is not measured in the accounts.




NOTES TO THE FINANCIAL STATEMENTS (Cont)

Donated Shares: Donated shares are initially recognised at the share price on the date of transfer to the charity. They are subsequently recognised at fair value at the balance sheet date, as detailed in the Fixed Asset Investments accounting policy on page 30.

Expenditure

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 the following headings: • Cost of raising funds - £166,951 includes costs of £17,612 incurred on fundraising events. The

remainder is comprised of wages (see note 8), rent (see note 9) and other costs incurred in raising awareness of and funds for TCF, managing the day-to-day running of the charity and complying with its legal obligations ( 2015: £107,153).

• Expenditure on Charitable activities - £1,520,263 (2015: £1,002,434) is comprised of:- £1,499,682 of school support, build and endowment grants to TCF ( 2015: £975,947)

- £14,337 of school support grants to PFL's former beneficiaries ( 2015: £21,253)and 6,244 statutory audit fee ( 2015: £5,234)

Leasing Commitments

The rental payments under operating leases are recognised on a straight-line basis over the lease term.

Tangible Fixed Assets

All assets costing under £500 are capitalised in the year of purchase, but are written down to a value of £1. Assets costing more than £500 are capitalised and are depreciated at 33% on the reducing balance basis.

Fixed Asset Investments

Fixed asset investments consist of listed investments. Investments are valued at their fair value measured using the share price at the balance sheet date.

Debtors

Trade and other debtors are recognised at the settlement amount. Prepayments are valued at the amount prepaid after taking account of any trade discounts due.

Creditors

Creditors are recognised where the charity has a present obligation resu lting from a past event that will probably result in the transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliably. Creditors are normally recognised at their settlement amount after allowing for any trade discounts due.






Pension costs and other post-retirement benefits

The charitable company operates a defined contribution pension scheme. Contributions payable to the charitable company’s pension scheme are charged to the Statement of Financial Activities in the period to which they relate.

First year adoption

The company has transitioned to the Charities SORP (FRS 102) from previously being prepared under the historic cost convention and in accordance with the Statement of Recommended Practice applicable to charities preparing their accounts in accordance with Financial Reporting Standards for Smaller Entities (effective January 2015) as at 1st January 2015.

Going Concern

The trustees have identified no material uncertainties that cast significant doubt about the ability of the charitable company to continue as a going concern.

2) TRUSTEES EXPENSES & REMUNERATION

During the year none of the Trustees received any remuneration, benefits in kind or expenses.

3) RESTRICTED FUNDS

Restricted funds of £456,858 on the Balance Sheet at 31 December 2016 were made up of:• £43,698 received towards the end of 2016 and remitted to TCF after the year end ( 2015: £35,157); and• £413,160 being the value at 31 December 2016 of quoted shares received in 2015 by the Charity from a donor for an endowment fund. The value of the shares had increased during the year by £36,300, from £376,860 at the 31 December 2015. The shares continue to be held by the Charity. The dividend income in 2016 has been applied towards the support costs of schools built by that donor. Future dividend income and, potentially, any gains in the value of these shares, shall only be applied towards the support costs of existing and future schools built by that donor. The year end value was based on fair value being the closing price on the London Stock Exchange on 31 December 2016 ( 2015: £376,860).

4) TANGIBLE FIXED ASSETSDepreciation is provided at the following annual rates in order to write off each asset over its estimateduseful life: Office equipment - 33% on the reducing balance basis

Cost Office Equipment£

At 01 January 2016 10,673Additions in the year - At 31 December 2016 0,673

Depreciation

At 01 January 2016 10,103Charge for year 188At 31 December 2016 10,291

Net Book Value

At 31 December 2016 382At 31 December 2015 570




5) INVESTMENTS (endowment fund) Listed investments

£ Cost or valuation At 1 January 2016 376,860 Additions - Disposals - Revaluations 36,300 At 31 December 2016 413,160

Carrying amount At 31 December 2016 413,160 At 31 December 2015 376,860

6) DEBTORS: Amounts falling due within one year

2016 2015 £ £

Other debtors 9,476 4,783

7) CREDITORS: Amounts falling due within one year

2016 2015 £ £

Accruals 7,198 3,994 Other creditors 2,472 6,339 Total 9,670 10,333

8) WAGES 2016 2015 £ £

Salaries 86,597 69,644 Social security costs 5,011 4,041 Pension contributions 280 -

91,888 73,685

Average number of employees 3 3

No employee was paid more than £60,000 ( 2015: nil)





9) OPERATING LEASES

Total future minimum lease payments under non-cancellable operating leasesare due in each of the following periods:

2016 2015 £ £

Expiring: Within one year 18,835 9,332 Later than one year and not later than five years 7,848 -

26,683 9,332

The total operating lease expenditure included in the Statement of Financial Activities is £18,805 (2015: £18,444).

10) RELATED PARTY TRANSACTIONS

As in previous years, all the Trustees have made donations to the Charity, the total of thesedonations in 2016 being £53,369 (2015: £69,204). As in previous years, there were nopayments made to any trustee and no other related party transactions.

11) ANALYSIS OF MOVEMENT OF UNRESTRICTED AND RESTRICTED FUNDS

Balance Income Expenditure Funds

1 January 31 December

2016 2016

£ £ £ £

Unrestricted funds 94,059 1,055,109 1,039,944 109,224

Restricted funds

- Endowment fund

- received 376,860 8,814 8,814 376,860

- net gain on investment - 36,300 - 36,300

- Endowment fund 376,860 45,114 8,814 413,160

- other restricted funds 35,157 646,997 638,456 43,698

Restricted funds 412,017 692,111 647,270 456,858





Balance Income Expenditure Funds

1 January 31 December

2015 2015

£ £ £ £

Unrestricted funds 110,384 545,211 561,536 94,059

Restricted funds 97,430 862,638 548,051 412,017

12) ANALYSIS OF NET ASSETS BETWEEN FUNDS

Unrestricted Restricted Restricted Totals

funds funds funds

Investments Others

£ £ £ £

Fixed (tangible) assets 382 0 0 382

Investments: endowment fund 0 413,160 0 413,160

Cash at bank 109,036 0 43,698 152,734

Other current assets/liabilities (194) 0 0 (194)

Total 109,224 413,160 43,698 566,082

Total restricted funds 456,858

13) FINANCIAL INSTRUMENTS

Financial assets measured at fair value through net income/expenditure comprise of listedinvestments. Fair value is measured using the share price at the balance sheet date. Seedetails of carrying amount and net gain from investment in note 10.


48 Charlotte Street, London W1T 2NS | T 020 3585 3011/ 12 | E [email protected] | W www.tcf-uk.org Registered Charity Number: 1087864 (England and Wales)

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