The accounting, financial, and exchange control policies adhere strictly to the norms and standards set by the Board of Management. This ensures that the Madressa’s finances comply with the statutory, legal, and banking requirements of South Africa, Swaziland or India.
A perusal of the documents in the Madressa’s archives show that the accounts of the Madressa were audited and made public in 1934. Full disclosure of finances of MAIK and all its subsidiaries has been made at every Annual General Meeting (AGM). The Madressa has held an AGM each year for close onto 100 years.
The Finances are managed at three levels.
The Board has always preferred to place its surplus fund into fixed properties and only consider equities that are listed on the South African Stock Exchange as an interim measure, pending the purchase of a suitable property. This was also a necessary strategy taking into account the restriction placed on the community during the apartheid era. The investment in equities has always taken every precaution to ensure compliance with Shariah requirements and invests for long term returns instead of speculative short term investments.
Members of the Board that have extensive experience in both fixed asset management and in equities are asked to serve on the Investment Sub-committee.
Surplus funds are invested into three types of equity:
The Investment Committee provides a report to the Board and makes recommendations to the Board. Any purchase or sale of any fixed asset has to be made by a majority decision of the Board of Management.
The returns on the properties in South Africa yield between 6% and 12%, and taking into account the yield from the equities, this provides a healthy income stream to meet the budget of over R 2 200 000 per annum (2013). The income also provides a reserve fund for future growth and contingencies.
In 1937 the Kholvad House building in Market Street was demolished to make way for what is now the flagship of the Madressa. In 1942 the property in Market Street was renovated and comprised of two shops, and flats on five floors; these have provided steady income to MAIK. The fifth floor houses the MAIK offices, the caretaker’s flat and the Kholvad Club, which previously provided rooms for visitors at no costs. The Boardroom and the Namaaz room provide invaluable service to MAIK. The property has recently been renovated and refurbished extensively at considerable cost.
The property on Berg Street consists of two shops and twelve flats and was purchased in 1974.
Two commercial properties (Witfield and Benoni) were sold because they were no longer profitable. The Board approved the purchase of a property in Greenside, a suburb north of the Johannesburg CBD. The property consists of two shops and flats on three floors, making this an extremely good investment.
The Mbabane property was purchased in 1959 to counter the restrictions from the South African apartheid state which prohibited sending funds from South Africa to India. The building comprises of two shops and three floors of offices.
This corner property was purchased in July 1959. The building is situated in the CBD and comprises of five shops fronting on two streets. These properties have provided excellent returns over the last fifty years. Both properties are registered taxpaying entities in terms of the Swaziland Revenue Services.