Introduction

The Akshaya Patra Foundation is a not-for-profit organisation feeding

millions of underserved children in India. We are committed to
eradicating two crucial issues - hunger and malnutrition in India - by
implementing the Mid-Day Meal Programme in government and
government-aided schools. Carrying out the world’s largest NGO-run
feeding programme, Akshaya Patra aims to not only fight hunger with
nutritious meals but also bring children to school.
In the central Indian state of Chhattisgarh, our ISO-certified
centralised kitchen currently feeds 29,835 children in 192 schools.
We place the highest emphasis on hygiene and cleanliness and
operate through two kitchen models: Centralised and Decentralised.
In the state of Chhattisgarh, our kitchen was established in the year
2009.
Bhilai: The ISO-certified kitchen in Bhilai started operations in
January 2009. It currently reaches out to 29,835 children in 192
schools in the region.
The Akshaya Patra Foundation is a not-for-profit organisation
headquartered in Bengaluru, India. Our organisation strives to
eliminate classroom hunger by implementing the Mid-Day Meal
Scheme in the government schools and government-aided schools.
Alongside, Akshaya Patra also aims at countering malnutrition and
supporting the right to education of socio-economically disadvantaged
children.
Since 2000, Akshaya Patra has been concerting all its efforts towards
providing fresh and nutritious meals to children on every single
school day. We are continuously leveraging technology to multiply
our reach. The state-of-the-art kitchens have become a subject of
study and have attracted curious visitors from around the world.
Our partnership with the Government of India and various State
Governments, along with the persistent support from corporates,
individual donors, and well-wishers have helped us to grow from
serving just 1,500 children in 5 schools in 2000 to serving 1.7 million
children in 14,264 schools.
Today, Akshaya Patra is the world’s largest (not-for-profit run) Mid-
Day Meal Programme serving wholesome food every school day to
over 1.7 million children from 14,264 schools across 12 states in
India.

What is Mid-Day Meal?

Mid-day meal (MDM) is a wholesome freshly-cooked lunch served to

children in government and government-aided schools in India. On 28
November 2001, the Supreme Court of India passed a mandate
stating, "We direct the State Governments/Union Territories to
implement the Mid-Day Meal Scheme by providing every child in
every Government and Government assisted Primary School with a
prepared mid-day meal."
Mid-Day Meal Scheme aims to:

 avoid classroom hunger

 increase school enrolment
 increase school attendance
 improve socialisation among castes
 address malnutrition
 empower women through employment


Implementation of the Mid-Day Meal Scheme: The Akshaya Patra

Foundation, which was successfully implementing its own school
lunch programme in Karnataka since 2000, was called in to give
testimonies for verifying the efficacy of the scheme; following which
the mandate to implement Mid-Day Meal Scheme was passed.
In order to successfully carry out this mandate, each State
Government started its own Mid-Day Meal Programme with Akshara
Dasoha being initiated by the Government of Karnataka.
One of the major challenges faced by the Government was the
successful implementation of the scheme. As per the NP-NSPE, 2006
Guidelines (Mid-Day Meal Scheme Guidelines), wherever possible,
the Government would mobilise community support and promote
public-private partnership for the programme. Not-for-profits, such as
Akshaya Patra, are therefore encouraged to set up operations and act
as the implementing arm of the Government.
The Karnataka Human Development Report, 2005 states, ‘The
recognition of the role of voluntary agencies in partnering with
Government initiatives by the Centre may have had some influence in
the initiatives taken by the Government of Karnataka to bring several
NGOs into major Government sponsored programmes.’ As the report
states, the Government of Karnataka was the first to take the step of
involving NGOs in development programmes. Additionally, the
report states that this ‘involvement of the NGOs in
multilateral/bilateral programmes, raises the level of co-operation to
another level. The NGOs become not only implementers; they also
find a place in designing and managing programmes together with
Government at all levels.’
This pioneering move by the Government of Karnataka to make
NGOs the implementing arm of the Government has been one of the
major reasons for its success in reaching the programme's goals. The
achievements of these private-public partnerships have even
influenced the Central Government. By setting up and encouraging
private-public partnerships, the Government is successfully
leveraging the skills and resources of the private sector for the greater
good. India's Mid-Day Meal Scheme is one of the largest school lunch
programmes in the world benefiting 9.78-crore children in 11.40-lakh
schools (as per 2016-17 data).

The objectives of Mid-Day Meal as issued by the government:

• Improving the nutritional status of children in classes I-V in
Government, Local Body and Government aided schools, and EGS
and AIE centres
• Encouraging children, belonging to disadvantaged sections, to
attend school more regularly and help them concentrate on classroom
activities
• Providing nutritional support to children of primary stage in
drought affected areas during summer vacation
While focusing on improving nutritional level and attendance,
Akshaya Patra also aims to address two Sustainable Development
Goals: Zero Hunger and Quality Education.

Vision and Mission

Vision
NO CHILD IN INDIA SHALL BE DEPRIVED OF EDUCATION
BECAUSE OF HUNGER.

Mission
TO FEED 5 MILLION CHILDREN BY 2020.

What are 'Accounting Policies'

Accounting policies are the specific principles and procedures
implemented by a company's management team and are used to
prepare its financial statements. These include any methods,
measurement systems and procedures for presenting disclosures.
Accounting policies differ fromaccounting principles in that the
principles are the accounting rules and the policies are a company's
way of adhering to those rules.

Significant accounting policies

1. Basis of accounting:-
The financial statements of the Company have been prepared in
accordance with Generally Accepted Accounting Principles in India.
The Company has prepared these financial statements to comply in all
material respect with the Accounting Standards notified under the
Companies (Accounting Standards) Rules, 2006, (as amended) and
the relevant provisions of the Companies Act, 1956.
 (i) The Company follows the mercantile system of accounting and
recognizes income and expenditure on an accrual basis except in
case of significant uncertainties.
(ii) Financial statements are based on historical cost except certain
fixed assets which are stated at fair value.
2. Use of estimates:-
The preparation of financial statements in conformity with Generally
Accepted Accounting Principles (GAAP) requires management to
make judgements, estimates and assumptions that affect the
application of accounting policies and reported amounts of assets,
liabilities, income and expenses and the disclosure of contingent
liabilities on the date of the financial statements. Actual results could
differ from those estimates. Estimates and underlying assumptions are
reviewed on an ongoing basis. Any revision to accounting estimates is
recognised prospectively in current and future periods.
3. Current–non-current classification:-
All assets and liabilities are classified into current and non-current.
Assets:-
An asset is classified as current when it satisfies any of the following
criteria:
a) it is expected to be realised in, or is intended for sale or
consumption in, the Company’s normal operating cycle;
b) it is held primarily for the purpose of being traded;
c) it is expected to be realised within 12 months after the reporting
date; or
d) it is cash or cash equivalent unless it is restricted from being
exchanged or used to settle a liability for at least 12 months after the
reporting date
Current assets include the current portion of non-current financial
assets. All other assets are classified as non-current.
Liabilities:-
A liability is classified as current when it satisfies any of the
following criteria:
a) it is expected to be settled in the Company’s normal operating
cycle
b) it is held primarily for the purpose of being traded;
c) it is due to be settled within 12 months after the reporting date; or
d) the Company does not have an unconditional right to defer
settlement of the liability for at least 12 months after the reporting
date. Terms of a liability that could, at the option of the
counterparty, result in its settlement by the issue of equity
instruments do not affect its classification.
Current liabilities include current portion of non-current financial
liabilities. All other liabilities are classified as non-current.
4. Operating cycle:-
All assets and liabilities have been classified as current or non-current
as per the Company’s normal operating cycle and other criteria set out
above which are in accordance with the revised Schedule VI to the
Act. Based on the nature of services and the time between the
acquisition of assets for providing of services and their realisation in
cash and cash equivalents, the Company has ascertained its operating
cycle as 12 months for the purpose of current – non-current
classification of assets and liabilities.
5. Revenue recognition:-
i) Revenue is recognised when the significant risk and rewards of
ownership of the goods have been passed to the buyers. Sale of
goods is exclusive of excise and sales tax/ VAT. Sales excludes
captive consumption.
ii) Sugar sold under levy quota for each season, is accounted at the
price as notified by the Government as available till such time,
pending final notification for each season. The difference in price
pending final notification is accounted on an estimation by the
management taking into account factors affecting the calculation of
levy sugar price.
 Iii) Export incentive in the nature of duty draw back or “Duty
Entitlement Pass Book” under “Duty Exemption Scheme” is
accounted for in the year of Export.
iv) Dividend income is recognized when the right to receive
payment is established.
v) Interest income is recognized on a time proportion basis taking
into account the amount outstanding and the interest rate applicable.
6. Fixed Assets and Depreciation-:
(a) Fixed Assets:-
(i) Fixed assets are carried at cost of acquisition or construction
cost and includes amount added on fair valuation, less
accumulated depreciation (except freehold land), amortisation and
impairment loss, if any.
(ii) Expenditure during construction period incurred on the
projects under implementation are treated as Pre- operative
Expenses pending allocation to the assets, and are included under
“Capital Work in Progress”. These expenses are apportioned to
fixed assets on commencement of commercial production. Capital
Work in Progress is stated at the amount incurred upto the date of
Balance Sheet.
(b) Depreciation-:
(i) Depreciation on fixed assets (including on revalued portion on
fair value) has been provided as under: -
(a) Plant & Machinery & Aircraft– On straight-line method
basis at the rates and in the manner specified in Schedule XIV
to the Companies Act, 1956.
(b) Other Tangible Assets–On written down value basis at the
rates and in the manner specified in Schedule XIV to the
Companies Act, 1956.
(c) Intangible Assets represented by computer software is being
amortised over a period of five years. Leasehold land is
amortised over the lease period.
(ii) Depreciation on assets added, sold or discarded during the
year has been provided on pro-rata basis.
 (iii) Individual assets costing ₹ 5,000 or less are depreciated in
full in the year of acquisition.
7. Investments:-
Long-term investments are stated at cost of acquisition. Diminution in
value of such long term investments is not provided for except where
determined to be of permanent nature. Current investments are stated
at lower of cost or fair market value.
8. Inventories:-
(i) Stock of Raw Materials is valued at cost or net realisable value
whichever is lower. Cost is arrived at on FIFO Basis.
(ii) Stock of Materials-in-Process and Finished goods is valued at
cost or net realisable value whichever is lower.
(iii ) Stores, Spares and Packing material are valued at cost. Cost is
arrived at on Weighted Average Basis.
(iv) Obsolete stores and spares when identified and technically
determined, are valued at estimated realisable value.
(v) By-products–Molasses and Bagasse has been valued at estimated
realisable value.
(vi) Trial run inventories are valued at cost or estimated realisable
value whichever is lower.
9. Research and Development:-
Revenue expenditure on Research and Development is expensed out
in the Statement of Profit and Loss for the year.
Capital expenditure on Research and Development is shown as an
addition to Fixed Assets.
10. Government Grants:-
Government grants / subsidies received towards specific fixed assets
have been deducted from the gross value of the concerned fixed assets
and grant / subsidies received during the year towards revenue
expenses have been reduced from respective expenses. Capital
Subsidies under Sugar Promotion Policy, 2004 is recognised to the
extent the claims are accepted and settled.
11. Foreign Currency Transactions:-
Foreign Currency transactions are recorded at the rates of exchange
prevailing on the date of transaction. Monetary foreign currency
assets and liabilities outstanding at the close of the financial year are
revalorised at the exchange rates prevailing on the balance sheet date.
Exchange differences arising on account of fluctuation in the rate of
exchange is recognised in the Statement of Profit and Loss. However,
in respect of long-term foreign currency monetary items, the
exchange difference relating to acquisition of capital assets, has been
adjusted to the capital assets.
In case of items which are covered by forward exchange contracts, the
difference between the year end rate and rate on the date of the
contract is recognised as exchange difference and the premium paid
on forward contract
is recognised over the life of the contract. In case of other financial
derivative contracts, premiums paid, gains/losses on settlement and
provision for losses, are recognised in the Statement of Profit and
Loss.
12. Employee Benefits:-
(a) Short Term Employee Benefits
(i) Short term employee benefits are recognised as expenditure at
the undiscounted value in the Statement of Profit and Loss of the
year in which the related service is rendered.
(b) Post Employment Benefits:
(i) Defined Contribution Plans:
Company’s contribution to the superannuation scheme, pension under
Employees’ Pensio Scheme, 1995 etc. are recognised during the year
in which the related service is rendered.
(II) Defined Benefit Plans:
 Gratuity:
Gratuity liability is covered under the Gratuity-cum-Insurance Policy
of Life Insurance Corporation of India (LIC). The present value of the
obligation is determined based on an actuarial valuation, using the
Projected Unit Credit Method. Actuarial gains and losses arising on
such valuation are recognized immediately in the Statement of Profit
and Loss. The amount funded by the Trust administered by the
Company under the aforesaid Policy, is reduced from the gross
obligation under the defined benefit plan, to recognise the obligation
on a net basis.
 Provident Fund:

Monthly contributions are made to a Trust administered by the

Company. The interest rate payable by the Trust to the beneficiaries is
notified by the Government. The Company has an obligation to make
good the shortfall, if any, between the return on the investments of the
Trust and the notified interest rate.
(C) Long term compensated absences are provided on the basis of
actuarial valuation.
(d) Compensation to employees under Voluntary Retirement
Scheme is charged to Statement of Profit and Loss in the year of
accrual.
13. Borrowing Cost:-
Borrowing cost attributable to acquisition and construction of assets
are capitalised as part of the cost of such assets upto the date when
such assets are ready for intended use and other borrowing costs are
charged to Statement of Profit and Loss.
14. Operating Leases:-
Assets acquired under leases other than finance leases are classified as
operating leases. The total lease rentals (including scheduled rental
increases) in respect of an asset taken on operating lease are charged
to the Statement of Profit and Loss on a straight line basis over the
lease term unless another systematic basis is more representative of
the time pattern of the benefit. Initial direct costs incurred specifically
for an operating lease are deferred and charged to the Statement of
Profit and Loss over the lease term.
Assets given by the Company under operating lease are included in
fixed assets. Lease income from operating leases is recognised in the
Statement of Profit and Loss on a straight line basis over the lease
term unless another systematic basis is more representative of the
time pattern in which benefit derived from the leased asset is
diminished. Costs, including depreciation, incurred in earning the
lease income are recognised as expenses. Initial direct costs incurred
specifically for an operating lease are deferred and recognised in the
Statement of Profit and Loss over the lease term in proportion to the
recognition of lease income.
15. Earnings per share (EPS):-
Basic EPS is calculated by dividing the net profit or loss for the year
attributable to equity shareholders by the weighted average number of
equity shares outstanding during the year. Diluted EPS is computed
using the weighted average number of equity and dilutive equity
equivalent shares outstanding during the year.
16. Provision for Current and Deferred Tax:-
(i) Provision for current tax is made with reference to taxable
income computed for the accounting period for which the financial
statements are prepared by applying the tax rates relevant to the
respective ‘Previous Year’. Minimum Alternate Tax (MAT) eligible
for set-off in subsequent years (as per tax laws), is recognised as an
asset by way of credit to the Statement of Profit and Loss only if
there is convincing evidence of its realisation. At each Balance
Sheet date, the carrying amount of MAT Credit Entitlement
receivable is reviewed to reassure realization
(ii ) Deferred tax resulting from ‘timing difference’ between book
and taxable profit for the year is accounted for using the current tax
rates. The deferred tax asset is recognised and carried forward only
to the extent that there is a reasonable certainty that the assets will
be adjusted in future. However, in case of deferred tax assets
(representing unabsorbed depreciation or carry forward losses) are
recognised, if and only if there is a virtual certainty that there would
be adequate future taxable income against which such deferred tax
assets can be realised, or to the extent of deferred tax liabilities.
17. Impairment of Assets:-
The carrying amount of assets are reviewed at each Balance Sheet
date if there is any indication of impairment based on internal/
external factors. An asset is impaired when the carrying amount of the
asset exceeds the recoverable amount. An impairment loss is charged
to the Statement of Profit and Loss in the year in which an asset is
identified as impaired. An impairment loss recognised in prior
accounting periods is reversed if there has been change in the estimate
of the recoverable amount.
18. Provisions, Contingent Liabilities and Contingent Assets:-
Provisions involving a substantial degree of estimation in
measurement are recognised when there is a present obligation as a
result of past events and it is probable that there will be an outflow of
resources. Contingent Liabilities are not recognised but are disclosed
in the Financial Statements. Contingent Assets are neither recognised
nor disclosed in the Financial Statements.
19. Employee Stock Options and Shares Plan (ESOP):-
In accordance with SEBI guidelines, the excess of the market price of
the shares, at the date of grant of options under the ESOP, over the
exercise price, is treated as Employee Compensation Expense.

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TYPES OF ACCOUNTING POLICIES

Accounting policies are the backbone of a company's financial

accounting and reporting processes. Senior corporate leaders ensure
these policies conform to industry standards, including U.S. generally
accepted accounting principles, or GAAP, and international financial
reporting standards, or IFRS. Corporate accountants also abide by
Securities and Exchange Commission (SEC) rules when preparing
financial reports.

Revenue and Expense Recognition

A company records, or recognizes, revenue and expense items at

market values, in accordance with U.S. GAAP and IFRS. Revenue is
income that a company generates by selling goods and providing
services. Revenue items include sales, interest income, short-term
profits and long-term gains on investments. An expense is a cost or
loss that a firm incurs when selling goods or providing services.
Examples of expense items include salaries, utilities and cost of goods
sold. A corporate accountant debits an expense account to increase its
amount and credits it to reduce the account balance. The opposite is
true for a revenue account. A firm lists revenue and expense accounts
in its statement of profit and loss (P&L) at the end of a period, such as
a month or quarter.

Asset and Liability Recording

Accounting rules and regulatory guidelines require a corporation to

record assets and liabilities at fair market amounts. An asset is an
economic resource that a company owns, and it can be a short-term or
long-term resource. A short-term, or current, asset is a resource that a
firm can convert into cash within 12 months. Examples of short-term
assets are cash, inventories and accounts receivable. A long-term
fixed asset is a resource that a company can use for more than a year.
Fixed assets may be land, property, a plant, equipment and machines.
A liability is a debt that an organization must repay at a given point in
time or over specified installments. A borrower must repay a short-
term loan within a year and a long-term debt after a year or more. A
bookkeeper debits an asset account to increase its amount and credits
it to reduce the account balance. The opposite is true for a liability
account. A company lists asset and liability accounts in the balance
sheet.

Your Foundation’s Trustees are pleased to present the Annual Report

of the 17th year of the Foundation along with audited accounts under
Indian GAAP and IFRS for the financial year that ended on 31 March
2017.

Financial performance
List Of Kitchens

The heart and soul of Akshaya Patra lies in our kitchens. Preparing
over 1.7 million meals a day requires highly mechanised and scalable
infrastructure.
Based on the need, terrain and accessibility of the location, Akshaya
Patra determines the model of the kitchen. Out of 38 kitchens across
India, 36 kitchens follow the centralised model, while two locations
operate on a decentralised model.
State/ Location Year Started Type of Kitchen
Andhra Pradesh
Visakhapatnam October 2008 Centralised Kitchen
December
Kakinada 2015 Centralised Kitchen
Vijayawada 2015 Centralised Kitchen
Nellore 2017 Centralised Kitchen
Assam
February
Guwahati 2010 Centralised Kitchen (ISO 22000:2005)
Chhattisgarh
Bhilai January 2009 Centralised Kitchen (ISO 22000:2005)
Gujarat
Ahmedabad August 2014 Centralised Kitchen (ISO 22000:2005)
Bhavnagar June 2017 Centralised Kitchen
Surat June 2012 Centralised Kitchen (ISO 22000:2005)
November
Vadodara 2009 Centralised Kitchen (ISO 22000:2005)
Kalol Centralised Kitchen
Karnataka
Bengaluru- HK Hill June 2000 Centralised Kitchen (ISO 22000:2005)
Bengaluru-
Vasanthapura July 2006 Centralised Kitchen (ISO 22000:2005)
Centralised Kitchen (ISO 22000:2005, ISO
Ballari July 2004 14001, OHSAS 18001)
State/ Location Year Started Type of Kitchen
December Centralised Kitchen (ISO 22000:2005, ISO
Hubballi 2004 14001, OHSAS 18001)
Mangaluru August 2004 Centralised Kitchen
Mysuru July 2007 Centralised Kitchen
November
Jigani 2017 Centralised Kitchen
Odisha
Cuttack July 2014 Centralised Kitchen
Nayagarh March 2007 Decentralised Kitchen
Puri June 2006 Centralised Kitchen
November
Rourkela 2013 Centralised Kitchen (ISO 22000:2005)
Rajasthan
Baran April 2005 Decentralised Kitchen
February
Jaipur 2004 Centralised Kitchen (ISO 22000:2005)
Jodhpur August 2013 Centralised Kitchen
Nathdwara June 2006 Centralised Kitchen (ISO 22000:2005)
Ajmer August 2016 Centralised Kitchen (ISO 22000:2005)
Bhilwara April 2018 Centralised Kitchen
Jhalawar May 2018 Centralised Kitchen
Maharashtra
Nagpur Centralised Kitchen
Thane August 2017 Centralised Kitchen
State/ Location Year Started Type of Kitchen
Tamil Nadu
Chennai July 2011 Centralised Kitchen
Telangana
Hyderabad October 2008 Centralised Kitchen
Narsingi August 2017 Centralised Kitchen
Kothagudem Centralised Kitchen
Tripura
Kashirampara April 2017 Centralised Kitchen
Uttar Pradesh
Lucknow March 2015 Centralised Kitchen (ISO 22000:2005)
Vrindavan August 2004 Centralised Kitchen (ISO 22000:2005)

Donor’s Privacy Policy,Term's and Conditions

The Akshaya Patra Foundation takes your privacy seriously and treats
all financial information about any transaction you have with the
Foundation as highly confidential. In addition, Akshaya Patra does
not share e-mail addresses or phone numbers of any of our donors or
constituents
The Foundation deeply values all contributions to sustain our mission.
To protect the privacy of our donors and their special relationship
with Akshaya Patra, we maintain the following policies:
 We may request personal information online, such as name,
address, phone number, email address, and credit card number
ONLY for the purposes of accepting donations to The
Akshaya Patra Foundation.
  We will not release or use this information for any other purpose
unless we have your consent.
 We do not trade or sell your personal information with other
organisations.
 We offer donors the option to be recognised anonymously.
 Donors may request, at any time, to not receive our solicitations.
 Donors may request to not receive certain mailings, such as our
newsletter.

Donation refund policy

Akshaya Patra follows a reliable refund policy to let our donors feel
privileged about their association with us. We take utmost care about
processing donations as per the mandates signed by our donors in the
donor forms, both offline and online. But in case of an unlikely event
of an erroneous deduction or If the Donor wants to cancel/deduct the
donation, The Akshaya Patra Foundation will respond within 7
working days from the date of receiving the complaint from donor.
The timely refund of the wrongly deduced amount will depend on
type of card used during transaction. We would require a proof of
deduction of the donation amount and a written communication for
refund from the donor within two days after donation.
 In such cases if the receipt already has been issued, then the
Donor need to return the original receipt at our official
address.
 In the case of tax exemption certificate already issued, refund
will not be possible.
We can be contacted for refund request through the following:
*International donations will require more working days for refund

Generally Accepted Accounting Principles – GAAP

 What are 'Generally Accepted Accounting Principles - GAAP'
Generally accepted accounting principles (GAAP) refer to a common
set of accounting principles, standards and procedures that companies
must follow when they compile their financial statements. GAAP is a
combination of authoritative standards (set by policy boards) and the
commonly accepted ways of recording and reporting accounting
information. GAAP improves the clarity of the communication of
financial information.

What is GAAP?
GAAP is short for Generally Accepted Accounting Principles.
GAAP is a cluster of accounting standards and common industry
usage that have been developed over many years. It is used by
organizations to:

 Properly organize their financial information into accounting

records;
 Summarize the accounting records into financial statements; and
 Disclose certain supporting information.

One of the reasons for using GAAP is so that anyone reading the
financial statements of multiple companies has a reasonable basis
for comparison, since all companies using GAAP have created their
financial statements using the same set of rules. GAAP covers a
broad array of topics, including:

 Financial statement presentation

 Assets
 Liabilities
 Equity
 Revenue
 Expenses
 Business combinations
 Derivatives and hedging
 Fair value
 Foreign currency
 Leases
 Nonmonetary transactions
 Subsequent events
 Industry-specific accounting, such as airlines, extractive activities,
and health care

The industry-specific accounting that is allowed or required under

GAAP may vary substantially from the more generic standards for
certain accounting transactions.

GAAP is derived from the pronouncements of a series of

government-sponsored accounting entities, of which the Financial
Accounting Standards Board (FASB) is the latest. The Securities
and Exchange Commission also issues accounting pronouncements
through its Accounting Staff Bulletins and other announcements
that are applicable only to publicly-held companies, and which are
considered to be part of GAAP. GAAP is codified into the
Accounting Standards Codification (ASC), which is available
online and (more legibly) in printed form.

GAAP is used primarily by businesses reporting their financial

results in the United States. International Financial Reporting
Standards, orIFRS, is the accounting framework used in most other
countries. GAAP is much more rules-based than IFRS. IFRS
focuses more on general principles than GAAP, which makes the
IFRS body of work much smaller, cleaner, and easier to understand
than GAAP. Since IFRS is still being constructed, GAAP is
considered to be the more comprehensive accounting framework.

There are several working groups that are gradually reducing the
differences between the GAAP and IFRS accounting frameworks,
so eventually there should be minor differences in the reported
results of a business if it switches between the two frameworks.
There is a stated intent to eventually merge GAAP into IFRS, but
this has not yet occurred. Given recent differences of opinion
arising during several joint projects, it is possible that the
frameworks will never be merged.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial

statements based on our audit. Weconducted our audit in
accordance with auditing standards generally accepted in the
United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement. An audit
involves performing procedures to obtain audit evidence about the
amounts and disclosures in

the financial statements. The procedures selected depend on the

auditor’s judgment, including the

assessment of the risks of material misstatement of the financial

statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
entity’s

preparation and fair presentation of the financial statements in

order to design audit procedures that are

appropriate in the circumstances, but not for the purpose of

expressing an opinion on the effectiveness of

the entity’s internal control. Accordingly, we express no such

opinion. An audit also includes evaluating

the appropriateness of accounting policies used and the

reasonableness of significant accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for
our audit opinion.

Opinion

In our opinion, the financial statements referred to above present

fairly, in all material respects, the

financial position of The Akshaya Patra Foundation (USA) as of

December 31, 2015 and 2014, and the

changes in its net assets and its cash flows for the years then ended
in accordance with accounting

principles generally accepted in the United States of America.

Basis of Accounting and how to maintain Accounting Trail in an

NGO Financial Management Policy

An important section of the NGO financial management policy is the

‘basis of accounting’ and maintaining the ‘accounting trail.’ Under
here, you can define the basis on which the accounting will be started
and the methods applied for maintaining accounts, including day-to-
day transactions. Below is an example of this process, though this
may vary from country to country mostly determined by local laws:
“2. Accounting Policies & Procedures

2.1 Basis of Accounting

a) The organization shall prepare its accounts on the basis of historical
basis of accounting but assets shall be re-valued from their historic
cost to reflect current values as necessary

b) The organization shall apply accrual based accounting method.

Revenue and grants/donations shall be recorded in the accounting
period it is received and expenses recognized when incurred. Loan
and Grant revenue is recognized when received. Other revenues are
recognized in accordance with the accruals concept.

c) Grants and donations if any shall be recorded separately from

operational activities. They will be shown “below” the operating line
on the Income Statement, together with non-operating income and
expenses and taxes. When transferred to the Balance Sheet, they will
not be included in the Retained Earnings from operations, but in
Contributed Capital (or Donated Equity).

d) In-kind contributions must be recognized through journal

adjustments that are supported by appropriate and objective
documentation (e.g. agreements, formal letters or memos,
Memorandum of Understanding).

2.2 Maintaining Accounting Trail

Every transaction would need to be traced back and forth since the
account=books are maintained in a set pattern.

The trail is as follows:

Expense—–Cash memo——voucher——cash book——ledger——

trail balance——income and expenditure statement, balance sheet

Hand in hand with an accounting trail, we can trace what we can call
as a programmatic trail.
Program plan—–Activity to be performed—–Authorization from the
program head for the expense related to the activity—–Perform the
activity—-Maintain the relevant program records

The accounting trail is important as it helps to check/countercheck

expenditure incurred/ activities done and thus helps in maintaining a
transparent system.”