10-Q 1 kmwe63015form10q.htm FORM 10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended: June 30, 2015

  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission File Number: 333-192399

KM WEDDING EVENTS MANAGEMENT, INC.
(Exact name of registrant as specified in its charter)

Delaware 46-1290754
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)

 

 

11501 Dublin Blvd., Suite 200, Dublin, CA 94568
(Address of principal executive office and zip code)

(925) 891-8029
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one)

Large accelerated filer  ☐   Accelerated filer  ☐
Non-accelerated filer  ☐   Smaller reporting company
(Do not check if a smaller reporting company)      

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

The numbers of shares outstanding of the issuer’s class of common stock as of August 1, 2015 was 42,096,160 shares of common stock outstanding.

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KM WEDDING EVENTS MANAGEMENT, INC.

FORM 10-Q
For the Quarterly Period Ended June 30, 2015

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION  PAGE
   
ITEM 1. FINANCIAL STATEMENTS  5
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION  20
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  23
ITEM 4. CONTROLS AND PROCEDURES  23
   
PART II - OTHER INFORMATION  23
   
ITEM 1. LEGAL PROCEEDINGS  23
ITEM 1A. RISK FACTORS  23
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS  23
ITEM 3. DEFAULTS UPON SENIOR SECURITIES  24
ITEM 4. MINE SAFETY DISCLOSURES  24
ITEM 5. OTHER INFORMATION  24
ITEM 6. EXHIBITS  

 

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KM WEDDING EVENTS MANAGEMENT, INC.

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

 
CONTENTS PAGE
   
   
CONDENSED CONSOLIDATED BALANCE SHEETS 5
   
CONDENSED CONSOLIDATED STATEMENTS OF INCOME 6
   
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 7
   
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 8
   
 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS 9
   
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 10
   

 

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Caution Regarding Forward-Looking Statements

This quarterly report on Form 10-Q contains forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to the factors described in the section captioned “Risk Factors” in our Quarterly Report on Form 10-K for year ended March 31, 2015 filed with the Securities and Exchange Commission.

In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “would” and similar expressions intended to identify forward-looking statements. Forward-looking statements reflect our current views with respect to future events and are based on assumptions and are subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward-looking statements.

Also, forward-looking statements represent our estimates and assumptions only as of the date of this report. You should read this report completely and with the understanding that our actual future results may be materially different from what we expect.

Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future.

Use of Certain Defined Terms

Except where the context otherwise requires and for the purposes of this report only:

  “We,” “us” and “our” refer to KM Wedding Events Management, Inc. and, except where the context requires otherwise, KM India.

 

  “KM” refers to KM Wedding Events Management, Inc., a Delaware corporation.

 

  “KM India” refers to KM Wedding Events Management Private Limited, India, which is majority owned by KM.

 

  “Indian Rupee”, Rs, and “Rupee” refers to Indian Rupee, the legal currency of India.

 

  “U.S. dollar”, “$” and “US$” refer to the legal currency of the U.S.

 

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PART I -  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

KM Wedding Events Management, Inc.
Interim Condensed Consolidated balance sheet
(in US Dollars $ unless otherwise stated)
          As at     As at 
    Notes    June 30, 2015    March 31, 2015 
         (unaudited)    (audited) 
ASSETS               
Current assets:               
Cash and Cash equivalents   3    96,018    97,960 
Accounts receivable   4    545,072    551,575 
Other current assets   5    563,461    603,314 
Total current assets        1,204,551    1,252,849 
Non-current assets:               
Property, plant and equipment, net   6    117,376    124,073 
Intangible assets, net   7    19,786    22,465 
Goodwill   21    688,005    685,007 
Film costs   24    30,570    12,289 
Deferred tax assets, net        3,984    4,066 
Other non-current assets   8    95,045    97,903 
Total non-current assets        954,766    945,803 
Total assets        2,159,317    2,198,652 
LIABILITIES AND EQUITY               
Current liabilities:               
Accounts payable and accrued liabilities   9    227,957    190,087 
Statutory liabilities   10    270,007    247,731 
Short-term loans & current portion of long-term debt   11    214,659    217,843 
Unsecured loans from related parties, net of advances   20    104,592    85,933 
Other current liabilities   13    162,454    140,796 
Total current liabilities        979,669    882,390 
Non-current liabilities:               
Long-term debt   12    267,576    279,943 
Other non-current liabilities   14    20,693    20,412 
Total non-current liabilities        288,269    300,355 
                
                
Equity:               
Common stock par value $ 0.001               
(shares outstanding: 42,096,160               
as at June 30, 2015 and March 31, 2015)   15    42,096    42,096 
Additional paid-in capital        1,165,712    1,165,712 
Accumulated deficit        (325,977)   (228,981)
Equity attributable to equity holders of the company        881,831    978,827 
Non-controlling interest        9,548    37,080 
Total equity        891,379    1,015,907 
Total liabilities and equity        2,159,317    2,198,652 
                
The accompanying notes are an integral part to these interim condensed consolidated financial statements.

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KM Wedding Events Management, Inc.
Interim Condensed Consolidated Statement of Income
(in US Dollars $ unless otherwise stated)
          For the period ended    For the period ended 
    Notes    June 30, 2015    June 30, 2014 
          (unaudited)      (unaudited)  
                
Revenues+               
Matrimonial service income   16    154,571    271,804 
Wedding event management income        39,456    124,546 
Wedding infrastructure lease income        7,634    —   
Sale of rights        13,894    —   
Total        215,555    396,350 
Costs and expenses               
Matrimonial service expenses   17    85,841    88,963 
Wedding event management expenses        31,170    97,520 
Wedding infrastructure maintenance expenses        3,121    —   
Personnel costs        97,546    82,354 
General and administrative expenses   18    100,109    86,721 
Depreciation and amortisation        7,792    6,434 
Total        325,579    361,992 
Operating income/(loss)        (110,024)   34,358 
Other income / (expenses)               
Foreign exchange gain / (loss)        5,363    937 
Finance charges        (20,244)   (14,950)
Total other income / (expenses), net        (14,881)   (14,013)
Income/(loss) before income tax expense        (124,905)   20,345 
Income taxes        —      —   
Net income/(loss)        (124,905)   20,345 
Attributable to:               
Equity holders of the company        (97,216)   5,123 
Non-controlling interest        (27,689)   15,222 
Net income/(loss)        (124,905)   20,345 
Earnings/(loss) per share - basic and diluted   19    (0.0023)   0.0001 
                
The accompanying notes are an integral part to these interim condensed consolidated financial statements.

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KM Wedding Events Management, Inc.
Interim Condensed Consolidated Statement of Comprehensive Income
(in US Dollars $ unless otherwise stated)
     For the period ended    For the period ended 
    June 30, 2015    June 30, 2014 
    (unaudited)    (unaudited) 
           
Net income/(loss)   (124,905)   20,345 
Other comprehensive gain/(loss)          
Foreign currency translation gain/(loss)   377    (150)
Total other comprehensive gain/(loss)   377    (150)
Attributable to:          
Equity holders of the company   220    (83)
Non-controlling interest   157    (67)
Comprehensive income/(loss)   (124,528)   20,195 
           
The accompanying notes are an integral part to these interim condensed consolidated financial statements.

 

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KM Wedding Events Management, Inc.
Interim Condensed Consolidated Statement of Changes in Equity
(in US Dollars $ unless otherwise stated)
    Number of shares    Common stock    Additional  paid-in capital    Accumulated deficit    Equity attributable to equity holders of the company    Non - controlling interest    Total equity 
Balance as at March 31, 2014   41,646,160    41,646    1,031,162    (268,403)   804,405    (53,710)   750,695 
Net income / (loss) for the period [After adjusting Comprehensive Income/(Loss)]    Nil         Nil      Nill     5,040    5,040    15,155    20,195 
Balance as at June 30, 2014 (unaudited)   41,646,160    41,646    1,031,162    (263,363)   809,445    (38,555)   770,890 
                                   
Balance as at March 31, 2015   42,096,160    42,096    1,165,712    (228,981)   978,827    37,080    1,015,907 
Net income / (loss) for the period    Nil                  Nil                     Nil       (96,996)   (96,996)   (27,532)   (124,528)
[After adjusting Comprehensive Income/(Loss)]                                   
Balance as at June 30, 2015 (Unaudited)   42,096,160    42,096    1,165,712    (325,977)   881,831    9,548    891,379 
                                    
The accompanying notes are an integral part to these interim condensed consolidated financial statements.

 

-8-

KM Wedding Events Management, Inc.      
Interim Condensed Consolidated Statement of cash flow      
(in US Dollars $ unless otherwise stated)      
   For the period ended  For the period ended
   June 30, 2015  June 30, 2014
   (unaudited)  (unaudited)
Cash flows from operating activities          
Net income/(loss)   (124,905)   20,345 
Adjustments to reconcile net income/(loss) to net cash          
provided by operating activities          
Depreciation and amortisation   7,792    6,434 
Unrealized foreign exchange (gain) / loss   (5,318)   (937)
Bad debts   2,853    7,229 
Amortisation of film costs   9,320    8,507 
Changes in operating assets and liabilities          
(Increase) / Decrease in accounts receivable   1,504    880 
(Increase) / Decrease in other current assets   29,185    12,587 
(Increase) /Decrease in film costs   (27,914)   (17)
(Increase) / decrease in other non-current assets   890    (53)
Increase /(decrease) in accounts payable and accrued liabilities   52,379    25,647 
Increase / (decrease)  in statutory liabilities   27,358    47,474 
Increase / (Decrease) in other current liabilities   24,578    (120,720)
Increase / (Decrease) in other non-current liabilities   715    617 
Net cash provided by / (used in) operating activities   (1,563)   7,993 
Cash flows from investing activities          
Additions to property, plant and equipment   (1,342)   (7,942)
Net cash provided by / (used in) investing activities   (1,342)   (7,942)
Cash flows from financing activities          
Proceeds from / (repayment of) short term debts and   9,603    18,656 
unsecured loans from related parties, net          
Proceeds from / (repayment of) long term debts   (6,756)   (1,566)
Net cash provided by financing activities   2,847    17,090 
Effect of exchange rate changes on cash   1,884    (6,984)
Net increase/(decrease) in cash and cash equivalents   (1,942)   10,157 
Cash and cash equivalents at beginning of the Period   97,960    88,616 
Cash and cash equivalents at end of the Period   96,018    98,773 
           
           
Supplementary disclosures of cash flow information          
Cash paid during the year for:          
Interest paid   20,244    14,884 
Income taxes paid   1,198    1,155 
           
Non-cash items:          
Allotment of common stock   —      —   
           
The accompanying notes are an integral part to these interim condensed consolidated financial statements.

 

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KM Wedding Events Management, Inc.

Notes to Interim Condensed Consolidated financial statements

(in US Dollars $ unless otherwise stated)

 

1. General

KM Wedding Events Management, Inc ('the Company') was incorporated on October 24, 2012 in the state of Delaware, United States of America.

The Company is a leading service provider in the matrimonial industry and entered in to wedding event management and allied services segments including wedding catering services through its subsidiary (KM Wedding Events Management Private Limited formerly known as "KM Matrimony Private Limited", India) in Tamil Nadu, India. As at June 30, 2015, the Company maintains a 58.33% ownership interest in KM Wedding Events Management Private Limited, India. With the addition of wedding services, which focuses on the higher end of the value chain in the wedding industry, the Company is able to service the customers already using KM for the matrimonial service. The Company became one of the earliest entrants in the industry to provide an integrated wedding service in Tamil Nadu, India.

 

2. Significant accounting policies

a. Basis of consolidation

The company has invested $569,000 to acquire 2,841,398 equity shares of KM Wedding Events Management Private Limited, India. Subsequent to this investment, KM Wedding Events Management Private Limited, India has become subsidiary of this company. The agreement for such acquisition was entered in the month of February 2013 and executed in the month of April 2013.

 

b. Form and Content of the Financial Statements

The Company maintains its books and records in accordance with generally accepted accounting policies in USA (“US GAAP”). The accompanying financial statements were derived from the Company’s statutory books and records. The financial statements are presented in US Dollars ($), the national currency of USA.

Revenue and related expenses generated from our international subsidiary is generally denominated in the currency of Indian Rupee (`). The statements of income of our international subsidiary are translated into U.S. dollars at exchange rates indicative of market rates during each applicable period.

Subsequent events have been evaluated through August 12, 2015, the date these financial statements were issued.

The closing exchange rate as at June 30, 2015 and March 31, 2015 was Rs. 63.59 and Rs. 62.31 to 1 $ respectively. The average exchange rate for the period ended June 30, 2015 was Rs. 63.3686 to 1 $.

 

c. Management Estimates

The preparation of the financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as well as the amounts of revenues and expenses recognized during the period. Management believes it has a reasonable and appropriate basis for its judgment pertaining to its estimates and assumptions. However, actual results could differ from those estimates.

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KM Wedding Events Management, Inc

Notes to Interim Condensed Consolidated financial statements

(in US Dollars $ unless otherwise stated)

 

d. Comprehensive Loss

The company's other comprehensive loss consists of unrealized gains/(losses) on foreign currency translation adjustments.

 

e. Income taxes

The company follows the provisions of FASB ASC 740-270, Income Taxes (Interim Reporting), to arrive at the effective tax rate. The effective tax rate is the best estimate of the expected annual tax rate to be applied to the taxable income for the current reporting period. Deferred tax assets and liabilities are recognised at the normal tax rate of 32.445% (including surcharge at 5% and education cess @ 3%).

 

3. Cash and cash equivalents

Cash and cash equivalents at June 30, 2015 and March 31, 2015 comprises the following:
Particulars   As at As at
June 30, 2015
(Unaudited)
March 31, 2015
       
(a) Cash on hand                     87,701 89,219
(b) Balance with banks on current accounts                     8,317  8,741
Total                      96,018  97,960
         

 

  4. Accounts receivable

 

Accounts receivable at June 30, 2015 and March 31, 2015, respectively, comprises the following:

Particulars

 

As at As at
June 30, 2015
(Unaudited)
March 31, 2015
(a) Customers (trade)                   545,072                        551,575
Total                    545,072                       551,575

 

  5. Other current assets

 

Other current assets at June 30, 2015 and March 31, 2015, respectively, comprises the following:
  Particulars  As at  As at
  June 30, 2015
(Unaudited)
March 31, 2015
   
(a) Event advances                   212,101                        216,312
(b) Staff advances                     39,004                          39,802
(c) Loans and advances                   306,197                        333,562
(d) Prepaid expenses                     6,159                            13,638
Total                  563,461                       603,314

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KM Wedding Events Management, Inc.

Notes to Interim Condensed Consolidated financial statements

(in US Dollars $ unless otherwise stated)

  6. Property, plant and equipment, net

 

Property, plant and equipment at June 30, 2015 and March 31, 2015, respectively, comprises the following:
Particulars Gross
Carrying Value
Accumulated
Depreciation
Net
Carrying Value

June 30,

2015
(Unaudited)

March 31,

2015

June 30,

2015
(Unaudited)

March 31,

2015

June 30,

2014
(Unaudited)

March 31,

2015

(a) Vehicles        41,270 42,118 7,306 6,502 33,964 35,616
(b) Computers & Peripherals        72,316 73,802 67,345 68,367 4,971 5,435
(c) Furniture & Fixtures        13,948 14,234 6,650 6,432 7,298 7,802
(d) Office Equipment        59,941 61,173 33,305 32,533 26,637 28,640
(e) Leasehold improvements        78,994 80,616 43,372 42,254 35,621 38,362
(f) Plant & Machinery 10,445               9,295  1,560                      1,077 8,885           8,218
Total   276,914 281,238 159,538 157,165 117,376 124,073

Operating leases
The total amount of operating lease expensesis as follows:
Particulars For the Period ended For the Period ended
June 30, 2015
(Unaudited)
June 30, 2014
(Unaudited)
Lease Expenses  17,722 8,755
 

 

  7. Intangible assets, net

 

Intangible assets at June 30, 2015 and March 31, 2015 comprise the following:
Particulars Gross
Carrying Value
Accumulated
Amortization
Net
Carrying Value
   

June 30,

2015
(Unaudited)

March 31, 2015

June 30,

2015
(Unaudited)

March 31, 2015 June 30, 2015
(Unaudited)
March 31, 2015
(a) Software        52,578 53,658 32,792 31,193 19,786 22,465
Total        52,578 53,658 32,792 31,193 19,786 22,465
 

  8. Other non-current assets

 

Other non-current assets at June 30, 2015 and March 31, 2015, comprises of the following:
  Particulars As at As at
  June 30, 2015
(Unaudited)
March 31, 2015
   
(a) Rental advance                   21,289                        25,156
(b) Deposits                     62,453                          63,536
(c) Software under application development stage                   11,303                        9,211
Total                  95,045                       97,903

 

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KM Wedding Events Managment, Inc

Notes to Interim Condensed Consolidated financial statements

(in US Dollars $ unless otherwise stated) 

 

  9. Accounts payable and accrued liabilities

 

Accounts payable and accrued liabilities at June 30, 2015 and March 31, 2015 comprises of the following:      
Particulars As at As at
June 30, 2015
(Unaudited)
March 31, 2015
(a) Accounts payable 119,460 87,895
(b) Salary payable 29,825 24,094
(c) Current portion of provision for gratuity 1,771 1,701
(d) General and administrative expenses payable 76,901 76,397
Total 227,957 190,087

 

  10. Statutory liabilities

Income tax and other statutory liabilities at June 30, 2015 and March 31, 2015 comprises of the following:
  As at As at
Particulars June 30, 2015
(Unaudited)

March 31,

2015

(a) Service tax 179,134 156,573
(b) Provident fund 18,914 25,192
(c) Employees state insurance 6,976 6,291
(d) Professional tax 5,513 5,554
(e) Tax deducted at source 38,351 31,350
(f) Income tax ( net of advance tax) 21,119 22,771
Total   270,007 247,731
         

 

  11. Short-term loans & current portion of long-term debt

 

Short term loans and borrowings as a June 30, 2015 and March 31, 2015 comprise of the following:
Particulars   As at As at
  June 30, 2015
(Unaudited)

March 31,

2015

(a) Bank overdraft1 162,627 172,122
(b) Secured loan 192 196
(c) Unsecured loan 28,727 23,469
(d) Current portion of long-term debt 23,113 22,056
Total   214,659 217,843
         

1 The bank overdraft facility as at June 30, 2015 is secured by way of hypothecation of trade receivables, current assets and fixed assets of the company except vehicles financed by other banks / financial institutions.

 

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KM Wedding Events Management, Inc.

Notes to Interim Condensed Consolidated financial statements

(in US Dollars $ unless otherwise stated)

  12. Long-term debt

 

Long-term debt as at June 30, 2015 and March 31, 2015 comprises of the following:
  As at As at
Particulars June 30, 2015
(Unaudited)

March 31,

2015

(a) Secured loans1 269,708 279,161
(b) Vehicle loans2 20,981 22,838
290,689 301,999
(d) Current portion of long-term debt (23,113) (22,056)
Total   267,576 279,943
         

 

1 During the last quarter ended March 31, 2015, the company, its directors and relatives of directors have availed a term loan on a joint and several liability basis from ICICI Bank for an amount of $ 715,521.31. The company’s liability has been initially recognized in the financial statements at $ 275,989. under secured loans. The personal property of the directors has been provided as security for availing the said loan. The loan is repayable in 120 equated monthly instalments and carries interest at the base rate plus a margin of 1.75%. The loan arrangement has been approved by the Board of Directors, vide Board resolution dated January 12, 2015 and a Memorandum of Understanding has been entered into between the company and its co-obligors. The total outstanding amount as at June 30, 2015 & March 31, 2015 towards this debt arrangement is $ 699,236 & $ 723,745.89. The carrying amount of the company’s liability as at June 30, 2015 & March 31, 2015 is $ 269,708 & $ 279,161.38.

 
2 The interest rates of these vehicle loans range from 11 % to 16 %. These loans are repayable in monthly instalments ranging from 36 months to 60 months. These loans are secured against the respective assets.  
 

 

The scheduled aggregate maturity of long-term debt outstanding at June 30, 2015 is as follows:

Particulars 

Aa at June 30,

2015
(Unaudited)

2016 17,079
2017            25,256
2018 26,161
2019 27,720
2020 26,113
Thereafter 168,360
Total long term debt 290,689

 

  13. Other current liabilities

 

Other current liabilities at June 30, 2015 and March 31, 2015 comprise of the following:
Particulars As at As at
June 30, 2015
(Unaudited)

March 31,

2015

           
(a) Unearned revenues (i.e. billings in excess of revenue)     108,357   95,538
(b) Advances received     54,097 45,258
Total       162,454 140,796
         

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KM Wedding Events Management, Inc.

Notes to Interim Condensed Consolidated financial statements

(in US Dollars $ unless otherwise stated)

  14. Other non-current liabilities

 

Other non-current liabilities at June 30, 2015 and March 31, 2015 comprise of the following:
Particulars As at As at

June 30,

2015
(Unaudited)

March 31,

2015

(a) Trade Deposits 5,788    5,856
(b) Provision for gratuity 14,955   14,556
Total 20,693 20,412

15. Common Stock

The company has only one class of equity shares having par value of $ 0.001 per share. Each holder of equity shares is entitled to one vote per share. The authorised Equity share capital (number of shares) of the company is 300,000,000 shares as at June 30, 2015 & March 31, 2015. The issued, subscribed and paid-up equity share capital (number of shares) of the company is 42,096,160 shares as at June 30, 2015 & March 31, 2015.


The shares issued are as follows:

 

(i) 33,000,000 number of shares at par value of $ 0.001 per share are issued for consideration other than cash.

 

(ii) 4,596,160 number of shares are issued at a price of $ 0.05 per share

 

(iii) 4,050,000 number of shares are issued at a price of $ 0.20 per share


 

(iv) 200,000 number of shares are issued at a price of $ 0.30 per share


 

(v) 250,000 number of shares are issued at a price of $ 0.30 per share for consideration other than cash

The shares are issued at a price mutually agreed by the shareholders pursuant to an agreement entered with them.

 

The Shareholders who have subscribed 4,050,000 numbers of shares at the rate of $0.20 per share have an option to purchase a warrant for every two shares held which entitles the holder to purchase an additional share at the rate of $0.40 per share for the period of two years from the date of issuance.

 

Preferred Stock

The authorised Preference share capital (number of shares) of the company is 10,000,000 shares having a par value of $ 0.001 per share as at June 30, 2015. The issued, subscribed and paid-up Preference share capital is Nil as at June 30, 2015.

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KM Wedding Events Management, Inc

Notes to Interim Condensed Consolidated financial statements

(in US Dollars $ unless otherwise stated)

  16. Matrimonial service income

 

  Particulars For the three months ended June 30
  2015 2014
    (Unaudited)
  (a) Profile Registration and Event Incomes 127,901 217,046
  (b) Sponsorship Income and advertisement Income 5,129 29,829
  (c) Sale of space or time slot - Television series 21,541 22,827
  (f) Sale of products (magazines) - 2,102
    Total 154,571 271,804

 

  17. Matrimonial service expenses

 

  Particulars For the three months ended June 30,
  2015 2014
    (Unaudited)
         
  (a) Event expenses 41,525 28,232
  (b) Production and telecast expenses - Television series 21,051 27,709
  (c) Publication expenses 9,909 19,663
  (d) ARC commission 4,036 4,852
  (e) Amortization of film cost 9,320 8,507
    Total 85,841 88,963

 

  18. General and administrative expenses

 

Particulars For the three months ended June 30,
2015 2014
  (Unaudited)
       
(a) Lease expenses 18,019 9,052
(b) Repairs & Maintenance 3,899 6,614
(c) Insurance  179 523
(d) Electricity charges 3,198 3,059
(e) Audit fees 2,170 2,299
(f) Filing Charges 300 9,328
(g) Bank charges 3,156 2,706
(h) Bad debts 2,853 7,229
(j) Travelling and conveyance 706 9,552
(k) Professional charges 17,500 9,994
(l) Printing & Stationery 1,141 1,387
(m) Telephone, Courier & Postage 4,468 6,616
(n) Security charges 1,030 1,104
(o) Business promotion expenses 38,828 15,139
(r) Others 2,662 2,119
  Total 100,109 86,721

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KM Wedding Events Management, Inc

Notes to Interim Condensed Consolidated financial statements

(in US Dollars $ unless otherwise stated)

  19. Earnings / (loss) per share (EPS)

 

Particulars For the three months ended June 30,
2015 2014
  (Unaudited)
       
(a) Net income / (loss) (97,216) 5,123
(b) Weighted average number of equity shares outstanding shares 42,096,160 41,646,160
Earnings / (loss) per share - basic and diluted (0.0023)  0.0001

 

  20. Related party disclosures

 

(a) Names of related party and relationship

(i) Key Management Personnel (“KMP”)

(a) Mr. T V Mohan - Chairman and Director

(b) Ms. Meera Nagarajan - President, CEO and Managing Director

(c) Mr. Vijaya Bhaskar Venkatesan- CFO, Director, Treasurer and Director of Technologies 

 

(ii) Relatives of KMP

(a) Mr. Sridhar Kalyanasundaram

 

(b) Transactions with related parties

 

Transactions during the year ending June 30:

Particulars KMP and Relative of KMP
2015
(unaudited)
2014
(unaudited)
Transactions
Advances given for business purposes 21,412 104,550
Settlement of advances given for business purposes 41,872 53,993
Repayment of unsecured loans - 2,893
Closing balances
Advances given for business purposes (debit balance) 134,801 121,188
Unsecured loans received (credit balance) 5 239,393 288,789

5 Unsecured loans from related parties are repayable on demand.

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KM Wedding Events Management, Inc

Notes to Interim Condensed Consolidated financial statements

(in US Dollars $ unless otherwise stated)

 

  21. Goodwill

 

Particulars
Goodwill1   679,948
Add: Adjustment in additional acquisition and translation reserves  8,057
Balance as of June 30, 2015 688,005

 

1Goodwill arises in the process of acquiring KM Wedding Events Management Private Limited, India. In April 2013, the Company acquired 55.32% interest of KM Wedding Events Management Private Limited, India (formerly known as "KM Matrimony Private Limited", India). As of June 30, 2015, 58.33% of the shares of KM Wedding Events Management Private Limited are being held by the Company. This acquisition has been accounted as a business combination.

Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a business combination. It is assigned to reporting units as of the acquisition date. As per ASC 805-20-55-6, the value of an acquired intangible asset which are not identifiable as of the acquisition date is subsumed into Goodwill. The assets and liabilities are acquired at book value as there is no significant deviation from fair value. There are no related contingent consideration arised.

 

Impairment of Goodwill will be tested on annual basis at the end of the year.

 

  22. Employee benefits

Defined Benefit Plan

The liability recognized in the balance sheets as of June 30 is as follows. The obligations are unfunded as on the dates of balance sheets.

      As at
  Particulars   

June 30,

2015
(unaudited)

March 31,

2015

(a) Gratuity liability recognized in the balance sheet    16,726 16,257
Weighted average assumptions used to determine net gratuity cost and benefit obligations:
      For the three months ended June 30,
 

Particulars

 

  2015
(Unaudited)
2014
(Unaudited)
(a) Discount rate   7.80% p.a. 8.50% p.a.
(b) Long-term rate of compensation increase   7.50% p.a. 10.00% p.a.
(c) Rate of return on plan assets    N.A. N.A.
         

 

  23. Going concern

The financial statements have been prepared on the basis that the Company is a going concern and, therefore, no adjustments are required to be made to the carrying amount of assets and liabilities.

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KM Wedding Events Management, Inc

Notes to Interim Condensed Consolidated financial statements

(in US Dollars $ unless otherwise stated)

  24. Film costs

The amount of unamortised film costs disclosed in the balance sheet pertains to completed and not released films with respect to the television series. The entire amount of unamortised film costs is expected to be amortised during the next one year.

 

  25. Commitments and contingencies

Service tax and other statutory dues

Penalties, if any, on account of delay in payment of service tax and other statutory dues are unascertainable.

 

  27. Previous period figures

Figures of previous periods have been regrouped / rearranged, wherever required to confirm to the current period presentation.

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  ITEM 2.            MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

THE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ TOGETHER WITH THE CONSOLIDATED FINANCIAL STATEMENTS OF KM WEDDING EVENTS MANAGEMENT, INC. AND THE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Overview of Our Business

We have been involved in the wedding services industry in South India since 2004. “KM” is our brand, which is a short form for ‘KalyanaMalai’ meaning ‘Wedding Garland’ in South Indian language. Our services include Matrimonial (Matchmaking) Services (“Matrimonial Services”) and Wedding Services.

Matrimonial Services include matchmaking and partner identification, through multiple delivery channels via print and visual media, website, physical centers and events. Our Matrimonial Services covers 15 different services, including food and beverages, guest services, decorations, event planning and event management. In order to increase the Wedding Services business, we started leasing wedding halls (physical infrastructures where a wedding is conducted, similar to banquet halls of hotels). The first wedding hall has already commenced operations.

In India, we currently focus on the geographic locations of Tamil Nadu and Andhra Pradesh (two of the Southern States in India). We believe that we are well positioned to utilize the potential of the Wedding Services market because of our early presence in this market since 2004. We have conducted promotional events across the U.S.to capture the market potential. We are continuing our efforts to expand our presence in the US. Our target customers include the Indian high-income group, higher middle-income group, and other affluent individuals both in the U.S. and India. This segment, being upwardly mobile and comfort and service focused, is the right target group for our business strategy.

We, through our subsidiary KM India, have been servicing the Indian Diaspora in the U.S. through our website since 2004 which was followed up by Community Meets (events focused on bringing together individuals who are seeking a life partner and who share similar backgrounds (e.g., profession, socio-economic background, religion, etc.) conducted during the fiscal year 2011 in 5 cities (New York City, South Windsor (Connecticut), Boston, Houston and San Antonio) which was attended by approximately 1,200 prospective matrimonial customers. In October 2013, we also filmed for SUN TV across 6 different US cities (New York, South Windsor Connecticut), New Brunswick, San Jose, Dallas and Houston), which was attended by over 5,400 South Indian community members.

Based on the experience gained from the above activities, we believe that there is a demand and need in the Indian Diaspora in the U.S. for our Matrimonial and Wedding Services. We believe a customized and focused approach is required to market to this segment. The current plan for exploring this business opportunity includes setting up offices in the U.S. (fiscal 2015), growing Wedding Services for weddings to be conducted in India by Indians in the U.S. launching a customized website for Matrimonial Services in the U.S. market (fiscal 2015) and providing Wedding Services for conducting weddings locally in the U.S. (fiscal 2016-17).

Comparison of Three Months Ended June 30, 2015 and Three Months Ended June 30, 2014

Results of Operations

Our financial performance for the three months ended June 30, 2015 compared to the three months ended June 30, 2014 are discussed and analyzed below. For the purpose of comparison, conversion of Indian Rupees to USD is done based on the average exchange rate for the period for Income and Expenditure items and at the closing exchange rate for Balance Sheet items. The financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

-20-
 

For the three months ended June 30, 2015, the Company generated revenue of $215,555 compared to $396,350 for the corresponding period in the previous year.

In terms of revenue mix 72% of the revenues were generated from Matrimonial Services (69% for the corresponding three month period in the previous year); 22% from the Wedding Services (31% for the corresponding three month period in the previous year) and 6% of the revenues were generated from sale of rights (Nil for the corresponding three month period in the previous year).

During the three month period ended June 30, 2015, the Company incurred $325,579 of operating expenses compared to $361,992 for the corresponding three month period in the previous year, which included:

●      Matrimonial Service expenses of $85,841 compared to $88,963 for the corresponding three month period in the previous year, which represents 56% of matrimonial revenues.

●      Wedding Service expense of $34,291 ($97,520 for the corresponding three month period in the previous year) which represents 73% of wedding services revenues compared to 78 % for the corresponding three month period in the previous year.

●      General and Administrative expense of $100,109 ($86,721 for the corresponding three month period in the previous year) which represents 46% of revenues compared to 22% for the corresponding three month period in the previous year. The increase in expenses is primarily owing to investment in the US markets.

●      Personnel expenses of $97,546 ($ 82,354 for the corresponding three month period in the previous year) representing 45% of revenues compared to 21% of revenues in the corresponding three month period in the previous year; and

●      Depreciation and Amortization expenses of $7,792 ($6,434 for the corresponding three month period in the previous year).

 

For the three months ended June 30, 2015, the Company had operating loss of $110,024 compared to income of $34,358 for the corresponding period in the previous year. In addition, for the three month ended June 30, 2015, the Company had a net loss of $124,905 compared to income of $20,345 for the corresponding three month period in the previous year).

Liquidity and Capital Resources

Overview

At June 30, 2015, the Company had cash equivalents of $96,018 and accumulated deficit of $325,977. At June 30, 2015, the Company had a positive working capital (including current portion of long-term debt) of $224,882 compared to positive working capital of $370,459 at March 31, 2015, resulting from:

Accounts Receivable of $545,072 at June 30, 2015 compared to $551,575 at March 31, 2015, which represents a 1% decrease;

Account Payable and accrued liabilities relating to accrued interest expense, unpaid professional fees, and unpaid general expenditures of $227,957 at June 30, 2015 compared to $190,087 at March 31, 2015, representing 20% increase;

Statutory liabilities of $270,007 at June 30, 2015 compared to $247,731 at March 31, 2015, representing 9% increase;

 

Short-term loans and current portion in long-term debt of $214,659 at June 30, 2015 compared to $217,843 at March 31, 2015, representing a decrease of 1%;

 

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Unsecured loans of $104,592 at June 30, 2015 compared to $85,933 at March 31, 2015, representing a 22% increase;

 

Other current liabilities of $162,454 at June 30, 2015 compared to $140,796 at March 31, 2015, representing a 15% increase; and

 

Non-current liabilities of $288,269 at June 30, 2015 compared to $300,355 at March 31, 2015, representing a reduction of 4%.

 

Cash flows from Operating Activities

During the three month period ended June 30, 2015, net cash used in operating activities was $1,563 compared to net cash provided by operations $ 7,993 during the corresponding period in the previous year.

Cash flows from Investing Activities

During the three month period ended June 30, 2015, net cash used in investing activities was $1,342 compared to $7,942 cash used for the corresponding period in the previous year.

Cash flows from Financing Activities

During the three month period ended June 30, 2015, net cash provided by financing activities was $2,847 compared to $17,090 provided by financing activities for the corresponding period in the previous year.

Future Capital Needs

At June 30, 2015, our working capital surplus was $224,882. We had $96,018 in cash and cash equivalents. We have evaluated our expected cash requirements over the next twelve months, and have determined that our existing cash resources are not sufficient to meet our anticipated needs during the next twelve months, and that additional financing is required to support current operations. In addition, we anticipate that further additional financing may be required to fund our business plan subsequent to that date, until such time as revenues and related cash flows become sufficient to support our operating costs.

The successful implementation of our business plan is dependent upon us receiving sufficient funds from the sale of securities and/or additional funding from management, the issuance of equity or debt, or through obtaining a credit facility. In additional, substantial expenditures will be required to enable us to expand and scale up our operations and quality of services. We will require additional financing from issuance of equity or debt, or through obtaining a credit facility, to execute our plan of operations. Our established bank-financing arrangements will not be adequate. Although management believes that the additional required funding will be obtained through the sale of securities, there is no guarantee we will be able to obtain the additional required funds in the future or that funds will be available on terms acceptable to us, if at all. If such funds are not available, management will be required to curtail its investments in additional sales and marketing and product development resources, and capital expenditures, which may have a material adverse effect on our future cash flows and results of operations, and its ability to continue operating as a going concern.

Brief Disclosure of Long Term Contractual Obligations

As at June 30, 2015, the Company has long term debts in the form of secured loans amounting to $290,689 and repayable as under:

Less Than One Year $17,079
One to Three Years $79,137
More than Three Years $194,473

 

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Recent Accounting Pronouncements

As of June 30, 2015, there are no other recently issued accounting standards not yet adopted that would have a material effect on the Company’s consolidated financial statements.

Off-Balance Sheet Arrangements

We do not have any off-balance arrangements.

ITEM 3.            QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required.

ITEM 4.            CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The SEC defines the term “disclosure controls and procedures” to mean a company’s controls and other procedures that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the SEC’s rules and forms. “Disclosure controls and procedures” include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our disclosure controls and procedures are designed to provide reasonable assurance that such information is accumulated and communicated to our management. Our management (with the participation of our Chief Executive Officer and Chief Financial Officer) has conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act). Based on such evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of the end of the period covered by this report.

Changes in Internal Controls over Financial Reporting

During the quarter ended June 30, 2015, there were no material changes in our internal control over financial reporting identified in connection with the evaluation performed during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II -                    OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we have disputes that arise in the ordinary course of business. Currently, there are no material legal proceedings to which we are a party, or to which any of our property is subject.

ITEM 1A.                    RISK FACTORS

Not applicable.

ITEM 2.                        UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On January 6, 2015, as consideration for consulting services provided by a consultant, the Company issued 25,000 shares of our Common Stock which had a fair market value of $7,500. The shares were issued pursuant to

-23-
 

Section 4(2) of the Securities Act, as they were transactions by an issuer not involving a public offering, no underwriters were used and no commissions were paid.

ITEM 3.                        DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4.                        MINE SAFETY DISCLOSURES

Not applicable

ITEM 5.                        OTHER INFORMATION

None

ITEM 6.                        EXHIBITS

The following exhibits are filed as part of this Report

Exhibit No.

Description

 

31.1 Certification of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2 Certification of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *
32.1 Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *
32.2

Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

 

101.INS   XBRL Instance Document*
101.SCH   XBRL Taxonomy Extension Schema*
101.CAL   XBRL Taxonomy Extension Calculation Linkbase*
101.DEF   XBRL Taxonomy Extension Definition Linkbase*
101.LAB   XBRL Taxonomy Extension Label Linkbase*
101.FRE   XBRL Taxonomy Extension Presentation Linkbase*

__________________________________

  * Filed herewith.

-24-
 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

   KM WEDDING EVENTS MANAGEMENT, INC.
 

 

 

  Date: August 14, 2015 By:/s/ Meera Nagarajan
        Meera Nagarajan, Chief Executive Officer

 

 

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