10-Q 1 kmwe93015form10q.htm FORM 10-Q

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

FORM 10-Q

(Mark One)

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

For the quarterly period ended: September 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 November 1, 2015 was 42,096,160 shares of common stock outstanding.

 1 
 

KM WEDDING EVENTS MANAGEMENT, INC.

FORM 10-Q
For the Six Months Period Ended September 30, 2015

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION  PAGE
   
ITEM 1. FINANCIAL STATEMENTS  5
Condensed Consolidated Financial Statements 5
Condensed Consolidated Balance Sheets at September 30, 2015 (unaudited) and March 31, 2015 5
Condensed Consolidated Statements of Income for the Three and Six Months Ended September 30, 2015 and 2014 (unaudited) 6
Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended September 30, 2015 and 2014 (unaudited) 7
Condensed Consolidated Statement in Changes in Equity 8
Condensed Consolidated Statements of Cash Flows for the Six Months Ended September 30, 2015 and 2014 (unaudited) 9
Notes to Condensed Consolidated Financial Statements (unaudited) 10

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

 19
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  24

 

 2 
 

KM WEDDING EVENTS MANAGEMENT, INC.

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

 3 
 

 

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-Q 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.

 

 4 
 

PART I -  FINANCIAL INFORMATION  

ITEM 1.  FINANCIAL STATEMENTS

KM Wedding Events Management, Inc
Interim Condensed Consolidated balance sheet as at September 30, 2015   
(in US Dollars $ unless otherwise stated)
      as at September 30,  as at March 31,
   Notes  2015  2015
      (unaudited)   
ASSETS         
Current assets:               
Cash and cash equivalents   3    106,606    97,960 
Accounts receivable   4    527,317    551,575 
Other current assets   5    539,505    603,314 
Total current assets        1,173,428    1,252,849 
Non-current assets:               
Property, plant and equipment, net   6    113,999    124,073 
Intangible assets, net   7    17,023    22,465 
Goodwill   21    692,850    685,007 
Film costs   24    20,254    12,289 
Deferred tax asset, net        61,731    4,066 
Other non-current assets   8    90,209    97,903 
Total non-current assets        996,066    945,803 
Total assets        2,169,494    2,198,652 
                
LIABILITIES AND EQUITY               
Current Liabilities:               
Accounts payable and accrued liabilities   9    245,485    190,087 
Statutory liabilities   10    259,517    247,731 
Short-term loans & current portion of long term debt   11    179,888    217,843 
Unsecured loans from related parties, net of advances   20    126,934    85,933 
Other current liabilities   13    268,686    140,796 
Total current liabilities        1,080,510    882,390 
                
Non-current liabilities:               
Long-term debt   12    252,909    279,943 
Other non-current liabilities   14    20,629    20,412 
Total non-current liabilities        273,538    300,355 
                
Equity:               
Common stock par value $ 0.001 (shares outstanding: 42,096,160 and 42,096,160 as at September 30, 2015 and March 31, 2015, respectively)   15    42,096    42,096 
Additional paid-in-Capital        1,165,712    1,165,712 
Accumulated deficit        (391,242)   (228,981)
Equity Attributable to equity holders of the company        816,566    978,827 
Non-Controlling Interest        (1,120)   37,080 
Total equity        815,446    1,015,907 
Total liabilities and equity        2,169,494    2,198,652 
 
The accompanying notes are an integral part to these interim condensed financial statements.

 

 5 
 

KM Wedding Events Management, Inc
Interim Condensed Consolidated Statement of Income
(in US Dollars $ unless otherwise stated)
         For the three months ended    For the three months ended    For the Six months ended    For the Six months ended 
    Notes    30-Sep-15    30-Sep-14    30-Sep-15    30-Sep-14 
         (unaudited)    (unaudited)    (unaudited)    (unaudited) 
Revenues                         
Matrimonial service income   16    130,547    331,086    299,012    602,890 
Wedding event management income        —      87,732    39,456    212,278 
Wedding infrastructure lease income        2,915    —      10,549    —   
Total        133,462    418,818    349,017    815,168 
                          
Costs and expenses                         
Matrimonial service expenses   17    76,032    93,203    161,873    182,166 
Wedding event management expenses        —      74,633    31,170    172,153 
Wedding infrastructure maintenance expenses        1,174    —      4,295    —   
Personnel costs        66,777    82,860    164,323    165,214 
General and administrative expenses   18    135,241    151,979    235,350    237,763 
Depreciation and amortization        8,093    7,193    15,885    13,627 
Total        287,317    409,868    612,896    770,923 
Operating Income / (loss)        (153,855)   8,950    (263,879)   44,245 
                          
Other income / (expenses)                         
Foreign exchange gain / (loss)        8,608    7,150    13,971    7,150 
Miscellaneous income        —      275    —      275 
Interest Income        —      7,953    —      7,953 
Finance charges        (20,638)   (17,608   (40,882)   (32,558)
Total other income / (expenses), net        (12,030)   (2,230)   (26,911)   (17,180)
Income / (loss) before income tax expense        (165,885)   6,720    (290,790)   27,065 
                          
Income taxes                         
Provision for Income taxes written back        12,353    —      12,353    —   
Deferred tax benefit        75,731    —      75,731    —   
                          
Net income / (loss)        (77,801)   6,720    (202,706)   27,065 
                          
Attributable to:                         
Equity holders of the company        (66,355)   (30,955)   (163,571)   (25,832)
Non-controlling interest        (11,446)   37,675    (39,135)   52,897 
Net income / (loss)        (77,801)   6,720    (202,706)   27,065 
Earnings / (loss) per share - basic and diluted   19    (0.0016)   (0.0007)   (0.0039)   (0.0006)
                          
The accompanying notes are an integral part to these interim condensed financial statements.

 

 6 
 

 

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 
                                    
As at March 31, 2014   41,646,160    41,646    1,031,162    (268,403)   804,405    (53,710)   750,695 
Fresh issue of equity shares*   425,000    425    127,075     Nil     127,500     Nil     127,500 
Net income / (loss) for the period [After adjusting Comprehensive Income/(Loss)]    Nil      Nil      Nil     (27,147)   (27,147)   51,822    24,675 
As at September 30, 2014 (unaudited)   42,071,160    42,071    1,158,237    (295,550)   904,758    (1,888)   902,870 
* 425,000 no of equity shares of par value $0.001 are issued at $0.30 per share. Also refer note 15 "Common Stock"
                                    
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 [After adjusting Comprehensive Income/(Loss)]    Nil      Nil      Nil     (162,261)   (162,261)   (38,200)   (200,461)
As at September 30, 2015 (unaudited)   42,096,160    42,096    1,165,712    (391,242)   816,566    (1,120)   815,446 
                                    
The accompanying notes are an integral part to these interim condensed financial statements.

 

 7 
 

KM Wedding Events Management, Inc         
Interim Condensed Consolidated Statement of Comprehensive Income      
(in US Dollars $ unless otherwise stated)                    
    For the three months ended    For the three months ended    For the Six months ended    For the Six months ended 
    30-Sep-15    30-Sep-14    30-Sep-15    30-Sep-14 
    (unaudited)    (unaudited)    (unaudited)    (unaudited) 
Net income / (loss)   (77,801)   6,720    (202,706)   27,065 
Other Comprehensive Loss                    
Foreign Currency Translation Profit/(Loss)   1,868    (2,240)   2,245    (2,390)
Total Other Comprehensive Loss   1,868    (2,240)   2,245    (2,390)
                     
Attributable to:                    
Equity holders of the company   1,090    (1,307)   1,310    (1,315)
Non-controlling interest   778    (933)   935    (1,075)
Comprehensive Income/(loss)   (75,933)   4,480    (200,461)   24,675 
                     
The accompanying notes are an integral part to these interim condensed financial statements.

 

 8 
 

 

KM Wedding Events Management, Inc
Interim Condensed Consolidated Statement of cash flow
(in US Dollars $ unless otherwise stated)
       
  

For the Six months

ended

   For the Six months ended
   30-Sep-15  30-Sep-14
   (Unaudited)  (Unaudited)
Cash flows from operating activities
Net income / (loss)   (202,706)   27,065 
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization   15,885    13,627 
Unrealized foreign exchange (gain) / loss   (14,213)   (7,150)
Bad debts   7,777    20,888 
Amortization of film costs   18,829    17,549 
Marketing Charges - Shares issued as consideration   —      67,500 
Deferred tax benefit   (75,731)   —   
Provision for Income taxes written back   (12,353)   —   
 
Changes in operating assets and liabilities
(Increase) / Decrease in accounts receivables   12,231    (79,328)
(Increase) / Decrease in other current assets   66,957    (23,825)
(Increase) / Decrease in film costs   (27,573)   17,670 
(Increase) / Decrease in other non-current assets   2,987    28,764 
Increase / (Decrease) in accounts payable   62,191    30,586 
Increase / (Decrease )in income tax and other statutory liabilities   24,353    54,999 
Increase / (Decrease) in other current liabilities   137,580    (161,704)
Increase / (Decrease) in other non-current liabilities   1,256    369 
Net cash provided by (used in) operating activities   17,470    7,010 
 
Cash flows from investing activities
Additions to property, plant and equipment   (7,329)   (7,704)
Investments in long-term investments   —      4,186 
Advance given for Investment   —      (60,000)
Net cash provided by (used in) investing activities   (7,329)   (63,518)
 
Cash flows from financing activities
Proceeds from short term debts   17,146    (18,932)
Proceeds from issue of Equity Shares   —      60,000 
Proceeds from / (repayment of) long term debts   (13,682)   (905)
Net cash provided by (used in) financing activities   3,464    40,163 
Effect of exchange rate changes on cash   4,959    2,423 
Net increase in cash and cash equivalents   8,646    (13,922)
Cash and cash equivalents, beginning of period   97,960    88,616 
Cash and cash equivalents, end of period   106,606    74,694 
 
Supplementary disclosures of cash flow information
Cash paid during the year for:
Interest paid   40,882    31,656 
Income taxes paid   1,814    2,602 
Non-cash items:          
Allotment of common stock   —      67,500 
           
The accompanying notes are an integral part to these interim condensed financial statements.

 9 
 

 

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.

 

Company is a service provider in the matrimonial industry through mass media through its subsidiary KM Wedding Events Management Private Limited (formerly known as "KM Matrimony Private Limited", India) in Tamil Nadu, India. As of September 30, 2015, the Company maintains a 58.33% ownership interest in KM Wedding Events Management Private Limited, India.

 

2. Significant Accounting Policies            

a. Basis of Consolidation            

The company has invested  $ 569,000 to acquire 2,841,398 no of  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 (Rs.). The statements of income of our international subsidiary is translated into U.S. dollars at exchange rates indicative of market rates during each applicable period.

 

The interim condensed financial statements included herein are unaudited and have been prepared in accordance with US GAAP for interim financial reporting (primarily with topic 270, Interim Reporting, of Financial Accounting Standards Board ("FASB") Accounting Standard Codification ("ASC")), and do not include all disclosures required by US GAAP. The company has omitted disclosures which would substantially duplicate the information contained in its 2015 audited financial statements, such as accounting policies. Additionally, the company has provided disclosures where significant events have occurred subsequent to the issuance of its 2015 audited financial statements. Management believes that the disclosures are adequate to make the information presented not misleading if these interim condensed financial statements are read in conjunction with the company’s 2015 audited financial statements and the notes related thereto. In the opinion of management, the financial statements reflect all adjustments of a normal and recurring nature necessary to present fairly, the company’s financial position, results of operations and cash flows for the interim reporting periods.

 

The results of operations for six months ended September 30, 2015 may not be indicative of the results of operations for the full year ending March 31, 2016. Subsequent events have been evaluated through November 21, 2015, the date these financial statements were issued.

 

The closing exchange rate as of September 30, 2015 and March 31, 2015 was 65.50 and 62.31 Indian Rupees to one US dollar, respectively. The average exchange rates for the six months ended September 30, 2015 was 64.1518

 

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.

 

d. Comprehensive Loss

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

 

 10 
 

3. Cash and cash equivalents
   
  Cash and cash equivalents as at September 30, 2015 comprises the following:
   
  Particulars as at as at
  30 September, 2015
(Unaudited)
31 March , 2015
  (a) Cash on hand 85,664 89,219
  (b) Balance with banks on current accounts 20,942 8,741
  Total                  106,606 97,960
   
4. Accounts receivable
  Accounts receivable as at September 30, 2015 comprises the following:
 

Particulars

 

as at as at
  30 September, 2015
(Unaudited)
31 March , 2015
  (a) Customers (trade)                    527,317                           551,575
  Total                  527,317                         551,575
               

5. Other current assets
  Other current assets as at September 30, 2015 comprises the following:
  Particulars as at as at
    30 September, 2015
(Unaudited)
31 March , 2015
  (a) Event advances                    205,777 216,312
  (b) Staff advances                     37,991 39,802
  (c) Advance tax (net of provision for income tax)                       8,522 -   
  (d) Loans and advances                    286,503 333,562
  (e) Prepaid expenses                          712 13,638
  Total                  539,505 603,314

 

 11 
 

6. Property, plant and equipment, net
  Property, plant and equipment as at September 30, 2015 comprises the following:  
  Particulars Gross
carrying value
Accumulated
depreciation
Net
carrying value
    30 Sep, 2015
(Unaudited)
31-Mar-15 30 Sep, 2015
(Unaudited)
31-Mar-15 30 Sep, 2015
(Unaudited)
31-Mar-15
  (a) Vehicles         40,067 42,118           8,011 6,502         32,056 35,616
  (b) Computers & Peripherals         70,207 73,802         65,729 68,367           4,478 5,435
  (c) Furniture & Fixtures         13,541 14,234           6,797 6,432           6,744 7,802
  (d) Office Equipments         63,592 61,173         34,112 32,533         29,480 28,640
  (e) Leasehold improvements         76,690 80,616         44,041 42,254         32,649 38,362
  (f) Plant & Machinery         10,622 9,295           2,030 1,077           8,592 8,218
  Total        274,719 281,238        160,720 157,165       113,999 124,073
                   

Operating leases                                      
The total amount of operating lease expenses is as follows:                    
Particulars For the Six Months ended For the Six Months ended
  30 September,
2015
(unaudited)
30 September, 2014
(Unaudited)
Lease Expenses                      34,200                             18,103
                                           

 

7. Intangible assets, net
  Intangible assets as at September 30, 2015 comprise the following:
  Particulars Gross
carrying value
Accumulated
amortization
Net
carrying value
      30 Sep, 2015
(Unaudited)
31-Mar-15 30 Sep, 2015
(Unaudited)
31-Mar-15 30 Sep, 2015
(Unaudited)
31-Mar-15
  (a) Software         51,045 53,658         34,022 31,193         17,023 22,465
  Total          51,045 53,658         34,022 31,193         17,023 22,465
                   

 

 12 
 

8. Other non-current assets
  Other non-current assets as at September 30, 2015 comprises the following:
  Particulars as at as at
    30 September, 2015
(Unaudited)
31 March, 2015
  (a) Rental advance                     17,405                             25,156
  (b) Deposits                     60,632                             63,536
  (c) Software under application development stage                     12,172                               9,211
  Total                    90,209                           97,903
                                             

9. Accounts payable and accrued liabilities
  Accounts payable and accrued liabilities as at September 30,2015 comprises the following:  
  Particulars as at as at
    30 September, 2015
(Unaudited)
31 March, 2015
  (a) Accounts payable                    154,668 87,895
  (b) Salary payable                     10,302 24,094
  (c) Current portion of provision for gratuity                       1,801 1,701
  (d) General and administrative expenses payable                     78,714 76,397
  Total                    245,485 190,087
           

10.  Statutory liabilities
  Income tax and other statutory liabilities as at September 30,2015 comprises the following:
  Particulars as at as at
    30 September, 2015
(Unaudited)
31 March, 2015
  (a) Service tax                    185,029                           156,573
  (b) Provident fund                     12,394                             25,192
  (c) Employees state insurance                       2,523                               6,291
  (d) Professional tax                       5,489                               5,554
  (e) Withholding tax                     54,082                             31,350
  (f) Income tax                        –                             22,771
  Total                    259,517                           247,731

 

 13 
 

 

11.  Short term borrowings and long term debt
  Short term loans and borrowings as at September 30,2015 comprises the following:
  Particulars as at as at
    30 September, 2015
(Unaudited)
31 March, 2015
  (a) Bank overdraft1                    153,937                     172,122
  (b) Unsecured loan                     2,000                             23,469
  (c) Secured loan                       -                                 196
  (d) Current portion of long-term debt                       23,951                               22,056
  Total                    179,888                           217,843

 1 The bank overdraft facility 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

 

12. Long Term Debt
  Long term debt comprise the following:
  Particulars as at as at
    30 September, 2015
(Unaudited)
31 March, 2015
  (a) Secured loans1 257,892                           279,161
  (c) Vehicle loans2                     18,968                             22,838
                         276,860                           301,999
  (d) Current portion of long-term debt                    (23,951)                           (22,056)
    Total 252,909 279,943

 

1 During the 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 $ 694,656. The company’s liability has been initially recognized in the financial statements at $ 267,941 under secured loans. The personal properties 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 in the Board Meeting held on 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 September 30, 2015 and March 31, 2015 towards this debt arrangement is $ 668,604 and $ 723,745 respectively. The carrying amount of the company’s liability as at September 30, 2015 and March 31, 2015 is $ 257,892 and $ 279,161 respectively.

 

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 as at September 30, 2015 is as follows:

 

 

Particulars 

 As at September 30, 2015
(Unaudited)
2016                                          11,597
2017                                          25,453
2018                                          26,371
2019                                          27,920
2020                                          26,390
Thereafter         159,129
Total long term debt                                         276,860

 

 14 
 

13. Other current liabilities
  Other current liabilities as at September 30, 2015 comprises the following:
  Particulars as at as at
    30 September, 2015
(Unaudited)
31 March, 2015
  (a) Unearned revenues (i.e. billings in excess of revenue)                    119,801 95,538
  (b) Advances received                    148,885 45,258
  Total                    268,686 140,796

 

14. Other non-current liabilities
  Other non-current liabilities as at September 30, 2015 comprises the following:
  Particulars as at as at
    30 September, 2015
(Unaudited)
31 March, 2015
  (a) Trade Deposits                       5,418 5,856
  (b) Provision for gratuity                     15,211 14,556
  Total                     20,629 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 authorized Equity share capital (number of shares) of the company is 300,000,000 shares as at September 30, 2015 and 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 September 30, 2015 and 42,096,160 shares as at March 31, 2015.
    (i) 4,596,160 number of shares are issued at a price of $ 0.05 per share
    (ii) 4,050,000 number of shares are issued at a price of $ 0.20 per share
    (iii) 33,000,000 number of shares at par value of $ 0.001 per share are issued for consideration other than cash.
    (iv) 200,000 number of shares are issued at a price of $ 0.30 per share
    (v) 250,000 number of shares are issued for consideration other than cash at a price of $ 0.30 per share
  The shares are issued at a price mutually agreed by the shareholders pursuant to an agreement entered with them.
   
  Preferred Stock
  The authorized 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 September 30, 2015. The issued, subscribed and paid-up Preference share capital is Nil as at September 30, 2015.
   
  The Shareholders who have subscribed 4,050,000 number 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.
                      

 15 
 

16.

 

 

 

Matrimonial service income

  Particulars For the three months ended For the Six months ended
    30/Sep/15 30/Sep/14 30/Sep/15 30/Sep/14
  (a) Profile Registration and Event Incomes 112,022 170,862 239,923 387,908
  (b) Sponsorship Income and advertisement Income 4,193 46,341 9,322 76,170
  (c) Sale of products(magazines)/Television series/television rights 14,332 113,883 49,767 138,812
    Total 130,547 331,086 299,012 602,890
             
17. Matrimonial service expenses
  Particulars For the three months ended For the Six months ended
    30/Sep/15 30/Sep/14 30/Sep/15 30/Sep/14
  (a) Event expenses 11,611 42,929 53,136 71,161
  (b) Production and telecast expenses - television series 37,584 27,588 58,635 55,297
  (c) Publication expenses 4,973 9,036 14,882 28,699
  (d) Sub-contracting charges 10,280 -    10,280 -   
  (e) ARC commission 2,075 4,608 6,111 9,460
  (f) Amortization of film cost 9,509 9,042 18,829 17,549
    Total 76,032 93,203 161,873 182,166
             
18. General and administrative expenses
  Particulars For the three months ended For the Six months ended
    30/Sep/15 30/Sep/14 30/Sep/15 30/Sep/14
  (a) Lease expenses 16,577 9,645 34,596 18,697
  (b) Repairs & Maintenance 3,415 7,893 7,314 14,507
  (c) Insurance 374 205 553 728
  (d) Electricity charges 2,550 2,725 5,748 5,784
  (e) Audit fees 2,117 2,269 4,287 4,568
  (f) Filing Charges 3,700 14,500 4,000 23,828
  (g) Bank charges 1,617 3,135 4,773 5,841
  (h) Bad debts 4,924 13,659 7,777 20,888
  (i) Travelling and conveyance 1,356 8,963 2,062 18,515
  (j) Professional charges 45,208 15,944 62,708 25,938
  (k) Printing & Stationery 1,026 944 2,167 2,331
  (l) Telephone, Courier & Postage 4,315 5,981 8,783 12,597
  (m) Security charges 1,016 1,088 2,046 2,192
  (n) Business promotion expenses 46,172 58,611 85,000 73,750
  (o) Others 874 6,417 3,536 7,599
    Total 135,241 151,979 235,350 237,763
             
19. Earnings / (loss) per share (EPS)
  Particulars For the three months ended For the Six months ended
    30/Sep/15 30/Sep/14 30/Sep/15 30/Sep/14
  (a) Net income / (loss) (66,355) (30,955) (163,571) (25,832)
  (b) Weighted average number of equity shares outstanding 42,096,160 41,646,160 42,096,160 41,721,845
 

 

Earnings / (loss) per share - basic and diluted

 (0.0016)  (0.0007)  (0.0039)  (0.0006)

 

 16 
 

 

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

 

Particulars KMP and Relative of KMP
 

2015

(unaudited)

2014

(unaudited)

Transactions    
Advances given for business purposes 51,918 198,555
Settlement of advances given for business purposes /advance received form the director 235,775 60,040
Repayment of unsecured loans 137,721 2,794
Closing balances    
Advances received from Directors (credit bal.) 29,409 -
Advances given for business purposes (debit bal.) - 207,238
Unsecured loans received (credit bal.) (Refer note below) 97,525 280,114

 

21. Goodwill
  Particulars
  Goodwill1  679,948
  Add: Cumulative Translation adjustment  12,902
  Balance as at September 30, 2015  692,850

 

1Goodwill arises in the process of acquiring KM Wedding Events Management Private Limited, India (formerly known as "KM Matrimony 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 September 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.

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22. Employee Benefits
  Defined Benefit Plan
  The liability recognized in the balance sheets as at September 30, 2015 is as follows. The obligations are unfunded as on the dates of balance sheets.
 
  Particulars As at September 30
    2015 (Unaudited) 2014 (Unaudited)
  (a) Gratuity liability recognized in the balance sheet  17,012 7,257
         
Weighted average assumptions used to determine net gratuity cost and benefit obligations:
  For the Six months ended September 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 & thereby no adjustments are required to be made to the carrying amount of assets and liabilities.

 

24. Film Costs

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

 

25. Commitments and Contingencies

Statutory Dues

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

 

26. Previous Period Figures

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

 

 18 
 

 

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 comprise of Matrimonial (Matchmaking) Services (“Matrimonial Services”) and Wedding Services (until June 30, 2015).Considering various business related aspects (including socio-economic aspects), the Company has decided to have a dedicated focus on Matrimonial Services business commencing July 1, 2015.

Matrimonial Services include matchmaking and partner identification, through multiple delivery channels via print and visual media, website, physical centers and events. In order to increase traction in the Matrimonial 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 Matrimonial 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 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 Matrimonial Services for weddings to be fixed in India by Indians in the U.S. launching a customized website for Matrimonial Services in the U.S. market (fiscal 2016-17).

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

Results of Operations 

Our financial performance for the three months ended September 30, 2015 compared to the three months ended September 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.

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For the three months ended September 30, 2015, the Company generated revenue of $133,462 compared to $418,818 for the corresponding period in the previous year.

In terms of revenue mix 98% of the revenues were generated from Matrimonial Services (79% for the corresponding three month period in the previous year); Nil from the Wedding Services (21% for the corresponding three month period in the previous year) and 2% of the revenues were generated from wedding infrastructure leasing services (Nil for the corresponding three month period in the previous year).

During the three month period ended September 30, 2015, the Company incurred $287,317 of operating expenses compared to $409,868 for the corresponding three month period in the previous year, which included:

  Matrimonial Service expenses of $76,032 compared to $93,203 for the corresponding three month period in the previous year, which represents 58% of matrimonial revenues.
     
  General and Administrative expense of $135,241 ($151,979 for the corresponding three month period in the previous year) which represents 101% of revenues compared to 36% for the corresponding three month period in the previous year.
     
  Personnel expenses of $66,777 ($82,860 for the corresponding three month period in the previous year) representing 50% of revenues compared to 20% of revenues in the corresponding three month period in the previous year; and
     
  Depreciation and Amortization expenses of $8,093 ($7,193 for the corresponding three month period in the previous year).

For the three months ended September 30, 2015, the Company had operating loss of $153,855 compared to income of $8,950 for the corresponding period in the previous year. In addition, for the three month ended September 30, 2015, the Company had a net loss of $77,801 compared to income of $6,720 for the corresponding three month period in the previous year).

Comparison of Six Months Ended September 30, 2015 and Six Months Ended September 30, 2014

Results of Operations 

Our financial performance for the six months ended September 30, 2015 compared to the six months ended September 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 six months ended September 30, 2015, the Company generated revenue of $349,017 compared to $815,168 for the corresponding period in the previous year.

In terms of revenue mix 86% of the revenues were generated from Matrimonial Services (74% for the corresponding six month period in the previous year); 11% from the Wedding Services (26% for the corresponding six month period in the previous year) and 3% of the revenues were generated from wedding infrastructure leasing services (Nil for the corresponding six month period in the previous year).

During the six month period ended September 30, 2015, the Company incurred $612,896 of operating expenses compared to $770,923 for the corresponding six month period in the previous year, which included:

  Matrimonial Service expenses of $161,873 compared to $182,166 for the corresponding six month period in the previous year, which represents 54% of matrimonial revenues.
     
  Wedding Service expense of $31,170 ($172,153 for the corresponding six month period in the previous year) which represents 79% of wedding services revenues compared to 81 % for the corresponding six month period in the previous year.
     
  General and Administrative expense of $235,350 ($237,763 for the corresponding six month period in the previous year) which represents 67% of revenues compared to 29% for the corresponding six month period in the previous year.
     
  Personnel expenses of $164,323 ($165,214 for the corresponding six month period in the previous year) representing 47% of revenues compared to 20% of revenues in the corresponding six month period in the previous year; and.
     
  Depreciation and Amortization expenses of $15,885 ($13,627 for the corresponding six month period in the previous year).

 

For the six months ended September 30, 2015, the Company had operating loss of $263,879 compared to income of $44,245 for the corresponding period in the previous year. In addition, for the six month ended September 30, 2015, the Company had a net loss of $202,706 compared to income of $27,065 for the corresponding six month period in the previous year).

 Liquidity and Capital Resources

Overview

At September 30, 2015, the Company had cash equivalents of $106,606 and accumulated deficit of $391,242. At September 30, 2015, the Company had a positive working capital (including current portion of long-term debt) of $92,918 compared to positive working capital of $370,459 at March 31, 2015, resulting from:

  Accounts Receivable of $527,317 at September 30, 2015 compared to $551,575 at March 31, 2015, which represents a 4% decrease;
     
  Account Payable and accrued liabilities relating to accrued interest expense, unpaid professional fees, and unpaid general expenditures of $245,485 at September 30, 2015 compared to $190,087 at March 31, 2015, representing 29% increase;
     
  Statutory liabilities of $259,517 at September 30, 2015 compared to $247,731 at March 31, 2015, representing 5% increase;
     
  Personnel expenses of $164,323 ($165,214 for the corresponding six month period in the previous year) representing 47% of revenues compared to 20% of revenues in the corresponding six month period in the previous year; and.
     
  Short-term loans and current portion in long-term debt of $179,888 at September 30, 2015 compared to $217,843 at March 31, 2015, representing a decrease of 17%;

 21 
 

  Unsecured loans of $126,934 at September 30, 2015 compared to $85,933 at March 31, 2015, representing a 48% increase;
     
  Other current liabilities of $268,686 at September 30, 2015 compared to $140,796 at March 31, 2015, representing a 91% increase; and
     
  Non-current liabilities of $273,538 at September 30, 2015 compared to $300,355 at March 31, 2015, representing a reduction of 9%.

Cash flows from Operating Activities

During the six month period ended September 30, 2015, net cash provided by operating activities was $17,470 compared to net cash provided by operations $7,010 during the corresponding period in the previous year.

Cash flows from Investing Activities

During the six month period ended September 30, 2015, net cash used in investing activities was $7,329 compared to $63,518 cash used for the corresponding period in the previous year.

Cash flows from Financing Activities

During the six month period ended September 30, 2015, net cash provided by financing activities was $3,464 compared to $40,163 provided by financing activities for the corresponding period in the previous year.

Future Capital Needs

At September 30, 2015, our working capital surplus was $92,918. We had $106,606 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 September 30, 2015, the Company has long term debts in the form of secured loans amounting to $276,860 and repayable as under:

Less Than One Year $11,597
One to Three Years $79,744
More than Three Years $185,519

 

 22 
 

Recent Accounting Pronouncements

As of September 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 September 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

Nil.

 23 
 

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

 

10.1 Termination Agreement.*
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.PRE 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: November 23, 2015 By:/s/ Meera Nagarajan
        Meera Nagarajan, Chief Executive Officer

 

 25