Attached files
file | filename |
---|---|
EX-31.1 - EXHIBIT 31.1 - KM WEDDING EVENTS MANAGEMENT, INC. | kmwe063014exh31_1.htm |
EX-32.2 - EXHIBIT 32.2 - KM WEDDING EVENTS MANAGEMENT, INC. | kmwe063014exh32_2.htm |
EX-32.1 - EXHIBIT 32.1 - KM WEDDING EVENTS MANAGEMENT, INC. | kmwe063014exh32_1.htm |
EXCEL - IDEA: XBRL DOCUMENT - KM WEDDING EVENTS MANAGEMENT, INC. | Financial_Report.xls |
EX-31.2 - EXHIBIT 31.2 - KM WEDDING EVENTS MANAGEMENT, INC. | kmwe063014exh31_2.htm |
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, 2014
☐ 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 July 15, 2014 was 41,646,160 shares of common stock outstanding.
KM WEDDING EVENTS MANAGEMENT, INC.
FORM 10-Q
For the Quarterly Period Ended June 30, 2014
TABLE OF CONTENTS
PAGE | |
PART I - FINANCIAL INFORMATION | |
ITEM 1 FINANCIAL STATEMENTS | 1 |
ITEM 2 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 20 |
ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 23 |
ITEM 4 CONTROLS AND PROCEDURES | 23 |
PART II - OTHER INFORMATION | |
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 | 23 |
ITEM 4 MINE SAFETY DISCLOSURES | 24 |
ITEM 5 OTHER INFORMATION | 24 |
ITEM 6 EXHIBITS | 24 |
SIGNATURES | 25 |
KM WEDDING EVENTS MANAGEMENT, INC.
UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONTENTS | PAGES |
INTERIM CONDENSED CONSOLIDATED BALANCE SHEET | 1 |
INTERIM CONDENSED CONSOLIDATED STATEMENT OF INCOME | 3 |
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY | 5 |
INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | 6 |
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW | 7 |
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | 9 |
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 the year ended June 30, 2014 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. |
ITEM 1.
KM Wedding Events Management, Inc | |||
Interim Condensed Consolidated Balance Sheets | |||
(in US Dollars $ unless otherwise stated) | |||
As at June 30, | As at March 31, | ||
Notes | 2014 | 2014 | |
ASSETS | (Unaudited) | (Audited) | |
Current assets: | |||
Cash and cash equivalents | 3 | 98,773 | 88,616 |
Accounts receivable | 4 | 278,914 | 278,857 |
Other current assets | 5 | 495,243 | 507,830 |
Total current assets | 872,930 | 875,303 | |
Non-current assets: | |||
Long Term Investments | 6 | 134,865 | 135,000 |
Property, plant and equipment, net | 7 | 135,074 | 133,616 |
Intangible assets, net | 8 | 1,116 | 1,173 |
Goodwill | 21 | 686,954 | 687,139 |
Film costs | 24 | 11,076 | 19,566 |
Other non-current assets | 9 | 64,176 | 64,123 |
Total non-current assets | 1,033,261 | 1,040,617 | |
Total assets | 1,906,191 | 1,915,920 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
Current Liabilities: | |||
Accounts payable and accrued liabilities | 10 | 146,971 | 121,324 |
Income tax and other statutory liabilities | 11 | 182,959 | 135,485 |
Short-term loans & current portion of long term debt | 12 | 375,680 | 357,024 |
Unsecured loans from related parties, net of advances | 167,601 | 221,040 | |
Other current liabilities | 13 | 191,118 | 258,399 |
Total current liabilities | 1,064,329 | 1,093,272 | |
Non-current liabilities: | |||
Long-term debt | 12 | 19,299 | 20,865 |
Deferred tax liabilities | 32,243 | 32,275 | |
Other non-current liabilities | 14 | 19,430 | 18,813 |
Total non-current liabilities | 70,972 | 71,953 |
1 |
Equity: | |||
Common stock par value $ 0.001 | |||
(shares outstanding: 41,646,160 and 41,646,160 | |||
as at June 30, 2014 and March 31, 2014, | |||
respectively) | 15 | 41,646 | 41,646 |
Additional paid-in-Capital | 1,031,162 | 1,031,162 | |
Accumulated deficit | (263,363) | (268,403) | |
Equity Attributable to equity holders of the company | 809,445 | 804,405 | |
Non-Controlling Interest | (38,555) | (53,710) | |
Total equity | 770,890 | 750,695 | |
Total liabilities and equity | 1,906,191 | 1,915,920 | |
The accompanying notes are an integral part to these interim condensed financial statements. | |||
For and on behalf of the Board of Directors | |||
of KM Wedding Events Management, Inc | |||
Vijaya Bhaskar Venkatesan MEERA NAGARAJAN | |||
Director Managing Director | |||
Place : Chennai, Tamil Nadu, India | |||
Date : June 30, 2014 |
2 |
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 | 30-Jun-14 | 30-Jun-13 | |
Revenues | (Unaudited) | (Unaudited) | |
Matrimonial service income | 16 | 271,804 | 248,491 |
Wedding catering service income | 124,546 | 56,464 | |
Total | 396,350 | 304,955 | |
Costs and expenses | |||
Matrimonial service expenses | 17 | 88,963 | 100,337 |
Wedding catering service expenses | 97,520 | 51,056 | |
Personnel costs | 82,354 | 82,613 | |
General and administrative expenses | 18 | 85,784 | 122,362 |
Depreciation and amortization | 6,434 | 8,275 | |
Total | 361,055 | 364,643 | |
Operating Income / (loss) | 35,295 | (59,688) | |
Other income / (expenses) | |||
Loss on sale of Property Plant & Equipment | - | ||
Interest Income | - | 3,053 | |
Finance charges | (14,950) | (10,280) | |
Total other income / (expenses), net | (14,950) | (7,227) | |
Income / (loss) before income tax expense | 20,345 | (66,915) | |
Income taxes | |||
Current tax | - | - | |
Deferred tax (expense) / benefit | - | - | |
Prior Period Taxes | - | (1,996) | |
Net income / (loss) | 20,345 | (68,911) |
3 |
Attributable to: | |||
Equity holders of the company | 5,123 | (51,403) | |
Non-controlling interest | 15,222 | (17,508) | |
Net income / (loss) | 20,345 | (68,911) | |
Earnings / (loss) per share - basic and diluted | 19 | 0.0001 | (0.0013) |
The accompanying notes are an integral part to these interim condensed financial statements. | |||
For and on behalf of the Board of Directors | |||
of KM Wedding Events Management, Inc | |||
Vijaya Bhaskar Venkatesan MEERA NAGARAJAN | |||
Director Managing Director | |||
Place : Chennai, Tamil Nadu, India | |||
Date : June 30, 2014 |
4 |
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, 2013 | 39,246,160 | 39,246 | 553,562 | (268,635) | 324,173 | (602,566) | (278,393) |
Fresh issue of equity shares1 | 2,400,000 | 2,400 | 477,600 | Nil | 480,000 | Nil | 480,000 |
Adjustment in Non- controlling Interest |
Nil | Nil | Nil | Nil | Nil | 943,626 | 943,626 |
Net income / (loss) for the period | Nil | Nil | Nil | (57,860) | (57,860) | (490,922) | (548,782) |
As at June 30, 2013 | 41,646,160 | 41,646 | 1,031,162 | (326,495) | 746,313 | (149,862) | 596,451 |
1 2,400,000 no of equity shares of par value USD 0.001 are issued at USD 0.20 per share. Also refer note 15 "Common stock" | |||||||
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 | Nil | Nil | Nil | 5,040 | 5,040 | 15,155 | 20,195 |
As at June 30, 2014 | 41,646,160 | 41,646 | 1,031,162 | (263,363) | 809,445 | (38,555) | 770,890 |
The accompanying notes are an integral part to these interim condensed financial statements. | |||||||
For and on behalf of the Board of Directors | |||||||
of KM Wedding Events Management, Inc | |||||||
Vijaya Bhaskar Venkatesan MEERA NAGARAJAN | |||||||
Director Managing Director | |||||||
Place : Chennai, Tamil Nadu, India | |||||||
Date : June 30, 2014 |
5 |
KM Wedding Events Management, Inc | ||||||
Interim Condensed Consolidated Statement of Comprehensive Income | ||||||
(in US Dollars $ unless otherwise stated) | ||||||
For the year ended | ||||||
30-Jun-14 | 30-Jun-13 | |||||
(Unaudited) | (Unaudited) | |||||
Net Income/(loss) | 20,345 | (68,911) | ||||
Other Comprehensive Loss | ||||||
Foreign Currency Translation Loss | (150) | - | ||||
Total Other Comprehensive Loss | (150) | - | ||||
Attributable to: | ||||||
Equity holders of the company | (83) | - | ||||
Non-controlling interest | (67) | - | ||||
Comprehensive Income/(loss) | 20,195 | (68,911) | ||||
The accompanying notes are an integral part to these interim condensed financial statements. | ||||||
For and on behalf of the Board of Directors | ||||||
of KM Wedding Events Management, Inc | ||||||
Vijaya Bhaskar Venkatesan MEERA NAGARAJAN | ||||||
Director Managing Director | ||||||
Place : Chennai, Tamil Nadu, India | ||||||
Date : June 30, 2014 |
6 |
KM Wedding Events Management, Inc | ||
Interim Condensed Consolidated Statement of cash flow | ||
(in US Dollars $ unless otherwise stated) | ||
For the period ended | ||
June 30, 2014 | June 30, 2013 | |
(Unaudited) | (Unaudited) | |
Cash flows from operating activities | ||
Net income / (loss) | 20,345 | (68,911) |
Adjustments to reconcile net income to net cash | ||
provided by operating activities | ||
Depreciation and amortization | 6,434 | 8,275 |
Deferred tax expense / (benefit) | - | (1,996) |
Profit/Loss on disposal of property, plant and equipment | - | - |
Bad debts | 7,229 | - |
Amortization of film costs | 8,507 | 530 |
Changes in operating assets and liabilities | ||
(Increase) / decrease in accounts receivables | (57) | 34,322 |
(Increase) in other current assets | 12,587 | (254,646) |
(Increase) /Decrease in film costs | (17) | 579 |
(Increase) in other non-current assets | (53) | (5,976) |
Increase in accounts payable | 25,647 | (37,639) |
Increase in income tax and other statutory liabilities | 47,474 | (54,576) |
Increase / (decrease) in other current liabilities | (120,720) | 245,397 |
Increase / (decrease) in other non-current liabilities | 617 | (3,164) |
Net cash provided by (used in) operating activities | 7,993 | (137,805) |
Cash flows from investing activities | ||
Additions to property, plant and equipment | (7,942) | (1,851) |
Investments in long-term investments | 135 | (136,089) |
Proceeds from disposal of property, plant and equipment | (704) | |
Acquisition of additional stake in subsidiary | - | (229,000) |
Net cash used in investing activities | (7,807) | (367,644) |
7 |
Cash flows from financing activities | ||
Proceeds from short term debts | 18,656 | (298,900) |
Proceeds from issue of Equity Shares | - | 480,000 |
Proceeds from / (repayment of) long term debts | (1,566) | (9,587) |
Net cash provided by (used in) financing activities | 17,090 | 171,513 |
Effect of exchange rate changes on cash | (7,119) | 16,218 |
Net increase in cash and cash equivalents | 10,157 | (317,718) |
Cash and cash equivalents, beginning of period | 88,616 | 374,598 |
Cash and cash equivalents, end of period | 98,773 | 56,880 |
Supplementary disclosures of cash flow information | ||
Cash paid during the year for: | ||
Interest paid | 14,884 | 10,280 |
Income taxes paid | 1,155 | 1,156 |
Non-cash items: | ||
Allotment of common stock | - | - |
The accompanying notes are an integral part to these interim condensed financial statements. | ||
For and on behalf of the Board of Directors | ||
of KM Wedding Events Management, Inc | ||
Vijaya Bhaskar Venkatesan MEERA NAGARAJAN | ||
Director Managing Director | ||
Place : Chennai, Tamil Nadu, India | ||
Date : June 30, 2014 |
8 |
KM Wedding Events Management, Inc
Notes to 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 recently 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 of June 30, 2014, the Company maintains a 55.32% 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 USD 509,000 to acquire 2,513,144 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 subsidiaries are generally denominated in the currency of Indian Rupee. The statements of income of our international operations are translated into U.S. dollars at exchange rates indicative of market rates during each applicable period.
Subsequent events have been evaluated through July 30, 2014, the date these financial statements are available to be issued.
The closing exchange rate as of June 30, 2014 and March 31, 2014 was 60.06 and 60 Indian Rupees to one US dollar, respectively. The average exchange rates for the year ended June 30, 2014 was 59.7978
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.
9 |
3. Cash and cash equivalents
Cash and cash equivalents as at June 30, 2014 comprises the following:
For the period ending | For the year ended | ||
Particulars | 30 June, 2014 (Unaudited) | 31 March, 2014 | |
(a) | Cash on hand | 89,367 | 80,046 |
(b) | Balance with banks on current accounts | 9,406 | 8,570 |
Total | 98,773 | 88,616 |
4. Accounts receivable
Accounts receivable as at June 30, 2014 comprises the following:
For the period ending | For the year ended | ||
Particulars | 30 June, 2014 (Unaudited) | 31 March, 2014 | |
(a) | Customers (trade) | 269,659 | 278,857 |
(b) | Affiliated entity | 9,255 | -- |
Total | 278,914 | 278,857 |
5. Other current assets
Other current assets as at June 30, 2014 comprises the following:
For the period ended | For the year ended | ||
Particulars | 30 June, 2014 (Unaudited) | 31 March, 2014 | |
(a) | Event advances | 122,301 | 122,423 |
(b) | Staff advances | 35,097 | 33,624 |
(c) | Advance tax (net of provision for income tax) | 11,873 | 10,728 |
(d) | Loans and advances | 308,328 | 329,000 |
(e) | Interest accrued on Bank deposits | 10,595 | 10,605 |
(f) | Prepaid expenses | 7,049 | 1,450 |
Total | 495,243 | 507,830 |
10 |
6. Long term investments
Long-term investments comprise the following:
For the period ended | For the year ended | ||
Particulars | 30 June, 2014 (Unaudited) | 31 March, 2014 | |
(a) | Bank deposits 1 | 134,865 | 135,000 |
Total | 134,865 | 135,000 | |
1 These Bank deposits are for a term of 555 days and earn interest at the rate of 9.10 %. These Bank deposits are held under lien against short term borrowings from bank. |
7. Property, plant and equipment, net
Property, plant and equipment as at June 30, 2014 comprises the following:
Particulars | Gross carrying value |
Accumulated depreciation |
Net carrying value | |||||
30 June, 2014 (Unaudited) |
31 March, 2014 |
30 June, 2014 (Unaudited) |
31 March, 2014 |
30 June, 2014 (Unaudited) |
31 March, 2014 | |||
(a) | Vehicles | 43,696 | 43,740 | 3,774 | 2,776 | 39,922 | 40,964 | |
(b) | Computers & Peripherals | 75,991 | 75,330 | 69,845 | 69,414 | 6,146 | 5,916 | |
(c) | Furniture & Fixtures | 14,063 | 13,675 | 5,579 | 5,238 | 8,484 | 8,437 | |
(d) | Office Equipment | 58,142 | 57,109 | 27,662 | 25,625 | 30,480 | 31,484 | |
(e) | Leasehold improvements | 82,313 | 82,395 | 37,619 | 35,580 | 44,694 | 46,815 | |
(f) | Plant & Machinery | 5,713 | - | 365 | - | 5,348 | - | |
Total | 279,918 | 272,249 | 144,844 | 138,633 | 135,074 | 133,616 |
Leased Property, plant and equipment, net
The following is the analysis of property, plant and equipment under capital leases as June 30, 2014 included within property, plant and equipment, net
For the period ended | For the Year ended | |
Particulars | 30 June, 2014 (Unaudited) | 31 March, 2014 |
Vehicles | 43,696 | 43,740 |
Less: accumulated depreciation | (3,774) | (2,776) |
Net book value of leased assets | 39,922 | 40,964 |
11 |
Operating leases
The total amount of operating lease expenses is as follows:
Particulars | For the period ended | For the period ended |
30 June, 2014 (Unaudited) | 30 June, 2013 (Unaudited) | |
Lease Expenses | 8,755 | 7,454 |
8. Intangible assets, net
Intangible assets as at June 30, 2014 comprise the following:
Particulars | Gross carrying value |
Accumulated amortisation |
Net carrying value | |||||
30 June, 2014 (Unaudited) | 31 March, 2014 | 30 June, 2014 (Unaudited) | 31 March, 2014 | 30 June, 2014 (Unaudited) | 31 March, 2014 | |||
(a) | Software | 27,946 | 27,974 | 26,830 | 26,801 | 1,116 | 1,173 | |
Total | 27,946 | 27,974 | 26,830 | 26,801 | 1,116 | 1,173 | ||
9. Other non-current assets
Other non-current assets as at June 30, 2014 comprises the following:
Particulars | For the period ended | For the Year ended | |
30 June, 2014 (Unaudited) | 31 March, 2014 | ||
(a) | Rental advance | 29,429 | 29,458 |
(b) | Deposits | 7,025 | 6,915 |
(c) | Software under application development stage | 27,722 | 27,750 |
Total | 64,176 | 64,123 |
10. Accounts payable and accrued liabilities
Accounts payable and accrued liabilities as at June 30, 2014 comprises the following:
Particulars | For the period ended | ||
30 June, 2014 (Unaudited) | 31 March, 2014 | ||
(a) | Accounts payable | 54,968 | 42,145 |
(b) | Salary payable | 33,537 | 27,624 |
(c) | Current portion of provision for gratuity | 1,191 | 1,135 |
(d) | General and administrative expenses payable | 57,275 | 50,420 |
Total | 146,971 | 121,324 |
12 |
11. Income tax and other statutory liabilities:
Income tax and other statutory liabilities as at June 30, 2014 comprises the following:
For the period ended | For the Year ended | |||
30 June, 2014 (Unaudited) | 31 March, 2014 | |||
Particulars | ||||
(a) | Service tax | 108,159 | 75,903 | |
(b) | Provident fund | 30,255 | 24,242 | |
(c) | Employees state insurance | 6,313 | 3,771 | |
(d) | Professional tax | 3,801 | 3,805 | |
(e) | Tax deducted at sources | 34,431 | 27,764 | |
Total | 182,959 | 135,485 |
12. Short term borrowings and long term debt
Short term loans and borrowings as at June 30, 2014 comprises the following:
For the period ended | For the Year ended | |||
30 June, 2014 (Unaudited) | 31 March, 2014 | |||
Particulars | ||||
(a) | Bank overdraft 2 | 167,723 | 218,816 | |
(b) | Loan against Bank deposit | 131,257 | 129,210 | |
(c) | Secured loans | 68,411 | - | |
(d) | Current portion of long-term debt | 8,289 | 8,998 | |
Total | 375,680 | 357,024 |
2 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.
Long-term debt as at June 30 comprises the following:
For the period ended | For the Year ended | |||
30 June, 2014 (Unaudited) | 31 March, 2014 | |||
Particulars | ||||
(a) | Secured loans 3 | 2,355 | 3,233 | |
(b) | Capital lease obligations | 25,233 | 26,630 | |
27,588 | 29,863 | |||
(c) | Current portion of long-term debt | (8,289) | (8,998) | |
Total | 19,299 | 20,865 | ||
3 The secured loan is secured by way of hypothecation / first charge on the inventory cum book debts and all current assets of the company. The interest rate is 12.85 % and repayable in 6 months with moratorium period of two months. |
13 |
The scheduled aggregate maturity of long-term debt outstanding as at June 30, 2014 is as follows:
Particulars | As at June 30, 2014 |
2015 | 6,743 |
2016 | 6,483 |
2017 | 5,109 |
2018 | 4,573 |
2019 | 4,680 |
Total long term debt | 27,588 |
13. Other current liabilities
Other current liabilities as at June 30, 2014 comprises the following:
Particulars | For the period ended | For the Year ended | |
30 June, 2014 (Unaudited) | 31 March, 2014 | ||
(a) | Unearned revenues (i.e. billings in excess of revenue) | 191,118 | 258,399 |
Total | 191,118 | 258,399 | |
14. Other non-current liabilities
Other non-current liabilities as at June 30, 2014 comprises the following:
Particulars | For the period ended | For the Year ended | |
30 June, 2014 (Unaudited) | 31 March, 2014 | ||
(a) | Trade Deposits | 6,076 | 6,082 |
(b) | Provision for gratuity | 13,354 | 12,731 |
Total | 19,430 | 18,813 |
14 |
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 June 30, 2014 and March 31, 2014. The issued, subscribed and paid-up equity share capital (number of shares) of the company is 41,646,160 shares as at June 30, 2014 and 41,646,160 shares as at March 31, 2014.
The shares issued are as follows:
(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.
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 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.
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, 2014. The issued, subscribed and paid-up Preference share capital is Nil as at June 30, 2014.
16. Matrimonial service income
Particulars | For the period ended 30 June | ||
2014 | 2013 | ||
(unaudited) | (unaudited) | ||
(a) | Profile Registration and Event Incomes | 217,046 | 190,662 |
(b) | Sponsorship Income and advertisement Income | 29,829 | 33,896 |
(c) | Sale of space or time slot - Television series | 22,827 | 21,741 |
(d) | Sale of products (magazines) | 2,102 | 2,192 |
Total | 271,804 | 248,491 |
15 |
17. Matrimonial service expenses
Particulars | For the period ended 30 June | ||
2014 | 2013 | ||
(unaudited) | (unaudited) | ||
(a) | Event expenses | 28,232 | 36,184 |
(b) | Production and telecast expenses - Television series | 27,709 | 35,154 |
(c) | Publication expenses | 19,663 | 22,610 |
(d) | Franchisee commission | 4,852 | 5,859 |
(e) | Amortisation of film cost | 8,507 | 530 |
Total | 88,963 | 100,337 |
18. General and administrative expenses
Particulars | For the period ended 30 June | ||
2014 | 2013 | ||
(unaudited) | (unaudited) | ||
(a) | Lease expenses | 9,052 | 7,454 |
(b) | Repairs & Maintenance | 6,614 | 21,671 |
(c) | Insurance | 523 | 718 |
(d) | Electricity charges | 3,059 | 2,775 |
(e) | Audit fees | 2,299 | 2,310 |
(f) | Filing Charges | 9,328 | - |
(g) | Bank charges | 2,706 | 2,445 |
(h) | Bad debts | 7,229 | 15,017 |
(i) | Travelling and conveyance | 9,552 | 5,472 |
(j) | Professional charges | 9,994 | 50,142 |
(k) | Printing & Stationery | 1,387 | 1,509 |
(l) | Telephone, Courier & Postage | 6,616 | 6,416 |
(m) | Security charges | 1,104 | 665 |
(n) | Business promotion expenses | 15,139 | 3,577 |
(o) | Others | 1,182 | 2,191 |
Total | 85,784 | 122,362 |
19. Earnings / (loss) per share (EPS)
Particulars | For the period ended 30 June | ||
2014 | 2013 | ||
(unaudited) | (unaudited) | ||
(a) | Net income / (loss) | 5,123 | (51,403) |
(b) | Weighted average number of equity shares outstanding 4 | 41,646,160 | 40,898,619 |
Earnings / (loss) per share - basic and diluted | (0.0001) | (0.001) |
4 Refer Note No. 15, 'common stock' with respect to fresh issue of equity shares.
16 |
20. Related party disclosures
(a) Name of related party and relationship
(i) Key Management Personnel (‘KMP’)
(a) Mr. T V Mohan (formerly Known as V Venkatesan) - Chairman and Director
(b) Ms. Meera Nagarajan - President, CEO and Director
(c) Mr. Venkatesan Vijaya Bhaskar - CFO, Director, Treasurer and Director of technologies
(ii) Relatives of KMP
(a) Mr. Sridhar Kalyanasundaram
Transactions with related parties
Transactions during the year ending June 30
Particulars | KMP and Relative of KMP | Entity in which KMP has control | ||
2014 (Unaudited) | 2013 (Unaudited) | 2014 (Unaudited) | 2013 (Unaudited) | |
Transactions | ||||
Advances given for business purposes | 104,550 | 45,051 | - | - |
Settlement of advances given for business purposes | 53,993 | 7,902 | - | - |
Unsecured loans received | - | 65,289 | - | - |
Repayment of unsecured loans | 2,893 | 37,819 | - | - |
Professional charges Paid | - | - | - | - |
Closing balances | ||||
Unsecured Loans given | - | - | - | - |
Advances given for business purposes (debit balance) | 121,188 | 95,083 | - | - |
Unsecured loans received (credit balance) 5 | 288,789 | 387,924 | - | - |
5 Unsecured loans from related parties are repayable on demand.
21. Goodwill
Particulars | |
Goodwill acquired in new subsidiary 6 | 679,948 |
Add: Cumulative Translation adjustment | 7,006 |
Balance as at June 30, 2014 | 686,954 |
6 Goodwill arises in the process of acquiring KM Wedding Events Management Private Limited(formerly known as KM Matrimony Private Limited). In April 2013, the Company acquired 55.32% interest of KM Wedding Events Management Private Limited, India. As of June 30, 2014, 55.32% 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. The purchase price of USD 509,000 is allotted as cash & cash equivalent USD 22,141, Plant & Machinery USD 63,402, other assets USD 270,921 and for liabilities as USD (527,422) based on the estimated fair value on the date of acquisition. After allocation the goodwill is recorded as USD 679,948.
17 |
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 arose.
Impairment of Goodwill will be tested on annual basis at the end of the year.
22. Employee Benefits
Defined Benefit Plan
The liability recognised in the balance sheets as at June 30 is as follows. The obligations are unfunded as on the dates of balance sheets.
As at June 30 | |||
Particulars | 2014 (Unaudited)) | 2013 (Unaudited) | |
(a) | Gratuity liability recognised in the balance sheet | 14,545 | - |
Weighted average assumptions used to determine net gratuity cost and benefit obligations:
As at June 30 | |||
Particulars | 2014 (Unaudited) | 2013 (Unaudited) | |
(a) | Gratuity liability recognised in the balance sheet | 8.50% p.a. | 8.50% p.a. |
(b) | Long-term rate of compensation increase | 10.00% p.a. | 10.00% p.a. |
(c) | Rate of return on plan assets | N.A. | N.A. |
18 |
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 four months.
25. Risks and uncertainties
Credit risk
Credit risk arises from the possibility that customers may not be able to settle their obligations as agreed. Accounts receivable balances are typically unsecured and are derived from revenues earned from customers. The Company’s management reviews ageing analysis of outstanding accounts receivables and follows up on past due balances. There is no significant concentration of credit risk.
19 |
26. Commitments and contingencies
Statutory Dues
Penalties, if any, on account of delay in payment of statutory dues are unascertainable.
For and on behalf of the Board of Directors
of KM Wedding Events Management, Inc
Vijaya Bhaskar Venkatesan MEERA NAGARAJAN | ||
Director Managing Director | ||
Place : Chennai, Tamil Nadu, India | ||
Date : June 30, 2014 |
20 |
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 INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF THE COMPANY AND THE NOTES TO INTERIM 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 ‘Kalyana Malai’ 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 intend to lease and/or own wedding halls (physical infrastructures where a wedding is conducted, similar to banquet halls of hotels) and provide Wedding Services for the weddings conducted in these halls.
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 and respected brand name. We are also planning to expand our services in the U.S. during 2014. 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. Our TV show is a 30 minute matrimonial-related program produced by us which telecasts once a week by SUN TV. The TV program introduces profiles of individuals seeking to be matched and also incorporates an entertainment based “debate show” which covers various “topics of social impact” which are discussed and debated upon by professionals and experts.
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 2014), providing Wedding Services for weddings to be conducted in India by Indians in the U.S. (fiscal 2014), 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).
Results of Operations
Three Months Period Ended June 30, 2014 Compared to Three Months Ended June 30, 2013
Financial Performance of the Company from April 1, 2014 to June 30, 2014 is discussed and analyzed here. The current period performance has been compared with the performance of the Company from April 1, 2013 to June 30, 2013. For the purpose of comparison, conversion of INR to USD is done based on average exchange rate for the period for Income and Expenditure items and at the closing exchange rate for Balance Sheet items.
21 |
For the three months ended June 30, 2014, the Company earned $396,350 in revenues compared to $304,955 for the corresponding period in the previous year. The revenue grew by 30% against the corresponding period in the previous year.
In terms of revenue mix 68 % of the revenues were generated from Matrimonial Services (81% for the corresponding period in the previous year) and 32% from the Wedding Services (19% for the corresponding period in the previous year).
During the three months ended June 30, 2014, the Company incurred $361,055 of operating expenses compared to $364,643 for the corresponding period in the previous year, which included:
· Matrimonial service expenses of $88,963 (compared to $100,337 for the corresponding period in the previous year) which represents 33% of matrimonial revenues (down from 40% for corresponding period in the previous year);
· Wedding service expense of $97,520 (compared to $51,056 for the corresponding period in the previous year) which represents 78% of wedding services revenues (90% for the corresponding period in the previous year);
· General and administrative expense of $85,784 (compared to $122,362 for the corresponding period in the previous year) which represents 22% of income. This expenses reduced by 30% for the corresponding period in the previous year. The decrease is a result of high operating leverage;
· Personal expenses of $82,354 (compared to $82,613 for the corresponding period in the previous period) representing 21% of income (compared to 27% of income in the corresponding period in the previous year); and
· Depreciation and Amortization expenses of $6,434 ($8,275 for the corresponding period in the previous year).
For the three months ended June 30, 2014, the Company had an operating income of $35,295 (compared to a loss of $59,688 for the corresponding period in the previous year), a net income of $20,345 (compared to loss of $68,911 for the corresponding period in the previous year) and an earnings per share of $0.0001. The increase in our operating margins and net income was due to revenue growth, High Operating Leverage and the impact of the depreciation of the Indian rupee against the U.S. dollar.
Liquidity and Capital Resources
At June 30, 2014, the Company had cash equivalents of $98,773 compared to $88,616 at March 31, 2014. At June 30, 2014, the Company had a negative working capital (which included current portion of long-term debt) of $290,172 compared to a negative working capital of $306,585 at March 31, 2014.
At June 30, 2014, account payable and accrued liabilities relating to accrued interest expense, unpaid professional fees, and unpaid general expenditures was $146,971 compared to $121,324 at March 31, 2014, representing 21% increase. In addition the Company had:
· | Income tax and other statutory liabilities of $182,959 at June 30, 2014 compared to $135,485 at March 31, 2014, representing 35% increase; |
· | Short-term loans and current portion in long-term debt of $375,680 compared to $357,024 at March 31, 2014, representing an increase of 5%; |
· | Unsecured loans of $167,601 compared to $221,040 at March 31, 2014, representing a 24% reduction; |
· | Other current liabilities of $191,118 compared to $258,399 at March 31, 2014, representing a 26% reduction from the corresponding period in the previous year and |
· | Non-current liabilities of $70,972 compared to $71,953 at March 31, 2014, representing a reduction of 1% |
22 |
Cashflows from Operating Activities
During the three month period ended June 30, 2014, the Company generated $7,993 from operating activities compared to $137,085 used by operating activities during the corresponding period in the previous year. Improved revenues and operating effectiveness has enabled the company to get the operations generate cash positive during the period.
Cashflows from Investing Activities
During the period from April 1, 2014 to June 30, 2014, the Company used cash of $7,807 for investing activities compared to $367,644 cash used for investing activities in the corresponding period in the previous year.
Cashflows from Financing Activities
During the period from April 1, 2014 to June 30, 2014, the Company obtained cash of $17,090 from financing activities compared to $171,513 obtained in the corresponding period in the previous year).
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.
Future Liquidity Needs
At June 30, 2014, the Company had cash equivalents of $98,773 compared to $88,616 at March 31, 2014. At June 30, 2014, the Company had a negative working capital (which included current portion of long-term debt) of $290,172 compared to a negative working capital of $306,585 at March 31, 2014. On November 18, 2013, we filed a registration statement, number 333-192399, with the Securities and Exchange Commission to register an offering of 10,000,000 shares of our common stock, at $0.30 per share (the “Offering”). The registration statement was declared effective on March 11, 2014. While we believe that if all shares offered under the Offering are sold, the net proceeds should be sufficient to permit us to continue operations and meet our capital requirements for approximately twelve (12) months, there is no assurance that all shares, if any, will be sold. In addition, even if all of the shares are sold in the Offering, it is anticipated that we may need to If not all of the shares offered in the Offering are sold, we will need to obtain substantial additional funds much sooner to maintain, grow and expand our operations. Our established bank-financing arrangements will not be adequate. Therefore, it is likely that we would need to seek additional financing through subsequent future private sales of its debt or equity securities to fund its growth plans. These factors raise substantial doubt regarding our ability to continue as a going concern.
There can be no assurance, however, that such efforts can generate availability of additional funds when needed, or on terms acceptable to us if at all. Any such additional financing may result in significant dilution to existing stockholders. If adequate funds are not available, we may be required to curtail our expansion plans, which will adversely affect our revenue and profitability.
Brief Disclosure of Long Term Contractual Obligations
As at June 30, 2014, the Company has Long Term Debts in the form of Secured Loans against the respective assets/by way of assignment of the trade receivables of the Company and Capital Lease obligations secured against respective assets. The Total Long Term Debts as at June 30, 2014 is $19,299 and repayable in a period of five years or under:
Less Than One Year $NIL
One to Three Years $15,789
More than Three Years $3,510
Recent Accounting Pronouncements
As of June 30, 2014, there are no other recently issued accounting standards not yet adopted that would have a material effect on the Company’s consolidated financial statements.
23 |
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, 2014, there were no material changes in our internal control over financial reporting identified in connection with the evaluation performed during the fiscal year 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
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
24 |
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 (1) | |
101.SCH | XBRL Taxonomy Extension Schema (1) | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase (1) | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase (1) | |
101.LAB | XBRL Taxonomy Extension Label Linkbase (1) | |
101.FRE | XBRL Taxonomy Extension Presentation Linkbase (1) |
* Filed herewith.
(1) XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
25 |
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 6, 2014 | By: /s/ Meera Nagarajan |
Meera Nagarajan, Chief Executive Officer |
26 |