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.

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

 

KM WEDDING EVENTS MANAGEMENT, INC.

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

 

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.

 

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.

 

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.

 

 

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.

 

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.

 

 

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.

 

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.

 

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

 

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

 

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

 

 

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

 

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.

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)

 

 

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.

 

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.

 

 

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.

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.

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%;

	•	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

 

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.

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

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