ITEM
1. FINANCIAL STATEMENTS
KM
Wedding Events Management, Inc.
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Interim
Condensed Consolidated Balance Sheets
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(in
US Dollars $ unless otherwise stated)
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As
at June 30,
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As
at March 31,
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Notes
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2016
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2016
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(unaudited)
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ASSETS
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Current
assets:
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Cash
and cash equivalents
|
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3
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9,862
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13,250
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Accounts
receivable
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4
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448,173
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448,809
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Other
current assets
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5
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34,588
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103,128
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Total
current assets
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492,623
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565,187
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Non-current
assets:
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Property,
plant and equipment, net
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6
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94,951
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102,387
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Intangible
assets, net
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7
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10,175
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12,530
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Goodwill
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21
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762,235
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762,235
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Film
costs
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24
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2,834
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3,337
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Deferred
tax asset, net
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59,893
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61,032
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Other
non-current assets
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8
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54,797
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63,459
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Total
non-current assets
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984,885
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1,004,980
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Total
assets
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1,477,508
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1,570,167
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LIABILITIES
AND EQUITY
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Current
Liabilities:
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Accounts
payable and accrued liabilities
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9
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289,724
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270,380
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Statutory
liabilities
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10
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314,811
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284,554
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Short-term
loans & current portion of long term debt
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11
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222,563
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212,544
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Unsecured
loans from related parties, net of advances
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20
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150,833
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179,679
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Other
current liabilities
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13
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175,604
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174,375
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Total
current liabilities
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1,153,535
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1,121,532
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Non-current
liabilities:
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Long-term
debt
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12
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232,662
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237,086
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Other
non-current liabilities
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14
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17,155
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22,916
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Total
non-current liabilities
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249,817
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260,002
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Equity:
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Common stock par value
$ 0.001 (shares outstanding: 42,096,160 and 42,096,160 as at June 30, 2016 and March 31, 2016, respectively)
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15
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42,096
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42,096
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Additional
paid-in-Capital
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1,165,712
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1,165,712
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Accumulated
deficit
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(821,602
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)
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(749,919
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)
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Equity
Attributable to equity holders of the company
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386,206
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457,889
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Non-Controlling
Interest
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(312,050
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)
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(269,256
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)
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Total
equity
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74,156
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188,633
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Total
liabilities and equity
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1,477,508
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1,570,167
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The
accompanying notes are an integral part to these interim condensed financial statements.
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KM Wedding Events
Management, Inc.
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Interim Condensed Consolidated Statement of
Income
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(in US Dollars $ unless otherwise stated)
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For
the Three Months ended
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For
the Three Months ended
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Notes
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June
30,
2016
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June
30,
2015
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(unaudited)
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(unaudited)
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Revenues
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Matrimonial
service income
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16
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134,795
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154,571
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Wedding event management
income
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—
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39,456
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Wedding
infrastructure lease income
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7,708
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7,634
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Sale of Rights
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—
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13,894
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Total
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142,503
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215,555
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Costs
and expenses
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Matrimonial service
expenses
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17
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68,819
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65,411
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Wedding event management
expenses
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—
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51,600
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Wedding infrastructure
maintenance expenses
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3,585
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3,121
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Personnel costs
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37,255
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97,546
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General and administrative
expenses
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18
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113,964
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100,109
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Depreciation
and amortization
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7,841
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7,792
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Total
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231,464
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325,579
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Operating
Income / (loss)
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(88,961
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)
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(110,024
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)
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Other
income / (expenses)
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Foreign exchange gain
/ (loss)
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5,536
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5,363
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Miscellaneous income
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—
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—
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Interest Income
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—
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—
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Finance
charges
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(20,667
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)
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(20,244
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)
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Total
other income / (expenses), net
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(15,131
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)
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(14,881
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)
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Income
/ (loss) before income tax expense
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(104,092
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)
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(124,905
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)
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Income
taxes
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Provision for Income
taxes written back
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—
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—
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Deferred tax benefit
|
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|
—
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—
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Prior Period Taxes
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—
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—
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Current
Taxes
|
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|
|
—
|
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Net
income / (loss)
|
|
|
|
|
|
|
(104,092
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)
|
|
|
(124,905
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)
|
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|
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|
|
|
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Attributable
to:
|
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|
|
|
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Equity holders of the
company
|
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(65,625
|
)
|
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|
(97,216
|
)
|
Non-controlling
interest
|
|
|
|
|
|
|
(38,467
|
)
|
|
|
(27,689
|
)
|
Net
income / (loss)
|
|
|
|
|
|
|
(104,092
|
)
|
|
|
(124,905
|
)
|
Earnings / (loss) per
share - basic and diluted
|
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|
19
|
|
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|
(0
|
)
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|
(0
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)
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|
|
|
|
|
|
|
|
|
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|
|
The
accompanying notes are an integral part to these interim condensed financial statements.
|
KM
Wedding Events Management, Inc.
|
|
|
|
|
|
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|
Interim
Condensed Consolidated Statement of Changes in Equity
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(in
US Dollars $ unless otherwise stated)
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Number
of Shares
|
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|
Common
Stock
|
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Additional
Paid-in Capital
|
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|
Accumulated
Deficit
|
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|
|
Equity
Attributable to equity holders of the company
|
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|
Non-controlling
interest
|
|
|
|
Total
Equity
|
|
At
March 31, 2015
|
|
|
42,096,160
|
|
|
|
42,096
|
|
|
|
1,165,712
|
|
|
|
(228,981
|
)
|
|
|
978,827
|
|
|
|
37,080
|
|
|
|
1,015,907
|
|
Fresh issue of equity
shares
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Net
income / (loss) for the period [After adjusting Comprehensive Income/(Loss)]
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(96,996
|
)
|
|
|
(96,996
|
)
|
|
|
(27,532
|
)
|
|
|
(124,528
|
)
|
At
June 30, 2015 (unaudited)
|
|
|
42,096,160
|
|
|
|
42,096
|
|
|
|
1,165,712
|
|
|
|
(325,977
|
)
|
|
|
881,831
|
|
|
|
9,548
|
|
|
|
891,379
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
At
March 31, 2016
|
|
|
42,096,160
|
|
|
|
42,096
|
|
|
|
1,165,712
|
|
|
|
(749,919
|
)
|
|
|
457,889
|
|
|
|
(269,256
|
)
|
|
|
188,633
|
|
Net
income / (loss) for the period [After adjusting Comprehensive Income/(Loss)]
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(71,683
|
)
|
|
|
(71,683
|
)
|
|
|
(42,794
|
)
|
|
|
(114,447
|
)
|
As
at June 30, 2016 (unaudited)
|
|
|
42,096,160
|
|
|
|
42,096
|
|
|
|
1,165,712
|
|
|
|
(821,602
|
)
|
|
|
386,206
|
|
|
|
(312,050
|
)
|
|
|
74,156
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
June
30,
2016
|
|
|
|
June
30,
2015
|
|
|
|
|
(unaudited)
|
|
|
|
(unaudited)
|
|
Net
income / (loss)
|
|
|
(104,092
|
)
|
|
|
(124,905
|
)
|
Other
Comprehensive Loss
|
|
|
|
|
|
|
|
|
Foreign
Currency Translation Profit/(Loss)
|
|
|
(10,385
|
)
|
|
|
377
|
|
Total
Other Comprehensive Loss
|
|
|
(10,385
|
)
|
|
|
377
|
|
|
|
|
|
|
|
|
|
|
Attributable
to:
|
|
|
|
|
|
|
|
|
Equity
holders of the company
|
|
|
(6,058
|
)
|
|
|
220
|
|
Non-controlling
interest
|
|
|
(4,327
|
)
|
|
|
157
|
|
Comprehensive
Income/(loss)
|
|
|
(114,477
|
)
|
|
|
(124,528
|
)
|
|
|
|
|
|
|
|
|
|
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 Three Months ended
|
|
|
|
For
the Three Months ended
|
|
|
|
|
June
30, 2016
|
|
|
|
June
30, 2015
|
|
|
|
|
(Unaudited)
|
|
|
|
(Unaudited)
|
|
Cash
flows from operating activities
|
|
|
|
|
|
|
|
|
Net
income / (loss)
|
|
|
(104,092
|
)
|
|
|
(124,905
|
)
|
Adjustments
to reconcile net income to net cash
|
|
|
|
|
|
|
|
|
provided
by operating activities
|
|
|
|
|
|
|
|
|
Depreciation
and amortization
|
|
|
7,841
|
|
|
|
7,792
|
|
Unrealized
foreign exchange (gain) / loss
|
|
|
(5,332
|
)
|
|
|
(5,318
|
)
|
Bad
debts
|
|
|
—
|
|
|
|
2,853
|
|
Amortization
of film costs
|
|
|
4,737
|
|
|
|
9,320
|
|
Marketing
Charges - Shares issued as consideration
|
|
|
—
|
|
|
|
—
|
|
Deferred
tax benefit
|
|
|
—
|
|
|
|
—
|
|
Provision
for Income taxes written back
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Changes
in operating assets and liabilities
|
|
|
|
|
|
|
|
|
(Increase)
/ Decrease in accounts receivables
|
|
|
427
|
|
|
|
1,504
|
|
(Increase)
/ Decrease in other current assets
|
|
|
45,452
|
|
|
|
29,185
|
|
(Increase)
/ Decrease in film costs
|
|
|
(4,292
|
)
|
|
|
(27,914
|
)
|
(Increase)
/ Decrease in other non-current assets
|
|
|
7,548
|
|
|
|
890
|
|
Increase
/ (Decrease) in accounts payable
|
|
|
21,121
|
|
|
|
52,379
|
|
Increase
/ (Decrease) in income tax and other statutory liabilities
|
|
|
35,904
|
|
|
|
27,358
|
|
Increase
/ (Decrease) in other current liabilities
|
|
|
4,525
|
|
|
|
24,578
|
|
Increase
/ (Decrease) in other non-current liabilities
|
|
|
(5,384
|
)
|
|
|
715
|
|
Net
cash provided by (used in) operating activities
|
|
|
8,455
|
|
|
|
(1,563
|
)
|
|
|
|
|
|
|
|
|
|
Cash
flows from investing activities
|
|
|
|
|
|
|
|
|
Additions
to property, plant and equipment
|
|
|
(120
|
)
|
|
|
(1,342
|
)
|
Investments
in long-term investments
|
|
|
—
|
|
|
|
—
|
|
Advance
given for Investment
|
|
|
—
|
|
|
|
—
|
|
Net
cash provided by (used in) investing activities
|
|
|
(120
|
)
|
|
|
(1,342
|
)
|
|
|
|
|
|
|
|
|
|
Cash
flows from financing activities
|
|
|
|
|
|
|
|
|
Proceeds
from short term debts
|
|
|
—
|
|
|
|
9,603
|
|
Proceeds
from issue of Equity Shares
|
|
|
—
|
|
|
|
—
|
|
Proceeds
from / (repayment of) long term debts
|
|
|
(11,613
|
)
|
|
|
(6,756
|
)
|
Net
cash provided by (used in) financing activities
|
|
|
(11,613
|
)
|
|
|
2,847
|
|
Effect
of exchange rate changes on cash
|
|
|
(110
|
)
|
|
|
1,884
|
|
Net
increase in cash and cash equivalents
|
|
|
(3,388
|
)
|
|
|
(1,942
|
)
|
Cash
and cash equivalents, beginning of period
|
|
|
13,250
|
|
|
|
97,960
|
|
Cash
and cash equivalents, end of period
|
|
|
9,862
|
|
|
|
96,018
|
|
|
|
|
|
|
|
|
|
|
Supplementary
disclosures of cash flow information
|
|
|
|
|
|
|
|
|
Cash
paid during the year for:
|
|
|
|
|
|
|
|
|
Interest
paid
|
|
|
20,667
|
|
|
|
20,244
|
|
Income
taxes paid
|
|
|
10,996
|
|
|
|
1,198
|
|
Non-cash
items:
|
|
|
|
|
|
|
|
|
Allotment
of common stock
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
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 June 30, 2016, 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 $569,000 to acquire 2,841,398 number of Equity shares of KM Wedding Events Management Private Limited,
India. Subsequent to this investment, KM Wedding Events Management Private Limited, India has become subsidiary of this company.
The agreement for such acquisition was entered in the month of February 2013 and executed in the month of April 2013.
b.
Form and Content of the Financial Statements
The
Company maintains its books and records in accordance with generally accepted accounting policies in USA (“US GAAP”).
The accompanying financial statements were derived from the Company’s statutory books and records. The financial statements
are presented in US Dollars ($), 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 2016 audited financial statements, such as accounting policies.
Additionally, the company has provided disclosures where significant events have occurred subsequent to the issuance of its 2016
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 2016 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 three months ended June 30, 2016 may not be indicative of the results of operations for the full year
ending March 31, 2017. Subsequent events have been evaluated through August 22, 2016, the date these financial statements were
issued.
The
closing exchange rate as of June 30, 2016 and March 31, 2016 was 67.51 and 66.25 Indian Rupees to one US dollar, respectively.
The average exchange rate for the Three months ended June 30, 2016 was 66.88 Indian Rupees.
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.
KM
Wedding Events Management, Inc.
Notes
to Interim Condensed Consolidated financial statements
(in
US Dollars $ unless otherwise stated)
3.
Cash and cash equivalents
Cash
and cash equivalents as at June 30, 2016 comprises the following:
Particulars
|
|
As
at
June
30, 2016
(Unaudited)
|
|
As
at
March
31, 2016
|
(a)
Cash on hand
|
|
|
1,733
|
|
|
|
3,515
|
|
(b)
Balance with banks on current accounts
|
|
|
8,129
|
|
|
|
9,735
|
|
Total
|
|
|
9,862
|
|
|
|
13,250
|
|
4.
Accounts receivable
Accounts
receivable as at June 30, 2016 comprises the following:
Particulars
|
|
As
at
June
30, 2016 (Unaudited)
|
|
As
at
March
31, 2016
|
(a)
Customers (trade)
|
|
|
448,173
|
|
|
|
448,809
|
|
Total
|
|
|
448,173
|
|
|
|
448,809
|
|
5.
Other current assets
Other
current assets as at June 30, 2016 comprises the following:
Particulars
|
|
As
at
June
30,
2016 (unaudited)
|
|
As
at
March
31, 2016
|
(a)
Event advances
|
|
|
—
|
|
|
|
19
|
|
(b)
Staff advances
|
|
|
6,575
|
|
|
|
29,715
|
|
(c)
Loans and advances
|
|
|
9,732
|
|
|
|
51,949
|
|
(d)
Prepaid Expenses
|
|
|
—
|
|
|
|
147
|
|
(e)
Rental Advance
|
|
|
7,388
|
|
|
|
10,755
|
|
(f)
Advance tax (Net of Income tax)
|
|
|
10,893
|
|
|
|
10,543
|
|
Total
|
|
|
34,588
|
|
|
|
103,128
|
|
KM
Wedding Events Management, Inc.
Notes
to Interim Condensed Consolidated financial statements
(in
US Dollars $ unless otherwise stated)
6.
Property, plant and equipment, net
Property,
plant and equipment as at June 30, 2016 comprises the following:
Particulars
|
|
Gross
carrying value
|
|
Accumulated
depreciation
|
|
Net
carrying value
|
|
|
June
30, 2016 (Unaudited)
|
|
March
31, 2016
|
|
June
30, 2016 (Unaudited)
|
|
March
31, 2016
|
|
June
30, 2016 (Unaudited)
|
|
March
31, 2016
|
(a)
Vehicles
|
|
|
38,874
|
|
|
|
39,613
|
|
|
|
10,425
|
|
|
|
9,716
|
|
|
|
28,449
|
|
|
|
29,897
|
|
(b)
Computers & Peripherals
|
|
|
68,187
|
|
|
|
69,412
|
|
|
|
64,781
|
|
|
|
65,668
|
|
|
|
3,406
|
|
|
|
3,744
|
|
(c)
Furniture & Fixtures
|
|
|
13,138
|
|
|
|
13,388
|
|
|
|
7,585
|
|
|
|
7,392
|
|
|
|
5,553
|
|
|
|
5,996
|
|
(d)
Office Equipment
|
|
|
62,837
|
|
|
|
63,982
|
|
|
|
38,150
|
|
|
|
37,152
|
|
|
|
24,687
|
|
|
|
26,830
|
|
(e)
Leasehold improvements
|
|
|
74,407
|
|
|
|
75,822
|
|
|
|
48,335
|
|
|
|
47,344
|
|
|
|
26,072
|
|
|
|
28,478
|
|
(f)
Plant & Machinery
|
|
|
10,306
|
|
|
|
10,502
|
|
|
|
3,522
|
|
|
|
3,060
|
|
|
|
6,784
|
|
|
|
7,442
|
|
Total
|
|
|
267,749
|
|
|
|
272,719
|
|
|
|
172,798
|
|
|
|
170,332
|
|
|
|
94,951
|
|
|
|
102,387
|
|
Operating
leases
The
total amount of operating lease expenses is as follows:
Particulars
|
|
For
the Three Months Ended June 30, 2016 (unaudited)
|
|
For
the Three Months ended June 30, 2015 (unaudited)
|
Lease
Expenses
|
|
|
14,481
|
|
|
|
17,722
|
|
7.
Intangible assets, net
Intangible
assets as at June 30, 2016 comprise the following:
Particulars
|
|
Gross
carrying value
|
|
Accumulated
depreciation
|
|
Net
carrying value
|
|
|
June
30, 2016 (Unaudited)
|
|
March
31, 2016
|
|
June
30, 2015 (Unaudited)
|
|
March
31, 2016
|
|
June
30, 2016 (Unaudited)
|
|
March
31, 2016
|
(a)
Software
|
|
|
49,525
|
|
|
|
50,467
|
|
|
|
39,350
|
|
|
|
37,937
|
|
|
|
10,175
|
|
|
|
12,530
|
|
Total
|
|
|
49,525
|
|
|
|
50,467
|
|
|
|
39,350
|
|
|
|
37,937
|
|
|
|
10,175
|
|
|
|
12,530
|
|
KM
Wedding Events Management, Inc.
Notes
to Interim Condensed Consolidated financial statements
(in
US Dollars $ unless otherwise stated)
8.
Other non-current assets
Other
non-current assets as at June 30, 2016 comprises the following:
Particulars
|
|
As
at June 30, 2016
(Unaudited)
|
|
As
at March 31, 2016
|
(a)
Rental advance
|
|
|
—
|
|
|
|
—
|
|
(b)
Deposits
|
|
|
41,644
|
|
|
|
50,512
|
|
(c)
Software under application development stage
|
|
|
13,153
|
|
|
|
12,947
|
|
Total
|
|
|
54,797
|
|
|
|
63,459
|
|
9.
Accounts payable and accrued liabilities
Accounts
payable and accrued liabilities as at June 30,2016 comprises the following:
Particulars
|
|
As
at June 30, 2016
(Unaudited)
|
|
As
at March 31, 2016
|
(a)
Accounts payable
|
|
|
252,350
|
|
|
|
227,525
|
|
(b)
Salary payable
|
|
|
3,082
|
|
|
|
9,437
|
|
(c)
Current portion of provision for gratuity
|
|
|
2,264
|
|
|
|
2,307
|
|
(d)
General and administrative expenses payable
|
|
|
32,028
|
|
|
|
31,111
|
|
Total
|
|
|
289,724
|
|
|
|
270,380
|
|
10.
Statutory liabilities
Income
tax and other statutory liabilities as at June 30,2016 comprises the following:
Particulars
|
|
As
at June 30, 2016
(unaudited)
|
|
As
at March 31, 2016
|
(a)
Service tax
|
|
|
205,755
|
|
|
|
184,508
|
|
(b)
Provident fund
|
|
|
36,907
|
|
|
|
34,300
|
|
(c)
Employees state insurance
|
|
|
5,271
|
|
|
|
4,932
|
|
(d)
Professional
|
|
|
6,433
|
|
|
|
6,555
|
|
(e)
Tax Deducted at Source
|
|
|
60,445
|
|
|
|
54,259
|
|
(f)
Income tax (Net of Advance tax)
|
|
|
—
|
|
|
|
—
|
|
Total
|
|
|
314,811
|
|
|
|
284,554
|
|
KM
Wedding Events Management, Inc.
Notes
to Interim Condensed Consolidated financial statements
(in
US Dollars $ unless otherwise stated)
11.
Short term borrowings and long term debt
Short
term loans and borrowings as at June 30,2016 comprises the following:
Particulars
|
|
As
at June 30, 2016
(unaudited)
|
|
As
at March 31, 2016
|
(a)
Bank overdraft
*
|
|
|
149,341
|
|
|
|
156,678
|
|
(b)
Unsecured loan
|
|
|
49,326
|
|
|
|
27,774
|
|
(c)
Secured loan
|
|
|
—
|
|
|
|
—
|
|
(d)
Current portion of long-term debt
|
|
|
23,896
|
|
|
|
28,092
|
|
Total
|
|
|
222,563
|
|
|
|
212,544
|
|
*
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 June 30, 2016
(unaudited)
|
|
As
at March 31, 2016
|
(a)
Secured loan
1
|
|
|
242,522
|
|
|
|
249,347
|
|
(b)
Vehicle loans
2
|
|
|
14,036
|
|
|
|
15,831
|
|
|
|
|
256,558
|
|
|
|
265,178
|
|
(d)
Current portion of long-term debt
|
|
|
(23,896
|
)
|
|
|
(28,092
|
)
|
Total
|
|
|
232,662
|
|
|
|
237,086
|
|
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 $715,521. The company’s liability has been initially
recognized in the financial statements at $275,989 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 June 30, 2016 and March 31, 2016 towards this debt arrangement is $625,127 and $643,177 respectively. The carrying
amount of the company’s liability as at June 30, 2016 and March 31, 2016 is $242,522 and $249,347 respectively.
2
The interest rates of these Vehicle loans range from 11 % to 16 %. These loans are repayable in monthly installments 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 June 30, 2016 is as follows:
Particulars
|
|
As
at June 30, 2016
(Unaudited)
|
|
2017
|
|
|
|
23,896
|
|
|
2018
|
|
|
|
25,586
|
|
|
2019
|
|
|
|
27,090
|
|
|
2020
|
|
|
|
25,605
|
|
|
2021
|
|
|
|
28,597
|
|
|
Thereafter
|
|
|
|
125,784
|
|
|
Total
long term debt
|
|
|
|
256,558
|
|
KM
Wedding Events Management, Inc.
Notes
to Interim Condensed Consolidated financial statements
(in
US Dollars $ unless otherwise stated)
13.
Other current liabilities
Other
current liabilities as at June 30, 2016 comprises the following:
Particulars
|
|
As
at June 30, 2016
(unaudited)
|
|
As
at March 31, 2016
|
(a)
Unearned revenue (i.e. billings in excess of revenue)
|
|
|
74,158
|
|
|
|
69,985
|
|
(b)
Advances received
|
|
|
101,446
|
|
|
|
104,390
|
|
Total
|
|
|
175,604
|
|
|
|
174,375
|
|
14.
Other non-current liabilities
Other
non-current liabilities as at June 30, 2016 comprises the following:
Particulars
|
|
As
at June 30, 2016
(unaudited)
|
|
As
at March 31, 2016
|
(a)
Trade Deposits
|
|
|
—
|
|
|
|
5,435
|
|
(b)
Provision for gratuity
|
|
|
17,155
|
|
|
|
17,481
|
|
Total
|
|
|
17,155
|
|
|
|
22,916
|
|
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,
2016 and March 31, 2016. The issued, subscribed and paid-up equity share capital (number of shares) of the company is 42,096,160
shares as at June 30, 2016 and as at March 31, 2016.
(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 preferred 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, 2016. The issued, subscribed and paid-up Preference share capital is Nil as at June 30, 2016.
KM
Wedding Events Management, Inc.
Notes
to Interim Condensed Consolidated financial statements
(in
US Dollars $ unless otherwise stated)
16.
Matrimonial service income
Particulars
|
|
For
the three months ended
|
|
|
June
30, 2016
|
|
June
30, 2015
|
(a)
Profile Registration and Event Incomes
|
|
|
108,732
|
|
|
|
127,901
|
|
(b)
Sponsorship Income and Advertisement Income
|
|
|
4,478
|
|
|
|
5,129
|
|
(c)
Sale of space or time slot - Television series/ Television Rights
|
|
|
21,585
|
|
|
|
21,541
|
|
(d)
Sale of products (magazines)
|
|
|
—
|
|
|
|
—
|
|
(e)
Franchisee License
|
|
|
—
|
|
|
|
—
|
|
Total
|
|
|
134,795
|
|
|
|
154,571
|
|
17.
Matrimonial service expenses
Particulars
|
|
For
the three months ended
|
|
|
June
30, 2016
|
|
June
30, 2015
|
(a)
Event expenses
|
|
|
17,855
|
|
|
|
21,095
|
|
(b)
Production and telecast expenses - television series
|
|
|
21,915
|
|
|
|
21,051
|
|
(c)
Publication expenses
|
|
|
4,472
|
|
|
|
9,909
|
|
(d)
Subcontracting charges
|
|
|
19,840
|
|
|
|
—
|
|
(e)
ARC commission
|
|
|
—
|
|
|
|
4,036
|
|
(f)
Amortization of film costs
|
|
|
4,737
|
|
|
|
9,320
|
|
Total
|
|
|
68,819
|
|
|
|
65,411
|
|
18.
General and administrative expenses
Particulars
|
|
For
the three months ended
|
|
|
June
30, 2016
|
|
June
30, 2015
|
(a)
Lease expenses
|
|
|
14,481
|
|
|
|
18,019
|
|
(b)
Repaid & Maintenance
|
|
|
3,688
|
|
|
|
3,899
|
|
(c)
Insurance
|
|
|
145
|
|
|
|
179
|
|
(d)
Electricity charges
|
|
|
4,246
|
|
|
|
3,198
|
|
(e)
Audit fees
|
|
|
2,056
|
|
|
|
2,170
|
|
(f)
Filing charges
|
|
|
—
|
|
|
|
300
|
|
(g)
Bank charges
|
|
|
4,402
|
|
|
|
3,156
|
|
(h)
Bad debts
|
|
|
—
|
|
|
|
2,853
|
|
(i)
Travelling and conveyance
|
|
|
2,091
|
|
|
|
706
|
|
(j)
Professional charges
|
|
|
12,451
|
|
|
|
17,500
|
|
(k)
Printing & Stationary
|
|
|
1,117
|
|
|
|
1,141
|
|
(l)
Telephone, Courier & Postage
|
|
|
3,908
|
|
|
|
4,468
|
|
(m)
Security charges
|
|
|
987
|
|
|
|
1,030
|
|
(n)
Business promotion expenses
|
|
|
667
|
|
|
|
38,828
|
|
(o)
Rates and taxes
|
|
|
222
|
|
|
|
—
|
|
(p)
Others
|
|
|
3,781
|
|
|
|
2,662
|
|
(q)
Advances Written off
|
|
|
59,722
|
|
|
|
—
|
|
Total
|
|
|
113,964
|
|
|
|
100,109
|
|
KM
Wedding Events Management, Inc.
Notes
to Interim Condensed Consolidated financial statements
(in
US Dollars $ unless otherwise stated)
19.
Earnings / (loss) per share (EPS)
Particulars
|
|
For
the three months ended
|
|
|
June
30, 2016
|
|
June
30, 2015
|
(a)
Net income / (loss)
|
|
|
(65,625
|
)
|
|
|
(97,216
|
)
|
(b) Weighted average
number of equity shares outstanding
|
|
|
42,096,160
|
|
|
|
42,096,160
|
|
Earnings
/ (loss) per share - basic and diluted
|
|
|
(0.0016
|
)
|
|
|
(0.0023
|
)
|
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
(iii)
Affiliated Entity
(a)
Naaga Entertainment Media Private Limited (Company Under Common Control)
Particulars
|
|
KMP
and Relative of KMP
|
|
Affiliated
Entity
|
|
|
As
at June 30,
|
|
As
at June 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
(unaudited)
|
|
(unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
Transactions
|
|
|
|
|
|
|
|
|
Advances
given for business purposes
|
|
|
55,968
|
|
|
|
21,412
|
|
|
|
—
|
|
|
|
—
|
|
Settlement
of advances given for business purposes /advance received form the director
|
|
|
30,476
|
|
|
|
41,872
|
|
|
|
—
|
|
|
|
—
|
|
Repayment
of unsecured loans
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Sale
of Television Rights
|
|
|
|
|
|
|
|
|
|
|
1,175
|
|
|
|
—
|
|
Closing
balances
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advances
received from Directors (credit bal.)
|
|
|
56,212
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
Advances
given for business purposes (debit bal.)
|
|
|
94,622
|
|
|
|
134,801
|
|
|
|
|
|
|
|
|
|
Unsecured
loans received (credit bal.)
|
|
|
—
|
|
|
|
239,393
|
|
|
|
|
|
|
|
|
|
21.
Goodwill
Particulars
|
|
|
|
|
|
|
|
Goodwill
1
|
|
|
762,235
|
|
Add:
Cumulative Translation adjustment
|
|
|
—
|
|
Balance
as at June 30, 2016
|
|
|
762,235
|
|
1
Goodwill
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 June 30, 2016, 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 that has arisen.
Impairment
of Goodwill will be tested on annual basis at the end of the year.
KM
Wedding Events Management, Inc.
Notes
to Interim Condensed Consolidated financial statements
(in
US Dollars $ unless otherwise stated)
22.
Employee Benefits
Defined
Benefit Plan
The
liability recognized in the balance sheets as at June 30, 2016 is as follows. The obligations are unfunded as on the dates of
balance sheets.
Particulars
|
|
As
at
|
|
|
June
30, 2016
(unaudited)
|
|
March
31,
2016
|
(a)
Gratuity liability recognized in the balance sheet
|
|
|
19,419
|
|
|
|
19,788
|
|
Weighted
average assumptions used to determine net gratuity cost and benefit obligations:
Particulars
|
|
|
For
the Three months ended June 30,
|
|
|
|
|
2016
|
|
|
|
2015
|
|
|
|
|
(unaudited)
|
|
|
|
(unaudited)
|
|
(a) Discount
rate
|
|
|
7.80%p.a.
|
|
|
|
7.80%p.a.
|
|
(b) Long-term rate
of compensation increase
|
|
|
7.50%p.a.
|
|
|
|
7.50%p.a.
|
|
(c)
Rate of return on plan assets
|
|
|
N.A.
|
|
|
|
N.A.
|
|
23.
Going Concern
The
financial statements have been prepared on the basis that the company is a going concern and 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 in the fiscal year 2016-17.
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 include Matrimonial
(Matchmaking) Services (“Matrimonial Services”) and Wedding Services (until June 30, 2015). Considering various business
related and 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 Wedding Services market because of our early presence in
this market since 2004. We have conducted promotional events across the U.S.to capture the market potential. We are continuing
our efforts to expand our presence in the US. Our target customers include the Indian high-income group, higher middle-income
group, and other affluent individuals both in the U.S. and India. This segment, being upwardly mobile and comfort and service
focused, is the right target group for our business strategy.
We,
through our subsidiary KM India, have been servicing the Indian Diaspora in the U.S. through our website since 2004 which was
followed up by Community Meets (events focused on bringing together individuals who are seeking a life partner and who share similar
backgrounds (e.g., profession, socio-economic background, religion, etc.) conducted during the fiscal year 2011 in 5 cities (New
York City, South Windsor (Connecticut), Boston, Houston and San Antonio) which was attended by approximately 1,200 prospective
matrimonial customers. In October 2013, we also filmed for SUN TV across 6 different US cities (New York, South Windsor Connecticut),
New Brunswick, San Jose, Dallas and Houston), which was attended by over 5,400 South Indian community members.
Based
on the experience gained from the above activities, we believe that there is a demand and need in the Indian Diaspora in the U.S.
for our Matrimonial 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 2016), 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 2017-18).
Comparison
of Three
Months Ended June 30, 2016 and Three Months Ended June 30, 2015
Results
of Operations
Our
financial performance for the three months ended June 30, 2016 compared to the three months ended June 30, 2015 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 June 30, 2016, the Company generated revenue of $142,503 compared to $215,555 for the corresponding period
in the previous year.
In
terms of revenue mix 95% of the revenues were generated from Matrimonial Services (72% for the corresponding three month period
in the previous year); Nil from the Wedding Services (18% for the corresponding three month period in the previous year) and 5%
of the revenues were generated from wedding infrastructure leasing services (4% for the corresponding three month period in the
previous year).
During
the three month period ended June 30, 2016, the Company incurred $231,464 of operating expenses compared to $325,579 for the corresponding
three month period in the previous year, which included:
|
•
|
Matrimonial Service
expenses of $68,819 compared to $65,411 for the corresponding three month period in the previous year, which represents 48%
of revenues compared to 30% for the corresponding three month period in the previous year..
|
|
|
|
|
•
|
General and Administrative
expense of $113,964 ($100,109 for the corresponding three month period in the previous year) which represents 80% of revenues
compared to 46% for the corresponding three month period in the previous year.
|
|
|
|
|
•
|
Personnel expenses
of $37,255 ($97,546 for the corresponding three month period in the previous year) representing 26% of revenues compared to
45% of revenues in the corresponding three month period in the previous year; and
|
|
|
|
|
•
|
Depreciation and
Amortization expenses of $7,841 ($7,792 for the corresponding three month period in the previous year), representing
5% of revenues compared to 4% for the corresponding three month period in the previous year.
|
For
the three months ended June 30, 2016, the Company had operating loss of $88,961 compared to operating loss of $110,024 for the
corresponding period in the previous year. In addition, for the three month ended June 30, 2016, the Company had a net loss of
$104,092 compared to net loss of $124,905 for the corresponding three month period in the previous year).
Liquidity
and Capital Resources
At
June 30, 2016, the Company had cash equivalents of $9,862 (compared to cash equivalents of $13,250 at March 31, 2016) and accumulated
deficit of $821,602 (compared to $749,919 at March 31, 2016). At June 30, 2016, the Company had a working capital deficit (including
current portion of long-term debt) of $660,912 compared to working capital deficit of $556,345 at March 31, 2016, resulting from:
|
•
|
Accounts Receivable
of $448,173 at June 30, 2016 compared to $448,809 at March 31, 2016, which represents a 0.14% decrease;
|
|
|
|
|
•
|
Account Payable
and accrued liabilities relating to accrued interest expense, unpaid professional fees, and unpaid general expenditures of
$289,724 at June 30, 2016 compared to $270,380 at March 31, 2016, representing 7% increase;
|
|
|
|
|
•
|
Statutory liabilities
of $314,811 at June 30, 2016 compared to $284,554 at March 31, 2016, representing 11% increase;
|
|
|
|
|
•
|
Short-term loans
and current portion in long-term debt of $222,563 at June 30, 2016 compared to $212,544 at March 31, 2016, representing an
increase of 5%;
|
|
•
|
Unsecured loans
of $150,833 at June 30, 2016 compared to $179,679 at March 31, 2016, representing a 16% decrease;
|
|
|
|
|
•
|
Other current liabilities
of $175,604 at June 30, 2016 compared to $174,375 at March 31, 2016, representing a 1% increase; and
|
|
|
|
|
•
|
Non-current liabilities
of $249,817 at June 30, 2016 compared to $260,002 at March 31, 2016, representing a reduction of 4%.
|
Cash
flows from Operating Activities
During
the three month period ended June 30, 2016, net cash provided by operating activities was $8,455 compared to net cash used in
operating activities of $1,563 during the corresponding period in the previous year.
Cash
flows from Investing Activities
During
the three month period ended June 30, 2016, net cash used in investing activities was $120 compared to net cash used in investing
activities of $1,342 for the corresponding period in the previous year.
Cash
flows from Financing Activities
During
the three month period ended June 30, 2016, net cash used in financing activities was $11,613 compared to net cash provided by
financing activities of $2,847 for the corresponding period in the previous year.
Future
Capital Needs
At
June 30, 2016, our working capital deficit was $660,912 and we had $9,862 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
of June 30, 2016, the Company has long term debts in the form of secured loans amounting to $256,558 and repayable as under:
Less
Than One Year
|
|
$
|
23,896
|
|
One
to Three Years
|
|
$
|
78,281
|
|
More
than Three Years
|
|
$
|
154,381
|
|
Recent
Accounting Pronouncements
As
of June 30, 2016, 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.