SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM S-1/A

Amendment No. 2 

 

REGISTRATION STATEMENT

UNDER THE SECURITIES ACT OF 1933

 

Commission File Number: 333-192399

 

 

KM WEDDING EVENTS MANAGEMENT, INC.

(Exact name of registrant as specified in its charter)

 

Delaware (State or other jurisdiction of incorporation or organization)

7299 (Primary Standard Industrial Classification Code Number)

46-1290754 (I.R.S. Employer Identification Number)

 

11501 Dublin Blvd., Suite 200

Dublin, CA 94568

Phone: (925) 891-8029

Fax: (925) 891-8028

 

(Address, including zip code, and telephone number, including

area code, of registrant’s principal executive offices)

 

Paracorp Corporation

2140 South DuPont Highway

Camden, DE 19934

 

(Name, address, including zip code, and telephone number,

including area code, of agent for service)

 

From time to time after the effective date of this Registration Statement.

(Approximate date of commencement of proposed sale to the public)

 

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☑ .  

 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act Registration Statement number of the earlier effective Registration Statement for the same offering.☐ .

 

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act Registration Statement number of the earlier effective Registration Statement for the same offering.☐

 

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act Registration Statement number of the earlier effective Registration Statement for the same offering. .☐

 

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 the 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 ☑

 

CALCULATION OF REGISTRATION FEE 

 

Title of Each Class of Securities to be Registered	Amount to be Registered (1)	Maximum Offering Price Per Share	Maximum Aggregate Offering Price  (2)	Amount of Registration Fee (2)
Common Stock, $0.001 par value per share	10,000,000 (3)	$0.30	$3,000,000	$386.00
Common Stock, $0.001 par value per share	7,912,660 (4)	$0.30	$2,373,798	$305.00

 

(1)

In the event of a stock split, stock dividend or similar transaction involving the common shares of the Registrant, in order to prevent dilution, the number of shares of common stock registered shall be automatically increased to cover additional shares in accordance with Rule 416(a) under the United States Securities Act of 1933, as amended (the “Securities Act”).

(2)

Estimated solely for the purpose of calculating the registration fee under Rule 457(a) and (o) of the Securities Act.

(3)

Direct Public Offering.

(4)

Selling Security Holders. This Registration Statement also covers the resale under a separate resale prospectus (the “Resale Prospectus”) by Selling Shareholders of the Registrant of up to 7,912,660 ordinary shares previously issued to the Selling Shareholders as named in the Resale Prospectus.

 

The Registrant hereby amends this Registration Statement (the “Registration Statement”) on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

Subject to completion, dated January 16, 2014

EXPLANATORY NOTE

 

This Registration Statement contains two prospectuses, as set forth below.

 

·

Public Offering Prospectus. A prospectus regarding our offering of up to 10,000,000 shares of our Common Stock in a direct public offering, without any involvement of underwriters or broker-dealers (the “Public Offering Prospectus”). Should all shares being offered by the Company hereunder be sold, the Company would receive an aggregate of $3,000,000. The offering price is $0.30 per share for newly issued shares.

 

·

Resale Prospectus. A prospectus to be used for the resale by selling shareholders (the “Selling Shareholders”)of up to 7,912,660 shares of the Registrant’s common stock (the “Resale Prospectus”). The offering price is a fixed price of $0.30 per share for shares being sold by current shareholders.

 

The Resale Prospectus is substantively identical to the Public Offering Prospectus, except for the following principal points:

 

·

they contain different outside and inside front covers;

·

they contain different Offering sections in the Prospectus Summary section beginning on page 7;

·

they contain different Use of Proceeds sections on page 18;

·

they contain different Plan of Distribution sections on page 19;

·

the Dilution section is deleted from the Resale Prospectus;

·

a Selling Security Holders section is included in the Resale Prospectus beginning on page 110;

·

references in the Public Offering Prospectus to the Resale Prospectus will be deleted from the Resale Prospectus;

·

they contain different outside back covers.

 

The Registrant has included in this Registration Statement, after the financial statements, a set of alternate pages to reflect the foregoing differences of the Resale Prospectus as compared to the Public Offering Prospectus.

 

The information in this prospectus is not complete and may be changed. We may not sell these securities until the Registration Statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where an offer or sale is not permitted.

 

PRELIMINARY PROSPECTUS

 

KM WEDDING EVENTS MANAGEMENT, INC.

11501 Dublin Blvd., Suite 200

Dublin, CA 94568

Phone: (925) 891-8029

Fax: (925) 891-8028

 

PUBLIC OFFERING: 10,000,000 SHARES OF COMMON STOCK

RESALE OFFERING: 7,912,660 SHARES OF COMMON STOCK 

 

This Registration Statement contains two prospectuses regarding our Public Offering of 10,000,000 shares of Common Stock of KM Wedding Events Management, Inc. and our Resale Offering by existing shareholders of 7,912,660 shares of Common Stock of the Company.

 

Under our Public Offering (the “Offering”), we are offering for sale a total of 10,000,000 shares of Common Stock at a fixed price of $0.30 per share for the duration of this Offering. There is no minimum number of shares that must be sold by us for the Offering to proceed, and we will retain the proceeds from the sale of any of the offered shares. The Offering is being conducted on a self-underwritten, best efforts basis, which means our Officers and Directors, will attempt to sell the shares directly to friends, family members and business acquaintances. Our Officers and Directors will not receive commission or any other remuneration any such sales. In offering the securities on our behalf, our Officers and Directors will rely on the safe harbor from broker-dealer registration set out in Rule 3a4-1 under the Securities and Exchange Act of 1934. We are an “emerging growth company” under applicable Securities and Exchange Commission rules and will be subject to reduced public company reporting requirements.

 

The shares will be offered for sale at a fixed price of $0.30 per share for a period of one hundred and eighty (180) days from the effective date of this prospectus, unless extended by our Board of Directors for an additional 90 days. If all of the shares offered by us are purchased, the gross proceeds to us will be $3,000,000.  However, since the Offering is being conducted on a “best-efforts” basis, there is no minimum number of shares that must be sold, meaning the Company shall retain any proceeds from the sale of the shares sold hereunder. Accordingly, all funds raised hereunder will become immediately available to the Company and will be used in accordance with the Company’s intended “Use of Proceeds” as set forth herein, investors are advised that they will not be entitled to a refund and could lose their entire investment.

 

Under the Resale Offering, existing shareholders of the Company are offering for sale a total of 7,912,660 shares of Common Stock of the Company at a fixed price of $0.30 per share until our shares are quoted on the OTC Bulletin Board and thereafter at prevailing market prices or privately negotiated prices. Prior to being quoted on the OTCBB, the Selling Shareholders may sell their shares in private transactions to other individuals. If all of the shares offered by the Selling Shareholders under the Resale Prospectus are purchased, the gross proceeds will be $2,373,798. The Company will not receive any proceeds from the resale of shares by the Selling Shareholders. The Selling Shareholders will receive all of the net proceeds from the resale of the shares. 

 

		Type of Offering		Offering Price to the Public Per Share				Commissions		Net Proceeds to Company After Offering Expenses (10% of Shares Sold)				Net Proceeds to Company After Offering Expenses (50% of Shares Sold)				Net Proceeds to Company After Offering Expenses (100% of Shares Sold)
Common Stock		Public Offering		$	0.30			Not Applicable		$	215,000			$	1,415,000			$	2,915,000
Common Stock		Resale Offering		$	0.30			Not Applicable			Not Applicable				Not Applicable				Not Applicable
Total				$	0.30			Not Applicable		$	215,000			$	1,415,000			$	2,915,000

  

 

There currently is no market for our securities and a public market may never develop, or, if any market does develop, it may not be sustained. Our Common Stock is not traded on any exchange or on the over-the-counter market. There can be no assurance that our Common Stock will ever be quoted on a stock exchange or a quotation service or that any market for our stock will develop.

 

THE PURCHASE OF THE SECURITIES OFFERED THROUGH THE PUBLIC OFFERING PROSPECTUS AND RESALE PROSPECTUS INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY READ THE ENTIRE PROSPECTUSES, INCLUDING THE SECTION ENTITLED “RISK FACTORS” BEGINNING ON PAGE 11 HEREOF BEFORE BUYING ANY SHARES OF KM WEDDING EVENTS MANAGEMENT, INC.’S COMMON STOCK.

 

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

 

The Date of this prospectus is January 16, 2014.

 

TABLE OF CONTENTS

 

	Page
Prospectus Summary	7
The Offering	9
Risk Factors	11
Determination of Offering Price	18
Use of Proceeds	18
Plan of Distribution; Terms of the Offering	19
Dilution	21
Description of Property	22
Description of Securities	22
Description of Business	24
Management’s Discussion and Analysis	31
Directors, Executive Officers, Promoters and Control Persons	35
Executive Compensation	36
Security Ownership of Certain Beneficial Owners and Management	37
Certain Relationships and Related Transactions	38
Legal Matters	38
Experts	38
Commission Position on Indemnification for Securities Act Liabilities	39
Where You Can Find More Information	39
Index to Financial Statements	40

 

 

You should rely only on the information contained or incorporated by reference to this prospectus in deciding whether to purchase our Common Stock. We have not authorized anyone to provide you with information different from that contained in this prospectus. Under no circumstances should the delivery to you of this prospectus or any sale made pursuant to this prospectus create any implication that the information contained in this prospectus is correct as of any time after the date of this prospectus. To the extent that any facts or events arising after the date of this prospectus, individually or in the aggregate, represent a fundamental change in the information presented in this prospectus, this prospectus will be updated to the extent required by law.

 

PROSPECTUS SUMMARY

 

The following summary highlights material information contained in this prospectus. This summary does not contain all of the information you should consider before investing in the securities. Before making an investment decision, you should read the entire prospectus carefully, including the risk factors section, the financial statements and the notes to the financial statements. You should also review the other available information referred to in the section entitled “Where You Can Find More Information” in this prospectus and any amendment or supplement hereto.

 

Company Overview

 

KM Wedding Events Management, Inc. (the “Company” or “KM”) was incorporated in the State of Delaware on October 24, 2012.

 

On February 14, 2013, KM entered into a Stock Purchase Agreement with KM Matrimony Pvt Ltd, a company incorporated under the 1956 Companies Act of India (“KM India”), pursuant to which KM agreed to purchase ten million (10,000,000) shares of KM India’s common stock at a price of 11 Indian Rupees (approximately $0.21 USD) per share for an aggregate purchase price of up to two million one hundred thousand dollars ($2,100,000 USD) dollars. As of January 16, 2014, pursuant to the above agreement, KM has purchased 1,393,127 shares at 11 Rupees per share ($0.201 USD at the time of the sale) in KM India on April 3, 2013 for $280,000 USD. A true and correct copy of the Stock Purchase Agreement is attached hereto as Exhibit 10.5 and is incorporated herein by reference.

 

On February 14, 2013, KM entered into a Stock Purchase Agreement with the shareholders of KM India, comprised of Mr. Venkatesan Vaidhyanathan, Mrs. Meera Nagarajan, Mr. Sridhar Kalyanasundaram, Mr. Vijaya Bhaskar Venkatesan and Mrs. Nithya Vijaya Baskar, pursuant to which KM shall purchase Three Million One Hundred and Fifty Thousand (3,150,000) shares of KM India’s common stock from Mr. Venkatesan Vaidhyanathan, Mrs. Meera Nagarajan, Mr. Sridhar Kalyanasundaram, Mr. Vijaya Bhaskar Venkatesan and Mrs. Nithya Vijaya Baskar payable in two tranches as follows: (i) Tranche A: One Million One Hundred and Fifty Thousand (1,150,000) shares of KM India’s common stock at a purchase price of 11 Indian Rupees ($0.21 USD) per share (“Tranche A”); and, (ii) Tranche B: Two Million (2,000,000) shares of KM India’s common stock at a purchase price equal to the fair market value of KM India’s shares at the time of purchase (“Tranche B”). As of January 16, 2014, KM has purchased 1,120,018 shares in KM India on April 26, 2013 from Tranche A for an aggregate of $229,000 USD from two of the shareholders of KM India viz. Mr. Venkatesan Vaidhyanathan (562,455 shares for $115,000 USD) and Mrs. Meera Nagarajan (557,564 shares for $114,000 USD). The remaining Tranche A shares and the Tranche B shares have to be sold within 3 years from February 14, 2013. A true and correct copy of the Stock Purchase Agreement is attached hereto as Exhibit 10.6 and is incorporated herein by reference. 

 

As a result of the Stock Purchase Agreements referenced above, KM now carries on the business of KM India as its primary business and KM India is a subsidiary of KM. KM currently holds 55.32% of KM India.

 

KM India has been involved in the wedding services industry in South India since 2004. KM is the brand, which is a short form for ‘Kalyana Malai’ meaning ‘Wedding Garland’ in South Indian language. The services offered by KM India include Matrimonial (Matchmaking) Services and Wedding Services. Unless otherwise specified, KM and KM India shall hereinafter be collectively referred to as “KM” or the “Company”.

 

KM’s Matrimonial Services include matchmaking and partner identification, through multiple delivery channels viz. print and visual media, website, physical centers and events. The Wedding Services of KM covers 15 different services, including food and beverages, guest services, decorations, event planning and event management. In order to increase the Wedding Services business, KM intends to lease and/or own wedding halls (physical infrastructures where a wedding is conducted, similar to banquet halls of hotels) and provide Wedding Services for the weddings conducted in these halls.

 

KM currently focuses on the geographic locations of Tamil Nadu and Andhra Pradesh (two of the Southern States in India). We believe that the Company is well positioned to exploit the potential of the Wedding Services market because of its presence in this market since 2004 and respected brand name. The Company is also planning to expand its services in the United States during 2014. KM’s 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 the business positioning of KM.

 

KM India has been servicing the Indian Diaspora in the United States through its 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 & San Antonio) which was attended by around 1,200 prospective matrimonial customers. In October 2013, KM India 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. KM’s TV show is a 30 minute matrimonial-related program produced by KM and telecast once a week by Sun TV. The TV program introduces profiles of individuals seeking to be matched and also incorporates an entertainment based “debate show” which covers various “topics of social impact” which are discussed and debated upon by professionals & experts.

 

Based on the experience gained from the above activities, KM believes that the Indian Diaspora in the United States presents a lucrative market that requires Matrimonial and Wedding Services offered by KM but also requires a customized and focused approach for exploiting the same. The plan for exploring this business opportunity includes setting up offices in the U.S. (fiscal 2014), providing Wedding Services for weddings to be conducted in India by Indians in the U.S. (fiscal 2014), launching a customized website for Matrimonial Services in the U.S. market (fiscal 2015) and providing Wedding Services for conducting weddings locally in the United States (fiscal 2016-17). 

 

We are an “emerging growth company” within the meaning of the federal securities laws. For as long as we are an emerging growth company, we will not be required to comply with the requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, the reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and the exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We intend to take advantage of these reporting exemptions until we are no longer an emerging growth company. For a description of the qualifications and other requirements applicable to emerging growth companies and certain elections that we have made due to our status as an emerging growth company, see “We are an “Emerging Growth Company” and we cannot be certain if the reduced disclosure requirements applicable to Emerging Growth Companies will make our Common Stock less attractive to Investors” on Page 12 of this prospectus.

 

SUMMARY OF THIS OFFERING

 

The Issuer	KM Wedding Events Management, Inc.
Securities being offered	Up to 10,000,000 shares of Common Stock, our Common Stock is described in further detail in the section of this prospectus titled “DESCRIPTION OF SECURITIES – Common Stock.”
Offering Type	The Offering is being conducted on a self-underwritten, best efforts basis, there is no minimum number of shares that must be sold by us for the Offering to proceed, and we will retain the proceeds from the sale of any of the offered shares.
Per Share Price	$0.30
No Revocation	Once you submit a Subscription Agreement and the Company accepts it, you may not revoke or change your subscription or request a refund of monies paid. All accepted subscriptions are irrevocable, even if you subsequently learn information about us that you consider to be materially unfavorable.
No Public Market	There is no public market for our Common Stock. We cannot give any assurance that the shares being offered will have a market value, or that they can be resold at the offered price if and when an active secondary market might develop, or that a public market for our securities may be sustained even if developed. The absence of a public market for our stock will make it difficult to sell your shares.   We intend to apply to the OTCBB, through a market maker that is a licensed broker dealer, to allow the trading of our Common Stock upon our becoming a reporting entity under the Securities Exchange Act of 1934.
Duration of Offering	The Offering shall continue until all shares offered hereunder have been sold or until the expiration of a 180 day period from the date of effectiveness of this Registration Statement, unless such period is extended by our Board of Directors.
Number of Shares Outstanding Before the Offering	As of the date of this Registration Statement there are 41,646,160 shares of Common Stock, and 0 shares of Preferred Stock, issued and outstanding.   Upon the completion of the Offering under this Registration Statement, there will be 51,646,160 shares of Common Stock outstanding provided all of the shares offered hereby are sold.
Registration Costs	We estimate our total costs relating to the registration herein shall be approximately $85,000.
Net Proceeds to the Company	The Company is offering 10,000,000 shares of Common Stock, $0.001 par value and at an offering price of $0.30 per Share for maximum net proceeds to the Company of $3,000,000. The full subscription price will be payable at the time of subscription and any such funds received from subscribers in this Offering will be released to the Company when subscriptions are received and accepted.   Substantial expenditures will be required to enable the Company to scale up its operations and quality of services. While the Company believes that if all shares offered hereunder are sold, the net proceeds should be sufficient to permit the Company to continue operations and meet its capital requirements for approximately twelve (12) months, it is anticipated that the Company may need to raise additional capital to maintain operations, facilitate future growth and support its long-term growth initiatives. In addition, if not all of the Shares offered hereunder are sold, the Company will need to obtain substantial additional funds much sooner, and possibly within twelve (12) months after this Offering to grow and expand its operations. Therefore, it is likely that the Company would need to seek additional financing through subsequent future private sales of its debt or equity securities to fund its growth plans.   There can be no assurance, however, that such efforts can generate availability of additional funds when needed, or on terms acceptable to the Company, if at all. Any such additional financing may result in significant dilution to existing stockholders. If adequate funds are not available, the Company may be required to curtail its expansion plans, which will adversely affect its revenue and profitability.

 

 

Use of Proceeds	If all of the shares of Common Stock offered hereunder are sold, the net proceeds to the Company from the sale of the shares will be approximately $3,000,000. The offering proceeds will be utilized mainly for capital expenditures relating the growth and expansion of the Company’s business in the United States.
Risk Factors	The Securities offered hereby involve a high degree of risk and immediate substantial dilution, and therefore, should not be purchased by anyone who cannot afford the loss of his or her entire investment.  Prospective investors should carefully review and consider the factors set forth in the section of this Registration Statement entitled “Risk Factors,” as well as the other information set forth herein before subscribing for any of the shares offered hereby.

  

RISK FACTORS

 

An investment in our Common Stock involves a high degree of risk. You should carefully consider the risks described below and the other information in this prospectus before investing in our Common Stock. If any of the following risks occur, our business, operating results and financial condition could be seriously harmed. Currently, shares of our Common Stock are not publicly traded. In the event that shares of our Common Stock become publicly traded, the trading price of our Common Stock could decline due to any of these risks, and you may lose all or part of your investment. In the event our Common Stock fails to become publicly traded you may lose all or part of your investment.

 

RISKS RELATED TO THE OFFERING

 

As there is no minimum for our Offering, if only a few persons purchase shares they will lose their investment.

 

There shall be no minimum amount of proceeds to be received by the Company upon the sale of the shares offered hereunder. After the payment of expenses, including attorney and accounting fees, general and administrative expenses, the retirement of certain debt of the Company and the marketing and distribution of the Company’s existing products, the Company may have only limited reserves allocated for contingencies. In the event additional expenses are incurred in addition to those currently budgeted for, this may have a material adverse impact on the business and operations of the Company.

 

We are selling this Offering without an underwriter and may be unable to sell any shares.

 

This Offering is self-underwritten, that is, we are not going to engage the services of an underwriter to sell the shares. We intend to sell our shares through our Founder and Chairman, who will receive no commissions or other remuneration from any sales made hereunder. He will offer the shares to friends, family members, and business associates; however, there is no guarantee that he will be able to sell any of the shares. Unless he is successful in selling all of the shares and we receive the maximum amount of proceeds from this Offering, we may have to seek alternative financing to implement our plan of operations.

 

You may have limited access to information regarding our business because we are a limited reporting company exempt from many regulatory requirements and our obligations to file periodic reports with the SEC could be automatically suspended under certain circumstances.

 

The Company will not become a fully reporting company, but rather, will be subject to the reporting requirements of Section 15(d) of the Securities Exchange Act of 1934. As of effectiveness of our registration statement of which this prospectus is a part, we will be required to file periodic reports with the SEC, which will be immediately available to the public for inspection and copying (see “Where You Can Find More Information” elsewhere in this prospectus). Except during the year that our registration statement becomes effective, these reporting obligations may be automatically suspended under Section 15(d) if we have less than 300 shareholders. If this occurs after the year in which our registration statement becomes effective, we will no longer be obligated to file periodic reports with the SEC and your access to our business information would then be even more restricted; however, that filing obligation will generally apply even if our reporting obligations have been suspended automatically under section 15(d) of the Exchange Act prior to the due date for the Form 10-K. After that fiscal year and provided the Company has less than 300 shareholders, the Company is not required to file these reports. If the reports are not filed, the investors will have reduced visibility as to the Company and its financial condition.

 

In addition, as a filer subject to Section 15(d) of the Exchange Act, the Company is not required to prepare proxy or information statements, and our common stock will not be subject to the protection of the ongoing private regulations. Additionally, the Company will be subject to only limited portions of the tender offer rules, and our officers, directors, and more than ten (10%) percent shareholders are not required to file beneficial ownership reports about their holdings in our Company, and will not be subject to the short-swing profit recovery provisions of the Exchange Act. Further, more than five percent (5%) holders of classes of our equity securities will not be required to report information about their ownership positions in the securities. This means that your access to information regarding our business will be limited.

 

Furthermore, as long as we remain an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”), we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We intend to take advantage of these reporting exemptions until we are no longer an “emerging growth company.”

 

We will remain an emerging growth company until the earliest of: (A) the last day of the fiscal year following the fifth anniversary of our first sale of common equity securities pursuant to an effective registration statement, (B) the last day of the fiscal year in which we have total annual gross revenue of $1.0 billion or more, (C) the date that we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (D) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.

 

Rule 12b-2 of the Securities Exchange Act of 1934, as amended, defines a “smaller reporting company” as an issuer that is not an investment company, an asset-backed issuer), or a majority-owned subsidiary of a parent that is not a smaller reporting company and that:

 

·

Had a public float of less than $ 75 million as of the last business day of its most recently completed second fiscal quarter, computed by multiplying the aggregate worldwide number of shares of its voting and non-voting common equity held by non-affiliates by the price at which the common equity was last sold, or the average of the bid and asked prices of common equity, in the principal market for the common equity; or

 

·

In the case of an initial registration statement under the Securities Act or Exchange Act for shares of its common equity, had a public float of less than $75 million as of a date within 30 days of the date of the filing of the registration statement, computed by multiplying the aggregate worldwide number of such shares held by non-affiliates before the registration plus, in the case of a Securities Act registration statement, the number of such shares included in the registration statement by the estimated public offering price of the shares; or

 

·

In the case of an issuer whose public float as calculated under paragraph (1) or (2) of this definition was zero, had annual revenues of less than $50 million during the most recently completed fiscal year for which audited financial statements are available.

 

We qualify as a smaller reporting company, and so long as we remain a smaller reporting company, we benefit from the same exemptions and exclusions as an emerging growth company. In the event that we cease to be an emerging growth company as a result of a lapse of the five year period, but continue to be a smaller reporting company, we would continue to be subject to the exemptions available to emerging growth companies until such time as we were no longer a smaller reporting company.

 

After, and if ever, we are no longer an “emerging growth company,” we expect to incur significant additional expenses and devote substantial management effort toward ensuring compliance with those requirements applicable to companies that are not “emerging growth companies,” including Section 404 of the Sarbanes-Oxley Act.

 

We are an “Emerging Growth Company” and we cannot be certain if the reduced disclosure requirements applicable to Emerging Growth Companies will make our Common Stock less attractive to Investors.

 

We are an “emerging growth company,” as defined in the Jumpstart our Business Startups Act of 2012 (“JOBS Act”), and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our common stock less attractive because we will rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

 

Under the JOBS Act, “emerging growth companies” can delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have elected to “opt out” of such extended transition period and, therefore, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

 

You may be liable for damages if you breach the Subscription Agreement

 

The Company is charged with the burden of determining the suitability of an investor to invest in the Company. Nonetheless, the Subscription Agreement attached to this Offering requires the investors to represent, among other things, that they meet certain requirements and understand the risks associated with an investment in our shares and an investment in us, and that they can afford to lose all of the money they invest in us. Any investor who later makes a claim against us that is inconsistent with the representations in the Subscription Agreement will be in breach of the Subscription Agreement and will be liable for any damages that we, our affiliates and agents suffer as a result of such breach, including the cost of a successful defense against a lawsuit of the kind discussed above. Accordingly, members should take the representations in the Subscription Agreement seriously and not invest in us if they are not comfortable with the investment in us or will suffer financially or emotionally if they lose their investment.

 

Valuation of Securities Offered

 

The Company has arbitrarily determined the offering price of the shares. Therefore, purchasers of the shares may be exposed to a substantial risk of a decline in the market value of the Securities after the Offering should a market develop.

 

Purchasers in this Offering will experience immediate and substantial dilution in the book value of their investment.

 

The Offering price of our Common Stock of $0.30 is substantially higher than the $0.056 net tangible book value per share of our outstanding Common Stock immediately after the Offering, assuming that 100% of the shares offered hereunder are sold. Therefore, if you purchase shares of our Common Stock in this Offering at a price of $0.30, you will experience immediate dilution of $0.241 per share, the difference between the price per share you pay for our Common Stock and its net tangible book value per share as of September 30, 2013, after giving effect to the issuance of shares of our Common Stock in this Offering. This dilution is due in part to our arbitrary determination of the Offering price of the shares being offered.  This dilution is also a result of the lower book value of shares of our Common Stock held by our existing stockholders. Additionally, if we issue additional shares of our Common Stock in the future, you may experience further dilution.

 

As a result of the concurrent offering by the Company and the Selling Shareholders, the Company may not be able to sell the shares being offered by us which will reduce the amount of capital available for our operations.

 

The Company and Selling Shareholders will be offering shares of the Company’s common stock at the same time, however, there are no Selling Shareholders who will also be selling shares on behalf of the Company. The sale of shares by the Selling Shareholders is not contingent upon the Company selling a minimum number of its shares. Due to the concurrent offering, the Company and Selling Shareholders may be competing for potential investors. While we do not believe we will be approaching the same potential investors, we may inadvertently do so and if there is a conflict, it is possible that we may not be able to fully subscribe our Offering. In that event, the overall proceeds to the Company from our Offering may be decreased which would decrease the amount of capital available for our business operations. Further, sales of a substantial number of shares of our common stock by the Selling Shareholders could impair our ability to raise capital through the sale of additional equity securities. 

 

RISKS RELATED TO THE BUSINESS

 

The market for wedding services is highly competitive, and competition is increasing as more companies, many that are larger and have greater resources than we do, are able to capture the market from us. Further, considering that the industry is largely unorganized, numerous small players can pose stiff competition to us by underpricing the types of services that we provide.

        

In regards to the wedding matchmaking services, there are various online matrimonial providers who are large players and who have already attained significant operations compared to us. These providers have greater financial back up, investments in technology, resources and market infrastructure to offer competitive service rates that may pose significant challenges to us. We also compete with numerous small and mid-size online companies, and unorganized traditional brick and mortar service providers who may offer services at cheaper price points than us which may have an adverse effect on our business, including increased price competition and loss of potential customers.

          

Our ability to grow our business is dependent on our ability to compete effectively against other providers and requires capital investment in marketing and advertisement. Many existing and potential competitors have longer operating histories and greater market share and brand recognition than we do. In addition, many of our existing and potential competitors are substantially larger than we are and may already have or could develop substantially greater financial and other resources than we have. We may also face price competition that results in decreases in the purchase and use of our products and services. To stay competitive, we may have to increase the incentives that we offer to our customers and decrease the prices of our products and services, which could adversely affect our operating results and profitability.

 

In regards to wedding services, we may face stiff price competition from established hotel chains who rent their banquet halls directly to consumers and other wedding services companies. Considering the industry is largely unorganized, we might also face stiff price competition from small time players including wedding catering contractors who might offer similar service offerings at a price point much lower than us. In such an event our business and profitability may be substantially affected.

 

We rely on our relationships with wedding infrastructure owners who lease out their land or buildings for the purpose of being used as a wedding infrastructure. The financial position of the Company may be adversely affected if we fail to obtain a good wedding infrastructure space at a fair lease rental value and fail to achieve optimum occupancy of these infrastructures.

 

The Company relies on its relationships with wedding infrastructure owners who lease out their halls and buildings for an annual lease rental for the purpose of being used as a wedding infrastructure. The financial position of the Company may be adversely affected if we fail to obtain suitable wedding halls. Even if we are able to obtain suitable wedding halls, we need to ensure optimum occupancy of these infrastructures; otherwise the business may be significantly affected.

 

The wedding industry is highly dependent on social structure and practices. Any major change in the same will adversely impact the business and thus the financial performance of the Company.

 

The wedding services industry is highly dependent on the social structure, religious practices and number of guest invites. Any major change in the same by the consumers will adversely impact the business and thus the financial performance of the Company.

 

Our business depends significantly on the market recognition of our Founder & Chairman, who is our brand ambassador, and if we are not able to maintain or enhance our brand recognition, our business, financial condition, results of operations and prospects may be materially and adversely affected.

 

In the event of the demise of our Founder and Chairman, Mr. Venkatesan (a.k.a Mr. Mohan), who is the brand ambassador and face of the Company, or any accident or injury or ill health caused to him, the Company may not be able to maintain its business and brand recognition, or enhance its brand appeal. This could significantly affect our business and operations.

 

Our ability to maintain our competitive position and to implement our business strategy is dependent to a significant extent on the performance of our senior management team and other key functional personnel.

 

We depend on our current senior management for the implementation of our strategy and the operation of our day-to-day activities. Furthermore, relationships of members of senior management are important to the conduct of our business. Competition for experienced management personnel in the wedding services industry is intense, the pool of qualified candidates is limited, and we may not be able to retain the services of our senior executives or key personnel or attract and retain high-quality senior executives or key personnel in the future. Consequently, there can be no assurance that these individuals will continue to make their services available to us in the future. Any significant loss of senior management or key personnel could materially and adversely affect our business, financial condition, results of operations and prospects.

 

In addition, if any member of our senior management team or any of our other key personnel joins a competitor or forms a competing company, we may consequently lose our proprietary know-how.

 

Our key management personnel have entered into confidentiality and/or non-competition agreements with us. However, if any disputes arise between any of our key management personnel and us, it may be difficult for us to enforce these agreements.

 

Our profitability is substantially dependent on scalability of wedding services which may be negatively affected by various factors.

 

Our profit margin is largely a function of service fees charged to our customers. These fees are affected by a number of factors, including:

 

·

Our customer’s perception of our ability to add value through our services;

·

The introduction of better products or services by our competitors;

·

The stiff pricing policies of our competitors;

·

General economic recessionary conditions;

·

The increase in input cost of materials which we may not be able to pass on to the customers; and

·

Increase in lease rental costs charged by wedding infrastructure owners.

 

If our service fees are not properly priced, our revenue will decline and we will not be able to sustain our profit margin, which could have a material adverse effect on our profitability.

 

We have entered into outsourcing and other agreements related to certain business operations, and any difficulties experienced in these arrangements could result in additional expense, loss of customers , and revenue or an interruption of our services.

 

We have entered into numerous outsourcing agreements with third parties to provide turnkey wedding event management services to our customers. As a result, we must rely on third parties over which we have limited control, to perform certain of our operations and, in the majority of cases, to interface with our customers. If these third parties are unable to perform to our requirement of high quality services we may be forced to pursue alternative strategies to provide these services, which could result in delays, interruptions, additional expenses to us and loss of customers. This may require us to pursue new third-party relationships. If we are unable to complete a transition to a new provider on a timely basis, or at all, we could be forced to temporarily or permanently discontinue certain services, which could disrupt services to our customers and adversely affect our business, financial condition and results of operations.

 

The inability to maintain or strengthen our brand may reduce our ability to retain and attract customers, which could adversely affect our business, financial condition and operating results.

 

The nature of the industry requires continuous efforts to increase brand awareness among our consumers. This will be an important part of our strategy to grow our business. Developing, promoting and maintaining our brand and image requires a consistent capital investment and expense, and this investment in our brand and image may not be successful. If we fail to develop, promote and maintain our brand and image, we may not be able to grow our customer base and our financial and operational results may suffer.

 

If we lose key personnel or are unable to attract additional qualified personnel as we grow, our business could be adversely affected.

 

The wedding services business is highly labor intensive and requires constant efforts on training. We depend on the ability and experience of a number of our key personnel who have substantial experience in our line of operations. It is possible that the loss of the services of one or a combination of our senior executives or key managers would have an adverse effect on our operations. Our success also depends on our ability to continue to attract, train, manage and retain other qualified management and skilled personnel as we grow, and we may be unable to attract, manage or retain such personnel. Due to the competitive nature of our industry, we may also be vulnerable to attempts by our competitors to hire our employees.

 

Business, political and economic factors may affect our operations, the manner in which we conduct our business and our rate of growth.

 

The growth rate of the Indian economy has dropped over the last two years and unemployment rates are rising. If economic conditions and unemployment rates continue to deteriorate or do not improve, our target consumer base may be negatively affected due to the generally lower incomes of the customers. In addition, a large proportion of our target customers work in industries that may be disproportionately affectedby a downturn in the Indian economy, which may limit their disposable incomes and consequently, their discretionary spending. Stagnant economic growth and high unemployment are likely to negatively affect our customers' ability to pay for our services. The resulting impact of such economic conditions on our customers and on consumer spending could have a material adverse effect on demand for our services and on our business, financial condition and operating results.

 

If we are unable to adequately protect our intellectual property and brand image we may lose a valuable competitive advantage or be forced to incur costly litigation to protect our rights.

 

Our success depends in part on our ability to protect our intellectual property rights and brand image. Currently, the Company has the right to utilize certain intellectual property comprising of wedding design, catering knowhow, talent pool, skilled labor, vendor supply chain network, wedding hall owner’s network, sourcing strategy, proprietary recipe of signature dishes, etc. It is possible that third parties will infringe these rights and as a result, the Company may be forced to spend significant amounts of time or money to defend these rights. Further, the Company has not yet obtained trademark protection of the KM brand. Securing these protections will be material to our business as it will help protect our ideas and image from use by competitors with a similar business model. 

 

Our failure to anticipate rapid changes in competition may negatively affect demand for our services in the marketplace.

 

The wedding services market may be subject to rapid and significant business changes. We expect that new services and concepts applicable to our industry will emerge in the future, and these new services and concepts may be superior to our services. Our future success will depend, in part, on our ability to develop new services according to changing business conditions. These initiatives are inherently risky, and they may not be successful or may have an adverse effect on our business, financial condition and results of operations.

 

The Company’s business is affected by various regulations and compliance with stringent health, safety and environmental laws is expected to be significant. The failure to comply with existing and new health, safety and environmental laws could adversely affect our results of operations.

 

A central component of our wedding service is catering, which is subject to Food Regulations. The Indian food and processing industry is governed by multiple legislations. Dealing with an array of food laws and governing bodies is also a challenge. In addition, we are also subject to regulations relating to local land use controls, permits planning permission, fire and safety standards. We could be subject to substantial civil and criminal liability and other regulatory consequences in the event that health, safety or environmental hazards were to be found. We may be the subject of consumer interest litigation in India relating to allegations of such hazards, as well as in cases having potential criminal and civil liability filed by regulatory authorities. If such cases are determined against us, there could be an adverse effect on our brand reputation, business and operations.

 

We and some of our third-party service providers are susceptible to the occurrence of catastrophic events, which could impair our ability to operate our business.

 

We and some of the third-party service providers on which we rely are vulnerable to damage from catastrophic events, such as power loss, natural disasters, terrorism, fires, accidents and similar events beyond our control. If we or our third-party service providers experience any of these events, our services to the customers may not function properly, we may lose customers and revenues, and we may have difficulty attracting new customers, any of which could have a material adverse impact on our business, financial condition and results of operations. In addition, the business interruption insurance we carry may not cover any or all of the losses we may experience as a result of such events. Any significant losses that are not covered by insurance could negatively affect our financial condition and results of operations.

 

Our business and activities will be regulated by the Competition Act, 2002 (India).

 

The Parliament of India enacted the Competition Act, 2002 (the “Competition Act”) for the purpose of preventing practices having an adverse effect on competition in the relevant market in India under the auspices of the Competition Commission of India (the “CCI”). Under the Competition Act, any arrangement, understanding or action, whether formal or informal, which causes or is likely to cause an appreciable adverse effect on competition is void and attracts substantial penalties. On March 4, 2011, the Government notified and brought into force the combination regulation (merger control) provisions under the Competition Act, effective from June 1, 2011. The combination regulation provisions require that acquisition of shares, voting rights, assets or control or mergers or amalgamations which cross the prescribed asset and turnover-based thresholds shall be mandatorily notified to and pre-approved by the CCI. In addition, on May 11, 2011, the CCI issued the final Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 that sets out the mechanism for implementation of the combination regulation provisions under the Competition Act.

 

The effect of the Competition Act on the business environment in India is currently unclear. If we are affected, directly or indirectly, by any provision of the Competition Act, or its application or interpretation, including any enforcement proceedings initiated by the Competition Commission and any adverse publicity that may be generated due to scrutiny or prosecution by the Competition Commission, it may have a material adverse effect on our business, results of operations, financial condition and prospects.

 

Our ability to raise foreign capital may be constrained by Indian law.

 

Our operating subsidiary, as an Indian company, will be subject to exchange controls that regulate investments in foreign currencies. Such regulatory restrictions limit our financing sources for our business operations or acquisitions and other strategic transactions, and consequently could constrain our ability to obtain financings. In addition, we cannot assure you that the required approvals will be granted to us, even if granted within the normal time limits.

 

If we are not able to obtain further financing, our business operations may fail.

 

Substantial expenditures will be required to enable the Company to scale up its operations and quality of services. While the Company believes that if all shares offered hereunder are sold, the net proceeds should be sufficient to permit the Company to continue operations and meet its capital requirements for approximately twelve (12) months, it is anticipated that the Company may need to raise additional capital to maintain operations, facilitate future growth and support its long-term growth initiatives. In addition, if not all of the shares offered hereunder are sold, the Company will need to obtain substantial additional funds much sooner, and possibly within twelve (12) months after this Offering to grow and expand its operations. The Company’s established bank-financing arrangements will not be adequate. Therefore, it is likely that the Company would need to seek additional financing through subsequent future private sales of its debt or equity securities to fund its growth plans.

 

There can be no assurance, however, that such efforts can generate availability of additional funds when needed, or on terms acceptable to the Company, if at all. Any such additional financing may result in significant dilution to existing stockholders. If adequate funds are not available, the Company may be required to curtail its expansion plans, which will adversely affect its revenue and profitability.

 

RISKS RELATED TO THE COMMON STOCK

 

The Company’s stock price may be volatile.

 

The market price of the Company’s Common Stock is likely to be highly volatile and could fluctuate widely in price in response to various potential factors, many of which will be beyond the Company’s control, including the following:

 

·

products and services offered by the Company or its competitors;

·

additions or departures of key personnel;

·

the Company’s ability to execute its business plan;

·

operating results that fall below expectations;

·

industry developments;

·

economic and other external factors; and

·

period-to-period fluctuations in the Company’s financial results.

 

In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of the Company’s Common Stock.

 

As a public company, we will incur substantial expenses.

 

Upon declared effectiveness of this Registration Statement by the SEC, we will become subject to the information and reporting requirements of the U.S. securities laws. The U.S. securities laws require, among other things, review, audit, and public reporting of our financial results, business activities, and other matters. Recent SEC regulation, including regulation enacted as a result of the Sarbanes-Oxley Act of 2002, has also substantially increased the accounting, legal, and other costs related to becoming and remaining an SEC reporting company. If we do not have current information about our Company available to market makers, they will not be able to trade our stock. The public company costs of preparing and filing annual and quarterly reports, and other information with the SEC and furnishing audited reports to stockholders, will cause our expenses to be higher than they would be if we were privately-held. These increased costs may be material and may include the hiring of additional employees and/or the retention of additional advisors and professionals. Our failure to comply with the federal securities laws could result in private or governmental legal action against us and/or our sole officer and director, which could have a detrimental effect on our business and finances, the value of our stock, and the ability of stockholders to resell their stock.

 

FINRA sales practice requirements may limit a stockholder’s ability to buy and sell our stock.

 

The Financial Industry Regulatory Authority (“FINRA”) has adopted rules that relate to the application of the SEC’s penny stock rules in trading our securities and require that a broker/dealer have reasonable grounds for believing that the investment is suitable for that customer, prior to recommending the investment. Prior to recommending speculative, low priced securities to their non-institutional customers, broker/dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative, low priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker/dealers to recommend that their customers buy our Common Stock, which may have the effect of reducing the level of trading activity and liquidity of our Common Stock. Further, many brokers charge higher transactional fees for penny stock transactions. As a result, fewer broker/dealers may be willing to make a market in our Common Stock, reducing a shareholder’s ability to resell shares of our Common Stock.

 

We may be exposed to potential risks resulting from new requirements under section 404 of the Sarbanes-Oxley Act of 2002.

 

There are substantial penalties that could be imposed upon us if we fail to comply with all regulatory requirements. In particular, under Section 404 of the Sarbanes-Oxley Act of 2002 we will be required, beginning with our fiscal year ending 2013 to include in our annual report our assessment of the effectiveness of our internal control over financial reporting as of the end of fiscal 2012. We have not yet completed our assessment of the effectiveness of our internal control over financial reporting. We expect to incur additional expenses and diversion of management’s time as a result of performing the system and process evaluation, testing and remediation required in order to comply with the management certification and auditor attestation requirements.

 

If a market for our Common Stock does not develop, shareholders may be unable to sell their shares.

 

A market for our Common Stock may never develop. We intend to contact an authorized OTC Bulletin Board market-maker for sponsorship of our securities on the OTC Bulletin Board. However, there is no guarantee that our shares will be traded on the Bulletin Board, or, if traded, a public market may not materialize. If our Common Stock is not traded on the Bulletin Board or if a public market for our Common Stock does not develop, investors may not be able to re-sell the shares of our Common Stock that they have purchased and may lose all of their investment.

 

The Company’s Common Stock may be deemed “penny stock”, which would make it more difficult for investors to sell their shares.

 

If a market develops and the price of the Company’s stock is below $5.00 per share, or the Company does not have $2,000,000 in net tangible assets, or is not listed on an exchange or on the NASDAQ National Market System, among other conditions, the Company’s shares may be subject to a rule promulgated by the SEC that imposes additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and institutional accredited investors. For transactions covered by the rule, the broker-dealer must make a special suitability determination for the purchaser and receive the purchaser’s written consent to the transaction prior to the sale. Furthermore, if the price of the Company’s stock is below $5.00, and does not meet the conditions set forth above, sales of the Company’s stock in the secondary market will be subject to certain additional new rules promulgated by the SEC. These rules generally require, among other things, that brokers engaged in secondary trading of stock provide customers with written disclosure documents, monthly statements of the market value of penny stocks, disclosure of the bid and asked prices, and disclosure of the compensation to the broker-dealers and disclosure of the sales person working for the broker-dealer. These rules and regulations may affect the ability of broker-dealers to sell the Company’s securities, thereby limiting the liquidity of the Company’s securities. They may also affect the ability of purchasers in the Offering to resell their securities in the secondary market.

 

Additional issuances of our securities may result in immediate dilution to existing stockholders.

 

We are authorized to issue up to 300,000,000 shares of Common Stock, $0.001 par value per share, of which 41,646,160 are currently issued and outstanding. Further, we are authorized to issue up to 10,000,000 shares of Preferred Stock, $0.001 par value per share of which none are issued and outstanding.  Our Board of Directors has the authority to cause us to issue additional shares of Common Stock, and to determine the rights, preferences and privileges of our preferred stock, without consent of any of our stockholders. We may issue either common or preferred stock in connection with financing arrangements or otherwise. Any such issuances will result in immediate dilution to our existing stockholders’ interests, which will negatively affect the value of your shares.

 

The elimination of monetary liability against the Company’s existing and future directors, officers and employees under Delaware law and the existence of indemnification rights to the Company’s existing and future directors, officers and employees may result in substantial expenditures by the Company and may discourage lawsuits against the Company’s directors, officers and employees.

 

The Company’s Certificate of Incorporation contain specific provisions that eliminate the liability of directors for monetary damages to the Company and the Company’s stockholders; further, the Company is prepared to give such indemnification to its existing and future directors and officers to the extent provided by Delaware law. The Company may also have contractual indemnification obligations under any employment agreements it may have with its officers and directors. The foregoing indemnification obligations could result in the Company incurring substantial expenditures to cover the cost of settlement or damage awards against directors and officers, which the Company may be unable to recoup. These provisions and resultant costs may also discourage the Company from bringing a lawsuit against existing and future directors and officers for breaches of their fiduciary duties and may similarly discourage the filing of derivative litigation by the Company’s stockholders against the Company’s existing and future directors and officers even though such actions, if successful, might otherwise benefit the Company and its stockholders.

 

Absence of Public Market

 

There has never been any established “public market” for shares of Common Stock of the Company, and no assurance can be given that any market for the Company's Common Stock will develop or be maintained. If a public market ever develops in the future, the sale of “unregistered” and “restricted” shares of Common Stock pursuant to Rule 144 of the Act, may adversely affect the market price, if any, for the Company's shares and could impair the Company's ability to raise capital through the sale of its equity securities. In order to qualify for the resale of Common Stock under Rule 144, certain holding periods must be met and either legal opinions setting forth exemptions from the Act must be provided or registration statements must be in effect relating to such Common Stock. Further, there is no assurance that Rule 144 will be applicable to the Company and investors may not be able to rely on its provisions now or in the future.

 

Dividends

 

Payment of dividends on the Common Stock and Preferred Stock is within the discretion of the Board of Directors, is subject to state law, and will depend upon the Company's earnings, if any, its capital requirements, financial condition and other relevant factors.

 

DETERMINATION OF OFFERING PRICE

 

As a result of there being no established public market for our shares, the offering price and other terms and conditions relative to our shares have been arbitrarily determined by the Company and do not bear any relationship to assets, earnings, book value, or any other objective criteria of value. In addition, no investment banker, appraiser, or other independent third party has been consulted concerning the offering price for the shares or the fairness of the offering price used for the shares.

 

USE OF PROCEEDS

 

The net proceeds to be realized from this Offering will be approximately $3,000,000 if all the shares being offered are sold. The Company's management estimates that if all shares are sold, the net proceeds to the Company should be sufficient to meet the Company's funding requirements for the next twelve (12) months after this Offering. Management anticipates the proceeds will generally be used as follows, and the estimated use of proceeds set forth below is not intended to represent the order of priority in which the proceeds may be applied:

 

Application of Proceeds	100% of Shares Sold		75% of Shares Sold		50% of Shares Sold
	$ Amount	% of Total	$ Amount	% of Total	$ Amount	% of Total
Total Offering Proceeds	3,000,000	100.00	2,250,000	100.00	1,500,000	100.00
Offering Expenses
Legal Fees and Expenses	45,000	1.50	45,000	2.00	45,000	3.00
Audit Fees and Expenses(1)	35,000	1.17	35,000	1.56	35,000	2.33
SEC Registration Fee	700	0.02	700	0.03	700	0.05
Transfer Agent & Registration Fees & Expenses	2,500	0.08	2,500	0.11	2,500	0.17
Miscellaneous Expenses	1,800	0.06	1,800	0.08	1,800	0.12
Total Offering Expenses	85,000*	2.83	85,000*	3.78	85,000*	5.67
Net Proceeds from Offering	2,915,000	97.17	2,165,000	96.22	1,415,000	94.33
Use of Net Proceeds
Business Infrastructure	1,345,000	44.83	1,000,000	44.44	660,000	44.00
Marketing	1,000,000	33.33	745,000	33.11	490,000	32.67
General and Administrative	570,000	19.00	420,000	18.67	265,000	17.67
Total Use of Net Proceeds	2,915,000	97.17	2,165,000	96.22	1,415,000	94.33
Total Use of Proceeds	3,000,000	100.00	2,250,000	100.00	1,500,000	100.00

 

*Notes: Offering expenses have been rounded to $85,000.

 

⁽¹⁾ Audit fees are strictly related to the amount of work performed by our auditor, and the percentage of shares sold in this offering has no impact on our audit fees.  If we do not raise sufficient funds from this offering to cover audit related fees, we will have to seek additional outside financing to cover such expenses.

 

THE FIGURES SET FORTH ABOVE ARE ESTIMATES. ACTUAL EXPENDITURES MAY VARY SUBSTANTIALLY FROM THESE ESTIMATES AS A RESULT OF FUTURE EVENTS. ALTHOUGH THERE ARE NO CURRENT PLANS TO DO SO, THE COMPANY'S BOARD OF DIRECTORS RESERVES THE RIGHT, IN THE EXERCISE OF ITS BUSINESS JUDGMENT; TO ALTER THE ESTIMATES AND ANTICIPATED USES SET FORTH HEREIN.

 

PLAN OF DISTRIBUTION; TERMS OF THE OFFERING

 

As of the date of this Registration Statement, the Company has 41,646,160 shares of Common Stock and 0 shares of Preferred Stock issued and outstanding. The Company is registering an additional 10,000,000 shares of its Common Stock for sale at the price of $0.30 per share. There is no arrangement to address the possible effect of the Offering on the price of the stock.

 

In connection with the Company’s selling efforts in the Offering, our officers and directors will not register as a broker-dealer pursuant to Section 15 of the Exchange Act, but rather will rely upon the “safe harbor” provisions of SEC Rule 3a4-1, promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Generally speaking, Rule 3a4-1 provides an exemption from the broker-dealer registration requirements of the Exchange Act for persons associated with an issuer that participate in an Offering of the issuer’s securities. Our officers and directors are not subject to any statutory disqualification, as that term is defined in Section 3(a)(39) of the Exchange Act. Our officers and directors will not be compensated in connection with their participation in the Offering by the payment of commissions or other remuneration based either directly or indirectly on transactions in our securities. Our officers and directors are not, nor have been within the past 12 months, a broker or dealer, and they are not, nor have they been within the past 12 months, an associated person of a broker or dealer. At the end of the Offering, our officers and directors will continue to primarily perform substantial duties for the Company or on its behalf otherwise than in connection with transactions in securities. Our officers and directors have not participated in another offering of securities pursuant to the Exchange Act Rule 3a4-1 in the past 12 months. Additionally, they have not and will not participate in selling an offering of securities for any issuer more than once every 12 months other than in reliance on the Exchange Act Rule 3a4-1(a)(4)(i) or (iii).

 

In order to comply with the applicable securities laws of certain states, the securities will be offered or sold in those states only if they have been registered or qualified for sale; an exemption from such registration or if qualification requirement is available and with which the Company has complied. In addition, and without limiting the foregoing, the Company will be subject to applicable provisions, rules and regulations under the Exchange Act with regard to security transactions during the period of time when this Registration Statement is effective.

 

Terms of the Offering

 

The Offering shall continue until all shares offered hereunder have been sold or until the expiration of a 180 day period from the date of effectiveness of this Registration Statement, unless such period is extended by our Board of Directors. Subscribers shall make all checks payable to KM Wedding Events Management, Inc. for payment of their subscription price. Upon acceptance of a subscription for Shares and corresponding receipt of payment, all funds will be immediately available to the Company. Subscribers may not withdraw subscription funds deposited in the KM Wedding Events Management, Inc. account. After release to the Company, subscription funds not applied to Company expenses or obligations may be invested by the Company in short-term highly liquid investments, which may include uninsured depositories.

 

Penny Stock Regulation

 

Our Common Shares are not quoted on any stock exchange or quotation system. The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange system).

 

The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document prepared by the SEC, that:

 

·

contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;

·

contains a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties;

·

contains a brief, clear, narrative description of a dealer market, including “bid” and “ask” prices for penny stocks and the significance of the spread between the bid and ask price;

·

contains a toll-free telephone number for inquiries on disciplinary actions;

·

defines significant terms in the disclosure document or in the conduct of trading penny stocks; and,

·

contains such other information and is in such form (including language, type, size, and format) as the SEC shall require by rule or regulation.

 

The broker-dealer also must provide the customer with the following, prior to proceeding with any transaction in a penny stock:

 

·

bid and offer quotations for the penny stock;

·

details of the compensation of the broker-dealer and its salesperson in the transaction;

·

the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and,

·

monthly account statements showing the market value of each penny stock held in the customer’s account.

 

In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement and a signed and dated copy of a written suitability statement. These disclosure requirements will have the effect of reducing the trading activity in the secondary market for our stock because it will be subject to these penny stock rules. Therefore, stockholders may have difficulty selling those securities.

 

Offering Period and Expiration Date

 

The Offering shall continue until all shares offered hereunder have been sold or until the expiration of a 180 day period from the date of effectiveness of this Registration Statement, unless such period is extended by our Board of Directors.

Procedures for Subscribing

 

Once the Registration Statement is declared effective by the SEC, if you decide to subscribe for any shares in this Offering, you must:

 

1. receive, review and execute and deliver a Subscription Agreement; and

 

2. deliver a check or certified funds to us for acceptance or rejection.

 

Any potential investor will have ample time to review the Subscription Agreement, along with their counsel, prior to making any final investment decision. The Company shall only deliver such Subscription Documents upon request after a potential investor has had ample opportunity to review this prospectus. Further, we will not accept any money until this Registration Statement is declared effective by the SEC.

 

Right To Reject Subscriptions

 

We have the right to accept or reject subscriptions in whole or in part, for any reason or for no reason. All monies from rejected subscriptions will be returned immediately by us to the subscriber, without interest or deductions.

 

Acceptance of Subscriptions

 

Once you submit a Subscription Agreement and the Company accepts it, you may not revoke or change your subscription or request a refund of monies paid. All accepted subscriptions are irrevocable, even if you subsequently learn information about us that you consider to be materially unfavorable. However, this does not limit your rescission rights under Section 5 of the Securities Act of 1933 in cases of material omissions or misstatements contained in this Registration Statement.

 

Upon the Company’s acceptance of a Subscription Agreement and receipt of full payment, the Company shall countersign the Subscription Agreement and issue a stock certificate along with a copy of the Subscription Agreement.

 

DILUTION

 

We intend to sell 10,000,000 shares of our Common Stock at a price of $0.30 per share. The following table sets forth the number of shares of Common Stock purchased from us, the total consideration paid and the price per share. The table assumes all 10,000,000 shares of Common Stock will be sold.

 

		Shares Issued								Total Consideration								Price Per Share
		Number of Shares				Percent				Amount				Percent
Existing Shareholders			41,646,160				80.64	%		$	1,072,808				26.34	%		$	0.001 - 0.20
Purchasers of Shares			10,000,000				19.36	%		$	3,000,000				73.66	%		$	0.30
Total			51,646,160				100.00	%		$	4,072,808				100.00	%

 

The following table sets forth the difference between the offering price of the shares of our Common Stock being offered by us, the net tangible book value per share, and the net tangible book value per share after giving effect to the Offering by us, assuming that 100%, 75% and 50% of the offered shares are sold. Net tangible book value per share represents the amount of total tangible assets less total liabilities divided by the number of shares outstanding as of September 30, 2013. Totals may vary due to rounding.

 

100% of offered shares are sold

75% of offered shares are sold

50% of offered shares are sold

Offering Price

$0.30 per share

$0.30 per share

$0.30 per share

Net tangible book value at September 30, 2013

(0.002) per share

(0.002) per share

(0.002) per share

Net tangible book value after giving effect to the Offering

0.056 per share

0.044 per share

0.030 per share

Increase in net tangible book value per share attributable to cash payments made by new investors

0.059 per share

0.046 per share

0.032 per share

Per Share Dilution to New Investors

0.241 per share

0.254 per share

0.268 per share

Percent Dilution to New Investors

80

%

85

%

89

%

 

If 100% of the offered shares are sold we will receive the maximum proceeds of $2,915,000, after offering expenses have been deducted. If 75% of the offered shares are sold we will receive $2,165,000 after offering expenses have been deducted. If 50% of the offered shares are sold we would receive $1,415,000 after offering expenses have been deducted. While the Company believes that if all shares offered hereunder are sold, the net proceeds should be sufficient to permit the Company to continue operations and meet its capital requirements for approximately twelve (12) months, it is anticipated that the Company may need to raise additional capital to maintain operations, facilitate future growth and support its long-term growth initiatives. In addition, if not all of the shares offered hereunder are sold, the Company will need to obtain substantial additional funds much sooner, and possibly within twelve (12) months after this Offering to grow and expand its operations. The Company’s established bank-financing arrangements will not be adequate. Therefore, it is likely that the Company would need to seek additional financing through subsequent future private sales of its debt or equity securities to fund its growth plans.

 

There can be no assurance, however, that such efforts can generate availability of additional funds when needed, or on terms acceptable to the Company, if at all. Any such additional financing may result in significant dilution to existing stockholders. If adequate funds are not available, the Company may be required to curtail its expansion plans, which will adversely affect its revenue and profitability.

 

DESCRIPTION OF PROPERTY

 

We currently rent an office located at 11501 Dublin Blvd., Suite 200, Dublin, CA 94568 at a yearly rental rate of $1,200. In the future, we may be required to seek additional office space. We do not foresee any significant difficulties in obtaining any required space. We currently do not own any real property.

 

DESCRIPTION OF SECURITIES

 

The total number of Shares authorized to be issued by the Company is Three Hundred Ten Million (310,000,000). This consists of Three Hundred Million (300,000,000) Shares of Common Stock, (the “Common Stock”) and Ten Million (10,000,000) Shares of Preferred Stock (the “Preferred Stock”). As of the date of this Registration Statement, there are 41,646,160 shares of Common Stock and 0 shares of Preferred Stock, issued and outstanding. All shares of the Common Stock are “restricted shares” as that term is defined under the Securities Act of 1933. As of the date of this Registration Statement, there are no outstanding options to purchase shares of the Common Stock of the Company.

 

Common Stock

 

The Common Stock has a par value of $0.001 per share. Each share of Common Stock is entitled to one (1) vote per share. Subject to the preferences applicable to Preferred Stock outstanding at any time, the holders of shares of Common Stock shall be entitled to receive such dividends and other distributions in cash, property or shares of stock of the Corporation as may be declared thereon by the Board of Directors from time to time out of assets or funds of the Corporation legally available therefore. The holders of Common Stock issued and outstanding have and possess the right to receive notice of shareholders’ meetings and to vote upon the election of directors or upon any other matter as to which approval of the outstanding shares of Common Stock or approval of the common shareholders is required or requested. Shareholders will not have a right to cumulate their votes for the election of directors.

 

Upon liquidation of the Company, the holders of Common Stock will share pro rata in the distribution of assets. The Common Stock has no preemptive or other subscription rights, and there are no conversion rights or redemption or sinking fund provisions with respect to such shares.

 

The Common Stock Shares offered hereby will be evidenced by a certificate when issued.

 

Preferred Shares.

 

The Board of Directors is authorized from time to time to provide for the issuance of up to 10,000,000 shares of Preferred Stock in one or more classes or series not exceeding in the aggregate the number of Preferred Shares authorized by the Certificate of Incorporation. The Board of Directors is also authorized to determine with respect to each such series the voting powers, if any, designations, preferences, and relative, participating, option, or other special rights, and the qualifications, limitations, or restrictions relating thereto, including without limiting the generality of the foregoing, the voting rights relating to such series or class of Preferred Stock (which may be one or more votes per share or a fraction of a vote per share, which may vary over time, and which may be applicable generally or only upon the happening and continuance of stated events or conditions), the rate of dividend to which holders of such Class of Preferred Shares of any series may be entitled (which may be cumulative or non-cumulative), the rights of holders of such series or class of Preferred Shares in the event of liquidation, dissolution, or winding up of the affairs of the Company, the rights, if any, of holders of such series or class of Preferred Shares of any series to convert or exchange such Preferred Shares of such series for shares of any other class or series of capital stock or for any other securities, property, or assets of the Company or any subsidiary (including the determination of the price or prices or the rate or rates applicable to such rights to convert or exchange and the adjustment thereof, the time or times during which the right to convert or exchange shall be applicable, and the time or times during which a particular price or rate shall be applicable), whether or not the shares of that series shall be redeemable, and if so, the terms and conditions of such redemption, including the date or dates upon or after which they shall be redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates, and whether any shares of that series shall be redeemed pursuant to a retirement or sinking fund or otherwise and the terms and conditions of such obligation.

 

Before the Company shall issue any additional series or class of Preferred Shares, a Certificate of Designation, or Restated Certificate of Incorporation, fixing the voting powers, designations, preferences, the relative, participating, option, or other rights, if any, and the qualifications, limitations, and restrictions, if any, relating to the Preferred Shares of such series, and the number of Preferred Shares of such series authorized by the Board of Directors to be issued shall be filed with the Delaware Secretary of State Division of Corporations in accordance with the Delaware Code and shall become effective without any shareholder action. The Board of Directors is further authorized to increase or decrease (but not below the number of such shares of such series then outstanding) the number of shares of any series subsequent to the issuance of shares of that series.

 

Preemptive Rights. No holder of any stock of the Company shall be entitled, as of right, to purchase or subscribe for any part of any unissued shares of stock of the Company or for any additional shares of stock, of any class or series, which may at any time be issued, whether now or hereafter authorized, or for any rights, options, or warrants to purchase or receive shares of stock or for any bonds, certificates of indebtedness, debentures, or other securities convertible into shares of stock, or any class or series thereof, but any such unissued or additional shares, rights, options, or warrants or convertible securities of the Company may, from time to time, be issued and disposed of by the Board of Directors to such persons, firms, corporations, or associations, and upon such terms, as the Board of Directors may, in its discretion, determine, without offering; any part thereof to any shareholders of any class, or series then of record; and any shares, rights, options or warrants or convertible securities which the Board of Directors may at any time determine to offer to shareholders for subscription, may be offered to holders of shares of any class or series at the time existing, to the exclusion of holders of shares of any or all other or classes or series at the time existing, in each case as the Board of Directors may, in its discretion, determine.

 

Dividends

 

Common Stock

 

No dividends have ever been paid on the Common Stock and the Company does not currently anticipate paying any cash or other dividends on the Common Stock. Future dividend policy will be determined by the Board of Directors of the Company in light of prevailing financial need and earnings, if any, of the Company and other relevant factors. Investors who anticipate the need for either immediate or future income in the form of cash dividends from an investment in the Company should not purchase the Common Stock offered hereby.

 

Preferred Stock

 

No dividends have ever been paid on the Preferred Stock and the Company does not currently anticipate paying any cash or other dividends on the Preferred Stock. Future dividend policy will be determined by the Board of Directors of the Company in light of prevailing financial need and earnings, if any, of the Company and other relevant factors. Investors who anticipate the need for either immediate or future income in the form of cash dividends from an investment in the Company should not purchase the Common Stock offered hereby.

 

Warrants and Options

 

There are no outstanding warrants or options to purchase our securities.

 

Transfer Agent and Registrar

 

Our transfer agent is VStock Transfer, LLC and its phone number is 212-828-8436. The transfer agent is responsible for all record-keeping and administrative functions in connection with the common shares.

 

No Public Market for Common Stock

 

There is currently no public trading market for our Common Stock and no such market may ever develop. While we intend to seek and obtain quotation of our Common Stock for trading on the OTC Bulletin Board (“OTCBB”), there is no assurance that our application will be approved. An application for quotation on the OTCBB must be submitted by one or more market makers who: 1) are approved by the Financial Industry Regulatory Authority ("FINRA"); 2) who agree to sponsor the security; and 3) who demonstrate compliance with SEC Rule 15(c)2-11 before initiating a quote in a security on the OTCBB. In order for a security to be eligible for quotation by a market maker on the OTCBB, the security must be registered with the SEC and the company must be current in its required filings with the SEC. There are no listing requirements for the OTCBB and accordingly no financial or minimum bid price requirements. We intend to cause a market maker to submit an application for quotation to the OTCBB upon the effectiveness of this registration statement of which this prospectus forms a part. However, we can provide no assurance that our shares will be traded on the bulletin board or, if traded, that a public market will materialize.

 

INFORMATION WITH RESPECT TO REGISTRANT

 

THE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ TOGETHER WITH THE CONSOLIDATED FINANCIAL STATEMENTS OF KM WEDDING EVENTS MANAGEMENT INC. AND THE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS INCLUDED IN THIS REGISTRATION STATEMENT. THIS DISCUSSION SUMMARIZES THE SIGNIFICANT FACTORS AFFECTING OUR OPERATING RESULTS, FINANCIAL CONDITIONS AND LIQUIDITY AND CASH-FLOW SINCE INCEPTION.

 

DESCRIPTION OF BUSINESS

 

Company Overview

 

KM Wedding Events Management, Inc. (the “Company” or “KM”) was incorporated in the State of Delaware on October 24, 2012.

 

On February 14, 2013, KM entered into a Stock Purchase Agreement with KM Matrimony Pvt Ltd, a company incorporated under the 1956 Companies Act of India (“KM India”), pursuant to which KM agreed to purchase ten million (10,000,000) shares of KM India’s common stock at a price of 11 Indian Rupees ($0.21 USD) per share for an aggregate purchase price of up to two million one hundred thousand dollars ($2,100,000 USD) dollars. As of January 16, 2014, pursuant to the above agreement, KM has purchased 1,393,127 shares at 11 Rupees per share ($0.201 USD at the time of the sale) in KM India on April 3, 2013 for $280,000 USD. A true and correct copy of the Stock Purchase Agreement is attached hereto as Exhibit 10.5 and is incorporated herein by reference.

 

On February 14, 2013, KM entered into a Stock Purchase Agreement with the shareholders of KM India, comprised of Mr. Venkatesan Vaidhyanathan, Mrs. Meera Nagarajan, Mr. Sridhar Kalyanasundaram, Mr. Vijaya Bhaskar Venkatesan and Mrs. Nithya Vijaya Baskar, pursuant to which KM shall purchase Three Million One Hundred and Fifty Thousand (3,150,000) shares of KM India’s common stock from Mr. Venkatesan Vaidhyanathan, Mrs. Meera Nagarajan, Mr. Sridhar Kalyanasundaram, Mr. Vijaya Bhaskar Venkatesan and Mrs. Nithya Vijaya Baskar payable in two tranches as follows: (i) Tranche A: One Million One Hundred and Fifty Thousand (1,150,000) shares of KM India’s common stock at a purchase price of 11 Indian Rupees ($0.21 USD) per share (“Tranche A”); and, (ii) Tranche B: Two Million (2,000,000) shares of KM India’s common stock at a purchase price equal to the fair market value of KM India’s shares at the time of purchase (“Tranche B”). As of January 16, 2014, KM has purchased 1,120,018 shares in KM India on April 26, 2013 from Tranche A for an aggregate of $229,000 USD from two of the shareholders of KM India viz. Mr. Venkatesan Vaidhyanathan (562,455 shares for $115,000 USD) and Mrs. Meera Nagarajan (557,564 shares for $114,000 USD). The remaining Tranche A shares and the Tranche B shares have to be sold within 3 years from February 14, 2013. A true and correct copy of the Stock Purchase Agreement is attached hereto as Exhibit 10.6 and is incorporated herein by reference.

 

As a result of the Stock Purchase Agreements referenced above, KM now carries on the business of KM India as its primary business and KM India is a subsidiary of KM. KM currently holds 55.32% of KM India.

 

KM India has been involved in the wedding services industry in South India since 2004. KM is the brand, which is a short form for ‘Kalyana Malai’ meaning ‘Wedding Garland’ in South Indian language. The services offered by KM India include Matrimonial (Matchmaking) Services and Wedding Services. Unless otherwise specified, KM and KM India shall hereinafter be collectively referred to as “KM” or the “Company”.

 

KM’s Matrimonial Services include matchmaking and partner identification, through multiple delivery channels viz. print and visual media, website, physical centers and events. The Wedding Services of KM covers 15 different services, including food and beverages, guest services, decorations, event planning and event management. In order to increase the Wedding Services business, KM intends to lease and/or own wedding halls (physical infrastructures where a wedding is conducted, similar to banquet halls of hotels) and provide Wedding Services for the weddings conducted in these halls.

 

KM currently focuses on the geographic locations of Tamil Nadu and Andhra Pradesh (two of the Southern States in India). We believe that the Company is well positioned to exploit the potential of the Wedding Services market because of its presence in this market since 2004 and respected brand name. The Company is also planning to expand its services in the United States during 2014. KM’s 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 the business positioning of KM.

 

KM India has been servicing the Indian Diaspora in the United States through its 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 & San Antonio) which was attended by around 1,200 prospective matrimonial customers. In October 2013, KM India 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. KM’s tv show is a 30 minute matrimonial-related program produced by KM and telecast once a week by Sun TV. The TV program introduces profiles of individuals seeking to be matched and also incorporates an entertainment based “debate show” which covers various “topics of social impact” which are discussed and debated upon by professionals & experts.

 

Based on the experience gained from the above activities, KM believes that the Indian Diaspora in the United States presents a lucrative market that requires Matrimonial and Wedding Services offered by KM but also requires a customized and focused approach for exploiting the same. The plan for exploring this business opportunity includes setting up offices in the U.S. (fiscal 2014), providing Wedding Services for weddings to be conducted in India by Indians in the U.S. (fiscal 2014), launching a customized website for Matrimonial Services in the U.S. market (fiscal 2015) and providing Wedding Services for conducting weddings locally in the United States (fiscal 2016-17).

 

Matrimonial Services (Matchmaking Services)

 

In 2004, KM India entered into the Matrimonial Services industry by acquiring three different firms involved in various aspects of matrimonial services, as set forth below:

 

A.

Pyramid Creations, a production firm providing matrimonial service through a TV program named KM which commenced in 2000;

B.

Kalyanamalai.net, a firm providing matrimonial service through Online Platform since 2001; and

C.

Kalyanamalai, a Matrimonial Magazine (Publication) firm established in 2002.

 

The Company consolidated these activities and became a single comprehensive Matrimonial Service provider with multiple delivery channels viz. print and visual media, website, physical centers and events.

 

For the Matrimonial Services, KM uses the brand name ‘Kalyanamalai’. While continuing the acquired 3 service delivery platforms listed above (TV, online platform and magazine publication), KM also expanded its service by opening 19 centers across South India. Further, new services such as ‘Joint Prayers’ (where those seeking a life partner seek divine intervention for early and hurdle free wedding) and Community Meet (where those seeking a life partner falling under a similar group, e.g. profession, socio-economic background, etc. come together to explore the right match for them) were introduced. We believe that the wide range of services that we provide to our customers through various platforms makes KM a comprehensive service provider and a leader in the South Indian wedding market.

  

One of the key strategies of KM is to take advantage of new age technologies. Further, in order to ensure the reach of KM’s service to its target groups, which also includes customers from Tier 2 and Tier 3 cities (explained in detail below), where significant percentages of population have limited or no access to the internet, KM created a network of brick and mortar centers supported by an online technology platform for enabling matchmaking. Tier 2 and Tier 3 cities are non-metro cities that are generally defined based on their populations and commercialization as determined by a multitude of factors such as sales tax revenue, number of bank branches, internet connections, and umber of skilled workers etc. Tier 2 cities have a population of 1 to 5 million and Tier 3 cities are those cities which have a population of less than 1 million. Tier 1 cities are cities with populations exceeding 5 million.

 

As such, KM has created a unique combination of technology and tradition, giving the Company a competitive edge in the market place. With its commitment to servicing customers’ specific needs, KM has been able to provide products ranging from 60 USD to 1,600 USD for matrimonial services. Also, since its beginning, KM has been able to service a large group of customers and has grown to become a major matrimonial service provider in South India, having successfully enabled 200,000 matches. 

 

KM has been a leader in the industry and has to its credit various “firsts” in terms of introduction of new concepts and services, including;

 

A.

Profile introduction on TV

B.

A magazine focusing exclusively on / dedicated to matrimony, having color photographs of the profiles

C.

Conducting Community Meets across the geographies for customer acquisition and service

D.

Introducing the concept of matrimonial services assisted by KM’s personnel (“officers”) who provide personalized service to the customers in their endeavor to finding a match.

Improved search tools and matching logic for the online platform

E.

Forward integration of Wedding Services with the matrimonial services

 

One aspect of the Company that sets it apart from its competitors is the introduction of profiles of individuals seeking to be matched, through a weekly TV series that has been running since 2000. The TV series is telecast on SUN TV, which is ranked No. 1 in terms of viewership and reach in South Indian TV Market. SUN TV holds a bouquet of 33 channels and has the highest reach, frequency and patronage of millions of viewership all over the world.

We believe our weekly TV series gives us a competitive edge for driving the brand as well as providing efficient service to profile seekers. To make the best of this, KM has implemented a unique design for the program to enable the brand to reach a far larger audience than just the profile seekers. The program design incorporates an entertainment based ‘debate show’ as an integral part of the program, which covers various ‘topics of social impact’ which are discussed and debated upon by professionals & experts. This debate is moderated and judged by a professional and/or celebrity. By covering interesting topics, this program has attracted large numbers of followers and has also enabled KM to get over 50 celebrities on the KM platform including policy makers, administrators, politicians, actors and other celebrities. Filming for this ‘debate show’ is held in front of a large live audience (ranging from 1,000 - 3,000 live viewers). This has created a strong brand positioning for KM and has created an ideal launching platform for the wedding services of KM. Further, this has helped KM gain recognition as a player suited to cater to the requirements of the target customer base.

 

We believe that being telecast on the SUN TV network affords the Company the following advantages;

 

·

Immediate brand recognition among the viewers of the program with the services offered by ‘KM’ and

·

Numerous options for the profiles for finding the right partner filtered through a wide base.

 

Entry into the Wedding Services market

 

After having established KM as a leading and respected service provider in the matrimonial industry, KM entered into other areas of wedding services. KM has entered the wedding event management and related services segments including wedding catering services by acquiring certain intellectual property rights from Unique Marriage Services, a firm involved in the wedding catering and management services since 1980. Unique Marriage Services was providing Wedding services under the brand name “Athithi”. KM’s acquired intellectual property rights include the use of the brand name “Athithi”, business know-how pertaining to wedding event management, catering knowhow, talent pool, skilled labor, vendor supply chain network, wedding hall owners network, sourcing strategy, proprietary recipe of signature dishes, market intelligence, etc.

 

With the addition of Wedding Services, where the revenue per customer is around 12,000 to 18,000 USD, KM is able to build on the current Matrimonial Services customers where the average revenue per customer is around 120 USD, to use our Wedding Services. The Company became one of the early entrants in the industry to provide an integrated Wedding Service. Keeping in line with KM’s presence in the geographical area of Tamil Nadu, KM focuses on servicing the South Indian community from providing the matchmaking services to conducting the wedding event.

 

KM has created a wide range of services as part of conducting the wedding event for South Indian weddings. The range of services typically includes: 

 

 

 

In order to increase the Wedding Services business, KM intends to lease and/or own wedding halls (physical infrastructures where the wedding is conducted, similar to banquet halls of hotels) and provide Wedding Services for the weddings conducted in these halls. KM plans to roll out 10 such wedding infrastructures in India during the period 2014-2018, with the first 2 halls to be rolled out in fiscal 2014. KM also plans to explore such wedding infrastructure opportunities in the U.S. after 2016.

 

The wedding hall would facilitate the conduct of wedding rituals, and houses all the necessary facilities like rooms for families, assembly hall, dining hall, etc. KM is in talks with infrastructure owners and is exploring the possibility of creating a chain of branded wedding halls through leased wedding infrastructure to promote its services with its main focus on the high-income group and higher middle-income group target audience.

  

The objective of KM’s wedding halls is to create ‘quality wedding infrastructure’ where turnkey services for the wedding can be provided by KM. This will position KM as an organized player in a currently largely unorganized market.

 

 

 

By providing wedding event management services along with quality wedding halls, we believe we will be able to capitalize on the growing ‘wedding market’ by focusing on providing personalized and quality service and straddling across the value chain in this business segment with a focus on the target groups of high-income and high middle-income groups. We further believe that this will make KM a unique player in the market with services offered starting from matrimony and culminating in the wedding infrastructure and event management service.

 

Strategic Alliances

 

The Company has entered into various strategic relationships, in an endeavor to create and position the KM brand.

 

 

·

Satellite Channel SUN TV: a leading Satellite Channel having a wide reach as well as high viewership among the Tamil Community1. The Company’s agreement with SUN TV (the “SUN TV Agreement”) enables the Company to screen the Kalyanamalai TV program wherein the profiles of individuals seeking to be matched are introduced on TV. The TV program started in the year 2000 by the firm, Pyramid Creations, and continues for over 13 years as a weekly episode. The program, which includes an entertainment component, which helps promote the brand image of KM among this audience. A true and correct copy of the SUN TV Agreement is attached hereto as Exhibit 10.1 and is incorporated herein by reference.

·

Publication: The Company entered into an agreement with Vasan Print Products Private Limited (the “Printing Agreement”) to print the Company’s matrimonial magazine, Kalyanamalai. The Company entered into an agreement with Vasan Publications Private Limited (the “Distribution Agreement”) to distribute our Kalyanamalai magazine. True and correct copies of the Printing Agreement and Distribution Agreement are attached hereto as Exhibit 10.2 and Exhibit 10.3 respectively, and are incorporated herein by reference.

 

 ¹ Source: http://sunnetwork.in/tv-channel.aspx

Indian Wedding Market

 

Indian Weddings typically are conducted over two calendar days in a traditional wedding hall, which is capable of accommodating a large number of guests averaging around 500 - 5,000 guests for a wedding. The wedding events are evolving from being a religious one to a social one and are normally among the top spending events in one’s life.

 

Key business drivers for the industry are:

 

·

Demographic profile of the Indian population. Over 50% of India’s population are in the age group below 25 and 65% are below 35 years. 2

·

With the economic growth and consequent improvement in the disposable income of the Indian middle and upper middle class, wedding expenses are on the rise.

·

With the changing social profile, large numbers of young women are becoming earning members of the society thereby having higher incomes and increased discretionary spending.

·

A focus on maintaining the traditional values and seemingly increasing the rigor of adherence to these values.

·

Wedding events getting evolved from being a small family event to a status symbol as well as social positioning.

·

Incorporating entertainment for improved social positioning.

·

Continuously increasing circle of friends and relatives resulting in higher attendance for the wedding (social networking).

 

We believe these factors provide a great opportunity for various players involved in the wedding services.

 

There are a wide range of wedding services which are required in the market including:

 

·

Pre-Wedding – Matchmaking & Matrimonial Services

·

Wedding – Event Management Services & Wedding Shopping (beauty treatment, salon, spa)

·

Post-Wedding – Honeymoon packages and other related services.

 

Indian weddings at the high end of the society have always been an event of huge magnitude in terms of its grandeur. India’s burgeoning middle class, now 50 million strong and expected to grow steadily over the next decade reaching 200 million by 2020³, are turning weddings into a showcase event of their growing disposable incomes and newfound appetites for the goodies of the global marketplace. The change is visible in the middle class who wants the flavor and ambience of elite weddings. They too are spending and want the best available with improved quality and incorporating new concepts and themes. Thus, while continuing to be a religious event, weddings have various aspirational angles for improved social positioning. 

 

 With weddings becoming more and more aspirational, various opportunities and fresh services are getting introduced. Wedding planners belong to the event management industry, which is growing at a fast and steady rate. While this industry is still nascent and evolving in India, Indian wedding event management services companies have clearly demonstrated their capabilities in successfully managing several large weddings and mega national and international events over the past few years. With rising incomes, people are also spending more on weddings, parties and other personal functions. However, with the lack of wedding infrastructure and the unorganized management of most wedding events, there exists a big gap and a potential high growth in this segment of the industry.

 

One of the key requirements for a good wedding, specifically in the southern part of the India is the requirement of a wedding hall. As the wedding events are generally conducted over 2 to 3 days, people generally prefer to have the events exclusively in the wedding halls. Wedding halls are generally owned and operated by an unorganized sector and mostly, even in metro cities like Chennai, the infrastructure of the wedding hall has not evolved with the changing times. KM believes that even the top quality halls in most cities in India do not have basic infrastructure like requisite car parking and air conditioning. It is for this reason, that banquet halls of various star hotels have been used for wedding parties. In fact, various religious offerings which are part of the wedding ceremony are restricted in these halls and hence, the customers end up having the ceremony in a different place and a party in the banquet hall. This is where the KM business model is relevant to the traditional Indian Wedding Services Market, and its value is likely to be perceived more so in its target geographies and its focus market segments.

 

² Source: http://en.wikipedia.org/wiki/Demographics_of_India

³ Source: http://www.ey.com/GL/en/Issues/Driving-growth/Middle-class-growth-in-emerging-markets---China-and-India-tommorrows-middles-classes

 

While typically caterers double up as wedding event managers, they generally take care of the conduct of the wedding, after the wedding hall is booked. Thus, they do not take care of the wedding hall requirements. Further, with good wedding halls being in constant demand, pre-booking is done around a year in advance. There is a huge time gap between the decision on the hall and arrangement of a contractor. Further, most of the wedding contractors are cooks by themselves. Hence, the major focus of a contractor goes into food and its quality and generally service requirements are given a back seat and so is the requirement of logistics and rituals associated with the wedding. Thus, the business of wedding services is largely unorganized and split across multiple categories of service providers.

 

KM’s Expansion in the U.S. Market 

 

KM India has been servicing the Non Resident Indian (NRI) & Persons of Indian Origin (PIO) communities in the United States since 2004. KM’s SUN TV Program is popular among the South Indian NRI community in the U.S.

 

With regard to the NRI and PIO population in the U.S.:

 

·

As of 2003, there are 200,000 NRI millionaires in the U.S.4;

·

As of 2003, one out of 9 Indians in the U.S. are millionaires, which represents around 10% of all the millionaires in the U.S.5;

·

As of 2011, the American NRI median income is estimated to be over $60,000 USD compared to the national average of $38,885 USD, making it the wealthiest immigrant group in the United States6.

 

This is a large market for Wedding Services including Matrimony and Turn Key Wedding Event Management Services in the U.S. Over the last couple of years around 30% of KM’s Wedding Services (Athithi) revenues are generated out of the customers who are based out of the U.S.

 

Further, KM plans to launch a special web-based service for U.S. Indians to match U.S. resident Indians to those in India to find the right life partner in fiscal 2015.

 

Since 2011, KM’s ties with the U.S. have increased substantially. KM’s management team visited and met with various South Indian groups and associations across the length and breadth of the U.S. and has created close relationship with these groups/associations. KM has established relationships with a large number of associations from across the U.S. including the following:

 

·

Federation of Tamil Sangams of North America (FeTNA)

·

Tamil Sangam of Greater Washington

·

Tamil Association of Greater Delaware Valley

·

Connecticut Tamil Sangam

·

Las Vegas Tamil Sangam

·

Boston Thamil Association

·

Muthamizh Sangam of Central Florida

·

Kentucky Tamil Sangam

·

Greater Atlanta Tamil Sangam (GATS)

·

New Jersey Tamil Arts and Cultural Society (NJTACS)

·

Chicago Tamil Sangam

·

Austin Tamizh Sangam

·

Tamil Sangam - Michigan

·

Minnesota Tamil Sangam (MNTS)

·

Richmond Tamil Sangam

·

Lexington Tamil Cultural Association

·

Alabama Tamil Sangam

·

New England Tamil Sangam

·

Tampa Tamil Association

·

The Tamil Association of Colorado

·

Arkansas Tamil Sangam

·

Harrisburg Area Tamil Sangam

·

Bharati Tamil Sangam Fremont, CA

⁴Source: http://www.ethnikpr.com/ss_market.php

⁵ Source: http://www.nri-worldwide.com/index.cgi?cat=16&o=10

⁶ Id.

In October 2013, we filmed our Sun TV television program in six locations throughout the United States, including New York City, South Windsor, New Brunswick, San Jose, Dallas and Houston. These episodes will assist in our launch throughout the United States.

 

KM plans to expand its presence in the U.S. during 2014 and focus on being a market leader in providing “Turn Key Wedding Management Services” for conducting weddings in India. With an already strong brand presence among the target population, KM intends to invest further in local presence, marketing and service offering. With the launch of KM Wedding Halls, which suits the infrastructure requirements expected by those who are used to American comforts, coupled with the brand, experience and local presence and marketing, KM expects to have over 50-60% of its revenues servicing this market by 2017. Further, Thematic Weddings are popular among the Indian population settled in the U.S., accordingly, KM will focus on providing such weddings, which KM believes will provide higher revenue and also brand positioning among the community.

 

The roll out plan for expansion in the U.S. includes setting up offices in the U.S. for exploring this business opportunity (fiscal 2014), providing Wedding Services for weddings to be conducted in India by Indians in the U.S. (fiscal 2014), launching a customized website for Matrimonial Services in the U.S. market (fiscal 2015), and also providing Wedding Services for conducting weddings locally in the U.S. (fiscal 2016-17).

 

Competition

 

Being an unorganized industry, the industry consists of a wide spectrum of service providers. Each service provider focuses on one or a few services required for a wedding. Hence, there are not many organized players who focus on a wide range of services similar to the services offered by KM.

 

There are various wedding halls, which enable the customers to identify wedding contractors. Similarly, the wedding contractors who are mainly focusing on providing food for the occasion also enable arrangement of other logistic support including decoration, flowers, etc. Another category that is being used is the star hotels for a “reception” for a wedding, which covers all the requirements. This generally covers the hall (banquet hall), food, decorations, services, etc.

 

A comparison chart across various organized players and major categories of players is as follows:

 

Name	Matrimony	Wedding Planning	Event Management	Event Infra
KM	Strong	Medium	Strong	Medium
Bharat Matrimony	Strong	No	No	No
Shaadi.com	Strong	No	No	No
Times matrimony	Strong	No	No	No
Event Managers	No	No	Strong	No
Wedding Halls	No	No	No	Strong

 

Thus, while there is competition in each of the segments, the focus of KM is to provide a wide range of services from matrimony to event infrastructure and event management to create a new benchmark for an organized and comprehensive service provider in this industry.

 

Government Regulations

 

We are subject to a number of U.S. federal and state, and foreign laws and regulations that affect companies conducting business on the Internet, many of which are still evolving and being tested in courts, and could be interpreted in ways that could harm our business. These may involve user privacy, rights of publicity, data protection, content, intellectual property, distribution, electronic contracts and other communications, competition and consumer protection. In particular, we are subject to federal, state, and foreign laws regarding privacy and protection of user data. Foreign data protection, privacy, and other laws and regulations are often more restrictive than those in the United States. U.S. federal and state and foreign laws and regulations are constantly evolving and can be subject to significant change. In addition, the application and interpretation of these laws and regulations are often uncertain, particularly in the new and rapidly-evolving industry in which we operate. There are also a number of legislative proposals pending before the U.S. Congress, various state legislative bodies, and foreign governments concerning data protection, which could affect our business.

 

As can be expected with any revolutionary change in the landscape of global computing, certain legal issues arise. Laws and regulations directly applicable to Internet communications, e-commerce and advertising are becoming more prevalent and due to the increasing popularity and use of the Internet, it is likely that additional laws and regulations will be adopted.  Compliance with these laws and regulations may involve significant costs or require changes in business practices that result in reduced revenue. Noncompliance could result in penalties being imposed on our Company, or an order that we stop the alleged noncompliant activity, either of which would substantially harm our business.

 

Further, there are a number of legislative proposals pending before the U.S. Congress, various state legislative bodies and foreign governments concerning data protection and many states have passed laws that require notifications to be sent to customers when there is a security breach of personal data. The interpretation and application of current laws regarding data protection are still uncertain and in flux. It is possible that these laws may be interpreted and applied in a manner that is inconsistent with our data practices. If so, in addition to the possibility of fines, this could result in an order requiring that we change our data and disclosure practices, which could have an adverse effect on our business. Complying with these various laws could cause us to incur substantial costs or require us to change our business practices in a manner adverse to our business.

 

Intellectual Property

 

Pursuant to an Intellectual Property Agreement between KM India and Unique Marriage Services dated November 29, 2012, a copy of which is attached hereto as Exhibit 10.4 and incorporated herein by reference, KM India acquired the right to utilize certain intellectual property comprising of use of the brand name “Athithi”, business know-how pertaining to wedding event management, catering knowhow, talent pool, skilled labor, vendor supply chain network, wedding hall owners network, sourcing strategy, proprietary recipe of signature dishes, market intelligence, etc. Additionally, KM India has secured the website domain name www.kmmatrimony.com. We plan to apply for trademark protection in the United States of the brand KM. We may later seek patent protection in the United States of the technologies that drive our services.  Securing these protections will be material to our business as it will raise awareness of our brand and services and protect our ideas from use by other companies with a similar business model.  

 

Companies in the Internet, technology, and media industries own large numbers of patents, copyrights, trademarks, and trade secrets and frequently enter into litigation based on allegations of infringement, misappropriation, or other violations of intellectual property or other rights. We intend to protect our future intellectual property rights by relying on federal, state and common law rights, as well as contractual restrictions. We hope to control access to our proprietary information by entering into confidentiality agreements with our employees, consultants or any third parties we may engage.

    

Employees and Consultants

 

As of the date of this Offering, the Company has approximately 81 full-time employees, 7 part-time employees and 2 consultants that operate as independent contractors. We intend to increase the number of our employees and consultants to meet our needs as the Company grows.

 

Legal Proceedings

 

We know of no material, existing or pending legal proceedings against our Company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which our directors, officers or any affiliates, or any registered or beneficial shareholder is an adverse party or has a material interest adverse to our interest.

 

MANAGEMENT’S DISCUSSION AND ANALYSIS

 

THE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ TOGETHER WITH THE CONSOLIDATED FINANCIAL STATEMENTS OF KM WEDDING EVENTS MANAGEMENT, INC. AND THE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS INCLUDED ELSEWHERE IN THIS REGISTRATION STATEMENT ON FORM S-1.

 

PERIOD ENDED SEPTEMBER 30, 2013

 

Results of Operations

 

For the period from April 1, 2013 to September 30, 2013, the Company earned $606,952 in revenues during the period. 80% (75% for year ending March 31, 2013) of the revenues were generated from Matrimonial Services and 20% (25% for year ending March 31, 2013) from the Wedding Services. The Company’s focus on high value customers has started showing results where the average revenue per customer for Matrimonial Service increased by around 55% in comparison to the year ending March 31, 2013.

 

The Company incurred $672,253 of operating expenses, which included $204,046 in matrimonial service expenses (44% of matrimonial revenues down from 44% for year ending March 31, 2013), $100,583 in Wedding Service expenses (84% of wedding services revenues, up from 73% for year ending March 31, 2013). The Company also incurred $198,804 (33% of income, same for year ending March 31, 2013) on general and administrative expenses, $152,706 (25% of income up from 22% for year ending March 31, 2013) in personnel costs, and $16,114 in depreciation and amortization costs.

 

For the period from April 1, 2013 to September 30, 2013, the Company had a net loss of $80,191 and a loss per share of $0.001.

 

Liquidity and Capital Resources

 

At September 30, 2013, the Company had cash and total assets of $1,601,275. At September 30, 2013, the Company had total liabilities of $1,008,688 including $124,071 (down from $182,970 as on March 31, 2013) of accounts payable and accrued liabilities relating to accrued interest expense, unpaid professional fees, and unpaid general expenditures, $81,326 (down from $117,579 as on March 31, 2013) in income tax and other statutory liabilities, $262,083 (down from $471,163 as on March 31, 2013) in short-term loans and current portion of long-term debt, $260,946 in unsecured loans (up from $330,265 as on March 31, 2013), other current liabilities of $236,889 (down from $250,995 as on March 31, 2013) and non-current liabilities of $43,373 (down from $98,184 as on March 31, 2013).

 

Cashflows from Operating Activities

 

During the period from April 1, 2013 to September 30, 2013, the Company used cash of $288,401 for operating activities. This is contributed by Accounts payable reducing by $58,899 and statutory liability reducing by $36,253. The company invested in long term fixed deposit to the tune of $129,434.

 

Cashflows from Investing Activities

 

During the period from April 1, 2013 to September 30, 2013, the Company used cash of $263,230 for investing activities. KM invested $229,000 for acquiring stake in KM India. The balance investment went in to general capital expenses.

 

Cashflows from Financing Activities

 

During the period from April 1, 2013 to September 30, 2013, the Company obtained cash of $224,125 from financing activities relating to the use of cash to Investing and Operating activities.

 

At September 30, 2013, the Company will require additional financing from this Offering through the issuance of equity or debt, or through obtaining a credit facility, to execute its plan of operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. 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.

 

Brief Disclosure of Long Term Contractual Obligations

 

As at September 30, 2013, the Company has Long Term Debts in the form of Secured Loans against the respective assets/by way of assignment of the trade receivables of the Company and Capital Lease obligations secured against respective assets. The Total Long Term Debts as at September 30, 2013 is $16,499 and repayable in a period of five years or under:

 

Less Than One Year $4,586

One to Three Years $15,509

More than Three Years $991

 

YEAR ENDED MARCH 31, 2013

 

Results of Operations

 

For the period from October 24, 2012 (date of inception) to March 31, 2013, the Company (on a consolidated base including the performance of its subsidiary KM Matrimony Private Ltd. through the year April 1, 2012 to March 31, 2013), earned $1,436,632 in revenues 75% of the revenues were generated from Matrimonial Services and 25% from the Wedding Services.

 

The Company also incurred $1,668,749 of operating expenses, which included $591,958 in matrimonial service expenses (55% of matrimonial revenues), $261,988 in Wedding Service expenses (73% of wedding services revenues). The Company also incurred $472,105 (33% of income) on general and administrative expenses, $311,451 (22% of income) in personnel costs, and $31,247 in depreciation and amortization costs.

 

For the period from October 24, 2012 (date of inception) to March 31, 2013, the Company had a net loss of $278,938 and a loss per share of $ 0.007.

 

Liquidity and Capital Resources

 

At March 31, 2013, the Company had cash and total assets of $842,498. At March 31, 2013, the Company had total liabilities of $1,120,891 comprising $182,970 of accounts payable and accrued liabilities relating to accrued interest expense, unpaid professional fees, and unpaid general expenditures, $117,579 in income tax and other statutory liabilities, $471,163 in short-term loans and current portion of long-term debt, other current liabilities of $250,995 and non-current liabilities of $98,184.

 

Cashflows from Operating Activities

 

During the period from October 24, 2012 (date of inception) to March 31, 2013, the Company used cash of $91,055 for operating activities. This is owing to the loss incurred by the company in its operations. The accounts payable increased by $78,028 and other liabilities increased by $54,124 during this period.

 

Cashflows from Investing Activities

 

During the period from October 24, 2012 (date of inception) to March 31, 2013, the Company used cash of $33,460 for investing activities. This represents investment in various fixed assets, plant and equipment required for the business.

 

Cashflows from Financing Activities

 

During the period from October 24, 2012 (date of inception) to March 31, 2013, the Company obtained cash of $477,927 from financing activities relating to the use of cash to Investing and Operating activities. The Company raised $592,808 during the period from investors. Also, long term debts of $246,875 was closed and short term debts of $131,994 was obtained by the Company.

 

At March 31, 2013, the Company will require additional financing from this Offering through the issuance of equity or debt, or through obtaining a credit facility, to execute its plan of operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. 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.

 

Brief Disclosure of Long Term Contractual Obligations

 

As on 31^st March 2013, the Company has Long Term Debts in the form of Secured Loans against the respective assets/by way of assignment of the trade receivables of the Company and Capital Lease obligations secured against respective assets. The Total Long Term Debts as at 31 March 2013 is $ 78,246 and repayable in a period of five years as under:

 

Less Than One Year $23,630

One to Three Years $36,553

More than Three Years $18,063

 

GENERAL DISCUSSION

 

The successful implementation of our business plan is dependent upon receiving sufficient funds from this Offering and/or additional funding from management, the issuance of equity or debt, or through obtaining a credit facility. Substantial expenditures will be required to enable the Company to scale up its operations and quality of services. While the Company believes that if all shares offered hereunder are sold, the net proceeds should be sufficient to permit the Company to continue operations and meet its capital requirements for approximately twelve (12) months, it is anticipated that the Company may need to raise additional capital to maintain operations, facilitate future growth and support its long-term growth initiatives. In addition, if not all of the shares offered hereunder are sold, the Company will need to obtain substantial additional funds much sooner, and possibly within twelve (12) months after this Offering, to grow and expand its operations. The Company’s established bank-financing arrangements will not be adequate. Therefore, it is likely that the Company would need to seek additional financing through subsequent future private sales of its debt or equity securities to fund its growth plans.

 

There can be no assurance, however, that such efforts can generate availability of additional funds when needed, or on terms acceptable to the Company, if at all. Any such additional financing may result in significant dilution to existing stockholders. If adequate funds are not available, the Company may be required to curtail its expansion plans, which will adversely affect its revenue and profitability.

 

As of effectiveness of our registration statement of which this prospectus is a part, the Company will not become a fully reporting company, but rather, will be subject to the reporting requirements of Section 15(d) of the Securities Exchange Act of 1934. We will be required to file periodic reports with the SEC which will be immediately available to the public for inspection and copying (see “Where You Can Find More Information” elsewhere in this prospectus). Except during the year that our registration statement becomes effective, these reporting obligations may be automatically suspended under Section 15(d) if we have less than 300 shareholders. If this occurs after the year in which our registration statement becomes effective, we will no longer be obligated to file periodic reports with the SEC and your access to our business information would then be even more restricted; however, that filing obligation will generally apply even if our reporting obligations have been suspended automatically under section 15(d) of the Exchange Act prior to the due date for the Form 10-K. After that fiscal year and provided the Company has less than 300 shareholders, the Company is not required to file these reports. If the reports are not filed, the investors will have reduced visibility as to the Company and its financial condition.

 

In addition, as a filer subject to Section 15(d) of the Exchange Act, the Company is not required to prepare proxy or information statements, and our common stock will not be subject to the protection of the ongoing private regulations. Additionally, the Company will be subject to only limited portions of the tender offer rules, and our officers, directors, and more than ten (10%) percent shareholders are not required to file beneficial ownership reports about their holdings in our Company, and will not be subject to the short-swing profit recovery provisions of the Exchange Act. Further, more than five percent (5%) holders of classes of our equity securities will not be required to report information about their ownership positions in the securities. This means that your access to information regarding our business will be limited.

 

As a reporting company under the Exchange Act, we are required to comply with the internal control evaluation and certification requirements of Section 404 of the Sarbanes-Oxley Act of 2002. Section 404 of the Sarbanes-Oxley Act requires annual management assessments of the effectiveness of our internal control over financial reporting, starting with the second annual report that we file with the SEC after the consummation of this Offering. In connection with the implementation of the necessary procedures and practices related to internal control over financial reporting, we may identify deficiencies that we may not be able to remediate in time to meet the deadline imposed by the Sarbanes-Oxley Act for compliance with the requirements of Section 404. We will be unable to issue securities in the public markets through the use of a shelf registration statement if we are not in compliance with Section 404. Furthermore, failure to achieve and maintain an effective internal control environment could have a material adverse effect on our business and share price and could limit our ability to report our financial results accurately and timely.

 

Critical Accounting Policies

 

Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

 

We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the Notes to our audited financial statements. In general, management’s estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.

 

Recently Issued Accounting Pronouncements

 

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

 

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

 

The following table sets forth the names and ages of our current director(s) and executive officer(s), the principal offices and positions held by each person and the date such person became a director and/or executive officer. Our Board of Directors appoints our executive officers who serve at the pleasure of the Board. Our directors serve until the earlier occurrence of the election of his or her successor at the next meeting of shareholders, death, resignation or removal by the Board of Directors.

 

Name	Age	Position
V. Venkatesan alias Mohan	62	Chairman and Founder
Meera Nagarajan	50	Managing Director and CEO
V.Vijaya Bhaskar	37	Director of Technologies and Operations

 

V. Venkatesan (alias Mohan) – V. Venkatesan is the founding member of KM and brings over 30 years of experience in the Matrimonial and Wedding event management business. He is responsible for the marketing and brand building for the company. Before starting KM in 2004, he had worked with Binny Mills from 1971 to 1981 in the accounts department. From 1981 to 1984, he ran his own fast food and ice cream businesses. Since 1984, Mr. Venkatesan has owned a wedding event management firm and has been involved in the coordination of weddings. From 1992 to 2000, Mr. Venkatesan was a partner of a TV software export firm, Nataraj Exports Corporation, where he was involved in the production of TV Series and documentaries related to Indian culture and practice. His TV programs have been telecast over 15 countries across the globe and have been nominated for the National Pinnacle Award, one of the top awards for TV Serial production in the 80s. On account of Mr. Venkatesan’s leadership skills and extensive experience in matrimonial services, wedding event management, and TV production, he was appointed as Chairman of the Board of Directors of the Company.

 

Meera Nagarajan – Ms. Nagarajan is the Co-Founder, Managing Director, and CEO of KM and is responsible for the overall management of the business. She is also the editor of Kalyanamalai, a biweekly magazine owned by KM. Ms. Nagarajan holds a masters degree in Public Administration, Economics and Hindi (India’s national language). Before co-founding KM, Ms. Nagarajan was doing freelance writing (since 1990 for leading Tamil magazines including Kalaimagal, Ananda Vikatan and Kumudam), teaching (from 1984 to 1988 for Vivekananda Vidhyalaya School & Hindu Vidhyalaya School), and directing various TV Series (since 1993) including ‘Festivals of India’, a multi-lingual program telecast in over 10 countries. Currently, Ms. Nagarajan directs only the Kalyanamalai TV program. Ms. Nagarajan was appointed as Managing Director and CEO of the Company because of her in depth knowledge of the culture, customs and language of India and her experience as a writer and TV producer. 

 

V.Vijaya Bhaskar – Vijaya Bhaskar has been the Director of Technologies and Operations for KM India since 2007. He has a degree in Computer Science and has various additional training and degrees in technology. Mr. Bhaskar handles the technology for the Company including automation of operations, online services as well as back office support and services. From 2006 to 2007, Mr. Bhaskar worked for Info Plus Technologies as Head Indian Operations. From 1999 to 2001, Mr. Bhaskar served as Lead Tech and Business Development Manager for Nat Infotech. Since 2001 to present, he has worked for Pyramid Entertainment Exports as the Partner, Technical & Operational Head. From 2001 to 2004, he was the Technology Head for Kalyanamalai.net where he developed the complete matrimonial site. Mr. Bhaskar was appointed as Director of Technologies and Operations because of his background in technology; his services to the Company have been instrumental in enabling the scaling up of KM’s businesses by bringing in automation in various areas. 

 

Involvement in Certain Legal Proceedings

 

During the past ten years no director, executive officer, promoter or control person of the Company has been involved in the following:

 

(1) A petition under the Federal bankruptcy laws or any state insolvency law which was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;

 

(2) Such person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);

 

(3) Such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:

 

i.

Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;

 

ii.

Engaging in any type of business practice; or

 

iii.

Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;

 

(4) Such person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (f)(3)(i) of this section, or to be associated with persons engaged in any such activity;

 

(5) Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;

 

(6) Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;

 

(7) Such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:

 

i.

Any Federal or State securities or commodities law or regulation; or

 

ii.

Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or

 

iii.

Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

 

(8) Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

 

EXECUTIVE COMPENSATION

 

Summary Compensation Table. The table set forth below summarizes the annual and long-term compensation payable to our officer(s) and director(s) for the fiscal year ended March 31, 2013 for services. Our Board of Directors may adopt an incentive stock option plan for our executive officers that would result in additional compensation.

 

Name		Title		Year				Salary ($)				Bonus ($)				Stock Awards ($)				Option Awards ($)				Non-Equity Incentive Plan Compensation ($)				Nonqualified Deferred Compensation Earnings ($)				All other Compensation ($)				Total ($)
V. Venkatesan alias Mohan(1)		Chairman and Founder			2013				15,416				0				0				0				0				0				0				15,416
Meera Nagarajan(2)		Managing Director and CEO			2013				15,416				0				0				0				0				0				0				15,416
V.Vijaya Bhaskar (3)		Director of Technologies and Operations			2013				15,416				0				0				0				0				0				0				15,416

 

 

Narrative Disclosure to Summary Compensation Table

 

There are no employment contracts, compensatory plans or arrangements, including payments to be received from the Company with respect to any executive officer, that would result in payments to such person because of his or her resignation, retirement or other termination of employment with the Company, or its subsidiaries, any change in control, or a change in the person’s responsibilities following a change in control of the Company.

 

Outstanding Equity Awards at Fiscal Year-End

 

There are no current outstanding equity awards to our executive officers as of March 31, 2013.  

 

Long-Term Incentive Plans

 

There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers.

 

Compensation Committee

 

We currently do not have a compensation committee of the Board of Directors. The Board of Directors as a whole determines executive compensation.

 

Compensation of Directors

 

The compensation paid to our directors for their services on the Board of Directors of the Company is set forth above in the Summary Compensation Table.

  

Security Holders Recommendations to Board of Directors

 

Shareholders can direct communications to our Chief Executive Officer, at our executive offices. However, while we appreciate all comments from shareholders, we may not be able to individually respond to all communications. We attempt to address shareholder questions and concerns in our press releases and documents filed with the SEC so that all shareholders have access to information about us at the same time. Mr. Mohan collects and evaluates all shareholder communications. All communications addressed to our directors and executive officers will be reviewed by those parties unless the communication is clearly frivolous.

 

Director Independence

 

Our board of directors is currently composed of two members who do not qualify as an independent director in accordance with the published listing requirements of the NASDAQ Global Market. The NASDAQ independence definition includes a series of objective tests, such as that the director is not, and has not been for at least three years, one of our employees and that neither the director, nor any of his family members has engaged in various types of business dealings with us. In addition, our board of directors has not made a subjective determination as to each director that no relationships exist which, in the opinion of our board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director, though such subjective determination is required by the NASDAQ rules. Had our board of directors made these determinations, our board of directors would have reviewed and discussed information provided by the director with regard to his business and personal activities and relationships as they may relate to the Company and our management.

 

Committees

 

We do not currently have an audit, compensation or nominating committee.  The Board of Directors as a whole currently acts as our audit, compensation and nominating committees. We intend to establish an audit, compensation and nominating committee of our Board of Directors once we expand the Board to include one or more independent directors and intend to adopt a charter for each committee.

 

Our audit committee shall be primarily responsible for reviewing the services performed by our independent auditors, evaluating our accounting policies and our system of internal controls. Our compensation committee shall assist the Board in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers and periodically reviewing and approving any long-term incentive compensation or equity plans, programs or similar arrangements. Our nominating committee shall assist the Board in selecting individuals qualified to become our directors and in determining the composition of the Board and its committees.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

The following table sets forth certain information at January 16, 2014 with respect to the beneficial ownership of shares of Common Stock by (i) each person known to us who owns beneficially more than 5% of the outstanding shares of Common Stock (based upon reports which have been filed and other information known to us), (ii) each of our Directors, (iii) each of our Executive Officers and (iv) all of our Executive Officers and Directors as a group. Unless otherwise indicated, each stockholder has sole voting and investment power with respect to the shares shown. As of January 16, 2014, we had 41,646,160 shares of Common Stock issued and outstanding.

 

Title of class		Name and address of beneficial owner		Amount and Nature of Beneficial Ownership		Percentage of Common Stock (1)
Common Stock		V. Venkatesan alias Mohan		16,200,000		38.899%
Common Stock		Meera Nagarajan		5,400,000		12.966%
Common Stock		V.Vijaya Bhaskar		1,350,000		3.242%
Officers and Directors as a Group (3)				22,950,000		55.107%
Common Stock		Unifina Capital Partners LP		6,000,000		14.407%

 

⁽¹⁾ Under Rule 13d-3 promulgated under the Exchange Act, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights.

 

We are not aware of any arrangements that could result in a change of control.

 

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

 

On February 14, 2013, KM entered into a Stock Purchase Agreement with KM Matrimony Pvt Ltd, a company incorporated under the 1956 Companies Act of India (“KM India”), pursuant to which KM agreed to purchase ten million (10,000,000) shares of KM India’s common stock at a price of 11 Indian Rupees ($0.21 USD) per share for an aggregate purchase price of up to two million one hundred thousand dollars ($2,100,000 USD) dollars. As of January 16, 2014, pursuant to the above agreement, KM has purchased 1,393,127 shares at 11 Rupees per share ($0.201 USD at the time of the sale) in KM India on April 3, 2013 for $280,000 USD. A true and correct copy of the Stock Purchase Agreement is attached hereto as Exhibit 10.5 and is incorporated herein by reference.

 

On February 14, 2013, KM entered into a Stock Purchase Agreement with the shareholders of KM India, comprised of Mr. Venkatesan Vaidhyanathan, Mrs. Meera Nagarajan, Mr. Sridhar Kalyanasundaram, Mr. Vijaya Bhaskar Venkatesan and Mrs. Nithya Vijaya Baskar, pursuant to which KM shall purchase Three Million One Hundred and Fifty Thousand (3,150,000) shares of KM India’s common stock from Mr. Venkatesan Vaidhyanathan, Mrs. Meera Nagarajan, Mr. Sridhar Kalyanasundaram, Mr. Vijaya Bhaskar Venkatesan and Mrs. Nithya Vijaya Baskar payable in two tranches as follows: (i) Tranche A: One Million One Hundred and Fifty Thousand (1,150,000) shares of KM India’s common stock at a purchase price of 11 Indian Rupees ($0.21 USD) per share (“Tranche A”); and, (ii) Tranche B: Two Million (2,000,000) shares of KM India’s common stock at a purchase price equal to the fair market value of KM India’s shares at the time of purchase (“Tranche B”). As of January 16, 2014, KM has purchased 1,120,018 shares in KM India on April 26, 2013 from Tranche A for an aggregate of $229,000 USD from two of the shareholders of KM India viz. Mr. Venkatesan Vaidhyanathan (562,455 shares for $115,000 USD) and Mrs. Meera Nagarajan (557,564 shares for $114,000 USD). The remaining Tranche A shares and the Tranche B shares have to be sold within 3 years from February 14, 2013. A true and correct copy of the Stock Purchase Agreement is attached hereto as Exhibit 10.6 and is incorporated herein by reference.

 

Other than the foregoing, none of the following persons has any direct or indirect material interest in any transaction to which we were or are a party since the beginning of our last fiscal year, or in any proposed transaction to which we propose to be a party:

 

	(A)	any of our director(s) or executive officer(s);
	(B)	any nominee for election as one of our directors;
	(C)	any person who is known by us to beneficially own, directly or indirectly, shares carrying more than 5% of the voting rights attached to our Common Stock; or

(D)

any member of the immediate family (including spouse, parents, children, siblings and in-laws) of any of the foregoing persons named in paragraph (A), (B) or (C) above.

 

LEGAL MATTERS

 

The validity of the shares sold by us under this prospectus will be passed upon for us by Zouvas Law Group, P.C. in San Diego, California.

 

EXPERTS

 

Manohar Chowdhry & Associates, our independent registered public accountant, has audited our financial statements included in this prospectus and Registration Statement to the extent and for the periods set forth in their audit report. Manohar Chowdhry & Associates has presented its report with respect to our audited financial statements.

 

COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES

 

Our Certificate of Incorporation provides that we shall indemnify our directors and officers to the fullest extent permitted by Delaware law and that none of our directors will be personally liable to the Company or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability:

 

• for any breach of the director’s duty of loyalty to the Company or its stockholders;
• for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of the law;
• under Delaware law for the unlawful payment of dividends; or
• for any transaction from which the director derives an improper personal benefit.

These provisions require us to indemnify our directors and officers unless restricted by Delaware law and eliminate our rights and those of our stockholders to recover monetary damages from a director for breach of his or her fiduciary duty of care as a director except in the situations described above. The limitations summarized above, however, do not affect our ability or that of our stockholders to seek non-monetary remedies, such as an injunction or rescission, against a director for breach of his fiduciary duty.

 

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, we have been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

  

WHERE YOU CAN FIND MORE INFORMATION

 

We have filed with the SEC a Registration Statement on Form S-1 under the Securities Act, and the rules and regulations promulgated thereunder, with respect to the Common Stock offered hereby. This prospectus, which constitutes a part of the Registration Statement, does not contain all of the information set forth in the Registration Statement and the exhibits thereto. While we have summarized the material terms of all agreements and exhibits included in the scope of this Registration Statement, for further information regarding the terms and conditions of any exhibit, reference is made to such exhibits.   Upon effectiveness of this prospectus, we will be subject to the reporting and other requirements of Section 15(d) of the Securities Exchange Act of 1934 and will file periodic reports with the Securities and Exchange Commission.  We will make available to our shareholders annual reports containing financial statements audited by our independent auditors and our quarterly reports containing unaudited financial statements for each of the first three quarters of each year; however, we will not send the annual report to our shareholders unless requested by an individual shareholder.

 

For further information with respect to us and the Common Stock, reference is hereby made to this Registration Statement and the exhibits thereto, which may be inspected and copied at the principal office of the SEC, 100 F Street NE, Washington, D.C. 20549, and copies of all or any part thereof may be obtained at prescribed rates from the SEC’s Public Reference Section at such addresses. Also, the SEC maintains a World Wide Web site on the Internet at http://www.sec.gov that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. To request such materials, please contact Ms. Meera Nagarajan, our Managing Director and Chief Executive Officer.

INDEX TO FINANCIAL STATEMENTS

 

Index	Page
KM Wedding Events Management, Inc. – Condensed Consolidated Financials – For the Year Ended March 31, 2013	41
KM Wedding Events Management, Inc. – Condensed Consolidated Interim Financials – For the Period Ended September 30, 2013	59
KM Matrimony Private Limited – Condensed Financials – For the Period Ended March 31, 2013	73
KM Matrimony Private Limited – Condensed Interim Financials – For the Period Ended September 30, 2013	89

 

 

KM WEDDING EVENTS MANAGEMENT, INC.

(A Development Stage Company)

 

Consolidated Financial Statements

 

For the year ended March 31, 2013

 

 

 

Index	Page
Report of Independent Registered Public Accounting Firm	42
Consolidated Balance Sheet as at March 31, 2013	43
Consolidated Statements of Income for the period ended March 31, 2013	44
Consolidated Statement of Changes in Equity	45
Consolidated Statement of Cash Flows for the period ended March 31, 2013	46
Notes to the Consolidated Financial Statements	47

 

 

 

 

KM Wedding Events Management, Inc
Consolidated Balance Sheet as at March 31, 2013
(in US Dollars $ unless otherwise stated)
			As at March 31,
		Notes	2013
ASSETS
Current assets:
Cash and cash equivalents		4	$	374,598
Accounts receivable, net		5		84,738
Other current assets		6		220,804
Total current assets				680,140
Non-current assets:
Property, plant and equipment, net		7		115,421
Intangible assets, net		8		4,495
Film costs		24		579
Other non-current assets		9		41,863
Total non-current assets				162,358
Total assets				842,498
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued liabilities		10	$	182,970
Income tax and other statutory liabilities		11		117,579
Short-term loans & current portion of long term debt		12		471,163
Other current liabilities		13		250,995
Total current liabilities				1,022,707
Non-current liabilities:
Long-term debt		12		54,616
Deferred tax liabilities		14		26,769
Other non-current liabilities		15		16,799
Total non-current liabilities				98,184
Equity:
Common stock		16	$	39,246
Additional paid-in-Capital				553,562
Accumulated deficit				(268,635	)
Equity Attributable to equity holders of the company				324,173
Non-Controlling Interest				(602,566	)
Total equity				(278,393	)
Total liabilities and equity			$	842,498

 

The accompanying notes are an integral part to these financial statements.

 

KM Wedding Events Management, Inc
Consolidated Statements of Income for the period ended March 31, 2013
(in US Dollars $ unless otherwise stated)
							For the period ended
					Notes		March 31, 2013
Revenues
Matrimonial service income					17	$	1,079,119
Wedding catering service income							357,513
Total							1,436,632
Costs and expenses
Matrimonial service expenses					18	$	591,958
Wedding catering service expenses							261,988
Personnel costs							311,451
General and administrative expenses					19		472,105
Depreciation and amortization							31,247
Total							1,668,749
Operating Income / (loss)							(232,117	)
Other income / (expenses)
Loss on sale of Property Plant & Equipment						$	(291	)
Finance charges							(36,887	)
Total other income / (expenses), net							(37,178	)
Income / (loss) before income tax expense							(269,295	)
Income taxes
Deferred tax (expense) / benefit							(9,643	)
Net income / (loss)						$	(278,938	)
Attributable to:
Equity holders of the company							(268,635	)
Non-controlling interest							(10,303	)
Net income / (loss)						$	(278,938	)
Earnings / (loss) per share - basic and diluted					20		(0.007	)

 

The accompanying notes are an integral part to these financial statements.

 

KM Wedding Events Management, Inc
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
Equity			39,246,160			$	39,246			$	553,562				Nil			$	592,808			$	(592,263	)		$	545
Net income / (loss) for the year			Nil				Nil				Nil				(268,635	)			(268,635	)			(10,303	)			(278,938	)
As at March 31, 2013			39,246,160			$	39,246			$	553,562				(268,635	)		$	324,173			$	(602,566	)		$	(278,393	)

 

The accompanying notes are an integral part to these financial statements.

 

KM Wedding Events Management, Inc
Consolidated Statement of Cash Flows for the period ended March 31, 2013
(in US Dollars $ unless otherwise stated)

 

		For the period ended
		March 31, 2013
Cash flows from operating activities
Net income / (loss)		$	(278,938	)
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization		$	31,247
Deferred tax expense / (benefit)			9,643
Loss on disposal of property, plant and equipment			291
Amortization of film costs			774
Changes in operating assets and liabilities
(Increase) / decrease in short term investments		$	134,495
(Increase) / decrease in accounts receivables			(67,611	)
(Increase) in other current assets			(39,737	)
(Increase) in film costs			(579	)
(Increase) in other non-current assets			(11,884	)
Increase in accounts payable			78,028
Increase in income tax and other statutory liabilities			54,124
Increase / (decrease) in other current liabilities			(3,021	)
Increase / (decrease) in other non-current liabilities			2,113
Net cash provided by (used in) operating activities			(91,055	)
Cash flows from investing activities
Additions to property, plant and equipment		$	(37,128	)
Proceeds from disposal of property, plant and equipment			3,668
Net cash issued in investing activities			(33,460	)
Cash flows from financing activities
Proceeds from short term debts		$	131,994
Proceeds from issue of Equity Shares			592,808
Proceeds from / (repayment of) long term debts			(246,875	)
Net cash provided by (used in) financing activities			477,927
Net increase in cash and cash equivalents		$	353,412
Cash and cash equivalents, beginning of period			21,186
Cash and cash equivalents, end of period		$	374,598
Supplementary disclosures of cash flow information
Cash paid during the year for:
Interest paid			36,887
Income taxes paid			4,113
Non-cash items:
Allotment of common stock		$	33,000

 

The accompanying notes are an integral part to these financial statements.

 

KM Wedding Events Management, Inc

Notes to the Consolidated Financial Statements

(in US Dollars $ unless otherwise stated)

 

1.	General
	KM Wedding Events Management, Inc ("the Company") was incorporated on October 24, 2012 in the state of Delaware, United States of America.
	The Company is a leading service provider in the matrimonial industry and recently entered in to wedding event management and allied services segments including wedding catering services in Tamil Nadu, India. With the addition of wedding services, which focuses on the higher end of the value chain in the wedding industry, the Company is able to service the customers already using KM for the matrimonial service. The Company became one of the earliest entrants in the industry to provide an integrated wedding service in Tamil Nadu, India.

 

 

2.	Significant Accounting Policies
a.	Basis of Consolidation
	The Company entered into a Stock Purchase Agreement with KM Matrimony Private Limited, India and the Shareholders of KM Matrimony Private Limited on February 14, 2013. Based on the Agreement, the entire shares of KM Matrimony Private Limited will be acquired by the Company over a period of time. As of March 31, 2013, there were common directors in both the Company and KM Matrimony Private Limited.   The accounting literature evaluated for determining the consolidation is 810-10-15-3(c). The requirements set out in the above standard are met through that agreement.   The requirements as per the FASB Standard are as follows: (i) The term of the contractual arrangement is for perpetuity; (ii) The Company has control over the board of KM Matrimony Private Limited, India; and (iii) The Company has significant financial interest in KM Matrimony Private Limited, India.
b.	Form and Content of the Consolidated 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.
	The accounting policy for translating the financials into US dollars is as follows:   Revenue and related expenses generated from our international subsidiaries are generally denominated in the currency of Rupee. The statements of income of our international operations are translated into U.S. dollars at exchange rates indicative of market rates during each applicable period.
	Subsequent events have been evaluated through August 31, 2013, the date these financial statements are available to be issued.
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.	Cash and Cash Equivalents
	Cash represents cash on hand and in the Company’s bank accounts and interest bearing deposits which can be effectively withdrawn at any time without prior notice or penalties reducing the principal amount of the deposit. Cash equivalents are highly liquid, short-term investments that are readily convertible to known amounts of cash and have original maturities of three months or less from their date of purchase.
e.	Loans and Accounts Receivable
	Loans and accounts receivable are stated at their principal amounts outstanding net of loan losses and allowances for doubtful debts. The accounts receivable are unsecured and the allowance for doubtful debts are established at amounts considered to be appropriate based primarily upon past credit loss experience with the customers and an evaluation of potential losses on the outstanding receivable balances.    As of March 31, 2013, there are no doubtful debts.
f.	Inventories
	Inventories are valued at lower of cost and net realizable value. Cost is determined using weighted average method.
g.	Property, Plant and Equipment
	Property, plant and equipment are stated at historical cost, net of accumulated depreciation. The cost of maintenance, repairs, and replacement of minor items of property is charged to operating expenses. Renewals and betterments of assets are capitalized.
	Upon sale or retirement of property, plant and equipment, the cost and related accumulated depreciation are eliminated from the accounts. Any resulting gains or losses are included in the statement of income. All assets are periodically reviewed for possible impairment losses.
h.	Intangible assets
	Intangible assets acquired separately are measured at cost of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and impairment losses, if any.
i.	Depreciation and Amortization
	Depreciation with respect to property, plant and equipment and amortization with respect to amortizable intangible assets is computed using the straight line method over the estimated useful lives.
	Depreciation and amortization rates are applied to groups of assets with similar economic characteristics, as shown below:

 

Asset Group		Estimated Useful Life
Property, Plant and equipment
Vehicles		11 years
Computers & peripherals		6 years
Furniture and Fixtures		10 years
Office Equipment		7 years
Leasehold improvements		10 years
Intangible assets
Software		6 years

 

j.	Income Taxes
	The major tax jurisdictions for the company are India and the United States of America. The Company offsets current tax assets and current tax liabilities, where it has legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis.
	Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of assets and liabilities and their respective tax bases, operating loss carry forwards and tax credits. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance for a deferred tax asset is recorded when management believes that it is more likely than not that this tax asset will not be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Income in the period of change.
	The Company accounts for interest and penalties in the statement of income as interest expense and other expenses respectively.
k.	Employee Benefits
	Provident fund (Defined Contribution Plan)
	In accordance with Indian law, all employees are entitled to receive benefits under the provident fund scheme, which is a defined contribution plan. Both the employee and the employer make monthly contributions to the plan at a predetermined rate (presently 12.0%) of the employees' basic salary. The Company has no further obligations under the plan beyond its monthly contributions. These contributions are made to fund administered and managed by the Government of India. The monthly contributions are charged to income in the period it is incurred.
	Employees state insurance fund (Defined Contribution Plan)
	In addition to the above benefit, all employees who are drawing gross salary of less than ` 15,000 per month are entitled to receive benefit under employee state insurance fund scheme. The employer makes contribution to the scheme at a predetermined rate (presently 4.75%) of employee's gross salary to the ESI Corporation.  There no further obligations under the scheme beyond its monthly contributions. The monthly contributions are charged to income in the year it is incurred.
	Gratuity plan (Defined Benefit Plan)
	In addition to the above benefits, the Company provides for a gratuity obligation, a defined benefit retirement plan (the "Gratuity Plan") covering all its employees in India. The Gratuity Plan provides a lump sum payment to vested employees at retirement or termination of employment based on the respective employee's salary, and the years of employment with the Company. The Company provides for the Gratuity Plan on the basis of actuarial valuation. This defined benefit plan is unfunded as on the date of these financial statements. Net periodic gratuity cost is recorded in the Statements of Income and includes service cost, interest cost and actuarial gains/losses.
l.	Revenue Recognition
	Revenue from services are recognized over the period the service is contracted to be rendered. Advance amounts received from customers against billings for the period of service yet to be rendered on time proportion basis is disclosed as 'unearned revenues'.
	Revenue from products are recognized when the significant risks and rewards of ownership have transferred to the buyer.
	All revenues are recognized only when collectability of the resulting receivable is reasonably assured, and are reported net of discounts and service taxes.
m.	Revenues and costs - Filmed Entertainment
	Television series are initially produced for television networks and may be subsequently licensed for foreign or domestic cable. The Company has not entered into secondary market transactions for the television series it produces. Revenues from distribution or exploitation of the television series in the initial market are recognized as revenues when (i) an arrangement has been signed with a customer, (ii) the customer’s right to use or otherwise exploit the intellectual property has commenced and there is no requirement for significant continued performance by the Company, (iii) arrangement fees are either fixed or determinable and (iv) collectability of the fees is reasonably assured.
	Film costs include the unamortized cost of completed television episodes and television series in production. Film costs are stated at the lower of cost, less accumulated amortization, or fair value. The amount of capitalized film costs for a given period is determined using the individual film-forecast-computation method. Under this method, the amortization of capitalized costs is based on the proportion of the film’s actual revenues recognized for such period to the film’s estimated remaining unrecognized ultimate revenues. All exploitation costs of the company are expensed as incurred.
	With respect to the "Kalyanamalai" television series, the fair value of the film (after considering estimated future exploitation costs) is less than its unamortized film costs and hence the Company has written off to the income statement the amount by which the unamortized capitalized costs exceed the fair value.
	Revenues earned from and costs incurred in production of the television series have been presented under the heads 'matrimonial service income' and 'matrimonial service expense' in the financial statements.
n.	Leasing Agreements
	Capital leases, which transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the inception of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between the interest charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liabilities. Interest charges are charged directly to the statements of income.
	Leases where the lessor retains substantially all the risks and benefits of ownership of the assets are classified as operating leases. Operating lease payments are recognized as an expense in the statements of income on a straight-line basis over the lease term.
o.	Earnings per share
	Basic earnings per share is computed by dividing net income attributable to shareholders by the weighted average number of shares outstanding during the period.
	Diluted earnings per share are computed on the basis of the weighted average number of common and dilutive common equivalent shares outstanding during the period except where the results will be anti-dilutive.
p.	Accounting for Contingencies
	Certain conditions may exist as of the date of these financial statements which may further result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. Management of the Company makes an assessment of such contingent liabilities which is based on assumptions and is a matter of opinion. In assessing loss contingencies relating to legal or tax proceedings that involve the Company or unasserted claims that may result in such proceedings, the Company, after consultation with legal or tax advisors, evaluates the perceived merits of any legal or tax proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.
	If the assessment of a contingency indicates that it is probable that a loss will be incurred and the amount of the liability can be estimated, then the estimated liability is accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed.
	Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed. However, in some instances in which disclosure is not otherwise required, the Company may disclose contingent liabilities or other uncertainties of an unusual nature which, in the judgment of management after consultation with its legal or tax counsel, may be of interest to shareholders or others.

 

3.	As it is the first year of incorporation, there are no corresponding comparable for the balance shown in the financial statements

 

 

4.	Cash and cash equivalents
	Cash and cash equivalents as at March 31 comprises of the following:

 

Particulars		As at March 31, 2013
(a) Cash on hand		$	44,438
(b) Balance with banks on current accounts			330,160
Total		$	374,598

 

5.	Accounts receivable
	Accounts receivable as at March 31 comprises of the following:

 

Particulars		As at March 31, 2013
(a) Customers (trade)		$	84,738
Total		$	84,738

 

6.	Other current assets
	Other currents assets as at March 31 comprises of the following:

 

Particulars		As at March 31, 2013
(a) Event advances		$	120,873
(b) Staff advances			6,740
(c) Advance tax (net of provision for income tax)			7,706
(d) Loans and advances			85,055
(e) Prepaid expenses		$	430
Total		$	220,804

 

7.	Property, plant and equipment, net
	Property, plant and equipment as at March 31, 2013 comprises the following:
	Particulars		Gross carrying value								Accumulated depreciation								Net carrying value
	(a)	Vehicles	35,864								8,223								27,641
	(b)	Computers & Peripherals	82,901								62,571								20,330
	(c)	Furniture & Fixtures	9,156								4,461								4,695
	(d)	Office Equipment	46,706								20,042								26,664
	(e)	Leasehold improvements	67,286								31,195								36,091
	Total		241,913								126,492								115,421

 

Leased Property, plant and equipment, net

The following is the analysis of property, plant and equipment under capital leases as at March 31 included within property, plant and equipment, net

 

Particulars		As at March 31, 2013
Vehicles		$	35,864
Less: accumulated depreciation			(8,223	)
Net book value of lease assets		$	27,641

 

Below is the analysis of the repayment of capital lease obligations as at March 31, 2013:

 

Particulars				As at March 31, 2013
	2014			$	8,288
	2015				6,693
	2016				3,503
	thereafter				1,168
	Imputed interest				-2,893
	Present value of capital lease payments			$	16,759

 

The charge to income resulting from depreciation of vehicles is included with depreciation and amortization in statement of income for 2013 amounting to $ 1,884.

Operating leases

The total amount of operating lease expenses is as follows:

Particulars		As at March 31, 2013
Lease Expenses		$	22,606

 

8.	Intangible assets, net
	Intangible assets as at March 31, 2013 comprise the following:
	Particulars		Gross carrying value								Accumulated amortization								Net carrying value
	(a)	Software	29,332								24,837								4,495
	Total		29,332								24,837								4,495

 

The charge to income resulting from amortization of intangible assets is included with depreciation and amortization in statement of income for 2013 amounting to $ 4,135.

The following represents the estimated aggregate amortization expense for intangible assets subject to amortization as at March 31, 2013:

 

Particulars		As at March 31, 2013
2014		$	4,495
2015			Nil
Thereafter			Nil
Total amortization expense		$	4,495

 

9.

Other non-current assets

Other non-current assets as at March 31 comprises the following:

 

Particulars		As at March 31, 2013
(a) Rental Advance		$	13,710
(b) Deposits			7,610
(c) Software under application development stage			20,543
Total		$	41,863

 

10

Accounts payable and accrued liabilities

Accounts payable and accrued liabilities as at March 31 comprises the following:

 

Particulars		As at March 31, 2013
(a) Accounts payable		$	90,878
(b) Salary payable			23,376
(c) Current portion of provision for gratuity			593
(d) General and administrative expenses payable			68,123
Total		$	182,970

 

11

Income tax and other statutory liabilities

Income tax and other statutory liabilities as at March 31 comprises the following:

 

Particulars		As at March 31, 2013
(a) Service tax		$	70,868
(b) Provident fund			11,732
(c) Employees state insurance			5,299
(d) Professional tax			2,271
(e) Tax deducted at source			27,409
Total		$	117,579

 

12

Short term borrowings and long term debt

Short term loans and borrowings as at March 31 comprises the following:

 

Particulars		As at March 31, 2013
(a) Bank overdraft 1		$	41,715
(b) Secured loans			75,553
(c) Unsecured loans from related parties 2, net of advances (refer Note 21)			330,265
(d) Current portion of long-term debt			23,630
Total		$	471,163

 

¹ The bank overdraft facility is secured by way of hypothecation of trade receivables of the Company and is also guaranteed by the personal guarantees of all the directors of the Company.

 

² Unsecured loans from related parties are repayable on demand.

 

	Long-term debt as at March 31 comprises the following:

 

Particulars		As at March 31, 2013
(a) Secured loans 1		$	61,487
(b) Capital lease obligations 2			16,759
(c) Current portion of long-term debt			(23,630	)
Total		$	54,616

¹ The interest rates of these long-term loans range from 11.50 % to 12.50 %. These loans are repayable in monthly installments ranging from 36 months to 60 months. These loans are secured against the respective assets / by way of assignment of trade receivables of the Company.

 

² Assets acquired under capital lease are secured against the respective assets. 

 

The scheduled aggregate maturity of long-term debt outstanding as at March 31, 2013 is as follows:

 

Particulars		As at March 31, 2013
2014		$	23,630
2015			21,826
2016			14,727
2017			12,722
2018			5,341
thereafter			--
Total long term debt		$	78,246

 

13	Other current liabilities
	Other current liabilities as at March 31 comprises the following:

 

Particulars		As at March 31, 2013
(a) Unearned revenues (i.e. billings in excess of revenue		$	250,995
Total		$	250,995

 

14

Deferred income taxes

The components of deferred tax assets and liabilities as at March 31 are as follows:

 

Particulars		As at March 31, 2013
Deferred tax asset arising from tax effect of:
Operating losses 1		$	204,622
Deductible temporary differences			3,188
Minimum alternate tax 2			34,128
Less: Valuation allowance			(241,938	)
Deferred tax asset, net			Nil
Deferred tax liability arising from tax effect of:
Property, plant and equipment (non-current)		$	26,769

 

¹ Operating losses carried forward for tax purposes of the Company amounted to $ 268,635 for KM Wedding Events Management Inc, USA and $ 307,814 for KM Matrimony Private Limited, India as at March 31, 2013 and are available as an offset against future taxable income of the Company. These operating losses consist of unabsorbed business loss and unabsorbed depreciation. Unabsorbed business loss expire at various dates across 8 years, whereas unabsorbed depreciation has no expiration date as per the provisions of the Indian Income-tax Act, 1961. Unabsorbed business loss expire across 20 years as per the tax laws of the United States of America. Realization is dependent on the Company generating sufficient taxable income prior to expiration of losses carried forward, except with respect to unabsorbed depreciation. A valuation allowance is established attributable to loss carry forwards where, based on available evidence, it is more likely than not that it will not be realized.

 

² Under the Indian Income-tax Act, 1961, the Company is liable to pay Minimum Alternate Tax (MAT). The excess tax paid as per MAT over and above the regular tax liability can be carried forward for a period of 10 years and can be set off against the future tax liabilities computed under regular tax provisions. However, a valuation allowance is established for such MAT paid by the Company, since based on available evidence, it is more likely than not that it will not be realized. 

 

15	Other non-current liabilities
	Other non-current liabilities as at March 31 comprises the following:

 

Particulars		As at March 31, 2013
(a) Trade Deposits		$	6,693
(b) Provision for gratuity			10,106
Total		$	16,799

 

16

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 March 31, 2013. The issued, subscribed and paid-up equity share capital (number of shares) of the company is 39,246,160 shares as at March 31, 2013. The shares issued are as follows: (i)                   4,596,160 number of shares are issued at a price of $ 0.05 per share (ii)                 1,650,000 number of shares are issued at a price of $ 0.20 per share (iii)                33,000,000 number of shares at par value of $ 0.001 per share are issued for consideration other than cash   The shares are issued at a price mutually agreed by the shareholders pursuant to an agreement entered with them.

The Shareholders who have subscribed 1,650,000 number of shares at the rate of $0.20 per share have an option to purchase a warrant for every two shares held which entitles the holder to purchase an additional share at the rate of $0.40 per share for the period of two years from the date of issuance.

Preferred Stock

The 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 March 31, 2013. The issued, subscribed and paid-up Preference share capital is Nil as at March 31, 2013.

 

17	Matrimonial service income

Particulars		For the year ended March 31, 2013
(a) Profile Registration and Event Incomes		$	785,112
(b) Sponsorship Income			176,614
(c) Sale of space or time slot- Television series			108,089
(d) Advertisement Incomes			742
(e) Sale of products (magazines)			8,562
Total		$	1,079,119

 

18

Matrimonial service expenses

 

Particulars		For the year ended March 31, 2013
(a) Event expenses		$	289,435
(b) Production and telecast expenses- Television series			184,120
(c) Publication expenses			87,191
(d) Franchisee commission			30,438
(e) Amortization of film cost			774
Total		$	591,958

 

19	General and administrative expenses

 

Particulars		For the year ended March 31, 2013
(a) Lease expenses		$	22,606
(b) Repairs & Maintenance			24,201
(c) Insurance			293
(d) Electricity charges			10,544
(e) Audit fees			18,342
(f) Bank charges			10,248
(g) Bad debts			16,620
(h) Travelling and conveyance			36,248
(i) Legal Charges			25,000
(j) Professional charges			251,115
(k) Printing & Stationery			10,120
(l) Telephone, Courier & Postage			30,064
(m) Security charges			2,995
(n) Business promotion expenses			10,714
(o) Others			2,995
Total		$	472,105

 

20	Earnings / (loss) per share (EPS)

 

Particulars		For the year ended March 31, 2013
(a) Net income/(loss)		$	9268,635	)
(b) Weighted average number of equity shares outstanding			39,246,160
Earnings/ (loss) per share- basic and diluted			(0.007	)

 

21	Related party disclosures

 

Names of related party and relationship

(i)  Key Management Personnel ('KMP')

(a) Mr. V Venkatesan - Chairman and Director (b) Ms. Meera Nagarajan - President, CEO and Managing Director (c) Mr. Suresh Venkatachari - Secretary and Director (d) Mr. V Vijaya Bhaskar - CFO, Director, Treasurer and Director of technologies

(ii)  Relatives of KMP

(a) Mr. Sridhar Kalyanasundaram

(iii) Entity in which Key Management Personnel ('KMP') has control

 

Particulars

KMP

Relative of KMP

Entity in which KMP has control

2013

2013

2013

Transactions

Advances given for business purposes

88,819

Nil

Nil

Settlement of advances given for business purposes

66,540

Nil

Nil

Unsecured loans received

220,064

247,203

15,000

Repayment of unsecured loans

37,706

38,676

Nil

Professional Charges Paid

Nil

Nil

66,000

Year end balances

Advances given for business purposes (debit balance)

63,247

Nil

Nil

Unsecured loans received (credit balance)

182,358

211,154

Nil

Note: The professional charges paid to Unifina Capital partners, LP include an amount of $6,000 for which 6,000,000 number of equity shares were allotted at the par value of $0.001 per share.

 

22

Employee Benefits

 

Defined Benefit Plan

The obligation towards gratuity is provided based on actuarial valuation carried out as at Balance Sheet date. The following are disclosures relating to the benefit plan:

The liability recognized in the balance sheets as at March 31 is as follows. The obligations are unfunded as on the dates of balance sheets.

 

Particulars		As at March 31, 2013
(a) Gratuity liability recognized in the balance sheet			10,699
Total			10,699

 

Weighted average assumptions used to determine net gratuity cost and benefit obligations:

 

Particulars		For the year ended March 31, 2013
(a) Discount rate			8.50% p.a.
(b) Long-term rate of compensation increase			10.00% p.a
(b) Rate of reture on plan assets			N/A

 

23	Subsequent events and 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 twelve-month period ending March 31, 2014.

 

25	Risks and uncertainties

 

Credit risk

Credit risk arises from the possibility that customers may not be able to settle their obligations as agreed. Accounts receivable balances are typically unsecured and are derived from revenues earned from customers. The Company’s management reviews ageing analysis of outstanding accounts receivables and follows up on past due balances. There is no significant concentration of credit risk.

Service tax

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

  

KM WEDDING EVENTS MANAGEMENT, INC.

(A Development Stage Company)

 

Consolidated Interim Financial Statements

 

For the period ended September 30, 2013

 

 

 

Index	Page
Report of Independent Registered Public Accounting Firm	60
Condensed Consolidated Balance Sheets	61
Condensed Consolidated Statement of Income	62
Condensed Consolidated Statement of Changes in Equity	63
Condensed Consolidated Statement of Cash Flow	64
Notes to the Condensed Consolidated Financial Statements	65

 

 

 

 

KM Wedding Events Management, Inc
Interim condensed consolidated balance sheets
(in US Dollars $ unless otherwise stated)
						As at September 30,				As at March 31,
		Notes				2013				2013
ASSETS						(Unaudited)
Current assets:
Cash and cash equivalents			4				43,060				374,598
Accounts receivable, net			5				65,182				84,738
Other current assets			6				511,412				220,804
Total current assets							619,654				680,140
Non-current assets:
Long Term Investments			7				129,434				—
Property, plant and equipment, net			8				120,147				115,421
Intangible assets, net			9				2,438				4,495
Goodwill			22				679,948				—
Film costs			25				—				579
Other non-current assets			10				49,655				41,863
Total non-current assets							981,622				162,358
Total assets							1,601,275				842,498
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued liabilities			11				124,071				182,970
Income tax and other statutory liabilities			12				81,326				117,579
Short-term loans & current portion of long term debt			13				262,083				471,163
Unsecured loans from related parties, net of advances							260,946				Nil
Other current liabilities			14				236,889				250,995
Total current liabilities							963,315				1,022,707
Non-current liabilities:
Long-term debt			13				7,821				54,616
Deferred tax liabilities							23,321				26,769
Other non-current liabilities			15				12,231				16,799
Total non-current liabilities							43,373				98,184
Equity:
Common stock par value $0.001 (shares outstanding: 41,646,160 and 39,246,160 as at September 30, 2013 and March 31, 2013, respectively)			16				41,646				39,246
Additional paid-in-Capital							1,031,162				553,562
Accumulated deficit							(327,200	)			(268,635	)
Equity Attributable to equity holders of the company							745,608				324,173
Non-Controlling Interest							(153,021	)			(602,566	)
Total equity							592,587				(278,393	)
Total liabilities and equity							1,601,275				842,498

 

The accompanying notes are an integral part to these financial statements.

 

KM Wedding Events Management, Inc
Interim condensed consolidated Statement of Income
(in US Dollars $ unless otherwise stated)
							For the six months period ended
			Notes				September 30, 2013
							(unaudited)
Revenues
Matrimonial service income			17				487,083
Wedding catering service income							119,869
Total							606,952
Costs and expenses
Matrimonial service expenses			18				204,046
Wedding catering service expenses							100,583
Personnel costs							152,706
General and administrative expenses			19				198,804
Depreciation and amortization							16,114
Total							672,253
Operating Income / (loss)							(65,301	)
Other income / (expenses)
Interest Income							5,816
Finance charges							(18,808	)
Total other income / (expenses), net							(12,992	)
Income / (loss) before income tax expense							(78,293	)
Income taxes
Current tax							Nil
Deferred tax (expense) / benefit							Nil
Prior period taxes							(1,898	)
Net income / (loss)							(80,191	)
Attributable to:
Equity holders of the company							(40,072	)
Non-controlling interest							(40,119	)
Net income / (loss)							(80,191	)
Earnings / (loss) per share - basic and diluted			20				(0.001	)

 

The accompanying notes are an integral part to these 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
Equity			39,246,160				39,246				553,562				Nil				592,808				(592,263	)			545
Net income / (loss) for the year			Nil				Nil				Nil				(268,635	)			(268,635	)			(10,303	)			(278,938	)
As at March 31, 2013			39,246,160				39,246				553,562				(268,635	)			324,173				(602,566	)			(278,393	)
Fresh issue of equity shares1			2,400,000				2,400				477,600				Nil				480,000				Nil				480,000
Adjustment in Non- controlling Interest			Nil				Nil				Nil				Nil				Nil				926,948				926,948
Net income / (loss) for the period			Nil				Nil				Nil				(58,565	)			(58,565	)			(477,403	)			(535,968	)
As at September 30, 2013			41,646,160				41,646				1,031,162				(327,200	)			745,608				(153,021	)			592,587

 

¹ 2,400,000 no of equity shares of par value USD 0.001 are issued at USD 0.20 per share. Also refer to note 16 “Common stock”

 

The accompanying notes are an integral part to the financial statements.

 

KM Wedding Events Management, Inc
Interim condensed consolidated Statement of cash flow
(in US Dollars $ unless otherwise stated)
		For the six months period ended
		September 30, 2013
Cash flows from operating activities
Net income / (loss)			(80,191	)
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization			16,114
Deferred tax expense / (benefit)			—
Loss on disposal of property, plant and equipment			—
Bad debts			35,750
Amortization of film costs			505
Changes in operating assets and liabilities
(Increase) / decrease in Long term investments			(129,434	)
(Increase) / decrease in accounts receivables			19,556
(Increase) in other current assets			(290,608	)
(Increase) in film costs			579
(Increase) in other non-current assets			(7792	)
Increase in accounts payable			(58,899	)
Increase in income tax and other statutory liabilities			(36,253	)
Increase / (decrease) in other current liabilities			246,840
Increase / (decrease) in other non-current liabilities			(4,568	)
Net cash provided by (used in) operating activities			(288,401	)
Cash flows from investing activities
Additions to property, plant and equipment			(33,559	)
Proceeds from disposal of property, plant and equipment			Nil
Intangible assets			(671	)
Acquisition of additional stake in subsidiary			(229,000	)
Net cash issued in investing activities			(263,230	)
Cash flows from financing activities
Proceeds from short term debts			(209,080	)
Proceeds from issue of Equity Shares			480,000
Proceeds from / (repayment of) long term debts			(46,795	)
Net cash provided by (used in) financing activities			224,125
Effect of exchange rate changes on cash			(4,032	)
Net increase in cash and cash equivalents			(331,538	)
Cash and cash equivalents, beginning of period			374,598
Cash and cash equivalents, end of period			43,060
Supplementary disclosures of cash flow information
Cash paid during the year for:
Interest paid			18,808
Income taxes paid			1,156
Non-cash items:
Allotment of common stock			Nil

 

 The accompanying notes are an integral part to these 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.
	The Company is a leading service provider in the matrimonial industry and recently entered in to wedding event management and allied services segments including wedding catering services through its subsidiary (KM Matrimony Private Limited, India) in Tamil Nadu, India. As of September 30, 2013, the Company maintains a 55.32% ownership interest in KM Matrimony Private Limited, India. With the addition of wedding services, which focuses on the higher end of the value chain in the wedding industry, the Company is able to service the customers already using KM for the matrimonial service. The Company became one of the earliest entrants in the industry to provide an integrated wedding service in Tamil Nadu, India.

 

2.

Significant Accounting Policies

 

i.	Basis of Consolidation
	The company has invested USD 509,000 to acquire 2,513,144 no of Equity shares of KM Matrimony Pvt ltd, India. Subsequent to this investment, KM Matrimony Pvt Ltd, India has become a subsidiary of this company.
ii.	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.   The accounting policy for translating the financials into US dollars is as follows:   Revenue and related expenses generated from our international subsidiaries are generally denominated in the currency of Rupee. The statements of income of our international operations are translated into U.S. dollars at exchange rates indicative of market rates during each applicable period.
	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 omitted disclosures which would substantially duplicate the information contained in its 2013 audited financial statements, such as accounting policies and details of accounts which have not changed significantly in amount or composition. Additionally, the company has provided disclosures where significant events have occurred subsequent to the issuance of its 2013 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 2013 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, 2013 may not be indicative of the results of operations for the full year ending March 31, 2014. Subsequent events have been evaluated through November 1, 2013, the date these financial statements are available to be issued.
	The closing exchange rate as of September 30, 2013 and March 31, 2013 was 62.58 and 54.52 Indian Rupees to one US dollar, respectively.
iii.	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.
iv.	Income Taxes
	The company follows the provisions of FASB ASC 740-270, Income Taxes (Interim Reporting), to arrive at the effective tax rate. The effective tax rate is the best estimate of the expected annual tax rate to be applied to the taxable income for the current reporting period.

 

3.

As the company has been incorporated in October 2012, the corresponding previous period figures are not available as comparables for the statement of income, statement of changes in shareholders equity, statement of cashflows and related notes.

 

4.

Cash and cash equivalents

Cash and cash equivalents as at September 30 comprises the following:

 

Particulars		As at September 30, 2013
			(Unaudited)
(a) Cash on hand		$	38,895
(b) Balance with banks on current accounts			4,165
Total		$	43,060

 

5.

Accounts receivable

Accounts receivable as at September 30 comprises the following:

 

Particulars		As at September 30, 2013
			(Unaudited)
(a) Customers (trade)		$	65,182
Total		$	65,182

 

6.

Other current assets

Other current assets as at September 30 comprises the following:

 

Particulars		As at September 30, 2013
			(Unaudited)
(a) Event advances		$	119,433
(b) Staff advances			15,099
(c) Advance tax (net of provision for income tax)			7,896
(d) Loans and advances			107,862
(e) Interest accrued on fixed deposits			5,234
(f) Prepaid expenses			255,888
Total		$	511,412

 

7.

Long term investments

Long-term investments comprise the following:

 

Particulars		As at September 30, 2013
			(Unaudited)
(a) Fixed deposits 1		$	129,434
Total		$	129,434

¹These fixed deposits are for a term of 555 days and earn interest at the rate of 9.10 %. These fixed deposits are held under lien against short term borrowings from bank.

 

 

 

8.

Property, plant and equipment, net

Property, plant and equipment as at September 30, 2013 comprises the following:

 

	Particulars	Gross Carrying Value	Accumulated Depreciation	Net carrying value
(a)	Vehicles	31,245	8,636	22,609
(b)	Computers & Peripherals	72,223	60,481	11,742
(c)	Furniture & Fixtures	17,405	4,345	13,060
(d)	Office Equipment	49,841	20,543	29,298
(e)	Leasehold improvements	73,597	30,160	43,437
Total		244,312	124,165	120,146

 

Leased Property, plant and equipment, net

The following is the analysis of property, plant and equipment under capital leases as at September 30 included within property, plant and equipment, net

 

Particulars		As at September 30, 2013
			(Unaudited)
Vehicles		$	31,245
Less: accumulated depreciation			(8,636	)
Net book value of lease assets		$	22,609

 

Operating leases

The total amount of operating lease expenses is as follows:

 

Particulars		For the six months ended September 30, 2013
			(Unaudited)
Lease Expenses		$	14,581
Total		$	14,581

 

9.

Intangible assets, net

Intangible assets as at September 30, 2013 comprise the following:

 

	Particulars	Gross carrying value				Accumulated amortization				Net carrying value
(a)	Software	26,225				23,787				2,438
Total		26,225				23,787				2,438

 

10.

Other non-current assets

Other non-current assets as at September 30 comprises the following:

 

Particulars		As at September 30, 2013
			(Unaudited)
(a) Rental Advance		$	20,254
(b) Deposits			6,630
(c) Software under application development stage			22,771
Total		$	49,655

 

11.

Accounts payable and accrued liabilities

Accounts payable and accrued liabilities as at September 30 comprises the following:

 

Particulars		As at September 30, 2013
			(Unaudited)
(a) Accounts payable		$	48,599
(b) Salary payable			25,953
(c) Current portion of provision for gratuity			564
(d) General and administrative expenses payable			48,956
Total		$	124,071

 

12.

Income tax and other statutory liabilities

Income tax and other statutory liabilities as at September 30 comprises the following:

Particulars		As at September 30, 2013
			(Unaudited)
(a) Service tax		$	54,249
(b) Provident fund			11,275
(c) Employees state insurance			2,385
(d) Professional tax			2,696
(e) Tax deducted at source			10,721
Total		$	81,326

 

13.

Short term borrowings and long term debt

Short term loans and borrowings as at September 30 comprises the following:

 

Particulars		As at September 30, 2013
			(Unaudited)
(a) Bank overdraft 2		$	136,156
(b) Loan against fixed deposit			117,249
(c) Secured loans			Nil
(d) Current portion of long-term debt			8,678
Total		$	262,083

 

² The bank overdraft facility is secured by way of hypothecation of trade receivables of the Company and is also guaranteed by the personal guarantees of all the directors of the Company.

 

Long-term debt as at September 30 comprises the following:

 

Particulars		As at September 30, 2013
			(Unaudited)
(a) Secured loans 3		$	4,704
(b) Capital lease obligations 4			11,795
			16,499
(c) Current portion of long-term debt			(8,678	)
Total		$	7,821

 

³ The interest rates of these long-term loans range from 11.50 % to 12.50 %. These loans are repayable in monthly installments ranging from 36 months to 60 months. These loans are secured against the respective assets and/or by way of assignment of trade receivables of the Company.

 

⁴Assets acquired under capital lease are secured against the respective assets. 

 

The scheduled aggregate maturity of long-term debt outstanding as at September 30, 2013 is as follows:

 

Particulars		As at September 30, 2013
			(Unaudited)
2014		$	4,586
2015			8,185
2016			2,738
2017			991
thereafter			--
Total long term debt		$	16,499

 

14.	Other current liabilities
	Other current liabilities as at September 30 comprises the following:

 

Particulars		As at September 30, 2013
			(Unaudited)
(a) Unearned revenues (i.e. billings in excess of revenue		$	236,889
Total		$	236,889

 

15.

Other non-current liabilities

Other non-current liabilities as at September 30 comprises the following:

 

Particulars		As at September 30, 2013
			(Unaudited)
(a) Trade Deposits		$	2,483
(b) Provision for gratuity			9,747
Total		$	12,231

 

16.

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, 2013 and March 31, 2013. The issued, subscribed and paid-up equity share capital (number of shares) of the company is 41,646,160 shares as at September 30, 2013 and 39,246,160 shares as at March 31, 2013. The shares issued are as follows: (i) 4,596,160 number of shares are issued at a price of $ 0.05 per share (ii) 4,050,000 number of shares are issued at a price of $ 0.20 per share (iii) 33,000,000 number of shares at par value of $ 0.001 per share are issued for consideration other than cash. The shares are issued at a price mutually agreed by the shareholders pursuant to an agreement entered with them.

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

Preferred Stock

The 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, 2013. The issued, subscribed and paid-up Preference share capital is Nil as at September 30, 2013.

 

17.	Matrimonial service income

 

Particulars		For the six months ended September 30, 2013
			(Unaudited)
(a) Profile Registration and Event Incomes		$	354,577
(b) Sponsorship Income			59,923
(c) Sale of space or time slot- Television series			40,412
(d) Sale of products (magazines)			4,171
Total		$	459,083

 

18

Matrimonial service expenses

 

Particulars		For the six months ended September 30, 2013
			(Unaudited)
(a) Event expenses		$	69,856
(b) Production and telecast expenses- Television series			80,347
(c) Publication expenses			42,065
(d) ARC commission			11,273
(e) Amortization of film cost			505
Total		$	204,046

 

19.	General and administrative expenses

 

Particulars		For the six months ended September 30, 2013
			(Unaudited)
(a) Lease expenses		$	14,581
(b) Repairs & Maintenance			12,338
(c) Insurance			757
(d) Electricity charges			5,151
(e) Audit fees			4,394
(f) Bank charges			4,692
(g) Bad debts			35,750
(h) Travelling and conveyance			7,608
(i) Professional charges			18,232
(j) Printing & Stationery			3,860
(k) Telephone, Courier & Postage			12,867
(l) Security charges			1,266
(m) Business promotion expenses			6,462
(n) Others			2,774
Total		$	130,732

 

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

 

Particulars		For the six months ended September 30, 2013
			(Unaudited)
(a) Net income/(loss)		$	(40,072	)
(b) Weighted average number of equity shares outstanding			40,898,619
Earnings/ (loss) per share- basic and diluted			(0.001	)

 

21.	Related party disclosures

 

Names of related party and relationship

(i)  Key Management Personnel ('KMP')

(a) Mr. V Venkatesan - Chairman and Director (b) Ms. Meera Nagarajan - President, CEO and Managing Director (c) Mr. Suresh Venkatachari - Secretary and Director(Relinquished office on June 24, 2013) (d) Mr. V Vijaya Bhaskar - CFO, Director, Treasurer and Director of technologies

(ii)  Relatives of KMP

(a) Mr. Sridhar Kalyanasundaram

(iii) Entity in which Key Management Personnel ('KMP') has control

(a) Unifina Capital Partners, LP

 

(b)

Transactions with related parties

Transactions during the six months period ending September 30, 2013

 

Particulars										KMP				Relative of KMP				Entity in which KMP has control
										2013 (Unaudited)				2013 (Unaudited)				2013 (Unaudited)
Transactions
Advances given for business purposes										115,538				-				-
Settlement of advances given for business purposes										62,629				-				-
Unsecured loans received										62,097				-				-
Repayment of unsecured loans										-				35,970				-
Unsecured Loans given																		193,000
Closing balances
Unsecured Loans given										-				-				193,000
Advances given for business purposes (debit balance)										108,010				-				-
Unsecured loans received (credit balance)										230,968				147,988				-

 

22.

Goodwill

 

Particulars
Balance as at March 31, 2013		$	Nil
Add: Acquired in new subsidiary 5			679,948
Balance as at September 30, 2013			679,948

 

⁵ Goodwill represents the excess of purchase price over the fair value of net assets acquired.

 

Goodwill arises in the process of acquiring KM Matrimony Private Limited. As of September 30, 2013, 55% of the shares of KM Matrimony Private Limited are being held by the Company. The details of such acquisition are as follows:

 

1. Acquired Entity: KM Matrimony Private Limited

2. Acquisition Date:

(a) Shares acquired from KM Matrimony Private Limited on April 30, 2013

(b) Shares acquired from Meera Nagarajan on April 26, 2013

(c) Shares acquired from Venkatesan Vaidhyanathan on April 26, 2013

 

3. Consideration Transferred:

(a) KM Matrimony Private Limited – $280,000 USD

(b) Meera Nagarajan - $114,000 USD

(c) Venkatesan Vaidhyanathan - $115,000 USD

 

4. Percentage of voting equity interest acquired: 55% as on September 30, 2013.

5. The assets and liabilities are valued at the book value of KM Matrimony Private Limited.

6. There are no related contingent consideration arrangements.

7. There are no additional disclosure requirements as per ASC 805.

 

23.

Employee Benefits

 

Defined Benefit Plan

The obligation towards gratuity is provided based on actuarial valuation carried out as at Balance Sheet date. The following are disclosures relating to the benefit plan:

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

 

Particulars		As at September 30, 2013
		(Unaudited)
(a) Gratuity liability recognized in the balance sheet			10,311
Total			10,311

 

Weighted average assumptions used to determine net gratuity cost and benefit obligations:

 

Particulars		For the six months ended September 30, 2013
			(Unaudited)
Discount rate			8.50% p.a.
Long-term rate of compensation increase			10.00% p.a
Rate of return on plan assets			N/A

 

24.

Subsequent events and 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.

25.

Film costs

The entire amount of unamortized film costs as at March 31, 2013 is amortized during the three months period ended September 30, 2013.

26.

Risks and uncertainties

Credit risk

Credit risk arises from the possibility that customers may not be able to settle their obligations as agreed. Accounts receivable balances are typically unsecured and are derived from revenues earned from customers. The Company’s management reviews ageing analysis of outstanding accounts receivables and follows up on past due balances. There is no significant concentration of credit risk.

Statutory Dues

Penalties, if any, on account of delay in payment of statutory dues are unascertainable.

 

KM MATRIMONY PRIVATE LIMITED

 

Financial Statements

 

For the year ended March 31, 2013

 

Index	Page
Report of Independent Registered Public Accounting Firm	74
Condensed Balance Sheets	75
Condensed Statements of Income	76
Condensed Statement of Changes in Shareholders’ Equity	77
Condensed Statement of Cash Flows	78
Notes to the Financial Statements	79

 

 

 

 

 

KM Matrimony Private Limited

Balance Sheets

(in Indian Rupees Rs. unless otherwise stated)

 

			Notes				As at March 31, 2013				As at March 31, 2012				As at March 31, 2013 (US $)
															(unaudited)
ASSETS															Refer note 2(b)
Current assets:
Cash and cash equivalents			3				2,749,191				1,155,056				50,425
Short-term investments			4				Nil				7,332,673				Nil
Accounts receivable, net			5				4,619,862				933,697				84,738
Other current assets			6				12,038,241				9,871,805				220,804
Total current assets							19,407,294				19,293,231				355,967
Non-current assets:
Property, plant and equipment, net			7				6,292,742				5,962,521				115,421
Intangible assets, net			8				245,050				470,489				4,495
Film costs			24				31,575				42,222				579
Other non-current assets			9				2,282,398				1,634,490				41,863
Total non-current assets							8,851,765				8,109,722				162,358
Total assets							28,259,059				27,402,953				518,325
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities			10				9,975,530				5,721,436				182,970
Income tax and other statutory liabilities			11				6,410,395				3,459,535				117,579
Short-term loans & current portion of long term debt			12				25,687,821				18,491,567				471,163
Other current liabilities			13				13,684,272				13,848,954				250,995
Total current liabilities							55,758,018				41,521,492				1,022,707
Non-current liabilities:
Long-term debt			12				2,977,638				16,437,264				54,616
Deferred tax liabilities			14				1,459,444				933,730				26,769
Other non-current liabilities			15				915,889				800,700				16,799
Total non-current liabilities							5,352,971				18,171,694				98,184
Shareholders' equity
Common stock par value Rs. 10			16				31,500,000				31,500,000				577,770
Accumulated deficit							(64,351,930	)			(63,790,233	)			(1,180,336	)
Total shareholders' equity							(32,851,930	)			(32,290,233	)			(602,566	)
Total liabilities and shareholders' equity							28,259,059				27,402,953				518,325

 

The accompanying notes are an integral part to these financial statements.

KM Matrimony Private Limited

Statements of Income (unaudited)

(in Indian Rupees Rs. unless otherwise stated)

 

		Notes				For the year ended March 31,
						2013				2012				2011				2013 (US $)
																		(Unaudited)
																			Refer note 2(b)
Revenues
Matrimonial service income			17				58,833,573				58,744,931				50,996,676				1,079,119
Wedding catering service income							19,491,589				12,440,683				8,948,522				357,513
Total							78,325,162				71,185,614				59,945,198				1,436,632
Costs and expenses
Matrimonial service expenses			18				32,273,528				33,541,611				32,524,104				591,958
Wedding catering service expenses							14,283,564				10,411,429				6,696,878				261,988
Personnel costs							16,980,297				13,282,463				9,963,650				311,451
General and administrative expenses			19				11,093,169				11,837,217				9,176,430				203,470
Depreciation and amortization							1,703,609				1,653,167				1,515,723				31,247
Total							76,334,167				70,725,887				59,876,785				1,400,114
Operating income / (loss)							1,990,995				459,727				68,413				36,518
Other income / (expenses)
Interest income							Nil				178,569				Nil				Nil
Loss on sale of property plant & equipment							(15,877	)			Nil				Nil				(291	)
Finance charges							(2,011,101	)			(6,900,179	)			(3,019,749	)			(36,887	)
Total other income / (expenses), net							(2,026,978	)			(6,721,610	)			(3,019,749	)			(37,178	)
Income / (loss) before income tax expense							(35,983	)			(6,261,883	)			(2,951,336	)			(660	)
Income taxes
Current tax							Nil				(412,535	)			(318,000	)			Nil
Prior period taxes							Nil				(294,497	)			Nil				Nil
Deferred tax (expense) / benefit							(525,714	)			1,129,382				478,094				(9,643	)
Net income / (loss)							(561,697	)			(5,839,533	)			(2,791,242	)			(10,303	)
Earnings / (loss) per share - basic and diluted			20				(0.18	)			(1.85	)			(0.89	)			(0.03	)

 

The accompanying notes are an integral part to these financial statements.

KM Matrimony Private Limited

Statements of Changes in Shareholders' Equity

(in Indian Rupees Rs. unless otherwise stated)

 

			Number of shares				Common stock			Additional paid - in capital			Accumulated deficit			Total shareholders' equity
Balance as at March 31, 2010 (unaudited)			3,150,000				31,500,000						(55,159,458	)		(23,659,458)
Net income / (loss) for the year (unaudited)			Nil				Nil						(2,791,242	)		(2,791,242)
Balance as at March 31, 2011			3,150,000				31,500,000			.			(57,590,700	)		(26,450,700)
Net income / (loss) for the period			Nil				Nil						(5,839,533	)		(5,839,533)
Balance as at March 31, 2012			3,150,000				31,500,000						(63,790,233	)		(32,290,233)
Net income / (loss) for the period			Nil				Nil						(561,697	)		(561,697)
Balance as at March 31, 2013			3,150,000				31,500,000						(64,351,930	)		(32,851,930)
Balance as at Mar 31, 2013 (in US $)			3,150,000				577,770						(1,180,336	)		(602,556)
Refer note 2(b)

 

¹During the year ended March 31, 2010, the Company has issued stock dividends (in the nature of stock splits) to the existing shareholders of the Company in the ratio of nine shares for every one share held. As per the provisions of the Indian Companies Act, 1956, stock dividends can be issued only out of existing positive retained earnings. The audited financial statements of the Company prepared under Indian GAAP as at March 31, 2009 discloses positive retained earnings to the tune of Rs. 15.02 Million. The available retained earnings as per audited Indian GAAP financial statements have been capitalized by issuance of stock dividends (in the nature of stock splits) to the tune of Rs. 14.85 Million.

 

However, financial statements prepared as per US GAAP disclose negative retained earnings as at March 31, 2009 to the tune of Rs. 33.89 Million. Since allotment of shares has been concluded as per Indian statutory laws, the same has been retained in these financial statements as per US GAAP. This has resulted in an increase in the accumulated deficit and share capital by Rs. 14.85 Million, respectively.

 

The accompanying notes are an integral part to these financial statements.

KM Matrimony Private Limited

Statements of Cash Flows (unaudited)

(in Indian Rupees Rs. unless otherwise stated)

		For the year ended March 31,
		2013				2012				2011				2013 (US $)
														(Unaudited)
Cash flows from operating activities															Refer note 2(b)
Net income / (loss)			(561,697	)			(5,839,533	)			(2,791,242	)			(10,303	)
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization			1,703,609				1,653,167				1,515,723				31,247
Deferred tax expense / (benefit)			525,714				(1,129,382	)			(478,094	)			9,643
Loss on disposal of property, plant and equipment			15,877				Nil				Nil				291
Amortization of film costs			42,222				Nil				Nil				774
Changes in operating assets and liabilities
(Increase) /Decrease in short term investments			7,332, 673				(7,332, 673)				50,000				134,495
(Increase) / decrease in accounts receivables			(3,686,165	)			130,675				731,200				(67,611	)
(Increase)/ decrease in other current assets			(2,166,436	)			(4,751,283	)			(4,966,531	)			(39,737	)
(Increase) in Film Costs			(31,575	)			(42,222	)			Nil				(579	)
(Increase) in other non-current assets			(647,908	)			(760,000	)			(216,000	)			(11,884	)
Increase / (decrease) in accounts payable			4,254,094				837,266				461,648				78,028
Increase / (decrease) in income tax and other statutory liabilities			2,950,860				643,456				84,589				54,124
Increase / (decrease) in other current liabilities			(164,682	)			793,309				7,981,877				(3,021	)
Increase in other non-current liabilities			115,189				(828,323	)			1,090,236				2,113
Net cash provided by / (used in) operating activities			9,681,775				(16,625,543	)			3,463,406				177,580
Cash flows from investing activities
Additions to property, plant and equipment			(2,024,2368	)			(1,420,908	)			(204,926	)			(37,128	)
Proceeds from disposal of property, plant and equipment			200,000				Nil				Nil				Nil
Net cash issued in investing activities			(1,824,268	)			(1,420,908	)			(204,926	)			(37,128	)
Cash flows from financing activities
Proceeds from / (repayment of) short term debts			7,196,254				14,213,960				16,357				131,994
Proceeds from / (repayment of) long term debts			(13,459,626	)			4,751,675				(3,174,346	)			(246,875	)
Net cash provided by / (used in) financing activities			(6,263,372	)			18,965,635				(3,157,989	)			(114,881	)
Net increase in cash and cash equivalents			1,594,135				919,184				100,491				29,239
Cash and cash equivalents, beginning of period			1,155,056				235,872				135,381				21,186
Cash and cash equivalents, end of period			2,749,191				1,155,056				235,872				50,425
Supplementary disclosures of cash flow information
Cash paid during the year for:
Interest paid			2,011,101				3,019,749				3,041,319				36,887
Income taxes paid			224,237				636,561				351,310				4,113
Non-cash items:
Allotment of common stock			NiL				Nil				Nil				Nil

 

The accompanying notes are an integral part to these financial statements.

KM Matrimony Private Limited

Notes to condensed financial statements

(in Indian Rupees Rs. unless otherwise stated)

 

1. General

 

KM Matrimony Private Limited ('the Company') was originally incorporated on July 19, 1996 in the name and style, Natraj Television Network Limited in Chennai, Tamil Nadu under the provisions of the Companies Act, 1956. The name of the company was later changed to KM Matrimony Limited with effect from March 18, 2004. Subsequently, on January 7, 2005, the company got converted into a private limited company and the name of the company was changed to its present name i.e. KM Matrimony Private Limited.

 

The Company is principally engaged in the business of matrimonial services through mass media such as internet, print, television and ground events and is also engaged in providing wedding catering services and other related services in India.

 

The Company also produces two entertainment shows "Kalyanamalai" (Tamil language) and "Vivaha Bhandam" (Telugu language) which are telecasted on television networks.

 

2. Significant Accounting Policies

 

a.

Form and Content of the Financial Statements

The Company maintains its books and records in accordance with generally accepted accounting policies in India (“Indian GAAP”). The accompanying financial statements were derived from the Company’s Indian statutory books and records with adjustments made to present them in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The financial statements are presented in Indian rupees (Rs.), the national currency of India.

 

Subsequent events have been evaluated through June 25, 2013, the date these financial statements are available to be issued.

 

The accompanying financial statements differ from the financial statements issued for statutory purposes in India in that they reflect certain adjustments, not recorded in the Company’s statutory books, which are appropriate to present the financial position, results of operations and cash flows in accordance with US GAAP. The principal adjustments relate to: (1) recognition of certain expenses; (2) depreciation of property, plant and equipment; (3) deferred income taxes; (4) accounting of employee benefits.

 

b.

Convenience translation (unaudited)

Solely for the convenience of the readers, the financial statements as on and for the year ended March 31, 2013 have been translated into United States dollars at the certified foreign exchange rate of US$1 = Rs.54.52, as published by Federal Reserve Board of Governors on March 30, 2013. No representation is made that the Indian rupee amounts have been, could have been or could be converted into United States dollars at such a rate or any other rate.

 

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.

Cash and Cash Equivalents

Cash represents cash on hand and in the Company’s bank accounts and interest bearing deposits which can be effectively withdrawn at any time without prior notice or penalties reducing the principal amount of the deposit. Cash equivalents are highly liquid, short-term investments that are readily convertible to known amounts of cash and have original maturities of three months or less from their date of purchase.

 

e.

Loans and Accounts Receivable

Loans and accounts receivable are stated at their principal amounts outstanding net of loan losses and allowances for doubtful debts. The accounts receivable are unsecured and the allowance for doubtful debts are established at amounts considered to be appropriate based primarily upon past credit loss experience with the customers and an evaluation of potential losses on the outstanding receivable balances.

 

As of March 31, 2013, there are no doubtful debts.

 

f.

Inventories

Inventories are valued at lower of cost and net realizable value. Cost is determined using weighted average method.

 

g.

Property, Plant and Equipment

Property, plant and equipment are stated at historical cost, net of accumulated depreciation. The cost of maintenance, repairs, and replacement of minor items of property is charged to operating expenses. Renewals and betterments of assets are capitalized.

 

Upon sale or retirement of property, plant and equipment, the cost and related accumulated depreciation are eliminated from the accounts. Any resulting gains or losses are included in the statement of income. All assets are periodically reviewed for possible impairment losses.

 

h.

Intangible assets

Intangible assets acquired separately are measured at cost of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and impairment losses, if any.

 

i.

Depreciation and Amortization

Depreciation with respect to property, plant and equipment and amortization with respect to amortizable intangible assets is computed using the straight line method over the estimated useful lives.

 

Depreciation and amortization rates are applied to groups of assets with similar economic characteristics, as shown below:

 

Asset Group	Estimated Useful Life
Property, plant and equipment
Vehicles	11 years
Computers and peripherals	6 years
Furniture and Fixtures	10 years
Office Equipments	7 years
Leasehold improvements	10 years
Intangible Assets
Software	6 years

 

j.

Income Taxes

Income taxes are provided on taxable profit as determined under the Indian Income-tax Act, 1961. The Company offsets current tax assets and current tax liabilities, where it has legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis.

 

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of assets and liabilities and their respective tax bases, operating loss carry forwards and tax credits. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance for a deferred tax asset is recorded when management believes that it is more likely than not that this tax asset will not be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Income in the period of change.

 

The Company accounts for interest and penalties in the statement of income as interest expense and other expenses respectively.

 

k.

Employee Benefits

Provident fund (Defined Contribution Plan)

In accordance with Indian law, all employees are entitled to receive benefits under the provident fund scheme, which is a defined contribution plan. Both the employee and the employer make monthly contributions to the plan at a predetermined rate (presently 12.0%) of the employees' basic salary. The Company has no further obligations under the plan beyond its monthly contributions. These contributions are made to fund administered and managed by the Government of India. The monthly contributions are charged to income in the period it is incurred.

 

Employees state insurance fund (Defined Contribution Plan)

In addition to the above benefit, all employees who are drawing gross salary of less than Rs.15,000 per month are entitled to receive benefit under employee state insurance fund scheme. The employer makes contribution to the scheme at a predetermined rate (presently 4.75%) of employee's gross salary to the ESI Corporation. There no further obligations under the scheme beyond its monthly contributions. The monthly contributions are charged to income in the year it is incurred.

 

Gratuity plan (Defined Benefit Plan)

In addition to the above benefits, the Company provides for a gratuity obligation, a defined benefit retirement plan (the "Gratuity Plan") covering all its employees in India. The Gratuity Plan provides a lump sum payment to vested employees at retirement or termination of employment based on the respective employee's salary, and the years of employment with the Company. The Company provides for the Gratuity Plan on the basis of actuarial valuation. This defined benefit plan is unfunded as on the date of these financial statements. Net periodic gratuity cost is recorded in the Statements of Income and includes service cost, interest cost and actuarial gains/losses.

 

l.

Revenue Recognition

Revenue from services are recognized over the period the service is contracted to be rendered. Advance amounts received from customers against billings for the period of service yet to be rendered on time proportion basis is disclosed as 'unearned revenues'.

 

Revenue from products are recognized when the significant risks and rewards of ownership have transferred to the buyer.

 

All revenues are recognized only when collectability of the resulting receivable is reasonably assured, and are reported net of discounts and service taxes.

 

m.

Revenues and costs - Filmed Entertainment

Television series are initially produced for television networks and may be subsequently licensed for foreign or domestic cable. The Company has not entered into secondary market transactions for the television series it produces. Revenues from distribution or exploitation of the television series in the initial market are recognized as revenues when (i) an arrangement has been signed with a customer, (ii) the customer’s right to use or otherwise exploit the intellectual property has commenced and there is no requirement for significant continued performance by the Company, (iii) arrangement fees are either fixed or determinable and (iv) collectability of the fees is reasonably assured.

 

Film costs include the unamortized cost of completed television episodes and television series in production. Film costs are stated at the lower of cost, less accumulated amortization, or fair value. The amount of capitalized film costs for a given period is determined using the individual film-forecast-computation method. Under this method, the amortization of capitalized costs is based on the proportion of the film’s actual revenues recognized for such period to the film’s estimated remaining unrecognized ultimate revenues. All exploitation costs of the company are expensed as incurred.

 

With respect to the "Kalyanamalai" television series, the fair value of the film (after considering estimated future exploitation costs) is less than its unamortized film costs and hence the Company has written off to the income statement the amount by which the unamortized capitalized costs exceed the fair value.

 

Revenues earned from and costs incurred in production of the television series have been presented under the heads 'matrimonial service income' and 'matrimonial service expense' in the financial statements.

 

n.

Leasing Agreements

Capital leases, which transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the inception of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between the interest charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liabilities. Interest charges are charged directly to the statements of income.

Leases where the lessor retains substantially all the risks and benefits of ownership of the assets are classified as operating leases. Operating lease payments are recognized as an expense in the statements of income on a straight-line basis over the lease term.

 

o.

Earnings per share

Basic earnings per share is computed by dividing net income attributable to shareholders by the weighted average number of shares outstanding during the period.

Diluted earnings per share are computed on the basis of the weighted average number of common and dilutive common equivalent shares outstanding during the period except where the results will be anti-dilutive.

 

p.

Accounting for Contingencies

Certain conditions may exist as of the date of these financial statements which may further result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. Management of the Company makes an assessment of such contingent liabilities which is based on assumptions and is a matter of opinion. In assessing loss contingencies relating to legal or tax proceedings that involve the Company or unasserted claims that may result in such proceedings, the Company, after consultation with legal or tax advisors, evaluates the perceived merits of any legal or tax proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

 

If the assessment of a contingency indicates that it is probable that a loss will be incurred and the amount of the liability can be estimated, then the estimated liability is accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed.

 

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed. However, in some instances in which disclosure is not otherwise required, the Company may disclose contingent liabilities or other uncertainties of an unusual nature which, in the judgment of management after consultation with its legal or tax counsel, may be of interest to shareholders or others.

 

3. Cash and cash equivalents

 

Cash and cash equivalents as at March 31 comprise of the following:

 

Particulars		As at March 31,
		2013				2012
(a) Cash on hand			2,422,765				1,120,441
(b) Balance with banks on current accounts			326,426				34,615
Total			2,749,191				1,155,056

 

4. Short term investments

Short-term investments as at March 31 comprises the following:

Particulars		As at March 31,
		2013				2012
(a) Fixed Deposits 1			Nil				7,332,673
Total			Nil				7,332,673

¹ These fixed deposits primarily denominated in Indian rupees (`Rs.) are for a term of one year and earn interest ranging from 9.00 % to 10.00 %. These fixed deposits are held under lien against short term borrowings from bank.

 

5. Accounts receivable

Accounts receivable as at March 31 comprises the following:

 

Particulars		As at March 31,
		2013				2012
(a) Customers (Trade )			4,619,862				933,697
Total			4,619,862				933,697

 

6. Other current assets

Other current assets as at March 31 comprises the following:

Particulars		As at March 31,
		2013				2012
(a) Event Advances			6,590,012				7,108,036
(b) Staff Advances			367,440				261,475
(c) Advance tax (net of provision for income tax)			420,114				191,831
(d) Advances to Related parties (refer note 21)			Nil				2,090,368
(e) Loans and Advances 1			4,637,175				77,500
(f) Interest Accrued on Fixed Deposits			Nil				137,595
(g) Prepaid Expenses			23,500				5,000
Total			12,038,241				9,871,805

 

¹ Loans and advances includes an amount of Rs. 1.39 Million paid to consultants for raising fresh capital. This amount being in the nature of 'share issue costs' will be adjusted against the additional paid-in capital of the Company during the year ended March 31, 2014 as per the provisions of the Indian Companies Act, 1956. (Also refer Note 23).

 

7. Property, plant and equipment, net

Property, plant and equipment as at March 31 comprises the following:

 

Particulars		Gross carrying value		Accumulated depreciation		Net carrying value
		2013	2012	2013	2012	2013	2012
(a)	Vehicles	1,955,295	1,449,423	448,302	345,587	1,506,993	1,103,836
(b)	Computers &Peripherals	4,519,742	4,056,767	3,411,382	2,838,255	1,108,360	1,218,512
(c)	Furniture & Fixtures	499,183	485,183	243,212	194,089	255,971	291,094
(d)	Office Equipments	2,546,388	1,818,300	1,092,677	803,776	1,453,711	1,014,524
(e)	Leasehold improvements	3,668,478	3,668,478	1,700,771	1,333,923	1,967,707	2,334,555
Total		13,189,086	11,478,151	6,896,344	5,515,630	6,292,742	5,962,521

 

 

Leased Property, plant and equipment, net

The following is the analysis of property, plant and equipment under capital leases as at March 31 included within property, plant and equipment, net

 

Particulars		As at
		March 31, 2013				March 31, 2012
Vehicles			1,955,295				1,449,423
Less: Accumulated Depreciation			(448,302	)			(345,587	)
Net book value of leased assets			1,506,993				1,103,836

 

Below is the analysis of the repayment of capital lease obligations as at March 31, 2013

 

Particulars				As at March 31, 2013
	2014				451,860
	2015				364,900
	2016				190,980
	Thereafter				63,660
	Imputed Interest				(157,726	)
	Present value of capital lease payments				913,674

 

The charge to income resulting from depreciation of vehicles is included with depreciation and amortization in statements of income for 2013, 2012 and 2011 amounting to Rs. 200,170, Rs. 137,696 and Rs. 137,696 respectively.

 

Operating leases

 

The total amount of operating lease expenses was as follows:

Particulars		2013				2012				2011
Lease Expenses			1,232,500				1,461,530				1,161,100

 

8. Intangible assets, net

Intangible assets as at March 31 comprise the following:

 

Particulars		Gross carrying value		Accumulated amortization		Net carrying value
		2013	2012	2013	2012	2013	2012
(a)	Software	1,599,178	1,599,178	1,354,128	1,128,689	245,050	470,489
Total		1,599,178	1,599,178	1,354,128	1,128,689	245,050	470,489

 

 

The charge to income resulting from amortization of intangible assets is included with depreciation and amortization in statements of income for 2013, 2012 and 2011 amounting to Rs. 225,439, Rs. 266,530 and Rs. 266,530 respectively.

 

The following represents the estimated aggregate amortization expense for intangible assets subject to amortization as at March 31, 2013:

 

Particulars				As at March 31, 2013
	2014				245,050
	2015				Nil
	Thereafter				Nil
	Total Amortization Expenses				245,050

 

9. Other non-current assets

Other non-current assets as at March 31 comprises the following:

 

Particulars		As at March 31,
		2013				2012
(a)     Rental Advance			747,490				747,490
(b)     Deposits			414,908				407,000
(c)     Software under application development stage			1,120,000				480,000
Total			2,282,398				1,634,490

 

10. Accounts payable and accrued liabilities

Accounts payable and accrued liabilities as at March 31 comprises the following:

 

Particulars		As at March 31,
		2013				2012
(a)     Accounts Payable			4,954,655				2,686,926
(b)     Salary Payable			1,274,439				708,061
(c)     Current portion of provision for gratuity			32,319				24,820
(d)     General and administrative expenses payable			3,714,117				2,301,629
Total			9,975,530				5,721,436

 

11. Income tax and other statutory liabilities

Income tax and other statutory liabilities as at March 31 comprises the following:

 

Particulars		As at March 31,
		2013				2012
(a)     Service Tax			3,863,713				3,046,584
(b)     Provident Fund			639,603				83,295
(c)     Employees State Insurance			288,882				26,801
(d)     Professional Tax			123,874				42,354
(e)     Tax deducted at Source			1,494,323				260,501
Total			6,410,395				3,459,535

 

12. Short term borrowings and long term debt

Short term loans and borrowings as at March 31 comprises the following:

 

Particulars		As at March 31,
		2013				2012
(a)     Bank overdraft1			2,274,306				9,136,428
(b)     Loans Against Fixed Deposit			Nil				6,631,881
(c)     Secured Loans			4,119,180				Nil
(d)     Unsecured loans from related parties 2, net of advances (ref Note 21)			18,006,046				Nil
(e)     Current portion of long term debt			1,288,289				2,723,258
Total			25,687,821				18,491,567

 

¹ The bank overdraft facility is secured by way of hypothecation of trade receivables of the Company and is also guaranteed by the personal guarantees of all the directors of the Company.

 

² Unsecured loans from related parties are repayable on demand.

 

Long-term debt as at March 31 comprises the following:

Particulars		As at March 31,
		2013				2012
(a)     Secured Loans  1			3,352,253				18,020,750
(b)     Unsecured Loans 1			Nil				539,578
(c)     Capital Lease obligations 2			913,674				600,194
			4,265,927				19,160,522
(d)     Current portion of long term debt			(1,288,289	)			(2,723,258	)
Total			2,977,638				16,437,264

 

¹ The interest rates of these long-term loans range from 11.50 % to 12.50 %. These loans are repayable in monthly installments ranging from 36 months to 60 months. These loans are secured against the respective assets / by way of assignment of trade receivables of the Company.

 

² Assets acquired under capital lease are secured against the respective assets.

 

The scheduled aggregate maturity of long-term debt outstanding as at March 31, 2013 is as follows:

 

Particulars				As at March 31,
	2014				1,288,289
	2015				1,189,971
	2016				802,903
	2017				693,602
	2018				291,162
	Thereafter				Nil
	Total Long Term Debt				4,265,927

 

13. Other current liabilities

Other current liabilities as at March 31 comprises the following:

Particulars		As at March 31,
		2013				2012
(a)     Unearned Revenue (i.e., billings in excess of revenue)			13,684,272				9,123,954
(b)     Advance from sponsorship customers			Nil				4,725,000
Total			13,684,272				13,848,954

 

14. Deferred income taxes

Particulars		As at March 31,
		2013				2012
Deferred tax asset arising from tax effect of:
Operating Leases1			5,185,640				4,648,807
Deductible temporary differences			173,790				86,162
Minimum alternate tax 2			1,860,653				1,860,653
Less: Valuation allowance			(7,220,083	)			(6,595,622	)
Deferred Tax, net			Nil				Nil
Deferred tax liability arising from tax effect of:
Property, plant and equipment (non-current)			1,459,444				933,730

 

The net change during the financial year 2012 - 13 in valuation allowance: 624,461

 

Income tax expense compared to Statutory expectations

The major items contributing to a reconciliation of expected income tax expense / benefit by applying the statutory income tax rates to the actual income tax expense / benefit is on account of the following:

a)

Nil

¹ Operating losses carried forward for tax purposes of the Company amounted to Rs. 5,185,640 and Rs. 4,648,807 as at March 31, 2013 and 2012 and are available as an offset against future taxable income of the Company. These operating losses consist of unabsorbed business loss and unabsorbed depreciation. Unabsorbed business loss expire at various dates across 8 years, whereas unabsorbed depreciation has no expiration date as per the provisions of the Indian Income-tax Act, 1961. Realization is dependent on the Company generating sufficient taxable income prior to expiration of losses carried forward, except with respect to unabsorbed depreciation. A valuation allowance is established attributable to loss carry forwards where, based on available evidence, it is more likely than not that it will not be realized.

 

² Under the Indian Income-tax Act, 1961, the Company is liable to pay Minimum Alternate Tax (MAT). The excess tax paid as per MAT over and above the regular tax liability can be carried forward for a period of 10 years and can be set off against the future tax liabilities computed under regular tax provisions. However, a valuation allowance is established for such MAT paid by the Company, since based on available evidence, it is more likely than not that it will not be realized.

 

15. Other non-current liabilities

Other non-current liabilities as at March 31 comprises the following:

 

Particulars		As at March 31,
		2013				2012
(a)     Trade deposits			364,900				354,900
(b)     Provision for Gratuity			550,989				445,800
Total			915,889				800,700

 

16. Common Stock

The company has only one class of equity shares having par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The authorized share capital (number of shares) of the company is 5,000,000 shares as at March 31, 2013 and 3,500,000 shares as at March 31, 2012. The issued, subscribed and paid-up share capital (number of shares) of the company is 3,150,000 shares as at March 31, 2013 and 2012, respectively.

The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

 

17. Matrimonial service income

 

		For the year ended March 31,
Particulars		2013				2012				2011
(a)     Profile Registration and Event Incomes			42,804,290				45,433,924				35,751,772
(b)     Sponsorship Income			9,629,000				6,698,972				8,645,304
(c)     Sale of space or time slot–Television Series			5,893,000				5,298,064				4,399,436
(d)     Advertisement Incomes			40,500				889,180				1,503,300
(e)     Sale of Products (Magazines)			466,783				424,791				696,864
Total			58,833,573				58,744,931				50,996,676

 

18. Matrimonial Services Expenses

 

		For the year ended March 31,
Particulars		2013				2012				2011
(a)     Event Expenses			15,779,911				18,296,362				16,403,043
(b)     Production & Telecast expenses – Television Series			10,038,235				9,325,528				10,753,193
(c)     Publication expenses			4,753,678				4,307,116				3,887,298
(d)     Franchisee Commission			1,659,482				1,612,605				1,480,570
(e)     Amortization of Film Costs			42,222				Nil				Nil
Total			32,273,528				33,541,611				32,524,104

 

19. General and Administrative Expenses

 

		For the year ended March 31,
Particulars		2013				2012				2011
(a)     Lease Expenses			1,232,500				1,461,530				1,161,100
(b)     Repairs & Maintenance			1,319,445				1,373,720				993,164
(c)     Insurance			15,963				30,823				58,007
(d)     Electricity Charges			574,843				457,156				494,963
(e)     Audit Fees			1,000,000				150,000				110,300
(f)      Bank Charges			509,389				299,853				319,387
(g)     Bad Debts			906,109				2,295,345				970,430
(h)     Travelling and Conveyance			1,881,940				2,446,059				743,036
(i)       Professional Charges			551,467				352,115				871,133
(j)      Printing & Stationery			551,769				720,565				852,398
(k)     Telephone, Courier & Postage			1,639,110				1,349,011				1,807,984
(l)       Security Charges			163,300				117,000				108,150
(m)   Business Promotion Expenses			584,130				629,419				408,840
(n)     Others			163,204				154,621				277,538
Total			11,093,169				11,837,217				9,176,430

 

20. Earnings / (Loss) per Share (EPS)

 

		For the year ended March 31,
Particulars		2013				2012				2011
(a)     Net Income / (Loss)			(561,697	)			(5,839,533	)			(2,791,242	)
(b)     Weighted average number of equity shares outstanding			3,150,000				3,150,000				3,150,000
Earnings / (loss) per share - basic and diluted			(0.18	)			(1.85	)			(0.89	)

 

21. Related Party Disclosures

Names of related party and relationship

 

(i)

Key Management Personnel ('KMP')

(a)

Mr. V. Venkatesan - Managing Director

(b)

Ms. Meera Nagarajan – Director

(c)

Mr. V Vijaya Bhaskar – Director

 

(ii)

Relatives of KMP

(a)

Mr. Sridhar Kalyanasundaram

 

Particulars

KMP

Relative of KMP

Transactions		2013				2012				2013				2012
Advances given for business purposes			4,842,416				5,861,957				Nil				Nil
Settlement of advances given for business purposes			3,627,771				4,507,130				Nil				Nil
Unsecured loans received			11,997,880				Nil				13,477,512				Nil
Repayment of unsecured loans			2,055,714				Nil				2,108,619				Nil
Year end balances
Advances given for business purposes (debit balance)			3,448,213				2,233,568				Nil				Nil
Unsecured loans received (credit balance)			9,942,166				Nil				11,512,093				143,200

 

22. Employee Benefits

a.

Defined Benefit Plan

The obligation towards gratuity is provided based on acturial valuation carried out as at Balance Sheet date. The following are disclosures relating to the benefit plan:

 

The liability recognized in the balance sheets as at March 31 is as follows. The obligations are unfunded as on the dates of balance sheets.

 

Particulars		As at March 31,
		2013				2012
(a)     Gratuity liability recognized in the balance sheet			583,308				470,620

 

Weighted average assumptions used to determine net gratuity cost and benefit obligations:

			For the year ended March 31,
Particulars			2013				2012
(a)     Discount Rate			8.50% p.a.				8.50% p.a.
(b)     Long term rate of compensation increase			10.00% p.a.				10.00% p.a.
(c)     Rate of return on plan assets			N.A.,				N.A.,

 

23. Subsequent events and going concern

The Company has incurred substantial losses and its net worth has been eroded. The Company has drawn up plans for changing its service mix between matrimony and wedding event management services which is expected to improve the profitability of the Company.

 

Also, the company has drawn up detailed plans for raising further capital. The company entered into a Stock Purchase Agreement with KM Wedding Events Management, Inc., ("Purchaser") on February 14, 2013, for the issue of up to 10,000,000 shares of common stock at a price of Rs. 11 per share (Face value – Rs.10), for an aggregate consideration of up to 2,100,000 USD. With respect to the same, the company has allotted 1,393,127 shares at 11 Rupees per share ($0.201 USD at the time of the sale) to the Purchaser on April 30, 2013 for a consideration of $280,000 USD paid by the Purchaser to the company on April 3, 2013.

 

Further, the shareholders of the company have also entered into a Stock Purchase Agreement on February 14, 2013, with KM Wedding Events Management Inc., ("Purchaser") to sell their entire holding of 3,150,000 shares to the Purchaser in two tranches. In Tranche A (“Tranche A”), shareholders will sell 1,150,000 shares at a price of Rs. 11 per share. The balance of 2,000,000 shares (“Tranche B”) have to be sold, within 3 years from the date of the above mentioned agreement, at a price equal to the fair market value of the shares on the date of sale. With respect to Tranche A, the Purchaser has purchased 1,120,018 shares in the company on April 26, 2013 from Tranche A for an aggregate of $229,000 USD (Rs. 12,320,200) from two of the shareholders of the company viz. Mr. Venkatesan Vaidhyanathan (562,455 shares for $115,000 USD) and Mrs. Meera Nagarajan (557,564 shares for $114,000 USD). The remaining Tranche A shares and the Tranche B shares have to be sold within 3 years from February 14, 2013.

 

Considering the above points, 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 twelve-month period ending March 31, 2014.

 

25. Risk & Uncertainties: Credit Risk

 

Credit risk arises from the possibility that customers may not be able to settle their obligations as agreed. Accounts receivable balances are typically unsecured and are derived from revenues earned from customers. The Company’s management reviews ageing analysis of outstanding accounts receivables and follows up on past due balances. There is no significant concentration of credit risk.

 

26. Commitments and Contingencies

Service Tax

 

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

 

27. Previous Year’s Figures

 

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

 

KM MATRIMONY PRIVATE LIMITED

 

Interim Financial Statements

For the period ended September 30, 2013

 

Index	Page
Report of Independent Registered Public Accounting Firm	90
Condensed Balance Sheets	91
Condensed Statements of Income	92
Condensed Statement of Changes in Shareholders’ Equity	93
Condensed Statement of Cash Flows	94
Notes to the Condensed Financial Statements	95

 

KM Matrimony Private Limited

Interim Condensed Balance Sheets

(in Indian Rupees Rs. unless otherwise stated)

 

			Notes				As at September 30, 2013				As at March 31, 2013				As at September 30, 2013 (US $)
							(unaudited)								(unaudited)
ASSETS															Refer note 2(b)
Current assets:
Cash and cash equivalents			3				2,625,714				2,749,191				41,958
Accounts receivable, net			4				2,907,535				4,619,862				46,461
Other current assets			5				17,861,112				12,038,241				285,412
Total current assets							23,394,361				19,407,294				373,831
Non-current assets:
Long Term Investments			6				8,100,000				Nil				129,434
Property, plant and equipment, net			7				7,518,797				6,292,742				120,147
Intangible assets, net			8				152,560				245,050				2,438
Film costs			23				Nil				31,575				Nil
Other non-current assets			9				3,107,398				2,282,398				49,655
Total non-current assets							18,878,755				8,851,765				301,764
Total assets							42,273,116				28,259,059				675,505
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities			10				7,764,390				9,975,530				124,701
Income tax and other statutory liabilities			11				5,089,373				6,410,395				81,326
Short-term loans & current portion of long term debt			12				16,401,147				7,681,775				262,083
Unsecured loans from related parties, Net of Advances			20				16,329,999				18,006,046				260,946
Other current liabilities			13				14,824,510				13,684,272				236,889
Total current liabilities							60,409,419				55,758,018				965,315
Non-current liabilities:
Long-term debt			12				489,431				2,977,638				7,821
Deferred tax liabilities							1,459,444				1,459,444				23,321
Other non-current liabilities			14				765,394				915,889				12,231
Total non-current liabilities							2,714,269				5,352,971				43,373
Shareholders' equity
Common stock par value Rs. 10; (Shares outstanding: 4,543,127 and 3,150,000 as at September 30, 2013 and March 31, 2013, respectively)			15				45,431,270				31,500,000				725,971
Accumulated deficit							(66,281,842	)			(64,351,930	)			(1,059,154	)
Total shareholders' equity							(20,850,572	)			(32,851,930	)			(333,183	)
Total liabilities and shareholders' equity							42,273,116				28,259,059				675,505

 

The accompanying notes are an integral part to these interim condensed financial statements.

KM Matrimony Private Limited

Interim Condensed Statements of Income (unaudited)

(in Indian Rupees Rs. unless otherwise stated)

 

		Notes				For the six months ended September 30,
						2013				2012				2013 (US $)
															Refer note 2(b)
Revenues
Matrimonial service income			16				29,292,037				27,538,785				468,073
Wedding catering service income							7,501,382				5,458,197				119,869
Total							36,793,419				32,996,982				587,942
Costs and expenses
Matrimonial service expenses			17				12,769,221				15,453,948				204,046
Wedding catering service expenses							6,294,471				5,992,650				100,583
Personnel costs							9,556,324				8,178,735				152,706
General and administrative expenses			18				8,163,098				5,773,801				130,443
Depreciation and amortization							1,008,404				899,249				16,114
Total							37,791,518				36,298,383				603,892
Operating income / (loss)							(998,099	)			(3,301,401	)			(15,950	)
Other income / (expenses)
Interest income							363,965				Nil				5,816
Loss on sale of property plant & equipment							Nil				(15,877	)			Nil
Finance charges							(1,176,977	)			(900,838	)			(18,808	)
Total other income / (expenses), net							(813,012	)			(916,715	)			(12,992	)
Income / (loss) before income tax expense							(1,811,111	)			(4,218,116	)			(28,942	)
Income taxes
Current tax							Nil				Nil				Nil
Prior period taxes							(118,801	)			Nil				(1,898	)
Deferred tax (expense) / benefit							Nil				Nil				Nil
Net income / (loss)							(1,929,912	)			(4,218,116	)			(30,840	)
Earnings / (loss) per share - basic and diluted			19				(0.45	)			(1.34	)			(0.007	)

 

The accompanying notes are an integral part to these interim condensed financial statements.

 

KM Matrimony Private Limited

Interim Condensed Statements of Changes in Shareholders' Equity

(in Indian Rupees Rs. unless otherwise stated)

 

			Number of shares				Common stock				Additional paid - in capital				Accumulated deficit				Total shareholders' equity
Balance as at March 31, 2012			3,150,000				31,500,000				Nil				(63,790,233	)			(32,290,233	)
Net income / (loss) for the period (unaudited)			Nil				Nil				Nil				(4,218,116	)			(4,218,116	)
Balance as at September 30, 2012 (unaudited)			3,150,000				31,500,000				Nil				(68,008,349	)			(36,508,349	)
Balance as at March 31, 2013			3,150,000				31,500,000				Nil				(64,351,930	)			(32,851,930	)
Net income / (loss) for the period (unaudited)			Nil				Nil				Nil				(1,929,912	)			(1,929,912	)
Fresh issue of equity shares			1,393,127				13,931,270				1,393,127				Nil				15,324,397
Less: application of additional
paid-in capital 1			Nil				Nil				(1,393,127	)			Nil				(1,393,127	)
Balance as at September 30, 2013 (unaudited)			4,543,127				45,431,270				Nil				(66,281,842	)			(20,850,572	)
Balance as at Sep 30, 2013(in US $)
(unaudited) Refer note 2(b)			4,543,127				725,971				Nil				(1,059,154	)			(333,183	)

 

¹ On April 30, 2013, the company has allotted 1,393,127 fresh equity shares (par value of Rs.10 per share) to KM Wedding Events Management Inc. at a premium of Rs.1 per share, amounting to Rs.1,393,127. The consideration of $280,000 USD was paid to the company by KM Wedding Events Management Inc. on April 3, 2013. 'Share issue costs' to the tune of 1,393,127 are adjusted against such additional paid-in capital as per the provisions of section 78 of the Indian Companies Act, 1956. Consequently, the additional paid-in capital is nil as at September 30, 2013.

 

 

The accompanying notes are an integral part to these interim condensed financial statements.

 

 

KM Matrimony Private Limited

Interim Condensed Statements of Cash Flows (unaudited)

(in Indian Rupees Rs. unless otherwise stated)

		For the six months ended September 30,
		2013				2012				2013 (US $)
Cash flows from operating activities											Refer note 2(b)
Net income / (loss)			(1,929,912	)			(4,218,116	)			(30,840	)
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization			1,008,404				899,249				16,114
Deferred tax expense / (benefit)			Nil				Nil				Nil
Loss on disposal of property, plant and equipment			Nil				15,877				Nil
Amortization of film costs			31,575				42,222				505
Bad debts			2,237,217				453,054				35,750
Changes in operating assets and liabilities
(Increase) /Decrease in short term investments			Nil				7,332,673				Nil
(Increase) in long term investments			(8,100,000	)			Nil				(129,434	)
(Increase) / decrease in accounts receivables			(524,890	)			(897,551	)			(8,388	)
(Increase) in other current assets			(7,215,998	)			(1,301,804	)			(115,308	)
(Increase) in other non-current assets			(825,000	)			(247,908	)			(13,183	)
Decrease in advance to related parties			Nil				2,090,368				Nil
Increase / (decrease) in unsecured loans from related parties			(1,676,047	)			21,750,738				(26,782	)
Increase / (decrease) in accounts payable			(2,211,140	)			1,664,909				(35,333	)
Increase / (decrease) in income tax and other statutory liabilities			(1,321,022	)			1,984,118				(21,109	)
Increase / (decrease) in other current liabilities			1,140,238				(1,263,102	)			18,220
Increase in other non-current liabilities			(150,495	)			91,164				(2,405	)
Net cash provided by / (used in) operating activities			(19,537,070	)			28,395,891				(312,193	)
Cash flows from investing activities
Additions to property, plant and equipment			(2,099,969	)			(1,112,051	)			(33,558	)
Proceeds from disposal of property, plant and equipment			Nil				200,000				Nil
Additions to intangible assets			(42,000	)			Nil				(671	)
Net cash issued in investing activities			(2,141,969	)			(912,051	)			(34,229	)
Cash flows from financing activities
Proceeds from / (repayment of) short term debts			8,719,372				(14,995,572	)			139,332
Proceeds from / (repayment of) long term debts			(2,488,207	)			(12,668,318	)			(39,760	)
Proceeds from issue of shares			15,324,397				Nil				244,877
Net cash provided by / (used in) financing activities			21,555,562				(27,663,890	)			344,449
Net increase in cash and cash equivalents			(123,477	)			(180,050	)			(1,973	)
Cash and cash equivalents, beginning of period			2,749,191				1,155,056				43,931
Cash and cash equivalents, end of period			2,625,714				975,006				41,958
Supplementary disclosures of cash flow information
Cash paid during the year for:
Interest paid			1,176,977				900,838				18,808
Income taxes paid			193,366				69,434				3,090
Non-cash items:
Allotment of common stock			NiL				Nil				Nil

 

The accompanying notes are an integral part to these interim condensed financial statements.

KM Matrimony Private Limited

Notes to interim condensed financial statements

(in Indian Rupees Rs. unless otherwise stated)

 

1. General

 

KM Matrimony Private Limited ('the Company') was originally incorporated on July 19, 1996 in the name and style, Natraj Television Network Limited in Chennai, Tamil Nadu under the provisions of the Companies Act, 1956. The name of the company was later changed to KM Matrimony Limited with effect from March 18, 2004. Subsequently, on January 7, 2005, the company got converted into a private limited company and the name of the company was changed to its present name i.e. KM Matrimony Private Limited.

 

The Company is principally engaged in the business of matrimonial services through mass media such as internet, print, television and ground events and is also engaged in providing wedding catering services and other related services in India.

 

The Company also produces two entertainment shows "Kalyanamalai" (Tamil language) and "VivahaBhandam" (Telugu language) which are telecasted on television networks.

 

2. Significant Accounting Policies

 

a.

Form and Content of the Financial Statements

The Company maintains its books and records in accordance with generally accepted accounting policies in India (“Indian GAAP”). The accompanying financial statements were derived from the Company’s Indian statutory books and records with adjustments made to present them in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The financial statements are presented in Indian rupees (Rs.), the national currency of India.

 

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 omitted disclosures which would substantially duplicate the information contained in its 2013 audited financial statements, such as accounting policies and details of accounts which have not changed significantly in amount or composition. Additionally, the company has provided disclosures where significant events have occurred subsequent to the issuance of its 2013 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 2013 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, 2013 may not be indicative of the results of operations for the full year ending March 31, 2014. Subsequent events have been evaluated through November 28, 2013, the date these financial statements are available to be issued.

 

The accompanying interim condensed financial statements differ from the company's statutory books with respect to certain adjustments not recorded in the company’s statutory books, which are appropriate to present the financial position, results of operations and cash flows in accordance with US GAAP. The principal adjustments relate to: (1) depreciation of property, plant and equipment; (2) amortization of intangible assets and film cost (3) deferred income taxes; (4) accounting of employee benefits; (5) recognition of certain expenses.

 

b.

Convenience translation (unaudited)

Solely for the convenience of the readers, the financial statements as on and for the six months ended September 30, 2013 have been translated into United States dollars at the foreign exchange rate of US $1 = Rs.62.58, as published by Federal Reserve Board of Governors on September 30, 2013. No representation is made that the Indian rupee (Rs.) amounts have been, could have been or could be converted into United States dollars at such a rate or any other rate.

 

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.

Income taxes

 

The company follows the provisions of FASB ASC 740-270, Income Taxes (Interim Reporting), to arrive at the effective tax rate. The effective tax rate is the best estimate of the expected annual tax rate to be applied to the taxable income for the current reporting period. Deferred tax assets and liabilities are recognized at the normal tax rates of 30.9% (including education cess @ 3%).

 

e.

Foreign Currency Transactions.

 

Transactions in foreign currency are recorded at the exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currencies are expressed in the functional currency at the exchange rates in effect at the balance sheet date. Gains or losses resulting from foreign currency transactions are included in the statements of income.

 

f.

Revenues and Costs – Filmed Entertainment

 

Television series are initially produced for television networks and may be subsequently licensed for foreign or domestic cable. The Company has entered into secondary market transactions for the television series it produces. Revenues from distribution or exploitation of the television series are recognized as revenues when (i) an arrangement has been signed with a customer, (ii) the customer’s right to use or otherwise exploit the intellectual property has commenced and there is no requirement for significant continued performance by the Company, (iii) arrangement fees are either fixed or determinable and (iv) collectability of the fees is reasonably assured.

 

Film costs include the unamortized cost of completed television episodes and television series in production. Film costs are stated at the lower of cost, less accumulated amortization, or fair value. The amount of capitalized film costs for a given period is determined using the individual film-forecast-computation method. Under this method, the amortization of capitalized costs is based on the proportion of the film’s actual revenues recognized for such period to the film’s estimated remaining unrecognized ultimate revenues. All exploitation costs of the company are expensed as incurred.

 

With respect to the "Kalyanamalai" television series, the fair value of the film (after considering estimated future exploitation costs) is less than its unamortized film costs and hence the Company has written off to the income statement the amount by which the unamortized capitalized costs exceed the fair value.

 

Revenues earned from and costs incurred in production of the television series have been presented under the heads 'matrimonial service income' and 'matrimonial service expense' in the financial statements.

 

3. Cash and cash equivalents

 

Cash and cash equivalents comprise of the following:

 

Particulars		As at
		September 30, 2013 (unaudited)				March 31, 2013
(a) Cash on hand			2,434,044				2,422,765
(b) Balance with banks on current accounts			191,670				326,426
Total			2,625,714				2,749,191

 

4. Accounts receivable

Accounts receivable as at September 30 comprises the following:

 

Particulars		As at
		September 30, 2013 (unaudited)				March 31, 2013
(a) Customers (Trade )			2,326,848				4,619,862
(b) Affiliated Entity – Parent Company			580,687				Nil
Total			2,907,535				4,619,862

 

5. Other current assets

Other current assets as at September 30 comprises the following:

Particulars		As at
		September 30, 2013 (unaudited)				March 31, 2013
(a) Event Advances			7,474,086				6,590,012
(b) Staff Advances			944,910				367,440
(c) Advance tax (net of provision for income tax)			494,139				420,114
(d) Loans and Advances 1			6,750,000				4,637,175
(e) Interest Accrued on Fixed Deposits			327,568				Nil
(f) Prepaid Expenses			1,870,409				23,500
Total			17,861,112				12,038,241

 

¹ Loans and advances as at March 31, 2013 includes an amount of Rs. 1,387,175 paid to consultants for raising fresh capital. This amount being in the nature of 'share issue costs' is adjusted against the additional paid-in capital of the company as per the provisions of section 78 of the Indian Companies Act, 1956.

 

6. Long Term Investments

 

Long-term investments comprise the following:

 

Particulars		As at
		September 30, 2013 (unaudited)				March 31, 2013
(a) Fixed deposits 1			8,100,000				Nil
Total			8,100,000				Nil

 

¹ These fixed deposits are for a term of 555 days and earn interest at the rate of 9.10 %. These fixed deposits are held under lien against short term borrowings from bank.

 

7. Property, plant and equipment, net

Property, plant and equipment comprises the following:

 

Particulars	Gross carrying value		Accumulated depreciation		Net carrying value
	Sep 30, 2013 (unaudited)	Mar 31, 2013	Sep 30, 2013(unaudited)	Mar 31, 2013	Sep 30, 2013(unaudited)	Mar 31, 2013
(a)     Vehicles	1,955,295	1,955,295	540,415	448,302	1,414,880	1,506,993
(b)     Computers &Peripherals	4,519,742	4,519,742	3,784,932	3,411,382	734,810	1,108,360
(c)     Furniture & Fixtures	1,089,225	499,183	271,931	243,212	817,294	255,971
(d)     Office Equipments	3,119,070	2,546,388	1,285,575	1,092,677	1,833,495	1,453,711
(e)     Leasehold Improvements	4,605,723	3,668,478	1,887,405	1,700,771	2,718,318	1,967,707
Total	15,289,055	13,189,086	7,770,258	6,896,344	7,518,797	6,292,742

 

 

Leased Property, plant and equipment, net

The following is the analysis of property, plant and equipment under capital leases as at September 30 included within property, plant and equipment, net

 

Particulars		As at
		September 30, 2013 (unaudited)				March 31, 2013
Vehicles			1,955,295				1,955,295
Less: Accumulated Depreciation			(540,415	)			(448,302	)
Net book value of leased assets			1,414,880				1,506,993

 

Operating leases

 

The total amount of operating lease expenses was as follows: (For six months ended September 30)

Particulars		2013 (unaudited)				2012 (unaudited)
Lease Expenses			912,467				612,500

 

8. Intangible assets, net

Intangible assets as at September 30, 2013 comprise the following:

 

Particulars	Gross carrying value		Accumulated amortization		Net carrying value
	Sep 30, 2013 (unaudited)	Mar 31, 2013	Sep 30, 2013 (unaudited)	Mar 31, 2013	Sep 30, 2013 (unaudited)	Mar 31, 2013
(a)     Software	1,641,178	1,599,178	1,488,618	1,354,128	152,560	245,050
Total	1,641,178	1,599,178	1,488,618	1,354,128	152,560	245,050

9. Other non-current assets

 

Other non-current assets as at September 30, 2013 comprise the following:

 

Particulars		As at
		September 30, 2013 (unaudited)				March 31, 2013
(a)     Rental Advance			1,267,490				747,490
(b)     Deposits			414,908				414,908
(c)     Software under application development stage			1,425,000				1,120,000
Total			3,107,398				2,282,398

 

10. Accounts payable and accrued liabilities

Accounts payable and accrued liabilities as at September 30, 2013 comprise the following:

 

Particulars		As at
		September 30, 2013 (unaudited)				March 31, 2013
(a)     Accounts Payable			3,041,312				4,954,655
(b)     Salary Payable			1,624,128				1,274,439
(c)     Current portion of provision for gratuity			35,309				32,319
(d)     General and administrative expenses payable			3,063,641				3,714,117
Total			7,764,390				9,975,530

 

11. Income tax and other statutory liabilities

Income tax and other statutory liabilities as at September 30, 2013 comprise the following:

 

Particulars		As at
		September 30, 2013 (unaudited)				March 31, 2013
(a)     Service Tax			3,394,883				3,863,713
(b)     Provident Fund			705,577				639,603
(c)     Employees State Insurance			149,269				288,882
(d)     Professional Tax			168,710				123,874
(e)     Tax deducted at Source			670,934				1,494,323
Total			5,089,373				6,410,395

 

12. Short term borrowings and long term debt

Short term loans and borrowings as at September 30, 2013 comprise the following:

 

Particulars		As at
		September 30, 2013 (unaudited)				March 31, 2013
(a)     Bank overdraft1			8,520,639				2,274,306
(b)     Loans Against Fixed Deposit			7,337,415				Nil
(c)     Secured Loans			Nil				4,119,180
(d)     Current portion of long term debt			543,093				1,288,289
Total			16,401,147				7,681,775

 

¹ The bank overdraft facility as at September 30, 2013 is secured by way of hypothecation of trade receivables, current assets and fixed assets of the company except vehicles financed by other banks / financial institutions.

 

Long-term debt as at September 30, 2013 comprise the following:

Particulars		As at
		September 30, 2013 (unaudited)				March 31, 2013
(a)     Secured Loans  1			294,380				3,352,253
(b)     Capital Lease obligations 1			738,144				913,674
			1,032,524				4,265,927
(c)     Current portion of long term debt			(543,093	)			(1,288,289	)
Total			489,431				2,977,638

 

¹ The interest rates of these long-term loans as at September 30, 2013 range from 11.50 % to 12.50 %. 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 September 30, 2013 is as follows:

 

Particulars				As at September 30, 2013 (unaudited)
	2014				286,997
	2015				512,191
	2016				171,319
	2017				62,017
	Thereafter				Nil
	Total Long Term Debt				1,032,524

 

13. Other current liabilities

Other current liabilities as at September 30, 2013 comprise the following:

 

Particulars		As at
		September 30, 2013 (unaudited)				March 31, 2013
(a)     Unearned Revenue (i.e., billings in excess of revenue)			14,824,510				13,684,272
Total			14,824,510				13,684,272

 

14. Other non-current liabilities

Other non-current liabilities as at September 30, 2013 comprise the following:

 

Particulars		As at
		September 30, 2013 (unaudited)				March 31, 2013
(a)     Trade deposits			155,417				364,900
(b)     Provision for Gratuity			609,977				550,989
Total			765,394				915,889

 

15. Common Stock

 

The company has only one class of equity shares having par value of Rs.10 per share. Each holder of equity shares is entitled to one vote per share. The authorized share capital (number of shares) of the company is 5,000,000 shares as at September 30, 2013 and March 31, 2013.

 

The issued, subscribed and paid-up share capital (number of shares) of the company is 4,543,127 shares as at September 30, 2013 and 3,150,000 shares as at March 31, 2013.

 

The company entered into a Stock Purchase Agreement with KM Wedding Events Management, Inc., ("Purchaser") on February 14, 2013, for the issue of up to 10,000,000 shares of common stock at a price of Rs. 11 per share (Face value – Rs.10), for an aggregate consideration of up to 2,100,000 USD. With respect to the same, the company has allotted 1,393,127 shares at 11 Rupees per share ($0.201 USD at the time of the sale) to the Purchaser on April 30, 2013 for a consideration of USD 280,000 paid by the Purchaser to the company on April 3, 2013.

 

Further, the shareholders of the company have also entered into a Stock Purchase Agreement on February 14, 2013, with KM Wedding Events Management Inc., to sell their entire holding of 3,150,000 shares in two tranches. In Tranche A (“Tranche A”), shareholders will sell 1,150,000 shares at a price of Rs.11 per share. The remaining Tranche A shares and the balance of 2,000,000 shares (“Tranche B”) have to be sold within 3 years from the date of the above mentioned agreement. The Tranche B shares shall be sold at a price equal to the fair market value of the shares on the date of sale. With respect to Tranche A, on April 3, 2013 two shareholders sold 1,120,018 shares for a consideration of USD 229,000 (Rs.12,320,200): Mr. Venkatesan Vaidhyanathan (562,455 shares for $115,000 USD) and Mrs. Meera Nagarajan (557,564 shares for $114,000 USD).

 

Consequent to the above mentioned transactions, KM Wedding Events Management Inc. holds 55.32% of shares of the company as at September 30, 2013.

 

The company declares and pays dividends in Indian rupees (Rs.). The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing annual general meeting.

 

16. Matrimonial service income

		For Six months ended September 30
Particulars		2013 (unaudited)				2012 (unaudited)
(a)     Profile Registration and Event Incomes			22,189,433				19,818,670
(b)     Sponsorship and Advertisement Income			3,750,000				4,432,000
(c)     Sale of space or time slot–Television Series			2,529,000				3,027,000
(d)     Sale of television rights			562,604				Nil
(e)     Sale of Products(magazine)			261,000				261,115
Total			29,292,037				27,538,785

 

17. Matrimonial Services Expenses

		For Six months ended September 30
Particulars		2013 (unaudited)				2012 (unaudited)
(a)     Event Expenses			4,371,609				7,304,173
(b)     Production & Telecast expenses – Television Series			5,028,129				5,010,247
(c)     Publication expenses			2,632,456				2,251,698
(d)     ARC Commission			705,452				845,608
(e)     Amortization of Film Costs			31,575				42,222
Total			12,769,221				15,453,948

 

18. General and Administrative Expenses

 

		For the six months ended September 30
Particulars		2013 (unaudited)				2012 (unaudited)
(a)     Lease Expenses			912,467				612,500
(b)     Repairs & Maintenance			772,125				550,220
(c)     Insurance			47,394				Nil
(d)     Electricity Charges			322,322				322,880
(e)     Audit Fees			275,000				275,000
(f)      Bank Charges			293,616				241,238
(g)     Bad Debts			2,237,217				453,054
(h)     Travelling and Conveyance			476,094				1,513,499
(i)       Professional Charges			1,140,988				226,567
(j)      Printing & Stationery			241,542				274,361
(k)     Telephone, Courier & Postage			805,216				839,464
(l)       Security Charges			79,200				74,500
(m)   Business Promotion Expenses			404,398				345,773
(n)     Others			155,519				44,745
Total			8,163,098				5,773,801

 

19. Earnings / (Loss) per Share (EPS)

 

		For the six months ended September 30,
Particulars		2013 (unaudited)				2012 (unaudited)
(a)     Net Income / (Loss)			(1,929,912	)			(4,218,116	)
(b)     Weighted average number of equity shares outstanding			4,314,746				3,150,000
Earnings / (loss) per share - basic and diluted			(0.45	)			(1.34	)

Refer Note No. 15, 'common stock' with respect to fresh issue of equity shares.

 

20. Related Party Disclosures

 

Names of related party and relationship

 

(i)

Key Management Personnel ('KMP')

(a)

Mr. V. Venkatesan - Managing Director

(b)

Ms. Meera Nagarajan – Director

(c)

Mr. V Vijaya Bhaskar – Director

 

(ii)

Relatives of KMP

(a)

Mr. Sridhar Kalyanasundaram

 

(iii)

Affiliated Entity – Parent Company

(a)

KM Wedding Events Management Inc.

 

Particulars

KMP and Relative of KMP

Affiliated Entity

Transactions during the six months period ending September 30

2013 (unaudited)

2012 (unaudited)

2013 (unaudited)

2012 (unaudited)

Advances given for business purposes

7,230,368

4,251,237

Nil

Nil

Settlement of advances given for business purposes

3,919,321

2,371,716

Nil

Nil

Unsecured loans received

3,886,000

25,675,392

Nil

Nil

Repayment of unsecured loans

2,251,000

2,187,833

Nil

Nil

Sale of Television rights

Nil

Nil

562,604

Nil

Closing balances

Advances given for business purposes (debit balance)

6,759,260

1,879,521

Nil

Nil

Unsecured loans received (credit balance)1

23,089,259

23,630,259

Nil

Nil

Trade Receivable

Nil

Nil

580,687

Nil

 

¹Unsecured loans from related parties are repayable on demand.

 

21. Employee Benefits

 

a.

Defined Benefit Plan

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

 

Particulars		As at
		September 30, 2013 (unaudited)				March 31, 2013
(a)     Gratuity liability recognized in the balance sheet			645,386				583,308

 

Weighted average assumptions used to determine net gratuity cost and benefit obligations:

	For the six months ended
Particulars	September 30, 2013 (unaudited)	September 30, 2012 (unaudited)
(a)     Discount Rate	8.50% p.a.	8.50% p.a.
(b)     Long term rate of compensation increase	10.00% p.a.	10.00% p.a.
(c)     Rate of return on plan assets	N.A.,	N.A.,

 

22. Subsequent events and going concern

The company has incurred substantial losses and its net worth has been eroded. The company has up plans for changing its service mix between matrimony and wedding event management services which is expected to improve the profitability of the company.

 

Also, the company has drawn up detailed plans for raising further capital. The company has entered into an agreement with KM Wedding Events Management, Inc., ("Purchaser") on February 14, 2013, for issue of up to 10,000,000 shares of common stock at a price of Rs.11 per share (Face value – Rs.10), for an aggregate consideration of up to 2,100,000 USD. With respect to the same, the company has allotted 1,393,127 shares at 11 Rupees per share ($0.201 USD at the time of the sale) to the purchaser on April 30, 2013 for a consideration of USD 280,000 paid by the Purchaser to the company on April 3, 2013.

 

Also refer Note No. 15, 'common stock'.

 

Considering the above points, 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.

 

23. Film Costs

 

The entire amount of unamortized film costs as at March 31, 2013 is amortized during the six months period ended September 30, 2013.

 

24. Risk &Uncertainties:

Credit Risk

 

Credit risk arises from the possibility that customers may not be able to settle their obligations as agreed. Accounts receivable balances are typically unsecured and are derived from revenues earned from customers. The Company’s management reviews ageing analysis of outstanding accounts receivables and follows up on past due balances. There is no significant concentration of credit risk.

 

25. Commitments and Contingencies

Statutory dues.

 

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

PROSPECTUS

 

KM WEDDING EVENTS MANAGEMENT, INC.

11501 Dublin Blvd., Suite 200

Dublin, CA 94568

Phone: (925) 891-8029

Fax: (925) 891-8028

 

10,000,000 SHARES OF COMMON STOCK

 

 

DEALER PROSPECTUS DELIVERY OBLIGATION

 

Until _______, 2014, all dealers that effect transactions in these securities, whether or not participating in this Offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

 

JANUARY 16, 2014

 

[RESALE PROSPECTUS ALTERNATIVE PAGE]

 

The information in this Prospectus is not complete and may be changed. We may not sell these securities until the Registration Statement filed with the Securities and Exchange Commission is effective. This Prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where an offer or sale is not permitted.

 

PRELIMINARY PROSPECTUS

 

KM WEDDING EVENTS MANAGEMENT, INC.

11501 Dublin Blvd., Suite 200

Dublin, CA 94568

Phone: (925) 891-8029

Fax: (925) 891-8028

 

7,912,660 SHARES OF COMMON STOCK

 

The Selling Shareholders named in this prospectus are offering all of the shares of common stock offered through this prospectus. Our common stock is presently not traded on any market or securities exchange. The 7,912,660 shares of our common stock can be sold by selling security holders at a fixed price of $0.30 per share until our shares are quoted on the OTC Bulletin Board and thereafter at prevailing market prices or privately negotiated prices. There can be no assurance that a market maker will agree to file the necessary documents with The Financial Industry Regulatory Authority (“FINRA”), which operates the OTC Electronic Bulletin Board, nor can there be any assurance that such an application for quotation will be approved. We have agreed to bear the expenses relating to the registration of the shares for the selling security holders.

 

The Selling Shareholders and any broker or dealer participating in the sale of shares on behalf of the Selling Shareholders may be deemed to be "underwriters" within the meaning of the Securities Act of 1933, in which case any profit on the sale of shares by them or commissions received by such broker or dealer may be deemed to be underwriting compensation under the Securities Act of 1933.

 

Any investment in the shares offered herein involves a high degree of risk.  You should only purchase shares if you can afford a loss of your investment.  You should consider carefully the risks that we have described in the section entitled RISK FACTORS” BEGINNING ON PAGE11 OF THIS PROSPECTUS before deciding whether to invest in our common stock.

 

This Prospectus covers the Resale Offering by the Selling Shareholders of 7,912,660 shares of Common Stock. The Company is concurrently conducting a primary offering for 10,000,000 shares, which is covered in a separate Public Offering Prospectus.

 

THE PURCHASE OF THE SECURITIES OFFERED THROUGH THIS PROSPECTUS INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY READ AND CONSIDER THIS PROSPECTUS BEFORE BUYING ANY SHARES OF KM WEDDING EVENTS MANAGEMENT, INC.’S COMMON STOCK.

 

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

[RESALE PROSPECTUS ALTERNATIVE PAGE]

 

TABLE OF CONTENTS

 

 

	Page
Prospectus Summary	7
The Offering	108
Risk Factors	11
Determination of Offering Price	18
Use of Proceeds	109
Selling Security Holders	110
Plan of Distribution;	113
Description of Property	22
Description of Securities	22
Description of Business	24
Management’s Dicussion and Analysis	31
Directors, Executive Officers, Promoters and Control Persons	35
Executive Compensations	36
Security Ownership of Certain Beneicial Owners and Management	37
Certain Relationships and Related Transactions	38
Legal Matters	38
Experts	38
Commission Position of Indemnification for Securities Act Liabilities	39
Where you can find more information	39
Index to Financial Statements	40

 

You should rely only on the information contained or incorporated by reference to this prospectus in deciding whether to purchase our Common Stock. We have not authorized anyone to provide you with information different from that contained in this prospectus. Under no circumstances should the delivery to you of this prospectus or any sale made pursuant to this prospectus create any implication that the information contained in this prospectus is correct as of any time after the date of this prospectus. To the extent that any facts or events arising after the date of this prospectus, individually or in the aggregate, represent a fundamental change in the information presented in this prospectus, this prospectus will be updated to the extent required by law.

[RESALE PROSPECTUS ALTERNATIVE PAGE]

 

SUMMARY OF THIS OFFERING

 

Securities being offered		Up to 7,912,660 shares of Common Stock. Our Common Stock is described in further detail in the section of this prospectus titled “DESCRIPTION OF SECURITIES – Common Stock.”
Number of shares outstanding before the offering		41,646,160 shares of Common Stock issued and outstanding as of January 16, 2014.
Net Proceeds to the Company		We will not receive proceeds from the resale of shares by the Selling Shareholders.
Risk factors		An investment in our Common Stock involves a high degree of risk. You should carefully consider the risk factors set forth under “Risk Factors” section hereunder and the other information contained in this Prospectus before making an investment decision regarding our Common Stock.

[RESALE PROSPECTUS ALTERNATE PAGE]

 

USE OF PROCEEDS

 

We will not receive any of the proceeds from the sale of our ordinary shares by the Selling Shareholders. The Selling Shareholders will receive all of the net proceeds from the sales of ordinary shares offered by them under this Prospectus.

[RESALE PROSPECTUS ALTERNATE PAGE]

 

SELLING SECURITY HOLDERS

 

The shares being offered for resale by the selling stockholders consist of the 7,912,660 shares of our common stock held by 115 shareholders of our common stock, which were issued: (i) pursuant to Section 4(2) of the Securities Act of 1933 in which we issued 6,000,000 shares of common stock on December 17, 2012 to an accredited investor for services, these transaction were exempt from registration as they were transactions by an issuer not involving a public offering, no underwriters we used and no commissions were paid; (ii) pursuant to a Regulation S offering that we completed on January 14, 2013 in which we sold 4,596,160 shares of common stock to 78 investors; and (iii) pursuant to a Regulation S offering that we completed on May 20, 2013 in which we sold 4,050,000 shares of common stock to 50 investors.

 

The following table sets forth the name of the selling stockholders, the number of shares of common stock beneficially owned by each of the selling stockholders as of January 16, 2014 and the number of shares of common stock being offered by the selling stockholders. The shares being offered hereby are being registered to permit public secondary trading, and the selling stockholders may offer all or part of the shares for resale from time to time. However, the selling stockholders are under no obligation to sell all or any portion of such shares nor are the selling stockholders obligated to sell any shares immediately upon effectiveness of this prospectus. All information with respect to share ownership has been furnished by the selling stockholders.

 

	Before the Offering		After the Offering
Name of Selling Shareholders (1)	Total Number of Shares of common stock Beneficially Owned Prior to the Offering (2)	Number of Shares to be Offered for the Account of the Selling Shareholders (3)	Number of Shares to be Owned after this Offering (4)	Percentage to be Beneficially Owned after this Offering (4) (5)
T. Shanthi Priya	20,000	20,000	0	0%
S. Bharath	20,000	20,000	0	0%
Srinivasan Kannan	60,000	60,000	0	0%
Prashant Kothari	20,000	20,000	0	0%
Thandava Krishna Murthy	20,000	20,000	0	0%
Veerappan Nagappan	645,000	494,250	150,750	0.36%
Rama Subramani Lakshmi	20,000	20,000	0	0%
Rama Subramani Radha	20,000	20,000	0	0%
Rama Subramani Ramani	20,000	20,000	0	0%
Lata Awtaney	20,000	20,000	0	0%
Ajay Awtaney	20,000	20,000	0	0%
Harish Awtaney	20,000	20,000	0	0%
Yussuf Sajjadhusein	20,000	20,000	0	0%
Lakshmi Narayanan Sankara Krishnan	20,000	20,000	0	0%
Venkatasubramanyam Chandra Sekhar	20,000	20,000	0	0%
Duraisamy Ravichandran	20,000	20,000	0	0%
Kandasamy Balakumar	20,000	20,000	0	0%
Krishnan Narayana	20,000	20,000	0	0%
Pugalenthi Rajendiran	20,000	20,000	0	0%
Mothukuri Saikumar	20,000	20,000	0	0%
Falguni N Shah	20,000	20,000	0	0%
Ramesh Iyer	20,000	20,000	0	0%
Sharanya Viswanathan Iyer	20,000	20,000	0	0%
Madhuri M Shastri	45,000	28,250	16,750	0.04%
Haja Sowkathali Abdul Rajack	20,000	20,000	0	0%
Aniket Dogra	20,000	20,000	0	0%
Divya Chhawchharia	20,000	20,000	0	0%
Lalitha Vaidyananthan	70,000	36,500	33,500	0.08%
A. Niranjani	20,000	20,000	0	0%
A. Poornachandran	20,000	20,000	0	0%
Arunkumar Shivaraman	20,000	20,000	0	0%
Chandra Ramani	20,000	20,000	0	0%
Harsh Shah	20,000	20,000	0	0%
Hirek Dinesh Karaniya	20,000	20,000	0	0%
Kumarpal S Shah	20,000	20,000	0	0%
L. Nalina	20,000	20,000	0	0%
Lakshmikumaran Suresh	20,000	20,000	0	0%
Meyyammai Veerapan Chettiar	645,000	494,250	150,750	0.36%
N. Nagappan	20,000	20,000	0	0%
Nakul Chhawchharia	20,000	20,000	0	0%
V. Narayanan Iyer	475,000	424,750	50,250	0.12%
Narayanan Sriram	420,000	420,000	0	0%
Nikesh K Shah	170,000	69,500	100,500	0.24%
Pachamuthu Senthilkumar	20,000	20,000	0	0%
Pahlachander Sivaramakrishnan	20,000	20,000	0	0%
Mustansir Mannan Safri	20,000	20,000	0	0%
R. Parthasarathy	400,000	400,000	0	0%
Rajeshwari Viswanathan Iyer	20,000	20,000	0	0%
Reena Kaushik	20,000	20,000	0	0%
Sanjeevi Iyyamperumal	20,000	20,000	0	0%
Shaikh Feroz Abdul Karim	20,000	20,000	0	0%
Shailesh Varudkar	45,000	28,250	16,750	0.04%
Sheela Ramesh	20,000	20,000	0	0%
Sivaramakrishnan Krishnamurthy	20,000	20,000	0	0%
Sriram Iyer	275,000	157,750	117,250	0.28%
Stephen Socorro D’Costa	20,000	20,000	0	0%
V. Mythily	20,000	20,000	0	0%
Veeraraghavan Lakshmikumaran	20,000	20,000	0	0%
Vijay Shah	20,000	20,000	0	0%
Jugalkishor Mundra	120,000	53,000	67,000	0.16%
Harishankar Chaitanya	175,000	57,750	117,250	0.28%
R Ramesh	50,000	16,500	33,500	0.08%
Vanaja Ramalingam	50,000	16,500	33,500	0.08%
Kallal Choudhury	25,000	8,250	16,750	0.04%
B. R. Venugopal	25,000	8,250	16,750	0.04%
Arvind Vishwanat	25,000	8,250	16,750	0.04%
Sachin Srinivas Bhattad	25,000	8,250	16,750	0.04%
Srinivasarangan Sundarrajan	50,000	16,500	33,500	0.08%
Sethuraman Venkataraman	25,000	8,250	16,750	0.04%
Sundrarajan Srinivasan	225,000	74,250	150,750	0.36%
Sujatha Srinivasan	100,000	33,000	67,000	0.16%
Sathayasai Ramachandran	25,000	8,250	16,750	0.04%
Simi Chadha	25,000	8,250	16,750	0.04%
Rajkumar	25,000	8,250	16,750	0.04%
Anand P Joshi	25,000	8,250	16,750	0.04%
Mahesh Manohar Pathak	25,000	8,250	16,750	0.04%
Sunil Bhatia	25,000	8,250	16,750	0.04%
Dhiral Pravin Chandaria	25,000	8,250	16,750	0.04%
Rishma Shetty	25,000	8,250	16,750	0.04%
Amber Singhania	25,000	8,250	16,750	0.04%
Haridas M Nayak	25,000	8,250	16,750	0.04%
Shankar K	25,000	8,250	16,750	0.04%
Chandrakanta Bhutada	25,000	8,250	16,750	0.04%
Joseph Serrao	25,000	8,250	16,750	0.04%
N L Dharmasamvardhani	25,000	8,250	16,750	0.04%
Davinder Pal Singh	50,000	16,500	33,500	0.08%
Daniel Mathews	50,000	16,500	33,500	0.08%
Vignesh Nayak	50,000	16,500	33,500	0.08%
Rajiv Bhambani	50,000	16,500	33,500	0.08%
Divya Pawan Chandak	50,000	16,500	33,500	0.08%
Sanjay Jain	50,000	16,500	33,500	0.08%
Deepa Vishwanathan	50,000	16,500	33,500	0.08%
Jaishankar Srinivasan	100,000	33,000	67,000	0.16%
Mouseback Limited	125,000	41,250	83,750	0.20%
Manoj Ram awtar Yadav	125,000	41,250	83,750	0.20%
Alagappan Muthuraman	125,000	41,250	83,750	0.20%
Kathiresan Annamalai	125,000	41,250	83,750	0.20%
V. Subramanian	70,000	36,500	33,500	0.08%
Mahesh V Chandak (HUF)	75,000	24,750	50,250	0.12%
Prashant Devendra Chonkar	250,000	82,500	167,500	0.40%
Venkat Krishnan	250,000	82,500	167,500	0.40%
Tan Si-Ruo	300,000	99,000	201,000	0.48%
C. Arumugam	36,160	36,160	0	0%
Maithili Vishwanathan	20,000	20,000	0	0%
Sangita Rajeev Mundra	20,000	20,000	0	0%
Seema Narayan	20,000	20,000	0	0%
Shanta Narayan	20,000	20,000	0	0%
Sudha Karthik Ramakrishnan	40,000	40,000	0	0%
Gowrisankaran Ramya	40,000	40,000	0	0%
Sunil Kumar Sharma	20,000	20,000	0	0%
Rita Shan	20,000	20,000	0	0%
Shweta Shenoy	20,000	20,000	0	0%
Gomathi Sundar	20,000	20,000	0	0%
N Sundar	20,000	20,000	0	0%
Rajagaopal Govindasamy	1,000,000	1,000,000	0	0%
Unifina Capital Partners	6,000,000	1,980,000	4,020,000	9.65%

 

1.

None of the Selling Shareholders are Broker/Dealers, or affiliates with or controlled by any Broker/Dealer.

2.

Includes shares of Common Stock for which the Selling Shareholders has the right to acquire beneficial ownership within 60 days.

3.

This table assumes that each Selling Shareholder will sell all shares offered for sale by it under this Registration Statement. Security holders are not required to sell their shares.

4.

Assumes that all shares of Common Stock registered for resale by this Prospectus have been sold.

5.

Based on 41,646,160 shares of Common stock issued and outstanding as of January 16, 2014.

6.

Mr. Suresh Venkatachari controls Unifina Capital Partners, additionally he was the former sole officer and director of the Company. He resigned from all positions with the Company as of June 24, 2013.

[RESALE PROSPECTUS ALTERNATE PAGE]

 

PLAN OF DISTRIBUTION

 

The selling security holders may sell some or all of their shares at a fixed price of $0.30 per share until our shares are quoted on the OTCBB and thereafter at prevailing market prices or privately negotiated prices. Prior to being quoted on the OTCBB, shareholders may sell their shares in private transactions to other individuals. Although our common stock is not listed on a public exchange, we will be filing to obtain a listing on the Over the Counter Bulletin Board concurrently with the filing of this prospectus. In order to be quoted on the Bulletin Board, a market maker must file an application on our behalf in order to make a market for our common stock. There can be no assurance that a market maker will agree to file the necessary documents with FINRA, which operates the OTC Electronic Bulletin Board, nor can there be any assurance that such an application for quotation will be approved. There can be no assurance that a market maker will agree to file the necessary documents with FINRA, which operates the OTC Electronic Bulletin Board, nor can there be any assurance that such an application for quotation will be approved. However, sales by selling security holder must be made at the fixed price of $0.30 until a market develops for the stock.

 

Once a market has been developed for our common stock, the shares may be sold or distributed from time to time by the selling stockholders directly to one or more purchasers or through brokers or dealers who act solely as agents, at market prices prevailing at the time of sale, at prices related to such prevailing market prices, at negotiated prices or at fixed prices, which may be changed. The distribution of the shares may be effected in one or more of the following methods:

 

· ordinary brokers transactions, which may include long or short sales,

·

transactions involving cross or block trades on any securities or market where our common stock is trading, market where our common stock is trading,

·

through direct sales to purchasers or sales effected through agents,

·

through transactions in options, swaps or other derivatives (whether exchange listed of otherwise), or exchange listed or otherwise), or

·

any combination of the foregoing.

 

In addition, the selling stockholders may enter into hedging transactions with broker-dealers who may engage in short sales, if short sales were permitted, of shares in the course of hedging the positions they assume with the selling stockholders. The selling stockholders may also enter into option or other transactions with broker-dealers that require the delivery by such broker-dealers of the shares, which shares may be resold thereafter pursuant to this prospectus.

 

Brokers, dealers, or agents participating in the distribution of the shares may receive compensation in the form of discounts, concessions or commissions from the selling stockholders and/or the purchasers of shares for whom such broker-dealers may act as agent or to whom they may sell as principal, or both (which compensation as to a particular broker-dealer may be in excess of customary commissions). Neither the selling stockholders nor we can presently estimate the amount of such compensation. We know of no existing arrangements between the selling stockholders and any other stockholder, broker, dealer or agent relating to the sale or distribution of the shares. We will not receive any proceeds from the sale of the shares of the selling security holders pursuant to this prospectus. We have agreed to bear the expenses of the registration of the shares, including legal and accounting fees, and such expenses are estimated to be approximately $85,000.

 

Notwithstanding anything set forth herein, no FINRA member will charge commissions that exceed 8% of the total proceeds of the offering.

 

In connection with the sale of shares, the Selling Shareholders and any participating broker or dealer may be deemed to be "underwriters" within the meaning of the Securities Act, and any profits on the sale of shares or commissions they receive may be deemed to be underwriting discounts and commissions under the Securities Act.

 

There is no assurance that the Selling Shareholders will sell any or all of the shares offered by them hereby.

 

[RESALE PROSPECTUS ALTERNATE PAGE]

 

PROSPECTUS

 

KM WEDDING EVENTS MANAGEMENT, INC.

11501 Dublin Blvd., Suite 200

Dublin, CA 94568

Phone: (925) 891-8029

Fax: (925) 891-8028

 

7,912,660 shares of Common Stock

 

January 16, 2014

 

 

DEALER PROSPECTUS DELIVERY OBLIGATION

 

Until ________, 2014, all dealers that effect transactions in these securities, whether or not participating in this Offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

PART II – INFORMATION NOT REQUIRED IN PROSPECTUS

 

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

 

The following table sets forth estimated expenses expected to be incurred in connection with the issuance and distribution of the securities being registered. All such expenses will be paid by us.

 

Securities and Exchange Commission Registration Fee	$	700.00
Audit Fees and Expenses	$	35,000
Legal Fees and Expenses	$	45,000
Transfer Agent and Registrar Fees and Expenses	$	2,500
Miscellaneous Expenses	$	1,800
Total	$	85,000*
* Estimate Only

 

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

 

The officers and directors of the Company are indemnified as provided by the Delaware General Corporation Law and the Bylaws of the Company. Unless specifically limited by a corporation’s Certificate of Incorporation, Delaware law automatically provides directors with immunity from monetary liabilities. Excepted from that immunity are:

 

1. willful failure to deal fairly with the corporation or its shareholders in connection with a matter in which the director has a material conflict of interest;

2. a violation of criminal law unless the director had reasonable cause to believe that his or her conduct was lawful or no reasonable cause to believe that his or her conduct was unlawful;

3. a transaction from which the director derived an improper personal profit; and

4. willful misconduct.

 

The Certificate of Incorporation provide that the Company will indemnify its officers, directors, legal representatives, and persons serving at the request of the Company as a director or officer of another corporation, or as its representative in a partnership, joint venture, trust or other enterprise to the fullest extent legally permissible under the laws of the State of Delaware against all expenses, liability and loss (including attorney’s fees, judgments, fines and amounts paid or to be paid in settlement) reasonably incurred or suffered by that person as a result of that connection to the Company. This right of indemnification under the Certificate of Incorporation is a contract right which may be enforced in any manner by such person and extends for such persons benefit to all actions undertaken on behalf of the Company.

 

The Bylaws of the Company provide that the Company will indemnify its directors and officers to the fullest extent not prohibited by Delaware law; provided, however, that the Company may modify the extent of such indemnification by individual contracts with its directors and officers; and, provided, further, that the Company shall not be required to indemnify any director or officer in connection with any proceeding (or part thereof) initiated by such person unless (i) such indemnification is expressly required to be made by law, (ii) the proceeding was authorized by the Board of Directors of the Company, (iii) such indemnification is provided by the Company, in its sole discretion, pursuant to the powers vested in the Company under Delaware law or (iv) such indemnification is required to be made pursuant to the Bylaws.

 

The Bylaws of the Company provide that the Company will advance to any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a director or officer, of the Company, or is or was serving at the request of the Company as a director or executive officer of another Company, partnership, joint venture, trust or other enterprise, prior to the final disposition of the proceeding, promptly following request therefore, all expenses incurred by any director or officer in connection with such proceeding upon receipt of an undertaking by or on behalf of such person to repay said amounts if it should be determined ultimately that such person is not entitled to be indemnified under the Bylaws of the Company or otherwise.

 

The Bylaws of the Company provide that no advance shall be made by the Company to an officer of the Company (except by reason of the fact that such officer is or was a director of the Company in which event this paragraph shall not apply) in any action, suit or proceeding, whether civil, criminal, administrative or investigative, if a determination is reasonably and promptly made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to the proceeding, or (ii) if such quorum is not obtainable, or, even if obtainable, a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, that the facts known to the decision-making party at the time such determination is made demonstrate clearly and convincingly that such person acted in bad faith or in a manner that such person did not believe to be in or not opposed to the best interests of the Company.

 

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

 

Set forth below is information regarding the issuance and sales of securities without registration since inception.

 

On December 17, 2012, the Company issued 6,000,000 shares of its common stock to an accredited investor for services rendered, with a per share price $0.001 per share. The shares were issued pursuant to Section 4(2) of the Securities Act of 1933, as they were transactions by an issuer not involving a public offering, no underwriters we used and no commissions were paid.

 

On January 14, 2013, we completed a Regulation S offering in which we sold 4,596,160 shares of common stock to 78 investors, at a price per share of $0.05 per share for aggregate proceeds of $229,808. The following sets forth the identity of the class of persons to whom we sold these shares and the amount of shares for each shareholder:

 

SHAREHOLDER	SHARES
Aniket Dogra	20,000
Arunkumar Shivaraman	20,000
Divya Chhawchharia	20,000
Falguni N shah	20,000
Harsh Shah	20,000
Hirek Dinesh Karaniya	20,000
Kumarpal S Shah	20,000
Lakshmikumaran Suresh	20,000
Lalitha Vaidyanathan	20,000
Madhuri M Shastri	20,000
Maithili Vishwanathan Iyer	20,000
V. Mythily	20,000
Nakul Chhawchharia	20,000
V.Narayanan Iyer	400,000
Nikesh Shah	20,000
R.Parthasarathy	400,000
Rajeev Jugalkishor Mundra	20,000
Rajeshwari Viswanathan Iyer	20,000
Ramesh Iyer	20,000
Reena Kaushik	20,000
Rita Shah	20,000
Sangita Rajeev Mundra	20,000
Seema Narayan	20,000
Shanta Narayan	20,000
Shailesh Varudkar	20,000
Sharanya Viswanathan Iyer	20,000
Sheela Ramesh	20,000
Shweta Shenoy	20,000
Sriram Iyer	100,000
V. Subramanian	20,000
Sudha Karthik Ramakrishnan	40,000
Sunil Kumar Sharma	20,000
Veeraraghavan Lakshmikumaran	20,000
Vijay Shah	20,000
Meyyammai Veerappan Chettiar	20,000
L. Nalina	20,000
A. Niranjani	20,000
S.Bharath	20,000
Veerappan Nagappan	20,000
A.Poornachandran	20,000
Thandava Krishna Murthy	20,000
Venkatasubramanyam Chandra Sekhar	20,000
N. Nagappan	20,000
Harish Awtaney	20,000
Lata Awtaney	20,000
Ajay Awtaney	20,000
Chandra Ramani	20,000
Lakshmi Narayanan Sankara Krishnan	20,000
Rama Subramani Lakshmi	20,000
Rama Subramani Radha	20,000
Rama Subramani Ramani	20,000
T.Shanthi Priya	20,000
Stephen Socorro D'costa	20,000
Shaikh Feroz Abdul Karim	20,000
Narayanan Sriram	20,000
Kandasamy Balakumar	20,000
Yussuf Sajjadhusein jawadwala	20,000
Krishnan Narayana	20,000
Mothukuri Saikumar	20,000
Mustansir Mannan Safri	20,000
Pachamuthu Senthilkumar	20,000
Pahlachander Sivaramakrishnan	20,000
Sivaramakrishnan Krishnamurthy	20,000
Pugalenthi Rajendiran	20,000
Sanjeevi Iyyamperumal	20,000
Duraisamy Ravichandran	20,000
Haja Sowkathali Abdul Rajack	20,000
Meyyammai Veerappan Chettiar	400,000
Veerappan Nagappan	400,000
Narayanan Sriram	400,000
Srinivasan Kannan	60,000
Rajagopal Govindasamy	1,000,000
Prashant Kothari	20,000
C Arumugam	36,160
N Sundar	20,000
Gomathi Sundar	20,000
Gowrisankaran Ramya	40,000

 

 

On May 20, 2013, we completed a Regulation S offering in which we sold 4,050,000 shares of common stock to 50 investors, at a price per share of $0.20 per share for aggregate proceeds of $810,000. The following sets forth the identity of the class of persons to whom we sold these shares and the amount of shares for each shareholder:

 

SHAREHODER	SHARES
Meyyammai Veerapan Chettiar	225,000
Veerappan Nagappan	225,000
Nikesh Shah	150,000
Harishankar Chaitanya	175,000
Sriram Iyer	175,000
V.Narayanan Iyer	75,000
R Ramesh	50,000
Vanaja Ramalingam	50,000
Kallal Choudhury	25,000
B. R Venugopal	25,000
Arvind Vishwanat	25,000
Sachin Srinivas Bhattad	25,000
Srinivasarangan Sundarrajan	50,000
Sethuraman Venkataraman	25,000
Sundrarajan Srinivasan	225,000
Sujatha Srinivasan	100,000
Sathayasai Ramachandran	25,000
Simi Chadha	25,000
Rajkumar	25,000
Jugalkishor Mundra	100,000
Anand P Joshi	25,000
Mahesh Manohar Pathak	25,000
Sunil Bhatia	25,000
Davinder Pal Singh	50,000
Dhiral Pravin Chandaria	25,000
Shailesh Varudkar	25,000
Jaishankar Srinivasan	100,000
Mouseback Limited	125,000
V. Subramanian	50,000
Vignesh Nayak	50,000
Rishma Shetty	25,000
Madhuri M Shastri	25,000
Manoj Ram awtar Yadav	125,000
Mahesh V Chandak (HUF)	75,000
Lalitha Vaidyanathan	50,000
Rajiv Bhambani	50,000
Divya Pawan Chandak	50,000
Amber Singhania	25,000
Haridas M Nayak	25,000
Prashant Devendra Chonkar	250,000
Sanjay Jain	50,000
Shankar K	25,000
Venkat Krishnan	250,000
Tan Si-Ruo	300,000
Alagappan Muthuraman	125,000
Deepa Vishwanathan	50,000
Daniel Mathews	50,000
Chandrakanta Bhutada	25,000
Joseph Serrao	25,000
N L Dharmasamvardhani	25,000
Kathiresan Annamalai	125,000

 

The Common Stock issued in our Regulation S Offering was issued in a transaction not involving a public offering in reliance upon an exemption from registration provided by Rule 506 of Regulation D of the Securities Act of 1933. In accordance with Section 230.506(b)(1) of the Securities Act of 1933, these shares qualified for exemption under the Rule 506 exemption for this offerings since it met the following requirements set forth in Reg. §230.506:

 

(A) No general solicitation or advertising was conducted by us in connection with the offering of any of the Shares.

 

(B) At the time of the offering we were not: (1) subject to the reporting requirements of Section 13 or 15 (d) of the Exchange Act; or (2) an “investment company” within the meaning of the federal securities laws.

 

(C) Neither we, nor any of our predecessors, nor any of our directors, nor any beneficial owner of 10% or more of any class of our equity securities, nor any promoter currently connected with us in any capacity has been convicted within the past ten years of any felony in connection with the purchase or sale of any security.

 

(D) The offers and sales of securities by us pursuant to the offerings were not attempts to evade any registration or resale requirements of the securities laws of the United States or any of its states.

 

(E) None of the investors are affiliated with any of our directors, officers or promoters or any beneficial owner of 10% or more of our securities.

 

We have never utilized an underwriter for an offering of our securities.

 

ITEM 16. EXHIBITS

 

The following is a list of exhibits filed as part of this Registration Statement. Where so indicated by footnote, exhibits which were previously filed are incorporated herein by reference. Any statement contained in an Incorporated Document shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein or in any other subsequently filed Incorporated Document modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement.

 

Exhibit Number		Description
3.1		Certificate of Incorporation of KM Wedding Events Management, Inc.(1)
3.2		Bylaws of KM Wedding Events Management, Inc.(1)
5.1		Opinion of Zouvas Law Group, P.C., regarding the legality of the shares being registered(2)
10.1		Agreement between KM India and Sun TV dated March 31, 2008(2)
10.2		Agreement between KM India and Vasan Print Products Private Limited dated August 10, 2008(2)
10.3		Agreement between KM India and Vasan Publications Private Limited dated October 10, 2008(2)
10.4		Intellectual Property Agreement between KM India and Unique Marriage Services dated November 29, 2012(2)
10.5		Stock Purchase Agreement between KM India and the Company dated February 14, 2013(2)
10.6		Stock Purchase Agreement among the Company and Venkatesan Vaidhyanathan, Meera Ngarajan, Sridhar Kalyanasundaram, Vijaya Bhaskar Venkatesan & Nithya Vijaya Baskar dated February 14, 2013(2)
21.1		List of Subsidiaries(1)
23.1		Auditor Consent(2)
23.2		Consent of Zouvas Law Group, P.C.,  (included in Exhibit 5.1)

 

w

	(1)	Filed with the SEC on November 18, 2013 as part of our Registration Statement on Form S-1.
	(2)	Filed herewith.

 

 

ITEM 17. UNDERTAKINGS

 

(a) The undersigned Registrant hereby undertakes to:

 

1.

To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

 

i.

To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;

 

ii.

To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement.

 

iii.

To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

 

Provided however, that:

 

A.

Paragraphs (a)(1)(i) and (a)(1)(ii) of this section do not apply if the registration statement is on Form S-8, and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement; and

 

B.

Paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section do not apply if the registration statement is on Form S-3 or Form F-3 and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.

 

2.

That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

3.

To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

 

4.

If the registrant is a foreign private issuer, to file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A. of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Act need not be furnished, provided that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (a)(4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements. Notwithstanding the foregoing, with respect to registration statements on Form F-3, a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Act or Rule 3-19 of this chapter if such financial statements and information are contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Form F-3.

 

5.

That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:

 

i.

If the registrant is relying on Rule 430B:

 

A.

Each prospectus filed by the registrant pursuant to Rule 424(b)(3)shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and

 

B.

Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date; or

 

ii.

If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

 

6.

That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

 

i.

Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

 

ii.

Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

 

iii.

The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

 

iv.

Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

SIGNATURES

 

Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-1 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, on the 21^st day of January, 2014.

.

 

	KM WEDDING EVENTS MANAGEMENT, INC.
	By:	/s/ Meera Nagarajan
	Name:	Meera Nagarajan
	Title:	Managing Director and Chief Executive Officer

 

POWER OF ATTORNEY

 

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Meera Nagarajan, as his true and lawful attorney-in-fact and agent with full power of substitution and resubstitution, for her and in her name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement on Form S-1 of KM Wedding Events Management, Inc., and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, grant unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the foregoing, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitutes, may lawfully do or cause to be done by virtue hereof.

 

In accordance with the requirements of the Securities Act of 1933, this Registration Statement was signed by the following persons in the capacities and on the dates stated.

 

Signature		Title		Date
/s/ Meera Nagarajan Meera Nagarajan		Managing Director and Chief Executive Officer		January 21, 2014

EXHIBIT INDEX

 

Exhibit Number		Description
3.1		Certificate of Incorporation of KM Wedding Events Management, Inc.(1)
3.2		Bylaws of KM Wedding Events Management, Inc.(1)
5.1		Opinion of Zouvas Law Group, P.C., regarding the legality of the shares being registered(2)
10.1		Agreement between KM India and Sun TV dated March 31, 2008(2)
10.2		Agreement between KM India and Vasan Print Products Private Limited dated August 10, 2008(2)
10.3		Agreement between KM India and Vasan Publications Private Limited dated October 10, 2008(2)
10.4		Intellectual Property Agreement between KM India and Unique Marriage Services dated November 29, 2012(2)
10.5		Stock Purchase Agreement between KM India and the Company dated February 14, 2013(2)
10.6		Stock Purchase Agreement among the Company and Venkatesan Vaidhyanathan, Meera Ngarajan, Sridhar Kalyanasundaram, Vijaya Bhaskar Venkatesan & Nithya Vijaya Baskar dated February 14, 2013(2)
21.1		List of Subsidiaries(1)
23.1		Auditor Consent(2)
23.2		Consent of Zouvas Law Group, P.C.,  (included in Exhibit 5.1)

 

(1)

Filed with the SEC on November 18, 2013 as part of our Registration Statement on Form S-1.

(2)

Filed herewith.