Add-Shop E-Retail Ltd Management Discussions.


Our Company was originally incorporated as Add-Shop Promotions Private Limited at Rajkot, Gujarat as a Private Limited Company under the provisions of Companies Act, 1956 vide Certificate of Incorporation dated August 20, 2013 bearing Corporate Identification Number U51109GJ2013PTC076482 issued by Registrar of Companies, Dadar and Nagar Havelli, Gujarat. Subsequently our Company was converted into a Public Limited Company pursuant to special resolution passed by the shareholders at the Extraordinary General Meeting held on June 11, 2018 and fresh certificate of incorporation consequently upon change of name was issued by Registrar of Companies, Gujarat, Ahmedabad dated June 21, 2018 and name of our Company was changed to Add-Shop Promotions Limited. The Corporate Identification Number is U51109GJ2013PLC076482. For further details of change of name and registered office of our Company. Our Promoter and Managing Director Dineshbhai Pandya is visually impaired person and a first-generation entrepreneur, trainer and motivator. He has experience in the field of Ayurvedic and Pharma. He is awarded "Golden Books of records " for most village assemblies addressed by a differently able person The Company was incorporated by him with a vision to find and implement solutions for two very deep-rooted challenges of our nation like unemployment & unhealthiness of our citizens. Our Company is currently engaged in the business of marketing and distribution of products in the categories of ayurvedic products, food supplement products, agricultural products, animal feed supplement products and personal care products under the brand name "Add-Shop Promotions". In this present competitive era of medicines and food supplements, our company is aiming to focus on ways to bridge the nutrition gap, which is a recognized cause of any diseases, by promoting Ayurveda and its products.

We primarily cater to retailers and wholesalers where we supply products manufactured by select manufacturers under our brand. We procure the finished products from our G.M.P and I.S.O certified manufacturers and thereafter market the product through various intermediaries and sales agents. With an objective to penetrate major market, we have entered into agreement with various collecting and forwarding agents (C&F s). Our Company has entered into agreements with Panchlingeshwara Enterprises, in Karnataka., Just Need United Trading, Maharashtra and Good Life Enterprises Telangana. Our Company distributes organic products to farmers for their agriculture use as well organic cattle feed products for their livestock. Our Company believes that the agriculture sector in India is expected to generate better momentum in the next few years due to increased investments in agricultural infrastructure.

The Government of India has also introduced several projects to assist the agriculture sector which is ensuring better growth prospects in the said Industry. Foreseeing the growth in the agricultural sector, our company intends to tap the growth opportunity by pushing sales through a wide range of agro products. Our Company is a fellow member of Federation of Direct Selling association vide membership number FDSA/F/10.

(a) Business Scenario

Finical Year 2018-19 was a result-oriented year in every term. Either it is achieving something or planning well. Further it has celebrated its 4th anniversary in the Asias largest auditorium Shree Shanmukhanad Auditorium, Mumbai and gave award-reward to many of associates. Impact of the function has visualized in numbers by way of increase in sales and profit.

During the year, the Company covered 4 more States under its business territory , established 500+ outlets and 50,000 associates. The Company had tried to trained most of their associates and today more than 300 associates are highly active in India. Further, to increase turnover, it have increased inventory of various categories like Ayurveda medicine, Organic Fertilizer, Herbal Cosmetics and as a result 100% biodegradable Sanitary Napkins Launched by the Company. For spreading the knowledge of Ayurveda, the company has started Doctor Helpline number. The Company emphasis more on utilization of social media platform to train their associates and to bring awareness about their product.

The Company aim is to bring the product cheaper for consumer with the same quality by doing various innovative method and Research and Development by its team.


World growth strengthened in 2017 to 3.8 percent, with a notable rebound in global trade. It was driven by an investment recovery in advanced economies, continued strong growth in emerging Asia, a notable upswing in emerging Europe, and signs of recovery in several commodity exporters. Global growth is expected to tick up to 3.9 percent this year and next, supported by strong momentum, favorable market sentiment, accommodative financial conditions, and the domestic and international repercussions of expansionary fiscal policy in the United States.

Indian Economy Overview Introduction India has emerged as the fastest growing major economy in the world as per the Central Statistics Organisation (CSO) and International Monetary Fund (IMF) and it is expected to be one of the top three economic powers of the world over the next 10-15 years, backed by its strong democracy and partnerships. India s GDP is estimated to have increased 6.6 per cent in 2017-18 and is expected to grow 7.3 per cent in 2018-19.

Market size

Indias gross domestic product (GDP) at constant prices grew by 7.2 per cent in September- December 2017 quarter as per the Central Statistics Organisation (CSO). Corporate earnings in India are expected to grow by 15-20 per cent in FY 2018-19 supported by recovery in capital expenditure, according to JM Financial. The tax collection figures between April 2017- February 2018 show an increase in net direct taxes by 19.5 per cent year-on-year and an increase in net direct taxes by 22.2 per cent year-on-year. India has retained its position as the third largest startup base in the world with over 4,750 technology startups, with about 1,400 new start-ups being founded in 2016, according to a report by NASSCOM.

Recent Developments

With the improvement in the economic scenario, there have been various investments in various sectors of the economy. The M&A activity in India increased 53.3 per cent to US$ 77.6 billion in 2017 while private equity (PE) deals reached US$ 24.4 billion. Some of the important recent developments in Indian economy are as follows:

• Indias merchandise exports and imports grew 11.02 per cent and 21.04 per cent on a y-o-y basis to US$ 273.73 billion and US$ 416.87 billion, respectively, during April-February 2017-18.

• Indias Foreign Direct Investment (FDI) inflows reached US$ 208.99 billion during April 2014 December 2017, with maximum contribution from services, computer software and hardware, telecommunications, construction, trading and automobiles.

• Indias Index of Industrial Production (IIP) rose 7.5 per cent year-on-year in January 2018 while retail inflation reached a four-month low of 4.4 per cent in February 2018.

• Indian merchandise exports in dollar terms registered a growth of 4.48 per cent year-on-year in February 2018 at US$ 25.83 billion, according to the data from Ministry of Commerce & Industry.

• Indian companies raised Rs 1.6 trillion (US$ 24.96 billion) through primary market in 2017.

• Moody s upgraded India s sovereign rating after 14 years to Baa2 with a stable economic outlook.

• Indias ranking in the world has improved to 126 in terms of its per capita GDP, based on purchasing power parity (PPP) as it increased to US$ 7,170 in 2017, as per data from the International Monetary Fund (IMF).

• India is expected to have 100,000 startups by 2025, which will create employment for 3.25 million people and US$ 500 billion in value, as per Mr. T V Mohan Das Pai, Chairman, Manipal Global Education.

• The World Bank has stated that private investments in India is expected to grow by 8.8 per cent in FY 2018-19 to overtake private consumption growth of 7.4 per cent, and thereby drive the growth in Indias gross domestic product (GDP) in FY 2018-19.

• The Niti Aayog has predicted that rapid adoption of green mobility solutions like public transport, electricvehicles and car-pooling could likely help India save around Rs 3.9 trillion (US$ 60 billion) in 2030.

• Indian impact investments may grow 25 per cent annually to US$ 40 billion from US$ 4 billion by 2025, as per Mr. Anil Sinha, Global Impact Investing Networks (GIIN s) advisor for South Asia.

• The Union Cabinet, Government of India, has approved the Central Goods and Services Tax (CGST), Integrated GST (IGST), Union Territory GST (UTGST), and Compensation Bill.

• The Nikkei India manufacturing Purchasing Managers Index increased at the fastest pace in December 2017 to reach 54.7, signaling a recovery in the economy. Government Initiatives

• The Union Cabinet gave its approval to the North-East Industrial Development Scheme (NEIDS) 2017 in March 2018 with an outlay of Rs 3,000 crores (US$ 460 million) up to March 2020.

• In March 2018, construction of 321,567 additional houses across 523 cities under the Pradhan Mantri Awas Yojana (Urban) has been approved by the Ministry of Housing and Urban Poverty Alleviation, Government of India with an allocation of Rs 18,203 crore.

• Prime Ministers Employment Generation Programme (PMEGP) will be continued with an outlay of Rs 5,500 crore (US$ 844.81 million) for three years from 2017-18 to 2019-20, according to the Cabinet Committee on Economic Affairs (CCEA).

• The Government of India has decided to invest Rs 2.11 trillion (US$ 32.9 billion) to recapitalise public sector banks over the next two years and Rs 7 trillion (US$ 109.31billion) for construction of new roads and highways over the next five years.

• The India-Japan Act East Forum, under which India and Japan will work on development projects in the North- East Region of India will be a milestone for bilateral relations between the two countries, according to Mr. Kenji Hiramatsu, Ambassador of Japan to India.

• Indias revenue receipts are estimated to touch Rs 28-30 trillion (US$ 436- 467 billion) by 2019, owing to Government of Indias measures to strengthen infrastructure and reforms like demonetisation and Goods and Services Tax (GST).

Road Ahead

Indias gross domestic product (GDP) is expected to reach US$ 6 trillion by FY27 and achieve upper-middle income status on the back of digitisation, globalisation, favourable demographics, and reforms. India is expected to be the third largest consumer economy as its consumption may triple to US$ 4 trillion by 2025, owing to shift in consumer behaviour and expenditure pattern, according to a Boston Consulting Group (BCG) report; and is estimated to surpass USA to become the second largest economy in terms of purchasing power parity (PPP) by the year 2040, according to a report by PricewaterhouseCoopers.


Recent Economic Developments

Poverty has declined since 2004/5 although temporary disruptions from demonetization and depressed food prices may have moderated the pace in the short term. Real GDP growth slowed to 7.1 % in FY16/17 from 8 % in FY15/16, and to 5.7 % in Q1 FY17/18. Despite the increase in public and private consumption due to the revival of rural demand after a normal monsoon and the implementation of the 7th central pay commission recommendations, overall demand slowed as investments remained weak. Excluding agriculture, output growth experienced a slowdown compared to the previous year. Construction, real estate, and manufacturing were particularly affected. Public finances remain stable, although contingent liabilities are rising. The central government stuck to its fiscal targets in FY16/17, reaffirming fiscal credibility. The quality of expenditures at the general government level has shifted towards productive infrastructure spending in recent years, providing an additional stimulus to growth.

However, fiscal deficits at the sub-national level have risen from an aggregate of 2.6% in FY12- 15 to 3.7% in FY16-17 largely because of a transfer of some public sector enterprise liabilities to direct debt of states.

Economic Outlook

Economic activity is expected to stabilize, maintaining annual GDP growth at 7.0% in FY18. Growth is projected to increase to 7.4% by FY20, underpinned by a recovery in private investments prompted by a recent increase in public capex and an improvement in the investment climate (partly due to passage of the GST and the Bankruptcy Code, and measures to attract FDI). The biggest medium-term risks are associated with the recovery in private investments which continues to face several domestic impediments including the corporate debt overhang and regulatory and policy challenges, along with the risk of an imminent increase in US interest rates.


It has been predicted that India with increased digital adoption, the Indian healthcare market, which is worth around US$ 100 billion, will likely grow at a CAGR of 23 per cent to US$ 280 billion by 2020. The Healthcare Information Technology (IT) market is valued at US$ 1 billion currently (April 2016) and is expected to grow 1.5 times by 2020. A total of 3,598 hospitals and 25,723 dispensaries across the country offer AYUSH (Ayurveda, Yoga & Naturopathy, Unani, Siddha and Homoeopathy) treatment, thus ensuring availability of alternative medicine and treatment to the people.

Global Market Growth & Demand Scenario

By 2020, the world will have 1 billion populations of 60+ ages. 70% of this population live in developed nations & balance 30% in developing nations. Nutraceutical demand will grow at a steady rate in developed nations. Developing nations with their progressive disposable income will see a sudden surge in growth in the next 5-10 years.


The Indian Nutraceuticals market is expected to grow from $ 4 Bn in 2015 to $ 10 Bn in 2022. This represents a huge growth of 21% growth annually. Those brands that will invest in growing the category by spreading awareness regarding the benefits of food supplements as well as a focus on quality products customized to Indian needs will stay relevant and gain the lion s share in this growing sector.

Consumer Segments

India represents a huge and vast market for Nutraceuticals as almost every segment has a need for some form of Nutraceuticals. Some segments have a more pronounced need for Nutraceuticals among others;

1. Growing children needs Functional food and beverage supplement to be able to perform well in academics and extra-curricular well

2. Younger Age-groups 15-25 & 25-35 are stronger targets either due to active lifestyle or specific needs

3. Pregnant and lactating mothers need to supplement their nutrition need

4. Ages 60+ group are specifically vulnerable to Diabetes, Bone related diseases and other ailments and needs special preventive protection through Nutraceuticals.


The Company had got its equity listed on BSE SME Platform on 10th September, 2018 which would give more wider range and presence in the Corporate world.

Further, the Company achieved SME Top 100 award by the MSME Central Minister Shree Nitin Gadkari on the SME International day.


Our Competitive Strenghts

1. Tie-up with our suppliers

We have entered into a tie up agreement with Marss Herbal (India) which is engaged in manufacturing of wide range of herbal and natural use products. Marrs herbal manufactures the products and supply us under our brand, registered brand name of ADD-Shop Promotions Limited.

2. Experienced Promoter and Management team

Our promoter Dineshbhai Pandya is visually impaired person and has an experience of approximately two decades in field of marketing and also possesses knowledge in agriculture and health products. He also has experience to manufacture such agricultural products and other animal feed supplement products. He has conducted approximately 1200 village assemblies across India in order to educate farmers regarding organic farming. Our business operations are managed by team of personnel which enables us to continue to take advantage of market opportunities and expanding our business

3. Relationship with distributors and Customers

We believe in constantly addressing our distributors, sales agent and customer needs for our products. Our relationship with them help us to get repeat business. This has helped us to maintain a long-term relationship with our distributors, sales agent and customers. We believe that our relationship with our distribution, sales agents and customers represents a competitive advantage in gaining new clients and increasing our business.

4. Focused Market Area.

Our company is engaged in the business of marketing and selling of over the counter ayurvedic medicines and personal care products. We have focused on Urban, Semi-Urban and Rural markets to sell our exclusive products, as the demand of quality goods and services in the urban, semi-urban and rural areas of India is increasing rapidly.

Our Business Strategy

1. Focus on increasing geographical presence

We believe that our growth in the markets will result from growing demand for the products we distributing. Our strategic initiatives for wide markets include offering of wide products which helps us develop a broad market penetration and establish our presence in developed market.

2. Customer Satisfaction

We plan to grow our business primarily by increasing the number of customers, as we believe that increased customer relationships will add stability to our business. We seek to build on existing relationships and also focus on bringing into our portfolio more customers. Our Company believes that our business is a by-product of relationship. Our Company believes that a long-term customer relationship with large clients fetches better dividends. Long-term relations are built on trust and continuous meeting with the requirements of the customers.

3. Manufacturing of new products

Currently, we have a tie-up with Marss Herbal (India) for the supply of products. In future, we plan to grow our business by manufacturing ayurvedic, food supplement, agriculture, animal fidsuplyment, personal care products as well as other products. We believe that manufacturing of products will help us in increasing the volume of sales and profitability.

4. Focus on diversified business model

We are currently focused on supply of ayurvedic, food supplement, agriculture, animal fidsuplyment, personal care products. We intend to venture into trading in different types of products in above categories including agro and herbal products. This will provide us a growth opportunity as well as mitigating the risk of focusing only on a certain type of trade. This is in order to ensure our long term stability and enhancement of our revenue growth.


• Currently, the market for herbal supplements varies on the basis of consumer awareness, product availability, and forms of delivery, product acceptance, and regional regulations. Rising health consciousness increased concern towards diet, and enhanced attention towards preventive health care has made them turn towards health-imparting herbal supplements. Cosmetics, personal care, health care and food supplements have the major share in the global herbal products market.

• The Company is in the direct selling retailer business so it has offered a scheme to all its associates and according to that the Company identifies the one who will be eligible for actively sales for 30 days of month. After that the said associate will get promotions, reward or gift vouchers.

• The Company is in the direct selling retailer business so it has offered a scheme to all its associates and according to that the Company identifies the one who will be eligible for actively sales for 30 days of month. After that the said associate will get promotions, reward or gift vouchers.

• The Company has started its own manufacturing unit, which will ultimately resulting into the cost cutting of the company and increasing the profit thereby. Further, it has opened up three new branch offices in the different cities.

• Your Company had conducted 3 giant events, 6 small events, 14 product training, 34 one-day programme and 2600 two-hours programme to grow and expand its business.


• Yield is dependent on nature of the region / area of distribution, sale.

• Lack of interest for doing scientific study on the plants and their products.

• Patent issue

• Product quality variation due to lack of process standardization

• High investment and law profit margin

• Lack of support in International Market

• Lack of scientific evidence makes it difficult to convince people.

(b) Outlook and Future Prospects

The word ‘Ayurveda is derived from two Sanskrit words Ayush and Vid. Ayush means life and Vid means knowledge or science. In India the science of life has originated since 5000 years ago and is one worlds oldest health care systems. Ayurveda is the Mother of all Healing systems which offers all healing therapies and natural medicines. Since Ayurveda is a medicinal system that hails from India and is considered as an alternative medicine throughout the world. The lost ground in India has been regained in mass appeal and has noticed an interest in the west. Change has also been notice towards nature cure and hence herbal therapies, natural medicines have come back. The research and teaching in Ayurveda has been supported by the Indian Government. Taking into account the above the Company is bound to succeed in the plans and programmes it has developed for the future as well as the products it has launched for the betterment of the society at large.

(c) Risks & Concerns

The Company has a challenge in the form of language barrier which was mostly impacted over the rural area of the nation. To overcome it, Company prepared local language literature in different 8 languages. This will defeat the problem and improves the turnover of the company.

Further, the herbal industry has certain weaknesses that need to be addressed. In general, the industry has weak backward linkages that affect supply chain like inadequate backward linkages such as contract production and investment from finished industry to minimize the business risk. Further, despite a friendly government, industry does not find the policies and regulation adequately appropriate for sector growth.

This industry is marred with high investment cost, patent issues and low profit margin that make the small-scale industries sustenance tough. The industry for its sustenance need to be export oriented, but product variability and poor tie-ups with foreign countries makes it challenging to target international market. The product variability is affected due to lack of process standardization. Finally, inadequate interest regarding scientific studies impacts the product development, validation and standardization.

(d) Subsidiaries/Joint Ventures

The Company does not have subsidiaries, associates and joint venture companies.

(e) Human Resources

Talented and skilled manpower is an important enabler for a Company to grow and maintain competitiveness. Human resources are considered as most important and valuable assets of your Company. Focus was kept on acquisition, retention and development of necessary skilled manpower keeping in view our current operations requirement as well as the future business expansion and growth plans. The Company continues to conduct employee trainings across several functions pertaining to technical, behavioral, general health safety and environment. A regular employee performance evaluation system is in place to evaluate the individual performance as well as determining their development needs and future potential.

Your Company has complied with all the regulations pertaining to Factory, Labour and other applicable laws and very cordial industrial relations are maintained with the employees. It considers manpower as its assets and that people had been driving force for growth and expansion of the Company.

(f) Financial Results:

(Rs. In Lakhs)

Income for the year 2274.38 1254.89
Other Income - 0.62
Total Income 2274.38 1255.52
Profit before Financial Cost, Depreciation and Taxation 179.35 40.44
Less: Financial Cost 51.44 3.07
Operating profit before Depreciation & Taxation 127.90 37.37
Less: Depreciation 9.81 5.26
Profit before Taxation 118.09 32.11
Provision for Taxation :
Current Tax/Excess Short Provision 28.57 8.99
Deferred Tax 2.89 0.17
Profit after Taxation 86.63 22.96

(a) Segment -Wise or product wise performance

The Company operates in only single segments. Hence segment wise performance is not applicable.

(b) Internal Control Systems and their adequacy

The Company has in place, adequate internal control systems and procedures covering all the financial and operating functions. These have been designed to provide adequate assurance to the management regarding compliance with the accounting standards by maintenance of appropriate accounting records, monitoring the economy and efficiency of operations, protecting the assets of the Company from losses and ensuring the reliability of financial and operational information through proper compliance with the statutory enactments and its rules and regulations. Some of the significant features of the internal control systems and procedures are as follows:

As a part of the effort to evaluate the effectiveness of the internal control systems, your Companys internal audit department reviews all the control measures on a periodic basis and recommends improvements, wherever appropriate. The internal audit department is manned by highly qualified and experienced personnel and reports directly to the Audit Committee of the Board. The Audit Committee regularly reviews the audit findings as well as information Security Assurance Services is also provided by independent external professionals. Based on their recommendations, the Company has implemented a number of control measures both in operational and accounting related areas, apart from security related measures.

(c) Cautionary Statement

Certain statements in the Management Discussion & Analysis describing the Companys objectives, projection, estimates, expectations or predictions may be "forward looking statements" within the meaning of applicable securities laws and regulations. Actual results may differ from those expressed or implied. Important factors that could make a difference to the Companys operations include raw material availability and prices, cyclical demand and pricing in the Companys principal markets, changes in Government regulations, tax regimes, economic developments within India and other identical factors.

Forward-looking statements are based on certain assumptions and expectations of future events. These statements are subject to certain risks and uncertainties. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The actual result may be different from those expressed or implied since the companys operations are affected by the many external and internal factors, which are beyond the control of the management. Hence the company assumes no responsibility in respect of forward-looking statements that may be amended or modified in future on the basis of subsequent developments, information or events. Company follows all mandatory Accounting Standards.

For, Add-Shop Promotions Limited
Date: 05/08/2019 Dinesh Pandya
Place: Rajkot Managing Director