Add-Shop E-Retail Ltd Directors Report.

To,

The Members of Add-Shop Promotions Limited

The Directors take pleasure in presenting the 06th Annual Report together with Audited accounts of the company for the year ended on 31st March, 2019 which they trust, will meet with your approval.

Financial Result:

(Rs. In Lakhs)

PARTICULARS YEAR ENDED YEAR ENDED
31.03.2019 31.03.2018
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

Dividend:

In order to conserve and plough back to the resources, your directors have not recommended any dividend for the year on equity shares of the Company.

Operations:

The total revenue during the year have been Rs. 2274.38 lakhs compared to Rs.1255.52 lakhs in the previous year. The Companys Profit for the year before depreciation, interest and taxation has been Rs. 127.90 lakhs (P.Y. Rs. 37.37 lakhs) and the Net Profit after interest, depreciation, prior period adjustments & taxes are Rs.86.63 lakhs (P.Y. Rs. 22.96 lakhs).

Share capital:-

The paid up equity share capital as on 31st March, 2019 stood at Rs. 6,47,41,250/- i.e.64,74,125equity shares of Rs. 10/- each.

Initial Public Offering:

The Company had came out with Initial Public Offering of 23,96,000 equity shares of Rs 10/- each at a premium of Rs 16/- per equity shares aggregating to Rs. 622.96 lakhs and Company got listed its entire equity shares on BSE SME Platform dated September 10,2018.

Listing:

The Equity Shares of the Company are listed on SME Platform of BSE Limited. The Company is regular in payment of all kind of fees to the exchange for the year 2018-19. The Company got listed on BSE SME platform on date 10/09/2018. The members are requested to take note of the same. The ISIN and Scrip Code of the Company is as under:

ISIN: INE01B501018

Scrip Code: 541865

Particulars of Loans, Guarantee or Investments:

The Company has not given any loans or guarantees covered under the provisions of section 186 of the Companies Act, 2013 during the financial year 2018-19.

Disclosure Under Rule 8 (5) Of Companies (Accounts) Rules, 2014:

Change in Nature of Company Business:

During the year under review, the business of the company has not been changed.

Details of Directors/Key Managerial Personnel Appointed / Resigned:

During the year under review, below mentioned directors have been appointed / resigned:

Appointment:

• Ms.Falguni Dhrumil Shah appointed as a Company Secretary and Compliance Officer of the Company on June 23, 2018

• Ms. Kinjal Khunt, Mr.Yagnik Mundadiya, Mr.Rushabh Vora and Mr.Vivek Dadhania were appointed as an Additional Independent Director of the Company on June 25, 2018 and subsequently were regularized as an Independent Director on June 27, 2018.

• Mr. Rajeshkumar Parekh was appointed as an Additional Independent Director of the Company on May 26,2018 and subsequently were regularized as Independent Director on May 31,2018.

• Mrs.Deviben Pandya is the Executive Director of our Company. She was appointed as an additional Director of our Company on May 10, 2018 and was regularised as an Executive Director on May 31, 2018.

• Mr.Jigar Pandya is the Executive Director of our Company He was appointed as an additional Director of our Company on May 10, 2018 and was regularised as an Executive Director on May 31, 2018.

• Mr.Devang Dineshbhai Pandya is the Executive Director of our Company. He was appointed as an additional Director of our Company on May 10, 2018 and was regularised as an Executive Director on May 31, 2018. Further, he was appointed as a Chief Financial Officer on May 26, 2018

Resignation:

• Mr. Kanubhai Kheni was resigned from the post of Director with effect from 19th April, 2018

• Mr. Raj Haridutt Sharma, Mr.Girish Mahalingaiah, Mr.Mahendra Khengar and Mr.Mangilal Panchal were resigned from the post of Director with effect from 23rd June, 2018.

Details of Holding / Subsidary Companies / Joint Ventures / Associate Companies:

During the year under review, there was no holding / Subsidary Company / Joint Ventures / Associate Companies.

Event Subsequent to the Date of Financial Statement

There were no material changes and commitments affecting the financial position of the Company subsequent to the end of the financial year.

Deposit:

The Company has not invited any deposit other than the exempted deposit as prescribed under the provision of the Companies Act, 2013 and the rules framed there under, as amended from time to time. Hence there are no particulars to report about the deposit falling under Rule 8 (5) (v) and (vi) of Companies (Accounts) Rules, 2014.

Details of Significant and Material Orders passed by Regulators or Courts or Tribunals:

During the year under review there were no significant and material orders passed by any Regulators or Court or Tribunals which may have impact on the going concern status. No order has been passed by any Regulators or Court or Tribunals which may have impact on the Companys operation in future.

Conservation of Energy, Technology Absorption and Foreign Exchange Earning and Outgoings

Conservation of Energy: Energy conservation is important for the company and therefore energy conservation measures are undertaken wherever practicable in its plant and attached facilities. The Company is making every effort to ensure the optimal use of energy, avoid waste and conserve energy by using energy efficient equipments with latest technologies.

Technology absorption: The Company continuous to use the latest technologies for improving the productivity and quality of its services and products.

Foreign exchange Earnings and Outgoings: There are no foreign exchange earnings and out-goings during the financial year.

Key Managerial Personnel

Name of Director Designation
Dineshbhai Bhanushankar Pandya Managing Director
Devang Dineshbhai Pandya Chief Financial Officer
Falguni Dhrumil Shah Company Secretary

Audit committee

Name of Director Position in the Committee Designation
Rajeshkumar Parekh Chairperson Non-Executive Independent Director
Vivek Dadhania Member Non-Executive Independent Director
Rushabh Vora Member Non-Executive Independent Director

Nomination and Remuneration Committee

Name of Director Position in the Committee Designation
Yagnik Mundadiya Chairperson Non-Executive Independent Director
Kinjal Khunt Member Non-Executive Independent Director
Rajeshkumar Parekh Member Non-Executive Independent Director

Stakeholders Relationship Committee

Name of Director Position in the Committee Designation
Rushabh Vora Chairperson Non-Executive Independent Director
Rajeshkumar Parekh Member Non-Executive Independent Director
Jigar Pandya Member Executive Director

Committees Meetings:

The Audit Committee met Four (4) times during the financial year 2018-19, and the details of the meeting are as follows:

Sr. No Date of Meeting Attendance of Members
1. 06.04.2018 Chairman & all other members were present
2. 26.05.2018 Chairman & all other members were present
3. 05.07.2018 Chairman & all other members were present
4. 14.11.2018 Chairman & all other members were present

The Nomination & Remuneration Committee met One (1) times during the financial year 2018-19, and the details of the meeting are as follows.

Sr. No Date of Meeting Attendance of Members
1. 25.06.2018 Chairman & all other members were present

Board Meetings & Extra Ordinary General meeting

During the year 2018-19, the Board of Directors met regularly, 12 (Twelve) Board Meetings were convened and held. Interval between any two meetings was well within the maximum allowed gap of 120 days.

Date Particulars
06.04.2018 All Directors were present
20.04.2018 All Directors were present
25.04.2018 All Directors were present
05.05.2018 All Directors were present
10.05.2018 All Directors were present
26.05.2018 All Directors were present
02.06.2018 All Directors were present
23.06.2018 All Directors were present
25.06.2018 All Directors were present
29.09.2018 All Directors were present
14.11.2018 All Directors were present
12.02.2019 All Directors were present

During the period under report, the Company had called 4 (Four) Extra Ordinary General meeting as under:-

Date Particulars
27.04.2018 Allotment of 8,00,000 shares
31.05.2018 Authorised Share Capital of our Company was increased to Rs. 7,00,00,000 consisting of 70,00,000 Equity Shares of Rs. 10 each
11.06.2018 Conversion of Private company into Public Company vide Special Resolution
27.06.2018 Passed a resolution for appointment of Devang Dineshbhai Pandya as Chief Financial Officer and further authorize the Board of Directors to raise the funds by making Initial Public Offer Regularization of Kinjal Khunt, Yagnik Mundadiya, Rushabh Vora and Vivek Dadhania as an Independent Director

As per Schedule IV of the Companies Act, 2013, a separate meeting of Independent Directors without the attendance of Non-Independent Directors was held on November 14, 2018 to discuss the agenda items as required under the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015. The independent directors reviewed the performance of non-independent directors and the Board as whole, reviewed the performance of the chairperson of the company taking into account the views of executive and non executive directors and assessed the quality, quantity and timeliness flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties. The Independent Directors expressed their satisfaction with overall functioning and implementations of their suggestions.

The Annual General Meeting of the Company was held on Wednesday 06th June, 2018 at the Registered Office of the Company.

Director Remuneration

During the year under review, the company has paid remuneration to director of the company as Follow:

Sr. NO. Name of Director Remuneration (Amount Rs.)
1. Dineshbhai Bhanushankar Pandya 12,00,000/- per annum
2. Jayshree Dineshbhai Pandya 3,00,000/-per annum
3. Deviben Dineshbhai Pandya 3,00,000/-per annum
4. Devang Dineshbhai Pandya 3,00,000/-per annum
5. Jigar Dineshkumar Pandya 3,00,000/-per annum

Directors Responsibility Statement:

As required under the provisions of Section 134(3) (c) of the Act, your Directors report that:

(a) In the preparation of the annual accounts for the financial year ended 31st March, 2019 the applicable accounting standards have been followed.

(b) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profits of the Company for that period.

(c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(d) The Directors have prepared the annual accounts for the year ended 31st March, 2019 on a going concern basis.

(e) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively.

(f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

Related Party Transactions

All related party transactions that were entered into during the financial year ended March 31, 2019 were on arms length basis and were in the ordinary course of business. Therefore, the provision of Section 188 of the Companies Act, 2013 were not attracted. Further, there are no materially significant related party transactions during the year under review made by the Company with Promoters, Directors, or other designated persons which may have a potential conflict with the interest of the Company at large. Thus, disclosure in Form AOC-2 is given in Annexure-I.

Auditors and Auditors Report:

Statutory Auditors:-

M/s. SADP & Co., Chartered Accountants (Firm Registration No. 112625W), have been appointed as the Statutory Auditors of the Company to fill the casual vacancy caused by the resignation of M/s. C. S. Gajera & Co., Chartered Accountants and that they shall hold the office from the conclusion of this Annual General Meeting until the conclusion of fifth Annual General Meeting of the Company to be held after this Annual General Meeting at such remuneration as may be agreed upon between the Auditor and the Directors of the Company.

There are no qualifications, reservations or adverse remarks made in the Statutory Auditors of the Company.

Secretarial Auditors and their Report-

Pursuant to provisions of Section 204 (1) of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the company has appointed M/s K Jatin & Co., a firm of Company Secretary in Practice to undertake the Secretarial Audit of the Company for the financial year 2018-19. The Secretarial Audit Report in the form MR-3 is annexed herewith as "Annexure -II"

The Auditors Report for the financial year ended March 31, 2019 on the financial statements of the Company is a part of this Annual Report.

Explanations or Comments by the Board on Qualifications, Reservations or Adverse Remark or Disclaimers:-

The Notes on Financial Statements referred to in the Auditors Report are Self-explanatory and do not call for any further comments. There is no qualification, reservation or adverse remarks made in the statutory auditors report.

Risk Management Policy

The Company has a structured risk management policy. The Risk management process is designed to safeguard the organization from various risks through adequate and timely actions. It is designed to anticipate, evaluate and mitigate risks in order to minimize its impact on the business. The potential risks are inventoried and integrated with the management process such that they receive the necessary consideration during decision making. It is dealt with in greater details in the management discussion and analysis section. The Risk Management Policy is also available on the Companys website.

Corporate Social Responsibility:

The Company is not covered under the criteria of the provision of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, and therefore it is not mandatory for the Company to have the Corporate Social Responsibility.

Environment, Health and Safety:

The Company continued its commitment to industrial safety and environment protection. Periodical audits are done by external and internal agencies to assess the continued levels of EHS efficiency of plant.

Annual Performance Evaluation:

In compliance with the provisions of the Act and Regulation of SEBI (Listing obligations and Disclosure Requirements) Regulations 2015, the performance evaluation was carried out as under:

Board:

In accordance with the criteria suggested by The Nomination and Remuneration Committee, the Board of Directors evaluated the performance of the Board, having regard to various criteria such as Board composition, Board processes, Board dynamics etc. The Independent Directors, at their separate meetings, also evaluated the performance of the Board as a whole based on various criteria. The Board and the Independent Directors were of the unanimous view that performance of the Board of Directors as a whole was satisfactory.

Committees of the Board:

The performance of the Audit Committee, the Nomination and Remuneration Committee and the Stakeholders Relationship Committee was evaluated by the Board having regard to various criteria such as committee composition, committee processes, committee dynamics etc. The Board was of the unanimous view that all the committees were performing their functions satisfactorily and according to the mandate prescribed by the Board under the regulatory requirements including the provisions of the Act, the Rules framed there under and the Listing Agreement.

Directors:

(a) Independent Directors: In accordance with the criteria suggested by The Nomination and Remuneration Committee, the performance of each independent director was evaluated by the entire Board of Directors (excluding the director being evaluated) on various parameters like engagement, leadership, analysis, decision making, communication, governance and interest of stakeholders. The Board was of the unanimous view that each independent director was a reputed professional and brought his/her rich experience to the deliberations of the Board. The Board also appreciated the contribution made by all the independent directors in guiding the management in achieving higher growth and concluded that continuance of each independent director on the Board will be in the interest of the Company.

(b) Non-Independent Directors: The performance of the non-independent director (including the chair person) was evaluated by the Independent Directors at their separate meeting. Further, their performance was also evaluated by the Board of Directors. The various criteria considered for the purpose of evaluation included leadership, engagement, transparency, analysis, decision making, functional knowledge, governance and interest of stakeholders. The Independent Directors and the Board were of the unanimous view that each of the non-independent directors was providing good business and people leadership.

Extract of Annual Return

The details forming part of the extract of annual return on prescribed form MGT -9 is annexed hereto as "Annexure III" and form part of this report.

Particulars of employees

Pursuant to Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company states that none of the employees of the Company who was in receipt of remuneration in excess of Rs. 60 Lakh, if employed throughout the year or Rs. 5 Lakh per month, if employed for part of the financial year or received remuneration in excess of that drawn by the MD/WTD/Manager & holding 2% or more of equity share capital of the Company (himself along with spouse & dependent children). Hence, the disclosures as required by above Rules are not given as none of the employees qualify for such disclosure.

Human Resources and Policy on Prevention of Sexual Harassment At Workplace:

As per the requirement under the provisions made under section 4 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, an appropriate Committee has been formed to attend to the complaints of the sexual harassment at workplace, if any, made by female employees. The Company is having a Policy on the Prevention of Sexual Harassment. During the year under review, no complaints were received.

Secretarial Standards of ICSI

The Company is in compliance with the Secretarial Standard on Meetings of the Board of Directors (SS-1) and General Meeting (SS-2) issued by the Institute of Company Secretaries of India and approved by the Central Government.

Other Regulatory Requirement

The Company has been complied with all regulatory requirements of central government and state government and there were no significant and material orders passed by the Regulators or Courts or Tribunals during the year impacting the going concern status and the Companys operations in future.

Cost Audit Report

As per provision of section 148(3) of Companies Act, 2013 and rule 6(2) of Companies (Cost records and audit) Rules, 2014, the company is not required to appoint a cost auditor to audit the cost records of the company for cost audit report.

Fraud Reported by Auditors

There were no frauds reported by the Statutory Auditors under the provisions of Section 143 (12) of the Companies Act, 2013 and rules made there under.

Corporate Governance And Management Discussion And Analysis Report:

Corporate Governance:-

Pursuant to Regulations 15 of SEBI (LODR) Regulations, 2015, Corporate Governance provisions as specified is not applicable to the Company, since the paid up share capital of the Company and the Net worth is below the threshold limits prescribed under SEBI (LODR).

Management Discussion and Analysis Report:-

In terms of the Regulations 34(e) of SEBI (LODR) Regulations, 2015, Management Discussion and Analysis is set out in the Annual Report as "Annexure -IV"

Internal Financial Controls:

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including the adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosure.

The Company has a well-established internal control system. The Company strives to maintain a dynamic system of internal controls over financial reporting to ensure reliable financial record- keeping, transparent financial reporting and disclosure and protection of physical and intellectual property.

Insurance

The Company has taken all the necessary steps to insure its properties and insurable interest, as deemed appropriate and as required under the various legislative enactments. There were no major incidents or accidents to warrant insurance claims during the year under review.

Green Initiative

Your Directors would like to draw your attention to Section 20 of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, as may be amended from time, which permits paperless compliances and also service of notice / documents (including annual report) through electronic mode to its members. To support this green initiative of the Central Government in full measure, we hereby once again appeal to all those members who have not registered their e-mail addresses so far are requested to register their e-mail address in respect of electronic holdings with their concerned depository participants and / or with the Company.

Vigil Mechanism:

The Company has set up a whistleblower policy which can be viewed on the Companys website www.addshop.co In terms of the said policy the Directors and employees are given direct access to the Managing Director as well as Chairman of the Audit Committee to report on alleged wrongdoings. The said policy has been made available at the Registered Office of the Company at conspicuous places to enable the employees to report concerns, if any, directly to the Managing Director as well as Chairman of the Audit Committee. Employees who join the Company newly are apprised of the availability of the said policy as a part of their induction schedule. The above is in compliance of Section 177 (9) & (10) of the Companies Act, 2013 and in terms of Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Declaration By Independent Directors:

The following Directors are independent in terms of Section 149(6) of the Companies Act, 2013 and Regulation of SEBI (Listing obligations and Disclosure Requirements) Regulations 2015:

• Mr. Rajeshkumar Parekh

• Mr. Vivek Dadhania

• Mr. Rushabh Vora

• Mr. Yagnik Mundadiya

• Ms. Kinjal Khunt

The Company has received requisite declarations/ confirmations from all the above Directors confirming their independence.

Material Changes And Commitments:

There are no material changes and commitments, if any, affecting the financial position of the Company subsequent to the date of the Balance sheet and up to the date of the report.

Formal Annual Evaluation:

As required under Section 134 (p) of the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors had already approved the evaluation criteria for evaluating the performance of the Board of Directors, its committees and the performance of Independent Directors.

Accordingly, as required under Schedule IV of the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Independent Directors at their separate meeting held on 12 February, 2019 evaluated the performance of the non independent Directors and the Board as a whole. They also reviewed the performance of the Managing Director of the Company and also assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that was necessary for the Board to effectively and reasonably perform their duties.

Also as required under Regulation 17 (10) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board assessed the performance of the Independent Directors as per the criteria laid down and has recommended their continuation on the Board of the Company at its meeting.

The Board of Directors assessed the performance of the individual directors on the Board based on parameters such as, relevant experience and skills, ability and willingness to speak up, focus on shareholder value creation, high governance standards, knowledge of business, processes and procedures followed, openness of discussion / integrity, relationship with management, impact on key management decisions etc. The Members of the Committee of audit, nomination & remuneration, stakeholders relationship and corporate social responsibility committee were also assessed on the above parameters and also in the context of the committees effectiveness vis-a-vis the Act and the listing regulations.

Policy on Directors Appointment and Remuneration:

The Managerial remuneration has been paid / provided in accordance with the remuneration policy and requisite approvals mandated by section 197 read with schedule V to the Companies act, 2013.

Appreciation:

Your Directors acknowledge the valuable contribution and appreciate the co-operation received from the bankers, customers and financial institutions for their continued assistance and support extended to the Company.

Your Directors also express their appreciation to all the employees of the Company for their sustained contribution throughout the period. Yours Directors wish to thank the shareholders for their continued support, encouragement and the confidence reposed in the Management.

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