Letter of Offer
Dated: July 27, 2022
For Eligible Equity Shareholders Only
ADD-SHOPE-RETAIL LIMITED
Add -ShopE-Retail Limited was originally incorporated on August 20, 2013 as "Add-Shop Promotions Private Limited" having its registered office at Shree Ashapura Complex, Shop No. 202, 2nd Floor, Opp. Ahya Commercial Centre, Gondal Road, Rajkot-36002, Gujarat, India, under the provisions of the Companies Act, 1956 bearing Certificate of Incorporation No. U51109GJ2013PTC076482 issued by the Registrar of Companies, Gujarat, Dadra and Nagar Havelli. 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 and a fresh certificate of incorporation was issued bearing U51109GJ2013PLC076482. The name of the Company was further changed to Add-ShopE-Retail Limited and a fresh certificate of Incorporation bearing CIN No. L51109GJ2013PLC076482 was issued by Registrar of Companies Ahmedabad, Gujarat
Registered & Corporate office: B-304 Imperial Height 150ft Ring Road Rajkot-360005, Gujarat, India Contact Person: Mr. Nirajkumar Malaviya, Company Secretary & Compliance Officer; Tel No: 0281-2580499E-Mail ID: investor@addshop.co; Website: www.addshop.co; CIN: L51109GJ2013PLC076482
OUR PROMOTERS:
- MR. DINESHBHAI BHANUSHANKAR PANDYA (II) MRS. JAYSHREE DINESHBHAI PANDYA
-
MR. JIGAR DINESHKUMAR PANDYA (IV) MR. DEV DINESHBHAI PANDYA (V) MS. DEVIBEN DINESHBHAI PANDYA NEITHER OUR COMPANY OR ANY OF OUR PROMOTERS OR DIRECTORS ARE WILLFUL DEFAULTERS.
FOR PRIVATE CIRCULATION TO THE ELIGIBLE EQUITY SHAREHOLDERS OF OUR COMPANY
THE ISSUE
ISSUE OF UPTO 90,56,255 EQUITY SHARES OF FACE VALUE OF ₹10.00/- (RUPEES TEN ONLY) ("RIGHTS EQUITY SHARES") EACH AT A PRICE OF ₹54/- PER EQUITY SHARE INCLUDING A SHARE PREMIUM OF ₹44/- PER EQUITY SHARE ("ISSUE PRICE") FOR AN AMOUNT AGGREGATING UP TO RS. 48,90,37,770/- ON A RIGHTS BASIS TO THE ELIGIBLE EQUITY SHAREHOLDERS OF OUR COMPANY IN THE RATIO OF 1 (ONE) RIGHTS EQUITY SHARE FOR EVERY 1(ONE) FULLY PAID-UP EQUITY SHARES HELD BY THE ELIGIBLE EQUITY SHAREHOLDERS (PUBLIC) AS ON THE RECORD DATE, AUGUST 08, 2022 ("THE ISSUE"). FOR FURTHER DETAILS, KINDLY REFER TO THE CHAPTER TITLED "TERMS OF THE ISSUE" BEGINNING ON PAGE 124 OF THIS LETTER OF OFFER.
WILFUL DEFAULTER OR A FRAUDULENT BORROWER
Neither our Company nor our Promoters or any of our Directors have been or are identified as Willful Defaulter and/or Fraudulent Borrower by any bank or financial institution (as defined under the Companies Act, 2013) or consortium thereof, in accordance with the guidelines on Wilful Defaulter(s) or Fraudulent Borrower(s) issued by the Reserve Bank of India.
GENERAL RISKS
Investment in equity and equity related securities involve a degree of risk and investors should not invest any funds in this offer unless they can afford to take the risk with such investment. Investors are advised to read the Risk Factors carefully before taking an investment decision in this offering. For taking an investment decision, investors shall rely on their own examination of the issuer and the offer including the risks involved. The Right Equity Shares being offered in this issue have not been recommended or approved by the Securities and Exchange Board of India ("SEBI") nor does SEBI guarantee the accuracy or adequacy of this document. Specific attention of investors is invited to the statement of "Risk factors" beginning on page no. 20 of this Letter of Offer.
ISSUER'S ABSOLUTE RESPONSIBILITY
The issuer, having made all reasonable inquiries, accepts responsibility for and confirms that this Letter of Offer contains all information with regard to the issuer and the issue, which is material in the context of the issue, and that the information contained in the Letter of Offer is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which make this document as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect.
LISTING
The existing Equity Shares of our Company are listed on BSE Limited ("BSE"). Our Company has received "in-principle" approval from BSE for listing of the Rights Equity Shares to be allotted in this Issue pursuant to letter dated July 01,2022. For the purpose of this issue, BSE shall be the Designated Stock Exchange.
LEAD MANAGER TO THE ISSUE | REGISTRAR TO THE ISSUE | ||||||
FINSHORE MANAGEMENT SERVICES LTD | CAMEO CORPORATE SERVICES LTD | ||||||
Anandlok", Block-A, 2nd Floor, Room No. 207, 227 A.J.C Bose Road, | "Subramanian Building", No. 1, Club House Road, Chennai - 600 002, India | ||||||
Kolkata-700020, West Bengal | Tel No: +91-44-40020700 | ||||||
Telephone: 033 - 22895101 | Fax: +91-44-28460129 | ||||||
Email: ramakrishna@finshoregroup.com | Email: priya@cameoindia.com | ||||||
Website: www.finshoregroup.com | Investor Grievance Email Id: investor@cameoindia.com | ||||||
Investor Grievance: info@finshoregroup.com | Contact Person: Ms. K Sreepriya | ||||||
Contact Person: Mr. S. Ramakrishna Iyengar | Website: www.cameoindia.com | ||||||
SEBI Registration No: INM000012185 | SEBI Registration Number: INR000003753 | ||||||
CIN No: U74900WB2011PLC169377 | CIN No: U67120TN1998PLC041613 | ||||||
ISSUE PROGRAMME* | |||||||
ISSUE OPENS ON | LAST DATE FOR ON MARKET RENUNCIATION** | ISSUE CLOSES ON*** | |||||
AUGUST 17, 2022 | AUGUST 24, 2022 | AUGUST 30, 2022 |
*Pursuant to the January 22 - Rights Issue Circular, SEBI has introduced the concept of credit of Rights Entitlements into the demat accounts of the Eligible Equity Shareholders, which can be renounced by them by way of On Market Renunciation or Off Market renunciation. Further, the credit of Rights Entitlements and Allotment of Rights Equity Shares shall be made only in dematerialised form.
**Eligible Equity Shareholders are requested to ensure that renunciation through off-market transfer is completed in such a manner that the Rights Entitlements are credited to the demat accounts of the Renouncees on or prior to the Issue Closing Date.
***Our Board or a duly authorised committee thereof will have the right to extend the Issue Period as it may determine from time to time, provided that this Issue will not remain open in excess of 30 days from the Issue Opening Date. Further, no withdrawal of Application shall be permitted by any Applicant after the Issue Closing Date.
TABLE OF CONTENT | |||||||
PARTICULARS | PAGE No. | ||||||
SECTION I: GENERAL | |||||||
Definitions and Abbreviations | 1-10 | ||||||
Notice to Investors | 11-14 | ||||||
Certain Conventions, Use of Financial Industry & Market Data, And Currency Presentation | 15-16 | ||||||
Forward Looking Statements | 17 | ||||||
SECTION II: SUMMARY OF LETTER OF OFFER | |||||||
Summary of Letter of Offer | 18-19 | ||||||
SECTION III: RISK FACTORS | |||||||
Risk Factors | 20-31 | ||||||
SECTION IV: INTRODUCTION | |||||||
Issue Detail in Brief | 32 | ||||||
General Information | 33-36 | ||||||
Capital Structure | 36-37 | ||||||
SECTION V: PARTICULARS OF THE ISSUE | |||||||
Objects of The Issue | 38-41 | ||||||
Statement of Possible Tax Benefits | 42 | ||||||
SECTION VI: ABOUT THE INDUSTRY, COMPANY AND MANAGEMENT | |||||||
Industry Overview | 43-52 | ||||||
Our Business | 53-62 | ||||||
Our Management | 63-68 | ||||||
SECTION VII: FINANCIAL INFORMATION | |||||||
The Statutory Auditor's Report and the Un-Audited Financial Statements for the period ended June | |||||||
30,2021 and Un-Audited financial statements for the period ended June 30, 2022 as reported to Stock | 69-72 | ||||||
Exchange | |||||||
The Statutory Auditor's Report and the Audited Financial Statements for the year ended March 31,2021 | 73-108 | ||||||
and Audited financial statements for the year March 31, 2022 as reported to Stock Exchange | |||||||
Statement of Accounting Ratios | 109 | ||||||
Management's Discussion and Analysis of Financial Conditions and Result of Operations | 110-113 | ||||||
SECTION VIII: LEGAL AND OTHER INFORMATION | |||||||
Outstanding Litigation, Defaults and Material Development | 114-115 | ||||||
Government Approvals | 115-118 | ||||||
Other Regulatory and Statutory Disclosures | 119-123 | ||||||
SECTION IX: ISSUE INFORMATION | |||||||
Terms of The Issue | 124-157 | ||||||
Restriction of Foreign Ownership of Indian Securities | 158-159 | ||||||
SECTION X: STATUTORY AND OTHER INFORMATION | |||||||
Material Contracts and Documents for Inspection | 160 | ||||||
Declaration | 161 | ||||||
SECTION I: DEFINITIONS AND ABBREVIATIONS
This Letter of Offer uses certain definitions and abbreviations which, unless the context otherwise indicates or implies, shall have the respective meanings given below. References to statutes, regulations, rules, guidelines and policies will be deemed to include all amendments and modifications thereto as amended from time to time.
Unless the context otherwise indicates or implies, the following terms shall have the meanings provided below in this Letter of Offer, and references to any statute or regulations or policies will include any amendments or re- enactments thereto, from time to time.
General Terms
TERMS | DESCRIPTIONS | ||||||||
"Add-Shop | E-Retail | Unless the context otherwise indicates or implies, "Add-ShopE-Retail Limited", a | |||||||
Limited", | "Add-Shop", | public limited company incorporated under the provision of Companies Act, 1956 | |||||||
"ASRL" "The Company", | and having its Registered Office at B-304, Imperial Height, 150 ft Ring Road, | ||||||||
"Our | Company", | or | Rajkot, Gujarat-360005, India. | ||||||
"Issuer" | |||||||||
"We", "Our", or "us" | Unless the context otherwise indicates or implies, refers to our Company together | ||||||||
with our Subsidiaries and Associates | |||||||||
Our | Promoters | or | The promoters of our company being (I) Mr. Dineshbhai Bhanushankar Pandya | ||||||
Promoters | of | the | (II)Mrs. Jayshree Dineshbhai Pandya (III) Mr. Jigar Dineshkumar Pandya | ||||||
Company | (IV) Mr. Dev Dineshbhai Pandya (V) Ms. Deviben Dineshbhai Pandya | ||||||||
Includes such persons and entities constituting the promoter group of our Company | |||||||||
Promoter Group | in terms of Regulation 2(1) (pp) of the SEBI (ICDR) Regulations, 2018 and as | ||||||||
disclosed by our Company to the Stock Exchange from time to time | |||||||||
Conventional Terms | |||||||||
TERMS | DESCRIPTIONS | ||||||||
ACIT | Assistant Commissioner of Income Tax. | ||||||||
The alternative investment funds, as defined in, and registered with SEBI under the | |||||||||
AIF(s) | Securities and Exchange Board of India (Alternative Investment Funds) | ||||||||
Regulations, 2012. | |||||||||
Air Act, 1981 | Air (Prevention and Control of Pollution) Act, 1981. | ||||||||
Category | I | Foreign | FPIs who are registered as "Category I foreign portfolio investor" under the SEBI | ||||||
Portfolio Investor(s) | FPI Regulations. | ||||||||
Category | II | Foreign | FPIs who are registered as "Category II foreign portfolio investor" under the SEBI | ||||||
Portfolio Investor(s) | FPI Regulations. | ||||||||
Category | III | Foreign | FPIs who are registered as "Category III foreign portfolio investor" under the SEBI | ||||||
Portfolio Investor(s) | FPI Regulations. | ||||||||
Companies Act, 1956 (without reference to the provisions thereof that have ceased | |||||||||
Companies Act, 1956 | to have effect upon notification of the sections of the Companies Act, 2013) along | ||||||||
with the relevant rules made there under. | |||||||||
Companies | Companies Act, 2013, to the extent in force pursuant to the notification of sections | ||||||||
Act/Companies Act, 2013 | of the Companies Act, 2013, along with the relevant rules made there under. | ||||||||
Competition Act | The Competition Act, 2002. | ||||||||
Consolidation FDI Policy dated October 15, 2020, issued by the Department of | |||||||||
Consolidated FDI Policy | Industrial Policy and Promotion, Ministry of Commerce and Industry, Government | ||||||||
of India, and any modifications thereto or substitutions thereof, issued from time to | |||||||||
time. | |||||||||
CST Act | Central Sales Tax Act, 1956. | ||||||||
FCNR Account | Foreign currency non-resident account. | ||||||||
FEMA | Foreign Exchange Management Act, 1999, read with rules and regulations there | ||||||||
under. | |||||||||
FEMA Regulations | Foreign Exchange Management (Transfer or Issue of Security by a Person Resident | ||||||||
Outside India) Regulations 2000. | |||||||||
FII(s) | Foreign Institutional Investors as defined under the SEBI FPI Regulations. | ||||||||
Financial | Year/ | Fiscal/ | Period of twelve (12) months ended March 31 of that particular year, unless | ||||||
Fiscal Year/F.Y. | otherwise stated. |
Page 1 of 161
TERMS | DESCRIPTIONS | ||||||
Foreign Portfolio Investor | Foreign Portfolio Investors, as defined under the SEBI FPI Regulations and | ||||||
or FPI | registered with SEBI under applicable laws in India. | ||||||
Fugitive | economic | "Fugitive economic offender" shall mean an individual who is declared a fugitive | |||||
offender | economic offender under section 12 of the Fugitive Economic Offenders Act, 2018 | ||||||
(17 of 2018) | |||||||
FVCI | Foreign Venture Capital Investor, registered under the FVCI Regulations. | ||||||
FVCI Regulations | Securities and Exchange Board of India (Foreign Venture Capital Investors) | ||||||
Regulations, 2000. | |||||||
Hazardous | Waste | Rules, | Hazardous Wastes (Management, Handling and Trans boundary Movement) Rules, | ||||
2008 | 2008. | ||||||
Income Tax Act or the | The Income Tax Act, 1961. | ||||||
I.T. Act | |||||||
New Indian Accounting Standards notified by Ministry of Corporate Affairs on | |||||||
Ind AS | February 16, 2015, applicable from Financial Year commencing April 1, 2016, as | ||||||
amended. | |||||||
LLP Act | The Limited Liability Partnership Act, 2008. | ||||||
Notified Sections | The sections of the Companies Act, 2013, that have been notified by the | ||||||
Government as having come into effect prior to the date of this Letter of Offer. | |||||||
NRE Account | Non-resident external account. | ||||||
NRO Account | Non-resident ordinary account. | ||||||
RBI Act | Reserve Bank of India Act, 1934. | ||||||
SCRA | Securities Contracts (Regulation) Act, 1956. | ||||||
SCRR | Securities Contracts (Regulation) Rules, 1957. | ||||||
SEBI | The Securities and Exchange Board of India, constituted under the SEBI Act. | ||||||
SEBI Act | Securities and Exchange Board of India Act, 1992. | ||||||
SEBI Takeover | Securities and Exchange Board of India (Substantial Acquisition of Shares and | ||||||
Regulations | Takeovers) Regulations, 2011. | ||||||
SEBI VCF Regulations | The erstwhile Securities and Exchange Board of India (Venture Capital Funds) | ||||||
Regulations, 1996. | |||||||
Securities Act | U.S. Securities Act of 1933, as amended. | ||||||
State Government | The government of a state of the Union of India. | ||||||
STT | Securities Transaction Tax. | ||||||
Sub-account | Sub-accounts registered with SEBI under the SEBI FII Regulations other than sub- | ||||||
accounts which are foreign corporate or foreign individuals. | |||||||
VCFs | Venture Capital Funds as defined and registered with SEBI under the SEBI VCF | ||||||
Regulations. | |||||||
Water Act, 1974 | Water (Prevention and Control of Pollution) Act, 1974. | ||||||
Issue Related Terms | |||||||
TERMS | DESCRIPTIONS | ||||||
"Abridged | Letter | of | Abridged letter of offer to be sent to the Eligible Equity Shareholders with respect to | ||||
this Issue in accordance with the provisions of the SEBI ICDR Regulations and the | |||||||
Offer" or "ALOF" | Companies Act, 2013. | ||||||
"Allot", "Allotment" or | Allotment of Rights Equity Shares pursuant to this Issue. | ||||||
"Allotted" | |||||||
The accounts opened with the Bankers to this Issue, into which the Application Money | |||||||
lying credit to the Escrow Account and amounts blocked by Application Supported by | |||||||
"Allotment Accounts" | Blocked Amount in the ASBA Account, with respect to successful Applicants will be | ||||||
transferred on the Transfer Date in accordance with Section 40(3) of the Companies | |||||||
Act, 2013. | |||||||
"Allotment Date" | Date on which the Allotment shall be made pursuant to this Issue. | ||||||
"Allottee(s)" | Person(s) who shall be Allotted Rights Equity Shares pursuant to the Allotment. | ||||||
Application made through (i) submission of the Application Form or plain paper | |||||||
"Application" | Application to the Designated Branch of the SCSBs or online/ electronic application | ||||||
through the website of the SCSBs (if made available by such SCSBs) under the ASBA | |||||||
process to subscribe to the Rights Equity Shares at the Issue Price. | |||||||
Page 2 of 161 |
TERMS | DESCRIPTIONS | |||||
"Application Form" | The form used by an Investor to make an application for the Allotment of Rights Equity Shares | |||||
in the Issue. | ||||||
"Applicant(s)" | or | Eligible Equity Shareholder(s) and/or Renouncee(s) who are entitled to apply or make | ||||
"Investor(s)" | an application for the Rights Equity Shares pursuant to this Issue in terms of this Letter | |||||
of Offer. | ||||||
The number of Equity Shares applied for and as indicated in the Application Form | ||||||
Application Amount | multiplied by the price per Equity Share payable by the Applicants on submission of | |||||
the Application Form. | ||||||
Acknowledgement Slip | The slip or document issued by the Designated Intermediary to an Applicant as proof | |||||
of having accepted the Application Form. | ||||||
Allot/Allotment/Allott | Unless the context otherwise requires, allotment of the Equity Shares pursuant to the | |||||
ed of Equity Shares | Issue of Equity Shares to the successful Applicants. | |||||
Note or advice or intimation of Allotment sent to the Applicants who have been allotted | ||||||
Allotment Advice | Equity Shares after the Basis of Allotment has been approved by the Designated Stock | |||||
Exchange. | ||||||
The form in terms of which an Applicant shall make an Application and which shall be | ||||||
Application Form | considered as the application for the Allotment pursuant to the terms of this Letter of | |||||
Offer. | ||||||
Application Supported | An application, whether physical or electronic, used by ASBA Bidders, to make a Bid | |||||
by | Blocked | |||||
Amount/ASBA | authorizing a SCSB to block the Bid Amount in the ASBA Account. | |||||
ASBA Account | A bank account maintained with an SCSB and specified in the ASBA Form submitted | |||||
by Applicants for blocking the Bid Amount mentioned in the ASBA Form | ||||||
ASBA Applicant(s) | Any prospective investors in this Issue who apply for Equity Shares of our Company | |||||
through the ASBA process in terms of this Letter of Offer. | ||||||
ASBA Forms | An application form, whether physical or electronic, used by ASBA Applicants, which | |||||
will be considered as the application for Allotment in terms of the Letter of Offer. | ||||||
ASBA | Application | Such Branches of the SCSBs which shall collect the Application Forms used by the | ||||
Location(s)/Specified | Applicants applying through the ASBA process and a list of which is available on | |||||
Cities | www.sebi.gov.in/pmd/scsb.pdf | |||||
Bank which are clearing members and registered with SEBI as banker to an issue and | ||||||
Banker to the Issue | with whom the Rights Issue Account will be opened, in this case being "ICICI Bank | |||||
Limited" | ||||||
Banker | to | the | Issue | Agreement dated July 05, 2022 entered into amongst the Company, Lead Manager, the | ||
Agreement | Registrar and the Banker of the Issue. | |||||
The basis on which the Equity Shares will be Allotted to successful Applicants in | ||||||
Basis of Allotment | consultation with the Designated Stock Exchange under the Issue, as described in the | |||||
Section "Terms of the Issue" beginning on page no. 124 of this Letter of Offer. | ||||||
Business Day | Monday to Saturday (except 2nd & 4th Saturday of a month and public holidays). | |||||
BSE | BSE Limited | |||||
CAN or | Confirmation | The note or advice or intimation sent to each successful Applicant indicating the Equity | ||||
of Allocation Note | Shares which will be Allotted, after approval of Basis of Allotment by the Designated | |||||
Stock Exchange. | ||||||
Client ID | Client Identification Number maintained with one of the Depositories in relation to | |||||
demat account. | ||||||
Collection Centers | Centers at which the Designated Intermediaries shall accept the ASBA Forms. | |||||
A depository participant as defined under the Depositories Act, 1996, registered with | ||||||
Collecting | Depository | SEBI and who is eligible to procure Applications at the Designated CDP Locations in | ||||
Participant or CDP | terms of circular no. CIR/CFD/POLICYCELL/11/2015 dated November 10, 2015, | |||||
issued by SEBI. | ||||||
Such branches of the SCSBs which coordinate Applications under this Issue made by | ||||||
Controlling | Branches | the Applicants with the Lead Manager, the Registrar to the Issue and the Stock | ||||
of SCSBs | Exchanges, a list of which is provided on http://www.sebi.gov.inor at such other | |||||
website as may be prescribed by SEBI from time to time. | ||||||
Demographic Details | The demographic details of the Applicants such as their Address, PAN, Occupation and | |||||
Bank Account details. | ||||||
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Add-Shop E-Retail Ltd. published this content on 01 August 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 August 2022 10:57:04 UTC.