Rockon Enterprises Ltd Merged Management Discussions

Your Directors are pleased to present the Management Discussion and Analysis Report for the year ended 31st March, 2019.

The Management Discussion and Analysis have been included in consonance with the Code of Corporate Governance as approved by The Securities and Exchange Board of India (SEBI). Investors are cautioned that these discussions contain certain forward looking statements that involve risk and uncertainties including those risks which are inherent in the Companys growth and strategy. The company undertakes no obligation to publicly update or revise any of the opinions or forward looking statements expressed in this report consequent to new information or developments, events or otherwise.

The management of the company is presenting herein the overview, opportunities and threats, initiatives by the Company and overall strategy of the company and its outlook for the future. This outlook is based on managements own assessment and it may vary due to future economic and other future developments in the country.

Global Economic Outlook

In 2018, the global economy began its journey on a firm footing with estimated global economic growth of 3.6% (Source: World Economic Outlook by International Monetary Fund (IMF)). During the second half of 2018, this rate of development gradually declined, owing to impending US-China trade dispute and some slowdown across developed markets. Emerging and developing markets of Asia maintained their steady progress at 6.4% during 2018. However, its important to note that Indias economy expanded at 7.1% in 2018 vis-a-vis 6.7% in 2017.

India continues to be one of the fastest growing major economies in the world and is expected to be among the worlds top three economic powers in the next 10-15 years. The Indian economy is expected to improve and close the year 2019 with a GDP growth of 7.3% (Source: IMF). Sustained real GDP growth of over 6% since FY 91 has led to a fundamental transformation of Indias economy. Today, India is the worlds seventh largest economy in real terms, backed by strong demand, positive consumption pattern and rising disposable income. In PPP terms, the economy is expected to be among the top five global economies by 2020.

Industry Structure & Development

Textile:

Global Textiles

The global textile industry is continuously evolving, over the years; it has witnessed multiple shifts in consumption and production patterns. The Textile trade is predicted to grow at 3.7% during the period 2018-2028.

Even though apparel textile industry is dominated by developed markets of EU and the US, emerging markets. Similarly, India and China have strong textile manufacturing base.

Indian Textiles:

Indias Textiles industry is among the oldest industries in the country dating back several countries. It is one of the largest contributors to the economy accounting for 4% o GDP. It is the second largest contributor towards employment generation. India is the second largest producer and exporter of textiles after China and fourth largest producer and exporter after China, Bangladesh and Vietnam. The Mitigation of the repercussions of currency fluctuation remains a challenge for the Industry.

Capital Market:

Capital markets recognize and drive capital to the best ideas and enterprises. Capitalism is a catalyst for innovation, opportunity and dynamism. Coupled with the free flow of capital, innovation is an integral component for supporting job creation, economic development and prosperity. Markets facilitate the transfer of funds from those who seek a return on their assets to those who need capital and credit to grow.

Clients benefiting from healthy capital markets include not just investors but also corporations and governments. Capital, raised through equity and debt, can be used to grow businesses, finance investments in new plant, equipment and technology and fund infrastructure projects. This creates jobs and flow money into the economy. Additionally, businesses and individuals can invest in securities to generate wealth.

Overview:

The Company operates in two reportable segments i.e. Commodity and Finance activities. The business Segments has been identified as separate segment in accordance with Accounting standard 17 Segment Reporting. The financial statements have been prepared in compliance with the requirements of the Companies Act, 2013, guidelines issued by the Securities and Exchange Board of India (SEBI) and Generally Accepted Accounting Principles (GAAP) in India.

Subsidiary Company:

As there is no subsidiary of the Company, Investment made in Subsidiaries is NIL.

Risk & Concerns:

In todays complex business environment, almost every business decision requires executives and managers to balance risk and reward. Effective risk management is therefore critical to an organizations success. Globalization with increasing integration of markets, newer and more complex products and transactions and an increasingly stringent regulatory framework has exposed organizations to and integrated approach to risk management. Timely and effective risk management is of prime importance to our continued success. The sustainability of the business is derived from the following:

- Identification of the diverse risks faced by the company.

- The evolution of appropriate systems and processes to measure and monitor them.

- Risk Management through appropriate mitigation strategies within the policy framework.

- Monitoring the progress of the implementation of such strategies and subjecting them to periodical audit and review.

- Reporting these risk mitigation results to the appropriate managerial levels.

There is the risk of loss from inadequate or failed systems, processes or procedures. These may be attributed to human failure or technical problems given the increase use of technology and staff turnover. Your company has in place suitable mechanisms to effectively reduce such risks. All these risks are continuously analyzed and reviewed at various levels of management through an effective information system.

Risk Management:

Risk Management is an important business aspect in the current economic environment and its objective is to identify, monitor and take mitigation measures on a timely basis in respect of the events that may pose risks for the business.

The Company has a robust Risk Management Policy and Procedure in place for effective identification and monitoring of risks and implementation of mitigation plans. The Risk Management Committee reviews and monitors the identified risks and mitigation plans at regular interval.

Opportunities and Threats:

Some of the key trends of the industry that are favourable to the company to exploit these emerging opportunities are:

Clients are more comfortable with uniform high quality and quick service and process across the enterprise.

There are good prospects for expanding further activities in this direction.

Some of the key changes in the industry unfavourable to the company are:

• Heightened competition

• Increasing Compliances

• Attraction and retention of human capital.

• Regulatory changes

Internal Control Systems and their Adequacy:

Internal control systems are embedded in the processes across all functions in the Company. These systems are being regularly reviewed and wherever necessary are modified or redesigned to ensure better efficiency and effectiveness. The systems are subjected to supervision by the Board of Directors and the Audit Committee, duly supported by Corporate Governance.

Company complies with all Applicable statutes, policies, procedures, listing requirements and management guidelines. It adheres to applicable accounting standards and polices.

Human Resources:

The Management believes in maintaining cordial relations with its employees. The management recognizes the importance of Human Resources and effective steps will be taken to strengthen the same depending on the requirements.

The Company provided excellent working environment so that the individual staff can reach his/her full potential.

The Company is poised to take on the challenges and march towards accomplishing its mission with success.

The Company maintained good Industrial/Business relation in market which enhanced the credit worthiness of the Company.

Affirmation and disclosure:

All the members of the Board and the Management Committee have affirmed their compliance with the Code of Conduct as on 31st March, 2019 and a declaration to that effect, signed by the Managing Director, is attached and forms part of this Report. The members of the Management Committee have made disclosure to the Board of Directors relating to transactions with potential conflict of interest with the Company. There were no material, financial or commercial transaction, between the Company and members of the Management Committee that may have a potential conflict with the interest of the Company at large.

All details relating to financial and commercial transactions where Directors may have a pecuniary interest are provided to the Board and the interested Directors neither participate in the discussion nor vote on such matters. The Company has complied with the requirements specified in Regulations 17 to 27 and clauses (b) to (i) of the Regulation 46(2) of the Listing Regulations.

Disclosure on website:

Following information has been disseminated on the website of the Company at www.rockonfintech.com

1. Details of business of the Company

2. Terms and conditions of appointment of Independent Directors

3. Composition of various Committees of Board of Directors

4. Code of Conduct for Board of Directors and Senior Management Personnel

5. Details of establishment of vigil mechanism/ Whistle Blower policy

6. Criteria of making payments to Non-Executive Directors

7. Policy on dealing with Related Party Transactions

8. Policy for determining ‘material subsidiaries

9. Details of familiarization programmes imparted to Independent Directors

10. Policy for determination of materiality of events

Disclosure of pending cases / Instances of Non-Compliance:

There were no non-compliances by the Company and no instances of penalties and strictures imposed on the Company by the Stock Exchanges or SEBI or any other statutory authority on any matter related to the capital market during the last three years. The Company has been impleaded in certain legal cases related to disputes over title to shares arising in the ordinary course of share transfer operations. However, none of these cases are material in nature, which may lead to material loss or expenditure to the Company.

Secretarial Audit Report:

The Company has undertaken Secretarial Audit for the financial year 2018-19 which, inter alia, includes audit of compliance with the Companies Act, 2013, and the Rules made under the Act, Listing Regulations and applicable Regulations prescribed by the Securities and Exchange Board of India and Foreign Exchange Management Act, 1999 and Secretarial Standards issued by the Institute of the Company Secretaries of India. The Secretarial Audit Report forms part of this Annual Report.

Cautionary Statement:

Statement in the Management Discussion and Analysis describing the Companys objectives exceptions or predications may be forwards looking within the meaning of applicable securities, laws and regulations. Actual results may differ materially from those expressed in the statement. Several factors could make significant difference to the companys operation. These include climatic conditions and economic conditions affecting demand and supply, government regulations and taxation, natural calamities etc. over which the company does not have any control.