Cerebra Integrated Technologies Ltd Management Discussions.

Annexure VII

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

E-WASTE RECYCLING BUSINESS:

As informed last year this is going to be the mainstay of our Lines of Business and has truly evolved as the most important business line. We have got the PRO (Producer Responsibility Organisation) license from Central Pollution Control Board (CPCB) and acquired Samsung India Electronics Limited (SIEL) as its first EPR (Extended Producer Responsibility) client.

The plant is fully functional and is recycling e-waste. Cerebra has collected WEEE (Waste Electrical & Electronic Equipments) for large and medium manufacturers of IT Products, White Goods manufacturers such as TV, Fridge, &Washing Machines and other electrical and electronic products.

Cerebra is focussing to increase channel partners, one for collection of Waste Electrical & Electronic Equipments (WEEE) and two for sales of refurbished products. For the latter Cerebra has been increasing its Customer Experience Centres (CEC) [Stores] wherein a customer can walk-in and pickup refurbished products such as Desktops, Laptops, NetworkAccessories, Peripherals and Printers at competitive prices.

Cerebra also has developed a unique software to track its collections, sales and channel management wherein all Waste Electrical & Electronic Equipments (WEEE) collected from either Individual, Retailers or Corporate will be tracked until it reaches the Recycling Facility located at KIADB Narasapura Industrial Area, Kolar District. Plans are to launch an online platform for purchase of the above products once Customer Experience Centres (CEC) [Stores] are spread across length & breadth of the country. The software also tracks Cerebras EPR collections.

8 out of 10 Indians know about e-waste but 50% hoard unusable devices for upto 5 years, states Cerebra Greens E-Waste survey

Citizens between 18 - 49 acknowledge requirement for special disposal measures, but lack awareness of appropriate disposal facilities

26thSeptember 2018:80% of Indians are cognizant of the meaning of e-waste and the necessity to use special measures to dispose of it, according to a joint survey conducted by Cerebra Green, the leaders in e-waste management today and MAIT. However, the same citizens tend to dispose e- waste through incorrect means due to a lack of alternative avenues, the survey also revealed.

68% of those surveyed stated that they do not view local waste collectors as an option to dispose e-waste, a belief that is reflected by the waste collectors themselves as 72% of participants stated that local waste collectors do not pick up e-waste in their area. This has forced 90% of citizens to dispose e-waste by means of online exchanges or local electronics vendors. Furthermore, 50% stated that they own 2 or more devices that they no longer use, which they continue to hoard for up to 5 years, thereby heightening the possibility of incorrect disposal.

On a more encouraging note, however, 83% of those surveyed stated that they would be extremely willing to properly dispose of their e-waste if assured of the environmentally-safe nature of the disposal process.

Key Highlights from the survey:

• Around 80% of the participants were aware about e-waste.

• 50% of participants were keeping at least 2 or more old, unused devices at home that need to be discarded followed by around 30% keeping 3 to 4 and 20% keeping more than 5 unused devices.

• Surprisingly, 50% of participants were keeping old, unused devises that were more than 5 years old, 28% keeping 3 to 4 years old and around 23% using 2 years or less old devises.

• 72% of participants informed that the waste collectors in their area did not collect e-waste from them.

• 68% of the participants informed that they had never disposed their e-waste by giving it to the local waste collector/aggregator whereas 32% of them informed that they did.

• Around 82% of participants had never disposed their white goods like refrigerator, air conditioner, microwave etc. through a local waste collector with a meagre of just 18% gave a positive affirmation.

• 47% participants were utilizing their e-waste in online exchange, at the time of a new purchase, 43% by giving it to the local electronic vendors and 10% at the brand outlets

• 40% participants had been keeping more than 5-year-old refrigerator, 37% of them still occupying a 2 to 5 years old.

• 82% showed enthusiasm in giving away their e-waste to e-waste collectors for free if they insured proper handling of the waste not causing environmental pollution.

• 81% of the participants knew about the hazardous fractions in e-waste that needs special treatment for safe disposal. However, 19% were not aware about this fact.

As part of its efforts to address the issues raised by the surveys results, Cerebra has partnered with Manufacturers Association of Information and Technology (MAIT), Ministry of Electronics and Information Technology (MeitY), Ministry of Environment Forests and Climate Change (MOEFCC) and Digital Indiato launch the India Cleanup Week, the first and potentially largest cleanup drive in India targeted at the proper and efficient disposal of e-waste. As part of the initiative,

e-waste collection will take place in three major forms: collection officers for individual home-pickup, public collection centers and pickup trucks for commercial establishments. MAITwill offer certificate of recognition to corporates which are participating by joining Cerebra during the week.

Analyzing the results, MrVRanganathan, Managing Director and Founder, Cerebra Integrated Technologies said, "E-waste awareness in the country is paramount and the results of the survey indicate that citizens are already moving towards this awareness quickly. We will continue to build in-depth knowledge among Indians and other stakeholders around e-waste management and look forward to our associate with MAIT in making this endeavor a success."

The survey analyzed responses sourced from 600 individuals across key metros including Delhi, Mumbai, Bengaluru, Chennai, Kolkata, Hyderabad and Pune to gauge their awareness around e-waste & its management. The survey also studied their disposal habits and reasons behind it.

E-waste production in the country is predicted to touch a whopping 3 million tons by the end of 2018. While industries contribute to 70% of e-waste, Indian households contribute to almost 15% and the rest comes from discarded or end of life electrical and electronic equipment (EEE). India is one of the fastest growing consumers of discarded orend of life electrical and electronic equipment (EEE).

cerebra acquired its nod from central Pollution control Board (CPCB) as a Producer Responsibility Organisation (PRU). With this cerebra can approach clients to fulfil their Extended Producer Responsibility (EPR) commitments by creating awareness, collecting and recycling Waste Electrical & Electronic Equipments (WEEE) as their PRU. Please find below a copy of the same;

Outcome of some press releases during Cleanup Week

Cerebra has successfully completed its EPR commitment of 15,00,000 KGs by collection of Waste Electrical & Electronic Equipments (WEEE) i.e. TVs, Refrigerators and Air Conditioners for its first EPR client Samsung India Electronics Limited (SIEL) through its own network of employees, channel partners and aggregators.

Cerebra wishes to appreciate and take on record the strategies and efforts instilled by Cerebra E-Waste Team right from building the team, developing channel partners and concluding agreements with aggregators, downstream vendors to fulfil EPR commitment of 15,00,000 KGs of its first client Samsung India Electronics Limited (SIEL).

Recruitment:

Restructuring for the division has been taken up at all levels and new recruits inducted at both senior levels and managers;

Due to the increase in employee strength at all levels in the E-Waste Division, Cerebra has taken a third party solution to track each employee so as to bring in discipline and increase the output of all the personnel. This is going to be implemented in our own software too.

It has been an ongoing process post registration of Cerebra as a PRO (Producer Responsibility Organisation). Cerebra has appointed Regional Managers, Deputy and Assistant Managers and a fleet of Sales & Procurement Executives across its offices in Ghaziabad, Mumbai, Pune, Chennai, and Hyderabad for both collection and sales of refurbished products.

e Commerce Application

Our web part of the eCommerce application is up and running and we are using the same for collections on a day to day basis. Each Sales / Procurement Executive has to clock in the details of the collection made at the point of pickup; be it retailer/corporate/aggregator. He has to upload the photographs and has to comply with E-Waste Handling Rules 2018 norms. More is being built to the application and soon we shall be able to sell our refurbished laptops online.

Enterprise Solutions Division

Your Company has been since many years and continues implementing various IT based projects for many Startups, Government agencies, departments & institutions and established companies. The Company studies the customers IT requirements, identifies pain points and accordingly designs and plans their IT Hardware and Software infrastructure which includes security, networking, servers, storage, endpoints, operating systems, application software and ensures successful implementation for optimal performance.

Your Company works closely with leading MNC technology vendors such as Dell EMC, HPI, HPE, Fujitsu, Intel, Hitachi, Fortinet, Checkpoint, Extreme Networks, Lenovo, Acer, Canon, TVSE, Brother, Samsung, Xerox, Radware, VMware, RHEL, Microsoft etc to name a few. Cerebra can design, supply, implement and maintain IT infrastructure for SMEs as well as large enterprises successfully. Cerebra can successfully help customers with their IT requirements with its technical competencies and strategic tie-ups as well as sourcing abilities. Cerebra has also built a very strong team to successfully execute large sized multi location delivery, installation and deployment of IT infrastructure products as well as services.

Your Companys continued focus on research labs, airports, defence, PSUs, PSBs, etc has been fruitful and lead the Company successfully executing orders from PSU, ISRO, defence labs, various departments under Government of Karnataka, police, judiciary, NIMHANS, private education institutions to name a few.

In addition, Cerebra has been acquiring new customers in the SMB, retail, manufacturing and healthcare segments. Your Company also has been considered as a preferred vendor by many of these organizations. Cerebra has also strengthened its relationships with leading MNC OEM Brands and established itself as a key player especially in Govt, education, healthcare, defence, space and research lab segments while we stay focused on making a mark in other state and central government departments/bodies/PSUs and private enterprise companies.

Cerebra has recently completed execution of a few prestigious projects related to modernisation and augmentation of IT infrastructure in employment & training, beverages corporation, courts, revenue and forest departments across the state. In addition, the ongoing project of Automated Driving Test System to fully automate the process of testing and issuance of driving license by the Department of Transport and Road Safety, Government of Karnataka has been implemented across 6 RTOs. Cerebra will continue to operate and maintain the same for a period of 5 (Five) years at six RTOs in Karnataka and the same will be extended to other RTOs in a phased manner.

With an added focus on services business such asAMC, FMS, Implementation and other value added services, your Company has successfully added many prestigious customers where the Company is providing such services both in the government as well as corporate segments. This has enabled Cerebra to also identify new business opportunities and make a fairly sizeable contribution to Cerebras revenues.

CEREBRA MIDDLE EAST FZCO:

The Middle East region has been on an Economic downturn amidst a global slowdown since 2017. "Growth prospects for the Middle East and North Africa are deteriorating on the back of elevated geopolitical risks, weak global demand and severe oil production cuts."

Cerebra Middle East,in FY 18-19, has been focusing on market consolidation and profitability amidst the Economic instability in the region. CME closed the year with a revenue of USD 18.69 Million with a Net Profit Ratio of 11.6 %. The last year saw an increase in channel partners to about 165 partners though UAE, Kuwait, Saudi Arabia, Oman, Egypt, Central & Eastern Africa. This was inspite of losing Qatar as a market due to Trade restrictions, which had an overall impact on the revenue. CME also increased its vendor portfolio by on boarding market leaders like Ruiji Networks, Digifort, Infortrend and Quantum into its Surveillance Security product portfolio along with Retrospect in its ICT portfolio. The Security Solutions division launched 3 years ago is now rolling out best in class solutions in the Surveillance Security domain through the region. CMEs services initiative C:\Serve performed beyond expectations. CME now has a vast experience in providing top class contingent workforce management services and exceeding client expectations through highly effective processes for recruiting, screening, testing, and consultant management. Many of our clients regularly seek our advice when making changes to their internal IT staffing and vendor management programs. Over the years, we have formulated strategies, processes and in-house IT systems - enabling our sourcing engine to mature into one of the strongest in the line of business.

The last year saw CME not only consolidating their footprint in the Middle Eastern markets but also put forward their first steps into developing markets like Africa. The year saw some prestigious orders from Enterprise customers like Abdullah Fuad Holding (KSA), Al Moayaed Group (Bahrain), First Abu Dhabi Bank, Dubai Police, DP World , Emaar, Abu Dhabi Commercial Bank, Sharjah Islamic Bank etc. through CMEs established Enterprise channel. CMEs focus area for 2019-20 are going to be channel growth, channel enablement, loyalty programs and a substantial increase in its vendor and solutions portfolio. There will be a special focus on the Surveillance Security and Services business. The year will see an increase in CMEs industry specific portfolio coverage with storage, infrastructure and security solutions for the Oil and Gas, Banking, Healthcare, Telco, Media, Education, Retail & Hospitality verticals. E-Waste & Recycling Management Division will also be expanded for the Middle East & Africa markets.