Eco Recycling Ltd Management Discussions.

1. Industry structure and developments.

Prior to the entry of Eco Recycling Ltd (Ecoreco) as an organised recycling company, the entire collection & dismantling of e-waste was being carried out by the informal workers (Kabadies) in India. Ecoreco established the first Authorised & Certified Recycling facility in Mumbai, since then, gradually the dominance of unorganised collection started diminishing but still a lot is yet to be done to achieve the targets set by the Central Government as per the E-waste Management Rules.

The Ministry of Environment (MOEFCC) has incorporated the globally accepted principle of Extended Producers Responsibility along with yearly targets of collection to be achieved by the Producers of electrical & electronic devices.

2. Opportunities and Threats.

With the increasing consumption of electrical & electronic equipment, there is a proportionate rise in the generation of e-waste. Ecoreco is enlarging its capacity & capabilities to participate in this growth but as mentioned above the journey of transformation from unorganised to organised will take its own time.

3. Segment-wise or product-wise performance.

Ecoreco is engaged in the business of recycling of e-waste and affiliated services only.

4. Outlook

The generation of e-waste is increasing globally including India. As per the recent publication, the industry is growing at 21% per annum and India is the third largest producer of e-waste in the World.

5. Risks and concerns.

We do not see any specific risks & concerns except whatever is applicable to any other industry.

6. Internal control systems and their adequacy.

The Company has an adequate checks & balances in place.

7. Discussion on financial performance with respect to operational performance.

The Companys financial performance for the year ended March 2020 was extremely satisfactory. The Company focused on fee based & high margin business and thereby achieved better profitability. This helped company to reduce its cash credit facility to almost nil and saved on interest.

8. Material developments in Human Resources / Industrial Relations front, including number of people employed. The Company has a small team of less than 50 members put together and is proud of its team members from top to bottom. The inter personnel relation was absolutely satisfactory & productive.

To provide you a better outlook and potential of the industry we are pleased to share two important reports published by very reputed organisations in the World. One of them has been written by Kiran Pandey and published by Down To Earth in its recent publication and the other one by Damian Carrington Environment Editor of www.theguardian.com. Interestingly one report focuses on the quantum of problem and the other one talks more about the business opportunity available in the segment.

We invite you to kindly spare some time to go through the below publications and evaluate the opportunity unfolding before your Company. We are proud to share that your Company had visualised the similar scene 15 years before and started the journey of transformation, which was then completely dominated by the informal sector. We are further proud to share that your Company has set several milestones in its journey and also innovated several technologies to handle e-waste in Safe & Secured manner. In the light of the below reports, we see much brighter future for your Company.

There was 53.6 million tonnes of electronic waste in 2019, according to a new United Nations University report. Photo: Flickr

"Global e-waste — discarded electrical and electronic equipment — will increase by 38 per cent in the decade between 2020 and 2030, according to a new United Nations University (UNU) report. There was 53.6 million tonnes (MT) e-waste in 2019, according to the report. That is a nearly 21 per cent increase in just five years.

Asia generated the greatest volume of e-waste in 2019 — some 24.9 MT, followed by the Americas (13.1 MT) and Europe (12 MT). Africa and Oceania generated 2.9 MT and 0.7 MT respectively, the report said.

Most E-waste in 2019 consisted of small equipment (17.4 MT), large equipment (13.1 MT) and temperature exchange equipment (10.8 MT). Screens and monitors, lamps, small IT and telecommunication equipment represented 6.7 MT, 4.7 MT, and 0.9 MT respectively according to UNU estimates in the report. E-waste is a health and environmental hazard, containing toxic additives or hazardous substances such as mercury, which damages the human brain and / or coordination system.

No recycling

Less than 18 per cent of the e-waste generated in 2019 was collected and recycled, according to the report. This means that e-waste consisting gold, silver, copper, platinum and other high-value, recoverable materials worth at least $57 billion was mostly dumped or burned rather than being collected for treatment and reuse.

The number of countries that have adopted a national e-waste policy, legislation or regulation has increased from 61 to 78 and includes India. While this is certainly a positive trend, it is far from the target set by the International Telecommunication Union to raise the percentage of countries with an e-waste legislation to 50 per cent. There are 312 authorised recyclers of e-waste in India, with the capacity for treating approximately 800 kilotonnes annually.

However, formal recycling capacity remains underutilised, as the large majority of the waste is still handled by the informal sector. About 90 per cent of the countrys e-waste is recycled in the informal sector, according to the report. Hence, effective implementation of regulations is the way ahead to managing the e-waste that is yet to be regulated in at least 115 countries."

"At least $10bn (7.9bn) worth of gold, platinum and other precious metals are dumped every year in the growing mountain of electronic waste that is polluting the planet, according to a new UN report. A record 54m tonne of "e-waste" was generated worldwide in 2019, up 21% in five years, the UNs Global E-waste Monitor report found. The 2019 figure is equivalent to 7.3kg for every man, woman and child on Earth, though use is concentrated in richer nations. The amount of e-waste is rising three times faster than the worlds population, and only 17% of it was recycled in 2019.

Electronic and electrical goods, from phones and computers to refrigerators and kettles, have become indispensable in modern societies and enhance lives. But they often contain toxic chemicals, and soaring production and waste damages human health and the environment, and fuels the climate crisis.

The report blames lack of regulation and the short lifespan of products that are hard or impossible to repair. Experts called the situation a "wholly preventable global scandal".

People in northern Europe produced the most e-waste - 22.4kg per person in 2019. The amount was half as much in eastern Europe. Australians and New Zealanders disposed of 21.3kg per person, while in the US and Canada the figure was 20.9kg. Averages across Asia and Africa were much lower, at 5.6kg and 2.5kg per person respectively.

E-waste contains materials including copper, iron, gold, silver and platinum, which the report gives a conservative value of $57bn. But most are dumped or burned rather than being collected for recycling. Precious metals in waste are estimated to be worth $14bn, but only $4bn- worth is recovered at the moment.

Europe had the highest recycling rate in 2019, at 42%, with Asia second at 12%. But across North and South America, and Oceania, the rate was 9% and in Africa it was 0.9%.

In low- and middle-income countries, some e-waste is recycled but usually by unsafe practices, such as burning circuit boards to recover copper. This releases highly toxic metals such as mercury, lead and cadmium, "causing severe health effects to workers as well as to the children who often live and play near e-waste activities", the report said. It estimated that 50 tonnes of mercury from monitors, energy-saving light bulbs and other e-waste is dumped each year. Furthermore, gases released from discarded fridges and air-conditioning units were equivalent to 98m tonnes of atmospheric carbon dioxide in 2019, close to the national emissions of Belgium.

"E-waste is a very big problem because the amount is growing at a very rapid pace each year, and the level of recycling is just not keeping up pace," said Kees Balde at the UN University, based in Bonn, and an author of report. "Its important to put a price on the pollution - at the moment it is simply free to pollute."

"The biggest problem is that, in many countries, there are no collection systems," said Mijke Hertoghs, at the UNs International Telecommunication Union. "The companies that bring the equipment on the market are not being held accountable for the end- of-life disposal."

But Hertoghs said the value of the metals being dumped presented an opportunity. Balde agreed: "If [collection and recycling] were better organised, the economies of scale would go up and I think there are opportunities for creating a new economy and new jobs. There would be a huge income for many people." Recycling would also cut the environmental impact of mining for new metal: "One gram of gold has a massive footprint."

"Improper e-waste recycling is a major emerging hazard, silently affecting our health and that of future generations," said Maria Neira at the World Health Organization. She said one in four childhood deaths resulted from pollution, including e-waste."