PROJECT REPORT

FOR MANUFACTURING

BARSS TORCHES AND ASSEMBLY OF PLASTIC TORCHES

M/s. GEEP BATTERIES (INDIA) PRIVATE LTD.

Baddi Himachal Pradesh

CONTENTS 1. INTRODUCTION 2. GENERAL SECTION 3. PARATICULARS OF INDUSTRIAL CONCERN 4. PARTICULARS OF PROJECT 5. COST OF PROJECT AND MEANS OF FINANCING 6. PROFIT ABILITY STATEMENT

Background GEEP Batteries (India) Private Ltd, (“GEEP”) was incorporated in November 2002 by the Thanawala group in Thane close to Mumbai with the objective of manufacturing batteries and torches and selling in local and export market. GEEP acquired the batteries and torches business comprising of the GEEP brand name, distribution network and sourcing facility form Gilette India Ltd. GEEP also acquired the manufacturing facility of Gilette Diversified Operations Pvt. Ltd., in Mysore.

Promoters Thanawala group is engaged in manufacturing, trading and contracting activities. Shri J.T. Thanawala who has over 40 years of experience in trading and manufacturing heads it. Shri Murtuza Thanawala manages the international business of the group and is experienced in marketing and exports. Shri Shabbir Thanawala manages the factories within the group. The group carries on manufacturing of Industrial products like blades, Giwires, HDPE capsules and sacks, shrink film packaging and consumer products like Shaving cream and Toothpastes. The group has factories in Thane, Silvassa and New Mumbai and employs over 500 people. The group turnover for the financial year ending March 2004 is expected to be in the range of Rs. 150crores.

Products GEEP manufactures 2 types of non-alkaline dry cells (AA and D type) at Mysore. It also procures 6 types of non-alkaline dry cells from third party contract manufactures. It also procures flashlights (brass and plastic) from third party contract manufacturers and markets under the GEEP brand. GEEP also procedures flashlights (brass and plastic) from third party contractors and sells them in the local market. Flashlights are complimentary to batteries.

Market Share Historically, the brand had a 5% market share in non-alkaline dry batteries and 29% market share in flashlights. The market share has dominated in the northern and eastern India, viz. Uttar Pradesh, Madhya Pradesh, West Bengal, Himachal Pradesh and Jammu and Kashmir.

GEEP along with another competitor is the only approved suppliers of 34R14 batteries to the Defence forces for use in particular type of Radio sets.

Manufacturing facilities

The Mysore plant of GEEP manufactures dry cells of D size and AA size. The capacities are 80 million and 20million pieces per annum. The plant has established a Quality Management System (QMS) in line with the requirements as per the revised ISO 9001:2000 standards. The certifying body M/s NQAQSR has certified the QMS in June 2002. The plant has been running at an 85% capacity. The plant is managed by processionals and has a work force of 160.

Third Party Contractors

GEEP has acquired the sourcing arrangements with various vendors for supplies of specialty batteries to Defence. The vendors are capable of manufacturing 200,000 flashlights a months and the necessary lamp too.

Market Segments

The customer segments for batteries is Retail, CSD (Canteen Stores. Department) and Defence. GEEP is exploring the possibility of typing up with institutional buyers on the lines of an OEM for remotes, telephones etc.

Sales & Distribution

GEEP has acquired the distribution network of over 1950 distributors across the country covering 240.000outlets. GEEP has 20 C & F agents across India covering the markets. It has a young and dynamic sales force of 52 employees. Which is exclusively concentrating on building the brand.

Market potential

GEEP enjoys brand equity in the neighboring country of Nepal and there is a potential to exploit the market for gaining share in the category and leveraging for expanding the products range.

Competition The competition to GEEP in the battery segment is by Eveready India, Indo National and Lakhanpal National. Indo National and Lakhanpal National are both joint ventures of Matsushita Electric Japan. The BM Khaitan group manages Eveready India. BPL has been a recent

entrant in the market and has successfully captured 5% market share in the AA type. However, the press has carried articles indicating that BBL is divesting from the batteries business. The competition of GEEP in the brass flashlights is from Eveready India and in plastic flashlight is from Indo National, Lakhanpal National and Govindson Flashlight. Although Chinese manufacturers forced a competition to India in the batteries segment, with the imposition of Anti-dumping duties and the freight cost, they are finding it difficult to compete with Indian manufacturers. However, they do form a force to reckon in the plastic Flashlight market.

GENERAL 1.01 Name of Industrial Concern: Geep Batteries (I) Pvt. Ltd.

1.02 Constitution Public/Private Ltd. Co./ Co-Op

Society/partnership.

Pvt. Ltd. Company

Enclose: Copy of memorandum and Articles of Association/ Bye-laws/ Partnership deed.

Memorandum and Articles of Association enclosed.

1.03 Date of incorporation/registration 15.11.2002

1.04 Date of commencement of Business 15.11.2002

1.05 Name of business house/ group to which the concern belongs and the list of other companies in the same group.

Thanawala Group.

1.06 Location:

a) Registered Office

Geep Batteries (I) Pvt. Ltd. 23/24, Rajdeep Society,Gokhale Road, Naupada, Thane- 400602

b) Controlling Head office

--do--

c) Project: Khasra No. 66, 67 Judi Kalan, P.O. Baddi, Distt. Solan, Himachal Pradesh

1.07 Nature of Industry and products:

Industry Product

Capacity Licensed Capacity

1. Brass Torches Torches

N.A. 6 million nos.

2. Assembly of Plastic torches

Torches N.A. 120 million nos.

1.08 Company Result:

(Rs in lacs)

Year 2003-04 2002 –03

Turnover 4974 801

Gross Profit 78 (137)

Gross Profit to turnover, % 2% --

Depreciation 50 11

Dividend per share in Rs. -- --

Earning per share Rs. -- --

2.0 Directors

List of Directors is Enclosed Along 3.0 List of key executives

Name Position

Function

Joef Thanawala Managing

Overall Incharge

Khalid Technical Advisor

Manufacturing Operations

Deepak Bhatt Senior Executive

Accounts

3.01 Present Manufacturing Activities and Production: The company is engaged in the manufacture of Batteries and torches. It has its factory at 120 –122, KRS Road, Metagalli, Mysore – 570016. The Company supplies its products to consumers/ population of India, Indian Railways, Defence, etc. The installed capacity, production and sales for the last 3 years are given below: Parameters 03-04 02.-03 Installed Capacity 102 million nos 102 million nos.

Production 65mn nos 24 mn nos

Sales Value (Rs.3000) 49740 8010

3.02 R & D Activities of the Company

R & d Activities are carried out through Research Designs & standards, organization our own laboratory.

4.0 Particulars of the Project

The company is putting project to manufacture Brass torches and Batteries at Baddi.

Process of Brass Flashlight: First, Brass sheet is procured from the supplier and then it is cut on cutting machine as per the size required. After cutting it is carried to the rolling machine where it is rolled. After rolling it is send for polishing on polishing machine. After polishing, it is send for Ni Cr. Plating to electroplating Plant. This is one part of process. Secondly, a bout 23 pressing parts are required to make a complete torch. Form brass sheet we make bulb holder, reflector, head ring, bottom spacer, spring, switch assembly etc. The process is the brass sheets are cut into the required size and for different parts dies are fitted on the press. Different parts are manufactured on the press and send it for polishing. After polishing it is send for N: Gr plating but reflector is send to the metallising plant for reflective coating for proper focusing. Thirdly when all the components are planted and reflector metallised it is send to the packing line, where all the components are assembled and the bulb is fitted to make a complete torch. After the torch is assembled the focus of the torch is adjusted and packed in the inner and outer carton respectively.

4.01 Capacity Details of installed capacity as below: (Capacity is arrived at on the basis of 300 working days on 3 Shift basis)

Product Capacity

1. Brass Torches 6.00 million Nos.

2. Assembly of Plastic Torches 120 million No.

4.02 Product specification:

Product shall be manufactured as per drawing and specification as required by prospective consumers whom the production shall be supplied.

4.03 Project management during construction/ operation

The project will be implemented under the supervision of our technical personnel layout shall be finalized in consultation with Architect.

4.04 Location of Land:

3 Bighas 14 Biswas land at Village Judi kalan, Tehsil Nalagarh, Distt. Solan Himachal Pradesh.

4.05 Buildings

Building will be constructed on contract basis, which has been awarded to Konsortium Konstruction.

4.06 Details of Plant & Machinery List of major Plant & Machinery is given in Annexure A4 4.07 Raw Material/ Components As per Annexure A5

4.09 Power Power Demand 500KW 4.10 Stand By Arrangement One D.G. Set of 250 KVA Capacity. 4.11 Water

Water requirement shall be met by 250 deep tube-well within the factory UGR tanks for storage of water. We shall also apply with appropriate authorities for stand by.

4.12 Air Air requirements shall be met by 2 nos. air compressors of capacity 40 CFM. 4.13 Effluents

The plant does not envisages any armful effluents. However the company shall install modernized automatic effluent Treatment plant to treat the water.

4.14 Schedule of Implementation

Commencement Completion

Civil Work Dec. 2004 March 2005

Plant & Machinery October 2004 April

Power January 2005 March 2005

Water January 2005 January 2005

Erection March April 2005

Commissioning April 2005 April 2005

Trial Run April 2005 April 2005

Commercial Production May 2005 Continuous

5.0 Profitability Statement: Particulars 2005-06 2006-07 2007-08 2008-09 2008-09 Qty- 000 Nos- Brass torches

25000 40000 50000 60000 60000

- Batteries 600000 700000 800000 1000000 1200000

Assb. Plast. Torches

600000 700000 800000 1000000 1200000

Sales Price per meter set ‘Rs’

50 50 50 50 50

Sales Value (Rs in lacs)

1500 1800 2100 2500 2800

Raw Material cost 1350 1600 1800 2200 2500

Production Variable cost

50 70 90 120 125

Marketing cost 25 40 50 60 70 Admin cost 2 2 2 3 3 Depreciation 3 2 2 2 2 EBITDA 70 86 156 115 100 EBIT 23 41 43.5 42.5 42.5 192.5 List of Directors

Name Nationality Address

Jainuddin T. Thanawala Indian Geep Batteries (I) Pvt. Ltd. 23/24, Rajdeep Society, Gokhala Road, Naupada, Thane-400602

Razia T. Thanawala Indian ----do---

Murtuza Thanawala Indian ----do---

Shabbir Thanawala Indian ---- do—

BRIEF PROJECT DETAILS

RAW MATERIALS S.No. Item Daily Quantity

1. BRASS SHEET 0.3 THK. FOR BASIC PART

AND BRASS SHEET 0.3 THK. FOR BASIC PARTS:

10000 Kg

2. PLASTIC ABS FOR SWITCH KNOB 11000 Nos. 3. PLASTIC HD. FOR LENS RING 11000 Nos. Other Items (1) BULB 33000 Nos. (2) GLASS 33000 Nos. (3) RING 33000 Nos. (4) SWITCH. 33000 Nos. (5) BULB HOLDER 33000 Nos.

Chemicals: Monthly Consumption Max. Storage

Capacity at Site

1.

Metal Cleaner Composition: Sodium Hydroxide Sodium Carbonate Tri Sodium Phosphate

150 Kgs 900kg

2. Sulphuric Acid (Conc.) 50 Ltrs 500 Ltrs. 3. Nitric Acid 30 Ltrs 300 Ltrs 4. Sodium Hydroxide 100 Kgs 400 Kgs 5. Nickel Metal 1500 Kgs 9000 Kgs 6.

Nickel Salts Composition: Nickel Sulphate Nickel Chloride Boric Acid

500 Kgs 2500 Kgs

7. Nickel Brightener 300 Ltr 3600 Kgs 8. Activated Carbon 30 Kgs 180 Kgs 9. Nickel carbonate 20 Kgs 120 Kgs 10. Chromic Acid 200Kgs 11. Sodium Bi Sulphite 150Kgs 1500 Kgs 12. Polishing Bars 100 Kgs 1200 Kgs List of Plant & Machinery Sr.no. Particulars Quantity Imported/Indian 1. Presses 8 nos. Indian 2. Vaccum Metalising Plant 1 nos. Indian 3. Automatic Vaccum Blister 1 nos. Indian 4. Electroplating 1 nos. Indian 5. ETP 1 nos. Indian 6. Air Compressors 2 nos Indian 7. Transformers 2 nos. Indian 8. Assembly Fixtures As per requirement Indian 9. Tool Room Machines 4 nos. Indian 10. Generator 1 no Indian 11. Inspection Gauges 1 no. Indian 12. Testing equipments As per requirement Indian

Process Process of Brass Torches: First, Brass sheet is procured from the supplier and then it is cut on cutting machine as per the size required. After cutting it is carried to the rolling machine where it is rolled. After rolling it is send for polishing on polishing machine. After polishing, it is send for Ni Cr. Plating to electroplating Plant. This is one part of process. Secondly, about 23 pressing parts are required to make a complete torch. Form brass sheet we make bulb holder, reflector, head ring, bottom spacer, spring, switch assembly etc. The process is the brass sheets are cut into the required size and for different parts dies are fitted on the press. Different parts are manufactured on the press and send it for polishing. After polishing it is send for Ni:Cr plating but reflector is send to the metallising plant for reflective coating for proper focusing. Thirdly when all the components are planted and reflector metallised it is send to the packing line, where all the components are assembled and the bulb is fitted to make a complete torch. After the torch is assembled the focus of the torch is adjusted and packed in the inner and outer carton respectively.

FLOW CHART BRASS BARREL REF. TO PROCESS SHT POLISH REFLECTOR DRAW PIERCE PLATING FORM POLISH METALIZING

TO ASSEMBELY HEAD REF. HEAD RING TO BOTTOM PROCESS SHT. PRESSURE PIECE POLISH ASSEMBLY PLATING TO ASSEMBLY

+ FROM VENDOR - BULB HOLDER & SWITCH

+ FROM SUPPLIER – BULB + RING + PLASTIC RING ASSEMBLY TESTING PACKING

PROCESS SEQUENCE CHART FOR ELECTROPLATING

Transfer Stage Process Approx Immersion Time (MINS)

0 1 LOAD / UNLOAD - 1 9 HOT SOAK CLEAN 3-4 2 10 WATER RINSE 1 3 11 HOT ELECTRO CLEAN (PR) 2-3 4 12 C/F RINSE 1 5 13 C/F RINSE 1 6 14 ACID DIP 1 7 15 WATER RINSE 8 19-20 BRIGHT NICKEL 10-11 9 18 D/O RINSE 1 10 17 C/F RINSE 1 11 16 C/F RINSE 1 12 8 BRIGHT CHROME PLATE 3-4 13 7 D/O RINSE 1 14 6 NEUTRALISING DIP 1 15 5 C/F RINSE 1 16 4 C/F RINSE 1 17 3 HOT WATER RINSE 2 18 2 HOT AIR RINSNE 5 19 1 UNLOAD -

PRODUCTS TO BE MANUFACTURED AT PROPOSED SITE

S.N O. PRODUCTS 1. BATTERIES 2. BRASS TORCHES 3. BLISTER PACKING 4. CONSUMER

PRODUCTS AND APPLIANCES LIKE ORAL CARE, FANS ETC.

5. ASSEMBLY OF PLASTICS TORCHES

RAW MATERIAL S.NO. PRODUCTS RAW MATEIRAL 1. BRASS

TORCHES BRASS, NICKEL PLATING ETC.

1. BLISTER PACKING

PVC PAPER

3. CONSUMER PRODUCTS & APPLIANCES

ORAL, CARE, PACKING, ASSEMBLY OF FANS, HEARTER PACKING AMTERIAL ETC.

4. ASSEMBLY OF PLASTIC TORCHES

BULBS, PLASTIC TORCHES, BLISTER , REFLECTOR, PACKING MATEIRAL

LOCATION IT IS SITUATED IN HPSIDC INDUSTRIAL AREA, BADDI, HP

BENEFITS EXCISE DUTY IS NIL. SALES TAX @ 1% INCOME TAX NIL, CAPITAL SUBSIDTY @ 1% INCLIME TAX NIL, CAPITAL SUBSIDY @ 15%.

COST OF PROJECT / MEANS OF FINANCE

COST OF PROJECT S.NO. DESCRIPTION AMT.(RS.IN

LACS) 1 LAND 50.00 2. BUILDING 90.0 3. PLANT & MACHINERY-

INDIGENEIOSU 390.00

3. -DO- IMPORTED 450.00 4. DIES & TOOLS 15.00 5. CONTIGENCIES 25.00 TOTAL 1100.00

MEANS OF FINANCE S.NO. DESCRIPTION AMT(Rs.in lacs) 1. INTERNAL

SOURCES 500.00

2. SUBSIDY 30.00 3. LOAN &

OTHERS 570.00

TOTAL 1100.00