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PROJECT REPORT

FOR MANUFACTURING BARSS TORCHES AND ASSEMBLY OF PLASTIC TORCHES

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

Baddi Himachal Pradesh

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

Promoters

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. Historically, the brand had a 5% market share in nonalkaline 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.

Market Share

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 The Mysore plant of GEEP manufactures dry cells of D facilities 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. 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. 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. 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. 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

Market Segments

Sales & Distribution

Market potential

Competition

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 1.02 Name of Industrial Concern: Constitution Public/Private Ltd. Co./ Co-Op Society/partnership. Enclose: Copy of memorandum and Articles of Association/ Bye-laws/ Partnership deed. 1.03 1.04 1.05 Date of incorporation/registration Date of commencement of Business Name of business house/ group to which the concern belongs and the list of other companies in the same group. Location: a) Registered Office Geep Batteries (I) Pvt. Ltd. 23/24, Rajdeep Society,Gokhale Road, Naupada, Thane- 400602 --do-Khasra No. 66, 67 Judi Kalan, P.O. Baddi, Distt. Solan, Himachal Pradesh Geep Batteries (I) Pvt. Ltd. Pvt. Ltd. Company Memorandum and Articles of Association enclosed. 15.11.2002 15.11.2002 Thanawala Group.

1.06

b) Controlling Head office c) Project:

1.07

Nature of Industry and products: Industry Product Torches Torches Capacity Licensed N.A. N.A. Capacity 6 million nos. 120 million nos.

1. 2.

Brass Torches Assembly of Plastic torches

1.08 Company Result: Year Turnover Gross Profit Gross Profit to turnover, % Depreciation 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 Joef Thanawala Khalid Deepak Bhatt Position Managing Technical Advisor Senior Executive 2003-04 4974 78 2% 50 ---

(Rs in lacs) 2002 –03 801 (137) -11 ---

Function Overall Incharge Manufacturing Operations 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 Installed Capacity Production Sales Value (Rs.3000) 03-04 102 million nos 65mn nos 49740 02.-03 102 million nos. 24 mn nos 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 1. 2. Brass Torches Assembly of Plastic Torches Capacity 6.00 million Nos. 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 Civil Work Plant & Machinery Power Water Erection Commissioning Trial Run Commercial Production Dec. 2004 October 2004 January 2005 January 2005 March April 2005 April 2005 May 2005 Completion March 2005 April March 2005 January 2005 April 2005 April 2005 April 2005 Continuous

5.0

Profitability Statement:
2005-06 25000 600000 600000 50 1500 1350 50 25 2 3 70 23 2006-07 40000 700000 700000 50 1800 1600 70 40 2 2 86 41 2007-08 50000 800000 800000 50 2100 1800 90 50 2 2 156 43.5 2008-09 60000 1000000 1000000 50 2500 2200 120 60 3 2 115 42.5 2008-09 60000 1200000 1200000 50 2800 2500 125 70 3 2 100 42.5 192.5

Particulars Qty- 000 NosBrass torches - Batteries Assb. Plast. Torches Sales Price per meter set ‘Rs’ Sales Value (Rs in lacs) Raw Material cost Production Variable cost Marketing cost Admin cost Depreciation EBITDA EBIT List of Directors Name

Nationality Indian

Address Geep Batteries (I) Pvt. Ltd. 23/24, Rajdeep Society, Gokhala Road, Naupada, Thane-400602 ----do------do------ do—

Jainuddin T. Thanawala

Razia T. Thanawala Murtuza Thanawala Shabbir Thanawala

Indian Indian Indian

BRIEF PROJECT DETAILS

RAW MATERIALS
S.No. Item 1. 2. 3. BRASS SHEET 0.3 THK. FOR BASIC PART AND BRASS SHEET 0.3 THK. FOR BASIC PARTS: PLASTIC ABS FOR SWITCH KNOB PLASTIC HD. FOR LENS RING Daily Quantity 10000 Kg 11000 Nos. 11000 Nos.

Other Items (1) (2) (3) (4) (5) BULB GLASS RING SWITCH. BULB HOLDER 33000 Nos. 33000 Nos. 33000 Nos. 33000 Nos. 33000 Nos.

Chemicals: Monthly Consumption 1. Metal Cleaner Composition: Sodium Hydroxide Sodium Carbonate Tri Sodium Phosphate Sulphuric Acid (Conc.) Nitric Acid Sodium Hydroxide Nickel Metal Nickel Salts Composition: Nickel Sulphate Nickel Chloride Boric Acid Nickel Brightener Activated Carbon Nickel carbonate Chromic Acid Sodium Bi Sulphite Polishing Bars 150 Kgs Max. Storage Capacity at Site 900kg

2. 3. 4. 5. 6.

50 Ltrs 30 Ltrs 100 Kgs 1500 Kgs 500 Kgs

500 Ltrs. 300 Ltrs 400 Kgs 9000 Kgs 2500 Kgs

7. 8. 9. 10. 11. 12.

300 Ltr 30 Kgs 20 Kgs 200Kgs 150Kgs 100 Kgs

3600 Kgs 180 Kgs 120 Kgs 1500 Kgs 1200 Kgs

List of Plant & Machinery Sr.no. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Particulars Presses Vaccum Metalising Plant Automatic Vaccum Blister Electroplating ETP Air Compressors Transformers Assembly Fixtures Tool Room Machines Generator Inspection Gauges Testing equipments Quantity 8 nos. 1 nos. 1 nos. 1 nos. 1 nos. 2 nos 2 nos. As per requirement 4 nos. 1 no 1 no. As per requirement Imported/Indian Indian Indian Indian Indian Indian Indian Indian Indian Indian Indian Indian 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 FORM POLISH METALIZING PLATING

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

+
FROM VENDOR - BULB HOLDER & SWITCH

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

PROCESS SEQUENCE CHART FOR ELECTROPLATING
Transfer Stage 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Process Approx Immersion Time (MINS) 3-4 1 2-3 1 1 1 10-11 1 1 1 3-4 1 1 1 1 2 5 -

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

PRODUCTS TO BE MANUFACTURED AT PROPOSED SITE

S.N O. 1. 2. 3. 4.

5. RAW MATERIAL S.NO. 1. 1. 3. PRODUCTS BRASS TORCHES BLISTER PACKING CONSUMER PRODUCTS & APPLIANCES ASSEMBLY OF PLASTIC TORCHES

PRODUCTS BATTERIES BRASS TORCHES BLISTER PACKING CONSUMER PRODUCTS AND APPLIANCES LIKE ORAL CARE, FANS ETC. ASSEMBLY OF PLASTICS TORCHES

RAW MATEIRAL BRASS, NICKEL PLATING ETC. PVC PAPER ORAL, CARE, PACKING, ASSEMBLY OF FANS, HEARTER PACKING AMTERIAL ETC. BULBS, PLASTIC TORCHES, BLISTER , REFLECTOR, PACKING MATEIRAL

4.

LOCATION BENEFITS

IT IS SITUATED IN HPSIDC INDUSTRIAL AREA, BADDI, HP EXCISE DUTY IS NIL. SALES TAX @ 1% INCOME TAX NIL, CAPITAL SUBSIDTY @ 1% INCLIME TAX NIL, CAPITAL SUBSIDY @ 15%. COST OF PROJECT S.NO. DESCRIPTION AMT.(RS.IN LACS) 1 LAND 50.00 2. BUILDING 90.0 3. PLANT & MACHINERY- 390.00 INDIGENEIOSU 3. -DO- IMPORTED 450.00 4. DIES & TOOLS 15.00 5. CONTIGENCIES 25.00 TOTAL 1100.00

COST OF PROJECT / MEANS OF FINANCE

MEANS OF FINANCE S.NO. 1. 2. 3. TOTAL DESCRIPTION INTERNAL SOURCES SUBSIDY LOAN & OTHERS AMT(Rs.in lacs) 500.00 30.00 570.00 1100.00