The circuit consists of two parts, a constant current generator using a PNP power transistor (Q2), and a peak-detecting shutoff circuit using a high-gain opamp (IC1). To start the charge cycle, switch SW1 is momentarily closed, causing C1 to discharge. As IC1’s inverting input is now higher than its non-inverting input, its output goes low, turning on Q1. This lights the red “charge” LED (D2) and provides about 80mA through R6 and R7 to turn on Q2, which starts charging the battery. Charge current flows through R8 on its way to the battery. When the voltage across R8 exceeds about 0.6V, Q3 starts to turn on and robs current from the base of Q2. This regulates the output current to an amount determined by the value of R8.