The sponsor of the Project is Mr. B. Vijayakumar (the “Sponsor”), a grandson of the founder of LGB and the Managing Director of the Company. The ownership of LGB is as follows: 43.92% of the Company’s stock is owned by the Sponsor; 43.35% of LGB’s shares are publicly-held; institutional investors hold 8.84% of the Company’s shares and the remaining 3.89% of the stock are privately held by Indian companies, financial institutions and foreign nationals. All the Company’s shares are listed for trading at Coimbatore, Chennai, Mumbai and National stock exchanges.

The total project cost is estimated at $40.4 million. The proposed IFC financing for LGB totals $20 million.

20.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	15.0
Equity	5.0

* These investment figures are indicative

The expansions contemplated by the Project will take place at the following facilities: - Transmission Division - Annur, Vaiyampalayam (at Coimbatore), Mysore and Karur. - Fine products division – Pongalur - Coimbatore - Rolled steel products – Gudalur - Karur - Cold forging & Machining division – K. Palayam at Coimbatore - Hot and Work forging Forging – Apten - Bangalore - Hot forging – MGM – Mysore - New Hot forging – Coimbatore All the above-mentioned sites are existing manufacturing facilities of the Company located in small and medium-sized towns. The facilities have adequate access to transportation routes and other infrastructure.

Larger production capacity, improvements in quality of the LGB products and economies of scale, which are expected to be achieved as a result of the Project implementation, will improve the competitiveness of an established automotive component supplier in India. The country will benefit from the Project implementation through the strengthening of its automotive manufacturing platform, as well as through improved quality and availability of the LGB products. Profitability improvements, which LGB expects to achieve as a result of the Project implementation, will benefit the Company’s stakeholders, including the shareholders, labor and government. In addition, the upgrades and expansions of LGB’s facilities contemplated by the Project are expected to contribute to the improvement of the economic and employment situation in small and medium-sized towns where these facilities are located. IFC Role: By providing long-term financing otherwise not available to the Company, IFC would enable LGB to proceed with a strategically important expansion while remaining financially sound. In addition, IFC will work with the Company on improving further its environmental, health and safety systems.

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project consisted of appraising technical, environmental and social information submitted by the Project Company and visits to the three chain plants at Annur, Vaiyapalam, and Mysore; the fine blanking plant at Pongalur; and the forging plants at Kpalayam, Mysore, and Bangalore. The environment, health and safety and social aspect of the project that were analyzed included: corporate environmental, social, and health and safety management systems; national and local government permitting requirements; source of power and energy, including fuel storage if applicable; air emissions and noise during construction and operation; source and volumes of water consumed including efforts to minimize water use; recycling and treatment of process effluent and domestic waste water; community health and safety during both construction and operation; hazardous materials management; minimization, recycling and disposal of solid and hazardous wastes; fire and life safety and emergency response; occupational health and safety during construction and operation; corporate social responsibility efforts, including HIV/AIDS awareness; and timely reporting on environmental and social performance to IFC.

The Company has presented plans to address these impacts to ensure that the proposed project will upon implementation of the specific agreed measures, comply with the host country laws and regulations and the World Bank/IFC environment and social policies and the environmental, health and safety guidelines. A discussion on the Company’s plans to mitigate/minimize identified environmental and social impacts has been provided in the Environmental Review Summary (ERS) and an Environmental and Social Action Plan (ESAP). The company has publicly disclosed the ERS and the ESAP in a manner and at locations specified later in this document.
Location of environmental documents in locally affected community
English and Tamil translated versions of SPI, ERS and ESAP have been locally disclosed at the following locations: Ganapathy, Local Library Authority, Ganapathy Village, Behind Ganesh Theatre, Sanganoor Main Road, Ganapathy (PO), Coimbatore - 641 006,Tamil Nadu. Gudalur, Rural Library, D'Gudalur,Near to Panjayat Office, Vedachandur (TK), Dindigul - 624 620, Tamil Nadu, English and Kannada translated version of SPI, ERS and ESAP have been locally disclosed at Mysore, Dept of Public Library,City Central Library,Lakshmipuram Branch,Mysore - 570 004,Karnataka, Bangalore,City Central Library, South Zone, Elephant Rock Street, South End Circle, Jaya Nagar, Bangalore - 560 011, Karnataka, Ph: 080 26548829