DIRECTORS’ REPORT

Dear Shareholders,

Your Directors take pleasure in presenting the Tenth Annual Report of your Company together with the audited accounts for the year ended on 31st March, 2016.

PERFORMANCE OF THE COMPANY

During the year under review, your Company’s Gross Revenue is Rs. 8917.53 Lakhs [Previous Year: Rs. 8263.17 Lakhs]. Gross Profit / (Loss) before interest, depreciation and tax amounted to Rs. 279.23 Lakhs [Previous Year (Rs.616.34 Lakhs]. The Net Profit/ (Loss) stood at (Rs. 233.75) Lakhs [Previous Year Net Profit/(Loss) (Rs. 13.79) Lakhs].

AMOUNT TRANSFERRED TO RESERVES

The Company has not transferred any amount to reserves during the year due to loss incurred to the Company and hence no information as per the provisions of Section134 (3) (j) of the Companies Act, 2013 has been furnished.

DIVIDEND

In view of the losses, current and accumulated, your Directors regret their inability to recommend dividend for the year 2015-2016.

FIXED DEPOSITS

During the year under review, your Company has not accepted any deposits in terms of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposit) Rules, 2014. As on 1st April, 2015, no amounts were outstanding which were classified as ‘Deposits’ under the applicable provisions of Companies Act, 2013 and hence, the requirement for furnishing of details of deposit in compliance with the Chapter V of the Companies Act, 2013 is not applicable.

EXTRACT OF ANNUAL RETURN

Pursuant to the provisions of Section 134(3) (a) of the Companies Act, 2013, Extract of the Annual Return for the financial year ended 31st March, 2016 made under the provisions of Section 92(3) of the Act is attached in prescribed form (MGT-9) as Annexure-A which forms part of this Report.

DISCLOSURE UNDER SECTION 134(3) (l) OF THE COMPANIES ACT, WITH RESPECT TO MATERIAL CHANGES AFTER THE DATE OF FINANCIAL REPORT.

There were no material changes and commitments affecting the financial position of the Company between the end of the financial year (March 31, 2016) and the date of the Report (April 30, 2016)

INTERNAL CONTROL SYSTEMS AND COMPLIANCE FRAMEWORK

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The Internal Auditors and the management monitors and evaluates the efficacy and adequacy of the internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Audit observations of Internal Auditors and corrective actions thereon are presented to the Audit Committee of the Board. To maintain its objectivity and independence, the Internal Auditor reports to the Audit Committee.

The Company has in place adequate internal financial controls commensurate with size, scale and complexity of its operations. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and timely preparation of reliable financial information

DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL

No Significant and Materials orders have been passed by any Regulator or Court or Tribunal which can have an impact on the going concern status and the Company’s operations in future.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All Contracts/arrangements/transactions entered by the Company during the financial year with related parties were on an arm’s length basis. During the year, the Company had not entered into any contract/arrangement/ transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. Hence the requirement for furnishing of details under Section 134(3)(h) in prescribed Form No.AOC-2 is not applicable.

PARTICULARS OF LOAN, GUARANTEE AND INVESTMENTS UNDER SECTION186 OF THE COMPANIES ACT, 2013

The Company has not provided any loan, Guarantee and made investments under Section186 of the Companies Act, 2013 hence no information as per provisions of Section134 (3) (g) of the Companies Act, 2013 has been furnished.

DISCLOSURE REGARDING ISSUE OF EQUITY SHARES WITH DIFFERENTIAL RIGHTS.

The Company has not issued any equity shares with differential rights during the year under review and hence no information as per provisions of Rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014 has been furnished.

DISCLOSURE REGARDING ISSUE OF EMPLOYEE STOCK OPTIONS

The Company has not granted any Employees Stock Options Scheme, during the year under review and hence no information required to be furnished as per the provisions of Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014.

DISCLOSURE REGARDING ISSUE OF SWEAT EQUITY SHARES

The Company has not issued any Sweat Equity Shares during the year under review and hence no information required to be furnished as per the provisions of Rule 8(13) of the Companies (Share Capital and Debentures) Rules, 2014.

DISCLOSURES IN RESPECT OF VOTING RIGHTS NOT DIRECTLY EXERCISED BY EMPLOYEES

There are no shares held by trustees for the benefit of employees and hence no disclosure under Rule 16(4) of the Companies (Share Capital and Debentures) Rules, 2014 has been furnished.

DETAILS OF SUBSIDIARY, JOINT VENTURE OR ASSOCIATES

The Company has no Subsidiary, Joint Venture or Associate Companies during the year under review and hence no information required to be furnished as per the provisions of Rule 8 (5)(iv) of the Companies (Accounts) Rules, 2014.

SHARE CAPITAL

The Paid-up share capital of the Company as at 31st March 2016 stood at Rs. 1500.02 lakhs. During the year under review the Company has not made any fresh issue of shares.

CHANGE IN NATURE OF BUSINESS, IF ANY.

There was no change in the nature of the business of the Company during the year under review.

MATTERS RELATING TO DIRECTORS AND KEY MANAGERIAL PERSONNEL RETIREMENT BY ROTATION

In accordance with the provisions of Section 152(6) and as per the Articles of Association of the Company, Mr.Rajiv Parthasarathy (DIN: 02495329) retires at the ensuing Annual General Meeting and being eligible, seeks re-appointment. The Board recommends his re-appointment.

APPOINTMENTS / RESIGNATION OF DIRECTORS / KMP

During the year under review the following changes were occurred in the Directors and Key Managerial Personnel.

- None of the Independent Directors retires at the ensuing Annual General Meeting.

-Sri.G.Karthik, Company Secretary of the Company has resigned with effect from 10th September 2015.

- Sri.R.Ponmanikandan has been appointed as the Company Secretary & Compliance Officer of the Company with effect from 29th October 2015.

DECLARATION BY INDEPENDENT DIRECTORS

Pursuant to the provisions of sub-Section (7) of Section149 of the Companies Act, 2013, the Company has received individual declarations from all the Independent Directors confirming that they fulfill the criteria of independence as specified in Section149(6) of the Companies Act, 2013

DISCLOSURE RELATING TO BOARD, COMMITTEES AND POLICIES NUMBER OF BOARD MEETINGS

The Board of Directors met 4 times during the financial year ended on 31st March 2016 in accordance with the provisions of the Companies Act, 2013 and rules made there under. The details of Board Meeting Dates and Particulars of Directors Attendance are given in the Corporate Governance Report, has been enclosed with this report. All the Directors actively participated in the meetings and contributed valuable inputs on the matters brought before the Board of Directors from time to time.

Additionally, during the financial year ended 31st March 2016, the Independent Directors held a separate meeting in compliance with the requirement of Schedule IV of the Companies Act, 2013 and Regulation 25(3) of the SEBI (LODR) Regulations, 2015.

DIRECTORS RESPONSIBILITY STATEMENT

In terms of Section 134(5) of the Companies Act, 2013, in relation to the audited financial statements of the Company for the year ended on 31st March, 2016, the Board of Directors hereby confirms that,

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed and there are no material departures;

(b) that such accounting policies have been selected and applied consistently except as stated in note number 34 of the financial statement and the Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for that period;

(c) proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the annual accounts of the Company have been prepared on a going concern basis;

(e) internal financial controls have been laid down to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

(f) proper system have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

(g) In terms of Section 143(12) of the Companies Act, 2013, the Auditor has not reported any fraud during the year.

NOMINATION AND REMUNERATION COMMITTEE AND REMUNERATION POLICY

A Nomination and Remuneration Committee is in existence in accordance with the provisions of sub- Section (3) of Section 178 of the Companies Act, 2013.

The Board has, on recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. Kindly refer the Corporate Governance Report, for matters relating to constitution, meetings, and functions of the Committee and remuneration policy formulated by this committee.

AUDIT COMMITTEE

Audit Committee is in existence in accordance with the provisions of Section 177 of the Companies Act, 2013. Kindly refer to the Section on Corporate Governance, under the head, ‘Audit Committee’ for matters relating to the composition, meetings, and functions of the Committee. The Board was accepted the Audit Committee recommendations during the year whenever required, hence no disclosure required under Section 177(8) of the Companies Act, 2013 with respect to rejection of any recommendations of Audit Committee by Board.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

Pursuant to Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 22 of the SEBI (LODR) Regulations, 2015, the Board of Directors had approved the policy on Vigil Mechanism/Whistle Blower for Directors and employees of the Company.

The Whistle Blower Policy is disclosed on the website of the Company at www.lgbforge.co.in

Your Company hereby affirms that no complaints were received during the year under review.

STAKEHOLDER RELATIONSHIP COMMITTEE

Kindly refer to the Sectionon Corporate Governance, under the head, ‘Stakeholder Relationship Committee’ for matters relating to the composition, meetings, and functions of the Committee.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

According to Section135 of the Companies Act, 2013, no requirement for our Company to constitute the CSR Committee and for framing the CSR Policy. Hence the requirement to furnish the details under Section 134(3)(o) of the Companies Act, 2013 does not arise.

EVALUATION OF BOARD, COMMITTEES AND DIRECTORS

Regulation 17 of the SEBI (LODR) Regulations, 2015 mandates that the Board shall monitor and review the Board evaluation framework. The Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and individual Directors. Independent Directors at a separate meeting evaluated performance of the Non-Independent Directors, Board as whole and of the Chairman of the Board. The manner in which the evaluation has been carried out has been detailed in the Corporate Governance Report.

FAMILIARIZATION PROGRAMMES

The Company has conducted various sessions during the financial year to familiarize Independent Directors with the Company, their roles, responsibility in the Company and the technology and risk management systems of the Company.

Directors are encouraged to attend the training programmes being organized by various regulators/ bodies/ institutions on above matters.

RISK MANAGEMENT POLICY

The Board of Directors of the Company has formulated a Risk Management Policy which aims at enhancing Shareholder’s values and providing an optimum risk reward trade off. The risk management approach is based on the clear understanding of the variety of risks that the organization faces, disciplined risk monitoring and measurement and continuous risk assessment and mitigation reserves.

AUDITORS AND THEIR REPORTS

STATUTORY AUDITORS

M/s. Haribhakti & Co LLP; Chartered Accountants (Firm Registration Number: 103523W), Coimbatore, who are the statutory auditors of the Company, hold the office till the conclusion of the forthcoming AGM and are eligible for reappointment.

Pursuant to provisions of Section 139 of the Companies Act, 2013 and the rules made there under, it is proposed to appoint M/s.Haribhakti & Co LLP; Chartered Accountants as Statutory auditors of the Company from the conclusion of forthcoming AGM to the conclusion of the fourth consecutive AGM, subject to the ratification of their appointment at every AGM held after this AGM.

The Company has received a certificate from the said Auditors that they are eligible to hold office as the Auditors of the Company and are not disqualified for being so appointed.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with, The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Sri. P. Eswaramoorthy B.Sc., FCS, (Membership No. FCS 6510 and CP.No.7069) Company Secretary in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit report (in Form No. MR.3) for the financial year 2015-16 is attached as Annexure- B which forms part of this Report.

INTERNAL AUDITOR

Pursuant to the Provisions of Section 138 of the Companies Act, 2013 and rules made there under,

Sri.MP Gopalakrishnan, Chartered Accountant was appointed as an Internal Auditor of the Company for the financial year 2015-16.

OBSERVATION OF STATUTORY AUDITOR AND SECRETARIAL AUDITOR IN RESPECT OF THEIR AUDIT REPORTS

The Statutory Audit report and Secretarial Audit report does not contain any adverse observation or qualification requiring explanation or comments from the Board under Section 134(3)(f) of the Companies Act, 2013.

OTHER DISCLOSURES

CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

The information relating to Conservation of energy, technology absorption, foreign exchange earnings and outgo, pursuant to Section 134(3)(m) of the Act, read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is attached as “Annexure C” which form part of this Report.

PARTICULARS OF EMPLOYEES AND REMUNERATION

The Information as required under the provisions of the Section 197(12) of the Companies Act, 2013 and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are set out in the “Annexure D” which forms part of this report.

Further,

- None of the employees of the Company was in receipt of remuneration in excess of the limits prescribed under Section 134 of the Companies Act, 2013.

- As on 31st March 2016 there were 395 Permanent employees of the Company.

PAYMENT OF REMUNERATION / COMMISSION TO DIRECTORS FROM HOLDING OR SUBSIDIARY COMPANIES:

Our Company does not have Holding and Subsidiary Company and hence no information required to be furnished under Section 197(14) of the Companies Act, 2013.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report of the operations of your Company is provided in a separate Section of this Annual Report and forms part of the Report.

CORPORATE GOVERNANCE

As per Regulation 27 of the SEBI (LODR) Regulations, 2015, a report on Corporate Governance together with the Auditors Certificate regarding compliance of the conditions of Corporate Governance is forms part of this Report.

DISCLOSURE UNDER SEXUAL HARASSEMENT OF WOMAN AT WORK PLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013

The Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013 (the ‘Said Act’) has been made effective from December 9, 2013. This Act is to provide protection against Sexual harassment and for matters connected therewith and incidental threto. The Company has constituted an Internal Compliant Committee (ICC) on 15th May 2014 as required by the said Act. The Company is strongly opposed to sexual harassment and employees are made aware about consequences of such acts and about the constitution of ICC.

During the year under review, no complaints were filed with the committee under the provisions of the said Act.

UNCLAIMED AND UNPAID DIVIDENDS

As on 31st March, 2016 as no amount lying in the unpaid dividends account of the Company.

LISTING

The Securities of your Company are listed with the National Stock Exchange of India Limited and BSE Limited, and pursuant to Regulation 14 of the SEBI (LODR) Regulations 2015, the Annual Listing fees for the year 2015-2016 have been paid to them well before the due date i.e. April 30,2016.

INDUSTRIAL RELATIONS

Your Company firmly believes that people are its most valued resource and their efficiency plays a key role in achieving defined goals and building a competitive work environment. Many initiatives have been taken to support business through organizational efficiency, process change support and various employee engagement programmes

which has helped the Organization achieve higher productivity levels. In its pursuit to attract, retain and develop best available talents, several programmes are regularly conducted at various levels across the Company. Employee relations continued to be cordial and harmonious across all levels and at all the units of the Company.

ACKNOWLEDGEMENT

The Directors place on record their sincere appreciation of the customers, suppliers and investors for the support extended. We also gratefully acknowledge the continued assistance and co-operation extended by Government authorities, financial institutions and banks to the Company.

The Directors wish hereby to place on record their appreciation of the efficient and loyal services rendered by each and every employee, without whom the growth of the Company is unattainable. Your Directors look forward to the long term future with confidence.

By Order of the Board

K. KARTHIK Executive Director DIN: 06846794

P. SHANMUGASUNDARAM Director DIN: 00119411

Coimbatore

30.04.2016