INDIA GLOBALIZATION CAPITAL, INC. AND SUBSIDIARIES

C~~CONSOLI~~ONS~~DATED~~OLIDATED BALANCE SHEETS

As of

December 31, 2010
(unaudited)

March 31, 2010
(audited)

ASSETS
Current assets:
Cash and cash equivalents $ 1,470,191 $ 842,923
Accounts receivable, net of allowances 5,475,428 4,783,327
Inventories 332,345 162,418
Advance taxes 41,452 119,834
Deferred income taxes - 25,345
Dues from related parties 3,125,000 3,114,572
Prepaid expenses and other current assets 1,175,636 2,054,462
Total current assets $ 11,620,052 $ 11,102,881
Goodwill 6,167,301 6,146,720
Property, plant and equipment, net 1,455,742 1,748,436
Investments in affiliates - 8,443,181
Investments in unquoted equity securities 8,443,181 -
Investments-others 1,081,820 810,890
Deferred income taxes 4,575,799 4,075,461
Restricted cash 1,902,996 2,169,939
Other non-current assets 1,702,987 872,184
Total assets $ 36,949,878 $ 35,369,692

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings $ 1,416,196 $ 1,389,041
Trade payables 3,683,297 1,839,405
Accrued expenses 127,804 461,259
Notes payable 3,920,000 4,120,000
Dues to related parties - 149,087
Other current liabilities 63,008 149,942
Total current liabilities $ 9,210,305 $ 8,108,734
Other non-current liabilities 1,102,074 1,107,498
Total liabilities $ 10,312,379 $ 9,216,232

Shares potentially subject to rescission rights (3,307,830 shares issued and outstanding) $ 2,202,421 -

Stockholders' equity:
Common stock — $.0001 par value; 75,000,000 shares authorized; 13,824,207 issued and outstanding as of December 31, 2010 and 12,989,207 issued and outstanding as of March 31, 2010 $ 1,383 $ 1,300
Additional paid-in capital 38,260,358 36,805,724
Accumulated other comprehensive income (2,543,631 ) (2,578,405 )
Retained earnings (Deficit) (12,648,453 ) (9,452,000 )
Total stockholders' equity $ 23,069,657 $ 24,776,619
Non-controlling interest $ 1,365,421 $ 1,376,841
Total liabilities and stockholders' equity $ 36,949,878 $ 35,369,692

~~The accompanying notes should be read in connection with the financial statements.~~

~~Table of Contents~~

~~INDIA GLOBALIZATION CAPITAL, INC. AND SUBSIDIARIES~~

~~CONSOLIDATED STATEMENTS~~ ~~OF OPERATIONS~~

~~(Unaudited)~~

Three months ended December 31

Nine months ended December 31,

2010

2009

2010

2009

     Revenues $ 484,106 $ 5,909,024 $ 3,294,103 $ 13,994,503
     Cost of revenues (457,379 ) (5,326,393 ) (3,053,512 ) (11,829,440 )
Gross profit 26,727 582,631 $ 240,591 $ 2,165,063
     Selling, general and administrative expenses (1,054,894 ) (3,049,603 ) (2,399,503 ) (4,446,137 )
     Depreciation (461,627 ) (101,991 ) (659,002 ) (519,812 )
Operating income (loss) $ (1,489,794 ) $ (2,568,963 ) $ (2,817,914 ) $ (2,800,886 )
     Compensation expenses - (123,139 ) - (123,139 )
     Interest expense (307,630 ) (252,619 ) (718,339 ) (1,019,687 )
     Amortization of debt discount - (178,218 ) (356,436 ) (178,218 )
      Interest income 40,657 37,314 170,438 139,641
      Equity in (gain)/loss of affiliates 16,446 16,446
     Other income, net (25,914 ) 3,570 34,558 6,836
Income before income taxes and minority interest
attributable to non-controlling interest
$ (1,782,681 ) $ (3,065,609 ) $ (3,687,693 ) $ (3,959,007 )
      Income taxes benefit/ (expense) 20,212 103,281 475,226 (54,486 )
Extraordinary items
     Loss on dilution of stake in Sricon
- (3,205,616 ) - (3,205,616 )
Net income/(loss) $ (1,762,469 ) $ (6,167,944 ) $ (3,212,467 ) $ (7,219,109 )
     Non-controlling interests in earnings of subsidiaries 13,451 (7,574 ) 16,014 (72,599 )
Net income / (loss) attributable to common stockholders $ (1,749,018 ) $ (6,175,518 ) $ (3,196,453 ) $ (7,291,708 )
Earnings/(loss) per share attributable to common stockholders:
      Basic and diluted $ (0.12 ) $ (0.06 ) $ (0.23 ) $ (0.11 )
Weighted-average number of shares used in computing earnings per share amounts:
      Basic and diluted 14,750,483 10,242,749 13,814,634 10,166,960

	All amounts in USD except share data
	As of
	June 30, 2011			March 31, 2011
	(unaudited)			(audited)
ASSETS
Current assets:
Cash and cash equivalents		1,177,452			1,583,284
Accounts receivable, net of allowances		2,927,621			3,312,051
Inventories		182,567			133,539
Advance taxes		41,452			41,452
Prepaid expenses and other current assets		2,201,886			1,474,838
Total current assets		6,530,978			6,545,164
Goodwill		403,498			410,454
Property, plant and equipment, net		1,182,380			1,231,761
Investments in affiliates		6,271,815			6,428,800
Investments-others		913,098			877,863
Restricted cash		1,893,839			1,919,404
Other non-current assets		291,873			748,623
Total assets		17,487,481			18,162,069

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings		900,333			901,343
Trade payables		1,583,610			1,311,963
Accrued expenses		273,212			349,149
Notes payable		3,485,254			3,920,000
Other current liabilities		120,703			94,892
Total current liabilities		6,363,112			6,577,347
Other non-current liabilities		792,703			1,209,479
Total liabilities		7,155,815			7,786,826

Shares potentially subject to rescission rights (4,868,590 shares issued and outstanding)		3,082,384			3,082,384

Stockholders' equity:
Common stock — $.0001 par value; 75,000,000 shares authorized; 16,091,843 issued and outstanding as of June 30, 2011 and 14,890,181 issued and outstanding as of March 31, 2011		1,610			1,490
Additional paid-in capital		39,677,590			38,860,319
Accumulated other comprehensive income		(2,491,903	)		(2,502,596	)
Retained earnings (Deficit)		(30,562,110	)		(29,692,907	)
Non-controlling interest		624,095			626,553
Total stockholders' equity		7,249,282			7,292,859
Total liabilities and stockholders' equity		17,487,481			18,162,069

The accompanying notes should be read in connection with the financial statements.

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INDIA GLOBALIZATION CAPITAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	All amounts in USD except share data
	Three months ended June 30,
	2011			2010

Revenues		1,060,247			1,128,411
Cost of revenues (excluding depreciation)		(974,309	)		(983,380	)
Selling, general and administrative expenses		(733,141	)		(580,896	)
Depreciation		(51,244	)		(96,444	)
Operating income (loss)		(698,447	)		(532,309	)
Interest expense		(300,768	)		(213,098	)
Amortization of debt discount		-			(179,910	)
Interest income		67,348			62,887
Equity in (gain)/loss of joint venture		36,219			-
Other income, net		24,694			(150,467	)
Income before income taxes and minority interest attributable to non-controlling interest		(870,954	)		(1,012,897	)
Income taxes benefit/ (expense)		-			421,683
Net income/(loss)		(870,954	)		(591,214	)
Non-controlling interests in earnings of subsidiaries		1,751			40
Net income / (loss) attributable to common stockholders		(869,203	)		(591,174	)
Earnings/(loss) per share attributable to common stockholders:
Basic		(0.04	)		(0.05	)
Diluted		(0.04	)		(0.05	)
Weighted-average number of shares used in computing earnings per share amounts:
Basic		20,359,602			13,256,427
Diluted		20,359,602			13,256,427

The accompanying notes should be read in connection with the financial statements.

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INDIA GLOBALIZATION CAPITAL, INC. AND SUBSIDIARIES

~~CONSOLI~~CO~~DATED~~NSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

Three months ended December 31,

Nine months ended December 31,

2010

2009

2010

2009

Net income / (loss) $ (1,749,018 ) $ (6,175,518 ) $ (3,196,453 ) $ (7,291,708 )
Foreign currency translation adjustments 60,941 2,167,829 34,774 3,357,114
Deconsolidation of Sricon - (1,148,591 ) - (1,148,591 )
Comprehensive income (loss) $ (1,688,077 ) $ (5,156,280 ) $ (3,161,679 ) $ (5,083,185 )
All amounts in USD except share data

	Three months ended June 30,
	2011									2010
	IGC			Non-Controlling Interest			Total			IGC			Non-Controlling Interest			Total
Net income / (loss)		(869,203	)		(1,751	)		(870,954	)		(591,174	)		(40	)		(591,214	)
Foreign currency translation adjustments		10,693			(707	)		9,986			(350,598	)		(43,784	)		(394,382	)
Comprehensive income (loss)		(858,510	)		(2,458	)		(860,968	)		(941,772	)		(43,824	)		(985,596	)

The accompanying notes should be read in connection with the financial statements.

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INDIA GLOBALIZATION CAPITAL, INC. AND SUBSIDIARIES

~~CONSOLI~~CONS~~DATED~~OLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

(Unaudited)

Additional Accumulated Accumulated Other Total

Common Stock
Paid in Earnings Comprehensive Non-Controlling Stockholders’

No of Shares

Amount

Capital

(Deficit)

Income/(loss)

Interest

Equity

Balance at March 31, 2009 10,091,171 $ 1,009 $ 33,186,530 $ (4,662,689 ) $ (4,929,581 ) $ 14,262,606 $ 37,857,875
Stock Option for 1,413,000 grants - - 90,996 - - - 90,996
Issue of 78,820 common stock to officers and directors
78,820 8 39,402 - - - 39,410
Issuance of Common Stock to Red Chip Companies
15,000 2 13,198 - - - 13,200
Issuance of 1,599,000 common stock to institutional investors
1,599,000 160 1,638,690 - - - 1,638,850
Issue of 530,000 common stock to Bricoleur Capital
530,000 53 712,822 - - - 712,875
Issue of 530,000 common stock to Oliveira 530,000 53 586,732 - - - 586,785
Interest exp. towards of 530000 shares towards Bricoleur Capital loan
- - 197,412 - - - 197,412
Interest exp. towards of 530000 shares towards Oliveira loan
- - 162,408 - - - 162,408
Issue of 145,216 common stock under ATM agency agreement
145,216 15 179,874 - - (10,484 ) 169,405
Dividend Option - - (2,340 ) - - - (2,340 )
Loss on Translation - - - - 3,499,767 (2,219,698 ) 1,280,069
Impact of de-consolidation of Sricon - - - - (1,148,591 ) - (1,148,591 )
Elimination of non-controlling interest pertaining to Sricon
- - - - - (10,637,093 ) (10,637,093 )
Net income for non-controlling interest - - - - - (18,490 ) (18,490 )
Net income / (loss) - - - (4,789,311 ) - - (4,789,311 )
Balance at March 31, 2010 (audited) 12,989,207 $ 1,300 $ 36,805,724 $ (9,452,000 ) $ (2,578,405 ) $ 1,376,841 $ 26,153,460
Issuance of common stock 835,000 83 950,450 - - - 950,533
Amortization of interest in debt
- - 359,820 - - - 359,820
Dividend Option Reversed - - 213,381 - - - 213,381
Loss on Translation - - - - 34,774 4,594 39,368
Road show expenses for share issue - - (69,017 ) - - - (69,017 )
Net income for non-controlling interest - - - - - (16,014 ) (16,014 )
Net income / (loss) - - - (3,196,453 ) - - (3,196,453 )
Balance at December 31, 2010 (unaudited) 13,824,207 $ 1,383 $ 38,260,358 $ (12,648,453 ) $ (2,543,631 ) $ 1,365,421 $ 24,435,078

All amounts in USD except share data

	Common Stock
	No of Shares		Amount		Additional Paid in Capital			Accumulated Earnings (Deficit)			Accumulated Other Comprehensive Income/(loss)			Non-Controlling Interest			Total Stockholders Equity

Balance at March 31, 2010		12,989,207		1,300		36,805,724			(9,452,000	)		(2,578,405	)		1,376,841			26,153,460

Issue of equity shares		1,900,974		190		1,761,452			-			-						1,761,642
Interest expense		-		-		359,820			-			-						359,820
Dividend Option Reversed		-				2,340			-			-						2,340
Loss for the quarter		-		-		-			(20,240,907	)		-						(20,240,907	)

Net Income for non-controlling interest		-		-		-			-			-			(769,046	)		(769,046	)
Loss on Translation		-		-		-			-			75,809			18,758			94,567
Road show expense incurred towards raising capital-issue of shares		-		-		(69,017	)		-			-			-			(69,017	)


Balance at March 31, 2011 (audited)		14,890,181		1,490		38,860,319			(29,692,907	)		(2,502,596	)		626,553			7,292,859

Issuance of common stock		1,201,662		120		582,004			-			-			-			582,124
Loss on Translation		-		-		-			-			10,693			(707	)		9,986
Stock options issued		-		-		235,267			-			-			-			235,267
Net income for non-controlling interest		-		-		-			-						(1,751	)		(1,751	)
Net income / (loss)		-		-		-			(869,203	)		-			-			(869,203	)
Balance at June 30, 2011 (unaudited)		16,091,843		1,610		39,677,590			(30,562,110	)		(2,491,903	)		624,095			7,249,282

The accompanying notes should be read in connection with the financial statements.

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INDIA GLOBALIZATION CAPITAL, INC. AND SUBSIDIARIES

~~CONS~~CO~~OLIDATED~~NSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Nine months ended December 31,,

2010

2009
Cash flows from operating activities:
Net income (loss) $ (3,196,453 ) $ (7,291,708 )
Adjustment to reconcile net income (loss) to net cash:
    Non-cash compensation expense 375,758
    Deferred taxes (449,635 ) (68,699 )
    Depreciation 250,324 519,812
    Loss/(gain) on sale of property, plant and equipment 19,503 0
    Non-controlling interest (16,014 ) 72,599
    Amortization of debt discount 359,820 178,219
     Deferred acquisition costs written-off - 1,854,750
     Loss on dilution of stake - 3,205,616
     Loss on extinguishment of loan - 586,785
     Equity and earnings of affiliates - (16,446 )
     Non cash interest  and other expense 296,200 -
    Unrealized exchange differences (17,787 ) -
Changes in:
    Accounts receivable (674,956 ) (5,364,846 )
    Inventories (169,100 ) (389,904 )
     Prepaid expenses and other assets (13,600 ) (94,307 )
    Trade payables 1,834,662 3,621,690
     Other liabilities (96,177 ) 14,503
     Due to / from related parties - 118,344
    Accrued Expenses (333,454 ) (85,935 )
Net cash used in operating activities $ (2,206,667 ) $ (2,763,768 )

Cash flow from investing activities:
Net proceeds from sale of property and equipment $ 2,632 (123,450 )
Deposit towards acquisitions, net of cash acquired - (600,024 )
Investment in Joint Ventures (267,844 ) -
Restricted cash 273,750 (261,232 )
Net cash provided/(used) by investing activities $ 8,538 (984,706 )

Cash flows from financing activities:
Net proceeds / repayment of  cash credit and bank overdraft 22,468 82,097
Proceeds from other short term and long term borrowings - (75,879 )
Repayment of long term borrowings (200,000 ) -
Interest Paid - (72,710 )
Proceeds from notes acquired - 2,000,000
Net proceeds from issue of equity shares 3,001,118 1,777,939
Net cash provided/(used) by financing activities $ 2,823,586 $ 3,711,447
Effects of exchange rate changes on cash and cash equivalents 1,811 (12,632 )
Net increase/(decrease) in cash and cash equivalents 627,268 (49,659 )
Cash and cash equivalent at the beginning of the period 842,923 2,129,365
Cash and cash equivalent at the end of the period $ 1,470,191 $ 2,079,706

All amounts in USD except share data

	Three month ended June 30,
	2011			2010
Cash flows from operating activities:
Net income (loss)		(870,954	)		(591,214	)
Adjustment to reconcile net income (loss) to net cash:
Non-cash compensation expense		235,267			-
Deferred taxes		-			(474,871	)
Depreciation		51,244			96,444
Non-cash financial expense (including amortization of debt discount)		307,514			179,990
Share in profits of joint venture		(36,219	)		-
Unrealized exchange losses/(gains)		(24,163	)		150,836
Changes in:
Accounts receivable		380,930			(1,027,077	)
Inventories		(49,206	)		(28,140	)
Prepaid expenses and other assets		(683,382	)		1,260,845
Trade payables		(601,646	)		(347,725	)
Other current liabilities		900,849			219,623
Other non – current liabilities		(418,218	)		75,054
Non-current assets		459,280			(203,761	)
Accrued Expenses		(76,635	)		(52,289	)
Net cash used in operating activities		(425,339	)		(742,285	)

Cash flow from investing activities:
Purchase of short term investment		(3,235	)		(164,223	)
Restricted cash		23,426			230,200
Net cash provided/(used) by investing activities		20,191			65,977

Cash flows from financing activities:
Net movement in other short-term borrowings		-			(374,614	)
Issuance of equity shares		-			828,991
Net cash provided/(used) by financing activities		-			454,377
Effects of exchange rate changes on cash and cash equivalents		(684	)		(18,735	)
Net increase/(decrease) in cash and cash equivalents		(405,832	)		(240,666	)
Cash and cash equivalent at the beginning of the period		1,583,284			842,923
Cash and cash equivalent at the end of the period		1,177,452			602,257


Supplementary information:

Cash paid for interest		Nil			16,513
Cash paid for taxes		Nil			Nil

The accompanying notes should be read in connection with the financial statements.

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Management believes that the estimates and assumptions used in the preparation of the consolidated financial statements are prudent and reasonable. Significant estimates and assumptions are used for, but not limited ~~to,~~to: allowance for uncollectible accounts ~~receivable,~~receivable; future obligations under employee benefit ~~plans,~~plans; the useful lives of property, plant, ~~equipment,~~equipment; intangible ~~assets,~~assets; the valuation of assets and liabilities acquired in a business ~~combination,~~combination; impairment of goodwill and investments; recoverability of advances; the valuation of options granted and warrants ~~issued~~issued; and income tax and deferred tax valuation allowances. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Critical accounting estimates could change from period to period and could have a material impact on IGC’s results, operations, financial position and cash flows.

Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the consolidated financial statements.

d)	~~Foreign currency translation~~

d) Foreign currency translation

~~The consolidated financial statements are reported in United States dollars (“USD” or “$”).~~ The functional currency of the ~~parent Company IGC and its subsidiary IGC-M is the USD. The functional currency of IGC-IMT, IGC-L, IGC-MPL and TBL~~Company's Indian subsidiaries is the Indian ~~rupee (INR). The translation~~rupee. Our financial statements reporting currency is the United States dollar. Operating and capital expenditures of the ~~functional~~Company's subsidiaries located in India are denominated in their local currency, which is the currency most compatible with their expected economic results.

All transactions and account balances are recorded in the local currency. The Company translates the value of these ~~subsidiaries~~local currency denominated assets and liabilities into ~~USD is performed for balance sheet accounts using~~U.S. dollars at the ~~exchange~~ rates in effect at the balance sheet ~~date and for revenue and expense accounts using month end exchange rate for the respective periods. The gains or losses resulting from such~~date. Resulting translation adjustments are ~~reported under ‘Accumulated~~recorded in stockholders' equity as a component of accumulated other comprehensive ~~income’, a separate component~~income (loss). The local currency denominated statement of ~~Stockholders’ Equity.~~

~~Transactions in foreign currencies~~income amounts are translated into U.S. dollars using the ~~functional currency at~~average exchange rates in effect during the rates of exchange prevailing at the date of the transaction. Monetary assets and liabilities in foreign currencies are translated into the functional currency at the rates of exchange prevailing at the balance sheet date. The gains or losses resulting fromperiod. Realized foreign currency ~~transactions~~transaction gains and losses are included in the ~~statement~~consolidated statements of ~~operations.~~

income. The ~~exchange rates used for translation purposes are as follows:~~

~~Period~~	~~Month End Average Rate (P&L rate)~~	~~Year End Rate (Balance sheet rate)~~
~~Nine months ended December 31, 2009~~	~~INR 48.64 per USD~~	~~INR 46.40 per USD~~
~~Year ended March 31, 2010~~	~~INR 47.91 per USD~~	~~INR 44.95 per USD~~
~~Nine months ended December 31, 2010~~	~~INR 44.95 per USD~~	~~INR 44.80 per USD~~

Company's Indian subsidiaries do not operate in “highly inflationary” countries.

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The exchange rates used for translation purposes are as follows:

e) Period	~~Revenue Recognition~~	Period End Average Rate (P&L rate)	Period End Rate (Balance sheet rate)
Three months ended June 30, 2010		INR 45.68 per USD	INR 46.41 per USD
Year ended March 31, 2011		INR 44.75 per USD	INR 44.54 per USD
Three months ended June 30, 2011		INR 44.56 per USD	INR 44.59 per USD

e) Revenue recognition

The majority of the revenue recognized for the ~~nine month periods~~three months ended ~~December 31,~~June 30, 2011 and 2010 ~~and 2009~~ was derived from the Company’s subsidiaries, ~~as follows:~~which derive revenue from the following sources.

Revenue is recognized when persuasive evidence of an arrangement exists, the sales price is fixed or determinable and collectability is reasonably assured. In government contracting, ~~we recognize~~the Company recognizes revenue when a government consultant verifies and certifies an invoice for payment.

Revenue from sale of goods is recognized when substantial risks and rewards of ownership are transferred to the buyer under the terms of the contract.

For the sale of goods, the timing of the transfer of substantial risks and rewards of ownership is based on the contract terms negotiated with the buyer, e.g., FOB or CIF. IGC considers the guidance provided under SAB 104 in determining revenue from sales of goods. Considerations have been given to all four conditions for revenue recognition under that guidance. The four conditions are:

·	Contract – Persuasive evidence of our arrangement with the customers;

·	Delivery – Based on the terms of the contracts, the Company assesses whether the underlying goods have been delivered and therefore the risks and rewards of ownership are completely transferred;

·	Fixed or determinable price – The Company enters into contracts where the price for the goods being sold is fixed and not contingent upon other factors.

·	Collection is deemed probable – At the time of recognition of revenue, the Company makes an assessment of its ability to collect the receivable arising on the sale of the goods and determines that collection is probable.

Revenue for any sale is recognized only if all of the four conditions set forth above are met. These criteria are assessed by the Company at the time of each sale. In the absence of meeting any of the criteria set out above, the Company defers revenue recognition until all of the four conditions are met.

Revenue from construction/project related activity and contracts for supply/commissioning of complex plant and equipment is recognized as follows:

	a)		Cost plus contracts: Contract revenue is determined by adding the aggregate cost plus proportionate margin as agreed with the customer and expected to be realized.
	b)		Fixed price contracts: Contract revenue is recognized using the percentage completion ~~method. Percentage~~method and the percentage of completion is determined as a proportion of cost incurred-to-date to the total estimated contract cost. Changes in estimates for revenues, costs to complete and profit margins are recognized in the period in which they are reasonably determinable.

In many of the fixed price contracts entered into by the Company, significant expenses are incurred in the mobilization stage in the early stages of the contract. The expenses include those that are incurred in the transportation of machinery, erection of heavy machinery, clearing of the campsite, workshop ground cost, overheads, etc. All such costs are booked to deferred expenses and written off over the period in proportion to revenues earned.

Where the modifications of the original contract are such that they effectively add to the existing scope of the contract, the same are treated as a change orders. On the other hand, where the modifications are such that they change or add an altogether new scope, these are accounted for as a separate new contract. The Company adjusts contract revenue and costs in connection with change orders only when they are approved by both, the customer and the Company with respect to both the scope and invoicing and payment terms.

In the event of claims in our percentage of completion contracts, the additional contract revenue relating to claims is only accounted after the proper award of the claim by the competent authority. The contract claims are considered in the percentage of completion only after the proper award of the claim by the competent authority.

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Full provision is made for any loss in the period in which it is foreseen.

Revenue from property development activity is recognized when all significant risks and rewards of ownership in the land and/or building are transferred to the customer and a reasonable expectation of collection of the sale consideration from the customer exists.

Revenue from service related activities and miscellaneous other contracts are recognized when the service is rendered using the proportionate completion method or completed service contract method.

f)	~~Accounts receivable~~

f) Accounts receivable

Accounts ~~receivables are~~receivable is recorded at the invoiced amount, taking into consideration any adjustments made by government consultants who verify and certify construction and material invoices. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of clients to make required payments. The allowance for doubtful accounts is determined by evaluating the relative credit worthiness of each client, historical collections experience and other information, including the aging of the receivables. The ~~company~~Company did not recognize any bad debt for the ~~nine~~three months ended ~~December 31, 2010~~June 30, 2011 and ~~2009 respectively.~~2010. Unbilled accounts receivable represent revenue on contracts to be billed, in subsequent periods, as per the terms of the related contracts.

g)	~~Accounts Receivable – Long Term~~

~~This is~~Long-term accounts receivables are typically for Build-Operate-Transfer (BOT) contracts. It is money due to the ~~company~~Company by the private or public sector to finance, design, construct, and operate a facility stated in a concession contract over an extended period of time.

h)	g) Inventories

Inventories primarily comprise of finished goods, raw materials, work in progress, stock at customer site, stock in transit, components and accessories, stores and spares, scrap and residue. Inventories are stated at the lower of cost or estimated net realizable value.

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The cost of various categories of inventories is determined on the following basis:

·	Raw ~~Material~~material is valued at weighed average of landed cost (purchase price, freight inward and transit insurance charges).

·	Work in progress is valued as confirmed, valued and certified by the technicians and site engineers and finished goods at material cost plus appropriate share of labor cost and production overheads.

·	Components and accessories, stores erection, materials, spares and loose tools are valued on a first-in-first out basis.

h) Investments

i)	~~Investments:~~

Investments ~~in marketable securities, available for sale:~~ ~~Marketable securities, available for sale~~ are ~~carried~~initially measured at fair value as determined by reference to prevailing market prices. Unrealized gains and losses, net of taxes are excluded from earnings and are reported as a separate component of stockholders' equity until realized. Realized gains and losses from the sale of securities are determined on a specific identification basis on a trade date basis and are included in statement of operations. A decline incost, which is the fair value of any available-for-sale security, below cost, that is deemed to be other than temporary, results in a reduction in carrying amount to fair value. This impairment is charged to statement of operations and a new cos t basisthe consideration given for ~~the security is established.~~

~~Investments in unquoted securities:~~ ~~Investments in unquoted securities are carried at cost and adjusted for declines in value deemed to be other than temporary.~~

~~Investments in associates:~~ them, including transaction costs. The Company's equity in the earnings/(losses) of affiliates is included in the statement of income and the Company's share of net assets of affiliates is included in the balance sheet. Where the Company’s ownership interest in spite of being in excess of 20% is not sufficient to exercise significant influence, the Company has accounted for the investment based on the cost method.

j)	~~Property, Plant and Equipment (PP&E):~~

i) Property, Plant and Equipment (PP&E)

Property and equipment are recorded at cost and depreciated over their estimated useful lives using the straight-line method. The estimated useful lives of assets are as follows:

Buildings	25 years
Plant and machinery	20 years
Computer equipment	3 years
Office equipment	5 years
Furniture and fixtures	5 years
Vehicles	5 years

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Upon disposition, cost and related accumulated depreciation of the property and equipment are ~~removed~~de-recognized from the books of accounts and the gain or loss is reflected in the results of operation. Cost of additions and substantial improvements to property and equipment are capitalized in the books of accounts. The cost of maintenance and repairs of the property and equipment are charged to operating expenses.

k)	~~Impairment of long – lived assets~~

j) Impairment of long – lived assets

The Company reviews its long-lived assets, with finite lives, for impairment whenever events or changes in business circumstances indicate that the carrying amount of assets may not be fully recoverable. Such circumstances include, though are not limited to, significant or sustained declines in revenues or earnings and material adverse changes in the economic climate. For assets that the Company intends to hold for use, if the total of the expected future undiscounted cash flows produced by the assets or subsidiary company is less than the carrying amount of the assets, a loss is recognized for the difference between the fair value and carrying value of the assets. For assets the Company intends to dispose of by sale, a loss is recognized for the amount by which the estimated fair value less cost to sell is less ~~t han~~than the carrying value of the assets. Fair value is determined based on quoted market prices, if available, or other valuation techniques including discounted future net cash flows.

~~Table of Contents~~k)

Earnings per common share

l)	~~Earnings/(loss) per common share~~

~~The Company presents basic and diluted earnings/(loss)~~Basic earnings per share ~~(EPS) data for its common stock. Basic EPS~~ is ~~calculated~~computed by dividing ~~the profit or loss attributable~~net income (loss) applicable to ~~the~~ common stockholders ~~of the Company~~ by the weighted average number of common ~~stock~~shares outstanding ~~during~~for the period. Diluted ~~EPS is determined by adjusting~~earnings per share reflect the ~~profit or loss attributable to common stockholders~~additional dilution from all potentially dilutive securities such as stock warrants and the weighted average number of common stock outstanding adjusted for the effects of all potential dilutive common stock which comprise convertible and redeemable preference shares and share options granted to employees.options.

m)	~~Income taxes~~

l) Income taxes

~~Deferred income~~Income taxes are accounted for under the asset and liability method. The asset and liability method requires the recognition of deferred tax ~~is provided for the differences between the bases of~~ assets and liabilities for the expected future tax consequences attributable to differences between the financial ~~reporting~~statement carrying amounts of existing assets and liabilities and their tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted income tax ~~purposes.~~rates applicable to the period that includes the enactment date. A valuation allowance is ~~established~~recorded when ~~necessary to reduce~~management determines that some or all of the deferred tax assets ~~to the amount expected~~are not likely to be realized. ~~IGC expects to realize sufficient earnings~~

In evaluating a tax position for recognition, management evaluates whether it is more-likely-than-not that a position will be sustained upon examination, including resolution of related appeals or litigation processes, based on technical merits of the position. If the tax position meets the more-likely-than-not recognition threshold, the tax position is measured and profits to utilize deferred tax assets as it begins (1) invoicing its subsidiaries for services and (2) establishes iron ore sales contracts with customers in China and other countries. The Company has obtained contracts for the supply of around $200 million of iron ore to customers in China over a period of 5 years commencing in fiscal year 2011. However since there has been a delayrecognized in the Company’s ~~ability to supply iron ore pursuant to~~financial statements as the ~~above contracts, owing to some regulatory restrictions relating to export~~largest amount of ~~iron ore out~~tax benefit that, in management’s judgment, is greater than 50% likely of ~~India, the Company believes that it would be prudent to create a valuation allowance~~being realized upon settlement. As of June 30, 2011 and 2010, there was no significant liability for ~~the losses of the current quarter.~~income tax associated with unrecognized tax benefits.

n)	m) Cash and Cash Equivalents

For financial statement purposes, the Company considers all highly liquid debt instruments with maturity of three months or less, ~~when purchased~~ to be cash equivalents. The ~~company~~Company maintains its cash in bank accounts in the United States of America, Mauritius and India, which at times may exceed applicable insurance limits. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk on cash and cash equivalent. The ~~company~~Company does not invest its cash in securities that have an exposure to U.S. mortgages.

o)	~~Restricted cash:~~

n) Restricted cash:

Restricted cash consists of deposits pledged to various government authorities and deposits used as collateral with banks for guarantees and letters of credit, given by the Company to its customers or vendors.

p)	~~Fair Value of Financial Instruments~~

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~~At December 31, 2010~~

o) Fair value of financial instruments

As of June 30, 2011 and March 31, ~~2010,~~2011, the carrying amounts of the Company's financial instruments, which included cash and cash equivalents, accounts receivable, unbilled accounts receivable, restricted cash, accounts payable, accrued employee compensation and benefits and other accrued expenses, approximate their fair values due to the nature of the items.

q)	~~Concentration of Credit Risk and Significant Customers~~

p) Concentration of credit risk and significant customers

Financial instruments, which potentially expose the Company to concentrations of credit risk, are primarily comprised of cash and cash equivalents, investments, derivatives, accounts receivable and unbilled accounts receivable. The Company places its cash, investments and derivatives in highly-rated financial institutions. The Company adheres to a formal investment policy with the primary objective of preservation of principal, which contains credit rating minimums and diversification requirements. Management believes its credit policies reflect normal industry terms and business risk. The Company does not anticipate non-performance by the counterparties and, accordingly, does not require collateral.

A significant portion of the Company’s sales is to key customers. Ten such customers accounted for approximately 77% of gross accounts receivable as of June 30, 2011. At ~~December 31,~~June 30, 2010, ~~five~~seven clients accounted for approximately ~~91% of gross accounts receivable. At March 31, 2010, four clients accounted for approximately 68%~~93% of gross accounts receivable.

~~Table of Contents~~q) Accounting for goodwill and related impairment

r)	~~Business combinations~~

The Company accounts for acquired businesses by using the purchase method of accounting and, accordingly, the assets acquired including identifiable intangibles and liabilities assumed are recorded at the date of acquisition at their respective fair values. The cost to acquire a business comprises of cash paid, the fair value of shares issued, amounts that are contingently payable and amounts payable on the basis of earn-out arrangements, deferred consideration and transaction costs. Any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. The primary drivers that generate goodwill are the value of synergies between the acquired entities and the company and the acquired assembled workforce, neither of which qualifies as an identifiable intangible asset.

s)	~~Goodwill / Impairment~~

Goodwill represents the excess cost of an acquisition over the fair value of ~~the Company's~~our share of net identifiable assets of the acquired subsidiary at the date of acquisition. Goodwill on acquisition of subsidiaries is disclosed separately. Goodwill is stated at cost less ~~accumulated amortization and~~ impairment losses incurred, if any.

The Company adopted the provisions of Accounting Standards Codification (“ASC”) 350, “Intangibles – Goodwill and Others”, (previously referred to as SFAS No. 142, "Goodwill and Other Intangible Assets", which sets forth the accounting for goodwill and intangible assets subsequent to their acquisition. ASC 350 requires that goodwill and indefinite-lived intangible assets be allocated to the reporting unit level, which the Company defines as each ~~legal entity.~~

subsidiary. ASC 350 also prohibits the amortization of goodwill and ~~indefinite-life~~indefinite-lived intangible assets upon adoption, but requires that they be tested for impairment at least annually, or more frequently as warranted, at the reporting unit level.

~~The~~As per ASC 350-20-35-4 through 35-19, the impairment testing of goodwill ~~impairment test under ASC 350~~ is ~~performed in two phases.~~a two-step process. The first step of the goodwill impairment test, used to identify potential impairment, compares the fair value of ~~the~~a reporting unit with its carrying amount, including goodwill. If the ~~carrying amount~~fair value of ~~the~~a reporting unit exceeds its ~~fair value,~~carrying amount, goodwill of the reporting unit is considered not impaired, ~~and step two of~~thus the ~~impairment test must be performed. The~~ second step of the impairment test ~~quantifies the amount of the impairment loss by comparing~~is unnecessary. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test shall be performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test, used to measure the amount of impairment loss, compares the implied fair ~~value. An impairment loss is recorded to the extent~~value of reporting unit goodwill with the carrying amount of that goodwill. If the carrying amount of reporting unit goodwill exceeds ~~its~~the implied fair value. of that goodwill, an impairment loss shall be recognized in an amount equal to that excess. The loss recognized cannot exceed the carrying amount of goodwill. After a goodwill impairment loss is recognized, the adjusted carrying amount of goodwill shall be its new accounting basis. Subsequent reversal of a previously recognized goodwill impairment loss is prohibited once the measurement of that loss is completed.

In ASC 350.20.20 a reporting unit is defined as an operating segment or one level below the operating segment. A component of an operating segment is a reporting unit if the component constitutes a business for which discrete financial information is available and segment management regularly reviews the operating results of that component. The Company has determined that IGC operates in a single operating segment. While the CEO reviews the consolidated financial information for the purposes of decisions relating to resource allocation, the CFO, on a need basis, looks at the financial statements of the individual legal entities in India for the limited purpose of consolidation. Given the existence of discrete financial statements at an individual entity level in India, the Company believes that each of these entities constitute a separate reporting unit under a single operating segment.

Therefore, the first step in the impairment testing for goodwill is the identification of reporting units and the allocation of goodwill to these reporting units. Accordingly, TBL, which is one of the legal entities is also considered a separate reporting unit and therefore the Company believes that the assessment of goodwill impairment at the subsidiary level, which is also a reporting unit, is appropriate.

t)	~~Reclassifications~~

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The analysis of fair value is based on the estimate of the recoverable value of the underlying assets. For long lived assets such as land, the Company obtains appraisals from independent professional appraisers to determine the recoverable value. For other assets such as receivables, the recoverable value is determined based on an assessment of the collectability and any potential losses due to default by the counter parties. Unlike goodwill, long lived assets are assessed for impairment only where there are any specific indicators for impairment.

r) Reclassifications

Certain prior ~~year~~period balances have been reclassified to the presentation of the current ~~year.~~period.

s) Recently issued and adopted accounting pronouncements

Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates ("ASU"s) to the FASB's Accounting Standards Codification. The Company considers the applicability and impact of all ASUs. Newly issued ASUs not listed below are expected to have no impact on the Company’s consolidated financial position and results of operations, because either the ASU is not applicable or the impact is expected to be immaterial.

In January 2010, the FASB issued an amendment to the accounting standards related to the disclosures about an entity's use of fair value measurements. Under these amendments, entities will be required to provide enhanced disclosures about transfers into and out of the Level 1 (fair value determined based on quoted prices in active markets for identical assets and liabilities) and Level 2 (fair value determined based on significant other observable inputs) classifications, provide separate disclosures about purchases, sales, issuances and settlements relating to the tabular reconciliation of beginning and ending balances of the Level 3 (fair value determined based on significant unobservable inputs) classification and provide greater disaggregation for each class of assets and liabilities that use fair value measurements. Except for the detailed Level 3 roll-forward disclosures, the new standard was effective for the Company for interim and annual reporting periods beginning after December 31, 2009. The adoption of this accounting standards amendment did not have a material impact on the Company's disclosure or consolidated financial results. The requirement to provide detailed disclosures about the purchases, sales, issuances and settlements in the roll-forward activity for Level 3 fair value measurements is effective for the Company for interim and annual reporting periods beginning after December 31, 2010. The adoption of this accounting standard did not have a material impact on the Company's disclosure or consolidated financial results.

In December 2010, the FASB issued a new accounting standard, which requires that Step 2 of the goodwill impairment test be performed for reporting units whose carrying value is zero or negative. This guidance is effective for fiscal years beginning after December 15, 2010 and interim periods within those years. Our adoption of this standard did not have a material impact on the Company's disclosure or consolidated financial results.

In December 2010, the FASB issued new guidance clarifying some of the disclosure requirements related to business combinations that are material on an individual or aggregate basis. Specifically, the guidance states that, if comparative financial statements are presented, the entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year occurred as of the beginning of the comparable prior annual reporting period only. Additionally, the new standard expands the supplemental pro forma disclosure required by the authoritative guidance to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination in the reported pro forma revenue and earnings. This guidance became effective January 1, 2011. Our adoption of this standard did not have a material impact on the Company's disclosure or consolidated financial results. However, it may result in additional disclosures in the event that we enter into a business combination that is material on either an individual or a consolidated basis.

In May 2011, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2011-04, “Fair Value Measurement: Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS”. This update defines fair value, clarifies a framework to measure fair value and requires specific disclosures of fair value measurements. The guidance is effective for interim and annual reporting periods beginning after January 1, 2012 and is required to be applied retrospectively. The Company does not expect adoption of this guidance to have a material impact on its financial condition or results of operations.

In June 2011, the FASB issued ASU 2011-05, which is now part of ASC 220: “Presentation of Comprehensive Income". The new guidance will require companies to present the components of net income and other comprehensive income either as one continuous statement or as two consecutive statements. It eliminates the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity. The standard does not change the items, which must be reported in other comprehensive income. These provisions are to be applied retrospectively and will be effective for us as of January 1, 2012. Because this guidance impacts presentation only, it will have no effect on our financial condition, results of operations or cash flows.

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NOTE 3 – OTHER CURRENT AND NON-CURRENT ASSETS

Prepaid expenses and other current assets consist of the following:

As of

Dec 31, 2010

March 31, 2010

Prepaid expenses $ 93,534 $ 52,087
Advances to suppliers 741,258 1,231,771
Security and other advances 28,374 -
Discount on issuances of debt - 414,166
Deposits and other current assets 312,470 356,438
$ 1,175,636 $ 2,054,462

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	All amounts in USD except share data
	As of
	June 30, 2011		March 31, 2011

Prepaid expenses		80,950		103,841
Advances to suppliers		1,710,070		1,024,399
Security and other deposits		70,553		85,277
Prepaid Interest		-		159,825
Other current assets		340,313		101,496
		2,201,886		1,474,838

Other non-current assets consist of the following:

					All amounts in USD except share data
	As of				As of
	Dec 31, 2010		March 31, 2010		June 30, 2011		March 31, 2011

Trade and other sundry debtors	$	957,181	$	268,145		142,969		396,275
Other advances		745,806		604,039		148,904		352,348
	$	1,702,987	$	872,184		291,873		748,623

NOTE 4 – SHORT-TERM BORROWINGS

There is no current portion of long-term debt that is classified as short-term borrowings. Short term borrowings consist of the following:

					All amounts in USD except share data
	As of				As of
	Dec 31, 2010		March 31, 2010		June 30, 2011		March 31, 2011

Secured liabilities	$	964,367	$	1,087,775		900,333		901,343
Unsecured liabilities		451,829		301,266		-		-
	$	1,416,196	$	1,389,041		900,333		901,343

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The above ~~secured liabilities are~~debt is secured by hypothecation of materials, stock of spares, ~~Work~~work in ~~Progress,~~progress, receivables and property and equipment, in addition to a personal guarantee of three India-based directors, and ~~are guaranteed~~collaterally secured by ~~personal guarantees~~mortgage of the ~~Company’s Indian subsidiaries’ directors and also secured by a mortgage of company’s~~relevant subsidiary’s land and other ~~immovable~~fixed properties of ~~the~~ directors and their relatives. ~~The average interest rate for these obligations was 12% to 14% for the nine months ended December 31, 2010.~~

~~Unsecured liabilities stated above include $261,222 due to the promoters of TBL. The Company disputes this liability and is currently negotiating with the promoters for a settlement.~~

NOTE 5 – OTHER CURRENT AND NON-CURRENT LIABILITIES

Other current liabilities consist of the following:

As of

Dec 31, 2010

March 31, 2010

Statutory dues payable $ 11,492 $ 35,734
Employee related liabilities 42,490 90,207
Other liabilities 9,026 24,001
$ 63,008 $ 149,942

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	All amounts in USD except share data
	As of
	June 30, 2011		March 31, 2011

Statutory dues payable		18,158		17,745
Employee related liabilities		102,545		77,147
		120,703		94,892

Other non-current liabilities consist of the following:

					All amounts in USD except share data
	As of				As of
	Dec 31, 2010		March 31, 2010		June 30, 2011		March 31, 2011

Sundry creditors	$	1,102,074	$	1,107,498		792,703	$	1,209,479
Provision for expenses		-		-		-
	$	1,102,074	$	1,107,498		792,703	$	1,209,479

Selling, General and Administrative - Selling, general and administrative expenses were ~~$ 1,055~~$733 thousand for the three months ended ~~December 31, 2010~~June 30, 2011 compared to ~~$ 3,050~~$581 thousand for the three months ended ~~December 31, 2009.~~June 30, 2010. The ~~decrease~~increase in selling, general and administrative expenses ~~in absolute terms~~for the current quarter is attributable ~~primarily~~ to the ~~decline in revenue although~~compensation cost arising from the issue of stock options to the directors and employees of the Company ~~continues to incur these expenses on setting up proper infrastructure for administration and other support functions to take advantage of the expected spurt in the mineral trading business.~~

~~Operating Income (loss) -~~ Induring the three months ended ~~December 31, 2010, operating loss~~June 30, 2011. These stock options were fully vested on the date of grant and therefore we have accounted for the entire compensation cost of $235 thousand arising out of the grant of these stock options in the current quarter. No such grants were made in the three months ended June 30, 2010. Other selling, general and administrative expenses include travel, rent, consultancy charges, insurance and legal and professional fees. These have declined by $83 thousand primarily due to the reduction in insurance charges and consultancy fees during the three months ended June 30, 2011.

Depreciation – The depreciation expense was ~~$ 1,490~~$51 thousand in the three months ended June 30, 2011 as compared to $96 thousand in the three months ended June 30, 2010.

Interest and other financial expense – The interest expense and other financial expense for the three months ended June 30, 2011 were $301 thousand compared to ~~an operating loss of $ 2,569~~$393 thousand for the three months ended December 31, 2009. The operating loss in the three months ended December 31, 2010, stem partly due to a decrease in revenue and largely due to increased costs incurred during the initial phases of the quarry. We expect operating income to increase as our revenue ramps up and our quarries become operational.

~~Early extinguishment of debt, interest expense, and amortization of debt discount –~~June 30, 2010. The interest expense ~~and loss on extinguishment of debt~~ for the ~~three months ended December 31, 2010 was $ 308 thousand compared~~two periods primarily relates to ~~$ 431 thousand of~~the interest ~~and amortization of debt discount for~~recorded on the ~~three months ended December 31, 2009. The interest expense are for approximately USD 5,536 thousand of short and~~ long term debt ~~made available~~that has been taken by the parent company. Most of the interest expense continues to ~~the Company. The annual effective rate of interest is 34%, albeit much of it~~be non-cash. If the Company raises additional equity capital and ~~pays off some of~~uses the ~~loans, it can potentially save around $ 400 thousand per quarter, or $ 1,600 thousand~~proceeds to repay the existing long term debt, we expect a ~~year, which would increase our bottom line substantially.~~significant reduction in this interest expense. However, there is currently no guarantee that the Company ~~will be successful in doing~~would do so.

Income tax benefit/(expense) – For the three months ended June 30, 2011, the Company has not recorded any income tax benefit or expense. The ~~provision for income taxes~~Company continues to incur losses on its operations, which have resulted in taxable losses. Therefore, in the absence of any taxable gain, the Company has not recorded an income tax expense. Further, given that the Company has significant carry forward losses, as a matter of prudence, the Company has created a full valuation allowance on all the deductible differences including carry forward losses. However, the Company continues to believe that these would be recoverable in the future. For the three months ended June 30, 2010, the Company recorded a net income tax benefit of ~~$ 20~~$422 thousand, which primarily related to the tax assets created for the carry forward losses incurred during the particular quarter.

Other income – Other income primarily consists of foreign exchange gain arising from the restatement of the inter-company receivables denominated in Indian rupees in relation to payables to the U.S. entity.

Share in profit of joint venture – For the three months ~~period~~ ended ~~December 31, 2010 compared~~June 30, 2011, the Company has recorded an income amounting to ~~benefit of~~ $ ~~103~~36 thousand ~~for~~resulting from its share in the ~~same period~~joint venture that is reflected as another investment in ~~2009. As stated~~the balance sheet. The joint venture primarily operates in ~~our recently filed 10-K, a valuation allowance~~the rock aggregate crushing and trading business. We are also entitled to an interest on the capital that is ~~not taken because of $200 million~~invested in ~~new contracts over 5 years commencing in fiscal year 2011. We believe that newly acquired contracts will generate sufficient taxable income~~this joint venture. During the three months ended June 30, 2011, we have earned interest amounting to ~~utilize our tax assets recorded as of December 31, 2010. However since there~~$32 thousand, which has been ~~a delay~~recorded separately from the share in the supply relating to the above agreement, owing to some regulatory restrictions relating to export of iron ore out of India, the Company believes that the it would be prudent to create a valuation allowance for the losses of the current quarter, We continue to believe that there will be sufficient profits generated over the future periods to utilize completely the tax assets recognizedprofit as ~~at December 31, 2010.~~

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~~Consolidated Net Income (loss) –~~ ~~Consolidated Net loss~~interest income. The joint venture operates one crusher and for the three months ended ~~December 31, 2010 was $ 1,762 thousand compared to a consolidated net loss of $ 6,168 thousand for the three months ended December 31, 2009.~~

~~Cash, cash equivalents, restricted cash and working capital –~~ As on December 31, 2010 the company had $ 3,373 thousand of cash and cash equivalents including restricted cash. Restricted cash is cash in a fixed deposit used to secure a bank guarantee. As of December 31, 2010, the Company had approximately $ 5,099 thousand as working capital.

~~Nine Months Ended December 31, 2010 Compared to Nine Months Ended December 31, 2009~~

~~Revenue -~~ ~~Total~~June 30, 2011, has generated revenue was $ 3,294 thousand for the nine months ended December 31, 2010, as compared to $ 13,995 thousand for the nine months ended December 31, 2009. The revenue reported in December 2010 does not include Sricon revenue, due to the deconsolidation of Sricon effective October 1, 2009. The revenue reported in December 2009 however, includes revenue from Sricon for a period of six months ended September 30, 2009. Eliminating the Sricon revenue in order to make these figures comparable, the decline in revenue for the nine months ended December 31, 2010 as compared to the three months ended December 31, 2009 is primarily due to certain regulatory restrictions relating to export of iron ore out of India.

~~Cost of Revenue~~ - Cost of revenue consists primarily of compensation and related fringe benefits for project-related personnel, department management and all other dedicated project related costs and indirect costs. It also includes the cost associated with buying raw materials. Cost of revenue for the nine months ended December 31, 2010 was $ 3,054 thousand compared to $ 11,829 thousand for the nine months ended December 31, 2009. While the absolute decrease in the cost of revenue is due to the de-consolidation of Sricon effective October 1, 2009, as a percentage of revenue, the cost of revenue increased because the Company has contracts for rock aggregate and iron ore that it is filling before its quarries become fully operational. 60;This practice will continue till our quarries and ore mines are fully functional. At that point, we will fill orders for infrastructure materials from a much-improved cost basis. In the meantime our strategy is to gain market share, establish our brand, and expand the customer base.

~~Selling, General and Administrative~~ - Selling, general and administrative expenses were $ 2,400 thousand for the nine months ended December 31, 2010 compared to $ 4,446 thousand for the nine months ended December 31, 2009. The decrease in selling, general and administrative expenses in absolute terms is attributable primarily to the decline in revenue although the Company continues to incur these expenses on setting up proper infrastructure for administration and other support functions to take advantage of the expected spurt in the mineral trading business.

~~Operating Income (loss) -~~ In the nine months ended December 31, 2010, operating loss was $ 2,818 thousand compared to an operating loss of $ 2,801 thousand for the nine months ended December 31, 2009. The operating loss in the nine months ended December 31, 2010, stem partly due to a decrease in revenue on account of de-consolidation of Sricon and largely due to increased costs incurred during the initial phases of the quarry. We expect to reduce our operating losses and eventually generate operating income to increase as our revenue ramps up and our quarries become operational.

~~Early extinguishment of debt, interest expense, and amortization of debt discount –The interest expense and amortization of debt discount for the nine months ended December 31, 2010 was $ 1,075 thousand as compared to the nine months ended December 31, 2009 which was $ 1,198~~approximating $642 thousand. The interest expense and amortization of debt discount are for approximately $5,536 thousand of short and long term debt made available to the Company. The annual effective rate of interest is 34%, albeit much of it non-cash. If the Company raises equity and pays off some of the loans, it can potentially save around $ 400 thousand per quarter, or $ 1,600 thousand a year, which would increase our bottom line substantially.

~~Income tax benefit/(expense) –~~ The provision for income taxes resulted in a tax benefit of $ 475 thousand in the nine months period ended December 31, 2010 compared to tax expense of $ 54 thousand for the same period in 2009. The decrease in income expense was primarily due to timing differences and tax attributes related to deferred interest expense, NOL’s and foreign tax credits. As stated in our recently filed 10-K, a valuation allowance is not taken because of $200 million in new contracts over 5 years commencing in fiscal year 2011. We believe that newly acquired contracts will generate sufficient taxable income to utilize our tax assets recorded as of December 31, 2010. Refer to our Note-19 Income Taxes to the audited finan cial statements contained in our amended Form 10-K for more details on utilization of tax assets. However since there has been a delay in the supply relating to the above agreement, owing to some regulatory restrictions relating to export of iron ore out of India, the Company believes that it would be prudent to create a valuation allowance for the losses of the current period. We continue to believe that there will be sufficient profits generated over the future periods to utilize completely the tax assets recognized as at December 31, 2010.

Consolidated Net Income (loss) – Consolidated net loss for the ~~nine~~three months ended ~~December 31, 2010~~June 30, 2011 was ~~$ 3,212~~$869 thousand compared to a consolidated net loss of ~~$ 7,292~~$591 thousand for the ~~nine~~three months ended ~~December 31, 2009.~~June 30, 2010.

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Off-Balance Sheet Arrangements

We do not have any investments in special purpose entities or undisclosed borrowings or debt.

Liquidity and Capital Resources

This liquidity and capital resources discussion compares the consolidated company ~~results~~financial position for the ~~nine month~~three-month period ended ~~December 31, 2010~~June 30, 2011 and ~~2009.~~2010.

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Cash used for operating activities from continuing operations is our net loss adjusted for certain non-cash items and changes in operating assets and liabilities. During the ~~nine~~three months ended ~~December 31, 2010,~~June 30, 2011, cash used for operating activities was ~~$ 2,207~~$425 thousand compared to cash used for operating activities of ~~$ 2,764~~$744 thousand during the ~~nine~~three months ended ~~December 31, 2009.~~June 30, 2010. The uses of cash in the ~~nine~~three months ended ~~December 31, 2010~~June 30, 2011 relate primarily to the payment of general operating expenses of our subsidiary companies. The significant contributor to the decrease in this cash flow is the increase in ~~accounts receivables~~prepaid and other current assets and the repayment of certain trade creditors. Further, the losses from our operations have also contributed to this utilization of cash for our operations. This is ~~however~~ partially offset on account of increase in our ~~trade payables.~~other current liabilities, which have also arisen in the normal course of business. While the Company continues to have favorable results in arbitrations, given the nature of the industry and owing to its lengthier operating cycle, the Company takes a relatively longer time to realize these receivables.

During the ~~nine~~three months ended ~~December 31, 2010,~~June 30, 2011, investing activities from continuing operations provided ~~$ 8~~$20 thousand of cash as compared to ~~$ 985~~$66 thousand ~~used~~provided during the ~~comparable~~same period in ~~2009.~~2010. The inflow of cash was primarily due to release of restricted cash during the ~~nine~~three months ~~partially offset by investments in joint ventures during the same period.~~mentioned above.

Financing cash flows from continuing operations generally consist ~~primarily~~ of transactions related to our debt and equity structure. ~~During~~However, there have not been transactions that are to be classified as cash flows from financing activities in the ~~nine~~three months ended December 31, 2010 financing activities provided approximately $ 2,823 thousand, compared to cash provided of approximately $ 3,711 thousand during the comparable period in 2009. The cash generated from financing activity during the current period is primarily on account of the sale of common stock in our at-the-market offering which did not generate significant sales in the nine months ended December 31, 2010 and the sale of common stock and warrants in December 2010.June 30, 2011.

To date, much of cash flow has come from raising additional capital. Our future liquidity needs will depend on, among other factors, stability of construction costs, interest rates, and a continued increase in infrastructure contracts in ~~India~~.India. We ~~believe that our current cash balances and anticipated operating cash flow will be sufficient to fund our normal operating requirements for at least the next 12 months~~. ~~However, we~~ may seek to secure additional capital or debt financing to fund further growth of our business or the repayment of existing debt, in the near term. Due to the risk factors referred to elsewhere in this report and described in detail in our ~~amended~~ Annual Report on Form 10-K for the year ended March 31, ~~2010,~~2011, there can be no assurance that we will be successful in raising such additional capital on acceptable terms or at all. Our ability to obtain additional capital will also depend on market conditions, national and global economies and other factors beyond our control. We cannot be sure that we will be able to implement or capitalize on various financing alternatives. The terms of any equity ~~funding~~or debt financing that we may obtain in the future may be unfavorable to us and to our current stockholders.

~~As further described in the risk factors set forth in Item 1A~~

Purchasers of ~~this Form 10-Q, purchasers of~~our common stock in our ~~at-the-market~~At-The-Market offering after July 14, 2010 and the purchasers of our common stock and warrants in our December 2010 offering may have rescission rights with respect to such purchases. To the extent that such purchasers elect to exercise such rights and are ultimately successful in doing so, it would reduce the cash available for our operations.

Critical Accounting Policies

See Note 2 - Significant Accounting Policies of the Notes to Consolidated Financial Statements in Part I, Item 1 herein for a discussion of critical accounting policies.

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Forward-Looking Statements

This report contains forward-looking statements within the definition of the Private Securities Litigation Reform Act of 1995, including, among others, (a) our expectations about possible business combinations, (b) our growth strategies, (c) our future financing plans, and (d) our anticipated needs for working capital. Forward-looking statements, which involve assumptions and describe our future plans, strategies, and expectations, are generally identifiable by use of the words “may,” “should,” “expect,” “anticipate,” “approximate,” “estimate,” “believe,” “intend,” “plan,” or “project,” or the negative of these words or other variations on these words or comparable terminology. This information may involve known and ~~u nknown~~unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from the future results, performance, or achievements expressed or implied by any forward-looking statements. These statements may be found in this report. Actual events or results may differ from those discussed in forward-looking statements as a result of various factors, including, without limitation, the risks outlined under our “Description of Business” and matters described in this report generally. In light of these risks and uncertainties, the events anticipated in the forward-looking statements may or may not occur. These statements are based on current expectations and speak only as of the date of such statements. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of future events, new information or otherwise.

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The information contained in this report identifies important factors that could adversely affect actual results and performance. All forward-looking statements attributable to us are expressly qualified in their entirety by the foregoing cautionary statements.

Item 3. Quantitative and Qualitative Disclosures about Market Risks

The primary objective of the following information is to provide forward-looking quantitative and qualitative information about our potential exposure to market risks. Market risk is the sensitivity of income to changes in interest rates, foreign exchanges, commodity prices, equity prices, and other market-driven rates or prices. The disclosures are not meant to be precise indicators of expected future losses, but rather, indicators of reasonably possible losses. This forward-looking information provides indicators of how we view and manage our ongoing market risk exposures.

Customer Risk

The Company’s customers are the Indian government, state government, private companies, Indian government owned companies and Chinese steel mills and iron ore traders. Therefore, our business requires that we continue to maintain a pre-qualified status with our clients so we are not disqualified from bidding on future work. The loss of a significant client may have an adverse effect on the Company. Disqualification can occur if, for example, we run out of capital to finish contracts that we have undertaken. ~~The loss of a significant client may have an adverse effect on the Company.~~

Commodity Prices and Vendor Risk

The Company is affected by the availability, cost and quality of raw materials including cement, asphalt, steel, rock aggregate, iron ore and fuel. The prices and supply of raw materials and fuel depend on factors beyond the control of the Company, including general economic conditions, competition, production levels, transportation costs and import duties. The Company typically builds contingencies into ~~its~~the contracts, including indexing key commodity prices into escalation clauses. However, drastic changes in the global markets for raw ~~material~~materials and ~~fuel~~fuels could affect our vendors, which may create disruptions in delivery schedules that could affect our ability to execute contracts in a timely manner. We are taking steps to mitigate some of this risk by attempting to control the supply and quality of raw materials. We do not currently hedge commodity prices on capital markets.

Labor Risk

The building boom in India and the Middle East (India, Pakistan, and Bangladesh export labor to the Middle East) ~~has~~had created pressure on the availability of skilled labor like welders, equipment operators, etc. This has recently changed ~~somewhat~~ with the shortage of financial liquidity and falling oil prices. However, with the expected increase in infrastructure spending, we expect a shortage of skilled ~~labor to be a prevalent condition.~~

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labor.

Compliance, Legal and Operational Risks

We operate under regulatory and legal obligations imposed by the Indian ~~governments, restrictions in China with respect to the import of iron ore~~government and U.S. securities regulators. Those obligations relate, among other things, to the ~~company’s~~Company’s financial reporting, trading activities, capital requirements and the supervision of its employees. For example, we file our financial statements in three countries under three different Generally Accepted Accounting Standards (GAAP). Failure to fulfill legal or regulatory obligations can lead to fines, censure or disqualification of management and/or staff and other measures that could have negative consequences for our activities and financial performance. We are mitigating this risk by hiring local consultants and staff who can manage the compliance ~~i n~~in the various jurisdictions in which we operate. However, the cost of compliance in various jurisdictions could have ana negative impact on our future earnings.

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Interest Rate Risk

The infrastructure development industry is one in which leverage plays a large role. A typical contract requires that we furnish an earnest money deposit, a performance guaranty, and the ability to discount letters of credit. Furthermore, most construction contracts demand that we reserve between 7seven and 11eleven percent of contract value in the form of bank guaranties and/or deposits. Finally, as interest rates rise, our cost of capital increases thus impacting our margins.

Exchange Rate Sensitivity

Our Indian subsidiaries conduct all business in Indian rupees with the exception of foreign equipment that is purchased from the U.S. or Europe. Exchange rates have an insignificant impact on our financial results. However, as we convert from Indian rupees to ~~USD~~U.S. dollars and subsequently report in U.S. dollars, we may see an impact on translated revenue and earnings. Essentially, a stronger ~~USD~~U.S. dollars decreases our reported earnings and a weakening ~~USD~~U.S. dollars increases our reported earnings.

In the analysis below, we have compared the reported revenue and expense numbers for the three months ended June 30, 2011 with the three months ended June 30, 3010 based on the average exchange rate used for the three months ended June 30, 2010 to highlight the impact of exchange rate changes on IGC’s Indian rupee derived revenues and expenses.

	Three months ended June 30,
	2011 (current exchange rate)			2011 (previous year exchange rate)			Change			Percentage
Revenues		1,060,247			1,034,251			25,996			2.51	%
Total expenses before taxes		(1,128,582	)		(1,100,911	)		(27,671	)		2.51	%
		(68,335	)		(66,660	)		(1,675	)

Foreign Currency Translation

IGC mainly operates in India and a substantial portion of the Company’s sales are denominated in the Indian rupee. As a result, changes in the relative values of the U.S. dollar and Indian rupee affect revenues and profits as the results are translated into U.S. dollars in the consolidated and pro forma financial statements.

The accompanying financial statements are reported in U.S. dollars. The Indian rupee is the functional currency for the ~~company.~~Company. The translation of the functional currencies into U.S. dollars is performed for assets and liabilities using the exchange rates in effect at the balance sheet date and for revenues, costs and expenses using average exchange rates prevailing during the reporting periods. Adjustments resulting from the translation of functional currency financial statements to reporting currency are accumulated and reported as other comprehensive income/(loss), a separate component of shareholders’ equity.

The exchange rates used for translation purposes are as follows:

Period	Period End Average Rate (P&L rate)	Period End Rate (Balance sheet rate)
Three months ended June 30, 2010	INR 45.68 per USD	INR 46.41 per USD
Year ended March 31, 2011	INR 44.75 per USD	INR 44.54 per USD
Three months ended June 30, 2011	INR 44.56 per USD	INR 44.59 per USD

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Item ~~4T.~~ 4. Controls and Procedures

~~Evaluation of~~ Disclosure ~~Controls~~controls and ~~Procedures:~~ ~~Pursuant~~procedures are processes and procedures designed to ~~Rule 13a-15(b)~~ensure that information required to be disclosed is recorded, processed, summarized and reported within the time periods, as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, ~~(“Exchange~~as amended (the “Exchange Act”),. As of June 30, 2011, management conducted an evaluation (under the ~~Company carried out an evaluation,~~supervision and with the participation of the ~~Company’s management, including the Company’s Chief Executive Officer (“CEO”)~~chief executive officer and the ~~Principal Accounting Officer (“PAO”) (the Company’s~~ principal ~~financial and~~ accounting officer), pursuant to Rules 13a-15(e) or 15d-15(e) promulgated under the Exchange Act, of the effectiveness of the Company’s disclosure controls and procedures as of June 30, 2011. As part of such evaluation, management considered the matters discussed below relating to internal control over financial reporting. A material weakness in internal control over financial reporting (as defined ~~under Rule 13a-15(e) under the Exchange Act) as~~in Auditing Standard No. 5 of the ~~end~~Public Company Accounting Oversight Board) is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the ~~period covered~~annual or interim financial statements will not be prevented or detected by ~~this report, December 31, 2010. In conducting~~ the ~~evaluation, the CEO and PAO took into account the fact that on~~entity’s internal control.

On January 19, 2011, the ~~Securities and Exchange Co mmission~~SEC notified the Company ~~that~~of a material weakness with the financial statements filed with the Company’s initial Form 10-K for the fiscal year ended March 31, 2010 because it did not comply with ~~the requirements of~~ Rule 2-02 under Regulation S-X for audited financial statements, as a result of a qualification in the auditor’s report with respect to the deconsolidation of Sricon.

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~~Based upon that evaluation,~~ Such report has been filed without such qualification in Amendment No. 1 to the Company’s ~~CEO~~Form 10-K for the fiscal year ended March 31, 2010. After a review of the circumstances, the Chief Executive Officer and ~~PAO were~~Principal Accounting Officer are now unable to conclude that ~~as of December 31, 2010~~ the Company’s disclosure controls and procedures were effective as of June 30, 2011. The Company’s disclosure controls and procedures failed to ~~ensure that information required to be disclosed~~identify and address the issue noted by the ~~Company in~~SEC regarding the ~~reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and~~audit report.

Further, as previously reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure. We plan to take measures to address the deficiency by hiring or engaging as consultants additional accounting personnel with requisite experience with SEC accounting requirements to ass ist in the Company’s ~~disclosure process.~~Current Report on Form 8-K filed on June 15, 2011, the Board of Directors of the Company, based on the recommendation of the Audit Committee and in consultation with the independent accountants, concluded that the Company’s previously issued financial statements for the fiscal years ended March 31, 2010 and the fiscal quarter of December 2009 should be restated to correct certain identified errors. Accordingly, the Company has restated its previously issued financial statements for the fiscal years ended March 31, 2010 and the fiscal quarter of December 2009.

Changes in Internal Control ~~Over~~over Financial Reporting

There have not been any changes in the Company's internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal period to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. ~~As noted above,~~However, the Company has taken steps to rectify the material weaknesses with the financial statements filed with the Company’s initial Form 10-K for the fiscal year ended March 31, 2010. The Company’s management has heightened its diligence in addressing the Company’s disclosure controls and, throughout the period subsequent to the identification of such material weakness, management has added and is in the process of adding additional measures to improve and evaluate the effectiveness of its controls over financial reporting. These measures include the completion of checklists by the Company, its securities counsel and its independent auditors with respect to the accounting and reporting standards, engaging external experts of U.S. GAAP to assist in the preparation and review of financial statements, and getting a subscription to an online knowledge base to provide the latest updates on U.S. GAAP and other accounting and disclosure matters. The Company also intends to provide U.S. GAAP and reporting training for our India-based internal accounting staff. Currently, we continue to rely on manual steps for the consolidation of our financial statements and expect to address the systems aspects in the future as part of our continued effort to eliminate errors and significantly remediate deficiencies in our internal controls over financial reporting. The Company intends to hire or engage as consultants additional accounting personnel with requisite experience with SEC accounting requirements to assist in the Company’s disclosure process.

The Company’s management, including the Company’s CEO and CFO, does not expect that the Company’s internal control over financial reporting will prevent all errors and all fraud. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree or compliance with the policies or procedures may deteriorate.

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~~PART II – OTHER INFORMATION~~

~~Item 1. Legal~~ ~~Proceedings~~

~~None.~~

~~Item 1A. Risk~~ ~~Factors~~

Set forth below and elsewhere in this report and in other documents we file with the SEC are descriptions of the risks and uncertainties that could cause our actual results to differ materially from the results contemplated by the forward-looking statements contained in this report. The description below reflects any material changes to the risk factors affecting our business previously discussed in Part I, Item 1A “Risk Factors” of our amended Annual Report on Form 10-K for the fiscal year ended March 31, 2010.

~~The following risk factors supersede the description of the risk factors in our amended Annual Report on Form 10-K for the fiscal year ended March 31, 2010 bearing the corresponding headings:~~

~~A change in government policy, a downturn in the Indian or Chinese economy, or a natural disaster could adversely affect our business, financial condition, results of operations and future prospects.~~

Our construction business is dependent on the central government of India, as well as, the Indian state governments for contracts. Our operations and financial results may be affected by changes in the government’s policy toward building infrastructure. In addition, the recent slowdown in the Indian economy has caused a tightening of credit and a slowdown of companies bidding on government contracts. We foresee no immediate changes to government policy or market conditions that would adversely affect our ability to conduct business other than limited access to credit and believe that government support for infrastructure spending will remain strong but we remain subject to possible changes in Indian government and monetary policies and regulations, which are beyond our control.

The Indian government currently bans the export of ore that has a Ferrous content of 64% or more, preferring to keep that high grade ore for the production of steel in India. The Indian government could further curtail the export of iron ore, thereby hampering our business. If the Government were to impose a ban on the export of lesser quality ore, we would likely be forced to service our customers from sources other than India. In addition, the government of Karnataka state has banned the transportation and export of iron ore from 10 ports on the west coast of India due to allegations of illegal mining, storage, and transportation. The ban was initially upheld by the Karnataka High Court until regulatory action could be implemented to reduce the illegal activity. Iron ore ex porters appealed the ban to the Indian Supreme Court which ruled on February 11, 2011 that if Karnataka state does not pass new legislation governing iron ore exports by March 31, 2011 the court will lift the ban on exports. Currently, a significant portion of our iron ore exports, along with other companies operating from Kamataka have been halted by the ban.

The Chinese government has imposed a ban on the import of low grade iron ore by traders in China. This ban does not extend to Chinese steel mills with licenses to import iron ore. We have generally been in the business of exporting ore with Ferrous content between 55% and 58% (low grade). The ban on the import of low quality ore by China has forced us to look for customers that are steel mills, which we have done, and shift the business to exporting higher quality ore, which we are now doing. We have shifted our business to exporting ore with Ferrous content between 61% and 63.5% (high quality ore). However, further restrictions on the import of iron ore by the Chinese government could adversely affect our business and results of operations.

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~~Additional capital may be costly or difficult to obtain.~~

Additional capital, whether through the offering of equity or debt securities, may not be available on reasonable terms or at all. If we are unable to obtain required additional capital, we may have to curtail our growth plans or cut back on existing business. Furthermore, we may not be able to continue operating if we do not generate sufficient revenues from operations needed to stay in business. We may incur substantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing and distribution expenses and other costs. These costs may be increased by our current inability to use a short-form registration statement on Form S-3 which will increase the costs and timing for any registered offering of our securities. In addition, to the extent that we are unable to provide timely reporting of our financial results it may further impair our ability to raise capital. We may also be required to recognize non-cash expenses in connection with certain securities we issue, such as, convertible notes and warrants, which may adversely impact our financial condition.

Although we are required to use our best efforts to have an effective registration statement covering the issuance of the shares underlying the public warrants at the time that our warrant holders exercise their public warrants, we cannot guarantee that a registration statement will be declared effective, in which case our warrant holders may not be able to exercise our public warrants and such warrants may expire worthless.

We have issued warrants to purchase our common stock in three public offerings: our initial public offering in March 2006, a registered direct offering in September 2009 and a public offering in December 2010. In the absence of an applicable exemption, holders of warrants issued in our public offerings will be able to exercise the warrants only if a current registration statement under the Securities Act of 1933 relating to the shares of our common stock underlying the warrants is then effective. Although we have undertaken in the respective warrant agreements relating to such warrants, and therefore have a contractual obligation, to use our best efforts to maintain a current registration statement covering the shares underlying the public warrants to the extent required by federal securities laws, and we intend to comp ly with such undertaking as soon as possible, we do not have such a registration statement currently effective and we cannot assure the warrant holders that we will be able to do so in the future. We are currently ineligible to register the warrants on a short-form registration on Form S-3 which will likely increase the time it will take to obtain an effective registration statement for exercise of the warrants. If we fail to comply with our contractual obligations we could be liable to the holders of the warrants. In no event shall we be liable for, or any registered holder of any warrant be entitled to receive, (a) physical settlement in securities unless the conditions and requirements set forth in the warrant agreement have been satisfied, or (b) any net-cash settlement or other consideration in lieu of physical settlement in securities (provided that the holders of the warrants issued in our September 2009 and December 2010 offerings are entitled to cash payments if we fail to deli ver shares issuable upon exercise of the warrants in a timely fashion). The value of the public warrants may be greatly reduced if a registration statement covering the shares issuable upon the exercise of the warrants is not kept current. Such warrants may even expire worthless. The warrants issued in our initial public offering currently expire on March 3, 2011, but we currently intend to exercise our right to extend the terms of those warrants. The warrants issued in our September 2009 and December 2010 offerings expire on September 18, 2012 and December 8, 2017 respectively. The outstanding warrants issued in our September 2009 and December 2010 offerings, currently exercisable for an aggregate of 1,117,410 shares of common stock, give the holders of such warrants the right to exercise the warrants on a cashless basis if at the time of exercise there is not an effective registration statement available for the issuance of the shares issuable upon exercise of the war rants. We would not receive any proceeds from the cashless exercise of the warrants.

With respect to any warrants sold by us in private placements pursuant to an exemption from registration requirements under the federal securities laws, the holders of the warrants sold in such private placements would be able to exercise their warrants even if, at the time of exercise, a prospectus relating to the common stock issuable upon exercise of such warrants is not current. As a result, the holders of the warrants purchased in the private placements would not have any material restrictions with respect to the exercise of their warrants.

~~The following risk factor supplements the risk factors set forth in our amended Annual Report on Form 10-K for the fiscal year ended March 31, 2010.~~

The issuance of certain of securities by us may not have been made in compliance with the federal and state securities laws, which exposes us to potential liabilities, including potential rescission rights.

On July 14, 2010 we filed our Form 10-K for the fiscal year ended March 31, 2010. The Form 10-K contained audited financial statements included a qualified opinion from our auditors pending completion of their audit procedures in respect of the deconsolidation of one of our subsidiaries. We subsequently filed an amended Form 10-K which includes an unqualified audit opinion.

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On January 19, 2011, the Securities and Exchange Commission (the "Commission") notified us that the initial financial statements filed on July 14, 2010 did not comply with the requirements of Rule 2-02 under Regulation S-X for audited financial statements because the financial statements contained a qualified opinion. As noted above, the amended Form 10-K filed on January 28, 2011 contains audited financial statements with an unqualified opinion that comply with Rule 2-02. The Commission has indicated that as the initial Form 10-K filed on July 14, 2010 was materially deficient as a result of the inclusion of the qualified audit opinion. It was therefore deemed not to have been filed with the Commission in accordance with applicable requirements, thus making us delinquent in its filings with the Commission.

The Commission has informed us that as a result of the deemed failure to timely file a Form 10-K, it is the Staff's view that as of July 14, 2010 we ceased to be eligible to use SEC Form S-3 for the registration of the Company's securities. As the financial statements included in the original Form 10-K were also included in a registration statement on Form S-1 (File No. 333-163867) pursuant to which we offered its common stock and warrants to purchase common stock in December 2010 (the "December 2010 Offering"), the Commission has also indicated that such registration statement failed to comply with the requirements of Form S-1 due to the lack of the inclusion of unqualified audited financial statements in compliance with Commission requirements.

Since the Commission has informed us that it is the Commission's view that as of July 14, 2010 we ceased to be eligible to use Form S-3 for the registration of our securities, it is possible that any sales of our securities pursuant to our registration statements on Form S-3 since July 14, 2010 may be deemed to be unregistered sales of its securities. Since July 14, 2010, we have sold an aggregate of 2,189,660 shares of its common stock for an aggregate gross price of $1,640,004 pursuant to an at-the-market offering ("ATM") of its common stock on Form S-3 (File No. 333-160993) in sales that occurred between September 7, 2010 and January 18, 2011. In addition, we may be deemed to have made unregistered sales of the 2,575,830 shares of common stock and warrants to purchase an aggregate of 858,610 shares of common stock at an e xercise price of $0.90 per share sold for an aggregate gross purchase price of $1,545,498 sold pursuant to such registration statement with respect to the December Offering.

If it is determined that persons who purchased our securities after July 14, 2010 purchased securities in an offering deemed to be unregistered, then such persons may be entitled to rescission rights. In addition, the sale of unregistered securities could subject us to enforcement actions or penalties and fines by federal or state regulatory authorities. We are unable to predict the likelihood of any claims or actions being brought against us related to these events, and there is a risk that any may have a material adverse effect on us. To date, we have not received any rescission requests.PART II – OTHER INFORMATION

Item 1. Legal Proceedings

In January 2011, one of our subsidiaries, IGC-M, initiated legal proceedings against the Sricon management requesting the Company Law Board in India to stay any transactions, such as purchase, sale or a further creation of charge on Sricon’s fixed properties including land and plant and machinery, citing mismanagement of company affairs by the present management. IGC-M has also sued for recovery of the investment in Sricon and suitable compensation thereon. Subsequently, in January 2011, the Company received a favorable order from the Company Law Board granting the requested stay. The proceedings for the recovery of investment and a suitable compensation are currently pending adjudication at the Company Law Board, Mumbai.

Item 1A. Risk Factors

There have been no material changes from the risk factors previously disclosed in the Company’s 2011 Annual Report.

Item 2. Unregistered Sales of Equity Securities

~~On July 14, 2010~~During the ~~Company filed its audited financial statements on Form 10-K for the FYE March 31, 2010 that included~~three-month period ended June 30, 2011, we issued a ~~qualified opinion from the Company's auditors pending completion~~total of ~~their audit procedures in respect of the deconsolidation of one of the Company's subsidiaries. The Company subsequently filed an amended Form 10-K which includes an unqualified audit opinion.~~

On January 19, 2011, the Securities and Exchange Commission (the "Commission") notified the Company that the initial financial statements filed on July 14, 2010 did not comply with the requirements of Rule 2-02 under Regulation S-X for audited financial statements because the financial statements contained a qualified opinion. As noted above, the amended 10-K filed on January 28, 2011 contains audited financial statements with an unqualified opinion that comply with Rule 2-02. The Commission has indicated that as the initial Form 10-K filed on July 14, 2010 was deficient as a result of the inclusion of the qualified audit opinion. It was therefore deemed not to have been filed with the Commission in accordance with applicable requirements, thus making the Company delinquent in its filings with the Commission.

The Commission has informed the Company that as a result of the deemed failure to timely file a Form 10-K, it is the Staff's view that as of July 14, 2010 the Company ceased to be eligible to use SEC Form S-3 for the registration of the Company's securities. As the financial statements included in the original Form 10-K were also included in a registration statement on Form S-1 (File No. 333-163867) pursuant to which the Company offered its common stock and warrants to purchase common stock in December 2010 (the "December 2010 Offering"), the Commission has also indicated that such registration statement failed to comply with the requirements of Form S-1 due to the lack of the inclusion of unqualified audited financial statements in compliance with Commission requirements.

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Since the Commission has informed the Company that it is the Commission's view that as of July 14, 2010 the Company ceased to be eligible to use Form S-3 for the registration of the Company's securities, it is possible that any sales of the Company's securities pursuant to the Company's registration statements on Form S-3 since July 14, 2010 may be deemed to be unregistered sales of its securities. Since July 14, 2010, the Company has sold an aggregate of 2,189,660 shares of its common stock for an aggregate gross price of $1,640,004 pursuant to an at-the-market offering ("ATM") of its common stock on Form S-3 (File No. 333-160993) in sales that occurred between September 7, 2010 and January 18, 2011 including 816,900 shares sold for an aggregate gross price of $656,509 between October 1, 2010 and December 31, 2010. In addition, the Co mpany may be deemed to have made unregistered sales of the 2,575,8301,201,662 shares of common stock ~~and warrants~~ to purchase an aggregate of 858,610 shares of common stock at an exercise price of $0.90 per share sold for an aggregate gross purchase price of $1,545,498 sold pursuant to such registration statement with respect to the December Offering.

If it is determined that persons who purchased the Company's securities after July 14, 2010 purchased securities in an offering deemed to be unregistered, then such persons may be entitled to rescission rights. In addition, the sale of unregistered securities could subject the Company to enforcement actions or penalties and fines by federal or state regulatory authorities. We are unable to predict the likelihood of any claims or actions being brought against the Company related to these events, and there is a risk that any may have a material adverse effect on us.

~~In addition to the sales described above, we made the following sales of unregistered securities during the 3 months ended December 31, 2010:~~

During the period ended December 31, 2010 we issued 9,500 shares of common stock to American Capital Ventures and 5,500 shares of common stock to Maplehurst Investment Group pursuant to an investor relations agreement with American Capital Ventures dated July 20, 2010 providing for the issuance of 15,000 shares of our common stock to American Capital Ventures or its designees for services rendered. These transactions were exempt from registration under the Securities Act pursuant to Section 4(2) of the Securities Act, which exempts private issuances of securities in which the securities are not offered or advertised to the general public. No underwriting discounts or commissions were paid with respect to such sale. As the shares were issued for services we received no cash proceeds for the issuance of the shares.

~~In December 2010 we issued 200,000 shares of common stock to each of the~~ Steven M. Oliveira 1998 Charitable Remainder Unitrust as payment of a total of $582,134 as interest and ~~Bricoleur Partners, L.P. as consideration~~principal for the ~~extension of~~loan under the ~~loans under~~ promissory ~~notes~~note issued to the ~~respective investors.~~investor. These transactions were exempt from registration under the Securities Act pursuant to Section 4(2) of the Securities Act, which exempts private issuances of securities in which the securities are not offered or advertised to the general public. No underwriting discounts or commissions were paid with respect to such sales. We received no cash proceeds for the issuance of the shares.

Item 3. Defaults Upon Senior Securities

None.

Item 4. (Removed and Reserved)

Item 5.5. Other Information

None.

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Item 6. Exhibits

~~1.1~~3.1	~~Co-Placement Agency Agreement between the Registrant, Source Capital Group, Inc.~~	Amended and ~~Boenning & Scattergood, Inc.~~Restated Articles of Incorporation (1)*

3.2		Bylaws (2)

4.1		Specimen Warrant Certificate ~~(2)~~(3)*

4.2		Warrant Agreement between Continental Stock Transfer & Trust Company and the Registrant. ~~(2)~~(1)*

31.1		~~Certificate Pursuant~~Certification of Chief Executive Officer pursuant to 17 CFR 240.13a-14(a).18 U.S.C. Section 1350, as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002.

31.2		~~Certificate Pursuant~~Certification of Chief Financial Officer pursuant to 17 CFR 240.13a-14(a).18 U.S.C. Section 1350, as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002.

32.1		~~Certificate Pursuant~~Certification of Chief Executive Officer pursuant to 18 U.S.C. § 1350.Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.

32.2		~~Certificate Pursuant~~Certification of Chief Financial Officer pursuant to 18 U.S.C. § 1350.Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.

101		Attached as Exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets as of June 30, 2011 and March 31, 2011, (ii) Consolidated Statements of Operations for the three months ended June 30, 2011 and 2010, (iii) Consolidated Statements of Comprehensive income (loss) for the three months ended June 30, 2011 and 2010, (iv) Consolidated Statements of Stockholders Equity (Deficit) for the three months ended June 30, 2011, (v) Consolidated Statements of Cash Flow for the three months ended June 30, 2011 and 2010, and (vi) Notes to Condensed Consolidated Financial Statements for the six months ended June 30, 2011. In accordance with Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to Quarterly Report on Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, and shall not be deemed “filed” or part of any registration statement or prospectus for purposes of Section 11 or 12 under the Securities Act or the Exchange Act, or otherwise subject to liability under those sections, except as shall be expressly set forth by specific reference in such filing.

101.INS		XBRL Instance Document**

101.SCH		XBRL Taxonomy Extension Schema Document**

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document**

101.LAB		XBRL Taxonomy Extension Label Linkbase Document**

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document**

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document**

(1)	Incorporated by reference to the Registrant’s Registration Statement on Form S-1 (SEC File No. 333-124942), as amended and filed on September 22, 2006.
(2)	Incorporated by reference to the Registrant’s Registration Statement on Form S-1 (SEC File No. 333-124942), as amended and filed on February 14, 2006.
(3)	Incorporated by reference to the Registrant’s Registration Statement on Form S-1 (SEC File No. ~~333-163867)~~333-124942), as amended and filed on ~~November 10, 2010.~~
~~(2)~~	~~Incorporated by reference to the Registrant’s Registration Statement on Form S-1 (SEC File No. 333-163867), as amended and filed on October 27, 2010.~~May 13, 2005.

*	Filed as an exhibit hereto.
**	~~Furnished as an exhibit hereto. These certificates are furnished~~In accordance with Regulation S-T, the XBRL-related information in Exhibit 101 to ~~but~~this Annual Report on Form 10-Q shall ~~not~~ be deemed to be ~~filed with, the Securities~~"furnished" and ~~Exchange Commission.~~not "filed."

Table of Contents

~~SIGN~~SIGNA~~ATURES~~TURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	INDIA GLOBALIZATION CAPITAL, INC.

Date: ~~February 22,~~August 18, 2011	By:	/s/ Ram Mukunda
		Ram Mukunda
		Chief Executive Officer and President (Principal Executive Officer)



Date: ~~February 22,~~August 18, 2011	By:	/s/ John B. Selvaraj
		John B. Selvaraj
		Treasurer, Principal Financial and Accounting Officer

Table of Contents

Title of Each Class	Name of exchange on which registered
Units, each consisting of one share of Common Stock	NYSE Amex
and two Warrants
Common Stock	NYSE Amex
Common Stock Purchase Warrants	NYSE Amex

Large Accelerated Filer o	Accelerated Filer o
Non-Accelerated Filer o (Do not check if a smaller reporting company)	~~Non-Accelerated Filer~~o ~~(Do not check if a smaller reporting company)~~ Smaller reporting companyþ

Class	Shares Outstanding as of ~~December 31, 2010~~August 8, 2011
Common Stock, $.0001 Par Value	~~17,132,037~~20,960,433

							All amounts in USD except share data
	As of						As of
	Dec 31, 2010			March 31, 2010			June 30, 2011		March 31, 2011

Land	$	10,870		$	10,870			10,967		10,870
Buildings		173,476			172,935			351,343		351,147
Plant and machinery		3,250,617			3,253,444			3,328,753		3,335,065
Furniture and fixtures		88,656			88,860			88,595		87,768
Computer equipment		209,360			209,012			213,640		213,178
Vehicles		480,650			478,749			483,319		479,478
Office equipment		164,333			161,680			170,505		167,563
Capital work-in-progress		136,898			136,440			137,546		137,696
	$	4,514,860		$	4,511,990			4,784,668		4,782,765
Less: Accumulated depreciation		(3,059,118	)		(2,763,554	)		(3,602,288)		(3,551,004	)
	$	1,455,742		$	1,748,436			1,182,380		1,231,761

Expected life of options	Granted in 2009 5 years			Granted in the current quarter 5 years
Vested options		100	%		100	%
Risk free interest rate		1.98	%		4.10	%
Expected volatility		35.35	%		83.37	%
Expected dividend yield	Nil			Nil

þ		Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
		For the quarterly period ended ~~December 31, 2010~~June 30, 2011


o		Transition report under Section 13 or 15(d) of the Exchange Act of 1934.


		Page
PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements	3
	Consolidated Balance Sheets as of ~~December 31, 2010~~June 30, 2011 (unaudited) and March 31, ~~2010~~2011	3
	Consolidated Statements of Operations (unaudited) for the three months ended June 30, 2011 and ~~nine months ended December 31,~~ 2010 ~~and 2009~~	4
	Consolidated Statements of Comprehensive income (loss) for the three months ended June 30, 2011 and ~~nine months ended December 31,~~ 2010 ~~and 2009~~ (unaudited)	5
	Consolidated Statements of Stockholders (Deficit) Equity for the ~~nine~~three months ended ~~December 31, 2010(unaudited)~~June 30, 2011 (unaudited)	6
	Consolidated Statements of Cash Flows (unaudited) for the ~~nine~~three months ended ~~December 31,~~June 30, 2011 and 2010 ~~and 2009~~	7
	Notes to Consolidated Financial Statements (unaudited)	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2124
Item 3.	Quantitative and Qualitative Disclosures About Market Risks	3032
Item ~~4T.~~4.	Controls and Procedures	3134

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	3335
Item 1A.	Risk Factors	3335
Item 2.	Unregistered Sales of Equity Securities	35
Item 3.	Defaults Upon Senior Securities	3635
Item 4.	(Removed and Reserved)	3635
Item 5.	Other Information	3635
Item 6.	Exhibits	36

	Signatures	37

	As of
	December 31, 2010 (unaudited)			March 31, 2010 (audited)

ASSETS
Current assets:
Cash and cash equivalents	$	1,470,191		$	842,923
Accounts receivable, net of allowances		5,475,428			4,783,327
Inventories		332,345			162,418
Advance taxes		41,452			119,834
Deferred income taxes		-			25,345
Dues from related parties		3,125,000			3,114,572
Prepaid expenses and other current assets		1,175,636			2,054,462
Total current assets	$	11,620,052		$	11,102,881
Goodwill		6,167,301			6,146,720
Property, plant and equipment, net		1,455,742			1,748,436
Investments in affiliates		-			8,443,181
Investments in unquoted equity securities		8,443,181			-
Investments-others		1,081,820			810,890
Deferred income taxes		4,575,799			4,075,461
Restricted cash		1,902,996			2,169,939
Other non-current assets		1,702,987			872,184
Total assets	$	36,949,878		$	35,369,692

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings	$	1,416,196		$	1,389,041
Trade payables		3,683,297			1,839,405
Accrued expenses		127,804			461,259
Notes payable		3,920,000			4,120,000
Dues to related parties		-			149,087
Other current liabilities		63,008			149,942
Total current liabilities	$	9,210,305		$	8,108,734
Other non-current liabilities		1,102,074			1,107,498
Total liabilities	$	10,312,379		$	9,216,232

Shares potentially subject to rescission rights (3,307,830 shares issued and outstanding)	$	2,202,421			-

Stockholders' equity:
Common stock — $.0001 par value; 75,000,000 shares authorized; 13,824,207 issued and outstanding as of December 31, 2010 and 12,989,207 issued and outstanding as of March 31, 2010	$	1,383		$	1,300
Additional paid-in capital		38,260,358			36,805,724
Accumulated other comprehensive income		(2,543,631	)		(2,578,405	)
Retained earnings (Deficit)		(12,648,453	)		(9,452,000	)
Total stockholders' equity	$	23,069,657		$	24,776,619
Non-controlling interest	$	1,365,421		$	1,376,841
Total liabilities and stockholders' equity	$	36,949,878		$	35,369,692

	Three months ended December 31						Nine months ended December 31,
	2010			2009			2010			2009

Revenues	$	484,106		$	5,909,024		$	3,294,103		$	13,994,503
Cost of revenues		(457,379	)		(5,326,393	)		(3,053,512	)		(11,829,440	)
Gross profit		26,727			582,631		$	240,591		$	2,165,063
Selling, general and administrative expenses		(1,054,894	)		(3,049,603	)		(2,399,503	)		(4,446,137	)
Depreciation		(461,627	)		(101,991	)		(659,002	)		(519,812	)
Operating income (loss)	$	(1,489,794	)	$	(2,568,963	)	$	(2,817,914	)	$	(2,800,886	)
Compensation expenses		-			(123,139	)		-			(123,139	)
Interest expense		(307,630	)		(252,619	)		(718,339	)		(1,019,687	)
Amortization of debt discount		-			(178,218	)		(356,436	)		(178,218	)
Interest income		40,657			37,314			170,438			139,641
Equity in (gain)/loss of affiliates					16,446						16,446
Other income, net		(25,914	)		3,570			34,558			6,836
Income before income taxes and minority interest attributable to non-controlling interest	$	(1,782,681	)	$	(3,065,609	)	$	(3,687,693	)	$	(3,959,007	)
Income taxes benefit/ (expense)		20,212			103,281			475,226			(54,486	)
Extraordinary items
Loss on dilution of stake in Sricon		-			(3,205,616	)		-			(3,205,616	)
Net income/(loss)	$	(1,762,469	)	$	(6,167,944	)	$	(3,212,467	)	$	(7,219,109	)
Non-controlling interests in earnings of subsidiaries		13,451			(7,574	)		16,014			(72,599	)
Net income / (loss) attributable to common stockholders	$	(1,749,018	)	$	(6,175,518	)	$	(3,196,453	)	$	(7,291,708	)
Earnings/(loss) per share attributable to common stockholders:
Basic and diluted	$	(0.12	)	$	(0.06	)	$	(0.23	)	$	(0.11	)
Weighted-average number of shares used in computing earnings per share amounts:
Basic and diluted		14,750,483			10,242,749			13,814,634			10,166,960

	Three months ended December 31,						Nine months ended December 31,
	2010			2009			2010			2009

Net income / (loss)	$	(1,749,018	)	$	(6,175,518	)	$	(3,196,453	)	$	(7,291,708	)
Foreign currency translation adjustments		60,941			2,167,829			34,774			3,357,114
Deconsolidation of Sricon		-			(1,148,591	)		-			(1,148,591	)
Comprehensive income (loss)	$	(1,688,077	)	$	(5,156,280	)	$	(3,161,679	)	$	(5,083,185	)

					Additional			Accumulated			Accumulated Other						Total
	Common Stock				Paid in			Earnings			Comprehensive			Non-Controlling			Stockholders’
	No of Shares		Amount		Capital			(Deficit)			Income/(loss)			Interest			Equity

Balance at March 31, 2009		10,091,171	$	1,009	$	33,186,530		$	(4,662,689	)	$	(4,929,581	)	$	14,262,606		$	37,857,875
Stock Option for 1,413,000 grants		-		-		90,996			-			-			-			90,996
Issue of 78,820 common stock to officers and directors		78,820		8		39,402			-			-			-			39,410
Issuance of Common Stock to Red Chip Companies		15,000		2		13,198			-			-			-			13,200
Issuance of 1,599,000 common stock to institutional investors		1,599,000		160		1,638,690			-			-			-			1,638,850
Issue of 530,000 common stock to Bricoleur Capital		530,000		53		712,822			-			-			-			712,875
Issue of 530,000 common stock to Oliveira		530,000		53		586,732			-			-			-			586,785
Interest exp. towards of 530000 shares towards Bricoleur Capital loan		-		-		197,412			-			-			-			197,412
Interest exp. towards of 530000 shares towards Oliveira loan		-		-		162,408			-			-			-			162,408
Issue of 145,216 common stock under ATM agency agreement		145,216		15		179,874			-			-			(10,484	)		169,405
Dividend Option		-		-		(2,340	)		-			-			-			(2,340	)
Loss on Translation		-		-		-			-			3,499,767			(2,219,698	)		1,280,069
Impact of de-consolidation of Sricon		-		-		-			-			(1,148,591	)		-			(1,148,591	)
Elimination of non-controlling interest pertaining to Sricon		-		-		-			-			-			(10,637,093	)		(10,637,093	)
Net income for non-controlling interest		-		-		-			-			-			(18,490	)		(18,490	)
Net income / (loss)		-		-		-			(4,789,311	)		-			-			(4,789,311	)
Balance at March 31, 2010 (audited)		12,989,207	$	1,300	$	36,805,724		$	(9,452,000	)	$	(2,578,405	)	$	1,376,841		$	26,153,460
Issuance of common stock		835,000		83		950,450			-			-			-			950,533
Amortization of interest in debt		-		-		359,820			-			-			-			359,820
Dividend Option Reversed		-		-		213,381			-			-			-			213,381
Loss on Translation		-		-		-			-			34,774			4,594			39,368
Road show expenses for share issue		-		-		(69,017	)		-			-			-			(69,017	)
Net income for non-controlling interest		-		-		-			-			-			(16,014	)		(16,014	)
Net income / (loss)		-		-		-			(3,196,453	)		-			-			(3,196,453	)
Balance at December 31, 2010 (unaudited)		13,824,207	$	1,383	$	38,260,358		$	(12,648,453	)	$	(2,543,631	)	$	1,365,421		$	24,435,078

	Nine months ended December 31,,
	2010			2009
Cash flows from operating activities:
Net income (loss)	$	(3,196,453	)	$	(7,291,708	)
Adjustment to reconcile net income (loss) to net cash:
Non-cash compensation expense					375,758
Deferred taxes		(449,635	)		(68,699	)
Depreciation		250,324			519,812
Loss/(gain) on sale of property, plant and equipment		19,503			0
Non-controlling interest		(16,014	)		72,599
Amortization of debt discount		359,820			178,219
Deferred acquisition costs written-off		-			1,854,750
Loss on dilution of stake		-			3,205,616
Loss on extinguishment of loan		-			586,785
Equity and earnings of affiliates		-			(16,446	)
Non cash interest and other expense		296,200			-
Unrealized exchange differences		(17,787	)		-
Changes in:
Accounts receivable		(674,956	)		(5,364,846	)
Inventories		(169,100	)		(389,904	)
Prepaid expenses and other assets		(13,600	)		(94,307	)
Trade payables		1,834,662			3,621,690
Other liabilities		(96,177	)		14,503
Due to / from related parties		-			118,344
Accrued Expenses		(333,454	)		(85,935	)
Net cash used in operating activities	$	(2,206,667	)	$	(2,763,768	)

Cash flow from investing activities:
Net proceeds from sale of property and equipment	$	2,632			(123,450	)
Deposit towards acquisitions, net of cash acquired		-			(600,024	)
Investment in Joint Ventures		(267,844	)		-
Restricted cash		273,750			(261,232	)
Net cash provided/(used) by investing activities	$	8,538			(984,706	)

Cash flows from financing activities:
Net proceeds / repayment of cash credit and bank overdraft		22,468			82,097
Proceeds from other short term and long term borrowings		-			(75,879	)
Repayment of long term borrowings		(200,000	)		-
Interest Paid		-			(72,710	)
Proceeds from notes acquired		-			2,000,000
Net proceeds from issue of equity shares		3,001,118			1,777,939
Net cash provided/(used) by financing activities	$	2,823,586		$	3,711,447
Effects of exchange rate changes on cash and cash equivalents		1,811			(12,632	)
Net increase/(decrease) in cash and cash equivalents		627,268			(49,659	)
Cash and cash equivalent at the beginning of the period		842,923			2,129,365
Cash and cash equivalent at the end of the period	$	1,470,191		$	2,079,706

Subsidiaries	Country of incorporation	Percentage of holding as at Dec 31, 2010	Percentage of holding as at March 31, 2010
IGC - Mauritius (‘IGC-M’)	Mauritius	100	100
IGC India Mining and Trading Private Limited (‘IGC-IMT’)	India	100	100
IGC Logistic Private Limited (‘IGC-L’)	India	100	100
IGC Materials Private Limited (‘IGC-MPL’)	India	100	100
Techni Bharathi Limited (“TBL”)	India	77	77

Subsidiaries	Country of Incorporation	Percentage of holding as of June 30, 2011		Percentage of holding as of March 31, 2011
IGC - Mauritius (“IGC-M”)	Mauritius		100		100
IGC India Mining and Trading Private Limited (“IGC-IMT”)	India		100		100
IGC Logistic Private Limited (“IGC-LPL”)	India		100		100
IGC Materials Private Limited (“IGC-MPL”)	India		100		100
Techni Bharathi Limited (“TBL”)	India		77		77

1.	A sophisticated, integrated approach to project modeling, costing, management, and monitoring.
2.	In-depth knowledge of southern and central Indian infrastructure development.
3.	Knowledge of low cost logistics for moving commodities across long distances in specific parts of India.
4.	In-depth knowledge of the licensing process for mines and quarries in southern and central India.
5.	Strong relationships with several important construction companies and mine operators in southern and central India.

Subsidiary	Three months ended June 30, 2011			Three months ended June 30, 2010
TBL		1	%		88	%
IGC-IMT		70	%		-	%
IGC-MPL		29	%		10	%
IGC-LPL		-	%		2	%
Total		100	%		100	%

	a)		~~Cost plus contracts: Contract revenue is determined by adding the aggregate cost plus proportionate margin as agreed with the customer and expected to be realized.~~

	b)		Fixed price contracts: Contract revenue is recognized using the percentage completion method. Percentage of completion is determined as a proportion of cost incurred-to-date to the total estimated contract cost. Changes in estimates for revenues, costs to complete and profit margins are recognized in the period in which they are reasonably determinable