UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549




_______________________






FORM
10-Q




_______________________






þ
            
            Quarterly
      report pursuant to Section 13 or 15(d) of the Securities Exchange Act
      of 1934.For
      the quarterly period ended June 30,
2008




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




Commission
file number000-1326205




INDIA
GLOBALIZATION CAPITAL, INC.


(Exact
name of small business issuer in its charter)




Maryland
              (State
      or other jurisdiction of incorporation or organization)
            20-2760393
              (I.R.S.
      Employer Identification No.)




4336 Montgomery Ave.
Bethesda, Maryland 20814


(Address
of principal executive offices)




(301) 983-0998


(Issuer’s
telephone number)


Securities
registered under Section 12(b) of the Exchange Act:




Title of Each
      Class
            Name of exchange on
      which registeredUnits,
      each consisting of one share of Common Stock
            American
      Stock Exchangeand
      two WarrantsCommon
      Stock
            American
      Stock ExchangeCommon
      Stock Purchase Warrants
            American
      Stock Exchange




Check
whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past
90 days.           þ
Yes     o No





Indicate
by check mark whether the registrant is a large accelerated filer, or a
non-accelerated filer. See definition of “accelerated filer and large
accelerated filer” in Rule 12b-2 of the Exchange Act. (Check
one):




Large
Accelerated Filer o   
Accelerated Filer o   
Non-Accelerated Filer þ





Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
          o Yes
           þ No





Indicate
the number of shares outstanding for each of the issuer’s classes of common
equity as of the latest practicable date.





Class                   Shares Outstanding as of
July 15, 2008


Common
Stock, $.0001 Par
Value                                             8,570,107





Table of Contents






INDEX


India
Globalization Capital


QUARTERLY
REPORT ON FORM 10-Q


FOR
THE QUARTERLY PERIOD ENDED JUNE 30, 2008





Table of
Contents







PagePART
      I – FINANCIAL INFORMATIONItem
      1.
              Financial
      Statements
              3Consolidated Balance Sheets as of
      June 30, 2008 (unaudited) and March 31, 2008
              3Consolidated Statements of
      Operations (unaudited) for the three months ended June 30, 2008 and
      2007,and Predecessor Companies for June 30,
      2007
              4Consolidated Statements of
      Stockholders (Deficit) Equity for the three months ended June 30, 2008
      (unaudited)
              5Consolidated Statements of Cash
      Flows (unaudited) for the three months ended June 30, 2008 and
      2007
              6Notes to Consolidated Financial
      Statements (unaudited)
              7Item
      2.
              Management’s Discussion and
      Analysis
              13Item
      3.
              Quantitative and Qualitative
      Disclosures About Market Risk
              18Item
      4.
              Controls and
      Procedures
              18PART
      II – OTHER INFORMATIONItem
      1.
              Legal
      Proceedings
              19Item
      2.
              Unregistered Sales of Equity
      Securities and Use of Proceeds
              19Item
      3.
              Defaults Upon Senior
      Securities
              19Item
      4.
              Submission of Matters to a Vote of
      Security Holders
              19Item
      5.
              Other
      Information
              19Item
      6.
              Exhibits
              1919Signatures20











Table of Contents






PARTI  - Financial Information





Item 1.  Financial
Statements





India Globalization
Capital, Inc.


CONSOLIDATED
STATEMENTS OF OPERATIONS


(unaudited)




Three
      Months
            
            
            Three
      Months
            
            
            Combined
      Predecessor Three MonthsEnded
            
            
            Ended
            
            
            EndedJune
      30, 2008
            
            
            June
      30, 2007
            
            
            June
      30, 2007Revenues:
            
            $
            17,928,381
            
            
            $
            
            
            $
            3,311,309Cost
      of revenues:
            
            
            (13,155,698
            )
            
            
            
            
            
            (2,747,235
            )Gross
      Profit
            
            
            4,772,683
            
            
            
            
            
            
            564,074Selling,
      General and Administrative
            
            
            (947,506
            )
            
            
            
            
            
            (429,601
            )Depreciation
            
            
            (231,583
            )
            
            
            
            
            
            (193,565
            )One
      Time Legal and start up costs
            
            
            
            
            
            
            (179,844
            )Total
      operating expenses
            
            
            (1,179,089
            )
            
            
            (179,844
            )
            
            
            (623,166
            )Operating
      income (loss)
            
            
            3,593,594
            
            
            
            (179,844
            )
            
            
            (59,093
            )Other
      income (expense):Interest
      income
            
            
            128,879
            
            
            
            694,918
            
            
            
            87,561Interest
      expense
            
            
            (474,310
            )
            
            
            (459,878
            )
            
            
            (251,761
            )Total
      other income (expense)
            
            
            (345,431
            )
            
            
            235,040
            
            
            
            (164,200
            )Income
      (loss) before provision for income taxes
            
            
            3,248,163
            
            
            
            55,196
            
            
            
            (223,293
            )(Provision)
      benefit for income taxes
            
            
            (1,089,090
            )
            
            
            (18,913
            )
            
            
            (216,721
            )Income
      (loss) after provision for income tax
            
            
            2,159,073
            
            
            
            36,283
            
            
            
            (440,013
            )Provision
      for Dividend on Preference Stock and its Tax
            
            
            
            
            
            
            
            
            
            
            (25,904
            )Minority
      interest
            
            
            (872,255
            )Net
      income (loss)
            
            $
            1,286,818
            
            
            $
            36,283
            
            
            $
            (465,917
            )Weighted
      average number of shares outstanding:Basic
            
            
            8,570,107
            
            
            
            13,974,500Diluted
            
            
            8,885,618
            
            
            
            13,974,500Net
      income per share:Basis
            
            $
            0.15
            
            
            $
            .03Diluted
            
            $
            0.14
            
            
            $
            .03





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











3
 Table of Contents








IndiaGlobalization Capital, Inc.


CONSOLIDATED
BALANCE SHEETS





June
      30, 2008
              (unaudited)
            
            
            March
      31, 2008
              (audited)ASSETSCurrent
      Assets:Cash
      and cash equivalents
            
            $
            1,549,528
            
            
            $
            8,397,441Accounts
      Receivable
            
            
            12,653,106
            
            
            
            8,708,861Unbilled
      Receivables
            
            
            4,883,994
            
            
            
            5,208,722Inventories
            
            
            1,763,712
            
            
            
            1,550,080Interest
      Receivable - Convertible Debenture
            
            
            337,479
            
            
            
            277,479Convertible
      debenture in MBL
            
            
            3,000,000
            
            
            
            3,000,000Prepaid
      taxes
            
            
            50,038
            
            
            
            49,289Restricted
      cash
            
            
            625
            
            
            
            6,257Short
      term investments
            
            
            3,372,057
            
            
            
            671Prepaid
      expenses and other current assets
            
            
            1,216,991
            
            
            
            4,324,201Due
      from related parties
            
            
            321,261
            
            
            
            1,373,447Total
      Current Assets
            
            $
            29,148,791
            
            
            $
            32,896,447Property
      and equipment, net
            
            
            8,185,108
            
            
            
            7,337,361Build,
      Operate and Transfer (BOT under Progress)
            
            
            3,281,365
            
            
            
            3,519,965Goodwill
            
            
            17,483,501
            
            
            
            17,483,501Investment
            
            
            1,763,506
            
            
            
            1,688,303Deposits
      towards acquisitions
            
            
            187,500
            
            
            
            187,500Restricted
      cash, non-current
            
            
            1,974,241
            
            
            
            2,124,160Deferred
      tax assets - Federal and State, net of valuation allowance
            
            
            982,200
            
            
            
            1,013,611Other
      Assets
            
            
            2,796,767
            
            
            
            1,376,126Total
      Assets
            
            $
            65,802,979
            
            
            $
            67,626,973LIABILITIES
      AND STOCKHOLDERS’ EQUITYCurrent
      Liabilities:Short-term
      borrowings and current portion of long-term debt
            
            $
            7,772,429
            
            
            $
            5,635,408Trade
      payables
            
            
            2,627,966
            
            
            
            1,771,151Advance
      from Customers
            
            
            594,958
            
            
            
            931,092Accrued
      expenses
            
            
            820,183
            
            
            
            1,368,219Taxes
      payable
            
            
            71,259
            
            
            
            58,590Notes
      Payable to Oliveira Capital, LLC
            
            
            3,000,000
            
            
            
            3,000,000Due
      to related parties
            
            
            2,661,171
            
            
            
            1,330,291Other
      current liabilities
            
            
            3,418,352
            
            
            
            3,289,307Total
      current liabilities
            
            $
            20,966,318
            
            
            $
            17,384,058Long-term
      debt, net of current portion
            
            
            1,456,422
            
            
            
            1,212,841Advance
      from Customers
            
            
            
            
            
            832,717Deferred
      taxes on income
            
            
            669,503
            
            
            
            608,535Other
      liabilities
            
            
            2,424,115
            
            
            
            6,717,109Total
      Liabilities
            
            
            25,516,358
            
            
            
            26,755,261Minority
      Interest
            
            
            14,417,912
            
            
            
            13,545,656STOCKHOLDERS’
      EQUITYCommon
      stock — $.0001 par value; 75,000,000 shares authorized; 8,570,107 issued
      and outstanding at June 30, 2008 and March 31, 2008
            
            
            857
            
            
            
            857Additional
      paid-in capital
            
            
            31,470,133
            
            
            
            31,470,134Money
      received pending allotmentRetained
      Earnings (Deficit)
            
            
            (2,854,295
            )
            
            
            (4,141,113
            )Accumulated
      other comprehensive (loss) income
            
            
            (2,747,986
            )
            
            
            (3,822
            )Total
      stockholders’ equity
            
            
            25,868,709
            
            
            
            27,326,056Total
      liabilities and stockholders’ equity
            
            $
            65,802,979
            
            
            $
            67,626,973





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








4
 Table of Contents





IndiaGlobalization Capital, Inc.


CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ EQUITY


(unaudited)




Common
      Stock
            
            Additional
              Paid-in
            
            Earnings
            
            
            Accumulated
              Other
              Comprehensive
      Income
            
            Total
              Stockholders'Shares
            
            Amount
            
            Capital
            
            (Deficit)
            
            
            /
      Loss
            
            EquityBalance
      at March 31, 2008
            
            
            8,570,107
            
            
            $
            857
            
            
            $
            31,470,134
            
            
            $
            (4,141,113
            )
            
            $
            (3,822
            )
            
            $
            27,326,056Net
      Income (Loss)
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            1,286,818
            
            
            
            (2,744,164
            )
            
            
            (1,457,347
            )Balance
      at June 30, 2008
            
            
            8,570,107
            
            
            $
            857
            
            
            $
            31,470,134
            
            
            $
            (2,854,295
            )
            
            $
            (2,747,986
            )
            
            $
            25,868,709





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










5
 Table of Contents





IndiaGlobalization Capital, Inc.


CONSOLIDATED
STATEMENT OF CASH FLOWS


(unaudited)





Three
      months endedJune
      30, 2008
            
            
            June
      30, 2007Cash
      flows from operating activities:Net
      income
            
            $
            1,286,818
            
            
            $
            36,283Adjustment
      to reconcile net income to net cash used in operating
      activities:Interest
      earned on Treasury Bills
            
            
            
            
            
            
            (721,805
            )Non-cash
      compensation expenseDeferred
      taxes
            
            
            129,517
            
            
            
            (348,236
            )Depreciation
            
            
            231,583Loss/(Gain)
      on sale of property, plant and equipment
            
            
            (33,740
            )Amortization
      of debt discount on Oliveira debt
            
            
            
            
            
            
            386,850Changes
      in:Accounts
      receivable
            
            
            (4,685,180
            )Unbilled
      Receivable
            
            
            (29,286
            )Inventories
            
            
            (329,288
            )Prepaid
      expenses and other current assets
            
            
            3,284,246
            
            
            
            38,340Interest
      receivable - convertible debenture
            
            
            (60,000
            )
            
            
            (60,000
            )Deferred
      interest liability
            
            
            
            
            
            
            95,268Accrued
      expenses
            
            
            (563,535
            )
            
            
            111,367Taxes
      payable
            
            
            11,920
            
            
            
            12,149Trade
      Payable
            
            
            1,009,317Other
      Current Liabilities
            
            
            2,690Advance
      from Customers
            
            
            (1,084,142
            )Non
      current assets
            
            
            (1,564,201
            )Other
      non-current liabilities
            
            
            (3,965,110
            )Minority
      Interest
            
            
            872,255Net
      cash used in operating activities
            
            
            (5,486,136
            )
            
            
            (449,784
            )Cash
      flows from investing activities:Purchase
      of treasury bills
            
            
            
            
            
            
            (132,811,913
            )Maturity
      of treasury bills
            
            
            
            
            
            
            133,166,157Decrease
      (increase) in cash held in trust
            
            
            
            
            
            
            486Purchase
      of property and equipment
            
            
            (1,646,738
            )Proceeds
      from sale of property and equipment
            
            
            59,085Purchase
      of short term investments
            
            
            (3,483,283
            )Non
      Current Investments
            
            
            (195,944
            )Restricted
      Cash
            
            
            11,386Deposit
      to CWEL
            
            
            
            
            
            
            (250,000
            )Payment
      of deferred acquisition costs
            
            
            
            
            
            
            (77,333
            )Net
      cash provided used in investing activities
            
            
            (5,255,494
            )
            
            
            27,397Cash
      flows from financing activities:Net
      movement in cash credit and bank overdraft
            
            
            2,414,063Proceeds
      from other short-term borrowings
            
            
            1,699,083Repayment
      of  long-term borrowings
            
            
            (1,173,852
            )Due
      to related parties
            
            
            1,213,865Proceeds
      from notes payable to stockholders
            
            
            
            
            
            
            275,000Repayment
      of notes payable to stockholder
            
            
            
            
            
            
            (600,000
            )Net
      cash provided by financing activities
            
            
            4,153,159
            
            
            
            (325,000
            )Effect
      of exchange rate changes on cash and cash equivalents
            
            
            (259,442
            )Net
      increase in cash and cash equivalent
            
            
            (6,847,913
            )
            
            
            (747,387
            )Cash
      and cash equivalent at the beginning of the period
            
            
            8,397,441
            
            
            
            1,169,422Cash
      and cash equivalent at the end of the period
            
            $
            1,549,528
            
            
            $
            422,035




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





Predecessor
cash flow statements for the three month ended period June 30, 2007 are not
available, and not included with the Consolidated Cash Flow Report.








6
 Table of Contents





Backgroundof India Globalization Capital, Inc.
(IGC)





Notes
to Consolidated Financial Statements (unaudited)





Note
1 - Nature of Operations and Basis of Presentation




IGC
operates through two infrastructure companies in India, Sricon Infrastructure
Private Limited (“Sricon”) and Techni Bharathi, Limited (“TBL”).  IGC
owns sixty-three percent of Sricon and seventy-seven percent of
TBL.  IGC through its subsidiaries has three core businesses: 1)
highway and other heavy construction, 2) mining & quarrying and 3) civil
construction and engineering of high temperature plants. The Company’s medium
term plans are to expand each of these lines of business.




The
Company’s operations are subject to certain risks and uncertainties, including
among others, dependency on India’s economy and government policies, seasonal
business factors, competitively priced raw materials, dependence upon key
members of the management team and increased competition from existing and new
entrants.





India
Globalization Capital, Inc.





IGC, a
Maryland corporation, was organized on April 29, 2005 as a blank check
company formed for the purpose of acquiring one or more businesses with
operations primarily in India through a merger, capital stock exchange, asset
acquisition or other similar business combination or acquisition. On March 8,
2006, the company completed an initial public offering.  On February
19, 2007, the Company incorporated India Globalization Capital, Mauritius,
Limited (IGC-M), a wholly owned subsidiary, under the laws of
Mauritius.





Merger
and Accounting Treatment





On March 7, 2008, the Company
consummated the acquisition of 63% of the equity of Sricon Infrastructure
Private Limited (Sricon) and 77% of the equity of Techni Bharathi Limited (TBL).
The shares of the two Indian companies, Sricon and TBL, are held by
IGC-M.  Most of the shares of Sricon and TBL acquired by IGC were
purchased directly from the companies. IGC purchased a portion of the shares
from the existing owners of the companies.  The founders and
management of Sricon own 37% of Sricon and the founders and management of TBL
own 23% of TBL. Prior
to the acquisitions of Sricon and TBL, IGC had no operations and was considered
a developmental stage enterprise.





The
acquisitions were accounted for under the purchase method of
accounting.  Under this method of accounting, for accounting and
financial purposes, IGC-M, Limited was treated as the acquiring entity and
Sricon and TBL as the acquired entities.  The consolidated financial
statements provided here and going forward are the consolidated statements of
IGC, which include IGC-M following the date of formation of IGC-M and Sricon and
TBL following the date of the Company’s acquisition of the interests in Sricon
and TBL.  The consolidated financial statements do not reflect the
operating results of Sricon and TBL prior to the acquisition. However, for
comparative purposes, the combined statement of operations for the two acquired
companies are presented as the “Combined Predecessors” for the three month
period ended June 30, 2007.





Unless
the context requires otherwise, all references in this report to the “Company”,
“IGC”, “we”, “our”, and “us” refer to India Globalization Capital, Inc, together
with its wholly owned subsidiary IGC-M, and its direct and indirect subsidiaries
(Sricon and TBL).  Ownership in these two companies is reflected in
the financial statements as “Minority Interest”. The following represents our
corporate structure after the acquisitions:











7
 Table of Contents





Securities





We have
three securities listed on the American Stock Exchange: (1) common stock, $.0001
par value (ticker symbol: IGC), (2) redeemable warrants to purchase common stock
(ticker symbol: IGC.WS) and (3) units consisting of one share of common stock
and two redeemable warrants to purchase common stock (ticker symbol:
IGC.U).  On March 8, 2006, we sold 11,304,500 units in our initial
public offering.  These 11,304,500 units include 9,830,000 units sold to
the public and the over-allotment option of 1,474,500 units exercised by the
underwriters of the public offering. The units were separated into common stock
and warrants on April 13, 2006.  Each warrant entitles the holder to
purchase one share of common stock at an exercise price of $5.00.  The
warrants expire on March 3, 2011, or earlier upon
redemption.  The registration statement for initial public offering
was declared effective on March 2, 2006.  The warrants are currently
not exercisable pending the effectiveness of a registration statement relating
to the warrants.  When the warrants become exercisable, they may be
exercised by contacting the Company or the transfer agent Continental Stock
Transfer & Trust Company.  We have a right to call the warrants,
provided the common stock has traded at a closing price of at least $8.50 per
share for any 20 trading days within a 30 trading day period ending on the third
business day prior to the date on which notice of redemption is given.  If
we call the warrants, the holder will either have to redeem the warrants by
purchasing the common stock from us for $5.00 or the warrants will
expire.





On March
7, 2008, we bought and redeemed a total of 6,159,346 shares.  As a
result, on June 30, 2008, we had 8,570,107 shares outstanding (including shares
sold to our founders in a private placement prior to the public offering) and
24,874,000 shares of common stock were reserved for issuance upon exercise of
redeemable warrants and underwriters’ purchase option.





Unaudited
Interim Financial Statements





The
unaudited consolidated balance sheet as of June 30, 2008, consolidated
statements of operations and cash flows for the three months ended June 30, 2008
and 2007 and consolidated statements of stockholders’ equity (deficit) for the
three months ended June 30, 2008 include the accounts of the Company and its
subsidiaries. The unaudited financial statements include all adjustments
(consisting of normal recurring adjustments) which are, in the opinion of
management, necessary for a fair presentation of such financial
statements.  Operating results for the interim periods presented are
not necessarily indicative of the


results
to be expected for a full fiscal year.




Pro
Forma Results of Operations





The accompanying unaudited consolidated
statements of operations only reflect the operating results of companies
acquired following the date of acquisition and do not reflect the operating
results prior to the acquisitions.  The following are pro forma
unaudited results of operations for the Company for the three months ended June
30, 2008 and 2007with the
results for the Company alone for the three months ended June 30, 2007 included
for comparative purposes.  The results in the column labeled “Pro
Forma Three Months Ended June 30, 2007” assumethe Sricon and TBL acquisitions
occurred on April 1,2007.The unaudited pro forma
results of operations are not necessarily indicative of results of operations
that may have actually occurred had the acquisitions taken place on the dates
noted, or the future financial position or operating results of the Company. The
pro forma adjustments arebased upon available information and
assumptions that the Company believes are reasonable. The pro forma adjustments
include adjustments for interest expense, start up costs, increased depreciation
and amortization expense as a result of the application of the purchase method
of accounting based on the fair values of the tangible and intangible
assets.








PRO
FORMA CONSOLIDATED STATEMENTS OF OPERATIONS


(unaudited)





Three
      Months
            
            
            Three
      Months
            
            
            Pro
      forma Three MonthsEnded
            
            
            Ended
            
            
            EndedJune
      30, 2008
            
            
            June
      30, 2007
            
            
            June
      30, 2007Revenues:
            
            $
            17,928,381
            
            
            $
            
            
            $
            3,311,309Cost
      of revenues:
            
            
            (13,155,698
            )
            
            
            
            
            
            (2,747,235
            )Gross
      Profit
            
            
            4,772,683
            
            
            
            
            
            
            564,074Selling,
      general and administrative
            
            
            (947,506
            )
            
            
            
            
            
            (429,601
            )Depreciation
            
            
            (231,583
            )
            
            
            
            
            
            (193,565
            )One
      Time Legal and other start up costs
            
            
            
            
            
            
            (179,844
            )
            
            
            (179,844
            )Total
      operating expenses
            
            
            (1,179,089
            )
            
            
            (179,844
            )
            
            
            (803,010
            )Operating
      income (loss)
            
            
            3,593,594
            
            
            
            (179,844
            )
            
            
            (238,936
            )Other
      income (expense):Interest
      income
            
            
            128,879
            
            
            
            694,918
            
            
            
            87,561Interest
      expense
            
            
            (474,310
            )
            
            
            (459,878
            )
            
            
            (711,639
            )Total
      other income (expense)
            
            
            (345,431
            )
            
            
            235,040
            
            
            
            (624,078
            )Income
      (loss) before provision for income taxes
            
            
            3,248,163
            
            
            
            55,196
            
            
            
            (863,014
            )(Provision)
      benefit for income taxes
            
            
            (1,089,090
            )
            
            
            (18,913
            )
            
            
            2,481Income
      (loss) after provision for income tax
            
            
            2,159,073
            
            
            
            36,283
            
            
            
            (860,533
            )Provision
      for Dividend on Preference Stock and its Tax
            
            
            
            
            
            
            
            
            
            
            (25,904
            )Minority
      interest
            
            
            (872,255
            )
            
            
            
            
            
            
            64,091Net
      income (loss)
            
            $
            1,286,818
            
            
            $
            36,283
            
            
            $
            (822,346
            )Weighted
      average number of shares outstanding:Basic
            
            
            8,570,107
            
            
            
            13,974,500Diluted
            
            
            8,885,618
            
            
            
            13,974,500Net
      income per share:Basis
            
            $
            0.15
            
            
            $
            .03Diluted
            
            $
            0.14
            
            
            $
            .03








8
 Table of Contents




Note
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Principles
of Consolidation:





The
consolidated financial statements include the accounts of the Company and its
subsidiaries. All material intercompany balances and transactions have been
eliminated.





Reclassifications




Certain
prior year balances have been reclassified to the presentation of the current
year.  Sales and services include adjustments made towards liquidated
damages, price variation and charges paid for discounting of receivables arising
from construction/project contracts on a non-recourse basis, wherever
applicable.





Revenue
Recognition




The
majority of the revenue recognized for the three month period ended June 30,
2008 was derived from the Company’s subsidiaries and as follows:





Revenue
is recognized based on the nature of activity when consideration can be
reasonably measured and there exists reasonable certainty of its
recovery.




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.




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 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




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.




Policy
for Goodwill / Impairment





Goodwill
represents the excess cost of an acquisition over the fair value of the Group's
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, if any.




The
company adopted provisions of FAS No. 142, "Goodwill and Other Intangible
Assets" ('FAS 142') which sets forth the accounting for goodwill and intangible
assets subsequent to their acquisition. FAS 142 requires that goodwill and
indefinite-lived intangible assets be allocated to the reporting unit level,
which the Group defines as each circle.





FAS 142
also prohibits the amortization of goodwill and 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
goodwill impairment test under FAS 142 is performed in two phases. The first
step of the impairment test, used to identify potential impairment, compares the
fair value of the reporting unit with its carrying amount, including goodwill.
If the carrying amount of the reporting unit exceeds its fair value, goodwill of
the reporting unit is considered impaired, and step two of the impairment test
must be performed. The second step of the impairment test quantifies the amount
of the impairment loss by comparing the carrying amount of goodwill to the
implied fair value. An impairment loss is recorded to the extent the carrying
amount of goodwill exceeds its implied fair value.





9
 Table of Contents




Impairment
of long – lived assets and intangible assets




The
company reviews its long-lived assets, including identifiable intangible
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 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.





Income
per common share:





Basic
earnings per share is computed by dividing net income (loss) applicable to
common stockholders by the weighted average number of common shares outstanding
for the period. Diluted earnings per share reflect the additional dilution for
all potentially dilutive securities such as stock warrants and options. The
effect of the 23,374,000 warrants have been included in the diluted weighted
average shares.




For June
30, 2008, the basis shares include shares sold in the IPO, founder’s shares and
shares sold in the private placement, and shares awarded to the Bridge
Investors, and shares redeemed by the company.  The fully diluted shares
include basic shares plus the following: shares arising from the exercise of
warrants sold as part of the units in the offering plus shares arising from the
exercise of warrants issued to Oliveira Capital.   The UPO issued to the
underwriters (1,500,000 shares) is not considered in this calculation as the
strike price for the UPO is “out of the money” at $6.50 per share. The
historical weighted average per share, for our shares, for the three month
period ended June 30, 2008, was applied using the treasury method of calculating
the fully diluted shares.   The calculation for fully diluted shares
includes 378,511 shares and excludes 22,999,489 shares from the EPS
computations.




Use
of estimates:





The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those
estimates.





Income
taxes:





Deferred
income taxes are provided for the differences between the bases of assets and
liabilities for financial reporting and income tax purposes. A valuation
allowance is established when necessary to reduce deferred tax assets to the
amount expected to be realized.




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 maintains its cash in bank accounts in the United
States of America and Mauritius, 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 does not invest its cash in securities that
have an exposure to U.S. mortgages.




Recent
Pronouncements:





The
Company adopted FASB Interpretation No. 48, “Accounting for Uncertainty in
Income Taxes,” an interpretation of FASB Statement No. 109 (“FIN 48”) on
April 1, 2007.  FIN 48 clarifies the criteria for the recognition,
measurement, presentation and disclosure of uncertain tax positions. A tax
benefit from an uncertain position may be recognized only if it is “more likely
than not” that the position is sustainable based on its technical merits. FIN 48
also provides guidance on de-recognition, classification, interest and
penalties, accounting in interim periods, disclosure, and
transition.  In May 2007, the FASB issued Staff Position, FIN 48-1,
“Definition of Settlement in
FASB Interpretation No. 48” (FSP FIN 48-1) which provides guidance on how
an enterprise should determine whether a tax position is effectively settled for
the purpose of recognizing previously unrecognized tax
benefits.   FSP FIN 48-1 was effective with the initial adoption
of FIN 48.  The adoption of FIN 48 or FSP FIN 48-1 did not have a material
effect on the Company’s financial condition or results of
operations.





In
December 2007, the Financial Accounting Standards Board released SFAS 160
“Non-controlling Interests in Consolidated Financial Statements” that is
effective for annual periods beginning December 15, 2008. The pronouncement
resulted from a joint project between the FASB and the International Accounting
Standards Board and continues the movement toward the greater use of fair values
in financial reporting. Upon adoption of SFAS 160, the Company will re-classify
any non-controlling interests as a component of equity.





Management
does not believe that any other recently issued, but not yet effective,
accounting standards if currently adopted would have a material effect on the
accompanying financial statements.





10
 Table of Contents




Note
3 – SHORT TERM BORROWINGS & CURRENT PORTION OF LONG-TERM DEBT


(Amounts
in Thousand US Dollars)





Short
term debt for the consolidated companies consists of the following:




As
      of
            
            
            As
      ofJune
      30, 2008
            
            
            March
      31, 2008Secured
            
            $
            6,578
            
            
            $
            4,556Unsecured
            
            
            3,316
            
            
            
            3,306Total
            
            
            9,894
            
            
            
            7,862Add:Current
      portion of long term debt
            
            
            878
            
            
            
            773Total
            
            $
            10,772
            
            
            $
            8,635





The above
debt is secured by hypothecation of materials/stock of spares, Work in Progress,
receivables and property & equipment in addition to personal guarantee of
three directors & collaterally secured by mortgage of company’s land &
other immovable properties of directors and their relatives.





Note
4 - LONG TERM DEBT COMPRIMISES:


(Amounts
in Thousand US Dollars)





Long term
debt for the consolidated companies consists of the following:


As
      of
            
            
            As
      ofJune
      30, 2008
            
            
            March
      31, 2008Secured
            
            $
            
            
            
            $Term
      loans
            
            
            -
            
            
            
            632Loan
      for assets purchased under capital lease
            
            
            2,335
            
            
            
            1,354Total
            
            
            2,335
            
            
            
            1,982Less:
      Current portion (Payable within 1 year)
            
            
            878
            
            
            
            773Total
            
            $
            1,456
            
            
            $
            1,213




The
secured loans were collateralized by:




·
            Unencumbered
      Net Asset Block of the Company


·
            Equitable
      mortgage of properties owned by promoter directors/
    guarantors


·
            Term
      Deposits


·
            Hypothecation
      of receivables, assignment of toll rights, machineries and vehicles and
      collaterally secured by deposit of title deeds of
  land


·
            First
      charge on Debt-Service Reserve
Account











11
 Table of Contents





NOTE
5 - RELATED PARTY TRANSACTIONS




For the
three month period ended June 30, 2008, $10,000 was paid to SJS Associates for
Mr. Selvaraj’s consulting services.




The
Company had agreed to pay Integrated Global Network, LLC (“IGN, LLC”), an
affiliate of our Chief Executive Officer, Mr. Mukunda, an administrative fee of
$4,000 per month for office space and general and administrative
services.  A total $12,000 was paid to IGN, LLC including a $4,000
payment for the prior period.  The Company and IGN, LLC have agreed to
continue the agreement on a month-to-month basis.





In April
2008 R.L. Srivastava, Chairman of Sricon, made an unsecured loan of $1,953,157
to Sricon which is due in 6 months from the date of the loan, which due date is
extendable after the 6 month period by mutual consent.  The loan’s
interest rate is 2% annually.


NOTE
6 -COMMITMENTS AND CONTINGENCY





The
Founders will be entitled to registration rights with respect to their shares of
common stock acquired prior to the Public Offering and the shares of common
stock they purchased in the Private Placement pursuant to an agreement executed
on March 3, 2006. The holders of the majority of these shares are entitled
to make up to two demands that the Company register these shares at any time
after the date on which the lock-up period expires.  In addition, the
Founders have certain “piggy-back” registration rights on registration
statements filed subsequent to the anniversary of the effective date of the
Public Offering.In addition, the
holders of certain shares of common stock of the Company and warrants to
purchase Common Stock of the Company purchased from the Company in private
placements are entitled to demand and “piggy back” registration
rights.




In
connection with our proposed acquisition of a wind energy farm from
Chiranjjeevi Wind Energy Limited ("CWEL"), we have agreed to pay a finder’s fee
of 0.25% of the purchase price to Master Aerospace Consultants (Pvt) Ltd, a
consulting firm located in India. The fee is contingent on the consummation
of the transaction.




NOTE
7 - INVESTMENT ACTIVITIES





Contract
Agreement between IGC, CWEL, AMTL and MAIL





As
previously disclosed in our Form 8-K dated May 2, 2007 and Form 10-QSB for the
quarterly period ended June 30, 2007, on April 29, 2007, the Company entered
into a Contract Agreement Dated April 29, 2007 (“CWEL Purchase Agreement”) with
CWEL, Arul Mariamman Textiles Limited (AMTL), and Marudhavel Industries
Limited (MAIL), collectively CWEL. Pursuant to the CWEL Purchase Agreement, the
Company or its subsidiary in Mauritius will acquire 100% of a 24-mega watt wind
energy farm, consisting of 96 250-kilowatt wind turbines, located in Karnataka,
India to be manufactured by CWEL.





CWEL is a
manufacturer and supplier of wind operated electricity generators, towers and
turnkey implementers of wind energy farms.  On May 22, 2007, the
Company made a down payment of approximately $250,000 to
CWEL.  Pursuant to the First Amendment dated August 20, 2007 (as
previously disclosed in the Company’s Form 8-K dated August 22, 2007), if the
Company does not consummate the transaction with CWEL, approximately $187,500
will be returned to the Company.





The
Company is contemplating pursuing this opportunity, or a similar one if it is
able to obtain adequate funding from the exercise of warrants, debt or other
means.





NOTE
8 - COMMON STOCK





On August
24, 2005, the Company’s Board of Directors authorized a reverse stock split of
one share of common stock for each two outstanding shares of common stock and
approved an amendment to the Company’s Certificate of Incorporation to decrease
the number of authorized shares of common stock to 75,000,000. All references in
the accompanying financial statements to the number of shares of stock have been
retroactively restated to reflect these transactions.  On March 7,
2008 we redeemed and bought a total of 6,159,346 shares at $5.94 per
share.  At June 30, 2008 and 2007 we had 8,570,107 and 13,974,500
shares of common stock issued and outstanding respectively.   At
June 30, 2008 and 2007, 24,874,000 shares of common stock, were reserved for
issuance upon exercise of redeemable warrants, underwriters’ purchase option and
warrants issued to Oliveira Capital, LLC.




NOTE
9 -  BUSINESS COMBINATIONS





As
previously disclosed in our Form 8-K dated September 21, 2007 and Form 10-QSB
for the quarterly period ended June 30, 2007, on September 21, 2007, the Company
entered into a Share Subscription cum Purchase Agreement  (the “Sricon
Subscription Agreement”) dated as of September 15, 2007 with Sricon
Infrastructure Private Limited  (“Sricon”) and certain individuals
(collectively, the “Sricon Promoters”), pursuant to which the Company or its
subsidiary in Mauritius (IGC-M) will acquire (the “Sricon Acquisition”)4,041,676 newly-issued
equity shares  (the “New Sricon Shares”) directly from Sricon for
approximately $26 million and 351,840 equity shares from Mr. R. L. Srivastava
for approximately $3 million (both based on an exchange rate of INR 40 per USD)
so that at the conclusion of the transactions contemplated by the Sricon
Subscription Agreement the Company would ownapproximately63% of the outstanding
equity shares of Sricon.  The Sricon Acquisition was consummated on March
7, 2008.





As
previously disclosed in our Form 8-K dated September 21, 2007 and Form 10-QSB
for the quarterly period ended June 30, 2007, on September 21, 2007, the Company
entered into a Share Subscription Agreement  (the “TBL Subscription
Agreement”) dated as of September 16, 2007 with Techni Bharathi Limited (“TBL”)
and certain individuals (collectively, the “TBL Promoters”), pursuant to which
the Company through its subsidiary in Mauritius (IGC-M) acquired (the “TBL
Acquisition”)7,150,000 newly-issued
company stock for approximately $6.9 million, 1,250,000 newly-issued convertible
preference shares for approximately $3.13 million  (both at an
exchange rate of INR 40 per USD; collectively, the “New Shares”) directly from
TBL and 5,000,000 convertible preference shares from Odeon, a Singapore based
holder of TBL securities, for approximately $2 million.  With the
conclusion of this transaction, on March 7, 2008 the Company ownsapproximately 77%, of
the outstanding equity shares of TBL.





No
acquisitions or mergers transactions occurred during the three month period
ended June 30, 2008.  Details of the Sricon and TBL acquisitions can
be found in the Company’s 10-KSB filed for year end March 31, 2008.




12
 Table of Contents




NOTE
10 - SUBSEQUENT EVENTS





On August
6, 2008, we received $3,000,000 plus interest from an investment in MBL
Infrastructures Limited and subsequently on August 6, 2008 repaid $3,000,000
principal and accrued interest to Oliveira Capital and is negotiating the
issuance of an additional 425,000 warrants.  It will be reflected in
the financial results for quarter end September 30, 2008.





Item  2.  Management’s Discussion and
Analysis





The
following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our unaudited condensed financial
statements and related notes that appear elsewhere in this Quarterly Report on
Form 10-Q.  In addition to historical consolidated financial
information, the following discussion contains forward-looking statements that
reflect our plans, estimates and beliefs. Our actual results could differ
materially from those discussed in the forward-looking statements. Factors that
could cause or contribute to these differences include those discussed below and
elsewhere in this Quarterly Report on Form 10-Q, as well as in our Annual Report
on Form 10-KSB filed on July 16, 2008.





Overview





In
response to India’s rapidly expanding economy, our primary focus is to
execute infrastructure projects through our subsidiaries such as
constructing interstate highways, rural roads, mining and quarrying, and
construction of high temperature cement and steel plants.





The 2008
share of infrastructure investment in India is expected to increase to 9
per cent of GDP, which is an increase from 5 per cent in
2006-07.  This forecast is based on The Indian Planning Commission’s
annual publication surmised that for the Eleventh Plan period (2007-12), a
large investment of approximately $494 Billion would be required for
Infrastructure build and modernization.  The infrastructure
development industry is the largest employer in India – the construction
industry alone employs more than 30 million people.  According to the
Business Monitor International (BMI), by 2012, the construction industry’s
contribution to India’s GDP is forecasted to be 16.98%.  The sector is
riding on a high growth wave powered by the large
expenditures committed to infrastructure programs – evidenced all over
the country in the form of new highways, dams, power plants and pipelines. The
sectors contributing to the high growth rates are power, transport, petroleum
and urban infrastructure.





Our
operations are subject to certain risks and uncertainties, including among
others, dependency on India’s economy and government policies, competitively
priced raw materials, dependence upon key members of the management team and
increased competition from existing and new entrants.





Sricon
Infrastructure Private Limited


Sricon
Infrastructure Private Limited (“Sricon”) was incorporated as a private limited
company on March 3, 1997 in Nagpur, India.  Sricon is an engineering
and construction company that is engaged in three business areas: 1) civil
construction of highways and other heavy construction, 2) mining and quarrying
and 3) the construction and maintenance of high temperature cement and steel
plants.  Sricon has a pan-India focus and is accredited with ISO
9001:2000 certification and its present and past clients include various Indian
government organizations.  Sricon employs approximately 250 skilled
employees and over 800 unskilled labor contractors.  It currently has
the capacity and prior experience to bid on contracts that are priced at a
maximum of about $116 million. Sricon recently won a $103 million contract as
disclosed in a press release, a contract to build about 150 miles of rural roads
including one major and 32 minor bridges.




Techni
Bharathi Limited


Techni
Bharathi Limited (“TBL”) was incorporated as a public (but not listed on the
stock market) limited company on June 19, 1982 in Cochin, India.  TBL
is an engineering and construction company engaged in the execution of civil
construction and structural engineering projects.  TBL has a focus in
the Indian states of Andhra Pradesh, Karnataka, Assam and Tamil Nadu. Its
present and past clients include various Indian government
organizations.




Core
Business Areas





Our core
business areas include the following:





Highway and heavy
construction:





The
Indian government has articulated a plan to build and modernize Indian
infrastructure.  The government’s plan, which calls for spending over
$475 billion over the next five years, includes the construction of rural roads,
major highways and townships among other infrastructure.  As of August
2008, we have approximately  $243 million worth of contracts in our
order book including a $103 million contract to build 150 miles of rural roads
including 33 bridges in the state of Madhya Pradesh, and contracts for the
building of highways in Assam, Maharashtra and Madhya Pradesh totaling around
$108 million.  In addition, we have smaller construction contracts
amounting for about $32 million, including a construction contract for a
township in Nagpur.





13
 Table of Contents




Mining
and Quarrying





As Indian
infrastructure modernizes, the demand for raw materials like stone aggregate,
coal, ore and similar resources is projected to increase. In 2006, according to
the Freedonia Group, India was the fourth largest stone aggregate market in the
world with demand of up to 1.1 billion metric tons.  Sricon has five
site licenses with two installed crushers and produces approximately 600,000
metric tons of aggregate annually.  The aggregate reserves in Sricon’s
five quarries have a projected value of around $50
million.  India is the third largest producer of coal and fourth
largest producer of ore.  Ten percent of the world’s coal reserves are
in India.  As of August 2008, we have a multiyear contract valued
around $78 million for the removal of overburden  from open pit coal
mines and extraction of limestone.  Overburden is the layers of rock
and dirt covering the coal seam.





Construction
and maintenance of high temperature plants





Sricon
has an expertise in the civil engineering, construction and maintenance of high
temperature plants.   For example, we construct cement and steel
plants.  This requires specialized skills to build and maintain the
high temperature chimneys and kilns.  As of August 2008, we have a
multiyear contract valued around $60 million for civil engineering and
maintenance of high temperature cement plants.





Customers





Over the
past 10 years, Sricon has qualified in all states in India and has worked in
several, including Maharashtra, Gujarat, Orissa and Madhya
Pradesh.  The National Highway Authority of India (NHAI) awards
interstate highway contracts on a national level, while intra-state contracts
are awarded by state agencies. The National Thermal Power Corporation (NTPC)
awards contacts for  civil work associated with power plants. The
National Coal Limited (NCL) awards large mining contracts. Our customers
include, or have included, NHAI, NTPC, and various state public works
departments.  Sricon is registered across India and is qualified to bid on
contracts anywhere in India.





Foreign
Currency Translation





The
financial statements are reported in U.S. dollars. The Indian rupee is the
functional currency for the Sricon and TBL. 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.




Transactions
in foreign currency are recorded at the exchange rate prevailing on the date of
the transaction. Monetary assets and liabilities denominated in foreign
currencies are expressed in the functional currency at the exchange rates in
effect at the balance sheet date.  Revenues, costs and expenses are
recorded using exchange rates prevailing on the date of transaction. Gains or
losses resulting from foreign currency transactions are included in the
statement of income.




The
exchange rate between the Indian Rupee and the U.S. dollars are as
follows:




Quarter
      ending
            Average
      rate used for translating operations. INR to one
      U.S.D.
            Rate
      used for translating Balance Sheet. INR to one
    U.S.D.June
      30, 2007
            41.05
            40.58March
      31, 2008
            39.73
            40.02June
      30, 2008
            41.55
            42.93





14
 Table of Contents




Critical
Accounting Policies and Estimates





The
discussion and analysis of our financial condition and results of operations are
based upon our consolidated financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States of
America. The preparation of these financial statements requires us to make
significant estimates and judgments that affect the reported amounts of assets,
liabilities, revenues
and expenses, and related disclosure of contingent assets and liabilities. These
items are regularly monitored and analyzed by management for changes in facts
and circumstances, and material changes in these estimates could occur in the
future. These estimates include, among others, our revenue recognition policies
related to the proportional performance and percentage of completion
methodologies of revenue recognition of contracts and assessing our goodwill for
impairment annually. Changes in estimates are recorded in the period in which
they become known. We base our estimates on historical experience and various
other assumptions that we believe are reasonable under the circumstances. Actual
results will differ and may differ materially from the estimates if past
experience or other assumptions do not turn out to be substantially
accurate.





Our
significant accounting policies are presented within Note 2 to our consolidated
financial statements and the following summaries should be read in conjunction
with the unaudited consolidated financial statements and the related notes
included in this Report. While all accounting policies impact the financial
statements, certain policies may be viewed as critical. Critical accounting
policies are those that are both most important to the portrayal of financial
condition and results of operations and that require management’s most
subjective or complex judgments and estimates. Our management believes the
policies that fall within this category are the policies on revenue recognition,
accounting for stock-based compensation, goodwill and income taxes.





Revenue
Recognition




The
majority of the revenue recognized for three month period ended June 30, 2008
was derived from the Company’s subsidiaries and as accordingly:





Revenue
is recognized based on the nature of activity when consideration can be
reasonably measured and there exists reasonable certainty of its
recovery.




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.




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 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




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.





Accounting
for Stock-Based Compensation




As of June 30, 2008, we had not granted any stock options under our
Employee Stock Plan.








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Goodwill


We
account for goodwill in accordance with SFAS No. 142, “Goodwill and Other Intangible
Assets”(“SFAS No. 142”). SFAS No. 142 requires the use of a
non-amortization approach to account for purchased goodwill and certain
intangibles. Under the non-amortization approach,
goodwill and certain intangibles are not amortized into results of operations,
but instead are reviewed for impairment at least annually and written down and
charged to operations only in the periods in which the recorded value of
goodwill and certain intangibles exceeds its fair value. We have elected to
perform our annual impairment test in November of each calendar year. An interim
goodwill impairment test would be performed if an event occurs or circumstances
change between annual tests that would more likely than not reduce the fair
value of a reporting unit below its carrying amount. For purposes of performing
the goodwill impairment test, we concluded there is one reporting unit. During
November 2007,we completed the required annual test, which indicated there was
no impairment.





Accounting
for Income Taxes


In
connection with preparing our financial statements, we are required to estimate
our income taxes in each of the jurisdictions in which we operate. This process
involves the assessment of our net operating loss carry forwards and credits, as
well as estimating the actual current tax liability together with assessing
temporary differences resulting from differing treatment of items, such as
reserves and accrued  liabilities, for tax and accounting purposes. We
then assess the likelihood that deferred tax assets will be recovered from
future taxable income, and to the extent we believe that recovery is not likely,
we must establish a valuation allowance. Based on historical results, we believe
that it is more likely than not that we will not realize the value of our
deferred tax assets and therefore have provided a full valuation allowance
against our net deferred tax assets.




Results
of Operations





Three
Months Ended June 30, 2008 Compared to Three Months Ended June 30,
2007




The
following results of operations discussion compares our consolidated company
results for the three months ended June 30, 2008 to the Combined Predecessor
Results of Operations for the three months ended June 30, 2007.  We
believe this is a better measure of performance than comparing the consolidated
company results to pre-acquisition results because there were no significant
operating results before acquiring Sricon and TBL companies.





Revenue -Total  revenues increased  441% to $17.9 million for
the three months ended June 30, 2008, as compared to $3,311,309 for the three
months ended June 30, 2007. Our revenue increased due to the increase in the
number of  new and active contracts in our contract
backlog.





Operating Income (loss) -In
the three month period ending June 30, 2008, operating margin is 3.7 million,
compared to a loss of $59 thousand for the combined predecessor companies for
the three month period ending June 30, 2007.  Our operating margin
increased due to the increase in the number of  new and active
contracts in our contract backlog.





Total Costs of Revenues and
operating expenses-Our total cost of revenues and operating expenses principally consist of
construction materials, employee compensation and benefits, depreciation and
amortization, startup costs, and general and administrative expense. In the
three month period ending June 30, 2008, total cost of revenue and operating
expenses increased by $11 million or 325%, compared to the three month period
ending June 30, 2007.





Costs of Revenues- Costs of
revenues consists primarily of compensation and related fringe benefits for
project-related personnel, department management and all other dedicated project
related costs and indirect costs. Cost of Revenue increased by $10.4
million or 379%, compared to the three month period ending June 30,
2007.  The increase was due to higher contract revenue during the
year.





Selling, General and Administrative- Consist primarily of employee-related expenses, professional fees,
other corporate expenses and allocated overhead. We expect that in the future,
selling, general and administrative expenses will increase as we add personnel
and incur additional professional fees and insurance costs related to being a
publicly held company. Selling, general and administrative expenses increased
by $0.5 million or 121%, compared to the three month period ending June 30,
2007, due to higher scale of operations resulting from
acquisitions.





Net Interest Income (Expense)
– Net interest (expense) increased by  $0.2 million or 110% compared
to the three month period ending June 30, 2007.  The increase was due
to higher utilization of debt and an increase in interest rates.





Net Income (loss) –Net
income increased 246% to $1.3 million for the three months ended June 30, 2008,
as compared a loss of $0.5 million for the three months ended June 30, 2007. Our
net income increased due to the increase in the number of new and active
contracts in our contract backlog.





Off-Balance
Sheet Arrangements





We do not
have any off-balance sheet arrangements as defined in Item 303(a) (4) (ii) of
Regulation S-K promulgated under the Securities Exchange Act of
1934.





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Liquidity
and Capital Resources




This
liquidity and capital resources discussion compares the consolidated company
results for three months period ended June 30, 2008 and 2007.  The
Predecessor cash flow statements for the three month ended period June 30, 2007
are not available.




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 first three months of 2008, cash used for operating activities was $5.5
million compared to cash used for operating activities of $0.4 million during
the first three months of 2007. The uses of cash in the first three months of
2008 relates primarily to the payment of general operating expenses of our
subsidiary companies.




During
the first three months of 2008, investing activities from continuing operations
used $ 5.2 million of cash as compared to $27 thousand used during the
comparable period in 2007. In the first quarter of 2008, we paid $1.6 million
for equipment purchases and $3.5 million for short term
investments.




Financing
cash flows from continuing operations consist primarily of transactions related
to our debt and equity structure. In the first three months of 2008 there was
financing cash provided of approximately $4.2 million, compared to cash used of
approximately $325 thousand for the first three months of 2007.  The cash
provided in 2008 was primarily due to use of bank credit lines.  The
cash used in 2007 was primarily due to repayment of long-term notes to
stockholders.




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. 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 to fund further growth of our business in the near
term.





Commitments




1)
Capital commitments




The
estimated amount of contracts remaining to be executed on capital account not
provided for as on June 30, 2008 are USD zero.




2)
Guarantees




The
Company had outstanding financial / performance bank guarantees of approximately
USD 4 million as of June 30, 2008.




a)
            
            The
      Sricon  was awarded a contract from National Highway Authority
      of India (‘NHAI’) in 2004-05, for restoring the Jaipur – Gurgaon National
      Highway 8. The total contract value was USD 5.10 million to be completed
      in 9 months. The entire stretch of the site was handed over on piecemeal
      basis without any defined schedule in contravention with contractual
      provisions and approved construction program and methodology. This has
      resulted in additional costs due to additional deployment of resources for
      prolonged period. Thus, Sricon invoked the escalation clause of the
      contract and filed a claim of USD 8.16 million. The dispute has been
      referred to arbitration. The Company has not recognized the claimed
      amounts on its books.b)
            
            Sricon
      was awarded a contract from National Highway Authority of India (‘NHAI’)
      in 2001-02 for construction of a four lane highway on the Namkkal bypass
      on National Highway 7, in the state of Tamilnadu. The total contract value
      was USD 4 million and the construction was to have been completed by
      November 30, 2002. The escalation and variation claim of USD 5.27 million
      is pending with NHAI. An arbitration process was initiated on July 3,
      2007. The company has not recognized the claim amounts on its
      books.c)
            
            TBL
      is contingently liable to pay four-thousand dollars towards interest
      and penalty towards Provident Dues as per the orders of the competent
      authorities.








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Forward-Looking
Statements





This
report contains forward-looking statements, 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 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
materially 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.




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.  Quantitativeand
Qualitative Disclosures About Market Risk





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.





Item 4. Controls and Procedures




The
Company maintains disclosure controls and procedures that are designed to ensure
that information requiring disclosure in our reports filed pursuant to the
Securities Exchange Act of 1934, as amended, is recorded, processed, summarized
and reported within the time periods specified in the SEC’s rules, regulations
and related forms, and that such information is accumulated and communicated to
our principal executive officer and principal financial officer, as appropriate,
to allow timely decisions regarding required disclosure.




The
Company, under the supervision of our principal executive officer and principal
financial officer, carried out an evaluation of the effectiveness of the design
and operation of its disclosure controls and procedures as defined in Rules
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as of June
30, 2008.  Based upon that evaluation, management, including our
principal executive officer and principal financial officer, concluded that the
Company’s disclosure controls and procedures were effective in alerting it in a
timely manner to information relating to the Company required to be disclosed in
this report other than with respect to our procedures for including the required
auditor consents.




In
connection with the preparation of our Form 10-KSB for our fiscal year ended
March 31, 2008, we failed to request one of the consents from our auditors in a
timely manner.  This deficiency in our controls caused us to file our Form
10-KSB for fiscal the year ended March 31, 2008 one day late.  We
determined that this control deficiency did not result, however, in a material
misstatement or lack of disclosure within the Form 10-KSB.




Based on
the changes and improvements made since July 16, 2008 (the date we filed our
Form 10-KSB), our management, including our principal executive officer and
principal financial officer, believes that we have designed and implemented a
new controls environment to address the weakness described above.  Such
remediation activities involved assigning the principal financial officer with
the responsibility of requesting consents from our auditors, allocating
additional personnel to the disclosure process, adopting written disclosure
controls and procedures, forming a disclosure controls committee that will
consider the materiality of information and determine disclosure obligations on
a timely basis and engaging outside counsel to review to future SEC
filings.




With
these programs in place, we believe our control procedures sufficiently
effective to ensure that information requiring inclusion or disclosure in our
reports filed pursuant to the Securities Exchange Act of 1934, as amended, is
recorded, processed, summarized and reported within the time periods specified
in the SEC’s rules, regulations and related forms, and that such information is
accumulated and communicated to our principal executive officer and principal
financial officer, as appropriate, to allow timely decisions regarding required
disclosure.




No  change  in  the
Company's internal control over financial reporting occurred during the year
ended June 30, 2008, that materially affected, or is reasonably
likely  to  materially  affect,  the  Company's  internal
control over financial reporting.










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PART
II – OTHER INFORMATION





Item1.
            Legal
      Proceedings





The
Company is not a party to any pending legal proceeding other than routine
litigation that is incidental to our business.




Item
2. Unregistered Sales of Equity Securities and Use of Proceeds.




No
unregistered sales of securities were made during the quarter that were not
previously reported on a Current Report on Form 8-K.




Item
      3.
            Defaults
      Upon Senior Securities




None




Item 4.
            Submission
      of Matters to a Vote of Security
Holders





On or
about June 25, 2008, we distributed our Definitive Proxy Statement to each
stockholder of record as of June 18, 2008, for our Special Meeting of
Stockholders held on July 15, 2008 at 10:00 a.m. local time (the “Special
Meeting”). At the Special Meeting, the stockholders were asked to consider a
proposal to amend the Company’s 2008 Omnibus Incentive
Plan (the “Plan”) to increase the number of shares authorized for issuance under
the Plan from 300,000 to 1,300,000, to reduce the base number of outstanding
shares used to calculate adjustments to the shares under the Plan from
13,974,500 to 8,570,107 and to make additional clarifying changes to the
Plan. The voting
results were:




For:
            
            
            4,847,067Against:
            
            
            90,374Abstain:
            
            
            3,120Broker
      Non-Votes:
            
            
            0





Item 5. Other Information





None.





Item
6.    Exhibits





The
following exhibits are filed as part of, or are incorporated by reference into,
this report:




(a)
Financial Statements





Our
financial statements as set forth in the Index to Financial Statements attached
hereto commencing on page F-1 are hereby incorporated by reference.





(b)
Exhibits.




31.1
              Certificate Pursuant to 17 CFR
      240.13a-14(a).31.2
              Certificate Pursuant to 17 CFR
      240.13a-14(a).32.1
              Certificate Pursuant to 18 U.S.C. §
      1350.32.2
              Certificate Pursuant to 18 U.S.C. §
      1350.






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SIGNATURES




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:
      August 18, 2008
            By:
            /s/ Ram
      MukundaRam
      MukundaChief
      Executive Officer and President (Principal Executive
    Officer)




Date:
      August 18, 2008
            By:
            /s/ John B.
      SelvarajJohn
      B. SelvarajTreasurer,
      Principal Financial and Accounting Officer

























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