1 General information Laing O'Rourke Corporation Limited ( the ' Company') is a company incorporated and domiciled in Cyprus. The address of the registered office is given on page 56. The nature of the Group's operations and its principal activities are set out in note 33 and in the Operating and Financial Review on pages 34 to 51. The consolidated financial statements of the Company for the year ended 31 March 2009 comprise the Company and its subsidiaries ( together referred to as the ' Group') and the Group's interest in associates and jointly controlled entities. 2 Significant accounting policies 2.1 Statement of compliance The Group consolidated financial statements have been prepared and approved by the Directors in accordance with International Financial Reporting Standards as adopted by the European Union ( Adopted IFRS and International Financial Reporting Interpretations Committee ( IFRIC) interpretations) and the Cyprus Companies Law, Cap. 113. 2.2 Basis of preparation The Group consolidated financial statements are presented in pounds sterling, rounded to the nearest hundred thousand and include the results of the holding company and its subsidiary undertakings for the year ended 31 March 2009. The consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of land and buildings ( prior to the adoption of IFRS), available- for- sale financial assets, and financial assets and financial liabilities ( including derivative instruments) at fair value through profit or loss. The Directors have considered recently published IFRSs, new interpretations and amendments to existing standards that are mandatory to the Group's accounting periods commencing on or after 1 April 2009. Each standard has been reviewed, and the effect on the Group financial statements of adopting these new standards, amendments and interpretations has been determined to be minimal. 1) Standards that are not yet effective and have not been early- adopted by the Group: a) IAS 1, Presentation of Financial Statements ( Revised), ( effective for accounting periods beginning on or after 1 January 2009). b) IAS 23 ( 2007), ( Amendment) Borrowing Costs, ( effective for accounting periods beginning on or after 1 January 2009). c) IAS 27 ( Amendment), Consolidated and Separate Financial Statements, ( effective for accounting periods beginning on or after 1 July 2009). d) Amendments to IAS 32, Financial Instruments: Presentation and IAS 1, Presentation of Financial Statements, Puttable Financial Instruments and Obligations Arising on Liquidation, ( effective for accounting periods beginning on or after 1 January 2009). e) Amendment to IAS 39, Financial Instruments: Recognition and Measurement, Eligible Hedged Items, ( effective for accounting periods beginning on or after 1 July 2009). f) IFRS 2 ( Amendment), Share- based Payment Vesting Conditions and Cancellations, ( effective for accounting periods beginning on or after 1 January 2009). g) IFRS 3 ( Amendment), Business Combinations, ( effective for accounting periods beginning on or after 1 July 2009). 2) Standards, amendments and interpretations effective in the current financial year but are not relevant or have no material impact: a) Amendments to IAS 39, Financial Instruments: Recognition and Measurement and IFRS 7, Financial Instruments: Disclosure, Reclassification of Financial Assets, ( effective from 1 July 2008). b) IFRIC 12, Service concession arrangements, ( effective for accounting periods beginning on or after 1 January 2008) outlines an approach to account for contractual arrangements arising from entities providing public services. c) IFRIC 14, IAS 19, The limit on a defined benefit asset, minimum funding requirements and their interaction, ( effective for accounting periods beginning on or after 1 January 2008). 3) Interpretations to existing standards that are not yet effective and have not been early- adopted by the Group: a) IFRIC 15, Agreements for the Construction of Real Estate, ( effective for accounting periods beginning on or after 1 January 2009). b) IFRIC 16, Hedges of a Net Investment in a Foreign Operation, ( effective for accounting periods beginning on or after 1 October 2008). c) IFRIC 17, Distributions of Non- cash Assets to Owners, ( effective for accounting periods beginning on or after 1 July 2009). d) IFRIC 18, Transfers of Assets from Customers, ( effective for transfers of assets from customers received on or after 1 July 2009). 4) Interpretations to existing standards that are not yet effective and not relevant for the Group's operations: a) IFRIC 13, Customer loyalty programmes, ( effective for accounting periods beginning on or after 1 July 2008). Notes to financial statements for the year ended 31 March 2009

Laing O'Rourke Annual Review 2009 2.3 Basis of consolidation a) The Group financial statements include the accounts of the Company and subsidiaries controlled by the Company. Control exists where the Company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable are taken into account. Subsidiaries are consolidated from the date on which effective control is transferred to the Group and are deconsolidated from the date control ceases. The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group falling within the scope of IFRS 3 ' Business Combinations'. The cost of an acquisition is measured at the fair value of the assets, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets, liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the Group's share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the income statement. b) Associates are operations over which the Group has the power to exercise significant influence but not control, generally accompanied by a share of between 20% and 50% of the voting rights. Associates are accounted for using the equity method and are initially recognised at cost. The Group's investment in associates includes goodwill identified on acquisition, net of any accumulated impairment loss. The Group's share of its associates' post- acquisition profits or losses is recognised in the income statement, and its share of post- acquisition movements in reserves is recognised in reserves. If the Group's share of losses in an associate equals its investment, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate. c) Jointly controlled entities are those entities over whose activities the Group has joint control, established by contractual agreement. In a number of these, the Group's share of the underlying assets and liabilities may be greater than 50% but the terms of the relevant agreements make it clear that control is not exercised. Jointly controlled entities are accounted for using the equity method from the date that the jointly controlled entity commences until the date that joint control of the entity ceases. If the Group's share of the losses in the jointly controlled entity equals or exceeds its interest in the undertaking, the Group does not recognise further losses unless it has incurred obligations or made payments on behalf of the entity. d) Jointly controlled operations are where the Group undertakes a joint venture, established by contractual agreement, without establishing a separate entity. The Group uses its own assets and incurs its own liabilities, the joint venture agreement provides a means by which revenue and any joint expenses are shared amongst the venturers. The Group recognises its share of the assets it controls, liabilities and cash flows it incurs and its share of the results under each relevant heading in the income statement and balance sheet. e) Intra- Group balances and transactions together with any unrealised gains arising from intra- Group transactions are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with jointly controlled entities and jointly controlled operations are eliminated to the extent of the Group's interest in the entity. The Group's share of unrealised gains arising from transactions with associates is eliminated against the investment in the associate. The Group's share of unrealised losses is eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. 2.4 Foreign currency translation Functional and presentation currency Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (' the functional currency'). The consolidated financial statements are presented in pounds sterling, which is the functional and presentation currency of Laing O'Rourke Corporation Limited and the currency of the primary economic environment in which the Group operates. Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year- end exchange rates of monetary assets and liabilities denominated in foreign currencies, are recognised in the income statement. Translation differences on non- monetary financial assets and liabilities are reported as part of the fair value gain or loss. Translation differences on non- monetary financial assets and liabilities such as equities held at ' fair value through profit or loss' are recognised in profit or loss as part of the fair value gain or loss. Translation differences on non- monetary financial assets such as equities classified as available- for- sale are included in the fair value reserve in equity. Group companies The results and financial position of all Group entities ( none of which has the currency of a hyper- inflationary economy) that has a functional currency different from the presentation currency are translated into the presentation currency as follows: i) assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet; ii) income and expenses for each income statement are translated at average exchange rates; and iii) all resulting exchange differences are recognised in the foreign currency translation reserve. On consolidation, exchange differences arising from the translation of the net investment in foreign operations, and of borrowings designed as hedges of such investments, are taken to shareholders' equity. When a foreign operation is partially disposed of, or sold, exchange differences that were recorded in equity are recognised in the income statement as part of the gain or loss on sale. Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate. Financial statements 62- 63