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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-K

(Mark One)

|x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------------

For the fiscal year ended December 31, 2005



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

Commission File Number 000-21755



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iGATE CORPORATION

(Exact name of
registrant as specified in its charter)



|                                                              |  |                                    
|------------------------------------------------------------- |  | -----------------------------------
|PENNSYLVANIA                                                  |  | 25-1802235                         
|(State or other jurisdictionof incorporation or organization) |  | (I.R.S. EmployerIdentification No.)
|                                                              | 
|1000 Commerce Drive Suite 500 Pittsburgh, PA                  |  | 15275                              
|(Address of principal executive offices)                      |  | (Zip Code)                         

Registrants telephone number, including area code: (412) 506-1131

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.01 par value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes ̈No  x

Indicate by check mark if the
registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.    Yes ̈No  x

Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90
days.     Yes ̈No  x

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the registrants knowledge, in a definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ̈

Indicate by check mark whether the registrant is a large accelerated
filer, an 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 ̈Accelerated filer   x                     Non-accelerated filer ̈

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

The aggregate market value of the voting stock held by non-affiliates of the registrant as of June 30,
2005 (based on the closing price of such stock as reported by NASDAQ on such date) was $77,608,242.

The number of shares of the
registrants Common Stock, par value $.01 per share, outstanding as of February 28, 2006 was 52,900,450 shares.

DOCUMENTS
INCORPORATED BY REFERENCE

Portions of the registrants Proxy Statement, prepared for the Annual Meeting of Shareholders scheduled
for May 25, 2006 to be filed with the Commission are incorporated by reference into Part III of this report.



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iGATE CORPORATION

2005 FORM 10-K

TABLE OF CONTENTS



|           |  |                                                                                                                  |  |     
|---------- |  | ---------------------------------------------------------------------------------------------------------------- |  | ----
|           |  |                                                                                                                  |  | Page
|PART I    
|           |  |                                                                                                                 
|ITEM 1.    |  | BUSINESS                                                                                                         |  | 1   
|ITEM 1A.   |  | RISK FACTORS                                                                                                     |  | 6   
|ITEM 1B.   |  | UNRESOLVED STAFF COMMENTS                                                                                        |  | 12  
|ITEM 2.    |  | PROPERTIES                                                                                                       |  | 12  
|ITEM 3.    |  | LEGAL PROCEEDINGS                                                                                                |  | 13  
|ITEM 4.    |  | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                              |  | 13  
|          
|PART II   
|           |  |                                                                                                                 
|ITEM 5.    |  | MARKET FOR THE REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |  | 14  
|ITEM 6.    |  | SELECTED FINANCIAL DATA                                                                                          |  | 15  
|ITEM 7.    |  | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                            |  | 17  
|ITEM 7A.   |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                                       |  | 35  
|ITEM 8.    |  | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                                      |  | 36  
|ITEM 9.    |  | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                             |  | 78  
|ITEM 9A.   |  | CONTROLS AND PROCEDURES                                                                                          |  | 78  
|ITEM 9B.   |  | OTHER INFORMATION                                                                                                |  |     
|          
|PART III  
|           |  |                                                                                                                 
|ITEM 10.   |  | DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT                                                                   |  | 82  
|ITEM 11.   |  | EXECUTIVE COMPENSATION                                                                                           |  | 82  
|ITEM 12.   |  | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                                                   |  | 83  
|ITEM 13.   |  | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                                                   |  | 83  
|ITEM 14.   |  | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                                                           |  | 83  
|          
|PART IV   
|           |  |                                                                                                                 
|ITEM 15.   |  | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES                                                                       |  | 84  
|           | 
|SIGNATURES |  |                                                                                                                 



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PART I



|ITEM 1. | BUSINESS
|------- | --------

Overview

This Annual Report on Form 10-K (Annual Report) contains statements that are not historical facts and that constitute forward-looking
statements within the meaning of such term under the Private Securities Litigation Reform Act of 1995. These forward-looking statements include our financial growth and liquidity projections as well as statements concerning our plans,
strategies, intentions and beliefs concerning our business, cash flows, costs and the markets in which we operate. Without limiting the foregoing, the words believes, anticipates, plans, expects and
similar expressions are intended to identify certain forward-looking statements. These forward-looking statements are based on information currently available to us, and we assume no obligation to update these statements as circumstances change.
There are risks and uncertainties that could cause actual events to differ materially from these forward-looking statements. While we cannot predict all of the risks and uncertainties, they include, but are not limited to, our ability to predict our
financial performance, the level of market demand for our services, the highly-competitive market for the types of services that we offer, the impact of competitive factors on profit margins, market conditions that could cause our customers to
reduce their spending for our services, our ability to create, acquire and build new businesses and to grow our existing businesses, our ability to attract and retain qualified personnel, our ability to reduce costs and conserve cash, currency
fluctuations and market conditions in India and elsewhere around the world, political and military tensions in India and South Asia, changes in generally accepted accounting principles and/or their interpretation and other risks that are discussed
in the section of Item 1 of this Annual Report entitled Risk Factors and in other sections of this Annual Report, including Managements Discussion and Analysis of Financial Condition and Results of Operations
(MD&A).

Unless otherwise indicated or the context otherwise requires, all references in this report to
iGATE, the Company, us, our, or we are to iGATE Corporation, a Pennsylvania corporation, and its consolidated subsidiaries. iGATE Corporation, formerly named iGATE Capital Corporation,
through its operating subsidiaries, is a worldwide provider of Information Technology (IT) and offshore outsourcing Services to large and medium-sized organizations. These services include client/server design and development,
conversion/migration services, offshore outsourcing, enterprise resource planning (ERP) package implementation and integration services, software development and applications maintenance outsourcing.

Website Access to SEC Reports

The Companys
website is http://www.igatecorp.com. The Companys Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, current reports on Form 8-K and any amendments to these reports are available free of charge on the Investors page of the
Companys website as soon as reasonably practicable after the reports are filed electronically with the Securities and Exchange Commission.

Business Overview

The use of offshore outsourcing for Information Technology and Business Process Outsourcing services
(BPO) has emerged as a global trend in numerous countries and industries. Our clients recognize that offshore outsourcing is a very effective way to provide high quality, timely and cost-effective IT and BPO services. We have developed
an integrated technology and operation (iTOPS)model, whereby the service partner (iGATE) is responsible for the outsourced business process and the underlying technology components.

IT Services which we deliver using our offshore centers include software application development and maintenance, implementation and support of
enterprise applications and data management and integration. We believe that we deliver to our clients high quality solutions at a substantial savings by using our global pool of highly talented people.



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Going forward, our principal strategy is to offer offshore-based IT and BPO services to our clients in
various industries. Some of our current service offerings are non-IT related and include services as diverse as call centers, clinical trials management and mortgage and claims processing. We may continue to expand our BPO service offerings through
acquisitions and strategic relationships and internal initiatives. We believe that such services can be or are being performed offshore, at savings as high as 50% over US labor and infrastructure costs.

The iPS segment provides a variety of client-managed and supervised IT staffing services. These service offerings include design, development and
maintenance of custom applications as well as implementation, integration and support of enterprise packaged applications such as ERP and customer relationship management (CRM) software provided by third party vendors such as SAP,
Oracle, PeopleSoft and Siebel.

Business Developments

During the fourth quarter of 2005 iGS purchased the remaining 51% interest of CIBER India Pvt. Ltd. (CIBER) an India-based joint venture originally started in 2003 by CIBER, Inc and iGATE Global Solutions,
Limited, for a nominal amount.

On November 16, 2005, we sold Mastech Quantum Ltd. (Canada), our wholly owned Canadian
subsidiary for approximately $9.3 million in net cash. Canadas operations were included as part of our iGATE Professional Services (iPS) segment. Canada was not deemed to be a material disposition and as such we were not required
to provide pro-forma disclosures. All information related to the iPS segment as discussed in our Managements Discussion and Analysis section will include Canadas 2005 operations through November 15, 2005.

In February 2005, we completed Phase II of the building of our Whitefield Campus located in Bangalore, India, which added 200,000 square feet to the
existing facility.

In February 2005, we added an additional 25,000 square feet to our existing 50,000 square foot state-of- the-art voice
and data facility at our Noida Center, located in Noida, India. Noida is our offshore call center.

In January 2005, we opened a 35,000
square foot development center in Chennai, India.

Reportable Financial Segments

We segment our business according to our service offerings. Our approach reflects the way we and our chief operating decision makers analyze and manage
our businesses. The composition of segments and measure of segment profitability is consistent with that used by our management. Please refer to Note 16 to our consolidated financial statements which details the financial results of each principal
business segment as well as revenues and assets by geographic region.

The following are brief descriptions of each of our segments.

iGATE Solutions

The
iGATE Solutions segments (iGATE Solutions) service offerings include outsourcing of IT and BPO services using an onsite / offshore delivery model. This delivery model helps clients achieve greater cost effectiveness.

IT services offered include enterprise data management and data warehousing, business intelligence and analytics, design, development, system
integration, package evaluation and implementation, re-engineering and maintenance.

BPO services offered include call center services and
transaction processing services. The call center services are offered to clients across all industries and are not industry specific. The transaction processing services offered are focused on the mortgage banking, insurance and capital market
industries, except for the delivery of finance and accounting functionssuch as accounts payable, billing and collectionwhich can be performed for clients across all industries.



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As we discussed earlier, iGATE Solutions also recently started to offer a combination of IT and BPO
services through its innovative Integrated Technology and Operations (ITOPs) service offering. These services consist of optimizing a clients process and technology, through the use of iGATE Solutions proprietary tools and business
accelerators and finally deliver the process from offshore. Clients are expected to benefit from this innovative business model through more efficient processes and labor arbitrage.

iGATE Solutions has offshore development centers (ODCs) located in Bangalore, Hyderabad, Chennai, Delhi, and Pune, India and Wuxi, China.
iGATE Solutions has global development centers (GDCs) located in Canada and the U.S. The centers can deliver both near shore (work performed primarily at the client site) and offshore services, dependent upon customer
location and expectations. iGATE Solutions operates in India, Canada, the U.S., Europe, Singapore, Malaysia, Japan and Australia.

The
iGATE Solutions segment revenues are derived through iGATE Global Solutions Limited (iGS), our publicly-held Indian subsidiary. Our iGATE Solutions segment has approximately 4,800 employees.

The majority of our clients in the iGATE Solutions segment have headquarters in the U.S. and operations throughout the world. We believe our ODCs and
GDCs are strategically located in order to service any client regardless of size, scale or geographic location.

The iGATE Solutions
segment markets its service offerings to large and medium-sized organizations. Certain contracts are based upon a fixed price with payment based upon deliverables and/or project milestones reached. Certain contracts are time-and-materials based
where contract payments are based on the number of consultant hours worked on the project. Customers typically have the right to cancel contracts with minimal notice. Certain contracts with no stated deliverables, with a designated workforce
assigned, recognize revenues on a straight-line basis over the life of the contract. Contracts with deliverables or project milestones can provide for certain penalties if the deliverables or project milestones are not met within contract timelines.

The iGATE Solutions segment services customers in a wide range of industries. The segments largest customer is General Electric
Company (GE) which accounted for 35%, 37% and 35% of its revenues for the years ended December 31, 2005, 2004 and 2003, respectively. iGS is a Global Preferred Partner of GE. Its Global Preferred Partnership status extends through
the end of 2006.

iGATE Professional Services

The iPS segment provides a variety of client-managed and supervised IT staffing services. These service offerings include design, development and maintenance of custom applications as well as implementation,
integration and support of enterprise packaged applications such as ERP and customer relationship management (CRM) software provided by third party vendors such as SAP, Oracle, PeopleSoft and Siebel.

The iPS segment markets its services to application development managers and information technology directors within prospective customers
companies. The iPS segment also responds to requests for proposals in order to obtain preferred vendor status to secure long-term engagement relationships. iPS contracts provide for payments on a time-and-materials basis, based on the number of
consultant hours worked on the project. Clients typically have the right to cancel contracts with minimal notice.

The iPS segment serves a
wide variety of customers in numerous industries in the U.S. and Canada. The segments largest customers are International Business Machine Corporation (IBM) and Wachovia Bank, which account for approximately 22% and 11% of iPS
revenues in 2005 compared to 23% and 13% in 2004. In 2003, IBM accounted for 19% of revenue. Wachovia did not have a significant concentration in 2003. iPS has approximately 880 employees.

As noted earlier we sold our Canadian operations on November 15, 2005. Our Canadian operations were included as part of iPS through
November 15, 2005. Canada was not deemed to be a material disposition and as such we were not required to provide pro-forma disclosure.



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iGATE Corporate (iGATE)

Our iGATE Corporate segment includes the operations of jobcurry Systems Private Ltd. (jobcurry), iGATE Clinical Research International,
formerly known as iGATE Clinical Management, Inc. (ICRI), DiagnoSearch, corporate and other unallocated costs. jobcurry continues to provide recruiting and placement services for iGATE and outside customers. ICRI and DiagnoSearch
contract with pharmaceutical companies to conduct clinical trials on their behalf. DiagnoSearch performs offshore clinical trials. These entities are excluded from the above segments due largely to their dissimilar service offerings and certain
economic characteristics. This segment has approximately 230 employees.

Accounting Policies

The accounting policies of the segments are the same as those described in the summary of significant accounting policies in Note 1 to the notes to the
consolidated financial statements. We evaluate segment performance based upon profit or loss from operations. We do not allocate income taxes, other income or expense, equity in losses of affiliated companies, minority interest, loss on venture
investments and affiliated companies, gain on sale of stock of subsidiaries and gain on deconsolidation of subsidiaries to segments. In addition, we account for inter-segment sales and transfers at current market prices. All inter-segment sales have
been eliminated in consolidation.

Seasonality

Our operations are generally not affected by seasonal fluctuations. However, our consultants billable hours are affected by national holidays and vacation policies, which vary by country and by operating company.

Competition

The IT services and offshore outsourcing
services industries are highly competitive, and are served by numerous global, national, regional and local firms. Primary competitors in the IT industry include participants from a variety of market segments, including the major consulting firms,
systems consulting and implementation firms, Internet services and consulting companies, applications software firms, India based offshore outsourcing companies, service groups of computer equipment companies, general management consulting firms,
programming companies and temporary staffing firms. We believe that the principal competitive factors in the IT services and offshore outsourcing markets include the range of services offered, size and scale of service provider, global reach,
technical expertise, responsiveness to client needs, speed in delivery of IT solutions, quality of service and perceived value. We believe that we compete favorably with our principal competitors with respect to these factors. Competition for
acquisition candidates, as well as for clients and strategic relationships, may also develop among subsidiaries of iGATE or between iGATE and one or more of our operating subsidiaries or other companies in which we have equity investments.



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Our Partner Companies and Affiliates

The following is a listing as of February 28, 2006 of all of our principal operating subsidiaries and affiliates, including the percentage of our ownership in each of these companies:



|                                           |  |                             |  |                                                         |  |                           |  
|------------------------------------------ |  | --------------------------- |  | ------------------------------------------------------- |  | ------------------------- | -
|Subsidiary www.igatecorp.com               |  | Segment www.igatecorp.com   |  | Business Description                                    |  | Percentage Owned by iGATE |  
|iGATE Mastech, Inc.                        |  | iGATE Professional Services |  | Custom application and design services                  |  | 100                       | %
|Global Financial Services of Nevada, Inc.  |  | iGATE Professional Services |  | Co-managed projectsU.S.                                |  | 100                       | %
|Red Brigade, Ltd.                          |  | iGATE Solutions             |  | Web integration services for the European marketplace   |  | 100                       | %
|jobcurry Systems Private, Ltd.             |  | iGATE Corporate             |  | Worldwide recruiting                                    |  | 100                       | %
|Symphoni Interactive, LLC                  |  | iGATE Solutions             |  | Application development for financial services industry |  | 100                       | %
|DiagnoSearch                               |  | iGATE Corporate             |  | Offshore clinical research                              |  | 95                        | %
|ICRI                                       |  | iGATE Corporate             |  | Clinical ResearchU.S.                                  |  | 100                       | %
|iGATE Global Solutions, Ltd. www.igate.com |  | iGATE Solutions             |  | Offshore outsourcing services                           |  | 81.6                      | %
|Quintant(1)                                |  | iGATE Solutions             |  | Offshore business services provisioning                 |  | 81.6                      | %
|AquaRegia Ltd.(1)                          |  | iGATE Solutions             |  | Offshore enterprise application services                |  | 81.6                      | %
|CIBER India Pvt. Ltd.(1)                   |  | iGATE Solutions             |  | Software services and IT outsourcing                    |  | 81.6                      | %
|Software AG (India) Private Ltd.(1)        |  | iGATE Solutions             |  | Application development and professional services       |  | 40                        | %

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|(1) | Ownership adjusted for minority interest ownership by iGS shareholders.
|--- | -----------------------------------------------------------------------

All of our ownership positions set forth in the chart in this Item 1 have been calculated based on the issued and outstanding common stock or membership interests, as the case may be, of each company/entity,
assuming the issuance of common stock on the conversion or exercise of preferred stock and convertible notes, but excluding the effect of unexercised options, warrants and unvested restricted stock, except for the Quintant acquisition discussed more
fully in the Notes.

Intellectual Property Rights

We rely upon a combination of nondisclosure and other contractual arrangements and trade secrets, copyright and trademark laws to protect our proprietary rights and the proprietary rights of third parties from whom we
license intellectual property. We enter into confidentiality agreements with our employees and limit the distribution of proprietary information. There can be no assurance that the steps we take in this regard will be adequate to deter
misappropriation of proprietary information or that we will be able to detect unauthorized use and take appropriate steps to enforce our intellectual property rights.

Generally, all software that we develop in connection with a client engagement is typically assigned to the client.

Human Resources

Our success depends in large part on our ability to attract, develop, motivate and retain highly skilled IT
professionals. We recruit in a number of countries, including India, the United States, Canada, Bulgaria, the United Kingdom, Singapore, Australia and the Philippines. We advertise in newspapers and trade magazines. In



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addition, our employees are a valuable recruiting tool and are actively involved in referring new employees and screening candidates for new positions.

We have a focused retention strategy that includes career planning, training, benefits and an incentive plan. Our benefits package
includes subsidized health insurance, a 401(k) plan, group life insurance and a long-term disability plan. We intend to continue to use stock options as part of our recruitment and retention strategy. We also have a training infrastructure. We train
employees on a variety of platforms and help them transition from legacy to advanced architecture skills by providing cross-platform training in new technologies. We have implemented an Intranet to allow our employees to access our courseware and
computer-based training modules via the Internet so that the training is available to all employees worldwide at their individual convenience and pace.

At December 31, 2005, iGATE (including its operating subsidiaries) had approximately 5,890 non-unionized employees comprised of approximately 5,300 IT professionals (including subcontractors) and approximately
590 individuals working in sales, recruiting, general and administrative roles. As of December 31, 2005, approximately 33% of our U.S. workforce was working under H-1B temporary work permits in the United States. We believe that our
relationships with our employees are good.



|ITEM 1A. | RISK FACTORS
|-------- | ------------

Our New Business Strategy is Unproven

We have significantly reorganized our business to reflect our business strategy to increase the focus of our offshore delivery business
in India and to expand our offshore business to BPO services, including non-IT related BPO services, and there is no guarantee that this reorganization will be successful. The success of our new business strategy depends in part on the ability of
the iGATE companies to work collaboratively, share information and leverage their collective resources to optimize strategic opportunities and our ability to effectively identify non-IT related BPO services and deliver cost effective solutions. We
cannot be certain that this strategy will improve our performance, and it is possible that the strategy will detract from our performance. If we cannot convince potential strategic partners of the value of our business model, our ability to acquire
new companies and businesses may be adversely affected and our strategy for continued growth may not succeed.

Recruitment and Retention of IT
Professionals

Our business involves the delivery of professional services and is labor-intensive. Our success depends upon our ability
to attract, develop, motivate and retain highly skilled IT professionals and project managers who possess the technical skills and experience necessary to deliver our services. Qualified IT professionals are in demand worldwide and are likely to
remain a limited resource for the foreseeable future. There can be no assurance that qualified IT professionals will continue to be available to us in sufficient numbers, or that we will be successful in retaining current or future employees.
Failure to attract or retain qualified IT professionals in sufficient numbers may have a material adverse effect on our business, operating results and financial condition. Historically, we have done much of our recruiting outside of the countries
where the client work is performed. Accordingly, any perception among our IT professionals, whether or not well founded, that our ability to assist them in obtaining temporary work visas and permanent residency status has been diminished, could lead
to significant employee attrition.

Government Regulation of Offshore Outsourcing

Recently, some organizations have expressed concerns about a perceived association between offshore outsourcing and the loss of jobs in the United States.
Within the last 12 months, some U.S. states have enacted legislation restricting government agencies from outsourcing their back office processes and IT solutions work to



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companies outside the United States. It is also possible that U.S. private sector companies that work with these states may be restricted from outsourcing
their work related to government contracts. We currently do not have significant contracts with U.S. federal or state government entities, however, there can be no assurance that these restrictions will not extend to private companies, such as our
clients. Any changes to existing laws or the enactment of new legislation restricting offshore outsourcing may adversely impact our ability to do business in the United States, particularly if these changes are widespread.

Government Regulation of Immigration

We recruit IT
professionals on a global basis and, therefore, must comply with the immigration laws in the countries in which we operate, particularly the United States. As of December 31, 2005, approximately 33% of our U.S. workforce were working under H-1B
temporary work permits in the United States. Statutory law limits the number of new H-1B petitions that may be approved in a fiscal year, and if we are unable to obtain H-1B visas for our employees in sufficient quantities or at a sufficient rate
for a significant period of time, our business, operating results and financial condition could be adversely affected. On October 1, 2003, the H-1B visa annual quota reverted to 65,000 from 195,000 because the increase in the American
Competitiveness in the Twenty-First Century Act was for a three-year period. As a result, the quota for fiscal year 2004 was exhausted in mid-February of 2004. The quota for fiscal year 2005 was fully allocated in early October of 2004. The
quota for fiscal year 2006 was reached on October 1, 2005.

On December 8, 2004, the President signed the H-1B Reform Act
of 2004. This legislation provides for up to an additional 20,000 H-1B visas per year provided that the H-1B worker possesses at least a Masters degree awarded by a U.S. college or university. Historically, the iGATE operating companies have
hired few H-1B workers with this educational profile.

The H-1B Reform Act of 2004 also reinstated the H-1B
Dependent attestations and the penalties for their noncompliance. The legislation also reinstated the special H-1B training-filing fee and increased the amount to $1,500 and created a new $500 fraud detection and prevention fee.

In recent years, approximately 98% of our H-1B hires were not subject to the annual quota because they were already in the U.S. in H-1B visa status with
another employer. As a result, the negative impact on recruiting of the exhaustion of the fiscal years 20042006 H-1B quotas was not substantial. However, unless Congress substantially increases the annual H-1B quota, the pool of H-1B workers
in the U.S. who were charged against previous years quotas will decline. Such a development would make H-1B worker recruiting more difficult. Absent positive legislation, in the long-term the pool of available H-1B workers in the U.S. that are
not subject to the annual quota may eventually be depleted.

Variability of Quarterly Operating Results

The revenues and operating results of many of the iGATE companies are subject to significant variations from quarter to quarter depending on a number of
factors, including the timing and number of client projects commenced and completed during the quarter, the number of working days in a quarter, employee hiring, attrition and utilization rates and the mix of time-and-materials projects versus
proportional performance and maintenance projects during the quarter. Certain of the iGATE companies recognize revenues on time-and-materials projects as the services are performed, while revenues on proportional performance projects are recognized
using the proportional performance method. Certain contracts with no stated deliverables, with a designated workforce assigned, recognize revenues on a straight-line basis over the life of the contract. Although proportional performance projects
have not contributed significantly to revenues and profitability to date, operating results may be adversely affected in the future by cost overruns on proportional performance projects. Because a high percentage of the expenses of many of the iGATE
companies are relatively fixed, variations in revenues may cause significant variations in operating results. Additionally, the iGATE companies periodically incur cost increases due to both the hiring of new employees and strategic investments in
infrastructure in anticipation of future opportunities for revenue growth.



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Increasing Significance of Non-U.S. Operations and Risks of International Operations

Our international consulting and offshore software development depend greatly upon business immigration and technology transfer laws in those countries,
and upon the continued development of technology infrastructure. There can be no assurance that our international operations will be profitable or support our growth strategy. The risks inherent in our international business activities include:



| |  |  | unexpected changes in regulatory environments;
| | - |  | ----------------------------------------------



| |  |  | foreign currency fluctuations;
| | - |  | ------------------------------



| |  |  | tariffs and other trade barriers;
| | - |  | ---------------------------------



| |  |  | difficulties in managing international operations; and
| | - |  | ------------------------------------------------------



| |  |  | the burden of complying with a wide variety of foreign laws and regulations.
| | - |  | ----------------------------------------------------------------------------

Our failure to manage growth, attract and retain personnel, manage major development efforts, profitably deliver services, or a significant interruption of our ability to transmit data via satellite, could have a
material adverse impact on our ability to successfully maintain and develop our international operations and could have a material adverse effect on our business, operating results and financial condition.

Exposure to Regulatory and General Economic Conditions in India

Our subsidiary iGS utilizes offshore software development centers based in Bangalore, Chennai, Hyderabad, Pune and Noida, India. iGS also operates recruiting and training centers in India. The Indian government exerts
significant influence over its economy. In the recent past, the Indian government has provided significant tax incentives and relaxed certain regulatory restrictions in order to encourage foreign investment in certain sectors of the economy,
including the technology industry. Certain of these benefits that directly affect us include, among others, tax holidays (temporary exemptions from taxation on operating income), liberalized import and export duties and preferential rules on foreign
investment and repatriation. To be eligible for certain of these tax benefits, we must continue to meet certain conditions. A failure to meet such conditions in the future could result in the cancellation of the benefits. There can be no assurance
that such tax benefits will be continued in the future at their current levels. Changes in the business or regulatory climate of India could have a material adverse effect on our business, operating results and financial condition.

Our wage costs in India have historically been significantly lower than wage costs in the United States and Europe for comparably skilled professionals,
and this has been one of our competitive advantages. However, wage increases in India may prevent us from sustaining this competitive advantage and may negatively affect our profit margins. We may need to increase the levels of our employee
compensation more rapidly than in the past to retain talent. Unless we are able to continue to increase the efficiency and productivity of our employees, wage increases in the long term may reduce our profit margins.

Risks Associated with Covenants in Certain Financing Instruments

In September 2005 we renewed our $25.0 million secured credit facility (the PNC Facility) with PNC Bank, N.A (PNC) for 365 days. The PNC Facility contains restrictive covenants that require us
to meet certain financial criteria on a quarterly basis. We may not be able to continue to satisfy the financial covenants in these documents. If we cannot satisfy such covenants and we are not able to renegotiate the terms and conditions thereof,
we may not have access to funds under the PNC Facility. Currently, the most restrictive covenant is the obtainment of Tangible Net Worth of at least $88 million. In addition, the PNC Facility requires that we maintain an aggregate of $30 million in
cash and cash equivalents at all times during the term of the PNC Facility, of which cash and cash equivalents in the amount of $25 million have been pledged to PNC for the term of the PNC Facility. These restrictions on our cash and cash
equivalents may restrict our ability to make investments in new and existing businesses. iGS cannot borrow funds under the PNC Facility.



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Intense Competition in the IT and Offshore Outsourcing Services Industries

The IT and offshore outsourcing services industries are highly competitive and served by numerous global, national, regional and local firms. Primary
competitors include participants from a variety of market segments, including the major consulting firms, systems consulting and implementation firms, India based offshore outsourcing services, applications software firms, service groups of computer
equipment companies, specialized interest consulting firms, programming companies and temporary staffing firms. Many of these competitors have substantially greater financial, technical and marketing resources and greater name recognition than we
have. There are relatively few barriers to entry into our markets and we may face additional competition from new entrants into our markets. In addition, there is a risk that clients may elect to increase their internal resources to satisfy their
applications solutions needs. Further, the IT services industry is undergoing consolidation, which may result in increasing pressure on margins. These factors may limit our ability to increase prices commensurate with increases in compensation.
There can be no assurance that we will compete successfully with existing or new competitors in the IT and offshore outsourcing services markets.

iGATE
Companies May Compete with Each Other

iGATE Companies may compete with each other for customers, talented employees and strategic
relationships and for acquisition opportunities in the IT and offshore outsourcing services industries. Such competition may make it more difficult or costly for iGATE Corporation or other iGATE companies to enter into strategic relationships,
negotiate acquisitions or conduct business.

Risks Related to Inability to Acquire Additional Businesses

We plan to gradually continue to expand our operations through the acquisition of, or investment in, additional businesses and companies. We may be unable
to identify businesses that complement our strategy for growth. If we do succeed in identifying a company with such a business, we may not be able to proceed to acquire the company, its relevant business or an interest in the company for many
reasons, including:



| |  |  | a failure to agree on the terms of the acquisition or investment;
| | - |  | -----------------------------------------------------------------



| |  |  | incompatibility between the Company and the management of the company which we wish to acquire or invest;
| | - |  | ---------------------------------------------------------------------------------------------------------



| |  |  | competition from other potential acquirors;
| | - |  | -------------------------------------------



| |  |  | a lack of capital to make the acquisition or investment; and
| | - |  | ------------------------------------------------------------



| |  |  | the unwillingness of the company to partner with us.
| | - |  | ----------------------------------------------------

If
we are unable to continue acquiring and investing in attractive businesses, our strategy for growth may not succeed.

Risks Related to Completed
Acquisitions

There can be no assurance that we will be able to profitably manage additional businesses or successfully integrate any
acquired businesses without substantial expenses, delays or other operational or financial problems. Further, acquisitions may involve a number of special risks, including diversion of managements attention, failure to retain key acquired
personnel, unanticipated events or circumstances and legal liabilities and amortization of acquired intangible assets, some or all of which could have a material adverse effect on our business, operating results and financial condition. Client
satisfaction or performance problems at a single acquired firm could have a material adverse impact on our reputation as a whole. In addition, there can be no assurance that acquired businesses, if any, will achieve anticipated revenues and
earnings. Our failure to manage our acquisition strategy successfully could have a material adverse effect on our business, operating results and financial condition.



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Risks Associated with Capital Markets

We currently hold interests in non wholly-owned companies. While we generally do not anticipate selling such interests, if we were to divest all or part
of them, we might not receive maximum value for these interests. With respect to such entities with publicly traded stock, we may be unable to sell our interest at then quoted market prices. Furthermore, for those entities that do not have publicly
traded stock, the realizable value of our interest may ultimately prove to be lower than the carrying value currently reflected in our Consolidated Financial Statements. Due to market conditions, it may be difficult for private companies in which we
have invested to undertake public offerings.

Impairment Analysis May Lead to Recognition of Losses

The carrying amount of the goodwill on our balance sheet was $8.9 million as of December 31, 2005. We periodically assess the potential impairment of
our long-lived assets, such as goodwill, as appropriate. If, as a result of such an assessment, we were to determine that the carrying amount of this goodwill was not recoverable, we would reduce the carrying amount in the period in which the
determination was made. Any reduction would result in the recognition of a one-time impairment loss, which would have an adverse effect on our financial results in the period in which the loss was recognized.

The carrying amount of our investments in unconsolidated affiliates was $1.1 million as of December 31, 2005. If we were to determine that the value
of such investments had declines judged to be permanent or other than temporary, we would reduce the carrying amount of the investments. Any reduction would result in the recognition of a one-time impairment loss, which would have an adverse effect
on our financial results in the period in which the loss was recognized.

Concentration of Revenues; Risk of Termination

Our revenues are highly dependent on clients primarily located in the United States, as well as clients concentrated in certain industries, and economic
slowdowns, changes in U.S. law and other restrictions or factors that affect the economic health of these industries may affect our business. In the year ended December 31, 2005, approximately 75% of our revenues were derived from the United
States. Consequently, if our clients reduce or postpone their IT spending significantly, this may lower the demand for our services and negatively affect our revenues and profitability. Further, any significant decrease in the growth of the
financial services or other industry segments on which we focus may reduce the demand for our services and negatively affect our revenues and profitability.

We have in the past derived, and may in the future derive, a significant portion of our revenues from a relatively limited number of clients. Our five largest clients represented approximately 42%, 46% and 38% of
revenues for the years ended December 31, 2005, 2004 and 2003, respectively. In the years ended December 31, 2005, 2004 and 2003, GE accounted for 18%, 19% and 22% of our revenues, respectively. Most of our projects are terminable by the
client without penalty. An unanticipated termination of a major project could result in the loss of substantial anticipated revenues and could require us to maintain or terminate a significant number of unassigned IT professionals, resulting in a
higher number of unassigned IT professionals and/or significant termination expenses. The loss of any significant client or project could have a material adverse effect on our business, operating results and financial condition.

Rapid Technological Change; Dependence on New Solutions

The IT and offshore outsourcing services industries are characterized by rapid technological change, evolving industry standards, changing client preferences and new product introductions. Our success will depend in part on our ability to
develop IT solutions that keep pace with industry developments. There can be no assurance that we will be successful in addressing these developments on a timely basis or that, if these developments are addressed, we will be successful in the
marketplace. In addition, there can be no assurance that



10



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products or technologies developed by others will not render our services noncompetitive or obsolete. Our failure to address these developments could have a
material adverse effect on our business, operating results and financial condition.

A significant number of organizations are attempting
to migrate business applications to advanced technologies. As a result, our ability to remain competitive will be dependent on several factors, including our ability to develop, train and hire employees with skills in advanced technologies. Our
failure to hire, train and retain employees with such skills could have a material adverse impact on our business. Our ability to remain competitive will also be dependent on our ability to design and implement, in a timely and cost-effective
manner, effective transition strategies for clients moving to advanced architectures. Our failure to design and implement such transition strategies in a timely and cost-effective manner could have a material adverse effect on our business,
operating results and financial condition.

Dependence on Principals

Our success is highly dependent on the efforts and abilities of our executive management: Sunil Wadhwani and Ashok Trivedi, the Co-Chairman and Chief Executive Officer of iGATE Corporation and the Co-Chairman and
President of iGATE Corporation, Phaneesh Murthy, Chief Executive Officer of iGS and Steve Shangold, Chief Executive Officer of iGATE Mastech, Inc. Although each executive has entered into employment agreements containing noncompetition,
nondisclosure and nonsolicitation covenants, these contracts do not guarantee that they will continue their employment with us or that such covenants will be enforceable. The loss of the services of either of these key executives for any reason
could have a material adverse effect on our business, operating results and financial condition.

Risk of Preferred Vendor Contracts

We are party to several preferred vendor contracts and we are seeking additional similar contracts in order to obtain new or additional
business from large or medium-sized clients. Clients enter into these contracts to reduce the number of vendors and obtain better pricing in return for a potential increase in the volume of business to the preferred vendor. While these contracts are
expected to generate higher volumes, they generally result in lower margins. Although we attempt to lower costs to maintain margins, there can be no assurance that we will be able to sustain margins on such contracts. In addition, the failure to be
designated a preferred vendor, or the loss of such status, may preclude us from providing services to existing or potential clients, except as a subcontractor, which could have a material adverse effect on our business, operating results and
financial condition.

Risks Associated with Intellectual Property Rights

Our success depends in part upon certain methodologies and tools we use in designing, developing and implementing applications systems and other
proprietary intellectual property rights. We rely upon a combination of nondisclosure and other contractual arrangements and trade secrets, copyright and trademark laws to protect our proprietary rights and the proprietary rights of third parties
from whom we license intellectual property. We enter into confidentiality agreements with our employees and limit distribution of proprietary information. There can be no assurance that the steps we take in this regard will be adequate to deter
misappropriation of proprietary information or that we will be able to detect unauthorized use and take appropriate steps to enforce our intellectual property rights.

Although we believe that our services do not infringe on the intellectual property rights of others and that we have all rights necessary to utilize the intellectual property employed in our business, we are subject
to the risk of litigation alleging infringement of third-party intellectual property rights. Any claims, whether or not meritorious, could:



| |  |  | be expensive and time-consuming to defend;
| | - |  | ------------------------------------------



| |  |  | cause significant installation delays;
| | - |  | --------------------------------------



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| |  |  | divert managements attention and resources; and/or
| | - |  | ---------------------------------------------------



| |  |  | require us to enter into royalty or licensing arrangements, which may not be available on acceptable terms, or may not be available at all.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------

A successful claim of product infringement against us or our failure or inability to license the infringed or similar technology could have a material
adverse effect on our business, financial condition and results of operations.

Fixed-Price Projects

We undertake certain projects billed on a fixed-price basis. We recognize revenue from these contracts on a proportional performance basis, which is
different from our principal method of billing, the time-and-materials basis. Failure to complete such projects within budget would expose us to risks associated with cost overruns, which could have a material adverse effect on our business,
operating results and financial condition.

Potential Liability to Clients

Many of our engagements involve projects that are critical to the operations of our clients businesses and provide benefits that may be difficult to
quantify. Although we attempt to contractually limit our liability for damages arising from errors, mistakes, omissions or negligent acts in rendering our services, there can be no assurance that our attempts to limit liability will be successful.
Our failure or inability to meet a clients expectations in the performance of our services could result in a material adverse change to the clients operations and therefore could give rise to claims against us or damage our reputation,
adversely affecting our business, operating results and financial condition.



|ITEM 1B. | UNRESOLVED STAFF COMMENTS
|-------- | -------------------------

None.



|ITEM 2. | PROPERTIES
|------- | ----------

Information regarding the principal
properties owned and leased by the Company and its subsidiaries as of December 31, 2005 is set forth below:



|                         |  |                 |  |                                                                                          |  |                           
|------------------------ |  | --------------- |  | ---------------------------------------------------------------------------------------- |  | --------------------------
|Location                 |  | Segment         |  | Principal Use                                                                            |  | Approximate Square Footage
|Pittsburgh, Pennsylvania |  | iGATE /iPS      |  | Corporate headquarters, management administration, human resources, sales, and marketing |  | 30,000                    
|Chennai, India           |  | iGATE Solutions |  | iGS offshore development center                                                          |  | 100,000                   
|Bangalore, India         |  | iGATE Solutions |  | iGS Whitefield campus and offshore development center                                    |  | 352,000                   
|Pune, India              |  | iGATE           |  | jobcurry headquarters                                                                    |  | 15,000                    
|Hyderabad, India         |  | iGATE Solutions |  | iGS offshore development center                                                          |  | 63,000                    
|Noida, India             |  | iGATE Solutions |  | iGATE Global Process Outsourcing Ltd.                                                    |  | 80,000                    



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iGS leases approximately 67,000 square feet of office space in the Indian cities of Chennai and Pune from
the principal shareholders of iGATE. Refer to Note 18 to notes to unconsolidated financial statements for further discussion.

In addition
to the properties listed above, the Company and its subsidiaries lease sales offices in many IT services markets in the United States and throughout the world. These locations allow the Company to respond quickly to the needs of its clients and to
recruit qualified IT professionals in these markets.



|ITEM 3. | LEGAL PROCEEDINGS
|------- | -----------------

In the ordinary course of our
business, we are involved in a number of lawsuits and administrative proceedings. While uncertainties are inherent in the final outcome of these matters, Company management believes, after consultation with legal counsel, that the disposition of
these proceedings should not have a material adverse effect on our financial position, results of operations or cash flows. Certain proceedings are more fully discussed in Note 9 to our consolidated financial statements.



|ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
|------- | ---------------------------------------------------

There were no matters submitted to a vote of shareholders during the fourth quarter of 2005.



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PART II



|ITEM 5. | MARKET FOR THE REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|------- | ----------------------------------------------------------------------------------------------------------------

Our Common Stock is traded on the NASDAQ National Market under the ticker symbol IGTE. The following table sets forth, for the periods
indicated, the range of high and low closing sale prices for iGATE Corporation Common Stock as reported on the NASDAQ National Market.



|               |  |      |       |     |   |      
|-------------- |  | ---- | ----- | --- | - | -----
|               |  | High |       | Low
|2005           |  |      |       |     |   |      
|First Quarter  |  | $    | 4.630 |     | $ | 3.660
|Second Quarter |  |      | 4.410 |     |   | 3.460
|Third Quarter  |  |      | 4.080 |     |   | 3.440
|Fourth Quarter |  | $    | 5.010 |     | $ | 3.500
|               |  |     
|2004           |  |      |       |     |   |      
|First Quarter  |  | $    | 8.870 |     | $ | 6.730
|Second Quarter |  |      | 7.480 |     |   | 3.960
|Third Quarter  |  |      | 3.940 |     |   | 2.840
|Fourth Quarter |  | $    | 4.300 |     | $ | 3.500

On February 28, 2006, we had 167 registered holders of record of our Common Stock.

We are prohibited from paying dividends under the PNC Facility. See Note 7 to our consolidated financial statements.

We currently have no program regarding the purchase of our Common Stock.



14



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##### Table of Contents

|ITEM 6. | SELECTED FINANCIAL DATA
|------- | -----------------------



|                                                                                                                   |  |                                       |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|------------------------------------------------------------------------------------------------------------------ |  | ------------------------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | - |  | ---- | ------- | - |  | - | ------- | -
|                                                                                                                   |  | Year Ended December 31,               |        
|                                                                                                                   |  | 2005                                  |         |   | 2004 |   |         | 2003 |  |   | 2002    |   |  | 2001 |        
|                                                                                                                   |  | (in thousands, except per share data) |        
|Statement of Operations Data(1):                                                                                   |  |                                       |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Revenues(2)                                                                                                        |  | $                                     | 275,992 |   |      | $ | 264,585 |      |  | $ | 240,634 |   |  | $    | 250,851 |   |  | $ | 379,395 |  
|Gross margin(3)                                                                                                    |  |                                       | 70,882  |   |      |   | 67,008  |      |  |   | 68,980  |   |  |      | 77,604  |   |  |   | 120,522 |  
|Gain on sale of land                                                                                               |  |                                       |        |   |      |   | (3,615  | )    |  |   |        |   |  |      |        |   |  |   |        |  
|Restructuring (recovery) charges(4)                                                                                |  |                                       | (481    | ) |      |   | 5,805   |      |  |   | 604     |   |  |      | 4,232   |   |  |   | 9,801   |  
|Goodwill impairment(5)                                                                                             |  |                                       |        |   |      |   |        |      |  |   |        |   |  |      | 25,964  |   |  |   | 32,716  |  
|Income (loss) from operations                                                                                      |  |                                       | 3,880   |   |      |   | (17,261 | )    |  |   | (4,560  | ) |  |      | (25,036 | ) |  |   | (45,124 | )
|Other (expense) income, net                                                                                        |  |                                       | (275    | ) |      |   | 1,374   |      |  |   | 1,560   |   |  |      | 1,463   |   |  |   | (3,711  | )
|Equity in income (losses) of affiliated companies                                                                  |  |                                       | 338     |   |      |   | (335    | )    |  |   | (99     | ) |  |      |        |   |  |   | (7,977  | )
|Minority interest                                                                                                  |  |                                       | (261    | ) |      |   | (677    | )    |  |   | (312    | ) |  |      | (441    | ) |  |   | (1,337  | )
|Gain on deconsolidation of subsidiary                                                                              |  |                                       |        |   |      |   |        |      |  |   |        |   |  |      | 7,086   |   |  |   |        |  
|Gain on sale of stock of subsidiaries                                                                              |  |                                       | 5,549   |   |      |   |        |      |  |   |        |   |  |      |        |   |  |   | 10,901  |  
|Loss on venture investments and affiliated companies, net(6)                                                       |  |                                       | (2,149  | ) |      |   |        |      |  |   | (28     | ) |  |      | (7,610  | ) |  |   | (9,029  | )
|Income (loss) before income taxes and cumulative effect of change in accounting principle                          |  |                                       | 7,082   |   |      |   | (16,899 | )    |  |   | (3,439  | ) |  |      | (24,538 | ) |  |   | (56,277 | )
|Income tax provision (benefit)                                                                                     |  |                                       | 113     |   |      |   | 5,130   |      |  |   | 2,179   |   |  |      | (339    | ) |  |   | (4,348  | )
|                                                                                                                   |  |                                       |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Income (loss) before cumulative effect of change in accounting principle                                           |  |                                       | 6,969   |   |      |   | (22,029 | )    |  |   | (5,618  | ) |  |      | (24,199 | ) |  |   | (51,929 | )
|Cumulative effect of change in accounting principle, net of tax of $592(9)                                         |  |                                       |        |   |      |   |        |      |  |   |        |   |  |      |        |   |  |   | 887     |  
|Income (loss) from continuing operations                                                                           |  |                                       | 6,969   |   |      |   | (22,029 | )    |  |   | (5,618  | ) |  |      | (24,199 | ) |  |   | (51,042 | )
|Income (loss) from discontinued operations, net of income taxes(1)                                                 |  |                                       |        |   |      |   | 3,818   |      |  |   | (3,402  | ) |  |      | (3,292  | ) |  |   | (4,445  | )
|                                                                                                                   |  |                                       |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Net income (loss)                                                                                                  |  | $                                     | 6,969   |   |      | $ | (18,211 | )    |  | $ | (9,020  | ) |  | $    | (27,491 | ) |  | $ | (55,487 | )
|                                                                                                                   |  |                                       |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Net earnings (loss) per common share, basic and diluted before cumulative effect of change in accounting principle |  | $                                     | 0.13    |   |      | $ | (0.42   | )    |  | $ | (0.11   | ) |  | $    | (0.47   | ) |  | $ | (1.01   | )
|Cumulative effect of change in accounting principle per share                                                      |  |                                       |        |   |      |   |        |      |  |   |        |   |  |      |        |   |  |   | 0.02    |  
|Earnings (loss) from continuing operations per share                                                               |  |                                       | 0.13    |   |      |   | (0.42   | )    |  |   | (0.11   | ) |  |      | (0.47   | ) |  |   | (1.00   | )
|Earnings (loss) from discontinued operations per share                                                             |  |                                       |        |   |      |   | 0.07    |      |  |   | (0.07   | ) |  |      | (0.06   | ) |  |   | (0.09   | )
|                                                                                                                   |  |                                       |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Net earnings (loss) per common share, basic and diluted                                                            |  | $                                     | 0.13    |   |      | $ | (0.35   | )    |  | $ | (0.17   | ) |  | $    | (0.54   | ) |  | $ | (1.08   | )
|                                                                                                                   |  |                                       |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Weighted average common shares, basic(7)                                                                           |  |                                       | 52,530  |   |      |   | 52,721  |      |  |   | 51,697  |   |  |      | 51,304  |   |  |   | 51,241  |  
|                                                                                                                   |  |                                       |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Weighted average common shares, diluted(7)                                                                         |  |                                       | 52,734  |   |      |   | 52,721  |      |  |   | 51,697  |   |  |      | 51,304  |   |  |   | 51,241  |  
|                                                                                                                   |  |                                       |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Balance Sheet Data:                                                                                                |  |                                       |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Cash and cash equivalents                                                                                          |  | $                                     | 45,837  |   |      | $ | 28,201  |      |  | $ | 36,133  |   |  | $    | 56,793  |   |  | $ | 54,438  |  
|Investments and restricted cash                                                                                    |  |                                       | 30,798  |   |      |   | 35,863  |      |  |   | 39,582  |   |  |      | 51,188  |   |  |   | 41,314  |  
|Working capital(8)                                                                                                 |  |                                       | 102,327 |   |      |   | 93,846  |      |  |   | 101,293 |   |  |      | 116,184 |   |  |   | 125,354 |  
|Total assets                                                                                                       |  |                                       | 177,474 |   |      |   | 180,232 |      |  |   | 180,940 |   |  |      | 188,940 |   |  |   | 242,111 |  
|Long-term debt                                                                                                     |  |                                       |        |   |      |   |        |      |  |   |        |   |  |      |        |   |  |   | 10,000  |  
|Total shareholders equity                                                                                         |  | $                                     | 117,672 |   |      | $ | 111,700 |      |  | $ | 122,135 |   |  | $    | 117,149 |   |  | $ | 143,376 |  

---

|(1) | In June 2004, we sold our subsidiary located in Sydney, Australia, iGATE Australia Pty. Ltd. (iGATE Australia). In April 2004, we sold our subsidiary located in
Edinburgh, Scotland, Direct Resources Scotland Ltd. (DRI). As required under accounting rules, these dispositions are presented as discontinued operations, net of applicable statutory taxes.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|(2) | In 2002, the Company adopted the provisions of (EITF) Issue No. 01-14, Income Statement Characterization of Reimbursement (EITF 01-14) and now
accounts for billable expenses as a component of both revenue and cost of revenues. Prior periods were reclassified for this change.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Effective January 1, 2003, we began to classify costs for consultants not being utilized (i.e. bench costs) as cost of revenues. In prior years, these costs were
classified as selling, general and administrative (S,G&A) costs. All prior reporting periods were reclassified to reflect the changes to our segment reporting and our classification of bench costs.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | In 2005, we sold Canada, and reversed $0.5 million of previously recorded restructuring charges that we associated with our 2001 and 2004 Canada restructurings. In 2004, we incurred
$5.8 million in connection with our restructuring of our United Kingdom and Canadian operations. In 2003, we revised our restructuring estimates and incurred an additional $0.6 million in connection with our 2002 restructuring plan. In 2002, we
incurred $4.2 million in connection with a restructuring plan. In 2001, we incurred $6.5 million, $0.9 million and $2.4 million in connection with our restructuring, merger of IRG into eJiva and charges associated with an executive employment
agreement.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | In 2002, we incurred $26.0 million in total charges related to goodwill impairments consisting of $24.3 million in our iGATE Solutions reporting unit and $1.7 million in our iPS
reporting unit. In 2001, we incurred $32.7 million in total charges related to goodwill impairments of $22.3 million in our iPS reporting unit and $10.4 million in our iGATE Solutions reporting unit.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) | In 2005, we recorded an impairment charge on our investment in Concours in the amount of $2.4 million, which was offset by a gain of $0.3 million on the remaining shares of stock of
ScanSoft (f/n/a Speechworks, Inc.). The fiscal years ended 2002 and 2001 include the impairment charges of Air2Web and various venture and other investments.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | For the fiscal years ended December 31, 2004, 2003, 2002 and 2001, basic and diluted shares are equal because we incurred net losses for these years presented.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

|(8) | Working capital represents current assets less current liabilities.
|--- | -------------------------------------------------------------------

|(9) | In 2001, we recorded a gain on the cumulative effect of a change in accounting principle of $0.9 million, net of tax. The net gain resulted from our implementation of SFAS
No. 133 Accounting for Derivative Investments and Hedging Activities on January 1, 2001. The net gain resulted from recording the net value of our derivative investments in ScanSoft (f/k/a Speechworks)
Speechworks common stock warrants.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

|ITEM 7. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- | -------------------------------------------------------------------------------------

Overview

iGATE Corporation, formerly named iGATE Capital Corporation, through its operating
subsidiaries, is a provider of IT and offshore outsourcing services to large and medium-sized organizations. From inception and through February 2000, we conducted the majority of our business under the name of Mastech Corporation through our wholly
owned subsidiary Mastech Systems Corporation, a Pennsylvania corporation that was formed in July 1986.

In March 2000, we transferred
substantially all of the assets of Mastech Systems Corporation to subsidiary operating companies.

Our operating subsidiaries provide
clients with a source for a broad range of IT applications solutions and offshore outsourcing Services including: client/server design and development, conversion/migration services, ERP package implementation and integration services, software
development and applications maintenance outsourcing.

Critical Accounting Policies

The following explains our most critical accounting policies. See Note 1 to the Consolidated Financial Statements set forth on pages 45 to 52 of this Form
10-K for a complete description of our significant accounting policies.

Revenue Recognition

We recognize revenue on time-and-materials contracts as the services are performed. Time and materials contracts typically bill at an agreed upon hourly
rate. Revenue is earned when our consultants are working on projects. Revenue recognition is negatively impacted by holidays and consultant vacation and sick days. We also have fixed price arrangements with certain customers. A price for an entire
project is agreed upon for a predetermined fee before the project starts. We recognize revenues on fixed-price contracts using the proportional performance method. We prepare a budget for each fixed price project, and based upon the budget that we
prepare, we estimate what our costs should be. We determine performance by comparing the actual cost of work performed to date to the estimated total cost for each contract. We recognize revenue based upon costs incurred by our consultants during
the period. If our estimates indicate a loss on a particular fixed price contract, we record a provision for the estimated loss without regard to the stage of completion. Changes in job performance, conditions and estimated profitability may result
in revisions to costs and revenues and are recognized in the period in which the changes are identified. Certain contracts with no stated deliverables, with a designated workforce assigned, recognize revenues on a straight-line basis over the life
of the contract. Revenue on these contracts is ratable and predetermined based upon the negotiated contract.

Accounts Receivable and
Allowance for Uncollectible Accounts

We extend credit to clients based upon managements assessment of their creditworthiness. The
majority of our revenues (and the resulting accounts receivable) are from Fortune 1000 companies and major systems integrators.

Unbilled
receivables represent amounts recognized as revenues for the periods presented based on services performed in accordance with the terms of client contracts that will be invoiced in subsequent periods.

We review accounts receivable periodically to determine the probability of loss. The allowance for uncollectible accounts is determined using the
combination of the specific identification method for balances deemed uncollectible, as well as judgments made by us based upon historical and expected charge-off



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experience. If the financial condition of our customers deteriorates or if economic conditions worsen, additional allowances may be necessary, which may
impact earnings.

Investments

The Company accounts for its investments in marketable equity securities in accordance with Statements of Financial Accounting Standards (SFAS) No. 115, Accounting for Certain Investments in Debt and Equity
Securities (SFAS 115). The Company has determined that certain of its investments in marketable equity securities are classified as available-for-sale and recorded at fair value, utilizing the investments closing price at each
reporting period. These investments are recorded on the balance sheet at market value, with the unrealized gains or losses, net of tax, reported as a component of accumulated other comprehensive income in the Consolidated Statement of
Shareholders Equity and Comprehensive Loss. The unrealized gain or loss is the difference between the Companys original cost for an investment and the investments fair value at each reporting period. Realized gains or losses on
securities sold are calculated using the specific identification method.

If management determines that an investment in available for sale
securities has sustained an other-than-temporary decline in its value, the investment is written down to its fair value, by a charge to earnings. Such evaluation is dependent on the specific facts and circumstances. Factors that are considered by
the Company in determining whether an other-than-temporary decline in value has occurred include: the market value of the security in relation to its cost basis; the financial condition of the investee; and the intent and ability to retain the
investment for a sufficient period of time to allow for recovery in the market value of the investment.

In evaluating these factors above,
management presumes a decline in value to be other-than-temporary if the market price of the security is 20% or more below the investments cost basis for a period of six months or more (the 20% criteria). However, the presumption
of an other-than-temporary decline in these instances may be overcome if there is persuasive evidence indicating that the decline is temporary in nature (e.g., strong operating performance of investee, historical volatility of investee, etc.).
Additionally, there may be instances where impairment losses are recognized even if the 20% criteria is not satisfied (e.g., plan to sell the security in the near term and the fair value is below the Companys cost basis). During 2003, the
Company incurred impairment losses deemed to be other-than-temporary. These impairments are disclosed in Note 4. No such impairment losses were incurred in 2005 or 2004.

For investments accounted for using the cost or equity method of accounting, management evaluates information (e.g., budgets, business plans, financial statements, etc.) in addition to quoted market price, if any, in
determining whether an other-than-temporary decline in value exists. Factors indicative of an other-than-temporary decline include recurring operating losses, credit defaults and subsequent rounds of financings at an amount below the cost basis of
an investment. This list is not all inclusive and management weighs all quantitative factors in determining if an other-than-temporary decline in value of an investment has occurred. In 2005, the Company recorded an impairment of $2.5 million on its
investment in Concours, Inc. There were no impairments recorded in 2004.

Goodwill and Intangible Assets

Goodwill is the excess of purchase price over the value of the net assets acquired. Goodwill is assessed for impairment at least annually or as triggering
events occur. In making this assessment, we rely on a combination of factors including operating results, business plans, economic projections, anticipated cash flows and our current market value. There are inherent uncertainties related to these
factors and managements judgment in applying them to the analyses of goodwill impairment. Under SFAS 142, goodwill impairment is deemed to exist if the net book value of a reporting unit exceeds its estimated fair value. Estimated fair values
of reporting units underlying the segments were estimated using either a discounted cash flow methodology, recent comparable transactions or a combination thereof. For further discussions, see Note 5 to the Consolidated Financial Statements.



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Stock Based Compensation

At December 31, 2005, the Company had three stock-based employee compensation plans, which are described more fully in Note 11. SFAS No. 123,
Accounting for Stock-Based Compensation (SFAS 123), gives companies the option to adopt the fair value method for expense recognition of employee stock options or to continue to account for employee stock options using the
intrinsic value method, as outlined under Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees(APB 25). The Company has elected to continue to apply the intrinsic value method to
account for employee stock options and discloses the pro-forma effect as if the fair value method had been applied in Note 11. The following table illustrates the effect on net loss per share if the Company had applied the fair value recognition
provisions of SFAS 123 to stock-based employee compensation:



|                                                                                                                                          |  |                                         |        |   |      |   |         |      |  |   |        |  
|----------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------- | ------ | - | ---- | - | ------- | ---- |  | - | ------ | -
|                                                                                                                                          |  | Year ended December 31,                 |       
|                                                                                                                                          |  | 2005                                    |        |   | 2004 |   |         | 2003 | 
|                                                                                                                                          |  | (in thousands,except per share amounts) |       
|Net income (loss), as reported                                                                                                            |  | $                                       | 6,969  |   |      | $ | (18,211 | )    |  | $ | (9,020 | )
|Add: Deferred compensation expense reported in earnings                                                                                   |  |                                         | 815    |   |      |   | 14,296  |      |  |   | 1,631  |  
|Less: Total stock-based employee compensation expense determined under fair value method for all awards and deferred compensation
expense |  |                                         | (2,385 | ) |      |   | (15,076 | )    |  |   | (2,298 | )
|                                                                                                                                          |  |                                         |        |   |      |   |         |      |  |   |        |  
|Pro-forma net income (loss)                                                                                                               |  | $                                       | 5,399  |   |      | $ | (18,991 | )    |  | $ | (9,687 | )
|                                                                                                                                          |  |                                         |        |   |      |   |         |      |  |   |        |  
|Earnings (loss) per share:                                                                                                                |  |                                         |        |   |      |   |         |      |  |   |        |  
|Basic and diluted                                                                                                                         |  |                                         |        |   |      |   |         |      |  |   |        |  
|As reported                                                                                                                               |  | $                                       | 0.13   |   |      | $ | (0.35   | )    |  | $ | (0.17  | )
|                                                                                                                                          |  |                                         |        |   |      |   |         |      |  |   |        |  
|Pro-forma                                                                                                                                 |  | $                                       | 0.10   |   |      | $ | (0.36   | )    |  | $ | (0.19  | )
|                                                                                                                                          |  |                                         |        |   |      |   |         |      |  |   |        |  

Income Taxes

We record an estimated liability for income and other taxes based on what we determine will likely be paid in the various tax jurisdictions in which we operate. Management uses its best judgment in the determination
of these amounts. However, the liabilities ultimately realized and paid are dependent on various matters, including the resolution of the tax audits in the various affected tax jurisdictions, and may differ from the amounts recorded. An adjustment
to the estimated liability would be recorded through income in the period in which it becomes probable that the amount of the actual liability differs from the amount recorded.

We record valuation allowances to reduce deferred tax assets to the amount that is more likely than not to be realized. When assessing the need for
valuation allowances, we consider future taxable income and ongoing prudent and feasible tax planning strategies. Should a change in circumstances lead to a change in judgment about the realizability of deferred tax assets in future years, we would
adjust related valuation allowances in the period that the change in circumstances occurs, along with a corresponding increase or charge to income.

Recently Issued Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board (FASB)
issued FASB No. 123 (R), Share-based Payment.FASB No. 123 (R) requires employers to value share-based payments using the fair value method, eliminating the option to use the intrinsic method to value such payments. We will
adopt the provisions of SFAS 123 (R) prospectively beginning in the first quarter of 2006. We are currently evaluating the effect of the provision of this statement on our Consolidated Financial Statements.

In March 2005, the Financial Accounting Standards Board issued FASB Interpretation No. 47, Accounting for Conditional Asset Retirement
Obligations (FIN 47), an interpretation of SFAS 143. FIN 47 clarifies that



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the term conditional asset retirement obligation as used in SFAS 143 refers to a legal obligation to perform an asset retirement activity in
which the timing and (or) method of settlement are conditional on a future event that may or may not be within the control of the entity. An entity is required to recognize a liability for the fair value of a conditional asset retirement obligation
if the fair value of the liability can be reasonably estimated, even if conditional on a future event. FIN 47 is effective no later than the end of fiscal years ending after December 15, 2005. The adoption of this standard did not have a
material impact on our Consolidated Financial Statements.

In May 2005, the Financial Accounting Standards Board issued FASB Statement
No. 154, Accounting Changes and Error Corrections (as amended)(FASB 154). This Statement replaces APB Opinion No. 20, Accounting Changes, and FASB Statement No. 3, Reporting Accounting Changes in Interim
Financial Statements, and changes the requirements for the accounting for and reporting of a change in accounting principle. This Statement applies to all voluntary changes in accounting principle. It also applies to changes required by an
accounting pronouncement in the unusual instance that the pronouncement does not include specific transition provisions. This Statement shall be effective for accounting changes and corrections of errors made in fiscal years beginning after
December 15, 2005. This Statement does not change the transition provisions of any existing accounting pronouncements, including those that are in a transition phase as of the effective date of this Statement.

Use of Estimates in the Preparation of Financial Statements

The preparation of our financial statements requires us to make certain 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. All of the estimates that we make in preparing our financial statements are in conformity with accounting principles generally accepted in the United States of
America. Actual results could differ from our estimates, which could impact our earnings.



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Results of Operations of Our Operating Segments: iGATE Solutions, iPS and iGATE Corporate for the Year Ended
December 31, 2005 as Compared to the Year Ended December 31, 2004:



|                                                          |  |                              |         |                             |   |         |                    |  |   |         |   |  |   |         |  
|--------------------------------------------------------- |  | ---------------------------- | ------- | --------------------------- | - | ------- | ------------------ |  | - | ------- | - |  | - | ------- | -
|                                                          |  | Year Ended December 31, 2005 |        
|                                                          |  | iGATE Solutions              |         | iGATE Professional Services |   |         | iGATE Corporate(1) |  |   | Total   |  
|                                                          |  | (Dollars in thousands)       |        
|External revenues                                         |  | $                            | 138,032 |                             | $ | 135,424 |                    |  | $ | 2,536   |   |  | $ | 275,992 |  
|Cost of revenues                                          |  |                              | 97,108  |                             |   | 106,635 |                    |  |   | 1,367   |   |  |   | 205,110 |  
|                                                          |  |                              |         |                             |   |         |                    |  |   |         |   |  |   |         |  
|Gross margin                                              |  |                              | 40,924  |                             |   | 28,789  |                    |  |   | 1,169   |   |  |   | 70,882  |  
|Selling, general and administrative                       |  |                              | 38,948  |                             |   | 16,443  |                    |  |   | 12,092  |   |  |   | 67,483  |  
|Restructuring recovery                                    |  |                              |        |                             |   | (481    | )                  |  |   |        |   |  |   | (481    | )
|                                                          |  |                              |         |                             |   |         |                    |  |   |         |   |  |   |         |  
|Income (loss) from operations                             |  | $                            | 1,976   |                             | $ | 12,827  |                    |  |   | (10,923 | ) |  |   | 3,880   |  
|                                                          |  |                              |         |                             |   |         |                    |  |   |         |   |  |   |         |  
|Other expense, net                                        |  |                              |         |                             |   |         |                    |  |   | (275    | ) |  |   | (275    | )
|Minority interest                                         |  |                              |         |                             |   |         |                    |  |   | (261    | ) |  |   | (261    | )
|Gain on sale of stock of subsidiaries                     |  |                              |         |                             |   |         |                    |  |   | 5,549   |   |  |   | 5,549   |  
|Loss on venture investments and affiliated companies, net |  |                              |         |                             |   |         |                    |  |   | (2,149  | ) |  |   | (2,149  | )
|Equity in income of affiliated companies                  |  |                              |         |                             |   |         |                    |  |   | 338     |   |  |   | 338     |  
|                                                          |  |                              |         |                             |   |         |                    |  |   |         |   |  |   |         |  
|(Loss) income before income taxes                         |  |                              |         |                             |   |         |                    |  | $ | (7,721  | ) |  | $ | 7,082   |  
|                                                          |  |                              |         |                             |   |         |                    |  |   |         |   |  |   |         |  



|                                         |  |                              |         |   |                             |   |                    |  |   |        |   |  |   |         |  
|---------------------------------------- |  | ---------------------------- | ------- | - | --------------------------- | - | ------------------ |  | - | ------ | - |  | - | ------- | -
|                                         |  | Year Ended December 31, 2004 |        
|                                         |  | iGATE Solutions              |         |   | iGATE Professional Services |   | iGATE Corporate(1) |  |   | Total  |  
|                                         |  | (Dollars in thousands)       |        
|External revenues                        |  | $                            | 131,484 |   |                             | $ | 131,241            |  | $ | 1,860  |   |  | $ | 264,585 |  
|Cost of revenues                         |  |                              | 92,329  |   |                             |   | 104,131            |  |   | 1,117  |   |  |   | 197,577 |  
|                                         |  |                              |         |   |                             |   |                    |  |   |        |   |  |   |         |  
|Gross margin                             |  |                              | 39,155  |   |                             |   | 27,110             |  |   | 743    |   |  |   | 67,008  |  
|Selling, general and administrative      |  |                              | 55,197  |   |                             |   | 17,046             |  |   | 9,836  |   |  |   | 82,079  |  
|Gain on sale of land                     |  |                              | (3,615  | ) |                             |   |                   |  |   |       |   |  |   | (3,615  | )
|Restructuring charges                    |  |                              | 4,896   |   |                             |   | 909                |  |   |       |   |  |   | 5,805   |  
|                                         |  |                              |         |   |                             |   |                    |  |   |        |   |  |   |         |  
|(Loss) income from operations            |  | $                            | (17,323 | ) |                             | $ | 9,155              |  |   | (9,093 | ) |  |   | (17,261 | )
|                                         |  |                              |         |   |                             |   |                    |  |   |        |   |  |   |         |  
|Other income, net                        |  |                              |         |   |                             |   |                    |  |   | 1,374  |   |  |   | 1,374   |  
|Minority interest                        |  |                              |         |   |                             |   |                    |  |   | (677   | ) |  |   | (677    | )
|Equity in losses of affiliated companies |  |                              |         |   |                             |   |                    |  |   | (335   | ) |  |   | (335    | )
|                                         |  |                              |         |   |                             |   |                    |  |   |        |   |  |   |         |  
|Loss before income taxes                 |  |                              |         |   |                             |   |                    |  | $ | (8,731 | ) |  | $ | (16,899 | )
|                                         |  |                              |         |   |                             |   |                    |  |   |        |   |  |   |         |  

---

|(1) | Corporate activities include general corporate expenses, interest income and expense, equity in losses of unconsolidated affiliates, minority interest, loss from joint ventures and
restructuring charges not identified to a specific segment, and other unallocated charges. The Company evaluates segments based on income (loss) from operations. Since certain administrative and other operating expenses or income sources have not
been allocated to the operating business segments, this basis is not necessarily a measure computed in accordance with generally accepted accounting principles and it may not be comparable to other companies.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

iGATE Solutions

Revenues for iGATE
Solutions for the year ended December 31, 2005 were $138.0 million, an increase of $6.5 million or 5.0%, as compared to $131.5 million for the year ended December 31, 2004. Our revenue increase is directly attributable to a combination of
new customer wins and increased business with our recurring



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customers. Our customers continue to move portions of the work we used to do for them in the U.S. to India, resulting in increases in billable hours and
consultant utilization in India. As a result, we have added approximately 1,000 offshore consultants. In addition, we have also been able to increase our billing rates both in the U.S. and India.

The gross margin as a percentage of sales (gross margin percentage) for iGATE Solutions was 29.6% for the year ended December 31, 2005,
as compared to 29.8% for the year ended December 31, 2004. The decrease in our gross margins was primarily due to increased labor costs in India.

Selling, general and administrative expenses (S,G&A) include all costs that are not directly associated with our iGATE Solutions segments revenue generating consultants. S,G&A expenses
include administrative salaries and related employee benefits, recruiting and training costs, rent, depreciation and amortization, as well as communications and facilities costs. Also included in S, G & A costs are certain compensation charges
incurred as a result of the Quintant transaction and amortization of acquired intangible assets related to acquisitions within iGS. S,G&A costs for the year ended December 31, 2005 were $38.9 million or 28.2% of revenues, as compared to
$55.2 million or 42.0% of revenues for the year ended December 31, 2004.

In 2004, approximately $12.1 million of S,G&A costs
related to one-time compensation costs incurred in conjunction with the Quintant transaction modification. These modifications required us to accelerate certain compensation costs in 2004. S,G&A costs decreased $4.1 million net of the 2004
one-time costs for the year ended December 31, 2005 as compared to December 31, 2004. Significant items that contributed to the decrease were decreases in salaries and other employees costs of $3.5 million. Approximately $1.6 million of
the $3.5 million savings was directly attributable to the acceleration of compensation costs associated with the Quintant transaction modification. In 2005, travel and related costs decreased approximately $0.6 million, as more work is performed in
India requiring less consultant overseas travel. Bad debt expense net of recoveries, decreased by $1.1 million in 2005 due to improved collection activity. These costs savings were offset by increases in outside services of $0.7 million related to
ERP Systems upgrades and Sarbanes-Oxley costs during 2005 and net facilities costs increases of $0.4 million mainly attributable to our Whitefield campus in Bangalore, India.

Additional operating items included costs associated with a termination of leased office space in the U.K. in the amount of $4.9 million and during the
year ended December 31, 2004, we sold a tract of land in India and realized a gain of $3.6 million. There were no such operating items in 2005.

Operating income as a percentage of sales (operating income percentage) for the year ended December 31, 2005 was 1.4%, as compared to an operating loss percentage of 13.2% for the year ended
December 31, 2004. Our operating income for the current period was due to decreases in S,G&A costs. We believe we have the necessary cost infrastructure in place to become more profitable when revenue grows.

iGATE Professional Services (iPS)

Revenues for iPS for the year ended December 31, 2005 were $135.4 million, an increase of $4.2 million or 3.2%, as compared to $131.2 million for the year ended December 31, 2004. Overall demand for our staffing services has
increased for the period as we continue to see favorable trends in the IT services market.

Gross margin percentage for iPS was 21.3% for
the year ended December 31, 2005, as compared to 20.7% for the year ended December 31, 2004. The contributing factors to the increased margin were savings in business travel and higher utilization of salaried employees versus subcontracted
labor.

S,G&A costs for the year ended December 31, 2005 were $16.4 million or 12.1% of revenues, as compared to $17.0 million or
13.0% of revenues for the year ended December 31, 2004. Bad debt expense net of recoveries, decreased by $2.7 million in 2005 due to significant improvements in collection activities and billing.



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This was offset by approximately $3.3 million of expenses related to increases in administrative headcount and legal fees incurred with H1-B Visa filings as
we continue to increase our consultant headcount in the U.S.

In conjunction with the sale of Canada in 2005, we recovered approximately
$0.5 million of previously recorded restructuring charges. In 2004, additional operating items included $0.9 million of costs associated with a termination of leased office space in Canada.

Operating income percentage was 9.5% for the years ended December 31, 2005 and 7.0% for the year ended December 31, 2004. Operating income
increased for the year ended December 31, 2005 due to increased gross margins, recoveries of bad debt expense, restructuring recovery charges and decreases in overall spending.

iGATE Corporate (iGATE)

Revenues for iGATE for the year ended December 31, 2005 were $2.5 million, an increase of $0.6 million from revenues of $1.9 million for the comparable year ended December 31, 2004. This increase in revenue over the comparable
period was due to increases in clinical studies in DiagnoSearch and increases in revenue from jobcurry.

Gross margin percentage was 46.1%
for the year ended December 31, 2005, as compared to 39.9% for the year ended December 31, 2004. Increases in the revenues for DiagnoSearch and ICRI have positively impacted our gross margin percentage, as direct costs have remained
consistent for each period presented.

S,G&A costs were $12.1 million for the year ended December 31, 2005, as compared to $9.8
million for the year ended December 31, 2004. Our S,G&A costs increased due to higher accounting and legal costs in 2005 due to our compliance efforts related to Section 404 of the Sarbanes-Oxley Act.

Other Income (Expense) Components

Interest income
for the year ended December 31, 2005 was $2.1 million, an increase of $1.2 million as compared to $0.9 million in 2004. The increase was due to increased investment yields and operating cash flow in 2005.

Interest expense for the year ended December 31, 2005 was $0.2 million, an increase of $0.1 million as compared to $0.1 million in 2004. Interest
expense for both years is related to discounted liabilities for an employment agreement and for restructuring costs. During 2005, we were assessed $0.1 million of interest expense related to various state tax audits.

Other expense, net for the year ended December 31, 2005 totaled $2.2 million, compared to other income of $0.6 million for the year ended
December 31, 2004. Other expense for 2005 consisted of unfavorable foreign currency translation losses of $0.5 million related to our intercompany debt with India, unfavorable mark to market losses on our ineffective hedges of $1.2 million and
miscellaneous expense of $0.3 million. Conversely, in 2004, other income, net of $0.6 million consisted of favorable foreign currency translation gains of $0.2 million related to our intercompany debt with India and $0.4 million of miscellaneous
income.

We recognized income on affiliated companies of $0.3 million for the year ended December 31, 2005, as compared to a loss of
$0.3 million for the year ended December 31, 2004. All activity in 2005 and 2004 was related to our investments in the CIBER and Software AG joint ventures.

Minority interest expense was $0.3 million for the year ended December 31, 2005 and relates to the income of iGS and DiagnoSearch. Minority interest expense was $0.7 million for the year ended December 31,
2004 and included the income of iGS and the losses of DiagnoSearch.



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In 2005, we recorded an impairment charge on our investment in Concours of $2.5 million and recognized a
$0.3 million gain on our sale of ScanSoft (f/k/a Speechworks) stock. These gain and losses are included as a component of Loss on Venture Investments and Affiliated Companies in the Consolidated Statement of Operations.

In 2005 we sold our wholly owned Canadian subsidiary iGATE Mastech Ltd. recognizing a gain of $5.5 million.

Our income tax provision was $0.1 million at an effective rate of 1.6% for the year ended December 31, 2005. The significant items comprising our
effective tax rate were a reversal of certain tax reserves and providing valuation allowances recorded against certain deferred tax assets. iGS has renewed an Indian tax holiday related to its new Whitefield campus. The tax holiday will extend
through 2009. Our income tax provision was $5.1 million on a loss from continuing operations of $16.9 million at a negative effective rate of 30.4% for the year ended December 31, 2004. The significant items comprising our negative effective
rate were valuation allowances recorded against certain deferred tax assets.



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Results of Operations of Our Operating Segments: iGATE Solutions, iPS and iGATE Corporate for the Year Ended
December 31, 2004 as Compared to the Year Ended December 31, 2003:

Effective April 1, 2004, we recast our segments to
include the operations of GFS as part of the iPS segment. Previously, GFS was included in the iGATE Solutions segment. All prior periods have been reclassified to reflect the change to our segment reporting. The following discussion also compares
our operating segments without the operations of iGATE Australia Pty Ltd. and Direct Resources Ltd., which are being treated as discontinued operations. Prior to their sale in 2004 both entities were part of our iPS operating segment.



|                                                     |  |                              |         |   |                             |   |                    |  |   |         |   |  |   |         |  
|---------------------------------------------------- |  | ---------------------------- | ------- | - | --------------------------- | - | ------------------ |  | - | ------- | - |  | - | ------- | -
|                                                     |  | Year Ended December 31, 2004 |        
|                                                     |  | iGATE Solutions              |         |   | iGATE Professional Services |   | iGATE Corporate(1) |  |   | Total   |  
|                                                     |  | (Dollars in thousands)       |        
|External revenues                                    |  | $                            | 131,484 |   |                             | $ | 131,241            |  | $ | 1,860   |   |  | $ | 264,585 |  
|Cost of revenues                                     |  |                              | 92,329  |   |                             |   | 104,131            |  |   | 1,117   |   |  |   | 197,577 |  
|                                                     |  |                              |         |   |                             |   |                    |  |   |         |   |  |   |         |  
|Gross margin                                         |  |                              | 39,155  |   |                             |   | 27,110             |  |   | 743     |   |  |   | 67,008  |  
|Selling, general and administrative                  |  |                              | 55,197  |   |                             |   | 17,046             |  |   | 9,836   |   |  |   | 82,079  |  
|Gain on sale of land                                 |  |                              | (3,615  | ) |                             |   |                   |  |   |        |   |  |   | (3,615  | )
|Restructuring charges                                |  |                              | 4,896   |   |                             |   | 909                |  |   |        |   |  |   | 5,805   |  
|                                                     |  |                              |         |   |                             |   |                    |  |   |         |   |  |   |         |  
|(Loss) income from operations                        |  | $                            | (17,323 | ) |                             | $ | 9,155              |  |   | (9,093  | ) |  |   | (17,261 | )
|                                                     |  |                              |         |   |                             |   |                    |  |   |         |   |  |   |         |  
|Other income, net                                    |  |                              |         |   |                             |   |                    |  |   | 1,374   |   |  |   | 1,374   |  
|Minority interest                                    |  |                              |         |   |                             |   |                    |  |   | (677    | ) |  |   | (677    | )
|Equity in losses of affiliated companies             |  |                              |         |   |                             |   |                    |  |   | (335    | ) |  |   | (335    | )
|                                                     |  |                              |         |   |                             |   |                    |  |   |         |   |  |   |         |  
|Loss before income taxes                             |  |                              |         |   |                             |   |                    |  | $ | (8,731  | ) |  | $ | (16,899 | )
|                                                     |  |                              |         |   |                             |   |                    |  |   |         |   |  |   |         |  
|                                                     | 
|                                                     |  | Year Ended December 31, 2003 |        
|                                                     |  | iGATE Solutions              |         |   | iGATE Professional Services |   | iGATE Corporate(1) |  |   | Total   |  
|                                                     |  | (Dollars in thousands)       |        
|External revenues                                    |  | $                            | 145,854 |   |                             | $ | 93,124             |  | $ | 1,656   |   |  | $ | 240,634 |  
|Cost of revenues                                     |  |                              | 100,701 |   |                             |   | 69,997             |  |   | 956     |   |  |   | 171,654 |  
|                                                     |  |                              |         |   |                             |   |                    |  |   |         |   |  |   |         |  
|Gross margin                                         |  |                              | 45,153  |   |                             |   | 23,127             |  |   | 700     |   |  |   | 68,980  |  
|Selling, general and administrative                  |  |                              | 47,685  |   |                             |   | 13,883             |  |   | 11,368  |   |  |   | 72,936  |  
|Restructuring charges                                |  |                              | 524     |   |                             |   |                   |  |   | 80      |   |  |   | 604     |  
|                                                     |  |                              |         |   |                             |   |                    |  |   |         |   |  |   |         |  
|(Loss) income from operations                        |  | $                            | (3,056  | ) |                             | $ | 9,244              |  |   | (10,748 | ) |  |   | (4,560  | )
|                                                     |  |                              |         |   |                             |   |                    |  |   |         |   |  |   |         |  
|Other income, net                                    |  |                              |         |   |                             |   |                    |  |   | 1,560   |   |  |   | 1,560   |  
|Minority interest                                    |  |                              |         |   |                             |   |                    |  |   | (312    | ) |  |   | (312    | )
|Equity in losses of affiliated companies             |  |                              |         |   |                             |   |                    |  |   | (99     | ) |  |   | (99     | )
|Loss on venture investments and affiliated companies |  |                              |         |   |                             |   |                    |  |   | (28     | ) |  |   | (28     | )
|                                                     |  |                              |         |   |                             |   |                    |  |   |         |   |  |   |         |  
|Loss before income taxes                             |  |                              |         |   |                             |   |                    |  | $ | (9,627  | ) |  | $ | (3,439  | )
|                                                     |  |                              |         |   |                             |   |                    |  |   |         |   |  |   |         |  

---

|(1) | Corporate activities include general corporate expenses, interest income and expense, equity in losses of unconsolidated affiliates, minority interest, loss from joint ventures and
restructuring charges not identified to a specific segment, and other unallocated charges. The Company evaluates segments based on income (loss) from operations. Since certain administrative and other operating expenses or income sources have not
been allocated to the operating business segments, this basis is not necessarily a measure computed in accordance with generally accepted accounting principles and it may not be comparable to other companies.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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iGATE Solutions

Revenues for iGATE Solutions for the year ended December 31, 2004 were $131.5 million, a decrease of $14.4 million or 9.9%, as compared to $145.9 million for the year ended December 31, 2003. During the
year, our customers have moved portions of the work we used to do for them in the U.S. to India, at much lower billing rates, negatively affecting our revenue base. In addition, we experienced revenue declines in our top ten customer base, wound
down some revenue streams that did not have an offshore focus and were unable to increase our non-GE revenues as rapidly as we expected. Sales cycles in the offshore outsourcing solutions business may extend to twelve months from the initial sales
meeting before a services contract is finalized and a sale is made.

The gross margin as a percentage of sales (gross margin
percentage) for iGATE Solutions was 29.8% for the year ended December 31, 2004, as compared to 31.0% for the year ended December 31, 2003. The factors contributing to the decline in gross margins were a combination of pricing
pressures from customers, higher utilization of subcontracted labor versus salaried consultants, wage increases and project cost overruns related to direct labor on projects.

Selling, general and administrative expenses (S,G&A) include all costs that are not directly associated with our iGATE Solutions
segments revenue generating consultants. S,G&A expenses include non-consultant salaries and employee benefits, recruiting and training costs, rent, depreciation and amortization, as well as communications and facilities costs. Also
included in S,G&A costs are compensation charges incurred as a result of the modification of the Quintant transaction and amortization of acquired intangible assets incurred as a result of acquisitions within iGATE Solutions. S,G&A costs for
the year ended December 31, 2004 were $55.2 million or 42.0% of revenues, as compared to $47.7 million or 32.7% of revenues for the year ended December 31, 2003. While S,G&A costs increased $7.5 million on a comparative basis, $12.1
million was related to the acceleration of compensation expense related to the modification of the Quintant transaction. Without the acceleration of compensation expense, S,G&A costs would have been $43.1 million, a decrease of $4.6 million for
the year ended December 31, 2004. Salary related costs decreased $5.1 million from 2003, through employee attrition and the restructuring and winding down of Red Brigade in the U.K. In addition, travel and other related costs decreased $2.0
million as we continue to migrate our projects and workers permanently offshore decreasing the need for travel. Those savings were offset by increases in depreciation and rent in the amount of $2.5 million related to 2003 iGS acquisitions.

Additional operating items included costs associated with a termination of leased office space in the U.K. in the amount of $4.9 million
and during the year ended December 31, 2004, we sold a tract of land in India and realized a gain of $3.6 million.

Operating loss as
a percentage of sales (operating loss percentage) for the year ended December 31, 2004 was 13.2%, as compared to an operating loss percentage of 2.1% for the year ended December 31, 2003. Our operating loss for the current
period was due to lower gross margins and increases in S,G&A costs attributable to accelerated compensation expense related to the modification of the Quintant transaction and continued investments in our offshore infrastructure.

iGATE Professional Services (iPS)

Revenues for iPS for the year ended December 31, 2004 were $131.2 million, an increase of $38.1 million or 40.9%, as compared to $93.1 million. This includes adjustments recorded in 2004 in the amount of $0.8 million related to
adjustments of certain customer accounts receivable balances. These adjustments were due to customer credits and discounts. Overall demand for our staffing services increased for the period as we experienced favorable trends in the IT services
market.

Gross margin percentage for iPS was 20.7% for the year ended December 31, 2004, as compared to 24.8% for the year ended
December 31, 2003. The contributing factors to the decline in gross margin were a



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combination of pricing pressures, increases in subcontractor versus salaried consultants and increases in business from the preferred vendor pass-through
arrangement in our Canadian staffing operations. Pass through arrangements allow for minimal profit margins on services rendered.

S,G&A costs for the year ended December 31, 2004 were $17.0 million or 13.0% of revenues, as compared to $13.9 million or 14.9% of revenues. We increased our bad debt expense by $2.0 million for certain accounts that we believe
will not be collectible. While our S,G&A costs increased in absolute dollars, it decreased as a percentage of revenues.

Additional
operating items included $0.9 million of costs associated with a termination of leased office space in Canada.

Operating income percentage
was 7.0% for the years ended December 31, 2004 and 9.9% for the year ended December 31, 2003. Operating income decreased by $0.1 million for the year ended December 31, 2004, due to increases in revenue which were offset by increases
in S,G&A costs.

iGATE Corporate (iGATE)

Revenues for iGATE for the year ended December 31, 2004 were $1.9 million, an increase of $0.3 million from revenues of $1.6 million for the
comparable year ended December 31, 2003. This increase in revenue over the comparable period was due to our acquisition of DiagnoSearch and increases in revenue from jobcurry.

Gross margin percentage was 39.9% for the year ended December 31, 2004, as compared to 42.3% for the year ended December 31, 2003. Our gross
margins have decreased for comparable periods as revenue increases in jobcurry of $0.4 million have offset decreases in gross margins of DiagnoSearch.

S,G&A costs were $9.8 million for the year ended December 31, 2004, as compared to $11.4 million for the year ended December 31, 2003. Our S,G&A costs decreased due to decreases in accounting and legal
costs in 2004. Our costs in 2003 included restructuring costs of $0.1 million.

Other Income (Expense) Components

Interest income for the year ended December 31, 2004 was $0.9 million, a decrease of $1.8 million, as compared to $2.7 million for the year ended
December 31, 2003. The decrease was due to decreases in investment yields and uninvested cash.

Interest expense for the year ended
December 31, 2004 was $0.1 million and was consistent with interest expense of $0.1 million for the year ended December 31, 2003. Interest expense for both years is related to discounted liabilities for an employment agreement and
restructuring costs.

Other income, net for the year ended December 31, 2004 was $0.6 million as compared to other expense, net of
$0.9 million for the year ended December 31, 2003. Other income for 2004 consisted of favorable foreign currency translation gains on our intercompany debt and a favorable settlement on escrowed claims related to a prior acquisition. Components
of expense for 2003 consisted of foreign currency translation losses of $0.2 million and interest accretion of $0.7 million related to a put option and bonus accrual and miscellaneous expense of $0.1 million.

We recognized a loss on affiliated companies of $0.3 million for the year ended December 31, 2004, as compared to a loss of $0.1 million for the
year ended December 31, 2003. These losses were related to our investments in the CIBER and Software AG joint ventures.

Minority
interest expense was $0.7 million for the year ended December 31, 2004 and relates to the income of iGS and the losses incurred by Quintant and DiagnoSearch. Minority interest expense was $0.3 million for the year ended December 31, 2003
and included the income of iGS and the losses of Quintant and DiagnoSearch.



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In 2003, we recorded an impairment charge on our investment in Air2Web of $0.3 million and recognized a
$0.3 million gain on our sale of Red Hat stock. These gain and losses are included as a component of Loss on Venture Investments and Affiliated Companies in the Consolidated Statement of Operations.

Our income tax provision was $5.1 million at a negative effective rate of 30.4% for the year ended December 31, 2004. The significant items
comprising our effective tax rate were valuation allowances recorded against certain deferred tax assets. As a result of the asset sale of Red Brigade, deferred tax assets of approximately $2.9 million from net operating losses generated in prior
years will expire and not be utilized. iGS will renew an Indian tax holiday related to its new Whitefield campus. The tax holiday will extend through 2009. Our income tax provision was $2.2 million on a loss from continuing operations of $3.4
million at a negative effective rate of approximately 63% for the year ended December 31, 2003. The significant items comprising our negative effective rate include the additional tax on deemed distributions from iGS as a result of the eJiva
transaction.

On a consolidated basis, we incurred a net loss from continuing operations of $22.0 million for the year ended
December 31, 2004, as compared to net loss of $5.6 million for the year ended December 31, 2003. Our net loss is primarily due to deferred compensation charges on the Quintant acquisition, our increased investment in infrastructure costs
of our offshore locations, the restructuring charges related to our UK operations and valuation allowances recorded against deferred tax assets.

For the year ended December 31, 2004, our discontinued operations, which is comprised of our Australian and DRI entities, had after tax income of $3.8 million, as compared with a net loss of $3.4 million for the year ended
December 31, 2003. In June 2004, we sold Australia and DRI, recognizing a gain of approximately $3.7 million. The income in 2004 was mainly due to the gain on the sale of Australia which occurred in June 2004. The loss in 2003 was mainly due to
goodwill impairments related to Australia.

Liquidity and Capital Resources

Our working capital increased $2.7 million from December 31, 2004 to December 31, 2005. Our accounts receivable decreased by $3.9 million from
December 31, 2004 to $49.5 million at December 31, 2005, and our days sales outstanding decreased to 73 days at December 31, 2005 from 87 days at December 31, 2004.

At December 31, 2005, we had cash and short-term investments of $45.8 million and $30.8 million, respectively, as compared to cash and short-term
investments of $28.2 million and $35.9 million, respectively, at December 31, 2004. Short-term investments at December 31, 2005 and 2004 consisted mainly of highly liquid short-term investments. Our focus over the past two years has been
liquidity along with the preservation of our principal holdings.

Cash provided from operations is anticipated to be adequate to fund
capital expenditures and other business needs over the next 12 months.

Cash from Operations

Cash provided by operations was $14.0 million for the year ended December 31, 2005. Factors contributing to our increased cash were net income of
$7.0 million for 2005 and changes in working capital items of $2.7 million that included decreases to our accounts receivable balances of $3.9 million offset by net changes to other working capital items of $6.8 million. During 2005, we recognized
$5.5 million in gains related to the sale of iGATE Mastech Ltd, our Canadian staffing operation and other investments of $0.2 million. Significant noncash items in 2005 totaled $15.5 million and included depreciation and amortization, stock based
compensation



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related to the Quintant transaction, discounts on stock sold to employees, bad debt expense, minority interest equity losses, deferred taxes, losses on
derivative instruments and net losses on venture investments and affiliated companies.

Cash used by operations was $7.8 million for the
year ended December 31, 2004. Factors contributing to our use of cash were net losses of $18.2 million for 2004 and changes in working capital items that included increases to our accounts receivable balances of $15.6 million offset by $6.2
million of decreases to other work capital items. During 2004, we recognized $3.6 million in gains related to the sales of land held in India. Significant noncash items in 2004 totaled $26.2 million and included depreciation and amortization, stock
based compensation related to the Quintant deal, bad debt expense, minority interest equity losses, deferred taxes and asset impairments related to our restructurings of UK and Canada. Cash provided by our discontinued operations totaled $2.8
million for 2004.

Cash used by operations was $14.1 million for the year ended December 31, 2003. Factors contributing to our use of
cash were net losses of $9.0 million for 2003, and changes in working capital items that included increases to our accounts receivable balances of $4.7, decreases to our accrued liabilities due to the payment of a put option, offset by $5.7 million
related to decreases in other current assets and increases to account payable. Significant noncash items in 2003 totaled $8.6 million and included depreciation and amortization, deferred compensation related to the Quintant deal, bad debt expense,
minority interest equity losses, deferred taxes and goodwill impairment related to Australia. Cash used by our discontinued operations totaled $4.0 million for 2003.

Investing Activities

Cash provided by investing activities was $2.7 million in 2005 as compared to
uses of cash of $0.9 million and $9.9 million in 2004 and 2003, respectively.

Our capital expenditures were $12.2 million, $14.9 million
and $6.3 million in 2005, 2004 and 2003, respectively. Significant portions of capital expenditures in all three years were due to the construction of our Whitefield (Whitefield) campus located in India.

We have decreased our short-term investment portfolios by approximately $4.9 million, $4.3 million and $13.4 million in 2005, 2004 and 2003,
respectively, using portions of the proceeds of the sales for the construction of our Whitefield campus.

During the year ended
December 31, 2005, we sold our Canadian staffing operation for net cash proceeds of $9.3 million. We also sold our remaining shares of ScanSoft for $0.7 million

During the year ended December 31, 2004, we sold Australia and DRI for net cash proceeds of $7.2 million. We also sold a tract of land held in India for $4.8 million. We purchased Saint Life for $0.6 million in
cash and invested $1.6 million in our two joint ventures CIBER and Software AG.



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During the year ended December 31, 2003, we used $15.4 million in net cash reserves to acquire the
following entities (dollars in thousands):



|                                      |  |   |       
|------------------------------------- |  | - | ------
|iGATE Clinical Research International |  | $ | 360   
|AquaRegia, Pvt. Ltd.                  |  |   | 365   
|IT&T Ltd. assets                      |  |   | 4,550 
|Quintant, Inc.                        |  |   | 7,227 
|DiagnoSearch, Pvt. Ltd.               |  |   | 1,387 
|IdeaSpace, Pvt. Ltd.                  |  |   | 1,507 
|                                      |  |   |       
|Total cash used, net of acquired cash |  | $ | 15,396
|                                      |  |   |       

In 2003, we paid $1.0 million for earn-out payments related to previous years acquisitions

On October 1, 2003, we paid $9.3 million in cash for a put option, which is from a prior acquisition.

On October 7, 2003, we sold our entire investment in Red Hat common stock for cash proceeds of $1.4 million. We received the Red Hat stock in
conjunction with the PTI transaction, which occurred in February 2001.

In 2003, iGS invested approximately $1.8 million to establish an
alliance with Concours, and invested $0.1 million to enter into joint ventures with SAG and CIBER. We now own 100% of the CIBER joint venture. iGS may be required to continue to fund the SAG joint venture in proportion to our pro-rata ownership
interest.

Financing Activities

Cash provided by financing activities was $0.9 million in 2005, $3.0 million in 2004, and $1.0 in 2003. Sources of cash related to stock option exercises were $1.2 million and $1.9 million for 2005 and 2004, respectively. In 2004, we issued
220,873 shares of iGS stock to Concours for proceeds of $1.1 million.

The PNC Facility was renewed on September 14, 2005 for 365
days. Our borrowing availability under the PNC Facility is $25.0 million. We have no outstanding borrowings on the PNC Facility at December 31, 2005. As part of our agreement with PNC, we are required to maintain cash and cash equivalents and
short-term investments of at least $30.0 million and maintain net tangible worth of at least $88 million.

Restructurings

We restructured our businesses in 2004, 2003, 2002 and 2001. As a result of these restructurings, we will be required to make cash
payments in future years. The nature of the payments and the reasons for the restructurings are discussed more fully in Note 6 to the Consolidated Financial Statements. The following table details the cash payments that we will be required to make
in the future years:



|                               |  |                        |       |      |   |      |  |      |     |      |   |            |  |   |     |  |   |  
|------------------------------ |  | ---------------------- | ----- | ---- | - | ---- |  | ---- | --- | ---- | - | ---------- |  | - | --- |  | - | -
|                               |  | 2006                   |       | 2007 |   | 2008 |  | 2009 |     | 2010 |   | Thereafter
|                               |  | (Dollars in thousands)
|Leases costs of office closure |  | $                      | 2,355 |      | $ | 633  |  | $    | 633 |      | $ | 633        |  | $ | 523 |  | $ | 
|                               |  |                        |       |      |   |      |  |      |     |      |   |            |  |   |     |  |   |  

Unless otherwise discussed, we did not use our cash reserves for any other significant financing
or investing activities, with the exception of cash being transferred from money-market accounts or other short-term investments (purchases of $22.3 million and sales of $27.3 million), certain capital expenditures that were incurred during the
normal course of business (net additions of $14.9 million) and the exercise of employee stock options of $1.2 million.



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Contractual Obligations

As part of our acquisition of DiagnoSearch, we may be required to fund their existing operations for an amount of up to $3.0 million, based upon mutually agreed upon operating needs. We funded $0.3 million of this
requirement in 2005, $0.5 million and $0.3 million in 2004 and 2003, respectively.

We also have financial commitments related to existing
leases on our occupied space. Our commitments are as follows:



|       |  |                        |       |      |   |       |  |      |       |      |   |            |  |   |     |  |   |    
|------ |  | ---------------------- | ----- | ---- | - | ----- |  | ---- | ----- | ---- | - | ---------- |  | - | --- |  | - | ---
|       |  | 2006                   |       | 2007 |   | 2008  |  | 2009 |       | 2010 |   | Thereafter
|       |  | (Dollars in thousands)
|Leases |  | $                      | 2,906 |      | $ | 2,544 |  | $    | 1,843 |      | $ | 856        |  | $ | 384 |  | $ | 959
|       |  |                        |       |      |   |       |  |      |       |      |   |            |  |   |     |  |   |    

We have committed to building Phase III of our campus located in Bangalore. Total estimated costs
of the project will approximate $7.5 million. Phase I was completed in February 2004 and Phase II was completed in December 2005. We have funded the project through a combination of available cash reserves and short-term investments.

Off-Balance Sheet Arrangements

We do
not have any off-balance arrangements.

Market Risk Factors

We are exposed to market risks from adverse changes in foreign exchange rates, interest rates, especially the Indian Rupee (Rupee). We do not
engage in speculative or leveraged transactions, nor do we hold or issue financial instruments for trading purposes.

Foreign Exchange
Rate Sensitivity

iGSs cash flow and earnings are subject to fluctuations due to exchange rate variation between the Rupee and
USD. This foreign currency risk exists based upon the nature of the iGSs operations. The majority of iGSs customers and revenue are U.S. based, which provides an inherent foreign currency risk between USD and Rupee exchange rates.



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We attempt to limit our exposure to changing Rupee rates mainly through financial market transactions.
These transactions may include entering into forward or option contracts to hedge existing exposures. The instruments are used to reduce risk by essentially creating offsetting currency exposures. The following table presents information related to
foreign currency contracts held by the Company:

LIST OF OUTSTANDING HEDGE TRANSACTIONS ON DECEMBER 31, 2005



|                          |  |                      |  |                                 |  |                        |         |      |        |               |                                                 |   |        |  
|------------------------- |  | -------------------- |  | ------------------------------- |  | ---------------------- | ------- | ---- | ------ | ------------- | ----------------------------------------------- | - | ------ | -
|                          |  | Maturity Date Ranges |  | Strike Priceat Rupee RateRanges |  | Amount                 |         |      | Option |               | Net Unrealized Gains/(Losses) December 31, 2005 |  
|                          |  |                      |  |                                 |  | (Dollars in Thousands) |        
|FORWARD CONTRACTS         |  |                      |  |                                 |  |                        |         |      |        |               |                                                 |   |        |  
|From:                     |  | February 28, 2006    |  | 43.90                           |  |                        |         |      |        |               |                                                 |   |        |  
|To:                       |  | August 31, 2006      |  | 44.25                           |  |                        |         |      |        |               |                                                 |   |        |  
|                          |  |                      |  |                                 |  |                        |         |      |        |               |                                                 |   |        |  
|Subtotal                  |  |                      |  |                                 |  | $                      | 11,000  |      |        |               |                                                 | $ | (298   | )
|                          |  |                      |  |                                 |  |                        |         |      |        |               |                                                 |   |        |  
|CURRENCY OPTION CONTRACTS |  |                      |  |                                 |  |                        |         |      |        |               |                                                 |   |        |  
|From:                     |  | January 27, 2006     |  | 43.15                           |  | $                      | 17,500  |      |        | Buy/Sell Put  |                                                 |   |        |  
|To:                       |  | December 29, 2006    |  | 44.77                           |  | $                      | 24,500  |      |        | Buy/Sell Call |                                                 |   |        |  
|                          |  |                      |  |                                 |  |                        |         |      |        |               |                                                 |   |        |  
|Subtotal                  |  |                      |  |                                 |  | $                      | 42,000  |      |        |               |                                                 | $ | (643   | )
|                          |  |                      |  |                                 |  |                        |         |      |        |               |                                                 |   |        |  
|FAIR VALUE HEDGES         |  |                      |  |                                 |  |                        |         |      |        |               |                                                 |   |        |  
|From:                     |  | March 31, 2006       |  | 43.975                          |  |                        |         |      |        |               |                                                 |   |        |  
|To:                       |  | April 28, 2006       |  | 44.193                          |  |                        |         |      |        |               |                                                 |   |        |  
|                          |  |                      |  |                                 |  |                        |         |      |        |               |                                                 |   |        |  
|Subtotal                  |  |                      |  |                                 |  | $                      | 17,000  |      |        |               |                                                 | $ | (397   | )
|                          |  |                      |  |                                 |  |                        |         |      |        |               |                                                 |   |        |  
|PRINCIPAL SWAPS           |  |                      |  |                                 |  |                        |         |      |        |               |                                                 |   |        |  
|                          |  |                      |  |                                 | 
|                          |  | September 29, 2006   |  |                                 |  | $                      | 886     | USD  |        |               |                                                 | $ | 0      |  
|                          |  |                      |  |                                 |  |                        | 1500    | SGD  |        |               |                                                 |   |        |  
|                          |  |                      |  |                                 | 
|                          |  | September 29, 2006   |  |                                 |  | $                      | 601     | USD  |        |               |                                                 | $ | 20     |  
|                          |  |                      |  |                                 |  |                        | 500     | EURO |        |               |                                                 |   |        |  
|                          |  |                      |  |                                 | 
|                          |  | September 28, 2006   |  |                                 |  | $                      | 1,555   | USD  |        |               |                                                 | $ | 40     |  
|                          |  |                      |  |                                 |  |                        | 175,000 | JPY  |        |               |                                                 |   |        |  
|                          |  |                      |  |                                 | 
|                          |  | September 28, 2006   |  |                                 |  | $                      | 3,104   | USD  |        |               |                                                 | $ | 41     |  
|                          |  |                      |  |                                 |  |                        | 1,750   | GBP  |        |               |                                                 |   |        |  
|                          |  |                      |  |                                 |  |                        |         |      |        |               |                                                 |   |        |  
|Subtotal                  |  |                      |  |                                 |  |                        |         |      |        |               |                                                 | $ | 101    |  
|                          |  |                      |  |                                 |  |                        |         |      |        |               |                                                 |   |        |  
|Total                     |  |                      |  |                                 |  |                        |         |      |        |               |                                                 | $ | (1,237 | )
|                          |  |                      |  |                                 |  |                        |         |      |        |               |                                                 |   |        |  

The net unrealized gains/(losses) were calculated using a Rupee exchange rate of 45.050.

As of December 31, 2005, our forward contracts to hedge intercompany cash flows will mature within one year from our 2005 fiscal year-end. As each
contract matures, iGS will receive Rupees at the contracted (strike price) rate while delivering the USD equivalent of Rupees at the prevailing Rupee exchange rate. Contracts that meet qualifying criteria are accounted for as foreign
currency cash flow hedges. Accordingly, the effective portion of gains and losses is deferred as a component of other comprehensive loss and is recognized in earnings at the time the hedged item affects earnings. Any gains and losses due to hedge
ineffectiveness or related to contracts which do not qualify for hedge accounting are recorded in current period earnings in other income and expense. At December 31, 2005 these forward contracts did not meet qualifying criteria to receive
hedge accounting and, as such, iGS appropriately recorded the net unrealized loss of $0.3 million as Other Expense.

As of
December 31, 2005, our option contracts to hedge intercompany cash flows will mature within one year from our 2005 fiscal year-end. As each contract matures and dependent upon prevailing Rupee exchange



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rates, iGS will have the option to either buy USDs at each contracted put strike price or sell USDs at each contracted call strike
price. Contracts that meet qualifying criteria are accounted for as foreign currency cash flow hedges. Accordingly, the effective portion of gains and losses is deferred as a component of other comprehensive loss and is recognized in earnings at the
time the hedged item affects earnings. Any gains and losses due to hedge ineffectiveness or related to contracts which do not qualify for hedge accounting are recorded in current period earnings in other income and expense. At December 31, 2005
these option contracts did not meet qualifying criteria to receive hedge accounting and, as such, iGS appropriately recorded the net unrealized loss of $0.6 million as Other Expense.

As of December 31, 2005 all fair value hedges were deemed to be ineffective due to the lack of an underlying asset or transaction to be hedged. They
will expire within six months from our 2005 fiscal year-end. At December 31, 2005 iGS approximately recorded $0.4 million as Other Expense.

As of December 31, 2005, our principal swaps to hedge intercompany debt from iGS to iGATE will mature within one year from our 2005 fiscal year-end. Contracts that meet qualifying criteria are accounted for as foreign currency cash
flow hedges. Accordingly, the effective portion of gains and losses is deferred as a component of other comprehensive loss and is recognized in earnings at the time the hedged item affects earnings. Any gains and losses due to hedge ineffectiveness
or related to contracts which do not qualify for hedge accounting are recorded in current period earnings in other income and expense. At December 31, 2005, the principal swaps to hedge intercompany debt did not meet qualifying criteria to
receive hedge accounting and iGS appropriately recorded the net unrealized gain of $0.1 million as Other Income.

Substantially all of the
Companys foreign affiliates financial instruments are denominated in their respective functional currencies. (See Note 3 to the consolidated financial statements.)

Interest Rate Sensitivity

The
Company is exposed to changes in interest rates primarily as a result of its intercompany debt borrowing and investing activities used to maintain liquidity and fund business operations. The nature and amount of the Companys long-term and
short-term debt can be expected to vary as a result of future business requirements, market conditions and other factors. The Companys net intercompany debt obligation totaled $11.0 million at December 31, 2005. The Companys debt
obligation is discussed in its Related Party Transactions Note 18.

In order to manage interest rate exposure, iGS utilizes interest rate
swaps. These derivatives are primarily accounted for as fair value hedges. Accordingly, changes in the fair value of these derivatives, along with changes in the fair value of the hedged debt obligations that are attributable to the hedged risk, are
recognized as Interest Expense.

Effect of Hypothetical 10% Fluctuation In Market Prices

Our primary net foreign currency exposure is primarily the Rupee (INR). The fair value of foreign exchange contracts is subject to changes in
foreign currency exchange rates.

As of December 31, 2005, the potential gain or loss in the fair value of the Companys
outstanding foreign currency contracts assuming hypothetical 5%, 2% and 1% fluctuations in currency rates would be approximately:



|                       |  |                                                 |        |      |                                   |        |      |                                                |   |        |    |  |   |        |   |  |    |        |   |  |   |        |   |  |   |        |  
|---------------------- |  | ----------------------------------------------- | ------ | ---- | --------------------------------- | ------ | ---- | ---------------------------------------------- | - | ------ | -- |  | - | ------ | - |  | -- | ------ | - |  | - | ------ | - |  | - | ------ | -
|                       |  | Valuation given X% decrease in Rupee / USD rate |        |      | Fair Value as ofDecember 31, 2005 |        |      | Valuation give X% increase in Rupee / USD rate |  
|                       |  | (5%)                                            |        | (2%) |                                   |        | (1%) |                                                |   |        | 1% |  |   | 2%     |   |  | 5% |       
|Rupee to USD rate      |  |                                                 | 42.798 |      |                                   | 44.149 |      |                                                |   | 44.600 |    |  |   | 45.050 |   |  |    | 45.501 |   |  |   | 45.951 |   |  |   | 47.303 |  
|Derivative Instruments |  | $                                               | 0.4    |      | $                                 | (0.6   | )    |                                                | $ | (1.0   | )  |  | $ | (1.2   | ) |  | $  | (1.6   | ) |  | $ | (2.0   | ) |  | $ | (3.0   | )
|                       |  |                                                 |        |      |                                   |        |      |                                                |   |        |    |  |   |        |   |  |    |        |   |  |   |        |   |  |   |        |  



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However, it should be noted that any change in the fair value of the contracts, real or hypothetical,
would be significantly offset by an inverse change in the value of the underlying hedged items. In relation to currency contracts, this hypothetical calculation assumes that each exchange rate would change in the same direction relative to the USD.

Inflation

We do not believe that
inflation had a significant impact on our results of operations for the periods presented. On an ongoing basis, we attempt to minimize any effects of inflation on our operating results by controlling operating costs and whenever possible, seeking to
insure that billing rates reflect increases in costs due to inflation.

For all significant foreign operations, the functional currency is
the local currency. Assets and liabilities of these operations are translated at the exchange rate in effect at each period end. Statement of Operations accounts are translated at the average exchange rate prevailing during the year. Translation
adjustments arising from the use of differing exchange rates from period to period are included as a component of other comprehensive income (loss). Realized gains and losses from foreign currency transactions are included in net loss for the
periods presented. Exchange rate transaction gains (losses) did not have a significant impact on operations for the year ended December 31, 2005.

Seasonality

Our operations are generally not affected by seasonal fluctuations. However, our consultants billable
hours are affected by national holidays and vacation policies, which vary by country and by operating company.

Economic Trends and Outlook

Recent reporting data that focused on worldwide IT spending indicates that the IT industry is expected to grow 6% year-over-year to
total approximately $796.8 billion through 2009.

We are committed to the BPO market so evidenced by our construction of our Whitefield
campus, and our 2003 acquisitions that focused on serving the BPO market. We believe we have the necessary infrastructure in place to take advantage of our opportunities in the BPO market.

Recently Issued Accounting Standards

Share-based
Payment

In December 2004, the Financial Accounting Standards Board (FASB) issued FASB No. 123 (R), Share-based
Payment.FASB No. 123 (R) requires employers to value share-based payments using the fair value method, eliminating the option to use the intrinsic method to value such payments. We will adopt the provisions of SFAS 123 (R)
prospectively beginning in the first quarter of 2006. We are currently evaluating the effect of the provisions of this statement on our Consolidated Financial Statements.

In March 2005, the Financial Accounting Standards Board issued FASB Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations (FIN 47), an interpretation of SFAS
143. FIN 47 clarifies that the term conditional asset retirement obligation as used in SFAS 143 refers to a legal obligation to perform an asset retirement activity in which the timing and (or) method of settlement are conditional on a
future event that may or may not be within the control of the entity. An entity is required to recognize a liability for the fair value of a conditional asset retirement obligation if the fair value of the liability can be reasonably estimated, even
if conditional on a future event. FIN 47 is effective no later than the end of fiscal years ending after December 15, 2005. The adoption of this standard did not have a material impact on our Consolidated Financial Statements.



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In May 2005, the Financial Accounting Standards Board issued FASB Statement No. 154,
Accounting Changes and Error Corrections (as amended) (FASB 154). This Statement replaces APB Opinion No. 20, Accounting Changes, and FASB Statement No. 3, Reporting Accounting Changes in Interim Financial
Statements, and changes the requirements for the accounting for and reporting of a change in accounting principle. This Statement applies to all voluntary changes in accounting principle. It also applies to changes required by an accounting
pronouncement in the unusual instance that the pronouncement does not include specific transition provisions. This Statement shall be effective for accounting changes and corrections of errors made in fiscal years beginning after December 15,
2005. This Statement does not change the transition provisions of any existing accounting pronouncements, including those that are in a transition phase as of the effective date of this Statement.



|ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|-------- | ----------------------------------------------------------

Short-term investments are invested in highly liquid securities such as money market funds and certain corporate bonds with maturities of one year or less, and marketable equity securities. These securities are generally classified as
available for sale and consequently, are recorded on the balance sheet at fair value with unrealized gains or losses reported as a separate component of accumulated other comprehensive income (loss), net of tax. Part of this portfolio includes
minority equity investments in several publicly traded companies, the values of which are subject to market price volatility. We have also invested in one privately held company (Air2Web), which can still be considered in the development stage. This
type of investment has an inherent risk as the market for the technologies or products they have under development are typically in the early stages and may never materialize. We could lose our entire remaining investment in this company.

The Companys cash flow and earnings are subject to fluctuations due to exchange rate variation. Foreign currency risk exists by
nature of the Companys global operations. The Company sells its services in a number of locations around the world, and hence foreign currency risk is diversified.

When appropriate, the Company may attempt to limit its exposure to changing foreign exchange rates through both operational and financial market actions. These actions may include entering into forward contracts to
hedge existing exposures. The instrument is used to reduce risk by essentially creating offsetting currency exposure.

Substantially all of
the Companys foreign affiliates financial instruments are denominated in their respective functional currencies. Accordingly, exposure to exchange risk on foreign currency financial instruments is not material.



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|ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|------- | -------------------------------------------

The
Financial Statements and Supplementary Data required by this item are filed as part of this Form 10-K. See Index to Consolidated Financial Statements on page 38 of this Form 10-K.



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MANAGEMENTS RESPONSIBILITY FOR FINANCIAL REPORTING

The accompanying consolidated financial statements of iGATE Corporation and subsidiaries have been prepared by management, which is responsible for their
integrity and objectivity. The statements have been prepared in conformity with accounting principles generally accepted in the United States of America and necessarily include amounts based on managements best estimates and judgments.

The Companys consolidated financial statements for the year ended December 31, 2005 have been audited by BDO Seidman LLP,
Independent Registered Public Accounting Firm, whose report thereon appears on page 39 of this Form 10-K.

The Board of Directors pursues
its responsibility for the Companys financial reporting and accounting practices through its Audit Committee, all of the members of which are independent directors. The Audit Committees duties include recommending to the Board of
Directors the Independent Registered Public Accounting Firm to audit the Companys financial statements, reviewing the scope and results of the independent accountants activities and reporting the results of the committees activities to
the Board of Directors. The Independent Registered Public Accounting Firm has met with the Audit Committee in the presence of management representatives to discuss the results of their audit work. The Independent Registered Public Accounting Firm
has direct access to the Audit Committee.

Sunil Wadhwani

Co-Chairman, Chief Executive Officer, and Director

Michael J. Zugay

Senior Vice-President and Chief Financial Officer



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iGATE CORPORATION

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



|                                                                                                                            |  |     
|--------------------------------------------------------------------------------------------------------------------------- |  | ----
|                                                                                                                            |  | Page
|Reports of Independent Registered Public Accounting Firms                                                                   |  | 39  
|                                                                                                                            | 
|Consolidated Balance Sheets as of December 31, 2005 and 2004                                                                |  | 41  
|                                                                                                                            | 
|Consolidated Statements of Operations for the years ended December 31, 2005, 2004 and 2003                                  |  | 42  
|                                                                                                                            | 
|Consolidated Statements of Shareholders Equity and Comprehensive Loss for the years ended December 31, 2005, 2004 and 2003 |  | 43  
|                                                                                                                            | 
|Consolidated Statements of Cash Flows for the years ended December 31, 2005, 2004 and 2003                                  |  | 44  
|                                                                                                                            | 
|Notes to Consolidated Financial Statements                                                                                  |  | 45  



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Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholders

iGate Corporation

Pittsburgh, Pennsylvania

We have audited the accompanying consolidated balance sheet of iGate Corporation as of December 31, 2005 and the related consolidated statements of income,
stockholders equity, and cash flows for the year ended December 31, 2005. We have also audited the accompanying Schedule II, Valuation of Qualifying Accounts. These financial statements and schedule are the responsibility of the
Companys management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our
audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and schedule
are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statements presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion,
the consolidated financial statements referred to above present fairly, in all material respects, the financial position of iGate Corporation at December 31, 2005, and the results of its operations and its cash flows for the year ended
December 31, 2005, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in
accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of iGate Corporations internal control over financial reporting as of December 31, 2005, based on criteria established in
Internal Control  Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated March 3, 2006, expressed an unqualified opinion thereon.

/s/ BDO Seidman LLP

Milwaukee, Wisconsin

March 3, 2006



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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and
Shareholders of iGATE Corporation:

In our opinion, the consolidated balance sheet as of December 31, 2004 and the related consolidated
statements of operations, shareholders equity and comprehensive loss and cash flows for each of the two years in the period ended December 31, 2004 present fairly, in all material respects, the financial position of iGATE Corporation and its
subsidiaries at December 31, 2004, and the results of their operations and their cash flows for each of the two years in the period ended December 31, 2004, in conformity with accounting principles generally accepted in the United States
of America. In addition, in our opinion, the financial statement schedule for each of the two years in the period ended December 31, 2004 presents fairly, in all material respects, the information set forth therein when read in conjunction with
the related consolidated financial statements. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits
of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

/S/    PRICEWATERHOUSECOOPERS LLP

Pittsburgh,
Pennsylvania

April 29, 2005



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iGATE CORPORATION

CONSOLIDATED BALANCE SHEETS



|                                                                                                                                                            |  |                                                  |         |   |      |   |         |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------ | ------- | - | ---- | - | ------- | -
|                                                                                                                                                            |  | At December 31,                                  |        
|                                                                                                                                                            |  | 2005                                             |         |   | 2004 |  
|                                                                                                                                                            |  | (Dollars in thousands, except per share amounts) |        
|ASSETS                                                                                                                                                      |  |                                                  |         |   |      |   |         |  
|Current assets:                                                                                                                                             |  |                                                  |         |   |      |   |         |  
|Cash and cash equivalents                                                                                                                                   |  | $                                                | 45,837  |   |      | $ | 28,201  |  
|Short-term investments                                                                                                                                      |  |                                                  | 30,798  |   |      |   | 35,863  |  
|Accounts receivable, net of allowance for uncollectible accounts of $1,776 and $3,892, respectively                                                         |  |                                                  | 39,456  |   |      |   | 47,451  |  
|Unbilled receivables                                                                                                                                        |  |                                                  | 10,023  |   |      |   | 13,912  |  
|Employee advances                                                                                                                                           |  |                                                  | 1,140   |   |      |   | 1,353   |  
|Prepaid and other current assets                                                                                                                            |  |                                                  | 6,097   |   |      |   | 5,632   |  
|Prepaid income taxes                                                                                                                                        |  |                                                  | 1,060   |   |      |   | 435     |  
|Deferred income taxes                                                                                                                                       |  |                                                  | 1,058   |   |      |   | 2,304   |  
|                                                                                                                                                            |  |                                                  |         |   |      |   |         |  
|Total current assets                                                                                                                                        |  |                                                  | 135,469 |   |      |   | 135,151 |  
|                                                                                                                                                            |  |                                                  |         |   |      |   |         |  
|Investments in unconsolidated affiliates                                                                                                                    |  |                                                  | 1,050   |   |      |   | 3,951   |  
|                                                                                                                                                            |  |                                                  |         |   |      |   |         |  
|Land, building, equipment and leasehold improvements, at cost:                                                                                              |  |                                                  |         |   |      |   |         |  
|Land and building                                                                                                                                           |  |                                                  | 9,976   |   |      |   | 8,124   |  
|Equipment                                                                                                                                                   |  |                                                  | 53,088  |   |      |   | 47,931  |  
|Leasehold improvements                                                                                                                                      |  |                                                  | 3,138   |   |      |   | 3,209   |  
|                                                                                                                                                            |  |                                                  |         |   |      |   |         |  
|                                                                                                                                                            |  |                                                  | 66,202  |   |      |   | 59,264  |  
|Lessaccumulated depreciation                                                                                                                               |  |                                                  | (37,663 | ) |      |   | (33,450 | )
|                                                                                                                                                            |  |                                                  |         |   |      |   |         |  
|Net land, building, equipment and leasehold improvements                                                                                                    |  |                                                  | 28,539  |   |      |   | 25,814  |  
|                                                                                                                                                            |  |                                                  |         |   |      |   |         |  
|Goodwill                                                                                                                                                    |  |                                                  | 8,851   |   |      |   | 9,398   |  
|Intangible assets, net                                                                                                                                      |  |                                                  | 3,565   |   |      |   | 5,918   |  
|                                                                                                                                                            |  |                                                  |         |   |      |   |         |  
|Total assets                                                                                                                                                |  | $                                                | 177,474 |   |      | $ | 180,232 |  
|                                                                                                                                                            |  |                                                  |         |   |      |   |         |  
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                                        |  |                                                  |         |   |      |   |         |  
|Current liabilities:                                                                                                                                        |  |                                                  |         |   |      |   |         |  
|Accounts payable                                                                                                                                            |  | $                                                | 5,958   |   |      | $ | 8,636   |  
|Accrued payroll and related costs                                                                                                                           |  |                                                  | 16,304  |   |      |   | 16,662  |  
|Accrued income taxes                                                                                                                                        |  |                                                  |        |   |      |   | 2,019   |  
|Other accrued liabilities                                                                                                                                   |  |                                                  | 8,163   |   |      |   | 9,555   |  
|Restructuring reserve                                                                                                                                       |  |                                                  | 2,355   |   |      |   | 3,692   |  
|Deferred revenue                                                                                                                                            |  |                                                  | 362     |   |      |   | 653     |  
|Current liabilities of discontinued operations                                                                                                              |  |                                                  |        |   |      |   | 88      |  
|                                                                                                                                                            |  |                                                  |         |   |      |   |         |  
|Total current liabilities                                                                                                                                   |  |                                                  | 33,142  |   |      |   | 41,305  |  
|Restructuring reserve                                                                                                                                       |  |                                                  | 2,422   |   |      |   | 3,777   |  
|Other long-term liabilities                                                                                                                                 |  |                                                  | 422     |   |      |   | 564     |  
|Deferred income taxes                                                                                                                                       |  |                                                  | 9,718   |   |      |   | 9,520   |  
|                                                                                                                                                            |  |                                                  |         |   |      |   |         |  
|Total liabilities                                                                                                                                           |  |                                                  | 45,704  |   |      |   | 55,166  |  
|                                                                                                                                                            |  |                                                  |         |   |      |   |         |  
|Minority interest                                                                                                                                           |  |                                                  | 14,098  |   |      |   | 13,366  |  
|Shareholders equity:                                                                                                                                       |  |                                                  |         |   |      |   |         |  
|Preferred Stock, without par value: 20,000,000 shares authorized, 1 share of Series A Preferred Stock held in treasury in 2005 and 2004,
respectively       |  |                                                  |        |   |      |   |        |  
|Common Stock, par value $0.01 per share: 100,000,000 shares authorized, 53,756,638 and 53,502,448 shares issued at December 31, 2005 and
2004, respectively |  |                                                  | 538     |   |      |   | 535     |  
|Additional paid-in capital                                                                                                                                  |  |                                                  | 162,278 |   |      |   | 161,345 |  
|Accumulated deficit                                                                                                                                         |  |                                                  | (29,741 | ) |      |   | (36,710 | )
|Deferred compensation                                                                                                                                       |  |                                                  | (1,119  | ) |      |   | (1,934  | )
|Common Stock held in treasury, at cost, 990,102 shares at December 31, 2005 and 2004, respectively                                                          |  |                                                  | (14,714 | ) |      |   | (14,714 | )
|Accumulated other comprehensive income                                                                                                                      |  |                                                  | 430     |   |      |   | 3,178   |  
|                                                                                                                                                            |  |                                                  |         |   |      |   |         |  
|Total shareholders equity                                                                                                                                  |  |                                                  | 117,672 |   |      |   | 111,700 |  
|                                                                                                                                                            |  |                                                  |         |   |      |   |         |  
|Total liabilities and shareholders equity                                                                                                                  |  | $                                                | 177,474 |   |      | $ | 180,232 |  
|                                                                                                                                                            |  |                                                  |         |   |      |   |         |  

The accompanying notes are an integral part of these consolidated financial statements.



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iGATE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS



|                                                                |  |                                              |         |   |      |   |         |      |  |   |         |  
|--------------------------------------------------------------- |  | -------------------------------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                                                                |  | Year Ended December 31,                      |        
|                                                                |  | 2005                                         |         |   | 2004 |   |         | 2003 | 
|                                                                |  | (Dollars in thousands, except pershare data) |        
|Revenues                                                        |  | $                                            | 275,992 |   |      | $ | 264,585 |      |  | $ | 240,634 |  
|Cost of revenues                                                |  |                                              | 205,110 |   |      |   | 197,577 |      |  |   | 171,654 |  
|                                                                |  |                                              |         |   |      |   |         |      |  |   |         |  
|Gross margin                                                    |  |                                              | 70,882  |   |      |   | 67,008  |      |  |   | 68,980  |  
|Selling, general and administrative                             |  |                                              | 67,483  |   |      |   | 82,079  |      |  |   | 72,936  |  
|Gain on sale of land                                            |  |                                              |        |   |      |   | (3,615  | )    |  |   |        |  
|Restructuring (recovery) charges                                |  |                                              | (481    | ) |      |   | 5,805   |      |  |   | 604     |  
|                                                                |  |                                              |         |   |      |   |         |      |  |   |         |  
|Income (loss) from operations                                   |  |                                              | 3,880   |   |      |   | (17,261 | )    |  |   | (4,560  | )
|Interest income                                                 |  |                                              | 2,123   |   |      |   | 901     |      |  |   | 2,657   |  
|Interest expense                                                |  |                                              | (204    | ) |      |   | (143    | )    |  |   | (155    | )
|Other (expense) income, net                                     |  |                                              | (2,194  | ) |      |   | 616     |      |  |   | (942    | )
|Equity in income (losses) of affiliated companies               |  |                                              | 338     |   |      |   | (335    | )    |  |   | (99     | )
|Minority interest                                               |  |                                              | (261    | ) |      |   | (677    | )    |  |   | (312    | )
|Gain on sale of stock of subsidiaries                           |  |                                              | 5,549   |   |      |   |        |      |  |   |        |  
|Loss on venture investments and affiliated companies, net       |  |                                              | (2,149  | ) |      |   |        |      |  |   | (28     | )
|                                                                |  |                                              |         |   |      |   |         |      |  |   |         |  
|Income (loss) before income taxes                               |  |                                              | 7,082   |   |      |   | (16,899 | )    |  |   | (3,439  | )
|Income tax expense (benefit)                                    |  |                                              | 113     |   |      |   | 5,130   |      |  |   | 2,179   |  
|                                                                |  |                                              |         |   |      |   |         |      |  |   |         |  
|Income (loss) from continuing operations                        |  |                                              | 6,969   |   |      |   | (22,029 | )    |  |   | (5,618  | )
|Income (loss) from discontinued operations, net of income taxes |  |                                              |        |   |      |   | 3,818   |      |  |   | (3,402  | )
|                                                                |  |                                              |         |   |      |   |         |      |  |   |         |  
|Net income (loss)                                               |  | $                                            | 6,969   |   |      | $ | (18,211 | )    |  | $ | (9,020  | )
|                                                                |  |                                              |         |   |      |   |         |      |  |   |         |  
|Net earnings (loss) per common share, basic:                    |  |                                              |         |   |      |   |         |      |  |   |         |  
|Earnings (loss) from continuing operations                      |  | $                                            | 0.13    |   |      | $ | (0.42   | )    |  | $ | (0.11   | )
|Earnings (loss) from discontinued operations                    |  |                                              |        |   |      |   | 0.07    |      |  |   | (0.07   | )
|                                                                |  |                                              |         |   |      |   |         |      |  |   |         |  
|Net earnings (loss)basic                                       |  | $                                            | 0.13    |   |      | $ | (0.35   | )    |  | $ | (0.17   | )
|                                                                |  |                                              |         |   |      |   |         |      |  |   |         |  
|Net earnings (loss) per common share, diluted:                  |  |                                              |         |   |      |   |         |      |  |   |         |  
|Earnings (loss) from continuing operations                      |  | $                                            | 0.13    |   |      | $ | (0.42   | )    |  | $ | (0.11   | )
|Earnings (loss) from discontinued operations                    |  |                                              |        |   |      |   | 0.07    |      |  |   | (0.07   | )
|                                                                |  |                                              |         |   |      |   |         |      |  |   |         |  
|Net earnings (loss)diluted                                     |  | $                                            | 0.13    |   |      | $ | (0.35   | )    |  | $ | (0.17   | )
|                                                                |  |                                              |         |   |      |   |         |      |  |   |         |  
|Weighted average common shares, basic                           |  |                                              | 52,530  |   |      |   | 52,721  |      |  |   | 51,697  |  
|                                                                |  |                                              |         |   |      |   |         |      |  |   |         |  
|Weighted average common shares, diluted                         |  |                                              | 52,734  |   |      |   | 52,721  |      |  |   | 51,697  |  
|                                                                |  |                                              |         |   |      |   |         |      |  |   |         |  

The accompanying notes are an integral part of these consolidated financial statements.



42



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##### Table of Contents

iGATE CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY AND COMPREHENSIVE INCOME (LOSS)



|                                                                            |  |                        |   |                         |          |                          |  |   |                      |   |         |                      |  |   |               |   |  |                                            |         |   |                          |   |         |                            |  |   |        |   |  |   |         |   |  |   |         |  
|--------------------------------------------------------------------------- |  | ---------------------- | - | ----------------------- | -------- | ------------------------ |  | - | -------------------- | - | ------- | -------------------- |  | - | ------------- | - |  | ------------------------------------------ | ------- | - | ------------------------ | - | ------- | -------------------------- |  | - | ------ | - |  | - | ------- | - |  | - | ------- | -
|                                                                            |  | Common Stock           |   | Series APreferredShares |          | AdditionalPaid-inCapital |  |   | Accumulated(Deficit) |   |         | DeferredCompensation |  |   | TreasuryStock |   |  | AccumulatedOtherComprehensiveIncome (Loss) |         |   | TotalShareholdersEquity |   |         | ComprehensiveIncome/(Loss) | 
|                                                                            |  | Shares                 |   |                         | ParValue |                          |  |   |                      |   |         |                      | 
|                                                                            |  | (Dollars in thousands) |  
|Balances, December 31, 2002                                                 |  | 51,442,450             |   |                         | $        | 525                      |  |  |                      | $ | 143,568 |                      |  | $ | (9,479        | ) |  | $                                          | (102    | ) |                          | $ | (14,714 | )                          |  | $ | (2,649 | ) |  | $ | 117,149 |   |  |   |         |  
|                                                                            |  |                        |   |                         |          |                          |  |   |                      |   |         |                      |  |   |               |   |  |                                            |         |   |                          |   |         |                            |  |   |        |   |  |   |         |   |  |   |         |  
|Exercise of stock options, including tax benefit recognized of $0.3 million |  | 273,422                |   |                         |          | 3                        |  |  |                      |   | 891     |                      |  |   |              |   |  |                                            |        |   |                          |   |        |                            |  |   |       |   |  |   | 894     |   |  |   |         |  
|Shares sold to employees                                                    |  | 108,036                |   |                         |          | 1                        |  |  |                      |   | 308     |                      |  |   |              |   |  |                                            |        |   |                          |   |        |                            |  |   |       |   |  |   | 309     |   |  |   |         |  
|Restricted stock award                                                      |  |                       |   |                         |          |                         |  |  |                      |   | 15,569  |                      |  |   |              |   |  |                                            | (10,462 | ) |                          |   |        |                            |  |   |       |   |  |   | 5,107   |   |  |   |         |  
|Amortization of deferred compensation                                       |  |                       |   |                         |          |                         |  |  |                      |   |        |                      |  |   |              |   |  |                                            | 1,631   |   |                          |   |        |                            |  |   |       |   |  |   | 1,631   |   |  |   |         |  
|Comprehensive income:                                                       |  |                        |   |                         |          |                          |  |   |                      |   |         |                      |  |   |               |   |  |                                            |         |   |                          |   |         |                            |  |   |        |   |  |   |         |   |  |   |         |  
|Unrealized gain on investments, net of tax of $0.4 million                  |  |                       |   |                         |          |                         |  |  |                      |   |        |                      |  |   |              |   |  |                                            |        |   |                          |   |        |                            |  |   | 670    |   |  |   | 670     |   |  | $ | 670     |  
|Reclassification adjustment for gains realized in net loss                  |  |                       |   |                         |          |                         |  |  |                      |   |        |                      |  |   |              |   |  |                                            |        |   |                          |   |        |                            |  |   | (760   | ) |  |   | (760    | ) |  |   | (760    | )
|Currency translation adjustment                                             |  |                       |   |                         |          |                         |  |  |                      |   |        |                      |  |   |              |   |  |                                            |        |   |                          |   |        |                            |  |   | 6,155  |   |  |   | 6,155   |   |  |   | 6,155   |  
|Net loss                                                                    |  |                       |   |                         |          |                         |  |  |                      |   |        |                      |  |   | (9,020        | ) |  |                                            |        |   |                          |   |        |                            |  |   |       |   |  |   | (9,020  | ) |  |   | (9,020  | )
|                                                                            |  |                        |   |                         |          |                          |  |   |                      |   |         |                      |  |   |               |   |  |                                            |         |   |                          |   |         |                            |  |   |        |   |  |   |         |   |  |   |         |  
|                                                                            |  |                        |   |                         |          |                          |  |   |                      |   |         |                      |  |   |               |   |  |                                            |         |   |                          |   |         |                            |  |   |        |   |  |   |         |   |  | $ | (2,955  | )
|                                                                            |  |                        |   |                         |          |                          |  |   |                      |   |         |                      |  |   |               |   |  |                                            |         |   |                          |   |         |                            |  |   |        |   |  |   |         |   |  |   |         |  
|Balances, December 31, 2003                                                 |  | 51,823,908             |   |                         | $        | 529                      |  |  |                      | $ | 160,336 |                      |  | $ | (18,499       | ) |  | $                                          | (8,933  | ) |                          | $ | (14,714 | )                          |  | $ | 3,416  |   |  | $ | 122,135 |   |  |   |         |  
|                                                                            |  |                        |   |                         |          |                          |  |   |                      |   |         |                      |  |   |               |   |  |                                            |         |   |                          |   |         |                            |  |   |        |   |  |   |         |   |  |   |         |  
|Exercise of stock options, including tax benefit recognized of $0.3 million |  | 178,173                |   |                         |          | 1                        |  |  |                      |   | 802     |                      |  |   |              |   |  |                                            |        |   |                          |   |        |                            |  |   |       |   |  |   | 803     |   |  |   |         |  
|Treasury stock transactions                                                 |  | (25,659                | ) |                         |          |                         |  |  |                      |   |        |                      |  |   |              |   |  |                                            |        |   |                          |   |        |                            |  |   |       |   |  |   |        |   |  |   |         |  
|Shares issued to employees                                                  |  | 455,924                |   |                         |          | 4                        |  |  |                      |   | 1,327   |                      |  |   |              |   |  |                                            |        |   |                          |   |        |                            |  |   |       |   |  |   | 1,331   |   |  |   |         |  
|Restricted stock award                                                      |  | 80,000                 |   |                         |          | 1                        |  |  |                      |   | 293     |                      |  |   |              |   |  |                                            | (294    | ) |                          |   |        |                            |  |   |       |   |  |   |        |   |  |   |         |  
|Modification of Quintant acquisition agreement                              |  |                       |   |                         |          |                         |  |  |                      |   | (1,413  | )                    |  |   |              |   |  |                                            |        |   |                          |   |        |                            |  |   |       |   |  |   | (1,413  | ) |  |   |         |  
|Amortization of deferred compensation                                       |  |                       |   |                         |          |                         |  |  |                      |   |        |                      |  |   |              |   |  |                                            | 7,293   |   |                          |   |        |                            |  |   |       |   |  |   | 7,293   |   |  |   |         |  
|Comprehensive income:                                                       |  |                        |   |                         |          |                          |  |   |                      |   |         |                      |  |   |               |   |  |                                            |         |   |                          |   |         |                            |  |   |        |   |  |   |         |   |  |   |         |  
|Unrealized loss on investments, net of tax                                  |  |                       |   |                         |          |                         |  |  |                      |   |        |                      |  |   |              |   |  |                                            |        |   |                          |   |        |                            |  |   | (73    | ) |  |   | (73     | ) |  | $ | (73     | )
|Reclassification adjustment for gains realized in net loss                  |  |                       |   |                         |          |                         |  |  |                      |   |        |                      |  |   |              |   |  |                                            |        |   |                          |   |        |                            |  |   | (121   | ) |  |   | (121    | ) |  |   | (121    | )
|Currency translation adjustment                                             |  |                       |   |                         |          |                         |  |  |                      |   |        |                      |  |   |              |   |  |                                            |        |   |                          |   |        |                            |  |   | (44    | ) |  |   | (44     | ) |  |   | (44     | )
|Net loss                                                                    |  |                       |   |                         |          |                         |  |  |                      |   |        |                      |  |   | (18,211       | ) |  |                                            |        |   |                          |   |        |                            |  |   |       |   |  |   | (18,211 | ) |  |   | (18,211 | )
|                                                                            |  |                        |   |                         |          |                          |  |   |                      |   |         |                      |  |   |               |   |  |                                            |         |   |                          |   |         |                            |  |   |        |   |  |   |         |   |  |   |         |  
|                                                                            |  |                        |   |                         |          |                          |  |   |                      |   |         |                      |  |   |               |   |  |                                            |         |   |                          |   |         |                            |  |   |        |   |  |   |         |   |  | $ | (18,449 | )
|                                                                            |  |                        |   |                         |          |                          |  |   |                      |   |         |                      |  |   |               |   |  |                                            |         |   |                          |   |         |                            |  |   |        |   |  |   |         |   |  |   |         |  
|Balances, December 31, 2004                                                 |  | 52,512,346             |   |                         | $        | 535                      |  |  |                      | $ | 161,345 |                      |  | $ | (36,710       | ) |  | $                                          | (1,934  | ) |                          | $ | (14,714 | )                          |  | $ | 3,178  |   |  | $ | 111,700 |   |  |   |         |  
|                                                                            |  |                        |   |                         |          |                          |  |   |                      |   |         |                      |  |   |               |   |  |                                            |         |   |                          |   |         |                            |  |   |        |   |  |   |         |   |  |   |         |  
|Exercise of stock options, including tax benefit recognized of $0.1 million |  | 254,190                |   |                         |          | 3                        |  |  |                      |   | 933     |                      |  |   |              |   |  |                                            |        |   |                          |   |        |                            |  |   |       |   |  |   | 936     |   |  |   |         |  
|Amortization of deferred compensation                                       |  |                       |   |                         |          |                         |  |  |                      |   |        |                      |  |   |              |   |  |                                            | 815     |   |                          |   |        |                            |  |   |       |   |  |   | 815     |   |  |   |         |  
|Comprehensive income:                                                       |  |                        |   |                         |          |                          |  |   |                      |   |         |                      |  |   |               |   |  |                                            |         |   |                          |   |         |                            |  |   |        |   |  |   |         |   |  |   |         |  
|Reclassification adjustment for gains realized in net income                |  |                       |   |                         |          |                         |  |  |                      |   |        |                      |  |   |              |   |  |                                            |        |   |                          |   |        |                            |  |   | (65    | ) |  |   | (65     | ) |  | $ | (65     | )
|Currency translation adjustment                                             |  |                       |   |                         |          |                         |  |  |                      |   |        |                      |  |   |              |   |  |                                            |        |   |                          |   |        |                            |  |   | (2,683 | ) |  |   | (2,683  | ) |  |   | (2,683  | )
|Net income                                                                  |  |                       |   |                         |          |                         |  |  |                      |   |        |                      |  |   | 6,969         |   |  |                                            |        |   |                          |   |        |                            |  |   |       |   |  |   | 6,969   |   |  |   | 6,969   |  
|                                                                            |  |                        |   |                         |          |                          |  |   |                      |   |         |                      |  |   |               |   |  |                                            |         |   |                          |   |         |                            |  |   |        |   |  |   |         |   |  |   |         |  
|                                                                            |  |                        |   |                         |          |                          |  |   |                      |   |         |                      |  |   |               |   |  |                                            |         |   |                          |   |         |                            |  |   |        |   |  |   |         |   |  | $ | 4,221   |  
|                                                                            |  |                        |   |                         |          |                          |  |   |                      |   |         |                      |  |   |               |   |  |                                            |         |   |                          |   |         |                            |  |   |        |   |  |   |         |   |  |   |         |  
|Balances, December 31, 2005                                                 |  | 52,766,536             |   |                         | $        | 538                      |  |  |                      | $ | 162,278 |                      |  | $ | (29,741       | ) |  | $                                          | (1,119  | ) |                          | $ | (14,714 | )                          |  | $ | 430    |   |  | $ | 117,672 |   |  |   |         |  
|                                                                            |  |                        |   |                         |          |                          |  |   |                      |   |         |                      |  |   |               |   |  |                                            |         |   |                          |   |         |                            |  |   |        |   |  |   |         |   |  |   |         |  

---

|(1) | The Company has reclassified all stock held in Treasury to reflect only outstanding common stock.
|--- | -------------------------------------------------------------------------------------------------

The accompanying notes are an integral part of these consolidated financial statements.



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iGATE CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS



|                                                                                  |  |                         |         |   |      |   |         |      |  |   |         |  
|--------------------------------------------------------------------------------- |  | ----------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                                                                                  |  | Year Ended December 31, |        
|                                                                                  |  | 2005                    |         |   | 2004 |   |         | 2003 | 
|                                                                                  |  | (Dollars in thousands)  |        
|CASH FLOWS FROM OPERATING ACTIVITIES:                                             |  |                         |         |   |      |   |         |      |  |   |         |  
|Operations:                                                                       |  |                         |         |   |      |   |         |      |  |   |         |  
|Net income (loss)                                                                 |  | $                       | 6,969   |   |      | $ | (18,211 | )    |  | $ | (9,020  | )
|Adjustments to reconcile net income (loss) to cash provided (used) by operations: |  |                         |         |   |      |   |         |      |  |   |         |  
|(Income) loss from discontinued operations, net of tax                            |  |                         |        |   |      |   | (3,818  | )    |  |   | 3,402   |  
|Depreciation and amortization                                                     |  |                         | 10,915  |   |      |   | 8,720   |      |  |   | 5,935   |  
|Gain on sale of stock of subsidiaries                                             |  |                         | (5,549  | ) |      |   |        |      |  |   | (296    | )
|Gain on sale of land                                                              |  |                         |        |   |      |   | (3,615  | )    |  |   |        |  
|Gain on other investments                                                         |  |                         | (206    | ) |      |   |        |      |  |   | (866    | )
|Unrealized loss on derivative instruments                                         |  |                         | 1,263   |   |      |   |        |      |  |   |        |  
|Bad debt (recovery) expense                                                       |  |                         | (949    | ) |      |   | 2,735   |      |  |   | 253     |  
|Deferred income taxes, net                                                        |  |                         | 1,017   |   |      |   | 2,972   |      |  |   | 517     |  
|Loss on venture investments and affiliated companies, net                         |  |                         | 2,149   |   |      |   |        |      |  |   | 324     |  
|Loss on impairment of property and equipment                                      |  |                         |        |   |      |   | 373     |      |  |   |        |  
|Equity in (income) losses of affiliated companies                                 |  |                         | (338    | ) |      |   | 335     |      |  |   | 99      |  
|Minority interest                                                                 |  |                         | 261     |   |      |   | 677     |      |  |   | 312     |  
|Stock issued to employees                                                         |  |                         |        |   |      |   | 1,331   |      |  |   |        |  
|Discount on stock sold to employees                                               |  |                         | 606     |   |      |   | 1,811   |      |  |   |        |  
|Amortization of deferred compensation                                             |  |                         | 815     |   |      |   | 7,293   |      |  |   | 1,631   |  
|Working capital items excluding effects of divestitures:                          |  |                         |         |   |      |   |         |      |  |   |         |  
|Accounts receivable and unbilled receivables                                      |  |                         | 3,909   |   |      |   | (15,565 | )    |  |   | (4,668  | )
|Employee advances                                                                 |  |                         | 167     |   |      |   | 689     |      |  |   | (39     | )
|Prepaid and other current assets                                                  |  |                         | (822    | ) |      |   | 1,320   |      |  |   | 3,436   |  
|Accounts payable                                                                  |  |                         | 1,248   |   |      |   | (590    | )    |  |   | 2,225   |  
|Accrued and other current liabilities                                             |  |                         | (4,865  | ) |      |   | 8,042   |      |  |   | (12,603 | )
|Restructuring reserves                                                            |  |                         | (2,273  | ) |      |   | (2,891  | )    |  |   | (2,535  | )
|Deferred revenue                                                                  |  |                         | (274    | ) |      |   | (369    | )    |  |   | (2,843  | )
|                                                                                  |  |                         |         |   |      |   |         |      |  |   |         |  
|Net cash flows provided (used) by continuing operations                           |  |                         | 14,043  |   |      |   | (8,761  | )    |  |   | (14,736 | )
|                                                                                  |  |                         |         |   |      |   |         |      |  |   |         |  
|Cash flows (used) provided by operating activities of discontinued operations     |  |                         | (88     | ) |      |   | 1,002   |      |  |   | 596     |  
|                                                                                  |  |                         |         |   |      |   |         |      |  |   |         |  
|Net cash flows provided (used) by operating activities                            |  |                         | 13,955  |   |      |   | (7,759  | )    |  |   | (14,140 | )
|                                                                                  |  |                         |         |   |      |   |         |      |  |   |         |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                             |  |                         |         |   |      |   |         |      |  |   |         |  
|Additions to equipment and leasehold improvements, net                            |  |                         | (12,199 | ) |      |   | (14,934 | )    |  |   | (6,305  | )
|Purchases of investments                                                          |  |                         | (22,347 | ) |      |   | (36,359 | )    |  |   | (8,003  | )
|Sales of investments                                                              |  |                         | 27,288  |   |      |   | 40,689  |      |  |   | 21,399  |  
|Sales of investments in unconsolidated affiliates                                 |  |                         | 678     |   |      |   |        |      |  |   | 1,418   |  
|Investments in unconsolidated affiliates                                          |  |                         |        |   |      |   | (1,612  | )    |  |   | (1,942  | )
|Acquisitions, net of cash acquired                                                |  |                         |        |   |      |   | (648    | )    |  |   | (15,396 | )
|Proceeds from sale of land                                                        |  |                         |        |   |      |   | 4,780   |      |  |   |        |  
|Proceeds from sale of affiliates, net of cash                                     |  |                         | 9,310   |   |      |   | 7,180   |      |  |   |        |  
|Contingent consideration for acquisitions                                         |  |                         |        |   |      |   |        |      |  |   | (1,026  | )
|                                                                                  |  |                         |         |   |      |   |         |      |  |   |         |  
|Net cash flows provided (used) by investing activities                            |  |                         | 2,730   |   |      |   | (904    | )    |  |   | (9,855  | )
|                                                                                  |  |                         |         |   |      |   |         |      |  |   |         |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                             |  |                         |         |   |      |   |         |      |  |   |         |  
|Payments on secured financing                                                     |  |                         | (301    | ) |      |   |        |      |  |   |        |  
|Proceeds from issuance of stock by subsidiary                                     |  |                         |        |   |      |   | 1,092   |      |  |   |        |  
|Net proceeds from exercise of stock options                                       |  |                         | 1,166   |   |      |   | 1,880   |      |  |   | 1,033   |  
|                                                                                  |  |                         |         |   |      |   |         |      |  |   |         |  
|Net cash flows provided by financing activities                                   |  |                         | 865     |   |      |   | 2,972   |      |  |   | 1,033   |  
|                                                                                  |  |                         |         |   |      |   |         |      |  |   |         |  
|Effect of currency translation                                                    |  |                         | 86      |   |      |   | (2,241  | )    |  |   | 2,302   |  
|                                                                                  |  |                         |         |   |      |   |         |      |  |   |         |  
|Net change in cash and cash equivalents                                           |  |                         | 17,636  |   |      |   | (7,932  | )    |  |   | (20,660 | )
|Cash and cash equivalents, beginning of year                                      |  |                         | 28,201  |   |      |   | 36,133  |      |  |   | 56,793  |  
|                                                                                  |  |                         |         |   |      |   |         |      |  |   |         |  
|Cash and cash equivalents, end of year                                            |  | $                       | 45,837  |   |      | $ | 28,201  |      |  | $ | 36,133  |  
|                                                                                  |  |                         |         |   |      |   |         |      |  |   |         |  
|SUPPLEMENTAL DISCLOSURE:                                                          |  |                         |         |   |      |   |         |      |  |   |         |  
|Cash payments for income taxes                                                    |  | $                       | 1,218   |   |      | $ | 576     |      |  | $ | 908     |  
|                                                                                  |  |                         |         |   |      |   |         |      |  |   |         |  
|NON-CASH INVESTING AND FINANCING ACTIVITIES:                                      |  |                         |         |   |      |   |         |      |  |   |         |  
|Unrealized (loss) gain on investments and derivative instruments                  |  | $                       | (1,263  | ) |      | $ | (194    | )    |  | $ | (90     | )
|                                                                                  |  |                         |         |   |      |   |         |      |  |   |         |  
|Common stock issued for acquisition                                               |  | $                       |        |   |      | $ |        |      |  | $ | 15,569  |  
|                                                                                  |  |                         |         |   |      |   |         |      |  |   |         |  
|Capitalized leases                                                                |  | $                       | 301     |   |      | $ | 769     |      |  | $ |        |  
|                                                                                  |  |                         |         |   |      |   |         |      |  |   |         |  

The accompanying notes are an integral part of these consolidated financial statements.



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##### Table of Contents

iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2005 AND 2004



|1. | Summary of Significant Accounting Policies
|-- | ------------------------------------------

(a)
Nature of Business

iGATE Corporation (the Company) is a worldwide provider of information technology (IT) and
offshore outsourcing services to large and medium-sized organizations.

(b) Principles of Consolidation

The Consolidated Financial Statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries. All material intercompany
transactions and balances have been eliminated in consolidation. The Company accounts for investments in businesses in which it owns between 20% and 50% of equity or otherwise acquires management influence using the equity method as prescribed by
Accounting Principles Board Opinion No. 18, The Equity Method of Accounting for Investments in Common Stock. Investments in which the Company acquires less than a 20% interest, or in which the Company does not acquire management
influence, are accounted for using the cost method of accounting or, if publicly traded, as available-for-sale securities.

(c) Uses 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.

(d) Reclassifications

Certain amounts in previously issued financial statements were reclassified to conform to 2005 presentations. See Note 13 for further information.

(e) Cash and Cash Equivalents

Cash and cash equivalents are defined as cash and highly liquid investments with maturities of three months or less when purchased. Cash equivalents are stated at cost, which approximates market value.

(f) Short-Term Investments

Short-term investments consist of money market funds and corporate bonds and are stated at cost which approximates fair value.

(g) Accounts Receivable and Unbilled Receivables

The Company extends credit to clients based upon managements
assessment of their creditworthiness. Substantially all of the Companys revenues (and the resulting accounts receivable) are from Fortune 1000 companies, major systems integrators and governmental agencies.

Unbilled receivables represent amounts recognized as revenues for the periods presented based on services performed in accordance with the terms of
client contracts that will be invoiced in subsequent periods.



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



(h) Allowance for Uncollectible Accounts

Accounts receivables are reviewed periodically to determine the probability of loss. The allowance for uncollectible accounts is determined using the
combination of the specific identification method for balances deemed uncollectible, as well as judgments made by the Company based upon historical and expected charge-off experience.

(i) Employee Advances

Employees can
be advanced up to $2,500 at the discretion of the Company. Normally, advances are based upon financial need at date of hire. Advances are deducted from the employees salary over a six-month period or until paid in full.

(j) Investments in Unconsolidated Affiliates

The Company accounts for its investments in marketable equity securities in accordance with Statements of Financial Accounting Standards (SFAS) No. 115, Accounting for Certain Investments in Debt and Equity
Securities (SFAS 115). The Company has determined that certain of its investments in marketable equity securities are classified as available-for-sale and recorded at fair value, utilizing the investments closing price at each
reporting period. These investments are recorded on the balance sheet at market value, with the unrealized gains or losses, net of tax, reported as a component of accumulated other comprehensive income in the Consolidated Statement of
Shareholders Equity and Comprehensive Loss. The unrealized gain or loss is the difference between the Companys original cost for an investment and the investments fair value at each reporting period. Realized gains or losses on
securities sold are calculated using the specific identification method.

If management determines that an investment in available for sale
securities has sustained an other-than-temporary decline in its value, the investment is written down to its fair value, by a charge to earnings. Such evaluation is dependent on the specific facts and circumstances. Factors that are considered by
the Company in determining whether an other-than-temporary decline in value has occurred include: the market value of the security in relation to its cost basis; the financial condition of the investee; and the intent and ability to retain the
investment for a sufficient period of time to allow for recovery in the market value of the investment.

In evaluating these factors above,
management presumes a decline in value to be other-than-temporary if the market price of the security is 20% or more below the investments cost basis for a period of six months or more (the 20% criteria). However, the presumption
of an other-than-temporary decline in these instances may be overcome if there is persuasive evidence indicating that the decline is temporary in nature (e.g., strong operating performance of investee, historical volatility of investee, etc.).
Additionally, there may be instances where impairment losses are recognized even if the 20% criteria is not satisfied (e.g., plan to sell the security in the near term and the fair value is below the Companys cost basis). During 2003, the
Company incurred impairment losses deemed to be other-than-temporary. These impairments are disclosed in Note 4. No such impairment losses were incurred in 2005 or 2004.

For investments accounted for using the cost or equity method of accounting, management evaluates information (e.g., budgets, business plans, financial statements, etc.) in addition to quoted market price, if any, in
determining whether an other-than-temporary decline in value exists. Factors indicative of an other-than-temporary decline include recurring operating losses, credit defaults and subsequent rounds of financings at an amount below the cost basis of
an investment. This list is not all inclusive and management weighs all



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



quantitative factors in determining if an other-than-temporary decline in value of an investment has occurred. In 2005, the Company recorded an impairment of
$2.5 million on its investment in Concours, Inc. There were no impairments recorded in 2004.

(k) Land, Building, Equipment and
Leasehold Improvements

Property and equipment are stated at cost. The Company provides for depreciation using the straight-line method
over the estimated useful lives. Upon disposal, assets and related accumulated depreciation are removed from the Companys accounts and the resulting gains and losses are reflected in loss from operations in the Consolidated Statements of
Operations. Repairs and maintenance are charged to expense as incurred. Improvement and betterments that extend the useful life of an asset are capitalized.

The estimated useful lives of depreciable assets are as follows:



|                       |  |                                                                                
|---------------------- |  | -------------------------------------------------------------------------------
|Building               |  | 25 years                                                                       
|Laptop Computers       |  | 18 months                                                                      
|Equipment              |  | 35 years                                                                      
|Leasehold Improvements |  | Shorter of the life of the improvement or lease term ranging from 3 to 10 years

(l) Goodwill and Intangible Assets

Goodwill is the excess of purchase price over the value of the net assets acquired. Under SFAS 142, Goodwill and Other Intangible Assets, goodwill
and intangibles with indefinite useful lives are no longer amortized but will be subject to, at a minimum, an annual impairment assessment of their carrying value. Under SFAS 142, goodwill impairment is deemed to exist if the net book value of a
reporting unit exceeds its estimated fair value. Estimated fair values of reporting units underlying the segments were estimated using either a discounted cash flow methodology, recent comparable transactions or a combination thereof. For further
discussions, see Note 5.

The cost of other acquired intangibles is amortized on a straight-line basis over their estimated useful lives.

The estimated useful lives of intangible assets are as follows:



|                                |  |          
|------------------------------- |  | ---------
|Intellectual property           |  | 35 years
|Customer relationships          |  | 36 years
|Beneficial employment contracts |  | 24 years

The Company assesses the carrying value of its long-lived assets, including land, building,
equipment and leasehold improvement and amortizable intangible assets, whenever economic events or changes in circumstances indicate that the carrying values of the assets may not be recoverable. Long-lived assets are considered to be impaired when
the sum of the undiscounted expected future net operating cash flows is less than the carrying values of the related assets.

(m) Income
Taxes

Deferred income taxes are provided for the temporary differences between the financial reporting basis and the tax basis of the
Companys assets and liabilities. The Company has evaluated its deferred tax asset and has recorded a valuation allowance where appropriate.



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



Historically, the government of India has provided incentives, in the form of tax holidays, to
encourage foreign investment. Under the Indian Income Tax Act, 1961, the Companys Indian subsidiary is eligible to claim a tax holiday for 10 consecutive assessment years on profits derived from the export of software services from divisions
registered under the Software Technology Parks at Bangalore, Chennai and Pune. The benefits of the holiday began to expire for certain of the units in 2005.

The Company has not provided for U.S. deferred income taxes or foreign withholding tax on basis differences in its non-U.S. subsidiaries of $5.8 million that result primarily from undistributed earnings the Company
intends to reinvest indefinitely. Determination of the deferred income tax liability on these basis differences is not practicable because such liability, if any, is dependent on circumstances existing if and when remittance occurs.

(n) Minority Interest

Minority
interest represents the proportionate share of outside equity holders. At December 31, 2005 and 2004, the Company had outside equity holders for the following Companies:



|                                    |  |                              |   |  |      |  
|----------------------------------- |  | ---------------------------- | - |  | ---- | -
|                                    |  | Percentage Outside Ownership |  
|                                    |  | 2005                         |   |  | 2004 |  
|iGATE Global Solutions Ltd. (iGS) |  | 18.4                         | % |  | 17.9 | %
|Quintant, Inc. (Quintant)           |  | 18.4                         | % |  | 17.9 | %
|DiagnoSearch                        |  | 5                            | % |  | 5    | %

iGS is a publicly held Company in India. All outside shareholders may vote.

(o) Disclosures about Fair Value of Financial Instruments

The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate that fair value:

Cash and short-term investmentsThe carrying amount approximates market value.

Accounts receivableThe carrying amount approximates market.

Revolving credit facilityThe carrying amount approximates market value. The outstanding balance is reflected at its outstanding face value, excluding unpaid accrued interest at an interest rate at the
lesser of the current LIBOR rate+1.25% or the Prime rate +0.25%, calculated on a per annum basis.

Accounts payableThe
carrying amount approximates market.

(p) Derivatives Instruments and Hedging Activities

The Company uses derivative financial instruments for the purpose of hedging currency, price, and interest rate exposures, which exist as part of ongoing
business operations. The Company carries derivative instruments on the balance sheet at fair value, determined by reference to quoted market prices. Derivatives are included in other assets and other liabilities based on the instruments fair
value. The accounting for changes in the fair value



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, if so, the reason for holding it.
The cash flows related to derivative instruments are classified in the consolidated statements of cash flows within operating activities as a component of other items, net.

The Company recorded $1.2 million in other expense in 2005 and $0.1 million in other income in 2004 related to its foreign currency hedging transactions.

(q) Stock-Based Employee Compensation

The Company has stock-based employee compensation plans, which are described more fully in Note 11. SFAS No. 123, Accounting for Stock-Based Compensation, (SFAS 123) gives companies the option
to adopt the fair value method for expense recognition of employee stock options or to continue to account for employee stock options using the intrinsic value method, as outlined under Accounting Principles Board Opinion No. 25, Accounting
for Stock Issued to Employees(APB 25). The Company has elected to continue to apply the intrinsic value method to account for employee stock options and discloses the pro-forma effect as if the fair value method had been
applied. The following table illustrates the effect on net earnings (loss) per share if the Company had applied the fair value recognition provisions of SFAS 123 to stock-based employee compensation:



|                                                                                                                                          |  |                                         |        |   |      |   |         |      |  |   |        |  
|----------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------- | ------ | - | ---- | - | ------- | ---- |  | - | ------ | -
|                                                                                                                                          |  | Year ended December 31,                 |       
|                                                                                                                                          |  | 2005                                    |        |   | 2004 |   |         | 2003 | 
|                                                                                                                                          |  | (in thousands, except per shareamounts) |       
|Net income (loss), as reported                                                                                                            |  | $                                       | 6,969  |   |      | $ | (18,211 | )    |  | $ | (9,020 | )
|Add: Deferred compensation expense reported in earnings                                                                                   |  |                                         | 815    |   |      |   | 14,296  |      |  |   | 1,631  |  
|Less: Total stock-based employee compensation expense determined under fair value method for all awards and deferred compensation
expense |  |                                         | (2,385 | ) |      |   | (15,076 | )    |  |   | (2,298 | )
|                                                                                                                                          |  |                                         |        |   |      |   |         |      |  |   |        |  
|Pro-forma net income (loss)                                                                                                               |  | $                                       | 5,399  |   |      | $ | (18,991 | )    |  | $ | (9,687 | )
|                                                                                                                                          |  |                                         |        |   |      |   |         |      |  |   |        |  
|Earnings (loss) per share:                                                                                                                |  |                                         |        |   |      |   |         |      |  |   |        |  
|Basic and diluted                                                                                                                         |  |                                         |        |   |      |   |         |      |  |   |        |  
|As reported                                                                                                                               |  | $                                       | 0.13   |   |      | $ | (0.35   | )    |  | $ | (0.17  | )
|                                                                                                                                          |  |                                         |        |   |      |   |         |      |  |   |        |  
|Pro-forma                                                                                                                                 |  | $                                       | 0.10   |   |      | $ | (0.36   | )    |  | $ | (0.19  | )
|                                                                                                                                          |  |                                         |        |   |      |   |         |      |  |   |        |  

The fair value of each option granted is estimated on the date of grant using the Black-Scholes
option pricing model. The weighted average fair values of options granted and the assumptions used are as follows:



|                                                            |  |       |         |   |     |   |         |  
|----------------------------------------------------------- |  | ----- | ------- | - | --- | - | ------- | -
|Year Ended December 31, 2005                                |  | iGATE |         |   | iGS |  
|Weighted average fair values of options granted during 2005 |  | $     | 2.76    |   |     | $ | 3.01    |  
|Risk-free interest rate                                     |  |       | 4.0     | % |     |   | 4.0     | %
|Expected dividend yield                                     |  |       | 0.0     | % |     |   | 0.0     | %
|Expected life of options                                    |  |       | 5 years |   |     |   | 4 years |  
|Expected volatility rate                                    |  |       | 85.4    | % |     |   | 63.8    | %



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



|                                                            |  |       |         |   |     |   |         |  
|----------------------------------------------------------- |  | ----- | ------- | - | --- | - | ------- | -
|Year Ended December 31, 2004                                |  | iGATE |         |   | iGS |  
|Weighted average fair values of options granted during 2004 |  | $     | 3.28    |   |     | $ | 6.40    |  
|Risk-free interest rate                                     |  |       | 3.5     | % |     |   | 3.4     | %
|Expected dividend yield                                     |  |       | 0.0     | % |     |   | 0.0     | %
|Expected life of options                                    |  |       | 5 years |   |     |   | 4 years |  
|Expected volatility rate                                    |  |       | 89.8    | % |     |   | 75.5    | %
|                                                            |  |      
|Year Ended December 31, 2003                                |  | iGATE |         |   | iGS |  
|Weighted average fair values of options granted during 2003 |  | $     | 4.00    |   |     | $ | 4.21    |  
|Risk-free interest rate                                     |  |       | 3.3     | % |     |   | 3.5     | %
|Expected dividend yield                                     |  |       | 0.0     | % |     |   | 0.0     | %
|Expected life of options                                    |  |       | 5 years |   |     |   | 4 years |  
|Expected volatility rate                                    |  |       | 66.0    | % |     |   | 73.0    | %

(r) Currency Translation Adjustment

For all significant foreign operations, the functional currency is the local currency. Assets and liabilities of these operations are translated at the
exchange rate in effect at each year-end. Statement of Operations accounts are translated at the average exchange rate prevailing during the year. Translation adjustments arising from the use of differing exchange rates from period to period are
included as a component of other comprehensive loss. Gain and losses from foreign currency transactions are included in other (expense) income, net for the periods presented.

Foreign exchange gains or losses on intercompany loans from the Company to its operating subsidiaries are recorded as a component of other income if
payment is expected in the foreseeable future based upon mutually agreed upon payment terms.

(s) Revenue Recognition

The Company recognizes revenue on time-and-materials contracts as the services are performed. Revenue is earned when the Companys consultants are
working on projects. Revenue recognition is negatively impacted by national holidays and consultant vacation and sick days. Revenues on fixed-price contracts are recognized using the proportional performance method. Performance is determined by
relating the actual cost of work performed to date to the estimated total cost for each contract and revenue is recognized based upon costs incurred by the Companys consultants during the period. If the Companys estimates indicate a loss
on a particular fixed-price contract, we record a provision for the estimated loss without regard to the stage of completion. Changes in job performance, conditions and estimated profitability may result in revisions to costs and revenues and are
recognized in the period in which the changes are identified. Contracts with deliverables or project milestones recognize revenue as the deliverables or project milestones are achieved. Contracts with deliverables or project milestones can provide
for certain penalties if the deliverables or project milestones are not met within contract timelines. Certain maintenance type contracts with no stated deliverables, with a designated workforce assigned, recognize revenues on a straight-line basis
over the life of the contract, which are typically one year in duration. Revenue on these contracts is ratable and predetermined based upon the negotiated contract.

In certain client situations, where the nature of the engagement requires it, we utilize the services of other companies in our industry. If these services are provided under an arrangement whereby we agree to retain
only a fixed portion of the amount billed to the client to cover our management and administrative costs, we classify the amount billed to the client as subcontractor revenue. These revenues, however, are recorded on a gross versus net



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



basis because we retain credit risk and are the primary obligor to our client. All revenue derived from services provided by our employees or other
independent contractors who work directly for us are recorded as direct revenue.

(t) Software Implementation Costs

The Company accounts for costs incurred for its own information systems upgrades in accordance with Statement of Position 98-1 (SOP 98-1)
Accounting for the Costs of Computer Software Developed or Obtained for Internal Use. SOP 98-1 requires that both internal and external costs incurred during the preliminary project stage should be charged to operations as
incurred. Such costs incurred during the application development stage should be capitalized; training costs incurred in this stage should, however, be expensed. Costs of upgrades and enhancements should be capitalized (but only during the
application development stage) if it is probable that the expenditures will result in added functionality for the software. During the post-implementation/operation stage, training costs (both internal and external) and maintenance costs should be
charged to operations.

(u) Gains on Issuance of Stock by Subsidiaries

At the time a subsidiary sells its stock to unrelated parties at a price in excess of its book value, the Companys investment in that
subsidiarys net assets increases. If at that time, the subsidiary is not a newly- formed, non-operating entity, nor a research and development, start-up, or development-stage company, nor is there a question as to the subsidiarys ability
to continue in existence, the Company records the increase as a gain in its Consolidated Statement of Operations.

(v) Acquisitions

The Companys acquisitions are accounted for using the purchase method. The purchase price is allocated to the assets acquired and
liabilities assumed based on their estimated fair market values. Any excess purchase price over the fair market value of the net assets acquired is recorded as goodwill. For all acquisitions, operating results are included in the Consolidated
Statement of Loss since the dates of the acquisitions. See Note 12 for additional information.

(w) Discontinued Operations

The Company adopted SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, (SFAS
144) effective January 1, 2002. This standard establishes accounting and reporting requirements for the impairment or disposal of long-lived assets. The Company applied the provisions of SFAS 144 related to the sale of its Australian
(Australia) and Direct Resources International (DRI) subsidiaries in 2004.

Managements plan to divest and
the divestures both occurred within the same period for reporting purposes. Australia and DRI were classified in the Consolidated Financial Statements as discontinued operations. The balance sheet amounts and statement results were reclassified to
discontinued operations for both the Balance Sheet and Statement of Operations presentation. The discontinued operations on the Statement of Operations were reported, net of applicable statutory taxes and net of gains on the sales of Australia and
DRI. Additionally, segment information does not include the results of businesses classified as discontinued operations. The Companys management does not expect any continuing involvement with these businesses following the sales.



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



(x) Net Income per Share

The Company calculates net income per share based on the weighted average number of common shares outstanding and restricted shares included in this
calculation are determined using the treasury stock method. Because the Company was in an income position, it did include all stock options outstanding whose exercise price were below the average market price.

(y) Recently Issued Accounting Standards

In December 2004, the Financial Accounting Standards Board (FASB) issued FASB No. 123 (R), Share-based Payment.FASB No. 123 (R) requires employers to value share-based payments using the fair value method,
eliminating the option to use the intrinsic method to value such payments. The Company will adopt the provisions of SFAS (R) prospectively beginning in the first quarter of 2006. The Company is currently evaluating the effect of the provision of
this statement on its Consolidated Financial Statements.

In March 2005, the Financial Accounting Standards Board issued FASB
Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations (FIN 47), an interpretation of SFAS 143. FIN 47 clarifies that the term conditional asset retirement obligation as used in SFAS
143 refers to a legal obligation to perform an asset retirement activity in which the timing and (or) method of settlement are conditional on a future event that may or may not be within the control of the entity. An entity is required to recognize
a liability for the fair value of a conditional asset retirement obligation if the fair value of the liability can be reasonably estimated, even if conditional on a future event. FIN 47 is effective no later than the end of fiscal years ending after
December 15, 2005. The adoption of this standard did not have a material impact on our Consolidated Financial Statements.

In May
2005, the Financial Accounting Standards Board issued FASB Statement No. 154, Accounting Changes and Error Corrections (as amended) (FASB 154). This Statement replaces APB Opinion No. 20, Accounting Changes, and
FASB Statement No. 3, Reporting Accounting Changes in Interim Financial Statements, and changes the requirements for the accounting for and reporting of a change in accounting principle. This Statement applies to all voluntary changes in
accounting principle. It also applies to changes required by an accounting pronouncement in the unusual instance that the pronouncement does not include specific transition provisions. This Statement shall be effective for accounting changes and
corrections of errors made in fiscal years beginning after December 15, 2005. This Statement does not change the transition provisions of any existing accounting pronouncements, including those that are in a transition phase as of the effective
date of this Statement.



|2. | Restricted Cash and Investments
|-- | -------------------------------

The Company has
short-term investments consisting of money market funds and corporate bonds that totaled $30.8 million and $35.9 million at December 31, 2005 and 2004, respectively. Approximately $5.8 million and $10.9 million of these funds at
December 31, 2005 and 2004 are to be used exclusively by iGS due to Indian governmental restrictions.

The Company had compensating
balances classified on the Consolidated Balance Sheet as short-term investments which consisted of money market funds that totaled $25.0 million at December 31, 2005 and 2004. The restrictions related to the Credit Facility are discussed in
Note 7. The compensating balance may be withdrawn, but the availability of short-term lines of credit is dependent upon maintenance of such compensating balances.



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



|3. | Derivative Instruments and Hedging Activities
|-- | ---------------------------------------------

Summarized below are derivatives instruments consisting of foreign exchange contracts and a principal only SWAP agreement whose carrying values are not equal to their fair value at December 31, 2005. Fair values are based on quoted
market prices at prevailing exchange rates and other available market information.

LIST OF OUTSTANDING HEDGE TRANSACTIONS ON DECEMBER
31, 2005



|                          |  |                      |  |                                 |  |                        |         |      |        |               |                                                 |   |        |  
|------------------------- |  | -------------------- |  | ------------------------------- |  | ---------------------- | ------- | ---- | ------ | ------------- | ----------------------------------------------- | - | ------ | -
|                          |  | Maturity Date Ranges |  | Strike Priceat Rupee RateRanges |  | Amount                 |         |      | Option |               | Net Unrealized Gains/(Losses) December 31, 2005 |  
|                          |  |                      |  |                                 |  | (Dollars in Thousands) |        
|FORWARD CONTRACTS         |  |                      |  |                                 |  |                        |         |      |        |               |                                                 |   |        |  
|From:                     |  | February 28, 2006    |  | 43.90                           |  |                        |         |      |        |               |                                                 |   |        |  
|To:                       |  | August 31, 2006      |  | 44.25                           |  |                        |         |      |        |               |                                                 |   |        |  
|                          |  |                      |  |                                 |  |                        |         |      |        |               |                                                 |   |        |  
|Subtotal                  |  |                      |  |                                 |  | $                      | 11,000  |      |        |               |                                                 | $ | (298   | )
|                          |  |                      |  |                                 |  |                        |         |      |        |               |                                                 |   |        |  
|CURRENCY OPTION CONTRACTS |  |                      |  |                                 |  |                        |         |      |        |               |                                                 |   |        |  
|From:                     |  | January 27, 2006     |  | 43.15                           |  | $                      | 17,500  |      |        | Buy/Sell Put  |                                                 |   |        |  
|To:                       |  | December 29, 2006    |  | 44.77                           |  | $                      | 24,500  |      |        | Buy/Sell Call |                                                 |   |        |  
|                          |  |                      |  |                                 |  |                        |         |      |        |               |                                                 |   |        |  
|Subtotal                  |  |                      |  |                                 |  | $                      | 42,000  |      |        |               |                                                 | $ | (643   | )
|                          |  |                      |  |                                 |  |                        |         |      |        |               |                                                 |   |        |  
|FAIR VALUE HEDGES         |  |                      |  |                                 |  |                        |         |      |        |               |                                                 |   |        |  
|From:                     |  | March 31, 2006       |  | 43.975                          |  |                        |         |      |        |               |                                                 |   |        |  
|To:                       |  | April 28, 2006       |  | 44.193                          |  |                        |         |      |        |               |                                                 |   |        |  
|                          |  |                      |  |                                 |  |                        |         |      |        |               |                                                 |   |        |  
|Subtotal                  |  |                      |  |                                 |  | $                      | 17,000  |      |        |               |                                                 | $ | (397   | )
|                          |  |                      |  |                                 |  |                        |         |      |        |               |                                                 |   |        |  
|PRINCIPAL SWAPS           |  |                      |  |                                 |  |                        |         |      |        |               |                                                 |   |        |  
|                          |  |                      |  |                                 | 
|                          |  | September 29, 2006   |  |                                 |  | $                      | 886     | USD  |        |               |                                                 | $ | 0      |  
|                          |  |                      |  |                                 |  |                        | 1,500   | SGD  |        |               |                                                 |   |        |  
|                          |  |                      |  |                                 | 
|                          |  | September 29, 2006   |  |                                 |  | $                      | 601     | USD  |        |               |                                                 | $ | 20     |  
|                          |  |                      |  |                                 |  |                        | 500     | EURO |        |               |                                                 |   |        |  
|                          |  |                      |  |                                 | 
|                          |  | September 28, 2006   |  |                                 |  | $                      | 1,555   | USD  |        |               |                                                 | $ | 40     |  
|                          |  |                      |  |                                 |  |                        | 175,000 | JPY  |        |               |                                                 |   |        |  
|                          |  |                      |  |                                 | 
|                          |  | September 28, 2006   |  |                                 |  | $                      | 3,104   | USD  |        |               |                                                 | $ | 41     |  
|                          |  |                      |  |                                 |  |                        | 1,750   | GBP  |        |               |                                                 |   |        |  
|                          |  |                      |  |                                 |  |                        |         |      |        |               |                                                 |   |        |  
|Subtotal                  |  |                      |  |                                 |  |                        |         |      |        |               |                                                 | $ | 101    |  
|                          |  |                      |  |                                 |  |                        |         |      |        |               |                                                 |   |        |  
|Total                     |  |                      |  |                                 |  |                        |         |      |        |               |                                                 | $ | (1,237 | )
|                          |  |                      |  |                                 |  |                        |         |      |        |               |                                                 |   |        |  

The net unrealized gains/(losses) were calculated using a Rupee Exchange rate of 45.050.

In 2005, iGS has entered into forward contracts to hedge intercompany cash flows. These contracts will mature within one year from the
Companys fiscal year-end. As each contract matures, iGS will receive Rupees at the contracted (strike price) rate while delivering the USD equivalent of Rupees at the prevailing Rupee exchange rate. Contracts that meet qualifying
criteria are accounted for as foreign currency cash flow hedges. Accordingly, the effective portion of gains and losses is deferred as a component of other comprehensive loss



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



and is recognized in earnings at the time the hedged item affects earnings. Any gains and losses due to hedge ineffectiveness or related to contracts which
do not qualify for hedge accounting are recorded in current period earnings in other income and expense. At December 31, 2005 these forward contracts did not meet qualifying criteria to receive hedge accounting and, as such, iGS appropriately
recorded the net unrealized loss of $0.3 million as Other Expense.

In 2005, iGS has entered into option contracts to hedge intercompany
cash flows. These contracts mature within one year from the Companys fiscal year-end. As each contract matures and dependent upon prevailing Rupee exchange rates, iGS will have the option to either buy USDs at each contracted put
strike price or sell USDs at each contracted call strike price. Contracts that meet qualifying criteria are accounted for as foreign currency cash flow hedges. Accordingly, the effective portion of gains and losses is deferred as a
component of other comprehensive loss and is recognized in earnings at the time the hedged item affects earnings. Any gains and losses due to hedge ineffectiveness or related to contracts which do not qualify for hedge accounting are recorded in
current period earnings in other income and expense. At December 31, 2005 these option contracts did not meet qualifying criteria to receive hedge accounting and, as such, iGS appropriately recorded the net unrealized loss of $0.6 million as
Other Expense.

In 2005 all fair value hedges were deemed to be ineffective due to the lack of an underlying asset or transaction to be
hedged. They will expire within six months. At December 31, 2005 iGS approximately recorded $0.4 million as Other Expense.

In 2005,
iGS has entered into principal swaps to hedge intercompany debt from iGS to iGATE. These contracts will mature within one year from the Companys fiscal year-end. Contracts that meet qualifying criteria are accounted for as foreign currency
cash flow hedges. Accordingly, the effective portion of gains and losses is deferred as a component of other comprehensive loss and is recognized in earnings at the time the hedged item affects earnings. Any gains and losses due to hedge
ineffectiveness or related to contracts which do not qualify for hedge accounting are recorded in current period earnings in other income and expense. At December 31, 2005, the principal swaps to hedge intercompany debt did not meet qualifying
criteria to receive hedge accounting and iGS appropriately recorded the net unrealized gain of $0.1 million as Other Income.

Substantially
all of the Companys foreign affiliates financial instruments are denominated in their respective functional currencies. Accordingly, exposure to exchange risk on foreign currency financial instruments is not material.



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



|4. | Investments in Unconsolidated Affiliates
|-- | ----------------------------------------

The
Companys investments in unconsolidated affiliates, and its percentage of ownership interests, are presented at December 31, 2005, 2004 and 2003, respectively. The investments are grouped by the applicable method of accounting. All
ownership interests set forth on the table have been calculated based on the issued and outstanding common stock of each entity, assuming the issuance of common stock on the conversion or exercise of preferred stock and convertible notes, but
excluding the effect of unexercised options and warrants.



|                                      |  |                              |   |  |      |   |  |      |  
|------------------------------------- |  | ---------------------------- | - |  | ---- | - |  | ---- | -
|                                      |  | Percentage OwnedDecember 31, |  
|                                      |  | 2005                         |   |  | 2004 |   |  | 2003 |  
|Available-for-sale equity securities: |  |                              |   |  |      |   |  |      |  
|Red Hat, Inc. (Red Hat)             |  | *                            |   |  | *    |   |  | *    |  
|                                      |  |                              |  
|Cost method of accounting:            |  |                              |   |  |      |   |  |      |  
|Air2Web, Inc. (Air2Web)**             |  | 14                           | % |  | 14   | % |  | 14   | %
|Peopleclick, Inc.***                  |  | 3                            | % |  | 3    | % |  | 3    | %
|The Concours Group****                |  | 4                            | % |  | 4    | % |  | 4    | %
|                                      |  |                              |  
|Equity method of accounting:          |  |                              |   |  |      |   |  |      |  
|CIBER India Pvt Ltd.(1)               |  | 82                           | % |  | 40   | % |  | 44   | %
|Software AG (India) Private Ltd.      |  | 40                           | % |  | 40   | % |  | 44   | %

---

|* | Denotes less than 1%.
|- | ---------------------

|** | During 2003 and 2002, the Company recorded impairment charges against its investment in Air2Web due to the Companys belief that there was an other-than-temporary decline in
the value of the security. In addition, the Companys investments in Ordercare, Inc. (Ordercare), Bluewater Information Convergence, Inc. (Bluewater), Brainbench, Inc. (Brainbench), Xpede, Inc.
(Xpede) and Escend Technologies, Inc. (Escend) have been impaired in prior periods to reflect the Companys belief that no return on capital will be realized.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|*** | On August 19, 2002, itiliti, a company that was acquired in 2001, sold its assets and liabilities to Peopleclick, Inc. (Peopleclick) for approximately 3% of
Peopleclicks outstanding common stock. The Company has a $0 basis in its itiliti shares and has continued to assign a $0 basis to its investment in itiliti. Prior to the August 2002 sale of Peopleclick, the Company owned 49% of itiliti.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|**** | During the fourth quarter of 2005, the Company recorded an impairment charge related to its investment in Coucours.
|---- | -------------------------------------------------------------------------------------------------------------------

|(1) | During the fourth quarter of 2005 iGS purchased the remaining 51% interest of CIBER, India Pvt. Ltd, (CIBER), an Indian based joint venture originally started in 2003 by
CIBER, Inc. and iGS, for a nominal amount. The acquisition was deemed to be immaterial not requiring pro-forma disclosure. Assets acquired were insignificant not requiring a purchase price allocation.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



Carrying Value and Cost Basis of Investments in Unconsolidated Affiliates

The following table summarizes the Companys investments in unconsolidated affiliates as of December 31, 2005 and 2004. Ownership interests are
classified according to applicable accounting methods.



|                                     |  |                        |       |                   |   |                |  |            |       |  |   |      
|------------------------------------ |  | ---------------------- | ----- | ----------------- | - | -------------- |  | ---------- | ----- |  | - | -----
|                                     |  | December 31, 2005      |       | December 31, 2004
|                                     |  | Carrying Value         |       | Cost Basis        |   | Carrying Value |  | Cost Basis
|                                     |  | (Dollars in thousands)
|Available-for-sale equity securities |  | $                      |      |                   | $ |               |  | $          | 464   |  | $ | 358  
|Equity method of accounting          |  |                        | 472   |                   |   | 172            |  |            | 316   |  |   | 468  
|Cost method of accounting            |  |                        | 578   |                   |   | 3,020          |  |            | 3,171 |  |   | 3,020
|                                     |  |                        |       |                   |   |                |  |            |       |  |   |      
|                                     |  | $                      | 1,050 |                   | $ | 3,192          |  | $          | 3,951 |  | $ | 3,846
|                                     |  |                        |       |                   |   |                |  |            |       |  |   |      

All equity method investments are deemed to be immaterial to the financial operations of the
Company.

Loss on Venture Investments and Affiliated Companies

In 2003, management evaluated its available-for-sale investment portfolio and determined that no other-than-temporary decline existed under guidelines
discussed in Note 1, and accordingly, no other-than-temporary losses were recorded. Management evaluated its investment in Air2Web and using guidelines previously discussed in Note 1, recorded a $0.3 million charge to reduce the carrying value in
Air2Web. In 2003, the Company sold the remaining investment it held in Red Hat, Inc., recognizing a gain of $0.3 million. No additional impairment charges against the Companys investments in unconsolidated affiliates were recorded in 2004.

In 2005, the Company sold its remaining shares of ScanSoft realizing a gain of approximately $0.3 million. The Company evaluated its
investment in Concours and based upon their evaluation recorded an impairment charge on their investment in the amount of $2.5 million. The Companys evaluation considered Concours operating results, operating cash flow as well as future
operating budgets and forecasts.

Equity in Losses of Affiliated Companies

The Company incurred equity income of $0.3 million in 2005 compared to losses of $0.3 million in 2004 related to the CIBER and Software AG joint ventures.

Gain on Sale of Stock of Subsidiaries

On November 15, 2005, the Company sold its wholly owned affiliate, iGATE Mastech Ltd. (Canada) for total net proceeds of $9.3 million. On the closing date, the Company received $8.4 million in net
cash and $0.9 million in the form of a promissory note and an escrow account that will be paid once certain conditions subsequent to closing were met. The promissory note is included in the Companys other assets section of its Consolidated
Balance Sheet. The Company recognized a gain on the sale of stock of its subsidiaries in the amount of $5.5 million. The sale of Canada was not a material disposition and did not require pro-forma disclosure.



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##### Table of Contents

iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



Components of Other Comprehensive Loss on Available for Sale Securities

The following table summarizes the Companys changes in other comprehensive loss on available for sale securities as of December 31, 2005, 2004
and 2003 (in thousands):



|                                                             |  |      |     |   |      |   |      |      |  |   |       |  
|------------------------------------------------------------ |  | ---- | --- | - | ---- | - | ---- | ---- |  | - | ----- | -
|                                                             |  | 2005 |     |   | 2004 |   |      | 2003 | 
|Gross unrealized (loss) gain                                 |  | $    |    |   |      | $ | (122 | )    |  | $ | 1,112 |  
|Reclassification adjustment for gains realized in net income |  |      | (65 | ) |      |   | (121 | )    |  |   | (760  | )
|Taxes allocated to unrealized (gain) loss                    |  |      |    |   |      |   | 49   |      |  |   | (442  | )
|                                                             |  |      |     |   |      |   |      |      |  |   |       |  
|Change in other comprehensive income                         |  | $    | (65 | ) |      | $ | (194 | )    |  | $ | (90   | )
|                                                             |  |      |     |   |      |   |      |      |  |   |       |  



|5. | Goodwill and Intangible Assets
|-- | ------------------------------

The following
tables present the reconciliation of changes in carrying value of goodwill and amortizable intangible assets for the years ended December 31, 2005 and 2004 (in thousands):



|                                    |  |                   |       |                   |                           |   |                |  |                         |       |  |   |       |  
|----------------------------------- |  | ----------------- | ----- | ----------------- | ------------------------- | - | -------------- |  | ----------------------- | ----- |  | - | ----- | -
|                                    |  | iGATESolutions    |       |                   | iGATEProfessionalServices |   | iGATECorporate |  | Consolidated            |      
|Goodwill at December 31, 2003       |  | $                 | 7,857 |                   |                           | $ | 216            |  | $                       | 551   |  | $ | 8,624 |  
|Adjustments                         |  |                   |      |                   |                           |   |               |  |                         | 22    |  |   | 22    |  
|Foreign currency translation effect |  |                   | 752   |                   |                           |   |               |  |                         |      |  |   | 752   |  
|                                    |  |                   |       |                   |                           |   |                |  |                         |       |  |   |       |  
|Goodwill at December 31, 2004       |  |                   | 8,609 |                   |                           |   | 216            |  |                         | 573   |  |   | 9,398 |  
|Foreign currency translation effect |  |                   | (547  | )                 |                           |   |               |  |                         |      |  |   | (547  | )
|                                    |  |                   |       |                   |                           |   |                |  |                         |       |  |   |       |  
|Goodwill at December 31, 2005       |  | $                 | 8,062 |                   |                           | $ | 216            |  | $                       | 573   |  | $ | 8,851 |  
|                                    |  |                   |       |                   |                           |   |                |  |                         |       |  |   |       |  
|                                    |  |                  
|                                    |  | December 31, 2005 |       | December 31, 2004 |                          
|                                    |  | GrossAmount       |       |                   | AccumulatedAmortization   |   | GrossAmount    |  | AccumulatedAmortization |      
|Amortizable intangible assets:      |  |                   |       |                   |                           |   |                |  |                         |       |  |   |       |  
|Intellectual property               |  | $                 | 570   |                   |                           | $ | 437            |  | $                       | 570   |  | $ | 245   |  
|Customer relationships              |  |                   | 6,642 |                   |                           |   | 3,882          |  |                         | 6,642 |  |   | 2,270 |  
|Employment contracts                |  |                   | 1,720 |                   |                           |   | 1,105          |  |                         | 1,720 |  |   | 661   |  
|Other costs                         |  |                   | 314   |                   |                           |   | 257            |  |                         | 314   |  |   | 152   |  
|                                    |  |                   |       |                   |                           |   |                |  |                         |       |  |   |       |  
|Total                               |  | $                 | 9,246 |                   |                           | $ | 5,681          |  | $                       | 9,246 |  | $ | 3,328 |  
|                                    |  |                   |       |                   |                           |   |                |  |                         |       |  |   |       |  

Amortization expense related to identifiable intangible assets was $2.4 million, $2.3 million and
$1.0 million for the years ended December 31, 2005, 2004 and 2003, respectively. Estimated annual amortization for the years ended December 31, 2006 through 2009 is shown below:



|     |  |   |      
|---- |  | - | -----
|2006 |  | $ | 1,619
|2007 |  | $ | 943  
|2008 |  | $ | 694  
|2009 |  | $ | 309  



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



|6. | Restructuring, Merger and Goodwill Impairment Charges
|-- | -----------------------------------------------------

In 2004, the Company restructured its Canadian and United Kingdom operations. The Company incurred $0.9 million of early exit costs associated with its Toronto, Canada office. The Company incurred approximately $4.9 million related to the
closing of its Red Brigade Ltd. office in Bracknell, UK, which was comprised of $4.6 million of early exit costs associated with the closing and $0.3 million of non cash charges related to write-offs of leasehold improvements associated with
the leased property. As part of the restructuring six employees were eliminated. These employees were executive level, administrative and back office support. In 2005, the Company sold its Canadian operation and recovered $0.5 million of costs that
were previously recorded as restructuring expenses.

In 2003, the Company recorded $0.1 million in severance related costs associated with
the offshore outsourcing of certain of its back office finance and accounting functions at iGATE Corporate. The 13 employees who were severed ranged from clerical to middle management. These costs were recognized in accordance with SFAS
No. 146.

The following paragraphs discuss the Companys restructurings of its business. All costs associated with restructurings
occurring in 2002 and 2001 were accounted for in accordance with EITF 94-3, Liability Recognition for Costs to Exit an Activity.

During the fourth quarter of 2002, the Company incurred $4.2 million of costs associated with a restructuring of certain of its business units as well as departments within the iGATE corporate structure. The restructuring was due in part to
iGSs agreed upon purchase of eJivas stock, to align the Companys business units to increase focus on global offshore delivery and to consolidate the Companys back office operations. The back office consolidation of operations
included legal, accounting, marketing and human resource departments. As part of the restructuring, the Company vacated all non-essential properties and all remaining employees were relocated to a centralized location. As part of the restructuring,
the Company eliminated 96 U.S. positions. These employees were executive level, back office support and administrative positions that were no longer being utilized. These actions were necessary due to the streamlining of the Companys back
office operations and due to redundancies of effort. Of the total costs incurred as part of the restructuring, non-cash charges totaling $0.8 million were related to write-offs of leasehold improvements on abandoned leased property. In 2003,
the Company adjusted its original estimate of restructuring reserves, recognizing additional costs of $0.5 million related to rent expense due to the Companys inability to sub-lease its excess space.

In the third quarter of 2001, the continued economic downturn caused the Company to perform an extensive review of its operations and certain overhead
costs associated with each reportable segment. In August 2001, the Company approved a restructuring plan (the plan). Based upon its revenue trends and the general economic environment, the Company decided to put a plan in place that
would serve to cut excess costs in certain of the operating segments. As part of this plan, the Company recorded severance costs in the amount of $1.0 million. The Company reduced employee headcount by 84. These employees ranged from executive level
through administrative assistants, and affected the iGATE Solutions, iGATE Professional Services and iGATE Corporate segments. The Company also recorded a $2.4 million charge for a bonus for one of its key executives. The Company also performed an
extensive fixed asset inventory in each reportable segment, in order to identify any fixed assets, such as laptops and computer equipment that were deemed to be in excess due to the headcount reduction. Based upon the fixed asset inventory, the
Company recorded write-downs of $2.1 million. These write-downs of excess equipment were recorded in the iGATE Solutions, iGATE Professional Services and iGATE Corporate segments. The Company also decided to exit its training function at the iGATE
Corporate level in favor of a more decentralized approach. Exit costs associated with the training department were $0.8 million and consisted of education-related licensing agreements entered into that would no longer be utilized. In



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##### Table of Contents

iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



the iGATE Professional Services segment, the Company recorded a charge of $1.3 million for lease costs associated with the closure of its office in San
Francisco. The Companys total charge for the plan totaled $7.6 million. These steps were necessary due to declines in demand and overall headcount.

In December 2001, the Company severed 3 employees of its wholly owned subsidiary Global Financial Services of Nevada, ranging from executive level to general and administrative support and incurred a charge of $0.2
million. In December 2001, Innovative Resource Group, Inc. (IRG), a majority-owned subsidiary of the Company, merged with and into eJiva. As part of the merger, eJiva incurred $1.4 million of merger related exit costs associated with a
leased space in Pittsburgh, PA. The merged eJiva entity relocated to IRG office space.

The components of the restructuring charges and the
restructuring accrual at December 31, 2005, 2004 and 2003 are as follows:



|                                        |  |                         |       |                   |   |       |                  |  |   |                                  |   |  |                  |      |   |                         |   |        |   |  |   |      
|--------------------------------------- |  | ----------------------- | ----- | ----------------- | - | ----- | ---------------- |  | - | -------------------------------- | - |  | ---------------- | ---- | - | ----------------------- | - | ------ | - |  | - | -----
|(in thousands)                          |  | AccruedDecember 31,2002 |       | ChargedtoExpense  |   |       | AssetWrite-downs |  |   | ForeignCurrencyTranslationEffect |   |  | CashExpenditures |      |   | AccruedDecember 31,2003
|2003 severance and related items        |  | $                       |      |                   | $ | 80    |                  |  | $ |                                 |   |  | $                |     |   |                         | $ |       |   |  | $ | 80   
|2002 severance and related items        |  |                         | 282   |                   |   |      |                  |  |   |                                 |   |  |                  |     |   |                         |   | (282   | ) |  |   |     
|2002 lease costs of office closure      |  |                         | 2,195 |                   |   | 524   |                  |  |   |                                 |   |  |                  | 3    |   |                         |   | (1,241 | ) |  |   | 1,481
|2001 severance, bonus and related items |  |                         | 2,355 |                   |   |      |                  |  |   |                                 |   |  |                  | 45   |   |                         |   | (595   | ) |  |   | 1,805
|2001 lease costs of office closure      |  |                         | 1,611 |                   |   |      |                  |  |   |                                 |   |  |                  | 98   |   |                         |   | (417   | ) |  |   | 1,292
|                                        |  |                         |       |                   |   |       |                  |  |   |                                  |   |  |                  |      |   |                         |   |        |   |  |   |      
|Total                                   |  | $                       | 6,443 |                   | $ | 604   |                  |  | $ |                                 |   |  | $                | 146  |   |                         | $ | (2,535 | ) |  | $ | 4,658
|                                        |  |                         |       |                   |   |       |                  |  |   |                                  |   |  |                  |      |   |                         |   |        |   |  |   |      
|                                        |  |                         |       |                   |   |      
|(in thousands)                          |  | AccruedDecember 31,2003 |       | ChargedtoExpense  |   |       | AssetWrite-downs |  |   | ForeignCurrencyTranslationEffect |   |  | CashExpenditures |      |   | AccruedDecember 31,2004
|2004 lease costs of office closure      |  | $                       |      |                   | $ | 5,288 |                  |  | $ |                                 |   |  | $                | 236  |   |                         | $ | (170   | ) |  | $ | 5,354
|2004 fixed assets write-downs           |  |                         |      |                   |   | 373   |                  |  |   | (373                             | ) |  |                  |     |   |                         |   |       |   |  |   |     
|2004 severance and related items        |  |                         |      |                   |   | 144   |                  |  |   |                                 |   |  |                  |     |   |                         |   | (144   | ) |  |   |     
|2003 severance and related items        |  |                         | 80    |                   |   |      |                  |  |   |                                 |   |  |                  |     |   |                         |   | (80    | ) |  |   |     
|2002 lease costs of office closure      |  |                         | 1,481 |                   |   |      |                  |  |   |                                 |   |  |                  |     |   |                         |   | (1,099 | ) |  |   | 382  
|2001 severance, bonus and related items |  |                         | 1,805 |                   |   |      |                  |  |   |                                 |   |  |                  | 14   |   |                         |   | (1,209 | ) |  |   | 610  
|2001 lease costs of office closure      |  |                         | 1,292 |                   |   |      |                  |  |   |                                 |   |  |                  | 20   |   |                         |   | (189   | ) |  |   | 1,123
|                                        |  |                         |       |                   |   |       |                  |  |   |                                  |   |  |                  |      |   |                         |   |        |   |  |   |      
|Total                                   |  | $                       | 4,658 |                   | $ | 5,805 |                  |  | $ | (373                             | ) |  | $                | 270  |   |                         | $ | (2,891 | ) |  | $ | 7,469
|                                        |  |                         |       |                   |   |       |                  |  |   |                                  |   |  |                  |      |   |                         |   |        |   |  |   |      
|                                        |  |                         |       |                   |   |      
|(in thousands)                          |  | AccruedDecember 31,2004 |       | CreditedtoExpense |   |       | AssetWrite-downs |  |   | ForeignCurrencyTranslationEffect |   |  | CashExpenditures |      |   | AccruedDecember 31,2005
|2004 Lease costs of office closure      |  | $                       | 5,354 |                   | $ | (386  | )                |  | $ |                                 |   |  | $                | (417 | ) |                         | $ | (692   | ) |  | $ | 3,859
|2002 Lease costs of office closure      |  |                         | 382   |                   |   |      |                  |  |   |                                 |   |  |                  |     |   |                         |   | (314   | ) |  |   | 68   
|2001 Severance, bonus and related items |  |                         | 610   |                   |   |      |                  |  |   |                                 |   |  |                  |     |   |                         |   | (610   | ) |  |   |     
|2001 Lease costs of office closure      |  |                         | 1,123 |                   |   | (95   | )                |  |   |                                 |   |  |                  | (2   | ) |                         |   | (176   | ) |  |   | 850  
|                                        |  |                         |       |                   |   |       |                  |  |   |                                  |   |  |                  |      |   |                         |   |        |   |  |   |      
|Total                                   |  | $                       | 7,469 |                   | $ | (481  | )                |  | $ |                                 |   |  | $                | (419 | ) |                         | $ | (1,792 | ) |  | $ | 4,777
|                                        |  |                         |       |                   |   |       |                  |  |   |                                  |   |  |                  |      |   |                         |   |        |   |  |   |      



59



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##### Table of Contents

iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



Goodwill Impairment

As discussed in Note 1 on January 1, 2002, the Company adopted SFAS 142, which requires companies to cease amortizing goodwill and certain intangible
assets with an indefinite useful life. Instead, SFAS 142 requires that goodwill and intangible assets deemed to have an indefinite useful life be reviewed for impairment upon adoption of SFAS 142 and, at a minimum, annually thereafter.

There was no goodwill impairment in 2005 and 2004.

Under SFAS 142, goodwill impairment is deemed to exist if the net book value of a reporting unit exceeds its estimated fair value. Other than the allocation of goodwill, which is discussed below, the net book value of
each of the Companys segments was generally based upon its carrying value. The Companys reporting units are generally consistent with the operating segments underlying the segments identified in Note 16. The Company performed a
transitional impairment review during the first quarter of 2002, and concluded that no impairment was necessary.

During the fourth quarter
of 2003, the Company reviewed its indefinite lived goodwill for impairment, using a discounted cash model to determine the market value of certain reporting units with assigned goodwill. Based upon the review, the Company was required to record
impairment charges of $3.9 million related to its discontinued Australian operations.



|7. | Credit Facilities
|-- | -----------------

On September 14, 2005, the
Company renewed its secured credit facility (Renewed Facility) with PNC Bank N.A. (PNC). The Renewed Facility provides a maximum loan amount of $25.0 million and is secured entirely by the Companys cash and cash
equivalents. The provisions of the Renewed Facility requires the Company to maintain unrestricted cash and cash equivalents of at least $30.0 million and maintain tangible net worth of at least $88.0 million. The Company had letters of credit
outstanding in the amount of $0.4 million and $0.3 million on the Renewed Facility as of December 31, 2005 and 2004, respectively.



|8. | Commitments
|-- | -----------

Lease Commitments

The Company rents certain office facilities and equipment under noncancelable operating leases, which provide for the following future minimum rental
payments as of December 31, 2005:



|                           |  |                        |        |                |   |             |  |   |       
|-------------------------- |  | ---------------------- | ------ | -------------- | - | ----------- |  | - | ------
|                           |  | OutsideParties         |        | RelatedParties |   | TotalAmount
|                           |  | (dollars in thousands)
|Period ending December 31, |  |                        |        |                |   |             |  |   |       
|2006                       |  | $                      | 4,853  |                | $ | 408         |  | $ | 5,261 
|2007                       |  |                        | 2,788  |                |   | 389         |  |   | 3,177 
|2008                       |  |                        | 2,201  |                |   | 275         |  |   | 2,476 
|2009                       |  |                        | 1,489  |                |   |            |  |   | 1,489 
|2010                       |  |                        | 907    |                |   |            |  |   | 907   
|Thereafter                 |  |                        | 959    |                |   |            |  |   | 959   
|                           |  |                        |        |                |   |             |  |   |       
|Total                      |  | $                      | 13,197 |                | $ | 1,072       |  | $ | 14,269
|                           |  |                        |        |                |   |             |  |   |       



60



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##### Table of Contents

iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



Rental expense was approximately $6.6 million, $6.1 million and $4.9 million for the years ended
December 31, 2005, 2004 and 2003, respectively.

Other Commitments

As discussed in Note 6, the Company negotiated a severance bonus for a key executive in connection with a restructuring plan in 2001. At December 31,
2001, the Company recorded a liability in the amount of $2.4 million, which was the present value of the future obligation under the agreement. The interest rate used to discount the liability was 5.75%. The Company paid the executive $1.3 million
and $1.0 million, in 2005 and 2004, respectively, as part of the agreement. The Company will ultimately pay the executive $4.0 million through the expiration of the agreement on October 1, 2006.

As part of the Companys acquisition of a 95% interest in DiagnoSearch, the Company may be required to fund their existing operations for an amount
up to $3.0 million, based upon mutually agreed upon operating needs. The Company funded $0.3 million, $0.5 million and $0.3 million in 2005, 2004 and 2003 respectively, and may be required to fund DiagnoSearch operations in 2006 and in subsequent
years.

The Company has committed to building Phase III of its campus located in Bangalore. Total estimated costs of the project will
approximate $7.5 million. Phase I was completed in February 2004 and Phase II was completed in December 2005. The Company has funded the project through a combination of available cash reserves and short-term investments.



|9. | Contingencies
|-- | -------------

In the ordinary course of our
business, the Company is involve in a number of lawsuits and administrative proceedings. While uncertainties are inherent in the final outcome of these matters, Company management believes, after consultation with legal counsel, that the disposition
of these proceedings should not have a material adverse effect on our financial position, results of operations or cash flows.

The Company
settled its lawsuit with Convergys Information Management Group Inc. (Convergys) and Chubb Custom Insurance Group in May 2004. Under the Settlement, the Company agreed to pay a total of $0.4 million to Convergys to settle and dismiss any
and all claims. The actual out-of pocket cost to the Company was $0.1 million as all other amounts including attorneys fees were reimbursed by our insurance carriers.

The Company is currently involved in a lawsuit in Australia with Cytel Pty. Ltd. (Cytel) regarding the adequacy of services provided by the Company to Cytel. Cytel is seeking $3.8 million in damages. The
Company considers the claim completely frivolous and merely an attempt to avoid paying the Company less than $0.1 million for services previous rendered. The Company believes that the claim is covered by its insurance policies, and out-of pocket
costs to the Company will be limited to its deductible, which is less than $0.1 million.

iGS has entered in to a service agreement with a
customer that provides the customer the option to take an equity stake in iGS for up to 5% of iGS outstanding voting shares. The customer may purchase iGS shares is solely at their discretion and must notify iGS of their intention to purchase
within thirty days of the purchase.



|10. | Employee Benefit Plan
|--- | ---------------------

The Company has an Employee
Retirement Savings Plan (the Retirement Plan) under Section 401(k) of the Internal Revenue Code that covers substantially all U.S. based salaried employees. Eligible employees may contribute up to 15% of eligible compensation,
subject to limits in the Internal Revenue Code. The Retirement Plan does not provide for any Company matching contributions.



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



|11. | Stock Based Compensation
|--- | ------------------------

Modified Quintant
Transaction Structure

On August 10, 2004, the Company modified the terms of the acquisition agreement dated as of
August 21, 2003 relating to its acquisition of Quintant Inc. (Initial Quintant Transaction Structure), and entered into a new agreement with the founders and principal shareholders of Quintant (Modified Quintant Transaction
Structure).

In conjunction with the Modified Quintant Transaction Structure, the Company was required to accelerate its recognition
of unearned compensation expense in the amount of $5.1 million, which consisted of $3.1 million related to the cancellation of 2.1 million shares of Company restricted stock and $2.0 million related to the cancellation of $0.00 exercise price
stock options. In addition, the Company recognized $0.5 million of compensation expense related to iGS shares purchased at a discount by the Quintant Co-Founders. At December 31, 2005, the Company had $1.0 million of deferred compensation to be
recognized over future periods. These costs were recorded as part of the iGATE Solutions segments.

On August 25, 2004, the Company
issued 455,924 common shares to two key employees of Quintant and cancelled 103,222 of stock options issued on August 21, 2003, at $0.00 exercise price. The closing price of the Companys Common Stock at the date of issuance was $2.92. The
Company recorded compensation expense in the amount of $1.3 million related to the issuance of shares and $0.3 million related to the canceling of stock options. These costs were recorded as part of iGATE Solutions segment.

Deferred compensation in the amount of $10.5 million was recorded in conjunction with the August 21, 2003 acquisition of Quintant, which is more
fully described in Note 12. The deferred compensation included 2.1 million shares of iGATE restricted stock, 0.6 million iGATE options granted at a $0.00 exercise price, 0.1 million iGATE options granted at a $3.78 exercise price, and
0.8 million of iGS options granted at a discount from market value to continuing Quintant employees. As noted above, portions of the deferred compensation were accelerated and recognized in 2004.

The iGATE restricted stock, which was granted to key employees of Quintant, was valued based upon the closing price of the Companys stock at
August 20, 2003, which was $4.89 per share. Deferred compensation was being recognized over a weighted average vest period of four years. Deferred compensation not including accelerated compensation expense recognized for the years ended
December 31, 2004 and 2003 was approximately $0.9 million and $0.9 million, respectively, for the restricted stock.

All options
issued at $0.00 exercise price and $3.78 exercise price were valued based upon the closing price of the Company stock at the date of grant. Deferred compensation was being recognized ratably over a four year vesting period. Deferred compensation not
including accelerated compensation expense recognized for the year ended December 31, 2004 and 2003 was approximately $0.6 million and $0.4 million, respectively, for these options.

On August 20, 2003, 0.3 million iGS options were issued at a $2.18 exercise price with a market value of $5.11 per share on the same date. On
August 22, 2003, 0.5 million iGS options were issued at $2.53 exercise price with a market value of $5.39 on the same date. Deferred compensation is being recognized ratably over a four year vesting period. Deferred compensation recognized
for the years ended December 31, 2005, 2004 and 2003, respectively, was approximately $0.7 million, $0.6 million and $0.2 million for these options.



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



Other Stock Transactions

On October 1, 2004, the Company awarded 0.1 million shares of restricted Company Common Stock to a key executive as part of his employment
agreement. These shares vest ratably over a two year period with a compensation charge equal to the fair value of the shares awarded at date of grant. Had compensation costs for these shares been determined consistent with SFAS 123, net loss and
loss per share for the year ended December 31, 2004 would have increased by approximately $0.3 million or less than $0.01 per share. Deferred compensation recognized for these shares for the year ended December 31, 2005, and 2004,
respectively was approximately $0.1 million and less than $0.1 million.

On April 1, 2001, Michael J. Zugay, Senior Vice President and
Chief Financial Officer, was awarded 0.15 million shares of restricted iGATE Common Stock as part of his employment agreement. These shares vest ratably over a three year period with a compensation charge equal to the fair value of the shares
awarded at date of grant. Had compensation costs for these shares been determined consistent with SFAS 123, net loss and diluted loss per share for the year ended December 31, 2001 would have increased by approximately $0.2 million or less than
$0.01 per share. Deferred compensation recognized for these shares for the years ended December 31, 2005, 2004 and 2003 were $0.0 million, $0.0 million and $0.1 million, respectively.

iGATE Corporation Stock Option Plans

During 2000, the Company adopted the Second Amended and Restated Stock Incentive Plan (the Plan). The Plan provides that up to 14.7 million shares of the Companys Common Stock shall be allocated for issuance to
directors, executive management and key personnel. At December 31, 2005, there were 10.2 million shares of Common Stock available for issuance under the Plan. In addition, the Companys iGS subsidiary also maintains its own stock
option plans. iGS stock option plans were approved by its Boards of Directors in 2000. The Company accounts for the Plan and its subsidiaries stock option plans under Accounting Principles Board Opinion No. 25, Accounting for
Stock Issued to Employees.



63



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



During 2005, 2004 and 2003, options covering a total of 204,500 shares, 565,000 shares and 949,792
shares, respectively, of Common Stock were granted under the Plan. Options generally expire ten years from the date of grant or earlier if an option holder ceases to be employed or associated by the Company for any reason. A summary of stock options
is presented below:



|                                         |  |            |  |                                |      
|---------------------------------------- |  | ---------- |  | ------------------------------ | -----
|                                         |  | Options    |  | Weighted AverageExercise Price
|Options outstanding at December 31, 2002 |  | 2,807,975  |  | $                              | 9.00 
|Granted                                  |  | 949,792    |  |                                | 4.00 
|Exercised                                |  | 273,422    |  |                                | 2.30 
|Lapsed and forfeited                     |  | 627,130    |  |                                | 8.81 
|                                         |  |            |  |                                |      
|Options outstanding at December 31, 2003 |  | 2,857,215  |  | $                              | 8.02 
|Granted                                  |  | 565,000    |  |                                | 3.28 
|Exercised                                |  | 178,173    |  |                                | 2.39 
|Lapsed and forfeited                     |  | 669,723    |  |                                | 10.36
|                                         |  |            |  |                                |      
|Options outstanding at December 31, 2004 |  | 2,574,319  |  | $                              | 6.75 
|Granted                                  |  | 204,500    |  |                                | 3.98 
|Exercised                                |  | 254,190    |  |                                | 3.34 
|Lapsed and forfeited                     |  | 323,422    |  |                                | 6.44 
|                                         |  |            |  |                                |      
|Options outstanding at December 31, 2005 |  | 2,201,207  |  | $                              | 6.93 
|                                         |  |            |  |                                |      
|Options exercisable at December 31, 2005 |  | 1,493,456  |  | $                              | 8.50 
|                                         |  |            |  |                                |      
|Available for future grant               |  | 10,188,337 |  |                                |      
|                                         |  |            |  |                                |      

Stock Options Outstanding at December 31, 2005:



|                       |  |                     |  |                                                  |  |                                |        |         |           |                                |   |       
|---------------------- |  | ------------------- |  | ------------------------------------------------ |  | ------------------------------ | ------ | ------- | --------- | ------------------------------ | - | ------
|Options Outstanding    |  | Options Exercisable
|Range ofExercise Price |  | Options             |  | Weighted AverageRemainingContractual Life(Years) |  | Weighted AverageExercise Price |        | Options |           | Weighted AverageExercise Price
|$  1.875$  1.875      |  | 5,000               |  | 5.24                                             |  | $                              | 1.875  |         | 5,000     |                                | $ | 1.875 
|1.930    1.930        |  | 364,919             |  | 5.75                                             |  |                                | 1.930  |         | 284,919   |                                |   | 1.930 
|2.010    2.960        |  | 312,500             |  | 8.39                                             |  |                                | 2.905  |         | 119,999   |                                |   | 2.825 
|3.500    3.700        |  | 243,500             |  | 8.61                                             |  |                                | 3.660  |         | 58,500    |                                |   | 3.693 
|3.780    4.190        |  | 298,088             |  | 7.77                                             |  |                                | 4.018  |         | 139,838   |                                |   | 3.912 
|5.250    5.680        |  | 226,749             |  | 7.78                                             |  |                                | 5.582  |         | 134,749   |                                |   | 5.570 
|5.813    5.813        |  | 2,500               |  | 4.72                                             |  |                                | 5.813  |         | 2,500     |                                |   | 5.813 
|7.500    7.500        |  | 262,805             |  | 0.96                                             |  |                                | 7.500  |         | 262,805   |                                |   | 7.500 
|9.000  15.875         |  | 280,741             |  | 3.15                                             |  |                                | 13.687 |         | 280,741   |                                |   | 13.687
|17.020  33.125        |  | 204,405             |  | 2.76                                             |  |                                | 21.808 |         | 204,405   |                                |   | 21.808
|                       |  |                     |  |                                                  |  |                                |        |         |           |                                |   |       
|$  1.875$33.125       |  | 2,201,207           |  | 5.74                                             |  | $                              | 6.933  |         | 1,493,456 |                                | $ | 8.502 
|                       |  |                     |  |                                                  |  |                                |        |         |           |                                |   |       

iGATE options outstanding and exercisable at December 31, 2004 were 2,574,319 and 1,489,357,
respectively, at prices ranging from $1.875 to $33.125 per share. iGATE options outstanding and exercisable at December 31, 2003 were 2,857,215 and 1,730,226, respectively, at prices ranging from $1.875 to $33.125 per share.



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



iGS Stock Option Plans

The Companys majority-owned subsidiary, iGS maintains two (2) employee stock option plans herein referred to as Plan 1 and
Plan 2. The Plans are administered by a committee appointed by the Board of Directors of iGS. Plan 1 provides for the issuance of a maximum of 3,000,000 shares of iGS common stock and Plan 2 provides for the issuance of a maximum of
4,500,000 shares of iGS common stock. Options are granted at the prevailing market values for each of the Plans.

A summary of the Plans
are provided below:

iGS Option Plan 1:



|                                         |  |           |  |                                     |     
|---------------------------------------- |  | --------- |  | ----------------------------------- | ----
|                                         |  | Options   |  | Weighted AverageExercise Price(USD)
|Options outstanding at December 31, 2002 |  | 988,261   |  | $                                   | 2.96
|Granted                                  |  | 2,250,961 |  |                                     | 2.54
|Exercised                                |  | 60,179    |  |                                     | 2.46
|Lapsed and forfeited                     |  | 483,727   |  |                                     | 2.43
|                                         |  |           |  |                                     |     
|Options outstanding at December 31, 2003 |  | 2,695,316 |  | $                                   | 2.77
|Granted                                  |  |          |  |                                     |    
|Exercised                                |  | 275,717   |  |                                     | 2.59
|Lapsed and forfeited                     |  | 582,976   |  |                                     | 2.97
|                                         |  |           |  |                                     |     
|Options outstanding at December 31, 2004 |  | 1,836,623 |  | $                                   | 2.68
|Granted                                  |  | 112,750   |  |                                     | 5.21
|Exercised                                |  | 137,495   |  |                                     | 2.45
|Lapsed and forfeited                     |  | 319,244   |  |                                     | 4.97
|                                         |  |           |  |                                     |     
|Options outstanding at December 31, 2005 |  | 1,492,634 |  | $                                   | 3.11
|                                         |  |           |  |                                     |     
|Options exercisable at December 31, 2005 |  | 903,412   |  | $                                   | 2.92
|                                         |  |           |  |                                     |     
|Available for future grant               |  | 870,301   |  |                                     |     
|                                         |  |           |  |                                     |     

STOCK OPTIONS OUTSTANDING AT DECEMBER 31, 2005PLAN 1:



|                       |  |                     |  |                                                  |  |                                |      |         |         |                                |   |     
|---------------------- |  | ------------------- |  | ------------------------------------------------ |  | ------------------------------ | ---- | ------- | ------- | ------------------------------ | - | ----
|Options Outstanding    |  | Options Exercisable
|Range ofExercise Price |  | Options             |  | Weighted AverageRemainingContractual Life(Years) |  | Weighted AverageExercise Price |      | Options |         | Weighted AverageExercise Price
|$2.27$2.27            |  | 566,991             |  | 7.38                                             |  | $                              | 2.27 |         | 413,627 |                                | $ | 2.27
|$2.29$4.54            |  | 689,146             |  | 7.53                                             |  |                                | 3.03 |         | 409,051 |                                |   | 3.09
|$4.56$6.80            |  | 236,497             |  | 8.42                                             |  |                                | 5.28 |         | 80,734  |                                |   | 5.34
|                       |  |                     |  |                                                  |  |                                |      |         |         |                                |   |     
|                       |  | 1,492,634           |  | 7.61                                             |  | $                              | 3.11 |         | 903,412 |                                | $ | 2.92
|                       |  |                     |  |                                                  |  |                                |      |         |         |                                |   |     



65



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##### Table of Contents

iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



iGS Option Plan 2:



|                                         |  |           |  |                                     |     
|---------------------------------------- |  | --------- |  | ----------------------------------- | ----
|                                         |  | Options   |  | Weighted AverageExercise Price(USD)
|Options outstanding at December 31, 2002 |  | 0         |  | $                                   |    
|Granted                                  |  | 1,078,586 |  |                                     | 5.59
|Exercised                                |  |          |  |                                     |    
|Lapsed and forfeited                     |  |          |  |                                     |    
|                                         |  |           |  |                                     |     
|Options outstanding at December 31, 2003 |  | 1,078,586 |  | $                                   | 5.59
|Granted                                  |  | 1,447,550 |  |                                     | 5.47
|Exercised                                |  |          |  |                                     |    
|Lapsed and forfeited                     |  | 533,801   |  |                                     | 5.57
|                                         |  |           |  |                                     |     
|Options outstanding at December 31, 2004 |  | 1,992,335 |  | $                                   | 5.60
|Granted                                  |  | 1,705,150 |  |                                     | 3.93
|Exercised                                |  | 5,153     |  |                                     | 4.87
|Lapsed and forfeited                     |  | 730,098   |  |                                     | 5.34
|                                         |  |           |  |                                     |     
|Options outstanding at December 31, 2005 |  | 2,962,234 |  | $                                   | 4.86
|                                         |  |           |  |                                     |     
|Options exercisable at December 31, 2005 |  | 666,752   |  | $                                   | 5.84
|                                         |  |           |  |                                     |     
|Available for future grant               |  | 1,532,613 |  |                                     |     
|                                         |  |           |  |                                     |     

STOCK OPTIONS OUTSTANDING AT DECEMBER 31, 2005PLAN 2:



|                       |  |                     |  |                                                  |  |                                |      |         |         |                                |   |     
|---------------------- |  | ------------------- |  | ------------------------------------------------ |  | ------------------------------ | ---- | ------- | ------- | ------------------------------ | - | ----
|Options Outstanding    |  | Options Exercisable
|Range ofExercise Price |  | Options             |  | Weighted AverageRemainingContractual Life(Years) |  | Weighted AverageExercise Price |      | Options |         | Weighted AverageExercise Price
|$2.27$2.27            |  | 632,900             |  | 9.42                                             |  | $                              | 2.27 |         |        |                                | $ |    
|$4.56$6.80            |  | 2,105,834           |  | 8.71                                             |  | $                              | 5.38 |         | 555,480 |                                | $ | 5.55
|$6.81$9.07            |  | 223,500             |  | 8.04                                             |  | $                              | 7.01 |         | 111,272 |                                | $ | 7.33
|                       |  |                     |  |                                                  |  |                                |      |         |         |                                |   |     
|                       |  | 2,962,234           |  | 8.81                                             |  | $                              | 4.86 |         | 666,752 |                                | $ | 5.84
|                       |  |                     |  |                                                  |  |                                |      |         |         |                                |   |     



|12. | Acquisitions
|--- | ------------

The following paragraphs describe
each of the acquisitions made by the Company during 2005, 2004 and 2003. Descriptions regarding each acquisition will vary dependent upon the complexity of the transaction and materiality and are presented in chronological order. Unless otherwise
noted, pro-forma disclosure regarding these purchases have not been provided because they are not material to the operations of the Company.

The Company has calculated each purchase price allocation in accordance with Statement of Financial Accounting Standards No. 141, Business Combinations. All purchase price allocations have been finalized at December 31,
2005. All amortizable intangible assets acquired consist of intellectual property, beneficial employment contracts and customer relationships. Please refer to Note 5 for information pertaining to amortization expense.



66



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



During the fourth quarter of 2005, iGS purchased the remaining 51% interest of CIBER, India Pvt.
Ltd., (CIBER), an India-based joint venture orginally started in 2003 by Ciber, Inc. and iGS, for a nominal amount. The acquisition was deemed to be immaterial not requiring pro-forma disclosure. Assets acquired were insignificant not
requiring a purchase price allocation.

In the fourth quarter of 2004, the Company acquired the remaining 10% of ICRI it did not own from
the University of Pittsburgh Cancer Institute Cancer Services (UPCI). Pursuant to the transaction, ICRI transferred certain clinical research related study agreements to UPCI for the remaining 10% ownership, whose value was immaterial.

On August 10, 2004, the Company modified the terms of the acquisition agreement dated as of August 21, 2003 relating to its
acquisition of Quintant Inc. (Initial Quintant Transaction Structure), and entered into a new agreement with the founders and principal shareholders of Quintant (Modified Quintant Transaction Structure). The principal reasons
that the Quintant acquisition structure was modified were (a) to have the Quintant co-founders more closely aligned to the stock value of iGS, rather than the Companys common stock, and (b) to simplify the ownership structure of
Quintant whereby Quintant will be owned 100% by iGS, rather than the original ownership structure where Quintant was jointly owned by iGS and iGATE.

Under the terms of the Modified Quintant Transaction Structure, the Company was required to accelerate compensation expense, which is more fully discussed in Note 11, and to pay the Quintant Co-Founders an additional
$3.9 million in cash consisting of $3.2 million paid to Quintants Indian Co-Founder and $0.7 million paid in aggregate to the four Quintant Co-Founders. The costs associated with the Modified Quintant Transaction Structure did not affect the
Companys original purchase price allocation, which is discussed below.

All costs incurred as part of the Modified Quintant
Transaction Structure were recorded as compensation expense in the period incurred and are included in the Companys Consolidated Statements of Income as part of iGATE Solutions segment.

In July 2004, iGS acquired the remaining 8% it did not own in Saint Life Pharmaceutical Research Laboratories Private Limited (Saint Life)
for approximately $0.2 million.

On June 1, 2004, the Companys majority-owned subsidiary Symphoni Interactive LLC was sold to
iGS for proceeds of $0.5 million.

In May 2004, the Company sold the assets of its majority-owned subsidiary Red Brigade UK Ltd. to iGS for
proceeds of $0.3 million.

In May 2004, iGS acquired an additional 5% of stock ownership in The Concours Group (Concours) for
approximately $1.25 million, increasing its ownership to approximately 6%.

In February 2004, iGS acquired 92% of Saint Life for
approximately $0.5 million. iGS acquired Saint Life primarily for the land that it owns that is adjacent to the iGS Whitefield Campus in Bangalore, India.

On October 20, 2003, iGS acquired the assets of IdeaSpace Solutions Ltd. (IdeaSpace) through its wholly owned subsidiary IT&T Technologies Services, Ltd. for approximately $1.5 million. IdeaSpace
specializes in bank technology and operations. The purchase price allocation resulted in non-deductible goodwill of $0.3 million, which was assigned to the iGATE Solutions segment, and $1.1 million of intangible assets with a weighted average useful
life of 2.4 years. The acquisition was effective December 10, 2003.



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##### Table of Contents

iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



In September 2003, iGATE Inc. acquired a 95% interest in DiagnoSearch for $1.5 million. DiagnoSearch
is an India based clinical research company. The purchase price allocation resulted in non-deductible goodwill of $0.5 million, which was assigned to the iGATE Corporate segment, and $0.9 million of intangible assets with a weighted average useful
life of 1.2 years.

On August 21, 2003, the Company acquired Quintant, Inc. (Quintant), a BPO company located in India, in
exchange for iGATE restricted stock and cash. The Initial Quintant Transaction Structure was modified in 2004, as discussed above and in Note 11. The following table summarizes the original purchase price of Quintant (in thousands):



|                                                                                                                                                                                                            |  |   |       
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | - | ------
|Cash                                                                                                                                                                                                        |  | $ | 20,544
|Restricted shares of iGATE common stock (2.1 million shares to be issued; 1.1 million shares allocated to purchase price consideration,
1.0 million shares allocated to deferred compensation, see Note 11) |  |   | 15,569
|Legal and accounting fees incurred related to purchase                                                                                                                                                      |  |   | 254   
|                                                                                                                                                                                                            |  |   |       
|Total purchase price                                                                                                                                                                                        |  | $ | 36,367
|                                                                                                                                                                                                            |  |   |       

The allocation of the purchase price resulted in non-deductible goodwill of $6.0 million, which
was assigned to the iGATE Solutions reportable segment. In addition, $4.9 million was allocated to intangible assets, which are subject to amortization, and have a weighted average useful life of five years. The fair value of assets acquired
including goodwill and intangible assets, liabilities and deferred compensation (See Note 11) was $25.5 million, $0.8 million and $10.3 million, respectively. Due to certain provisions within the acquisition agreement, the Company accounted for the
acquisition as a majority-owned subsidiary and recognized approximately 94% of Quintants losses from August 21, 2003.

On
May 20, 2003, iGS acquired the contact center and facility management businesses of IT&T Technology Services Ltd. (ITT). ITTs businesses are headquartered in Noida, India. The purchase price for these businesses totaled
$4.5 million in cash and included customer contracts, working capital and fixed assets. The allocation of the purchase price resulted in non-deductible goodwill of $0.2 million and intangible assets of $2.3 million with a weighted average life
of 1.7 years.

On April 1, 2003, iGS acquired the stock of Aqua Regia, Ltd. for $0.5 million in cash. Aqua Regia is headquartered in
Hyderabad, India and provides IT consulting services. The allocation of the purchase price resulted in non-deductible goodwill of $0.2 million.

On February 26, 2003, the Company, through a newly formed subsidiary of iGATE Clinical Research International, formerly known as iGATE Clinical Management, Inc. (ICRI), purchased the assets of Pittsburgh Clinical Research
Network (PCRN), for $0.4 million. The Company retained a 90% ownership in ICRI, with one shareholder owning a 10% minority interest in the entity. There were no intangibles recorded as a result of the acquisition.

On January 1, 2003, iGS agreed to purchase its sister company, eJiva, for $9.5 million.

Operating results of the business acquired have been included in the Consolidated Statements of Operations from the respective acquisition date forward.



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



The following table presents unaudited pro-forma information as if the 2003 acquisitions referred to
above had been completed at the beginning of each respective year (dollars in thousands, except for share amounts):



|                                                             |  |             |  |                            |         |  
|------------------------------------------------------------ |  | ----------- |  | -------------------------- | ------- | -
|                                                             |  |             |  | Year endedDecember 31,2003 |        
|Revenues                                                     |  | As reported |  | $                          | 240,634 |  
|                                                             |  | Pro-forma   |  |                            | 245,120 |  
|                                                             |  |            
|Loss from continuing operations                              |  | As reported |  | $                          | (5,618  | )
|                                                             |  | Pro-forma   |  |                            | (12,300 | )
|                                                             |  |            
|Loss per share from continuing operations, basic and diluted |  | As reported |  | $                          | (0.11   | )
|                                                             |  | Pro-forma   |  |                            | (0.24   | )

The year ended December 31, 2003 reported results above include net revenue from acquisitions
of approximately $3.6 million. The combined net loss for these entities was approximately $6.3 million. Therefore, the results of these entities increased basic and diluted loss per share by $0.12 for the year ended December 31, 2003. There
were no such acquisitions requiring pro-forma disclosure in 2004.



|13. | Discontinued Operations
|--- | -----------------------

In 2004, the Company sold
two international staffing company subsidiaries, iGATE Australia Pty Ltd. (iGATE Australia), headquartered in Sydney, Australia, and Direct Resources Scotland Ltd., (DRI) located in Edinburgh, Scotland (the
Dispositions). In accordance with SFAS 144, these businesses are classified as discontinued operations.

The sale of iGATE
Australia was a stock for cash transaction and was completed on June 2, 2004. The Company sold DRI customer and contractor agreements for cash on April 1, 2004. For the year ended December 31, 2003, both operations combined had
approximately $47.0 million in revenues with operating losses of approximately $3.8 million. The purchase price received in cash for both transactions was approximately $9.8 million.

The following table details selected financial information for the businesses included within discontinued operations (dollars in thousands).



|                                           |  |      |   |      |   |        |  |   |        |  
|------------------------------------------ |  | ---- | - | ---- | - | ------ |  | - | ------ | -
|                                           |  | 2005 |   | 2004 |   | 2003   | 
|Revenues                                   |  | $    |  |      | $ | 20,540 |  | $ | 47,167 |  
|                                           |  |      |   |      |   |        |  |   |        |  
|Goodwill impairment                        |  | $    |  |      | $ |       |  | $ | 3,933  |  
|                                           |  |      |   |      |   |        |  |   |        |  
|Income (loss) from operations              |  | $    |  |      | $ | 115    |  | $ | (3,037 | )
|Gain on sale of operations                 |  |      |  |      |   | 3,749  |  |   |       |  
|                                           |  |      |   |      |   |        |  |   |        |  
|Income (loss) before income taxes          |  |      |  |      |   | 3,864  |  |   | (3,037 | )
|Income tax expense                         |  |      |  |      |   | 46     |  |   | 365    |  
|                                           |  |      |   |      |   |        |  |   |        |  
|Income (loss) from discontinued operations |  | $    |  |      | $ | 3,818  |  | $ | (3,402 | )
|                                           |  |      |   |      |   |        |  |   |        |  



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



|14. | Income Taxes
|--- | ------------

The components of income (loss) from
continuing operations before income taxes, as shown in the accompanying Consolidated Statement of Operations, consisted of the following for the years ended December 31, 2005, 2004 and 2003:



|                                                              |  |                        |       |      |   |         |      |  |   |        |  
|------------------------------------------------------------- |  | ---------------------- | ----- | ---- | - | ------- | ---- |  | - | ------ | -
|                                                              |  | December 31,           |      
|                                                              |  | 2005                   |       | 2004 |   |         | 2003 | 
|                                                              |  | (Dollars in Thousands) |      
|Income (loss) from continuing operations before income taxes: |  |                        |       |      |   |         |      |  |   |        |  
|Domestic                                                      |  | $                      | 4,460 |      | $ | (16,135 | )    |  | $ | (8,484 | )
|Foreign                                                       |  |                        | 2,622 |      |   | (764    | )    |  |   | 5,045  |  
|                                                              |  |                        |       |      |   |         |      |  |   |        |  
|Income (loss) before income taxes                             |  | $                      | 7,082 |      | $ | (16,899 | )    |  | $ | (3,439 | )
|                                                              |  |                        |       |      |   |         |      |  |   |        |  

The provision (benefit) for income taxes from continuing operations, as shown in the accompanying
Consolidated Financial Statements, consisted of the following for the years ended December 31, 2005, 2004 and 2003:



|                                           |  |                        |        |   |      |   |        |      |  |   |       |  
|------------------------------------------ |  | ---------------------- | ------ | - | ---- | - | ------ | ---- |  | - | ----- | -
|                                           |  | December 31,           |       
|                                           |  | 2005                   |        |   | 2004 |   |        | 2003 | 
|                                           |  | (Dollars in Thousands) |       
|Current (benefit) provision:               |  |                        |        |   |      |   |        |      |  |   |       |  
|Federal                                    |  | $                      | (2,239 | ) |      | $ | (1,344 | )    |  | $ | 20    |  
|State                                      |  |                        | 300    |   |      |   | 15     |      |  |   | 378   |  
|Foreign                                    |  |                        | 1,123  |   |      |   | 3,352  |      |  |   | 1,433 |  
|                                           |  |                        |        |   |      |   |        |      |  |   |       |  
|Total current provision (benefit)          |  |                        | (816   | ) |      |   | 2,023  |      |  |   | 1,831 |  
|                                           |  |                        |        |   |      |   |        |      |  |   |       |  
|Deferred (benefit) provision:              |  |                        |        |   |      |   |        |      |  |   |       |  
|Federal                                    |  |                        | (3,791 | ) |      |   | (5,364 | )    |  |   | 1,725 |  
|State                                      |  |                        | (533   | ) |      |   | (867   | )    |  |   | 246   |  
|Foreign                                    |  |                        | 463    |   |      |   | 790    |      |  |   | (780  | )
|Valuation allowance                        |  |                        | 4,790  |   |      |   | 8,548  |      |  |   | (843  | )
|                                           |  |                        |        |   |      |   |        |      |  |   |       |  
|Total deferred provision (benefit)         |  |                        | 929    |   |      |   | 3,107  |      |  |   | 348   |  
|                                           |  |                        |        |   |      |   |        |      |  |   |       |  
|Total provision (benefit) for income taxes |  | $                      | 113    |   |      | $ | 5,130  |      |  | $ | 2,179 |  
|                                           |  |                        |        |   |      |   |        |      |  |   |       |  

The reconciliation of income taxes computed using the statutory U.S. income tax rate and the
provision (benefit) for income taxes from continuing operations for the years ended December 31, 2005, 2004 and 2003 were as follows:



|                                                    |  |                  |        |   |                  |       |   |                  |   |        |   |  |       |    |  |   |        |   |  |       |   
|--------------------------------------------------- |  | ---------------- | ------ | - | ---------------- | ----- | - | ---------------- | - | ------ | - |  | ----- | -- |  | - | ------ | - |  | ----- | --
|                                                    |  | December 31,2005 |        |   | December 31,2004 |       |   | December 31,2003 |  
|Income taxes computed at the federal statutory rate |  | $                | 2,479  |   |                  | 35.0  | % |                  | $ | (5,914 | ) |  | 35.0  | %  |  | $ | (1,204 | ) |  | 35.0  | % 
|State income taxes, net of federal tax benefit      |  |                  | 238    |   |                  | 3.4   |   |                  |   | 1,132  |   |  | (6.7  | )  |  |   | 1,048  |   |  | (30.5 | ) 
|Foreign taxes at other than U.S. Statutory rate     |  |                  | 668    |   |                  | 9.4   |   |                  |   | 4,408  |   |  | (26.1 | )  |  |   | (1,113 | ) |  | 32.4  |   
|Reversal of prior year accrued taxes                |  |                  | (2,200 | ) |                  | (31.1 | ) |                  |   |       |   |  |      |    |  |   |       |   |  |      |   
|Amortization of acquired intangibles                |  |                  | 145    |   |                  | 2.0   |   |                  |   | 466    |   |  | (2.8  | )  |  |   | 1,721  |   |  | (50.0 | ) 
|Capital losses in investments                       |  |                  | (6,891 | ) |                  | (97.3 | ) |                  |   | (2,524 | ) |  | 14.9  |    |  |   | 843    |   |  | (24.5 | ) 
|Dividends from controlled foreign corporation       |  |                  |       |   |                  |      |   |                  |   |       |   |  |      |    |  |   | 2,166  |   |  | (63.0 | ) 
|Othernet                                           |  |                  | 884    |   |                  | 12.5  |   |                  |   | (986   | ) |  | 5.8   |    |  |   | (439   | ) |  | 12.8  |   
|Valuation allowance                                 |  |                  | 4,790  |   |                  | 67.6  |   |                  |   | 8,548  |   |  | (50.6 | )  |  |   | (843   | ) |  | 24.5  |   
|                                                    |  |                  |        |   |                  |       |   |                  |   |        |   |  |       |    |  |   |        |   |  |       |   
|                                                    |  | $                | 113    |   |                  | 1.6   | % |                  | $ | 5,130  |   |  | (30.4 | )% |  | $ | 2,179  |   |  | (63.3 | )%
|                                                    |  |                  |        |   |                  |       |   |                  |   |        |   |  |       |    |  |   |        |   |  |       |   



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



Under the Indian Income Tax Act, 1961, the Companys Indian subsidiary is eligible to claim a
tax holiday for 10 consecutive assessment years on profits derived from the export of software services from divisions registered under the Software Technology Parks at Bangalore, Chennai and Pune. For the years ended December 31, 2005, 2004
and 2003, the tax holiday resulted in benefits of $(0.7) million, $0.3 million and $1.3 million, respectively, when calculated at the statutory U.S. rate. The benefits of the holiday began to expire for certain of the units in 2005.

The components of the deferred tax assets and liabilities were as follows:



|                                                      |  |                        |         |   |      |   |         |  
|----------------------------------------------------- |  | ---------------------- | ------- | - | ---- | - | ------- | -
|                                                      |  | December 31,           |        
|                                                      |  | 2005                   |         |   | 2004 |  
|                                                      |  | (Dollars in Thousands) |        
|Deferred tax assets:                                  |  |                        |         |   |      |   |         |  
|Allowance for doubtful accounts and employee advances |  | $                      | 619     |   |      | $ | 1,332   |  
|Accrued health benefits                               |  |                        | 29      |   |      |   | 246     |  
|Accrued vacation and bonuses                          |  |                        | 1,166   |   |      |   | 1,396   |  
|Depreciation                                          |  |                        | 189     |   |      |   | 315     |  
|Reserve for Canadian employment taxes                 |  |                        |        |   |      |   | 243     |  
|Foreign currency translation adjustments              |  |                        | 793     |   |      |   | 934     |  
|Capital losses in investments                         |  |                        | 14,982  |   |      |   | 10,006  |  
|Deferred compensation                                 |  |                        | 5,749   |   |      |   | 5,624   |  
|Foreign tax credit carryover                          |  |                        |        |   |      |   |        |  
|Accrued restructuring charges                         |  |                        | 367     |   |      |   | 386     |  
|Other                                                 |  |                        | 32      |   |      |   | 605     |  
|Valuation allowance                                   |  |                        | (21,534 | ) |      |   | (16,744 | )
|                                                      |  |                        |         |   |      |   |         |  
|Total deferred tax assets                             |  |                        | 2,392   |   |      |   | 4,343   |  
|                                                      |  |                        |         |   |      |   |         |  
|Deferred tax liabilities                              |  |                        |         |   |      |   |         |  
|Amortization of acquired intangibles                  |  |                        | 990     |   |      |   | 1,396   |  
|Prepaid expenses                                      |  |                        | 361     |   |      |   | 380     |  
|Section 481(a) adjustments                            |  |                        | 39      |   |      |   | 77      |  
|Unrecognized gain on Mascot IPO                       |  |                        | 9,662   |   |      |   | 9,664   |  
|Unrecognized gain on investments                      |  |                        |        |   |      |   | 42      |  
|                                                      |  |                        |         |   |      |   |         |  
|Total deferred tax liabilities                        |  |                        | 11,052  |   |      |   | 11,559  |  
|                                                      |  |                        |         |   |      |   |         |  
|Net deferred tax liability                            |  | $                      | 8,660   |   |      | $ | 7,216   |  
|                                                      |  |                        |         |   |      |   |         |  
|Net deferred tax liability                            |  | $                      | 8,660   |   |      | $ | 7,216   |  
|Plus: net current deferred tax asset                  |  |                        | 1,058   |   |      |   | 2,304   |  
|                                                      |  |                        |         |   |      |   |         |  
|Net long-term deferred tax liability                  |  | $                      | 9,718   |   |      | $ | 9,520   |  
|                                                      |  |                        |         |   |      |   |         |  

During 2005 and 2004, the Company reduced certain deferred tax assets generated from capital loss
transactions through valuation allowances. The Company believes that sufficient future capital gains will not be generated so as to permit the reversal of the deductible temporary differences.



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



|15. | Earnings per Share
|--- | ------------------

The reconciliation between
basic and diluted earnings per common share from continuing operations is as follows:



|                                                             |  |                                       |        |      |   |         |      |  |   |        |  
|------------------------------------------------------------ |  | ------------------------------------- | ------ | ---- | - | ------- | ---- |  | - | ------ | -
|                                                             |  | Year Ended December 31,               |       
|                                                             |  | 2005                                  |        | 2004 |   |         | 2003 | 
|                                                             |  | (in thousands, except per share data) |       
|Basic earnings (loss) per share:                             |  |                                       |        |      |   |         |      |  |   |        |  
|Net income (loss) from continuing operations                 |  | $                                     | 6,969  |      | $ | (22,029 | )    |  | $ | (5,618 | )
|                                                             |  |                                       |        |      |   |         |      |  |   |        |  
|Divided by:                                                  |  |                                       |        |      |   |         |      |  |   |        |  
|Weighted average common shares                               |  |                                       | 52,530 |      |   | 52,721  |      |  |   | 51,697 |  
|                                                             |  |                                       |        |      |   |         |      |  |   |        |  
|Basic earnings (loss) per share from continuing operations   |  | $                                     | 0.13   |      | $ | (0.42   | )    |  | $ | (0.11  | )
|                                                             |  |                                       |        |      |   |         |      |  |   |        |  
|Diluted earnings (loss) per share:                           |  |                                       |        |      |   |         |      |  |   |        |  
|Net income (loss) from continuing operations                 |  | $                                     | 6,969  |      | $ | (22,029 | )    |  | $ | (5,618 | )
|                                                             |  |                                       |        |      |   |         |      |  |   |        |  
|Divided by:                                                  |  |                                       |        |      |   |         |      |  |   |        |  
|Weighted average common shares                               |  |                                       | 52,734 |      |   | 52,721  |      |  |   | 51,697 |  
|                                                             |  |                                       |        |      |   |         |      |  |   |        |  
|Diluted earnings (loss) per share from continuing operations |  | $                                     | 0.13   |      | $ | (0.42   | )    |  | $ | (0.11  | )
|                                                             |  |                                       |        |      |   |         |      |  |   |        |  

The number of outstanding options to purchase common shares for which the option exercise prices
exceeded the average market price of the common shares aggregated 1.1 million, 1.3 million and 1.5 million shares for the years ended December 31, 2005, 2004 and 2003, respectively. These options were excluded from the
computation of diluted earnings per share under the treasury stock method.

In addition, the calculation of diluted earnings per share for
2004 and 2003, respectively, would have included 0.4 million and 0.4 million shares for assumed exercise of options under the Companys share incentive plans. However, because the Company was in a net loss position inclusion of such
shares would have been anti-dilutive.



|16. | Segment Reporting
|--- | -----------------

The Companys reportable
segments are iGATE Solutions, iGATE Professional Services and iGATE Corporate. Effective April 1, 2004, we recast our segments to include the operations of Global Financial Services (GFS) as part of the iGATE Professional Services
(iPS ) segment. Previously, GFS was included in the iGATE Solutions segment. All prior periods have been reclassified to reflect the change to our segment reporting. The following discussion also compares our operating segments without
the operations of iGATE Australia Pty Ltd. and Direct Resources Ltd., which are being treated as discontinued operations. Prior to their sale in 2004 both entities were part of our iPS operating segment.

iGATE Solutions

The iGATE Solutions
segments services offerings include offshore outsourcing of IT services and IT systems maintenance. Other offerings include enterprise applications implementation and related custom development of applications such as Oracle, SAP and
PeopleSoft. The Segment also offers application maintenance outsourcing, business intelligence services and data management and application re-engineering through its offshore development centers (ODCs).



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



iGATE Solutions has ODCs located in Bangalore, Hyderabad, Chennai, Delhi, and Pune, India and Wuxi,
China. iGS has global development centers (GDCs) located in Canada and the U.S. The centers can deliver both near shore and offshore services, dependent upon customer location and expectations. iGATE Solutions operates in India, Canada,
the U.S., Europe, Singapore, Malaysia, Japan, China and Australia.

iGATE Professional Services (iPS)

The iPS segments service offerings include a variety of client-managed and supervised IT staffing service offerings which include enterprise
resource package implementation and integration, application support services and client directed software design and customization. The iPS segment also offers training as a service to its customers.

The iPS segment services North America.

iGATE Corporate

In 2005, 2004 and 2003, iGATE Corporate includes the operations of jobcurry Systems Private Ltd., ICRI
acquired on February 26, 2003, DiagnoSearch acquired October 28, 2003 and corporate and other unallocated costs.

The accounting
policies of the segments are the same as those described in the summary of significant accounting policies in Note 1. We evaluate segment performance based upon profit or loss from operations. We do not allocate income taxes, other income or expense
and non-recurring charges to segments. In addition, we account for inter-segment sales and transfers at current market prices. All inter-segment sales have been eliminated in consolidation, which are not material.

The following tables present selected financial information for the Companys reporting segments, as reclassified for discontinued operations, for
the years ended December 31, 2005, 2004 and 2003:



|                                                          |  |                              |         |                           |   |         |                   |  |   |         |   |  |   |         |  
|--------------------------------------------------------- |  | ---------------------------- | ------- | ------------------------- | - | ------- | ----------------- |  | - | ------- | - |  | - | ------- | -
|                                                          |  | Year Ended December 31, 2005 |        
|                                                          |  | iGATESolutions               |         | iGATEProfessionalServices |   |         | iGATECorporate(1) |  |   | Total   |  
|                                                          |  | (Dollars in thousands)       |        
|External revenues                                         |  | $                            | 138,032 |                           | $ | 135,424 |                   |  | $ | 2,536   |   |  | $ | 275,992 |  
|Cost of revenues                                          |  |                              | 97,108  |                           |   | 106,635 |                   |  |   | 1,367   |   |  |   | 205,110 |  
|                                                          |  |                              |         |                           |   |         |                   |  |   |         |   |  |   |         |  
|Gross margin                                              |  |                              | 40,924  |                           |   | 28,789  |                   |  |   | 1,169   |   |  |   | 70,882  |  
|Selling, general and administrative                       |  |                              | 38,948  |                           |   | 16,443  |                   |  |   | 12,092  |   |  |   | 67,483  |  
|Restructuring recovery                                    |  |                              |        |                           |   | (481    | )                 |  |   |        |   |  |   | (481    | )
|                                                          |  |                              |         |                           |   |         |                   |  |   |         |   |  |   |         |  
|Income (loss) from operations                             |  | $                            | 1,976   |                           | $ | 12,827  |                   |  | $ | (10,923 | ) |  | $ | 3,880   |  
|                                                          |  |                              |         |                           |   |         |                   |  |   |         |   |  |   |         |  
|Other expense, net                                        |  |                              |         |                           |   |         |                   |  |   | (275    | ) |  |   | (275    | )
|Minority interest                                         |  |                              |         |                           |   |         |                   |  |   | (261    | ) |  |   | (261    | )
|Gain on sale of stock of subsidiaries                     |  |                              |         |                           |   |         |                   |  |   | 5,549   |   |  |   | 5,549   |  
|Loss on venture investments and affiliated companies, net |  |                              |         |                           |   |         |                   |  |   | (2,149  | ) |  |   | (2,149  | )
|Equity in income of affiliated companies                  |  |                              |         |                           |   |         |                   |  |   | 338     |   |  |   | 338     |  
|                                                          |  |                              |         |                           |   |         |                   |  |   |         |   |  |   |         |  
|(Loss) income before income taxes                         |  |                              |         |                           |   |         |                   |  | $ | (7,721  | ) |  | $ | 7,082   |  
|                                                          |  |                              |         |                           |   |         |                   |  |   |         |   |  |   |         |  



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



|                                                     |  |                              |         |   |                             |   |                    |  |   |         |   |  |   |         |  
|---------------------------------------------------- |  | ---------------------------- | ------- | - | --------------------------- | - | ------------------ |  | - | ------- | - |  | - | ------- | -
|                                                     |  | Year Ended December 31, 2004 |        
|                                                     |  | iGATE Solutions              |         |   | iGATE Professional Services |   | iGATE Corporate(1) |  |   | Total   |  
|                                                     |  | (Dollars in thousands)       |        
|External revenues                                    |  | $                            | 131,484 |   |                             | $ | 131,241            |  | $ | 1,860   |   |  | $ | 264,585 |  
|Cost of revenues                                     |  |                              | 92,329  |   |                             |   | 104,131            |  |   | 1,117   |   |  |   | 197,577 |  
|                                                     |  |                              |         |   |                             |   |                    |  |   |         |   |  |   |         |  
|Gross margin                                         |  |                              | 39,155  |   |                             |   | 27,110             |  |   | 743     |   |  |   | 67,008  |  
|Selling, general and administrative                  |  |                              | 55,197  |   |                             |   | 17,046             |  |   | 9,836   |   |  |   | 82,079  |  
|Gain on sale of land                                 |  |                              | (3,615  | ) |                             |   |                   |  |   |        |   |  |   | (3,615  | )
|Restructuring charges                                |  |                              | 4,896   |   |                             |   | 909                |  |   |        |   |  |   | 5,805   |  
|                                                     |  |                              |         |   |                             |   |                    |  |   |         |   |  |   |         |  
|(Loss) income from operations                        |  | $                            | (17,323 | ) |                             | $ | 9,155              |  | $ | (9,093  | ) |  | $ | (17,261 | )
|                                                     |  |                              |         |   |                             |   |                    |  |   |         |   |  |   |         |  
|Other income, net                                    |  |                              |         |   |                             |   |                    |  |   | 1,374   |   |  |   | 1,374   |  
|Minority interest                                    |  |                              |         |   |                             |   |                    |  |   | (677    | ) |  |   | (677    | )
|Equity in losses of affiliated companies             |  |                              |         |   |                             |   |                    |  |   | (335    | ) |  |   | (335    | )
|                                                     |  |                              |         |   |                             |   |                    |  |   |         |   |  |   |         |  
|Loss before income taxes                             |  |                              |         |   |                             |   |                    |  | $ | (8,731  | ) |  | $ | (16,899 | )
|                                                     |  |                              |         |   |                             |   |                    |  |   |         |   |  |   |         |  
|                                                     | 
|                                                     |  | Year Ended December 31, 2003 |        
|                                                     |  | iGATE Solutions              |         |   | iGATE Professional Services |   | iGATE Corporate(1) |  |   | Total   |  
|                                                     |  | (Dollars in thousands)       |        
|External revenues                                    |  | $                            | 145,854 |   |                             | $ | 93,124             |  | $ | 1,656   |   |  | $ | 240,634 |  
|Cost of revenues                                     |  |                              | 100,701 |   |                             |   | 69,997             |  |   | 956     |   |  |   | 171,654 |  
|                                                     |  |                              |         |   |                             |   |                    |  |   |         |   |  |   |         |  
|Gross margin                                         |  |                              | 45,153  |   |                             |   | 23,127             |  |   | 700     |   |  |   | 68,980  |  
|Selling, general and administrative                  |  |                              | 47,685  |   |                             |   | 13,883             |  |   | 11,368  |   |  |   | 72,936  |  
|Restructuring charges                                |  |                              | 524     |   |                             |   |                   |  |   | 80      |   |  |   | 604     |  
|                                                     |  |                              |         |   |                             |   |                    |  |   |         |   |  |   |         |  
|(Loss) income from operations                        |  | $                            | (3,056  | ) |                             | $ | 9,244              |  | $ | (10,748 | ) |  | $ | (4,560  | )
|                                                     |  |                              |         |   |                             |   |                    |  |   |         |   |  |   |         |  
|Other income, net                                    |  |                              |         |   |                             |   |                    |  |   | 1,560   |   |  |   | 1,560   |  
|Minority interest                                    |  |                              |         |   |                             |   |                    |  |   | (312    | ) |  |   | (312    | )
|Equity in losses of affiliated companies             |  |                              |         |   |                             |   |                    |  |   | (99     | ) |  |   | (99     | )
|Loss on venture investments and affiliated companies |  |                              |         |   |                             |   |                    |  |   | (28     | ) |  |   | (28     | )
|                                                     |  |                              |         |   |                             |   |                    |  |   |         |   |  |   |         |  
|Loss before income taxes                             |  |                              |         |   |                             |   |                    |  | $ | (9,627  | ) |  | $ | (3,439  | )
|                                                     |  |                              |         |   |                             |   |                    |  |   |         |   |  |   |         |  

---

|(1) | Corporate activities include general corporate expenses, interest income and expense, equity in losses of unconsolidated affiliates, minority interest, loss from joint ventures and
restructuring charges not identified to a specific segment, and other unallocated charges. The Company evaluates segments based on income (loss) from operations. Since certain administrative and other operating expenses or income sources have not
been allocated to the operating business segments, this basis is not necessarily a measure computed in accordance with generally accepted accounting principles and it may not be comparable to other companies.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



Total assets by segment were as follows:



|                                                  |  |                         |         |      |   |         |  |   |        
|------------------------------------------------- |  | ----------------------- | ------- | ---- | - | ------- |  | - | -------
|                                                  |  | Year Ended December 31,
|                                                  |  | 2005                    |         | 2004 |   | 2003   
|                                                  |  | (Dollars in thousands) 
|iGATE Solutions                                   |  | $                       | 95,010  |      | $ | 101,439 |  | $ | 93,013 
|iGATE Professional Services                       |  |                         | 20,034  |      |   | 40,978  |  |   | 19,926 
|iGATE Corporate including discontinued operations |  |                         | 62,430  |      |   | 37,815  |  |   | 68,001 
|                                                  |  |                         |         |      |   |         |  |   |        
|Total assets                                      |  | $                       | 177,474 |      | $ | 180,232 |  | $ | 180,940
|                                                  |  |                         |         |      |   |         |  |   |        

Revenue and tangible long-term assets by geographic area consisted of the following:



|                                |  |                         |         |      |   |         |  |   |        
|------------------------------- |  | ----------------------- | ------- | ---- | - | ------- |  | - | -------
|                                |  | Year Ended December 31,
|                                |  | 2005                    |         | 2004 |   | 2003   
|                                |  | (Dollars in thousands) 
|Revenues:                       |  |                         |         |      |   |         |  |   |        
|North America, principally U.S. |  | $                       | 235,054 |      | $ | 223,772 |  | $ | 178,825
|Europe                          |  |                         | 19,284  |      |   | 22,167  |  |   | 22,438 
|Pacific Rim, principally India  |  |                         | 21,654  |      |   | 18,646  |  |   | 39,371 
|                                |  |                         |         |      |   |         |  |   |        
|Total revenues                  |  | $                       | 275,992 |      | $ | 264,585 |  | $ | 240,634
|                                |  |                         |         |      |   |         |  |   |        
|                                | 
|                                |  | Year Ended December 31,
|                                |  | 2005                    |         | 2004 |   | 2003   
|                                |  | (Dollars in thousands) 
|Tangible long-term assets:      |  |                         |         |      |   |         |  |   |        
|North America, principally U.S. |  | $                       | 1,610   |      | $ | 2,511   |  | $ | 3,064  
|Europe                          |  |                         | 176     |      |   | 106     |  |   | 507    
|Pacific Rim, principally India  |  |                         | 26,753  |      |   | 23,197  |  |   | 12,912 
|                                |  |                         |         |      |   |         |  |   |        
|Total tangible long-term assets |  | $                       | 28,539  |      | $ | 25,814  |  | $ | 16,483 
|                                |  |                         |         |      |   |         |  |   |        

The following is a concentration of revenues greater than 10% for the periods shown:



|                                     |  |      |   |  |      |   |  |      |  
|------------------------------------ |  | ---- | - |  | ---- | - |  | ---- | -
|                                     |  | 2005 |   |  | 2004 |   |  | 2003 |  
|General Electric Company             |  |      |   |  |      |   |  |      |  
|iGATE Solutions                      |  | 35   | % |  | 37   | % |  | 35   | %
|iGATE Consolidated                   |  | 18   | % |  | 19   | % |  | 22   | %
|International Business Machine Corp. |  |      |   |  |      |   |  |      |  
|iGATE Professional Services          |  | 22   | % |  | 23   | % |  | 19   | %
|iGATE Consolidated                   |  | 11   | % |  | 12   | % |  |     |  
|Wachovia Corporation                 |  |      |   |  |      |   |  |      |  
|iGATE Professional Services          |  | 11   | % |  | 13   | % |  |     |  



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



|17. | Quarterly Financial Information (Unaudited)
|--- | -------------------------------------------

The
following table sets forth certain unaudited financial information for each of the quarters indicated below and, in the opinion of management, contains all adjustments, consisting only of normal recurring adjustments, if necessary, for a fair
presentation thereof. Earnings per share amounts for each quarter are required to be computed independently, and therefore may not equal the amount computed for the entire year.



|                                                             |  |                                               |        |   |         |   |        |              |  |   |             |   |  |   |        |  
|------------------------------------------------------------ |  | --------------------------------------------- | ------ | - | ------- | - | ------ | ------------ |  | - | ----------- | - |  | - | ------ | -
|                                                             |  | Three Months Ended                            |       
|                                                             |  | March 31                                      |        |   | June 30 |   |        | September 30 |  |   | December 31 |  
|                                                             |  | (Dollars in thousands, except per share data) |       
|2005:                                                        |  |                                               |        |   |         |   |        |              |  |   |             |   |  |   |        |  
|Revenues                                                     |  | $                                             | 69,601 |   |         | $ | 67,896 |              |  | $ | 70,102      |   |  | $ | 68,393 |  
|Gross margin                                                 |  |                                               | 17,197 |   |         |   | 16,798 |              |  |   | 18,930      |   |  |   | 17,957 |  
|(Loss) income from continuing operations                     |  |                                               | (32    | ) |         |   | (576   | )            |  |   | 1,709       |   |  |   | 2,779  |  
|(Loss) income from continuing operations before income taxes |  |                                               | (519   | ) |         |   | (27    | )            |  |   | 1,997       |   |  |   | 5,631  |  
|                                                             |  |                                               |        |   |         |   |        |              |  |   |             |   |  |   |        |  
|Net income (loss)                                            |  | $                                             | 1,344  |   |         | $ | (286   | )            |  | $ | 875         |   |  | $ | 5,036  |  
|                                                             |  |                                               |        |   |         |   |        |              |  |   |             |   |  |   |        |  
|Net earnings (loss) per common share, basic                  |  | $                                             | 0.03   |   |         | $ | (0.01  | )            |  | $ | 0.02        |   |  | $ | 0.10   |  
|                                                             |  |                                               |        |   |         |   |        |              |  |   |             |   |  |   |        |  
|Net earnings (loss) per common share, diluted                |  | $                                             | 0.03   |   |         | $ | (0.01  | )            |  | $ | 0.02        |   |  | $ | 0.10   |  
|                                                             |  |                                               |        |   |         |   |        |              |  |   |             |   |  |   |        |  
|                                                             |  |                                               |        |  
|2004:                                                        |  |                                               |        |   |         |   |        |              |  |   |             |   |  |   |        |  
|Revenues                                                     |  | $                                             | 64,063 |   |         | $ | 65,868 |              |  | $ | 66,565      |   |  | $ | 68,089 |  
|Gross margin                                                 |  |                                               | 17,037 |   |         |   | 16,386 |              |  |   | 16,837      |   |  |   | 16,748 |  
|Loss from continuing operations                              |  |                                               | (2,243 | ) |         |   | (5,484 | )            |  |   | (1,474      | ) |  |   | (8,060 | )
|Loss income from continuing operations before income taxes   |  |                                               | (1,610 | ) |         |   | (5,919 | )            |  |   | (1,034      | ) |  |   | (8,336 | )
|Income (loss) from discontinued operations                   |  |                                               | 170    |   |         |   | 3,645  |              |  |   | 3           |   |  |   |       |  
|                                                             |  |                                               |        |   |         |   |        |              |  |   |             |   |  |   |        |  
|Net loss                                                     |  | $                                             | (1,752 | ) |         | $ | (5,702 | )            |  | $ | (1,816      | ) |  | $ | (8,941 | )
|                                                             |  |                                               |        |   |         |   |        |              |  |   |             |   |  |   |        |  
|Net loss per common share, basic                             |  | $                                             | (0.03  | ) |         | $ | (0.11  | )            |  | $ | (0.03       | ) |  | $ | (0.17  | )
|                                                             |  |                                               |        |   |         |   |        |              |  |   |             |   |  |   |        |  
|Net loss per common share, diluted                           |  | $                                             | (0.03  | ) |         | $ | (0.11  | )            |  | $ | (0.03       | ) |  | $ | (0.17  | )
|                                                             |  |                                               |        |   |         |   |        |              |  |   |             |   |  |   |        |  

In the fourth quarter of 2004, unfavorable adjustments in the amount of approximately $0.8 million
were recorded to certain customers accounts receivable balances. These adjustments consisted of credits and discounts and were not related to prior reporting periods. In addition, an unfavorable adjustment in the amount of $1.3 million was
recorded as compensation expense as a result of the Quintant modification.



|18. | Related Party Transactions
|--- | --------------------------

In conjunction with the
modified sales agreement with Quintant, which is more fully discussed in Notes 11 and 12, Phaneesh Murthy, CEO of iGS, purchased 722,570 shares of iGS at a market value of $5.91 per share. Through this transaction, Phaneesh Murthy owns approximately
2.5% of the outstanding common stock of iGS.

On August 25, 2004, Phaneesh Murthy was issued 357,863 shares of common stock of iGATE
Corporation at a market value of $2.92 per share.



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



The Company entered into a consulting arrangement with Primentor Consulting to provide human resource
consulting services. Primentor Consulting was founded by Phaneesh Murthy, CEO of iGS. The Company paid $0.4 million for these services during 2003.

The Company has advanced employees $1.1 million and $1.4 million at December 31, 2005 and 2004, respectively. These advances do not exceed $2,500 per employee and are typically deducted from the employees salary over a six-month
period or until paid in full.

At December 31, 2005, Sunil Wadhwani, CEO and Co-Founder of iGATE Corporation, directly owned
12,738,791 common shares of the Company and indirectly owned 2,562,262 common shares of the Company through various family trusts.

At
December 31, 2005, Ashok Trivedi, President and Co-Founder of iGATE Corporation, directly owned 12,961,131 common shares of the Company and indirectly owned 2,339,922 common shares of the Company through various family trusts.

The Company leases office space in the Indian cities of Chennai and Pune from Sunil Wadhwani, the Companys Co-Chairman and Chief Executive Officer,
and Ashok Trivedi, the Companys Co-Chairman and President. Messrs. Wadhwani and Trivedi own various properties jointly and individually. The acquisitions of the real estate and the construction of the office buildings, excluding build-outs of
the office space, were financed entirely by Messrs. Wadhwani and Trivedi from personal funds. The leases cover approximately 67,000 square feet, and expire at various times from 2006 through 2008. The total annual rental is approximately $0.4
million. The lease agreements are subject to annual rent escalation, which has been accounted for on a straight-line basis.

Pursuant to a
Promissory Note and in accordance with the terms of his employment agreement, Michael J. Zugay, Chief Financial Officer of iGATE, received a loan in the amount of $0.1 million from iGATE on December 31, 2001 to satisfy the minimum required tax
withholding obligations arising from his receipt of 0.15 million shares of restricted stock. Payments of interest, which accrued at 4.75% per annum on the unpaid principal, were due quarterly beginning on March 31, 2002 and the
principal was due by December 31, 2003. The note was paid in full in 2003.



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|ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|------- | ------------------------------------------------------------------------------------

Not Applicable.



|ITEM 9A. | CONTROLS AND PROCEDURES
|-------- | -----------------------

Disclosure Controls and
Procedures

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be
disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the SECs rules and forms, and that such information is
accumulated and communicated to the Companys management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of Company
management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the Companys disclosure controls and procedures pursuant to the Securities Exchange Act of 1934
(Exchange Act) Rules 13a-15(b) and 15d-15(b). Based upon, and as of the date of this evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Companys disclosure controls and procedures were
effective. The results of managements assessment were reviewed with the Companys Audit Committee.

Managements Report
on Internal Control Over Financial Reporting

Management of the Company is responsible for establishing and maintaining adequate
internal control over financial reporting. The Companys internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may become ineffective because of changes in conditions or that the degree of compliance with established policies or procedures may deteriorate.

The Companys management assessed the effectiveness of the Companys internal control over financial reporting as of December 31, 2005. In
making its assessment of internal control over financial reporting, management used the criteria described in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO).

A material weakness is a control deficiency, or combination of control deficiencies, that results in more than a
remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. Management has completed its assessment of the effectiveness of the Companys internal control over financial
reporting and has not identified any material weaknesses.

Managements assessment of the effectiveness of the Companys internal
control over financial reporting as of December 31, 2005 has been audited by BDO Seidman, LLP, an independent registered public accounting firm, as stated in their report which is included herein.

Changes in Internal Control Over Financial Reporting

Prior Year Material Weaknesses.     As of December 31, 2004, the Company did not maintain effective controls over (1) accounting for customer accounts receivable and the
corresponding revenue, specifically ineffective controls over restricted system access to the accounts receivable module, monitoring of cash payments received from customers and the issuance of customer credit memos and discounts, (2) the
calculation



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and review of deferred compensation and the corresponding compensation expense, specifically the controls did not identify a computation error in determining
the amount of compensation expense to be recognized from the cancellation of 2.1 million shares of restricted stock and the related cash payments made to the Quintant Inc. founders, and (3) the calculation and review of income taxes,
including the determination of income taxes payable, deferred income tax assets and liabilities and the related income tax provision, specifically, the Company did not perform an effective review of income tax calculations performed by subsidiaries
that are included in the consolidated income tax provision. In addition, the Company did not maintain effective controls over the access and use of the application used in the computation of the consolidated income tax provision.

The following are high-level descriptions of the Companys remediation efforts.

(1) Customer Accounts Receivable and Corresponding Revenue

In April 2005, the Company began to transition all components of its North American Professional Services segment (IPS) customer accounts receivable and revenue processes from its location in Bangalore,
India to its North American Headquarters in Pittsburgh, Pennsylvania in order to directly supervise all accounts receivable and revenue processes. Since the April 2005 transition back to the U.S., all processes related to customer accounts
receivable and revenue have been performed by the Companys U.S. accounting and finance staff. The Company hired additional employees at its Headquarters to manage, oversee and assume individual customer collection and administrative interface
responsibility. This process change has improved the understanding of the specific customer terms and the ability to quickly implement corrections to files or individual invoices if required.

In May 2005, the Company also began a detailed review and analysis of its functional procedures relative to its customer accounts receivable and revenue
processes. This review and remediation project included updating key control documentation, developing desktop procedures for each job description, and standardizing business rules, policies and procedures across the organization. As of
December 31, 2005, the Company has completed the documentation and testing of the controls. The Company has determined the controls are functioning as designed.

The Company also engaged a third party consulting firm, which specializes in PeopleSoft Software Systems, to review access and security issues with the Companys accounting software to ensure the ability to
simplify the addition of specific customer terms and promptly change data files if required to adjust incorrect terms while maintaining strict security access and control of the files. The purpose of this review was to identify system access and
security control deficiencies that required improvement. In May 2005, the Company formed a five employee technical team to remediate and strengthen the procedures and controls related to the software. This remediation effort was completed by
December 31, 2005.

(2) Calculation and Review of Deferred Compensation

The Company viewed this weakness as a one-time occurrence related to the accounting for a very complex acquisition. The Company has revised its policies
and procedures regarding the accounting for acquisitions and in the future will have additional management personnel review all detailed calculations for significant transactions of this type. The Company has already implemented a detailed Audit
Committee checklist which is reviewed by the Audit Committee at every Committee meeting. The checklist describes, in detail, all significant accounting and reporting issues that have occurred during the quarter. The checklist was implemented during
the Companys second quarter 2005 Form 10-Q reporting period. This internal control process was finalized by September 30, 2005.

(3) Calculation and Review of Income Taxes Payable, Deferred Income Taxes and Related Tax Provision

The Company began to
formulate its tax control structure in December 2004. The Company has implemented a formalized review process for all of its subsidiaries. The Company tested this structure for the second and third quarters of 2005 to ensure that the review process
was functioning as designed. The Company



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has evaluated its control environment regarding the access and use of the applications used in the computation of the consolidated income tax provision and
related footnote disclosures and believes it has necessary access controls and review and approvals controls in place. The Company contracted with an independent third party consulting firm that specializes in control processes and documentation to
review the established structure for consistency and then tested this structure for compliance noting no exceptions. This remediation effort was completed by December 31, 2005.

Managements Remediation Efforts

The material weaknesses described above resulted in audit adjustments to the fourth quarter 2004 consolidated financial statements of approximately $800,000, $1,300,000 and $0, respectively. To address these material weaknesses, the Company
performed additional analysis and other post-closing procedures to ensure that the consolidated financial statements were prepared in accordance with generally accepted accounting principles. Accordingly, management believes that the financial
statements included in this report fairly present in all material respects the Companys financial position, results of operations and cash flows for the periods presented.

Changes in Internal Control Over Financial Reporting

There has been no change in iGATEs internal control over financial reporting that occurred during the fourth quarter that has materially affected, or is reasonably likely to materially affect, such internal
control over financial reporting as of December 31, 2005.



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Report of Independent Registered Public Accounting Firm on

Internal Control over Financial Reporting

Board of Directors and Stockholders

iGate Corporation

Pittsburgh, Pennsylvania

We have audited managements assessment, included in the accompanying Managements Report that iGate Corporation maintained effective internal control over financial reporting as of December 31, 2005, based on criteria established
in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). The Companys management is responsible for maintaining effective internal control over financial
reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on managements assessment and an opinion on the effectiveness of the Companys internal
control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our
audit included obtaining an understanding of internal control over financial reporting, evaluating managements assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures
as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A companys
internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles. A companys internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the companys assets that could have a material effect on the financial statements.

Because of its inherent
limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, managements assessment
that the Company maintained effective internal control over financial reporting as of December 31, 2005, is fairly stated, in all material respects, based on the COSO criteria. Also in our opinion, the Company maintained, in all material respects,
effective internal control over financial reporting as of December 31, 2005, based on the COSO criteria.

We have also audited, in
accordance with the standards of the Public Company Accounting Standards Board (United States), the consolidated balance sheet of iGate Corporation as of December 31, 2005, and the related consolidated statements of operations, shareholders
equity and cash flows for the year then ended and our report dated March 3, 2006 expressed an unqualified opinion on those consolidated financial statements.

/s/ BDO Seidman, LLP

Milwaukee, Wisconsin

March 3, 2006



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PART III



|ITEM 10. | DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT
|-------- | ----------------------------------------------

Information required by Item 10 is incorporated herein by reference from the section captioned Business Experience of Directors, Executive Officers, and Section 16(a) Beneficial Ownership Reporting
Compliance in the Companys definitive proxy statement relating to the Annual Meeting of Shareholders scheduled for May 25, 2006, which will be filed with the Commission within 120 days after the close of the Companys fiscal
year ended December 31, 2005 (the Proxy Statement).

The information required by Item 405 of Regulation S-K with
respect to compliance with Section 16(a) of the Securities Exchange Act of 1934, as amended, is incorporated herein by reference from the section captioned Compliance with Section 16(a) Reporting in the Proxy Statement.

The information required by Section 401 of Regulation S-K with respect to disclosure of audit committee financial experts is
incorporated herein by reference from the section captioned Audit Committee Report in the Proxy Statement.

We have adopted a
code of ethics applicable to all of our employees, including our principal executive officer, principal financial officer and principal accounting officer titled Code of Conduct Policy. The Code of Conduct Policy is posted on the Companys
website, www.igatecorp.com (under the Corporate Governance caption of the Investor Relations page). The Company intends to satisfy the disclosure requirement regarding certain amendments to, or waivers from, provisions of its code
of ethics by posting such information on the Companys website.



|ITEM 11. | EXECUTIVE COMPENSATION
|-------- | ----------------------

The information required by
this item is incorporated by reference to the information under the captions Director Compensation, Executive Compensation, and Stock Performance Chart in the Companys Proxy Statement.



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|ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|-------- | --------------------------------------------------------------

The following table provides information as of December 31, 2005 regarding compensation plans and arrangements under which equity securities of iGATE are authorized for issuance.



|                                                       |  |                                                                                             |  |                                                                             |      |                                                                                                                                           |       
|------------------------------------------------------ |  | ------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------- | ---- | ----------------------------------------------------------------------------------------------------------------------------------------- | ------
|                                                       |  | Equity Compensation Plan Information                                                       
|Plan Category                                          |  | Number of securities to beissued upon exerciseof outstanding options,warrants and
rights(a) |  | Weighted-averageexercise
price ofoutstanding options,warrants and rights(b) |      | Number of securitiesremaining available forfuture issuance under equitycompensation plans(excluding securitiesreflected in column (a))(c)
|                                                       |  | (in thousands except for price)                                                            
|Equity compensation plans approved by security holders |  | 2,201                                                                                       |  | $                                                                           | 6.93 |                                                                                                                                           | 10,188
|                                                       |  |                                                                                             |  |                                                                             |      |                                                                                                                                           |       
|Total                                                  |  | 2,201                                                                                       |  | $                                                                           | 6.93 |                                                                                                                                           | 10,188
|                                                       |  |                                                                                             |  |                                                                             |      |                                                                                                                                           |       

During 2000, the Company adopted the Second Amended and Restated Stock Incentive Plan (the
Plan). The Plan provides that up to 14.7 million shares of the Companys Common Stock shall be allocated for issuance to directors, executive management and key personnel.

The information related to stock ownership of management required by this item is incorporated by reference to the information under the caption
Stock Ownership of Certain Beneficial Owners and Management in the Companys Proxy Statement.



|ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
|-------- | ----------------------------------------------

The
information required by this item is incorporated by reference to the information under the caption Certain Related Party Transactions in the Companys Proxy Statement.



|ITEM 14. | PRINCIPAL ACCOUNTING FEES AND SERVICES
|-------- | --------------------------------------

Information
required by Item 14 is incorporated herein by reference to the section describing Ratification of Appointment of Independent Registered Public Accounting Firm in the Companys definitive proxy statement relating to the annual
meeting of stockholders to be held on May 25, 2006, which will be filed with the Commission within 120 days after the close of the Companys fiscal year ended December 31, 2005.



83



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PART IV



|ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|-------- | ------------------------------------------

(a)
1. Financial Statements

The following consolidated financial statements of the registrant and its subsidiaries are included on
pages 41 to 44 and the reports of Independent Registered Public Accounting Firms is included on pages 39 and 40 in this Form 10-K.

Reports
of Independent Registered Public Accounting Firms.

Consolidated Balance SheetsDecember 31, 2005 and 2004.

Consolidated Statements of OperationsYears ended December 31, 2005, 2004 and 2003.

Consolidated Statements of Shareholders Equity and Comprehensive Income (Loss)Years ended December 31, 2005, 2004 and 2003.

Consolidated Statements of Cash FlowsYears ended December 31, 2005, 2004 and 2003.

Notes to Consolidated Financial Statements

2. Consolidated Financial Statement Schedules

The following consolidated financial statement schedules shown below
should be read in conjunction with the consolidated financial statements on pages 41 to 44 in this Form 10-K. All other schedules are omitted because they are not applicable or the required information is shown in the Consolidated Financial
Statements or notes thereto.

The following items appear immediately following the signature pages:

Financial Statement Schedules:

Schedule
IIValuation and Qualifying Accounts for the three years ended December 31, 2005, 2004 and 2003, respectively.

3. Exhibits

Exhibits required by Item 601 of Regulation S-K are listed in the Exhibit Index, which is
incorporated herein by reference.



84



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##### Table of Contents

iGATE CORPORATION

SCHEDULE IIVALUATION AND QUALIFYING ACCOUNTS

FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003



|                                 |  |                               |        |                             |   |       |               |  |   |                        |   |  |   |       
|-------------------------------- |  | ----------------------------- | ------ | --------------------------- | - | ----- | ------------- |  | - | ---------------------- | - |  | - | ------
|                                 |  | Balance at beginningof period |        | (Credited)chargedto expense |   |       | Deductions(1) |  |   | Balanceat endof period
|                                 |  | (in thousands)               
|Allowance for Doubtful Accounts: |  |                               |        |                             |   |       |               |  |   |                        |   |  |   |       
|Year ended December 31, 2005     |  | $                             | 3,892  |                             | $ | (949  | )             |  | $ | (1,167                 | ) |  | $ | 1,776 
|Year ended December 31, 2004     |  |                               | 2,283  |                             |   | 2,735 |               |  |   | (1,126                 | ) |  |   | 3,892 
|Year ended December 31, 2003     |  |                               | 2,518  |                             |   | 253   |               |  |   | (488                   | ) |  |   | 2,283 
|Valuation Allowance:             |  |                               |        |                             |   |       |               |  |   |                        |   |  |   |       
|Year ended December 31, 2005     |  | $                             | 16,744 |                             | $ | 5,100 |               |  | $ | (310                   | ) |  | $ | 21,534
|Year ended December 31, 2004     |  |                               | 8,196  |                             |   | 9,262 |               |  |   | (714                   | ) |  |   | 16,744
|Year ended December 31, 2003     |  |                               | 9,039  |                             |   |      |               |  |   | (843                   | ) |  |   | 8,196 

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|(1) | Write-offs, net of recoveries, cash payments related to restructurings and the use of capital loss carry forwards and foreign tax credits.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------



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|        |  |                                                                                                                                                                                                                                                                                                                                                                          
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        | 
|Exhibit |  | Index Description of
Exhibit                                                                                                                                                                                                                                                                                                                                             
|3.1     |  | Second Amended and Restated Articles of Incorporation of the Company are incorporated by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q, File No. 000-21755, filed on
August 14, 2000.                                                                                                                                                                    
|3.2     |  | Amended and Restated Bylaws of the Company are incorporated by reference to Exhibit 3.2 to the Quarterly Report on Form 10-Q, File No. 000-21755, filed on August 14, 2000.                                                                                                                                                                                              
|4.1     |  | Form of certificate representing the Common Stock of the Company is incorporated by reference from Exhibit 4.1 to iGATE Corporations Registration Statement on Form S-1, Commission File No.
333-14169, filed on November 19, 1996.                                                                                                                                     
|10.1    |  | Form of Employment Agreement by and between the Company and Sunil Wadhwani and Ashok Trivedi is incorporated by reference from Exhibit 10.1 to iGATE Corporations Registration Statement on
Form S-1, Commission File No. 333-14169, filed on November 19, 1996.*                                                                                                       
|10.1(a) |  | Form of Amendment to Employment Agreement by and between the Company and Sunil Wadhwani and Ashok Trivedi is incorporated by reference from Exhibit 10.1(a) to the Annual Report on
Form 10-K, File No. 000-21755 filed on March 28, 2001.*                                                                                                                              
|10.2    |  | Executive Employment Agreement dated November 22, 2000 between Steven Shangold and Emplifi, Inc. and iGATE Corporation is incorporated by reference from Exhibit 10.2 to the Annual Report on Form
10-K, File No. 000-21755 filed on March 28, 2001.*                                                                                                                    
|10.2(a) |  | Employment Agreement Amendment dated September 30, 2001, between Steven Shangold, Emplifi, Inc. and iGATE Corporation filed on April 1, 2002.*                                                                                                                                                                                                                           
|10.3    |  | Employment Agreement dated April 1, 2001 between iGATE Management, Inc., and Michael J. Zugay is incorporated by reference from Exhibit 10.1 to the Quarterly Report on Form 10-Q, File
No 000-21755 filed on August 14, 2001.*                                                                                                                                          
|10.4    |  | Second Amended and Restated Stock Incentive Plan is incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q, File No. 000-21755, filed on August 14,
2000.*                                                                                                                                                                                       
|10.4(a) |  | Executive Employment Agreement dated August 21, 2003 between Phaneesh Murthy and iGATE Global Solutions, Ltd. filed on November 14, 2003.                                                                                                                                                                                                                                
|10.5    |  | Amended and Restated 1996 Stock Incentive Plan is incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q, File No. 000-21755 filed on November 16, 1998.*                                                                                                                                                                                        
|10.6    |  | Second Amended and Restated 1996 Stock Incentive Plan is incorporated by reference to Exhibit 99.1 to iGATE Corporations Definitive Proxy Statement, File No. 000-21755 filed on December
30, 1998.*                                                                                                                                                                    
|10.7    |  | 1996 Stock Incentive Plan is incorporated by reference to Exhibit 10.2 to iGATE Corporations Registration Statement on Form S-1, Commission File No. 333-14169, filed on November 19,
1996.*                                                                                                                                                                            
|10.8    |  | Credit Agreement dated August 1, 2000 by and among iGATE Capital Corporation, as borrower, and the financial institutions party thereto, as lenders, and PNC Bank, N.A., as agent and as Swing
Loan Lender and Issuing Bank is incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q, Commission File No. 000-21755, filed on November 14, 2000.
|10.8(a) |  | First Amendment to Credit Agreement dated November 28, 2000 by and among iGATE Capital Corporation, PNC Bank, N.A. and National City Bank of Pennsylvania is incorporated by reference to Exhibit
10.8(a) to the Annual Report on Form 10-K, File No. 000-21755 filed on March 28, 2001.                                                                                 
|10.8(b) |  | Second Amendment to Credit Agreement dated September 30, 2001 by and among iGATE Corporation, PNC Bank, N.A., National City Bank of Pennsylvania and First National Union Bank filed on April 1,
2002.                                                                                                                                                                   
|10.8(c) |  | Third Amendment to Credit Agreement dated December 30, 2002 by and among iGATE Corporation, PNC Bank, N.A., National City Bank of Pennsylvania and First National Union Bank filed on
March 31, 2003.                                                                                                                                                                    



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|        |  |                                                                                                                                                                                                                                                                                                                        
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        | 
|Exhibit |  | Index Description of
Exhibit                                                                                                                                                                                                                                                                                           
|10.8(d) |  | Loan Agreement dated September 16, 2003 by and among iGATE Corporation, iGATE, Inc. and PNC Bank, N.A. filed as Exhibit 10.02 to Form 10-Q on November 14, 2003.                                                                                                                                                       
|10.8(e) |  | First Amendment to Loan Agreement dated as of September 15, 2004 by and among iGATE Corporation, iGATE, Inc. and PNC Bank, N.A., as Exhibit 10.01 to Form 8-K on September 20,
2004.                                                                                                                                   
|10.8(e) |  | Second Amendment to Loan Agreement dated as of September 14, 2005, by and among iGATE Corporation, iGATE, Inc. and PNC Bank, N.A. as Exhibit 10.01 to Form 10-Q on November 9,
2005.                                                                                                                                   
|10.9    |  | Lease Agreement dated January 15, 1995 by and between iGS and Messrs. Wadhwani and Trivedi for real estate in Bangalore, India is incorporated by reference to Exhibit 10.10 to iGATE
Corporations Registration Statement on Form S-1, Commission File No. 333-14169, on April 1, 2002.                               
|10.10   |  | Lease Agreement dated November 6, 1996 by and between iGS and Messrs. Wadhwani and Trivedi for real estate in Bangalore, India is incorporated by reference to Exhibit 10.11 to iGATE
Corporations Registration Statement on Form S-1, Commission File No. 333-14169, filed on November 19, 1996.                     
|10.11   |  | Lease Agreement dated January 15, 1998 by and between iGS and Messrs. Wadhwani and Trivedi for real estate in Bangalore, India incorporated by reference to Exhibit 10.12 to Annual Report on Form
10-K for the year ended December 31, 1998.                                                                          
|10.12   |  | Lease Agreement dated March 26, 1997 by and between iGS and Messrs. Wadhwani and Trivedi for real estate in Bangalore, India incorporated by reference to Exhibit 10.13 to Annual Report on Form
10-K for the year ended December 31, 1998.                                                                            
|10.13   |  | Lease Agreement dated January 13, 1998 by and between iGS and Messrs. Wadhwani and Trivedi for real estate in Chennai, India incorporated by reference to Exhibit 10.14 to Annual Report on Form
10-K for the year ended December 31, 1998.                                                                            
|10.14   |  | Lease Agreement dated April 1, 1996 by and between Scott Systems Private Limited and Messrs. Wadhwani and Trivedi for real estate in Bombay, India is incorporated by reference from Exhibit
10.12 to iGATE Corporations Registration Statement on Form S-1, Commission File No. 333-4169, filed on November 19, 1996.
|10.15   |  | Lease Agreement dated April 1, 1996 by and between Scott Systems Private Limited and Sunil Wadhwani for real estate in Bombay, India is incorporated by reference to Exhibit 10.13 to iGATE
Corporations Registration Statement on Form S-1, Commission File No. 333-14169, filed on November 19, 1996.               
|10.16   |  | Lease Agreement dated April 1, 1996 by and between Scott Systems Private Limited and Ashok Trivedi for real estate in Bombay, India is incorporated by reference to Exhibit 10.14 to iGATE
Corporations Registration Statement on Form S-1, Commission File No. 333-14169, filed on November 19, 1996.                
|10.17   |  | Lease Agreement dated April 18, 1998 by and between Scott Systems Private Limited and Messrs. Wadhwani and Trivedi for real estate in Mumbai, India incorporated by reference to Exhibit 10.18 to
Annual Report on Form 10-K for the year ended December 31, 1998.                                                     
|10.18   |  | Lease Agreement dated April 18, 1998 by and between Scott Systems Private Limited and Messrs. Wadhwani and Trivedi for real estate in Mumbai, India incorporated by reference to Exhibit 10.19 to
Annual Report on Form 10-K for the year ended December 31, 1998.                                                     
|10.20   |  | Lease Agreement dated October 14, 1998 by and between Park Ridge One Associates and the Company for office space located in Park Ridge Office Center near Pittsburgh, Pennsylvania incorporated by
reference to Exhibit 10.20 to Annual Report on Form 10-K for the year ended December 31, 1998.                      



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##### Table of Contents

|         |  |                                                                                                                                                                                                                                                                                                                                                                       
|-------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|         | 
|Exhibit  |  | Index Description of
Exhibit                                                                                                                                                                                                                                                                                                                                          
|         | 
|10.20(a) |  | First Amendment to Lease Agreement dated October 14, 1998 by and between Park Ridge One Associates and the Company for office space located in Park Ridge Office Center near Pittsburgh filed as
Exhibit 10.20 to Annual Report Form 10-K for the year ended December 31, 1998 is filed herewith.                                                                     
|         | 
|10.21    |  | Lease Agreement dated June 8, 2000 by and between the Company and Foster Plaza Holding Corporation for office space in Foster Plaza located near Pittsburgh, Pennsylvania is incorporated by
reference to Exhibit 10.21 to the Annual Report on Form 10-K, File No. 000-21755 filed on March 28, 2001.                                                                
|         | 
|10.22    |  | ADR Purchase Agreement dated August 10, 2004 by and among Mukul Murthy, Nirav Murthy, Swarna Murthy, Phaneesh Murthy, Amit Sethi, Kanth Miriyala, Quintant Services Limited and iGATE Corporation
filed as Exhibit 10.22 to the Annual Report on Form 10-K filed on April 7, 2005.                                                                                    
|         | 
|10.22(a) |  | Amendment Agreement dated September 24, 2004 by and among Mukul Murthy, Nirav Murthy, Swarna Murthy, Phaneesh Murthy, Amit Sethi, Kanth Miriyala, Quintant Services Limited and iGATE Corporation
filed as Exhibit 10.22(a) to the Annual Report on Form 10-K filed on April 7, 2005.                                                                                 
|         | 
|10.23    |  | Shareholders Agreement by and among the Company, Sunil Wadhwani and Ashok Trivedi and the Joinder Agreement by Grantor Retained Annuity Trusts established by Messrs. Wadhwani and Trivedi are
incorporated by reference to Exhibit 10.5 to iGATE Capital Corporations Registration Statement on Form S-1, Commission File No. 333-14169, filed on December 16, 1996.
|         | 
|10.24    |  | Form of S-corporation Revocation, Tax Allocation and Indemnification Agreement is incorporated by reference to Exhibit 10.17 to iGATE Capital Corporations Registration Statement on Form
S-1, Commission File No. 333-14169, filed on November 19, 1996.                                                                                                            
|         | 
|10.25    |  | Stock Purchase Agreement dated December 12, 2001 by and between Highgate Ventures I, L.P. and Ashok Trivedi and Sunil Wadhwani filed April 1, 2002.                                                                                                                                                                                                                   
|         | 
|10.26    |  | Executive Employment Agreement dated July 1, 2001 between Gerhard Watzinger and iGATE Global Solutions and iGATE Capital Corporation filed on March 31, 2003.*                                                                                                                                                                                                        
|         | 
|10.27    |  | Executive Employment Agreement dated December 31, 2001 between Vivekanand Penninti and iGATE Capital Corporation filed on March 31, 2003.*                                                                                                                                                                                                                            
|         | 
|21.0     |  | Subsidiaries of the Registrant filed as Exhibit 21.0 to the Annual Report on Form 10-K filed on March 16, 2006 is filed herewith.                                                                                                                                                                                                                                     
|         | 
|23.1     |  | Consent of Independent Registered Public Accounting Firm is filed herewith.                                                                                                                                                                                                                                                                                           
|         | 
|23.2     |  | Consent of Independent Registered Public Accounting Firm is filed herewith.                                                                                                                                                                                                                                                                                           
|         | 
|31.01    |  | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Chief Executive Officer is filed herewith.                                                                                                                                                                                                                                                 
|         | 
|31.02    |  | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Chief Financial Officer is filed herewith.                                                                                                                                                                                                                                                 
|         | 
|32.01    |  | Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Chief Executive Officer is filed herewith.                                                                                                                                                                                                  
|         | 
|32.02    |  | Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Chief Financial Officer is filed herewith.                                                                                                                                                                                                  

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|* | Management compensatory plan or arrangement
|- | -------------------------------------------



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##### Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 16th day of March, 2006.



|               |  |  |  |                                       
|-------------- |  |  |  | --------------------------------------
|               |  |  |  | iGATE CORPORATION                     
|               |  | 
|March 16, 2006 |  |  |  | /s/    SUNIL WADHWANI                 
|               |  |  |  | Sunil Wadhwani                        
|               |  |  |  | Co-Chairman of the Board of Directors,
|               |  |  |  | Chief Executive Officer, and Director 



| |  |  |  |                            
| |  |  |  | ---------------------------
| |  |  |  |                            
| |  | 
| |  |  |  | /s/    MICHAEL J. ZUGAY    
| |  |  |  | Michael J. Zugay           
| |  |  |  | Senior Vice President      
| |  |  |  | and Chief Financial Officer