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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, 2006



| ̈ | 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 jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification 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: Common Stock, $.01 par value

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

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  x    No ̈

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, 2006 (based on the closing price of such
stock as reported by NASDAQ on such date) was $141,038,636.

The number of shares of the registrants Common Stock, par value $.01 per
share, outstanding as of February 28, 2007 was 53,066,806 shares.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrants Proxy Statement, prepared for the Annual Meeting of Shareholders scheduled for May 31, 2007 to be filed with the
Commission are incorporated by reference into Part III of this report.



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iGATE CORPORATION

2006 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                             |  | 76  
|ITEM 9A.   |  | CONTROLS AND PROCEDURES                                                                                          |  | 76  
|          
|PART III  
|           |  |                                                                                                                 
|ITEM 10.   |  | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE                                                           |  | 78  
|ITEM 11.   |  | EXECUTIVE COMPENSATION                                                                                           |  | 78  
|ITEM 12.   |  | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS                   |  | 78  
|ITEM 13.   |  | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE                                        |  | 78  
|ITEM 14.   |  | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                                                           |  | 78  
|          
|PART IV   
|           |  |                                                                                                                 
|ITEM 15.   |  | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES                                                                       |  | 79  
|           | 
|SIGNATURES |  | 85                                                                                                              



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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 1A 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, 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 IT and Business Process Outsourcing (BPO) has emerged as a global trend in numerous
countries and industries. Our clients recognize that offshore outsourcing is an effective way to provide high quality and cost-effective IT and BPO services.

The Company does not sell, lease or otherwise market any computer software or hardware and 100% of the Companys revenues are derived from the sale of information technology and BPO services. IT services which we
deliver using our offshore centers include software application development services and maintenance, implementation and support of enterprise application 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.

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



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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 U.S. labor and infrastructure costs.

The iGATE Professional Services (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 and PeopleSoft.

Business Developments

During the fourth quarter of 2006, iGATE Global Solutions Limited (iGS), our majority-owned Indian subsidiary extended its Global Preferred
Partnership status with General Electric Company (GE) through the end of 2009.

On April 24, 2006, iGS entered into a
Master Services Agreement with LoanPro, LLC (LoanPro) to perform offshore mortgage servicing. In conjunction with this agreement, iGS acquired a 5% ownership interest in LoanPro for a nominal amount with the option to acquire up to an
additional 55% of LoanPro beginning on July 1, 2006. iGS exercised this option on July 1, 2006 and acquired the additional 55% of LoanPro. In the third quarter of 2006, iGS consolidated LoanPros operations into the iGATE Solutions
segment. iGS has loaned $1.1 million to LoanPro as of February 28, 2007. The loan pays 6% interest and is due in 2009.

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 segment reporting in 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. The terms on-site and offshore will be used during our discussions of iGATE Solutions operations in our MD&A. Onsite refers to work performed in the U.S. for our clients. Offshore refers to worked
performed in India for our clients. The ratio of onsite/offshore work performed has a significant impact on iGATE Solutions profitability. Our iGATE Solutions segment is more profitable when a higher percentage of work is performed in India
(offshore), due to lower labor costs. This delivery model helps clients achieve greater cost effectiveness. The operations of iGS are included in the iGATE Solutions Segment.

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 in several 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



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delivery of finance and accounting functions such as accounts payable which can be performed for clients across all industries.

iGATE Solutions has offshore development centers (ODCs) located in Bangalore, Hyderabad, Chennai, Delhi, and Pune, India. 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 iGS. Our iGATE Solutions segment has approximately 5,820 employees.

The majority of our clients in the iGATE Solutions segment have headquarters in the U.S. and operate internationally. The operations of
iGS are included in the iGATE Solutions segment.

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 GE which accounted for 30%, 35% and
37% of its revenues for the years ended December 31, 2006, 2005 and 2004, respectively. iGS recently renewed its Global Preferred Partnership status with GE through 2009.

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 CRM software provided by third party vendors such as SAP, Oracle and PeopleSoft.

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. The segments largest customers are TEKsystems, Inc. and
International Business Machine Corporation (IBM) which account for approximately 13% and 11% of iPS revenues in 2006. The segments largest customers in 2005 and 2004 were IBM and Wachovia Bank, which accounted for approximately 22%
and 11% of iPS revenues in 2005 compared to 23% and 13% in 2004. iPS has approximately 1,000 employees.

iGATE Shared Services (formerly
iGATE Corporate)

The iGATE Shared Services segment includes the operations iGATE Clinical Research International Inc.,
formerly known as iGATE Clinical Research Management, Inc., iGATE Clinical Research International Private Ltd., corporate and other unallocated costs. iGATE Clinical Research International Inc. and iGATE Clinical Research International Private Ltd.
contract with pharmaceutical companies to conduct offshore clinical trials on



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their behalf. These entities are excluded from the above segments due largely to their dissimilar service offerings and certain economic characteristics.
This segment has approximately 80 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 and loss on venture investments and affiliated companies. 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. 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, 2007 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                       | %
|jobcurry Systems Private, Ltd.                        |  | iGATE Professional Services |  | Worldwide recruiting                                    |  | 100                       | %
|iGATE Clinical Research International Private Limited |  | iGATE Shared Services       |  | Offshore clinical research                              |  | 95                        | %
|iGATE Clinical Research International Inc.            |  | iGATE Shared Services       |  | Clinical ResearchU.S.                                  |  | 100                       | %
|iGS www.igate.com                                     |  | iGATE Solutions             |  | Offshore outsourcing services                           |  | 81.8                      | %
|Symphoni Interactive, LLC                             |  | iGATE Solutions             |  | Application development for financial services industry |  | 81.8                      | %
|Quintant(1)                                           |  | iGATE Solutions             |  | Offshore business services provisioning                 |  | 81.8                      | %
|AquaRegia Ltd.(1)                                     |  | iGATE Solutions             |  | Offshore enterprise application services                |  | 81.8                      | %
|CIBER India Pvt. Ltd.(1)                              |  | iGATE Solutions             |  | Software services and IT outsourcing                    |  | 81.8                      | %
|LoanPro(1)                                            |  | iGATE Solutions             |  | Mortgage processing services                            |  | 49                        | %
|Software AG (India) Private Ltd.(1)                   |  | iGATE Solutions             |  | Application development and professional services       |  | 41                        | %

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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 to the Consolidated Financial Statements.

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.



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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 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 and restricted stock grants 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, 2006, iGATE (including its operating subsidiaries) had approximately 6,900 non-unionized employees comprised of approximately 6,280
IT professionals (including subcontractors) and approximately 620 individuals working in sales, recruiting, general and administrative roles. As of December 31, 2006, approximately 39% 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

In 2003, we 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 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.



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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 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, 2006, approximately 39% 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 99% 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,



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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.

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

On September 14, 2006 we renewed our $35.0 million unsecured 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



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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 $100 million. In addition, the PNC Facility requires that we maintain an aggregate of $35 million in domestic cash and cash
equivalents at all times during the term of the PNC Facility and maintain a liquidity ratio of not less than 1.5 to 1.0. The liquidity ratio is the sum of domestic cash and accounts receivable divided by total liabilities. iGS cannot borrow funds
under the PNC Facility.

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,



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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.

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 $11 million as of December 31, 2006. 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 $1.4 million as of December 31, 2006. 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, 2006, approximately 85% of our revenues were derived from North America. 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 38%, 42% and 46% of revenues for the years ended December 31, 2006, 2005 and 2004, respectively. In the years ended December 31, 2006,
2005 and 2004, GE accounted for 18%, 18% and 19% 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.



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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 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 any 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.



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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;
| | - |  | --------------------------------------



| |  |  | 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, 2006 is set forth below:



|                         |  |                           |  |                                                                                          |  |                           
|------------------------ |  | ------------------------- |  | ---------------------------------------------------------------------------------------- |  | --------------------------
|Location                 |  | Segment                   |  | Principal Use                                                                            |  | Approximate Square Footage
|Pittsburgh, Pennsylvania |  | iGATE SharedServices /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                                    |  | 334,000                   
|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 98,000 square feet of office space in the Indian cities of Bangalore, Chennai
and Mumbia from the principal shareholders of iGATE. Refer to Related Party Transactions Note 18 to notes to Consolidated 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 Contingencies 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 2006.



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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
|2006           |  |      |      |     |   |     
|First Quarter  |  | $    | 6.72 |     | $ | 4.70
|Second Quarter |  |      | 7.25 |     |   | 5.63
|Third Quarter  |  |      | 6.16 |     |   | 3.74
|Fourth Quarter |  | $    | 6.89 |     | $ | 4.97
|               |  |     
|2005           |  |      |      |     |   |     
|First Quarter  |  | $    | 4.63 |     | $ | 3.66
|Second Quarter |  |      | 4.41 |     |   | 3.46
|Third Quarter  |  |      | 4.08 |     |   | 3.44
|Fourth Quarter |  | $    | 5.01 |     | $ | 3.50

On February 28, 2007, we had 155 registered holders of record of our Common Stock.

We are prohibited from paying dividends under the PNC Facility. See Credit Facilities 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,               |        
|                                                                    |  | 2006                                  |         |   | 2005 |   |         | 2004 |  |   | 2003    |   |  | 2002 |        
|                                                                    |  | (in thousands, except per share data) |        
|Income Statement Data(1):                                           |  |                                       |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Revenues(2)                                                         |  | $                                     | 283,588 |   |      | $ | 275,992 |      |  | $ | 264,585 |   |  | $    | 240,634 |   |  | $ | 250,851 |  
|Gross margin(3)                                                     |  |                                       | 73,376  |   |      |   | 70,882  |      |  |   | 67,008  |   |  |      | 68,980  |   |  |   | 77,604  |  
|Gain on sale of land                                                |  |                                       |        |   |      |   |        |      |  |   | (3,615  | ) |  |      |        |   |  |   |        |  
|Restructuring (recovery) charges(4)                                 |  |                                       | (3,062  | ) |      |   | (481    | )    |  |   | 5,805   |   |  |      | 604     |   |  |   | 4,232   |  
|Goodwill impairment(5)                                              |  |                                       |        |   |      |   |        |      |  |   |        |   |  |      |        |   |  |   | 25,964  |  
|Income (loss) from operations                                       |  |                                       | 6,818   |   |      |   | 3,880   |      |  |   | (17,261 | ) |  |      | (4,560  | ) |  |   | (25,036 | )
|Other income (expense), net                                         |  |                                       | 3,992   |   |      |   | (275    | )    |  |   | 1,374   |   |  |      | 1,560   |   |  |   | 1,463   |  
|Equity in income (losses) of affiliated companies                   |  |                                       | 317     |   |      |   | 338     |      |  |   | (335    | ) |  |      | (99     | ) |  |   |        |  
|Minority interest                                                   |  |                                       | (752    | ) |      |   | (261    | )    |  |   | (677    | ) |  |      | (312    | ) |  |   | (441    | )
|Gain on deconsolidation of subsidiary                               |  |                                       |        |   |      |   |        |      |  |   |        |   |  |      |        |   |  |   | 7,086   |  
|Gain on sale of stock of subsidiary                                 |  |                                       |        |   |      |   | 5,549   |      |  |   |        |   |  |      |        |   |  |   |        |  
|Gain (loss) on venture investments and affiliated companies, net(6) |  |                                       | 578     |   |      |   | (2,149  | )    |  |   |        |   |  |      | (28     | ) |  |   | (7,610  | )
|Income (loss) before income taxes                                   |  |                                       | 10,953  |   |      |   | 7,082   |      |  |   | (16,899 | ) |  |      | (3,439  | ) |  |   | (24,538 | )
|Income tax provision (benefit)                                      |  |                                       | 2,249   |   |      |   | 113     |      |  |   | 5,130   |   |  |      | 2,179   |   |  |   | (339    | )
|                                                                    |  |                                       |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Income (loss) from continuing operations                            |  |                                       | 8,704   |   |      |   | 6,969   |      |  |   | (22,029 | ) |  |      | (5,618  | ) |  |   | (24,199 | )
|Income (loss) from discontinued operations, net of income taxes(1)  |  |                                       |        |   |      |   |        |      |  |   | 3,818   |   |  |      | (3,402  | ) |  |   | (3,292  | )
|                                                                    |  |                                       |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Net income (loss)                                                   |  | $                                     | 8,704   |   |      | $ | 6,969   |      |  | $ | (18,211 | ) |  | $    | (9,020  | ) |  | $ | (27,491 | )
|                                                                    |  |                                       |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Earnings (loss) from continuing operations per share                |  |                                       | 0.16    |   |      |   | 0.13    |      |  |   | (0.42   | ) |  |      | (0.11   | ) |  |   | (0.47   | )
|Earnings (loss) from discontinued operations per share              |  |                                       |        |   |      |   |        |      |  |   | 0.07    |   |  |      | (0.07   | ) |  |   | (0.06   | )
|                                                                    |  |                                       |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Net earnings (loss) per common share, basic and diluted             |  | $                                     | 0.16    |   |      | $ | 0.13    |      |  | $ | (0.35   | ) |  | $    | (0.17   | ) |  | $ | (0.54   | )
|                                                                    |  |                                       |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Weighted average common shares, basic                               |  |                                       | 52,939  |   |      |   | 52,530  |      |  |   | 52,721  |   |  |      | 51,697  |   |  |   | 51,304  |  
|                                                                    |  |                                       |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Weighted average common shares, diluted                             |  |                                       | 53,278  |   |      |   | 52,734  |      |  |   | 52,721  |   |  |      | 51,697  |   |  |   | 51,304  |  
|                                                                    |  |                                       |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Balance Sheet Data:                                                 |  |                                       |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Cash and cash equivalents                                           |  | $                                     | 52,154  |   |      | $ | 45,837  |      |  | $ | 28,201  |   |  | $    | 36,133  |   |  | $ | 56,793  |  
|Short-term investments                                              |  |                                       | 31,826  |   |      |   | 30,798  |      |  |   | 35,863  |   |  |      | 39,582  |   |  |   | 51,188  |  
|Working capital(7)                                                  |  |                                       | 113,387 |   |      |   | 102,327 |      |  |   | 93,846  |   |  |      | 101,293 |   |  |   | 116,184 |  
|Total assets                                                        |  |                                       | 190,774 |   |      |   | 177,474 |      |  |   | 180,232 |   |  |      | 180,940 |   |  |   | 188,940 |  
|Total shareholders equity                                          |  | $                                     | 133,351 |   |      | $ | 117,672 |      |  | $ | 111,700 |   |  | $    | 122,135 |   |  | $ | 117,149 |  

---

|(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, dispositions are presented as discontinued operations, net of applicable statutory taxes.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(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.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Effective January 1, 2003, we began to classify costs for consultants not being utilized (i.e. bench costs) as cost of revenues. In the prior year,
these costs were classified as selling, general and administrative
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | (S,G&A) costs. The prior period was reclassified to reflect the changes to our segment reporting and our classification of bench costs.
| | -----------------------------------------------------------------------------------------------------------------------------------------

|(4) | In 2006, we reversed $0.6 million of our 2001 restructuring reserve. In 2006, we also reversed $2.5 million of our 2004 restructuring reserve related to our United Kingdom
operation. 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.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(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.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) | In 2006, we sold our investment in Brainbench for $0.6 million. 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 year ended 2002 included the impairment charges of various venture and other investments in the amount of $7.6 million.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | Working capital represents current assets less current liabilities.
|--- | -------------------------------------------------------------------



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|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.

The Company does not sell, lease or
otherwise market any computer software or hardware and 100% of the Companys revenues are derived from the sale of information technology and BPO services. 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 services and applications maintenance
outsourcing.

Critical Accounting Policies

The following explains our most critical accounting policies. See Note 1 to our Consolidated Financial Statements set forth on pages 45 to 51 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. The Company follows this revenue recognition method for fixed-price contracts because there
is a direct and consistent relationship between the service patterns and services provided to the customer and the direct costs incurred to provide such services. If our cost 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 large 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.



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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 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 Income (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).

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 2006 or 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



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transactions or a combination thereof. For further discussions, see Note 5 to our Consolidated Financial Statements.

Stock Based Compensation

We
recognize compensation expense for all stock-based awards, using a fair value approach as prescribed in SFAS No. 123R Share Based Payments. The impact of the adoption is more fully described in Note 11 to our Consolidated Financial
Statements.

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.

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 Shared Services for the Year Ended
December 31, 2006 as Compared to the Year Ended December 31, 2005:



|                                                          |  |                              |         |   |                             |   |         |                         |  |   |         |   |  |   |         |  
|--------------------------------------------------------- |  | ---------------------------- | ------- | - | --------------------------- | - | ------- | ----------------------- |  | - | ------- | - |  | - | ------- | -
|                                                          |  | Year Ended December 31, 2006 |        
|                                                          |  | iGATESolutions               |         |   | iGATEProfessionalServices   |   |         | iGATESharedServices(1)  |  |   | Total   |  
|                                                          |  | (Dollars in thousands)       |        
|External revenues                                         |  | $                            | 169,570 |   |                             | $ | 112,476 |                         |  | $ | 1,542   |   |  | $ | 283,588 |  
|Cost of revenues                                          |  |                              | 122,694 |   |                             |   | 86,594  |                         |  |   | 924     |   |  |   | 210,212 |  
|                                                          |  |                              |         |   |                             |   |         |                         |  |   |         |   |  |   |         |  
|Gross margin                                              |  |                              | 46,876  |   |                             |   | 25,882  |                         |  |   | 618     |   |  |   | 73,376  |  
|Selling, general and administrative                       |  |                              | 42,587  |   |                             |   | 16,459  |                         |  |   | 10,574  |   |  |   | 69,620  |  
|Restructuring recovery                                    |  |                              | (2,507  | ) |                             |   | (555    | )                       |  |   |        |   |  |   | (3,062  | )
|                                                          |  |                              |         |   |                             |   |         |                         |  |   |         |   |  |   |         |  
|Income (loss) from operations                             |  | $                            | 6,796   |   |                             | $ | 9,978   |                         |  | $ | (9,956  | ) |  | $ | 6,818   |  
|                                                          |  |                              |         |   |                             |   |         |                         |  |   |         |   |  |   |         |  
|Other income, net                                         |  |                              |         |   |                             |   |         |                         |  |   | 3,992   |   |  |   | 3,992   |  
|Minority interest                                         |  |                              |         |   |                             |   |         |                         |  |   | (752    | ) |  |   | (752    | )
|Gain on venture investments and affiliated companies      |  |                              |         |   |                             |   |         |                         |  |   | 578     |   |  |   | 578     |  
|Equity in income of affiliated companies                  |  |                              |         |   |                             |   |         |                         |  |   | 317     |   |  |   | 317     |  
|                                                          |  |                              |         |   |                             |   |         |                         |  |   |         |   |  |   |         |  
|(Loss) income before income taxes                         |  |                              |         |   |                             |   |         |                         |  | $ | (5,821  | ) |  | $ | 10,953  |  
|                                                          |  |                              |         |   |                             |   |         |                         |  |   |         |   |  |   |         |  
|                                                          | 
|                                                          |  | Year Ended December 31, 2005 |        
|                                                          |  | iGATE Solutions              |         |   | iGATE Professional Services |   |         | iGATE SharedServices(1) |  |   | Total   |  
|                                                          |  | (Dollars in thousands)       |        
|External revenues                                         |  | $                            | 138,032 |   |                             | $ | 136,775 |                         |  | $ | 1,185   |   |  | $ | 275,992 |  
|Cost of revenues                                          |  |                              | 97,108  |   |                             |   | 107,354 |                         |  |   | 648     |   |  |   | 205,110 |  
|                                                          |  |                              |         |   |                             |   |         |                         |  |   |         |   |  |   |         |  
|Gross margin                                              |  |                              | 40,924  |   |                             |   | 29,421  |                         |  |   | 537     |   |  |   | 70,882  |  
|Selling, general and administrative                       |  |                              | 38,948  |   |                             |   | 17,173  |                         |  |   | 11,362  |   |  |   | 67,483  |  
|Restructuring recovery                                    |  |                              |        |   |                             |   | (481    | )                       |  |   |        |   |  |   | (481    | )
|                                                          |  |                              |         |   |                             |   |         |                         |  |   |         |   |  |   |         |  
|Income (loss) from operations                             |  | $                            | 1,976   |   |                             | $ | 12,729  |                         |  | $ | (10,825 | ) |  | $ | 3,880   |  
|                                                          |  |                              |         |   |                             |   |         |                         |  |   |         |   |  |   |         |  
|Other expense, net                                        |  |                              |         |   |                             |   |         |                         |  |   | (275    | ) |  |   | (275    | )
|Minority interest                                         |  |                              |         |   |                             |   |         |                         |  |   | (261    | ) |  |   | (261    | )
|Gain on sale of stock of subsidiary                       |  |                              |         |   |                             |   |         |                         |  |   | 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                         |  |                              |         |   |                             |   |         |                         |  | $ | (7,623  | ) |  | $ | 7,082   |  
|                                                          |  |                              |         |   |                             |   |         |                         |  |   |         |   |  |   |         |  

---

|(1) | Shared Services 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.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Results of Operations of our Operating Segments: iGATE Solutions, iPS and iGATE Shared Services for the Year ended December 31, 2006
as Compared to the Year ended December 31, 2005:

Effective January 1, 2006, we recast our segments to include the operations
of jobcurry Ltd. as part of the iGATE Professional Services segment due to their service offerings being more consistent with those offered by



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iGate Professional Services. Previously, jobcurry Ltd. was included in the iGATE Shared Services segment. All prior periods have been reclassified to reflect
the change to our segment reporting.

iGATE Solutions

Revenues for iGATE Solutions for the year ended December 31, 2006 were $169.6 million, an increase of $31.6 million or 22.8%, as compared to $138.0 million for the year ended December 31, 2005. Our revenue
increase is directly attributable to a combination of new customer wins and increased business with our recurring customers. Our onsite/offshore ratio improved as our customers continue to move portions of the work previously done in the U.S. to
India, resulting in increases in billable hours in India. Our acquisition of LoanPro contributed $1.2 million to our total revenues for the year ended December 31, 2006.

The gross margin as a percentage of sales (gross margin percentage) for iGATE Solutions was 27.6% for the year ended December 31, 2006,
as compared to 29.6% for the year ended December 31, 2005. The decrease in our gross margins was due to annual employee salary increases for iGS employees that occurred during the year both in India and the U.S. and approximately $1.8 million
of stock compensation expense incurred in conjunction with our adoption of SFAS 123(R). Direct costs associated with our acquisition of LoanPro totaled $1.9 million for the year ended December 31, 2006, which also negatively impacted our
gross margins.

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 employee costs, corporate costs and facilities costs. Employee costs include administrative salaries and related employee benefits, travel, recruiting
and training costs. During the year ended December 31, 2006 we also recorded stock based compensation expense incurred as a result of our adoption of SFAS 123(R), which is included in employee costs. Corporate costs include costs such as
legal, accounting and outside consulting fees. Facilities costs include rent, depreciation, amortization of intangible assets related to prior year acquisitions and communications costs. S,G&A costs for the year ended December 31, 2006 were
$42.6 million or 25.1% of revenues, as compared to $38.9 million or 28.2% of revenues for the year ended December 31, 2005. Our acquisition of LoanPro contributed $0.6 million of S,G&A costs during the year ended December 31, 2006.

Our net employee cost increased approximately $1.8 million for the year ended December 31, 2006 as compared to the year ended
December 31, 2005, mainly due to annual salary increases, other employee related costs and stock based compensation expense related to our adoption of SFAS 123(R). Our net corporate cost increased approximately $1.4 million for the year ended
December 31, 2006 due to increases in bad debt expense and legal and accounting costs. Our net facilities costs increased $0.5 million mainly due to increases in depreciation and non-capital equipment expenditures on our new campus in
Whitefield and increases in rent expense.

During the year, we recovered $2.5 million of restructuring costs originally recorded in 2004
that relate to an office lease in the UK. We were able to obtain a tenant to assume the UK lease through a sublease agreement. These recovered costs were not considered as part of our discussion of S,G&A costs.

Operating income percentage was 4.0% for the year ended December 31, 2006 and 1.4% for the year ended December 31, 2005 as increases in
revenues as well as our restructuring recovery in 2006 were somewhat offset by decreases in gross margins.

iGATE Professional Services
(iPS)

Revenues for iPS for the year ended December 31, 2006 were $112.5 million, a decrease of $24.3 million or 18.0%,
as compared to $136.8 million for the year ended December 31, 2005. iPS sold its Canadian staffing operations in November 2005. The Canadian staffing operations sales for the year ended December 31, 2005 were $29.0 million. For
comparative purposes, iPS revenues for the year of 2006, without the impact of the



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Canadian staffing operations for the year of 2005, would have increased $4.7 million as overall demand for our staffing services has remained consistent for
the periods presented.

Gross margin percentage for iPS was 23.0% for the year ended December 31, 2006, as compared to 21.5% for the
year ended December 31, 2005. For comparative purposes, iPS gross margin percentage for the year ended December 31, 2005, without the impact of the Canadian staffing operations would have been 22.0%. The contributing factors to the
increased margin were savings in business travel and higher utilization of salaried employees versus subcontracted labor.

S,G&A
include all costs that are not directly associated with our iPS segments revenue generating consultants. S,G&A expenses include employee costs, corporate costs and facilities costs. Employee costs include administrative salaries and
related employee benefits, travel, recruiting and training costs. During the year ended December 31, 2006 we also recorded stock based compensation expense incurred as a result of our adoption of SFAS 123(R), which is also included in employee
costs. Corporate costs include costs such as legal, accounting and outside consulting fees. Facilities costs include rent, depreciation and amortization of intangible assets related to prior year acquisitions and communications costs. S,G&A
costs for the year ended December 31, 2006 were $15.9 million or 14.1% of revenues, as compared to $16.7 million or 12.2% of revenues for the year ended December 31, 2005. For the year ended December 31, 2005 the impact of the
Canadian staffing operations consisted of employee costs of $3.5 million and facilities costs of $0.6 million.

Our net employee cost
without the $3.5 million impact of costs of the Canadian staffing operations in 2005 increased approximately $1.9 million for the year ended December 31, 2006 mainly due to increases in temporary help and stock based compensation expense
incurred related to our adoption of SFAS 123(R). Our net corporate costs increased $0.8 million for the year ended December 31, 2006. The increase was due primarily to a $1.1 million reserve established for a contingent liability wage dispute
regarding the payment of overtime compensation on one specific project. These costs were offset primarily by the recovered restructuring costs which are discussed below. Our facilities costs without the $0.3 million impact of costs of the Canadian
staffing operations in 2005 increased $0.2 million for the year ended December 31, 2006, due to increases in depreciation and communications costs.

During the years ended December 31, 2006 and 2005, we recovered $0.6 million and $0.5 million, respectively, of restructuring costs that were recorded in prior years. The 2006 amount was a result of a bankruptcy
settlement and the amount for 2005 was due to the sale of our Canadian staffing operation. These recovered costs were not considered as part of our discussion of S,G&A costs.

Operating income percentage was 8.9% for the year ended December 31, 2006 and 9.3% for the year ended December 31, 2005. The Canadian staffing
operations contributed approximately 1.4% of operating income for the year ended December 31, 2005. Operating income percentage decreased mainly due to decreases in overall revenues.

iGATE Shared Services (formerly iGATE Corporate)

Revenues for iGATE Shared Services for the year ended December 31, 2006 were $1.5 million, an increase of $0.4 million from revenues of $1.1 million for the comparable year ended December 31, 2005. This
increase in revenue over the comparable period was due to increases in clinical studies in iGATE Clinical Research International (ICRI).

Gross margin percentage was 40.1% for the year ended December 31, 2006, as compared to 45.3% for the year ended December 31, 2005. Direct costs increased in anticipation of increased clinical studies. Delays
in these studies negatively impacted our gross margin percentage.



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S,G&A costs were $10.6 million for the year ended December 31, 2006, as compared to $11.3
million for the year ended December 31, 2005. Our S,G&A costs decreased mainly due to lower accounting and legal costs in 2006 due to a more efficient compliance effort related to Section 404 of the Sarbanes-Oxley Act. ICRIs
S,G&A expenses increased $0.5 million in 2006 mainly due to employee and salary related costs. These increases were offset by $1.2 million of decreased costs mainly due to lower accounting and legal costs in 2006 as a result of a more efficient
compliance effort related to Section 404 of the Sarbanes-Oxley Act.

Other Income (Expense) Components

Other income, net for the year ended December 31, 2006, totaled $4.1 million, compared to $3.2 million for the year ended December 31, 2005. The
following paragraphs discuss significant components of other income (expense) and changes within each of the years presented.

In 2006, our
net interest income totaled $3.2 million as compared to $1.9 million for 2005. The increase was due to increased investment yields as well as increases in invested cash during 2006 as our cash flows increased during 2006, allowing us to invest
additional cash. In 2006, we recognized $0.5 million of unfavorable foreign currency translation losses related to our intercompany debt with India which was offset by $1.2 million of favorable mark to market recoveries on our ineffective hedges. In
2005, we recognized $0.5 million of unfavorable foreign currency translation losses related to our intercompany debt with India and $1.2 million of unfavorable mark to market losses on our ineffective hedges. Currently, our hedging activities do not
meet the minimum requirements for effective hedge accounting treatment under current accounting rules. As a result, we must recognize any unrealized gains or losses as current period income or loss. In 2005, we recognized miscellaneous expense of
$0.3 million and had no significant miscellaneous expense in 2006.

In 2006, we sold our investment in Brainbench for $0.6 million. Also in
2006, we recognized an additional $0.3 million of gain related to the sale of our Canadian operations as certain working capital estimates made as part of the original sales price were finalized. In 2005, we recognized a $5.5 million gain related to
the sale of our Canadian operations.

In 2005, we recorded an impairment charge of 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 Gain /loss) on Venture Investments and Affiliated Companies in the Consolidated Statement of Operations.

We recognized income on affiliated companies of $0.3 million for the year ended December 31, 2006 as compared to $0.3 million for the
year ended December 31, 2005. All activity in 2006 was related to our investment in the Software AG joint venture. Our activity for the year ended December 31, 2005 was related to our investments in the CIBER and Software AG joint
ventures. We acquired majority ownership of the CIBER joint venture in November 2005.

Minority interest expense was $0.8 million for the
year ended December 31, 2006 and relates to the minority interest portion of the income of iGS. Minority interest expense was $0.3 million for the year ended December 31, 2005 also related to the income of iGS.

Income Taxes

Federal income taxes calculated at the
U.S. statutory rate were $3.8 million for 2006. State income taxes which totaled $0.3 million for 2006 were calculated using a blended statutory rate, and are net of federal income tax benefit. Our income tax provision was $ 2.3 million at an
effective rate of 20.5% for the year ended December 30, 2006.

Several items caused variations from our statutory tax provision. iGS
is eligible to claim a tax holiday on the majority of its operating income through 2009. The tax holiday resulted in a benefit of $2.7 million for the year ended December 31, 2006. iGSs non-operating income, such as interest income, is
not included in the tax holiday, and has been considered as part of our income tax provision.



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Other variations typically arise because certain expenses or benefits recorded to our financial
statements are either limited or disallowed when calculating our income tax provision. Amortization expense in the amount of $0.1 million related to our prior acquisitions was not deducted when calculating our income tax provision. Also, certain
expenses such as meals and entertainment and executive compensation are limited for income tax purposes. Other expenses such as minority interest expense are not deductible at all. Approximately $0.5 million of these expenses were not deducted when
calculating our income tax provision. In addition to the limited or disallowed items discussed above, the tax provision was favorably impacted by the utilization of UK net operating losses not recognized previously, and by valuation allowances
provided against certain deductions for which the recognition of the corresponding tax benefit is unlikely. The utilization of the UK net operating losses resulted in a direct tax benefit approximating $0.9 million. The deductions offset by
valuation allowances include net operating losses realized by the U.S. Branch operations of iGATE Global Solutions Limited, capital losses realized from the disposition of certain subsidiary and equity investments, and accruals for deferred
compensation. The aggregate impact of these other variations on the Companys effective tax rate was an unfavorable $1.1 million.

Federal income taxes calculated at the U.S. statutory rate were $2.5 million for 2005. State income taxes which totaled $0.2 million for 2005 were calculated using a blended statutory rate, and are net of federal income tax benefit. Our
income tax provision was $0.1 million at an effective rate of 1.6% for the year ended December 30, 2005.

Several items caused
variations from our statutory income tax provision. iGS is eligible to claim a tax holiday on the majority of its operating income through 2009. During the year ended December 31, 2005, iGSs tax provisions totaled $0.7 million, mainly due
to tax expense calculated on non-operating income items. iGSs non-operating income, such as interest income and a gain on the sale of land, is not included in the tax holiday, and has been considered as part of our income tax provision.

In addition, on April 11, 2005, the Joint Committee on Taxation advised that the Internal Revenue Service examination of our income
tax returns for the years 1999, 2000 and 2001 has been completed, which resulted in a $2.2 million income tax benefit recognized for the year ended December 31, 2005. We also recognized an income tax benefit in the amount of $6.9 million due to
our ability to utilize capital losses that were recorded in prior years. Other variations typically arise because certain expenses or benefits recorded to our financial statements are either limited or disallowed when calculating our tax provision.
Amortization expense in the amount of $0.1 million related to our prior acquisitions was not deducted when calculating our income tax provision. Also, certain expenses such as meals and entertainment and executive compensation are limited for income
tax purposes. Approximately $0.9 million of these expenses were not deducted when calculating our income tax provision. In addition to the limited or disallowed items discussed above, valuation allowances have been provided against certain
deductions for which the recognition of the corresponding tax benefit is unlikely. These deductions include net operating losses realized by the U.S. Branch operations of iGATE Global Solutions Limited, capital losses realized from the disposition
of certain subsidiary and equity investments, and accruals for deferred compensation. The aggregate impact of these variations on the Companys effective tax rate was an unfavorable $4.8 million.



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

Effective April 1, 2004, we recast our segments to
include the operations of Global Financial Services, Inc. (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, 2005 |        
|                                                          |  | iGATE Solutions              |         |   | iGATE Professional Services |   |         | iGATE SharedServices(1) |  |   | Total   |  
|                                                          |  | (Dollars in thousands)       |        
|External revenues                                         |  | $                            | 138,032 |   |                             | $ | 136,775 |                         |  | $ | 1,185   |   |  | $ | 275,992 |  
|Cost of revenues                                          |  |                              | 97,108  |   |                             |   | 107,354 |                         |  |   | 648     |   |  |   | 205,110 |  
|                                                          |  |                              |         |   |                             |   |         |                         |  |   |         |   |  |   |         |  
|Gross margin                                              |  |                              | 40,924  |   |                             |   | 29,421  |                         |  |   | 537     |   |  |   | 70,882  |  
|Selling, general and administrative                       |  |                              | 38,948  |   |                             |   | 17,173  |                         |  |   | 11,362  |   |  |   | 67,483  |  
|Restructuring recovery                                    |  |                              |        |   |                             |   | (481    | )                       |  |   |        |   |  |   | (481    | )
|                                                          |  |                              |         |   |                             |   |         |                         |  |   |         |   |  |   |         |  
|Income (loss) from operations                             |  | $                            | 1,976   |   |                             | $ | 12,729  |                         |  | $ | (10,825 | ) |  | $ | 3,880   |  
|                                                          |  |                              |         |   |                             |   |         |                         |  |   |         |   |  |   |         |  
|Other expense, net                                        |  |                              |         |   |                             |   |         |                         |  |   | (275    | ) |  |   | (275    | )
|Minority interest                                         |  |                              |         |   |                             |   |         |                         |  |   | (261    | ) |  |   | (261    | )
|Gain on sale of stock of subsidiary                       |  |                              |         |   |                             |   |         |                         |  |   | 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                         |  |                              |         |   |                             |   |         |                         |  | $ | (7,623  | ) |  | $ | 7,082   |  
|                                                          |  |                              |         |   |                             |   |         |                         |  |   |         |   |  |   |         |  
|                                                          | 
|                                                          |  | Year Ended December 31, 2004 |        
|                                                          |  | iGATE Solutions              |         |   | iGATE Professional Services |   |         | iGATE SharedServices(1) |  |   | Total   |  
|                                                          |  | (Dollars in thousands)       |        
|External revenues                                         |  | $                            | 131,484 |   |                             | $ | 132,439 |                         |  | $ | 662     |   |  | $ | 264,585 |  
|Cost of revenues                                          |  |                              | 92,329  |   |                             |   | 104,637 |                         |  |   | 611     |   |  |   | 197,577 |  
|                                                          |  |                              |         |   |                             |   |         |                         |  |   |         |   |  |   |         |  
|Gross margin                                              |  |                              | 39,155  |   |                             |   | 27,802  |                         |  |   | 51      |   |  |   | 67,008  |  
|Selling, general and administrative                       |  |                              | 55,197  |   |                             |   | 17,601  |                         |  |   | 9,281   |   |  |   | 82,079  |  
|Gain on sale of land                                      |  |                              | (3,615  | ) |                             |   |        |                         |  |   |        |   |  |   | (3,615  | )
|Restructuring charges                                     |  |                              | 4,896   |   |                             |   | 909     |                         |  |   |        |   |  |   | 5,805   |  
|                                                          |  |                              |         |   |                             |   |         |                         |  |   |         |   |  |   |         |  
|(Loss) income from operations                             |  | $                            | (17,323 | ) |                             | $ | 9,292   |                         |  | $ | (9,230  | ) |  | $ | (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                                  |  |                              |         |   |                             |   |         |                         |  | $ | (8,868  | ) |  | $ | (16,899 | )
|                                                          |  |                              |         |   |                             |   |         |                         |  |   |         |   |  |   |         |  

---

|(1) | Shared Services 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, 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 was directly attributable to a combination of new customer wins and increased business with our recurring customers. Our customers continued 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 added approximately 1,000 offshore consultants. In addition, we were also 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 was
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.

iGATE Professional
Services (iPS)

Revenues for iPS for the year ended December 31, 2005 were $136.8 million, an increase of $4.4 million
or 3.3%, as compared to $132.4 million for the year ended December 31, 2004. Overall demand for our staffing services increased for the period as we continued to see favorable trends in the IT services market.

Gross margin percentage for iPS was 21.5% for the year ended December 31, 2005, as compared to 21.0% 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.



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S,G&A costs for the year ended December 31, 2005 were $17.2 million or 12.6% of revenues, as
compared to $17.6 million or 13.3% 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 procedures. 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 continued 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 9.3% 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 Shared Services (formerly iGATE Corporate)

Revenues for iGATE Shared Services for the year ended December 31, 2005 were $1.2 million, an increase of $0.5 million from
revenues of $0.7 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 ICRI.

Gross margin percentage was 45.3% for the year ended December 31, 2005, as compared to 7.7% for the year ended December 31, 2004. Increases in
the revenues for ICRI positively impacted our gross margin percentage, as direct costs remained consistent for each period presented.

S,G&A costs were $11.4 million for the year ended December 31, 2005, as compared to $9.3 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 ICRI. Minority interest expense
was $0.7 million for the year ended December 31, 2004 and included the income of iGS and the losses of ICRI.



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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 Gain (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.

Income Taxes

Federal income taxes calculated at the
U.S. statutory rate were $2.5 million for 2005. State income taxes which totaled $0.2 million for 2005 were calculated using a blended statutory rate, and are net of federal income tax benefit. Our income tax provision was $0.1 million at an
effective rate of 1.6% for the year ended December 30, 2005.

Several items caused variations from our statutory income tax provision.
iGS is eligible to claim a tax holiday on the majority of its operating income through 2009. During the year ended December 31, 2005, iGSs tax provisions totaled $0.7 million, mainly due to tax expense calculated on non-operating income
items. iGSs non-operating income, such as interest income and a gain on the sale of land, is not included in the tax holiday, and has been considered as part of our income tax provision.

In addition, on April 11, 2005, the Joint Committee on Taxation advised that the Internal Revenue Service examination of our income tax returns for
the years 1999, 2000 and 2001 has been completed, which resulted in a $2.2 million income tax benefit recognized for the year ended December 31, 2005. We also recognized an income tax benefit in the amount of $6.9 million due to our ability to
utilize capital losses that were recorded in prior years. Other variations typically arise because certain expenses or benefits recorded to our financial statements are either limited or disallowed when calculating our tax provision. Amortization
expense in the amount of $0.1 million related to our prior acquisitions was not deducted when calculating our income tax provision. Also, certain expenses such as meals and entertainment and executive compensation are limited for income tax
purposes. Approximately $0.9 million of these expenses were not deducted when calculating our income tax provision. In addition to the limited or disallowed items discussed above, valuation allowances have been provided against certain deductions
for which the recognition of the corresponding tax benefit is unlikely. These deductions include net operating losses realized by the U.S. Branch operations of iGATE Global Solutions Limited, capital losses realized from the disposition of certain
subsidiary and equity investments, and accruals for deferred compensation. The aggregate impact of these variations on the Companys effective tax rate was an unfavorable $4.8 million.

Federal income tax benefits calculated at the U.S. statutory rate were ($5.9) million for the year ended December 31, 2004. State income taxes which
totaled $0.3 million for 2004 were calculated using a blended statutory rate, and are net of federal income tax benefit. Our income tax provision was $5.1 million at an effective rate of (30.4%) for the year ended December 30, 2004.

Several items caused variations from our statutory income tax provision. iGS is eligible to claim a tax holiday on the majority of its
operating income through 2009. The tax holiday resulted in a benefit of $4.4 million for the year ended December 31, 2004. iGSs non-operating income, such as interest income, is not included in the tax holiday, and has been
considered as part of our income tax provision.

Other variations typically arise because certain expenses or benefits recorded to our
financial statements are either limited or disallowed when calculating our tax provision. We recognized an income tax benefit in the amount of $2.8 million mainly due to our ability to utilize capital losses that were recorded in prior years.
Amortization expense in the amount of $0.2 million related to our prior acquisitions was not deducted when calculating our income tax provision. Also, certain expenses such as meals and entertainment and executive



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compensation are limited for income tax purposes. Approximately $0.8 million of these expenses were not deducted when calculating our income tax provision.
In addition to the limited or disallowed items discussed above, valuation allowances have been provided against certain deductions for which the recognition of the corresponding tax benefit is unlikely. These deductions include deferred compensation
and net operating losses realized by the U.S. Branch operations of iGS, and capital losses realized from the disposition of certain subsidiary and equity investments. The impact of the deferred compensation adjustment on the Companys effective
tax rate was $5.8 million. The aggregate impact of the other variations was $2.3 million.

Liquidity and Capital Resources

Working capital decreased $7.0 million for the year ended December 31, 2006. While our accounts receivable increased to $53.3 million at
December 31, 2006 from $49.5 million at December 31, 2005, our days sales outstanding decreased to 67 days at December 31, 2006 from 73 days at December 31, 2005.

At December 31, 2006, we had cash and short-term investments of $52.2 million and $31.8 million, respectively, as compared to cash and short-term
investments of $45.8 million and $30.8 million, respectively, at December 31, 2005. Short-term investments at December 31, 2006 and December 31, 2005 consisted mainly of highly liquid short-term investments. Our focus has been
liquidity along with the preservation of our principal holdings.

Cash provided by 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 $14.5 million for the year ended December 31, 2006. Factors contributing to our cash provided by operations were net
income of $8.7 million for the period, offset by unfavorable changes in working capital items of $7.0 million which included an increase to our accounts receivable balances of $3.2 million and unfavorable changes to other working capital items
of $3.8 million. During 2006, significant noncash items totaled $12.8 million and included depreciation and amortization, stock based compensation expense related to our adoption of SFAS 123(R), bad debt expense, minority interest, equity gains,
deferred taxes, restructuring recovery, gains on derivative instruments and net gains on venture investments and affiliated companies.

Cash provided by operations was $14.0 million for the year ended December 31, 2005. Factors contributing to our cash provided by operations were net income of $7.0 million offset by changes in working capital items of $2.9 million that
included a decrease to our accounts receivable balances of $3.9 million offset by unfavorable changes to other working capital items of $6.8 million. Significant noncash items during the year ended December 31, 2005 totaled $9.9 million and
included depreciation and amortization, stock based compensation expense related to stock options granted at a discount, bad debt expense, minority interest, equity gains, deferred taxes, and net gains on venture investments.

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 of $9.4 million which included an increase to our accounts receivable balances of $15.6 million, offset by favorable changes to other working capital items of $6.2 million. Significant noncash
items during the year ended December 31, 2004 totaled $22.6 million and included depreciation and amortization, stock based compensation expense related to the acquisition of Quintant, bad debt expense, minority interest, equity gains, deferred
taxes, and net gains on venture investments. Cash provided by our discontinued operations totaled $2.8 million for 2004.



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Investing Activities

Cash used in investing activities for the year ended December 31, 2006 was $9.9 million, as compared to cash provided by investing activities of $2.7 in 2005 and cash used of $0.9 million in 2004. We generated
cash in 2005 due to a number of divestitures which are discussed below.

Our capital expenditures were $10.0 million, $12.2 million and
$14.9 million for the years ended December 31, 2006, 2005 and 2004, respectively. Significant portions of capital expenditures in all three years presented were due to expansion of our Whitefield campus located in India.

We acquired cash of $0.3 million as part of our acquisition of an additional 55% of the equity LoanPro for the year ended December 31, 2006. We made
no acquisitions in 2005. In 2004, we purchased Saint Life for $0.6 million in cash and invested $1.6 million in our two joint ventures, CIBER and Software AG.

In 2006 we sold our remaining interest in Brainbench for $0.6 million. In 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. In 2004, we sold our Australian operations and Direct Resources Inc. for net cash proceeds of $7.2 million. We also sold a tract of land in India for $4.8 million.

We have increased our short-term investment portfolios by approximately $0.8 million for the year ended December 31, 2006 and decreased our
portfolios by $4.9 million and $4.3 million for the years ended December 31, 2005 and 2004, respectively. In 2006, we have been able to increase our short term investments due to increases in cash. In 2005 and 2004, we used our short term
investments for capital additions for our Whitefield campus in India.

Financing Activities

Cash provided by financing activities was $1.9 million, $0.9 million and $3.0 million for the years ended December 31, 2006, 2005 and 2004,
respectively. Sources of cash related to stock option exercises were $1.9 million, $1.2 million and $1.9 million in 2006, 2005 and 2004, respectively. These sources of cash were partially offset in 2006 and 2005 by vehicle lease costs of
$0.1 million and $0.3 million, respectively. In 2004, we issued 220,783 shares of iGS stock to Concours for proceeds of $1.1 million. Tax benefits recognized in conjunction with the adoption of SFAS 123(R) in 2006 were $0.3 million.

The PNC Facility was renewed on September 14, 2006 for 365 days. Our borrowing availability under the PNC Facility is $35.0 million
and is unsecured. As part of our agreement with PNC, we are required to maintain domestic cash and cash equivalents and short-term investments of at least $35.0 million, maintain net tangible worth of at least $100 million and maintain a liquidity
ratio of not less than 1.5 to 1.0. The liquidity ratio is the sum of domestic cash and accounts receivable divided by total liabilities. We have no outstanding borrowings on the PNC Facility at December 31, 2006.

Restructurings

We restructured our
businesses in 2005, 2004, 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:



|                               |  |                        |     |      |   |      |  |      |   |      |   |            |  |   |   |  |   |  
|------------------------------ |  | ---------------------- | --- | ---- | - | ---- |  | ---- | - | ---- | - | ---------- |  | - | - |  | - | -
|                               |  | 2007                   |     | 2008 |   | 2009 |  | 2010 |   | 2011 |   | Thereafter
|                               |  | (Dollars in thousands)
|Leases costs of office closure |  | $                      | 497 |      | $ |     |  | $    |  |      | $ |           |  | $ |  |  | $ | 
|                               |  |                        |     |      |   |      |  |      |   |      |   |            |  |   |   |  |   |  



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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 $20.9 million and sales of $20.1 million), certain capital expenditures that were incurred during the normal
course of business (net additions of $10.0 million) and the exercise of employee stock options of $1.9 million.

Contractual Obligations

As part of our acquisition of ICRI, we may be required to fund their existing operations for a total amount of up to $3.0 million, based upon mutually
agreed upon operating needs. We funded $0.5 million of this requirement in 2006, $0.3 million and $0.5 million in 2005 and 2004, respectively.

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



|       |  |                        |       |      |   |       |  |      |       |      |   |            |  |   |     |  |   |    
|------ |  | ---------------------- | ----- | ---- | - | ----- |  | ---- | ----- | ---- | - | ---------- |  | - | --- |  | - | ---
|       |  | 2007                   |       | 2008 |   | 2009  |  | 2010 |       | 2011 |   | Thereafter
|       |  | (Dollars in thousands)
|Leases |  | $                      | 3,490 |      | $ | 2,591 |  | $    | 1,539 |      | $ | 1,070      |  | $ | 817 |  | $ | 994
|       |  |                        |       |      |   |       |  |      |       |      |   |            |  |   |     |  |   |    

We are nearing completion of Phase III of our campus located in Bangalore, and this facility
should be ready for occupancy in April 2007. Total estimated costs of the project will approximate $7.5 million. Phase I was completed in February 2005 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, 2006



|                          |  |                      |  |                                 |  |                        |        |      |        |               |                                                 |   |     |  
|------------------------- |  | -------------------- |  | ------------------------------- |  | ---------------------- | ------ | ---- | ------ | ------------- | ----------------------------------------------- | - | --- | -
|                          |  | Maturity Date Ranges |  | Strike Priceat Rupee RateRanges |  | Amount                 |        |      | Option |               | Net Unrealized Gains/(Losses) December 31, 2006 |  
|                          |  |                      |  |                                 |  | (Dollars in Thousands) |       
|FORWARD CONTRACTS         |  |                      |  |                                 |  |                        |        |      |        |               |                                                 |   |     |  
|From:                     |  | January 29, 2007     |  | 45.00                           |  |                        |        |      |        |               |                                                 |   |     |  
|To:                       |  | May 31, 2007         |  | 45.69                           |  |                        |        |      |        |               |                                                 |   |     |  
|                          |  |                      |  |                                 |  |                        |        |      |        |               |                                                 |   |     |  
|Subtotal                  |  |                      |  |                                 |  | $                      | 20,858 |      |        |               |                                                 | $ | 310 |  
|                          |  |                      |  |                                 |  |                        |        |      |        |               |                                                 |   |     |  
|CURRENCY OPTION CONTRACTS |  |                      |  |                                 |  |                        |        |      |        |               |                                                 |   |     |  
|From:                     |  | January 2, 2007      |  | 44.40                           |  | $                      | 1,000  |      |        | Buy/Sell Put  |                                                 |   |     |  
|To:                       |  | January 2, 2007      |  | 44.77                           |  | $                      | 2,000  |      |        | Buy/Sell Call |                                                 |   |     |  
|                          |  |                      |  |                                 |  |                        |        |      |        |               |                                                 |   |     |  
|Subtotal                  |  |                      |  |                                 |  | $                      | 3,000  |      |        |               |                                                 | $ | 12  |  
|                          |  |                      |  |                                 |  |                        |        |      |        |               |                                                 |   |     |  
|PRINCIPAL SWAPS           |  |                      |  |                                 |  |                        |        |      |        |               |                                                 |   |     |  
|                          |  | March 30, 2007       |  |                                 |  | $                      | 978    | USD  |        |               |                                                 | $ | (2  | )
|                          |  |                      |  |                                 |  |                        | 1,500  | SGD  |        |               |                                                 |   |     |  
|                          |  |                      |  |                                 | 
|                          |  | March 30, 2007       |  |                                 |  | $                      | 659    | USD  |        |               |                                                 | $ |    |  
|                          |  |                      |  |                                 |  |                        | 500    | EURO |        |               |                                                 |   |     |  
|                          |  |                      |  |                                 | 
|                          |  | March 30, 2007       |  |                                 |  | $                      | 4,740  | USD  |        |               |                                                 | $ |    |  
|                          |  |                      |  |                                 |  |                        | 5,500  | CAD  |        |               |                                                 |   |     |  
|                          |  |                      |  |                                 |  |                        |        |      |        |               |                                                 |   |     |  
|Subtotal                  |  |                      |  |                                 |  |                        |        |      |        |               |                                                 | $ | (2  | )
|                          |  |                      |  |                                 |  |                        |        |      |        |               |                                                 |   |     |  
|Total                     |  |                      |  |                                 |  |                        |        |      |        |               |                                                 | $ | 320 |  
|                          |  |                      |  |                                 |  |                        |        |      |        |               |                                                 |   |     |  

The net unrealized gains/(losses) were calculated using a Rupee exchange rate of 44.111.

As of December 31, 2006, iGSs forward contracts to hedge intercompany cash flows will mature within one year. 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, 2006 these option contracts did not meet qualifying criteria to receive hedge
accounting and, as such, iGS appropriately recorded an asset for the net unrealized gain of $0.3 million. For the year ended December 31, 2006, iGS recognized a gain of $0.6 million. For the year ended December 31, 2005, iGS recognized a
loss of ($1.0) million.

As of December 31, 2006, iGSs option contracts to hedge intercompany cash flows will mature within one
year. As each contract matures and dependent upon prevailing Rupee exchange rates, iGS will 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



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do not qualify for hedge accounting are recorded in current period earnings in other income and expense. At December 31, 2006 these forward contracts
did not meet qualifying criteria to receive hedge accounting and, as such, iGS appropriately recorded an asset for the net unrealized gain of less than $0.1 million. For the year ended December 31, 2006, iGS recognized a gain of $0.9 million.
For the year ended December 31, 2005, iGS recognized loss of ($0.6) million.

As of December 31, 2006, iGSs principal swaps
to hedge intercompany debt from iGS to the Company will mature within one year. 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, 2006, the principal swaps to hedge intercompany debt did not meet qualifying criteria to receive hedge accounting. For the year ended December 31, 2006, iGS recognized a
loss of ($0.3) million. For the year ended December 31, 2005, iGS recognized a gain of $0.2 million.

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 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.

Effect of Hypothetical 10% Fluctuation In Market
Prices

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

As of December 31, 2006, 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 of December 31, 2006 |   | Valuation give X% increase in Rupee / USD rate | 
|                       |  | (5%)                                            |        | (2%)                               |   | (1%)                                           |  |   | 1%     |  | 2% |        |  | 5% |       
|Rupee to USD rate      |  |                                                 | 41.906 |                                    |   | 43.229                                         |  |   | 43.670 |  |    | 44.111 |  |    | 44.552 |  |   | 44.993 |   |  |   | 46.317 |  
|Derivative Instruments |  | $                                               | 1.8    |                                    | $ | 0.9                                            |  | $ | 0.6    |  | $  | 0.3    |  | $  | 0.0    |  | $ | (0.3   | ) |  | $ | (1.2   | )
|                       |  |                                                 |        |                                    |   |                                                |  |   |        |  |    |        |  |    |        |  |   |        |   |  |   |        |  

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.



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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, 2006.

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
$800 billion through 2009.

We are committed to the BPO market so evidenced by our construction of our Whitefield campus, and our 2004
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

In June 2006, the Financial Accounting Standards Board issued
FASB Interpretation No.48, Accounting for Uncertainty in Income Taxes (as amended) (FIN 48), an interpretation of SFAS 109. Fin 48 prescribes a recognition threshold and measurement attribute for the financial statement
recognition and measurement of a tax position taken or expected to be taken in a tax return. This Interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and
transition. The evaluation of a tax position in accordance with this Interpretation is a two-step process. The first step is recognition: The enterprise determines whether it is more likely than not that a tax position will be sustained upon
examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. In evaluating whether a tax position has met the more-likely-than-not recognition threshold, the enterprise should
presume that the position will be examined by the appropriate taxing authority that has full knowledge of all relevant information. The second step is measurement: A tax position that meets the more-likely-than-not recognition threshold is measured
to determine the amount of benefit to recognize in the financial statements. The tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. This Interpretation is
effective for fiscal years beginning after December 15, 2006. The Company is currently evaluating the effect of the provision of this statement on its Consolidated Financial Statements.

In September 2006, the Financial Accounting Standards Board issued FASB Statement No. 157 Fair Value Measurements (FASB
157). This Statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. This Statement applies under other accounting
pronouncements that require or permit fair value measurements, but does not require any new fair value measurements. However, for some entities, the application of this Statement will change current practice. This Statement is effective for
financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Earlier application is encouraged, provided that the reporting entity has not yet issued financial statements for
that fiscal year, including financial statements for an interim period within that fiscal year. The Company is currently evaluating the effect of the provision of this statement on its Consolidated Financial Statements.



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|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. 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, 2006 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, 2006 and 2005                                                                         |  | 41  
|                                                                                                                                     | 
|Consolidated Statements of Operations for the years ended December 31, 2006, 2005 and 2004                                           |  | 42  
|                                                                                                                                     | 
|Consolidated Statements of Shareholders Equity and Comprehensive Income (Loss) for the years ended December 31, 2006, 2005 and 2004 |  | 43  
|                                                                                                                                     | 
|Consolidated Statements of Cash Flows for the years ended December 31, 2006, 2005 and 2004                                           |  | 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 sheets of iGate Corporation as of December 31, 2006 and 2005 and the related consolidated statements of operations,
stockholders equity and comprehensive income (loss), and cash flows for each of the two years in the period ended December 31, 2006. We have also audited the accompanying Schedule II, Valuation of Qualifying Accounts for each of the two years
in the period ended December 31, 2006. 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 statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements and schedule referred to above present fairly, in all material respects, the financial position of
iGate Corporation at December 31, 2006 and 2005 and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2006, in conformity with accounting principles generally accepted in the United States of
America.

We have also audited the adjustments to the 2004 financial statements to retrospectively apply the realignment of reporting segments as described
in Note 16. In our opinion, such adjustments are appropriate and have been properly applied. We were not engaged to audit, review, or apply any procedures to the 2004 financial statements of the Company other than with respect to the adjustments
and, accordingly, we do not express an opinion or any other form of assurance of the 2004 financial statements taken as a whole.

As discussed in Note 11
to the consolidated financial statements, the Company adopted Statement of Financial Accounting Standards No. 123(R), Share-Based Payment, as of January 1, 2006.

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, 2006,
based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated March 13, 2007 expressed an unqualified opinion thereon.

/s/ BDO Seidman, LLP

Milwaukee, Wisconsin

March 13, 2007



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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 statements of operations, shareholders equity and comprehensive loss and cash flowsfor the year ended December 31, 2004, before the effects of the adjustments to retrospectively reflect the
change in the composition of reportable segments described in Note 16, present fairly, in all material respects, the results of operations and cash flows of iGate Corporation and its subsidiaries for the year ended December 31, 2004, in conformity
with accounting principles generally accepted in the United States of America (the 2004 financial statements before the effects of the adjustments discussed in Note 16 are not presented herein). In addition, in our opinion, the financial statement
schedule for the year 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 and financial
statement schedule are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audit. We conducted our audit, before the effects of
the adjustments described above, 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 audit provides a reasonable basis for our opinion.

We were not engaged to audit, review, or apply any procedures to the adjustments to retrospectively reflect the change in the composition of reportable segments described in Note 16and accordingly, we do not
express an opinion or any other form of assurance about whether such adjustments are appropriate and have been properly applied. Those adjustments were audited by other auditors.

/s/    PRICEWATERHOUSECOOPERS LLP

Pittsburgh, Pennsylvania

April 29, 2005



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iGATE CORPORATION

CONSOLIDATED BALANCE SHEETS



|                                                                                                                                                            |  |                                                  |         |   |      |   |         |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------ | ------- | - | ---- | - | ------- | -
|                                                                                                                                                            |  | At December 31,                                  |        
|                                                                                                                                                            |  | 2006                                             |         |   | 2005 |  
|                                                                                                                                                            |  | (Dollars in thousands, except per share amounts) |        
|ASSETS                                                                                                                                                      |  |                                                  |         |   |      |   |         |  
|Current assets:                                                                                                                                             |  |                                                  |         |   |      |   |         |  
|Cash and cash equivalents                                                                                                                                   |  | $                                                | 52,154  |   |      | $ | 45,837  |  
|Short-term investments                                                                                                                                      |  |                                                  | 31,826  |   |      |   | 30,798  |  
|Accounts receivable, net of allowance for uncollectible accounts of $1,090 and $1,776, respectively                                                         |  |                                                  | 43,035  |   |      |   | 39,456  |  
|Unbilled receivables                                                                                                                                        |  |                                                  | 10,343  |   |      |   | 10,023  |  
|Employee advances                                                                                                                                           |  |                                                  | 1,126   |   |      |   | 1,140   |  
|Prepaid and other current assets                                                                                                                            |  |                                                  | 6,574   |   |      |   | 6,097   |  
|Prepaid income taxes                                                                                                                                        |  |                                                  | 380     |   |      |   | 1,060   |  
|Deferred income taxes                                                                                                                                       |  |                                                  | 1,111   |   |      |   | 1,058   |  
|                                                                                                                                                            |  |                                                  |         |   |      |   |         |  
|Total current assets                                                                                                                                        |  |                                                  | 146,549 |   |      |   | 135,469 |  
|                                                                                                                                                            |  |                                                  |         |   |      |   |         |  
|Investments in unconsolidated affiliates                                                                                                                    |  |                                                  | 1,398   |   |      |   | 1,050   |  
|                                                                                                                                                            |  |                                                  |         |   |      |   |         |  
|Land, building, equipment and leasehold improvements, at cost:                                                                                              |  |                                                  |         |   |      |   |         |  
|Land and building                                                                                                                                           |  |                                                  | 10,983  |   |      |   | 9,976   |  
|Equipment                                                                                                                                                   |  |                                                  | 56.476  |   |      |   | 53,088  |  
|Leasehold improvements                                                                                                                                      |  |                                                  | 4,489   |   |      |   | 3,138   |  
|                                                                                                                                                            |  |                                                  |         |   |      |   |         |  
|                                                                                                                                                            |  |                                                  | 71,948  |   |      |   | 66,202  |  
|Lessaccumulated depreciation                                                                                                                               |  |                                                  | (42,081 | ) |      |   | (37,663 | )
|                                                                                                                                                            |  |                                                  |         |   |      |   |         |  
|Net land, building, equipment and leasehold improvements                                                                                                    |  |                                                  | 29,867  |   |      |   | 28,539  |  
|                                                                                                                                                            |  |                                                  |         |   |      |   |         |  
|Goodwill                                                                                                                                                    |  |                                                  | 11,014  |   |      |   | 8,851   |  
|Intangible assets, net                                                                                                                                      |  |                                                  | 1,946   |   |      |   | 3,565   |  
|                                                                                                                                                            |  |                                                  |         |   |      |   |         |  
|Total assets                                                                                                                                                |  | $                                                | 190,774 |   |      | $ | 177,474 |  
|                                                                                                                                                            |  |                                                  |         |   |      |   |         |  
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                                        |  |                                                  |         |   |      |   |         |  
|Current liabilities:                                                                                                                                        |  |                                                  |         |   |      |   |         |  
|Accounts payable                                                                                                                                            |  | $                                                | 4,997   |   |      | $ | 5,958   |  
|Accrued payroll and related costs                                                                                                                           |  |                                                  | 17,966  |   |      |   | 16,304  |  
|Accrued income taxes                                                                                                                                        |  |                                                  | 646     |   |      |   |        |  
|Other accrued liabilities                                                                                                                                   |  |                                                  | 8,591   |   |      |   | 8,163   |  
|Restructuring reserve                                                                                                                                       |  |                                                  | 497     |   |      |   | 2,355   |  
|Deferred revenue                                                                                                                                            |  |                                                  | 465     |   |      |   | 362     |  
|                                                                                                                                                            |  |                                                  |         |   |      |   |         |  
|Total current liabilities                                                                                                                                   |  |                                                  | 33,162  |   |      |   | 33,142  |  
|Restructuring reserve                                                                                                                                       |  |                                                  |        |   |      |   | 2,422   |  
|Other long-term liabilities                                                                                                                                 |  |                                                  | 406     |   |      |   | 422     |  
|Deferred income taxes                                                                                                                                       |  |                                                  | 9,483   |   |      |   | 9,718   |  
|                                                                                                                                                            |  |                                                  |         |   |      |   |         |  
|Total liabilities                                                                                                                                           |  |                                                  | 43,051  |   |      |   | 45,704  |  
|                                                                                                                                                            |  |                                                  |         |   |      |   |         |  
|Minority interest                                                                                                                                           |  |                                                  | 14,372  |   |      |   | 14,098  |  
|Shareholders equity:                                                                                                                                       |  |                                                  |         |   |      |   |         |  
|Preferred Stock, without par value: 20,000,000 shares authorized, 1 share of Series A Preferred Stock held in treasury in 2006 and 2005,
respectively       |  |                                                  |        |   |      |   |        |  
|Common Stock, par value $0.01 per share: 100,000,000 shares authorized, 54,021,670 and 53,756,638 shares issued at December 31, 2006 and
2005, respectively |  |                                                  | 540     |   |      |   | 538     |  
|Additional paid-in capital                                                                                                                                  |  |                                                  | 167,626 |   |      |   | 162,278 |  
|Accumulated deficit                                                                                                                                         |  |                                                  | (21,037 | ) |      |   | (29,741 | )
|Deferred compensation                                                                                                                                       |  |                                                  |        |   |      |   | (1,119  | )
|Common Stock held in treasury, at cost, 990,102 shares at December 31, 2006 and 2005, respectively                                                          |  |                                                  | (14,714 | ) |      |   | (14,714 | )
|Accumulated other comprehensive income                                                                                                                      |  |                                                  | 936     |   |      |   | 430     |  
|                                                                                                                                                            |  |                                                  |         |   |      |   |         |  
|Total shareholders equity                                                                                                                                  |  |                                                  | 133,351 |   |      |   | 117,672 |  
|                                                                                                                                                            |  |                                                  |         |   |      |   |         |  
|Total liabilities and shareholders equity                                                                                                                  |  | $                                                | 190,774 |   |      | $ | 177,474 |  
|                                                                                                                                                            |  |                                                  |         |   |      |   |         |  

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,                      |        
|                                                                 |  | 2006                                         |         |   | 2005 |   |         | 2004 | 
|                                                                 |  | (Dollars in thousands, except pershare data) |        
|Revenues                                                         |  | $                                            | 283,588 |   |      | $ | 275,992 |      |  | $ | 264,585 |  
|Cost of revenues                                                 |  |                                              | 210,212 |   |      |   | 205,110 |      |  |   | 197,577 |  
|                                                                 |  |                                              |         |   |      |   |         |      |  |   |         |  
|Gross margin                                                     |  |                                              | 73,376  |   |      |   | 70,882  |      |  |   | 67,008  |  
|Selling, general and administrative                              |  |                                              | 69,620  |   |      |   | 67,483  |      |  |   | 82,079  |  
|Gain on sale of land                                             |  |                                              |        |   |      |   |        |      |  |   | (3,615  | )
|Restructuring (recovery) charges                                 |  |                                              | (3,062  | ) |      |   | (481    | )    |  |   | 5,805   |  
|                                                                 |  |                                              |         |   |      |   |         |      |  |   |         |  
|Income (loss) from operations                                    |  |                                              | 6,818   |   |      |   | 3,880   |      |  |   | (17,261 | )
|Interest income                                                  |  |                                              | 3,311   |   |      |   | 2,123   |      |  |   | 901     |  
|Interest expense                                                 |  |                                              | (121    | ) |      |   | (204    | )    |  |   | (143    | )
|Other income (expense), net                                      |  |                                              | 802     |   |      |   | (2,194  | )    |  |   | 616     |  
|Equity in income (losses) of affiliated companies                |  |                                              | 317     |   |      |   | 338     |      |  |   | (335    | )
|Minority interest                                                |  |                                              | (752    | ) |      |   | (261    | )    |  |   | (677    | )
|Gain on sale of stock of subsidiary                              |  |                                              |        |   |      |   | 5,549   |      |  |   |        |  
|Gain (loss) on venture investments and affiliated companies, net |  |                                              | 578     |   |      |   | (2,149  | )    |  |   |        |  
|                                                                 |  |                                              |         |   |      |   |         |      |  |   |         |  
|Income (loss) before income taxes                                |  |                                              | 10,953  |   |      |   | 7,082   |      |  |   | (16,899 | )
|Income tax expense                                               |  |                                              | 2,249   |   |      |   | 113     |      |  |   | 5,130   |  
|                                                                 |  |                                              |         |   |      |   |         |      |  |   |         |  
|Income (loss) from continuing operations                         |  |                                              | 8,704   |   |      |   | 6,969   |      |  |   | (22,029 | )
|Income from discontinued operations, net of income taxes         |  |                                              |        |   |      |   |        |      |  |   | 3,818   |  
|                                                                 |  |                                              |         |   |      |   |         |      |  |   |         |  
|Net income (loss)                                                |  | $                                            | 8,704   |   |      | $ | 6,969   |      |  | $ | (18,211 | )
|                                                                 |  |                                              |         |   |      |   |         |      |  |   |         |  
|Net earnings (loss) per common share, basic:                     |  |                                              |         |   |      |   |         |      |  |   |         |  
|Earnings (loss) from continuing operations                       |  | $                                            | 0.16    |   |      | $ | 0.13    |      |  | $ | (0.42   | )
|Earnings from discontinued operations                            |  |                                              |        |   |      |   |        |      |  |   | 0.07    |  
|                                                                 |  |                                              |         |   |      |   |         |      |  |   |         |  
|Net earnings (loss)basic                                        |  | $                                            | 0.16    |   |      | $ | 0.13    |      |  | $ | (0.35   | )
|                                                                 |  |                                              |         |   |      |   |         |      |  |   |         |  
|Net earnings (loss) per common share, diluted:                   |  |                                              |         |   |      |   |         |      |  |   |         |  
|Earnings (loss) from continuing operations                       |  | $                                            | 0.16    |   |      | $ | 0.13    |      |  | $ | (0.42   | )
|Earnings from discontinued operations                            |  |                                              |        |   |      |   |        |      |  |   | 0.07    |  
|                                                                 |  |                                              |         |   |      |   |         |      |  |   |         |  
|Net earnings (loss)diluted                                      |  | $                                            | 0.16    |   |      | $ | 0.13    |      |  | $ | (0.35   | )
|                                                                 |  |                                              |         |   |      |   |         |      |  |   |         |  
|Weighted average common shares, basic                            |  |                                              | 52,939  |   |      |   | 52,530  |      |  |   | 52,721  |  
|                                                                 |  |                                              |         |   |      |   |         |      |  |   |         |  
|Weighted average common shares, diluted                          |  |                                              | 53,278  |   |      |   | 52,734  |      |  |   | 52,721  |  
|                                                                 |  |                                              |         |   |      |   |         |      |  |   |         |  

The accompanying notes are an integral part of these Consolidated Financial Statements.



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iGATE CORPORATION

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



|                                                                            |  |                        |   |                           |           |                          |  |   |                      |   |         |                      |  |   |               |   |  |                                            |        |   |                          |   |         |                            |  |   |        |   |  |   |         |   |  |   |         |  
|--------------------------------------------------------------------------- |  | ---------------------- | - | ------------------------- | --------- | ------------------------ |  | - | -------------------- | - | ------- | -------------------- |  | - | ------------- | - |  | ------------------------------------------ | ------ | - | ------------------------ | - | ------- | -------------------------- |  | - | ------ | - |  | - | ------- | - |  | - | ------- | -
|                                                                            |  | Common Stock           |   | Series A Preferred Shares |           | AdditionalPaid-inCapital |  |   | Accumulated(Deficit) |   |         | DeferredCompensation |  |   | TreasuryStock |   |  | AccumulatedOtherComprehensiveIncome (Loss) |        |   | TotalShareholdersEquity |   |         | ComprehensiveIncome/(Loss) | 
|                                                                            |  | Shares                 |   |                           | Par Value |                          |  |   |                      |   |         |                      | 
|                                                                            |  | (Dollars in thousands) |  
|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 (loss):                                                       |  |                        |   |                           |           |                          |  |   |                      |   |         |                      |  |   |               |   |  |                                            |        |   |                          |   |         |                            |  |   |        |   |  |   |         |   |  |   |         |  
|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 (loss) 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 |   |  |   |         |  
|                                                                            |  |                        |   |                           |           |                          |  |   |                      |   |         |                      |  |   |               |   |  |                                            |        |   |                          |   |         |                            |  |   |        |   |  |   |         |   |  |   |         |  
|Exercise of stock options, including tax benefit recognized of $0.1 million |  | 250,032                |   |                           |           | 2                        |  |  |                      |   | 994     |                      |  |   |              |   |  |                                            |       |   |                          |   |        |                            |  |   |       |   |  |   | 996     |   |  |   |         |  
|Reclassification of deferred compensation                                   |  |                       |   |                           |           |                         |  |  |                      |   | (1,119  | )                    |  |   |              |   |  |                                            | 1,119  |   |                          |   |        |                            |  |   |       |   |  |   |        |   |  |   |         |  
|iGATE stock-based compensation expense                                      |  | 15,000                 |   |                           |           |                         |  |  |                      |   | 938     |                      |  |   |              |   |  |                                            |       |   |                          |   |        |                            |  |   |       |   |  |   | 938     |   |  |   |         |  
|Subsidiary option activity and stock based compensation expense             |  |                        |   |                           |           |                         |  |  |                      |   | 4,535   |                      |  |   |              |   |  |                                            |       |   |                          |   |        |                            |  |   |       |   |  |   | 4,535   |   |  |   |         |  
|Comprehensive income:                                                       |  |                        |   |                           |           |                          |  |   |                      |   |         |                      |  |   |               |   |  |                                            |        |   |                          |   |         |                            |  |   |        |   |  |   |         |   |  |   |         |  
|Currency translation adjustment                                             |  |                       |   |                           |           |                         |  |  |                      |   |        |                      |  |   |              |   |  |                                            |       |   |                          |   |        |                            |  |   | 506    |   |  |   | 506     |   |  |   | 506     |  
|Net income                                                                  |  |                       |   |                           |           |                         |  |  |                      |   |        |                      |  |   | 8,704         |   |  |                                            |       |   |                          |   |        |                            |  |   |       |   |  |   | 8,704   |   |  |   | 8,704   |  
|                                                                            |  |                        |   |                           |           |                          |  |   |                      |   |         |                      |  |   |               |   |  |                                            |        |   |                          |   |         |                            |  |   |        |   |  |   |         |   |  |   |         |  
|                                                                            |  |                        |   |                           |           |                          |  |   |                      |   |         |                      |  |   |               |   |  |                                            |        |   |                          |   |         |                            |  |   |        |   |  |   |         |   |  | $ | 9,210   |  
|                                                                            |  |                        |   |                           |           |                          |  |   |                      |   |         |                      |  |   |               |   |  |                                            |        |   |                          |   |         |                            |  |   |        |   |  |   |         |   |  |   |         |  
|Balances, December 31, 2006                                                 |  | 53,031,568             |   |                           | $         | 540                      |  |  |                      | $ | 167,626 |                      |  | $ | (21,037       | ) |  | $                                          |       |   |                          | $ | (14,714 | )                          |  | $ | 936    |   |  | $ | 133,351 |   |  |   |         |  
|                                                                            |  |                        |   |                           |           |                          |  |   |                      |   |         |                      |  |   |               |   |  |                                            |        |   |                          |   |         |                            |  |   |        |   |  |   |         |   |  |   |         |  

---

|(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, |        
|                                                                                  |  | 2006                    |         |   | 2005 |   |         | 2004 | 
|                                                                                  |  | (Dollars in thousands)  |        
|CASH FLOWS FROM OPERATING ACTIVITIES:                                             |  |                         |         |   |      |   |         |      |  |   |         |  
|Operations:                                                                       |  |                         |         |   |      |   |         |      |  |   |         |  
|Net income (loss)                                                                 |  | $                       | 8,704   |   |      | $ | 6,969   |      |  | $ | (18,211 | )
|Adjustments to reconcile net income (loss) to cash provided (used) by operations: |  |                         |         |   |      |   |         |      |  |   |         |  
|(Income) from discontinued operations, net of tax                                 |  |                         |        |   |      |   |        |      |  |   | (3,818  | )
|Depreciation and amortization                                                     |  |                         | 10,851  |   |      |   | 10,915  |      |  |   | 8,720   |  
|Gain on sale of stock of subsidiary                                               |  |                         |        |   |      |   | (5,549  | )    |  |   |        |  
|Gain on sale of land                                                              |  |                         |        |   |      |   |        |      |  |   | (3,615  | )
|Gain on other investments                                                         |  |                         | (108    | ) |      |   | (206    | )    |  |   |        |  
|Realized and unrealized (gain) loss on derivative instruments                     |  |                         | (1,547  | ) |      |   | 1,263   |      |  |   |        |  
|Bad debt (recovery) expense                                                       |  |                         | 286     |   |      |   | (949    | )    |  |   | 2,735   |  
|Deferred income taxes, net                                                        |  |                         | (522    | ) |      |   | 1,017   |      |  |   | 2,972   |  
|Gain (loss) on venture investments and affiliated companies, net                  |  |                         | (578    | ) |      |   | 2,149   |      |  |   |        |  
|Loss on impairment of property and equipment                                      |  |                         |        |   |      |   |        |      |  |   | 373     |  
|Equity in (income) losses of affiliated companies                                 |  |                         | (317    | ) |      |   | (338    | )    |  |   | 335     |  
|Minority interest                                                                 |  |                         | 752     |   |      |   | 261     |      |  |   | 677     |  
|Stock issued to employees                                                         |  |                         |        |   |      |   |        |      |  |   | 1,331   |  
|Discount on stock sold to employees                                               |  |                         |        |   |      |   | 606     |      |  |   | 1,811   |  
|Amortization of deferred compensation                                             |  |                         | 4,009   |   |      |   | 815     |      |  |   | 7,293   |  
|Working capital items excluding effects of divestitures:                          |  |                         |         |   |      |   |         |      |  |   |         |  
|Accounts receivable and unbilled receivables                                      |  |                         | (3,239  | ) |      |   | 3,909   |      |  |   | (15,565 | )
|Employee advances                                                                 |  |                         | 36      |   |      |   | 167     |      |  |   | 689     |  
|Prepaid and other current assets                                                  |  |                         | (360    | ) |      |   | (822    | )    |  |   | 1,320   |  
|Accounts payable                                                                  |  |                         | (1,154  | ) |      |   | 1,248   |      |  |   | (590    | )
|Accrued and other current liabilities                                             |  |                         | 2,325   |   |      |   | (4,865  | )    |  |   | 8,042   |  
|Restructuring reserves                                                            |  |                         | (4,751  | ) |      |   | (2,273  | )    |  |   | (2,891  | )
|Deferred revenue                                                                  |  |                         | 94      |   |      |   | (274    | )    |  |   | (369    | )
|                                                                                  |  |                         |         |   |      |   |         |      |  |   |         |  
|Net cash flows provided (used) by continuing operations                           |  |                         | 14,481  |   |      |   | 14,043  |      |  |   | (8,761  | )
|                                                                                  |  |                         |         |   |      |   |         |      |  |   |         |  
|Cash flows (used) provided by discontinued operations                             |  |                         |        |   |      |   | (88     | )    |  |   | 1,002   |  
|                                                                                  |  |                         |         |   |      |   |         |      |  |   |         |  
|Net cash flows provided (used) by operating activities                            |  |                         | 14,481  |   |      |   | 13,955  |      |  |   | (7,759  | )
|                                                                                  |  |                         |         |   |      |   |         |      |  |   |         |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                             |  |                         |         |   |      |   |         |      |  |   |         |  
|Additions to equipment and leasehold improvements, net                            |  |                         | (9,978  | ) |      |   | (12,199 | )    |  |   | (14,934 | )
|Purchases of investments                                                          |  |                         | (20,889 | ) |      |   | (22,347 | )    |  |   | (36,359 | )
|Sales of investments                                                              |  |                         | 20,108  |   |      |   | 27,288  |      |  |   | 40,689  |  
|Sales of investments in unconsolidated affiliates                                 |  |                         | 578     |   |      |   | 678     |      |  |   |        |  
|Investments in unconsolidated affiliates                                          |  |                         |        |   |      |   |        |      |  |   | (1,612  | )
|Acquisitions, net of cash acquired                                                |  |                         | 286     |   |      |   |        |      |  |   | (648    | )
|Proceeds from sale of land                                                        |  |                         |        |   |      |   |        |      |  |   | 4,780   |  
|Proceeds from sale of affiliates, net of cash                                     |  |                         |        |   |      |   | 9,310   |      |  |   | 7,180   |  
|                                                                                  |  |                         |         |   |      |   |         |      |  |   |         |  
|Net cash flows (used) provided by investing activities                            |  |                         | (9,895  | ) |      |   | 2,730   |      |  |   | (904    | )
|                                                                                  |  |                         |         |   |      |   |         |      |  |   |         |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                             |  |                         |         |   |      |   |         |      |  |   |         |  
|Payments on secured financing                                                     |  |                         | (78     | ) |      |   | (301    | )    |  |   |        |  
|Proceeds from issuance of stock by subsidiary                                     |  |                         |        |   |      |   |        |      |  |   | 1,092   |  
|Net proceeds from exercise of stock options                                       |  |                         | 1,936   |   |      |   | 1,166   |      |  |   | 1,880   |  
|                                                                                  |  |                         |         |   |      |   |         |      |  |   |         |  
|Net cash flows provided by financing activities                                   |  |                         | 1,858   |   |      |   | 865     |      |  |   | 2,972   |  
|                                                                                  |  |                         |         |   |      |   |         |      |  |   |         |  
|Effect of currency translation                                                    |  |                         | (127    | ) |      |   | 86      |      |  |   | (2,241  | )
|                                                                                  |  |                         |         |   |      |   |         |      |  |   |         |  
|Net change in cash and cash equivalents                                           |  |                         | 6,317   |   |      |   | 17,636  |      |  |   | (7,932  | )
|Cash and cash equivalents, beginning of year                                      |  |                         | 45,837  |   |      |   | 28,201  |      |  |   | 36,133  |  
|                                                                                  |  |                         |         |   |      |   |         |      |  |   |         |  
|Cash and cash equivalents, end of year                                            |  | $                       | 52,154  |   |      | $ | 45,837  |      |  | $ | 28,201  |  
|                                                                                  |  |                         |         |   |      |   |         |      |  |   |         |  
|SUPPLEMENTAL DISCLOSURE:                                                          |  |                         |         |   |      |   |         |      |  |   |         |  
|Cash payments for income taxes                                                    |  | $                       | 283     |   |      | $ | 1,218   |      |  | $ | 576     |  
|                                                                                  |  |                         |         |   |      |   |         |      |  |   |         |  
|NON-CASH INVESTING AND FINANCING ACTIVITIES:                                      |  |                         |         |   |      |   |         |      |  |   |         |  
|Unrealized gain (loss) on investments and derivative instruments                  |  | $                       | 320     |   |      | $ | (1,237  | )    |  | $ | (194    | )
|                                                                                  |  |                         |         |   |      |   |         |      |  |   |         |  
|Capitalized leases                                                                |  | $                       | 343     |   |      | $ | 301     |      |  | $ | 769     |  
|                                                                                  |  |                         |         |   |      |   |         |      |  |   |         |  

The accompanying notes are an integral part of these Consolidated Financial Statements.



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2006 AND 2005



|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 2006 presentations.

(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 Global 2000 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, 2006 AND 2005



(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 Income (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). No
such impairment losses were incurred in 2006 or 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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##### Table of Contents

iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2006 AND 2005



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 2006 or 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 but will be subject to an annual impairment assessment of their
carrying value, or more frequently if circumstances change. 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. There were no impairments for the years presented.

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.



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2006 AND 2005



(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.

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 $4.8 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, 2006 and 2005, the Company had outside equity holders
for the following Companies:



|                                                            |  |                              |   |  |      |  
|----------------------------------------------------------- |  | ---------------------------- | - |  | ---- | -
|                                                            |  | Percentage Outside Ownership |  
|                                                            |  | 2006                         |   |  | 2005 |  
|iGATE Global Solutions Ltd. (iGS)                         |  | 18.2                         | % |  | 18.4 | %
|Quintant, Inc. (Quintant)                                   |  | 18.2                         | % |  | 18.4 | %
|iGATE Clinical Research International Private Ltd. (ICRI) |  | 5                            | % |  | 5    | %
|LoanPro                                                     |  | 49.0                         | % |  |     |  

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 range,
dependent upon the level of borrowings, at the lesser of the current LIBOR rate +1.00% to +2.50% or the Prime rate +0.50%, calculated on a per annum basis.

Accounts payableThe carrying amount approximates market.



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2006 AND 2005



(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 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 $1.5 million in other income in 2006 and $1.3 million in other expense in 2005 related to its foreign currency hedging transactions.

(q) Stock-Based Employee Compensation

The Company recognizes compensation expense for all
stock-based awards, using a fair value approach as prescribed in SFAS No. 123(R) Share Based Payments. The impact of the adoption is more fully described in Note 11 Stock Based Compensation.

(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 income (expense), 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. The Company follows this revenue recognition method for fixed-price contracts because there is a direct and consistent relationship between the service
patterns and services provided to the customer and the direct costs incurred to provide such services. If the Companys cost 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



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2006 AND 2005



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 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) Issuance of Stock by Subsidiaries

All issuances of subsidiary stock options or restricted stock and stock compensation expense recorded in accordance with SFAS 123(R) are treated as equity
transactions.

(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 Statements of Operations 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



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##### Table of Contents

iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2006 AND 2005



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.

(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.

(y) Recently Issued Accounting Standards

In June 2006, the Financial Accounting Standards Board issued FASB Interpretation No.48, Accounting for Uncertainty in Income Taxes (as amended) (FIN 48), an interpretation of SFAS 109. FIN 48 prescribes a
recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This Interpretation also provides guidance on derecognition, classification,
interest and penalties, accounting in interim periods, disclosure, and transition. The evaluation of a tax position in accordance with this Interpretation is a two-step process. The first step is recognition: The enterprise determines whether it is
more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. In evaluating whether a tax position has met the
more-likely-than-not recognition threshold, the enterprise should presume that the position will be examined by the appropriate taxing authority that has full knowledge of all relevant information. The second step is measurement: A tax position that
meets the more-likely-than-not recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured at the largest amount of benefit that is greater than 50 percent likely of
being realized upon ultimate settlement. This Interpretation is effective for fiscal years beginning after December 15, 2006. The Company is currently evaluating the effect of the provision of this statement on its Consolidated Financial
Statements.

In September 2006, the Financial Accounting Standards Board issued FASB Statement No. 157 Fair Value
Measurements (FASB 157). This Statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. This Statement
applies under other accounting pronouncements that require or permit fair value measurements, but does not require any new fair value measurements. However, for some entities, the application of this Statement will change current practice. This
Statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Earlier application is encouraged, provided that the reporting entity has not yet issued
financial statements for that fiscal year, including financial statements for an interim period within that fiscal year. The Company is currently evaluating the effect of the provision of this statement on its Consolidated Financial Statements.



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

The Company has
short-term investments consisting of money market funds and corporate bonds that totaled $31.8 million and $30.8 million at December 31, 2006 and 2005, respectively. Approximately $6.8 million and $5.8 million of these funds at
December 31, 2006 and 2005 are to be used exclusively by iGS due to Indian governmental restrictions.



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



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 related to its 2005 Credit Facility. There were no restrictions on cash in 2006, when the Companys Credit Facility was renewed. The Credit
Facility is more fully discussed in Note 7.



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

Summarized below are derivatives instruments consisting of foreign exchange contracts and a principal only SWAP agreement at December 31, 2006. 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, 2006



|                          |  |                      |  |                                 |  |                        |        |      |        |               |                                                 |   |     |  
|------------------------- |  | -------------------- |  | ------------------------------- |  | ---------------------- | ------ | ---- | ------ | ------------- | ----------------------------------------------- | - | --- | -
|                          |  | Maturity Date Ranges |  | Strike Priceat Rupee RateRanges |  | Amount                 |        |      | Option |               | Net Unrealized Gains/(Losses) December 31, 2006 |  
|                          |  |                      |  |                                 |  | (Dollars in Thousands) |       
|FORWARD CONTRACTS         |  |                      |  |                                 |  |                        |        |      |        |               |                                                 |   |     |  
|From:                     |  | January 29, 2007     |  | 45.00                           |  |                        |        |      |        |               |                                                 |   |     |  
|To:                       |  | May 31, 2007         |  | 45.69                           |  |                        |        |      |        |               |                                                 |   |     |  
|                          |  |                      |  |                                 |  |                        |        |      |        |               |                                                 |   |     |  
|Subtotal                  |  |                      |  |                                 |  | $                      | 20,858 |      |        |               |                                                 | $ | 310 |  
|                          |  |                      |  |                                 |  |                        |        |      |        |               |                                                 |   |     |  
|CURRENCY OPTION CONTRACTS |  |                      |  |                                 |  |                        |        |      |        |               |                                                 |   |     |  
|From:                     |  | January 2, 2007      |  | 44.40                           |  | $                      | 1,000  |      |        | Buy/Sell Put  |                                                 |   |     |  
|To:                       |  | January 2, 2007      |  | 44.77                           |  | $                      | 2,000  |      |        | Buy/Sell Call |                                                 |   |     |  
|                          |  |                      |  |                                 |  |                        |        |      |        |               |                                                 |   |     |  
|Subtotal                  |  |                      |  |                                 |  | $                      | 3,000  |      |        |               |                                                 | $ | 12  |  
|                          |  |                      |  |                                 |  |                        |        |      |        |               |                                                 |   |     |  
|PRINCIPAL SWAPS           |  |                      |  |                                 |  |                        |        |      |        |               |                                                 |   |     |  
|                          |  | March 30, 2007       |  |                                 |  | $                      | 978    | USD  |        |               |                                                 | $ | (2  | )
|                          |  |                      |  |                                 |  |                        | 1,500  | SGD  |        |               |                                                 |   |     |  
|                          |  |                      |  |                                 | 
|                          |  | March 30, 2007       |  |                                 |  | $                      | 659    | USD  |        |               |                                                 | $ |    |  
|                          |  |                      |  |                                 |  |                        | 500    | EURO |        |               |                                                 |   |     |  
|                          |  |                      |  |                                 | 
|                          |  | March 30, 2007       |  |                                 |  | $                      | 4,740  | USD  |        |               |                                                 | $ |    |  
|                          |  |                      |  |                                 |  |                        | 5,500  | CAD  |        |               |                                                 |   |     |  
|                          |  |                      |  |                                 |  |                        |        |      |        |               |                                                 |   |     |  
|Subtotal                  |  |                      |  |                                 |  |                        |        |      |        |               |                                                 | $ | (2  | )
|                          |  |                      |  |                                 |  |                        |        |      |        |               |                                                 |   |     |  
|Total                     |  |                      |  |                                 |  |                        |        |      |        |               |                                                 | $ | 320 |  
|                          |  |                      |  |                                 |  |                        |        |      |        |               |                                                 |   |     |  

The net unrealized gains/(losses) were calculated using a Rupee Exchange rate of 44.111.

As of December 31, 2006, iGSs forward contracts to hedge intercompany cash flows will mature within one year. 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, 2006 these option contracts did not meet qualifying criteria to
receive hedge accounting and, as such, iGS appropriately recorded an asset for the net unrealized gain of $0.3 million. For the year ended



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



December 31, 2006, iGS recognized a gain of $0.6 million. For the year ended December 31, 2005, iGS recognized a loss of ($1.0) million.

As of December 31, 2006, iGSs option contracts to hedge intercompany cash flows will mature within one year. As each contract
matures and dependent upon prevailing Rupee exchange rates, iGS will 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, 2006 these option contracts did not meet qualifying criteria to
receive hedge accounting and, as such, iGS appropriately recorded an asset for the net unrealized gain of less than $0.1 million. For the year ended December 31, 2006, iGS recognized a gain of $0.9 million. For the year ended December 31,
2005, iGS recognized a loss of ($0.6) million.

As of December 31, 2006, iGSs principal swaps to hedge intercompany debt from
iGS to the Company will mature within one year. 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, 2006, the principal swaps to hedge intercompany debt did not meet qualifying criteria to receive hedge accounting. For the year ended December 31, 2006, iGS recognized a loss of ($0.3) million. For the
year ended December 31, 2005, iGS recognized a gain of $0.2 million.

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.



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

The
Companys investments in unconsolidated affiliates, and its percentage of ownership interests, are presented at December 31, 2006, 2005 and 2004, 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, |  
|                                 |  | 2006                         |   |  | 2005 |   |  | 2004 |  
|Cost method of accounting:       |  |                              |   |  |      |   |  |      |  
|Air2Web, Inc. (Air2Web)**        |  | 7                            | % |  | 14   | % |  | 14   | %
|Peopleclick, Inc.***             |  | 1                            | % |  | 1    | % |  | 1    | %
|The Concours Group****           |  | 4                            | % |  | 4    | % |  | 4    | %
|                                 |  |                              |  
|Equity method of accounting:     |  |                              |   |  |      |   |  |      |  
|Software AG (India) Private Ltd. |  | 41                           | % |  | 41   | % |  | 40   | %



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



---

|** | 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 Concours.
|---- | -------------------------------------------------------------------------------------------------------------------

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, 2006 and 2005. Ownership interests are
classified according to applicable accounting methods.



|                            |  |                        |       |                   |   |                |  |            |       |  |   |      
|--------------------------- |  | ---------------------- | ----- | ----------------- | - | -------------- |  | ---------- | ----- |  | - | -----
|                            |  | December 31, 2006      |       | December 31, 2005
|                            |  | Carrying Value         |       | Cost Basis        |   | Carrying Value |  | Cost Basis
|                            |  | (Dollars in thousands)
|Equity method of accounting |  | $                      | 808   |                   | $ | 191            |  | $          | 472   |  | $ | 172  
|Cost method of accounting   |  |                        | 590   |                   |   | 3,020          |  |            | 578   |  |   | 3,020
|                            |  |                        |       |                   |   |                |  |            |       |  |   |      
|                            |  | $                      | 1,398 |                   | $ | 3,211          |  | $          | 1,050 |  | $ | 3,192
|                            |  |                        |       |                   |   |                |  |            |       |  |   |      

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

Loss on Venture Investments and Affiliated Companies

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 Income of Affiliated Companies

The Company incurred equity income related to the Software AG joint venture of $0.3 million in 2006 and income of $0.3 million in 2005 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 was to be paid once certain conditions subsequent to closing were met. Subsequent to the closing date the
Company received $0.5 million of the escrow funds. The outstanding



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##### Table of Contents

iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



promissory note to the Company is $0.4 million. 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.

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, 2006, 2005
and 2004 (in thousands):



|                                                             |  |      |   |      |   |     |      |  |   |      |  
|------------------------------------------------------------ |  | ---- | - | ---- | - | --- | ---- |  | - | ---- | -
|                                                             |  | 2006 |   | 2005 |   |     | 2004 | 
|Gross unrealized (loss) gain                                 |  | $    |  |      | $ |    |      |  | $ | (122 | )
|Reclassification adjustment for gains realized in net income |  |      |  |      |   | (65 | )    |  |   | (121 | )
|Taxes allocated to unrealized (gain) loss                    |  |      |  |      | $ |    |      |  |   | 49   |  
|                                                             |  |      |   |      |   |     |      |  |   |      |  
|Change in other comprehensive income                         |  | $    |  |      | $ | (65 | )    |  | $ | (194 | )
|                                                             |  |      |   |      |   |     |      |  |   |      |  

5.    Goodwill and Intangible Assets

The following tables present the reconciliation of changes in the carrying value of goodwill and amortizable intangible assets for the years ended
December 31, 2006 and 2005 (in thousands):



|                                    |  |                |        |   |                           |   |                |  |              |     |  |   |        |  
|----------------------------------- |  | -------------- | ------ | - | ------------------------- | - | -------------- |  | ------------ | --- |  | - | ------ | -
|                                    |  | iGATESolutions |        |   | iGATEProfessionalServices |   | iGATECorporate |  | Consolidated |    
|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  |  
|Acquisitions                        |  |                | 1,874  |   |                           |   |               |  |              |    |  |   | 1,874  |  
|Foreign currency translation effect |  |                | 289    |   |                           |   |               |  |              |    |  |   | 289    |  
|                                    |  |                |        |   |                           |   |                |  |              |     |  |   |        |  
|Goodwill at December 31, 2006       |  | $              | 10,225 |   |                           | $ | 216            |  | $            | 573 |  | $ | 11,014 |  
|                                    |  |                |        |   |                           |   |                |  |              |     |  |   |        |  



|                               |  |                   |       |                         |   |             |  |                         |       |  |   |      
|------------------------------ |  | ----------------- | ----- | ----------------------- | - | ----------- |  | ----------------------- | ----- |  | - | -----
|                               |  | December 31, 2006 |       | December 31, 2005      
|                               |  | GrossAmount       |       | AccumulatedAmortization |   | GrossAmount |  | AccumulatedAmortization
|Amortizable intangible assets: |  |                   |       |                         |   |             |  |                         |       |  |   |      
|Intellectual property          |  | $                 | 570   |                         | $ | 570         |  | $                       | 570   |  | $ | 437  
|Customer relationships         |  |                   | 6,642 |                         |   | 4,936       |  |                         | 6,642 |  |   | 3,882
|Employment contracts           |  |                   | 1,720 |                         |   | 1,480       |  |                         | 1,720 |  |   | 1,105
|Other costs                    |  |                   | 314   |                         |   | 314         |  |                         | 314   |  |   | 257  
|                               |  |                   |       |                         |   |             |  |                         |       |  |   |      
|Total                          |  | $                 | 9,246 |                         | $ | 7,300       |  | $                       | 9,246 |  | $ | 5,681
|                               |  |                   |       |                         |   |             |  |                         |       |  |   |      



55



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



Amortization expense related to identifiable intangible assets was $1.6 million, $2.4 million and
$2.3 million for the years ended December 31, 2006, 2005 and 2004, respectively. Estimated annual amortization for the years ended December 31, 2007 through 2009 is shown below (in thousands):



|     |  |   |    
|---- |  | - | ---
|2007 |  | $ | 943
|2008 |  | $ | 694
|2009 |  | $ | 309

6.    Restructuring Charges

In 2006, the Company recovered $0.6 million related to its 2001 restructuring.

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. In 2005, the Company sold its Canadian operation and recovered $0.5 million of costs that were previously recorded as restructuring expenses. In
2006, the Company recovered $2.5 million related to its United Kingdom restructuring.

The components of the restructuring charges and the
restructuring accrual at December 31, 2006, 2005 and 2004 are as follows:



|                                        |  |                         |       |                  |   |                  |  |   |                                  |   |                  |   |     |                         |   |        |   |  |   |      
|--------------------------------------- |  | ----------------------- | ----- | ---------------- | - | ---------------- |  | - | -------------------------------- | - | ---------------- | - | --- | ----------------------- | - | ------ | - |  | - | -----
|(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
|                                        |  |                         |       |                   |   |      |                  |  |                                  |   |  |                  |      |   |                         |   |        |   |  |   |      



56



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



|                                   |  |                         |       |                   |   |        |                  |  |                                  |   |                  |   |     |                         |   |        |   |  |   |    
|---------------------------------- |  | ----------------------- | ----- | ----------------- | - | ------ | ---------------- |  | -------------------------------- | - | ---------------- | - | --- | ----------------------- | - | ------ | - |  | - | ---
|(in thousands)                     |  | AccruedDecember 31,2005 |       | CreditedtoExpense |   |        | AssetWrite-downs |  | ForeignCurrencyTranslationEffect |   | CashExpenditures |   |     | AccruedDecember 31,2006
|2004 lease costs of office closure |  | $                       | 3,859 |                   | $ | (2,507 | )                |  | $                                |  |                  | $ | 471 |                         | $ | (1,326 | ) |  | $ | 497
|2002 lease costs of office closure |  |                         | 68    |                   |   |       |                  |  |                                  |  |                  |   |    |                         |   | (68    | ) |  |   |   
|2001 lease costs of office closure |  |                         | 850   |                   |   | (555   | )                |  |                                  |  |                  |   |    |                         |   | (295   | ) |  |   |   
|                                   |  |                         |       |                   |   |        |                  |  |                                  |   |                  |   |     |                         |   |        |   |  |   |    
|Total                              |  | $                       | 4,777 |                   | $ | (3,062 | )                |  | $                                |  |                  | $ | 471 |                         | $ | (1,689 | ) |  | $ | 497
|                                   |  |                         |       |                   |   |        |                  |  |                                  |   |                  |   |     |                         |   |        |   |  |   |    



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

On September 14, 2006, the
Company renewed its credit facility (Renewed Facility) with PNC Bank N.A. (PNC). The Renewed Facility provides a maximum loan amount of $35.0 million and is unsecured. The provisions of the Renewed Facility requires the
Company to maintain domestic cash and cash equivalents and short-term investments of at least $35.0 million, maintain net tangible worth of at least $100.0 million and maintain a liquidity ratio of not less than 1.5 to 1.0. The liquidity ratio is
the sum of domestic cash and accounts receivable divided by total liabilities. The Company had letters of credit outstanding in the amount of $0.4 million and $0.4 million on the Renewed Facility as of December 31, 2006 and 2005,
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, 2006:



|                           |  |                        |        |                |   |             |  |   |       
|-------------------------- |  | ---------------------- | ------ | -------------- | - | ----------- |  | - | ------
|                           |  | OutsideParties         |        | RelatedParties |   | TotalAmount
|                           |  | (dollars in thousands)
|Period ending December 31, |  |                        |        |                |   |             |  |   |       
|2007                       |  | $                      | 3,514  |                | $ | 473         |  | $ | 3,987 
|2008                       |  |                        | 2,310  |                |   | 281         |  |   | 2,591 
|2009                       |  |                        | 1,539  |                |   |            |  |   | 1,539 
|2010                       |  |                        | 1,070  |                |   |            |  |   | 1,070 
|2011                       |  |                        | 817    |                |   |            |  |   | 817   
|Thereafter                 |  |                        | 994    |                |   |            |  |   | 994   
|                           |  |                        |        |                |   |             |  |   |       
|Total                      |  | $                      | 10,244 |                | $ | 754         |  | $ | 10,998
|                           |  |                        |        |                |   |             |  |   |       

Rental expense was approximately $6.2 million, $6.6 million and $6.1 million for the years ended
December 31, 2006, 2005 and 2004, respectively.

Other Commitments

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 $0.9 million, $1.3 million and
$1.0 million, in 2006, 2005 and 2004, respectively, as part of the agreement. The Company ultimately paid the executive $4.0 million through the expiration of the agreement on October 1, 2006.



57



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



As part of the Companys acquisition of a 95% interest in ICRI, 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 $0.5 million, $0.3 million and $0.5 million in 2006, 2005 and 2004 respectively, and may be required to fund ICRI
operations in 2007 and in subsequent years.

The Company is nearing completion of Phase III of its campus located in Bangalore and this
facility should be ready for occupancy in April 2007. 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 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.

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s outstanding voting shares. The customer may purchase iGS shares 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.



|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.



58



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



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.

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.

iGATE Corporation Stock Option Plans

Stock Based Compensation

In December 2004, the FASB issued Statement of Financial Accounting Standards (SFAS) No. 123(R), which requires compensation costs
related to share-based transactions, including employee share options, to be recognized in the financial statements based on fair value. SFAS No. 123(R) revised SFAS No. 123, as amended, Accounting for Stock-Based Compensation,
and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees.

Effective January 1, 2006, the Company
adopted the provisions of SFAS No. 123(R) using the modified prospective transition method. Under this transition method, the compensation cost recognized beginning January 1, 2006 includes compensation cost for (i) all
share-based payments granted prior to, but not yet vested



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



as of January 1, 2006, based on the grant-date fair value estimated in accordance with the original provisions of SFAS No. 123, and (ii) all
share-based payments granted subsequent to December 31, 2005 based on the grant-date fair value estimated in accordance with the provisions of SFAS No. 123(R). Compensation cost is generally recognized ratably over the requisite service
period or the retirement date for retirement eligible employees, if earlier. Prior period amounts have not been restated.

As a result of
the adoption of SFAS No. 123(R), the Companys results for the year ended December 31, 2006 include share-based compensation expense of $4.0 million. The total stock-based compensation cost has been included in the Consolidated
Statements of Operations within direct costs of $1.8 million and within selling, general and administrative expenses of $2.2 million. The Company has recognized a related tax benefit associated with its share-based compensation arrangements for
totaling $0.1 million.

Prior to January 1, 2006, the Company accounted for stock-based compensation plans in accordance with the
provisions of APB Opinion No. 25, as permitted by SFAS No. 123, and accordingly did not recognize compensation expense for the issuance of options with an exercise price equal to or greater than the market price at the date of grant. The
Company did recognize $0.8 million and $14.3 million of compensation expense for the years ended December 31, 2005 and 2004, respectively, related to a restricted stock grant and discounted stock options. Had the fair value based method as
prescribed by SFAS No. 123 been applied by the Company, the effect on net income and earnings per share for the years ended December 31, 2005 and 2004 would have been as follows ($ in thousands, except per share data):



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

iGATE Corporation Stock Incentive Plans

During 2000, the Company adopted the Second Amended and Restated Stock Incentive Plan (the Plan). The Plan provided 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. This plan expired by its terms on November 3, 2006.

On May 25, 2006, the 2006 iGATE Corporation Stock Incentive
Plan (the 2006 Plan and together with the Plan, the iGATE Plans) was approved by the Companys shareholders. This 2006 Plan replaced the Companys expired Plan and is substantially similar to it. Revisions were made
primarily to address changes in applicable law since 2000. The 2006 Plan provides that up to 14.7 million shares of the Companys common stock shall be allocated for issuance to officers, employees, directors and consultants of the Company
and its subsidiaries. At December 31, 2006, there were 14.1 million shares of common stock available for issuance under the 2006 Plan.



60



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



A summary of the stock option and restricted stock activity is presented below:



|                                                         |  |           |   |  |                              |       |                                                   |     |                                       |   |    
|-------------------------------------------------------- |  | --------- | - |  | ---------------------------- | ----- | ------------------------------------------------- | --- | ------------------------------------- | - | ---
|iGATE Stock Incentive Plan                               |  | Options   |   |  | WeightedAverageExercisePrice |       | WeightedAverageRemainingContractualTerm(in years) |     | Aggregate IntrinsicValue(in millions)
|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  |                                                   |     |                                       |   |    
|Granted                                                  |  | 100,000   |   |  |                              | 5.41  |                                                   |     |                                       |   |    
|Exercised                                                |  | (250,032  | ) |  |                              | 3.47  |                                                   |     |                                       |   |    
|Lapsed and forfeited                                     |  | (364,917  | ) |  |                              | 9.99  |                                                   |     |                                       |   |    
|                                                         |  |           |   |  |                              |       |                                                   |     |                                       |   |    
|Options outstanding at December 31, 2006                 |  | 1,686,258 |   |  | $                            | 6.68  |                                                   | 5.7 |                                       | $ | 4.3
|                                                         |  |           |   |  |                              |       |                                                   |     |                                       |   |    
|Options vested and expected to vest at December 31, 2006 |  | 1,671,761 |   |  | $                            | 6.70  |                                                   | 4.2 |                                       | $ | 4.3
|                                                         |  |           |   |  |                              |       |                                                   |     |                                       |   |    
|Options exercisable at December 31, 2006                 |  | 1,127,663 |   |  | $                            | 8.06  |                                                   | 4.6 |                                       | $ | 2.6
|                                                         |  |           |   |  |                              |       |                                                   |     |                                       |   |    
|                                                         |  |           |   | 
|iGATE Stock Incentive 2006 Plan                          |  | Options   |   |  | WeightedAverageExercisePrice |       | WeightedAverageRemainingContractualTerm(in years) |     | Aggregate IntrinsicValue(in millions)
|Options outstanding at December 31, 2005                 |  |          |   |  |                              |      |                                                   |     |                                       |   |    
|Granted                                                  |  | 15,000    |   |  | $                            | 6.00  |                                                   |     |                                       |   |    
|Exercised                                                |  |          |   |  |                              |      |                                                   |     |                                       |   |    
|Lapsed and forfeited                                     |  |          |   |  |                              |      |                                                   |     |                                       |   |    
|                                                         |  |           |   |  |                              |       |                                                   |     |                                       |   |    
|Options outstanding at December 31, 2006                 |  | 15,000    |   |  | $                            | 6.00  |                                                   | 9.6 |                                       | $ |   
|                                                         |  |           |   |  |                              |       |                                                   |     |                                       |   |    
|Options vested and expected to vest at December 31, 2006 |  | 15,000    |   |  | $                            | 6.00  |                                                   | 9.6 |                                       | $ |   
|                                                         |  |           |   |  |                              |       |                                                   |     |                                       |   |    
|Options exercisable at December 31, 2006                 |  |          |   |  |                              |      |                                                   |    |                                       | $ |   
|                                                         |  |           |   |  |                              |       |                                                   |     |                                       |   |    



|                                                            |  |                  |  |                            |     
|----------------------------------------------------------- |  | ---------------- |  | -------------------------- | ----
|iGATE Stock Incentive 2006 Plan                             |  | Restricted Stock |  | Weighted Average FairValue
|Unvested at December 31, 2005                               |  |                 |  | $                          |    
|Granted                                                     |  | 571,000          |  |                            | 4.27
|Vested                                                      |  |                 |  |                            |    
|Lapsed and forfeited                                        |  |                 |  |                            |    
|                                                            |  |                  |  |                            |     
|Unvested at December 31, 2006                               |  | 571,000          |  | $                          | 4.27
|                                                            |  |                  |  |                            |     
|Available for future grants of options and restricted stock |  | 14,114,000       |  |                            |     
|                                                            |  |                  |  |                            |     



61



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



During 2006, the Company granted 0.6 million shares of performance based restricted stock. Each
share is earned only after certain financial targets are met. Each performance target is assessed yearly over a four year to five year period, at which time the shares will be awarded upon achievement of the yearly target. If the performance targets
are not met, the shares that were to be awarded for the performance year will be cancelled. If the performance target is achieved, the shares are issued to the recipient. These shares are voting but are subject to forfeiture if performance targets
are not achieved or in the event of termination.

During 2006, 2005 and 2004, options covering a total of 0.1 million shares,
0.2 million shares and 0.6 million 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.

Compensation expense associated with the performance based grants that continue to vest based upon future
performance is measured based on the grant-date fair value of iGATE common stock. Compensation expense is recognized ratably over the performance period based upon the Companys estimated achievement of the established performance criteria.
Compensation expense is only recognized for those awards that are expected to vest, which is estimated based upon the assessment of both the probability that the performance criteria will be achieved and current period and historical forfeitures.

The total intrinsic value of options exercised during 2006 and 2005 was $0.6 million and $0.2 million, respectively. The fair value of
stock options vested during 2006, 2005 and 2004 was $0.8 million, $1.1 million and $1.1 million, respectively. The income tax benefit classified as a financing cash inflow for 2006, 2005 and 2004 was $0.1 million, less than $0.1 million and $0.3
million, respectively.

In 2006, the Company recognized $0.9 million of compensation expense associated with the iGATE stock incentive
plan in the Companys Condensed Consolidated Statements of Operations. As of December 31, 2006, approximately $3.4 million of unrecognized compensation cost is expected to be recognized for the unvested shares. This expense is expected to
be recognized over a weighted-average period of 1.9 years.

iGATE Stock Options Outstanding at December 31, 2006:



|                       |  |                     |  |                                                  |  |                                |        |         |           |                                |   |       
|---------------------- |  | ------------------- |  | ------------------------------------------------ |  | ------------------------------ | ------ | ------- | --------- | ------------------------------ | - | ------
|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               |  | 4.24                                             |  | $                              | 1.875  |         | 5,000     |                                | $ | 1.875 
|1.930    1.930        |  | 301,531             |  | 4.75                                             |  |                                | 1.930  |         | 261,531   |                                |   | 1.930 
|2.010    2.850        |  | 25,000              |  | 5.53                                             |  |                                | 2.500  |         | 23,125    |                                |   | 2.474 
|2.960    2.960        |  | 235,563             |  | 7.64                                             |  |                                | 2.960  |         | 117,437   |                                |   | 2.960 
|3.550    3.680        |  | 172,500             |  | 8.00                                             |  |                                | 3.656  |         | 2,500     |                                |   | 3.630 
|3.700    4.110        |  | 196,988             |  | 5.99                                             |  |                                | 3.932  |         | 165,269   |                                |   | 3.901 
|4.190    5.410        |  | 194,975             |  | 8.79                                             |  |                                | 4.867  |         | 44,725    |                                |   | 4.924 
|5.580    6.000        |  | 182,657             |  | 7.06                                             |  |                                | 5.629  |         | 121,032   |                                |   | 5.597 
|9.000  15.875         |  | 229,768             |  | 2.18                                             |  |                                | 13.777 |         | 229,768   |                                |   | 13.777
|17.020  33.125        |  | 157,276             |  | 1.79                                             |  |                                | 21.978 |         | 157,276   |                                |   | 21.978
|                       |  |                     |  |                                                  |  |                                |        |         |           |                                |   |       
|$  1.875$33.125       |  | 1,701,258           |  | 5.72                                             |  | $                              | 6.675  |         | 1,127,663 |                                | $ | 8.063 
|                       |  |                     |  |                                                  |  |                                |        |         |           |                                |   |       



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



iGATE options outstanding and exercisable at December 31, 2005 were 2.2 million and
1.5 million, respectively, at prices ranging from $1.875 to $33.125 per share. iGATE options outstanding and exercisable at December 31, 2004 were 2.6 million and 1.5 million, respectively, at prices ranging from $1.875 to
$33.125 per share.

In addition, iGATE Global Solutions Limited, the Companys majority-owned Indian subsidiary (iGS) also
maintains its own stock option plans. iGSs stock option plans were approved by its Boards of Directors and are discussed below.

iGS Stock Option Plans

iGS maintains two employee stock option plans herein referred to as Plan 1 and
Plan 2 and collectively as the iGS Plans. The iGS Plans are administered by a committee appointed by the Board of Directors of iGS. Plan 1 provides for the issuance of a maximum of 3.0 million shares of iGS common stock
and Plan 2 provides for the issuance of a maximum of 4.5 million shares of iGS common stock. Options to purchase iGS common stock are typically granted at the prevailing market values for each of the iGS Plans.

Options for each of the above iGS Plans generally vest over a four year period and expire ten years from the date of grant or earlier if an option holder
ceases to be employed with iGS, iGSs holding company or any iGS subsidiary companies.



|                                                         |  |           |   |  |                              |      |                                                   |     |                                      |   |    
|-------------------------------------------------------- |  | --------- | - |  | ---------------------------- | ---- | ------------------------------------------------- | --- | ------------------------------------ | - | ---
|iGATE Global Solutions Stock Option Plan 1               |  | Options   |   |  | WeightedAverageExercisePrice |      | WeightedAverageRemainingContractualTerm(in years) |     | AggregateIntrinsicValue(in millions)
|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 |                                                   |     |                                      |   |    
|Granted                                                  |  | 713,585   |   |  |                              | 4.70 |                                                   |     |                                      |   |    
|Exercised                                                |  | (293,180  | ) |  |                              | 2.30 |                                                   |     |                                      |   |    
|Lapsed and forfeited                                     |  | (766,362  | ) |  |                              | 4.41 |                                                   |     |                                      |   |    
|                                                         |  |           |   |  |                              |      |                                                   |     |                                      |   |    
|Options outstanding at December 31, 2006                 |  | 1,146,677 |   |  | $                            | 3.42 |                                                   | 7.2 |                                      | $ | 5.1
|                                                         |  |           |   |  |                              |      |                                                   |     |                                      |   |    
|Options vested and expected to vest at December 31, 2006 |  | 1,108,524 |   |  | $                            | 3.39 |                                                   | 7.3 |                                      | $ | 4.6
|                                                         |  |           |   |  |                              |      |                                                   |     |                                      |   |    
|Options exercisable at December 31, 2006                 |  | 762,066   |   |  | $                            | 3.05 |                                                   | 4.3 |                                      | $ | 5.0
|                                                         |  |           |   |  |                              |      |                                                   |     |                                      |   |    



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



|                                                         |  |            |   |  |                              |      |                                                   |     |                                      |   |    
|-------------------------------------------------------- |  | ---------- | - |  | ---------------------------- | ---- | ------------------------------------------------- | --- | ------------------------------------ | - | ---
|iGATE Global Solutions Stock Option Plan 2               |  | Options    |   |  | WeightedAverageExercisePrice |      | WeightedAverageRemainingContractualTerm(in years) |     | AggregateIntrinsicValue(in millions)
|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  |   |  | $                            | 4.68 |                                                   |     |                                      |   |    
|Granted                                                  |  |           |   |  |                              |     |                                                   |     |                                      |   |    
|Exercised                                                |  | (20,330    | ) |  |                              | 2.50 |                                                   |     |                                      |   |    
|Lapsed and forfeited                                     |  | (1,872,163 | ) |  |                              | 5.18 |                                                   |     |                                      |   |    
|                                                         |  |            |   |  |                              |      |                                                   |     |                                      |   |    
|Options outstanding at December 31, 2006                 |  | 1,069,741  |   |  | $                            | 4.34 |                                                   | 8.0 |                                      | $ | 3.8
|                                                         |  |            |   |  |                              |      |                                                   |     |                                      |   |    
|Options vested and expected to vest at December 31, 2006 |  | 1,015,771  |   |  | $                            | 4.37 |                                                   | 8.2 |                                      | $ | 3.4
|                                                         |  |            |   |  |                              |      |                                                   |     |                                      |   |    
|Options exercisable at December 31, 2006                 |  | 525,688    |   |  | $                            | 4.94 |                                                   | 7.7 |                                      | $ | 3.0
|                                                         |  |            |   |  |                              |      |                                                   |     |                                      |   |    

iGS also maintains an employee restricted stock unit plan herein referred to as RSU
Plan. The RSU Plan is administered by the Compensation Committee appointed by the Board of Directors of iGS. The RSU Plan is a separate plan set up in partial modification of the above iGS Plans and provides for the issuance of a maximum of
3.0 million shares of iGS common stock. These restricted stock units are granted at a $0.09 strike price.

Restricted stock unit
grants for the RSU Plan generally vest over a four year period and expire twelve years from the date of grant or earlier if a holder ceases to be employed by or associated with iGS for any reason.

On October 10, 2006, iGS exchanged approximately 1.75 million of iGS employee stock options for approximately 0.5 million of iGS
restricted stock units. The proposed exchange was approved by iGSs Board on October 10, 2006. The exchange was not mandatory and was solely the prerogative of each employee. At the date of the exchange the iGS closing stock price was
$4.20.

The fair value of restricted stock unit grants was estimated using the prevailing market value of iGS common stock at the date of
grant. The fair value is then amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. A forfeiture rate is also applied to the estimated compensation cost of the granted restricted
stock units. Forfeitures are estimated based on voluntary termination behavior, as well as an analysis of actual option forfeitures.



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



|                                                                  |  |                      |   |  |                          |     
|----------------------------------------------------------------- |  | -------------------- | - |  | ------------------------ | ----
|iGATE Global Solutions Restricted Stock Unit Plan                 |  | RestrictedStockUnits |   |  | WeightedAverageFairValue
|Unvested at December 31, 2005                                     |  |                     |   |  |                          |    
|Granted                                                           |  | 919,077              |   |  | $                        | 5.19
|Exercised                                                         |  |                     |   |  |                          |    
|Lapsed and forfeited                                              |  | (44,931              | ) |  |                          | 5.19
|                                                                  |  |                      |   |  |                          |     
|Unvested at December 31, 2006                                     |  | 874,146              |   |  | $                        | 5.19
|                                                                  |  |                      |   |  |                          |     
|Available for future grants of options and restricted stock units |  | 3,453,708            |   |  |                          |     
|                                                                  |  |                      |   |  |                          |     

Total available stock options and/or restricted units to be granted for all of the iGS Plans
combined cannot exceed 7.5 million shares.

The total intrinsic value of options exercised during 2006 and 2005 was $0.4 million and
$0.4 million, respectively. The fair value of stock options vested during 2006, 2005 and 2004 was $3.3 million, $2.9 million and $2.6 million, respectively.

In 2006, the Company recognized $3.1 million of compensation expense associated with the iGS stock option plans in the Companys Condensed Consolidated Statements of Operations. As of December 31, 2006,
approximately $7.7 million of unrecognized compensation cost is expected to be recognized for the unvested shares. This expense is expected to be recognized over a weighted-average period of 1.5 years.

iGATE Global Solutions Stock Options Outstanding at December 31, 2006 Plan 1:



|                       |  |                     |  |                                                  |  |                                |       |         |         |                                |   |      
|---------------------- |  | ------------------- |  | ------------------------------------------------ |  | ------------------------------ | ----- | ------- | ------- | ------------------------------ | - | -----
|Options Outstanding    |  | Options Exercisable
|Range ofExercise Price |  | Options             |  | Weighted AverageRemainingContractual Life(Years) |  | Weighted AverageExercise Price |       | Options |         | Weighted AverageExercise Price
|$ 2.270$ 2.270        |  | 167,894             |  | 5.99                                             |  | $                              | 2.270 |         | 166,299 |                                | $ | 2.270
|2.290   4.540         |  | 838,696             |  | 7.33                                             |  |                                | 3.330 |         | 527,136 |                                |   | 3.010
|4.560   6.800         |  | 140,087             |  | 7.91                                             |  |                                | 5.320 |         | 68,631  |                                |   | 5.240
|                       |  |                     |  |                                                  |  |                                |       |         |         |                                |   |      
|$ 2.270$ 6.800        |  | 1,146,677           |  | 7.21                                             |  | $                              | 3.420 |         | 762,066 |                                | $ | 3.050
|                       |  |                     |  |                                                  |  |                                |       |         |         |                                |   |      

iGATE Global Solutions Stock Options Outstanding at December 31, 2006 Plan 2:



|                       |  |                     |  |                                                  |  |                                |       |         |         |                                |   |      
|---------------------- |  | ------------------- |  | ------------------------------------------------ |  | ------------------------------ | ----- | ------- | ------- | ------------------------------ | - | -----
|Options Outstanding    |  | Options Exercisable
|Range ofExercise Price |  | Options             |  | Weighted AverageRemainingContractual Life(Years) |  | Weighted AverageExercise Price |       | Options |         | Weighted AverageExercise Price
|$ 2.270$ 2.270        |  | 428,649             |  | 8.42                                             |  | $                              | 2.270 |         | 130,866 |                                | $ | 2.270
|4.560   6.800         |  | 489,342             |  | 7.83                                             |  |                                | 5.300 |         | 281,345 |                                |   | 5.310
|6.810   9.070         |  | 151,750             |  | 7.06                                             |  |                                | 7.080 |         | 113,477 |                                |   | 7.080
|                       |  |                     |  |                                                  |  |                                |       |         |         |                                |   |      
|$ 2.270$ 9.070        |  | 1,069,741           |  | 7.96                                             |  | $                              | 4.340 |         | 525,688 |                                | $ | 4.940
|                       |  |                     |  |                                                  |  |                                |       |         |         |                                |   |      



65



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



The fair value of each option grant under the iGATE Plans and iGS Plans was estimated using the
Black-Scholes option pricing model. The fair value is then amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. Use of a valuation model requires management to make certain
assumptions with respect to selected model inputs. Expected volatility was calculated based on the historical volatility of either the iGATE or iGS common stock and implied volatility derived from exchange traded options. The average expected life
was based on the contractual term of the option and expected employee exercise and post-vesting employment termination behavior. The risk-free interest rate for each of the iGATE Plans was based on U.S. Treasury zero-coupon issues with a remaining
term equal to the expected life assumed at the date of grant. The risk-free rate for each of the iGS Plans was based on an equivalent Indian risk-free rate. Forfeitures are estimated based on voluntary termination behavior, as well as an analysis of
actual option forfeitures. The weighted-average assumptions used in the Black-Scholes option pricing model are as follows:



|                                                            |  |       |           |   |     |   |         |  
|----------------------------------------------------------- |  | ----- | --------- | - | --- | - | ------- | -
|Year Ended December 31, 2006                                |  | iGATE |           |   | iGS |  
|Weighted average fair values of options granted during 2006 |  | $     | 3.17      |   |     | $ | 2.60    |  
|Risk-free interest rate                                     |  |       | 4.65      | % |     |   | 7.00    | %
|Expected dividend yield                                     |  |       | 0.0       | % |     |   | 0.5     | %
|Expected life of options                                    |  |       | 4.5 years |   |     |   | 5 years |  
|Expected volatility rate                                    |  |       | 66.5      | % |     |   | 61.8    | %
|                                                            |  |      
|Year Ended December 31, 2005                                |  | iGATE |           |   | iGS |  
|Weighted average fair values of options granted during 2005 |  | $     | 2.76      |   |     | $ | 3.01    |  
|Risk-free interest rate                                     |  |       | 4.00      | % |     |   | 4.00    | %
|Expected dividend yield                                     |  |       | 0.0       | % |     |   | 0.0     | %
|Expected life of options                                    |  |       | 5 years   |   |     |   | 4 years |  
|Expected volatility rate                                    |  |       | 85.4      | % |     |   | 63.8    | %
|                                                            |  |      
|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    | %



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

The following paragraphs describe
each of the acquisitions made by the Company during 2006, 2005 and 2004. 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,
2006. 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.

On April 24, 2006, iGS entered into a Master Services Agreement with LoanPro, LLC (LoanPro) to perform offshore mortgage servicing. In
conjunction with this agreement, iGS acquired a 5% ownership interest



66



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



in LoanPro for a nominal amount with the option to acquire up to an additional 55%. iGS exercised this option on July 1, 2006 and acquired the
additional 55% of LoanPro for a nominal amount. In the third quarter of 2006, iGS consolidated LoanPros operations into the iGATE Solutions segment. iGS has loaned $1.1 million to LoanPro as of February 28, 2007. The loan pays 6% interest
and is due in 2009. Assets acquired were insignificant and did not require a purchase price allocation. Proforma disclosure was also not required due to immateriality.

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 iGS, for a nominal
amount. The acquisition was deemed to be immaterial not requiring pro-forma disclosure. Assets acquired were insignificant and did not require 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 Operations as part of iGATE Solutions segment.



|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, 2004, both operations combined had
approximately $20.5 million in revenues with operating income of approximately $0.1 million. The purchase price received in cash for both transactions was approximately $9.8 million.



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



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



|                                    |  |      |       
|----------------------------------- |  | ---- | ------
|                                    |  | 2004
|Revenues                            |  | $    | 20,540
|                                    |  |      |       
|Income from operations              |  |      | 115   
|Gain on sale of operations          |  |      | 3,749 
|                                    |  |      |       
|Income before income taxes          |  |      | 3,864 
|Income tax expense                  |  |      | 46    
|                                    |  |      |       
|Income from discontinued operations |  | $    | 3,818 
|                                    |  |      |       



|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, 2006, 2005 and 2004:



|                                   |  |                        |        |   |      |   |       |  |   |         |  
|---------------------------------- |  | ---------------------- | ------ | - | ---- | - | ----- |  | - | ------- | -
|                                   |  | December 31,           |       
|                                   |  | 2006                   |        |   | 2005 |   | 2004  | 
|                                   |  | (Dollars in Thousands) |       
|Income (loss) before income taxes: |  |                        |        |   |      |   |       |  |   |         |  
|Domestic                           |  | $                      | (357   | ) |      | $ | 4,460 |  | $ | (16,135 | )
|Foreign                            |  |                        | 11,310 |   |      |   | 2,622 |  |   | (764    | )
|                                   |  |                        |        |   |      |   |       |  |   |         |  
|Income (loss) before income taxes  |  | $                      | 10,953 |   |      | $ | 7,082 |  | $ | (16,899 | )
|                                   |  |                        |        |   |      |   |       |  |   |         |  

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, 2006, 2005 and 2004:



|                                           |  |                        |        |   |      |   |        |      |  |   |        |  
|------------------------------------------ |  | ---------------------- | ------ | - | ---- | - | ------ | ---- |  | - | ------ | -
|                                           |  | December 31,           |       
|                                           |  | 2006                   |        |   | 2005 |   |        | 2004 | 
|                                           |  | (Dollars in Thousands) |       
|Current provision(benefit) :               |  |                        |        |   |      |   |        |      |  |   |        |  
|Federal                                    |  | $                      | 1,648  |   |      | $ | (2,239 | )    |  | $ | (1,344 | )
|State                                      |  |                        | 479    |   |      |   | 300    |      |  |   | 15     |  
|Foreign                                    |  |                        | 410    |   |      |   | 1,123  |      |  |   | 3,352  |  
|                                           |  |                        |        |   |      |   |        |      |  |   |        |  
|Total current provision (benefit)          |  |                        | 2,537  |   |      |   | (816   | )    |  |   | 2,023  |  
|                                           |  |                        |        |   |      |   |        |      |  |   |        |  
|Deferred provision (benefit):              |  |                        |        |   |      |   |        |      |  |   |        |  
|Federal                                    |  |                        | (1,213 | ) |      |   | (3,791 | )    |  |   | (4,935 | )
|State                                      |  |                        | (182   | ) |      |   | (519   | )    |  |   | (804   | )
|Foreign                                    |  |                        | 14     |   |      |   | 463    |      |  |   | 790    |  
|Valuation allowance                        |  |                        | 1,093  |   |      |   | 4,776  |      |  |   | 8,056  |  
|                                           |  |                        |        |   |      |   |        |      |  |   |        |  
|Total deferred (benefit) provision         |  |                        | (288   | ) |      |   | 929    |      |  |   | 3,107  |  
|                                           |  |                        |        |   |      |   |        |      |  |   |        |  
|Total provision (benefit) for income taxes |  | $                      | 2,249  |   |      | $ | 113    |      |  | $ | 5,130  |  
|                                           |  |                        |        |   |      |   |        |      |  |   |        |  



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



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, 2006, 2005 and 2004 were as follows:



|                                                    |  |                  |        |   |                  |       |   |                  |   |        |   |  |       |   |  |   |        |   |  |       |   
|--------------------------------------------------- |  | ---------------- | ------ | - | ---------------- | ----- | - | ---------------- | - | ------ | - |  | ----- | - |  | - | ------ | - |  | ----- | --
|                                                    |  | December 31,2006 |        |   | December 31,2005 |       |   | December 31,2004 |  
|Income taxes computed at the federal statutory rate |  | $                | 3,834  |   |                  | 35.0  | % |                  | $ | 2,479  |   |  | 35.0  | % |  | $ | (5,914 | ) |  | 35.0  | % 
|State income taxes, net of federal tax benefit      |  |                  | 286    |   |                  | 2.6   |   |                  |   | 238    |   |  | 3.4   |   |  |   | 310    |   |  | (1.8  | ) 
|Foreign taxes at other than U.S. statutory rate     |  |                  | (3,534 | ) |                  | (32.3 | ) |                  |   | 668    |   |  | 9.4   |   |  |   | 4,408  |   |  | (26.1 | ) 
|Reversal of prior year accrued taxes                |  |                  |       |   |                  |      |   |                  |   | (2,200 | ) |  | (31.1 | ) |  |   |       |   |  |      |   
|Minority interest                                   |  |                  | 263    |   |                  | 2.4   |   |                  |   | 739    |   |  | 10.4  |   |  |   | 680    |   |  | (4.0  | ) 
|Nondeductible goodwill                              |  |                  | 55     |   |                  | 0.5   |   |                  |   | 145    |   |  | 2.0   |   |  |   | 213    |   |  | (1.3  | ) 
|Nondeductible compensation                          |  |                  | 238    |   |                  | 2.2   |   |                  |   | 253    |   |  | 3.6   |   |  |   | 239    |   |  | (1.4  | ) 
|Capital losses in investments                       |  |                  |       |   |                  |      |   |                  |   | (6,891 | ) |  | (97.3 | ) |  |   | (2,524 | ) |  | 14.9  |   
|Othernet                                           |  |                  | 14     |   |                  | 0.1   |   |                  |   | (94    | ) |  | (1.3  | ) |  |   | (338   | ) |  | 2.0   |   
|Valuation allowance                                 |  |                  | 1,093  |   |                  | 10.0  |   |                  |   | 4,776  |   |  | 67.4  |   |  |   | 8,056  |   |  | (47.7 | ) 
|                                                    |  |                  |        |   |                  |       |   |                  |   |        |   |  |       |   |  |   |        |   |  |       |   
|                                                    |  | $                | 2,249  |   |                  | 20.5  | % |                  | $ | 113    |   |  | 1.6   | % |  | $ | 5,130  |   |  | (30.4 | )%
|                                                    |  |                  |        |   |                  |       |   |                  |   |        |   |  |       |   |  |   |        |   |  |       |   

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, 2006, 2005
and 2004, the tax holiday resulted in benefits of $2.7 million, $(0.7) million and $0.3 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.



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iGATE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

AS OF DECEMBER
31, 2005 AND 2004



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



|                                                      |  |                        |         |   |      |   |         |  
|----------------------------------------------------- |  | ---------------------- | ------- | - | ---- | - | ------- | -
|                                                      |  | December 31,           |        
|                                                      |  | 2006                   |         |   | 2005 |  
|                                                      |  | (Dollars in Thousands) |        
|Deferred tax assets:                                  |  |                        |         |   |      |   |         |  
|Allowance for doubtful accounts and employee advances |  | $                      | 452     |   |      | $ | 622     |  
|Accrued health benefits                               |  |                        | 183     |   |      |   | 29      |  
|Accrued vacation and bonuses                          |  |                        | 861     |   |      |   | 1,171   |  
|Depreciation                                          |  |                        | 167     |   |      |   | 190     |  
|Section 123(R) compensation                           |  |                        | 267     |   |      |   |        |  
|Foreign currency translation adjustments              |  |                        | 713     |   |      |   | 797     |  
|Capital losses in investments                         |  |                        | 14,721  |   |      |   | 15,057  |  
|Deferred compensation                                 |  |                        | 6,202   |   |      |   | 5,778   |  
|Net operating loss carryovers                         |  |                        | 3,772   |   |      |   | 2,310   |  
|Accrued restructuring charges                         |  |                        |        |   |      |   | 369     |  
|Other                                                 |  |                        | 63      |   |      |   | 75      |  
|Valuation allowance                                   |  |                        | (25,045 | ) |      |   | (23,952 | )
|                                                      |  |                        |         |   |      |   |         |  
|Total deferred tax assets                             |  |                        | 2,356   |   |      |   | 2,446   |  
|                                                      |  |                        |         |   |      |   |         |  
|Deferred tax liabilities                              |  |                        |         |   |      |   |         |  
|Amortization of acquired intangibles                  |  |                        | 609     |   |      |   | 995     |  
|Prepaid expenses                                      |  |                        | 409     |   |      |   | 363     |  
|Section 481(a) adjustments                            |  |                        |        |   |      |   | 38      |  
|Unrecognized gain on iGATE Global Solutions IPS       |  |                        | 9,710   |   |      |   | 9,710   |  
|                                                      |  |                        |         |   |      |   |         |  
|Total deferred tax liabilities                        |  |                        | 10,728  |   |      |   | 11,106  |  
|                                                      |  |                        |         |   |      |   |         |  
|Net deferred tax liability                            |  | $                      | 8,372   |   |      | $ | 8,660   |  
|                                                      |  |                        |         |   |      |   |         |  
|Net deferred tax liability                            |  | $                      | 8,372   |   |      | $ | 8,660   |  
|Plus: net current deferred tax asset                  |  |                        | 1,111   |   |      |   | 1,058   |  
|                                                      |  |                        |         |   |      |   |         |  
|Net long-term deferred tax liability                  |  | $                      | 9,483   |   |      | $ | 9,718   |  
|                                                      |  |                        |         |   |      |   |         |  

During 2006 and 2005, 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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|15. | Earnings per Share
|--- | ------------------

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



|                                                             |  |                                       |        |      |   |        |  |   |         |  
|------------------------------------------------------------ |  | ------------------------------------- | ------ | ---- | - | ------ |  | - | ------- | -
|                                                             |  | Year Ended December 31,               |       
|                                                             |  | 2006                                  |        | 2005 |   | 2004   | 
|                                                             |  | (in thousands, except per share data) |       
|Basic earnings (loss) per share:                             |  |                                       |        |      |   |        |  |   |         |  
|Net income (loss) from continuing operations                 |  | $                                     | 8,704  |      | $ | 6,969  |  | $ | (22,029 | )
|                                                             |  |                                       |        |      |   |        |  |   |         |  
|Divided by:                                                  |  |                                       |        |      |   |        |  |   |         |  
|Weighted average common shares                               |  |                                       | 52,939 |      |   | 52,530 |  |   | 52,721  |  
|                                                             |  |                                       |        |      |   |        |  |   |         |  
|Basic earnings (loss) per share from continuing operations   |  | $                                     | 0.16   |      | $ | 0.13   |  | $ | (0.42   | )
|                                                             |  |                                       |        |      |   |        |  |   |         |  
|Diluted earnings (loss) per share:                           |  |                                       |        |      |   |        |  |   |         |  
|Net income (loss) from continuing operations                 |  | $                                     | 8,704  |      | $ | 6,969  |  | $ | (22,029 | )
|                                                             |  |                                       |        |      |   |        |  |   |         |  
|Divided by:                                                  |  |                                       |        |      |   |        |  |   |         |  
|Weighted average common shares                               |  |                                       | 53,278 |      |   | 52,734 |  |   | 52,721  |  
|                                                             |  |                                       |        |      |   |        |  |   |         |  
|Diluted earnings (loss) per share from continuing operations |  | $                                     | 0.16   |      | $ | 0.13   |  | $ | (0.42   | )
|                                                             |  |                                       |        |      |   |        |  |   |         |  

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 0.9 million, 1.1 million and 1.3 million shares for the years ended December 31, 2006, 2005 and 2004, 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 would have included 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 Shared Services. 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.

As of January 1, 2006, jobcurry
operations are included in the iPS segment. jobcurry was previously included as part of iGATE Shared Services. All prior periods have been reclassified to reflect the changes to our segment reporting. Accordingly, revenues of $1.3 million, cost of
revenues of $0.7 million, gross margin of $0.6 million, selling, general and administrative expenses of $0.7 million and loss from operations of $(0.1) million have been reclassified from the iGATE Shared Services segment to the iPS Segment for
2005. In addition, revenues of $1.2 million, cost of revenues of $0.5 million, gross margin of $0.7 million, selling, general and administrative expenses of $0.6 million and income from operations of $0.1 million have been reclassified from the
iGATE Shared Services segment to the iPS Segment for 2004.

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, IT systems maintenance and Business Process Outsourcing (BPO). Other offerings include enterprise applications



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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).

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 services North America.

iGATE Shared Services (formerly iGATE Corporate)

In 2006, 2005 and 2004, iGATE Shared Services includes the operations of ICRI acquired on February 26, 2003, iGATE Clinical Research International Private Ltd. acquired on 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, 2006, 2005 and 2004:



|                                                     |  |                              |         |   |                           |   |         |                        |  |   |        |   |  |   |         |  
|---------------------------------------------------- |  | ---------------------------- | ------- | - | ------------------------- | - | ------- | ---------------------- |  | - | ------ | - |  | - | ------- | -
|                                                     |  | Year Ended December 31, 2006 |        
|                                                     |  | iGATESolutions               |         |   | iGATEProfessionalServices |   |         | iGATESharedServices(1) |  |   | Total  |  
|                                                     |  | (Dollars in thousands)       |        
|External revenues                                    |  | $                            | 169,570 |   |                           | $ | 112,476 |                        |  | $ | 1,542  |   |  | $ | 283,588 |  
|Cost of revenues                                     |  |                              | 122,694 |   |                           |   | 86,594  |                        |  |   | 924    |   |  |   | 210,212 |  
|                                                     |  |                              |         |   |                           |   |         |                        |  |   |        |   |  |   |         |  
|Gross margin                                         |  |                              | 46,876  |   |                           |   | 25,882  |                        |  |   | 618    |   |  |   | 73,376  |  
|Selling, general and administrative                  |  |                              | 42,587  |   |                           |   | 16,459  |                        |  |   | 10,574 |   |  |   | 69,620  |  
|Restructuring recovery                               |  |                              | (2,507  | ) |                           |   | (555    | )                      |  |   |       |   |  |   | (3,062  | )
|                                                     |  |                              |         |   |                           |   |         |                        |  |   |        |   |  |   |         |  
|Income (loss) from operations                        |  | $                            | 6,796   |   |                           | $ | 9,978   |                        |  | $ | (9,956 | ) |  | $ | 6,818   |  
|                                                     |  |                              |         |   |                           |   |         |                        |  |   |        |   |  |   |         |  
|Other income, net                                    |  |                              |         |   |                           |   |         |                        |  |   | 3,992  |   |  |   | 3,992   |  
|Minority interest                                    |  |                              |         |   |                           |   |         |                        |  |   | (752   | ) |  |   | (752    | )
|Gain on venture investments and affiliated companies |  |                              |         |   |                           |   |         |                        |  |   | 578    |   |  |   | 578     |  
|Equity in income of affiliated companies             |  |                              |         |   |                           |   |         |                        |  |   | 317    |   |  |   | 317     |  
|                                                     |  |                              |         |   |                           |   |         |                        |  |   |        |   |  |   |         |  
|(Loss) income before income taxes                    |  |                              |         |   |                           |   |         |                        |  | $ | (5,821 | ) |  | $ | 10,953  |  
|                                                     |  |                              |         |   |                           |   |         |                        |  |   |        |   |  |   |         |  



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|                                                          |  |                              |         |   |                             |   |         |                         |  |   |         |   |  |   |         |  
|--------------------------------------------------------- |  | ---------------------------- | ------- | - | --------------------------- | - | ------- | ----------------------- |  | - | ------- | - |  | - | ------- | -
|                                                          |  | Year Ended December 31, 2005 |        
|                                                          |  | iGATE Solutions              |         |   | iGATE Professional Services |   |         | iGATE SharedServices(1) |  |   | Total   |  
|                                                          |  | (Dollars in thousands)       |        
|External revenues                                         |  | $                            | 138,032 |   |                             | $ | 136,775 |                         |  | $ | 1,185   |   |  | $ | 275,992 |  
|Cost of revenues                                          |  |                              | 97,108  |   |                             |   | 107,354 |                         |  |   | 648     |   |  |   | 205,110 |  
|                                                          |  |                              |         |   |                             |   |         |                         |  |   |         |   |  |   |         |  
|Gross margin                                              |  |                              | 40,924  |   |                             |   | 29,421  |                         |  |   | 537     |   |  |   | 70,882  |  
|Selling, general and administrative                       |  |                              | 38,948  |   |                             |   | 17,173  |                         |  |   | 11,362  |   |  |   | 67,483  |  
|Restructuring recovery                                    |  |                              |        |   |                             |   | (481    | )                       |  |   |        |   |  |   | (481    | )
|                                                          |  |                              |         |   |                             |   |         |                         |  |   |         |   |  |   |         |  
|Income (loss) from operations                             |  | $                            | 1,976   |   |                             | $ | 12,729  |                         |  | $ | (10,825 | ) |  | $ | 3,880   |  
|                                                          |  |                              |         |   |                             |   |         |                         |  |   |         |   |  |   |         |  
|Other expense, net                                        |  |                              |         |   |                             |   |         |                         |  |   | (275    | ) |  |   | (275    | )
|Minority interest                                         |  |                              |         |   |                             |   |         |                         |  |   | (261    | ) |  |   | (261    | )
|Gain on sale of stock of subsidiary                       |  |                              |         |   |                             |   |         |                         |  |   | 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                         |  |                              |         |   |                             |   |         |                         |  | $ | (7,623  | ) |  | $ | 7,082   |  
|                                                          |  |                              |         |   |                             |   |         |                         |  |   |         |   |  |   |         |  
|                                                          | 
|                                                          |  | Year Ended December 31, 2004 |        
|                                                          |  | iGATE Solutions              |         |   | iGATE Professional Services |   |         | iGATE SharedServices(1) |  |   | Total   |  
|                                                          |  | (Dollars in thousands)       |        
|External revenues                                         |  | $                            | 131,484 |   |                             | $ | 132,439 |                         |  | $ | 662     |   |  | $ | 264,585 |  
|Cost of revenues                                          |  |                              | 92,329  |   |                             |   | 104,637 |                         |  |   | 611     |   |  |   | 197,577 |  
|                                                          |  |                              |         |   |                             |   |         |                         |  |   |         |   |  |   |         |  
|Gross margin                                              |  |                              | 39,155  |   |                             |   | 27,802  |                         |  |   | 51      |   |  |   | 67,008  |  
|Selling, general and administrative                       |  |                              | 55,197  |   |                             |   | 17,601  |                         |  |   | 9,281   |   |  |   | 82,079  |  
|Gain on sale of land                                      |  |                              | (3,615  | ) |                             |   |        |                         |  |   |        |   |  |   | (3,615  | )
|Restructuring charges                                     |  |                              | 4,896   |   |                             |   | 909     |                         |  |   |        |   |  |   | 5,805   |  
|                                                          |  |                              |         |   |                             |   |         |                         |  |   |         |   |  |   |         |  
|(Loss) income from operations                             |  | $                            | (17,323 | ) |                             | $ | 9,292   |                         |  | $ | (9,230  | ) |  | $ | (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                                  |  |                              |         |   |                             |   |         |                         |  | $ | (8,868  | ) |  | $ | (16,899 | )
|                                                          |  |                              |         |   |                             |   |         |                         |  |   |         |   |  |   |         |  

---

|(1) | Shared Services 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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Total assets by segment were as follows:



|                                                        |  |                         |         |      |   |         |  |   |        
|------------------------------------------------------- |  | ----------------------- | ------- | ---- | - | ------- |  | - | -------
|                                                        |  | Year Ended December 31,
|                                                        |  | 2006                    |         | 2005 |   | 2004   
|                                                        |  | (Dollars in thousands) 
|iGATE Solutions                                         |  | $                       | 106,034 |      | $ | 95,010  |  | $ | 101,439
|iGATE Professional Services                             |  |                         | 20,798  |      |   | 21,368  |  |   | 42,360 
|iGATE Shared Services including discontinued operations |  |                         | 63,942  |      |   | 61,096  |  |   | 36,433 
|                                                        |  |                         |         |      |   |         |  |   |        
|Total assets                                            |  | $                       | 190,774 |      | $ | 177,474 |  | $ | 180,232
|                                                        |  |                         |         |      |   |         |  |   |        

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



|                                |  |                         |         |      |   |         |  |   |        
|------------------------------- |  | ----------------------- | ------- | ---- | - | ------- |  | - | -------
|                                |  | Year Ended December 31,
|                                |  | 2006                    |         | 2005 |   | 2004   
|                                |  | (Dollars in thousands) 
|Revenues:                       |  |                         |         |      |   |         |  |   |        
|North America, principally U.S. |  | $                       | 241,433 |      | $ | 235,054 |  | $ | 223,772
|Europe                          |  |                         | 19,123  |      |   | 19,284  |  |   | 22,167 
|Pacific Rim, principally India  |  |                         | 23,032  |      |   | 21,654  |  |   | 18,646 
|                                |  |                         |         |      |   |         |  |   |        
|Total revenues                  |  | $                       | 283,588 |      | $ | 275,992 |  | $ | 264,585
|                                |  |                         |         |      |   |         |  |   |        
|                                | 
|                                |  | Year Ended December 31,
|                                |  | 2006                    |         | 2005 |   | 2004   
|                                |  | (Dollars in thousands) 
|Tangible long-term assets:      |  |                         |         |      |   |         |  |   |        
|North America, principally U.S. |  | $                       | 1,392   |      | $ | 1,610   |  | $ | 2,511  
|Europe                          |  |                         | 131     |      |   | 176     |  |   | 106    
|Pacific Rim, principally India  |  |                         | 28,344  |      |   | 26,753  |  |   | 23,197 
|                                |  |                         |         |      |   |         |  |   |        
|Total tangible long-term assets |  | $                       | 29,867  |      | $ | 28,539  |  | $ | 25,814 
|                                |  |                         |         |      |   |         |  |   |        

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



|                                             |  |      |   |  |      |   |  |      |  
|-------------------------------------------- |  | ---- | - |  | ---- | - |  | ---- | -
|                                             |  | 2006 |   |  | 2005 |   |  | 2004 |  
|General Electric Company                     |  |      |   |  |      |   |  |      |  
|iGATE Solutions                              |  | 30   | % |  | 35   | % |  | 37   | %
|iGATE Consolidated                           |  | 18   | % |  | 18   | % |  | 19   | %
|Royal Bank of Canada                         |  |      |   |  |      |   |  |      |  
|iGATE Solutions                              |  | 10   | % |  |     |   |  |     |  
|TEKsystems, Inc. iGATE Professional Services |  | 13   | % |  |     |   |  |     |  
|International Business Machine Corp.         |  |      |   |  |      |   |  |      |  
|iGATE Professional Services                  |  | 11   | % |  | 22   | % |  | 23   | %
|iGATE Consolidated                           |  |     |   |  | 11   | % |  | 12   | %
|Wachovia Corporation                         |  |      |   |  |      |   |  |      |  
|iGATE Professional Services                  |  |     |   |  | 11   | % |  | 13   | %



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|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)
|2006:                                             |  |                                               |        |   |         |   |        |              |  |             |        |  |   |       
|Revenues                                          |  | $                                             | 67,696 |   |         | $ | 69,322 |              |  | $           | 71,954 |  | $ | 74,616
|Gross margin                                      |  |                                               | 17,182 |   |         |   | 16,802 |              |  |             | 18,428 |  |   | 20,964
|Income (loss) from operations                     |  |                                               | 300    |   |         |   | (377   | )            |  |             | 1,173  |  |   | 5,722 
|Income from operations before income taxes        |  |                                               | 1,651  |   |         |   | 212    |              |  |             | 2,053  |  |   | 7,037 
|                                                  |  |                                               |        |   |         |   |        |              |  |             |        |  |   |       
|Net income (loss)                                 |  | $                                             | 1,083  |   |         | $ | (406   | )            |  | $           | 1,550  |  | $ | 6,477 
|                                                  |  |                                               |        |   |         |   |        |              |  |             |        |  |   |       
|Net earnings (loss) per common share, basic       |  | $                                             | 0.02   |   |         | $ | (0.01  | )            |  | $           | 0.03   |  | $ | 0.12  
|                                                  |  |                                               |        |   |         |   |        |              |  |             |        |  |   |       
|Net earnings (loss) per common share, diluted     |  | $                                             | 0.02   |   |         | $ | (0.01  | )            |  | $           | 0.03   |  | $ | 0.12  
|                                                  |  |                                               |        |   |         |   |        |              |  |             |        |  |   |       
|2005:                                             |  |                                               |        |   |         |   |        |              |  |             |        |  |   |       
|Revenues                                          |  | $                                             | 69,601 |   |         | $ | 67,896 |              |  | $           | 70,102 |  | $ | 68,393
|Gross margin                                      |  |                                               | 17,197 |   |         |   | 16,798 |              |  |             | 18,930 |  |   | 17,957
|(Loss) income from operations                     |  |                                               | (32    | ) |         |   | (576   | )            |  |             | 1,709  |  |   | 2,779 
|(Loss) income from 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  
|                                                  |  |                                               |        |   |         |   |        |              |  |             |        |  |   |       



|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.

The Company has advanced employees $1.1 million and $1.1 million at December 31,
2006 and 2005, 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, 2006, 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, 2006, 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 Bangalore, Chennai and Mumbai 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 98,000 square feet, and expire at various times from 2007 through 2008. The total annual rental is
approximately $0.5 million. The lease agreements are subject to annual rent escalation, which has been accounted for on a straight-line basis.



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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.

The certification required
by Section 302 of the Sarbanes-Oxley Act of 2002 are filed as exhibits 31.01 and 31.02, respectively, to this Annual Report on Form 10-K.

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 in the U.S.A. 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, including the Companys Chief Executive Officer and Chief Financial
Officer, assessed the effectiveness of the Companys internal control over financial reporting as of December 31, 2006. In making its assessment of internal control over financial reporting, management used the criteria described in the
Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Based upon this assessment, management believes that the Companys internal control over financial reporting was effective as of December 31, 2006.

Managements assessment of the effectiveness of the Companys internal control over financial reporting as of December 31, 2006 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

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, 2006.



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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, 2006, 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, 2006, 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, 2006, 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, 2006, and the
related consolidated statements of operations, shareholders equity and cash flows for the year then ended and our report dated March 13, 2007 expressed an unqualified opinion on those Consolidated Financial Statements.

/s/ BDO Seidman, LLP

Milwaukee, Wisconsin

March 13, 2007



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PART III



|ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|-------- | ------------------------------------------------------

Information required by this Item, not set forth below, is incorporated herein by reference from the Companys definitive proxy statement relating to the Annual Meeting of Shareholders scheduled for May 31, 2007, which will be
filed with the Commission within 120 days after the close of the Companys fiscal year ended December 31, 2006 (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 Companys Proxy Statement.



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

The following table provides information as of December 31, 2006 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 |  | 2,272                                                                                       |  | $                                                                           | 4.99 |                                                                                                                                           | 14,114
|                                                       |  |                                                                                             |  |                                                                             |      |                                                                                                                                           |       
|Total                                                  |  | 2,272                                                                                       |  | $                                                                           | 4.99 |                                                                                                                                           | 14,114
|                                                       |  |                                                                                             |  |                                                                             |      |                                                                                                                                           |       

During 2006, the Company adopted the 2006 iGATE Corporation 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 other information required by this Item is incorporated by reference to the Companys Proxy Statement.



|ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|-------- | -------------------------------------------------------------------------

The information required by this Item is incorporated by reference to the Companys Proxy Statement.



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

Information
required by this Item is incorporated herein by reference to the section describing Ratification of Appointment of Independent Registered Public Accounting Firm in the Companys Proxy Statement.



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##### Table of Contents

PART IV



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

(a)
l. 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, 2006 and 2005.

Consolidated Statements of OperationsYears ended December 31, 2006, 2005 and 2004.

Consolidated Statements of Shareholders Equity and Comprehensive Income (Loss)Years ended December 31, 2006, 2005 and 2004.

Consolidated Statements of Cash FlowsYears ended December 31, 2006, 2005 and 2004.

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, 2006, 2005 and 2004, respectively.

3. Exhibits

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



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##### Table of Contents

iGATE CORPORATION

SCHEDULE IIVALUATION AND QUALIFYING ACCOUNTS

FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND
2004



|                                  |  |                               |        |                             |   |       |               |  |   |                        |   |  |   |       
|--------------------------------- |  | ----------------------------- | ------ | --------------------------- | - | ----- | ------------- |  | - | ---------------------- | - |  | - | ------
|                                  |  | Balance at beginningof period |        | (Credited)chargedto expense |   |       | Deductions(1) |  |   | Balanceat endof period
|                                  |  | (in thousands)               
|Allowance for Doubtful Accounts:  |  |                               |        |                             |   |       |               |  |   |                        |   |  |   |       
|Year ended December 31, 2006      |  | $                             | 1,776  |                             | $ | 286   |               |  | $ | (972                   | ) |  | $ | 1,090 
|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 
|Deferred Tax Valuation Allowance: |  |                               |        |                             |   |       |               |  |   |                        |   |  |   |       
|Year ended December 31, 2006      |  | $                             | 23,952 |                             | $ | 1,462 |               |  | $ | (369                   | ) |  | $ | 25,045
|Year ended December 31, 2005      |  |                               | 19,176 |                             |   | 5,086 |               |  |   | (310                   | ) |  |   | 23,952
|Year ended December 31, 2004      |  |                               | 11,120 |                             |   | 8,770 |               |  |   | (714                   | ) |  |   | 19,176

---

|(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.                                                                                                                                                                   



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|        |  |                                                                                                                                                                                                                                                                                                                        
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  | Index Description of
Exhibit                                                                                                                                                                                                                                                                                           
|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.                                                                                                                  
|        | 
|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.                                                                                                                                  
|        | 
|10.8(f) |  | First Amended and Restated Loan Agreement dated September 14, 2006 by and among iGATE Corporation, iGATE, Inc. and PNC Bank, N.A. filed as Exhibit 10.01 to Form 8-K on September 20,
2006.                                                                                                                            
|        | 
|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.                



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|         |  |                                                                                                                                                                                                                                                                                                                                                                       
|-------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit  |  | Index Description of
Exhibit                                                                                                                                                                                                                                                                                                                                          
|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.                                                                     
|         | 
|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(a) to Annual Report on Form 10-K for the year ended December 31, 2005 filed on March 16, 2006.                                                         
|         | 
|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 15, 2007 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.                                                                                                                                                                                                                                                                                           



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|        |  |                                                                                                                                                                     
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  | Index Description of
Exhibit                                                                                                                                        
|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.

---

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



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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 15th day of March, 2007.



|               |  |                                       
|-------------- |  | --------------------------------------
|               |  | iGATE CORPORATION                     
|               | 
|March 15, 2007 |  | /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           



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