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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2007



| ̈ | 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: None

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

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 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 number of shares of the registrants Common Stock, par value $.01 per share, outstanding as of October 31, 2007 was 53,626,304 shares.



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##### Table of Contents

iGATE CORPORATION

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 30, 2007

TABLE OF CONTENTS



|         |  |                                                                                                                                  |  |     
|-------- |  | -------------------------------------------------------------------------------------------------------------------------------- |  | ----
|         |  |                                                                                                                                  |  | Page
|PART I   |  | FINANCIAL INFORMATION                                                                                                            |  | 3   
|         |  |                                                                                                                                 
|Item 1.  |  | Condensed Consolidated Financial Statements                                                                                      |  |     
|         |  |                                                                                                                                 
|         |  | (a)    Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2007 and 2006 |  | 3   
|         |  |                                                                                                                                 
|         |  | (b)    Condensed Consolidated Balance Sheets as of September 30, 2007 (Unaudited) and December 31, 2006                          |  | 4   
|         |  |                                                                                                                                 
|         |  | (c)    Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2007 and 2006           |  | 5   
|         |  |                                                                                                                                 
|         |  | (d)    Notes to Unaudited Condensed Consolidated Financial Statements                                                            |  | 6   
|         |  |                                                                                                                                 
|Item 2.  |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                            |  | 15  
|         |  |                                                                                                                                 
|Item 3.  |  | Quantitative and Qualitative Disclosure About Market Risk                                                                        |  | 25  
|         |  |                                                                                                                                 
|Item 4.  |  | Controls and Procedures                                                                                                          |  | 28  
|         |  |                                                                                                                                 
|PART II  |  | OTHER INFORMATION                                                                                                                |  | 29  
|         |  |                                                                                                                                 
|Item 1A. |  | Risk Factors                                                                                                                     |  | 29  
|         |  |                                                                                                                                 
|Item 6.  |  | Exhibits                                                                                                                         |  | 29  
|         |  |                                                                                                                                 
|         |  | SIGNATURES                                                                                                                       |  | 30  



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PART I.    FINANCIAL INFORMATION

ITEM 1.    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(a)

iGATE CORPORATION

CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands, except per share data)

(Unaudited)



|                                                               |  |                                  |        |   |                                 |   |        |      |  |   |         |   |  |   |         |  
|-------------------------------------------------------------- |  | -------------------------------- | ------ | - | ------------------------------- | - | ------ | ---- |  | - | ------- | - |  | - | ------- | -
|                                                               |  | Three Months Ended September 30, |        |   | Nine Months Ended September 30, |  
|                                                               |  | 2007                             |        |   | 2006                            |   |        | 2007 |  |   | 2006    |  
|Revenues                                                       |  | $                                | 76,146 |   |                                 | $ | 71,954 |      |  | $ | 227,640 |   |  | $ | 208,972 |  
|Cost of revenues                                               |  |                                  | 54,050 |   |                                 |   | 53,526 |      |  |   | 162,630 |   |  |   | 156,560 |  
|                                                               |  |                                  |        |   |                                 |   |        |      |  |   |         |   |  |   |         |  
|Gross margin                                                   |  |                                  | 22,096 |   |                                 |   | 18,428 |      |  |   | 65,010  |   |  |   | 52,412  |  
|Selling, general and administrative                            |  |                                  | 17,071 |   |                                 |   | 17,255 |      |  |   | 52,862  |   |  |   | 51,871  |  
|Restructuring recovery                                         |  |                                  |       |   |                                 |   |       |      |  |   |        |   |  |   | (555    | )
|Goodwill impairment                                            |  |                                  |       |   |                                 |   |       |      |  |   | 1,950   |   |  |   |        |  
|                                                               |  |                                  |        |   |                                 |   |        |      |  |   |         |   |  |   |         |  
|Income from operations                                         |  |                                  | 5,025  |   |                                 |   | 1,173  |      |  |   | 10,198  |   |  |   | 1,096   |  
|Other income, net                                              |  |                                  | 846    |   |                                 |   | 942    |      |  |   | 4,863   |   |  |   | 2,008   |  
|Minority interest                                              |  |                                  | (653   | ) |                                 |   | (149   | )    |  |   | (1,966  | ) |  |   | 12      |  
|Gain (loss) on venture investments                             |  |                                  | 407    |   |                                 |   |       |      |  |   | (193    | ) |  |   | 534     |  
|Equity in income of affiliated companies                       |  |                                  | 94     |   |                                 |   | 87     |      |  |   | 221     |   |  |   | 266     |  
|                                                               |  |                                  |        |   |                                 |   |        |      |  |   |         |   |  |   |         |  
|Income before income taxes                                     |  |                                  | 5,719  |   |                                 |   | 2,053  |      |  |   | 13,123  |   |  |   | 3,916   |  
|Income tax expense                                             |  |                                  | 1,388  |   |                                 |   | 503    |      |  |   | 2,393   |   |  |   | 1,689   |  
|                                                               |  |                                  |        |   |                                 |   |        |      |  |   |         |   |  |   |         |  
|Net income                                                     |  | $                                | 4,331  |   |                                 | $ | 1,550  |      |  | $ | 10,730  |   |  | $ | 2,227   |  
|                                                               |  |                                  |        |   |                                 |   |        |      |  |   |         |   |  |   |         |  
|Net earnings per common share, Basic                           |  | $                                | 0.08   |   |                                 | $ | 0.03   |      |  | $ | 0.20    |   |  | $ | 0.04    |  
|                                                               |  |                                  |        |   |                                 |   |        |      |  |   |         |   |  |   |         |  
|Net earnings per common share, Diluted                         |  | $                                | 0.08   |   |                                 | $ | 0.03   |      |  | $ | 0.20    |   |  | $ | 0.04    |  
|                                                               |  |                                  |        |   |                                 |   |        |      |  |   |         |   |  |   |         |  
|Weighted average common shares, Basic                          |  |                                  | 53,446 |   |                                 |   | 52,969 |      |  |   | 53,234  |   |  |   | 52,915  |  
|                                                               |  |                                  |        |   |                                 |   |        |      |  |   |         |   |  |   |         |  
|Weighted average dilutive common equivalent shares outstanding |  |                                  | 53,965 |   |                                 |   | 53,202 |      |  |   | 53,807  |   |  |   | 53,207  |  
|                                                               |  |                                  |        |   |                                 |   |        |      |  |   |         |   |  |   |         |  

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



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(b)

iGATE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share and share data)



|                                                                                                                                                      |  |                    |             |   |                    |   |         |  
|----------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------ | ----------- | - | ------------------ | - | ------- | -
|                                                                                                                                                      |  | September 30, 2007 |             |   | December 31, 2006* |  
|ASSETS                                                                                                                                                |  |                    | (Unaudited) |   |                    |   |         |  
|Current assets:                                                                                                                                       |  |                    |             |   |                    |   |         |  
|Cash and cash equivalents                                                                                                                             |  | $                  | 56,618      |   |                    | $ | 52,154  |  
|Short-term investments                                                                                                                                |  |                    | 44,268      |   |                    |   | 31,826  |  
|Accounts receivable, net                                                                                                                              |  |                    | 61,871      |   |                    |   | 53,378  |  
|Prepaid and other current assets                                                                                                                      |  |                    | 8,252       |   |                    |   | 7,700   |  
|Prepaid income taxes                                                                                                                                  |  |                    | 878         |   |                    |   | 380     |  
|Deferred income taxes                                                                                                                                 |  |                    | 157         |   |                    |   | 1,111   |  
|                                                                                                                                                      |  |                    |             |   |                    |   |         |  
|Total current assets                                                                                                                                  |  |                    | 172,044     |   |                    |   | 146,549 |  
|                                                                                                                                                      |  |                    |             |   |                    |   |         |  
|Investments in unconsolidated affiliates                                                                                                              |  |                    | 1,128       |   |                    |   | 1,398   |  
|Land, building, equipment and leasehold improvements, net                                                                                             |  |                    | 32,938      |   |                    |   | 29,867  |  
|Goodwill                                                                                                                                              |  |                    | 10,086      |   |                    |   | 11,014  |  
|Intangible assets, net                                                                                                                                |  |                    | 1,179       |   |                    |   | 1,946   |  
|                                                                                                                                                      |  |                    |             |   |                    |   |         |  
|Total assets                                                                                                                                          |  | $                  | 217,375     |   |                    | $ | 190,774 |  
|                                                                                                                                                      |  |                    |             |   |                    |   |         |  
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                                  |  |                    |             |   |                    |   |         |  
|Current liabilities:                                                                                                                                  |  |                    |             |   |                    |   |         |  
|Accounts payable                                                                                                                                      |  | $                  | 5,870       |   |                    | $ | 4,997   |  
|Accrued payroll and related costs                                                                                                                     |  |                    | 17,808      |   |                    |   | 17,966  |  
|Accrued income taxes                                                                                                                                  |  |                    | 673         |   |                    |   | 646     |  
|Other accrued liabilities                                                                                                                             |  |                    | 9,149       |   |                    |   | 8,591   |  
|Restructuring reserve                                                                                                                                 |  |                    | 340         |   |                    |   | 497     |  
|Deferred revenue                                                                                                                                      |  |                    | 239         |   |                    |   | 465     |  
|                                                                                                                                                      |  |                    |             |   |                    |   |         |  
|Total current liabilities                                                                                                                             |  |                    | 34,079      |   |                    |   | 33,162  |  
|Other long-term liabilities                                                                                                                           |  |                    | 691         |   |                    |   | 406     |  
|Deferred income taxes                                                                                                                                 |  |                    | 8,096       |   |                    |   | 9,483   |  
|                                                                                                                                                      |  |                    |             |   |                    |   |         |  
|Total liabilities                                                                                                                                     |  |                    | 42,866      |   |                    |   | 43,051  |  
|                                                                                                                                                      |  |                    |             |   |                    |   |         |  
|Minority interest                                                                                                                                     |  |                    | 17,343      |   |                    |   | 14,372  |  
|Shareholders equity:                                                                                                                                 |  |                    |             |   |                    |   |         |  
|Preferred stock, without par value: 20,000,000 shares authorized, 1 share of Series A Preferred Stock held in treasury in 2007 and 2006,
respectively |  |                    |            |   |                    |   |        |  
|Common stock, par value $0.01 per share:                                                                                                              |  |                    |             |   |                    |   |         |  
|100,000,000 shares authorized, 54,604,091 and 54,021,670 shares issued, respectively                                                                  |  |                    | 546         |   |                    |   | 540     |  
|Additional paid-in capital                                                                                                                            |  |                    | 172,892     |   |                    |   | 167,626 |  
|Accumulated deficit                                                                                                                                   |  |                    | (10,881     | ) |                    |   | (21,037 | )
|Common stock held in treasury, at cost, 990,102 shares                                                                                                |  |                    | (14,714     | ) |                    |   | (14,714 | )
|Accumulated other comprehensive income                                                                                                                |  |                    | 9,323       |   |                    |   | 936     |  
|                                                                                                                                                      |  |                    |             |   |                    |   |         |  
|Total shareholders equity                                                                                                                            |  |                    | 157,166     |   |                    |   | 133,351 |  
|                                                                                                                                                      |  |                    |             |   |                    |   |         |  
|Total liabilities and shareholders equity                                                                                                            |  | $                  | 217,375     |   |                    | $ | 190,774 |  
|                                                                                                                                                      |  |                    |             |   |                    |   |         |  



|* | Condensed from audited Consolidated Financial Statements.
|- | ---------------------------------------------------------

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



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(c)

iGATE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)



|                                                                       |  |                                 |         |   |      |   |        |  
|---------------------------------------------------------------------- |  | ------------------------------- | ------- | - | ---- | - | ------ | -
|                                                                       |  | Nine Months ended September 30, |        
|                                                                       |  | 2007                            |         |   | 2006 |  
|Cash Flows From Operating Activities:                                  |  |                                 |         |   |      |   |        |  
|Net income                                                             |  | $                               | 10,730  |   |      | $ | 2,227  |  
|Adjustments to reconcile net income to cash provided by operations:    |  |                                 |         |   |      |   |        |  
|Depreciation and amortization                                          |  |                                 | 8,338   |   |      |   | 8,177  |  
|Stock based compensation                                               |  |                                 | 3,206   |   |      |   | 2,822  |  
|Impairment of goodwill                                                 |  |                                 | 1,950   |   |      |   |       |  
|Unrealized loss (gain) on derivative instruments                       |  |                                 | 174     |   |      |   | (1,082 | )
|Realized gain on investments                                           |  |                                 | (407    | ) |      |   | (59    | )
|Realized loss on sale of affiliated company                            |  |                                 | 642     |   |      |   |       |  
|Bad debt (recovery) expense                                            |  |                                 | (234    | ) |      |   | 238    |  
|Deferred income taxes, net                                             |  |                                 | (546    | ) |      |   | (40    | )
|Equity in income of affiliated companies                               |  |                                 | (221    | ) |      |   | (266   | )
|Restructuring recovery                                                 |  |                                 |        |   |      |   | (555   | )
|Minority interest                                                      |  |                                 | 1,966   |   |      |   | (12    | )
|Working capital items:                                                 |  |                                 |         |   |      |   |        |  
|Accounts receivable                                                    |  |                                 | (3,618  | ) |      |   | (7,267 | )
|Prepaid and other assets                                               |  |                                 | (483    | ) |      |   | 388    |  
|Accounts payable                                                       |  |                                 | 612     |   |      |   | (621   | )
|Accrued and other liabilities                                          |  |                                 | (203    | ) |      |   | 322    |  
|Deferred revenue                                                       |  |                                 | (255    | ) |      |   | (239   | )
|Restructuring reserve                                                  |  |                                 | (188    | ) |      |   | (1,657 | )
|                                                                       |  |                                 |         |   |      |   |        |  
|Net cash flows provided by operating activities                        |  |                                 | 21,463  |   |      |   | 2,376  |  
|                                                                       |  |                                 |         |   |      |   |        |  
|Cash Flows From Investing Activities:                                  |  |                                 |         |   |      |   |        |  
|Additions to land, building, equipment and leasehold improvements, net |  |                                 | (7,125  | ) |      |   | (7,034 | )
|(Purchases) sales of investments, net                                  |  |                                 | (10,756 | ) |      |   | 570    |  
|Acquisitions, net of cash acquired                                     |  |                                 |        |   |      |   | 285    |  
|Investments in unconsolidated affiliates                               |  |                                 |        |   |      |   | (162   | )
|                                                                       |  |                                 |         |   |      |   |        |  
|Net cash flows used by investing activities                            |  |                                 | (17,881 | ) |      |   | (6,341 | )
|                                                                       |  |                                 |         |   |      |   |        |  
|Cash Flows From Financing Activities:                                  |  |                                 |         |   |      |   |        |  
|Payments on secured financing                                          |  |                                 | (181    | ) |      |   | (140   | )
|Net proceeds from exercise of stock options and excess tax benefit     |  |                                 | 2,540   |   |      |   | 1,509  |  
|                                                                       |  |                                 |         |   |      |   |        |  
|Net cash flows provided by financing activities                        |  |                                 | 2,359   |   |      |   | 1,369  |  
|                                                                       |  |                                 |         |   |      |   |        |  
|Effect of currency translation                                         |  |                                 | (1,477  | ) |      |   | 957    |  
|                                                                       |  |                                 |         |   |      |   |        |  
|Net change in cash and cash equivalents                                |  |                                 | 4,464   |   |      |   | (1,639 | )
|Cash and cash equivalents, beginning of period                         |  |                                 | 52,154  |   |      |   | 45,837 |  
|                                                                       |  |                                 |         |   |      |   |        |  
|Cash and cash equivalents, end of period                               |  | $                               | 56,618  |   |      | $ | 44,198 |  
|                                                                       |  |                                 |         |   |      |   |        |  

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



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iGATE CORPORATION

(d)    NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.    Basis of Presentation

The Unaudited Condensed Consolidated Financial Statements included herein have been prepared by iGATE Corporation (the Company) in accordance with generally accepted accounting principles for interim financial information
and Article 10 of Regulation S-X under the Securities Exchange Act of 1934, as amended. Accordingly, the accompanying Unaudited Condensed Consolidated Financial Statements do not include all of the information and notes required by accounting
principles generally accepted in the United States of America for complete financial statements. The accompanying Unaudited Condensed Consolidated Financial Statements as of and for the three and nine months ended September 30, 2007 and 2006
should be read in conjunction with the Companys Consolidated Financial Statements (and notes thereto) included in the Companys Annual Report filed on Form 10-K for the year ended December 31, 2006. In the opinion of the
Companys management, all adjustments considered necessary for a fair statement of the accompanying Unaudited Condensed Consolidated Financial Statements have been included, and all adjustments, unless otherwise discussed in the Notes to the
Unaudited Condensed Consolidated Financial Statements, are of a normal and recurring nature. All significant intercompany accounts and transactions have been eliminated in consolidation. Operating results for the three and nine months ended
September 30, 2007 are not necessarily indicative of the results that may be expected for the year ending December 31, 2007.

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

Recently Adopted Accounting Pronouncements

In June 2006, the Financial Accounting Standards Board (FASB) issued
Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement 109 (FIN 48). This statement clarifies the criteria that an individual tax position must satisfy for some or all of
the benefits of that position to be recognized in a companys financial statements. FIN 48 prescribes a recognition threshold of more-likely-than-not, and a measurement attribute for all tax positions taken or expected to be taken on a tax
return, in order for those tax positions to be recognized in the financial statements. Effective January 1, 2007, the Company has adopted the provisions of FIN 48 and there was no material effect on the financial statements. The Company has
recorded a cumulative effect adjustment to retained deficit of $0.6 million related to adopting FIN 48. Also, certain amounts have been reclassified in the statement of financial position in order to comply with the requirements of the
statement.

As of January 1, 2007, the Company provided a liability for $1.0 million of unrecognized tax benefits related to various
federal and state income tax matters. Of this amount, the amount that would impact the Companys effective tax rate, if recognized, is $0.7 million. The difference between the total amount of unrecognized tax benefits and the amount that would
impact the effective tax rate consists of items that are offset by deferred tax assets, and the federal tax benefit of state income tax items. For the three and nine months ended September 30, 2007, the reserve has increased by $0.1 million and
$0.3 million, respectively. The Company does not expect that the amounts of unrecognized tax benefits will change significantly within the next 12 months.

The Company is currently open to audit under the statute of limitations by the Internal Revenue Service for the years ending December 31, 2003 through 2006. The Company and its subsidiaries state income tax
returns are open to audit under the statute of limitations for the years ending December 31, 2002 through 2006.



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iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



As of January 1, 2007, the Company had accrued $0.2 million of interest and penalties related to
uncertain tax positions. As of September 30, 2007, the total amount of accrued interest and penalties was $0.2 million. The Company accounts for interest and penalties related to uncertain tax positions as part of its provision for federal and
state income taxes.

Recently Issued Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, which defines fair value, establishes a framework in generally accepted accounting principles for measuring fair value, and
expands disclosures about fair value measurements. This standard only applies when other standards require or permit the fair value measurement of assets and liabilities. It does not increase the use of fair value measurement. SFAS No. 157 is
effective for fiscal years beginning after Nov. 15, 2007. The Company is currently evaluating the impact of adopting this Statement on its Consolidated Financial Statements.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial LiabilitiesIncluding an
Amendment of FASB Statement No. 115. SFAS No. 159 permits entities to choose to measure eligible items at fair value at specified election dates and report unrealized gains and losses on items for which the fair value option has been
elected in earnings at each subsequent reporting date. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The Company is currently evaluating the impact of adopting this Statement on its Consolidated Financial
Statements.

2.    Derivative Instruments and Hedging Activities

Summarized below are derivative instruments consisting of foreign exchange contracts, currency option contracts and principal only SWAP agreements whose
carrying values were adjusted to their fair value at September 30, 2007. Fair values are based on quoted market prices at prevailing exchange rates and other available market information.



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iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



LIST OF OUTSTANDING HEDGE TRANSACTIONS ON SEPTEMBER 30, 2007



|                              |  |                      |  |                                   |  |                        |         |        |               |                                                  |   |       |  
|----------------------------- |  | -------------------- |  | --------------------------------- |  | ---------------------- | ------- | ------ | ------------- | ------------------------------------------------ | - | ----- | -
|                              |  |                      |  |                                   |  | (Dollars in thousands) |        
|                              |  | Maturity Date Ranges |  | Strike Price at Rupee Rate Ranges |  | Amount                 |         | Option |               | Net Unrealized Gains/(Losses) September 30, 2007 |  
|FORWARD CONTRACTSUSD         |  |                      |  |                                   |  |                        |         |        |               |                                                  |   |       |  
|From:                         |  | October 29, 2007     |  | 40.62                             |  |                        |         |        |               |                                                  |   |       |  
|To:                           |  | December 31, 2008    |  | 42.28                             |  |                        |         |        |               |                                                  |   |       |  
|                              |  |                      |  |                                   |  |                        |         |        |               |                                                  |   |       |  
|Subtotal                      |  |                      |  |                                   |  | $                      | 20,000  |        |               |                                                  | $ | 763   |  
|                              |  |                      |  |                                   |  |                        |         |        |               |                                                  |   |       |  
|CURRENCY OPTION CONTRACTSUSD |  |                      |  |                                   |  |                        |         |        |               |                                                  |   |       |  
|From:                         |  | December 27, 2007    |  | 40.65                             |  | $                      | 22,500  |        | Buy/Sell Put  |                                                  |   |       |  
|To:                           |  | August 31, 2009      |  | 43.00                             |  | $                      | 13,500  |        | Buy/Sell Call |                                                  |   |       |  
|                              |  |                      |  |                                   |  |                        |         |        |               |                                                  |   |       |  
|Subtotal                      |  |                      |  |                                   |  | $                      | 36,000  |        |               |                                                  | $ | 1,039 |  
|                              |  |                      |  |                                   |  |                        |         |        |               |                                                  |   |       |  
|FORWARD CONTRACTSCAD         |  |                      |  |                                   |  |                        |         |        |               |                                                  |   |       |  
|From:                         |  | January 31, 2008     |  | 38.72                             |  |                        |         |        |               |                                                  |   |       |  
|To:                           |  | March 28, 2008       |  | 39.43                             |  |                        |         |        |               |                                                  |   |       |  
|                              |  |                      |  |                                   |  |                        |         |        |               |                                                  |   |       |  
|Subtotal                      |  |                      |  |                                   |  | $                      | 3,000   |        |               |                                                  | $ | (68   | )
|                              |  |                      |  |                                   |  |                        |         |        |               |                                                  |   |       |  
|CURRENCY OPTION CONTRACTSCAD |  |                      |  |                                   |  |                        |         |        |               |                                                  |   |       |  
|From:                         |  | October 27, 2007     |  | 38.00                             |  | $                      | 3,000   |        | Buy/Sell Put  |                                                  |   |       |  
|To:                           |  | December 27, 2007    |  | 39.49                             |  | $                      | 3,000   |        | Buy/Sell Call |                                                  |   |       |  
|                              |  |                      |  |                                   |  |                        |         |        |               |                                                  |   |       |  
|Subtotal                      |  |                      |  |                                   |  | $                      | 6,000   |        |               |                                                  | $ | (77   | )
|                              |  |                      |  |                                   |  |                        |         |        |               |                                                  |   |       |  
|PRINCIPAL SWAPS               |  |                      |  |                                   |  |                        |         |        |               |                                                  |   |       |  
|                              |  | December 27, 2007    |  |                                   |  | $                      | 651     |        | USD           |                                                  | $ | (19   | )
|                              |  |                      |  |                                   |  |                        | 1,000   |        | SGD           |                                                  |   |       |  
|                              |  | December 27, 2007    |  |                                   |  | $                      | 673     |        | USD           |                                                  | $ | (38   | )
|                              |  |                      |  |                                   |  |                        | 500     |        | EURO          |                                                  |   |       |  
|                              |  | December 27, 2007    |  |                                   |  | $                      | 1,624   |        | USD           |                                                  | $ | (105  | )
|                              |  |                      |  |                                   |  |                        | 200,000 |        | JPY           |                                                  |   |       |  
|                              |  | December 27, 2007    |  |                                   |  | $                      | 2,000   |        | USD           |                                                  | $ | (43   | )
|                              |  |                      |  |                                   |  |                        | 1,000   |        | GBP           |                                                  |   |       |  
|                              |  |                      |  |                                   |  |                        |         |        |               |                                                  |   |       |  
|Subtotal                      |  |                      |  |                                   |  |                        |         |        |               |                                                  | $ | (205  | )
|                              |  |                      |  |                                   |  |                        |         |        |               |                                                  |   |       |  
|Total                         |  |                      |  |                                   |  |                        |         |        |               |                                                  | $ | 1,452 |  
|                              |  |                      |  |                                   |  |                        |         |        |               |                                                  |   |       |  

The net unrealized gains/(losses) were calculated using a Rupee exchange rate of 39.667.

As of September 30, 2007, iGate Global Solutions Limiteds (iGS) forward contracts to hedge intercompany cash flows
will all mature by December 31, 2008. As each contract matures, iGS will receive Rupees at the contracted (strike price) rate while delivering either the U.S. Dollar (USD) or Canadian Dollar (CAD)
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



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iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



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 September 30, 2007 certain previously existing 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 approximately $0.3 million. Contracts entered into subsequent to July 1, 2007 met qualifying criteria to receive hedge accounting and have been deemed to be effective. As a result, iGS has appropriately recorded other
comprehensive income of $0.3 million.

As of September 30, 2007, iGS option contracts to hedge intercompany cash flows will all
mature by August 31, 2009. As each contract matures and dependent upon prevailing Rupee exchange rates, iGS will either buy USDs or CADs at each contracted put strike price or sell USDs or CADs 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 income 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
September 30, 2007 certain previously existing 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. Contracts
entered into subsequent to July 1, 2007 met qualifying criteria to receive hedge accounting and have been deemed to be effective. As a result iGS has appropriately recorded other comprehensive income of $1.0 million.

As of September 30, 2007, iGS 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 September 30, 2007, the principal
swaps to hedge intercompany debt did not meet qualifying criteria to receive hedge accounting. At September 30, 2007, iGS recorded a liability for the unrealized loss of $0.2 million.

3.    Goodwill Impairment

In
June 2007, the Company recorded a net goodwill impairment charge of approximately $1.9 million related to its July 2006 majority acquisition of LoanPro. The gross amount of goodwill recorded in conjunction with the LoanPro acquisition totaled
approximately $2.1 million, which was offset by approximately $0.2 million in a note payable owed by LoanPro to its minority shareholders which was forgiven.

LoanPro lost its largest customer in June 2007 and as a result of this triggering event, the Company concluded that the goodwill associated with the acquisition should be impaired. There were no other significant
costs associated with the impairment charge.

Changes in the carrying value of goodwill and intangible assets by reportable segment are as
follows (in thousands):



|                                    |  |                 |        |   |                             |   |                       |  |              |     |  |   |        |  
|----------------------------------- |  | --------------- | ------ | - | --------------------------- | - | --------------------- |  | ------------ | --- |  | - | ------ | -
|                                    |  | iGATE Solutions |        |   | iGATE Professional Services |   | iGATE Shared Services |  | Consolidated |    
|Goodwill at December 31, 2006       |  | $               | 10,225 |   |                             | $ | 216                   |  | $            | 573 |  | $ | 11,014 |  
|Purchase price adjustment           |  |                 | (201   | ) |                             |   |                      |  |              |    |  |   | (201   | )
|Goodwill impairment                 |  |                 | (1,950 | ) |                             |   |                      |  |              |    |  |   | (1,950 | )
|Foreign currency translation effect |  |                 | 1,223  |   |                             |   |                      |  |              |    |  |   | 1,223  |  
|                                    |  |                 |        |   |                             |   |                       |  |              |     |  |   |        |  
|Goodwill at September 30, 2007      |  | $               | 9,297  |   |                             | $ | 216                   |  | $            | 573 |  | $ | 10,086 |  
|                                    |  |                 |        |   |                             |   |                       |  |              |     |  |   |        |  



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iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



4.    Income Taxes

Income before income taxes, as shown in the accompanying Condensed Consolidated Statements of Operations, consisted of the following for the three and
nine months ended September 30, 2007 and 2006, respectively:



|                            |  |                                  |       |                                 |   |       |  |      |        |  |   |      
|--------------------------- |  | -------------------------------- | ----- | ------------------------------- | - | ----- |  | ---- | ------ |  | - | -----
|                            |  | Three Months Ended September 30, |       | Nine Months Ended September 30,
|                            |  | 2007                             |       | 2006                            |   | 2007  |  | 2006
|                            |  | (Dollars in Thousands)           |       | (Dollars in Thousands)         
|Income before income taxes: |  |                                  |       |                                 |   |       |  |      |        |  |   |      
|Domestic                    |  | $                                | 2,777 |                                 | $ | 457   |  | $    | 3,297  |  | $ | 1,618
|Foreign                     |  |                                  | 2,942 |                                 |   | 1,596 |  |      | 9,826  |  |   | 2,298
|                            |  |                                  |       |                                 |   |       |  |      |        |  |   |      
|Income before income taxes  |  | $                                | 5,719 |                                 | $ | 2,053 |  | $    | 13,123 |  | $ | 3,916
|                            |  |                                  |       |                                 |   |       |  |      |        |  |   |      

Taxes on income, as shown in the accompanying Condensed Consolidated Statements of Operations,
consisted of the following for the three and nine months ended September 30, 2007 and 2006, respectively:



|                                   |  |                                  |       |   |                                 |   |      |      |  |   |       |   |  |   |       |  
|---------------------------------- |  | -------------------------------- | ----- | - | ------------------------------- | - | ---- | ---- |  | - | ----- | - |  | - | ----- | -
|                                   |  | Three Months Ended September 30, |       |   | Nine Months Ended September 30, |  
|                                   |  | 2007                             |       |   | 2006                            |   |      | 2007 |  |   | 2006  |  
|                                   |  | (Dollars in Thousands)           |       |   | (Dollars in Thousands)          |  
|Current provision:                 |  |                                  |       |   |                                 |   |      |      |  |   |       |   |  |   |       |  
|Federal                            |  | $                                | 803   |   |                                 | $ | 565  |      |  | $ | 823   |   |  | $ | 914   |  
|State                              |  |                                  | 190   |   |                                 |   | 166  |      |  |   | 429   |   |  |   | 343   |  
|Foreign                            |  |                                  | 1,032 |   |                                 |   | 96   |      |  |   | 1,574 |   |  |   | 306   |  
|                                   |  |                                  |       |   |                                 |   |      |      |  |   |       |   |  |   |       |  
|Total current provision            |  |                                  | 2,025 |   |                                 |   | 827  |      |  |   | 2,826 |   |  |   | 1,563 |  
|                                   |  |                                  |       |   |                                 |   |      |      |  |   |       |   |  |   |       |  
|Deferred provision (benefit) :     |  |                                  |       |   |                                 |   |      |      |  |   |       |   |  |   |       |  
|Federal                            |  |                                  | 153   |   |                                 |   | (380 | )    |  |   | 754   |   |  |   | (207  | )
|State                              |  |                                  | 22    |   |                                 |   | (57  | )    |  |   | 111   |   |  |   | (151  | )
|Foreign                            |  |                                  | (587  | ) |                                 |   |     |      |  |   | (938  | ) |  |   | 17    |  
|Valuation allowance                |  |                                  | (225  | ) |                                 |   | 113  |      |  |   | (360  | ) |  |   | 467   |  
|                                   |  |                                  |       |   |                                 |   |      |      |  |   |       |   |  |   |       |  
|Total deferred (benefit) provision |  |                                  | (637  | ) |                                 |   | (324 | )    |  |   | (433  | ) |  |   | 126   |  
|                                   |  |                                  |       |   |                                 |   |      |      |  |   |       |   |  |   |       |  
|Total provision for income taxes   |  | $                                | 1,388 |   |                                 | $ | 503  |      |  | $ | 2,393 |   |  | $ | 1,689 |  
|                                   |  |                                  |       |   |                                 |   |      |      |  |   |       |   |  |   |       |  

The reconciliation of income taxes computed using the statutory U.S. income tax rate and the
provision for income taxes for the three and nine months ended September 30, 2007 and 2006, respectively were as follows (in thousands):



|                                                    |  |                                       |       |   |                                       |       |   |  |   |      |   |  |       |  
|--------------------------------------------------- |  | ------------------------------------- | ----- | - | ------------------------------------- | ----- | - |  | - | ---- | - |  | ----- | -
|                                                    |  | Three Months Ended September 30, 2007 |       |   | Three Months Ended September 30, 2006 |      
|Income taxes computed at the federal statutory rate |  | $                                     | 2,002 |   |                                       | 35.0  | % |  | $ | 719  |   |  | 35.0  | %
|State income taxes, net of federal tax benefit      |  |                                       | 145   |   |                                       | 2.5   |   |  |   | 81   |   |  | 3.9   |  
|Foreign taxes at other than U.S. statutory rate     |  |                                       | (584  | ) |                                       | (10.2 | ) |  |   | (462 | ) |  | (22.5 | )
|Minority interest                                   |  |                                       | 228   |   |                                       | 4.0   |   |  |   | 52   |   |  | 2.5   |  
|Net foreign tax credit from deemed paid dividends   |  |                                       | (94   | ) |                                       | (1.6  | ) |  |   |     |   |  |      |  
|Nondeductible goodwill                              |  |                                       |      |   |                                       |      |   |  |   | 8    |   |  | 0.4   |  
|Nondeductible compensation                          |  |                                       | 48    |   |                                       | 0.8   |   |  |   | 35   |   |  | 1.7   |  
|Othernet                                           |  |                                       | (132  | ) |                                       | (2.3  | ) |  |   | (43  | ) |  | (2.1  | )
|Valuation allowance                                 |  |                                       | (225  | ) |                                       | (3.9  | ) |  |   | 113  |   |  | 5.5   |  
|                                                    |  |                                       |       |   |                                       |       |   |  |   |      |   |  |       |  
|                                                    |  | $                                     | 1,388 |   |                                       | 24.3  | % |  | $ | 503  |   |  | 24.4  | %
|                                                    |  |                                       |       |   |                                       |       |   |  |   |      |   |  |       |  



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iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



|                                                    |  |                                      |        |   |                                      |       |   |  |   |       |   |  |       |  
|--------------------------------------------------- |  | ------------------------------------ | ------ | - | ------------------------------------ | ----- | - |  | - | ----- | - |  | ----- | -
|                                                    |  | Nine Months Ended September 30, 2007 |        |   | Nine Months Ended September 30, 2006 |      
|Income taxes computed at the federal statutory rate |  | $                                    | 4,593  |   |                                      | 35.0  | % |  | $ | 1,371 |   |  | 35.0  | %
|State income taxes, net of federal tax benefit      |  |                                      | 408    |   |                                      | 3.1   |   |  |   | 232   |   |  | 5.9   |  
|Foreign taxes at other than U.S. statutory rate     |  |                                      | (2,802 | ) |                                      | (21.4 | ) |  |   | (481  | ) |  | (12.3 | )
|Minority interest                                   |  |                                      | 688    |   |                                      | 5.2   |   |  |   | (4    | ) |  | (0.1  | )
|Net foreign tax credit from deemed paid dividends   |  |                                      | (94    | ) |                                      | (0.7  | ) |  |   |      |   |  |      |  
|Nondeductible goodwill                              |  |                                      |       |   |                                      |      |   |  |   | 53    |   |  | 1.4   |  
|Nondeductible compensation                          |  |                                      | 48     |   |                                      | 0.4   |   |  |   | 105   |   |  | 2.7   |  
|Othernet                                           |  |                                      | (88    | ) |                                      | (0.7  | ) |  |   | (54   | ) |  | (1.4  | )
|Valuation allowance                                 |  |                                      | (360   | ) |                                      | (2.7  | ) |  |   | 467   |   |  | 11.9  |  
|                                                    |  |                                      |        |   |                                      |       |   |  |   |       |   |  |       |  
|                                                    |  | $                                    | 2,393  |   |                                      | 18.2  | % |  | $ | 1,689 |   |  | 43.1  | %
|                                                    |  |                                      |        |   |                                      |       |   |  |   |       |   |  |       |  

Under the Indian Income Tax Act, 1961, the Companys Indian subsidiary, iGate Global
Solutions Limited, 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
three months ended September 30, 2007 and 2006 the tax holiday resulted in benefits of $0.8 million and $0.5 million, respectively, when calculated at the statutory U.S. rate. For the nine months ended September 30, 2007 and 2006 the
corresponding benefits were $3.0 million and $0.5 million, respectively. The majority of the remaining benefits will extend through 2009. There are no adverse tax effects to be considered from the goodwill impairment discussed in Note 3 above as it
is included as part of the subsidiarys tax holiday. Non-operating income, such as interest income and capital gains, is not part of the tax holiday, and has been considered as part of our income tax provision.

5.    Earnings Per Share

The
following table sets forth the computation of earnings per share (in thousands, except per share data):



|                                                           |  |                                  |        |                                 |   |        |  |      |        |  |   |       
|---------------------------------------------------------- |  | -------------------------------- | ------ | ------------------------------- | - | ------ |  | ---- | ------ |  | - | ------
|                                                           |  | Three Months Ended September 30, |        | Nine Months Ended September 30,
|                                                           |  | 2007                             |        | 2006                            |   | 2007   |  | 2006
|Basic income per share:                                    |  |                                  |        |                                 |   |        |  |      |        |  |   |       
|Net income                                                 |  | $                                | 4,331  |                                 | $ | 1,550  |  | $    | 10,730 |  | $ | 2,227 
|                                                           |  |                                  |        |                                 |   |        |  |      |        |  |   |       
|Divided by:                                                |  |                                  |        |                                 |   |        |  |      |        |  |   |       
|Weighted average common shares                             |  |                                  | 53,446 |                                 |   | 52,969 |  |      | 53,234 |  |   | 52,915
|                                                           |  |                                  |        |                                 |   |        |  |      |        |  |   |       
|Net earnings per common share, Basic                       |  | $                                | 0.08   |                                 | $ | 0.03   |  | $    | 0.20   |  | $ | 0.04  
|                                                           |  |                                  |        |                                 |   |        |  |      |        |  |   |       
|Diluted income per share:                                  |  |                                  |        |                                 |   |        |  |      |        |  |   |       
|Net income                                                 |  | $                                | 4,331  |                                 | $ | 1,550  |  | $    | 10,730 |  | $ | 2,227 
|                                                           |  |                                  |        |                                 |   |        |  |      |        |  |   |       
|Divided by:                                                |  |                                  |        |                                 |   |        |  |      |        |  |   |       
|Weighted average common shares                             |  |                                  | 53,446 |                                 |   | 52,969 |  |      | 53,234 |  |   | 52,915
|Dilutive effect of restricted and common stock equivalents |  |                                  | 519    |                                 |   | 233    |  |      | 573    |  |   | 292   
|                                                           |  |                                  |        |                                 |   |        |  |      |        |  |   |       
|Diluted average common shares                              |  |                                  | 53,965 |                                 |   | 53,202 |  |      | 53,807 |  |   | 53,207
|                                                           |  |                                  |        |                                 |   |        |  |      |        |  |   |       
|Net earnings per common share, Diluted                     |  | $                                | 0.08   |                                 | $ | 0.03   |  | $    | 0.20   |  | $ | 0.04  
|                                                           |  |                                  |        |                                 |   |        |  |      |        |  |   |       

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 0.4 million shares and 1.3 million shares, and 0.4 million shares and 1.1 million shares for the three and nine months ended September 30, 2007 and 2006,
respectively. These options were excluded from the computation of diluted earnings per share under the treasury stock method.



11



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iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



6.    Comprehensive Income (Loss)

The components of comprehensive income (loss), net of tax, were as follows:



|                                          |  |                                  |       |      |                                 |       |      |  |      |        |  |   |       |  
|----------------------------------------- |  | -------------------------------- | ----- | ---- | ------------------------------- | ----- | ---- |  | ---- | ------ |  | - | ----- | -
|                                          |  | Three Months Ended September 30, |       |      | Nine Months Ended September 30, |      
|                                          |  | 2007                             |       | 2006 |                                 |       | 2007 |  | 2006 |       
|Net Income                                |  | $                                | 4,331 |      | $                               | 1,550 |      |  | $    | 10,730 |  | $ | 2,227 |  
|Unrealized gain on derivative instruments |  |                                  | 1,282 |      |                                 |      |      |  |      | 1,282  |  |   |      |  
|Foreign Currency Translation              |  |                                  | 1,942 |      |                                 | (201  | )    |  |      | 7,105  |  |   | (702  | )
|                                          |  |                                  |       |      |                                 |       |      |  |      |        |  |   |       |  
|Comprehensive Income                      |  | $                                | 7,555 |      | $                               | 1,349 |      |  | $    | 19,117 |  | $ | 1,525 |  
|                                          |  |                                  |       |      |                                 |       |      |  |      |        |  |   |       |  

7.    Segment Information

The Companys reportable segments are iGATE Solutions, iGATE Professional Services (iPS) and iGATE Shared Services. No operating segments
have been aggregated.

The following tables present selected financial information for the Companys reporting segments for the three
and nine months ended September 30, 2007 and 2006, respectively:



|                                         |  |                                       |        |                             |   |                          |  |   |        |   |  |   |        |  
|---------------------------------------- |  | ------------------------------------- | ------ | --------------------------- | - | ------------------------ |  | - | ------ | - |  | - | ------ | -
|                                         |  | Three Months Ended September 30, 2007 |       
|                                         |  | iGATE Solutions                       |        | iGATE Professional Services |   | iGATE Shared Services(1) |  |   | Total  |  
|                                         |  | (Dollars in thousands)                |       
|External revenues                        |  | $                                     | 49,559 |                             | $ | 25,919                   |  | $ | 668    |   |  | $ | 76,146 |  
|                                         |  |                                       |        |                             |   |                          |  |   |        |   |  |   |        |  
|Income (loss) from operations            |  | $                                     | 5,200  |                             | $ | 2,113                    |  |   | (2,288 | ) |  |   | 5,025  |  
|                                         |  |                                       |        |                             |   |                          |  |   |        |   |  |   |        |  
|Other income, net                        |  |                                       |        |                             |   |                          |  |   | 846    |   |  |   | 846    |  
|Minority interest                        |  |                                       |        |                             |   |                          |  |   | (653   | ) |  |   | (653   | )
|Gain on venture investments              |  |                                       |        |                             |   |                          |  |   | 407    |   |  |   | 407    |  
|Equity in income of affiliated companies |  |                                       |        |                             |   |                          |  |   | 94     |   |  |   | 94     |  
|                                         |  |                                       |        |                             |   |                          |  |   |        |   |  |   |        |  
|(Loss) income before income taxes        |  |                                       |        |                             |   |                          |  | $ | (1,594 | ) |  | $ | 5,719  |  
|                                         |  |                                       |        |                             |   |                          |  |   |        |   |  |   |        |  
|                                         | 
|                                         |  | Three Months Ended September 30, 2006 |       
|                                         |  | iGATE Solutions                       |        | iGATE Professional Services |   | iGATE Shared Services(1) |  |   | Total  |  
|                                         |  | (Dollars in thousands)                |       
|External revenues                        |  | $                                     | 44,067 |                             | $ | 27,530                   |  | $ | 357    |   |  | $ | 71,954 |  
|                                         |  |                                       |        |                             |   |                          |  |   |        |   |  |   |        |  
|Income (loss) from operations            |  | $                                     | 1,348  |                             | $ | 2,357                    |  |   | (2,532 | ) |  |   | 1,173  |  
|                                         |  |                                       |        |                             |   |                          |  |   |        |   |  |   |        |  
|Other income, net                        |  |                                       |        |                             |   |                          |  |   | 942    |   |  |   | 942    |  
|Minority interest                        |  |                                       |        |                             |   |                          |  |   | (149   | ) |  |   | (149   | )
|Equity in income of affiliated companies |  |                                       |        |                             |   |                          |  |   | 87     |   |  |   | 87     |  
|                                         |  |                                       |        |                             |   |                          |  |   |        |   |  |   |        |  
|(Loss) income before income taxes        |  |                                       |        |                             |   |                          |  | $ | (1,652 | ) |  | $ | 2,053  |  
|                                         |  |                                       |        |                             |   |                          |  |   |        |   |  |   |        |  



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iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



|                                         |  |                                      |         |                             |   |        |                          |  |   |        |   |  |   |         |  
|---------------------------------------- |  | ------------------------------------ | ------- | --------------------------- | - | ------ | ------------------------ |  | - | ------ | - |  | - | ------- | -
|                                         |  | Nine Months Ended September 30, 2007 |        
|                                         |  | iGATE Solutions                      |         | iGATE Professional Services |   |        | iGATE Shared Services(1) |  |   | Total  |  
|                                         |  | (Dollars in thousands)               |        
|External revenues                        |  | $                                    | 146,001 |                             | $ | 80,006 |                          |  | $ | 1,633  |   |  | $ | 227,640 |  
|                                         |  |                                      |         |                             |   |        |                          |  |   |        |   |  |   |         |  
|Goodwill impairment                      |  |                                      | 1,950   |                             |   |       |                          |  |   |       |   |  |   | 1,950   |  
|                                         |  |                                      |         |                             |   |        |                          |  |   |        |   |  |   |         |  
|Income (loss) from operations            |  | $                                    | 10,642  |                             | $ | 6,576  |                          |  |   | (7,020 | ) |  |   | 10,198  |  
|                                         |  |                                      |         |                             |   |        |                          |  |   |        |   |  |   |         |  
|Other income, net                        |  |                                      |         |                             |   |        |                          |  |   | 4,863  |   |  |   | 4,863   |  
|Minority interest                        |  |                                      |         |                             |   |        |                          |  |   | (1,966 | ) |  |   | (1,966  | )
|Loss on venture investments              |  |                                      |         |                             |   |        |                          |  |   | (193   | ) |  |   | (193    | )
|Equity in income of affiliated companies |  |                                      |         |                             |   |        |                          |  |   | 221    |   |  |   | 221     |  
|                                         |  |                                      |         |                             |   |        |                          |  |   |        |   |  |   |         |  
|(Loss) income before income taxes        |  |                                      |         |                             |   |        |                          |  | $ | (4,095 | ) |  | $ | 13,123  |  
|                                         |  |                                      |         |                             |   |        |                          |  |   |        |   |  |   |         |  
|                                         | 
|                                         |  | Nine Months Ended September 30, 2006 |        
|                                         |  | iGATE Solutions                      |         | iGATE Professional Services |   |        | iGATE Shared Services(1) |  |   | Total  |  
|                                         |  | (Dollars in thousands)               |        
|External revenues                        |  | $                                    | 122,122 |                             | $ | 85,668 |                          |  | $ | 1,182  |   |  | $ | 208,972 |  
|                                         |  |                                      |         |                             |   |        |                          |  |   |        |   |  |   |         |  
|Restructuring recovery                   |  |                                      |        |                             |   | (555   | )                        |  |   |       |   |  |   | (555    | )
|                                         |  |                                      |         |                             |   |        |                          |  |   |        |   |  |   |         |  
|Income (loss) from operations            |  | $                                    | 887     |                             | $ | 7,580  |                          |  |   | (7,371 | ) |  |   | 1,096   |  
|                                         |  |                                      |         |                             |   |        |                          |  |   |        |   |  |   |         |  
|Other income, net                        |  |                                      |         |                             |   |        |                          |  |   | 2,008  |   |  |   | 2,008   |  
|Minority interest                        |  |                                      |         |                             |   |        |                          |  |   | 12     |   |  |   | 12      |  
|Gain on venture investments              |  |                                      |         |                             |   |        |                          |  |   | 534    |   |  |   | 534     |  
|Equity in income of affiliated companies |  |                                      |         |                             |   |        |                          |  |   | 266    |   |  |   | 266     |  
|                                         |  |                                      |         |                             |   |        |                          |  |   |        |   |  |   |         |  
|(Loss) income before income taxes        |  |                                      |         |                             |   |        |                          |  | $ | (4,551 | ) |  | $ | 3,916   |  
|                                         |  |                                      |         |                             |   |        |                          |  |   |        |   |  |   |         |  

---

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

Assets by segment were as follows:



|                            |  |                        |         |                   |   |        
|--------------------------- |  | ---------------------- | ------- | ----------------- | - | -------
|                            |  | September 30, 2007     |         | December 31, 2006
|                            |  | (Dollars in thousands)
|iGATE Solutions             |  | $                      | 129,758 |                   | $ | 106,034
|iGATE Professional Services |  |                        | 18,594  |                   |   | 20,798 
|iGATE Shared Services       |  |                        | 69,023  |                   |   | 63,942 
|                            |  |                        |         |                   |   |        
|Total assets                |  | $                      | 217,375 |                   | $ | 190,774
|                            |  |                        |         |                   |   |        



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iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



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



|                                      |  |                                  |   |  |                                 |   |  |      |   |  |      |  
|------------------------------------- |  | -------------------------------- | - |  | ------------------------------- | - |  | ---- | - |  | ---- | -
|                                      |  | Three Months Ended September 30, |   |  | Nine Months Ended September 30, |  
|                                      |  | 2007                             |   |  | 2006                            |   |  | 2007 |   |  | 2006 |  
|General Electric Company              |  |                                  |   |  |                                 |   |  |      |   |  |      |  
|iGate Solutions                       |  | 25                               | % |  | 30                              | % |  | 25   | % |  | 32   | %
|iGate Consolidated                    |  | 16                               | % |  | 19                              | % |  | 16   | % |  | 19   | %
|Royal Bank of Canada                  |  |                                  |   |  |                                 |   |  |      |   |  |      |  
|iGate Solutions                       |  | 20                               | % |  | 10                              | % |  | 18   | % |  |     |  
|iGate Consolidated                    |  | 13                               | % |  |                                |   |  | 11   | % |  |     |  
|Chimes, Inc.                          |  |                                  |   |  |                                 |   |  |      |   |  |      |  
|iGate Professional Services           |  |                                 |   |  |                                |   |  |     |   |  | 10   | %
|TEKSystems, Inc.                      |  |                                  |   |  |                                 |   |  |      |   |  |      |  
|iGate Professional Services           |  | 13                               | % |  | 14                              | % |  | 13   | % |  | 12   | %
|International Business Machines Corp. |  |                                  |   |  |                                 |   |  |      |   |  |      |  
|iGate Professional Services           |  | 11                               | % |  | 11                              | % |  | 12   | % |  | 11   | %

8.    Subsequent Events

On October 9, 2007, the Company announced its intention to delist iGS from the Bombay, the National and the Bangalore Stock Exchanges in India. This
important step will simplify the Companys capital structure and reduce its regulatory reporting requirements. Under applicable Indian laws, iGS can be delisted after the Company acquires over 90% of iGSs common stock. The Company
currently owns 81.1% of such stock.

The delisting is subject to the approval of the iGS shareholders and Indian government regulatory
compliance. If consummated, the purchase of the publicly-held shares will be done in accordance with the delisting guidelines of the Securities and Exchange Board of India through a shareholder-led reverse book building process. This process
includes the establishment of a floor or minimum price which is equal to the past 26 week average price of iGS common stock calculated with respect to the date of the Companys public announcement of its intention to delist. This public
announcement will be made shortly after iGSs Extraordinary General Meeting (EGM) of shareholders to approve such delisting, and this meeting has been set for November 13, 2007.

During the next phase of the process, an exit price is discovered and is the price at which the maximum number of shares are tendered during the
reverse-book building process. The Company then has a right to either accept this exit price and complete the delisting or reject such price and not effect the delisting.

Its the Companys intention to complete the delisting only if the final price is reasonable and acceptable to its Board of Directors. If the price is acceptable, the Company expects to finance this
transaction using its existing cash reserves. The expected completion date is late December 2007.

If the delisting offer is successful,
residual minority shareholders will have a right for a period of six months to tender their shares to the Company at the exit price.



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|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- | -------------------------------------------------------------------------------------

Some of the statements in this Form 10-Q contain 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 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 Southern Asia, changes in generally accepted accounting principles and/or their interpretation and other risks that are described in more detail
in our filings with the Securities and Exchange Commission, including our Form 10-K (Form 10-K) for the year ended December 31, 2006 and included herein.

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 through its operating subsidiaries, is a provider of Information Technology (IT) and offshore outsourcing services to large and medium-sized organizations.
These services include client/server design and development, conversion/migration services, offshore outsourcing, enterprise resource planning (ERP) package implementation and integration services, software development and applications
maintenance outsourcing.

Website Access to SEC Reports

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

Business Overview

The use of offshore outsourcing
for IT and Business Process Outsourcing (BPO) services 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.

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

Going forward, our principal strategy is to offer offshore-based IT and BPO services to our clients in various industries. Some of our current service
offerings are non-IT related and include services as diverse as call centers, clinical trials management, and mortgage servicing. 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.



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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 and Oracle.

Reportable Financial Segments

We segment our business according to our service offerings. Our approach reflects the way we and our chief operating decision makers analyze and manage
our businesses. The composition of segments and measure of segment profitability is consistent with that used by our management. Please refer to Note 7 in this Form 10-Q which details the financial results of each principal business segment.

The following are brief descriptions of each of our segments.

iGATE Solutions

The iGATE Solutions
segments (iGATE Solutions) service offerings include outsourcing of IT and BPO services using an onsite/offshore delivery model. This delivery model helps clients achieve greater cost effectiveness. The operations of iGate Global
Solutions Limited (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 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 and Dalian,
China. 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 majority-owned Indian subsidiary. Our iGATE Solutions segment has approximately 5,980 employees.

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

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

The iGATE Solutions segment services customers in a wide range of industries. The segments largest customer is General Electric
Company (GE) which accounted for 25%, 25%, 30% and 32% of its revenues for the three and nine months ended September 30, 2007 and 2006, respectively. iGS is a Global Preferred Partner of GE. Its Global Preferred Partnership status
extends through the end of 2009. The Royal Bank of Canada accounted for 20% and 18% of iGS revenues for the three and nine months ended September 30, 2007. The Royal Bank of Canada accounted for 10% of iGS total revenues for the three
months ended September 30, 2006.



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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 and Oracle.

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. For the three and nine months ended September 30, 2007 and 2006, International Business Machines Corp. (IBM) accounted for 11%, 12%, 11% and 11% of iPS revenues,
respectively. For the three and nine months ended September 30, 2007 and 2006, TEK Systems accounted for 13%, 13%, 14% and 12% of iPS revenues, respectively. For the nine months ended September 30, 2006, Chimes, Inc. accounted for 10% of
iPS revenues. iPS has approximately 960 employees.

iGATE Shared Services

The iGATE Shared Services segment includes the operations iGATE Clinical Research International 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 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 90 employees.

Critical Accounting Policies

Our critical accounting polices and recently issued accounting
pronouncements are described in the summary of significant accounting policies as discussed in Note 1 of our Form 10-K. The following paragraphs discuss our newly adopted accounting pronouncements.

Recently Adopted Accounting Pronouncements

In June
2006, the Financial Accounting Standards Board (FASB) issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement 109 (FIN 48). This statement clarifies the
criteria that an individual tax position must satisfy for some or all of the benefits of that position to be recognized in a companys financial statements. FIN 48 prescribes a recognition threshold of more-likely-than-not, and a measurement
attribute for all tax positions taken or expected to be taken on a tax return, in order for those tax positions to be recognized in the financial statements. Effective January 1, 2007, the Company has adopted the provisions of FIN 48 and there
was no material effect on the financial statements. The Company has recorded a cumulative effect adjustment to retained deficit of $0.6 million related to adopting FIN 48. Also, certain amounts have been reclassified in the statement of financial
position in order to comply with the requirements of the statement.

As of January 1, 2007, the Company provided a liability for $1.0
million of unrecognized tax benefits related to various federal and state income tax matters. Of this amount, the amount that would impact the Companys effective tax rate, if recognized, is $0.7 million. The difference between the total amount
of unrecognized tax benefits and the amount that would impact the effective tax rate consists of items that are offset by deferred tax assets, and the federal tax benefit of state income tax items. For the three and nine months ended



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September 30, 2007, the reserve has increased by $0.1 million and $0.3 million, respectively. The Company does not expect that the amounts of
unrecognized tax benefits will change significantly within the next 12 months.

The Company is currently open to audit under the statute of
limitations by the Internal Revenue Service for the years ending December 31, 2003 through 2006. The Company and its subsidiaries state income tax returns are open to audit under the statute of limitations for the years ending December 31,
2002 through 2006.

As of January 1, 2007, the Company has accrued $0.2 million of interest and penalties related to uncertain tax
positions. As of September 30, 2007, the total amount of accrued interest and penalties was $0.2 million. The Company accounts for interest and penalties related to uncertain tax positions as part of its provision for federal and state income
taxes.

Recently Issued Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, which defines fair value, establishes a framework in generally accepted accounting principles for measuring fair value, and
expands disclosures about fair value measurements. This standard only applies when other standards require or permit the fair value measurement of assets and liabilities. It does not increase the use of fair value measurement. SFAS No. 157 is
effective for fiscal years beginning after Nov. 15, 2007. We are currently evaluating the impact of adopting this Statement on our Consolidated Financial Statements.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial LiabilitiesIncluding an Amendment of FASB Statement No. 115. SFAS No. 159
permits entities to choose to measure eligible items at fair value at specified election dates and report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date. SFAS
No. 159 is effective for fiscal years beginning after November 15, 2007. We are currently evaluating the impact of adopting this Statement on our Consolidated Financial Statements.

Results of Operations of our Operating Segments: iGATE Solutions, iPS and iGATE Shared Services for the Three Months Ended September 30, 2007 as Compared to the
Three Months Ended September 30, 2006:

iGATE Solutions

Revenues for iGATE Solutions for the three months ended September 30, 2007 were $49.6 million, an increase of $5.5 million or 12.5% as compared to
$44.1 million for the three months ended September 30, 2006. Our revenue increase for the periods presented 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 project work previously done in the U.S. to India. The migration of work to India resulted in increases in billable headcount, billable hours and utilization of offshore resources in
India.

The gross margin as a percentage of sales (gross margin percentage) for iGATE Solutions was 32.5% for the three months
ended September 30, 2007, as compared to 27.5% for the three months ended September 30, 2006. This improvement was due primarily to the increasing mix of higher profit margin projects from new customers added over the last two years,
higher offshore and onsite billing rates, higher offshore volumes and improved resource utilization.

Selling, general and administrative
expenses (S,G&A expenses) include all costs that are not directly associated with our 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. Corporate costs include costs such as legal, accounting and outside consulting fees. Facilities costs include rent, depreciation, amortization of
intangible assets related to prior



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acquisitions and communications costs. S,G&A expenses for the three months ended September 30, 2007 were $10.9 million or 22% of revenues, as
compared to $10.8 million or 24.4% of revenues for the three months ended September 30, 2006.

Our net employee cost increased
approximately $0.4 million for the quarter ended September 30, 2007 as compared to the quarter ended September 30, 2006, due to annual salary increases which occurred on April 1, recruiting costs and bonuses paid to salaried employees
as we continue to spend less money on temporary employees.

Our net facilities costs increased $0.4 million for the quarter ended
September 30, 2007, mainly due to the opening of another new office building at our campus in Bangalore, India.

Operating income
percentage was 10.5% for the three months ended September 30, 2007 as compared to 3.1% for the three months ended September 30, 2006. The increase in operating income percentage was mainly due to significant increases in revenues and gross
margins.

iGATE Professional Services

Revenues for iPS for the three months ended September 30, 2007 were $25.9 million, a decrease of $1.6 million or 5.9% as compared to $27.5 million for the three months ended September 30, 2006. The decrease
was primarily due to lower billable employee placements and the completion of a major project in the financial services sector.

Gross
margin percentage for iPS was 21.7% for the three months ended September 30, 2007, as compared to 22.5% for the three months ended September 30, 2006. The decline was primarily due to start up costs associated with a new subsidiary and
competitive pricing.

S,G&A expenses for the three months ended September 30, 2007 were $3.5 million or 13.6% of revenues, as
compared to $3.8 million or 14.0% of revenues for the three months ended September 30, 2006.

Our net employee cost decreased
approximately $0.3 million for the quarter ended September 30, 2007 mainly due to decreases in employee salaries, bonuses and commissions and related benefits and H1-B legal fees incurred as a result of decreases in revenues and overall
headcount. Our net corporate cost and facilities costs remained consistent for the periods presented.

Operating income percentage was 8.2%
and 8.6% for the three months ended September 30, 2007 and 2006, respectively as we have been able to control our S,G&A costs as our operating revenues declined.

iGATE Shared Services

Revenues for iGATE for the three months ended September 30, 2007 were
$0.7 million as compared to $0.4 million for the three months ended September 30, 2006. Revenues increased as a result of new clinical studies being conducted at iGATE Clinical Research International Inc. and iGATE Clinical Research
International Private Ltd.

Gross margin percentage was 54.8% for the three months ended September 30, 2007, as compared to 30.3% for
the three months ended September 30, 2006. Revenue increases from new clinical studies generated additional gross margin.

S, G&A
expenses were $2.7 million for the three months ended September 30, 2007, as compared to $2.6 million for the three months ended September 30, 2006. Our S, G&A costs increased mainly due to overall increases in operating costs at
iGATE Clinical Research International Private Ltd as we continue to invest in this business.



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Other Income (Expense) Components

Other income, net for the three months ended September 30, 2007, totaled $0.8 million, compared to $0.9 million for the three months ended September 30, 2006.

During the third quarter of 2007, our net interest income totaled $1.1 million as compared to $0.8 million for the third quarter of 2006. The increase
was due to increased investment yields and additional cash invested as a result of increases in overall cash flow in 2007 as compared to 2006. In the third quarter of 2007, we recognized less than $0.1 million of foreign currency translation losses
related to our intercompany debt with India and $0.2 million of mark to market gains on our ineffective hedges. In the third quarter of 2006, we recognized $0.1 million of foreign currency translation losses related to our intercompany debt with
India and $0.4 million of mark to market gains on our ineffective hedges. Currently, a small portion of our hedging activities still do not meet the minimum requirements for effective hedge accounting treatment under current accounting rules. As a
result, we must recognize some unrealized gains or losses as current period income or loss. During the third quarter of 2007, iGS declared a dividend to their minority shareholders in the amount of $0.4 million as compared to $0.1 million in the
same period of 2006.

In August 2007, we received $0.4 million of cash from an escrow account related to a prior sale of a business. The
cash received was recognized as a gain on venture investments and affiliated companies.

We recognized income on affiliated companies of
$0.1 million for the three months ended September 30, 2007 as compared to $0.1 million for the three months ended September 30, 2006. All activity for both periods presented was related to our investment in the Software AG joint venture.

Minority interest expense was $0.7 million for the three months ended September 30, 2007 and relates to the minority interest portion
of the income of iGS. Minority interest expense was $0.1 million for the three months ended September 30, 2006 also related to the income of iGS.

Income Taxes

Federal income taxes, calculated at the U.S. statutory rate, totaled $2.0 million for the three months ended
September 30, 2007. State income taxes which totaled $0.2 million for the three months ended September 30, 2007 were calculated using a blended statutory rate, and are net of federal income tax benefit. Our income tax provision was $1.4
million at an effective rate of 24.3% for the three months ended September 30, 2007. The tax provision included a benefit of $0.1 million from deemed paid foreign tax credits associated with dividends paid by iGATE Global Solutions Limited
(iGS) our Indian majority-owned subsidiary.

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 $0.8 million for the three months ended September 30, 2007. iGS 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 income tax provision. 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. The impact of the limited or disallowed items discussed above was $0.1 million

Federal income taxes, calculated at the U.S. statutory rate, totaled $0.7 million for the three months ended September 30, 2006. State income taxes which totaled $0.1 million for the three months ended
September 30, 2006 were calculated using a blended statutory rate, and are net of federal income tax benefit. Our income tax provision was $0.5 million at an effective rate of 24.4% for the three months ended September 30, 2006.

Several items caused variations from our statutory income tax provision. iGS our Indian majority-owned subsidiary is eligible to claim a
tax holiday on the majority of its operating income through 2009. The tax holiday resulted in a benefit of $0.5 million for the three months ended September 30, 2006, from non-operating income, such as interest income, that is not included in
the tax holiday.



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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 of less than $0.1 million 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. The impact of the limited or disallowed items discussed above was $0.2 million.

Results of Operations of our Operating Segments: iGATE Solutions, iPS and iGATE Shared Services for the Nine Months Ended September 30, 2007 as Compared to the
Nine Months Ended September 30, 2006:

iGATE Solutions

Revenues for iGATE Solutions for the nine months ended September 30, 2007 were $146.0 million, an increase of $23.9 million or 19.6% as compared to
$122.1 million for the nine months ended September 30, 2006. Our revenue increase for the periods presented 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 project work previously done in the U.S. to India. The migration of work to India resulted in increases in billable headcount, billable hours and utilization of offshore resources in
India.

The gross margin as a percentage of sales for iGATE Solutions was 31.9% for the nine months ended September 30, 2007, as
compared to 26.5% for the nine months ended September 30, 2006. This improvement was due primarily to the increasing mix of higher profit margin projects from new customers added over the last two years, higher offshore and onsite billing
rates, higher offshore volumes and improved resource utilization.

S,G&A expenses for the nine months ended September 30, 2007
were $34.0 million or 23.3% of revenues, as compared to $31.4 million or 25.7% of revenues for the nine months ended September 30, 2006.

Our net employee cost increased approximately $1.6 million for the nine months ended September 30, 2007 as compared to the nine months ended September 30, 2006, due to annual salary increases which occurred on April 1,
recruiting costs and bonuses paid to salaried employees.

Our net corporate cost decreased approximately $0.2 million for the nine months
ended September 30, 2007, related to a decrease in bad debt expense.

Our net facilities costs increased $1.1 million for the nine
months ended September 30, 2007, mainly due to the opening of another new office building at our campus in Bangalore, India.

In June
2007, we recorded a goodwill impairment charge of approximately $1.9 million, related to our July 2006 acquisition of LoanPro. This impairment charge was not considered as part of our discussion of iGS S,G&A costs and was recorded as a
separate line item on our Consolidated Statements of Operations.

Operating income percentage was 7.3% for the nine months ended
September 30, 2007 as compared to 0.7% for the nine months ended September 30, 2006. The increase in operating income percentage was mainly due to significant increases in revenues and gross margins.

iGATE Professional Services

Revenues
for iPS for the nine months ended September 30, 2007 were $80.0 million, a decrease of $5.7 million or 6.6% as compared to $85.7 million for the nine months ended September 30, 2006. The decrease was due primarily to lower billable
employee placements and the completion of a major project in the financial services sector.

Gross margin percentage for iPS was 22.1% for
the nine months ended September 30, 2007, as compared to 22.9% for the nine months ended September 30, 2006. The slight decline was due to start up costs associated with a new subsidiary and competitive pricing.



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S,G&A expenses for the nine months ended September 30, 2007 were $11.1 million or 13.9% of
revenues, as compared to $12.6 million or 14.7% of revenues for the nine months ended September 30, 2006.

Our net employee cost
decreased approximately $0.6 million for the nine months ended September 30, 2007 mainly due to decreases in employee salaries, bonuses and commissions and related benefits and H1-B legal fees incurred as a result of decreases in revenues and
overall headcount. Our net corporate cost decreased approximately $0.4 million for the nine months ended September 30, 2007, mainly due to the settlement of a contingent liability recorded in 2006 related to a wage dispute regarding overtime
wages. Our facilities costs remained consistent for the periods presented.

During the nine months ended September 30, 2006, we
recovered $0.6 million of restructuring costs that were recorded in 2001 as a result of a bankruptcy settlement. These recovered costs were not considered as part of our discussion of iPS S,G&A costs and is shown on a separate line item on
our Consolidated Statements of Operations.

Operating income percentage was 8.2% for the nine months ended September 30, 2007 and 8.8%
for the nine months ended September 30, 2006. This decline was due primarily to decreases in revenues and the previously mentioned reserve for the wage dispute.

iGATE Shared Services

Revenues for iGATE for the nine months ended September 30, 2007 were $1.6
million as compared to $1.2 million for the nine months ended September 30, 2006. Revenues increased as a result of new clinical studies being conducted at iGATE Clinical Research International Inc. and iGATE Clinical Research International
Private Ltd.

Gross margin percentage was 44.5% for the nine months ended September 30, 2007, as compared to 42.8% for the nine months
ended September 30, 2006. Revenue increases from new clinical studies generated additional gross margin.

S,G&A costs were $7.7
million for the nine months ended September 30, 2007, as compared to $7.9 million for the nine months ended September 30, 2006. These S,G&A corporate cost decreases were offset by increases in operating costs at iGATE Clinical Research
International Private Ltd as we continue to invest in this business.

Other Income (Expense) Components

Other income, net for the nine months ended September 30, 2007, totaled $4.9 million, compared to $2.0 million for the nine months ended
September 30, 2006.

For the nine months ended September 30, 2007, our net interest income totaled $3.1 million as compared to
$2.3 million for the nine months ended September 30, 2006. The increase was due to increased investment yields and additional cash invested as a result of increases in overall cash flow in 2007. For the nine months ended September 30,
2007, we recognized $0.1 million of foreign currency translation gains related to our intercompany debt with India and $2.0 million of mark to market gains on our ineffective hedges. For the nine months ended September 30, 2006, we recognized
$0.8 million of foreign currency translation losses related to our intercompany debt with India, offset by $0.5 million of mark to market gains on our ineffective hedges. Currently, a small portion of our hedging activities do not meet the minimum
requirements for effective hedge accounting treatment under current accounting rules. As a result, we must recognize some unrealized gains or losses as current period income or loss. In 2006, we also recognized an additional gain in the amount of
$0.3 million related to the sale of our Canadian operation as certain working capital estimates made as part of the sale were finalized. During the third quarter of 2007, iGS declared a dividend to their minority shareholders in the amount of $0.4
million as compared to $0.1 million in the same period of 2006.



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In August 2007, we received $0.4 million of cash from an escrow account related to a prior sale of a
business. The cash received was recognized as a gain on venture investments and affiliated companies.

In May 2007, Concours Group Inc., a
company in which we invested $3.1 million in 2003, was sold. We received no proceeds as a result of the sale because other investors had preferential rights to the sale proceeds. Our remaining investment of $0.6 million was recorded in the second
quarter of 2007 as a loss on venture investments and affiliated companies.

In June 2006, we sold our investment in Brainbench for $0.5
million in cash. In 2001, we recognized a loss of $2.1 million on this investment because at the time we believed the investment had no significant value. The cash proceeds received was recognized as a gain on venture investments and affiliated
companies.

We recognized income on affiliated companies of $0.2 million for the nine months ended September 30, 2007 as compared to
$0.3 million for the nine months ended September 30, 2006. All activity for both periods presented was related to our investment in the Software AG joint venture.

Minority interest expense was $2.0 million for the nine months ended September 30, 2007 and relates to the minority interest portion of the income of iGS. Minority interest income was less than $0.1 million for
the nine months ended September 30, 2006 related to the small losses of iGS.

Income Taxes

Federal income taxes, calculated at the U.S. statutory rate, totaled $4.6 million for the nine months ended September 30, 2007. State income taxes
which totaled $0.4 million for the nine months ended September 30, 2007 were calculated using a blended statutory rate, and are net of federal income tax benefit. Our income tax provision was $2.4 million at an effective rate of 18.2% for the
nine months ended September 30, 2007. The tax provision included a benefit of $0.1 million from deemed paid foreign tax credits associated with dividends paid by iGATE Global Solutions Limited (iGS) our Indian majority-owned
subsidiary.

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 $3.0 million for the nine months ended September 30, 2007. iGS 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 income tax provision. 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. The impact of the limited or disallowed items discussed above was $0.5 million

Federal income
taxes, calculated at the U.S. statutory rate, totaled $1.4 million for the nine months ended September 30, 2006. State income taxes which totaled $0.2 million for the nine months ended September 30, 2006 were calculated using a blended
statutory rate, and are net of federal income tax benefit. Our income tax provision was $1.7 million at an effective rate of 43.1% for the nine months ended September 30, 2006.

Several items caused variations from our statutory income tax provision. iGS our Indian majority-owned subsidiary is eligible to claim a tax holiday on
the majority of its operating income through 2009. The tax holiday resulted in a benefit of $0.5 million for the nine months ended September 30, 2006. iGS 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 income tax provision. Amortization expense of $0.1 million 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. The impact of the limited or disallowed items discussed above was $0.6 million.



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Liquidity and Capital Resources

Cash from Operations

Cash provided by operations was $21.5 million for the nine months ended
September 30, 2007. Factors contributing to our cash provided by operations were net income of $10.7 million for the period, partially offset by changes in working capital items of $4.1 million which included an increase in accounts receivable
of $3.6 million. During the period, noncash items totaled $14.9 million and included depreciation and amortization, stock based compensation expense, impairment of LoanPro goodwill, realized loss on sale of affiliated company, minority interest and
deferred income taxes.

Cash provided by operations was $2.4 million for the nine months ended September 30, 2006. Factors
contributing to our cash provided by operations were net income of $2.2 million offset by changes in working capital items of $9.1 million that included an increase to our accounts receivable balances of $7.3 million and increases to other working
capital items of $1.8 million. Noncash items during the nine months ended September 30, 2006 totaled $9.2 million and included depreciation and amortization, stock based compensation expense, deferred taxes, restructuring reserve recovery and
minority interest.

Investing Activities

Cash used in investing activities for the nine months ended September 30, 2007 was $17.9 million, as compared to cash used in investing activities of $6.3 million for the nine months ended September 30,
2006.

Our capital expenditures were $7.1 million and $7.0 million for nine months ended September 30, 2007 and 2006, respectively.
Significant portions of capital expenditures in both periods presented were due to expansion of our Whitefield campus located in Bangalore, India.

We have increased our short-term investment portfolios by $10.8 million for the nine months ended September 30, 2007. We decreased our short-term investment portfolio by $0.6 million for the nine months ended September 30, 2006.

We acquired cash of $0.3 million as part of our acquisition of an additional 55% of the equity LoanPro for the nine months ended
September 30, 2006. We made no acquisitions in 2007.

In 2006, we invested $0.2 million in unconsolidated affiliates. We made no such
investments in 2007.

Financing Activities

Cash provided by financing activities was $2.4 million and $1.4 million for the nine months ended September 30, 2007 and 2006, respectively. Sources of cash related to stock option exercises were $2.5 million and
$1.5 million in 2007 and 2006, respectively. Tax benefits recognized in conjunction with the adoption SFAS 123(R) was $0.1 million in 2007 and were not significant for the same period in 2006.

Payments on secured financing for automobiles in India were $0.2 million and $0.1 million for nine months ended September 30, 2007 and 2006,
respectively.

The PNC Facility was renewed on August 22, 2007 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 to
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 September 30, 2007.

On October 9, 2007, the Company announced its intention to delist iGS from the Bombay, the National and the Bangalore Stock Exchanges
in India. This important step will simplify the Companys capital structure and



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reduce its regulatory reporting requirements. Under applicable Indian laws, iGS can be delisted after the Company acquires over 90% of iGSs common
stock. The Company currently owns 81.1% of such stock.

The delisting is subject to the approval of the iGS shareholders and Indian
government regulatory compliance. If consummated, the purchase of the publicly-held shares will be done in accordance with the delisting guidelines of the Securities and Exchange Board of India through a shareholder-led reverse book building
process. This process includes the establishment of a floor or minimum price which is equal to the past 26 week average price of iGS common stock calculated with respect to the date of the Companys public announcement of its intention to
delist. This public announcement will be made shortly after iGSs Extraordinary General Meeting (EGM) of shareholders to approve such delisting, and this meeting has been set for November 13, 2007.

During the next phase of the process, an exit price is discovered and is the price at which the maximum number of shares are tendered during the
reverse-book building process. The Company then has a right to either accept this exit price and complete the delisting or reject such price and not effect the delisting.

Its the Companys intention to complete the delisting only if the final price is reasonable and acceptable to its Board of Directors. If the price is acceptable, the Company expects to finance this
transaction using its existing cash reserves. The expected completion date is late December 2007.

If the delisting offer is successful,
residual minority shareholders will have a right for a period of six months to tender their shares to the Company at the exit price.

The
Company believes that cash generated from operations and amounts available under its credit facility are adequate to meet the Companys reasonably foreseeable operating and capital expenditure requirements.

Contractual Obligations

As part of our acquisition
of iGATE Clinical Research International Private Ltd., we may be required to fund its existing operations for an amount of up to $3.0 million, based upon mutually agreed upon operating needs. We funded $0.9 million of this requirement during the
nine months ended September 30, 2007, and $0.3 million during the nine months ended September 30, 2006. We have funded a total of $2.4 million thus far in connection with this agreement.

Off-Balance Sheet Arrangements

We do not have any
off-balance sheet arrangements.



|ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|------- | ----------------------------------------------------------

Market Risk Factors

We are exposed to market risks from adverse changes in interest rates and foreign exchange 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 cash flow and earnings are subject to fluctuations due to exchange rate variation between the Rupee and the U.S. Dollar (USD) and the Rupee and the Canadian Dollar (CAD). This foreign currency risk
exists based upon the nature of iGS operations. The majority of iGS customers are North American based, which provides an inherent foreign currency risk between USD, CAD 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 iGS:

LIST OF OUTSTANDING HEDGE TRANSACTIONS ON SEPTEMBER 30, 2007



|                              |  |                      |  |                                   |  |                        |         |        |               |                                                  |   |       |  
|----------------------------- |  | -------------------- |  | --------------------------------- |  | ---------------------- | ------- | ------ | ------------- | ------------------------------------------------ | - | ----- | -
|                              |  |                      |  |                                   |  | (Dollars in thousands) |        
|                              |  | Maturity Date Ranges |  | Strike Price at Rupee Rate Ranges |  | Amount                 |         | Option |               | Net Unrealized Gains/(Losses) September 30, 2007 |  
|FORWARD CONTRACTSUSD         |  |                      |  |                                   |  |                        |         |        |               |                                                  |   |       |  
|From:                         |  | October 29, 2007     |  | 40.62                             |  |                        |         |        |               |                                                  |   |       |  
|To:                           |  | December 31, 2008    |  | 42.28                             |  |                        |         |        |               |                                                  |   |       |  
|                              |  |                      |  |                                   |  |                        |         |        |               |                                                  |   |       |  
|Subtotal                      |  |                      |  |                                   |  | $                      | 20,000  |        |               |                                                  | $ | 763   |  
|                              |  |                      |  |                                   |  |                        |         |        |               |                                                  |   |       |  
|CURRENCY OPTION CONTRACTSUSD |  |                      |  |                                   |  |                        |         |        |               |                                                  |   |       |  
|From:                         |  | December 27, 2007    |  | 40.65                             |  | $                      | 22,500  |        | Buy/Sell Put  |                                                  |   |       |  
|To:                           |  | August 31, 2009      |  | 43.00                             |  | $                      | 13,500  |        | Buy/Sell Call |                                                  |   |       |  
|                              |  |                      |  |                                   |  |                        |         |        |               |                                                  |   |       |  
|Subtotal                      |  |                      |  |                                   |  | $                      | 36,000  |        |               |                                                  | $ | 1,039 |  
|                              |  |                      |  |                                   |  |                        |         |        |               |                                                  |   |       |  
|FORWARD CONTRACTSCAD         |  |                      |  |                                   |  |                        |         |        |               |                                                  |   |       |  
|From:                         |  | January 31, 2008     |  | 38.72                             |  |                        |         |        |               |                                                  |   |       |  
|To:                           |  | March 28, 2008       |  | 39.43                             |  |                        |         |        |               |                                                  |   |       |  
|                              |  |                      |  |                                   |  |                        |         |        |               |                                                  |   |       |  
|Subtotal                      |  |                      |  |                                   |  | $                      | 3,000   |        |               |                                                  | $ | (68   | )
|                              |  |                      |  |                                   |  |                        |         |        |               |                                                  |   |       |  
|CURRENCY OPTION CONTRACTSCAD |  |                      |  |                                   |  |                        |         |        |               |                                                  |   |       |  
|From:                         |  | October 27, 2007     |  | 38.00                             |  | $                      | 3,000   |        | Buy/Sell Put  |                                                  |   |       |  
|To:                           |  | December 27, 2007    |  | 39.49                             |  | $                      | 3,000   |        | Buy/Sell Call |                                                  |   |       |  
|                              |  |                      |  |                                   |  |                        |         |        |               |                                                  |   |       |  
|Subtotal                      |  |                      |  |                                   |  | $                      | 6,000   |        |               |                                                  | $ | (77   | )
|                              |  |                      |  |                                   |  |                        |         |        |               |                                                  |   |       |  
|PRINCIPAL SWAPS               |  |                      |  |                                   |  |                        |         |        |               |                                                  |   |       |  
|                              |  | December 27, 2007    |  |                                   |  | $                      | 651     |        | USD           |                                                  | $ | (19   | )
|                              |  |                      |  |                                   |  |                        | 1,000   |        | SGD           |                                                  |   |       |  
|                              |  | December 27, 2007    |  |                                   |  | $                      | 673     |        | USD           |                                                  | $ | (38   | )
|                              |  |                      |  |                                   |  |                        | 500     |        | EURO          |                                                  |   |       |  
|                              |  | December 27, 2007    |  |                                   |  | $                      | 1,624   |        | USD           |                                                  | $ | (105  | )
|                              |  |                      |  |                                   |  |                        | 200,000 |        | JPY           |                                                  |   |       |  
|                              |  | December 27, 2007    |  |                                   |  | $                      | 2,000   |        | USD           |                                                  | $ | (43   | )
|                              |  |                      |  |                                   |  |                        | 1,000   |        | GBP           |                                                  |   |       |  
|                              |  |                      |  |                                   |  |                        |         |        |               |                                                  |   |       |  
|Subtotal                      |  |                      |  |                                   |  |                        |         |        |               |                                                  | $ | (205  | )
|                              |  |                      |  |                                   |  |                        |         |        |               |                                                  |   |       |  
|Total                         |  |                      |  |                                   |  |                        |         |        |               |                                                  | $ | 1,452 |  
|                              |  |                      |  |                                   |  |                        |         |        |               |                                                  |   |       |  

The net unrealized gains/(losses) were calculated using a Rupee exchange rate of 39.667.

As of September 30, 2007, iGate Global Solutions Limiteds (iGS) forward contracts to hedge intercompany cash flows
will all mature by December 31, 2008. As each contract matures, iGS will receive Rupees at the contracted (strike price) rate while delivering either the U.S. Dollar (USD) or Canadian Dollar



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(CAD) 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 September 30, 2007 certain previously existing 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 approximately $0.3 million. Contracts entered into subsequent to July 1, 2007 met qualifying criteria to receive
hedge accounting and have been deemed to be effective. As a result, iGS has appropriately recorded other comprehensive income of $0.3 million.

As of September 30, 2007, iGS option contracts to hedge intercompany cash flows will all mature by August 31, 2009. As each contract matures and dependent upon prevailing Rupee exchange rates, iGS will either buy USDs or
CADs at each contracted put strike price or sell USDs or CADs 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 income 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 September 30, 2007 certain previously existing 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. Contracts entered into subsequent to July 1, 2007 met qualifying criteria to receive hedge accounting and have been deemed to be effective. As a result iGS
has appropriately recorded other comprehensive income of $1.0 million.

As of September 30, 2007, iGS 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 September 30, 2007, the principal swaps to hedge intercompany debt did not meet qualifying criteria to receive hedge accounting. At September 30, 2007, iGS recorded a liability for the
unrealized loss of $0.2 million.

Interest Rate Sensitivity

We are 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 our 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 Currency Rate Fluctuations

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

As of September 30,
2007, the potential gain or loss in the fair value of iGS outstanding foreign currency contracts assuming hypothetical 10%, 5%, 2% and 1% fluctuations in currency rates would be approximately:



|                       |  |                                                 |        |                                    |   |                                                 |  |      |        |  |    |        |    |   |        |  |   |        |  |   |        |  |   |        |   |  |   |        |  
|---------------------- |  | ----------------------------------------------- | ------ | ---------------------------------- | - | ----------------------------------------------- |  | ---- | ------ |  | -- | ------ | -- | - | ------ |  | - | ------ |  | - | ------ |  | - | ------ | - |  | - | ------ | -
|                       |  | Valuation given X% decrease in rupee / USD rate |        | Fair Value as ofSeptember 30, 2007 |   | Valuation given X% increase in Rupee / USD rate | 
|                       |  | (10%)                                           |        | (5%)                               |   | (2%)                                            |  | (1%) |        |  | 1% |        | 2% |   | 5%     |  |   | 10%    | 
|Rupee to U.S. Rate     |  |                                                 | 35.700 |                                    |   | 37.684                                          |  |      | 38.874 |  |    | 39.270 |    |   | 39.667 |  |   | 40.064 |  |   | 40.460 |  |   | 41.650 |   |  |   | 43.634 |  
|Derivative Instruments |  | $                                               | 7.6    |                                    | $ | 4.4                                             |  | $    | 2.5    |  | $  | 1.9    |    | $ | 1.3    |  | $ | 0.6    |  | $ | 0.0    |  | $ | (1.9   | ) |  | $ | (5.1   | )
|                       |  |                                                 |        |                                    |   |                                                 |  |      |        |  |    |        |    |   |        |  |   |        |  |   |        |  |   |        |   |  |   |        |  



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

Inflation

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

For all significant foreign operations, the functional currency is
the local currency. Assets and liabilities of these operations are translated at the exchange rate in effect at each period end. Statement of Operations accounts are translated at the average exchange rate prevailing during the year. Translation
adjustments arising from the use of differing exchange rates from period to period are included as a component of other comprehensive income (loss). Realized gains and losses from foreign currency transactions are included in net income for the
periods presented. Exchange rate transaction gains (losses) did not have a significant impact on operations for the three or nine months ended September 30, 2007.

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

We believe that the IT and BPO industries in India are in their infancy, and that significant revenue and profit
growth opportunities remain ahead of us. The global market for IT services and BPO services is estimated to be nearly $300 billion by 2010. McKinsey & Company and the National Association of Software and Services Companies, an Indian
industry group, have estimated that just 10% of the global market for the types of IT and BPO services we offer has been penetrated.

Our
goals for 2007 include a focus on accelerating revenue growth by aggressively pursing larger, Global 2000 clients and multi-year projects and advancing our new service offerings. We will also remain squarely focused on continuing to improve margins
and overall profitability.



|ITEM 4. | CONTROLS AND PROCEDURES
|------- | -----------------------

Disclosure Controls and Procedures

For the nine month period ended September 30, 2007, 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 Rules 13a-15(b)
and 15d-15(b) of the Securities Exchange Act of 1934, as amended. 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.

Changes in Internal
Control Over Financial Reporting

There were no changes in internal control over financial reporting (as such term is defined in
Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended) that occurred during the third quarter of 2007 that have materially affected, or are reasonably likely to materially affect, the Companys internal control
over financial reporting.



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PART II.    OTHER INFORMATION

ITEM 1A.    RISK FACTORS

Risk factors associated with our business are discussed in
Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2006.

Risks Associated with the Proposed Delisting

On October 9, 2007, the Company announced its intention to delist iGS from the Bombay, the National and the Bangalore Stock
Exchanges in India. The Company expects that the delisting will simplify the Companys capital structure and reduce its regulatory reporting requirements. Under applicable Indian laws, iGS can be delisted after the Company acquires over
90% of iGSs common stock. The Company currently owns 81.1% of such stock. The delisting is subject to the approval of the iGS shareholders and Indian government regulatory compliance. If consummated, the purchase of the publicly-held
shares will be done in accordance with the delisting guidelines of the Securities and Exchange Board of India through a shareholder-led reverse book building process. This process includes the establishment of a floor or minimum price which is equal
to the past 26 week average price of iGS common stock calculated with respect to the date of the Companys public announcement of its intention to delist. This public announcement will be made shortly after iGSs Extraordinary General
Meeting of shareholders to approve such delisting, and this meeting has been set for November 13, 2007. During the next phase of the process, an exit price is discovered and is the price at which the maximum number of shares are tendered
during the reverse-book building process. The Company then has a right to either accept this exit price and complete the delisting or reject such price and not effect the delisting. If the price is acceptable, the Company expects to finance
this transaction using its existing cash reserves. The expected completion date is late December 2007. If the delisting offer is successful, residual minority shareholders will have a right for a period of six months to tender their shares to
the Company at the exit price. Because the floor and exit prices are as yet undetermined, the total cost to the Company to repurchase the minority shares and consummate the delisting is unknown. If consummated, the purchase of shares in
conjunction with the iGS delisting will substantially reduce the Companys cash reserves, which could have a material adverse effect on the business and future prospects of the Company. There can be no assurance that the delisting will be
consummated, or, if consummated that it will not have an adverse effect on the Companys operations or stock price.

ITEM 6.    EXHIBITS



|(a) | Exhibits
|--- | --------



|      |  |                                                                                                                                                                     
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
|31.01 |  | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Chief Executive Officer is filed herewith.                                               
|      | 
|31.02 |  | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Chief Financial Officer is filed herewith.                                               
|      | 
|32.01 |  | Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Chief Executive Officer is filed herewith.
|      | 
|32.02 |  | Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Chief Financial Officer is filed herewith.



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SIGNATURES

Pursuant to the requirements of
Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 7thday of November, 2007.



|                 |  |  |  |                                                                            
|---------------- |  |  |  | ---------------------------------------------------------------------------
|November 7, 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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