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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





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, 2008



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

Commission File Number 000-21755





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.)
|                                                               | 
|6528 Kaiser Drive Fremont, CA                                  |  | 94555                               
|(Address of principal executive offices)                       |  | (Zip Code)                          

Registrants telephone number, including area code: (510) 896-3015





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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days.    Yes  x    No    ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.:



|                           |  |                                               |  |                             
|-------------------------- |  | --------------------------------------------- |  | ----------------------------
|Large accelerated filer   ̈ |  |                                               |  | Accelerated filer  x        
|                           |  |                                              
|Non-accelerated filer   ̈   |  | (Do not check if a smaller reporting company) |  | Smaller reporting company   ̈

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, 2008 was 54,154,740.









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iGATE CORPORATION

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 30, 2008

TABLE OF CONTENTS



|                              |  |                                                                                                              |  |     
|----------------------------- |  | ------------------------------------------------------------------------------------------------------------ |  | ----
|                              |  |                                                                                                              |  | Page
|PART I. FINANCIAL INFORMATION |  | 3                                                                                                           
|                              |  |                                                                                                             
|Item 1.                       |  | Financial Statements:                                                                                        |  |     
|                              |  |                                                                                                             
|                              |  | Condensed Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2008 and 2007 |  | 3   
|                              |  |                                                                                                             
|                              |  | Condensed Consolidated Balance Sheets as of September 30, 2008 and December 31, 2007                        |  | 4   
|                              |  |                                                                                                             
|                              |  | Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2008 and 2007       |  | 5   
|                              |  |                                                                                                             
|                              |  | Notes to Unaudited Condensed Consolidated Financial Statements                                              |  | 6   
|                              |  |                                                                                                             
|Item 2.                       |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                        |  | 20  
|                              |  |                                                                                                             
|Item 3.                       |  | Quantitative and Qualitative Disclosures About Market Risk                                                   |  | 29  
|                              |  |                                                                                                             
|Item 4.                       |  | Controls and Procedures                                                                                      |  | 30  
|                              | 
|PART II. OTHER INFORMATION    |  | 31                                                                                                          
|                              |  |                                                                                                             
|Item 1A.                      |  | Risk Factors                                                                                                 |  | 31  
|                              |  |                                                                                                             
|Item 4.                       |  | Submission of Matters to a Vote of Security Holders                                                          |  | 31  
|                              |  |                                                                                                             
|Item 6.                       |  | Exhibits                                                                                                     |  | 31  
|                              |  |                                                                                                             
|                              |  | SIGNATURES                                                                                                   |  | 32  



2



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PART I. FINANCIAL INFORMATION



|ITEM 1. | FINANCIAL STATEMENTS
|------- | --------------------

iGATE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Amounts in thousands, except per share data)

(Unaudited)



|                                                                          |  |                                 |        |   |                                |   |        |      |  |   |         |   |  |   |         |  
|------------------------------------------------------------------------- |  | ------------------------------- | ------ | - | ------------------------------ | - | ------ | ---- |  | - | ------- | - |  | - | ------- | -
|                                                                          |  | Three Months EndedSeptember 30, |        |   | Nine Months EndedSeptember 30, |  
|                                                                          |  | 2008                            |        |   | 2007                           |   |        | 2008 |  |   | 2007    |  
|Revenues                                                                  |  | $                               | 55,418 |   |                                | $ | 50,390 |      |  | $ | 167,298 |   |  | $ | 148,099 |  
|Cost of revenues (exclusive of item shown separately below)               |  |                                 | 34,143 |   |                                |   | 34,287 |      |  |   | 105,820 |   |  |   | 101,439 |  
|                                                                          |  |                                 |        |   |                                |   |        |      |  |   |         |   |  |   |         |  
|Gross margin                                                              |  |                                 | 21,275 |   |                                |   | 16,103 |      |  |   | 61,478  |   |  |   | 46,660  |  
|Selling, general and administrative                                       |  |                                 | 11,378 |   |                                |   | 9,951  |      |  |   | 33,092  |   |  |   | 31,298  |  
|Depreciation and amortization                                             |  |                                 | 2,449  |   |                                |   | 2,705  |      |  |   | 8,345   |   |  |   | 7,841   |  
|Goodwill impairment                                                       |  |                                 |       |   |                                |   |       |      |  |   |        |   |  |   | 1,950   |  
|                                                                          |  |                                 |        |   |                                |   |        |      |  |   |         |   |  |   |         |  
|Income from operations                                                    |  |                                 | 7,448  |   |                                |   | 3,447  |      |  |   | 20,041  |   |  |   | 5,571   |  
|Other income, net                                                         |  |                                 | 968    |   |                                |   | 804    |      |  |   | 3,198   |   |  |   | 4,770   |  
|Minority interest                                                         |  |                                 |       |   |                                |   | (653   | )    |  |   | (371    | ) |  |   | (1,966  | )
|Gain (loss) on investment                                                 |  |                                 |       |   |                                |   | 407    |      |  |   |        |   |  |   | (193    | )
|Equity in income of affiliated companies                                  |  |                                 |       |   |                                |   | 94     |      |  |   | 2       |   |  |   | 221     |  
|                                                                          |  |                                 |        |   |                                |   |        |      |  |   |         |   |  |   |         |  
|Income from continuing operations before income taxes                     |  |                                 | 8,416  |   |                                |   | 4,099  |      |  |   | 22,870  |   |  |   | 8,403   |  
|Income tax (benefit) expense                                              |  |                                 | (40    | ) |                                |   | 1,150  |      |  |   | 541     |   |  |   | 1,749   |  
|                                                                          |  |                                 |        |   |                                |   |        |      |  |   |         |   |  |   |         |  
|Income from continuing operations                                         |  |                                 | 8,456  |   |                                |   | 2,949  |      |  |   | 22,329  |   |  |   | 6,654   |  
|(Loss) income from discontinued operations, net of taxes                  |  |                                 | (162   | ) |                                |   | 1,382  |      |  |   | 1,781   |   |  |   | 4,076   |  
|                                                                          |  |                                 |        |   |                                |   |        |      |  |   |         |   |  |   |         |  
|Net income                                                                |  | $                               | 8,294  |   |                                | $ | 4,331  |      |  | $ | 24,110  |   |  | $ | 10,730  |  
|                                                                          |  |                                 |        |   |                                |   |        |      |  |   |         |   |  |   |         |  
|Net earnings from continuing operations per common sharebasic            |  |                                 | 0.15   |   |                                |   | 0.05   |      |  |   | 0.42    |   |  |   | 0.12    |  
|Net (loss) earnings from discontinued operations per common sharebasic   |  |                                 |       |   |                                |   | 0.03   |      |  |   | 0.03    |   |  |   | 0.08    |  
|                                                                          |  |                                 |        |   |                                |   |        |      |  |   |         |   |  |   |         |  
|Net earnings per common sharebasic                                       |  | $                               | 0.15   |   |                                | $ | 0.08   |      |  | $ | 0.45    |   |  | $ | 0.20    |  
|                                                                          |  |                                 |        |   |                                |   |        |      |  |   |         |   |  |   |         |  
|Net earnings from continuing operations per common sharediluted          |  |                                 | 0.15   |   |                                |   | 0.05   |      |  |   | 0.40    |   |  |   | 0.12    |  
|Net (loss) earnings from discontinued operations per common sharediluted |  |                                 |       |   |                                |   | 0.03   |      |  |   | 0.03    |   |  |   | 0.08    |  
|                                                                          |  |                                 |        |   |                                |   |        |      |  |   |         |   |  |   |         |  
|Net earnings per common sharediluted                                     |  | $                               | 0.15   |   |                                | $ | 0.08   |      |  | $ | 0.43    |   |  | $ | 0.20    |  
|                                                                          |  |                                 |        |   |                                |   |        |      |  |   |         |   |  |   |         |  

See accompanying notes.



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iGATE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

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



|                                                                                                                                        |  |                              |         |   |                  |   |         |  
|--------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------- | ------- | - | ---------------- | - | ------- | -
|                                                                                                                                        |  | September 30,2008(Unaudited) |         |   | December 31,2007 |  
|ASSETS                                                                                                                                  |  |                              |         |   |                  |   |         |  
|Current assets:                                                                                                                         |  |                              |         |   |                  |   |         |  
|Cash and cash equivalents                                                                                                               |  | $                            | 29,919  |   |                  | $ | 46,655  |  
|Short-term investments                                                                                                                  |  |                              | 31,441  |   |                  |   | 25,295  |  
|Accounts receivable, net                                                                                                                |  |                              | 35,885  |   |                  |   | 31,708  |  
|Unbilled revenues                                                                                                                       |  |                              | 10,875  |   |                  |   | 8,539   |  
|Prepaid and other current assets                                                                                                        |  |                              | 3,286   |   |                  |   | 10,077  |  
|Prepaid income taxes                                                                                                                    |  |                              | 1,715   |   |                  |   | 894     |  
|Deferred tax assets                                                                                                                     |  |                              | 551     |   |                  |   | 63      |  
|Receivable from Mastech                                                                                                                 |  |                              | 2,681   |   |                  |   | 536     |  
|Current assets of discontinued operations                                                                                               |  |                              |        |   |                  |   | 16,269  |  
|                                                                                                                                        |  |                              |         |   |                  |   |         |  
|Total current assets                                                                                                                    |  |                              | 116,353 |   |                  |   | 140,036 |  
|                                                                                                                                        |  |                              |         |   |                  |   |         |  
|Non-current assets of discontinued operations                                                                                           |  |                              |        |   |                  |   | 2,351   |  
|Deposits                                                                                                                                |  |                              | 2,859   |   |                  |   | 2,126   |  
|Investments                                                                                                                             |  |                              | 1,065   |   |                  |   | 943     |  
|Land, building, equipment and leasehold improvements, net                                                                               |  |                              | 34,033  |   |                  |   | 34,239  |  
|Deferred tax assets                                                                                                                     |  |                              | 4,807   |   |                  |   |        |  
|Intangible assets, net                                                                                                                  |  |                              | 3,369   |   |                  |   | 1,003   |  
|Goodwill                                                                                                                                |  |                              | 30,284  |   |                  |   | 35,773  |  
|                                                                                                                                        |  |                              |         |   |                  |   |         |  
|Total assets                                                                                                                            |  | $                            | 192,770 |   |                  | $ | 216,471 |  
|                                                                                                                                        |  |                              |         |   |                  |   |         |  
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                    |  |                              |         |   |                  |   |         |  
|Current liabilities:                                                                                                                    |  |                              |         |   |                  |   |         |  
|Accounts payable                                                                                                                        |  | $                            | 2,516   |   |                  | $ | 3,846   |  
|Accrued payroll and related costs                                                                                                       |  |                              | 10,991  |   |                  |   | 14,384  |  
|Accrued income taxes                                                                                                                    |  |                              |        |   |                  |   | 631     |  
|Accrued expenses                                                                                                                        |  |                              | 14,481  |   |                  |   | 7,968   |  
|Foreign exchange derivative contracts                                                                                                   |  |                              | 6,549   |   |                  |   |        |  
|Other current liabilities                                                                                                               |  |                              | 4,989   |   |                  |   | 9,719   |  
|Restructuring reserve                                                                                                                   |  |                              | 443     |   |                  |   | 1,058   |  
|Deferred revenue                                                                                                                        |  |                              | 616     |   |                  |   | 495     |  
|Current liabilities of discontinued operations                                                                                          |  |                              |        |   |                  |   | 8,335   |  
|                                                                                                                                        |  |                              |         |   |                  |   |         |  
|Total current liabilities                                                                                                               |  |                              | 40,585  |   |                  |   | 46,436  |  
|Other long-term liabilities                                                                                                             |  |                              | 4,971   |   |                  |   | 536     |  
|Foreign exchange derivative contracts, long term                                                                                        |  |                              | 3,096   |   |                  |   |        |  
|Deferred tax liabilities                                                                                                                |  |                              | 1,248   |   |                  |   | 7,096   |  
|                                                                                                                                        |  |                              |         |   |                  |   |         |  
|Total liabilities                                                                                                                       |  |                              | 49,900  |   |                  |   | 54,068  |  
|                                                                                                                                        |  |                              |         |   |                  |   |         |  
|Minority interest                                                                                                                       |  |                              |        |   |                  |   | 6,437   |  
|Shareholders equity:                                                                                                                   |  |                              |         |   |                  |   |         |  
|Preferred shares, without par value: 20,000,000 shares authorized, 1 share held in treasury in 2008 and 2007                            |  |                              |        |   |                  |   |        |  
|Common shares, par value $0.01 per share:                                                                                               |  |                              |         |   |                  |   |         |  
|100,000,000 shares authorized, and 55,106,374 and 54,619,807 shares issued as of September 30, 2008 and December 31, 2007,
respectively |  |                              | 551     |   |                  |   | 546     |  
|Common shares held in treasury, at cost, 990,102 shares                                                                                 |  |                              | (14,714 | ) |                  |   | (14,714 | )
|Additional paid-in capital                                                                                                              |  |                              | 171,536 |   |                  |   | 165,757 |  
|Retained earnings (deficit)                                                                                                             |  |                              | 8,820   |   |                  |   | (6,026  | )
|Accumulated other comprehensive (loss) income                                                                                           |  |                              | (23,323 | ) |                  |   | 10,403  |  
|                                                                                                                                        |  |                              |         |   |                  |   |         |  
|Total shareholders equity                                                                                                              |  |                              | 142,870 |   |                  |   | 155,966 |  
|                                                                                                                                        |  |                              |         |   |                  |   |         |  
|Total liabilities and shareholders equity                                                                                              |  | $                            | 192,770 |   |                  | $ | 216,471 |  
|                                                                                                                                        |  |                              |         |   |                  |   |         |  

See accompanying notes.



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iGATE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)



|                                                                                                                                              |  |                                |             |   |      |   |             |  
|--------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------ | ----------- | - | ---- | - | ----------- | -
|                                                                                                                                              |  | Nine Months endedSeptember 30, |            
|                                                                                                                                              |  | 2008                           |             |   | 2007 |  
|Cash Flows From Operating Activities:                                                                                                         |  |                                |             |   |      |   |             |  
|Net income                                                                                                                                    |  | $                              | 24,110      |   |      | $ | 10,730      |  
|Less: Income from discontinued operations, net of taxes                                                                                       |  |                                | 1,781       |   |      |   | 4,076       |  
|Adjustments to reconcile net income to cash provided by continuing operations:                                                                |  |                                |             |   |      |   |             |  
|Depreciation and amortization                                                                                                                 |  |                                | 8,345       |   |      |   | 7,841       |  
|Stock based compensation                                                                                                                      |  |                                | 3,443       |   |      |   | 2,684       |  
|Receipts from termination of land sale contract                                                                                               |  |                                | (1,148      | ) |      |   |            |  
|Realized gain on investments                                                                                                                  |  |                                | (1,805      | ) |      |   | (407        | )
|Bad debt expense                                                                                                                              |  |                                | 334         |   |      |   | 171         |  
|Deferred income taxes                                                                                                                         |  |                                | (2,869      | ) |      |   | (1,044      | )
|Equity in income of affiliated companies                                                                                                      |  |                                | (2          | ) |      |   | (221        | )
|Gain on sale of fixed assets                                                                                                                  |  |                                | (105        | ) |      |   |            |  
|Minority interest                                                                                                                             |  |                                | 371         |   |      |   | 1,966       |  
|Unrealized loss on derivative instruments                                                                                                     |  |                                | 740         |   |      |   | 174         |  
|Impairment of goodwill                                                                                                                        |  |                                |            |   |      |   | 1,950       |  
|Realized loss on sale of affiliated company                                                                                                   |  |                                |            |   |      |   | 642         |  
|Working capital items:                                                                                                                        |  |                                |             |   |      |   |             |  
|Accounts receivable and unbilled receivable                                                                                                   |  |                                | (14,745     | ) |      |   | (3,461      | )
|Prepaid and other assets                                                                                                                      |  |                                | 3,945       |   |      |   | (828        | )
|Accounts payable                                                                                                                              |  |                                | (831        | ) |      |   | 612         |  
|Accrued and other liabilities                                                                                                                 |  |                                | 15,807      |   |      |   | 2,894       |  
|Deferred revenue                                                                                                                              |  |                                | 223         |   |      |   | (415        | )
|Restructuring reserve                                                                                                                         |  |                                | (615        | ) |      |   | (188        | )
|                                                                                                                                              |  |                                |             |   |      |   |             |  
|Net cash flows provided by operating activitiescontinuing operations Net cash flows provided by operating activitiesdiscontinued operations |  |                                | 33,4172,608 |   |      |   | 19,0242,438 |  
|                                                                                                                                              |  |                                |             |   |      |   |             |  
|Cash Flows From Investing Activities:                                                                                                         |  |                                |             |   |      |   |             |  
|Additions to land, building, equipment and leasehold improvements, net                                                                        |  |                                | (10,897     | ) |      |   | (6,746      | )
|Purchases of investments, net                                                                                                                 |  |                                | (10,449     | ) |      |   | (10,756     | )
|Receipts from termination of land sale contract                                                                                               |  |                                | 1,148       |   |      |   |            |  
|Payments for lease deposits                                                                                                                   |  |                                | (1,181      | ) |      |   |            |  
|Proceeds from sale of iCRI, net of cash transferred                                                                                           |  |                                | 2,925       |   |      |   |            |  
|Purchase of iGS stock and stock option settlement                                                                                             |  |                                | (28,137     | ) |      |   |            |  
|Proceeds from sale of joint venture                                                                                                           |  |                                | 905         |   |      |   |            |  
|                                                                                                                                              |  |                                |             |   |      |   |             |  
|Net cash flows used in investing activitiescontinuing operations                                                                             |  |                                | (45,686     | ) |      |   | (17,502     | )
|Net cash flows used in investing activitiesdiscontinued operations                                                                           |  |                                | (164        | ) |      |   | (379        | )
|                                                                                                                                              |  |                                |             |   |      |   |             |  
|Cash Flows From Financing Activities:                                                                                                         |  |                                |             |   |      |   |             |  
|Payments on secured financing                                                                                                                 |  |                                | (193        | ) |      |   | (181        | )
|Cash portion of iPS business distributed to shareholders                                                                                      |  |                                | (4,777      | ) |      |   |            |  
|Net proceeds from exercise of stock options                                                                                                   |  |                                | 1,885       |   |      |   | 2,540       |  
|Tax benefits related to stock option exercises                                                                                                |  |                                | 90          |   |      |   |            |  
|                                                                                                                                              |  |                                |             |   |      |   |             |  
|Net cash flows provided by financing activitiescontinuing operations Net cash flows provided by financing activitiesdiscontinued operations |  |                                | (2,995     | ) |      |   | 2,359      |  
|                                                                                                                                              |  |                                |             |   |      |   |             |  
|Effect of currency translation                                                                                                                |  |                                | (6,945      | ) |      |   | (1,476      | )
|                                                                                                                                              |  |                                |             |   |      |   |             |  
|Net change in cash and cash equivalents                                                                                                       |  |                                | (19,765     | ) |      |   | 4,464       |  
|Cash and cash equivalents, beginning of period of continuing operations                                                                       |  |                                | 46,655      |   |      |   | 46,077      |  
|Cash and cash equivalents, beginning of period of discontinued operations                                                                     |  |                                | 3,029       |   |      |   | 6,077       |  
|Cash and cash equivalents, end of the period of discontinued operations                                                                       |  |                                |            |   |      |   | (2,975      | )
|                                                                                                                                              |  |                                |             |   |      |   |             |  
|Cash and cash equivalents, end of period                                                                                                      |  |                                | 29,919      |   |      |   | 53,643      |  
|                                                                                                                                              |  |                                |             |   |      |   |             |  

See accompanying notes



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iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30,
2008 AND 2007

(Amounts in thousands)

1. Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements of iGATE Corporation
(iGATE or the Company) have been prepared by management in accordance with U.S. generally accepted accounting principles for interim financial information and applicable rules and regulations of the Securities and Exchange
Commission. Accordingly, they do not include all of the information and disclosures required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of the management, all adjustments (consisting only of
normally recurring adjustments) considered necessary for a fair presentation have been included.

The accompanying balance sheet and
financial information as of December 31, 2007 is derived from audited financial statements but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.
The results of operations for the three and nine months ended September 30, 2008 are not necessarily indicative of the results that may be expected for the full year. These financial statements should be read in conjunction with the
Companys audited financial statements and notes thereto included in its Annual Report on Form 10-K for the year ended December 31, 2007.

Principles of Consolidation

The Condensed Consolidated Financial Statements include the accounts of the Company and its
subsidiaries. All intercompany accounts and transactions have been eliminated except as discussed in Note 2 below.

Use of Estimates

Preparing financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenues and expenses. Actual results may differ from these estimates. Interim results are not necessarily indicative of results for a full year.

Reclassifications

Certain amounts in the previous
periods financial statements and notes were reclassified to conform to the current periods presentations.

2. Discontinued Operations

On April 16, 2008, the Company executed an agreement to sell iGATE Clinical Research International Inc., and iGATE Clinical Research
International Private Limited (collectively iCRI). On July 31, 2008, the Company concluded the sale of iCRI for cash consideration of approximately $3.6 million which includes a cash transfer of $0.7 million. The sale resulted in a
gain of approximately $1.8 million, which is included in income from discontinued operations.

On February 26, 2008, the Board of
Directors of iGATE authorized management to pursue the divestiture of its Professional Services segment (iPS), either through a sale or a tax-free separation where the Professional Services business, subject to certain conditions, would
be contributed to a new corporation (Mastech Holdings Inc., or Mastech) and such corporations common stock would be distributed to iGATEs shareholders,



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iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

SEPTEMBER 30, 2008 AND 2007

(Amounts in thousands)



creating a separate public company with its own management and board of directors. On September 4, 2008, the Board of Directors authorized management to
utilize a tax-free separation for the divestiture and declared a stock dividend consisting of 1 share of Mastech for each 15 shares of iGATE.

On September 30, 2008, the Company completed the spin-off of Mastech. The distribution of common stock of the newly formed company was considered a tax free transaction for the Company and for its shareholders.

The Company incurred costs of approximately $3 million including amounts associated with investment banking fees and other transaction costs related to
the spin-off, which are included in income from discontinued operations.

iGATE will continue to provide Mastech employees with coverage
under iGATE employee benefit plans through December 31, 2008. However, Mastech will reimburse iGATE premiums for such services and coverage.

In accordance with Statement of Financial Accounting Standards (SFAS) No. 144, Accounting for the Impairment or Disposal of Long Lived Assets, the assets and liabilities, results of operations and cash
flows of iCRI and Mastech have been classified as discontinued operations in the Condensed Consolidated Financial Statements for all periods presented through the date of sale and spin-off. Cash flows of iCRI and Mastech have been segregated in the
Condensed Consolidated Statement of Cash Flows as separate line items within operating, investing and financing activities.

In accordance
with Emerging Issues Task Force (EITF) Issue no. 03-13, Applying the Conditions in Paragraph 42 of FASB Statement No. 144 in Determining Whether to Report Discontinued Operations the Company determined that the
outsourcing services provided by iGATE Solutions (iGS) to Mastech are not significant and hence do not result in significant continuing involvement in the operations of Mastech. These services are provided in the normal course of
business and are expected to continue post spin-off. Revenue billed by iGS to Mastech, which was an intercompany transaction prior to the spin-off and hence eliminated in the Condensed Consolidated Statements of Income for the three and nine months
ended September 30, 2008 amounting to $0.5 million and $1.4 million, respectively, and September 30, 2007, amounting to $0.8 million and $2.1 million, respectively, is reported within the income from continuing operations. Related
receivable by iGS from Mastech amounting to $0.4 million and $0.5 million as at September 30, 2008 and December 31, 2007, respectively, is reported on the balance sheets.

The financial information for the discontinued operations is shown below:



|                                                       |  |                                 |        |                                |      |   |        |  |      |        |  |   |       
|------------------------------------------------------ |  | ------------------------------- | ------ | ------------------------------ | ---- | - | ------ |  | ---- | ------ |  | - | ------
|                                                       |  | Three Months EndedSeptember 30, |        | Nine Months EndedSeptember 30,
|                                                       |  | 2008                            |        |                                | 2007 |   | 2008   |  | 2007
|Revenues                                               |  | $                               | 24,396 |                                |      | $ | 26,587 |  | $    | 75,724 |  | $ | 81,640
|Gain on sale of investment                             |  |                                 | 1,830  |                                |      |   |       |  |      | 1,830  |  |   |      
|Spin-off transaction costs                             |  |                                 | 2,997  |                                |      |   |       |  |      | 2,997  |  |   |      
|(Loss) income from discontinued operations before tax  |  |                                 | (93    | )                              |      |   | 1,620  |  |      | 2,178  |  |   | 4,720 
|Income tax expense                                     |  |                                 | 69     |                                |      |   | 238    |  |      | 397    |  |   | 644   
|                                                       |  |                                 |        |                                |      |   |        |  |      |        |  |   |       
|(Loss) income from discontinued operations, net of tax |  | $                               | (162   | )                              |      | $ | 1,382  |  | $    | 1,781  |  | $ | 4,076 
|                                                       |  |                                 |        |                                |      |   |        |  |      |        |  |   |       



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iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

SEPTEMBER 30, 2008 AND 2007

(Amounts in thousands)



|                                                    |  |                   |   |                  |   |       
|--------------------------------------------------- |  | ----------------- | - | ---------------- | - | ------
|                                                    |  | September 30,2008 |   | December 31,2007
|Assets:                                             |  |                   |   |                  |   |       
|Building, equipment and leasehold improvements, net |  | $                 |  |                  | $ | 1,467 
|Goodwill                                            |  |                   |  |                  |   | 789   
|Other assets                                        |  |                   |  |                  |   | 13,335
|Cash                                                |  |                   |  |                  |   | 3,029 
|                                                    |  |                   |   |                  |   |       
|Assets of discontinued operations                   |  | $                 |  |                  | $ | 18,620
|                                                    |  |                   |   |                  |   |       
|Liabilities:                                        |  |                   |   |                  |   |       
|Accounts payable                                    |  | $                 |  |                  | $ | 2,880 
|Other liabilities                                   |  |                   |  |                  |   | 5,455 
|                                                    |  |                   |   |                  |   |       
|Liabilities of discontinued operations              |  | $                 |  |                  | $ | 8,335 
|                                                    |  |                   |   |                  |   |       

3. Goodwill and Intangible Assets

In connection with the delisting of the Companys majority-owned subsidiary, iGS from the Indian stock exchanges, the Company continued to increase
its ownership in iGS to 99.10% as of September 30, 2008 from 93.45% as of December 31, 2007 at a cost of $20.1 million. The Company is currently in the process of acquiring the remaining outstanding minority shares. The delisting process
began in 2007 and the total cost of acquisition of shares through September 30, 2008 is $64.6 million, including $2.8 million payable to the remaining shareholders included in other current liabilities. The total estimated cost of acquisition
has been allocated to the assets acquired and liabilities assumed based on a determination of their fair value. The following table summarizes the allocation.



|                                                        |  |        |        |  
|------------------------------------------------------- |  | ------ | ------ | -
|                                                        |  | Amount |       
|Minority interest                                       |  | $      | 19,234 |  
|Intangible (customer relationships)                     |  |        | 4,352  |  
|Land                                                    |  |        | 4,074  |  
|Building and other assets                               |  |        | 2,067  |  
|Goodwill                                                |  |        | 26,568 |  
|Reversal of deferred tax liability on iGS dilution gain |  |        | 9,710  |  
|Deferred tax liability                                  |  |        | (1,417 | )
|                                                        |  |        |        |  
|Total purchase consideration                            |  | $      | 64,588 |  
|                                                        |  |        |        |  

Changes in the carrying value of goodwill are as follows:



|                                     |  |        |        |  
|------------------------------------ |  | ------ | ------ | -
|                                     |  | Amount |       
|Goodwill as of December 31, 2007     |  | $      | 35,773 |  
|Goodwill on acquisition of iGS       |  |        | 6,743  |  
|Purchase price allocation adjustment |  |        | (6,576 | )
|Foreign currency translation effect  |  |        | (5,656 | )
|                                     |  |        |        |  
|Goodwill as of September 30, 2008    |  | $      | 30,284 |  
|                                     |  |        |        |  



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iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

SEPTEMBER 30, 2008 AND 2007

(Amounts in thousands)



Intangible assets as at September 30, 2008 comprised of customer relationships of $9.1 million and
accumulated amortization on them of $5.7 million.

4. Income Taxes

The provision (benefit) for income taxes, as shown in the accompanying Condensed Consolidated Financial Statements, consists of the following:



|                                           |  |                                 |        |   |                                |   |       |      |  |   |        |   |  |   |       |  
|------------------------------------------ |  | ------------------------------- | ------ | - | ------------------------------ | - | ----- | ---- |  | - | ------ | - |  | - | ----- | -
|                                           |  | Three Months EndedSeptember 30, |        |   | Nine Months EndedSeptember 30, |  
|                                           |  | 2008                            |        |   | 2007                           |   |       | 2008 |  |   | 2007   |  
|Current provision (benefit):               |  |                                 |        |   |                                |   |       |      |  |   |        |   |  |   |       |  
|Federal                                    |  | $                               | (98    | ) |                                | $ | 757   |      |  | $ | (286   | ) |  | $ | 1,108 |  
|State                                      |  |                                 | 211    |   |                                |   | 263   |      |  |   | 29     |   |  |   | 53    |  
|Foreign                                    |  |                                 | 1,124  |   |                                |   | 1,030 |      |  |   | 3,627  |   |  |   | 1,520 |  
|                                           |  |                                 |        |   |                                |   |       |      |  |   |        |   |  |   |       |  
|Total current provision                    |  |                                 | 1,237  |   |                                |   | 2,050 |      |  |   | 3,370  |   |  |   | 2,681 |  
|                                           |  |                                 |        |   |                                |   |       |      |  |   |        |   |  |   |       |  
|Deferred provision (benefit):              |  |                                 |        |   |                                |   |       |      |  |   |        |   |  |   |       |  
|Federal                                    |  |                                 | (1,012 | ) |                                |   | 129   |      |  |   | (327   | ) |  |   | 321   |  
|State                                      |  |                                 | (151   | ) |                                |   | (190  | )    |  |   | 128    |   |  |   | 48    |  
|Foreign                                    |  |                                 | (1,109 | ) |                                |   | (613  | )    |  |   | (3,448 | ) |  |   | (940  | )
|Valuation allowance                        |  |                                 | 995    |   |                                |   | (226  | )    |  |   | 818    |   |  |   | (361  | )
|                                           |  |                                 |        |   |                                |   |       |      |  |   |        |   |  |   |       |  
|Total deferred (benefit)                   |  |                                 | (1,277 | ) |                                |   | (900  | )    |  |   | (2,829 | ) |  |   | (932  | )
|                                           |  |                                 |        |   |                                |   |       |      |  |   |        |   |  |   |       |  
|Total (benefit) provision for income taxes |  | $                               | (40    | ) |                                | $ | 1,150 |      |  | $ | 541    |   |  | $ | 1,749 |  
|                                           |  |                                 |        |   |                                |   |       |      |  |   |        |   |  |   |       |  

The reconciliation of income taxes computed using the statutory U.S. income tax rate and the
provision for income taxes were as follows:



|                                                    |  |                                      |        |   |                                      |       |    |  |   |       |   |  |       |  
|--------------------------------------------------- |  | ------------------------------------ | ------ | - | ------------------------------------ | ----- | -- |  | - | ----- | - |  | ----- | -
|                                                    |  | Three Months EndedSeptember 30, 2008 |        |   | Three Months EndedSeptember 30, 2007 |      
|Income taxes computed at the federal statutory rate |  | $                                    | 2,946  |   |                                      | 35.0  | %  |  | $ | 1,435 |   |  | 35.0  | %
|State income taxes, net of federal tax benefit      |  |                                      | 39     |   |                                      | 0.5   |    |  |   | 49    |   |  | 1.2   |  
|Foreign taxes at other than U.S. statutory rate     |  |                                      | (3,073 | ) |                                      | (36.6 | )  |  |   | (634  | ) |  | (15.5 | )
|Minority interest                                   |  |                                      |       |   |                                      |      |    |  |   | 226   |   |  | 5.6   |  
|Amortization of acquired intangibles                |  |                                      | 90     |   |                                      | 1.1   |    |  |   |      |   |  |      |  
|Othernet                                           |  |                                      | (1,038 | ) |                                      | (12.3 | )  |  |   | 300   |   |  | 7.3   |  
|Valuation allowance                                 |  |                                      | 996    |   |                                      | 11.8  |    |  |   | (226  | ) |  | (5.5  | )
|                                                    |  |                                      |        |   |                                      |       |    |  |   |       |   |  |       |  
|                                                    |  | $                                    | (40    | ) |                                      | (0.5  | )% |  | $ | 1,150 |   |  | 28.1  | %
|                                                    |  |                                      |        |   |                                      |       |    |  |   |       |   |  |       |  



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##### Table of Contents

iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

SEPTEMBER 30, 2008 AND 2007

(Amounts in thousands)



|                                                    |  |                                     |        |   |                                     |       |   |  |   |        |   |  |       |  
|--------------------------------------------------- |  | ----------------------------------- | ------ | - | ----------------------------------- | ----- | - |  | - | ------ | - |  | ----- | -
|                                                    |  | Nine Months EndedSeptember 30, 2008 |        |   | Nine Months EndedSeptember 30,
2007 |      
|Income taxes computed at the federal statutory rate |  | $                                   | 8,004  |   |                                     | 35.0  | % |  | $ | 2,941  |   |  | 35.0  | %
|State income taxes, net of federal tax benefit      |  |                                     | 102    |   |                                     | 0.4   |   |  |   | 66     |   |  | 0.8   |  
|Foreign taxes at other than U.S. statutory rate     |  |                                     | (8,310 | ) |                                     | (36.3 | ) |  |   | (2,993 | ) |  | (35.7 | )
|Minority interest                                   |  |                                     | 130    |   |                                     | 0.6   |   |  |   | 688    |   |  | 8.2   |  
|Amortization of acquired intangibles                |  |                                     | 259    |   |                                     | 1.1   |   |  |   |       |   |  |      |  
|Othernet                                           |  |                                     | (462   | ) |                                     | (2.0  | ) |  |   | 1,408  |   |  | 16.8  |  
|Valuation allowance                                 |  |                                     | 818    |   |                                     | 3.6   |   |  |   | (361   | ) |  | (4.3  | )
|                                                    |  |                                     |        |   |                                     |       |   |  |   |        |   |  |       |  
|                                                    |  | $                                   | 541    |   |                                     | 2.4   | % |  | $ | 1,749  |   |  | 20.8  | %
|                                                    |  |                                     |        |   |                                     |       |   |  |   |        |   |  |       |  

Under the Indian Income Tax Act, 1961, iGS is eligible to claim a tax holiday for ten consecutive
assessment years on profits derived from the export of software services from divisions registered under the Software Technology Parks at Bangalore, Chennai, Hyderabad and Noida. On certain of the units, the benefits of the holiday expired in 2005.
Additionally, the tax holiday for one of the units in Chennai expired effective April 1, 2008.

For the three months ended
September 30, 2008 and 2007 the tax holiday resulted in benefits of $3 million and $0.6 million, respectively, when calculated at the statutory U.S. rate. For the nine months ended September 30, 2008 and 2007 the corresponding benefits
were $8.3 million and $3.0 million, respectively. On May 10, 2008, the finance bill of India was passed whereby the tax holiday period was extended for one more year through March 31, 2010. The extension of the holiday period did not have
a material effect on the net deferred tax assets recognized by the Company. The majority of the tax holiday benefits will extend through March 31, 2010.

5. Earnings Per Share

The Company computes earnings per share in accordance with SFAS No. 128, Earnings
Per Share. Basic earnings per share are computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share adjusts basic earnings per share for the effects of stock
options, restricted common stock and other potentially dilutive financial instruments in the periods in which the effects are dilutive. For the three and nine months ended September 30, 2008 and 2007, the weighted average number of shares used
in calculating diluted earnings per share includes stock options and restricted common shares.



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iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

SEPTEMBER 30, 2008 AND 2007

(Amounts in thousands)



The following table sets forth the computation of earnings per share:



|                                                                   |  |                                 |        |                                |      |   |        |  |      |        |  |   |       
|------------------------------------------------------------------ |  | ------------------------------- | ------ | ------------------------------ | ---- | - | ------ |  | ---- | ------ |  | - | ------
|                                                                   |  | Three Months EndedSeptember 30, |        | Nine Months EndedSeptember 30,
|                                                                   |  | 2008                            |        |                                | 2007 |   | 2008   |  | 2007
|Numerator:                                                         |  |                                 |        |                                |      |   |        |  |      |        |  |   |       
|Net income from continuing operations                              |  | $                               | 8,456  |                                |      | $ | 2,949  |  | $    | 22,329 |  | $ | 6,654 
|Net income/(loss) from discontinued operations                     |  |                                 | (162   | )                              |      |   | 1,382  |  |      | 1,781  |  |   | 4,076 
|                                                                   |  |                                 |        |                                |      |   |        |  |      |        |  |   |       
|Net income from operations                                         |  | $                               | 8,294  |                                |      | $ | 4,331  |  | $    | 24,110 |  | $ | 10,730
|                                                                   |  |                                 |        |                                |      |   |        |  |      |        |  |   |       
|Denominator:                                                       |  |                                 |        |                                |      |   |        |  |      |        |  |   |       
|Basic weighted average common shares                               |  |                                 | 53,985 |                                |      |   | 53,446 |  |      | 53,818 |  |   | 53,234
|Dilutive effect of stock options and restricted shares outstanding |  |                                 | 1,758  |                                |      |   | 519    |  |      | 1,639  |  |   | 573   
|                                                                   |  |                                 |        |                                |      |   |        |  |      |        |  |   |       
|Diluted weighted average common shares                             |  |                                 | 55,743 |                                |      |   | 53,965 |  |      | 55,457 |  |   | 53,807
|                                                                   |  |                                 |        |                                |      |   |        |  |      |        |  |   |       

6. Comprehensive (Loss) Income

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



|                                                 |  |                                 |        |                                |      |   |       |  |   |         |   |  |   |       
|------------------------------------------------ |  | ------------------------------- | ------ | ------------------------------ | ---- | - | ----- |  | - | ------- | - |  | - | ------
|                                                 |  | Three Months EndedSeptember 30, |        | Nine Months EndedSeptember 30,
|                                                 |  | 2008                            |        |                                | 2007 |   | 2008  |  |   | 2007   
|Net income                                       |  | $                               | 8,294  |                                |      | $ | 4,331 |  | $ | 24,110  |   |  | $ | 10,730
|Unrealized gain on investments                   |  |                                 | 129    |                                |      |   | 1,282 |  |   | 319     |   |  |   | 1,282 
|Unrecognized actuarial gain on pension liability |  |                                 | 96     |                                |      |   |      |  |   | 96      |   |  |   |      
|Change in fair value of cash flow hedges         |  |                                 | (5,232 | )                              |      |   |      |  |   | (11,170 | ) |  |   |      
|Foreign currency translation                     |  |                                 | (9,362 | )                              |      |   | 1,942 |  |   | (22,971 | ) |  |   | 7,105 
|                                                 |  |                                 |        |                                |      |   |       |  |   |         |   |  |   |       
|Comprehensive (loss) income                      |  | $                               | (6,075 | )                              |      | $ | 7,555 |  | $ | (9,616  | ) |  | $ | 19,117
|                                                 |  |                                 |        |                                |      |   |       |  |   |         |   |  |   |       

The Companys forward and option contracts to hedge foreign currency cash flows will mature
by June 30, 2011. As each contract matures, the Company will receive Rupees at the contracted rate while delivering either the U.S. Dollar (USD) or Canadian Dollar (CAD) equivalent of Rupees at the prevailing Rupee
exchange rate. Accordingly, the effective portion of gains and losses is deferred as a component of other comprehensive income (loss) and is recognized in earnings at the time the hedged item affects earnings. Gains and losses due to hedge
ineffectiveness or related to contracts which do not qualify for hedge accounting are recorded in current period earnings and included in other income and expense.

7. Fair Value Measurements

Effective January 1, 2008, the Company adopted SFAS
No. 157, Fair Value Measurements except as it applies to the non-financial assets and non-financial liabilities subject to Financial Staff Positions (FSP) FAS 157-2, Effective Date of FASB Statement
No.157 (FSP FAS 157-2). SFAS No. 157 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an



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iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

SEPTEMBER 30, 2008 AND 2007

(Amounts in thousands)



orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market
participants would use in pricing an asset or a liability. As a basis for considering such assumptions, SFAS No. 157 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair
value:

Level 1Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2Includes other inputs that are directly or indirectly observable in the marketplace.

Level 3Unobservable inputs which are supported by little or no market activity.

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair
value. In accordance with SFAS 157, the Company measures cash equivalents, marketable securities and foreign currency derivative contracts at fair value. Cash equivalents and marketable securities are primarily classified within Level 1 or Level 2.
This is because the cash equivalents and marketable securities are valued primarily using quoted market prices or alternative pricing sources and models utilizing market observable inputs. The foreign currency derivative contracts are classified
within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments in inactive markets.

Assets and liabilities measured at fair value are summarized below:



|                                      |  |                                                   |        |                                                |   |                               |  |   |        |  |  
|------------------------------------- |  | ------------------------------------------------- | ------ | ---------------------------------------------- | - | ----------------------------- |  | - | ------ |  | -
|Description                           |  | September 30,2008                                 |        | Fair value measurement at reporting date using
|                                      |  | Quoted Prices inActive Marketsfor IdenticalAssets |        | SignificantOtherObservableInputs               |   | SignificantUnobservableInputs
|                                      |  | (Level 1)                                         |        | (Level 2)                                      |   | (Level 3)                    
|Assets                                |  |                                                   |        |                                                |   |                               |  |   |        |  |  
|Short term investments:               |  |                                                   |        |                                                |   |                               |  |   |        |  |  
|Money market mutual funds             |  | $                                                 | 30,802 |                                                | $ | 30,802                        |  |   |       |  | 
|                                      |  |                                                   |        |                                                |   |                               |  |   |        |  |  
|Total assets                          |  | $                                                 | 30,802 |                                                | $ | 30,802                        |  |   |        |  |  
|                                      |  |                                                   |        |                                                |   |                               |  |   |        |  |  
|Liabilities                           |  |                                                   |        |                                                |   |                               |  |   |        |  |  
|Other current liabilities             |  |                                                   |        |                                                |   |                               |  |   |        |  |  
|Foreign currency derivative contracts |  | $                                                 | 10,476 |                                                |   |                              |  | $ | 10,476 |  | 
|                                      |  |                                                   |        |                                                |   |                               |  |   |        |  |  
|Total liabilities                     |  | $                                                 | 10,476 |                                                |   |                              |  | $ | 10,476 |  | 
|                                      |  |                                                   |        |                                                |   |                               |  |   |        |  |  

Effective January 1, 2008, the Company also adopted SFAS No. 159, The Fair
Value Option for Financial Assets and Financial Liabilities  including an Amendment of FASB Statement No. 115, which allows an entity to choose to measure certain financial instruments and liabilities at fair value on a
contract-by-contract basis. Subsequent fair value measurement for the financial instruments and liabilities an entity chooses to measure will be recognized in earnings. As of September 30, 2008, the Company did not elect such an option for the
financial instruments and liabilities.

In October 2008, the Financial Accounting Standards Board (FASB) issued FASB Staff
Position No. FAS 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active



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##### Table of Contents

iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

SEPTEMBER 30, 2008 AND 2007

(Amounts in thousands)



(FSP 157-3). FSP 157-3 clarifies the application of SFAS No. 157, Fair Value Measurements, in a market that is not
active and is intended to address the following application issues



| |  |  | How the reporting entitys own assumptions (that is, expected cash flows and appropriately risk-adjusted discount rates) should be considered when measuring
fair value when relevant observable inputs do not exist.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | How available observable inputs in a market that is not active should be considered when measuring fair value.
| | - |  | --------------------------------------------------------------------------------------------------------------



| |  |  | How the use of market quotes (for example, broker quotes or pricing services for the same or similar financial assets) should be considered when assessing the
relevance of observable and unobservable inputs available to measure fair value.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

FSP 157-3 is effective on issuance,
including prior periods for which financial statements have not been issued. As such, the FSP 157-3 is effective for the Company for the reporting period ended 30 September 2008. Adoption of FSP 157-3 did not have a significant impact on the
Companys financial statements.

8. Employee Benefits

Defined Contribution Plan

iGS eligible employees in India participate in the Employees Provident Fund (the
Provident Fund), which is a defined contribution plan. The employee and the Company make monthly contributions of a specified percentage of salary to the Provident Fund, which is administered by the prescribed authority in India. The
aggregate contributions along with interest thereon are paid at retirement, death, incapacitation or termination of employment after a specified period of service. The Companys contribution to the Provident Fund for the three months ended
September 30, 2008 and 2007 was $0.5 million and $0.5 million, respectively and for the nine months ended September 30, 2008 and 2007 it was $1.6 million and $1.5 million, respectively.

Defined Benefit Plan

iGS provides for gratuity, a
defined benefit retirement plan covering eligible employees in India. The plan provides a lump sum payment to the vested employees at retirement, death, incapacitation or termination of employment subject to specified period of service, of an amount
based on the respective employees salary and the tenure of employment. Liabilities with regard to the plan are determined by actuarial valuation. The contributions are made to an iGS administered trust and managed by a third party fund
manager. The following table sets forth the net periodic cost recognized by the Company in respect of such plan.



|                                      |  |                                 |     |   |                                |   |     |      |  |   |      |   |  |   |     |  
|------------------------------------- |  | ------------------------------- | --- | - | ------------------------------ | - | --- | ---- |  | - | ---- | - |  | - | --- | -
|                                      |  | Three Months EndedSeptember 30, |     |   | Nine Months EndedSeptember 30, |  
|                                      |  | 2008                            |     |   | 2007                           |   |     | 2008 |  |   | 2007 |  
|Net periodic plan cost                |  |                                 |     |   |                                |   |     |      |  |   |      |   |  |   |     |  
|Service cost                          |  | $                               | 284 |   |                                | $ | 186 |      |  | $ | 735  |   |  | $ | 474 |  
|Interest cost                         |  |                                 | 33  |   |                                |   | 27  |      |  |   | 99   |   |  |   | 74  |  
|Expected return on plan asset         |  |                                 | (23 | ) |                                |   | (16 | )    |  |   | (64  | ) |  |   | (44 | )
|Recognized net actuarial loss (gain)  |  |                                 | 25  |   |                                |   | 7   |      |  |   | (52  | ) |  |   | 35  |  
|                                      |  |                                 |     |   |                                |   |     |      |  |   |      |   |  |   |     |  
|Net periodic plan cost for the period |  | $                               | 319 |   |                                | $ | 204 |      |  | $ | 718  |   |  | $ | 539 |  
|                                      |  |                                 |     |   |                                |   |     |      |  |   |      |   |  |   |     |  



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iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

SEPTEMBER 30, 2008 AND 2007

(Amounts in thousands)



9. Share-based compensation

During the three months and nine months ended September 30, 2008, the Company granted 132,613 and 155,269 options, respectively and 72,534 and 581,544 restricted stock awards, respectively. During the three
months and nine months ended September 30, 2007 the Company granted 534,787 and 785,151 stock options respectively.

Share-based
compensation expense recorded in income from continuing operations during the three and nine months ended September 30, 2008 and 2007 was as follows:



|                                                         |  |                                |       |   |                               |   |     |      |  |   |       |   |  |   |       |  
|-------------------------------------------------------- |  | ------------------------------ | ----- | - | ----------------------------- | - | --- | ---- |  | - | ----- | - |  | - | ----- | -
|                                                         |  | Three MonthsEndedSeptember 30, |       |   | Nine MonthsEndedSeptember 30, |  
|                                                         |  | 2008                           |       |   | 2007                          |   |     | 2008 |  |   | 2007  |  
|Share-based compensation recorded in                     |  |                                |       |   |                               |   |     |      |  |   |       |   |  |   |       |  
|Cost of revenues                                        |  | $                              | 584   |   |                               | $ | 586 |      |  | $ | 1,559 |   |  | $ | 1,379 |  
|Selling, general and administrative expense             |  |                                | 750   |   |                               |   | 410 |      |  |   | 1,884 |   |  |   | 1,305 |  
|                                                         |  |                                |       |   |                               |   |     |      |  |   |       |   |  |   |       |  
|Total share-based compensation expense                   |  |                                | 1,334 |   |                               |   | 996 |      |  |   | 3,443 |   |  |   | 2,684 |  
|Estimated income tax benefit                             |  |                                | (41   | ) |                               |   | (30 | )    |  |   | (146  | ) |  |   | (96   | )
|                                                         |  |                                |       |   |                               |   |     |      |  |   |       |   |  |   |       |  
|Share-based compensation expense, net of estimated taxes |  | $                              | 1,293 |   |                               | $ | 966 |      |  | $ | 3,297 |   |  | $ | 2,588 |  
|                                                         |  |                                |       |   |                               |   |     |      |  |   |       |   |  |   |       |  

The share-based compensation expense recorded in income from discontinued operation during the
three and nine months ended September 30, 2008 was $93 and $169, respectively, and September 30, 2007 was $177 and $522, respectively.

During the three and nine months ended September 30, 2008 and 2007, the fair value of stock options and restricted stock awards was estimated at the date of grant using the following assumptions:



|                         |  |                                 |   |  |                                |   |  |            |   |  |           |  
|------------------------ |  | ------------------------------- | - |  | ------------------------------ | - |  | ---------- | - |  | --------- | -
|                         |  | Three Months EndedSeptember 30, |   |  | Nine Months EndedSeptember 30, |  
|                         |  | 2008                            |   |  | 2007                           |   |  | 2008       |   |  | 2007      |  
|Expected life (in years) |  | 4.38 years                      |   |  | 4.5 years                      |   |  | 4.38 years |   |  | 4.5 years |  
|Risk free interest rate  |  | 3.05                            | % |  | 4.57                           | % |  | 3.05       | % |  | 4.57      | %
|Volatility               |  | 56.64                           | % |  | 64.02                          | % |  | 56.64      | % |  | 64.02     | %
|Dividend yield           |  |                                |   |  |                               |   |  |           |   |  |          |  

In May 2007, the Indian Government extended its Fringe Benefit Tax (FBT) to
include stock options and restricted stock awards issued to employees in India. A notification dated December 20, 2007 issued by the Government of India clarified that FBT on stock options is applicable to all companies issuing stock options to
employees in India, including those companies not registered under the Companies Act, 1956 of India. Under the new legislation, on exercise of an option, employers are responsible for a tax equal to the intrinsic value of an option at its vesting
date multiplied by the applicable tax rate. The employer can seek reimbursement of the tax from the employee but cannot transfer the obligation to the employee. The Company recovers the FBT from certain employee option and award holders.

The FBT on options and awards payable to the Government of India is recorded as an operating expense and the recovery of the FBT on options from the
employees is treated as additional exercise price and recorded in



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iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

SEPTEMBER 30, 2008 AND 2007

(Amounts in thousands)



shareholders equity. The fair value of options and restricted stock awards issued subsequent to the introduction of the FBT is determined after
considering the FBT as an additional component of the exercise price at the grant date.

As more fully explained in Note 2 of the Condensed
Consolidated Financial Statements, the Company spun off the Professional Services segment of its business to a newly organized company known as Mastech effective September 30, 2008.

In accordance with the anti-dilution provisions of the Companys stock plan, to compensate for the intrinsic value lost by iGATE employee option
holders due to the spin-off, the Company made additional grants to the continuing iGATE employees of 31,933 and 146,909 vested and unvested employee stock options, respectively. The unvested options vest over the same vesting period as the original
unvested options. The Company accounted for these as new grants during the quarter.

The Company modified the vested options initially
granted to the Mastech employees prior to the spin-off so that such optionees will have a period of twelve months following the spin-off to exercise the options. The modification did not result in any additional charge since the exercise period was
in effect reduced to one year as opposed to the balance of the original ten year option term. The Company considered the above substitution of options as a modification of awards. However, since the conversion of Mastech awards is designed to
maintain the same aggregate intrinsic value and ratio of intrinsic value to fair value, the actual adjustment resulting from the operation of that feature did not result in incremental compensation cost.

Additionally, all unvested iGATE options and awards to Mastech employees were substituted with options and awards to purchase Mastech common stock with
the same term, vesting schedule and intrinsic value as existed with respect to such iGATE stock option on September 30, 2008 in conjunction with the spin-off.

10. Other income, net

Components of other income recorded in continuing operations for the three and nine months
period ended September 30, 2008 and 2007 are as follows:



|                           |  |                                 |     |   |                                |   |       |      |  |   |       |   |  |   |       |  
|-------------------------- |  | ------------------------------- | --- | - | ------------------------------ | - | ----- | ---- |  | - | ----- | - |  | - | ----- | -
|                           |  | Three Months EndedSeptember 30, |     |   | Nine Months EndedSeptember 30, |  
|                           |  | 2008                            |     |   | 2007                           |   |       | 2008 |  |   | 2007  |  
|Investment income          |  | $                               | 552 |   |                                | $ | 1,059 |      |  | $ | 1,706 |   |  | $ | 3,072 |  
|Interest expense           |  |                                 | (24 | ) |                                |   | (26   | )    |  |   | (68   | ) |  |   | (71   | )
|Foreign exchange gain, net |  |                                 | 14  |   |                                |   | 151   |      |  |   | 903   |   |  |   | 2,069 |  
|Other                      |  |                                 | 426 |   |                                |   | (380  | )    |  |   | 657   |   |  |   | (300  | )
|                           |  |                                 |     |   |                                |   |       |      |  |   |       |   |  |   |       |  
|Other income, net          |  | $                               | 968 |   |                                | $ | 804   |      |  | $ | 3,198 |   |  | $ | 4,770 |  
|                           |  |                                 |     |   |                                |   |       |      |  |   |       |   |  |   |       |  

11. Capital Structure

During the three months ended September 30, 2008 and 2007, the Company issued 0.3 million and 0.4 million shares, respectively upon exercise of stock options. For the nine months ended
September 30, 2008 and 2007, the Company issued 0.5 million and 0.6 million shares, respectively upon the exercise of stock options.



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iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

SEPTEMBER 30, 2008 AND 2007

(Amounts in thousands)



12. Segment information

The Companys reportable segments through June 30, 2008 were iGATE Solutions (iGS), iGATE Professional Services (iPS) and iGATE Shared Services (iSS). The iGS
segments service offerings includes Information Technology (IT) and IT enabled operations, offshore outsourcing solutions and services to large and medium-sized organizations. The iPS segments offerings included a variety of
client-managed and supervised IT staffing service offerings. This segment services are offered principally in the United States of America. The iSS segments offerings included the operations of the clinical research business (i.e. iGATE
Clinical Research International Inc. and iGATE Clinical Research International Private Limited collectively iCRI) and the corporate shared service division of the Company.

On July 31, 2008, the Company sold off its clinical research business. Additionally, pursuant to an enterprise reorganization, the Company assigned
the resources, including employees, relating to the corporate shared service division in the iSS segment to the iGS segment of its business. Also, as more fully explained in Note 2 of the Condensed Consolidated Financial Statements, effective
September 30, 2008, the Company spun off the iPS segment of its business into a newly formed company known as Mastech Holdings, Inc.

As a consequence of the above mentioned events, currently the business of the Company is comprised solely of the iGS segment (i.e. iGATE). Hence, no segment related disclosures are presented.

In accordance with the requirement of SFAS No. 131,Disclosures about Segments of an Enterprise and Related Information the
previously reported figures as of and for the three and nine months ended September 30, 2007 have not been presented so that the segment information of that period is comparable with the reported information as of and for the three months and
nine months ended September 30, 2008.

Concentration of revenues

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



|                         |  |                                 |   |  |                                |   |  |      |   |  |      |  
|------------------------ |  | ------------------------------- | - |  | ------------------------------ | - |  | ---- | - |  | ---- | -
|                         |  | Three Months EndedSeptember 30, |   |  | Nine Months EndedSeptember 30, |  
|                         |  | 2008                            |   |  | 2007                           |   |  | 2008 |   |  | 2007 |  
|General Electric Company |  | 26                              | % |  | 25                             | % |  | 25   | % |  | 25   | %
|Royal Bank of Canada     |  | 19                              | % |  | 20                             | % |  | 18   | % |  | 18   | %

13. Credit facility

On May 21, 2008, iGS entered into a loan agreement with Citibank N.A. that provided for a $6.5 million working capital line of credit. The loan is secured by way of a charge on all of iGS present and future
receivables, investments, rights to or on moveable properties and moveable current assets. As at September 30, 2008, iGS did not have any amounts outstanding under the line of credit.

14. Contingencies

In June 2005, iGS entered
into a service agreement with a customer that, as amended provides the customer the option to take an equity stake in iGS for up to 7% of iGS outstanding voting shares at fair market value on the date of exercise. The customer may purchase iGS
shares solely at their discretion and must notify iGS of their intention to purchase within thirty days prior to the purchase.



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iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

SEPTEMBER 30, 2008 AND 2007

(Amounts in thousands)



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

15. Termination of Joint Venture Agreement

On March 14, 2008, iGS terminated its joint venture agreement with Software AG, a German corporation and sold its 49% interest in the joint venture
company, Software AG (India) Private Limited to the joint venture partner. The sale resulted in a gain of approximately $0.1 million which is included in the Condensed Consolidated Statement of Income.

16. Recently Issued Accounting Pronouncements

In
September 2008, the Financial Accounting Standards Board (FASB) issued FSP No. 133-1 and FIN 45-4, Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB
Interpretation No. 45; and Clarification of the Effective Date of FASB Statement No. 161 (the FSP). The FSP is intended to improve disclosures about credit derivatives by requiring more information about the potential
adverse effects of changes in credit risk on the financial position, financial performance, and cash flows of the sellers of credit derivatives. It amends SFAS No. 133, Accounting for Derivative Instruments and Hedging
Activities, to require disclosures by sellers of credit derivatives, including credit derivatives embedded in hybrid instruments. The FSP also amends FASB Interpretation No. 45, Guarantors Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of Indebtedness to Others, to require an additional disclosure about the status of the payment/performance risk of a guarantee. The FSP is effective for reporting periods (annual or
interim) ending after 15 November 2008. The Company is currently evaluating and assessing the impact, if any, of the adoption of the FSP on its consolidated financial statements.

In June 2008, FASB issued FSP No. EITF 03-6-1 Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating
Securities (FSP 03-6-1). FSP 03-6-1 requires unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents to be treated as participating securities as defined in EITF Issue
No. 03-6, Participating Securities and the Two-Class Method under FASB Statement No. 128, and, therefore, included in the earnings allocation in computing earnings per share under the two-class method described in SFAS
No. 128, Earnings per Share. The FSP 03-6-1 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those years, with early adoption prohibited. Upon
adoption, all previously reported EPS data (including interim financial statements, summaries of earnings, and selected financial data) should be adjusted retrospectively to conform with the requirements of the FSP 03-6-1. The Company is evaluating
the impact that the adoption of the FSP 03-6-1 will have on its consolidated financial statements.

In May 2008, the FASB issued SFAS
No. 163, Accounting for Financial Guarantee Insurance Contracts. SFAS No. 163 clarifies how SFAS No. 60, Accounting and Reporting by Insurance Enterprises, applies to financial guarantee
insurance contracts issued by insurance enterprises, including the recognition and measurement of premium revenue and claim liabilities. It also requires expanded disclosures about financial guarantee insurance contracts. SFAS No. 163 is
effective for financial statements issued for fiscal years beginning after December 15, 2008, and all interim periods within those fiscal years. The Company does not expect that adoption of this accounting standard will have a significant
impact on its consolidated financial statements.



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iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

SEPTEMBER 30, 2008 AND 2007

(Amounts in thousands)



In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted
Accounting Principles. SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements that are presented in conformity with generally
accepted accounting principles. SFAS No. 162 becomes effective 60 days following the SECs approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity
With Generally Accepted Accounting Principles. The Company does not expect that the adoption of SFAS No. 162 will have a material impact on its consolidated financial statements.

In April 2008, the FASB issued FSP No. FAS 142-3, Determination of the Useful Life of Intangible Assets. FSP No. FAS 142-3 amends the
factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets. The Company
is required to adopt FSP No. FAS 142-3 for fiscal years beginning after December 15, 2008. The Company is evaluating the impact that the adoption of FSP No. FAS 142-3 will have on its consolidated financial statements.

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities an amendment of FASB Statement
No. 133. SFAS No. 161 requires disclosures of how and why an entity uses derivative instruments, how derivative instruments and related hedged items are accounted for and how derivative instruments and related hedged items affect an
entitys financial position, financial performance, and cash flows. SFAS No. 161 is effective for all reporting periods (annual or quarterly interim) beginning after November 15, 2008. The Company is currently evaluating and assessing
the impact, if any, of the adoption of SFAS No. 161 on its consolidated financial statements.

In February 2008, the FASB issued FSP
FAS 157-2, Effective Date of FASB Statement No. 157which defers the effective date of SFAS No. 157 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in
the financial statements on a recurring basis (at least annually) to fiscal years beginning after November 15, 2008, and interim periods within those fiscal years for items within the scope of this FSP. The Company is currently evaluating the
impact of SFAS No. 157 on non-financial assets and non-financial liabilities, but does not expect the adoption of SFAS No. 157 to have a material impact on the Companys consolidated financial position, results of operations or cash
flows.

In December 2007, the FASB issued SFAS No. 141 (revised), Business Combinations. The standard changes the
accounting for business combinations including the measurement of acquirer shares issued in consideration for a business combination, the recognition of contingent consideration, the accounting for preacquisition gain and loss contingencies, the
recognition of capitalized in-process research and development, the accounting for acquisition-related restructuring cost accruals, the treatment of acquisition related transaction costs and the recognition of changes in the acquirers income
tax valuation allowance. SFAS No. 141(R) is effective for fiscal years beginning after December 15, 2008, with early adoption prohibited. SFAS No. 141(R) will become effective for the Company beginning January 1, 2009. The
Company is currently evaluating the impact of the adoption of SFAS No. 141(R) on its consolidated financial statements.

In December
2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements  an amendment of ARB No. 51. The standard changes the accounting for noncontrolling (minority) interests in
consolidated financial statements including the requirements to classify noncontrolling interests as a component of consolidated stockholders equity, and the elimination of minority interest accounting in results of operations with
earnings attributable to noncontrolling interests reported as part of consolidated earnings.



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iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

SEPTEMBER 30, 2008 AND 2007

(Amounts in thousands)



Additionally, SFAS No. 160 revises the accounting for both increases and decreases in a parents controlling ownership interest. SFAS No. 160
is effective for fiscal years beginning after December 15, 2008, with early adoption prohibited. The Company is currently evaluating and assessing the potential impact, if any, of the adoption of SFAS No. 160 on its consolidated financial
statements.

17. Restructuring Charges

During 2007, the Company restructured its operations in the Shared Services segment to improve efficiencies as a result of certain management and organizational changes. The total estimated restructuring costs was $0.8 million primarily
related to severance and related costs. Of the $0.8 million accrued liability as of December 31, 2007, the Company paid $0.6 million during the nine months ended September 30, 2008 and the balance of $0.2 million is outstanding as of
September 30, 2008.

In 2004, the Company restructured its Canadian and United Kingdom operations as a result of organizational
changes. The total restructuring costs were $2.8 million (net of recoveries) primarily relating to the early exit costs of a premises lease and the write off of leasehold improvements. Of the $0.3 million accrued liability as of December 31,
2007, the Company paid $0.1 million during the nine months ended September 30, 2008 and the balance of $0.2 million is outstanding as of September 30, 2008.



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##### Table of Contents

|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, 2007.

Unless otherwise indicated or the context otherwise requires, all references in this report to iGATE, the Company, us, our, or we are to iGATE
Corporation, a Pennsylvania corporation, and its consolidated subsidiaries. iGATE Corporation, formerly named iGATE Capital Corporation, through its operating subsidiaries, is a worldwide provider of Information Technology (IT) and
offshore outsourcing services to large and medium-sized organizations. These services include software application development and maintenance, system integration, implementation and support of enterprise applications, package evaluation and
implementation, re-engineering, data warehousing, business intelligence, analytics, data management and integration, software testing, IT infrastructure management services, transaction processing solutions and services and call center services,
through its offshore development centers located in India and global development centers located in the U.S., Malaysia and Canada and a variety of client-managed and supervised IT staffing service offerings through enterprise resource package
implementation and integration, application support services and client directed software design and customization.

Unless otherwise
indicated, we refer to captions such as revenues and earnings from continuing operations simply as revenues and earnings throughout this Managements Discussion & Analysis. Similarly, discussion of other matters
in our Condensed Consolidated Financial Statements refers to continuing operations unless otherwise indicated.

Website Access to SEC Reports

The Companys website is http://www.igate.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

iGATEs service offerings include Information Technology (IT) and IT enabled operations offshore outsourcing solutions and services to large and medium-sized organizations using an offshore/onsite model.



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The use of offshore outsourcing for IT and IT enabled operations offshore outsourcing solutions and
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 services.

Our principal strategy is to offer offshore-based Integrated Technology and Operations (iTOPS) solutions that integrate IT outsourcing and IT
enabled operations offshore outsourcing solutions and services in a seamless offering as well as conventional IT and business process outsourcing 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 and mortgage and claims processing. We may continue to expand our IT enabled operations offshore outsourcing service offerings through acquisitions and strategic relationships and internal initiatives.

Our iTOPs offerings include outsourcing solutions focused primarily on insurance, banking, financial services and capital markets
industries as well as finance and accounting process outsourcing delivered out of our offshore facilities in India that targets diverse industries

IT services that we deliver using our offshore centers include software application development and maintenance, system integration, implementation and support of enterprise applications, package evaluation and implementation,
re-engineering, data warehousing, business intelligence, analytics, data management and integration, software testing and IT infrastructure management services. We believe that we deliver high quality solutions to our clients at a substantial
savings by using our global pool of highly talented people.

IT enabled operations offshore outsourcing solutions and services offered
include business process outsourcing, transaction processing services and call center 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, financial services, 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 has offshore development centers (ODCs) located in Bangalore, Hyderabad, Chennai and Noida in India. iGATE has global development
centers (GDCs) located in Canada, Malaysia and the U.S. The centers can deliver both near shore (work performed primarily at the client site) and offshore services, dependent upon customer location and expectations. iGATE
operates in India, Canada, the U.S., Europe, Mexico, Singapore, Malaysia, Japan and Australia.

A majority of our clients have headquarters
in the U.S. and operate internationally. iGATE has 6,407 employees as of September 30, 2008.

iGATE 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. Certain contracts with no stated deliverables have a designated workforce and are based on fixed periodic payments. Some process outsourcing contracts provide pricing per transaction. Customers
typically have the right to cancel contracts with minimal notice. Contracts with deliverables or project milestones can provide for certain penalties if the deliverables or project milestones are not met within contract timelines.

iGATE services customers in a wide range of industries. Our largest customer is General Electric Company (GE) which accounted for
approximately 26% and 25% of revenues for the three and nine months ended September 30, 2008, respectively. For the three and nine months ended September 30, 2007, the corresponding figures are 25% and 25% respectively. iGATE is a Global
Preferred Partner of GE. Our Global Preferred Partnership status extends through the end of 2009. Our second largest customer, Royal Bank of Canada, accounted for approximately 19% and 18% of revenues for the three and nine months ended
September 30, 2008, respectively. For the three and nine months ended September 30, 2007, the corresponding figures are 20% and 18%, respectively.



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##### Table of Contents

Reportable Financial Segments

The Companys reportable segments through June 30, 2008 were iGATE Solutions (iGS), iGATE Professional Services (iPS) and iGATE Shared Services (iSS). The iGS
segments service offerings include Information Technology (IT) and IT enabled operations, offshore outsourcing solutions and services to large and medium-sized organizations. The iPS segments offerings included a variety of
client-managed and supervised IT staffing service offerings. This segment services are offered principally in the United States of America. The iSS segments offerings included the operations of the clinical research business (i.e. iGATE
Clinical Research International Inc. and iGATE Clinical Research International Private Ltd. collectively iCRI) and the corporate shared service division of the Company.

On July 31, 2008, the Company sold off its clinical research business. Additionally, pursuant to an enterprise reorganization, the Company assigned
the resources, including employees, relating to the corporate shared service division in the iSS segment to the iGS segment of its business. As more fully explained in Note 2 of the Condensed Consolidated Financial Statements, effective
September 30, 2008, the Company spun off the iPS segment into a newly formed company known as Mastech Holdings, Inc.

As a consequence
of the above mentioned events, currently the business of the Company is comprised solely of the iGS segment (i.e. iGATE). Hence, no segment related disclosures are presented.

Critical Accounting Policies

Our critical accounting polices are described in the summary of
significant accounting policies as discussed in Note 1 of our Form 10-K.

Recently Issued Accounting Pronouncements

The following paragraphs discuss recently issued accounting pronouncements.

In September 2008, the Financial Accounting Standards Board (FASB) issued FSP No. 133-1 and FIN 45-4, Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of FASB
Statement No. 133 and FASB Interpretation No. 45; and Clarification of the Effective Date of FASB Statement No. 161 (the FSP). The FSP is intended to improve disclosures about credit derivatives by
requiring more information about the potential adverse effects of changes in credit risk on the financial position, financial performance, and cash flows of the sellers of credit derivatives. It amends SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities, to require disclosures by sellers of credit derivatives, including credit derivatives embedded in hybrid instruments. The FSP also amends FASB Interpretation No. 45,
Guarantors Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness to Others, to require an additional disclosure about the status of the payment/performance risk of a guarantee. The FSP
is effective for reporting periods (annual or interim) ending after 15 November 2008. The Company is currently evaluating and assessing the impact, if any, of the adoption of the FSP on its consolidated financial statements.

In June 2008, FASB issued FSP No. EITF 03-6-1 Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating
Securities (FSP 03-6-1). FSP 03-6-1 requires unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents to be treated as participating securities as defined in EITF Issue
No. 03-6, Participating Securities and the Two-Class Method under FASB Statement No. 128, and, therefore, included in the earnings allocation in computing earnings per share under the two-class method described in SFAS
No. 128, Earnings per Share. The FSP 03-6-1 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those years, with early adoption prohibited. Upon
adoption, all previously reported EPS data (including interim financial statements, summaries of earnings, and selected financial data) should be adjusted retrospectively to conform with the requirements of the FSP 03-6-1. The Company is evaluating
the impact that the adoption of the FSP 03-6-1 will have on its consolidated financial statements.



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In May 2008, the Financial Accounting Standards Board (FASB) issued SFAS No. 163
Accounting for Financial Guarantee Insurance Contracts. SFAS No. 163 clarifies how SFAS No. 60, Accounting and Reporting by Insurance Enterprises, applies to financial guarantee insurance
contracts issued by insurance enterprises, including the recognition and measurement of premium revenue and claim liabilities. It also requires expanded disclosures about financial guarantee insurance contracts. SFAS No. 163 is effective for
financial statements issued for fiscal years beginning after December 15, 2008, and all interim periods within those fiscal years. The Company does not expect that adoption of this accounting standard will have a significant impact on its
consolidated financial statements.

In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting
Principles. SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements that are presented in conformity with generally accepted
accounting principles. SFAS No. 162 becomes effective 60 days following the SECs approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity With
Generally Accepted Accounting Principles. The Company does not expect that the adoption of SFAS No. 162 will have a material impact on its consolidated financial statements.

In April 2008, the FASB issued FSP No. FAS 142-3, Determination of the Useful Life of Intangible Assets. FSP No. FAS 142-3 amends the
factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets. The Company is
required to adopt FSP No. FAS 142-3 for fiscal years beginning after December 15, 2008. The Company is evaluating the impact that the adoption of FSP No. FAS 142-3 will have on its consolidated financial statements.

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities an amendment of FASB Statement
No. 133. SFAS No. 161 requires disclosures of how and why an entity uses derivative instruments, how derivative instruments and related hedged items are accounted for and how derivative instruments and related hedged items affect
an entitys financial position, financial performance, and cash flows. SFAS No. 161 is effective for all reporting periods (annual or quarterly interim) beginning after November 15, 2008. The Company is currently evaluating and
assessing the impact, if any, of the adoption of SFAS No. 161 on its consolidated financial statements.

In February 2008, the FASB
issued FSP FAS 157-2, Effective Date of FASB Statement No. 157which defers the effective date of SFAS No. 157 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at
fair value in the financial statements on a recurring basis (at least annually) to fiscal years beginning after November 15, 2008, and interim periods within those fiscal years for items within the scope of this FSP. The Company is currently
evaluating the impact of SFAS No. 157 on non-financial assets and non-financial liabilities, but does not expect the adoption of SFAS No. 157 to have a material impact on the Companys consolidated financial position, results of
operations or cash flows.

In December 2007, the FASB issued SFAS No. 141 (revised), Business Combinations. The standard
changes the accounting for business combinations including the measurement of acquirer shares issued in consideration for a business combination, the recognition of contingent consideration, the accounting for preacquisition gain and loss
contingencies, the recognition of capitalized in-process research and development, the accounting for acquisition-related restructuring cost accruals, the treatment of acquisition related transaction costs and the recognition of changes in the
acquirers income tax valuation allowance. SFAS No. 141(R) is effective for fiscal years beginning after December 15, 2008, with early adoption prohibited. SFAS No. 141(R) will become effective for the Company beginning
January 1, 2009. The Company is currently evaluating the impact of the adoption of SFAS No. 141(R) on its consolidated financial statements.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements  an amendment of ARB No. 51. The standard changes the accounting for
noncontrolling (minority)



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interests in consolidated financial statements including the requirements to classify noncontrolling interests as a component of consolidated
stockholders equity, and the elimination of minority interest accounting in results of operations with earnings attributable to noncontrolling interests reported as part of consolidated earnings. Additionally, SFAS No. 160
revises the accounting for both increases and decreases in a parents controlling ownership interest. SFAS No. 160 is effective for fiscal years beginning after December 15, 2008, with early adoption prohibited. The Company is
currently evaluating and assessing the potential impact, if any, of the adoption of SFAS No. 160 on its consolidated financial statements.

Results
of Operations from Continuing Operations for the Three Months Ended September 30, 2008 as Compared to the Three Months Ended September 30, 2007:

Revenues for the three months ended September 30, 2008 were $55.4 million, an increase of $5.0 million, or 10.0%, as compared to $50.4 million for the three months ended September 30, 2007. Our revenue
increase for the periods presented is directly attributable to a combination of increased business with our recurring customers which contributed an increase of $4.9 million for the three months ended September 30, 2008, and the balance from
new customer wins. There is an increase in billable headcount from 5,487 as of September 30, 2007 to 5,868 as of September 30, 2008. There was an increase in billable headcount directly resulted in increased billable hours and a
corresponding increase in revenue. The top 10 customers accounted for 75% and 70% of the revenue for the three months ended September 30, 2008 and September 30, 2007, respectively.

The gross margin as a percentage of sales (gross margin percentage) was 38.4% for the three months ended September 30, 2008, as compared
to 32.0% for the three months ended September 30, 2007. The increase in gross margin percentage was largely attributable to an increase in realized rates for offshore and onsite work and improved utilization. The average onsite and offshore
rates improved by 6.6% and 2.5%, respectively, in the three months ended September 30, 2008 over the three months ended September 30, 2007. Utilization over the third quarter in 2008 also increased from 76% to 80% as compared to the third
quarter of 2007.

Selling, general and administrative expenses (S,G&A) include all costs that are not directly associated
with revenue-generating activities. S,G&A expenses include employee costs, corporate costs and facilities costs. Employee costs include selling, marketing and 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 primarily include rent and communications costs.

S,G&A costs for the three months ended September 30, 2008 were $11.4 million or 20.5% of revenues, as compared to $9.9 million or 19.7% of revenues for the three months ended September 30, 2007. Our net
employee cost increased approximately $0.4 million for the three months ended September 30, 2008, as compared to three months ended September 30, 2007, due to annual salary revision in April 2008, increase in support headcount from 490 to
539 and other increases in travel and related costs. Our net corporate cost increased approximately $0.7 million for the three months ended September 30, 2008 due to increase in marketing, legal, accounting and administrative charges. Our net
facilities costs increased by $0.4 million for the three months ended September 30, 2008, mainly due to increase in rental and communication related expenses.

Depreciation and amortization costs for the three months ended September 30, 2008 were $2.4 million or 4.4% of revenues, as compared to $2.7 million or 5.4% of revenues for the three months ended
September 30, 2007.

Operating income was 13.4% of revenue for the three months ended September 30, 2008 and 6.8% of revenue for
the three months ended September 30, 2007. This increase was due primarily to the increase in gross margin by 6.4%.

Other Income (Expense)
Components

Other income, net for the three months ended September 30, 2008, totaled $1.0 million, compared to $0.8 million for the
three months ended September 30, 2007.



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During the three months ended September 30, 2008, our net investment income totaled $0.6 million as
compared to $1.1 million for the three months ended September 30, 2007. The decrease was due to a decrease in cash and cash equivalents from $54.0 million in September 30, 2007 to $30.0 million in September 30, 2008 and a
consequential decrease in investable funds. The decrease in cash was mainly due to the purchase of shares from minority shareholders in iGS. For the three months ended September 30, 2008, we recognized a nominal amount of foreign currency gains
in our income statement as compared to a gain of $0.2 million for the three months ended September 30, 2007. These are primarily due to movements of foreign currency rates. As of September 30, 2008 all the outstanding forward contracts met
the qualifying criteria to receive hedge accounting. There was a gain of $0.4 million on termination of land sale contract.

There was no
minority interest expense for the three months ended September 30, 2008. Minority interest expense was $0.7 million for the three months ended September 30, 2007 and related to the minority interest portion of the income of iGS. This has
reduced due to the change in the minority ownership in iGS to 0.9% as of September 30, 2008 from 18.8% as of September 30, 2007.

Income Taxes

Federal income taxes, calculated at the U.S. statutory rate, totaled $2.9 million for the three months ended September 30, 2008.
State income taxes, which totaled $0.04 million for the three months ended September 30, 2008, were calculated using a blended statutory rate, and are net of federal income tax benefit. Our income tax provision was a benefit of $0.04 million at
an effective rate of (0.5)% for the three months ended September 30, 2008.

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 March 31, 2010. The tax holiday resulted in a benefit of $3.0 million for the three months ended September 30, 2008. 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 in 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 $(0.9) million.

Federal income taxes, calculated at the U.S. statutory rate, totaled $1.4 million for the three months ended September 30, 2007. State income taxes
which totaled $0.05 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 $1.2 million at an effective rate of 28.1% for
the three months ended September 30, 2007.

Several items caused variations from our statutory income tax provision. iGS is eligible
to claim a tax holiday on the majority of its operating income through March 31, 2010. The tax holiday resulted in a benefit of $0.6 million for the three months ended September 30, 2007. iGSs non-operating income, such as interest
income, is not included in the tax holiday, and has been considered as part of our income tax provision. Other variations typically arise because certain expenses or benefits recorded to our financial statements are either limited or disallowed when
calculating our 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 $0.5 million.

Results of Operations from Continuing Operations for the Nine Months Ended
September 30, 2008 as Compared to the Nine Months Ended September 30, 2007:

Revenues for the nine months ended
September 30, 2008 were $167.3 million, an increase of $19.2 million or 13.0% as compared to $148.1 million for the nine months ended September 30, 2007. Our revenue increase for



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the periods presented is directly attributable to a combination of new customer wins which contributed an increase of $4.8 million for the nine months ended
September 30, 2008, and the balance of $14.4 million from the increased business with our recurring customers. There is an increase in billable headcount from 5,487 as of September 30, 2007 to 5,868 as of September 30, 2008. This
increase in billable headcount directly resulted in increased billable hours and corresponding increase in revenue. The top 10 customers accounted for 72%, and 66% of the revenue for the nine months ended September 30, 2008 and
September 30, 2007, respectively.

The gross margin as a percentage of sales (gross margin percentage) was 36.7% for the
nine months ended September 30, 2008, as compared to 31.5% for the nine months ended September 30, 2007. The increase in gross margin percentage was largely attributable to an increase in realized rates for offshore and onsite work and
improved utilization. The average onsite and offshore rates improved by 6.9% and 2.9%, respectively, in the nine months ended September 30, 2008 over the nine months ended September 30, 2007. Utilization over the nine months ended
September 30, 2008 also increased from 74.0% to 77.0% as compared to nine months ended September 30, 2007.

Selling, general and
administrative expenses (S,G&A) include all costs that are not directly associated with revenue generating activities. SG&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 primarily rent and communications costs.

S,G&A costs for the nine months ended September 30, 2008 were $33.1 million or 19.8% of revenues, as compared to $31.3 million or
21.1% of revenues for the nine months ended September 30, 2007. Our net employee cost increased approximately $1.2 million for the nine months ended September 30, 2008, as compared to the nine months ended September 30, 2007, due to
annual salary revision in April 2008, increase in support headcount from 490 to 539 and other increases in travel and related costs. Our net facilities costs increased by $1.0 million for the nine months ended September 30, 2008, mainly due to
an increase in maintenance of facilities due to enhanced capitalization in India, which is partially offset by a decrease of $0.4 million in corporate costs.

Depreciation and amortization costs for the nine months ended September 30, 2008 were $8.3 million or 5.0% of revenues, as compared to $7.8 million or 5.3% of revenues for the nine months ended September 30,
2007.

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 cost and was recorded on a separate line item on our Consolidated Statements of Operations.

Operating income was 12.0% of revenue for the nine months ended September 30, 2008 and 3.8% of revenue for the nine months ended September 30,
2007. This increase was due primarily to the increase in gross margin by 5.2% and the decrease in S,G&A costs as a percentage of revenue by 1.3%.

Other Income (Expense) Components

Other income, net for the nine months ended September 30, 2008, totaled $3.2
million, compared to $4.8 million for the nine months ended September 30, 2007.

During the nine months ended September 30, 2008,
our net investment income totaled $1.7 million as compared to $3.1 million for the nine months ended September 30, 2007. The decrease was due to a decrease in cash and cash equivalents from $54.0 million in September 30, 2007 to $30.0
million in September 30, 2008 and a consequential decrease in investable funds. The decrease in cash was mainly to purchase shares from minority shareholders in iGS. For the nine months ended September 30, 2008, we recognized $1.0 million
of foreign currency gain in our income statement. These gains are primarily due to movements of foreign currency rates. For the nine months ended September 30, 2007, we recognized $0.2 million of mark to market loss on our



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ineffective hedges up to September 30, 2007. As of September 30, 2008 all the outstanding forward contracts met the qualifying criteria to receive
hedge accounting. During June 2007 we took an investment write off for $0.6 million. There was a gain of $0.4 million on termination of land sale contract.

Minority interest expense was $0.4 million for the nine months ended September 30, 2008 and relates to the minority interest portion of the income of iGS. Minority interest expense was $2.0 million for the nine
months ended September 30, 2007, also related to the income of iGS. This has reduced due to the change in the minority ownership in iGS to 0.9% as of September 30, 2008 from 18.8% as of September 30, 2007.

Income Taxes

Federal income taxes, calculated at the
U.S. statutory rate, totaled $8.0 million for the nine months ended September 30, 2008. State income taxes which totaled $0.1 million for the nine months ended September 30, 2008, 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 2.4% for the nine months ended September 30, 2008.

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 March 31, 2010. The tax holiday resulted in a benefit of
$8.3 million for the nine months ended September 30, 2008. iGSs non-operating income, such as interest income, is not included in the tax holiday, and has been considered as part of our income tax provision.

Other variations typically arise because certain expenses or benefits recorded to our financial statements are either limited or disallowed when
calculating our 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 $(0.07) million.

Federal income taxes, calculated at the U.S. statutory rate, totaled $2.9
million for the nine months ended September 30, 2007. State income taxes which totaled $0.07 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 $1.7 million at an effective rate of 20.8% for the nine months ended September 30, 2007.

Several items
caused variations from our statutory income tax provision. iGS is eligible to claim a tax holiday on the majority of its operating income through March 31, 2009. The tax holiday resulted in a benefit of $3.0 million for the nine months ended
September 30, 2007. iGSs non-operating income, such as interest income, is not included in the tax holiday, and has been considered as part of our income tax provision.

Other variations typically arise because certain expenses or benefits recorded to our financial statements are either limited or disallowed when
calculating our 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 $2.1 million.

Liquidity and Capital Resources

Cash from Operations

Cash provided by continuing
operations was $33.4 million for the nine months ended September 30, 2008. Factors contributing to our cash provided by operations were income from continuing operations of $22.3 million for the period offset by an increase in accounts
receivable of $14.7 million. The increase in accounts receivable is due to an increase in sales and its offset the decrease in days of sales outstanding from 71 days as on December 31, 2007 to 70 days as on September 30, 2008. The decrease
in other significant working capital includes an increase of $15.8 million in accrued and other liabilities on account of movement in deferred tax, and



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mark to market losses on effective hedging and decrease in prepaid assets of $3.9 million. This inflow was mainly offset by a decrease in restructuring
reserve of $0.6 million and realized gain on investment of $1.8 million. During the period, significant non cash items totaled $10.3 million and included depreciation and amortization costs of $8.3 million and stock based compensation expense of
$3.4 million, unrealized loss on derivative instruments $0.7 million, minority interest of $0.4 million, bad debts of $0.3 million, and is offset by deferred income taxes of $ 2.8 million.

Cash provided by continuing operations was $19.0 million for the nine months ended September 30, 2007. Factors contributing to our cash provided by
operations were income from continuing operations of $6.6 million offset by an increase in accounts receivable of $3.5 million. Significant non-cash items during the nine months ended September 30, 2007 totaled $13.3 million and included
depreciation and amortization, stock based compensation expense, bad debt expense, minority interest, equity income of affiliated companies, deferred taxes, gains on derivative instruments and gains on investments.

The Company believes that the combination of present cash balances, availability under its line of credit with Citibank, and future operating cash flows
will be adequate to meet the Companys currently anticipated cash requirements over the next 12 months.

Investing Activities

Cash used in investing activities for the nine months ended September 30, 2008 was $45.7 million, as compared to cash used in
investing activities of $17.5 million for the nine months ended September 30, 2007.

During the nine months ended September 30,
2008 iGATE repurchased 1.9 million shares of iGS as part of iGS delisting from Indian stock exchanges and also settled for cash vested iGS stock options of iGS employees. The total outflow for the nine months ended September 30, 2008
on account of iGS stocks and option settlement was $28.1 million.

Our capital expenditures were $10.9 million and $6.7 million for the
nine months ended September 30, 2008 and 2007, respectively. Significant portions of capital expenditures in both periods presented were due to expansion of our facilities in Bangalore, India.

We have increased our short-term investment portfolios and other investments by $10.4 million and $10.8 million for the nine month periods ended
September 30, 2008 and 2007, respectively.

Financing Activities

Cash used by financing activities for the nine months ended September 30, 2008 was $3.0 million, as compared to cash provided of $2.4 million for the
nine months ended September 30, 2007. Sources of cash related to stock option exercises including excess tax benefits were $2.0 million.

Payments on secured financing for automobiles in India were $0.2 million and $0.2 million for the nine months ending September 30, 2008 and 2007, respectively.

On May 21, 2008, iGS entered into a loan agreement with Citibank N.A. that provided for a $6.5 million working capital line of credit. The loan is
secured by hypothecation of iGS present and future receivables, investments, rights to or on moveable properties and moveable current assets. As at September 30, 2008, iGS did not have any amounts outstanding under the line of credit.

Off-Balance Sheet Arrangements

We do
not have any off-balance sheet arrangements.



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

Market Risk Factors

Market risk factors associated with our business are discussed in Item 7A in our Annual Report on
Form 10-K for the year ended December 31, 2007. There have been no material changes from the market risk factors previously disclosed in the Companys Form 10-K.

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, 2008, 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% decreaseIn Rupee / USD rate |        |      | Fair Valueas ofSeptember 30,2008 |        |      | Valuation given X% increasein Rupee / USD rate |  
|                       |  | (10%)                                          |        | (5%) |                                  |        | (2%) |                                                |   | (1%)   |   |  |   | 1%     |   |  | 2% |        |   | 5% |   |        | 10% | 
|Rupee to U.S. Rate     |  |                                                | 42.269 |      |                                  | 44.617 |      |                                                |   | 46.026 |   |  |   | 46.495 |   |  |    | 46.965 |   |    |   | 47.435 |     |  |   | 47.904 |   |  |   | 49.313 |   |  |   | 51.662 |  
|Derivative Instruments |  | $                                              | 3.3    |      | $                                | (4.0   | )    |                                                | $ | (8.4   | ) |  | $ | (9.9   | ) |  | $  | (10.5  | ) |    | $ | (12.8  | )   |  | $ | (14.3  | ) |  | $ | (18.7  | ) |  | $ | (26.0  | )

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 each month. Translation adjustments arising from the use of differing exchange rates from period to period are included as a component of other comprehensive income.

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 Business Process Outsourcing
(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 more than $1 trillion 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 long-term
goal is to be a significant player in the offshore services industry with a healthy core business in IT and IT enabled offshore operations outsourcing solutions and services supplemented with higher-growth specialty practices such as iTOPs and in
areas such as insurance and mortgage services, finance and accounting, enterprise solutions, infrastructure management, data management and software testing.

Our goals for 2008 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.



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

Under the supervision and
with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of
the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective. There were no changes in our internal control over
financial reporting during the third quarter of 2008 that have materially affected, or are reasonably likely to materially affect, our 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, 2007. There have been no material changes from the risk factors previously disclosed in the Companys Form 10-K.



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

On July 17, 2008, the Company held its Annual Meeting of Shareholders. The Companys common shareholders re-elected Mr. Sunil Wadhwani and Mr. Goran Lindahl as Class C Directors to three (3) year terms expiring in
2011.



|               |  |            |  |         
|-------------- |  | ---------- |  | --------
|Nominee        |  | For        |  | Withheld
|Sunil Wadhwani |  | 51,075,694 |  | 754,694 
|Goran Lindahl  |  | 51,116,478 |  | 713,910 

The following Directors terms continued after the 2008 Annual Meeting of Shareholders:

Class B Directors (whose terms continue until 2010): Ashok Trivedi, Edward Yourdon and Phaneesh Murthy.

Class A Directors (whose terms continue until 2009): Michel Berty and J. Gordon Garrett.

53,711,075 common shares were outstanding on May 30, 2008, the record date and the holders of 51,830,388 or 96.32% common shares voted in person or
by proxy, constituting a quorum.



|ITEM 6. | EXHIBITS
|------- | --------



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



|     |  |                                                                                                                                                                                                                                                 
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1  |  | Separation and Distribution Agreement by and between iGATE Corporation and Mastech Holdings, Inc., dated September 30, 2008 (previously filed as Exhibit 2.1 to iGATEs Form 8-K filed
on October 1, 2008, and herein incorporated by reference)
|     | 
|10.1 |  | Tax Sharing Agreement by and between iGATE Corporation and Mastech Holdings, Inc., dated September 30, 2008 (previously filed as Exhibit 10.1 to iGATEs Form 8-K filed on
October 1, 2008, and herein incorporated by reference)               
|     | 
|31.1 |  | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer is filed herewith.                                                                                                                       
|     | 
|31.2 |  | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Financial Officer is filed herewith.                                                                                                                       
|     | 
|32.1 |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer is filed herewith.                                                                        
|     | 
|32.2 |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by the Chief Financial Officer is filed herewith.                                                                       



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##### Table of Contents

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 6th day of November 2008.



|                 |  |  |  |                                                     
|---------------- |  |  |  | ----------------------------------------------------
|                 |  |  |  | iGATE CORPORATION                                   
|                 |  | 
|November 6, 2008 |  |  |  | /S/    PHANEESH MURTHY                              
|                 |  |  |  | Phaneesh Murthy Chief Executive Officer and Director

| |  |  |  |                                     
| |  |  |  | ------------------------------------
| |  |  |  |                                     
| |  | 
| |  |  |  | /S/    SUJIT SIRCAR                 
| |  |  |  | Sujit Sircar Chief Financial Officer



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##### Table of Contents

EXHIBIT INDEX



|2.1 | Separation and Distribution Agreement by and between iGATE Corporation and Mastech Holdings, Inc., dated September 30, 2008 (previously filed as Exhibit 2.1 to iGATEs Form 8-K
filed on October 1, 2008, and herein incorporated by reference)
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|10.1 | Tax Sharing Agreement by and between iGATE Corporation and Mastech Holdings, Inc., dated September 30, 2008 (previously filed as Exhibit 10.1 to iGATEs Form 8-K filed on
October 1, 2008, and herein incorporated by reference)
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|31.1 | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer is filed herewith.
|---- | -------------------------------------------------------------------------------------------------------------------------



|31.2 | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Financial Officer is filed herewith.
|---- | -------------------------------------------------------------------------------------------------------------------------



|32.1 | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer is filed herewith.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|32.2 | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the Chief Financial Officer is filed herewith.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------



33