<PAGE>

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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                               ----------------

                                   FORM 10-Q

[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934

   For the quarterly period ended June 30, 2000 or

[_] Transition Report Pursuant to Section 13 or 15(d) of the Securities
    Exchange Act of 1934

                        Commission File Number 000-21755

                               ----------------

                           iGATE CAPITAL CORPORATION
             (Exact name of registrant as specified in its charter)

              PENNSYLVANIA                          25-1802235
      (State or other jurisdiction               (I.R.S. Employer
   of incorporation or organization)           Identification No.)

            1004 McKee Road
         Oakdale, Pennsylvania                         15071
(Address of principal executive offices)             (Zip Code)

       Registrant's telephone number, including area code: (412) 787-2100

   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  [_]

   The number of shares of the registrant's Common Stock, par value $0.01 per
share, outstanding as of July 27, 2000 was 50,353,708.

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<PAGE>

                           iGATE CAPITAL CORPORATION

                         QUARTERLY REPORT ON FORM 10-Q
                      FOR THE QUARTER ENDED JUNE 30, 2000

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
 <C>      <S>                                                               <C>
 Part I.  Financial Information..........................................     2

  Item 1. Condensed Consolidated Financial Statements:

      (a) Unaudited Condensed Consolidated Statements of Income for Each
          of the Three and Six Month Periods Ended June 30, 2000 and June
          30, 1999.......................................................     2

      (b) Condensed Consolidated Balance Sheets as of June 30, 2000
          (Unaudited) and December 31, 1999..............................     3

      (c) Unaudited Consolidated Statement of Shareholders' Equity as of
          June 30, 2000..................................................     4

      (d) Condensed Unaudited Consolidated Statements of Cash Flows for
          the Six Month Periods Ended June 30, 2000 and June 30, 1999....     5

      (e) Notes to Unaudited Condensed Consolidated Financial
          Statements.....................................................     6

      (f) Report of Independent Public Accountants.......................    24

  Item 2. Management's Discussion and Analysis of Financial Condition and
          Results of Operations..........................................     9

  Item 3. Quantitative and Qualitative Disclosure About Market Risk......    21

 Part II. Other Information..............................................    21

  Item 1. Legal Proceedings..............................................    21

  Item 2. Changes in Securities and Use of Proceeds......................    22

  Item 3. Defaults Upon Senior Securities................................    22

  Item 4. Submission of Matters to a Vote of Security Holders............    22

  Item 5. Other Information..............................................    22

  Item 6. Exhibits and Reports on Form 8-K...............................    22

          Signatures.....................................................    23
</TABLE>

<PAGE>

PART 1.  FINANCIAL INFORMATION

ITEM 1.  CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(a)                        iGate Capital Corporation

                  Condensed Consolidated Statements of Income
                 (dollars in thousands, except per share data)
                                  (unaudited)

<TABLE>
<CAPTION>
                                          Three months
                                             ended         Six months ended
                                            June 30,           June 30,
                                        -----------------  ------------------
                                          2000     1999      2000      1999
                                        --------  -------  --------  --------
<S>                                     <C>       <C>      <C>       <C>
Revenues............................... $ 93,323  $64,021  $178,874  $123,005
Cost of revenues.......................   58,569   37,774   114,589    70,504
                                        --------  -------  --------  --------
  Gross profit.........................   34,754   26,247    64,285    52,501
Selling, general and administrative....   39,353   18,388    71,111    37,054
                                        --------  -------  --------  --------
  (Loss)/income from operations........   (4,599)   7,859    (6,826)   15,447
Equity in losses of affiliated
 companies.............................    3,803      --      5,875       --
Other (income) expense, net............    1,882     (918)    1,911    (1,669)
(Gain) from Mascot IPO.................  (26,853)     --    (26,853)      --
Merger-related expenses................      --       --        --      1,727
                                        --------  -------  --------  --------
  Income before income taxes...........   16,569    8,777    12,241    15,389
Provision for income taxes.............    6,628    3,072     4,897     5,510
                                        --------  -------  --------  --------
  Income from continuing operations....    9,941    5,705     7,344     9,879
Income (loss) from discontinued
 operations, net of income taxes
 (benefits)............................      216    6,798    (1,205)   12,728
                                        --------  -------  --------  --------
  Net income........................... $ 10,157  $12,503  $  6,139  $ 22,607
                                        ========  =======  ========  ========
Net income (loss) per common share,
 basic:
  Earnings from continuing operations.. $   0.19  $  0.11  $   0.14  $   0.19
  Earnings (loss) from discontinued
   operations..........................     0.01     0.14     (0.02)     0.25
                                        --------  -------  --------  --------
    Net earnings--Basic................ $   0.20  $  0.25  $   0.12  $   0.44
                                        ========  =======  ========  ========
Net income (loss) per common share,
 diluted:
  Earnings from continuing operations.. $   0.19  $  0.11  $   0.14  $   0.19
  Earnings (loss) from discontinued
   operations..........................     0.01     0.14     (0.02)     0.25
                                        --------  -------  --------  --------
    Net earnings--Diluted.............. $   0.20  $  0.25  $   0.12  $   0.44
                                        ========  =======  ========  ========
</TABLE>


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

                                       2
<PAGE>

(b)                        iGate Capital Corporation

                     Condensed Consolidated Balance Sheets
                             (dollars in thousands)

<TABLE>
<CAPTION>
                                                        June 30,   December 31,
                                                          2000         1999
                                                       (unaudited)  (audited)
                                                       ----------- ------------
<S>                                                    <C>         <C>
                        ASSETS
Current Assets:
  Cash and cash equivalents...........................  $ 25,769     $ 23,575
  Investments in marketable securities................    80,213       74,846
  Accounts Receivable, net............................    92,258       67,626
  Prepaid and other assets............................    30,036       11,197
  Deferred income taxes...............................     4,221        1,676
  Net current assets of discontinued operations.......    10,937       21,752
                                                        --------     --------
    Total current assets..............................   243,434      200,672
Equipment and leasehold improvements, net.............    20,449       17,911
Intangible assets, net................................    44,808       35,920
Investments in unconsolidated affiliates..............    50,875          790
Net noncurrent assets of discontinued operations......     7,755        8,619
                                                        --------     --------
    Total assets......................................  $367,321     $263,912
                                                        ========     ========
         LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
  Revolving credit facility...........................  $ 57,503     $    --
  Accounts payable....................................     9,397        8,177
  Accrued payroll and related costs...................    26,898       25,373
  Other accrued liabilities...........................     8,459        8,243
  Current portion of long-term debt...................    10,000          --
                                                        --------     --------
    Total current liabilities.........................   112,257       41,793
  Long-term debt......................................    20,000       30,000
  Other long-term liabilities.........................     1,249          982
  Minority interest...................................     5,012        6,975
  Deferred income taxes...............................    15,810          --
                                                        --------     --------
    Total liabilities.................................   154,328       79,750
Shareholders' equity:
  Common stock, par value $0.01 per share.............       513          505
  Additional paid-in capital..........................   137,489      115,722
  Retained earnings...................................    89,446       83,307
  Common stock in treasury, at cost...................   (14,095)     (14,095)
  Accumulated other comprehensive income..............      (360)      (1,277)
                                                        --------     --------
    Total shareholders' equity........................   212,993      184,162
                                                        --------     --------
    Total liabilities and shareholders' equity........  $367,321     $263,912
                                                        ========     ========
</TABLE>

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

                                       3
<PAGE>

(c)                        iGate Capital Corporation

           Condensed Consolidated Statements of Shareholders' Equity
                 (dollars in thousands, except per share data)
                                  (unaudited)

<TABLE>
<CAPTION>
                                             Series A
                            Common Stock    Preferred                                  Accumulated    Total
                          ---------------- ------------ Additional                        Other       Share-   Compre-
                                      Par          Par   Paid-in   Retained Treasury     Compre-     holders'  hensive
                            Shares   Value Shares Value  Capital   Earnings  Shares   hensive Income  Equity   Income
                          ---------- ----- ------ ----- ---------- -------- --------  -------------- --------  -------
<S>                       <C>        <C>   <C>    <C>   <C>        <C>      <C>       <C>            <C>       <C>
Balance, December 31,
 1999...................  50,506,141 $505    1    $--    $115,722  $83,307  $(14,095)    $(1,277)    $184,162
Exercise of stock
 options, including tax
 benefit................     566,092    6                  13,507                                      13,513
Issuance of common stock
 as part of
 acquisition............     150,943    2   --              8,260      --        --          --         8,262
Comprehensive income:
Net unrealized gain on
 investments, net of
 tax....................                                                                   1,294        1,294   1,294
Currency translation
 adjustment.............                                                                    (377)        (377)   (377)
Net income..............                                             6,139                              6,139   6,139
                          ---------- ----   ---   ----   --------  -------  --------     -------     --------  ------
Balance June 30, 2000...  51,223,176 $513    1           $137,489  $89,446  $(14,095)    $  (360)    $212,993  $7,056
                          ========== ====   ===   ====   ========  =======  ========     =======     ========  ======
</TABLE>





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

                                       4
<PAGE>

(d)                        iGate Capital Corporation

                Consolidated Condensed Statements of Cash Flows
                 (dollars in thousands, except per share data)
                                  (unaudited)


<TABLE>
<CAPTION>
                                                    Six months ended June 30,
                                                    ---------------------------
<S>                                                 <C>           <C>
                                                        2000          1999
                                                    ------------  -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Operations:
Net Income........................................  $      6,139  $      23,812
  Adjustments to reconcile net income to cash
   provided by operations:
  Depreciation and amortization...................         4,841          3,310
  Allowance for uncollectible accounts............         1,177           (185)
  Deferred income taxes, net......................         6,290         (5,296)
  Equity loss in joint ventures...................         5,875            --
  Minority interest in operating subsidiaries.....        (5,012)           --
  Gain on Mascot public offering..................       (26,854)           --
Working capital items:
  Accounts receivable and unbilled receivables....       (25,809)       (11,428)
  Prepaid and other assets........................       (14,156)         2,948
  Accounts Payable and other accrued liabilities..         3,228         11,069
  Cash flows provided by/(used) from discontinued
   operations.....................................        11,679         (8,996)
                                                    ------------  -------------
    Net cash flows (used) /provided by operating
     activities...................................       (32,602)        15,234

CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to equipment and leasehold improvements,
 net..............................................        (6,239)        (2,642)
  Acquisitions, net of cash acquired..............       (10,029)        (9,055)
  Purchases of investments........................        (4,073)        (1,846)
  Acquisitions of unaffiliated companies..........       (41,605)           --
                                                    ------------  -------------
    Net cash flows used in investing activities...       (61,946)       (13,543)
                                                    ------------  -------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from revolving line of credit..........        57,503            --
  Proceeds from exercise of stock options.........         8,637          2,976
  Proceeds from Mascot initial public offering,
   net of offering costs..........................        30,979            --
                                                    ------------  -------------
    Net cash provided by financing activities.....        97,119          2,976
                                                    ------------  -------------

Effect of currency translation....................          (377)          (279)

Net change in cash and cash equivalents...........         2,194          4,388
Cash and cash equivalents, beginning of period....  $     23,575  $      35,493
                                                    ------------  -------------
Cash and cash equivalents, end of period..........  $     25,769  $      39,881
                                                    ============  =============
</TABLE>

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

                                       5
<PAGE>

(e) NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

1. Basis of Presentation

   The unaudited condensed consolidated financial statements included herein
have been prepared by iGate Capital Corporation (the "Company") in accordance
with generally accepted accounting principles for interim financial information
and Article 10 of Regulation S-X under the Securities Exchange Act of 1934, as
amended. The condensed consolidated financial statements for the three and six
months ended June 30, 2000 should be read in conjunction with the Company's
consolidated financial statements (and notes thereto) included in the Company's
Annual Report filed on Form 10-K for the year ended December 31, 1999, as
amended (the "1999 Form 10-K"). Accordingly, the accompanying condensed
consolidated financial statements do not include all of the information and
notes required by generally accepted accounting principles for complete
financial statements. In the opinion of the Company's management, all
adjustments considered necessary for a fair presentation of the accompanying
condensed consolidated financial statements have been included, and all
adjustments unless otherwise discussed in the notes to the condensed
consolidated financial statements are of a normal and recurring nature. The
information contained herein is not a comprehensive management overview and
analysis of the financial condition and results of operations of the Company,
but rather updates disclosures made in the 1999 Form 10-K. All significant
intercompany accounts and transactions have been eliminated in consolidation.
Operating results for the three and six months ended June 30, 2000 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2000.

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

2. Investments

   The Company accounts for its investments in marketable securities in
accordance with Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities." The Company
has determined that certain of its investments in marketable securities are to
be classified as available-for-sale and recorded at fair value. These
investments are carried at market value, with the unrealized gains or losses,
net of tax, reported as a component of comprehensive income in the statement of
shareholders' equity. Realized gains or losses on securities sold are based
upon the specific identification method.

   If the Company acquires between 20% - 50% of another company's equity, the
investment is accounted for under equity accounting rules prescribed by
Accounting Principles Board Opinion No. 18, "The equity method of accounting
for investments in common stock." If the Company acquires less than a 20%
interest, the investment is either carried at cost or, if publicly traded, as
available for sale securities. The Company's proportionate share of investment
income or loss in affiliates accounted for under the equity method is recorded
as part of other income.

   There were neither dividends declared nor material transactions between
affiliates for either of the three-month periods ended June 30, 2000 and June
30, 1999.

                                       6
<PAGE>

3. Earnings Per Share

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

<TABLE>
<CAPTION>
                         Three Months Ended June 30, Six Months Ended June 30,
                         --------------------------- --------------------------
                             2000          1999          2000          1999
                         ------------- ------------- ------------  ------------
<S>                      <C>           <C>           <C>           <C>
Basic earnings per
 share:
  Income from continuing
   operations........... $       9,941 $       5,705 $      7,344  $      9,879
  Income/(loss) from
   discontinued
   operations...........           216         6,798       (1,205)       12,728
                         ------------- ------------- ------------  ------------
    Net income/(loss)... $      10,157 $      12,503 $      6,139  $     22,607
                         ------------- ------------- ------------  ------------
Divided by:
  Weighted average
   shares outstanding...    50,370,000    50,389,000   50,160,000    50,352,000
                         ------------- ------------- ------------  ------------
Earnings/(loss) per
 share--Basic:
  Income per share from
   continuing
   operations........... $        0.19 $        0.11 $       0.14  $       0.19
  Income/(loss) per
   share from
   discontinued
   operations...........          0.01          0.14        (0.02)         0.25
                         ------------- ------------- ------------  ------------
    Total earnings per
     share--Basic....... $        0.20 $        0.25 $       0.12  $       0.44
                         ============= ============= ============  ============
Diluted earnings per
 share:
  Income from continuing
   operations........... $       9,941 $       5,705 $      7,344  $      9,879
  Income/(loss) from
   discontinued
   operations...........           216         6,798       (1,205)       12,728
                         ------------- ------------- ------------  ------------
    Net income/(loss)... $      10,157 $      12,503 $      6,139  $     22,607
                         ------------- ------------- ------------  ------------
Divided by:
  Weighted average
   shares outstanding...    50,370,000    50,389,000   50,160,000    50,352,000
  Dilutive effect of
   common stock
   equivalents..........       820,000       521,000    1,200,000       628,000
                         ------------- ------------- ------------  ------------
    Diluted average
     common shares......    51,190,000    50,910,000   51,360,000    50,980,000
                         ------------- ------------- ------------  ------------
Earnings/(loss) per
 share--Diluted
  Income from continuing
   operations........... $        0.19 $        0.11 $       0.14  $       0.19
  Income/(loss) from
   discontinued
   operations...........          0.01          0.14        (0.02)         0.25
                         ------------- ------------- ------------  ------------
    Total earnings per
     share diluted...... $        0.20 $        0.25 $       0.12  $       0.44
                         ============= ============= ============  ============
</TABLE>

   Options for 1,360,000 for the three months and six months ended June 30,
2000, related to the Company's debt under a convertible promissory note have
not been included in the diluted calculation of earnings per share as their
effect would be antidilutive.

4. Gain on Issuance of Stock By Subsidiaries and Affiliates

   In June 2000, the Company's wholly owned Indian subsidiary, Mascot Systems
Limited ("Mascot or Ltd."), commenced its initial public offering of common
stock, issuing 3 million shares at a price of approximately $11 per share,
raising $32.3 million in net proceeds for Mascot Ltd. As a result of the
initial public offering, the Company's ownership interest in Mascot Ltd. was
reduced to approximately 88.9%. The Company recorded a pre-tax gain of $26.9
million in accordance with SAB 51, as a result of Mascot Ltd.'s initial public
offering.


                                       7
<PAGE>

5. Segment Information

   In accordance with Statement of Financial Accounting Standards No. 131,
"Disclosures about Segments of an Enterprise and Related Information" ("SFAS
131"), the Company has two reportable operating segments, the Solutions segment
and the Staffing segment, which have been defined by management based primarily
on the scope of services offered by each segment. During April 2000, the
Company's board of directors approved and implemented a plan to sell its
Staffing business; therefore, the Staffing segment is being treated as a
discontinued operation for financial reporting purposes.

   The Solutions division develops, manages and staffs information technology
("IT") and electronic commerce services ("eServices") projects for its
customers. The Solutions division employs highly trained and skilled IT
professionals trained in enterprise resource planning ("ERP") implementation,
network services, eServices consulting, data mining and warehousing, with
additional focuses on web design and integration with vendors and customers.
The majority of Solutions projects are coordinated by project managers who work
directly with end user clients to develop IT and eServices projects to meet
client needs. The Solutions division benefits from affiliations with a number
of software companies, ranging from ERP to supply-chain and customer-
interaction vendors, and from Mascot Ltd.'s offshore software development
centers, which are connected via secure, high speed satellite links to the
Company's headquarters and directly to the client sites.

   The Staffing division provides the services of IT professionals to assist in
the completion of client-managed projects. All professionals within the
Staffing division take direction by the clients for the duration of each
project, and do not undertake to manage projects. The Staffing division focuses
on developing national and global relationships with major system integrators
and assists these integrators in meeting their customers' needs by providing
technical expertise and complementary capabilities.

   The accounting policies of the segments are the same as those described in
the summary of significant accounting policies. The Company evaluates segment
performance based upon profit or loss from operations. The Company does not
allocate income taxes, other income or expense and non-recurring charges to
segments.

6. Discontinued Operations

   In April of 2000 the Company's board of directors approved a plan to divest
the Company of the Staffing business segment. Accordingly, the Staffing
business segment is being reported as a discontinued operation in the
consolidated statement of income.

   The Staffing business segment operates in the United States, Canada,
Australia and Scotland. Primary assets consist of a staff of more than 1,200 IT
professionals, existing client relationships and support infrastructure.

                                       8
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

   The following discussion and analysis should be read in conjunction with
Part II, Item 7 of the 1999 Form 10-K. The following discussion should also be
read in conjunction with the consolidated condensed financial statements and
notes thereto appearing elsewhere in this report. As used herein, "iGate
Capital" or the "Company" shall mean iGate Capital Corporation and each of its
consolidated subsidiaries.

   This Quarterly Report on Form 10-Q ("Form 10-Q") contains statements that
are not historical facts and that constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
These statements can be identified by the use of words such as "believes,"
"expects," "may," "will," "should," "intends," "continue," "anticipates," or by
similar expressions, and can also be found in discussions of our strategy and
our plans. You should not place undue reliance on these forward-looking
statements. These statements involve important risks and uncertainties that
could cause our actual results to differ materially from those expressed or
implied in any forward-looking statements. We assume no obligation to update
these forward-looking statements as circumstances change. While we cannot
predict all of these risks and uncertainties, important risk factors that could
cause actual results to differ materially from our current beliefs and
expectations are discussed below under the heading "Risk Factors" and in other
documents we file with the Securities and Exchange Commission (the "SEC").

OVERVIEW

   iGate Capital Corporation, formerly named Mastech Corporation, was
incorporated in the Commonwealth of Pennsylvania on November 12, 1996 and,
through operating subsidiaries, is a worldwide provider of IT services and
eServices to large and medium-sized organizations.

   We provide our clients with a single source for a broad range of IT
applications solutions and eServices, including: client/server design and
development, conversion/migration services, ERP package implementation
services, electronic business systems and applications maintenance outsourcing.
These services are provided in a variety of computing environments and use
leading technologies, including client/server architecture, object oriented
programming languages and tools, distributed database management systems and
the latest networking and communications technologies.

   From inception and through early March 2000, we conducted the majority of
our business through our wholly-owned subsidiary Mastech Systems Corporation
("Mastech Systems"). In March 2000, we announced an internal reorganization in
which we changed our name to iGate Capital Corporation and we transferred
substantially all of the assets of Mastech Systems to subsidiary operating
companies. We believe that this reorganization will enhance our ability to
identify and penetrate emerging IT and eServices markets quickly and
effectively. The reorganization represents an initial step in our strategy to
significantly expand our portfolio of services through (i) internal creation of
new service offerings, (ii) the development of our existing service offerings
and (iii) acquisition of, and strategic investment in, new eServices
businesses.

   In the fourth quarter of 1999, we began to manage our business and strategic
objectives in new ways. Our new approach, which was the impetus for the
internal reorganization described above, led us to revise our reportable
operating segments. We segmented our business into two distinct segments. Our
segments were "Staffing" and "Solutions." During April 2000, we decided to
divest the "Staffing" segment. For reporting purposes, the Staffing segment of
our business will be treated as a discontinued operation for the periods
presented.

   Our majority owned subsidiary operating companies as of June 30, 2000
included Emplifi, Inc. ("Emplifi"), a web based integrator; Mascot Ltd., a
provider of offshore web-focused services; RedBrigade, Inc. ("RedBrigade"), a
web integrator for the European marketplace; Chen & McGinley, Inc. ("CMI"), a
provider of application solutions; eJiva, Inc. ("eJiva"), a provider of
customer care and Internet trading

                                       9
<PAGE>

solutions; Ex-tra-Net, Inc. ("Ex-tra-Net"), a provider of e-Vendor management
services; and Innovative Resource Group, Inc. ("IRG"), specializing in business
intelligence management. In April 2000 our wholly owned subsidiary ENS, Inc., a
network consulting provider, merged with and into Planning Technologies, Inc.
("PTI"), an entity in which we now hold a 50% ownership interest.

   Emplifi, eJiva, CMT and RedBrigade earn a substantial portion of their
revenues on a time-and-materials basis as services are performed. Mascot Ltd.
earns revenue on a time-andmaterials basis and on a percentage-of-completion
basis, based upon a fixed price. Ex-tra-Net recognizes revenues upon
implementation and client acceptance of an application and through monthly
service fees, in accordance with SOP 97-2 Software Revenue Recognition. IRG
recognizes revenues based upon services provided as dictated in client
contracts. The financial results of these companies are included as part of our
consolidated operations for the three and six months ended June 30, 2000.

   We currently have three joint ventures, each of which are 50% owned:
Synerge, LLC d/b/a/ iProcess ("iProcess"), a provider of web based business
process outsourcing; Symphoni Interactive, LLC ("Symphoni"), a provider of web
based media and marketing services; and PTI, specializing in enterprise
networking solutions in the telecommunications industry. We have also purchased
a 25% equity ownership in Air2Web, Inc. ("Air2Web"), an Application Service
Provider ("ASP") in the wireless industry delivering Internet applications
directly to mobile users and a 19.9% equity interest in VCampus ("VCampus"), a
provider of virtual learning environments. These investments are accounted for
under the equity method of accounting, and our income or loss is reported in
the Other Income section of the consolidated income statement.

   In February 2000, we started our first eServices venture fund, iGate
Ventures I, L.P., the "Venture Fund" and since inception the Venture Fund
purchased investments in eServices companies ranging in ownership from 1% to
19.9%.

   The Venture Fund accounts for its investment in Versata, a publicly-traded
software and eServices company, as an available for sale security in accordance
with Statement of Financial Accounting Standards No. 115, "Accounting for
Certain Investments in Debt and Equity Securities." This investment is carried
at market value, with the unrealized gains or losses, net of tax, reported as a
component of comprehensive income in the statement of shareholders' equity. The
Venture Fund recognizes its proportionate share of income or loss in its
VCampus investment under the equity method of accounting as other income on the
consolidated income statement. The Venture Fund's other investments are
accounted for at cost. On August   , 2000 SpeechWorks International Inc.
("Speechworks") completed an initial public offering, and the Venture Fund's
investment in Speechworks prospectively will be accounted for as an available
for sale security.

Three Months Ended June 30, 2000 Compared to Three Months Ended June 30, 1999

   The following discussion compares the quarters ended June 30, 2000 and June
30, 1999, in each case without our Staffing segment which has been treated as
discontinued during this quarter.

   Revenues. Our revenues increased 45.8% or $29.3 million to $93.3 million in
the second quarter of 2000 from $64 million in the second quarter of 1999. This
increase in revenues was primarily due to increases in our overall customer
base, and the expansion of the types of services we provided to our existing
customers

   Gross Profit. Our cost of revenues consists primarily of salaries and
employee benefits for our billable IT professionals as well as related travel
and relocation costs incurred by these professionals. Our gross profit in the
second quarter of 2000 was $34.8 million or 37.2% as compared to $26.2 million
or 41% in the second quarter of 1999. The major factors contributing to the
decrease in gross profit margins were increased employee benefits costs and the
increased usage of contract labor.

                                       10
<PAGE>

   Selling, General and Administrative Expenses. Selling, general and
administrative ("SG&A") expenses consist of costs associated with our sales
and marketing efforts, executive management, finance and human resource
functions, facilities and telecommunications costs, depreciation and
amortization, as well as other general overhead expenses. Our SG&A expenses in
the second quarter 2000 were 36.7 million or 39% as a percentage of revenue,
as composed to $17 million or 27% as a percentage of revenue in the second
quarter 1999. This increase is a result of our aggressive recruiting and
hiring of new managing directors, other executives and administrative
personnel in order to manage and staff our new subsidiary operating companies
including a substantial increase in sales personnel. In addition, we incurred
certain legal and accounting expenses related to the restructuring of Red
Brigade, our European operating subsidiary.

   Equity in Losses of Affiliated Companies. Equity in losses of affiliates of
$3.8 million consists of losses in our joint ventures Symphoni, iProcess and
PTI, and in our equity investments, Air2Web and VCampus. In the second quarter
of 1999, we did not have any joint ventures or equity investments. The
majority of our joint ventures and equity investments involve entities in the
early stages of development, and we expect to incur losses in these companies
until they are able to move beyond their respective start-up phases. We expect
this income statement line item and income classification to become more
significant and at times volatile, as we continue to invest in, and
participate in joint ventures involving, eServices companies.

   Other Expense/(Income), net. Other expense for the second quarter of 2000
increased due to aggregate interest expense incurred on borrowings in excess
of earnings on our investment portfolio.

   Gain on Issuance of Stock by Subsidiary. We recognized a pretax gain of
$26.9 million in accordance with SAB 51, on the initial public offering of
Mascot Ltd., our Indian subsidiary, for the second quarter of 2000. We had no
similar activity for the second quarter 1999.

   Merger-Related Expenses. We had no merger related expenses in the second
quarter of 2000 or 1999.

   Income Taxes/(Benefit). Our income tax expense was $6.6 million, at an
effective rate of 40% for the second quarter ended June 30, 2000 as compared
to tax expense of $3.1 million at an effective rate of 35% for the quarter
ended June 30, 1999. Our effective rate increased in the second quarter of
2000 primarily due to nondeductible goodwill amortization charges that were
incurred in connection with our acquisitions described elsewhere in this Form
10-Q.

   Income/(Loss) from Discontinued Operations. Income from Staffing, net of
taxes at a 40% effective rate, was $.2 million, as compared to $6.8 million
for the second quarter of 1999. This decrease is directly attributable to the
decrease in overall demand for Staffing services combined with our de-
emphasizing the Staffing segment as a result of our reorganization.

   Net Income/(Loss) From Continuing Operations. Net income from continuing
operations for the quarter ended June 30, 2000 was $9.9 million as compared to
net income of $5.7 million for the quarter ended June 30, 1999. Net income for
the second quarter of 2000 included a one-time gain, net of tax, of $16.1
million related to the initial public offering of Mascot Ltd. Without this
one-time gain, a net loss of $6.2 million would have been incurred for the
second quarter of 2000. The loss was a direct result of our change in business
strategy, which included $3.8 in losses from unconsolidated affiliates and
additional overhead costs related to our holding company structure.

Six Months Ended June 30, 2000 Compared to Six Months Ended June 30, 1999

   The following discussion compares the six months ended June 30, 2000 and
June 30, 1999, in each case without our Staffing segment which has been
treated as discontinued during this period.

   Revenues. Our revenues increased 45.5% or $55.9 million to $178.9 million
for the six month ended June 30, 2000 as compared to $123 million for the six
months ended June 30, 1999. This increase in revenues was primarily due to
increases in our overall customer base, and the expansion of the types of
services we provided to our existing customers.


                                      11
<PAGE>

   Gross Profit. Our cost of revenues consists primarily of salaries and
employee benefits for our billable IT professionals as well as related travel
and relocation costs incurred by these professionals. Our gross profit for the
six months ended June 30, 2000 was $64.3 million or 36%, as compared to $52.5
million or 42.6% for the six months ended June 30, 1999. The major factors
contributing to the decrease in gross profit margins were increased employee
benefits costs and the increased usage of contract labor.

   Selling, General and Administrative Expenses. Selling, general and
administrative ("SG&A") expenses consist of costs associated with our sales and
marketing efforts, executive management, finance and human resource functions,
facilities and telecommunications costs, depreciation and amortization, as well
as other general overhead expenses. Our SG&A expenses six months ended June 30,
2000 were $71.1 million or 40.0% as a percentage of revenue as compared to
$37.1 million or 30.1% as a percentage of revenue in the second quarter 1999.
This increase is a result of our aggressive recruiting and hiring of new
managing directors, other executives and administrative personnel in order to
manage and staff our new subsidiary operating companies, including a
substantial increase in sales personnel. In addition, we incurred certain legal
and accounting expenses related to the restructuring of Red Brigade, our
European subsidiary.

   Equity in Losses of Affiliated Companies. Equity in losses of affiliates of
$5.9 million consists of losses in our joint ventures Symphoni, iProcess and
PTI, and in our other equity investments, Air2Web and VCampus. For the six
months ended June 30, 2000, we did not have any joint ventures or equity
investments. The majority of our joint ventures and equity investments involve
entities in the early stages of development, and we except to incur losses in
these companies until they are able to move beyond their respective start-up
phases. We expect this income statement line item and income classification to
become more significant and at times volatile, as we continue to invest in, and
participate in joint ventures involving, eService companies.

   Other Expense/(Income), net. Other expense for the six months ended June 30,
2000 increased due to aggregate interest expense incurred on borrowings in
excess of earnings on our investment portfolio.

   Gain on Issuance of Stock by Subsidiary. We recognized a pretax gain of
$26.9 million in accordance with SAB 51, on the Mascot Ltd. initial public
offering during the six months ended June 2000. We had no similar activity for
the same six month period in June 1999.

   Merger-Related Expenses. We incurred no merger related expenses during the
six months ended June 30, 2000. We incurred merger related expenses of $1.7
million through June 30, 1999 related to our acquisition of The Amber Group.

   Income Taxes/(Benefit). Our income tax benefit was $4.9 million, at an
effective rate of 40% for the six months ended June 30, 2000 as compared to tax
expense of $5.5 million at an effective rate of 35.8% for the six months ended
June 30, 1999. Our effective rate increased in 2000 primarily due to
nondeductible goodwill amortization charges.

   (Loss)/Income from Discontinued Operations. Net loss from Staffing, net of
taxes at a 40% effective rate, was $1.2 million for the six months ended June
30, 2000 as compared to a net increase of $12.7 million for the fist six months
of 1999. This decrease is directly attributable to the decrease in overall
demand for Staffing services combined with our de-emphasizing the Staffing
segment as a result of our reorganization.

   Net Income/(Loss) from Continuing Operations. Net income from continuing
operations for the six months ended June 30, 2000 was $7.3 million as compared
to net income of $9.9 million for the six months ended June 30, 1999. Net
income for the six months ended June 30, 2000 included a one-time gain, net of
tax, of $16.1 million related to the initial public officer of Mascot Ltd.
Without this one-time gain, a net loss of $8.8 million would have been incurred
for the first six months of 2000. The loss was a direct result of our change in
business strategy, and included $5.9 million in losses from unconsolidated
affiliates and additional overhead costs related to our holding company
structure.

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<PAGE>

Liquidity and Capital Resources

   Our working capital position decreased $27.7 million from December 31, 1999
to June 30, 2000. During the six months ended June 30, 2000, we used a
combination or cash balances and proceeds from our revolving credit facility
for general operating purposes, acquisitions, investments and fundings of our
joint ventures and certain start-up operating subsidiaries. Our accounts
receivable increased $24.6 million from period to period, and our days sales
outstanding increased from 61 at December 31, 1999 to 88 at June 30, 2000, most
of which can be attributed to the increased volume of business and customer
confusion related to company name changes, which caused some delays in
payments. We will realize future income tax benefits from employee stock
options exercises and have recorded the effect of these benefits to our prepaid
asset account.

   At June 30, 2000, we had cash and short-term investments of $25.8 million
and $80.2 million, respectively, as compared to cash and short-term investments
of $23.6 million and $74.8 million, respectively, at December 31, 1999. Short-
term investments at December 31, 1999 consisted mainly of tax-exempt bonds, as
compared to our current portfolio which has a higher concentration of short-
term commercial paper and other short-term investments which provides us with a
more liquid investment portfolio. Liquidity and the ability to access cash
quickly is a key to implementation of our new business strategy.

   During the six months ended June 30, 2000, we used a total $51 million for
acquisitions of operating subsidiaries IRG and Ex-tra-net, investments in
eServices companies through our venture fund, and capital contributions to our
three existing joint ventures Symphoni, iProcess and PTI Technologies Inc.

   The Venture Fund made investments in VCampus, Versata, Brainbench , Xpede,
Bluewater and Speechworks. We also purchased a 25% interest in Air2web, an ASP
with a presence in the wireless industry, with a combination of cash and stock.

   Capital expenditures for the six-month periods ended June 31, 2000 and June
30, 1999 were $   million and $2.3 million, respectively. The capital
expenditures for each of the quarters consisted primarily of computers and
related equipment necessary to sustain internal growth. We also had net
maturities of investments of $    million and $    million, at June 31,2000 and
June 30, 1999, respectively.

   Mascot Ltd., our Indian subsidiary, successfully completed an initial public
offering, which generated $31.3 million of proceeds, net of offering costs. As
part of Indian governmental regulations, all proceeds from the offering must
remain in India, thus we do not have direct access to the funds. However, we
believe that it is in our best business interests that the funds stay in India,
which will provide Mascot the ability to grow the business internally and
through acquisitions, and will alleviate the necessity for any of the iGate
companies to have to provide any future funding to Mascot for business
purposes.

   During the first six months of the year, we received $8.6 million of cash
proceeds upon exercise of employee stock options.

   For the six months period ended June 30, 2000, we drew $57.5 million on our
$75 million revolving credit facility with PNC Bank, N.A. ("PNC Bank"). We have
decided to refinance our current credit facility with PNC Bank and on August
10, 2000, we entered into a new credit facility with PNC Bank (the "New PNC
Credit Facility"). The related covenants have been customized for our new
business plan and approach to doing business. We believe this new credit
facility allows us a greater degree of flexibility to execute our strategy than
we had under the existing agreement. The New PNC Credit Facility provides for a
maximum loan amount of $50 million and is secured by our accounts receivable.
This facility matures on October 1, 2001.

   On July 22, 1999, we completed a private placement of a $30,000,000
Convertible Promissory Note (the "GE Note") to GE Capital Equity Investments,
Inc. ("GE Capital"). The entire principal amount of the GE Note will mature on
July 22, 2004, and the first interest payment was paid on January 31, 2000. The
GE Note is convertible at any time after July 22, 2002 through its maturity, at
the option of the holder, into shares of

                                       13
<PAGE>

iGate Common Stock; provided, however, that the portion of the GE Note that may
be converted into iGate Common Stock may be limited if the revenues we generate
by performing services for GE Capital and certain of its affiliates fall below
certain targets. We made one semi-annual interest payment on July 31, 2000. On
August 10, 2000 the Company amended the GE Note to provide GE Capital with a
revised conversion price and to provide for revised revenue targets. The
Company also paid down $10 million on the GE Note at this time.

   Going forward, we may be obligated to pay cash earnouts related to certain
prior acquisitions. These earnout arrangements were agreed upon at the time we
acquired our interests in these entities and will be paid if these companies
meet certain performance benchmarks. If all performance benchmarks are met, we
will pay cash earnouts of approximately $11 million over the twelve-month
period ending March 31, 2001.

   Our functional currency for financial reporting purposes is the US Dollar.
We generally invoice our clients and pay expenses in the local currency of the
country in which the client is located. Income statement translation gains and
losses arising from differences between the functional and local currencies are
recognized in the consolidated income statements and have not had a significant
impact on the results of operations. Balance sheet gains and losses as a result
of fluctuations in foreign currency exchange rates are recognized in
shareholders' equity as a component of comprehensive income. We continually
evaluate the economic conditions of each country in which we operate and base
our foreign currency accounting policies on those assessments.

Recently Issued Accounting Standards

   In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS No. 133"). SFAS No. 133 establishes
accounting and reporting standards requiring that every derivative instrument
(including certain derivative instruments embedded in other contracts) be
recorded in the balance sheet as either an asset or liability measured at its
fair value. The Statement requires that changes in the derivative's fair value
be recognized currently in earnings unless specific hedge accounting criteria
are met. Special accounting for qualifying hedges allows a derivative's gains
and losses to offset related results on the hedged item in the income
statement, and requires that a company must formally document, designate, and
assess the effectiveness of transactions that receive hedge accounting. SFAS
No. 133 was originally effective for fiscal years beginning after June 15,
1999.

   In June 1999, the FASB issued Statement of Financial Accounting Standards
No. 137, "Accounting for Derivative Instruments and Hedging Activities--
Deferral of the Effective Date of FASB Statement No. 133" ("SFAS 137") delaying
the effective date of SFAS 133 for all fiscal quarters of all fiscal years
beginning after June 15, 2000. We have not yet quantified the impacts of
adopting SFAS No. 133 on our financial statements. We do not participate to a
significant extent in derivative contracts or in contracts that have derivative
instruments embedded within them; however, SFAS No. 133 may increase volatility
in earnings and other comprehensive income.

   During the fourth quarter of 1999, the SEC released Accounting Staff
Bulletin No. 101, "Revenue Recognition" ("SAB No. 101"), to provide guidance on
the recognition, presentation and disclosure of revenue in financial
statements. SAB No. 101 explains the SEC's general framework for revenue
recognition. SAB 101 does not change existing literature on revenue, but rather
clarifies

                                       14
<PAGE>

the SEC's position on preexisting literature. We must adopt SAB No. 101 by
December 31, 2000. While we have not completed our review of the effects of SAB
No. 101, we do not presently believe that its adoption will have a significant
impact on financial position and results of operations.

   On March 31, 2000, the FASB issued Interpretation No. 44 ("FIN 44"),
"Accounting for Certain Transactions Involving Stock Compensation", which
provides guidance on several implementation issues related to Accounting
Principles Board Opinion No. 25 ("APB Opinion No. 25") and is effective July 1,
2000. The most significant provisions are clarification of the definition of
employee for purposes of applying APB Opinion No. 25 and the accounting for
options that have been repriced. Under FIN 44, the employer/employee
relationship would be based on case law and Internal Revenue Service
regulations. The FASB granted an exception to this definition for outside
directors. Under FIN 44, repriced options effectively change the terms of the
option, which would make them variable options subject to compensation expense.
Currently, we do not have options that have options that have been repriced
after December 15, 1999, and do not expect FIN 44 to have any material impact
on our financial position and results of operations.

Risk Factors

   Set forth below and elsewhere in this Form 10-Q and in the other documents
we file with the SEC are risks and uncertainties that could cause actual
results to differ materially from the results contemplated by the forward-
looking statements contained in this Form 10-Q.

Our New Business Model is Unproven

   We have significantly reorganized our business, and there is no guarantee
that this reorganization will be successful. We have adopted this new business
model based on the belief that decentralizing our business among specialized
operating subsidiaries and other companies in which we have equity interests
(collectively, the "iGate Companies") will enable us to be more responsive to
the evolving IT and eServices markets. The success of our new business model
depends in part on the ability of the iGate Companies to work collaboratively,
share information and leverage their collective resources to optimize strategic
opportunities. We cannot be certain that this reorganization will improve our
performance, and it is possible that the reorganization will detract from our
performance. In addition, if we cannot convince potential strategic partners
and acquisitions of the value of our business model, our ability to acquire new
companies and businesses may be adversely affected and our strategy for
continued growth may not succeed.

Variability of Quarterly Operating Results

   The revenues and operating results of many of the iGate Companies are
subject to significant variation from quarter to quarter depending on a number
of factors, including the timing and number of client projects commenced and
completed during the quarter, the number of working days in a quarter, employee
hiring, attrition and utilization rates and the mix of time-and-materials
projects versus fixed-price projects during the quarter. Certain of the iGate
Companies recognize revenues on time-and-materials projects as the services are
performed, while revenues on fixed-price projects are recognized using the
percentage of completion method. Although fixed-price projects have not
contributed significantly to revenues and profitability to date, operating
results may be adversely affected in the future by cost overruns on fixed-price
projects. Because a high percentage of the expenses of many of the iGate
Companies are relatively fixed, variations in revenues may cause significant
variations in operating results. Additionally, the iGate Companies periodically
incur cost increases due to both the hiring of new employees and strategic
investments in infrastructure in anticipation of future opportunities for
revenue growth.

                                       15
<PAGE>

Recruitment and Retention of IT and eServices Professionals

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

Government Regulation of Immigration

   We recruit IT and eServices professionals on a global basis and, therefore,
must comply with the immigration laws in the countries in which we operate,
particularly the United States. As of March 31, 2000, approximately 35% of our
worldwide workforce were working under H-1B temporary work permits in the
United States. Statutory law limits the number of new H-1B petitions that may
be approved in a fiscal year. On October 22, 1998, the "American
Competitiveness and Workforce Improvement Act" was signed into law. The H-1B
annual quota for fiscal year 2000 is 115,000, and the quota for fiscal year
2001 will be 107,500. If we are unable to obtain H-1B visas for our employees
in sufficient quantities or at a sufficient rate for a significant period of
time, our business, operating results and financial condition could be
adversely affected.

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

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

  .  unexpected changes in regulatory environments;

  .  foreign currency fluctuations;

  .  tariffs and other trade barriers;

  .  difficulties in managing international operations; and

  .  potential foreign tax consequences, including repatriation of earnings
     and the burden of complying with a wide variety of foreign laws and
     regulations.

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

Exposure to Regulatory and General Economic Conditions in India

   Our subsidiary Mascot Ltd. utilizes an offshore software development center
based in Bangalore with additional offices in Pune and Chennai, India. Mascot
Ltd. also operates recruiting and training centers in India. The Indian
government exerts significant influence over its economy. In the recent past,
the Indian government has provided significant tax incentives and relaxed
certain regulatory restrictions in order to encourage foreign investment in
certain sectors of the economy, including the technology industry. Certain of
these benefits that

                                       16
<PAGE>

directly affect us include, among others, tax holidays (temporary exemptions
from taxation on operating income), liberalized import and export duties and
preferential rules on foreign investment and repatriation. To be eligible for
certain of these tax benefits, we must continue to meet certain conditions. A
failure to meet such conditions in the future could result in the cancellation
of the benefits. There can be no assurance that such tax benefits will be
continued in the future at their current levels. Changes in the business or
regulatory climate of India could have a material adverse effect on our
business, operating results and financial condition.

   Although wage costs in India are significantly lower than in the United
States and elsewhere for comparably skilled IT and eServices professionals,
wages in India are increasing at a faster rate than in the United States. In
the past, India has experienced significant inflation and shortages of foreign
exchange, and has been subject to civil unrest and acts of terrorism. Changes
in inflation, interest rates, taxation or other social, political, economic or
diplomatic developments affecting India in the future could have a material
adverse effect on our business, operating results and financial condition.

Risks Associated with Covenants in Certain Financing Instruments

   Each of the New PNC Credit Facility and the GE Note, as amended, contain
restrictive covenants that require us to meet certain financial criteria on a
rolling quarterly basis. If we are not able to satisfy such covenants, each of
PNC Bank and GE Capital will have the option of making the full amount of our
outstanding debt under these instruments immediately due and payable; and, with
respect to the GE Note, GE Capital will have the option of converting any
amounts we owe to GE Capital into iGate Common Stock.

Intense Competition in the IT Services and eServices Industries

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

Risk that iGate Companies May Compete with Each Other

   iGate Companies may compete with each other for customers, talented
employees and strategic relationships. In addition, iGate Capital Corporation
may compete with the various iGate Companies for acquisition opportunities in
the IT services and eServices industries. Such competition may make it more
difficult or costly for iGate Capital Corporation or other iGate Companies to
enter into strategic relationships, negotiate acquisitions or conduct business.

Risks Related to Inability to Acquire Additional Businesses

   An important component of our strategy for success is our plan to continue
to expand our operations through the acquisition of, or investment in,
additional businesses and companies. We may be unable to identify

                                       17
<PAGE>

businesses that complement our strategy for growth, and even if we succeed in
identifying a company with such a business, we may not be able to proceed to
acquire the company, its relevant business or an interest in the company for
many reasons, including:

  .  a failure to agree on the terms of the acquisition or investment;

  .  incompatibility between iGate Capital and the management of the company
     which we wish to acquire or in which we wish to invest;

  .  competition from other potential acquirers (including publicly-traded
     Internet companies, venture capital companies and large corporations,
     many of which have greater financial resources and brand name
     recognition than we do);

  .  a lack of capital to make the acquisition or investment; and

  .  the unwillingness of the company to partner with us.

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

Risks Related to Completed Acquisitions

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

Risks Associated with Capital Markets

   We currently hold, and plan to increase holdings of, significant interests
in non-wholly owned companies and joint ventures. While we generally do not
anticipate selling such interests, if we were to divest all or part of them, we
might not receive maximum value for these positions. With respect to such
entities with publicly traded stock, we may be unable to sell our interest at
then-quoted market prices. Furthermore, for those entities that do not have
publicly traded stock, the realizable value of our interest may ultimately
prove to be lower than the carrying value currently reflected in our
consolidated financial statements.

Concentration of Revenues; Risk of Termination

   We have in the past derived, and may in the future derive, a significant
portion of our revenues from a relatively limited number of clients. Our five
largest clients represented approximately 22%, 23% and 24% of revenues for the
years ended December 31, 1999, 1998 and 1997, respectively. EDS accounted for
approximately 11% of our revenues for each of the years ended December 31, 1998
and 1997. Most of our projects are terminable by the client without penalty. An
unanticipated termination of a major project could result in the loss of
substantial anticipated revenues and could require us to maintain or terminate
a significant number of unassigned IT professionals, resulting in a higher
number of unassigned IT professionals and/or significant termination expenses.
The loss of any significant client or project could have a material adverse
effect on our business, operating results and financial condition.

                                       18
<PAGE>

Rapid Technological Change; Dependence on New Solutions

   The IT services and eServices industries are characterized by rapid
technological change, evolving industry standards, changing client preferences
and new product introductions. Our success will depend in part on our ability
to develop IT and eServices solutions that keep pace with industry
developments. There can be no assurance that we will be successful in
addressing these developments on a timely basis or that, if these developments
are addressed, we will be successful in the marketplace. In addition, there can
be no assurance that products or technologies developed by others will not
render our services noncompetitive or obsolete. Our failure to address these
developments could have a material adverse effect on our business, operating
results and financial condition.

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

Dependence on Principals

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

Risk of Preferred Vendor Contracts

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

Risks Associated with Intellectual Property Rights

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

                                       19
<PAGE>

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

  .  be expensive and time-consuming to defend;

  .  cause significant and material product shipment and installation delays;

  .  divert management's attention and resources; and/or

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

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

Fixed-Price Projects

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

Potential Liability to Clients

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

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

   On June 30, 1998, we entered into a foreign exchange contract with PNC Bank,
N.A. to hedge our foreign exchange exposure on certain intercompany debt. The
contract initially provided for maturation on September 30, 1998 and has since
been extended on a quarterly basis. On March 31, 2000, the contract was
extended to August 31, 2000.

   The outstanding contract is for the sale by iGate Capital of "7" million
Canadian dollars at an exchange rate of 1.479 (US $4,731,689). When the
contract matures on July 31, 2000, we expect to access the foreign exchange
markets at the then prevailing exchange rate to purchase 7 million Canadian
dollars for delivery to PNC Bank. If the then prevailing exchange rate is lower
than 1.479, we will record a gain for the difference between the spot rate and
the contract rate. Conversely, if the spot rate is higher than 1.479, we will
record a loss equal to the difference between the spot rate and the contract
rate. At June 30, 2000, the USD/CAD exchange rate was 1.4969.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

   Neither iGate Capital Corporation nor any of its subsidiaries is party to
any litigation that is expected to have a material or adverse effect on the
Company or its business.

                                       20
<PAGE>

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

   During June 2000, Mascot Ltd., sold 3,000,000 shares of its common stock,
at $11 per share on the Securities and Exchange Board of India ("SEBI"). The
principal underwriters of the offering were     . The total proceeds of the
offering were $33,000,000, and total issuance costs were $1.7 million. The net
proceeds of the offering are to be used for general corporate purposes and are
to used solely for the benefit of Mascot Ltd.

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

   On June 5, 2000, the Annual Meeting of Shareholders of iGate Capital
Corporation was held. Our common and preferred shareholders approved the
following matters:

  (a) that Messrs. Michel Berty and J. Gordon Garrett be reelected as Class A
      Directors;

  (b) that the Second Amended and Restated Articles of Incorporation be
      ratified and adopted;

  (c) that the Second Amended and Restated Stock Incentive Plan be ratified
      and adopted; and

  (d) that the selection of Arthur Andersen LLP as the Company's independent
      accountants for the fiscal year ending December 31, 2000 by ratified
      and approved.

   The number of votes cast for, against and withheld from the approval of
each matter is set forth below:

<TABLE>
<CAPTION>
   Matter                                           For      Against  Withheld
   ------                                        ---------- --------- --------
   <S>                                           <C>        <C>       <C>
   Election of Michel Berty..................... 45,567,375            62,342
   Election of J. Gordon Garrett................ 45,567,425            62,292
   Ratification of Amended and Restated Stock
    Incentive Plan.............................. 36,315,873 6,072,933  74,897
   Ratification of Second Amended and Restated
    Articles of Incorporation................... 38,550,786 3,875,949  36,968
   Ratification of Arthur Andersen LLP as the
    Company's Independent Accountants........... 45,317,262   307,309   5,146
</TABLE>

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits:

   The following exhibits are being filed with this report:

<TABLE>
<CAPTION>
   Exhibit
   Number  Description
   ------- -----------
   <C>     <S>
     3.1   Second Amended and Restated Articles of Incorporation
     3.2   Amended and Restated Bylaws of iGate Capital Corporation
    10.1   iGate Capital Corporation Amended and Restated Stock Incentive Plan
    27.1   Financial Data Schedule for the six months ended June 30, 2000
</TABLE>

(b) Reports on Form 8-K:

   There were no Form 8-K filings during the quarter ended June 30, 2000.



                                      21
<PAGE>

                                   SIGNATURES

   Pursuant to the requirements 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.

                                             iGATE CAPITAL CORPORATION
                                               (REGISTRANT)

Dated: August 14, 2000                       /s/ Sunil Wadhwani
                                            ---------------------------------
                                            Co-Chairman, Chief Executive Officer
                                             and Director

Dated: August 14, 2000                       /s/ Bruce E. Haney
                                             ---------------------------------
                                             Managing Director, Chief Financial
                                             Officer, Treasurer and Secretary

                                       22
<PAGE>

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors of iGate Capital Corporation:

   We have reviewed the accompanying condensed consolidated balance sheet of
iGate Capital Corporation (a Pennsylvania Corporation) and its subsidiaries as
of June 30, 2000, and the related condensed consolidated statements of income
for each of the three month and six-month periods, and cash flows for each of
the six-month periods ended June 30, 2000 and June 30, 1999. These condensed
consolidated financial statements are the responsibility of the Company's
management.

   We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.

   Based on our review, we are not aware of any material modifications that
should be made to the accompanying condensed consolidated financial statements
referred to above for them to be in conformity with accounting principles
generally accepted in the United States.

   We have previously audited, in accordance with auditing standards generally
accepted in the United States, the consolidated balance sheet of iGate Capital
Corporation and its subsidiaries as of December 31, 1999, (not presented
herein), and, in our report dated January 27, 2000 we expressed an unqualified
opinion on that statement. In our opinion, the information set forth in the
accompanying condensed consolidated balance sheet as of December 31, 1999, is
fairly stated, in all material respects, in relation to the consolidated
balance sheet from which it has been derived.

                                            /s/ Arthur Andersen LLP

Pittsburgh, Pennsylvania,
August 10, 2000

                                       23