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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 June 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. (Check one):



|                           |  |                                               |  |                             
|-------------------------- |  | --------------------------------------------- |  | ----------------------------
|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 on July 31, 2008 was 53,897,724.









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iGATE CORPORATION

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED JUNE 30, 2008

TABLE OF CONTENTS



|                              |  |                                                                                                        |  |     
|----------------------------- |  | ------------------------------------------------------------------------------------------------------ |  | ----
|                              |  |                                                                                                        |  | Page
|PART I. FINANCIAL INFORMATION |  | 3                                                                                                     
|                              |  |                                                                                                       
|Item 1.                       |  | Financial Statements:                                                                                  |  |     
|                              |  |                                                                                                       
|                              |  | Condensed Consolidated Statements of Income for the Three and Six Months Ended June 30, 2008 and
2007 |  | 3   
|                              |  |                                                                                                       
|                              |  | Condensed Consolidated Balance Sheets as of June 30, 2008 and December 31, 2007                       |  | 4   
|                              |  |                                                                                                       
|                              |  | Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2008 and
2007       |  | 5   
|                              |  |                                                                                                       
|                              |  | Notes to Condensed Consolidated Financial Statements                                                  |  | 6   
|                              |  |                                                                                                       
|Item 2.                       |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                  |  | 19  
|                              |  |                                                                                                       
|Item 3.                       |  | Quantitative and Qualitative Disclosures About Market Risk                                             |  | 30  
|                              |  |                                                                                                       
|Item 4.                       |  | Controls and Procedures                                                                                |  | 31  
|                              | 
|PART II. OTHER INFORMATION    |  | 32                                                                                                    
|                              |  |                                                                                                       
|Item 1A.                      |  | Risk Factors                                                                                           |  | 32  
|                              |  |                                                                                                       
|Item 6.                       |  | Exhibits                                                                                               |  | 32  
|                              |  |                                                                                                       
|                              |  | SIGNATURES                                                                                             |  | 33  



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 EndedJune 30, |        |   | Six Months EndedJune 30, |  
|                                                                 |  | 2008                       |        |   | 2007                     |   |        | 2008 |  |   | 2007    |  
|Revenues                                                         |  | $                          | 80,047 |   |                          | $ | 75,612 |      |  | $ | 159,844 |   |  | $ | 150,529 |  
|Cost of revenues (exclusive of items shown separately below)     |  |                            | 55,446 |   |                          |   | 54,501 |      |  |   | 109,943 |   |  |   | 107,975 |  
|                                                                 |  |                            |        |   |                          |   |        |      |  |   |         |   |  |   |         |  
|Gross margin                                                     |  |                            | 24,601 |   |                          |   | 21,111 |      |  |   | 49,901  |   |  |   | 42,554  |  
|Selling, general and administrative                              |  |                            | 13,342 |   |                          |   | 15,200 |      |  |   | 28,819  |   |  |   | 29,457  |  
|Depreciation and amortization                                    |  |                            | 2,783  |   |                          |   | 2,698  |      |  |   | 6,057   |   |  |   | 5,321   |  
|Goodwill impairment                                              |  |                            |       |   |                          |   | 1,950  |      |  |   |        |   |  |   | 1,950   |  
|                                                                 |  |                            |        |   |                          |   |        |      |  |   |         |   |  |   |         |  
|Income from operations                                           |  |                            | 8,476  |   |                          |   | 1,263  |      |  |   | 15,025  |   |  |   | 5,826   |  
|Other income, net                                                |  |                            | 931    |   |                          |   | 2,509  |      |  |   | 2,256   |   |  |   | 4,019   |  
|Minority interest                                                |  |                            | (78    | ) |                          |   | (418   | )    |  |   | (371    | ) |  |   | (1,313  | )
|Impairment of investments                                        |  |                            |       |   |                          |   | (600   | )    |  |   |        |   |  |   | (600    | )
|Equity in (loss) income of affiliated companies                  |  |                            | (16    | ) |                          |   | 78     |      |  |   | (25     | ) |  |   | 127     |  
|                                                                 |  |                            |        |   |                          |   |        |      |  |   |         |   |  |   |         |  
|Income from continuing operations before income taxes            |  |                            | 9,313  |   |                          |   | 2,832  |      |  |   | 16,885  |   |  |   | 8,059   |  
|Income tax expense                                               |  |                            | 768    |   |                          |   | 527    |      |  |   | 942     |   |  |   | 1,145   |  
|                                                                 |  |                            |        |   |                          |   |        |      |  |   |         |   |  |   |         |  
|Income from continuing operations                                |  |                            | 8,545  |   |                          |   | 2,305  |      |  |   | 15,943  |   |  |   | 6,914   |  
|(Loss) from discontinued operations, net of taxes                |  |                            | (137   | ) |                          |   | (233   | )    |  |   | (127    | ) |  |   | (515    | )
|                                                                 |  |                            |        |   |                          |   |        |      |  |   |         |   |  |   |         |  
|Net income                                                       |  | $                          | 8,408  |   |                          | $ | 2,072  |      |  | $ | 15,816  |   |  | $ | 6,399   |  
|                                                                 |  |                            |        |   |                          |   |        |      |  |   |         |   |  |   |         |  
|Net earnings from continuing operations per common sharebasic   |  |                            | 0.16   |   |                          |   | 0.04   |      |  |   | 0.30    |   |  |   | 0.13    |  
|Net (loss) from discontinued operations per common sharebasic   |  |                            | (0.00  | ) |                          |   | (0.00  | )    |  |   | (0.01   | ) |  |   | (0.01   | )
|                                                                 |  |                            |        |   |                          |   |        |      |  |   |         |   |  |   |         |  
|Net earnings per common sharebasic                              |  | $                          | 0.16   |   |                          | $ | 0.04   |      |  | $ | 0.29    |   |  | $ | 0.12    |  
|                                                                 |  |                            |        |   |                          |   |        |      |  |   |         |   |  |   |         |  
|Net earnings from continuing operations per commonsharediluted  |  |                            | 0.15   |   |                          |   | 0.04   |      |  |   | 0.29    |   |  |   | 0.13    |  
|Net (loss) from discontinued operations per common sharediluted |  |                            | (0.00  | ) |                          |   | (0.00  | )    |  |   | (0.00   | ) |  |   | (0.01   | )
|                                                                 |  |                            |        |   |                          |   |        |      |  |   |         |   |  |   |         |  
|Net earnings per common sharediluted                            |  | $                          | 0.15   |   |                          | $ | 0.04   |      |  | $ | 0.29    |   |  | $ | 0.12    |  
|                                                                 |  |                            |        |   |                          |   |        |      |  |   |         |   |  |   |         |  

See accompanying notes.



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iGATE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

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



|                                                                                                                                   |  |                         |         |   |                  |   |         |  
|---------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------- | ------- | - | ---------------- | - | ------- | -
|                                                                                                                                   |  | June 30,2008(Unaudited) |         |   | December 31,2007 |  
|ASSETS                                                                                                                             |  |                         |         |   |                  |   |         |  
|Current assets:                                                                                                                    |  |                         |         |   |                  |   |         |  
|Cash and cash equivalents                                                                                                          |  | $                       | 27,606  |   |                  | $ | 49,632  |  
|Short-term investments                                                                                                             |  |                         | 33,724  |   |                  |   | 25,295  |  
|Accounts receivable, net                                                                                                           |  |                         | 41,226  |   |                  |   | 40,517  |  
|Unbilled receivable                                                                                                                |  |                         | 17,339  |   |                  |   | 11,099  |  
|Prepaid and other current assets                                                                                                   |  |                         | 5,428   |   |                  |   | 10,248  |  
|Prepaid income taxes                                                                                                               |  |                         |        |   |                  |   | 894     |  
|Deferred tax assets                                                                                                                |  |                         | 722     |   |                  |   | 696     |  
|Current assets of discontinued operations                                                                                          |  |                         | 1,945   |   |                  |   | 1,119   |  
|                                                                                                                                   |  |                         |         |   |                  |   |         |  
|Total current assets                                                                                                               |  |                         | 127,990 |   |                  |   | 139,500 |  
|                                                                                                                                   |  |                         |         |   |                  |   |         |  
|Non-current assets of discontinued operations                                                                                      |  |                         | 1,643   |   |                  |   | 1,627   |  
|Deposits                                                                                                                           |  |                         | 2,995   |   |                  |   | 2,148   |  
|Investments in unconsolidated affiliates                                                                                           |  |                         | 60      |   |                  |   | 1,005   |  
|Land, building, equipment and leasehold improvements, net                                                                          |  |                         | 35,216  |   |                  |   | 34,663  |  
|Deferred tax assets                                                                                                                |  |                         | 4,458   |   |                  |   |        |  
|Intangible assets, net                                                                                                             |  |                         | 2,998   |   |                  |   | 1,003   |  
|Goodwill                                                                                                                           |  |                         | 33,912  |   |                  |   | 35,989  |  
|                                                                                                                                   |  |                         |         |   |                  |   |         |  
|Total assets                                                                                                                       |  | $                       | 209,272 |   |                  | $ | 215,935 |  
|                                                                                                                                   |  |                         |         |   |                  |   |         |  
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                               |  |                         |         |   |                  |   |         |  
|Current liabilities:                                                                                                               |  |                         |         |   |                  |   |         |  
|Accounts payable                                                                                                                   |  | $                       | 4,405   |   |                  | $ | 6,090   |  
|Accrued payroll and related costs                                                                                                  |  |                         | 18,062  |   |                  |   | 18,502  |  
|Accrued income taxes                                                                                                               |  |                         | 848     |   |                  |   | 631     |  
|Other current liabilities                                                                                                          |  |                         | 25,919  |   |                  |   | 18,555  |  
|Restructuring reserve                                                                                                              |  |                         | 575     |   |                  |   | 1,058   |  
|Deferred revenue                                                                                                                   |  |                         | 387     |   |                  |   | 536     |  
|Current liabilities of discontinued operations                                                                                     |  |                         | 1,486   |   |                  |   | 510     |  
|                                                                                                                                   |  |                         |         |   |                  |   |         |  
|Total current liabilities                                                                                                          |  |                         | 51,682  |   |                  |   | 45,882  |  
|Other long-term liabilities                                                                                                        |  |                         | 738     |   |                  |   | 536     |  
|Deferred tax liabilities                                                                                                           |  |                         | 961     |   |                  |   | 7,114   |  
|                                                                                                                                   |  |                         |         |   |                  |   |         |  
|Total liabilities                                                                                                                  |  |                         | 53,381  |   |                  |   | 53,532  |  
|                                                                                                                                   |  |                         |         |   |                  |   |         |  
|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 54,813,974 and 54,619,807 shares issued as of June 30, 2008 and December 31, 2007, respectively |  |                         | 548     |   |                  |   | 546     |  
|Common shares held in treasury, at cost, 990,102 shares                                                                            |  |                         | (14,714 | ) |                  |   | (14,714 | )
|Additional paid-in capital                                                                                                         |  |                         | 169,221 |   |                  |   | 165,757 |  
|Retained earnings (deficit)                                                                                                        |  |                         | 9,790   |   |                  |   | (6,026  | )
|Accumulated other comprehensive (loss) income                                                                                      |  |                         | (8,954  | ) |                  |   | 10,403  |  
|                                                                                                                                   |  |                         |         |   |                  |   |         |  
|Total shareholders equity                                                                                                         |  |                         | 155,891 |   |                  |   | 155,966 |  
|                                                                                                                                   |  |                         |         |   |                  |   |         |  
|Total liabilities and shareholders equity                                                                                         |  | $                       | 209,272 |   |                  | $ | 215,935 |  
|                                                                                                                                   |  |                         |         |   |                  |   |         |  

See accompanying notes.



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iGATE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)



|                                                                                  |  |                          |         |   |      |   |         |  
|--------------------------------------------------------------------------------- |  | ------------------------ | ------- | - | ---- | - | ------- | -
|                                                                                  |  | Six Months endedJune 30, |        
|                                                                                  |  | 2008                     |         |   | 2007 |  
|Cash Flows From Operating Activities:                                             |  |                          |         |   |      |   |         |  
|Net income                                                                        |  | $                        | 15,816  |   |      | $ | 6,399   |  
|Adjustments to reconcile net income to cash provided by operations:               |  |                          |         |   |      |   |         |  
|Loss from discontinued operations, net of taxes                                   |  |                          | 127     |   |      |   | 515     |  
|Depreciation and amortization                                                     |  |                          | 6,057   |   |      |   | 5,321   |  
|Stock based compensation                                                          |  |                          | 2,313   |   |      |   | 2,034   |  
|Realized gain on investments                                                      |  |                          | (1,281  | ) |      |   | (236    | )
|Bad debt expense (recovery)                                                       |  |                          | (4      | ) |      |   | (168    | )
|Deferred income taxes                                                             |  |                          | (1,699  | ) |      |   | 76      |  
|Equity in (income) loss of affiliated companies                                   |  |                          | 25      |   |      |   | (127    | )
|Gain on sale of fixed assets                                                      |  |                          | (116    | ) |      |   |        |  
|Minority interest                                                                 |  |                          | 371     |   |      |   | 1,313   |  
|Unrealized loss on derivative instruments                                         |  |                          |        |   |      |   | 39      |  
|Impairment of Loanpro goodwill                                                    |  |                          |        |   |      |   | 1,950   |  
|Impairment on investments                                                         |  |                          |        |   |      |   | 642     |  
|Working capital items:                                                            |  |                          |         |   |      |   |         |  
|Accounts receivable and unbilled receivable                                       |  |                          | (10,980 | ) |      |   | (2,755  | )
|Prepaid and other assets                                                          |  |                          | 4,482   |   |      |   | (1,182  | )
|Accounts payable                                                                  |  |                          | (1,445  | ) |      |   | (636    | )
|Accrued and other liabilities                                                     |  |                          | 10,017  |   |      |   | 2,080   |  
|Deferred revenue                                                                  |  |                          | (114    | ) |      |   | (418    | )
|Restructuring reserve                                                             |  |                          | (483    | ) |      |   | (174    | )
|                                                                                  |  |                          |         |   |      |   |         |  
|Net cash flows provided by operating activitiescontinuing operations             |  |                          | 23,086  |   |      |   | 14,673  |  
|Net cash flows provided by (used in) operating activitiesdiscontinued operations |  |                          | 662     |   |      |   | (659    | )
|                                                                                  |  |                          |         |   |      |   |         |  
|Cash Flows From Investing Activities:                                             |  |                          |         |   |      |   |         |  
|Additions to land, building, equipment and leasehold improvements, net            |  |                          | (6,314  | ) |      |   | (5,238  | )
|Purchases of investments, net                                                     |  |                          | (9,690  | ) |      |   | (10,402 | )
|Increase in deposits                                                              |  |                          | (1,070  | ) |      |   |        |  
|Purchase of iGS stock and stock option settlement                                 |  |                          | (26,796 | ) |      |   |        |  
|Proceeds from sale of joint venture                                               |  |                          | 905     |   |      |   |        |  
|                                                                                  |  |                          |         |   |      |   |         |  
|Net cash flows used in investing activitiescontinuing operations                 |  |                          | (42,965 | ) |      |   | (15,640 | )
|Net cash flows used in investing activitiesdiscontinued operations               |  |                          | (127    | ) |      |   | (165    | )
|                                                                                  |  |                          |         |   |      |   |         |  
|Cash Flows From Financing Activities:                                             |  |                          |         |   |      |   |         |  
|Payments on secured financing                                                     |  |                          | (129    | ) |      |   | (111    | )
|Net proceeds from exercise of stock options                                       |  |                          | 883     |   |      |   | 1,592   |  
|Excess tax benefits                                                               |  |                          | 77      |   |      |   |        |  
|                                                                                  |  |                          |         |   |      |   |         |  
|Net cash flows provided by financing activitiescontinuing operations             |  |                          | 831     |   |      |   | 1,481   |  
|Net cash flows provided by financing activitiesdiscontinued operations           |  |                          |        |   |      |   |        |  
|                                                                                  |  |                          |         |   |      |   |         |  
|Effect of currency translation                                                    |  |                          | (2,841  | ) |      |   | (1,644  | )
|                                                                                  |  |                          |         |   |      |   |         |  
|Net change in cash and cash equivalents                                           |  |                          | (21,354 | ) |      |   | (1,954  | )
|Cash and cash equivalents, beginning of period                                    |  |                          | 49,632  |   |      |   | 52,055  |  
|Cash and cash equivalents, beginning of period of discontinued operations         |  |                          | 51      |   |      |   | 99      |  
|Cash and cash equivalents, end of the period of discontinued operations           |  |                          | 723     |   |      |   | 344     |  
|                                                                                  |  |                          |         |   |      |   |         |  
|Cash and cash equivalents, end of period                                          |  |                          | 27,606  |   |      |   | 49,856  |  
|                                                                                  |  |                          |         |   |      |   |         |  

See accompanying notes



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iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2008
AND 2007

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

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 six months ended June 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.

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) for cash consideration of $ 3.8 million. As on June 30, 2008, the sale of the iCRI business has not been concluded pending certain regulatory approvals. In accordance with the
provisions of Statement of Financial Accounting Standards (SFAS) No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, the proposed sale of iCRI meets the criteria for a qualifying plan of sale
or disposal. The assets and liabilities of iCRI have been classified as held for sale on the accompanying balance sheets and its operations have been recorded as discontinued operations. Cash flows of iCRI have also been segregated in
the consolidated statement of cash flows as separate line items within operating, investing and financing activities.



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iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

JUNE 30, 2008 AND 2007

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



The financial information for the discontinued operations is shown below:



|                                                |  |                            |      |   |                          |   |      |      |  |   |       |   |  |   |      |  
|----------------------------------------------- |  | -------------------------- | ---- | - | ------------------------ | - | ---- | ---- |  | - | ----- | - |  | - | ---- | -
|                                                |  | Three Months EndedJune 30, |      |   | Six Months EndedJune 30, |  
|                                                |  | 2008                       |      |   | 2007                     |   |      | 2008 |  |   | 2007  |  
|Revenues                                        |  | $                          | 954  |   |                          | $ | 601  |      |  | $ | 1,981 |   |  | $ | 965  |  
|(Loss) from discontinued operations before tax  |  |                            | (151 | ) |                          |   | (308 | )    |  |   | (160  | ) |  |   | (655 | )
|Income tax (benefit)                            |  |                            | (14  | ) |                          |   | (75  | )    |  |   | (33   | ) |  |   | (140 | )
|                                                |  |                            |      |   |                          |   |      |      |  |   |       |   |  |   |      |  
|(Loss) from discontinued operations, net of tax |  | $                          | (137 | ) |                          | $ | (233 | )    |  | $ | (127  | ) |  | $ | (515 | )
|                                                |  |                            |      |   |                          |   |      |      |  |   |       |   |  |   |      |  



|                                       |  |              |       |                  |   |      
|-------------------------------------- |  | ------------ | ----- | ---------------- | - | -----
|                                       |  | June 30,2008 |       | December 31,2007
|Assets:                                |  |              |       |                  |   |      
|Fixed assets, net                      |  | $            | 1,070 |                  | $ | 1,043
|Goodwill                               |  |              | 573   |                  |   | 573  
|Other assets                           |  |              | 1,222 |                  |   | 1,079
|Cash                                   |  |              | 723   |                  |   | 51   
|                                       |  |              |       |                  |   |      
|Assets of discontinued operations      |  | $            | 3,588 |                  | $ | 2,746
|                                       |  |              |       |                  |   |      
|Liabilities:                           |  |              |       |                  |   |      
|Accounts payable                       |  | $            |      |                  | $ | 100  
|Other liabilities                      |  |              | 1,486 |                  |   | 410  
|                                       |  |              |       |                  |   |      
|Liabilities of discontinued operations |  | $            | 1,486 |                  | $ | 510  
|                                       |  |              |       |                  |   |      

On February 26, 2008, the Company announced that it plans to divest the Professional Services
(iPS) segment of its business, either through a spin-off to iGATE shareholders or a sale to a third party. The Company has determined that the spin-off of iPS is the likely scenario. In accordance with SFAS No. 144, the results of
operations of the iPS segment will continue to be reported as part of continuing operations until the period in which the spin-off is completed.



7



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##### Table of Contents

iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

JUNE 30, 2008 AND 2007

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



3. Goodwill and Intangible Assets

In continuation of the delisting of the Companys majority owned subsidiary, iGATE Global Solutions (iGS) from the Indian stock
exchanges, the Company increased its ownership in iGS to 98.67% as of June 30, 2008 from 93.45% as of December 31, 2007 at a cost of $18.4 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 June 30, 2008 is $64.6 million, including $4.5 million payable to the remaining shareholders and included in other current liabilities. The total
estimated cost of acquisition has been preliminarily allocated to the assets acquired and liabilities assumed based on a determination of their value. The following table summarizes the allocation.



|                                                        |  |        |        |  
|------------------------------------------------------- |  | ------ | ------ | -
|                                                        |  | Amount |       
|Minority Interest                                       |  | $      | 19,234 |  
|Intangible (customer relationships)                     |  |        | 3,142  |  
|Land                                                    |  |        | 4,074  |  
|Building and other assets                               |  |        | 2,067  |  
|Goodwill                                                |  |        | 27,411 |  
|Reversal of deferred tax liability on iGS dilution gain |  |        | 9,710  |  
|Deferred tax liability                                  |  |        | (1,050 | )
|                                                        |  |        |        |  
|Total purchase consideration                            |  | $      | 64,588 |  
|                                                        |  |        |        |  

Changes in the carrying value of goodwill by reportable segments are as follows:



|                                     |  |                |        |   |                           |   |              |  |   |        |  
|------------------------------------ |  | -------------- | ------ | - | ------------------------- | - | ------------ |  | - | ------ | -
|                                     |  | iGATESolutions |        |   | iGATEProfessionalServices |   | Consolidated | 
|Goodwill as of December 31, 2007     |  | $              | 35,773 |   |                           | $ | 216          |  | $ | 35,989 |  
|Goodwill on acquisition of iGS       |  |                | 6,376  |   |                           |   |             |  |   | 6,376  |  
|Purchase price allocation adjustment |  |                | (5,374 | ) |                           |   |             |  |   | (5,374 | )
|Foreign currency translation effect  |  |                | (3,079 | ) |                           |   |             |  |   | (3,079 | )
|                                     |  |                |        |   |                           |   |              |  |   |        |  
|Goodwill as of June 30, 2008         |  | $              | 33,696 |   |                           | $ | 216          |  | $ | 33,912 |  
|                                     |  |                |        |   |                           |   |              |  |   |        |  

The components of intangible assets are as follows:



|                       |  |                     |        |                         |   |      
|---------------------- |  | ------------------- | ------ | ----------------------- | - | -----
|                       |  | As of June 30, 2008
|                       |  | GrossAmount         |        | AccumulatedAmortization
|Intellectual property  |  | $                   | 300    |                         | $ | 300  
|Customer relationships |  |                     | 8,641  |                         |   | 5,643
|Employment contracts   |  |                     | 1,650  |                         |   | 1,650
|Other costs            |  |                     | 314    |                         |   | 314  
|                       |  |                     |        |                         |   |      
|Intangible assets, net |  | $                   | 10,905 |                         | $ | 7,907
|                       |  |                     |        |                         |   |      



8



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##### Table of Contents

iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

JUNE 30, 2008 AND 2007

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



4. Income Taxes

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



|                                 |  |                            |        |   |                          |   |      |      |  |   |        |   |  |   |       |  
|-------------------------------- |  | -------------------------- | ------ | - | ------------------------ | - | ---- | ---- |  | - | ------ | - |  | - | ----- | -
|                                 |  | Three Months EndedJune 30, |        |   | Six Months EndedJune 30, |  
|                                 |  | 2008                       |        |   | 2007                     |   |      | 2008 |  |   | 2007   |  
|Current provision (benefit):     |  |                            |        |   |                          |   |      |      |  |   |        |   |  |   |       |  
|Federal                          |  | $                          | (41    | ) |                          | $ | (335 | )    |  | $ | (3     | ) |  | $ | 132   |  
|State                            |  |                            | 56     |   |                          |   | 93   |      |  |   | 137    |   |  |   | 241   |  
|Foreign                          |  |                            | 1,232  |   |                          |   | 402  |      |  |   | 2,507  |   |  |   | 542   |  
|                                 |  |                            |        |   |                          |   |      |      |  |   |        |   |  |   |       |  
|Total current provision          |  |                            | 1,247  |   |                          |   | 160  |      |  |   | 2,641  |   |  |   | 915   |  
|                                 |  |                            |        |   |                          |   |      |      |  |   |        |   |  |   |       |  
|Deferred provision (benefit):    |  |                            |        |   |                          |   |      |      |  |   |        |   |  |   |       |  
|Federal                          |  |                            | 704    |   |                          |   | 717  |      |  |   | 741    |   |  |   | 623   |  
|State                            |  |                            | 89     |   |                          |   | 106  |      |  |   | 77     |   |  |   | 92    |  
|Foreign                          |  |                            | (1,237 | ) |                          |   | (316 | )    |  |   | (2,339 | ) |  |   | (350  | )
|Valuation allowance              |  |                            | (35    | ) |                          |   | (140 | )    |  |   | (178   | ) |  |   | (135  | )
|                                 |  |                            |        |   |                          |   |      |      |  |   |        |   |  |   |       |  
|Total deferred provision         |  |                            | (479   | ) |                          |   | 367  |      |  |   | (1,699 | ) |  |   | 230   |  
|                                 |  |                            |        |   |                          |   |      |      |  |   |        |   |  |   |       |  
|Total provision for income taxes |  | $                          | 768    |   |                          | $ | 527  |      |  | $ | 942    |   |  | $ | 1,145 |  
|                                 |  |                            |        |   |                          |   |      |      |  |   |        |   |  |   |       |  

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 EndedJune 30, 2008 |        |   | Three Months EndedJune 30, 2007 |      
|Income taxes computed at the federal statutory rate |  | $                               | 3,259  |   |                                 | 35.0  | % |  | $ | 991    |   |  | 35.0  | %
|State income taxes, net of federal tax benefit      |  |                                 | 94     |   |                                 | 1.0   |   |  |   | 130    |   |  | 4.6   |  
|Foreign taxes at other than U.S. statutory rate     |  |                                 | (2,969 | ) |                                 | (31.9 | ) |  |   | (634   | ) |  | (22.4 | )
|Minority interest                                   |  |                                 | 80     |   |                                 | 0.9   |   |  |   | 146    |   |  | 5.2   |  
|Amortization of acquired intangibles                |  |                                 | 94     |   |                                 | 1.0   |   |  |   |       |   |  |      |  
|Othernet                                           |  |                                 | 246    |   |                                 | 2.7   |   |  |   | 34     |   |  | 1.2   |  
|Valuation allowance                                 |  |                                 | (36    | ) |                                 | (0.4  | ) |  |   | (140   | ) |  | (5.0  | )
|                                                    |  |                                 |        |   |                                 |       |   |  |   |        |   |  |       |  
|                                                    |  | $                               | 768    |   |                                 | 8.3   | % |  | $ | 527    |   |  | 18.6  | %
|                                                    |  |                                 |        |   |                                 |       |   |  |   |        |   |  |       |  
|                                                    |  |                                
|                                                    |  | Six Months EndedJune 30, 2008   |        |   | Six Months EndedJune 30, 2007   |      
|Income taxes computed at the federal statutory rate |  | $                               | 5,910  |   |                                 | 35.0  | % |  | $ | 2,821  |   |  | 35.0  | %
|State income taxes, net of federal tax benefit      |  |                                 | 139    |   |                                 | 0.8   |   |  |   | 217    |   |  | 2.7   |  
|Foreign taxes at other than U.S. statutory rate     |  |                                 | (5,237 | ) |                                 | (31.0 | ) |  |   | (2,268 | ) |  | (28.1 | )
|Minority interest                                   |  |                                 | 130    |   |                                 | 0.8   |   |  |   | 459    |   |  | 5.7   |  
|Amortization of acquired intangibles                |  |                                 | 168    |   |                                 | 1.0   |   |  |   |       |   |  |      |  
|Othernet                                           |  |                                 | 11     |   |                                 | 0.1   |   |  |   | 51     |   |  | 0.6   |  
|Valuation allowance                                 |  |                                 | (179   | ) |                                 | (1.1  | ) |  |   | (135   | ) |  | (1.7  | )
|                                                    |  |                                 |        |   |                                 |       |   |  |   |        |   |  |       |  
|                                                    |  | $                               | 942    |   |                                 | 5.6   | % |  | $ | 1,145  |   |  | 14.2  | %
|                                                    |  |                                 |        |   |                                 |       |   |  |   |        |   |  |       |  



9



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##### Table of Contents

iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

JUNE 30, 2008 AND 2007

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



Under the Indian Income Tax Act, 1961, iGS is eligible to claim a tax holiday for 10 consecutive
assessment years on profits derived from the export of software services from divisions registered under the Software Technology Parks at Bangalore, Chennai, Hyderabad and Noida. The tax holiday for one of the units in Chennai expired with effect
from April 1, 2008. For the three months ended June 30, 2008 and 2007 the tax holiday resulted in benefits of $3.0 million and $0.7 million, respectively, when calculated at the statutory U.S. rate. For the six months ended June 30,
2008 and 2007 the corresponding benefits were $5.3 million and $2.2 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. On certain of the units, the benefits of the holiday expired in 2005. The majority of the remaining benefits will extend through
March 31, 2010.

In accordance with FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an
interpretation of FASB Statement 109 (FIN 48) as of December 31, 2007, the Company carried a liability for $1.0 million towards tax obligations related to various federal and state income tax matters. The total
unrecognized tax benefits as of December 31, 2007 were $1.7 million. If this unrecognized tax benefit is recognized, the effective tax rate of the Company would be significantly lower for the period in which it will be recognized. As of
June 30, 2008, no material changes have occurred in the Companys uncertain tax positions.

5. Earnings Per Share

The Company computes earnings per share in accordance with SFAS No. 128, Earnings Per Share. Basic earnings per share is 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, only in the periods in which the effects are dilutive. For the three and six months ended June 30, 2008 and 2007, the weighted average number of shares used in calculating diluted earnings per share includes
stock options and restricted common shares.

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



|                                                                   |  |                            |        |   |                          |   |        |      |  |   |        |   |  |   |        |  
|------------------------------------------------------------------ |  | -------------------------- | ------ | - | ------------------------ | - | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                                                   |  | Three Months EndedJune 30, |        |   | Six Months EndedJune 30, |  
|                                                                   |  | 2008                       |        |   | 2007                     |   |        | 2008 |  |   | 2007   |  
|Numerator:                                                         |  |                            |        |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Net income from continuing operations                              |  | $                          | 8,545  |   |                          | $ | 2,305  |      |  | $ | 15,943 |   |  | $ | 6,914  |  
|Net (loss) from discontinued operations                            |  |                            | (137   | ) |                          |   | (233   | )    |  |   | (127   | ) |  |   | (515   | )
|                                                                   |  |                            |        |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Net income from operations                                         |  | $                          | 8,408  |   |                          | $ | 2,072  |      |  | $ | 15,816 |   |  | $ | 6,399  |  
|                                                                   |  |                            |        |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Denominator:                                                       |  |                            |        |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Basic weighted average common shares                               |  |                            | 53,774 |   |                          |   | 53,178 |      |  |   | 53,717 |   |  |   | 53,125 |  
|Dilutive effect of stock options and restricted shares outstanding |  |                            | 1,585  |   |                          |   | 576    |      |  |   | 1,537  |   |  |   | 579    |  
|                                                                   |  |                            |        |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Diluted weighted average common shares                             |  |                            | 55,359 |   |                          |   | 53,754 |      |  |   | 55,254 |   |  |   | 53,704 |  
|                                                                   |  |                            |        |   |                          |   |        |      |  |   |        |   |  |   |        |  



10



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##### Table of Contents

iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

JUNE 30, 2008 AND 2007

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



6. Comprehensive (Loss) Income

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



|                                         |  |                            |        |                          |      |   |       |  |   |         |   |  |   |       
|---------------------------------------- |  | -------------------------- | ------ | ------------------------ | ---- | - | ----- |  | - | ------- | - |  | - | ------
|                                         |  | Three Months EndedJune 30, |        | Six Months EndedJune 30,
|                                         |  | 2008                       |        |                          | 2007 |   | 2008  |  |   | 2007   
|Net income                               |  | $                          | 8,408  |                          |      | $ | 2,072 |  | $ | 15,816  |   |  | $ | 6,399 
|Unrealized gain on investments           |  |                            | 103    |                          |      |   |      |  |   | 190     |   |  |   |      
|Change in fair value of cash flow hedges |  |                            | (6,492 | )                        |      |   |      |  |   | (8,547  | ) |  |   |      
|Foreign currency translation             |  |                            | (9,051 | )                        |      |   | 3,781 |  |   | (11,000 | ) |  |   | 5,163 
|                                         |  |                            |        |                          |      |   |       |  |   |         |   |  |   |       
|Comprehensive (loss) income              |  | $                          | (7,032 | )                        |      | $ | 5,853 |  | $ | (3,541  | ) |  | $ | 11,562
|                                         |  |                            |        |                          |      |   |       |  |   |         |   |  |   |       

As of June 30, 2008, the Companys forward and option contracts to hedge foreign
currency cash flows will mature by April 30, 2010. As each contract matures, the Company will receive Rupees at the contracted (strike price) rate while delivering either the U.S. Dollar (USD) or Canadian Dollar
(CAD) or Sterling Pound (GBP) equivalent of Rupees at the prevailing Rupee exchange rate. Contracts that meet qualifying criteria are accounted for as foreign currency cash flow hedges. Accordingly, the effective portion of
gains and losses is deferred as a component of other comprehensive 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.

As of June 30,
2007, the Companys outstanding derivative instruments were not designated as qualifying hedge and accordingly, the unrealized gain on such instruments of $0.3 million was recorded in the results of operations.

7. Fair Value Measurements

Effective January 1,
2008, the Company adopted SFAS 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 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 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



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##### Table of Contents

iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

JUNE 30, 2008 AND 2007

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



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:

FSP FAS
157-2, issued in February 2008, 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. FSP FAS 157-2 is effective for the Company beginning January 1, 2009. 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.



|                                      |  |                                                            |        |                                                |   |                                        |  |   |       |  |  
|------------------------------------- |  | ---------------------------------------------------------- | ------ | ---------------------------------------------- | - | -------------------------------------- |  | - | ----- |  | -
|Description                           |  | June 30,2008                                               |        | Fair value measurement at reporting date using
|                                      |  | Quoted Prices inActive Marketsfor IdenticalAssets(Level 1) |        | SignificantOtherObservableInputs(Level
2)      |   | SignificantUnobservableInputs(Level
3)
|                                      |  |                                                            |       
|Assets                                |  |                                                            |        |                                                |   |                                        |  |   |       |  |  
|Short term investments:               |  |                                                            |        |                                                |   |                                        |  |   |       |  |  
|Money market mutual funds             |  | $                                                          | 29,488 |                                                | $ | 29,488                                 |  |   |      |  | 
|Other Current Assets:                 |  |                                                            |        |                                                |   |                                        |  |   |       |  |  
|Foreign currency derivative contracts |  |                                                            |       |                                                |   |                                       |  |   |      |  | 
|                                      |  |                                                            |        |                                                |   |                                        |  |   |       |  |  
|Total assets                          |  | $                                                          | 29,488 |                                                | $ | 29,488                                 |  |   |      |  | 
|                                      |  |                                                            |        |                                                |   |                                        |  |   |       |  |  
|Liabilities                           |  |                                                            |        |                                                |   |                                        |  |   |       |  |  
|Other current liabilities             |  |                                                            |        |                                                |   |                                        |  |   |       |  |  
|Foreign currency derivative contracts |  | $                                                          | 7,515  |                                                |   |                                       |  | $ | 7,515 |  | 
|                                      |  |                                                            |        |                                                |   |                                        |  |   |       |  |  
|Total liabilities                     |  | $                                                          | 7,515  |                                                |   |                                       |  | $ | 7,515 |  | 
|                                      |  |                                                            |        |                                                |   |                                        |  |   |       |  |  

Effective January 1, 2008, the Company also adopted SFAS 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 June 30, 2008, the Company did not elect such an option for the financial instruments and
liabilities.

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 administered by the prescribed authority in India. The aggregate



12



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##### Table of Contents

iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

JUNE 30, 2008 AND 2007

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



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 June 30, 2008 and 2007 was $0.5 million and $0.5 million, respectively and for the six months ended June 30, 2008 and 2007 it was $1.0 million and $0.9 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 EndedJune 30, |     |   | Six Months EndedJune 30, |  
|                                      |  | 2008                       |     |   | 2007                     |   |     | 2008 |  |   | 2007 |  
|Net periodic plan cost                |  |                            |     |   |                          |   |     |      |  |   |      |   |  |   |     |  
|Service cost                          |  | $                          | 400 |   |                          | $ | 152 |      |  | $ | 455  |   |  | $ | 260 |  
|Interest cost                         |  |                            | 36  |   |                          |   | 26  |      |  |   | 62   |   |  |   | 40  |  
|Expected return on plan asset         |  |                            | (26 | ) |                          |   | (16 | )    |  |   | (42  | ) |  |   | (27 | )
|Recognized net actuarial (gain) loss  |  |                            | (40 | ) |                          |   | (54 | )    |  |   | (80  | ) |  |   | 40  |  
|                                      |  |                            |     |   |                          |   |     |      |  |   |      |   |  |   |     |  
|Net periodic plan cost for the period |  | $                          | 370 |   |                          | $ | 108 |      |  | $ | 395  |   |  | $ | 313 |  
|                                      |  |                            |     |   |                          |   |     |      |  |   |      |   |  |   |     |  

9. Share Based Compensation

During the three and six months ended June 30, 2008, the Company granted zero and 22,656 stock options, respectively and 409,010, and 509,010 restricted stock awards, respectively. During the three and six months
ended June 30, 2007, the Company granted 65,000 stock options.

Share-based compensation expense recorded in continuing operations
during the three and six months ended June 30, 2008 and 2007 are as follows:



|                                                         |  |                            |       |   |                          |   |       |      |  |   |       |   |  |   |       |  
|-------------------------------------------------------- |  | -------------------------- | ----- | - | ------------------------ | - | ----- | ---- |  | - | ----- | - |  | - | ----- | -
|                                                         |  | Three Months EndedJune 30, |       |   | Six Months EndedJune 30, |  
|                                                         |  | 2008                       |       |   | 2007                     |   |       | 2008 |  |   | 2007  |  
|Share-based compensation recorded in                     |  |                            |       |   |                          |   |       |      |  |   |       |   |  |   |       |  
|Cost of revenues                                        |  | $                          | 506   |   |                          | $ | 455   |      |  | $ | 975   |   |  | $ | 793   |  
|Selling, general and administrative expense             |  |                            | 631   |   |                          |   | 630   |      |  |   | 1,338 |   |  |   | 1,241 |  
|                                                         |  |                            |       |   |                          |   |       |      |  |   |       |   |  |   |       |  
|Total share-based compensation expense                   |  |                            | 1,137 |   |                          |   | 1,085 |      |  |   | 2,313 |   |  |   | 2,034 |  
|Estimated income tax benefit                             |  |                            | (54   | ) |                          |   | (113  | )    |  |   | (136  | ) |  |   | (205  | )
|                                                         |  |                            |       |   |                          |   |       |      |  |   |       |   |  |   |       |  
|Share-based compensation expense, net of estimated taxes |  | $                          | 1,083 |   |                          | $ | 972   |      |  | $ | 2,177 |   |  | $ | 1,829 |  
|                                                         |  |                            |       |   |                          |   |       |      |  |   |       |   |  |   |       |  



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##### Table of Contents

iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

JUNE 30, 2008 AND 2007

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



During the three and six months ended June 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 EndedJune 30, |   |  | Six Months EndedJune 30, |  
|                         |  | 2008                       |   |  | 2007                     |   |  | 2008      |   |  | 2007      |  
|Expected life (in years) |  | 4.5 years                  |   |  | 4.5 years                |   |  | 4.5 years |   |  | 4.5 years |  
|Risk free interest rate  |  | 4.34                       | % |  | 4.65                     | % |  | 4.34      | % |  | 4.65      | %
|Volatility               |  | 61.0                       | % |  | 66.5                     | % |  | 61.0      | % |  | 66.5      | %
|Dividend yield           |  | 0                          | % |  | 0                        | % |  | 0         | % |  | 0         | %

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 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.

10. Other Income

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



|                           |  |                            |     |   |                          |   |       |      |  |   |       |   |  |   |       |  
|-------------------------- |  | -------------------------- | --- | - | ------------------------ | - | ----- | ---- |  | - | ----- | - |  | - | ----- | -
|                           |  | Three Months EndedJune 30, |     |   | Six Months EndedJune 30, |  
|                           |  | 2008                       |     |   | 2007                     |   |       | 2008 |  |   | 2007  |  
|Investment income          |  | $                          | 584 |   |                          | $ | 1,086 |      |  | $ | 1,181 |   |  | $ | 2,076 |  
|Interest expense           |  |                            | (22 | ) |                          |   | (25   | )    |  |   | (50   | ) |  |   | (40   | )
|Foreign exchange gain, net |  |                            | 340 |   |                          |   | 1,453 |      |  |   | 984   |   |  |   | 1,951 |  
|Others                     |  |                            | 29  |   |                          |   | (5    | )    |  |   | 141   |   |  |   | 32    |  
|                           |  |                            |     |   |                          |   |       |      |  |   |       |   |  |   |       |  
|Other income               |  | $                          | 931 |   |                          | $ | 2,509 |      |  | $ | 2,256 |   |  | $ | 4,019 |  
|                           |  |                            |     |   |                          |   |       |      |  |   |       |   |  |   |       |  

11. Capital Structure

During the three months ended June 30, 2008 and 2007, the Company issued 0.1 million and 0.1 million shares, respectively upon exercise of stock options. For the six months ended June 30, 2008 and
2007, the Company issued 0.2 million and 0.2 million shares, respectively upon the exercise of stock options.



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iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

JUNE 30, 2008 AND 2007

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



12. Segment Information

The following tables present selected financial information for the Companys reporting segments for the three and six months ended June 30, 2008 and 2007, respectively:



|                                         |  |                                  |        |                           |   |                        |  |   |        |   |  |   |        |  
|---------------------------------------- |  | -------------------------------- | ------ | ------------------------- | - | ---------------------- |  | - | ------ | - |  | - | ------ | -
|                                         |  | Three Months Ended June 30, 2008 |       
|                                         |  | iGATESolutions                   |        | iGATEProfessionalServices |   | iGATESharedServices(1) |  |   | Total  |  
|External revenues                        |  | $                                | 55,621 |                           | $ | 24,426                 |  | $ |       |   |  | $ | 80,047 |  
|                                         |  |                                  |        |                           |   |                        |  |   |        |   |  |   |        |  
|Income (loss) from operations            |  | $                                | 8,096  |                           | $ | 1,675                  |  |   | (1,295 | ) |  |   | 8,476  |  
|                                         |  |                                  |        |                           |   |                        |  |   |        |   |  |   |        |  
|Other income, net                        |  |                                  |        |                           |   |                        |  |   | 931    |   |  |   | 931    |  
|Minority interest                        |  |                                  |        |                           |   |                        |  |   | (78    | ) |  |   | (78    | )
|Equity in (loss) of affiliated companies |  |                                  |        |                           |   |                        |  |   | (16    | ) |  |   | (16    | )
|                                         |  |                                  |        |                           |   |                        |  |   |        |   |  |   |        |  
|Income (loss) before income taxes        |  |                                  |        |                           |   |                        |  | $ | (458   | ) |  | $ | 9,313  |  
|                                         |  |                                  |        |                           |   |                        |  |   |        |   |  |   |        |  



|                                         |  |                                  |         |                           |   |                        |  |   |        |   |  |   |         |  
|---------------------------------------- |  | -------------------------------- | ------- | ------------------------- | - | ---------------------- |  | - | ------ | - |  | - | ------- | -
|                                         |  | Three Months Ended June 30, 2007 |        
|                                         |  | iGATESolutions                   |         | iGATEProfessionalServices |   | iGATESharedServices(1) |  |   | Total  |  
|External revenues                        |  | $                                | 48,573  |                           | $ | 27,039                 |  | $ |       |   |  | $ | 75,612  |  
|Goodwill impairment                      |  |                                  | 1,950   |                           |   |                       |  |   |       |   |  |   | 1,950   |  
|                                         |  |                                  |         |                           |   |                        |  |   |        |   |  |   |         |  
|Income (loss) from operations            |  | $                                | 1,124   |                           | $ | 2,291                  |  |   | (2,152 | ) |  |   | 1,263   |  
|                                         |  |                                  |         |                           |   |                        |  |   |        |   |  |   |         |  
|Other income, net                        |  |                                  |         |                           |   |                        |  |   | 2,509  |   |  |   | 2,509   |  
|Impairment of investments                |  |                                  |         |                           |   |                        |  |   | (600   | ) |  |   | (600    | )
|Minority interest                        |  |                                  |         |                           |   |                        |  |   | (418   | ) |  |   | (418    | )
|Equity in income of affiliated companies |  |                                  |         |                           |   |                        |  |   | 78     |   |  |   | 78      |  
|                                         |  |                                  |         |                           |   |                        |  |   |        |   |  |   |         |  
|Income (loss) before income taxes        |  |                                  |         |                           |   |                        |  | $ | (583   | ) |  | $ | 2,832   |  
|                                         |  |                                  |         |                           |   |                        |  |   |        |   |  |   |         |  
|                                         | 
|                                         |  | Six Months Ended June 30, 2008   |        
|                                         |  | iGATESolutions                   |         | iGATEProfessionalServices |   | iGATESharedServices(1) |  |   | Total  |  
|External revenues                        |  | $                                | 110,496 |                           | $ | 49,348                 |  | $ |       |   |  | $ | 159,844 |  
|                                         |  |                                  |         |                           |   |                        |  |   |        |   |  |   |         |  
|Income (loss) from operations            |  | $                                | 14,792  |                           | $ | 2,997                  |  |   | (2,764 | ) |  |   | 15,025  |  
|                                         |  |                                  |         |                           |   |                        |  |   |        |   |  |   |         |  
|Other income, net                        |  |                                  |         |                           |   |                        |  |   | 2,256  |   |  |   | 2,256   |  
|Minority interest                        |  |                                  |         |                           |   |                        |  |   | (371   | ) |  |   | (371    | )
|Equity in (loss) of affiliated companies |  |                                  |         |                           |   |                        |  |   | (25    | ) |  |   | (25     | )
|                                         |  |                                  |         |                           |   |                        |  |   |        |   |  |   |         |  
|Income (loss) before income taxes        |  |                                  |         |                           |   |                        |  | $ | (904   | ) |  | $ | 16,885  |  
|                                         |  |                                  |         |                           |   |                        |  |   |        |   |  |   |         |  



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iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

JUNE 30, 2008 AND 2007

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



|                                         |  |                                |        |                           |   |                        |  |   |        |   |  |   |         |  
|---------------------------------------- |  | ------------------------------ | ------ | ------------------------- | - | ---------------------- |  | - | ------ | - |  | - | ------- | -
|                                         |  | Six Months Ended June 30, 2007 |       
|                                         |  | iGATESolutions                 |        | iGATEProfessionalServices |   | iGATESharedServices(1) |  |   | Total  |  
|External revenues                        |  | $                              | 96,442 |                           | $ | 54,087                 |  | $ |       |   |  | $ | 150,529 |  
|                                         |  |                                |        |                           |   |                        |  |   |        |   |  |   |         |  
|Goodwill impairment                      |  |                                | 1,950  |                           |   |                       |  |   |       |   |  |   | 1,950   |  
|Income (loss) from operations            |  | $                              | 5,442  |                           | $ | 4,463                  |  |   | (4,079 | ) |  |   | 5,826   |  
|                                         |  |                                |        |                           |   |                        |  |   |        |   |  |   |         |  
|Other income, net                        |  |                                |        |                           |   |                        |  |   | 4,019  |   |  |   | 4,019   |  
|Impairment of investments                |  |                                |        |                           |   |                        |  |   | (600   | ) |  |   | (600    | )
|Minority interest                        |  |                                |        |                           |   |                        |  |   | (1,313 | ) |  |   | (1,313  | )
|Equity in income of affiliated companies |  |                                |        |                           |   |                        |  |   | 127    |   |  |   | 127     |  
|                                         |  |                                |        |                           |   |                        |  |   |        |   |  |   |         |  
|Income (loss) before income taxes        |  |                                |        |                           |   |                        |  | $ | (1,846 | ) |  | $ | 8,059   |  
|                                         |  |                                |        |                           |   |                        |  |   |        |   |  |   |         |  

Assets by segment were as follows:



|                            |  |                        |         |                  |   |        
|--------------------------- |  | ---------------------- | ------- | ---------------- | - | -------
|                            |  | June 30,2008           |         | December 31,2007
|                            |  | (Dollars in thousands)
|iGATE Solutions             |  | $                      | 148,120 |                  | $ | 158,510
|iGATE Professional Services |  |                        | 18,703  |                  |   | 15,328 
|iGATE Shared Services       |  |                        | 38,861  |                  |   | 39,351 
|                            |  |                        |         |                  |   |        
|Total assets                |  | $                      | 205,684 |                  | $ | 213,189
|                            |  |                        |         |                  |   |        



|(1) | The iGATE Shared Services segment included the operations of iCRI. With the proposed sale of the iCRI business (See Note 2), the operating segment of the iCRI business has been
classified as discontinued Operations. Consequently, this segment includes only corporate and unallocated costs.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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



|                                      |  |                            |   |  |                          |   |  |      |   |  |      |  
|------------------------------------- |  | -------------------------- | - |  | ------------------------ | - |  | ---- | - |  | ---- | -
|                                      |  | Three Months EndedJune 30, |   |  | Six Months EndedJune 30, |  
|                                      |  | 2008                       |   |  | 2007                     |   |  | 2008 |   |  | 2007 |  
|General Electric Company              |  |                            |   |  |                          |   |  |      |   |  |      |  
|iGATE Solutions                       |  | 25                         | % |  | 25                       | % |  | 25   | % |  | 26   | %
|iGATE Consolidated                    |  | 18                         | % |  | 16                       | % |  | 17   | % |  | 17   | %
|                                      |  |                            |   | 
|Royal Bank of Canada                  |  |                            |   |  |                          |   |  |      |   |  |      |  
|iGATE Solutions                       |  | 18                         | % |  | 19                       | % |  | 17   | % |  | 16   | %
|iGATE Consolidated                    |  | 13                         | % |  | 12                       | % |  | 12   | % |  | 10   | %
|                                      |  |                            |   | 
|TEKSystems, Inc.                      |  |                            |   |  |                          |   |  |      |   |  |      |  
|iGATE Professional Services           |  | 13                         | % |  | 12                       | % |  | 13   | % |  | 12   | %
|                                      |  |                            |   | 
|International Business Machines Corp. |  |                            |   |  |                          |   |  |      |   |  |      |  
|iGATE Professional Services           |  | 15                         | % |  | 12                       | % |  | 14   | % |  | 13   | %



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##### Table of Contents

iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

JUNE 30, 2008 AND 2007

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



13. New 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s present and
future receivables, investments, rights to or on moveable properties and moveable current assets. As at June 30, 2008, the 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s 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.

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 statement of
income.

16. Recently Issued Accounting Pronouncements

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 believe that adoption of this accounting standard would 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 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



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iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

JUNE 30, 2008 AND 2007

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



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 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
fiscal years beginning after November 15, 2008, with early adoption permitted. The Company is currently evaluating and assessing the impact, if any, of the adoption of SFAS No. 161 on its consolidated financial statements.

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. 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 $0.5 million during the six months ended June 30, 2008 and the balance of $0.3 million is outstanding as of June 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
six months ended June 30, 2008 and the balance of $0.2 million is outstanding as of June 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 refer 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 IT and IT enabled operations offshore outsourcing solutions and services to large and medium-sized organizations using an offshore/onsite model. It also offers services which include 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.



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##### Table of Contents

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 offering 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 which 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 to our clients high quality solutions 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, Singapore, Malaysia, Japan and Australia.

A majority of our clients have headquarters in the
U.S. and operate internationally. iGATE has 7,084 employees as of June 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 18% and 17% of revenues for the three and six months ended June 30, 2008. For the three and six months ended June 30, 2007, the corresponding figures are 16% and 17% 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 13% and 12% of revenues for the three and six months ended June 30, 2008, respectively. For
the three and six months ended June 30, 2007, the corresponding figures are 12% and 10%, respectively.



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Reportable Financial Segments

The Companys reportable segments include iGATE Solutions, iGATE Professional Services (iPS) and iGATE Shared Services. The iGATE Solutions segments service offerings include IT and
IT enabled operations offshore outsourcing solutions and 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.

The iPS segments offerings include a variety of client-managed and supervised IT staffing service offerings which include enterprise resource package implementation, integration, application support services,
client directed software design and customization, brokerage operation and recruitment process outsourcing services. This segment offers services principally in the U.S.

The iGATE Shared Services segment included the operations of iGATE Clinical Research International Inc. and iGATE Clinical Research International Private Limited (collectively iCRI), which provides
offshore clinical trials for its customers and general corporate expenses, interest income and expense, equity in income or losses of unconsolidated affiliates, minority interest, income or loss from joint ventures and restructuring charges not
identified to a specific segment, and other unallocated charges. With the proposed sale of iCRI business (Refer to Note 2 to the condensed consolidated financial statements), the operating segment of the iCRI business has been classified as
discontinued operations.

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 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 believe that adoption of this accounting standard would 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 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



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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 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
fiscal years beginning after November 15, 2008, with early adoption permitted. The Company is currently evaluating and assessing the impact, if any, of the adoption of SFAS No. 161 on its consolidated financial statements.

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. 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 for the Three Months Ended June 30, 2008 as Compared to the Three Months Ended June 30, 2007:

iGATE Solutions (iGS)

Revenues of iGS for
the three months ended June 30, 2008 were $55.6 million, an increase of $ 7.0 million, or 14.5%, as compared to $ 48.6 million for the three months ended June 30, 2007. Our revenue increase for the periods presented is directly
attributable to a combination of new customer wins which contributed an increase of $2.1 million for the three months ended June 30, 2008, and $4.9 million from the increased business with our recurring customers. There is an increase in
billable headcount from 5,376 as of June 30, 2007 to 5,875 as of June 30, 2008. This increase in billable headcount directly resulted in increased billable hours and a corresponding increase in revenue. The top 10 customers accounted for
73%, and 69% of the revenue for the three months ended June 30, 2008 and June 30, 2007, respectively.

The gross margin as a
percentage of sales (gross margin percentage) for iGS was 35.7% for the three months ended June 30, 2008, as compared to 31.2% for the three months ended June 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 6.1% and 2.2, respectively, in the three months ended June 30, 2008 over the three months
ended June 30, 2007. Utilization over the second quarter in 2008 also increased from 75% to 76% as compared to the second quarter of 2007.



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Selling, general and administrative expenses (S,G&A) include all costs that are not
directly associated with iGSs revenue generating activities. SG&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 June 30, 2008 were $9 million or 16.3% of revenues, as compared to $9.5 million or 19.5% of revenues for
the three months ended June 30, 2007. Our net employee cost increased approximately $0.7 million for the three months ended June 30, 2008, as compared to three months ended June 30, 2007, due to annual salary revision in April 2008,
increase in support headcount from 489 to 527 and other increases in travel and related costs. Our net corporate cost decreased approximately $0.9 million for the three months ended June 30, 2008 due to recovery of previously provided debt and
a decrease in marketing, legal, accounting and administrative charges. Our net facilities costs decreased by $0.2 million for the three months ended June 30, 2008, mainly due to decrease in rental and communication related expenses.

Depreciation and amortization costs for the three months ended June 30, 2008 were $2.7 million or 4.8% of revenues, as compared to $2.6 million
or 5.3% of revenues for the three months ended June 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 SG&A cost and was recorded on a separate line item on our Consolidated Statements of
Operations.

Operating income was 14.6% of revenue for the three months ended June 30, 2008 and 2.3% of revenue for the three months
ended June 30, 2007. This increase was due primarily to the increases in gross margin by 4.5% and reduction in SG&A costs as a percentage of revenue by 7.8 %.

iGATE Professional Services (iPS)

Revenues for iPS for the three months ended
June 30, 2008 were $24.4 million, a decrease of $2.6 million or 9.7% as compared to $27.0 million for the three months ended June 30, 2007. The decrease was due to overall declines in demand for our staffing services in the financial
services sector. The top 10 customers accounted for 64.8%, and 61.2% of the revenue for the three months ended June 30, 2008 and June 30, 2007, respectively.

Gross margin percentage for iPS was 19.5% for the three months ended June 30, 2008, as compared to 22.1% for the three months ended June 30, 2007. The decrease in gross margin is mainly associated with
consultant wage increase outpacing bill rate increases and lower utilization levels during the 2008 period.

S,G&A expenses include all
costs that are not directly associated with our iPS segments revenue generating consultants. S,G&A expenses include employee costs, corporate costs and facilities costs. Employee costs includes sales, recruiting and administrative
salaries, bonuses, commissions and related employee benefits, travel, and H1-B processing costs. Corporate costs include items such as legal, marketing and outside services. Facilities costs include rent and communications costs.

S,G&A costs for the three months ended June 30, 2008 were $3 million or 12.3% of revenues, as compared to $3.6 million or 13.2% of revenues for
the three months ended June 30, 2007. This $0.6 million decline in S,G&A expenses for the three months ended June 30,2008, reflected lower employee costs, primarily related to bonuses, commissions and H1-B processing fees. Net
corporate and facilities costs remained consistent for the periods presented.

Depreciation and amortization costs for the three months
ended June 30, 2008 were $0.1 million or 0.3% of revenues, as compared to $0.1 million or 0.3% of revenues for the three months ended June 30, 2007.



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Operating income was 6.8% of revenue for the three months ended June 30, 2008 and 8.5% of revenue
for the three months ended June 30, 2007. This decline was due primarily to decreases in revenues and corresponding gross margin.

iGATE Shared
Services

The iGATE Shared Services segment included the operations of iGATE Clinical Research International Inc. and iGATE Clinical
Research International Private Limited (collectively iCRI), which provides offshore clinical trials for its customers, and general corporate expenses, interest income and expense, equity in income or losses of unconsolidated
affiliates, minority interest, income or loss from joint ventures and restructuring charges not identified to a specific segment, and other unallocated charges. With the proposed sale of the iCRI business (Refer Note 2 to the condensed
consolidated financial statements), the operating segment of the iCRI business has been classified as discontinued operations. Consequently, this segment includes only corporate and unallocated costs.

S,G&A costs were $1.3 million for the three months ended June 30, 2008, as compared to $2.1 million for the three months ended June 30,
2007. S,G&A expenses include employee costs, corporate costs and facilities costs. Employee costs include administrative salaries and related employee benefits, travel, recruiting and training costs. Corporate costs include costs such as legal,
accounting and outside consulting fees. Facilities costs include rent, depreciation and communications costs.

Our net employee cost
decreased approximately $0.5 million for the three months ended June 30, 2008 mainly due to decreases in employee salaries as a result of decrease in overall headcount. Our net corporate cost decreased by $0.3 million due to decrease in our
accounting and related fees. Facilities costs remained consistent for the periods presented.

Other Income (Expense) Components

Other income, net for the three months ended June 30, 2008, totaled $0.9 million, compared to $2.5 million for the three months ended June 30,
2007.

During the three months ended June 30, 2008, our net investment income totaled $0.6 million as compared to $1.1 million for the
three months ended June 30, 2007. The decrease was due to a decrease in cash and cash equivalents from $50.0 million in June 30, 2007 to $28.0 million in June 30, 2008 and a consequential decrease in investible funds. The decrease in
cash was mainly due to the purchase of shares from minority shareholders in iGS. For the three months ended June 30, 2008, we recognized $0.3 million of foreign currency gains in our income statement as compared to a gain of $1.4 million for
the three months ended June 30, 2007. These are primarily due to movements of foreign currency rates. As of June 30, 2008 all the outstanding forward contracts met the qualifying criteria to receive hedge accounting. As of June 30,
2007 we took an investment write off for $0.6 million.

Minority interest expense was $0.1 million for the three months ended June 30,
2008 and relates to the minority interest portion of the income of iGS. Minority interest expense was $0.4 million for the three months ended June 30, 2007 also related to the income of iGS. This has reduced due to the change in the minority
ownership in iGS to 1.3% as of June 30, 2008 from 18.8% as of June 30, 2007.

Income Taxes

Federal income taxes, calculated at the U.S. statutory rate, totaled $3.3 million for the three months ended June 30, 2008. State income taxes, which
totaled $0.1 million for the three months ended June 30, 2008, were calculated using a blended statutory rate, and are net of federal income tax benefit. Our income tax provision was $0.8 million at an effective rate of 8.3% for the three
months ended June 30, 2008.



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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 June 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 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 $0.4 million.

Federal income taxes, calculated at the U.S. statutory rate, totaled $1.0 million for the three months ended June 30, 2007. State income taxes which totaled $0.1 million for the three months ended June 30, 2007, 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 18.6% for the three months ended June 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 $0.7 million for the three months ended June 30, 2007. iGS non-operating income, such as interest income, is not included in the tax holiday, and has been considered as
part of our income tax provision.

Other variations typically arise because certain expenses or benefits recorded to our financial
statements are either limited or disallowed when calculating our income tax provision. Also, certain expenses such as meals and entertainment and executive compensation are limited for income tax purposes. Other expenses such as minority interest
expense are not deductible at all. The impact of the limited or disallowed items discussed above was $0.2 million.

Results of Operations for the Six
Months Ended June 30, 2008 as Compared to the Six Months Ended June 30, 2007:

iGATE Solutions (iGS)

Revenues of iGS for the six months ended June 30, 2008 were $110.5 million, an increase of $14.0 million or 14.6% as compared to $96.4 million for
the six months ended June 30, 2007. Our revenue increase for the periods presented is directly attributable to a combination of new customer wins which contributed an increase of $3.4 million for the six months ended June 30, 2008, and
$10.6 million from the increased business with our recurring customers. There is an increase in billable headcount from 5,376 as of June 30, 2007 to 5,875 as of June 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 six months ended June 30, 2008 and June 30, 2007, respectively.

The gross margin as a percentage of sales (gross margin percentage) for iGS was 36.4% for the six months ended June 30, 2008, as
compared to 31.6% for the six months ended June 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 7.0% and 3.2% respectively, in the six months ended June 30, 2008 over the six months ended June 30, 2007. Utilization over the first half in 2008 also increased from 73.0% to 76.0% as compared to the first half of 2007.

Selling, general and administrative expenses (S,G&A) include all costs that are not directly associated with iGSs
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.



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S,G&A costs for the six months ended June 30, 2008 were $19.6 million or 17.7% of revenues, as
compared to $18 million or 18.7% of revenues for the six months ended June 30, 2007. Our net employee cost increased approximately $1.8 million for the six months ended June 30, 2008, as compared to the six months ended June 30, 2007,
due to annual salary revision in April 2008, increase in support headcount from 462 to 527 and other increases in travel and related costs. Our net corporate cost decreased approximately $0.6 million for the six months ended June 30, 2008 due
to the decrease in marketing, bad debt and general corporate costs. Our net facilities costs increased by $0.5 million for the six months ended June 30, 2008, mainly due to an increase in maintenance of facilities due to enhanced capitalization
in India.

Depreciation and amortization costs for the six months ended June 30, 2008 were $5.8 million or 5.3% of revenues, as
compared to $5.1 million or 5.3% of revenues for the six months ended June 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 SG&A cost and was recorded on a separate line item on our Consolidated
Statements of Operations.

Operating income was 13.4% of revenue for the six months ended June 30, 2008 and 5.6% of revenue for the
six months ended June 30, 2007. This increase was due primarily to the increase in gross margin by 4.8% and decrease in SG&A costs as percentage of revenue by 3.0%.

iGATE Professional Services (iPS)

Revenues for iPS for the six months ended
June 30, 2008 were $49.3 million, a decrease of $4.8 million or 8.8% as compared to $54.1 million for the six months ended June 30, 2007. The decrease was due to overall declines in demand for our staffing services in the financial
services sector. The top 10 customers accounted for 63.8%, and 62.7% of the revenue for the six months ended June 30, 2008 and June 30, 2007, respectively.

Gross margin percentage for iPS was 19.7% for the six months ended June 30, 2008, as compared to 22.3% for the six months ended June 30, 2007. The decrease in gross margin is mainly associated with
consultant wage increase outpacing bill rate increases and lower utilization levels during the 2008 period.

S,G&A expenses include all
costs that are not directly associated with our iPS segments revenue generating consultants. S,G&A expenses include employee costs, corporate costs and facilities costs. Employee costs includes sales, recruiting and administrative
salaries, bonuses, commissions and related employee benefits, travel, and H1-B processing costs. Corporate costs include items such as legal, marketing and outside services. Facilities costs include rent and communications costs.

S,G&A costs for the six months ended June 30, 2008 were $6.5 million or 13.3% of revenues, as compared to $7.4 million or 13.7% of revenues for
the six months ended June 30, 2007. This $0.9 million decline in S,G&A expenses for the six months ended June 30, 2008, reflected lower employee costs, primarily related to bonuses, commissions and H1-B processing fees. Net corporate
and facilities costs remained consistent for the periods presented.

Depreciation and amortization costs for the six months ended
June 30, 2008 were $0.2 million or 0.3% of revenues, as compared to $0.2 million or 0.3% of revenues for the six months ended June 30, 2007.

Operating income was 6.1% of revenue for the six months ended June 30, 2008 and 8.2% of revenue for the six months ended June 30, 2007. This decline was due primarily to decreases in revenues and
corresponding gross margin.



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iGATE Shared Services

The iGATE Shared Services segment included the operations of iGATE Clinical Research International Inc. and iGATE Clinical Research International Private Limited (collectively iCRI), which provides
offshore clinical trials for its customers, and general corporate expenses, interest income and expense, equity in income or losses of unconsolidated affiliates, minority interest, income or loss from joint ventures and restructuring charges not
identified to a specific segment, and other unallocated charges. With the proposed sale of iCRI business (Refer Note 2 to the condensed consolidated financial statements), the operating segment of iCRI business has been classified as
Discontinued Operations. Consequently, this segment includes only corporate and unallocated costs.

S,G&A costs were $2.8 million for
the six months ended June 30, 2008, as compared to $4.1 million for the six months ended June 30, 2007. S,G&A expenses include employee costs, corporate costs and facilities costs. Employee costs include administrative salaries and
related employee benefits, travel, recruiting and training costs. Corporate costs include costs such as legal, accounting and outside consulting fees. Facilities costs include rent, depreciation and communications costs.

Our net employee cost decreased approximately $0.9 million for the six months ended June 30, 2008 mainly due to decreases in employee salaries as a
result of decrease in overall headcount. Our net corporate cost decreased by $0.4 million due to decrease in our accounting and related fees. Facilities costs remained consistent for the periods presented.

Other Income (Expense) Components

Other income, net
for the six months ended June 30, 2008, totaled $2.3 million, compared to $4.0 million for the six months ended June 30, 2007.

During the six months ended June 30, 2008, our net investment income totaled $1.2 million as compared to $2.1 million for the six months ended June 30, 2007. The decrease was due to a decrease in cash and cash equivalents from
$50.0 million in June 30, 2007 to $28.0 million in June 30, 2008 and consequential decrease in investible funds. The decrease in cash was mainly to purchase shares from minority shareholders in iGS. For the six months ended June 30,
2008, we recognized $1.0 million of foreign currency gain in our income statement. These are primarily due to movements of foreign currency rates. For the six months ended June 30, 2007, we recognized $1.9 million of favorable marked to market
recoveries on our ineffective hedges up to March 31, 2007 and favorable movement of foreign currencies for our effective hedges for the three months ended June 30, 2007. As of June 30, 2008 all the outstanding forward contracts met
the qualifying criteria to receive hedge accounting. During the six months ended June 30, 2008, we also recorded a gain of $0.1 million on sale of certain fixed assets of our Bangalore facility.

As of June 30, 2007, we took an investment write off for $0.6 million.

Minority interest expense was $0.4 million for the six months ended June 30, 2008 and relates to the minority interest portion of the income of iGS.
Minority interest expense was $1.3 million for the six months ended June 30, 2007, also related to the income of iGS. This has reduced due to the change in the minority ownership in iGS to 1.3% as of June 30, 2008 from 18.8% as of
June 30, 2007.

Income Taxes

Federal income taxes, calculated at the U.S. statutory rate, totaled $5.9 million for the six months ended June 30, 2008. State income taxes which totaled $0.1 million for the six months ended June 30, 2008, were calculated using
a blended statutory rate, and are net of federal income tax benefit. Our income tax provision was $0.9 million at an effective rate of 5.6% for the six months ended June 30, 2008.



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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 $5.3 million for the six months ended June 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 $0.3 million.

Federal income taxes, calculated at the U.S. statutory rate, totaled $2.8 million for the six months ended June 30, 2007. State income taxes which totaled $0.2 million for the six months ended June 30, 2007 were calculated using a
blended statutory rate, and are net of federal income tax benefit. Our income tax provision was $1.1 million at an effective rate of 14.2% for the six months ended June 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 $2.2 million for the six months ended June 30, 2007. iGS non-operating income, such as interest income, is not included in the tax holiday, and has been considered as
part of our income tax provision.

Other variations typically arise because certain expenses or benefits recorded to our financial
statements are either limited or disallowed when calculating our income tax provision. 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.

Liquidity and Capital Resources

Cash from Operations

Cash provided by
operations was $23.1 million for the six months ended June 30, 2008. Factors contributing to our cash provided by operations were net income of $15.9 million for the period offset by an increase in accounts receivable of $11.0 million. The
increase in accounts receivable is due to an increase in sales and increase in days of sales outstanding from 61 days as on December 31, 2007 to 67 days as on June 30, 2008. The decrease in other significant working capital includes an
increase of $10.0 million in accrued and other liabilities on account of movement in deferred tax, and mark to market losses on effective hedging and decrease in prepaid assets for $4.6 million. This inflow was mainly offset by a decrease in
restructuring reserve of $0.5 million, realized gain on investment of $1.3 million. During the period, significant non cash items totaled $8.3 million and included depreciation and amortization cost of $6.0 million and stock based compensation
expense of $2.3million.

Cash provided by operations was $14.7 million for the six months ended June 30, 2007. Factors contributing to
our cash provided by operations were net income of $6.4 million offset by an increase in accounts receivable of $2.7 million. Significant non cash items during the six months ended June 30, 2007 totaled $11.1 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.



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Investing Activities

Cash used in investing activities for the six months ended June 30, 2008 was $43.0 million, as compared to cash used in by investing activities of $15.6 million for the six months ended June 30, 2007.

During the six months ended June 30, 2008, iGATE repurchased 1.8 million shares for $18.4 million of iGS as part of iGSs
delisting from Indian stock exchanges. The Company also settled for cash vested iGS stock options of iGS employees for $8.4 million. The total outflow for the six months ended June 30, 2008 on account of iGS stocks and option settlement
was $26.8 million.

Our capital expenditures were $6.3 million and $5.2 million for the six months ended June 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 by $8.4 million and $10.4 million for the six month periods ended June 30, 2008 and 2007, respectively.

Financing Activities

Cash provided
by financing activities was $0.8 million and $1.5 million for the six months period ended June 30, 2008 and 2007, respectively. Sources of cash related to stock option exercises were $0.9 million.

Payments on secured financing for automobiles in India were $0.1 million and $0.1million for the six month periods ending June 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s present and future receivables, investments, rights to or on moveable properties and moveable current assets. As at June 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 June 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:



|                       |  |                                                |       |      |                             |                                                |      |  |   |       |   |  |   |       |   |  |    |        |   |    |   |       |     |  |   |        |   |  |   |        |   |  |   |       |  
|---------------------- |  | ---------------------------------------------- | ----- | ---- | --------------------------- | ---------------------------------------------- | ---- |  | - | ----- | - |  | - | ----- | - |  | -- | ------ | - | -- | - | ----- | --- |  | - | ------ | - |  | - | ------ | - |  | - | ----- | -
|                       |  |                                                |       |      | Fair Valueas ofJune 30,2008 |                                                |      |  |  
|                       |  | Valuation given X% decreasein Rupee / USD rate |       |      |                             | Valuation given X% increasein Rupee / USD rate |     
|                       |  | (10%)                                          |       | (5%) |                             |                                                | (2%) |  |   | (1%)  |   |  |   | 1%    |   |  | 2% |        |   | 5% |   |       | 10% | 
|Rupee to U.S. Rate     |  |                                                | 38.73 |      |                             | 40.833                                         |      |  |   | 42.17 |   |  |   | 42.60 |   |  |    | 43.035 |   |    |   | 43.46 |     |  |   | 43.892 |   |  |   | 45.186 |   |  |   | 47.33 |  
|Derivative Instruments |  | $                                              | 5.0   |      | $                           | (1.5                                           | )    |  | $ | (5.4  | ) |  | $ | (6.7  | ) |  | $  | (7.5   | ) |    | $ | (9.3  | )   |  | $ | (10.7  | ) |  | $ | (14.5  | ) |  | $ | (21.0 | )
|                       |  |                                                |       |      |                             |                                                |      |  |   |       |   |  |   |       |   |  |    |        |   |    |   |       |     |  |   |        |   |  |   |        |   |  |   |       |  

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.



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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.



|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 six months ended June 30, 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 6. | EXHIBITS
|------- | --------



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



|     |  |                                                                                                                                                                          
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.8 |  | Goods Security agreement dated May 21, 2008 by and among iGATE Global Solutions Ltd., and Citibank N.A. is filed herewith.                                               
|     | 
|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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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 1stday of August,
2008.



|               |  |                                                     
|-------------- |  | ----------------------------------------------------
|               |  | iGATE CORPORATION                                   
|               | 
|August 1, 2008 |  | /S/    PHANEESH
MURTHY                              
|               |  | Phaneesh Murthy Chief Executive Officer and Director
|               | 
|               |  | /S/    RAMACHANDRAN
NATESAN                         
|               |  | Ramachandran Natesan Chief Financial Officer        



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EXHIBIT INDEX



|     |  |                                                                                                                                                                         
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.8 |  | Goods Security Agreement dated May 21, 2008 by and among iGATE Global Solutions Ltd., and Citibank N.A. is filed herewith.                                              
|     | 
|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.



34