##### Table of Contents

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2006



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

Commission File Number 000-21755



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iGATE CORPORATION

(Exact name of
registrant as specified in its charter)



|                                                              |  |                                    
|------------------------------------------------------------- |  | -----------------------------------
|PENNSYLVANIA                                                  |  | 25-1802235                         
|(State or other jurisdictionof incorporation or organization) |  | (I.R.S. EmployerIdentification No.)
|                                                              | 
|1000 Commerce Drive Suite 500 Pittsburgh, PA                  |  | 15275                              
|(Address of principal executive offices)                      |  | (Zip Code)                         

Registrants telephone number, including area code: (412) 506-1131

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

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such
filing requirements for the past 90 days.     Yes x    No ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See
definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):

Large
accelerated filer ̈Accelerated filer  x            Non-accelerated filer ̈

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).    Yes ̈No x

The number of shares of the registrants Common Stock, par value $.01 per share, outstanding as of April 28, 2006 was 52,948,742 shares.



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##### Table of Contents

iGATE CORPORATION

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED MARCH 31, 2006

TABLE OF CONTENTS



|         |  |                                                                                       |  |                                                                                                                                               |  |     
|-------- |  | ------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|         |  |                                                                                       |  |                                                                                                                                               |  | Page
|PART I   |  | FINANCIAL INFORMATION                                                                 |  | 3                                                                                                                                            
|         |  |                                                                                      
|Item 1.  |  | Unaudited Condensed Consolidated Financial Statements                                 |  |                                                                                                                                              
|         |  |                                                                                       | 
|         |  | (a)                                                                                   |  | Unaudited Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2006 and 2005                                  |  | 3   
|         |  |                                                                                       | 
|         |  | (b)                                                                                   |  | Condensed Consolidated Balance Sheets as of March 31, 2006 (Unaudited) andDecember 31, 2005                                                   |  | 4   
|         |  |                                                                                       | 
|         |  | (c)                                                                                   |  | Unaudited Consolidated Statements of Shareholders Equity and Comprehensive Income (Loss) for the Three Months Ended March 31, 2006 and 2005. |  | 5   
|         |  |                                                                                       | 
|         |  | (d)                                                                                   |  | Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2006 and 2005                                  |  | 6   
|         |  |                                                                                       | 
|         |  | (e)                                                                                   |  | Notes to Unaudited Condensed Consolidated Financial Statements                                                                                |  | 7   
|         |  |                                                                                      
|Item 2.  |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 20                                                                                                                                           
|         |  |                                                                                      
|Item 3.  |  | Quantitative and Qualitative Disclosure About Market Risk                             |  | 30                                                                                                                                           
|         |  |                                                                                      
|Item 4.  |  | Controls and Procedures                                                               |  | 33                                                                                                                                           
|         |  |                                                                                      
|PART II  |  | OTHER INFORMATION                                                                     |  | 34                                                                                                                                           
|         |  |                                                                                      
|Item 1A. |  | Risk Factors                                                                          |  | 34                                                                                                                                           
|         |  |                                                                                      
|Item 6.  |  | Exhibits                                                                              |  | 34                                                                                                                                           
|         |  |                                                                                      
|         |  | SIGNATURES                                                                            |  | 35                                                                                                                                           



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|PART I. | FINANCIAL INFORMATION
|------- | ---------------------



|ITEM 1. | CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|------- | -------------------------------------------

(a)

iGATE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands, except per share data)

(Unaudited)



|                                                              |  |                             |        |   |      |   |        |  
|------------------------------------------------------------- |  | --------------------------- | ------ | - | ---- | - | ------ | -
|                                                              |  | Three Months EndedMarch 31, |       
|                                                              |  | 2006                        |        |   | 2005 |  
|Revenues                                                      |  | $                           | 67,696 |   |      | $ | 69,601 |  
|Cost of revenues (1)                                          |  |                             | 50,514 |   |      |   | 52,404 |  
|                                                              |  |                             |        |   |      |   |        |  
|Gross margin                                                  |  |                             | 17,182 |   |      |   | 17,197 |  
|                                                              |  |                            
|Selling, general and administrative (2)                       |  |                             | 16,882 |   |      |   | 17,229 |  
|                                                              |  |                             |        |   |      |   |        |  
|Income (loss) from operations                                 |  |                             | 300    |   |      |   | (32    | )
|                                                              |  |                            
|Other income (expense), net                                   |  |                             | 1,431  |   |      |   | (286   | )
|Minority interest                                             |  |                             | (145   | ) |      |   | (84    | )
|Equity in income (losses) of affiliated companies             |  |                             | 65     |   |      |   | (117   | )
|                                                              |  |                             |        |   |      |   |        |  
|                                                              |  |                            
|Income (loss) before income taxes                             |  |                             | 1,651  |   |      |   | (519   | )
|Income tax expense (benefit)                                  |  |                             | 568    |   |      |   | (1,863 | )
|                                                              |  |                             |        |   |      |   |        |  
|Net income                                                    |  | $                           | 1,083  |   |      | $ | 1,344  |  
|                                                              |  |                             |        |   |      |   |        |  
|Net earnings per common share, Basic                          |  | $                           | 0.02   |   |      | $ | 0.03   |  
|                                                              |  |                             |        |   |      |   |        |  
|Net earnings per common share, Diluted                        |  | $                           | 0.02   |   |      | $ | 0.03   |  
|                                                              |  |                             |        |   |      |   |        |  
|                                                              |  |                            
|Weighted average common shares, Basic                         |  |                             | 52,841 |   |      |   | 52,479 |  
|                                                              |  |                             |        |   |      |   |        |  
|                                                              |  |                            
|Weighted average diluted common equivalent shares outstanding |  |                             | 53,151 |   |      |   | 52,723 |  
|                                                              |  |                             |        |   |      |   |        |  

---

|(1) | 2006 includes SFAS 123 (R) stock compensation expense of $0.4 million
|--- | ---------------------------------------------------------------------



|(2) | 2006 includes SFAS 123 (R) stock compensation of expense $0.5 million
|--- | ---------------------------------------------------------------------

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



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(b)

iGATE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

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



|                                                                                                                                            |  |               |             |   |                   |   |         |  
|------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ----------- | - | ----------------- | - | ------- | -
|                                                                                                                                            |  | March 31,2006 |             |   | December 31,2005* |  
|ASSETS                                                                                                                                      |  |               | (Unaudited) |   |                   |   |         |  
|Current assets:                                                                                                                             |  |               |             |   |                   |   |         |  
|Cash and cash equivalents                                                                                                                   |  | $             | 43,418      |   |                   | $ | 45,837  |  
|Short-term investments                                                                                                                      |  |               | 31,125      |   |                   |   | 30,798  |  
|Accounts receivable, net                                                                                                                    |  |               | 49,553      |   |                   |   | 49,479  |  
|Prepaid and other current assets                                                                                                            |  |               | 7,130       |   |                   |   | 7,237   |  
|Prepaid income taxes                                                                                                                        |  |               | 1,461       |   |                   |   | 1,060   |  
|Deferred income taxes                                                                                                                       |  |               | 783         |   |                   |   | 1,058   |  
|                                                                                                                                            |  |               |             |   |                   |   |         |  
|Total current assets                                                                                                                        |  |               | 133,470     |   |                   |   | 135,469 |  
|                                                                                                                                            |  |               |             |   |                   |   |         |  
|Investments in unconsolidated affiliates                                                                                                    |  |               | 1,127       |   |                   |   | 1,050   |  
|Land, building, equipment and leasehold improvements, net                                                                                   |  |               | 29,101      |   |                   |   | 28,539  |  
|Goodwill                                                                                                                                    |  |               | 8,975       |   |                   |   | 8,851   |  
|Intangible assets, net                                                                                                                      |  |               | 2,996       |   |                   |   | 3,565   |  
|                                                                                                                                            |  |               |             |   |                   |   |         |  
|Total assets                                                                                                                                |  | $             | 175,669     |   |                   | $ | 177,474 |  
|                                                                                                                                            |  |               |             |   |                   |   |         |  
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                        |  |               |             |   |                   |   |         |  
|Current liabilities:                                                                                                                        |  |               |             |   |                   |   |         |  
|Accounts payable                                                                                                                            |  | $             | 5,133       |   |                   | $ | 5,958   |  
|Accrued payroll and related costs                                                                                                           |  |               | 14,133      |   |                   |   | 16,304  |  
|Other accrued liabilities                                                                                                                   |  |               | 7,098       |   |                   |   | 8,163   |  
|Restructuring reserve                                                                                                                       |  |               | 1,595       |   |                   |   | 2,355   |  
|Deferred revenue                                                                                                                            |  |               | 365         |   |                   |   | 362     |  
|                                                                                                                                            |  |               |             |   |                   |   |         |  
|Total current liabilities                                                                                                                   |  |               | 28,324      |   |                   |   | 33,142  |  
|Restructuring reserve                                                                                                                       |  |               | 2,289       |   |                   |   | 2,422   |  
|Other long-term liabilities                                                                                                                 |  |               | 311         |   |                   |   | 422     |  
|Deferred income taxes                                                                                                                       |  |               | 9,649       |   |                   |   | 9,718   |  
|                                                                                                                                            |  |               |             |   |                   |   |         |  
|Total liabilities                                                                                                                           |  |               | 40,573      |   |                   |   | 45,704  |  
|                                                                                                                                            |  |               |             |   |                   |   |         |  
|Minority interest                                                                                                                           |  |               | 15,290      |   |                   |   | 14,098  |  
|Commitments and contingencies                                                                                                               |  |               |            |   |                   |   |        |  
|Shareholders equity:                                                                                                                       |  |               |             |   |                   |   |         |  
|Preferred stock, without par value: 20,000,000 shares authorized, 1 share ofPreferred Stock held in treasury in 2006 and 2005,
respectively |  |               |            |   |                   |   |        |  
|Common stock, par value $0.01 per share:                                                                                                    |  |               |             |   |                   |   |         |  
|100,000,000 shares authorized, 53,916,644 and 53,756,638 shares issued, respectively                                                        |  |               | 539         |   |                   |   | 538     |  
|Additional paid-in capital                                                                                                                  |  |               | 161,990     |   |                   |   | 162,278 |  
|Accumulated deficit                                                                                                                         |  |               | (28,658     | ) |                   |   | (29,741 | )
|Deferred compensation                                                                                                                       |  |               |            |   |                   |   | (1,119  | )
|Common stock held in treasury, at cost, 990,102 shares                                                                                      |  |               | (14,714     | ) |                   |   | (14,714 | )
|Accumulated other comprehensive income                                                                                                      |  |               | 649         |   |                   |   | 430     |  
|                                                                                                                                            |  |               |             |   |                   |   |         |  
|Total shareholders equity                                                                                                                  |  |               | 119,806     |   |                   |   | 117,672 |  
|                                                                                                                                            |  |               |             |   |                   |   |         |  
|Total liabilities and shareholders equity                                                                                                  |  | $             | 175,669     |   |                   | $ | 177,474 |  
|                                                                                                                                            |  |               |             |   |                   |   |         |  



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

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



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(c)

iGATE CORPORATION

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

(Dollars in thousands)

(Unaudited)



|                                                                         |  |              |  |                            |     |  |                      |         |   |                       |   |         |                |  |   |                                               |   |  |                          |         |   |                              |   |       |   |  |   |         |   |  |   |         |  
|------------------------------------------------------------------------ |  | ------------ |  | -------------------------- | --- |  | -------------------- | ------- | - | --------------------- | - | ------- | -------------- |  | - | --------------------------------------------- | - |  | ------------------------ | ------- | - | ---------------------------- | - | ----- | - |  | - | ------- | - |  | - | ------- | -
|                                                                         |  | Common Stock |  | Additional Paid-in Capital |     |  | Accumulated(Deficit) |         |   | Deferred Compensation |   |         | TreasuryShares |  |   | Accumulated Other Comprehensive Income (Loss) |   |  | TotalShareholdersEquity |         |   | Comprehensive Income/ (Loss) |  
|                                                                         |  | Shares       |  | ParValue                   |     |  |                      |         |   |                       |  
|Balance, December 31, 2005                                               |  | 52,766,536   |  | $                          | 538 |  | $                    | 162,278 |   |                       | $ | (29,741 | )              |  | $ | (1,119                                        | ) |  | $                        | (14,714 | ) |                              | $ | 430   |   |  | $ | 117,672 |   |  |   |         |  
|Exercise of stock options, includes the effect of tax benefit recognized |  | 160,006      |  |                            | 1   |  |                      | 640     |   |                       |   |        |                |  |   |                                              |   |  |                          |        |   |                              |   |      |   |  |   | 641     |   |  |   |         |  
|Reclassification of deferred compensation                                |  |             |  |                            |    |  |                      | (1,119  | ) |                       |   |        |                |  |   | 1,119                                         |   |  |                          |        |   |                              |   |      |   |  |   |        |   |  |   |         |  
|Stock-based compensation expense                                         |  |             |  |                            |    |  |                      | 191     |   |                       |   |        |                |  |   |                                              |   |  |                          |        |   |                              |   |      |   |  |   | 191     |   |  |   |         |  
|Comprehensive income:                                                    |  |              |  |                            |     |  |                      |         |   |                       |   |         |                |  |   |                                               |   |  |                          |         |   |                              |   |       |   |  |   |         |   |  |   |         |  
|Currency translation adjustment                                          |  |             |  |                            |    |  |                      |        |   |                       |   |        |                |  |   |                                              |   |  |                          |        |   |                              |   | 219   |   |  |   | 219     |   |  | $ | 219     |  
|Net income                                                               |  |             |  |                            |    |  |                      |        |   |                       |   | 1,083   |                |  |   |                                              |   |  |                          |        |   |                              |   |      |   |  |   | 1,083   |   |  |   | 1,083   |  
|                                                                         |  |              |  |                            |     |  |                      |         |   |                       |   |         |                |  |   |                                               |   |  |                          |         |   |                              |   |       |   |  |   |         |   |  |   |         |  
|                                                                         |  |              |  |                            |     |  |                      |         |   |                       |   |         |                |  |   |                                               |   |  |                          |         |   |                              |   |       |   |  |   |         |   |  | $ | 1,302   |  
|                                                                         |  |              |  |                            |     |  |                      |         |   |                       |   |         |                |  |   |                                               |   |  |                          |         |   |                              |   |       |   |  |   |         |   |  |   |         |  
|Balance, March 31, 2006                                                  |  | 52,926,542   |  | $                          | 539 |  | $                    | 161,990 |   |                       | $ | (28,658 | )              |  | $ |                                              |   |  | $                        | (14,714 | ) |                              | $ | 649   |   |  |   |         |   |  | $ | 119,806 |  
|                                                                         |  |              |  |                            |     |  |                      |         |   |                       |   |         |                |  |   |                                               |   |  |                          |         |   |                              |   |       |   |  |   |         |   |  |   |         |  
|Balance, December 31, 2004                                               |  | 52,512,346   |  | $                          | 535 |  | $                    | 161,345 |   |                       | $ | (36,710 | )              |  | $ | (1,934                                        | ) |  | $                        | (14,714 | ) |                              | $ | 3,178 |   |  | $ | 111,700 |   |  |   |         |  
|Exercise of stock options, includes the effect of tax benefit recognized |  | 52,014       |  |                            |    |  |                      | 165     |   |                       |   |        |                |  |   |                                              |   |  |                          |        |   |                              |   |      |   |  |   | 165     |   |  |   |         |  
|Amortization of deferred compensation                                    |  |             |  |                            |    |  |                      |        |   |                       |   |        |                |  |   | 203                                           |   |  |                          |        |   |                              |   |      |   |  |   | 203     |   |  |   |         |  
|Comprehensive income:                                                    |  |              |  |                            |     |  |                      |         |   |                       |   |         |                |  |   |                                               |   |  |                          |         |   |                              |   |       |   |  |   |         |   |  |   |         |  
|Unrealized loss on investments, netof tax                                |  |             |  |                            |    |  |                      |        |   |                       |   |        |                |  |   |                                              |   |  |                          |        |   |                              |   | (40   | ) |  |   | (40     | ) |  | $ | (40     | )
|Currency translation adjustment                                          |  |             |  |                            |    |  |                      |        |   |                       |   |        |                |  |   |                                              |   |  |                          |        |   |                              |   | (227  | ) |  |   | (227    | ) |  |   | (227    | )
|Net income                                                               |  |             |  |                            |    |  |                      |        |   |                       |   | 1,344   |                |  |   |                                              |   |  |                          |        |   |                              |   |      |   |  |   | 1,344   |   |  |   | 1,344   |  
|                                                                         |  |              |  |                            |     |  |                      |         |   |                       |   |         |                |  |   |                                               |   |  |                          |         |   |                              |   |       |   |  |   |         |   |  |   |         |  
|                                                                         |  |              |  |                            |     |  |                      |         |   |                       |   |         |                |  |   |                                               |   |  |                          |         |   |                              |   |       |   |  |   |         |   |  | $ | 1,077   |  
|                                                                         |  |              |  |                            |     |  |                      |         |   |                       |   |         |                |  |   |                                               |   |  |                          |         |   |                              |   |       |   |  |   |         |   |  |   |         |  
|Balance, March 31, 2005                                                  |  | 52,564,360   |  | $                          | 535 |  | $                    | 161,510 |   |                       | $ | (35,366 | )              |  | $ | (1,731                                        | ) |  | $                        | (14,714 | ) |                              | $ | 2,911 |   |  | $ | 113,145 |   |  |   |         |  
|                                                                         |  |              |  |                            |     |  |                      |         |   |                       |   |         |                |  |   |                                               |   |  |                          |         |   |                              |   |       |   |  |   |         |   |  |   |         |  

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



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(d)

iGATE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)



|                                                                       |  |                             |        |   |      |   |        |  
|---------------------------------------------------------------------- |  | --------------------------- | ------ | - | ---- | - | ------ | -
|                                                                       |  | Three Months EndedMarch 31, |       
|                                                                       |  | 2006                        |        |   | 2005 |  
|Cash Flows From Operating Activities:                                  |  |                             |        |   |      |   |        |  
|Net income                                                             |  | $                           | 1,083  |   |      | $ | 1,344  |  
|Adjustments to reconcile net income to cash used by operations:        |  |                             |        |   |      |   |        |  
|Depreciation and amortization                                          |  |                             | 2,918  |   |      |   | 2,554  |  
|Stock based compensation                                               |  |                             | 936    |   |      |   | 203    |  
|Unrealized gain on derivative instruments                              |  |                             | (1,019 | ) |      |   |       |  
|Realized (gain) loss on investments                                    |  |                             | (29    | ) |      |   | 58     |  
|Bad debt (recovery) expense                                            |  |                             | (93    | ) |      |   | 290    |  
|Deferred income taxes, net                                             |  |                             | 324    |   |      |   | (671   | )
|Equity in (income) loss of affiliated companies                        |  |                             | (65    | ) |      |   | 117    |  
|Minority interest                                                      |  |                             | 145    |   |      |   | 84     |  
|Working capital items:                                                 |  |                             |        |   |      |   |        |  
|Accounts receivable and unbilled receivables                           |  |                             | 422    |   |      |   | (2,493 | )
|Prepaid and other assets                                               |  |                             | (246   | ) |      |   | 206    |  
|Accounts payable                                                       |  |                             | (864   | ) |      |   | 1,289  |  
|Accrued and other current liabilities                                  |  |                             | (2,315 | ) |      |   | (6,517 | )
|Deferred revenue                                                       |  |                             | 3      |   |      |   | (138   | )
|Restructuring reserve                                                  |  |                             | (972   | ) |      |   | (874   | )
|                                                                       |  |                             |        |   |      |   |        |  
|Net cash flows provided (used) by operating activities                 |  |                             | 228    |   |      |   | (4,548 | )
|                                                                       |  |                             |        |   |      |   |        |  
|Cash Flows From Investing Activities:                                  |  |                             |        |   |      |   |        |  
|Additions to land, building, equipment and leasehold improvements, net |  |                             | (2,610 | ) |      |   | (5,798 | )
|(Purchases) sales of investments, net                                  |  |                             | (235   | ) |      |   | 3,516  |  
|Investments in unconsolidated affiliates                               |  |                             |       |   |      |   | (273   | )
|                                                                       |  |                             |        |   |      |   |        |  
|Net cash flows used by investing activities                            |  |                             | (2,845 | ) |      |   | (2,555 | )
|                                                                       |  |                             |        |   |      |   |        |  
|Cash Flows From Financing Activities:                                  |  |                             |        |   |      |   |        |  
|Payments on secured financing                                          |  |                             | (188   | ) |      |   |       |  
|Net proceeds from exercise of stock options                            |  |                             | 585    |   |      |   | 180    |  
|                                                                       |  |                             |        |   |      |   |        |  
|Net cash flows provided by financing activities                        |  |                             | 397    |   |      |   | 180    |  
|                                                                       |  |                             |        |   |      |   |        |  
|Effect of currency translation                                         |  |                             | (199   | ) |      |   | 410    |  
|                                                                       |  |                             |        |   |      |   |        |  
|Net change in cash and cash equivalents                                |  |                             | (2,419 | ) |      |   | (6,513 | )
|Cash and cash equivalents, beginning of period                         |  |                             | 45,837 |   |      |   | 28,201 |  
|                                                                       |  |                             |        |   |      |   |        |  
|Cash and cash equivalents, end of period                               |  | $                           | 43,418 |   |      | $ | 21,688 |  
|                                                                       |  |                             |        |   |      |   |        |  

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



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iGATE CORPORATION

(e)    NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.    Basis of Presentation

The Unaudited Condensed Consolidated Financial Statements included herein have been prepared by iGATE Corporation (the Company) in accordance with generally accepted accounting principles for interim financial information
and Article 10 of Regulation S-X under the Securities Exchange Act of 1934, as amended. Accordingly, the accompanying Unaudited Condensed Consolidated Financial Statements do not include all of the information and notes required by accounting
principles generally accepted in the United States of America for complete financial statements. The accompanying Unaudited Condensed Consolidated Financial Statements as of and for the three months ended March 31, 2006 and 2005 should be read
in conjunction with the Companys Consolidated Financial Statements (and notes thereto) included in the Companys Annual Report filed on Form 10-K for the year ended December 31, 2005. In the opinion of the Companys management,
all adjustments considered necessary for a fair statement of the accompanying Unaudited Condensed Consolidated Financial Statements have been included, and all adjustments, unless otherwise discussed in the Notes to the Unaudited Condensed
Consolidated Financial Statements, are of a normal and recurring nature. All significant intercompany accounts and transactions have been eliminated in consolidation. Operating results for the three months ended March 31, 2006 are not
necessarily indicative of the results that may be expected for the year ending December 31, 2006.

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

2.    Stock Based Compensation

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

Effective January 1, 2006, the Company adopted the provisions of SFAS No. 123 (R) using the modified prospective transition method. Under
this transition method, the compensation cost recognized beginning January 1, 2006 includes compensation cost for (i) all share-based payments granted prior to, but not yet vested as of January 1, 2006, based on the grant-date fair
value estimated in accordance with the original provisions of SFAS No. 123, and (ii) all share-based payments granted subsequent to December 31, 2005 based on the grant-date fair value estimated in accordance with the provisions of
SFAS No. 123 (R). Compensation cost is generally recognized ratably over the requisite service period or the retirement date for retirement eligible employees, if earlier. Prior period amounts have not been restated.

As a result of the adoption of SFAS No. 123 (R), the Companys results for the quarter ended March 31, 2006 include share-based
compensation expense of $0.9 million. The total stock-based compensation cost has been included in the Consolidated Statements of Income within direct costs of $0.4 million and selling, general and administrative expenses of $0.5 million. The
Company has recognized a related tax benefit associated with its share-based compensation arrangements totaling less than $0.1 million.



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##### Table of Contents

iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Prior to January 1, 2006, the Company accounted for stock-based compensation plans in accordance
with the provisions of APB Opinion No. 25, as permitted by SFAS No. 123, and accordingly did not recognize compensation expense for the issuance of options with an exercise price equal to or greater than the market price at the date of
grant. The Company did recognize $0.2 million of compensation expense for the three months ended March 31, 2005 related to a restricted stock grant and discounted stock options. Had the fair value based method as prescribed by SFAS No. 123
been applied by iGATE, the effect on net income and earnings per share for the first quarter of 2005 would have been as follows ($ in thousands, except per share data):



|                                                                                                                                          |  |                                  |       |  
|----------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------- | ----- | -
|                                                                                                                                          |  | Three Months EndedMarch 31, 2005 |      
|Net income, as reported (including $0.2 million of stock compensation expense recognized)                                                 |  | $                                | 1,344 |  
|Less: Total stock-based employee compensation expense determined under fair value method for all awards and deferred compensation
expense |  |                                  | (312  | )
|                                                                                                                                          |  |                                  |       |  
|Proforma net income                                                                                                                       |  | $                                | 1,032 |  
|                                                                                                                                          |  |                                  |       |  
|Earnings per share:                                                                                                                       |  |                                  |       |  
|Basic  as reported                                                                                                                       |  | $                                | 0.03  |  
|                                                                                                                                          |  |                                  |       |  
|Basic  Proforma                                                                                                                          |  | $                                | 0.02  |  
|                                                                                                                                          |  |                                  |       |  
|Diluted  as reported                                                                                                                     |  | $                                | 0.03  |  
|                                                                                                                                          |  |                                  |       |  
|Diluted  Proforma                                                                                                                        |  | $                                | 0.02  |  
|                                                                                                                                          |  |                                  |       |  

iGATE Corporation Stock Option Plans

During 2000, the Company adopted the Second Amended and Restated Stock Incentive Plan (the Plan). The Plan provides that up to
14.7 million shares of the Companys Common Stock shall be allocated for issuance to directors, executive management and key personnel. At December 31, 2005, there were 10.2 million shares of Common Stock available for issuance
under the Plan. In addition, the Companys iGS subsidiary also maintains its own stock option plans. iGS stock option plans were approved by its Boards of Directors in 2000. The Company accounts for the Plan and its subsidiaries
stock option plans under Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees.

iGS Stock
Option Plans

The Companys majority-owned subsidiary, iGS maintains two (2) employee stock option plans herein referred
to as Plan 1 and Plan 2. The Plans are administered by a committee appointed by the Board of Directors of iGS. Plan 1 provides for the issuance of a maximum of 3.0 million shares of iGS common stock and Plan 2 provides for
the issuance of a maximum of 4.5 million shares of iGS common stock. Options are typically granted at the prevailing market values for each of the Plans.

Options for each of the above Plans generally expire ten years from the date of grant or earlier if an option holder ceases to be employed or associated by the Company for any reason.



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##### Table of Contents

iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



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



|                               |  |                             |           |   |                             |   |         |       |  |   |                      |   |  |   |         |  
|------------------------------ |  | --------------------------- | --------- | - | --------------------------- | - | ------- | ----- |  | - | -------------------- | - |  | - | ------- | -
|                               |  | Quarter EndedMarch 31, 2006 |           |   | Quarter EndedMarch 31, 2005 |  
|                               |  | iGATE                       |           |   | iGATEGlobalSolutions        |   |         | iGATE |  |   | iGATEGlobalSolutions |  
|Fair values of options granted |  | $                           | 3.15      |   |                             | $ | 3.35    |       |  | $ | 2.91                 |   |  | $ | 3.09    |  
|Risk-free interest rate        |  |                             | 4.61      | % |                             |   | 6.91    | %     |  |   | 4.00                 | % |  |   | 3.82    | %
|Expected dividend yield        |  |                             | 0.0       | % |                             |   | 0.5     | %     |  |   | 0.0                  | % |  |   | 0.0     | %
|Expected life of options       |  |                             | 4.5 years |   |                             |   | 5 years |       |  |   | 5 years              |   |  |   | 4 years |  
|Expected volatility rate       |  |                             | 66.8      | % |                             |   | 63.8    | %     |  |   | 88.5                 | % |  |   | 65.5    | %

The total intrinsic value of options exercised during the three months ended March 31, 2006
and 2005 was $0.1 million and $0.2 million, respectively. The excess cash tax benefit classified as a financing cash inflow for the quarter ended March 31, 2006 and 2005 were not significant.

As of March 31, 2006, there was $8.4 million of total unrecognized compensation cost related to non-vested stock options granted. The cost is
expected to be recognized over a weighted-average period of 2.0 fiscal years.

A summary of each stock option plan is presented below:



|                                                      |  |            |   |  |                              |       |                                                   |     |                                        |   |    
|----------------------------------------------------- |  | ---------- | - |  | ---------------------------- | ----- | ------------------------------------------------- | --- | -------------------------------------- | - | ---
|iGATE Stock Option Plan                               |  | Options    |   |  | WeightedAverageExercisePrice |       | WeightedAverageRemainingContractualTerm(in years) |     | AggregateIntrinsic Value (in millions)
|Options outstanding at December 31, 2005              |  | 2,201,207  |   |  | $                            | 6.93  |                                                   |     |                                        |   |    
|Granted                                               |  | 100,000    |   |  |                              | 5.41  |                                                   |     |                                        |   |    
|Exercised                                             |  | (160,006   | ) |  |                              | 3.14  |                                                   |     |                                        |   |    
|Lapsed and forfeited                                  |  | (89,364    | ) |  |                              | 16.00 |                                                   |     |                                        |   |    
|                                                      |  |            |   |  |                              |       |                                                   |     |                                        |   |    
|Options outstanding at March 31, 2006                 |  | 2,051,837  |   |  | $                            | 6.76  |                                                   | 5.7 |                                        | $ | 3.2
|                                                      |  |            |   |  |                              |       |                                                   |     |                                        |   |    
|Options vested and expected to vest at March 31, 2006 |  | 2,027,609  |   |  | $                            | 6.79  |                                                   | 5.8 |                                        | $ | 3.1
|                                                      |  |            |   |  |                              |       |                                                   |     |                                        |   |    
|Options exercisable at March 31, 2006                 |  | 1,316,362  |   |  | $                            | 8.38  |                                                   | 4.2 |                                        | $ | 1.7
|                                                      |  |            |   |  |                              |       |                                                   |     |                                        |   |    
|Available for future grant                            |  | 10,177,701 |   |  |                              |       |                                                   |     |                                        |   |    
|                                                      |  |            |   |  |                              |       |                                                   |     |                                        |   |    



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##### Table of Contents

iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



|                                                      |  |           |   |  |                              |      |                                                   |     |                                       |   |    
|----------------------------------------------------- |  | --------- | - |  | ---------------------------- | ---- | ------------------------------------------------- | --- | ------------------------------------- | - | ---
|                                                      |  |           |   | 
|iGATE Global Solutions Stock Option Plan 1            |  | Options   |   |  | WeightedAverageExercisePrice |      | WeightedAverageRemainingContractualTerm(in years) |     | AggregateIntrinsic Value (inmillions)
|Options outstanding at December 31, 2005              |  | 1,492,634 |   |  | $                            | 3.11 |                                                   |     |                                       |   |    
|Granted                                               |  | 110,835   |   |  |                              | 5.71 |                                                   |     |                                       |   |    
|Exercised                                             |  | (21,000   | ) |  |                              | 2.48 |                                                   |     |                                       |   |    
|Lapsed and forfeited                                  |  | (17,975   | ) |  |                              | 3.31 |                                                   |     |                                       |   |    
|                                                      |  |           |   |  |                              |      |                                                   |     |                                       |   |    
|Options outstanding at March 31, 2006                 |  | 1,564,494 |   |  | $                            | 3.26 |                                                   | 7.5 |                                       | $ | 3.4
|                                                      |  |           |   |  |                              |      |                                                   |     |                                       |   |    
|Options vested and expected to vest at March 31, 2006 |  | 1,499,303 |   |  | $                            | 3.24 |                                                   | 7.7 |                                       | $ | 3.1
|                                                      |  |           |   |  |                              |      |                                                   |     |                                       |   |    
|Options exercisable at March 31, 2006                 |  | 907,323   |   |  | $                            | 2.91 |                                                   | 7.1 |                                       | $ | 2.3
|                                                      |  |           |   |  |                              |      |                                                   |     |                                       |   |    
|Available for future grant                            |  | 777,441   |   |  |                              |      |                                                   |     |                                       |   |    
|                                                      |  |           |   |  |                              |      |                                                   |     |                                       |   |    
|                                                      |  |           |   | 
|iGATE Global Solutions Stock Option Plan 2            |  | Options   |   |  | WeightedAverageExercisePrice |      | WeightedAverageRemainingContractualTerm(in years) |     | AggregateIntrinsic Value (inmillions)
|Options outstanding at December 31, 2005              |  | 2,962,234 |   |  | $                            | 4.86 |                                                   |     |                                       |   |    
|Granted                                               |  |          |   |  |                              |     |                                                   |     |                                       |   |    
|Exercised                                             |  | (1,878    | ) |  |                              | 4.71 |                                                   |     |                                       |   |    
|Lapsed and forfeited                                  |  | (205,159  | ) |  |                              | 4.75 |                                                   |     |                                       |   |    
|                                                      |  |           |   |  |                              |      |                                                   |     |                                       |   |    
|Options outstanding at March 31, 2006                 |  | 2,755,197 |   |  | $                            | 4.82 |                                                   | 8.6 |                                       | $ | 2.4
|                                                      |  |           |   |  |                              |      |                                                   |     |                                       |   |    
|Options vested and expected to vest at March 31, 2006 |  | 2,552,130 |   |  | $                            | 4.85 |                                                   | 8.9 |                                       | $ | 2.2
|                                                      |  |           |   |  |                              |      |                                                   |     |                                       |   |    
|Options exercisable at March 31, 2006                 |  | 708,146   |   |  | $                            | 5.77 |                                                   | 7.9 |                                       | $ | 0.1
|                                                      |  |           |   |  |                              |      |                                                   |     |                                       |   |    
|Available for future grant                            |  | 1,737,772 |   |  |                              |      |                                                   |     |                                       |   |    
|                                                      |  |           |   |  |                              |      |                                                   |     |                                       |   |    

3.    Derivative Instruments and Hedging Activities

Summarized below are derivative instruments consisting of foreign exchange contracts and a principal only SWAP agreement whose carrying values were
adjusted to their fair value at March 31, 2006. Fair values are based on quoted market prices at prevailing exchange rates and other available market information.



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##### Table of Contents

iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



LIST OF OUTSTANDING HEDGE TRANSACTIONS ON MARCH 31, 2006



|                          |  |                      |  |                                 |  |                        |             |        |               |                                              |   |      |  
|------------------------- |  | -------------------- |  | ------------------------------- |  | ---------------------- | ----------- | ------ | ------------- | -------------------------------------------- | - | ---- | -
|                          |  |                      |  |                                 |  | (Dollars in thousands) |            
|                          |  | Maturity Date Ranges |  | Strike Priceat Rupee RateRanges |  | Amount                 |             | Option |               | Net Unrealized Gains/(Losses) March 31, 2006 |  
|FORWARD CONTRACTS         |  |                      |  |                                 |  |                        |             |        |               |                                              |   |      |  
|From:                     |  | June 29, 2006        |  | 43.97                           |  |                        |             |        |               |                                              |   |      |  
|To:                       |  | August 31, 2006      |  | 44.00                           |  |                        |             |        |               |                                              |   |      |  
|                          |  |                      |  |                                 |  |                        |             |        |               |                                              |   |      |  
|Subtotal                  |  |                      |  |                                 |  | $                      | 6,000       |        |               |                                              | $ | (121 | )
|                          |  |                      |  |                                 |  |                        |             |        |               |                                              |   |      |  
|CURRENCY OPTION CONTRACTS |  |                      |  |                                 |  |                        |             |        |               |                                              |   |      |  
|From:                     |  | April 26, 2006       |  | 43.15                           |  | $                      | 11,000      |        | Buy/Sell Put  |                                              |   |      |  
|To:                       |  | December 29, 2006    |  | 44.77                           |  |                        | 15,500      |        | Buy/Sell Call |                                              |   |      |  
|                          |  |                      |  |                                 |  |                        |             |        |               |                                              |   |      |  
|Subtotal                  |  |                      |  |                                 |  | $                      | 26,500      |        |               |                                              | $ | (220 | )
|                          |  |                      |  |                                 |  |                        |             |        |               |                                              |   |      |  
|FAIR VALUE HEDGES         |  |                      |  |                                 |  |                        |             |        |               |                                              |   |      |  
|From:                     |  | April 28, 2006       |  | 44.10                           |  |                        |             |        |               |                                              |   |      |  
|To:                       |  | April 28, 2006       |  | 44.10                           |  |                        |             |        |               |                                              |   |      |  
|                          |  |                      |  |                                 |  |                        |             |        |               |                                              |   |      |  
|Subtotal                  |  |                      |  |                                 |  | $                      | 1,000       |        |               |                                              | $ | (15  | )
|                          |  |                      |  |                                 |  |                        |             |        |               |                                              |   |      |  
|PRINCIPAL SWAPS           |  |                      |  |                                 |  |                        |             |        |               |                                              |   |      |  
|                          |  | September 29, 2006   |  |                                 |  | $                      | 886 USD     |        |               |                                              | $ | (24  | )
|                          |  |                      |  |                                 |  |                        | 1,500 SGD   |        |               |                                              |   |      |  
|                          |  | September 29, 2006   |  |                                 |  | $                      | 601 USD     |        |               |                                              | $ | 6    |  
|                          |  |                      |  |                                 |  |                        | 500 EURO    |        |               |                                              |   |      |  
|                          |  | September 28, 2006   |  |                                 |  | $                      | 1,555 USD   |        |               |                                              | $ | 97   |  
|                          |  |                      |  |                                 |  |                        | 175,000 JPY |        |               |                                              |   |      |  
|                          |  | September 28, 2006   |  |                                 |  | $                      | 3,104 USD   |        |               |                                              | $ | 52   |  
|                          |  |                      |  |                                 |  |                        | 1,750 GBP   |        |               |                                              |   |      |  
|                          |  |                      |  |                                 |  |                        |             |        |               |                                              |   |      |  
|Subtotal                  |  |                      |  |                                 |  |                        |             |        |               |                                              | $ | 130  |  
|                          |  |                      |  |                                 |  |                        |             |        |               |                                              |   |      |  
|Total                     |  |                      |  |                                 |  |                        |             |        |               |                                              | $ | (226 | )
|                          |  |                      |  |                                 |  |                        |             |        |               |                                              |   |      |  

The net unrealized gains/(losses) were calculated using a Rupee exchange rate of 44.50.

As of March 31, 2006, our forward contracts to hedge intercompany cash flows will mature within one year from our 2005 fiscal
year-end. As each contract matures, iGS will receive Rupees at the contracted (strike price) rate while delivering the U.S. Dollar (USD) equivalent of Rupees at the prevailing Rupee exchange rate. Contracts that meet
qualifying criteria are accounted for as foreign currency cash flow hedges. Accordingly, the effective portion of gains and losses is deferred as a component of other comprehensive loss and is recognized in earnings at the time the hedged item
affects earnings. Any gains and losses due to hedge ineffectiveness or related to contracts which do not qualify for hedge accounting are recorded in current period earnings in other income and expense. At March 31, 2006 these forward contracts
did not meet qualifying criteria to receive hedge accounting and, as such, iGS appropriately recorded a liability for the net unrealized loss of $(0.1) million.

As of March 31, 2006, our option contracts to hedge intercompany cash flows will mature within one year from our 2005 fiscal year-end. As each contract matures and dependent upon prevailing Rupee exchange rates,



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iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



iGS will have the option to either buy USDs at each contracted put strike price or sell USDs at each contracted call strike price.
Contracts that meet qualifying criteria are accounted for as foreign currency cash flow hedges. Accordingly, the effective portion of gains and losses is deferred as a component of other comprehensive loss and is recognized in earnings at the time
the hedged item affects earnings. Any gains and losses due to hedge ineffectiveness or related to contracts which do not qualify for hedge accounting are recorded in current period earnings in other income and expense. At March 31, 2006 these
option contracts did not meet qualifying criteria to receive hedge accounting and, as such, iGS appropriately recorded a liability for the net unrealized loss of $(0.2) million.

As of March 31, 2006, all fair value hedges were deemed to be ineffective due to the lack of an underlying asset or transaction to be hedged. They
will expire in April 2006. At March 31, 2006, iGS recorded less than $0.1 million loss.

As of March 31, 2006, our principal
swaps to hedge intercompany debt from iGS to iGATE will mature within one year from our 2005 fiscal year-end. Contracts that meet qualifying criteria are accounted for as foreign currency cash flow hedges. Accordingly, the effective portion of gains
and losses is deferred as a component of other comprehensive loss and is recognized in earnings at the time the hedged item affects earnings. Any gains and losses due to hedge ineffectiveness or related to contracts which do not qualify for hedge
accounting are recorded in current period earnings in other income and expense. At March 31, 2006, the principal swaps to hedge intercompany debt did not meet qualifying criteria to receive hedge accounting and iGS appropriately recorded the
assets for the net unrealized gain of $0.1 million as Other Income.

4.    Goodwill and Other Intangible Assets

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



|                                    |  |                |       |   |                           |   |                |  |              |     |  |   |       |  
|----------------------------------- |  | -------------- | ----- | - | ------------------------- | - | -------------- |  | ------------ | --- |  | - | ----- | -
|                                    |  | iGATESolutions |       |   | iGATEProfessionalServices |   | iGATECorporate |  | Consolidated |    
|Goodwill at December 31, 2004       |  | $              | 8,609 |   |                           | $ | 216            |  | $            | 573 |  | $ | 9,398 |  
|Foreign currency translation effect |  |                | (547  | ) |                           |   |               |  |              |    |  |   | (547  | )
|                                    |  |                |       |   |                           |   |                |  |              |     |  |   |       |  
|Goodwill at December 31, 2005       |  |                | 8,062 |   |                           |   | 216            |  |              | 573 |  |   | 8,851 |  
|Foreign currency translation effect |  |                | 124   |   |                           |   |               |  |              |    |  |   | 124   |  
|                                    |  |                |       |   |                           |   |                |  |              |     |  |   |       |  
|Goodwill at March 31, 2006          |  | $              | 8,186 |   |                           | $ | 216            |  | $            | 573 |  | $ | 8,975 |  
|                                    |  |                |       |   |                           |   |                |  |              |     |  |   |       |  

The gross amounts and accumulated amortization of intangible assets are as follows:



|                               |  |                |       |                         |   |             |  |                         |       |  |   |      
|------------------------------ |  | -------------- | ----- | ----------------------- | - | ----------- |  | ----------------------- | ----- |  | - | -----
|                               |  | March 31, 2006 |       | December 31, 2005      
|                               |  | GrossAmount    |       | AccumulatedAmortization |   | GrossAmount |  | AccumulatedAmortization
|                               |  | (unaudited)    |       |                         |   |            
|Amortizable intangible assets: |  |                |       |                         |   |             |  |                         |       |  |   |      
|Intellectual property          |  | $              | 570   |                         | $ | 482         |  | $                       | 570   |  | $ | 437  
|Customer relationships         |  |                | 6,642 |                         |   | 4,286       |  |                         | 6,642 |  |   | 3,882
|Employment contracts           |  |                | 1,720 |                         |   | 1,199       |  |                         | 1,720 |  |   | 1,105
|Other                          |  |                | 314   |                         |   | 283         |  |                         | 314   |  |   | 257  
|                               |  |                |       |                         |   |             |  |                         |       |  |   |      
|Total                          |  | $              | 9,246 |                         | $ | 6,250       |  | $                       | 9,246 |  | $ | 5,681
|                               |  |                |       |                         |   |             |  |                         |       |  |   |      



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iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Amortization expense related to identifiable intangible assets was $0.6 million for each of the three
month periods ended March 31, 2006 and 2005. Estimated annual amortization expense for the years ended December 31, 2006 through December 31, 2009 is shown below:



|                  |  |   |      
|----------------- |  | - | -----
|Remainder of 2006 |  | $ | 1,050
|2007              |  | $ | 943  
|2008              |  | $ | 694  
|2009              |  | $ | 309  

5.    Investments and Restricted Investments

The Company has short-term investments consisting of money market funds and corporate bonds that totaled $31.1 million and $30.8 million at March 31,
2006 and December 31, 2005, respectively. Approximately $6.1 million and $5.8 million of these funds at March 31, 2006 and December 31, 2005, respectively, are to be used exclusively by iGS due to Indian governmental restrictions. The
Company had compensating balances classified on the Condensed Consolidated Balance Sheet as short-term investments, which consisted of money market funds totaling $25.0 million at March 31, 2006 and December 31, 2005. The availability of
short-term lines of credit is dependent upon maintenance of such compensating balances.

6.    Restructuring and Merger Charges

The following table details restructuring by year implemented. Please refer to Note 6 in the Companys Form 10-K for further
discussion of its restructurings. The components of the restructurings and the related charges and restructuring accrual at December 31, 2005 and March 31, 2006 are as follows (in thousands):



|                                   |  |                         |       |                                  |   |                  |  |   |                      |   |  |   |      
|---------------------------------- |  | ----------------------- | ----- | -------------------------------- | - | ---------------- |  | - | -------------------- | - |  | - | -----
|                                   |  | AccruedDecember 31,2005 |       | ForeignCurrencyTranslationEffect |   | CashExpenditures |  |   | AccruedMarch 31,2006
|2004 lease costs of office closure |  | $                       | 3,859 |                                  | $ | 79               |  | $ | (964                 | ) |  | $ | 2,974
|2002 lease costs of office closure |  |                         | 68    |                                  |   |                 |  |   | (8                   | ) |  |   | 60   
|2001 lease costs of office closure |  |                         | 850   |                                  |   |                 |  |   |                     |   |  |   | 850  
|                                   |  |                         |       |                                  |   |                  |  |   |                      |   |  |   |      
|Total                              |  | $                       | 4,777 |                                  | $ | 79               |  | $ | (972                 | ) |  | $ | 3,884
|                                   |  |                         |       |                                  |   |                  |  |   |                      |   |  |   |      

7.    PNC Credit Facility

On September 14, 2005, the Company renewed its credit facility (Renewed Facility) with PNC Bank N.A. (PNC) for 365 days. The
Renewed Facility provides a maximum loan amount of $25.0 million and is secured entirely by the Companys cash, cash equivalents and short-term investments. The availability of borrowings under the Renewed Facility has a one-to-one relationship
with available cash secured by the Company. The provisions of the Renewed Facility requires the Company to maintain unrestricted cash and cash equivalents of at least $30.0 million and maintain tangible net worth of at least $88.0 million. The
Company had no outstanding borrowings under the credit facility. The Company had letters of credit outstanding in the amount of $0.4 million and $0.3 million on the Renewed Facility as of March 31, 2006 and 2005, respectively.



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iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



8.    Income Taxes

Income (loss) before income taxes, as shown in the accompanying condensed consolidated statements of operations, consisted of the following for the three
months ended March 31, 2006 and 2005, respectively:



|                                   |  |                             |       |      |   |        |  
|---------------------------------- |  | --------------------------- | ----- | ---- | - | ------ | -
|                                   |  | Three Months EndedMarch 31, |      
|                                   |  | 2006                        |       | 2005 |  
|                                   |  | (Dollars in thousands)      |      
|Income (loss) before income taxes: |  |                             |       |      |   |        |  
|Domestic                           |  | $                           | 418   |      | $ | (1,225 | )
|Foreign                            |  |                             | 1,233 |      |   | 706    |  
|                                   |  |                             |       |      |   |        |  
|Income (loss) before income taxes  |  | $                           | 1,651 |      | $ | (519   | )
|                                   |  |                             |       |      |   |        |  

Taxes (benefit) on income (loss), as shown in the accompanying condensed consolidated statements
of operations, consisted of the following for the three months ended March 31, 2006 and 2005, respectively:



|                                           |  |                             |     |   |      |   |        |  
|------------------------------------------ |  | --------------------------- | --- | - | ---- | - | ------ | -
|                                           |  | Three Months EndedMarch 31, |    
|                                           |  | 2006                        |     |   | 2005 |  
|                                           |  | (Dollars in thousands)      |    
|Current provision (benefit):               |  |                             |     |   |      |   |        |  
|Federal                                    |  | $                           | 220 |   |      | $ | (1,861 | )
|State                                      |  |                             | 81  |   |      |   | 107    |  
|Foreign                                    |  |                             | 61  |   |      |   | 546    |  
|                                           |  |                             |     |   |      |   |        |  
|Total current provision (benefit)          |  |                             | 362 |   |      |   | (1,208 | )
|                                           |  |                             |     |   |      |   |        |  
|Deferred provision (benefit):              |  |                             |     |   |      |   |        |  
|Federal                                    |  |                             | 209 |   |      |   | (538   | )
|State                                      |  |                             | (76 | ) |      |   | (77    | )
|Foreign                                    |  |                             | 15  |   |      |   | (130   | )
|Valuation allowance                        |  |                             | 58  |   |      |   | 90     |  
|                                           |  |                             |     |   |      |   |        |  
|Total deferred provision (benefit)         |  |                             | 206 |   |      |   | (655   | )
|                                           |  |                             |     |   |      |   |        |  
|Total provision (benefit) for income taxes |  | $                           | 568 |   |      | $ | (1,863 | )
|                                           |  |                             |     |   |      |   |        |  



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iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



The reconciliation of income taxes (benefit) computed using the statutory U.S. income tax rate and
the provision for income taxes (benefit) for the three months ended March 31, 2006 and 2005, respectively were as follows (in thousands):



|                                                    |  |                                 |      |   |                                 |       |   |  |   |        |   |  |       |  
|--------------------------------------------------- |  | ------------------------------- | ---- | - | ------------------------------- | ----- | - |  | - | ------ | - |  | ----- | -
|                                                    |  | Three Months EndedMarch 31,2006 |      |   | Three Months EndedMarch 31,2005 |      
|Income taxes computed at the federal statutory rate |  | $                               | 578  |   |                                 | 35.0  | % |  | $ | (182   | ) |  | 35.0  | %
|State income taxes, net of federal tax benefit      |  |                                 | 69   |   |                                 | 4.2   |   |  |   | 42     |   |  | (8.1  | )
|Foreign taxes at other than U.S. statutory rate     |  |                                 | (356 | ) |                                 | (21.6 | ) |  |   | 338    |   |  | (65.1 | )
|Reversal of prior year accrued taxes                |  |                                 |     |   |                                 |      |   |  |   | (2,200 | ) |  | 423.9 |  
|Minority interest                                   |  |                                 | 51   |   |                                 | 3.1   |   |  |   | 88     |   |  | (17.0 | )
|Nondeductible goodwill                              |  |                                 | 26   |   |                                 | 1.6   |   |  |   | 87     |   |  | (16.8 | )
|Nondeductible compensation                          |  |                                 | 35   |   |                                 | 2.1   |   |  |   | 63     |   |  | (12.1 | )
|Capital losses in investments                       |  |                                 |     |   |                                 |      |   |  |   | 23     |   |  | (4.4  | )
|Other  net                                         |  |                                 | 107  |   |                                 | 6.5   |   |  |   | (212   | ) |  | 40.8  |  
|Valuation allowance                                 |  |                                 | 58   |   |                                 | 3.5   |   |  |   | 90     |   |  | (17.3 | )
|                                                    |  |                                 |      |   |                                 |       |   |  |   |        |   |  |       |  
|                                                    |  | $                               | 568  |   |                                 | 34.4  | % |  | $ | (1,863 | ) |  | 358.9 | %
|                                                    |  |                                 |      |   |                                 |       |   |  |   |        |   |  |       |  

Under the Indian Income Tax Act, 1961, the Companys Indian subsidiary is eligible to claim a
tax holiday for ten consecutive assessment years on profits derived from the export of software services from divisions registered under the Software Technology Parks at Bangalore, Chennai, and Pune. For the three months ended March 31, 2006
and 2005, the tax holiday resulted in benefits of $0.4 million and $0.2 million, respectively when calculated at the statutory U.S. rate. The majority of the benefits of the holiday will extend through 2009.

On April 11, 2005, the Joint Committee on Taxation advised that the Internal Revenue Service examination of the Companys income tax returns
for the years 1999, 2000 and 2001 had been completed. As a result, the Company reversed certain tax accruals recorded during the years under review of approximately $2.2 million.

9.    Earnings Per Share

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



|                                                           |  |                             |        |      |   |       
|---------------------------------------------------------- |  | --------------------------- | ------ | ---- | - | ------
|                                                           |  | Three Months EndedMarch 31,
|                                                           |  | 2006                        |        | 2005
|                                                           |  | (unaudited)                
|Basic income per share:                                    |  |                             |        |      |   |       
|Net income                                                 |  | $                           | 1,083  |      | $ | 1,344 
|                                                           |  |                             |        |      |   |       
|Divided by:                                                |  |                             |        |      |   |       
|Weighted average common shares                             |  |                             | 52,841 |      |   | 52,479
|                                                           |  |                             |        |      |   |       
|Net earnings per common share, Basic                       |  | $                           | 0.02   |      | $ | 0.03  
|                                                           |  |                             |        |      |   |       
|Diluted earnings per share:                                |  |                             |        |      |   |       
|Net income                                                 |  | $                           | 1,083  |      | $ | 1,344 
|                                                           |  |                             |        |      |   |       
|Divided by:                                                |  |                             |        |      |   |       
|Weighted average common shares                             |  |                             | 52,841 |      |   | 52,479
|Dilutive effect of restricted and common stock equivalents |  |                             | 310    |      |   | 244   
|                                                           |  |                             |        |      |   |       
|Dilutive average common shares                             |  |                             | 53,151 |      |   | 52,723
|                                                           |  |                             |        |      |   |       
|Net earnings per common share, Diluted                     |  | $                           | 0.02   |      | $ | 0.03  
|                                                           |  |                             |        |      |   |       



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iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



The number of outstanding options to purchase common shares for which the option exercise prices
exceeded the average market price of the common shares aggregated 0.9 million shares and 1.1 million shares for the three months ended March 31, 2006 and 2005, respectively. These options were excluded from the computation of diluted
earnings per share under the treasury stock method.

10.    Segment Information

The Companys reportable segments are iGATE Solutions, iPS and iGATE Corporate (iGATE). No operating segments have been aggregated.
Effective January 1, 2006, the Company recast its segments to include the operations of jobcurry Systems Private Ltd. (jobcurry) as part of iGATE Professional Services (iPS) segment. jobcurry provides recruiting and
placement services for iGATE and outside customers. Previously, jobcurry was included in the iGATE segment. All prior periods have been reclassified to reflect the change to our segment reporting. The Company sold its Canadian staffing operations on
November 15, 2005. Its Canadian staffing operations were included as part of iPS for the three months ended March 31, 2005. Canada was not deemed to be a material disposition and as such the Company was not required to provide pro-forma
disclosure.

iGATE Solutions

The iGATE Solutions segments services offerings include offshore outsourcing of IT and BPO service and IT systems maintenance. Other offerings include enterprise applications implementation and related custom development of
applications such as Oracle, SAP and PeopleSoft. The segment also offers application maintenance outsourcing, business intelligence services and data management and application re-engineering through its offshore development centers
(ODCs), which deliver services offshore in India.

iGATE Solutions has ODCs located in Bangalore, Hydrabad, Chennai, Delhi, and
Pune, India and Wuxi, China. iGS has global development centers (GDCs) located in Canada and the U.S. The GDCs can deliver both near shore (work performed primarily at the client site) and offshore services (work
performed primarily in India) dependent upon customer location and expectations. iGATE Solutions operates in India, Canada, the U.S., Europe, Singapore, Malaysia, Japan, China and Australia.

iGATE Professional Services (iPS)

The iPS segments service offerings include a variety of client-managed and supervised IT staffing service offerings, which include enterprise resource package implementation and integration, application support services and client
directed software design and customization. The iPS segment also offers training as a service to its customers. The iPS segment includes the operations of jobcurry for periods presented.

The iPS segment services the U.S. and India through jobcurry.

iGATE Corporate (iGATE)

In 2006 and 2005, iGATE Corporate includes the operations of
iGATE Clinical Research International Inc. and iGATE Clinical Research International Private Ltd., corporate and other unallocated costs.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company evaluates segment performance based upon profit or loss from operations. The Company does not allocate
income taxes, other income or expense and non-recurring charges to segments. In addition, the Company accounts for inter-segment sales and transfers at current market prices. All inter-segment sales have been eliminated in consolidation.



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##### Table of Contents

iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



The following tables present selected financial information for the Companys reporting segments
for the quarters ended March 31, 2006 and 2005:



|                                         |  |                                   |        |                           |   |                    |  |   |        |   |  |   |        |  
|---------------------------------------- |  | --------------------------------- | ------ | ------------------------- | - | ------------------ |  | - | ------ | - |  | - | ------ | -
|                                         |  | Three Months Ended March 31, 2006 |       
|                                         |  | iGATESolutions                    |        | iGATEProfessionalServices |   | iGATE Corporate(1) |  |   | Total  |  
|                                         |  | (Dollars in thousands)            |       
|External revenues                        |  | $                                 | 38,258 |                           | $ | 29,007             |  | $ | 431    |   |  | $ | 67,696 |  
|                                         |  |                                   |        |                           |   |                    |  |   |        |   |  |   |        |  
|Income (loss) from operations            |  | $                                 | 64     |                           | $ | 2,754              |  |   | (2,518 | ) |  |   | 300    |  
|                                         |  |                                   |        |                           |   |                    |  |   |        |   |  |   |        |  
|Other income, net                        |  |                                   |        |                           |   |                    |  |   | 1,431  |   |  |   | 1,431  |  
|Minority interest                        |  |                                   |        |                           |   |                    |  |   | (145   | ) |  |   | (145   | )
|Equity in income of affiliated companies |  |                                   |        |                           |   |                    |  |   | 65     |   |  |   | 65     |  
|                                         |  |                                   |        |                           |   |                    |  |   |        |   |  |   |        |  
|(Loss) income before income taxes        |  |                                   |        |                           |   |                    |  | $ | (1,167 | ) |  | $ | 1,651  |  
|                                         |  |                                   |        |                           |   |                    |  |   |        |   |  |   |        |  



|                                         |  |                                   |        |                           |   |                    |  |   |        |   |  |   |        |  
|---------------------------------------- |  | --------------------------------- | ------ | ------------------------- | - | ------------------ |  | - | ------ | - |  | - | ------ | -
|                                         |  | Three Months Ended March 31, 2005 |       
|                                         |  | iGATESolutions                    |        | iGATEProfessionalServices |   | iGATE Corporate(1) |  |   | Total  |  
|                                         |  | (Dollars in thousands)            |       
|External revenues                        |  | $                                 | 32,711 |                           | $ | 36,716             |  | $ | 174    |   |  | $ | 69,601 |  
|                                         |  |                                   |        |                           |   |                    |  |   |        |   |  |   |        |  
|Income (loss) from operations            |  | $                                 | 241    |                           | $ | 2,897              |  |   | (3,170 | ) |  |   | (32    | )
|                                         |  |                                   |        |                           |   |                    |  |   |        |   |  |   |        |  
|Other expense, net                       |  |                                   |        |                           |   |                    |  |   | (286   | ) |  |   | (286   | )
|Minority interest                        |  |                                   |        |                           |   |                    |  |   | (84    | ) |  |   | (84    | )
|Equity in losses of affiliated companies |  |                                   |        |                           |   |                    |  |   | (117   | ) |  |   | (117   | )
|                                         |  |                                   |        |                           |   |                    |  |   |        |   |  |   |        |  
|Loss before income taxes                 |  |                                   |        |                           |   |                    |  | $ | (3,657 | ) |  | $ | (519   | )
|                                         |  |                                   |        |                           |   |                    |  |   |        |   |  |   |        |  

---

|(1) | Corporate activities include general corporate expenses, interest income and expense, equity in losses of unconsolidated affiliates, minority interest, loss from joint ventures,
restructuring charges and merger related expenses not identified to a specific segment, and other unallocated charges. The Company evaluates segments based on income (loss) from operations. Since certain administrative and other operating expenses
or income sources have not been allocated to the operating business segments, this basis is not necessarily a measure computed in accordance with generally accepted accounting principles and it may not be comparable to other companies.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Assets by segment were as follows:



|                            |  |                        |         |                  |   |        
|--------------------------- |  | ---------------------- | ------- | ---------------- | - | -------
|                            |  | March 31,2006          |         | December 31,2005
|                            |  | (Dollars in thousands)
|iGATE Solutions             |  | $                      | 95,354  |                  | $ | 95,010 
|iGATE Professional Services |  |                        | 19,888  |                  |   | 21,368 
|iGATE Corporate             |  |                        | 60,427  |                  |   | 61,096 
|                            |  |                        |         |                  |   |        
|Total assets                |  | $                      | 175,669 |                  | $ | 177,474
|                            |  |                        |         |                  |   |        



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iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Revenue and assets by geographic area consisted of the following:



|                                |  |                             |        |                  |   |       
|------------------------------- |  | --------------------------- | ------ | ---------------- | - | ------
|                                |  | Three Months EndedMarch 31,
|                                |  | 2006                        |        | 2005            
|                                |  | (Dollars in thousands)     
|Revenues:                       |  |                             |        |                  |   |       
|North America, principally U.S. |  | $                           | 57,754 |                  | $ | 59,326
|Europe                          |  |                             | 4,362  |                  |   | 5,208 
|Pacific Rim, principally India  |  |                             | 5,580  |                  |   | 5,067 
|                                |  |                             |        |                  |   |       
|Total revenues                  |  | $                           | 67,696 |                  | $ | 69,601
|                                |  |                             |        |                  |   |       
|                                |  |                            
|                                |  | March 31,2006               |        | December 31,2005
|                                |  | (Dollars in thousands)     
|Tangible long-term assets:      |  |                             |        |                  |   |       
|North America, principally U.S. |  | $                           | 1,390  |                  | $ | 1,610 
|Europe                          |  |                             | 152    |                  |   | 176   
|Pacific Rim, principally India  |  |                             | 27,559 |                  |   | 26,753
|                                |  |                             |        |                  |   |       
|Total tangible long-term assets |  | $                           | 29,101 |                  | $ | 28,539
|                                |  |                             |        |                  |   |       

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



|                                      |  |                             |   |  |      |  
|------------------------------------- |  | --------------------------- | - |  | ---- | -
|                                      |  | Three Months EndedMarch 31, |  
|                                      |  | 2006                        |   |  | 2005 |  
|General Electric Company              |  |                             |   |  |      |  
|iGATE Solutions                       |  | 34                          | % |  | 35   | %
|iGATE Consolidated                    |  | 20                          | % |  | 17   | %
|Chimes, Inc.                          |  |                             |   |  |      |  
|iGATE Professional Services           |  | 12                          | % |  |     |  
|TEK Systems                           |  |                             |   |  |      |  
|iGATE Professional Services           |  | 11                          | % |  |     |  
|Bearingpoint, Inc.                    |  |                             |   |  |      |  
|iGATE Professional Services           |  | 11                          | % |  |     |  
|International Business Machines Corp. |  |                             |   |  |      |  
|iGATE Professional Services           |  | 11                          | % |  | 23   | %
|iGATE Consolidated                    |  |                            |   |  | 12   | %
|Wachovia Corporation                  |  |                             |   |  |      |  
|iGATE Professional Services           |  |                            |   |  | 17   | %



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iGATE CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)



11.    Subsequent Events

On April 24, 2006, iGS entered into a Master Services Agreement with LoanPro LLC (LoanPro) to perform offshore mortgage servicing. In
conjunction with the agreement, iGS acquired a 5% ownership interest in LoanPro for a nominal amount with the option to acquire up to an additional 55% of LoanPro beginning on July 1, 2006. The option expires on December 31, 2006. In
conjunction with its 5% ownership interest, iGS has agreed to loan up to $0.8 million to LoanPro as evidenced by promissory notes (the notes) executed on the same date. The notes pay 6% interest and are payable in 2009. iGS funded $0.8
million to LoanPro through May 5, 2006.

The Company is currently assessing the impact of the transaction for accounting purposes.



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

Some of the statements in this Form 10-Q contains statements that are not historical facts and that constitute forward-looking statements
within the meaning of such term under the Private Securities Litigation Reform Act of 1995. These forward-looking statements include our financial growth and liquidity projections as well as statements concerning our plans, strategies, intentions
and beliefs concerning our business, cash flows, costs and the markets in which we operate. Without limiting the foregoing, the words believes, anticipates, plans, expects and similar expressions are
intended to identify certain forward-looking statements. These forward-looking statements are based on information currently available to us, and we assume no obligation to update these statements as circumstances change. There are risks and
uncertainties that could cause actual events to differ materially from these forward-looking statements. While we cannot predict all of the risks and uncertainties, they include, but are not limited to, our ability to predict our financial
performance, the level of market demand for our services, the highly-competitive market for the types of services that we offer, the impact of competitive factors on profit margins, market conditions that could cause our customers to reduce their
spending for our services, our ability to create, acquire and build new businesses and 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, 2005.

Unless otherwise indicated or the context otherwise requires, all references in this report to iGATE, the Company, us, our, or we are to iGATE Corporation, a
Pennsylvania corporation, and its consolidated subsidiaries. iGATE Corporation, formerly named iGATE Capital Corporation, through its operating subsidiaries, is a worldwide provider of Information Technology (IT) and offshore outsourcing
Services to large and medium-sized organizations. These services include client/server design and development, conversion/migration services, offshore outsourcing, enterprise resource planning (ERP) package implementation and integration
services, software development and applications maintenance outsourcing.

Website Access to SEC Reports

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

Business Overview

The use
of offshore outsourcing for Information Technology and Business Process Outsourcing services (BPO) has emerged as a global trend in numerous countries and industries. Our clients recognize that offshore outsourcing is a very effective
way to provide high quality, timely and cost-effective IT and BPO services. We have developed an integrated technology and operation (iTOPs) model, whereby the service partner, we are responsible for the outsourced business process and
the underlying technology components.

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

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



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##### Table of Contents

centers, clinical trials management and mortgage and claims processing. We may continue to expand our BPO service offerings through acquisitions and
strategic relationships and internal initiatives. We believe that such services can be or are being performed offshore, at savings as high as 50% over U.S. labor and infrastructure costs.

The iPS segment provides a variety of client-managed and supervised IT staffing services. These service offerings include design, development and
maintenance of custom applications as well as implementation, integration and support of enterprise packaged applications such as ERP and customer relationship management (CRM) software provided by third party vendors such as SAP,
Oracle, PeopleSoft and Siebel.

Business Developments

On April 24, 2006, iGS entered into a Master Services Agreement with LoanPro LLC (LoanPro) to perform offshore mortgage servicing. In conjunction with the agreement, iGS acquired a 5% ownership
interest in LoanPro for a nominal amount with the option to acquire up to an additional 55% of LoanPro beginning on July 1, 2006. The option expires on December 31, 2006. In conjunction with its 5% ownership interest, iGS has agreed to
loan up to $0.8 million to LoanPro as evidenced by promissory notes (the notes) executed on the same date. The notes pay 6% interest and are payable in 2009. iGS funded $0.8 million to LoanPro through May 5, 2006.

Reportable Financial Segments

We segment our
business according to our service offerings. Our approach reflects the way we and our chief operating decision makers analyze and manage our businesses. The composition of segments and measure of segment profitability is consistent with that used by
our management. Please refer to Note 16 to our consolidated financial statements which details the financial results of each principal business segment as well as revenues and assets by geographic region.

Effective January 1, 2006, we recast our segments to include the operations of jobcurry Systems Private Ltd. (jobcurry) as part of iGATE
Professional Services (iPS) segment. jobcurry provides recruiting and placement services for iGATE and outside customers. Previously, jobcurry was included in the iGATE Corporate (iGATE) segment. All prior periods have been
reclassified to reflect the change to our segment reporting.

The following are brief descriptions of each of our segments.

iGATE Solutions

The iGATE Solutions
segments (iGATE Solutions) service offerings include outsourcing of IT and BPO services using an onsite / offshore delivery model. This delivery model helps clients achieve greater cost effectiveness.

IT services offered include enterprise data management and data warehousing, business intelligence and analytics, design, development, system
integration, package evaluation and implementation, re-engineering and maintenance.

BPO services offered include call center services and
transaction processing services. The call center services are offered to clients across all industries and are not industry specific. The transaction processing services offered are focused on the mortgage banking, insurance and capital market
industries, except for the delivery of finance and accounting functions  such as accounts payable  which can be performed for clients across all industries.



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As we discussed earlier, iGATE Solutions also recently started to offer a combination of IT and BPO
services through its innovative Integrated Technology and Operations (ITOPs) service offering. These services optimize a clients process and technology, through the use of iGATE Solutions proprietary tools and business
accelerators and the delivery of the process from offshore. Clients are expected to benefit from this innovative business model through more efficient processes and labor arbitrage.

iGATE Solutions has offshore development centers (ODCs) located in Bangalore, Hyderabad, Chennai, Delhi, and Pune, India and Wuxi, China.
iGATE Solutions has global development centers (GDCs) located in Canada 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 Solutions operates in India, Canada, the U.S., Europe, Singapore, Malaysia, Japan and Australia.

The
iGATE Solutions segment revenues are derived through iGATE Global Solutions Limited (iGS), our publicly-held Indian subsidiary. Our iGATE Solutions segment has approximately 5,150 employees.

The majority of our clients in the iGATE Solutions segment have headquarters in the U.S. and operations throughout the world. We believe our ODCs and
GDCs are strategically located in order to service any client regardless of size, scale or geographic location.

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

The iGATE Solutions segment services customers in a wide range of industries. The segments largest customer is General Electric
Company (GE) which accounted for 34%, and 35% of its revenues for the three months ended March 31, 2006 and 2005, respectively. iGS is a Global Preferred Partner of GE. Its Global Preferred Partnership status extends through the end
of 2006.

iGATE Professional Services (iPS)

The iPS segment provides a variety of client-managed and supervised IT staffing services. These service offerings include design, development and
maintenance of custom applications as well as implementation, integration and support of enterprise packaged applications such as ERP and customer relationship management (CRM) software provided by third party vendors such as SAP,
Oracle, PeopleSoft and Siebel.

The iPS segment markets its services to application development managers and information technology
directors within prospective customers companies. The iPS segment also responds to requests for proposals in order to obtain preferred vendor status to secure long-term engagement relationships. iPS contracts provide for payments on a
time-and-materials basis, based on the number of consultant hours worked on the project. Clients typically have the right to cancel contracts with minimal notice.

The iPS segment serves a wide variety of customers in numerous industries in the U.S. and in India through jobcurry. For the three months ended March 31, 2006, Chimes, Inc., TEK Systems, Bearingpoint, Inc. and
International Business Machines Corp. (IBM) accounted for 12%, 11%, 11% and 11% of iPS revenues, respectively. As a result of the sale of our Canadian staffing operations in November 2005, iPS revenues declined which resulted in more
customers having a greater than 10% concentration of our staffing operations revenues for the three months ended March 31, 2006. In 2005, IBM and Wachovia Bank, accounted for approximately 23% and 17% of iPS revenues for the three months ended
March 31, 2005. iPS has approximately 1,060 employees.



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We sold our Canadian staffing operations on November 15, 2005. The Canadian staffing operations were
included as part of iPS for the three months ended March 31, 2005. The sale of our Canadian staffing operations was not deemed to be a material disposition and as such we were not required to provide pro-forma disclosure.

iGATE Corporate (iGATE)

The iGATE Corporate segment includes the operations iGATE Clinical Research International Inc., formerly known as iGATE Clinical Research Management, Inc. , iGATE Clinical Research International Private Ltd., corporate and other unallocated
costs. iGATE Clinical Research International Inc. and iGATE Clinical Research International Private Ltd. contract with pharmaceutical companies to conduct clinical trials on their behalf. iGATE Clinical Research International Private Ltd. performs
offshore clinical trials. These entities are excluded from the above segments due largely to their dissimilar service offerings and certain economic characteristics. This segment has approximately 70 employees.

Accounting Policies

The accounting policies of the
segments are the same as those described in the summary of significant accounting policies in Note 1 to the notes to the consolidated financial statements. We evaluate segment performance based upon profit or loss from operations. We do not allocate
income taxes, other income or expense, equity in losses of affiliated companies, minority interest, loss on venture investments and affiliated companies, gain on sale of stock of subsidiaries and gain on deconsolidation of subsidiaries to segments.
In addition, we account for inter-segment sales and transfers at current market prices. All inter-segment sales have been eliminated in consolidation.

Critical Accounting Policies

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

Stock Based Compensation

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

Effective January 1, 2006, the Company adopted the provisions of SFAS No. 123 (R) using the modified prospective transition method. Under
this transition method, the compensation cost recognized beginning January 1, 2006 includes compensation cost for (i) all share-based payments granted prior to, but not yet vested as of January 1, 2006, based on the grant-date fair
value estimated in accordance with the original provisions of SFAS No. 123, and (ii) all share-based payments granted subsequent to December 31, 2005 based on the grant-date fair value estimated in accordance with the provisions of
SFAS No. 123 (R). Compensation cost is generally recognized ratably over the requisite service period or the retirement date for retirement eligible employees, if earlier. Prior period amounts have not been restated.

As a result of the adoption of SFAS No. 123 (R), the Companys results for the quarter ended March 31, 2006 include share-based
compensation expense of $0.9 million. The total stock-based compensation cost has been included in the Consolidated Statements of Income within direct costs of $0.4 million and selling, general and administrative expenses of $0.5 million . The
Company has recognized a related tax benefit associated with its share-based compensation arrangements totaling less than $0.1 million.



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Prior to January 1, 2006, the Company accounted for stock-based compensation plans in accordance
with the provisions of APB Opinion No. 25, as permitted by SFAS No. 123, and accordingly did not recognize compensation expense for the issuance of options with an exercise price equal to or greater than the market price at the date of
grant. The Company did recognize $0.2 million of compensation expense for the three months ended March 31, 2005 related to a restricted stock grant and discounted stock options. Had the fair value based method as prescribed by SFAS No. 123
been applied by iGATE, the effect on net income and earnings per share for the first quarter of 2005 would have been as follows ($ in thousands, except per share data):



|                                                                                                                                          |  |                                  |       |  
|----------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------- | ----- | -
|                                                                                                                                          |  | Three Months EndedMarch 31, 2005 |      
|Net income, as reported (including $0.2 million of stock compensation expense recognized)                                                 |  | $                                | 1,344 |  
|Less: Total stock-based employee compensation expense determined under fair value method for all awards and deferred compensation
expense |  |                                  | (312  | )
|                                                                                                                                          |  |                                  |       |  
|Proforma net income                                                                                                                       |  | $                                | 1,032 |  
|                                                                                                                                          |  |                                  |       |  
|Earnings per share:                                                                                                                       |  |                                  |       |  
|Basic  as reported                                                                                                                       |  | $                                | 0.03  |  
|                                                                                                                                          |  |                                  |       |  
|Basic  Proforma                                                                                                                          |  | $                                | 0.02  |  
|                                                                                                                                          |  |                                  |       |  
|Diluted  as reported                                                                                                                     |  | $                                | 0.03  |  
|                                                                                                                                          |  |                                  |       |  
|Diluted  Proforma                                                                                                                        |  | $                                | 0.02  |  
|                                                                                                                                          |  |                                  |       |  

iGATE Corporation Stock Option Plans

During 2000, the Company adopted the Second Amended and Restated Stock Incentive Plan (the Plan). The Plan provides that up to
14.7 million shares of the Companys Common Stock shall be allocated for issuance to directors, executive management and key personnel. At December 31, 2005, there were 10.2 million shares of Common Stock available for issuance
under the Plan. In addition, the Companys iGS subsidiary also maintains its own stock option plans. iGS stock option plans were approved by its Boards of Directors in 2000. The Company accounts for the Plan and its subsidiaries
stock option plans under Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees.

iGS Stock
Option Plans

The Companys majority-owned subsidiary, iGS maintains two (2) employee stock option plans herein referred
to as Plan 1 and Plan 2. The Plans are administered by a committee appointed by the Board of Directors of iGS. Plan 1 provides for the issuance of a maximum of 3.0 million shares of iGS common stock and Plan 2 provides for
the issuance of a maximum of 4.5 million shares of iGS common stock. Options are typically granted at the prevailing market values for each of the Plans.

Options for each of the above Plans generally expire ten years from the date of grant or earlier if an option holder ceases to be employed or associated by the Company for any reason.

The fair value of each option grant is estimated using the Black-Scholes option pricing model. The fair value is then amortized on a straight-line basis
over the requisite service periods of the awards, which is generally the vesting period. Use of a valuation model requires management to make certain assumptions with respect to selected model inputs. Expected volatility was calculated based on the
historical volatility of the Companys stock and implied volatility derived from exchange traded options. The average expected life was based on the contractual term of the option and expected employee exercise and post-vesting employment
termination behavior. The risk-free interest rate for iGATEs Plan is based on U.S. Treasury zero-coupon issues



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with a remaining term equal to the expected life assumed at the date of grant. The risk-free rate for each of the iGS Plans is based on an equivalent Indian
risk-free rate. Forfeitures are estimated based on voluntary termination behavior, as well as an analysis of actual option forfeitures. The weighted-average assumptions used in the Black-Scholes option pricing model are as follows:



|                               |  |                             |           |   |                             |   |         |       |  |   |                      |   |  |   |         |  
|------------------------------ |  | --------------------------- | --------- | - | --------------------------- | - | ------- | ----- |  | - | -------------------- | - |  | - | ------- | -
|                               |  | Quarter EndedMarch 31, 2006 |           |   | Quarter EndedMarch 31, 2005 |  
|                               |  | iGATE                       |           |   | iGATEGlobalSolutions        |   |         | iGATE |  |   | iGATEGlobalSolutions |  
|Fair values of options granted |  | $                           | 3.15      |   |                             | $ | 3.35    |       |  | $ | 2.91                 |   |  | $ | 3.09    |  
|Risk free interest rate        |  |                             | 4.61      | % |                             |   | 6.91    | %     |  |   | 4.00                 | % |  |   | 3.82    | %
|Expected dividend yield        |  |                             | 0.0       | % |                             |   | 0.5     | %     |  |   | 0.0                  | % |  |   | 0.0     | %
|Expected life of options       |  |                             | 4.5 years |   |                             |   | 5 years |       |  |   | 5 years              |   |  |   | 4 years |  
|Expected volatility rate       |  |                             | 66.8      | % |                             |   | 63.8    | %     |  |   | 88.5                 | % |  |   | 65.5    | %

The total intrinsic value of options exercised during the three months ended March 31, 2006
and 2005 was $0.1 million and $0.2 million, respectively. The excess cash tax benefit classified as a financing cash inflow for the quarters ended March 31, 2006 and 2005 was not significant.

As of March 31, 2006, there was $8.4 million of total unrecognized compensation cost related to non-vested stock options granted. The cost is
expected to be recognized over a weighted-average period of 2.0 fiscal years.

A summary of each stock option plan is presented below:



|                                                      |  |            |   |  |                              |       |                                                   |     |                                        |   |    
|----------------------------------------------------- |  | ---------- | - |  | ---------------------------- | ----- | ------------------------------------------------- | --- | -------------------------------------- | - | ---
|iGATE Stock Option Plan                               |  | Options    |   |  | WeightedAverageExercisePrice |       | WeightedAverageRemainingContractualTerm(in years) |     | AggregateIntrinsic Value (in millions)
|Options outstanding at December 31, 2005              |  | 2,201,207  |   |  | $                            | 6.93  |                                                   |     |                                        |   |    
|Granted                                               |  | 100,000    |   |  |                              | 5.41  |                                                   |     |                                        |   |    
|Exercised                                             |  | (160,006   | ) |  |                              | 3.14  |                                                   |     |                                        |   |    
|Lapsed and forfeited                                  |  | (89,364    | ) |  |                              | 16.00 |                                                   |     |                                        |   |    
|                                                      |  |            |   |  |                              |       |                                                   |     |                                        |   |    
|Options outstanding at March 31, 2006                 |  | 2,051,837  |   |  | $                            | 6.76  |                                                   | 5.7 |                                        | $ | 3.2
|                                                      |  |            |   |  |                              |       |                                                   |     |                                        |   |    
|Options vested and expected to vest at March 31, 2006 |  | 2,027,609  |   |  | $                            | 6.79  |                                                   | 5.8 |                                        | $ | 3.1
|                                                      |  |            |   |  |                              |       |                                                   |     |                                        |   |    
|Options exercisable at March 31, 2006                 |  | 1,316,362  |   |  | $                            | 8.38  |                                                   | 4.2 |                                        | $ | 1.7
|                                                      |  |            |   |  |                              |       |                                                   |     |                                        |   |    
|Available for future grant                            |  | 10,177,701 |   |  |                              |       |                                                   |     |                                        |   |    
|                                                      |  |            |   |  |                              |       |                                                   |     |                                        |   |    
|                                                      |  |            |   | 
|iGATE Global Solutions Stock Option Plan 1            |  | Options    |   |  | WeightedAverageExercisePrice |       | WeightedAverageRemainingContractualTerm(in years) |     | AggregateIntrinsic Value (in millions)
|Options outstanding at December 31, 2005              |  | 1,492,634  |   |  | $                            | 3.11  |                                                   |     |                                        |   |    
|Granted                                               |  | 110,835    |   |  |                              | 5.71  |                                                   |     |                                        |   |    
|Exercised                                             |  | (21,000    | ) |  |                              | 2.48  |                                                   |     |                                        |   |    
|Lapsed and forfeited                                  |  | (17,975    | ) |  |                              | 3.31  |                                                   |     |                                        |   |    
|                                                      |  |            |   |  |                              |       |                                                   |     |                                        |   |    
|Options outstanding at March 31, 2006                 |  | 1,564,494  |   |  | $                            | 3.26  |                                                   | 7.5 |                                        | $ | 3.4
|                                                      |  |            |   |  |                              |       |                                                   |     |                                        |   |    
|Options vested and expected to vest at March 31, 2006 |  | 1,499,303  |   |  | $                            | 3.24  |                                                   | 7.7 |                                        | $ | 3.1
|                                                      |  |            |   |  |                              |       |                                                   |     |                                        |   |    
|Options exercisable at March 31, 2006                 |  | 907,323    |   |  | $                            | 2.91  |                                                   | 7.1 |                                        | $ | 2.3
|                                                      |  |            |   |  |                              |       |                                                   |     |                                        |   |    
|Available for future grant                            |  | 777,441    |   |  |                              |       |                                                   |     |                                        |   |    
|                                                      |  |            |   |  |                              |       |                                                   |     |                                        |   |    



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|                                                      |  |           |   |  |                              |      |                                                   |     |                                        |   |    
|----------------------------------------------------- |  | --------- | - |  | ---------------------------- | ---- | ------------------------------------------------- | --- | -------------------------------------- | - | ---
|iGATE Global Solutions Stock Option Plan 2            |  | Options   |   |  | WeightedAverageExercisePrice |      | WeightedAverageRemainingContractualTerm(in years) |     | AggregateIntrinsic Value (in millions)
|Options outstanding at December 31, 2005              |  | 2,962,234 |   |  | $                            | 4.86 |                                                   |     |                                        |   |    
|Granted                                               |  |          |   |  |                              |     |                                                   |     |                                        |   |    
|Exercised                                             |  | (1,878    | ) |  |                              | 4.71 |                                                   |     |                                        |   |    
|Lapsed and forfeited                                  |  | (205,159  | ) |  |                              | 4.75 |                                                   |     |                                        |   |    
|                                                      |  |           |   |  |                              |      |                                                   |     |                                        |   |    
|Options outstanding at March 31, 2006                 |  | 2,755,197 |   |  | $                            | 4.82 |                                                   | 8.6 |                                        | $ | 2.4
|                                                      |  |           |   |  |                              |      |                                                   |     |                                        |   |    
|Options vested and expected to vest at March 31, 2006 |  | 2,552,130 |   |  | $                            | 4.85 |                                                   | 8.9 |                                        | $ | 2.2
|                                                      |  |           |   |  |                              |      |                                                   |     |                                        |   |    
|Options exercisable at March 31, 2006                 |  | 708,146   |   |  | $                            | 5.77 |                                                   | 7.9 |                                        | $ | 0.1
|                                                      |  |           |   |  |                              |      |                                                   |     |                                        |   |    
|Available for future grant                            |  | 1,737,772 |   |  |                              |      |                                                   |     |                                        |   |    
|                                                      |  |           |   |  |                              |      |                                                   |     |                                        |   |    

Results of Operations of Our Operating Segments: iGATE Solutions, iPS and iGATE Corporate for the Three Months
Ended March 31, 2006 as Compared to the Three Months Ended March 31, 2005:

Effective January 1, 2006, we recast our
segments to include the operations of jobcurry Systems Private Ltd. (jobcurry) as part of iGATE Professional Services (iPS) segment. jobcurry provides recruiting and placement services for iGATE and outside customers.
Previously, jobcurry was included in the iGATE Corporate (iGATE) segment. All prior periods have been reclassified to reflect the change to our segment reporting.

iGATE Solutions

Revenues for iGATE
Solutions for the three months ended March 31, 2006 were $38.3 million, an increase of $5.6 million or 17.0%, as compared to $32.7 million for the three months ended March 31, 2005. Our revenue increase is directly attributable to a
combination of new customer wins and increased business with our recurring customers. Our customers continue to move portions of the work previously done in the U.S. to India, resulting in increases in billable hours and consultant utilization in
India. As a result, we have added approximately 1,000 offshore consultants since March 31, 2005. In addition, we have also been able to increase our billing rates both in the U.S. and India.

The gross margin as a percentage of sales (gross margin percentage) for iGATE Solutions was 27.2% for the three months ended March 31,
2006, as compared to 29.1% for the three months ended March 31, 2005. The decrease in our gross margins was primarily due to increased labor costs in India and approximately $0.4 million of stock compensation expense incurred in conjunction
with our adoption of FAS 123 (R).

Selling, general and administrative expenses (S,G&A) include all costs that are not
directly associated with our iGATE Solutions segments revenue generating consultants. S,G&A expenses include employee costs, corporate costs and facilities costs. Employee costs include administrative salaries and related employee
benefits, travel recruiting and training costs. During the quarter we also recorded stock based compensation expense incurred as a result of our adoption of SFAS 123 (R), which is included in employee costs. Corporate costs include costs such as
legal, accounting and outside consulting fees. Facilities costs include rent, depreciation, amortization of intangible assets related to prior year acquisitions and communications costs. S,G&A costs for the three months ended March 31, 2006
were $10.4 million or 27.1% of revenues, as compared to $9.3 million or 28.4% of revenues for the three months ended March 31, 2005.

Our net employee cost increased approximately $0.7 million for the quarter ended March 31, 2006 as compared to the quarter ended March 31, 2005, mainly due to increases in employee benefits and stock based compensation expense related
to our adoption of FAS 123 (R). Our net corporate cost increased approximately $0.1 million for the quarter ended March 31, 2006 as we paid more in outside services fees during the quarter. Our net facilities costs increased $0.3 million mainly
due to increases in depreciation on our new campus in Whitefield and increases in rent expense as we continue to expand both domestically and internationally.



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iGATE Professional Services (iPS)

Revenues for iPS for the three months ended March 31, 2006 were $29.0 million, a decrease of $7.7 million or 21.0%, as compared to $36.7 million for
the three months ended March 31, 2005. iPS sold its Canadian staffing operations in November 2005. The Canadian staffing operations sales for the three months ended March 31, 2005 were $8.2 million. For comparative purposes, iPS
revenues without the impact of the Canadian staffing operations, for the first quarter of 2005, would have increased $0.5 million as overall demand for our staffing services has remained consistent for the periods presented as we continue to see
favorable trends in the IT services market.

Gross margin percentage for iPS was 22.6% for the three months ended March 31, 2006, as
compared to 20.8% for the three months ended March 31, 2005. For comparative purposes, iPS gross margin percentage for the quarter ended March 31, 2005, without the impact of the Canadian staffing operations would have been 21.8%.
The contributing factors to the increased margin without the impact of the Canadian staffing operations were savings in business travel and higher utilization of salaried employees versus subcontracted labor.

Selling, general and administrative expenses (S,G&A) include all costs that are not directly associated with our iPS segments
revenue generating consultants. S,G&A expenses include employee costs, corporate costs and facilities costs. Employee costs include administrative salaries and related employee benefits, travel recruiting and training costs. During the quarter
we also recorded stock based compensation expense incurred as a result of our adoption of SFAS 123 (R), which is also included in employee costs. Corporate costs include costs such as legal, accounting and outside consulting fees. Facilities costs
include rent, depreciation amortization of intangible assets related to prior year acquisitions and communications costs. S,G&A costs for the three months ended March 31, 2006 were $3.8 million or 13.1% of revenues, as compared to $4.7
million or 12.9% of revenues for the three months ended March 31, 2005. For the three months ended March 31, 2005 the impact of the Canadian staffing operations consisted of employee costs of $0.9 million, corporate costs of $0.1 million
and facilities costs of $0.2 million.

Our net employee cost without the $1.0 million impact of costs of the Canadian staffing operations
in 2005 increased approximately $0.8 million for the quarter ended March 31, 2006 mainly due to increases in employee salaries and related benefits, H1-b legal fees incurred as a result of adding additional consultants and stock based
compensation expense incurred related to our adoption of SFAS 123 (R). Our net corporate cost without the $0.1 million impact of costs of the Canadian staffing operations in 2005 decreased approximately $0.5 million for the quarter ended
March 31, 2006, mainly due to the decrease in our bad debt expense, net of recoveries. We had no significant change in our facilities costs for comparable periods.

Operating income percentage was 9.5% for the three months ended March 31, 2006 and 7.9% for the three months ended March 31, 2005. The Canadian staffing operations contributed 1% of operating income for the
three months ended March 31, 2005. Operating income increased for the three months ended March 31, 2006 mainly due to increased gross margins, as our overall S,G&A expenses, net of the Canadian staffing operations, increased $0.3
million for comparable quarters.

iGATE Corporate (iGATE)

Revenues for iGATE for the three months ended March 31, 2006 were $0.4 million, an increase of $0.2 million from revenues of $0.2 million for the
comparable three months ended March 31, 2005. This increase in revenue over the comparable period was due to increases in clinical studies in iGATE Clinical Research International Inc. and iGATE Clinical Research International Private Ltd.

Gross margin percentage was 49.7% for the three months ended March 31, 2006, as compared to 31.0% for the three months ended
March 31, 2005. Increases in the revenues for iGATE Clinical Research International Private Ltd. and iGATE Clinical Research International Inc. have positively impacted our gross margin percentage, as direct costs have remained consistent for
each period presented.



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S,G&A costs were $2.7 million for the three months ended March 31, 2006, as compared to $3.2
million for the three months ended March 31, 2005. Our S,G&A costs decreased due to lower accounting and legal costs in 2006 related to a more efficient compliance effort related to Section 404 of the Sarbanes-Oxley Act.

Other Income (Expense) Components

Other income, net
for the three months ended March 31, 2006 totaled $1.4 million, compared to other (expense) of $(0.3) million for the three months ended March 31, 2005, an increase to other income of $1.7 million. The following paragraphs discuss
significant components of other income (expense) and changes within each three month period presented.

During the most recent three months
ended March 31, 2006 we had interest income of $0.8 million in 2006 as compared to $0.6 million for three months ended March 31, 2005 as investment yields increased in 2006. During the most recent quarter we recognized unfavorable foreign
currency translation losses of $(0.4) million related to our intercompany debt with India which were offset by favorable mark to market losses on our ineffective hedges of $1.0 million. For the three months ended March 31, 2005, we recognized
unfavorable foreign currency translation losses of $(0.6) million related to our intercompany debt with India and unfavorable mark to market losses on our ineffective hedges of $(0.3) million.

We recognized income on affiliated companies of $0.1 million for the three months ended March 31, 2006, as compared to a loss of $0.1 million for
the three months ended March 31, 2005. All activity in 2006 was related to our investment in the Software AG joint venture. Our activity for the quarter ended March 31, 2005 was related to our investments in the CIBER and Software AG joint
ventures. We acquired majority ownership of CIBER in November 2005.

Minority interest expense was $0.1 million for the three months ended
March 31, 2006 and relates to the income of iGS and iGATE Clinical Research International Private Ltd. Minority interest expense was $0.1 million for the three months ended March 31, 2005 and included the income of iGS and the losses of
iGATE Clinical Research International Private Ltd.

Our income tax provision was $0.6 million at an effective rate of 34.4% for the three
months ended March 31, 2006. The significant items comprising our effective tax rate were a reversal of certain tax reserves and providing valuation allowances against certain deferred tax assets. iGS has renewed an Indian tax holiday related
to its new Whitefield campus. The tax holiday will extend through 2009. Our income tax benefit was $1.9 million on a loss from continuing operations of $0.5 million at a negative effective rate of 359.0% for the three months ended March 31,
2005. The significant items comprising our negative effective rate were valuation allowances recorded against certain deferred tax assets and the reversal of certain income taxes accrued in prior years.

Liquidity and Capital Resources

Changes in working
capital resulted in a $4.0 million unfavorable impact on cash flows for the three months ending March 31, 2006. Our accounts receivable decreased by $0.4 million from $49.5 million at December 31, 2005. Our days sales outstanding decreased
to 66 days at March 31, 2006 from 73 days at December 31, 2005.

At March 31, 2006, we had cash and short-term investments of
$43.4 million and $31.1 million, respectively, as compared to cash and short-term investments of $45.8 million and $30.8 million, respectively, at December 31, 2005. Short-term investments at March 31, 2006 and December 31, 2005
consisted mainly of highly liquid short-term investments. Our focus has been liquidity along with the preservation of our principal holdings.

Cash provided from operations is anticipated to be adequate to fund capital expenditures and other business needs over the next 12 months.



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Cash from Operations

Cash provided by operations was $0.2 million for the three months ended March 31, 2006. Factors contributing to our cash provided by operations were net income of $1.1 million for the period offset by changes in
working capital items of $4.0 million that included a decrease to our accounts receivable balances of $0.4 million and increases to other working capital items of $4.4 million. During 2006, significant noncash items totaled $3.1 million and included
depreciation and amortization, stock based compensation expense, bad debt expense, minority interest equity losses, deferred taxes, losses on derivative instruments and net losses on venture investments and affiliated companies.

Cash used by operations was $4.5 million for the three months ended March 31, 2005. Factors contributing to our use of cash were net income of $1.3
million offset by changes in working capital items of $8.5 million that included an increase to our accounts receivable balances of $2.5 million and net changes to other working capital items of $6.0 million. Significant noncash items during the
three months ended March 31, 2005 totaled $2.6 million and included depreciation and amortization, bad debt expense, minority interest, equity losses, amortization of deferred compensation and deferred taxes.

Investing Activities

Cash used in
investing activities for the three month period ending March 31, 2006 was $2.8 million, as compared to uses of cash of $2.6 million in the same period of 2005.

Our capital expenditures were $2.6 million and $5.8 million for the three months ended March 31, 2006 and 2005, respectively. Significant portions of capital expenditures in both periods presented were due to the
construction of our Whitefield campus located in India.

We have increased our short-term investment portfolios by approximately $0.2
million at March 31, 2006. We decreased our short-term investment portfolio by approximately $3.5 million for the same period last year.

Financing Activities

Cash provided by financing activities was $0.4 million and $0.2 million for the three months ended
March 31, 2006 and 2005, respectively. Sources of cash related to stock option exercises were $0.6 million and $0.2 million in 2006 and 2005, respectively. Tax benefits recognized in conjunction with the adoption of SFAS 123 (R) in 2006 was not
significant.

The PNC Facility was renewed on September 14, 2005 for 365 days. Our borrowing availability under the PNC Facility is
$25.0 million. We have no outstanding borrowings on the PNC Facility at March 31, 2006. As part of our agreement with PNC, we are required to maintain cash and cash equivalents and short-term investments of at least $30.0 million and maintain net
tangible worth of at least $88 million.

Restructurings

We restructured our businesses in 2004, 2003, 2002 and 2001. As a result of these restructurings, we will be required to make cash payments in future
years. The nature of the payments and the reasons for the restructurings are discussed more fully in Note 6 to the Consolidated Financial Statements. The following table details the cash payments that we will be required to make in the future years:



|                              |  |      |       |      |   |      |  |      |     |      |   |            |  |   |     |  |   |  
|----------------------------- |  | ---- | ----- | ---- | - | ---- |  | ---- | --- | ---- | - | ---------- |  | - | --- |  | - | -
|(Dollars in thousands)        |  | 2006 |       | 2007 |   | 2008 |  | 2009 |     | 2010 |   | Thereafter
|Lease costs of office closure |  | $    | 1,438 |      | $ | 639  |  | $    | 639 |      | $ | 639        |  | $ | 529 |  | $ | 
|                              |  |      |       |      |   |      |  |      |     |      |   |            |  |   |     |  |   |  



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During the three months ended March 31, 2006, we did not use our cash reserves for any other
significant financing or investing activities, with the exception of cash being transferred from money-market accounts or other short-term investments (purchases of $6.6 million and sales of $6.4 million), certain capital expenditures that were
incurred during the normal course of business (net additions of $2.6 million) and the exercise of employee stock options of $0.6 million.

Contractual
Obligations

As part of our acquisition of iGATE Clinical Research International Private Ltd., we may be required to fund their existing
operations for an amount of up to $3.0 million, based upon mutually agreed upon operating needs. We funded $0.3 million of this requirement in the first quarter of 2006, and $0.3 million during the first quarter of 2005. We have funded a total of
$1.3 million thus far in connection with this agreement.

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



|                       |  |      |       |      |   |       |  |      |       |      |   |            |  |   |     |  |   |    
|---------------------- |  | ---- | ----- | ---- | - | ----- |  | ---- | ----- | ---- | - | ---------- |  | - | --- |  | - | ---
|(Dollars in thousands) |  | 2006 |       | 2007 |   | 2008  |  | 2009 |       | 2010 |   | Thereafter
|Leases                 |  | $    | 2,154 |      | $ | 2,559 |  | $    | 1,857 |      | $ | 867        |  | $ | 396 |  | $ | 962
|                       |  |      |       |      |   |       |  |      |       |      |   |            |  |   |     |  |   |    

We have committed to building Phase III of our campus located in Bangalore. Total estimated costs
of the project will approximate $7.5 million. Phase I was completed in February 2004 and Phase II was completed in December 2005. We have funded the project through a combination of available cash reserves and short-term investments.

As noted earlier, in Business Developments, iGS has funded $0.8 million to LoanPro through May 5, 2006.

Off-Balance Sheet Arrangements

We do not have any
off-balance arrangements.



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

Market Risk Factors

We are exposed to market risks from adverse changes in foreign exchange rates,
interest rates, especially the Indian Rupee (Rupee). We do not engage in speculative or leveraged transactions, nor do we hold or issue financial instruments for trading purposes.

Foreign Exchange Rate Sensitivity

iGSs cash flow and earnings are subject to fluctuations due to exchange rate variation between the Rupee and the U.S. Dollar (USD). This foreign currency risk exists based upon the nature of the iGSs operations. The
majority of iGSs customers and revenue are U.S. based, which provides an inherent foreign currency risk between USD and Rupee exchange rates.

We attempt to limit our exposure to changing Rupee rates mainly through financial market transactions. These transactions may include entering into forward or option contracts to hedge existing exposures. The instruments are used to reduce
risk by essentially creating offsetting currency exposures. The following table presents information related to foreign currency contracts held by the Company:



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LIST OF OUTSTANDING HEDGE TRANSACTIONS ON MARCH 31, 2006



|                          |  |                      |  |                                 |  |                        |             |        |               |                                              |   |      |  
|------------------------- |  | -------------------- |  | ------------------------------- |  | ---------------------- | ----------- | ------ | ------------- | -------------------------------------------- | - | ---- | -
|                          |  |                      |  |                                 |  | (Dollars in thousands) |            
|                          |  | Maturity Date Ranges |  | Strike Priceat Rupee RateRanges |  | Amount                 |             | Option |               | Net Unrealized Gains/(Losses) March 31, 2006 |  
|FORWARD CONTRACTS         |  |                      |  |                                 |  |                        |             |        |               |                                              |   |      |  
|From:                     |  | June 29, 2006        |  | 43.97                           |  |                        |             |        |               |                                              |   |      |  
|To:                       |  | August 31, 2006      |  | 44.00                           |  |                        |             |        |               |                                              |   |      |  
|                          |  |                      |  |                                 |  |                        |             |        |               |                                              |   |      |  
|Subtotal                  |  |                      |  |                                 |  | $                      | 6,000       |        |               |                                              | $ | (121 | )
|                          |  |                      |  |                                 |  |                        |             |        |               |                                              |   |      |  
|CURRENCY OPTION CONTRACTS |  |                      |  |                                 |  |                        |             |        |               |                                              |   |      |  
|From:                     |  | April 26, 2006       |  | 43.15                           |  | $                      | 11,000      |        | Buy/Sell Put  |                                              |   |      |  
|To:                       |  | December 29, 2006    |  | 44.77                           |  |                        | 15,500      |        | Buy/Sell Call |                                              |   |      |  
|                          |  |                      |  |                                 |  |                        |             |        |               |                                              |   |      |  
|Subtotal                  |  |                      |  |                                 |  | $                      | 26,500      |        |               |                                              | $ | (220 | )
|                          |  |                      |  |                                 |  |                        |             |        |               |                                              |   |      |  
|FAIR VALUE HEDGES         |  |                      |  |                                 |  |                        |             |        |               |                                              |   |      |  
|From:                     |  | April 28, 2006       |  | 44.10                           |  |                        |             |        |               |                                              |   |      |  
|To:                       |  | April 28, 2006       |  | 44.10                           |  |                        |             |        |               |                                              |   |      |  
|                          |  |                      |  |                                 |  |                        |             |        |               |                                              |   |      |  
|Subtotal                  |  |                      |  |                                 |  | $                      | 1,000       |        |               |                                              | $ | (15  | )
|                          |  |                      |  |                                 |  |                        |             |        |               |                                              |   |      |  
|PRINCIPAL SWAPS           |  |                      |  |                                 |  |                        |             |        |               |                                              |   |      |  
|                          |  | September 29, 2006   |  |                                 |  | $                      | 886 USD     |        |               |                                              | $ | (24  | )
|                          |  |                      |  |                                 |  |                        | 1,500 SGD   |        |               |                                              |   |      |  
|                          |  | September 29, 2006   |  |                                 |  | $                      | 601 USD     |        |               |                                              | $ | 6    |  
|                          |  |                      |  |                                 |  |                        | 500 EURO    |        |               |                                              |   |      |  
|                          |  | September 28, 2006   |  |                                 |  | $                      | 1,555 USD   |        |               |                                              | $ | 97   |  
|                          |  |                      |  |                                 |  |                        | 175,000 JPY |        |               |                                              |   |      |  
|                          |  | September 28, 2006   |  |                                 |  | $                      | 3,104 USD   |        |               |                                              | $ | 52   |  
|                          |  |                      |  |                                 |  |                        | 1,750 GBP   |        |               |                                              |   |      |  
|                          |  |                      |  |                                 |  |                        |             |        |               |                                              |   |      |  
|Subtotal                  |  |                      |  |                                 |  |                        |             |        |               |                                              | $ | 130  |  
|                          |  |                      |  |                                 |  |                        |             |        |               |                                              |   |      |  
|Total                     |  |                      |  |                                 |  |                        |             |        |               |                                              | $ | (226 | )
|                          |  |                      |  |                                 |  |                        |             |        |               |                                              |   |      |  

The net unrealized gains/(losses) were calculated using a Rupee exchange rate of 44.50.

As of March 31, 2006, our forward contracts to hedge intercompany cash flows will mature within one year from our 2005 fiscal
year-end. As each contract matures, iGS will receive Rupees at the contracted (strike price) rate while delivering the USD equivalent of Rupees at the prevailing Rupee exchange rate. Contracts that meet qualifying criteria are accounted
for as foreign currency cash flow hedges. Accordingly, the effective portion of gains and losses is deferred as a component of other comprehensive loss and is recognized in earnings at the time the hedged item affects earnings. Any gains and losses
due to hedge ineffectiveness or related to contracts which do not qualify for hedge accounting are recorded in current period earnings in other income and expense. At March 31, 2006 these forward contracts did not meet qualifying criteria to
receive hedge accounting and, as such, iGS appropriately recorded a liability for the net unrealized loss of $(0.1) million.

As of
March 31, 2006, our option contracts to hedge intercompany cash flows will mature within one year from our 2005 fiscal year-end. As each contract matures and dependent upon prevailing Rupee exchange rates, iGS will have the option to either buy
USDs at each contracted put strike price or sell USDs at each contracted call strike price. Contracts that meet qualifying criteria are accounted for as foreign currency cash flow hedges. Accordingly, the effective portion of
gains and losses is deferred as a component of other comprehensive loss and is recognized in earnings at the time the hedged item affects earnings. Any gains and losses due to hedge



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ineffectiveness or related to contracts which do not qualify for hedge accounting are recorded in current period earnings in other income and expense. At
March 31, 2006 these option contracts did not meet qualifying criteria to receive hedge accounting and, as such, iGS appropriately recorded a liability for the net unrealized loss of $(0.2) million.

As of March 31, 2006, all fair value hedges were deemed to be ineffective due to the lack of an underlying asset or transaction to be hedged. They
will expire in April 2006. At March 31, 2006, iGS recorded less than $0.1 million loss.

As of March 31, 2006, our principal
swaps to hedge intercompany debt from iGS to iGATE will mature within one year from our 2005 fiscal year-end. Contracts that meet qualifying criteria are accounted for as foreign currency cash flow hedges. Accordingly, the effective portion of gains
and losses is deferred as a component of other comprehensive loss and is recognized in earnings at the time the hedged item affects earnings. Any gains and losses due to hedge ineffectiveness or related to contracts which do not qualify for hedge
accounting are recorded in current period earnings in other income and expense. At March 31, 2006, the principal swaps to hedge intercompany debt did not meet qualifying criteria to receive hedge accounting and iGS appropriately recorded the
assets for the net unrealized gain of $0.1 million as Other Income.

Interest Rate Sensitivity

The Company is exposed to changes in interest rates primarily as a result of its intercompany debt borrowing and investing activities used to maintain
liquidity and fund business operations. The nature and amount of the Companys long-term and short-term debt can be expected to vary as a result of future business requirements, market conditions and other factors. The Companys net
intercompany debt obligation totaled $11.0 million at March 31, 2006. The Companys debt obligation is discussed in its Related Party Transactions Note 18.

In order to manage interest rate exposure, iGS utilizes interest rate swaps. These derivatives are primarily accounted for as fair value hedges. Accordingly, changes in the fair value of these derivatives, along with
changes in the fair value of the hedged debt obligations that are attributable to the hedged risk, are recognized as Interest Expense.

Effect of Hypothetical 10% Fluctuation In Market Prices

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

As of
March 31, 2006, the potential gain or loss in the fair value of the Companys outstanding foreign currency contracts assuming hypothetical 5%, 2% and 1% fluctuations in currency rates would be approximately:



|                       |  |                                                 |        |                                |   |        |                                                |   |        |  |   |        |   |  |    |        |   |  |   |        |   |  |   |        |  
|---------------------- |  | ----------------------------------------------- | ------ | ------------------------------ | - | ------ | ---------------------------------------------- | - | ------ |  | - | ------ | - |  | -- | ------ | - |  | - | ------ | - |  | - | ------ | -
|                       |  | Valuation given X% decrease in Rupee / USD rate |        | Fair Value as ofMarch 31, 2006 |   |        | Valuation give X% increase in Rupee / USD rate |  
|                       |  | (5%)                                            |        | (2%)                           |   | (1%)   |                                                |   | 1%     |  |   | 2%     |   |  | 5% |       
|Rupee to USD rate      |  |                                                 | 42.279 |                                |   | 43.614 |                                                |   | 44.059 |  |   | 44.504 |   |  |    | 44.949 |   |  |   | 45.394 |   |  |   | 46.729 |  
|Derivative Instruments |  | $                                               | 1.0    |                                | $ | 0.3    |                                                | $ | 0.0    |  | $ | (0.2   | ) |  | $  | (0.5   | ) |  | $ | (0.7   | ) |  | $ | (1.5   | )
|                       |  |                                                 |        |                                |   |        |                                                |   |        |  |   |        |   |  |    |        |   |  |   |        |   |  |   |        |  

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



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Inflation

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

For all significant foreign
operations, the functional currency is the local currency. Assets and liabilities of these operations are translated at the exchange rate in effect at each period end. Statement of Operations accounts are translated at the average exchange rate
prevailing during the year. Translation adjustments arising from the use of differing exchange rates from period to period are included as a component of other comprehensive income (loss). Realized gains and losses from foreign currency transactions
are included in net loss for the periods presented. Exchange rate transaction gains (losses) did not have a significant impact on operations for the three months ended March 31, 2006.

Seasonality

Our operations are generally not
affected by seasonal fluctuations. However, our consultants billable hours are affected by national holidays and vacation policies, which vary by country and by operating company.

Economic Trends and Outlook

We believe that the Information Technology and Business Process
Outsourcing industry in India is in its infancy, and that significant revenue and profit growth opportunities remain ahead of us. The global market for IT services and business process outsourcing is estimated to be nearly $300 billion.
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 business services we offer has been tapped.

Our long-term goal is to be a significant player in the offshore services industry  with a healthy core business in IT services supplemented
with higher-growth specialty practices in areas such as Mortgage Services, Finance and Accounting, Data Management and Software Testing.

Our goals for 2006 include a focus on accelerating revenue growth by aggressively pursing larger, Global 2000 clients and multi-year projects, advancing our new service offerings, and pursuing opportunities in new geographic markets. We
will also remain squarely focused on continuing to improve margins and overall profitability.



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

Disclosure Controls and Procedures

For the three month period ended March 31, 2006, the Company carried out an evaluation, under the supervision and with the
participation of Company management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the Companys disclosure controls and procedures pursuant to the Securities Exchange
Act of 1934 (Exchange Act) Rules 13a-15(b) and 15d-15(b). Based upon, and as of the date of this evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Companys disclosure controls and procedures
were effective. The results of managements assessment were reviewed with the Companys Audit Committee.



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Changes in Internal Control Over Financial Reporting

There were no changes in internal control over financial reporting (as such term is defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange
Act of 1934, as amended) that occurred during the first quarter of 2006 that have materially affected, or are reasonably likely to materially affect, the Companys internal control over financial reporting.

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, 2005. There were no material changes in these risk factors during the first quarter of 2006.



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



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



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



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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 10thday of May, 2006.



|             |  |  |  |                                       
|------------ |  |  |  | --------------------------------------
|             |  |  |  | iGATE CORPORATION                     
|             |  | 
|May 10, 2006 |  |  |  | /s/    SUNIL WADHWANI                 
|             |  |  |  | Sunil Wadhwani                        
|             |  |  |  | Co-Chairman of the Board of Directors,
|             |  |  |  | Chief Executive Officer, and Director 
|             |  | 
|             |  |  |  | /s/    MICHAEL J. ZUGAY               
|             |  |  |  | Michael J. Zugay                      
|             |  |  |  | Senior Vice President and             
|             |  |  |  | Chief Financial Officer               



35