IGate (IGTE) 10-Q 2012 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2012

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

For the transition period from             to             

Commission File Number 000-21755

iGATE CORPORATION

(Exact name of registrant as specified in its charter)

PENNSYLVANIA	25-1802235
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
6528 Kaiser Drive Fremont, CA	94555
(Address of principal executive offices)	(Zip Code)

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

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

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

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

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

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

The number of shares of the registrant’s Common Stock, par value $.01 per share, outstanding as of October 25, 2012 was 57,533,442.

iGATE CORPORATION

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 30, 2012

TABLE OF CONTENTS

		Page
PART I.	FINANCIAL INFORMATION		3
Item 1.	Financial Statements:
	—Condensed Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2012 and 2011		3
	—Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2012 and 2011		4
	—Condensed Consolidated Balance Sheets as of September 30, 2012 and December 31, 2011		5
	—Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September  30, 2012 and 2011		6
	—Notes to Condensed Consolidated Financial Statements		7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		39
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		53
Item 4.	Controls and Procedures		54
PART II. OTHER INFORMATION			55
Item 1A.	Risk Factors		55
Item 6.	Exhibits		55
SIGNATURES			58

2

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

iGATE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Amounts in thousands, except per share data)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Revenues	$	271,090		$	265,724		$	802,348		$	511,939
Cost of revenues (exclusive of depreciation and amortization)		163,269			167,565			488,380			323,563
Gross margin		107,821			98,159			313,968			188,376
Selling, general and administrative expense		44,064			46,745			127,348			108,915
Depreciation and amortization		10,027			13,667			36,757			25,032
Income from operations		53,730			37,747			149,863			54,429
Interest expense		(21,994	)		(19,546	)		(62,149	)		(32,834	)
Foreign exchange gain (loss), net		(3,763	)		(7,874	)		(18,198	)		16,846
Equity in loss in affiliated company		0			(62	)		0			(52	)
Other income, net		8,815			4,145			23,975			8,553
Income before income taxes		36,788			14,410			93,491			46,942
Income tax expense (benefit)		8,495			(2,793	)		24,007			7,314
Net income		28,293			17,203			69,484			39,628
Non- controlling interest		0			2,950			4,476			3,437
Net income attributable to iGATE Corporation		28,293			14,253			65,008			36,191
Accretion to preferred stock		103			84			295			214
Preferred dividend		7,419			6,769			21,590			15,131
Net income attributable to iGATE common shareholders	$	20,771		$	7,400		$	43,123		$	20,846
Basic earnings per share:
Common stock	$	0.27		$	0.10		$	0.57		$	0.28
Unvested restricted stock		0.27			0.10		$	0.57			0.28
Diluted earnings per share	$	0.27		$	0.10		$	0.56		$	0.28

See accompanying notes.

3

iGATE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Amounts in thousands)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Net income attributable to iGATE common shareholders	$	20,771		$	7,400		$	43,123		$	20,846
Non controlling interest		0			2,950			4,476			3,437
Other comprehensive income:
Unrealized gain on marketable securities		295			2,135			1,761			2,436
Unrecognized actuarial gain (loss) on pension liability		(24	)		(115	)		(290	)		130
Change in fair value of cash flow hedges		13,084			(8,443	)		22,438			(7,557	)
Gain (loss) on foreign currency translation		72,862			(132,835	)		11,395			(128,806	)
Total comprehensive income (loss)		106,988			(128,908	)		82,903			(109,514	)
Less: Total comprehensive income (loss) attributable to non controlling interest		0			(20,134	)		4,476			(18,750	)
Total comprehensive income (loss) attributable to iGATE common shareholders	$	106,988		$	(108,774	)	$	78,427		$	(90,764	)

See accompanying notes.

4

iGATE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

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

	September 30, 2012 (unaudited)			December 31, 2011
ASSETS
Current assets:
Cash and cash equivalents	$	97,708		$	75,440
Restricted cash		11,400			0
Short-term investments		450,029			354,528
Accounts receivable, net		161,092			172,711
Unbilled revenues		91,378			45,223
Prepaid expenses and other current assets		48,162			18,752
Prepaid income taxes		8,184			8,341
Deferred tax assets		25,517			20,574
Foreign exchange derivative contracts		6,235			277
Receivable from Mastech Holdings Inc.		0			187
Total current assets		899,705			696,033
Deposits and other assets		28,053			32,102
Prepaid income taxes		23,769			18,481
Property and equipment, net		163,470			175,672
Leasehold land		90,623			90,339
Deferred tax assets		27,678			30,456
Goodwill		513,089			511,060
Intangible assets, net		152,851			160,706
Total assets	$	1,899,238		$	1,714,849
LIABILITIES, REDEEMABLE NON CONTROLLING INTEREST, PREFERRED STOCK AND EQUITY
Current liabilities:
Accounts payable	$	6,709		$	7,857
Line of credit		57,000			57,000
Term loans		17,500			0
Accrued payroll and related costs		54,201			71,913
Other accrued liabilities		97,104			77,988
Accrued income taxes		775			3,993
Foreign exchange derivative contracts		9,401			12,471
Deferred revenue		16,617			22,412
Total current liabilities		259,307			253,634
Other long-term liabilities		4,197			4,610
Senior notes		770,000			770,000
Term loans		278,000			0
Foreign exchange derivative contracts		0			6,739
Accrued income taxes		23,951			17,672
Deferred tax liabilities		61,354			58,992
Total liabilities		1,396,809			1,111,647
Commitments and contingencies (Note 20)
Redeemable non controlling interest		39,555			0
Series B Preferred stock, without par value: 480,000 shares authorized; 330,000 shares issued and outstanding		370,908			349,023
iGATE Corporation shareholders’ equity:
Preferred shares, without par value: 19,520,000 shares authorized; 1 share held in treasury		0			0
Common shares, par value $0.01 per share:
700,000,000 shares authorized; 58,308,228 and 57,696,430 shares issued; 57,318,126 and 56,706,328 shares outstanding as of September 30, 2012 and December 31, 2011, respectively		583			577
Common shares held in treasury, at cost, 990,102 shares		(14,714	)		(14,714	)
Additional paid-in capital		181,097			201,281
Retained earnings		147,616			104,493
Accumulated other comprehensive loss		(222,616	)		(214,641	)
Total iGATE Corporation shareholders’ equity		91,966			76,996
Non controlling interest		0			177,183
Total equity.		91,966			254,179
Total liabilities, redeemable non controlling interest, preferred stock and equity	$	1,899,238		$	1,714,849

See accompanying notes.

5

iGATE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

	Nine Months ended September 30,
	2012			2011
Cash Flows From Operating Activities:
Net income	$	69,484		$	39,628
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		36,757			25,032
Stock based compensation		9,270			8,868
Write off of software implementation costs		0			1,196
Provision for lease termination		0			446
Realized gain on investments		(17,069	)		(2,034	)
Equity loss on investment in affiliate		0			52
Loss on investment in affiliate		551			0
Deferred gain (loss) on settled derivatives		19,344			(5,730	)
Provision for doubtful debts		680			453
Deferred income taxes		(10,290	)		(11,518	)
Amortization of debt issuance costs		4,810			2,309
Loss (gain) on sale of property and equipment		32			(24	)
Deferred rent		(88	)		50
Tax benefits related to stock option exercises		(318	)		(830	)
Working capital items:
Accounts receivables and unbilled revenue.		(32,698	)		(21,467	)
Prepaid expenses and other current assets		(19,746	)		(9,844	)
Accounts payable		10,364			4,252
Accrued and other liabilities		(9,662	)		29,587
Deferred revenue		(6,074	)		63
Net cash flows provided by operating activities		55,347			60,489
Cash Flows From Investing Activities:
Purchase of property and equipment		(13,430	)		(12,946	)
Proceeds from sale of property and equipment		27			205
Purchase of available-for-sale investments		(1,528,008	)		(370,455	)
Proceeds from maturities and sale of available-for-sale investments		1,438,195			391,928
Restricted cash		(11,400	)		0
Receipts from lease deposits		2,663			2,164
Payment for investment in subsidiary		(224,009	)		(1,168,404	)
Net cash flows used in investing activities		(335,962	)		(1,157,508	)
Cash Flows From Financing Activities:
Payments on capital lease obligations		(415	)		(303	)
Proceeds from line of credit and term loans		295,500			52,000
Proceeds from sale of preferred stock, net of issuance costs		0			326,572
Payment of delisting related financing costs		(3,263	)		0
Proceeds from senior notes		0			770,000
Payment of debt issuance costs		0			(33,456	)
Purchase of subsidiary’s stock		0			(8	)
Proceeds from exercise of stock options		7,231			1,132
Tax benefit related to stock option exercises		318			830
Net cash flows provided by financing activities		299,371			1,116,767
Effect of currency translation		3,512			(2,716	)
Net change in cash and cash equivalents		22,268			17,032
Cash and cash equivalents, beginning of period		75,440			67,924
Cash and cash equivalents, end of period	$	97,708		$	84,956

See accompanying notes.

6

iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2012

1. Basis of Presentation

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

The accompanying balance sheet and financial information as of December 31, 2011 is derived from audited financial statements but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The results of operations for the three and nine months ended September 30, 2012 are not necessarily indicative of the results that may be expected for the full year. These financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto included in its Annual Report on Form 10-K for the year ended December 31, 2011.

Principles of Consolidation

The Condensed Consolidated Financial Statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated.

Use of Estimates

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

2. Business acquisition

On May 12, 2011, the Company, through its wholly owned subsidiaries Pan-Asia iGATE Solutions (“Pan-Asia”) and iGATE Global Solutions Limited (“iGATE Global”), collectively the “Promoters”, completed the acquisition of a majority stake in Patni Computer Systems Limited (the “Patni Acquisition”). The Patni Acquisition was valued at $1.24 billion. Patni Computer Systems Limited, now known as iGATE Computer Systems Limited (“Patni”), provided multiple service offerings to its clients across various industries including banking and insurance; manufacturing, retail and distribution; life sciences; product engineering; communications, media and entertainment and utilities. These service offerings include application development and maintenance, enterprise software and systems integration services, business and technology consulting, product engineering services, infrastructure management services, customer interaction services and business process outsourcing (“BPO”), quality assurance and engineering services. The Company believes that its strategy of a global delivery model and the Patni Acquisition positions it well to provide a greater breadth of services in catering to market needs and opportunities.

The acquisition has been accounted for under the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) No. 805,“Business Combination”.The total purchase price has been allocated to Patni’s net tangible and intangible assets based on their estimated fair values at the date of acquisition. Since the actual results from May 12, 2011 through May 15, 2011 were not material, for convenience the Company utilized May 15, 2011 as the acquisition date. The purchase price in excess of amounts allocated to net tangible and intangible assets has been recorded as goodwill. The goodwill recognized is not deductible for income tax purposes.

On March 14, 2012, Pan-Asia along with iGATE Global and iGATE issued a public announcement regarding the proposed acquisition of the remaining 15.82% of Patni’s outstanding share capital (excluding American Depository Shares (“ADSs”)) from Patni’s public shareholders and the delisting of the fully paid-up equity shares of Patni having a face value of Indian Rupees (“INR”) 2/- each in accordance with Regulation 10 of the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 (the “Offer”).

The public shareholders holding Patni’s equity shares were invited to submit bids via the Offer that opened on March 28, 2012 and closed on March 30, 2012. On April 10, 2012, iGATE announced the Offer process as a success with a discovered price of INR 520 per equity share determined through a reverse book building process using the electronic facility of the Bombay Stock Exchange, in accordance with the Security Exchange Board of India (“SEBI”) regulations.

7

iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2012

Following the application made by Patni to the Bombay Stock Exchange (“BSE”) and the National Stock Exchange (“NSE”) to voluntarily delist its equity shares from those exchanges and on the subsequent completion of purchase of the remaining shares, trading of Patni’s shares were discontinued with effect from May 21, 2012 and the Patni shares were delisted from the records of the BSE and the NSE with effect from May 28, 2012. In accordance with Regulation 21 of the SEBI Regulations, the Promoters announced an Exit Offer (“Exit Offer”) on May 28, 2012 asking the Residual Shareholders of Patni to tender their Shares to the Promoters at INR 520 at any time from May 28, 2012 until May 27, 2013 (“Exit Period”).

As of September 30, 2012, iGATE and its subsidiaries owned 97.5% of the outstanding equity of Patni and publicly held ADSs constituted less than 1% of the outstanding equity of Patni. Patni applied for voluntary delisting of its ADSs from the New York Stock Exchange (the “NYSE”) and for their deregistration under the Securities Exchange Act of 1934, taking into account the fact that the volume of Patni’s ADSs which trade on the NYSE accounted for only a small fraction of Patni’s total outstanding equity. The ADSs were delisted from the NYSE after the close of trading on September 28, 2012 and are tradable on the U.S. over-the-counter market beginning on October 1, 2012. Patni filed Form 15, deregistering the ADSs from the SEC’s reporting requirements on October 1, 2012, which is automatically effective 90 days later subject to the SEC’s queries, if any.

Pan-Asia borrowed $225.5 million in cash and took a bank guarantee of INR 1.6 billion or $31.1 million from DBS Bank Ltd., Singapore (see Note 6) to fund the purchase of Patni’s shares and delisting related expenses. Of this, $215 million along with the Company’s funds of INR1.3 billion or approximately $24.6 million was placed in an escrow for the acquisition of Patni’s shares. As of September 30, 2012, approximately $223.5 million was utilized to purchase 22.5 million shares of Patni’s outstanding share capital. As of September 30, 2012, the escrow account balance was remeasured to $11.4 million and is disclosed as restricted cash in the condensed consolidated balance sheet. From October 1, 2012 through October 25, 2012, the Company has acquired 0.3 million additional shares of Patni.

On August 28, 2012, Patni entered into a share purchase agreement with another subsidiary of the Company, iGATE Technologies Inc. (“iTI”) to transfer all the shares of iGATE Americas Inc (f/k/a Patni Americas Inc.) (“iAI”) to iTI for a total consideration of $82.9 million. To facilitate this purchase, iTI borrowed $70 million under a term loan agreement from a bank at an interest rate of LIBOR plus 280 basis points (see Note 6).

On October 11, 2012, the Company’s Board of Directors approved a plan where it was decided to merge Patni with iGATE Global, The merger scheme was further approved by the Board of Directors of Patni and iGATE Global on October 26, 2012 and was subsequently filed with the High Court of Judicature at Mumbai on October 29, 2012. Pursuant to the merger, the shareholders of Patni shall receive 5 (five) equity shares of the face value of Rs 10/- (Rupees Ten) each (credited as fully paid up) of iGATE Global for 22 (twenty two) equity shares of the face value of Rs 2/- (Rupees Two) each (credited as fully paid-up) held by such shareholder or his/her/its respective legal heirs, executors or successors in Patni. Patni expects to terminate the ADR program and the ADRs issued by it will be converted into underlying shares of Patni or liquidated for cash pursuant to the terms of the deposit agreement entered into amongst Patni, the Bank of New York and the owners and holders of ADRs prior to the merger becoming effective. The merger is subject to the receipt of various approvals including from the shareholders and creditors of both companies, the High Court of Judicature at Mumbai and the Competition Commission of India.

Redeemable Non Controlling Interest

As of September 30, 2012, the balance of Patni shares yet to be purchased was 4 million shares. As per ASC 480, the Company has recorded the fair value of such shares totaling $39.6 million and presented this in the mezzanine section of the balance sheet as redeemable non controlling interest.

8

iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2012

3. Goodwill and Intangible Assets

The following describes changes in the carrying value of goodwill for the nine months ended September 30, 2012 (in thousands):

	Amount
Goodwill as of December 31, 2011	$	511,060
Foreign currency translation effect		2,029
Goodwill as of September 30, 2012	$	513,089

The following describes changes in the carrying value of intangibles for the nine months ended September 30, 2012 (in thousands):

	Amount
Intangible assets as of December 31, 2011	$	160,706
Foreign currency translation effect		951
Amortization		(8,806	)
Intangible assets as of September 30, 2012	$	152,851

As of September 30, 2012, intangible assets were comprised of the following (in thousands):

	Amount
Customer relationships	$	189,844
Intellectual property rights		9,400
Foreign currency translation adjustments		(27,473	)
Amortization		(18,920	)
Intangible assets as of September 30, 2012	$	152,851

Customer relationships and intellectual property rights are amortized over a weighted average period of 7.6 years and 2.9 years, respectively.

Amortization expenses related to identifiable intangible assets were $2.9 million and $2.8 million for the three months ended September 30, 2012 and 2011, respectively and $8.8 million and $4.9 million for the nine months ended September 30, 2012 and 2011, respectively. Future estimated annual amortization is as follows (in thousands):

	Amount
Remainder of 2012	$	2,803
2013	$	11,567
2014	$	12,002
2015	$	12,529
2016	$	12,972

9

iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2012

4. Series B Preferred Stock

On January 10, 2011, the Company entered into a securities purchase agreement, with Viscaria Limited, to raise equity financing to pay a portion of the cash consideration for the Patni Acquisition. Under the securities purchase agreement, the Company agreed to sell, in a private placement, up to 480,000 shares of newly designated 8.00% Series B Convertible Participating Preferred Stock, no par value per share (the “Series B Preferred Stock”), for an aggregate purchase price of up to $480 million. On February 1, 2011 and May 9, 2011, the Company issued 210,000 shares and 120,000 shares, respectively, of the Series B Preferred Stock for a consideration of $330 million.

Significant economic terms of the Series B Preferred Stock include:

• accrues cumulative dividends at a rate of 8.00% per annum, which dividends will be added to the liquidation preference of the Series B Preferred Stock and compounded quarterly;

• is entitled to participate in dividends and other distributions payable on the Company’s common stock on an as-converted basis;

• provides for a holder option to convert the outstanding principal plus accrued and unpaid dividends into the Company’s common stock at any time and from time to time at an initial conversion price of $20.30 per share (which conversion price is subject to adjustment in certain circumstances);

• is subject to a Company option to convert the Series B Preferred Stock into common stock of the Company after 18 months from the applicable closing date if, among other things, the volume weighted average price of the Company’s common stock exceeds 205% of the then applicable conversion price for a specified period of time;

• is redeemable for cash at an amount equal to the outstanding principal plus accrued and unpaid dividends upon the exercise of the holder’s put right at Nine years from the last occurring closing date;

• provides that, if the Series B Preferred Stock is not sooner converted, such preferred stock is subject to a mandatory conversion into shares of the Company’s common stock on the date that is Nine years from the applicable closing date (subject to extension in limited circumstances) unless the holder exercises the put right described in the immediately preceding bullet point; and

• provides the holder the right to receive, prior to any payment in respect of any junior equity securities, the greater of the outstanding principal plus accrued and unpaid dividends and the as-converted value upon liquidation of the Company or upon certain changes of control.

The Company incurred issuance costs amounting to $3.4 million which have been netted against the proceeds received from the issuance of Series B Preferred Stock. The Series B Preferred Stock is being accreted over a period of six years. The amount accreted totaled $0.1 million during the three months ended September 30, 2012 and 2011, respectively, and $0.3 million and $0.2 million during the nine months ended September 30, 2012 and 2011, respectively.

The Company is accruing for cumulative dividends at a rate of 8.00% per annum, compounded quarterly. The amount of such dividends accrued was $7.4 million and $6.8 million during the three months ended September 30, 2012 and 2011, respectively, and $21.6 million and $15.1 million during the nine months ended September 30, 2012 and 2011, respectively.

10

iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2012

5. Prepaid expenses and other current assets

Prepaid expenses and other current assets consist of the following (in thousands):

	As of
	September 30, 2012		December 31, 2011
Prepaid expenses	$	3,730	$	6,173
Advances		5,343		2,663
Debt issuance costs		8,482		5,808
Service tax receivable		10,768		2,980
Receivable from mutual funds		17,159		0
Other current assets		2,680		1,128
	$	48,162	$	18,752

6. Borrowings

Line of Credit

On February 21, 2011, the Company entered into an arrangement with a bank for availing an unsecured revolving working credit facility of $70 million at an annual interest rate of LIBOR plus 195 basis points. The interest rate was initially renewed on an annual basis and is now renewed periodically. In February 2012, this facility was renewed and the interest rate was changed to LIBOR plus 25 basis points and which was further renewed to LIBOR plus 130 basis points with effect from September 2012. As of September 30, 2012, the Company had borrowed $52 million under this line of credit at a weighted average interest rate of 1.95%.

On May 10, 2011, the Company entered into a credit agreement with a bank for revolving credit commitments in an aggregate principal U.S. Dollar equivalent of $50 million, maturing on May 10, 2016. The proceeds are to be used for working capital and other general corporate purposes. This facility carries an interest rate of LIBOR plus 280 basis points. As of September 30, 2012, the Company had borrowed $5 million under this revolving credit arrangement at an interest rate of 3.3%.

As of September 30, 2012, Patni has a line of credit facility of approximately $11.6 million with banks for requirements such as pre and post shipment loans, export bill discounting, overdrafts, working capital demand loans and financial and performance guarantees. This facility bears interest in accordance with rates negotiated with the bank from time to time. This facility is secured by Patni’s accounts receivables, and amounts outstanding are payable on demand to the bank upon breach of the terms and conditions of the credit facility letter. As of September 30, 2012, Patni has availed $0.9 million under this facility for a performance guarantee.

Term Loans

On March 8, 2012, Pan-Asia entered into a credit agreement (the “Original Credit Facility”) for term commitments and bankers guarantees with the lenders named therein and DBS Bank LTD., Singapore, as administrative agent (the “Administrative Agent”), in an aggregate principal U.S. Dollar equivalent of $215 million maturing on June 8, 2014. The borrowings under the Original Credit Facility carried an interest rate of LIBOR plus an applicable interest rate ranging from 280 basis points to 320 basis points and contained customary representations and warranties, events of default and affirmative and negative covenants, and are guaranteed by the Company and several of its wholly-owned subsidiaries.

On April 3, 2012, Pan-Asia entered into an amended and restated credit agreement (the “Amended Credit Facility”) for a secured term loan facility with the lenders named therein and the Administrative Agent. The Amended Credit Facility increases the commitment amount to $265 million and matures on June 8, 2014. The Amended Credit Facility is available to finance Pan-Asia’s purchase of the remaining publicly outstanding equity shares of Patni. As of September 30, 2012, Pan-Asia borrowed $225.5 million in cash at a weighted average interest rate of 3.03% and took a bank guarantee of INR 1.6 billion or $31.1 million to fund the purchase of Patni’s shares and delisting related expenses. The bank guarantee expires on July 4, 2013.

11

iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2012

On August 29, 2012, iTI, borrowed $70 million from a bank to finance the purchase of iAI. Of this, $17.5 million payable at the end of twelve months has been classified as current liability and the balance is recorded as noncurrent liability. The loan is repayable over a period of 18 months and carries an interest rate of LIBOR plus 280 basis points payable at the end of each interest period. The loan documents contain customary representations and warranties, events of default and affirmative and negative covenants, and the loan is guaranteed by the Company and several of its wholly-owned subsidiaries. As of September 30, 2012, the prevailing interest rate was 3.03%.

In connection with these term loans, the Company incurred debt issuance costs of $3.3 million of which $2.2 million is accounted for as part of prepaid expenses and other current assets and $0.6 million as part of deposits and other assets. These costs are being amortized to interest expense over the respective term of the loans using the effective interest method. The amount amortized was $0.3 million and $0.5 million for the three months and nine months ended September 30, 2012, respectively.

As of September 30, 2012, the Company was in compliance with all covenants associated with the aforementioned borrowings.

7. Senior notes

On April 29, 2011, the Company sold $770 million of 9.0% senior notes due May 1, 2016 (the “Notes”) through a private placement transaction exempt from the registration requirements of the Securities Act of 1933, pursuant to an Indenture (the “Indenture”) by and among the Company, iTI., and the trustee, as supplemented by the Supplemental Indenture dated as of May 12, 2011, by and among the Company, iTI., iGATE Holding Corporation, iGATE Inc. and the trustee. The interest is payable semiannually in cash in arrears on May 1 and November 1 of each year, beginning on November 1, 2011. The Notes are senior unsecured obligations of the Company, guaranteed by the Company’s domestic subsidiaries, as identified in Note 19. In accordance with the terms of the second supplemental indenture dated September 30, 2012, iAI, a wholly owned domestic subsidiary of iTI, was included as a guarantor to the senior notes with effect from September 1, 2012.

The terms of the Indenture governing the Notes, among other things, limits the ability of the Company and its restricted subsidiaries to (i) incur additional indebtedness or issue certain preferred stock; (ii) pay dividends on, or make distributions in respect of, their capital stock or repurchase their capital stock; (iii) make certain investments or other restricted payments; (iv) sell certain assets; (v) create liens or use assets as security in other transactions; (vi) merge, consolidate or transfer or dispose of substantially all of their assets; and (vii) engage in certain transactions with affiliates. These covenants are subject to a number of important limitations and exceptions that are described in the Indenture. The Indenture also contains certain financial covenants relating to Consolidated Priority Debt Leverage Ratio and a Fixed Charge Coverage Ratio that the Company must comply with, when any of the above events occur. As of September 30, 2012, no such events have occurred.

At any time prior to May 1, 2014, the Company may redeem the Notes in whole or in part, at its option, at a redemption price equal to 109% of the principal amount of such Notes and accrued and unpaid interest, if any, to the redemption date. At any time and from time to time on or after May 1, 2014, the Company may redeem the Notes, in whole or in part, at a redemption price equal to the percentage of principal amount set forth below plus accrued and unpaid interest to the redemption date:

12-Month period commencing	Percentage
On or after May 1, 2014		104.5	%
On or after May 1, 2015 and thereafter		100.0	%

Upon the occurrence of a change of control triggering event specified in the Indenture, the Company must offer to purchase the Notes at a redemption price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of purchase.

On December 13, 2011, the Company issued a prospectus pursuant to a Registration Rights Agreement which granted the initial purchasers and any subsequent holders of the Notes certain exchange and registration rights. The exchange offer was completed and, as of February 14, 2012, all the Notes were tendered by the Note holders.

12

iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2012

As of September 30, 2012, the amortizable debt issuance cost was $25.5 million, of which $6.3 million is accounted for as part of prepaid expenses and other current assets and $19.2 million as part of deposits and other assets. These costs are being amortized to interest expense over the balance period of approximately four years using the effective interest method. The amount amortized was $1.5 million for the three months ended September 30, 2012 and 2011, respectively, and $4.3 million and $2.3 million for the nine months ended September 30, 2012 and 2011, respectively. Interest expense for the three months ended September 30, 2012 and 2011 was $17.3 million and $17.4 million, respectively, and interest expense for the nine months ended September 30, 2012 and 2011 was $52 million and $29.4 million, respectively.

8. Income tax

The provision for income taxes consists of provisions for federal, state and foreign income taxes. The Company operates in an international environment with significant operations in various locations outside the United States. Accordingly, the consolidated income tax rate is a composite rate reflecting the earnings in various locations and the applicable tax rates. In the normal course of business, the Company is subject to examination by taxing authorities throughout the world, including such major jurisdictions as India, Canada and the United States.

The Company uses the estimated annual effective tax rate method in computing its interim tax provision. Certain items, including those deemed to be unusual, infrequent or that cannot be reliably estimated, are excluded from the estimated annual effective tax rate. In these cases, the actual tax expense or benefit applicable to those items is treated discretely, and is reported in the same period as the related item. The Company’s effective tax rate (“ETR”) was 23.1% and 25.7% for the three and nine months ended September 30, 2012, respectively. For the three and nine months ended September 30, 2011, the Company’s ETR was (19.4)% and 15.6%, respectively. The difference in the ETR as compared to the U.S. statutory rate of 35.0% and 34.0% during 2012 and 2011, respectively, is primarily attributable to the benefit from a tax holiday in India and additional tax benefits on account of reversal of valuation allowance which is explained below.

Under the Indian Income Tax Act, 1961, companies or units set up in a Special Economic Zone (“SEZ”) are eligible to claim an income tax holiday of 100% for the initial five consecutive assessment years followed by 50% for the subsequent ten consecutive assessment years on the profits derived from the export of software services from the divisions registered under the SEZ. For the three months ended September 30, 2012 and 2011, the tax holiday resulted in income tax benefits of $2.4 million and $2.1 million, respectively, when calculated at the statutory U.S. rate. For the nine months ended September 30, 2012 and 2011, the tax holiday resulted in income tax benefits of $5.9 million and $5.8 million, respectively, when calculated at the statutory U.S. rate.

Assessment of Deferred Tax Asset (“DTA”) Valuation Allowances

Subsequent to the acquisition of iAI by iTI in August 2012 iAI shall now be included with iTI while filing the consolidated return. Filing of the consolidated return is considered a change in the tax strategy to realize deferred tax asset in a tax effective manner and resulting in an assessment that the deferred tax asset will more-likely-than-not be realized prior to their expiration as a result of increase in future taxable income. The Company anticipates generating such taxable income due to a substantial number of new contracts being entered into the entities included in the new consolidated group for tax return purposes. As a result of this tax planning strategy, we have released $4.0 million of the deferred tax asset valuation allowance relating to iTI existing as of December 31, 2011. The valuation allowance related to the deferred tax assets on temporary differences of iTI where it was more likely than not that all or some portion of the asset will not be realized due to the inability to generate sufficient taxable income in the period and/or of the character necessary to utilize the benefit of the deferred tax asset as on December 31, 2011. The release as stated above, was triggered as a result of the acquisition of iAI by iTI in August 2012.

ASC 740-10 reserves:

A reconciliation of the beginning and ending amounts of gross unrecognized tax benefits are as follows (in thousands):

	Amount
Balance as of January 1, 2012	$	30,224
Additions based on the current period tax positions		13
Reductions based on the prior period tax positions		(1,292	)
Foreign currency translation effect		(27	)
Balance as of September 30, 2012	$	28,918

The Company recognizes interest and penalties related to uncertain tax positions in other income, net. As of September 30, 2012, the Company had $1.7 million of accrued interest and penalties related to uncertain tax positions.

As of September 30, 2012, the Company had $24.0 million of net unrecognized tax benefits arising out of tax positions which would affect the effective tax rate, if recognized. Although it is difficult to anticipate the final outcome on timing of resolution of any particular uncertain tax position, the Company believes that the total amount of unrecognized tax benefits will be decreased by approximately $6.4 million during the next twelve months due to the expiration of the statute of limitations.

13

iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2012

9. Earnings Per Share

The Company computes earnings per share in accordance with ASC Topic 260, “Earnings per share”and ASC Topic 260-10-45 “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities”. Basic earnings per share for different classes of stock (common stock, unvested restricted stock and the Series B Preferred Stock) is calculated by dividing net income available to each class by the weighted average number of shares of each class. Diluted earnings per share is computed using the weighted average number of common stock, unvested restricted stock plus the potentially dilutive effect of common stock and Series B Preferred Stock equivalents. Earnings per share for the common stock, unvested restricted stock and Series B Preferred Stock under the two class method are presented below (dollars and shares in thousands, except per share data):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Net income attributable to iGATE common shareholders	$	20,771	$	7,400	$	43,123	$	20,846
Add: Dividend on Series B Preferred Stock		7,419		6,769		21,590		15,131
		28,190		14,169		64,713		35,977
Less: Dividends paid on
Series B Preferred Stock [A]		7,419		6,769		21,590		15,131
Undistributed Income	$	20,771	$	7,400	$	43,123	$	20,846
Allocation of Undistributed Income :
Common stock [B]	$	15,712	$	5,674	$	32,619	$	15,983
Unvested restricted stock [C]		12		22		26		62
Series B Preferred Stock [D]		5,047		1,704		10,478		4,801
	$	20,771	$	7,400	$	43,123	$	20,846
Shares outstanding for allocation of undistributed income:
Common stock		57,318		56,598		57,318		56,598
Unvested restricted stock		45		219		45		219
Series B Preferred Stock		18,411		17,002		18,411		17,002
		75,774		73,819		75,774		73,819
Weighted average shares outstanding:
Common stock [E]		57,271		56,616		57,076		56,478
Unvested restricted stock [F]		45		221		45		224
Participating preferred stock [G]		18,411		17,002		18,411		17,002
		75,727		73,839		75,532		73,704
Weighted average common stock outstanding		57,271		56,616		57,076		56,478
Dilutive effect of stock options and restricted shares outstanding		1,622		1,330		1,638		1,428
Dilutive weighted average shares outstanding[H]		58,893		57,946		58,714		57,906
Distributed earnings per share:
Series B Preferred Stock [I=A/G]	$	0.40	$	0.40	$	1.17	$	0.89
Undistributed earnings per share:
Common stock [J=B/E]	$	0.27	$	0.10	$	0.57	$	0.28
Unvested restricted stock [K=C/F]	$	0.27	$	0.10	$	0.57	$	0.28
Series B Preferred Stock [L=D/G]	$	0.27	$	0.10	$	0.57	$	0.28
Basic earnings per share from operations:
Common stock [J]	$	0.27	$	0.10	$	0.57	$	0.28
Unvested restricted stock [K]	$	0.27	$	0.10	$	0.57	$	0.28
Series B Preferred Stock [I+L]	$	0.67	$	0.50	$	1.74	$	1.17
Diluted earnings per share from operations [[B+C]/H]	$	0.27	$	0.10	$	0.56	$	0.28

14

iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2012

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 0.8 million and 0.6 million shares for the three months ended September 30, 2012 and September 30, 2011, respectively, and 0.6 million shares for each of the nine months ended September 30, 2012 and 2011. These options were excluded from the computation of diluted earnings per share under the treasury stock method. The number of shares of outstanding Series B Preferred Stock for which the earnings per share exceeded the earnings per share of common stock aggregated to 18.4 million and 17.0 million for the three and nine months ended September 30, 2012 and 2011, respectively. These shares were excluded from the computation of diluted earnings per share as they were anti-dilutive.

10. Investments

Short term investments comprise the following (in thousands):

	As of September 30, 2012
	Carrying Value		Unrealized Gain		Fair Value
Mutual Funds
Liquid mutual funds	$	366,822	$	1,220	$	368,042
Fixed maturity plan funds		3,785		247		4,032
Certificate of deposits with bank and others		73,232		4,723		77, 955
	$	443,839	$	6,190	$	450,029

	As of December 31, 2011
	Carrying Value		Unrealized Gain			Fair Value
Mutual Funds
Liquid mutual funds	$	231,422	$	(81	)	$	231,341
Fixed maturity plan funds		111,559		2,728			114,287
Certificate of deposits with bank and others		8,621		279			8,900
	$	351,602	$	2,926		$	354,528

Contractual maturities of short-term and other investments in available for sale securities as of September 30, 2012 and December 31, 2011 were as follows (in thousands):

	As of
	September 30, 2012		December 31, 2011
Due within one year	$	450,029	$	354,528

15

iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2012

Dividends from available for sale securities and gross realized gains and losses on sale of available for sale securities are as follows (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2012		2011			2012			2011
Dividends	$	0	$	3,691		$	5,378		$	6,922
Gross realized gains		8,572		157			17,743			1,184
Gross realized losses		0		(226	)		(674	)		(376	)
	$	8,572	$	3,622		$	22,447		$	7,730

11. Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss was as follows (in thousands):

	As of
	September 30, 2012			December 31, 2011
Net unrealized gain (loss) on cash flow hedges	$	297		$	(18,524	)
Net unrealized gain on marketable securities		4,421			2,178
Actuarial gain (loss) relating to defined benefit plan		(238	)		20
Loss on foreign currency translation adjustment		(227,096	)		(198,315	)
Accumulated other comprehensive loss	$	(222,616	)	$	(214,641	)

The changes in the gross unrealized gain on marketable securities carrying value for the three and nine months ended September 30, 2012 and 2011 are as follows (in thousands):

	Three Months  Ended September 30,					Nine Months Ended September 30,
	2012			2011		2012			2011
Unrealized gain on marketable securities at the beginning of the period	$	5,296		$	974	$	2,926		$	673
Reclassification of loss (gain) into earnings on maturity		(8,572	)		69		(17,069	)		(808	)
Net unrealized gain due to changes in the fair value		9,466			2,066		20,333			3,244
Unrealized gain on marketable securities at the end of the period	$	6,190		$	3,109	$	6,190		$	3,109

16

iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2012

12. Derivative Instruments and Hedging Activities

The Company enters into foreign currency forward and option contracts (“derivative contracts”) to mitigate and manage the risk of changes in foreign exchange rates on inter-company and end customer accounts receivables and forecasted sales and inter-company transactions. The Company hedges anticipated sales transactions that are subject to foreign exchange exposure with derivative contracts that are designated effective and that qualify as cash flow hedges under ASC Topic 815, “Derivatives and Hedging”.

As part of hedge strategy, the Company also enters into derivative contracts which are replaced with successive new contracts up to the period in which the forecasted transaction is expected to occur i.e. (roll-over hedges). In case of rollover hedges, the hedge effectiveness is assessed based on changes in fair value to the extent of changes in spot prices and recorded in accumulated other comprehensive income (loss) until the hedged transactions occur, at which time it is recognized in the consolidated statements of income. Accordingly, the changes in the fair value of the contract related to the changes in the difference between the spot price and the forward price (i.e.forward premium/discount) are excluded from assessment of hedge effectiveness and is recognized in the consolidated statements of income as part of foreign exchange gain (loss).

In respect of derivative contracts which hedge the foreign currency risk associated with the both anticipated sales transaction and the collection thereof (dual purpose hedges), the hedge effectiveness is assessed based on overall changes in fair value with the effective portion of gains or losses included in accumulated other comprehensive income (loss). The effective portion of gain or loss attributable to forecasted sales are reclassified from accumulated other comprehensive income (loss) and recognized in consolidated statements of income as part of foreign exchange gain (loss) when the sales transaction occurs. Following the date of sales transaction, the Company reclassifies an amount from accumulated other comprehensive income (loss) to earnings to offset foreign currency translation gain (loss) recorded for the respective receivable during the period. In addition, the Company determines the amount of cost to be ascribed to each period of the hedging relationship based on the functional currency interest rate implicit in the hedging relationship and recognizes this cost by reclassifying it from accumulated other comprehensive income (loss) to consolidated statements of income as part of foreign exchange gain (loss) for recognized receivables based on the pro rata method.

Changes in the fair value of cash flow hedges deemed ineffective are recognized in the consolidated statement of income and are included in foreign exchange gain (loss). The Company also uses derivative contracts not designated as hedging instruments under ASC No. 815, to hedge intercompany and end customer accounts receivables and other monetary assets denominated in currencies other than the functional currency. Changes in the fair value of these derivatives are recognized in the consolidated statements of income as part of foreign exchange gain (loss).

In respect of derivatives designated as hedges, the Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The Company evaluates hedge effectiveness at the time a contract is entered into as well as on an ongoing basis. If during this time, a contract is deemed ineffective, the change in the fair value is recorded in the consolidated statements of income and is included in foreign exchange gain (loss). In situations in which hedge accounting is discontinued and the derivative remains outstanding, the net derivative gain or loss continue to be reported in accumulated other comprehensive income unless it is probable that the forecasted transaction will not occur by the end of the originally specified time period (as documented at the inception of the hedging relationship) or within an additional two-month period of time thereafter.

17

iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2012

The following table presents information related to foreign currency contracts held:

OUTSTANDING HEDGE TRANSACTIONS QUALIFYING FOR HEDGE ACCOUNTING AS OF SEPTEMBER 30, 2012 (in thousands)

	Maturity Date Ranges	Strike Price At Rupee Rate Ranges		Amount		Fair Value as of September 30, 2012
FORWARD CONTRACTS USD
From:	31-October-12		51.99
To:	28-February-13		58.25
Subtotal				$	128,000	$	3,471
FORWARD CONTRACTS CAD
From:	31-October-12		52.22
To:	31-May-13		56.84
Subtotal				$	23,972	$	5
FORWARD CONTRACTS GBP
From:	31-October-12		83.87
To:	31-May-13		91.36
Subtotal				$	12,962	$	75
						$	3,551

OUTSTANDING HEDGE TRANSACTIONS NOT QUALIFYING FOR HEDGE ACCOUNTING AS OF SEPTEMBER 30, 2012 (in thousands)

	Maturity Date Ranges	Strike Price At Rupee Rate Ranges		Amount		Fair Value as of September 30, 2012
CURRENCY OPTION CONTRACTS USD
From:	29-May-13		46.75
To:	29-May-13		48.75
Subtotal				$	5,000	$	(584	)
FORWARD CONTRACTS USD
From:	12-October-12		41.16
To:	31-March-13		53.84
Subtotal				$	123,500	$	(6,216	)
FORWARD CONTRACTS GBP
From:	31-October-12		85.45
To:	31-October-12		87.13
Subtotal				$	9,398	$	83
						$	(6,717	)

18

iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2012

The effect of Derivative Instruments on the Condensed Consolidated Statements of Income for the three months ended September 30, 2012 (in thousands):

Derivatives in ASC Topic 815 Cash Flow Hedging Relationships	Amount of Gain/(Loss) recognized in OCI on Derivative		Location of Gain/(Loss) reclassified from Accumulated OCI into Income	Amount of Gain/(Loss) reclassified from Accumulated OCI into Income			Location of Gain/(Loss) recognized in Income on Derivative	Amount of Gain  /(Loss) recognized in Income Statement
	(Effective Portion)		(Effective Portion)				(Ineffective Portion and amount excluded from effectiveness testing)
	September 30, 2012		September 30, 2012				September 30, 2012
Foreign Exchange Contracts	$	7,570	Foreign exchange gain (loss), net	$	(10,645	)	Foreign exchange gain (loss), net	$	(2,650	)

The effect of Derivative Instruments on the Condensed Consolidated Statements of Income for the nine months ended September 30, 2012 (in thousands):

Derivatives in ASC Topic 815 Cash Flow Hedging Relationships	Amount of Gain/(Loss) recognized in OCI on Derivative		Location of Gain/(Loss) reclassified from Accumulated OCI into Income	Amount of Gain/(Loss) reclassified from Accumulated OCI into Income			Location of Gain/(Loss) recognized in Income on Derivative	Amount of Gain  /(Loss) recognized in Income Statement
	(Effective Portion)		(Effective Portion)				(Ineffective Portion and amount excluded from effectiveness testing)
	September 30, 2012		September 30, 2012				September 30, 2012
Foreign Exchange Contracts	$	4,333	Foreign exchange gain (loss), net	$	(27,233	)	Foreign exchange gain (loss), net	$	(9,622	)

* Includes deferred loss on settled rollover derivatives amounting to $1.1 million and gain of $8.1 million for three months and nine months ended September 30, 2012 respectively.

19

iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2012

The effect of Derivative Instruments on the Condensed Consolidated Statements of Income for the three months ended September 30, 2011 (in thousands):

Derivatives in ASC Topic 815 Cash Flow Hedging Relationships	Amount of Gain/(Loss) recognized in OCI on Derivative			Location of Gain/(Loss) reclassified from Accumulated OCI into Income	Amount of Gain/(Loss) reclassified from Accumulated OCI into Income		Location of Gain/(Loss) recognized in Income on Derivative	Amount of Gain  /(Loss) recognized in Income Statement
	(Effective Portion)			(Effective Portion)			(Ineffective Portion and amount excluded from effectiveness testing)
	September 30, 2011			September 30, 2011			September 30, 2011
Foreign Exchange Contracts	$	(8,443	)	Foreign exchange gain (loss), net	$	872	Foreign exchange gain (loss), net	$	(4	)

The effect of Derivative Instruments on the Condensed Consolidated Statements of Income for the nine months ended September 30, 2011 (in thousands):

Derivatives in ASC Topic 815 Cash Flow Hedging Relationships	Amount of Gain/(Loss) recognized in OCI on Derivative			Location of Gain/(Loss) reclassified from Accumulated OCI into Income	Amount of Gain/(Loss) reclassified from Accumulated OCI into Income		Location of Gain/(Loss) recognized in Income on Derivative	Amount of Gain  /(Loss) recognized in Income Statement
	(Effective Portion)			(Effective Portion)			(Ineffective Portion and amount excluded from effectiveness testing)
	September 30, 2011			September 30, 2011			September 30, 2011
Foreign Exchange Contracts	$	(7,557	)	Foreign exchange gain (loss), net	$	1,596	Foreign exchange gain (loss), net	$	(4	)

20

iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2012

Derivatives not designated as hedging instruments (dollars in thousands):

	Three months ended September 30,					Nine months ended September 30,
	2012		2011			2012		2011
Statement of Income
Foreign exchange gain/(loss), net	$	5,313	$	(14,038	)	$	132	$	(11,310	)

These foreign currency exchange contracts were entered into to hedge the fluctuations in foreign exchange rates for recognized balance sheet items such as inter-company and end customer receivables, and were not originally designated as hedges. Realized gains (losses) and changes in the fair value of these derivatives are recorded in foreign exchange gains (losses), net in the unaudited condensed consolidated statements of income.

Information on the location and amounts of derivative fair values in the Condensed Consolidated Balance Sheets (in thousands):

Derivative Instruments – Foreign Exchange Contracts
		September 30, 2012		December 31, 2011
Balance Sheet Location	Designated/Not Designated	Fair Value		Fair Value
Current Assets	Designated	$	5,046	$	98
	Not Designated	$	1,189	$	179
Current liabilities	Designated	$	1,495	$	11,731
	Not Designated	$	7,906	$	740
Non-current liabilities	Designated	$	0	$	6,739
	Not Designated	$	0	$	0

The estimated net amount of existing gains, net of taxes, as of September 30, 2012 that is expected to be reclassified from accumulated other comprehensive income into earnings within the next 12 months is $0.3 million.

As of January 1, 2012, the Company discontinued designation of all dual purpose hedge and certain other currency option contracts. Accordingly the net derivative (gain) or loss continues to be reported in accumulated other comprehensive income since the Company expects that the forecasted transaction will occur by end of the originally specified time period. As of September 30, 2012, accumulated other comprehensive income in respect of such dedesignated contracts amounted to $2.3 million.

13. Fair Value Measurements

FASB ASC Topic 820 “Fair Value Measurements” establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

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

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

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

21

iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2012

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

In accordance with ASC 820, assets and liabilities are to be measured based on the following valuation techniques:

Market approach – Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

Income approach – Converting the future amounts based on the market expectations to its present value using the discounting methodology.

Cost approach – Replacement cost method.

The Company uses the market approach for measuring the fair value of the assets and liabilities. Cash equivalents, short term investments comprising of money market mutual funds and foreign currency derivative contracts are measured at fair value. The cash equivalents and money market mutual funds are valued using quoted market prices and classified within Level 1. The foreign currency derivative contracts are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments in active markets.

Assets and liabilities measured at fair value are summarized below (in thousands):

Description	September 30, 2012		Fair value measurement at reporting date using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
			(Level 1)		(Level 2)		(Level 3)
Assets
Short term investments:
Liquid mutual fund units	$	368,042	$	368,042	$	0	$	0
Fixed maturity fund units		4,032		0		4,032		0
Certificate of deposits with bank and others		77, 955		0		77, 955		0
Foreign exchange derivative contracts		6,235		0		6,235		0
Total current assets	$	456,264	$	368,042	$	88,222	$	0
Liabilities
Current liabilities:
Foreign currency exchange derivatives	$	9,401	$	0	$	9,401	$	0
Total current liabilities	$	9,401	$	0	$	9,401	$	0

22

iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2012

Description	December 31, 2011		Fair value measurement at reporting date using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
			(Level 1)		(Level 2)		(Level 3)
Assets
Short term investments:
Liquid mutual fund units	$	231,341	$	231,341	$	0	$	0
Fixed maturity fund units		114,287		0		114,287		0
Certificate of Deposits with banks and others		8,900		0		8,900		0
Foreign exchange derivative contracts		277		0		277		0
Total current assets	$	354,805	$	231,341	$	123,464	$	0
Liabilities
Current Liabilities:
Foreign currency exchange derivatives	$	12,471	$	0	$	12,471	$	0
Total current liabilities	$	12,471	$	0	$	12,471	$	0
Non current liabilities:
Foreign exchange derivative contracts	$	6,739	$	0	$	6,739	$	0
Total non-current liabilities	$	6,739	$	0	$	6,739	$	0

14. Employee Benefits

Defined Contribution Plan

The Company’s eligible employees in India participate in the Employees’ Provident Fund (the “Provident Fund”), which is a defined contribution plan. The employee and the Company make monthly contributions of a specified percentage of salary to the Provident Fund, which is administered by the prescribed authority in India. The aggregate contributions along with interest thereon are paid at retirement, death, incapacitation or termination of employment. The Company’s contribution to the Provident Fund for the three months ended September 30, 2012 and 2011 was $2.1 million and $2.2 million, respectively. The Company’s contribution to the Provident Fund for the nine months ended September 30, 2012 and 2011 was $6.3 million and $4.4 million, respectively.

401(k) Plan

The Company’s eligible employees in the United States participate in an employee retirement savings plan (the “401(k) Plan”) under Section 401(k) of the United States Internal Revenue Code. The Plan allows for employees to defer a portion of their annual earnings on a pre-tax basis through voluntary contributions to the 401(k) Plan. The 401(k) Plan does not provide for any Company matching.

23

iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2012

Defined Benefit Plan

The Company provides for gratuity, a defined benefit retirement plan (the “Plan”) covering eligible employees in India. The Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, subject to a specified period of service based on the respective employees’ salary and tenure of employment. Liabilities with regard to the Plan are determined by actuarial valuation.

The following table sets forth the net periodic cost recognized by the Company in respect of the Plan (in thousands):

	Three Months  Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Net periodic plan cost
Service cost	$	1,215		$	807		$	2,709		$	1,487
Interest cost		271			297			827			573
Expected return on plan asset		(195	)		(235	)		(596	)		(455	)
Recognized net actuarial gain		(4	)		(18	)		(1	)		(15	)
Net periodic plan cost for the period	$	1,287		$	851		$	2,939		$	1,590

Other Pension Benefits

Two former founder directors of Patni are entitled to receive pension benefits upon retirement or on termination from employment at the rate of 50% of their last drawn monthly salary. The pension is payable from the time the eligible individual reaches the age of 65 years and is payable to the respective individuals or the surviving spouse. In 2011, Patni settled the pension liability for one of the founder directors by purchasing a non participating annuity contract which discharged the Company of all future pension obligations to this individual and constitutes settlement of liability.

For the other founder director, the payment of pension will start when he reaches the age of 65. Patni has invested in a plan with Life Insurance Corporation of India which will mature at the time this founder director reaches age 65. Since the Company is obligated to fund the shortfall, if any, between annuity payable and the value of plan assets, the pension liability is actuarially valued at each balance sheet date.

Another former founder and executive director with Patni is entitled to receive pension benefits upon retirement or on termination of employment at the rate of 50% of his last drawn monthly salary. The pension is payable from the time the eligible individual reaches the age of 71 years and is payable to the respective individual or the surviving spouse. In 2011, Patni settled the pension liability by funding a non participating annuity contract which discharges the Company of all future pension obligations to this individual.

24

iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2012

15. Share-based compensation

During the three and nine months ended September 30, 2012, the Company granted 25,000 and 527,000 options, respectively, and 110,000 and 798,750 stock awards, respectively. During the three and nine months ended September 30, 2011, the Company granted nil and 158,000 options, respectively, and 31,400 and 1,994,811 stock awards, respectively.

Share-based compensation expense recorded in income from operations during the three and nine months ended September 30, 2012 and 2011 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Share-based compensation recorded in
Cost of revenues	$	1,252	$	884	$	2,793	$	1,935
Selling, general and administrative expense		2,543		3,462		6,477		6,933
Total share-based compensation expense	$	3,795	$	4,346	$	9,270	$	8,868

During the three and nine months ended September 30, 2012, the Company issued 0.1 million and 0.6 million shares, respectively, upon exercise of stock options and awards. During the three and nine months ended September 30, 2011, the Company issued 0.1 million and 0.4 million shares, respectively, upon exercise of stock options and awards.

16. Other income

Components of other income for the three and nine months ended September 30, 2012 and 2011 (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Investment income	$	8,697		$	3,674		$	23,556		$	7,879
Gain (loss) on sale of fixed assets		13			(2	)		(32	)		24
Other		105			473			451			650
Other income, net	$	8,815		$	4,145		$	23,975		$	8,553
			��

17. Concentration of revenues

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

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
General Electric Company		13	%		12	%		13	%		11	%
Royal Bank of Canada		11	%		11	%		10	%		17	%

25

iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2012

18. Segment Information

Following the delisting of Patni from the Indian Stock Exchanges in May 2012, the Company’s Chief Executive Officer, who is the chief decision making officer, determined that the business will be operated and managed as a single segment. Hence, no segment information is provided.

19. Guarantor Subsidiaries - Supplemental condensed consolidating financial information

In connection with the Patni Acquisition, the Company issued the Notes which are the senior unsecured obligations of the Company. The Notes are guaranteed by the Company’s wholly owned domestic subsidiaries iTI, iGATE Inc., and iGATE Holding Corporation (collectively, the “Guarantors”). In accordance with the terms of the second supplemental indenture dated September 30, 2012, iAI was included as a guarantor to the Notes with effect from September 1, 2012. The Company has not included separate financial statements of the Guarantors because they are wholly-owned by the Company, the guarantees issued are full and unconditional, and the guarantees are joint and several.

26

iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2012

Condensed consolidating financial information for the Company and the Guarantors are as follows (in thousands):

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2012

	Issuer			Guarantors			Non- Guarantors			Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	0		$	23,888		$	73,820		$	0		$	97,708
Restricted cash		0			0			11,400			0			11,400
Short-term investments		0			0			450,029			0			450,029
Accounts receivable, net		0			79,333			117,338			(35,579	)		161,092
Unbilled revenues		0			40,068			51,310			0			91,378
Prepaid expenses and other current assets		6,259			4,920			36,983			0			48,162
Prepaid income taxes		0			5,940			2,244			0			8,184
Deferred tax assets		0			10,790			14,727			0			25,517
Foreign exchange derivative contracts		0			0			6,235			0			6,235
Receivable from Mastech		0			0			0			0			0
Receivable from group companies		149,795			0			0			(149,795	)		0
Total current assets		156,054			164,939			764,086			(185,374	)		899,705
Investment in subsidiaries		330,000			1,086,035			0			(1,416,035	)		0
Intercorporate loan		770,000			0			0			(770,000	)		0
Deposits and other assets		19,281			1,356			7,416			0			28,053
Prepaid income taxes		0			0			23,769			0			23,769
Property and equipment, net		0			1,990			161,480			0			163,470
Leasehold Land		0			0			90,623			0			90,623
Deferred tax assets		0			10,537			17,141			0			27,678
Goodwill		0			656			512,433			0			513,089
Intangible assets, net		0			263			152,588			0			152,851
Total assets	$	1,275,335		$	1,265,776		$	1,729,536		$	(2,371,409	)	$	1,899,238
LIABILITIES, REDEEMABLE NON CONTROLLING INTEREST, PREFERRED STOCK AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	0		$	25,953		$	9,825		$	(29,069	)	$	6,709
Line of credit		0			5,000			52,000			0			57,000
Term loan		0			17,500			0			0			17,500
Accrued payroll and related costs		0			16,063			38,138			0			54,201
Other accrued liabilities		28,875			22,147			46,082			0			97,104
Accrued income taxes		0			0			775			0			775
Foreign exchange derivative contracts		0			0			9,401			0			9,401
Deferred revenue		0			4,135			12,482			0			16,617
Payable to group companies		0			96,016			2,476			(98,492	)		0
Total current liabilities		28,875			186,814			171,179			(127,561	)		259,307
Other long-term liabilities		0			774,000			6,495			(776,298	)		4,197
Senior notes		770,000			0			0			0			770,000
Term loans		0			52,500			225,500			0			278,000
Foreign Exchange derivative contracts		0			0			0			0			0
Accrued income taxes		0			820			23,131			0			23,951
Deferred tax liabilities		0			0			61,354			0			61,354
Total liabilities		798,875			1,014,134			487,659			(903,859	)		1,396,809
Redeemable non controlling interest		0			0			39,555			0			39,555
Series B Preferred stock		370,908			0			0			0			370,908
iGATE Corporation shareholders’ equity
Common shares		583			330,000			53,322			(383,322	)		583
Common shares held in treasury, at cost		(14,714	)		0			0			0			(14,714	)
Additional paid-in capital		196,301			811			1,068,213			(1,084,228	)		181,097
Retained earnings		(76,618	)		(79,266	)		303,500			0			147,616
Accumulated other comprehensive loss		0			97			(222,713	)		0			(222,616	)
Total iGATE Corporation shareholder’s equity		105,552			251,642			1,202,322			(1,467,550	)		91,966
Non controlling interest		0			0			0			0			0
Total liabilities, redeemable non controlling interest, preferred stock and shareholders’ equity	$	1,275,335		$	1,265,776		$	1,729,536		$	(2,371,409	)	$	1,899,238

27

iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2012

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2011

	Issuer			Guarantors			Non- Guarantors			Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	0		$	7,384		$	68,056		$	0		$	75,440
Restricted cash		0			0			0			0			0
Short-term investments		0			0			354,528			0			354,528
Accounts receivable, net		0			15,197			158,350			(836	)		172,711
Unbilled revenues		0			3,364			42,149			(290	)		45,223
Prepaid expenses and other current assets		5,808			610			12,334			0			18,752
Prepaid income taxes		0			0			8,341			0			8,341
Deferred tax assets		0			0			20,574			0			20,574
Foreign exchange derivative contracts		0			0			277			0			277
Receivable from Mastech		0			0			187			0			187
Receivable from group companies		121,004			0			0			(121,004	)		0
Total current assets		126,812			26,555			664,796			(122,130	)		696,033
Investment in subsidiaries		330,000			1,052,660			1,263,841			(2,646,501	)		0
Intercorporate loan		770,000			0			0			(770,000	)		0
Deposits and other assets		23,993			17			8,092			0			32,102
Prepaid income taxes		0			0			18,481			0			18,481
Property and equipment, net		0			471			175,201			0			175,672
Lease hold Land		0			0			90,339			0			90,339
Deferred tax assets		0			0			30,456			0			30,456
Goodwill		0			1,026			510,184			(150	)		511,060
Intangible assets, net		0			0			160,706			0			160,706
Total assets	$	1,250,805		$	1,080,729		$	2,922,096		$	(3,538,781	)	$	1,714,849
LIABILITIES, REDEEMABLE NON CONTROLLING INTEREST, PREFERRED STOCK AND SHAREHOLDER’S EQUITY
Current liabilities:
Accounts payable	$	0		$	100		$	7,757		$	0		$	7,857
Line of credit		0			5,000			52,000			0			57,000
Term loan		0			0			0			0			0
Accrued payroll and related costs		0			10,349			61,564			0			71,913
Other accrued liabilities		11,550			5,494			60,944			0			77,988
Accrued income taxes		0			2,506			1,487			0			3,993
Foreign exchange derivative contracts		0			0			12,471			0			12,471
Deferred revenue		0			1,607			20,805			0			22,412
Payable to group companies		0			17,763			104,368			(122,131	)		0
Total current liabilities		11,550			42,819			321,396			(122,131	)		253,634
Other long-term liabilities		0			770,000			4,610			(770,000	)		4,610
Senior notes		770,000			0			0			0			770,000
Term loans		0			0			0			0			0
Foreign exchange derivative contracts		0			0			6,739			0			6,739
Accrued income taxes		0			0			17,672			0			17,672
Deferred tax liabilities		0			0			58,992			0			58,992
Total liabilities		781,550			812,819			409,409			(892,131	)		1,111,647
Redeemable non controlling interest		0			0			0			0			0
Series B Preferred stock		349,023			0			0			0			349,023
iGATE Corporation Shareholders’ equity
Common shares		576			330,000			58,700			(388,699	)		577
Common shares held in treasury, at cost		(14,714	)		0			0			0			(14,714	)
Additional paid-in capital		184,843			794			2,512,196			(2,496,552	)		201,281
Retained earnings		(50,473	)		(62,980	)		226,532			(8,586	)		104,493
Accumulated other comprehensive loss		0			96			(284,741	)		70,004			(214,641	)
Total iGATE Corporation shareholder’s equity		120,232			267,910			2,512,687			(2,823,833	)		76,996
Non controlling interest		0			0			0			177,183			177,183
Total liabilities, redeemable non controlling interest, preferred stock and shareholders’ equity	$	1,250,805		$	1,080,729		$	2,922,096		$	(3,538,781	)	$	1,714,849

28

iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2012

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

FOR THREE MONTHS ENDED SEPTEMBER 30, 2012

	Issuer			Guarantors			Non- Guarantors			Eliminations			Consolidated
Revenues	$	0		$	93,739		$	207,427		$	(30,076	)	$	271,090
Cost of revenues (exclusive of depreciation and amortization)		0			68,549			124,796			(30,076	)		163,269
Gross margin		0			25,190			82,631			0			107,821
Selling, general and administrative expense		0			5,646			38,418			0			44,064
Depreciation and amortization		0			100			9,927			0			10,027
Income from operations		0			19,444			34,286			0			53,730
Interest expense		(18,795	)		(177	)		(3,022	)		0			(21,994	)
Foreign exchange gain (loss), net		0			121			(3,884	)		0			(3,763	)
Equity in loss in affiliated company		0			0			0			0			0
Other income (expense), net		17,325			(17,323	)		8,813			0			8,815
Income before income taxes		(1,470	)		2,065			36,193			0			36,788
Income tax expense (benefit)		0			(978	)		9,473			0			8,495
Net income (loss)		(1,470	)		3,043			26,720			0			28,293
Non controlling interest		0			0			0			0			0
Net income attributable to iGATE Corporation		(1,470	)		3,043			26,720			0			28,293
Accretion to preferred stock		103			0			0			0			103
Preferred dividend		7,419			0			0			0			7,419
Net income attributable to iGATE common shareholders	$	(8,992	)		3,043			26,720			0			20,771

29

iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2012

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

FOR THREE MONTHS ENDED SEPTEMBER 30, 2011

	Issuer			Guarantors			Non- Guarantors			Eliminations			Consolidated
Revenues	$	0		$	21,827		$	255,688		$	(11,791	)	$	265,724
Cost of revenues (exclusive of depreciation and amortization)		0			14,789			164,567			(11,791	)		167,565
Gross margin		0			7,038			91,121			0			98,159
Selling, general and administrative expense		0			244			46,501			0			46,745
Depreciation and amortization		0			42			13,625			0			13,667
Income from operations		0			6,752			30,995			0			37,747
Interest expense		(18,996	)		(29,429	)		(550	)		29,429			(19,546	)
Foreign exchange gain (loss), net		0			0			(7,874	)		0			(7,874	)
Equity in loss in affiliated company		0			0			(62	)		0			(62	)
Other income (expense), net		29,429			21			4,124			(29,429	)		4,145
Income before income taxes		10,433			(22,656	)		26,633			0			14,410
Income tax expense (benefit)		0			(3,059	)		266			0			(2,793	)
Net income (loss)		10,433			(19,597	)		26,367			0			17,203
Non controlling interest		0			0			2,950			0			2,950
Net income attributable to iGATE Corporation		10,433			(19,597	)		23,417			0			14,253
Accretion to preferred stock		84			0			0			0			84
Preferred dividend		6,769			0			0			0			6,769
Net income attributable to iGATE common shareholders	$	3,580		$	(19,597	)	$	23,417		$	0		$	7,400

30

iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2012

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

FOR NINE MONTHS ENDED SEPTEMBER 30, 2012

	Issuer			Guarantors			Non- Guarantors			Eliminations			Consolidated
Revenues	$	0		$	196,451		$	700,736		$	(94,839	)	$	802,348
Cost of revenues (exclusive of depreciation and amortization)		0			136,796			446,423			(94,839	)		488,380
Gross margin		0			59,655			254,313			0			313,968
Selling, general and administrative expense		0			4,117			123,231			0			127,348
Depreciation and amortization		0			187			36,570			0			36,757
Income from operations		0			55,351			94,512			0			149,863
Interest expense		(56,235	)		(260	)		(5,654	)		0			(62,149	)
Foreign exchange gain (loss), net		0			105			(18,303	)		0			(18,198	)
Equity in loss in affiliated company		0			0			0			0			0
Other income (expense), net		51,975			(51,973	)		23,973			0			23,975
Income before income taxes		(4,260	)		3,223			94,528			0			93,491
Income tax expense (benefit)		0			(1,700	)		25,707			0			24,007
Net income (loss)		(4,260	)		4,923			68,821			0			69,484
Non controlling interest		0			0			4,476			0			4,476
Net income attributable to iGATE Corporation		(4,260	)		4,923			64,345			0			65,008
Accretion to preferred stock		295			0			0			0			295
Preferred dividend		21,590			0			0			0			21,590
Net income attributable to iGATE common shareholders	$	(26,145	)	$	4,923		$	64,345			0		$	43,123

31

iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2012

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

FOR NINE MONTHS ENDED SEPTEMBER 30, 2011

	Issuer			Guarantors			Non- Guarantors			Eliminations			Consolidated
Revenues	$	0		$	58,863		$	486,247		$	(33,171	)	$	511,939
Cost of revenues (exclusive of depreciation and amortization)		0			43,630			313,104			(33,171	)		323,563
Gross margin		0			15,233			173,143			0			188,376
Selling, general and administrative expense		0			13,680			95,235			0			108,915
Depreciation and amortization		0			109			24,923			0			25,032
Income from operations		0			1,444			52,985			0			54,429
Interest expense		(31,738	)		(29,429	)		(1,096	)		29,429			(32,834	)
Foreign exchange gain (loss), net		0			(4	)		16,850						16,846
Equity in loss in affiliated company		0			0			(52	)		0			(52	)
Other income (expense), net		29,429			43			8,510			(29,429	)		8,553
Income before income taxes		(2,309	)		(27,946	)		77,197			0			46,942
Income tax expense (benefit)		0			1,473			5,841			0			7,314
Net income (loss)		(2,309	)		(29,419	)		71,356			0			39,628
Non controlling interest		0			0			3,437			0			3,437
Net income attributable to iGATE Corporation		(2,309	)		(29,419	)		67,919			0			36,191
Accretion to preferred stock		214			0			0			0			214
Preferred dividend		15,131			0			0			0			15,131
Net income attributable to iGATE common shareholders	$	(17,654	)	$	(29,419	)	$	67,919		$	0		$	20,846

32

iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2012

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THREE MONTHS ENDED SEPTEMBER 30, 2012

	Issuer			Guarantors		Non- Guarantors			Eliminations		Consolidated
Net Income (loss) attributable to iGATE common shareholders	$	(8,992	)	$	3,043	$	26,720		$	0	$	20,771
Non controlling interest		0			0		0			0		0
Other comprehensive income:
Unrealized gain on marketable securities		0			0		295			0		295
Unrecognized actuarial gain (loss) on pension liability		0			0		(24	)		0		(24	)
Change in fair value of cash flow hedges		0			0		13,084			0		13,084
Gain (loss) on foreign currency translation		0			0		72,862			0		72,862
Total comprehensive income (loss)		(8,992	)		3,043		112,937			0		106,988
Less: Total comprehensive income (loss) attributable to non controlling interest		0			0		0			0		0
Total comprehensive income (loss) attributable to iGATE common shareholders	$	(8,992	)	$	3,043	$	112,937		$	0	$	106,988

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THREE MONTHS ENDED SEPTEMBER 30, 2011

	Issuer		Guarantors			Non- Guarantors			Eliminations		Consolidated
Net Income (loss) attributable to iGATE common shareholders	$	3,580	$	(19,597	)	$	23,417		$	0	$	7,400
Non controlling interest		0		0			2,950			0		2,950
Other comprehensive income:
Unrealized gain on marketable securities		0		0			2,135			0		2,135
Unrecognized actuarial gain (loss) on pension liability		0		0			(115	)		0		(115	)
Change in fair value of cash flow hedges		0		0			(8,443	)		0		(8,443	)
Gain (loss) on foreign currency translation		0		(107	)		(132,728	)		0		(132,835	)
Total comprehensive income (loss)		3,580		(19,704	)		(112,784	)		0		(128,908	)
Less: Total comprehensive income (loss) attributable to non controlling interest		0		0			(20,134	)		0		(20,134	)
Total comprehensive income (loss) attributable to iGATE common shareholders	$	3,580	$	(19,704	)	$	(92,650	)	$	0	$	(108,774	)

33

iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2012

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR NINE MONTHS ENDED SEPTEMBER 30, 2012

	Issuer			Guarantors		Non- Guarantors			Eliminations		Consolidated
Net Income (loss) attributable to iGATE common shareholders	$	(26,145	)	$	4,923	$	64,345		$	0	$	43,123
Non controlling interest		0			0		4,476			0		4,476
Other comprehensive income:
Unrealized gain on marketable securities		0			0		1,761			0		1,761
Unrecognized actuarial gain (loss) on pension liability		0			0		(290	)		0		(290	)
Change in fair value of cash flow hedges		0			0		22,438			0		22,438
Gain (loss) on foreign currency translation		0			0		11,395			0		11,395
Total comprehensive income (loss)		(26,145	)		4,923		104,125			0		82,903
Less: Total comprehensive income (loss) attributable to non controlling interest		0			0		4,476			0		4,476
Total comprehensive income (loss) attributable to iGATE common shareholders	$	(26,145	)	$	4,923	$	99,649		$	0	$	78,427

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR NINE MONTHS ENDED SEPTEMBER 30, 2011

	Issuer			Guarantors			Non- Guarantors			Eliminations		Consolidated
Net Income (loss) attributable to iGATE common shareholders	$	(17,654	)	$	(29,419	)	$	67,919		$	0	$	20,846
Non controlling interest		0			0			3,437			0		3,437
Other comprehensive income:
Unrealized gain on marketable securities		0			0			2,436			0		2,436
Unrecognized actuarial gain (loss) on pension liability		0			0			130			0		130
Change in fair value of cash flow hedges		0			0			(7,557	)		0		(7,557	)
Gain (loss) on foreign currency translation		0			35			(128,841	)		0		(128,806	)
Total comprehensive income (loss) income		(17,654	)		(29,384	)		(62,476	)	$	0		(109,514	)
Less: Total comprehensive income (loss) attributable to non controlling interest		0			0			(18,750	)		0		(18,750	)
Total comprehensive income (loss) attributable to iGATE common shareholders	$	(17,654	)	$	(29,384	)	$	(43,726	)	$	0	$	(90,764	)

34

iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2012

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR NINE MONTHS ENDED SEPTEMBER 30, 2012

	Issuer			Guarantors			Non- Guarantors			Eliminations		Consolidated
Cash Flows From Operating Activities:
Net income	$	(4,260	)	$	4,923		$	68,821		$	0	$	69,484
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		0			187			36,570			0		36,757
Stock based compensation		0			3,284			5,986			0		9,270
Write off of software implementation costs		0			0			0			0		0
Provision for lease termination		0			0			0			0		0
Realized gain on investments		0			0			(17,069	)		0		(17,069	)
Equity loss on investment in affiliate		0			0			0			0		0
Loss on investment in affiliate		0			0			551			0		551
Deferred gain (loss) on settled derivatives		0			0			19,344			0		19,344
Provision for doubtful debts		0			101			579			0		680
Deferred income taxes		0			(1,715	)		(8,575	)		0		(10,290	)
Amortization of debt issuance costs		4,260			0			550			0		4,810
Loss (gain) on sale of property and equipment		0			0			32			0		32
Deferred rent		0			0			(88	)		0		(88	)
Tax benefits related to stock option exercises		0			(318	)		0			0		(318	)
Working capital items:
Accounts receivable and unbilled revenues		0			(55,154	)		22,456			0		(32,698	)
Intercorporate current account		(29,107	)		75,556			(46,449	)		0		0
Prepaid expenses and other current assets		0			(1,981	)		(17,765	)		0		(19,746	)
Accounts payable		0			6,714			3,650			0		10,364
Accrued and other liabilities		17,325			(7,910	)		(19,077	)		0		(9,662	)
Deferred revenue		0			380			(6,454	)		0		(6,074	)
Net cash flows provided by (used in) operating activities		(11,782	)		24,067			43,062			0		55,347
Cash Flows From Investing Activities:
Purchase of property and equipment		0			(367	)		(13,063	)		0		(13,430	)
Proceeds from sale of property and equipment		0			0			27			0		27
Purchase of available-for-sale investments		0			0			(1,528,008	)		0		(1,528,008	)
Proceeds from maturities and sale of available-for-sale investments		0			0			1,438,195			0		1,438,195
Restricted cash		0			0			(11,400	)		0		(11,400	)
Receipts for (payments for) lease deposit		0			0			2,663			0		2,663
Intercorporate loan		0			(76,365	)		76,365			0		0
Payment for investment in subsidiary		0			0			(224,009	)		0		(224,009	)
Net cash flows provided by (used in) investing activities		0			(76,732	)		(259,230	)		0		(335,962	)
Cash Flows From Financing Activities:
Payments on capital lease obligations		0			(831	)		416			0		(415	)
Proceeds from line of credit and term loans		0			70,000			225,500			0		295,500
Proceeds from sale of preferred stock, net of issuance costs		0			0			0			0		0
Payment of delisting related financing costs		0			0			(3,263	)		0		(3,263	)
Proceeds from senior notes		0			0			0			0		0
Payment of debt issuance cost		0			0			0			0		0
Purchase of subsidiary’s stock		0			0			0			0		0
Proceeds from issuance of stock		0			0			0			0		0
Proceeds from exercise of stock options		11,464			0			(4,233	)		0		7,231
Tax benefits related to stock option exercises		318			0			0			0		318
Intercorporate loan		0			0			0			0		0
Net cash flows provided by ( used in) financing activities		11,782			69,169			218,420			0		299,371
Effect of currency translation		0			0			3,512			0		3,512
Net change in cash and cash equivalents		0			16,504			5,764			0		22,268
Cash and cash equivalents, beginning of period		0			7,384			68,056			0		75,440
Cash and cash equivalents, end of period	$	0		$	23,888		$	73,820		$	0	$	97,708

35

iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2012

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR NINE MONTHS ENDED SEPTEMBER 30, 2011

	Issuer			Guarantors			Non- Guarantors			Eliminations			Consolidated
Cash Flows From Operating Activities:
Net income	$	(2,309	)	$	(29,419	)	$	71,356		$	0		$	39,628
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		0			109			24,923			0			25,032
Stock based compensation		0			2,364			6,504			0			8,868
Write off of software implementation costs		0			0			1,196			0			1,196
Provision for lease termination		0			0			446			0			446
Realized gain on investments		0			0			(2,034	)		0			(2,034	)
Equity loss on investment in affiliate		0			0			52			0			52
Loss on investment in affiliate		0			0			0			0			0
Deferred gain (loss) on settled derivatives		0			0			(5,730	)		0			(5,730	)
Provision for doubtful debts		0			20			433			0			453
Deferred income taxes		0			0			(11,518	)		0			(11,518	)
Amortization of debt issuance costs		2,309			0			0			0			2,309
Loss (gain) on sale of property and equipment		0			0			(24	)		0			(24	)
Deferred rent		0			0			50			0			50
Tax benefits related to stock option exercises		0			0			(830	)		0			(830	)
Working capital items:
Accounts receivable and unbilled revenue		0			(5,713	)		(17,624	)		1,870			(21,467	)
Intercorporate current account		6,740			2,062			(8,802	)		0			0
Prepaid expenses and other current assets		0			(137	)		(8,091	)		(1,616	)		(9,844	)
Accounts payable		0			400			4,106			(254	)		4,252
Accrued and other liabilities		29,435			3,592			(3,440	)		0			29,587
Deferred revenue		0			1			62			0			63
Net cash flows provided by (used in) operating activities	$	36,175		$	(26,721	)	$	51,035		$	0		$	60,489
Cash Flows From Investing Activities:
Purchase of property and equipment		0			(385	)		(12,561	)		0			(12,946	)
Proceeds from sale of property and equipment		0			0			205			0			205
Purchase of available-for-sale investments		0			0			(370,455	)		0			(370,455	)
Proceeds from maturities and sale of available-for-sale investments		0			0			391,928			0			391,928
Restricted cash		0			0			0			0			0
Receipts from (payments for) lease deposits		0			(14	)		2,178			0			2,164
Intercorporate loan		(770,000	)		(1,007,000	)		0			1,777,000			0
Payment for investment in subsidiary		(330,000	)		(50,000	)		(1,168,404	)		380,000			(1,168,404	)
Net cash flows provided by (used in) investing activities	$	(1,100,000	)	$	(1,057,399	)	$	(1,157,109	)	$	2,157,000		$	(1,157,508	)
Cash Flows From Financing Activities:
Payments on capital lease obligations		0			0			(303	)		0			(303	)
Proceeds from line of credit and term loans		0			0			52,000			0			52,000
Proceeds from sale of preferred stock, net of issuance costs		326,572			0			0			0			326,572
Payment of delisting related financing costs		0			0			0			0			0
Proceeds from senior notes		770,000			0			0			0			770,000
Payment of debt issuance costs		(33,456	)		0			0			0			(33,456	)
Purchase of subsidiary’s stock		0			(8	)		0			0			(8	)
Proceeds from issuance of stock		0			330,000			50,000			(380,000	)		0
Proceeds from exercise of stock options		709			0			423			0			1,132
Tax benefits related to stock option exercises		0			0			830			0			830
Intercorporate loan		0			770,000			1,007,000			(1,777,000	)		0
Net cash flows provided by (used in) financing activities	$	1,063,825		$	1,099,992		$	1,109,950		$	(2,157,000	)	$	1,116,767
Effect of currency translation		0			35			(2,751	)		0			(2,716	)
Net change in cash and cash equivalents		0			15,907			1,125			0			17,032
Cash and cash equivalents, beginning of period		0			6,198			61,726			0			67,924
Cash and cash equivalents, end of period	$	0		$	22,105		$	62,851			0		$	84,956

36

iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2012

20. Commitments and contingencies

Capital commitments

As of September 30, 2012, the Company has open purchase orders totaling $9.8 million to purchase property and equipment.

Bank guarantees

As of September 30, 2012, guarantees and letters of credit provided by banks on behalf of the Company’s subsidiaries, to customs authorities and vendors for capital procurements aggregated to $2.3 million. These guarantees and letters of credit have a remaining term of approximately one to three years.

The Company also took bank guarantee of $31.1 million to purchase the additional shares of Patni. (See Note 6)

Other commitments

The Company’s business process delivery centers in India are 100% Export Oriented units or Software Technology Parks of India units (“STPI”) under the STPI guidelines issued by the Government of India. These units are exempted from customs, central excise duties, and levies on imported and indigenous capital goods, stores, and spares. The Company has executed legal undertakings to pay custom duty, central excise duty, levies, and liquidated damages payable, if any, in respect of imported and indigenous capital goods, stores, and spares consumed duty free, in the event that certain terms and conditions are not fulfilled.

The Company has entered into a service agreement with a customer that provides such customer the option, exercisable at any time by providing 60 days’ notice to the Company to acquire an equity stake of up to 7% of the Company’s outstanding voting shares at fair market value. The fair market value is the volume weighted average trading price of the Company’s shares on the NASDAQ Market for five consecutive trading days immediately before the date on which the customer delivers its notice under the option. The option does not restrict the customer in any way from buying the Company’s shares in the open market. The service agreement also requires the Company to register the shares upon exercise of the option by the customer and there are no events or circumstances that would require the Company to transfer consideration under the agreement.

Contingencies

As of September 30, 2012, the Company has open tax demands of $92.1 million for relevant assessment years 2004-05, 2005-06, 2006-07, 2007-08 and 2008-09. The assessment orders demand is raised mainly on account of disallowance of certain benefits under section 10A of the Indian Income Tax Act and transfer pricing adjustment on account of interest on delayed recoveries from associated enterprises and BPO operations. Although the Company has paid an amount of $11.5 million in relation to these demands, which are pending at various levels of appeals, management considers these disallowances as not tenable against the Company, and therefore no provision for tax contingencies has been established related to unpaid amounts.

In December 2011, the Indian income tax authorities has issued a draft assessment order for Assessment Year 2008-09 disallowing the tax benefits under section 10A of the Indian Income Tax Act as per the earlier assessments, as well as making a transfer pricing adjustment for delayed recoveries from the associated enterprises. The Company has filed the objections against the draft order before the Dispute Resolution Panel (“DRP”) newly set up under the Indian Income Tax Act. The DRP order was received in the month of September 2012 confirming the stand adopted by the assessing officer. Management considers these disallowances as not tenable against the Company, and therefore no provision for this tax contingency has been established.

The Company is involved in lawsuits and claims which arise in the ordinary course of business. Management believes that the ultimate outcome of these matters will not have a material adverse impact on its financial position, results of operations and cash flows.

37

iGATE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2012

21. Recently Issued Accounting Pronouncements

In December 2011, the FASB issued ASU No. 2011-11“Disclosure about Offsetting Assets and Liabilities”, which requires entities to disclose both gross information and net information about both instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. The scope would include derivatives, sale and repurchase agreements and reverse sale and repurchase agreements, and securities borrowing and securities lending arrangements. The objective of this disclosure is to facilitate comparison between those entities that prepare their financial statements on the basis of U.S. GAAP and those entities that prepare their financial statements on the basis of IFRS. In addition, the standard requires disclosure of collateral received and posted in connection with master netting agreements or similar arrangements. The ASU is effective for annual and interim period for fiscal years beginning on or after January 1, 2013.The Company is currently evaluating this ASU.

In July 2012, the FASB issued ASU No. 2012-02-“Intangibles–Goodwill and Others- Testing Indefinite-Lived Intangible Assets for Impairment”, which is intended to reduce the cost and complexity of the annual impairment test for indefinite-lived intangible assets other than goodwill, by providing entities an option to perform a “qualitative” assessment to determine whether further impairment testing is necessary. The ASU is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. An entity has the option to first assess qualitative factors to determine whether it is necessary to perform the current two-step test. If an entity believes, as a result of its qualitative assessment, that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is required. Otherwise, no further testing is required. The Company is currently evaluating whether or not to take the option available in the ASU.

22. Recently Adopted Accounting Pronouncements

In September 2011, the FASB issued ASU No. 2011-05–Comprehensive Income, which eliminates the current option to report other comprehensive income and its components in the statement of stockholders’ equity. Instead, an entity is required to present items of net income and other comprehensive income in one continuous statement or in two separate, but consecutive, statements. The ASU was effective for fiscal years beginning after December 15, 2011. In 2012, the Company has adopted to present comprehensive income in a separate statement.

23. Subsequent Events

The Company has evaluated subsequent events through the date of filing the financial statements and no events have occurred from the balance sheet date that would impact the Consolidated Financial Statements.

38

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

Some of the statements in this Form 10-Q contain statements that are not historical facts and that constitute “forward-looking statements” within the meaning of such term under the Private Securities Litigation Reform Act of 1995. These forward-looking statements include our financial growth and liquidity projections as well as statements concerning our plans, strategies, intentions and beliefs concerning our business, cash flows, costs and the markets in which we operate. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects” and similar expressions are intended to identify certain forward-looking statements. These forward-looking statements are based on information currently available to us, and we assume no obligation to update these statements as circumstances change. There are risks and uncertainties that could cause actual events to differ materially from these forward-looking statements. While we cannot predict all of the risks and uncertainties, they include, but are not limited to, our ability to predict our financial performance, the level of market demand for our services, the highly-competitive market for the types of services that we offer, the impact of competitive factors on profit margins, market conditions that could cause our customers to reduce their spending for our services, our ability to create, acquire and build new businesses and grow our existing businesses, our ability to attract and retain qualified personnel, our ability to reduce costs and conserve cash, currency fluctuations and market conditions in India and elsewhere around the world, political and military tensions in India and Southern Asia, changes in generally accepted accounting principles and/or their interpretation and other risks that are described in more detail in our filings with the Securities and Exchange Commission, including our Form 10-K (“Form 10-K”) for the year ended December 31, 2011.

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. Unless otherwise indicated or the context otherwise requires, all references in this report to “Patni” are to iGATE Computer Systems Limited, formerly known as Patni Computer Systems Limited, a majority-owned subsidiary of iGATE. iGATE Corporation, through its operating subsidiaries, is a worldwide provider of Information Technology (“IT”) and IT-enabled operations 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, business and technology consulting, quality, assurance and engineering services, software development and applications maintenance outsourcing.

Website Access to SEC Reports

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

Business Overview

We are a worldwide outsourcing provider of integrated end-to-end offshore centric information technology (“IT”) and IT-enabled operations solutions and services. Our clients are primarily Global 2000 customers from the financial, insurance, manufacturing, retail and distribution, healthcare, communications, media and entertainment, utilities and product engineering industries. We work with clients to optimize their businesses, secure year-on-year cost benefits, and tie costs to business needs and results. We deliver a comprehensive range of IT services through globally integrated onsite and offshore delivery locations primarily in India. We offer our services to customers through industry focused practices, including insurance and healthcare (“IHC”), manufacturing, retail and logistics (“MRDL”), banking and financial services (“BFS”), communications and utilities (“CEU”), and media and entertainment (“MELT”) and through technology focused practices. IT services include application development, application maintenance and support, verification and validation, enterprise application solutions, business intelligence and data warehousing (“BI & DW”), packaged software implementation, infrastructure management services, quality assurance services and product engineering services. IT-enabled services include business process outsourcing (“BPO”), transaction processing services and customer interaction services (“CIS”).

We also offer Integrated Technology and Operations (“iTOPS”) solutions that integrate IT outsourcing and IT-enabled operations, offshore outsourcing solutions and services seamlessly. In addition to cost savings, the iTOPS model provides clients with innovative ways to enhance the quality and performance of their operations through better alignment of business processes to IT infrastructure.

We believe our innovative approach of integrating IT and IT-enabled operations and our ability to leverage a global delivery model provide our clients with clearly differentiated and demonstrated value. We employ an offshore/nearshore delivery model with 27,543 employees and 27 offices worldwide. Our global delivery model leverages both onsite delivery and comprehensive offshore services, depending upon a client’s location and preferences. We target large and medium-sized organizations across a diverse set of industries, including financial services, insurance, manufacturing, retail, healthcare and media and entertainment.

39

We were founded in 1986 and our principal executive office is located in Fremont, California. We have operations in India, Canada, the United States, Europe, Mexico, Singapore, Malaysia, Japan, Australia, the United Arab Emirates, South Africa, Turkey, South Korea, China, Switzerland and the United Kingdom.

A majority of our clients have headquarters in North America and operate internationally. iGATE has 27,543 employees as of September 30, 2012.

We market our 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 and are billed at an agreed upon hourly or daily rate. Certain contracts with no stated deliverables have a designated workforce and are based on fixed periodic payments. Some process outsourcing contracts provide pricing per transaction. Customers typically have the right to cancel contracts with minimal notice. Contracts with deliverables or project milestones can provide for certain penalties if the deliverables or project milestones are not met within contract timelines.

We service customers in a wide range of industries. Our largest customer is General Electric Company (“GE”) which accounted for approximately 13% and 11% of revenues for the nine months ended September 30, 2012 and 2011, respectively. Our second largest customer, Royal Bank of Canada (“RBC”), accounted for approximately 10% and 17% of revenues for the nine months ended September 30, 2012 and 2011, respectively. iGATE is a Global Preferred Partner of RBC.

Recent Developments

Delisting of Patni American Depository Shares (“ADSs”) from the New York Stock Exchange (the “NYSE”)

The ADSs were delisted from the NYSE after the close of trading on September 28, 2012 and are tradable on the U.S. over-the-counter market beginning on October 1, 2012. Patni filed Form 15, deregistering the ADSs from the SEC’s reporting requirements on October 1, 2012, which is automatically effective 90 days later subject to the SEC’s queries, if any.

Merger of Patni with iGATE Global Solutions Limited

On October 11, 2012, the Company’s Board of Directors approved a plan where it was decided to merge Patni with iGATE Global Solutions Limited (“iGATE Global”), The merger scheme was further approved by the Board of Directors of Patni and iGATE Global on October 26, 2012 and was subsequently filed with the High Court of Judicature at Mumbai on October 29, 2012. Pursuant to the merger, the shareholders of Patni shall receive 5 (five) equity shares of the face value of Rs 10/- (Rupees Ten) each (credited as fully paid up) of iGATE Global for 22 (twenty two) equity shares of the face value of Rs 2/- (Rupees Two) each (credited as fully paid-up) held by such shareholder or his/her/its respective legal heirs, executors or successors in Patni. Patni expects to terminate the ADR program and the ADRs issued by it will be converted into underlying shares of Patni or liquidated for cash pursuant to the terms of the deposit agreement entered into amongst Patni, the Bank of New York and the owners and holders of ADRs prior to the merger becoming effective. The merger is subject to the receipt of various approvals including from the shareholders and creditors of both companies, the High Court of Judicature at Mumbai and the Competition Commission of India.

Reportable Financial Segments

Following the delisting of Patni from the BSE and NSE in May 2012, the Company’s Chief Executive Officer, who is the chief decision making officer, determined that the Company’s business will be operated and managed as a single segment.

Critical Accounting Policies

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

Recently Issued Accounting Pronouncements

In December 2011, the FASB issued ASU No. 2011-11“Disclosure about Offsetting Assets and Liabilities”, which requires entities to disclose both gross information and net information about both instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. The scope would include derivatives, sale and repurchase agreements and reverse sale and repurchase agreements, and securities borrowing and securities lending arrangements. The objective of this disclosure is to facilitate comparison between those entities that prepare their financial statements on the basis of U.S. generally accepted accounting principles (“GAAP”) and those entities that prepare their financial statements on the basis of IFRS. In addition, the standard requires disclosure of collateral received and posted

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in connection with master netting agreements or similar arrangements. The ASU is effective for annual and interim period for fiscal years beginning on or after January 1, 2013. The Company is currently evaluating this ASU.

In July 2012, the FASB issued ASU No. 2012-02-“Intangibles–Goodwill and Others- Testing Indefinite-Lived Intangible Assets for Impairment”, which is intended to reduce the cost and complexity of the annual impairment test for indefinite-lived intangible assets other than goodwill, by providing entities an option to perform a “qualitative” assessment to determine whether further impairment testing is necessary. The ASU is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. An entity has the option to first assess qualitative factors to determine whether it is necessary to perform the current two-step test. If an entity believes, as a result of its qualitative assessment, that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is required. Otherwise, no further testing is required. The Company is currently evaluating whether or not to take the option available in the ASU.

Results of Operations

Following the delisting of Patni from the Indian Stock Exchanges in May 2012, the Company’s Chief Executive Officer, who is the chief decision making officer, determined that the business will be operated and managed as a single segment.

Results of Operations for the Three Months Ended September 30, 2012 as Compared to the Three Months Ended September 30, 2011 (in thousands):

	Three Months Ended September 30,
	2012						2011						% change of Amount from comparable period
	Amount			% of Revenues			Amount			% of Revenues
Revenues	$	271,090			100.0	%	$	265,724			100.0	%		2.0	%
Cost of revenues (a)		163,269			60.2			167,565			63.1			(2.6	)
Gross margin		107,821			39.8			98,159			36.9			9.8
Selling, general and administrative		44,064			16.3			46,745			17.6			(5.7	)
Depreciation and amortization		10,027			3.7			13,667			5.1			(26.6	)
Income from operations		53,730			19.8			37,747			14.2			42.3
Interest expense		(21,994	)		(8.1	)		(19,546	)		(7.4	)		12.5
Foreign exchange loss, net		(3,763	)		(1.4	)		(7,874	)		(3.0	)		(52.2	)
Equity in loss in affiliated company		—			—			(62	)		(b	)		(c	)
Other income		8,815			3.3			4,145			1.6			112.7
Income before income taxes		36,788			13.6			14,410			5.4			155.3
Income tax expense		8,495			3.1			(2,793	)		(1.1	)		(d	)
Net income		28,293			10.5			17,203			6.5			64.5
Non-controlling interest		—			—			2,950			1.1			(c	)
Net income attributable to iGATE		28,293			10.5			14,253			5.4			98.5
Accretion to preferred stock		103			(b	)		84			(b	)		9.6
Preferred dividend		7,419			2.7			6,769			2.6			22.6
Net income attributable to iGATE common shareholders	$	20,771			7.8	%	$	7,400			2.8	%		180.7	%

(a) Cost of revenues is exclusive of depreciation and amortization.

(b) The percent is insignificant.

(c) As there is no amount in the current period, the percent change from comparable period is not computed.

(d) As the effective tax rate is a better comparable measure, the percent change from comparable period is not computed.

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Revenues

Revenues for the three months ended September 30, 2012 increased by 2%, as compared to the three months ended September 30, 2011. Our revenue increase for this period is directly attributable to the combination of increased business with new customers and recurring customers but was partly offset by the discontinuation of business with some of our existing customers. Revenues increased due to addition of new customers by 2.1% and increased business with our recurring customers by 1.6%, which were partly offset by the discontinuation of business with some of our existing customers by 1.7% for the three months ended September 30, 2012 as compared to the three months ended September 30, 2011.

Our top five customers accounted for 38% and 37% of our revenues for the three months ended September 30, 2012 and 2011, respectively. The strengthening of USD during the three months ended September 30, 2012 as compared to the corresponding period in the previous year, against EUROs, GBP and INR adversely impacted our revenues by 0.6% .

Gross margin

The gross margin as a percentage of revenues (“Gross Margin Percentage”) was 39.8% for the three months ended September 30, 2012, as compared to 36.9% for the three months ended September 30, 2011. The increase in the Gross Margin Percentage was primarily due to favorable movement of USD against INR during the current period as compared to the three months ended September 30, 2011 that resulted in a lower cost of revenues in dollar terms yielding a higher gross margin by 4.5% which was partly offset by adverse impact of currency movement on revenues by 0.6%, increase in salaries due to an increase in the number of employees.

Selling, general and administrative expenses

Selling, general and administrative expenses (“SG&A”) include all costs that are not directly associated with revenue-generating activities. SG&A expenses include employee costs, corporate costs and facilities costs. Employee costs include selling, marketing and administrative salaries and related employee benefits, travel, recruiting and training costs. Corporate costs include costs such as delisting and reorganization costs, legal, accounting and outside consulting fees. Facilities costs primarily include rent and communications costs.

SG&A costs for the three months ended September 30, 2012 were 16.3% of revenues, as compared to 17.6% of revenues for the three months ended September 30, 2011. SG&A costs for the three months ended September 30, 2012 decreased by $2.7 million as compared to the three months ended September 30, 2011. Net employee cost decreased by $4.0 million for the three months ended September 30, 2012, as compared to the three months ended September 30, 2011, mainly due to a decrease in salaries, overhead and benefits of $4.8 million and staff welfare expense by $0.6 million which were partly offset by an increase in travel expense and related costs of $1.4 million. The decrease in salaries was mainly due to decrease in average headcount by 111 and the lower bonus provision by $2.0 million and lower employee stock based compensation cost provision by $0.9 million for the three months ended September 30, 2012 as compared to the three months ended September 30, 2011. Net corporate cost increased by $0.3 million for the three months ended September 30, 2012 mainly due to the increase in marketing expenses by $0.7 million, reorganization expenses by $0.7 million, delisting costs by $0.3 million, outside professional services by $0.3 million, which were partly offset by decrease in integration expenses by $0.5 million, legal expenses by $0.5 million and public costs by $0.7 million. Net facilities costs increased by $1.0 million for the three months ended September 30, 2012, due to an increase in communication related expenses by $0.8 million and insurance and maintenance costs by $0.7 million which were partly offset by decrease in electricity charges by $0.4 million and rent by $0.1 million.

The currency movements in the foreign exchange market favorably impacted our SG&A costs by 1.4% for the three months ended September 30, 2012 as compared to three months ended September 30, 2011.

Depreciation and amortization costs

Depreciation and amortization cost for the three months ended September 30, 2012 were 3.7% of revenue, as compared to 5.1% of revenue for the three months ended September 30, 2011 representing a decrease of $3.6 million. The decrease in absolute terms is mainly due to one year schedule of certain depreciable assets attributable to Patni Acquisition which was fully depreciated in the second quarter of 2012.

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Operating income

Operating income percentage was 19.8% for the three months ended September 30, 2012 as compared to 14.2% for the three months ended September 30, 2011. The increase in operating income percentage was mainly due to the increased gross margin and reduction in selling, general and administration expenses and depreciation and amortization.

Interest expense

Interest expenses were 8.1% of revenues for the three months ended September 30, 2012, as compared to 7.4% for the three months ended September 30, 2011. We issued 9% senior notes on April 29, 2011 and recorded interest expense of $17.3 million for the three months ended September 30, 2012, as compared to $17.4 million for the three months ended September 30, 2011. We also amortized the debt issuance costs of $1.5 million for each of the three months ended September 30, 2012 and 2011. The interest expense recorded on our $352.5 million line of credit and term loan amounted to $2.2 million for the three months ended September 30, 2012 as compared to $0.2 million on our line of credit of $52 million for the three months ended September 30, 2011.

Foreign exchange (loss) gain, net

Foreign exchange loss was $3.8 million for the three months ended September 30, 2012 as compared to loss of $7.9 million for the three months ended September 30, 2011.

The Company recognized foreign currency gain of $2.2 million on all derivative contracts for the three months ended September 30, 2012, as compared to an unfavorable foreign currency movement resulting in the loss of $13.1 million for the three months ended September 30, 2011.

We also recognized a foreign currency gain of $0.1 million on remeasurement of escrow account balance, foreign currency gain of $3.5 million on remeasurement of packing credit facility borrowed under our line of credit, foreign currency loss of $7.5 million related to other monetary and non monetary assets and liabilities and foreign currency loss of $2.1 million on remeasurement of the redeemable non controlling interest for the three months ended September 30, 2012, as compared to a loss of $4.4 million on remeasurement of packing credit facility borrowed under our line of credit and $9.6 million of gain related to other monetary and non monetary assets and liabilities for the three months ended September 30, 2011, respectively.

Other income, net

Our investment income for the three months ended September 30, 2012 totaled $8.6 million, as compared to $3.7 million for the three months ended September 30, 2011. The investments increased by $103 million as of September 30, 2012 as compared to the investments as of September 30, 2011. A sizable part of investments in 2011 were in dividend yielding mutual funds whereas in 2012 the investments were mainly in growth plans of mutual funds and certificates of deposits. The higher level of investments, switch from dividend yielding mutual funds to growth plans of mutual funds and investments in high yield certificate of deposits primarily contributed to the increase in investment income.

Interest refund from tax authorities amounted to $0.1 million for the three months ended September 30, 2012.

Income taxes

Our ETR was 23.1% and (19.4) % during the three months ended September 30, 2012 and 2011, respectively.

The negative reported ETR during the three months ended September 30, 2011 was mainly due to deferred tax benefit of $3.9 million and $1.2 million relating to net operating losses brought forward from prior years and foreign tax credit, respectively. The ETR excluding the above items (“normalized ETR”) will be 16.0% for the three months ended September 30, 2011.

The estimated annual ETR takes into account the tax of approximately $7.4 million due to the deemed repatriation of Patni India’s profits during the period.

Subsequent to the acquisition of iAI by iTI in August 2012 iAI is now be included with iTI while filing the consolidated return. Filing of the consolidated return is considered a change in the tax strategy to realize deferred tax asset in a tax effective manner and resulting in an assessment that the deferred tax asset will more-likely-than-not be realized prior to their expiration as a result of increase in future taxable income. The Company anticipates generating such taxable income due to a substantial number of new contracts being entered into the entities included in the new consolidated group for tax return purposes. As a result of this tax planning strategy, we have released $4.0 million of the deferred tax asset valuation allowance relating to iTI existing as of December 31, 2011. The valuation allowance related to the deferred tax assets on temporary differences of iTI where it was more likely than not that all or

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some portion of the asset will not be realized due to the inability to generate sufficient taxable income in the period and/or of the character necessary to utilize the benefit of the deferred tax asset as on December 31, 2011. The release as stated above, was triggered as a result of the acquisition of iAI by iTI in August 2012.

The impact of the above items and additional taxes in iTI Canada during the three months ended September 30, 2012 increased the ETR by approximately 7.1% over prior period’s normalized ETR of 16.0% resulting in an ETR of 23.1%.

Non-controlling interest

For the three months ended September 30, 2011, we recorded $3 million share of profits of non-controlling interest in Patni representing 17.88% share of net income of $16.5 million of Patni.

On March 14, 2012, Pan-Asia along with iGATE Global and iGATE issued a public announcement regarding the proposed acquisition of the remaining 15.82% of Patni’s outstanding share capital (excluding ADSs) from Patni’s public shareholders and the delisting of the fully paid-up equity shares of Patni having a face value of INR 2 each in accordance with Regulation 10 of the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009. As of September 30, 2012, the Company purchased 22.5 million shares of Patni’s outstanding shares and recorded a redeemable non controlling interest liability for the balance of 4.0 million shares amounting to $39.6 million, valued at an exit price of INR 520 per share. The redeemable non controlling interest holders are not entitled to any share of Patni profits.

Preferred dividend

On February 1, 2011, pursuant to the securities purchase agreement with Viscaria Limited dated January 10, 2011, we issued 210,000 shares of Series B Preferred Stock for a consideration of $210 million and an additional 120,000 shares were issued on May 9, 2011 for a consideration of $120 million. We have accrued for cumulative dividends of $7.4 million at a rate of 8.00% per annum, compounded quarterly, for the three months ended September 30, 2012 as compared to $6.8 million for the three months ended September 30, 2011.

Results of Operations for the Nine Months Ended September 30, 2012 as Compared to the Nine Months Ended September 30, 2011 (in thousands):

	Nine Months Ended September 30,
	2012						2011						% change of Amount from comparable period
	Amount			% of Revenues			Amount			% of Revenues
Revenues	$	802,348			100.0	%	$	511,939			100.0	%		56.7	%
Cost of revenues (a)		488,380			60.9			323,563			63.2			50.9
Gross margin		313,968			39.1			188,376			36.8			66.7
Selling, general and administrative		127,348			15.9			108,915			21.3			16.9
Depreciation and amortization		36,757			4.5			25,032			4.9			46.8
Income from operations		149,863			18.7			54,429			10.6			175.3
Interest expense		(62,149	)		(7.7	)		(32,834	)		(6.4	)		89.3
Foreign exchange (loss) gain, net		(18,198	)		(2.3	)		16,846			3.3			(208.0	)
Equity in income of affiliated company		—			—			(52	)		(b	)		(c	)
Other income		23,975			3.0			8,553			1.7			180.3
Income before income taxes		93,491			11.7			46,942			9.2			99.2
Income tax expense		24,007			3.0			7,314			1.4			(d	)
Net income		69,484			8.7			39,628			7.8			75.3
Non-controlling interest		4,476			0.6			3,437			0.7			30.2
Net income attributable to iGATE Corporation		65,008			8.1			36,191			7.1			79.6
Accretion to preferred stock		295			(b	)		214			(b	)		37.9
Preferred dividend		21,590			2.7			15,131			3.0			42.7
Net income attributable to iGATE common shareholders	$	43,123			5.4	%	$	20,846			4.1	%		106.9	%

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(a) Cost of revenues is exclusive of depreciation and amortization.

(b) The percent is insignificant.

(c) As there is no amount in the current period, the percent change from comparable period is not computed.

(d) As the effective tax rate is a better comparable measure, the percent change from comparable period is not computed.

Note: Patni results are consolidated for a period of 139 days with effect from May 15, 2011 for the nine months ended September 30, 2011 as compared to the full period for the nine months ended September 30, 2012. This accounts for the major variances in the nine months comparison.

Revenues

Revenues for the nine months ended September 30, 2012 increased by 56.7%, as compared to the nine months ended September 30, 2011. Our revenue increase for the periods presented is directly attributable to the Patni Acquisition and a combination of increased business with our recurring customers and business with new customers which were partly offset by the discontinuation of business with some of our existing customers. Revenues increased due to the Patni Acquisition by 54.6%, recurring customers by 0.8% and new customers by 2.3% which were partly offset by the discontinuation of business with some of our existing customers by 1.0% for the nine months ended September 30, 2012 as compared to the nine months ended September 30, 2011.

Our top five customers accounted for 37% and 42% of the revenues for the nine months ended September 30, 2012 and 2011, respectively. The strengthening of USD during the nine months ended September 30, 2012 as compared to the corresponding period in the previous year, against EUROs, GBP, CAD and INR adversely impacted our revenues by 0.8%.

Gross margin

The Gross Margin Percentage was 39.1% for the nine months ended September 30, 2012 as compared to 36.8% for the nine months ended September 30, 2011. The increase in the Gross Margin Percentage was primarily due to favorable movement of USD against INR during the current period as compared to the nine months ended September 30, 2011 that resulted in a lower cost of revenues in dollar terms yielding a higher gross margin by 4.2% which was partly offset by adverse impact of currency movement on revenues by 0.8%, increase in salaries due to an increase in the number of employees.

Selling, general and administrative expenses

Selling, general and administrative expenses (“SG&A”) include all costs that are not directly associated with revenue-generating activities. SG&A expenses include employee costs, corporate costs and facilities costs. Employee costs include selling, marketing and administrative salaries and related employee benefits, travel, recruiting and training costs. Corporate costs include costs such as acquisition, delisting and reorganization costs, legal, accounting and outside consulting fees. Facilities costs primarily include rent and communications costs.

SG&A costs for the nine months ended September 30, 2012 were 15.9% of revenues, as compared to 21.3% of revenues for the nine months ended September 30, 2011. SG&A costs for the nine months ended September 30, 2012 increased by $18.4 million as compared to the nine months ended September 30, 2011. SG&A costs increased mainly due to Patni Acquisition which accounted for a full nine months in the current reporting period as compared to four and half months in the previous period. Net employee costs increased by $9.0 million for the nine months ended September 30, 2012, as compared to the nine months ended September 30, 2011, resulting from increase in salaries, overheads and benefits of $6.0 million, travel expense by $2.7 million and staff welfare expense by $0.3 million. The increase in salaries was mainly due to the Patni Acquisition and increase in average headcount by 303, which were partly offset by the lower bonus provision by $2.8 million and lower employee stock based compensation cost provision by $0.4 million for the nine months ended September 30, 2012 as compared to the nine months ended September 30, 2011. Net corporate costs increased by $9.5 million for the nine months ended September 30, 2012 mainly due to delisting expense of $3.5 million during the current reporting period, increase in professional services and accounting charges by $2.7 million, marketing expenses by $0.8 million, reorganization expenses by $0.8 million, legal fees by $0.8 million, recruitment expenses by $0.7 million and bad debt expense by $0.2 million. We incurred around $11.0 million of acquisition costs during the nine months ended September 30, 2011. Net facilities

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costs increased by $10.9 million for the nine months ended September 30, 2012, due to increase in insurance and maintenance costs by $4.3 million, communication related expenses by $2.9 million, rent by $1.9 million and electricity charges by $1.8 million.

The currency movements in the foreign exchange market favorably impacted our SG&A costs by 1.9% for the nine months ended September 30, 2012 as compared to nine months ended September 30, 2011.

Depreciation and amortization costs

Depreciation and amortization cost for the nine months ended September 30, 2012 were 4.6% of revenue, as compared to 4.9% of revenue for the nine months ended September 30, 2011 representing an increase of $11.7 million. The increase in absolute terms was mainly due to the increase in the depreciable and amortizable assets attributable to the Patni Acquisition on May 12, 2011.

Operating income

Operating income percentage was 18.7% for the nine months ended September 30, 2012, as compared to 10.6% for the nine months ended September 30, 2011. The increase in operating income percentage was mainly due to the increased gross margin which was partly offset by increased selling, general and administration expenses and depreciation and amortization.

Interest expense

Interest expenses were 7.7% of revenues for the nine months ended September 30, 2012 as compared to 6.4% for the nine months ended September 30, 2011. We issued 9% senior notes on April 29, 2011 and recorded interest expense of $52 million for the nine months ended September 30, 2012 as compared to $29.4 million for the nine months ended September 30, 2011. We also amortized the debt issuance costs of $4.3 million for the nine months ended September 30, 2012 as compared to $2.3 million for the nine months ended September 30, 2011. The interest expense recorded on our $352.5 million line of credit and term loan amounted to $4.2 million for the nine months ended September 30, 2012 as compared to $0.5 million on our line of credit of $52 million for the nine months ended September 30, 2011.

Foreign exchange (loss) gain, net

Foreign exchange loss was $18.2 million for the nine months ended September 30, 2012, as compared to gain of $16.8 million for the nine months ended September 30, 2011.

The foreign currency movement related to foreign currency derivative contracts entered into in connection with the Patni Acquisition resulted in a realized gain of $15.0 million on settled contracts for the nine months ended September 30, 2011.

We recognized foreign currency loss of $14 million on all derivative contracts for the nine months ended September 30, 2012, as compared to a loss of $9.7 million for the nine months ended September 30, 2011.

We also recognized a foreign currency loss of $4.1 million on remeasurement of escrow account balance, loss of $1.5 million related to other monetary and non monetary assets and liabilities and loss of $2.1 million on the remeasurement of redeemable non controlling interest for the nine months ended September 30, 2012, as compared to a gain of $5.1 million on remeasurement of escrow account balance and $10.6 million of favorable foreign currency gain related to other monetary and non monetary assets and liabilities for the nine months ended September 30, 2011, respectively. We also recorded a foreign currency gain of $3.5 million and a loss of $4.2 million on the remeasurement of the packing credit facility borrowed under our line of credit for the nine months ended September 30, 2012 and 2011, respectively.

Other income, net

Our investment income for the nine months ended September 30, 2012 totaled $22 million as compared to $7.9 million for the nine months ended September 30, 2011. The investment income increased as investment amounts increased significantly due to Patni Acquisition. The investments increased by $103 million as of September 30, 2012 as compared to the investments as of September 30, 2011. A sizable part of investments in 2011 were in dividend yielding mutual funds whereas in 2012 the investments were mainly in growth funds and certificate of deposits. The higher level of investments, switch from dividend yielding funds to growth plans of mutual funds and investments in high yield certificate of deposits primarily contributed to the increase in investment income.

Interest refund from tax authorities amounted to $1.6 million for the nine months ended September 30, 2012.

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Income taxes

Our ETR was 25.7% and 15.6% during the nine months ended September 30, 2012 and 2011, respectively. The lower reported ETR during the nine months ended September 30, 2011 was mainly due to deferred tax benefit of $3.9 million and $1.2 million relating to net operating losses brought forward from prior years and foreign tax credit respectively. The ETR excluding the above items (“normalized ETR”) will be 26.4% for the nine months ended September 30, 2011.

The estimated annual ETR takes into account the tax of approximately $7.4 million due to the deemed repatriation of Patni India’s profits during the period.

Subsequent to the acquisition of iAI by iTI in August 2012 iAI is now be included with iTI while filing the consolidated return. Filing of the consolidated return is considered a change in the tax strategy to realize deferred tax asset in a tax effective manner and resulting in an assessment that the deferred tax asset will more-likely-than-not be realized prior to their expiration as a result of increase in future taxable income. The Company anticipates generating such taxable income due to a substantial number of new contracts being entered into the entities included in the new consolidated group for tax return purposes. As a result of this tax planning strategy, we have released $4.0 million of the deferred tax asset valuation allowance relating to iTI existing as of December 31, 2011. The valuation allowance related to the deferred tax assets on temporary differences of iTI where it was more likely than not that all or some portion of the asset will not be realized due to the inability to generate sufficient taxable income in the period and/or of the character necessary to utilize the benefit of the deferred tax asset as on December 31, 2011. The release as stated above, was triggered as a result of the acquisition of iAI by iTI in August 2012.

The impact of the above and additional taxes in iTI Canada during nine months ended September 30, 2012 increased the ETR by approximately 2.4% over prior year’s normalized ETR of 26.4%. The above increase was offset by a decrease in ETR by 2.5% due to the STPI benefit during first three months of the year 2011.

Non-controlling interest

For the nine months ended September 30, 2011, we recorded $3.4 million share of profits of non-controlling interest in Patni representing 17.88% share of net income of $19.2 million of Patni.

On March 14, 2012, Pan-Asia along with iGATE Global and iGATE issued a public announcement regarding the proposed acquisition of the remaining 15.82% of Patni’s outstanding share capital (excluding ADSs) from Patni’s public shareholders and the delisting of the fully paid-up equity shares of Patni having a face value of INR 2 each in accordance with Regulation 10 of the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 (the “Offer”). As of September 30, 2012, the Company purchased 22.5 million shares of Patni’s outstanding shares and recorded a redeemable non controlling interest liability for the balance of 4.0 million shares amounting to $39.6 million, valued at an exit price of INR 520 per share. The redeemable non controlling interest holders are not entitled to any share of Patni profits.

Prior to the additional purchase of 22.5 million shares, we recorded $4.5 million of share of profits of non-controlling interest in Patni representing an 18.9% share of net income of $23.7 million of Patni in the first quarter of 2012.

Preferred dividend

On February 1, 2011, pursuant to the securities purchase agreement with Viscaria Limited dated January 10, 2011, we issued 210,000 shares of Series B Preferred Stock for a consideration of $210 million and an additional 120,000 shares were issued on May 9, 2011 for a consideration of $120 million. We have accrued for cumulative dividends of $21.6 million at a rate of 8.00% per annum, compounded quarterly, for the nine months ended September 30, 2012 as compared to $15.1 million for the nine months ended September 30, 2011.

Use of non-GAAP Financial Measures:

These non-GAAP measures are not in accordance with, or an alternative for measures prepared in accordance with, U.S GAAP and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Reconciliations of these non-GAAP measures to their comparable GAAP measures are included in the attached financial tables.

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We believe that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with iGATE’s results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate iGATE’s results of operations in conjunction with the corresponding GAAP measures. These non GAAP measures should be considered supplemental in nature and should not be considered in isolation or be construed as being more important than comparable GAAP measures.

We believe that providing Adjusted EBITDA and non-GAAP net income and non-GAAP basic and diluted earnings per share in addition to the related GAAP measures provides investors with greater transparency to the information used by our management in our financial and operational decision-making. These non-GAAP measures are also used by management in connection with iGATE’s performance compensation programs.

The non-GAAP financial measures contained herein exclude the following items:

• Amortization of intangible assets: Intangible assets comprise value of our customer relationships from the recent Patni Acquisition and the previous delisting of iGATE’s Indian subsidiary. We incur charges relating to the amortization of these intangibles. These charges are included in our GAAP presentation of earnings from operations, operating margin, net income and diluted earnings per share. We exclude these charges for purposes of calculating these non-GAAP measures.

• Stock-based compensation: Although stock-based compensation is an important aspect of the compensation of our employees and executives, determining the fair value of the stock-based instruments involves a high degree of judgment and estimation and the expense recorded may not reflect the actual value realized upon the future exercise or termination of the related stock-based awards. Furthermore, unlike cash compensation, the value of stock-based compensation is determined using a complex formula that incorporates factors, such as market volatility, that are beyond our control. Management believes it is useful to exclude stock-based compensation in order to better understand the long-term performance of our core business.

• Acquisition expenses: We incur costs related to its acquisitions, which are inconsistent in amount and frequency and are significantly impacted by the timing and nature of iGATE’s acquisitions. We believe that eliminating these expenses for purposes of calculating these non-GAAP measures facilitates a more meaningful evaluation of our current operating performance and comparisons to its past operating performance.

• Forex: The Company entered into forward foreign exchange contracts to mitigate the risk of changes in foreign exchange rates on payments related to the acquisition of Patni. We also recognized favorable foreign currency gain on re-measurement of escrow account balance maintained for facilitating payments related to the Patni Acquisition. We believe that eliminating the non-capitalized items for purposes of calculating these non-GAAP measures facilitates a more meaningful evaluation of our current performance and comparisons to its past performance. In March 2012, the Company entered into a forward foreign exchange contract to mitigate the risk of changes in foreign exchange rates on payments related to the delisting of Patni. During the year 2012, the Company recognized foreign currency loss on re-measurement of escrow account balance and foreign exchange gain on re-measurement of redeemable non-controlling interest liability. iGATE believes that eliminating the non-capitalized items for purposes of calculating these non-GAAP measures facilitates a more meaningful evaluation of iGATE’s current performance and comparisons to its past performance.

• Severance Cost: As a result of the acquisition of Patni, we incurred severance costs in connection with the termination of the services of some of Patni’s employees.

• Delisting expenses: iGATE is voluntarily delisting the equity shares of its majority owned subsidiary, Patni from the National Stock Exchange of India Limited and the Bombay Stock Exchange Limited and the American Depository Shares from the New York Stock Exchange. Delisting is an infrequent activity and expenses incurred in connection therein are inconsistent in amount and are significantly impacted by the timing and nature of the delisting. We believe that eliminating these expenses for purposes of calculating these non-GAAP measures facilitates a more meaningful evaluation of our current operating performance and comparisons to its past operating performance.

• Merger and reorganization expenses: iGATE is merging and reorganizing its overseas subsidiaries and branches to simplify the corporate structure, and has incurred legal and professional expenses in connection with these actions. Merger and reorganization is an infrequent activity and expenses incurred in connection therein are inconsistent in amount and significantly impacted by the timing and nature of the reorganization. We believe that eliminating these expenses for purposes of calculating these non-GAAP measures facilitates a more meaningful evaluation of our current operating performance and comparisons to our past operating performance.

From time to time in the future, there may be other items that we may exclude in presenting our financial results.

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The table below presents a reconciliation of our non-GAAP financial measures to the most comparable GAAP measures (in thousands, except for per share data):

	Three months ended September 30,						Nine months ended September 30,
	2012			2011			2012			2011
Net income attributable to iGATE Corporation	$	28,293		$	14,253		$	65,008		$	36,191
Adjustments:
Amortization of intangible assets, net of taxes		1,823			2,119			6,118			3,640
Share based compensation, net of taxes		2,469			3,508			6,441			6,726
Acquisition expenses, net of taxes		0			0			0			10,914
Delisting expenses, net of taxes		129			0			2,454			0
Merger and reorganization expenses		764			0			764			0
Forex loss (gain) on acquisition hedging and other re-measurement, net of taxes		2,105			(937	)		5,259			(15,251	)
Severance cost, net of taxes		0			287			0			4,675
Non-GAAP Net income	$	35,583		$	19,230		$	86,044		$	46,895
Basic earnings per share from operations:
GAAP	$	0.27		$	0.10		$	0.57		$	0.28
Non-GAAP		0.47			0.26			1.14			0.64
Diluted earnings per share from operations:
GAAP	$	0.27		$	0.10		$	0.56		$	0.28
Non-GAAP		0.46			0.26			1.12			0.63
Weighted average shares outstanding, Basic		75,727	*		73,839	*		75,532	*		73,704	*
Weighted average dilutive common equivalent shares outstanding(*)		77,304	*		74,948	*		77,125	*		74,908	*

* Includes assumed conversion of 18.4 million, 17.0 million shares of Series B Preferred Stock as of September 30, 2012 and 2011 respectively.

Non-GAAP Disclosure of Adjusted EBITDA

We present Adjusted EBITDA as a supplemental measure of our performance. We define Adjusted EBITDA as net income attributable to iGATE plus (i) depreciation and amortization, (ii) interest expense, (iii) income tax expense, minus (iv) other income, net plus(v) foreign exchange (gain)/loss, (vi) stock-based compensation (vii) acquisition expenses (viii) severance expenses, (ix) delisting (going private) expenses and (x) merger and reorganization expenses. We eliminated the impact of the above as we do not consider them as indicative of our ongoing operating performance. These adjustments are itemized below. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

We present Adjusted EBITDA because we believe it assists investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. In addition, we use Adjusted EBITDA: (i) as a factor in evaluating management’s performance when determining incentive compensation, (ii) to evaluate the effectiveness of our business strategies and (iii) because our credit agreement and our indenture use measures similar to Adjusted EBITDA to measure our compliance with certain covenants.

Adjusted EBITDA has limitations as an analytical tool. Some of these limitations are:

• Adjusted EBITDA does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;

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• Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

• Adjusted EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debts; although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and adjusted EBITDA does not reflect any cash requirements for such replacements; non-cash compensation is and will remain a key element of our overall long-term incentive compensation package, although we exclude it as an expense when evaluating our ongoing operating performance for a particular period;

• Adjusted EBITDA does not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations; and other companies in our industry may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.

Because of these limitations, Adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA only supplementally.

The table below presents a reconciliation of net income, net of tax, to Adjusted EBITDA (in thousands):

	Three months ended September 30,						Nine months ended September 30,
	2012			2011			2012			2011
Net income attributable to iGATE Corporation	$	28,293		$	14,253		$	65,008		$	36,191
Adjustments:
Depreciation and amortization		10,027			13,667			36,757			25,032
Interest expenses		21,994			19,546			62,149			32,834
Income tax expense (benefit)		8,495			(2,793	)		24,007			7,314
Non-controlling interest		0			2,950			4,476			3,437
Other income, net		(8,815	)		(4,083	)		(23,975	)		(8,501	)
Foreign exchange loss (gain)		3,763			7,874			18,198			(16,846	)
Stock Based Compensation		3,795			4,346			9,270			8,868
Acquisition expenses		0			0			0			10,914
Severance expenses		0			0			0			6,164
Delisting expenses		328			0			3,532			0
Merger and reorganization expenses		764			0			764			0
Adjusted EBITDA (a non-GAAP measure)	$	68,644		$	55,760		$	200,186		$	105,407

The company presents the non-GAAP financial measure Adjusted EBITDA because, management uses this measure to monitor and evaluate the performance of the business and believes the presentation of this measure will enhance the investors’ ability to analyze trends in the business and evaluate our underlying performance relative to other companies in the industry.

Liquidity and Capital Resources

Cash from Operations

Our largest source of operating cash flows is cash collections from our customers for different information technology services we render under various Statements of Work (“SOWs”). Our primary uses of cash from operating activities are for personnel related expenditures, leased facilities and taxes.

Net cash provided by operating activities decreased for the nine months ended September 30, 2012 primarily due to higher net income adjusted for depreciation, amortization of intangible assets, deferred gain on derivatives and stock-based compensation, which were offset by unfavorable changes in working capital, primarily increases in accounts receivable and unbilled revenues resulting from increases in revenues, prepaid expenses and other current assets and decreases in accrued and other liabilities. Our working capital may be impacted by some of the aforementioned factors in future periods, certain amounts and timing of which are variable.

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Investing Activities

Cash used in investing activities for the nine months ended September 30, 2012 was $336 million, as compared to $1.2 billion for the nine months ended September 30, 2011.

Our investment portfolio and other investments increased by $89.8 million for the nine months ended September 30, 2012 as compared to a decrease of $21.5 million for the nine months ended September 30, 2011. The decrease in investments during 2011 was due to the Patni Acquisition.

On May 12, 2011, we completed the Patni Acquisition for net cash consideration of $1.2 billion. During the nine months ended September 30, 212, we deposited approximately $239.6 million in an escrow account to facilitate the purchase of remaining shares in Patni, out of which $223.5 million was used to purchase 22.5 million shares of Patni as of September 30, 2012.

Financing Activities

Cash provided by financing activities was $299.4 million and $1.1 billion for the nine months ended September 30, 2012 and 2011, respectively. The cash provided during the nine months ended September 30, 2012 was primarily due to the drawdown of $222.2 million from a bank to fund the purchase of Patni’s remaining shares and delisting related expenses, term loan of $70 million to finance the purchase of iAI and proceeds of $7.2 million from the exercise of stock options.

On February 1, 2011 and May 9, 2011 we issued Series B Preferred Stock amounting to $330 million and the proceeds from such issuance (net of issuance costs of $3.4 million) was $326.6 million. On February 21, 2011, we entered into an agreement with Standard Chartered Bank for availing an unsecured revolving working credit facility of $70 million at an annual interest rate of LIBOR plus 195 basis points, renewable on an annual basis. During the nine months ended September 30, 2011, the Company borrowed $52.0 million of the line of credit at an interest rate of 1.34%.

On April 29, 2011, we issued $770 million ($737 million, net of commitment, placement and other financing and professional fees) aggregate principal amount of 9.0% Senior Notes due 2016 (“Notes”) in a private placement for the purpose of financing a portion of the Patni Acquisition.

Our primary future cash requirements will be to fund working capital, debt service, capital expenditures, and benefit obligations. In addition to our working capital requirements, we expect our primary cash requirements for 2012 to be as follows:

• Debt service—We expect to make payments of approximately $79.4 million during the next twelve months for interest associated with the Notes and bank borrowings. We do not foresee the need to repatriate earnings of foreign subsidiaries in order to make our scheduled debt payments.

• Capital expenditures—We expect to spend approximately $65.0 million for new and existing facilities expansion and new hardware and software. We will fund the entire capital expenditure through a combination of available cash reserves and short term investments and expect to fund the costs of future expansion through our net cash flows provided by operations and ADS net proceeds at Patni.

We and our subsidiaries may from time to time seek to retire or purchase our outstanding debt (including publicly issued debt) through cash purchases and/or exchanges, in open market purchases, privately negotiated transactions, by tender offer or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

Future Sources of Liquidity

We expect our primary source of cash to be positive net cash flows provided by operating activities. Further, we continue to focus on cost reductions and initiated steps during 2011 to reduce overhead and provide cash savings. The Company currently has two revolving credit facilities providing for borrowings of up to an aggregate of $120 million subject to certain contractual limitations. As of September 30, 2012, we had borrowed $57 million under the revolving credit facilities. Both revolving credit facilities include other conditions that, if not complied with, could restrict our ability to borrow.

For more information on the revolving credit facilities and the restrictions on borrowing thereunder, please refer to Note 6, Line of Credit, and Note 7, Senior Notes to our unaudited condensed consolidated financial statements included in this quarterly report on 10-Q.

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In order to meet our cash needs we may, from time to time, repatriate the earnings of our foreign subsidiaries, borrow under our credit facilities or issue long term or short-term debt or equity, if the market and our credit facilities and the indentures governing our notes permit us to do so. We regularly evaluate market conditions, our liquidity profile, and various financing alternatives for opportunities to enhance our capital structure. If market conditions are favorable, we may refinance our existing debt or issue additional securities.

On November 29, 2010, iGATE filed with the SEC the second amendment to a registration statement on Form S-3 (as it may be amended from time to time, the “Registration Statement”) relating to a proposed follow-on public offering of 10 million shares of its common stock, 6 million shares offered by its selling shareholders and $100 million of debt securities. This document shall not constitute an offer to sell or the solicitation of any offer to buy nor shall there be any sale of those securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State. Further, there is no way to predict whether or not we will be successful in completing the offering as contemplated and if it is successful, we cannot be certain if, or how much of, the net proceeds will be used for the purposes identified above. If we do not generate sufficient cash from operations, face unanticipated cash needs such as the need to fund significant strategic acquisitions or do not otherwise have sufficient cash and cash equivalents, we may need to incur additional debt or issue additional equity.

Based on past performance and current expectations, we believe that our existing cash and cash equivalents and short-term investments of $547.7 million as of September 30, 2012, and future cash provided by operating activities will be sufficient to meet our future cash requirements described above. Our ability to meet these requirements will depend on our ability to generate cash in the future, which is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control.

Debt Service Obligations

As a result of the acquisition of Patni, our level of indebtedness increased. As of September 30, 2012, principal payments due under our indebtedness, including preferred stock, were $1.5 billion, excluding capital lease obligations of $1.3 million. Our interest expense for the nine months ended September 30, 2012 was $56.2 million.

Our leverage requires that a substantial portion of our cash flows from operations be dedicated to the payment of principal and interest on our indebtedness. We continually monitor our exposure to the risk of increased interest rates as portions of our borrowings under our credit facilities are at variable rates of interest.

The Company has made all scheduled payments timely under the indenture governing its senior notes, and the revolving facilities.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk Factors

Market risk factors associated with our business are discussed in Item 7A in our Annual Report on Form 10-K for the year ended December 31, 2011. There have been no material changes from the market risk factors previously disclosed in the Company’s Form 10-K.

Effect of Hypothetical Currency Rate Fluctuations

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

As of September 30, 2012, the potential gain or loss in the fair value of the Company’s outstanding foreign currency contracts assuming hypothetical 10%, 5%, 2% and 1% fluctuations in currency rates would be approximately:

	Valuation given X% decrease In Rupee / USD rate									Fair Value as of September 30, 2012			Valuation given X% increase in Rupee / USD rate
	(10%)		(5%)		(2%)		(1%)						1%			2%			5%			10%
Rupee to U.S. Rate		47.57		50.21		51.79		52.32			52.85			53.38			53.91			55.49			58.14
Derivative Instruments	$	30.1	$	12.6	$	2.9	$	(0.1	)	$	(3.2	)	$	(6.1	)	$	(9.0	)	$	(17.4	)	$	(30.4	)

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

According to Gartner Inc.(Source: Gartner Forecast Alert: IT Spending, Worldwide, 3Q12 Update, ID Number: G00229877), an IT research and advisory company, the IT Services industry worldwide IT spending is forecasted to total $854 billion in 2012, a 1.1 % increase from 2011 revenue of nearly $845 billion.

(Disclaimer: The Gartner Report described herein, represent(s) data, research opinion or viewpoints published, as part of a syndicated subscription service, by Gartner, Inc. (“Gartner”), and are not representations of fact. Each Gartner Report speaks as of its original publication date (and not as of the date of this Report) and the opinions expressed in the Gartner Report(s) are subject to change without notice.)

The global economic recovery continues and modest growth in IT spending is expected. The potential for event-driven shocks such as the recent euro-zone crisis, exchange rate fluctuations and rising oil prices may impact the IT spending. There has also been little change in either business confidence or consumer sentiment in the past quarter. The industry is aggressively pursuing innovations that it expects to stimulate demand beyond such modest growth. Besides the organic growth, the industry players are also aggressively pursuing mergers and acquisitions to stimulate growth. We believe that our business model is somewhat diversified, both geographically and operationally as we serve both IT and IT-enabled solutions. We believe our strategy of a global delivery model positions us well to provide a greater breadth of services in catering to market needs and opportunities.

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ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As of the end of the period covered by this report, 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 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.

The certification required by Section 302 of the Sarbanes-Oxley Act of 2002 are filed as exhibits 31.1 and 31.2, respectively, to this quarterly report on Form 10-Q.

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PART II. OTHER INFORMATION

ITEM 1A. RISK FACTORS

Risk factors associated with our business are discussed in Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2011. There have been no material changes from the risk factors previously disclosed in the Company’s Form 10-K.

ITEM 6. EXHIBITS

(a) Exhibits

2.1	Share Purchase Agreement, dated as of January 10, 2011, by and among Pan-Asia iGATE Solutions, iGATE Global Solutions Limited and the sellers party thereto, is incorporated by reference to Exhibit 2.1 to iGATE Corporation’s (“iGATE”) Form 8-K, filed on January 12, 2011.
2.2	Share Purchase Agreement, dated as of January 10, 2011, by and among Pan-Asia iGATE Solutions and General Atlantic Mauritius Limited, is incorporated by reference to Exhibit 2.2 to iGATE’s Form 8-K, filed on January 12, 2011.
2.3	Securities Purchase Agreement, dated as of January 10, 2011, by and among Pan-Asia iGATE Solutions and General Atlantic Mauritius Limited, is incorporated by reference to Exhibit 2.3 to iGATE’s Form 8-K, filed on January 12, 2011.
2.4	Separation and Distribution Agreement by and between iGATE and Mastech Holdings, Inc., dated September 30, 2008, is incorporated by reference to Exhibit 2.1 to iGATE’s Form 8-K, filed on October 1, 2008.
3.1	Third Amended and Restated Articles of Incorporation of iGATE Corporation, dated May 5, 2011, is incorporated by reference to Exhibit 3.1 to iGATE’s Form 8-K, filed on May 11, 2011.
3.2	Amended and Restated Bylaws of iGATE Corporation are incorporated by reference to Exhibit 3.2 to the Quarterly Report on Form 10-Q, filed on August 14, 2000.
4.1	Registration Rights Agreement, between iGATE Corporation and the Selling Shareholders named therein, dated as of August 17, 2010 is incorporated by reference to Exhibit 4.2 to iGATE Corporation’s Registration Statement on Form S-3, Commission File No. 333-170042, filed on October 20, 2010.
4.2	Form of certificate representing the Common Stock of the Company is incorporated by reference to Exhibit 4.1 to iGATE Corporation’s Registration Statement on Form S-1, Commission File No. 333-14169, filed on November 19, 1996.
4.3	Indenture, dated April 29, 2011, by and among iGATE Corporation, iGATE Technologies, Inc., and Wilmington Trust, National Association (successor by merger to Wilmington Trust FSB), as trustee, is incorporated by reference to Exhibit 4.1 to iGATE Corporation’s Form 8-K, filed on May 5, 2011.
4.4	Supplemental Indenture, dated May 12, 2011, among iGATE Corporation, the guarantors named therein, and Wilmington Trust, National Association (successor by merger to Wilmington Trust FSB), as trustee, is incorporated by reference to Exhibit 4.4 to iGATE’s Registration Statement on Form S-4, filed on September 30, 2011.
4.5	Registration Rights Agreement, dated April 29, 2011, by and among iGATE Corporation, iGATE Technologies, Inc. and the initial purchasers named therein is incorporated by reference to Exhibit 4.2 to iGATE Corporation’s Form 8-K, filed on May 5, 2011.
4.6	Escrow Agreement, by and among iGATE Corporation, as Grantor, Wilmington Trust, National Association (successor by merger to Wilmington Trust FSB), as Trustee, and Standard Chartered Bank, as Escrow Agent, is incorporated by reference to Exhibit 10.1 to iGATE Corporation’s Form 8-K, filed on May 5, 2011.
4.7	Account Security Deed, dated as of May 3, 2011, by and among iGATE Corporation, as charger, and Wilmington Trust, National Association (successor by merger to Wilmington Trust FSB), as charge, is incorporated by reference to Exhibit 10.2 to iGATE Corporation’s Form 8-K, filed on May 5, 2011.
10.1	Employment Agreement dated July 1, 2011, between David A. Kruzner and iGATE Technologies Inc. is incorporated by reference to Exhibit 10.1 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.2	Amendment dated March 29, 2012 to Employment Agreement dated July 1, 2011, between David A. Kruzner and iGATE Technologies Inc. is incorporated by reference to Exhibit 10.2 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.

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10.3	Performance Share Award Agreement between David A. Kruzner and iGATE Corporation dated May 12, 2011 is incorporated by reference to Exhibit 10.3 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.4	Restricted Stock Agreement between David Kruzner and iGATE Corporation dated May 12, 2011 is incorporated by reference to Exhibit 10.4 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.5	Employment Agreement dated July 1, 2011, between Vijay Khare and iGATE Technologies Inc. is incorporated by reference to Exhibit 10.5 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.6	Amendment dated March 29, 2012 to Employment Agreement dated July 1, 2011, between Vijay Khare and iGATE Technologies Inc. is incorporated by reference to Exhibit 10.6 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.7	Performance-Share Award Agreement between Vijay Khare and iGATE Corporation dated May 12, 2011 is incorporated by reference to Exhibit 10.7 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.8	Restricted Stock Agreement between Vijay Khare and iGATE Corporation dated May 12, 2011 is incorporated by reference to Exhibit 10.8 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.9	Employment Agreement dated July 1, 2011, between Satish Joshi and iGATE Technologies Inc. is incorporated by reference to Exhibit 10.9 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.10	Amendment dated March 29, 2012 to Employment Agreement dated July 1, 2011, between Satish Joshi and iGATE Technologies Inc. is incorporated by reference to Exhibit 10.10 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.11	Performance Share Award Agreement between Satish Joshi and iGATE Corporation dated May 12, 2011 is incorporated by reference to Exhibit 10.11 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.12	Restricted Stock Agreement between Satish Joshi and iGATE Corporation dated May 12, 2011 is incorporated by reference to Exhibit 10.12 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.13	Employment Agreement dated July 1, 2011, between Derek Kemp and iGATE Technologies Inc. is incorporated by reference to Exhibit 10.13 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.14	Amendment dated March 29, 2012 to Employment Agreement dated July 1, 2011, between Derek Kemp and iGATE Technologies Inc. is incorporated by reference to Exhibit 10.14 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.15	Performance Share Award Agreement between Derek Kemp and iGATE Corporation dated May 12, 2011 is incorporated by reference to Exhibit 10.15 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.16	Restricted Stock Agreement between Derek Kemp and iGATE Corporation dated May 12, 2011 is incorporated by reference to Exhibit 10.16 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.17	Employment Agreement dated July 1, 2011, between Sunil Chitale and iGATE Technologies Inc. is incorporated by reference to Exhibit 10.17 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.18	Amendment dated March 29, 2012 to Employment Agreement dated July 1, 2011, between Sunil Chitale and iGATE Technologies Inc. is incorporated by reference to Exhibit 10.18 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.19	Performance Share Award Agreement between Sunil Chitale and iGATE Corporation dated May 12, 2011 is incorporated by reference to Exhibit 10.19 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.20	Restricted Stock Agreement between Sunil Chitale and iGATE Corporation dated May 12 2011 is incorporated by reference to Exhibit 10.20 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.21	Employment Agreement dated March 26, 2012, between Sanjay Tugnait and iGATE Technologies (Canada) Inc. is incorporated by reference to Exhibit 10.21 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.22	Performance Share Award Agreement between Sanjay Tugnait and iGATE Corporation dated July 12, 2012 is incorporated by reference to Exhibit 10.22 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.23	Restricted Stock Award Agreement between Sanjay Tugnait and iGATE Corporation dated July 12, 2012 is incorporated by reference to Exhibit 10.23 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.24	Credit Agreement, dated as of August 28, 2012, between iGATE Technologies Inc. and Standard Chartered Bank, is incorporated by reference to Exhibit 10.1 to iGATE Corporation’s Form 8-K, filed on September 5, 2012.

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10.25	Guaranty, dated as of August 28, 2012, among iGATE Corporation and certain subsidiaries thereof from time to time party thereto, and Standard Chartered Bank, is incorporated by reference to Exhibit 10.2 to iGATE Corporation’s Form 8-K, filed on September 5, 2012.
31.1	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer.
31.2	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Financial Officer.
32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer.
32.2	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by the Chief Financial Officer.
101.INS	XBRL Instance Document.†
101.SCH	XBRL Taxonomy Extension Schema Document.†
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.†
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.†
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.†
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.†

† Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 31st day of October 2012.

	iGATE CORPORATION
October 31, 2012	/s/ PHANEESH MURTHY
	Phaneesh Murthy Chief Executive Officer and Director
	/s/ SUJIT SIRCAR
	Sujit Sircar Chief Financial Officer

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EXHIBIT INDEX

2.1	Share Purchase Agreement, dated as of January 10, 2011, by and among Pan-Asia iGATE Solutions, iGATE Global Solutions Limited and the sellers party thereto, is incorporated by reference to Exhibit 2.1 to iGATE Corporation’s (“iGATE”) Form 8-K, filed on January 12, 2011.
2.2	Share Purchase Agreement, dated as of January 10, 2011, by and among Pan-Asia iGATE Solutions and General Atlantic Mauritius Limited, is incorporated by reference to Exhibit 2.2 to iGATE’s Form 8-K, filed on January 12, 2011.
2.3	Securities Purchase Agreement, dated as of January 10, 2011, by and among Pan-Asia iGATE Solutions and General Atlantic Mauritius Limited, is incorporated by reference to Exhibit 2.3 to iGATE’s Form 8-K, filed on January 12, 2011.
2.4	Separation and Distribution Agreement by and between iGATE and Mastech Holdings, Inc., dated September 30, 2008, is incorporated by reference to Exhibit 2.1 to iGATE’s Form 8-K, filed on October 1, 2008.
3.1	Third Amended and Restated Articles of Incorporation of iGATE Corporation, dated May 5, 2011, is incorporated by reference to Exhibit 3.1 to iGATE’s Form 8-K, filed on May 11, 2011.
3.2	Amended and Restated Bylaws of iGATE Corporation are incorporated by reference to Exhibit 3.2 to the Quarterly Report on Form 10-Q, filed on August 14, 2000.
4.1	Registration Rights Agreement, between iGATE Corporation and the Selling Shareholders named therein, dated as of August 17, 2010 is incorporated by reference to Exhibit 4.2 to iGATE Corporation’s Registration Statement on Form S-3, Commission File No. 333-170042, filed on October 20, 2010.
4.2	Form of certificate representing the Common Stock of the Company is incorporated by reference to Exhibit 4.1 to iGATE Corporation’s Registration Statement on Form S-1, Commission File No. 333-14169, filed on November 19, 1996.
4.3	Indenture, dated April 29, 2011, by and among iGATE Corporation, iGATE Technologies, Inc., and Wilmington Trust, National Association (successor by merger to Wilmington Trust FSB), as trustee, is incorporated by reference to Exhibit 4.1 to iGATE Corporation’s Form 8-K, filed on May 5, 2011.
4.4	Supplemental Indenture, dated May 12, 2011, among iGATE Corporation, the guarantors named therein, and Wilmington Trust, National Association (successor by merger to Wilmington Trust FSB), as trustee, is incorporated by reference to Exhibit 4.4 to iGATE’s Registration Statement on Form S-4, filed on September 30, 2011.
4.5	Registration Rights Agreement, dated April 29, 2011, by and among iGATE Corporation, iGATE Technologies, Inc. and the initial purchasers named therein is incorporated by reference to Exhibit 4.2 to iGATE Corporation’s Form 8-K, filed on May 5, 2011.
4.6	Escrow Agreement, by and among iGATE Corporation, as Grantor, Wilmington Trust, National Association (successor by merger to Wilmington Trust FSB), as Trustee, and Standard Chartered Bank, as Escrow Agent, is incorporated by reference to Exhibit 10.1 to iGATE Corporation’s Form 8-K, filed on May 5, 2011.
4.7	Account Security Deed, dated as of May 3, 2011, by and among iGATE Corporation, as charger, and Wilmington Trust, National Association (successor by merger to Wilmington Trust FSB), as charge, is incorporated by reference to Exhibit 10.2 to iGATE Corporation’s Form 8-K, filed on May 5, 2011.
10.1	Employment Agreement dated July 1, 2011, between David A. Kruzner and iGATE Technologies Inc. is incorporated by reference to Exhibit 10.1 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.2	Amendment dated March 29, 2012 to Employment Agreement dated July 1, 2011, between David A. Kruzner and iGATE Technologies Inc. is incorporated by reference to Exhibit 10.2 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.3	Performance Share Award Agreement between David A. Kruzner and iGATE Corporation dated May 12, 2011 is incorporated by reference to Exhibit 10.3 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.4	Restricted Stock Agreement between David Kruzner and iGATE Corporation dated May 12, 2011 is incorporated by reference to Exhibit 10.4 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.5	Employment Agreement dated July 1, 2011, between Vijay Khare and iGATE Technologies Inc. is incorporated by reference to Exhibit 10.5 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.6	Amendment dated March 29, 2012 to Employment Agreement dated July 1, 2011, between Vijay Khare and iGATE Technologies Inc. is incorporated by reference to Exhibit 10.6 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.

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10.7	Performance-Share Award Agreement between Vijay Khare and iGATE Corporation dated May 12, 2011 is incorporated by reference to Exhibit 10.7 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.8	Restricted Stock Agreement between Vijay Khare and iGATE Corporation dated May 12, 2011 is incorporated by reference to Exhibit 10.8 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.9	Employment Agreement dated July 1, 2011, between Satish Joshi and iGATE Technologies Inc. is incorporated by reference to Exhibit 10.9 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.10	Amendment dated March 29, 2012 to Employment Agreement dated July 1, 2011, between Satish Joshi and iGATE Technologies Inc. is incorporated by reference to Exhibit 10.10 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.11	Performance Share Award Agreement between Satish Joshi and iGATE Corporation dated May 12, 2011 is incorporated by reference to Exhibit 10.11 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.12	Restricted Stock Agreement between Satish Joshi and iGATE Corporation dated May 12, 2011 is incorporated by reference to Exhibit 10.12 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.13	Employment Agreement dated July 1, 2011, between Derek Kemp and iGATE Technologies Inc. is incorporated by reference to Exhibit 10.13 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.14	Amendment dated March 29, 2012 to Employment Agreement dated July 1, 2011, between Derek Kemp and iGATE Technologies Inc. is incorporated by reference to Exhibit 10.14 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.15	Performance Share Award Agreement between Derek Kemp and iGATE Corporation dated May 12, 2011 is incorporated by reference to Exhibit 10.15 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.16	Restricted Stock Agreement between Derek Kemp and iGATE Corporation dated May 12, 2011 is incorporated by reference to Exhibit 10.16 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.17	Employment Agreement dated July 1, 2011, between Sunil Chitale and iGATE Technologies Inc. is incorporated by reference to Exhibit 10.17 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.18	Amendment dated March 29, 2012 to Employment Agreement dated July 1, 2011, between Sunil Chitale and iGATE Technologies Inc. is incorporated by reference to Exhibit 10.18 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.19	Performance Share Award Agreement between Sunil Chitale and iGATE Corporation dated May 12, 2011 is incorporated by reference to Exhibit 10.19 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.20	Restricted Stock Agreement between Sunil Chitale and iGATE Corporation dated May 12 2011 is incorporated by reference to Exhibit 10.20 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.21	Employment Agreement dated March 26, 2012, between Sanjay Tugnait and iGATE Technologies (Canada) Inc. is incorporated by reference to Exhibit 10.21 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.22	Performance Share Award Agreement between Sanjay Tugnait and iGATE Corporation dated July 12, 2012 is incorporated by reference to Exhibit 10.22 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.23	Restricted Stock Award Agreement between Sanjay Tugnait and iGATE Corporation dated July 12, 2012 is incorporated by reference to Exhibit 10.23 to iGATE Corporation’s Form 10-Q, filed on August 8, 2012.
10.24	Credit Agreement, dated as of August 28, 2012, between iGATE Technologies Inc. and Standard Chartered Bank, is incorporated by reference to Exhibit 10.1 to iGATE Corporation’s Form 8-K, filed on September 5, 2012.
10.25	Guaranty, dated as of August 28, 2012, among iGATE Corporation and certain subsidiaries thereof from time to time party thereto, and Standard Chartered Bank, is incorporated by reference to Exhibit 10.2 to iGATE Corporation’s Form 8-K, filed on September 5, 2012.
31.1	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer.
31.2	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Financial Officer.
32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer.

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32.2	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by the Chief Financial Officer.
101.INS	XBRL Instance Document.†
101.SCH	XBRL Taxonomy Extension Schema Document.†
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.†
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.†
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.†
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.†

† Furnished herewith.

61