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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

For the fiscal year ended December 31, 2003

Commission File Number 000-21755

iGATE CORPORATION

(Exact name of registrant as specified in its charter)

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

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

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

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

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes  x    No  ¨

The aggregate market value of the voting stock held by non-affiliates of the registrant as of March 8, 2004 (based on the closing price of such stock as reported by NASDAQ on such date) was $182,853,660.

The number of shares of the registrant’s Common Stock, par value $.01 per share, outstanding as of March 8, 2004 was 51,935,724 shares.

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in a definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s Proxy Statement, prepared for the Annual Meeting of Shareholders scheduled for May 27, 2004, to be filed with the Commission are incorporated by reference into Part III of this report.

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iGATE CORPORATION

2003 FORM 10-K

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PART I

ITEM 1.    BUSINESS

Overview

This Annual Report on Form 10-K (“Form 10-K”) contains statements that are not historical facts and that constitute “forward-looking statements” within the meaning of such term under the Private Securities Litigation Reform Act of 1995. These forward-looking statements include our financial growth and liquidity projections as well as statements concerning our plans, strategies, intentions and beliefs concerning our business, cash flows, costs and the markets in which we operate. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects” and similar expressions are intended to identify certain forward-looking statements. These forward-looking statements are based on information currently available to us, and we assume no obligation to update these statements as circumstances change. There are risks and uncertainties that could cause actual events to differ materially from these forward-looking statements. While we cannot predict all of the risks and uncertainties, they include, but are not limited to, our ability to predict our financial performance, the level of market demand for our services, the highly-competitive market for the types of services that we offer, the impact of competitive factors on profit margins, market conditions that could cause our customers to reduce their spending for our services, our ability to create, acquire and build new businesses and to 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 South Asia, changes in generally accepted accounting principles and/or their interpretation and other risks that are discussed in the section of Item 1 of this Form 10-K entitled “Risk Factors” and in other sections of this Form 10-K, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”)”.

Unless otherwise indicated or the context otherwise requires, all references in this report to “iGate”, the “Company”, “us”, “our”, or “we” are to iGate Corporation, a Pennsylvania Corporation, and its consolidated subsidiaries. iGate Corporation, formerly named iGate Capital Corporation, through its operating subsidiaries, is a worldwide provider of information technology (“IT”) and Offshore Outsourcing Services (“work- performed primarily in India”) to large and medium-sized organizations. These services include client/server design and development, conversion/migration services, offshore outsourcing, enterprise resource planning (“ERP”) package implementation and integration services, software development and applications maintenance outsourcing.

Website Access to SEC Reports

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

Business Developments

The use of Offshore Outsourcing Services for IT and Business Process Outsourcing Services (“BPO”) is emerging as a global trend in numerous countries and industries. Our clients recognize that offshore outsourcing is a very effective way to provide high quality, timely and cost-effective IT and BPO services.

IT Services which we deliver using our offshore centers include software application development and maintenance, implementation and support of enterprise applications, data management and integration, business intelligence and embedded systems development. We believe that we deliver to our client’s high quality solutions at a substantial saving by using our global pool of highly talented people.

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

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

To enhance our offshore capabilities and to become more visible in the offshore services market, iGate Global Solutions, Ltd. (“IGS”) f/k/a Mascot Systems Ltd., our 88% majority owned Indian company, acquired the stock of eJiva, Inc. (“eJiva”), our wholly-owned U.S. subsidiary, and Aqua Regia, an India-based offshore company which has had an exclusive relationship with eJiva. The purchase consideration was $9.9 million and also included iGate’s Toronto Development Center, acquired by eJiva prior to its combination with IGS. The acquisition of eJiva’s stock was effective January 1, 2003. The acquisition of Aqua Regia became effective April 1, 2003. Prior to IGS’s acquisition of eJiva, the staffing portion of eJiva’s business was sold to iGate Mastech, Inc. (“iGate Mastech”) f/k/a Mastech Emplifi, Inc.

We believe that these transactions will enable IGS to become more competitive with the larger offshore market leaders. In the offshore industry, revenue size and company size are critical success factors. Further, eJiva brought certain significant client relationships to enable IGS to expand its offshore business and to combine its service offerings with eJiva’s service offerings in the upcoming year. In October 2003, IGS committed to build a $15.0 million campus on a 14-acre tract of land located in Bangalore. Phase I was completed in February 2004 with Phase II expected to be completed by December 2004.

In connection with the implementation of our business strategy, we have entered into the following transactions and alliances:

On October 20, 2003, IGS established an alliance with the Concours Group (“Concours”), a US based strategic consulting and research firm, and made a $1.8 million investment for approximately a 4.5% ownership in Concours and through this alliance will attempt to leverage Concours’ clients executive-level relationships. We account for this investment under the cost method of accounting.

During October 2003, IGS began a joint venture with Software AG (“SAG”), a leading provider of system software and the second largest software products company based in Germany. The partnership, named Software AG (India) Private Ltd. is 49% owned by IGS and began operations in October. Software AG will strengthen IGS offshore business by offering SAG services including application development, application management and maintenance, and professional services projects. We account for our share of this partnership’s profit and loss using the equity-method of accounting.

On October 20, 2003, IGS announced it has agreed to acquire the assets of Bangalore, India based IdeaSpace Solutions Ltd.’s (“IdeaSpace”) information technology solutions and services business for approximately $1.5 million. IdeaSpace specializes in banking technology and operations. The acquisition was closed on December 10, 2003, and includes IdeaSpace operations from that date in our iGate Solutions segment.

In September 2003, iGate purchased a 95% ownership in DiagnoSearch, Inc. for $1.5 million. DiagnoSearch is an Indian based Clinical Research Company. The DiagnoSearch acquisition was effective October 28, 2003. The results of DiagnoSearch’s operations from that date are included in our iGate Corporate segment.

On August 21, 2003, IGS acquired a 51% majority interest in Quintant, an India-based business services provider for $18.8 million in cash. As part of the same agreement, iGate acquired an approximate 13% interest in Quintant for $0.9 million in cash. iGate intends to acquire the remaining 36% of Quintant in March 2004, with an issuance of approximately 2.1 million shares of iGate restricted stock as well as the grant of 0.5 million iGate stock options. Quintant is considered to be a development stage company with operating costs but minimal revenue streams. Due to certain provisions within the acquisition agreement, we have accounted for the

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acquisition as a majority-owned subsidiary, and have recognized approximately 94% of Quintant’s losses from August 21, 2003 in our Consolidated Statement of Operations for the year ending December 31, 2003.

In July 2003, IGS entered into an India-based joint venture agreement with CIBER, Inc. IGS has a 49% ownership stake in the entity. The partnership, named CIBER India Pvt. Ltd. (“CIBER”), offers software services, including applications development, enterprise application support and IT outsourcing services. We account for our share of this partnership’s profit and loss using the equity-method of accounting.

On May 20, 2003, IGS acquired the contact center and facility management business of IT&T Technology Services Ltd. (“ITT”) for $4.5 million in cash. ITT’s businesses are headquartered in Delhi, India. This acquisition will both expand and compliment our service offerings and is aligned with our strategy to grow our offshore-based BPO services. The operations of ITT were included in the operations of IGS from the date of acquisition.

On February 26, 2003, iGate Corporation (“iGate”), through a newly formed subsidiary, iGate Clinical Research International, Inc. (“ICRI”) f/k/a iGate Clinical Research Management, Inc., purchased the assets of Pittsburgh Clinical Research Network (“PCRN”), for $0.4 million. iGate retained a 90% ownership interest in ICRI, with one minority shareholder owning a 10% minority interest in the entity. The operations of ICRI were included in iGate Corporate’s operations from the date of purchase.

In connection with the January 2003 sale of eJiva from iGate, Inc. to IGS, the outstanding shares not owned by iGate were either converted into iGate shares, canceled or purchased in the manner as described below. Each share of common stock of eJiva which was originally issued to the Co-Founders of Innovative Resource Group, Inc. (“IRG”) in the form of restricted stock was converted (based upon the conversion ratio set forth in the merger agreement) into shares of restricted common stock of iGate with the identical terms and vesting schedule as the eJiva restricted stock. The remaining shares of eJiva common stock held by the Co-Founders of IRG were canceled and retired in consideration of iGate assuming all obligations of eJiva related to a put option that was granted to the Co-Founders of IRG in connection with the merger of IRG with and into eJiva on December 31, 2001, which required eJiva to pay such IRG Co-Founders $9.3 million in the aggregate for such shares. The remaining outstanding capital stock of eJiva held by persons other than iGate and the IRG Co-Founders was converted into and became a right to receive $0.21 per share in cash, which approximated $0.1 million. The put option was exercised and paid in October 2003.

Reportable Financial Segments

In January 2003, we re-examined our financial reporting structure, how we manage our operating businesses and how we categorize our then existing service offerings. As a result of our review, we decided to segment our business according to our service offerings. Our decision was based upon the following factors: (1) to reflect the way we and the chief operating decision makers analyze and manage our businesses; (2) to provide the readers of our financial statements a much simpler view of our business; and (3) with the deconsolidation of itiliti and the cessation of operations of MobileHelix, our service offerings became substantially easier to define and segment by service offering. The composition of segments and measure of segment profitability is consistent with that used by the Company’s management.

In 2002, our reporting segments were Offshore Outsourcing, Enterprise Applications, IT Staffing and iGate Corporate.

In 2003, our recast segments are iGate Solutions, iGate Professional Services and iGate Corporate.

Prior periods have been reclassified to conform to the current segment reporting.

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iGate Solutions

The iGate Solutions segment’s service offerings include offshore outsourcing of IT services and IT systems maintenance. Other offerings include enterprise applications implementation and related custom development of applications such as Oracle, SAP and PeopleSoft. The Segment also offers application maintenance outsourcing, business intelligence services and data management and application re-engineering through its Offshore Delivery Centers (“ODCs”).

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

The majority of our revenues in the iGate Solutions segments are derived through IGS, our publicly held Indian subsidiary. Our iGate Solutions segment has approximately 3,600 employees.

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

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

The iGate Solutions segment services customers in a wide range of industries. The segment’s largest customer is General Electric Company (“GE”) which accounts for 34% of its revenues. IGS is a Global Preferred Partner of GE. Its Global Preferred Partnership status was renewed in November 2003 through the end of 2006.

iGate Professional Services (“IPS”)

Our IPS segment provides a variety of client-managed and supervised IT staffing service offerings which include enterprise resource package implementation and integration, application support services and client directed software design and customization. The IPS segment also offers training as a service to its customers.

The IPS segment markets it services to application development managers and information technology directors within prospective customers companies. The IPS segment also responds to requests for proposals in order to obtain preferred vendor status to secure long-term engagement relationships. IPS contracts provide for payments on a time-and-materials basis, based on the number of consultant hours worked on the project. Certain contracts are based upon a fixed price with payment based upon deliverables and/or project milestones recorded. Clients typically have the right to cancel contracts with minimal notice.

The IPS segment serves a wide variety of customers in numerous industries in the U.S., Canada, Australia and portions of the European markets. Approximately 66% of the revenues for the year ended December 31, 2003 of the IPS segment are North American. The segment has approximately 1,400 employees.

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iGate Corporate (“iGate”)

Our iGate Corporate segment includes the operations of jobcurry Systems Private Ltd. (“jobcurry”), ICRI, DiagnoSearch and corporate and other unallocated costs. In 2002, iGate Corporate also included itiliti, which was deconsolidated in March 2002, and MobileHelix, which ceased operations in February 2002. jobcurry continues to provide recruiting and placement services for iGate and outside customers. ICRI and DiagnoSearch contracts with pharmaceutical companies to conduct clinical trials on their behalf. DiagnoSearch performs offshore clinical trials. These entities are excluded from the above segments due largely to their dissimilar service offerings and certain economic characteristics. The segment has approximately 190 employees.

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

Competition

The IT services and Offshore Outsourcing services industries are highly competitive, and are served by numerous global, national, regional and local firms. Primary competitors in the IT industry include participants from a variety of market segments, including the major consulting firms, systems consulting and implementation firms, Internet services and consulting companies, applications software firms, Indian based Offshore Outsourcing companies, service groups of computer equipment companies, general management consulting firms, programming companies and temporary staffing firms. We believe that the principal competitive factors in the IT services and Offshore Outsourcing markets include the range of services offered, size and scale of service provider, global reach technical expertise, responsiveness to client needs, speed in delivery of IT solutions, quality of service and perceived value. We believe that we compete favorably with our principal competitors with respect to these factors. Competition for acquisition candidates, as well as for clients and strategic relationships, may also develop among subsidiaries of iGate or between iGate and one or more of our operating subsidiaries or other companies in which we have equity investments.

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Our Partner Companies and Affiliates

The following is a listing as of March 15, 2004 of all of our principal operating subsidiaries and affiliates, including the percentage of our ownership in each of these companies:

All of our ownership positions set forth in the charts in this Item 1 have been calculated based on the issued and outstanding common stock or membership interests, as the case may be, of each company/entity, assuming the issuance of common stock on the conversion or exercise of preferred stock and convertible notes, but excluding the effect of unexercised options, warrants and unvested restricted stock, except for the Quintant acquisition discussed more fully in the Notes.

Intellectual Property Rights

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

Generally, all software that we develop in connection with a client engagement is typically assigned to the client. In limited situations, we may retain ownership or obtain a license from our client, which permits us or a third party to market the software for the joint benefit of the client and iGate or for our sole benefit.

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Human Resources

Our success depends in large part on our ability to attract, develop, motivate and retain highly skilled IT professionals. We recruit in a number of countries, including India, the United States, Canada, the United Kingdom, Singapore, Australia, the Philippines, Russia, Ukraine and South Africa. We advertise in newspapers and trade magazines. In addition, our employees are a valuable recruiting tool and are actively involved in referring new employees and screening candidates for new positions.

We have a focused retention strategy that includes career planning, training, benefits and an incentive plan. Our benefits package includes subsidized health insurance, a 401(k) plan, group life insurance and a long-term disability plan. We intend to continue to use stock options as part of our recruitment and retention strategy. We also have a training infrastructure. We train employees on a variety of platforms and help them transition from legacy to advanced architecture skills by providing cross-platform training in new technologies. We have implemented an Intranet to allow our employees to access our courseware and computer-based training modules via the Internet so that the training is available to all employees worldwide at their individual convenience and pace.

At December 31, 2003, iGate (including its operating subsidiaries) had approximately 5,100 non-unionized employees comprised of approximately 4,400 IT professionals (including subcontractors) and approximately 700 individuals working in sales, recruiting, general and administrative roles. As of December 31, 2003, approximately 13% of our U.S. workforce was working under H-1B temporary work permits in the United States. We believe that our relationships with our employees are good.

RISK FACTORS

Our New Business Strategy is Unproven

We have significantly reorganized our business to reflect our business strategy to increase our focus on our offshore delivery business in India and to expand our offshore business to BPO services, including non-IT related BPO services, and there is no guarantee that this reorganization will be successful. The success of our new business strategy depends in part on the ability of the iGate companies to work collaboratively, share information and leverage their collective resources to optimize strategic opportunities and our ability to effectively identify non-IT related BPO services and deliver cost effective solutions. We cannot be certain that this strategy will improve our performance, and it is possible that the strategy will detract from our performance. The recent difficult economic conditions in many sectors of our business have exacerbated these challenges. In addition, if we cannot convince potential strategic partners of the value of our business model, our ability to acquire new companies and businesses may be adversely affected and our strategy for continued growth may not succeed.

Recruitment and Retention of IT Professionals

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

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Government Regulation of Offshore Outsourcing

Recently, some organizations have expressed concerns about a perceived association between offshore outsourcing and the loss of jobs in the United States. Within the last 12 months, some U.S. states have enacted legislation restricting government agencies from outsourcing their back office processes and IT solutions work to companies outside the United States. It is also possible that U.S. private sector companies that work with these states may be restricted from outsourcing their work related to government contracts. We currently do not have significant contracts with U.S. federal or state government entities, however, there can be no assurance that these restrictions will not extend to private companies, such as our clients. Any changes to existing laws or the enactment of new legislation restricting offshore outsourcing may adversely impact our ability to do business in the United States, particularly if these changes are widespread.

Government Regulation of Immigration

We recruit IT professionals on a global basis and, therefore, must comply with the immigration laws in the countries in which we operate, particularly the United States. As of December 31, 2003, approximately 13% of our U.S. workforce were working under H-1B temporary work permits in the United States. Statutory law limits the number of new H-1B petitions that may be approved in a fiscal year, and if we are unable to obtain H-1B visas for our employees in sufficient quantities or at a sufficient rate for a significant period of time, our business, operating results and financial condition could be adversely affected. On October 17, 2000, the “American Competitiveness in the Twenty-First Century Act” (the “American Competitiveness Act”) was signed into law, and the annual H-1B visa quota for 2001, 2002 and 2003 was increased to 195,000. The annual quota reverts to 65,000 in fiscal year 2004. We note that the special H-1B training filing fee was eliminated, and that the American Competitiveness Act now permits H-1B workers to change employers more easily under certain conditions, which could adversely impact employee retention rates among the Company’s H-1B worker consultants.

Over that past several years approximately 90% of our H1-B hires were individuals not subject to the annual quota because they were already in the U.S. in H-1B status. In the long term, the pool of available H-1B workers in the U.S. that are not subject to the annual quota will eventually be depleted. If the pool of H1-B workers is not replenished by Congress, our recruiting of H1-B workers may be negatively impacted.

Variability of Quarterly Operating Results

The revenues and operating results of many of the iGate companies are subject to significant variations from quarter to quarter depending on a number of factors, including the timing and number of client projects commenced and completed during the quarter, the number of working days in a quarter, employee hiring, attrition and utilization rates and the mix of time-and-materials projects versus proportional performance and maintenance projects during the quarter. Certain of the iGate companies recognize revenues on time-and-materials projects as the services are performed, while revenues on proportional performance projects are recognized using the proportional performance method. Certain contracts with no stated deliverables, with a designated workforce assigned, recognize revenues on a straight-line basis over the life of the contract, which are typically one year in duration. Although proportional performance projects have not contributed significantly to revenues and profitability to date, operating results may be adversely affected in the future by cost overruns on proportional performance projects. Because a high percentage of the expenses of many of the iGate companies are relatively fixed, variations in revenues may cause significant variations in operating results. Additionally, the iGate companies periodically incur cost increases due to both the hiring of new employees and strategic investments in infrastructure in anticipation of future opportunities for revenue growth.

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

Our international consulting and offshore software development depend greatly upon business immigration and technology transfer laws in those countries, and upon the continued development of technology

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infrastructure. There can be no assurance that our international operations will be profitable or support our growth strategy. The risks inherent in our international business activities include:

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

Exposure to Regulatory and General Economic Conditions in India

Our subsidiary IGS utilizes offshore software development centers based in Bangalore, Chennai, Hyderabad, Pure and Nodia, India. IGS also operates recruiting and training centers in India. The Indian government exerts significant influence over its economy. In the recent past, the Indian government has provided significant tax incentives and relaxed certain regulatory restrictions in order to encourage foreign investment in certain sectors of the economy, including the technology industry. Certain of these benefits that directly affect us include, among others, tax holidays (temporary exemptions from taxation on operating income), liberalized import and export duties and preferential rules on foreign investment and repatriation. To be eligible for certain of these tax benefits, we must continue to meet certain conditions. A failure to meet such conditions in the future could result in the cancellation of the benefits. There can be no assurance that such tax benefits will be continued in the future at their current levels. Changes in the business or regulatory climate of India could have a material adverse effect on our business, operating results and financial condition.

Our wage costs in India have historically been significantly lower than wage costs in the United States and Europe for comparably skilled professionals, and this has been one of our competitive advantages. However, wage increases in India may prevent us from sustaining this competitive advantage and may negatively affect our profit margins. We may need to increase the levels of our employee compensation more rapidly than in the past to retain talent. Unless we are able to continue to increase the efficiency and productivity of our employees, wage increases in the long term may reduce our profit margins.

Risks Associated with Covenants in Certain Financing Instruments

In September 2003, we entered into a $25.0 million secured credit facility (“the PNC Facility”) with PNC Bank, N.A (“PNC”) to replace our previous $50.0 million credit facility with PNC. The PNC Facility contains restrictive covenants that require us to meet certain financial criteria on a quarterly basis. We may not be able to continue to satisfy the financial covenants in these documents. If we cannot satisfy such covenants and we are not able to renegotiate the terms and conditions thereof, we may not have access to funds under the PNC Facility. Currently, the most restrictive covenant is the obtainment of Tangible Net Worth of at least $95 million. In addition, the PNC Facility requires that we maintain an aggregate of $30 million in cash and cash equivalents at all times during the term of the PNC Facility, of which cash and cash equivalents in the amount of $25 million have been pledged to PNC for the term of the PNC Facility. These restrictions on our cash and cash equivalents may restrict our ability to make investments in new and existing businesses. IGS cannot borrow funds under the PNC Facility.

Intense Competition in the IT and Offshore Outsourcing Services Industries

The IT and Offshore Outsourcing services industries are highly competitive and served by numerous global, national, regional and local firms. Primary competitors include participants from a variety of market segments,

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including the major consulting firms, systems consulting and implementation firms, India based Offshore Outsourcing services, applications software firms, service groups of computer equipment companies, specialized interest consulting firms, programming companies and temporary staffing firms. Many of these competitors have substantially greater financial, technical and marketing resources and greater name recognition than we have. There are relatively few barriers to entry into our markets and we may face additional competition from new entrants into our markets. In addition, there is a risk that clients may elect to increase their internal resources to satisfy their applications solutions needs. Further, the IT services industry is undergoing consolidation, which may result in increasing pressure on margins. These factors may limit our ability to increase prices commensurate with increases in compensation. There can be no assurance that we will compete successfully with existing or new competitors in the IT and Offshore Outsourcing services markets.

iGate Companies May Compete with Each Other

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

Risks Related to Inability to Acquire Additional Businesses

We plan to gradually continue to expand our operations through the acquisition of, or investment in, additional businesses and companies. We may be unable to identify businesses that complement our strategy for growth. If we do succeed in identifying a company with such a business, we may not be able to proceed to acquire the company, its relevant business or an interest in the company for many reasons, including:

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

Risks Related to Completed Acquisitions

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

Risks Associated with Capital Markets

We currently hold interests in non wholly-owned companies. While we generally do not anticipate selling such interests, if we were to divest all or part of them, we might not receive maximum value for these interests.

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With respect to such entities with publicly traded stock, we may be unable to sell our interest at then quoted market prices. Furthermore, for those entities that do not have publicly traded stock, the realizable value of our interest may ultimately prove to be lower than the carrying value currently reflected in our Consolidated Financial Statements. Due to market conditions, it may be difficult for private companies in which we have invested to undertake public offerings.

Impairment Analysis May Lead to Recognition of Losses

In 2003, we recorded a goodwill impairment charge of $3.9 million. The carrying amount of the remaining goodwill on our balance sheet was $10.5 million as of December 31, 2003. We periodically assess the potential impairment of our long-lived assets, such as goodwill, as appropriate. If, as a result of such an assessment, we were to determine that the carrying amount of this goodwill was not recoverable, we would reduce the carrying amount in the period in which the determination was made. Any reduction would result in the recognition of a one-time impairment loss, which would have an adverse effect on our financial results in the period in which the loss was recognized.

The carrying amount of our investments in unconsolidated affiliates was $2.9 million as of December 31, 2003. If we were to determine that the value of such investments had declines judged to be permanent or other than temporary, we would reduce the carrying amount of the investments. Any reduction would result in the recognition of a one-time impairment loss, which would have an adverse effect on our financial results in the period in which the loss was recognized.

Concentration of Revenues; Risk of Termination

Our revenues are highly dependent on clients primarily located in the United States, as well as clients concentrated in certain industries, and economic slowdowns, changes in U.S. law and other restrictions or factors that affect the economic health of the United States and these industries may affect our business. In the year ended December 31, 2003, approximately 52% of our revenues were derived from the United States. Consequently, if the current economic slowdown in the United States is prolonged, our clients may reduce or postpone their IT spending significantly, which may in turn lower the demand for our services and negatively affect our revenues and profitability. Further, any significant decrease in the growth of the financial services or other industry segments on which we focus may reduce the demand for our services and negatively affect our revenues and profitability.

We have in the past derived, and may in the future derive, a significant portion of our revenues from a relatively limited number of clients. Our five largest clients represented approximately 33%, 27% and 23% of revenues for the years ended December 31, 2003, 2002 and 2001, respectively. In the years ended December 31, 2003, 2002 and 2001, GE accounted for 18%, 16% and 14% of our revenues, respectively. Most of our projects are terminable by the client without penalty. An unanticipated termination of a major project could result in the loss of substantial anticipated revenues and could require us to maintain or terminate a significant number of unassigned IT professionals, resulting in a higher number of unassigned IT professionals and/or significant termination expenses. The loss of any significant client or project could have a material adverse effect on our business, operating results and financial condition.

Rapid Technological Change; Dependence on New Solutions

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

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to address these developments could have a material adverse effect on our business, operating results and financial condition.

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

Dependence on Principals

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

Risk of Preferred Vendor Contracts

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

Risks Associated with Intellectual Property Rights

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

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

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

Fixed-Price Projects

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

Potential Liability to Clients

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

Notice Regarding Consent of Arthur Andersen LLP

Arthur Andersen LLP was formerly our independent auditor. Representatives of Arthur Andersen LLP are not available to consent to the incorporation by reference of their report contained in this Annual Report into our registration statements on Form S-3 and Form S-8, and we have dispensed with the requirement to file their consent in reliance upon Rule 473a of the Securities Act of 1933. Because Arthur Andersen LLP has not consented to the incorporation by reference of their report into these registration statements, purchasers of stock under these registration statements will not be able to recover against Arthur Andersen LLP under Section 11 of the Securities Act of 1933 for any untrue statements of a material fact contained in the financial statements audited by Arthur Andersen LLP that are incorporated by reference into these registration statements or any omissions of material fact required to be stated therein.

ITEM 2.    PROPERTIES

Information regarding the principal properties owned and leased by the Company and its subsidiaries as of December 31, 2003 is set forth below.

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IGS leases approximately 145,000 square feet (including 133,000 square feet listed above) of office space in the Indian cities of Chennai, Bangalore and Pune from the principal shareholders of iGate.

In addition to the properties listed above, the Company and its subsidiaries lease sales offices in many IT services markets in the United States and throughout the world. These locations allow the Company to respond quickly to the needs of its clients and to recruit qualified IT professionals in these markets.

ITEM 3.    LEGAL PROCEEDINGS

The Company is a party to a lawsuit for alleged negligence against a former employee by Convergys Information Management Group, Inc. (“Convergys”) and Chubb Custom Insurance Group. Although Convergys’ Complaint does not specify the amount of damages being sought, Convergys has a settlement demand of approximately $3.3 million. The Company has denied liability and plans to vigorously defend its position. Discovery is underway in this matter and a trial date is scheduled for some time in April 2004. The Company believes that coverage of Convergys’ claims is provided under certain of its insurance policies.

Other than as set forth above, neither the Company nor any of its subsidiaries is a party to any litigation that is expected to have a material adverse effect on the Company, its business or the financial statements.

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

There were no matters submitted to a vote of shareholders during the fourth quarter of 2003.

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PART II

The Common Stock of the Company is traded on the NASDAQ National Market under the ticker symbol “IGTE”. The following table sets forth, for the periods indicated, the range of high and low closing sale prices for iGate Corporation Common Stock as reported on the NASDAQ National Market.

On March 8, 2004, the Company had 203 registered holders of record of the Common Stock.

The Company is prohibited from paying dividends under its credit facility.

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ITEM 6.    SELECTED FINANCIAL DATA

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ITEM 7.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

iGate Corporation, formerly named iGate Capital Corporation, through its operating subsidiaries, is a worldwide provider of IT and Offshore Outsourcing services to large and medium-sized organizations. From inception and through February 2000, we conducted the majority of our business under the name of Mastech Corporation through our wholly-owned subsidiary Mastech Systems Corporation, a Pennsylvania corporation that was formed in July 1986.

In March 2000, we transferred substantially all of the assets of Mastech Systems Corporation to subsidiary operating companies. This reorganization was done to enable us to identify and penetrate emerging IT markets quickly and effectively. In addition, this strategy enabled us to expand our existing portfolio of services as well as to create new service offerings. We also acquired majority interests or made strategic investments in a number of companies in the internal related services market sector.

Our operating subsidiaries provide clients with a source for a broad range of IT applications solutions and Offshore Outsourcing Services including: client/server design and development, conversion/migration services, ERP package implementation and integration services, software development and applications maintenance outsourcing.

Critical Accounting Policies

The following explains our most significant accounting policies. See Note 1 to the Consolidated Financial Statements set forth on pages 44 to 54 of the Form 10-K for a complete description of our significant accounting policies.

Use of Estimates in the Preparation of Financial Statements

The preparation of our financial statements requires us to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. All of the estimates that we make in preparing our financial statements are in conformity with accounting principles generally accepted in the United States of America. Actual results could differ from our estimates, which could impact our earnings.

Revenue Recognition

We recognize revenue on time-and-materials contracts as the services are performed. Time and materials contracts typically bill at an agreed upon hourly rate. Revenue is earned when our consultants are working on projects. Revenue recognition is negatively impacted by holidays and consultant vacation and sick days. We also have fixed price arrangements with certain customers. A price for an entire project is agreed upon before the project starts for a predetermined fee. We recognize revenues on fixed-price contracts using the proportional performance method. We prepare a budget for each fixed price project, and based upon the budget that we prepare, we estimate what our costs should be. We determine performance by comparing the actual cost of work performed to date to the estimated total cost for each contract. We recognize revenue based upon costs incurred by our consultants during the period. If our estimates indicate a loss on a particular fixed-price contract, we record a provision for the estimated loss without regard to the stage of completion. Changes in job performance, conditions and estimated profitability may result in revisions to costs and revenues and are recognized in the period in which the changes are identified. Contracts with deliverables or project milestones recognize revenue as the deliverables or project milestones are achieved. Contracts with deliverables or project milestones can provide for certain penalties if the deliverables or project milestones are not met within contract timelines. Certain maintenance contracts with no stated deliverables, with a designated workforce assigned, recognize revenues on a straight-line basis over the life of the contract, which are typically one year in duration. Revenue on these contracts is ratable and predetermined based upon the negotiated contract.

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Accounts Receivable

We extend credit to clients based upon management’s assessment of their creditworthiness. Substantially all of our revenues (and the resulting accounts receivable) are from Fortune 500 companies, major systems integrators and U.S. governmental agencies.

Unbilled receivables represent amounts recognized as revenues for the periods presented based on services performed in accordance with the terms of client contracts that will be invoiced in subsequent periods.

Allowance for Uncollectible Accounts

We review accounts receivable periodically to determine the probability of loss. The allowance for uncollectible accounts is determined using the combination of the specific identification method for balances deemed uncollectible, as well as judgments made by management based upon historical and expected charge-off experience. If the financial condition of our customers deteriorates or if economic conditions worsen, additional allowances may be necessary, which may impact earnings.

Investments

Investments in money market funds are stated at cost, which approximates fair value. Investments in marketable equity securities are accounted for in accordance with Statements of Financial Accounting Standards No. 115, Accounting for Certain Investments in Debt and Equity Securities (“SFAS 115”). We have determined that certain of our investments in marketable equity securities are classified as available-for-sale and recorded at fair value, utilizing the investments closing price at each reporting period. These investments are recorded on the balance sheet at market value, with the unrealized gains or losses, net of tax, reported as a component of comprehensive loss in the Consolidated Statement of Shareholders’ Equity and Comprehensive Loss. The unrealized gain or loss is the difference between our original cost for an investment and the investment’s fair value at each reporting period. Realized gains or losses on securities sold are calculated using the specific identification method.

If management determines that an investment in available for sale securities has sustained an other-than-temporary decline in its value, the investment is written down to its fair value by a charge to earnings. Such evaluation is dependent on the specific facts and circumstances of the respective investment. Factors that are considered by us in determining whether an other-than-temporary decline in value has occurred include: the market value of the security in relation to its cost basis; the financial condition of the investee; and the intent and ability to retain the investment for a sufficient period of time to allow for recovery in the market value of the investment.

In evaluating these factors, management presumes a decline in value to be other-than-temporary if the market price of the security is 20% or more below the investment’s cost basis for a period of six months or more (the “20% criteria”). However, the presumption of an other-than-temporary decline in these instances may be overcome if there is persuasive evidence indicating that the decline is temporary in nature (e.g., strong operating performance of investee, historical volatility of investee, etc.). Additionally, there may be instances where impairment losses are recognized even if the 20% criteria is not satisfied (e.g., plan to sell the security in the near term and the fair value is below our cost basis). During 2002, we incurred impairment losses deemed to be other-than-temporary. These impairments are discussed in Note 3 to the Consolidated Financial Statements.

We account for investments in businesses in which we own between 20% and 50% of equity or otherwise acquire management influence using the equity method as prescribed by Accounting Principles Board Opinion No. 18, The Equity Method of Accounting for Investments in Common Stock (“APB 18”). Investments in which we acquire less than a 20% interest, or in which we do not acquire management influence are accounted for using the cost method of accounting or, if publicly traded, as available-for-sale securities. For investments accounted for using the cost or equity method of accounting, management evaluates information (e.g., budgets, business

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plans, financial statements, etc.) in addition to quoted market price, if any, in determining whether an other-than-temporary decline in value exists. Factors indicative of an other-than-temporary decline include recurring operating losses, credit defaults and subsequent rounds of financings at an amount below the cost basis of an investment. This list is not all-inclusive and management weighs all quantitative factors in determining if an other-than-temporary decline in value of an investment has occurred.

Goodwill and Intangible Assets

Goodwill is the excess of purchase price over the value of the net assets acquired. Effective January 1, 2002, we adopted Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets (“SFAS 142”). Under SFAS 142, goodwill impairment is deemed to exist if the net book value of a reporting unit exceeds its estimated fair value. Estimated fair values of reporting units underlying the segments were estimated using either a discounted cash flow methodology, recent comparable transactions or a combination thereof. For further discussions, see Note 4 to the Consolidated Financial Statements.

Stock Based Compensation

At December 31, 2003, we had three stock-based employee compensation plans, which are described more fully in Note 10 to the Consolidated Financial Statements. Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation, (“SFAS 123”) gives companies the option to adopt the fair value method for expense recognition of employee stock options or to continue to account for employee stock options using the intrinsic value method, as outlined under Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (“APB 25”). We have elected to continue to apply the intrinsic value method to account for employee stock options and disclose the pro forma effect as if the fair value method had been applied in Note 10 to the Consolidated Financial Statements. The following table illustrates the effect on net loss per share if we had applied the fair value recognition provisions of SFAS 123 to stock-based employee compensation:

2003 Compared to 2002

As we discussed earlier, we began to manage our business with an increased focus on our offshore delivery model. As a result, we recast our operating segments effective January 1, 2003. Our recast segments are iGate Solutions, iGate Professional Services and iGate Corporate. Further, we now classify costs for consultants not being utilized (i.e. “bench costs”) as cost of revenues. In prior years, these costs were classified as selling general and administrative (“S,G&A”) costs. All prior reporting periods have been reclassified to reflect the changes to our segment reporting and our classification of bench costs.

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iGate Solutions

Revenues for our iGate Solutions segment for the year ended December 31, 2003 were $151.1 million, an increase of $2.0 million, or 1.3%, as compared to $149.1 million for the year ended December 31, 2002. Billable expenses for this segment approximated 1.5% and 3.3% as a percentage of revenues for the years ended December 31, 2003 and 2002, respectively. During the year ended December 31, 2003, the acquisition of AquaRegia, Quintant, IdeaSpace and certain businesses of IT&T by IGS contributed $2.8 million of revenue to

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the iGate Solutions segment. Without these 2003 acquisitions, revenues for the iGate Solutions segment would have been slightly lower from the prior fiscal year, which is a result of not being able to grow our non-GE revenues and due to the reorganization of our sales and marketing team. Sales cycles in the offshore outsourcing solutions business may extend to twelve months from the initial sales meeting before a services contract is finalized and a sale is made. Because of this, we cannot accurately forecast what impact our revised marketing approach will have on revenues in the upcoming year.

The gross margins for iGate Solutions were 30.5% for the year ended December 31, 2003, as compared to 33.0% for the year ended December 31, 2002. Our acquisitions had a 0.8% favorable impact on iGate Solutions gross margins for the year ended December 31, 2003. We cannot determine what impact iGate Solutions acquisitions will have on gross margins in future periods. The contributing factors that led to the decline in gross margins were a combination of pricing pressures from customers, higher utilization of subcontracted labor versus salaried consultants, increases in wage and bench costs, project cost overruns and the unfavorable impact of blended rate contracts, which contributed approximately 14% of iGate Solutions revenues. Billing rates for blended rate contracts are determined based upon the anticipated utilization of onsite/near shore services (“services provided primarily in North America”) and offshore services (“services provided primarily in India”) for the particular project. Once established, these rates are fixed for purposes of these contracts.

S,G&A expenses include all costs that are not directly associated with our iGate Solutions segments revenue generating consultants. S,G&A expenses included non-consultant salaries and employee benefits, recruiting and training costs, rent, depreciation and amortization, communications, facilities costs, restructuring costs and goodwill impairment. Also included in S,G&A costs are deferred compensation charges incurred as a result of the acquisition of Quintant and amortization of acquired intangible assets incurred as a result of acquisitions within iGate Solutions. S,G&A costs for iGate Solutions segment for the year ended December 31, 2003 were $48.8 million or 32.3% of revenues, which included $0.5 million of additional restructuring costs. In 2002, iGate Solutions S,G&A costs were $73.6 million or 49.3% of revenues, which included $3.4 million of restructuring costs and $26.0 million of goodwill impairment charges. Our S,G&A costs increased $8.4 million due to our acquisitions of AquaRegia, IT&T, Quintant and IdeaSpace. Deferred compensation expense of $1.5 million and amortization of intangible assets of $0.9 million were incurred as a result of the iGate Solutions acquisitions. Until we begin to grow our revenues, we expect our costs to approximate 30% of revenues during the upcoming year.

Operating loss for the iGate Solutions segment for the year ended December 31, 2003 was $2.7 million or 1.8% as compared to a loss of $24.4 million or 16.4% for the year ended December 31, 2002. The operating loss in 2003 included $6.2 million for the iGate Solutions acquisitions and without these losses, the iGate solutions segment would have had an operating profit.

Operating loss in 2002 was mainly attributable to restructuring costs and write-offs of impaired goodwill associated with prior acquisitions.

iGate Professional Services (“IPS”)

Revenues for our IPS segment for the year ended December 31, 2003 were $135.1 million, a decrease of $7.8 million or 5.5% as compared to $142.9 million for the year ended December 31, 2002. Billable expenses for this segment approximated 0.9% and 0.4% as a percentage of revenues for the years ended December 31, 2003 and 2002, respectively. Factors contributing to the decrease in revenues for IPS were attributable to continued weakness in IT spending specifically in the U.K., decreases in consultant utilization and declines in overall billable consultant headcount. Because of competitive pricing pressures, billing rates for consultants for comparable years have had a negative impact on revenues. We expect pricing pressures and related issues to continue to impact our revenues in 2004.

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The gross margin for our IPS segment, including billable expenses, was 20.7% for the year ended December 31, 2003, as compared to 23.8% for the year ended December 31, 2002. The decrease in gross margin in this segment was attributable to a combination of pricing pressures, increases in employee related costs and benefits, as well as increased usage of subcontractor labor. During the year, we have also expanded an existing relationship as a preferred vendor in Canada, in which we act as a vendor management provider. Our margins on these engagements are minimal, and due to this, our overall IPS gross margins are impacted. We cannot determine what impact these factors will have on 2004 gross margins.

S,G&A costs for the IPS segment for the year ended December 31, 2003 were $22.9 million or 17.0% of revenues, as compared to $26.4 million, or 18.4% of revenues for the year ended December 31, 2002. Factors contributing to the decline in S, G&A costs were attributable to better management of employee headcount and other operating costs. We expect these costs to remain consistent in 2004. We incurred goodwill impairment charges of $3.9 million in 2003 and $3.7 million in 2002, respectively.

Operating income for the year ended December 31, 2003 was $5.1 million or 3.8% of revenues, as compared to operating income of $7.7 million or 5.4% for the year ended December 31, 2002. The operating income in 2002 was attributable to better management of S,G&A costs.

iGate Corporate

iGate Corporate reports the results of ICRI, DiagnoSearch and jobcurry. ICRI and DiagnoSearch were acquired in 2003. jobcurry continues to provide recruiting and placement services for iGate Corporate and outside customers. Revenues for the segment for the year ended December 31, 2003 were $1.7 million, an increase of $1.1 million, or 182.1% from revenues of $0.6 million for the year ended December 31, 2002. The increase in revenues on a comparable basis was due to the acquisitions of ICRI and DiagnoSearch, the deconsolidation of itiliti and the closure of MobileHelix, which both occurred in 2002. ICRI and DiagnoSearch contributed $0.9 million to iGate Corporate revenues for 2003.

Due to our 2003 acquisition of ICRI and DiagnoSearch, gross margins were 42.3% for the year ended December 31, 2003 and 5.3% for the year ended December 31, 2002.

iGate Corporate segment S,G&A expenses for the year ended December 31, 2003 were $11.4 million, which was consistent with S,G&A costs of $11.5 million for the year ended December 31, 2002. S,G&A costs on a comparative basis were consistent from year to year due to our acquired entities offset by the closure and deconsolidations of MobileHelix and itiliti, respectively, as well as declines in corporate headcount and other S,G&A costs in 2002. Restructuring costs incurred were $0.8 million in 2002. Our acquisitions related to Quintant, IT &T, ICRI and DiagnoSearch contributed $1.5 million of additional corporate S,G&A costs.

Other Income (Expense) Components

Other income, net

Other income, net for the year ended December 31, 2003 totaled $2.3 million and consisted of interest income on cash and cash equivalents of $2.7 million, foreign currency translation gains of $0.5 million offset by

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interest accretion of $0.7 million related to a put option and bonus accrual and miscellaneous expense of $0.2 million. Our acquisitions contributed an additional $0.2 million of interest income. Other income, net for the year ended December 31, 2002 consisted of interest income on cash and cash equivalents of $3.0 million, foreign currency translation gains of $1.3 million, offset by interest expense of $1.6 million, interest accretion of $1.0 million related to a put option and bonus accrual and miscellaneous expense of $0.2 million.

Minority interest

Minority interest reflects the share of the net income or loss of our majority-owned operating subsidiaries attributable to the minority owners. Minority interest amounted to expense of $0.3 million and $0.4 million for the years ended December 31, 2003 and 2002, respectively. The minority interest expense in 2003 was the minority share of the net income of IGS offset by the net losses of ICRI, Quintant and DiagnoSearch. The minority interest expense in 2002 consisted of the minority share of the net income of IGS.

Gain on deconsolidation of subsidiary

We recorded a gain on deconsolidation of itiliti of $7.1 million for the year ended December 31, 2002, that is more fully discussed in Note 3 to the Consolidated Financial Statements.

Equity in losses of affiliated companies

In 2003, we recorded a loss of $0.1 million on the investments in Software AG and Ciber.

Loss on venture investments and affiliated companies

In 2003, we recorded an impairment charge on our investment in Air2Web of $0.3 million and recognized a $0.3 million gain on our sale of Red Hat stock. In 2002, we recognized impairment losses of $7.4 million related to our investments in Speechworks and Air2Web. In 2002, we also sold our shares in Versata, Inc. (“Versata”) stock at a loss $ 0.2 million. These losses are included as a component of Loss on Venture Investments and Affiliated Companies in the Consolidated Statement of Operations.

Income Tax

Our income tax provision was $2.5 million on a loss of $6.4 million at a negative effective rate of approximately 39.0% for the year ended December 31, 2003. The significant items comprising our negative effective rate include the additional tax on deemed distributions from IGS as a result of the eJiva transaction. Our income tax benefit for the comparable year in 2002 was $0.1 million at an effective rate of 0.5%. The significant items comprising our effective rate included the write-off of impaired goodwill that is not deductible for tax purposes, non-deductible goodwill amortization and equity losses, which are offset by a tax holiday in India, related to our IGS subsidiary.

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2002 Compared to 2001

The following tables present selected financial information for the Company’s reporting segments for the years ended December 31, 2002 and 2001:

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iGate Solutions

Revenues for our iGate Solutions segment for the year ended December 31, 2002 were $149.1 million, a decrease of $39.5 million, or 20.9%, as compared to $188.6 million for the year ended December 31, 2001. Billable expenses for this segment approximated 3.3% and 4.1% as a percentage of revenues for the years ended December 31, 2002 and 2001, respectively. Factors contributing to the revenue decline included decreases in IT spending, consultant utilization and overall billable headcount. We also experienced delays from clients in closing new projects due to their uncertainty in the economy. We also experienced pricing pressures from our customers.

The gross margin for iGate Solutions, including billable expenses, was 33.0% for the year ended December 31, 2002, as compared to 33.8% for the year ended December 31, 2001. The decrease in gross margin in this segment was attributable to a combination of pricing pressures, increases in employee related costs and benefits and the unfavorable impact of blended rate contracts, which contributed approximately 15% of iGate Solutions revenues.

Selling, general and administrative (“S,G&A”) expenses include all costs that are not directly associated with our iGate Solutions segments revenue generating consultants. S,G&A expenses included non-consultant salaries and employee benefits, recruiting and training costs, rent, depreciation and amortization, communications and facilities costs. S,G&A costs for the iGate Solutions segment for the year ended December 31, 2002 were $73.6 million or 49.3% of revenues. Total S,G&A costs also included restructuring costs of $3.4 million and goodwill impairment charges of $26.0 million, respectively. S,G&A costs for the year ended December 31, 2001 were $71.3 million or 37.8% of revenues. Total S,G&A costs included restructuring costs of $3.6 million and goodwill impairment charges of $10.4 million, respectively.

Operating loss for the iGate Solutions segment for the year ended December 31, 2002 was $24.4 million or 16.4% of revenues, as compared to an operating loss of $7.6 million or 4.0% for the year ended December 31, 2001. The increase in the loss in 2002 was attributable to declines in revenues and gross margins and increases to S,G&A costs, including restructurings and goodwill impairment charges.

iGate Professional Services (“IPS”)

Revenues for our IPS segment for the year ended December 31, 2002 were $142.9 million, a decrease of $88.3 million or 38.2% as compared to $231.2 million for the year ended December 31, 2001. Billable expenses for this segment approximated 0.4% and 0.6% as a percentage of revenues for the years ended December 31, 2002 and 2001, respectively. In December 2001, we closed the operations of Chen & McGinley, Inc. (“CMI”). CMI’s revenues in 2001 were $19.0 million. Other factors contributing to the decline in revenues for the segment were mainly attributable to continued weakness in IT spending, decreases in consultant utilization and overall billable consultant headcount. Because of competitive pricing pressures, billing rates for consultants for comparable years have had a negative impact on revenues.

The gross margin for our IPS segment, including billable expenses, was 23.8% for the year ended December 31, 2002, as compared to 27.8% for the year ended December 31, 2001. The decrease in gross margin in this segment was attributable to a combination of pricing pressures, increases in employee related costs and benefits, as well as increased usage of subcontractor labor.

S,G&A costs for the IPS segment for the year ended December 31, 2002 were $26.4 million or 18.4% of revenues, as compared to $75.9 million, or 32.8% of revenues for the year ended December 31, 2001. Total S,G&A costs included restructuring costs $0.1 million and $6.3 million in 2002 and 2001, respectively. We also incurred goodwill impairment charges of $3.7 million and $26.9 million in 2002 and 2001, respectively. CMI’s operating expenses in 2001 were $27.5 million, which contributed to the overall decline in S,G&A costs. Other factors contributing to the decline in S,G&A costs were attributable to better management of employee headcount and other operating costs.

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Operating income for the year ended December 31, 2002 was $7.7 million or 5.4% of revenues, as compared to an operating loss of $11.8 million or 5.1% for the year ended December 31, 2001. Operating income in 2002 was attributable to better management of S,G&A costs. Operating loss in 2001 was due to restructuring costs and goodwill impairment charges incurred.

iGate Corporate

iGate Corporate’s segment reports operating results of itiliti, MobileHelix and jobcurry. In March 2002, we deconsolidated itiliti, and closed the operations of MobileHelix. jobcurry continues to provide recruiting and placement services for iGate Corporate and outside customers. Revenues for the segment for the year ended December 31, 2002 were $0.6 million, a decrease of $1.0 million, or 63.4% from revenues of $1.6 million for the year ended December 31, 2001, due to declines in revenues of itiliti, MobileHelix and jobcurry.

Gross margins were 5.3% for the year ended December 31, 2002 and a loss of 32.5% for the year ended December 31, 2001, as costs exceeded revenue amounts for MobileHelix and itiliti.

iGate Corporate’s segment SG&A expenses for the year ended December 31, 2002 were $11.5 million, a decline of $18.0 million, or 61.0% from $29.4 million for the year ended December 31, 2001. Restructuring costs incurred were $0.8 million in 2002. This decline in S,G&A costs on a comparative basis was attributable to the closure and deconsolidations of MobileHelix and itiliti, respectively, as well as declines in headcount and other S,G&A costs in 2002.

Other Income (Expense) Components

Other income (expense), net

Other income (expense), net for the year ended December 31, 2002 totaled $1.5 million and consisted of interest income on cash and cash equivalents of $3.0 million and foreign currency translation gains of $1.3 million offset by interest expense of $1.6 million, interest accretion of $1.0 million related to a put option and bonus accrual and miscellaneous expense of $0.2 million. Other income (expense), net for the year ended December 31, 2001 consisted of interest income on cash and cash equivalents of $3.1 million, foreign currency translation losses of $2.0 million, expense associated with the write-down of Speechworks warrants of $1.4 million, interest expense of $3.5 million and miscellaneous income of $0.2 million.

Minority interest

Minority interest reflects the share of the net income or loss of our majority-owned operating subsidiaries attributable to the minority owners. Minority interest amounted to expense of $0.4 million for the year ended December 31, 2002, compared to expense of $1.3 million for the year ended December 31, 2001. The minority interest expense in 2002 was the minority share of the net income of IGS. The minority interest expense in 2001 consisted of the minority share of the net income of IGS and IRG, net of the minority share of the net loss of Symphoni and itiliti.

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Gain on deconsolidation of subsidiary

We recorded a gain on deconsolidation of itiliti of $7.1 million for the year ended December 31, 2002, that is more fully discussed in Note 3 to the Consolidated Financial Statements.