Q2 and Half Year Results -11-


+-------------------------------------------+----------+---------+-+---------+ 
| Net income per share attributable to      |        $ |         |$ |    0.00 | 
| CBaySystems Holdings Limited (Diluted)    |          |   0.00  | |         | 
+-------------------------------------------+----------+---------+-+---------+ 
|                                           |          |                     | 
+-------------------------------------------+----------+---------------------+ 
|                                           |          |                     | 
+-------------------------------------------+----------+---------------------+ 
|                                           |          |    Pro Forma six    | 
|                                           |          |    months ended     | 
|                                           |          |      June 30,       | 
+-------------------------------------------+----------+---------------------+ 
|                                           |          |    2010 | |    2009 | 
+-------------------------------------------+----------+---------+-+---------+ 
| Net revenues                              |        $ | 243,963 |$ | 270,381 | 
+-------------------------------------------+----------+---------+-+---------+ 
| Net income (loss) attributable to         |          |   4,033 | |   (646) | 
| CBaySystems Holdings Limited              |          |         | |         | 
+-------------------------------------------+----------+---------+-+---------+ 
| Net income (loss) per share attributable  |          |    0.02 | |  (0.01) | 
| to CBaySystems Holdings Limited (Basic)   |          |         | |         | 
+-------------------------------------------+----------+---------+-+---------+ 
| Net income (loss) per share attributable  |        $ |    0.02 |$ |  (0.01) | 
| to CBaySystems Holdings Limited (Diluted) |          |         | |         | 
+-------------------------------------------+----------+---------+-+---------+ 
 
These amounts have been calculated after applying the Companys' accounting 
policies and adjusting the results of Spheris and SIPL to reflect the additional 
amortization of intangibles that would have been charged assuming the fair value 
adjustments to tangible and intangible assets had been applied from the 
beginning of the period being reported on, and the additional interest expense 
assuming the acquisition related debt had been incurred at the beginning of the 
period being reported on, excluding the acquisition costs and bankruptcy costs 
incurred by Spheris prior to the acquisition and including the related tax 
effects. 
 
In the fourth quarter of 2009 and the first six months of 2010, the Company 
incurred $1.2 million and $6.0 million, respectively, of acquisition and 
integration related charges. These expenses are recorded in the line item 
Acquisition and integration related charges on the Company's consolidated 
statements of operations. 
The net income (loss) for the purpose of the basic loss per share is adjusted 
for the amounts payable to the Company's majority shareholder. 
 
The following table summarizes the consideration transferred by the Company to 
acquire the assets of Spheris and stock of SIPL, and the amounts of identified 
assets acquired and liabilities assumed at the acquisition date. 
 
+----------------------------------------------------+-+---------------------+ 
| Cash consideration paid                            | $|              98,834 | 
+----------------------------------------------------+-+---------------------+ 
| Fair value of unsecured Subordinated Promissory    | |              13,570 | 
| Note                                               | |                     | 
+----------------------------------------------------+-+---------------------+ 
| Total consideration transferred                    | $|             112,404 | 
+----------------------------------------------------+-+---------------------+ 
|                                                    | |                     | 
+----------------------------------------------------+-+---------------------+ 
| Recognized amounts of identifiable assets acquired | |                     | 
| and liabilities assumed:                           | |                     | 
+----------------------------------------------------+-+---------------------+ 
| Fair value of Spheris net assets acquired          | |                     | 
+----------------------------------------------------+-+---------------------+ 
| Cash                                               | $|                797  | 
+----------------------------------------------------+-+---------------------+ 
| Trade receivables                                  | |             22,407  | 
+----------------------------------------------------+-+---------------------+ 
| Other current assets                               | |              4,142  | 
+----------------------------------------------------+-+---------------------+ 
| Property, plant and equipment                      | |              9,133  | 
+----------------------------------------------------+-+---------------------+ 
| Deposits                                           | |              1,036  | 
+----------------------------------------------------+-+---------------------+ 
| Developed technology (included in intangibles)     | |             11,390  | 
+----------------------------------------------------+-+---------------------+ 
| Customer relationships (included in intangibles)   | |             37,210  | 
+----------------------------------------------------+-+---------------------+ 
| Trademarks and trade name (included in             | |              1,640  | 
| intangibles)                                       | |                     | 
+----------------------------------------------------+-+---------------------+ 
| Goodwill                                           | |             45,344  | 
+----------------------------------------------------+-+---------------------+ 
| Trade and other payables                           | |            (20,695) | 
+----------------------------------------------------+-+---------------------+ 
|                                                    | |                     | 
+----------------------------------------------------+-+---------------------+ 
| Identifiable assets acquired and liabilities       | $|            112,404  | 
| assumed                                            | |                     | 
+----------------------------------------------------+-+---------------------+ 
 
The total amount assigned to identified intangible assets and the related 
amortization period is shown below: 
 
+----------------------------------------+----------+--------------------+----------+--------------+ 
|                                        |          |               Fair |          | Amortization | 
|                                        |          |              Value |          |       period | 
+----------------------------------------+----------+--------------------+----------+--------------+ 
| Developed technology                   |        $ |            11,390  |          |      9 years | 
+----------------------------------------+----------+--------------------+----------+--------------+ 
| Customer relationships                 |          |            37,210  |          |        7 - 9 | 
|                                        |          |                    |          |        years | 
+----------------------------------------+----------+--------------------+----------+--------------+ 
| Trademarks and tradenames              |          |             1,640  |          |      4 years | 
+----------------------------------------+----------+--------------------+----------+--------------+ 
| Goodwill                               |        $ |             45,344 |          |   Indefinite | 
+----------------------------------------+----------+--------------------+----------+--------------+ 
 
The amounts and lives of the identified intangibles other than goodwill were 
valued at fair value by an independent valuation firm.  The analysis included a 
combination of the cost approach, and an income approach.  The valuation used 
discount rates from 15% to 17%. 
 
The goodwill is attributable to the workforce of the acquired business and the 
significant synergies expected to arise after the Company's acquisition of 
Spheris.  The goodwill and intangible assets are deductible for tax purposes. 
 
As outlined in the Purchase Agreement, the resolution of defined uncertain tax 
positions for tax years ended 2004 and 2005 may result in an obligation to the 
Sellers.  Based upon the Company's current estimates, it has recognized a 
liability to the Sellers in an amount of $0.9 million. 
 
Under ASC Topic 820, Fair Value Measurements and Disclosures, "fair value" is 
defined as the price that would be received to sell an asset or paid to transfer 
a liability in an orderly transaction between market participants at the 
measurement date. ASC 820 specifies a hierarchy of valuation techniques based on 
the nature of the inputs used to develop the fair value measures. This is an 
exit price concept for the valuation of the asset or liability. In addition, 
market participants are assumed to be unrelated buyers and sellers in the 
principal or the most advantageous market for the asset or liability. Fair value 
measurements for an asset assume the highest and best use by these market 
participants. Many of these fair value measurements can be highly subjective and 
it is also possible that other professionals, applying reasonable judgment to 
the same facts and circumstances, could develop and support a range of 
alternative estimated amounts. 
 
Total acquisition related transaction costs incurred by the Company are expensed 
in the periods in which the costs are incurred. Under ASC Topic 805, 
acquisition-related transaction costs (such as advisory, legal, valuation and 
other professional fees) are not included as components of consideration
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