CBAY SYSTEMS, LTD. CLOSES $2.5 MILLION CONVERTIBLE DEBENTURE
Annapolis, MD and Mumbai, April 14, 2003.

            CBay Systems, Ltd. (“CBay”), a leading healthcare Business Process Outsourcing firm, and the leader in offshore outsourcing in the United States Medical Transcription Industry, announced today that it has closed a $2.5 million convertible debenture with GMO Emerging Markets Fund.   

            “This provides CBay with the working capital necessary to complete its 2003 growth target of US$25 million,” explained V. Raman Kumar, Chairman.  “CBay continues to grow organically and has chalked out an aggressive plan to acquire companies in the transcription, coding and billing business. We are fortunate to have successful investors willing to back us in this endeavor, which include Strategic Ventures Fund (Mauritius) Limited (“SVFML”) , which provided invaluable advice and assistance in closing this transaction,” Mr. Kumar added.  

            Grantham, Mayo, Van Otterloo & Co (GMO) is a privately held global investment management firm servicing clients in the corporate, public, endowment and foundation marketplace.  GMO currently manages more than $25 billion in client assets using both traditional and quantitative investment techniques.  GMO's Emerging Markets Strategy strives to outperform the IFC Investable Index by 4% per annum over a 5-year period, with controlled risk.  The GMO Emerging Markets Strategy is a structured value portfolio, which uses fundamental investment principles and quantitative approaches to provide a broad emerging market equity exposure.  This strategy has a value bias relative to other emerging markets strategies. 

            Strategic Ventures Fund (Mauritius) Limited, is a Venture Capital/ Private Equity fund managed by New Jersey based Frontline Strategy LLC, that invests in opportunities across the US-India corridor in sunrise industries/sectors such as IT, BPO, Media, Telecom & Life sciences. SVFML's investment strategy has been to invest in propositions that display very high scalability in their business model and lay emphasis on generating solid cash flows. 

            “We have successfully integrated the operations of Advanced Transcription Services with our offshore transcription network” said Skip Conover, President of CBay. CBay had acquired the business and assets of Advanced Transcription Services, Inc. (“ATS”) of Taylor, Michigan in September 2002. “Launched in 2002, A+ Network, the next generation dictation, transcription and document management solution, has also been successfully implemented in over 10 hospitals and clinics,” he added.

            Most of CBay's transcription work continues to be undertaken by its large franchised production base in India employing over 2500 qualified medical language specialists, trained and certified by CBay Systems (India) Private Ltd. “Over the last six months, the scale of operations of our franchised centers in India has risen substantially”, said Mr. Kumar. “In line with the rapid growth of business in the US,” Mr. Kumar added “CBay plans to convert a few of the franchised centers into mega production centers each employing 500 people.” 

            “We are very proud to have attracted such high quality investors as GMO Emerging Markets Fund, Godrej Industries, SVFML, TDA Capital Partners, in addition to a significant number of major players in the US-India market space,” Mr. Kumar said, in concluding his remarks.