iSoftStone Provides Statements of Cash Flows and Details of Bank Balances Supplementary to its First Quarter 2011 Earnings Release dated May 13, 2011

BEIJING, May 31, 2011 /PRNewswire-Asia/ -- iSoftStone Holdings Limited (NYSE: ISS) ("iSoftStone" or the "company"), a leading China-based IT services provider, today provided additional disclosure information to its quarterly earnings results announced on May 13, 2011, including unaudited statements of cash flows for the quarters ended March 31, 2010 and 2011, and unaudited bank account details as of December 31, 2010 and March 31, 2011 in response to the recent increasing concerns about financial integrity and soundness of corporate governance practices of U.S. listed Chinese companies after one China-based IT service company has been alleged to have committed fraudulent acts.

Mr. Xiaosong (Jonathan) Zhang, iSoftStone's Chief Financial Officer, said, "iSoftStone operates a global business portfolio and business base with 19 sales and delivery centers worldwide of which 13 are located in China. Therefore, we have various bank accounts with local Chinese commercial banks to facilitate our operational activities relating to payments for payroll, reimbursements, purchases, and taxes in each city where we conduct our business. We manage almost all treasury related activities centrally at our headquarters through e-banking systems with these commercial banks. In our daily operation, we have clearly defined authorization procedures for payment approvals with limits for each level of approval and segregation of duties in access to these e-banking systems and check books. Senior management monitors the cash positions through detailed cash reports on the weekly basis, and the e-banking systems allow us to validate the account balances and promptly investigate transaction details of any suspicious activities identified.

"To increase investors' sustained visibility of our quarterly changes in cash, we will provide statements of cash flows in our future quarterly earnings news releases, which we also furnish to the Securities and Exchange Commission on Form 6-K."

Mr. Tianwen Liu, Chairman and CEO of iSoftStone, said, "Long before becoming a public company, we adopted the bulk of our corporate governance practices that are in place today, and we will continue to strive to meet the highest standards in corporate governance in the future. We thoroughly understand the meaning of "creditability" in market and will continue to adhere to the principles of financial integrity and transparency. It is unfortunate that an isolated case of alleged fraud and subsequent bad judgment happened in the IT sector, which has affected all IT companies in the past few weeks. Fraud is possible anywhere, in any industry. At iSoftStone, we are taking the very best actions possible to prevent and defeat fraudulent activities. Despite these near-term concerns, we are continuing on our long-term plan by moving ahead to capitalize on the market opportunities available to us, by focusing on our established strategies to grow our business, and by achieving our short-term and long-term goals."


iSoftStone Holdings Limited
Cash and Cash Equivalents List(Unaudited)
(US Dollars in thousands)
	December 31, 2010(1)		March 31, 2011(2)
Bank Accounts in the United States
Bank of America, Boston, Massachusetts	473		473
Citizens Bank, Waltham, Massachusetts	518		391
JPMorgan Chase Bank, New York	-		465
Wells Fargo, Kirkland, Washington	2,077		1,099
	3,068		2,428
Bank Accounts in China
Agricultural Bank of China, Tianjin	82		14
Agricultural Bank of China, Wuxi	379		515
Bank of East Asia, Tianjin	30		52
Bank of Beijing, Beijing	17		17
Bank of China, Beijing	33		34
Bank of China, Guangzhou	98		62
Bank of Communications, Qingdao	443		79
Bank of Communications, Offshore Account	60,930		47,298
Bank of Communications, Wuxi	72		388
Bank of Dalian, Beijing	8		8
China Construction Bank, Shanghai	3		1
China Guangfa Bank, Wuxi	11,380		11,470
China Merchants Bank, Beijing	8,046		4,179
China Merchants Bank, Changsha	19		51
China Merchants Bank, Chengdu	-		2,006
China Merchants Bank, Dalian	183		69
China Merchants Bank, Guangzhou	605	</td>	311
China Merchants Bank, Hangzhou	833		53
China Merchants Bank, Nanjing	467		572
China Merchants Bank, Shanghai	112		136
China Merchants Bank, Offshore Account	60,307		23,274
China Merchants Bank, Tianjin	7,290		7,070
China Merchants Bank, Wuhan	154		138
China Merchants Bank, Wuxi	6,709		323
China Merchants Bank, Xi'an	43		7,983
China Construction Bank, Beijing	419		-
Huaxia Bank, Beijing	299		6
Huaxia Bank, Guangzhou	888		170
Industrial and Commercial Bank of China, Shanghai	1,643		26
Industrial and Commercial Bank of China, Wuxi	3,000		3,208
Industrial Bank, Chengdu	1,515		-
Shanghai Pudong Development Bank, Shanghai	403		619
Shanghai Pudong Development Bank, Tianjin	2,295		2,289
Shanghai Pudong Development Bank, Wuxi	5,707		776
Shenzhen Development Bank, Beijing	-		41,617
Standard Chartered Bank, Beijing	518		241
Standard Chartered Bank, Offshore Account	517		-
	175,447		155,055
Bank Accounts in Taiwan
The Hong Kong and Shanghai Banking Corporation, Taipei	321		217

Bank Accounts in Hong Kong
The Hong Kong and Shanghai Banking Corporation, Hong Kong	202		1,118

Bank Accounts in Japan
Bank of Fukuoka, Ltd, Fukuoka	35		239
Bank of Tokyo-Mitsubishi UFJ, Ltd, Hiroshima	133		66
Bank of Tokyo-Mitsubishi UFJ, Ltd, Tokyo	1,051		1,259
Mizuho Bank, Ltd, Tokyo	405		290
Nishi-Nippon City Bank, Ltd, Fukuoka	383		556
	2,007		2,410
Bank Accounts in Korea
Shinhan bank, Seoul	13		13

Cash on hand	22		33
Total	181,080		161,274

Notes:
(1). Amounts not held in U.S. dollars have been translated using the relevant exchange rates as of December 31, 2010.
(2). Amounts not held in U.S. dollars have been translated using the relevant exchange rates as of March 31, 2011.

1,465

</table>

Safe harbor statement

This news release contains "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements include our plans to capitalize on market opportunities and our continued focus on existing strategies to grow our business and achieve our targets.

Our forward-looking statements are not historical facts but instead represent only our belief regarding expected results and events, many of which, by their nature, are inherently uncertain and outside of our control. Our actual results and other circumstances may differ, possibly materially, from the anticipated results and events indicated in these forward-looking statements. Risks and uncertainties that could cause our actual results to differ from what we currently anticipate include: our ability to effectively manage our rapid growth; intense competition from China-based and international IT services companies; our ability to attract and retain sufficiently trained professionals to support our operations; and our ability to anticipate and develop new services and enhance existing services to keep pace with rapid changes in technology and in our selected industries. For additional information on these and other important factors that could adversely affect our business, financial condition, results of operations, and prospects, please see "Risk Factors" that begins on page 15 of Form 424(b) that we filed with the U.S. Securities and Exchange Commission on December 14, 2010, which can be found on our website at www.isoftstone.com and at www.sec.gov.

All projections in this release are based on limited information currently available to us, which is subject to change. Although these projections and the factors influencing them will likely change, we undertake no obligation to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise, after the date of this news release, except as required by law. Such information speaks only as of the date of this release.

About iSoftStone Holdings Limited

Founded in 2001, iSoftStone is a leading China-based IT services provider serving both greater China and global clients. iSoftStone provides an integrated suite of IT services and solutions including consulting & solutions, IT services, and business process outsourcing services. The company focuses on industry verticals that include technology, communications, banking, financial services, insurance, energy, transportation, and public sectors.

iSoftStone's American depositary shares began trading on the New York Stock Exchange on December 14, 2010.

For more information, please visit www.isoftstone.com.

iSoftStone Holdings Limited Condensed Consolidated Statements of Cash Flows (Unaudited) (US Dollars in thousands)
	Three-month periods ended March 31,
	2010		2011
Cash flows from operating activities
Net income	788		5,151
Adjustments to reconcile net income to net cash used in operating activities:
Share-based compensation	689		2,550
Depreciation of property and equipment	1,093		1,420
Amortization of intangible assets	364		638
Provision of allowance for doubtful accounts	968		450
Loss on equity method investments	-		92
Loss on disposal of property and equipment	65		60
Changes in fair value for contingent consideration	(314)		58
Changes in fair value of convertible notes derivatives	317		(2,832)
Imputed interest expense in connection with convertible notes	715		654
Changes in operating assets and liabilities:
Accounts receivable	(18,014)		(13,891)
Other assets	(1,620)		(3,331)
Accounts payable	371		(3,965)
Other liabilities	2,599		(4,678)
Net cash used in operating activities	(11,979)		(17,624)
Cash flows from investing activities
Purchase of property and equipment	(2,422)		(1,791)
Deferred and contingent consideration paid for business acquisitions	(161)		(76)
Restricted cash	49		1,823
Net cash used in investing activities	(2,534)		(44)
Cash flows from financing activities
Payment of offering cost in connection with the issuance of ordinary shares	-		(1,360)
Proceeds from exercise of options	-		538
Proceeds from sale of ordinary shares	-		211
Proceeds from short-term borrowings		-
Deferred and contingent consideration paid for business acquisitions	-		(1,855)
Payment of short-term borrowings	(8,789)		-
Net cash used in financing activities	(7,324)		(2,466)
Effect of exchange rate changes	(3)		328
Net decrease in cash and cash equivalents	(21,840)		(19,806)
Cash at beginning of period	55,138		181,080
Cash at end of period	33,298		161,274

iSoftStone Holdings Limited
Mr. Jonathan Zhang
Chief Financial Officer
ir@isoftstone.com

Christensen
Mr. Tom Myers, +86 139 1141 3520
tmyers@christensenir.com

Ms. Kathy Li, +1 480 614 3036
kli@christensenir.com

SOURCE iSoftStone Information Technology (Group) Co., Ltd.

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