Calculus Vct Regulatory News (CLC)

29 Sep 2005 07:02

Clinical Computing PLC29 September 2005 For Release 7:00 am 29 September 2005 CLINICAL COMPUTING PLC 2005 INTERIM RESULTS Clinical Computing Plc ("the Company"), the international developer of clinicalinformation systems for the healthcare market, announces Interim Results for thesix months ended 30 June 2005. The Group trades through three operatingsubsidiaries: Clinical Computing UK, Ltd. in the United Kingdom and Europe,Clinical Computing, Inc. in the United States and Clinical Computing Pty Limitedin Australia. Financial Overview • Turnover of £710,000 (30 June 2004: £728,000) - 72% from the US (2004: 74%) • Administrative expenses higher due to restructuring and current investment in Web technology platform • Loss for the period £737,000 (30 June 2004: £635,000) • Loss per share (basic and diluted): 2.3p (30 June 2004: loss 2.0p) Business Review • Six contracts secured with total value of over £1.10m since March from all three geographic markets (UK, US, Australasia) • Represents most successful order book position since releasing Clinical Vision 4 in 2001 • Company now has 18 customers under contract for Clinical Vision 4 • 11 customers now using renal medicine application, two go-lives set for fourth quarter, five implementations to begin in fourth quarter • Sales pipeline suggests procurement activity is increasing in all three geographic markets • New UK based Directors of Product Development and Product Management • First release of web-based technology nearing completion Outlook Chairman Howard Kitchner, commenting on the Group Outlook, said: "During the second half of the current year, the Company anticipates that itwill begin to bill the six contracts won this year; however, over £500,000 ofrevenue associated with these contracts will not be recognised during thecurrent year. The combination of the recent contract gains, current cash balance, softwaremaintenance contracts and the supporting line of credit provides the Companywith the operating capital to continue to pursue its objectives. The board isalso reviewing a possible move of the Company's stock market listing from theOfficial List to AIM." Contacts:Joe Marlovits, Finance Director, Clinical Computing 020 8747 8744 www.ccl.comPeter Binns, Binns & Co PR Ltd 020 7786 9600 Chairman's Statement Overview In April 2005, the board of directors appointed John Lowry as its CEO.Following a complete review of operations, John produced a restructuring plan tofocus Company resources on commercially exploiting the Clinical Vision 4technology across more sectors of the healthcare market. In appointing John Lowry, the board sought to have a UK based CEO, and underJohn's direction the Company is now concentrating its executive management teamin the UK. The Company has recently recruited Tim Brennan, as the Director ofProduct Development. Tim joins us after working as a Senior Director atBusiness Objects where he oversaw product development across four sites(including two US offices, a European and an Indian operation). Joel Tatham whowas recruited 20 months ago to lead our development team will now be focusedfull time on Product Management. Joel is now responsible for the commercialviability of our Clinical Vision 4 product line, for identifying complementarytechnologies to be incorporated within Clinical Vision 4 and evaluating themarket for new clinical applications of the Clinical Vision architecture. Bothof these product-oriented positions are based in the UK reporting to John Lowry. The sales team has been consolidated under a single Sales Director for allterritories and I am pleased to report that since March, the Company has securedsix orders with a total value in excess of £1,100,000. Since signing ourlargest contract for Clinical Vision 4 in April 2005 (previously announced withour 2004 results statement) we have followed this with further contract gainsfrom all three of our geographic markets (UK, US, and Australasia). Thisrepresents the Company's most successful six months order book position sincereleasing Clinical Vision 4 in 2001. Consistent with these contract wins, oursales pipeline report suggests procurement activity is increasing in all threeof our geographic markets. The Company now has 18 customers under contract for Clinical Vision 4: 11customers are now using the renal medicine application, two implementations arenearing completion and five implementations are set to begin in the fourthquarter. Under the restructuring plan the executive management team is focused onpositioning Clinical Vision 4's reach beyond the renal market where we currentlyderive the majority of our revenue. The Company's UK subsidiary is exploringopportunities for Clinical Vision within the NHS including utilising ClinicalVision 4 as a general clinical information system. Additionally the Company hasmade and continues to make staffing changes to better align the staff skill setsto deliver on this restructuring plan and since the beginning of the yearthrough September has initiated a 25 per cent labour turnover with no increasein headcount. Outlook Better utilising electronic information in medicine continues to receivesignificant interest from political leaders and healthcare administrators in thegeographic markets that we serve. The requirement to automate the healthcareworkflow process, providing seamlessly integrated information to care teams tolower the cost of care is a primary driver in the markets we serve. This needto bring together the administrative and clinical needs of a healthcareorganisation has required us to work more closely with complementary partnerswhen marketing our Clinical Vision 4 product. Through successful partnerships,and by providing integrated solutions with our partners we will augment oursales initiatives. We are nearing completion of our first Web-based technology that is fullycompatible with our current Clinical Vision 4 applications. This technologywill provide us with an opportunity to offer the healthcare market deploymentoptions, such as a hosted service. During the second half of the current year, the Company anticipates that it willbegin to bill the six contracts won this year, however over £500,000 of revenueassociated with these contracts will not be recognised during the current year. As a result of delays in turning our sales opportunities to contracts and thetiming of recognising revenue on recently signed contracts it is likely that theCompany will not meet the current market forecast for 2005. With regard to the working capital position, the Company has positive cashbalances as of the date of this statement consistent with the 30 June 2005balance. Whilst the Company has historically used more cash in the second halfthan the first half, the recent contract wins are expected to reverse thishistorical trend. In addition to the current cash balance and contract backlog,the Company has access to a further £500,000 via an unused line of credit. Thecombination of the recent contract gains, current cash balance, softwaremaintenance contracts and the supporting line of credit provides the Companywith the operating capital to continue to pursue its objectives. The board isalso reviewing a possible move of the Company's stock market listing from theOfficial List to AIM. Trading Results Note: All results are presented under IFRS (with restated comparatives). Revenue for the period was £710,000 and consistent with revenue in the sameperiod in the prior year (2004: £728,000). Gross profit improved to £342,000from £318,000, as a result of adjusting our headcount with respect to staffsupporting our older technologies. Administrative expenses increased from£737,000 to £953,000 as a result of the above noted restructuring plan and thecurrent investment in the Clinical Vision Web technology platform. Loss pershare for the period was 2.3p compared to 2.0p for the same period in the prioryear. Cash Flows Cash used by operations was £491,000 compared to a cash use of £303,000 in thesame period in the prior year. The difference in cash flow between the periodsis the result of the above noted restructuring plan. In addition to the cashbalance at the end of the period of £392,000 the Company has an available unusedline of credit totalling £500,000. Following a review of management'sprojections, the directors have formed a judgement at the time of approving thefinancial statements, that the Company has adequate resources for theforeseeable future. Howard KitchnerChairman28 September 2005 Unaudited consolidated income statementSix months ended 30 June 2005 Six months Six months Year ended ended ended 30 June 2005 30 June 2004 31 December 2004 (restated) (restated) £'000 £'000 £'000Continuing operationsRevenue (Note 2) 710 728 1,758Cost of sales (368) (410) (780) ---------- ---------- ---------- Gross profit 342 318 978 Distribution costs (301) (215) (496)Administrative expensesResearch & development (450) (383) (804)Other (503) (354) (714)Total administrative expenses (953) (737) (1,518) ---------- ---------- ----------Loss from operations (912) (634) (1,036) Investment income (expense) 16 (1) (62) ---------- ---------- ----------Loss before tax (896) (635) (1,098)Tax (Note 5) 159 - 325 ---------- ---------- ---------- Loss for the period (737) (635) (773) ---------- ---------- ----------Basic and diluted loss per share (Note 3) (2.3p) (2.0p) (2.4p) ----------- ---------- ----------- Unaudited consolidated statement of recognised income and expenseSix months ended 30 June 2005 Six months Six months Year ended ended ended 30 June 2005 30 June 2004 31 December 2004 (restated) (restated) £'000 £'000 £'000Exchange differences on translation of foreignoperations (23) 31 119Loss for the period (737) (635) (773) ---------- ---------- ----------Total recognised expense for the period (760) (604) (654) ---------- ---------- ---------- Unaudited consolidated balance sheet30 June 2005 30 June 30 June 31 December 2005 2004 2004 (restated) (restated) £'000 £'000 £'000Non-current assetsProperty, plant and equipment 91 110 99 ---------- ---------- ---------- Current assetsTrade and other receivables 503 228 524Cash and cash equivalents 392 1,445 876 ---------- ---------- ---------- 895 1,673 1,400 ---------- ---------- ----------Total assets 986 1,783 1,499 ---------- ---------- ---------- Current liabilitiesTrade and other payables (919) (953) (712) ---------- ---------- ----------Net current (liabilities) assets (24) 720 688 ---------- ---------- ---------- Net assets 67 830 787 ---------- ---------- ---------- EquityShare capital 1,577 1,577 1,577Share premium account 6,125 6,099 6,099Share option reserve 24 4 10Translation reserve 96 31 119Retained earnings (7,755) (6,881) (7,018) ---------- ---------- ---------- Total equity 67 830 787 ---------- ---------- ---------- Unaudited consolidated cash flow statementSix months ended 30 June 2005 Six months Six months Year ended ended ended 30 June 30 June 31 December 2005 2004 2004 (restated) (restated) £'000 £'000 £'000 Net cash from operating activities (Note 4) (491) (303) (868) Investing activities Interest received 16 27 49Purchases of property, plant and equipment (11) (28) (49) ---------- ---------- ----------Net cash from (used in) investing activities 5 (1) - ---------- ---------- ----------Net decrease in cash and cash equivalents (486) (304) (868) Cash and cash equivalents at beginning of period 876 1,750 1,750Effect of foreign exchange rate changes 2 (1) (6) ---------- ---------- ---------- Cash and cash equivalents at end of period 392 1,445 876 ---------- ---------- ---------- NOTES: 1. Accounting policies Basis of preparation The accounting policies applied in these un-audited interim financial statementsare those that the group expects to apply in its annual financial statements forthe year ended 31 December 2005, which will be prepared in accordance withInternational Financial Reporting Standards (IFRS), and those parts of theCompanies Act 1985 that remain applicable to companies reporting under IFRS. The IFRS standards that will be applicable at 31 December 2005 are not knownwith complete certainty at the time of preparation of these interim financialstatements, and as such the policies herein may be subject to amendment. The interim financial statements have been prepared under the historical costconvention. This interim report does not constitute statutory accounts of the group withinthe meaning of section 240 of the Companies Act 1985. Statutory accounts forthe year ended 31 December 2004, which were prepared under UK generally acceptedaccounting principles (UK GAAP), have been filed with the Registrar ofCompanies. The auditors' report on those accounts was unqualified and did notcontain a statement under section 237 of the Companies Act 1985. Transitional arrangements The group has taken the following optional exemptions contained in IFRS 1'First-time Adoption of International Financial Reporting Standards' inpreparing the group's balance sheet on transition to IFRS at 1 January 2004: • Cumulative translation differences - the cumulative translation differences for all foreign subsidiaries have been set to zero at 1 January 2004 and exchange differences arising prior to this date will not be recycled to the income statement. • The group's policy for share-based payments has been applied to equity instruments that were granted after 7 November 2002 and that had not vested on or before 31 December 2004. Based on the above exemptions there are no transitional adjustments to the 1January 2004 opening balance sheet. A UK GAAP to IFRS reconciliation for thecomparative periods is included in this interim statement in Note 6. Basis of consolidation The consolidated financial statements incorporate the financial statements ofClinical Computing Plc ("the Company") and all of its subsidiary undertakings(together, the Group). Subsidiary undertakings are those entities controlled directly or indirectly bythe Company. Control arises when the Company has the ability to direct thefinancial and operating policies of an entity so as to obtain benefits from itsactivities. On acquisition, the assets and liabilities and contingent liabilities of asubsidiary are measured at their fair values at the date of acquisition. Anyexcess of the cost of the acquisition over the fair values of the identifiablenet assets acquired is recognised as goodwill. Any deficiency of the cost ofacquisition below the fair values of the identifiable net assets acquired (i.e.discount on acquisition) is credited to the profit and loss in the period ofacquisition. The interest of minority shareholders is stated at the minority'sportion of the fair values of the assets and liabilities recognised.Subsequently, any losses applicable to the minority interest in excess of theminority interest are allocated against the interest of the parent. The results of subsidiaries acquired or disposed of during the year are includedin the consolidated income statement from the date of acquisition or up to theeffective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements ofsubsidiaries to bring the accounting policies used into line with those used bythe Group. All intra-group transactions, balances, income and expenses are eliminated onconsolidation. Research and development Expenditure on research activities is recognised as an expense in the period inwhich it is incurred. An internally generated intangible asset arising from the Group's computersoftware development initiative is recognised only if all of the followingconditions are met: • An asset is created that can be identified (such as software) • It is probable that the asset created will generate future economic benefits; and • The development cost of the asset can be measured reliably. Development costs meeting these criteria are capitalised and amortised on astraight-line basis over their useful economic lives once the related softwareproduct is available for use. Other intangible assets Intangible assets purchased separately, such as software licences that do notform an integral part of related hardware, are capitalised at cost and amortisedover their useful economic life. Intangible assets acquired through a businesscombination are initially measured at fair value and amortised over their usefuleconomic lives. Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciationand any accumulated impairment losses. The cost of an item of property, plantand equipment comprises its purchase price and any costs directly attributableto bringing the asset into use. Depreciation is calculated on a straight-line basis to write down the assets totheir estimated residual value over their useful economic lives at the followingrates: • Furniture 15 - 20% • Computer equipment 25 - 33% • Office equipment 25 - 33% • Leasehold improvements are depreciated over the life of the lease Leases Leases are classified as finance leases whenever the terms of the lease transfersubstantially all the risks and rewards of ownership to the lessee. All otherleases are classified as operating leases. Assets held under finance leases are initially recognised as property, plant andequipment at an amount equal to the fair value of the leased assets or, iflower, the present value of minimum lease payments at the inception of thelease, and then depreciated over their useful economic lives. Lease paymentsare apportioned between repayment of capital and interest. The capital elementof future lease payments is included in the balance sheet as a liability.Interest is charged to the income statement so as to achieve a constant rate ofinterest on the remaining balance of the liability. Rentals payable under operating leases are charged to the income statement on astraight-line basis over the lease term. Operating lease incentives arerecognised as a reduction in the rental expense over the lease term. Investments in subsidiaries Investments in subsidiaries in the company's balance sheet are held at cost lessany accumulated impairment losses. Impairment of tangible and intangible assets excluding goodwill At each balance sheet date, the Group reviews the carrying amounts of itstangible and intangible assets to determine whether there is any indication thatthose assets have suffered an impairment loss. If any such indication exists,the recoverable amount of the asset is estimated in order to determine theextent of the impairment loss (if any). Where the asset does not generate cashflows that are independent from other assets, the Group estimates therecoverable amount of the cash-generating unit to which the asset belongs. Financial instruments The following policies for financial instruments have been applied in thepreparation of the Group's interim financial statements. Financial assets andfinancial liabilities are recognised on the Group's balance sheet when the Groupbecomes a party to the contractual provisions of the instrument. Cash and cash equivalents For the purpose of preparation of the cash flow statement, cash and cashequivalents includes cash at bank and in hand, and short-term deposits with anoriginal maturity period of three months or less. Trade and other receivables Trade and other receivables are stated at their nominal value as reduced byappropriate allowances for estimated irrecoverable amounts. Trade payables Trade payables are not interest bearing and are stated at their nominal value. Equity instruments Equity instruments issued by the Company are recorded at the proceeds received,net of direct issue costs. Taxation The tax expense represents the sum of the tax currently payable and deferredtax. The tax currently payable is based on taxable profit for the year.Taxable profit differs from net profit as reported in the income statementbecause it excludes items of income or expense that are taxable or deductible inother years and it further excludes items that are never taxable or deductible.The Group's liability for current tax is calculated using tax rates that havebeen enacted or substantially enacted by the balance sheet date. Deferred tax is the tax expected to be payable or recoverable on differencesbetween the carrying amounts of assets and liabilities for financial statementsand the corresponding tax bases used in the computation of taxable profit, andis accounted for using the balance sheet liability method. Deferred taxliabilities are generally recognised for all taxable temporary differences anddeferred tax assets are recognised to the extent that it is probable that futuretaxable profits will be available against which deductible temporary differencescan be utilised. The carrying amount of deferred tax assets is reviewed at each balance sheetdate and reduced to the extent that it is no longer probable that sufficienttaxable profits will be available to allow all or part of the assets to berecovered. Deferred tax is calculated at the tax rates that are expected to apply in theperiod when the liability is settled or the asset is realised. Deferred tax ischarged or credited in the income statement, except when it relates to itemscharged or credited directly to equity, in which case the deferred tax is alsodealt with in equity. Foreign currencies Items included in the separate financial statements of Group entities aremeasured in the functional currency of each entity. Transactions denominated inforeign currencies are translated into the functional currency of the entity atthe rates prevailing at the dates of the individual transactions. Foreigncurrency monetary assets and liabilities are translated at the rates prevailingat the balance sheet date. Exchange gains and losses arising are charged orcredited to the income statement within net operating costs. The income statement and balance sheet of foreign entities are translated intopounds sterling on consolidation at the average rates for the period and therates prevailing at the balance sheet date respectively. Exchange gains andlosses arising on the translation of the group's net investment in foreignentities, are recognised as a separate component of shareholders' equity. Ondisposal of a foreign entity, the cumulative translation differences arerecycled to the income statement and recognised as part of the gain or loss ondisposal. The most important foreign currency for the Group is the US dollar. Therelevant exchange rates for the US dollar to sterling were: 30 June 2005 30 June 2005 30 June 2004 30 June 2004 31 December 2004 31 December 2004 average closing average closing average closing 1.8702 1.8048 1.8213 1.8074 1.8341 1.9266 Revenue and profit recognition Revenue represents the fair value of consideration received or receivable fromclients for goods and services provided by the group, net of discounts, VAT andother sales-related taxes. Where the time value of money is material, revenueis recognised as the present value of the cash inflows expected to be receivedfrom the customer in settlement. Revenue from the sale of software products with no significant serviceobligation is recognised on delivery. Revenue from the sale of softwareproducts requiring significant modification, integration or customisation isrecognised using the percentage of completion method. Revenue is only fullyrecognised when no significant obligations remain and collection is probable. The revenue and profit of contracts for the supply of professional services atpredetermined rates is recognised as and when the work is performed,irrespective of the duration of the contract. Revenue from software maintenance agreements is apportioned over the period towhich the agreement relates. Any amounts invoiced in advance of being recognised as revenue are included inthe balance sheet as deferred income. Retirement benefit costs The Group operates only defined contribution retirement plans. The cost ofdefined contribution plans is charged to the income statement as they fall due. Share-based payments The Group has applied the requirements of IFRS 2 Share-based Payments. Inaccordance with the transitional provisions, IFRS 2 has been applied to allgrants of equity instruments after 7 November 2002 that were unvested as of 1January 2005. The Group issues equity-settled share-based payments to certain employees.Equity-settled share-based payments are measured at fair value at the date ofgrant. Fair value is measured by use of the Black-Scholes model. The expectedlife used in the model has been adjusted, based on management's best estimate,for the effects of non-transferability, exercise restrictions, and behaviouralconsiderations. The fair value determined at the grant date of theequity-settled, share-based payments are expensed on a straight-line basis overthe vesting period, based on the Group's estimate of shares that will eventuallyvest. The assumptions underlying the number of awards expected to vest aresubsequently adjusted to reflect conditions prevailing at the balance sheetdate. At the vesting date of an award, the cumulative expense is adjusted totake account of the awards that actually vest. 2. Segmental analysis Six months Six months Year ended ended ended 30 June 30 June 31 December 2005 2004 2004 £'000 £'000 £'000 Turnover by source UK 167 149 310 USA 510 541 1,376 Other 33 38 72 --------- --------- --------- 710 728 1,758 --------- --------- --------- Turnover by destination is not materially different from that by source. Six months Six months Year ended ended ended 30 June 30 June 31 December 2005 2004 2004 £'000 £'000 £'000 Turnover by business type Software licences 79 118 526 Services 76 59 122 Maintenance 540 535 1,082 Other 15 16 28 ---------- ---------- ---------- 710 728 1,758 ---------- ----------- ---------- 3. Loss per share Basic loss per share has been calculated on the basis of the weighted averagenumber of shares in issue during the period. In each of the three periodspresented the average number of shares in issue was 31,535,361. The loss for the period and the weighted average number of share for thepurpose of calculating the diluted earnings per share are the same as for thebasic loss per share calculation. 4. Reconciliation of operating loss to operating cash flows Six months Six months Year ended ended ended 30 June 30 June 31 December 2005 2004 2004 (restated) (restated) £'000 £'000 £'000 Loss from operations (912) (634) (1,036)Depreciation 23 29 55Decrease (increase) in debtors 41 96 (52)Increase (decrease) in creditors 181 202 (8)Share option charge 14 4 10Research and development tax credit 162 - 163 --------- -------- -------Net cash from operating activities (491) (303) (868) ---------- ---------- ---------- 5. Tax The tax credit of £159,000 for the six-month period ended 30 June 2005 relatesto a research and development claim for 2004. The tax credit of £325,000 forthe year ended 31 December 2004 relates to a research and development claimsfrom 2002 and 2003. 6. Reconciliation of UK GAAP to IFRS Six months ended 30 June 2004 income statement IFRS UK GAAP adjustments IFRS £'000 £'000 £'000 Revenue 728 - 728 Cost of sales (410) - (410) --------- -------- -------Gross profit 318 - 318 Distribution costs (215) - (215)Administrative expensesResearch & development (383) - (383)Other (A) (350) (4) (354)Total administrative expenses (733) (4) (737) --------- -------- -------Loss from operations (630) (4) (634) Investment expense (1) - (1) --------- -------- -------Loss before tax (631) (4) (635)Tax - - - --------- -------- -------Loss for the period (631) (4) (635) --------- -------- -------Basic and diluted loss per share (2.0p) 0.0p (2.0p) --------- -------- ------- 30 June 2004 balance sheet IFRS adjustments UK GAAP IFRS £'000 £'000 £'000 EquityShare capital 1,577 - 1,577Share premium account 6,099 - 6,099Share option reserve (A) - 4 4Translation reserves (B) - 31 31Retained earnings (A)(B) (6,846) (35) (6,881) ---------- ---------- ---------Total equity 830 - 830 ---------- ---------- --------- Year ended 31 December 2004 income statement IFRS adjustments UK GAAP IFRS £'000 £'000 £'000 Revenue 1,758 - 1,758Cost of sales (780) - (780) --------- -------- -------Gross profit 978 - 978 Distribution costs (496) - (496)Administrative expensesResearch & development (804) - (804)Other (A) (704) (10) (714)Total administrative expenses (1508) (10) (1,518) --------- -------- -------Loss from operations (1,026) (10) (1,036) Investment expense (62) - (62) --------- -------- -------Loss before tax (1,088) (10) (1,098)Tax 325 - 325 --------- -------- -------Loss for the period (763) (10) (773) --------- -------- -------Basic and diluted loss per share (2.4p) 0.0p (2.4p) --------- -------- ------- 31 December 2004 analysis of impact on balance sheet IFRS adjustments UK GAAP IFRS £'000 £'000 £'000EquityShare capital 1,577 - 1,577Share premium account 6,099 - 6,099Share option reserve (A) - 10 10Translation reserves (B) - 119 119Retained earnings (A)(B) (6,889) (129) (7,018) ---------- ---------- ----------Total equity 787 - 787 ---------- ---------- ---------- (A)Share-based payments The group operates two share option schemes - the Approved and UnapprovedExecutive Share Option Schemes ('the Schemes'). Under UK GAAP, a charge was recorded only when an award had intrinsic value onthe date of grant. Historically, share options have only been issued with anexercise price equal to the prevailing market price on the grant date thereforea charge was not recorded under UK GAAP. IFRS 2 'Share-based Payment' requiresthat an expense is recognised in the income statement based on the fair value ofan award on the date of grant. The expense is then spread over the optionvesting period. The fair value of share options is measured using anoption-pricing model. The Black-Scholes model has been used to determine thefair value of options granted under the Schemes. The impact of adopting IFRS was to increase the share-based payments expense inthe income statement. This is principally because an expense is now recognisedfor share options issued under the Schemes where none was recognised under UKGAAP. The charge under IFRS2 reflected in these statements are as follows:£4,000 for the half year ended 30 June 2004, £10,000 for the year ended 31December 2004 and £14,000 for the half year ended 30 June 2005 with a totalimpact on equity section of the balance sheet of £24,000 at 30 June 2005. (B)Translation reserves The translation reserve results from exchange gains and losses arising on thetranslation of the Group's net investment in its US and Australian operatingsubsidiaries. The foreign exchange impact of translating foreign operationssince 1 January 2004 is as follows: £31,000 for the six-month period ended 30June 2004 and £119,000 for the year ended 31 December 2004. INDEPENDENT REVIEW REPORT TO CLINICAL COMPUTING PLC Introduction We have been instructed by the company to review the financial information forthe six months ended 30 June 2005, which comprises the consolidated incomestatement, the consolidated balance sheet, the consolidated statement ofrecognised income and expense, the consolidated cash flow statement and therelated notes. We have read the other information contained in the interimreport and considered whether it contains any apparent misstatements or materialinconsistencies with the financial information. This report, including the conclusion, has been prepared for and only for thecompany for the purpose of the Listing Rules of the Financial Services Authorityand for no other purpose. We do not, therefore in producing this report, acceptor assume responsibility for any other purpose or to any other person to whomthis report is shown or into whose hands it may come save where expressly agreedby our prior consent in writing. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by, the directors. The directorsare responsible for preparing the interim report in accordance with the ListingRules of the Financial Services Authority. As disclosed in note 1, the next annual financial statements of the group willbe prepared in accordance with those IFRSs adopted for use by the EuropeanUnion. The accounting policies are consistent with those that the directorsintend to use in the next annual financial statements. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4issued by the Auditing Practices Board for use in the United Kingdom. A reviewconsists principally of making enquiries of group management and applyinganalytical procedures to the financial information and underlying financial dataand based thereon, assessing whether the accounting policies have been applied.A review excludes audit procedures such as tests of controls and verification ofassets, liabilities and transactions. It is substantially less in scope than anaudit and therefore provides a lower level of assurance. Accordingly, we do notexpress an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 30 June 2005. Baker TillyChartered Accountants Registered AuditorsLondon 28 September 2005 This information is provided by RNS The company news service from the London Stock Exchange