Caretech Holdings PLC (CTH) 2015年年度報告「AIM」.pdf

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1、Extraordinary days every dayAnnual Report and Accounts 2015PurposeDelivering innovative social care on behalf of local authority and health service commissioners,CareTech has a long-established reputation as a provider of high quality and safe services.CareTech offers a comprehensive outsourcing ser

2、vice to commissioners with the experience and commitment to provide exactly what is required.Focusing on the high acuity social care population we support children and adults through solutions that are both individual and tailor made to each of our service users.Our core services provide for people

3、with learning disabilities,individuals who have or are recovering from mental illness,people with autistic spectrum disorder and people who have one or more physical impairments.We deliver support through residential services and a wide choice of creative home-based options.Our children services cov

4、er assessment,residential care,education and fostering options,including specialist provision for Strategic Review 1 Highlights 2 Group at a glance 10 Chairmans Statement 12 Strategic Report 20 Chief Executives Statement&Performance Review 26 Financial ReviewGovernance 30 Board of Directors32 Corpor

5、ate Governance Report 35 Directors Report 37 Remuneration Report 39 Statement of Directors ResponsibilitiesFinancial Statements 40 Independent Auditors Report 41 Consolidated Statement of Comprehensive Income 42 Consolidated Balance Sheet 43 Consolidated Statement of Changes in Equity 44 Consolidate

6、d Cash Flow Statement45 Notes to the Financial Statements 66 Company Statement of Changes in Equity 67 Company Balance Sheet 68 Company Cash Flow Statement 69 Company Notes 73 Directors and AdvisersHigh quality support and care for individuals who often have complex needs.CareTech delivers safe and

7、secure support of very high quality,ensuring that all our service users enjoy extraordinary days,every day.Contentsvery complex young people.We carefully and professionally support any child irrespective of their reasons for being in public care.We can provide the right solution for complex and diff

8、icult situations through our nationally recognised expertise in provision for children and young people who present with sexually offending behaviours or who have emotional and behavioural disorders.Our comprehensive service includes education in Ofsted registered schools of very high quality.CareTe

9、ch pioneered transition services for young people leaving care and for adults who are making the move into their own home after a lifetime in residential or institutional settings.We remain a national leader in the drive to enable people to live in a home of their own.We believe in opportunity and h

10、ave developed an enviable reputation as a leading provider and organiser of modern apprenticeships within exciting projects across the UK.124.3mRevenue increased by 0.8%(2014:123.3m)Statutory financial highlights32.5mUnderlying EBITDA(i)increased by 5.9%(2014:30.7m)26.8mEBITDA(iii)decreased by 5.3%(

11、2014:28.3m)13.80pDiluted earnings per share decreased by 42%(2014:23.85p)22.0mUnderlying profit before tax(ii)increased by 11.7%(2014:19.7m)17.8mOperating profit decreased by 13.2%(2014:20.5m)31.79pUnderlying diluted earnings per share(ii)increased by 2.5%(2014:31.01p)30.8mCash inflows from operatin

12、g activities before adjustment items(2014:30.3m)with net debt of 158.5m(2014:166.1m)2,116Overall care capacity(iv)increased by 42(2014:2,074)294mProperty portfolio independently valued(2014:275m)5.60pFinal dividend per share increased by 3.7%(2014:5.40p)28.3mCash inflows from operating activities(20

13、14:26.1m)Highlights(i)Underlying EBITDA is operating profit stated before depreciation,share-based payments charge and non underlying items(ii)Underlying profit before tax and underlying diluted earnings per share are stated before non underlying items.(iii)EBITDA is operating profit stated before d

14、epreciation,share-based payments charge and amortisation of intangible assets.(iv)Overall capacity has increased by 42 reflecting the net of 45 additional beds now available and 48 beds with the acquisition of Spark of Genius,less 27 beds withdrawn for reconfiguration,five places less in small suppo

15、rted living packages and 19 reduction for carers not currently accepting children.Strategic ReviewGovernanceFinancial Statements1 CareTech Holdings PLC Annual Report and Accounts 2015The CareTech Group has evolved through a mix of organic and prudent acquisitive growth that has led to our current po

16、sition as one of the best-established and reputable national social care providers.We have national coverage in a highly fragmented UK social care market.We cover the majority of the social care spectrum except elderly care.CareTech has always operated at the highest acuity range on the social care

17、spectrum,providing individual tailor made solutions for people living in their own homes,residential care or independent supported living schemes.We believe that we should continue supporting those with the greatest need and this accords with local authority commissioning trends.Adults with learning

18、 disabilities are increasingly being provided with direct funding to enable them to purchase their own care and support.We work actively with service users and advisory bodies to deliver self-directed support packages and see this as an increasingly important aspect of our service model,as well as o

19、ffering commercial opportunity.For many people with the most complex intellectual or physical challenges,residential care will continue to be the preferred option although the services will change in their approach as we move toward a more enabling,modern type of service.An alternative to residentia

20、l care is the opportunity for people to live in a home of their own,sometimes shared with others.CareTech is a leader in the provision of supported living and offers packages of individualised self-directed support to people in their own homes.“Foster Care is on a rising trend in terms of both numbe

21、rs placed in foster care and expenditure by local authorities.”Laing and Buisson 2013.Foster Care is undoubtedly the best care solution for most“looked after”children.Most children thrive in foster care where they are supported within an ordinary family home and with trained foster carers.CareTech p

22、rovides for both mainstream and specialist foster care through local agencies across the UK.Unusually we offer a highly respected service for physically and intellectually disabled children as well as support for children with sensory impairments.We provide foster care family assessments and ongoing

23、 support to children who remain with their birth families and in their family home.Mental health provision continues to dominate the health and social care agenda.Good mental health is a significant contributor to a healthy community and national economy,while mental ill health is devastating to ind

24、ividuals and their families.Most commissioners are driven by a wish to reduce patient time in acute care and rely on creative outsourcing to dramatically cut the cost of mental health care in hospital and within the criminal justice system.CareTechs mental health team works in partnership with the N

25、HS and social service departments to ensure a successful transition out of acute care and the prison service,delivering pathways to an ordinary life.We also have an outstanding track record for diverting people away from acute care and supporting them in their own homes.CareTechs highly effective ca

26、re teams are developing new ways to offer community support solutions and we believe that this will be an important growth platform in years to come.The total market value is estimated(Laing and Buisson 2013)to be worth 7bn for children services and 8bn for the care of younger adults(below 65 years

27、of age)in the learning disability and mental health categories.The private sector share of this market has developed through successful outsourcing of services and this trend is expected to continue.Local Authorities have largely protected their budgets for children and complex younger adults.Adult

28、Learning DisabilitiesMentalHealthFosterCareCapacity1,496(2014:1,450)Split by Residential care Independent supported living Community support servicesCapacity114(2014:151)Split by Residential care Independent supported living Community outreachCapacity301(2014:320)Split by Residential care of childre

29、n and young people Family assessments in the homeAdult ServicesChildren ServicesCaring every day2 CareTech Holdings PLC Annual Report and Accounts 2015Group at a glanceFor a relatively small number of children,residential care offers a safe and helpful solution for their care needs and CareTech has

30、developed an extensive range of highly technical care environments where those children will thrive.Our residential provision offers high staff ratios and highly skilled carers,capable of ensuring both safety and progression.These are high cost services where we aim for an intensive period of care a

31、nd a strict timetable that delivers results at a fair price to commissioners.As far as practicable we aim to help these children move into a more normalised family style environment as soon as it is wise to do so.These services are highly intensive operations with exceptional staff ratios and includ

32、e on-site or dedicated educational facilities.Since modern apprenticeships started several years ago we have witnessed a dramatic shift in the way young people enter the adult workforce.People are increasingly opting for an apprenticeship as an alternative to or as well as attending University.This

33、was especially true of the Care Sector but a whole new generation of young people are now looking at the apprenticeship model as their further training of choice.Through acquisition and the development of established apprenticeship providers CareTech has embraced the opportunity to capitalise on thi

34、s change and to work closely with Government agencies to improve the quality and skill base of our national workforce.We have chosen to call our apprenticeship scheme a Learning Service to reflect the aspiration of the young people we work with.Although EQL Solutions provide training across the whol

35、e workforce we have naturally developed expertise within the very extensive social care sector.Learning services addresses an adult social care workforce in England of some 1.16m people,905,000 of whom work within the independent sector(Skills for Care 2013).There are 17,300 organisations providing

36、Adult Social Care in England and the majority of these are operating at far too low a scale to deliver their own training or apprenticeship programmes.EQL Solutions and Dawn Hodge Associates,which was acquired in the year,have significant market presence in social care and are well positioned to sup

37、port both smaller companies as well as corporate providers.The Government aims to increase the number of apprenticeship starts for younger people and has committed to providing an additional 40m for 20,000 new higher apprenticeship starts in the current(2015/16)academic year.Capacity205(2014:153)Spl

38、it by Residential care of children and young people Education services for children and young peopleCapacity301(2014:320)Split by Pre employment programmes Development programmes ApprenticeshipsYoung People Residential ServicesTrainingLearning Services EQL Solutions and Dawn Hodge Associates3 CareTe

39、ch Holdings PLC Annual Report and Accounts 2015Strategic ReviewGovernanceFinancial StatementsQualityHilary Knell has been attending the centre for approximately 12 years where she has learnt to cook meals from scratch.Quality is not simply compliance with the requirements of regulation,although that

40、 remains important.Our approach is to employ well qualified and skilled professionals who can ensure that we consistently exceed the expectation of our service users,their families,social workers and commissioners.Placing people in the care of organisations that you can trust The business of care is

41、 predicated on relationships,as much as it is on the practical support and guidance that we offer on a daily basis.Troubled children need the warmth and challenging support of their care workers while disabled adults make best progress within the trust that a great relationship brings.We are also mi

42、ndful that social workers will prefer to place people in the care of organisations that share their commitment to optimism for service users,that they can rely on and deliver outstanding value.4 CareTech Holdings PLC Annual Report and Accounts 20155 CareTech Holdings PLC Annual Report and Accounts 2

43、015Strategic ReviewGovernanceFinancial Statements6 CareTech Holdings PLC Annual Report and Accounts 2015CareTech Group has stood out within its peer group of providers as a company that can successfully combine quality,integrity and sound financial acumen and has consistently achieved high care qual

44、ity ratings.Our credibility as the provider of choice has never been stronger and we continue our successful growth strategy with a confident outlook.ChoiceInnovative Care Pathways One of the characteristics that differentiates CareTech from the average provider is our commitment to opportunity.Long

45、 before it became fashionable we introduced the concept of a Care Pathway to reflect our optimism that users of our services can make progress in their lives.We were never content to accept that someone in residential care should always be in residential care and developed alternatives at an early s

46、tage in our development as a Group.Stuart Ravenscroft lives in a service at CareTech and he attends the centre for craft sessions,music and movement and woodwork.Stuart has been coming here for many years and is very proud of the work he achieves in our craft sessions,which also encourages recycling

47、 materials.7 CareTech Holdings PLC Annual Report and Accounts 2015Strategic ReviewGovernanceFinancial StatementsNational presence CareTech is very well known as a care company in public ownership that operates throughout England,Scotland and Wales.Our national presence is reinforced through conferen

48、ces and publications where the CareTech view is frequently sought and taken into account.Strong brand Financial security,probity and reliability combine to offer confidence in the CareTech brand.We offer high quality services with a strong ethical base with the benefits of scale,operating within fri

49、endly and trusted local service businesses.We are delighted to announce the acquisition of Spark,whose impressive growth in the past few years reflects the quality and innovation of its services and the strength of its local authority relationships.Spark of Genius joined the CareTech Group in July 2

50、015.Through their education-based approach they have become the market leader in their sector in Scotland.With the existing management team they will continue to develop the business and the services provided.Growth8 CareTech Holdings PLC Annual Report and Accounts 20159 CareTech Holdings PLC Annual

51、 Report and Accounts 2015Strategic ReviewGovernanceFinancial StatementsI am pleased to present our results for the year ended 30 September 2015.This has been a successful and exceptionally busy year the key highlights of which have been:Share placing funds raised of 21m Strengthening of management t

52、eam Amending and extending banking facilities on improved terms Increased organic initiatives Completion of two acquisitions during the year and one in December 2015Whilst the management team has been actively involved with these important initiatives it is really pleasing to note that we have conti

53、nued to maintain our position as an excellent care provider with our high quality ratings across the Group.Moreover,we have extended our care pathways through successful outcomes for the people we support.As a result we have improved our occupancy rates during the year which has led to an increase i

54、n our underlying EBITDA margin.This has produced a credible set of financial results where:Underlying EBITDA has increased by 5.9%to 32.5m Underlying PBT has increased by 11.7%to 22m Underlying diluted EPS had increased by 2.5%Full year dividend increased by 5%to 8.40p All of the above mentioned ini

55、tiatives have assisted the team in delivering a solid performance on both the key financial and non-financial metrics and puts the Group in the strong position to target double digit underlying EPS growth going forward.CareTech Group has stood out within its peer group of providers as a company that

56、 can successfully combine quality,integrity and sound financial acumen and has consistently achieved high care quality ratings.Our credibility as the provider of choice has never been stronger and we continue our successful growth strategy with a confident outlook.As announced in March 2015 the comp

57、any raised 21 million(before expenses)by way of a placing with new and existing institutional investors as well as Directors and certain Senior Executives.It was pleasing that the placing was oversubscribed and our plan was to invest the money in acquisitions within 12 months.Investment of the funds

58、 has been completed earlier than planned with two acquisitions in July 2015(Spark of Genius and Dawn Hodge Associates)and one on 1 December 2015(ROC North West).In July the Group completed negotiations to improve its banking facilities and to extend the facility by a further two years to January 201

59、9,with the addition of a 30m Accordion facility.During 2015 we closed several services for reconfiguration which impacted the growth in Revenue.Offsetting this there are better fees following our reconfiguration cost saving initiatives and the time and attendance system has improved underlying EBITD

60、A.The Groups Organic Development Programme will continue with further reconfigurations and for 2016 we have a strong pipeline of development opportunities.CareTech joined AIM in 2005 and we are therefore celebrating our 10th year in the public markets.During this time the business has transformed fr

61、om being very focused on supporting adults with a learning disability through residential and day care settings to one where today we cater for young people and children with complex needs across a range of settings,be it residential,supported living or community support.We focus on the most complex

62、 and vulnerable young people and the market for this client group stands at over 10bn.There is currently an undersupply of specialist beds in the niche area and the market is growing by almost 3%per annum.Over the years we have developed a range of care pathways and helped many that we support to li

63、ve more independently.This is a fantastic outcome for both us and the individuals that we support and it also helps local authorities meet the ever increasing cost of social care provision.On joining AIM in September 2005 the company had a capacity of 435 places,an underlying EBITDA of 2.4m with our

64、 underlying diluted EPS of 4.1p.Today our capacity has increased almost five fold to 2,116,our underlying EBITDA has grown significantly to 32.5m today whilst underlying diluted EPS has risen to 31.79 pence per share.Underlying EBITDA and diluted EPS has grown by an impressive CAGR of 30%and 25%resp

65、ectively since IPO.Even with significant growth we have achieved to date we still have less than 2%of this very large and fragmented market.With the increasing regulatory burden,the opportunity for further consolidation is even more attractive.Given our experienced management team,our range of care

66、pathways focused delivering positive outcomes for the individuals we support and our long established track record within the industry we are extremely well placed to be able to continue to do this going forward.This underpins our aspirations to deliver double digit EPS going forward.DividendThe Gro

67、up policy has been to increase the total dividend per year broadly in line with the movement in underlying diluted earnings per share.That growth in 2015 was 2.5%so the Board has proposed a final dividend of 5.60p (2014:5.40p)per share bringing the total dividend for the year to 8.40p(2014:8.00p)per

68、 share.This represents a full year increase of 5%year on year.The final dividend will be paid,subject to shareholder approval,on 9 May 2016,with an ex-dividend date of 3 March 2016 and an associated record date of 4 March 2016.Whilst the management team has been actively involved with these importan

69、t initiatives,it is really pleasing to note that we have continued to maintain our position as an excellent care provider with high quality ratings across the Group.A busy 2015 creating a springboard for further growthFarouq Sheikh Chairman10 CareTech Holdings PLC Annual Report and Accounts 2015Chai

70、rmans StatementOur BoardThere have been no changes to the Board during the year.As a foundation for growth the Senior Executive Team at CareTech has been strengthened with the appointment on 14 April 2015 of John Ivers as Chief Operating Officer.We have made several other senior appointments underpi

71、nning the growth of the business.During the year the Remuneration Committee and the Audit Committee were unchanged whilst Michael Hill left the Care Governance and Safeguarding Committee and the Clinical Director Dr.Junaid Bajwa and the Chief Operating Officer John Ivers both joined the committee.Ou

72、r PeopleWe have completed our planned evolution into two well defined operating divisions,Children and Adult Care,and this has generated organisational efficiencies.Simplifying the structure has also supported planning and service delivery with a more powerful approach to development.Managers and fr

73、ont line colleagues have continued to deliver exceptional commitment during the year,working vigorously with commissioners to reduce costs while maintaining quality.The most striking achievement of our front line staff has been to ensure the continuing safety of our service users during a period whe

74、n demands for cost reduction could have put individuals at risk.Our continuing growth,measurable success and forward-looking approach are a reflection of the hard work and dedication of staff and managers throughout the organisation.I am always drawn to the achievements of our excellent front line s

75、taff,which is inevitable as we are first and foremost a care organisation.Their care and commitment would be much less without the dedicated support of our administrators and support teams whose hard work and energy is critical to the success of our company and the care we provide.Outlook and Prospe

76、ctsWe understand the market and have anticipated shifts in social and health policy.Our understanding of the social care environment remains strong and we are positioned to take further change in our stride and have an improved platform for growth.With the money raised from shareholders and our own

77、free cashflow generated from the business,we have major investment plans for 2016 and beyond with key new organic developments and bolt-on acquisitions.Importantly,we have also strengthened our management team,offering a forceful blend of experience,commercial wisdom and dedication to care.I have no

78、 doubt that the next few years will see continuing growth and care excellence which will help deliver our target of double digit underlying EPS growth going forward.Farouq SheikhChairman20 January 2016 11 CareTech Holdings PLC Annual Report and Accounts 2015Strategic ReviewGovernanceFinancial Statem

79、entsThe Care market in which the Group operates is a UK market worth 15bn per annum across Adult Services for adults over the age of 18 and Children Services for children and young people up to the age of 18.The Directors present their Strategic Report on the Group for the year ended 30September 201

80、5.In preparing this report,the Directors have complied with S414C of the Companies Act 2006.The Strategic Report should be read in conjunction with the Strategic Review for the Group.Our MarketThe principal driver for commissioners in local authorities and the NHS is value.This is interpreted by the

81、m as the optimum balance between quality and price but has an underpinning criterion determined by“outcomes”.CareTech has been aligned to this set of purchasing principals and we work closely with commissioners to ensure that we stay in tune with their approach to market management.Most providers of

82、 social care have fewer than three services and this huge,fragmented range of providers dominates the market.However,the market has been steadily consolidating and a very small number of large“corporate”providers have emerged,with CareTech being one of the bigger players within the non-elderly care

83、sector.Numerically the large providers will have a very small minority of the market capacity and all the evidence suggests that consolidation will continue,perhaps accelerating,during the foreseeable future.Although the available resources to purchase social care remain largely static there is a kn

84、own increase in demand across the whole spectrum,presenting purchasing bodies with a conundrum.One response has been to move money away from the NHS in order to allow local authorities greater purchasing power.However,the most significant change has been to a system of aggressive rationing.This has

85、focused money on the areas of highest need such as complex children,very disabled or complex people with learning difficulties and hospital discharge schemes.This is where CareTech has developed its provision and helps to explain why spending cuts have had minimal impact on the Group.Client focused

86、innovative Care Pathway approachCare and support is characterised by optimism and a genuine belief in the abilities of our service users.Everyone we support has an opportunity to make progress in their lives and our professional teams work hard to help those people understand how to move forward.Man

87、y years ago we began to describe our services as a Care Pathway,making clear our intention to break away from the old belief that care is for life.We have delivered on this commitment and everyone we support,from young children to profoundly disabled adults,shares our dream to maximise their indepen

88、dence.This is great for service users,rewarding for our staff and strongly supported by those who commission and sponsor our services.Adult ServicesAdult Learning Disabilities Residential care Independent supported living Community support servicesChildren ServicesMental Health Residential care Inde

89、pendent supported living Community outreachFoster Care Fostering Family assessments in the homeYoung People Residential Services Residential care of children and young people Education services for children and young peopleLearning Services Pre-employment programmes Development programmes Apprentice

90、ships12 CareTech Holdings PLC Annual Report and Accounts 2015Strategic ReportCreating sustainable value in our markets1.4mpeople,of whom 85,000 in the UK cannot live independently5.9bnvalue per annum of market for residential learning disabilities and supported living5.5%pamarket growth rate2.4%of t

91、he UK population will be referred to a specialist psychiatric service14.4bnvalue per annum of NHS/LA total spend on mental health 5.5%pamarket growth rate51,340children are placed into foster care in England1.1bnvalue of foster care market across England1.5%pamarket growth rate17,500children in Engl

92、and are looked after outside foster care 1.0bnvalue of residential childrens market across England0.2%pamarket growth rate510,000apprenticeship starts1.6bnapprenticeship budget9.1%pamarket growth rate*Data from Laing and Buisson 2013 report.13 CareTech Holdings PLC Annual Report and Accounts 2015Str

93、ategic ReviewGovernanceFinancial StatementsLearningServicesFoster Care andFamily ServicesYoung PeopleResidential ServicesMentalHealthAdult LearningDifcultiesCareGovernanceCarePathwayExperiencedand committedmanagementStrongbrandSafeguardingCommitteeExtraordinarydays every dayNational presenceOur Busi

94、ness Model represents how we aim to generate revenue and profit from our operations.The Group aims to operate throughout mainland Britain in England,Wales and Scotland in partnership with local authorities and the NHS,facilitating the outsourcing process,driving value and removing risk.During the pe

95、riod,the Group continued to develop and grow organically four existing operating divisions,which come under the two outcome-based sectors of Adult Services and Children Services.We have also expanded the Learning Services division through acquisition.The growth going forward is underpinned by the st

96、rong starting point that we have built carefully over the past few years.We continue to extend both our geographic coverage and our outcome-based Care Pathway range of services organically and through the purchase and sale of properties to meet the needs of our marketplace,specifically the requireme

97、nt for greater acuity service provision.This ensures that CareTech is in a very strong position to address the demands of our evolving marketplace.The key resources that we require to provide care are:People to provide careStaff and carers who have appropriate skills and qualities to look after chil

98、dren or adults in need of care and who remain fully trained.People with skills to manage,train and support our people who provide careSkilled staff to provide the management and training to our people who provide care.Buildings,homes and landThe land and buildings to provide accommodation for reside

99、ntial services or supported living.Financial resourcesFinancial stability to be able to employ the right staff and to provide the right land and buildings.Our Business ModelOur resources14 CareTech Holdings PLC Annual Report and Accounts 2015Strategic ReportcontinuedA strategy to drive future growth

100、We shall continue to improve the quality and scope of our services,increase market share and grow shareholder value.Our understanding of the social care market and our relationships with local authority commissioners is vital to this objective and we are confident in the strength of our position.We

101、are sensitive to the complex financial position that local authorities are in and their need to have trusted business partners who can help them deliver statutory duties efficiently and with care.Social care expertiseEmploying numerous qualified and skilled care workers,foster carers,teachers and ma

102、nagers,the CareTech front line teams are supported by a wide range of high level professionals such as social workers,nurses,therapists,psychologists and a skilled Medical Director with oversight of all interventions.High qualityThe driver for social care is an organisations ability to deliver high

103、quality care,with reliable outcomes at a fair price.We believe that the market has recognised that CareTech offers the best possible balance between quality and value and understands the need for progressive thinking and innovation to deliver ongoing results.Nationwide locationsThe CareTech strategy

104、 is to offer a strong national brand with local and regional service delivery points.This supports development of local relationships while offering the comfort and security of a well resourced and strong Group.Excellent reputationThe CareTech brand is strong and our extensive relationships across t

105、he UK are robust.This is reinforced by our presence at major industry events where we have been reliable sponsors and commentators.The most effective way that we sustain our reputation is by delivering what we promise for the people we support and by treating our staff well.High occupancyCareTech se

106、rvices are in demand and occupancy has remained high despite fears of local authority austerity impacting referrals.Whats more,the nature of referrals in recent years has been toward the more complex end of the spectrum.Continued growthIt is well known that demographic trends show growth in social c

107、are in the foreseeable future.Shareholder valueCareTech has delivered sustainable and reliable growth since the day it listed.It has aimed to be a defensible stock even in difficult times and for some time has offered a good quality dividend policy.We have every reason to believe that growth will co

108、ntinue and the management team remains enthusiastic about the Groups future.Our strategy15 CareTech Holdings PLC Annual Report and Accounts 2015Strategic ReviewGovernanceFinancial Statements32.5m2011201220132014201530.7m26.4m24.9m23.2m18.3m2011201220132014201516.1m14.1m13.3m12.6m31.79p20112012201320

109、14201531.01p27.43p26.47p25.35p158.5m20112012201320142015166.1m168.5m131.2m127.3mOur KPIs help to measure the Groups performance against its strategy and objectives.Underlying EBITDA18.3m(2014:16.1m)Underlying profit after tax31.79p(2014:31.01p)Underlying diluted EPSHow this is calculatedUnderlying d

110、iluted earnings per share is the underlying profit after tax(which is after adjusting for non underlying items which are not considered to impact the trading performance of the Group)divided by the weighted number of ordinary shares which are fully described in notes(10)and(11)to the Financial State

111、ments.Performance this yearThe underlying diluted earnings per share has increased by 0.78p at 2.5%year on year.This is the increase in underlying profit after tax partly offset by the increase of 10 million shares from the share placement during the year to give a growth in earnings per share.158.5

112、m(2014:166.1m)Net DebtHow this is calculatedNet Debt comprises the balance at the year end for cash and cash equivalents net of bank loans outstanding and finance lease and hire purchase contract monies outstanding and is fully described at the foot of the Consolidated Cash Flow Statement on page 44

113、.Performance this yearBank debt at 30 September 2015 was 151.0m which is a reduction of 11.3m from 30 September 2014 of 162.3m with the reduction mainly due to some of the share placement monies remaining unspent at the year end.Finance leases at the year end were 7.5m(2014 3.8m)with the increase du

114、e principally to the investment in 240 new home vehicles during the year.Net Debt in total reduced by 7.6m or 4.6%between 30 September 2014 and 30 September 2015.32.5m(2014:30.7m)How this is calculatedUnderlying EBITDA is the Earnings before Interest,Tax,Depreciation and Amortisation for the year ex

115、cluding non underlying items such as amortisation of intangible assets which are fully described in note(5)to the Financial Statements.Performance this yearThe underlying EBITDA has improved by 1.8m or 5.9%year on year.This reflects the organic growth achieved by the core business which has been in

116、part reduced by the reconfiguration work on some properties and improved margin and acquisitions.How this is calculatedUnderlying profit after tax is the Groups profit after provision for taxation excluding non underlying items such as amortisation of intangible assets after tax which are fully desc

117、ribed in note(5)to the Financial Statements.Performance this yearThe underlying profit after tax has improved by 2m or 13.7%year on year.This reflects the improved underlying EBITDA and finance charges offset by an increased tax provision.16 CareTech Holdings PLC Annual Report and Accounts 2015Our k

118、ey performance indicatorsStrategic Reportcontinued2,116201120122013201420152,0742,1162,1162,05693%2011201220132014201592%92%92%92%86%2011201220132014201586%84%86%87%2,116 places(2014:2,074 places)How this is calculatedThe Groups capacity is the total number of Adult Service and Children Service plac

119、es that the Group is able to offer at that date.It is a total including residential care beds,independent supported living accommodation,community support service users and children that foster carers can currently look after.Performance this yearOverall capacity has increased by 42 reflecting the n

120、et of 45 additional beds now brought into capacity and 48 beds which increased Childrens residential capacity with the acquisition of Spark of Genius,27 beds withdrawn for reconfiguration,five places less in small supported living packages and a reduction of 19 for carers not currently accepting chi

121、ldren with 18 of these occurring in the first half year.Spark of Genius also has capacity to provide education to 144 children but this is not included in capacity.Capacity93%(2014:92%)Mature Estate occupancy86%(2014:86%)Blended occupancyHow this is calculatedThe Mature Estate occupancy is the total

122、 number of Adult and Children Service users placed in services that were open throughout the year.Performance this yearThe ratio has improved slightly to 93%and reflects the long length of stay that the majority of service users have in our services.How this is calculatedBlended occupancy is the tot

123、al number of Adult and Children Service users actually placed as a percentage of the Groups total capacity and so reflects facilities undergoing development and reconfiguration.Performance this yearThe ratio has remained at 86%and reflects the additional beds in reconfigured services brought back in

124、to capacity and the reduction in fostering capacity where carers are unable to accept foster children currently.17 CareTech Holdings PLC Annual Report and Accounts 2015Strategic ReviewGovernanceFinancial StatementsSocial care is a long-term contract with the public sector and is inherently free of r

125、isk so long as quality is maintained,outcomes are achieved and the price is right.However,social care does carry risks that will always be at the forefront of our minds.The most obvious risk is that a tragedy will occur and that the company will be held to blame.To date this has not occurred but we

126、take the risk very seriously.Our principal risk management strategy is to ensure that our staff are recruited well,are trained and supervised properly and are subject to rigorous quality oversight.In addition,we know from experience that processes and documentation must be very carefully observed an

127、d constantly reviewed to ensure that it protects service users and provides the company with a defendable position in the case of tragedy.These matters,along with general safeguarding,are subject to intense scrutiny by our in house compliance and quality teams and Board level oversight.Managing risk

128、 and mitigating riskSocial care is not a high risk business proposition but there are several unique factors that could cause difficulties for the careless or casual provider.These centre on the way in which care and support is provided and the reliability of those front line staff who provide it.Ca

129、reTech approaches these issues with considerable care and exceptional diligence,building in quality and training wherever it is required but also through its established scrutiny protocols and firm leadership.We care a great deal about what we do and have established a reputation for careful managem

130、ent of all those processes that could expose us to risk.Our risksAll providers of health and social care are conscious of the need for management vigilance and the requirement to have a thorough commitment to delivering care that is safe and of a high quality.CareTechs approach to quality and safe s

131、ervice delivery is characterised by a mixture of a dedicated compliance team carrying out regular audits of inspection and a commitment to building quality into everything we do.The market for the provision of social care services continues to be dynamic,presenting both risks and opportunities.The o

132、verall number of people needing support will increase,and a smaller proportion of them will be placed into residential services.Those who do need a residential care solution will have more complex needs and are likely to require a wider range of services,including clinical and therapeutic support.Ou

133、r operational management teams are already focusing on the delivery of high quality care.As we move forward this will become increasingly specialised with the benefit of professional qualified care co-ordinators who will prepare and direct personalised care plans within the services.Most service use

134、rs will be supported in their own homes through domiciliary care or in more formal supported living arrangements.This is a major growth area for care providers and CareTech already has a solid reputation for its high quality and flexible solutions.We are building this to a higher level and refining

135、our organisational structure to build more rapidly on our successes to date.Service offer and user needs We have to create and staff a service offering which matches the needs of the service user and can be communicated to commissioners so it is carefully recorded locally at every service in order t

136、o reduce the risk of service users moving to other service providers.Quality and safety We have to provide and deliver safe care of a high quality and the Group utilises Perry Scott Nash to audit and report monthly on health and safety matters as well as all RIDDORS(Reporting of Injuries,Diseases an

137、d Dangerous Occurrences Regulations)so that all incidents are recorded and acted upon.Service value The service offer has to be provided to meet the needs of the commissioners at a fair price and this is coming under increased scrutiny as commissioners regularly review value for money so the Group c

138、ommunicates frequently with its commissioners locally.Reputation The Group has to have a reputation for delivering a service that is good value and takes account of all risks.The Group maintains a Risk Register which includes all key risks,including reputational risk,and how they are mitigated thoug

139、h quality of service and good communication with service users and Local Authorities.Growth funding So that the Group can keep growing adequate funding has to be anticipated and put in place and the Group ensures that all of its facilities are monitored and reviewed regularly in particular during it

140、s budget and forecasting processes.Manage debt The level of debt obtained to fund operations and ensure that growth can occur has to be carefully managed and the different forms of leasing and debt are reviewed quarterly when all of the covenants are also reviewed.By order of the BoardFarouq SheikhC

141、hairman20 January 2016Our principal risk management strategy is to ensure that our staff are recruited well,are trained and supervised properly and are subject to rigorous quality oversight.18 CareTech Holdings PLC Annual Report and Accounts 2015Principal risks and our strategic responseStrategic Re

142、portcontinuedAdult Services Adult Services Residential Care and Community SupportMental Health and Specialist ServicesChildren ServicesYoung People Residential Services and EducationLearning ServicesFoster CareCorporate direction and supportIncorporates the Finance department,Human Resources,Nationa

143、l Training Centre,Quality,Regulation and Compliance Treasury and I.T.Business segmentsStrategic ReviewGovernanceFinancial Statements19 CareTech Holdings PLC Annual Report and Accounts 2015OverviewIt gives me great pleasure to again report on a successful year that reflects the hard work of our manag

144、ement team,the enthusiasm of our staff and the support of our Board.The Group has continued to build upon its solid foundations and remains in a strong position to continue as a leading provider of high quality specialist social care services in a large and growing UK market which remains fragmented

145、.The Group has continued to develop through organic growth and reconfigurations and with the two acquisitions in July 2015 and one acquisition in December 2015 it has made further encouraging progress during the year and has gained experienced management teams with proficient leaders.The new busines

146、ses have integrated and settled well,though our principal focus remains organic growth.A key recent strategy has been the development of the Learning Services Division which has already had a positive impact on gaining new staff,their training and retention,and the addition of Dawn Hodge Associates

147、has further improved this strategy.Consolidation and creating new opportunitiesCareTech remains at the forefront of social care outsourcing across both Children and Adult Services and in the year there has been a further increase in working closely with commissioners and regulators as the whole syst

148、em is under stress from the changes that policy and financial pressure have brought.National public policy continues to be a significant driver of local authority commissioning intentions and behaviour.For a number of years public policy has encouraged greater personalisation of health and social ca

149、re for adults.Commissioners and leading providers are driving change that will mean offering people more choice and control over the care,treatment and support they receive while at the same time maintaining the quality and safety of those services.Our care priorities drive successful outcomes for o

150、ur service users and follow closely the guidance from central Government.Our key focus for delivering quality services and positive outcomes is supported by the following key factors:Communication We have open and frank dialogue with our service users,their families and social workers.Independence I

151、n our social care and health contracts we aim to help our clients to return to an ordinary life.It may be children who can return to their birth families or live independently.It may be adults who we can help on the pathway to recovery following a mental health breakdown or people with learning disa

152、bility who we can support towards independent living.Housing care and support We know that most people aspire to have a place of their own,employment and ongoing support.We have structured our services,developing new provision and creative partnerships with housing providers to enable these aspirati

153、ons to be achieved whenever possible and we are tailoring training to assist young people and adults leaving our services to gain employment.Self-directed support It is pivotal to Government policy that adults and children receiving social care are fully engaged in the support that they require.With

154、 some adults this extends to the provision of a cash sum enabling them to purchase their care and support directly.CareTech managers have been reviewing our systems and delivering training throughout the organisation to ensure that we are able to deliver the requirements of self-directed support.Qua

155、lity and dignity CareTech has always delivered high quality care in exceptional premises.However,we have never been complacent about this and have undertaken many reviews to ensure that we deliver the right quality at an acceptable price.We have also learned a great deal from the experience of our N

156、HS colleagues and developed a Dignity Test to ensure that our front line and administrative staff treat all our clients in ways that promote dignity.Progress in the yearThe year has seen continued progress as the Group concentrates on the introduction of innovative new services developed in partners

157、hip with local authority commissioners from within our existing portfolio of properties or through new properties either purchased or rented for service users.At the end of July 2015 the Group acquired the share capital of Spark of Genius and shortly afterwards Dawn Hodge Associates so the progress

158、has been a mixture of organic development and acquisitions.Spark of Genius is a Scottish-based provider of residential care and education services for young people with complex needs.Dawn Hodge Associates is an Ofsted Grade 1 care sector apprenticeship training provider based in the North West.Haroo

159、n Sheikh Chief Executive Officer20 CareTech Holdings PLC Annual Report and Accounts 2015An improved Foundation for GrowthChief Executives Statement and Performance ReviewThere have been a small number of asset disposals during the year where the service was not meeting commissioner aspirations and a

160、 reconfiguration was not possible or economically viable.Our Adult Services have added 35 beds in the year,being 13 in Supported Living and 22 in Residential.Children Services have added ten beds in the year in two services with six beds and four beds.The Group also continues to realise the benefit

161、of organisational improvements that were put in place over the past few years.We have continued to strengthen the management structure and improve the efficiency of our processes following further investment in new systems which have gone live in the year such as the Time and Attendance system.We ar

162、e seeing the benefits of new executive appointments and the Clinical Director role continues to have a positive impact across the services.These improvements have put us in a strong position to benefit from a number of the commissioning opportunities by working in partnership with the NHS and Local

163、Authorities.Care Pathway range and servicesThe Groups focus remains the provision of specialist social care.This is underpinned by a well-defined range of provisions which meet all of the commissioner requirements.These services are now even more extensive and focused on providing high quality care

164、and positive outcomes for all of our service users.The Group continued to develop and grow its existing four operating divisions,which come under the two outcome-based sectors of Adult services and Children services.We continue to extend both our geographic coverage and our outcome-based Care Pathwa

165、y range of services organically and through the purchase and sale of properties to meet the needs of our marketplace,specifically the requirement for greater acuity service provision.This ensures that CareTech is in a very strong position to address the demands of our evolving marketplace.Following

166、the acquisition of our second Learning Services division business,I am particularly delighted to report on the integration and development of our apprenticeship model.The team has already completed pioneering work by developing the apprenticeship model in social care,and the CareTech Aspire Programm

167、e which takes CareTechs care staff from the foundations of mandatory and statutory training to offer the opportunity to complete a Level 2 or Level 3 apprenticeship.At the year end,this programme had 460 CareTech apprentices undertaking the apprenticeship and has significant growth potential both wi

168、thin the Group and across the wider social care sector.We remain committed to the growth of residential care solutions for adults and children with the most complex needs and the CareTech Group has embraced the development of home-based solutions including foster care where demand for more specialis

169、t services remain strong.Our residential care services for children cater for young people with particularly difficult issues and offer a national service;with strong growth seen in Scotland including the addition of Spark of Genius which also has properties in the North East of England and Roc Nort

170、h West,which has care and educational services in the North West of England.Our adult services offer a solid and reliable provision across the whole spectrum of service offerings and we see a particular volume demand in the area of supported living,balanced by renewed demand for more specialised res

171、idential care solutions.Our strategy is to offer a bespoke range of options so that we can maintain the Care Pathways that distinguish us from other providers.A holiday to Disneyland has been a dream of some of our residents at Ashview House for a long time.Staff were amazing and made sure the resid

172、ents had a great holiday.21 CareTech Holdings PLC Annual Report and Accounts 2015Strategic ReviewGovernanceFinancial StatementsThis includes adult residential care homes,independent supported living and community support services.The principal reason for the increase in underlying EBITDA of 1.9m was

173、 the reconfiguration of homes from Mental Health and their reopening late in the overall year which improved the underlying EBITDA margin from 30.5%to 32.3%.We have continued to work closely with commissioners and this has helped us to achieve our growth through the past year.We take a long-term vie

174、w,recognising that change will continue and with this in mind I am pleased to report that the closure and redevelopment of some of our long stay residential provision has been a great success over the past year and will continue to meet the changing requirements of commissioners and families.The mar

175、ket for high acuity care and the support of people with learning disability is growing year on year.Demand for low-level support has been impacted by the cuts in local authority expenditure but this is not an area of activity in which CareTech operates.Conversely,resources for those with the highest

176、 level of need are being maintained and increased in some local authorities.During the past year we have developed 35 beds through reconfiguration of existing residential services.Further new provision is under development.Mental Health Revenue6.4m(2014:7.3m)Underlying EBITDA1.9m(2014:2.5m)Capacity1

177、14(2014:151)The reduction in capacity and revenue in Mental Health arises because there have been a number of services reconfigured and transferred to Adult Learning Disabilities.Mental Health works in partnerships with the NHS to ensure a successful transition out of acute care,delivering pathways

178、to independence.We have an outstanding track record for helping people away from acute care and supporting them in their own homes.The adult services for this Care Pathway include a community-based hospital,adult residential care homes,independent supported living and community outreach with some tr

179、ansitional services transferred within the Group.Overview of progressOur focus during the past year has continued to be further building on the businesses which established the Care Pathways whilst introducing innovative new solutions to meet the challenges faced by care commissioners and then addin

180、g newly acquired businesses with complementary skills.Capacity has increased by 42 places principally because we have continued to reconfigure services and acquired Spark of Genius.Occupancy levels within our mature services remain at a creditable 93%,or 86%when taking into account our services unde

181、r development and transition;there is a 1%improvement on the previous year for the mature services.Much has been written about personalisation and I felt it would be useful to set out our own understanding and commitment to personalisation.Personalisation means“recognising people as individuals who

182、have strengths and preferences and putting them at the centre of their own care and support”(Social Care Institute of Excellence).The traditional service-led approach has often meant that people have not been able to shape the kind of support they need,or receive the right kind of help.Personalised

183、approaches such as self-directed support and personal budgets involve enabling people to identify their own needs and make choices about how and when they are supported to live their lives.Our two business divisions of Adult Services and Children Services comprise the following five care pathways:Ad

184、ult Learning Disabilities Revenue75.7m(2014:74.2m)Underlying EBITDA24.5m(2014:22.6m)Capacity1,496(2014:1,450)Adult Learning Disabilities provides individually tailor-made solutions for people living in their own homes,residential care or independent supported living schemes.We can work with clients

185、to deliver self-directed support packages.For some people residential care will continue as the preferred option and we increasingly offer several types of supported living and packages of individualised self-directed support to people in their own homes.Community Mental Health has always been a cri

186、tical but relatively neglected area of social care.However,this is changing as the NHS drives to lower bed capacity and accelerated early discharge from acute psychiatric hospital care.The growth of social care is certain and the response by Government to one of the key difficulties is progressing.T

187、here has been some progress in the removal of large numbers of learning disabled people from the controversial Treatment and Assessment Centres operating at various locations throughout the UK.CareTech has never operated any centres of this type but we understand that the CEO of NHS England has been

188、 tasked with ensuring that these centres are re-provided as a matter of urgency.CareTech is seeking opportunities to support the project and to offer a comprehensive solution within its community homes.We are well positioned for further expansion in Mental Health and have a sustainable infrastructur

189、e to deliver growth.Foster Care Revenue9.8m(2014:12.0m)Underlying EBITDA2.4m(2014:3.0m)Capacity301(2014:320)Foster Care provide for both mainstream and specialist foster care in small supportive Groups across England and Wales for children with disabilities.We also provide foster care family assessm

190、ents in the home rather than in a residential setting.The reduction in capacity,revenue and underlying EBITDA in Foster Care arises due to the competitive nature of the market as well as because of the change to family assessments in the home and also due to capacity being reported on the new basis

191、of children that carers are able to look after rather than the number they are approved for.This trend is driven by cost considerations,where fostering is considerably less expensive than residential care and by perceived quality care factors.It is generally held that fostering in an ordinary family

192、 home delivers better quality than any residential setting.However,the rising tide of fostering has been constrained by the challenge of finding foster carers with the right skill and motivation alongside preference by social workers to place within local authority services rather than the independe

193、nt sector.22 CareTech Holdings PLC Annual Report and Accounts 2015Chief Executives Statement and Performance ReviewcontinuedIn 2013,46%of children placed in foster homes were outsourced to the independent sector.This compares with 67%placed in residential homes operated by independent providers.Our

194、Foster Care teams and Young People Residential teams are working alongside each other to offer the best outcomes for young people.Our market intelligence suggests that most,if not all,independent sector fostering agencies are experiencing some degree of“hold back”at present.However,the consensus vie

195、w is that this will not last long and local authorities will inevitably return to progressive outsourcing of foster care provision.Outsourcing is well established in the culture of most local authorities,but the current austerity measures have led a small number of authorities to reflect on the 50%f

196、ee premium paid for independent fostering.This disparity of cost can be attributed in part to the fact that the most complex and therefore most expensive children are placed in the care of independent providers.However,it is also clear that local authorities fail to undertake a full cost analysis of

197、 their in-house provision.Wherever this has been done,outsourcing is demonstrably much better value.Demand for foster care has increased overall but we have noted an increasing trend among some local authorities to make provision in-house for all but the most complex children.In our view this is an

198、expensive and unsustainable approach that exposes local authority commissioners to risk.Our own services are being maintained at an acceptable level.Looking forward we are training our foster carers with the skills required to manage more complex work and have linked the fostering division with our

199、residential team for children so that we can maintain an effective care pathway.Young People Residential Services Revenue22.4m(2014:21.9m)Underlying EBITDA8.2m(2014:7.4m)Capacity205(2014:153)A number of children and young people need to live in specialised residential services and receive education.

200、As far as practicable we aim to help these children move into a more normalised family style environment.This segment contains children residential care homes,which includes facilities for children with learning difficulties and emotional behavioural disorders(“EBD”),and small specialist schools.In

201、the year this segment benefited from two new services which have added 10 beds.We also acquired Spark of Genius which will provide significant benefits across the divisions due to their well established education facilities across Scotland and North East England.Children residential services have be

202、en growing as our reputation for quality care and support spreads.We are currently developing new beds and places that have been commissioned during the past year.Learning Services Revenue10.0m(2014:7.9m)Underlying EBITDA0.9m(2014:0.1m)CareTech acquired EQL Solutions in November 2013 and is a nation

203、al provider specialising in employment and training services to young people and adults.The necessary investment and re-structuring is now complete.Its intensive pre-employment,development and apprenticeship programmes use public funds from the Skills Funding Agency to lay the foundations for indivi

204、duals to achieve their career goals while helping to provide businesses with the vital skills they need in their workforce.As well as supporting the workforce,EQL Solutions has also developed programmes for service users by enhancing the pathways to independent living and employment.Young people lea

205、ving care,for example,often do not know where to find the right job opportunities or have the opportunity to access employer-focused training.We can now bridge that gap by supporting young people as they make the transition to adult life.We are also exploring how best to help individuals return to e

206、mployment after mental illness and to give people with learning disabilities the skills and confidence to gain employment so that they are able to live more independently.Early mapping with CareTechs core business has gone well.Good progress has been made in identifying the potential for EQL Solutio

207、ns to add value to CareTechs attraction and recruitment of staff and their retention,helping new employees gain the skills and qualifications to grow a successful career in care through an Apprenticeship.Kathryn Graham lives in a CareTech service and attends the Martello Centre.Kathryn works for Car

208、eTech for 2 half days a week,helping make the centre user friendly by producing signage in Makaton symbols.Kathryn has worked for our training department for six years and at the Martello Centre for three years.“Foster care is on a rising trend in terms of both numbers placed in foster care and expe

209、nditure by local authorities.”Laing and Buisson,201323 CareTech Holdings PLC Annual Report and Accounts 2015Strategic ReviewGovernanceFinancial StatementsAn Apprenticeship is a work-based learning programme designed around the needs of employers,which leads to nationally recognised qualifications.It

210、 is available to anyone aged 16 and above and is made up of a practical competency component,on-the-job training and off-the-job learning.As well as Apprenticeships being a practical,cost-effective way to recruit and train new social care employees,many employers consider the framework to be a usefu

211、l learning and development route for their current employees,across all ages and experiences.For some time the Group has felt that the ability to offer pre-employment training to potential recruits,alongside Apprenticeships and other development solutions for existing employees,would enhance and sup

212、port many aspects of CareTechs outcome-based approach.We are delighted that the learning and development specialists in EQL Solutions are now working with all of the care divisions to continuously improve the standards of care and delivery across all our services.We look forward to collaborating wit

213、h our partners to spread best practice and innovative training across the wider social care sector.I am pleased to confirm that we have made good progress with EQL Solutions and the team are strongly motivated to develop their initiatives in the world of social care through the Aspire Programme.Aspi

214、re has been developed by EQL Solutions as a unique and innovative scheme that will ensure all CareTechs support workers receive mandatory and statutory training to the highest standard whilst also being offered the opportunity to complete a Level 2 or Level 3 Apprenticeship which has been carefully

215、tailored to suit their role.CareTech apprentices have now begun their training with 460 CareTech support workers undertaking the apprenticeship programme.Dawn Hodge Associates was acquired due to its Ofsted Grade 1 and experience of the social care sector.The services of EQL Solutions and Dawn Hodge

216、 Associates complement each other and provide the foundations for a strong learning division within the Group.Corporate Social Responsibility We have continued to strive for long-lasting improvements in our services in a way that is consistent with the interests and concerns of our stakeholder commu

217、nity.As always,the driving force underpinning CareTechs whole operation continues to be the provision of the highest quality of care to our service users.We care about our service usersService users are the reason for our existence and satisfying their needs remains our key objective.As our organisa

218、tion grows,we strive to maintain a culture which never forgets the important relationship we have with our service users.We seek to nurture these relationships and see them as partnerships of mutual interest and respect,with our person-centred approach ensuring service user interests are safeguarded

219、 and vulnerabilities minimised.The further expansion of our Care Pathway strategy seeks to provide our service users with“whole of life”solutions to their needs,maximising independence where possible by encouraging education,promoting choice,being proactive with family relations,providing employment

220、 where feasible and nurturing personal ambition where helpful.In the year we have been celebrating the achievements of our service users across the country,they have been busy creating art pieces for an Art Competition and the finalists are having an awards presentation in early December 2015.We are

221、 determined to preserve the dignity of those we care for and fully support Government initiatives to this end.We see making each day as fulfilled as possible for our service users as a vital ingredient to their,and our,success.We care about the environmentWe seek to maximise environmental standards

222、in all areas of our organisation.Energy costs are now more closely monitored centrally and with the installation of smart meters being rolled out across our services we are seeking to encourage more efficient consumption of energy,without compromising service user care.Clinical waste management has

223、an environmental impact and we are focused on ways to make this more effective whilst still adhering to statutory requirements.Dawn Hodge Associates,purchased by CareTech in July 2015.A training company which is Ofsted Grade 1 Approved.24 CareTech Holdings PLC Annual Report and Accounts 2015Chief Ex

224、ecutives Statement and Performance ReviewcontinuedWe aim for minimal waste production and waste-free processes.Encouraging the involvement of our workforce in seeking new ways to“be green”is important and we are striving to reduce our carbon footprint in all commercial areas including promoting recy

225、cling initiatives,developing a carbon offset scheme for paper usage,using public transport where feasible and improving our energy efficiency.We care about our staffWe remain committed to ensuring employees share in the success of the Group and fully appreciate that Group performance is affected by

226、the relationship we have with them.Sustaining the retention and development of employees is also critical to our continued success and we remain of the belief that fostering a positive workplace culture is the best way for our employees to thrive.Supporting them with regular supervision,training and

227、 clear career development programmes promotes staff continuity and leads to improved standards of care quality.In early December 2015 we are having a staff awards ceremony with ten categories for staff and staff teams across each Division for the 2015 Awards.It is planned to hold a similar event in

228、2016.Out of a total of 3,739 staff at the end of September 2015 68%are female and equal opportunity for all remains at the heart of our recruitment policies and the diversity of our workforce bears this out.We value our staff at all levels and work closely with them through our robust human resource

229、s department to foster consultation in all matters,ensure fair pay for all,maximise conditions of service and facilitate flexible working where feasible.During the year we undertook a Staff Engagement Survey which involved all staff and looked at values and questions across five engagement drivers.T

230、he feedback has led to a Communication Plan that will lead to improved communication across the Group.We have a team of in-house training staff delivering courses on all relevant subjects,enabling our workforce to gain the skills,knowledge and confidence to provide the care and support to our servic

231、e users on a daily basis.Our sharesave share option scheme is being re-launched to offer new invitations regularly and will be available to all our employees.This participation,along with regular senior management share option awards,contributes to the fulfilment of our desire to reward staff for lo

232、yalty,diligence and effort.We care about quality and safetyAs a Group,our aim is to provide a safe working environment for service users,staff and visitors.We value the well-being of all stakeholders and develop policies to this end.Maintaining workplace infrastructures is a core objective and susta

233、ined investment in Information Technology,furniture,facilities and equipment enable working environments,be they operational or administrative,to be safe and productive.Regulation is vigorously applied with routine and regular inspections being made by the Care Quality Commission(“CQC”)and Ofsted in

234、 England and the services are regulated by the Care and Social Services Inspectorate Wales(CSSIW)in Wales and by the Care Inspectorate for Scotland.We continue to resource our own highly experienced internal quality and compliance teams which undertake a programme of regular inspection and assessmen

235、t and give constructive feedback backed by training and supervision if the requirement is there.We engage the services of outsourced expert advisers ensuring best practice and procedures are maintained.We care about our communitiesDoing business the right way is of fundamental importance to us.A suc

236、cessful business needs to operate in healthy,thriving communities and needs to be seen as a good neighbour to those communities.We have direct involvement in a variety of community-based programmes further improving our service reputation and helping to foster a strengthened relationship with local

237、authorities.Being a socially responsible organisation with a focus on developing our ethical standards aligned with our economic objectives remains a core aim and we strive to identify the real value of our organisation,beyond its bottom line.Considering non-financial values such as reputation,emplo

238、yee commitment and service user fulfilment helps us see longer-term opportunities and risks,ultimately saving money and time.Behaving responsibly and maximising the benefits of a strong relationship with our stakeholders is an integral part of a continuing process of building long-term value.Outlook

239、The coming year shows every sign of being good for health and social care providers and especially for those with an established reputation for quality and innovation.Since the 2015 General Election there has been significant policy development in the pipeline and we see some indicators that local a

240、uthorities have recognised the need to maintain,or grow their social care budgets.In our view we are in a period in which consolidation will again feature strongly within the corporate sector and we are alert to quality opportunities that may arise.However,we are mindful about acquisition and have r

241、obust criteria which must be satisfied to ensure that any acquired company fits our strategic development objectives.This has been another progressive year for CareTech and I am indebted to the strong management team who have managed the services in what has been a challenging environment for the ca

242、re sector.CareTech provides high quality care,support and outcomes to our service users.I remain proud to lead the Group,delivering a quality of care that makes such a difference to so many lives.Haroon SheikhChief Executive Officer20 January 201625 CareTech Holdings PLC Annual Report and Accounts 2

243、015Strategic ReviewGovernanceFinancial StatementsResultsThe underlying operating profit remains strong at 28.8m compared with 27.3m last year.Up to 2013 the Group had been making strategic acquisitions to gain market share and extend the care pathway range of services.Since 2013 the focus has been o

244、n organic development and cost efficiencies,but with the Share Placement,improved banking facilities,the Group(following the acquisition of Spark of Genius Limited and Dawn Hodge Associates Limited)continues to be well placed to make further acquisitions.Underlying diluted earnings per share increas

245、ed by 2.5%to 31.79p(2014:31.01p)per share and underlying profit after tax has risen by 13.7%to 18.3m(2014:16.1m).Basic and diluted earnings per share decreased by 42%to 13.80p and 13.80p respectively(2014:23.86p basic and 23.85p diluted)and profit after tax decreased by 35%to 8.0m(2014:12.4m).Cash i

246、nflows from operating activities before tax and non underlying items paid were 30.8m(2014:30.3m),an increase of 1.3%.Net debt at the year end of 158.5m has reduced by 7.6m for the year.The Condensed Income Statement before non underlying items for the year is summarised in table 1 opposite.RevenueRe

247、venue of 124.3m(2014:123.3m)was 0.8%higher than in 2014.In the established Adult Learning Disabilities segment we continued to experience high levels of occupancy and reported 93%occupancy at 30 September 2015.When this is blended with the facilities that are being reconfigured and so are under deve

248、lopment,the overall occupancy level during the second half of the year and at 30 September 2015 was 86%of capacity(September 2014:86%).As in recent years the demand for residential services continues to be encouraging for high acuity users.Michael Hill Group Finance DirectorTable 1 Condensed Income

249、Statement before non underlying items 2015m2014mGrowthRevenue124.3123.30.8%Gross profit47.746.6Administrative expenses(15.2)(15.9)Underlying EBITDA32.530.75.9%Underlying EBITDA margin26.1%24.9%Depreciation(3.6)(3.4)Share-based payments charge(0.1)(0.1)Underlying operating profit28.827.35.5%Net finan

250、cial expenses(6.8)(7.5)Underlying profit before tax22.019.7Taxation(3.6)(3.6)Effective tax rate16.4%18.2%Underlying profit for the year18.416.1Weighted average number of diluted shares(millions)57.752.0Underlying diluted earnings per share31.7931.01Full year dividend per share8.40p8.00pTable 2 Reven

251、ue2015Revenuem2015UnderlyingEBITDAm2014Revenuem2014UnderlyingEBITDAmAdult Learning Difficulties75.724.574.222.6Mental Health6.41.97.32.5Adult Residential Services82.126.481.525.1Young People Residential Services22.48.221.97.4Foster Care9.82.412.03.0Learning Services10.00.97.90.1Childrens Services42.

252、211.541.810.5Less unallocated Group costs124.337.9123.335.6(5.4)(4.9)124.332.5123.330.726 CareTech Holdings PLC Annual Report and Accounts 2015Financial ReviewThe Group has a platform for further Acquisitions and GrowthChildrens Home in Wales.As set out in the Chief Executives statement and note 4 t

253、o the Accounts,we are again reporting segmental information for the financial year and last year which includes information on client capacity and revenue for each segment with the addition of Learning Services last year.The continued development of our care pathways and a growing range of service o

254、ptions has led to the proportion of Adult Learning Disabilities revenue moving from 60.2%in 2014 to 60.9%in 2015 and EBITDA before Group costs from 63.5%in 2014 to 64.6%in 2015.The Young People Residential services total revenue has risen by 2.3%with Mental Health falling by 12.3%,Foster Care fallin

255、g by 18.3%and Learning Services rising by 26.6%.Their total proportion of the EBITDA before Group costs has come down from 36.5%in 2014 to 35.4%in 2015 due mainly to the higher margin generated by the Adult Learning Disabilities Division Services.Underlying EBITDA and total EBITDAUnderlying EBITDA h

256、as grown by 5.9%from 30.7m in 2014 to 32.5m in 2015.Underlying EBITDA margin has increased from 24.9%to 26.1%mainly due to the higher rate of margin in the Adult Learning Disabilities Services.The Adult Learning Disabilities,Mental Health and Young People Residential Services segments have higher ma

257、rgins but normally require considerable capital expenditure to increase capacity,whilst Foster Care operates at a lower margin in part because it does not require capital expenditure to increase capacity.Administrative expenses,before depreciation and share-based payments charges were 15.2m(2014:15.

258、9m)and decreased by 0.7m during the year.In 2014 they represented 12.9%of Group revenue and in 2015 this further improved to 12.2%of Group revenue.There has been a considerable effort in the year to reduce administrative expenses with further back office systems centralisation and procurement succes

259、ses for the Group.The reconfiguration of services is a central part of the Boards strategy to grow organically.It enhances average fee rates and maintains the Groups reputation as a provider of highest quality of care.The number of employees in management and administration has increased by 21.The T

260、ime and Attendance system has been implemented across all of the residential services in the year which will further our back office centralisation and ensure that staff are paid more accurately and quickly,as well as giving reliable data on staff rotas and attendance in each service.Total EBITDA ha

261、s decreased from 28.3m in 2014 to 26.8m in 2015.Operating profit and profit before taxThe depreciation charge is 3.6m (2014:3.4m)and reflects the investment in land and buildings,motor vehicles and fixtures,fittings and equipment.After this charge and the share-based payments,underlying operating pr

262、ofit grew 5.5%to 28.8m(2014:27.3m).Total operating profit decreased by 13.2%to 17.8m(2014:20.5m).Net underlying financial expenses of 6.8m(2014:7.5m)decreased over the previous year due to the effects of the share placement monies and the new banking facilities,although there were additional finance

263、 leases taken out on new home vehicles during the year.Underlying profit before tax was 22.0m(2014:19.7m)which is an increase of 11.7%.Total profit before tax decreased by 24.8%to 9.4m(2014:12.5m).27 CareTech Holdings PLC Annual Report and Accounts 2015Strategic ReviewGovernanceFinancial StatementsT

264、axation and diluted earnings per shareThe effective underlying tax rate was 16.4%(2014:18.2%)and reflects managements expectations of future capital investment through organic developments and reconfigurations relative to available capital allowances and also reflects the impact of the reduction in

265、the main rate of corporation tax in the year.The weighted number of shares in issue rose by 11%due to the share placement whilst the underlying diluted earnings per share rose to 31.79p in 2015 from 31.01p in 2014.Basic and diluted earnings per share decreased by 42.2%to 13.80p and 13.80p respective

266、ly(2014:23.86p basic and 23.85p diluted).DividendsOur policy has been to increase the total dividend per year broadly in line with the movement in underlying diluted earnings per share.The final dividend will therefore increase to 5.60p per share(2014:5.40p),bringing the total dividend for the year

267、to 8.40p(2014:8.00p),a growth of 5.0%.Dividend cover for 2015,based upon diluted earnings per share before non underlying items is 3.78 times(2014:3.87 times).Non underlying itemsAs more fully explained on the face of the Consolidated Statement of Comprehensive Income and in note 5 to the Accounts,t

268、he Directors have separately disclosed a number of non underlying items in order to improve understanding of the underlying trading performance achieved by the Group.Total non underlying items represent a charge of 10.9m(2014:6.8m)and the principal items are the amortisation of intangible assets and

269、 integration and reorganisation costs plus costs associated with the new banking facilities.Cashflow and net debtThe cashflow statement and movement in net debt for the year is summarised below:Net debt at 30 September 2015 of 158.5m(2014:166.1m)has decreased by 7.6m during the financial year,with a

270、n investment of 16.6m in acquisitions and capital improvements during the year.2015m2014mUnderlying EBITDA 32.530.7(Increase)in working capital(1.7)(0.2)Cash inflows from operating activities30.830.5Tax paid(1.3)(0.3)Interest paid(6.7)(7.1)Dividends paid(4.2)(2.4)Acquisitions and capital expenditure

271、(16.6)(10.3)Share placement19.8Cashflow before adjustments21.810.4Non underlying cashflows including derivative financial instruments(14.2)(8.0)Movement in net debt7.62.4Opening net debt(166.1)(168.5)Closing net debt(158.5)(166.1)Non underlying items had a cash outflow effect of 14.2m(2014:8.0m)bein

272、g payment of acquisition and integration costs and payments made under onerous contracts.Underlying cash inflows from operating activitiesThe 30.8m(2014:30.3m)cash inflow from operating activities,before non underlying items,represents a 95%(2014:98%)underlying EBITDA cash conversion ratio.Interest

273、and dividend cashflowsInterest paid of 6.7m(2014:7.1m)is reflective of the net financial expenses per the Consolidated Statement of Comprehensive Income,whilst dividends paid are consistent with the relevant section earlier in the review.28 CareTech Holdings PLC Annual Report and Accounts 2015Financ

274、ial ReviewcontinuedShare placementThe Group raised Gross Funds of 21m through a placing of 10,000,000 shares at a price of 2.10 pence per share in March 2015.Existing shareholders and new shareholders plus the management team subscribed to the placing.The intention is to use the placing proceeds wou

275、ld be deployed on acquisitions within approximately 12 months of the issue.Acquisitions and capital expenditureDuring the year we invested total funds of 16.6m(2014:10.3m).The Group acquired Spark of Genius for a total consideration which may rise to 9.23m comprising an initial payment of 7.48m in c

276、ash and an earn out of up to 1.75m.It also acquired Dawn Hodge Associates for an aggregate consideration of 1.1m.After the year end we acquired Roc North West Limited for a total consideration of 11.425m,which utilises the whole of the placement proceeds.Further details of the acquisition are explai

277、ned in the Chief Executives Statement and Performance Review as well as in the notes to the financial statements.Capital expenditure of 9.9m includes 6.0m to update our portfolio of assets.Banking arrangementsThe Group is pleased to have continued its strong relationships with Royal Bank of Scotland

278、,Lloyds Bank,Santander and Allied Irish following the last refinancing in July 2012.In July 2015,the Group agreed improvements to its banking facilities.The previous facility was due to expire in January 2017 and this has now been extended to January 2019.The cost of borrowing has been reduced throu

279、gh a reduction to the interest rate and four loan repayments,which were due between 2015 and October 2016 amounting to 21.6m,have been deferred.In addition,there is a new uncommitted accordion facility of up to 30m which,together with the deferral of loan repayments gives further support to the Grou

280、ps acquisition strategy.As part of the additional financing the Groups current freehold property portfolio was valued independently at 294m in October 2015.At 30 September 2015 the Group has available bank facilities totalling 195m which are sufficient,with cashflow from operating activities,to fund

281、 present commitments.OutlookThe Group is now in an even stronger position to continue as a pioneering provider of specialist social care services in a fragmented,large and growing UK market.Michael HillGroup Finance Director20 January 201629 CareTech Holdings PLC Annual Report and Accounts 2015Strat

282、egic ReviewGovernanceFinancial StatementsFarouq Sheikh has been a key architect in CareTechs growth,having been co-founder of the Group and involved in the vision and strategy from the outset in 1993.With a background in law and a good understanding of finance and commerce,Farouq has been instrument

283、al in securing debt and equity funding for the Group as well as leading the management team in winning a number of long-term contracts from local and health authorities.Farouq is a leading business entrepreneur,philanthropist and investor within the UK.Farouq has initiated and overseen the successfu

284、l equity investments and the subsequent exits for 3i Group PLC(in 1996 and 2002)and Barclays Private Equity (in 2002 and 2005).His intimate knowledge of the marketplace,and his commercial and negotiating expertise assisted in the Groups growth.Under his stewardship,CareTechs earnings per share has g

285、rown significantly from 4.1p in 2005 to 31.31p in the current financial year.Farouq has been presented with a number of Entrepreneur of the Year awards by prestigious organisations including Laing and Buisson,Coutts Bank and Ernst&Young.He also presents widely at healthcare conferences,raising aware

286、ness of the learning disability sector.As Patron and Enterprise Fellow of the prestigious Princes Trust and as a member of the Mosaic National Advisory Board,Farouq supports young people by passing on his experience and expertise to inspire the next generation of entrepreneurs.Haroon Sheikh,a London

287、 University graduate,is one of the UKs leading entrepreneurs,philanthropists and community figureheads and one of the founders of CareTech.Haroon brings commercial acumen,related industry experience and property knowledge which has been essential in the growth of the business.As Chief Executive Offi

288、cer,he is actively involved in the day-to-day running of the business and over time has been instrumental in nurturing and supporting the senior management team,which comprises disciplines in care,commerce and property.He has a deep commitment and passion to delivering high-quality care and support

289、to people with a learning disability.In 2008,Haroon and his brother Farouq were winners of the highly valued Coutts Family Business Prize and widely applauded for the quality and social integrity of the company they created.Haroon is Patron and Enterprise Fellow of the Princes Trust and is also Vice

290、 Chair of the UK Advisory Council of the British Asian Trust under the patronage of HRH Prince Charles.Haroons most recent social enterprise was establishing the COSARAF Charitable Foundation to benefit communities and individuals in the UK and abroad.As trustee for International Development,Haroon

291、established the COSARAF Kenya Feeding Project which supports the feeding of over 700 women and children daily as well as supporting the drilling of boreholes in various rural villages.Michael qualified as a chartered accountant with Deloitte in 1975 and then did an MBA before joining Kimberley Clark

292、 as a Financial Analyst managing marketing projects.Michael then had senior financial roles in retailing with the launch of Next,the Electricity privatisation and as Finance Director of quoted Mersey Docks.He was involved from 2001 with the Care Charity,Community Integrated Care as a Trustee and the

293、n Director of Finance and from 2006 as Finance Director of National Fostering Agency.Michael joined CareTech in 2010 to establish the Foster Care division and oversaw its growth.He became Group Finance Director on 2 August 2011 and he is also Company Secretary.Farouq Sheikh Executive Chairman(aged 5

294、7)Haroon Sheikh BSc Chief Executive Officer(aged 59)Michael Hill Group Finance Director(aged 64)30 CareTech Holdings PLC Annual Report and Accounts 2015Board of DirectorsAn experienced and driven corporate boardAfter graduating from University College Dublin with a Bachelor of Commerce Degree,Karl t

295、rained as a chartered accountant with KPMG in Dublin.He has worked in the corporate finance departments at a number of merchant banks and stockbrokers,latterly at Credit Lyonnais Securities for seven years and Robert W.Baird for two years until June 2002.Karl set up Ashling Capital LLP in December 2

296、002 to provide consultancy services to quoted and private companies.He sits on a number of AIM quoted and private company boards.Mike has a significant track record in the social care,health and disability sectors.For five years he was Director of the National Disability Team,responsible for policy

297、and practice for disabled students in higher education.Mike was Director of Operations for the Disability Rights Commission for two years and has been Chief Executive Officer of ecdp,an Essex-based user-led disability organisation,since October 2007.Mike spent nine months as acting Chair of a large

298、acute hospital trust in Essex and has previously chaired an expert panel on Access to Work,the Governments flagship disability employment programme.Mike has been awarded an Honorary Doctor of Education for disability leadership from Anglia Ruskin University.Jamie has a strong track record in City co

299、rporate and investor relations.Having started his career with Touche Ross,Jamie became an Investment analyst with Parsons&Co.(latterly Allied Provincial Securities)in 1978 and was an Extel rated analyst.Following this he joined Brewin Dolphin in 1996 and in 2011 he became Head of Brewin Dolphins Cor

300、porate Advisory&Broking Division and led the demerger of Brewin Dolphins investment banking activities through a merger with Madrid-based asset manager and M&A house N+1,to create N+1Brewin.He became Chief Executive Officer of the new business in 2013,latterly overseeing the subsequent merger with S

301、inger Capital Markets.Jamie is a senior advisor to Cantor Fitzgerald Europe and a Non-Executive Director of 21st Century Technology plc.With over 30 years in the City,Jamie has a wealth of experience in advising both institutional investors and corporate clients.Karl Monaghan Non-Executive Director(

302、aged 53)Dr Mike Adams OBE Non-Executive Director(aged 44)Jamie CummingNon-Executive Director(aged 65)31 CareTech Holdings PLC Annual Report and Accounts 2015Strategic ReviewGovernanceFinancial StatementsBoard and Committee meetingsThe Board meets in formal session regularly,usually once each month,a

303、nd members are supplied with financial and operational information in good time for scrutiny in advance of these meetings.The Directors attended the following meetings in the year to 30 September 2015:BoardAudit CommitteeRemuneration CommitteeCare Governance&Safeguarding CommitteeFarouq Sheikh104*Ha

304、roon Sheikh101*1*Michael Hill102*42Karl Monaghan10243Mike Adams10233Jamie Cumming9143*by invitation.What decision-making responsibilities does the Board have?Matters which are reserved to the Board for specific consideration and decision include:financial reporting and controls including statutory m

305、atters such as the approval of final and interim financial statements and dividend declarations;Board membership and other senior,key personnel appointments;review of corporate governance arrangements;Group strategy matters including the approval of annual budgets,acquisitions and disposals;review o

306、f the processes for monitoring and evaluating risk and the effectiveness of the Groups system of internal control and operational efficiency;review and supervision of treasury and financial policies;and shareholder communications.Matters are delegated to Board Committees,individual Directors or exec

307、utive management where appropriate.The Directors believe the Board is soundly constituted although,at this stage of the Groups development,it is felt the functions of a Nominations Committee can be adequately fulfilled by deliberation of the full Board;this will nevertheless be kept under review.Whe

308、n the need for an additional Non-Executive Director is identified the Board appoints advisers to nominate experienced relevant and appropriate candidates.Board members meet the candidates and come to a collective view on appointments.Who is on the Audit Committee and what do they do?The Audit Commit

309、tee comprises Karl Monaghan(Chairman),Mike Adams and Jamie Cumming.The Group Finance Director and representatives of the external auditor attend meetings by invitation as required.The Committee meets at least twice each year and receives reports from the companys management and external auditor rela

310、ting to the annual and interim accounts and the accounting and internal control systems throughout the Group.The Committee has direct and unrestricted access to the external auditor and reviews all services being provided by them to evaluate their independence and objectivity,taking into considerati

311、on relevant professional and regulatory requirements in order to ensure that said independence and objectivity are not impaired by the provision of permissible,non-audit services.The Committee has carefully considered the level of non-audit services and have concluded that this does not impact on th

312、e independence of the auditors.Details of the amount paid to the external auditor during the year,for audit and other services,are set out in note 6 to the financial statements.Do we comply with the UK Corporate Governance Code?The CareTech Board of Directors(the“Board”)remains committed to achievin

313、g the highest standards of integrity,ethics,professionalism and business practice throughout its operations.We do not comply with the UK Corporate Governance Code.However,we have reported on our corporate governance arrangements by drawing upon best practice available,including those aspects of the

314、UK Corporate Governance Code we consider to be relevant to the company and best practice.This sets the tone for corporate behaviour and helps make our governance meaningful and focused on improving our business and protecting Shareholder Value.Who is on our Board?As Executive Chairman,Farouq Sheikh

315、leads the Board and is responsible for its effective running.The Chief Executive is Haroon Sheikh and Michael Hill is the Group Finance Director.The Directors biographies appear on pages 30 to 31 and detail their experience and suitability for leading and managing the Group.Karl Monaghan,the Senior

316、Independent Director,Mike Adams and Jamie Cumming are the three Non-Executive Directors and the Board considers each of them as independent.Collectively,the Non-Executive Directors bring a valuable range of expertise and experience in assisting the Group to achieve its strategic aims.In the furthera

317、nce of their duties,all Directors are able to take independent professional advice at the expense of the company and those newly-appointed are made aware of their responsibilities by the Company Secretary.The Board approves the appointment and removal of the Company Secretary.All Directors are requi

318、red to submit themselves for re-election at least every three years and new Directors are subject to election by shareholders at the first opportunity following their appointment.How do we deal with conflicts of interest?Following amendments to the Companys Articles of Association in 2008 to reflect

319、 certain provisions of the Companies Act 2006 relating to conflicts of interest that came into force on 1 October 2008,the Board will follow a specific procedure when deciding whether to authorise a conflict or potential conflict of interest.Firstly,only independent Directors(i.e.those that have no

320、interest in the matter under consideration)will be able to take the relevant decision.Secondly,in taking the decision the Directors must act in a way they consider,in good faith,will be most likely to promote the companys success.In addition,the Directors will be able to impose limits or conditions

321、when giving authorisation if they think this is appropriate.It remains the Boards intention to report annually on the companys procedures for ensuring that the Boards power of authorisation in respect of conflicts is operated effectively and that procedures have been followed.32 CareTech Holdings PL

322、C Annual Report and Accounts 2015Corporate Governance Report We have held several useful meetings with regulators and also invited key regulation managers to attend our Care Governance and Safeguarding Committee.The Committee is seen as a pioneering initiative that has won friends and encouragement

323、from regulators and commissioners alike.The Committee brings Non-Executive Directors into a much closer relationship with our everyday work and they have adopted a robust scrutiny approach to care practice.This in itself has had a positive impact on care quality and the executive team has been encou

324、raged to introduce quality initiatives across the company.The Group has 125 adult services regulated by the Care Quality Commission(CQC)who assess the services against approved essential standards of quality and safety.The regulators test and publicly record whether services are compliant or non-com

325、pliant against those standards.The new monitoring system has four levels of CQC reporting outcomes and has been applied so far by CQC to 40%of the Groups Adult Services.The National distribution across the four outcomes is shown in the table below with 92%of services being either Good or a service w

326、hich has a requirement which needs to improve to achieve good.Above Good is Outstanding for 1%of services and below is Inadequate for 7%.For the Groups services the published reports are as follows with all the services in the middle two outcomes:RatingsOutstandingGoodRequires improvementInadequateN

327、ational1%59%33%7%Group0%69%31%0%Adult services in Wales are regulated under different national legislation and are not currently rated on any form of scale,though all are compliant.Our Children division is regulated by the Office for Standards in Education(Ofsted)in England and these services are ra

328、ted as Outstanding or Good under the old monitoring system.Since April 2015 for Residential Services there is no longer an overall rating and services are rated under three domains and the Group has had seven published reports.The Fostering services in England are regulated by Ofsted and one is rate

329、d Outstanding and two are rated Good.In Wales the services are regulated by the Care and Social Services Inspectorate Wales(CSSIW)and are not currently rated on any form of scale.The Care Inspectorate for Scotland who regulate both Adults and Children Services have the majority of the Groups rated R

330、esidential Services as Excellent or Very Good for both the established services and the acquired services in Scotland.The Care Governance and Safeguarding Committee has oversight of all issues and reports relating to the well-being of service users,commissions enquiries into matters of concern and e

331、nsures that the Executive Team operates to the highest possible level of professional care standards.Throughout the past year the Care Governance and Safeguarding Committee has invited operational managers,regulators and local safeguarding lead officers to attend its meetings.The Care Governance and

332、 Safeguarding Committee works in close association with the Groups internal regulatory compliance team who operate across all divisions,reporting direct to the CEO.Who is on the Remuneration Committee and what do they do?The composition and role of the Remuneration Committee is set out in the Remune

333、ration Report on pages 37 to 38.Also detailed in that report are Directors remuneration,shareholdings and share options scheme information.A key Group strategy is to attract and retain talented and committed personnel,at every level of the organisational hierarchy and the Committee aims to foster remuneration philosophy,policies and procedures to achieve this.The Group operates in a highly competi