Caretech Holdings PLC (CTH) 2014年年度報告「AIM」.pdf

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1、every dayExtraordinarydaysAnnual Report and Accounts 2014PurposeAn established,reputable and innovative social care provider,the CareTech family of companies offer a comprehensive and complete outsourcing provision for social care commissioners.Serving the high acuity social care population we deliv

2、er safe,reliable support to children and adults through a range of service options and provide solutions that are both individual and tailor made to each of our service users.We provide care and support for people with learning disabilities,individuals who have or are recovering from mental illness,

3、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 support options.Our children services cover assessment,residential care,education and fostering options,including speci

4、alist provision for very complex young people.We carefully and professionally support any child irrespective of their reasons for being in public care.One of our national specialities is provision for children and young people who present with sexually offending behaviours or who have emotional and

5、behavioural disorders.Our comprehensive service includes education in Ofsted registered schools of very high quality.We provide transition services for young people leaving children services as they enter adult care and for adults who are making the move into their own home after a lifetime in care

6、settings.For many years we have had staff undertaking apprenticeships through third-party providers and we now offer care apprenticeships and pre-employment training ourselves.Front cover:Our client Sadie McMorran being taught carpentry.Focusing on safe reliable care we deliver exceptional standards

7、 of high quality individual support ensuring that our service users experience extraordinary days,every day.Contents Strategic Review1 Highlights2 Group at a glance8 Chairmans Statement10 Strategic Report18 Chief Executives Statement and Performance Review24 Financial Review Governance28 Board of Di

8、rectors30 Corporate Governance Report33 Directors Report 35 Remuneration Report 37 Statement of Directors Responsibilities in respect of the Annual Report and the Financial Statements Financial Statements38 Independent Auditors Report to the members of CareTech Holdings PLC39 Consolidated Statement

9、of Comprehensive Income 40 Consolidated Balance Sheet41 Consolidated Statement of Changes in Equity42 Consolidated Cash Flow Statement43 Notes to the Financial Statements68 Company Statement of Changes in Equity69 Company Balance Sheet 70 Company Cash Flow Statement71 Company Notes76 Directors and A

10、dvisersFinancial and Operational Highlights123.3mRevenue increased by 7.9%(2013:114.3m)19.7mUnderlying profit before tax(ii)increased by 12.6%(2013:17.5m)30.3mCash inflows from operating activities before non-underlying items(2013:23.9m)with net debt of 166.1m (2013:168.5m)275mProperty portfolio ind

11、ependently valued30.7mUnderlying EBITDA(i)increased by 16.2%(2013:26.4m)31.01pUnderlying diluted earnings per share(ii)increased by 13.1%(2013:27.43p)2,074 placesOverall care capacity reduced by 42(iv)(2013:2,116)5.40pFinal dividend per share increased by 15.4%(2013:4.68p)Statutory Financial Highlig

12、hts28.3mEBITDA(v)Decreased by 29%(2013:39.9m)23.85pDiluted earnings per share Decreased by 50%(2013:47.54p)(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 sha

13、re are stated before non-underlying items.(iii)EBITDA is operating profit stated before depreciation,share-based payments charge and amortisation of intangible assets.(iv)Overall capacity has reduced by 42 reflecting the net of 63 additional beds less 12 beds withdrawn for reconfiguration,30 places

14、less in small supported living packages and 63 reduction for carers not currently accepting children.(v)These statutory highlights have decreased following a non-recurring significant increase in 2013 as a result of the business activity in the year.20.5mOperating profit(v)Decreased by 38%(2013:32.9

15、m)26.1mCash inflows from operating activities after non-underlying items(2013:21.6m)Strategic ReviewGovernanceFinancial Statements1 CareTech Holdings PLC Annual Report and Accounts 2014Meeting the demands of the UK social care marketWe have national coverage in a highly fragmented UK social care mar

16、ket.The total market value is now estimated,using an updated model(Laing and Buisson 2013)to be worth 7bn for children services and 8bn for the care of younger adults(below 65 years of age)in the learning disability and mental health categories.The private sector share of this market has developed t

17、hrough 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 Learning DisabilitiesThe care and support of people who have learning disability has evolved over the past decade into

18、 a broad division between those people requiring specialist and more sophisticated support and those who can be helped to live independently.CareTech has always operated at the highest acuity range on the social care spectrum,providing individual tailor made solutions for people living in their own

19、homes,residential care or independent supported living schemes.Although at a slow rate of change,adults with learning disabilities are increasingly being provided with direct funding to enable them to purchase their own care and support.We already work with service users to deliver self-directed sup

20、port packages and see this as an important aspect of our service model.For many people,and especially those 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 towards a mor

21、e enabling,modern type of service.We increasingly offer several types of supported living and packages of individualised self-directed support to people in their own homes.Foster Care“Foster Care is on a rising trend in terms of both numbers placed in foster care and expenditure by local authorities

22、.”Laing and Buisson 2013.Foster Care is commonly recognised as the best care solution for“looked after”children.Except in special circumstances,children thrive in foster care where they are supported within an ordinary family home and with trained foster carers.CareTech provides for both mainstream

23、and specialist foster care through small supportive groups across the UK.Provision includes a highly respected service for physically and intellectually disabled children as well as support for children with sensory impairments.However,not all complex or disadvantaged children need to come into care

24、 and there are many good reasons why they should be supported and monitored in the own family homes.We provide foster care family assessments and ongoing support to children who remain with their birth families and in their family home.Mental HealthThe OECD recently published a report stating that m

25、ental Illness accounts for 4.5%of the UK GDP or approximately 70bn each year.NHS budgets for intervention in mental illness are stretched and they increasing rely on early discharge of patients to reduce cost.CareTechs mental health development team works in partnerships with the NHS and social serv

26、ice departments to ensure a successful transition out of acute care,delivering pathways to ordinary life.We also have an outstanding track record for diverting people away from acute care and supporting them in their own homes.For many people mental health long stay hospitals were a place of refuge

27、but that opportunity is now long gone.Those same people are increasingly finding themselves within the criminal justice system and often as members of the long-term prison population.It is in everyones interest that those people with ongoing low-level mental health conditions return to an ordinary c

28、ommunity life with the support that they need to make a positive contribution to society.CareTechs highly effective care teams are developing new ways to offer support under these circumstances and we believe that this will be an important growth platform in years to come.2 CareTech Holdings PLC Ann

29、ual Report and Accounts 2014Caring every dayAdult ServicesChildren ServicesGroup at a glanceFive specialist operating divisionsYoung People Residential ServicesWhile foster care remains the best choice for a majority of looked after children,a significant number of children and young people need to

30、live for a while in specialised residential services.There is a wide range of reasons for this and of course many different styles of care that are required.These services are highly intensive operations with exceptional staff ratios and generally include on site or dedicated educational facilities.

31、Consequently they are necessarily high cost services where we aim for an intensive programme of care and 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

32、 wise to do so.Learning ServicesThis Government and previous ones have paid great attention to unemployment,especially among young people.Several years ago we saw a return to the apprenticeship model for re-skilling the workforce and driving higher vocational and educational standards amongst young

33、adults.Within the Care Sector we recognised that a poorly skilled workforce was getting in the way of top quality care so CareTech had already invested in a first class training division with award winning programmes to develop our care staff.The opportunity to acquire the majority of the trade and

34、assets of Elmfield Training Limited gave the Group our new Learning Division which has already made an impact in care and beyond.It trades as EQL Solutions Limited.Learning Services addresses an adult social care workforce in England of some 1.16m people,905,000 of whom work within the independent s

35、ector(Skills For Care 2013).We have less reliable numbers for the children services workforce but EQL solutions has already begun to recruit apprentices within CareTechs own Children Services Division.There are 17,300 organisations providing Adult Social Care in England and the majority of these are

36、 operating at far too low a scale to deliver their own training or apprenticeship programmes.EQL Solutions has significant market presence in social care and is well positioned to support both smaller companies as well as corporate providers.In the 2012/13 academic year there were 510,000 apprentice

37、ship starts.This is 10,000 less than the number of starts in the 2011/12 academic year,but 231,000 more than in the 2009/10 academic year.A much higher proportion of apprenticeship starters are now aged over 25(45%in 2012/13)compared with 2009/10(18%)and years previous to this.The majority of people

38、 starting apprenticeships choose frameworks in the service sectors,such as business administration and retail.However,there is a recognised need within the care sector that has not yet been developed.The majority of apprenticeship starters were female(55%)and there is a widespread commitment to addr

39、ess this as a failing within the historical approach.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(2014/15)academic year.A day at the seaside collectin

40、g litter!Strategic ReviewGovernanceFinancial Statements3 CareTech Holdings PLC Annual Report and Accounts 2014Cooking at St Agnalls.Pioneering every day4 CareTech Holdings PLC Annual Report and Accounts 2014Group at a glanceClient focused innovative care pathway approachCare and Support is character

41、ised 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.Many years ago we began to describe our services as a Care Pathw

42、ay,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 independence.This is great for service users,rewarding for our staff

43、 and strongly supported by those who commission and sponsor our services.Adult Learning DisabilitiesCare capacity 20141,4502013:(1,423)Mental HealthCare capacity 20141512013:(161)Foster Care Care capacity 20143202013:(383)Young People Residential ServicesCare capacity 20141532013:(149)Learning Servi

44、cesAdult ServicesSocial care services for adults over the age of 18Children ServicesSocial care services for children and Young People up to the age of 18Split by:Residential care Independent supported living Community support servicesSplit by:Residential care Independent supported living Community

45、outreachSplit by:Residential care of children and young people Family Assessments in the home Split by:Residential care of children and young people Education services for children and young peopleSplit by:Pre-employment programmes Development programmes ApprenticeshipsStrategic ReviewGovernanceFina

46、ncial Statements5 CareTech Holdings PLC Annual Report and Accounts 2014Musical day at the Martello Centre.Building relationships every day6 CareTech Holdings PLC Annual Report and Accounts 2014Group at a glancePlacing people in the care of organisations that you can trustThe business of care is pred

47、icated 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 mindful

48、 that most social workers will prefer to place people in the care of organisations that they can rely on and we work hard to sustain those relationships through the difficult environment of local authority austerity.Quality and Expertise Quality is not simply compliance with the requirements of regu

49、lation,though that remains important.The CareTech way 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.Innovative Care Pathway CareTech was one of the first care organ

50、isations to describe its approach as a Care Pathway.We have delivered many practical innovations such as the transitions programme and new approaches to the support of people moving into their own home.Currently we are developing modern and thoughtful solutions to self-directed and client determinat

51、ion that will set the pattern for progressive social care.Strong Brand There are many providers offering care and support.Many are small innovative companies while others are large and anonymous.In CareTech we offer a sound,reliable service with the benefits of scale,operating within friendly and tr

52、usted local service businesses.National 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 conferences and publications where the CareTech view is frequently sought and taken into

53、account.Strategic ReviewGovernanceFinancial Statements7 CareTech Holdings PLC Annual Report and Accounts 2014I am pleased to present our Annual Report and results for the year ending 30 September 2014.Once again I can report on strong growth on all of our key business metrics.The successful pursuit

54、of our business and social care strategies lead to a solid foundation for further development as we enter our 22nd year of public service.The CareTech Group has earned an enviable standing as a safe,consistent and stable partner for local authorities and health commissioners as they increasingly out

55、source care services for which they have a legal duty.The Health and Social Care Information centre shows that overall local government spending remained the same as the past year and that the average cost of caring for adults has remained virtually unchanged.Spending on adults with learning disabil

56、ity has shown a small increase.However,we are seeing an important realignment in the pattern of funding on social care with increased spending on those people with higher acuity levels,CareTechs speciality,and a compensatory reduction of funding for people with less complex issues.Spending on“looked

57、 after”children shows a steady and consistent increase.This pattern is in line with our expectation and confirms our strategic approach to remodel provisions to increase capacity at the more complex end of our client groupings.In addition,we have seen growth in the drive toward more personalised ser

58、vice delivery and purchasing power being transferred to clients by way of Direct Payments.We see this as a significant development and one that will determine the pattern for longer term commissioning.In anticipation of this change,our management team has set in motion a very progressive shift towar

59、d the principles of personalisation in line with Government and local commissioner policies.This puts us in a good position to ensure continuing growth of our businesses and an increase in market share.DividendThe Groups policy has been to increase the total dividend per year broadly in line with th

60、e movement in underlying diluted earnings per share.That growth in 2014 was 13.1%so the Board has proposed a final dividend of 5.40p(2013:4.68p)per share bringing the total dividend for the year to 8.00p(2013:7.00p)per share.The final dividend will be paid,subject to shareholder approval,on 11 May 2

61、015,with an ex-dividend date of 5 March 2015 and an associated record date of 6 March 2015.Our BoardOn 27 September 2014 Stewart Wallace,Executive Director,retired from the Board and Care Governance and Safeguarding Committee on reaching the age of 65.No further changes have occurred to the Board,Re

62、muneration Committee,Care Governance and Safeguarding Committee or Audit Committee.It is intended that Stewart will continue to provide input to the Company on an advisory basis.I am immensely grateful to Stewart for his key role in the development of the Groups services over the past 14 years.Mike

63、Adams,a Non-Executive Director and Chair of the Care Governance and Safeguarding Committee,has recently been awarded an Honorary Doctor of Education for disability leadership from Anglia Ruskin University.Our PeopleThe Groups divisional structure has been further developed with the two business segm

64、ents of Adult services and Children Services having underneath them the five Care Pathways.I am extremely grateful to all of our managers and front-line colleagues for their exceptional commitment during the year.They have continued to deliver top quality services despite the pressure being placed o

65、n us from social services to reduce costs.Our continuing growth,measurable success and forward-looking approach is a tribute to the hard work and dedication of staff and managers throughout the organisation.I am very grateful for the outstanding contribution of our support teams and administrators a

66、s much as the more obvious contribution of our front line colleagues.Farouq Sheikh Chairman8 CareTech Holdings PLC Annual Report and Accounts 2014Chairmans StatementA year of further progressI thank all of them for ensuring that we maintain the right balance between care and commercial sense.I am ve

67、ry positive about the coming year and the opportunities it will bring.We shall see the consolidation of our current developments,new ideas coming through our staff and management engagement programmes in addition to the systematic growth of mainstream services that have served us well over the years

68、.Outlook and ProspectsThe underlying performance of our business is strong and underpinned by demographic trends within our target markets.Improvements in the regulatory regime,commissioner attitudes and policy development favour growth for the best providers across the whole social care spectrum.We

69、 see a particular opportunity with mental health where the level of historic underfunding is now being addressed and we are quite excited about the proposed merger of health and social care budgets which has won all the support of all political parties.In our view this will drive a better operating

70、environment and enlarge the commercial opportunity for larger providers operating a comprehensive model of care.In our view,the coming election year will give additional emphasis on under spending across the health and social care environment.There will be new opportunities for ambitious providers w

71、ho are ready to work in partnership with commissioners to deliver creative solutions that will drive better value for the available resources.We believe that our robust infrastructure and strong management team are well placed to deliver the solutions that commissioners want.Farouq SheikhChairman14

72、January 2015 EQL staff training apprentices.9 CareTech Holdings PLC Annual Report and Accounts 2014Strategic ReviewGovernanceFinancial StatementsThe Care Market in which the Group operates is a UK Market worth 15bn per annum across the four specialist operating divisions of Adult Learning Disabiliti

73、es,Mental Health,Young People Residential Services and Foster Care.Our MarketCareTech has national coverage in a highly fragmented UK social care market.The total market value is now estimated,using an updated model(Laing and Buisson 2013)to be worth 7bn for children services and 8bn for the care of

74、 younger adults(below 65 years 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 an

75、d complex younger adults.Number of Looked After in England are Local Authority Statistics at 31 March annually and are issued by the Department for Education(https:/www.gov.uk/government/statistics/children-looked-after-in-england-including-adoption-2)The market is growing in value by 5.5%per annum.

76、Our new division,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).We have less reliable numbers for the children services workforce but EQL Solutions has already begun to recruit appren

77、tices within CareTechs own Children Services division.There are 17,300 organisations providing 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 has significant market presence in socia

78、l care and is well positioned to support both smaller companies as well as corporate providers.Social workers are quick to tell us that value for them and their clients is the ability to deliver agreed and tangible outcomes at the best possible price.We have found that they are happy to fund at a co

79、mmercial rate if they can be confident that a provider is able to deliver the required outcomes and move their client along the Care Pathway to a less expensive provision.This suits the CareTech approach,as a national provider with services that range from the intensive therapeutic model right down

80、to minimum community support using skilled care workers.Delivering this high value approach,along with safe and high quality care ensures our position as a leading provider with loyal and reliable commissioners.Adult ServicesAdult Learning Disabilities Residential care Independent supported living C

81、ommunity support servicesMental Health Residential care Independent supported living Community outreachChildren ServicesFoster Care Fostering Family Assessments in the home Young People Residential Services Residential care of children and young people Education services for children and young peopl

82、eLearning Services Pre-employment programmes Development programmes Apprenticeship10 CareTech Holdings PLC Annual Report and Accounts 2014Strategic ReportCreating sustainable value in our marketsPeople1.4m(85,000 cannot live independently)Market for residential learning disabilities and supported li

83、ving worth5.9bnMarket growth rate5.5%paPeople2.4%(of the UK population will be referred to a specialist psychiatric service)NHS/LA total spend on mental health is14.4bnMarket growth rate5.5%paPeople51,340Placed in foster care in EnglandPeople17,500Children in England looked after outside foster care

84、 People510,000Apprenticeship startsFoster care market across England worth1.1bnResidential childrens market across England worth1.0bnApprenticeship budget1.6bnMarket growth rate1.5%paMarket growth rate0.2%paMarket growth rate9.1%pa11 CareTech Holdings PLC Annual Report and Accounts 2014Strategic Rev

85、iewGovernanceFinancial StatementsLearningServicesFoster Care andFamily ServicesYoung PeopleResidential ServicesMentalHealthAdult LearningDifcultiesCareGovernanceCarepathwayExperiencedand committedmanagementStrongbrandSafeguardingCommitteeExtraordinarydays every dayNational presenceOur business model

86、 represents how we aim to generate revenue and profit from our operationsThe Groups business model is to operate throughout mainland Britain in England,Wales and Scotland to provide care to people of any age who are local authority or NHS funded where we are capable of offering an appropriate Care S

87、ervice.Our Business ModelDuring the period,the Group continued to develop and grow its four existing operating divisions,which come under the two outcome-based sectors of Adult services and Young People services.We have also acquired a new Learning services division.The growth going forward is under

88、pinned by the strong 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,specifical

89、ly 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.Setting the standard in quality of serviceAdult Learning DisabilitiesResidential care Independent supported living Community support serv

90、icesMental HealthResidential careIndependent supported livingCommunity outreachFoster Care FosteringFamily Assessments in the homeYoung People Residential ServicesResidential care of children and young peopleLearning ServicesPre-employment,development and apprenticeship programmes12 CareTech Holding

91、s PLC Annual Report and Accounts 2014Strategic ReportcontinuedA strategy to drive future growthSetting out our key strategic prioritiesWe shall continue to improve the quality and scope of our services,increase market share and grow shareholder value.Our StrategyOur understanding of the social care

92、market and our relationships with local authority commissioners is vital to this objective and we are confident in the strength of our position.However,we can always do more and the coming year will see a further significant expansion of our endeavours.This is driven by the complex financial positio

93、n 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 managers the CareTech front line teams are suppo

94、rted by a wide range of high level professionals such as social workers,nurses,therapists and psychologists.High qualityThe driver for social care is an organisations ability to deliver high quality care,with reliable outcomes at a fair price.We believe that the market has recognised that CareTech o

95、ffers 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 is to offer a strong national brand with local and regional service delivery points.This supports developmen

96、t 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 the UK are second to none.This is reinforced by our presence at major industry events where we have been relia

97、ble sponsors and commentators.However,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 services are in demand and occupancy has remained high despite fears of local authority austeri

98、ty 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 care in the foreseeable future.CareTechs own research indicates stronger growth in the more co

99、mplex end of social care,favouring the larger and best resourced provider organisations.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

100、policy.We have every reason to believe that growth will continue and the management team remains enthusiastic about the Groups future.13 CareTech Holdings PLC Annual Report and Accounts 2014Strategic ReviewGovernanceFinancial Statements2,0002,0502,1002,15020142013201220110255075100201420132012201102

101、5507510020142013201220110102030402014201320122011Our KPIs help us to measure the Groups performance against its strategy and objectives.Capacity2,074 places(2013:2,116 places)Mature estate occupancy92%(2013:92%)Blended occupancy86%(2013:84%)Underlying EBITDA30.7m(2013:26.4m)How this is calculatedThe

102、 Groups capacity is the total number of Adult Service and Children Service places that the Group is able to use 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 aft

103、er.Performance this yearOverall capacity has reduced by 42 reflecting the net of 63 additional beds now available,12 beds withdrawn for reconfiguration,30 places less in small supported living packages and a reduction of 63 for carers not currently accepting children.How this is calculatedThe Mature

104、 estate occupancy is the total number of Adult and Children Service Users placed in services that were open throughout the year.Performance this yearThe ratio has remained 92%for a number of years and reflects the long length of stay that the majority of service users have in our services.How this i

105、s calculatedBlended occupancy is the total number of Adult and Children Service Users actually placed as a%of the Groups total capacity and so reflects facilities undergoing development and reconfiguration.Performance this yearThe ratio has improved by 2%to 86%and reflects the additional beds in rec

106、onfigured services brought back into capacity and the reduction in fostering capacity where carers are unable to accept foster children currently.How this is calculatedUnderlying EBITDA is the Earnings Before Interest,Tax,Depreciation and Amortisation for the year excluding non-underlying items such

107、 as amortisation of intangible assets which are fully described in note(4)to the Financial Statements.Performance this yearThe underlying EBITDA has improved by 4.3m or 16.3%year on year.This reflects rent savings due to the business combination acquired in 2013 reduced by the reconfiguration work o

108、n those properties,and improved margin.14 CareTech Holdings PLC Annual Report and Accounts 2014Highly visible long-term income streamStrategic Reportcontinued05101520201420132012201101020304020142013201220110501001502002014201320122011Underlying profit after tax16.1m(2013:14.1m)Underlying diluted EP

109、S31.01p(2013:27.43p)Net debt166.1m(2013:168.5m)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 described in note(4)to the Financial Statements.Perfor

110、mance this yearThe underlying profit after tax has improved by 2.1m or 14.8%year on year.This reflects the rent savings offset by additional interest and improved margin,net of tax.How this is calculatedUnderlying diluted earnings per share is the underlying profit after tax(which is after adjusting

111、 for non-underlying items which are not considered to impact the trading performance of the Group)divided by the weighted number of shares which are fully described in notes(9)and(10)to the Financial Statements.Performance this yearThe underlying diluted earnings per share has increased by 3.58p at

112、13.1%year on year.This is the increase in underlying profit after tax partly offset by the increase in the number of shares to give a strong growth in earnings per share.How this is calculatedNet debt comprises the balance at the year end for cash and cash equivalents net of bank loans outstanding a

113、nd finance lease and hire purchase contract monies outstanding and is fully described at the foot of the Consolidated Cash Flow Statement on page 42.Performance this yearNet debt reduced by 2.33m or 1.4%between 30 September 2013 and 30 September 2014.Cash increased by 0.1m and bank loans reduced by

114、2.2m offset by an increase in leases and hire purchase contracts on new vehicles and IT equipment of 1.8m.15 CareTech Holdings PLC Annual Report and Accounts 2014Strategic ReviewGovernanceFinancial StatementsSocial care is not a high risk business proposition but there are several unique factors tha

115、t 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.CareTech approaches these issues with considerable care and exceptional diligence,building in quality and training

116、 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 management of all those processes that could expose us to risk.Our risksAll providers of health and social care are con

117、scious 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 service delivery is characterised by a mixture of a dedicated compliance team carrying out regular audits inspect

118、ion 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 overall number of people needing support will increase,and a smaller proportion of them will be placed into resident

119、ial 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.Our operational management teams are already focusing on the delivery of high quality care.As we move forward this wi

120、ll become increasingly specialised with the benefit of professional qualified care co-ordinators who will prepare and direct personalised care plans within the services.In October a Whistleblower put falsified material relating to a Mental Health facility on the Internet which was replicated by the

121、local press and online media.This reputational damage was resolved and later withdrawn from the Internet.Most service users 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 alread

122、y has a solid reputation for its high quality and flexible solutions.We are building this to a higher level and refining our organisational structure to build more rapidly on our successes to date.Service offer and user needsWe have to create and staff a service offering which matches to the needs o

123、f the service user and can be communicated to commissioners,so it is carefully recorded locally at every service in order to reduce the risk of service users moving to other service providers.Quality and safetyWe have to provide and deliver safe care of a high quality and the Group utilises Perry Sc

124、ott Nash to audit and report monthly on Health and Safety matters as well as all RIDDORS(Reporting of Injuries,Diseases and Dangerous Occurrences Regulations)so that all incidents are recorded and acted upon.Service valueThe service offer has to be provided to meet the needs of the commissioners at

125、a fair price and this is coming under increased scrutiny as commissioners regularly review value for money so the Group communicates frequently with its commissioners locally.ReputationThe Group has to have a reputation for delivering service that is good value and takes account of all risk.The Grou

126、p maintains a Risk Register which includes all key risks,including reputational risk,and how they are mitigated though quality of service and good communication with service users and Local Authorities.Growth fundingSo that the Group can keep growing adequate funding has to be anticipated and put in

127、 place and the Group ensures that all of its facilities are monitored and reviewed regularly in particular during its Budget and forecasting processes.Manage debtThe level of debt obtained to fund operations and ensure that growth can occur has to be carefully managed and the different forms of leas

128、ing and debt are reviewed quarterly when all of the covenants are also reviewed.16 CareTech Holdings PLC Annual Report and Accounts 2014Managing our risks and resourcesStrategic ReportcontinuedAdult ServicesChildren ServicesAdult ServicesResidential Care and Community SupportMental Health and Specia

129、list ServicesYoung PeopleResidential Services andEducationFoster CareLearning ServicesOur resourcesThe key resources that we require to provide care are:People to provide careWe need staff and carers who have appropriate skills and qualities to look after children or adults in need of care.People wi

130、th skills to manage,train and support our people who provide care.Skilled staff to provide the management and training to our people who provide care.Buildings,homes and landThe land and buildings to provide accommodation for residential services or supported living.Financial resourcesWe need financ

131、ial stability to be able to employ the right staff and to provide the right land and buildings.By order of the BoardFarouq SheikhChairman14 January 2015Corporate Direction and SupportIncorporates the Shared Services Centre,Human Resources,National Training Centre,Quality,Regulation and Compliance,Tr

132、easury and IT.Coppice Lodge,Dudley.17 CareTech Holdings PLC Annual Report and Accounts 2014Strategic ReviewGovernanceFinancial StatementsBusiness segmentsOverviewIt gives me great pleasure to report on another successful year that reflects the hard work of our management team,the enthusiasm of our s

133、taff 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.The Group has continued to develo

134、p and has made further encouraging progress during the year.ResultsRevenue of 123.3m(2013:114.3m)for the year to 30 September 2014 represented growth of 7.9%and generated underlying EBITDA growth of 16.3%to 30.7m(2013:26.4m).Underlying operating profit increased by 17.6%to 27.3m(2013:23.2m)and total

135、 operating profit decreased by 38%to 20.5m(2013:32.9m)due to a non-recurring significant increase in 2013 as a result of the business combination.Underlying profit before tax for the period was 13%higher at 19.7m(2013:17.5m)and profit before tax was 12.5m(2013:28.1m).Consolidation and creating new o

136、pportunitiesCareTech remains at the forefront of social care outsourcing and in the past year there has been an increase in working closely with commissioners and regulators as the whole system grapples with the changes that policy and financial pressure have brought.National public policy is a sign

137、ificant driver of local authority commissioning intentions and behaviour.For a number of years public policy has encouraged greater personalisation of health and social care for adults.Commissioners and leading providers are driving change that will mean offering people more choice and control over

138、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 our service users and follow closely the guidance from central government.Our key focus for delivering quality services and positi

139、ve 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 In 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

140、 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 disability who we can support toward independent living.Housing care and support We know that most people aspire to have a place of t

141、heir own,employment and ongoing support.We have structured our services,developing new provision and creative partnerships with housing providers to enable these aspirations to be achieved whenever possible.Self-directed support It is pivotal to government policy that adults and children receiving s

142、ocial care are fully engaged in the support that they require.With 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

143、 are fit to deliver the requirements of self-directed support.Quality 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 pri

144、ce.We have also learned a great deal from the experience of our NHS colleagues and developed a Dignity Test to ensure that our front line and administrative staff treat all our clients in ways that promote dignity.Haroon Sheikh Chief Executive Officer18 CareTech Holdings PLC Annual Report and Accoun

145、ts 2014A strong foundation for growthChief Executives Statement and Performance ReviewProgress in the yearThe year has seen continued progress as the Group concentrates on the introduction of innovative new services developed in partnership with local authority commissioners from within our existing

146、 portfolio of properties or through new properties either purchased or rented for service users.There have been a small number of property disposals during the year where the service was not meeting commissioner aspirations and a reconfiguration was not possible or economically viable.The Group has

147、developed the site in Dudley for the Children Services and the first service has recently opened.The second service is being developed on the same site and planning permission has been granted for the conversion of an existing building into a seven bedroom service for children with learning disabili

148、ties and a six bedroom childrens wheelchair accessible bungalow.Our Children Services have had significant growth in Scotland and there have been new services opened in Dumfries,Galloway and Fife.In addition a new education facility is being opened near Dumfries to support these children.In North Wa

149、les the Group has developed an Adult Learning Disability Service which is completed and awaiting registration.The Group also continues to realise the benefit of organisational improvements that were put in place over the past few years.We have continued to strengthen the management structure and imp

150、rove the efficiency of our processes following further investment in new systems which will continue through the next financial year.We are seeing the benefits of new executive appointments and the Clinical Director role is having a positive impact across the services.These improvements have put us

151、in a strong position to benefit from a number of the commissioning opportunities by working in partnership with the NHS and Local Authorities.During the year we introduced a new care system for Foster Care which has recently gone live and we also have a new Time and Attendance system which is being

152、implemented across all of the residential services in the coming months which will further our policy of back office centralisation.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

153、 of the commissioners requirements.These services are now even more extensive and focused on providing high quality care 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

154、Adult Services and Children Services.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 requirement for greater acuity service provis

155、ion.This ensures that CareTech is in a very strong position to address the demands of our evolving marketplace.Following the acquisition of our new Learning Services division,I am particularly delighted to report on the integration and development of our apprenticeship model.The team has already com

156、pleted pioneering work by developing the apprenticeship model in social care,with massive growth potential,but has also won a prestigious tender with the Department of Work and Pensions to develop a new model of mental health rehabilitation using the skills derived from working with apprentices.We r

157、emain 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 specialist services remain strong.Our residential care services for

158、children cater for young people with particularly difficult issues and offer a national service;with strong growth seen in Scotland.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 li

159、ving,balanced by renewed demand for more specialised residential care solutions.Opening of Coppice Lodge,Dudley by Ben Mould ably assisted by Haroon Sheikh(CEO),Dr Linda Cropper(Commissioning Engagement Manager,Dudley CCG)and Councillor Bryan Cotterill.19 CareTech Holdings PLC Annual Report and Acco

160、unts 2014Strategic ReviewGovernanceFinancial StatementsOur strategy is to offer a bespoke range of options so that we can maintain the Care Pathways that distinguish us from other providers.Overview of progressOur focus during the past year has continued to be on building on the acquisitions which e

161、stablished the Care Pathways whilst introducing innovative new solutions to meet the challenges faced by care commissioners.Capacity has reduced to 2,074 places principally because we have continued to reconfigure services.Occupancy levels within our mature services remain at a creditable 92%,or 86%

162、when taking into account our services under development and transition which is a 2%improvement on the previous year.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 a

163、s individuals who 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

164、help.Personalised 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 segments of Adult Services and Children Services comprise the following five

165、 care pathways.1.Adult Learning DisabilitiesRevenue74.2m(2013:73.9m)EBITDA22.6m(2013:18.5m)Capacity1,450(2013:1,423)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 c

166、lients 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.This includes adult residential care h

167、omes,independent supported living and community support services.The principal reason for the increase in EBITDA of 4.1m was the rent saving arising from the business combination in 2013,the reconfiguration of homes and their reopening late in the year.We have continued to work closely with commissi

168、oners and this has helped us to achieve our growth through the past year.We take a long-term view,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 pas

169、t year and will continue to meet the changing requirements of commissioners and families.The market 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 no

170、t an area of activity in which CareTech operates.Conversely,resources for those with the highest level of need is being maintained and increased in some local authorities.During the past year we have developed 63 beds through reconfiguration of existing residential services.Further new provision is

171、under development.2.Mental HealthRevenue7.3m(2013:6.5m)EBITDA2.5m(2013:2.2m)Capacity151(2013:161)Mental Health works in partnership with the NHS to ensure a successful transition out of acute care,delivering pathways to independence.We have an outstanding track record for helping people away from ac

172、ute 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.“Foster Care is on a rising trend in terms of both numbers placed in foster care and expenditur

173、e by local authorities.”Laing and Buisson,201320 CareTech Holdings PLC Annual Report and Accounts 2014Chief Executives Statement and Performance ReviewcontinuedThese services also had a reconfiguration of homes and a reopening early in the year.Community Mental Health has always been a critical but

174、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 but so is the immediate response by Government to one of the scandals of our age.There h

175、as been no 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 tasked

176、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 infrastructure to del

177、iver growth.It was very pleasing that our management team in Lyndhurst,a residential home,were awarded the Care Team of the Year award against stiff competition at the prestigious National Care Awards ceremony this year.3.Foster CareRevenue12.0m(2013:14.3m)EBITDA3.0m(2013:4.3m)Capacity320(2013:383)F

178、oster 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 assessments in the home.This trend is driven by cost considerations,where fostering is considerably less expensive t

179、han residential care and by perceived quality factors.It is generally held that fostering in an ordinary family 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 motiv

180、ation alongside preference by social workers to place within local authority services rather than the independent sector.In 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 Fos

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

182、 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%fee p

183、remium 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 the

184、ir 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 expe

185、nsive 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 resi

186、dential team for children so that we can maintain an effective care pathway.4.Young People Residential ServicesRevenue21.9m(2013:19.6m)EBITDA7.4m(2013:6.2m)Capacity153(2013:149)A number of children and young people need to live in specialised residential services and receive education.As far as prac

187、ticable 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 the year this

188、segment benefited from new services and will benefit from the Dudley site in the next financial year.Children residential services have been 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

189、.I would like to express particular praise for the team in Scotland who have established a good presence in a relatively short time.5.Learning ServicesRevenue7.9mEBITDA0.1mIn November 2013,CareTech acquired a Learning Services business now operating as EQL Solutions,a national provider specialising

190、in employment and training services to young people and adults.The business was acquired out of the administration of Elmfield Training with the knowledge that it required turnaround,which has been the management focus during the year.The necessary investment and re-structuring will be completed sho

191、rtly.Its intensive pre-employment,development and apprenticeship programmes use public funds from the Skills Funding Agency to lay the foundations for individuals to achieve their career goals while helping to provide businesses with the vital skills they need in their workforce.As well as supportin

192、g the workforce,EQL Solutions is also developing programmes for service users by enhancing the pathways to independent living and employment.Young People leaving care,for example,often dont know where to find the right job opportunities or have the opportunity to access employer-focused training.We

193、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 employment after mental illness and to give people with learning disabilities the skills and confidence to gain employment so that they are able t

194、o live more independently.EQL training staff at a BHS store.21 CareTech Holdings PLC Annual Report and Accounts 2014Strategic ReviewGovernanceFinancial StatementsEarly mapping with CareTechs core business around the year end has gone well.Good progress has been made in identifying the potential for

195、EQL Solutions 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.An Apprenticeship is a work-based learning programme designed around the needs of emp

196、loyers,which leads to nationally recognised qualifications.It 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

197、employees,many employers consider the framework to be a useful 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 devel

198、opment solutions for existing employees,would enhance and support 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

199、 across all our services.We look forward to collaborating with our partners to spread best practice and innovative training across the wider industry.Our task during this year has been to integrate the new company,EQL Solutions and to establish a sound business base for growth and develop new produc

200、ts in line with discussions held with the Skills Funding Agency.I am pleased to confirm that we have made progress with EQL Solutions and the team are strongly motivated to develop their initiatives in the world of social care through Aspire.Aspire has been developed by EQL Solutions as a unique and

201、 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 tailored to suit their role.CareTech apprentices have

202、now begun their training with a significant number waiting to join the programme over the next 12 months.From November 2014,all newly hired support workers will also be offered an Apprenticeship as part of their induction to CareTech.The Aspire programme aims to empower every colleague to display th

203、e behaviours needed to deliver the high quality,personalised care and to ensure there is a Development Pathway available to all.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

204、 stakeholder community.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 objecti

205、ve.As our organisation 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 interes

206、ts are safeguarded 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,pr

207、oviding employment where feasible and nurturing personal ambition where helpful.We are 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

208、 our,success.We care about the environmentWe seek to maximise environmental standards in all areas of our organisation.Energy costs are now closely monitored centrally and with the installation of smart meters being rolled out across our services we are seeking to encourage more efficient consumptio

209、n of energy,without compromising service user care.Clinical waste management has an environmental impact and we are focused on ways to make this more effective whilst still adhering to statutory requirements.We aim for minimal waste production and waste-free processes.Encouraging the involvement of

210、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 recycling initiatives,developing a carbon offset scheme for paper usage,using public transport where feasible and improving energy efficiency.We c

211、are about our staffWe remain committed to ensuring employees share in the success of the Group and fully appreciate that Group performance is affected by the relationship we have with them.Sustaining the retention and development of employees is also critical to our continued success and we remain o

212、f the belief that fostering a positive workplace culture is the best way for our employees to thrive.Supporting them with regular supervision,training and clear career development programmes promotes staff continuity and leads to improved standards of care quality.Out of a total of 3,531 staff 70%ar

213、e 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 resources department to foster consultation in all matters,ensure fair pay fo

214、r all,maximise conditions of service and facilitate flexible working where feasible.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 service users on a daily

215、 basis.Our sharesave share option scheme continues to offer new invitations regularly and is 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 loyalty,diligence and effort.22 Care

216、Tech Holdings PLC Annual Report and Accounts 2014Chief Executives Statement and Performance ReviewcontinuedWe 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

217、 to this end.Maintaining workplace infrastructures is a core objective and sustained 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 r

218、egular inspections being made by the Care Quality Commission(“CQC”)and Ofsted in 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

219、compliance teams which undertake a programme of regular inspection and assessment 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

220、communitiesDoing business the right way is of fundamental importance to us.A successful 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

221、service reputation and helping to foster a strengthened relationship with local 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,

222、beyond its bottom line.Considering non-financial values such as reputation,employee 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

223、 is an integral part of a continuing process of building long-term value.OutlookThe 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.It is of course an election year and the major partie

224、s have already begun to pinpoint both health and social care for investment.There is significant policy development in the pipeline and we see some indicators that local authorities have recognised the need to maintain,or grow their social care budgets.In our view we are in a period in which consoli

225、dation 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 robust criteria which must be satisfied to ensure that any acquired company fits our strategic development objectives.This has bee

226、n 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 Care Sector.CareTech provides high quality care,support and outcomes to our service users.I remain proud to lead the Company,delive

227、ring a quality of care that makes such a difference to so many lives.Haroon SheikhChief Executive Officer14 January 2015Lyndhurst Staff Team National Team of the Year 2014 AwardThe staff of Lyndhurst collecting their award at the Greater London Care Awards.23 CareTech Holdings PLC Annual Report and

228、Accounts 2014Strategic ReviewGovernanceFinancial StatementsResultsThe underlying operating profit remains strong at 27.3m compared to 23.2m 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 ha

229、s been on organic developments and cost efficiencies as well as the transaction on 4 November 2013 in respect of EQL Solutions for a total cash consideration of 1.1m to enable the Group to provide apprenticeship and pre-employment training.Underlying diluted earnings per share increased by 13.1%to 3

230、1.01p(2013:27.43p)per share and underlying profit after tax has risen by 14.2%to 16.1m(2013:14.1m).Basic and diluted earnings per share decreased by 50%to 23.86p and 23.85p respectively(2013:47.54p basic and diluted)and profit after tax decreased by 12.0m to 12.4m(2013:24.4m).Cash inflows from opera

231、ting activities before tax and non-underlying items paid were 30.3m(2013:23.9m),an increase of 27%.Net debt at the year end of 166.1m has reduced by 2.3m for the year.Income StatementThe Consolidated Income Statement before non-underlying items for the year is summarised in Table 1 below.RevenueReve

232、nue of 123.3m(2013:114.3m)was 7.9%higher than in 2013.In the established Adult Learning Disabilities segment we continued to experience high levels of occupancy and reported 92%occupancy at 30 September 2014.When this is blended with the facilities that are being reconfigured and so are under develo

233、pment the overall occupancy level during the second half of the year and at 30 September 2014 was 86%of capacity(September 2013:84%).As in recent years the demand for residential services continues to be encouraging for high acuity users.As set out in the Chief Executives Statement and note 3 to the

234、 Accounts we are again reporting segmental information for the financial year and last year which includes information on client capacity and turnover for each segment with the addition of Learning Services in this year.Michael Hill Group Finance DirectorTable 1 Consolidated Income Statement before

235、non-underlying itemsThe Consolidated Income Statement,before non-underlying items,for the year is summarised below:2014m2013mGrowthRevenue123.3114.3 7.9%Gross profit46.645.6Administrative expenses(15.9)(19.2)Underlying EBITDA30.726.416.3%Underlying EBITDA margin24.9%23.1%Depreciation(3.4)(3.1)Share-

236、based payments charge(0.1)(0.1)Underlying operating profit27.323.217.6%Net financial expenses(7.5)(5.7)Underlying profit before tax19.717.5Taxation(3.6)(3.4)Effective tax rate18.2%20.0%Underlying profit for the year16.114.1Weighted average number of diluted shares(millions)52.051.3Underlying diluted

237、 earnings per share31.0127.43pFull year dividend per share8.00p7.00p24 CareTech Holdings PLC Annual Report and Accounts 2014Financial ReviewThe Group has repeated the good progress of recent years in 2014The continued development of our care pathways and a growing range of service options has led to

238、 the proportion of Adult Learning Disabilities revenue moving from 64.7%in 2013 to 60.2%in 2014 and EBITDA before Group costs from 59.3%in 2013 to 63.5%in 2014 as Learning Services joined the Group.The Young People Services total revenue has risen by 11.7%with Mental Health rising by 12.3%and Foster

239、 Care falling by 16.1%.Their proportion of the EBITDA before Group costs has risen from 40.7%in 2013 to 36.2%in 2014 due mainly to the higher margin generated by the Adult Learning Disabilities Services following the rent savings due to the Business Combination in 2013 and also the improved margin a

240、chieved.Underlying EBITDA and total EBITDAUnderlying EBITDA has grown by 16.3%from 26.4m in 2013 to 30.7m in 2014.Underlying EBITDA margin has increased from 23.1%to 24.9%mainly due to the segment mix as the three smaller segments all grew and with a higher rate of margin.The Adult Learning Disabili

241、ties,Mental Health and Young People Residential Services segments have higher margins 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 e

242、xpenses,before depreciation and share-based payments charges were 15.9m(2013:19.2m)and decreased by 3.3m during the year.In 2013 they represented 16.8%of Group revenue and in 2014 this further improved to 12.9%of Group revenue.There has been a considerable effort in the year to reduce administrative

243、 expenses with the key element being property rental costs.The extent to which rent savings have been reflected in the Groups profitability is reduced by the degree of reconfiguration work that the Group elects to carry out at the properties.The reconfiguration of services is a central part of the B

244、oards strategy.It enhances average fee rates and maintains the Groups reputation as a provider of highest quality of care and the business combination in 2013 provided an opportunity which allowed reconfiguration of services.Table 2 Revenue2014Revenuem2014UnderlyingEBITDAm2013Revenuem2013UnderlyingE

245、BITDAmAdult Learning Difficulties74.222.673.918.5Mental Health7.32.56.52.2Young People Residential Services21.97.419.66.2Foster Care 12.03.014.34.3Learning Services7.90.1123.335.6114.331.2Less unallocated Group costs(4.9)(4.8)123.330.7114.326.425 CareTech Holdings PLC Annual Report and Accounts 2014

246、Strategic ReviewGovernanceFinancial StatementsCash flow and net debtThe cash flow statement and movement in net debt for the year is summarised below:2014m2013mUnderlying EBITDA 30.726.4(Increase)in working capital(0.2)(2.5)Cash inflows from operating activities30.523.9Tax paid(0.3)(1.9)Interest pai

247、d(7.1)(5.5)Dividends paid(2.4)(3.3)Acquisitions and capital expenditure(10.3)(44.0)Cash flow before adjustments10.4(30.8)Non-underlying cash flows including derivative financial instruments(8.0)(6.5)Movement in net debt2.4(37.3)Opening net debt(168.5)(131.2)Closing net debt(166.1)(168.5)Net debt at

248、30 September 2014 of 166.1m(2013:168.5m)has decreased by 2.4m during the financial year,with an investment of 10.3m in acquisitions and capital improvements during the year.Non-underlying items had a cash outflow effect of 4.2m(2013:2.3m)being payment of acquisition and integration costs and payment

249、s made under onerous contracts.The number of employees in management and administration has increased by seven.A new care system for Foster Care has been introduced across the Group and this has recently gone live whilst the new Time and Attendance system is being implemented across all of the resid

250、ential services in the coming months which will further our back office centralisation.Total EBITDA decreased by 29%from 39.9m in 2013 to 28.3 in 2014 as a result of a non-recurring gain in 2013.Operating profit and profit before taxThe depreciation charge is 3.4m (2013:3.2m)and reflects the investm

251、ent in land and buildings,motor vehicles and fixtures,fittings and equipment.After this charge and the share-based payments,underlying operating profit grew 18%to 27.2m(2013:23.2m).Total operating profit decreased by 38%to 20.5m(2013:32.9m).Net underlying financial expenses of 7.5m(2013:5.7m)increas

252、ed over the previous year due to the continued use of the secured bank loans which had reduced following loan repayments,although there were additional finance leases taken out on new home vehicles during the year.Underlying profit before tax was 19.7m(2013:17.5m)which is an increase of 13%.Total pr

253、ofit before tax decreased by 56%to 12.5m(2013:28.1m).Taxation and diluted earnings per shareThe effective underlying tax rate was 18.2%(2013:20.0%)and reflects managements expectations of future capital investment through organic developments and reconfigurations relative to available capital allowa

254、nces and also reflects the impact of the reduction in the main rate of corporation tax in the year.The weighted number of shares in issue rose by 1.5%whilst the underlying diluted earnings per share rose to 31.01p in 2014 from 27.43p in 2013.Basic and diluted earnings per share decreased by 50%to 23

255、.86p and 23.85p respectively(2013:47.54p basic and 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 5.40p per share(2013:4.68p),bringing the total div

256、idend for the year to 8.00p(2013:7.00p),a growth of 14.3%.Dividend cover for 2014,based upon diluted earnings per share before non-underlying items is 3.87 times(2013:3.92 times).Non-underlying itemsAs more fully explained on the face of the Consolidated Statement of Comprehensive Income and in note

257、 4 to the Accounts,the Directors have separately disclosed a number of non-underlying items in order to improve understanding of the trading performance achieved by the Group.Total non-underlying items represent a charge of 3.7m(2013:credit of 10.3m)and the principal items are the amortisation of in

258、tangible assets and integration and reorganisation costs.In the prior year,the credit was a result of the business combination.26 CareTech Holdings PLC Annual Report and Accounts 2014Financial ReviewcontinuedUnderlying cash inflows from operating activitiesThe 30.3m(2013:23.9m)cash inflow from opera

259、ting activities,before non-underlying items,represents a 98%(2013:90%)underlying EBITDA cash conversion ratio.Interest and dividend cash flowsInterest paid of 7.1m(2013:5.5m)is reflective of the net financial expenses per the Consolidated Statement of Comprehensive Income,whilst dividends paid are c

260、onsistent with the relevant section earlier in the review.Acquisitions and capital expenditureDuring the year we invested total funds of 10.3m(2013:44.0m).On 4 November 2013 the Group acquired the majority of the business and assets of Elmfield Training Limited,a provider of apprenticeship and vocat

261、ional training funded either directly by the Skills Funding Agency or indirectly through clients own Skills Funding Agency contracts.The acquisition had been completed for a total cash consideration of 1.1m.The acquisition and the ongoing working capital costs of the business have been funded from t

262、he Groups current bank facilities.The acquisition will enable the Group to provide apprenticeship and pre-employment training in the Care sector.The acquired business has been rebranded EQL Solutions Limited.The necessary investment and restructuring will be completed shortly.Further details of the

263、acquisition are explained in the Chief Executives Statement and Performance Review as well as in the notes to the financial statements.Capital expenditure of 10.1m includes 7.0m to update our portfolio of assets.Banking and arrangementsThe Group is pleased to have continued its strong relationships

264、with Royal Bank of Scotland,Lloyds TSB,Santander and Allied Irish following the refinancing in July 2012.That facility was for a total of 149.4m comprising a term loan,a revolving credit facility and an overdraft facility.The term was 4 years,expiring in January 2017 and the Group had taken five new

265、 hedging instruments to reduce its interest rate risk.Additional banking facilities were provided in August 2013 on the same competitive terms as the banking facility announced in 2012,with debt service cost after hedging at less than 4.5%,to fund the business combination.The facility has certain co

266、venants attached to it which are mostly EBITDA related and were set with sufficient facility headroom.As part of the additional financing the Groups new freehold property portfolio was valued independently at 50m.The remainder of the Groups freehold properties were valued at 225m in July 2012 giving

267、 a total of 275m(as shown in note 11).At 30 September 2014 the Group has available bank facilities totalling 171.2m which are sufficient,with cash flow from operating activities,to fund present commitments.Going concernThis Financial Review has covered the cash flows,liquidity position and borrowing

268、 facilities of the Group and in the Accounts there is additional information on the Groups objectives,policies and processes for managing its capital,its financial risk management objectives,details of its financial instruments and hedging activities and its exposures to credit risk,interest rate ri

269、sk and liquidity risk.The Group meets its day-to-day working capital requirements through a mixture of bank facilities which are sufficient,with cash flow from profits,to fund present commitments.OutlookThe Group is now in an even stronger position to continue as a pioneering provider of specialist

270、social care services in a fragmented,large and growing UK market.Michael HillGroup Finance Director14 January 201527 CareTech Holdings PLC Annual Report and Accounts 2014Strategic ReviewGovernanceFinancial StatementsFarouq Sheikh has been a key architect in CareTechs growth,having been co-founder of

271、 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 instrumental in securing debt and equity funding for the Group as well as leading the management team in winning a number of long-term

272、contracts from local and health authorities.Farouq Sheikh is a leading business entrepreneur,philanthropist and investor within the UK.Farouq has initiated and overseen the successful equity investments and the subsequent exits for 3i Group PLC(in 1996 and 2002)and Barclays Private Equity(in 2002 an

273、d 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 grown significantly from 4.1p in 2005 to 31.01p in the current financial year.Farouq has been presented with a number of

274、 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 awareness of the learning disability sector.As Patron and Enterprise Fellow of the prestigious Princes Trust and as a member

275、 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 University graduate,is one of the UKs leading entrepreneurs,philanthropists and community figureheads and one of the f

276、ounders 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 Officer,he is actively involved in the day-to-day running of the business and over time has been instrumental in nurturing

277、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 to people with a learning disability.In 2008,Haroon and his brother Farouq were winners of the highly valued Coutts Fam

278、ily 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 Chair of the UK Advisory Council of the British Asian Trust under the patronage of HRH Prince Charles.Haroons most rec

279、ent social enterprise was establishing the COSARAF Charitable Foundation to benefit communities and individuals in the UK and abroad.As trustee for International Development,Haroon established the COSARAF Kenya Feeding Project which supports the feeding of over 700 women and children daily as well a

280、s 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 as a Financial Analyst managing marketing projects.Michael then had senior financial roles in retailing with the launc

281、h 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 then Director of Finance and from 2006 as Finance Director of National Fostering Agency.Michael joined CareTech in 2010 to

282、 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 56)Haroon Sheikh BSc Chief Executive Officer(aged 58)Michael Hill Group Finance Director(aged 63)28 CareTech Holdings PL

283、C Annual Report and Accounts 2014Board of DirectorsStrong leadershipAfter graduating from University College Dublin with a Bachelor of Commerce Degree,Karl trained as a chartered accountant with KPMG in Dublin.He has worked in the corporate finance departments at a number of merchant banks and stock

284、brokers,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 2002 to provide consultancy services to quoted and private companies.He sits on a number of AIM quoted and private company boards.Mike has a sig

285、nificant track record in the social care,health and disability sectors.For five years he was Director of the National Disability Team,responsible for policy and practice for disabled students in higher education.Mike was Director of Operations for the Disability Rights Commission for two years and h

286、as 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 acute hospital trust in Essex and has previously chaired an expert panel on Access to Work,the Governments flagship disability employment progr

287、amme.Mike has recently been bestowed an Honorary Doctor of Education for disability leadership from Anglia Ruskin University.Jamie has a strong track record in City corporate and investor relations.Having started his career with Touche Ross,Jamie became an Investment analyst with Parsons&Co.(latterl

288、y 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 Corporate Advisory&Broking Division and led the demerger of Brewin Dolphins investment banking activities through a merger with Madrid-b

289、ased 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 Singer Capital Markets.Jamie is a senior advisor to Cantor Fitzgerald Europe and a Non-Executive Director of 21st Century Technology p

290、lc.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(aged 52)Dr Mike Adams OBE Non-Executive Director(aged 43)Jamie CummingNon-Executive Director(aged 64)29 CareTech Holdings PLC Annual

291、Report and Accounts 2014Strategic ReviewGovernanceFinancial StatementsAn experienced,driven and focused corporate board.How do we deal with conflicts of interest?Following amendments to the Companys Articles of Association in 2008 to reflect certain provisions of the Companies Act 2006 relating to c

292、onflicts 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 interest in the matter under consideration)will be able to

293、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 when giving authorisation if they think this is appropriate

294、.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.Board and Committee meetingsThe Board meets in formal session regularly,usually on

295、ce each month,and 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 30September2014:BoardAudit CommitteeRemuneration CommitteeCare Governance and Safeguarding CommitteeFa

296、rouq Sheikh9Haroon Sheikh101*Michael Hill 112*44Stewart Wallace114Karl Monaghan11244Mike Adams11244Jamie Cumming11244*by invitation.Do we comply with the UK Corporate Governance Code?The CareTech Board of Directors(the“Board”)remains committed to achieving the highest standards of integrity,ethics,p

297、rofessionalism and business practice throughout its operations.As a Company quoted on AIM,a market operated by the London Stock Exchange,the Company is not required to comply with the UK Corporate Governance Code(the“Code”).However,the Board is accountable to the Companys Shareholders for ensuring e

298、ffective governance and therefore strives to apply best practice and materially to comply with the UK Corporate Governance Code to the extent that the Board considers it is appropriate for a public company of its size and complexity.This sets the tone for corporate behaviour and helps make our gover

299、nance meaningful and focused on improving our business and protecting Shareholder value.Who is on our Board?As Executive Chairman,Farouq Sheikh 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 Directo

300、rs biographies appear on pages 28 and 29 and detail their experience and suitability for leading and managing the Group.Karl Monaghan,the Senior Independent Director,Mike Adams and Jamie Cumming are the three Non-Executive Directors and the Board considers each of them as independent.Collectively,th

301、eNon-Executive Directors bring a valuable range of expertise andexperience in assisting the Group to achieve its strategic aims.In the furtherance 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

302、their responsibilities by the Company Secretary.The Board approves the appointment and removal of the Company Secretary.All Directors are required to submit themselves for re-election at least every three years and new Directors are subject to election by Shareholders at the first opportunity follow

303、ing their appointment.As noted above a Company quoted on AIM,a market operated by theLondon Stock Exchange,the Company is not required to comply with the UK Corporate Governance Code.30 CareTech Holdings PLC Annual Report and Accounts 2014Corporate Governance Report The Group therefore sets out to p

304、rovide competitive remuneration to all its employees,appropriate to the business environment in the market in which it operates.To achieve this,the remuneration package is based upon the following principles:total rewards should be set to provide a fair and attractive remuneration package;appropriat

305、e elements of the remuneration package should be designed to reinforce the link between performance and reward;and Executive Directors incentives should be aligned with the interests of shareholders.The remuneration strategy is designed to be in line with the Groups fundamental values of fairness,co

306、mpetitiveness and to support the Groups corporate strategy.A cohesive reward structure consistently applied and with links to corporate performance,is seen as critical in ensuring attainment of the Groups strategic goals.Who is on the Care Governance and Safeguarding Committee and what do they do?Th

307、e Care Governance and Safeguarding Committee is chaired by Mike Adams and the other members of the Board Committee are Karl Monaghan,Michael Hill and Jamie Cumming.The Committee was formed because the Board is sensitive to the publics increased awareness and anxiety about care governance and safegua

308、rding.In 2013 the Whistleblowing“Tell Us”Campaign was introduced by this Committee and it is pioneering because it provides direct access to the CEO.The Group has always been regarded as a careful and thoughtful provider of care and the Committee was formed to closely examine and pursue improvements

309、 to all matters relating to the care governance and the safeguarding of those we support,including health and safety,across the Group.It has recently included external attendees to its meetings such as the Head of Safeguarding for Hertfordshire County Council and received external presentations such

310、 as Conflict Management from Maybo to help the Committee understand best practice.To further strengthen the Committee and to work with clinical staff across the Group to help deliver outstanding care and support Dr.Junaid Bajwa has recently joined as Clinical Director.He is a General Practitioner wi

311、th extensive experience of Clinical Commissioning and developing clinical and professional strategies in a CCG.We have held several useful meetings with regulators and also invited key regulation managers to attend our Safeguarding and Care Governance Committee.The Committee is seen as a pioneering

312、initiative that has won friends and encouragement 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

313、care quality and the Executive Team has been encouraged to introduce quality initiatives across the Company.The Group has 128 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 publicl

314、y record whether services are compliant or non-compliant against those standards.The Group has achieved 89%service compliance against a national average of 85%.Adult services in Wales are regulated under different national legislation and are not currently rated on any form of scale.What decision-ma

315、king responsibilities does the Board have?Matters which are reserved to the Board for specific consideration and decision include:financial reporting and controls including statutory matters such as the approval of final and interim financial statements and dividend declarations;Board membership and

316、 other senior,key personnel appointments;review of corporate governance arrangements;Group strategy matters including the approval of annual budgets,acquisitions and disposals;review of the processes for monitoring and evaluating risk and the effectiveness of the Groups system of internal control an

317、d operational efficiency;review and supervision of treasury and financial policies;and Shareholder communications.Matters are delegated to Board Committees,individual Directors or executive management where appropriate.The Directors believe the Board is soundly constituted although,at this stage of

318、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.When the need for an additional Non-Executive Director is identified the Board appoints advisers to nominate experience

319、d 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 Committee comprises Karl Monaghan(Chairman),Mike Adams and Jamie Cumming.The Group Finance Director and representatives of

320、 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 relating to the annual and interim accounts and the accounting and internal control systems throughout the Group.The Com

321、mittee 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 consideration relevant professional and regulatory requirements in order to ensure that saidindependence and objectivity are no

322、t impaired by the provision ofpermissible,non-audit services.The Committee has carefully considered the level of non-audit services and have concluded that this does not impact on the independence of the auditors.Details ofthe amount paid to the external auditor during the year,for audit and other s

323、ervices,are set out in note 5 to the financial statements.Who is on the Remuneration Committee and what do they do?The composition and role of the Remuneration Committee is set out in the Remuneration Report on pages 35 and 36.Also detailed in that report are Directors remuneration,shareholdings and

324、 share option scheme information.The Terms of Reference were independently reviewed and updated during last year.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,poli

325、cies and procedures to achieve this.The Group operates in a highly competitive environment.For the Group to continue to compete successfully,it is essential that the level of remuneration and benefits offered achieve the objectives of attracting,retaining,motivating and rewarding the necessary high

326、calibre of individuals at all levels across the Group.31 CareTech Holdings PLC Annual Report and Accounts 2014Strategic ReviewGovernanceFinancial StatementsThe recent challenging business climate has resulted in a sustained focus on the approach to risk.The Directors consider robust risk management

327、to be crucial to the Groups success and give a high priority to ensuring that adequate systems are in place to evaluate and limit risk exposure.They have overseen the further development of processes and procedures for identifying,analysing and managing the significant risks faced by the Group.These

328、 risks have been discussed in the Strategic Report on page 16.These processes have been implemented during the year under review and up to the date of approval of this Annual Report and financial statements.The processes and procedures are regularly reviewed by the Board.A process of control and hie

329、rarchical reporting provides for a documented and auditable trail of accountability.These procedures are relevant across all Group operations:they provide for successive assurances to be given at increasingly higher levels of management and,finally,to the Board.The processes used by the Board to rev

330、iew the effectiveness of the system of internal controls include the following:annual budgets are prepared for each operating business.Monthly management reporting focuses on actual performance against these budgets for each operating business;management reports and external audit reports on the sys

331、tem of internal controls and any material control weaknesses that are identified;discussions with management including discussions on the actions taken on problem areas identified by Board members or in the external audit reports;policies and procedures for such matters as delegation of authorities,

332、capital expenditure and treasury management as well as regular updates;review of the adequacy of the level of experienced and professional staff throughout the business and the expertise of individual staff members so that they are capable of carrying out their individual delegated responsibilities;

333、and review of the external audit work plans.By order of the BoardMichael HillCompany Secretary14 January 2015Metropolitan House 3 Darkes LanePotters BarHertfordshireEN6 1AGOur Children division is regulated by the Office for Standards in Education(Ofsted)in England and these services are rated as Outstanding or Good as at the year end.In October part of the Greenfields Service was rated Adequate a