Craneware plc (CRW) 2019年年度報告「AIM」.pdf

《Craneware plc (CRW) 2019年年度報告「AIM」.pdf》由會員分享，可在線閱讀，更多相關《Craneware plc (CRW) 2019年年度報告「AIM」.pdf（78頁珍藏版）》請在三個皮匠報告上搜索。

1、Cranewareplc AnnualReport2019Craneware plc Annual Reportfor the year ended 30 June 2019Founded in 1999Together,We AreCranewareplc AnnualReport2019Helping healthcare providers further their mission through optimal financial performanceTable of ContentsFinancial and Operational Highlights 1Craneware S

2、olutions 2Chairmans Statement 4Strategic Report:Operational Review 5Strategic Report:Financial Review 8Strategic Report:Key Performance Indicators and Principal Risks and Uncertainties 13Directors,Secretary,Advisors and Subsidiaries 17Board of Directors 18Directors Report 20Corporate Governance Repo

3、rt 24Remuneration Committees Report 32Independent Auditors Report to the Members of Craneware plc 39Consolidated Statement of Comprehensive Income for the year ended 30 June 2019 43Statements of Changes in Equity for the year ended 30 June 2019 44Consolidated Balance Sheet as at 30 June 2019 45Compa

4、ny Balance Sheet as at 30 June 2019 46Statements of Cash Flows for the year ended 30 June 2019 47Notes to the Financial Statements 481Cranewareplc AnnualReport2019$71.4m RevenueQuick Facts Financial$24.0m Adjusted EBITDA1$47.6m Cash15p Final Dividend63.3 Adjusted EPS2$18.3m Profit before taxFinancia

5、l and Operational HighlightsFinancial Revenue increased 6%to$71.4m(FY18:$67.1m)Adjusted EBITDA1 increased 11%to$24.0m(FY18:$21.6m)Profit before tax of$18.3m(FY18:$18.9m)the reduction being as a result of$1.2m one-off costs related to a significant proposed acquisition that the Board decided not to e

6、nter into during the year Basic adjusted EPS2 increased 5%to$0.633(FY18:$0.602)and adjusted diluted EPS increased to$0.620(FY18:$0.591)Renewal rate remains above 100%by dollar value Three Year Total Visible Revenue of$200.1m(FY18 same 3 year period:$191.0m)Operating cash conversion at 63%of Adjusted

7、 EBITDA further$8.5m collected post year end equating to 98%conversion Cash at year-end of$47.6m(FY18:$52.8m)after having returned$8.5m to shareholders via dividends Proposed final dividend of 15.0p(19.05 cents)(FY18:14.0p,18.48 cents)per share giving a total dividend for the year of 26.0p(33.02 cen

8、ts)(FY18:24.0p,31.68 cents)per share 1 Adjusted EBITDA refers to earnings before interest,tax,depreciation,amortisation and share based payments.2 Adjusted Earnings per share calculations allow for the tax adjusted acquisition costs and share related transactions together with amortisation on acquir

9、ed intangible assets.Operational Ongoing transition of the US healthcare market to value-based care,supporting Cranewares software product suite Sales in the year amounted to$63.1m(FY18:$98.6m,FY17:$54.0m)Sales of Trisus Enterprise Value Platform products represented 13%of new sales in the year(FY18

10、:4%)Healthy sales mix,with 45%of sales relating to new customers Continued investment in R&D and innovation to capitalise on growing market opportunity Supportive market environment,with existing customers and wider healthcare market responding positively to the enhanced solution set delivered on th

11、e Trisus platformBasic adjusted EPS cents/share0102030405060708044.849.857.867.171.4201920182015201620170102030405060708044.849.857.867.171.420192018201520162017051015202521.624.014.415.918.0201920182015201620172019201820152016201760.263.337.842.951.40102030405060702019201820152016201760.263.337.842

12、.951.42Cranewareplc AnnualReport2019Software that automatically uploads chargemaster changes to the patient billing system for accurate billing.Interface Scripting Module_Web-based,mobile-friendly supplies lookup tool available in Supplies ChargeLink or Online Reference Toolkit.Supplies Assistant en

13、ables providers to access Cranewares proprietary supply master catalog and quickly and correctly code expensive implants and devices.Supplies AssistantSaaS solution for providers with less than$44 million in operating expenses to perform chargemaster analysis,and efficiently optimise revenue,charge

14、compliance and coding integrity.Reference PlusWeb-based and mobile-friendly tool for reducing risk by providing access to reference and regulatory resources.Online Reference ToolkitSaaS solutions for managing physician group KPIs,charges,codes,RVUs,fee schedules,and related informationPhysician Reve

15、nue ToolkitSaaS solution that simplifies the price modelling process,creating a repeatable,well-documented method to establish transparent,defensible and competitive pricing.Trisus Pricing Analyzer Utilizes foundational data from the item master,OR file,and chargemaster to identify data gaps between

16、 the systems,ensuring every reimbursable supply,implant,and device is billed.Trisus SupplyImproves charge capture,pricing and cost management,while simplifying the process for ensuring drug coding and billing units are complete and compliant,and establishing and maintaining a connection between a pr

17、oviders pharmaceutical purchases and billing.Pharmacy ChargeLinkAutomated SaaS chargemaster management solutions for capturing optimal legitimate reimbursement for providers,while mitigating compliance risk.Chargemaster Toolkit is customisable for any organisation,from small community providers to l

18、arge healthcare networks,and addresses the challenges that enterprise chargemaster data presents to hospitals by enabling all related chargemaster data to be viewed in one placeChargemaster TooolkitCraneware SolutionsPatient EngagementCharge Capture&PricingCraneware Value Cycle Solutions span five p

19、roduct families Patient Engagement,Charge Capture&Pricing,Claims Analytics,Revenue Recovery&Retention,and Cost&Margin Analytics.In addition,hospitals of all sizes and types rely on Cranewares Customer Success Management and other Professional Services to help deliver results that lead to improved fi

20、nancial outcomes.3Cranewareplc AnnualReport2019Patient EngagementOur consultants provide onsite staffing and expertise to help hospitals achieve their financial goals.Customer Success Managers design future state operations,develop policies and procedures,train staff on operational tasks,and measure

21、 and report on success metrics.information for each patient encounter.Customer Success Management and Consulting Services A cost analytics and resource efficiency platform that unites cost and operational information across the provider organisation,delivering revenue,cost,and operational informatio

22、n for each patient encounter.Trisus Healthcare IntelligenceCraneware has the experienced staff you need to review your denials,write successful appeals and overturn imporper denials.Appeals ServiceA comprehensive,web-based audit management tool that empowers healthcare organisations to manage govern

23、ment and commercial audits from one central location.InSight AuditAnalyses,tracks,trends and reports on denial data,providing workflow tools for expediting repair and resubmission of denied claims.InSight DenialsSoftware built on Cranewares next generation SaaS based product platform that automates

24、claim and coding reviews to identify missed charges,billing errors,and categorise areas of risk to help ensure that all legitimate revenue is captured.Trisus Claims InformaticsSimplifies the process of providing patient bill estimates for inpatient and outpatient services to improve up-front collect

25、ions and reduce bad debt.Patient Charge Estimator_A SaaS solution that provides medical necessity validation for all major U.S.payors and Advance Beneficiary Notice(ABN)creation.The software helps reduce accounts-receivable days by preventing medical necessity denials,and facilitates payment communi

26、cation with patients.InSight Medical NecessitySolutions for healthcare providers to optimize financial performance.Customer Success Management Cost&Margin AnalyticsRevenue Recovery&RetentionClaims AnalyticsCraneware Value Cycle Solutions span five product families Patient Engagement,Charge Capture&P

27、ricing,Claims Analytics,Revenue Recovery&Retention,and Cost&Margin Analytics.In addition,hospitals of all sizes and types rely on Cranewares Customer Success Management and other Professional Services to help deliver results that lead to improved financial outcomes.4Cranewareplc AnnualReport2019Alon

28、gside our strategies for technology innovation and organic growth,we continue to monitor potential acquisitions.With our healthy cash balance and a$50m funding facility in place,we have the resources to execute should an appropriate acquisition target arise.As in prior years,strict criteria continue

29、d to be applied to evaluating potential acquisition targets ensuring that they would enhance our hospital footprint,data sets or our product roadmap so that they are quickly accretive to both the financial and operational strength of the Group.No target consistently met this high bar in more than on

30、e of these areas in the year.The Board continues to look to the future with confidence.Craneware has a significant and growing sales pipeline,which the team is focused on converting.The markets requirement for greater insight into cost,margin and the value being derived from healthcare is as high,if

31、 not higher,than ever.The Trisus platform differentiates us from other healthcare solutions vendors,providing substantial benefits for our customers and making a meaningful impact on the value of healthcare as a whole.This will result in extensive improvements to the financial effectiveness of US ho

32、spital providers and thereby drive significant customer demand for Craneware solutions in the future.When I joined Craneware as Chairman at the time of the Initial Public Offering in 2007,it was clear that the Company had exciting prospects and its success would be determined by how well the Company

33、 could execute.It is very pleasing to see the progress Craneware has made over the last 20 years,especially its ability to continue to evolve,identify opportunities and more importantly capitalise on them.The Company is entering a new phase and I feel that now is an appropriate time for me to hand t

34、he“baton”on to a new Chairperson at the forthcoming AGM in November 2019,and as such I will not be seeking re-election.The search for my successor has already begun and we will update shareholders at the appropriate juncture.I would like to thank all our employees across the UK and US for their hard

35、 work throughout my 12 years of tenure and special thanks to my colleagues on the Board.Equally,I thank our customers and shareholders for their ongoing support.George Elliott Chairman 2 September 20192019 saw Craneware celebrate its 20th birthday.From an idea in 1999 to use software to automate the

36、 maintenance of a hospitals central database of billing codes,Craneware has grown to become a trusted partner to over a third of all US hospitals,its software providing insight into an increasing number of areas in their businesses.The Company has continued to make good progress against its long-ter

37、m strategy:to build upon its central position to profoundly impact healthcare,by providing data and applications to improve margins and enhance patient outcomes.The fundamentals of the business remain strong,and the opportunity significant.Although lower than originally anticipated,revenue increased

38、 6%to$71.4m(FY18:$67.1m)and adjusted EBITDA increased 11%to$24.0m(FY18:$21.6m).The Group had cash reserves at the end of the year of$47.6m,after having returned$8.5m to shareholders via dividends,while also investing a further$9.6m in the development of new products.Sales in the year amounted to$63.

39、1m(FY18:$98.6m,FY17:$54.0m).These sales add another layer to our visible future revenue,which now stands at over$200m for the three year period to 30 June 2022.Renewal levels continued to be comfortably within our historic norms,at 101%.Central to the Groups growth strategy in recent years has been

40、the evolution of its product suite from on premise point solutions to a comprehensive cloud-based platform,the Trisus Enterprise Value Platform.Trisus will enable Cranewares customers to harness the power of the wealth of data generated across all areas of the hospital.It sits as the intelligence la

41、yer across all other software systems,delivering the information required to improve financial and operational performance.The first product on the Trisus platform was launched at the beginning of FY18,and a further three have been launched in the financial year under review.It would now appear that

42、 the speed with which we launched these latter three products caused some temporary“indigestion”both within our sales team and our customer base which we are systematically working through.The response to Trisus from our customers continues to be extremely positive,with the vast majority now interac

43、ting with the platform via the Trisus Bridge,a connector layer linking their existing on-premise Craneware solutions to the enhanced functionality of Trisus in the cloud.Chairmans Statement5Cranewareplc AnnualReport2019care they provide.They need to understand where their organisations are at financ

44、ial risk,so that they can protect their margins,to ensure they are in a position to continue to deliver quality care to their communities both now and in the future.The proportion of value-based care payments is increasing each month,as the industry moves to this new reimbursement model.From data co

45、mpiled by the Catalyst for Payment Reform group,in 2010,1 to 3%of all payor contracts had a value-based care or quality driven modifying metric for payment.In the last two years this has rapidly increased as confirmed by many of the largest US healthcare insurance companies.Aetna,Inc.recently confir

46、med that approximately 53%of their 2018 claims payments were made to value-based providers and they are committed to increasing that number to 75%by 2020.United Health Group is currently paying more than 60%of their claims via value-based contracts and Anthem,Inc.underlined the size of spend they no

47、w have associated with value-based contracts,stating they currently have more than 66%of their total medical spend tied to payment innovation contracts.Their Enhanced Patient HealthCare(EPHC)program of private value-based care is one of the largest nationally,having grossed$1.8bn of savings for Anth

48、em clients since 2014.It is clear that value-based care is here for the long-term.However,the ultimate success of value-based care will be reliant on the industry having access to granular data and insightful analytics to identify opportunities to deliver better value.As a result,the US healthcare a

49、nalytics sector is forecast by US research firm MarketsandMarkets to grow 27.3%CAGR from$9.0bn in 2017 to$29.8bn by 2022.This is a large,growing opportunity for Craneware given our specialism in helping hospitals better understand and manage revenue and cost through data-driven solutions.StrategyPro

50、duct innovation to revolutionise healthcare finance and expand our addressable marketOur strategy is to continue to build on our established market-leading position in revenue cycle solutions to expand our product suite coverage of the Value Cycle.The Value Cycle describes the full life cycle of opt

51、imising every opportunity to achieve the best outcome for the best cost.It includes traditional revenue components such as pricing,charge capture,claims performance and compliance,but also addresses additional dimensions,such as:quality of care,patient satisfaction and engagement,clinical outcomes,o

52、perational efficiency and risk management.We will continue to follow a land and expand customer strategy.We will use the breadth of our product suite and depth of our long-term product vision to bring new customers into the Group,at increasing average contract sizes,while seeking opportunities to se

53、ll additional products to our existing customer base.In the long-term,we believe we have the opportunity to increase average annual licence fees up to 10 x through much broader adoption of the Trisus platform tied directly to an ongoing and increasing ROI model for our customers.Our customers succes

54、s will be our success.Twenty years ago we were the first to market with a software tool to automate the management of the chargemaster.Building from an initial customer base of just a handful of hospitals,we have grown to providing three families of solutions,aimed at improving the value that can be

55、 achieved from every dollar spent on healthcare.Now being used in approximately a third of all US hospitals,our journey continues as we continue to grow that customer base and widen our impact on the value that each of those customers can deliver to their patients.Throughout this time,we have been c

56、ommitted to being at the forefront of innovation within a hospitals finance function and in recent times have turned our attention to improving our hospital customers operational efficiency.Once more it has been impressive to see the outstanding work carried out by our innovation,delivery and develo

57、pment teams,ensuring we further our reputation as thought-leaders and innovators in our field.This commitment to innovation saw us launch the Trisus Enterprise Value Platform,a cloud-based financial and operational management platform specifically designed to address the challenges arising in the ne

58、w era of value-based care.The Trisus platform provides insight into all areas of financial and operational risk within a hospital,sitting as an intelligence layer across a myriad of other software systems,extracting data,normalising it and then applying analytical tools to help improve hospital perf

59、ormance.This powerful platform has been built from the bottom up,enabling the migration of our existing customers from their on premise solutions into the cloud with the development of several new solutions built on the substance of our legacy products.We are just at the start of our Trisus journey

60、and are excited by the sizeable and significantly growing opportunity ahead of us.MarketThe move to value-based care continues at paceThe US healthcare market continues to transition from a fee-for-service reimbursement model,towards value-based care,aiming to redress the current imbalance in the US

61、 between spend and outcomes.The US has the highest spend per capita on healthcare but ranks only 37th in the world for outcomes.Healthcare providers across the country are being asked by the government and the insurance companies to justify the care they provide or risk the withholding of payment.Me

62、anwhile healthcare consumers are expecting a greater transparency on costs and the ability to shop around for the services they require.An example of the growing pressures on hospitals includes the introduction in June 2019 of an Executive order from the President of the United States to drive great

63、er transparency in pricing and quality.As a result of these market shifts,US hospital management teams require a greater level of insight than ever before into the costs and value being derived from the Strategic Report:Operational Review6Cranewareplc AnnualReport2019Annuity SaaS business model prov

64、ides a strong foundation for the businessWe sign long-term,multi-year contracts,based on the annuity SaaS model,providing the business with high levels of revenue visibility and the comfort to be able to continue to invest in innovation.As we introduce new solutions on the Trisus platform we continu

65、e to see some variability in contract lengths,however as anticipated the key renewal dollar value statistics remains comfortably above the middle of our historic range.The business benefits from strong SaaS economics,with the lifetime value of the current contract base significantly higher than the

66、cost of acquiring customers.Product RoadmapWe continue to make progress in all areas of our product roadmap:the development of our cloud-based Trisus Enterprise Value Platform;the continued evolution and support of our existing market-leading product suite as we migrate to Trisus;and the development

67、 of new products to sit upon the Trisus platform.All of these solutions will increase our coverage of the key areas of the Value Cycle and therefore increase our addressable market.Trisus Enterprise Value PlatformThis cloud-based platform provides an expanding suite of solutions focused on healthcar

68、e providers to identify and take action on risks related to revenue,cost and compliance,leading to optimised operations within the Healthcare provider.It is designed to be versatile and expandable,growing alongside our customers as the healthcare industry continues to evolve.The platform provides an

69、 environment to gather,process,and deliver data across the continuum of care with an open architecture and common components,allowing for synergies between applications.We are particularly pleased to note how both our existing customer base and the wider healthcare provider market have responded pos

70、itively to the technological evolution of the Craneware solution set,delivered on the Trisus platform.The Trisus Bridge,the connector layer linking our customers existing on-premise Craneware solutions to the advanced functionality of Trisus in the cloud has proven a valuable introduction to custome

71、rs on the potential benefits the platform can offer them.Greater than 95%of our customer base is now submitting at least part of their data to the Trisus platform via the Trisus Bridge.Over 90%of our existing customers have converted or are in the process of converting to Single Authorisation via th

72、e Trisus platform which is the first step for significant migration to the platform from within our user base.We are confident the remaining customers will make this step over the coming months.These positive metrics bode well for the future transition to Trisus.We now have four products live on Tri

73、sus:Trisus Claims Informatics,Trisus Supply,Trisus Pricing Analyzer and Trisus Healthcare Intelligence,with the latter three all entering full marketing mode through the course of the year.Demonstrable and compelling ROIEach of our products has the ability to deliver many times over its cost in term

74、s of protected or increased revenue or margin for our customers,in the first year alone.Strong competitive positionThe focus of the new products we are developing is to target green field opportunities,where there is little or no existing competition.The breadth of our offering,combined with 20 year

75、s of data within a sophisticated cloud platform,provides us with a strong competitive position across our target product areas.Working in partnership with customersOur innovation is being carried out alongside our customers,to ensure we are providing them with the tools they need,addressing the key

76、areas of risk in their operations.Our high levels of customer renewals,consistently high customer support scores and longevity of customer relationships demonstrate the partnership role we have with our customers.Investing in R&D to fulfil our visionOur investment in R&D will continue to grow,in lin

77、e with revenue growth,as we fulfil our vision for Trisus.We are required to capitalise a certain proportion of this investment relating to the products where clear future revenue potential has been identified and therefore are deemed to be an asset to the business.We are delighted to report that in

78、the three months since launch,the Trisus Pricing Analyser product has already covered its development costs through the total value of contracts signed,demonstrating both the quality of the development work and its relevance to the market.Potential to augment organic growth through acquisitionsThe B

79、oard continues to assess acquisition opportunities to complement the Groups organic growth strategy and increase its product coverage of the Value Cycle.The Board adheres to rigorous criteria to evaluate acquisition opportunities,including quality of earnings,customer relationships,strategic fit and

80、 product offering.In addition to the Groups cash reserves,an undrawn$50 million funding facility provides the Group with available resources to carry out strategic acquisitions if,and when,these criteria are met.Areas for consideration include:competitors who bring market share;businesses with compl

81、ementary data sources or products;and international companies with complementary product suites of benefit to our customers,who do not have a foothold in the US.The Group reviewed a substantial transaction during the year that appeared to meet several of these criteria.However,following extensive du

82、e diligence and legal process over several months,it was decided that there was not sufficient assurance of enhanced shareholder value to merit progressing with the transaction.Strategic Report:Operational Review Contd.7Cranewareplc AnnualReport2019Strategic Report:Operational Review Contd.We are ex

83、ecuting on a roadmap to migrate all our solutions onto the Trisus platform and continue to look for innovative combinations of our data sets into new unique product offerings.As part of this roadmap we expect to see further hybrid solutions combining:the best of existing software regardless of the d

84、evelopment origin,including outside of Craneware;elements of the Trisus platform;new Trisus products;and new early adopter Trisus enabled versions of other existing solutions.Trisus Healthcare IngelligenceTrisus Healthcare Intelligence is a decision support tool that integrates revenue,cost,clinical

85、 and hospital operational information for each patient encounter,throughout the journey of their medical condition.It accumulates all patient costs from patient activities and services consumed during their care to allow the healthcare provider to optimise hospital operations.The aim of the tool is

86、to provide our customers with an understanding of the true cost of care by understanding all the elements of every episode of care given to their patients so they can identify what most affects financial and clinical outcomes and put in place improvement programmes to effect those changes.Most hospi

87、tals accounting systems account for cost in aggregate and average these,allocating costs on a volumetric basis.This structure,while useful in a fee-for-service system and for basic forecasting,financial projections and budgeting,does not adequately support the shift to a quality-centric healthcare d

88、elivery system that provides true value,where a greater degree of insight and thereby more granularity of the data is required.Healthcare Intelligence is therefore a vital component within the emerging value cycle solutions market,representing a market opportunity several times larger than that of o

89、ur existing product portfolio.We now have three existing customers on multi-year contracts for the solution with a growing pipeline of additional opportunities.Our initial customers for this solution are using it to improve the operations of their hospitals and working with Craneware to provide use

90、cases that can be utilised across future customers and in marketing the products further.The benefits already being delivered to these organisations is meaningful.Within two small sub-groups of observation status patients at a medium-sized acute care hospital in the Northeast,the implementation of T

91、risus Healthcare Intelligence Cost Analytics and Decision Support found that the hospital had been under-reimbursed by up to$1m over a 9-month period.This was due to the patients status not being correctly upgraded despite the higher levels of treatments they received.At a medium-sized acute care ho

92、spital in the Midwest,an analysis of two Diagnosis Related Groups identified one sample with a significant margin loss per case.Margin was being lost due to the hospital applying a particular reimbursement code,where another,just as applicable,code would have more accurately reflected the level and

93、cost of care provided.It was identified that the change of code,and an increase in certain efficiencies,would have resulted in additional revenue of up to$1.4m for just this one sample of patients.From the pipeline of opportunities that have grown for this product we are very pleased with the effect

94、iveness of our investment in this product area and believe that we will be able to report that we will see a return on this investment within a relatively short period of timeSales and Marketing The positive sales momentum experienced in the first half of the year was impacted as the market digested

95、 the release of three new Trisus products.While this situation began to rectify towards the end of the year,it caused our level and timing of sales for the year to be below our initial expectations.The added options presented to customers towards the end of their contract negotiation caused addition

96、al product reviews,discussion of new pricing options and revised legal contracts,thereby extending the signing process.Our annuity SaaS business model protects the business to a certain extent from lumpy licence sales,although the timing of sales directly impacts the revenue growth of the Company in

97、 any one year(and for the subsequent period)through delayed subscription revenue and lower service revenue recognisable in the period.These factors are being successfully worked through,with a strong level of sales secured at the start of the year.For our growing number of future opportunities,we ha

98、ve devised strategies to mitigate these factors,such as more standardised legal frameworks and Service Level Agreements for our cloud based solutions.We continued to sign contracts with hospitals of all sizes and have continued to do so in the first few months of the current year,having had a strong

99、 start to the year and the sales pipeline continues to grow.Our sales in the year continued to support our land and expand strategy,with 45%of sales in the year coming from new customers,providing a foundation for future growth,and the remaining 55%being additional products to existing customers bot

100、h as they are renewing their existing licences and throughout the life of their original contracts.Pharmacy ChargeLink has also continued its leading performance from last year.Whilst the launch of our new Trisus products did lead to some sales indigestion,we have seen early positive signs from the

101、market to these products.As a result,sales of Trisus products represented 13%of our new sales in the year increasing from 4%in the prior year.8Cranewareplc AnnualReport2019annual value of all customers due to renew in the current year and compare it to actual value these customers renew at(in total)

102、,including up-sell and cross-sell.This metric for the FY19 is 101%.As demonstrated by the numbers reported above,and as a result of our business model,“sales”and“revenue”have very different meanings to the Group and are not interchangeable.In fact,only a small proportion of the revenue resulting fro

103、m any sale made in the year will be recognised in the year of sale.Instead the vast majority of revenue resulting from any sale is recognised over future years,supporting future growth.Through our business model and resulting revenue recognition,the Group ensures that it is focused on building its u

104、nderlying annuity revenue base to deliver sustainable growth.IFRS 15&Our Business ModelIFRS 15“Revenue from contracts with customers”is effective for accounting periods that began on or after 1 January 2018 and as such this new standard has been adopted in the current year.Under this standard revenu

105、e is recognised using a five-step model,requiring the transaction price for each identified contract to be apportioned to separate performance obligations arising under the contract.Revenue is recognised either when the performance obligation in the contract has been performed(point in time recognit

106、ion)or over time as control of the performance obligation is transferred to the customer.The new contracts we sign with our customers provide a licence for the customer to access specified products throughout their licence period.This licence period on average,for a sale to a new customer,has histor

107、ically been five years.In calculating averages,we only take the contract length up to the first renewal point/break clause for that specified product.Under the Groups Annuity SaaS business model we have always recognised software licence revenue and any minimum payments due from our other route to m

108、arket contracts evenly over the life of the underlying contract term.As well as the incremental licence revenues we generate from each new sale,we normally expect to deliver an associated professional services engagement to assist our customers.This engagement focuses on embedding the software withi

109、n the customers core processes to maximise the value the software can bring to them.This revenue is typically separately identifiable from the licence and is recognised as we deliver the service to the customer,usually on a percentage of completion basis.The nature and scope of these engagements wil

110、l vary depending on both our customers needs and which of our solutions they have contracted for.As a result of the nature of professional services engagement,the period over which we deliver the services and consequently recognise the associated revenue will vary,however we would normally expect to

111、 recognise this revenue over the first year of the contract.In any individual year,we would normally expect around 10%to 20%of revenues reported by the Group to be from services.Revenue grew 6%to$71.4m(FY18:$67.1m)and adjusted EBITDA grew 11%to$24.0m(FY18:$21.6m).Whilst this growth is lower than we

112、originally anticipated,we have continued to make progress in the year which includes making significant investments into our Trisus Enterprise Value Platform and the products that both sit on and interact with this platform.Our three year revenue visibility KPI has crossed the record level of over$2

113、00m of visible revenue for the three year period to 30 June 2022 against which we can plan our future investments and we maintain a strong balance sheet with healthy cash reserves to support our future growth.It is especially pleasing to be able to report continuing momentum with our Trisus strategy

114、.In addition to the three new products launched in the year(making a total of four Trisus products now being generally available),we have over 95%of our customer base interacting in some way with the Trisus platform through our Trisus Bridge and the total proportion of our new sales being Trisus pro

115、ducts has increased to 13%of our total new sales from 4%in Financial Year 2018.The total value of contracts signed in the year was$63.1m(FY18:$98.6m,FY17:$54.0m).A contributing factor to this result being below that of the prior year has been both the timing and contract lengths of our underlying sa

116、les.As previously detailed,with the launch of three new Trisus products in the year we experienced indigestion within both our own direct sales teams and our customer base.In addition,as anticipated,the average contract length for new sales reduced from five to four years,in line with our Trisus mig

117、ration strategy.We continue to renew our existing customers at over 100%dollar value and do not attribute any increasing risk to this variability in contract length during this migration period.We have continued to see new sales successes in the year,signing$33.3m of new total contract value with ne

118、w and existing customers.Within these new sales there has been a healthy mix between sales to new customers and sales of additional products to existing customers.45%of our new sales have been with new hospital customers which further expand our hospital footprint and provide further future cross se

119、lling opportunities.With the remaining 55%of our new sales coming from our existing customer base taking further products from our portfolio,these additional cross selling activities occur both as our customers renew their contracts(representing 41%of new sales)as well as throughout the life of thei

120、r existing contracts(representing 14%of new sales).At the end of an existing customers initial licence period,or at a mutually agreed earlier date,we renew our licences with our customers.These renewals contributed an additional$29.8m to sales in the period.By renewing these contracts,we are sustain

121、ing our underlying revenue base,onto which we are then layering new hospital sales.It is for this reason we measure our renewal rates by dollar value.We do this by measuring the last Strategic Report:Financial Review9Cranewareplc AnnualReport2019Through this metric we can demonstrate how the underly

122、ing annuity base of revenue continues to build as we sign new multi-year contracts with our customers and at the end of these contracts by,on average,renewing these customers at 100%of dollar value.In producing this KPI we assume customers will renew at 100%of dollar value as they fall due,which aga

123、in is why we report our dollar value of renewals at each reporting period.Our historical norms for this metric being between 85%and 115%,with the longer term average being above 100%.The Three Year Revenue Visibility KPI is a forward looking KPI and therefore will always include some judgement.To he

124、lp assess this,we separately identify different categories of revenue to better reflect any inherent future risk in recognising these revenues.This Three Year Visible Revenue metric includes:future revenue under contract revenue generated from renewals(calculated at 100%dollar value renewal)other re

125、curring revenueOur Annuity SaaS business model and the revenue recognition methodology we have historically adopted is consistent with the aims and requirements of IFRS15 and as such our adoption of this standard in the current financial year has not resulted in any material difference to how we rec

126、ognise and report our revenues.Sales,Revenue and Revenue Visibility The graphs below shows the total value of contracts signed in the relevant years,split between sales of new products(to both new and existing hospital customers)and the value of renewing products with existing customers at the end o

127、f their current contract terms,and how these sales have translated into reported revenue in the corresponding year.As the majority of the revenue resulting from sales in any one year is recognised over future years,the financial statements do not fully reflect the valuable asset that is contracted,b

128、ut not yet recognised,revenue.As such,at every reporting period,the Group presents its“Revenue Visibility”.This KPI identifies revenues which we reasonably expect to recognise,as of the first day of the new Fiscal Year,over the next three year period,based on sales that have already occurred.Strateg

129、ic Report:Financial Review Contd.*As the Group signs new customer contracts for between three to nine years,the number and value of customers contracts coming to the end of their term(“renewal”)will vary in any one year.This variation along with whether customers auto-renew on a one year basis or re

130、negotiate their contracts for up to a further nine years,will impact the total contract value of renewals in that year.Reported RevenueNew SalesRenewals*FY18FY19FY15FY16FY170255075Revenue$mFY18FY19FY15FY16FY17FY18FY19FY15FY16FY17025507502550750255075Revenue$m$mNew SalesFY18FY19FY15FY16FY170255075$mR

131、enewals10Cranewareplc AnnualReport2019This visible revenue breaks down as follows future revenue under contract contributing$140.2m of which$60.0m is expected to be recognised in FY20,$46.0m in FY21 and$34.2m in FY22 revenue generated from renewals contributing$59.2m;being$7.3m in FY20,$19.9m in FY2

132、1 and$32.0m in FY22 other revenue identified as recurring in nature of$0.7mGross MarginsTypically,we expect the gross profit margin to be between 90%to 95%reflecting the incremental costs we incur to obtain the underlying contracts,including sales commission contract costs which are charged in line

133、with the associated revenue recognition.The gross profit for FY19 was$67.0m(FY18:$63.7m)representing a gross margin percentage of 93.8%(FY18:94.9%)which continues to be within our historical range.This reflects the correct matching of these incremental costs with the associated revenue being recorde

134、d.Future revenue under contract is,as the title suggests,subject to an underlying contract and therefore once invoiced will be recognised in the respective future years(subject to future collection risk that exists with all revenue).Renewal revenues are contracts coming to the end of their original

135、contract term(e.g.five years)and will require their contracts to be renegotiated and renewed for the revenue to be recognised.As this category of revenue is assumed to renew at 100%of dollar value,we consistently monitor and publish this KPI(at each reporting period)to ensure the reasonableness of t

136、his assumption.The final category,other recurring revenue,is revenue that we would expect to recur in the future but is monthly or transactional in its nature and as such there is increased potential for this revenue not to be recognised in future years,when compared to the other categories.The Grou

137、ps total visible revenue for the three years as at 30 June 2019 (i.e.visible revenue for FY20,FY21 and FY22)identifies$200.1m of revenue which we reasonably expect to benefit the Group in this next three year period.Strategic Report:Financial Review Contd.0102030405060$m50.15.70.238.814.90.229.024.6

138、0.3ContractedRenewalsOther recurring revenueFY18FY19FY20010203040506070010203040506070010203040506070$m60.07.30.346.019.90.234.232.00.2ContractedRenewalsOther recurring revenueThree Year Visible RevenueAs at 30 June 2019FY22FY20FY21Three Year Visible RevenueAs at 30 June 201911Cranewareplc AnnualRep

139、ort2019Build is often the best way forward.We undertake the development of innovative new products whilst maintaining our current product offerings and ensuring they remain market-leading.As a result of this investment the total cost of development in the year was$20.0m(FY18:$17.9m),a 12%increase wh

140、ich is ahead of our revenue growth and reflective of the opportunities in the market for our products.From this total investment we have capitalised projects that will bring future economic benefit to the Group including the development of the new product offerings(“Build”),e.g.new Trisus products;t

141、he Trisus Bridge extension of the Trisus platform and our new cost analytics and Trisus Healthcare Intelligence products.With the significant investment into our development and product management teams we have ensured costs relating to expanding and training the new teams are not capitalised.As a r

142、esult the total amount capitalised in the year was$9.6m(FY18:$4.7m).Amounts capitalised represent investment in our future.They are an efficient and cost effective way to further build out our Value Cycle strategy.We expect to see both the levels of development expense and capitalisation continue at

143、 the current trends as we progress with building out this solution set.As specific products are made available to relevant customers,the associated amounts capitalised are charged to the Groups income statement over their estimated useful economic life.Cash and Bank FacilitiesAn area of focus will a

144、lways be our ability to convert our earnings into cash.To this end we set ourselves a target in this area,to convert 100%conversion of our earnings into cash.In prior years we have exceeded this target,in FY18 reaching 153%conversion(or approximately$11m over our 100%conversion target).This success

145、though inevitably has a knock on effect;as we expect a long term average of 100%,the success in FY18 impacted the cash collection in FY19.This impact was further compounded by the proportion of our second half sales that occurred late in that half and as a result were not due for collection at the e

146、nd of the fiscal year,resulting in lower cash collections in the year and a higher year end debtors balance.As a result of these two factors,and the acquisition costs of$1.2m detailed above,our adjusted EBITDA to cash conversion in the year was 63%.Whilst below our own target,we have collected a fur

147、ther$8.5m of our year end debtors.Had these collections been included we would have delivered a 98%cash conversion in the current year.During the year we have returned$8.5m to our shareholders via dividends.As a result of all these factors,we retain cash reserves of$47.6m (FY18:$52.8m).This signific

148、ant level of cash reserves and our balance sheet strength allows us to fund acquisitions should suitable opportunities arise.To supplement these reserves,the Group retains a funding facility from the Bank of Scotland of up to$50m.Whilst no draw down of this facility occurred in the year,the Group co

149、ntinues to investigate strategic opportunities to add to the Value Cycle strategy.EarningsThe Group presents an adjusted earnings figure as a supplement to the IFRS based earnings figures.The Group uses this adjusted measure in its operational and financial decision-making as it excludes certain one

150、-off items,so as to focus on what the Group regards as a more reliable indicator of the underlying operating performance.We believe the use of this measure is consistent with other similar companies and is frequently used by analysts,investors and other interested parties.Adjusted earnings represent

151、 operating profits excluding costs incurred as a result of acquisition and share related activities(if applicable in the year),share related costs including IFRS 2 share based payments charge,interest,depreciation and amortisation(“Adjusted EBITDA”).This fiscal year we incurred$1.2m(FY18:nil)of prof

152、essional and other fees relating to a significant proposed acquisition that ultimately the Board decided not to enter into in the year under review.Whilst these costs have impacted our cash generation in FY19,they are non-recurring in nature and outside of our normal operations,as such we have adjus

153、ted earnings for these amounts in presenting Adjusted EBITDA.Adjusted EBITDA has grown in the year to$24.0m(FY18:$21.6m)an increase of 11%.This reflects an Adjusted EBITDA margin of 33.6%(FY18:32.2%).This is consistent with the Groups continued approach to making investments in line with the revenue

154、 growth whilst monitoring our overall EPS growth.Operating ExpensesWe continually invest in the future growth of the Group.Our customers are facing a market that continues to evolve towards value-based economics and the Group is in a unique position with its Value Cycle strategy to help them meet th

155、e challenges of these new reimbursement models.If we are to deliver on our potential to both support our customers in this evolving market place and address the market opportunity available to us,we must ensure we are building a scalable business that can meet the future challenges our growth will b

156、ring.To do this the Group continues to invest in all areas of the business in line with revenue growth whilst also takes opportunities where they arise,to accelerate investments that will generate further growth whilst continually managing to ensure the efficiency of the investments we make.The incr

157、ease in net operating expenses(to Adjusted EBITDA)of 2%to$43.0m(FY18:$42.0m)reflects the balanced approach taken in the current year between continued investment and delivering returns from previous investments in new products as we start to see revenue and the associated impact the resulting amorti

158、sation charge has on earnings.As detailed in the Operating Review,product innovation and enhancement continues to be core to the Groups future;as such we continue to invest significant resource in this area as we build out the Trisus platform and the portfolio of products that will be part of this p

159、latform.We continue our Build,Buy or Partner strategy to build out this portfolio of products,recognising Strategic Report:Financial Review Contd.12Cranewareplc AnnualReport2019Strategic Report:Financial Review Contd.Balance Sheet The Group maintains a strong balance sheet position.The level of trad

160、e and other receivables has increased in comparison to the prior year.This is a result of the factors identified above that impacted our cash collection in the year.IFRS 15“Revenue from contracts with customers”also addresses how reporting entities should treat incremental contract costs such as sal

161、es commissions.It is again pleasing to report that adoption of this standard has not resulted in any changes to our accounting treatment in this area.The sales commissions we pay are based on the total value of the contract sold;however for the purposes of the Statement of Comprehensive Income,a low

162、er proportion of revenue from the contract value is recognised in the year.As a result we charge an equivalent percentage of the sales commission,thereby properly matching revenue and incremental expense.The resulting deferred contract asset of$7.3m(FY18:$7.5m)is the balance to be charged to the Gro

163、ups income statement as we recognise the associated revenue.As we only pay the sales commission upon receipt of the first annual payment from the customer,we remain cash flow positive from any new sale.Deferred income levels reflect the amounts of the revenue under contract that we have invoiced and

164、/or been paid for in the year,but have yet to recognise as revenue.This balance is a subset of the total visible revenue we describe above and reflected through our three year visible revenue metric.Deferred income,accrued income and the prepayment of sales commissions all arise as a result of our A

165、nnuity SaaS business model described above and we will always expect them to be part of our balance sheet.They arise where the cash profile of our contracts does not exactly match how revenue and related expenses are recognised in the Statement of Comprehensive Income.Overall,levels of deferred inco

166、me are significantly more than any accrued income and the prepayment of sales commissions,we therefore remain cash flow positive in regards to how we account for our contracts.CurrencyThe functional currency for the Group,and cash reserves,is US dollars.Whilst the majority of our cost base is US-loc

167、ated and therefore US dollar denominated,we have approximately one quarter of the cost base situated in the UK,relating primarily to our UK employees which is therefore denominated in Sterling.As a result,we continue to closely monitor the Sterling to US dollar exchange rate,and where appropriate co

168、nsider hedging strategies.The average exchange rate throughout the year being$1.2945 as compared to$1.3472 in the prior year.TaxationThe Group generates profits in both the UK and the US.The overall levels are determined by both the proportion of sales in the year and the level of professional servi

169、ces income recognised.The Groups effective tax rate remains dependent on the applicable tax rates in these respective jurisdictions.In the current year the effective tax rate has been affected by share options issued and exercised in the year which reduced the tax charge by$0.4m(FY18:$1.4m)and R&D t

170、ax relief of$0.4m(FY18:$0.3m)which further reduced the tax charge.As such the current year effective tax rate is 18%(FY18:17%).EPSIn the year being reported adjusted EPS has seen the benefit of the increased levels of Adjusted EBITDA combined with the effective tax rate reported above,offset by an i

171、ncrease in both the amortisation and share based payment charges,and as such has increased 5%to$0.633(FY18:$0.602)and adjusted diluted EPS has increased to$0.620(FY18:$0.591).DividendThe Board proposes a final dividend of 15p(19.05 cents)per share giving a total dividend for the year of 26p(33.02 ce

172、nts)per share(FY18:24p(31.68 cents)per share).Subject to approval at the Annual General Meeting,the final dividend will be paid on 19 December 2019 to shareholders on the register as at 29 November 2019,with a corresponding ex-Dividend date of 28 November 2019.The final dividend of 15p per share is

173、capable of being paid in US dollars subject to a shareholder having registered to receive their dividend in US dollars under the Companys Dividend Currency Election,or who register to do so by the close of business on 29 November 2019.The exact amount to be paid will be calculated by reference to th

174、e exchange rate to be announced on 29 November 2019.The final dividend referred to above in US dollars of 19.05 cents is given as an example only using the Balance Sheet date exchange rate of$1.2695/1 and may differ from that finally announced.Outlook The ongoing transition to value-based care is a

175、powerful underlying driver for our software,as healthcare providers seek the means not only to survive but thrive in this new era.We are committed to providing our customers with the tools they require to continue to deliver outstanding care to their communities and are passionate about the central

176、role we will play in this substantial evolution of the US healthcare market.While growth in the year was lower than originally anticipated,renewal levels remained strong and our Trisus related sales and revenues continued to increase,providing us with a strong platform for the future.We have entered

177、 the new financial year with an uptick in sales momentum.We are focused on the delivery of our growing opportunity and have the correct strategy to succeed.With growing levels of contracted future revenue,strong operating margins,healthy cash balances and a growing sales pipeline,we look to the comi

178、ng years with confidence and high levels of excitement for the opportunity ahead.Keith Neilson Chief Executive Officer 2 September 2019Craig Preston Chief Financial Officer 2 September 201913Cranewareplc AnnualReport2019Strategic Report:Key Performance Indicators and Principal Risks and Uncertaintie

179、sKey Performance Indicator ReviewRevenue Growth20192018Revenue$71.4m$67.1mGrowth6%16%Revenue for the year grew by 6%.Through the Groups Annuity SaaS revenue recognition model,underlying sales levels in the current year combine with prior years sales and continued high levels of customer retention,to

180、 increase the recurring revenue reported each year.The long term nature of our contracts supports sustainable growth with the majority of revenue resulting from current year sales being recognised in future periods.Three Year Revenue Visibility20192018Three Year Revenue Visibility$200.1m$191.0mThe G

181、roups revenue recognition model means the full benefit of current years sales are not reflected in the current year financial statements.Instead,the vast majority of any new sales adds to the growth in the underlying annuity of recurring revenue.This is demonstrated through the Groups Three Year Rev

182、enue Visibility KPI.This metric compares the growth in the three years contracted revenue,revenue subject to renewal and other recurring revenue,for the same three year period starting 1 July 2019.Full details of how this is calculated are detailed in the financial review section of the Strategic Re

183、port.Adjusted EBITDA Growth20192018Adjusted EBITDA$24.0m$21.6mGrowth11%20%We take a measured approach to our investment,ensuring to invest to support the future growth of the Group.The continued revenue growth has allowed us to both continue and in certain areas accelerate this investment whilst del

184、ivering Adjusted EBITDA growth.By taking this approach,we aim to release additional investment,in line with revenue growth,with the focus on delivering profitable growth to all stakeholders.Adjusted EPS20192018Adjusted EPS63.3 cents60.2 centsGrowth5%17%Adjusted EPS growth demonstrates the Groups ove

185、rall profitability after taking into account the taxation in the year and any changes in share capital.The Group generates profits in both the UK and the US.The Groups effective tax rate remains dependent on the applicable tax rates in each respective jurisdiction.Cash20192018Cash$47.6m$52.8mThe Gro

186、up continues to convert very high levels of the Adjusted EBITDA reported in the year into operating cash flows which,having returned$8.5m to shareholders by dividend during the year,has resulted in cash balances of c$48m at 30 June 2019.Overall Operating cash conversion,at 63%in the year ended 30 Ju

187、ne 2019,is below our current long term target of 100%for the reasons explained in the Financial Review section on page 11.14Cranewareplc AnnualReport2019Strategic Report:Key Performance Indicators and Principal Risks and Uncertainties Contd.Principal Risks and Uncertainties To deliver continued sust

188、ainable growth,the Group recognises the need to minimise the likelihood and impact of key risks.These risks are both general in nature i.e.,business risks faced by all businesses,and more specific to the Group and the market in which it operates.The Corporate Governance Report on pages 24 to 31 incl

189、udes an overview of the Groups risk management and internal control systems.The risks outlined here are those principal risks and uncertainties that are material to the Group.They do not include all risks associated with the Group and are not set out in any order of priorityData and cyber securityIs

190、sue:Security of customer,commercial,and personal data poses increasing reputational and financial risk to all businesses,especially against a backdrop of increasing complex regulatory environments and safeguards over personal and patient data.The continually increasing instances of cyber and data-re

191、lated crime presents a significant challenge in terms of securing data and systems against attack.Actions:Whilst it is impossible to completely eliminate data and cyber security risk,it is clear that effective mitigation now goes beyond building and operating security controls.The Group continues to

192、 invest in strict physical and data security systems and protocols,including data loss prevention systems,internal and external threat monitoring.We deploy comprehensive auditing of our controls and processes targeted in these areas.The Group has a Security Council,chaired by the Chief Information O

193、fficer,which assesses current technology risks,approval and implementation of mitigation plans as well as to inform the Chief Information Officer and the Chief Technology Officer of future strategy around this key business area.The Group also recognises and supports(including through ongoing employe

194、e training and applicable policies and procedures)a sustained evolution of culture within the organisation that embeds security across the business.Along that vein,as many studies suggest that employees and contractors are the most common cause of data breaches,with phishing attacks being the predom

195、inant cause,the Group requires mandatory data security training of all employees and continues to develop and invest in additional training.In view of the importance of the procedures,security,regulation and controls around Cranewares solutions and customer data,Craneware is in final stages of and a

196、waiting accreditation for the HITRUST CSF.Health Information Trust Alliance(HITRUST Alliance)is a collaboration with healthcare,technology and information security organisations which develops,maintains and provides broad access to its widely adopted common risk and compliance management and de-iden

197、tification frameworks;related assessment and assurance methodologies;and initiatives advancing cyber sharing,analysis and resilience.HITRUST has established a common security framework(CSF)to address the multitude of security,privacy and regulatory challenges facing organisations.The scope of the HI

198、TRUST CSFs requirements is wide and requires a very high standard of data security arrangements as these have been set in the context of the accreditation being relevant to US healthcare providers with handling sensitive data(Protected Health Information)and impacts in some way all areas of the busi

199、ness(at least in respect of the required enhancement to the Group-wide IT and data security policies).This serves to inform IT Security roadmaps and significant investments with continued compliance being an ongoing a focus.Intellectual Property RiskIssue:Failure to protect,register and enforce(if a

200、ppropriate)the Groups Intellectual Property Rights could materially impact the Groups future performance.The use of third party contractors within the Groups software development organisation as well as increasing numbers of customers using outsourced partners to operate parts of their finance depar

201、tments,results in a larger number of third parties having access to the Groups Intellectual Property.Actions:The Group will continue to register its trademarks and protect access to its confidential information,as appropriate.The Group continues to include appropriate legal protections in its contra

202、ctual relations with both customers,suppliers,and employees to ensure legal protections available are taken advantage of.The Group would vigorously defend itself against a third-party claim should any arise.The Group also has in place strict physical and data security processes and encryption to pro

203、tect its intellectual property.Management of GrowthIssue:The Groups growth and its plans for further significant growth,both organically and through acquisition,could place strain on the Groups resources including management bandwidth.Actions:The Group has continued to make significant investments t

204、o both add to available resources as well as provide further improvements to the training of existing resources.This training has included focused Leadership Development training and Connector Manager Forums,where managers can support each other in the challenges they face.These initiatives,combined

205、 with appropriate organisational design that includes monitoring of spans of control to ensure that the scope of roles and responsibilities are not 15Cranewareplc AnnualReport2019Strategic Report:Key Performance Indicators and Principal Risks and Uncertainties Contd.excessive,all aim to increase ban

206、dwidth at all levels of management up to and including the Board of Directors.The Groups Annuity SaaS business model combined with the detailed forecasting processes provides visibility to expected growth rates.This visibility provides a foundation when planning in advance,including any additional r

207、esourcing necessary as a result of this growth.The Group has in place strategies to ensure a supportive infrastructure for growth.This includes adopting“Lean”methodologies to help promote operational excellence throughout the organisation as well as ensuring assessments are regularly performed and i

208、mprovements are made,as appropriate to systems,policies,procedures including business controls being upgraded.US Healthcare Evolution and ReformIssue:The US healthcare industry continues to evolve,with a drive for increased value from healthcare spend and a shift towards consumerisation.The US healt

209、hcare market is subject to continual change and as such could impact the Groups market opportunity.Actions:The Group has taken steps to ensure it stays at the forefront of how the industry is interpreting current proposals and actions they are taking.It has and it continues to develop significant in

210、dustry expertise at all levels of management including the Board of Directors.It actively promotes developing further experience throughout the wider organisation by,amongst other things:key hires adding to the industry expertise across the Group,both at operational and strategic levels;having indep

211、endent industry experts attend and speak at internal and external Company events;regular attendance by senior management at healthcare forums and industry education events;and customer forums.The Groups Value Cycle strategy and the launch of the Trisus platform strengthens our position as a trusted

212、financial performance partner to hospitals and it continually enhances and expands its product offerings,launching three new Trisus products in the current year under review,to meet the evolving challenges.In addition,the Group continues to innovate and develop further new products to meet evolving

213、market needs,such as the ongoing development of the Groups new product in the cost analytics area.These strategies keep the Group at the forefront of industry developments.Regulatory EnvironmentIssue:The Group operates in an increasingly complex and heavily regulated market environment.This includes

214、 very specific requirements in dealing with,for example,data privacy,security,labour/employment,anti-kickback statutes.Actions:The Group has a Risk and Governance Committee,comprised of the Chief Information Officer,Chief People Officer,Chief Financial Officer,and the Chief Legal Officer to oversee

215、activities and concerns pertaining to the strict regulatory environment.All employees and contractors are required to undertake regular mandatory training in key topics.The Chief Legal Officer is certified in privacy law in the US and UK.In addition to utilising external experts in the relevant area

216、s,senior management regularly attend educational events and forums to keep up to date with evolving regulations.Political and Macroeconomic ChangesIssue:The Group has significant operations in both the UK and the US and therefore is exposed to the changes in the political and economic environments o

217、f both.This includes the ongoing Brexit negotiations and any changes in freedom of movement and international trade.Actions:The Group has experienced Board members and senior management in both countries.The Groups operations are currently evenly balanced between the two,contributing positively to b

218、oth economies.Globally there is a restricted supply of qualified personnel within the technology sector.Political uncertainty in the world can exacerbate this situation within specific geographies.To ensure the ongoing availability of qualified personnel,the Group continues to support training progr

219、ams both internally and externally as well as develop partnerships with private enterprise.As the Group is a manufacturer in the knowledge economy,we are agnostic to the territory that we are ultimately domiciled in and therefore can mitigate any long term economic or political detrimental change by

220、 adjusting the balance of the organisation accordingly.This combined with the current multi-jurisdictional operations of the business substantially mitigates the Groups exposure to foreign exchange rates and risk to cross border trade which can be volatile in times of uncertainty.The Group continues

221、 to monitor emerging news and trends to stay alert to any potential future impacts.Market ConsolidationIssue:The evolving market in US Healthcare continues to place significant pressure on Healthcare providers,which is resulting in ongoing market consolidation.As a result,the Groups market is increa

222、singly dominated by larger hospital networks.Failure to enhance products,ensure scalability or add to the current product suite could significantly limit the Groups market opportunity and leave it unable to meet its customers evolving needs.Actions:The Groups value cycle strategy and Trisus platform

223、,combined with the continued evolution of the product suite,positions the Group at the forefront of providing solutions to US Healthcare providers of all sizes.16Cranewareplc AnnualReport2019Strategic Report:Key Performance Indicators and Principal Risks and Uncertainties Contd.Competitive Landscape

224、Issue:New entrants to the market or increased competition from existing competitors could significantly impact the Groups market opportunity.Actions:The Group continually monitors its competitive landscape,including both existing and potential new market entrants.Significant barriers to entry contin

225、ue to exist,including but not limited to the significant data content built over the Groups history that exists within its products.The Group continues to expand and develop its product portfolio and to ensure its products are platform agnostic,c and actively seeks partnerships with other healthcare

226、 IT vendors.Acquisition RiskIssue:The Group has a stated acquisition strategy.Any acquisition carries with it an inherent risk,including failure to identify material matters that could adversely affect future Group performance.Actions:The Group and Board members individually have relevant experience

227、 in regards to completing acquisitions and this experience has been added to in recent years through key appointments to the Operations Board.In addition,and where appropriate,the Board appoints independent professional advisors to assist in the consideration of potential acquisitions and to assist

228、management in the due diligence process.The principal financial risks are detailed in Note 3 to the financial statements.How the Board determines and manages risks is detailed in the Corporate Governance report on pages 24 to 31.In summary,and as explained in the Operational Review section of this S

229、trategic Report,the US healthcare market is not immune to the macro-economic climate and,with the increasing focus and requirements of the evolving healthcare marketplace,the Group expects the market to continue to be competitive.The Group aims to remain at the forefront of product innovation and de

230、livery,through a combination of in-house development and specific acquisition opportunities.This requires the recruitment,retention,and reward of skilled employees,alongside responsiveness to changes,and the opportunities that result,as they arise.Craig Preston Chief Financial Officer 2 September 20

231、1917Cranewareplc AnnualReport2019 Directors,Secretary,Advisors and SubsidiariesDirectorsG R Elliott(non-executive,Chairman)K Neilson C T Preston R F Verni(non-executive)C Blye(non-executive)R Rudish(non-executive)Company Secretary&Registered OfficeC T Preston1 Tanfield Edinburgh EH3 5DANominated Adv

232、isorsPeel Hunt LLP120 London Wall London EC2Y 5ETRegistrarsLink Asset Services LtdThe Registry 34 Beckenham Road Beckenham Kent BR3 4TUBankersBank of ScotlandThe Mound Edinburgh EH1 1YZThe Royal Bank of Scotland plc36 St.Andrew Square Edinburgh EH2 2YBClydesdale Bank20 Waterloo Street Glasgow G2 6DB

233、Barclays Commercial BankAurora House 120 Bothwell Street Glasgow G2 7JTHSBC Bank plc7 West Nile Street Glasgow G1 2RGStockbrokersPeel Hunt LLP120 London Wall London EC2Y 5ETInvestec Bank plc30 Gresham Street London EC2V 7QPIndependent AuditorsPricewaterhouseCoopers LLPChartered Accountants&Statutory

234、 Auditors Atria One 144 Morrison Street Edinburgh EH3 8EXSolicitorsPinsent Masons LLPPrinces Exchange 1 Earl Grey Street Edinburgh EH3 9AQSubsidiaries and Registered OfficesCraneware,Inc.3340 Peachtree Rd NE Suite 850 Atlanta,GA 30326Craneware InSight,Inc.3340 Peachtree Rd NE Suite 850 Atlanta,GA 30

235、326Kestros Ltd t/a Craneware Health1 Tanfield Edinburgh EH3 5DACraneware Healthcare Intelligence,LLC12570 Perry Highway Suite 110 Wexford,PA 1509018Cranewareplc AnnualReport2019Board of DirectorsGeorge R Elliott,66 Non-Executive Chairman:Appointed 10 August 2007George Elliott has a proven track reco

236、rd in profitably growing technology companies.His main achievements have centred around building and bringing to market companies that compete and win on the global stage.George is currently non-executive Chairman of Calnex Solutions Ltd,an Ethernet test equipment manufacturer,Optoscribe Ltd,which p

237、rovides high performance 3D waveguide solutions for the data and telecommunication industries,Design Led Productions Ltd,which provides extremely thin,flexible LED lighting solutions and a non-executive director of Indigovision Group plc,a leader in the design and manufacture of high performance vid

238、eo security systems.Since 2007 he has been non-executive chairman/director of over 20 companies.From 2000-2007 George was CFO of Wolfson Microelectronics plc,which was a leading global provider of high performance mixed-signal semiconductors to the consumer electronics market.From 1996-2000 he was D

239、irector of Commercial Operations and latterly CFO at Calluna plc,which developed the first 1.8-inch hard disk drive that was later used in several leading MP3 players and storage devices.George,formerly a partner of Grant Thornton,is a member of the Institute of Chartered Accountants of Scotland and

240、 has a degree in Accountancy and Finance from Heriot-Watt University.Keith Neilson,50 Chief Executive Officer&Co-founderKeith co-founded Craneware in 1999 and has served as its CEO ever since.Under Keiths guidance,Craneware became recognised as the pioneer in value cycle management and a leading pro

241、vider of superior products and professional services.Keiths direction has helped Craneware to win multiple prestigious awards in such areas as international achievement,business growth strategy and innovation.Keith was named The Entrepreneurial Exchanges“Emerging Entrepreneur of the Year 2003”and wa

242、s a finalist in the 2004 World Young Business Achiever Award,winning the Award of Excellence in the Business Strategy category.He received the UK Software&Technology Entrepreneur of the Year Award from Ernst&Young in 2008 and was the Insider Elite Young Business Leader of the Year in 2009.Prior to l

243、aunching Craneware,Keith worked primarily in international management,where he handled sales,marketing and technical consulting for companies with operations around the world.He studied Physics at Heriot-Watt University,Edinburgh,receiving a bachelors degree in 1991.Keith is an active member of the

244、Young Presidents Organisation(YPO),a syndicate member and Partner in Par Equity LLP,a CBI Scotland Council Member and a board member of the Scottish North American Business Council(SNABC).Keith is also proud to be a Patron of the Princes Trust and a Trustee of the Polar Academy both charitable organ

245、isations that work for the benefit of young people.Craig T Preston,48 Chief Financial Officer:Appointed 15 September 2008Craig was appointed to the Board on 15 September 2008,just as the company was entering its second year as a publicly traded corporation on the London Stock Exchange.As CFO,he dire

246、cts Cranewares financial operations in both the United Kingdom and United States.Craig has significant experience in senior financial roles with other private and public technology companies,including those with a multi-national presence.Prior to Craneware,he was group director of finance and compan

247、y secretary at Intec Telecom Systems plc.Earlier,he served as corporate development manager at London Bridge Software plc.During his time there,he also held the role of CFO for Phoenix International,a previously NASDAQ-traded software company,following its acquisition by London Bridge.Earlier in his

248、 career,Craig worked for Deloitte in both the United Kingdom and United States.Craig has a degree in Accounting and Financial Management from the University of Sheffield.He is also a member of the Institute of Chartered Accountants in England and Wales.The Directors of the Company and their responsi

249、bilities within the Group are set out below:19Cranewareplc AnnualReport2019Ron F Verni,71 Non-Executive Director:Appointed 1 May 2009Ron is currently a director of On Deck Capital.Before that he served on the Board of Directors of Kewill Plc.,was President&CEO of Sage Software,Inc.,and a member of t

250、he Board of Directors of the Sage Group plc.Prior to Sage Software,Ron was President and CEO of Peachtree Software,Inc.,a leading pioneer in business management solutions for small to medium size businesses.Ron also was the President and CEO of NEBS Software,Inc.,the founder and CEO of ASTEC Softwar

251、e,and Vice President of Marketing with Automatic Data Processing.Colleen Blye,59 Non-Executive Director:Appointed 12 November 2013Colleen Blye is the Executive Vice President and Chief Financial Officer for Montefiore Health System and Montefiore Medicine.Montefiore Health System consists of eleven

252、hospitals and an extended care facility;it is a premier academic medical center and includes Montefiore Medicine.Colleen has a distinguished background in large,complex healthcare organizations.Prior to joining Montefiore,she served as Executive Vice President and Chief Financial Officer of Catholic

253、 Health Services of Long Island,an integrated healthcare delivery system comprising six hospitals and three nursing homes.Earlier,she served as Executive Vice President for Finance and Integrated Services at Catholic Health Initiatives,a health system with 102 hospitals across the United States.Her

254、previous experience includes responsibility for treasury management,revenue cycle,financial reporting and planning,third-party contracting,supply chain,accounts payable,payroll,and information technology.Colleen Blye is a Certified Public Accountant and a member of the American Institute of Certifie

255、d Public Accountants and the Healthcare Financial Management Association.Russ Rudish,67 Non-Executive Director:Appointed 28 August 2014Russ Rudish has more than 30 years experience in serving the healthcare industry,both in the United States and internationally.Russ holds a directorship in Rudish He

256、alth Solutions,LLC,and StarBridge Advisors,LLC,both healthcare professional services firms.Russ is also a principal in Healthcare IT Leaders and Run Consultants,both of which provide IT staff augmentation services.Between 2006 and 2014,Russ served as partner and Global Sector Leader for Healthcare a

257、t Deloitte Touche Tohmatsu,where he led the$2 billion global consulting,audit,tax and financial advisory business,developing the firms global health care strategy.He is an active speaker and contributor to thought leadership on todays most pressing healthcare business issues.Board of Directors Contd

258、.20Cranewareplc AnnualReport2019The Directors present herewith their report and the audited consolidated financial statements for the year ended 30 June 2019.Principal Activities and Business ReviewThe Groups principal activity continues to be the development,licensing and ongoing support of compute

259、r software for the US healthcare industry.The Company is required by the Companies Act to include a business review in this report.This includes an analysis of the development and performance of the Group during the financial year and its position at the end of the financial year,including relevant

260、key performance indicators(principally revenue,adjusted operating profit(before exceptional costs and share related payments,share based payments,depreciation and amortisation),visibility of revenue over the next three years and cash generation during the year).Detailed information on all matters re

261、quired is presented in the Strategic Report contained in pages 5 to 16 and is incorporated into this Report by reference.A description of the principal risks and uncertainties facing the Group is also presented in the Strategic Report.Where the Directors Report,Chairmans Statement and Operational Re

262、view contain forward looking statements,these are made by the Directors in good faith,based on the information available to them at the time of their approval of this Report.Consequently,such statements should be treated with caution due to their inherent uncertainties,including both economic and bu

263、siness risk factors underlying such forward looking statements or information.Financial Results and DividendsThe Groups revenue for the year was$71.4m(2018:$67.1m)which has generated a profit before tax of$18.3m(2018:$18.9m).The full results for the year,which were approved by the Board of Directors

264、 on 2 September 2019,are set out in the accompanying financial statements and the notes thereto.During the year the Company paid an interim dividend of 11p(14.00 cents)per share.The Directors are recommending the payment of a final dividend of 15p(19.05 cents)per share giving a total dividend of 26p

265、(33.02 cents)per share based on the results for 2019(2018:24p(31.68 cents).Subject to approval at the Annual General Meeting,the final dividend will be paid on 19 December 2019 to shareholders on the register as at 29 November 2019.24.026.0*14.0FY19FY15FY16FY17Dividends/Share(pence)*Subject to appro

266、val at AGM16.520.0FY18The level of dividend proposed for the year continues the Companys stated progressive dividend policy based on the Groups retained annual earnings.The level of distributions will be subject to the Groups working capital requirements and the ongoing needs of the business.Directo

267、rs ReportResearch and Development ActivitiesThe Group continues its development programme of software products for the US healthcare market.The primary focus of this development continues to be the enhancement and expansion of the product suite to support the Groups Value Cycle strategy.Full details

268、 of the development activities and the Groups roadmap is provided in the Strategic Report contained in pages 5 to 16.The Directors regard investment in development activities as a prerequisite for success in the medium and long-term future.During the year development expenditure amounted to$20.0m(20

269、18:$17.9m)of which$9.6m(2018:$4.7m)has been capitalised.Financial InstrumentsThe financial risk management strategy of the Group,its exposure to currency risk,interest rate risk,counterparty risk and liquidity is set out in Note 3 to the financial statements.Going ConcernThe Strategic Report on page

270、s 5 to 16 contains information regarding the Groups activities and an overview of the development of its products,services and the environment in which it operates.The Groups revenue,operating results,cash flows and balance sheet are detailed in the financial statements and explained in the Financia

271、l Review on pages 8 to 12.The Directors,having made suitable enquiries and analysis of the financial statements,including the consideration of:net cash reserves;continued cash generation;and Annuity SaaS business model;have determined that the Group has adequate resources to continue in business for

272、 the foreseeable future and that it is therefore appropriate to adopt the going concern basis in preparing the consolidated and Company financial statements.Viability StatementIn accordance with the UK Corporate Governance Code,the Directors have considered the viability of the Group over the three

273、year period from 30 June 2019.Considerations that impact this assessment include the Groups current financial position and available financial resources,the Groups Annuity SaaS business model(as outlined within the Strategic Report on pages 8 to 12)including Revenue Visibility,the Groups strategic i

274、nitiatives,the financial forecasts,the Groups cost base and annual budget.The Directors also considered a number of other factors including the Groups risk management and internal control effectiveness and the principal risks and uncertainties and their likelihood of occurrence within the period of

275、assessment.The Directors consider that three years is an appropriate period for this assessment as it corresponds with the Three Year Revenue Visibility key performance indicator,as explained in the Strategic Report on pages 8 to 12 and the strategic planning horizon.21Cranewareplc AnnualReport2019D

276、irectors Report Contd.The Directors have therefore considered,in making this assessment,the Groups current financial position and future prospects and have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the three year peri

277、od from 30 June 2019.However,future assessments of the Groups prospects are naturally subject to uncertainty that increases with time and therefore future performance cannot be guaranteed.DirectorsThe Directors of the Company are listed on pages 18 and 19.The Directors have the power to manage the b

278、usiness of the Company,subject to the provisions of the Companies Act,the Memorandum and Articles of Association of the Company,and to any directions given by special resolution,including the Companys power to purchase its own shares.The Companys Articles of Association may only be amended by a spec

279、ial resolution of the Companys shareholders.Details of the Directors service contracts and their respective notice terms are detailed in the Remuneration Committees Report on page 35.Share CapitalThe Companys issued and fully paid up share capital at 30 June 2019 was 26,698,984 Ordinary Shares of 1p

280、 each(2018:26,662,271 Ordinary Shares).The shares are traded on the Alternative Investment Market(AIM),a market operated by the London Stock Exchange.The Companys Articles of Association,which are available on the Companys website,contain the details of the rights and obligations attached to the sha

281、res.Share buybackThe Company did not purchase any of its own shares in the year ended 30 June 2019.During the prior financial year,in January 2018,the Company announced and completed a share buyback that was effected as a mechanism to return capital to shareholders and to ameliorate dilution under t

282、he Groups share incentive plans.In accordance with that share buyback,the Company purchased 628,869 of its own shares during the financial year ended 30 June 2018,at 1769 pence per share which totalled 11.1 million($15.4 million).The nominal value of those shares was 6,289($8,725)and they represente

283、d 2.33%of the Companys issued Ordinary Shares at that time.The shares purchased by the Company in the year ended 30 June 2018 were immediately cancelled.Authority for purchase of own sharesAuthorisation was given by shareholders at the Annual General Meeting on 6 November 2018 for the Company to pur

284、chase up to 2,669,898 Ordinary Shares.A resolution to renew this authority will be proposed at the 2019 Annual General Meeting.Share capital allottedDuring the year,36,713 Ordinary Shares(2018:329,431 Ordinary Shares)were allotted to satisfy employee share options which were exercised in accordance

285、with The Craneware plc Employees Share Option Plan 2007.Details of the Companys employee share plans,including the number of ordinary shares subject to employee share plan awards,are included in Note 8 to the financial statements.Employee benefit trust The Company established an Employee Benefit Tru

286、st(EBT),The Craneware plc Employee Benefit Trust during the financial year ended 30 June 2017.As at 30 June 2019 the EBT held 353,124 Craneware plc Ordinary Shares(at 30 June 2018:353,124 Ordinary Shares).The EBT waived its right to dividends in the year ended 30 June 2019.Further details regarding

287、the EBT are contained in Note 18 to the financial statements.Directors and their InterestsThe interests of the Directors who held office at 30 June 2019 and up to the date of this report in the share capital of the company,were as follows:-20192018G R Elliott10,00010,000K Neilson3,382,6473,377,799CT

288、 Preston82,10382,1033,474,7503,469,902Directors interests in share options are detailed in the Remuneration Committees Report on pages 37 to 38.Substantial ShareholdersAs at 1 August 2019,the Company had been notified of the following beneficial interests in 3%or more of the issued share capital pur

289、suant to section 793 of the Companies Act 2006:No.of Ordinary 0.01 Shares%of issued share capitalLiontrust Asset Management3,479,62013.03K Neilson3,382,64712.67Canaccord Genuity Group2,737,00510.25W G Craig2,379,5188.91Sanford DeLand Asset Management1,274,6054.77AXA Investment Managers1,045,5563.92B

290、aillie Gifford&Co Ltd896,4793.36D Paterson873,8003.2722Cranewareplc AnnualReport2019Indemnity of Directors and OfficersUnder the Companys Articles of Association and subject to the provisions of the Companies Act,the Company may and has indemnified all Directors or other officers against liability i

291、ncurred by them in the execution or discharge of their duties or exercise of their powers,including but not limited to any liability for the costs of legal proceedings where judgement is given in their favour.This indemnity was in place during the financial year and is ongoing up to the date of this

292、 report.In addition,the Company has purchased and maintains appropriate insurance cover against legal action brought against Directors and officers.Corporate Social Responsibility&Environmental PolicyThe Group is committed to maintaining a high level of social responsibility.It is the Groups policy

293、to support and encourage environmentally sound business operations,with aspects and impact on the environment being considered at Board level.Recognising that the Groups operations have minimal direct environmental impact,the Group aims to ensure that:it meets all statutory obligations;where sensibl

294、e and practical,it encourages working practices,such as teleconferencing,teleworking and electronic information exchange that reduce environmental impact;and recycles waste products wherever possible,encouraging use of environmentally friendly materials,and disposing safely of any non-recyclable mat

295、erials.CustomersThe Group treats all its customers with the utmost respect and seeks to be honest and fair in all relationships with them.The Group provides its customers with products and levels of customer service of outstanding quality.CommunityThe Group seeks to be a good corporate citizen respe

296、cting the laws of the countries in which it operates and adhering to best social practice where feasible.It aims to be sensitive to the local communitys cultural,social and economic needs.Charitable and Political ContributionsAs part of the Groups commitment to Corporate Social Responsibility,it has

297、 continued to develop its“Craneware Cares”program.The focus of Craneware Cares is to raise awareness and funds for charity.The focus for 2019 was the support of the Scottish Association for Mental Health and The Yard in the UK and both the Fanconi Anemia Research Fund and KaBOOM!in the US.For 2020,t

298、he focus will be the support of both Scottish Association for Mental Health in the UK and the Fanconi Anemia Research Fund in the US.Fund raising activities have already begun and these supplement the Volunteer Time Off program where Craneware employees take paid leave to support projects and charit

299、ies in their communities.Neither the Company nor its subsidiaries made any donation for political purposes in fiscal years 2019 or 2018.Employees and Employee InvolvementThe Group recognises the value of its employees and that the success of the Group is due to their efforts.The Group respects the d

300、ignity and rights of all its employees.The Group provides clean,healthy and safe working conditions.The Group enhanced its employee wellness programmes during the financial year.An inclusive working environment and a culture of openness are maintained by the regular dissemination of information.The

301、Group endeavours to provide equal opportunities for all employees and facilitates the development of employees skill sets.A fair remuneration policy is adopted throughout the Group.Share schemes to encourage involvement of employees in the Groups performance have been established and are planned to

302、be launched as detailed on page 35 of the Remuneration Committee Report.The Group does not tolerate any sexual,physical or mental harassment of its employees.The Group operates an equal opportunities policy and specifically prohibits discrimination on grounds of colour,ethnic origin,gender,age,relig

303、ion,political or other opinion,disability or sexual orientation.The Group does not employ underage staff.The general policy of the Group is to welcome employee involvement as far as it is reasonably practicable.Employees are kept informed by meetings,including the explanation and initiation of the r

304、oll out of Group-wide strategic themes and related deliverables(with key performance indicators)to all employees at the start of the financial year with regular updates during the year.In addition,the Groups UK and US senior management teams meet regularly to review performance against the Groups st

305、rategic aims and development roadmaps.There are also frequent postings and information updates available to all employees on the Groups intranet.An annual employment engagement survey is conducted with anonymised responses collated and rated to identify any aspects for improvement,which then guide i

306、nitiatives to address those areas.The Group maintains core values of honesty,integrity,hard work,service and quality and actively promotes these values in all activities undertaken on behalf of the Group.Employment of Disabled PersonsApplications for employment by disabled persons are always fully c

307、onsidered,bearing in mind the respective aptitudes and abilities of the applicant concerned.In the event of members of staff becoming disabled every effort is made to ensure that their employment with the Group continues and the appropriate training is arranged.It is the policy of the Group that the

308、 training,career development and promotion of a disabled person should,as far as possible,be identical to that of a person who does not suffer from a disability.Anti-Slavery and Human Trafficking PolicyThe Modern Slavery Act requires the Company to publish an annual slavery and human trafficking sta

309、tement.The latest statement can be found on the Craneware plc website.Neither the Company or any of its subsidiaries permit,condone or otherwise accept any form of human trafficking or slavery in its business or supply chains.Directors Report Contd.23Cranewareplc AnnualReport2019Policy on Payment of

310、 PayablesRelationships with suppliers and subcontractors are based on mutual respect,and the Group seeks to be honest and fair in its relationships with suppliers and subcontractors,and to honour the terms and conditions of its agreements in place with such suppliers and subcontractors.As a UK compa

311、ny,Craneware plc is bound by the laws of the UK,including the Bribery Act 2010,in respect of our conduct within and outside of the UK.In addition,we uphold all laws relevant to countering bribery and corruption in all the jurisdictions in which we operate.It is the Groups normal practice to make pay

312、ments to suppliers in accordance with agreed terms and conditions,generally within 30 days,provided that the supplier has performed in accordance with the relevant terms and conditions.Trade payables at 30 June 2019 represented,on average 18 days purchases(2018:18 days)for the Group and 16 days purc

313、hases (2018:15 days)for the Company.Annual General MeetingThe resolutions to be proposed at the Annual General Meeting,together with explanatory notes,appear in a separate Notice of Annual General Meeting which is sent to shareholders and will be made available on the Companys website at .The proxy

314、card for registered shareholders is distributed along with the notice.Company RegistrationThe Company is registered in Scotland as a public limited company with number SC196331.Statement of Directors ResponsibilitiesThe Directors are responsible for preparing the Annual Report and the financial stat

315、ements in accordance with applicable law and regulations.Company law requires the Directors to prepare financial statements for each financial year.Under that law the Directors have prepared the Group and Company financial statements in accordance with International Financial Reporting Standards(IFR

316、Ss)as adopted by the European Union.Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group and the Company for that period.In p

317、reparing these financial statements,the Directors are required to:select suitable accounting policies and then apply them consistently;make judgements and accounting estimates that are reasonable and prudent;state whether applicable IFRSs as adopted by the European Union have been followed for the g

318、roup and the company financial statements,subject to any material departures disclosed and explained in the financial statements;and prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.The Directors are also res

319、ponsible for safeguarding the assets of the Group and Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group and Companys

320、transactions and disclose with reasonable accuracy at any time the financial position of the Group and Company and enable them to ensure that the financial statements comply with the Companies Act 2006.The Directors are responsible for the maintenance and integrity of the Companys website.Legislatio

321、n in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.Directors ConfirmationsThe Directors consider that the annual report and accounts,taken as a whole,are fair,balanced and understandable and provide the infor

322、mation necessary for shareholders to assess the Groups and the Companys position and performance,business model and strategy.In the case of each Director in office at the date the Directors Report is approved:so far as the Director is aware,there is no relevant audit information of which the Groups

323、and Companys auditors are unaware;and they have taken all the steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Groups and Companys auditors are aware of this information.AuditorsThe auditors,Pricewaterhous

324、eCoopers LLP,have indicated their willingness to be re-appointed and a resolution for reappointment will be proposed at the Annual General Meeting.Approved by the Board of Directors and signed on behalf of the Board by:Craig Preston Company Secretary 2 September 2019Directors Report Contd.24Cranewar

325、eplc AnnualReport2019The Board of Directors(the Board)has always recognised the importance and value of good corporate governance and in prior years has sought to comply with both the principles and the spirit of the UK Corporate Governance Code issued in April 2016 where they were considered approp

326、riate for the size of the Group.Changes to AIM rules on 30 March 2018 required AIM companies to apply a recognised corporate governance code by 28 September 2018.Under the new rules,the Company is required to comply with the chosen code or explain why it is not complying.The Company has elected to a

327、dopt the UK Corporate Governance Code issued in April 2016(the“Code”)as its corporate governance framework but it is aware that the Code has been drafted in the context of larger,main-market listed companies.The Board is pleased to report how it has applied the principles and complied with the provi

328、sions of the Code in line with best practice and in view of the size of the Company.This Report sets out how it has complied with the individual provisions and applied the spirit of the Code as a whole and explains any areas of non-compliance with the provisions of the Code.The UK Corporate Governan

329、ce Code is available from the Financial Reporting Council at www.frc.org.uk.New UK Corporate Governance CodeIn July 2018,the Financial Reporting Council published the UK Corporate Governance Code 2018(the 2018 Code),which is applicable to accounting periods beginning on or after 1 January 2019.The 2

330、018 Code contains a number of new provisions which primarily focus on corporate culture,stakeholder engagement(with specific provisions on workforce engagement),remuneration and succession.The Board will report on compliance with the 2018 Code in next years annual report.Overview:Application of the

331、UK Corporate Governance Code 2016 (the“Code”)The Code itself defines the purpose of corporate governance being“to facilitate effective,entrepreneurial and prudent management that can deliver the long-term success of the company.”It is this overarching objective that the Board has sought to achieve i

332、n applying the Code principles.The Company is a smaller company for the purposes of the Code and,as such,certain provisions of the Code either do not apply to the Company or are judged to be disproportionate or less relevant in its case.Where the Company does not comply with any specific Code provis

333、ion then this is highlighted and explained in this report.Corporate Governance ReportLeadershipThe role of the Board“Every Company should be headed by an effective Board which is collectively responsible for the long-term success of the company.”Throughout the year under review the Companys Board has been headed by its Chairman,George Elliott,and comprises two executive Directors:Keith Neilson,Chi