Craneware plc (CRW) 2016年年度報告「AIM」.pdf

《Craneware plc (CRW) 2016年年度報告「AIM」.pdf》由會員分享，可在線閱讀，更多相關《Craneware plc (CRW) 2016年年度報告「AIM」.pdf（64頁珍藏版）》請在三個皮匠報告上搜索。

1、Craneware plc Annual Reportfor the year ended 30 June 2016Cranewareplc AnnualReport2016About CranewareCraneware solutions enable healthcare providers to improve margins so they can invest in quality patient outcomes.Founded in 1999,Craneware has headquarters in Edinburgh,Scotland with offices in Atl

2、anta,Boston,Pittsburgh and Phoenix employing over 240 staff.Cranewares market-driven,SaaS solutions normalise disparate data sets,bringing in up-to-date regulatory and financial compliance data to deliver value at the points where clinical and operational data transform into financial transactions,c

3、reating actionable insights that enable informed tactical and strategic decisions.To learn more,visit and .ContentsFinancial and Operational Highlights .1Craneware Value Cycle Solutions .2Chairmans Statement .4Strategic Report:Operational and Financial Review.5Strategic Report:Key Performance Indica

4、tors and Principal Risks and Uncertainties.13Directors,Secretary,and Advisors .15Board of Directors.16Directors Report.18Corporate Governance Report.21Remuneration Committees Report .25Independent Auditors Report to the Members of Craneware plc .28Consolidated Statement of Comprehensive Income for t

5、he year ended 30 June 2016 .30Statements of Changes in Equity for the year ended 30 June 2016 .31Consolidated Balance Sheet as at 30 June 2016 .32Company Balance Sheet as at 30 June 2016.33Statements of Cash Flows for the year ended 30 June 2016.34Notes to the Financial Statements .351Cranewareplc A

6、nnualReport2016Financial and Operational HighlightsQuick Facts Financial$49.8min revenue$15.9min adjusted EBITDA1$48.8mcash at year end16.5ptotal dividend for yearFinancial Total Contract Value in the year continues at record levels of$82.3m(FY15:$72.9m)new sales increased by 63%to$58.6m(FY15:$35.9m

7、)renewal rate remains above 100%by dollar value Revenue increased 11%to$49.8m(FY15:$44.8m)Adjusted EBITDA1 increased by 10%to$15.9m(FY15:$14.4m)Profit before tax increased by 10%to$13.9m(FY15:$12.5m)Basic adjusted EPS increased 13%to$0.429(FY15:$0.378)and adjusted diluted EPS has increased to$0.423(

8、FY15:$0.375)Continued operating cash conversion above 100%of Adjusted EBITDA Cash at year-end of$48.8m(FY15:$41.8m)after payment of$6m dividend to shareholders Proposed final dividend of 9p(12 cents)per share giving a total dividend for the year of 16.5p(22 cents)per share(FY15:14p(22 cents)per shar

9、e)1 Adjusted EBITDA refers to earnings before acquisition and share related transaction costs,interest,tax,depreciation,contingent consideration,amortisation,impairment and share based payments.Operational US healthcare market continues its evolution towards value-based care with a critical dependen

10、cy on accurate financial and operating data Further expansion of the product suite to support the Value Cycle,including:development of Trisus Patient Payment,our Patient Engagement gateway product,on track for launch during calendar 2016 launch of Craneware Healthcare Intelligence,a new group busine

11、ss,developing new solutions to address an emerging but significant market opportunity for healthcare cost analytics Two significant 5 year contract wins in the year for Craneware core value cycle solutions,worth a combined$15.5m Continued very high levels of customer retention Total visible revenue

12、increased 23%to$149.1m(FY15 same 3 year period:$121.1m)141.141.542.644.849.8010203040506020122013201420152016Revenue$m11.912.413.114.415.902468101214161820122013201420152016Adjusted EBITDA$m31.632.934.037.842.90510152025303540455020122013201420152016Basic adjusted EPS cents/share2Cranewareplc Annual

13、Report2016Craneware Value Cycle SolutionsCraneware solutions and servicesCraneware Value Cycle Solutions span five product families Patient Engagement,Charge Capture&Pricing,Coding Integrity,Cost Analytics,and Revenue Collection&Retention.In addition,hospitals of all sizes and types rely on Cranewar

14、es Professional Services to help deliver results that lead to improved financial outcomes.Value Cycle AreasPatient EngagementCharge Capture&PricingCoding IntegrityCost AnalyticsRevenue Recovery&RetentionMedical Necessity&Prior AuthPatient ResponsibilityProceduresPharmacySuppliesBilling&Claims Analyi

15、sCost of CareAudit ManagementDenials ManagementBusiness OutcomesDetermine requirement for payers:government&commercialWaiver forms for non-covered proceduresMulti-attribute verificationEstimate patient responsibilityEnsure charge accuracyEnsure chargemaster accuracy across enterpriseCreation/mainten

16、ance of physician fee scheduleModel contract proposalsModel net revenue reimbursementIdentify and correct discrepancies between purchased and billed drugsIdentify and correct discrepancies between purchased and billed suppliesAccurate HCPCS for billable suppliesIntegrity for all earned revenueI.D.an

17、d correct all coding mistakesIdentify missed chargesAnalyse cost,utilisation and reimbursement to Identify the most effective and efficient way to provide careAutomated audit tracking and executionDefensible accrual and reserve forecastingAppeals workflowAutomated denial tracking and executionMultip

18、le facility/department segmentation and workflowCraneware SolutionsInSight Medical NecessityTrisus Patient PaymentPatient Charge EstimatorChargemaster ToolkitPhysician Revenue ToolkitPricing AnalyzerReference PlusPharmacy ChargeLinkSupplies ChargeLinkSupplies AssistantTrisus Claims InformaticsCranew

19、are Healthcare IntelligenceInSight AuditInSight DenialsCraneware Consulting and Professional ServicesCDM Review&Educational ReviewCDM StandardisationPricing Optimization StudySupply BandingRevenue Integrity AssessmentsAppeal ServicesCharge Capture Performance Improvement ServicesInterim&full time Su

20、ccess Management ServicesTrisus Cranewares Next Generation of SolutionsThe new,value-driven healthcare market is reorienting around best outcomes for best cost,while margin remains the most essential metric for business performance.The revenue cycle is now part of the larger value cycle,encompassing

21、 the systems that not only drive billing performance and compliance,but operational efficiency and quality of care as well.In order to build solutions for the value cycle era,Craneware has developed the Trisus solution platform.Supporting a growing number of products,this highly scalable cloud-based

22、 technology platform is capable of integrating data sets across the continuum of care to give clients actionable insights into their processes.Trisus supports bringing disparate data sets together so that data can be linked and advanced informatics applied.New data sets are easy to plug in,and addit

23、ional value is realised as the platform expands.Craneware solutions are based on an annuity subscription model.Client data is kept secure within healthcare facilities own networks or Cranewares high-security data centre,compliant with US Health Insurance Portability and Accountability Act(HIPAA)regu

24、lations related to sensitive patient information.Only registered users can access Cranewares extensive knowledge base and regulatory products through available hospital-based browsers with Internet access.This allows Cranewares software to be used throughout the health system,permitting different pr

25、escribed levels of interaction with minimal impact to resource-strained IT teams and busy users.3Cranewareplc AnnualReport2016Craneware Value Cycle Solutions Contd.Chargemaster Toolkit is ranked No.1 in the Revenue Cycle Chargemaster Management market category for the tenth year in a row(2006 2015/2

26、016.)2015/2016 Best in KLAS Awards:Software&Services report,published January 2016.Data 2016 KLAS Enterprises,LLC.All rights reserved.www.KLAS*HFMA staff and volunteers determined that Cranewares Chargemaster Toolkit,Chargemaster Corporate Toolkit,Bill Analyzer,Online Reference Toolkit,and Interface

27、 Scripting Module have met specific criteria developed under the HFMA Peer Review Process.HFMA does not endorse or guarantee the use of these products.Craneware is a Microsoft Gold Partner for Application Development.Patient EngagementInSight Medical NecessityA SaaS solution that provides medical ne

28、cessity 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 communication with patients.Trisus Patient PaymentA SaaS solution that provides hospitals and hea

29、lth systems a way to modernise their patient access process,better manage cash flow,reduce bad debt,and improve collection rates while minimising administrative costs.Patient Charge EstimatorThis SaaS solution simplifies the process of providing patient bill estimates for inpatient and outpatient se

30、rvices to improve up-front collections and reduce bad debt.Charge Capture&PricingChargemaster Toolkit,Chargemaster Corporate Toolkit and Chargemaster Toolkit-CAH Automated SaaS chargemaster management solutions for capturing optimal legitimate reimbursement for providers,while mitigating compliance

31、risk.Chargemaster Toolkit is customisable for any organisation,from small community providers to large healthcare networks.Chargemaster Toolkit Discovery Viewer Chargemaster Toolkit Discovery Viewer addresses the challenges that enterprise CDM data presents to hospitals by enabling all related CDM d

32、ata to be viewed in one place.Physician Revenue Toolkit,Physician Management Toolkit and Physician Revenue Toolkit CorporateSaaS solutions for managing physician group KPIs,charges,codes,RVUs,fee schedules,and related information.Pricing AnalyzerSaaS solution that simplifies the price modelling proc

33、ess,creating a repeatable,well-documented method to establish transparent,defensible and competitive pricing.Reference PlusSaaS solution for providers with less than$44 million in operating expenses to perform chargemaster analysis,and efficiently optimise revenue,charge compliance and coding integr

34、ity.Pharmacy ChargeLinkImproves 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 providers pharmaceutical purchases and billing.Supplies ChargeLinkHel

35、ps optimise reimbursement for codable supplies by identifying missing or invalid charges,and establishing and maintaining a connection between supply purchase history and chargemaster,helping to ensure accurate pricing,coding and billing of these supplies.Supporting Modules Online Reference Toolkit

36、Web-based and mobile-friendly tool for reducing risk by providing access to reference and regulatory resources.Interface Scripting Module Software that automatically uploads chargemaster changes to the patient billing system for accurate billing.Supplies AssistantWeb-based,mobile-friendly supplies l

37、ookup tool available in Supplies ChargeLink or Online Reference Toolkit.Supplies Assistant enables providers to access Cranewares proprietary supply master catalog and quickly and correctly code expensive implants and devices.Coding IntegrityTrisus Claims Informatics Software that automates coding a

38、nd charge capture issue identification and resolution for hospitals and health systems.Bill Analyzer Automates claim and coding reviews to identify missed charges,billing errors,and categorise areas of risk to help ensure that all legitimate revenue is captured.Revenue Recovery&RetentionInSight Audi

39、tA comprehensive,web-based audit management tool that empowers healthcare organisations to manage claim audits and workflows from one central location,leveraging an extensive proprietary knowledgebase that includes current payment rules,best practices,templates,checklists,forms,and references for wi

40、nning appeals.InSight DenialsAnalyses,tracks,trends and reports on denial data,providing workflow tools to distribute denied claims to the right departments and staff for resubmission.InSight Denials expedites the repair and resubmission of denied claims for cross-departmental teams.An intelligent w

41、orkflow engine applies client-specific logic to efficiently distribute denied claims requiring resubmission to the right departments and individual team members,and maintains a detailed history of actions on all claims.Cost AnalyticsCraneware Healthcare IntelligenceA new Craneware plc business,devel

42、oping new solutions to address an emerging but significant market opportunity for healthcare cost analytics.Professional ServicesCraneware Professional Services provides companion implementation and consulting services that help clients apply best practices and achieve a fast,sustainable return on i

43、nvestment.Craneware augments initial product training with live or self-led web-based training through the Craneware Performance Center and optional fee-based training.4Cranewareplc AnnualReport2016“Third consecutive year of record sales performance and a return to double digit growth”George Elliott

44、,ChairmanChairmans StatementThe Board is pleased to confirm the Groups third consecutive year of record sales performance and a return to double digit growth in revenue and adjusted EBITDA.With an impressive 63%growth in new sales to$58.6m(FY15:$35.9m),the total value of contracts signed in the year

45、 increased to$82.3m(FY15:$72.9m).Underlying this the average new contract length was maintained at 5 years,renewal rates remained high(well above 100%by dollar value)and customer retention continued to be significantly higher than the industry norm.This has been a truly successful sales year for the

46、 Group.The Groups revenue recognition policy retains focus on long term sustainable growth and mitigates against year on year fluctuations in the total value of contracts signed.Therefore,the vast majority of the revenue from these sales has not been recognised in the year to 30 June 2016,and will i

47、nstead benefit future years.We are now seeing the impact of this continued period of record sales levels flow through into our reported figures.Revenue increased 11%to$49.8m(FY15:$44.8m)and adjusted EBITDA,increased by 10%to$15.9m(FY15:$14.4m).Cash generation was strong,resulting in cash reserves of

48、$48.8m(FY15:$41.8m)after payment of$6m dividend to shareholders.Cranewares solutions span the breadth of the US healthcare provider landscape,from the smaller rural hospitals to multi-hospital groups.Sales across all strata were strong in the year and it was particularly pleasing to see two signific

49、ant sales successes into two large hospital groups.These$7.5m and$8m contracts demonstrate the value and importance these groups attribute to the Craneware software solutions in assisting them to protect their operating margins while delivering improved outcomes for all.The US healthcare market cont

50、inues to evolve as predicted towards value-based care.The Groups strategy is to expand its offerings,providing deeper insight into a broad range of a hospitals operations,analysing and managing data from across the organisation.Our solutions will enable providers to improve margins and enhance patie

51、nt outcomes so the hospitals can provide quality care to their communities.To achieve this,we will continue to utilise a combination of in-house development expertise,partnerships and targeted acquisitions to expand our offering.We have made good progress towards delivering this vision in the year,w

52、ith two new areas of product development in the pipeline.The first to be launched will be Trisus Patient Payment,our gateway product within our newly formed Patient Engagement product family.This will be launched this calendar year and joins the first product launched on our new cloud-based platform

53、,Trisus.The product will ultimately combine the mobile platform brought into the Group last year via the acquisition of Kestros with the technology from the reseller agreement with VestaCare announced this year.We are also particularly excited to announce the launch of Craneware Healthcare Intellige

54、nce,a new Group company.The company has been created to develop and market cost analytics software to the US healthcare industry.Initial product is expected to be launched towards the end of Cranewares 2017 financial year.This is expected to be a significant new market opportunity for Craneware and

55、will be a key area of investment for the Company moving forward.The Board continues to be alert to potential acquisitions.Strict criteria will be applied to targets to ensure they both deliver against the product roadmap while being accretive to the financial strength of the Group.As we enter our te

56、nth year since the Company IPO in 2007,I continue to be impressed by the enthusiasm and commitment shown by our employees across Scotland and the US.Their passion for service to our customers and the healthcare industry is a key element of our success and I would like to take this opportunity to tha

57、nk them for all their hard work during the year.I would like to express particular gratitude to Gordon Craig,who has decided after 16 years to retire as CTO and take on a salaried advisory role within the Company.Gordon has been responsible for product development during his tenure and hands that on

58、 at this appropriate time.We have seen significant progress made on the Trisus platform,with the roll out of the first components of the platform taking place in the next twelve months.Gordons replacement will join the Company on 12 September,from his role as a VP(and Fellow)of R&D at a Fortune 10 H

59、ealthcare company.He brings relevant experience of migrating highly scalable enterprise applications to the cloud that are HIPAA compliant and process large volumes of healthcare data.Neil Heywood who has been a non-executive director throughout the last 14 years has decided not to stand for re-elec

60、tion at the forthcoming AGM.I would like to take this opportunity to thank both Neil and Gordon,on behalf of the Board,for all their service and support to the Group and wish them well in their future endeavours.The excellent sales performances over the last three years,the clear strategy for growth

61、 and the strong financial position of Company provide the Board with confidence in the success of Craneware in the year ahead.George Elliott Chairman 5 September 20165Cranewareplc AnnualReport2016“We.have only scratched the surface of our long term potentialKeith Neilson,CEO and co-founder“The inves

62、tment we are making in our product suite mean our market opportunity is now several times largerCraig Preston,CFOStrategic Report:Operational and Financial ReviewOperational ReviewWe have enjoyed another strong year,delivering significant operational and financial progress against our long term stra

63、tegic objectives.The US healthcare landscape continues to evolve.New regulations,increasing requirement for reliable data analytics,emerging medical techniques and technologies,are all contributing to a major shift in the operational needs of US healthcare providers.However,the one thing that appear

64、s unchanged is the need for quality patient outcomes.At Craneware,we deliver solutions that help healthcare providers maintain their financial health so they can concentrate on what matters most:providing the best possible outcomes for all.Three consecutive years of record sales,we believe,have only

65、 scratched the surface of our long term potential.We have entered the next phase of growth for Craneware,in which we are expanding our product suite,whilst supporting our customers as they meet the challenges value-based care brings.Market Strategy OverviewWhile the need to address the healthcare re

66、quirements of an ageing population grows more urgent,the growing cost of US healthcare is unsustainable.Hospital operating margins continue to be under pressure and there is still significant waste and inefficiency in the system.We are approaching an era where,it is expected,greater than 50%of all U

67、S healthcare payments will have a value-based component.These major changes in reimbursement and care delivery models have made understanding and reducing the cost of care,while improving patient outcomes,mission-critical for every healthcare provider in the US.While hospital leadership teams are fo

68、cusing on controlling costs and increasing levels of care,consumers are facing ever increasing out-of-pocket costs as the healthcare model shifts a significant proportion of the payment responsibility to the patient,via high deductible plans.These factors and the challenges they bring to US healthca

69、re providers drive two major areas of focus in the comings years a high growth market for cost analytics and performance platforms as well as solutions to manage our customers challenges with the growing levels of direct engagement they have with consumers.Delivering the Value CycleThe Value Cycle i

70、s the process and culture by which healthcare providers pursue quality patient outcomes and optimal financial performance,through the management of clinical,operational and financial assets.Without this data,and the insight into that data,to enable action,healthcare systems cannot protect their marg

71、ins and provide quality outcomes for all.Cranewares Value Cycle solutions support our customers in this new world of value based reimbursement.Our solutions monitor the points in their system where clinical and operational data transform into financial transactions,delivering value in the discovery,

72、conversion and optimisation of these assets.Our StrategyOur strategy is to continue to build on our established market-leading position in revenue cycle solutions,expanding our product suite coverage of the Value Cycle.By expanding our offerings in the cost management area of hospital operations and

73、 combining this with data from the revenue cycle we will provide a unique insight into the management and analysis of clinical and operational data.The expansion will be achieved through a combination of extensions to the current product set,internal product development,partnerships with other techn

74、ology providers and targeted acquisitions.6Cranewareplc AnnualReport2016Strategic Report:Operational and Financial Review Contd.ground-breaking cost analytics solutions,we believe our new head of this project gives us a significant head start in delivering this new solution.We are in the process of

75、building a complete development and delivery team and expect to see initial product within calendar 2017.AcquisitionsThe Board continues to assess opportunities to complement the Groups organic growth strategy and increase speed to market for new products through acquisition.The Board adheres to a r

76、igorous set of criteria to analyse acquisition opportunities,including quality of earnings and product offering.The$50 million funding facility provided by the Bank of Scotland announced previously combined with our own cash resources,provides the Company with the firepower to carry out strategic ac

77、quisitions if and when these criteria are met.Sales and Marketing Within our record sales performance,the Group delivered good levels of sales to all segments of the US healthcare market,demonstrating continued sales momentum and the benefits of a supportive market environment.Going forward the sale

78、s pipeline continues to be at record highs with opportunities across all strata of hospitals.The average length of new hospital contracts continues to be in-line with our historical norms of approximately five years.Where Craneware enters into new product contracts with its existing customers,contra

79、cts are occasionally made co-terminus with the customers existing contracts,and as such,the average length of these contracts remains greater than three years,in-line with our expectations.We were delighted to secure two significant contract wins within the year.The first contract announced in Janua

80、ry 2016 is expected to deliver$7.5m revenue pocket burden for patients.In many hospitals,patient payments represents a fast-growing proportion of their revenue,yet is the most difficult and expensive portion to collect with a high reputational risk associated with pursuing delinquent individuals.Aft

81、er decades of primarily relying on financial transactions with health plans,Medicare and Medicaid,hospital revenue cycle and patient access teams are often ill-equipped to manage effective patient-friendly point-of-service collections.For the patient,who is often underinsured,it can be mentally and

82、financially overwhelming to receive expensive and confusing medical bills after being discharged.Trisus Patient Payment is a solution designed to increase patient billing satisfaction while also improving point-of-service collection rates.The solution will be launched by the end of this calendar yea

83、r.We will receive an annual license fee from customers with an additional revenue share element based on improved collection rates.New Group company:Craneware Healthcare IntelligenceIn the second half of FY16,Craneware formed a new Group company,Craneware Healthcare Intelligence,to develop and marke

84、t cost analytics software to the US healthcare industry.Cost analytics are a vital component within the emerging Value Cycle solutions market.The understanding of costs,combined with correct reimbursement will enable our customers to better understand their margin and in turn drive better patient ou

85、tcomes.We believe this area of the Value Cycle represents a market opportunity several times larger than that of our existing product portfolio.Having assessed various acquisition and partnering options,we concluded that developing our own solution is the best way to ensure we have a world class pro

86、duct to take to our customer base.We have appointed one of the pre-eminent experts in the field of Cost Analytics in the US as Senior Vice President,Healthcare Analytics,who will lead this new development.With 16 years experience working with a major US hospital network,developing and deploying Cran

87、ewares Product Roadmap:Trisus Enterprise Value PlatformWe continue to invest in our current solutions set,however,alongside this investment we have a roadmap to move all these solutions to a new cloud-based platform,the Trisus Enterprise Value Suite.Trisus will combine revenue integrity,cost managem

88、ent and decision enablement functionality in a versatile,customisable solution that fully delivers on Cranewares primary purpose to help healthcare systems improve margins and enhance patient outcomes.Development of the Trisus platform continues with a release of the first elements of the platform s

89、cheduled to take place later this year and throughout calendar 2017.In addition to our current solution set,we continue to expand our coverage of the Value Cycle.Our initial area of focus for this expansion has been within the area of patient access and engagement-addressing the growing consumerisat

90、ion within healthcare.Patient Access and Engagement:Trisus Patient PaymentDevelopment of Trisus Patient Payment,a new fourth gateway product,operating within the patient access and engagement area,has progressed well in the year and is on track for launch before the end of this calendar year.The ult

91、imate offering will combine the automated payment technologies and services(VestaPay)provided by VestaCare,the exclusive value added reseller agreement signed in January 2016,with Cranewares medical necessity and price estimation products as well as Cranewares mobile patient engagement platform,whic

92、h has been developed following the acquisition of Kestros.Together these will form this enhanced Patient Engagement solution.The past five years have seen an explosion of high-deductible health plans and an increasing out-of-7Cranewareplc AnnualReport2016New Product Sales$m01020304050607080902012201

93、3201420152016RenewalsNew Product Salesover the initial five year term.The new customer is a growing hospital operator and consolidator that manages in excess of 50 hospitals across multiple US states primarily in non-urban communities.Chargemaster Corporate Toolkit will be used by the group to estab

94、lish and manage corporate standardisation across its entire portfolio of owned and managed facilities.This will enable system-wide reporting efficiencies and the timely submission of accurate claims whilst managing billing compliance risk.The second contract,secured at the end of the year,is with an

95、other of the US largest multi-hospital groups.Commencing in 2017,the contract is expected to deliver revenue greater than$8m during the next five years,as the hospital network rolls out multiple Craneware core value cycle solutions,led by Chargemaster Toolkit,Pharmacy ChargeLink and Supplies ChargeL

96、ink.With these significant contract wins bringing new hospital systems to the Group,the sales mix saw a higher percentage of sales to new customers in the year,however overall the levels of sales between new customers and existing customers(both mid-contract and at renewal time)is well balanced.All

97、new hospital sales provide opportunities for further product sales in the future.AwardsChargemaster Toolkit was named Category Leader in the“Revenue Cycle Chargemaster Management”market category for the tenth consecutive year in the annual“2015/2016 Best in KLAS Awards:Software&Services.”KLASs annua

98、l“Best in KLAS”report provides unique insight gathered from thousands of healthcare organisations across the US.The report includes client satisfaction scores and benchmark performance metrics.Financial ReviewIn our 6 July trading statement we were pleased to report our third year of record sales le

99、vels.Equally pleasing was the confirmation of our return to double digit growth rates for both Revenue and adjusted EBITDA.This translates to Revenues reported for the financial year under review of$49.8m(FY15:$44.8m)which has resulted in an adjusted EBITDA of$15.9m(FY15:$14.4m).Our Annuity SaaS bus

100、iness model(which is described Strategic Report:Operational and Financial Review Contd.1FY12 included the large white label and reseller agreement that added$7.5m to new product sales and therefore total contract value in the year,with the$3.5m white label revenue recognised in the year and the rema

101、ining$4m recognised over the related 28 month period.2As 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

102、one year basis or renegotiate their contracts for up to a further nine years,will impact the total contract value of renewals in any one year.Annuity SaaS Model SalesFiscal Year2012$m2013$m2014$m2015$m2016$mNew Product Sales21.6120.835.135.958.6Renewals212.717.735.937.023.7Total Contract Value34.338

103、.571.072.982.3Reported Revenue41.141.542.644.849.88Cranewareplc AnnualReport2016Strategic Report:Operational and Financial Review Contd.in the next section)is designed to deliver long term sustainable growth.Whilst this means the vast majority of any current years sales success is not reflected in t

104、hat years income statement,it does mean the majority of the growth in revenues we are currently reporting is reflective of prior years sales successes,with the sales success of the current year being available to further benefit future years.In our revenue visibility KPI detailed below,we already ha

105、ve visibility over$51.3m of potential revenue for FY17 prior to any further new product sales being made.The total value of contracts written during the year increased by 13%to$82.3m(FY15:$72.9m).However,this growth under-represents the true sales success in the period.Contracts written for new prod

106、uct sales actually increased 63%to$58.6m(FY15:$35.9m).The overall growth rate reported was moderated by the lower number of customers that were coming to the end of their multi-year contracts and therefore fewer were due to renew in the year.Whilst this did impact the Sales KPI,it does mean we have

107、more customers under contract enjoying the benefits our solutions can bring.Our average contract for a new hospital customer continues to be five years,with contracts for customers renewing and buying additional products part way through an existing contract both averaging over three years,continuin

108、g to be in line with our historical norms.The sales success of the prior financial years saw a significant proportion of our customer base renew on multiyear contracts.As a result,significantly fewer customers were due to renew in the financial year under review which whilst not impacting revenue di

109、d impact both the total value of renewal contracts signed,as detailed above,and the renewal rate by dollar value metric.The upcoming financial year will have a similar number of customers due to renew.Renewal rates by dollar value is a financial metric which specifically ties to the three-year visib

110、le revenue detailed below.This metric measures last annual value of all customers due to renew in the current year and compares it to actual value these customers renew at(in total),including upsell and cross-sell.This metric at 122%is above our expected norms of 85-115%however with fewer customers

111、being due to renew in the current year,we do not believe this represents a change to our future expected range.Variations in our dollar value renewal rates are driven by the timing of individual renewals,additional product sales and contract negotiation or cancellation.Business Model The Group recog

112、nises the vast majority of revenue under its Annuity SaaS revenue recognition model.This business model has been consistently applied throughout the period under review.The strategy behind this business model is to ensure the long-term growth and stability of the Group.The annuity SaaS business mode

113、l adopted by the Group delivers a smoothing of any sales fluctuations and focusing on growth over the long-term.As a result the majority of Three Year Visible Revenue47.437.429.23.511.119.70.40.20.20.010.020.030.040.050.060.0201720182019$mAs at 30 June 2016 Other Recurring RevenueRenewalsContracted9

114、Cranewareplc AnnualReport2016the revenue resulting from all sales will be recognised over future periods,adding to the Groups long term visibility of revenue under contract as stated in all our trading and contract win announcements.Under our model we recognise software licence revenue and any minim

115、um payments due from our other route to market contracts evenly over the life of the underlying signed contracts.As we sign new hospital contracts over an average life of five years,we will see the revenue from any new sales over this underlying contract term.As well as the incremental licence reven

116、ues we generate from each new sale,we normally expect to deliver an associated professional services engagement.This revenue is typically recognised as we deliver the service to the customer,usually on a percentage of completion basis.The nature and scope of these engagements will vary depending on

117、both our customer needs and which of our solutions they have contracted for.However these engagements will always include the implementation of the software as well as training the hospital staff in its use.As a result of the different types of professional services engagement,the period over which

118、we deliver the services and consequently recognise all associated revenue will vary,however we would normally expect to recognise this revenue over the first year of the contract.In any individual year we would normally expect around 10%-20%of revenues reported by the Group to be from services perfo

119、rmed.Sales,Revenue and Revenue Visibility Under our model revenue and sales have different meanings and are not interchangeable.This can be demonstrated by reviewing the last five years sales levels and comparing these to the reported revenue numbers.In the table on page 7 we show our total contract

120、s signed in the relevant years between sales of new products(to both new and existing hospital clients)and clients who are renewing their contracts at the end of their terms,our total sales and compare this total to the revenue reported.As the majority of the revenue resulting from all sales will be

121、 recognised over future periods,the financial statements do not,anywhere,record the valuable asset this contracted,but not yet recognised,revenue represents to the Group.As such,at every reporting period,the Group presents its“Revenue Visibility”.This KPI identifies revenues which we reasonably expe

122、ct to recognise over the next three year period,without any further new product sales.This“Three Year Visible Revenue”metric includes:future revenue under contract revenue generated from renewals(calculated at 100%dollar value renewal)other recurring revenueAs we are signing multi-year contracts wit

123、h our customers and at the end of these contracts we are,on average,renewing these customers at 100%of dollar value,the Group is consistently building an underlying annuity base of revenue that increases with each new sale.The Three Year Revenue Visibility KPI is a forward looking KPI and therefore

124、will always include some judgement.To help assess this,we separately identify different categories of revenue to better reflect any inherent future risk in recognising these revenues.Future revenue under contract,is,as the title suggests,subject to an underlying contract and therefore once invoiced

125、will be recognised in the respective years(subject to future collection risk that exists with all revenue).Renewal revenues are contracts coming to the end of their original contract term(e.g.five years)and will require their contracts to be renegotiated and renewed for the revenue to be recognised.

126、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 this assumption.The final category“Other recurring revenue”is revenue that we would expect to recur in the future but is monthl

127、y 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 Groups total visible revenue for the three years as at 30 June 2016(i.e.visible revenue for FY17,FY18 and FY19)identifies$149.1m o

128、f revenue which we reasonably expect to benefit the Group in this next three year period.This visible revenue breaks down as follows:future revenue under contract contributing$114.0m of which$47.4m is expected to be recognised in FY17,$37.4m in FY18 and$29.2m in FY19 revenue generated from renewals

129、contributing$34.3m;being$3.5m in FY17,$11.1m in FY18 and$19.7m in FY19 other revenue identified as recurring in nature of$0.8mGross Margins We expect the gross profit margin to be between 90-95%,the gross profit for the year was$46.8m(FY15:$42.4m)which represents a gross margin percentage of 93.9%wh

130、ich is towards the top of our historical range and therefore reflects the correct matching of incremental costs incurred as a result of sales with the associated revenue being recorded.Earnings The Group presents an adjusted earnings figure as a supplement to the IFRS based earnings figures.The Grou

131、p uses this adjusted measure in our operational and financial decision making as it excludes certain one-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 compani

132、es and is frequently used by analysts,investors and other interested parties.Adjusted earnings represent operating profits excluding costs incurred as a result of acquisition and share related activities,share related costs including IFRS 2 share based payments charge,depreciation,amortisation and i

133、n the current year excludes the other income arising out of the conclusion of the contingent consideration arising from the prior year Kestros acquisition(“Adjusted EBITDA”).Strategic Report:Operational and Financial Review Contd.10Cranewareplc AnnualReport2016Strategic Report:Operational and Financ

134、ial Review Contd.Adjusted EBITDA has grown in the year to$15.9m(FY15:$14.4m)an increase of 10%.This reflects an Adjusted EBITDA margin of 31.8%(FY15:32.0%).This is consistent with the Groups measured approach to continuing to make investments in line with the revenue growth occurring,whilst continua

135、lly managing to ensure the efficiency of the investments we make.Operating Expenses The increase in net operating expenses(to Adjusted EBITDA)reflects our policy of investing in line with revenue growth increasing over 10%to$30.9m(FY15:$28.0m).We are now seeing the benefits of our previous investmen

136、ts,in both management bandwidth and the Sales and Marketing areas,through our record sales levels.The resulting revenue increases have allowed us to expand our investment with the focus in the past year being in Client Servicing and Development.We firmly believe“we win when our client wins”so ensuri

137、ng we continue to provide the highest level of customer support whether during the initial implementation or later as the customers use our software during the life cycle of their contract,is paramount to the Group.We continually rank top in category in the KLAS scores for our customer support and t

138、hrough appropriate and targeted investment we aim to continue this focus on our customers.Product innovation and enhancement continues to be core to the Groups future.The Operating Review provides significant detail of our current ongoing development programs,including the Trisus platform and the po

139、rtfolio of products that will be part of this platform,the new gateway product development in the Patient Access and Engagement arena and the launch of Craneware Healthcare Intelligence.As we undertake these initiatives and consider the market opportunities these present,the Group has decided to acc

140、elerate investment in these areas whilst maintaining our current product offerings and ensuring they remain market leading.This has resulted in an increase in the cost of Development related to our current products and therefore charged in the period to$7.7m(FY15:$7.0m),a 10%increase and therefore i

141、n line with our revenue growth.In addition,we have made further investments to accelerate the development of the new product offerings.As these products have yet to be made available to our customers,the associated incremental costs have been capitalised,this has resulted in$2.0m(FY15:$0.8m)of capit

142、alised development spend in the year.We expect to see both the levels of development expense and capitalisation continue the current trends as we continue to build out the solution set that supports the Value Cycle.Cash and Bank Facilities We measure the quality of our earnings through our ability t

143、o convert them into operating cash.During the year we have seen continued high levels of cash conversion,achieving over 100%conversion of our adjusted EBITDA into operating cash.When comparing to the prior year,the comparative should be adjusted for the one-time amount of$4m of accrued revenue relat

144、ing to a partner contract clearing the Groups balance sheet.After adjusting for this amount the levels of cash generated are consistent.The success of our very high levels of cash conversion(over 100%of Adjusted EBITDA)has enabled us to grow our cash reserves to$48.8m(FY15:$41.8m).These cash levels

145、are after paying$2.3m in taxation(FY15:$2.5m)and returning$6.0m(FY15:$5.4m)to our shareholders by way of dividends.We retain a significant level of cash reserves and balance sheet strength to fund acquisitions as suitable opportunities arise.To supplement these reserves,the Group announced in our in

146、terim report that we had secured 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 continues to investigate strategic opportunities for further its growth strategy.Balance Sheet The Group maintains a strong balance sheet pos

147、ition with rigorous controls over working capital.The level of trade and other receivables has increased in comparison to the prior year.This is a result of the significant level of sales made in the second half of the year and the associated increase in accounts receivable.The corresponding increas

148、e in Deferred income and our continued cash collection rates confirm this increase is solely a result of the increased sales levels.As we continue to deliver record levels of sales so the amounts we pay out relating to sales commissions continue to increase.Total sales commissions are based on the t

149、otal value of the contract sold,however for income statement purposes,only a small 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 pr

150、epayment has increased,as expected,in the year from$3.2m to$6.0m(resulting from the growth in new product sales).However,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.11Cranewareplc AnnualReport2016Strate

151、gic Report:Operational and Financial Review Contd.Deferred income levels reflect the amounts of the revenue under contract that we have invoiced and/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

152、 through our three year visible revenue metric.Deferred income,accrued income and the prepayment of sales commissions all arise as a result of our annuity 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 contr

153、acts does not exactly match how revenue and related expenses are recorded in the income statement.Overall levels of deferred income are significantly more than accrued income and the prepayment of sales commissions,confirming we remain cash flow positive in regards to how we recognise revenue from o

154、ur contracts.Conclusion of the Contingent Consideration arising from the Kestros Limited Acquisition On 28 August 2014,Craneware acquired the entire share capital of Kestros Limited(now trading as Craneware Health)for a maximum consideration of$2.14m(1.25m)subject to the achievement of certain reven

155、ue milestones.The contingent consideration element has now been assessed and as a result the income statement in the year records other income of$1.0m(FY15:$Nil).Concurrently the Group has assessed the original goodwill and associated intellectual property intangible assets and has reduced the carry

156、ing value of these accordingly.This impairment of$1.0m is included in the amortisation charge for intangible assets charged in the year.Both amounts are recorded as adjustments in calculating Adjusted EBITDA and due to their relative amounts have no effect on Operating Profit or EPS reported in the

157、year.Currency The functional currency for the Group(and cash reserves)is US dollars.Whilst the majority of our cost base is US located and therefore US dollar denominated,we do have approximately one quarter of the cost base based in the UK relating primarily to our UK employees(and therefore denomi

158、nated in Sterling).As a result,we continue to closely monitor the Sterling to US dollar exchange rate,and where appropriate consider hedging strategies.During the year,we have seen some benefit of exchange rate movements,with the average exchange rate throughout the year being$1.4837 as compared to$

159、1.5750 in the prior year.This benefit has allowed us to release further investment whilst maintaining profit margins.Taxation The Group generates profits in both the UK and the US,the overall levels of which are determined by both the level of sales in the year and the level of professional services

160、 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 seen the benefit of a reducing UK corporation tax rate and as such the current year effective tax rate is 24%(FY15:25%).Effe

161、ctive tax rates in any one year will reflect the relative tax rates in the UK and the US,the ratio of underlying professional services to software licence revenues and the overall level of sales increase.EPS In the year adjusted EPS has increased to$0.429(FY15:$0.378)and adjusted diluted EPS has inc

162、reased to$0.423(FY15:$0.375).The increase in EPS is driven by the increased levels of EBITDA combined with the overall reduced effective tax rate detailed above.Dividend The Board recommends a final dividend of 9.0p(12.1 cents)per share giving a total dividend for the year of 16.5p(22.0 cents)per sh

163、are(FY15:14.0p(22 cents)per share).Subject to confirmation at the Annual General Meeting,the final dividend will be paid on 8 December 2016 to shareholders on the register as at 11 November 2016,with a corresponding ex-Dividend date of 10 November 2016.The final dividend of 9p per share is capable o

164、f 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 11 November 2016.The exact amount to be paid will be calculated by reference to the exchang

165、e rate to be announced on 11 November 2016.The final dividend referred to above in US dollars of 12.1 cents is given as an example only using the Balance Sheet date exchange rate of$1.3397/1 and may differ from that finally announced.12Cranewareplc AnnualReport2016Strategic Report:Operational and Fi

166、nancial Review Contd.Outlook The IPO of Craneware on AIM in 2007 provided us with access to capital in order to build a business capable of delivering on the significant opportunity we could see approaching within the US healthcare industry.We have achieved the targets we set the business since that

167、 time,delivering significant revenue and profit growth,cash generation and other factors such as expanding our solution suite to better address the challenges faced by our customers.Craneware is in a stronger position than ever and we are passionate about the opportunity ahead.The double digit growt

168、h in our reported revenue and adjusted EBITDA are only beginning to reflect the record levels of sales which began three years ago.Importantly,the investment we are making in our product suite mean our market opportunity is now several times larger than it was when we joined AIM in 2007.The market c

169、ontinues to evolve as we anticipated.US healthcare providers are seeking the solutions to address the challenges the new value based re-imbursement environment brings to them.We believe the investment we are making to expand the products in our Value Cycle suite addresses these challenges and we are

170、 now recognised beyond our original niche within the revenue cycle as a more strategic provider within a hospitals financial operations and their value cycle.We are confident that the ongoing investment we are making,combined with our continuing sales successes,mean we are well positioned to deliver

171、 continued future growth as well as increasing stakeholder value.Keith Neilson Chief Executive Officer 5 September 2016Craig Preston Chief Financial Officer 5 September 201613Cranewareplc AnnualReport2016Strategic Report:Key Performance Indicators and Principal Risks and UncertaintiesKey Performance

172、 Indicator ReviewRevenue Growth20162015Revenue$49.8m$44.8mGrowth11%5%Revenue for the year grew by 11%.Underpinning this return to double digit growth is the increased sales levels seen in prior years plus an increase in new product sales growing by 63%on the prior year.The Groups annuity SaaS revenu

173、e recognition model means we are beginning to see the full benefit of prior years sales and the vast majority of the current years sales will be recognised in later years.Three Year Revenue Visibility20162015Three Year Revenue Visibility$149.1m$123.4mWith the full benefit of current years sales not

174、being reflected in the current year financial statements,the Group produces a Three Year Revenue Visibility KPI.The 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 2016.Full details

175、 of how this is calculated are detailed in the financial review section of the Operational Review.The growth in this metric reflects the growing annuity revenue base that results from the Groups Annuity SaaS revenue recognition model which will benefit future years.Adjusted EBITDA Growth20162015EBIT

176、DA$15.9m$14.4mGrowth10%10%We continue to invest to support the future growth of the Group.The increasing revenue growth has allowed us to continue and in certain areas accelerate this investment whilst maintaining our Group Margins and delivering EBITDA growth.By taking a measured approach to invest

177、ment we aim to release additional investment,in line with revenue growth,with the focus on delivering profitable growth to all stakeholders.Adjusted EPS20162015Adjusted EPS42.8 cents37.8 centsGrowth13%11%Adjusted EPS growth demonstrates the Groups overall profitability after taking into account the

178、taxation in the year and any changes in share capital.The Group generates profits in both the UK and the US,the overall level of which is determined by both the level of sales in the year and the level of professional services income.The Groups effective tax rate remains dependent on the applicable

179、tax rates in each respective jurisdiction.Cash20162015Cash$48.8m$41.8mThe Group continues to convert very high levels of the Adjusted EBITDA reported in the year into operating cash flows which has resulted in an increase in cash balances of 17%.Overall Operating cash conversion continues above our

180、long term target of 100%.14Cranewareplc AnnualReport2016Strategic Report:Key Performance Indicators and Principal Risks and Uncertainties Contd.Principal Risks and Uncertainties To deliver continued sustainable growth,the Group recognises the need to minimise the likelihood and impact of key risks.T

181、hese 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 nature of the US healthcare industry and associated risks are detailed in the Operational Review on pages 5 to 12.The risks outlined here are those

182、 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 priority.Management of GrowthIssue:The Group is planning for further significant growth both organically and through acquisition,which could p

183、lace strain on the current management bandwidth and other resources across the Group.Actions:The Group has made significant investments over the prior years to increase bandwidth at both the Operations and PLC Board levels.The Groups annuity SaaS business model combined with the detailed forecasting

184、 processes provide visibility to expected growth rates.This provides a foundation when planning in advance,including any additional resourcing necessary as a result of this growth.To ensure the correct infrastructure to support growth,assessments are performed and improvements are made within system

185、s,policies and procedures and business controls are upgraded,as appropriate,across the Group.US Healthcare Evolution and ReformIssue:The US healthcare industry continues to evolve,with the value based reimbursement model and a shift towards consumerisation,the outcome and nature of this market is su

186、bject 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 industry expertise a

187、t both the Operations Board and the PLC Board.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 independent industry experts attend a

188、nd speak at internal and external Company events;regular attendance by senior management at healthcare forums and industry education events;and client forums.The Groups“value cycle”strategy strengthens our position as a trusted financial performance partner to hospitals and it continually enhances a

189、nd expands its product offerings to meet the evolving challenges.These strategies keeps the Group at the forefront of industry developments.Dependence on Key Executives and PersonnelIssue:Due to the size of the Group significant reliance is placed on a few members of the executive and senior managem

190、ent team,the retention of which cannot be guaranteed.Actions:The Group has and will continue to expand and strengthen its senior management team,including the PLC Board,as appropriate.In the current year,the Group has developed new programs to identify,train and mentor the management and talent who

191、will be the leaders of the future.In regards to retention,the Remuneration Committee continues to monitor and develop the remuneration packages of key personnel to ensure they are both competitive and include appropriate long term incentives.Failure to Develop or Acquire Appropriate Software Solutio

192、nsIssue:In an evolving market failure to enhance products or add to the product suite could significantly limit the Groups market opportunity and leave it unable to meet its customers needs.Actions:The Groups“Value Cycle”strategy,evolution of the product suite and Trisus platform that supports this

193、strategy positions the Group forefront of providing solutions to help US healthcare providers address the challenges of value-based reimbursement.In addition to the first elements of the Trisus platform being launched in calendar 2017,the Group has invested in a new gateway product within the patien

194、t access and engagement area and announced the development of a new product in the cost analytics area.Intellectual Property RiskIssue:Failure to protect,register and enforce(if appropriate)the Groups Intellectual Property Rights could materially impact the Groups future performance.Actions:The Grou

195、p will continue to register its trademarks and copyrights and protects access to its confidential information,as appropriate.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

196、 protect its intellectual property.Data and cyber securityIssue:Security of customer,commercial and personal data poses increasing reputational and financial risk to all businesses.In particular,the sharp rise in cyber and data related crime presents a significant challenge in terms of securing data

197、 and systems against attack.Actions:Whilst it is not possible to completely eliminate data and cyber security risk,it is clear that effective mitigation now go beyond building and operating security controls.While the Group will continue to invest in the strict physical and data security systems and

198、 protocol and mentioned above it also carries specific insurance in this regard.The Group also recognises and supports that a sustained evolution of culture within the organisation which embeds security across the business.Competitive LandscapeIssue:New entrants to the market or increased competitio

199、n 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 continue to exist,including but not limited to the significant

200、 data content built over the Group history which exists within its products.The Group continues to ensure its products are platform agnostic and actively seeks partnerships with other healthcare IT vendors.Acquisition RiskIssue:The Group has a stated acquisition strategy.Any acquisition carries with

201、 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 in regards to completing acquisitions.In addition,and where appropriate,the Board appoints independent pr

202、ofessional advisors to assist in the consideration of the acquisition and to assist 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 pa

203、ges 21 to 24.In summary,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 innovatio

204、n and delivery,through a combination of in-house development and specific acquisition opportunities.This requires the recruitment,retention,and reward of skilled staff,alongside responsiveness to changes,and the opportunities that result,as they arise.Craig Preston Chief Financial Officer 5 Septembe

205、r 201615Cranewareplc AnnualReport2016Directors,Secretary,and AdvisorsDirectorsG R Elliott(non-executive,Chairman)K Neilson C T Preston N P Heywood(non-executive)R F Verni(non-executive)C Blye(non-executive)R Rudish(non-executive)Company Secretary&Registered OfficeC T Preston1 Tanfield Edinburgh EH3

206、5DAStockbrokers and Nominated AdvisorsPeel Hunt LLP120 London Wall London EC2Y 5ETRegistrarsCapita Asset ServicesThe Registry 34 Beckenham Road Beckenham Kent BR3 4TUBankersBank of ScotlandThe MoundEdinburghEH1 1YZThe Royal Bank of Scotland plc36 St.Andrew Square Edinburgh EH2 2YBClydesdale Bank20 W

207、aterloo Street Glasgow G2 6DBBarclays Commercial BankAurora House 120 Bothwell Street Glasgow G2 7JTHSBC Bank plc7 West Nile Street Glasgow G1 2RGIndependent AuditorsPricewaterhouseCoopers LLPChartered Accountants&Statutory Auditors Atria One 144 Morrison Street Edinburgh EH3 8EXSolicitorsPinsent Ma

208、sons LLPPrinces Exchange 1 Earl Grey Street Edinburgh EH3 9AQ 16Cranewareplc AnnualReport2016Board of DirectorsGeorge R Elliott,63 Non-Executive Chairman:Appointed 10 August 2007George is non-executive Chairman of Calnex Solutions Ltd,an Ethernet test equipment manufacturer,Cooper Software Ltd,an en

209、terprise and business intelligence solution consultancy and Optoscribe Ltd,which develops and supplies high performance 3D waveguide solutions for the data and telecommunications industries.He is also a non-executive director of Par Equity Holdings Ltd,a venture capital company,which focuses on earl

210、y stage high growth potential companies.Since 2007 he has been non-executive chairman/director of a number of technology companies,including MicroEmissive Displays Group plc,Corsair Components Inc,Kewill plc,Summit Corporation plc and Cupid plc.From 2000-2007 George was Chief Financial Officer of Wo

211、lfson Microelectronics plc,which was a leading global provider of high performance mixed-signal semiconductors to the consumer electronics market.Previously,he was Business Development Director at McQueen International Ltd(now Sykes),a manufacturing and support services provider for software publish

212、ers,where he was responsible for strategic sales and marketing.George,formerly a partner of Grant Thornton,is a member of the Institute of Chartered Accountants of Scotland and has a degree in Accountancy and Finance from Heriot-Watt University.Keith Neilson,47 Chief Executive Officer&Co-founderKeit

213、h co-founded Craneware in 1999 and has served as its CEO ever since.Under Keiths guidance,Craneware became recognised as the pioneer in revenue integrity management and a leading provider of superior products and professional services.Keiths direction has helped Craneware to win multiple prestigious

214、 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 was a finalist in the 2004 World Young Business Achiever Award,winning the Award of Excellence in the Business Strategy

215、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 launching Craneware,Keith worked primarily in international management,where he handled sales,marketing and technical c

216、onsulting 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 Young Presidents Organisation(YPO),a syndicate member and Partner in Par Equity LLP,a board member of Code Clan,the Sc

217、ottish Digital Skills Academy and 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 organisations that work for the benefit of young people.Craig T Preston,45 Chief Financial Officer:Appointe

218、d 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 directs Cranewares financial operations in both the United Kingdom and United States.Craig has significant

219、 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 company secretary at Intec Telecom Systems plc.Earlier,he served as corporate development manager at London

220、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 career,Craig worked for Deloitte in both the United Kingdom and United States.Craig has a degree in A

221、ccounting and Financial Management from the University of Sheffield.He is also a member of the Institute of Chartered Accountants in England and Wales.Neil P Heywood,54 Non-Executive Director:Appointed 31 January 2002Neil is chairman of Codeplay Software Ltd and a non-executive director at DeltaDNA

222、Ltd and Kobojo SAS.He is also a director of Matrix Alpha Analytics,a company providing services to the hedge fund sector,and an advisory panel member at Par Equity LLP.Previously he was Chairman of Two Big Ears Ltd and CEO of Quadstone,and a marketing analytics company,and head of the Edinburgh Para

223、llel Computing Centre at the University of Edinburgh.The Directors of the Company and their responsibilities within the Group are set out below:17Cranewareplc AnnualReport2016Ron F Verni,68 Non-Executive Director:Appointed 1 May 2009Ron is currently a director of On Deck Capital,and on the Board of

224、Advisors of the Robinson College of Business.Before that he was President&CEO of Sage Software,Inc,and a member of the Board of Directors of the Sage Group plc.Under his leadership,the company grew from less than$160 million in revenue to over$1 billion,from under 1,000 employees to over 5,000,and f

225、rom 1 million business customers to over 2.5 million.Ron also engineered over 20 acquisitions and oversaw their successful integration into the company.Prior to Sage Software,Ron was President and CEO of Peachtree Software,Inc.,a leading pioneer in business management solutions for small to medium s

226、ize businesses.Ron also was a Vice President of Marketing with Automatic Data Processing,President and CEO of NEBS Software,Inc.,and the founder and CEO of ASTEC Software.Colleen Blye,56 Non-Executive Director:Appointed 12 November 2013Colleen Blye is the Executive Vice President and Chief Financial

227、 Officer for Montefiore Health System and Albert Einstein College of Medicine.Montefiore Health System consists of eleven hospitals and an extended care facility,it is a premier academic medical center and includes the Albert Einstein College of Medicine.Colleen has a distinguished background in lar

228、ge,complex healthcare organisations.Prior to joining Montefiore,she served as Executive Vice President and Chief Financial Officer of Catholic Health Services of Long Island,an integrated healthcare delivery system comprising six hospitals and three nursing homes.Earlier,she served as Executive Vice

229、 President for Finance and Integrated Services at Catholic Health Initiatives,a health system with 102 hospitals across the United States.Her previous experience includes responsibility for treasury management,revenue cycle,financial reporting and planning,third-party contracting,supply chain,accoun

230、ts payable,payroll,and information technology.Colleen Blye is a Certified Public Accountant and a member of the American Institute of Certified Public Accountants and the Healthcare Financial Management Association.Russ Rudish,64 Non-Executive Director:Appointed 28 August 2014Russ Rudish has more th

231、an 30 years experience in serving the healthcare industry,both in the United States and internationally.Russ holds a directorship in Rudish Health Solutions,LLC,a healthcare consulting firm.Russ is also a principal in Healthcare IT Leaders and Run Consultants,both of which provide IT staff augmentat

232、ion services.Between 2006 and 2014,Russ served as partner and Global Sector Leader for Healthcare at 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 contributo

233、r to thought leadership on todays most pressing healthcare business issues.Board of Directors Contd.18Cranewareplc AnnualReport2016Directors ReportThe Directors present herewith their report and the audited consolidated financial statements for the year ended 30 June 2016.Principal Activities and Bu

234、siness ReviewThe Groups principal activity continues to be the development,licensing and ongoing support of computer 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 perfo

235、rmance of the Group during the financial year and its position at the end of the financial year,including relevant key performance indicators(principally revenue,adjusted operating profit(before acquisition costs and share related payments,share based payments,depreciation and amortisation),visibili

236、ty of revenue over the next three years and cash generation during the year).Detailed information on all matters required is presented in the Strategic Report contained in pages 5 to 12 and is incorporated into this report by reference.A description of the principal risks and uncertainties facing th

237、e Group is also presented in the Strategic Report.Where the Directors Report,Chairmans Statement and Operational Review 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.Consequentl

238、y,such statements should be treated with caution due to their inherent uncertainties,including both economic and business risk factors underlying such forward looking statements or information.Financial Results and DividendsThe Groups revenue for the year was$49.8m(2015:$44.8m)which has generated an

239、 adjusted operating profit(before acquisition related matters)of$15.0m(2015:$13.2m).The full results for the year,which were approved by the Board of Directors on 5 September 2016,are set out in the accompanying financial statements and the notes thereto.During the year the Company paid an interim d

240、ividend of 7.5p(10.7 cents).The Directors are recommending the payment of a final dividend of 9p(12.1 cents)per share giving a total dividend of 16.5p(22.0 cents)per share based on the results for 2016(2015:14p(22.0 cents).Subject to approval at the Annual General Meeting,the final dividend will be

241、paid on 8 December 2016 to shareholders on the register as at 20 November 2016.The 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 r

242、equirements and the ongoing needs of the business.Research and Development ActivitiesThe Group continues its development programme of software products for the US healthcare industry.The primary focus of this development continues to be the enhancement and expansion of the product suite to support t

243、he Groups Value Cycle strategy.Full details of the development activities and the Groups roadmap is provided in the Strategic Report contained in pages 5 to 12.The Directors regard investment in development activities as a prerequisite for success in the medium and long-term future.During the year d

244、evelopment expenditure amounted to$7.7m(2015:$7.0m)net of expenditure capitalised of$2.0m(2015:$0.8m).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 statem

245、ents.Going ConcernThe Directors,having made suitable enquiries and analysis of the financial statements,including the consideration of:cash reserves;continued cash generation;and annuity SaaS business model;have determined that the Group has adequate resources to continue in business for the foresee

246、able future and that it is therefore appropriate to adopt the going concern basis in preparing these financial statements.DirectorsThe Directors of the Company are listed on pages 16 and 17.The Directors have the power to manage the business of the Company,subject to the provisions of the Companies

247、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 special resolution of the Companys shareholders.Details of the Directo

248、rs service contracts and their respective notice terms are detailed in the Remuneration Committees Report on page 26.Authorised and Issued Share CapitalThe Companys authorised share capital at the Balance Sheet date was 50,000,000 ordinary shares of 1p each of which 26,850,248 were issued and fully

249、paid up.During the year,options were exercised pursuant to the Companys share option schemes,resulting in the allotment of 17,666 new ordinary shares(2015:6,096 options were exercised).Directors and their interestsThe interests of the Directors who held office at 30 June 2016 and up to the date of t

250、his report in the share capital of the company,were as follows:-20162015G R Elliott15,65015,650N P Heywood80,60680,606K Neilson3,504,1303,504,1303,600,3863,600,386Directors interests in share options are detailed in the Remuneration Committees Report on page 27.10.511.512.514.016.5FY12FY13FY14FY15FY

251、16Dividend/Share(pence)*Subject to Approval at AGM19Cranewareplc AnnualReport2016Directors Report Contd.Substantial ShareholdersAs at 1 August 2016,the Company had been notified of the following beneficial interests in 3%or more of the issued share capital pursuant to section 793 of the Companies Ac

252、t 2006:No.of Ordinary 0.01 Shares%of issued share capitalLiontrust Investment Partners4,818,15717.94K Neilson3,504,13013.05W G Craig2,702,56310.07Hargreave Hale2,627,1469.78AXA Framlington1,425,0005.31Baillie Gifford1,277,8554.76Shroder Investment Management1,106,2734.12Fidelity Worldwide Investment

253、891,7183.32D Paterson873,8003.25Indemnity 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 incurred by them in the execution or discharge of the

254、ir 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.In addition,the Company has purchased and maintains appropriate insurance cover against legal action brought against Directors and officers.Cor

255、porate Social Responsibility&Environmental PolicyThe Group is committed to maintaining a high level of social responsibility.It is the Groups policy to support and encourage environmentally sound business operations,with aspects and impact on the environment being considered at Board level.Recognisi

256、ng that the Groups operations have minimal direct environmental impact,the Group aims to ensure that:it meets all statutory obligations;where sensible and practical,it encourages working practices,such as teleconferencing,teleworking and electronic information exchange that reduce environmental impa

257、ct;and recycles waste products wherever possible,encouraging use of environmentally friendly materials,and disposing safely of any non-recyclable materials.CustomersThe Group treats all its customers with the utmost respect and seeks to be honest and fair in all relationships with them.The Group pro

258、vides its customers with products and levels of customer service of outstanding quality.CommunityThe Group seeks to be a good corporate citizen respecting 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 community

259、s cultural,social and economic needs.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 dignity and rights of all its employees.The Group provides clean,healthy and safe working conditions

260、.An inclusive working environment and a culture of openness are maintained by the regular dissemination of information.The 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 Gr

261、oup.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,religion,political or other opinion,disability or sexual orientation.The

262、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,regular updates and web page postings.In addition,the Groups UK and US senior management teams meet regularly to revi

263、ew performance against the Groups strategic aims and development roadmaps.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 employmen

264、t by disabled persons are always fully considered,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 arrange

265、d.It is the policy of the Group that the 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.Policy on Payment of PayablesRelationships with suppliers and subcontractors are based on mutual re

266、spect,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.The Group does not believe that the giving or accepting of bribes is acceptable business con

267、duct.It is the Groups normal practice to make payments 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 2016 represented,on average 19 days purc

268、hases(2015:16 days)for the Group and 21 days purchases(2015:19 days)for the Company.Charitable and Political ContributionsAs part of the Groups commitment to Corporate Social Responsibility it has continued to develop its“Craneware Cares”program.The focus of Craneware Cares is to raise awareness and

269、 funds for charity.The focus for 2016 has been the continued support of the Polar Academy and the support of this charity whose aim is to inspire and motivate thousands of young adults,positively demonstrating that by inspiring through exploration anybody can achieve their absolute potential.The Cra

270、neware Cares program for fiscal year 2017 has recently been launched in both the UK and US,this year the Craneware staff have nominated the Childrens Hospice Association Scotland(CHAS)and the Shriners Hospital for Children as their selected charities.20Cranewareplc AnnualReport2016Fund raising activ

271、ities have already begun and these supplement the Volunteer Time Off program where Craneware staff take paid leave to support projects and charities in their communities.Neither the Company nor its subsidiaries made any donation for political purposes in fiscal years 2016 or 2015.Annual General Meet

272、ingThe 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 all shareholders.The proxy card for registered shareholders is distributed along with the notice.Company RegistrationThe Company is r

273、egistered 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 statements in accordance with applicable law and regulations.Company law requires the Directors to prepare fin

274、ancial statements for each financial year.Under that law the Directors have prepared the Group and Parent Company financial statements in accordance with International Financial Reporting Standards(IFRSs)as adopted by the European Union.In preparing these financial statements,the Directors have also

275、 elected to comply with IFRSs,issued by the International Accounting Standards Board(IASB).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

276、 loss of the Group for that period.In preparing 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 Euro

277、pean Union and IFRSs issued by IASB have been followed,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

278、 are responsible for keeping adequate accounting records that are sufficient to show and explain the Companys transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and enable them to ensure that the financial statements comply with the Com

279、panies Act 2006.They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.The Directors are responsible for the maintenance and integrity of the companys website.Legislat

280、ion in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.Auditors and Disclosure of Information to AuditorsEach Director,as at the date of this report,has confirmed that insofar as they are aware there is no rele

281、vant audit information(that is,information needed by the Companys auditors in connection with preparing their report)of which the 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 inform

282、ation and to establish that the Companys auditors are aware of that information.A resolution to reappoint PricewaterhouseCoopers LLP as auditors 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 5 Se

283、ptember 2016Directors Report Contd.21Cranewareplc AnnualReport2016Corporate Governance ReportThe Board of Directors(the Board)acknowledges the importance and continued applicability for this reporting period of the principles set out in the UK Corporate Governance Code issued in April 2016(the“Code”

284、).Although the Code is not compulsory for AIM listed companies,the Board recognises the importance of good corporate governance practices and therefore has applied the principles in line with best practice for an AIM listed company.This Report identifies how it has complied with both the individual

285、principles and the spirit of the Code as a whole.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 achie

286、ve in applying the Code principles.Leadership The 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.”The Companys Board continues to be headed by its Chairman George Elliott and comprises two executive Di

287、rectors,Keith Neilson,Chief Executive Officer and Craig Preston,Chief Financial Officer along with four further non-executive Directors,Ronald Verni(Senior Independent Director),Neil Heywood,Colleen Blye and Russ Rudish.Detailed biographies of all Directors are contained on pages 16 and 17.The Board

288、 meets regularly to discuss and agree on the various matters brought before it,including the Groups trading results.The Board is well supported by the Groups Operations Board(details of which are provided below)and a broader senior management team,who collectively have the qualifications and experie

289、nce necessary for the day to day running of the Group.There is a formal schedule of matters reserved for the Board,which include approval of the Groups strategy,annual budgets and business plans,acquisitions,disposals,business development,annual reports and interim statements,plus any significant fi

290、nancing and capital expenditure plans.As part of this schedule,the Board has clearly laid out levels of devolved decision making authority to the Groups Operations Board.The Board has further established an Audit Committee and a Remuneration Committee details of which are provided below.The Board do

291、es not have a separate Nominations Committee as the Company has again taken advantage of the Codes relaxations available to smaller companies and incorporated this function within the remit of the entire Board.Attendance of Directors at Board and Committee meetings convened in the year,along with th

292、e number of meetings that they were invited to attend,are set out below:BoardRemuneration CommitteeAudit CommitteeNo.Meetings in year923Executive DirectorsK Neilson9/9-C T Preston9/9-Non Executive DirectorsG R Elliott9/9-N P Heywood9/92/23/3R Verni9/92/23/3C Blye 9/92/22/3R Rudish9/9-Where any Board

293、 member has been unable to attend Board or Committee meetings during the year,their input has been provided to the Company Secretary ahead of the meeting.The relevant Chairman then provides a detailed briefing along with the minutes of the meeting following its conclusion.As detailed in the Director

294、s Report on page 19,the Company maintains appropriate insurance cover against legal action brought against Directors and officers.The Company has further indemnified all Directors or other officers against liability incurred by them in the execution or discharge of their duties or exercise of their

295、powers.Division of Responsibilities“There should be a clear division of responsibilities at the head of the company between the running of the Board and the executive responsible for the running of the companys business.No one individual should have unfettered powers of decision.”The Board has estab

296、lished clearly defined and well understood roles for George Elliott as Chairman of the Company,and Keith Neilson as Chief Executive Officer.The Chairman is responsible for the leadership of the Board,ensuring its effectiveness and setting its agenda.Once strategic and financial objectives have been

297、agreed by the Board,it is the Chief Executive Officers responsibility to ensure they are delivered upon.To facilitate this,Keith Neilson as CEO chairs the Groups Operations Board which comprises the Chief Financial Officer and six further members of the Senior Management Team.The day-to-day operatio

298、n of the Groups business is managed by this Board,subject to the clearly defined authority limits.The Chairman“The chairman is responsible for leadership of the Board and ensuring its effectiveness on all aspects of its role.”George Elliott was appointed Chairman of the Board in August 2007,shortly

299、before the Company listed on the AIM market.At that time the then Board satisfied themselves that he was independent,fulfilling the requirements of the Code.In setting the Board agendas,the Chairman,in conjunction with the Company Secretary,ensures input is gathered from all Board Directors on matte

300、rs that should be included.Board papers are issued in advance of meetings to ensure Board members have appropriate detail in regards to matters that will be covered,thereby encouraging openness and healthy debate.Non-Executive Directors“As part of their role as members of a unitary board,non-executi

301、ve directors should constructively challenge and help develop proposals on strategy.”TThe Board has appointed Ronald Verni as Senior Independent Director.In this role,Ronald provides a sounding board for the Chairman as well as providing an additional channel of contact for shareholders,other Direct

302、ors or employees,if the need arises.In addition to matters outlined above,there is regular communication between executive and non-executive Directors,including where appropriate,updates on matters requiring attention prior to the next Board meeting.The non-executive Directors meet,as appropriate bu

303、t no less than annually,without executive Directors being present and further meet annually without the Chairman present.22Cranewareplc AnnualReport2016Corporate Governance Report Contd.EffectivenessThe Composition of the Board“The Board and its committees should have the appropriate balance of skil

304、ls,experience,independence and knowledge of the company to enable them to discharge their respective duties and responsibilities effectively.”The composition of the Board has been designed to give a good mix and balance of different skill sets,including significant experience in:high growth companie

305、s;software and healthcare sectors;entrepreneurial cultures;senior financial reporting;both UK and US companies;acquisitions;and other listed plc companies.Through this mix of experience,the Board and the individual Directors are well positioned to set the strategic aims of the Company as well as dri

306、ve the Groups values and standards throughout the organisation,whilst remaining focused on their obligations to shareholders and meeting their statutory obligations.The Board reviews on an annual basis the independence of each non-executive Director.In making this consideration the Board determines

307、whether the Director is independent in character and judgement and whether there are relationships or circumstances which are likely to affect,or could appear to affect,the Directors judgement.In regards to Neil Heywood,the Board considered his appointment to the original Craneware Limited Board in

308、January 2002.Whilst Neils tenure is over 10 years,the Company and the Board have significantly changed since the Companys IPO in 2007,as a result of this and Neils conduct,the Board has concluded this has not affected his independence.Appointments to the Board “There should be a formal,rigorous and

309、transparent procedure for the appointment of new directors to the Board.”When a new appointment to the Board is to be made,consideration is given to the particular skills,knowledge and experience that a potential new member could add to the existing Board composition.A formal process is then underta

310、ken,usually involving external recruitment agencies,with appropriate consideration being given,in regards to executive appointments,to internal and external candidates.Before undertaking the appointment of a non-executive Director,the Chairman establishes that the prospective Director can give the t

311、ime and commitment necessary to fulfil their duties,in terms of availability both to prepare for and attend meetings and to discuss matters at other times.Commitment “All directors should be able to allocate sufficient time to the company to discharge their responsibilities effectively.”All Board Di

312、rectors recognise the need to allocate sufficient time to the Company for them to be able to meet their responsibilities as Board members.All non-executive Directors contracts include minimum time commitments;however these are recognised to be the minimums.Details of the other directorships held by

313、each Board member are provided in the Director biographies on pages 16 and 17.The Board has evaluated the time commitments required by these other roles and does not believe it affects their ability to perform their duties with the Company.No executive Director currently holds any other plc director

314、ship.The non-executive Director contracts are available for inspection at the Companys registered office and are made available for inspection both before and during the Companys Annual General Meeting.Development“The Board should be supplied in a timely manner with the information in a form and a q

315、uality appropriate to enable it to discharge its duties.”The Chairman is responsible for ensuring that all the Directors continually update their skills,their knowledge and familiarity with the Group in order to fulfil their role on the Board and the Boards Committees.Updates dealing with changes in

316、 legislation and regulation relevant to the Groups business are provided to the Board by the Company Secretary/Chief Financial Officer and through the Board Committees.All Directors have access to the advice and services of the Company Secretary,who is responsible to the Board for ensuring that Boar

317、d procedures are properly complied with and that discussions and decisions are appropriately minuted.Directors may seek independent professional advice at the Companys expense in furtherance of their duties as Directors.Training in matters relevant to their role on the Board is available to all Boar

318、d Directors.New Directors are provided with an induction in order to introduce them to the operations and management of the business.In addition,the Directors periodically meet with the Groups Operations Board on an informal basis.This provides all Directors with direct access to the senior manageme

319、nt of the Company and allows for better understanding of how the strategy set by the Board is being implemented across the Group.Evaluation The Board should undertake a formal and rigorous annual evaluation of its own performance and that of its committees and individual directors.”At the end of the

320、 prior financial year,a formal evaluation was conducted by means of a detailed questionnaire which was completed by each Director.The results of this process were collated by the Chairman and in the current year were reviewed by the Board as a whole.This evaluation included a review of the performan

321、ce of individual Directors including the Chairman and the Board Committees.Overall the Board has concluded that its performance in the period under review had been satisfactory.This review process will be repeated and updated as appropriate.The Board has considered the Codes recommendation that the

322、evaluation of the Board be carried out externally at least every three years.The Board recognises this recommendation is not applicable to AIM listed companies and has determined it was not necessary to carry out an external review in the current year.Re-election “All directors should be submitted f

323、or re-election at regular intervals,subject to continued satisfactory performance.”Under the Companys Articles of Association,at every Annual General Meeting,at least one-third of the Directors who are subject to retirement by rotation,are required to retire and may be proposed for re-election.In ad

324、dition,any Director who was last appointed or re-appointed three years or more prior to the AGM is 23Cranewareplc AnnualReport2016required to retire from office and may be proposed for re-election.Such a retirement will count in obtaining the number required to retire at the AGM.New Directors,who we

325、re not appointed at the previous AGM,automatically retire at their first AGM and,if eligible,can seek re-appointment.However,the Board recognises the Codes recommendation that all Directors should stand for re-election every year,and whilst not a requirement,the Board has decided to adopt this recom

326、mendation as best practice.As such,all Directors will retire from office at the Companys forthcoming AGM.It is the intention of all Directors,except Neil Heywood,to stand for re-appointment.As detailed in the Chairmans Statement on page 4,Neil has decided,due to his length of tenure with the Board,n

327、ot to stand for re-appointment.AccountabilityFinancial and Business Reporting“The Board should present a balanced and understandable assessment of the companys position and prospects.”The Board recognises its responsibilities,including those statutory responsibilities laid out on page 20.An assessme

328、nt of the Groups market,business model and performance is presented in the Chairmans Statement and the Strategic Review on pages 4 to 12.As detailed on page 18 of the Directors Report,the Board has confirmed that it is appropriate to adopt the going concern basis in preparing financial statements.Ri

329、sk Management and Internal Control“The Board is responsible for determining the nature and extent of the significant risks it is willing to take in achieving its strategic objectives.The Board should maintain sound risk management and internal control systems.”The Directors recognise their responsib

330、ility for the Groups system of internal control,and have established systems to ensure that an appropriate and reasonable level of oversight and control is provided.These systems are reviewed for effectiveness annually by the Audit Committee and the Board.The Groups systems of internal control are d

331、esigned to help the Group meet its business objectives by appropriately managing,rather than eliminating,the risks to those objectives.The controls can only provide reasonable,not absolute,assurance against material misstatement or loss.Executive Directors and senior management meet to review both t

332、he risks facing the business and the controls established to minimise those risks and their effectiveness in operation on an ongoing basis.The aim of these reviews is to provide reasonable assurance that material risks and problems are identified and appropriate action taken at an early stage.From t

333、his review the Company maintains its internal risk register which forms the foundation of the Board and the Audit Committee review process.The annual financial plan is reviewed and approved by the Board.Financial results with comparisons to plan and forecast results are reported on at least a quarterly basis to the Board together with a report on operational achievements,objectives and issues enco