Clarity Commerce
Solutions plc
Annual Report &
Financial Statements
2005 Financial Highlights 2
Company Overview 4
Group Chairman’s Statement 6
Group Chief Executive’s Statement 9
Officers and Advisors 14
Directors’ Report 16
Statement of Directors’ Responsibilities 20
Independent Auditors’ Report 21
Financial Statements 22
Notes to the Financial Statements 27
Notice of Annual General Meeting 47
contents
Annual Report & Financial Statements 2005 1 financial highlights
2 Clarity Commerce Solutions plc
“We have made significant progress during the last
12 months, our fourth successive year of profit and overall
growth. Revenues from existing customers represent 92% of
the Group’s total revenue, which is a strong endorsement of
the product quality and service excellence that we offer. ” 
John O’Connell, Non-Executive Chairman
“During the year there has been a
series of strategic developments
including the Baron acquisition and
the replacement of the Ticketing
system. We are particularly excited by
the Sodexho opportunity, which will
accelerate our entry into new market
sectors. The increase in recurring
revenues also provides the Group with
increased forward visibility.
Furthermore, acquisitions completed
over the last few years continue to be
integrated, and are yielding significant
benefits across the Group. ” 
Graham York, Chief Executive financial highlights
Annual Report & Financial Statements 2005 3
Turnover 
increased by 22% to £16.3m 
(2004: £13.3m) 
Pre-tax profit before goodwill
£763k 
(2004: £744k)
Pre-tax operating profit before goodwill
£919k 
(2004: £826k)
Research and Development investment
increased by £600k to c.£1.6m 
(2004: c.£1m) 
Adjusted earnings per share 
4.03p 
(2004: 4.10p) 
Recurring revenue 
increased by 21% to £6.8m 
(2004: £5.6m)  Clarity Commerce Solutions is a
leading IT solutions supplier to the
global leisure industry. Clarity
software and IT services clients
span the entertainment, leisure
and retail sectors, where our
integrated solution approach
delivers exceptional business value.
Our international client base
benefits from operational and
management efficiency savings,
incremental revenue generation,
increased business control and
improved customer service levels,
all contributing to improved
corporate performance.
Clarity is headquartered in the UK,
with further offices in the US and
Continental Europe, and we have a
growing international network of
commercial partners. The Company
is traded on AIM, a global market
operated and regulated by the
London Stock Exchange,
maximising our financial stability
and access to market funds.
Our integrated software solutions
and services are used daily by some
1,200 cinemas and leisure
attractions, 1,500 pubs, bars,
restaurants & hotels, and 450 leisure
centres, not to mention our many
high profile clients in the
manufacturing, transport and retail
sectors. Our experience across
multiple vertical markets exposes us
to a broad range of technology
challenges, and has been the
trigger for several innovative
product developments. Our clients,
currently spread across more than
20 countries, are the beneficiaries of
this cross-sector exposure.
Clarity's solutions approach is
centred on our renowned Clarity
Central software, our 'ERP' system
4 Clarity Commerce Solutions plc
clarity commerce solutions
St Andrews Links Trust uses Clarity online bookings software for multi-operational groups.
Central, allied with our many well
proven market-specific software
solutions, allows multi-site
businesses to orchestrate their
operations with a high level of
efficiency, profitability, control and
security. Integral, Cognos-based
business Intelligence solutions
deliver renowned analysis and
reporting power, and our support
division adds the back-up resources
clients demand, with 24/7
implementation, training and
helpdesk services - in 5 languages. 
Clarity Commerce Solutions' clients include:
Greene King, Yo! Sushi, Cineworld,
National Amusements, EuroPalaces
(Pathé and Gaumont), Paramount Parks,
Birmingham City Council, Serco Leisure,
Gleneagles, Jumeirah International,
Raytheon Systems, Wisemans Dairies, Vinci,
Wincor Nixdorf, TKMaxx, Mothercare and
BT Expedite.
clarity commerce solutions
Annual Report & Financial Statements 2005 5
clarity clients I am delighted to report on another
successful year for Clarity Commerce
Solutions. There has been continued
improvement in financial performance,
with sales having increased by 22% to
£16.3m (2004: £13.3m) for the year
ended 31 March 2005. Gross profit
accelerated by 23% to £10.16m (2004:
£8.27m) in the same period. Adjusted
basic earnings per ordinary share were
4.03p (2004: 4.1p).
Profit before goodwill impairment and
taxation was £763k (2004: £744k), including
a total research and development cost of
£1.6m (2004: £1m), heavily focused on the
replacement of our Ticketing system
solution. It is pleasing to note that the year
ended 31 March 2005 was the fourth
successive year of profitability and growth.
During the year there has also been a series
of strategic developments, which position
the business strongly for ongoing profitable
growth.
Revenues from existing customers
represented 92% of the Group's total
revenue. Recurring revenue was £6.8m
representing 42% of the total (2004: £5.6m;
42%). The Group expects these recurring
revenues to increase over time and provide
enhanced visibility for future revenues.
Acquisitions and integration
In October 2004, Clarity acquired Baron
LRMS, a company focused on solutions for
leisure resorts. Its software, installed in
hotels and resorts, includes specialist
functionality for club membership
management, golf courses and health spas,
adding further depth to our leisure sector
offering. Baron was the Group's sixth
acquisition since listing on AIM in July 2000.
This last year has culminated in the
continuing integration of the acquisitions
made to date and the increasing realisation
of value as Clarity benefits from significant
cross-selling benefits and the ability to more
rapidly access new market sectors.
During the last year, we have focused on
the integration and enhancement of our
software product portfolio. Clarity now
chairman’s statement
John O’Connell, Non-Executive Chairman
John was founder, Chairman and Chief Executive Officer of Staffware plc, the leading independent global workflow and
business process management (BPM) software company. He is a Fellow of the Chartered Association of Certified Accountants
(FCCA) and is recognised as one of Europe’s top IT entrepreneurs. 
6 Clarity Commerce Solutions plc provides a fully integrated solution for all
the business requirements of our hospitality,
ticketing and leisure sector customers. This
approach has already delivered sales, such
as the installation for Bracknell Forest
Borough Council, which incorporates Clarity
leisure software and smartcard systems
alongside our hospitality and retail software.
Strategy 
We are committed to delivering organic
growth using the Group's existing software
portfolio, based around our flagship
software solution, Clarity Central. Future
offerings will be based on the Microsoft
.NET development platform, helping us to
integrate solutions from additional
acquisitions and enabling the Group to
enter new market sectors and drive future
growth. The Group will continue to extend
its global footprint via direct and indirect
sales channels.
Geographic markets
UK business continues to dominate the
Group's revenue, comprising 75% of this
(2004: 81%). Notable UK successes include
the YO! Sushi restaurant contract, an
installation of Clarity Central to support over
400 Greene King pubs, a six-month Foreign
Office support services contract, further
penetration in the local authority sector,
and private sector contracts such as
London's Reebok Sports Club.
The acquisition of Baron extends the
Group's global reach, with clients such as
Jumeirah International in the Middle East.
Clarity's international sales have increased
both through our local offices and the
establishment of reseller partners in local
markets, and the Group has customers in
over 20 countries. In North America, there
has been a concerted effort to penetrate
the market for ticketing and entertainment
management software, together with
progress in the attractions and theme parks
sector. Our European office has also been
focused on growth in the existing cinema
marketplace, announcing a new
maintenance and support contract in April
2005 with cinema operator EuroPalaces,
worth €2.4m over 3 years.
Dividend policy
No dividend is recommended for this year, as
the Board has reaffirmed its dividend policy
that capital should be allocated to developing
products and driving future growth.
chairman’s statement
Annual Report & Financial Statements 2005 7 Board changes
I was delighted to accept the Board's
invitation to become Chairman with effect
from 7 April 2005. I look forward to
leveraging my experience in growing a
successful listed UK based software business
internationally, having been founder, CEO
and Chairman of Staffware plc, and to
helping the Board achieve the Group's
potential as a leader in its chosen markets.
Bob Morton stepped down as Chairman
this year, having been a key figure in
steering the Company through its early
phases of development. The Board, on
behalf of its shareholders, is extremely
grateful for his invaluable contribution in
these formative years.
David Shearmon, one of the founding
Directors of Clarity, has indicated his
intention to step down from his Board role
effective as of the AGM on 25 August, 2005.
I am very pleased to report that David has
expressed his willingness to continue with
the Group in a strategic and advisory role,
for which we are very appreciative.
Outlook
Clarity now offers world class software,
business intelligence solutions and IT
support services to the entertainment,
leisure and retail sectors. 
The Group is strongly positioned to
capitalise on the converging market for
entertainment software. Prospects in terms
of new business opportunities are high, due
in part to the fact that we have blue-chip
customers in Europe, the Middle East and
the US, who can provide reference points
for new customers and in so doing, help
drive further organic growth in these
markets. 
The Board will also seek to continue
generating growth through acquisition,
building on its experience of successful
integration of acquisitions over the last four
years. 
My colleagues and I are confident that the
progress reported here for last year in terms
of increased revenue and profits can be
sustained, based upon our current reading
of our markets, competitive position and
business environment generally.
John O'Connell
Group Non-Executive Chairman 
chairman’s statement
8 Clarity Commerce Solutions plc
Some of the facilities at The Reebok Sports
Club London, a Clarity software user Overview
Clarity is well on the way to achieving our
goal of being a major supplier to the leisure
industry worldwide. Our solutions span the
entertainment, leisure and retail sectors,
where we are building a reputation for our
expertise in software, business intelligence
solutions and IT support services. 
The Group is continuing to expand its
international sales network.  Sales are
increasing in the US and Europe, as well as
in the Middle East and other markets
through our growing network of reseller
partners. Furthermore, our offices in each
country are being equipped and developed
as sales outlets for the wider Clarity
portfolio, to ensure that international sales
opportunities are maximised.  The
geographical split of revenues in 2005 was
as follows:
- 75% to the UK (2004: 81%); 
- 13% to the rest of Europe (2004: 13%);
- 11% to the US (2004: 6%); and
- 1% elsewhere (2004: nil).
One of the central drivers of this success has
been our commitment to integration,
structurally as well as in our approach to
product development. We expect this
integration to add value through improved
processes and reduced costs of delivery.
In terms of our products, we are integrating
our existing software portfolio, based
around Clarity Central, and adopting
Microsoft's .NET software development
platform, as the basis for all new offerings.
This integration is a palpable source of
competitive advantage. 
This year has demonstrated clear evidence
of the benefits of cross trading across our
divisions and market sectors, including:
- Completion of an integrated hospitality
and ticketing solution, already attracting
significant interest from cinema chains. 
- Delivery of innovative solutions to local
authorities in Bracknell and Bolton,
which combine state-of-the-art
smartcard technology with point of sale
(POS) and leisure management systems. 
- Increasing recognition of the value of
our Business Intelligence division's
solutions, as witnessed by orders from
Serco Leisure and other leisure
management customers. 
- Integration of hospitality services with
our dedicated Services division.
2005 has been an exciting year for Clarity, with a series of key developments which
position the business as a leading supplier to the global leisure industry, harness
value from previous acquisitions and open up exciting sales opportunities. Our
financial performance shows a significant increase in revenues through organic
growth as well as through the acquisition of Baron LRMS, and we are in an excellent
position to increase profitability through further penetration of the growth market
sectors on which we are focusing.
chief executive’s statement
Graham York, Chief Executive
Graham has a background in the business development of software products, both in this country and abroad. His experience
includes product design, adaptation of software to new markets, and marketing. He has also acted as a Director of two leisure groups
and worked for a number of years as a journalist. The founder of Clarity, he led the development of the original software portfolio. 
Annual Report & Financial Statements 2005 9 Research and development
Clarity remains committed to product
development, which is underlined by our
£1.6m investment over the year in software
development and quality assurance work.
During the period, a dedicated Research
and Development department was
established which has made substantial
progress in integrating the Group's portfolio
of solutions around Clarity Central, based on
Microsoft's .NET platform. The .NET platform
offers major advantages to Clarity and its
customers and is contributing to a healthy
prospect list for our software products.  
Clarity's first .NET solutions are now installed
with clients including YO! Sushi restaurants
in the UK and Paramount Parks in the US.
A few months ago we announced our
intention to deliver a .NET-based ticketing
solution, and now Cinemagic has become
our first Ticketing division client to go live
with this software.
Market sectors and operations review
Clarity's sales increasingly combine
elements of software systems, business
intelligence solutions and IT support
services in broad ranging customer
solutions. 
Software
Clarity's markets can broadly be defined as
the hospitality, ticketing and leisure sectors.
Regardless of the specific sector where our
software is installed, the benefits are
constant - savings through operational and
management efficiencies, revenue
generation through innovative bookings
systems, increased control by corporate
management and improved customer
service levels.
The Group provides hospitality clients,
including major UK bar and restaurant
groups, with transactional systems covering
everything from electronic point of sale
(EPOS) and staff and cash management at
site level, to head office control systems.
Clients include many leading industry
names such as Greene King, Hall &
Woodhouse Brewery, Strada and YO! Sushi. 
In terms of ticketing clients, Clarity has a
very strong presence in the UK and Europe,
with 4 of the top 5 cinema operators using
our software. Ticketing solutions encompass
venue management, operation of box
offices and driving sales via the internet and
other third party channels. Clients include
Odeon, Cine UK, UCI and EuroPalaces (Pathe
and Gaumont). 
Recent sales to theme parks including
Paramount Parks in the U.S.A. underline the
potential for sales to non-cinema attractions
such as stadiums, attractions and
performance venues. Cinemagic, a U.S.
operator of stadium style theatres, became
the first cinema customer for Clarity's .NET
ticketing software (together with Clarity
POS software) in May 2005.
chief executive’s statement
10 Clarity Commerce Solutions plc chief executive’s statement
Leisure software clients include a diverse
range of operators seeking membership,
bookings and facilities management
systems, again with a strong focus on head
office control via a central platform. Clarity
continues to be a leading provider to the
public sector, with Birmingham City Council
and Serco Leisure running Clarity software
in 60 and 50 sites respectively. Our
innovative smartcard and internet bookings
solutions put us in a strong position to
capitalise on the growth potential of this
sector.
Clarity's leisure market presence has been
extended with the acquisition of Baron
LRMS in October 2004. Baron is an
established software supplier to hotels and
leisure resorts, with strong membership
management features and dedicated
applications for golf courses and health
spas. This has brought a prestigious private
sector client list on-board, with the addition
of names such as Gleneagles, St Andrews,
the Reebok Sports Club (London) and
Jumeirah International, the Middle East's
leading hotel company. Clarity is driving
software sales through an active reseller
partner programme, and is achieving
notable sales success in Spain following the
development of a Spanish language
solution.
Business Intelligence 
Clarity's Business Intelligence offering
follows the March 2003 acquisition of
Romulus Enterprises. Sales continue to
increase, with independent revenue streams
developing and standardised business
intelligence solutions for accounting, ERP
(Enterprise Resource Planning) and HR
(Human Resource) systems. Customers
operate in the Group's core hospitality,
ticketing and leisure markets, and
increasingly in the wider retail,
manufacturing, production and transport
sectors.
The integration of business intelligence
solutions to Clarity's core product has
attracted huge interest and growing sales
from existing Clarity clients in all sectors,
with several new contracts, including that
with Serco Leisure. This integrated offering
is proving a major sales feature in all
markets.
Clarity Business Intelligence division clients
include Robert Wiseman Dairies plc,
Raytheon Systems and JD Wetherspoon,
and the Group is now accredited to sell and
implement the Cognos Enterprise Planning
suite. The number and type of training
courses run in partnership with Cognos
have also been extended, with strong client
attendances driving additional revenues.
Services
Clarity acquired our Services division in
2003, offering helpdesk and training
services to support clients across the retail
and hospitality markets, as well as providing
Annual Report & Financial Statements 2005 11 support to Clarity's existing software clients.
It operates on a full-time, 24-hour basis and
provides support in five languages.  New
sales during the period include a one year
rolling contract to provide first level
helpdesk services to Warnaco for their 25
European Calvin Klein and Speedo retail
outlets, a contract supporting 600 network
connections for TFM's clients including
Travelodge, Officers Club, Co-op, Uniqlo and
H&M, and supporting 70 major Jarvis Hotels
on behalf of ATM, as well as multiple
contracts with Wincor Nixdorf.  
A six month Foreign Office contract
involved implementation and training
services to support Visa payment
processing software, with on-site training
delivered in 140 Visa offices, worldwide.
Further training contracts included
supporting a hotel software rollout for
Travelodge, providing training resources to
other major hotel groups including De Vere
and Hilton, and introducing new customer
booking software to staff from
approximately 500 Specsavers stores. 
We have recently announced that
BT Expedite, the retail software division of
BT, has awarded Clarity's Services division a
five year contract to the value of £2 million
for the provision of helpdesk services to one
of its major high street retail clients.
People 
Clarity has the benefit of a highly talented
and loyal workforce, delivering that rare
combination of new sales together with
improved customer service levels. The Board
would like to thank all members of our
team for their magnificent contribution to
the continued success of the Group.
The challenges of integration are also
generating opportunities to 'grow' people
into new roles, and we are helping and
training employees to seize these
opportunities. The move to integrate our
software based on the Microsoft .NET
platform demands a sharp learning curve
from our development team, to which we
have recruited a number of key new
members. For other staff there are equally
exciting challenges, with the shift from a
divisional focus to a much broader and
more integrated sales effort to maximise
cross-selling opportunities.
Clarity owes Bob Morton, who has
relinquished his role as Chairman, an
enormous debt of gratitude. He has
presided over a pivotal phase of the Group's
development, and remains an active
shareholder with a strong relationship with
the Board.
John O'Connell has been appointed as
Clarity's Non-Executive Chairman, and I
welcome his arrival. John was founder,
Chairman and CEO of Staffware plc. His
contacts and knowledge gained from the
successful development of Staffware and its
partner-based sales strategy will be of great
benefit to Clarity.
Finally, David Shearmon, one of the
founding Directors of Clarity, has indicated
his intention to step down from the Board.
He will continue in a strategic and advisory
role; functionally he will work with the CTO
and CEO on specific aspects of software
development and the technical implications
of acquisitions. 
David has been instrumental in helping the
Group achieve its aims, and the Board
would like to thank him for his dedication
chief executive’s statement
12 Clarity Commerce Solutions plc and loyalty over the past 12 years. These
changes to his circumstances are made
with the Board's support, and are designed
to satisfy the Board's continuing need for
David's abilities.
Summary
Clarity has achieved continued growth in
the past year, but more significantly I
believe, has made huge strides forward in
integrating and developing our products to
capitalise on our strengths and the
opportunities a converging market
presents. Our acquisitions have been
embedded in the business and are
performing increasingly well. New sales are
being generated on the basis of Clarity's
capability to provide broad ranging
solutions encompassing software, business
intelligence and IT services elements.
We have invested significant effort and
resources to migrate our software to the
Microsoft .NET platform, and this process
continues apace. The move to .NET will
stand us in excellent stead in the long term,
offering clear advantages to our clients as
we deliver next generation solutions that
take their business to new levels. Together
with this investment, we have a well-
established and dedicated team of people
that are relishing the prospect of
developing, selling and delivering such
innovative business solutions.
We continue to pursue our goal of
establishing Clarity as a leading IT supplier
to the global leisure industry, and look
forward to further growth in 2005/2006.
Graham Y ork
Group Chief Executive
chief executive’s statement
Annual Report & Financial Statements 2005 13
The Reebok Sports Club London, uses Clarity software officers and advisors
14 Clarity Commerce Solutions plc
John O'Connell: Group Non-Executive Chairman
Graham Y ork: Group Chief Executive
David Shearmon: Technical Director
Peter Walker: Director
Richard Arnold: Company Secretary
All of: 
Number One, Netherhampton Business Centre, Netherhampton, Salisbury, Wiltshire SP2 8PU
Registered number: 3914814
Nominated adviser and nominated broker: 
Bridgewell Limited, Old Change House, 128 Queen Victoria Street, London EC4V 4BJ
Auditors:
Solomon Hare Audit LLP , Oakfield House, Oakfield Grove, Clifton, Bristol BS8 2BN
Registrars:
Capita IRG plc, Balfour House, 390/398 High Road, Ilford, Essex IG1 1NQ
Solicitors:
Hammonds, Rutland House, 148 Edmund Street, Birmingham B3 2JR 
Bankers:
Bank of Scotland, 55 Temple Row, Birmingham B2 5LS financial statements
Annual Report & Financial Statements 2005 15
Directors’ Report 16
Statement of Directors’ Responsibilities 20
Independent Auditors’ Report 21
Consolidated Profit and Loss Account 22
Consolidated Statement of Total Recognised
Gains and Losses
23
Consolidated Balance Sheet 24
Company Balance Sheet 25
Consolidated Cash Flow Statement 26
Notes to the Financial Statements 27 The Directors present their report together with the financial statements for the year ended 31 March 2005.
Principal activities, review of business and future development
The principal activities of the Group are the provision of software solutions for ticketing, leisure, hospitality, business intelligence and support
services, with offices in the UK, US, France and Germany.
A review of the business of the Group and its future development is contained in the Group Chairman's Statement and the Group Chief
Executive's Statement on pages 6 to 13. On 29 October 2004 the entire share capital of Baron LRMS was acquired. Baron provide IT solutions
to the golf and spas marketplace. Details of the acquisition can be found in note 31.
Dividends
No interim dividend was proposed and the Directors do not recommend the payment of a final dividend (2004: nil).
Research and development
At the year end the Group employed the services of 33 full time software developers. In the financial year ended 31 March 2005 the Group
incurred approximately £1,600,000 (2004: £1,000,000) in research and development expenditure, which has been written off to the profit and
loss account. The Group incurred 12 months expenditure in respect of the US based development team (2004: 8 months).
This development work, using the Microsoft .NET platform, will provide the Group and its clients with significant advantages. This step
change in our product, based on the use of Web Services, allows Clarity to offer a single, modular integrated solution that meets the needs
of its clients across all its market verticals.
The choice of a Web Services based approach provides the option to easily integrate with external systems and 3rd party products through
the use of integration standards such as XML.
In addition to the existing US development team, a new dedicated software development team has been formed at the new Basingstoke
office. Combined with the market and product experience of the existing staff and leading edge technical skills of the new staff, Clarity now
has the resources it needs to continue with its innovative research and development programme.
directors’ report
16 Clarity Commerce Solutions plc Directors and their interests
The Directors of the Company during the year and their interests in the ordinary share capital of the Company, were as follows:
In addition 1,343,331 shares are held by Groundlinks Limited as detailed below (2004: Southwind Limited 1,343,331). Groundlinks Limited and
Southwind Limited are investment companies wholly owned by trusts settled by ALR Morton.
ALR Morton retired as Non-Executive Chairman on 7 April 2005 and JA O'Connell was appointed as Non-Executive Chairman on the same
date. JA O’Connell purchased 50,000 shares on 13 April 2005.
At the end of the year P J Walker and D F J Shearmon held options over 150,375 ordinary shares and 100,000 ordinary shares respectively at
an exercise price of 66.5p per share. The market price of the shares at 31 March 2005 was 66.5p. The maximum share price during the year
was 72.5p and the minimum share price was 58.5p. 
Notifiable shareholdings
In addition to the interests described above, the Company is aware of the following interests of 3% or more in the issued share capital of the
Company notifiable as at 31 March 2005:
Corporate governance
The Board recognises the importance of sound corporate governance and endorses, has adopted, and intends to comply with the main
provisions of the principles of good corporate governance and code of best practice prepared by the Committee on Corporate Governance
and adopted by the UK Listing Authority (the "Combined Code") to the extent that the Directors consider practical and appropriate for an
AIM listed company of the size and nature of Clarity.
The Board meets regularly to discuss operational and strategic matters relating to the Group's activities. The Board has established Audit and
Remuneration Committees, each having formally delegated duties and responsibilities. Both committees comprise the Group's
Non-Executive Chairman and will include any further Non-Executive Directors on appointment and will meet not less than twice a year.
directors’ report
Annual Report & Financial Statements 2005 17
Number of 
ordinary shares
Percentage of issued 
share capital
Isis Asset Management 2,540,600 15.55
Groundlinks Limited 1,343,331 8.22
Herald Investment Trust plc 1,165,956 7.14
Matrix Eventure Fund VCT plc 520,000 3.18
Michael J Stedman 516,038 3.16
Close Bros Aim VCT plc 514,522 3.15
At 31 March 2005 At 31 March 2004
A L R Morton 891,667 891,667
G York 3,527,839 3,488,494
D F J Shearmon 155,951 161,394
P J Walker 5,443 5,443 Internal control
The Directors acknowledge their responsibilities for the Group's system of internal control. The Board considers major business and financial
risks. Accepting that no system of control can provide absolute assurance against material misstatement or loss, the Directors believe that
the established systems of internal control within the business are appropriate to the business. Further improvements in respect of internal
controls are constantly being considered and further improvements have been implemented across the Group during the year.
Going concern
After making enquiries, the Directors have formed a judgement at the time of approving the financial statements that there is an expectation
that the Group has adequate resources to continue its operations for the foreseeable future. For this reason, the Directors continue to adopt
the going concern basis in preparing the financial statements.
Directors' remuneration
The remuneration of the individual Directors was as follows:
In addition to the above the Group made contributions to personal pension plans for G York of £7,500 , PJ Walker of £4,612 and
DFJ Shearmon £4,000.
Service contracts
G York, DFJ Shearmon and PJ Walker have service agreements with the Company which they entered into on 18 July 2000. 
A salary review, effective from 1 April 2004, resulted in revised salary levels of £165,000 and £107,800 for G York and PJ Walker respectively.
DFJ Shearmon’s remuneration for the year was £80,000.
DFJ Shearmon will be retiring from the Board of Directors at the conclusion of the AGM and has accordingly given notice to the Company
that he will not be offering himself up for re-election.
ALR Morton retired from his position as Non-Executive Chariman on 7 April 2005 and JA O'Connell was appointed on the same date.
JA O’Connell has entered into a service agreement with the Company for an initial term of two years, with a notice period for both parties of
three months. The remuneration in respect of JA O’Connell’s services is £24,000 per annum plus disbursements.
directors’ report
18 Clarity Commerce Solutions plc
Salary 
and fees
£
Benefits 
in kind
£
As at 31 March
2005 Total
£
As at 31 March
2004 Total
£
Executive Directors:
G York 171,000 35,202 206,202 146,799
DFJ Shearmon 80,000 13,656 93,656 92,091
PJ Walker 112,800 2,078 114,878 88,643
Non-Executive Directors:
ALR Morton 20,000 - 20,000 20,000
383,800 50,936 434,736 347,533 Creditor payment policy
The Group seeks to maintain good relations with all of its trading partners. It is the Group's policy to comply with the terms of trade agreed
with each of its suppliers. As at 31 March 2005, the Group's outstanding trade creditors represented 45 days purchase (2004: 46 days).
European monetary union
The introduction of the Euro has had minimal impact on the Group and has been handled adequately by its systems.
Auditors
A resolution to re-appoint Solomon Hare Audit LLP as the Company's auditor will be put to the Annual General Meeting. On 27 May 2005
Solomon Hare LLP changed its name to Solomon Hare Audit LLP .
On behalf of the Board
G Y ork JA O’Connell
Group Chief Executive Group Non-Executive Chairman
Date: 22 July 2005
directors’ report
Annual Report & Financial Statements 2005 19 The Directors are required by the Companies Act 1985 to prepare financial statements for each financial year which give a true and fair view
of the state of affairs of the Company and the Group as at the end of the financial year and of the profit or loss of the Group for that period.
The financial statements have been prepared on a going concern basis. 
Following discussions with the auditors the Directors consider that in preparing the financial statements on pages 22 to 46 the Company
and the Group have used appropriate accounting policies, consistently applied and supported by reasonable and prudent judgements and
estimates, and that all accounting standards, which they consider to be applicable, have been followed. 
The Directors have responsibility for ensuring that the Company and the Group keep accounting records which disclose with reasonable
accuracy at any time the financial position of the Company and the Group and which enable them to ensure that the financial statements
comply with the Companies Act 1985. The Directors have general responsibility for taking such steps as are reasonably open to them to
safeguard the assets of the Company and the Group and to prevent and detect fraud and other irregularities. 
G Y ork
Group Chief Executive
Date: 22 July 2005
statement of directors’ responsibilities
20 Clarity Commerce Solutions plc Independent Auditors’ Report to the Shareholders of Clarity Commerce Solutions plc
We have audited the financial statements of Clarity Commerce Solutions plc for the year ended 31 March 2005 which comprise the Profit
and Loss Account, the Balance Sheets, the Statement of Total Recognised Gains and Losses, the Cash Flow Statement and the related notes.
These financial statements have been prepared under the historical cost convention and the accounting policies set out therein.
This report is made solely to the Company's members, as a body, in accordance with Section 235 of the Companies Act 1985. Our audit work
has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the
Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of Directors and auditors
As set out in the Statement of Directors' Responsibilities, the Company's Directors are responsible for the preparation of the financial
statements in accordance with applicable law and United Kingdom Accounting Standards. It is our responsibility to audit the financial
statements in accordance with relevant legal and regulatory requirements and United Kingdom Auditing Standards.
We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared in accordance with
the Companies Act 1985. We also report to you if, in our opinion, the Directors' Report is not consistent with the financial statements, if the
Company has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if
information specified by law regarding Directors' remuneration and transactions with the Company and Group is not disclosed.
We read other information contained within the Annual Report, and consider whether it is consistent with the audited financial statements.
This other information comprises only the Directors' Report, the Chairman's Statement and the Group Chief Executive’s Review. We consider
the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements. 
Our responsibilities do not extend to any other information. We are not required to consider whether the Board's statements on internal
control cover all risks and controls, or form an opinion on the effectiveness of the Group's corporate governance procedures or the risk and
control procedures.
Basis of audit opinion
We conducted our audit in accordance with United Kingdom Auditing Standards issued by the Auditing Practices Board. An audit includes
examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment
of the significant estimates and judgments made by the Directors in the preparation of the financial statements, and of whether the
accounting policies are appropriate to the Company's and Group's circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to
provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether
caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of
information in the financial statements.
Opinion
In our opinion the financial statements give a true and fair view of the state of the Company's and Group's affairs as at 31 March 2005 and of
the Group's profit for the year then ended, and have been properly prepared in accordance with the Companies Act 1985.
Solomon Hare Audit LLP
Registered Auditors, Chartered Accountants, Oakfield House, Oakfield Grove, Clifton, Bristol BS8 2BN 
Date: 22 July 2005
independent auditors’ report
Annual Report & Financial Statements 2005 21 for the year ended 31 March 2005
consolidated profit and loss account
22 Clarity Commerce Solutions plc
The notes on pages 27 to 46 form part of these financial statements.
Earnings per share are shown on page 23.
Notes
Year ended
31 March 2005
£’000
Year ended
31 March 2004
£’000
Turnover 2
- continuing operations 15,851 13,325
- acquisitions 459 -
16,310 13,325  
Cost of sales (6,155)   (5,052)   
Gross Profit 10,155 8,273   
Operating costs (9,486)   (7,680)   
Operating profit 3 669 593
Operating profit split between:
- continuing operations 648 593
- acquisitions 21 -
669 593
Operating profit from continuing operations before impairment of goodwill 898 826
Continuing operations - impairment of goodwill 8 (250) (233)
Operating profit from acquired operations 21 -
Operating profit after impairment of goodwill 669 593
Interest receivable 596 322
Interest payable 5 (752) (404) 
(156) (82)
Profit on ordinary activities before taxation 513 511 
Taxation on profit on ordinary activities 6 (120) (131)
Retained profit for the year 24 393 380
Profit on ordinary activities before impairment of goodwill and taxation 763 744
Impairment of goodwill (250) (233)
Profit on ordinary activities before taxation 513 511 earnings per ordinary share
Annual Report & Financial Statements 2005 23
for the year ended 31 March 2005
The notes on pages 27 to 46 form part of these financial statements.
Notes
Year ended 
31 March 2005
Year ended 
31 March 2004
Profit per ordinary share 7
- basic 2.46p 2.54p
- diluted 2.36p 2.49p
- adjusted basic 4.03p 4.10p
Dividends per share - - 
Year ended
31 March 2005
£’000
Year ended
31 March 2004
£’000
Profit for the financial year 393 380
Foreign exchange adjustment (42) (158)
Total gains and losses recognised since the last annual report 351 222
statement of total recognised gains and losses
for the year ended 31 March 2005 consolidated balance sheet 
24 Clarity Commerce Solutions plc
as at 31 March 2005
The notes on pages 27 to 46 form part of these financial statements.
Notes
As at
31 March 2005
£’000 £’000
As at
31 March 2004
£’000 £’000
Fixed assets
Intangible assets 8 11,305 10,322
Tangible assets 9 530 518
11,835 10,840
Current assets
Stocks 11 628 501
Debtors 12 4,767 4,023
Cash at bank and in hand 13 1,334 2,122
6,729 6,646
Creditors: amounts falling due within one year 14 (6,745) (5,973)
Net current (liabilities) / assets (16) 673
Total assets less current liabilities 11,819 11,513
Creditors: amounts falling due after more than one year 15 (2,332) (2,492)
Net assets 9,487 9,021
Capital and reserves
Called up share capital 21 4,084 3,985
Share premium account 23 5,974 5,833
Shares to be issued 25 - 125
Profit and loss account 24 (571) (922)
Equity shareholders’ funds 24 9,487 9,021
Approved by the Board of Directors on 22 July 2005
G Y ork PJ Walker
Group Chief Executive Director company balance sheet
Annual Report & Financial Statements 2005 25
as at 31 March 2005
The notes on pages 27 to 46 form part of these financial statements.
Notes
As at
31 March 2005
£’000 £’000
As at
31 March 2004
£’000 £’000
Fixed assets
Investment in subsidiary undertakings 10 12,373 11,973 
Current assets
Debtors 12 190 1,855
Cash at bank and in hand 13 - -
190 1,855 
Creditors: amounts falling due within one year 14 (4,298) (3,064)
Net current liabilities (4,108) (1,209)
Total assets less current liabilities 8,265 10,764
Creditors: amounts falling due after more than one year 15 (2,281) (2,439)
Net assets 5,984 8,325
Capital and reserves
Called up share capital 21 4,084 3,985
Share premium account 23 5,974 5,833
Shares to be issued 25 - 125
Profit and loss account 24 (4,074) (1,618)
Equity shareholders’ funds 24 5,984 8,325 
Approved by the Board of Directors on 22 July 2005
G Y ork PJ Walker
Group Chief Executive Director consolidated cash flow statement
26 Clarity Commerce Solutions plc
for the year ended 31 March 2005
The notes on pages 27 to 46 form part of these financial statements.
Notes
Year ended
31 March 2005
£’000
Year ended
31 March 2004
£’000
Net cash inflow from operating activities 28 490 2,290
Returns on investments and servicing of finance
Interest received 596 322
Interest paid (683) (396)
Interest element of hire purchase and finance leases (5) (8)
Net cash outflow from returns on investments and servicing of finance (92) (82)
Taxation - (161)
Capital expenditure and financial investment
Purchase of tangible fixed assets (105) (151)
Sale of tangible fixed assets 12 41
Net cash outflow from capital expenditure and financial investment (93) (110)
Acquisitions
Purchase of subsidiary undertakings (112) (2,989)
Cash at bank acquired with subsidiary (24) 767
Net cash outflow from acquisitions (136) (2,222)
Net cash inflow / (outflow) before management of liquid resources and
financing
169 (285)
Management of liquid resources
Movement in blocked cash collateral account 248 (118)
Financing
Issue of share capital (net of costs) - 750
New secured loan - 1,540
Repayment of loan notes (622) (110)
Capital element of finance leases (32) (32)
Bank loan repayments (303) (194)
Net cash (outflow) / inflow from financing (957) 1,954
(Decrease) / increase in cash 29 (540) 1,551 1 Accounting policies
The following accounting policies have been consistently applied in arriving at the consolidated financial information set out in
this report.
(a) Basis of accounting
The consolidated financial information has been prepared under the historical cost convention, in accordance applicable
accounting standards.
(b) Basis of consolidation
The Group financial statements consolidate the audited financial statements of the Company and all its subsidiaries made up to
31 March 2005. The acquisition method of accounting is used and the results of subsidiary undertakings are included from the
date of acquisition.
(c) Turnover and revenue recognition
Turnover, which excludes value added tax and sales between Group companies, represents amounts derived from the provision
of goods and services which fall within the Group's ordinary activities.
The Group derives its income from the following revenue streams; the sale of software licences, bespoke development projects
for clients and fees derived from support services, installation and training. Each sales stream is separately identifiable and treated
in the following manner:
Software Licences
Licence fees are recognised following delivery of software to the client.
Services
Revenue streams from installation, consultancy and training are recognised at the point at which the service or product is
delivered.
Software development
Revenue is recognised upon completion of the software project.
Maintenance income
Income is recognised evenly across the duration of the contractual period. 
(d) Tangible fixed assets and depreciation
The cost of tangible fixed assets less estimated residual value is written off using the reducing balance method at the following
annual rates:
Motor vehicles - 25% on reducing balance
Office equipment - 20 - 25% on reducing balance
Freehold property is depreciated on a straight line basis over 50 years.
notes to the financial statements
Annual Report & Financial Statements 2005 27 1 Accounting policies (continued)
(e) Software rights
Costs incurred in respect of software rights are capitalised and amortised over the estimated useful life of the software, which is
considered to be five years.
(f) Goodwill
Goodwill represents the difference between the fair value of the net assets of subsidiary undertakings at the date of acquisition
and their purchase price.
Goodwill is assumed to have an indefinite life and the financial statements therefore depart from the specific requirements of the
Companies Act 1985 schedule 4: 21 to amortise goodwill over a finite life in order to give a true and fair value. The departure is in
compliance with FRS10 - Goodwill and Intangible Assets.
In arriving at this policy the Directors consider a number of areas inclusive of the nature of the business, the durability of the
product range  and the continued expansive nature of the Group. Each acquisition is assessed with reference to the quality and
sustainability of the product range, the quality of the customer base and the potential for development and continuation of
long-term relationships and the ability to develop value for the Group across the product portfolio and network of offices.
Goodwill is subject to an annual impairment review and whenever events or changes in circumstances indicate that the carrying
value may not be recoverable an impairment charge is reflected in the profit and loss account.
Impairment of goodwill is evaluated by comparing the present value of the expected future cash flows, excluding finance and
tax (the "value in use"), to the carrying value of the underlying net assets and goodwill. If the net assets and goodwill were to
exceed the value in use, an impairment would have deemed to have occurred and the resultant write down in the goodwill
would be charged to the profit and loss account immediately.
The Directors have undertaken a detailed review of each area of the business and have as a result of this review concluded that
an impairment of goodwill has taken place. The resultant charge to the profit and loss account for the year ended 31 March 2005
is £250,000 (2004: £233,000). This relates to the goodwill arising from the acquisition of Microtrain, the training and
implementation arm of the Group, which has seen operations combined with the other service providers within the Group and
has not traded in the year.  
(g) Investments 
Investments held as fixed assets are carried at cost less any provision required for impairment.
(h) Stocks
Stocks are valued at lower of cost and net realisable value, after due allowances for obsolete and slow moving items.
(i) Deferred taxation
Full provision is made, under the liability method, to take account of timing differences between the treatment of certain items
for financial statements purposes and their treatment for tax purposes. Deferred tax assets are recognised to the extent that it is
more likely than not that they will be recovered. The deferred tax balance is not discounted.
notes to the financial statements
28 Clarity Commerce Solutions plc 1 Accounting policies (continued)
(j) Hire purchase agreements
Assets held under hire purchase agreements are capitalised and disclosed under tangible fixed assets at their fair value. The
capital element of the future payments is treated as a liability and the interest is charged to the profit and loss account in equal
proportions over the period of the lease.
(k) Finance lease agreements
Where the Group enters into a lease which entails taking substantially all the risks and rewards of ownership of an asset, the lease
is treated as a finance lease. The asset is recorded in the balance sheet as a tangible fixed asset and is depreciated in accordance
with the above depreciation policies. Future instalments under such leases, net of finance charges, are included with creditors.
Rentals payable are apportioned between the finance element, which is charged to the profit and loss account in equal
proportions over the period of the lease, and the capital element which reduces the outstanding obligation for future
instalments.
(l)    Operating lease agreements
Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are
charged against the profit and loss account as incurred.
(m) Capital instruments
Capital instruments are recorded at the fair value of the consideration received less issue costs in accordance Financial Reporting
Standard 4 - Capital Instruments. The difference between the net proceeds of the issue and the total amount of payments that
the issuer may be required to make is recorded as a finance cost of the instrument. Finance costs are written off to the profit and
loss account over the period of the relevant instrument in proportion to the remaining debt outstanding.
(n) Research and development
Research and development costs are written off as incurred.
(o) Liquid resources
Liquid resources are current asset investments held as readily disposable stores of value which are readily convertible into known
amounts of cash at or close to their carrying amounts.
(p) Foreign currencies
Assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance
sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of the
transaction. Exchange differences are taken into account in arriving at the operating profit.
For the purposes of the consolidation, assets and liabilities of overseas subsidiary undertakings are translated at exchange rates
ruling at the balance sheet date. Trading results are translated at the rates of exchange ruling at the end of each month.
Differences arising on the retranslation of opening assets are dealt with through reserves.
notes to the financial statements
Annual Report & Financial Statements 2005 29 notes to the financial statements
2 Segmental information
The turnover and profit before tax are attributable to the principal activities of the Group. £12,233,000 (2004: £10,744,000) of
turnover is attributable to customers within the UK and approximately £2,120,000 (2004: £1,717,000) is attributable to customers
in Europe, with £1,794,000 (2004: £864,000) attributable to the United States and £163,000 (2004: nil) attributable to other
countries. Turnover by destination and origin are not materially different. Profit arises in the UK of £711,000 (2004: £617,000),
Europe £559,000 (2004: £302,000) and the US loss of £757,000 (2004: £408,000). As at 31 March 2005 the net assets attributable to
the UK, Europe and US were £9,778,000 (2004: £9,196,000), £770,000 (2004: £273,000), net liabilities £1,061,000 (2004: £448,000)
respectively.
3 Operating profit
Non-audit services provided by the auditors are reviewed by the Board of Directors to ensure that the independence of the
auditors is not compromised.
Remuneration of the highest paid Director for the year ended 31 March 2005 was £206,202 (2004: £146,799). 
Research and development expenditure incurred during the year was approximately £1,600,000 (2004; £1,000,000). 
Included within the following categories are amounts relating to acquired operations:
30 Clarity Commerce Solutions plc
This is stated after charging:
Year ended
31 March 2005
£’000
Year ended
31 March 2004
£’000
Depreciation of tangible fixed assets – owned assets 130 80
Depreciation of tangible fixed assets – leased assets 14 10
Impairment of goodwill 250 233
Amortisation of software rights 57 39
Auditors’ remuneration 61 44
Auditors’ non audit remuneration 2 51
Secondary auditors’ remuneration for audit of subsidiary undertaking 45 18
Directors’ remuneration 435 348
Rentals payable under operating leases – property 159 83
Rentals payable under operating leases – other 177 241
Profit on sale of fixed assets (4) -
Year ended
31 March 2005
£’000
Cost of sales 113
Operating costs 325 4 Employment costs
Employment costs (including Executive Directors) were as follows:
Details of Directors' remuneration are given on page 18 and in note 3.
5 Interest payable and similar charges
notes to the financial statements
Annual Report & Financial Statements 2005 31
Year ended
31 March 2005
£’000
Year ended
31 March 2004
£’000
Wages and salaries 5,501 5,234
Social security costs 833 664
6,334 5,898
The average number of persons employed (including Executive Directors) was: Number Number
Production 32 29
Sales 14 11
Administration 27 28
Installation and support 118 110
191 178
Year ended
31 March 2005
£’000
Year ended
31 March 2004
£’000
Bank loans and overdrafts wholly repayable within five years 671 357
Finance leases and hire purchase interest 5 23
Loan note interest 76 24
752 404 6 Taxation on profit on ordinary activities
(a) UK Corporation tax on profit for the year
(b) Factors affecting tax charge for the year
The tax rate for the year is lower than the standard rate of corporation tax in the UK. The differences are explained below:
(c) Factors that may affect future tax charges
The Group has unused tax losses carried forward of £1,643,000 (2004: £1,025,000) available to be set off against future taxable
profits.
notes to the financial statements
32 Clarity Commerce Solutions plc
Year ended
31 March 2005
£’000
Year ended
31 March 2004
£’000
Current tax
UK corporation tax on profit in year 55 78
Overseas taxation 65 58
Adjustments in respect of previous periods - (12)
Tax on profit on ordinary activities 120 124
Deferred tax charge - 7
Total tax charge for the year 120 131
Year ended
31 March 2005
%
Year ended
31 March 2004
%
Standard rate of corporation tax in the UK 30 30
Effects of:
Difference between depreciation and capital allowances (3) (6)
Expenditure not deductible (8) 7
Short term timing differences 8 -
Reduction to small companies rate (1) (1)
Adjustments in respect of previous periods - (2)
Utilisation of losses (2) (3)
Current tax rate for the year 24 25 7 Earnings per ordinary share
Basic earnings per share for the year ended 31 March 2005 is calculated by dividing the profit for the year of £393,000
(2004: £380,000) by 15,956,500 (2004: 14,957,917) being the weighted average number of shares in issue during the year. 
The weighted average number of ordinary shares in issue have been adjusted to assume conversion of all dilutive potential
ordinary shares. Diluted earnings per share is calculated by dividing the profit for the year of £393,000 (2004: £380,000) by the
weighted diluted average number of shares being 16,666,937 (2004: 15,246,514). 
In view of the significant impact of the impairment of goodwill on earnings per share calculated in accordance with FRS14 -
Earning per Share, an adjusted earnings per share figure has been provided. 
The adjusted basic earnings per share for the year ended 31 March 2005 is calculated by dividing the profit for the year before
impairment of goodwill of £643,000 (2004: £613,000) by 15,956,500 (2004: 14,957,917) being the weighted average number of
shares in issue during the year. The profit for the year before impairment and amortisation is calculated by adding back £250,000
(2004: £233,000) to the retained profit for the year of £393,000 (2004: £380,000).
8 Intangible assets
Details of goodwill and software rights acquired during the year are given in note 31. 
Following the successful performance since acquisition of Romulus Enterprises Limited the deferred element of the
consideration paid has been revised causing an increase to goodwill of £315,000.
notes to the financial statements
Annual Report & Financial Statements 2005 33
Group
Software rights
£’000 
Goodwill
£’000 
Total
£’000 
Cost:
At 1 April 2004 328 11,200 11,528
Additions during the year (note 31) 36 1,254 1,290
At 31 March 2005 364 12,454 12,818
Amortisation:
At 1 April 2004 159 1,047 1,206
Charge for the year 57 250 307
At 31 March 2005 216 1,297 1,513
Net book value:
At 31 March 2005 148 11,157 11,305
At 31 March 2004 169 10,153 10,322 9 Tangible assets
Included within the net book value of £530,000 is £86,000 (2004: £78,000) relating to assets held under hire purchase and finance
lease agreements, relating to motor vehicles. Depreciation charged in the period in respect of these assets amounted to £14,000
(2004: £10,000).
10 Investment in subsidiary undertakings
notes to the financial statements
34 Clarity Commerce Solutions plc
Group
Freehold
property
£’000 
Leasehold
property
£’000 
Office 
equipment
£’000 
Motor
vehicles
£’000 
Total
£’000 
Cost:
At 1 April 2004 165 5 690 91 951
On acquisition of subsidiary - - 10 - 10
Additions 12 - 89 33 134
Disposals - - - (29) (29)
Exchange movement - - 23 - 23
At 31 March 2005 177 5 812 95 1,089
Depreciation:
At 1 April 2004 8 - 412 13 433
Charge for year 3 - 127 14 144
Disposals - - - (18) (18)
At 31 March 2005 11 - 539 9 559
Net book value:
At 31 March 2005 166 5 273 86 530
At 31 March 2004 157 5 278 78 518
Company
As at
31 March 2005
£’000
As at
31 March 2004
£’000
Beginning of year 11,973 9,492
Additions in the year (note 31) 1,027 3,049
Provision in the year (627) (568)
At end of year 12,373 11,973 10 Investment in subsidiary undertakings (continued)
The subsidiaries included in the consolidated financial statements for the whole year are:
Clarity Retail Systems plc
Microtrain Limited
Flex Systems Limited
Formative Systems Limited
Vision Solutions Limited
Romulus Enterprises Limited (Scotland)
Pacer Cats (UK) Limited 
Pacer Cats Inc. (US) 
CCS SARL (Pacer Cats - France) 
CCS GmbH & Co OHG (Pacer Cats - Germany) 
Cyntergy Services Limited
The additions relate to: 
Baron LRMS Limited 
All subsidiary companies are wholly owned and registered in England unless otherwise stated.
11 Stocks
12 Debtors
notes to the financial statements
Annual Report & Financial Statements 2005 35
Group Company
As at
31 March 2005
£’000
As at 
31 March 2004
£’000
As at
31 March 2005
£’000
As at
31 March 2004
£’000
Goods for resale 628 501 - -
Group Company
As at
31 March 2005
£’000
As at 
31 March 2004
£’000
As at
31 March 2005
£’000
As at
31 March 2004
£’000
Trade debtors 3,870 3,221 - -
Amounts owed by subsidiary undertakings - - 67 1,662
Other debtors 369 340 95 81
Prepayments and accrued income 528 462 28 112
4,767 4,023 190 1,855 13 Cash and Bank
14 Creditors: amounts falling due within one year
15 Creditors: amounts falling due after more than one year
notes to the financial statements
36 Clarity Commerce Solutions plc
Group Company
As at
31 March 2005
£’000
As at 
31 March 2004
£’000
As at
31 March 2005
£’000
As at
31 March 2004
£’000
Cash at bank and in hand 3,946 5,609 - -
Overdraft (3,985) (5,108) (2,367) (2,306)
Blocked cash collateral account 1,373 1,621 1,223 1,621
1,334 2,122 (1,144) (685)
Group Company
As at
31 March 2005
£’000
As at 
31 March 2004
£’000
As at
31 March 2005
£’000
As at
31 March 2004
£’000
Bank loans and overdrafts (note 16) 1,033 1,053 2,176 1,738
Loan notes (note 17) 606 538 606 538
Trade creditors 972 1,123 174 136
Amounts due to subsidiary undertakings - - 945 521
Other creditors 153 40 - -
Other taxes and social security 1,085 909 68 -
Corporation tax 249 123 - -
Obligations under finance leases and hire 
purchase contracts (note 18) 
25 25 - -
Accruals and deferred income 2,622 2,162 329 131
6,745 5,973 4,298 3,064
Group Company
As at
31 March 2005
£’000
As at 
31 March 2004
£’000
As at
31 March 2005
£’000
As at
31 March 2004
£’000
Bank loans and overdrafts (note 16) 166 434 166 434
Loan notes (note 17) 1,365 1,505 1,365 1,505
Obligations under finance leases and hire 
purchase contracts (note 18)
51 53 - -
Deferred consideration 750 500 750 500
2,332 2,492 2,281 2,439 16 Bank loans and overdrafts
Bank borrowings are secured by charges over the assets and by cross guarantees.
17 Creditors: capital instruments
Creditors include finance capital which is due for repayment as follows:
As at 31 March 2005 loan notes still to be redeemed in respect of the consideration payable to the vendors of Flex Systems
Limited amounted to £1,421,000 (2004: £2,043,000). In the year ended 31 March 2005, £622,000 of loan notes were redeemed. 
Under the terms of the Baron LRMS acquisition agreement dated 29 October 2004 loan notes were issued in the sum of £250,000
and £300,000, redeemable in full in 12 months and 18 months respectively after the date of the acquisition agreement.
The Company has adopted a prudent policy by recognising that loan notes issued could be redeemed early and have therefore
disclosed £606,000 (2004: £538,000) as due within one year and £1,365,000 (2004: £1,505,000) as being due for repayment
between one and two years.  
The loan notes in respect of the acquisition of Flex Systems Limited bear interest at base rate. The loan notes in respect of the
acquisition of Baron LRMS Limited do not bear interest.
notes to the financial statements
Annual Report & Financial Statements 2005 37
Group Company
The borrowings are repayable as follows:
As at
31 March 2005
£’000
As at 
31 March 2004
£’000
As at
31 March 2005
£’000
As at
31 March 2004
£’000
In one year or less 1,054 1,053 2,197 1,738 
Between one and two years 186 303 186 303 
Between two and five years - 187 - 187
Associated finance costs (41) (56) (41) (56)
1,199 1,487 2,342 2,172
Group Company
As at
31 March 2005
£’000
As at 
31 March 2004
£’000
As at
31 March 2005
£’000
As at
31 March 2004
£’000
In one year or less, or on demand 606 538 606 538
Between one and two years 1,365 1,505 1,365 1,505
1,971 2,043 1,971 2,043 18 Finance lease and hire purchase contracts
Future commitments under hire purchase and finance lease agreements are as follows:
The hire purchase and finance lease liabilities are secured over the assets to which they relate.
19 Commitments under operating leases
At 31 March 2005, the Group had annual commitments under non-cancellable operating leases as set out below:
notes to the financial statements
38 Clarity Commerce Solutions plc
Group Company
As at
31 March 2005
£’000
As at 
31 March 2004
£’000
As at
31 March 2005
£’000
As at
31 March 2004
£’000
Due within one year 25 25 - -
Due between one and two years 51 53 - -
76 78 - -
Group Company
As at
31 March 2005
£’000
As at 
31 March 2004
£’000
As at
31 March 2005
£’000
As at
31 March 2004
£’000
Expiring within one year: other 41 60 - -
Expiring between two and five years: other 68 109 15 15
Expiring after five years: other - - - -
Expiring within one year: land and buildings - - - -
Expiring between two and five years: land and
buildings
159 160 - - 
Expiring after five years: land and buildings - - - -
268 329 15 15 20 Deferred taxation
No provision has been made in the financial statements for a deferred tax asset and the amounts unprovided at the end of the
year are as follows:
21 Share capital
On 20 March 2005 393,443 new ordinary shares were issued for cash at 61p each in relation to deferred consideration relating to
the acquisition of Romulus Enterprises Limited.
22 Share option scheme
On 5 May 2004 an Approved EMI Share Option Scheme was established. 537,500 options were issued on 24 May 2004 to
Directors and senior managers within the Group. All option holders under the original unapproved share option scheme waived
their rights over the original options held, which were transferred into the new scheme. All the options are exercisable between
24 May 2007 and 24 May 2014 and have an exercise price of 66.5p.
notes to the financial statements
Annual Report & Financial Statements 2005 39
As at
31 March 2005
£’000
As at
31 March 2004
£’000
Authorised share capital:
20,000,000 Ordinary shares of £0.25 each 5,000 5,000
Allotted, called up and fully paid:
At beginning of year 3,985 3,481
Issue of ordinary shares 99 504
4,084 3,985
As at
31 March 2005
Unprovided
£’000
As at
31 March 2004
Unprovided
£’000
Accelerated capital allowances 8 (16)
Short term timing differences (5) -
Tax losses available (513) (307)
(510) (323) 23 Share premium account
24 Reconciliation of movements in shareholders' funds
notes to the financial statements
40 Clarity Commerce Solutions plc
As at
31 March 2005
£’000
As at
31 March 2004
£’000
At beginning of year 5,833 5,287
Premium on issue of ordinary shares 141 546
5,974 5,833
Group
Share 
capital
£’000
Share capital
to issue
£’000
Share 
premium
£’000
Profit and
loss account
£’000
2005
Total
£’000
2004
Total
£’000
Balance at 1 April 2004 3,985 125 5,833 (922) 9,021 7,749
Shares issued 99 (125) 141 - 115 1,050
Profit for the year - - - 393 393 380
Foreign exchange movement - - - (42) (42) (158)
Balance at 31 March 2005 4,084 - 5,974 (571) 9,487 9,021
Company
Share 
capital
£’000
Share capital
to issue
£’000
Share 
premium
£’000
Profit and
loss account
£’000
2005
Total
£’000
2004
Total
£’000
Balance at 1 April 2004 3,985 125 5,833 (1,618) 8,325 8,485
Shares issued 99 (125) 141 - 115 1,050
Loss for the year - - - (2,456) (2,456) (1,210)
Balance at 31 March 2005 4,084 - 5,974 (4,074) 5,984 8,325 25 Share capital to be issued
The share capital issued in the year is in respect of additional consideration payable on the acquisition of Romulus Enterprises
Limited. It was dependent on the profitability of the Company for the year ended 31 March 2004 in accordance with the Sales
and Purchase Agreement in respect of the transaction. Deferred consideration of £240,000 was satisfied by the issuing of 393,443
shares at 61p. This resulted in a £115,000 adjustment to the goodwill created upon the acquisition of Romulus.
26 Related party transactions 
During the year the Group purchased air charter services to the value of £51,000 (2004: £52,000) from Direct Air Limited, a
company of which G York is a Director and principal shareholder. 
These items have been charged to the profit and loss account. In addition an amount of £11,000 has been included as part of
the cost of acquisition of the equity interests in Baron LRMS Limited in relation to air charter services provided (2004: £32,000 in
respect of the acquisition of Pacer/Cats/CCS). 
At 31 March 2005 no balances were due to the Company (2004: £nil).
27 Profit of parent company
As permitted by Section 230 of the Companies Act 1985, the profit and loss account of the parent company is not presented as
part of these financial statements. The parent company's retained loss for the year amounted to £2,456,000 (2004: £1,210,000).
notes to the financial statements
Annual Report & Financial Statements 2005 41
As at
31 March 2005
£’000
As at
31 March 2004
£’000
At the beginning of year 125 125 
Issued in year (125) -
At end of year - 125 28 Reconciliation of operating profit to net cash inflow from operating activities
29 Reconciliation of net cash flow to movement in debt
The cash flow movements of the acquired subsidiaries are as follows:
notes to the financial statements
42 Clarity Commerce Solutions plc
Year ended
31 March 2005
£’000
Year ended
31 March 2004
£’000
Operating profit 669 593
Depreciation of fixed assets 144 90
Impairment of goodwill 250 233
Amortisation of intangible fixed assets 57 39
Profit on sale of fixed assets 4 -
(Increase) / decrease in stocks (90) 79
(Increase) / decrease in debtors (543) 370
(Decrease) / increase in creditors (43) 844
Loss on exchange in respect of overseas subsidiaries 42 42
Net cash inflow from operating activities 490 2,290
Year ended
31 March 2005
£’000
Year ended
31 March 2004
£’000
(Decrease) / increase in cash in the year (540) 1,551
Cash outflow / (inflow) from debt and lease financing 957 (1,204)
Cash (inflow) / outflow from increase in liquid resources (248) 118
Changes in net funds resulting from cash flows 169 465
Hire purchase agreements acquired with subsidiaries (30) (57)
Non cash movements (565) 296
Movement in net debt in the year (426) 704
Net debt at 1 April 2004 (1,486) (2,190)
Net debt at 31 March 2005 (1,912) (1,486) 
2005
£’000
2004
£’000
Net cash outflow from operating activities 105 1,212
Increase in cash in period 105 1,181 30 Analysis of net debt
Non cash movements
During the year £550,000 of loan notes relating to the acquisition of Baron LRMS Limited were issued in connection with the
deferred consideration in accordance with the acquisition agreement.
As detailed in notes 8 and 25 additional shares and deferred consideration were issued in the year relating to the acquisition of
Romulus.
notes to the financial statements
Annual Report & Financial Statements 2005 43
As at
1 April 2004
£’000
Cash 
flows
£’000
Acquisition
£’000
Non-cash
movements
£’000
As at 31
March 2005
£’000
Net cash:
Cash at bank and in hand 5,609 (1,663) - - 3,946
Overdraft (5,108) 1,123 - - (3,985)
501 (540) - - (39)
Liquid resources:
Blocked cash collateral account 1,621 (248) - - 1,373
2,122 (788) - - 1,334
Debt due within one year:
Loan notes (538) 538 - (606) (606)
Bank loans (1,053) 303 - (283) (1,033)
Hire purchase (25) 18 (18) - (25)
(1,616) 859 (18) (889) (1,664)
Debt due after one year:
Loan notes (1,505) 84 - 56 (1,365)
Bank loans (434) - - 268 (166)
Hire purchase (53) 14 (12) - (51)
(1,992) 98 (12) 324 (1,582)
Balance at 31 March 2005 (1,486) 169 (30) (565) (1,912) 31 Acquisitions
On 29 October 2004 the Group completed the acquisition of the entire share capital of Baron LRMS Limited.
Details are as follows:
The fair value adjustment arises from the alignment of the Company’s accounting policy for the amortisation of software rights
with the Group’s accounting policy.
These adjustments are provisional and under FRS7 - Fair Values and Acquisition Accounting, they will be finally determined by
the date the financial statements for the year ending 31 March 2006 are approved. Any such adjustments to the fair values in this
period will result in a corresponding adjustment to goodwill.
The turnover and operating loss for Baron LRMS for the year ended 31 August 2004 were £893,000 and £159,000 respectively. The
turnover and operating loss for Baron LRMS for September 2004 and October 2004, representing the pre-acquisition period, were
£206,000 and £73,000 respectively.
In addition to the table above there were further adjustments in the year relating to deferred elements of the consideration
payable in respect of the Romulus acquisition representing revisions to both the deferred earnout and shares issued in respect of
the satisfaction of deferred consideration. Goodwill has increased by £315,000.
Final adjustments were made to these figures after the release of the preliminary announcement.
notes to the financial statements
44 Clarity Commerce Solutions plc
Book
value
£’000 
Fair value
adjustment
£’000 
Fair
value
£’000 
Assets acquired:
Fixed assets 9 - 9
Software rights 84 (48) 36
Stock 37 - 37
Debtors 201 - 201
Cash at bank (24) - (24)
Creditors due in less than one year (486) - (486)
Net assets acquired (179) (48) (227)
Consideration:
Loan notes 550
Deferred consideration 50
Capitalised costs associated with acquisition 112
Fair value of consideration paid 712
Goodwill 939 32 Derivatives and other financial instruments
The Group's financial instruments comprise investments, cash at bank, borrowings, and various items, such as trade debtors,
trade creditors etc that arise directly from its operations. The main purpose of these financial instruments is to raise finance for
the Group's operations.
The main risks arising from the Group's financial instruments are interest rate fluctuations and liquidity risk. It is the Group's policy
to finance its operations through a mixture of cash, bank overdraft and loans and to periodically review the mix of these
instruments with regard to the projected cash flow requirements of the Group and an acceptable level of risk exposure.
There is no material difference between the book value and the fair value of the Group's financial instruments.
The Group does not currently have any hedge contracts or deal in financial instruments.
Short term debtors and creditors have been excluded from all of the following disclosures.
The Group has overseas subsidiaries where transactions, assets and liabilities are denominated in foreign currencies. At present
the Group is exposed to currency fluctuations arising from these sources.
Interest rate risk of financial assets and liabilities
Floating rate borrowings consist of bank overdrafts bearing interest at 2% above bank base rate. 
£1,421,000 of loan notes as detailed in note 17 bear interest at base rate and are not included in the above table.
£550,000 of loan notes as detailed in note 17 do not bear interest and are not included in the above table.
Fixed rate financial instruments comprise finance leases with interest rates ranging from 5% to 8%.
The Group's financial assets at 31 March 2005 comprise a blocked account and net current bank account balances (2004: blocked
account and net current bank account balances). The Group has a right of set off in respect of cash and overdrawn balances.
notes to the financial statements
Annual Report & Financial Statements 2005 45
As at
31 March 2005
£’000
As at
31 March 2004
£’000
Assets:
Floating rate 1,334 2,122
Liabilities:
Floating rate 1,199 1,487
Fixed rate 76 78
1,275 1,565 32 Derivatives and other financial instruments (continued)
Foreign currency risk
Foreign currency exposure arise on both trading balances and periodic net assets valuations.
Borrowing facilities
The Group has an undrawn committed borrowing facility available at 31 March 2005 as follows:
notes to the financial statements
46 Clarity Commerce Solutions plc
As at
31 March 2005
£’000
As at
31 March 2004
£’000
Expiring in one year or less 356 713 Notice is hereby given that the FIFTH ANNUAL GENERAL MEETING of the Company will be held at 33 Hanworth Road, Sunbury on Thames,
Middlesex TW16 5DA on 25 August 2005 at 11:00am for the following purposes:
ORDINARY BUSINESS
1. To receive and consider the Financial Statements for the year ended 31 March 2005 with the reports of the Directors and
Auditors thereon.
2. To re-appoint Solomon Hare Audit LLP as auditors to hold office from the conclusion of the meeting to the conclusion of the
next meeting at which financial statements are laid before the Company at a remuneration to be determined by the Directors.
3. To elect as a Director, JA O’Connell who has been in office as Non-Executive Chairman of the Company since his appointment by
the Board on 7 April 2005.
SPECIAL BUSINESS
To consider and if thought fit, adopt the following resolution as an ordinary resolution:
4 In substitution for all existing authorities, to the extent unused, the Directors shall have general and unconditional authority for
the purposes of Section 80 of the Companies Act 1985 (the "Act") to exercise all the powers of the Company to allot, grant
options over, offer or otherwise deal with or dispose of any relevant securities (as defined in section 80(2) of the Act) of the
Company to such persons at such times and generally on such terms and conditions as the Directors may determine up to an
aggregate nominal amount of £916,000 provided the authority hereby conferred shall be for a period expiring five years from the
date hereof unless previously renewed, varied or revoked by the Company in General Meeting and the Directors shall be entitled
under the authority hereby conferred or under any renewal thereof to make at any time prior to the expiry of such authority any
offer or agreement, which would or might require relevant securities as aforesaid to be allotted after the expiry of such authority.
To consider and if thought fit, adopt the following resolutions as special resolutions:
5 THAT subject to the passing of the previous resolution the Directors shall be and are hereby empowered pursuant to section 95
of the Act for a period expiring on the earlier of the conclusion of the Company's annual general meeting in 2006 and the date
being fifteen months from the date hereof to allot any equity securities (as defined in section 94(2) of the Act) of the Company
pursuant to the authority conferred by the previous resolution as if section 89(1)of the Act did not apply to such allotment
provided that this power shall be limited to the allotment of equity securities:
(a) in connection with an offer of such securities by way of rights to holders of ordinary shares and holders of any other
shares or securities of the Company that by their terms are entitled to participate in such offer by way of rights where the
equity securities respectively attributable to the interests of all holders of ordinary shares and holders of such other
shares or securities are proportionate (as nearly as may be practicable) to the respective numbers of ordinary shares held
by them or in to which their shares or securities are to be deemed converted in calculating the extent of their
participation but subject to such exclusions or other arrangements as the Directors may deem necessary or expedient in
relation to fractional entitlements or any legal or practical problems under the laws of any territory or the requirements of
any regulatory body or stock exchange; and
(b) otherwise than pursuant to sub paragraph (a) above up to an aggregate nominal amount of £204,200;
and the power hereby conferred shall enable the Company to make any offer or agreement before the expiry of such power that
would or might require equity securities to be allotted after such power expires and the Directors may allot equity securities in
pursuance of any such offer or agreement up to the maximum amount permitted by paragraph 4 of this resolution as if the
power hereby conferred had not expired and in this resolution the expression "equity securities "and references to the allotment
of equity securities shall bear the same respective meanings as in section 94 of the Act.
notice of annual general meeting
Annual Report & Financial Statements 2005 47 6 That the Company be generally and unconditionally authorised to make market purchases (within the meaning of Section 163(3)
of the Companies Act 1985) of ordinary shares of 25p each in the capital of the Company subject to the following conditions:
(a) the maximum number of shares which may be purchased is 1,634,000;
(b) the minimum price which may be paid for each ordinary share is 25p;
(c) the maximum price which may be paid for each ordinary share is an amount equal to 105 per cent of the average of the
middle market quotations of a share as derived from the London Stock Exchange Daily Official List for the five business
days immediately preceding the day on which the ordinary share is contracted to be purchased; and
(d) this authority shall expire at the close of the next Annual General Meeting of the Company or, if earlier, 1 March 2007
(except in relation to the purchase of ordinary shares, the contract for which was concluded before the expiry of this
authority and which might be executed wholly or partly after such expiry).
By Order of the Board
RS Arnold
Secretary
Dated: 22 July 2005
Notes:
1. A member of the Company entitled to attend and vote at the above meeting may appoint a proxy to attend and (on a poll) vote
instead of him. A proxy need not be a member of the Company.
2. Completion and return of a form of proxy does not preclude a member from attending and voting at the meeting in person
should he so wish.
3. A form of proxy is enclosed and to be valid must be completed and returned so as to reach the Company's registrars, Capita IRG
Plc, Proxy Department, Bourne House, 34 Beckenham Road, Beckenham, Kent BR3 4TU (together with a letter or power of
attorney or other written authority, if any, under which it is signed or a notarially certified or office copy of such power or written
authority) not later than 48 hours before the time fixed for holding the meeting or any adjournment thereof.
4. The register of interests of the Directors and their families in the share capital of the Company kept by the Company under
Section 325 of the Companies Act 1985 will be produced at the start of the AGM until the conclusion of the AGM.
5. Pursuant to Regulation 34 of The Uncertified Securities Regulations 1995, only those members registered in the Register of
Members of the Company as at close of business on 23 August 2005 being not more than 48 hours before the time fixed for the
meeting, are entitled to attend or vote at this meeting in respect of the number of shares registered in their name at close of
business on 23 August 2005. Changes to entries in the Register after close of business on 23 August 2005 shall be disregarded in
determining the right to attend or vote at the meeting.
notice of annual general meeting
48 Clarity Commerce Solutions plc
Registered Office:
1 Netherhampton Business Centre
Netherhampton
Salisbury
Wiltshire
SP2 8PU
Registered Number: 3914814 www.claritycommerce.com