Annual Report  
2010
Clarity Commerce Solutions plc
  Clarity - 
  a growing  
   experience Contents
Performance Highlights 6 
Chairman’s Statement 8
Chief Executive’s Review 10
Financial Review 14
Corporate Governance Report 15
Officers and Advisors 16
Directors’ Report 17
Statement of Directors’ Responsibilities 20
Independent Auditor’s Report 21
Consolidated Income Statement 22
Consolidated Statement of  
Comprehensive Income                    22
Consolidated Statement of  
Financial Position                     23
Consolidated Statement of Cash Flows 24
Consolidated Statement of Changes  
in Equity                      25
Notes to the Consolidated Financial  
Statements       26
Parent Company Balance Sheet 48
Notes to the Parent Company Accounts 49
We deliver leading edge transaction  
processing solutions. Our approach and  
our ability to combine knowledge from our  
core divisional expertise of retail, hospitality,  
leisure and entertainment encourages our  
clients’ customers to do more, buy more  
and stay loyal. About Clarity  
Experience is at the heart of our business. 
It is what we have and what we create. The 
Clarity brand begins with our people – whose 
knowledge and expertise gives us unique cross-
sector insight. Such intimate understanding of 
our clients’ business combined with a passion 
for enhancing the interaction between clients 
and their customers, means we can offer 
a unique and rewarding service. 
This is experience.  
And to our business, it is everything.
Clarity Annual Report       1 
About Clarity “We ran a thorough review and selection 
process of the retailing requirements to 
serve over 38 million guests worldwide. 
Following this we asked Clarity to provide 
us with our point of sale and inventory 
management systems across the Merlin 
Entertainments Group globally. We based 
this decision on their knowledge of retail 
trading in the unique environment of  
the visitor attractions market, their  
understanding of the need to work in  
partnership with our teams and their  
ability to support us with flexible, reliable 
and robust system solutions” 
Andy Davies
Commercial Services Director, Merlin Entertainments
“One of our main reasons for choosing 
ClarityLive to replace our point of sale 
software was the high degree of customer 
focus from all the people at Clarity that  
we engaged with. They were very  
responsive to our needs and understood 
the importance we place on our  
customers’ experience. We have already 
been able to measure improvements in  
the speed of transactions, which in turn 
means that we can serve more customers, 
more efficiently”
Simon Kerry
Head of IT, Pret A Manger
“We have always liked the collaborative 
way that Clarity operates, and their ability 
to use proven technology from other  
sectors to perfectly match our needs, 
marks them out as great partners for us” 
Svend Envoldsen 
IT Director, Co-op Denmark “We have always liked the collaborative 
way that Clarity operates, and their ability 
to use proven technology from other  
sectors to perfectly match our needs, 
marks them out as great partners for us” 
Svend Envoldsen 
IT Director, Co-op Denmark
Clarity’s Growing  
Experience
2009/10 has proven to be another year of 
great progress for Clarity. We have grown 
our business in each of our core vertical 
markets across our target geographies. 
A single company structure & strategy 
has been established that increases our 
weight in the marketplace, and we have 
consolidated our products into a single 
family which provides greater reach into  
new cross-sector opportunities.  
This strengthening has put Clarity in a 
position for more aggressive growth in  
the future.
Our refreshed brand identity, launched last 
year, articulated our principles of providing 
clients with solutions that allowed their 
customers to ‘do more, buy more and 
stay loyal’. To this we added a new way 
of presenting our services via ClarityLive, 
which showcases Clarity’s ability to exploit 
our cross-sector experience and  
class-leading technology. This has been a 
great success, extending our relationship 
deeper with existing clients and helping us 
to win new business throughout the year.
 Entertainment
Merlin Entertainments
Merlin Entertainments, one of the world’s 
most exciting leisure companies, chose 
ClarityLive solutions to provide a common 
approach to visitor attractions.  
The ClarityLive solution was selected 
as it has an unrivalled depth of practical 
knowledge embedded into the products 
and services, which ultimately improves 
both the management of the business 
and the consumer experience. Additional 
value comes from having a single product 
operating in their retail outlets as well  
as their food & beverage operations,  
providing a global view of the company’s 
stock and sales.
 Hospitality 
Pret A Manger
Clarity’s ‘best of breed’ technology also 
appealed to the UK’s leading premium 
sandwich retailer. With over 225 outlets  
and growth plans for the UK and the USA,  
Pret A Manger identified Clarity’s  
technology as a way of improving efficiency.  
With the pilot now delivered and the rollout 
scheduled, future challenges include 
proposing ways of extending customer 
ordering channel options. 
 Retail
Co-op Denmark
Our existing clients also found ways that 
Clarity technology can breathe new life 
into their operations. Co-op Denmark, 
a major European grocery retailer with 
over 1,000 stores, asked us to replace 
their old customer promotions systems 
with ClarityLive’s innovative new loyalty 
programmes and dynamic promotions 
capability. The new solutions fit with 
their existing POS and provides a single, 
consistent offer with a lower cost  
of ownership.
Clarity Annual Report       3 
Clarity’s Growing Experience ClarityLive
ClarityLive delivers ‘joined-up thinking’  
for the best experiences.
Live 
for Leisure
Leisure Centres
Health & Fitness Clubs
Golf and Spa
Resorts
Travel
Live 
for Entertainment
Cinemas
Attractions
Amusement Parks
Music Venues
Theatres
Stadia
Sporting Venues
Live 
for Hospitality
Restaurants
Bars/Pubs
Contract Catering
Cafés
Quick Service Restaurants
Conference Centres
Live 
for Retail
Grocery
Fashion
DIY
Department Stores
Pharmacy
Speciality
Sell more effectively to loyal customers through the specific channels. 
Engage better with customers to enhance services and proposition. 
Optimise resources more effectively ensuring high demand, usage  
and availability. 
 
Inform business and customers at the right time, in the right place,  
and in the way they need.
Clarity Annual Report     4
Chief Executive’s Review  
ClarityLive
The ClarityLive product suite  
enables today’s on-demand  
customer experience, while  
ensuring traditional reliability  
and service.
A selection of our clients who benefit  
from ClarityLive. Performance  
Highlights
•
  Results ahead of market expectations with strong  
 performance across Group
•
  67% increase in profit before tax and amortisation  
 to £1.9m (2009: £1.1m). Amortisation of £0.4m  
 (2009: £0.6m)
•
  8% increase in revenues to £19.1m (2009: £17.7m)  
 - of which 30% is recurring
•
  Strong net cash position of £1.3m (2009: £0.5m),  
 being cash and cash equivalents less bank loans
•
  Significant multi-million pound contract wins secured 
 during the period including Merlin Entertainments  
 Group and Pret A Manger
•
  Experienced new Board appointments including   
 a new CFO, provide additional skills to drive growth
•
  Earnings Per Share from continuing operations  
 increased to 5.68p (2009: 1.47p)
•
  Earnings Per Share from continuing operations  
 (excluding deferred tax credit of £0.7m) 3.63p
•
  Post year end acquisition of support operation   
 strengthens international capabilities & supports 
 growing client base
•
 Board confident of continuing progress Performance  
Highlights
Year ended 2008 Year ended 2009 Year ended 2010
Revenue from Continuing Operations 15,364 17,683 19,081
Profit before tax and amortisation from  
Continuing Operations
(252) 1,111 1,855
£'000
Year End
20,000
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
(2,000)
Revenue from Continuing Operations
Profit before tax and amortisation from  
Continuing Operations
Clarity Annual Report       7 
Performance Highlights
2008 2009 2010 Chairman’s Statement
Several key orders were won 
during the year in each of our 
target markets, and these  
confirm the Group’s growing 
reputation for leading edge  
software solutions which  
can enhance our customers’  
revenues and improve their 
business efficiency.
Sir Colin Chandler, Group Chairman  It is with pleasure that I offer my first 
Annual Report Statement as Chairman of 
Clarity Commerce Solutions plc ("Clarity", 
the "Company", or the "Group"). 
Against a background of challenging market 
conditions, the year to 31 March 2010 has 
again been positive for the Group, with a 
sound financial performance, coupled with 
significant customer wins and technology 
developments.
Under the leadership of Chief Executive, 
Ken Smith, Clarity’s revenue increased 
with that much sought after combination 
of contributions from both existing and, 
importantly, new customers. This, coupled 
with a strong focus on cost containment, 
resulted in an increase of 67% to £1.9m 
in profit before tax and amortisation. It 
is pleasing that Clarity has again kept its 
promises to shareholders.
Several key orders were won during the  
year in each of our target markets, and  
these confirm the Group’s growing reputation 
for leading edge software solutions which 
can enhance our customers’ revenues and 
improve their business efficiency.
These results build on the work of John 
O’Hara whom I succeeded as Chairman 
in August 2009. John, who is based in 
New Zealand, became Chairman in 2007, 
when the Group was underachieving and 
shareholders had little confidence in the  
then management team. Despite the 
difficulties associated with communication 
and travel, John retained his commitment 
to the Group until it was clear it had been 
restored to good health.
On the basis of this strong performance for 
the year ended 31 March 2010, our attention 
has now turned to future growth and how we 
can deliver it to enhance shareholder value. 
As part of this process, the Board has been 
strengthened by appointments which give  
us a mix of skills and experience well-suited 
to a growth business.
In order to provide that important 
combination of challenge to and support 
for the management team, our two new 
Non-executive Directors, David Bennett and 
Colin Wells, come with backgrounds different 
to each other, but both share considerable 
experience of achievements in customer 
facing businesses. David’s career and 
expertise in banking and finance enhances 
our corporate governance and business 
analysis needs whilst Colin’s career in senior 
sales and marketing roles in our sector,  
is already giving us improved capability  
in the capturing of prospects and in revenue 
enhancement. In a short time, both have 
made their presence felt to very positive 
effect.
I take this opportunity to express my thanks 
and appreciation to Steve Bellamy who, 
for two years until March 2010, provided 
valuable service during Clarity’s turnaround 
phase.
The Board has also been strengthened 
by the arrival of Steve Sadler, ACA, who 
became our CFO in April 2010. He has a 
wealth of experience in senior finance roles, 
mainly in IT businesses and since replacing 
Chris Ford, who resigned in January 2010, 
Steve has already proved to be an excellent 
member of our team. I believe that the 
composition of Clarity’s Board now is exactly 
what we need for directing the delivery 
of our growth strategy, while maintaining 
prudent fiscal management.  In the early 
part of the financial year, we undertook an 
internal capital restructuring. This project was 
designed to achieve operational efficiencies, 
whereby all UK trading was conducted via 
one entity, achieving simplified accounting 
and management. A further benefit of 
this reorganisation was the creation of 
distributable profits in our holding company, 
thereby establishing a platform for future 
dividends when sustained profitability and 
cash flow have been achieved.
In October 2009 the Company raised 
£2.6m net of expenses through the issue of 
6,812,500 new Ordinary Shares at 40p per 
share. The proceeds of the placing were 
applied to reduce the balance owing to the 
vendors of MATRA Systems (Holdings) Ltd, 
and to strengthen the balance sheet by 
eliminating net debt. The MATRA acquisition 
provides a key element of Clarity’s business 
going forward, and its former owners, who 
sold the company to Clarity in 2006, were 
owed £3.1m in remaining consideration at 
the time of the placing. Approximately £1.5m 
of the net placing proceeds were applied 
to reducing this debt, with the remaining 
balance being settled by monthly cash 
payments covered by trading receipts.
In addition to the financial benefits mentioned 
above, the placing brought a number of 
new, prestigious shareholders onto our 
register which now boasts some very strong 
names, and members of the Clarity Board 
again demonstrated their confidence in the 
Company by investing £100,000 as part of 
the placing.
On 28th May, after the end of our financial 
year, Clarity announced the acquisition of the 
business and assets of Cyntergy Services 
Ltd for a maximum cash consideration of 
£150,000. Cyntergy, which was previously 
owned by the Group until 2008 when it was 
sold for £500,000, provides IT service desk 
and training services to the retail, hospitality 
and leisure markets, principally in the UK, but 
also internationally. Its service desk is a 24/7 
multi-lingual operation based in Sunbury on 
Thames.
The re-acquisition of this business was driven 
by a combination of need and opportunity. 
Earlier this year Clarity announced two 
multi-million pound contract wins with Merlin 
Entertainments Group Ltd and Pret A Manger. 
Since then further key contracts have 
been won, and these and other contracts 
increasingly require comprehensive support 
and services expertise. Continuing to support 
existing customers is a vital part of Clarity’s 
business and the inclusion of Cyntergy not 
only enhances our capability considerably 
but also gives us a competitive advantage.
Clarity is a people business and it is they 
who, with their commitment to our products 
and customers, make the difference in our 
continuing pursuit of growth. I offer them, 
on behalf of the Board, our considerable 
gratitude for their achievements. Our 
shareholders have continued to provide us 
with support and loyalty and they deserve our 
thanks too. More importantly they expect to 
see their investments rewarded and I believe 
that they will not be disappointed.
Sir Colin Chandler Group Chairman 
28 June 2010
Chairman’s Statement
Clarity Annual Report       9 
Chairman’s Statement
Sir Colin Chandler
Group Chairman Overview
The Clarity Group has enjoyed another 
year of strong performance and, despite 
a challenging trading environment, again 
exceeded market expectations.  Although 
key orders took longer to conclude than 
had been anticipated, the long-awaited 
major wins started to flow towards the 
end of the financial year, amongst which 
Merlin Entertainments Group Ltd and Pret 
A Manger have been key.  In addition, the 
pipeline has continued to build, both in 
terms of quality of opportunity and value.  
With its products and brand now well-
established, and a much improved, scalable 
organisation, the Group is well-positioned in 
several important markets. 
Financial Highlights
Revenues increased to £19.1m, up from 
£17.7m in 2009, representing growth of 8%, 
whilst gross margin was maintained at 82%.  
Tight control of overheads, which rose only 
3%, and a decline in net finance costs from 
£187,000 to £54,000 meant that profit before 
tax and amortisation increased by 67%  
to £1.9m. 
Amortisation on intangible assets was £0.4m 
(2009: £0.6m) and taxation on profits was a 
net credit of £0.6m (2009: £0.0m), resulting in 
retained earnings of £2.0m (2009: £0.5m).
The Group’s cash position remained healthy, 
and was further improved by the receipt of 
£2.6m, net of expenses, from our placing in 
October 2009. 
As described in the Chairman’s Statement 
healthy profits, and an internal capital 
reorganisation carried out during the year, 
have resulted in Clarity’s parent company 
being placed in a position where it can pay 
dividends once sustained profitability and 
cash flow render it prudent so to do.  For 
the immediate future however, it remains the 
policy of the Board to invest for the growth 
that, when achieved, would bring both capital 
enhancement and dividend returns  
to shareholders. 
Contract wins and prospects
Individual key contract wins have been 
discussed elsewhere, and it should be 
stressed that, in addition to the major 
successes announced during the year, a 
great number of smaller orders were taken 
from existing and new customers, many of 
which prefer not to be named for commercial 
reasons.  Suffice to say that, despite the 
economic environment, the Group achieved 
its financial targets and added some very 
important new clients to its already extensive 
list. 
With a challenging trading environment, deals 
have been harder to close as our customers 
and prospects have naturally been cautious 
about their own expenditure.  However, the 
Clarity proposition has some very strong 
features which dovetail well with customer 
budgets under pressure.    
Key amongst these are:
our strong focus on the consumer •	
experience.  Our customers target their 
own share of their customers’ retained 
income and strive to increase customer 
spend.  Hence technology which 
improves customer retention and spend 
is one of the last budget elements to be 
cut, if at all; and
our ability to protect and enhance •	
legacy investments dramatically 
reduces costs in a “mend and make 
do” environment.  This is particularly 
pertinent in our retail business, 
where our strength in extending and 
migrating customers from the ageing 
IBM 4690 system lends itself to strong 
opportunities with major retailers, 
especially in North America.
Hence, despite economic pressures and 
concerns, our pipeline remains strong at 
a time when some of our competitors are 
finding the environment very difficult.
Divisional Performance
Each of the Group’s divisions made good 
progress during the year.  In particular:  
Retail
The Retail business enjoyed strong revenue 
growth especially in our US operations in 
Atlanta, Georgia and Raleigh, North Carolina.  
Although orders were biased towards the 
latter part of the year, key orders were 
secured for a variety of well-known retailers.  
Our operation in Raleigh continues to 
thrive, supporting existing IBM 4690 users, 
and offering new solutions, both from our 
own stable and from other retail software 
providers. Our strategy of using our IBM 
4690 migration capability to increase our 
penetration on the US retail point of sale 
("POS") market is gathering pace with several 
important bids under way.
In Europe, revenues were slightly ahead 
of 2009, with improved margin, with key 
deliveries to Co-op Denmark, Schuitema 
(now C1000), Flytoget, Amsterdam Harbour 
and Focus DIY , where our point of sale 
solution has now been rolled out to over half 
the estate.  Recent orders include Bakker 
Bart, a Dutch bakery chain, and a major UK 
retailer that will utilise ClarityLive to greatly 
enhance their personal shopping experience.
Chief Executive’s 
Review
Year ended
31/03/10  
£’000
Year ended
31/03/09  
£’000
 
Continuing operations:
Revenue 19,081 17,683
Operating profit/(loss) before amortisation 1,909 1,298
Net finance cost (54) (187)
Profit before tax and amortisation 1,855 1,111
Clarity Annual Report     10 
Chief Executive’s Review
Ken Smith BA CA
Chief Executive Officer Chief Executive’s 
Review
Former company and product 
names have been replaced by 
the refreshed Clarity brand,  
and this has had the benefit  
of cohesion in our sales and  
operational efforts.  Steadily the 
Clarity name and its associated 
quality are gaining impact. 
Ken Smith, Chief Executive Officer  Chief Executive’s 
Review cont
Leisure
Clarity’s Leisure business, which has spent 
the past few years developing its new 
product set, saw several key orders towards 
the end of the year, resulting in revenues 
increased by 20%.  These orders, and 
the activity level post year end, are most 
encouraging.
Our strategy of offering our new ClarityLive 
for Leisure product via a simple migration 
process for existing customers has paid 
off and we are seeing strong interest and 
enthusiasm from our customer base.  At 
the same time our new solution has very 
successfully competed head on against 
the other major players in the market.  
Feedback in other competitive bids is 
equally encouraging and we anticipate a 
strengthening of our position in the market.
Hospitality
Hospitality, which includes our Hotels and 
Resorts business, enjoyed a good year.  In 
2009, we sold off our low-margin legacy pub 
solutions business to a reseller, which had 
the effect of reducing revenue, albeit with 
minimal profit impact.  Off-setting this was a 
key win with Pret A Manger, which operates 
well over 200 premium sandwich restaurants 
in the UK, Hong Kong and the US.  Roll 
out has commenced with vigour and has 
been praised by the customer.  Finally, as 
icing on the cake, our solution was selected 
by Weston super Mare Pier for an exciting 
rebuild project designed to rejuvenate the old 
pier site which was severely damaged by fire 
in 2008. 
At the same time our relationship with YO! 
Sushi and Sodexo continued to strengthen 
with opportunities to deliver more of the 
ClarityLive suite to each, to augment their 
continued expansion programmes.
Our Hotels and Resorts unit also saw good 
progress, increasing revenues and margins 
despite a slow market.  The Oxford Hotels 
and Inns roll out, comprising some 43 sites, 
was achieved in the early part of the year, 
and our solution was well-received with the 
customer.  Elsewhere, as our brand and 
reputation grows, relationships are emerging 
in several hotel chains, and Clarity is now 
preferred supplier in an increasing number of 
groups.  Good wins were recorded against 
fierce competition with Bespoke Hotels, 
The Legacy Group, Classic British Hotels, 
De Vere Venues and Bannatynes.  Although 
unsurprisingly, the market is a little slow, 
current bid activity remains strong.   
Entertainment 
Entertainment had a solid year and the 
conclusion of a major order from Merlin 
Entertainments Group, although having 
limited effect on our financial results for 
2010, should contribute significantly to the 
coming years.  Hot on the heels of our Merlin 
success, we received an order from Efteling, 
a major amusement park operator in Holland; 
this contract is in its early stages.
In the UK, cinema business was slow, 
with few new site openings, although in 
France business was brisk, especially in 
the first half of the year.  Sales of ATMs in 
France, together with additional ClarityLive 
components into existing customers, ensured 
that overall cinema performance was ahead 
of the previous year.
Our investment in the new ClarityLive for 
cinema product has been significant and this 
will be unveiled at the major cinema events 
this year.  The timing of this product release 
has been good with a number of customers 
considering system upgrades.  We have 
several proposals under way and expect our 
new product to be well-received.
Clarity re-brand
Last summer we embarked upon a 
rebranding project which involved a 
completely new look and feel to the business, 
coupled with a restructured management 
approach.  The effect of these changes 
was to bring together all companies, 
people and products within a single Clarity 
message.  Nearly one year later, although 
some elements remain to be completed, the 
rebrand has been a major success. Former 
company and product names have been 
replaced by the refreshed Clarity brand, and 
this has had the benefit of cohesion in our 
sales and operational efforts.  Steadily the 
Clarity name and its associated quality are 
gaining impact. In our marketing efforts the 
new brand is working well.  An upgraded 
website, stationery and collateral are 
universal, and our people have a greater 
feeling of being part of a single worldwide 
team.  Operationally, during the year, the roll 
out of 43 Oxford Hotels and Inns sites and 
around half of the Focus DIY retail estate 
was challenging, yet successful.  Currently, 
our solutions delivery teams are working 
extremely hard with simultaneous rollouts 
under way in several geographies.  These 
activities underpin the rationale for our recent 
acquisition of Cyntergy and its specialist 
skills will assist us in similar future projects.
Management and staff
Clarity is positioned in a fast-moving 
environment where change is constant.  
Accordingly, there is a need regularly to 
refresh and enhance our management and 
structure, and to ensure that procedures 
and controls are relevant and effective.  This 
process will continue and accelerate as we 
grow further.
In the UK, our sales team has been 
strengthened with key appointments, and our 
solutions delivery team has been extended in 
order to keep abreast of customer demand. 
Further appointments are planned as we 
address existing and new markets.
In Holland, where we have seen strong 
business growth in the past year, our team 
has been enhanced to include local skills and 
knowledge in the areas of sales, support, 
project management and business analysis.  
With several recent contract wins, this 
process is dynamic and stretching, but our 
team is responding well.
Our US business has grown strongly over 
the past year, and such growth has brought 
many successes and challenges.  We are 
well-positioned in this market with exciting 
technology and opportunities, and our goal is 
to continue and indeed accelerate our recent 
growth whilst augmenting our management 
and operational structures to cope with 
this demand. Again, we have added to our 
sales and operational resources in each of 
our US sites, and further appointments are 
pending.  Our projections show an enormous 
potential for our products and services in this 
territory and, following a recent management 
reorganisation, North America is a key area 
of focus. 
Our highly successful business in France 
has continued to deliver on various fronts.  
New product development places us in 
good shape with our key customers, and 
prospects for new business are encouraging. 
We suffered a setback in April 2010 with the 
untimely death of Dr Wolfgang Buscher, our 
much respected CEO in Paris.  Nevertheless, 
Wolfgang would have been proud of the 
manner in which his team rallied around 
and communicated internally and externally, 
continued his strategy and ensured continuity 
of the business he nurtured so well.  With his 
successor now in place, he would be pleased 
that our French operation is in very good 
hands.
Product strategy and solutions delivery
With our rebrand over the past year, our 
product strategy has centred on the creation 
of ClarityLive, a set of products and services 
focused on enhancing our customers’ ability 
to engage with their customers.  ClarityLive 
comprises an extensive set of software, 
designed to operate together to provide the 
customer with the best possible experience 
when purchasing products and services, 
via whichever medium he or she chooses.  
Today’s consumer demands choices and 
information, together with outstanding 
customer service.  If the vendor fails to offer 
this level of service, the consumer simply 
buys elsewhere.  
Clarity’s suite of products and services 
addresses these challenges by providing 
its own customer, who may be a hotelier, a 
retailer, a restaurant or an amusement park 
operator, with the tools with which to provide 
outstanding service, thereby encouraging 
the consumer to do more, buy more, and 
remain loyal.  This may be by offering, for 
example, the best in-store or hotel reception 
experience, or may be the provision of 
seamless internet booking, or even access to 
services via Blackberry or iPhone.  Whatever 
medium is chosen, ClarityLive is designed to 
accommodate our changing technological 
environment.
Across the product range, ClarityLive is being 
enhanced and integrated, bringing the best 
ideas, solutions, practices and technologies 
from across different verticals to each of 
our markets.  The resulting proposition 
is emerging as highly-compelling, made 
possible by an already advanced and well-
designed product family.  Once complete, we 
believe the suite will place us firmly ahead of 
Clarity Annual Report     12 
Chief Executive’s Review Our improving  
reputation and  
market awareness  
are resulting in  
healthy levels of 
prospect activity.
the competition, and it is already delivering 
tangible wins, such as:
our loyalty and business intelligence •	
functionality, originally developed for 
retail, is being sold into cinema and 
hospitality applications;
our golf and spa booking capability is •	
being sold into retail stores;
our food and beverage capability is •	
being installed in all divisions; and
our cinema ticketing capabilities are •	
being offered in amusement park and 
similar applications.
Our ultimate goal is to achieve one set of 
fully-integrated products encompassing 
all elements of the consumer purchase 
experience, via whichever channel is 
selected, and to provide outstanding post-
sale support to our customers in providing 
these solutions.
Acquisition of Cyntergy
As mentioned earlier, following the year end 
on 28th May 2010, Clarity re-acquired the 
business and assets of Cyntergy Services 
Ltd, the IT helpdesk and training company 
based in Sunbury on Thames.  Cyntergy 
provides a 24/7 multi-lingual service desk 
to several major high street retailers, and to 
the hotel, leisure and telecommunications 
markets. In addition, Cyntergy currently 
provides IT support and related services 
for Clarity’s software.  Our intention is that, 
with the integration of Cyntergy, in addition 
to enhanced revenue opportunities, Clarity 
can provide the best possible post sale 
experience to its customers, thereby further 
differentiating the Group from its competitors.
Current trading and activities
Good bids and tenders are under way in all 
territories and we are enhancing our sales 
and operational resources to address higher 
activity levels.  In an increasing number of 
areas we will be working with resellers to 
extend our reach.
Resellers will form a key component in our 
planned growth, with several already in 
place and more identified for relationship 
building both in existing territories and new 
geographies. 
The management team is being further 
strengthened at all levels in order to address 
increasing activity levels and opportunities.   
Our team is strong and we will continue to 
develop our organisation as new revenues 
are secured.
Outlook
World-wide market conditions remain 
difficult for most businesses.  However, 
good order prospects remain across each 
of our chosen markets and, although the 
sales ordering process has inevitably 
taken longer in some cases, our improving 
reputation and market awareness are 
resulting in healthy levels of prospect activity.                                                                                                                                        
                                                                                                                                        
With a significant level of repeat business, 
anticipated further Merlin and Pret rollouts, 
and good order-gathering activity under way, 
we remain cautiously confident about the 
Group’s prospects.
Ken Smith BA CA Chief Executive Officer 
28 June 2010 Clarity Annual Report     14 
Financial Review
Revenue 
Group revenues in the year increased 8% 
to £19.1m (2009: £17.7m). All four of our 
divisions increased their revenue year on 
year. The Retail division showed a 10% 
increase to £10.1m (2009: £9.2m) and 
benefitted particularly from new orders in  
the US and Europe. In future reports revenue 
from amusement park customers, currently 
reported in the Retail division, is expected 
to be shown in the Entertainment division. 
Gross profits increased in line with revenue 
and gross profit margin was maintained at 
82% (2009: 82%) for the Group.
Operating expenses
Operating expenses were held to a 3% 
increase year on year reflecting efficiency 
gains as previously acquired businesses 
were further integrated into the Group. Closer 
cooperation between operating teams and 
the integration of separate products into the 
ClarityLive platform are facilitating greater 
operational efficiency as the business scales up.
Net finance costs
Net finance costs for the year were £54,000 
(2009: £187,000). This reduction reflects 
reduced loan balances and a lower average 
interest rate in the year.
Profit before tax and amortisation
Profit before tax and amortisation has 
increased 67% to £1.9m from £1.1m in 2009 
reflecting the increased revenue and greater 
operational efficiencies. 
 
 
 
Amortisation of intangible assets represents 
the write off of software rights acquired. 
These assets are being amortised over 5 
years. The charge in the year has reduced 
from £0.6m to £0.4m as it is now restricted 
to software acquired as part of the MATRA 
acquisition, all other amounts now being fully 
written off.
Taxation
In previous years the Group has not 
recognised its deferred tax asset. Given the 
improved profitability and visibility of future 
profits the Group has recognised a deferred 
tax asset of £721,000 (2009: £nil) in the 
year with an equivalent credit to the income 
statement. When netted against the Group's 
tax charge for the year of £165,000, this gives 
a net credit of £556,000.
Earnings per share
Earnings per share increased to 5.7p, or 
3.6p if the deferred tax credit is added back, 
compared to 1.5p in 2009.  
Capital reorganisation & dividend policy
In April 2009 the trade and assets of a 
number of the Group subsidiaries were 
acquired by Clarity Retail Systems Limited, 
a direct subsidiary of the Company.  As a 
consequence of this process Clarity now has 
distributable reserves and therefore has the 
ability to pay dividends. The Board considers 
that in the Group’s current growth phase 
the cash generated in the business should 
be reinvested, but it will now be possible to 
make future distributions to shareholders 
once sustained profitability and cash flow  
are achieved.
Statement of financial position
Non current assets at 31 March 2010 
were £10.0m (2009: £10.0m) reflecting 
amortisation of £0.4m, deferred tax of £0.7m 
and a reduction to the cost of goodwill of 
£0.3m in the year on the agreement of the 
MATRA earn out amount.Trade and other 
receivables increased to £5.4m (2009: £4.4m) 
reflecting the increase in revenues. Trade 
payables were £1.5m compared with a 2009 
figure of £2.3m which included significant 
one off hardware balances.  
Net cash
Cash and cash equivalents at 31 March 2010 
were £2.4m (2009: £2.0m). The balance on 
our bank loan at 31 March 2010 was £1.1m 
(2009: £1.5m) giving net cash at 31 March  
of £1.3m (2009: £0.5m).
Placing
In October 2009 the Company raised £2.7m 
(before expenses) through the placing of 
6,812,500 new Ordinary Shares at 40p per 
share. The funds were applied to the MATRA 
earn out and to provide working capital for  
the business. 
Cyntergy acquisition
On 28 May 2010 the Company acquired 
80% of the business and assets of Cyntergy 
Services Ltd (in administration), a software 
support and training business. The cash 
consideration was £150,000 and the acquired 
assets and liabilities are set out in note 25.
Stephen Sadler Chief Financial Officer 
28 June 2010
Financial Review
Year ended
31/03/10  
£’000
Year ended
31/03/09  
£’000
Year on year 
change
 
Revenue 19,081 17,683 8%
Gross profit 15,561 14,547 7%
Operating expenses (13,652) (13,249) 3%
Operating profit from continuing operations (before amortisation) 1,909 1,298 47%
Net finance costs (54) (187) (71%)
Profit before tax and amortisation of intangibles 1,855 1,111 67%
Amortisation of intangible assets (416) (646) (36%)
Tax credit 556 6 -
Profit for the year from continuing operations 1,995 471 324%
Earnings per share from continuing operations 5.68p 1.47p 286%
Adjusted earnings per share * 3.63p 1.47p 147%
Net increase in cash and cash equivalents for the year 457 2,114
Net cash at 31 March 1,258 466
 
*Adjusted earnings per share excludes deferred tax credit of £721,000 in 2010 (2009: £nil).
Stephen Sadler ACA
Chief Financial Officer
Amortisation Corporate Governance Report
Although, as an AIM listed company, the 
Company is not required to comply with the 
provisions of the FRC 2008 Combined Code 
(“the Code”) and this is not a statement of 
compliance as required by the Code, the 
board of directors recognises the importance 
of, and is committed to, ensuring that 
effective corporate governance procedures 
relevant to smaller listed companies are in 
place.
The Board and Committees
At 28 June 2010 the Board comprised of 
three Executive Directors, Ken Smith, Tony 
Houldsworth and Stephen Sadler and three 
Non-Executive Directors, Sir Colin Chandler 
(Chairman), David Bennett and Colin Wells. 
The Board, which meets at least 10 times a 
year, is responsible for the overall strategy 
and financial performance of the Group and 
has a formal schedule of matters reserved 
for its approval. Each Board meeting is 
preceded by a clear agenda and any relevant 
supporting information is provided to 
Directors in advance of the meeting. 
The Remuneration Committee comprises the 
three Non-Executive Directors and is chaired 
by Colin Wells. The Committee reviews the 
remuneration and contractual arrangements 
of the Executive Directors. The remuneration 
of the Non Executive Directors is reviewed by 
the Board as a whole. 
The Audit Committee comprises the three 
Non-Executive Directors and is chaired by 
David Bennett. David Bennett is considered 
by the Board to have recent and relevant 
financial experience. The Committee is 
scheduled to meet at least twice a year with 
the Company’s auditors, and the executive 
Directors present by invitation only. The 
Committee meets with the external auditors 
without the executive Directors present as 
it considers appropriate. The Committee is 
responsible for the independent monitoring 
of the effectiveness of the system of internal 
control, compliance, accounting policies 
and published financial statements on behalf 
of the Board. This is achieved primarily 
through a review of the annual financial 
statements and a review of the nature and 
scope of the external audit. Any significant 
findings or identified risks are examined 
so that appropriate action may be taken. 
The Committee is also responsible for 
keeping under review the independence 
and objectivity of the external auditors, 
including a review of non-audit services 
provided to the Group, consideration of 
any relationships with the Company that 
could affect independence and seeking 
written confirmation from the auditors that, 
in their professional judgement, they are 
independent.
The Nominations Committee comprises 
the three Non-Executive Directors and is 
chaired by Sir Colin Chandler. The Committee 
is responsible for nominating prospective 
Directors for the approval of the Board. The 
Committee meets as required to consider 
Board appointments.
Relations with shareholders
The Company encourages the participation 
of both institutional and private investors. 
Communication with private individuals 
is maintained through the Annual General 
Meeting (AGM), and annual and interim 
reports. In addition further details on the 
strategy and performance of the Company 
can be found at its website (www.
claritycommerce.com) which includes copies 
of the Company’s press releases. 
Internal control
The Board has overall responsibility for the 
Group’s systems of internal control and for 
monitoring their effectiveness. Although 
no system of internal control can provide 
absolute assurance against material mis-
statements or loss, the Group’s systems 
are designed to provide the Directors 
with reasonable assurance that issues are 
identified on a timely basis and dealt with 
appropriately. 
The Group has an established organisational 
structure with clearly defined lines of 
authority, responsibility and accountability, 
which is reviewed regularly. Group 
management are responsible for the 
identification and evaluation of key risks 
applicable to their areas of business. 
The external auditors are engaged to express 
an opinion on the financial statements.  
They review and test the systems of internal 
financial controls and data contained in 
the financial statements, and discuss with 
management the reporting of operational 
results and the financial condition of the 
Group, to the extent necessary to express 
their audit opinion.
The Board has considered the need for an 
internal audit function, but has resolved that 
due to the size of the Group, this cannot be 
justified on the grounds of cost effectiveness.
Going concern
The Group finished the financial year holding 
cash and cash equivalents of £2.4m. A term 
loan is in place with HBOS which expires in 
September 2012. At the year end the balance 
on this loan was £1.1m giving net cash at 31 
March 2010 of £1.3m. The Group is currently 
operating well within the covenants set out 
in its banking facilities. Trade receivables of 
£3.6m at the year end compare with trade 
payables of £1.5m. The Group's trading in 
the year to 31 March 2010 showed positive 
growth and the Group's budgets assume 
continuing profit growth and cash generation. 
As a result the Directors' believe that the 
Group will continue as a going concern and 
the financial statements have been prepared 
on this basis.
Clarity Annual Report     15 
Corporate Governance Report      
  
Officers
Sir Colin Chandler
Chairman
David Bennett
Non Executive Director
Colin Wells 
Non Executive Director 
Kenneth Smith 
Chief Executive Officer
Anthony Houldsworth 
Executive Director
Stephen Sadler 
Chief Financial Officer
Thomas McDermott 
Financial Controller and Company Secretary
Registered Office
Paterson House 
Hatch Warren Farm 
Hatch Warren Lane, Hatch Warren 
Basingstoke, Hampshire 
RG22 4RA
Registered Number
3914814
Advisors
Nominated Advisor and Broker
Arbuthnot Securities Limited 
Arbuthnot House 
20 Ropemaker Street 
London 
EC2Y 9AR
Auditor
Baker Tilly UK Audit LLP 
Chartered Accountants  
The Clock House 
140 London Road 
Guildford 
Surrey  
GU1 1UW
Registrars
Capita Registrars Limited  
The Registry 
34 Beckenham Road 
Beckenham 
Kent  
BR3 4TU
Bankers
Bank of Scotland 
55 Temple Row 
Birmingham 
B2 5LS  Directors’ Report
The directors present their report 
together with the audited financial 
statements for the year ended 31st  
March 2010
Principal activities, review of business 
and future development
The principal activities of the Group during 
the year were the provision of technology 
solutions for the Retail, Entertainment, 
Hospitality, and Leisure sectors.  These 
solutions span all levels of consumer 
interaction from simple ticketing through to 
complicated behaviour tracking and loyalty 
programmes.  The Group has offices in the 
UK, US, France, Holland and New Zealand.
A review of the business of the Group 
and its future development is contained 
in the Group Chairman’s Statement, the 
Chief Executive's Review and the Financial 
Review on pages 8 to 14.
Key performance indicators
Financial
In its day to day management of the 
business the Board monitors financial 
key performance indicators, through the 
provision of regular budgets and forecasts, 
monthly management information and 
analyses thereof. 
The principal key performance indicators 
used to assess the performance and 
position of the Group are as follows:
Profit before amortisation and tax  •	
on continuing operations  
The Group improved its result from a 
profit before taxation and amortisation 
of £1.1m to a profit before taxation and 
amortisation of £1.9m.
Net funds •	 
The Group improved its net funds 
(being cash at bank and in hand less 
bank loans) from £0.5m to a position 
of £1.3m.
Revenues •	 
Revenue from continuing operations 
grew 7.9% from £17.7m to £19.1m.
Support and maintenance annuity revenues 
continue to contribute significantly to the 
Group and are closely monitored and 
controlled. Cash resources are closely 
managed and cash flows are frequently 
reviewed, both in the short and medium 
term.
Share price monitoring and effective investor 
relations work continue to be important 
areas for the Board.
Non-financial
The Board continues to consider certain 
non-financial key performance indicators 
to be important in the day to day 
management of the Group. The quality 
of the Group’s software products is of 
paramount importance and the Group 
runs dedicated Software Development and 
Quality Assurance teams to closely monitor 
and control the production and releases of 
product into the marketplace.
The Group’s principal asset and resource 
is its wide range of talented and capable 
personnel. Post year end, the Board have 
implemented various initiatives to reward 
good performance appropriately and 
encourage the retention of key personnel.  
These initiatives include a matching 
employer’s contribution to the Group’s 
pension scheme, employer funded private 
medical insurance, life insurance and 
permanent health insurance. 
Monitoring of the Group's sales pipelines 
and prospects is undertaken on a regular 
basis, including frequent reviews with the 
sales management and the sales team.
Principal risks and uncertainties
The Board identifies the principal risks and 
uncertainties faced by the business as 
being:
The constantly changing landscape within 
the markets in which Clarity operates, in 
terms of consolidation of competitors and 
customers alike, is outside the Group’s 
control and therefore creates an element 
of uncertainty. The Board is constantly 
monitoring the situation to minimise the 
Group’s exposure and take advantage of 
opportunities. Consolidation continues to 
provide both upside and downside; upside 
in respect of new unexpected business 
arising and downside in terms of contracts 
lost as an acquiring company chooses its 
current incumbent supplier in place of the 
Clarity solution.
It is important that the Group continually 
responds and reacts to the changing needs 
of customers and develop market relevant 
products in order to remain competitive in 
the markets we serve.
These actions have greatly reduced and 
have gone a long way towards eliminating 
the associated business risks. Nevertheless, 
the overall economic climate also presents 
some uncertainty and there is a risk 
that some businesses will defer capital 
expenditure projects.
Dividends
No interim dividend was proposed and the 
Directors do not recommend the payment of 
a final dividend (2009: nil). 
Share issues
Details of shares issued in the period 
are detailed in note 23 to the financial 
statements.
Research and development
At the year end the Group employed 78 
(2009: 69) full time software developers. 
Clarity Annual Report     17 
Directors’ Report Directors’ Report  
cont
In the financial year ended 31 March 2010 the Group incurred 
approximately £4.9m (2009: £3.6m) in development expenditure, 
which has been written off to the income statement. The Group 
operates dedicated product centres in its Basingstoke, Fareham, 
Paris and Atlanta locations, incorporating product development and 
quality assurance functions.
Research and development of an innovative nature continues in 
order to ensure that the Group remains in line with, and where 
possible ahead of, its direct competitors in terms of functionality 
and ability to satisfy constantly changing arena of customer 
requirements.
Notifiable shareholdings
In addition to the Directors’ interests described in this report, the 
Company is aware of the following interests of 3% or more in the 
issued ordinary share capital notified as at 4 June 2010:  
 
Number of 
ordinary 
shares
Percentage 
of issued 
share capital
 
Southwind Limited 5,798,311 14.29
Graham York 3,513,051 8.66
Octopus Asset Management 3,352,433 8.26
ISIS EP LLP 2,500,000 6.16
David Simmons 2,361,923 5.82
Herald Investment 
Management
2,315,956 5.71
Groundlinks Limited 2,309,667 5.69
Clarity Commerce EBT 1,730,510 4.27
Bluehone Investors LLP 1,537,914 3.79
Gartmore Investment  
Management
1,400,000 3.45
In so far as the Company is aware, the percentage of the Company’s 
issued share capital that is not in public hands is 22.5%.
Directors and their interests
The Directors of the Company during the year, and their interests in 
the ordinary share capital of the Company as at 04 June 2010, were 
as follows:
 
At
31/03/10
(Or earlier 
date of 
retirement)
At
01/04/09
 
KR Smith 445,000 170,000
A Houldsworth 757,576 757,576
Sir C Chandler 396,522 244,240
S Bellamy  
(retired 18 March 2010)
750,000 750,000
J O'Hara  
(retired 31 August 2009) - 705,775
Changes in the Board composition upto the date of signing the 
accounts were as follows:
On 17 April 2009 Christopher Ford was appointed as an •	
Executive Director.
On 31 August 2009 John O’Hara retired as Non-executive •	
Chairman, Sir Colin Chandler replaced John O’Hara as Non-
executive Chairman.
On 26 January 2010 Christopher Ford resigned as an  •	
Executive Director.
On 18 March 2010 Stephen Bellamy retired as a Non-executive •	
Director.
On 1 April 2010 Colin Wells and David Bennett were appointed •	
Non-executive Directors.
On 10 May 2010 Stephen Sadler was appointed as an •	
Executive Director.
The maximum share price during the year was 51p and the minimum 
share price was 23.5p.
Clarity Annual Report     18 
Directors’ Report   
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 in the 2008 Combined Code 
issued by the Financial Reporting Council 
(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 holds regular face to face and 
telephone Board meetings as appropriate 
to discuss a range of strategic, operational 
and financial matters relating to the Group’s 
corporate activities. 
The Audit, Remuneration and Nominations 
Committees each have formally and 
appropriately delegated duties and 
comprise the non executive members of 
the Board, inclusive of the non executive 
Chairman. The Remuneration Committee 
is also responsible for reviewing and 
agreeing share option scheme rules and/or 
other similar schemes that are considered 
for implementation from time to time. All 
committees meet at least twice a year.
Financial risk management
The Group’s financial instruments comprise 
cash at bank, overdraft, bank loans, trade 
and other payables and receivables, and 
loan notes. The main purpose of these 
financial instruments is to maintain adequate 
finance for the Group’s operations.
The main risks arising from the Group’s 
financial instruments are exchange rate 
fluctuations and liquidity risk. It is the 
Group’s policy to finance its operations 
through a mixture of cash and borrowings 
and to review periodically the mix of these 
instruments with regard to the projected 
cash flow requirements of the Group and an 
acceptable level of risk exposure.
During the year, the Group used forward 
contracts in both Euro’s and US Dollar, to 
protect against exchange rate risk.  These 
contracts were put in place to protect 
the budgeted profit levels, of the US and 
European operations, against fluctuations in 
the exchange rates.  All forward contracts 
were settled before the year end.
The Group has overseas subsidiaries 
where transactions, assets and liabilities 
are denominated in foreign currencies. At 
present the Group is therefore exposed to 
currency fluctuations arising from these 
sources. Details on the exposure to risks are 
referred to in note 26.
business. The Board regularly reviews 
the internal controls and challenges 
management to further enhance these.
The Board also pays close attention 
to external advisors in respect of any 
suggested changes in process to facilitate 
an improvement to internal control systems 
and practices.
Net funds position
As a result of successful cash management 
improvements, the Group’s net funds 
position (being the cash at bank and in 
hand, less bank loans) improved during  
the year to £1.3m (2009: £0.5m). 
The next facilities review with Bank of 
Scotland is scheduled for the end of  
June 2010.
Going concern
The Group finished the financial year holding 
cash and cash equivalents of £2.4m. A term 
loan is in place with HBOS which expires in 
September 2012. At the year end the balance 
on this loan was £1.1m giving net cash at 31 
March 2010 of £1.3m. The Group is currently 
operating well within the covenants set out 
in its banking facilities. Trade receivables of 
£3.6m at the year end compare with trade 
payables of £1.5m. The Group's trading in 
the year to 31 March 2010 showed positive 
growth and the Group's budgets assume 
continuing profit growth and cash generation. 
As a result the Directors' believe that the 
Group will continue as a going concern and 
the financial statements have been prepared 
on this basis.
Service contracts
KR Smith has a service agreement with 
an effective date of 1 April 2008. The 
salary at that date was £150,000 per 
annum plus car allowance and Company 
pension contributions of 7.5% of salary. 
Bonuses are paid at the discretion of the 
Remuneration Committee.  The service 
contract has a notice period of 12 months. 
As of 1 December 2008, the Remuneration 
Committee approved a salary increase to 
£185,000 per annum.
Anthony Houldsworth has a service 
agreement with an effective date of 24 April 
2006.  The salary at that date was £131,197 
per annum.  Bonuses are paid at the 
discretion of the Remuneration Committee.  
The service agreement has a notice period 
of 6 months.  As of 29 July 2009, the 
Remuneration Committee approved a salary 
increase to £170,000 per annum.  In line 
with the other Directors, the Remuneration 
Committee approved company pension 
contributions of 7.5% of salary from 22 April 
2010.
Stephen Sadler signed a service agreement 
with the Company, with a commencement 
date of 10 May 2010.  The salary is 
£135,000 per annum plus car allowance and 
company pension contributions of 7.5% of 
salary.  Bonuses are paid at the discretion of 
the Remuneration Committee. The service 
agreement has a notice period of 6 months.
The Non Executive Directors have entered 
into letters of appointment with the 
Company as follows:
Sir Colin Chandler - £50,000 per •	
annum, plus reasonable expenses.
David Bennett - £32,000 per •	
annum, plus reasonable expenses 
(commencement date of 1 April 2010).
Colin Wells - £32,000 per annum, plus •	
reasonable expenses (commencement 
date of 1 April 2010).
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 2010, the Group's outstanding 
trade payables represented 47 days’ 
purchases (2009: 58 days’).
Employees
The Group is an equal opportunities 
employer and makes every effort to ensure 
disabled people are not discriminated 
against on the grounds of their disabilities.  
In the event of staff becoming disabled, 
every effort is made to ensure that 
employment continues and that appropriate 
training is arranged.  Employees are kept 
informed regarding the Group’s affairs 
and are consulted on a regular basis 
through meetings, wherever feasible and 
appropriate.
Disclosure to auditors
In the case of each person who is a Director 
at the time when the report is approved, the 
following applies:
As far as the Director is aware, there is 
no relevant audit information of which the 
Company’s auditors are unaware; and
The Director confirmed that he has taken 
all the steps that he ought to have taken as 
a Director in order to make himself aware 
of any relevant audit information and to 
establish that the Company’s auditors are 
aware of that information.
Auditors 
A resolution to re-appoint Baker Tilly UK 
Audit LLP as auditors will be put to the 
Annual General Meeting on 30 July 2010.
On behalf of the Board 
Ken Smith BA CA Chief Executive Officer 
28 June 2010 
 
 
 
 
 
 
 
Clarity Annual Report     19 
Directors’ Report
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 Statement of Directors’ Responsibilities
The Directors are responsible for preparing 
the Annual Report and the financial 
statements in accordance with applicable 
law and regulations.
UK Company law requires the Directors 
to prepare group and company financial 
statements for each financial year. The 
Directors are required under the AIM Rules 
of the London Stock Exchange to prepare 
Group financial statements in accordance 
with International Financial Reporting 
Standards (IFRS) as adopted by the EU 
and have elected under company law to 
prepare the Company financial statements 
in accordance with United Kingdom 
Generally Accepted Accounting Practice 
(United Kingdom Accounting Standards and 
applicable law).
The Group financial statements are required 
by law and IFRS adopted by the EU to 
present fairly the financial position and 
performance of the Group; the Companies 
Act 2006 provides in relation to such 
financial statements that references in 
the relevant part of that Act to financial 
statements giving a true and fair view 
are references to their achieving a fair 
presentation.
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 of loss of the 
group for that period.
In preparing each of the Group and 
Company financial statements, the Directors 
are required to: 
select suitable accounting policies and •	
then apply them consistently;
make judgements and estimates that •	
are reasonable and prudent;
for the Group financial statements, •	
state whether they have been prepared 
in accordance with IFRS adopted by 
the EU; and for the Company financial 
statements state whether applicable 
UK accounting standards have been 
followed, subject to any material 
departures disclosed and explained in 
the Company financial statements;
prepare the financial statements on •	
the going concern basis unless it is 
inappropriate to presume that the 
Group and the Company will continue 
in business.
The Directors are responsible for the 
maintenance and integrity of the corporate 
and financial information included on the 
Clarity Commerce Solutions Plc website.
Legislation in the United Kingdom governing 
the preparation and dissemination of 
financial statements may differ from 
legislation in other jurisdictions.
The Directors are responsible for keeping 
adequate accounting records that are 
sufficient to show and explain the Group’s 
and the Company’s transactions and 
disclose with reasonable accuracy at any 
time the financial position of the Group 
and Company and enable them to ensure 
the financial statements comply with 
the Companies Act 2006. They are also 
responsible for safeguarding the assets of 
the Group and hence for taking reasonable 
steps for the prevention and detection of 
fraud and other irregularities.
Clarity Annual Report     20 
Statement of Directors’ 
Responsibilities Independent Auditor’s Report to the members of  
Clarity Commerce Solutions Plc
We have audited the group and parent 
company financial statements (“the financial 
statements”) on pages 22 to 54. The 
financial reporting framework that has been 
applied in the preparation of the group 
financial statements is applicable law and 
International Financial Reporting Standards 
(IFRSs) as adopted by the European Union.  
The financial reporting framework that has 
been applied in the preparation of the parent 
company financial statements is applicable 
law and United Kingdom Accounting 
Standards (United Kingdom Generally 
Accepted Accounting Practice). 
This report is made solely to the company’s 
members, as a body, in accordance with 
Chapter 3 of Part 16 of the Companies Act 
2006.  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 more fully explained in the Directors’ 
Responsibilities Statement set out on page 
20, the directors are responsible for the 
preparation of the financial statements and 
for being satisfied that they give a true and 
fair view.  Our responsibility is to audit the 
financial statements in accordance with 
applicable law and International Standards 
on Auditing (UK and Ireland).  Those 
standards require us to comply with the 
Auditing Practices Board’s (APB’s) Ethical 
Standards for Auditors.
Scope of the audit of the financial 
statements
A description of the scope of an audit of 
financial statements is provided on the 
APB’s website at www.frc.org.uk/apb/
scope/UKNP .
Opinion on the financial statements
In our opinion:
 the financial statements give a true and •	
fair view of the state of the Group’s and 
of the parent company’s affairs as at 31 
March 2010 and of the Group’s profit 
for the year then ended;
 the group financial statements have •	
been properly prepared in accordance 
with IFRSs as adopted by the European 
Union; 
 the parent company financial •	
statements have been properly 
prepared in accordance with United 
Kingdom Generally Accepted 
Accounting Practice; and
 the financial statements have been •	
prepared in accordance with the 
requirements of the Companies Act 
2006.
Opinion on other matters prescribed by 
the Companies Act 2006
In our opinion the information given in the 
Directors’ Report for the financial year for 
which the financial statements are prepared 
is consistent with the financial statements.
Matters on which we are required to 
report by exception
We have nothing to report in respect of the 
following matters where the Companies Act 
2006 requires us to report to you if, in our 
opinion:
 adequate accounting records have not •	
been kept by the parent company, or 
returns adequate for our audit have 
not been received from branches not 
visited by us; or
 the parent company financial •	
statements are not in agreement with 
the accounting records and returns; or 
 
 
 
 
 certain disclosures of Directors’ •	
remuneration specified by law are not 
made; or
 we have not received all the  •	
information and explanations we 
require for our audit.  
Robert Hamlin ACA  
(Senior Statutory Auditor)  
 
For and on behalf of  
Baker Tilly UK Audit LLP  
Statutory Auditor
Chartered Accountants 
The Clock House, 140 London Road 
Guildford, Surrey GU1 1UW
28 June 2010
Clarity Annual Report     21 
Independent Auditor’s Report  Consolidated Income Statement
 
for the year ended 31 March 2010
Notes
Year ended
31/03/10
£'000
Year ended
31/03/09
£'000
 
Continuing operations: 
Revenue 7 19,081 17,683
Cost of sales (3,520) (3,136)
Gross profit 15,561 14,547
Operating costs:
Operating expenses (13,652) (13,249)
Amortisation and impairment of acquired intangible assets 13 (416) (646)
Total operating costs (14,068) (13,895)
Operating profit from continuing operations 8 1,493 652
Operating profit from continuing operations is analysed between:
Operating profit from continuing operations 1,909 1,298
Amortisation and impairment of acquired intangible assets 13 (416) (646)
Finance income 10 49 617
Finance costs 10 (103) (804)
Profit before taxation from continuing operations 1,439 465
Taxation credit 11 556 6
Profit for the year from continuing operations 1,995 471
Loss for the year from discontinued operations 27 - (586)
Profit on disposal of discontinued operations 28 - 333
Profit for the year attributable to the owners of the parent company 1,995 218
Earnings per share: 12
Basic and diluted - continuing operations 5.68p 1.47p
Basic and diluted - discontinued operations - (0.79)p
 5.68p 0.68p
Consolidated Statement of Comprehensive Income
for the year ended 31 March 2010
 Notes
Year ended
31/03/10
£'000
Year ended
31/03/09
£'000
 
Profit for the year attributable to the owners of the parent company 1,995 218
Other comprehensive income:
Exchange differences on translation of foreign operations (66) (39)
Total comprehensive income for the year attributable to the owners of the 
parent company
1,929 179
Clarity Annual Report     22 
Consolidated Financial Statements  The notes on pages 26 to 47 form part of these financial statements.
Consolidated Statement of Financial Position
as at 31 March 2010         
 Notes
As at
31/03/10  
£’000
As at
31/03/09  
£’000
 
Assets:
Non current assets:
Property, plant and equipment 14 262 248
Deferred tax 22 721 -
Goodwill 13 8,627 8,890
Other intangible assets 13 406 812
Total non current assets 10,016 9,950
Current assets:
Inventories 15 155 260
Trade and other receivables 16 5,439 4,370
Cash and cash equivalents 2,347 1,951
Total current assets 7,941 6,581
Total assets 17,957 16,531
Liabilities:
Non current liabilities:
Bank loans 18 689 1,085
Deferred consideration 19 713 3,136
Obligations under finance leases 20 - 14
Total non current liabilities 1,402 4,235
Current liabilities:
Trade payables 1,496 2,264
Other payables 17 2,747 2,797
Income tax 633 184
Bank loans and overdrafts 18 400 400
Loan notes 19 102 129
Obligations under finance leases 20 14 8
Deferred consideration 19 690 570
Total current liabilities 6,082 6,352
Total liabilities 7,484 10,587
Net assets 10,473 5,944
Equity:
Shareholders’ equity:
Share capital 23 9,710 8,007
Share premium 8,473 7,576
Retained earnings (9,044) (11,039)
Translation reserve (362) (296)
Other reserve 1,696 1,696
Total equity attributable to the owners of the parent company 10,473 5,944
The financial statements on pages 22 to 54 were approved and authorised by the Directors on 28 June 2010 and were signed on 28 June 
2010 on behalf of the Board by: 
Ken Smith BA CA Chief Executive Officer 
28 June 2010
Clarity Annual Report     23 
Consolidated Financial Statements 
Company Number 3914814 Consolidated Statement of Cash Flows
for the year ended 31 March 2010
 
Year ended
31/03/10  
£’000
Year ended
31/03/09  
£’000
 
Operating activities: 
Profit before tax and finance costs 1,493 399
Depreciation 14 95 107
Amortisation:
Intellectual property rights 13 416 640
Software 13 - 6
Interest paid (290) (705)
Taxation 389 (267)
Operating cash flows before movements in working capital: 2,103 180
Decrease in inventories 15 105 366
(Increase)/decrease in trade and other receivables (1,075) 433
(Decrease)/increase in trade and other payables (923) 450
Cash generated from operations 210 1,429
Investing activities:
Proceeds on disposal of property, plant and equipment 14 - 31
Proceeds on disposal of businesses - 748
Purchase of property, plant and equipment (114) (61)
Interest received 238 524
Purchase of subsidiary undertakings net of cash acquired - (19)
Net cash from investing activities 124 1,223
Financing activities:
Proceeds from the issue of share capital 2,600 -
Repayment of loan notes (2,067) (386)
New bank loans - 1,485
Repayment of bank loans (400) (1,576)
Capital element of finance leases (8) (53)
Interest element of finance leases (2) (8)
Cash generated from/(absorbed in) financing activities 123 (538)
Net increase in cash and cash equivalents 457 2,114
Cash and cash equivalents at the beginning of the year 1,951 (89)
Foreign exchange rate adjustments (61) (74)
Cash and cash equivalents at the end of the year 2,347 1,951
Clarity Annual Report     24 
Consolidated Financial Statements   Consolidated Statement of Changes in Equity
as at 31 March 2010     
Share  
Capital
£’000
Share 
Premium 
Account
£’000
Retained 
Earnings
£’000
Other 
Reserve
£’000
 
Translation 
Reserve 
£’000
T otal
£’000
 
At 31 March 2008 and 1 April 
2008
8,007 7,576 (11,257) 1,696 (257) 5,765
Consolidated profit for the year - - 218 - - 218
Other comprehensive income 
net of tax:
Exchange differences on 
translation of foreign operations
- - - - (39) (39)
At 31 March 2009 and 1 April 
2009
8,007 7,576 (11,039) 1,696 (296) 5,944
Consolidated profit for the year - - 1,995 - - 1,995
Other comprehensive income 
net of tax:
Exchange differences 
on translation of foreign 
operations
-
 
- - - (66) (66)
Transactions with owners in 
their capacity as owners
1,703 897 - - - 2,600
At 31 March 2010 9,710 8,473  (9,044) 1,696 (362) 10,473
Share Premium account represents the premium on issue of shares less any applicable costs. 
 
Other Reserve results from the application of merger relief in the Company’s own accounts. 
 
Translation Reserve arises from the retranslation of the net investments in foreign operations.
Attributable to the owners of the parent company
Clarity Annual Report     25 
Consolidated Financial Statements   Notes to the Consolidated Financial Statements 
1 Reporting entity 
Clarity Commerce Solutions plc is a public limited company 
incorporated and domiciled in England and Wales (registration 
number 3914814). The Company's registered address is Paterson 
House, Hatch Warren Farm, Hatch Warren Lane, Hatch Warren, 
Basingstoke, Hampshire RG22 4RA.
The Company's ordinary shares are traded on the AIM market of the 
London Stock Exchange plc. The consolidated financial statements of 
the Group for the year ended 31 March 2010 comprise the Company 
and its subsidiaries.
Across the year the Group was primarily involved in the provision of 
software solutions for entertainment, leisure, hospitality and retail 
sectors with offices in the United Kingdom, United States, France, 
Holland and New Zealand.
2 Compliance with accounting 
standards 
At the date of authorisation of the consolidated financial statements, 
the International Accounting Standards Board and International 
Financial Reporting Interpretations Committee have issued the 
following standards and interpretations which have an effective date 
falling after the date of these financial statements and so have not 
been applied in these financial statements.  The directors anticipate 
that the adoption of these Standards and Interpretations in future 
periods will not have a material impact on the financial statements of 
the Group.
IFRS 1
Revised IFRS 1 First-time Adoption of IFRS
IFRS 3
Business Combinations – Comprehensive revision on applying 
the acquisition method
IFRS 9
Financial Instruments: Replacement of IAS 39
IAS 27
Consolidated and Separate Financial Statements – Amendments 
arising from IFRS 3
IAS 28
Investments in Associates – Consequential amendments arising 
from IFRS 3
IAS 31
Investments in Joint Ventures – Consequential amendments 
arising from IFRS 3
IAS 32
Financial Instruments: Presentation – Amendment; Classification 
of Rights Issues
IAS 39
Financial Instruments: Recognition and Measurement – 
Amendment; Eligible hedged items
IAS 39
Financial Instruments: Recognition and Measurement – 
Amendment; Embedded Derivatives
IFRIC 9
Reassessment of Embedded Derivatives – Amendment: 
Embedded Derivatives
IFRIC 17
Distributions of Non Cash Assets to Owners
IFRIC 18
Transfers of Assets from Customers
IFRIC 19
Extinguishing Financial Liabilities with Equity Instruments
The Directors anticipate that the adoption of these Standards and 
Interpretations in future periods will have no material impact on the 
financial statements of the Group when the relevant Standards and 
Interpretations come into effect.
3 Going concern 
The Group finished the financial year holding cash and cash 
equivalents of £2.4m. A term loan is in place with HBOS which 
expires in September 2012. At the year end the balance on this 
loan was £1.1m giving net cash at 31 March 2010 of £1.3m. The 
Group is currently operating well within the covenants set out in its 
banking facilities. Trade receivables of £3.6m at the year end compare 
with trade payables of £1.5m. The Group's trading in the year to 
31 March 2010 showed positive growth and the Group's budgets 
assume continuing profit growth and cash generation. As a result the 
Directors' believe that the Group will continue as a going concern and 
the financial statements have been prepared on this basis.
4 Basis of preparation 
The consolidated financial statements have been prepared in 
accordance with International Financial Reporting Standards 
adopted by the International Accounting Standards Board (IASB) 
and interpretations issued by the International Financial Reporting 
Interpretations Committee of the IASB (together IFRS) as endorsed 
by the European Union.
These financial statements are presented in sterling as that is the 
currency of the primary economic environment in which the Group 
operates.
Clarity Annual Report     26 
Notes to the Consolidated  
Financial Statements   
5 Accounting policies 
The following accounting policies have been consistently applied 
in arriving at the consolidated financial information set out in this 
report.
Basis of accounting 
The consolidated financial information has been prepared under the 
historical cost convention, in accordance with International Financial 
Reporting Standards (IFRS) as adopted for use in the European 
Union and the requirements of the Companies Act applicable to 
companies reporting under IFRS.
Basis of consolidation 
The consolidated financial statements incorporate the financial 
statements of the Company and entities controlled by the Company 
(its subsidiaries) made up to 31 March each year. Control is 
achieved where the Company has the power to govern the financial 
and operating policies of an investee entity so as to obtain benefits 
from its activities.
The trading results of subsidiaries acquired or disposed of during 
the year are included in the consolidated income statement from the 
effective date of acquisition or up to the effective date of disposal, 
as appropriate.
All intra-group transactions, balances, income and expenditure are 
eliminated on consolidation.
Revenues and revenue recognition 
Revenue, 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 staged completion of the software 
project.
Maintenance income
Income is recognised evenly across the duration of the 
contractual period. 
Property, plant and equipment 
The cost of property, plant and equipment less estimated residual 
value is written off at the following annual rates:
Motor vehicles 
25% on reducing balance
Office equipment 
20 - 25% on reducing balance
Leasehold properties 
Over the term of the lease
 
The carrying values of the property, plant and equipment are 
reviewed for impairment when events or changes in circumstances 
indicate that the carrying value may not be recoverable.
Intangible software rights 
In accordance with IFRS 3 ‘Business Combinations’, value has been 
attributed to software rights acquired since 1 April 2006. 
The value of the software rights is then amortised over the estimated 
useful life of the software, which is considered to be five years, and 
the amortisation is charged separately in operating costs.
Business combinations 
The purchase method of accounting is used to account for the 
acquisition of subsidiaries by the Group.  The cost of an acquisition 
is measured as the fair value of the assets given, equity instruments 
issued and liabilities incurred or assumed at the date of exchange, 
plus costs directly attributable to the acquisition.  Identifiable 
assets acquired and liabilities and contingent liabilities assumed 
in a business combination are initially measured at fair value at the 
acquisition date irrespective of the extent of any minority interest.
The excess of the cost of an acquisition over the fair values of 
the Group’s share of identifiable assets and liabilities acquired is 
recognised as goodwill.  If the fair value of identifiable assets and 
liabilities acquired (i.e. discount on acquisition) exceeds the cost 
of the business combination, the difference is recognised directly 
to the income statement. Where necessary, adjustments are made 
to the financial statements of subsidiaries to bring the accounting 
policies used into line with those used by the Group.
Goodwill 
Goodwill represents the excess of the cost of an acquisition over the 
fair value of Group’s share of the identifiable net assets of the acquired 
subsidiary at the date of acquisition. Separately identified goodwill is 
tested annually for impairment and carried at cost less accumulated 
impairment losses. Impairment losses on goodwill are not reversed. 
Gains and losses on the disposal of an entity include the carrying 
amount of goodwill.
Goodwill is allocated to cash-generating units for the purposes of 
impairment testing. The allocation is made to those cash-generating 
units, or groups of cash-generating units, that are expected to benefit 
from the business combination in which the goodwill arose. The Group 
allocates goodwill to each business segment in each country in which 
it operates.
Goodwill arising on the acquisition of overseas subsidiaries is recorded 
in the functional currency of the acquired subsidiary and translated into 
the presentation currency at the prevailing closing rate at each date 
of the statement of financial position in accordance with the Group 
accounting policy for foreign currency. 
Impairment of assets 
Other intangible assets and property, plant and equipment with an 
indefinite useful life, and those intangible assets not yet available 
for use, are tested for impairment at least annually. All other 
individual assets are tested for impairment whenever events or 
changes in circumstances indicate that the carrying amount may 
not be recoverable.  If any such indication exists, the recoverable 
amount of the asset is estimated in order to determine the extent 
of the impairment loss (if any). Where the asset does not generate 
cash flows that are independent from other assets, the Group 
estimates the recoverable amount of the cash-generating unit to 
which the asset belongs. Recoverable amount is the higher of fair 
value less costs to sell and value in use. In assessing value in use, 
the estimated future cash flows are discounted to their present 
value using a pre-tax discount rate that reflects current market 
assessments of the time value of money and the risks specific to the 
asset (or cash-generating unit) for which the estimates of future cash 
flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is 
estimated to be less than its carrying amount, the carrying amount 
of the asset (cash-generating unit) is reduced to its recoverable 
amount. An impairment loss is recognised as an expense 
immediately, unless the relevant asset is carried at a revalued 
amount, in which case the impairment loss is treated as  
a revaluation decrease.
Notes to the Consolidated 
Financial Statements cont
Clarity Annual Report     27 
Notes to the Consolidated  
Financial Statements  Notes to the Consolidated  
Financial Statements cont
Impairment of goodwill 
Where the net assets exceed the value in use, an impairment is 
deemed to have occurred and the resultant write down in the 
goodwill is charged to the income statement immediately.
Leased assets 
Assets held under hire purchase agreements are capitalised and 
disclosed under property, plant and equipment at their fair value. 
The capital element of the future payments is treated as a liability 
and the interest is charged to the income statement in equal 
proportions over the period of the lease.
Where the Group enters into a finance lease which entails taking 
substantially all the risks and rewards of ownership of an asset, 
the lease is treated as a finance lease. Assets held under finance 
leases are recognised as assets of the Group at their fair value 
or, if lower, at the present value of the minimum lease payments, 
each determined at the inception of the lease. The asset is 
recorded in the statement of financial position as a property, plant 
and equipment and is depreciated in accordance with the stated 
depreciation policies. Future instalments under such leases, net of 
finance charges, are included with liabilities. Rentals payable are 
apportioned between the finance element, which is charged to the 
income statement in equal proportions over the period of the lease, 
and the capital element which reduces the outstanding obligation for 
future instalments.
Rentals applicable to operating leases where substantially all of the 
benefits and risks of ownership remain with the lessor are charged 
against the income statement as incurred.
Financial instruments 
Financial assets and financial liabilities are recognised in the Group’s 
statement of financial position when the Group becomes a party to 
the contractual provisions of the instrument.
Trade and other receivables 
Trade receivables are initially recognised at fair value and 
subsequently measured at amortised cost less provision for 
impairment.  A provision for impairment of trade receivables is 
established when there is objective evidence that the Group will not 
be able to collect all amounts due according to the original terms 
of receivables. The amount of the provision is recognised in the 
income statement. The cost of unrecoverable trade receivables is 
recognised in the income statement immediately.
Trade payables 
Trade payables are recognised at fair value then subsequently at 
amortised cost using the effective interest rate.  Trade payables do 
not carry any interest.
Cash and cash equivalents 
Cash and cash equivalents comprise cash in hand and on demand 
deposits, and other short-term highly liquid investments that are 
readily convertible to a known amount of cash and are subject 
to an insignificant risk of change in value. For the purpose of the 
statement of cash flow, cash and cash equivalents includes bank 
overdrafts.
Financial liabilities and equity 
Financial liabilities and equity instruments are classified according  
to the substance of the contractual arrangements entered into.  
An equity instrument is any contract that evidences a residual 
interest in the assets of the Group after deducting all of its liabilities.
Bank borrowings 
Interest bearing bank loans and overdrafts are recorded as the 
proceeds received, net of direct issue costs. Such instruments are 
subsequently carried at their amortised cost and finance charges, 
including premiums payable on settlement or redemption, are 
recognised in the income statement over the term of the instrument 
using an effective rate of interest.  Finance charges, including 
premiums payable on settlement or redemption, are accounted for 
on an accruals basis and are added to the carrying amount of the 
instrument to the extent that they are not settled in the period in 
which they arise.
Inventory 
Inventory is valued at the lower of cost and net realisable value, after 
due allowances for obsolete and slow moving items.
Taxation 
Current tax is the tax currently payable based on taxable profit for 
the year.
Deferred income taxes are calculated using the liability method on 
temporary differences. Deferred tax is generally provided on the 
difference between the carrying amounts of assets and liabilities and 
their tax bases. However, deferred tax is not provided on the initial 
recognition of goodwill, nor on the initial recognition of an asset or 
liability unless the related transaction is a business combination or 
affects tax or accounting profit.
Deferred tax on temporary differences associated with shares in 
subsidiaries and joint ventures is not provided if reversal of these 
temporary differences can be controlled by the Group and it is 
probable that reversal will not occur in the foreseeable future. In 
addition, tax losses available to be carried forward as well as other 
income tax credits to the Group are assessed for recognition as 
deferred tax assets.
Deferred tax liabilities are provided in full. Deferred tax assets are 
recognised to the extent that it is probable that the underlying 
deductible temporary differences will be able to be offset against 
future taxable income. Current and deferred tax assets and 
liabilities are calculated at tax rates that are expected to apply to 
their respective period of realisation, provided they are enacted 
or substantively enacted at the date of the statement of financial 
position.
Changes in deferred tax assets or liabilities are recognised as a 
component of tax expense in the income statement, except where 
they relate to items that are charged or credited directly to equity, 
in which case the related deferred tax is also charged or credited 
directly to equity.
The tax expense/ credit in the income statement is the sum of the 
current and deferred tax.
Capital instruments 
Capital instruments are recorded at the fair value of the 
consideration received less issue costs in accordance with IAS 39 
‘Financial Instruments: Recognition and Measurement’.
Segmental reporting 
A segment is a component of the Group that engages in business 
activities from which it earns revenue and incurs expenses for which 
discrete financial information is available which is regularly received 
by the Group's chief operating decision maker.  The chief operating 
decision maker has been identified as the Chief Executive Officer.
Research and development 
All Research costs are written off to the Income Statement as 
incurred.
Development costs incurred are capitalised when an asset is created 
that can be identified and all the following conditions are satisfied:
completion of the intangible asset is technically feasible so that •	
it will be available for use or sale;
the Group intends to complete the intangible asset and use or •	
sell it;
the Group has the ability to use or sell the intangible asset; •	
Clarity Annual Report     28 
Notes to the Consolidated  
Financial Statements  Notes to the Consolidated  
Financial Statements cont
 
the intangible asset will generate probable future economic •	
benefits. Among other things, this requires that there is a market 
for the output from the intangible asset or for the intangible 
asset itself, or, if it is to be used internally, the asset will be used 
in generating such benefits;
there are adequate technical, financial and other resources to •	
complete the development and to use or sell the intangible 
asset; and
the expenditure attributable to the intangible asset during its •	
development can be measured reliably.
Development costs not meeting the criteria for capitalisation are 
expensed to the income statement as incurred.
The cost of an internally generated intangible asset comprises all 
directly attributable costs necessary to create, produce, and prepare 
the asset to be capable of operating in the manner intended by the 
Group.
Directly attributable costs include employee (except Directors) 
costs incurred on software development, together with associated 
overheads.
Amortisation commences in the month that costs are incurred, and 
the amortisation period is five years (being the estimated useful life 
of the assets). Amortisation of development costs is included within 
operating costs in the income statement.
Foreign exchange 
Assets and liabilities denominated in foreign currencies are translated 
into sterling at the rates of exchange ruling at the date of the 
statement of financial position. 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 date of the statement of financial position. Trading results 
are translated at the rates of exchange ruling at the end of each 
month. Differences arising on the retranslation of opening net assets 
are dealt with through equity.
Share based payments 
Equity-settled share based payments are measured at fair value 
(excluding the effect of non market-based vesting conditions) at the 
date of grant. The fair value is expressed on a straight line basis over 
the vesting period, based on the Group’s estimate of shares that 
will eventually vest and adjusted for the effect of non market-based 
vesting conditions. Fair value is measured by use of an appropriate 
binomial valuation method.
6 Critical judgements and estimation 
uncertainty 
The preparation of the financial statements requires management to 
make estimates and assumptions that affect the reported amount 
of revenues, expenses, assets and liabilities, and the disclosure 
of contingent liabilities at the date of the financial statements. If in 
the future such estimates and assumptions, which are based on 
management’s best judgement at the date of preparation of the 
financial statements, deviate from actual circumstances, the original 
estimates and assumptions will be modified as appropriate in the year 
in which circumstances change. Where necessary, the comparatives 
have been reclassified or extended from the previously reported 
results to take into account presentational changes.
Impairment of goodwill, intangible assets and investments 
Where there is an indication that the carrying value of items in 
goodwill, intangible assets and investments may have been 
impaired through events or changes in circumstances a review will 
be undertaken of the recoverable amount of those assets based 
on a value in use calculation which will involve estimates and 
assumptions to be made by management (see note 13). 
Tax losses
As the Group is now profitable and recovery of the tax losses is 
likely over the coming periods, a deferred tax asset of £0.7m, 
representing the tax value of the losses carried forward has been 
recognised in the Consolidated Financial Statements.
Clarity Annual Report     29 
Notes to the Consolidated  
Financial Statements  Notes to the Consolidated Financial Statements cont
7 Operating segments 
For management reporting purposes, the Group is organised into four separate divisions, each with income streams that can carry different 
risks and rewards. The four income streams are:
revenue from Retail operations; •	
revenue from Entertainment operations; •	
revenue from Leisure operations; and •	
revenue from Hospitality operations. •	
Segmental information for continuing operations with regard to these four income streams is presented herewith.
Following the restructure of the UK trading companies, into a single entity (Clarity Retail Systems Limited) all UK operating costs were 
apportioned to cost centres.  These costs were then allocated to the divisions via the Group cost allocation.  This is a different  
approach to previous years, where separate reporting entities made up the divisions for segment reporting, which then received a smaller 
allocation of Group costs.  It is no longer possible to split the restructured UK statement of financial position between the separate divisions 
and as the management reporting only details operating profit levels of the divisions, no statement of financial position segment information 
for the year ended 31 March 2010 is reported here. 
 
for the year ended 31 March 2010
Retail
2010  
£’000
Entertainment
2010  
£’000
Leisure
2010  
£’000
Hospitality
2010  
£’000
Group 
2010  
£’000
Consolidated 
2010  
£’000
 
Revenue 10,081 4,731 1,477 2,792 - 19,081
Gross profit 8,727 3,400 1,251 2,183 - 15,561
Depreciation (43) (17) (12) (23) - (95)
Amortisation of software rights (406) - - - (10) (416)
Finance income - - - - 49 49
Finance costs - - - - (103) (103)
Taxation credit - - - - 556 556
Clarity Annual Report     30 
Notes to the Consolidated  
Financial Statements   
for the year ended 31 March 2009
Retail
2009 
£’000
Entertainment
2009  
£’000
Leisure
2009  
£’000
Hospitality
2009  
£’000
Group 
2009  
£’000
Consolidated 
2009  
£’000
 
Revenue 9,178 4,624 1,232 2,649 - 17,683
Gross profit 8,200 3,253 1,023 2,071 - 14,547
Non recurring reorganisation 
costs
- - - - (426) (426)
Depreciation (25) (9) (2) (71) - (107)
Amortisation of software rights (390) (6) - (250) - (646)
Finance income - - - - 617 617
Finance costs - - - - (804) (804)
Taxation credit - - - - 6 6
The Group has taken advantage of early adoption for the amendment to IFRS 8 “Operating segments”.
Geographic segments
Below is an analysis of revenue by geographic location.
for the year ended 31 March 2010
 
2010  
£’000
2009 
£’000
 
United Kingdom 9,373 9,792
Europe (excluding United Kingdom) 3,340 2,566
United States of America 6,087 5,083
Rest of World 281 242
 19,081 17,683
Included within the revenue analysis above are £2,950,000 in relation to goods for resale (2009: £2,035,000) and £12,528,000 
(2009: £12,285,000) in relation to services.
Clarity Annual Report     31 
Notes to the Consolidated  
Financial Statements  Notes to the Consolidated Financial Statements cont
8 Operating profit from continuing operations for the year 
This is stated after charging/(crediting):
for the year ended 31 March 2010
Year ended
31/03/10  
£’000
Year ended
31/03/09  
£’000
 
Depreciation of property, plant and equipment - owned assets 87 99
Depreciation of property, plant and equipment - leased assets 8 8
Amortisation of software rights 406 646
Amortisation of other assets 10 -
Auditor’s remuneration
Fees payable to the Group’s auditor for the audit of the Company’s annual accounts 17 17
Fees payable to the Company’s auditors and its associates for other services:
Audit of the Company’s subsidiaries, pursuant to legislation 48 48
Tax services 21 21
Corporate finance services - -
All other services 31 32
Rentals payable under operating leases - property 396 514
Rentals payable under operating leases - other 71 120
Profit/(loss) on sale of property, plant and equipment - (25)
Profit/(loss) on sale of discontinued operations - 333
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 2010 was £212,000 (2009: £190,167), see note 9. 
Research and development expenditure incurred during the year was approximately £4,906,000 (2009: £3,564,000). 
Included within the amortisation charge to the Consolidated Income Statement is £10,000 (2009: £nil) in relation to the amortisation of an 
asset held within other current assets.
Clarity Annual Report     32 
Notes to the Consolidated  
Financial Statements   
9 Employment costs 
Employment costs (including Executive Directors) were as follows: 
for the year ended 31 March 2010
Year ended
31/03/10  
£’000
Year ended
31/03/09  
£’000
 
Wages and salaries 8,204 8,311
Social security costs 911 876
Pension costs 222 202
 9,337 9,389
Year ended
31/03/10 
Number 
Year ended
31/03/09 
Number 
 
Average monthly number of persons employed (including Executive Directors):
Production 108 89
Sales 21 14
Administration 20 29
Installation and support 20 58
 169 190
Employee costs were charged to operating costs.
Discontinued operations accounted for nil average employees (2009: 21).
The remuneration of the individual Directors was as follows:
Year ended
31/03/10 
£’000
Year ended
31/03/09 
£’000 
 
Salaries and fees
Executive Directors:
KR Smith 273 234
A Houldsworth 218 144
C Ford (appointed 17 June 2009, resigned 26 January 2010) 105 -
Non-executive Directors:
Sir C Chandler 37 25
S Bellamy (retired 18 March 2010) 26 25
J O’Hara (retired 31 August 2009) 45 45
 704 473
Salary and fees are inclusive of car allowances, additional fees and bonuses attributable to the year.
In addition to the salary and fees above, travel and other expenses were reimbursed to the Directors as follows: KR Smith £7,902;  
A Houldsworth £4,922; C Ford £2,750; Sir C Chandler £310; J O'Hara £5,486; and S Bellamy £671.
Included in the remuneration above, the Group made contributions in the year to personal pension plans for KR Smith, A Houldsworth  
and C Ford in the sums of £61,219, £3,000 and £5,906 respectively.
The amount detailed above for C Ford, includes payments of £20,000 made under a compromise agreement for loss of office, which was 
implemented on resignation. 
Clarity Annual Report     33 
Notes to the Consolidated  
Financial Statements  Notes to the Consolidated Financial Statements cont
10 Finance income and costs 
for the year ended 31 March 2010
Year ended
31/03/10  
£’000
Year ended
31/03/09  
£’000
 
Finance income:
Bank interest receivable and similar income on cash and cash equivalents 49 617
 49 617
Finance costs:
Interest on bank loans and overdrafts repayable within five years 99 764
Finance leases and hire purchase interest 2 8
Loan note interest - 6
Other interest 2 26
 103 804
11 T axation 
Current tax expense
for the year ended 31 March 2010
Year ended
31/03/10  
£’000
Year ended
31/03/09  
£’000
 
UK taxation - current year - (304)
UK adjustments in respect of previous years 36 -
Overseas taxation - current year 383 298
Overseas adjustments in respect of prior years (254) -
Deferred tax benefit from previously unrecognised tax losses (721) -
Total tax credit for the year (556) (6)
Clarity Annual Report     34 
Notes to the Consolidated  
Financial Statements   
Reconciliation of effective tax rate
for the year ended 31 March 2010
Year ended
31/03/10  
£’000
Year ended
31/03/09  
£’000
 
Profit/(loss) on ordinary activities before taxation 1,439 212
Profit on ordinary activities before taxation multiplied by the standard rate of corporation 
tax in the UK of 28% (2009: 28%) 
403 59
Effects of:
Difference between depreciation and capital allowances 11 15
Non deductible items 62 348
Utilisation of tax losses not previously recognised (152) -
Foreign tax rates 80 46
Enhanced relief for research and development (147) (360)
Losses carried forward 126 25
Amortisation - (17)
Chargeable gains adjustment - (122)
Tax losses not previously recognised as a deferred tax asset (721) -
Adjustments to prior year (218) -
Total taxation reported in the consolidated financial statements (556) (6)
Effective tax rate (38.6%) (2.8)%
Domestic income tax is calculated at 28% (2009: 28%) of the estimated assessable profit for the year. 
The effective tax rate is (39%) (2009: (3%)). This is lower than the standard UK rate of 28% due to receipt of overseas tax refunds previously 
provided against, differences in overseas tax rates and the recognition of UK tax losses. 
Clarity Annual Report     35 
Notes to the Consolidated  
Financial Statements  Notes to the Consolidated Financial Statements cont
12 Earnings/(loss) per share 
The calculations of earnings/(loss) per share are based on the profit/(loss) after tax for the financial year and the following numbers of shares:
for the year ended 31 March 2010
Year ended
31/03/10
Number
Year ended
31/03/09
Number 
 
Weighted average number of shares:
For basic profit/(loss) per share 35,127,593 32,029,205
For diluted profit/(loss) per share 35,127,593 32,029,205
Year ended
31/03/10  
£’000
Year ended
31/03/09  
£’000
 
Earnings for the year from continuing operations 1,995 471
Loss for the year from discontinued operations - (253)
Earnings/(loss) for the year attributable to the owners of the parent company 1,995 218
Earnings/(loss) per share:
Basic and diluted - continuing operations 5.68p 1.47p
Basic and diluted - discontinued operations - (0.79)p
 5.68p 0.68p
The employee share options are considered non dilutive due to the exercise price being significantly higher than the current share price.
Clarity Annual Report     36 
Notes to the Consolidated  
Financial Statements   
13 Intangible assets 
as at 31 March 2010
Software rights 
£’000
Goodwill 
£’000
Total 
£’000
 
Cost:
At 1 April 2008 3,564 17,247 20,811
Additions during the year - 84 84
At 31 March 2009 and 1 April 2009 3,564 17,331 20,895
Adjustment to cost during the year - (263) (263)
At 31 March 2010 3,564 17,068 20,632
Amortisation and impairment:
At 1 April 2008 2,106 8,441 10,547
Amortisation for the year 646 - 646
At 31 March 2009 and 1 April 2009 2,752 8,441 11,193
Amortisation for the year 406 - 406
At 31 March 2010 3,158 8,441 11,599
Net book value:
At 31 March 2010 406 8,627 9,033
At 31 March 2009 812 8,890 9,702
The Board has reviewed the carrying value of goodwill, and has determined no impairment is required in the current year (2009: £nil 
impairment).  The Group tests goodwill annually or more frequently if there are indications that goodwill might be impaired.
The recoverable amounts of the Cash Generating Units (CGUs) are determined from value in use calculations. The key assumptions for the 
value in use calculations are those regarding the discount rates, growth rates and expected changes to selling prices and costs during the 
period under review. Management estimates discount rates using pre-tax rates that reflect current market assessments of the time value of 
money and the risks specific to the CGUs.
The goodwill is attributable to the Retail operating segment.
The Group prepares cash flow forecasts derived from the most recent financial budgets approved by management for the next five years 
and extrapolates cash flows for the following fifteen years based on an estimated growth rate of 2%. Management consider the use of these 
periods as appropriate as it is felt this reflects the value of goodwill over its estimated useful life.
The key assumptions used to prepare the financial budgets are based on historical experience, which includes the Group’s achievement 
against budget.  Other information relating to current trading performance, which includes business statistics produced on a daily and 
monthly basis, allow projections to be based on the most up to date information.  Projections are also based on current industry knowledge 
and trends.
The rate used to discount the forecast pre-tax cash flows is 10% and represents the Directors' current best estimate of the weighted 
average cost of capital (“WACC”).
Included within the total amortisation charge in the Consolidated Income Statement is £10,000 (2009: £nil) in relation to the amortisation of 
an asset held within other current assets. 
Clarity Annual Report     37 
Notes to the Consolidated  
Financial Statements  Notes to the Consolidated Financial Statements cont
14 Property, plant and equipment 
as at 31 March 2010
Leasehold
property
£'000
Office 
equipment
£’000
Motor 
vehicles 
£’000
T otal 
£’000
 
Cost:
At 1 April 2008 44 970 113 1,127
Additions - 61 - 61
Disposals - (592) (74) (666)
Exchange Movement - 35 - 35
At 31 March 2009 and 1 April 2009 44 474 39 557
Additions - 103 11 114
Exchange movement - (5) - (5)
At 31 March 2010 44 572 50 666
Depreciation:
At 1 April 2008 17 729 30 776
Charge for year 9 82 16 107
Disposals - (556) (18) (574)
At 31 March 2009 and 1 April 2009 26 255 28 309
Charge for year 10 71 14 95
At 31 March 2010 36 326 42 404
Net book value:
At 31 March 2010 8 246 8 262
At 31 March 2009 18 219 11 248
Depreciation is included in operating expenses.
Included within the net book value of £262,000 is £3,000 (2009: £11,000) 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 £8,000 (2009: £8,000). 
Agreements in respect of leasehold properties are short leaseholds.
Clarity Annual Report     38 
Notes to the Consolidated  
Financial Statements   
15 Inventories 
as at 31 March 2010
As at
31/03/10  
£’000
As at
31/03/09  
£’000
 
Goods for resale 155 260
 155 260
Included within the cost of sales figure in the Consolidated Income Statement is £2,002,525 (2009: £1,534,229) relating to 
inventories expensed in the year.
16 Trade and other receivables 
as at 31 March 2010
As at
31/03/10  
£’000
As at
31/03/09  
£’000
 
Trade receivables 3,570 2,762
Other receivables 512 786
Prepayments and accrued income 1,357 822
 5,439 4,370
Standard credit terms for trade receivables are 30 days from invoice date, although certain credit terms are contract specific. The Directors 
consider that the carrying amount approximated to their fair value. Gross trade receivables (including VAT) at the year end were £3,630,000 
(2009: £2,935,000).  A bad debt reserve of £60,000 (2009: £173,000) is provided against impaired debts. The value of debts which were past 
due but not impaired at the year end was £683,000 (2009: £1,013,000).
As at
31/03/10  
£’000
As at
31/03/09  
£’000
 
The ageing of the past due debts is as follows:
1 month 330 331
2 months 148 378
3 months 42 23
4 months + 163 281
 683 1,013
The bad debt reserve of £60,000 (2009: £173,000) relates to debts that are 4 months +.
As at
31/03/10  
£’000
As at
31/03/09  
£’000
 
 The trade receivables are held in the following currencies:
GB Sterling 2,031 1,221
US Dollar 1,375 1,223
Euro 136 288
NZ Dollar 28 30
 3,570 2,762
Clarity Annual Report     39 
Notes to the Consolidated  
Financial Statements  Notes to the Consolidated Financial Statements cont
17 Current liabilities: other payables 
as at 31 March 2010
As at
31/03/10  
£’000
As at
31/03/09  
£’000
 
Other payables 104 171
Other taxes and social security 549 256
Accruals and deferred income 2,094 2,370
 2,747 2,797
18 Bank loans and overdrafts 
as at 31 March 2010
As at
31/03/10  
£’000
As at
31/03/09  
£’000
 
Due between one and two years 400 400
Due between two and five years 300 700
Associated finance costs (11) (15)
 689 1,085
Due within one year or less 400 400
 1,089 1,485
Bank borrowings are secured by charges over the assets of the Parent Company and its subsidiaries and by UK cross guarantees.
Interest is paid on the fixed term loan at 3% above LIBOR and interest on the overdraft is paid at 2.5% above Bank of Scotland base rate. 
The next facilities review is scheduled for the end of June 2010.  At the date of the statement of financial position the Group’s unused 
overdraft facility was £1,000,000.
Clarity Annual Report     40 
Notes to the Consolidated  
Financial Statements   
19 Liabilities: capital instruments 
Liabilities include finance capital which is due for repayment as follows:
as at 31 March 2010
As at
31/03/10  
£’000
As at
31/03/09  
£’000
 
Due within one year or less, or on demand - loan notes 102 129
 102 129
During the year ended 31 March 2008, the deferred Earn Out element of the MATRA Systems (Holdings) Limited acquisition was agreed at 
£4,566,000.  This amount is satisfied by the issue of Ordinary Shares of 25p to the value of £500,000 at the time of acquisition, the further 
issue of Ordinary Shares of 25p to the value of £1,783,000 at 16 October 2009 and by ongoing cash payments totalling £2,283,000, to be 
paid by February 2012.  In order to settle the cash element the Company makes regular payments into an escrow cash account and issues 
the Vendors with matching Loan Notes.  At any time the Vendors may redeem such loan notes for cash up to the balance held in the escrow 
cash account. The Company has the ability to suspend the issue of the Loan Notes if, in the reasonable opinion of the Board, the Company 
does not have sufficient working capital to do so.  The balance of unredeemed loan notes at 31 March 2010 totalled £102,000 (2009: 
£129,000).  At the year end a balance of £1,403,000 (2009: £1,923,000) was outstanding on the cash element of the deferred Earn Out. 
20 Obligations under finance leases 
Future commitments under finance lease agreements are as follows:
as at 31 March 2010
As at
31/03/10  
£’000
As at
31/03/09  
£’000
 
Due within one year or less 15 10
Due between one and two years - 15
 15 25
Less future finance charges (1) (3)
Present value of lease obligations 14 22
Less amount due for settlement within 12 months (14) (8)
Amount due for settlement after 12 months - 14
The hire purchase and finance lease liabilities are disclosed gross and are secured over the assets to which they relate.
The fair value of the Group’s hire purchase and lease obligations approximates to their carrying amount.
Clarity Annual Report     41 
Notes to the Consolidated  
Financial Statements  Notes to the Consolidated Financial Statements cont
21 Commitments under operating leases 
Operating lease arrangements where the Group is the lessee relate to property, vehicles and equipment.
At the date of the statement of financial position the Group had outstanding commitments for future minimum lease payments under non 
cancellable operating leases which fall due as follows: 
as at 31 March 2010
As at
31/03/10  
£’000
As at
31/03/09  
£’000
 
Due within one year 374 382
Due after one year but no more than five years 238 352
More than five years - -
 612 734
22 Deferred taxation 
As the Group is now profitable and recovery of the tax losses is likely over the coming periods, a deferred tax asset, representing the tax 
value of the losses carried forward has been recognised in the Consolidated Financial Statements. The comparative value was unprovided 
for in last years Consolidated Financial Statements:
as at 31 March 2010 
As at
31/03/10  
£’000
As at
31/03/09  
£’000
 
Tax losses available (721) -
Unrealised tax losses available (315) (1,150)
23 Share capital 
as at 31 March 2010
As at
31/03/10 
£’000
As at
31/03/09  
£’000
 
Authorised share capital:
44,000,000 (2009: 44,000,000) ordinary shares of £0.25 each 11,000 11,000
Allotted, called up and fully paid:
At 1 April 2009 8,007 8,007
Issue of ordinary shares 1,703 -
At 31 March 2010 (38,841,805 (2009: 32,029,305) ordinary shares of £0.25 each) 9,710 8,007
During the year a total of 6,812,500 ordinary shares, representing a nominal share value of £1,703,125 were issued in a Placing at 40p per 
share on 16 October 2009 raising £2,725,000 before fees of £125,000. 
Clarity Annual Report     42 
Notes to the Consolidated  
Financial Statements   
24 Employee benefit schemes 
On 5 May 2004 an Approved EMI Share Option Scheme was established. On 24 May 2004 537,375 options were issued 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 EMI Share Option scheme. All the options are exercisable between 24 May 2007 and 24 May 
2014 and have an exercise price of 66.5p. No further options were issued in this scheme in the year.
At the date of the statement of financial position none of the option holders were Directors.
Following a review of the share option scheme it has been determined that the valuation is not material for the purposes of these accounts. 
Senior executive option scheme 2009
The scheme was approved at the Company’s AGM on 24 July 2009.  An Employee Benefit Trust (“EBT”) was established on 23 March 2010 
as part of this scheme.
The EBT subscribed on 27 April 2010 for 1,730,510 new Ordinary Shares of 25p each ("Shares") in relation to awards to KR Smith (865,255 
shares) and A Houldsworth (865,255 shares), at 39p per share, which was the mid-market price at close of business on 26 April 2010.
A new approved EMI share option scheme was also established on the 23 March 2010 and on the 27 April 2010 options over 599,998 
Ordinary Shares of 25p each were awarded to KR Smith (299,999 shares) and A Houldsworth (299,999 shares).
Clarity Commerce Solutions plc share incentive plan
The above plan was established on 9 February 2010 and subsequently approved by HM Revenue & Customs on 3 March 2010. As part of 
this scheme The Clarity Commerce SIP Trust was established (“SIP Trust”).
The scheme was established to facilitate the acquisition and holding of shares by and for the benefit of employees pursuant to the plan 
rules.  At the date of the statement of financial position, no shares were acquired by the SIP Trust.
25 Acquisitions
On 28 May 2010 the Group acquired 80% of the business and assets of Cyntergy Services Ltd (in administration). Cyntergy Services 
Ltd provide software support and training services. As part of the acquisition Clarity has taken on a number of customer contracts and 
approximately 80 employees. Cash consideration was £150,000 and the acquired assets and liabilities are set out in the table below. 
Carrying value 
as at
28/05/10
£'000
Fair Value 
adjustment
£’000
Provisional  
Fair Value to  
the Group
£’000
 
Financial assets:
Property, plant and equipment 24 (19) 5
Trade receivables 276 - 276
 300 (19) 281
Financial liabilities:
Deferred income 93 - 93
Other payables 218 - 218
 311 - 311
Net liabilities (11) (19) (30)
Goodwill 180
Cash consideration 150
The goodwill resulting from the aquisition is attributable to the future synergies of combining the business into the group.
Clarity Annual Report     43 
Notes to the Consolidated  
Financial Statements  Notes to the Consolidated Financial Statements cont
26 Financial instruments 
Capital risk management 
The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximising the return to 
stakeholders through the optimisation of the debt and equity balance. The capital structure of the Group consists of debt, which includes 
the borrowings, cash and cash equivalents and equity attributable to equity holders of the parent, comprising issued capital, reserves and 
retained earnings.
Gearing ratio 
The Group regularly reviews its gearing ratio. The Group's net debt position has reduced in the year.
Externally imposed capital requirement 
The Group is not subject to externally imposed capital requirements.
Significant accounting policies 
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the 
basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are 
disclosed in note 5 to the financial statements. 
Categories of financial instruments 
as at 31 March 2010
Carrying value  
as at 31/03/10  
£’000
Carrying value  
as at 31/03/09  
£’000
 
Financial assets:
Loans and receivables:
Trade receivables 3,570 2,762
Other receivables 512 786
Cash and cash equivalents 2,347 1,951
 6,429 5,499
Financial liabilities:
Financial liabilities at amortised cost:
Trade payables 1,496 2,264
Other payables, taxes and social security 653 427
Borrowings due within one year 400 400
Borrowings due after one year 700 1,100
 3,249 4,191
The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by continuously 
monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. As part of this monitoring the 
Group ensures that the financial liabilities due to be paid can be met by existing cash and cash equivalents.
Fair value of financial assets and liabilities 
The Directors believe that the fair value and the book value of financial assets and financial liabilities is not materially different. Trade 
payables and receivables have a remaining life of less than one year so their value on the statement of financial position is considered to be 
a fair approximation to fair value.
Financial risk management objectives 
The Group monitors and manages the financial risks relating to the financial instruments held. The principal risks include currency risk (on 
financial assets and trade payables), credit risk (on financial assets) and interest rate risk (on financial assets and borrowings). These risks 
are discussed in further detail below.
It is not Group policy to trade in derivative instruments.
Market risk 
The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. 
The Group does not prepare a value-at-risk (VaR) analysis of the market risk exposures faced by the Group. Therefore, in accordance with 
IFRS 7 ‘Financial Instruments: Disclosures’, sensitivity analysis of each type of market risk is presented below.
Clarity Annual Report     44 
Notes to the Consolidated  
Financial Statements   
Foreign currency risk management 
The Group undertakes certain transactions denominated in foreign currencies. Hence, exposures to exchange rate fluctuations arise.
The carrying amounts of the Group’s material foreign currency denominated monetary assets and monetary liabilities at the reporting date 
are as follows:
as at 31 March 2010
Liabilities as at 
31/03/10  
£’000
Liabilities as at
31/03/09  
£’000
Assets as at 
31/03/10  
£’000
Assets as at 
31/03/09  
£’000
 
Euro (58) (944) 1,004 1,978
US dollar (532) (213) 1,969 1,797
NZ Dollar (13) (19) 66 46
During the year, the Group used forward contracts in both Euro’s and US Dollar, to protect against exchange rate risk.  These contracts were 
put in place to protect the budgeted profit levels, of the US and European operations, against fluctuations in the exchange rates.  All forward 
contracts were settled before the year end.
Foreign currency sensitivity analysis 
The following table details the Group’s sensitivity to a 10% increase and decrease in sterling against the relevant foreign currencies. The 
sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period 
end for a 10% change in foreign currency rates. A positive number below indicates an increase in profit and other equity where sterling 
strengthens 10% against the relevant currency. For a 10% weakening of sterling against the relevant currency, there would be an equal and 
opposite impact on profit and other equity, and the balances below would be negative. The sensitivities below are based on the exchange 
rates at the date of the statement of financial position used to convert the asset or liability to sterling. Therefore, the rate of exchange at the 
date of the statement of financial position represents the best method of evaluating foreign currency exchange rates and losses arising on 
the Group’s financial assets and liabilities.
for the year ended 31 March 2010
Year ended
31/03/10  
£’000
Year ended
31/03/09  
£’000
 
Profit/(loss) impact:
10% increase in US dollar exchange rate against pound sterling (131) (144)
10% decrease in US dollar exchange rate against pound sterling 160 176
 
10% increase in Euro exchange rate against pound sterling (86) (94)
10% decrease in Euro exchange rate against pound sterling 105 115
 
10% increase in NZ dollar exchange rate against pound sterling (5) (2)
10% decrease in NZ dollar exchange rate against pound sterling 6 3
There are no material foreign exchange differences arising on the retranslation of financial costs and liabilities. Accordingly, no analysis of the 
sensitivities is presented. The fluctuations from 2009 are as a result of changes in the Group’s working capital at the respective date of the 
statement of financial position.
In management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk as the year end exposure is higher 
than in the year. This is due to the high sales volume that takes place in the months leading up to the year end and as a result the year end 
receivables held in foreign currency are higher than during the year.
Clarity Annual Report     45 
Notes to the Consolidated  
Financial Statements  Notes to the Consolidated Financial Statements cont
Interest rate risk management 
The Group is exposed to interest rate risk as the Group has a loan linked to LIBOR rate, and earns and pays interest on cash balances linked 
to base rate interest.
No sensitivity analyses have been presented on the basis that modest changes in interest rates (deemed to be a 0.5% increase or decrease) 
do not have a material impact on the Group.
Liquidity risk management
The Group closely monitors its access to bank and other credit facilities in comparison to its outstanding commitments on a regular basis to 
ensure that it has sufficient funds to meet the obligations of the Group as they fall due.
The Board receives regular debt management forecasts which estimate the cash inflows and outflows over the next twelve months, so that 
management can ensure that sufficient funding is in place as it is required.
Credit risk management 
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group 
faces exposure to credit risk on its trade receivables and cash equivalents.
Please refer to note 16 for further details on trade receivables.
In terms of trade receivables, the Group does not have any significant credit risk exposure to any single counterparty or any group of 
counterparties having similar characteristics. The Group defines counterparties as having similar characteristics if they are connected 
entities. Concentration of credit did not exceed 5% of gross monetary assets at any time during the year.
27 Discontinued operations 
During the previous financial year the Group announced the results of its strategic review, where it indicated it would undertake an 
operational restructuring (which included the closure of Clarity Commerce Solutions Inc), as well as seek to divest itself of two service 
businesses (Cyntergy Services Limited and the trade and assets of Romulus Enterprises Limited).
The results of the discontinued operations, which were included in the consolidated income statement for the year ended 31 March 2009, 
are as follows:
for the year ended 31 March 2010
Year ended
31/03/10  
£’000
Year ended
31/03/09  
£’000
 
Revenue - 881
Expenses - (1,249)
Statement of financial position write off - (218)
Loss before taxation - (586)
Attributable tax expense - -
Total loss for the year - (586)
Revenue includes inter-company trading of £nil (2009: £43,000).
The cash outflow attributable to the operating activities of the discontinued operations was £nil (2009: £115,000) and outflows in respect of 
investing activities were £nil (2009: £nil).
Clarity Annual Report     46 
Notes to the Consolidated  
Financial Statements   
28 Profit on disposal of discontinued operations 
for the year ended 31 March 2010
Year ended
31/03/10  
£’000
Year ended
31/03/09  
£’000
 
Consideration received - 997
Less net assets at date of completion - (515)
Less transaction costs and other increases in provisions - (149)
Gain on sale before taxation - 333
Attributable tax expense - -
Gain on sale - 333
Consideration:
Satisfied in cash - 897
Deferred payment to be satisfied in cash - 100
Consideration at date of completion - 997
Net assets at completion:
Goodwill - 500
Property, plant and equipment - 15
Net assets at date of completion - 515
Clarity Annual Report     47 
Notes to the Consolidated  
Financial Statements  The notes on pages 49 to 54 form part of these financial statements.
Parent Company Accounts
Parent Company Balance Sheet 
as at 31 March 2010         
 Notes
As at
31/03/10  
£’000
As at
31/03/09  
£’000
 
Fixed assets:
Investments in subsidiary undertakings 4 22,921 9,906
Current assets:
Debtors 5 1,258 2,260
Cash at bank and in hand 54 -
 1,312 2,260
Creditors: amounts falling due within one year 6 (3,594) (3,736)
Net current liabilities (2,282)
Total assets less current liabilities 20,639
Creditors: amounts falling due after more than one year 7 (1,402)
Net assets 19,237 4,209
Capital and reserves:
Called up share capital 11 9,710 8,007
Share premium account 14 8,473 7,576
Profit and loss account 14 1,054 (11,374)
Shareholders’ funds 14 19,237 4,209
The financial statements on pages 48 to 54 were approved and authorised by the Directors on 28 June 2010 and were signed on 28 June 
2010 on behalf of the Board by:  
Ken Smith BA CA Chief Executive Officer 
28 June 2010
Clarity Annual Report     48 
Parent Company Accounts 
(1,476)
8,430
(4,221)
Company Number 3914814  Notes to the Parent Company Accounts 
1 Accounting policies 
Basis of accounting 
The separate financial statements of the Company are presented 
as required by the Companies Act 2006. They have been prepared 
under the historical cost convention and in accordance with 
applicable United Kingdom Accounting Standards and law.
The principal accounting policies are summarised below. They have 
all been applied consistently throughout the year and the preceding 
year.
Consolidated financial statements of the Company and its 
subsidiaries are prepared under IFRS and form part of this  
Annual Report.
Investments 
Fixed asset investments in subsidiaries are shown at cost less 
provision for impairment.
For investments in subsidiaries acquired for consideration, including 
the issue of shares, cost is measured by reference to the nominal 
value only of the shares issued. Any premium is ignored. 
Taxation 
Current taxation is provided at amounts expected to be paid or 
recovered using tax rates and laws that have been enacted or 
substantively enacted by the balance sheet date.
Deferred taxation is provided in full on timing differences which 
result in an obligation at the balance sheet date to pay more tax, 
or a right to pay less tax, at a future date, at rates expected to 
apply when they crystallise based on current tax rates and law. 
Timing differences arise from the inclusion of items of income and 
expenditure in taxation computations in periods different from 
those in which they are included in financial statements. Deferred 
tax assets are recognised to the extent that it is regarded as more 
likely than not that they will be recovered. Deferred tax assets and 
liabilities are not discounted.
Financial liabilities and equity 
Financial liabilities and equity instruments are classified according 
to the substance of the contractual arrangements entered into. An 
equity instrument is any contract that evidences a residual interest in 
the assets of the Company after deducting all of its liabilities.
Equity instruments issued are recorded at the proceeds received, 
net of direct issue costs.
Leased assets 
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.
2 Profit and loss account 
As permitted by section 408 of the Companies Act 2006, the profit 
and loss account of the Parent Company is not presented as part of 
these financial statements.
The parent company's retained profit for the year amounted to 
£12,428,000 (2009: retained loss £1,410,000).
3 Dividends 
No dividends are payable in the year (2009: £nil).
Clarity Annual Report     49 
Notes to the Parent  
Company Accounts   
4 Investments in subsidiary undertakings 
as at 31 March 2010
As at
31/03/10  
£’000
As at
31/03/09  
£’000
 
At 1 April 2009 9,906 9,822
Additions in the year 90 84
Adjustment to cost of acquisition (263) -
Acquisition of additional shares in subsidiary 15,000 -
Impairment provision (1,812) -
At 31 March 2010 22,921 9,906
The subsidiaries included in the consolidated financial statements for the whole year, unless stated below, are:
•	 Clarity	Retail	Systems	Limited	-	pr ovider	of	IT	solutions	to	the	hospitality	sector
•	 Micr otrain	Limited	-	non-trading
•	 Flex	Systems	Limited	-	pr ovider	of	IT	solutions	to	the	leisur e	sector
•	 Vision	Solutions	Limited	-	non-trading
•	 Pacer	Cats	(UK)	Limited	-	pr ovider	of	IT	solutions	to	the	cinema	and	stadia	markets
•	 Clarity	Commer ce	Solutions	Inc.	(US)	-	pr ovider	of	IT	solutions	to	the	cinema	and	stadia	markets
•	 CCS	SARL	(Pacer	Cats	-	France)	-	pr ovider	of	IT	solutions	to	the	cinema	and	stadia	markets
•	 CCS	Co	&	Co	OHG	(Pacer	Cats	-	Germany)	-	pr ovider	of	IT	solutions	to	the	cinema	and	stadia	markets
•	 Bar on	LRMS	Limited	-	pr ovider	of	IT	solutions	to	the	golf	and	leisur e	spa	markets
•	 MA TRA	Systems	(Holdings)	Limited	-	holding	company
•	 MA TRA	Systems	(UK)	Limited	-	pr ovider	of	IT	solutions	to	the	r etail	sector
•	 MA TRA	Systems	Inc.	(US)	-	pr ovider	of	IT	solutions	to	the	r etail	sector
•	 T otal	Hospitality	Solutions	Limited	-	pr ovider	of	PMS	and	r elated	softwar e	
•	 T otal	Hospitality	Solutions	(NZ)	Limited	-	pr ovider	of	PMS	and	r elated	softwar e
All subsidiary companies are wholly owned and registered in England unless otherwise stated.
The reduction to the cost of acquisition was due to the settlement of the deferred Earn Out in MATRA Systems (Holdings) Limited as shown 
in note 9.
The consideration paid for the additional shares in subsidiary was through a capitalisation of the inter company account.
Notes to the Parent Company Accounts cont
Clarity Annual Report     50 
Notes to the Parent  
Company Accounts   
5 Debtors 
as at 31 March 2010 
As at
31/03/10  
£’000
As at
31/03/09  
£’000
 
Amounts owed by subsidiary undertakings 1,086 1,970
Other debtors 119 264
Prepayments and accrued income 53 26
 1,258 2,260
6 Creditors: amounts falling due within one year 
as at 31 March 2010
As at
31/03/10  
£’000
As at
31/03/09  
£’000
 
Bank loans and overdrafts (note 8) 400 742
Loan notes (note 9) 102 129
Trade creditors 73 239
Amounts due to subsidiary undertakings 2,223 1,913
Other creditors 4 15
Accruals and deferred income 102 128
Deferred consideration (note 9) 690 570
 3,594 3,736
7 Creditors: amounts falling due after more than one year 
as at 31 March 2010
As at
31/03/10  
£’000
As at
31/03/09  
£’000
 
Bank loans (note 8) 689 1,085
Deferred consideration (note 9) 713 3,136
 1,402 4,221
Clarity Annual Report     51 
Notes to the Parent  
Company Accounts  Notes to the Parent Company Accounts cont
8 Bank loans and overdrafts 
as at 31 March 2010
As at
31/03/10  
£’000
As at
31/03/09  
£’000
 
Due within one year or less 400 742
Due between one and two years 400 400
Due between two and five years 300 700
Associated finance costs (11) (15)
 1,089 1,827
Interest is paid on the fixed term loan at 3% above LIBOR and interest on the overdraft is paid at 2.5% above Bank of Scotland base rate. 
The next facilities review is scheduled for the of end June 2010.
9 Creditors: capital instruments 
Creditors include finance capital which is due for repayment as follows:
as at 31 March 2010
As at
31/03/10  
£’000
As at
31/03/09  
£’000
 
Due within one year, or on demand - loan notes 102 129
 102 129
During the year ended 31 March 2008, the deferred Earn Out element of the MATRA Systems (Holdings) Limited acquisition was agreed at 
£4,566,000.  This amount is satisfied by the issue of Ordinary Shares of 25p to the value of £500,000 at the time of acquisition, the further 
issue of Ordinary Shares of 25p to the value of £1,783,000 at 16 October 2009 and by ongoing cash payments totalling £2,283,000, to be 
paid by February 2012.  In order to settle the cash element the Company makes regular payments into an escrow cash account and issues 
the Vendors with matching Loan Notes.  At any time the Vendors may redeem such loan notes for cash up to the balance held in the escrow 
cash account. The Company has the ability to suspend the issue of the Loan Notes if, in the reasonable opinion of the Board, the Company 
does not have sufficient working capital to do so.  The balance of unredeemed loan notes at 31 March 2010 totalled £102,000 (2009: 
£129,000).  At the year end a balance of £1,403,000 (2009: £1,923,000) was outstanding on the cash element of the deferred Earn Out.
10 Commitments under operating leases 
At 31 March 2010 the Company had annual commitments under non-cancellable operating leases as set out below:
as at 31 March 2010
As at
31/03/10  
£’000
As at
31/03/09  
£’000
 
Expiring within one year: other - 4
Expiring after one year but no more than five years: land and buildings 105 105
 105 109
Clarity Annual Report     52 
Notes to the Parent  
Company Accounts   
11 Share capital 
as at 31 March 2010
As at
31/03/10  
£’000
As at
31/03/09  
£’000
 
Authorised share capital:
44,000,000 (2009: 44,000,000) ordinary shares of £0.25 each 11,000 11,000
Allotted, called up and fully paid:
At 1 April 2009 8,007 8,007
Issue of ordinary shares 1,703 -
At 31 March 2010 (38,841,805 (2009: 32,029,305) ordinary shares of £0.25 each) 9,710 8,007
During the year a total of 6,812,500 ordinary shares, representing a nominal share value of £1,703,125 were issued in a Placing at 40p per 
share on 16 October 2009 raising £2,725,000 before fees of £125,000.  
12 Employee benefit schemes 
On 5 May 2004 an Approved EMI Share Option Scheme was established. On 24 May 2004 537,375 options were issued 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 EMI Share Option scheme. All the options are exercisable between 24 May 2007 and 24 May 
2014 and have an exercise price of 66.5p. No further options were issued in this scheme in the year.
At the date of the statement of financial position none of the option holders were Directors.
Following a review of the share option scheme it has been determined that the valuation is not material for the purposes of these accounts. 
Senior executive option scheme 2009
The scheme was approved at the Company’s AGM on 24 July 2009.  An Employee Benefit Trust (“EBT”) was established on 23 March 2010 
as part of this scheme.
The EBT subscribed on 27 April 2010 for 1,730,510 new Ordinary Shares of 25p each ("Shares") in relation to awards to KR Smith (865,255 
shares) and A Houldsworth (865,255 shares), at 39p per share, which was the mid-market price at close of business on 26 April 2010.
A new approved EMI share option scheme was also established on the 23 March 2010 and on the 27 April 2010 options over 599,998 
Ordinary Shares of 25p each were awarded to KR Smith (299,999 shares) and A Houldsworth (299,999 shares).
Clarity Commerce Solutions plc share incentive plan
The above plan was established on 9 February 2010 and subsequently approved by HM Revenue & Customs on 3 March 2010. As part of 
this scheme The Clarity Commerce SIP Trust was established (“SIP Trust”).
The scheme was established to facilitate the acquisition and holding of shares by and for the benefit of employees pursuant to the plan 
rules.  At the date of the statement of financial position, no shares were acquired by the SIP Trust. 
Clarity Annual Report     53 
Notes to the Parent  
Company Accounts  Notes to the Parent Company Accounts cont
13 Related party transactions 
The Company is exempt from disclosing intra-group related party transactions under Financial Reporting Standard 8 by virtue of it being 
part of a wholly owned group.
14 Capital and reserves and reconciliation of shareholders' funds
as at 31 March 2010
Share capital  
£’000
Share premium 
account
£’000
Profit and loss 
account 
£’000
Total 
£’000
 
At 31 March 2009 and 1 April 2009 8,007 7,576 (11,374) 4,209
Issue of shares 1,703 897 - 2,600
Loss for the year - - (363) (363)
Impairment of investment in subsidiary - - (1,812) (1,812)
Dividends received - - 14,603 14,603
At 31 March 2010 9,710 8,473 1,054 19,237
Clarity Annual Report     54 
Notes to the Parent  
Company Accounts  Clarity Locations
United Kingdom
Basingstoke
Paterson House
Hatch Warren Farm
Hatch Warren, Basingstoke
RG22 4RA, UK
West Malling
Suite 9
60 Churchill Sq Business Centre
Kingshill, West Malling
ME19 4YU, UK
Fareham
Forum 3, Parkway
Solent Business Park
Whiteley, Fareham
PO15 7FH, UK
Market Harborough
Knoll House
Union Wharf
Market Harborough
LE16 7UW, UK
Rest of the World
France
18-20 rue Edouard Jacques
Paris, 75014, France
Holland
Stationsplein 91-105
s-Hertogenbosch
5211BM
The Netherlands
US Atlanta
3355 Breckinridge Blvd
Suite 120, Duluth
Georgia 30096-4989, USA
US Raleigh
3100 Spring Forest Road
Suite 125, Raleigh
North Carolina, 27616, USA
New Zealand
Unit D, Building 1
331 Rosedale Road, Albany
Auckland, New Zealand Annual Report  
2010
Clarity Commerce Solutions plc
Paterson House 
Hatch Warren Farm 
Hatch Warren, Basingstoke 
RG22 4RA, UK
In a challenging global environment, Clarity's  
multi-sector, multi-channel solutions provide  
the technology framework in which the end  
customer will buy more, visit often and  
remain loyal. 
Ken Smith, CEO