Fidelity Systems PLC

Annual Financial Report


Fidelity Systems plc

Chairman's Statement

for the year ended 28th February, 2011

It gives me great pleasure in presenting Fidelity's final results for the
financial year ended 28th February 2011.

Despite harsh trading conditions I am pleased to be able to report a
substantial increase in both turnover and pre-tax profit compared to the
previous year.

Results

The group achieved a turnover of £1,636,534 for the year to 28th February 2011
(compared to £1,389,446 for the previous financial year to 28th February 2010).

Profit on ordinary activities before taxation was £234,464 (compared to £
170,126 for the previous financial year to 28th February 2010)

We continue to have a strong balance sheet with a cash balance at the end of
the year of £1,079,788 after payment of the dividend and total net assets of £
1,567,321.

Earnings per shares rose to 0.62p compared to the previous year's 0.46p

The group's profit after taxation and dividends has been added to reserves.

Operating Review

We have continued to increase the number of higher education clients that we
supply and support, currently around 78 University and Colleges. I wish to
thank all Fidelity staff for their efforts in achieving this in what is still
an extremely harsh economic climate.

Together with our partner Magna Carta Chipcard Solutions BV, and despite having
serious competition, we successfully won the tender for a complete campus chip
card solution for the University of Keele. The total value of the contract was
in excess of £250k and the system, which was installed over the summer of 2010,
gave Keele facilities for cashless payments throughout the campus. A total of
forty-seven PC based touch screen EPoS terminals with smart card readers were
installed in all areas of the campus where cash was taken. These included the
bars, cafeteria's and shops. Seven wall mounted card revalue stations accepting
both cash and credit cards together with a web portal for card top up were also
supplied. A total of 20,000 Mifare cards were printed and distributed to
students and staff with a further twenty-seven card payment terminals linked to
printers and photocopiers.

We completed a project during the year that was a joint partnership with the
East Riding of Yorkshire Council for the development of software that measures
interventions with customers in leisure centre's. The project won funding
through the Regional Efficiency and Improvement program and has received
sponsorship from the NHS. This visual information system for the gym instructor
highlights the chances of the member leaving and prompts for an intervention.
The results have been encouraging with an increase in Gym member retention of
35%, increased satisfaction levels of customers and an increase in gym
memberships of 23%. This product seamlessly integrates with Fidelity's Leisure
Centre software Leisuretouch and was rolled out across the ERYC's estate of
thirteen leisure centre's.

The RFID health and safety checking system reported in my previous
announcements is now completed and after undergoing extensive field trials in a
live environment is now ready for the market. I hope to be able to report
further on this topic in my next trading statement.

Research & Product Development

As in previous years, R&D has continued during the last year with new and
updated software and products being introduced. A new significant product
developed over the last year was a Point of Sale in store advertising system
which complements Fidelity's GPOS touch screen software. This is capable of
being sold to many of our existing clients as an upgrade. A second new product
has been the addition of a people counting system linking to our existing
leisure centre software, Leisure Touch. These have been installed at the
entrance and exits of playgrounds and country parks to give the client accurate
headcounts for users of the facility.

Interim Dividend

I was pleased to be able to announce that an interim dividend of 0.25p net per
10p ordinary share was to be paid on Friday 7th May 2010.

Post Year End

The majority of our clients have by tradition largely been in the higher
education and public sectors. However in the latter part of 2010 and at the
time of writing (May 2011) we have been awarded contracts for complete
management systems by a number of new verticals.

Two large EPoS catering systems have been installed in Cork, Southern Ireland
for Apple's European head office and manufacturing site and also at the Johnson
and Johnson factory and offices. These will integrate with the Magna Carta
cashless payment solution and both were installed post year end.

We have added two new clients to our portfolio of visitor attractions. One of
Southern Ireland's largest tourist attractions has had Fidelity's EPOS and
loyalty solution installed with a second order for a similar system being at a
large holiday chalet complex in Hampshire. With the current economic climate
and worries about air strikes and ash clouds still looming over us, the UK
holiday market is buoyant. The flexibility of our software means that we can
tailor it to suit many different vertical markets including the tourist sector.

The sale of software via our reseller channel has seen an increase after
remaining fairly static during the past year, March in particular was the
highest month in Fidelity's history for software sold via dealers. I hope this
is a sign that the economy is recovering.

Prospects & Outlook

The Fidelity brand name and reputation is spreading, as is the quality and
flexibility of our products. We are experiencing a constant flow of enquiries
for our software and services and we will endeavor to maintain this momentum
over the next twelve months.

I should like to thank our loyal shareholders for their ongoing support

I look forward to be able to announce further progress in the first half of our
new financial year.

Paul Lowsley

Chairman



Fidelity Systems Plc - Audited Group Profit and Loss Account
for the year ended 28th February, 2011
                                                2011               2010
                                                 £                  £  
                                                                              
Turnover                                                                      
                                                                              
Continuing                               1,636,534          1,389,466         
                                                                              
Total turnover                           1,636,534          1,389,466         
                                                                              
Profit on ordinary activities before     234,464            170,126           
taxation                                                                      
                                                                              
Tax on profit on ordinary activities     42,105             27,668            
                                                                              
Profit on ordinary activities after      192,359            142,458           
taxation                                                                      
                                                                              
Retained profit for the financial period 192,359            142,458           
                                                                              
Profit per share - basic                 0.62p              0.46p             



Fidelity Systems Plc - Audited Group Balance Sheet
at 28th February, 2011
                                                2011               2010
                                                 £                  £         
                                                                              
Fixed assets                             308,812            283,472           
                                                                              
Current assets                           1,415,763          1,299,812         
                                                                              
Current liabilities                      150,893            124,940           
                                                                              
Net current assets                       1,264,870          1,174,872         
                                                                              
Total assets less current liabilities    1,573,682          1,458,344         
                                                                              
Creditors: amounts due after more than                                        
one year                                                                      
                                                                              
Provisions for liabilities and charges   (6,361)            (6,014)           
                                                                              
Net assets                               1,567,321          1,452,240         
                                                                              
Capital and reserves                                                          
                                                                              
Called up share capital                  3,094,027          3,094,027         
                                                                              
Share premium account                    651,301            651,301           
                                                                              
Other reserves                           (2,494,050)        (2,494,050)       
                                                                              
Profit and loss account                  316,043            200,962           
                                                                              
Equity shareholders' funds               1,567,321          1,452,240