holdings plc
Powered by Ceres
Ceres Power Holdings plc Annual Report 2009
Ceres Power Holdings plc Annual Report 2009
Ceres Power Holdings plc 
Unit 18
Denvale Trade Park
Haslett Avenue East
Crawley
RH10 1SS
Phone: +44 (0)1293 400 404
Fax: +44 (0)1293 400 482
E-Mail: info@cerespower.com
www.cerespower.com Ceres Power’s core Fuel Cell 
Module is a solid state 
‘electro-chemical engine’ 
which generates electricity 
and heat directly from fuel  
and air. The patented Ceres 
fuel cell is comprised of thin 
electro-chemical layers 
deposited onto a stainless  
steel substrate. Its operating 
temperature of 500-600
0
C 
enables the use of proven 
cost-effective materials  
and processes.
The Ceres Power Fuel Cell 
Module operates on mains 
natural gas or packaged 
fuels. It forms the core of the 
Group’s residential Combined 
Heat and Power (‘CHP’) 
product and will provide 
a common technology 
platform for a range of 
aligned products. These 
‘distributed generation’ 
products are designed to be 
at the heart of low-carbon 
smart grids around the world.
Ceres Power is establishing an 
in-house mass manufacturing 
capability to produce the core 
Fuel Cell Module in volume 
and is partnering with other 
gas appliance manufacturers 
for the boiler assembly of the 
complete CHP product. Key 
balance of plant components 
and sub-assemblies are being 
co-developed and sourced 
from cost-effective volume 
suppliers. This enables Ceres 
to maximise value capture, 
intellectual property and 
operational efficiency. 
Ceres Power is partnering  
with major corporations 
with well-established direct 
channels to millions of 
customers. International mass 
market opportunities exist for 
cost-effective energy products 
that can reduce carbon 
emissions and address the 
issues of energy efficiency, 
energy security and fuel 
poverty. Ceres Power’s unique 
fuel cell technology can  
meet these global mass 
market requirements to 
power the home, office and 
infrastructure more efficiently 
than today’s solutions.
Technology Products Manufacturing Partners
Directors and Advisors 
for the year ended 30 June 2009
Directors
Dr Brian Count (Non-Executive Chairman)
1
Dr Peter Bance (Chief Executive Officer)
1,2
Rex Vevers (Finance Director)
1,2
Jonathan Watkins (Chief Operating Officer)
2
Bob Flint (Commercial Director)
2
Prof Nigel Brandon (Chief Scientist)
2
Sir David Brown (Non-Executive Senior  
 Independent Director)
1
Alan Wood (Non-Executive Director)
1
John Nicholas (Non-Executive Director)
1
1 Ceres Power Holdings plc
2 Ceres Power Limited
Company Secretary
Richard Preston
Registered Office
Unit 18, Denvale Trade Park
Haslett Avenue East
Crawley 
RH10 1SS
Solicitors
Taylor Wessing
5 New Street Square
London
EC4A 3TW
Statutory Auditors
PricewaterhouseCoopers LLP
Abacus House
Castle Park
Cambridge
CB3 0AN
Bankers
National Westminster Bank plc
South Kensington Station Branch
PO Box No 592
18 Cromwell Place
London
SW7 2LB
Registered Number
5174075
Nominated Advisor (NOMAD)
Morgan Stanley & Co International plc
25 Cabot Square
Canary Wharf
London
E14 4QA
Broker
Morgan Stanley Securities Limited
25 Cabot Square
Canary Wharf
London
E14 4QA
Registrar
Computershare
PO Box 82
The Pavilions
Bridgwater Road
Bristol
BS99 7NH
‘Ceres Power’ and ‘Powered by Ceres’ are registered 
trademarks belonging to the Group.
Ceres Power is developing alternative energy solutions  
to address the global challenges of reducing emissions, 
increasing fuel efficiency and improving energy security.
Our aim is to deliver long-term shareholder value by  
providing clean, efficient, cost-effective decentralised  
energy solutions to global mass markets.  01
Ceres Power Holdings plc 
Annual Report 2009
Overview
Highlights
Alpha phase of residential CHP programme with British Gas   >
successfully completed
£2 million Alpha phase milestone payment received from  >
British Gas in June 2009
£2.5 million funded development and trialling programme  >
secured with Calor Gas for LPG CHP
Volume call-off order from Calor for 20,000 LPG fuelled   >
CHP products
50,000 sq. ft. manufacturing facility secured and fitted out  >
for fuel cell mass production
£23 million in net cash and financial assets at 30 June 2009 >
Former FTSE 100 Finance Director appointed as   >
Non-Executive Director and Audit Committee Chairman
Key Achievements
Grid-connected 1kW CHP products successfully tested   >
on mains natural gas
Alpha phase trialling and performance tests witnessed and  >
data independently verified 
Beta phase of CHP programme commenced with design  >
and procurement activities under way 
Fuel cell mass manufacturing equipment procured and  >
installation under way
Volume supply agreements for key balance of plant  >
components in place
Volume CHP assembly agreement entered into with   >
Dutch heating appliance group Daalderop
Overview
01 Highlights and Key Achievements
02 Chairman’s Statement
04 Chief Executive’s Review
10 Manufacturing Operations
12 The Global Challenge
14  Directors and Senior 
Management
16 Corporate Social Responsibility
Corporate Governance
17 Corporate Governance Report
19 Remuneration Report
24 Directors’ Report
Financial Statements
26 Independent Auditors’ Report 
27 Consolidated Income Statement 
28 Consolidated Balance Sheet
29  Consolidated Cash Flow Statement
30  Consolidated Statement of  
Changes in Equity
31  Notes to the Consolidated  
Financial Statements
47 Independent Auditors’ Report 
48 Company Balance Sheet
49  Notes to the Company  
Financial Statements
ibc Directors and Advisors 
Contents 02
Ceres Power Holdings plc 
Annual Report 2009
Chairman’s Statement
Business overview
I am pleased to report on the financial 
results and achievements of the  
Group for what has been another 
successful year. Over the last twelve 
months the Group has achieved the 
key milestones and priorities that we  
set out and communicated to the 
market last year. In particular, the 
Group has successfully completed  
the Alpha phase of the Combined  
Heat & Power (‘CHP’) programme with 
British Gas, signed a residential CHP 
commercial contract with Calor Gas 
Limited and secured a facility for  
the mass manufacture of fuel cells. 
Together, these represent major steps 
forward in the development of a mass 
manufacturing capability and progress 
towards commercialisation of the Ceres 
Power CHP product.
The successful completion of the 
Alpha milestone means that we are 
now addressing the challenges of  
the Beta phase, which is focused  
on engineering product refinements 
and validation of the CHP product’s 
performance and reliability in 
consumers’ homes.
Despite the very challenging global 
economic climate, the Group has 
delivered another year of strong 
growth in commercial revenues 
reflecting the successful completion  
of key technical milestones in 
accordance with the Group’s  
go-to-market roadmap. During the 
year, the Group made significant 
investments in plant and machinery 
and human resources, increasing  
the underlying operating expenditure. 
This will continue as the Group 
scales-up operations towards CHP 
product launch in volume. As at 30 
June 2009, the Group held £23 million 
in net cash and financial assets.
Support for cleaner technologies 
increases
Since I reported to you last year, a 
number of major economies around  
the world have launched significant 
fiscal incentive programmes designed  
to stimulate the development and 
deployment of low-carbon technologies; 
in the United States alone, this 
programme is expected to be worth in 
excess of US$60 billion. This is a very 
welcome development and recognition 
that addressing carbon emissions, 
especially in the residential sector, is  
an essential part of the solution to  
climate change.
One such key green incentive is the 
feed-in tariff (‘FIT’) – a per-energy unit 
incentive payment for small-scale 
low-carbon electricity generation. FIT 
schemes are already widely used across 
the European Union where they have 
been used to encourage the 
deployment of small-scale distributed 
electricity generation, thereby avoiding 
the generation, transmission and  03
Ceres Power Holdings plc 
Annual Report 2009
Overview
The successful completion of the Alpha  
phase underpins the potential mass market 
opportunity of the Ceres CHP product for the  
UK residential market.
Source: Gearoid Lane, Managing Director British Gas New Energy
distribution losses of centralised power 
generation. There is also evidence that 
installation of small-scale generating 
assets by consumers results in their 
greater understanding and more 
efficient use of energy.
In July 2009, the UK Government 
announced that it will implement  
a FIT for residential microgeneration 
devices, including CHP fed by  
non-renewable fuels such as natural 
gas and LPG. The scheme is to be 
implemented in April 2010 and has  
the potential to substantially reduce  
the energy bills of consumers installing 
a Ceres CHP product. If the FIT is 
capitalised as an up-front payment,  
this could reduce or even eliminate  
the price premium compared to a 
condensing boiler, further emphasising 
the compelling consumer proposition. 
Ceres fuel cell CHP is one of the  
lowest cost ways to reduce the  
carbon footprint of homes and  
utilises the existing installation, service 
and maintenance infrastructure. 
Large-scale deployment of the 
technology can make a significant 
contribution towards meeting the 
Government’s 2020 emissions 
reductions targets.
People
The Board was pleased to welcome 
Jonathan Watkins as Chief Operating 
Officer, who joined the Ceres 
executive management team, 
bringing considerable experience  
in running global, technology-led high 
volume manufacturing operations.  
We are also very pleased to report that  
Phil Whalen joined Ceres Power as 
Technology Director, with extensive 
experience leading global technology 
teams across a variety of technologies, 
including engineered ceramics and 
control systems. Prior to joining Ceres 
Power, Phil was the Chief Technology 
Officer of Invensys plc and previously 
Director of Technology Strategy  
at Honeywell. Together with the 
recruitment of around 30 new staff,  
we are confident that we have the 
organisation and skills to deliver  
our plans.
We would like to thank Andrew Baker, 
who left the Group in December 2008, 
for his contribution to the Board, and 
Nigel Brandon, who steps down from 
the Ceres executive management 
team to take on the role of Chief 
Scientific Adviser to the Board.
We were delighted to appoint John 
Nicholas as Non-Executive Director and 
Chairman of the Audit Committee in 
February 2009. John’s broad business 
background and previous experience 
as a FTSE 100 Group Finance Director 
further strengthens the Board as the 
Group scales-up for mass market 
delivery of its products. We would also 
like to congratulate Sir David Brown on 
his appointment as Senior Independent 
Director of Ceres Power. 
On behalf of the Board I would like  
to record our thanks to all of our 
employees who, through their hard 
work and commitment, have enabled 
the Group to meet its challenging 
targets over the past year.
Brian Count
Chairman 04
Ceres Power Holdings plc 
Annual Report 2009
Chief Executive’s Review
Business review
I am pleased to report that Ceres 
Power has had another successful 
year despite the challenging business 
environment. The Group has made 
substantial progress in key areas and 
successfully delivered all of the 
objectives that we set out in last year’s 
Annual Report.
Residential CHP products
In May 2009, the Group announced 
the successful design, build and test of 
1kW grid-connected Alpha Combined 
Heat and Power (‘CHP’) products 
meeting all of the deliverables under 
the Alpha phase of the residential CHP 
programme with British Gas. This 
important milestone was achieved 
within the timescale set out in the 
roadmap presented to the market in 
June 2008. 
The Alpha CHP products were tested on 
mains natural gas under representative 
operating conditions. During testing, 
the units produced sufficient electricity 
to meet most of a typical UK home’s 
power requirements and demonstrated 
the seamless export and import of 
power to and from the grid, as well as 
producing the heat required to meet all 
of a home’s central heating and hot 
water needs. Key tests were witnessed 
and data verified by British Gas and an 
independent gas appliance testing 
company appointed by British Gas. All 
of the Alpha CHP product requirements 
including performance, size, weight 
and regulatory compliance were 
successfully achieved. Completion  
of the Alpha phase triggered the  
£2 million Alpha milestone payment 
received in June 2009. I would like to 
thank all of the employees of Ceres 
for their hard work and commitment 
in delivering this significant milestone.
The Beta phase of the British Gas  
CHP programme is now under way  
and includes a sequence of activities 
relating to the design, procurement, 
build and trialling of Beta CHP units.  
The validation of in-field product 
performance and reliability including 
consistently high quality installation, 
service and maintenance, is a critical 
element of this phase. The refinements 
identified for product and manufacture 
from the Alpha phase testing have been 
incorporated in the Beta design phase. 
The Group is in the process of procuring 
the necessary components for testing 
and incorporation into the build of the 
initial batch of Beta field trial units. The 
Beta units will be manufactured off 
representative volume-capable 
machines and processes and use 
components sourced from the  
Group’s global supply chain. 
Extensive work has been conducted in 
conjunction with British Gas engineers 
to select a representative sample of 
homes across the country for inclusion 
in the Beta field trials programme.   05
Ceres Power Holdings plc 
Annual Report 2009
Overview
The in-home surveys and site selection 
have been completed and work is 
under way to install the necessary 
monitoring equipment to capture  
and analyse the relevant data from 
the trials including room temperature, 
heat usage, home occupancy and 
electricity consumption. In addition  
to providing valuable in-field product 
validation data, the trials will enable 
the CHP control and electronics 
operating systems to be optimised 
using real world in-home data across 
a range of housing market segments. 
The trials will also be an opportunity to 
establish and optimise the associated 
service offering including the capture 
of valuable consumer feedback.
Manufacturing
In March 2009, the Group secured  
a lease on a 50,000 sq. ft. (5,000 m
2
) 
factory for the volume manufacture  
of fuel cells and assembly of Fuel  
Cell Modules. The factory is located  
in Horsham, South East England,  
within 10 miles of the Group’s existing 
facilities in Crawley. The factory fit-out 
was completed in July 2009 and it  
is anticipated that the installation  
and commissioning of volume 
manufacturing machines will be 
completed during Q3 2009 and  
initial manufacturing operations will 
commence during Q4 2009. As part  
of the Group’s de-risking strategy, the 
core mass manufacturing machines 
and processes being installed in  
the Horsham factory have been trialled 
in the Group’s pilot manufacturing 
facility in Crawley. The Horsham facility’s 
manufacturing output will be for low 
volume Beta units in 2009 and into 2010 
for sheltered field trials under the 
programme with British Gas. Additional 
equipment will be installed from 2010  
to deliver the higher volumes required 
for commercial field trials and in 
preparation for volume launch  
with British Gas in H2 2011.
Ceres has entered into a long-term 
supply agreement with Daalderop BV, 
a well-established domestic heating 
appliance manufacturer. The 
company, based in the Netherlands, 
has a strong presence in the Benelux 
region and also supplies the German 
and UK markets. The boiler assembly 
will be manufactured in volume by 
Daalderop in accordance with Ceres 
Power’s complete CHP product design. 
Daalderop provides Ceres with a 
cost-effective volume condensing 
boiler assembly capability, brings 
supply chain relationships for the 
standard boiler components, extensive 
gas appliance engineering expertise, 
a strong brand and established 
channels into the European market. 
We are delighted to have secured this 
long-term agreement with Daalderop. 
To support the on-going product 
engineering and manufacturing 
scale-up activities, Ceres is continuing 
In January 2009, the Group secured a  
£2.5 million funded development, supply  
and distribution agreement with Calor Gas 
Limited in the UK for residential CHP products 
operating on liquefied petroleum gas.
to invest significant time and resources 
across its global network of supply chain 
partners for raw materials, engineered 
balance of plant components, 
manufacturing process machinery  
and test equipment.
Operations
During the year the Group has made 
significant investments in both capital 
equipment and also human capital.  
The Group has recruited experienced 
engineers to support the scale-up for  
the Beta and Gamma phases of the 
British Gas programme and towards 
market launch. The Group has recruited 
approximately 30 new staff in 
manufacturing, product development, 
supply chain management and product 
testing. This investment will help ensure 
that the Group delivers a cost-effective 
and reliable CHP product. 
The Group is also investing in the 
infrastructure to support the planned 
growth of the business. Group-wide 
Enterprise Resource Planning  
and Quality systems are being 
implemented and we have brought 
in-house a dedicated personnel 
function to support and develop  
the growing workforce. The Group 
continues to make significant 
investments in the development, 
capture and management of a 
substantial intellectual property (‘IP’) 
portfolio including patents, trademarks 
and know-how. The Group has unique  06
Ceres Power Holdings plc 
Annual Report 2009
Chief Executive’s Review  
continued
IP and it is essential that this continues  
to be well protected and the Group 
maximises value through its 
commercial exploitation.
Commercial
In January 2009, the Group secured a 
major new development, supply and 
distribution agreement with Calor Gas 
Limited (‘Calor’). Under this agreement, 
Calor is paying £2.5 million towards  
the costs of developing and trialling 
residential CHP products operating on 
liquefied petroleum gas (‘LPG’). Calor 
will make milestone payments to Ceres 
during the development and trialling 
phase, and has already made an 
up-front payment of £1 million. Ceres 
has also secured a volume call-off 
order from Calor for 20,000 Ceres LPG 
CHP products in aggregate over a 
five-year period for the UK market. 
Subject to successful completion of 
the development and trialling phase,  
and agreeing standard commercial 
terms, Ceres Power will sell the Ceres 
LPG CHP product to Calor for the UK 
market on an exclusive basis for a 
five-year period, anticipated to  
begin in 2012. 
Ceres and Calor intend to maximise 
sales of the Ceres LPG CHP product by 
addressing both the existing LPG 
customer base and also the substantial 
number of homes and small businesses 
using oil, solid fuel or conventional 
electrical heating (more than two 
million in the UK alone). Calor is the  
UK’s leading LPG supplier with over  
70 years experience and its parent 
company, SHV Gas, is the world’s 
largest distributor of LPG with 
operations spanning 27 countries  
over three continents. Ceres Power 
retains the right to supply and distribute 
Ceres LPG CHP products anywhere  
in the world outside the UK and the 
right to exploit its innovative fuel cell 
technology in other applications 
globally, including in the UK. There  
are more than 100 million properties 
without access to mains gas across 
Europe, representing a substantial 
growth opportunity for Ceres.
Ceres Power’s unique fuel cell 
technology provides significant 
opportunities for residential CHP 
products globally including Europe,  
Asia and North America. The Group  
is exploring options in all these 
geographies, with particular  
near-term focus on Europe given  
the potential synergies and  
similarities with the CHP product 
developed for the UK market. 
Financial
During the last 12 months the global 
financial system has been under 
extreme pressure. As we reported in 
the interim results, the Group’s Board-
approved treasury policy has focused 
on preserving the Group’s capital 
base by investing in low-risk, high 
Achievements 08/09 Objectives 09/10
50,000
 sq. ft.
Fuel cell mass manufacturing 
facility secured in South East 
England
Alpha phase signed off  >
by British Gas May 2009
£2 million payment  >
received June 2009
Beta phase under way  >
with design iteration
50,000 sq. ft.  >
manufacturing facility 
site secured March 2009
Manufacturing  >
equipment installation 
and commissioning 
under way
£1 million revenues,   >
up 32% year-on-year
New £2.5 million  >
contract secured with 
Calor Gas with call-off 
order for 20,000 units
Residential UPS  >
demonstration prototype 
product successfully built 
and tested, hybridising 
Fuel Cell Module and 
battery bank 07
Ceres Power Holdings plc 
Annual Report 2009
Overview
quality investments. I am pleased to 
report that this risk management 
policy has enabled the Group to avoid 
any financial investment losses. 
Commercial revenue for the year 
increased by 32% to £1.0 million (2008: 
£0.7 million) due to the successful 
completion of the Alpha phase of the 
CHP programme with British Gas and  
the completion of the contract with EDF 
Energy Networks. As noted in the interim 
results, the first milestone payment of  
£1.0 million from British Gas in February 
2008 has been recognised as revenue 
spread over the Alpha phase. 
In June 2009, following the completion 
of the Alpha phase with British Gas, the 
Group received the second milestone 
payment of £2.0 million. During the  
year the Group also received the first 
milestone payment of £1.0 million under 
the new commercial contract with 
Calor. In accordance with the Group’s 
accounting policy, these up-front cash 
payments are being recognised as 
revenue spread forward over the 
development and trialling phases  
of each contract based on the costs 
incurred. Other operating income 
arising from public sector contracts fell 
to £0.5 million (2008: £0.8 million). 
Operating costs for the year increased 
by 35% to £10.7 million (2008: £7 .9 million). 
This increase reflects the recruitment  
of experienced staff in product 
engineering, manufacturing and 
procurement and the expenditure in 
the supply chain to co-develop and 
procure CHP components. Included  
in operating costs is a non-cash 
share-based payments charge of  
£0.6 million (2008: £0.6 million) which 
includes the effect of the new 
medium-term incentive schemes 
approved by shareholders at the AGM 
in December 2008. Finance income of 
£1.0 million (2008: £1.0 million) was in 
line with the prior year, with the fall in 
interest receivable of £0.1 million offset 
by the increase in fair value of the 
Company’s investment in short-dated 
UK Government gilts.
The loss for the financial year rose by 60% 
to £8.0 million (2008: £5.0 million) 
reflecting the costs of the Alpha phase 
and the investment in scaling-up the 
Group’s engineering and manufacturing 
operations ahead of the Beta phase.
The Group’s net cash and financial 
assets fell by £4.5 million (2008: £16.3 
million increase) during the year to  
£23.0 million (2008: £27.5 million). This 
reduction primarily arose due to the 
loss for the financial year of £8.0 million 
(2008: £5.0 million), adjusted for 
non-cash items of £1.5 million (2008: 
£1.4 million), and the cash investment 
in property, plant and equipment  
of £2.1 million (2008: £1.1 million)  
partly offset by the decrease in 
working capital of £3.9 million  
Achievements 08/09 Objectives 09/10
Complete design,  >
procure and build 
stages of the Beta phase 
of the CHP programme 
with British Gas including 
formal regulatory 
certification of the  
CHP product
Commence initial  >
manufacturing operations 
in the Horsham fuel cell 
mass manufacturing 
facility
Conduct testing of mains  >
natural gas Beta CHP units 
in both sheltered field trials 
and initial commercial 
trials in consumers’ homes
Secure additional  >
commercial relationships 
with go-to-market 
channel partners 
internationally 08
Ceres Power Holdings plc 
Annual Report 2009
Chief Executive’s Review  
continued
British Gas CHP programme Beta phase
Following the successful completion of 
the Alpha phase of the residential CHP 
programme with British Gas, the Beta 
phase is now under way. The Beta 
phase is designed to validate in-field 
product performance and reliability, 
including installation, service and 
maintenance through sheltered field 
trials and commercial field trials in 
selected consumers’ homes. 
Using British Gas engineers to conduct 
in-home surveys, a representative 
sample of homes across the country 
has been selected for inclusion in the 
Beta trials. Work is now under way to 
install the necessary monitoring 
equipment to capture and analyse the 
relevant data from the trials. The data 
will provide valuable information to 
enable the CHP product’s operating 
cycle to be optimised using real-world 
in-house data as well as to help inform 
the marketing strategy to address  
both ‘early adopter’ and mass  
market customers.  09
Ceres Power Holdings plc 
Annual Report 2009
Overview
Calor Gas residential CHP programme
In January 2009, Ceres Power signed a 
major new agreement with Calor Gas 
Limited (‘Calor’) to develop and 
distribute residential CHP products 
operating on liquefied petroleum gas 
(‘LPG’). Under the terms of the 
agreement, Calor is paying £2.5 million 
towards the cost of developing and 
trialling the Ceres LPG CHP product. 
Ceres Power has also secured a volume 
call-off order from Calor for 20,000 Ceres 
LPG CHP products in aggregate over a 
five-year period for the UK market, 
anticipated to begin in 2012.
Calor is the UK’s leading LPG supplier 
and its parent company, SHV Gas, is the 
world’s largest distributor of LPG. Within 
Europe there are more than 100 million 
properties that are off mains gas and 
more than 2 million in the UK alone.
(2008: £1.2 million). The reduction in 
working capital has been driven by the 
increase in deferred income due to 
the receipt of milestone payments of 
£2.0 million and £1.0 million from British 
Gas and Calor respectively and the 
increase in trade payables relating to 
the procurement of plant and 
machinery due for delivery after the 
year end. 
The Group’s liquidity position remains 
sound with £23.0 million in net cash  
and financial assets. All surplus funds 
are invested in UK Government  
gilts, short-term low-risk ‘AAA’-rated 
money market funds and short-term 
bank deposits.
Outlook
The Board and senior management 
are focused on the delivery of  
our core residential CHP programmes 
and on investing in the operational 
capabilities that will underpin our 
future growth. To achieve the Group’s 
core objectives our priorities for the 
next 12 months are to:
commence initial manufacturing  >
operations in the Horsham fuel cell 
mass manufacturing facility;
complete design, procure and   >
build stages of the Beta phase of 
the CHP programme with British Gas 
including formal regulatory 
certification of the CHP product;
conduct testing of mains natural gas  >
Beta CHP units in both sheltered field 
trials and initial commercial trials in 
consumers’ homes; and
secure additional commercial  >
relationships with go-to-market 
channel partners internationally.
I look forward to reporting on the 
delivery of our stated priorities  
and other progress over the next  
12 months. 
Peter Bance
Chief Executive Officer Ceres in-house manufacture
Complete Ceres CHP product to customer
Cell
Stack
Module
Co-developed
balance of plant
Raw materials
Boiler assembly partner
Standard boiler
components
Complete Ceres CHP product to customer
10
Ceres Power Holdings plc 
Annual Report 2009
Manufacturing Operations Horsham fuel cell mass manufacturing facility.
11
Ceres Power Holdings plc 
Annual Report 2009
Overview
Manufacturing strategy
Ceres Power’s business model is to 
develop low-carbon, cost-effective, 
mass market energy products  
based on the Group’s core fuel cell 
technology. Fuel cells welded together 
in a layered fuel cell stack and 
combined with air and fuel delivery 
systems form the Fuel Cell Module, 
which is a solid state ‘electro-chemical 
engine’ that generates heat and power 
directly from fuel and air. This Fuel Cell 
Module will provide a common platform 
across the Group’s range of Combined 
Heat and Power (‘CHP’) products 
operating on a variety of fuels.
Ceres Power’s strategy is to 
manufacture in-house the high  
value core fuel cell technology and  
to assemble in-house the Fuel Cell 
Module. Key balance of plant  
and sub-assemblies are being  
co-developed and/or sourced in 
partnership with cost-effective, high 
quality volume suppliers across a 
global supply chain. Ceres is 
partnering with well-established gas 
appliance manufacturers for the  
boiler assembly of the complete  
CHP product in accordance with 
Ceres product design. This strategy 
enables the Group to maintain full 
control of all key intellectual property, 
maximise operational efficiency  
and position the Group to optimise 
shareholder value by controlling 
‘product-level’ revenues.
At the core of the Group’s manufacturing 
strategy is the expertise that has been 
developed in ‘Design for Manufacture’ 
which addresses key risks up-front. This 
involves concurrent design, product 
engineering and manufacturing 
processes with partners across the 
entire supply chain of raw materials, 
components and process equipment. 
This approach is designed to reduce 
product development lead time, costs 
and risk associated with bringing new 
consumer products to market.
Mass manufacturing scale-up
The Group’s new 50,000 sq. ft.  
(5,000 m
2
) factory in Horsham will  
be used to scale-up for volume 
production the manufacture of fuel 
cells and the assembly of fuel cell 
stacks and Fuel Cell Modules.  
The facility fit-out was completed  
in July 2009 and the Group is now  
in the process of installing and 
commissioning the volume 
manufacturing machines in 
preparation for initial operations to 
commence during Q4 2009. The key 
mass manufacturing machines and 
processes have been trialled in the 
Group’s pilot manufacturing facility in 
Crawley, which reduces the risks in 
scaling-up to mass production.
The initial manufacturing line being 
installed in the Horsham facility  
will manufacture Fuel Cell Modules for 
low volume Beta and Gamma units for 
trialling under the programme with 
British Gas. The higher volumes 
required for volume launch will be 
delivered through the installation of 
additional equipment.
CHP boiler assembly
In line with Ceres’ manufacturing 
strategy, the Group has entered  
into a long-term boiler assembly 
agreement with Daalderop BV, a 
well-established innovative 
manufacturer of domestic heating 
appliances including condensing 
boilers, heat pumps and water 
heaters. This arrangement enables 
Ceres to utilise an existing cost-
effective volume condensing boiler 
assembly function, thereby avoiding 
the additional capital costs and risks 
of building an in-house capability. 
Daalderop brings heating appliance 
engineering expertise and a  
well-established global supply chain. 
These skills will complement Ceres’ 
in-house capabilities and help meet 
the Group’s targets and timescales  
for our residential CHP programme 
with British Gas.
Daalderop’s strong brand in the 
Benelux markets, established channels 
and experience of bringing new 
products to market could further 
de-risk Ceres’ entry into the growing 
European CHP market.  12
Ceres Power Holdings plc 
Annual Report 2009
The Global Challenge
Climate change – a global challenge 
and opportunity
Environmental issues are moving  
from marginal to mainstream and 
governments are now responding  
to increasing social and economic 
pressure for action to address climate 
change. Most major economies have 
implemented, or are planning the 
implementation of, climate change 
regulation and environmental 
incentives and these have been 
included in many of the recent fiscal 
stimulus packages announced over 
the last 12 months.
Fuel cell residential CHP – can deliver 
significant energy savings
A typical UK home uses electricity 
generated by a central power station 
and transmitted through the mains 
grid and uses a boiler to meet its 
heating and hot water needs. 
Centralised generation wastes a 
significant proportion of the energy it 
produces, through heat losses in the 
power station and in the transmission 
and distribution network. A fuel cell 
CHP product installed in a home 
avoids these losses, and captures the 
heat for use within the home. By 
creating electricity at the point of use, 
overall efficiency of fossil fuel use can 
be improved from around 35% for 
centralised generation to up to 90% for 
residential CHP.
Ceres’ unique low temperature fuel 
cell technology enables the use of 
proven cost-effective materials and 
processes for the manufacture of fuel 
cells and key balance of plant 
components. The low heat to power 
ratio of a Ceres fuel cell allows the CHP 
unit to operate all year round thereby 
maximising energy savings. The 
combination of high fuel efficiency, all 
year round operation and cost-
effective manufacture offers a typical 
consumer installing a Ceres CHP 
product annual energy savings of 
around 25% and an attractive 
payback compared to grid-supplied 
electricity and gas-fuelled 
conventional central heating. 
Fuel cell residential CHP – a practical 
mass market solution to reduce  
CO
2
 emissions
Housing in the UK accounts for 27% of  
the country’s total carbon emissions.  
With more than 80% of the houses we  
will be living in by 2050 already built,  
the UK requires cost-effective carbon 
reduction technologies that can be 
retrofitted to the existing housing stock 
as well as installed in new-build, if the 
Government’s emissions reductions 
targets are to be met.
Significant reductions in CO
2
 from the 
residential sector are very difficult to 
achieve in the existing housing stock. 
With home insulation and other 
available measures reaching 
saturation, fuel cell CHP offers one of 
the most cost-effective ways to reduce 
carbon. Fuel cell CHP is a very flexible 
form of microgeneration that is 
complementary to other forms of 
carbon reduction measures and can 
be easily installed in the majority of 
homes in the UK. Compared to 
unpredictable intermittent renewables, 
fuel cell CHP generates electricity with 
a predictable and controllable 
generation profile that matches the 
electricity demand in the home, 
thereby maximising the energy savings 
all year round.
The Ceres CHP product is designed  
to replace a conventional central 
heating boiler and will operate on 
mains natural gas or LPG, generating 
all of the heating and hot water  
and the majority of the electricity 
requirements of a typical UK home. 
The wall-mountable CHP product uses 
the same gas, water and electricity 
connections as existing boilers and is 
therefore suitable for retrofit into the 
existing housing stock. 
Modelling conducted by independent 
consultants commissioned by Ceres 
Power shows that mass deployment  
of residential CHP units could result in 
cumulative sales of up to 7 million units 
by 2020 or the equivalent of c.7GW of 
electrical capacity. Cumulative sales 
of CHP by 2020 could deliver the 
equivalent of 17%
1
 of the total potential 
emissions reductions achievable from 
the existing UK housing stock, one of 
Fuel Cell residential Combined Heat and Power (‘CHP’) is a 
practical mass market solution that can help address the 
key energy challenges:
  Increase energy efficiency
 Reduce CO
2
 emissions
 Increase energy security
 Reduce fuel poverty
1 Based on a report in December 2008 published by the Committee on Climate Change. Power Station   Transmission & Distribution Efficiency ~ 35%
Efficiency ~ 80-90%
CHP Unit
Fuel
100%
Electricity
Electricity
Heat
Fuel
100%
s e s s o L s e s s o L
Centralised
Generation
Distributed 
Generation
13
Ceres Power Holdings plc 
Annual Report 2009
Overview
the most challenging segments in  
the UK.
Fuel cell residential CHP – can 
improve energy security 
From a utility network perspective,  
a Ceres Power CHP unit generating 
electricity and heat at the point of use 
reduces strain on the electricity grid  
by reducing demand, especially at 
peak times in the morning and 
evening. This will help increase the 
power generation ‘capacity margin’ in 
the network, improving grid resilience 
and helping prevent ‘the lights going 
out’ – seen as a major risk over the 
near term. Widespread deployment of 
fuel cell CHP would also reduce and/
or delay the need for major investment 
in grid infrastructure and central power 
stations, with modelling indicating the 
potential savings of several £billion.
From a national energy security 
perspective, the high-efficiency energy 
conversion of the fuel cell CHP product 
also helps reduce the overall use of 
existing fuel resources through 
efficiency gains. Despite some 
increased gas use in people’s homes, 
fuel cell CHP has the ability to reduce 
overall gas usage by ‘UK plc’ as these 
units make much more efficient use of 
the gas input than centralised 
generation. The capability of Ceres 
Power’s technology to operate on a 
range of fuels (e.g. natural gas, LPG, 
biogas, hydrogen) also adds to 
national and local energy security by 
exploiting a more diverse energy mix. 
From a consumer’s perspective,  
the Ceres CHP unit’s ability to keep 
running through a power outage 
ensures that the home’s central 
heating and hot water provision 
remains unaffected – a major 
advantage over conventional heating 
appliances. In addition to this 
‘thermal’ energy security benefit that 
consumers will enjoy with today’s 
Ceres CHP design, future product 
variants may also provide electrical 
back-up for part or all of the house. 
This uninterruptable power supply 
functionality will become increasingly 
valuable as the grid network in the UK 
comes under more strain as is already 
happening in other countries.
Fuel cell residential CHP – can deliver 
sustainable carbon savings  
beyond 2030 
Fuel cell CHP is a flexible form of 
microgeneration that complements 
renewable generation and other 
low-carbon domestic heating 
measures. With its low heat to power 
ratio, a Ceres CHP unit can generate 
electricity that is matched to the daily 
electrical demands of the home and 
overall energy demands all year 
round. As ‘smart metering’ is rolled out, 
CHP products could be actively 
modulated to take advantage of 
time-of-day tariffs and to provide 
balancing for large-scale intermittent 
renewable generation elsewhere on 
the network; thereby reducing strain 
on the grid.
Fuel cell CHP will reduce demand for 
fossil-fuelled centralised generation 
and will complement nuclear and 
large-scale renewable generating 
assets. Work conducted by Oxera  
for Ceres Power confirms that as the 
grid decarbonises there remains the 
need for some dispatchable fossil fuel 
generation to provide the flexibility  
that baseload generation, such as 
nuclear and intermittent renewables, 
cannot deliver. Deploying fuel cell  
CHP products in homes is a very 
efficient way to maintain the necessary 
peaking and balancing flexibility  
whilst displacing dirty central 
generating plants. 
Research by National Grid and others 
has shown that the natural gas grid 
could be significantly decarbonised on 
a similar timescale to the electricity 
grid. Fuel cell CHP that can also run on 
lower carbon fuels such as biomethane 
and hydrogen is the ideal technology to 
make best use of a decarbonised gas 
grid with no risk of fossil fuel ‘lock-in’. 14
Ceres Power Holdings plc 
Annual Report 2009
Directors and Senior Management
1 2 3
4 5 6
7 9 8 15
Ceres Power Holdings plc 
Annual Report 2009
Overview
1. Brian Count
Non-Executive Chairman
Brian is Chairman of Ceres Power having 
joined the Company as a Non-Executive 
Director in March 2007 . He was 
previously Chief Executive Officer of 
Innogy plc, the public company 
comprising National Power’s UK 
business, and then Chief Executive of 
RWE Trading in Germany. Brian was also 
a Non-Executive Director of Eskom, the 
South African electricity company. Brian 
sits on the Audit, Remuneration and the 
Nomination & Governance Committees.
4. Bob Flint
Commercial Director
Bob has a degree in Engineering from 
Cambridge University and an MBA from 
Imperial College London. He has spent 
20 years in the commercialisation of 
innovative technology through new 
products and services, venture creation 
and intellectual property licensing. 
Following a senior role at BAE Systems, 
Bob became Commercial Director of 
Ceres Power in 2005.
7. Sir David Brown
Non-Executive Director
David is a Fellow of the Royal Academy 
of Engineering and in 2001 was 
knighted for services to British industry. 
He followed a career first with Plessey, 
then with STC, ICL and Nortel, and then 
became Chairman of Motorola Limited 
from 1997 until mid-2008. David is a 
director of two other publicly quoted 
companies and joined Ceres Power in 
February 2008 as Non-Executive 
Director, becoming the Group’s Senior 
Independent Director in 2009. He sits  
on the Audit, Remuneration, Nomination 
& Governance and the Technical & 
Operational Risk Committees.
2. Peter Bance
Chief Executive Officer
Peter gained a PhD in Physics from  
Oxford University as a Rhodes Scholar.  
His experience at PA Consulting  
and Generics included building a 
successful corporate venturing 
practice across a range of 
international deals. Since joining 
Ceres Power as CEO in 2003, Peter  
has also been active in advising 
government on energy policy and 
taken a leading role in the 
microgeneration industry.
5. Phil Whalen
Technology Director
Phil received a PhD in Ceramic Science 
and Engineering from Rutgers University 
and has over 20 years experience 
leading global technology teams.  
Prior to joining Ceres Power Phil was 
Corporate Director of Technology 
Strategy at Honeywell Inc and most 
recently was Chief Technology Officer of 
Invensys plc. Phil joined Ceres Power in 
July 2009 as Technology Director and is 
responsible for technology development 
and advanced engineering.
8. Alan Wood
Non-Executive Director
Alan holds an honours degree  
in Mechanical Engineering from 
Manchester University and an MBA from 
Harvard University. Following an early 
career in manufacturing industries 
spanning food products, construction 
and electrical engineering, Alan 
became Non-Executive Chairman of 
Siemens Holdings plc and is also a 
director of a number of other publicly 
listed companies. He joined Ceres 
Power in February 2008 as a 
Non-Executive Director and sits on the 
Remuneration, Nomination & 
Governance and the Technical & 
Operational Risk Committees.
 
3. Rex Vevers
Finance Director
Rex received an Economics degree 
from Newcastle University before 
joining Arthur Andersen where he 
qualified as a Chartered Accountant 
and Treasurer. He then pursued an 
industrial career where he held 
financial director roles in sectors 
spanning technology, volume 
manufacturing and banking, gaining 
significant international experience in 
corporate finance. Following positions 
at the industrial group Pechiney and a 
global consumer products group, Rex 
joined Ceres Power in 2006 as the 
Group’s Finance Director.
6. Jonathan Watkins
Chief Operating Officer
Jonathan is a Chartered Engineer  
with an honours degree in Materials 
Science and Technology from  
Birmingham University and 
post-graduate diploma in 
Manufacturing, Engineering and 
Management (ACDMM) from 
Cambridge University. Jonathan has 
experience of running multi-site 
manufacturing businesses with T&N 
plc and more recently with the 
European automation and fastening 
arm of Textron inc – a global tier-one 
automotive supplier. Jonathan joined 
Ceres Power in November 2008 and  
in January 2009 became Chief 
Operating Officer.
9. John Nicholas
Non-Executive Director
John is a Fellow of the Association of 
Chartered Certified Accountants and 
holds an MBA from Kingston University. 
Much of his early career was spent in 
technology-focused, international 
manufacturing and service companies. 
John became Group Finance Director of 
Kidde plc on its demerger from Williams 
Holdings and was Group Finance 
Director at Tate & Lyle plc from 2006 to 
2008. John joined Ceres Power in 
February 2009 as a Non-Executive 
Director and sits on the Audit, 
Remuneration and Nomination & 
Governance Committees.
See inside back cover for details 
of Ceres Power directorships 16
Ceres Power Holdings plc 
Annual Report 2009
Corporate Social 
Responsibility
  Health and safety leadership 
demonstrated
  Accredited training centre 
recognised by the British  
Safety Council
  Employee Sharesave scheme 
implemented
  Use of public  
transport encouraged
  Staff business travel and  
air travel minimised 
Socially responsible goals
Ceres Power’s mission is to make  
a major contribution towards the 
challenge of addressing climate 
change through more efficient use of 
natural resources and to contribute to 
the creation of a low-carbon economy 
by providing cleaner, more efficient 
and decentralised energy solutions.
Employees 
During the year, the Group employed 
an average of 75 people (30 June 
2009: 90 people). We continue to 
create high-skill employment, aiming to 
recruit the best talent and acting as an 
equal opportunities employer at all 
times, by valuing the diversity of our 
workforce and ensuring that people 
remain safe from discrimination and 
harassment in the workplace. During 
the year we have developed an 
in-house personnel capability to ensure 
high standards of employment practice 
while developing and retaining our 
most critical asset – our people. 
A new ‘save as you earn’ share scheme 
was launched in 2009 to encourage 
employees to share in the success of the 
business, whilst aligning the interests of 
employees and shareholders more 
directly. Participation in this scheme has 
been excellent.
Safety first
Ceres Power remains committed to 
achieving the highest standards in 
health and safety practice. We invest in 
health and safety specialist roles and 
systems and work positively to ensure 
that an open culture towards safety is 
maintained. During the year the 
Company was recognised as an 
accredited training centre in health 
and safety by the British Safety Council. 
The personal engagement of every 
employee is critical to maintaining our 
excellent safety record and we 
commission regular reviews of our 
health and safety arrangements by 
practice experts to ensure that we 
benefit from external developments in 
this specialism and secure continuous 
improvement in this vital area. 
Environmental and community 
awareness 
We aim to operate while minimising our 
use of resources and environmental 
impact in terms of waste. We seek to 
recycle in all areas – from office 
supplies to water consumption. We 
support cycling and car sharing, 
prioritise public over personal transport, 
and review our policies to ensure 
alignment with these goals. 
We want to be a valued member of the 
community and have been in contact 
with local neighbourhood groups as 
part of setting up the new mass 
manufacturing facility in Horsham, to 
ensure that we understand and 
respond to any concerns identified. 
Ethical standards 
Ceres Power actively strives to achieve 
high ethical standards in all activities. 
We seek to ensure that all our business 
partners apply similarly high standards, 
including our supply chain partners 
and customers.  17
Ceres Power Holdings plc 
Annual Report 2009
Corporate Governance Report
Corporate Governance
Principles of corporate governance
The Board of Directors recognises the importance of  
good corporate governance to enhance and protect 
shareholder value. As the Company’s shares are listed on 
the Alternative Investment Market (‘AIM’) of the London 
Stock Exchange, the Company is not required to comply 
with the disclosure requirements of the 2008 Combined 
Code on Corporate Governance. However, the Board 
supports the principles contained in the 2008 Combined 
Code and is committed to applying its principles, where they 
are appropriate given the Company’s size. The following 
describes how these principles have been applied.
Board of Directors
The Company is controlled by the Board of Directors, 
which is headed by the Non-Executive Chairman and 
currently comprises the Senior Independent Non-Executive 
Director, two other Non-Executive Directors and two 
Executive Directors. On 31 December 2008, Dr Andrew 
Baker left the Board as Operations Director. On 16 February 
2009, John Nicholas joined the Board as a Non-Executive 
Director. The size of the Board and the balance between 
Executives and Non-Executives is considered appropriate 
to the Company’s size and stage of development and is 
kept under regular review.
The Board is responsible to shareholders for the proper 
management of the Group and meets regularly 
throughout the year, usually monthly, to set the overall 
direction and strategy of the Group and to review financial 
and operating performance. Financial policy and 
budgets, including major capital expenditure and treasury 
policy, are approved and monitored by the Board. The key 
operational decisions are subject to Board approval.
The division of responsibilities between the Chairman and 
the Chief Executive Officer is clearly defined, documented 
and approved by the Board. 
The Non-Executive Directors are considered by the Board 
to be independent of management and are free to 
exercise their independent judgement. They have never 
been employees of the Group nor do they participate  
in any of the Group’s pension schemes, share option 
schemes or incentive arrangements. They receive no  
other remuneration other than Directors’ fees.
The Non-Executive Directors hold regular meetings during 
the year with the Chairman, without the Executive 
Directors present.
All Board members receive monthly management 
accounts and regular management reports to enable 
them to review the Group’s performance against agreed 
objectives. Regular reports and papers are circulated to 
all Directors in a timely manner to enable them to 
discharge their duties effectively. This information includes 
that specifically requested by the Non-Executive Directors 
from time to time. 
The performance of each Executive and Non-Executive 
Director is appraised annually.
Audit Committee
The Audit Committee is comprised of John Nicholas as 
Chairman (who replaced Dr Brian Count as Chairman on 
joining the Board), Dr Brian Count and Sir David Brown. The 
Committee oversees the monitoring of the Group’s internal 
controls, accounting and treasury policies and financial 
reporting and provides a forum through which the external 
auditors report. It also reviews the scope and results of  
the external audit; the independence and objectivity  
of the auditors; and makes recommendations to the  
Board on issues surrounding the auditors’ remuneration, 
appointment, resignation and removal. The Committee is 
authorised by the Board to seek and obtain any 
information it requires from any officer or employee of the 
Group and to obtain external legal or other independent 
professional advice. 
Remuneration Committee
The Remuneration Committee is comprised of Sir David 
Brown as Chairman, Dr Brian Count, Alan Wood and  
John Nicholas. The Committee reviews the performance  
of the Executive Directors and sets the scale and structure 
of their remuneration and the basis of their service 
agreements with due regard to the interests of the 
shareholders. Non-Executive Directors’ fees are considered 
and agreed by the Board.
The Remuneration Report is set out on pages 19 to 23.
Nomination & Governance Committee
The Nomination & Governance Committee is comprised of 
Dr Brian Count as Chairman, Sir David Brown, Alan Wood 
and John Nicholas. The Committee is responsible for 
reviewing the composition and structure of the Board  
and for identifying and recommending candidates for 
Executive and Non-Executive Director. All Directors are 
subject to re-election by shareholders at the first Annual 
General Meeting following their initial appointment, and at 
each Annual General Meeting one-third of the Directors 
retire by rotation.  18
Ceres Power Holdings plc 
Annual Report 2009
Corporate Governance Report continued
Technical & Operational Risk Committee
The Technical & Operational Risk Committee was 
established during the year. It is comprised of Alan Wood 
as Chairman, Sir David Brown and Jonathan Watkins, 
Chief Operating Officer. Phil Whalen, Technology Director 
joined the Committee in July 2009. The Committee is 
responsible for monitoring key technical and operational 
risks and the development and implementation of 
strategies to manage and mitigate these risks. 
Communication with shareholders
The Board recognises the importance of effective 
communication with shareholders. Dialogue with 
institutional shareholders is conducted on a regular  
basis by the Chief Executive Officer and Finance Director. 
During the year, the views of major shareholders were 
communicated to the Board through briefings by the 
Company’s broker and face-to-face meetings with the 
Chairman. The Annual General Meeting provides an 
opportunity to communicate with other shareholders and 
gives the opportunity to put questions to the Chairman 
and other Directors. 
Internal controls
The Board has overall responsibility for the Group’s systems 
of internal control, which are designed to safeguard the 
assets of the Group and to ensure the reliability of its 
financial information.
The Group prepares detailed budgets and cash flow 
projections, which are approved annually by the Board 
and updated regularly throughout the year. Detailed 
management accounts and working capital cash flow 
projections are prepared on a monthly basis and 
compared to budgets and projections to identify any 
significant variances. The Group does not have an  
internal audit function and the Directors believe that  
this is appropriate given the Group’s size and stage  
of development.
The Audit Committee has reviewed the effectiveness of  
the system of internal control during the year and up  
to the date that the financial statements were signed,  
and this review did not identify any significant findings  
or weaknesses. 19
Ceres Power Holdings plc 
Annual Report 2009
Corporate Governance
Remuneration Report
The Board of Directors presents the Company’s 
Remuneration Report for the year ended 30 June 2009.  
As the Company’s shares are listed on the Alternative 
Investment Market (‘AIM’) of the London Stock Exchange, 
the Company is not required to report in accordance  
with the remuneration disclosure requirements of the 
Companies Act 2006 and relevant regulations. This  
report, while not complying fully with these requirements, 
has been presented to disclose the key aspects of 
Directors’ remuneration and the Board hopes that  
this report will provide shareholders with a better 
understanding of the rationale behind the current 
remuneration arrangements for senior management  
and the link between the performance of the Company 
and the rewards for executives.
All sections of the Remuneration Report, other than those 
specifically marked as audited, are unaudited.
Composition and role of the Remuneration Committee
Throughout the year the Remuneration Committee 
comprised the Non-Executive Directors and was chaired 
by Sir David Brown. The Committee met 9 times during the 
year. Dr Peter Bance is invited to attend meetings to assist 
the Committee on matters concerning remuneration of 
other senior executives within the Group, however he was 
not present during the part of the meetings where his own 
remuneration was discussed.
The Committee is responsible for determining, on behalf  
of the Board, an appropriate remuneration policy for the 
Executive Directors and for designing a remuneration 
framework for them that is consistent with that policy. The 
Committee also monitors remuneration practice amongst 
other senior executives, determines the Chairman’s fee 
level and oversees the compensation philosophy of Ceres 
Power generally. The Board, excluding the Non-Executive 
Directors, determines the remuneration levels of the 
Non-Executive Directors.
At its meetings during the year, the Committee completed 
an extensive programme of work, considering amongst 
other matters the following:
the 2008 Remuneration Report; >
design and implementation of the Company’s medium- >
term incentive arrangements that were approved by 
shareholders at the Company’s Annual General 
Meeting on 5 December 2008;
the level of achievement of the Alpha Phase of the CHP  >
Project Bonus Plan; 
setting performance targets in respect of the Beta  >
Phase of the CHP Project Bonus Plan;
design and implementation of a new company-wide  >
Sharesave scheme;
levels of base salary for executives; >
terms of employment for all senior executives; >
proposed terms of appointment of senior executives;  >
and 
review of rewards and benefits available to all  >
employees in the Group.
During the year the Committee has been advised on the 
above matters by independent remuneration consultants 
Hewitt New Bridge Street (‘HNBS’) whose services were 
approved by the Remuneration Committee. Neither HNBS 
nor any other part of Hewitt Associates provided any other 
services to the Group during the year.
Remuneration policy for Executive Directors
The Committee’s policy is that Executive Directors’ 
remuneration packages should:
provide the Directors with the opportunity to receive   >
a share in the future growth and value of the Group  
that is regarded as fair by other employees and  
by shareholders;
provide appropriate alignment between the Group’s  >
strategic and operational goals for which the Directors 
have collective responsibility, shareholder returns and 
executive reward;
be, as far as possible, simple to understand and  >
administer;
be determined taking into account external market  >
benchmarks so that the total value of remuneration 
packages (calculated on a ‘target’ basis) should be 
broadly competitive with mid-market practice 
compared to listed companies of a similar size within 
similar sectors. This should allow the Group to attract 
and retain key individuals critical to the future success 
of the business;
include below market levels of fixed pay (salary and  >
benefits) in return for above market levels of 
performance-related pay potential;
be appropriate given pay levels within the Group more  >
generally; and
be structured so as to comply with key corporate  >
governance best practice guidelines.
Remuneration structure for Executive Directors
Overview
As noted in last year’s Remuneration Report, the 
Committee believes that at this stage of the  
Group’s development the remuneration structure for 
Executive Directors should be weighted more towards 
performance-related pay than would be the market 
‘norm’ for an ‘established’ company. 
Base salary
Executive Directors’ base salaries are reviewed annually. In 
respect of 2009 the Committee has decided that no base 
salary increases will be awarded to Executive Directors. 
The agreed salaries for 2009/10 are: Dr Peter Bance 
£196,833 (2008/09: £196,833) and Rex Vevers £162,225 
(2008/09: £162,225).
Benefits
In line with all other employees, Executive Directors receive 
a pension contribution worth 8% of salary (with Executive 
Directors contributing at least 3% of salary) and employer’s 
National Insurance saved on employee pension 
contributions from the Group and life assurance of four 
times salary. 20
Ceres Power Holdings plc 
Annual Report 2009
Remuneration Report continued
Remuneration structure for Executive Directors continued
Sharesave scheme
During the year the Committee implemented an HMRC-approved Sharesave scheme. The Executive Directors are eligible 
to participate in this scheme, which is open to all eligible employees on the same basis, providing a long-term savings 
and investment opportunity.
Performance-related pay
During the year the Committee, assisted by HNBS, consulted extensively with shareholders and institutions and 
formulated new incentive arrangements that will apply until the end of June 2011. Rather than the traditional listed 
company combination of: i). an annual bonus (where performance is measured over one year); and ii). annual grants of 
long-term share awards (where performance is typically measured over three years), the Committee has implemented 
two medium-term incentive arrangements that will operate until the financial year ending in June 2011. These medium-
term incentive arrangements are designed to more closely match the Company’s strategy.
These incentive arrangements, which were approved by shareholders at the Company’s Annual General Meeting on 5 
December 2008, provide executives with a clear ‘line-of-sight’ between performance and reward with measurable 
performance conditions directly linked to the successful delivery of the Company’s key strategic and operational goals 
and growth of the Company. The arrangements reward executives through a mixture of cash, deferred shares and share 
options and achieve an appropriate balance between incentive, reward and retention.
Details of the two medium-term incentive arrangements are outlined below:
One-off grant of share options
On 11 December 2008, the Executive Directors and other senior executives were granted a one-off award of share 
options under the Company’s existing 2004 Employees’ Share Option Scheme. It is intended that, other than in 
settlement of the deferred element of the CHP Project Bonus Plan (see below), no further share options will be granted  
to existing Executive Directors and senior executives either under this scheme or under any similar scheme until after 
June 2011. 
The terms of this grant were as outlined to shareholders in last year’s Notice of Annual General Meeting other than that 
the share options were granted with an exercise price of £2 per share, being the higher of the average market price over 
the 20 trading days ending on 9 December 2008 (being £0.92) and £2. This ‘out of the money’ exercise price, a more 
challenging requirement than was stated in the Notice of Annual General Meeting, was considered appropriate by the 
Committee in order to create an additional hurdle for executives. Exercise of the options is subject to the prior 
achievement of absolute share price targets and normally is dependent on continued employment until the initial 
exercise point. The Committee felt that this provided the clearest alignment between the interests of shareholders and 
executives given the absence of any obvious comparator group of companies against which a Total Shareholder Return 
measure could be constructed. 
The options granted to the Executive Directors and other senior executives can only be exercised if the following share 
price targets are achieved over 20 consecutive trading days at some point during the exercise period:
     Percentage   Exercise 
     of options  Share price period 
     exercisable target (post grant)
Tranche 1     25% £4 2-10 years
Tranche 2     37.5% £5 3-10 years
Tranche 3     37.5% £6 4-10 years
The Chief Executive Officer, Dr Peter Bance, was awarded 850,000 one-off share options and the Finance Director, Rex 
Vevers, was awarded 637,500 options. Other senior executives were awarded one-off share options of no more than 75% 
of the Chief Executive Officer’s award. 21
Ceres Power Holdings plc 
Annual Report 2009
Corporate Governance
CHP Project Bonus Plan
The CHP Project Bonus Plan replaces the previous bonus arrangements and will operate for a further two years ending in 
June 2011. 
Under this plan, Executive Directors and selected other senior executives and staff are eligible to receive a bonus at the 
completion of each of the Alpha, Beta and Gamma phases of the CHP Project. The maximum potential bonus payment 
at the end of each phase is 100% of annual salary for Dr Peter Bance and for all other eligible participants no more than 
75% of their salary. All awards for the successful completion of each phase made under this plan are payable in two 
instalments; 50% of any award is payable immediately in cash and the remaining 50% as a deferred award in the  
form of nominal value share options which vest to the individual no earlier than 30 June 2012, subject normally to 
continued employment within the Group.
The amount of any award granted under this plan is subject to the Committee’s assessment of the level and quality of 
delivery of each of the Alpha, Beta and Gamma phases of the CHP Project at the completion of each phase of the 
project (known as ‘milestone targets’). 
The Committee reviewed the delivery of all of the Alpha phase milestone targets and, taking into account the successful 
sign-off of the Alpha phase and the receipt of the £2 million payment from British Gas, determined that the bonus 
payments would be 75% of the available maximum.
The Committee has also agreed the Beta phase milestone targets for the coming year. These milestone targets are 
based on the delivery of key product, manufacturing, commercial and financial metrics and ensure that the CHP Project 
Bonus Plan continues to align the interests of executives and shareholders by rewarding successful delivery of key 
strategic and operational goals.
Share ownership guideline
To be consistent with best practice, the Committee has implemented a formal share ownership guideline for Executive 
Directors requiring them to retain at least half of any shares arising from the exercise of any options under the one-off 
award and any future option grant (after selling sufficient shares to pay the exercise price and to fund any tax due on the 
options) until they have a holding of Company shares worth at least 100% of their base salary (200% for the Chief 
Executive Officer).
Service contracts
Each Executive Director has a service contract with the Group which contains details regarding remuneration, restrictions 
and disciplinary matters. Non-Executive Directors are appointed for an initial period of three years. All Directors are 
appointed on contracts terminable by the Group on not more than 12 months notice. 22
Ceres Power Holdings plc 
Annual Report 2009
Remuneration Report continued
Non-Executive Directors
The Board aims to recruit and retain Non-Executive Directors of a high calibre with the requisite experience required to 
achieve success for the Group and its shareholders. 
The fees of the Chairman are determined by the Committee and the fees of the Non-Executive Directors are determined by 
the Board following a recommendation from the Chairman after consulting with the Chief Executive. It should be noted that 
neither the Chairman nor the Non-Executive Directors take part in the determination of their own remuneration.
The annual fee levels as at 30 June 2009 are as follows:
        2009 
         £
Chairman          100,000
Senior Non-Executive Director         45,000
Other Non-Executive Directors        40,000
 
Chairs of Board sub-committees, other than the Chairman, earn an additional £5,000 per annum per committee, and 
each of Sir David Brown, Alan Wood and John Nicholas chaired one committee during the year. 
Non-Executive Directors are not eligible to participate in any of the Group’s incentive schemes.
Directors’ emoluments for the year ended 30 June 2009 (audited)
 
     2008/09
|
   2007/08
     Medium    
    term    
   Termination  incentive  Total  
 Salary/fee Pension
1
 payment scheme Total Emoluments Pension Total 
 £ £ £ £ £ £ £ £
Executive
Dr Peter Bance  196,833  16,515  –  73,812 287,160  234,550 22,672 257,222
Rex Vevers  162,225  13,611  –  45,626 221,462  194,550 14,773 209,323
Dr Andrew Baker
2
  93,590 25,062  168,713  114,000  401,365  201,750 37,526 239,276
Philip Holbeche
3
 –  –  –  –  –  269,992 19,847 289,839
Non-Executive
Dr Brian Count
4,5
 100,000  –  –  – 100,000 77,407 –  77,407
Sir David Brown 45,000  –  –  –  45,000 16,667 –  16,667
Alan Wood  42,500  –  –  –  42,500 16,667 –  16,667
John Nicholas
6
 16,741 –  –  –  16,741 –  –  – 
John Gunn
7
 –  – –  –  –  17,500 –  17,500
 656,889  55,188  168,713  233,438 1,114,228  1,029,083 94,818 1,123,901 
1 Pension contribution is based on 8% of gross salary and employer’s National Insurance saved on employee pension contributions.
2 Dr Andrew Baker left the Board of Directors on 31 December 2008. 
3 Philip Holbeche resigned from the Board of Directors on 31 December 2007. 
4 During 2007/08, Dr Brian Count received £7,407 of fees as shares in Ceres Power Holdings plc.
5 Fees totalling £100,000 (2008: £70,000) were paid to Count on B Ltd, a company of which Dr Brian Count was a director.
6 John Nicholas was appointed to the Board of Directors on 16 February 2009.
7 John Gunn resigned from the Board of Directors on 4 February 2008.  23
Ceres Power Holdings plc 
Annual Report 2009
Corporate Governance
Directors’ interests in share options (audited)
    
 At 1 July  At 30 June  
 2008 Granted 2009 Exercise Exercise 
 number number number
1
 price period
Dr Peter Bance
Options (approved)  184,780  –  184,780  £0.30  April 2003–April 2013
Options (unapproved)  1,182,620  –  1,182,620  £0.30  April 2003–April 2013
Options (unapproved)  500,000  –  500,000  £0.30  August 2003–August 2013
Options (unapproved)  200,000  –  200,000  £0.60  April 2004–April 2014
Options (unapproved)  200,000  –  200,000  £2.815  March 2006–March 2016
Options (unapproved)
2
 – 212,500 212,500 £2.00 December 2010–December 2018
Options (unapproved)
3
 – 318,750 318,750 £2.00 December 2011–December 2018
Options (unapproved)
4
 – 318,750 318,750 £2.00 December 2012–December 2018
Sharesave options (approved) – 5,648 5,648 £0.81 July 2012–December 2012
Options (unapproved)
5
 – 38,048 38,048 £0.05 July 2012–June 2019
  2,267,400  893,696 3,161,096
Rex Vevers
Options (approved)  46,510  –  46,510  £2.15  September 2006–September 2016
Options (unapproved)  228,490  –  228,490  £2.15  September 2006–September 2016
Options (unapproved)
2
 – 159,375 159,375 £2.00 December 2010–December 2018
Options (unapproved)
3
 – 239,063 239,063 £2.00 December 2011–December 2018
Options (unapproved)
4
 – 239,062 239,062 £2.00 December 2012–December 2018
Sharesave options (approved) – 5,648 5,648 £0.81 July 2012–December 2012
Options (unapproved)
5
 – 23,518 23,518 £0.05 July 2012–June 2019
 275,000  666,666  941,666
Dr Andrew Baker
Options (approved)  141,664  –  141,664  £0.60  August 2004–August 2014
Options (unapproved)  116,670  –  116,670  £0.60  August 2004–August 2014
Options (unapproved)  41,666  – 41,666  £0.965  July 2005–July 2015
Options (unapproved)  150,000  –  150,000  £2.815  March 2006–March 2016
  450,000  –  450,000
1 Or at date of resignation, if earlier.
2 One-off options, exercisable if the share price is greater than or equal to £4 over 20 consecutive trading days at some point in the exercise period.
3 One-off options, exercisable if the share price is greater than or equal to £5 over 20 consecutive trading days at some point in the exercise period.
4 One-off options, exercisable if the share price is greater than or equal to £6 over 20 consecutive trading days at some point in the exercise period.
5 CHP Project Bonus Plan deferred share options.
All options outlined above are fully exercisable at the Director’s discretion during the relevant exercise period. >
During 2008/09, the Group’s share price varied between 57.75p and 274.5p and was 194p on 30 June 2009. >
Directors’ interests in shares (unaudited)
The Directors held the following interests in the shares of the Company:
    At 1 July At 30 June 
Name    Type  2008  2009
Dr Brian Count    Ordinary shares of £0.05 each  107,850  157,850
Rex Vevers   Ordinary shares of £0.05 each – 60,000
Sir David Brown   Ordinary shares of £0.05 each – 20,000
Alan Wood   Ordinary shares of £0.05 each – 50,000
John Nicholas   Ordinary shares of £0.05 each – 100,000
 
Sir David Brown
Remuneration Committee Chairman
22 September 2009 24
Ceres Power Holdings plc 
Annual Report 2009
Directors’ Report
for the year ended 30 June 2009
The Directors present their report and the audited financial 
statements for the year ended 30 June 2009. 
Principal activity 
The principal activity of the Group throughout the year 
remained the development and commercial exploitation 
of microgeneration products based on the Group’s solid 
oxide fuel cell technology. 
Review of business and future developments
Significant developments and operating activities of the 
Group, as well as the future strategy, business environment 
and prospects for the Group are discussed in detail in the 
Chairman’s Statement and the Chief Executive’s Review on 
pages 2 to 9.
The Group considers its Key Performance Indicators (‘KPIs’) 
to be revenue and the net cash and financial assets 
measured against predetermined targets. The Directors 
were satisfied with the achievement of the KPIs, when 
measured against their targets.
Results and dividends 
The loss for the financial year was £7,978,000 (2008: 
£4,990,000). The cash used in operations during the year 
was £3,900,000 (2008: £3,735,000). At 30 June 2009 the 
Group has net cash and financial assets at fair value 
through profit or loss of £23,009,000 (2008: £27,476,000). 
The Directors do not recommend the payment of a 
dividend (2008: £nil). 
Research and development
During the year, the Group incurred expenditure of 
£6,308,000 (2008: £5,748,000) on research and 
development, all of which was written off to the income 
statement. The Chief Executive’s Review reports on such 
progress during the year. 
Charitable and political contributions
The Group has made no charitable or political 
contributions during the year (2008: £nil).
Principal risks and uncertainties
In addition to financial risk management which is detailed 
in note 15 to the financial statements, there are a number 
of risks and uncertainties which could have a material 
impact on the execution of the Group’s strategy. Risks are 
formally reviewed by the Board and appropriate processes 
and controls put in place to monitor and mitigate them. 
Key business risks are set out as follows:
Technology risk 
The Group has continued to make substantial progress in 
the development of its fuel cell residential Combined Heat 
and Power (‘CHP’) product. However, there is still 
uncertainty regarding the successful development and 
application of the Company’s fuel cell technology to CHP 
and other potential products. Feasibility of the technology 
will be re-assessed when the product development cycles 
are closer to completion. 
Competitive and market risk
The Group continues to target both existing and new 
markets in which to sell its products. Future revenues are 
dependent on the development of such markets and  
the impact on these markets of alternative products  
from competitors. 
Global economic and credit market risk
The impact of the current credit market conditions 
increases the risk of a counterparty exposure should any 
counterparty default on its contractual obligations. The 
Directors expect the current economic conditions to 
continue for some time and will continue to seek to closely 
monitor the risks that arise. 
Intellectual property protection risk
The Group continues to invest in the expansion and 
protection of its portfolio of intellectual property. Rigorous 
internal procedures and controls are in place to capture 
all intellectual property and then to prevent unauthorised 
disclosure to third parties and partners. The Group’s 
competitive advantage is at risk of unauthorised parties 
using the Group’s technology in their own products. 
Growth management risk
The Group has grown significantly in the past year and 
anticipates further growth over the coming years. 
Investment in operational, manufacturing, managerial 
resources and management information systems and 
controls continues in order to meet the expected growth. 
There is a risk that growth will be constrained by  
insufficient resources.
Key personnel dependence risk
As disclosed in the Remuneration Report section of this 
Annual Report and in the notes to the Consolidated 
Financial Statements, the Directors have put in place 
incentive schemes for key personnel. These support the 
existing competitive remuneration packages and 
restrictive employment covenants already in place. These 
are aimed at reducing the risk of disruption to operations 
and damage to the business due to key personnel leaving 
the business. 
Directors
The Directors of the Company, who served during the year, 
are as follows:
Dr Brian Count (Non-Executive Chairman) 
Dr Peter Bance (Chief Executive Officer)
Rex Vevers (Finance Director)
Dr Andrew Baker (Operations Director) – resigned  
31 December 2008
Sir David Brown (Non-Executive Director) 
Alan Wood (Non-Executive Director) 
John Nicholas (Non-Executive Director) – appointed  
16 February 2009 25
Ceres Power Holdings plc 
Annual Report 2009
Corporate Governance
Substantial shareholders
The Company has been notified of the following holdings 
of 3% or more of the 67,029,574 ordinary shares of 5p each 
of the Company on 18 September 2009:
  Number of 
  ordinary 
Investor  shares  %
Oppenheimer Funds Inc   7,392,445  11.03
GB Gas Holdings Limited   6,671,838  9.95
FIL (‘Fidelity Investments Limited’)   3,321,326  4.96
FMR Corp. (‘Fidelity Investments’)   2,766,362  4.13
Imperial Innovations LLP   2,386,276  3.56
Imperial College of Science,  
 Technology and Medicine   2,041,229  3.05
 
Policy and practice on payment of creditors
It is the Group’s policy, in respect of all suppliers, to agree 
payment terms in advance of the supply of goods and 
services and to adhere to those payment terms. Trade 
creditors of the Group at the year end as a proportion of 
amounts invoiced by suppliers during the year represent 
47 days (2008: 27 days). Trade creditors of the Company at 
the year end as a proportion of amounts invoiced by 
suppliers during the year represent nil days (2008: 1 day).
Statement of Directors’ responsibilities 
The Directors are responsible for preparing the Annual 
Report and the financial statements in accordance with 
applicable law and regulations.
Company law requires the Directors to prepare financial 
statements for each financial year. Under that law the 
Directors have elected to prepare the Group financial 
statements in accordance with International Financial 
Reporting Standards (‘IFRS’) as adopted by the European 
Union, and the parent Company financial statements in 
accordance with United Kingdom Generally Accepted 
Accounting Practice (United Kingdom Accounting 
Standards and applicable law).
Under company law the Directors must not approve the 
financial statements unless they are satisfied that they give 
a true and fair view of the state of affairs of the Group and 
the Company and of the profit or loss of the Group for that 
period. In preparing these financial statements, the 
Directors are required to:
select suitable accounting policies and then apply  >
them consistently;
make judgements and accounting estimates that are  >
reasonable and prudent;
state whether IFRSs as adopted by the European Union  >
and applicable UK Accounting Standards have been 
followed, subject to any material departures disclosed 
and explained in the Group and parent Company 
financial statements respectively; and
prepare the financial statements on the going concern  >
basis unless it is inappropriate to presume that the 
Company will continue in business.
The Directors are responsible for keeping adequate 
accounting records that are sufficient to show and  
explain the Company’s transactions and disclose with 
reasonable accuracy at any time the financial position  
of the Company and enable them to ensure that the 
financial statements comply with the Companies Act 2006. 
They are also responsible for safeguarding the assets  
of the Company and the Group and hence for taking 
reasonable steps for the prevention and detection of  
fraud and other irregularities.
The Directors are responsible for the maintenance and 
integrity of the Company’s website. Legislation in the 
United Kingdom governing the preparation and 
dissemination of financial statements may differ from 
legislation in other jurisdictions.
Going concern
After having made appropriate enquires, the Directors 
have a reasonable expectation that the Group and 
Company have adequate resources to progress their 
established strategy for the foreseeable future. 
Accordingly, they continue to adopt the going concern 
basis in preparing these financial statements.
Directors’ statement on disclosure of information  
to auditors
So far as each Director is aware, there is no relevant  
audit information of which the Company’s auditors are 
unaware. Each Director 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
The auditors, PricewaterhouseCoopers LLP, have indicated 
their willingness to continue in office and a resolution 
concerning their reappointment will be proposed at the 
Annual General Meeting.
By order of the Board
 
Brian Count
Chairman 26
Ceres Power Holdings plc 
Annual Report 2009
Independent Auditors’ Report 
to the Members of Ceres Power Holdings plc
We have audited the Group financial statements of Ceres 
Power Holdings plc for the year ended 30 June 2009 which 
comprise the Consolidated Income Statement, the 
Consolidated Balance Sheet, the Consolidated Cash Flow 
Statement, the Consolidated Statement of Changes in 
Equity and the related notes. The financial reporting 
framework that has been applied in their preparation is 
applicable law and International Financial Reporting 
Standards (‘IFRSs’) as adopted by the European Union. 
Respective responsibilities of directors and auditors 
As explained more fully in the Statement of Directors’ 
responsibilities set out on page 25, the Directors are 
responsible for the preparation of the Group financial 
statements and for being satisfied that they give a true 
and fair view. Our responsibility is to audit the Group 
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 Ethical Standards for Auditors. 
This report, including the opinions, has been prepared for 
and only for the Company’s members as a body in 
accordance with Sections 495 and 496 of the Companies 
Act 2006 and for no other purpose. We do not, in giving 
these opinions, accept or assume responsibility for any 
other purpose or to any other person to whom this report is 
shown or into whose hands it may come save where 
expressly agreed by our prior consent in writing.
Scope of the audit of the financial statements 
An audit involves obtaining evidence about the amounts 
and disclosures in the financial statements sufficient to 
give reasonable assurance that the financial statements 
are free from material misstatement, whether caused by 
fraud or error. This includes an assessment of: whether the 
accounting policies are appropriate to the Group’s 
circumstances and have been consistently applied and 
adequately disclosed; the reasonableness of significant 
accounting estimates made by the Directors; and the 
overall presentation of the financial statements.
Opinion on financial statements 
In our opinion the Group financial statements: 
give a true and fair view of the state of the Group’s  >
affairs as at 30 June 2009 and of its loss and cash flows 
for the year then ended; 
have been properly prepared in accordance with IFRSs  >
as adopted by the European Union; and 
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 Group financial 
statements are prepared is consistent with the Group 
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: 
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. 
Other matters 
We have reported separately on the parent Company 
financial statements of Ceres Power Holdings plc for the 
year ended 30 June 2009 and on the information in the 
Directors’ Remuneration Report that is described as having 
been audited. 
Steve Tapping 
(Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Cambridge
22 September 2009  27
Ceres Power Holdings plc 
Annual Report 2009
Financial Statements
Consolidated Income Statement 
for the year ended 30 June 2009
       2009 2008  
      Note  £’000  £’000 
Revenue      2  952  722
Operating costs      3  (10,734)  (7,931)
Other operating income      3  492  845
Operating loss       (9,290)  (6,364)
Finance income      4  967  974
Loss before income tax      3  (8,323)  (5,390)
Income tax credit      7  345  400
Loss for the financial year      19  (7,978)  (4,990)
Loss per £0.05 ordinary share expressed in pence per share:
– basic and diluted      8  (11.94)p  (7.98)p
 
All amounts included in the income statement relate to continuing operations.
The notes on pages 31 to 46 are an integral part of these consolidated financial statements.
  28
Ceres Power Holdings plc 
Annual Report 2009
Consolidated Balance Sheet
as at 30 June 2009
       2009 2008  
      Note  £’000  £’000 
Assets 
Non-current assets 
Property, plant and equipment       9  3,243 2,034
Other receivables       12  81 53
Total non-current assets        3,324  2,087
 
Current assets
Trade and other receivables       12  428 492
Current tax receivable        320 400
Financial assets at fair value through profit or loss      11 9,803 –
Cash and cash equivalents       13  13,206 27,476
Total current assets        23,757 28,368
Liabilities
Current liabilities
Trade and other payables       14  (3,664)  (1,735)
Derivative financial instruments      15  (28) –
Total current liabilities        (3,692) (1,735)
Net current assets        20,065 26,633
 
Non-current liabilities
Other payables       14  (1,966)  (77)
Provisions for other liabilities and charges      16  (30) (13) 
Total non-current liabilities        (1,996) (90)
Net assets        21,393  28,630
 
Equity
Share capital       17  3,344 3,337
Share premium account       19  35,551 35,465
Other reserve       19  7,463 7,463
Profit and loss account (deficit)       19  (24,965)  (17,635)
Total shareholders’ equity        21,393 28,630
 
The notes on pages 31 to 46 are an integral part of these consolidated financial statements.
The financial statements on pages 27 to 46 were approved by the Board of Directors on 22 September 2009 and were 
signed on its behalf by:
Peter Bance Rex Vevers
Chief Executive Officer Finance Director 29
Ceres Power Holdings plc 
Annual Report 2009
Financial Statements
Consolidated Cash Flow Statement
for the year ended 30 June 2009
       2009 2008  
      Note  £’000  £’000 
Cash flows from operating activities 
Cash used in operations       20  (3,900)  (3,735)
Income tax received        425  –
Net cash used in operating activities        (3,475)  (3,735)
 
Cash flows from investing activities
Purchase of property, plant and equipment        (2,088)  (1,095)
Purchase of financial assets at fair value through profit or loss     (10,000) –
Finance income received        1,216 923
Net cash used in investing activities        (10,872)  (172)
Cash flows from financing activities
Proceeds from issuance of ordinary shares        93 20,301
Net expenses of shares issued        –  (81)
Net cash generated from financing activities        93 20,220
Net (decrease)/increase in cash and cash equivalents       (14,254) 16,313
Exchange (losses)/gains on cash and cash equivalents       (16) 21
       (14,270) 16,334
Cash and cash equivalents at beginning of year       27,476 11,142
Cash and cash equivalents at end of year       13  13,206 27,476 30
Ceres Power Holdings plc 
Annual Report 2009
Consolidated Statement of  
Changes in Equity
for the year ended 30 June 2009
       Profi t 
     Share  and loss 
    Share premium Other account 
    capital account  reserve (deficit) Total 
    £’000  £’000  £’000 £’000  £’000
At 1 July 2007     2,981  15,594  7,463  (13,250)  12,788
Issue of shares, net of costs     356  19,864  –  –  20,220
Loss for the financial year     –  –  –  (4,990)  (4,990)
Share-based payments charge     –  –  –  605  605
Share-based remuneration for services     –  7  –  –  7
At 30 June 2008     3,337  35,465  7,463  (17,635)  28,630
Issue of shares, net of costs     7 86 –  –  93
Loss for the financial year     –  –  –  (7,978)  (7,978)
Share-based payments charge     –  –  –  648 648
At 30 June 2009     3,344 35,551 7,463 (24,965)  21,393
 
  31
Ceres Power Holdings plc 
Annual Report 2009
Financial Statements
Notes to the Consolidated  
Financial Statements
for the year ended 30 June 2009
1. Summary of significant accounting policies
The Company is incorporated and domiciled in the United 
Kingdom and is listed on the Alternative Investment Market 
(‘AIM’) of the London Stock Exchange. 
Basis of preparation
The consolidated financial statements of the Group have 
been prepared in accordance with International Financial 
Reporting Standards (‘IFRS’) as adopted by the European 
Union, International Financial Reporting Interpretations 
Committee (‘IFRIC’) interpretations and those parts of the 
Companies Act 2006 applicable to companies reporting 
under IFRS. 
The Company has elected to prepare its entity accounts in 
accordance with United Kingdom Generally Accepted 
Accounting Principles (‘UK GAAP’) and these are 
presented on pages 48 to 52.
The consolidated financial statements have been 
prepared on a historical cost basis except for certain items 
that have been measured at fair value as detailed in the 
individual accounting policies below. 
a) Standards, amendments and interpretations effective 
for the first time in the year ended 30 June 2009:
There are no new Standards, amendments and 
interpretations effective for the first time in the year ended 
30 June 2009.
b) Standards, amendments and interpretations effective in 
the year ended 30 June 2009 but not relevant:
Amendment to IAS 39, ‘Financial instruments: Recognition 
and measurement’, and IFRS 7, ‘Financial instruments: 
Disclosures’, on the ‘Reclassification of financial assets.’
This amendment allows the reclassification of certain 
financial assets previously classified as ‘held-for-trading’ 
or ‘available-for-sale’ to another category under limited 
circumstances. Various disclosures are required where  
a reclassification has been made. Derivatives and assets 
designated as ‘at fair value through profit or loss’ under 
the fair value option are not eligible for this reclassification.
IFRIC 12, ‘Service concession arrangements’. 
This applies to contractual arrangements whereby a 
private sector operator participates in the development, 
financing, operation and maintenance of infrastructure  
for public sector services, for example, under private 
finance initiative (‘PFI’) contracts. 
IFRIC 13, ‘Customer loyalty programmes relating to  
IAS 18, Revenue’. 
This provides guidance on accounting for customer loyalty 
programmes. As the Group does not offer such incentives 
it is not relevant.
IFRIC 14, ‘IAS 19 – The limit on a defined benefit asset, 
minimum funding requirements and their interaction’. 
This provides guidance on accounting for defined benefit 
pension schemes. The Group does not have any such 
schemes and therefore it is not relevant.
c) Forthcoming accounting standards
Standards, amendments and interpretations that are not 
yet effective and have not been early adopted:
Amendment to IFRS 1, ‘First time adoption of IFRS’  
and IAS 27 ‘Consolidated and separate  
financial statements’.
This allows first-time adopters to use a deemed cost of 
either fair value or the carrying amount under previous 
accounting practice to measure the initial cost of 
investment in subsidiaries, jointly controlled entities and 
associates in the separate financial statements. The 
amendment also removed the definition of the cost 
method from IAS 27 and replaced it with a requirement  
to present dividends as income in the separate financial 
statements of the investor. Published on 22 May 2008,  
and effective for annual periods beginning on or after  
1 January 2009, it is not likely to impact the Group.
IFRS 8, ‘Operating segments’. 
This supersedes IAS 14, ‘Segmental reporting’, under which 
segments were identified and reported on a risk and return 
analysis. Under IFRS 8, segments are reported based on 
internal reporting, bringing segment reporting in line with 
the requirements of US standard FAS 131. Published by the 
IASB in November 2006, this Standard is effective for 
annual periods beginning on or after 1 January 2009.
Amendment to IFRS 2, ‘Share-based payment’. 
This clarifies what events constitute vesting conditions and 
also specifies that all cancellations, whether by the Group 
or by another party, should receive the same accounting 
treatment. This may have an impact on the Group 
financial statements and is currently being assessed. 
Published by the IASB on 17 January 2008, this 
amendment is effective for annual periods beginning  
on or after 1 January 2009.
IFRS 3 (Revised), ‘Business combinations’. 
The revision to this standard changes accounting for 
business combinations. While the acquisition method is 
still applied, there are significant changes to the treatment 
of contingent payments, transaction costs and the 
calculation of goodwill. Published by the IASB in January 
2008, the standard is applicable to business combinations 
occurring in accounting periods beginning on or after  
1 July 2009, with earlier application permitted. This could 
impact the Group financial statements in future if it  
makes acquisitions.
IAS 1 (Revised), ‘Presentation of financial statements’. 
This new standard will require ‘non-owner changes in 
equity’ to be presented separately from ‘owner changes  
in equity’. As the Group currently does not have any 
minority interests, it will not be relevant. Published by the 
IASB in September 2007, this standard is effective for 
accounting periods beginning on or after 1 January 2009. 32
Ceres Power Holdings plc 
Annual Report 2009
Notes to the Consolidated  
Financial Statements
for the year ended 30 June 2009 continued
1. Summary of significant accounting policies continued
IAS 23 (Revised), ‘Borrowing costs’. 
A result of the joint short-term convergence project with 
the FASB, this new standard requires an entity to capitalise 
borrowing costs directly attributable to the acquisition, 
construction or production of a qualifying asset as part of 
the cost of that asset. The option of immediately expensing 
those borrowing costs has been removed. This will be 
relevant if the Group funds acquisitions with debt in the 
future. Published by the IASB in March 2007, this is effective 
for annual periods beginning on or after 1 January 2009.
IAS 27 (Revised), ‘Consolidated and separate  
financial statements’. 
This revises the accounting for transactions with  
non-controlling interests. Published by the IASB in  
January 2008, this is not relevant to the Group as  
it does not have any non-controlling interests.
Amendment to IAS 32, ‘Financial instruments: 
Presentation’, and IAS 1, ‘Presentation of  
financial statements’. 
This amendment requires entities to classify the following 
types of financial instruments as equity, provided they 
have particular features and meet specific conditions:
Puttable financial instruments >
Instruments, or components of instruments, that impose  >
on the entity an obligation to deliver to another party  
a pro rata share of the net assets of the entity only  
on liquidation.
Published by the IASB in February 2008, this is effective  
for annual periods beginning on or after 1 January 2009. 
This amendment will not be relevant for the Group.
Amendment to IAS 39, ‘Financial Instruments; Recognition 
and measurement on eligible hedged items’. 
The amendment makes two significant changes. It 
prohibits designating inflation as a hedgable component 
of a fixed rate debt. It also prohibits including time value  
in the one-sided hedged risk when designating options  
as hedges. This does not currently impact the Group. 
Published on 31 July 2008, this is effective for accounting 
periods beginning on or after 1 July 2009 and must  
be applied retrospectively in accordance with 
IAS 8, ‘Accounting Policies’.
Amendment to IFRS 1 on first time adoption of IFRS 
additional exemptions. 
These amendments exempt entities using the full cost 
method from retrospective application of IFRSs for oil and 
gas assets and exempt entities with existing leasing 
contracts from reassessing the classification of those 
contracts in accordance with IFRIC 4. Published on 
23 July 2009 and effective for periods beginning on 
or after 1 January 2010.
Amendments to IFRS 2, Share-based payments group 
cash-settled transactions. 
These amendments provide a clear basis to determine 
the classification of share-based payment awards in both 
consolidated and separate financial statements. The 
amendments incorporates IFRIC 8 and IFRIC 11 into the 
standard, expands on the guidance given in IFRIC 11 
to address plans that were not considered in the 
interpretation and provides some useful tidying up to 
the definitions section of IFRS 2. The amended definitions 
remove inconsistencies between Appendix A, defined 
terms, and the main body of the standard. The original 
wording was inconsistent regarding the treatment of 
equity instruments of other entities in the Group. Published 
on 18 June 2009, the standard is effective for annual 
periods beginning on or after 1 January 2010.
Amendments to IFRIC 9 and IAS 39 regarding  
embedded derivatives. 
The amendment clarifies the accounting treatment of 
embedded derivatives for entities that make use of the 
reclassification amendment issued by the IASB in October 
2008. The reclassification amendment allows entities  
to reclassify particular financial instruments out of the  
‘fair value through profit or loss’ or ‘available for sale’ 
categories in specific circumstances. The amendments  
to IFRIC 9 and IAS 39 clarify that on reclassification of a 
financial asset out of the ‘at fair value through profit or  
loss’ category all embedded derivatives should be 
reassessed and, if necessary, separately accounted for. 
Published in March 2009, and effective for accounting 
periods beginning on or after 1 July 2008 (although not  
yet endorsed by the EU), this is currently not relevant to 
the Group.
Amendment to IFRS 7, ‘Financial instruments: Disclosures’.
This amendment forms part of the IASB’s response to the 
financial crisis and addresses the G20 conclusions aimed 
at improving transparency and enhancing accounting 
guidance. The amendment increases the disclosure 
requirements about fair value measurement and 
reinforces existing principles for disclosure about liquidity 
risk. The amendment introduces a three-level hierarchy 
for fair value measurement disclosure and requires some 
specific quantitative disclosures for financial instruments 
in the lowest level in the hierarchy. In addition, the 
amendment clarifies and enhances existing requirements 
for the disclosure of liquidity risk primarily requiring 
a separate liquidity risk analysis for derivative and 
non-derivative financial liabilities. Published in March 2009, 
this is effective for accounting periods starting on or after 
1 January 2009 with no comparatives for the first year 
of application. 33
Ceres Power Holdings plc 
Annual Report 2009
Financial Statements
1. Summary of significant accounting policies continued
IFRIC 15, ‘Agreements for construction of real estates’. 
The interpretation clarifies which standard (IAS 18 or IAS 11) 
should be applied to particular transactions and is likely  
to mean that IAS 18 will be applied to a wider range of 
transactions. Published on 3 July 2008, and effective for 
annual periods beginning on or after 1 January 2009, it 
is not relevant to the Group.
IFRIC 16, ‘Hedges of a net investment in a  
foreign operation’.
This interpretation clarifies certain areas in respect of 
net investment hedging. Published on 3 July 2008, and 
effective for annual periods beginning on or after 
1 October 2008, it is not relevant to the Group.
IFRIC 17, ‘Distributions of non-cash assets to owners’.
This interpretation clarifies how an entity should measure 
distributions of assets, other than cash, when it pays 
dividends to its owners. The interpretation states that 1). 
a dividend payable should be recognised when 
appropriately authorised; 2). it should be measured at the 
fair value of the net assets to be distributed; and 3). the 
difference between the fair value of the dividend paid and 
the carrying amount of the net assets distributed should 
be recognised in profit or loss. Published in November 
2008, and effective for annual periods beginning on or 
after 1 July 2009, it is currently not relevant to the Group.
IFRIC 18, ‘Transfer of assets from customers’.
This interpretation clarifies the accounting for 
arrangements where an item of property, plant and 
equipment, which is provided by the customer, is used to 
provide an ongoing service. This is particularly relevant to 
the utility sector with the provision of the service being 
that of, for example, gas or electricity. The interpretation 
applies prospectively to transfers of assets from customers 
received on or after 1 July 2009, although some limited 
retrospective application is permitted. Published in 
January 2009, it is currently not relevant to the Group.
Critical accounting estimates and judgements
The preparation of financial statements in conformity with 
IFRS requires management to make judgements, estimates 
and assumptions that affect the reported amounts of 
assets and liabilities at the date of the financial statements 
and the reported amounts of revenues and expenses 
during the reporting period. Commercial revenue is 
recognised over the development phase of each contract 
based on the costs incurred (‘percentage of completion’). 
Although these estimates are based on management’s 
best knowledge of the amount, event or actions, actual 
results ultimately differ from these estimates.
The estimates and underlying assumptions are reviewed 
on an ongoing basis. Revisions to accounting estimates 
are recognised in the period in which the estimate is 
revised. Material estimates and assumptions are made in 
particular with regard to establishing uniform depreciation 
periods for the Group, recognising grant revenue where 
there are no technical milestones in the agreement and 
choosing the appropriate method with which to recognise 
development-related revenue. 
Basis of consolidation
The consolidated financial statements of Ceres Power 
Holdings plc include the results of the Company and its 
wholly owned subsidiaries.
The financial statements of Ceres Power Limited have been 
consolidated under merger accounting rules. The 
financial statements of Ceres Intellectual Property 
Company Limited have been consolidated under 
acquisition accounting rules. 
Intra-group transactions, profits, losses and balances are 
eliminated in full on consolidation. 
The Group has taken the exemption not to apply IFRS 3, 
‘Business combinations’, retrospectively to business 
combinations that took place before 1 July 2006.
Capital risk management
The Group’s objectives when managing capital are to 
safeguard the Group’s ability to continue as a going 
concern and to maintain an optimal capital structure 
by protecting the Group’s equity capital base and 
eliminating/hedging treasury risks that could expose the 
Group to the risk of material loss of capital. The Group had 
a gearing ratio of zero during the current and prior years.
Property, plant and equipment
Property, plant and equipment are stated at historical cost 
less depreciation. Historical cost includes all expenditure 
that is directly attributable to the acquisition of the assets. 
Subsequent costs are included in the asset’s carrying 
amount or recognised as a separate asset, as appropriate, 
only when it is probable that future economic benefits 
associated with the asset will flow to the Group and the 
cost of the asset can be measured reliably. All other 
repairs and maintenance are charged to the income 
statement during the financial period in which they 
are incurred. 34
Ceres Power Holdings plc 
Annual Report 2009
1. Summary of significant accounting policies continued
Property, plant and equipment continued
Depreciation is calculated using the straight-line method to allocate their cost over their estimated useful lives as follows:
 
Leasehold improvements  Ten years or the lease term if shorter
Plant and machinery  Three to five years
Computer equipment  Three years
Fixtures and fittings  Three to ten years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. 
Assets under construction represent the cost of purchasing, constructing and installing property, plant and equipment 
ahead of their productive use. The category is temporary, pending completion of the assets and their transfer to the 
appropriate and permanent category of property, plant and equipment. As such, no depreciation is charged on assets 
under construction.
Cash and cash equivalents
Cash and cash equivalents includes cash at bank and in hand, money market funds and short-term deposits with an 
original maturity of less than or equal to three months, reduced by overdrafts to the extent that there is a right of offset 
against other cash balances. 
Financial assets at fair value through profit or loss
The Group classifies its financial assets at fair value through profit or loss. The classification depends on the purpose  
for which the financial assets were acquired. Management determines the classification of its financial assets at  
initial recognition. 
Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in  
this category if acquired principally for the purpose of selling in the short-term. Assets in this category are classified as 
current assets.
Financial assets carried at fair value through profit or loss are initially recognised at fair value. Gains and losses arising 
from changes in the fair value are presented in the income statement in the period in which they arise.
Trade and other receivables
Trade receivables are recognised and carried at the original invoice amount less an allowance for any uncollectable 
amounts that are made when the full amount is no longer considered receivable. Actual bad debts are written off when 
identified. 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 the receivables. 
Trade payables
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective 
interest method. 
Taxation
The tax credit represents the best estimate of tax due to the Group at the year end.
Deferred tax is provided in full, using the liability method, on temporary differences between the tax bases of assets 
and liabilities and their carrying amounts in the consolidated financial statements. Deferred tax assets are recognised 
to the extent that it is probable that future taxable profit will be available against which the temporary differences can 
be utilised. 
Share-based payments
The Group has a number of employee and executive share option and incentive schemes under which it makes equity-
settled share-based payments. The fair value at the date of grant of equity-settled, share-based payments is expensed 
on a straight-line basis over the vesting period, based on the Group’s estimate of shares that will eventually vest. The 
charge is then credited back to reserves. 
Fair value is measured by use of the Black-Scholes and binomial models. The expected lives used in the models have 
been adjusted, based on the Directors’ best estimates, for the effects of non-transferability, exercise restrictions and 
behavioural considerations. 
Notes to the Consolidated  
Financial Statements
for the year ended 30 June 2009 continued 35
Ceres Power Holdings plc 
Annual Report 2009
Financial Statements
1. Summary of significant accounting policies continued
Foreign currencies
The consolidated financial statements are presented in 
pound sterling, which is the Company’s functional and 
presentational currency. Transactions denominated in 
foreign currencies are translated into sterling at the actual 
rate of exchange ruling at the date of the transaction. 
Monetary assets and liabilities denominated in foreign 
currencies are translated into sterling at rates ruling at the 
balance sheet date. Exchange differences are included in 
the income statement.
Pension scheme arrangements
The Group operates a defined contribution pension 
scheme for employees. The assets of the scheme are held 
separately from those of the Group. The pension costs 
charged represent contributions paid by the Group to 
individual pension plans and are charged to the income 
statement as they become payable.
In addition, a stakeholder pension scheme is also 
available to employees.
Revenue recognition
Revenue comprises the fair value of the consideration 
received or receivable for the sale of goods and services 
in the ordinary course of the Group’s activities. Revenue is 
shown net of value added tax, other sales taxes and after 
eliminating sales within the Group. Amounts received or 
receivable under development contracts are recognised 
as revenue when earned, as calculated on a percentage 
of completion basis, based on costs incurred to total 
estimated costs over the period that the related work is 
performed, subject to certainty of receipt of cash, or when 
any specific conditions in agreements have been met. 
All costs relating to these development contracts are 
recorded as research and development expenditure. As 
revenue represents contributions towards costs incurred, 
no amounts have been allocated to cost of sales.
Government grants
Revenue grants are recognised in the income statement 
(as other operating income) on a case-by-case basis. 
For revenue grants with no technical milestones, and 
where recovery is assured, the revenue is recognised on 
an accruals basis in order to match the associated 
expenditure with the grant income. For revenue grants 
with technical milestones, revenue is recognised only 
when the relevant milestone has been achieved and 
the associated cash has been received. 
Research and development expenditure
Research costs are expensed as incurred. Development 
expenditure is capitalised when it can be separately 
measured and its future recoverability can be reasonably 
regarded as assured. Following initial recognition, the 
related asset is amortised over the period of expected 
future sales with impairment reviews being carried out at 
least annually. The asset is carried at cost less any 
accumulated amortisation and impairment losses. The 
Group has not yet capitalised any development costs as 
the criteria set out in IAS 38, ‘Intangible assets’, have not 
been met, specifically regarding the technical feasibility 
of completing the intangible asset and the probability of 
such an asset generating future economic benefits. 
Operating leases
Leases in which a significant portion of the risks and 
rewards of ownership are retained by the lessor are 
classified as operating leases. Payments made under 
operating leases (net of any incentives received from the 
lessor) are charged to the income statement on a 
straight-line basis over the period of the lease. Benefits 
received and receivable as an incentive to sign an 
operating lease are amortised over the full lease term. 
Derivative financial instruments
The Group’s activities expose it primarily to the financial 
risks of changes in foreign currency exchange rates. 
The Group uses forward foreign exchange contracts to 
hedge against foreign currency denominated purchase 
commitments. The use of financial derivatives is governed 
by the Group’s treasury policy, as approved by the Board. 
The Group does not use derivative financial instruments for 
speculative purposes. Details of financial instruments are 
shown in note 15. 
Changes in the fair value of derivative financial 
instruments that do not qualify for hedge accounting 
are recognised in the income statement as they arise. 
Provisions
Provisions have been made for future dilapidations costs 
on leased property. These provisions are the Directors’ best 
estimates as the actual costs and timing of future cash 
flows are dependent on future events. Any difference 
between expectations and the actual future liability will 
be accounted for in the period when such determination 
is made. Details of the Group’s provisions are set out in 
note 16.
Segment reporting
A business segment is a group of assets and operations 
engaged in providing products or services that are subject 
to risks and returns that are different from those of other 
business segments. A geographical segment is engaged 
in providing products or services within a particular 
economic environment that are subject to risks and returns 
which are different from those of segments operating in 
other economic environments. 
2. Revenue and segmental information
For the year ended 30 June 2009 and the year ended 30 
June 2008 the Group’s revenue and losses were derived 
from its principal activity, within the United Kingdom. For 
management purposes, the Group is organised into 
one business segment, which is the development of 
microgeneration products based on solid oxide fuel 
cell technology. 36
Ceres Power Holdings plc 
Annual Report 2009
3. Loss before income tax 
       2009  2008 
       £’000  £’000
Operating costs are split as follows:
Research and development costs       6,308 5,748
Administrative expenses       4,426 2,183
       10,734 7,931
Loss before income tax is stated after charging/(crediting):
Staff costs, including share-based payments charges (note 5)      5,432 3,938
Depreciation on property, plant and equipment       879 770
Operating lease rentals payable:
– plant and machinery        5 5
– property        153 157
Other operating income – grant income       (492)  (845)
Repairs expenditure on property, plant and equipment      35 20
Forward contract losses       28 –
Net foreign exchange losses/(gains)       15  (16)
Services provided by the Group’s auditors
During the year the Group obtained the following services from the Group’s 
auditors as detailed below:
– remuneration receivable by the Company’s auditors for the audit of 
  parent Company and consolidated financial statements      14 13
– auditing of accounts of subsidiaries of the Company pursuant to legislation     30 32
– other services pursuant to legislation        10 14
– other services relating to taxation        16 13
– other services        4 6
        74 78
4. Finance income
       2009  2008  
       £’000  £’000
Fair value gain on UK Government gilts       119 –
Interest receivable on net cash and financial assets       848  974
       967  974
 
5. Employees and Directors
The average monthly number of persons (including Executive Directors) employed by the Group during the year was:
 
       2009  2008 
       Number  Number
By activity:
Research and development        50  46
Administration         25  12
        75  58
 
       2009  2008 
       £’000  £’000
Staff costs (for the above persons) comprised:
Wages and salaries        4,110 2,819
Social security costs        407 265
Other pension costs (note 6)        267 249
Share-based payments (note 18)       648 605
       5,432 3,938
 
Notes to the Consolidated  
Financial Statements
for the year ended 30 June 2009 continued 37
Ceres Power Holdings plc 
Annual Report 2009
Financial Statements
5. Employees and Directors continued
       2009  2008  
       £’000  £’000
Directors’ emoluments:
Aggregate emoluments        890 872
Company contributions to defined contribution pension schemes      55 95
Compensation for loss of office         169 157
       1,114 1,124
 
       2009  2008 
       £’000  £’000
Highest paid Director:
Aggregate emoluments        270  234
Company contributions to defined contribution pension schemes      17  23
       287  257
 
Two Directors (2008: three Directors) have retirement benefits accruing under defined contribution pension schemes.
 
Detailed disclosures of Directors’ emoluments and interests in share options are shown in the Remuneration Report on 
pages 19 to 23. 
Key management compensation
The Directors are of the opinion that the key management of the Group are the Executive Directors of Ceres Power 
Holdings plc. The key management compensation is summarised in the following table:
 
       2009  2008  
       £’000  £’000
Salaries and other short-term employment benefits       686  744
Post-employment benefits        55  95
Termination benefits         169 157
Share-based payments         225 317 
       1,135  1,313
6. Pensions
The Group operates a defined contribution pension scheme. The assets of the scheme are held separately from those of 
the Group in independently administered funds. The pension cost charge represents contributions payable by the Group 
to the funds and amounted to £267,000 (2008: £249,000). A total of £36,000 was payable to the funds at the year end 
(2008: £41,000).
7. Income tax credit 
       2009  2008 
       £’000  £’000
UK corporation tax – R&D tax credit        (320)  (250)
Adjustment in respect of prior periods – R&D tax credit       (25) (150)
Income tax (credit)        (345)  (400)
 
No corporation tax liability has arisen during the year (2008: £nil) due to the losses incurred.
A tax credit has arisen as a result of the tax losses being surrendered in respect of research and development 
expenditure in the current and prior years. 38
Ceres Power Holdings plc 
Annual Report 2009
7. Income tax credit continued
The tax result for the year is different from the standard rate of corporation tax in the United Kingdom of 21% (2008: 20%). 
The differences are explained below:
       2009  2008  
       £’000  £’000
Loss before income tax        (8,323)  (5,390)
Loss before income tax multiplied by the UK tax rate of 21% (2008: 20%)     (1,748)  (1,078) 
 
Effects of: 
Losses carried forward        1,097  705
Expenses not deductible for tax purposes        2 (153)
Accelerated capital allowances and other timing differences      188 210
Adjustment in respect of prior periods        (25)  (150)
Utilisation of losses       43 –
Tax at marginal rate        98  66
Total income tax (credit)        (345)  (400)
 
8. Loss per share 
Basic and diluted loss per £0.05 ordinary share are calculated by dividing the loss for the financial year attributable to 
ordinary shareholders by the weighted average number of ordinary shares in issue during the year. Given the losses 
during the year, there is no dilution of losses per share in the year ended 30 June 2009 or in the previous year.
The loss for the financial year ended 30 June 2009 was £7,978,000 (2008: £4,990,000) and the weighted average number 
of £0.05 ordinary shares in issue during the year ended 30 June 2009 was 66,813,275 (2008: 62,548,262).
9. Property, plant and equipment
      Assets 
  Leasehold  Plant and  Computer  Fixtures  under 
  improvements  machinery  equipment  and fittings  construction  Total 
  £’000 £’000  £’000  £’000 £’000  £’000
Cost
At 1 July 2007    1,239  1,986  326  62  –  3,613
Additions    65  791  50  13  49  968
Disposals    (2)  (6)  –  –  –  (8)
 
At 30 June 2008    1,302  2,771  376  75  49  4,573
Additions    32 612   98  18 1,328  2,088
Transfers   – 49 – – (49) –
At 30 June 2009    1,334 3,432 474 93 1,328 6,661
 
Depreciation  
At 1 July 2007    356 1,186  184  45  –  1,771
Charge for the year    128  534  95  13  –  770
Released on disposal    (2)  –  –  –  –  (2)
  
At 30 June 2008    482  1,720  279  58  –  2,539
Charge for the year    133 662 75 9  – 879
At 30 June 2009     615 2,382  354  67  –  3,418
Net book value
At 30 June 2009    719 1,050  120  26  1,328  3,243
At 30 June 2008    820  1,051  97  17  49  2,034
At 30 June 2007    883  800  142  17  –  1,842
 
Notes to the Consolidated  
Financial Statements
for the year ended 30 June 2009 continued 39
Ceres Power Holdings plc 
Annual Report 2009
Financial Statements
10. Subsidiary undertakings 
Details of the Company’s subsidiaries at 30 June 2009 are as follows:
   Proportion of nominal  
 Country Description value of shares held  
Name of undertaking  of incorporation  of shares held  by the Company
Ceres Power Limited  England and Wales  £0.001 ordinary shares 100%
Ceres Intellectual Property 
 Company Limited  England and Wales  £1.00 ordinary share  100%
The principal activity of Ceres Power Limited is the development and commercial exploitation of microgeneration 
products based on solid oxide fuel cell technology. The principal activity of Ceres Intellectual Property Company Limited 
is the administration of registered intellectual property developed within the Group. The results of Ceres Power Limited 
and Ceres Intellectual Property Company Limited are included within these consolidated financial statements.
11. Financial assets at fair value through profit or loss
       2009  2008 
       £’000  £’000
Amounts falling due within one year:
UK Government gilts        9,803  –
12. Trade and other receivables
       2009  2008 
       £’000  £’000
Amounts falling due within one year:
Other receivables        184 132
Prepayments and accrued income        244 360
       428 492
Amounts falling due after more than one year:
Prepayments and accrued income        81 53
       509 545
There is no difference between the fair value of trade and other receivables and their carrying values. There have been 
no provisions for impairment of receivables during the year (2008: £nil). The carrying amounts of the Group’s trade and 
other receivables are all denominated in pound sterling.
13. Cash and cash equivalents 
       2009  2008  
       £’000  £’000
Cash at bank and in hand
1
        688  (70)
Money market funds        9,518  27,546
Short-term bank deposits       3,000 –
       13,206  27,476
 
1 The negative cash at bank and in hand balance at 30 June 2008 was due to timing differences relating to unpresented cheques.
The Group holds some surplus funds in pooled money market funds with a credit rating of Aaa/MR1+ from Moody’s 
and AAAm from Standard & Poor’s. These money market funds are benchmarked against one week LIBID and offer 
same day access.
      Interest 2009  2008 
      rate type £’000  £’000
Interest rate risk profile of the Group’s financial assets:
Cash at bank and in hand       Floating  688  (70)
Money market funds       Floating  9,518  27,546
Short-term bank deposits       Fixed  3,000  – 
UK Government gilts      Fixed 9,803 –
       23,009  27,476
  40
Ceres Power Holdings plc 
Annual Report 2009
13. Cash and cash equivalents continued
The fixed rate short-term bank deposits in pound sterling during the year were placed for a fixed term of three months 
and earned interest of 1.36% (2008: between overnight and three months earning between 5.07% and 6.68%). Floating 
rate cash deposits and money market funds earned interest based on relevant UK LIBID-related equivalents. UK 
Government gilts invested are 2009 5.75% Treasury Stock and have an effective yield to maturity of 3.31% over the term 
from date of purchase to expiry date. 
Borrowing facilities
The Group had no undrawn committed borrowing facilities available during the year covered by the financial statements 
(2008: none). 
14. Trade and other payables
       2009  2008 
       £’000  £’000
Amounts falling due within one year:
Trade payables        891  235
Taxation and social security        132  82
Other payables        55  45
Accruals and deferred income        2,586  1,373
       3,664  1,735
Amounts falling due after more than one year, but not more than two years:
Accruals and deferred income        1,914  56
Amounts falling due after more than five years:
Accruals and deferred income         52  21
15. Financial instruments
The Group only uses derivative financial instruments to hedge foreign currency exposures arising from an underlying 
current or anticipated business requirement and not for any speculative purpose. The Group does not currently use 
derivative instruments to manage its interest rate risk. The Group does not trade in financial instruments.
Fair values of financial assets and financial liabilities
There is no difference between the fair value and the carrying value of cash at bank and in hand, money market funds 
and short-term investments. Carrying value approximates to fair value because of the short maturity periods of these 
financial instruments. UK Government gilts are fair value adjusted based on published prices available. 
The Group’s liabilities consist of short-term payables and deferred income falling due after more than one year which do 
not constitute a financial instrument.
Financial risk management 
The Group’s operations expose it to a variety of financial risks that include credit risk and market risk arising from changes 
to foreign currency exchange rates and interest rates. The Board reviews and agrees policies for managing each of 
these risks.
The principal risks addressed are as follows:
Credit risk
The Group’s exposure to credit risk arises from holdings of cash and cash equivalents and financial assets at fair value 
through profit or loss. The Group’s primary objective to manage credit risk is to minimise the risk of a loss of capital and 
eliminate loss of liquidity having a detrimental effect on the business. 
The Group typically places surplus funds into bank deposits with durations of up to three months, pooled money market 
funds and UK Government gilts with durations of up to 12 months. The Group’s credit policy limits investments to short-
term sterling money market funds which carry short-term credit ratings of at least two of AAAm (Standard & Poor’s), Aaa/
MR1+ (Moody’s) and AAA V1+ (Fitch) and money market deposits with long-term rating of AA/AA/Aaa or short-term 
rating of F1+/A-1/P-1.
Interest rate risk
Interest rate risk on the Group’s liabilities is minimal. 
The Group’s finance income is sensitive to changes in interest rates. A change of 1% in interest rates would have 
impacted the finance income by £0.2 million in the year ended 30 June 2009 (2008: £0.2 million). 
Notes to the Consolidated  
Financial Statements
for the year ended 30 June 2009 continued 41
Ceres Power Holdings plc 
Annual Report 2009
Financial Statements
15. Financial instruments continued
Foreign currency exposures
The Group seeks to minimise its exposure to fluctuations in exchange rates by taking out forward currency contracts to 
hedge against foreign currency denominated commitments, when known. At 30 June 2009, 100% (2008: there were no 
foreign currency denominated commitments) of foreign currency commitments were hedged by foreign currency 
contracts. Fair value is based on the market price of comparable instruments at the balance sheet date.
The Group’s gross forward currency contracts are all due in less than one year and the contractual undiscounted 
recorded cashflows at 30 June 2009 were £285,000 (2008: £nil). The mark to market losses of the forward currency 
contracts in the income statement were £28,000 (2008: £nil).
The table below shows the extent to which the Group has monetary assets and liabilities in currencies other than their 
functional currency. Foreign exchange differences arisen on the retranslation of these monetary assets and liabilities are 
taken to the income statement of the Group companies.
       2009  2008 
       £’000  £’000
Foreign currency monetary assets:
United States dollar        75  12
Euro        27  9
       102  21
 
The Group has net euro denominated trade creditors of £67,000 (2008: £nil) and US dollar denominated trade creditors 
of £54,000 (2008: £nil).
The functional currency of the Group is pound sterling. 
16. Provisions for other liabilities and charges
Property dilapidation provisions charged to the income statement are set out below:
       2009  2008 
       £’000  £’000
At 1 July        13  8
Charged to the income statement        17  5
At 30 June       30  13
 
The provision recognised is for the present value of costs to be incurred, which is materially the same as the expected 
costs to be incurred, in making good the various leasehold properties at the end of their respective leases, details of 
which are in note 21. 
Deferred taxation
Potential deferred tax assets have not been recognised but are set out below:
       2009  2008 
       £’000  £’000
Tax effect of temporary differences because of:
Difference between capital allowances and depreciation       (527)  (296)
Deductions on exercise of share options        (2,120)  (1,872)
Losses carried forward        (6,601)  (5,150)
Pensions       (10) –
Other short-term timing differences        –  (233)
       (9,258)  (7,551)
 
The deferred tax assets have not been recognised as the Directors consider that it is unlikely that the asset will be realised 
in the foreseeable future. 42
Ceres Power Holdings plc 
Annual Report 2009
17. Share capital
  2009  
|
  2008 
   Number £’000  Number £’000
Authorised
Ordinary shares of £0.05 each    100,000,000  5,000  100,000,000  5,000
 
Allotted, called up and fully paid
At 1 July    66,740,675  3,337  59,618,027  2,981
Allotted under share option schemes    7,700   1 394,362  20
Allotted under warrant schemes    125,700   6 53,810  3
Issued as remuneration for services    –   – 2,638  –
Allotted on cash placing    –   – 6,671,838  333
Ordinary shares of £0.05 each at 30 June     66,874,075   3,344 66,740,675  3,337
 
During the year the Company issued 7,700 ordinary shares of £0.05 each on the exercise of employee share options for 
cash consideration of £5,088, and 125,700 ordinary shares of £0.05 each on the exercise of warrants for cash 
consideration of £87,990.
Certain investors received warrants, at no additional cost, as part of their investment in Ceres Power Limited. On  
3 September 2004, warrants originally granted over ordinary shares in Ceres Power Limited were surrendered in  
exchange for the grant of warrants over ordinary shares in the Company on identical terms. The warrants expired  
in December 2008 and there are no warrants remaining outstanding at 30 June 2009.
18. Share options
The total charge recognised in the year ended 30 June 2009 relating to employee share-based payments was £648,000 
(2008: £605,000).
The Company has a number of share option schemes and saving-related share option plans for its employees and one 
for Executive Directors. 
       2009  2008 
       £’000  £’000
Employees’ share option scheme        438  605
Executive Directors’ one-off award        175  –
Sharesave plan       3  –
CHP Project Bonus Plan       32  –
       648  605
 
a) Ceres Power Holdings Limited 2004 Employees’ Share Option Scheme
The Company has issued share options under this scheme for Directors and employees, under which approved and 
unapproved share options were granted, prior to the flotation of the Company in November 2004. The Company 
adopted the ‘Ceres Power Holdings Limited 2004 Employees’ Share Option Scheme’ at the time of flotation.
Under this scheme, Directors and employees hold options to subscribe for £0.05 ordinary shares in Ceres Power Holdings 
plc at prices ranging from £0.23 to the closing mid-market price on the day preceding the most recent share option 
grant. All options are equity-settled. The vesting period for all options is generally three years. If the options remain 
unexercised after a period of 10 years from the date of the grant, the options expire. Options are forfeited if the employee 
leaves the Group before the options vest. 
Notes to the Consolidated  
Financial Statements
for the year ended 30 June 2009 continued 43
Ceres Power Holdings plc 
Annual Report 2009
Financial Statements
18. Share options continued
Movements in the total number of share options outstanding and their relative weighted average exercise price are  
as follows:
   2009  
|
 2008 
      Weighted   Weighted 
      average   average 
     Number  exercise  Number  exercise 
     (’000)  price  (’000)  price
Outstanding at 1 July      5,907  £0.92  6,156  £0.89
Granted      506  £1.42  210  £1.91
Exercised      (8)  £0.66  (394)  £0.63 
Lapsed      (57)  £2.19  (65)  £2.64
Outstanding at 30 June      6,348  £0.96  5,907  £0.92
Exercisable      5,699  £0.89  5,183  £0.74
The weighted average fair value of options granted in the year was £413,509 (2008: £220,133). The weighted average 
share price at the date of exercise during the year was £1.89 (2008: £2.91).
The range of exercise prices for options outstanding at the end of the year is as follows:
   2009  
|
 2008 
     Weighted   Weighted 
     average   average 
     exercise  Number  exercise Number 
Expiry date – 30 June     price  (’000)  price (’000)
2012       £0.23  193  £0.23  193
2013      £0.29  1,558  £0.29  1,558
2014      £0.41  2,057  £0.41  2,063
2015       £0.75  385  £0.75  385
2016      £2.31  979  £2.28  1,013
2017      £2.29  485  £2.29  485
2018      £1.91  210  £1.91  210
2019     £1.38 481 – –
The options outstanding at the end of the year have a weighted average contractual life of 5.28 years (2008: 5.96 years).
b) Executive Directors’ one-off award
In addition, during the year, Executive Directors of the Company and Ceres Power Limited were granted ‘one-off’ options 
under the Company’s 2004 Employees’ Share Option Scheme at an exercise price of £2.00, a premium of £1.08 to the 
then market price. The exercise of these share options is subject to continued employment and achievement of absolute 
share price targets. 
2,006,250 options were granted in the year at an exercise price of £2.00. These remain outstanding and unexercisable at 
30 June 2009. The weighted average fair value of the options granted in the year was £1,185,167 (2008: £nil). No options 
were exercised or lapsed in the year or in the previous year. All options expire in the year ending 30 June 2019 and the 
options outstanding at the end of the year have a weighted average contractual life of 9.45 years. The Remuneration 
Report highlights the performance criteria of these options. 
c) Ceres Power Holdings Sharesave scheme
During the year, an HMRC-approved savings-related share option scheme was implemented, under which employees 
save on a monthly basis, over a three-year period, towards the purchase of shares at a fixed price determined when the 
option is granted. This price is set at a 20% discount to the market price. The options must be exercised within six months 
of maturity of the savings contract, otherwise they lapse. 
227,494 options were granted in the year at an exercise price of £0.81. These remain outstanding and unexercisable at  
30 June 2009. The weighted average fair value of options granted in the year was £126,649 (2008: £nil). No options were 
exercised or lapsed in the year or in the previous year. All options expire in the year ending 30 June 2013 and the options 
outstanding at the end of the year have a weighted average contractual life of 3.42 years.  44
Ceres Power Holdings plc 
Annual Report 2009
18. Share options continued
d) CHP Project Bonus Plan
The CHP Project Bonus Plan is a medium-term incentive scheme under which a performance-related bonus of cash and 
nominal value share options is awarded to Executive Directors and senior managers. The exercise of these share options 
is subject to continued employment until 30 June 2012, when they vest, and they must be exercised within 10 years from 
the date of the grant. 
Under the Alpha phase of the CHP Project Bonus Plan 182,185 options were granted in the year at an exercise price of 
£0.05. These all remain outstanding and unexercisable at 30 June 2009. The weighted average fair value of options 
granted in the year was £345,240 (2008: £nil). No options were exercised or lapsed in the year or in the previous year. All 
options expire in the year ending 30 June 2019 and the options outstanding at the end of the year have a weighted 
average contractual life of 9.7 years. 
Assumptions
Fair values of all schemes, apart from the Executive Directors’ one-off award, which was measured using a binomial pricing 
model, were measured by use of the Black-Scholes pricing model. The inputs to the Black-Scholes model were as follows:
       CHP 
     2004 Share- Project 2004 
     scheme save Bonus scheme 
     2009 2009 2009  2008
Grant date     7 July   16 July 
     2008 to   2007 to  
     12 Feb 1 June 30 June 9 June  
      2009 2009  2009  2008
Share price at date of grant (£)    0.68–2.52 1.01 1.94 1.42–3.51
Exercise price (£)    0.68–2.52 0.81 0.05 1.42–3.51
Expected volatility (%)     60–65 65  65  47–60
Expected option life (years)     5–7 3.5 3.5  5–7
Average risk-free interest rate (%)     3.5–5.0 3.5 3.5  3.96–5.71
Expected dividend yield     Nil Nil Nil  Nil
 
Inputs to the binomial model for the Executive Directors’ one-off award were as follows: Grant date as 11 December 2008, 
share price at date of grant was £1.05, expected volatility was 70%, expected option life was seven years, interest free rate 
was 4.0%, discount of 14% to take account of the knock-in barrier being based on the share price being over a certain 
share price for 20 consecutive days in the knock-in period. 
The exercise prices of options are stated above. The expected life of the options is based on the best estimate of the 
average number of years expected from grant to exercise. The expected volatility is based on historic volatility of the 
Company’s shares since it was listed on AIM. The risk-free rate of return is management’s estimate of the yield on zero-
coupon UK Government bonds of a term consistent with the expected option life.
19. Reserves
        Profi t 
      Share   and loss 
      premium  Other  account 
      account  reserve  (deficit) 
      £’000  £’000  £’000
At 1 July 2007       15,594  7,463  (13,250)
Premium on shares issued:
– New shares issued on cash placing (net)      19,600  –  –
– Exercise of share options       229  –  –
– Exercise of warrant rights       35  –  –
– Share-based remuneration for services       7  –  –
Loss for the financial year       –  –  (4,990)
Share-based payments charge       –  –  605
At 30 June 2008       35,465  7,463  (17,635)
Premium on shares issued:
– Exercise of share options       5 –  –
– Exercise of warrant rights       81 –  –
Loss for the financial year       – –  (7,978)
Share-based payments charge       – –  648
At 30 June 2009       35,551 7,463 (24,965)
 
Notes to the Consolidated  
Financial Statements
for the year ended 30 June 2009 continued 45
Ceres Power Holdings plc 
Annual Report 2009
Financial Statements
19. Reserves continued
The other reserve represents a reserve arising on consolidation, being the share capital and share premium account 
balances of Ceres Power Limited at 1 July 2004 less the nominal value of the shares issued by the Company to acquire 
these shares, reflecting the position as if the merger had occurred on 1 July 2004.
20. Cash used in operations 
       2009  2008 
       £’000  £’000
Loss before income tax        (8,323)  (5,390)
Adjustments for:
Fair value gain on UK Government gilts       (119) –
Other finance income       (848)  (974)
Depreciation of property, plant and equipment       879  770
Share-based payments charge       648  605
Share-based remuneration for services       –  7
Operating cash flows before movements in working capital       (7,763)  (4,982)
Decrease in trade and other receivables       28  167
Increase in trade and other payables        3,818  1,075
Increase in provisions       17 5
Decrease in working capital       3,863  1,247
Cash used in operations       (3,900)  (3,735)
 
21. Operating lease commitments
The Group leases premises and office equipment under non-cancellable operating lease agreements. The future 
minimum lease payments under non-cancellable operating leases are as follows:
   2009  
|
 2008 
     Land and   Land and 
     buildings  Other  buildings  Other 
     £’000  £’000  £’000  £’000
No later than 1 year      236 5 153  5
Later than 1 year and no later than 5 years       1,511 6 502  11
Later than 5 years      167 – 213  – 
      1,914 11 868  16
 
The property leases have an average minimum term of 4.8 years (2008: 5.9 years). The rentals are fixed for the lease terms 
subject to periodic rent reviews. The office equipment leases have an average term of 2.4 years (2008: 3.4 years). 
22. Contingent liabilities
During the year, the Group recognised grant income in respect of research and development activities of £492,000 
(2008: £845,000) (see note 3) in accordance with the Group’s accounting policy. The Directors consider that there is a 
contingent liability only in respect of grants received in the 12 months prior to the balance sheet date. The repayment of 
grants received prior to this is considered of remote likelihood, as grants may be required to be repaid if the Group does 
not meet subsequent reporting requirements as specified in the grant offer letters. In addition £651,000 (2008: £624,000) 
of grant income, or an element thereof, may require repayment if the Group generates revenue (net of expenses and 
reasonable overheads) from the patent created from the grant. In such case, the Group may be liable to pay back the 
grant at a rate of 5% of the net revenue generated in any one year. The Directors of the Group believe it is unlikely that 
any of the grants received will need to be repaid in the foreseeable future. 
23. Capital commitments
Capital expenditure that has been contracted for but has not been provided for in the financial statements amounts to 
£536,000 as at 30 June 2009 (2008: £218,000). 46
Ceres Power Holdings plc 
Annual Report 2009
24. Related party transactions
There were no related parties at 30 June 2009. 
The Directors considered in the past that Imperial College and its technology transfer company, Imperial Innovations 
Group plc (and subsidiaries including Imperial Innovations LLP) (‘Imperial’) were related parties by virtue of them 
exerting significant influence through their long relationship with the Group since before 2001 and providing essential 
technical information. However during the year the Directors considered that the influence on the Group by Imperial was 
no longer significant and therefore it is no longer considered to be a related party.
The Directors considered whether Centrica plc, with its significant commercial activity with the Group and 9.9% 
shareholding in the Company through GB Gas Holdings Ltd, is a related party. As Centrica plc does not take part  
in financial or operating policy decisions and has no right to appoint a Board member, the Directors considered  
it does not exert significant influence over the Company and therefore is not a related party. 
 
Notes to the Consolidated  
Financial Statements
for the year ended 30 June 2009 continued 47
Ceres Power Holdings plc 
Annual Report 2009
Financial Statements
Independent Auditors’ Report 
to the Members of Ceres Power Holdings plc
We have audited the parent Company financial 
statements of Ceres Power Holdings plc for the year ended 
30 June 2009 which comprise the Company Balance 
Sheet and the related notes. The financial reporting 
framework that has been applied in their preparation is 
applicable law and United Kingdom Accounting 
Standards (‘United Kingdom Generally Accepted 
Accounting Practice’).
Respective responsibilities of directors and auditors
As explained more fully in the Statement of Directors’ 
responsibilities set out on page 25, the Directors are 
responsible for the preparation of the parent Company 
financial statements and for being satisfied that they give 
a true and fair view. Our responsibility is to audit the parent 
Company 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 Ethical Standards  
for Auditors.
This report, including the opinions, has been prepared for 
and only for the Company’s members as a body in 
accordance with Sections 495 to 497 of the Companies 
Act 2006 and for no other purpose. We do not, in giving 
these opinions, accept or assume responsibility for any 
other purpose or to any other person to whom this report is 
shown or into whose hands it may come save where 
expressly agreed by our prior consent in writing.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts 
and disclosures in the financial statements sufficient to 
give reasonable assurance that the financial statements 
are free from material misstatement, whether caused by 
fraud or error. This includes an assessment of: whether the 
accounting policies are appropriate to the parent 
Company’s circumstances and have been consistently 
applied and adequately disclosed; the reasonableness of 
significant accounting estimates made by the Directors; 
and the overall presentation of the financial statements.
Opinion on financial statements 
In our opinion the parent Company financial statements: 
give a true and fair view of the state of the Company’s  >
affairs as at 30 June 2009;
have been properly prepared in accordance with  >
United Kingdom Generally Accepted Accounting 
Practice; and 
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 part of the Directors’ Remuneration Report to be  >
audited has been properly prepared in accordance 
with the Companies Act 2006; and 
the information given in the Directors’ Report for the  >
financial year for which the parent Company financial 
statements are prepared is consistent with the parent 
Company 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 and the part  >
of the Directors’ Remuneration Report to be audited 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.
Other matters
We have reported separately on the Group financial 
statements of Ceres Power Holdings plc for the year ended 
30 June 2009.
Steve Tapping 
(Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Cambridge
22 September 2009  48
Ceres Power Holdings plc 
Annual Report 2009
Company Balance Sheet
as at 30 June 2009
       2009 2008  
      Note  £’000  £’000
Fixed assets
Investments       4  4,373 3,828
Current assets
Debtors: amounts falling due after more than one year       5  13,582 8,391
Debtors: amounts falling due within one year       5  20 60
Short-term investments        12,803 –
Cash at bank and in hand        9,883 27,582 
        36,288 36,033
Creditors: amounts falling due within one year       6  (210)  (97)
Net current assets        36,078  35,936
Total assets less current liabilities        40,451 39,764
Creditors: amounts falling due after more than one year      7  – (32)
Net assets        40,451 39,732
Capital and reserves
Called up share capital       9  3,344 3,337
Share premium account       10  35,551 35,465
Profit and loss account        10  1,556 930
Total shareholders’ funds        40,451 39,732
 
The financial statements on pages 48 to 52 were approved by the Board of Directors on 22 September 2009 and were 
signed on its behalf by:
Peter Bance Rex Vevers
Chief Executive Officer Finance Director
  49
Ceres Power Holdings plc 
Annual Report 2009
Financial Statements
Notes to the Company  
Financial Statements
for the year ended 30 June 2009 
1. Accounting policies
These separate financial statements of the Company have 
been prepared on the going concern basis, under the 
historical cost convention and in accordance with the 
Companies Act 2006 and applicable accounting 
standards in the United Kingdom. A summary of the more 
important accounting policies, which have been reviewed 
by the Board of Directors in accordance with Financial 
Reporting Standard (‘FRS’) 18, ‘Accounting policies’, and 
which have been applied consistently except where 
noted, is set out below.
Cash flow statement
The Company has taken advantage of the exemption in 
FRS 1 (revised 1996), ‘Cash Flow Statements’, which 
provides that where a company is a member of a group 
and a consolidated cash flow statement is published,  
the Company does not have to prepare a cash  
flow statement.
Fixed asset investments
The investment in Ceres Power Limited is accounted for 
under merger accounting principles and is shown at the 
nominal value of shares issued as consideration for the 
undertaking less any amount written off to reflect a 
permanent diminution in value. The investment in Ceres 
Intellectual Property Company Limited is stated at cost less 
any amount written off to reflect a permanent diminution 
in value. 
Short-term investments
Short-term investments comprise UK Government gilts, 
money market funds and bank deposits that are not 
repayable on demand. UK Government gilts are initially 
recognised at fair value. Gains and losses arising from 
changes in the fair value are included in the profit and  
loss account in the period in which they arise.
Deferred taxation
The Company applies FRS 19, ‘Deferred tax’, which requires 
provision to be made in respect of timing differences 
between the treatment of certain items for accounting 
and tax purposes. Deferred tax assets are recognised only 
to the extent that they are regarded as recoverable. 
Deferred tax assets and liabilities are not discounted.
Share-based payments
Share options
The Group has a number of employee and executive 
share option and award schemes under which it makes 
equity-settled share-based payments. The fair value at  
the date of grant of equity-settled, share-based payments 
is expensed on a straight-line basis over the vesting  
period, based on the Group’s estimate of shares that  
will eventually vest. The charge is then credited back  
to reserves. 
The fair value of employee share options is calculated 
using a Black-Scholes or binomial model. In accordance 
with FRS 20, ‘Share-based payment’, the resulting cost is 
charged to the profit and loss account over the vesting 
periods of the plans. The value of the charge is adjusted  
to reflect the expected and actual levels of options 
vesting. FRS 20 has been applied to all grants of equity 
instruments after 7 November 2002 that were unvested  
as of 1 January 2006.
Options are granted both to employees of the Company 
and to employees of the Group. Following the adoption of 
UITF Abstract 44, ‘FRS 20 – Group and treasury share 
transactions’, all share-based compensation related to 
subsidiary employees has been recharged to the 
subsidiary undertaking by way of a capital contribution to 
the subsidiary. This capital contribution for the current year 
has increased investment value by £545,000 (2008: 
£483,000) with the corresponding credit posted to equity.
Pension scheme arrangements
The Company operates a defined contribution pension 
scheme for employees. The assets of the scheme are held 
separately from those of the Company. The pension costs 
charged represent contributions paid by the Company to 
individual pension plans and are charged to the profit and 
loss account as they become payable.
In addition, a stakeholder pension scheme is also 
available to employees.
Research and development expenditure
Expenditure on research and development is written off to 
the profit and loss account as incurred. 
Related party transactions
The Company has taken advantage of the exemption 
available to parent companies under FRS 8, ‘Related Party 
Disclosures’, not to disclose transactions and balances 
between Group entities which have been eliminated  
on consolidation. 
2. Loss for the year
The Company has taken advantage of the exemption 
available under section 408 of the Companies Act 2006 
and has not presented its profit and loss account. The 
Company’s result for the year was a loss of £22,000  
(2008: £223,000). 50
Ceres Power Holdings plc 
Annual Report 2009
3. Employees and Directors
The average monthly number of persons (including Executive Directors) employed by the Company during the year was:
       2009  2008 
       Number  Number
By activity:
Administration         1  2 
       1  2
 
       2009  2008 
       £’000  £’000
Staff costs (for the above persons):
Wages and salaries         271 542
Social security costs         34 21
Other pension costs         17 42
Share-based payments         103 122 
        425 727
For further information on Directors’ emoluments, see the Remuneration Report on pages 19 to 23.
4. Fixed asset investments
In subsidiary companies:
       2009  2008 
       £’000  £’000
Cost and net book value:  
At 1 July         3,828  3,345
Capital contributions arising from FRS 20 share-based payment charge     545 483
At 30 June         4,373 3,828
 
The capital contributions arising from the FRS 20 share-based payment charge are due to the Company granting share 
options to the employees of Ceres Power Limited. Application of UITF Abstract 44 results in a corresponding increase in 
investment in the subsidiary. 
The Company’s investments comprise interests in Group undertakings, details of which are shown below:
    Proportion of nominal  
    value of shares held  
Name of undertaking   Country of incorporation  Description of shares held  by the Company
Ceres Power Limited   England and Wales  £0.001 ordinary shares  100%
Ceres Intellectual Property 
 Company Limited   England and Wales  £1.00 ordinary share  100%
 
The principal activity of Ceres Power Limited is the development and commercial exploitation of microgeneration 
products based on solid oxide fuel cell technology. The principal activity of Ceres Intellectual Property Company Limited 
is the administration of registered intellectual property developed within the Group. The results of Ceres Power Limited 
and Ceres Intellectual Property Company Limited are included within the consolidated financial statements.
Notes to the Company  
Financial Statements
for the year ended 30 June 2009 continued 51
Ceres Power Holdings plc 
Annual Report 2009
Financial Statements
5. Debtors
       2009  2008 
       £’000  £’000
Amounts falling due within one year:
Other debtors         4 3
Prepayments and accrued income         16  57 
        20 60
Amounts falling due after more than one year:
Amounts owed by Group undertakings       13,582 8,391
        13,602 8,451
The amounts owed by Group undertakings comprise inter-company loans and recharges. No specific repayment or 
interest terms are associated with these amounts. 
A subordination agreement was reached between the Company and Ceres Power Limited during the prior financial 
year. Amounts owed by Ceres Power Limited to the Company (£13,055,307) are subordinated to all other creditors of 
Ceres Power Limited (2008: £8,141,000).
6. Creditors: amounts falling due within one year
       2009  2008 
       £’000  £’000
Trade creditors          – 1
Other taxation and social security         27  12
Accruals and deferred income         183  84
        210 97
 
7. Creditors: amounts falling due after more than one year
       2009  2008  
       £’000  £’000
Amounts owed to subsidiary undertakings        –  32
The amounts owed to subsidiary undertakings were unpaid inter-company charges which were expected to be paid 
within one to two years. No interest was charged on these balances.
8. Provisions for liabilities and charges
Deferred taxation
Potential deferred tax assets have not been recognised but are set out below:
       2008  2007 
       £’000  £’000
Tax effect of temporary differences because of: 
Deductions on exercise of share options         (1,324)  (178)
Losses carried forward         (329) (373)
Other short-term timing differences         –  (227)
       (1,653)  (778)
 
The deferred tax assets have not been recognised as the Directors consider that it is unlikely that the asset will be realised 
in the foreseeable future. 52
Ceres Power Holdings plc 
Annual Report 2009
9. Called up share capital
  2009  
|
  2008  
   Number  £’000  Number  £’000
Authorised
Ordinary shares of £0.05 each    100,000,000  5,000  100,000,000  5,000
 
Allotted, called up and fully paid
Ordinary shares of £0.05 each    66,874,075 3,344 66,740,675  3,337
 
Details of shares issued in the period are provided in note 17 to the Group financial statements. Details of share options 
are disclosed in note 18 to the Group financial statements.
10. Reserves
       Share  Profit 
       premium  and loss 
       account  account  
       £’000  £’000
At 1 July 2008         35,465  930
Premium on shares issued: 
– Exercise of share options         5  –
– Exercise of warrant rights         81  –
Loss for the financial year         –  (22)
Share-based payments charge         –  648
At 30 June 2009         35,551  1,556
 
11. Reconciliation of movements in shareholders’ funds
       2009 2008 
       £’000 £’000
Loss for the financial year        (22) (223)
Proceeds of issue of ordinary share capital        93 20,301
Share issue costs       – (81)
Share-based remuneration for services       – 7
Share-based payment charge       648 605
Net change in shareholders’ funds       719 20,609
Opening shareholders’ funds       39,732 19,123
Closing shareholders’ funds       40,451 39,732
Notes to the Company  
Financial Statements
for the year ended 30 June 2009 continued Ceres Power’s core Fuel Cell 
Module is a solid state 
‘electro-chemical engine’ 
which generates electricity 
and heat directly from fuel  
and air. The patented Ceres 
fuel cell is comprised of thin 
electro-chemical layers 
deposited onto a stainless  
steel substrate. Its operating 
temperature of 500-600
0
C 
enables the use of proven 
cost-effective materials  
and processes.
The Ceres Power Fuel Cell 
Module operates on mains 
natural gas or packaged 
fuels. It forms the core of the 
Group’s residential Combined 
Heat and Power (‘CHP’) 
product and will provide 
a common technology 
platform for a range of 
aligned products. These 
‘distributed generation’ 
products are designed to be 
at the heart of low-carbon 
smart grids around the world.
Ceres Power is establishing an 
in-house mass manufacturing 
capability to produce the core 
Fuel Cell Module in volume 
and is partnering with other 
gas appliance manufacturers 
for the boiler assembly of the 
complete CHP product. Key 
balance of plant components 
and sub-assemblies are being 
co-developed and sourced 
from cost-effective volume 
suppliers. This enables Ceres 
to maximise value capture, 
intellectual property and 
operational efficiency. 
Ceres Power is partnering  
with major corporations 
with well-established direct 
channels to millions of 
customers. International mass 
market opportunities exist for 
cost-effective energy products 
that can reduce carbon 
emissions and address the 
issues of energy efficiency, 
energy security and fuel 
poverty. Ceres Power’s unique 
fuel cell technology can  
meet these global mass 
market requirements to 
power the home, office and 
infrastructure more efficiently 
than today’s solutions.
Technology Products Manufacturing Partners
Directors and Advisors 
for the year ended 30 June 2009
Directors
Dr Brian Count (Non-Executive Chairman)
1
Dr Peter Bance (Chief Executive Officer)
1,2
Rex Vevers (Finance Director)
1,2
Jonathan Watkins (Chief Operating Officer)
2
Bob Flint (Commercial Director)
2
Prof Nigel Brandon (Chief Scientist)
2
Sir David Brown (Non-Executive Senior  
 Independent Director)
1
Alan Wood (Non-Executive Director)
1
John Nicholas (Non-Executive Director)
1
1 Ceres Power Holdings plc
2 Ceres Power Limited
Company Secretary
Richard Preston
Registered Office
Unit 18, Denvale Trade Park
Haslett Avenue East
Crawley 
RH10 1SS
Solicitors
Taylor Wessing
5 New Street Square
London
EC4A 3TW
Statutory Auditors
PricewaterhouseCoopers LLP
Abacus House
Castle Park
Cambridge
CB3 0AN
Bankers
National Westminster Bank plc
South Kensington Station Branch
PO Box No 592
18 Cromwell Place
London
SW7 2LB
Registered Number
5174075
Nominated Advisor (NOMAD)
Morgan Stanley & Co International plc
25 Cabot Square
Canary Wharf
London
E14 4QA
Broker
Morgan Stanley Securities Limited
25 Cabot Square
Canary Wharf
London
E14 4QA
Registrar
Computershare
PO Box 82
The Pavilions
Bridgwater Road
Bristol
BS99 7NH
‘Ceres Power’ and ‘Powered by Ceres’ are registered 
trademarks belonging to the Group.
Ceres Power is developing alternative energy solutions  
to address the global challenges of reducing emissions, 
increasing fuel efficiency and improving energy security.
Our aim is to deliver long-term shareholder value by  
providing clean, efficient, cost-effective decentralised  
energy solutions to global mass markets.  holdings plc
Powered by Ceres
Ceres Power Holdings plc Annual Report 2009
Ceres Power Holdings plc Annual Report 2009
Ceres Power Holdings plc 
Unit 18
Denvale Trade Park
Haslett Avenue East
Crawley
RH10 1SS
Phone: +44 (0)1293 400 404
Fax: +44 (0)1293 400 482
E-Mail: info@cerespower.com
www.cerespower.com