ClearSpeed Technology plc
Annual Report and Accounts 2005
Europe
ClearSpeed Technology plc
3110 Great Western Court
Hunts Ground Road
Bristol BS34 8HP
United Kingdom
T: +44 (0)117 317 2000
F: +44 (0)117 317 2002
USA
ClearSpeed Technology, Inc.
3031 Tisch Way, Suite 200
San Jose
CA 95128
T: +1 408 557 2067
F: +1 408 557 9054 ClearSpeed Annual Report and Accounts 2005
Our business
Our business
ClearSpeed Technology is a specialist semiconductor company focussed 
on the design and development of microprocessors and boards that 
significantly increase computer performance.
Like many semiconductor companies, ClearSpeed subcontracts the 
manufacture, assembly, packaging, testing and shipping of the finished 
products to third parties.
In the UK ClearSpeed is based in Bristol, and in the US it has an office 
in San Jose, “Silicon Valley”.
Contents
01 Highlights
02 At a glance
04 Chairman’s statement
06 Chief Executive Officer’s review
09 Tokyo Institute of Technology contract
10 Main board
11 Officers and professional advisers
12 Directors’ report 
14 Corporate governance report
15 Remuneration committee report (unaudited) 
18 Statement of directors’ responsibilities 
in relation to the financial statements 
19 Independent auditors’ report 
20 Group profit and loss account
Group statement of total recognised 
gains and losses
21 Group balance sheet 
22 Company balance sheet 
23 Group cash flow statement
24 Notes to the financial statements
ClearSpeed’s programmable processors have
been designed to meet the requirements 
of the world’s most compute-intensive
applications, enabling “supercomputing”
capabilities on affordable platforms
including clusters and workstations.
The CSX600 is designed as a co-processor 
to be used alongside general purpose
processors in HPC (high-performance
computer) applications. The technology
addresses the problem of power consumption
and heat generation within the processors.
This is acknowledged to be an increasingly
significant problem in creating high-
performance systems. Reducing processor
power can also reduce total cost of ownership
compared with current solutions.
The CSX600 can also provide a cost-effective
upgrade for existing systems.
Designed and produced by 
www.collegedesign.com ClearSpeed Annual Report and Accounts 2005
Highlights
01
Highlights
•Key part of consortium providing Tokyo
Institute of Technology with Japan’s 
highest performance supercomputer
•Continued investment in product 
roadmap and built-out marketing and
customer support capability to support
commercialisation of products
•Turnover up 78% to £439,000 (2004:
£247,000) – £293,000 in second half 
of the year following release of first
commercial product
•Retained loss of £6,412,000 (2004: 
loss £3,753,000) 
•Year-end cash of £22,232,000 after
successful £20,070,000 of fundraising
•CSX600 processor demonstrated as both
the world’s highest performance and the
most power-efficient processor for 64-bit
floating point operations 
CSX600 Advance
™
Accelerator Board  02
ClearSpeed Annual Report and Accounts 2005
At a glance
Markets
High-performance computing 
Growth in demand for high-performance computers (HPC) is being driven 
by a combination of factors, two of which are particularly important. 
Firstly, HPC systems are no longer required just by government and academic
research laboratories, they are now also a critical tool in key industries which we
see as the wider commercial space for HPC and include important sectors such as: 
• Life Sciences & Biotechnology 
• Energy, Oil & Gas 
• Scientific Computing 
• Digital Content Creation 
• Financial Analysis & Modelling 
Secondly, while specialised systems such as IBM’s Blue Gene, or those from 
Cray, NEC and SGI, meet the need for special purpose systems at the very high
end, in the wider commercial space for HPC a fundamental change has occurred.
Here the use of standard processors, those that have delivered so much in terms
of the cost and capability of PC’s and servers, has come to dominate – for example,
in the year 2000, there were 4 Intel processor-based systems in the TOP500
supercomputer list, whereas in 2005 this had grown to 333.
As in other spaces, the use of these Central Processing Units (CPUs) has brought
HPC systems to a price point where they can be increasingly widely adopted by
these important industries. This has been made possible because companies such
as Intel and AMD have been so successful in exploiting “Moore’s Law” to deliver
CPUs in which performance has doubled approximately every two years. 
Applications
Life sciences & biotechnology
This is a rapidly growing market due to the need
to accelerate the testing of new drug candidates
based on the information made available by
sequencing the human genome. ClearSpeed 
is working with a number of organisations to
accelerate their applications. As part of the 
Tokyo Institute of Technology project, we are
porting amber – a package of molecular
simulation programmes.
Energy, oil & gas
When it costs over $5 million to drill 10,000 feet
below the earth’s surface, high-fidelity seismic
imaging is critical to minimise the risks.
ClearSpeed is committed to help solve the
computational challenges of high-resolution
seismic imaging. ClearSpeed’s roadmap for
delivering high-performance, low-power
streaming co-processors is an ideal enabler 
to the rapid adoption of industry-standard 
CPU-based systems.
In practice
“This is a significant
achievement by ClearSpeed.
We are very pleased that 
the company has chosen 
to demonstrate the potential
of the CSX600 on our
IntelliStation at Heidelberg.”
Dave Turek
Vice President of Deep Computing 
IBM
“We see ClearSpeed as
delivering a key technology
for the next wave of cluster
development and are
delighted that the value 
of this within Sun’s solutions
was immediately validated 
by the Tokyo Institute 
of Technology win.”
Marc Hamilton
Director of Technology, Global Education 
and Research
Sun Microsystems ClearSpeed Annual Report and Accounts 2005
At a glance
03 03
Scientific computing
Research institutions that depend on 
high-performance computing can use
ClearSpeed’s co-processors to accelerate 
existing clusters or workstations. ClearSpeed 
is developing maths libraries such as BLAS,
LAPACK, and FFT.
Digital content creation
With the need to render more complex models
using more sophisticated algorithms, the
processing requirements for visualisation are
increasing continuously. ClearSpeed’s processors
can accelerate these applications, bringing the
performance of a render farm to the desktop.
Applications include animation, physics
modelling, rendering and non-linear editing.
Financial analysis & modelling
Financial companies need to get accurate results
fast to minimise their risk. By accelerating the
analysis and processing of data, ClearSpeed’s
processors can speed the generation of results
and allow more sophisticated models to be used.
The requirement for performance that exceeds the rules of Moore’s Law has been
achieved by increasing the number of CPUs employed in a system. 
In HPC, while adding CPUs is the best solution for many users, there are costs in
terms of power consumption, cooling and space which, for other customers, drive
the need for a new class of processor. Such a processor, termed a “co-processor”
because it would be designed to run alongside and complement those general
purpose CPUs, enables the CPU to continue to do all of the mainstream
processing but off-load the particularly compute-intensive floating point
operations in which HPC performance is measured. 
ClearSpeed is focused on providing this new class of co-processor to a growing
market need, and is becoming increasingly recognised as a leader in the market. 
Embedded systems 
Although ClearSpeed designs its processors primarily to meet the needs of the
HPC market, it has also seen interest within Embedded Systems markets. These
are markets in which systems are not designed as conventional computers but
have intense processing requirements; for example those used in medical
imaging systems.
“Intel’s leading processor-
based HPC platforms are 
the most widely deployed
across high-performance
computing. We see
ClearSpeed’s CSX600 
as a complementary
architecture enhancing
solutions for industries 
such as engineering design,
bio-sciences and research.”
Ben Bennett
Manager of Intel’s world wide 
HPC Program Office
“ClearSpeed’s CSX600
delivers impressive
computational performance
per watt… Combined 
with industry-standard
processors, users can create
accelerated systems with
performance and density far
superior to non-accelerated
systems… that’s pretty 
cool stuff.”
Nathan Brookwood
Principal analyst
Insight 64
“ClearSpeed’s technical
innovation brings high velocity
acceleration to the AMD64
platform for high-performance
computing applications.
ClearSpeed co-processors 
are complementary to 
single- and multicore 
AMD64 solutions and enable
significant acceleration 
in high-performance
computing applications for
workstations and servers
powered by the AMD
Opteron
™
processor with
Direct Connect Architecture.”
Pat Patla
Director of Server/Workstation Marketing,
Microprocessor Solutions Sector
AMD 04
ClearSpeed Annual Report and Accounts 2005
Chairman’s statement
Introduction
ClearSpeed made considerable 
progress during 2005, achieving a
number of significant milestones in 
its markets and product development
whilst at the same time containing
costs. These included delivering the
world’s highest performance processor
for 64-bit floating point operations, 
and culminated in December in both
the group’s first commercial product 
– the Advance
™
Board – becoming
available, and a successful fundraising
which has placed the group in the
position of being well funded to 
address a potentially substantial 
market opportunity. 
Financial results
The group was successful in controlling
both its costs and cash, while at the
same time undertaking a substantial
product development programme and
achieving the steady building-out of the
other capabilities needed to support
the increasing level of commercial
activities. The year finished in line with
group expectations: the retained loss
was £6,412,000 and the cash outflow
from operations was £6,824,000.
Turnover increased to £439,000 for the
year, compared to £247,000 for the
previous year. The growth in revenues
principally occurred towards the end 
of the year when the group’s first
commercial product began to ship 
to customers. The revenue for the
second half of the year was £293,000.
The group finished the year with a
significantly strengthened balance sheet
following the raising of approximately
£20,070,000 (net of expenses) by way
of a placing. 
Technical progress
Since ClearSpeed floated on AIM 
in July 2004, the group has made
considerable progress in achieving 
its technical goals.
During 2005, a key focus was the
continued development of the group’s
first commercial products: the CSX600
processor and the Advance
™
Board
which has two CSX600 processors. 
The CSX600 was demonstrated for 
the first time at the International
Supercomputer Conference at
Heidelberg in June, and is both the
world’s highest performance 64-bit
floating point processor and the world’s
most power-efficient processor for
these performance levels. 
Commercial progress
Following the important milestone 
at Heidelberg in June, in August the
group was invited by Intel to co-present
at the Intel Developer Forum in San
Francisco on the use of the CSX600
with Intel processors running Intel’s
Math Kernel Library. In November, 
the group demonstrated the Advance
™
Board at the Supercomputing
Conference in Seattle and was very
pleased that demonstrations of this
board was also given on the stands of
AMD, IBM, Intel and Sun Microsystems.
“The order from Sun Microsystems for the Tokyo 
Institute of Technology is a significant milestone 
in the group’s development.”
Chairman’s
statement ClearSpeed Annual Report and Accounts 2005
Chairman’s statement
05
On 15 November 2005, the first day 
of that conference, the Tokyo Institute
of Technology announced that
ClearSpeed, as part of a consortium 
led by NEC and Sun Microsystems, had
been selected to deliver Japan’s highest
performance supercomputer. Sun has
announced that, in its first phase, this
computer will use 360 ClearSpeed
Advance
™
Boards. 
Offering power-efficient performance
and using 96 cores in its CSX600
processor, the group was also pleased
that 2005 was the year in which
performance per watt was identified 
as “the new metric” for the industry, 
and that multicore processing became
established as a dominant trend in the
continued development of processors
for the computing industry.
Board
During 2005 the board made two 
key appointments. In September 
Paul Webb, who has extensive
experience in technology companies,
was appointed chief financial officer.
Also in September, Shanker Trivedi was
appointed as a non-executive director.
Shanker has recently joined Callidus
Software as vice-president and chief
marketing officer, and previously was
vice-president of datacentre solutions
for Sun Microsystems Inc. and before
that vice-president and managing
director of Sun Microsystems in 
the UK.
Outlook
I am pleased to report that since 
the end of 2005 the group has
continued to make valuable progress.
The order from Sun Microsystems for
the Tokyo Institute of Technology has
been shipped, which is a significant
milestone in the group’s development.
At the same time, discussions with
other customers are progressing
satisfactorily. 
As a result of the recent fundraising, 
the successful development and
demonstration of the CSX600 processor,
and the increasing commercial activity,
the board believes that ClearSpeed 
is well placed to make further
substantial progress.
David Sebire
Chairman
27 March 2006 
+78%
Increase in turnover
£22.2m
Year-end cash 06
ClearSpeed Annual Report and Accounts 2005
Chief Executive Officer’s review
Overview
The strategic priority for ClearSpeed 
as it entered 2005 was to commence
the transition from its technology
development phase to beginning 
to build out a fully-fledged business.
Throughout the year the group made
considerable progress in achieving 
this goal. 
ClearSpeed made significant progress 
in its technical development and won
its first high-performance computing
system customer. It launched and
commenced shipping its first commercial
product: the Advance
™
Board containing
two CSX600 processors. The group
believes that an increased awareness 
of and interest in its technology from
potential partners and customers is
confirmation that it is potentially well
placed to exploit major trends within 
the industry. 
Costs were contained and cash outflows
from operations were in line with group
expectations. The successful fundraising
will enable ClearSpeed to capitalise 
on and develop its position as the
designer and supplier of the world’s
fastest and most power-efficient
multicore processor for 64-bit floating
point operations.
Market opportunity
Growth in demand for high-performance
computers (HPC) is being driven by 
a combination of factors, two of which
are particularly important. 
Firstly, HPC systems are no longer
required just by government and
academic research laboratories, 
they are now also a critical tool in 
key industries which we see as the
wider commercial space for HPC and
include important sectors such as: 
• Aerospace and Automotive
• Life Sciences & Biotechnology 
• Energy, Oil & Gas 
• Scientific Computing 
• Digital Content Creation 
• Financial Analysis & Modelling 
Secondly, while specialised systems
such as IBM’s Blue Gene, or those from
Cray, NEC and SGI, meet the need for
special-purpose systems at the very
high end, in the wider commercial
space for HPC a fundamental change
has occurred. Here the use of standard
processors, those that have delivered 
so much in terms of the cost and
capability of PCs and servers, has come
to dominate. 
ClearSpeed’s strategy of supplying its
technology to the HPC market through
Advance
™
Boards requires no chip
integration and also allows for systems
upgrades to be easily accommodated,
both retrospectively and for new cluster
systems. In addition to the existing
installed base of HPC cluster systems,
analysts estimate that 150,000 HPC
cluster systems were delivered in 2004
and are forecast to rise to 220,000 HPC
cluster systems in 2007. Through
ClearSpeed’s channel partners in the US
and Far East, the directors are confident
that ClearSpeed’s technology will be
selected for other new HPC projects.
Chief 
Executive 
Officer’s 
review
“The group believes that an increased awareness of and
interest in its technology from potential partners and
customers is confirmation that it is potentially well placed to
exploit major trends within the industry.” ClearSpeed Annual Report and Accounts 2005
Chief Executive Officer’s review
07
CSX600 
The world’s fastest and most power-efficient
multicore microprocessor for 64-bit floating
point performance
07
The group’s strategy of engaging 
with independent software vendors 
and suppliers to port code to the
ClearSpeed processor complements 
its “Plug and Play” strategy in removing
barriers to adoption. Workstation users
with compute-intensive requirements,
such as computer-aided design and
engineering, can access the group’s
technology using the group’s Advance
™
Board. The group has entered into
informal partnerships with various
independent software vendors, and at
the Supercomputing Conference in
Seattle in November 2005 demonstrated
its technology with Mathematica and
MATLAB
®
software packages. These
software packages alone are estimated
to have at least one million users, 
some of whom are expected to have
sufficiently intense computing needs 
to require the processing acceleration
delivered by ClearSpeed’s solutions.
Within the embedded systems market,
the group has also had some initial
commercial success. For example, 
a UK-based defence systems vendor 
has entered into ClearSpeed’s partner
programme for a project, which has 
the potential to result in orders for
thousands of processors.
Technical development
It was a major milestone for the group
that in June 2005 it demonstrated its
first commercial processor, the CSX600. 
Offering up to a sustained performance
of 25 billion 64-bit floating point
operations per second (25GFLOPS), 
the CSX600 is the world’s highest
performance processor for this type 
of compute-intensive work. Achieving
this performance level while consuming
less than 10 watts, the CSX600 is 
also the world’s most power-efficient
processor for this type of application
area. Delivering a processor of this
capability was a very significant
achievement of the whole team 
in 2005. 
The key benefit of such high levels 
of performance (when delivered so
power-efficiently and in a processor
which is complementary to the main
processors from companies such as
AMD, IBM and Intel) is that, by lowering
both the cost of purchase and the cost
of ownership of high-performance and
technical computing systems, the
CSX600 enables teams – in industries 
as diverse as aerospace, financials, 
and oil and gas – to achieve new levels
of accuracy in a much shorter time 
than might previously have been
economically affordable for them,
making a direct contribution to their
productivity, time to market and
competitive advantage.
Business development and build-out
The value proposition offered by the
CSX600 and the group’s Advance
™
Board, each of which contains two
CSX600 processors, was increasingly
recognised during 2005, and this 
led to the group having discussions 
and engagements with numerous
customers and channel partners
including Sun Microsystems and NEC.
The group was also pleased to find that
its pricing assumptions for such a value
proposition were also validated, and the
announcement on 15 November 2005
that ClearSpeed was selected by the
Tokyo Institute of Technology as part 
of a consortium, led by NEC and 
Sun Microsystems, to develop Japan’s
largest supercomputer was a further
major milestone. The order for boards
for this system was received by the
group in 2005 and was worth
approximately $2 million.
While keeping costs lower than
expected during the period, the 
group has continued to develop 
the capabilities needed to deliver 
its products to market. ClearSpeed 
has successfully developed a supply
chain with partners in the US, who 
all have the ability to handle volume
manufacturing. ClearSpeed 
has also strengthened its marketing 
and customer support capability. 
Team
It is through the talent and commitment
of the whole team that so much has
been achieved, both technically and
commercially, in 2005. The group
aspires to recruit and retain very
talented individuals throughout the
functions that it is developing, and to
be a rewarding place in which to work.
The group was therefore pleased that in
2005 it continued to be able to recruit
key individuals in both the USA and the
UK and that turnover within the team
continues to be very low.
Trading
The principal influences on the financial
performance of ClearSpeed during
2005 were the continued investment 
in research and development, 
a building-out of the business reflected 
in an increase in marketing and
administrative expenses and an
increase in working capital to support
the increasing sales activity. The
retained loss for 2005 was £6,412,000,
up from a loss of £3,753,000 for 2004.
Turnover for 2005 was £439,000, 
an increase of 78% on the 2004 
figure of £247,000. This increase is as 
a result of the sale of Advance
™
Boards,
following their release to market during
the fourth quarter. The gross margin for
2005 was 66% (2004: 58%), reflecting
both the sales price levels achieved at
low volumes and the manufacturing
costs associated with low throughput.  08
ClearSpeed Annual Report and Accounts 2005
Chief Executive Officer’s review
Chief 
Executive 
Officer’s 
review 
continued
“The group was successful in meeting most of its goals 
in 2005, and has created a platform from which to continue
this progress in 2006.”
Whilst administrative expenses
increased to £7,378,000 in 2005 from
£4,408,000 in 2004, the business
continued to operate with a lean model
throughout the period. Investment 
in the product roadmap continued,
resulting in research, design and
development expenses for 2005 
being £4,677,000. Marketing and
administrative expenses for 2005 were
£2,701,000, up by £919,000 on the
2004 expenses of £1,782,000. The
majority of the increase was incurred 
in the second half of 2005 when
expenses increased by 73% to reflect
the building-out of sales, marketing 
and customer support activities
following the commercial launch 
of the group’s first product.
Cash flow and fundraising
The continued investment in research
and development and the growth in
marketing and administrative expenses
were the principal reasons for the cash
outflow from operating activities being
£6,824,000 for 2005, up from
£4,238,000 for 2004. 
Purchase of tangible fixed assets 
in 2005 was £321,000 compared to
£84,000 in 2004. Office and computer
equipment with a cost of £216,000 
was purchased to support the new
headcount, which increased from an
average of 35 employees in 2004 to 
54 employees in 2005. Additionally,
with the launch to production of the
company’s first commercial product,
the Advance
™
Board, tooling costing
£105,000 was incurred.
During December 2005, ClearSpeed
raised approximately £20,070,000 
(net of expenses) by way of a placing.
The new funds will be used to: 
• Consolidate the group’s position 
as the designer and supplier of the
world’s fastest and most power-
efficient multicore microprocessor 
for 64-bit floating point performance
• Provide additional working capital 
to finance the commencement of
volume shipments of the group’s 
first products, the CSX600 processor
and Advance
™
Board
• Increase the rate of investment in the
group’s sales and marketing effort
• Increase investment in product
development
• Strengthen the group’s balance sheet
Working capital
The commencement of production of
the group’s first commercial products
resulted in an investment of £251,000
in stock at the end of 2005 (2004: nil).
Trade debtors increased to £173,000 at
the end of 2005, an increase of £89,000
on the balance at the end of 2004,
reflecting the increase in turnover.
The renewal of computer-aided design
licenses during December was the
principal reason for trade creditors
being £922,000 at the end of 2005, 
an increase of £628,000 over the
comparable figure for 2004. The
majority of this expenditure was 
carried forward as a prepayment 
at the end of 2005.
Taxation
Tax credits of £391,000 relating to
research and development activities
were received and credited to the 
profit and loss account during 2005
compared to £275,000 for the 
previous year.
At the end of 2005 the group had 
an unrecognised deferred tax asset 
of £11,400,000 (2004: £9,500,000)
resulting mainly from tax losses. This is
available indefinitely to offset against
future taxable profits of the same trade.
Accounting Standards developments
In June 2003, the Council of the
European Union adopted regulations
requiring listed companies in Member
States to prepare their consolidated
financial statements in accordance 
with International Financial Reporting
Standards (IFRS) from 2005. In 
2004 it was decided that AIM-listed
companies do not need to file their
accounts under IFRS until 2007. The
group has decided to adopt IFRS for
2007 reporting and accordingly the 
first financial results to be announced
prepared in accordance with IFRS 
will be for the first half of 2007.
Accounting standard FRS20, covering
the accounting and reporting of
employee stock options, is required to
be adopted for 2006, and as a result the
financial results for the first half of 2006
will be prepared on this basis.
Summary
Focused on commencing the transition
from its technology development phase
to beginning to build out a fully-fledged
business, the group was successful in
meeting the majority of its goals in
2005, and there is good reason to
believe that this has created a platform
from which to continue this progress
during 2006.
Tom Beese
Chief Executive Officer
27 March 2006 ClearSpeed Annual Report and Accounts 2005
Tokyo Institute of Technology contract
09
$2m
Approximate value of Tokyo Institute of Technology contract
Tokyo Institute of Technology contract
ClearSpeed has shipped the consignment of Advance
™
Boards to 
Sun Microsystems for use in Japan’s largest supercomputer. 
ClearSpeed is contributing 360 Advance
™
Boards for the supercomputer which 
is being built for the Tokyo Institute of Technology (Tokyo Tech). It is expected
to be one of the ten largest supercomputers in the world at 85 TeraFLOPS 
(85 trillion 64-bit floating point operations per second). Other vendors
participating in this system include Sun, AMD and NEC. The supercomputer 
is expected to be up and running in Q2 of 2006.
The Tokyo Tech supercomputer, one of the largest university-based computing
clusters ever built, will be used for compute-intensive applications in a variety 
of research areas, including bio-science, nano-science, environmental and
disaster prevention simulations. When the system is completed, it will be
accessible to every professor and student at Tokyo Tech, in addition to a wide
range of researchers throughout the world.
“Installing this system shows our commitment to increasing supercomputer
performance. By adding more ClearSpeed boards, we can easily reach
hundreds of TeraFLOPS at a nominal cost, on top of our existing infrastructure.” 
Professor Satoshi Matsuoka 
Professor of the Global Scientific Information and Computing Center
Tokyo Institute of Technology 
“ClearSpeed’s Advance
™
Boards helped us to meet the high-performance
specifications for this project; the company’s technology has been an
integral part of the build.”
John Fowler 
Executive Vice President of the Network Systems Group 
Sun Microsystems
“The contract is a superb first win for ClearSpeed and vindication of its
decision to stick with its business strategy during recent years when the
semiconductor industry was going through its worst recession.”
Alex Jarvis 
Research analyst 
KBC Peel Hunt
The Tokyo Institute of Technology,
O-okyama campus 10
ClearSpeed Annual Report and Accounts 2005
Main board
Main board 
David Sebire
Non-executive chairman
David is a chartered accountant. He has
chaired a number of fully listed public
companies and was for approximately
four years a non-executive director of
Westcode Semiconductors Limited, one
of a small number of companies in the
UK operating a silicon wafer fabrication
plant. His current appointments include
being non-executive chairman of
Aerobox plc, a company manufacturing
freight containers in composite
materials for the aviation market. 
He is also a non-executive director 
of Electra Kingsway VCT plc.
Tom Beese
Chief executive officer
Tom has been chief executive officer
since September 2000. He joined the
group from Hewlett-Packard where 
he was a member of the functional
management team of the Data
Protection Organisation and focused 
on the identification of new markets
and development and exploitation 
of new technologies. He joined
Hewlett-Packard after an Executive 
MBA at the University of Bath and
gained his original business experience,
after leaving the Army, in consulting
and in the development and 
turn-around of start-ups.
Paul Webb
Chief financial officer
Paul joined ClearSpeed in September
2005. Previously, he was finance
director and deputy vice-chairman 
at Surface Technology Systems plc. 
Paul has worked at a number of major
companies. He joined Mitel at its 
start-up in Europe, heading the 
finance function for ten years, and 
then progressed to vice-president
European operations. Paul has more
recently held finance and general
management posts with a number 
of international companies in the 
high technology sector.
Richard Farleigh
Non-executive director
Richard first invested in the ClearSpeed
group in 1998 and joined the board 
in 2002. An Australian, he studied
economics and mathematics, and
worked at the Australian Central Bank
before becoming an investment banker
and hedge fund manager. In 1994 he
branched out on his own to become 
a “business angel”. Since then, he has
backed over fifty early-stage technology
companies including Wolfson
Microelectronics, ARC International,
Amino Communications, ANT Software,
Celoxica and Oxonica. He was also 
the major backer behind Home House
in London and is the author of the
investment book, Taming The Lion.
John Hart
Non-executive director
A former CTO and senior vice-president
at 3Com Corporation, John is chair 
of ClearSpeed’s advisory board. 
At 3Com, John was responsible for 
the overall strategic direction of the
company during the period in which 
it transitioned from a $400 million 
p.a. operating system company to 
a $6 billion p.a. networking company. 
John was the strategic worldwide
spokesperson for 3Com at trade shows
and played a key industry and company
role in the introduction of numerous
networking technologies/solutions and
the enhancement of the company’s
patent portfolio from five patents to
over 500. John’s earlier career included
eight years with Vitalink Corporation 
as vice-president engineering and 
five years as an executive consultant 
for the Control Data Corporation.
Currently, John is a member of the
board of directors of Coherent Inc, 
PLX Technology Inc and the advisory
board of Atrica, Inc.
Shanker Trivedi
Non-executive director
Shanker is chief marketing officer 
of Callidus Software Inc, a leading
provider of enterprise incentive
management solutions. Prior to 
joining Callidus Software, Shanker 
held a number of leadership positions
at Sun Microsystems Inc. Prior to 
Sun, he held various sales, marketing,
service, and business management
positions at IBM, Fujitsu/ICL, and 
other companies in the UK and India. 
Shanker is a non-executive director 
of SoftSol India Ltd, a leading provider
of enterprise IT modernisation services.
He has served on several advisory
boards including the UK Government
Information Age Partnership and has
represented Sun on South African
President Thabo Mbeki’s Advisory
Council on the Digital Divide. He is 
also an advisor and mentor to a few
early-stage IT companies that are
centred in Silicon Valley, the UK 
and India.  ClearSpeed Annual Report and Accounts 2005
Officers and professional advisers
11
Officers and
professional 
advisers
Directors
D J Sebire (Non-executive chairman)
T J Beese
P A Webb
R B Farleigh (Non-executive)
J H Hart (Non-executive)
S Trivedi (Non-executive)
Company Secretary
P A Webb
3110 Great Western Court
Hunts Ground Road
Stoke Gifford
Bristol
BS34 8HP
Registered Office
3110 Great Western Court
Hunts Ground Road
Stoke Gifford
Bristol
BS34 8HP
Nominated Adviser
KBC Peel Hunt Limited
111 Old Broad Street
London
EC2N 1PH
Auditors
Ernst & Young LLP
One Bridewell Street
Bristol
BS1 2AA
Solicitors
Osborne Clarke
2 Temple Back East
Temple Quay
Bristol
BS1 6EG
Bankers
Bank of Scotland
New Uberior House
11 Earl Grey Street
Edinburgh
EH3 9BN
Registrar
Computershare Investor Services PLC
PO Box 82 
The Pavilions
Bridgwater Road
Bristol
BS99 7NH
Company Number 
5159262 12
ClearSpeed Annual Report and Accounts 2005
Directors’ report 
Directors’ report 
The directors present their report and the financial statements of the group and company for the year ended 
31 December 2005.
Principal activities and review of the business
The principal activity of the group during the year was that of the research, design and development of semiconductor
processors and Advance
™
Boards for multiple markets and the launch and sale of its first commercial product. On 
15 November 2005 ClearSpeed was selected by the Tokyo Institute of Technology as part of a consortium, led by NEC and 
Sun Microsystems, to develop Japan’s largest supercomputer, which resulted in an order being received for 360 Advance
™
Boards, for delivery in 2006.
Results and dividends
The trading results for the year, and the group’s and company’s financial position at the end of the year, are shown on 
pages 20 to 23. The directors’ report should be read in conjunction with the chairman’s statement on page 4 and the 
chief executive officer’s review on page 6 which include information about the group’s business performance during the
year and an indication of future prospects.
The directors have not recommended a dividend (2004: nil). The group has no plans to adopt a dividend policy in the
foreseeable future. It is the directors’ intention that all funds generated by the group will be invested in the development 
of the business, as is usual for a business in this industry sector and at this stage of development.
Research, design and development
The group is committed to the research, design and development of semiconductor processors for multiple markets. 
The costs relating to this are written off as incurred. In the year, such costs incurred amounted to £4,677,000 (2004: £2,626,000).
Additional funding
An Extraordinary General Meeting convened on 28 December 2005 approved the placing in aggregate of 10,097,560 new
ordinary shares of 1 pence each at a price of 205 pence. The placing raised £20,070,000 net of expenses. The placing shares
were equivalent to approximately 31.1% of the company’s existing share capital and represent approximately 23.7% of the
enlarged issued share capital.
Going concern
The board is satisfied that the group has adequate financial resources to continue to operate for the foreseeable future 
and is financially sound. For this reason, the going concern basis is considered appropriate for the preparation of 
financial statements.
Directors and their interests
The directors who served the company during the year were as follows:
Executive Directors:
T J Beese
P A Webb (appointed 15 September 2005)
S P Murphy (resigned 7 February 2005)
Non-executive Directors:
D J Sebire
J H Hart
R B Farleigh
S Trivedi (appointed 26 September 2005)
T J Beese, J H Hart, P A Webb and S Trivedi will offer themselves for election at the forthcoming AGM.
The interests of directors in the shares of the company are shown in the remuneration committee report on page 15. ClearSpeed Annual Report and Accounts 2005
Directors’ report 
13
Significant holdings
In addition to the directors’ interests shown on pages 15 and 17, the following shareholders had interests of 3% or more 
of the company’s ordinary share capital at 22 March 2006.
Beneficial Holding
Number 
Name of shares %
P H Nominees Ltd (PECLT) 4,454,572 10.46
Willbro Nominees Ltd (PAL) 3,700,140 8.69
Fidelity International Ltd 3,001,602 7.05
The Bank of New York (Nominees) Limited 1,765,634 4.15
PixelFusion plc 1,595,447 3.75
Nutraco Nominees Limited 1,534,190 3.60
HSBC Global Custody Nominee (UK) 1,429,268 3.36
BNY (OCS) Nominees Limited 1,280,669 3.01
Supplier payment policy
It is the policy of the group to agree terms of payment with suppliers in advance and to abide by those terms. 
At 31 December 2005 the company and group had an average of 24 days’ purchases outstanding in trade creditors 
(2004: 39 days).
Charitable and political donations
There were no charitable or political donations in the year.
Auditors
Ernst & Young LLP offer themselves for re-election at the forthcoming AGM.
Approved by the board of directors and signed on behalf of the board
T J Beese
Chief executive officer 
27 March 2006 14
ClearSpeed Annual Report and Accounts 2005
Corporate governance report
Corporate governance report
Compliance with the Combined Code 
As an AIM-listed company, there is no requirement to give a corporate governance report. However, the group recognises
the importance of good corporate governance. The principles and provisions of the Combined Code 2003 have been
considered by the board. The group does not comply with all aspects of the Combined Code, but has adopted it to the
extent the directors consider appropriate for a group of its size and nature. Accordingly, the group has established an audit
committee, a remuneration committee and a nominations committee.
Composition and operation of the board
The board is responsible for the direction and overall performance of the group with emphasis on policy matters, strategy,
financial performance and major operational issues. The board meets at least ten times per year and a meeting timetable is
agreed annually. The board currently comprises the chief executive officer, the chief financial officer and four non-executive
directors, of whom one, David Sebire, is the non-executive chairman.
Audit committee
The audit committee comprises the four non-executive directors (though not necessarily independent). This committee 
is chaired by David Sebire. It is responsible for ensuring that the financial performance of the group is properly reported 
on and monitored, and for reviewing the auditors’ reports relating to accounts and internal control systems.
Remuneration and nominations committees
The remuneration and nominations committees also comprised the four non-executive directors (though not necessarily
independent) and were chaired by David Sebire. On 9 March 2006, David Sebire resigned from the remuneration committee
and John Hart became its chairman. The remuneration committee is responsible for the review and recommendation of the
scale and structure of remuneration for executive directors including the award of share options. Additionally the committee is
also consulted on and reviews the remuneration proposals for senior management positions. The nominations committee
will consider any future appointments to the board.
Internal control/risk management
The directors are responsible for the group’s internal controls, and have established a framework intended to provide
reasonable, but not absolute, assurance against material financial misstatement or loss.
Relationships with shareholders
The chief executive officer and chief financial officer meet on a regular basis with representatives of institutional shareholders
to discuss their views and to ensure that the strategies and objectives of the group are well understood. Issues discussed
with institutional shareholders include the group’s performance and the impact of any major developments. The group 
also has a website which provides information on the group’s aims, and includes a separate investor information section on
which financial data and other significant announcements are published. The website can be found at www.clearspeed.com.
Approved by the board of directors and signed on behalf of the board
T J Beese
Chief executive officer
27 March 2006 ClearSpeed Annual Report and Accounts 2005
Remuneration committee report (unaudited)
15
Remuneration committee report (unaudited)
Remuneration committee 
The remuneration and emoluments of executive directors are determined by the remuneration committee, which
comprised the four non-executive directors chaired by David Sebire. On 9 March 2006, David Sebire resigned from this
committee and John Hart became its chairman. The remuneration committee performs its duties under formal terms of
reference, which include determining, on behalf of the board, the group’s broad policy for executive remuneration and the
individual remuneration packages (including pension rights, annual bonus plans and share option grants) of each of the
executive directors. No director or manager is involved in any decision as to his or her own remuneration. The committee 
is also consulted on and notified of all senior management appointments and related remuneration.
Remuneration policy
The group’s policy on directors’ remuneration is that the overall remuneration package should be sufficiently competitive 
to attract, retain and motivate high-quality executives capable of achieving the group’s objectives and thereby enhancing
shareholder value. The package consists of basic salary, benefits, share options, performance-related bonuses and pensions,
with a proportion based on performance and dependent upon the achievement of demanding targets. 
The group has adopted a share-dealing code for directors and relevant employees in accordance with the AIM rules and will
take proper steps to ensure compliance by the directors and those employees.
Incentive arrangements
It is expected that ClearSpeed will continue to grow its team and that the granting of further options over ordinary shares
will be an important aspect of the group’s ability to attract, retain and incentivise key staff. Accordingly, the company has
authority to grant options to subscribe up to 10% of the company’s issued ordinary share capital in any rolling ten-year
period. Options are granted to directors and employees at the discretion of the remuneration committee and, where determined
as appropriate, such grants may be subject to performance criteria. More detailed information on the share option
schemes is given in Note 19 to the accounts. In addition, within its incentivisation arrangement, the company provides 
for performance-related bonus payments to certain employees, including those connected with the group’s business
development. As disclosed in the prospectus at the time of IPO, the chief executive officer has performance-related bonus
entitlements of up to 60% of annual salary as well as a grant of options over 1,623,503 shares (made in 2004) related to 
both share price performance and the achieving of business milestones.
Pensions
The group makes contributions equivalent to 10% of each of the executive directors’ annual basic salaries into personal
pension plans of the executive directors’ choice. For other employees the group operates a defined contribution pension
scheme to which it makes contributions of 7.5% of annual basic salary.
Directors’ shareholdings in the company
For the directors who held office at 31 December 2005, interests in the ordinary share capital are set out below:
31 December 2005 31 December 2004
(or date of appointment if later)
Number Number 
of ordinary of ordinary
shares % shares %
T J Beese 713,644 1.67 691,449 2.12
P A Webb (appointed 15/09/2005) 4,878 – – –
D J Sebire 12,839 – 10,400 0.03
R B Farleigh9,033,04521.178,959,87427.59
J H Hart 22,720 – – –
S Trivedi (appointed 26/09/2005) 4,878 – – –
T J Beese has a beneficial interest in 713,644 shares; he holds 661,544 in his own name and 52,100 are held by his wife 
D Beese. 16
ClearSpeed Annual Report and Accounts 2005
Remuneration committee report (unaudited)
Remuneration committee report (unaudited)
continued
R B Farleigh has a beneficial interest in 9,033,045 shares; he holds 7,293,207 in his own name and he has a beneficial interest
in the 1,739,838 shares held by Evolution Securities Nominees.
The directors have undertaken only to sell shares through KBC Peel Hunt (for as long as they remain a director and KBC Peel
Hunt remains broker to the company).
The shareholdings of the directors have not changed since 31 December 2005.
The directors’ interests in share options are disclosed on page 17.
Directors’ emoluments
Fees Salary Benefits Bonus Total 2005 Pension 2005 Total 2004 Pension 2004
££££ ££ ££
Tom Beese
(1)
– 140,000 560 75,000 215,560 12,500 172,204 6,250
Paul Webb
(2)(5)
– 32,388 347 6,667 39,402 833 ––
Stephen Murphy
(3)(6)
– 9,286 – – 9,286 846 40,000 3,600
David Sebire
(4)
30,000 – – – 30,000 – 15,000 –
Richard Farleigh 24,000 – – – 24,000 – 12,000 –
John Hart 24,000 – – – 24,000 – 12,000 –
Shanker Trivedi
(5)
6,400 – – – 6,400 – ––
84,400 181,674 907 81,667 348,648 14,179 251,204 9,850
(1) The remuneration package of Tom Beese included non-cash benefit of health insurance. 
(2) The remuneration package of Paul Webb included a benefit of health insurance.
(3) In addition to the amounts shown in the table above, Stephen Murphy received an aggregate amount of nil (2004: £32,000) in return for the provision
of company secretarial and administrative services to ClearSpeed in the period prior to Admission.
(4) Note 25 provides more details of David Sebire’s fees.
(5) Paul Webb was appointed on 15 September 2005 and Shanker Trivedi on 26 September 2005.
(6) Stephen Murphy resigned on 7 February 2005. ClearSpeed Annual Report and Accounts 2005
Remuneration committee report (unaudited)
17
Directors’ interests in share options
For the directors who held office during 2005, the following options were outstanding:
At At
31 December Lapsed 31 December Exercise Exercise
Name/issue date 2004 2005 2005 period price
David Sebire
15 July 2004 104,167 – 104,167 1/3: 15/07/05 – 14/07/14 96.00p
1/3: 15/07/06 – 14/07/14
1/3: 15/07/07 – 14/07/14
Tom Beese
6 June 2002 106,384 – 106,384 26/08/02 – 05/06/12 20.00p
1 July 2002 125,000 – 125,000 1/3: 01/07/03 – 30/06/12 20.00p
1/3: 01/07/04 – 30/06/12
1/3: 01/07/05 – 30/06/12
22 December 2002 216,346 – 216,346 01/10/03 – 21/12/12 29.12p
29 August 2003 206,044 – 206,044 01/04/04 – 28/08/13 29.12p
29 June 2004 62,500 – 62,500 1/3: 29/06/03 – 28/06/14 40.00p
1/3: 29/06/04 – 28/06/14
1/3: 29/06/05 – 28/06/14
29 June 2004 100,683 – 100,683 29/06/04 – 28/06/14 40.00p
15 July 2004
(1)
1,000,000 – 1,000,000 15/07/07 – 14/07/14 96.00p
15 July 2004
(1)
623,503 – 623,503 15/07/07 – 14/07/14 96.00p
John Hart
29 June 2004 10,000 – 10,000 21/07/04 – 28/06/14 40.00p
6 October 2004 28,000 – 28,000 06/10/04 – 05/10/14 144.50p
Stephen Murphy
29 June 2004 10,000 (10,000) –
15 July 2004 52,083 (52,083) –
2,644,710 (62,083) 2,582,627
Notes:
(1) These options over ordinary shares are subject to the achievement of performance targets, set out by the remuneration committee. These performance
targets are linked to the attainment of commercial and business milestones.
The entire option will vest in full on 21 July 2007, if for a qualifying period the share price is at least twice the exercise price.
The Remuneration Committee will review the performance conditions at intervals to ensure they remain appropriate. As a result of any such review 
the Committee may amend or waive the conditions if events occur which cause the Committee to reasonably consider that it would be a fairer 
measure of performance to amend or waive the conditions to ensure they achieve the original purpose.
(2) There have been no changes in directors’ options since 31 December 2005.
(3) No directors have exercised any options during the year.
(4) The non-executive directors are valuable individuals and the share options are granted in recognition of their contribution to the business. 
Approval
This report was approved by the board of directors on 27 March 2006 and signed on its behalf by
David Sebire
Non-executive chairman 18
ClearSpeed Annual Report and Accounts 2005
Statement of directors’ responsibilities 
Statement of directors’ responsibilities 
in relation to the financial statements
Company law requires the directors to prepare accounts for each financial year which give a true and fair view of the state 
of affairs of the company and group at the end of the year and of the profit or loss for the year then ended.
In preparing those accounts, the directors are required to: 
• select suitable accounting policies, and then apply them consistently
•make judgements and estimates that are prudent and reasonable
•state whether applicable accounting standards have been followed subject to any material departures disclosed and
explained in the financial statements
•prepare the accounts on the going concern basis unless it is inappropriate to presume that the company will continue 
in business
The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the
financial position of the company and the group and to enable them to ensure that the accounts comply with the Companies
Act 1985. The directors 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. ClearSpeed Annual Report and Accounts 2005
Independent auditors’ report 
19
Independent auditors’ report 
to the members of ClearSpeed Technology Plc
We have audited the group and parent company’s financial statements of ClearSpeed Technology plc for the year ended 
31 December 2005 which comprise the group profit and loss account, group balance sheet, company balance sheet, 
group cash flow statement, group statement of total recognised gains and losses and the related notes 1 to 26. These
financial statements have been prepared on the basis of the accounting policies set out therein.
This report is made solely to the company’s members, as a body, in accordance with Section 235 of the Companies Act
1985. Our audit work has been undertaken so that we might state to the company’s members those matters we are
required to state to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do 
not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our 
audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
The directors are responsible for preparing the annual report, including the financial statements which are required to be
prepared in accordance with United Kingdom law and applicable United Kingdom accounting standards as set out in the
statement of directors’ responsibilities in relation to the financial statements.
Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and
International Standards on Auditing.
We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared in
accordance with the Companies Act 1985. We also report to you if, in our opinion, the directors’ report is not consistent
with the financial statements, if the company has not kept proper accounting records, if we have not received all the
information and explanations we require for our audit, or if information specified by law regarding directors’ remuneration
and transactions with the group is not disclosed.
We read other information contained in the annual report and consider whether it is consistent with the audited financial
statements. This other information comprises the directors’ report, chairman’s statement, chief executive officer’s review,
remuneration committee’s report and corporate governance statement. We consider the implications for our report if we
become aware of any apparent misstatements or material inconsistencies with the financial statements. Our responsibilities
do not extend to any other information.
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing issued by the Auditing Practices Board. An
audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements.
It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the
financial statements, and of whether the accounting policies are appropriate to the group’s and company’s circumstances,
consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in
order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material
misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the financial statements.
Opinion
In our opinion the financial statements give a true and fair view, in accordance with United Kingdom generally accepted
accounting practice, of the state of affairs of the company and of the group as at 31 December 2005 and the loss of the
group for the year then ended and have been properly prepared in accordance with the Companies Act 1985.
Ernst & Young LLP
Registered Auditor
Bristol
27 March 2006 20
ClearSpeed Annual Report and Accounts 2005
Group profit and loss account and Group statement of total recognised gains and losses
Group profit and loss account
for the year ended 31 December 2005
2005 2004
Notes £000 £000
Turnover 3 439 247
Cost of sales (149) (104)
Gross profit 290 143
Administrative expenses
Research, design and development (4,677) (2,626)
Marketing and administrative expenses (2,701) (1,782)
(7,378) (4,408)
Operating loss 4 (7,088) (4,265)
Interest receivable 8 285 237
Loss on ordinary activities before taxation (6,803) (4,028)
Tax on loss on ordinary activities 9 391 275
Retained loss for the financial year 20 (6,412) (3,753)
Basic and diluted loss per ordinary share 7 (22.9p) (17.8p)
All results are derived from continuing operations.
Notes 1 to 26 form part of these accounts.
Group statement of total recognised gains and losses
for the year ended 31 December 2005
2005 2004
£000 £000
Loss attributable to members of the parent company (6,412) (3,753)
Exchange differences on re-translation of net assets and results of subsidiary undertaking (125) 39
Total recognised gains and losses relating to the year (6,537) (3,714)
All activities of the group are classed as continuing.
Notes 1 to 26 form part of these accounts. ClearSpeed Annual Report and Accounts 2005
Group balance sheet
21
Group balance sheet
at 31 December 2005
2005 2004
Notes £000 £000
Fixed assets
Intangible assets 10 165 169
Tangible assets 11 335 87
500 256
Current assets
Stock 13 251 –
Debtors 14 1,260 638
Cash at bank and in hand 23 22,232 8,975
23,743 9,613
Creditors: amounts falling due within one year 15 1,655 854
Net current assets 22,088 8,759
Total assets less current liabilities 22,588 9,015
22,588 9,015
Capital and reserves
Called–up share capital 19, 20 426 325
Share premium account 20 30,021 10,039
Capital redemption reserve 20 6,361 6,361
Merger reserve 20 33,153 33,153
Profit and loss account 20 (47,373) (40,863)
20 22,588 9,015
These accounts were approved by the board of directors on 27 March 2006 and are signed on their behalf by:
T J Beese
Director
Notes 1 to 26 form part of these accounts. 22
ClearSpeed Annual Report and Accounts 2005
Company balance sheet
Company balance sheet
at 31 December 2005
2005 2004
Notes £000 £000
Fixed assets
Intangible assets 10 165 169
Tangible assets 11 304 87
Investments 12 19,071 19,071
19,540 19,327
Current assets
Stock 13 251 –
Debtors 14 2,889 1,371
Cash at bank and in hand 22,166 8,948
25,306 10,319
Creditors: amounts falling due within one year 15 15,245 14,494
Net current assets/(liabilities) 10,061 (4,175)
Total assets less current liabilities 29,601 15,152 
Capital and reserves
Called-up share capital 19, 20 426 325
Share premium account 20 30,021 10,039
Capital redemption reserve 20 6,361 6,361
Profit and loss account 20 (7,207) (1,573)
20 29,601 15,152
These accounts were approved by the board of directors on 27 March 2006 and are signed on their behalf by:
T J Beese
Director
Notes 1 to 26 form part of these accounts. ClearSpeed Annual Report and Accounts 2005
Group cash flow statement
23
Group cash flow statement
for the year ended 31 December 2005
2005 2004
Notes £000 £000
Net cash outflow from operating activities 21 (6,824) (4,238)
Returns on investments and servicing of finance
Interest received 285 237
Net cash inflow from returns on investments and servicing of finance 285 237
Taxation
UK corporation tax received 391 275
Capital expenditure
Purchase of intangible fixed assets (73) (53)
Purchase of tangible fixed assets (321) (84)
Net cash outflow from capital expenditure (394) (137)
Cash outflow before financing (6,542) (3,863)
Financing
Proceeds on exercise of options 27 9
Issue of ordinary share capital 19 20,530 35,565
Share issue costs (633) (948)
Repayment of loans – (22,463)
Net cash inflow from financing 19,924 12,163
Increase in cash 22 13,382 8,300 24
ClearSpeed Annual Report and Accounts 2005
Notes to the financial statements
Notes to the financial statements
for the year ended 31 December 2005
1. Basis of preparation
The financial statements have been prepared on the going concern basis under the historical cost convention and in
accordance with applicable UK accounting standards.
ClearSpeed Technology Plc (“Technology”) was incorporated on 21 June 2004 for the purpose of achieving admission to
trading on AIM of the existing business of ClearSpeed Solutions Limited (“Solutions”). This was effected by a share-for-share
exchange on 1 July 2004 between the shareholders of these two companies. On the same day the business and assets of Solutions
were purchased by Technology for a consideration of £13,678,641. On 21 July 2004 the company raised approximately
£10.2 million via the issue of shares, net of expenses, and was admitted to trading on AIM. 
The transaction qualified as a group reconstruction within the meaning of FRS6 “Acquisitions and Mergers”, and has been
accounted for using the merger accounting method. 
The consolidated accounts incorporate the accounts of the company and all its subsidiary undertakings drawn up to 
31 December 2005. Subsidiaries are included in the consolidated accounts on the date from which control passes.
The group has adopted FRS21 “Events after the balance sheet date”, FRS22 “Earnings per share”, FRS25 “Financial instruments:
disclosure and presentation” and FRS28 “Corresponding amounts” during the year.
The company has taken advantage of the exemption in S230 (3) of the Companies Act 1985 from presenting its own profit
and loss account.
2. Accounting policies
Turnover
The turnover shown in the profit and loss account represents revenue recognised during the year, excluding VAT. Revenue
from the sale of computer processors and boards is recognised when delivery has occurred. Revenue on any associated
software licence fees is recognised when delivery of the software has occurred, provided that a signed agreement is in place,
the licence fee is fixed and determinable, no specific modification of the software is required, and that the collection of the
fee is probable. Revenues from support agreements are recognised over the term of the contract.
Intangible assets and amortisation
Purchased patents and external costs of the group’s own patent applications are capitalised at cost. Amortisation is calculated
so as to write off the cost of an intangible fixed asset, less its estimated residual value, over the useful economic life of that
asset, which is estimated at 5 years, on a straight-line basis.
The carrying value of intangible assets is regularly reviewed and any provision for impairment in value is charged to the
profit and loss account.
Tangible fixed assets and depreciation
Tangible fixed assets are capitalised at purchase cost plus incidental costs of acquisition.
Depreciation is calculated so as to write off the cost of a tangible fixed asset, less its estimated residual value, over the useful
economic life of that asset as follows:
Plant and machinery – 3 years straight line
Computer equipment – 3 years straight line
Office equipment – 5 years straight line
The carrying value of tangible fixed assets is reviewed for impairment when events or circumstances indicate the carrying
value may not be recoverable.
Investments
Investments are stated at cost, less any provision for impairment in value. ClearSpeed Annual Report and Accounts 2005
Notes to the financial statements
25
2. Accounting policies (continued)
Operating lease agreements
Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor
are charged against profits on a straight-line basis over the lease period.
Pension costs
The group provides a defined contribution Group Personal Pension scheme, with a choice between five providers. Pension
costs are charged to the profit and loss account on the basis of the amount of contributions payable to these schemes in
respect of the accounting year. 
Taxation
Corporation tax is recognised at amounts expected to be paid/recovered using the tax rates and laws that have been
enacted or substantively enacted by the balance sheet date. Tax credits arising on R&D activities are recognised when 
it is virtually certain that a refund will be made, being the earlier of receipt of the cash or notification of the credit.
Deferred taxation
Deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the balance sheet
date where transactions or events have occurred at that date that will result in an obligation to pay more, or right to pay les s
or to receive more, tax, with the following exceptions:
• provision is made for tax on gains arising from the revaluation (and similar fair value adjustments) of fixed assets, or gains
on disposal of fixed assets that have been rolled over into replacement assets, only to the extent that, at the balance sheet
date, there is a binding agreement to dispose of the assets concerned. However, no provision is made where, on the basis
of all available evidence at the balance sheet date, it is more likely than not that the taxable gain will be rolled over into
replacement assets and charged to tax only where the replacement assets are sold
• deferred tax assets are recognised only to the extent that the directors consider that it is more likely than not that there
will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted
• deferred tax is recognised in respect of the retained earnings of overseas subsidiaries only to the extent that, at the balance
sheet date, dividends have been accrued as receivable or a binding agreement to distribute past earnings in future has
been entered into by the subsidiary
Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which timing
differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.
Stock
Stock is stated at the lower of cost and net realisable value. Provision is made for slow-moving, obsolete or defective items
where appropriate. Stock is valued on a FIFO basis.
Foreign currencies
Assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the
balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date 
of the transaction. Exchange differences are taken into account in arriving at the operating result.
The accounts of ClearSpeed Technology Inc. are translated at the rate of exchange ruling at the balance sheet date. 
The exchange difference arising on the retranslation of opening net assets is taken directly to reserves. The profit and loss
account is translated at the average rate of exchange for the year, with any exchange differences arising being treated 
as a movement on reserves on consolidation. All other translation differences are taken to the profit and loss account.
Research, design and development expenditure 
Research, design and development expenditure is written off in the accounting period of expenditure.
Grant income
Grant income is credited to the profit and loss account when it is virtually certain that the income will be received, being the
earlier of receipt of the cash and notification of the credit. 26
ClearSpeed Annual Report and Accounts 2005
Notes to the financial statements
Notes to the financial statements
continued 
3. Turnover
The turnover and loss before tax are attributable to the one principal activity of the group.
The source of all turnover is the United Kingdom. A geographical analysis of turnover by destination is given below:
2005 2004
£000 £000
United Kingdom 114 44
Europe 7 –
USA 243 203
Rest of the World 75 –
439 247
4. Group operating loss
The operating loss is stated after charging/(crediting):
2005 2004
£000 £000
Amortisation 77 68
Depreciation 73 32
Auditors’ remuneration:
– as auditors (Company £20,000) 30 25
– non-audit services 33 9
Operating lease costs:
– land and buildings 99 90
DTI Exceptional Research and Development Grant (27) (129)
Net (profit)/loss on foreign currency translation (98) 68
Management charge to PixelFusion plc (see note 25) (18) –
Details of staff costs can be found in note 5.
In addition to the above, the auditors received nil (2004: £130,000) for non-audit services relating to share issue costs as
part of the IPO process. These costs were debited to the share premium account. ClearSpeed Annual Report and Accounts 2005
Notes to the financial statements
27
5. Employees 
The monthly average number of staff, including executive directors, employed by the group during the financial year
amounted to:
2005 2004
Number Number
Research, design and development 42 29
Sales and marketing 7 3
Administration 5 3
54 35
The aggregate payroll costs of the above were:
2005 2004
£000 £000
Wages and salaries 2,881 1,876
Social security costs 376 195
Other pension costs 161 68
3,418 2,139
Details of directors’ remuneration are included in the directors’ emoluments section of the remuneration committee report
on page 16.
6. Pension costs
During the year pension costs of £161,000 (2004: £68,000) were charged to the profit and loss account. Employee-only
contributions, relating to December payroll, of £12,205 (2004: employee contributions of £7,778) were outstanding at the
year-end and are included within Other Creditors (see note 15).
7. Loss per share
2005 2004
Retained loss for the year (£000) (6,412) (3,753)
Weighted average shares in issue (number) 27,997,209 21,081,296
Basic and diluted loss per ordinary share (pence) (22.9) (17.8)
The loss per ordinary share is based upon the weighted average number of shares adjusted to reflect:
– the exclusion of shares held by the Employee Benefit Trust (see note 19), in accordance with FRS22 “Earnings per share”.
The group has incurred losses in the year and, as such, it is not considered that there are any dilutive events.
Share options have been granted which would have a dilutive impact if the group were profit making.
8. Interest receivable
2005 2004
£000 £000
Bank interest receivable 285 237 28
ClearSpeed Annual Report and Accounts 2005
Notes to the financial statements
Notes to the financial statements
continued 
9. Tax 
(a) Tax on loss on ordinary activities
The tax credit is made up as follows:
2005 2004
£000 £000
Current tax:
Credit in respect of previous year – R&D tax credit (391) (275)
Tax on loss on ordinary activities (391) (275)
(b) Factors affecting current tax credit
The tax assessed on the loss on ordinary activities for the year is lower than the standard rate of corporation tax in the UK 
of 30% (2004: 30%). The differences are reconciled below:
2005 2004
£000 £000
Loss on ordinary activities before tax (6,803) (4,028)
Loss on ordinary activities multiplied by standard rate 
of corporation tax in the UK of 30% (2004: 30%) (2,041) (1,209)
Expenses not deductible for tax purposes 2 39
Decelerated capital allowances 32 21
Short-term timing differences 34 18
Losses arising in the year not relievable 1,973 1,131
Credit in respect of previous year (391) (275)
Total current tax (see note 9(a)) (391) (275)
(c) Factors that may affect future tax charges
The group has a deferred tax asset at the balance sheet date of £11.4 million (2004: £9.5 million) which consists mainly 
of unrelieved tax losses (see note 16). The deferred tax asset has not been recognised as there is insufficient evidence that
there will be suitable profits against which the underlying timing differences can be offset.
10. Intangible fixed assets
Patents
Group and Company £000
Cost:
At 1 January 2005 1,883
Additions 73
At 31 December 2005 1,956
Amortisation:
At 1 January 2005 1,714
Charge for the year 77
At 31 December 2005 1,791
Net book value:
At 31 December 2005 165
At 31 December 2004 169 ClearSpeed Annual Report and Accounts 2005
Notes to the financial statements
29
11. Tangible fixed assets
Plant & Office Computer
machinery equipment equipment Total
Group £000 £000 £000 £000
Cost:
At 1 January 2005 – 176 672 848
Additions 105 55 161 321
Disposals – – (76) (76)
At 31 December 2005 105 231 757 1,093
Depreciation:
At 1 January 2005 – 176 585 761
Charge for the year 6 5 62 73
Disposals – – (76) (76)
At 31 December 2005 6 181 571 757
Net book value:
At 31 December 2005 99 50 186 335
At 31 December 2004 – – 87 87
Plant & Office Computer
machinery equipment equipment Total
Company £000 £000 £000 £000
Cost:
At 1 January 2005 – 176 672 848
Additions 105 50 128 283
Disposals – – (76) (76)
At 31 December 2005 105 226 724 1,055
Depreciation:
At 1 January 2005 – 176 585 761
Charge for the period 6 4 56 66
Disposals – – (76) (76)
At 31 December 2005 6 180 565 751
Net book value:
At 31 December 2005 99 46 159 304
At 31 December 2004 – – 87 87 30
ClearSpeed Annual Report and Accounts 2005
Notes to the financial statements
Notes to the financial statements
continued 
12. Investments
Company Company
2005 2004
£000 £000
Acquisition of ClearSpeed Solutions Limited 6,524 6,524
Capital contribution made to ClearSpeed Solutions Limited
for hive-up of trade and assets 12,547 12,547
19,071 19,071
On 1 July 2004 the company acquired the entire issued share capital of ClearSpeed Solutions Limited, satisfied by the issue
of 652,363,881 ordinary shares of 1p each, credited as fully paid (see note 19).
On the same day the company purchased all of the business and assets of ClearSpeed Solutions Limited (which comprised
the principal business and assets of the group) for £13,678,641, such amount to be left outstanding as an intra-group loan.
The amount in excess of the fair value of the net assets acquired amounted to £12,547,000.
Details of the company’s investments are as follows:
Proportion
of voting
Country of rights and Investment Principal
Name of Company registration shares held £000 activity
Clearspeed Technology Inc. USA 100% – Business development
and sales
Clearspeed Solutions Limited England & Wales 100% 19,071 Dormant
13. Stock
Group Company
2005 2004 2005 2004
£000 £000 £000 £000
Finished goods for resale 251 – 251 –
14. Debtors
Group Company
2005 2004 2005 2004
£000 £000 £000 £000
Trade debtors 173 84 51 79
Other debtors 224 210 224 210
Due from subsidiary undertakings – – 1,771 738
Called-up share capital not paid 170 – 170 –
Prepayments and accrued income 693 344 673 344
1,260 638 2,889 1,371
15. Creditors: amounts falling due within one year
Group Company
2005 2004 2005 2004
£000 £000 £000 £000
Trade creditors 922 294 922 294
Other taxes and social security 100 72 100 72
Other creditors 48 76 7 76
Due to subsidiary undertakings (see note 12) – – 13,679 13,679
Accruals and deferred income 585 412 537 373
1,655 854 15,245 14,494 ClearSpeed Annual Report and Accounts 2005
Notes to the financial statements
31
16. Deferred taxation
The deferred tax asset not recognised is as follows:
Group Company
2005 2004 2005 2004
£000 £000 £000 £000
Decelerated capital allowances (1,664) (1,625) (1,664) (1,625)
Tax losses available to carry forward (9,757) (7,853) (9,757) (7,853)
Other timing differences (50) (18) (50) (18)
(11,386) (9,496) (11,386) (9,496)
The deferred tax asset has not been recognised as there is insufficient evidence that there will be suitable profits against
which the underlying timing differences can be offset.
17. Financial instruments
The group’s principal financial instruments comprise cash and liquid resources and these are used to finance the group’s
operations. The group’s objectives in using financial instruments are to maximise the returns on funds held on deposit, 
to minimise exchange rate risk where appropriate, and to generate additional cash resources through the issue of shares
when appropriate.
It is the group’s policy that no speculative trading in financial instruments is undertaken.
Short-term debtors and creditors have been excluded from the following disclosures, other than currency risk disclosures, 
as permitted by FRS13 “Derivatives and other financial instruments: disclosures”.
Foreign currency risk
The group has foreign currency exposures, which consist of the monetary assets and liabilities of the group, including those
with Clearspeed Technology Inc. in the US.
As at 31 December these currency exposures are as follows:
US$ Euro Total
£000 £000 £000
2005
Sterling (204) 8 (196)
2004
Sterling (124) – (124)
Interest rate risk and liquidity risk of the group’s financial assets
The group is principally funded with equity and invests its funds in short-term bank deposits, with access to these deposits
at a maximum of 30 days’ notice. The group’s policy is to minimise the risk by placing funds in low-risk cash deposits but 
to also maximise the return on funds placed on deposit.
Interest rate profile of the group’s financial assets
The only financial asset of the group is cash. Interest rates on overnight cash deposits are at a variable rate connected 
to LIBOR.
Interest rate risk profile of the group’s financial liabilities
The group had no financial liabilities at 31 December 2005 (2004: nil).
Borrowing facilities
The group had no borrowing facilities at 31 December 2005 (2004: nil). 32
ClearSpeed Annual Report and Accounts 2005
Notes to the financial statements
Notes to the financial statements
continued 
17. Financial instruments (continued)
Fair values
The directors consider there to be no material difference between the fair value and the carrying values of the financial
instruments at the balance sheet dates.
Market price risk
The principal market price risk comprises interest rate exposure. Funds are invested in money market cash deposits with the
objective of maintaining a balance between accessibility of funds and competitive rates of return. The group’s exposure to
any rise in interest rates is not significant, as the group has no financial liabilities that would be affected by such a rise.
18. Commitments
The group had purchase commitments at 31 December 2005 of £1,830,000 (2004: nil).
The group and company had annual commitments under non-cancellable operating leases as set out below.
Group Company
2005 2004 2005 2004
Land & Land & Land & Land &
buildings buildings buildings buildings
£000 £000 £000 £000
Operating leases which expire:
Within one year – 23 – 23
– 23 – 23
19. Share capital
Authorised share capital:
Group and Company
2005 2004
£000 £000
60,000,000 ordinary shares of 1p each 600 600
Allotted and called-up:
Group Company
2005 2004 2005 2004
£000 £000 £000 £000
Fully paid
42,578,047 (2004: 32,480,487)
ordinary shares of 1p each 425 325 425 325
Unpaid
82,927 (2004: nil)
ordinary shares of 1p each 1 – 1 –
426 325 426 325
Movements in share capital
On 30 December 2005 10,097,560 new shares were issued at 205p per share. 82,927 of the newly issued shares were
unpaid at 31 December 2005.
On incorporation on 21 June 2004 as a public limited company, 700,000,000 ordinary shares of 1p each were authorised
and 2 ordinary shares were issued at 1p each.  ClearSpeed Annual Report and Accounts 2005
Notes to the financial statements
33
19. Share capital (continued)
On 1 July 2004, 652,363,881 ordinary shares were issued to the former shareholders of ClearSpeed Solutions Limited to
acquire the entire issued share capital of ClearSpeed Solutions Limited.
On 15 July 2004, of each holding of 40 ordinary shares, 39 ordinary shares were converted and redesignated as 1p deferred
shares. The company purchased the 636,054,779 1p deferred shares for an aggregate consideration of 1p, funded from 
the proceeds of the issue of one ordinary share at par. The authorised but unissued deferred shares were converted into
authorised but unissued ordinary shares. 640,000,000 of the authorised but unissued ordinary shares were then cancelled.
11,554,428 new ordinary shares were issued for £10.2m, net of share issue costs, in July 2004 in relation to the successful
application for admission to AIM. 10,418 new ordinary shares were issued to employees in the placing at 96p per share.
4,606,537 new ordinary shares were issued to the ClearSpeed Technology Employee Benefit Trust (EBT) in July 2004 at par.
Share option schemes
The Enterprise Management Incentive Plan (EMI Plan) was used for the grant of options prior to Admission. This plan
complies with the provision of Schedule 5 Income Tax (Earnings and Pensions) Act 2003. Following admission, no further
grants will be made under it. Options, which were granted under the EMI Plan, were exchanged for new equivalent options
over the company’s ordinary shares on Admission.
Since Admission to AIM, option grants have been made under a new plan known as the ClearSpeed Technology Plc Share
Option Plan. This plan provides for the grant of EMI options, unapproved options and tax-approved incentive stock options
for US employees.
The EMI Plan
The exercise price is determined by the board but, in the case of options to subscribe, must be not less than the nominal
value of a share. The date and conditions of exercise of the options are set out in the individual participant’s option
agreement. Unexercised options lapse on the tenth anniversary of the date of grant.
The exercise of options may be subject to the satisfaction of performance conditions as determined by the board from time
to time.
The EMI plan will terminate on 30 May 2012, or earlier if the board so resolves.
The ClearSpeed Technology plc Share Option Plan
The Plan has three parts. The first part complies with the provisions of Schedule 5 Income Tax (Earnings and Pensions) Act
2003 relating to Enterprise Management Incentive Options (EMI). The second part is designed to grant options on similar
terms, but is unapproved and accordingly is not subject to EMI requirements and does not benefit from the tax advantages
associated with EMI. The third part enables Incentive Stock Options (ISOs) to be granted to US tax-resident employees on
similar terms, subject to any modifications required to take account of US tax, exchange control or regulatory requirements.
The arrangements for distributing share options and the exercise of those options are the same as those for the EMI plan. 34
ClearSpeed Annual Report and Accounts 2005
Notes to the financial statements
Notes to the financial statements
continued 
19. Share capital (continued)
The following options grants were outstanding under the share option schemes:
At 31
December At 31
2004 Issued in Exercised Lapsed December Exercise
Grant dates
(1)
(restated) 2005 2005 2005 2005 Price
6 June 2002 633,923 – (49,260) – 584,663 20.00p
1 July 2002
(2)
467,500 – (16,666) – 450,834 20.00p
26 August 2002
(3)
100,000 – (39,000) – 61,000 29.12p
22 December 2002 896,379 – – – 896,379 29.12p
29 August 2003 559,692 – – – 559,692 29.12p
29 June 2004
(4)(6)
118,845 – (3,200) – 115,645 40.00p
29 June 2004
(5)(6)
441,250 – (4,300) – 436,950 40.00p
29 June 2004
(7)
345,666 – – – 345,666 40.00p
29 June 2004
(10)
10,000 – – (10,000) – 40.00p
15 July 2004
(8)
1,623,503 – – – 1,623,503 96.00p
15 July 2004
(9)
156,250 – – (52,083) 104,167 96.00p
23 September 2004 42,782 – – – 42,782 130.50p
6 October 2004
(12)
28,000 – – – 28,000 144.00p
18 October 2004
(11)
100,000 – – – 100,000 178.50p
3 November 2004
(11)
28,741 – – – 28,741 190.50p
21 April 2005 – 32,396 – – 32,396 178.50p
25 May 2005 – 30,136 – – 30,136 181.50p
1 June 2005 – 32,745 – – 32,745 182.50p
29 September 2005 – 424 – – 424 236.00p
1 October 2005 – 14,554 – – 14,554 240.50p
11 October 2005 – 5,140 – – 5,140 233.50p
20 October 2005 – 2,955 – – 2,955 220.00p
5 October 2005 – 5,721 – – 5,721 218.50p
5,552,531 124,071 (112,426) (62,083) 5,502,093
Options granted before 15 July 2004 are held under the EMI Plan, and options granted on and after that date under the
Share Option Plan. 
All options vest over a three-year period, one-third on each anniversary of granting, except where specifically noted.
Notes:
(1) Save as set out in the notes below, all of the above options, once vested, are exercisable at any time until the tenth anniversary of the date of grant.
(2) The final third of these options became exercisable on 1 July 2005.
(3) The final third of these options became exercisable on 26 August 2005.
(4) All of these options became exercisable on 1 October 2004.
(5) One-third of these options became exercisable on 29 June 2005, one-third become so on 29 June 2006 and one-third on 29 June 2007.
(6) The board agreed to grant these options on 21 January 2004 as rewards and incentives to grow the business and in respect of salary sacrifice
arrangements.
(7) These options have been granted as compensation for options that were granted at incorrect prices in December 2002 and Augus t 2003.
(8) All of these options become exercisable on 15 July 2007, subject to the achievement of performance targets set by the remuneration committee 
(see remuneration committee report). The performance-related conditions are linked to share price performance and business milestones.
(9) One-third of these options were issued to Stephen Murphy and lapsed on his resignation on 7 February 2005. Of the remainder, one-third became
exercisable on 15 July 2005, one-third on 15 July 2006 and one-third on 15 July 2007.
(10) These options, issued to Stephen Murphy, lapsed on his resignation on 7 February 2005.
(11) The number of options granted has been restated from nil to 100,000 and nil to 28,741.
(12) These options vest immediately on grant.
The directors’ interests in these options are set out in the remuneration committee report. ClearSpeed Annual Report and Accounts 2005
Notes to the financial statements
35
19. Share capital (continued)
The ClearSpeed Technology Employee Benefit Trust (EBT)
On 29 June 2004 the ClearSpeed Technology Employee Benefit Trust (EBT) was created. The sponsoring company was
ClearSpeed Solutions Limited. The EBT was set up to assist ClearSpeed Solutions Limited to satisfy its obligations in respect
of options issued to employees.
The obligations of ClearSpeed Solutions Limited in respect of the previously issued options were transferred to ClearSpeed
Technology plc as part of the hive-up of assets and liabilities on 1 July 2004. ClearSpeed Technology plc became the
sponsoring company of the EBT at this time. On Admission to AIM, the EBT subscribed £46,065 to purchase 4,606,537
ordinary shares in ClearSpeed Technology plc at 1p per share. The issue of new shares to the EBT was facilitated by a loan
provided by Clearspeed Technology plc. The market value of these ordinary shares on Admission was 96p. The EBT will
continue to be used to hold the purchased shares to satisfy the obligations of ClearSpeed Technology plc as employees
exercise the options over the vesting period. The EBT is administered by a professional trustee company based in Jersey.
At 31 December 2005 the EBT held 4,440,831 (2004: 4,563,257) ordinary shares with a market value of £2.64 (2004: £2.165)
per share. These shares include 1,517,944 (2004: 2,008,750), with a market value of £4,007,372 (2004: £4,348,944), which
have not yet vested unconditionally with employees.
Included in the profit and loss reserve is a debit of £44,508 (2004: £45,633) representing the cost of the 4,440,831 
(2004: 4,563,257) shares held by the EBT at year-end.
20. Reconciliation of movements in equity shareholders’ funds
Capital Profit and
Share Share redemption Merger loss
capital premium reserve reserve account Total
Group £000 £000 £000 £000 £000 £000
At 1 January 2005 325 10,039 6,361 33,153 (40,863) 9,015
Arising on share issue 101 20,599 – – – 20,700
Share issue costs – (617) – – – (617)
Exercise of options –––– 27 27
Exchange differences on
retranslation of net assets
of subsidiary undertakings –––– (125) (125)
Retained loss for the year –––– (6,412) (6,412)
At 31 December 2005 426 30,021 6,361 33,153 (47,373) 22,588
Capital Profit and
Share Share redemption loss
capital premium reserve account Total
Company £000 £000 £000 £000 £000
At 1 January 2005 325 10,039 6,361 (1,573) 15,152
Arising on share issue 101 20,599 – – 20,700
Share issue costs – (617) – – (617)
Exercise of options – – – 27 27
Retained loss for the year – – – (5,661) (5,661)
At 31 December 2005 426 30,021 6,361 (7,207) 29,601 36
ClearSpeed Annual Report and Accounts 2005
Notes to the financial statements
Notes to the financial statements
continued 
21. Reconciliation of operating loss to net cash outflow from operating activities
2005 2004
£000 £000
Operating loss (7,088) (4,265)
Amortisation 77 68
Depreciation 73 32
Exchange differences – 40
Increase in stock (251) –
Increase in debtors (393) (412)
Increase in creditors 758 299
Net cash outflow from operating activities (6,824) (4,238)
22. Reconciliation of net cash flow to movement in net funds
2005 2004
£000 £000
Increase in cash in the year 13,382 8,300
Exchange movement (125) –
Loan repayment – 22,463
Change in net funds arising from cash flows 13,257 30,763
Net funds/(debt) at 1 January 8,975 (21,788)
Net funds at 31 December 22,232 8,975
23. Analysis of changes in net funds
At 1 At 31
January CashExch ange December
2005 flows movement 2005
£000 £000 £000 £000
Cash in hand and at bank 8,975 13,382 (125) 22,232
Net funds 8,975 13,382 (125) 22,232
24. Profit attributable to members of the parent company
The loss dealt with in the accounts of the parent company was £5,661,000 (2004: £1,536,000).
25. Related party transactions
Ultra Securities (Holdings) Limited and David Sebire have entered into a consultancy agreement with the company whereby
Ultra Securities (Holdings) Limited procures that David Sebire acts as non-executive chairman of the company on the terms
that an annual fee of £30,000 (2004: £30,000) plus VAT is payable to Ultra Securities (Holdings) Limited in respect of the
provision of David Sebire’s services as non-executive chairman. In addition a £10,000 (2004: nil) contribution to administrativ e
costs was paid to Ultra Securities (Holdings) Limited.
An amount of £20,000 (2004: nil) relating to unpaid share capital, in connection with the fundraising on 28 December 2005,
was owed to the company by John Hart as at 31 December 2005. This was received by the company on 9 January 2006.
A management charge of £18,000 (2004: nil) was made to PixelFusion plc during 2005 and a debtor of £1,000 (2004: nil)
was outstanding at 31 December 2005. Tom Beese is a director of PixelFusion plc.
Stephen Murphy received an aggregate of nil (2004: £32,000) in return for the provision of company secretarial services in
the period prior to Admission.
The company has taken advantage of the exemption allowed in FRS8 “Related party disclosures” on disclosing related party
transactions with group companies.
26. Contingent liabilities
The company has been awarded an Exceptional Research & Development Grant by the DTI. The accounts currently reflect
income from this grant amounting to £27,000 (2004: £129,000). The terms of the grant are such that it is repayable in full in
the event that the company fails to meet certain conditions for a period of five years following the end of the project which is
the subject of the grant. Accordingly there is a contingent liability of £156,000 (2004: £129,000) in respect of this amount. ClearSpeed Annual Report and Accounts 2005
Our business
Our business
ClearSpeed Technology is a specialist semiconductor company focussed 
on the design and development of microprocessors and boards that 
significantly increase computer performance.
Like many semiconductor companies, ClearSpeed subcontracts the 
manufacture, assembly, packaging, testing and shipping of the finished 
products to third parties.
In the UK ClearSpeed is based in Bristol, and in the US it has an office 
in San Jose, “Silicon Valley”.
Contents
01 Highlights
02 At a glance
04 Chairman’s statement
06 Chief Executive Officer’s review
09 Tokyo Institute of Technology contract
10 Main board
11 Officers and professional advisers
12 Directors’ report 
14 Corporate governance report
15 Remuneration committee report (unaudited) 
18 Statement of directors’ responsibilities 
in relation to the financial statements 
19 Independent auditors’ report 
20 Group profit and loss account
Group statement of total recognised 
gains and losses
21 Group balance sheet 
22 Company balance sheet 
23 Group cash flow statement
24 Notes to the financial statements
ClearSpeed’s programmable processors have
been designed to meet the requirements 
of the world’s most compute-intensive
applications, enabling “supercomputing”
capabilities on affordable platforms
including clusters and workstations.
The CSX600 is designed as a co-processor 
to be used alongside general purpose
processors in HPC (high-performance
computer) applications. The technology
addresses the problem of power consumption
and heat generation within the processors.
This is acknowledged to be an increasingly
significant problem in creating high-
performance systems. Reducing processor
power can also reduce total cost of ownership
compared with current solutions.
The CSX600 can also provide a cost-effective
upgrade for existing systems.
Designed and produced by 
www.collegedesign.com ClearSpeed Technology plc
Annual Report and Accounts 2005
Europe
ClearSpeed Technology plc
3110 Great Western Court
Hunts Ground Road
Bristol BS34 8HP
United Kingdom
T: +44 (0)117 317 2000
F: +44 (0)117 317 2002
USA
ClearSpeed Technology, Inc.
3031 Tisch Way, Suite 200
San Jose
CA 95128
T: +1 408 557 2067
F: +1 408 557 9054