holdings plc
www.cerespower.com
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
Powered by Ceres
Ceres Power Holdings plc Annual Report 2008
Ceres Power Holdings plc Annual Report 2008 CERES	 POWER	 HOLDINGS	 PLC	 ANNUAL	 REPORT	 2008 CERES	 POWER	 HOLDINGS	 PLC	 ANNUAL	 REPORT	 2008
Ceres Power is developing 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 products to global mass markets. 
 
Ceres	 Power’s	 core	 	 Fuel	 Cell	 Module	 is	 an	 ‘electro-chemical	 engine’	 which	 generates	 electricity	 and	 heat	 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°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	 can	 	 be	 used	 as	 an	 alternative	 	 to	 batteries	 and	 generators	 for	 international	 on-grid	 and	 off-grid	 applications.	 Ceres	 Power	 is	 partnering	 with	 major	 corporations	 with	 well-established	 	 direct	 channels	 to	 millions	 of	 customers.	 Ceres	 Power	 has	 secured	 a	 volume	 supply	 and	 distribution	 agreement	 with	 British	 Gas	 in	 the	 UK	 for	 CHP	 products	 in	 residential	 homes.	 The	 Group	 is	 also	 working	 with	 EDF	 Energy	 Networks	 	 to	 address	 the	 market	 	 for	 back-up	 power	 	 supply	 products	 and	 intends	 to	 establish	 further	 agreements	 internationally.
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 Partners Mass	 markets
‘Ceres Power’ and ‘Powered by Ceres’ are registered trademarks  
belonging to the Group.
Directors and Advisors
for the year ended 30 June 2008
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
 
Directors
Dr Brian Count (Non-Executive Chairman)
1
Dr Peter Bance (Chief Executive Officer)
1,2
Dr Andrew Baker (Operations Director)
1,2
Rex Vevers (Finance Director)
1,2
Bob Flint (Commercial Director)
2
Prof Nigel Brandon (Chief Scientist)
2
Sir David Brown (Non-Executive Director)
1
Alan Wood (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
Carmelite
50 Victoria Embankment
Blackfriars
London
EC4Y 0DX
Registered 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 01
CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
Highlights
£20 million investment by Centrica plc at 300p per share  
for 10% equity stake 
£5 million funded CHP development and trialling 
programme secured with British Gas
British Gas volume forward order for a minimum  
of 37,500 CHP products
Strong balance sheet with £27.5 million in cash  
at 30 June 2008 
Brian Count, ex-Innogy plc CEO, appointed  
Non-Executive Chairman
UK Chairmen of Siemens and Motorola appointed  
as Non-Executive Directors February 2008
Key Achievements
Performance of core technology manufactured from 
scaleable processes independently confirmed 
1kW Fuel Cell Module achieved performance, size  
and weight targets 
CHP Alpha design phase for British Gas completed
Volume suppliers selected for key balance of plant 
components and equipment
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Contents
01  Highlights and Key Achievements
02  Chairman’s Statement
04  Chief Executive’s Review
08  Ceres Operational Model
10  Combined Heat and Power
12  Growth Opportunity
14  Directors and Senior Management
16  Corporate Social Responsibility
17  Corporate Governance Report
19  Remuneration Report
22  Directors’ Report
24  Independent Auditors’ Report to the  
  Members of Ceres Power Holdings plc
25  Consolidated Income Statement
26  Consolidated Balance Sheet
27  Consolidated Cash Flow Statement
28   Consolidated Statement of  
Changes in Equity
29   Notes to the Consolidated  
Financial Statements
44   Independent Auditors’ Report to the 
Members of Ceres Power Holdings plc
45  Company Balance Sheet
46   Reconciliation of Movements in 
Shareholders’ Funds
47   Notes to the Company  
Financial Statements
ibc Directors and Advisors CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
02
Chairman’s Statement
Business overview
I was delighted to assume the 
Chairmanship of Ceres Power in 
January and it is a great pleasure to 
report the Group’s first full year results 
since I took on the role.
As reported in the interim results, this year 
has been a period of transformation  
for Ceres Power in all aspects of the 
business. We signed a major supply and 
distribution agreement with British Gas  
in January which includes a volume 
forward order for the mass market 
uptake of residential Combined Heat 
and Power (CHP) products in the UK.  
In addition, Centrica plc (owner of British 
Gas) became a major new shareholder 
acquiring a stake of approximately  
10% for £20 million. These developments 
demonstrate the confidence both 
companies have in Ceres Power’s 
technology to enable British Gas 
customers to generate cheap,  
reliable, low-carbon electricity in  
their own homes.
The Group has also received 
independent confirmation of the  
core technology performance this  
year and successfully demonstrated  
its wall-mountable CHP product. This  
is capable of generating most of the 
electricity and all of the hot water and 
central heating required for a typical UK 
home. Ceres Power’s unique fuel cell 
technology enables the product to 
match daily and seasonal energy 
demands all year round, substantially 
reducing the need to buy electricity.  
It is manufactured using low-cost 
materials and is designed to produce 
total annual energy savings of around 
25% for consumers. Finally, we have  
also set out and communicated to  
the market our plan to deliver our  
CHP product into the UK market in 2011 
and I am delighted to report that we 
have met the Fuel Cell Module size, 
weight and performance targets. The 
Board and management team are fully 
committed to the delivery of this plan 
which we are convinced will enhance 
shareholder value.
The UK Government has estimated that 
microgeneration products, such as fuel 
cell CHP, have the potential to supply 
over one-third of the country’s total 
electricity needs and help meet its 
environmental obligations. Recent 
research commissioned by the UK 
Government has shown that fuel cell 
CHP has the potential to become the 
microgeneration ‘system of choice’, 
replacing the condensing boiler.
The Ceres Power CHP product is  
based on patented technology that  
is specifically designed for residential 
use – wall-mountable and a similar  
size and shape to existing domestic 
boilers. The units from the Alpha  
phase of our CHP product agreement 
with British Gas will be completed by  
the end of 2008 and we have outlined 
a clear roadmap to take the product  
to volume launch. 
During the year, the Group delivered 
strong growth in commercial  
revenues and continued to invest  
in manufacturing facilities, intellectual 
property and the recruitment of 
experienced employees. The Group’s 
balance sheet remains strong with  
£27.5 million in cash, providing a strong 
financial base from which we can 
continue to develop the business.
Using every unit 
of energy as 
efficiently as 
possible has to 
be our ultimate 
ambition 
Source: UK Government 2008 03
CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
Energy efficiency 
In addressing climate change, 
renewables are only a partial solution  
in an environment of rising energy costs, 
energy demand and international 
pressure for sustainable economic 
growth. The UK has agreed to contribute 
to the EU’s target for renewables by 2020. 
The Government has stated that energy 
efficiency is the starting point of its 
energy policy, since this can reduce  
the amount of renewable energy 
needed to meet targets by reducing 
overall consumption.
Microgeneration products such as 
residential CHP create electricity at the 
point of use and are highly efficient 
compared with centralised power 
stations, avoiding the heat losses in 
generation and transmission. Ceres 
Power fuel cell CHP products use existing 
infrastructure, unlike renewables, and 
could make a significant contribution to 
meeting energy targets and delivering 
energy savings to consumers.
Improving energy performance in  
homes will play a particularly important 
role. Investing in microgeneration will be 
an important tool in tackling the carbon 
impact of the built environment. 
We welcome the UK Government’s 
acknowledgement that there is the 
potential to encourage more rapid 
uptake of microgeneration products 
through fiscal incentives, building 
regulations and the development  
of appropriate policies. 
People
I would like to thank Philip Holbeche 
who retired as Executive Chairman  
and John Gunn who stepped down  
as Non-Executive Director for their 
substantial contributions to the 
successful development of the Group. 
On behalf of the Board, I would like to 
wish both Philip and John every success 
in their future endeavours.
We were extremely pleased to welcome 
Sir David Brown and Alan Wood as  
Non-Executive Directors of the Group  
in February 2008. As Ceres progresses 
towards mass market delivery of its 
products, their experience in high 
growth technology businesses as 
Chairmen of Motorola UK and  
Siemens UK respectively will be 
invaluable in helping the Group  
build shareholder value. 
The Group continues to build its 
experienced high calibre team to meet 
the challenging targets that the Group 
has set itself. The success of the business 
depends on the hard work and 
commitment of all of its employees  
and on behalf of the Board I would  
like to record our thanks to all of them  
for their outstanding contribution over 
the past year.
Brian Count
Chairman
26 % 
of the UK’s energy 
consumption is from  
the domestic sector.
Source: Digest of the United Kingdom 
Energy Statistics, 2008 CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
04
Chief Executive’s Review
Business review
I am pleased to report that Ceres Power 
has successfully delivered on the 
objectives that we set ourselves in  
last year’s Annual Report. Substantial 
achievements have been made in our 
priority areas: value engineering of  
the core Combined Heat and Power 
(CHP) product; preparation for mass 
manufacturing; delivery of key private 
and public sector contracts; securing 
new commercial contracts to get 
product to market in volume; and 
growing revenues and maintaining  
a strong balance sheet.
Product 
We have adopted a rigorous Alpha, 
Beta, Gamma product development 
process based on industry best practice 
for bringing new consumer durable 
products to market. This involves a  
three stage process of performance 
validation, reliability testing and mass 
production, after which the product  
is ready for mass market launch. 
In June this year, we announced that 
the CHP product Alpha design phase 
had been completed under the 
programme with British Gas, meeting 
requirements for ease of installation, 
service and maintenance and 
designed for volume manufacture.  
In addition, we also announced  
to the market our roadmap for the  
CHP product launch in the UK. 
We have successfully delivered our first 
milestone on this roadmap with the 
build and test of a 1kW Fuel Cell Module 
meeting all the performance, size and 
weight requirements under the Alpha 
phase. The Fuel Cell Module was 
operated on three different fuel types: 
mains natural gas, methane and 
propane. On each fuel, it delivered a 
maximum electrical output of just over 
1kW and was operated over a broad 
range of power outputs demonstrating 
its controllability and efficiency. The core 
Fuel Cell Stack within the integrated Fuel 
Cell Module demonstrated a heat to 
power ratio of better than 1:1 and was 
built using Ceres Power fuel cells made 
by scaleable manufacturing processes.
The Fuel Cell Module has been 
packaged to fit overall dimensions  
of 205mm by 305mm by 305mm. 
Including its thermal insulation it weighs 
less than 25kg, meeting the Alpha CHP 
product targets. Together, these size 
and weight achievements enable the 
CHP product to be wall-mountable and 
easy to install, essential to maximise 
mass market access. This milestone 
achievement underpins the Group’s 
confidence that it will complete the 
Alpha CHP build by the end of 2008.
Manufacturing
Manufacturing development  
work during the year has focused on 
migrating from low-volume techniques to 
scaleable mass manufacturing solutions 
using production-intent machines, 
materials and processes. Significant 
gains have been made in processing 
speeds, automated handling and 
statistical process controls. 
In preparation for mass production 
scale-up, detailed planning for the 
Mother Plant has been completed and  
a shortlist of possible sites has been 
agreed. This strategy of centralised  
in-house volume manufacturing of  
The shift from 
centralised 
generation  
to distributed 
microgeneration 
could be 
equivalent to  
the shift from 
mainframes  
to PCs 05
CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
the core Fuel Cell Module from the 
Mother Plant is being followed in order  
to maximise value capture, intellectual 
property (IP) protection and operational 
efficiency. Key balance of plant 
components and sub-assemblies  
are being co-developed and  
sourced from cost-effective, high  
quality volume suppliers from across  
a global supply chain.
Operations
In support of the Alpha, Beta,  
Gamma CHP programme, the Group  
is increasingly investing in dedicated 
facilities for performance and durability 
testing as well as additional analytical 
equipment to support quality 
assurance. The Group has also 
continued to invest in the professional 
development of existing employees  
and the recruitment of experienced 
people in manufacturing operations, 
supply chain management, systems 
engineering and quality systems.  
This is set to continue as new 
commercial contracts are secured  
and manufacturing is scaled-up. 
By focusing on a core platform 
technology with attractive cost and 
performance characteristics, a number 
of potential market opportunities are 
being targeted in different countries 
and market segments. This maintains 
highly efficient operations with a 
relatively low cost base.
Commercial 
The highlight of the year was the 
signing of a major new development, 
trialling and distribution agreement with 
British Gas, building on a long-standing 
relationship formally established in 2005. 
British Gas CHP agreement
Following the 
successful 
demonstration  
of an integrated  
wall-mountable CHP 
Unit, Ceres Power 
signed a major  
new agreement with 
Centrica plc, trading  
as British Gas.  
Under the terms  
of this agreement, 
British Gas is paying 
£5 million and 
committing its 
operational resources 
to support a 
development and 
trialling programme. 
Ceres Power has also 
secured a volume 
forward order from 
British Gas to deliver  
a minimum of 37 ,500 
CHP products in 
aggregate over a four 
year period starting in 
2011, with substantially 
greater levels of  
sales expected. As  
a key part of the 
agreement Centrica 
invested £20 million to 
acquire a 10% equity 
stake in Ceres Power. 
British Gas is the 
largest residential 
energy supplier in  
the UK with more than 
16 million customer 
accounts. In a  
UK market where 
more than 1.5 million 
boilers are installed 
each year, it has  
the largest installation 
& maintenance  
force for domestic 
central heating.
“This technology 
has the potential 
to transform the 
domestic central 
heating market, 
enabling our 
customers to 
generate cheap, 
reliable and  
low-carbon 
electricity in their 
own homes.” 
Gearoid Lane, Director of 
British Gas New Energy
1 .5 million 
gas boilers are installed  
each year in the UK.
Source: BSRIA, 2007 CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
06
2007/2008
Chief Executive’s Review
continued
Under this agreement, British Gas is 
paying £5 million towards the costs of 
developing and trialling CHP products 
for volume launch in the UK. In addition, 
British Gas is committing its operational 
resources to support this programme 
including sales and marketing, training, 
installation, servicing and logistics. 
British Gas is the largest residential 
energy supply company and installer  
of gas appliances in the UK. This  
agreement provides Ceres Power with 
an unparalleled channel to market for 
residential CHP products. 
British Gas has also placed a volume 
forward order with Ceres Power to 
supply a minimum of 37,500 CHP 
products over a four year period, 
conditional upon completing the 
trialling phase and agreeing standard 
commercial terms. Both companies 
have agreed to promote the Ceres CHP 
product with the intention of achieving 
substantially greater levels of annual 
sales over the four year period. 
Ceres Power is also focusing on 
developing other markets for CHP 
products and is actively seeking 
partners to help expand internationally.
The programme with EDF Energy 
Networks to develop an energy security 
device for use in UK homes has met all 
the milestones to date, and the Group 
is expected to deliver a prototype under 
the existing contract on schedule  
during Q1 2009. The product uses  
the core Fuel Cell Module running off 
packaged fuel and is hybridised with 
an electrical storage unit. This capability 
will enable the Group to address global 
opportunities for energy security 
applications including uninterruptible 
power supplies, load-shedding  
support, battery charging and  
romote power generation. 
Financial 
Revenue for the year increased 
substantially to £0.7 million (2007: £0.1 
million), through the successful delivery 
of technical milestones under the 
Group’s contracts with its commercial 
partners. In February 2008, the Group 
received the first milestone payment  
of £1 million from British Gas, and is 
recognising this as revenue over the 
Alpha phase of the contract which 
continues into and is expected to 
complete in the current financial year. 
Following the completion of several 
existing public sector contracts during 
the year, other operating income fell 
13% to £0.8 million (2007: £1 million).
The Group has continued to invest in its 
product development, manufacturing 
and commercial capabilities across the 
business. This has resulted in research 
and development expenditure 
increasing 16% to £5.7 million (2007: £4.9 
million) and administrative expenditure 
increasing 8% to £2.2 million (2007:  
£2 million). Finance income rose 63% to 
£1 million (2007: £0.6 million) as a result 
of raising approximately £20.2 million 
(net of expenses) through the issue of 
new shares during the year and rising 
short-term interest rates. The loss for the 
year increased by 2% to £5 million (2007: 
£4.9 million), reflecting the increase in 
operating expenses net of the increase 
in revenue and interest income.
The net cash used in operating activities 
increased by £0.3 million to £3.7 million 
Achievements and future milestones
September 2007
Demonstrated 
integrated  
wall-mountable  
CHP unit
•
December 2007
Rushlight award 
for clean energy 
innovation jointly  
won with British Gas
•
January 2008
Volume forward 
order from British Gas 
for residential CHP 
products and £5 million 
development and  
trialling programme
Brian Count, former  
Chief Executive of  
Innogy plc, appointed as 
Non-Executive Chairman 
•
•
February 2008 
£20 million investment 
by Centrica plc for 10% 
equity stake
UK Chairmen  
of Siemens and 
Motorola join the 
Ceres Board as  
Non-Executive Directors
•
•
June 2008
Core CHP technology 
performance independently 
confirmed by AEA Energy  
& Environment
Alpha CHP design phase 
completed with British Gas
•
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(2007: £3.4 million) mainly due to the 
reduction in income tax received in the 
year. Cash investment in property, plant 
and equipment increased by £0.5 
million to £1.1 million (2007: £0.6 million) 
reflecting investment in the Product 
Facility and manufacturing equipment 
during the year. 
Cash inflow from financing activities 
increased by £19.7 million to £20.2 million 
(2007: £0.5 million). This was mainly due 
to the issue in February 2008 of 6,671,838 
new shares at a price of 300p per share 
to GB Gas Holdings Limited (a subsidiary 
of Centrica plc), which raised £20 million 
(before expenses). The Group’s cash 
and cash equivalents increased by 
£16.3 million (2007: decrease £2.9 million). 
The Group’s liquidity position is  
strong with £27.5 million in cash and 
cash equivalents. All surplus funds  
are invested in short-term, low-risk  
triple-A rated money market funds 
in accordance with the Board 
approved Group treasury policy  
which is focused on preserving  
the Group’s capital. 
Outlook
The Board has set out a clear roadmap 
through to commercial launch in the  
UK of the CHP product in collaboration 
with British Gas. In addition, we have 
committed to build commercial and 
operational capabilities to grow the 
business and to expand internationally. 
To achieve these objectives, our 
priorities for the next 12 months will be to:
complete the Alpha CHP product 
build using fuel cells from scaleable 
manufacturing processes;
> 07
CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
2008/2009
secure a Mother Plant site for a fuel 
cell mass manufacturing facility;
conduct Alpha CHP product testing 
and commence the Beta CHP phase 
of the contract with British Gas; 
complete the Alpha CHP phase of the 
British Gas contract and trigger the 
next milestone payment of £2 million;
procure volume fuel cell 
manufacturing machines and 
commence initial operations  
in the Mother Plant;
grow commercial revenues with 
existing partners and secure new 
contracts; and
deliver a prototype energy security 
product under the existing contract 
with EDF Energy Networks.
The Board and management team are 
confident that we will deliver against our 
stated roadmap to mass market launch 
and I look forward to reporting on the 
delivery of our stated priorities and other 
progress over the coming year. 
Peter Bance
Chief Executive Officer
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Ceres Power has achieved a twenty-fold 
improvement in processing speed for  
the drilling of fuel cell steel substrates.  
These gains resulted from the Group acting 
as specifier and system integrator  
for a machine that combined available 
sub-systems for the optics, motion control 
and power supply into a dedicated design 
tailored for mass production.
This approach allowed Ceres Power  
to minimise development spend, capture 
Intellectual property and maintain direct 
control over its supply chain whilst building 
important in-house manufacturing 
Manufacturing scale-up
capabilities. Further improvements 
involved eliminating manual handling 
by successfully implementing a novel 
automated substrate handling process.
This overall programme demonstrates 
how the Group is successfully developing 
scaleable mass manufacturing 
solutions in parallel with its product 
engineering programme. The 
associated reductions in capital 
spending will directly contribute  
to the CHP product’s ability to be 
manufactured cost-effectively.
September 2008
1kW Fuel Cell Module  
built and tested with 
performance, size and 
weight targets achieved
•
Q4 2008 
Alpha CHP product build 
using cells from scalable 
manufacturing processes
Secure site for  
a fuel cell mass 
manufacturing facility
•
•
Q1 2009 
Testing of Alpha  
CHP product
Commencement of  
Beta CHP phase 
Delivery of a prototype 
energy security device 
under the contract with 
EDF Energy Networks
•
•
•
Q2 2009 
Completion of Alpha  
CHP phase of British  
Gas contract to  
trigger £2 million 
milestone payment
• CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
08
Ceres Operational Model
Ceres Power’s parallel development of product 
design, manufacturing processes and supply chain  
is designed to minimise business risk, time to market 
and product cost.
The Fuel Cell Stack is  
a layered construction 
of metal supported  
fuel cells separated  
by stainless steel 
interconnects which 
enable fuel and air to 
flow to either side of 
each fuel cell. 
Ceres Power’s unique 
metal supported fuel 
cell technology 
enables the use of 
well-proven welding 
techniques to deliver  
a very robust product. 09
CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
Alpha Phase – Performance 
Beta Phase 1 – Sheltered field trials 
Beta Phase 2 – Commercial field trials
Gamma Phase – Manufacturing Launch
Performance 
validation, 
reliability testing, 
mass production 
and supply chain 
development 
underpin Ceres 
Power’s ability  
to create  
cost-effective 
products that 
meet mass 
market 
requirements. 
Alpha, Beta, Gamma phases
Ceres Power has adopted a rigorous 
product development process based 
on industry best practice for bringing 
new consumer durable products to 
market. This adopts a three stage 
process of performance validation, 
reliability testing and mass production, 
after which the product is ready for its 
volume market launch.
In the Alpha phase, the product 
specification is fixed to deliver the 
required target product performance 
and cost, with units built using 
components manufactured from 
scaleable processes. In-house product 
and component testing is conducted 
to demonstrate target performance. 
The Beta phase validates in-field 
product performance and reliability, 
including installation, service and 
maintenance. Sheltered field trials are 
conducted in Ceres test facilities and 
larger commercial field trials, in selected 
consumers’ homes across a broad 
demographic range, are conducted 
on certified products that look, work 
and are made like the final product. 
The Gamma phase demonstrates that 
the manufacturing operations can 
achieve the required mass market 
volumes and the sales and marketing 
plan is tested with consumers including 
all necessary back office support.  
At the completion of the Gamma 
phase, the product supply chain, 
logistics, installation and service are 
ready for launch.
Design for Manufacture
At the core of the Ceres Power product 
development process is expertise the 
Group has established in ‘Design for 
Manufacture’ which addresses key  
risks up-front. This involves concurrent 
design, product engineering and 
manufacturing activities across the 
entire supply chain of raw materials, 
components and process equipment. 
This approach ensures that the  
product design is well suited for volume 
manufacture and reduces the product 
development lead time, costs and risk 
associated with bringing new consumer 
products to market. 
Supply chain development
Ceres Power continues to develop a 
global supply chain for the volume 
supply of raw materials, balance of 
plant components and manufacturing 
process equipment. The key balance  
of plant components have been 
sourced and/or co-developed in 
partnerships with well-established 
volume manufacturers notably  
from consumer durable, HVAC  
and automotive industries. This 
investment in building the supply  
chain underpins the Group’s ability  
to create cost-effective products that 
meet mass market requirements. 
Product development process CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
10
Ceres Power’s unique wall-mountable Combined 
Heat and Power (CHP) product is designed to 
maximise energy savings and deliver an attractive 
payback for the consumer and channel to market. 
The Ceres Power CHP 
product is designed to 
replace an existing gas 
boiler, using the same 
connections and with 
similar installation  
and maintenance 
requirements. The 
product can generate 
all of the heating  
and hot water, and  
the majority of the 
electricity for a typical 
UK home, saving the 
customer around 25% 
of their annual total 
energy costs and 
reducing the home’s 
CO 2 emissions by up to 
2.5 tonnes per annum.
Combined Heat and Power CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
11
Fuel cell CHP
Fuel cells are predicted to be the 
dominant residential mass market CHP 
solution within the microgeneration 
sector due to their high energy 
efficiency and output matched to a 
home’s requirements. Using the existing 
mains gas infrastructure they can 
deliver a significant reduction in carbon 
emissions and household energy bills. 
The Ceres CHP product is capable of 
generating most of the electricity as  
well as all of the hot water and central 
heating required for a typical UK  
home from a single integrated unit, 
substantially reducing the need to  
buy electricity. The wasted heat from 
centralised power stations, and the 
transmission losses associated with  
the electrical grid, are avoided. 
Ceres differentiated offering
Ceres Power’s technology produces 
proportionally less heat than  
engine-powered CHP designs (such  
as Stirling or internal combustion 
engines) enabling the Ceres CHP 
product to generate electricity all year 
round even when the central heating 
is turned off. Unlike renewables that 
generate power on an intermittent 
basis, the CHP product is designed  
to meet daily and seasonal energy 
demands in the home by varying its 
heat and electrical output to maximise 
achievable savings and avoid wasted 
energy. By reducing electrical demand 
in the home in this way strain on the 
electrical grid can be reduced. Using 
commercial materials and processes to 
meet challenging volume cost targets, 
the Ceres CHP product has an 
attractive business case and a short 
payback period. Total annual energy 
savings of around 25% and emissions 
reductions of up to 50% or 2.5 tonnes of 
CO 2 are achievable for a typical British 
Gas customer and continue beyond 
the initial payback period, for the life of 
the product.
Ceres Power’s unique CHP product is 
wall-mountable and can be installed  
in the same space in the home  
as an existing boiler using the same 
connections and with similar service 
and maintenance requirements.
Global opportunity
Across international markets there  
are significant opportunities for Ceres 
Power’s CHP product. As part of the 
Group’s growth strategy, Ceres Power  
is targeting European markets which 
account for sales of more than 6 million 
wall-mountable boilers per annum.
CHP business model
The Ceres Power business model is to 
partner with companies that have 
direct channels to millions of customers. 
The CHP product can be sold to 
residential customers able to benefit 
from an attractive economic payback, 
when replacing existing boilers or in 
new build homes. 
Over time, energy service company 
(ESCO) models are likely to emerge 
reflecting the need for energy 
companies to provide more efficient 
products and services to their 
customers. Ceres Power’s fuel cell  
CHP product enables these models  
and helps our business partners to 
capture greater value where CHP 
products are deployed and owned  
as generating assets. 
CHP product benefits
Wall-mountable 
integrated unit
Delivers central heating, 
hot water and electricity
Simple installation, 
replacing an  
existing boiler
Easy to use with 
automatic operation
>
>
>
Attractive  
business case
Meets home energy 
usage patterns all  
year round
~25% annual energy 
savings and up to 50% 
CO 2 savings
Attractive economic 
payback
>
>
>
Addresses global 
mass markets
Attractive differentiated 
proposition for  
energy companies
Product format suited  
to the majority of 
European installations 
Compatible with 
emerging energy 
service (ESCO) 
business models 
>
>
>
0
2005 2015 2025 2035 2045
10
5
15
20
25
Year
Stock installed (millions)
Fuel cells
Stirling engine
Biomass
Ground source heat pump
Air source heat pump
Fuel cells to dominate mass market residential CHP
Source: Energy Saving Trust, UK 2007 CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
12
Growth Opportunity
Global opportunities exist for Ceres Power’s  
unique fuel cell technology that can meet  
mass market requirements for cost-effective  
low-carbon energy products. 
Ceres Power is 
partnering with EDF 
Energy Networks to 
develop an energy 
security device for  
use in UK homes.  
The product uses the 
core Fuel Cell Module 
running off packaged 
fuel and is hybridised 
with an electrical 
storage unit.  
This capability will 
enable the Group  
to address global 
opportunities for 
energy security 
applications including 
uninterruptible  
power supplies,  
load-shedding 
support, battery 
charging and remote 
power generation. 13
CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
Platform technology
The Fuel Cell Module is Ceres Power’s 
platform technology that forms the 
basis of our approach to product 
design, and can be used within 
multiple product variants to address 
diverse market applications. It can be 
incorporated within a range of new 
products through modular design and 
use of appropriate balance of plant 
components. Ceres Power’s technology 
has considerable potential to expand 
beyond the Company’s core market  
for residential natural gas CHP using  
a common platform and customising 
products tailored for specific markets.
Following this strategy, the Group has 
already demonstrated its technology 
can operate with widely available 
packaged fuels such as LPG, opening 
up residential and commercial 
applications in rural areas. Ceres Power 
has also embarked on a programme 
that uses local battery storage and 
sophisticated control electronics for the 
Fuel Cell Module to provide enhanced 
energy security within a hybrid system.
Capabilities underpin growth
Ceres Power’s strategy is to build  
in-house capabilities by means of 
establishing common technology 
building blocks which can be 
incorporated into future product 
programmes. This capability is  
being built through core engineering 
activities and customer-specific 
programmes. The Ceres Power 
engineering capability underpins  
the Group’s ability to bring  
multiple product streams to market  
in a staged manner.
CHP growth opportunities
The Group continues to focus on 
delivering and maximising the 
opportunity of residential CHP  
in the UK operating off mains gas and 
packaged fuels. The same integrated  
wall-mounted CHP format can also 
address a range of international 
markets representing substantial 
opportunities for rapid growth.
New markets and products
The core technology platform in 
conjunction with hybridised energy 
storage systems can provide power 
continuity during failures of the mains 
electricity supply. This offers a valuable 
new energy security feature as many 
locations suffer from grid interruptions 
due to natural causes (e.g. storms)  
or network reliability issues such as 
those in North America and rural 
Europe. Recent consumer research  
has highlighted the desirability  
of residential energy security in  
these circumstances.
Several new product and market 
opportunities exist beyond residential 
CHP including:
Tri-generation
Remote industrial power
Transport auxiliary power.
Ceres Power’s platform technology 
running off packaged fuels,  
hybridised with energy storage  
systems and applied to multiple 
international markets, can address  
all of these opportunities.
>
>
>
6.3 million 
wall-mounted boilers were 
sold in the European 
market in 2007.
Source: BSRIA
Ceres Power’s 
technology has 
considerable 
potential to 
expand beyond 
the Company’s 
core market  
for residential 
natural gas CHP 
using a common 
platform and 
customising 
products tailored 
for specific 
markets. CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
14
Directors and Senior Management
1 2
3 4
5 6
7 8 15
CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
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. Until recently, Brian  
was a Non-Executive Director of  
Eskom, the South African electricity 
company. Brian sits on the Audit, 
Remuneration and the Nomination  
& Governance 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.
 
3. Andrew Baker
Operations Director
Andrew holds a PhD in engineering 
from Imperial College London, and  
an MBA from Cranfield. He has held 
Board positions in the automotive and 
engineering services sectors and has 
extensive experience of developing and 
managing international manufacturing 
businesses. As a Director of Ricardo 
Consulting Engineers, he was 
responsible for its power generation 
business. Andrew joined Ceres Power  
in 2004 as Operations Director and is 
responsible for technology, product 
engineering and manufacturing.
4. 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.
 
5. 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 
services and products, venture creation 
and intellectual property licensing. 
Following a senior role at BAE Systems, 
Bob became Commercial Director of 
Ceres Power Limited in 2005.
6. Nigel Brandon
Chief Scientist
Nigel obtained his PhD from Imperial 
College London, and spent 14 years 
with BP and Rolls-Royce in fuel cells and 
related R&D areas. He is now the Shell 
Professor of Sustainable Development 
in Energy at Imperial College. Nigel is a 
world-renowned figure in fuel cells, and 
a founder of Ceres Power Limited.
7. 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 and the Nomination 
& Governance Committees.
8. 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. He was 
Chairman of Motorola Limited from  
1997 until mid-2008. He is a Director  
of two other publicly quoted 
companies. David joined Ceres Power 
in February 2008 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. CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
16
Corporate Social 
Responsibility
 Environmental performance 
improved by ‘Green Team’ 
Process water recirculation 
system established
Automatic, high efficiency 
lighting systems in use
Staff business travel and  
air travel minimised 
Use of public  
transport encouraged
100% participation in 
employee option scheme
Health and safety 
leadership demonstrated
Ceres Power is developing 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. 
During the year, the Group employed an 
average of 58 people. Ceres Power aims 
to conduct its business in an ethical and 
socially responsible manner.
We place great importance on the 
interests of all of our stakeholders 
including our employees, our customers, 
and our suppliers as well as the 
communities and the environment in 
which we operate. For instance, during 
the year, Ceres Power and British Gas 
New Energy jointly won the Rushlight 
Award for clean energy innovation.  
The award recognised Ceres Power’s 
unique technology and its potential 
contribution to reducing carbon 
emissions and household energy costs 
and improving energy security.
Employees
Ceres Power recognises that attracting, 
developing and retaining skilled people is 
essential to its success. We are committed 
to offering equal opportunities to all 
employees irrespective of background. 
Our aim is to recruit and retain the  
best staff available and we believe in 
maximising every employee’s potential.  
All permanent employees have a 
financial interest in the Company through 
participation in a share option scheme. 
Participation in the Group’s pension, life 
assurance and child care schemes is 
also available to all employees.
Health and safety
Ceres Power is committed to  
achieving best practice in all areas  
of health and safety. We believe that 
ongoing improvement is the best way  
to achieve this, and continuous risk 
assessments are used to review and 
improve workplaces and working 
practices. The Group has an excellent 
safety record.
Environment
Ceres Power is committed to operating 
its business in a sustainable way and 
minimising its impact on the environment. 
The Group has policies that require  
all employees to maximise recycling, 
encouraged by a green team of 
colleagues, re-use water from 
operations and to minimise energy 
usage. Business travel is monitored  
to ensure that wherever possible  
public transport is used and air travel 
avoided. Our cycle to work scheme has 
increased the number of employees 
using bicycles to commute.
Business integrity
Ceres Power strives to maintain the 
highest ethical standards in all of its 
business activities. It is also seeking to 
ensure these standards are applied  
by all its business partners, including 
supply chain partners. Ceres Power  
is looking to apply its ethical trading 
approach to its procurement activities.
Inaugural winner of clean 
energy innovation award 
jointly with British Gas in 
December 2007 17
CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
Corporate Governance Report
Principles of corporate governance
The Board of Directors recognises the importance of good 
corporate governance to enhance and protect shareholder 
value. AIM listed companies are not required to comply with 
the disclosure requirements of the 2006 Combined Code on 
Corporate Governance. However, the Board supports the 
principles contained in the 2006 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 comprises two 
other Non-Executive Directors and three Executive Directors. On 
1 January 2008, Dr Brian Count was appointed Non-Executive 
Chairman of the Board following the retirement of the previous 
Executive Chairman Philip Holbeche. On 4 February 2008, John 
Gunn retired from the Board as Non-Executive Director and Sir 
David Brown and Alan Wood joined the Board as Non-Executive 
Directors. The size of the Board and the balance between 
Executives and Non-Executives are considered appropriate to 
the Company’s size and stage of development.
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, 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 bonus 
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 Dr Brian Count as 
Chairman and Sir David Brown. The Committee oversees  
the monitoring of the Group’s internal controls, accounting 
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 Company  
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 and Alan Wood. 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 21.
Nomination & Governance Committee
The Nomination & Governance committee is comprised  
of Dr Brian Count as Chairman, Sir David Brown and  
Alan Wood. 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. 
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 are 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. CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
18
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 throughout the year and up to  
the date that the financial statements were signed, and this 
review did not identify any significant findings or weaknesses.
Corporate Governance Report continued 19
CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
Remuneration Report
The Board of Directors is pleased to present the Company’s 
first Remuneration Report. 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 Schedule 7A of the Companies Act 1985, 
Schedule B of the Combined Code and the Directors’ Report 
Regulations 2002. 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  
greater understanding of the rationale behind the current 
remuneration arrangements for senior management and  
the link between Group strategy and future potential rewards 
for executives.
All sections of the Remuneration Report, other than those 
specifically marked as audited, are unaudited.
The Remuneration Committee
The Remuneration Committee (the ‘Committee’) consists 
exclusively of Non-Executive Directors and presently 
comprises Brian Count and Alan Wood and is chaired by 
Sir David Brown. The Committee met nine times during the 
year. Dr Peter Bance attended all meetings in order to assist 
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. 
Since the year end the Committee has received 
independent executive remuneration advice, principally  
in relation to the design of incentive arrangements, from 
remuneration consultants Hewitt New Bridge Street (HNBS). 
Neither HNBS nor any other part of Hewitt Associates provided 
any other services to the Group during the year. 
Role of the Committee
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, recommends the Chairman’s fee 
level and oversees the compensation philosophy of Ceres 
Power generally.
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 development of the 
Group that is regarded as fair by other employees and  
by shareholders;
provide appropriate alignment between the Group’s 
strategic 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;
>
>
>
>
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
Before the Group reaches the volume production phase,  
the Committee believes that the remuneration structure  
for Executive Directors should be weighted more towards 
performance-related pay than would be the market norm  
for an ‘established’ company with, for example, circa 60%  
of the Chief Executive Officer’s ‘target’ remuneration 
package being determined by the Group’s performance.
To achieve this, the Committee proposes a structure which 
would see Directors receive below market levels of fixed pay 
(salary and benefits) in return for above market levels of 
performance-related pay potential. Accordingly, if the Group 
performs poorly then the Directors will receive significantly 
below market levels of total remuneration whereas if the 
Group performs strongly then the Directors will benefit along 
with shareholders.
Base salary
As noted above, the Committee currently aims to set salary 
levels at below market levels. The agreed salaries for 2008/09 
are: Dr Peter Bance £196,833; Rex Vevers £162,225; Dr Andrew 
Baker £162,225. 
Benefits
Executive Directors receive a pension contribution from  
the Group worth 8% of salary (with Executive Directors 
contributing 3% of salary) and life assurance of four  
times salary. 
Performance-related pay
To date, performance-related pay for the Executive Directors 
has been discretionary and has consisted of annual cash 
bonuses and periodic grants of market value share options 
with associated performance conditions at the discretion of 
the Committee.
The Committee is aware that this existing arrangement does 
not provide executives with a particularly clear ‘line-of-sight’ 
between performance and reward and is not consistent with 
corporate governance best practice due to the absence  
of measurable performance conditions on the share 
options. Accordingly, the Committee, assisted by HNBS, 
has developed new incentive arrangements that it is 
intended will apply from the 2008/09 financial year onwards. 
Details of these proposed new arrangements are outlined in 
the accompanying Notice of Meeting for the 2008 AGM.
Share ownership guideline
To be consistent with best practice, a formal share ownership 
guideline will be introduced for Executive Directors requiring 
them to retain at least half of any shares arising from the 
exercise of 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 Group shares 
worth at least 100% of their base salary (200% of salary for  
the Chief Executive Officer).
>
> CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
20
Service contracts
Each Executive Director has a service contract with the Group which contains details regarding remuneration, restrictions and 
disciplinary matters. Executive Directors are appointed on contracts terminable by the Group or the Director on not more than 
12 months’ notice. 
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 Board, following a recommendation from the Committee. The fees of the 
Non-Executive Directors are determined by the Board following a recommendation from the Chairman. 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 for Non-Executive Directors as at 30 June 2008 are as follows:
        Fees  
        £
Chairman        100,000
Other Non-Executive Directors        40,000
Non-Executive Directors are not eligible to participate in any of the Group’s incentive schemes. 
Directors’ emoluments for the year ended 30 June 2008 (audited)
     2007/08   2006/07
  
    Annual 
   Termination cash   
 Salary/Fee Pension
1
 payment bonus
2
 Total Emoluments Pension Total  
 £ £ £ £ £ £ £ £
Executive 
Dr Peter Bance 186,550 22,672 – 48,000 257 ,222 191,000 16,699 207 ,699
Rex Vevers 146,550 14,773 – 48,000 209,323 125,888 7 ,795 133,683
Dr Andrew Baker 153,750 37 ,526 – 48,000 239,276 164,500 23,267 187 ,767
Philip Holbeche
5
 92,992 19,847 157 ,000 20,000 289,839 169,500 18,980 188,480
Non-Executive        
Dr Brian Count
4
 77 ,407 – – – 77 ,407 13,231 – 13,231
Sir David Brown
3
 16,667 – – – 16,667 – – –
Alan Wood
3
 16,667 – – – 16,667 – – –
John Gunn
6
 17 ,500 – – – 17 ,500 28,667 – 28,667
 708,083 94,818 157 ,000 164,000 1,123,901 692,786 66,741 759,527
1  Pension contribution is based on 8% of gross salary and employer’s National Insurance saved on employee pension contributions.
2  The annual bonus payments for 2007/08 were awarded at the discretion of the Committee and reflected the timely achievement  
of key developmental and commercial goals.
3  Sir David Brown and Alan Wood were appointed to the Board of Directors on 4 February 2008.
4 During the year, Dr Brian Count received £7,407 of fees as shares in Ceres Power Holdings plc.
5 Philip Holbeche resigned from the Board of Directors on 31 December 2007.
6 John Gunn resigned from the Board of Directors on 4 February 2008.
Remuneration Report continued 21
CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
Directors’ interests in share options (audited)
  At 1 July  At 30 June   
  2007 Lapsed 2008 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
  2,267 ,400 – 2,267 ,400  
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  
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
  275,000 – 275,000  
Philip Holbeche
2
Options (unapproved)  480,000 – 480,000 £0.30 August 2003–August 2013
Options (unapproved)  33,340 – 33,340 £0.60 April 2004–April 2014
Options (approved)  166,660 – 166,660 £0.60 April 2004–April 2014
Options (unapproved)  150,000 (25,000) 125,000 £2.815 March 2006–March 2016
  830,000 (25,000) 805,000  
1 Or at date of resignation, if earlier.
2 Philip Holbeche resigned from the Board of Directors on 31 December 2007.
All options outlined above are fully exercisable at the Director’s discretion during the relevant exercise period.
During 2007/08, the Group’s share price varied between 138p and 390p and was 193p on 30 June 2008.
Directors’ interests in shares 
The Directors held the following interests in the shares of the Company:
Name Type At 1 July 2007 At 30 June 2008
Dr Brian Count Ordinary shares of £0.05 each 55,212 107 ,850
Rex Vevers purchased 60,000 ordinary shares of the Company on 16 October 2008.
Sir David Brown
Remuneration Committee Chairman
24 October 2008
>
> CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
22
Directors’ Report
for the year ended 30 June 2008
The Directors present their report and the audited financial 
statements for the year ended 30 June 2008. These financial 
statements are the first to be prepared following the adoption 
of International Financial Reporting Standards (‘IFRS’) as 
adopted by the European Union, the impact of which is 
detailed in notes 24 and 25.
Principal activity 
The principal activity of the Group throughout the year 
remained the development and commercial exploitation  
of microgeneration products based on 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 7. 
The Group considers its Key Performance Indicators (KPIs) to 
be revenue and the cash and cash equivalents balance, 
measured against predetermined targets. A review of these 
KPIs is contained in the Chief Executive’s Review on pages  
4 to 7. 
Results and dividends 
The loss for the financial year was £4,990,000 (2007: 
£4,885,000). The cash used in operations during the year  
was £3,735,000 (2007: £3,891,000). At 30 June 2008 the 
Group has net cash and cash equivalents of £27,476,000 
(2007: £11,142,000). 
The Directors do not recommend the payment of a dividend  
(2007: £nil). 
Research and development
During the year, the Group incurred expenditure of £5,748,000 
(2007: £4,942,000) on research and development, all of which 
was written off to the income statement. Progress of research 
and development is discussed in the Chief Executive’s Review 
on pages 4 to 7. 
Charitable and political contributions
The Group has made no charitable or political contributions 
during the year (2007: £nil).
Principal risks and uncertainties
In addition to financial risk management which is detailed in  
note 14 to the financial statements, there are a number of 
risks and uncertainties which could have a material impact 
on the execution of the Company’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 below:
Technology risk 
The Group has made substantial progress during the year in 
the development of a fuel cell Combined Heat and Power 
(CHP) product. However, uncertainty still remains regarding 
the successful development and application of the 
Company’s fuel cell technology to CHP and other potential 
products. Feasibility of the technology cannot be assessed 
until the product development cycles are close to 
completion. The Directors remain focused on delivering 
against these objectives.
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 alternate products from competitors.
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 to unauthorised parties  
using the Group’s technology in their own products. 
Growth management risk
The Directors anticipate that the Group will grow significantly 
in the near future. Investment in operational, manufacturing, 
financial and managerial resources and management 
information systems and controls is already underway in 
order to meet the expected growth. There is a risk that growth 
will be constrained by insufficient resources. 
Key personnel dependence risk
As discussed in the Remuneration Report section of this 
Annual Report, the Directors are in the process of putting in 
place certain incentive schemes for key personnel. These 
support 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 resource leaving the business. 
Directors
The Directors of the Company, who served during the period, 
are as follows:
Dr Brian Count (Non-Executive Chairman) 
– appointed as Chairman 1 January 2008
Dr Peter Bance (Chief Executive Officer)
Rex Vevers (Finance Director)
Dr Andrew Baker (Operations Director)
Sir David Brown (Non-Executive Director)  
– appointed 4 February 2008
Alan Wood (Non-Executive Director)  
– appointed 4 February 2008
Philip Holbeche (Chairman)  
– resigned 31 December 2007
John Gunn (Non-Executive Director)  
– resigned 4 February 2008 23
CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
Substantial shareholders
The Company has been notified of the following holdings of 
3% or more of the 66,758,875 ordinary shares of 5p each of the 
Company on 20 October 2008:
 Number %
Oppenheimer Funds Inc 6,714,643 10.06%
GB Gas Holdings Limited 6,671,838 9.99%
Imperial Innovations LLP 4,177 ,505 6.26%
FIL (‘Fidelity Investments Limited’) 3,321,326 4.98%
FMR Corp. (‘Fidelity Investments’) 2,766,362 4.14%
Artio Global Management LLP 2,533,258 3.79%
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  
27 days (2007: 63 days). Trade creditors of the Company  
at the year end as a proportion of amounts invoiced by 
suppliers during the year represent 1 day (2007: 55 days).
Statement of Directors’ responsibilities in respect 
of the Annual Report and the financial statements
The Directors are responsible for preparing the Annual  
Report and the Group and the parent Company  
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 prepared 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 
applicable law and United Kingdom Accounting Standards 
(United Kingdom Generally Accepted Accounting Practice). 
The Group and parent Company financial statements are 
required by law to give a true and fair view of the state of 
affairs of the Company and the Group and of the profit or 
loss of the Group for that period.
In preparing those financial statements, the Directors are 
required to:
select suitable accounting policies and then apply  
them consistently;
make judgements and estimates that are reasonable  
and prudent;
state that the Group financial statements comply with IFRS 
as adopted by the European Union, and with regard to the 
parent Company financial statements that applicable UK 
Accounting Standards have been followed, subject to any 
material departures disclosed and explained in the 
financial statements; and
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prepare the Group and parent Company financial 
statements on the going concern basis unless it is 
inappropriate to presume that the Group will continue  
in business, in which case there should be supporting 
assumptions or qualifications as necessary. 
The Directors confirm that they have complied with the above 
requirements in preparing the financial statements.
The Directors are responsible for keeping proper accounting 
records that disclose with reasonable accuracy at any time 
the financial position of the Company and the Group and to 
enable them to ensure that the financial statements comply 
with the Companies Act 1985. 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 Group website. Legislation in the United 
Kingdom governing the preparation and dissemination  
of financial statements may differ from legislation in  
other jurisdictions. 
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 re-appointment will be proposed at  
the Annual General Meeting.
By order of the Board
Dr Brian Count
Chairman
> CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
24
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 2008  
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. These Group financial statements 
have been prepared under the accounting policies set  
out therein.
We have reported separately on the parent Company 
financial statements of Ceres Power Holdings plc for the 
year ended 30 June 2008 and on the information in  
the Remuneration Report that is described as having  
been audited.
Respective responsibilities of Directors and Auditors
The Directors’ responsibilities for preparing the Annual Report 
and the Group financial statements in accordance with 
applicable law and International Financial Reporting 
Standards (IFRS) as adopted by the European Union are  
set out in the Statement of Directors’ Responsibilities.
Our responsibility is to audit the Group financial statements in 
accordance with relevant legal and regulatory requirements 
and International Standards on Auditing (UK and Ireland). 
This report, including the opinion, has been prepared for and 
only for the Company’s members as a body in accordance 
with Section 235 of the Companies Act 1985 and for no other 
purpose. We do not, in giving this opinion, 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.
We report to you our opinion as to whether the Group 
financial statements give a true and fair view and whether 
the Group financial statements have been properly prepared 
in accordance with the Companies Act 1985. We also report 
to you whether in our opinion the information given in the 
Directors’ Report is consistent with the Group financial 
statements. The information given in the Directors’  
Report includes that specific information presented in 
the Chairman’s Statement and the Chief Executive’s Review 
that is cross referred from the review of business and future 
developments and research and development sections of 
the Directors’ Report. 
In addition we report to you if, in our opinion, we have  
not received all the information and explanations we  
require for our audit, or if information specified by law 
regarding Directors’ remuneration and other transactions 
is not disclosed.
We read other information contained in the Annual Report 
and consider whether it is consistent with the audited Group 
financial statements. The other information comprises the 
Highlights and Key Achievements, the Chairman’s Statement, 
the Chief Executive’s Review, the Ceres Operational Model, 
Combined Heat and Power, Growth Opportunity, Directors 
and Senior Management, Corporate Social Responsibility, 
Corporate Governance Report, the unaudited part of the 
Remuneration Report, the Directors’ Report and all the other 
information listed on the contents page. We consider the 
implications for our report if we become aware of any 
apparent misstatements or material inconsistencies with the 
Group 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 (UK and Ireland) issued by the 
Auditing Practices Board. An audit includes examination,  
on a test basis, of evidence relevant to the amounts and 
disclosures in the Group financial statements. It also includes 
an assessment of the significant estimates and judgements 
made by the Directors in the preparation of the Group 
financial statements, and of whether the accounting policies 
are appropriate to the Group’s circumstances, consistently 
applied and adequately disclosed.
We planned and performed our audit so as to obtain all 
the information and explanations which we considered 
necessary in order to provide us with sufficient evidence  
to give reasonable assurance that the Group 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 Group  
financial statements.
Opinion
In our opinion:
the Group financial statements give a true and fair view, in 
accordance with IFRS as adopted by the European Union,  
of the state of the Group’s affairs as at 30 June 2008 and of  
its loss and cash flows for the year then ended;
the Group financial statements have been properly 
prepared in accordance with the Companies Act  
1985; and
the information given in the Directors’ Report is consistent  
with the Group financial statements.
PricewaterhouseCoopers LLP
Chartered Accountants and Registered Auditors
Cambridge
24 October 2008
Notes:
• The maintenance and integrity of the Ceres Power Holdings plc website is 
the responsibility of the Directors; the work carried out by the auditors does 
not involve consideration of these matters and, accordingly, the auditors 
accept no responsibility for any changes that may have occurred to the 
financial statements since they were initially presented on the website.
• Legislation in the United Kingdom governing the preparation and 
dissemination of financial statements may differ from legislation in  
other jurisdictions.
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> 25
CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
Consolidated Income Statement
for the year ended 30 June 2008
       2008 2007 
      Note £’000 £’000
Revenue      2 722 98
Research and development costs       (5,748) (4,942)
Administrative expenses       (2,183) (2,024)
Other operating income      3 845 970
Operating loss       (6,364) (5,898)
Finance income      4 974 597
Loss before income tax      3 (5,390) (5,301)
Income tax credit       7 400 416
Loss for the financial year      18 (4,990) (4,885)
Loss per £0.05 ordinary share expressed in pence per share:
– basic and diluted      8 (7.98)p (8.27)p
All amounts included in the income statement relate to continuing operations.
The notes on pages 29 to 43 are an integral part of these consolidated financial statements.  CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
26
Consolidated Balance Sheet
as at 30 June 2008
       2008 2007 
      Note £’000 £’000
Assets
Non-current assets
Property, plant and equipment      9 2,034 1,842
Other receivables      11 53 53
Total non-current assets       2,087 1,895
Current assets
Trade and other receivables      11 492 628
Current tax receivable       400 –
Cash and cash equivalents      12 27,476 11,142
Total current assets       28,368 11,770
Liabilities
Current liabilities
Trade and other payables      13 (1,748) (855)
Net current assets       26,620 10,915
Non-current liabilities
Other payables      13 (77) (22)
Net assets        28,630 12,788
Equity
Share capital      16 3,337 2,981
Share premium account      18 35,465 15,594
Other reserve      18 7,463 7 ,463
Profit and loss account (deficit)      18 (17,635) (13,250)
Total shareholders’ equity       28,630 12,788
The notes on pages 29 to 43 are an integral part of these consolidated financial statements.
The financial statements on pages 25 to 43 were approved by the Board of Directors on 24 October 2008 and were signed on 
its behalf by:
Dr Brian Count Dr Peter Bance
Chairman Chief Executive Officer
  27
CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
Consolidated Cash Flow Statement
for the year ended 30 June 2008
       2008 2007 
      Note £’000 £’000
Cash flows from operating activities
Cash used in operations      19 (3,735) (3,891)
Income tax received       – 494
Net cash used in operating activities       (3,735) (3,397)
Cash flows from investing activities
Purchase of property, plant and equipment       (1,095) (577)
Finance income received       923 597
Net cash (used in)/generated from investing activities      (172) 20
Cash flows from financing activities
Proceeds from issuance of ordinary shares       20,301 501
Net expenses of shares issued       (81) –
Net cash generated from financing activities        20,220 501
Net increase/(decrease) in cash and cash equivalents      16,313 (2,876)
Exchange gains/(losses) on cash and cash equivalents      21 (3)
       16,334 (2,879)
Cash and cash equivalents at beginning of year       11,142 14,021
Cash and cash equivalents at end of year      12 27,476 11,142 CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
28
Consolidated Statement  
of Changes in Equity
for the year ended 30 June 2008
       Profit 
     Share  and loss 
    Share premium Other account 
    capital account reserve (deficit) Total 
    £’000 £’000 £’000 £’000 £’000
At 1 July 2006    2,925 15,137 7 ,463 (9,535) 15,990
Issue of shares, net of costs    56 457 – – 513
Loss for the financial year    – – – (4,885) (4,885)
Share-based payments charge    – – – 1,170 1,170
At 30 June 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 29
CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
Notes to the Consolidated 
Financial Statements
for the year ended 30 June 2008
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 endorsed by the European 
Union, International Financial Reporting Interpretations 
Committee (‘IFRIC’) interpretations and those parts of the 
Companies Act 1985 applicable to companies reporting 
under IFRS. Details of how the Group’s results and financial 
position are affected by the change to IFRS are set out in  
notes 24 and 25. 
(a) First time adoption:
These financial statements are the first to be prepared under IFRS.
IFRS 1, ‘First Time Adoption of International Financial 
Reporting Standards’, sets out the approach to be followed 
when IFRS are applied for the first time. As a general principle, 
IFRS 1 requires that accounting policies are to be applied 
retrospectively, although IFRS 1 provides a number of optional 
exceptions including where the cost of compliance is 
deemed to exceed the benefits to users of the financial 
statements. Where applicable, the options selected by 
management under IFRS 1 are set out in note 24.
(b) Standards, amendments and interpretations effective for 
the first time in the year ended 30 June 2008:
IFRS 7, ‘Financial instruments: Disclosures’, and the 
complementary amendment to IAS 1, ‘Presentation of 
financial statements – Capital disclosures’, introduces new 
disclosures relating to financial instruments and does not 
have any impact on the classification and valuation of the 
Group financial instruments, or the disclosures relating to 
taxation and trade and other payables. 
IFRIC 8, ‘Scope of IFRS 2’. This requires consideration of 
transactions involving the issuance of equity instruments, 
where the identifiable consideration received is less than  
the fair value of the equity instruments issued in order to 
establish whether or not they fall within the scope of IFRS 2. 
This standard does not have any impact on the Group 
financial statements.
IFRIC 10, ‘Interim financial reporting and goodwill’. This 
prohibits the impairment losses recognised in an interim 
period on goodwill and investments in equity instruments  
and in financial assets carried at cost to be reversed at a 
subsequent balance sheet date. This interpretation does  
not have any impact on the Group financial statements.
IFRIC 11, ‘IFRS 2 – Group and treasury share transactions’, 
provides guidance on whether share-based transactions 
involving treasury shares or involving Group entities (for 
example, options over a parent’s shares) should be 
accounted for as equity-settled or cash-settled share-based 
payment transactions in the stand-alone accounts of the 
parent and Group companies. Since the principles of this 
standard were already applied by the Group, there is no new 
effect on the Group financial statements.
(c) Standards, amendments and interpretations effective in the 
year ended 30 June 2008 but not relevant:
Revised guidance on implementing IFRS 4, ‘Insurance 
contracts’. This reflects the changes made to IFRS 4 by  
IFRS 7, ‘Financial instruments: Disclosures’. Published by the 
IASB in December 2005, it applies when an entity adopts  
IFRS 7. As the Group does not provide insurance, this 
guidance is not relevant.
IFRIC 7, ‘Applying the restatement approach under IAS 29,  
Financial reporting in hyper-inflationary economies’. Since  
the Group does not operate in hyper-inflationary economies,  
this guidance is not relevant.
IFRIC 9, ‘Re-assessment of embedded derivatives’. This 
clarifies that an entity should assess whether an embedded 
derivative is required to be separated from the host contract 
and accounted for as a derivative when the entity first 
becomes a party to the contract. Subsequent reassessment 
is prohibited, unless there is a change in the contract’s terms, 
in which case it is required. Since the Group does not have 
any embedded derivatives, this guidance is not relevant.
(d) 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 payments’. 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. CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
30
1. Summary of significant accounting policies continued
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 annual periods beginning on or after 
1 January 2009.
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 to 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’.
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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. It is 
not relevant for the Group. Published by the IASB in November 
2006, it is effective for annual periods beginning on or after 1 
January 2008.
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 will not be relevant. Published by the IASB 
in June 2007, it is effective for annual periods beginning on  
or after 1 July 2008.
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 will not be relevant. Published by  
the IASB in July 2007, it is effective for annual periods 
beginning on or after 1 January 2008.
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.
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 45 to 50.
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. Certain of the policies have  
only been applied from 1 July 2006 as permitted under  
the transitional arrangements for first time adoption of IFRS 
and as noted in the appropriate individual policies.
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. Although these estimates are based on 
management’s best knowledge of the amount, event or 
actions, actual results ultimately differ from these estimates. 
Notes to the Consolidated 
Financial Statements
for the year ended 30 June 2008 continued 31
CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
1. Summary of significant accounting policies continued
The estimates and underyling 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  
estimating the appropriate period over which to  
recognise Centrica-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 
in order to provide returns for shareholders and benefits for 
other stakeholders and to maintain an optimal capital 
structure to reduce the cost of capital. 
In order to minimise capital risk the Group’s objective is to 
have a gearing ratio of zero. The Group has met this objective 
during the year to 30 June 2008 and maintains its zero 
gearing ratio at the time the accounts are signed. 
The gearing ratio is calculated as net debt divided by total 
capital. Net debt is calculated as total borrowings (including 
‘current and non-current borrowings’ as shown in the 
consolidated balance sheet) less cash and cash 
equivalents. Total capital is calculated as ‘equity’ as  
shown in the consolidated balance sheet plus net debt. 
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. 
Depreciation is calculated using the straight-line method to 
allocate their cost over their estimated useful lives as follows: 
Leasehold improvements   10%
Plant and machinery    33%
Computer equipment   33%
Fixtures and fittings   33%
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 three months, reduced by 
overdrafts to the extent that there is a right of offset against 
other cash balances. 
Trade and other receivables
Trade receivables are recognised and carried at the original 
invoice amount less an allowance for any uncollectible 
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.  CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
32
1. Summary of significant accounting policies continued
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
Employees receive remuneration in the form of 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  
model. The expected life used in the model has been 
adjusted, based on the Directors’ best estimate, for the 
effects of non-transferability, exercise restrictions and 
behavioural considerations. 
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, either over the period that the related 
work is performed, subject to receipt of cash, or when the 
specific conditions in agreements have been met. All costs 
relating to these development programmes 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 
Notes to the Consolidated 
Financial Statements
for the year ended 30 June 2008 continued
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. Details of 
financial instruments are shown in note 14. 
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. 
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 2008 and the year ended  
30 June 2007 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.  33
CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
3. Loss before income tax 
       2008 2007 
       £’000 £’000
Loss before income tax is stated after charging/(crediting):
Staff costs, including share-based payment charges (note 5)      3,938 4,112
Depreciation on property, plant and equipment       770 674
Operating lease rentals payable:
– plant and machinery       5 3
– property       157 129
Other operating income – grant income       (845) (970)
Repairs expenditure on property, plant and equipment      20 10
Net foreign exchange (gains)/losses       (16) 3
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        13 10
– auditing of accounts of subsidiaries of the Company pursuant to legislation    32 26
– other services pursuant to legislation       14 14
– other services relating to taxation        13 22
– other services        6 23
4. Finance income
       2008 2007 
       £’000 £’000
Interest receivable on cash and cash equivalents       974 597
5. Employees and Directors
The average monthly number of persons (including Executive Directors) employed by the Group during the year was:
       2008 2007 
       Number Number
By activity:
Research and development       46 40
Administration       12 12
       58 52
       2008 2007 
       £’000 £’000
Staff costs (for the above persons) comprised:
Wages and salaries        2,819 2,489
Social security costs        265 249
Other pension costs (note 6)       249 204
Share-based payments       605 1,170
       3,938 4,112
       2008 2007 
       £’000 £’000
Directors’ emoluments
Aggregate emoluments       872 711
Company contributions to defined contribution pension schemes     95 67
Compensation for loss of office       157 –
       1,124 778 CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
34
5. Employees and Directors continued
       2008 2007 
       £’000 £’000
Highest paid Director
Aggregate emoluments       234 191
Company contributions to defined contribution pension schemes     23 17
       257 208
Three Directors (2007: four 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 21. 
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:
       2008 2007 
       £’000 £’000
Salaries and other short-term employment benefits        744 651
Post-employment benefits       95  67
Termination benefits       157 –
Share-based payments        317  696
       1,313 1,414
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 £249,000 (2007: £204,000). A total of £41,000 was payable to the funds at the year end (2007: £37,000).
7. Income tax credit 
       2008 2007 
       £’000 £’000
UK corporation tax – R&D tax credit       (250) –
Adjustment in respect of prior periods – R&D tax credit      (150) (416)
Income tax (credit)       (400) (416)
No corporation tax liability has arisen during the year (2007: £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.
The tax result for the year is different from the standard rate of corporation tax in the United Kingdom of 20% (2007: 19%). The 
differences are explained below:
       2008 2007 
       £’000 £’000
Loss before income tax       (5,390) (5,301)
Loss before income tax multiplied by the UK tax rate of 20% (2007: 19%)     (1,078) (1,007)
  
Effects of:  
Losses carried forward       705 814
Expenses not deductible for tax purposes       (153) 169
Accelerated capital allowances and other timing differences      210 24
Adjustment in respect of prior periods       (150) (416)
Tax at marginal rate       66 –
Total income tax (credit)       (400) (416)
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 2008 or in the previous year. 
Notes to the Consolidated 
Financial Statements
for the year ended 30 June 2008 continued 35
CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
8. Loss per share continued
The loss for the financial year ended 30 June 2008 was £4,990,000 (2007: £4,885,000) and the weighted average number  
of £0.05 ordinary shares in issue during the year ended 30 June 2008 was 62,548,262 (2007: 59,057,064). 
9. Property, plant and equipment
   Leasehold Plant and Computer Fixtures Assets under 
   improvements machinery equipment and fittings construction Total 
   £’000 £’000 £’000 £’000 £’000 £’000
Cost
At 1 July 2006   1,017 1,367 247 53 283 2,967
Additions   217 312 74 9 34 646
Reclassifications   5 307 5 – (317) –
At 30 June 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
Depreciation
At 1 July 2006   246 720 102 29 – 1,097
Charge for the year   110 466 82 16 – 674
At 30 June 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
Net book value
At 30 June 2008   820 1,051 97 17 49 2,034
At 30 June 2007   883 800 142 17 – 1,842
At 30 June 2006   771 647 145 24 283 1,870
10. Subsidiary undertakings 
Details of the Company’s subsidiaries at 30 June 2008 are as follows:
   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 these consolidated financial statements. 
11. Trade and other receivables
       2008 2007 
       £’000 £’000
Amounts falling due within one year:
Trade receivables       – 65
Other receivables       132 113
Prepayments and accrued income       360 450
       492 628
Amounts falling due after more than one year:
Prepayments and accrued income       53 53
       545 681
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 (2007: £nil). The carrying amounts of the Group’s trade and other 
receivables are all denominated in pound sterling.  CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
36
12. Cash and cash equivalents
       2008 2007 
       £’000 £’000
Cash at bank and in hand
1
       (70) 1,642
Money market funds       27,546 –
Short-term investments       – 9,500
       27,476 11,142
1 The negative cash at bank and in hand balance at 30 June 2008 is due to timing differences relating to unpresented cheques.
The Group holds 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 1 week LIBID and offer same day access. 
      Interest  2008 2007 
      rate type £’000 £’000
Interest rate risk profile of the Group’s financial assets
Cash at bank and in hand      Floating (70) 1,642
Money market funds      Floating 27,546 –
Short-term investments      Fixed – 9,500
       27,476 11,142
The fixed rate short-term investments in pound sterling during the year were placed with banks for between overnight and 
three months and earned interest of between 5.07% and 6.68% (2007: 4.00% and 5.82%). Floating rate cash deposits and 
money market funds earned interest based on relevant UK LIBOR equivalents. 
Borrowing facilities
The Group had no undrawn committed borrowing facilities available during the year covered by the financial statements 
(2007: none). 
13. Trade and other payables
       2008 2007 
       £’000 £’000
Amounts falling due within one year:
Trade payables       235 502
Taxation and social security       82 76
Other payables       45 42
Accruals and deferred income       1,386 235
       1,748 855
Amounts falling due after more than one year, but not more than two years:
Accruals and deferred income       56 –
Other payables       21 22
       77 22
14. 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.
The Group’s liabilities consist of short-term payables and deferred income falling due after more than one year which does 
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. 
Notes to the Consolidated 
Financial Statements
for the year ended 30 June 2008 continued 37
CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
14. Financial instruments continued
The principal risks addressed are as follows:
Credit risk
The Group’s exposure to credit risk arises from holdings of cash and cash equivalents. The Group typically places surplus funds 
into pooled money market funds. The Group’s credit policy limits investments to money market funds which carry minimum 
short-term credit ratings of AAAm from Standard & Poor’s and Aaa/MR1+ from Moody’s.
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 2008 (2007: £0.1 million). 
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 purchase commitments, when known. At 30 June 2008, nil% (2007: 77%) of foreign 
currency purchase commitments were hedged by foreign currency contracts. Fair value is based on the market price of 
comparable instruments at the balance sheet date.
The table below shows the extent to which the Group companies have monetary assets and liabilities in currencies other than 
their functional currency. Foreign exchange differences on the retranslation of these assets and liabilities are taken to the 
income statement of the Group companies and the Group.
       2008 2007 
       £’000 £’000
Foreign currency monetary assets:
United States dollar       12 52
Euro       9 20
       21 72
The functional currency of the Group is pound sterling. 
15. 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:
Difference between capital allowances and depreciation      (296) 15
Deductions on exercise of share options       (1,872) (3,340)
Losses carried forward       (5,150) (4,144)
Other short-term timing differences       (233) (10)
       (7,551) (7 ,479)
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.
16. Share capital
 2008 2007
    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   59,618,027 2,981 58,504,885 2,925
Allotted under share option schemes   394,362 20 205,525 10
Allotted under warrant schemes   53,810 3 902,405 46
Issued as remuneration for services   2,638 – 5,212 –
Allotted on cash placing   6,671,838 333 – –
Ordinary shares of £0.05 each at 30 June   66,740,675 3,337 59,618,027 2,981 CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
38
16. Share capital continued
During the year the Company issued 394,362 ordinary shares of £0.05 each on the exercise of employee share options for 
cash consideration of £248,618, and 53,810 ordinary shares of £0.05 each on the exercise of warrants for cash consideration  
of £37,667.
Also during the year a total of 2,638 ordinary shares of £0.05 each were issued as remuneration for Non-Executive Director 
services. The value of the shares on the dates of issue totalled £7,407.
On 6 February 2008, the Company issued 6,671,838 ordinary shares of £0.05 each by way of a cash placing to GB Gas 
Holdings Ltd for a cash consideration of £20,015,514. 
Certain investors have 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 number of warrants 
remaining outstanding at 30 June 2008 is:
       Exercise 
      Number of price Exercise 
Date granted      warrants (pence) period
18 December 2003      147 ,606 70 5 years
The warrants are exercisable during a five year period from the date of grant. On exercise, each warrant entitles the holder to 
one £0.05 ordinary share in the Company.
17. Share options
The Company has issued share options under a share option 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 Employee’s Share Option Scheme’ at the time of flotation.
Under these schemes, 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.
The Group recognised a total expense relating to employee share-based payments under the equity-settled share option 
plans of £605,000 (2007: £1,170,000).
Movements in the total number of share options outstanding and their relative weighted average exercise price are as follows:
 2008 2007
      Weighted  Weighted 
      average  average 
     Number exercise Number exercise 
     (’000) price (’000) price
Outstanding at 1 July     6,156 £0.89 5,836 £0.74
Granted     210 £1.91 525 £2.32
Exercised     (394) £0.63 (205) £0.41
Lapsed     (65) £2.64 – –
Outstanding at 30 June     5,907 £0.92 6,156 £0.89
Exercisable      5,183 £0.74 4,889 £0.55
The weighted average fair value of options granted in the year was £220,133 (2007: £743,785). The weighted average share 
price at the date of exercise during the year was £2.91 (2007: £2.16).
Notes to the Consolidated 
Financial Statements
for the year ended 30 June 2008 continued 39
CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
17. Share options continued
The range of exercise prices for options outstanding at the end of the year is as follows:
 2008 2007
     Weighted  Weighted 
     average  average 
     exercise Number exercise Number 
Expiry date – 30 June     price (’000) price (’000)
2012     £0.23 193 £0.23 293
2013     £0.29 1,558 £0.29 1,588
2014     £0.41 2,063 £0.41 2,228
2015     £0.75 385 £0.79 433
2016     £2.28 1,013 £2.28 1,089
2017     £2.29 485 £2.32 525
2018     £1.91 210 – –
The options outstanding at the end of the year have a weighted average contractual life of 5.96 years (2007: 6.87 years).
Fair values were measured by use of the Black-Scholes pricing model. The inputs to the model were as follows:
       2008 2007 
       16 July 10 July 
       2007 to 2006 to 
       9 June 29 May 
Grant date       2008 2007
Share price at date of grant and exercise price (£)       1.42-3.51 2.15-2.87
Expected volatility (%)       47-60 57-69
Expected option life (years)       5-7 5-7
Average risk-free interest rate (%)       3.96-5.71 4.17-5.50
Expected dividend yield       Nil Nil
The exercise price of an option is the closing mid-market share price at the date of grant. 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 since it was listed on AIM, updated from the prior year volatility calculation, which was 
based on historic volatility over the last seven years of comparable listed companies. The risk-free rate of return is the yield on 
zero-coupon UK Government bonds of a term consistent with the expected option life.
18. Reserves
        Profit 
      Share  and loss 
      premium Other account 
      account reserve (deficit) 
      £’000 £’000 £’000
At 1 July 2006      15,137 7 ,463 (9,535)
Premium on shares issued:
– Exercise of share options      74 – –
– Exercise of warrant rights      371 – –
– Share-based remuneration for services      12 – –
Loss for the financial year      – – (4,885)
Share-based payments charge      – – 1,170
At 30 June 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)
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. CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
40
19. Cash used in operations
       2008 2007 
       £’000 £’000
Loss before income tax       (5,390) (5,301)
Adjustments for:
Finance income       (974) (597)
Depreciation of property, plant and equipment       770 674
Share-based payments charge       605 1,170
Share-based remuneration for services       7 12
Operating cash flows before movements in working capital     (4,982) (4,042)
Decrease/(increase) in trade and other receivables       167 (129)
Increase in trade and other payables       1,080 280
Decrease in working capital       1,247 151
Cash used in operations       (3,735) (3,891)
20. 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:
 2008 2007
     Land and  Land and 
     buildings Other buildings Other 
     £’000 £’000 £’000 £’000
No later than 1 year     153 5 153 3
Later than 1 year and no later than 5 years     502 11 611 9
Later than 5 years     213 – 257 –
     868 16 1,021 12
The property leases have an average minimum term of 5.9 years (2007: 6.9 years). The rentals are fixed for the lease terms 
subject to periodic rent reviews. The office equipment leases have an average term of 3.4 years (2007: 4.5 years). 
21. Contingent liabilities
During the year, the Group recognised grant income in respect of research and development activities of £845,000 (2007: 
£970,000) (see note 3) in accordance with the Group’s accounting policy. The grants may be required to be repaid if the 
Group does not meet subsequent reporting requirements and technical milestones specified in the grant offer letters. In 
addition £624,000 (2007: £523,000) 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. 
22. Capital commitments
Capital expenditure that has been contracted for but has not been provided for in the financial statements amounts to 
£218,000 as at 30 June 2008 (2007: £165,000).
23. Related party transactions
Imperial College and its technology transfer company, Imperial Innovations Group plc (and subsidiaries including Imperial 
Innovations LLP) are related parties by virtue of their shareholding in Ceres Power Holdings plc. During the year, a total of 
£6,667 (2007: £6,495) was payable to Imperial College (and its subsidiaries) in respect of tuition fees and equipment usage. 
£5,000 (2007: £nil) was payable to IC Consultants Limited (a wholly owned subsidiary of Imperial College) in respect of a 
collateral agreement. Of these amounts, £nil (2007: £nil) remains outstanding to IC Consultants Limited and £nil (2007: £nil) to 
Imperial College at 30 June 2008.
Notes to the Consolidated 
Financial Statements
for the year ended 30 June 2008 continued 41
CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
24. Explanation of transition to International Financial Reporting Standards (IFRS)
Ceres Power Holdings plc has produced its consolidated financial statements in accordance with IFRS as endorsed by the 
European Union.
The commentary below highlights the key changes that have arisen due to the transition from reporting under UK GAAP to 
reporting under IFRS. The Group’s date of transition to IFRS is 1 July 2006, which is the beginning of the comparative period for 
the 2007 financial year. Therefore the opening balance sheet for IFRS purposes is that reported at 1 July 2006 as amended for 
changes due to IFRS.
These financial statements are the first to be prepared under IFRS. The comparative figures have been prepared on the  
same basis and are therefore restated from those previously reported under UK GAAP. To help understand the impact of 
the transition, reconciliations have been produced below to show the changes made to statements previously reported 
under UK GAAP in arriving at the equivalent statements under IFRS. The following reconciliations are provided:
1. Consolidated balance sheet at 1 July 2006.
2. Consolidated income statement for the year to 30 June 2007.
3. Consolidated balance sheet at 30 June 2007.
The income statement for the year ended 30 June 2008 and the balance sheet at that date are reported under IFRS. As they 
have not previously been reported under UK GAAP no reconciliation to IFRS is required.
The net effect of presenting the 2007 full year financial statements under IFRS rather than UK GAAP is to increase the loss after 
tax reported from £4,866,000 to £4,885,000 and to decrease net assets by £89,000. 
Income tax credits of £494,000 received during the year ended 30 June 2007 are classified as a part of operating cash flows 
under IFRS, but were included in a separate category of tax cash flows under UK GAAP. There are no other material differences 
between the cash flow statement presented under IFRS and the cash flow statement presented under UK GAAP.
25. Reconciliations between UK GAAP and IFRS
Reconciliation of the Consolidated Balance Sheet
at 1 July 2006 (date of transition from UK GAAP to IFRS)
 Effects of transition to IFRS
     As reported Employee  Restated 
     under benefits Leases under 
     UK GAAP (IAS 19) (IAS 17) IFRS 
     £’000 £’000 £’000 £’000
Assets
Non-current assets
Property, plant and equipment     1,870 – – 1,870
Other receivable     53 – – 53
Total non-current assets     1,923 – – 1,923
Current assets
Trade and other receivables     476 – – 476
Cash and cash equivalents     14,021 – – 14,021
Current tax receivable      78 – –  78
Total current assets     14,575 – – 14,575
Liabilities
Current liabilities
Trade and other payables     (438) (52) 7 (483)
Net current assets     14,137 (52) 7 14,092
Non-current liabilities
Other payables      – – (25) (25)
Net assets     16,060 (52) (18) 15,990
Equity
Share capital     2,925 – – 2,925
Share premium account     15,137 – – 15,137
Other reserve     7 ,463 – – 7 ,463
Profit and loss account (deficit)     (9,465) (52) (18) (9,535)
Total shareholders’ equity     16,060 (52) (18) 15,990 CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
42
25. Reconciliation between UK GAAP and IFRS continued
Reconciliation of the Impact of IFRS on the Income Statement
for the year ended 30 June 2007
 Effects of transition to IFRS
    As reported Employee  Financial Restated 
    under benefits Leases instruments under 
    UK GAAP (IAS 19) (IAS 17) (IAS 39) IFRS 
    £’000 £’000 £’000 £’000 £’000
Revenue    98 – – – 98
Research and development costs    (4,922) (12) (8) – (4,942)
Administrative expenses    (2,025) 2 – (1) (2,024)
Other operating income    970 – – – 970
Operating loss    (5,879) (10)  (8) (1) (5,898)
Finance income     597 – – – 597
Loss before income tax     (5,282) (10) (8) (1) (5,301)
Income tax credit     416 – – – 416
Loss for the financial year     (4,866) (10) (8) (1) (4,885)
Reconciliation of the Consolidated Balance Sheet
at 30 June 2007
 Effects of transition to IFRS
    As reported Employee  Financial Restated 
    under benefits Leases instruments under 
    UK GAAP (IAS 19) (IAS 17) (IAS 39) IFRS 
    £’000 £’000 £’000 £’000 £’000
Assets
Non-current assets
Property, plant and equipment    1,842 – – – 1,842
Other receivable    53 – – – 53
Total non-current assets    1,895 – – – 1,895
Current assets
Trade and other receivables    628 – – – 628
Cash and cash equivalents    11,142 – – – 11,142
Total current assets    11,770 – – – 11,770
Liabilities
Current liabilities
Trade and other payables    (788) (62) (4) (1) (855)
Net current assets    10,982 (62) (4) (1) 10,915
Non-current payables 
Other payables    – – (22) – (22)
Net assets    12,877 (62) (26) (1) 12,788
Equity
Share capital    2,981 – – – 2,981
Share premium account    15,594 – – – 15,594
Other reserve    7 ,463 – – – 7 ,463
Profit and loss account (deficit)    (13,161) (62) (26) (1) (13,250)
Total shareholders’ equity    12,877 (62) (26) (1) 12,788
Notes to the Consolidated 
Financial Statements
for the year ended 30 June 2008 continued 43
CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
25. Reconciliation between UK GAAP and IFRS continued
Principal impact of IFRS
The key differences between UK GAAP and IFRS that impact the Group are set out below:
Employee benefits – IAS 19
Under UK GAAP the Group did not accrue for holiday pay.
Under IFRS the Group has accrued holiday pay in line with IAS 19. 
Leases – IAS 17
Under UK GAAP rent free periods on properties were spread over the period from the beginning of the contract to the first 
possible break date.
Under IFRS rent free periods have been spread over the full term of each contract. 
Foreign exchange on forward currency contracts
Under UK GAAP the Group’s forward currency contracts were held at nominal value, with the difference between nominal 
value and fair value disclosed.
Under IFRS these contracts have been stated at fair value. This has not led to a material impact to prior year balances.  CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
44
We have audited the parent Company financial statements 
of Ceres Power Holdings plc for the year ended 30 June  
2008 which comprise the Company Balance Sheet, the 
Reconciliation of Movements in Shareholders’ Funds and the 
related notes. These parent Company financial statements 
have been prepared under the accounting policies set  
out therein. We have also audited the information in  
the Remuneration Report that is described as having  
been audited.
We have reported separately on the Group financial 
statements of Ceres Power Holdings plc for the year ended  
30 June 2008.
Respective responsibilities of Directors and Auditors
The Directors’ responsibilities for preparing the Annual Report, 
the Remuneration Report and the parent Company financial 
statements in accordance with applicable law and United 
Kingdom Accounting Standards (United Kingdom Generally 
Accepted Accounting Practice) are set out in the Statement 
of Directors’ Responsibilities.
Our responsibility is to audit the parent Company financial 
statements and the part of the Remuneration Report to be 
audited in accordance with relevant legal and regulatory 
requirements and International Standards on Auditing (UK 
and Ireland). This report, including the opinion, has been 
prepared for and only for the Company’s members as a 
body in accordance with Section 235 of the Companies  
Act 1985 and for no other purpose. We do not, in giving  
this opinion, 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.
We report to you our opinion as to whether the parent 
Company financial statements give a true and fair view and 
whether the parent Company financial statements and the 
part of the Remuneration Report to be audited have been 
properly prepared in accordance with the Companies Act 
1985. We also report to you whether in our opinion the 
information given in the Directors’ Report is consistent with the 
parent Company financial statements. The information given 
in the Directors’ Report includes that specific information 
presented in the Chairman’s Statement and the Chief 
Executive’s Review that is cross referred from the review  
of business and future developments and research  
and development sections of the Directors’ Report.
In addition we report to you if, in our opinion, 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 other transactions is 
not disclosed.
We read other information contained in the Annual Report 
and consider whether it is consistent with the audited parent 
Company financial statements. The other information 
comprises the Highlights and Key Achievements, the 
Chairman’s Statement, the Chief Executive’s Review, the 
Ceres Operational Model, Combined Heat and Power, 
Growth Opportunity, Directors and Senior Management, 
Corporate Social Responsibility, Corporate Governance 
Report, the unaudited part of the Remuneration Report,  
the Directors’ Report and all the other information listed  
on the contents page. We consider the implications for our 
report if we become aware of any apparent misstatements  
or material inconsistencies with the parent Company 
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 (UK and Ireland) issued by the 
Auditing Practices Board. An audit includes examination, 
on a test basis, of evidence relevant to the amounts and 
disclosures in the parent Company financial statements  
and the part of the Remuneration Report to be audited.  
It also includes an assessment of the significant estimates 
and judgements made by the Directors in the preparation 
of the parent Company financial statements, and of  
whether the accounting policies are appropriate to the 
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 parent Company 
financial statements and the part of the Remuneration Report 
to be audited 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 parent Company 
financial statements and the part of the Remuneration  
Report to be audited.
Opinion
In our opinion:
the parent Company financial statements give a true and 
fair view, in accordance with United Kingdom Generally 
Accepted Accounting Practice, of the state of the 
Company’s affairs as at 30 June 2008;
the parent Company financial statements and the part  
of the Remuneration Report to be audited have been 
properly prepared in accordance with the Companies Act 
1985; and
the information given in the Directors’ Report is consistent 
with the parent Company financial statements.
PricewaterhouseCoopers LLP
Chartered Accountants and Registered Auditors
Cambridge
24 October 2008
Notes:
• The maintenance and integrity of the Ceres Power Holdings plc website is 
the responsibility of the Directors; the work carried out by the auditors does 
not involve consideration of these matters and, accordingly, the auditors 
accept no responsibility for any changes that may have occurred to the 
financial statements since they were initially presented on the website.
• Legislation in the United Kingdom governing the preparation and 
dissemination of financial statements may differ from legislation in  
other jurisdictions.
>
>
>
Independent Auditors’ Report to the 
Members of Ceres Power Holdings plc 45
CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
       2008 2007 
      Note £’000 £’000
Fixed assets
Investments      4 3,828 3,345
Current assets
Debtors: amounts falling due after more than one year     5 8,391 5,784
Debtors: amounts falling due within one year      5 60 13
Short-term investments       – 9,500
Cash at bank and in hand       27,582 987
       36,033 16,284
Creditors: amounts falling due within one year      6 (97) (74)
Net current assets       35,936 16,210
Total assets less current liabilities       39,764 19,555
Creditors: amounts falling due after more than one year      7 (32) (432)
Net assets        39,732 19,123
Capital and reserves
Called up share capital      9 3,337 2,981
Share premium account      10 35,465 15,594
Profit and loss account      10 930 548
Total shareholders’ funds       39,732 19,123
The financial statements on pages 45 to 50 were approved by the Board of Directors on 24 October 2008 and were signed on 
its behalf by:
Dr Brian Count Dr Peter Bance
Chairman Chief Executive Officer
Company Balance Sheet
as at 30 June 2008 CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
46
       2008 2007 
       £’000 £’000
Loss for the financial year       (223) (391)
Proceeds of issue of ordinary share capital       20,301 513
Share issue costs       (81) –
Share-based remuneration for services       7 –
Share-based payment charge       605 1,170
Net change in shareholders’ funds       20,609 1,292
Opening shareholders’ funds       19,123 17 ,831
Closing shareholders’ funds       39,732 19,123
Reconciliation of Movements in 
Shareholders’ Funds
as at 30 June 2008 47
CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
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 1985 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 money market funds and bank deposits with an original maturity of less than three months. 
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 fair value of employee share options is calculated using a Black-Scholes 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’, in the prior year, 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 £483,000 (2007: £841,000) 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 230 of the Companies Act 1985 and has not 
presented its profit and loss account. The Company’s result for the year was a loss of £223,000 (2007: £391,000). 
Notes to the Company  
Financial Statements
for the year ended 30 June 2008 CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
48
3. Employees and Directors
The average monthly number of persons (including Executive Directors) employed by the Company during the year was:
       2008 2007 
       Number Number
By activity:
Administration       2 2
       2 2
       2008 2007 
       £’000 £’000
Staff costs (for the above persons):
Wages and salaries       542 361
Social security costs        21 36
Other pension costs       42 36
Share-based payments       122 329
       727 762
For further information on Directors’ emoluments, see the Remuneration Report on pages 19 to 21.
4. Fixed asset investments
In subsidiary companies:
       2008 2007 
       £’000 £’000
Cost and net book value
At 1 July        3,345 2,504
Capital contributions arising from FRS 20 share-based payment charge      483 841
At 30 June        3,828 3,345
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. 
5. Debtors
       2008 2007 
       £’000 £’000
Amounts falling due within one year:
Other debtors       3 –
Prepayments and accrued income       57 13
       60 13
Amounts falling due after more than one year:
Amounts owed by Group undertakings       8,391 5,784
       8,451 5,797
Notes to the Company  
Financial Statements
for the year ended 30 June 2008 continued 49
CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
5. Debtors continued
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 year. Amounts owed 
by Ceres Power Limited to the Company (£8,141,000) are subordinated to all other creditors of Ceres Power Limited. 
6. Creditors: amounts falling due within one year
       2008 2007 
       £’000 £’000
Trade creditors       1 19
Other taxation and social security        12 12
Other creditors       – 2
Accruals and deferred income       84 41
       97 74
7. Creditors: amounts falling due after more than one year
       2008 2007 
       £’000 £’000
Amounts owed to subsidiary undertakings       32 432
The amounts owed to subsidiary undertakings are unpaid inter-company charges which are expected to be paid within one 
to two years. No interest is 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       (178) (144)
Losses carried forward       (373) (381)
Other short-term timing differences       (227) –
       (778) (525)
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.
9. Called up share capital
 2008 2007
   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   66,740,675 3,337 59,618,027 2,981
Details of shares issued in the period are provided in note 16 to the Group financial statements. Details of share options are 
disclosed in note 17 to the Group financial statements. CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
50
10. Reserves
       Share Profit 
       premium and loss 
       account account 
       £’000 £’000
At 1 July 2007       15,594 548
Premium on shares issued:
– Exercise of share options       229 –
– Exercise of warrant rights       35 –
– Share-based remuneration for services       7 –
– New shares issued on cash placing       19,681 –
Share issue expenses       (81) –
Loss for the financial year       – (223)
Share-based payments charge       – 605
At 30 June 2008       35,465 930
Notes to the Company  
Financial Statements
for the year ended 30 June 2008 continued 51
CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
Notes CERES POWER HOLDINGS PLC ANNUAL REPORT 2008
52
Notes CERES	 POWER	 HOLDINGS	 PLC	 ANNUAL	 REPORT	 2008 CERES	 POWER	 HOLDINGS	 PLC	 ANNUAL	 REPORT	 2008
Ceres Power is developing 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 products to global mass markets. 
 
Ceres	 Power’s	 core	 	 Fuel	 Cell	 Module	 is	 an	 ‘electro-chemical	 engine’	 which	 generates	 electricity	 and	 heat	 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°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	 can	 	 be	 used	 as	 an	 alternative	 	 to	 batteries	 and	 generators	 for	 international	 on-grid	 and	 off-grid	 applications.	 Ceres	 Power	 is	 partnering	 with	 major	 corporations	 with	 well-established	 	 direct	 channels	 to	 millions	 of	 customers.	 Ceres	 Power	 has	 secured	 a	 volume	 supply	 and	 distribution	 agreement	 with	 British	 Gas	 in	 the	 UK	 for	 CHP	 products	 in	 residential	 homes.	 The	 Group	 is	 also	 working	 with	 EDF	 Energy	 Networks	 	 to	 address	 the	 market	 	 for	 back-up	 power	 	 supply	 products	 and	 intends	 to	 establish	 further	 agreements	 internationally.
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 Partners Mass	 markets
‘Ceres Power’ and ‘Powered by Ceres’ are registered trademarks  
belonging to the Group.
Directors and Advisors
for the year ended 30 June 2008
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
 
Directors
Dr Brian Count (Non-Executive Chairman)
1
Dr Peter Bance (Chief Executive Officer)
1,2
Dr Andrew Baker (Operations Director)
1,2
Rex Vevers (Finance Director)
1,2
Bob Flint (Commercial Director)
2
Prof Nigel Brandon (Chief Scientist)
2
Sir David Brown (Non-Executive Director)
1
Alan Wood (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
Carmelite
50 Victoria Embankment
Blackfriars
London
EC4Y 0DX
Registered 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 holdings plc
www.cerespower.com
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
Powered by Ceres
Ceres Power Holdings plc Annual Report 2008
Ceres Power Holdings plc Annual Report 2008