Annual Report & Accounts 2025

Ceres Annual Report 2025

Read more on our website

www.ceres.tech

Strategic highlights for 2025

• China – Weichai signs manufacturing licence agreement. Weichai intends to produce cells

and stacks for the stationary power markets, targeting power for AI data centres, commercial

buildings and industrial applications.

• Taiwan – Delta invests in land on which to build its solid oxide fuel and electrolysis

cell factory. The purchase of land and factory facilities for approximately NT$6.95 billion

(£170 million), expected to be partly focused on the large-scale manufacturing of hydrogen

energy solutions for data centre power, microgrid and other energy infrastructure applications.

• South Korea – Doosan starts factory production of solid oxide fuel cells and stacks.

Ceres-designed fuel cells are now in production, with first royalties generated.

• Japan – Ceres’ partner DENSO and JERA began testing Japan’s first announced solid oxide

electrolysis demonstrator for hydrogen production at a JERA thermal power station, leading

to government funding valued at 35 billion yen (£165 million).

• India – Shell megawatt-scale electrolysis system produces hydrogen. Exceeding performance

expectations, this milestone underlines the maturity of Ceres’ solid oxide electrolyser technology,

supported by Shell’s installation, integration and safety assurance expertise.

• Business transformation plan implemented. Ceres transitions to a new structure as the

business begins to focus on accelerating its commercial opportunities. Team structures have been

aligned to support the growth of new business, delivering anticipated operating cost savings of

20% in 2026.

• The launch of Ceres Endura™, a single technology platform for both power and

electrolysis applications.

Visit our website

Commercialising world-

leading clean technology

with purpose and pace

23 140.0

25 83.3

Cash, cash equivalents and

short-term investments

£83.3m

Sustainability credentials

24 102.5

Financial highlights

Revenue

£32.6m

23 22.3

25 32.6

24 51.9

Sustainability

Our ambition is to build a sustainable business

and make a positive impact on our people,

communities, partners and planet.

Read more on page 16

Strategic report

01 Clean energy starts with...

02 Strategic roadmap

03 The Ceres investment case

04 At a glance

06 Chair’s statement

08 Chief Executive’s statement

13 Business model

14 Strategic pillars

15 Key performance indicators

16 Technology

18 Product

20 Partners

24 Sustainability

33 Section 172(1) statement

34 Stakeholder engagement

36 Chief Financial Officer’s statement

40 Principal risks and uncertainties

45 Viability statement

Corporate governance

49 Chair’s introduction to governance

50 Board of Directors

52 Executive Committee

54 Corporate governance report

62 Audit and Risk Committee report

67 Remuneration and Nomination Committee report

72 Directors’ Remuneration Report

91 ESG Committee report

94 Directors’ report

Financial statements

99 Independent auditor’s report

106 Consolidated statement of profit and

loss and other comprehensive income

107 Consolidated statement of financial position

108 Consolidated cash flow statement

109 Consolidated statement of changes in equity

110 Notes to the consolidated financial statements

136 Company balance sheet

137 Company statement of changes in equity

138 Notes to the Company financial statements

142 Directors and advisers

143 Glossary

Clean energy starts with…

Contents

Strategic report Corporate governance Financial statements

01Ceres Annual Report 2025

Strategic roadmap

A clear purpose and focused

strategy to enable industrial

decarbonisation globally

Purpose Positioning

Clean energy for

a clean world.

Our ultimate

purpose is to help

sustain a clean

planet by ensuring

there is clean

energy everywhere

in the world.

We pioneer

advanced

technologies and

embed them in our

partners’ companies

to meet their

strategic imperative

to transform to

clean energy.

Goal

Secure new licence

partners, targeting

a leading market

share of the global

solid oxide industry.

Read more on page 34

Strategic report

02 Ceres Annual Report 2025

Leading solid oxide platform technology Strong commercial value proposition Robust financial discipline

The Ceres investment case

A compelling equity story

Over the last two decades we have created best-in-class

lower temperature solid oxide technology in a single,

reversible platform for both power generation and green

hydrogen production. In power mode, our solid oxide

fuel cells (“SOFCs”) produce electricity at an efficiency

of 65%, with over 90% overall efficiency when heat is

captured, making it a technology of choice for the data

centre, commercial and distributed power sectors.

In electrolysis mode, our cells produce hydrogen at

37kW/kg, the most efficient rate currently available,

providing the market with one of the few viable ways

to decarbonise hard-to-abate industrial sectors.

We are a world leader in solid oxide technology.

Our intellectual property, manufacturing knowledge and

trade secrets are well protected, allowing us to pursue

an asset-light licensing model.

Global manufacturing partners can rapidly access our

next-generation decarbonisation technology as well

as the know-how to establish their manufacturing

infrastructure. This accelerates new commercial

opportunities in the dynamic new power and hydrogen

markets at scale and pace.

Our commercial activities are underpinned by the

ongoing prudent financial management of the business.

In 2025 we implemented a business transformation plan

to drive a new phase of commercial growth, optimising

the costs and structure of the business. This underpins

our licensing model.

The generation of our first royalties in 2025 validates

this model and, with a more streamlined business, we

remain well financed as we progress along the path

to profitability.

Read more about our technology on page 16

Read more about our commercial value proposition on page 13

Read more about our financial position on page 37

Our investment case is built on three pillars to create long-term value for shareholders

Strategic report Corporate governance Financial statements

03Ceres Annual Report 2025

At a glance

Delivering commercial traction through

our global partners

Our partner portfolio forms the foundation to our business and

in 2025 we implemented a business transformation plan to focus

more on building commercial traction. One partner started to

produce and sell Ceres-based products for their end customers

in 2025, generating royalty revenues for us for the first time.

DENSO

StackCell

High-efficiency energy

conversion at low cost

POWER

HYDROGEN

Scalability pathway – power generation and hydrogen production

Over 20 years of development has enabled

us to build an intellectual property portfolio

of over 150 patent families in solid oxide

power and electrolysis, enabling us to

establish our asset-light licensing model.

Strategic report

04 Ceres Annual Report 2025

Establishing the industry standard for solid oxide

Our platform technology addresses significant global markets

Our technology is meeting the need for cleaner power now while positioning for a

hydrogen future.

AI and

data centres

Green

ammonia

Commercial

power

Refineries

Industrial

power

Green steel

Shipping eFuels

POWER HYDROGEN

Strategic report Corporate governance Financial statements

05Ceres Annual Report 2025

Chair’s statement

As our end markets continue to evolve

and with a new operational structure

to drive our next phase of growth,

I remain confident that our solid oxide

technology will play a central role in

the energy transition markets.”

Warren Finegold

Chair of the Board

A new era for Ceres

Ceres Annual Report 202506

Strategic report

Dear Shareholders,

Since my last report to you we have seen continued growth in

the end markets for our technology, particularly in commercial

and industrial power. Over the year energy demand from these

sectors has accelerated as societal needs evolve and, as we

continue to move away from fossil fuels, the electrification

of energy systems is gathering pace. In 2024 clean power

surpassed 40% of global electricity generation for the first

time, driven by record growth in renewables, especially solar

This momentum has increased further with the rise of AI

enabled data centres, which add significant demand for

computational processing, data storage and cooling. McKinsey

& Company highlights an investment super-cycle in data centre

infrastructure over the coming years

. Its research suggests that

by 2030, data centres are projected to require a staggering

$6.7 trillion of capital investment worldwide to keep pace with

the demand for computational and processing power. The

lion’s share of that is attributable to data centres equipped to

handle AI processing loads, projected to require $5.2 trillion in

capital expenditure. These industrial-scale facilities are placing

unprecedented stress on electrical grids worldwide and driving

demand for next-generation power solutions, such as solid

oxide fuel cells.

The evolution of power markets brings new opportunities

to Ceres as the data centre industry seeks off-grid solutions.

Meeting high-power capacity demands requires energy systems

that can overcome time-to-power bottlenecks and comply with

strict permitting and emissions regulations. Our Chief Executive

Officer, Phil Caldwell, will elaborate on how these changes play

to the strengths of our technology.

Strong commercial progress

Even though we were not able to beat last year’s record

revenues, Ceres continues to make important commercial

progress. Production at the world’s first commercial scale

factory for the manufacture of Ceres’ solid oxide fuel cells

in Jeollabuk-do, South Korea, began in July 2025, with the

first product sales achieved before year end. The generation

of royalty revenues from these sales marks a key milestone

for our business.

I believe this proactive, forward-looking approach will serve

the business well. Filip Smeets, our Chief Commercial Officer,

will provide more on our commercial strategy as we focus on

increasing our manufacturing partner relationships. Caroline

Hargrove, Chief Technology Officer, explains how we continue

to invest in programmes to extend the lifetime and durability

of our cells and stacks and reduce manufacturing costs and

complexity for our partners.

Governance changes during the period

In February 2025, Uwe Glock stepped down from the Board

following Bosch’s decision to discontinue solid oxide activities

and divest its stake in Ceres. The disposal of its 17.4% holding

was completed in October 2025. We thank Uwe for his

support and valuable contributions as a Director. In view of her

increased operating responsibilities at Equinor, where she has

been promoted to Senior Vice President PWR Global Offshore

Wind, Trine Borum Bojsen has decided not to stand for re-

election at the AGM. We congratulate Trine on her promotion

and thank her for her many important contributions to Ceres

over the last four years. Trine’s role as Employee Engagement

Director has been assumed by Julia King.

On the Executive Committee, Chief Operating Officer Mark

Garrett retired after five years and was succeeded by Steve

Hill, who was promoted from the existing Ceres management

team. He brings extensive manufacturing, engineering and

technology transfer experience.

Thank you

The business transformation plan has brought change and

new ways of working to Ceres. On behalf of the Board,

I thank the entire management team and all employees for

their professionalism and focus during this period, minimising

disruption as we prepare for the next phase of growth.

We approach 2026 with a renewed commercial mindset and

I look forward to reporting further progress for our business.

Warren Finegold

Chair of the Board

25 March 2026

1. Ember Global Electricity Review 2025, April 2025.

2. McKinsey & Company, April 2025: The cost of compute: a $7 trillion race to

scale data centers.

In line with our ambition to sign at least one new manufacturing

partnership annually, in November 2025 we announced a

new manufacturing licence agreement with Weichai, one

of the world’s largest engine manufacturers and our largest

shareholder. Weichai plans to establish a factory in China to

produce cells and stacks for stationary power markets, giving

Ceres’ technology a presence in one of the world’s largest

power markets.

On the electrolysis side of our business, in May 2025 we

announced the first megawatt-scale hydrogen production from

our electrolysis cells at Shell’s demonstrator unit in Bangalore,

India. This illustrates how Ceres’ high-efficiency technology

could be scaled to meet the needs of industry and deliver

a route to economically viable hydrogen for green steel,

ammonia and synthetic fuels.

Other Ceres electrolysis partners have also been busy during

the year as the industry regroups after a period of uncertainty.

In September 2025, DENSO announced that together with

Japanese utility JERA, it has begun Japan’s first demonstration

of SOEC hydrogen production at a JERA thermal power station.

Setting ourselves up for commercial success

With a rapidly evolving market and strong commercial

momentum, we see attractive opportunities to position solid

oxide as the technology of choice for both fuel cells and green

hydrogen production. Our research and development ("R&D")

over the past 24 years has created the most advanced solid

oxide technology available, culminating in a versatile, reversible

platform for power or electrolysis applications. We felt that

the time was right to increase further the focus of the business

on optimising commercial success.

In September 2025, we launched a business transformation

plan to transition towards a more commercial focus, prioritising

new manufacturing licence partner wins. This involved

restructuring internal teams into cross-functional units to

support business development and commercial activities better,

enabling more effective decision making. This new structure

also reduced operating costs by 20%, ensuring we remain well

capitalised as we progress towards profitability.

Strategic report Corporate governance Financial statements

07Ceres Annual Report 2025

Focusing on

commercial delivery

Chief Executive’s statement

In 2025 our first partner achieved scaled production,

unlocking Ceres’ first royalties, a significant milestone

for the business. We sharpened our commercial focus

to address rising demands for power generation

and advanced our solid oxide technology towards

becoming the industry standard.”

Phil Caldwell

Chief Executive Officer

Ceres Annual Report 202508

Strategic report

In comparison, SOFCs can offer the highest rates of energy

efficiency coupled with virtually zero particulate emissions

and high reliability, making them a natural choice for these

markets. In addition to these attractive features, SOFCs can

now offer a compelling advantage that other energy systems

cannot – rapid time-to-power. Wait times for higher power

systems are now significant: up to 15 years for upgraded grid

connections; exceeding five years for gas turbines; and at least

a decade for small modular nuclear power systems. The more

rapid availability of SOFC systems is now becoming a key

differentiating factor in the data centre power market (see our

Technology section on page 16 for additional details).

Our analysis, based on BloombergNEF estimates, suggests that

the market for SOFC power could be around 22GW by 2030,

representing a substantial market for our technology. This

represents a substantial market for our technology, with Ceres’

ability to meet that demand delivered through the scale-up of

our manufacturing partners.

integration, low local emissions and 24/7 reliability, with systems

that can scale quickly.

Ceres’ solid oxide systems meet these needs well. As data

centre operators expand capacity globally, including major

investments announced in the UK by Microsoft, Google,

OpenAI/NScale and Blackstone, the near-term commercial

opportunity for high-efficiency SOFC systems continues to

grow.

Importantly, the same fundamentals underpin opportunities in

commercial buildings, industrial campuses, microgrids and other

distributed power markets, strengthening our confidence in the

scale of demand our partners can serve.

This growth dynamic presents distinct and significant near-term

opportunities for Ceres SOFCs given the many advantages

over conventional power generation systems, such as gas

turbines, diesel reciprocating engines and renewable energy.

Highlights

• Continued commercial progress with new

manufacturing licence signed with Weichai.

• Ceres generates royalties for the first time with the

Doosan factory starting production.

• Renewed focus on SOFC as power markets open up.

• SOEC partner DENSO demonstrates Japan’s first

SOEC hydrogen production at a JERA thermal

power station.

• Megawatt-scale demonstration electrolyser starts

producing green hydrogen at Shell’s Technology

Centre in Bangalore, India.

Introduction

I am pleased to report on another year of progress as we

continue to deliver on our ambitions to establish our solid oxide

technology as the industry standard for both power generation

and hydrogen production. The year had its challenges as Bosch

withdrew from its SOFC activities following a strategic shift and

there was a slowdown in the demand for hydrogen solutions.

Nonetheless, we intensified our focus on commercial activities

and made meaningful progress in positioning Ceres at the

heart of emerging markets for power solutions for commercial,

industrial and data centre markets. Our focus on disciplined

execution, clarity of purpose and partner-centric ways of

working is now creating tangible commercial momentum.

Power markets are undergoing structural change

Around the world, electrification, digitalisation and AI are

transforming power demand. Nowhere is this clearer than

in AI enabled data centres, which have become one of the

fastest growing and most energy intensive sectors of the

global economy. Structural grid constraints, long lead times

for conventional generation and rising environmental pressures

are driving operators to look for alternative, high-efficiency

power technologies.

Customers tell us consistently that they need faster time-

to-power, high electrical efficiency and meaningful heat

Strategic report Corporate governance Financial statements

09Ceres Annual Report 2025

A clear step forward in commercial delivery

For almost 25 years, Ceres has invested in building world-

leading solid oxide technology. In 2025, that investment

translated into some of the most important milestones in

our history. We saw our technology move from development

to production and our commercial strategy sharpen around

the markets that offer the greatest near-term opportunity.

We achieved a significant milestone in July 2025, when Doosan

commenced mass market manufacture of fuel cell stacks using

Ceres’ technology at its first of a kind 50MW facility in South

Korea. This represents a validation of both our technology

leadership and our asset-light IP licensing model. These early

shipments generated our first royalty revenues, marking the

beginning of a scalable, high-margin future income stream.

Momentum continued across our partner ecosystem.

Delta Electronics advanced at pace towards establishing

large-scale manufacturing in Taiwan, targeting AI enabled

data centres, commercial buildings, industrial facilities and

microgrid applications.

During the year Delta acquired land and factory facilities in

Taiwan for approximately £170 million, expected to be partly

focused on the large-scale manufacturing of hydrogen energy

solutions, based on Ceres’ solid oxide technology. Delta

continues to move at pace and with clear commitment to initial

pilot production based on our technology by the end of 2026.

In November 2025 we announced that we had signed a new

manufacturing licence agreement for the production of our

proprietary SOFC technology with Weichai Power, a global

original equipment manufacturer and power systems developer,

headquartered in Shandong, China. Weichai intends to establish

a manufacturing facility to produce cells and stacks for the

stationary power markets supported by key components

supplied by Ceres, targeting power for AI data centres,

commercial buildings and industrial applications.

This agreement extends our existing relationship with Weichai,

which we anticipate will open up a multi-billion-dollar market

opportunity and boosts our ambition to establish Ceres as the

global industry standard for solid oxide.

Chief Executive’s statement continued

Hydrogen: progress with discipline and purpose

While industry-wide progress on large-scale electrolysis

projects has been slower than anticipated, our own SOEC

programme continued to advance in 2025.

At Shell’s Technology Centre in Bangalore, our first megawatt-

scale demonstrator produced hydrogen at industry-leading

efficiency, a major proof point of the cost and performance

advantages of high-temperature electrolysis. With a class-

leading electrolyser module efficiency of 37kWh/kg of

hydrogen from a 1MW plant, this equates to potential

production capacity of around 600kg of hydrogen per day.

This milestone marks an important step, demonstrating

the maturity of Ceres’ solid oxide electrolyser technology,

supported by Shell’s installation, integration and safety

assurance expertise.

After completing its technology transfer programme during

2025, SOEC manufacturing partner DENSO announced in

September that it had begun Japan’s first demonstration of

SOEC hydrogen production at a JERA (Japan’s largest power

generation company) thermal power station. This aims to

achieve hydrogen production with the world’s highest level

electrolysis efficiency by applying DENSO’s heat-management

technology. The project, which is due to run until 2032,

is valued at 46 billion yen (c.£220 million), with significant

government subsidies from Japan’s New Energy and Industrial

Technology Development Organisation (NEDO) of up to 35

billion yen (c.£165 million).

In India, Thermax continued its rapid progress, following the

launch of its HydroGenX Hub in Pune, our partner broke

ground earlier this year on its SOEC pilot plant, a very clear

commitment to deploying Ceres’ technology in one of the

world’s most strategically important markets for clean energy

in industrial applications.

These milestones reinforce the long-term relevance of our

technology as we expect industrial decarbonisation to gather

pace towards the end of this decade.

In addition to the significant progress being achieved with

current partners, we have also been working hard to ensure

that our technology remains an attractive proposition for future

manufacturing partners. Our latest design is a stack that can

generate power or produce hydrogen from the same core cell

and stack platform and enables partners to build both fuel cell

There has been accelerated

demand for power in the rapidly

maturing commercial and industrial

sectors, led by the booming data

centre market, creating new and

attractive opportunities for our

business. We also continue to

secure new licence agreements

with global manufacturers to drive

future business and to position

our technology as the industry

standard for solid oxide.”

Phil Caldwell

Chief Executive Officer

Strategic report

10 Ceres Annual Report 2025

Global market opportunity for solid oxide fuel

cell power is forecast at 22GW by 2030

Market opportunity

drivers by end use case

22GW

Reference: House analysis based on BNEF New Energy Outlook Data, 2025

Shipping

49%

Data

Centre

28%

Industry

14%

Commercial

Building

Global electrolyser capacity estimated to be

1,766GW in 2040

Market opportunity

drivers by end use case

1,766GW

Reference: BNEF New Energy Outlook 2024.

Ammonia production includes shipping, which is ammonia and methanol.

SAF procurement agreements for international airlines.

Sector proportions are based upon hydrogen consumption in 2040.

15%

Steel

56%

Other

industries

17%

Ammonia

12%

eFuels

and electrolysis stacks using the same manufacturing facility,

allowing them to leverage their investment in our technology

to access the power markets now and electrolysis markets in

the future. I believe that this is a key differentiator for us and

our technology, positioning us as the global leader in solid

oxide energy solutions.

Market dynamics create new opportunities

In parallel to the AI enabled data centre market, other attractive

power applications continue to mature for Ceres through our

partners. These include distributed power provision through

microgrids; combined heat, power and cooling applications

for buildings; and auxiliary power systems for marine vessels.

These nascent markets continue to be supported by favourable

tax credit and other incentives to adopt next-generation clean

technologies, such as fuel cells. Key regions where these are

available include the US (30% Investment Tax Credit under

Section 48E of the One Big Beautiful Bill for fuel cell adoption),

South Korea (the Green New Deal aims to achieve fuel cell

deployment of 15GW by 2040, supported by tax and other

incentives) and Japan (Green Transformation policies supporting

the hydrogen economy, including the development of large-

scale stationary fuel cell power stations).

While progress in our power business accelerated in 2025,

securing final investment decisions for hydrogen electrolysis

projects has undoubtedly been a challenge for the industry,

exacerbated by macroeconomic headwinds. However,

as we refocus our commercial activities on the near-term

opportunities, we remain confident that the structural impetus

to decarbonise industrial processes will continue to drive the

market over the longer term and that this will stimulate the

industry to adopt more advanced clean technologies such

as solid oxide.

Executing our business transformation plan

During 2025 we defined new strategic priorities that underpin

the sharper commercial focus we have brought to the business

(see page 20 for more details). To ensure we are set up for

success, we are optimising the business and have initiated a

business transformation plan, which started in September 2025.

This will realign our resources to new market opportunities

by the end of 2026 and consolidate our platform for

further growth.

The objectives of this programme are to simplify the

organisation, embed accountable ways of working and align

resources with the commercial markets that matter most.

By the end of 2026, we expect to have:

• Realigned Ceres into focused, delivery driven teams;

• Strengthened partner-centric values and behaviours across

the organisation;

• Reduced operating costs by around 20% compared to the

year ending 31 December 2025;

• Supported partners on their path to manufacturing scale-up

and product launch;

• Enhanced our capability to secure new licensing agreements; and

• Commercially launched our best-in-class, dual-purpose

stack platform serving both power and hydrogen markets,

consolidating development onto a unified technology

platform ready for scale.

Now is the right time for us to take these actions to optimise

the business and I firmly believe that successful completion

will ensure that we operate with the scale, pace, discipline and

clarity required for commercial success.

Strategic report Corporate governance Financial statements

11Ceres Annual Report 2025

Chief Executive’s statement continued

Outlook

The final words in my review of the year are dedicated to the

people at Ceres. Without doubt, 2025 started as a challenging

year for us following the Bosch announcement in February

2025 and a wider slowdown in hydrogen adoption. I am,

however, very pleased with the manner in which we responded

as a business, demonstrating purpose and professionalism

as we refocused on new and evolving market dynamics

represented by the growth in power. I would like to thank

everyone at Ceres for the ongoing commitment and dedication

they showed over the past year. Not only have our teams

come together to overcome the challenges of a turbulent year

to deliver key milestones for the business, but they have also

embraced the changes we are putting in place to drive our

next chapter of growth.

Although we are conscious of the uncertainties arising from

the war in Iran and its impact on global energy markets, we

start 2026 with strong operational momentum. We have

generated our first royalty revenues and are seeing growing

demand across commercial and industrial power markets

- particularly in the rapidly expanding data centre sector.

I am confident that we remain

well positioned to capitalise

on the growth in the resurgent

power markets of today

as well as the substantial

hydrogen electrolysis markets

of tomorrow, where our

technology provides one of the

few routes to decarbonising

heavy industry.”

Phil Caldwell

Chief Executive Officer

Solid oxide technology is increasingly viewed as a high-

efficiency, low-emission and fast-to-deploy solution for resilient

power. We remain well positioned for electrolysis for green

hydrogen as we anticipate industrial demand will accelerate

as global decarbonisation policies mature towards the end

of this decade.

Our sharper commercial focus and strategic pillars aligned

during the year with the resurgence of demand in the power

markets, I am confident that we are well positioned to capitalise

on the growth in the power markets today and the hydrogen

electrolysis markets of tomorrow.

As we enter our 25th year, Ceres is firmly positioned for a

new era: establishing our technology platform as the industry

standard for solid oxide, embedding partner-centric values

throughout the organisation and maintaining absolute focus

on commercial execution. Together with our partners, we are

moving to market with real pace and unlocking the next phase

of growth for Ceres.

Phil Caldwell

Chief Executive Officer

25 March 2026

Strategic report

12 Ceres Annual Report 2025

How we create value

How our business model works

We have developed next-generation solid oxide technology

IP, which is protected by a portfolio of patents, know-how and

trade secrets. This enables us to license our cell and stack IP to

manufacturing partners for mass production. Additionally, we

license system IP where stacks are integrated into power or

electrolysis systems, which are sold to end markets.

We earn revenue through up-front licence fees for access

to our IP; engineering services; technology hardware sales

to support partners scaling up factories for mass production;

and royalties when commercial scale is achieved. These

royalty payments are based on kW of product sold into the

power or electrolysis end markets, providing high-margin,

recurring revenue.

The Ceres business model is based on our leading solid oxide technology platform, which can be used to generate power

efficiently from a range of different fuels and to produce green hydrogen when coupled with a zero-carbon source of energy.

This technology and its manufacturing process are highly protected by patents, trade secrets and know-how, enabling us to

operate an asset-light licensing business model. By working in partnership with licensees who have the scale and expertise

to mass manufacture solid oxide products for their various end markets, we can together accelerate the decarbonisation

of a number of key industries.

Our business model

Business model

Read more on our website

www.ceres.tech

Cell and stack IP

Manufacturing

partner

OEM

customer

Sells consumer

products

Ceres licenses core

technology to partner

Ceres licenses system

technology to partner

Licence fees

System IP

Licence and engineering

Stack supply to OEMs

Stack royalties £/kW sold System royalties £/kW sold

Partners can develop their own systems as products, or they can

license system designs from Ceres.

For every stack or system sold, Ceres receives a royalty payment.

Highly competitive technology

Our unique, inherently reversible and fuel

flexible solid oxide technology reduces cost

while maximising efficiency, resulting in highly

competitive total cost of ownership for

the end user.

Access to untapped markets

As the global energy system evolves,

our cutting-edge technology supports

greater electrification of our energy systems

and generates green hydrogen at high

efficiencies, supporting the decarbonisation of

incumbent industries that are dependent on

fossil fuels today.

Accelerated market entry

Licensees can adopt our technology quickly

and enter new markets for hydrogen

without lengthy and expensive research and

development times, thereby capitalising on

more than 24 years of experience in cell and

stack development to continuously advance

solid oxide technology.

Leveraging world-leading R&D resources

Licensees don’t need to spend resources on

acquiring technology capabilities, but can

instead focus on their own core business

strengths. By using commonly found materials,

our technology can be mass produced at low

cost with a limited carbon footprint.

How we create value for our partners

Strategic report Corporate governance Financial statements

13Ceres Annual Report 2025

Strategic pillars

Our strategic priorities

Sign new

manufacturing

licensees

Establish manufacturing facilities

globally to cement our

technology as the industry

standard for solid oxide.

Accelerate

partners to

market

Support our partners towards

successful product launch,

thereby providing ongoing,

sustainable royalties to Ceres.

Single stack

technology

platform

Launch and continuously

extend lifetime and lower costs

of our dual-purpose stack

platform.

Links to KPIs

Revenue

Gross margin

Cash outflow (at 31 December)

Stack manufacturing partners

Accelerate partners to market

Single stack technology platform

Links to risks

Viability of technology

Operational capability

IP and regulation

Long-term value proposition

Commercial traction/partner

performance

Partner scale-up/supply chain

Cyber security

Geopolitical

People and capability

Future funding and liquidity

Our three strategic pillars define our priorities as we enter an exciting new phase in our growth,

helping us to establish our technology as the standard for solid oxide. These act as our guiding

lights for the commercial direction of the business.

Links to KPIs

Links to risks

Links to KPIs

Links to risks

Links to KPIs

Links to risks

Strategic report

14 Ceres Annual Report 2025

Key performance indicators

Our key performance indicators

Links to strategy

Sign new manufacturing licences

Accelerate partners to market

Single stack technology platform

Revenue

£32.6m

Description

Revenue of £32.6 million in 2025, compared with £51.9 million in the prior

year. The 37% reduction can be mostly attributed to revenues generated in

2024 from the new licence partners as upfront technology transfers were conducted.

Total stack manufacturing partners

2025 performance

Manufacturing Licence Agreement signed with Weichai in November 2025,

bringing a total of four under licence.

Description

Announced stack manufacturing partners under licence.

Accelerate partners to market

2025 performance

In July 2025 Ceres and Doosan announced that mass market production

of fuel cell stacks using our solid oxide technology had commenced. Delta

Electronics anticipates having its SOFC factory up and running by the end of

2026.

Description

We aim to ensure that our manufacturing partners start mass production as

planned.

Single stack technology platform

2025 performance

Our dual-purpose stack platform gives our technology a clear and

differentiated identity and a compelling performance.

Description

A stack that can generate power or produce hydrogen from the same core

cells, allowing partners to leverage their investment in our technology to

access the power markets now and electrolysis markets in the future.

Gross margin

70%

Description

Gross margin of 70% compared to prior year margin of 77%. These margins

remain much higher than industry norms due to the licensing nature of our

business model.

Cash outflow (at 31 December)

£(19.2)m

Description

Cash outflow relates to the movement in cash and investments. The

controlled year-on-year reduction in outflow demonstrates our continued cash

management discipline.

Links to strategy:

1 32

Links to strategy:

1 32

Links to strategy:

1 32

Links to strategy:

1 32

Links to strategy:

1 32

Links to strategy:

1 32

Financial KPIs

Non-financial KPIs

23 22.3

25 32.6

24 51.9

23 61

25 70

24 77

(42.4) 23

(19.2) 25

(37.5) 24

Strategic report Corporate governance Financial statements

15Ceres Annual Report 2025

Technology

Clean energy starts with

Technology

Ceres Annual Report 202516

Strategic report

What key technology milestones have been

achieved in 2025?

This year, we made significant progress in our ability

to understand and model the mechanisms for lifetime

degradation and durability in our cells. This is important as

it enables us to target our R&D efforts on improvements

that are likely to yield greatest impact. It also helps us

with optimising our control strategies to improve the

performance of our stacks through life.

We’ve also made good progress towards optimising

some of our ceramic layers, leading to the reduction in the

complexity of some of our manufacturing processes. These

should help us lower the capital expenditure and operating

expenses of some manufacturing processes, which we can

pass on to our partners.

Ceres has undergone a business transformation

plan, so what does this mean for the ability to

continually innovate the Company’s technology?

Our ability to innovate remains central to our business

model as a licensing company. Over the years we

have made great strides, taking us to the limit of the

electrochemical performance of our cells and stacks.

However, we are not resting there, as staying at the

forefront of technology is a key differentiator for us.

Our work on the lifetime, degradation characteristics and

durability of our cells has increased our understanding

of the cell-level electrochemistry. This allows us to be

more targeted with our R&D resources and to continue to

innovate where the impact is highest. The improvements

we make here can support the efforts of our partners in

bringing the technology to market and help define how

they support their customers over the longer term.

Power markets have been developing rapidly, so

what makes Ceres SOFC such a compelling solution?

There are many reasons why SOFCs are a great fit for

data centres. Currently the most pressing issue facing this

market is time-to-power: the time it takes to implement

the high-performance systems needed to power these

energy-hungry installations. Current power units, such as

gas turbines

or small modular reactors, have order lead

times of five to ten years from today

, with high voltage

grid upgrades not anticipated in many regions until the

mid-2030s

. SOFCs are available from our partners now

as factory production builds during 2026 and beyond.

Permitting and emissions are another pressing issue,

with power sources increasingly located next to the

data centres, often close to population areas. Current

technologies can produce harmful by-products such as

SOx, NOx and other particulates from combustion, as well

as high levels of diffuse carbon dioxide. However, SOFCs

produce virtually no particulate emissions and any carbon

dioxide produced from the use of natural gas can be readily

captured by existing carbon capture technologies. SOFCs

can also produce the high voltage direct current (“DC”)

power that data centres ultimately need, in turn producing

an efficiency gain in power electronics.

Another advantage is our ability to load follow quickly.

Today’s AI models require a supply of power that can react

quickly to the huge swings in demand as processing starts

and stops. Our SOFCs can rapidly ramp power output up

and down in response to these loads, reducing the need for

supercapacitors, which are often used by other products

to fill the gap while they ramp up.

Looking ahead, what are the technology

priorities for Ceres?

Our priorities for the year ahead fall into three categories.

Our highest R&D priorities are “must have” features that

can lead to reduced capital expenditure and operating

expenses to lower the bar to adoption from licensees.

The next set of priorities are incremental improvements

to the cells and stacks to increase lifetime, extend durability

and reduce bill of materials costs.

Thirdly, we continue to examine revolutionary ideas that

could add to our technological leadership. By their nature,

these are earlier stage technologies – smaller bucket but

always worth planting seeds early, and we do some of

this through university collaborations.

1. US gas-fired turbine wait times as much as seven years; costs

up sharply | S&P Global.

2. Initial projects coming on-stream in 2030, new project deployment

7–10 years: Executive Summary – The Path to a New Era for

Nuclear Energy – Analysis – IEA.

3. Executive summary – Electricity Grids and Secure Energy Transitions

– Analysis – IEA.

Over the years we have worked

tirelessly to create the leading reversible

solid oxide cells for the power and

hydrogen markets. I’m very pleased

to see our technology now coming to

market through our partners. But we are

not stopping there. We continue to look

for ways to reduce costs and improve

durability for our partners, keeping us at

the forefront of solid oxide technology.”

Caroline Hargrove CBE

Chief Technology Officer

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17Ceres Annual Report 2025

Product

Launching Ceres Endura

Power built to last

This year we stand at a pivotal moment

in an extraordinary journey that began

more than 25 years ago. A journey

that has challenged the ingenuity,

tenacity and determination of our

teams. The result is a world-class

clean energy product, powered by

our unique, robust, metal supported

technology. This product is now being

manufactured in Korea and will soon

be made by others around the world,

clearly marking our transformation

from R&D to true commercialisation.

Together with our partners, we’ve

not just built a product - we’ve built

a legacy of outstanding innovation

with our purpose at its core.”

Nick Lawrence

Chief Product Officer

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Ceres Annual Report 202518

Strategic report

Can you tell us a little more about your recent

product launch – why now?

In 2025 we brought a sharper commercial focus to our

business, underpinned by refreshed strategic imperatives

and a business transformation plan to align our resources.

A key element of this evolution is the commercial launch

of our dual-purpose stack platform in April 2026, for the

first time giving our technology a clear and differentiated

identity and a compelling brand story.

Over two decades of innovation at Ceres has created the

world’s most advanced solid oxide stack that can generate

power or produce hydrogen from the same core cells. The

technology has been designed from the ground up to be

high-volume manufacturing ready, to last a long time and

to work for multiple uses. Crucially, it enables dual-licensee

partners to build both fuel cell and electrolysis stacks using

the same factory machinery, allowing them to access the

power markets now and electrolysis markets in the future.

Ceres stacks will be deliverable within months to site by

partners and connected within months rather than years,

solving critical time-to-power problems for data centre

developers. The stacks can provide 99.999% power

availability with only 10% oversizing, substantially reducing

the footprint and capital expenditure for the data centre

operator. They can also react almost instantly to varying

data centre loads (in a similar response time to batteries),

faster than any other SOFC stack.

How’s progress this year with Ceres’ SOEC

systems partners?

I’m pleased to say that our 1MW electrolysis demonstrator

in Bangalore is now fully operational, delivering in-field

class-leading hydrogen generation efficiencies of 37kWh/

kg. We are also in the later stages of the build of our very

first stack array module, which will go on test with our

partner Thermax this year.

Additionally, we have seen major growth in the number of

potential system development partners interested in using

our SOFC stacks in next-generation clean power systems

– with Ceres Endura™ positioned to become an industry

standard. This shows the versatility of our stack platform,

being used in applications ranging from power for data

centres to marine and offshore applications, electrolysis for

ammonia and eFuels, as well as biogas and future reversible

energy opportunities. Licensees value the versatility and

markets they can access with Ceres Endura™.

Internally we are working on maturing reference designs for

SOFC systems to support potential partners with a system

baseline design, designed from the ground up to make best

use of Ceres Endura™ and reducing time to market. I expect

these to be ready for use in 2026.

We thought long and hard about a name that encapsulates

all of this – the robustness, longevity, scale, manufacturing

readiness, and tenacity and ingenuity of our teams. We are

all proud to have launched Ceres Endura™ with the tagline

“Power built to last”.

What improvements have you put into the latest

stack platform?

The Ceres Endura™ design shares a common architecture

between fuel cell and electrolysis operation. Most of

the stack components are either identical or can be

manufactured on the same machines, which simplifies

product releases and helps drive down production costs.

Additionally, we’ve concentrated on reducing manufacturing

costs across the board, especially by leveraging technology

features to remove process steps at the cell level,

simplifying the design and using supply chain partnerships

to introduce lower-cost materials.

These changes have resulted in a stack design that is half

the manufacturing cost of the one we had in 2020, as well

as a substantial performance improvement accessible to our

licensee partners. We’re not finished there, though: our goal

is to bring the capital cost of Ceres Endura™ systems to a

comparable level with conventional generation by 2030,

making Ceres Endura™ a no-regrets solution to a clean

power future.

Furthermore, we have taken advantage of the stack-ability

and mechanical strength of our cells to release a next-

generation electrolysis stack that has 400 layers, reducing

the number of stacks required per MW. We will also

continue to verify it for pressurised operation during 2026.

How well is Ceres Endura™ suited to capture the

data centre power market?

Clearly this year has also shown the important role SOFC

can play in the need to supply clean power for data centres.

Ceres Endura™-based systems will work well with the new

Nvidia 800V direct current architecture out of the box and

are an ideal match for sustainable AI data centre power.

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19Ceres Annual Report 2025

Clean energy starts with

Partners

Strategic report

Ceres Annual Report 202520

With our first manufacturing partner

now in production and a unified

platform that serves both power and

hydrogen, Ceres is entering a more

commercial phase. Our technology

is real, our partner production base

is scaling and we are now focused on

converting two decades of innovation

into long-term, sustainable value.”

Filip Smeets

Chief Commercial Officer

What is your commercial strategy and what

characteristics do you seek in manufacturing

partners?

Our commercial strategy is to scale Ceres’ solid oxide

platform globally through an asset-light licensing model,

embedding our technology into the manufacturing

footprints of Tier-1 industrial partners. This approach

enables rapid commercialisation with lower capital

intensity, while partners leverage their own market

access and industrial scale to deliver power and

hydrogen solutions.

We have a clear profile of target organisations

that demonstrate:

• Tier-1 mass manufacturing capability in power,

electronics or process industries, backed by deep

supply chains and capital strength;

• Strong regional market access in priority geographies

including Korea, China, India, Taiwan, Europe and

North America; and

• Strategic alignment with clean, efficient and resilient

energy solutions, where solid oxide technology

becomes central to their long-term portfolio.

Our objective is a concentrated portfolio of scaled

partners rather than a broad tail of smaller licensees -

maximising long-term royalty potential while keeping our

technology roadmap focused and industrially coherent.

What does the business transformation plan

mean from a commercial perspective and

how does it help Ceres capture opportunities

more effectively?

The business transformation plan reflects Ceres’ evolution

from an R&D-led organisation to one focused on

commercial execution after two decades of technology

development. From a commercial perspective, it delivers

three core benefits:

1. A single, unified solid oxide platform. We are

consolidating development onto one stack platform

serving both SOFC ("solid oxide fuel cell") and SOEC

("solid oxide electrolysis cell") applications. This reduces

complexity, strengthens shared IP and simplifies

industrialisation for partners.

2. Rebalanced resources and a leaner cost base. The

programme shifts emphasis from early stage research

toward productisation, manufacturing support and

applications engineering - capabilities that directly help

partners qualify production lines and win end customer

projects. The plan targets approximately a 20% reduction

in operating expenses versus the 2025 run-rate, improving

operating leverage as royalty revenues scale.

3. Sharper commercial focus. We are concentrating

on markets with clear near-term demand and regulatory

momentum - particularly AI data centres and resilient

distributed power, alongside industrial hydrogen in India,

the Middle East and China. This means deeper strategic

relationships, disciplined opportunity selection and clearer

pathways to scale.

Overall, the transformation shortens time to market,

improves earnings visibility by increasing recurring

royalties and aligns the organisation with the next

decade of growth.

Where do you expect the AI data centre

market to go in 2026 and beyond?

AI workloads are driving a structural shift in electricity

demand. The IEA forecasts that global data centre

consumption will more than double by 2030 to

approximately 945 TWh

. The European Commission

highlights that data centres already account for around

1.5% of global electricity use and could more than double

by decade-end

. Goldman Sachs projects up to 165%

growth in global data centre power demand by 2030

versus 2023

Demand is concentrated in the US, EU and China, where

grid constraints and permitting timelines are increasingly

the limiting factor for development. As a result, operators

are turning to scalable on-site solutions.

While time-to-power remains important, the case for

SOFC in data centres is now broader and more durable.

• Permitting ease. SOFC systems offer very low local

emissions, low noise and compact footprint, enabling

faster and more predictable siting compared to

combustion-based alternatives.

Image to be confirmed

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21Ceres Annual Report 2025

• High reliability with lower redundancy cost. Modular

MW-scale units operate in parallel, enabling phased

expansion, hot-swap capability and high availability

without the overbuild required for large single-unit assets.

• High-quality DC power. SOFC delivers stable DC

output that aligns naturally with emerging 800V DC

architectures in AI campuses. Direct DC integration

reduces conversion losses and enables a more

streamlined, efficient power infrastructure.

• Future-proof fuel flexibility. Systems can operate

on natural gas today and transition to biomethane,

hydrogen or synthetic fuels as supply chains mature.

• Sustainability integration. High electrical efficiency lowers

intensity, while high-grade waste heat supports

combined heating and cooling solutions. The exhaust

characteristics are also compatible with future carbon

capture integration.

We therefore expect SOFC to play a meaningful role not

only as a bridge during grid bottlenecks, but also as a

structural component of next-generation AI data centre

energy architecture throughout the following decades.

Are there other attractive power markets for

Ceres outside data centres?

Yes. Solid oxide technology is highly versatile across

distributed power applications.

We see attractive opportunities in:

• Commercial and mixed-use buildings – high-efficiency

combined heat and power in urban environments.

• Grid support and microgrids – modular, dispatchable

power complementing renewables and replacing diesel

generation.

• Marine auxiliary power – low-emission, low-noise

onboard generation aligned with tightening air-quality

regulations.

• Industrial sites and campuses – resilient power for

critical loads, often integrated with heat recovery.

Our strategy remains consistent: deploy one unified

platform across these markets through partners already

embedded in them - expanding our royalty base without

fragmenting development efforts.

Partners continued

With hydrogen markets slower than

expected, how is Ceres ensuring its SOEC

technology is well positioned?

While large-scale green hydrogen deployment has

progressed more slowly than initially anticipated, long-

term fundamentals in refining, chemicals, fertilisers and

steel remain compelling.

We are using this period to strengthen our SOEC

proposition:

1. Proving industrial-scale performance. Our MW-

scale SOEC demonstrator with Shell in India produced

first hydrogen in 2025, with early results indicating

efficiency advantages over incumbent technologies.

2. Securing manufacturing pathways. Our global MLA

with DENSO, a major Japanese OEM, provides a royalty

route to industrial-scale SOEC manufacturing, while

Thermax serves as our system partner in India.

3. Leveraging the unified platform. A single stack

architecture supports both SOFC and SOEC, creating

shared IP, manufacturing commonality and optionality

for partners.

4. Focusing on policy-supported industrial clusters.

We prioritise sectors where high-temperature electrolysis

delivers clear efficiency and integration benefits.

This positions Ceres to scale rapidly as industrial hydrogen

demand accelerates through the 2030s.

1. International Energy Agency Energy and AI report, April 2025.

2. European Commission news article, November 2025 In focus:

Data centres – an energy-hungry challenge - Energy.

3. Goldman Sachs Insights article, February 2025: AI to drive 165%

increase in data center power demand by 2030 | Goldman Sachs.

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22 Ceres Annual Report 2025

Hybrid-ready, fuel-flexible design:

natural gas today,

100% hydrogen tomorrow

Modular and streamlined:

from sub-MW to 100+ MW

Stable 800 Volt DC output:

well suited to latest AI processing chips

Time-to-power:

delivered in months not years

Proven resiliency:

24/7 baseload, long stack life

Sustainability:

low noise and particulate emissions to enable

smoother permitting and planning approval

Fuel efficiency:

65% energy conversion

in power-only mode

Over 90% efficient in combined

heat and power mode

SOFCs provide the solution to

AI data centre power needs

The right technology, available now

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23Ceres Annual Report 2025

Sustainability

Clean energy starts with

Sustainability

Strategic report

Ceres Annual Report 202524

Diversity and inclusion

At Ceres we aim to build a workforce that represents all

sectors of society, where every employee feels safe, respected

and able to contribute their best. We call our approach DEBI

(short for diversity, equity, belonging and inclusion), and it

encompasses our belief that talent and ingenuity stem from a

variety of perspectives and experiences. Our diverse workforce

with over 350 employees includes a wide range of people from

promising students to brilliant scientists and engineers from 35

countries. During 2025 we invested an average of £697 per

employee in technical and leadership training and wellbeing

programmes. We recognise that nurturing and developing

our talent is critical to supporting retention and success. We

continually seek to improve the gender balance within Ceres

and during 2025 35% of our new recruits were female. As of

31 December 2025, 75 employees were female and 276 were

male with two undisclosed. For more information, see the

Gender Pay Report on our website.

Health and safety

No one should come to work and return home injured. We are

always striving to improve health and safety performance. In

2025, Ceres reported a Total Recordable Incident Rate (“TRIR”)

of 0.83 per 100 employees, up from 0.33 the previous year.

Ceres reported zero injuries under the Reporting of Injuries,

Diseases, and Dangerous Occurrences (“RIDDORs”) criteria,

consistent with zero reports last year.

Targeting net zero

Ceres enables the decarbonisation of multiple markets by

developing highly efficient and differentiated technology that

scales through global partnerships. But our global impact does not

absolve us of responsibility for our own emissions and impact.

We have implemented initiatives to improve our designs to

reduce emissions impact, which will significantly reduce the

carbon emissions of our technology as our partners scale

production. Ceres has committed to near-term emissions

reduction targets validated by the Science Based Targets

initiative (“SBTi”). We have committed to reducing absolute

Scope 1 and 2 GHG emissions by 42% by 2030 from a 2022

base year, and have also committed to reduce Scope 3 GHG

emissions by 53% per million GBP gross profit by 2030 from

a 2022 base year. In addition to the mandatory reporting on

sustainability, Ceres provides insights into our sustainability

strategy, environmental and governance responsibilities and

commitment to social matters on our company website.

Sustainability overview

Our sustainability targets

Take climate action

We have made an SBTi near-term target to

reduce Scope 1 & 2 emissions by 42% by

2030 and Scope 3 emissions by 53% per

million GBP of gross profit by 2030, using a

2022 baseline.

Operate responsibly

We purchase REGO certificates for certified

renewable energy production.

100%

% of electricity from renewable sources

Build social value

We invested an average of £697 per

employee.

£321,725

Training and development investment

Empower our people

We exceeded our female recruitment target

for new hires in 2025.

35%

Female recruitment in 2025 (%)

Sustainability is at the core of

Ceres - it is embedded in our

products and it motivates our staff.

We are committed to integrating it

across our business activities and

reporting on our performance.”

Julia King

Chair of the ESG Committee

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25Ceres Annual Report 2025

Sustainability roadmap

Ceres’ ESG pillars

Science-based

climate action

A green transition

that works for people

Processes that

support nature

Governance enabling

the right decision

Sustainability continued

Goal

Multi-gigawatts

of manufacturing

capacity under licence

with global partners.

Enabling significant carbon

reduction versus alternative

power and hydrogen

production

methods.

Tackling

climate change is

what drives us; we are

committed to enabling

a decarbonised world

through our technology, and

our aim is to ensure our

sustainability strategy

keeps pace with this

ambition.

• Mature reporting against TCFD

towards full compliance.

• Implement initial emissions

reduction initiatives in line

with SBTi commitment.

• Embed circular economy

principles in product design,

recycling and reuse targets.

• Understand product impact in

service with cradle-to-grave

and Scope 4 emissions analysis.

• Continue to implement

emissions reductions

initiatives in line with our SBTi

commitments.

• Improve monitoring and

targeting of energy to

identify energy hotspots and

future energy improvement

projects, in line with our ESOS

commitments.

• Maintain zero waste to landfill.

• Maintained retention of

employees at 89% from 88%.

• Continue to refine and enhance

our career development and

remuneration framework to our

future skillset requirement and

refreshed values.

• Update and publish our

business contract templates

with minimum ESG contracting

requirements.

• Reduce electrical

consumption by 15,000kWh.

• Maintain ISO 14001

accreditation for

Environmental Management

Systems.

• Evaluate water impacts from

our electrolyser technologies

at scale.

• Embed sustainability

consideration across

our operations, in alignment

with our net zero strategy.

• Annual Gallup 12 employee

survey completed in June

2025.

• Reduced the gender

pay gap amongst Ceres

employees.

• Develop a diverse and

motivated workforce with

a culture of collaboration,

focused on our mission to

deliver “clean energy for a

clean world”.

• Enhance our teams’ skills for

a green transition through

growth and training.

• Integration of Transition

Plan Taskforce framework

into reporting.

• Identification of relevant clauses

from The Chancery Lane

Project for integration into

our business contracts.

• Implement training for

contracting teams on

climate-aligned drafting.

• Set an internal target for

climate-aligned clause

adoption in new and

renewed supplier and

partner contracts.

Progress achieved

Current actions

<1 year

Future actions

1–3 years

Strategic report

26 Ceres Annual Report 2025

Emissions and energy reporting

While our technology will deliver significant carbon abatement,

we seek to understand our own direct and indirect emissions

relative to our global positive impact. Below is our SECR

emissions reporting for Scope 1, 2 and limited Scope 3 emissions,

calculated using Greenhouse Gas Protocol Accounting.

Our emissions management system, Sweep, enables real-time

tracking, supports our carbon-reduction commitments, and

ensures consistency in future analysis. Designed to comply with

the SBTi frameworks, Sweep enables Ceres to identify our

emission hotspots and monitor our progress against our goals.

Ceres’ Scope 1 and 2 emissions decreased in 2025 by 7% and

13% respectively. Several energy efficiency measures were

implemented in 2025 including: electrification of the company

vehicle; enhancements in energy monitoring to identify energy

efficiency opportunities; awareness campaigns and equipment

shutdown policies.

Although location-based Scope 2 emissions declined, electricity

use slightly increased. A cleaner, less carbon-intensive grid in

2025 largely drove the reduction, but given Ceres sources 100%

verifiable renewable energy, there is no net emissions impact.

Limited Scope 3 emissions also decreased, though fuel use

for personal vehicles represented less than 1% of total Scope

3 emissions in 2024, so this does not indicate a broader trend.

Remaining Scope 3 calculations will be published later this year

on our website. We have reduced overall emissions in 2025, but

relative to revenue, it appears superficially to have increased.

As a growth company, Ceres continues investing in

manufacturing and testing capacity, increasing short-term

emissions. However, we remain committed to reducing our

operational footprint under our SBTi near-term target. Our

technology can address climate and air-quality challenges

across industry, data centres and daily living. While scaling has

an environmental cost, any increase in our footprint will be far

outweighed by the positive global decarbonisation impact of

our technology.

Streamlined Energy and Carbon Reporting (“SECR”) for the 12 months to December 2025

2023 2024 2025

Disclosure Description

Energy

(kWh)

Emissions

(tCO

Energy

(kWh)

Emissions

(tCO

Energy

(kWh)

Emissions

(tCO

SECR disclosures

Scope 1

Direct emissions

Fuel used in transport and consumption of natural gas

2,779,434 510

2,860,495 541

2,747,365 503

Scope 2

Indirect emissions

Electricity used for operations (location-based method for emissions) 6,526,984 1,352

6,463,620 1,338

6,548,335 1,159

Electricity purchased and used for operations (market-based method for emissions) 6,526,984 Nil

6,463,620 Nil

6,548,335 Nil

Scope 3

Other indirect

emissions

Fuel used in personal vehicles for business travel 104,616 25 80,506 20 57,269 14

Total

Total SECR carbon emissions (market-based) 9,411,034 535 9,404,621 561 9,352,969 517

Carbon intensity Total carbon emissions for Scope 1, 2 and limited Scope 3 per £100k revenue 2.40 1.08 1.58

1. CO

e calculated from fuel used in Company vehicles, electricity purchased and natural gas consumed for ongoing operations, converted to tCO

e using government-approved conversion factors.

2. Other purchased gases for test stands and the associated emissions are included within Scope 3 emissions.

3. Scope 1 and 2 emissions from UK operations represent 100% (2024: 100%) and 100% (2024: 100%) of Scope 1 and 2 respectively, with no emissions from overseas operations. Emissions from our overseas offices are not included as both

are shared facilities, which limits our ability to quantify our specific footprint, and their estimated contribution to our overall footprint is too small to be material.

4. Starting from October 2020, we secured 100% renewable energy supply until September 2027, certified by TotalEnergies, which assures our energy supply is backed by relevant Renewable Energy Guarantee of Origin (“REGO”) certificates.

Strategic report Corporate governance Financial statements

27Ceres Annual Report 2025

Sustainability continued

Building resilience for the future

Governance Strategy Risk management Metrics and targets

Recommended disclosures

a) Board’s oversight a) Identify climate-related risks and opportunities a) Risk identification and assessment process a) Climate-related metrics to assess climate-related

risks and opportunities

b) Management’s role

b) Impact on the organisation’s businesses, strategy

and financial planning

b) Risk management process b) Scope 1, Scope 2 and, if appropriate, Scope

3 greenhouse gas (GHG) emissions and the

related risks

c) Resilience of the organisation’s strategy c) Integration into the organisation’s overall

risk management

c) Climate-related targets and performance

against targets

Compliant Partially compliant Non-compliant

As a technology company at the forefront of the energy transition, the climate

transition represents a strong business opportunity for Ceres; however,

climate-related risks are inherently global and will affect businesses across their

value chains and operations. Therefore, it is essential to evaluate climate risks

thoroughly to ensure resilience to a changing environment. Ceres’ technology

has an opportunity to have a global impact, but we must continue to align our

operations and technology designs with our sustainability values.

Below is our climate-related financial disclosure, consistent with the TCFD’s

recommendations and Recommended Disclosures pursuant to UK Listing

Rule 6.6.6R(8). In completing this report, we have used the TCFD guidance

material, including the TCFD technical supplement on the use of scenario

analysis, the TCFD Guidance on Metrics, Targets, and Transition Plans, and

the TCFD Guidance for All Sectors, to cover the four pillars of recommended

climate-related financial disclosures. This is Ceres’ first time reporting against

the financial impact of climate-related disclosures - representing full disclosure

against all 11 pillars. Due to the high-growth, pre-profitability nature of the

Company, we have ensured that our disclosure is credible and realistic,

commensurate with the size of our business.

Using the Task Force on Climate-related Financial Disclosures (“TCFD”) as a framework,

Ceres reports against the climate-related risks and opportunities that face our business.

Strategic report

28 Ceres Annual Report 2025

a. Describe the Board’s oversight of climate-related risks and opportunities.

The Board is responsible for the Company’s risk framework, which includes climate-related risks and

opportunities. In 2023, Ceres formalised the review of ESG risks and actions by the establishment of an

ESG Committee of the Board (“ESG Committee”). The ESG Committee oversees the development and

execution of sustainability targets and key performance indicators (“KPIs”). The Committee is crucial in shaping

and monitoring our sustainability vision and strategy to address future skills and operational and governance

needs. Such considerations not only guide current decision-making processes, but also facilitate developments

that are robust enough for an uncertain future and to enable a better one. It meets at least three times a year

and otherwise as required. The Chair reports formally to the Board after each meeting on all matters within its

duties and responsibilities. For more information on the duties and responsibilities of the ESG Committee of

the Board, please see the ESG Committee Report on page 91. The Company’s non-financial and sustainability

information statement as required by Section 414CA and Section 414CB of the Companies Act 2006 can be

found on page 95 of the Directors’ report.

b. Describe management’s role in assessing and managing climate-related risks

and opportunities.

The Company’s Chief Financial Officer Stuart Paynter chairs an Operational ESG Committee, tasked with

identifying, managing and executing against sustainability objectives. This Committee includes members from

finance, legal, operations, people and sustainability functions ensuring a holistic approach to sustainability.

Meeting at least quarterly, the Operational ESG Committee facilitates a regular review and alignment of

ESG initiatives across the organisation. The CFO reports the Committee’s progress to the ESG Committee

after each meeting, ensuring transparency and accountability. ESG metrics are incorporated into KPIs for

Executive remuneration, better reflecting our Company culture by aligning Executive interests with those of

other stakeholders, and increasing ESG performance and ESG risk management. Though the responsibility

falls to management, the operations function of the business, from procurement and the supply chain, to

manufacturing and test, to health and safety and facilities, are all deeply involved in evaluating, monitoring and

improving our sustainable behaviours and actions.

a. Describe the climate-related risks and opportunities the organisation has identified

over the short, medium and long term.

Given the challenging global backdrop, Ceres’ strategy is designed to be resilient amidst uncertainty whilst

fostering a more sustainable future. We integrate this strategy within our operations and product designs,

aiming to support industry decarbonisation with sustainability-centric technology. The level of risk varies with

factors such as the temperature increase and the time horizon. To manage and mitigate such climate-related

risks, we have conducted a scenario analysis, evaluating the impact of climate-related risks and opportunities

at three temperatures and three time horizons: 1.5°C, 2.0°C and 3.0°C temperature increases compared

to pre-industrial times over the short term (until 2030), medium term (to 2040) and long term (to 2050).

Ceres has identified six climate-related risks, four transition and two physical risks; and two climate-related

opportunities, as outlined on page 32.

b. Describe the impact of climate-related risks and opportunities on the organisation’s

businesses, strategy and financial planning.

Climate-related risks are inherently global, affecting businesses across their value chains and operations.

Climate change can disrupt global markets, leading to the scarcity of critical skills, resources and materials,

each of which could increase Ceres’ operational costs and detrimentally affect our partners’ supply chains

and disrupt production. Following TCFD guidance on evaluating risks and opportunities, we have categorised

the risks and opportunities and taken into consideration the impact across Ceres’ operations in the UK, the

production of our technology by our partners and the impact on Ceres’ potential royalty revenue in the future,

our supply chain and potential supply chains of our partners. Consideration of financial impact was quantified

as direct impact on Ceres’ business strategy and operations in 2030, for which we have a credible line of sight

of expenses. Beyond that, as a high-growth company, we rely exclusively on the climate scenarios to evaluate

impact. For more, see our scenario analysis on page 31.

Ceres embeds its technology with global partners who design and manufacture products and systems at scale

for various applications. Operating from our UK base, Ceres focuses on innovation and R&D while transferring

technology under licence. This approach presents both risks and opportunities, especially as a clean energy

company. Our current disclosure reflects our business model and small asset footprint while considering the

direct impact on Ceres’ operations and through our manufacturing partners. The innovations and sustainability

initiatives being implemented across our operations and technology development are significantly amplified

when scaled up through our partners’ production capacities, driving substantial reductions in overall emissions,

maximising our positive impact on creating a cleaner world.

c. Describe the resilience of the organisation’s strategy, taking into consideration different

climate-related scenarios, including a 2°C or lower scenario.

Ceres has completed its third iteration of climate-related scenario analysis, available on page 31. We use

independent climate scenarios, defined by the Network for Greening the Financial System (“NGFS”), to provide

credible data to support environmental and climate risk management across industries. For a full description of

our climate-related risks and opportunities and Ceres’ resiliency to them, see our scenario analysis on page 31.

Governance

Disclose Ceres’ governance around climate-related risks and opportunities.

Strategy

Disclose the actual and potential impacts of climate-related risks and

opportunities on the Company’s business, strategy and financial planning,

where such information is material.

1 2

Strategic report Corporate governance Financial statements

29Ceres Annual Report 2025

a. Describe the organisation’s processes for identifying and assessing climate-related risks.

Climate change is a significant risk, prompting the Executive Committee to compile a cross-disciplinary

ESG risk register within the corporate risk management procedure. This register encompasses various ESG

issues, each evaluated over different time periods. Each risk is assigned a severity rating, probability of

occurrence and potential impact on the business. Once risks are identified, proposed responses and post-

mitigation severity analyses are conducted.

The ESG Committee regularly reviews the risk register, escalating significant risks to the Audit and Risk

Committee for inclusion in the Board-level risk register. High-impact risks are presented to the Board

and integrated into business, strategic and financial planning, following the same escalation procedure for

high-impact short-term climate-related risks identified through scenario analysis - also referred to as our

climate-related risk radar. Additionally, the ESG Committee conducts a materiality analysis every two years to

identify and prioritise key ESG issues through stakeholder engagement.

b. Describe the organisation’s processes for managing climate-related risks.

Existing and emerging regulatory requirements related to climate change are considered in both our response

as a business but also with regard to opportunities for the business. For example, changing legislation on air

quality and emissions is driving the move towards the adoption of greener technology solutions.

Climate adaptation risks are also considered at a site level. In 2025, we used Integrated Management Systems

(“IMS”) to cover the business’ main sites, our Technology Innovation Centre in Horsham and Manufacturing

Innovation Centre in Redhill, and hosted ISO 9001 and ISO 14001 management systems. We continue to

monitor our energy utilisation and areas of improvement with specific annual initiations in alignment with

the UK Energy Savings Opportunity Scheme (“ESOS”). We have also sought to collaborate with the licence

partners and understand their mitigation and adaptation plans for their key manufacturing sites for our

technology.

With regard to the supply chain, sustainability risks, including natural and climate-related hazards, are

embedded into supplier risk assessments. This process enables the definition of risk mitigation action plans

with suppliers, as well as prioritising multi-sourcing strategies. The Company continually monitors events and

critical supplier locations to shorten reaction time and minimise business impact to both us, our suppliers and

our partners.

c. Describe how processes for identifying, assessing and managing climate-related risks

are integrated into the organisation’s overall risk management.

On top of the climate-related risks Ceres may face as a business, we are also conscious of the impact of

climate-related risks on our partners. As a licensing business, once our partners reach commercial scale,

climate-related risks may influence our partner’s productivity, thereby resulting in a financial impact on Ceres

due to disruption in royalties. Assessment of these risks is encompassed in our scenario analysis as part of our

climate-related risk radar, available on page 31. High-impact short-term risks are escalated to the Audit and Risk

Committee for review. Risks are assessed as either a new principal risk, falling within a current principal risk

or requiring ongoing monitoring. Actions are taken as needed in accordance with our corporate governance

procedures.

a. Disclose the metrics used by the organisation to assess climate-related risks and

opportunities in line with its strategy and risk management processes.

Metrics to assess climate-related risks and opportunities include climate risk and environmental profiling data,

including life cycle analysis, energy use and carbon emissions intensity. ESG metrics are incorporated into

KPIs for Executive remuneration, better reflecting our Company culture by aligning Executive interests with

those of other stakeholders, and increasing ESG performance and enhancing ESG risk management. Though

the responsibility falls with management, the operations function of the business, from procurement and the

supply chain, to manufacturing and test, to health and safety and facilities, are all deeply involved in evaluating,

monitoring and improving our sustainable behaviours and actions.

As part of our continuous efforts to enhance energy efficiency, Ceres continues to make progress against its

targets with the Energy Savings Opportunity Scheme (“ESOS”), in compliance with our energy management.

This aims to identify areas of improvement through enhanced monitoring and review solutions.

Ceres recognises the importance of water conservation in the light of the growing global water strain. Our

technology, which generates green hydrogen from green electricity, involves the hydrolysis of water into

hydrogen and oxygen. Despite our modest water consumption of 5,330m

last year, as our partners expand to

multi-gigawatt capacities globally by 2030, this will lead to significant water utilisation. Therefore, it is imperative

to understand the impact of our technology on water use. To address this, we have included an evaluation of

the water impacts of our electrolyser technology at scale in our sustainability roadmap as a future action.

b. Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 GHG emissions, and the related risks.

Each year, Ceres discloses our greenhouse gas (“GHG”) emissions for Scope 1, 2 and limited Scope 3 SECR

emissions reporting. A full disclosure of Scope 3 emissions for 2024 is available in our sustainability report

and our full Scope 3 emissions for 2025 will be published later this year on our website. By onboarding the

emissions management system Sweep, Ceres is standardising our emissions reporting to allow for more rapid

data collection to further mitigate emissions and their associated risks.

c. Describe the targets used by the organisation to manage climate-related risks and

opportunities and performance against targets.

In 2025 Ceres committed to near-term targets approved by SBTi to reduce our absolute Scope 1 and 2 GHG

emissions by 42% by 2030 from a 2022 base year. Ceres Power Limited also commits to reduce Scope 3

GHG emissions by 53% per million GBP gross profit by 2030 from a 2022 base year. We continue to review

our progress and assess the investment and actions required to meet these targets. This has provided greater

depth of understanding of the emissions of Ceres’ operations and our supply chain, the latter representing 97%

of our total emissions.

As a pre-profitability company, we have developed initiatives and plans that balance affordability with impact.

Since our supply chain constitutes a large proportion of our emissions, supply chain engagement and

sustainable procurement will play a key role in meeting these targets. We are also onboarding a life cycle

analysis tool in-house to provide ongoing insight into where emissions reductions can be achieved.

Risk management

Disclose how Ceres identifies, assesses and manages climate-related risks.

Metrics and targets

Disclose the metrics and targets used to assess and manage relevant climate-

related risks and opportunities, where such information is material.

3 4

Sustainability continued

Strategic report

30 Ceres Annual Report 2025

Scenario analysis

Ceres has evaluated the climate-related risks and opportunities

affecting our operations. Through scenario analysis, we quantify

potential risks and uncertainties under various plausible climate

futures. Following TCFD guidelines, our risks and opportunities

are categorised into transition or physical risks and assessed

across three scenarios: Net Zero 2050, Delayed Transition

and Current Policies, covering the short (to 2030), medium

(to 2040) and long (to 2050) term. These scenarios, defined

by NGFS, provide credible data to support environmental and

climate risk management across industries.

Each scenario includes assumptions about policy responses,

technology adoption and physical climate impacts, such as

investment in hydrogen projects or the frequency and intensity

of heatwaves. These assumptions help determine the impact on

Ceres. The three temperature scenarios in our analysis are:

1. Net Zero 2050: Limits global warming to 1.5°C through

stringent climate policies and innovation, achieving global

net zero CO

emissions around 2050.

2. Delayed Transition: Assumes annual emissions do not

decrease until 2030, with strong policies required to limit

warming to below 2°C, peaking at a 1.8°C increase by the

end of the century.

3. Current Policies: Maintains only currently implemented

policies, resulting in high physical risks and a final estimated

temperature increase of 2.9°C by the end of the century.

According to TCFD guidelines, it is crucial to quantify the

financial impact of climate-related risks and opportunities on a

company’s financial performance through revenue and costs, or

financial position through assets and liabilities. With this analysis,

Ceres achieves full compliance with TCFD guidelines.

Quantifying the financial impact of climate-related risks is

challenging for Ceres due to our high growth and lack of stable

historical data. Therefore, we focus our financial analysis on

climate-related risks in the short term until 2030, where we

have reasonable visibility through financial planning. Beyond

2030, we rely on climate scenarios to guide potential risk

impacts but cannot credibly quantify their financial impact.

Together, this constitutes our climate-related risk radar.

For the 2030 financial analysis, we assessed the potential

impact of climate-related risks on Ceres. This includes analysing

the climate-related risks to Ceres’ operations as well as those

of our partners. If our partners or their suppliers experience

climate-related disruptions in manufacturing, it could reduce

revenues from sales of products embedded within our

technology, thereby affecting royalty revenue to Ceres. Our

analysis identified one high financial impact risk for Ceres

through to 2030: technology adoption risks related to Ceres’

technology, aligning with one of our Company’s principal risks.

No other significant financial impacts from climate-related risks

were identified for 2030.

Our climate-related risk analysis aligns with our corporate risk

analysis. High-impact short-term risks are escalated to the Audit

and Risk Committee for review. Risks are categorised as new

principal risks, within current principal risks, or requiring ongoing

monitoring. Actions are taken as needed according to our

corporate governance procedures.

Ceres embeds our technology with global partners who design

and manufacture products and systems at scale for various

applications. Operating from our UK base, Ceres focuses on

innovation and R&D, transferring technology under licence. This

positioning presents both risks and opportunities, especially as

a clean energy company. Our current disclosure reflects our

business model and small asset footprint while considering the

direct impact on Ceres through our manufacturing partners.

Although we cannot complete a detailed financial analysis over

the medium and long term, as an asset-light growth company,

Ceres has a flexible cost base and minimal assets that could be

adversely affected by climate-related risks. We work with our

partners to understand their business continuity planning in the

context of their partnership with Ceres, as well as that of our

suppliers and our partners’ suppliers.

Scaling technology has an environmental cost, but any increase

in our footprint will be significantly outweighed by the positive

impact our technology will have on global decarbonisation efforts.

Strategic report Corporate governance Financial statements

31Ceres Annual Report 2025

Risk Impact on Ceres’ business Scenario

Short

(to 2030)

Medium

(to 2040)

Long

(to 2050) Ceres’ actions and opportunities

Transition

Policy and

legal risk

Increasing regulation,

legislation and carbon

pricing on GHG emissions.

Greater costs associated with emissions reduction,

monitoring and reporting.

Ceres pursues carbon abatement through a SBTi-guided carbon-

reduction pathway, including the cost of carbon in forward financial

planning. We set a clear strategy to reduce the carbon footprint of

our business, assessing and engaging with our supply chain to reduce

the carbon intensity of our Scope 3 emissions. Ceres continues to

evaluate the global climate regulation and emissions policy landscape.

Policy and legal

opportunity

Policy incentives and capital

allocation for scaling of

clean energy technologies.

Increased funding from public sector and investors

to accelerate scaling up of fuel cell and hydrogen

technologies.

1 High High High

Governments around the world continue to mobilise funds to support

the energy transition, such as Japan’s commitment to mobilise 15 trillion

yen in the next 15 years. Ceres sees increased opportunity in countries

as they transition away from coal to natural gas, supported by Ceres’

SOFC technology. Ceres will continue to evaluate funding opportunities

and explore partnership to progress our SOEC programme.

2 Mod High High

3 Low Mod Mod

Market risk

Global economic, political

and physical disruption

increases the cost and

availability of resources.

Higher operating costs due to increased price and

reduced availability of critical skills, resources and

materials.

We will engage with our supply chain on climate-related and

sustainability risks. We will build a robust procurement strategy to

ensure multiple sources of key materials and monitor changes in global

sustainability regulations influencing resource availability and cost. Ceres

will integrate the implication of climate change into the development of

assets and partners while building our skills pipeline for a green energy

future. Ceres will continue to build a safe, supportive and enjoyable

work environment to attract and retain talent.

Reputation

risk

Evolving stakeholder

perceptions and

expectations around climate

footprint and business

performance.

Lack of transparency and adherence could limit

commercial opportunities and threaten access

to capital.

Ceres will continue to exhibit strong governance and transparent

disclosure of ESG performance. Ceres will integrate circular economy

principles into design of technology. We will maintain a strong and

sustainable shareholder base through our Investor Relations programme.

Technology risk

Uncertainty in market

signals due to reliance on

incumbent technologies

and perceived cost to

transition to lower-emission

alternatives.

Slower than expected uptake of new technologies

due to deprioritisation of decarbonisation,

resulting in reduced production and royalties, or

limited opportunity for growth due to increased

risk aversion supporting competitive electrolyser

technologies (e.g. alkaline).

Ceres will stay at the leading edge of innovation, with a focus on cost,

life and durability, building a flexible technology that meets emissions

standards for multiple applications and geographies. Ceres will

engage with government to understand expectations and directives

surrounding net zero commitments and funding while horizon

scanning for future technologies beyond solid oxide.

Technology

opportunity

Technology revolution

to support the energy

transition, requiring huge

amounts of renewable

energy and green hydrogen.

Prosecute our licensing model to deliver clean

energy technology that bridges molecules and

electrons.

1 High High High

Natural gas remains a key transition fuel in geographies where coal is

still heavily used. Power constraints globally are a prime opportunity to

support power generation with a cleaner technology. Green hydrogen

is predicted to increase significantly by 2040 in sectors which are

highly compatible with Ceres’ SOEC technology: ammonia, steel and

sustainable aviation fuel

. We work across the value chain to stimulate

interest and adoption of our technologies to take advantage of this

market opportunity.

2 Mod High High

3 Mod Mod Mod

Physical

Acute risk

Increasing frequency of

severe climate events.

Impacts on Ceres’ production plant, our partners’

plants or their suppliers, thus resulting in lost

royalties.

Ceres will continue to rely on our strong business continuity planning.

We will minimise risk through diversification of licence partners and

diversification of applications and geographies.

Chronic risk

Increasing temperatures

affecting working conditions.

Increased costs of operations to maintain

favourable conditions for production. Capital costs

associated with retrofitting assets to provide

sufficient temperature control.

Ceres will integrate the implication of climate change into the

development of environmental resilience planning of asset and

manufacturing sites in collaboration with partners. We will support the

development of strong and localised supply chains for our operations

and our partners’ operations.

Legend for the

climate-related

risks table:

Low financial risk

Moderate financial

risk

High financial risk

Financial impact:

Ceres has analysed the

financial risks for near

term to 2030, for which

we have reasonable

line of sight as a growth

company. For medium

and long term, we

continue to rely on

climate scenarios to

assess potential impact

on Ceres.

Scenario 1: Net Zero

2050 is an ambitious

scenario that limits

global warming to 1.5°C

through stringent climate

policies and innovation.

Scenario 2: Delayed

Transition scenario

assumes global annual

emissions do not

decrease until 2030.

Strong policies are then

needed to limit warming

below 2°C.

Scenario 3: Current

Policies assumes

that only currently

implemented policies are

preserved, leading to

high physical risks from

a temperature increase

of 2.9°C.

1. BNEF. New Energy

Outlook 2025.

April 2025.

Sustainability continued

Ceres’ resilience under different, potential future climates

Strategic report

32 Ceres Annual Report 2025

Throughout the past year, the Board of Directors has

continued to promote the long-term success of the

Company while also having due regard to the matters set

out in Section 172(1) of the UK Companies Act 2006.

Directors have had regard to those specific factors

listed in the table to the right, as well as others that

are relevant to the decisions being made. The Board

acknowledges that not every decision may result in a

positive outcome for all stakeholders. By considering our

purpose, values and strategic priorities, the Board aims

to ensure that decisions are consistent and intended to

promote the Company’s long-term success.

The Company continued engaging with key stakeholders

throughout the year to deepen its understanding of the

issues and factors that are significant to them. Our key

stakeholders are listed in the Stakeholder engagement

section of the strategic report (see pages 34 to 35).

Here we identify the relevance of each stakeholder to

our business model and describe areas of focus, how the

Company engages with them, Board oversight and the

outcomes of engagement. Details of how the Directors

discharged their Section 172(1) duties when making

principal decisions during 2025 are set out on page 34 of

the corporate governance report.

Section 172(1) statement

S172(1) summary

S172(1) Factor Relevant disclosure

a. Likely consequences of any decisions in the long term

• Chair’s statement (page 6)

• Chief Executive’s statement (page 8)

• Chief Financial Officer’s statement (page 36)

• Emissions and energy reporting (page 27)

• Stakeholder engagement (page 34 to 35)

• Board decisions and outcomes (page 56 to 57)

b. Interests of the Company’s employees

• Diversity and inclusion (page 25)

• Health safety (page 25)

• Employee engagement (page 35)

• Culture and values (page 59)

c. Need to foster the Company’s business relationships

with suppliers, customers and others

• Stakeholder engagement (page 34 to 35)

• Modern Slavery Statement (website)

d. Impact of the Company’s operations on the

community and environment

• Sustainability overview (page 25)

• Emissions and energy reporting (page 27)

• Building resilience for the future (page 28)

e. Desirability of the Company maintaining a reputation

for high standards of business conduct

• Business model (page 13)

• Corporate governance report (page 54)

• Audit and Risk Committee report (page 62)

• Code of Conduct and Business Ethics (website)

f. Need to act fairly between the members of

the Company

• Principal rights and obligations attaching to shares (page 94)

• Annual General Meeting (page 49)

Section 172(1) statement

Strategic report Corporate governance Financial statements

33Ceres Annual Report 2025

Stakeholder engagement

Stakeholder

Shareholders

Relevance to business model

Capital raised from our equity investors underpins

the execution of our business model.

Partners and suppliers

Relevance to business model

Our commercial licence partners are central to our business

model. Our suppliers provide high-quality materials and

expertise.

Areas of focus

• Progress against strategy

• Financial performance

• Long-term prospects

• ESG credentials and performance

How we engage

• Dedicated Investor Relations function

• Investor roadshows and conferences

• Results presentations

• Share registrars

Board engagement and oversight

• CEO and CFO investor meetings and presentations

• Chair attendance at investor meetings

• Committee Chair outreach to investors on items

with their remit

• AGM

Areas of focus

• Technology development

• Scalable, efficient and reliable solutions

• Product delivery support

• Transparent charging and payment structures

How we engage

• Dedicated commercial development and liaison teams

• Technical programmes

• Procurement specialists

• Supply chain verification tools

Board engagement and oversight

• Engagement via representative Directors

• Significant contracts

• Modern Slavery Statement

• Payment practices

Outcomes of shareholders

• Presenting a compelling investment case

• Attracting sustainable and green investment

• Understanding the interests of our investor base

Outcomes of partners and suppliers

• Developing a robust commercial pipeline

• Understanding partner objectives and end-user needs

• Ensuring ethical standards in supply chains

Considering the interests of our stakeholders is

fundamental to the way we operate. Our values and

Code of Conduct empower employees to make the

best decisions in the interests of the Group and our

stakeholders, helping to ensure these considerations

are made not only at Board level, but also throughout

our organisation.

How our Board understands the interests

of our stakeholders

The Board appreciates that effective stakeholder

management is crucial in ensuring the success of

the business.

The Board receives regular reports from management,

which include the interests and concerns of key

stakeholder groups, and, where appropriate, the Board

engages directly with stakeholder representatives.

The Board continues to review its engagement processes

to ensure they best understand how the Company’s

interests align with those of its stakeholders.

How our Board considers stakeholders’ interests

in decision making

The Directors act in good faith to promote the success

of the Company for the benefit of shareholders, while

also considering the impact of their decisions on wider

stakeholders and other factors relevant to the decisions

being made. As part of the Board’s governance process,

stakeholder issues are discussed at each meeting.

When decisions are made that affect the Company’s

stakeholders, the Board carefully considers the interests

of each stakeholder group concerned.

For examples of how stakeholders’ interests have been

considered during the year, see the Board decision

making and outcomes on page 56 to 57.

Strategic report

34 Ceres Annual Report 2025

Stakeholder

Employees

Relevance to business model

Our employees provide the expertise required to develop our

technology to meet the commercial needs of our partners.

Industry

Relevance to business model

The industries that comprise the end users of and provide the

demand for the products produced using our technologies.

Government, legislators and regulators

Relevance to business model

The governments, legislators and regulators driving the

global agenda and demand for cleaner energy sources.

Areas of focus

• Culture and values

• Pay and benefits

• Diversity and inclusion

• Professional development

How we engage

• Monthly “All hands” meetings

• All employee events

• Employee pulse surveys and feedback

• Employee forum “Connect”

• Continuous training and development programmes

• Apprenticeship programmes

Board engagement and oversight

• Employee Engagement Director

• ESG Committee participation

• Director and employee lunches

• Oversight of cultural feedback mechanisms

Areas of focus

• Technological advancements

• Industry energy needs

How we engage

• Participation in industry conferences

• Publication of white papers

• Thought leadership

• Collaborations with academic and research institutes

Board engagement and oversight

• Thought leadership by Board subject matter experts

• Participation in Company and industry events

• Regular reports from management

Areas of focus

• Climate change

• Technology for cleaner energy

• Compliance with legislation and regulation

How we engage

• Forums, meetings and conferences

• Panel discussions

Board engagement and oversight

• Board representation of Ceres at events

• Regular updates from management

• Subject matter experts on the Board

Wider society

Relevance to business model

The people and communities which will ultimately benefit

from the use of our technologies.

Areas of focus

• Facilitating clean energy production

Outcomes of employees

• Embedding Ceres’ culture

• Talent attraction/retention/development

Outcomes of industry

• Deep Board-level knowledge of industry developments

• Enhanced evaluation of risks and opportunities

Outcomes of government, legislators and regulators

and wider society

• Driving the clean energy agenda

• Contributing to global innovation

• Applying Ceres’ technology to benefit wider society

Strategic report Corporate governance Financial statements

35Ceres Annual Report 2025

Chief Financial Officer’s statement

Operating momentum

to drive growth

2025 was a year of meaningful

progress. As partners scale up, we

are now fully aligned for commercial

delivery to create sustainable value.”

Stuart Paynter

Chief Financial Officer

Strategic report

36 Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

Operating momentum

to drive growth

£32.6m

Revenue

(2024: £51.9m)

£(32.5)m

Adjusted EBITDA loss (page 39)

(2024: £(22.3)m)

70%

Gross margin

(2024: 77%)

£(19.2)m

Cash outflow (change in cash and

short-term investments)

(2024: £(37.5)m)

£48.6m

Research and development costs

(2024: £48.5m)

£83.3m

Cash and short-term investments

(2024: £102.5m)

Introduction

2025 has been a pivotal year for Ceres, marking our transition

from a primarily R&D first organisation to a business firmly

focusing on its commercial phase. Building on the record

performance achieved in 2024, we have advanced each of

our key partnerships towards factory completion and the start

of mass manufacturing of Ceres’ solid oxide cells. Importantly,

we recognised our first royalty income as Doosan commenced

production and sales of Ceres fuel cells, and we deepened

our longstanding relationship with Weichai through a new

manufacturing licence agreement signed in November.

As we move into this next stage of growth, we are maintaining

a disciplined approach to cost management. Across the business,

we continued to focus on operating efficiency, prioritising

investment in areas that drive commercial scaling while taking

a rigorous approach to controlling overheads and optimising

our cost base.

Consolidated statement of profit and loss

for the year ended 31 December 2025

2025

£’000

2024

£’000

Revenue 32,643 51,891

Cost of sales (9,939) (11,727)

Gross profit 22,704 40,164

Gross margin 70% 77%

Other operating income 3,168 2,846

Operating costs (70,073) (74,327)

Exceptional operating costs (3,420) —

Operating loss (47,621) (31,317)

Impairment of investment in associate (2,158) —

Finance income 4,060 5,807

Finance expense (587) (362)

Loss before taxation (46,306) (25,872)

Taxation charge (1,240) (2,433)

Loss for the financial year (47,546) (28,305)

Strategic report Corporate governance Financial statements

37Ceres Annual Report 2025

Reporting on the results

Revenue

Revenue for 2025 was £32.6 million, compared with

£51.9 million in the prior year. The reduction primarily

reflects the timing of revenues recognised in 2024,

when up-front technology transfer activities were

completed for our new manufacturing licence partners,

Delta and DENSO. Our revenue comprises technology

transfers, development licences, engineering services,

the provision of technology hardware and, for the

first time, royalties as Doosan begun commercial

production. Licence revenues from the manufacturing

licence agreement signed with Weichai in November

2025 will begin to be recognised in the first half

of 2026.

Gross margin

Gross profit of £22.7 million in the year fell by 43%

from £40.2 million in 2024, as a result of high-margin

technology transfers conducted with Delta and DENSO

in 2024. Despite the lower revenue base, our gross

margin remained strong at 70% (2024: 77%), illustrating

the resilience of our licensing-led business model and

the continued benefits of disciplined cost management.

Other operating income

Other operating income was 11% higher than last year

at £3.2 million (2024: £2.8 million), which reflects the

level of RDEC (R&D expenditure credits) claimed in

the year. As Ceres has now passed the peak of its

technology development investment cycle, we expect

this to gradually reduce as our focus shifts towards the

execution and delivery of commercial programmes.

Operating costs (non-exceptional)

Operating costs reduced to £70.1 million (2024:

£74.3 million) as we focused strategic investment

on our core Ceres Endura™ product platform to

support future commercial growth. This was delivered

alongside disciplined financial management, including

a restructuring programme implemented in the second

half of the year. Following this restructure, the average

number of employees decreased to 462 (2024: 546),

with the Group ending the year at 353 employees.

Exceptional operating costs

Exceptional operating costs relate to a settlement paid

to a supplier for a contractual dispute (£1.4 million) and

an obligation arising from the termination of a supplier

contract (£2.0 million). Further details are in Note 29

to the accounts.

Finance income and expense

Finance income decreased to £4.1 million (2024:

£5.8 million), which reflects continued strong interest

rates on our bank deposits and short-term investments

in money market funds with a lower average cash

position. We maintain a stringent Treasury Policy to

balance appropriate market returns with the security

of funds including only high investment grade, and

diversification of, financial institutions. Finance expense

increased to £0.6 million (2024: £0.4 million) driven by

the unwinding of a finance component of a customer

contract, £0.3 million.

Taxation charge

Taxation charge decreased to £1.2 million (2024:

£2.4 million) and reflects payment of withholding taxes

from overseas earnings. The decrease can be

attributed to the up front licence fees recognised in

the prior year from the new manufacturing licence

partners acquired in 2024.

Loss for the financial year

The Group posted a loss of £47.5 million (2024:

£28.3 million) for the period, which reflects the decrease

in revenue and gross margin compared to 2024.

Adjusted EBITDA

Adjusted EBITDA loss for 2025 increased to

£32.5 million (2024: £22.3 million). Adjusted EBITDA

is a non-statutory measure and is detailed in the

Alternative Performance Measures section in this

review. The increased loss is primarily due to the

decreased revenue explained above.

Chief Financial Officer’s statement continued

Strategic report

38 Ceres Annual Report 2025

Reconciliation between operating loss and

Adjusted EBITDA

Management believes that presenting Adjusted EBITDA loss

allows for a more direct comparison of the Group’s performance

against its peers and provides a better understanding of the

underlying trading performance of the Group by excluding

non-recurring, irregular and one-off costs. The Group currently

defines Adjusted EBITDA loss as the operating loss for the

year excluding depreciation and amortisation charges, share-

based payment charges, exceptional costs outside the regular

course of business, unrealised losses on forward contracts and

exchange gains/losses.

Unaudited

2025

£’000

2024

£’000

Operating loss (47,621) (31,317)

Depreciation and amortisation 10,417 8,029

Share-based payment charges 1,260 964

Exchange (losses)/gains (88) 136

Exceptional operating costs 3,420 —

Losses/(gains) on forward

contracts 90 (99)

Adjusted EBITDA (32,522) (22,287)

Key cash flow financial measures

2025

£’000

2024

£’000

Total capital investments (capital

expenditure and capitalised

development) 1,863 6,743

Working capital decrease/

(increase) 17,350 (15,711)

Change in cash, cash equivalents

and investments (19,193) (37,491)

Cash, cash equivalents and

short-term investments 83,272 102,465

Total capital investments

Total capital investments comprises capital expenditure

(plant, property and equipment) and capitalised development

(intangible assets). In 2025, total capital investments declined

to £1.9 million (2024: £6.7 million), representing completion

in intangible investment culminating in the launch of our

Ceres Endura™ platform.

Working capital movements

During 2025 working capital decreased by £17.4 million (2024:

increase of £15.7 million), due to significant partner invoice

receipts in January 2025, recognised as receivables in 2024.

Our continued focus on aligning pilot plant production with

partner demand ensured that inventory levels remained stable.

Cash outflow

Cash outflow (change in cash, cash equivalents and short-

term investments) was £19.2 million (2024: £37.5 million).

This significant reduction was supported by substantial

partner receipts early in the year and reflects our continued

discipline in managing expenditure. As we progress through

the commercialisation phase, maintaining tight control of

cash remains a core priority, ensuring we allocate resources

effectively while preserving balance sheet strength.

Cash, cash equivalents and short-term

investments

The Group ends the financial year in a strong position

with £83.3 million in cash, cash equivalents and short-term

investments (2024: £102.5 million) to support future investment

as we drive revenue growth, manage costs and expenditure

in a disciplined way, and track towards profit and cash flow

break-even.

Events after the balance sheet date

After the year end, Ceres agreed and paid a settlement of

£2.0 million with a third party in connection with the early

termination of a contract.

Outlook

We enter 2026 with strong operational momentum and a clear

line of sight to the next phase of Ceres’ commercial growth.

Our partners continue to make meaningful progress towards

the start of mass production, with factory readiness advancing

across our global network.

In parallel, 2025 marked an important milestone as we recognised

our first royalties from Doosan’s commercial launch. This

represents the beginning of a scalable, high-margin revenue

stream that will grow as additional partners commence

production. Maintaining this momentum is a key focus for

the year ahead.

The launch of our Ceres Endura™ platform further strengthens

our product offering and expands the opportunity for both

existing and future partners. With a robust technology

roadmap, a disciplined operating model and a portfolio of

partners approaching commercial scale, Ceres is well positioned

to capture long-term value from the global transition to

efficient, low-carbon power and green hydrogen solutions.

Stuart Paynter

Chief Financial Officer

25 March 2026

Strategic report Corporate governance Financial statements

39Ceres Annual Report 2025

Principal risks and uncertainties

Risk management

The Group’s Risk Management and Internal Control Framework

provides a structured, consistent approach to identifying,

assessing and managing risk.

The Board sets the Group’s risk appetite, oversees the

framework, and is supported by the Audit and Risk Committee,

which reviews risk reporting, the internal control environment

and assurance from internal audit. The Group’s framework

provides reasonable, but not absolute, assurance that risks

are identified, managed and mitigated to an acceptable level.

The financial year to 31 December 2025 operated under the

Group’s previous risk and control framework. During the year,

the Group implemented an enhanced framework in preparation

for Provision 29 of the UK Corporate Governance Code 2024

which becomes effective from 1 January 2026. This Annual

Report reflects the disclosure requirements under the UK

Corporate Governance Code 2024 in effect for FY2025.

Understanding and mitigating our risks

Our risk management approach

Our approach is built on the three lines model, ensuring clarity

of roles and responsibilities.

First line: Departments

Departments identify and assess risks within their remit,

maintain departmental risk registers, operate and evidence

controls, and report incidents or control failures. Each quarter,

departmental risk owners rescore risks and attest to control

effectiveness.

Second line: Risk Oversight Group

The Risk Oversight Group provides oversight of all risk

and control registers, reviews departmental outputs, ensures

consistency of scoring and classification, evaluates emerging

risks, and oversees incident investigations. During FY2025 the

Group identified and documented material controls as part of

preparations for future Board reporting under Provision 29.

Third line: Internal audit

Internal audit, delivered independently through Grant Thornton,

provides assurance over the design and effectiveness of

material controls, reviews the broader control environment

and conducts internal audits. Findings and recommendations

are reported directly to the Audit and Risk Committee.

Risk assessment and monitoring

Risks are assessed at both departmental and Group levels.

Departmental risks are evaluated for gross and residual

likelihood and impact, and are linked to the controls and

principal risks that relate to them. Risks that could have

a material effect on the Group’s long-term viability are

reported as principal risks.

Each quarter, the Executive reviews the consolidated risk

profile, considers emerging risks, evaluates significant incidents

and assesses any implications for principal risks or the

effectiveness of material controls.

The Audit and Risk Committee reviews changes in existing

and emerging principal risks, considers the effectiveness of the

internal control environment and material controls, and ensures

that incidents are investigated and addressed appropriately.

Principal risks and any material changes are reported to the

Board, ensuring that risk considerations remain integral to

strategic planning, operational decision making and governance

across the Group.

As part of the annual cycle, the Group reviews principal risk

descriptions, updates associated mitigation activities and

confirms the Board’s risk appetite.

Strategic report

40 Ceres Annual Report 2025

Risk heatmap

Viability of technology

Operational capability

IP and regulation

Long-term value proposition

Commercial traction/partner performance

Partner scale-up/supply chain

Cyber security

Geopolitical

People and capability

Future funding and liquidity

Probability

Impact

Very likelyProbablePossibleUnlikelyRare

MajorModerateMinor

Risk culture

The Group is committed to maintaining a culture that promotes

open discussion of risk, clear accountability and early escalation

of issues. Managers are responsible for understanding and

owning the risks within their teams, operating and evidencing

controls, and ensuring that all colleagues understand their

responsibilities. Training, regular communication and leadership

behaviours reinforce a culture in which the effective management

of risk is integral to decision making and operational activity.

Principal risks and uncertainty matrix

Principal risks and mitigation actions are set out in the table

on pages 42 to 44.

Based on the risk management process described above, these

are the principal risks the Board believe have the greatest

potential to impact the Group’s future viability. This summary

is not intended to include all risks that could ultimately impact

our business and delivery of strategic objectives, and the risks

are presented in no particular order.

Beyond these, our business has other operational risks that

we manage as part of our daily operations, such as health

and safety, environmental, financial, commercial, legal, and

regulatory.

To facilitate meaningful comparison of the relative importance

of the principal risks and uncertainties at a Group level, these

have been mapped onto a probability and impact matrix

shown on the right.

Strategic report Corporate governance Financial statements

41Ceres Annual Report 2025

Trend directions

Increasing Decreasing Unchanged

Links to strategy

Sign new manufacturing licensees

Accelerate partners to market

Single stack technology platform

Principal risk There is a risk that… Actions taken by management / mitigations Change Link to strategy

Viability of

technology

We will not be able to develop and apply the Group’s

technology successfully to potential products at the right

cost point or performance, in the time frame anticipated.

Management is working to achieve agreed performance levels and cost points under

ongoing programmes, with full resources and facilities deployed to meet the release

of the dual-purpose stack platform in H1 2026.

Investment into upgraded test infrastructure continued in the year with increased

capacity and capability.

Operational

capability

The Company may be unable to satisfy current customer

contracts and demand, with an increasingly complex

partner structure.

This may be due to lack of organisational growth

management, testing capacity, and short-term

manufacturing or technical issues.

During the year operational resources were realigned to match the needs of

customer delivery and product releases.

Ongoing transformation work will occur through 2026 to ensure the business is well

placed to deliver.

IP & regulation

The Company’s competitive advantage could be at risk

from: successful challenges to its patents; unauthorised

parties using the Group’s technology in their own

products; Ceres not harvesting IP from partners; and

others infringing existing Ceres intellectual property

rights (IPRs).

Also, a risk that the Group will unwittingly infringe valid

IPRs of others, which could limit full commercialisation of

the technology.

We have internal procedures, controls and tools in place to capture, manage and

exploit all intellectual property (IP) as well as to protect, limit and control disclosure

to third parties and partners.

Contractual provisions with partners and IP insurance provide additional protection

to the Group for agreement, pursuit and defence of IP.

We perform freedom-to-operate searches to minimise this risk.

Long-term value

proposition

The value proposition of our technology may become

eroded or irrelevant, impacting on the Group’s future

profitability and growth opportunities.

We may not be successful in our research and

development efforts and may not be able to create new

intellectual property.

We address different geographical markets, which we believe will decarbonise at

different rates, and we are broadening the applications available, mitigating failure in a

single market or product.

We monitor competitor activity and market developments to identify partner and

end-user future requirements.

We have resources for pursuing disruptive innovation and continue to develop our

university network.

Principal risks and uncertainties continued

Strategic report

42 Ceres Annual Report 2025

Trend directions

Increasing Decreasing Unchanged

Links to strategy

Sign new manufacturing licensees

Accelerate partners to market

Single stack technology platform

Principal risk There is a risk that… Actions taken by management / mitigations Change Link to strategy

Commercial traction

/ partner

performance

Our partners may choose not to use our technology in

their products or go to market slower than anticipated.

We may not be able to continually attract new partners.

We may be unable to finalise a strategic partnership to

access China markets.

We may be unable to establish SOEC as a credible

technology, in part due to the competition risk.

We continue to invest in our technology to ensure it remains best in class.

Doosan factory starts production to drive Ceres royalties for the first time and we

continue to work closely with our other licensees to ensure that their factory launch

dates are met.

Continued commercial progress with new manufacturing licence signed with Weichai.

Megawatt-scale demonstration electrolyser starts producing green hydrogen at

Shell’s Technology Centre in Bangalore, India

Partner scale-up /

supply chain

We may not be able to meet the timeframes agreed

with the partners for the market launch of the

Company’s technology, for example due to supply

chain issues or, stack product maturity not keeping up

with commercialisation, or technology not meeting

requirements.

We continue to work in close collaboration with partners in their trials and early

market launches to support with their scale-up plans with mature stack design

releases. Our supply chain is periodically reviewed for at-risk supply based on either

sensitive location or single source and alternative or additional suppliers are then

sought and put in place.

We remain vigilant of ESG risks within our operations and supply chain. Partners

are realising efficiencies available from localising a larger proportion of the bill of

materials, further diversifying the supplier pool.

Cyber security

A cyber-attack or breach of system security could disrupt

our operations, cause the loss of, destruction of, or

unauthorised access to sensitive IP and trade secrets.

The Company adopts a proactive, multi-layered strategy to manage and mitigate

cyber security risks, safeguarding its systems and data to support business continuity

and protect stakeholder interests.

This includes ongoing investment in the information security framework, covering

areas such as continuous monitoring, employee training, data encryption, regular

back-ups, incident response planning, infrastructure enhancements, and periodic

progress audits.

Geopolitical

The Company or our partners may be unable to conduct

business in certain geographies, or supply chains become

disrupted due to warfare or sanctions.

The Company may come under cyber-attack from nation

-state actors, potentially compromising our IP portfolio

and trade secrets.

Ceres has a global commercial strategy that considers opportunities and looks to

mitigate risks. Risks include increased tensions in partner territories in Asia, with

potential future conflicts which may disrupt their ability to conduct business.

The Board considers the potential of realising this risk has increased, due to

heightened uncertainty in energy markets arising from conflict in the middle east.

Strategic report Corporate governance Financial statements

43Ceres Annual Report 2025

Principal risks and uncertainties continued

Principal risk There is a risk that… Actions taken by management / mitigations Change Link to strategy

People and

capability

A loss of key personnel or inability to attract required

skillsets could negatively impact our ability to innovate

and maintain a competitive advantage.

Our organisational structure and skills mix are kept under regular review to ensure

the Group maintains the capabilities required across all areas. Succession planning is

in place, and ongoing knowledge capture and IP harvesting help reduce dependency

on any single individual. An employee share scheme with high participation supports

retention, and for key personnel a long-term incentive plan is in place. Broader

reward structures are reviewed periodically to ensure competitiveness with the

external market.

While the post-restructure capability is considered sufficient, the level of risk has

increased due to the potential for higher attrition, reduced engagement and reduced

bench strength in certain specialist roles following the restructuring exercise.

Funding and

liquidity

Failure to acquire new customers would impact the

forecast cash position of the Company, potentially

requiring further external funding. An equity fundraise at a

low share price may negatively impact shareholder value.

We have a continuous cycle of cash flow monitoring, forecasting, performance

reporting and scenario planning. The nature of our licensing business model is asset

light and high gross margin, which enables us to scale activities rapidly to address

changing market conditions. This provides us with the necessary flexibility and

resilience to manage our liquidity in a robust and efficient manner and was put

into effect during the restructuring and reorganisation in the year which reduces

expected operating costs in 2026.

Proactive investor communications and management strategy are in place to support

the equity story for potential future fundraising.

Trend directions

Increasing Decreasing Unchanged

Links to strategy

Sign new manufacturing licensees

Accelerate partners to market

Single stack technology platform

Strategic report

44 Ceres Annual Report 2025

Viability statement

In accordance with Provision 31 of the UK Corporate

Governance Code 2024, the Directors have assessed the

future viability of the Group over a period longer than

12 months. The Directors believe a period of three years is

sufficient as a viability assessment period as it represents a

period in which management can make reasonable estimates

of future Group performance and financial position.

Viability assessment period

Considering the uncertainties inherent to the Group’s

operations as well as the medium-term planning, the Board

concluded that a viability assessment over a three-year

period provides a robust and realistic evaluation of the

Group’s future performance. The Directors have carried

out this viability assessment over a period of three years

for the following reasons:

• It represents a balance between an appropriate need to

plan for the longer term and uncertainties in financial projects

when considering a period of greater than three years;

• It is broadly in line with the timeframes of large collaboration

and licence agreements; and

• It is appropriate for the current stage of development of

the Group and gives an opportunity to reasonably assess

the decisions around the Group’s capital structure and

funding based on implementing its major strategic objectives

(described on page 14) and progress made with collaboration

partners.

Assessment of prospects

The Group’s viability assessment is built through integration

of the principal risks and uncertainties (described on pages

42 to 44) into a financial model with scenarios, based on

the elements of corporate planning and modelling process,

which includes:

• Annual budgeting and forecasting process incorporating

preparation of an annual budget for the following year,

which is reviewed and approved by the Board, and followed

up with periodic forecasts, which are monitored by senior

management and the Board; and

• Future planning based on a central three-year financial

projection, using management’s internal estimate of contract

intake formed on current expectations of the outturn of

existing contracts and reasonable expectation of new licence

and collaboration agreements.

The Directors regularly assess the Group’s prospects and

progress against the strategic objectives set out in its strategic

plan. The strategic plan is built around a base case scenario in

order for the Directors to assess both the Group’s liquidity and

solvency positions, along with adequacy of funding. Sensitivity

analysis of the base case assumptions underlying the plans is

also carried out. The plans are approved by the Directors and

financial budgets and KPIs are subsequently used to monitor

performance during the year via periodic reviews.

In its assessment of the Group’s prospects, the Board has

considered the following:

• The Group’s strategy and how it addresses expectations

of changing macroeconomic environments;

• The Group’s financial position;

• The commercial viability of the Group’s technology and

commercial traction; and

• Competition, intellectual property exposures and the Group’s

regulatory environment.

Strategic report Corporate governance Financial statements

45Ceres Annual Report 2025

Assessment of viability

To assess the Group’s viability, different scenarios were modelled identified by considering the potential impact of individual principal risks and possible combinations

as shown below. In total, four severe but plausible individual scenarios have been created, with the fifth collective scenario which considers the combined impact

of scenarios 1–4 to model the absolute worst-case scenario for the business. All the scenarios identified could, in theory, combine with varying levels of impact.

The Group’s principal risks and uncertainties, evaluation of the management of those risks and internal controls in place are discussed on pages 42 to 44.

Scenarios modelled

Scenario 1 – Core technology

demand delayed

Ceres’ operations become subject to a

material reduction in short-term demand

for the technology either as a result of

the technology not performing to the

expected levels or our partners choosing

not to use our technology in their products.

Stress test applied: Failure to Acquire any

new Licence partners in 2026 but from

2027 demand trends back towards one

partner per year.

Financial impact: Reduced high margin

licence revenue recognition in 2026 when

compared to base case budget. The

recoverability will be quick as the demand

trends back to target as licence revenue

on signing new agreements is recognised

upfront on transfer of technology. Gross

margin in 2026 would be similar levels

seen in 2025 but would improve quickly

in line with revenue. No cost saving

mitigations would be required as long-

term viability is not threatened under

this scenario.

Scenario 2 – Commercial scale-

up of Ceres’ technology delayed

Timeframes for commercial product

launch of Ceres’ technology with key

partners is slower than expected or

materially disrupted. For example, the

technology does not translate to large

scale production or partners are unable

to sell the planned production volumes.

Stress test applied: Royalty build-up

projections delayed by one year.

Financial impact: Revenues over the

viability period would be impacted

by c£5-6 million. High margin licence

revenue would still be recognised as

the assumption would remain consistent

with the Group’s base case budget.

There would be no cost saving mitigations

required as long-term viability is not

threatened under this scenario.

Scenario 3 – Failure to fully

execute solid oxide strategy or

limited addressable market

The market for solid oxide is immature,

and the total addressable market is based

on a forecast. It could also unfold that the

market for solid oxide applications may

mature more slowly than anticipated. Also,

Ceres’ technology demonstrators may

fail to deliver on expected performance

characteristics (e.g., degradation rates).

Both of these risks could impact the

timing of new solid oxide licence partners.

Stress test applied: Failure to acquire

budgeted licence partners in 2026

and 2027.

Financial impact: Impacts all periods

within the viability assessment, top-line

revenue will be £15-26 million down per

year when compared to the Group’s base

case budget. Throughout the assessment

period the Group’s adjusted EBITDA is

loss making. Discretionary spend would

be cut to save 15% of operating costs.

However, external funding would not be

required for the Group to remain viable.

Scenario 4 – Breach of IP and

confidence lost in Ceres

Ceres’ IP and/or trade secrets are

breached or stolen, and the perpetrator

develops and markets products using

our IP, which could materially impact

Ceres’ competitive advantage.

Stress test applied: No partners from

2027 as potential partners consider

the value proposition and competitive

advantage of Ceres to be undermined;

additional costs from defence and

remedial actions.

Financial impact: 2026 will remain at

budgeted levels however no new licence

partners for 2027 and 2028 would

impact revenue by c£40 million with

the impact to gross margin being just

as severe. The costs to defend Ceres’

competitive advantage would be material

and significant other cost saving measures

would be needed to keep the business

from increasing EBITDA losses and

remain viable.

1 1 1 13 3 3 37 7 7 75 5 5 59 9 9 92 2 2 24 4 4 48 8 8 86 6 6 610 10 10 10

Links to principal risks Links to principal risks Links to principal risks Links to principal risks

Viability statement continued

Strategic report

46 Ceres Annual Report 2025

Conclusion on viability

The scenarios above are hypothetical and

purposefully severe in order to create

outcomes that have the ability to threaten the

viability of the Group. It is considered unlikely,

but not impossible, that the occurrence of

these risks could test the future viability

of the Group.

None of the scenarios modelled, including

the more extreme and unlikely aggregated

scenario, were found to threaten the viability

of the Group over the period of assessment.

In assessing each of the scenarios mitigating

actions were taken into account including:

• Reducing non-committed capital

expenditure;

• Reducing operating spend to the minimum

required to maintain the Group’s IP portfolio;

and

• Reviewing headcount, freezing recruitment

and reducing incentive based remuneration.

Based on the assessment of the current

position of the Group, the principal risks as

set out on pages 42 to 44 and the scenarios

assessed above, the Directors confirm that

they have a reasonable expectation that the

Group will continue in operation and meet its

liabilities as they fall due through the three-

year viability assessment period ending

31 December 2028.

Going Concern Statement

Based on the review of the Group’s cash

and short-term investments, forecast income

and expenditure, performing appropriate

sensitivity and scenario analyses, and after

making appropriate enquiries, the Directors

have a reasonable expectation that the Group

and Company have adequate resources

to progress their established strategy.

Accordingly, they continue to adopt the going

concern basis in preparing these financial

statements. More detail can be found in the

financial statements on page 110.

Board approval

The strategic report set out on pages 1 to 47

has been approved by the Board.

Stuart Paynter

Chief Financial Officer

25 March 2026

Combination of scenarios 1–4

This represents a severe downside

scenario combining the above risks

and would represent a demand and

operational shock.

Stress test applied: The Group’s reverse

stress test where the long-term viability is

no longer possible; no new partners from

2026, royalties from existing partners

delayed, additional costs from IP defence.

Financial impact: A highly unlikely

worst-case scenario but revenue,

margin and EBITDA would be materially

impacted, revenue as much as £85

million down over the assessment period

when compared to base case budget.

Discretionary spend would need to be

significantly cut and external funding

would be sought in order for the business

to remain viable.

1 3 75 92 4 86 10

Links to principal risks

Strategic report Corporate governance Financial statements

47Ceres Annual Report 2025

48 Ceres Annual Report 2025

Corporate governance

49 Chair’s introduction to governance

50 Board of Directors

52 Executive Committee

54 Corporate governance report

62 Audit and Risk Committee report

67 Remuneration and Nomination Committee report

72 Directors’ Remuneration Report

91 ESG Committee report

94 Directors’ report

Corporate

governance

49Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

Chair’s introduction to governance

Dear Shareholders,

I am pleased to introduce the corporate governance report on

behalf of the Board for the financial year ended 31 December

2025. Throughout the year, we applied the principles and

provisions of the UK Corporate Governance Code 2024

across our governance framework and activities. The Board

remains committed to the highest standards of governance,

ensuring that our oversight supports the long‑term success of

the Company for the benefit of our shareholders and wider

stakeholders.

Year in review

Over the year, the Board maintained a strong focus on the

oversight and delivery of the Company’s strategy. This included

an in‑depth review of Ceres’ strategic priorities, taking into

account market positioning and the evolution of commercial,

product and operational strategies. As a result of this review,

the Board approved refreshed strategic pillars centred on

securing new manufacturing licence agreements (“MLAs”),

accelerating partners to market, and advancing single stack

technology development. In September 2025, the Board also

approved the business transformation plan, reshaping the

organisation into a leaner operating model designed to deliver

effectively against these strategic objectives.

Cultural transformation to support a more commercially

focused organisation began in earnest during the year. The

Board has overseen management’s work to strengthen internal

structures and ways of working to embed this shift. We are

satisfied that a clear roadmap is in place to support Ceres’

cultural development and ensure it becomes firmly embedded

across the business. The Board is confident that these initiatives

position the Company to achieve long‑term sustainable success

and deliver on our purpose of providing clean energy for a

clean world.

While recognising the necessity of reshaping the business,

the Board remained mindful of the impact on our colleagues.

Throughout the restructuring process, we oversaw

management’s approach and were satisfied that the process

was fair, communications were transparent, and employee views

were appropriately considered in decision‑making. I would like

to express the Board’s sincere appreciation to all employees

involved in or affected by the process for their professionalism

and resilience.

Looking ahead

In the year ahead, the Board will remain firmly focused on

executing the Company’s strategy to deliver sustainable

long‑term value for our investors and wider stakeholders. With

a clear mandate to drive performance, we will ensure that our

strategy, purpose, values and culture remain tightly aligned

and fully geared towards commercial delivery. This disciplined

approach underpins our commitment to strengthening the

business, accelerating growth and enhancing returns for

shareholders.

The Company’s AGM will be held in London on 14 May 2026.

On behalf of the Board, I look forwards to the opportunity to

welcome you and thank you for your continued support.

Warren Finegold

Chair of the Board

25 March 2026

The Board remains committed

to the highest standards of

governance, ensuring that our

oversight supports the long‑term

success of the Company.”

Warren Finegold

Chair of the Board

50 Ceres Annual Report 2025

Corporate governance

Board of Directors

Warren Finegold

Chair of the Board

Appointment date

1 March 2020

Nationality

British

Skills and experience

Warren joined the Board as an independent Non‑

Executive Director in March 2020 and became Chair

of the Board in June 2020. He was a member of the

Vodafone Group Executive Committee for ten years,

serving principally as Group Strategy and Business

Development Director. Previously, he was a Managing

Director of UBS Investment Bank, where he held

several senior positions, most recently as Head of the

Technology Team in Europe. Warren has served on the

boards of UBM plc and Avast plc as Senior Independent

Director and as a Non‑Executive Director of Inmarsat

plc. He has an MA in Philosophy, Politics and Economics

from Oxford University and a master’s degree in Business

Administration from London Business School.

Key strengths

Global business development; plc board experience;

active knowledge of governance and regulatory matters;

strategy development; capital markets; mergers and

acquisitions.

Julia King

Senior Independent Director

Appointment date

17 June 2021

Nationality

British

Skills and experience

Julia joined the Board as an independent Non‑

Executive Director in June 2021. Julia is an engineer

with extensive experience across industry, academia

and government and a focus on climate change and

the low‑carbon economy. She has held senior roles

at Rolls‑Royce plc, the University of Cambridge and

Imperial College and as Vice Chancellor and Chief

Executive of Aston University. She is currently Chair of

Frontier IP plc and a Non‑Executive Director of Ørsted.

Julia is Chair of the Adaptation Committee of the

Climate Change Committee and was a member of the

BEIS Hydrogen Advisory Council. Julia is a Fellow of

the Royal Academy of Engineering, the Royal Society

of London and the Academy of Medical Sciences, and

was awarded a DBE for services to higher education

and technology. She sits in the House of Lords as the

Baroness Brown of Cambridge and is a member of the

Intelligence and Security Committee.

Key strengths

Industry knowledge; academic knowledge;

and climate change expertise.

Committee membership

Audit and Risk Committee

Remuneration and Nomination Committee

ESG Committee

Disclosure Committee

Independent Non‑Executive Director

Chair of Committee

D A

Experienced leadership

and governance

Read more on our website

www.ceres.tech

Visit our website

51Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

Philip Caldwell

Chief Executive Officer

Appointment date

2 September 2013

Nationality

British

Skills and experience

Phil was appointed Chief Executive of Ceres in 2013.

Under his leadership Ceres has grown into one of

the UK’s most valuable clean technology companies.

Phil has been instrumental in positioning Ceres as an

asset‑light licensing business, establishing partnerships

with global engineering giants to meet the urgency

for low‑carbon power systems and electrolysis for

green hydrogen. Phil has worked in the fuel cell

industry for 23 years, and 8 years at ICI in the Chlor‑

Alkali Electrolyser Business. He has a master’s degree

in Chemical Engineering from Imperial College,

an MBA from IESE Barcelona and is a Sainsbury

Management Fellow. He is also a Fellow of the

IChemE.

Key strengths

Experienced plc CEO with over ten years in the public

market. Commercialisation of fuel cell and electrolysis

technology across multiple markets and geographies;

strategic delivery; and team building and leadership.

Stuart Paynter

Chief Financial Officer

Appointment date

1 October 2024

Nationality

British

Skills and experience

Stuart joined Ceres as Chief Financial Officer in

October 2024.

Stuart was appointed Chief Financial Officer of Ceres in

2024. Prior to his appointment at Ceres, he was most

recently CFO and Board Director of advanced therapies

innovator Oxford BioMedica plc where, in his seven‑

year tenure, the business grew its revenue more than

five‑fold and completed transactions to successfully

internationalise the business. Stuart also spent eight

years at FTSE 100‑listed Shire Plc in various finance and

strategic roles. Stuart is a Chartered Accountant and

has a degree in Physics from Imperial College.

Key strengths

Extensive financial and commercial experience across

a range of advanced technology sectors. Strong

capital markets, UK governance and transformation

delivery track record.

Karen Bomba

Non‑Executive Director

Appointment date

1 June 2023

Nationality

American

Skills and experience

Karen joined the Board on 1 June 2023. She has 37

years of experience in the engineering industry, most

recently at Smiths Group where she was latterly

President of Smiths Interconnect until 2020.

Previously, Karen spent her career in various technical

and managerial roles at Northrop, Hitco Carbon

Composites (SGL), Zoltek Companies and Safran Group

SA, where she was CEO of Messier‑ Bugatti USA, Chair

and Chief Executive of Labinal (now Safran Electrical

and Power) and President and CEO of Morpho

Detection. She is currently a Non‑Executive Director of

Ultra Electronics UK Holdings Ltd and of Wärtsilä Oyj

Abp, and adviser to IDEMIA Public Security. Karen has

a Bachelor of Science in Mechanical Engineering from

Rensselaer Polytechnic Institute, USA, and a Certificate

of Financing and Deploying Clean Energy at the Yale

School of Business and the Environment.

Key strengths

Technology; global industry; transformation; strategic

development; and plc board experience.

Caroline Brown

Non‑Executive Director

Appointment date

1 June 2023

Nationality

British and Irish

Skills and experience

Caroline joined the Board on 1 June 2023 and has over

25 years of main board experience as a Non‑Executive

Director. She is currently Chair of Audit and Risk at FTSE

250 IP Group plc, a Non‑Executive Director of CAB

Payment Holdings plc, a board member of FTSE Small‑

Cap Luceco plc and a member of the global partnership

council of Clifford Chance LLP. Caroline has delivered

business strategy across EMEA, the Americas, India and

the Far East in commercial leadership roles for FTSE

100 groups, mid‑cap companies and innovative small

and medium‑sized enterprises. Her early career was in

corporate finance with BAML (New York), UBS and HSBC

advising global corporations and governments. Caroline

has a First in Natural Sciences and a PhD in Chemistry

from the University of Cambridge and is a Fellow of the

Chartered Institute of Management Accountants.

Key strengths

Strategy development; commercial experience;

finance; and plc board experience.

William Tudor Brown

Non‑Executive Director

Appointment date

1 April 2021

Nationality

British

Skills and experience

Tudor joined the Board in April 2021. He is one

of the founding members of ARM Holdings plc,

where until 2012 he was on the board of directors

and President of ARM Holdings plc. Tudor is a

seasoned independent Non‑Executive Director, with

considerable experience in director remuneration

matters, and a current Non‑Executive Director

of Marvell Semiconductor listed on Nasdaq. He

previously held long tenures as a Non‑Executive

Director of several major international companies,

the most recent being the Hong Kong‑listed Lenovo

Group. Tudor received an MA degree in Electrical

Sciences from the University of Cambridge. He

is a Fellow of the Institution of Engineering and

Technology and a Fellow of the Royal Academy

of Engineering. He was awarded an MBE in 2013.

Key strengths

Technology; global industry; and licensing.

Nannan Sun

Non‑Executive Director

Appointment date:

27 September 2023

Nationality

Chinese

Skills and experience

Nannan joined Ceres in September 2023 and is

the Weichai nominated Non‑Executive Director as

part of the strategic collaboration agreement with

Weichai. Nannan is a senior engineer with a doctorate

in Engineering from Shandong University and is

currently the Assistant President of Weichai Power

and President of the Future Technology Institute of

Weichai Power. Nannan is responsible for product

and technology research and development having

joined Weichai Power in July 2015 and has served as

the Vice President of the Scientific Research Institute,

the President of the Science and Technology

Research Institute, and the Vice President of the

Future Technology Research Institute.

Key strengths

Relationship with Weichai; Chinese market

knowledge; and technology.

Trine Borum Bojsen

Non‑Executive Director

Appointment date:

15 March 2022

Nationality

Danish

Skills and experience

Trine joined the Board in March 2022. She is the

Senior Vice President of Global Offshore Wind

in Equinor with profit and loss accountability for

origination, development, construction and operation

of assets. Previously, Trine was Chief Operating

Officer of Copenhagen Offshore Partners, a leading

provider of project development, construction

management, and operational management services

to offshore wind projects worldwide. Prior to that,

Trine held senior management posts at Ørsted

and also served on a number of boards and key

committees within the company. She is currently a

Non‑Executive Director of MacArtney A/S Denmark

and Danske Commodities A/S. Trine has an M.Sc

in Engineering from the Technical University of

Denmark and a Board Certificate from Copenhagen

Business School.

Key strengths

Renewables market knowledge; technical expertise;

and stakeholder relationship building.

52 Ceres Annual Report 2025

Corporate governance

<1 year 0 Directors

>1 year 1 Director

>2 years 3 Directors

>3 years 4 Directors

>8 years 0 Directors

>10 years 1 Director

Female 5 56%

Male 4 44%

Board of Directors: tenure

Board of Directors: gender

Board of Directors continued Executive Committee

53Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

Philip Caldwell

Chief Executive Officer

Biography on page 51.

Stuart Paynter

Chief Financial Officer

Biography on page 51.

Caroline Hargrove

Chief Technology Officer

Caroline joined Ceres in 2021 as Chief Technology

Officer following three years as a Non‑Executive

Director of Ceres. She started her career as a

lecturer in Engineering at Cambridge, followed

by various roles in McLaren F1, mainly focused on

the development of digitalisation and the first F1

simulator. She was previously Chief Technology

Officer of Babylon Health, and worked in a range

of sectors from motorsport to health, elite sports,

manufacturing and energy.

Caroline is also a Fellow of the Royal Academy of

Engineering, was Visiting Professor at Oxford from

2015 to 2018 and holds a PhD in Applied Mechanics.

In 2020, she received a CBE for services to

engineering.

Steve Hill

Chief Operating Officer

Steve joined Ceres in 2007, initially joining the

Company as a manufacturing engineer. Over the past

19 years, he has held a number of senior leadership

positions, serving as Operations Director from 2018

until his appointment as Chief Operating Officer in

summer 2025. Steve has overseen a broad portfolio

of responsibilities including manufacturing operations,

manufacturing engineering, technology transfer to

licence partners, as well as quality, facilities, and

health and safety.

Steve holds a degree in Manufacturing Engineering

from Cardiff University and brings a wealth of

experience and strategic insight to the continuous

evolution of Ceres’ operational capabilities.

Nick Lawrence

Chief Product Officer

Nick joined Ceres in 2016, during which time he

has been a driving force in the acceleration of

Ceres’ ambitions to be a world leader in solid oxide

technology. Nick has worked across a number

of technology disciplines including engineering,

digitalisation, modelling and AI.

As a member of Ceres’ Executive Committee, Nick

leads our talented product organisation to deliver

best‑in‑class products for our existing and future

partners.

Nick is a Chartered Engineer, a member of IMechE

and has a MEng degree in Engineering Science from

Oxford University.

Filip Smeets

Chief Commercial Officer

Filip joined Ceres in September 2024. He is a

seasoned Executive with over 20 years of global

leadership experience in cleantech and chemical

industries, specialising in strategic growth, business

transformation and market leadership.

As Chief Commercial Officer, he leads the Company’s

commercial strategy, licensing partnerships and

market expansion in solid oxide fuel cell and

electrolysis technologies.

Before joining Ceres, Filip was Senior Vice President

at Nel Hydrogen, where he led the Electrolyser

Division, overseeing product development,

sales and operations.

Michelle Traynor

Chief People Officer

Michelle joined Ceres in 2019 and is responsible for

all aspects of the people strategy to support the

ongoing growth of the business. With over 20 years’

experience gained across technology, manufacturing

and professional services, her skillset encompasses

all aspects of HR and expands beyond this into wider

business operations.

Prior to Ceres, Michelle was Chief Operating Officer

for ASB Law, having initially joined as Head of Human

Resources and Development. Michelle is a chartered

member of the CIPD and holds a master’s degree in

Personnel Management.

54 Ceres Annual Report 2025

Corporate governance

Corporate governance report

Strong governance leadership

Board leadership and Company purpose

The Board of Directors

The Board of Directors (the “Board” or “Directors”) sets the

purpose, vision and strategy for the Company and ensures

that the culture, key to the Company’s longevity and success,

is aligned. It approves the business plan and budget, monitors

performance and ensures that the necessary resources

are in place to support the achievement of the Company’s

strategic objectives. Ensuring the long‑term sustainability of

the Company and creating value for shareholders and other

stakeholders is critical to its role.

During the year the Board undertook its annual strategic review

in conjunction with the Executive Committee. More details on

the Company’s strategy can be found in the strategic report

on page 14.

The Board ensures that there is a robust system of internal

controls and a risk management framework within which the

Company can operate safely and effectively, enabling it to take

advantage of opportunities and to identify and mitigate risks.

More information on the risk management framework can be

found on page 40 and on internal controls in the Audit and

Risk Committee report on page 64.

Succession planning for key management and Board roles is

imperative to ensure that the balance of skills and experience

is maintained and that the Company has a robust and diverse

pipeline of talent to safeguard its future. More information can

be found in the Remuneration and Nomination Committee

report on page 69.

The Non‑Executive Directors perform a critical role, holding

management to account and providing strategic guidance and

constructive challenge. More details on all the Directors, along

with the key skills and knowledge they bring to their roles, are

set out on pages 50 to 51.

Meetings

The Board met nine times in 2025 (including for an off‑site

strategy meeting). The attendance of each Director is set

out in the chart to the right. Meetings are held both in person

and virtually and any Director unable to attend is invited to

submit their views and comments on the papers circulated to

the Chair of the Board (or the Committee Chair) who ensures

these are reflected in the Board (or Committee) discussions

and decision making.

In‑person meetings are held at various locations throughout

the year to enable Directors to use their time efficiently

and typically include meetings at the Company’s offices in

Horsham, which enables the Board to interact and engage

with colleagues more easily.

Board meeting agendas are carefully constructed to ensure

that there is sufficient time for considered debate and

challenge and that appropriate time is spent on key matters

such as strategy and performance. The Board receives reports

at each meeting from the Chief Executive Officer and other

Executive Committee members on specific areas of operation

and performance, which capture the activities of the Executive

Committee and the operational committees (the governance

framework is illustrated on page 58). The activities of the

Board during the year are described on the page opposite;

Board decision making and outcomes, together with alignment

to Group strategy and impact on the Company’s stakeholder

groups, are discussed on page 34. Board stakeholder

engagement is discussed throughout the governance report

and on pages 34 to 35 of the strategic report.

After every Board meeting has concluded, the Chair meets

with the Non‑Executive Directors to discuss the operation of

the Board and the performance of the Executive Directors and

senior management. The Chief Executive Officer joins these

meetings at their conclusion to receive feedback.

Attendance table

Board

Restricted

Board

Audit

and Risk

Remuneration

and

Nomination ESG

Warren

Finegold 9 (9) 7 (7) 9 (9) 5 (5)

Julia King 9 (9) 7 (7) 9 (9) 5 (5)

Caroline Brown 9 (9) 7 (7) 5 (5)

Tudor Brown

9 (9) 6 (7) 5 (5) 9 (9)

Karen Bomba 9 (9) 7 (7) 5 (5) 9 (9)

Trine Borum

Bojsen

9 (9) 7 (7) 4 (5)

Uwe Glock

1 (1)

Nannan Sun

8 (9)

Phil Caldwell

9 (9) 7 (7) 3 (5)

Stuart Paynter 9 (9) 7 (7)

1. The attendance table shows the number of meetings attended followed by

the maximum number of meetings the Director was entitled to attend (in

brackets).

2. Tudor Brown was unable to join a Restricted Board meeting called at short

notice due to overseas travel.

3. Trine Borum Bojsen was unable to attend one ESG meeting due to an

external business conflict.

4. Uwe Glock resigned on 19 February 2025.

5. Dr Sun was unable to attend one Board meeting due to a conflicting

business engagement.

6. Phil Caldwell was unable to attend two ESG meetings due to international

business commitments.

Terms of Reference for all the Committees of the Board can be found on our website at:

www.ceres.tech/who-we-are/corporate-governance

55Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

Board activities

Board agenda for 2025

Board topics discussed at meetings held by financial quarter: Q1 Q2 Q3 Q4

Strategy and implementation

CEO review including strategy actions and progress against KPIs; business

development reports from the Chief Operating Officer, Chief Commercial

Officer, Chief Technology Officer and Chief Product Officer; overview of

stakeholder engagements

CFO review including financial performance, budget approval, performance

and delivery against business plan, treasury, tax, risk oversight

Commercial pipeline encompassing development opportunities through to

recommendation of licensing contracts

Deep dive agenda items of strategic importance: legal, governance, IP,

operations and information security, commercial, technology, human resources,

cyber risk

Board Strategy Day: strategy development, alignment with purpose and values

Financial reporting and oversight

Review and approval of full‑year results

Review of half‑year results

Risk

Formal biannual major risk assessment process

Approval of principal risks and uncertainties

Consideration of Board risk appetite

Reports from the Audit and Risk Committee in respect of Provision 29 Code

change readiness

Governance

Approved AGM notice and business of the meeting

Received reports from the Audit and Risk, Remuneration and Nomination and

ESG Committees

Updates on legislative, regulatory and best practice developments, and review

and approval of insurance cover, governance arrangements, Group policies

Effectiveness

Annual Board Performance Review process and outturn

Board Development Day

Annual and ad hoc reviews of Directors’ conflicts of interest

Compliance with the UK Corporate Governance Code 2024

The Company has applied the principles of the Financial Reporting Council’s (“FRC”) UK

Corporate Governance Code 2024 and has complied with its provisions as were in effect

for the year ended 31 December 2025. The full text of the UK Corporate Governance

Code can be found on the FRC’s website at www.frc.org.uk. The following table sets

out the principles of UK Corporate Governance Code 2024 and signposts the location

of supporting information within this report, and on our Company website.

A Board effectiveness Pages 49‑61

B Purpose, values, strategy and culture Pages 1‑47 and 49‑61

C Board decision making Pages 33‑35 and 49‑61

D Engagement with stakeholders Pages 33‑35 and 49‑61

E Oversight of workplace policies and practices Pages 49‑97 and website

F Role of the Chair Pages 49‑61 and website

G Independence and division of responsibilities Pages 49‑61 and website

H External commitments and conflicts of interest Pages 49‑61

I Board resources Pages 49‑61

J Appointments to the Board and succession planning Pages 67‑71

K Board composition and length of tenure Pages 49‑61 and 67‑71

L Board evaluation Pages 56 and 71

M Financial reporting, external and internal audit –

independence and effectiveness

Pages 62‑66 and 98‑141

N Fair, balanced and understandable assessment Pages 62‑66 and 94‑97

O Risk management and internal controls Pages 40‑44 and 62‑66

P Remuneration policies and practices,

Executive remuneration Pages 67‑90

Q Remuneration Policy Pages 76‑81

R Independent judgement and discretion Pages 67‑71 and 72‑90

Read more on our website

www.ceres.tech/who-we-are/corporate-governance

56 Ceres Annual Report 2025

Corporate governance

Corporate governance report continued

Board decision making and outcomes

Business transformation plan –

review of strategic priorities

The Board approved refreshed strategic

priorities to reflect rapidly evolving market

conditions, particularly the significant growth

in AI data centre power demand and wider

electrification. The revised strategy positions

Ceres to capture immediate opportunities

in the fast growing power market while

developing capabilities for future hydrogen

market growth. The Board concluded that this

approach best supports long‑term success for

shareholders and all stakeholders. Delivery will

require a phased business transformation, with

several elements approved during the year.

Outcomes

The refreshed strategy focuses on three

core pillars: securing new manufacturing

licence agreements, accelerating partners

to market, and advancing single stack

technology. Together with the wider business

transformation Plan, these pillars are intended

to drive Ceres’ commercial success. Strategy

implementation is discussed in detail on

pages 2 to 14.

Business transformation plan –

restructure

As announced in September 2025, the Board

approved an operational restructuring of

the business to ensure resources are aligned

with the Company’s strategic priorities. In

reaching its decision, the Board carefully

considered the impact on employees, partners

and other stakeholders, and concluded that

the proposed changes would support the

long‑term success of the Company for the

benefit of shareholders as a whole. The

Board emphasised that redundancies must be

managed sensitively and respectfully, in line

with the Company’s culture and values and

consistent with the approach taken during

the 2024 restructuring.

Outcomes

Ceres has transitioned from a matrix operating

model to a more autonomous and empowered

structure, with dedicated multidisciplinary

teams focused on value creation. As part of

this transformation, the Company expects

operating expenses for the year ending 31

December 2026 to reduce by approximately

20% compared with the year ended 31

December 2025. The Board was satisfied

that the redundancy process was conducted

respectfully, with clear communication and in

line with the Company’s culture and values.

Business transformation plan –

cultural realignment

The Board approved a phased programme

of cultural transformation to support the shift

from an R&D‑led to a commercially focused

organisation following the restructuring

process. The Board concluded that this

cultural evolution is essential to delivering the

refreshed strategy, strengthening employee

engagement and refocusing the organisation

on core activities. The programme is expected

to benefit employees and, ultimately, all

stakeholder groups by driving improved

performance and reinforcing the behaviours

needed for commercial success.

Outcomes

A structured cultural change programme has

been approved and management is actively

progressing initiatives to embed the desired

behaviours and ways of working across the

organisation. Further detail is provided on

pages 13 and 14 of the strategic report. The

Board and its Committees will continue to

oversee the programme, reviewing progress

and monitoring how effectively the initiatives

become embedded throughout the business,

with updates to be provided in future reports.

Links to strategy

Links to stakeholders

Links to strategy

Links to stakeholders

Links to strategy

Links to stakeholders

Links to strategy

Sign new manufacturing licensees

Accelerate partners to market

Single stack technology platform

Links to stakeholders

Shareholders

Partners and suppliers

Employees

Industry

Government, legislators

and regulators

Wider society

57Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

Exit from non-core activities

To align the business with evolving market

conditions, management recommended

refocusing R&D on core areas of greatest

value to Ceres and its partners. This

required withdrawing from a small number of

lower‑value contracts, with some associated

costs. In approving the proposal, the

Board considered the impact on existing

relationships, the Company’s reputation and

long‑term shareholder value. The Board

agreed the commercial rationale was strong

and emphasised the importance of clearly

communicating the reasons for the decision

and maintaining strong partner relationships.

Outcomes

Exiting non‑core activities enabled the

Company to focus investment on its core

technology platform, ensuring resources

were directed towards areas most valuable to

licensee partners. In some instances, contract

withdrawals resulted in termination fees, which

are detailed in the provisions note (Note 21).

Entry into new Weichai relationship

agreement

In November the Board considered and

approved the entry into a new manufacturing

licence agreement for the production of Ceres’

proprietary SOFC technology with Weichai, a

global original equipment manufacturer and power

systems developer headquartered in Shandong,

China, and a major shareholder of Ceres. The

Board considered that the agreement built upon

the strong, existing commercial relationship with

Weichai and would allow Weichai to manufacture

cells and stacks for its stationary power systems.

The Board considered the impact across the

Company’s stakeholders, considering the scaling

up of future manufacturing to be beneficial across

all stakeholder groups, while recognising potential

for competing products between existing partners.

Outcomes

Further expansion of Ceres’ global manufacturing

partner portfolio. Weichai intends to establish a

manufacturing facility to produce cells and stacks

for the stationary power markets supported by

key components supplied by Ceres, targeting

power for AI data centres, commercial buildings

and industrial applications. SOFC systems will

complement Weichai’s existing product portfolio

for power generation, including gas engines and

powertrains. Ceres anticipates significant revenue

and cash generation opportunities.

Acquisition of RFC Power Limited

At the half‑year the Board noted that RFC

Power Limited, of which Ceres held a 24.2%

interest, would become insolvent without

support. After assessing the potential

opportunity, the Board approved exercising

an option to acquire the company. In reaching

its decision, the Board considered the value

of RFC’s low‑cost flow‑battery technology,

its potential role in long‑duration energy

storage, and its alignment with Ceres’ existing

platform, alongside shareholder interests and

the impact on employees. It also evaluated the

risk of distraction from the strategic focus on

core activities. The Board concluded that the

acquisition offered value, provided a future

development opportunity complementary

to the Group’s strategy, and supported the

Company’s purpose of delivering clean energy

for a clean world.

Outcomes

Acquisition of RFC allowed Ceres to purchase

highly developed complementary technology

at low cost. Future options for Ceres include i)

repositioning RFC as a stand‑alone entity with

external investment, or ii) further developing

the technology. Both options could deliver

future revenue streams.

Links to strategy

Links to stakeholders

Links to strategy

Links to stakeholders

Purpose alignment

Clean energy for a clean world

Links to stakeholders

Links to strategy

Sign new manufacturing licensees

Accelerate partners to market

Single stack technology platform

Links to stakeholders

Shareholders

Partners and suppliers

Employees

Industry

Government, legislators

and regulators

Wider society

58 Ceres Annual Report 2025

Corporate governance

Governance framework

Management governance structure

Operations and business implementation

Executive Committee

Weekly meetings: operational matters, risk review meetings

Quarterly business reviews

Assessment and monitoring of performance and

progress; and identifies necessary adjustments

Strategy meetings

Strategy review and proposal to PLC Board

More information on the members of the Executive

Committee can be found on page 52

Operational ESG Committee

Environmental and social plans and actions and related governance activity

Reporting and publications; policies and procedures;

and ESG risk management

Accountability

Reporting

More information can be found on our ESG Committee on page 91

Corporate governance report continued

Shareholders and other stakeholders

The owners of the Company and those with an interest in its long‑term sustainable success

More information on how the Board has considered and engaged with its stakeholders can be found in the S172(1) Statement on pages 33 to 35

Plc Board, Restricted Plc Board

More information on the activities of the Board can be found on page 55

Promotes the long‑term sustainable success

of the Company; sets purpose, values,

culture and strategy

Oversees and monitors delivery of the

strategy through systems of internal control

and risk management

Decisions take into account Director

responsibilities under S172 of the

Companies Act 2006

Audit and Risk Committee

Oversees and receives reports on

financial reporting, risk management,

internal controls and the activities of

external and internal audit functions

Remuneration and Nomination

Committee

Sets Remuneration Policy for Chair,

Executive Directors and senior management;

reviews composition and skills and

recommends appointments to the Board

ESG Committee

Oversight and monitoring of

environmental and social strategies and

actions of the Company and related

governance activities and publications

Disclosure Committee

Assesses the existence of inside

information and whether disclosure to

the market is required (in the absence of

the Plc Board); and ensures procedures

and controls in place

More information on the Committees of the Board can be found on pages 50 to 57

59Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

Culture and values

Ensuring the culture of the business aligns with the Company’s

strategy, and that Ceres’ values are at the heart of business

strategy and decision making remains a priority for the Board.

The Company’s values are set out on page 2.

The Executive Committee is responsible for ensuring these

values are demonstrated to employees on a day‑to‑day basis

and through the implementation of policies and procedures.

Regular communications and mandatory annual training

programmes, including a refresh of employees’ understanding

of the Company’s Code of Conduct and Business Ethics,

help to embed the desired attitudes and behaviours

throughout the business.

The Board monitors the Company’s culture and how it has

been embedded through a range of feedback mechanisms.

These include but are not limited to metrics on employee

engagement and satisfaction surveys, retention and turnover

rates, diversity and inclusion metrics, compliance with internal

policies, health and safety performance, remuneration, HR

grievance and disciplinary procedures, and the Group’s speak‑

up arrangements. The Board receives regular reports from

management on the structured programme of engagement

including regular “All Hands” sessions through which senior

leadership engages with all employees in an open format.

Board Directors are invited to participate in “All Employee”

events and engage with employees through site visits. Through

these mechanisms the Board receives assurance that the

desired culture is appropriately embedded within the business.

During the year, the Employee Engagement Forum was the

principal forum for employees to freely discuss matters of

interest to them in a free and open format, with the Connect

Forum focusing on matters of employee diversity and social

activity, both forums provided direct feedback to the ESG

Committee during 2025.

In 2025 the Board undertook a deep dive into operational

areas at most of its meetings. The business transformation

deep dive undertaken during the year outlined the roadmap to

evolve the business culture from research and development to

an increasingly commercially focused mindset. Over the course

of 2026, the Board will continue to monitor management

activity and ensure that the culture is embedded effectively.

To support this process, the Company will appoint cultural

ambassadors from within its employee base. Their role will

be to help embed the updated values and ways of working

throughout the organisation’s culture.

Stakeholder engagement

The Board is accountable to the Company’s shareholders and

seeks ways to engage with them to fully understand their

views. Regular communication through the various channels

of the regulatory news service, media, face‑to‑face meetings,

investor roadshows and conferences, press interviews and the

Annual General Meeting ensures that shareholders are kept

informed of the progress of the Company. The Company’s

website is kept up to date with all announcements and annual

reports.

Trine Borum Bojsen was the Board’s designated Employee

Engagement Director (“EED”) until September 2025, and met

with colleagues across the business in dedicated employee

engagement sessions at both the Horsham and Redhill sites.

From September 2025, Julia King assumed the role of EED.

Details of how the business, and where appropriate the Board,

engages with stakeholders is detailed on pages 33 to 35.

Speaking up

The Company’s Speak Up Policy enables employees and third

parties (which includes consultants, contractors and casual

and agency workers) to report any concerns that they do not

feel they can raise with their line manager to a restricted access

email address that is reviewed by the Senior Independent

Director (“SID”). On receipt of a concern, the SID will deal

with the matter raised and employ any such resources as they

may deem appropriate. Furthermore, where an employee

believes that a concern cannot be addressed by the SID, the

Policy provides an external route by email or helpline to the

independent whistleblowing charity, Protect, which also has a list

of prescribed regulators for reporting certain types of concern.

Any concerns raised can be dealt with anonymously if the

reporter wishes, and any parties concerned in the report

are removed from the investigation process. Concerns

are investigated thoroughly by the SID, and the Audit and

Risk Committee receives an annual report on key themes,

outcomes and actions identified. No speak‑ups were received

during the year.

Conflicts of interest

The Company operates a Conflicts of Interest Policy and

in addition, specifically for Board members, an Additional

External Appointments Policy. The Conflicts of Interest Policy

is provided to all employees on induction with training, which

must be refreshed annually.

Under the Additional External Appointments Policy, Directors

are required to seek approval from the Board prior to

accepting any external appointments. The Board holds an

Interests Register for the Directors, which it reviews annually

and declarations of potential conflicts of interest with any item

on a meeting agenda are stated at the start of each meeting

of the Board and its Committees. Where such a conflict is

deemed to arise, the Director concerned is not party to the

discussions and decision making.

Whilst the majority of business is conducted by the entire

Board, an additional Restricted Board meeting is held without

the non‑independent Non‑Executive Director present,

covering items for which they would be conflicted.

Division of responsibilities

The roles and responsibilities of the Chair, Chief Executive

Officer, Senior Independent Director and Company Secretary

are set out on the Company’s website at: www.ceres.tech/

about‑us/corporate‑governance.

The Chair leads the Board and is responsible for its

effectiveness in directing the Company. The Chair is supported

by the Company Secretary to ensure that the Board has all the

necessary information and resources it needs, in the format it

requires and in a timely manner to operate efficiently and make

well‑informed decisions. A forward plan for the current and

following year ensures that the Board and its Committees are

covering critical topics in a timely manner.

The Senior Independent Director (“SID”) provides a sounding

board to the Chair as well as the other Non‑Executive Directors

and acts as an intermediary between them and shareholders

if required.

60 Ceres Annual Report 2025

Corporate governance

Division of responsibilities continued

The Chair, Chief Executive Officer and Company Secretary

meet regularly outside of the formal meeting schedule to plan

meeting agendas, and to discuss strategy, performance and

current issues. These informal meetings allow transparency and

openness, which encourage constructive and objective critical

debate in meetings. The Chair also meets with members of the

Executive Committee throughout the year. The Board operates

under its schedule of Matters Reserved to the Board, which

ensures that significant decisions are always taken at the right

level and with the appropriate amount of scrutiny and challenge.

Underneath this schedule sits the Delegation of Authority Policy,

which further sets out the approval levels for the day‑to‑day

operation of the business.

Both documents are kept under review to ensure that they

remain current and appropriate and are updated as required.

The schedule of Matters Reserved to the Board is

available to view on our website at: www.ceres.tech/about‑us/

corporate‑governance.

In order to discharge its responsibilities effectively and in a

timely manner, the Board discharges certain responsibilities

through Committees of the Board, which comprise the Audit

and Risk Committee; the Remuneration and Nomination

Committee; the ESG Committee; and the Disclosure Committee.

More information on these Committees can be found in their

specific reports and in this corporate governance report.

The framework of governance within which the Board and

Executive Committee operate is set out on page 56 of this report.

Board Performance Review 2025

During the year, the Board conducted its scheduled internal

performance review, comprising a detailed questionnaire and

individual meetings with the SID, which also considered the

performance of the Chair. The review assessed effectiveness

across leadership, strategy, culture, composition, stakeholder

engagement and Committee performance. Overall, the

Board continues to operate effectively, demonstrating strong

governance and constructive working relationships. The Chair

undertook a separate exercise to evaluate the performance of

the CEO. The next externally facilitated Board Performance

Review is scheduled for 2027.

Corporate governance report continued

2025 Board Performance Review findings

• Leadership, values, culture and strategic oversight:

The Board received consistently strong assessments,

with members recognising clear strategic leadership

and alignment with the Company’s culture and values.

• Board composition and dynamics: Members

considered the balance of skills and experience to be

appropriate, with positive, collegiate behaviours and

effective challenge across the Board.

• Committee effectiveness: The Audit and Risk, ESG,

and Remuneration and Nomination Committees were

each assessed as effective and operating in line with

their Terms of Reference.

• Governance and reporting: Improvements in the

quality of Board and Committee reporting supported

enhanced decision making and strengthened

governance processes.

2026 development objectives

The review identified several development objectives

for 2026:

• Strengthen the strategic depth of Board

discussions: Reorienting deep dives to be more

strategically focused, enabling higher‑quality debate

while reducing the burden on management teams.

• Introduce a six-monthly review of strategy: To

evaluate strategy progress and development, and

assess Ceres’ evolving competitive position.

• Support the development of the Commercial

function: With emphasis on building a more proactive,

relationship‑driven approach to business development.

2025 Chair’s performance

The Directors expressed a strong appreciation for the

Chair’s leadership during 2025. They noted that he

ensures all views are heard and promotes a culture of

openness, constructive challenge, and rigorous debate

across the Board.

Progress against 2024 development

objectives

The Board noted good progress against the development

objectives from the 2024 externally facilitated review:

• Strategic coherence: Deep dive sessions and focused

strategy discussions have supported the Company’s

shift towards a more commercial culture.

• Board dynamics and relationship building: Board

development activities, including NED‑only sessions,

have commenced and will continue into 2026.

• Executive succession: The 2025 review indicates that

succession planning remains an area requiring further

focus in 2026.

• Board governance: Guidance for management on

Board paper quality has been implemented, with

further enhancements planned for 2026.

Board Performance Review 2026

The 2026 internally facilitated review will assess the

effectiveness of the Board and its Committees, including

progress against the development objectives identified in

the 2025 evaluation. The outcomes of the 2026 review

will be reported in the Annual Report and Accounts for

the year ending 31 December 2026.

61Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

Independent 5 63%

Non‑independent 3 37%

Board independence (excluding the Chair)

As at 31 December 2025, five of eight Board Directors (which

excludes the Board Chair) were considered independent.

The Board reviews interests on an ongoing basis but also

formally reviews annually the Interests Register to ensure its

assessments of independence remain current.

The Board concluded that all the Non‑Executive Directors

(excluding the Chair) are independent in compliance with the

Code, with the exception of Dr Nannan Sun who represents

Weichai Power, a strategic major shareholder, as its nominee

Director. Therefore, in compliance with Code requirements,

at least half the Board (not counting the Chair) were considered

independent during the year.

The Non‑Executive Directors do not receive any remuneration

other than their fees and reimbursement for expenses incurred.

They do not participate in any share option, bonus or pension

arrangement. Non‑Executive shareholdings are not considered

sufficiently material to affect the Board’s assessment of their

independence. More details on the Non‑Executive Directors’

fees are set out in the Directors’ Remuneration Report.

Internal controls and risk management

Ensuring the Company has and maintains a sound and

robust system of internal controls and a risk management

framework that enables the effective management of risk is

a key responsibility of the Board. The Board has delegated

responsibility of the oversight of internal controls and elements

of risk framework oversight and development to the Audit

and Risk Committee, which has overseen significant progress

in this area over the year. More information on the work of

the Audit and Risk Committee can be found on pages 62 to

66. The Board reviews the risk register regularly and annually

reassesses its risk appetite for the business. More information

on the risk management framework can be found on pages 40

to 44.

Board support

All Directors have access to the Company Secretary for

support and advice on governance matters. They have the

right to seek independent legal or other professional advice

at the Company’s expense in the furtherance of their duties.

Newly appointed Directors are provided with a tailored

induction that includes a briefing on their responsibilities and

duties as a Director by the Company Secretary, and role‑

specific meetings and introductions to the business.

Formal and ad hoc training, conferences and seminar

opportunities are offered to all Directors, and specific briefing

sessions are arranged as required. Directors are briefed on

current developments, best practice and governance and

regulatory issues throughout the year.

Ceres Annual Report 202562

Corporate governance

Audit and Risk Committee report

Introduction

I am pleased to present the Audit and Risk Committee (the

“Committee”) Report for the year ended 31 December 2025.

The Committee supports the Board in safeguarding the

integrity of the Company’s financial reporting. As part of this

remit, the Committee reviews the effectiveness of internal

controls and the risk management framework, approves

the internal audit plan, and oversees the performance and

independence of both internal and external auditors.

Committee composition

The Committee comprises three independent Non‑Executive

Directors, collectively bringing recent and relevant financial

expertise, including experience in the fuel cell and engineering

sectors. Further details on members’ skills and experience are

provided on pages 50 to 51.

Other Board members are invited to attend meetings, and

the Chair of the Board attends regularly, although not as

a Committee member. Executive Directors, senior finance

personnel, Grant Thornton (the outsourced internal auditor),

and the BDO LLP external audit team attend as required.

Ahead of each meeting, the Committee Chair holds separate

briefing sessions with the Senior Audit Partner, the outsourced

internal auditor, and the Chief Financial Officer.

Role of the Committee

The Committee’s role is to support the Board in overseeing

financial reporting, internal controls and risk management.

Its key responsibilities include:

• Monitoring the integrity of the Company’s financial

statements, including significant reporting judgements;

• Reviewing the Company’s system of internal controls

(financial, operational, reporting and compliance) and the

risk management framework;

• Advising the Board on whether the Annual Report and

Accounts is fair, balanced and understandable;

• Overseeing the assessment of principal risks and the

effectiveness of risk management and internal controls;

• Reviewing reports on whistleblowing arrangements, fraud

and bribery detection, and breaches of internal policy or

regulation;

• Approving the appointment of the internal auditor,

monitoring delivery of the internal audit plan and assessing

internal audit effectiveness;

• Recommending the reappointment of the external auditor,

monitoring audit quality, independence and objectivity,

and approving audit fees and engagement terms; and

• Approving and monitoring compliance with the Company’s

Non‑Audit Fees Policy.

Committee membership

Caroline Brown (Committee Chair)

Karen Bomba

Tudor Brown

The Committee supports the

Board in overseeing financial

reporting, internal controls and

risk management.”

Caroline Brown

Chair of the Audit

and Risk Committee

63Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

Financial and narrative reporting

During the year, the Committee:

• Reviewed the full‑year and half‑year results and associated

announcements, recommending them to the Board for

approval;

• Reviewed the Annual Report to ensure it was fair, balanced

and understandable, and that it provided shareholders with

the information needed to assess the Company’s position,

performance, business model and strategy; and

• Assessed the appropriateness of accounting policies and

practices, with particular focus on areas involving significant

judgement or estimation.

Significant financial reporting matters

The Committee received and considered reports from the

Chief Financial Officer in respect of the Group’s material

accounting judgements and estimates, and subsequently

approved the disclosure set out in Note 1 to the Group’s

financial statements. These are also discussed in the

independent auditor’s report on page 99 and were considered

in the Chief Financial Officer’s Statement on page 36. The

Committee considered the following significant financial

reporting matters, estimates and judgements, amongst others,

when approving the Group financial statements for the year

ended 31 December 2025:

Revenue recognition

During the year, the Group recognised revenue of £32.6 million

(2024: £51.9 million) relating to commercial and development

contracts with customers. Further details are set out in Note 2

to the Group financial statements.

The Group’s material contracts generally involve the

provision of services typically including technology transfers,

development licences, engineering services and the provision

of technical hardware. Significant judgement is required at

contract inception to allocate revenue and value the different

performance obligations.

The Committee reviewed management’s judgements for major

agreements with Bosch, Delta, DENSO, Doosan, Shell, Thermax

and Weichai, particularly where contract extensions or royalty

considerations affected revenue timing, and the Bosch contract

termination. For the newly signed Weichai agreement, the

Committee mandated an external accounting review, reflecting the

higher judgemental risk associated with new customer contracts.

Following review and challenge, the Committee was satisfied

that revenue recognition was appropriate and in line with IFRS 15.

Provisions: warranty and dilapidations

As at 31 December 2025, the Group held provisions of

£2.4 million (2024: £2.3 million) for property dilapidations

and £0.2 million (2024: £0.4 million) for warranties. Further

details around provisions are set out in Note 21 to the Group

financial statements.

Actual costs and timing of future cash flows related to

dilapidations are dependent on future events and require

judgement to quantify. A small proportion of technology

hardware supplied or sold to customers was provided with

contractual warranties. Provision for the associated costs

of future claims also requires an element of judgement.

The Committee reviewed the approach for assessing

these provisions with management, noting that external

professional advisers had updated the assessment of the

dilapidations provision for 2025. The warranty provision

consisted of constructive obligations and management’s

assessment of the provision was based on past performance,

customer expectations and a weighting of outcomes.

Having assessed management’s judgements on ensuring

reasonable provisions were in place, and having reviewed the

advice of the external professional advisers, the Committee

was satisfied that the estimates made were well considered

and appropriate.

Provisions: settlements

As at 31 December 2025, the Group held provisions for

settlements of £2.0 million. Further details around provisions

are set out in Note 21 to the Group financial statements.

During the year, Ceres entered negotiations with a third party

regarding the early exit of a contract. By year end, a settlement

agreement had been reached, with a payment of £2.0 million

finalised. The Committee considered management’s approach

to accounting in accordance with IAS 37 ‘Provisions,

Contingent Liabilities and Contingent Assets’, together with

advice received from external and internal legal counsel

in respect of affected contracts. Based on this guidance,

and in consideration of the work of the external auditors

which provided appropriate challenge during its reviews,

the Committee was satisfied that provisions for settlements

were appropriate.

Key activities in 2025

The Committee met five times during the year, with meetings

aligned to key points in the financial reporting and audit

cycle. Member attendance is shown on page 54 of the

corporate governance report. Key activities included:

• Recommended the approval of the final and interim

financial results and related statements;

• Reviewed the Going Concern and Viability Statements;

• Recommended the approval of the Annual Report and

Accounts 2024;

• Reviewed the operation of the Anti‑Bribery, Corruption

and Fraud Policy;

• Approved external audit fees and monitored compliance

with the Non‑Audit Fees Policy;

• Reviewed internal and external audit plans, monitored

their execution, and assessed management’s responses

to recommended actions;

• Assessed the independence and effectiveness of both

the internal and external audit functions;

• Reviewed enhancements to the risk management

framework and internal controls, making

recommendations to management and the Board;

• Considered assurance reports from management and

internal audit on the effectiveness of risk management

and internal controls;

• Reviewed the assessment of the Company’s principal

risks and uncertainties and made recommendations to

the Board;

• Oversaw preparations to support the Board’s

attestation of material controls under the UK Corporate

Governance Code 2024 (effective FY26);

• Recommended the reappointment of the external

auditor;

• Reviewed and approved the Committee’s Terms of Reference;

• Considered the performance of the Committee.

64 Ceres Annual Report 2025

Corporate governance

Significant financial reporting matters continued

RFC Power Ltd: impairment and subsequent acquisition

During the year, the Group impaired its investment in RFC

Power Limited to £nil following indicators that the entity was no

longer a going concern. This charge, arising from non‑recurring

circumstances, was presented separately to provide clarity on

underlying operating performance.

On 1 August 2025, the Group obtained control of RFC Power

Ltd and then acquired the remaining share capital for £1

on 30 September 2025, resulting in Ceres Power Limited

obtaining full ownership. The net assets of RFC Power Ltd at

the acquisition date were immaterial to the Group’s financial

position. At 31 December 2025, a loan of £375,000 was

outstanding and payable by RFC Power Ltd to Ceres Power

Ltd. From 1 August 2025, RFC Power Limited has been fully

consolidated, with assets, liabilities and results recognised

under IFRS 3 and IFRS 10.

The Committee reviewed management’s impairment

assessment, acquisition accounting and consolidation entries,

including the valuation of assets and liabilities at acquisition

and the treatment of fully impaired intangibles. Based on

the evidence presented and management’s application of

the relevant accounting standards, the Committee was

satisfied that the impairment, acquisition and consolidation

were appropriate and that the related disclosures were clear

and balanced.

Internal audit

Grant Thornton LLP continued to act as the Company’s

outsourced internal auditor during the year, having been

appointed in 2023. Grant Thornton has no other connection

with the Company or its Directors, supporting its independence.

At the start of 2025, the Committee approved an internal

audit plan comprising four reviews. The Committee monitored

delivery of the plan and management’s remediation of findings.

The reviews and their rationale were as follows:

• Employee Right to Work (“RTW”): Following a policy breach,

the Committee commissioned a targeted review. Internal

audit confirmed that management had taken appropriate

corrective action, including strengthening policies and

introducing third‑party RTW verification;

• Inventory management: As part of core financial controls,

the review assessed inventory processes, documentation,

segregation of duties and system access. Internal audit

confirmed that key controls were in place and provided

recommendations to enhance process efficiency;

• IT Disaster Recovery (“ITDR”) and Business Continuity

Planning (“BCP”): These reviews support mitigation of cyber

security and operational interruption risks. Due to resource

constraints during the Group restructuring, the work was

rescheduled to early 2026; and

• Material Controls Review: In preparation for compliance with

Provision 29 of the UK Corporate Governance Code 2024,

internal audit assessed management’s progress in defining

and documenting material controls. The review noted

strong progress and provided recommendations to further

strengthen control design and documentation.

The Committee was pleased with the continued improvement

in the quality, depth and insight of internal audit work during the

year. At its December meeting, the Committee reviewed and

approved the 2026 internal audit plan, which will be reported

on next year.

Internal audit effectiveness review

The Committee undertook a full effectiveness review of the

internal audit function in 2025. A questionnaire issued to Committee

members and management assessed three core areas:

• Positioning – mandate, independence and resourcing;

• People – competencies, staffing strategy and culture; and

• Processes – risk assessment, planning, execution and

reporting.

Following discussion of the results, the Committee concluded

that the internal audit function remained effective and

continued to add value. Recommendations were provided to

enhance visibility, action tracking and scoping of audit work, all

of which have been incorporated into future internal audit plans.

Internal controls and risk management framework

The Committee aims to ensure the integrity of the financial

statements made by the Company and to safeguard the assets

of the Company. Throughout 2025, the Committee reviewed

the effectiveness of the internal financial and compliance

control systems, supported by regular assurance reports during

the year and at year end. In limited areas where a need for

control improvements were identified, to the extent that they

are not already addressed, management continues to progress

mitigation actions in line with the recommended enhancements.

The Committee reviewed the operation of and approved

developments to policies and strategies during the year

including the Tax Policy and strategy, the Treasury Policy, non‑

audit fees, the Anti‑Bribery, Corruption and Fraud Policy, the

Conflicts of Interest Policy and the annual report on Speak Up.

The Committee oversaw substantial improvements to the

Company’s risk and internal control environment during the

year. Under the leadership of the Group Chief Financial Officer,

and with support from Grant Thornton and a dedicated internal

team, the Company implemented a refreshed risk management

framework and introduced an Enterprise Risk Management

(“ERM”) system. This has enhanced visibility of emerging risks

and strengthened the quality and consistency of risk evaluation

across the business. The risk management framework and the

Company’s approach to risk are discussed on pages 40 to 44.

In preparation for the UK Corporate Governance Code 2024

Provision 29 requirements effective for the 2026 financial

year, the Committee commissioned a structured management

exercise to support the Board’s future declaration on the

effectiveness of material controls. The Committee was

encouraged by the progress made and recognised that further

development work will continue into the next financial year.

On behalf of the Board, the Committee ensured that a robust

assessment of the Company’s principal risk and uncertainties

had been undertaken and recommended the developments

to reporting of principal risks for approval by the Board. The

Company’s principal risks are detailed on pages 42 to 44.

Audit and Risk Committee report continued

65Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

Annual Report and Accounts for the year ended

31 December 2025

Since the end of the financial year, the Committee has

reviewed the contents of the Annual Report and Accounts

considering whether the information provided enables an

assessment of the Group’s position and performance, business

model and strategy. The ESG Committee provided assurance

to the Committee and the Board on the included TCFD

disclosures. The Committee (and subsequently the Board),

assessed the report with the following factors in mind:

• Fair – no omission of material or sensitive information;

• Balanced – consistent messaging throughout, with an

appropriate balance between statutory measures and

adjusted metrics; and

• Understandable – well structured, clearly presented and

cohesive.

The Board’s formal statement is included on page 97 of the

Directors’ report.

External audit

BDO LLP was reappointed as the Company’s external auditor

at the 2025 AGM to hold office until the 2026 AGM. Peter

Acloque was appointed as Senior Audit Partner in 2024. BDO

LLP was first appointed at the Company’s Annual General

Meeting on 4 December 2019 and the Company became a

Public Interest Entity (“PIE”) on 29 June 2023 on its move

up to the Main Market of the London Stock Exchange.

Therefore, in compliance with the Competition and Markets

Authority’s Statutory Audit Service for Large Companies

Market Investigation (Mandatory Use of Competitive Tender

Processes and Audit Committee Responsibilities) Order 2014

(the “CMA Order”), and the Companies Act 2006, the next

mandatory tender process for the external auditor services

will be undertaken ahead of the audit year ending 2033

(ten years from the first appointment) and the audit partner

rotation will be due in 2029.

The Company does not currently plan to tender for the

provision of external audit services earlier as it believes

that the continuity of provider and its understanding of the

business are beneficial. Annual reviews of the effectiveness

and independence of the external auditor are and will continue

to be undertaken to ensure that the auditor continues to be

independent and appropriate.

The Company is in full compliance with the CMA Order, which

details the mandatory use of competitive tender processes

for the provision of statutory audit services.

During the year, the Committee met with the external auditor

regularly without management present, and specifically at

the time of the interim and full‑year results, to ensure that its

independence was maintained and to enable the Committee

to discuss any matters directly with the auditor.

The Committee considered the independence criteria and

performance of the auditor, noting that the engagement team

conducting the audit complied with relevant ethical requirements

including the FRC’s Ethical Standard and the IESBA Code of

Ethics and were independent of the Group, and that confirmation

of independence from the auditors had been sought and

provided. In view of these factors, the controls in place to

protect auditor independence and the willingness of BDO to

robustly challenge management as necessary, the Committee

was satisfied that BDO remains independent as external auditor.

BDO has indicated its willingness to continue in office, and the

Committee has recommended BDO’s reappointment to the

Board. The Committee confirms that its recommendation is free

from influence by a third party and that no contractual terms of

the kind mentioned in Article 16(6) of the Audit Regulation have

been imposed on the Company. A resolution to reappoint BDO

as the external auditor will be proposed at the 2026 AGM.

External auditor effectiveness

The Committee completed its FY24 external audit effectiveness

assessment following publication of the FY24 Annual Report

and Accounts. The review was conducted in accordance with

the FRC’s Audit Committees and the External Audit: Minimum

Standard, which recommends evaluation across four key areas:

• Mindset and culture;

• Skills, character and knowledge;

• Quality control; and

• Judgement.

Committee members completed a structured questionnaire

addressing these areas and were provided with supporting

evidence, a management questionnaire assessing the FY24

audit team’s technical capability, project management and

delivery, and a summary of feedback received from the

external auditor throughout the audit cycle.

The Committee reviewed the results and identified improvement

opportunities, principally relating to the timing of audit procedures

in areas involving significant judgement. These findings were

discussed with the Senior Audit Partner, the Committee Chair

and the CFO, and the Senior Audit Partner subsequently

presented proposed enhancements to strengthen audit

planning and execution in future cycles.

In discussion with the Senior Audit Partner at audit closing

meetings, directly with the Committee Chair and with the

Committee as a whole, it was determined that all potential

risks to audit process had been suitably identified and

addressed, that the strategy used by the auditor to address

these potential risks were satisfactory and that there were

no concerning actions as a result of the Committee’s review

of the FY2024 audit.

The Committee reviewed and agreed the Audit Committee

report and the work undertaken by the auditor both at the

year end and the interim results to ensure that it reflected an

understanding of the business and its strategy. It was informed

of any instances of challenge by the auditor and how these

were resolved with management to reach a satisfactory outcome.

The Committee ensured that the external auditor’s interim and

year‑end plans showed that the internal teams were resourced

appropriately and that the audit team had the appropriate

capacity, knowledge and skills to assess the business.

As a result of its assessment, the Committee concluded that

the external audit plan had been delivered in full and that the

external auditor remained effective.

66 Ceres Annual Report 2025

Corporate governance

FRC Audit Quality Inspection and Supervision

Report

The Financial Reporting Council (“FRC”) published its Audit

Quality Inspection and Supervision Report for accountancy

firms in July 2025, covering the 2024/25 inspection cycle.

In reviewing the findings relevant to BDO, the Committee

noted that although the proportion of engagements

assessed as requiring no more than limited improvements

had increased, several audits reviewed continued to require

significant improvements.

The Committee considered BDO’s Audit Quality Plan, which

sets out the firm’s response to the FRC’s findings, including

the actions and initiatives being implemented to strengthen

audit quality. The Committee was satisfied that these measures

were appropriate and aligned with regulatory expectations.

Audit quality will remain a priority area of focus for the

Committee in the year ahead.

Non-audit fees

The Committee monitored compliance with the Non‑Audit Fees

Policy, which during the year remained aligned with the FRC’s

Revised Ethical Standard issued in December 2024. Audit and

non‑audit fees paid to BDO are disclosed in Note 3 to the financial

statements.

The Policy restricts non‑audit services to no more than 70%

of the average audit fees for the preceding three years. No

non‑audit services exceeded this threshold during the year, and

the Committee confirms full compliance with the Non‑Audit

Fees Policy.

Committee Performance Review

The 2025 Audit and Risk Committee Performance Review

confirmed that the Committee continued to operate to a

high standard across all areas assessed. I was pleased to note

particularly strong feedback regarding my leadership as Chair.

The Committee also met the development objectives set

following the external evaluation conducted by BValco in 2024,

including strengthening oversight of the maturity of the Group’s

risk management approach and ensuring that emerging risks

were clearly articulated to the Board.

The year ahead

In the coming year, the Committee will remain focused on

delivering its core responsibilities. Key priorities will include

overseeing the embedding and effectiveness of the revised

risk management framework and supporting the adoption of

audit and assurance processes required under Provision 29 of

the 2024 UK Corporate Governance Code. The Committee will

also consider the development of an Audit and Risk Assurance

Policy, setting out the Company’s approach to internal controls,

risk management and the supporting assurance processes.

Caroline Brown

Chair of the Audit and Risk Committee

25 March 2026

Audit and Risk Committee report continued

67Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

Remuneration and Nomination Committee report

The Committee continues to

benefit from efficiencies gained

by considering remuneration

and nomination matters in an

integrated manner.”

Tudor Brown

Chair of the Remuneration and Nomination Committee

Introduction

I am pleased to present the Remuneration and Nomination

Committee (the “Committee”) Report for the year ended

31 December 2025. The Committee continues to benefit from

efficiencies gained by considering closely linked remuneration

and nomination matters in an integrated manner.

Board composition has remained stable since my last report to

shareholders in March 2025; as previously reported Uwe Glock

stepped down as a Director from the Board in February 2025.

Julia King assumed the mantle of Employee Engagement Director

from Trine Borum Bojsen in September 2025, specifically

requesting that she receive no increase in fees, and in February

2026 Stuart Paynter was appointed a member of the ESG

Committee in place of Phil Caldwell. Executive succession

planning remains a priority for the Committee and we continue

to make improvements in this area of responsibility.

In terms of remuneration, the Committee continued to

oversee the implementation of the Directors’ Remuneration

Policy as approved by shareholders at the 2024 AGM. The

Committee considered and approved the fixed and variable

pay elements for Executive Director remuneration, the Chair’s

fee and Company Secretary’s remuneration, the fixed and

variable pay structure for the Executive Committee members,

and considered these elements together with benefits for all

employees across the Group. Remuneration is discussed in

depth on pages 72 to 90 of this report.

The Committee oversaw preparations and was satisfied with

the conduct of the internally facilitated Board Performance

Review in 2025, which built upon the review conducted by

the external evaluator BValco in 2024. The results of the

Board Performance Review are discussed in detail on page

60, and each individual Committee Performance Review in its

respective report. The review of the Committee’s performance

showed it continued to operate effectively, with areas for

future development as discussed later within this report.

Committee composition

Membership of the Committee comprises four Non‑Executive

Directors. The Chair of the Board is also a member of the

Committee in order to ensure nomination matters have the

required input and leadership. The Chair of the Board was

considered independent on appointment to the Committee

and does not chair the Committee at any time.

No Director is involved in any discussion or decision relating

to their own remuneration and the Chair is not involved in any

discussions relating to their succession.

Other Directors and individuals such as the Chief People Officer

and external advisers are invited to attend meetings as required.

Role of the Committee

The Committee has a dual role covering both the requirements

of a Remuneration Committee and also those of a Nomination

Committee. The Committee governs all aspects of the Chair,

Executive Directors and Executive Committee members’

remuneration and reward arrangements and advises on

employee benefit structures for the Company. It is responsible

for reviewing the composition and structure of the Board and

for identifying and recommending candidates for Executive

and Non‑Executive Director appointments.

Terms of Reference for the Committee are available on our website at:

www.ceres.tech/who-we-are/corporate-governance

Committee membership

Tudor Brown (Committee Chair)

Julia King

Warren Finegold

Karen Bomba

68 Ceres Annual Report 2025

Corporate governance

Committee activities 2025

The Committee met nine times during the year ended 31 December 2025 and attendance is shown on the table on page 54

of the corporate governance report.

The chart below shows the key activities undertaken by the Committee during the year and more information on the remuneration

aspects can be found in the Directors’ Remuneration Report and the Remuneration Policy on pages 72 to 90.

Remuneration Nomination

Approved the Directors’ Remuneration Report (“DRR”) 2024

Engaged with shareholders on the 2024 DRR

Approved the 2024 bonus outcomes (89.4%)

Approved 2025 bonus targets

Approved the 2025 all‑employee Sharesave grant

Conducted annual salary review

Approved Remuneration and

Nomination sections of the

2024 Annual Report

Engaged with employee

representatives

Reviewed Committee

performance

Reviewed Terms of Reference

Approved one‑off LTIP retention awards to all employees

Reviewed performance of in‑flight LTIP awards

Approved the 2022 LTIP outturn (40%)

Approved the operation of the Executive Directors’

shareholding guideline

Approved the 2025 LTIP rules and submitted them for Board and

shareholder approval

Reviewed and approved design proposals for the

operation of LTIP awards below Executive level

Approved 2025 LTIP awards, exercising downward

discretion to Executive Director and leadership team awards

Reviewed the skills present on the Board

Recommended approval of the gender pay report

Reviewed preparations for and conduct of the

internal Board Performance Review

Considered succession planning for both Executive

and Non‑Executive roles

Recommended change of Employee Engagement Director

and Committee membership to the Board

Considered the application of ethnicity

targets in line with the Parker Review recommendations

Recommended reappointment of Directors to the Board at the AGM

Reviewed Non‑Executive Director independence and interests

Reviewed Board size, structure and composition

Nomination matters

Board composition

As at 31 December 2025, the Board comprised nine Directors,

five of whom are considered independent. Warren Finegold

is the Chair of the Board, Julia King is the Senior Independent

Director and Employee Engagement Director. Caroline Brown,

Julia King and Tudor Brown are independent Non‑Executive

Directors and Chair the Audit and Risk, ESG, and Remuneration

and Nomination Committees respectively. Karen Bomba

and Trine Borum Bojsen are independent Non‑Executive

Directors. Trine Borum Bojsen will step down at the 2026

AGM. Dr Nannan Sun is the Weichai nominated Non‑Executive

Representative Director.

Recruitment process

The diagram below illustrates the typical process used for

appointments to the Board:

Search firm engaged

Board sets desired criteria for skills and experience

Draft specifications produced and provided to Remuneration and

Nomination Committee

Candidate selected based on merit and criteria and recommended

by the Remuneration and Nomination Committee to the Board

Long-list presented to Remuneration and Nomination Committee

Shortlisted candidates meet with Chair of the Board

Suitable candidates meet other identified members of the Board

Board approval of appointment

Appointment confirmed and announced

Tailored induction process commences

Remuneration and Nomination Committee report continued

69Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

Succession planning

The Committee reviewed Board composition and succession plans for both the Board and the Executive Committee in the context of the Group restructuring undertaken during the year. It was

satisfied that appropriate measures are in place to safeguard the long‑term leadership of the business and that sufficient focus is being given to developing future leaders. The Committee and the

Board remain committed to promoting a diverse pipeline of talent, recognising this as essential to the Company’s long‑term sustainability and its ability to attract and retain high‑calibre individuals.

The tenure of each Board member, shown on pages 50 to 51, continues to be carefully monitored to ensure effective planning for future renewal and recruitment. As part of its ongoing assessment

of Board capability, the Committee evaluated the skills and experience represented across the Board to identify potential gaps or areas requiring future strengthening. The outcomes of this

assessment are summarised below. The Committee will continue to keep the Board’s composition under review to ensure it remains appropriate for the Company’s strategic needs.

Director

Experience

Karen

Bomba

Trine Borum

Bojsen

Caroline

Brown

Tudor

Brown

Warren

Finegold

Julia

King

Phil

Caldwell

Stuart

Paynter

Nannan

Sun

Senior leadership

Industry

Global

Financial

Innovation and technology

Public company and corporate governance

Government relations and regulatory

Risk management

Environmental and sustainability

Executive compensation

No/limited experience

Some experience

Considerable experience

70 Ceres Annual Report 2025

Corporate governance

Gender balance and ethnicity

The Board believes strongly that diversity of thought is crucial

to effective decision making and that diversity in all its forms is

beneficial in the composition of the Board. The gender balance

of the Board is set out on page 52 and whilst a nominal target

is not the Board’s motivation for recruitment, it is a welcome

outcome of suitable appointments to the Board. The current

gender balance meets the Financial Conduct Authority’s

(“FCA”) target of at least 40% women on boards. The target

for one of the senior roles on the Board (Chair, CEO, CFO

or SID) to be held by a woman is met.

The Company has a Diversity, Equality, Belonging and Inclusion

Policy, which the Board reviewed and approved during the

year. The Board supports and demonstrates a culture of

inclusion and welcomes diversity throughout the business,

recognising the benefits and strengths that come with

different backgrounds and perspectives.

In compliance with UK Listing Rule 6.6.6R(10), the following

tables set out the disclosed gender balance and ethnicity of our

Board members and Executive Committee team as at the year

ended 31 December 2025. Data was collated via a restricted

questionnaire to each Director and Executive Committee

member with options consistent with those set out in the tables

below (including an option to decline in compliance with the

UK General Data Protection Regulation). An acknowledgement

that the data provided would be published in this report and

provided to the Parker Review was also included.

The data collated confirms that the Board, as at 31 December

2025, met the target set by the Parker Review of at least one

Director from a minority ethnic background.

Number of

Board members

Percentage of

the Board

Number of senior

positions on the Board

(CEO, CFO, SID and Chair)

Number in

Executive

Management*

Percentage

of Executive

Management

Number of

Executive

Management’s

direct reports

Percentage of

Executive

Management’s

direct reports

Women 5 56% 1 2 29% 8 19%

Men 4 44% 3 5 71% 35 81%

Other

categories 0 0% 0 0 0%

Prefer not

to say 0 0% 0 0 0%

Number of

Board members

Percentage of

the Board

Number of senior

positions on the Board

(CEO, CFO, SID and Chair)

Number in

Executive

Management

Percentage of

Executive

Management

White British or other White

(including minority‑White groups) 8 89% 4 7 100%

Mixed/Multiple ethnic groups 0 0% 0 0 0%

Asian/Asian British 1 11% 0 0 0%

Black/African/Caribbean/Black British 0 0% 0 0 0%

Other ethnic group 0 0% 0 0 0%

Not specified/prefer not to say 0 0% 0 0 0%

* Executive Management includes the CEO and CFO.

During the year, with reference to the Parker Review, the Committee considered whether it was appropriate to set ethnicity

targets applying to the senior management team. Due to the small size of the senior management team, it was determined that

setting such targets would not be appropriate. The Committee notes that since its last review, the Company has re‑entered the

FTSE 250 and will review the Company’s position in 2026.

Remuneration and Nomination Committee report continued

71Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

Director induction and onboarding

Incoming Directors undertake a tailored induction programme

which includes briefings on their duties as a Director, the listed

company environment, and Company specific policies, and

procedures and Board pack software. A series of one‑to‑one

meetings with Board members and Executive Committee

members along with on‑site visits and tours are undertaken

to ensure new Directors have a thorough understanding of the

business. Whilst inductions are designed to cover all necessary

aspects for a new Director, requests for additional meetings

or information are met wherever possible.

Director re-election

All Directors are subject to annual re‑election at the Company’s

Annual General Meeting in compliance with the Corporate

Governance Code 2024 and the Company’s Articles of

Association. All of the Board Directors as detailed on pages

50 to 51 will stand for re‑election at the 2026 AGM except

for Trine Borum Bojsen, who will stand down as a Director

at the AGM in recognition of the increased demands of her

management responsibilities at Equinor. Details of the skills,

experience and specific strengths each Director brings to

the Board are set out on pages 50 to 51.

Board Performance Review

The Committee reviewed and approved the arrangements for

the internally facilitated Board and Committee Performance

Reviews, the full process of which is described in the

governance report on pages 60 to 61. The Committee was

satisfied that the process was appropriately robust and had

been conducted satisfactorily, with the outcomes of the review

and associated actions clearly articulated. The Committee

considered the results in respect of Board composition,

concluding that the Board’s composition remained appropriate.

Committee Performance Review

The Committee’s Annual Performance Review reflected strong

performance across all assessed areas, while highlighting

succession planning as a key priority for the year ahead.

Recommendations from the externally facilitated review

undertaken by BValco in 2024 were addressed during the

year, with the Committee ensuring appropriate time and

attention was dedicated to each area of its remit.

In the coming year, the Committee will continue to advance

its core responsibilities, placing particular emphasis on

strengthening succession planning across both Executive

and senior management roles.

Tudor Brown

Chair of the Remuneration and Nomination Committee

25 March 2026

Ceres Annual Report 202572

Corporate governance

Directors’ Remuneration Report

Dear Shareholders,

As Chair of the Remuneration and Nomination Committee

(the “Committee”), I am pleased to present our 2025 Directors’

Remuneration Report on behalf of the Board.

Business context and Company performance

2025 proved a challenging but strategically important year

for Ceres, marked by decisive commercial and organisational

changes aimed at strengthening the business and positioning

it for long‑term growth. These changes position Ceres to

take advantage of opportunities for solid oxide technology

in both power generation and green hydrogen from rapid

electrification, record renewable energy deployment,

and surging power needs from AI‑driven data centres.

The Committee focused on robust

Remuneration Policy implementation

during a challenging but strategically

important year for Ceres.”

Tudor Brown

Chair of the Remuneration & Nomination Committee

Statement by the Chair of the

Remuneration Committee

The report is divided into the following sections:

Chair’s Statement on pages 72–74

Remuneration at a glance on page 75

Remuneration Policy on pages 76–79

Annual Report on Remuneration on pages 82–90

Please refer to pages 67 to 68 for details of the

composition and focus of the Committee during 2025.

The Company made strong strategic progress: Doosan’s

commercial‑scale fuel cell factory began production, a

major new manufacturing licence was signed with Weichai

in China, and Ceres’ electrolysis technology achieved

megawatt‑scale green hydrogen production with Shell in India.

Additional partner demonstrations, including with DENSO

and JERA in Japan, further validated the technology.

To accelerate commercial growth, Ceres launched a business

transformation plan, reorganising into cross‑functional teams,

sharpening its focus on new manufacturing partnerships, and

reducing operating costs by 20%. While the record‑breaking

revenues achieved in FY2024 were not matched in 2025,

Ceres’ new, leaner structure and increased commercial focus

makes it well placed to capitalise on future opportunities.

It is within this wider context that the Committee implemented

the Remuneration Policy during the year.

Remuneration Policy and implementation

Ceres’ Remuneration Policy was approved by shareholders

at the 2024 AGM, receiving a high level of support (91.27% in

favour). The Remuneration Policy is presented for shareholder

approval at least every three years. Over 2026 the Committee

will review the Policy, and following consultation will present

an updated version for shareholder approval at the 2027

AGM. Outlined below are the principal elements of how the

Remuneration Policy was applied during FY2025, with the

full details disclosed on pages 76 to 79.

73Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

Salary

During the year, the Committee approved Executive Director salary increases of 3% aligned with

the wider workforce, such increases taking effect from 1 January 2026.

2025 bonus awards outcome

When determining the bonus outturns, the Committee considered the formulaic outcome of

the corporate key performance indicators along with the wider business and individual impact

and performance in 2025, incorporating ESG achievements. Details of this are provided in the

Annual Report on Remuneration.

In considering the overall financial and operational performance of the Company, the Committee

determined an annual bonus award of 34.3% of maximum for both Executive Directors Phil

Caldwell and Stuart Paynter was appropriate. No discretion was applied to the outcome.

2023 LTIP awards outcome

The 2023 LTIP award, which measured performance over the 2023–2025 period, achieved 25%

of its performance conditions and is scheduled to vest on 4 May 2026. Full details are provided

in the Annual Report on Remuneration. No discretion was applied to the outcome.

2025 LTIP awards grant

Concerning the 2025 LTIP awards, the Committee recognised the impact that the Bosch

withdrawal had on Ceres’ share price from 20 February 2025 onwards. In last year’s Directors’

Remuneration Report, the Committee stated an intention to apply a reduction of at least 20%

of the maximum permitted when making the 2025 LTIP awards. The Committee exercised

its discretion to apply a reduction of 30% to Executive Director LTIP awards granted in June

2025. High level details of performance criteria and weightings are disclosed on page 85.Total

shareholder return will also remain a key element to maintain alignment with shareholders.

2026 Bonus

To ensure the 2026 annual bonus directly supports the Company’s strategic priorities, the

Committee agreed to streamline the Executive Directors’ scorecard around the areas most

critical to performance. This includes a clear focus on financial delivery (revenue, gross margin,

and operational cash), alongside commercial progress through growth in the order book and

new partners.

Chair and Non-Executive Director fees

The Committee approved an increase of 3% for the Chair’s fees in 2025. Non‑Executive

Directors fees were also increased by 3%, as approved by the Executive Directors and the Chair,

being unconflicted members of the Board. These increases took effect as at 1 January 2026.

Share price performance

At the start of the year Ceres’ share price was significantly impacted by the withdrawal of

Bosch as a strategic partner in February 2025, recovering strongly in October 2025 on Bosch’s

divestment of its holding. The share price responded positively to announcements concerning

partner activity, and at year end the share price was £2.128 per share, up from £1.71 per share

on 1 January 2025. Ceres’ focus remains resolutely on ensuring that we deliver strong business

results, continue to support partner success to build a strong sustainable business and deliver

shareholder returns in the long term.

2025 Share price performance compared to FTSE 250 and peers represented by the

Solactive Hydrogen Economy Index

100

150

200

250

01/01/25 01/02/25 01/03/25 01/04/25 01/05/25 01/06/25 01/07/25 01/08/25 01/09/25 01/10/25 01/11/25 01/12/25

Ceres FTSE 250 Solactive

Shareholder engagement

At the 2025 AGM the advisory resolution to receive and approve the Directors’ Remuneration

Report (“DRR”) for the year ended 31 December 2024 passed with a majority of 79.67% votes

in favour. As the resolution received just over 20% of the vote against, in accordance with the

provisions of the UK Corporate Governance Code, in June 2025 I invited engagement from

shareholders, reaching out to holders representing 84% of those shares voted against.

Meetings I held with responding shareholders discussed the elements of the DRR chiefly of

concern to a proportion of Ceres’ investors. These included the Chief Executive Officer’s pay

rise, Executive Directors’ pay review and realignment with reference to external benchmarks,

and performance metric disclosures for short and long‑term incentives. I fed these concerns

back to the Remuneration and Nomination Committee, which noted the discussions concerning

Executive Director base salary levels, and reflected on the other matters raised.

74 Ceres Annual Report 2025

Corporate governance

Shareholder engagement continued

Following deliberation, the Committee remained satisfied

that the decisions on Executive pay remained appropriate

for the reasons detailed in the 2024 DRR, confirming that the

correction to salary level was necessary; however, reflecting on

a preference for a more graduated approach to pay increases in

future policy implementation. We have addressed points raised

by our investors on disclosures in this 2025 DRR to the extent

possible whilst protecting areas of commercial sensitivity.

Both personally and on behalf of the Committee, I would like

to thank those shareholders who participated in engagements.

All feedback received has been valuable to the Committee and

the Board, which remain committed to an ongoing constructive

relationship with our investors.

Employee reward and engagement

The overarching remuneration arrangements for the wider

workforce are considered by the Committee when reviewing

the remuneration arrangements for the Executive Directors

and the Executive Committee. Feedback is received into the

Committee via employee engagement sessions along with

the annual employee survey, and remuneration is considered

against emerging trends and best practice as shared by the

Chief People Officer and external compensation advisers.

We reviewed the performance measures and outcomes

associated with the contractual and discretionary bonus schemes

to ensure alignment with our strategy, Company performance,

remuneration philosophy and the approach to awards at Executive

Director level. The Committee also reviewed the quantum and

timing of broader workforce salary awards, closely monitoring

inflation as well as Company performance. A Company‑wide

salary increase of 3% was implemented in July 2025.

The Board oversaw the workforce restructuring during 2025,

and the Committee was satisfied that appropriate financial

arrangements were made for employees whose roles became

redundant. During this period, the Committee engaged with the

employee representatives. On behalf of the Committee, I would

like to express our appreciation for the important role they

played in supporting workforce engagement.

The adoption of the Long Term Incentive Plan 2025 by

shareholders at the 2025 AGM allowed the Committee to

adapt the employee share plan offering, using a time‑based

Directors’ Remuneration Report continued

vesting condition in place of performance metrics for share

scheme participants below Executive Director level. This

increased the plan’s effectiveness as a retention tool, whilst

reducing the overall quantum of awards. The 2025 LTIP awards

were made in June 2025 to selected participants. Furthermore,

the Committee was pleased to approve a meaningful award of

shares under the LTIP to all employees retained in December

2025 following the restructuring process. These awards were

granted in recognition of the professionalism, resilience and

fortitude shown by our employees during this process, and

to act as a retention incentive and to promote performance

going forwards.

All permanent UK employees are offered the opportunity to

become shareholders of the Company through participation

in the employee share save scheme, which during 2025 was

offered without the customary 20% discount to share price,

in view of share price performance.

The Committee reviewed the development of the Company’s

benefits portfolio since 2020, and was pleased with the progress

made across financial benefits, healthcare, insurance, holiday,

sustainability linked and other benefits over the period. The

Committee will continue to oversee the development of benefits

offered to employees over the coming year, which includes an

enhanced healthcare insurance offering for employees.

Closing remarks

On behalf of the Committee, I would like to thank the Ceres

team for navigating a challenging year. While the record‑

breaking revenues of 2024 were not matched in 2025,

management was able to guide the business to strong results

and ensure the Company is well positioned to capitalise on

current and future opportunities.

I would also like to thank shareholders for their engagement

on remuneration matters over the past year. I look forward to

continuing the dialogue over the coming year as we prepare

for the refreshed Remuneration Policy to be presented at the

2027 AGM.

Tudor Brown

Chair of the Remuneration and Nomination Committee

25 March 2026

75Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

Variable pay

2025 annual bonus awards

Phil Caldwell

£255,722

(34.3% of maximum)

Stuart Paynter

£179,005

(34.3% of maximum)

2023 LTIP vesting outcome

Phil Caldwell

£120,909

Stuart Paynter

N/A

Measures Weighting Achievement

Order intake 25% 25%

TSR 25%

Below minimum

threshold

Revenue and

income

25%

Below minimum

threshold

Partner capacity 25%

Below minimum

threshold

£150,000 £300,000 £450,000 £600,000 £750,000 £900,000 £1,050,0000

Phil Caldwell

(CEO)

Total: £908,012

Total: £554,167

Stuart Paynter

(CFO)

Base salary Benefits Pension Bonus LT IP

Fixed pay and shareholding

Actual salary

Phil Caldwell (CEO)

£500,000

Stuart Paynter (CFO)

£350,000

Pension

Phil Caldwell (CEO)

£30,000

Stuart Paynter (CFO)

£23,625

The maximum annual pension contribution/cash

allowance for Executive Directors is in line with the

rate for all employees at up to 8% in the UK.

Benefits

Phil Caldwell (CEO)

£ 1,381

Stuart Paynter (CFO)

£1,537

Shareholding MSR (%)

Target levels,

% of base

salary

Actual

levels, % of

base salary

(at 31.12.25)

CEO 200% 498%

CFO 150% 29%

Fixed pay and shareholding

Base salary

Phil Caldwell (CEO)

£515,000

(

3%)

Stuart Paynter (CFO)

£360,500

(

3%)

Pension

Phil Caldwell

(CEO)

£30,900

Stuart Paynter

(CFO)

£21,630

The maximum annual pension contribution/cash

allowance for Executive Directors is in line with the

rate for all employees at up to 8% in the UK.

Benefits

Phil Caldwell (CEO)

£3,300

Stuart Paynter (CFO)

£2,075

Shareholding

Target levels,

% of base

salary

Actual levels,

% of base

salary (at

31.12.25)

CEO 200% 498%

CFO 150% 29%

Variable pay

Target annual bonus (% of base salary)

Phil Caldwell Stuart Paynter

Target

Maximum

90%

150%

90%

150%

Bonus scorecard

LTIP target awards (% of base salary)

Phil Caldwell Stuart Paynter

Target

Maximum

150%

250%

120%

200%

Performance criteria

Remuneration at a glance (audited)

Overview of Executive Director remuneration in 2025

Single figure remuneration at a glance

Overview of Executive Director remuneration in 2026

Order Intake 30%

New Partners 30%

Revenue 20%

Gross Margin 5%

Cash Position 15%

Order intake 40%

Revenue 40%

Relative TSR 20%

76 Ceres Annual Report 2025

Corporate governance

Executive Directors’ Remuneration Policy

Remuneration Policy

The Directors’ Remuneration Policy was approved at the 2024 AGM and remains in effect until the 2027 AGM. For ease of reference, the Policy is set out below.

Executive Directors’ Remuneration Policy – fixed remuneration

Component Purpose Operation Opportunity

Performance

metrics

Base salary To provide appropriate

remuneration based

on role remit and

contribution to

leadership and Company

strategy.

Salaries are reviewed at least annually and take into

account a range of factors, including:

• Market competitiveness for Executives in companies

of a similar size and industry sector;

• Size and scope of the role;

• Skills and experience of the individual;

• Performance of the Group and of the individual;

• Wider market and economic conditions; and

• Internal relativities, including the level of increases

being made across Ceres.

There is no defined maximum salary.

The Committee’s normal approach is to initially consider salary increases in line

with the rest of the Company.

Higher increases may be made if the Committee considers it appropriate, for

example to reflect:

• Shortfall to market;

• An increase in the scale, scope, or responsibility of the individual’s role;

• Development of the individual within the role;

• Significant market movement; and

• Where the organisation has undergone significant change.

None.

Pension To provide an

opportunity for

Executives and

employees to build up

income on retirement.

Executives participate in the Group Personal Pension

(“GPP”) plan, or a similar cash allowance is provided

for those exceeding HMRC pension allowances.

In certain jurisdictions, more bespoke pension

arrangements may be provided. In such circumstances,

the Committee will give appropriate consideration to

local employment legislation, market practices and the

cost of the arrangement.

The maximum annual pension contribution/cash allowance for Executive

Directors is in line with the rate for all employees at up to 8% in the UK.

Non‑UK‑based Executive Directors will be aligned with local market rates.

None.

Benefits To provide market

competitive employee

benefits.

Benefits are reviewed and benchmarked periodically

to ensure they remain affordable and competitive.

Benefits include, but are not limited to, health‑related

benefits, Sharesave Scheme and insurances.

Where relevant, additional benefits may be offered if

considered appropriate and reasonable by the Committee,

such as assistance with the costs of relocation.

There is no defined maximum.

Benefits plans are set at reasonable levels in order to be market competitive

for their local jurisdiction and are dependent on individual circumstances.

While the Committee has not set an overall level of benefit provision, the

Committee keeps the Benefit Policy and benefit levels under review.

None.

Directors’ Remuneration Report continued

77Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

Executive Directors’ Remuneration Policy – variable remuneration

Component Purpose Operation Opportunity Performance metrics

Annual

bonus

To incentivise and

reward strong

performance against

annual business goals

and objectives.

The Committee will set performance metrics,

weightings and targets at the start of each year.

The Committee considers the extent to which these

have been achieved and determines the award level,

after the year end.

Recovery and withholding provisions apply to

awards earned.

The bonus is paid in cash at the end of the relevant

financial year.

The annual bonus is subject to malus and

clawback provision.

The maximum award is 200%

of salary. Target and threshold

levels are set at 60% and 25%

of maximum, respectively.

Using a weighted scorecard approach, performance is measured

against agreed metrics. Whilst not an exclusive list, examples

can include covering financial performance, commercial scale,

licensee success and technological advancement, as well as

other strategic and ESG measures.

No bonuses are paid for below threshold performance. The

Committee may award any amount between zero and 100%

of the maximum opportunity.

The Committee retains the discretion to adjust the bonus

if it considers that the formulaic outcome does not reflect

underlying business performance or the experience

of shareholders.

Long Term

Incentive

Plan

(“LTIP”)

To engage and motivate

Executive Directors to

deliver on KPIs that

support the long‑term

Company strategy

in order to deliver

long‑term returns to

shareholders.

An annual award of Ceres Power Holdings shares are

granted and subject to performance criteria over a

three‑year performance period.

An additional holding period of two years applies post

vesting.

The performance period normally starts at the

beginning of the financial year in which the date of

grant falls.

Award levels and performance conditions are reviewed

before each award cycle to ensure that they remain

appropriate.

Dividends (or equivalents) may be paid on vesting.

Unvested awards are subject to a malus and clawback

provision and vested awards are subject to clawback.

The annual maximum is 250%

of salary.

Threshold performance

results in 25% vesting, rising

to 100% vesting for maximum

performance.

The vesting of awards is linked to agreed performance criteria,

which may include, but is not limited to:

• Financial performance;

• Licensee success;

• Key business and technology milestones; and

• Relative share price performance.

Metric weightings and targets may vary from year to year.

For each performance element, achievement of the threshold

performance level will result in no more than 25% of the

maximum award paying out. For achievement of the maximum

performance level, 100% of the maximum pays out. Normally,

there is straight‑line vesting between these points.

The Committee shall determine the extent to which the

performance measures have been met. The Committee has

discretion to amend the performance criteria in exceptional

circumstances if it considers it appropriate to do so with

appropriate justification and disclosure.

The Committee (acting fairly and reasonably) has the

ability to exercise discretion in adjusting the formulaic

outcome of incentives to ensure the outcome is reflective

of the performance of the Company and the individual over

the period.

78 Ceres Annual Report 2025

Corporate governance

Remuneration Policy continued

Other elements of Executive Director Remuneration Policy

Component Purpose Operation Opportunity

Performance

metrics

Shareholding

guidelines

To ensure sustained alignment between

the interests of the Executive Directors

and shareholders.

CEO: 200% of salary.

Other Executive Directors: 150%.

There is an expectation that this shareholding requirement will be built over a period of

five years.

None. None.

Post-

employment

shareholding

guidelines

Ensures there is an appropriate amount of

“tail risk” for Executive Directors post cessation

of employment.

CEO: 200% of salary.

Other Executive Directors: 150%.

Expected to retain shares of value equal to the minimum shareholding requirement for

two years post departure from the Company.

In cases where the individual has not had sufficient time to build up their share ownership

to meet the minimum shareholding requirement prior to their departure from the

Company, the post‑employment shareholding requirement will be based on their actual

level of shareholding on departure.

The Committee has discretion to vary or waive part or all of the post‑employment

shareholding requirement in exceptional circumstances.

None. None.

Malus and

clawback

The Committee, in its absolute discretion, may apply malus and/or clawback at any time prior to the vesting of an award that could reduce, cancel or impose further conditions

and/or apply clawback at any time within three years of payment to receive back some or all of the vesting awards or paid bonus.

Whilst not an exhaustive list, malus and/or clawback would apply to variable pay in certain specified circumstances including:

• Misconduct;

• Material misstatement or restatement of financial results affecting the assessment of a performance condition; or

• Where there has been an error or inaccuracy relating to the calculation or determination of variable pay.

Executive

Director

service

agreements

All Executive Directors have service agreements that terminate on six months’ notice.

Service contracts for new Executive Directors should not contain terms that are materially different from those summarised in this section or contained in the policy.

• Notice or contract periods should be one year or less;

• The Company may terminate the contract at any time with immediate effect and pay a sum in lieu of notice;

• The Company has the right to place an Executive Director on garden leave; and

• The Company may terminate the contract summarily in particular defined circumstances without further payment, such as gross misconduct.

Directors’ Remuneration Report continued

Executive Directors’ Remuneration Policy continued

79Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

Component Purpose Operation Opportunity

Performance

metrics

Approach to

recruitment

remuneration

for Executive

Directors

Typically, new Executive Directors’ ongoing remuneration will be set in a manner consistent with the Remuneration Policy.

When a new Executive Director is recruited, the Committee may make an award to buy out variable remuneration arrangements forfeited on leaving a previous employer

(accounting for form of award, value forfeit, performance conditions, time over which the award would have vested).

Consistent with the UK Corporate Governance Code, the Committee would intend to pay no more than it believes is necessary to secure the required talent.

The maximum level of variable pay that may be awarded to new Executive Directors (excluding buy‑out arrangements) in respect of their recruitment will be in line with the

maximum level of variable pay as outlined in the Remuneration Policy.

The Committee will ensure such awards are linked to the achievement of appropriate and challenging performance measures. Appropriate and reasonable costs and support

would be covered if the recruitment requires relocation of the individual.

Principles of

payment for

loss of office

for Executive

Directors

The Company approach to determining payment for loss of office will normally be guided by the following principles:

• The Committee shall seek to apply the principle of mitigation where possible, as well as seeking to find an outcome that is in the best interests of the Company and

shareholders as a whole, taking into account the specific circumstances;

• Relevant contractual obligations, as set out above, shall be observed or taken into account;

• The Committee reserves the right to make additional exit payments where such payments are made in good faith to satisfy an existing legal obligation (or by way of damages

for breach of any such obligation) or to settle or compromise any claim or costs arising in connection with the employment of an Executive Director or their termination, or to

make a modest provision in respect of legal costs and/or outplacement fees;

• No awards should vest where an individual has been dismissed for cause;

• The treatment of outstanding variable remuneration shall be as determined by the relevant plan rules; and

• Any payments for loss of office shall only be made to the extent that such payments are consistent with this Policy.

80 Ceres Annual Report 2025

Corporate governance

Minimum

£545,900

100%

29%

19%

16%

32%

36%

29%

40%

45%

55%

Target

£1,946,700

Maximum

£2,873,700

Maximum (including

share price growth)

£3,517,450

Remuneration Policy continued

Scenario charts

Phil Caldwell, CEO

Stuart Paynter, CFO

Fixed pay Annual bonus Long-term Incentive Plans

The table below outlines the assumptions associated with the scenario charts above.

Performance scenario Details of assumptions

Minimum (fixed

remuneration)

• Comprised of base salary, benefits and pension, i.e. fixed remuneration.

There is no bonus award and no vesting under the LTIP;

• Base salary with effect from 1 January 2026;

• Benefits as they applied on 31 December 2025 and are set out in the

single figure table in the Annual Report on Remuneration; and

• Pension equivalent up to 8% of base salary.

Target

• Comprised of fixed remuneration, annual bonus and vesting under

the LTIP;

• For on‑target performance, it assumes payment of 60% of the

maximum opportunity for the annual bonus award (90% for the

CEO and CFO); and

• For on‑target performance, it assumes payment of 60% of the

maximum opportunity for the vesting of the LTIP (150% for the

CEO and 120% for the CFO).

Maximum • Comprised of fixed remuneration, annual bonus and vesting under

the LTIP;

• For maximum performance, it assumes payment of 100% of the

maximum opportunity for the annual bonus award (150% for the

CEO and CFO); and

• For maximum performance, it assumes payment of 100% of the

maximum opportunity for the vesting of the LTIP (250% for the

CEO and 200% for the CFO).

Maximum + 50%

increase in share

price

• Comprised of fixed remuneration, annual bonus and vesting under

the LTIP;

• For maximum performance, it assumes payment of 100% of the

maximum opportunity for the annual bonus award (150% for the CEO

and CFO); and

• For maximum performance, it assumes payment of 100% of the

maximum opportunity for the vesting of the LTIP (250% for the

CEO and 200% for the CFO), plus an assumption of 50% share price

appreciation during the performance period.

Directors’ Remuneration Report continued

Executive Directors’ Remuneration Policy continued

£382,130

£1,254,540

£1,831,340

£2,191,840

Minimum

100%

31%

34%

21%

39%

18%

33%

48%

Target Maximum

Maximum (including

share price growth)

81Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

Non-Executive Directors’ Remuneration Policy

Component Operation Opportunity

Performance

metrics

To attract and retain

Non-Executive

Directors of a high

calibre that have

the expertise,

responsibility

and the time

commitment

to be able to

contribute to an

effective Board

and deliver long-

term sustainable

shareholder value

Fees are normally reviewed on an

annual basis and amended to reflect

market positioning and any change in

responsibilities on a needed basis.

Directors have formal letters

of appointment that can be

terminated on one month’s

written notice by either side.

The Committee recommends the

remuneration of the Chair to the

Board. Fees paid to Non‑Executive

Directors are determined by the

Executive Directors and approved by

the Board as a whole.

The Chair and Non‑Executive

Directors receive no other pay or

benefits, except for reimbursement

of expenses, and do not participate in

incentive plans.

The Company covers the costs

of attending meetings and

Non‑Executive Directors may be

reimbursed for any business expenses

incurred in fulfilling their roles.

The Chair is paid

a single fee for all

responsibilities.

The Non‑

Executive

Directors are paid

a basic fee, which

encompasses

membership

of one Board

Committee.

Committee Chairs

and those having

other additional

responsibilities

may be paid an

additional fee.

None.

Remuneration in wider context

When reviewing Executive Director remuneration, the Committee takes into consideration our

wider workforce to ensure that our total reward offering is compelling and aligned to our business

performance, whilst supporting a culture that is inclusive and in which our people feel valued.

The Committee also takes into account the following principles:

Area Our philosophy and approach

Clarity and

simplicity

Our remuneration principles and arrangements for the Executive

Directors are set out clearly in our Remuneration Policy and are closely

aligned with the wider workforce arrangements, particularly with regard

to the fixed pay elements. All employees are eligible to participate in a

discretionary bonus scheme and are invited to invest in the long‑term

success of the business through our employee share save scheme

or LTIP programme. The Committee will continue to consult with

shareholders and employees to ensure our remuneration principles

and arrangements are understood and supported.

Risk We operate minimum shareholding requirements, post‑vesting holding

arrangement as well as malus and clawback provisions to manage

risk and ensure strong alignment to business performance and

shareholder interests.

Predictability and

proportionality

Our Remuneration Policy is based on the principles of modest base

pay and defines clear maximum limits for variable based pay, with

pay‑outs under these elements being subject to meeting clear

performance criteria which align to our business strategy and publicly

stated ambitions.

Alignment to

culture

Ceres’ purpose, strategy and values continue to be directly reflected

in our Remuneration Policy and the performance criteria set under the

annual bonus and long‑term incentive schemes.

82 Ceres Annual Report 2025

Corporate governance

Total remuneration for Executive Directors

The table below sets out a single figure for the total remuneration received by the Executive

Directors for the year ended 31 December 2025.

Phil Caldwell

(CEO)

Stuart Paynter

(CFO)

2025

(£’000)

2024

(£’000)

2025

(£’000)

2024

(£’000)

Salary

500 372 350 88

Benefits

1 — 1 —

Pension

30 25 24 4

Total fixed remuneration 531 397 375 92

Annual bonus 256 500 179 80

LTI P

121 86 — —

Total variable remuneration 377 586 179 80

Total remuneration 908 983 554 172

1. Stuart Paynter joined the Company on 1 October 2024.

2. Phil Caldwell’s salary was adjusted in 2025 by 34% as reported in the 2024 Annual Report and Accounts.

3. Benefits comprise taxable benefits provided during the year. For 2025, these include a healthcare cash plan and an

electric vehicle provided under a salary sacrifice arrangement.

4. Represents a cash allowance in lieu of a pension.

5. LTIP: the amount reported for 2025 relates to the 2023 LTIP scheme, which will vest on 4 May 2026 at 25%. The

value of the LTIP is calculated as a product of the number of shares of the original award multiplied by the vesting

percentage and the market price of ordinary shares at the end of the performance period, 31 December 2025.

As at 31 December 2025, none of the value of the award vesting was attributable to share price appreciation.

The following sections provide further detail on the figures in the above table, including the

underlying calculations and assumptions and the Committee’s performance assessments for

variable remuneration.

Base salary

When reviewing Executive Director salaries, in line with our Policy the Committee will take

into account a range of factors, including:

• Market competitiveness for Executives in companies of a similar size and industry sector;

• Size and scope of the role;

• Skills and experience of the individual;

• Performance of the Group and of the individual;

• Wider market and economic conditions; and

• Internal relativities, including the level of increases being made across Ceres.

As outlined in last year’s Directors’ Remuneration Report, the Committee approved an increase

to the CEO’s base salary in 2024. This adjustment addressed a long‑standing pay gap relative to

peers of a comparable size within the FTSE 250 and FTSE SmallCap, and recognised CEO Phil

Caldwell’s continued strong leadership in delivering record results for the Company in 2024.

Following the 2025 AGM, the Committee engaged with shareholders who voted against the

Directors’ Remuneration Report. In response to their feedback, the Committee has committed

to providing enhanced disclosures in future reports, specifically regarding the peer group

comparators used in any salary benchmarking exercises.

In 2025, the Committee approved base salary increases of 3% for both Executive Director roles,

aligned with the wider workforce salary budget. These increases took effect on 1 January 2026.

2025 annual bonus

The annual bonus is intended to reward the delivery of short‑term targets derived from the

business plan and annual budget. Each December, the Board approves the forthcoming year’s

annual budget and business plan. The Committee uses this to set annual objectives and bonus

targets. The Committee incentivises performance by setting target objectives (capable of

delivering up to 100%) with further stretch opportunities linked to the commercial and financial

KPIs (capable of delivering a 150% maximum result). Minimum threshold requirements are also

established (at a 25% outturn). Any outcome below the minimum threshold requirements resulted

in a 0% achievement for the given objective.

Annual Remuneration Report (audited)

Directors’ Remuneration Report continued

83Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

In assessing performance, the Committee uses a formulaic approach to reviewing outcomes and deliverables against the KPIs set at the start of the year. The Committee then considers the wider

macroeconomic environment to assess the extent to which this may have affected outcomes.

Measure Description

Weighting Min. Threshold

(25%)

On Target

(60%)

Maximum

(100%) Result/Achievement

Weighted

outcome

Commercial

scale

Order intake 20% £20m £42m £80m

Order intake in‑year achieved at 42% of target 8.3%

New partners 10% 2 system licensees 1 stack licensee 2 stack licensees 1 new stack licence = 60% achievement 6.0%

Financial

performance

Revenue 20% £40m £60m £80m Revenue of £32.6m = 0% achievement 0%

Gross margin 5% 70% 74% 80% Gross margin of 70% = 25% achievement 1.3%

Cash Position 10% £75m £90m £100m Cash position of £83.3m = 44% achievement 4.4%

Licensees to

succeed

Partner time to royalties 10% See note 1 75% factory milestones on track = 60% achievement 6%

Product and

Technology

Market leading solid

oxide products

5% See note 2 new product gates delayed by 3 months+ = 0%

achievement

Improved lifetime and

cost

5% See note 3 80% of improved lifetime and cost targets met = 37%

achievement

1.9%

Scale maturity

demonstrated in SOEC

5% See note 4 Strategic deprioritisation of SOEC = 0% achievement 0%

ESG

Net zero strategy 5% See note 5 6% reduction in Scope 1+2 emissions = 60% achievement 3%

Culture, engagement

and retention

5% See note 6 Employee engagement score of 72% plus retention rate of

91% (excluding redundancies) = 68% achievement

3.4%

Overall bonus scorecard outcome 34.3%

Notes:

1. Partner time to royalties was assessed against key factory production milestones and timelines agreed at the start of the year with each of our manufacturing partners: Doosan, Delta and DENSO. Good progress was achieved with all three

partners by year end. The Bosch exit removed the milestones associated with that contract.

2. Market leading solid oxide products were assessed against the development gates and milestones associated with our product roadmap. Although strong progress was made, new product milestone gates were delayed by more than three

months during the year.

3. Improved lifetime and cost assessments were measured against ambitious targets for cell lifetime and cost metrics related to our new product development. Good progress was achieved, with 80% of targets met.

4. Scale maturity demonstrated in SOEC was assessed based on the readiness of the SOEC Stack Array Module (SAM) and the SAM Balance of Plant Module (SBM) for hot commissioning. SOEC development was strategically deprioritised

during 2025.

5. Net zero strategy performance was assessed against a stretch target of 3% reduction in Scope 1 and 2, and 8% in Scope 3 emissions. Target was exceeded for Scope 1+2 emissions at a 6% reduction, and although an absolute reduction

in Scope 3 emissions was also delivered, reduction in intensity was offset by reductions in revenue.

6. The culture, engagement and retention KPI assessed employee engagement through pulse surveys (resulting in a 72% engagement rate), and an employee retention rate of >90% (excluding redundancies).

The Committee did not seek to exercise its discretion to alter the outcome of the of the bonus scorecard assessment. Accordingly, the Committee determined the final outcome to be 34.3%

of maximum, resulting in a £255,722 bonus award for Phil Caldwell, and a £179,005 bonus award for Stuart Paynter.

84 Ceres Annual Report 2025

Corporate governance

Total remuneration for Executive Directors continued

Long Term Incentive Plan vesting: 2023 LTIP

In May 2023, Phil Caldwell was granted a conditional share

award under the 2023 LTIP of 250% of salary.

In determining the vesting outcome, the Committee considered

Ceres’ performance over the three‑year period from 1

January 2023 to 31 December 2025, based on the following

performance criteria:

• Relative total shareholder return (“TSR”): measured against

the performance of the FTSE 250 Index and the Solactive

Hydrogen Economy Index on a 50:50 basis with threshold

vesting at Ceres ordinary share (CWR) value performance

equivalent to the median performance level for each index,

and maximum vesting at the upper quartile performance

level for each index. CWR TSR did not perform as strongly

as the median of either index over the period and therefore

the performance criteria was not met.

• Cumulative revenue and income: the target for cumulative

revenue and income was set by the Committee based on

the five‑year business plan for 2023 onwards, which saw a

minimum threshold of £120 million and a maximum threshold

of >£200 million. Despite a strong overall performance, total

cumulative revenue and income at £108 million fell short

of the minimum threshold and therefore the performance

criteria was not met.

• Order intake: the target for order intake was set at a

threshold value of £100 million and a maximum value of

>£140 million. The total order intake value achieved over

the three‑year period was £159 million, and therefore the

performance condition was met in full and achieved 100% for

this metric.

• Partner capacity: this metric contemplated a threshold of

publicly declared production capacity of 500MW across

Ceres’ partners, with maximum vesting at >1GW. Publicly

declared production capacity was below 500MW, therefore

this performance criteria was not met.

Performance condition

% of the award based

on performance condition Result during performance period

Weighting x

achievement

Relative total shareholder return

CWR performance vs FTSE 250 index

and the Solactive Hydrogen Economy

Index on a 50:50 basis. Threshold

vesting at median performance.

25% Measured at the conclusion of the three‑

year period on 31 December 2025, median

performance for the FTSE 250 Index was +5%

and the Solactive Hydrogen Economy Index was

+8%.

The TSR performance of CWR was below

median for both comparator indices resulting in

an achievement level of 0%.

Cumulative revenue and income

Achievement of cumulative revenue

and income in the three years from 1

January 2023 to 31 December 2025 of

greater than £120 million.

25% Cumulative revenue and income of £108 million

was achieved over the three‑year period. This

resulted in an achievement level of 0%.

Order intake

Achievement of cumulative income in

the three years from 1 January 2023

to 31 December 2025 of greater than

£100 million.

25% Cumulative order intake of £158.5 million was

achieved over the three‑year period. This

resulted in the maximum achievement level at

over £140 million of 100%.

25%

Partner capacity

Publicly declared partner capacity in

excess of 500MW by 31 December

2025.

25% Publicly declared production capacity was below

500MW. The Committee did not exercise any

discretion to amend the performance condition

and therefore this resulted in an achievement

level of 0%.

Overall LTIP performance criteria outcome 25%

1. Income is defined as the sum of revenue and grant income in the annual financial statements.

Based on the overall outcome of LTIP performance criteria, the Committee approved a total result against the performance

criteria of 25%. Consequently, of the 227,273 share options granted to Phil Caldwell in 2023, 56,818 will vest on 4 May 2026.

Directors’ Remuneration Report continued

Annual Remuneration Report (audited) continued

85Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

2025 LTIP

In 2025, the Executive Directors were granted conditional share awards of 175% and 140% of

base salary for the CEO and CFO respectively under the LTIP scheme, as set out in the table

below. These awards were reduced by 30% from the original grant levels of 250% and 200%

of base salary for the CEO and CFO, reflecting the share price performance following the

withdrawal of Bosch as a strategic partner in early 2025, and as previously signalled in the 2025

Directors’ Remuneration Report.

Scheme type

Type of

interest

awarded

End of

performance

period Target award

Minimum

performance

(% of shares

awarded)

Maximum

performance

(% of shares

of target award)

LTI P Performance

31 December

2027

Phil Caldwell:

1,250,893 London‑

listed ordinary shares,

equivalent to 1.75x

base salary

Stuart Paynter:

700,500 London‑

listed ordinary shares,

equivalent to 1.4x

base salary

0% 100%

1. LTIP awards in 2025 were reduced by 30% reflecting share price performance at the time of grant, ordinarily being

2.5x base salary for the CEO and 2x base salary for the CFO.

2. The awards were based on the closing share price on the day immediately prior to the grant date (26 June 2025),

which was £0.7995 for ordinary shares. When determining the grant price, the Committee compared this prior day

closing price with the customary three month volume weighted average price of £0.6816 per share. Given the share

price performance, the higher of the two values was selected. This resulted in a lower overall allocation of share

options.

The measures and weightings applying to the 2025 LTIP awards were:

Performance criteria

Minimum

threshold (25%)

Target threshold

(60%)

Maximum threshold

(100%) Weighting

Cumulative revenue

and other income

£m 40%

Order intake

£m 40%

Relative TSR

Median TSR 62.5 %ile Upper quartile 20%

1. Cumulative revenue and other income comprise stretching targets related the cumulative amounts achieved over

the three‑year period measured in £m. Other income includes grant income but excludes R&D expenditure credits.

2. Order intake will be measured in the cumulative value of orders received over the three‑year performance period

in £m, and have been set at levels designed to drive high performance in this area.

3. Relative total shareholder return of the Company (“TSR”) will be measured on a 50:50 ratio relative to the TSR

performance of the FTSE 250 Index (excluding investment funds and financial services businesses) and the Solactive

Hydrogen Economy Index, of which Ceres is a constituent member.

Vesting under each performance criteria is assessed independently, with the vesting outcome

ranging from 0% to 100% of maximum and applied on a pro rata straight‑line basis between the

minimum and target threshold and the target and maximum threshold.

Disclosing the threshold values for cumulative revenue and other income as well as order intake

could be construed to constitute financial guidance, which is not the Company’s intention, and is

considered to be commercially sensitive. Full details of the performance criteria will be disclosed

following the end of the performance period in the relevant Directors’ Remuneration Report.

Non-Executive Directors’ remuneration (audited)

The table below sets out the remuneration receivable by the Non‑Executive Directors in respect

of the year ended 31 December 2025, alongside comparative figures for the prior year.

31 Dec 2025

(£)

31 Dec 2024

(£)

Non-Executive Directors

Warren Finegold 180,000 180,000

William Tudor Brown 70,000 70,000

Julia King

95,833 70,000

Trine Borum Bojsen 60,000 60,000

Caroline Brown 65,000 61,456

Karen Bomba 60,000 60,000

Nannan Sun 55,000 55,000

Former Non-Executive Directors

Uwe Glock

7,615 55,000

1. Julia King received backdated pay of £15,833 in 2025 relating to her appointment as Senior Independent Director

on 18 May 2023.

2. Uwe Glock stepped down from the Board on 19 February 2025.

Non-Executive Directors’ fees for 2026

The Non‑Executive Directors’ fee structure for 2026 is set out in the table below. Fees for the

Non‑Executive Directors (other than the Chair of the Board) are determined by the Chair and the

Executive Directors. A 3% fee increase has been applied from 1 January 2026 in line with the

wider workforce salary budget. The fee structure is reviewed but not necessarily increased on

an annual basis.

Position 2026 2025

Chair of the Board £185,500 £180,000

Non‑Executive Director fee (includes one Committee membership) £56,650 £55,000

Senior Independent Director £10,300 £10,000

Committee Chair £10,300 £10,000

Additional Committee membership £5,150 £5,000

86 Ceres Annual Report 2025

Corporate governance

Directors’ shareholding (audited)

Executive Directors’ share plan interests

The following table sets out the Executive Directors’ interests in ordinary shares under the Company’s share plans.

Phil Caldwell 31 Dec 2024 Granted Exercised Lapsed 31 Dec 2025

Exercise price

£ Exercise period

LTI P 358,593 358,593 0.10 Sep 2019 – Sep 2026

LTI P 87,000 87,000 0.10 Oct 2020 – Oct 2027

LTI P 138,530 138,530 0.10 Oct 2021 – Oct 2028

LTI P 71,148 71,148 0.10 Oct 2022 – Oct 2029

LTI P 50,432 50,432 0.10 Mar 2025 – Mar 2032

LTI P

227,273 227,273 0.10 May 2026 – May 2033

LTI P 627,530 627,530 0.10 May 2027 – May 2034

LTI P 1,250,893 1,250,893 0.10

Jun 2028 ‑ Jun 2035

Sharesave (approved) 1,510 (1,510) — 5.96 Jun 2025 – Dec 2025

Sharesave (approved) 2,877 2,877 3.13 Jun 2026 – Dec 2026

Sharesave (approved) 12,930 12,930 0.71 Jul 2028 – Jan 2028

1,564,893 1,263,823 (1,510) 2,827,206

Stuart Paynter 31 Dec 2024 Granted Exercised Lapsed 31 Dec 2025

Exercise price

£ Exercise period

LTI P 160,709 160,709 0.10 Oct 2027 – Oct 2034

LTI P 700,500 700,500 0.10 Jun 2028 – Jun 2035

160,709 700,500 861,209

Notes:

1. Of the 227,273 share options granted to Phil Caldwell in 2023, 56,818 will vest on 4 May 2026, with 170,455 share options due to lapse at that date.

Minimum shareholding requirements

The CEO and CFO are expected to build up to a minimum shareholding requirement (“MSR”) of 200% and 150% respectively within five years of their appointment. The MSR for 2025 is set

out opposite. Shares that count towards the MSR are ordinary shares beneficially held by the Executive Director and their connected persons and share awards that are not subject to further

performance conditions. Share awards included are the LTIP performance shares and the employee share save as you earn (“SAYE”) shares.

A post‑employment shareholding requirement came into effect for the Executive Directors from 2024 onwards as part of the revised Executive Director Remuneration Policy. For two years

following cessation of employment, Executive Directors are expected to retain shares of value equal to the MSR that applied during employment, or, in cases where the individual has not had

sufficient time to build up shares to meet their guideline, the actual level of shareholding at cessation.

Directors’ Remuneration Report continued

Annual Remuneration Report (audited) continued

87Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

Directors’ share interests

Ordinary

shares held at

31 December

2025

Vested and

exercisable

Unvested and

subject to

performance

conditions

Value of shares

counted

towards

MSR as a % of

base pay

Executive Directors

Phil Caldwell 464,235 705,703 2,121,503 498%

Stuart Paynter 47,682 — 861,209 29%

Non-Executive Directors

Warren Finegold 30,056

William Tudor Brown 15,000

Julia King 30,200

Karen Bomba 12,121

Loss of office payments to Directors

There were no payments for loss of office made to Executive Directors during the year.

Malus and clawback

Provisions relating to malus and clawback are in place with respect to the operation of the

annual bonus and the Long‑term Incentive Plan awards. The operation of these provisions,

the circumstances and time periods in which they would be employed are detailed in the

Remuneration Policy on page 76. The Committee considers three years to be an appropriate

length of time in which the circumstances which would precipitate the operation of clawback

provisions to be identified. These provisions were not employed during the year under review.

CEO to employee pay ratio (Option B methodology)

The table below shows the CEO pay ratios for financial years ending December 2021 through

December 2025 using method B (gender pay gap methodology).

Year Method

25th percentile

pay ratio

50th percentile

pay ratio

75th percentile

pay ratio

2025 B 23.1 18.0 12.3

2024 B 24.8 18.4 13.7

2023 B 13.0 10.2 7.5

2022 B 18.3 15.7 8.2

2021 B 16.5 11.9 8.5

1. CEO to employee pay ratio (Option B methodology) is shown from FY2021 onwards.

Method B was selected as it made use of robust readily available data reported as part of

our gender pay reporting requirements. Total pay was calculated for a sample of employees

at each quartile to ensure that the three identified employees were suitably representative of

their quartile. A full‑time equivalent total pay figure was calculated for each identified employee

within their respective quartile using the single‑figure methodology.

The decrease in the CEO to employee pay ratio in 2025 is directly attributable to the size of the

CEO bonus award (34% in 2025 vs 90% in 2024). The Committee is satisfied that the pay ratios

are consistent with the Company’s pay, reward, and progression policies.

The following table sets out the base salary and total pay figures for the employees identified

at each quartile.

Year Element of pay

25th percentile

employee

Median

employee

75th percentile

employee

2025 Base salary (FTE) £38,520 £52,822 £68,089

Total pay (FTE) £44,815 £57,496 £84,018

2024 Base salary (FTE) £37,338 £50,000 £65,869

Total pay (FTE) £40,325 £54,500 £73,138

Historic TSR performance and CEO remuneration

The graph below compares the TSR performance of a share of Ceres over the past ten years

with the TSR of the FTSE 250 Index, the FTSE SmallCap Index and the FTSE AIM 100,

rebased to 100 at the start of the period. Since the move to the Main Market in June 2023, the

Committee considers the FTSE 250 and FTSE SmallCap Indices appropriate reference points

for the share price performance of the Company. Before moving to the Main Market, Ceres was

a constituent of the AIM market and performance against the FTSE AIM 100 Index over this

period of time is provided as additional reference.

TSR of Ceres Power vs the FTSE 250 Index, FTSE SmallCap Index and FTSE AIM 100 Index

2022

Ceres Power Holdings plc FTSE AIM 100 Index

FTSE 250 Index FTSE SmallCap index

500

1,000

1,500

2,000

2,500

3,000

2016 2017 2018 2019 2020 2021 2023 2024 2025 2026

88 Ceres Annual Report 2025

Corporate governance

Directors’ shareholding (audited) continued

Historic TSR performance and CEO remuneration continued

TSR of Ceres Power vs the FTSE 250 Index, FTSE SmallCap Index and FTSE AIM 100 Index continued

The table below shows the historic single total figure of remuneration for Phil Caldwell, who was appointed CEO on 2 September 2013 (£’000).

Year 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Total remuneration 290 305 320 424 566 503 563 583 983 908

Bonus (% of max) 80% 90% 98% 86% 84% 43% 35% 44% 90% 34.3%

LTIP (% of max)

86% 100% 100% 44% 0% 40% 25%

1. The LTIP scheme was established in 2016 and first vested in 2019.

Annual percentage change in remuneration of Directors and employees

The table below shows the annual percentage change in remuneration during 2025 for the Executive and Non‑Executive Directors relative to Ceres employees. Salaries and pension increase for

employees is calculated based on average employee numbers after removing Directors. Bonus represents the actual (decrease)/increase after removing Directors’ bonus.

2025 change (%) 2024 change (%) 2023 change (%)

Salary/fee Pension

Bonus Salary/fee Pension Bonus Salary/fee Pension Bonus

Employees 13% 11% ‑51% 9% 10% 42% 13% 14% 30%

Executive Directors

Phil Caldwell 34% 22%

‑49% 6% ‑12% 124% 0% 0% 26%

Stuart Paynter

0% 33% ‑44% — — — — — —

Non-Executive Directors

Warren Finegold 0% — — 20% — — 25% — —

William Tudor Brown 0% — — 0% — — 30% — —

Julia King 0% — — 0% — — 34% — —

Trine Borum Bojsen 0% — — 0% — — 38% — —

Caroline Brown 0% — — 8% — — N /A — —

Karen Bomba 0% — — 0% — — N /A — —

Uwe Glock

0% — — 0% — — 0% — —

Nannan Sun 0% — — 0% — — N/A — —

1. The Executive Directors opted out of the Group pension scheme in favour of a cash in lieu of pension allowance.

2. Stuart Paynter’s 2024 remuneration has been annualised to a 12‑month basis to ensure the comparison is meaningful.

3. Non‑Executive Director fees have been annualised to give a more meaningful comparison.

4. Uwe Glock stepped down from the Board on 19 February 2025.

5. Annual percentage change in remuneration of Directors and employees is shown from FY2023 onwards.

Directors’ Remuneration Report continued

Annual Remuneration Report (audited) continued

89Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

Relative importance of spend on pay

Under the regulations, companies need to illustrate the relative importance of spend on pay

by disclosing the total employee remuneration and returns to shareholders (i.e. dividends and

share buybacks) in the reporting year and prior year. As the Company is still pre‑profit, there

is no relevant data relating to returns to shareholders. Therefore, other Company metrics have

been used in the table below to show employee remuneration in the context of overall business

activities. In order to provide context for these figures, total expenditure is also shown.

2025 2024 Change (%)

Total employee remuneration (£’000) 33,592 37,278 (9.9%)

Total expenditure (£’000)

68,333 77,024 (11.3%)

1. Total expenditure = adjusted EBITDA less revenue and other operating income.

Statement of planned implementation of Policy in 2026

Fixed pay

Salary

The increase to current Executive Directors’ base pay for 2026 of 3% mirrors the budgeted base

pay increases for the wider workforce. The Committee recognises that higher base pay awards

will be required in the future to maintain a comparable position with industry and market peers,

but these will be subject to a strong underlying business performance.

£’000

2026 2025

Change

from 2025 Base pay

Change

from 2024 Base pay

Phil Caldwell 3% 515 34% 500

Stuart Paynter 3% 361 0% 350

Benefits

In 2026 the Executive Directors have been offered and have accepted enrolment on a private

medical insurance plan as part of an improvement in benefits offered to the workforce as a

whole. They will also participate in a salary sacrifice scheme for the provision of an electric

vehicle.

Pension

Executive Directors’ pensions remain aligned with the wider workforce at up to 8% of base

salary.

Pay for performance

Annual bonus

There are no proposed changes to the operation of the annual bonus plan with the target

threshold set at 60% of maximum:

Minimum Target annual bonus

(% base salary)

Phil Caldwell Stuart Paynter

Target 90% 90%

Maximum 150% 150%

The construct of the bonus scorecard has been simplified for 2026 and comprises two

categories tightly aligned to Ceres’ strategic priorities as follows:

Metric Weighting Strategic alignment

Commercial scale

Order intake 30% Partner orders during the year measured in £m to incentivise

and drive revenue growth

New partners 30%

Measured by licence agreements agreed in‑year to

incentivise and drive partner portfolio growth

Financial performance

Revenue 20% Stretching targets incentivising revenue growth

Gross margin 5% Measured in % margin achieved driving commercial execution

Cash position 15% Protection and improvement of Ceres’ cash position to

support long‑term sustainable growth measured in £m

The 2026 scorecard targets are commercially sensitive and are not intended to provide forward‑

looking performance guidance. Specific scorecard targets will be disclosed in subsequent

Directors’ Remuneration Reports when they are no longer deemed to be commercially sensitive.

90 Ceres Annual Report 2025

Corporate governance

Statement of planned implementation of Policy in 2026 continued

Pay for performance continued

2026 Long Term Incentive Plan

The Committee intends to make a conditional award of performance shares under the 2026 LTIP

to the Executive Directors with a maximum value of 250% and 200% of base salary for the CEO

and CFO respectively.

Performance will be measured over the three‑year period from 1 January 2026 to 31 December 2028.

The performance measures and their associated weightings are proposed as follows:

Financial performance Weighting Strategic alignment

Cumulative order intake 40% Incentivise and reward strong order intake over the three‑

year period performance period the year measured in

£million.

Cumulative revenue 40% Promote revenue growth through stretching performance

targets measured in £million .

Total shareholder return 20% Align performance directly with shareholder experience as

relative total shareholder return measured against two indexes

on a 50:50 basis: the FTSE 250 Index; and the Solactive

Hydrogen Economy Index as an industry specific comparator.

• Minimum – TSR Median

• Maximum – Upper quartile

The 2026 LTIP targets are commercially sensitive and are not intended to provide forward‑

looking performance guidance. Specific LTIP 2026 targets will be disclosed in subsequent

Directors’ Remuneration Reports when they are no longer deemed to be commercially sensitive.

Remuneration governance

Committee role and membership

These details are provided in the Remuneration and Nomination Committee report on page 67 of

the Annual Report.

External advisers

WTW were appointed as external independent advisers to the Committee during 2022. It

provided ongoing support to the Committee during 2025, consisting of general remuneration

consultancy services. The Committee is satisfied that the advice and services provided by WTW

have been objective and independent. WTW’s fees during 2025 amounted to £53,590.

In addition to this, Tapestry, the Company’s share scheme legal advisers, provided legal and

design support for the Company’s Long Term Incentive Plan 2025 Rules, as subsequently

approved by shareholders at the 2025 AGM, alongside general advice in relation to the

operation of the Company’s share schemes. Tapestry’s fees during 2025 amounted to £52,544.

Shareholder voting

The Company remains committed to ongoing shareholder dialogue and takes an active interest

in voting outcomes.

A resolution to approve the Directors’ Remuneration Policy as set out in the 2023 Annual

Report was passed at the Company’s 2024 AGM. A resolution to approve the 2024 Directors’

Remuneration Report was passed at the 2025 AGM, and the associated shareholder consultation

process is discussed on page 72. The results of the votes on these resolutions were as follows:

Number of votes Votes in favour Votes against Votes withheld Total votes

Directors’ Remuneration Policy

(2024 AGM)

115,147,741

(91.27%)

11,015,272

(8.73%)

32,803

(0.03%) 126,163,013

2024 Directors’ Remuneration

Report (2025 AGM)

91,703,893

(79.67%)

23,243,895

(20.33%)

96,512

(0.08%) 114,317,788

Directors’ Remuneration Report continued

Annual Remuneration Report (audited) continued

Committee membership

Julia King (Committee Chair)

Trine Borum Bojsen*

Warren Finegold

Phil Caldwell*

Stuart Paynter*

* Phil Caldwell and Trine Borum Bojsen will step down from the

Committee in 2026, and from February 2026 Stuart Paynter was

appointed as a member of the Committee.

91Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

ESG Committee report

The Committee ensures that the

Company’s ESG initiatives are

aligned with strategic objectives

and deliver measurable progress.”

Julia King

Chair of the ESG Committee

Introduction

I am pleased to present the ESG Committee Report for

the year ended 31 December 2025. ESG considerations are

embedded in the Company’s purpose, strategy and culture, and

remain a clear priority for the Board given their direct relevance

to long‑term value creation, risk management and the safety

and well‑being of our staff. The Committee supports the

Board by providing focused oversight of the Company’s ESG

performance, ensuring that initiatives are aligned with strategic

objectives and deliver measurable progress.

The Committee is supported by the Operational ESG

Committee, a cross‑functional group of senior leaders and

subject‑matter specialists. Their participation in Committee

meetings enables rapid feedback, strong alignment between

strategy and execution, and clear visibility of emerging ESG

linked risks and opportunities across the business. Participation

by the Employee Engagement Forum Chair also acts as a

valuable communication link between Committee members

and the workforce.

The Committee continues to mature in its operation and areas

of responsibility. The Group’s sustainability roadmap is now

well established, and the business is making solid progress

against key milestones. The Committee’s broad remit allows it

to maintain disciplined oversight while adapting its focus to the

evolving needs of the business and the wider ESG landscape.

Committee composition

In 2025, the Committee comprised three Non‑Executive

Directors, including the Employee Engagement Director (EED),

and the Chief Executive Officer, Phil Caldwell. The Chief

Financial Officer, Stuart Paynter, attended meetings throughout

the year and became a Committee member in February 2026,

succeeding Phil Caldwell.

As noted in the governance report, Trine Borum Bojsen will

step down as a Director and Committee member at the 2026

AGM and will not be replaced. I would like to thank Trine for

her excellent support and insight during her tenure as both

Committee member and Employee Engagement Director

(“EED”). I assumed the role of EED in September 2025 and will

continue to provide this direct link between the Committee and

the workforce.

Committee meetings are attended by a cross‑section of

senior leaders, subject‑matter specialists and employee

representatives, and an open invitation is extended to other

Board members.

Read more on our website

www.ceres.tech/sustainability

Find out more

92 Ceres Annual Report 2025

Corporate governance

Role of the Committee

The Committee oversees all matters relating to the Company’s

environmental and social strategies, associated governance

activities and related disclosures. It provides feedback and

recommendations to the Board and other Committees within

its remit. The Committees works closely with the Audit and

Risk Committee on issues of climate risk and integrity of

ESG‑related reporting, and the Remuneration and Nomination

Committee on ESG‑linked performance measures and

bonus targets.

The Committee oversees the work of the Operational

ESG Committee, chaired during 2025 by Mark Garrett

(Chief Operating Officer) and, following his retirement, by

Stuart Paynter (Chief Financial Officer). The Committee

provides advice, guidance and constructive challenge to

support the effective delivery of ESG priorities.

The Committee met five times during the year ended 31

December 2025, aligned to its reporting and oversight

responsibilities. Attendance is set out on page 54 of the

corporate governance report.

The full Terms of Reference for the Committee

can be found on our website at:

www.ceres.tech/who-we-are/corporate-governance

ESG Committee report continued

Committee activities

• Approved ESG targets and ESG linked remuneration metrics;

• Maintained oversight of ESG‑related risks and key

sustainability metrics;

• Reviewed and approved the Sustainability and ESG sections

of the Annual Report;

• Monitored progress against ESG objectives and external

ESG rankings;

• Reviewed TCFD disclosures and broader sustainability

reporting;

• Oversaw delivery of net zero strategy and SBTi alignment;

• Approved key ESG‑related policies and Code of Conduct;

• Approved the annual statement on Modern Slavery and

Human Trafficking;

• Deep dive reviews of Procurement/Supply Chain

sustainability, Health, Safety and Environment framework

and performance;

• Conducted Committee effectiveness review; and

• Undertook annual Terms of Reference update.

Year in review

At the start of the year, the Committee recommended the

2025 ESG KPIs and sustainability roadmap targets for Board

approval. These were incorporated into the Group’s incentive

programmes and Company objectives, as outlined in the

sustainability section of this Annual Report on pages 24 to 32.

The Committee maintained oversight of delivery of the 2025

ESG KPIs throughout the year and is pleased to report that

all environmental and governance objectives were achieved.

In the first year of implementation, the Company made strong

progress against its SBTi‑accredited strategy to achieve net

zero by 2050, and the business continues to advance its stack

recycling initiatives. Performance against social objectives

was more mixed: cultural engagement and community impact

targets were met, while employee turnover and diversity

metrics were adversely affected by the Group restructuring

undertaken during the year. The 2026 ESG objectives

have been designed to build on the successes of 2025 and

strengthen areas where performance can be improved.

The Committee recommended the Sustainability, TCFD and

ESG Committee reports for inclusion in the 2024 Annual

Report and Accounts, providing the Audit and Risk Committee

with appropriate assurance over the robustness of preparations.

The Committee also recommended the Ceres Sustainability

Report 2025 for Board approval.

The Ceres Sustainability Report 2025 is available on the Company’s website at:

www.ceres.tech/sustainability

TCFD reporting continued to mature during the year. The

Company reported its first financial analysis of climate‑related

risks, appropriate for a growth‑stage business, within the

Group’s Sustainability Report. Further enhancements,

particularly in relation to supply chain assessments, were

incorporated into the TCFD disclosures, which are detailed

on pages 28 to 30. Reflecting the increasing maturity of

reporting and the need for resource and timing efficiencies,

the Committee agreed that the annual Sustainability Report

would no longer be produced as a stand‑alone document,

with relevant information instead incorporated into the Annual

Report and published on the Group’s website.

The Committee continued to monitor both current and

emerging sustainability requirements. During the year,

I arranged for the Board to receive training delivered by a

specialist adviser from Berenberg, covering the evolving

global sustainability landscape from political and investor

perspectives, anticipated UK Sustainability Reporting Standards,

and the influence of international initiatives. The Committee

will continue to track developments to ensure the

Company remains well positioned to respond to changing

reporting expectations.

The Committee received regular updates from the Employee

Engagement Director, the Chair of the Employee Engagement

Forum and the Chief People Officer. Reporting focused

on employee engagement activities and metrics, including

satisfaction surveys, attrition rates and other indicators of

workforce morale and wellbeing.

Following the announcement of the restructuring in September,

reporting focused on engagement processes used during the

exercise. The Committee was satisfied that communications

were clear and that redundancies were conducted in line with

required processes and with appropriate sensitivity.

The Committee mandated an Employee Engagement deep

dive in early 2026 to review post‑restructure employee

engagement, noting that high level plans include enhanced

management and Board engagement.

93Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

The Committee commissioned two deep dive evaluations

during the year. The Environmental deep dive provided

an overview of the global supply chain, including supplier

validation processes, climate resilience, lower‑carbon sourcing

and product circularity initiatives. The Social deep dive,

presented by the Head of Facilities and Health and Safety,

examined health safety environment (“HSE”) governance and

culture, performance monitoring, and key risk challenges and

mitigations. The Committee noted strong performance in both

areas and will continue to monitor progress.

An important aspect of the Committee’s role is oversight of

ESG‑related governance frameworks and policies to ensure

they remain fit for purpose and aligned with the Company’s

values. During the year, the Committee reviewed and approved

relevant policies, including recommending the annual Modern

Slavery and Human Trafficking Statement and updates to the

Code of Conduct for Board approval.

Committee Performance Review

The 2024 externally facilitated Committee evaluation identified

two key development areas: enhancing understanding of

future sustainability reporting responsibilities, and reviewing

the allocation of social matters between the Board and

its Committees. During the year, the Board received

a comprehensive training session on developments in

sustainability reporting. With this support, and ongoing input

from the sustainability function, the Committee is satisfied

that the Board now has a clear understanding of the evolving

reporting landscape. The allocation of social topics across the

governance structure was also reviewed and will remain an area

of focus as the Committee’s work continues to develop.

The 2025 internal Committee Performance Review reported

strong performance across most areas assessed, with

particularly positive feedback on Committee leadership and

the depth of skills and experience contributed by members.

The review highlighted an opportunity to refine the balance of

environmental, social and governance matters considered by

the Committee. This will be taken forward as a development

objective for the coming year, with progress to be reported in

the FY26 Annual Report.

Year ahead

The Committee will continue to discharge its responsibilities in

line with its Terms of Reference, supporting Ceres’ sustainability

journey by overseeing delivery of the sustainability roadmap,

preparing the business for the evolving sustainability reporting

environment and monitoring ESG‑related risks.

Key areas of increased focus will include conducting an in‑

depth review of our SBTi targets and future pathway, and

support to the Board in overseeing the cultural transformation

programme to embed greater commercial focus across

the Company, ensuring that employees remain motivated,

supported and equipped to deliver while working in a safe and

healthy environment.

Julia King

Chair of the ESG Committee

25 March 2026

94 Ceres Annual Report 2025

Corporate governance

Directors’ report

for the year ended 31 December 2025

The Directors present their Annual Report together with the

audited financial statements for the year ended 31 December 2025.

Principal activities

Ceres is a leading developer of clean energy technology: fuel

cells for power generation and electrolysers to produce green

hydrogen. Its licensing model enables partners to develop solid

oxide technology supporting greater electrification of energy

systems, including AI data centres, commercial and industrial

applications, and produce green hydrogen at high efficiencies

as a route to decarbonise emissions‑intensive industries such as

ammonia, steelmaking and electrofuels.

Articles of Association

The Company’s Articles of Association (the “Articles”) may only

be amended by special resolution at a general meeting of the

shareholders.

The Articles are available on the Company’s website at:

www.ceres.tech/investors/shareholder-centre/

documents

Directors

The Directors of the Company who served during the year ended

31 December 2025 and up to the signing of these statements are

set out on pages 50 to 51. Uwe Glock (Non‑Executive Director)

resigned from the Board on 19 February 2025.

The powers of the Directors are set out in the Articles and the

appointment and removal of Directors are governed by the Articles,

the Companies Act 2006, the UK Corporate Governance Code

2024 and related legislation.

All Directors, with the exception of Trine Borum Bojsen, will put

themselves forward for re‑election at the Annual General Meeting

of the Company in 2026. More details on the process to appoint

new Directors are set out in the Remuneration and Nomination

Committee report on pages 67 to 71.

Directors and Officers’ liability insurance

The Company maintains liability insurance for its Directors

and Officers as permitted by the Companies Act 2006. The

Company also grants to the Directors indemnities in this regard,

which constitute a qualifying third‑party indemnity provision

as defined by Section 234 of the Companies Act 2006, which

were in force throughout the year ended 31 December 2025

and which remain in force at the date of this report.

Results and dividends

The consolidated results for the Group are set out on pages

106 to 109 of the financial statements. The Directors do not

recommend the payment of a dividend (2024: £nil).

Share capital

The Company’s shares are listed on the Main Market of the London

Stock Exchange. The Company’s Articles contain provisions which

govern the ownership and transfer of shares. As at 31 December

2025, the Company had an allotted and fully paid share capital of

194,694,543 ordinary shares with a nominal value of 10 pence each.

As at 24 March 2026, being the latest practicable date prior to the

publication of this report, the Company had an allotted and fully

paid share capital of 194,796,825 ordinary shares with a nominal

value of 10 pence each. Each share carries one right to vote at

general meetings of the Company. No shareholder holds securities

having special rights with regard to control of the Company. There

are no restrictions on voting rights or the transfer of securities in

the Company and the Company is not aware of any agreements

between holders of these securities that would result in such

restrictions. No shares are held as Treasury Shares. Details of the

Company’s share capital, including changes during the year, are set

out on page 132.

On 27 March 2025 the Company established the Ceres Power

Holdings plc Employee Benefit Trust (“EBT”) as a vehicle for

holding the Ceres shares for the purpose of satisfying awards

made under the Company’s share schemes. As at 31 December

2025 and as the date of this report, no shares are held within

the EBT. Details of the Company’s share schemes are set out

on pages 132 to 134.

Authority to issue shares

The Directors were authorised at the 2025 Annual General Meeting

(“AGM”) to allot shares up to a maximum aggregate nominal

amount of £6,459,878, representing approximately one third of the

nominal value of the then issued share capital of the Company; and

in addition equity securities, as defined by Section 560 of the 2006

Companies Act, up to an aggregate nominal amount of £6,459,878,

representing approximately one third of the nominal value of the

then issued share capital of the Company in connection with an

offer of such securities by way of a rights issue. This authority will

expire at the end of the 2026 Annual General Meeting.

Additionally, authority was granted at the 2025 AGM for Directors

to allot shares for cash as if section 561 of the 2006 Act did

not apply up to a nominal amount of £1,937,963, and a further

authority to allot shares for cash up to a nominal amount of

£1,937,963 used only for an acquisition or a specified capital

investment. These authorities will expire at the end of the 2026

Annual General Meeting.

Major shareholders

As at the date of this report, the Company had been notified of

the following interests in voting rights pursuant to Chapter 5 of

the Disclosure Guidance and Transparency Rules. Also included

for information is the Weichai Power (Hong Kong) International

Development Co., Ltd holding, a major shareholder with a nominee

Director on the Board.

Ordinary shares No. of shares % of ISC

Weichai Power (Hong Kong)

International Development Co., Ltd 37,965,262 19.49%

Covalis Capital LLP 18,806,603 9.65%

M&G PLC 9,280,084 4.76%

UK Listing Rule 6.6.1 disclosures

No shareholder is considered a controlling shareholder as defined

in the Financial Conduct Authority Handbook. The remaining

disclosures required by UK Listing Rule 6.6.1 are not applicable to

the Company. Notwithstanding this, the Company has a relationship

agreement with Weichai Power (Hong Kong) International

Development Co., Ltd.

95Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

Additional disclosures and non-financial and sustainability information statement

The following information that is relevant to this Directors’ Report and/or is required by S414CA and S414CB of the Companies Act 2006 is incorporated by reference and can be located in this

report and on our Company website (www.ceres.tech) as follows:

Business review and future

developments

Chair’s Statement and Chief Executive’s

Statement

Pages 6 to 12

Risk management and principal

risks and uncertainties

Strategic report Pages 40 to 44

Corporate and social responsibility Sustainability Pages 24 to 32

Corporate governance and Code Corporate governance report Pages 48 to 61

Financial instruments Financial statements Pages 126 to 130

Research and development

expenditure

Note 3 Financial statements Page 116

Directors Directors’ information Pages 50 to 51

Directors’ interests in shares Directors’ Remuneration report Pages 86 to 87

People policies and colleague

engagement

Sustainability Report/Annual Report Company website

Pages 34 to 35

and 59

Stakeholder engagement and

S172(1) Statement

Stakeholder engagement Pages 33 to 35

Greenhouse gas emissions and

energy consumption

Sustainability Report Pages 24 to 32

Environmental matters

Task Force on Climate‑related Financial

Disclosures

Pages 28 to 30

Sustainability Report Company website

ESG Committee report Pages 91 to 93

ESG and Sustainability Policy Company website

Employees Health and Safety at Work Policy Company website

Page 25

DEBI Policy Company website

Page 25

Employee Engagement Director Page 91

Social matters Stakeholder engagement Pages 33 to 35

People and community – Sustainability

Report

Company website

Charitable Giving and Volunteering

Policy – Sustainability Report

Company website

DEBI Policy Company website

Gender Pay Report Company website

Human rights Modern Slavery Statement Company website

Code of Conduct and Business Ethics Company website

Anti‑bribery and corruption

matters

Anti‑Bribery, Corruption and Fraud

Policy

Page 96

Conflicts of Interest Policy Page 59

Modern Slavery Statement Company website

Speaking Up Policy Page 59

Principal risks and impact

on business activity

Principal risks and uncertainties Pages 40 to 44

Audit and Risk Committee report Pages 62 to 66

Business model Strategic Report Page 13

In addition to the information required by the regulations, during 2025 the Company published

a comprehensive Sustainability Report which details the Company’s sustainability strategy,

environmental and governance responsibilities and commitment to social matters.

96 Ceres Annual Report 2025

Corporate governance

Employee information

The business engages with its colleagues in numerous ways

including regular communications via weekly news bulletins, a

shared intranet, email communications, virtual and in‑person

sessions and monthly “All Hands” meetings. Surveys are

conducted throughout the year to gauge colleagues’ thoughts

and to obtain feedback on issues and events. More information

on engagement with employees is set out in the stakeholder

engagement section on page 34 and in the corporate

governance report on page 59.

The Company actively works to attract, recruit, support and

retain the best talent from diverse backgrounds. As an equal

opportunity employer, the Company provides up‑to‑date

tools and resources to enable all individuals to apply and

compete for employment opportunities for which they are

qualified, based on their qualifications, skills and experience.

Tools and approaches are used throughout talent acquisition

and career development to attract a diverse pool and

ensure that career opportunities are attractive to all potential

candidates, overcoming barriers. Reasonable adjustments are

made to the recruitment process to ensure no applicant is

disadvantaged because of their disability. This is supported

with training to ensure hiring managers do not discriminate or

apply unconscious bias when making hiring decisions. Further

guidance to hiring managers is provided in the Company’s

Talent Acquisition and Diversity, Equity, Belonging and Inclusion

(“DEBI”) policies. The Company also seeks to ensure the

continuation where possible and practical of colleagues in

their role should they incur a disability whilst employed by

the Company.

More information on the ways the Company invests and rewards its

employees is set out on page 74 and in the Sustainability Report available on

the Company website at:

www.ceres.tech/sustainability

Branches outside the UK

As at 31 December 2025, the Group has branches in Weifang,

China, and in Seoul, South Korea, which support the Group’s

business development strategy in those territories.

Anti-bribery, corruption and fraud

The Company has a zero tolerance approach to bribery,

corruption and fraud, and operates an Anti‑Bribery, Corruption

and Fraud Policy. The Policy also contains requirements with

regard to the provision or receipt of gifts and hospitality, which

is limited and which require approval over a certain value

threshold. The Gifts and Hospitality Register is monitored

through the receipt reports to the Audit and Risk Committee.

The day‑to‑day operation is monitored by the Company

Secretary. All colleagues were required to undertake anti‑

bribery and corruption training over the year, which will

continue to be an annual requirement.

Information security

The Company operates an Information Security Policy. There

have been no information security breaches in the last three

years. Arrangements with third parties are assessed with

thorough due diligence performed to identify and understand

potential risks which may then be mitigated. There have been

no third‑party information security breaches. Penetration

testing is performed at least annually and any risks arising are

mitigated immediately. The Company holds insurance for cyber

security, which covers information security risk, and this was in

place for the duration of 2025.

All colleagues are subject to mandatory information security

induction training and annual refresher training.

Political donations

The Group made no political donations in the year ended

31 December 2025 or the prior period.

Payment practice policy

It is the Group’s policy for 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

as at 31 December 2025, as a proportion of amounts invoiced

by suppliers during the previous year, represented 17 days

(31 December 2024: 21 days). There were no trade creditors

for the Company as at 31 December 2025 as a proportion of

amounts invoiced by suppliers during the previous year. This

therefore represented nil days (31 December 2024: nil days).

Going concern and viability statements

Having reviewed the Group’s cash and short‑term investments,

forecast income and expenditure, performing appropriate

sensitivity and scenario analyses, and after making appropriate

enquiries, the Directors have a reasonable expectation that

the Group and Company have adequate resources to progress

their strategy. Accordingly, they continue to adopt the going

concern basis in preparing these financial statements. More

detail can be found on page 47 and in the financial statements

on page 110.

The Directors have further assessed the prospects of the

Company over a defined period of time and set out their

conclusions in the Viability Statement, which can be found on

pages 45 to 47.

Events after the reporting date

After the year end, Ceres agreed and paid a settlement of

£2.0 million with a third party in connection with the early

termination of a contract.

Statement of disclosure to the auditor

Each of the persons named as Directors at the date of this

report confirm that:

• So far as they are aware, there is no relevant audit

information of which the Company’s auditor is unaware; and

• That they have taken all steps that they ought to have

taken as a Director in order to make themselves aware

of any relevant audit information and to establish that the

Company’s auditor is aware of that information.

Auditor

A resolution to reappoint BDO LLP as the Company’s external

auditor for the year ending 31 December 2026 and for its

remuneration to be agreed by the Audit and Risk Committee

will be submitted to the 2026 Annual General Meeting.

Directors’ report continued

for the year ended 31 December 2025

97Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

Statement of Directors’ responsibilities in respect

of the Annual Report and financial statements

The Directors are responsible for preparing the Annual Report

and the financial statements in accordance with applicable law

and regulations.

Company law requires the Directors to prepare financial

statements for each financial year.

The Directors have prepared the Group financial statements

in accordance with UK‑adopted International Accounting

Standards (“IFRS”), and have elected to prepare the parent

company statements in accordance with Financial Reporting

Standard 101 Reduced Disclosure Framework (“FRS 101”).

The Directors must not approve the financial statements unless

they are satisfied that they give a true and fair view of the state

of affairs of the Group and parent and of the profit or loss of

the Group for that period.

In preparing these financial statements the Directors are

required to:

• Select suitable accounting policies and then apply them

consistently;

• Make judgements and estimates that are reasonable and

prudent;

• State whether applicable UK accounting standards have been

followed, subject to any material departures disclosed and

explained in the financial statements; and

• Prepare the financial statements on the going concern basis

unless it is inappropriate to presume that the Group and the

Company will continue in business.

The Directors are responsible for keeping adequate accounting

records that are sufficient to show and explain the Company’s

transactions and disclose with reasonable accuracy at any

time the financial position of the Company and enable them to

ensure the financial statements comply with the requirements

of the Companies Act 2006. They are also responsible for

safeguarding the assets of the Company and for taking

reasonable steps for the prevention and detection of fraud and

other irregularities.

The Directors confirm that to the best of their knowledge:

• The financial statements, prepared in accordance with

applicable accounting standards, give a true and fair view

of the assets, liabilities, financial position and profit or loss

of the Company and the undertakings included in the

consolidation taken as a whole; and

• The management report includes a fair review of the

development or performance of the business and the

position of the Company and the undertakings included

in the consolidation taken as a whole, together with a

description of the principal risks and uncertainties.

The Directors confirm that the Annual Report and Accounts,

taken as a whole, is fair, balanced and understandable and

provides the information necessary for shareholders to

assess the Group’s position and performance, business model

and strategy.

Publication

The Annual Report and Accounts will be made available

on the Company’s website and also on the National Storage

Mechanism in accordance with legislation in the United

Kingdom governing the preparation and dissemination of

financial statements, which may vary from legislation in other

jurisdictions. The maintenance and integrity of the Company’s

website is the responsibility of the Directors. The Directors’

responsibility also extends to the ongoing integrity of the

financial statements contained therein.

The Directors’ report has been approved by the Board

of Directors and is signed on their behalf by:

Dominic Murray

Company Secretary

25 March 2026

98 Ceres Annual Report 2025

Financial statements

99 Independent auditor’s report

106 Consolidated statement of profit and loss and

other comprehensive income

107

Consolidated statement of financial position

108 Consolidated cash flow statement

109 Consolidated statement of changes in equity

110 Notes to the consolidated financial statements

136 Company balance sheet

137 Company statement of changes in equity

138 Notes to the Company financial statements

142 Directors and advisers

143 Glossary

Financial

statements

99Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

Independent auditor’s report

to the members of Ceres Power Holdings plc

Opinion on the financial statements

In our opinion:

• the financial statements give a true and fair view of the state of the Group’s and of the

Company’s affairs as at 31 December 2025 and of the Group’s loss and the Group’s cash flows

for the year then ended;

• the Group financial statements have been properly prepared in accordance with UK-adopted

International Accounting Standards;

• the Company financial statements have been properly prepared in accordance with United

Kingdom Generally Accepted Accounting Practice; and

• the financial statements have been prepared in accordance with the requirements of the

Companies Act 2006.

We have audited the financial statements of Ceres Power Holdings plc (the “Company”) and

its subsidiaries (the “Group”) for the year ended 31 December 2025 which comprise of the

following:

Group Company

Consolidated Statement of Profit or Loss and

Other Comprehensive Income —

Consolidated Statement of Financial Position Company Balance Sheet

Consolidated Cash Flow Statement —

Consolidated Statement of Changes in Equity Company Statement of Changes in Equity

Notes to the Consolidated financial statements Notes to the Company financial statements

Material accounting policy information.

The financial reporting framework that has been applied in the preparation of the Group

financial statements is applicable law and UK-adopted International Accounting Standards. The

financial reporting framework that has been applied in the preparation of the Company financial

statements is applicable law and United Kingdom Accounting Standards, including Financial

Reporting Standard 101 Reduced Disclosure Framework (United Kingdom Generally Accepted

Accounting Practice).

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs

(UK)) and applicable law. Our responsibilities under those standards are further described in

the Auditor’s responsibilities for the audit of the financial statements section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide

a basis for our opinion.

Independence

We remain independent of the Group and the Company in accordance with the ethical

requirements that are relevant to our audit of the financial statements in the UK, including the

FRC’s Ethical Standard as applied to listed public interest entities, and we have fulfilled our other

ethical responsibilities in accordance with these requirements. The non-audit services prohibited

by the FRC’s Ethical Standard were not provided to the Group and the Company and we remain

independent of the Group and the Company in conducting our audit.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the Directors’ use of the going

concern basis of accounting in the preparation of the financial statements is appropriate. Our

evaluation of the Directors’ assessment of the Group and the Company’s ability to continue to

adopt the going concern basis of accounting included:

• Assessment of assumptions within the projected cash flows: we evaluated the reasonableness

of the assumptions and future plans modelled within the Board approved going concern

forecasts, covering the period to 31 December 2027, including the impact of strategic

initiatives. We considered whether the forecasts aligned with how the Group had traded

throughout the year, which included reviewing the movement in revenue against our

understanding of the contracts and the movements in expenditure compared to historic costs.

• Sensitivity analysis: we evaluated management’s sensitivities to the Group’s cash flow

forecasts. Their analysis considered reasonably possible adverse effects that could arise as

well as a stress test to consider the level of future revenue reduction and cost increases that

the Group could support.

• Post year-end trading performance: we compared the post year-end trading results to the

forecasts to evaluate the accuracy and achievability of the forecasts.

• Disclosures: we evaluated the adequacy of the disclosures in relation to the risks posed and

scenarios the Directors have considered in performing their going concern assessment.

Based on the work we have performed, we have not identified any material uncertainties relating

to events or conditions that, individually or collectively, may cast significant doubt on the Group

and the Company’s ability to continue as a going concern for a period of at least 12 months

from when the financial statements are authorised for issue. However, because not all future

events or conditions can be predicted, this statement is not a guarantee as to the Group and the

Company’s ability to continue as a going concern.

In relation to the Group’s reporting on how it has applied the UK Corporate Governance Code,

we have nothing material to add or draw attention to in relation to the Directors’ statement in the

financial statements about whether the Directors considered it appropriate to adopt the going

concern basis of accounting in preparing the financial statements.

Our responsibilities and the responsibilities of the Directors with respect to going concern are

described in the relevant sections of this report.

100 Ceres Annual Report 2025

Financial statements

Overview

2025 2024

Key audit matters Revenue recognition: application of IFRS 15 and

measurement of revenue

Capitalisation of development costs

Capitalisation of development costs is no longer considered to be a key

audit matter because there were no development costs capitalised in the

current year.

Materiality

Group financial statements as a whole

£950,000 (2024: £880,000) based on 1.5% (2024: 1.25%) of expenses

An overview of the scope of our audit

Our Group audit was scoped by obtaining an understanding of the Group and its environment,

the applicable financial reporting framework and the Group’s system of internal control.

We identified and assessed the risks of material misstatement of the Group financial statements

including with respect to the consolidation process. We then applied professional judgement

to focus our audit procedures on the areas that posed the greatest risks to the Group financial

statements. We continually assessed risks throughout our audit, revising the risks where

necessary, with the aim of reducing the Group risk of material misstatement to an acceptable

level, in order to provide a basis for our opinion.

Components in scope

From the above risk assessment and planning procedures, we determined which of the

Group’s components were likely to include risks of material misstatement relevant to the

Group’s financial statements.

The Group operates in the United Kingdom and China. The Group is made up of five trading

companies supported by three holding companies, one of which being the Company. As part

of performing our Group audit, we have determined seven components in scope that comprise

six companies in the United Kingdom including the Company and one company in China. Each

of the components was a separate legal entity.

In determining the components, we have considered how components are organised within the

Group, and the commonality of control environments, legal and regulatory framework, and level

of aggregation associated with individual entities.

For components in scope, we used a combination of risk assessment procedures and further audit

procedures to obtain sufficient appropriate evidence. These further audit procedures included:

• procedures on the entire financial information of the component, including performing

substantive procedures; and

• specific audit procedures.

Procedures performed at the component level

Procedures were performed on the entire financial information of five components.

Specified procedures were performed at one component to test completeness of liabilities.

Risk assessment procedures were performed at one component.

The Group engagement team has performed all procedures directly and has not involved

component auditors in the Group audit.

Changes from the prior year

The only change in the Group audit scope from the prior year is that one legal entity, previously

classified as an associate, became a subsidiary in the current year after the Company acquired the

remaining ownership. Specified procedures were performed at this component as described above.

How climate change affected the scope of our audit

The Group has determined that climate change does not currently have a material impact

on its operations.

Our work on the assessment of potential impacts of climate-related risks on the Group’s

operations and financial statements included:

• Enquiries and challenge of management to understand the actions they have taken to identify

climate-related risks and their potential impacts on the financial statements and adequately

disclose climate-related risks within the Annual Report; and

• Review of the minutes of Board and Audit Committee meetings and other papers related

to climate change and performed a risk assessment as to how the impact of the Group’s

commitment, as set out on page 31, may affect the financial statements and our audit.

We challenged the extent to which climate-related considerations, including the expected cash

flows from the initiatives and commitments have been reflected, where appropriate, in the

Directors’ going concern assessment and viability assessment.

The management disclosures on pages 24 to 32 form part of the strategic report. Our

responsibilities in relation to these disclosures are described in the relevant section of this report

and our procedures on these disclosures therefore consisted solely of considering whether they

are materially inconsistent with the financial statements or our knowledge obtained from the

audit or otherwise appear to be materially misstated.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most

significance in our audit of the financial statements of the current period and include the

most significant assessed risks of material misstatement (whether or not due to fraud) that

we identified, including those which had the greatest effect on: the overall audit strategy, the

allocation of resources in the audit, and directing the efforts of the engagement team. These

matters were addressed in the context of our audit of the financial statements as a whole, and

in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Independent auditor’s report continued

to the members of Ceres Power Holdings plc

101Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

Overview continued

Key audit matters continued

Key audit matter – 1 How the scope of our audit addressed the key audit matter

Revenue

Recognition: application of

IFRS 15 and measurement of

revenue

(Accounting policies, Note 2 -

Revenue £32.6 million)

Given the Group’s revenue contracts are complex,

the application of IFRS 15 and measurement of

revenue requires management to make a number

of judgements and estimates as included below.

Where a new contract was entered into, the

judgements and estimates required included: the

identification of performance obligations, whether

the basis used in allocating the transaction price

is appropriate and reasonable, and whether the

amount of revenue allocated to each performance

obligation was estimated correctly. Further,

judgement was required to determine whether the

performance obligation for which revenue was

recognised had been satisfied in the year.

Where existing contracts were subject to informal

undocumented changes that affected the contract

scope, judgements were required over whether

they changed the performance obligations

identified, and the revenue recognised.

Where contracts were amended, the judgements

and estimates required included an assessment

of whether the amendment represented a

modification under IFRS 15, a reassessment of

performance obligations, and whether the basis

used in allocating the transaction price was

appropriate and reasonable, and whether the

amount of revenue allocated to each performance

obligation and the revenue recognised in the year

was correct.

For these reasons, the application of IFRS 15 and

measurement of revenue in respect of revenue

relating to new contracts, existing contracts and

amended contracts required significant auditor

attention. We therefore determined this to be a

key audit matter.

New contract

• We obtained and reviewed the signed agreement to check the contract had been approved and created

enforceable rights.

• We obtained management’s assessment of the performance obligations contained within the contract and

determination of the transaction price and then evaluated whether this is consistent with the contract. This

included evaluating the terms of the contract to determine if it included fixed amounts, variable amounts,

or both.

• We tested the revenue recognised in the year by obtaining evidence that performance obligations had been

satisfied through corroboration to supporting documents.

• We performed sensitivity analysis on the allocation of transaction price to the performance obligation that

had been satisfied in the year to determine the potential for material misstatement in revenue recognised.

Existing contracts

• We obtained all change notes signed in the year and reviewed minutes of project meetings to test

management’s assessment of whether there had been changes agreed to contracts in the period.

• Where changes had been made, we obtained management’s assessment of whether the contract changes

represent a modification under IFRS 15 and the impact of the changes on the:

• identified performance obligations;

• determination of the contract’s transaction price; and

• the allocation of the transaction price to individual performance obligations.

• We evaluated management’s assessment of the impact of the changes to the contracts through our

understanding of the nature of the future goods and service to be provided under the contract and

corroboration to supporting documents. We challenged management for any contradictory information

identified as a result of procedures performed.

• We tested the revenue recognised in the year by obtaining evidence that performance obligations had been

satisfied through corroboration to supporting documents.

• We recalculated the revenue recognised in the period based on the allocation of the transactions price for

satisfied performance obligations.

Conclusion

As a result of the procedures performed, we did not find any matters to indicate that judgements made in the

application of IFRS 15 or the measurement of revenue led to revenue being materially misstated.

102 Ceres Annual Report 2025

Financial statements

Our application of materiality

We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider materiality to be the magnitude by which misstatements,

including omissions, could influence the economic decisions of reasonable users that are taken on the basis of the financial statements.

In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level, performance materiality, to determine the extent of

testing needed. Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular

circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality as follows:

Group financial statements Parent company financial statements

2025

2024

2025

2024

Materiality 950,000 880,000 900,000 830,000

Basis for determining materiality 1.50% (2024: 1.25%) of expenses Capped at 95% (2024: 95%) of Group materiality

Rationale for the benchmark applied We have selected a materiality based on expenses as we consider this

is the best reflection of the scale of the Group’s operations noting it

has also been relatively consistent year on year.

Ceres Power Holdings Plc is a holding company with investments

in subsidiaries. We considered a benchmark based on net assets

to be most appropriate, however have capped materiality to a

percentage of Group materiality.

Performance materiality 475,000 570,000 450,000 540,000

Basis for determining performance materiality In setting the level of performance materiality we considered a number of factors including the expected total value of known and

likely misstatements, the number of areas of estimation within the financial statements and the type of audit testing to be completed.

Performance materiality was set at 50% of materiality (2024: 65%).

Rationale for the percentage applied for performance

materiality

We used performance materiality of 65% of materiality in the previous year. This year, we reduced the performance materiality to 50%

in line with our assessment of audit risk.

Component performance materiality

For the purposes of our Group audit opinion, we set performance materiality for each component of the Group, apart from the Company whose materiality and performance materiality are set

out above, based on a percentage of 95% (2024: 95%) of Group performance materiality dependent on the size and our assessment of the risk of material misstatement of those components.

Component performance materiality was £450,000 (2024: £540,000).

Reporting threshold

We agreed with the Audit Committee that we would report to them all individual audit differences in excess of £47,000 (2024: £44,000). We also agreed to report differences below this

threshold that, in our view, warranted reporting on qualitative grounds.

Independent auditor’s report continued

to the members of Ceres Power Holdings plc

103Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

Other information

The Directors are responsible for the other information. The other information comprises the

information included in the Annual Report and Accounts other than the financial statements and

our auditor’s report thereon. Our opinion on the financial statements does not cover the other

information and, except to the extent otherwise explicitly stated in our report, we do not express

any form of assurance conclusion thereon. Our responsibility is to read the other information

and, in doing so, consider whether the other information is materially inconsistent with the

financial statements or our knowledge obtained in the course of the audit, or otherwise appears

to be materially misstated. If we identify such material inconsistencies or apparent material

misstatements, we are required to determine whether this gives rise to a material misstatement in

the financial statements themselves. If, based on the work we have performed, we conclude that

there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Corporate governance statement

The UK Listing Rules sourcebook requires us to review the Directors’ statement in relation to

going concern, longer-term viability and that part of the Corporate Governance Statement

relating to the Company’s compliance with the provisions of the UK Corporate Governance

Code specified for our review.

Based on the work undertaken as part of our audit, we have concluded that each of the

following elements of the Corporate Governance Statement is materially consistent with the

financial statements, or our knowledge obtained during the audit.

Going concern and

longer-term viability

• The Directors’ statement with regards to the appropriateness of

adopting the going concern basis of accounting and any material

uncertainties identified set out on page 47;

• The Directors’ explanation as to their assessment of the Group’s

prospects, the period this assessment covers and why the period is

appropriate set out on page 46; and

• The Directors’ statement on whether they have a reasonable

expectation that the Group will be able to continue in operation and

meet its liabilities set out on page 47.

Other Code provisions • Directors’ statement on fair, balanced and understandable set out on

page 99;

• Board’s confirmation that it has carried out a robust assessment of

the emerging and principal risks set out on page 64;

• The section of the Annual Report that describes the review of

effectiveness of risk management and internal control systems set

out on page 64; and

• The section describing the work of the Audit Committee set out on

page 62.

Other Companies Act 2006 reporting

Based on the responsibilities described below and our work performed during the course of the

audit, we are required by the Companies Act 2006 and ISAs (UK) to report on certain opinions

and matters as described below.

Strategic report and

Directors report

In our opinion, based on the work undertaken in the course of the audit:

• the information given in the Strategic report and the Directors’

report for the financial year for which the financial statements are

prepared is consistent with the financial statements; and

• the Strategic report and the Directors’ report have been prepared in

accordance with applicable legal requirements.

In the light of the knowledge and understanding of the Group and

Company and its environment obtained in the course of the audit, we

have not identified material misstatements in the Strategic report or the

Directors’ report.

Directors’ remuneration In our opinion, the part of the Directors’ Remuneration Report to

be audited has been properly prepared in accordance with the

Companies Act 2006.

104 Ceres Annual Report 2025

Financial statements

Matters on which we

are required to report

by exception

We have nothing to report in respect of the following matters in

relation to which the Companies Act 2006 requires us to report to

you if, in our opinion:

• adequate accounting records have not been kept by the Company,

or returns adequate for our audit have not been received from

branches not visited by us; or

• the Company financial statements and the part of the Directors’

Remuneration Report to be audited are not in agreement with the

accounting records and returns; or

• certain disclosures of Directors’ remuneration specified by law are

not made; or

• we have not received all the information and explanations we

require for our audit.

Responsibilities of Directors

As explained more fully in the Statement of Directors’ responsibilities, the Directors are

responsible for the preparation of the financial statements and for being satisfied that they give a

true and fair view, and for such internal control as the Directors determine is necessary to enable

the preparation of financial statements that are free from material misstatement, whether due to

fraud or error.

In preparing the financial statements, the Directors are responsible for assessing the Group’s and

the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to

going concern and using the going concern basis of accounting unless the Directors either intend

to liquidate the Group or the Company or to cease operations, or have no realistic alternative

but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as

a whole are free from material misstatement, whether due to fraud or error, and to issue an

auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance

but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect

a material misstatement when it exists. Misstatements can arise from fraud or error and are

considered material if, individually or in the aggregate, they could reasonably be expected to

influence the economic decisions of users taken on the basis of these financial statements.

However, the primary responsibility for the prevention and detection of fraud rests with both

those charged with governance of the Company and management.

Independent auditor’s report continued

to the members of Ceres Power Holdings plc

Extent to which the audit was capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations.

We design procedures in line with our responsibilities, outlined above, to detect material

misstatements in respect of irregularities, including fraud. The extent to which our procedures

are capable of detecting irregularities, including fraud is detailed below:

Non-compliance with laws and regulations

Based on:

• Our understanding of the Group and the industry in which it operates;

• Discussion with management and those charged with governance; and

• Obtaining an understanding of the Group’s policies and procedures regarding compliance

with laws and regulations

we considered the significant laws and regulations to be UK-adopted International Accounting

Standards, UK GAAP, relevant tax legislation, Listing Rules and the Companies Act 2006.

The Group is also subject to laws and regulations where the consequence of non-compliance

could have a material effect on the amount or disclosures in the financial statements, for example

through the imposition of fines or litigations. We identified such laws and regulations to be health

and safety legislation and GDPR legislation.

Our procedures in respect of the above included:

• Enquires of management whether there were any litigations and claims;

• Enquires of the legal team of the Group and the Company;

• Review of minutes of meetings of those charged with governance for any instances

of non-compliance with laws and regulations;

• Review of correspondence with regulatory and tax authorities for any instances of

non-compliance with laws and regulations;

• Review of financial statement disclosures and agreeing to supporting documentation;

• Involvement of tax specialists in the audit; and

• Review of legal expenditure accounts to understand the nature of expenditure incurred.

Other Companies Act 2006 reporting continued

105Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

Auditor’s responsibilities for the audit of the financial statements continued

Fraud

We assessed the susceptibility of the financial statements to material misstatement, including

fraud. Our risk assessment procedures included:

• Enquiry with management and those charged with governance regarding any known or

suspected instances of fraud;

• Obtaining an understanding of the Group’s policies and procedures relating to:

• Detecting and responding to the risks of fraud; and

• Internal controls established to mitigate risks related to fraud;

• Review of minutes of meetings of those charged with governance for any known or suspected

instances of fraud;

• Discussion amongst the engagement team as to how and where fraud might occur in the

financial statements;

• Performing analytical procedures to identify any unusual or unexpected relationships that may

indicate risks of material misstatement due to fraud; and

• Considering remuneration incentive schemes and performance targets and the related financial

statement areas impacted by these.

Based on our risk assessment, we considered the areas most susceptible to fraud to be

management override of controls, incorrect application of IFRS 15 (revenue from contracts with

customers) and incorrect measurement of revenue.

Our procedures in respect of the above included:

• Testing a sample of journal entries throughout the year, which met defined risk criteria, by

agreeing to supporting documentation;

• Assessing significant estimates made by management for bias including the dilapidations

provisions and the recognition and measurement of inventory provision; and

• Assessing the application of IFRS 15 on contracts including the estimates and judgements used

in the measurement of revenue based on procedures performed on the key audit matter above.

We also communicated relevant identified laws and regulations and potential fraud risks to

all engagement team members who were all deemed to have appropriate competence and

capabilities and remained alert to any indications of fraud or non-compliance with laws and

regulations throughout the audit.

Our audit procedures were designed to respond to risks of material misstatement in the financial

statements, recognising that the risk of not detecting a material misstatement due to fraud is

higher than the risk of not detecting one resulting from error, as fraud may involve deliberate

concealment by, for example, forgery, misrepresentations or through collusion. There are inherent

limitations in the audit procedures performed and the further removed non-compliance with laws

and regulations is from the events and transactions reflected in the financial statements, the less

likely we are to become aware of it.

A further description of our responsibilities is available on the Financial Reporting Council’s website

at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Other matters which we are required to address

We were reappointed by shareholders on 15 May 2025 to audit the financial statements for the

year ended 31 December 2025.

Our total uninterrupted period of engagement is 6 years, covering the periods ended 31 December

2020 to 31 December 2025.

Our audit opinion is consistent with the additional report to the Audit and Risk Committee.

Use of our report

This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of

Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state

to the Company’s members those matters we are required to state to them in an auditor’s report

and for no other purpose. To the fullest extent permitted by law, we do not accept or assume

responsibility to anyone other than the Company and the Company’s members as a body, for our

audit work, for this report, or for the opinions we have formed.

In due course, as required by the Financial Conduct Authority Disclosure Guidance and

Transparency Rule 4.1.15R - 4.1.18R, these financial statements will form part of the Electronic

Format Annual Financial Report filed on the National Storage Mechanism of the FCA in accordance

with DTR 4.1.15R – DTR 4.1.18R. This auditor’s report provides no assurance over whether the

Electronic Format Annual Financial Report has been prepared in compliance with DTR 4.1.15R –

DTR 4.1.18R.

Peter Acloque (Senior Statutory Auditor)

For and on behalf of BDO LLP, Statutory Auditor

London, UK

25 March 2026

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

106 Ceres Annual Report 2025

Financial statements

Consolidated statement of profit and loss and other comprehensive income

for the year ended 31 December 2025

		2025	2024
	Note	£’000	£’000
Revenue	2	32,643	51,891
Cost of sales		(9,939)	(11,727)
Gross profit		22,704	40,164
Other operating income	3	3,168	2,846
Operating costs	3	(70,073)	(74,327)
Exceptional operating costs	29	(3,420)	—
Operating loss		(47,621)	(31,317)
Impairment of investment in associate	29	(2,158)	—
Finance income	4	4,060	5,807
Finance expense	4	(587)	(362)
Loss before taxation	3	(46,306)	(25,872)
Taxation charge	7	(1,240)	(2,433)
Loss for the financial year and total comprehensive loss		(47,546)	(28,305)
Loss per £0.10 ordinary share expressed in pence per share:
– basic and diluted	8	(24.52)p	(14.64)p

The notes on pages 110 to 135 are an integral part of these consolidated financial statements.

107Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

Consolidated statement of financial position

as at 31 December 2025

		As at 31 Dec	As at 31 Dec
		2025	2024
	Note	£’000	£’000
Assets
Non-current assets
Property, plant and equipment	9	18,194	23,584
Right-of-use assets	10	2,063	1,834
Intangible assets	11	16,203	19,974
Investment in associates	12	—	2,218
Other receivables	14	741	741
Total non-current assets		37,201	48,351
Current assets
Inventories	13	3,203	2,756
Contract assets	2	143	8,208
Other current assets	15	1,449	1,430
Derivative financial instruments	19	—	8
Current tax receivable		1,792	—
Trade and other receivables	14	18,736	17,885
Short-term investments	16	47,437	54,971
Cash and cash equivalents	16	35,835	47,494
Total current assets		108,595	132,752
Liabilities
Current liabilities
Trade and other payables	17	(2,742)	(3,538)
Contract liabilities	2	(23,284)	(10,682)
Other current liabilities	18	(4,149)	(6,825)
Lease liabilities	20	(834)	(731)
Provisions	21	(2,214)	(441)
Total current liabilities		(33,223)	(22,217)
Net current assets		75,372	110,535

		As at 31 Dec	As at 31 Dec
		2025	2024
	Note	£’000	£’000
Non-current liabilities
Lease liabilities	20	(1,575)	(1,492)
Other non-current liabilities	18	(976)	(1,221)
Provisions	21	(2,376)	(2,340)
Total non-current liabilities		(4,927)	(5,053)
Net assets		107,646	153,833
Equity attributable to the owners of the parent
Share capital	22	19,469	19,370
Share premium		406,650	406,650
Capital redemption reserve	23	3,449	3,449
Merger reserve	23	7,463	7,463
Accumulated losses		(329,385)	(283,099)
Total equity		107,646	153,833

The notes on pages 110 to 135 are an integral part of these consolidated financial statements.

The financial statements on pages 106 to 109 were approved by the Board of Directors on 25

March 2026 and were signed on its behalf by:

Phil Caldwell Stuart Paynter

Chief Executive Officer Chief Financial Officer

Ceres Power Holdings plc

Registered Number: 5174075

108 Ceres Annual Report 2025

Financial statements

Consolidated cash flow statement

for the year ended 31 December 2025

		2025	2024
	Note	£’000	£’000
Cash flows from operating activities
Loss before taxation		(46,306)	(25,872)
Adjustments for:
Finance income	4	(4,060)	(5,807)
Finance expense	4	587	362
Depreciation of property, plant and equipment	3	7,100	7,472
Depreciation of right-of-use assets	3	753	710
Amortisation of intangibles	3	3,858	1,374
Impairment of associates	12	2,218	—
Net foreign exchange (gains)/loss		(13)	79
Net change in fair value of financial instruments at fair value through profit or loss	3	90	(99)
Loss on disposal of property, plant and equipment and right
of use assets		125	—
Share-based payments	24	1,260	964
Operating cash flows before movements in working
capital and provisions		(34,388)	(20,817)
Increase in trade and other receivables
and other current assets		(870)	(8,757)
(Increase)/decrease in inventories		(447)	69
Decrease in trade and other payables and other liabilities		(3,717)	(1,809)
Decrease/(increase) in contract assets		8,065	(6,633)
Increase in contract liabilities		12,602	3,213
Increase/(decrease) in provisions		1,717	(188)
Net cash used in operations		(17,038)	(34,922)
Taxation paid		(3,032)	(1,019)
Net cash used in operating activities		(20,070)	(35,941)

		2025	2024
	Note	£’000	£’000
Investing activities
Purchase of property, plant and equipment		(1,776)	(4,449)
Capitalised development expenditure	11	(87)	(2,294)
Decrease in short-term investments		7,445	32,537
Finance income received		4,149	8,469
Net cash generated from investing activities		9,731	34,263
Financing activities
Proceeds from issuance of ordinary shares		99	539
Repayment of lease liabilities	20	(792)	(774)
Finance interest paid	4	(495)	(243)
Net cash used by financing activities		(1,188)	(478)
Net decrease in cash and cash equivalents		(11,527)	(2,156)
Exchange loss on cash and cash equivalents		(132)	(57)
Cash and cash equivalents at beginning of year		47,494	49,707
Cash and cash equivalents at end of year	16	35,835	47,494

Non-cash items have been reconciled in Note 28.

The notes on pages 110 to 135 are an integral part of these consolidated financial statements.

109Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

Consolidated statement of changes in equity

for the year ended 31 December 2025

				Capital
		Share	Share	redemption	Merger	Accumulated
		capital	premium	reserve	reserve	losses	Total
	Note	£’000	£’000	£’000	£’000	£’000	£’000
At 1 January 2024		19,297	406,184	3,449	7,463	(255,758)	180,635
Comprehensive income
Loss and total comprehensive loss for the financial year		—	—	—	—	(28,305)	(28,305)
Total comprehensive loss		—	—	—	—	(28,305)	(28,305)
Transactions with owners
Issue of shares, net of costs	22	73	466	—	—	—	539
Share-based payments	24	—	—	—	—	964	964
Total transactions with owners		73	466	—	—	964	1,503
At 31 December 2024		19,370	406,650	3,449	7,463	(283,099)	153,833
Comprehensive income
Loss and total comprehensive loss for the financial year		—	—	—	—	(47,546)	(47,546)
Total comprehensive loss		—	—	—	—	(47,546)	(47,546)
Transactions with owners
Issue of shares, net of costs	22	99	—	—	—	—	99
Share-based payments	24	—	—	—	—	1,260	1,260
Total transactions with owners		99	—	—	—	1,260	1,359
At 31 December 2025		19,469	406,650	3,449	7,463	(329,385)	107,646

The notes on pages 110 to 135 are an integral part of these consolidated financial statements.

110 Ceres Annual Report 2025

Financial statements

Notes to the consolidated financial statements

for the year ended 31 December 2025

1. Accounting policies used in the preparation of the financial statements

The Company is incorporated and domiciled in the United Kingdom and is registered on the

equity shares (commercial companies) category of the Main Market of the London Stock

Exchange (LON:CWR).

The accounting policies applied in the preparation of these consolidated financial statements are

set out below and at the start of the respective notes to these consolidated financial statements.

These policies have been consistently applied to all the years presented, unless otherwise stated.

Basis of preparation

The consolidated financial statements of the Group have been prepared on a going concern

basis, in accordance with UK-adopted International Accounting Standards (“IFRS”).

The Company has elected to prepare its entity financial statements in accordance with Financial

Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and these are presented on

pages 136 to 141.

The consolidated financial statements have been prepared on a historical cost basis except for

derivative financial instruments that are stated at their fair value.

Foreign currencies

The consolidated financial statements are presented in pounds sterling, which is the Company’s

functional currency and the Group’s presentational currency. Transactions denominated in foreign

currencies are translated into sterling at the exchange rate ruling at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are translated into sterling at

the foreign exchange rate prevailing at the period end. Foreign exchange differences arising on

translation are recognised in the Consolidated Statement of Profit and Loss.

Basis of consolidation

The consolidated financial statements of Ceres Power Holdings plc include the results of the

Company, subsidiaries which are controlled by the Group and the Group’s interest in associates.

The Group controls an entity when it is exposed to, or has rights to, variable returns from its

involvement with the entity and has the ability to affect those returns through its power over the

entity. In assessing control, the Group takes into consideration substantive potential voting rights

that are currently exercisable. The acquisition date is the date on which control is transferred to

the acquirer. The financial statements of subsidiaries are included in the consolidated financial

statements from the date that control commences until the date that control ceases.

Intra-Group balances and transactions, and any unrealised income and expenses arising from

Intra-Group transactions, are eliminated.

Business combinations

Business combinations are accounted for using the acquisition method. The cost of an acquisition

is measured as the aggregate of the consideration transferred, which is measured at acquisition

date fair value, and the amount of any non-controlling interests in the acquiree. For each business

combination, the Group elects whether to measure the non-controlling interests in the acquiree

at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition-

related costs are expensed as incurred and included in administrative expenses. When the

Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate

classification and designation in accordance with the contractual terms, economic circumstances

and pertinent conditions as at the acquisition date.

Going concern

The Group has reported a loss after tax for the year ended 31 December 2025 of £47.5 million

(2024: £28.3 million) and net cash used in operating activities of £20.1 million (2024: £35.9 million).

At 31 December 2025, the Group held cash and cash equivalents and investments of £83.3 million

(31 December 2024: £102.5 million).

The Directors have prepared monthly budgets and cash flow projections that extend up to 31

December 2027. The forecast operating cash requirement will be lower in 2026 compared to

2025 following the Group’s restructuring. Future projections include management’s expectations

of the further investment in R&D projects, new product development and capital investment as

the Group sustains its competitive advantage in licensing fuel cell and electrolysis technologies.

Future cash inflows reflects management’s expectations of revenue from existing and new

licensee partners in both the power and green hydrogen markets.

The projections were stress tested by applying different scenarios in line with the Group’s viability

scenarios presented on pages 46 to 47 including a slower intake of future licensee partners

leading to a loss of significant future revenue and a resulting cost mitigation. In each case the

projections demonstrated that the Group is expected to have sufficient cash reserves to meet its

liabilities as they fall due and to continue as a going concern for at least a period of 12 months.

For the above reasons, the Directors continue to adopt the going concern basis in preparing the

consolidated financial statements.

111Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

1. Accounting policies used in the preparation of the financial statements

continued

Critical accounting judgements and estimates

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 may ultimately differ from these

estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to

accounting estimates are recognised in the period in which the estimate is revised.

Significant judgements

The judgements made by management in applying accounting policies that are considered to

have the most significant impact on the Group’s assets and liabilities are the following:

• Revenue from customer contracts;

• Capitalisation and amortisation of development costs; and

• Determination of the term of the lease as a lessee in the event of agreements with termination

options.

Revenue from customer contracts

The Group generated £32.6 million in revenue from customer contracts during the year ended

31 December 2025 (2024: £51.9 million). At year end, net contract liabilities are at £23.1 million

(2024: £2.5 million). Note 2 provides a detailed explanation of Group’s revenue recognition

accounting policies and the change in net contract liability position compared to the prior year.

Customer contracts typically include engineering services, technology hardware sales, and licensing

agreements. Recognising revenue from these contracts requires judgement in several key areas:

Enforceable rights: In determining the contract length, we assess each contract’s termination

clauses to determine if there are substantive termination penalties such that enforceable rights exist

across the contracted term.

Identifying performance obligations: We assess each contract to determine the distinct promises

made to the customer. This involves judgement, as each contract can have unique elements.

Allocating revenue: We determine the appropriate allocation of revenue to each distinct performance

obligation within a contract. This requires judgement of the relative value of each element.

Assessing variable consideration: Some contracts include variable consideration. These amounts

are evaluated, including any limitations on their recognition, to ensure revenue is recognised

appropriately.

A key element of revenue recognition involves determining the nature of our technology

licences. This requires judgement to distinguish between granting a right to use existing

intellectual property (IP) and a right to access future IP developments. For example, if a

customer gains access to our existing IP at a specific point in time, this is typically treated as

a right to use licence. In contrast, where a contract confers the customer with the right to

benefit from future IP developments as they occur, that is more likely to be treated as a right

to access licence. Determining the point at which the customer fully benefits from the IP also

requires judgement, considering factors such as the customer’s experience with solid oxide

cell technology.

These judgements are based on a thorough review and interpretation of the specific terms

and conditions within each customer contract. Revenue is recognised to the extent that it is

highly probable that there will not be a significant reversal in the amount of cumulative revenue

recognised in a future reporting period.

Capitalisation and amortisation of development costs

When determining the criteria for starting, and subsequently ceasing, the capitalisation

of development costs as an internally generated asset, IAS 38 requires that strict criteria

are met; in particular, that it is probable that future economic benefits will result from the

development asset.

Following the signing of commercial contracts with strategic partners in 2018, management

concluded that the probability of future economic benefits for the Group’s SOFC platform had

been met, enabling capitalisation during the period of focused product development through to

2024, when the technology reached sufficient technical maturity to cease further capitalisation.

Subsequent innovation activity, including optimisation of SOEC, is undertaken through agile,

cross-functional development structures in which research and development phases occur

concurrently. As these programmes have not yet reached a stage where technical feasibility

can be evidenced, related expenditure does not meet the IAS 38 capitalisation threshold and is

expensed as incurred.

Determining when capitalisation should commence is a critical judgement, as is the basis for the

appropriate stage at which to cease capitalising ongoing costs and to commence amortising the

capitalised asset.

Within the Group there is an established technology and product development process with

gated milestones that assesses the technology and product viability and maturity. Generally, until

a programme has passed the required milestone gate, all expenditure is deemed “Research” and

expensed as incurred. Identifiable development expenses incurred after the milestone gate is

passed are capitalised within the parameters set out in the accounting policy. Once a programme

has passed another milestone gate, confirming development activities are completed, the

capitalisation of costs ceases. Any further expenditure is expensed, and amortisation of the

intangible asset commences.

Application of the above policy requires management’s judgement around key areas such

as future commercial feasibility of the development and that future economic benefit will

be derived from the development. The Executive Committee regularly reviews the critical

judgements around capitalisation and useful economic life of development projects.

112 Ceres Annual Report 2025

Financial statements

Notes to the consolidated financial statements continued

for the year ended 31 December 2025

1. Accounting policies used in the preparation of the financial statements

continued

Capitalisation and amortisation of development costs continued

During the year ended 31 December 2025, the application of these judgements resulted

in no development costs being capitalised (2024: £2.3 million) (see Note 11). The net book

value of capitalised development costs as at 31 December 2025 decreased to £16.0 million

(31 December 2024: £19.9 million), and amortisation of £3.8 million (2024: £1.3 million) was

charged during the year.

Determination of the term of the lease as a lessee in the event of agreements with

termination options

Ceres determines the term of the lease as the non-cancellable period for which the lessee

has the right to use the asset as well as periods covered by termination options if Ceres is

reasonably certain that it will not exercise that option. Both leases for premises contain a break

clause. Ceres applies judgement in evaluating whether it is reasonably certain that an option

to renew will be exercised or that an option to terminate the lease will not be exercised. In this

context, Ceres considers all relevant facts and circumstances that create an economic incentive

for Ceres to exercise, or not to exercise, the termination option.

Significant estimates and assumptions

Significant estimates and associated assumptions are those that have a significant risk of resulting

in a material adjustment to the carrying amounts of assets and liabilities within the next financial

year. Although these estimates are based on management’s best knowledge of the amount,

event or actions, actual results may ultimately differ from these estimates. The estimates and

underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are

recognised in the period in which the estimate is revised.

The most significant estimates, assumptions and sources of uncertainty applicable in preparing

the consolidated financial statements are set out below:

• Determination of period-related revenue recognition over the course of customer contracts; and

• Recognition and measurement of dilapidation provisions.

Determination of period-related revenue recognition over the course of

customer contracts

For engineering services and development licences, revenue is recognised over time as the

performance obligation is progressively satisfied. The determination of the amount and timing

of revenue recognition requires significant estimation to assess the stage of completion for

contracts with these performance obligations.

The stage of completion for both engineering services and development licences is typically

determined using an input method, based on progress towards the contracted completion date

of the statement of work, assessed by comparing time elapsed with time remaining. Changes in

these estimates may impact the revenue recognised at the reporting date.

Recognition and measurement of dilapidation provisions

As at 31 December 2025, the Group has recognised dilapidation provisions of £2.4 million

(31 December 2024: £2.3 million). The amount of provision is based on the expected cost at the

termination of the lease agreements based on the current condition of the properties, to bring

the leasehold properties back to their original condition. The provision has been based on an

independent surveyor’s report; however, management has applied judgement and interpretation

to determine the best estimate of the expenditure required to settle the Group’s probable liability

based on this valuation, as well as to determine appropriate discount and inflation rates to apply.

If total dilapidation costs ended up being 10% higher than expected, additional costs incurred

would be in the order of £0.2 million (2024: £0.3 million). Note 21 sets out further details around

the Group’s dilapidation provisions.

Other estimates

Recognition and measurement of warranty provisions and contingent liabilities

As at 31 December 2025, the Group recognised warranty provisions of £0.2 million

(31 December 2024: £0.4 million). When recognising and measuring provisions, assumptions

are required about probability of occurrence, maturity and level of risk. Determining whether a

current obligation exists is usually based on review by internal experts. The amount of provision

is based on expected expenses, and is either calculated by assessing the specific case in light of

empirical values, outcomes from comparable circumstances, evidence provided from historical

commercial settlements, or else estimated by experts.

Management believes that, based on existing knowledge, it is reasonably possible that warranty

costs could be up to 50% higher or lower than recognised. This could result in the Group

incurring additional costs of up to c.£0.1 million over the next 12 months (2024: £0.2 million)

as a result. Note 21 sets out further details around the Group’s warranty provisions.

New standards and amendments applicable as of 1 January 2025

The Group has adopted all standards, interpretations amended or newly issued by the IASB that

were effective in the year. There is one amendment to IFRS Accounting Standards that became

applicable from 1 January 2025, adoption has not had any material effect on the consolidated

financial statements:

• IAS 21 The Effect of Changes in Foreign Exchange (Amendment – Lack of exchangeability).

As at 31 December 2025, the following agenda decisions were issued for preparation of annual

reports in 2025. None of the agenda decisions were relevant to the Group’s financial statements:

• February 2025: Classification of Cash Flows related to Variation Margin Calls on ‘Collateralised-

to-Market’ Contracts (IAS 7);

• April 2025: Recognition of Revenue from Tuition Fees (IFRS 15);

• April 2025: Recognition of Intangible Assets from Climate-related Expenditure (IAS 38);

• April 2025: Guarantees Issued on Obligations of Other Entities; and

• July 2025: Assessing indicators of Hyperinflationary Economies (IAS 29).

113Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

1. Accounting policies used in the preparation of the financial statements

continued

New standards and amendments issued but not yet effective

The following adopted IFRSs have been issued, have an effective date for annual periods

beginning on or after 1 January 2026 and have not been applied by the Group in these

consolidated financial statements. Their adoption is not expected to have a material effect on the

consolidated financial statements unless otherwise indicated.

The following amendments are effective for the periods beginning 1 January 2026 and 1 January

2027, but have not yet been adopted by the UK Endorsement Board:

• IFRS 9 Financial Instruments (Amendment – Classification and measurement of financial

instruments);

• IFRS 9, IFRS 7 Presentation and disclosure of financial instruments (Amendment – Contracts

referencing nature-dependent electricity);

• IAS 21 Foreign currencies (Amendment – Translation to Hyperinflationary Presentation

Currency);

• IFRS 18 Presentation and Disclosure in Financial Statements is applicable from 1 January 2027

(endorsed in the UK on 10 December 2025). Management have not yet assessed the impact;

and

• IFRS 19 Subsidiaries without Public Accountability Disclosures is applicable from 1 January

2027 has not yet been endorsed by the UK.

2. Revenue

Revenue and direct costs

Revenue comprises the fair value of the consideration received or receivable for the provision

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.

Revenue primarily consists of amounts received or receivable from licence, development,

evaluation and supply contracts.

Manufacturing licence agreements

Manufacturing licence agreements serve to licence core cell and stack IP with associated

performance obligations to support the partner through to factory launch and royalty generation.

As the core IP has matured, these agreements have moved from having a focus on collaborative

development of the IP, to a less bespoke licence and support model. These two types of

manufacturing licence agreement are referred to below as “legacy” and “new”.

Legacy manufacturing licence agreements

Engineering services – the nature of work typically includes joint development of core IP along

with stand-ready support to assist the partner to factory launch. Revenue is allocated based on

an initial cost estimate with an appropriate margin uplift applied (cost-plus margin). Revenue is

recognised based on an input method as the performance obligation is satisfied.

Prototype hardware – the nature of the hardware is to supply the partner with hardware to utilise

in their factory and system development. Revenue is allocated based on an initial cost estimate

with an appropriate margin uplift applied (cost-plus margin). Control is assessed to have passed to

the partner on delivery and therefore the performance obligation is satisfied at a point in time.

Right to use technology transfer licence – the right to use technology transfer licence provides

the partner with the required IP to design and construct a manufacturing facility. The performance

obligation is satisfied at a point in time when the technology transfer is provided to the partner.

Right to access development licence – the right to access development licence provides the

partner the right to access future technology advancements up until the start of production. The

performance obligation is transferred to the partner evenly over time up until the partner starts

commercial production.

Revenue for both licences is allocated on a residual basis after the allocation of engineering

services and prototype hardware.

New manufacturing licence agreements

Right to use technology transfer licence – the right to use technology transfer licence provides

the partner with the required IP to design and construct a manufacturing facility. Revenue is

allocated by reference to a stand-alone selling price observable for the performance obligation.

The performance obligation is satisfied at a point in time when the technology transfer is

provided to the partner.

Prototype hardware – the nature of the hardware is to supply the partner with hardware to utilise

in their factory and system development. Revenue is allocated based on an initial cost estimate

with an appropriate margin uplift applied (cost-plus margin). Control is assessed to have passed to

the partner on delivery and therefore the performance obligation is satisfied at a point in time.

Right to access development licence – the right to access development licence provides the

partner the right to access future technology advancements up until the start of production. The

performance obligations transferred to the partner evenly over time up until the partner starts

commercial production.

Engineering services – the nature of the work typically comprises stand-ready support to help

our partners with their commercialisation targets. The performance obligation is recognised as

support occurs and, without evidence to the contrary, is transferred to the partner evenly over

time up until the partner starts commercial production.

Where not directly observed, revenue is allocated to the right to access development licence

and engineering services on a residual basis after allocation of revenue to the right to use licence

and provision of prototype hardware.

114 Ceres Annual Report 2025

Financial statements

Notes to the consolidated financial statements continued

for the year ended 31 December 2025

2. Revenue continued

Manufacturing licence agreements continued

New manufacturing licence agreements continued

Technology evaluation occurs when partners evaluate Ceres technology for potential further

uses. The performance obligations typically consist of prototype hardware and engineering

services and revenue is allocated in line with legacy manufacturing licence agreements. For

prototype hardware recognition of revenue depends on the nature of the evaluation, if the

control of the hardware remains with Ceres, revenue is recognised evenly over the period of

evaluation. If the control is transferred to the customer, revenue is recognised at the point in time

control is passed to the customer.

Other licence, development and supply agreements

Aside from the agreement types laid out above, Ceres also engage in other licence, development

and supply agreements with partners. These could contain right to use and right to access

licences, engineering services and prototype hardware supply and are typically accounted for in

the same manner as legacy manufacturing licence agreements.

Material differences in the amount of revenue in any given period may result if the judgements

or estimates prove to be incorrect or if management’s estimates change on the basis of

development of the business or market conditions. This is considered further in the significant

judgements and estimates section of Note 1. The revenue recognition is subject to certainty of

receipt of cash, or when any specific conditions in agreements have been met. Where there is a

timing difference between the recognition of revenue and invoicing under a contract, a contract

asset or liability is recognised.

If a loss is expected in respect of a contract, the entire loss is recognised immediately in the

Consolidated Statement of Profit and Loss.

Variable consideration, such as for the achievement of performance targets or variation requests

under negotiation with the customer at the reporting date, can be included in the transaction

price associated with the performance obligations. These estimates of the expected value or

most likely amount are recognised to the extent that it is highly probable that there will not be a

significant reversal in the amount of cumulative revenue recognised in a future reporting period.

Contract modifications are treated as a separate contract if the scope of the contract increases

because of the addition of distinct goods or services, and the price of the contract increases by

an amount of consideration that reflects the stand-alone selling price of the additional promised

goods or services.

Where a contract modification does not meet these criteria, it is accounted for as an adjustment

to the existing contract, either prospectively, where the remaining goods or services are distinct

from the goods and services transferred before the modification, or through a cumulative

catch-up adjustment, where the remaining services are not distinct and are part of a single

performance obligation that is only partially satisfied when the contract is modified.

Geographical market

	2025	2024
	£’000	£’000
Europe	4,571	8,689
Asia	27,989	43,064
North America	83	138
	32,643	51,891

For the year ended 31 December 2025, the Group has identified four major customers (defined

as customers that individually contributed more than 10% of the Group’s total revenue) that

accounted for approximately 33%, 23%, 17% and 11% of the Group’s total revenue recognised

in the year (year ended 31 December 2024: three customers that accounted for approximately

44%, 26% and 13% of the Group’s total revenue recognised for that year).

Major product/service lines

	2025	2024
	£’000	£’000
Provision of technology hardware	10,289	6,938
Engineering services and licences	22,244	44,953
Royalties	110	—
	32,643	51,891

Timing of transfer of goods and services

	2025	2024
	£’000	£’000
Products and services transferred at a point in time	14,328	33,030
Products and services transferred over time	18,315	18,861
	32,643	51,891

Contract-related assets and liabilities

		31 Dec 2025	31 Dec 2024	1 Jan 2024
	Note	£’000	£’000	£’000
Trade receivables	14	14,938	9,872	3,422
Contract assets – accrued income		143	7,333	1,575
Contract assets – deferred contract costs		—	875	—
Total contract-related assets		15,081	18,080	4,997
Contract liabilities - variable consideration
constrained		(1,500)	(525)	—
Contract liabilities - deferred income		(21,784)	(10,157)	(7,469)
Total contract liabilities		(23,284)	(10,682)	(7,469)

115Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

2. Revenue continued

Contract-related assets and liabilities continued

No material expected credit losses were recognised against trade receivables or contract assets

in either the current or prior year. Further details regarding the composition of trade receivables

can be found in Note 14.

The contract assets – accrued income – relates to consideration for work completed but not

billed at the reporting date. The contract assets are transferred to trade receivables when the

work is invoiced. The decrease in the balance compared with 31 December 2024 is a result of

significant up front revenue recognised in the prior year from two new licence customers and

timing differences with invoicing.

The contract assets – deferred contract costs – relates to costs to fulfil our performance

obligations under an obtained contract, but before transferring goods or services to the

customer. Contract cost assets are amortised on a systematic basis consistent with the expected

pattern of transfer of the related goods or services under the contract.

The contract liabilities – deferred income – relates to invoices raised in advance of the performance

obligation being satisfied. There are no significant financing components associated with

deferred income. The increase in the balance compared with the prior year is primarily due

to timing differences between revenue recognised on work performed and raising invoices to

customers.

The contract liabilities – The contract liabilities – variable consideration constrained – represent

amounts deferred where variable consideration has been constrained due to the risk of significant

revenue reversal under IFRS 15. Although the related performance obligations have been satisfied

and invoiced, revenue is recognised only when the uncertainty is resolved.

Revenue recognised in the current year that was included in the contract liabilities – deferred

income – balance at the beginning of the year was £5,550,000 (31 December 2024: £3,284,000).

Significant changes in the contract assets and the contract liabilities balances during the year are

as follows:

	Contract	Contract
	assets	liabilities
	2025	2025
	£’000	£’000
Revenue recognised that was included in the contract liability
balance at the beginning of the year	—	5,550
Increases due to invoices raised, excluding amounts recognised as revenue	—	(18,152)
Transfers from contract assets recognised at the beginning of the year to revenue	(7,299)	—
Increase in contract asset due to satisfaction of performance
obligations for which consideration is not yet due	109	—

	Contract	Contract
	assets	liabilities
	2024	2024
	£’000	£’000
Revenue recognised that was included in the contract liability
balance at the beginning of the year	—	3,284
Increases due to invoices raised, excluding amounts recognised as revenue	—	(6,497)
Transfers from contract assets recognised at the beginning of the year to revenue	(1,575)	—
Increase in contract asset due to satisfaction of performance
obligations for which consideration is not yet due	7,333	—

The revenue expected to be recognised in future years for evaluation and development, supply

and licence agreements in respect of performance obligations that are unsatisfied (or partially

unsatisfied) at the year end is:

	2026	2027	2028
	£’000	£’000	£’000
Evaluation, development, supply and licence agreements 1	39,873	21,624	12,026

The comparatives as at 31 December 2024 are as follows:

	2025	2026	2027
	£’000	£’000	£’000
Evaluation, development, supply and licence agreements 1	26,200	24,029	9,671

1. Excluding future royalties receivable from partners.

The above analysis excludes revenue which is contracted but contingent upon milestones or

decision criteria which are at the customers’ discretion.

116 Ceres Annual Report 2025

Financial statements

Notes to the consolidated financial statements continued

for the year ended 31 December 2025

3. Loss before taxation

Research and development

The Group undertakes research and development activities and expenditures not meeting

the conditions for capitalisation (see Note 11), are written off as incurred and charged to the

Consolidated Statement of Profit and Loss.

Government grants

Grants are recognised on a case-by-case basis. Revenue grants are recognised in the

Consolidated Statement of Profit and Loss as other operating income as the related costs are

incurred and expensed. The reimbursement of the cost of an item of plant and equipment or

intangible by way of a capital grant is presented as deferred income and recognised in the

Consolidated Statement of Profit and Loss as other operating income on a basis consistent with

the depreciation or amortisation of the asset over its estimated useful life.

For grants with no technical milestones, and where recovery is reasonable, the grant is recognised on

an accruals basis in order to match the associated expenditure with the grant income. For grants with

technical milestones, these grants are held on the Consolidated Statement of Financial Position as

deferred income and are recognised only when the relevant milestone has been achieved.

	2025	2024
	£’000	£’000
Operating costs are split as follows:
Research and development costs	48,559	48,531
Administrative expenses	14,199	18,014
Commercial expenses	7,315	7,782
	70,073	74,327
Loss before taxation is stated after (crediting)/charging:
Other operating income – grant income	(244)	(244)
Other operating income – RDEC tax credit	(2,924)	(2,602)
Other operating income – total	(3,168)	(2,846)
Staff costs, including share-based payments (Note 5)	41,452	44,996
Cost of inventories recognised as expense (Note 13)	5,168	7,073
Depreciation of property, plant and equipment (Note 9)	7,100	7,472
Depreciation of right-of-use assets (Note 10)	753	710
Amortisation of intangible assets (Note 11)	3,858	1,374
Repairs expenditure on property, plant and equipment	1,017	841
Net change in fair value of financial instruments at fair value through profit or loss	90	(99)
Net foreign exchange (gain)/loss recognised in operating costs	(88)	136
Net foreign exchange loss recognised in finance expense	—	79

Services provided by the Group’s auditor

During the year the Group obtained the following services from the Group’s auditor as detailed below:

	2025	2024
	£’000	£’000
Fees payable to the Company’s auditor for the audit of parent
Company and consolidated financial statements	136	127
Fees payable to the Company’s auditor for other services:
– the audit of the Company’s subsidiaries	328	329
– audit-related assurance services – review of interim financial
results, including audit assurance	32	31
– audit-related assurance services – 2023 audit extension fees	—	218
	496	705

4. Finance income and expense

Interest income and expense

Interest income and expense is recognised in the Consolidated Statement of Profit and Loss in

the year in which it is earned or accrued.

	2025	2024
	£’000	£’000
Interest received	4,060	5,807
Total interest income	4,060	5,807
Interest on lease liabilities	(245)	(243)
Unwinding of discount on provisions	(92)	(40)
Unwinding of the finance component of a customer contract	(250)	—
Foreign exchange loss on cash, cash equivalents and short-term
deposits	—	(79)
Total interest expense	(587)	(362)

117Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

5. Employees and Directors

The average number of persons (including Executive Directors) employed by the Group during

the year was:

	2025	2024
	Number	Number
By activity:
Research and development	201	364
Prototype production	175	102
Administration	49	62
Commercial	37	18
	462	546

	2025	2024
	£’000	£’000
Staff costs (for the above persons) comprised:
Wages and salaries, including compensation for loss of office	33,761	37,278
Social security costs	4,112	4,289
Other pension costs (Note 6)	2,319	2,465
Share-based payments (Note 24)	1,260	964
	41,452	44,996
Less: staff costs absorbed	(4,220)	(6,389)
Staff costs expensed in the year	37,232	38,607

In the above, absorbed staff costs relates to costs that have been recognised on the

Consolidated Statement of Financial Position. This arises upon the creation of inventory work in

progress. In 2024 this also included capitalisation of intangible assets.

	2025	2024
	£’000	£’000
Directors’ emoluments:
Aggregate emoluments	1,285	1,658
Company contributions to defined contribution pension schemes	54	49
Gain on exercise of share options and other share schemes 1	—	363
	1,339	2,070

1. The Directors had LTIPs with an aggregate value of £1,501,736 exercisable as at 31 December 2025 (31 December

2024: £1,120,513).

	2025	2024
	£’000	£’000
Highest-paid Director:
Aggregate emoluments	756	872
Company contributions to defined contribution pension schemes	30	25
Gain on exercise of share options and other share schemes	—	363
	786	1,260

Two Directors (2024: two Directors) have retirement benefits accruing under defined

contribution pension schemes.

Additional information on the emoluments of the Directors, together with information regarding

the share interests and share options of the Directors, is included in the Remuneration Report on

pages 72 to 90, which forms part of these audited financial statements.

Key management compensation

The Directors consider that the key management of the Group comprises the Executive

Directors, Non-Executive Directors and the Executive Committee. The key management

compensation is summarised in the following table:

	2025	2024
	£’000	£’000
Salaries and other short-term employment benefits	3,374	4,513
Post-employment benefits	118	130
Share-based payments	13	206
	3,505	4,849

118 Ceres Annual Report 2025

Financial statements

Notes to the consolidated financial statements continued

for the year ended 31 December 2025

6. Pensions

Pension scheme arrangements

The Group operates a defined contribution pension plan for employees. The assets of the

scheme are held separately from those of the Group in independently administered funds. The

plan is a post-employment benefit plan under which the Group pays fixed contributions during

the employee’s service and will have no legal or constructive obligation to pay amounts after the

employee’s service ends. Obligations for contributions to defined contribution pension plans are

recognised as an expense in the Consolidated Statement of Profit and Loss in the period during

which services are rendered by employees.

The pension charge represents contributions payable by the Group to the funds and amounted

to £2,319,000 (31 December 2024: £2,465,000). There was no outstanding payable to the

funds as at 31 December 2025 (31 December 2024: £nil).

7. Taxation and deferred taxation

Taxation

The taxation charge for the year comprises current and deferred tax and any adjustment to

tax payable or receivable in respect of previous years. Tax is recognised in the Consolidated

Statement of Profit and Loss except to the extent that it relates to items recognised directly

in equity, in which case it is recognised in equity. Pillar Two legislation has been enacted

or substantively enacted in certain jurisdictions in which the Group operates. However, this

legislation does not apply to the Group as its consolidated revenue is lower than €750 million.

The RDEC receivable represents the Directors’ best estimate of tax due to the Group at the year

end under the RDEC credit regime.

	2025	2024
	£’000	£’000
UK corporation tax	—	—
Foreign tax suffered	1,248	2,445
Adjustment in respect of prior periods	(8)	(12)
Taxation charge	1,240	2,433

The current tax rate is 25% (2024: 25%).

A tax charge has arisen as a result of expenditure surrendered and claimed under the SME R&D

regime in the prior year and foreign tax and withholding tax arising on licence income received

from customers based in China, South Korea and Taiwan. Withholding tax is recognised in the

statement of profit and loss in line with the recognition of the underlying revenues.

The tax result for the year is different from the standard rate of UK corporation tax of 25%

(2024: 25%). The differences are explained below:

	2025	2024
	£’000	£’000
Loss before taxation	(46,306)	(25,872)
Loss before taxation multiplied by the UK tax rate of 25%
(2024: 25%)	(11,577)	(6,468)
Effects of:
Expenses not deductible	809	110
Effect of overseas tax rates	1,268	1,973
Adjustment in respect of prior periods – overseas tax	(7)	(12)
Movement in deferred tax not recognised	10,747	6,830
Total taxation charge	1,240	2,433

Deferred taxation

Deferred tax is provided on temporary differences between the carrying amounts of assets

and liabilities for financial reporting purposes and the amounts used for taxation purposes.

The following temporary differences are not provided for: the initial recognition of assets or

liabilities that affect neither accounting nor taxable profit other than in a business combination;

and differences relating to investments in subsidiaries to the extent that they will probably not

reverse in the foreseeable future. The amount of deferred tax provided is based on the expected

manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates

enacted or substantively enacted at the year end.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits

will be available against which the temporary difference can be utilised.

A deferred tax liability in respect of intangible fixed assets is recognised where tax relief has been

accelerated through RDEC credits. An equivalent deferred tax asset in respect of fixed asset

timing differences is therefore also recognised.

	Opening		Closing
	temporary		temporary
	difference		difference
	(Asset)/liability	Movement	(Asset)/liability
	£’000	£’000	£’000
Fixed asset timing differences	(3,623)	658	(2,965)
Intangible fixed asset deferred tax liability	3,623	(658)	2,965
Net deferred tax (asset)/liability recognised	—	—	—

119Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

7. Taxation and deferred taxation continued

Deferred taxation continued

Potential deferred tax assets have not been recognised. The gross temporary differences at the

year end are set out below:

	2025	2024
	£’000	£’000
Temporary differences:
Difference between capital allowances and depreciation	(20,455)	(9,560)
Deductions relating to share options	(422)	(2,374)
Other timing differences	(142)	(194)
Losses carried forward	(279,028)	(243,011)
	(300,047)	(255,139)

The deferred tax assets have not been recognised as the Directors consider that it is not probable

that the asset will be realised in the foreseeable future. The element of the RDEC credit that can

only be set off against future UK corporation tax liability is £4,054,000 (2024: £3,423,000) and

has not been recognised as the Directors consider that it is not probable that this asset will be

realised in the foreseeable future and it does not have an expiry date.

8. Loss per share

Basic and diluted loss per £0.10 ordinary share of 24.52p for the year ended 31 December 2025

(31 December 2024: 14.64p) is 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 reported during the year, there is no dilution of losses per share for the

year ended 31 December 2025 (31 December 2024: no dilution).

The Group has outstanding share-based payment awards that could potentially dilute earnings

per share in future periods; however, given the losses reported, these were anti-dilutive for the

year ended 31 December 2025 and have therefore been excluded from the diluted loss per

share calculation.

	2025	2024
	£’000	£’000
Loss for the financial year attributable to shareholders	(47,546)	(28,305)
Weighted average number of shares in issue	193,896,776	193,321,401
Loss per £0.10 ordinary share (basic and diluted)	(24.52)p	(14.64)p

9. Property, plant and equipment

Property, plant and equipment

Property, plant and equipment is stated at cost less accumulated depreciation and accumulated

impairment losses. The 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 costs are charged to the Consolidated Statement of Profit and Loss

during the financial period in which they are incurred. The Directors annually consider the need

to impair these assets.

Depreciation is charged to the Consolidated Statement of Profit and Loss on a straight-line basis

over the estimated useful lives of each part of an item of property, plant and equipment. The

estimated useful lives are as follows:

Leasehold improvements	Ten years or the lease term if shorter
Plant and machinery	Three to ten years
Computer equipment	Three years
Fixtures and fittings	Three to ten years

Depreciation methods, useful lives and residual values are reviewed, and adjusted if appropriate,

at each balance sheet date.

The carrying values of property, plant and equipment are reviewed on an ongoing basis for any

indication of impairment. Where any indication of impairment exists, the recoverable value of the

assets is estimated. An impairment loss is recognised in the Consolidated Statement of Profit and

Loss whenever the carrying value of property, plant and equipment exceeds its recoverable amount.

Assets under construction represents 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.

120 Ceres Annual Report 2025

Financial statements

Notes to the consolidated financial statements continued

for the year ended 31 December 2025

9. Property, plant and equipment continued

Property, plant and equipment continued

	Leasehold	Plant and	Computer	Fixtures	Assets under
	improvements	machinery	equipment	and fittings	construction	Tota l
	£’000	£’000	£’000	£’000	£’000	£’000
Cost
At 1 January 2024	8,813	31,317	2,042	391	6,429	48,992
Additions	554	2,786	29	—	1,805	5,174
Transfers	32	2,357	—	—	(2,389)	—
Disposals	(267)	(640)	(321)	(15)	—	(1,243)
At 31 December 2024	9,132	35,820	1,750	376	5,845	52,923
Additions	161	30	15	—	1,570	1,776
Transfers	386	2,055	—	—	(2,441)	—
Disposals	(168)	(1,435)	(259)	(16)	—	(1,878)
At 31 December 2025	9,511	36,470	1,506	360	4,974	52,821
Accumulated depreciation
At 1 January 2024	3,844	17,273	1,725	268	—	23,110
Charge for the year	1,564	5,635	224	49	—	7,472
Depreciation on disposals	(267)	(640)	(321)	(15)	—	(1,243)
At 31 December 2024	5,141	22,268	1,628	302	—	29,339
Charge for the year	1,238	5,719	91	52	—	7,100
Depreciation on disposals	(120)	(1,417)	(259)	(16)	—	(1,812)
At 31 December 2025	6,259	26,570	1,460	338	—	34,627
Net book value
At 31 December 2025	3,252	9,900	46	22	4,974	18,194
At 31 December 2024	3,991	13,552	122	74	5,845	23,584
At 1 January 2024	4,969	14,044	317	123	6,429	25,882

Assets under construction primarily comprise plant and machinery and leasehold improvements related to the Group’s manufacturing and testing facilities.

121Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

10. Right-of-use assets

The Group holds material leases for premises, electric vehicles (EV) and lower value leases for IT

equipment, with lease terms ranging from 1 year to 10 years. The Group recognises right-of-use

assets and lease liabilities (i.e. leases are recognised on the Consolidated Statement of Financial

Position) for all leases other than for short-term leased plant and machinery (i.e. leases that have

a term less than 12 months). Short-term lease expense is recognised in operating expenses.

Lease liabilities are initially measured at the present value of the remaining lease payments

discounted at the Group’s incremental borrowing rate. Subsequently, lease liabilities are measured

by adjusting to reflect interest on the lease liability, reducing the liability to reflect lease payments

made and to reflect any reassessment or lease modifications, or revised in-substance fixed lease

payments (refer to Note 20).

The associated right-of-use asset for property leases and other assets is initially measured at the

amount equal to the lease liability reduced for any lease incentives received, and increased for:

lease payments made at or before commencement of the lease; initial direct costs incurred; and

the amount of any provision recognised where the Group is contractually required to dismantle,

remove or restore the leased asset. Subsequently, right-of-use assets are measured at cost less

any accumulated depreciation and adjusted for any re-measurement of the lease liability. The re-

measured lease liability is calculated by discounting the revised lease payments using a revised

discount rate at the effective date of the modification. A corresponding adjustment is also made

to the right-of-use asset unless the scope of the lease is decreased, in which case a gain or loss

may be recognised.

Right-of-use assets are depreciated over the shorter of the lease term and the relevant useful

economic life following the periods set out in the property, plant and equipment depreciation

policy. Where the lease transfers ownership of the underlying asset to the lessee by the end

of the lease term or the cost of the right-of-use asset reflects that the lessee will exercise a

purchase option, the right-of-use asset is depreciated over its useful economic life.

Right-of-use assets are tested for impairment by applying IAS 36 Impairment of Assets. The

carrying values of right-of-use assets are reviewed on an ongoing basis for any indication of

impairment. Where any indication of impairment exists, the recoverable value of the assets is

estimated. An impairment loss is recognised in the Consolidated Statement of Profit and Loss

whenever the carrying value of a right-of-use asset exceeds its recoverable amount.

	Land and	Computer	Electric
	buildings	equipment	vehicles	Total
	£’000	£’000	£’000	£’000
Cost
At 1 January 2024	4,658	43	—	4,701
Additions	—	—	290	290
Disposal	—	—	(38)	(38)
Adjustment of lease term	145	—	—	145
At 31 December 2024	4,803	43	252	5,098
Additions	935	—	106	1,041
Disposal	—	—	(111)	(111)
At 31 December 2025	5,738	43	247	6,028
Accumulated depreciation
At 1 January 2024	2,522	38	—	2,560
Charge for the year	648	5	57	710
Disposal	—	—	(6)	(6)
At 31 December 2024	3,170	43	51	3,264
Charge for the year	658	—	95	753
Disposal	—	—	(52)	(52)
At 31 December 2025	3,828	43	94	3,965
Net book value
At 31 December 2025	1,910	—	153	2,063
At 31 December 2024	1,633	—	201	1,834
At 1 January 2024	2,136	5	—	2,141

122 Ceres Annual Report 2025

Financial statements

Notes to the consolidated financial statements continued

for the year ended 31 December 2025

11. Intangible assets

Research and development

Expenditure incurred on research and development is distinguished as relating to a research

phase or development phase with reference to the Group’s technology and product development

process.

All research phase expenditure is recognised in the Consolidated Statement of Profit and Loss as

an expense when incurred (see Note 3). Development phase expenditure is capitalised from the

point that all of the following conditions are met:

• The product or process under development is technically and commercially feasible;

• The Group intends to and has the technical ability and sufficient resources to complete the

development;

• Future economic benefits are probable; and

• The Group can measure reliably the expenditure attributable to the asset during its development.

Development phase activities involve a plan or design for the production of new or substantially

improved products or processes in relation to the Group’s core solid oxide cell and system

technology and intellectual property. The expenditure capitalised includes the cost of materials,

direct labour and an appropriate proportion of overheads.

Capitalisation of development phase activities continues until the point at which the product or

process under development meets its originally mandated technical specification. For product

and process development, this is at the point where the production design version is approved

or the development is completed.

Subsequent expenditure is capitalised where it enhances the functionality of the asset and

demonstrably generates an enhanced economic benefit to the Group. All other subsequent

expenditure on the product or process is expensed as incurred.

Where development activities are funded through government grants and the cost of those

activities is capitalised under this policy, the grants received are considered capital grants and

are presented as deferred income and recognised in the Consolidated Statement of Profit and

Loss as other operating income on a basis consistent with the depreciation or amortisation of the

asset over its estimated useful life.

Patent costs incurred in the procurement of patents in relevant territories are capitalised where

the Group considers those patents relate to technology that is deemed to be commercially

feasible. Other patent costs and costs to maintain patents once granted in those territories are

expensed to in the Consolidated Statement of Profit and Loss as incurred.

Subsequent to recognition, internally generated intangible assets are reported at cost less

accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a

straight-line basis over their estimated useful lives and is presented within operating costs. The

estimated useful lives are reviewed and adjusted as appropriate, at each balance sheet date.

Intangible assets which are not yet available for use are tested for impairment at each balance

sheet date. The following useful lives are used in the calculation of amortisation:

Capitalised development	Two to seven years
Patent costs	Three years
Perpetual software licenses	Three years

The carrying values of intangible assets are reviewed on an ongoing basis for any indication of

impairment. Where any indication of impairment exists, the recoverable value of the assets is

estimated. An impairment loss is recognised in the Consolidated Statement of Profit and Loss

whenever the carrying value of an intangible asset exceeds its recoverable amount.

	Internal
	developments
	in relation to	Internal	Perpetual
	manufacturing	development	software
	site	programmes	licences	Patent costs	Tota l
	£’000	£’000	£’000	£’000	£’000
Cost
At 1 January 2024	411	20,190	525	1,209	22,335
Additions	—	2,010	—	284	2,294
At 31 December 2024	411	22,200	525	1,493	24,629
Additions	—	—	87	—	87
At 31 December 2025	411	22,200	612	1,493	24,716
Accumulated amortisation
At 1 January 2024	328	2,514	285	154	3,281
Charge for the year	83	1,019	124	148	1,374
At 31 December 2024	411	3,533	409	302	4,655
Charge for the year	—	3,382	42	434	3,858
At 31 December 2025	411	6,915	451	736	8,513
Net book value
At 31 December 2025	—	15,285	161	757	16,203
At 31 December 2024	—	18,667	116	1,191	19,974
At 1 January 2024	83	17,676	240	1,055	19,054

The internal development intangible relates to the design, development and configuration of the

Group’s core solid oxide cell and system technology. Amortisation of capitalised development

commences once the developed technology is complete and is available for use. The net book

value of internal development programmes that are not available for use at 31 December 2025

are £nil (2024: £812,000). Amortisation of the 640 programme commenced in November 2024

with an assessed useful life of 7 years.

123Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

12. Subsidiary undertakings and associates

Details of the Group’s subsidiaries and associates at 31 December 2025 are as follows:

			Proportion of
			nominal value
			of shares held
	Country of	Description of	by the	Type of
Name of undertaking	incorporation	shares held	Company	entity
Ceres Power Ltd	England and Wales	£0.001 ordinary	100% 1	Subsidiary
		shares
Ceres Intellectual Property	England and Wales	£1.00 ordinary	100% 1	Subsidiary
Company Ltd		shares
Ceres Power Intermediate	England and Wales	£0.01 ordinary	100% 1	Subsidiary
Holdings Ltd		shares
Ceres Power Licence Company Ltd	England and Wales	£1.00 ordinary	100% 1	Subsidiary
		shares
Ceres Holdings International Ltd	England and Wales	£1.00 ordinary	100% 1	Subsidiary
		shares
Ceres Engineering Consulting	Shanghai, China	£1.00 ordinary	100% 2	Subsidiary
(Shanghai) Co Ltd		shares
RFC Power Ltd	England and Wales	£0.001 ordinary	100% 3	Subsidiary
		shares

1. Ceres Power Ltd, Ceres Intellectual Property Company Ltd, Ceres Holdings International Ltd and Ceres Power

Licence Company Ltd are 100% held directly by Ceres Power Intermediate Holdings Ltd. Registered address is

Viking House, Foundry Lane, Horsham, West Sussex, RH13 5PX.

2. 100% held directly by Ceres Power Ltd. Registered address is Office 1903i, Floor 19/F, Tower B, No.1065 West

Zhongshan Road, Changning District, Shanghai, China.

3. 100% held directly by Ceres Power Ltd. Registered address is Viking House, Foundry Lane, Horsham, West Sussex,

RH13 5PX.

The principal activity of:

• Ceres Power Ltd is the commercialisation and continued development of the Group’s fuel cell

and electrochemical technology.

• Ceres Intellectual Property Company Ltd is the administration of registered intellectual

property developed within the Group.

• Ceres Power Intermediate Holdings Ltd is as a holding company to the other Group companies

and to manage the Group’s cash, cash equivalents and investments.

• Ceres Power Licence Company Ltd is the provision of overseas licence and royalty services.

• Ceres Holdings International Ltd is dormant.

• Ceres Engineering Consulting (Shanghai) Co Ltd is to provide business development and

technical support to our business and partners in China.

• RFC Power Ltd is to develop novel flow battery technologies for energy storage systems.

On 1 August 2025, the Group obtained control of RFC Power Ltd and then acquired the

remaining share capital for £1 on 30 September 2025, resulting in Ceres Power Limited obtaining

full ownership. The net assets of RFC Power Ltd at the acquisition date were immaterial to

the Group’s financial position. At 31 December 2025, a loan of £375,000 was outstanding and

payable by RFC Power Ltd to Ceres Power Ltd.

Prior to this acquisition, RFC Power Ltd was accounted for as an associate. The Group

recognised its share of RFC Power Ltd’s loss for the period ended 31 July 2025 amounting to

£60,000, and the remaining carrying amount of the investment (£2,158,000) was fully impaired

before acquisition due to concerns regarding the entity’s ability to continue as a going concern.

From the date control was obtained, the Group has recognised the fair value of RFC Power Ltd’s

identifiable net assets and has consolidated its results for the five-month period to 31 December

2025 which are also not material.

The financial results of all subsidiaries listed above, together with the newly acquired RFC Power

Ltd from the date of acquisition, are included in these consolidated financial statements.

On 15 August 2022, the Group established a new international holding company, Ceres Holdings

International Ltd. This company is a 100% owned subsidiary of Ceres Power Intermediate

Holdings Ltd and is currently dormant.

124 Ceres Annual Report 2025

Financial statements

Notes to the consolidated financial statements continued

for the year ended 31 December 2025

13. Inventories

Inventories consist of raw materials, work in progress and finished goods.

Inventories are stated at the lower of cost and net realisable value. Cost comprises direct

material cost and, where applicable, direct labour costs and direct overheads that have been

incurred. Cost is calculated using the first-in, first-out (“FIFO”) method. Net realisable value

represents the estimated selling price less all estimated costs to completion and selling costs to

be incurred.

	31 Dec 2025	31 Dec 2024
	£’000	£’000
Raw materials	1,313	1,621
Work in progress	1,319	759
Finished goods	571	376
	3,203	2,756

During the year ended 31 December 2025, inventories of £5.2 million (31 December 2024:

£7.1 million) were recognised as an expense and were included within cost of sales. As at 31

December 2025, a provision of £0.1 million was recognised against quarantined stacks (2024:

£0.1 million).

14. Trade and other receivables

Trade and other receivables

Trade receivables are recognised initially at transaction price and subsequently held at amortised

cost using the effective interest method, less loss allowances. Loss allowances are calculated

using the simplified approach to determine expected credit losses, taking into account both

historical payment profiles and any credit losses experienced, together with forward-looking

macroeconomic factors. The carrying amount of these balances approximates to fair value due

to the short maturity of amounts receivable. Payment terms generally range between 30 and 60

days depending on the customer.

Although the Group’s past experience of significant credit losses on these assets has been

negligible, the impairment assessment performed by the Group considers both past experience

and future expectations of credit losses. As a result of this assessment, the Group considers the

risk of expected credit losses on trade receivables and contract assets to be immaterial. Further

details on this assessment are provided in Note 19.

	31 Dec 2025	31 Dec 2024
	£’000	£’000
Current:
Trade receivables	14,938	9,872
VAT receiva ble	687	1,120
RDEC receivable	2,814	6,790
Other receivables	297	103
	18,736	17,885
Non-current:
Other receivables	741	741

The RDEC receivable is a receivable from the UK Government for the Group’s 2025 RDEC claim.

Non-current other receivables comprise rent deposit guarantees held by landlords in respect of

the Group’s leased properties. There is no material difference between the fair value of trade

and other receivables and their carrying values and they are not materially overdue at the year

end. There are no expected credit losses recognised during the year ended 31 December 2025

(31 December 2024: £nil). The carrying amounts of the Group’s trade and other receivables are

primarily denominated in pounds sterling, euros and US dollars (as set out in Note 19).

15. Other current assets

	31 Dec 2025	31 Dec 2024
	£’000	£’000
Current:
Prepayments	1,449	1,430
	1,449	1,430

125Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

16. Cash, cash equivalents and investments

Cash and cash equivalents

Cash and cash equivalents includes cash at bank and in hand, pooled money market funds and

short-term deposits with an original maturity of less than or equal to one month.

Short-term investments

Short-term investments include bank deposits with an original maturity greater than one month

and a maturity as at the date of the Consolidated Statement of Financial Position of less than or

equal to 12 months.

	31 Dec 2025	31 Dec 2024
	£’000	£’000
Cash at bank and in hand	3,287	10,338
Money market funds	32,548	37,156
Cash and cash equivalents	35,835	47,494
Short-term bank deposits greater than one month and less than 12
months	47,437	54,971
	83,272	102,465

The Group holds surplus funds in accordance with the Treasury Policy, as set out in Note 19.

	Interest	31 Dec 2025	31 Dec 2024
	rate type	£’000	£’000
Interest rate risk profile of the Group’s financial assets:
Cash at bank and in hand	Floating	3,287	10,338
Money market funds	Floating	32,548	37,156
Short-term bank deposits greater than one month
and less than or equal to 12 months	Floating	23,308	22,635
Short-term bank deposits greater than one month
and less than or equal to 12 months	Fixed	24,129	32,336
		83,272	102,465

During the year ended 31 December 2025 the fixed rate short-term bank deposits were primarily

designated in pounds sterling, had remaining terms of between one month and two months (31

December 2024: between one and two months) and earned interest of between 3.84% and

4.02% (31 December 2024: 4.60% and 4.99%). The credit quality of financial assets has been

assessed by reference to external credit ratings.

17. Trade and other payables

Trade and other payables are initially recognised at fair value, which is typically the invoiced

amount and then held at amortised cost. Other payables include taxes and social security

amounts due on behalf of the Group’s employees.

	31 Dec 2025	31 Dec 2024
	£’000	£’000
Current:
Trade payables	1,352	2,007
Other payables	1,390	1,531
	2,742	3,538

18. Other liabilities

	31 Dec 2025	31 Dec 2024
	£’000	£’000
Current:
Accruals	3,907	6,581
Deferred income	242	244
	4,149	6,825
Non-current:
Deferred income	976	1,221

Accruals include estimates of amounts owed to suppliers that have not been invoiced at the year

end, and to the Group’s employees for various employee-related payments, including redundancy

payments. Deferred income consists of grant income and RDEC tax credits deferred in relation

to associated development costs which have been capitalised as an intangible asset. Grant

income is recognised in the Consolidated Statement of Profit and Loss in the same period as the

expenditure to which the grant relates.

126 Ceres Annual Report 2025

Financial statements

Notes to the consolidated financial statements continued

for the year ended 31 December 2025

19. Financial instruments

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 contracts, and in limited circumstances options, to

hedge against foreign currency-denominated income and expenditure commitments. The use of

financial derivatives is governed by the Group’s Treasury Policy, as approved by the Board. The

Group does not use derivative financial instruments for speculative purposes. Details of financial

instruments are shown later in this note.

Derivative financial instruments are recognised at fair value. The gains or losses on re-measurement

to fair value are recognised immediately in the Consolidated Statement of Profit and Loss as they

arise and are shown in Note 3.

The Group only uses derivative financial instruments to hedge foreign currency exposures

which arise from an underlying current or anticipated business requirement. The Group does

not currently apply hedge accounting to any derivatives in place, and derivatives are treated at

fair value through P&L. 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 material difference between the fair value and the carrying value of the Group’s

financial assets and financial liabilities. Carrying value approximates to fair value because of the

short maturity periods of these financial instruments.

None of the Group’s assets and liabilities were measured at fair value at 31 December 2025 (31

December 2024: none).

The fair values of all financial assets and financial liabilities by class, together with their carrying

amounts shown in the balance sheet, are as follows:

		Carrying		Carrying
		amount	Fair value	amount	Fair value
	Fair value	31 Dec 2025	31 Dec 2025	31 Dec 2024	31 Dec 2024
	hierarchy	£’000	£’000	£’000	£’000
Financial assets at amortised
cost
Trade and other receivables		15,235	15,235	9,975	9,975
Cash, cash equivalents and investments		83,272	83,272	102,465	102,465
		98,507	98,507	112,440	112,440
Financial assets measured at fair value through profit or loss
Forward exchange contracts	Level 2	—	—	8	8
Financial liabilities measured
at amortised cost
Trade and other payables and accruals		(5,205)	(5,205)	(9,407)	(9,407)

Capital management

The Group’s capital is considered to comprise cash at bank and short-term investments as set out

in Note 16. The Group’s approach to managing its capital is described in the “credit risk” section

below.

127Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

19. Financial instruments continued

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 interest rates and foreign currency exchange rates. The Board

reviews and agrees policies for managing each of these risks.

The principal risks addressed are as follows:

Credit risk

The Group’s exposure to credit risk arises from holdings of cash, cash equivalents and

investments, and if a counterparty or customer fails to meet its contractual obligations.

The Group’s primary objective to manage credit risk from its holdings of cash, cash equivalents

and investments is to minimise the risk of a loss of capital and eliminate loss of liquidity having a

detrimental effect on the business. The Group places surplus funds of no more than £30 million

per institution into pooled money market funds with same-day access and of no more than £12

million per institution for bank deposits with durations of up to 24 months. During the year the

Group’s Treasury Policy restricted investments in short-term money market funds to those which

carry short-term credit ratings of at least two of AAAm (Standard & Poor’s), Aaa-mf (Moody’s)

and AAAmmf (Fitch) and deposits with banks with minimum long-term rating of A-/A3/A and

short-term rating of A-2/P-2/F-1 for banks in which the UK Government holds less than 10%

ordinary equity.

Trade receivables at the year end relate to eight customers (31 December 2024: seven) of which

£320,000 relates to the Europe geographic region, £15,000 relates to the US and £14,603,000

to Asia (31 December 2024: £443,000 relates to the Europe geographic region, £280,000

relates to the US and £9,149,000 to Asia).

Contract assets at the year end related to two customers of which £28,000 relates to the

Europe geographic region and £115,000 to Asia (31 December 2024: related to four customers

of which £138,000 relates to the Europe geographic region and £7,195,000 to Asia).

The Group’s customers are generally large multinational companies or research institutions and

are consequentially not considered to add significantly to the Group’s credit risk exposure. All

trade receivables are due within the agreed credit terms for the current and preceding year and

are consequently stated at cost.

The Group applies the IFRS 9 simplified approach to measuring expected credit losses which

uses a lifetime expected loss allowance for all trade receivables and other contract assets

(primarily unbilled work in progress).

To measure expected credit losses, trade receivables and other contract assets are analysed

based on their credit risk characteristics including days past due and the specific payment profile

of the customer to determine a suitable historical loss rate. The historical loss rates are adjusted

to reflect current and forward-looking information on macroeconomic factors that the Group

considers could affect the ability of its customers to settle the receivables.

The Group has followed this approach as at 31 December 2025 and as a result has not recognised

a loss allowance for trade receivables or other contract assets (31 December 2024: no loss

allowance). Management does not consider that a reasonably possible change in the estimation

of expected credit losses would have a material impact on the results of the following year.

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 0.5% in interest

rates on all variable rate instruments held by the Group at 31 December 2025 would have

impacted the finance income by £304,000 (31 December 2024: £308,000).

The increase in sensitivity to interest rate changes is driven by the increase mix of variable rate

cash, cash equivalents and investments held at the balance sheet date when compared with

31 December 2024. Interest rate risk is mitigated by investing in deposit accounts of different

durations ranging from 32 days to up to 24 months and by utilising deposit accounts with fixed

interest rates.

128 Ceres Annual Report 2025

Financial statements

Notes to the consolidated financial statements continued

for the year ended 31 December 2025

19. Financial instruments continued

Liquidity risk

Liquidity risk is the risk arising from the Group not being able to meet its financial obligations. The Group manages its liquidity needs by preparing cash flow forecasts, including forecasting of the

Group’s liquidity requirements, to ensure the Group has sufficient cash to meet its operational needs.

The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the effect of netting agreements:

				31 December 2025					31 December 2024
	Carrying	Contractual	1 year	1 to 2	2 to 5		Carrying	Contractual	1 year	1 to 2	2 to 5
	amount	cash flows	or less	years	years	>5 years	amount	cash flows	or less	years	years	>5 years
	£’000	£’000	£’000	£’000	£’000	£’000	£’000	£’000	£’000	£’000	£’000	£’000
Non-derivative financial
liabilities
Trade and other payables and accruals	(5,205)	(5,205)	(5,205)	—	—	—	(9,407)	(9,407)	(9,407)	—	—	—
Lease liabilities	(2,409)	(2,619)	(1,027)	(993)	(321)	—	(2,223)	(2,590)	(1,027)	(812)	(751)	—
Derivative financial liabilities
Forward exchange contracts:
(Outflow)	—	—	—	—	—	—	(827)	(827)	—	—	—	—
Inflow	—	—	—	—	—	—	848	848	—	—	—	—

Foreign currency exposures

The Group’s primary transaction currency is pound sterling. Exposures to foreign currency-denominated contracted receivables and commitments arise from the Group’s overseas sales and

purchases, which are primarily denominated in euros, US dollars, Canadian dollars and Japanese yen.

The Group seeks to mitigate its foreign currency exposure by entering into forward currency exchange contracts, and in limited circumstances, currency options in accordance with the Group’s

Treasury Policy. Where the amounts to be paid and received in a specific currency are expected to largely offset one another, no further hedging activity is undertaken. Forward currency exchange

contracts and options are primarily entered into for significant foreign currency exposures that are not expected to be offset by other currency transactions. The Group’s objectives and policies are

largely unchanged in the reporting periods under review.

Forward exchange contracts include forward currency contracts to sell €1.0 million in total and buy US dollars over the next 12 months and considering the impact of foreign exchange, the carrying

value of derivative financial instruments asset (net) at the year end is £nil (2024: liability of £8,000).

129Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

19. Financial instruments continued

Foreign currency exposures continued

The table below shows the extent to which the Group has monetary assets and liabilities in currencies other than pounds sterling. Foreign exchange differences arising on the retranslation of these

monetary assets and liabilities are taken to the Consolidated Statement of Profit and Loss.

			Canadian	Japanese	Chinese
	Euro	US dollar	dollar	yen	renminbi	Other
31 December 2025	£’000	£’000	£’000	£’000	£’000	£’000
Exposures to foreign currency risk:
Cash and cash equivalents	1,321	120	—	4	171	19
Trade and other receivables	14	—	—	—	—	2
Other current assets	—	—	—	—	22	—
Trade payables and payments on account	(11)	(134)	—	—	(86)	—
Other current liabilities	—	—	—	—	(14)	—
Forward currency contracts – (outflow)/inflow	—	—	—	—	—	—
Balance sheet exposure	1,324	(14)	—	4	93	21

			Canadian	Japanese	Chinese
	Euro	US dollar	dollar	yen	renminbi	Other
31 December 2024	£’000	£’000	£’000	£’000	£’000	£’000
Exposures to foreign currency risk:
Cash and cash equivalents	2,268	2,910	171	52	167	5
Trade and other receivables	425	280	—	—	—	—
Other current assets	—	—	—	—	21	—
Trade payables and payments on account	(155)	(139)	—	—	—	—
Other current liabilities	—	—	—	—	(11)	—
Forward currency contracts – (outflow)/inflow	(827)	848	—	—	—	—
Balance sheet exposure	1,711	3,899	171	52	177	5

A 10% weakening of the following currencies against pound sterling at 31 December 2025 (or 31 December 2024) would have resulted in a profit or loss charge to the Consolidated Statement of

Profit and Loss by the amounts shown below. This calculation assumes that the change occurred at the balance sheet date and had been applied to risk exposures existing at that date.

130 Ceres Annual Report 2025

Financial statements

Notes to the consolidated financial statements continued

for the year ended 31 December 2025

19. Financial instruments continued

Foreign currency exposures continued

This analysis assumes that all other variables, in particular other exchange rates and interest rates,

remain constant. The analysis is performed on the same basis for the comparative period.

	Profit or (loss)
	2025	2024
	£’000	£’000
Euro	(132)	(171)
US dollar	1	(390)
Canadian dollar	—	(17)
Japanese yen	—	(5)
Chinese renminbi	(9)	(18)
Other	(2)	(1)

A 10% strengthening of the above currencies against pound sterling at 31 December 2025 (or 31

December 2024) would have had the equal but opposite effect on the above currencies to the

amounts shown above, on the basis that all other variables remain constant.

20. Lease liabilities

The Group leases certain assets under lease agreements. The lease liability consists of leases of

land and buildings and computer equipment. The property leases expire between June 2026 and

November 2028. Full details of the accounting policy under which leases are recognised are in

Note 10.

	£’000
Balance as at 1 January 2024	2,596
New finance leases recognised	290
Lease payments	(1,017)
Interest expense	243
Adjustment of lease term (see Note 10)	111
Balance as at 31 December 2024	2,223
New finance leases recognised	106
Lease payments	(1,037)
Interest expense	245
Disposals	(63)
Adjustment of lease term (see Note 10)	935
Balance as at 31 December 2025	2,409
Current	834
Non-current	1,575
Balance as at 31 December 2025	2,409
Current	731
Non-current	1,492
Balance as at 31 December 2024	2,223

Lease liability contractual maturities (representing undiscounted contractual cash flows) are set

out in Note 19.

131Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

21. Provisions and contingent liabilities

Provisions

A provision is recognised in the Consolidated Statement of Financial Position when the Group

has a present legal or constructive obligation as a result of a past event that can be reliably

measured and it is probable that an outflow of economic benefits will be required to settle the

obligation where relevant.

Contingent liabilities

Contingent liabilities are disclosed where the likelihood of payment of potential future cash

outflows is considered more than remote, but is not considered probable or cannot be measured

reliably.

Property dilapidations

Provisions have been made for future dilapidation costs on the leased properties. This provision

is the Directors’ best estimate as the actual costs and timing of future cash flows are dependent

on future events and are updated periodically. The estimate is supported by advice received

from professional advisers. Provisions are determined by discounting the expected future

cash flows at a pre-tax rate that reflects risks specific to the liability. Any difference between

expectations and the actual future liability will be accounted for in the period when such

determination is made.

Warranties

As at the year end, only a small proportion of technology hardware supplied or sold to

customers was provided with contractual warranties. The warranty provision is recognised in

accordance with IAS 37 as the majority of technology hardware supplied or sold to customers

has been provided without contractual warranties and there is no option to acquire a warranty

separately. Where a constructive obligation is considered to have been created through an

expectation or past practice, a provision for the associated costs of future claims has been

included at the year end. The Group recognises a provision for both contractual and constructive

obligation warranties when the underlying products and services are sold. The provision is based

on the past performance of the technology hardware, management’s knowledge, customer

expectations and a weighting of possible outcomes against their associated probabilities. Where

warranty obligations are not considered to be probable, they are not provided for but instead are

disclosed as contingent liabilities unless remote.

Settlement provision

At the year end, the Group recognised a provision of £1,980,000 in respect of an obligation

arising from the termination of a supply contract. The provision represents management’s best

estimate of the expenditure required to settle the obligation at the reporting date.

After the year end, the Group agreed and paid this settlement amount to the third party

involved.

The movement in provisions charged to the Consolidated Statement of Profit and Loss for

the year ended 31 December 2025 is set out below along with the value of provisions at 31

December 2024:

	Property			Contract
	dilapidations	Warranties	Settlement	losses	Total
	£’000	£’000	£’000	£’000	£’000
At 1 January 2024	2,282	603	—	44	2,929
Movements in the Consolidated
Statement of Profit and Loss:
Unwinding of discount	40	—	—	—	40
Unused provision reversed	—	(206)	—	—	(206)
Increase in provision	18	—	—	—	18
At 31 December 2024	2,340	397	—	44	2,781
Movements in the Consolidated
Statement of Profit and Loss:
Unwinding of discount	92	—	—	—	92
Unused provision reversed	—	—	—	(44)	(44)
Change in provision	(56)	(163)	1,980	—	1,761
At 31 December 2025	2,376	234	1,980	—	4,590
Current	—	234	1,980	—	2,214
Non-current	2,376	—	—	—	2,376
At 31 December 2025	2,376	234	1,980	—	4,590
Current	—	397	—	44	441
Non-current	2,340	—	—	—	2,340
At 31 December 2024	2,340	397	—	44	2,781

132 Ceres Annual Report 2025

Financial statements

Notes to the consolidated financial statements continued

for the year ended 31 December 2025

21. Provisions and contingent liabilities continued

Settlement provision continued

The dilapidation provision at 31 December 2025 represents the present value of costs to be

incurred in making good the Group’s leasehold properties at the break points of the leases in

approximately two to three years’ time. The main uncertainty relates to estimating the cost that

will be incurred at the end of the respective leases. A revaluation of the property dilapidation

was performed by a specialist for the year ended 31 December 2025.

The warranty provision at the year end is primarily the result of a constructive obligation and

reflects the Directors’ best estimate of the cost required to fulfil these obligations with respect

to a number of the Group’s customer contracts. Subsequent to their initial recognition, warranty

provisions are utilised or released over the periods of the various warranty obligations, which

are expected to be less than two years. There are several areas of uncertainty supporting the

provision, including determining the amount of technology hardware that may require repairing

or replacing and respective timing as manufacturing costs are expected to reduce over time.

In addition, as most of the Group’s warranty provisions relate to constructive rather than

contractual obligation and there is limited history of warranty claims with the Group’s current

customers, any final warranty obligation will be subject to negotiation with the respective

customer. The calculation of the warranty provision is subject to certain estimates, as set out

in Note 1.

22. Share capital

	31 Dec 2025		31 Dec 2024
	£’000		£’000
	Number
	of £0.10		Number
	ordinary		of £0.10
	shares	£’000	ordinary shares	£’000
Allotted and fully paid
At 1 January	193,699,380	19,370	192,968,096	19,297
Allotted £0.10 Ordinary shares on exercise of employee share options	995,163	99	731,284	73
At 31 December	194,694,543	19,469	193,699,380	19,370

During the year ended 31 December 2025, 995,163 ordinary £0.10 shares were allotted

for cash consideration of £99,516 on the exercise of employee share options (year ended

31 December 2024: 731,284 ordinary £0.10 shares were allotted for cash consideration

of £538,913) (see Note 24).

23. Reserves

The Consolidated Statement of Financial Position includes a merger reserve and a capital

redemption reserve. The merger reserve represents a reserve arising on consolidation using

book value accounting for the acquisition of Ceres Power Limited at 1 July 2004. The reserve

represents the difference between the book value and the nominal value of the shares issued

by the Company to acquire Ceres Power Limited. The capital redemption reserve was created

in the year ended 30 June 2014 when 86,215,662 deferred ordinary shares of £0.04 each

were cancelled.

24. Share options

Share-based payments

The Group has a number of employee and Executive share option and award schemes under

which it makes equity-settled share-based payments.

The fair value of share-based payment awards granted to employees is recognised as an

employee expense, with a corresponding increase in equity, over the period in which the

employees become unconditionally entitled to the awards. The fair value of the awards granted

is measured using option valuation models, taking into account the terms and conditions upon

which the awards were granted. The fair value of the share-based payment, determined at the

grant date, is measured to reflect vesting conditions and for market-related vesting conditions

there is no true-up for differences between expected and actual outcomes. Expected volatility

was determined by calculating the historical volatility of the Company’s shares over a period

consistent with the expected term of the options.

Where the parent Company grants options over its own shares to the employees of the Group,

these are accounted for as equity-settled in the consolidated accounts of the Group.

The total charge recognised in the year ended 31 December 2025 relating to employee share-

based payments was £1,260,000 (2024: £964,000).

The Company has a number of share option schemes and savings-related share option plans for

its employees and a separate historical scheme for Executive Directors.

	2025	2024
	£’000	£’000
a) Sharesave schemes	51	(159)
b) Long Term Incentive Plan (“LTIP”)	1,209	1,123
	1,260	964

133Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

24. Share options continued

Share-based payments continued

a) Sharesave scheme

During 2019 a new HMRC-approved savings-related share option scheme was implemented,

under which employees save on a monthly basis, over a three-year period, towards the purchase

of shares at a fixed price determined when the option is granted. Ordinarily, this price is set at a

20% discount to the market price. In view of share price performance, no discount was applied

to the grant in 2025. The options must be exercised within six months of maturity of the savings

contract, otherwise they lapse.

Movements in the total number of share options outstanding and their relative weighted average

exercise price are as follows:

	2025		2024
	£’000		£’000
		Weighted		Weighted
	Number	average	Number	average
	(’000)	exercise price	(’000)	exercise price
Outstanding at 1 January	3,000	£1.16	850	£3.52
Granted	2,996	£0.71	3,284	£1.07
Exercised	—	—	—	—
Lapsed/cancelled	(2,294)	£1.14	(1,134)	£2.65
Outstanding at 31 December	3,702	£0.81	3,000	£1.16
Exercisable	—	—	—	—

There were no Sharesave scheme exercises and therefore the weighted average share price on

the exercise date of options was £nil (2024: £nil).

The weighted average fair value of options granted in the year was £0.46 (2024: £1.05).

The expiry dates of options outstanding at the end of the year are as follows:

	2025		2024
	£’000		£’000
		Weighted		Weighted
	Number	average	Number	average
Expiry date – 31 December	(’000)	exercise price	(’000)	exercise price
2025	—	—	33	£4.27
2026	40	£3.75	88	£3.13
2027	786	£1.23	2,879	£1.07
2028	2,876	£0.73	—	—

The options outstanding at the end of the year have a weighted average contractual life of 2.75

years (2024: 2.86 years).

b) LTIP

During 2016 a Long Term Incentive Plan (“LTIP”) was implemented by the Remuneration and

Nomination Committee. Participation in the LTIP is at the invitation of the Committee and is

intended to be used to incentivise the performance and retention of the Company’s Executives

and certain key employees.

The maximum awards for all participants are determined by the Remuneration and Nomination

Committee with appropriate input from independent advisers. Performance is based on

achieving targets. Targets include major milestones aligned to the Group’s strategic plan, a

sliding scale of total shareholder return (“TSR”), and time-based performance criteria, which

are measured over a period of three years with an additional holding period of two years for

Executives. Malus and clawback conditions apply.

Movements in the total number of share options outstanding and their relative weighted average

exercise price are as follows:

	2025		2024
	£’000		£’000
		Weighted		Weighted
	Number	average	Number	average
	(’000)	exercise price	(’000)	exercise price
Outstanding at 1 January	7,486	£0.10	4,490	£0.10
Granted	6,892	£0.10	4,672	£0.10
Exercised	(994)	£0.10	(101)	£0.10
Lapsed	(1,138)	£0.10	(1,575)	£0.10
Outstanding at 31 December	12,246	£0.10	7,486	£0.10
Exercisable	1,326	£0.10	2,044	£0.10

134 Ceres Annual Report 2025

Financial statements

Notes to the consolidated financial statements continued

for the year ended 31 December 2025

24. Share options continued

Share-based payments continued

b) LTIP (continued)

The weighted average fair value of options granted in the year ending 31 December 2025 was

£1.46 (2024: £2.05).

The weighted average share price on the exercise date of options was £2.45 (2024: £2.59).

The expiry dates of options outstanding at the end of the year are as follows:

	2025		2024
	£’000		£’000
		Weighted		Weighted
	Number	average	Number	average
Expiry date – 31 December	(’000)	exercise price	(’000)	exercise price
2026	405	£0.10	829	£0.10
2027	154	£0.10	279	£0.10
2028	308	£0.10	490	£0.10
2029	294	£0.10	445	£0.10
2030	—	—	—	—
2031	—	—	—	—
2032	166	£0.10	283	£0.10
2033	1,004	£0.10	1,186	£0.10
2034	3,215	£0.10	3,974	£0.10
2035	6,700	£0.10	—	—

The options outstanding at the end of the year have a weighted average contractual life of 8.37

years (2024: 7.43 years).

Assumptions

The fair values of the Sharesave scheme were measured by use of the Black–Scholes pricing

model. The inputs to the Black–Scholes model were as follows:

	Sharesave	Sharesave	Sharesave
	scheme 2025	scheme 2024	scheme 2023
Grant date	13 June 2025	10 May 2024	28 April 2023
Share price at date of grant (£)	0.7115	1.332	3.494
Exercise price (£)	0.7115	1.066	3.128
Expected volatility (%)	75%	70%	69%
Expected option life (years)	3.25 years	3.25 years	3.25 years
Average risk-free interest rate (%)	3.81%	4.15%	3.61%
Expected dividend yield	Nil	Nil	Nil

The exercise prices of options are stated above. The expected life of the options is based on the

best estimate of the average number of years expected from grant to exercise. The expected

volatility is based on historical volatility of the Company’s shares since the Company restructured

in 2012. The risk-free rate of return is management’s estimate of the yield on zero-coupon UK

Government bonds of a term consistent with the expected option life. The fair values of the LTIP

schemes were measured using a binomial pricing model and Monte Carlo simulation model.

The inputs to the Monte Carlo simulation model were as follows:

	LTIP 2025	LTIP 2025	LTIP 2024	LTIP 2023
	01 December	26 June	28 May	23 March
Grant date	2025	2025	2024	2023
Share price at date of grant (£)	3.550	0.7910	2.152	3.91
Exercise price (£)	0.1	0.1	0.1	0.1
Expected volatility (%)	80%	75%	75%	69%
Expected option life (years)	Up to 7 years	Up to 7 years	Up to 7 years	Up to 7 years
Average risk-free interest rate (%)	3.76%	3.81%	4.31%	3.61%
Expected dividend yield	Nil	Nil	Nil	Nil

135Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

25. Events after the balance sheet date

After the year end, Ceres agreed and paid a settlement of £1,980,000 with a third party in

connection with the early termination of a contract (see Note 21).

26. Capital commitments

Capital expenditure that has been contracted for but has not been provided for in the

consolidated financial statements amounts to £320,000 as at 31 December 2025 (31 December

2024: £725,000). The reduction in capital commitments this year reflects Ceres’ continued

progression through its technology and manufacturing lifecycle, with major development and

test-related investment now largely complete as we transition toward a commercially focused

operating model.

27. Related party transactions

As at 31 December 2025 the Group’s related parties were its Directors. Information around key

management compensation is set out in Note 5.

Major shareholders have been considered in the Directors’ report and it was concluded that they

do not meet the definition of a related party in line with IAS 24 ‘Related Party Disclosures’.

During the year ended 31 December 2025 none of the Directors exercised share options.

RFC Power Ltd were a related party up until control was obtained on 1 August 2025. There were

no transactions with RFC Power Ltd while they were a related party. See Note 12 for information

around acquisition.

During the year ended 31 December 2024 one Director exercised 380,424 share options

under the Ceres Power Holdings plc 2004 Employees’ Share Option Scheme. The Director sold

282,077 shares and retained 98,347 shares.

28. Non-cash movements reconciliation for consolidated statement of cash

flows

		Short-term
	Fixed assets	investments
At 1 January 2025	23,584	54,971
Accruals	—	4,060
Non-cash impact from disposals	(66)	—
Depreciation	(7,100)	—
Finance income received	—	(4,149)
Cash flows	1,776	(7,445)
At 31 December 2025	18,194	47,437

29. Exceptional operating costs

Exceptional operating costs

Ceres and a supplier settled a contractual dispute for the sum of £1,440,000.

The Group also recognised a provision of £1,980,000 in respect of an obligation arising from the

termination of a supply contract. The provision represents management’s best estimate of the

expenditure required to settle the obligation at the reporting date (see Note 21).

Impairment of investment in associate

The 24.2% interest in the associate, RFC Power Limited, has been impaired to £nil. During the

period the Group identified indicators to suggest RFC could not carry on as a going concern.

As this cost arises from events outside the ordinary course of business, it has been presented

separately within the Consolidated Statement of Profit and Loss to provide clarity on the

Group’s underlying operating performance.

Subsequently, the Group obtained control of RFC on 1 August 2025 (see Note 12).

136 Ceres Annual Report 2025

Financial statements

Company balance sheet

as at 31 December 2025

Note

As at

31 Dec 2025

£’000

As at

31 Dec 2024

£’000

Fixed assets

Investments 3 386,481 385,221

Current assets

Debtors: amounts falling due within one year 4 3,509 3,210

Cash at bank and in hand 5 137 700

3,646 3,910

Creditors: amounts falling due within one year 6 (12,015) (9,358)

Net current liabilities (8,369) (5,448)

Net assets 378,112 379,773

Capital and reserves

Called-up share capital 8 19,469 19,370

Share premium 406,650 406,650

Capital redemption reserve 9 3,449 3,449

Profit and loss account (51,456) (49,696)

Shareholders’ funds 378,112 379,773

The Company made a loss after taxation of £3.0 million in the year (2024: £6.9 million).

The notes on pages 138 to 141 are an integral part of these Company financial statements.

The financial statements on pages 136 to 137 were approved by the Board of Directors on 25 March 2026 and were signed on its behalf by:

Phil Caldwell Stuart Paynter

Chief Executive Officer Chief Financial Officer

Ceres Power Holdings plc

Registered Number: 5174075

137Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

Company statement of changes in equity

for the year ended 31 December 2025

Note

Share capital

£’000

Share premium

£’000

Capital

redemption

reserve

£’000

Profit and loss

account

£’000

Total

£’000

At 1 January 2024 19,297 406,184 3,449 (43,733) 385,197

Loss for the financial year — — — (6,927) (6,927)

Total comprehensive loss — — — (6,927) (6,927)

Transactions with owners

Issue of shares, net of costs 8 73 466 — — 539

Share-based payments charge 8

— — — 964 964

Total transactions with owners 73 466 — 964 1,503

At 31 December 2024 19,370 406,650 3,449 (49,696) 379,773

Loss for the financial year — — — (3,020) (3,020)

Total comprehensive loss — — — (3,020) (3,020)

Transactions with owners

Issue of shares, net of costs 8 99 — — — 99

Share-based payments charge 8 — — — 1,260 1,260

Total transactions with owners 99 — — 1,260 1,359

At 31 December 2025 19,469 406,650 3,449 (51,456) 378,112

The notes on pages 138 to 141 are an integral part of these Company financial statements.

138 Ceres Annual Report 2025

Financial statements

Notes to the Company financial statements

for the year ended 31 December 2025

1. Accounting policies used in the preparation of the financial statements

Basis of preparation

The financial statements of the Company have been prepared in accordance with Financial

Reporting Standard 101 Reduced Disclosure Framework (“FRS 101”).

In preparing these financial statements, the Company applies the recognition, measurement and

disclosure requirements of International Accounting Standards, but makes amendments where

necessary in order to comply with the Companies Act 2006 and has set out below where

advantage of the FRS 101 disclosure exemptions has been taken.

Under Section 408 of the Companies Act 2006, the Company is exempt from the requirement

to present its own profit and loss account.

In these financial statements, the Company has applied the exemptions available under FRS 101

in respect of the following disclosures:

• Cash Flow Statement and related notes;

• Comparative period reconciliations for share capital;

• Disclosures in respect of transactions with wholly owned subsidiaries;

• Disclosures in respect of capital management;

• The effects of new but not yet effective IFRSs; and

• Disclosures in respect of the compensation of Key Management Personnel.

As the consolidated financial statements include the equivalent disclosures, the Company has

also taken the exemptions under FRS 101 available in respect of the following disclosures:

• IFRS 2 Share-based Payments in respect of Group-settled, share-based payment; and

• IFRS 7 Financial Instruments Disclosures.

The accounting policies set out below have, unless otherwise stated, been applied consistently to

all periods presented in these financial statements.

The financial statements are prepared on the historical cost basis.

Critical accounting judgements and estimates

The preparation of financial statements under FRS 101 requires the Company’s management to

make judgements and estimates that affect the reported amounts of assets, liabilities, revenues

and costs. Although these estimates are based on management’s best knowledge of the amount,

events or actions, actual results may ultimately differ from these estimates. The estimates and

underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are

recognised in the period in which the estimate is revised.

The judgements that are considered to have the most significant impact on the Company’s

assets and liabilities are set out below:

The review of amounts owed by Group undertakings involved judgement when determining

the credit risk of fellow Group undertakings and their ability to repay loans. As at 31 December

2025, management determined that Ceres Power Limited remains unable to repay any amounts

in excess of the carrying value of the loan and therefore the historical provision of £59.3 million

(2024: £59.3 million) was maintained.

Management review the Company’s investments to determine whether an indicator of

impairment exists at each reporting date. If it does, estimation is required to be used when

evaluating the carrying value of investments against their value in use. The value in use is

estimated using a discounted cash flow valuation. The basis for the projected cash flows is the

Group’s business plan, which is prepared by management. As at 31 December 2025, this review

resulted in management determining that the value in use continues to be significantly in excess

of its carrying value, and no impairment is therefore required, nor is this considered to be a

significant estimate.

2. Loss for the year

The Company has taken advantage of the exemption available under Section 408 of the

Companies Act 2006 and has not presented its profit and loss account. The Company’s result for

the year ended 31 December 2025 was a loss of £3.0 million (31 December 2024: loss of £6.9

million), which is stated after charging £121,000 (2024: £127,000) for remuneration receivable by

the Company’s auditor for the auditing of the financial statements and £32,000 (2024: £31,000)

in relation to the review of the interim financial information.

3. Fixed asset investments

Investments in equity securities

Fixed asset investments in subsidiaries are carried at cost less impairment.

Share-based payments

The Group in which the Company is associated has a number of employee and Executive share

option and award schemes under which it makes equity-settled, share-based payments.

The fair value of share-based payment awards granted to employees is recognised as an

employee expense, with a corresponding increase in equity, over the period in which the

employees become unconditionally entitled to the awards. The fair value of the awards granted

are measured using option valuation models, taking into account the terms and conditions upon

which the awards were granted. The fair value of the share-based payment, determined at the

grant date, is measured to reflect vesting and non-vesting conditions and there is no true-up for

differences between expected and actual outcomes.

Where the Company grants options over its own shares to the employees of its subsidiaries, it

recognises an increase in the cost of investment in its subsidiaries with the corresponding credit

being recognised directly in equity.

139Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

3. Fixed asset investments continued

Impairment of fixed asset investments

Investments are stated at cost and reviewed for impairment if there are indicators that the

carrying value may not be recoverable. An impairment loss is recognised to the extent that

the carrying amount cannot be recovered either by selling the asset or by continuing to hold

the asset and benefiting from the net present value of the future cash flows of the investment.

The recoverable value was calculated using a present value calculation. No reasonably plausible

change in assumptions would result in an impairment.

Investment in Group undertakings

31 Dec 2025

£’000

31 Dec 2024

£’000

Cost

At 1 January 385,221 383,718

Capital contributions arising from share-based payment charge 1,260 1,503

At 31 December 386,481 385,221

The Directors have reviewed the investment in its subsidiary for indicators of impairment at

the year end, including considering the progress of technical development, funds held and the

positive performance of the Group, as well as the Group’s market capitalisation. No indicators of

impairment were found.

The Company’s investments comprise interests in the following entities:

Name of undertaking

Country of

incorporation

Description of

shares held

Proportion of

nominal value

of shares held

by the

Company

Type of

entity

Ceres Power Ltd England and Wales £0.001 ordinary

100%

Subsidiary

Ceres Intellectual Property

Company Ltd

England and Wales £1.00 ordinary

100%

Subsidiary

Ceres Power Licence Company Ltd

England and Wales £1.00 ordinary

100%

Subsidiary

Ceres Power Intermediate

Holdings Ltd

England and Wales £0.01 ordinary

100%

Subsidiary

Ceres Holdings International Ltd England and Wales £1.00 ordinary

100%

Subsidiary

Ceres Engineering Consulting

(Shanghai) Co Ltd

Shanghai, China £1.00 ordinary

100%

Subsidiary

RFC Power Ltd England and Wales £0.001 ordinary

100%

Subsidiary

1. Ceres Power Ltd, Ceres Intellectual Property Company Ltd, Ceres Holdings International Ltd and Ceres Power

Licence Company Ltd are 100% held directly by Ceres Power Intermediate Holdings Ltd. Registered address is

Viking House, Foundry Lane, Horsham, West Sussex, RH13 5PX.

2. 1 00% held directly by Ceres Power Ltd. Registered address is Office 1903i, Floor 19/F, Tower B, No.1065 West

Zhongshan Road, Changning District, Shanghai, China.

3. 100% held directly by Ceres Power Ltd. Registered address is Viking House, Foundry Lane, Horsham, West Sussex,

RH13 5PX.

Changes in the Company’s investments are in Note 12 to the Consolidated financial statements

on page 123.

140 Ceres Annual Report 2025

Financial statements

Notes to the Company financial statements continued

for the year ended 31 December 2025

4. Debtors: amounts falling due within one year

Trade and other debtors

Trade and other debtors are recognised initially at fair value. Where considered necessary

they are subsequently measured at amortised cost using the effective interest method, less

any impairment losses. The Company applies the general approach for the impairment review

of loans to subsidiaries.

31 Dec 2025

£’000

31 Dec 2024

£’000

Other debtors 10 8

Prepayments and accrued income 17 15

Amounts owed by Group undertakings 3,482 3,187

3,509 3,210

The amounts owed by Group undertakings comprise inter-company loans and recharges. No specific

repayment or interest terms are associated with these amounts. As of 31 December 2025, a loss

allowance of £59,316,000 (31 December 2024: £59,316,000) has been recognised against the

inter-company loans, reflecting management’s best estimate of the expected credit losses for

that balance.

A subordination agreement exists between the Company and Ceres Power Limited. As at

31 December 2025, amounts owed by Ceres Power Limited to the Company of £60,676,000

(31 December 2024: £60,676,000) are subordinated to all other creditors of Ceres Power Limited.

5. Cash at bank and in hand

Cash at bank and in hand comprise cash balances.

6. Creditors: amounts falling due within one year

Trade and other creditors

Trade and other creditors are recognised initially at fair value. Where considered necessary

they are subsequently measured at amortised cost using the effective interest method. The

amounts owed to Group undertakings comprise inter-company loans and recharges. No specific

repayment or interest terms are associated with these amounts.

31 Dec 2025

£’000

31 Dec 2024

£’000

Other creditors 922 936

Accruals 425 659

Amounts owed to Group undertakings 10,668 7,763

12,015 9,358

7. Taxation

Taxation

Tax on the profit or loss for the year comprises current and deferred tax and any adjustment

to tax payable in respect of previous years. Tax is recognised in the profit and loss account

except to the extent that it relates to items recognised directly in equity or other comprehensive

income, in which case it is recognised directly in equity or other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year,

using tax rates enacted or substantively enacted at the balance sheet date.

Deferred taxation

Deferred tax is provided on temporary differences between the carrying amounts of assets

and liabilities for financial reporting purposes and the amounts used for taxation purposes.

The following temporary differences are not provided for: the initial recognition of assets or

liabilities that affect neither accounting nor taxable profit other than in a business combination;

and differences relating to investments in subsidiaries to the extent that they will probably not

reverse in the foreseeable future. The amount of deferred tax provided is based on the expected

manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates

enacted or substantively enacted at the balance sheet date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits

will be available against which the temporary difference can be utilised.

Potential deferred tax assets have not been recognised but are set out below:

31 Dec 2025

£’000

31 Dec 2024

£’000

Tax effect of temporary differences because of:

Short-term temporary differences — —

Losses carried forward (1,871) (1,639)

(1,871) (1,639)

The deferred tax assets have not been recognised as the Directors consider that it is not

probable that the asset will be realised in the foreseeable future. The gross amount of losses

carried forward as at 31 December 2025 was £7.5 million (31 December 2024: £6.8 million),

which do not have an expiry date.

141Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

8. Called-up share capital

31 Dec 2025

£’000

31 Dec 2024

£’000

Number of

£0.10

ordinary shares £’000

Number of

£0.10

ordinary shares £’000

Allotted and fully paid:

Ordinary shares at 31 December 194,694,543 19,469 193,699,380 19,370

Details of shares issued in the period are provided in Note 22 to the Group financial statements.

Details of share options are disclosed in Note 24 to the Group financial statements.

9. Capital redemption reserve

The capital redemption reserve was created in the year ended 30 June 2014 when 86,215,662

deferred ordinary shares of £0.04 each were cancelled.

10. Employees

The Company has no employees other than the Non-Executive Directors (including the Chair), whose

remuneration is set out on page 85.

142 Ceres Annual Report 2025

Financial statements

Directors of Ceres Power Holdings plc

• Warren Finegold (Chair of the Board)

• Professor Dame Julia King (Senior Independent Director)

• Phil Caldwell (Chief Executive Officer)

• Stuart Paynter (Chief Financial Officer)

• Karen Bomba (Non-executive Director)

• Caroline Brown (Non-executive Director)

• Tudor Brown (Non-executive Director)

• Nannan Sun (Non-executive Director)

• Trine Borum Bojsen (Non-executive Director)

Company number

5174075

Company Secretary

Dominic Murray

Registered office

Viking House

Foundry Lane

Horsham

West Sussex

RH13 5PX

China office

Office 1903i, Floor 19

F Tower B, No.1065

West Zhongshan Road

Changning District

Shanghai

China

Japan office

19F Hilton Plaza West Office Tower

2-2-2 Umeda Kita-Ku

Osaka

530-0001

Japan

South Korea office

9F, Gangnamjeil Building

109, Teheran-ro

Gangnam-gu

Seoul

South Korea (100-768)

Auditor

BDO LLP

55 Baker Street

London

W1U 7EU

Solicitor

RPC LLP

Tower Bridge House

St. Katharine’s Way

London

E1W 1AA

Bankers

National Westminster Bank Plc

2nd Floor, Turnpike House

123 High Street

Crawley

West Sussex

RH10 1DQ

Joint Broker

Joh. Berenberg, Gossler & Co. KG

60 Threadneedle Street

London

EC2R 8HP

Joint Broker

Investec Bank plc

30 Gresham Street

London

EC2V 7QP

Registrar

Computershare Investor Services PLC

The Pavilions

Bridgwater Road

Bristol

BS99 6ZY

Ceres Power Holdings plc

Viking House

Foundry Lane

Horsham

West Sussex

RH13 5PX

www.ceres.tech

“Ceres”, “Ceres Power”, “Clean Energy Starts With Ceres” and

“Ceres Endura” are registered trademarks belonging to the

Group.

Directors and advisers

143Ceres Annual Report 2025

Strategic report Corporate governance Financial statements

Glossary

AI-driven data centre

An AI-driven data centre is a facility that houses the specific IT infrastructure needed to

train, deploy and deliver AI applications and services. It is designed to support the substantial

computational, storage, networking and power requirements of artificial intelligence (AI) and

machine learning (ML) workloads.

Annual General Meeting (AGM)

AGM is a yearly gathering of our interested shareholders where our executive team present our

annual report about Ceres’ performance and strategy.

Behind-the-meter (BTM)

An energy systems located on the customer’s side of the utility meter. These systems—such as

solar panels, batteries, or efficient appliances—mainly power the building, reduce grid use, lower

bills and can enable the customer to sell excess energy for income or credits.

In contrast, front-of-the-meter (FTM) systems are located on the utility side of the meter.

They include large-scale generation and storage facilities such as power plants, wind farms and

solar parks. They supply the grid, balance supply and demand, stabilize energy and support

renewable integration.

Biofuel

A fuel derived from biomass rather than by the slow geological processes involved in the

formation of fossil fuels. Most common biofuels include bio-ethanol (from sugar or starch crops)

and biodiesel (from oils and fats).

Carbon dioxide equivalent (CO

e is a comparative measure of the global warming potential (GWP) of various greenhouse

gases (GHGs) by converting amounts of the mixture of GHGs to the equivalent amount of carbon

dioxide (CO

) with the same warming potential.

GWP accounts for the difference in the effects of GHGs, namely the efficiency at which they

absorb energy and how long they stay in the atmosphere. The time period usually used for

GWP is 100 years.

Decarbonisation

The process of lowering the amount of greenhouse gas emissions (mostly carbon dioxide, CO

)

produced by the burning of fossil fuels from a process.

Direct current (DC)

Direct current is a highly efficient, specialised method for transmitting large amounts of electrical

power over very long distances or via underwater cables. Direct current flows in one direction

(in contrast to alternating current which alternates the direction of flow many times per second).

800V DC is becoming a new standard in high-density AI-driven data centres, enabling increased

power efficiency.

Distributed power generation

Also known as distributed generation (DG) or decentralized energy, is the process of generating

electricity close to where it will be used. This is different from centralized power generation,

which uses large power plants to supply electricity over long distances.

Diversity, equity, belonging and inclusion (DEBI)

Ceres’ diversity and inclusion programme.

Electrofuel (eFuel)

A synthetic, carbon-neutral fuel produced by combining green hydrogen produced by

electrolysis with captured carbon dioxide. These fuels can directly replace petrol, diesel

or kerosene, thereby powering existing internal combustion engines without the need for

modification.

Efficiency, electrical or thermal

The amount of electricity/heat that is produced by a process for each unit of energy supplied to

the process, often expressed as a percentage.

Efficiency, total

The amount of useful energy in any form that a process produces for every unit of energy

supplied to the process, often expressed as a percentage.

Electric vehicle (EV)

An EV is a vehicle that can be powered by an electric motor that draws energy from a battery

and is capable of being charged from an external source.

Electrolyser

A device that uses an electric current to split water into its constituent molecules (pure hydrogen

and oxygen), a process called electrolysis. There are several types of electrolysis technologies:

• Alkaline electrolysis (AEL): in use for more than 100 years, it uses a liquid alkaline electrolyte

solution and operates at low temperature with liquid water. It is the greatest scale and lowest

cost technology today, but is not as efficient as other technologies.

• Proton exchange membrane (PEM) electrolysis: uses a solid electrolyte that requires expensive

rare metal catalysts. It can operate at high current densities at low temperature with liquid

water and has a high dynamic response.

• Solid oxide electrolysis cell (SOEC): the least mature technology, it works at high temperatures

from steam, giving it significantly higher efficiency and lower operating costs than other

technologies when integrated to use waste heat with existing processes such as steel,

ammonia and synthetic fuel production.

144 Ceres Annual Report 2025

Financial statements

Energy

In physics, energy is the capacity for doing work. It may exist as potential, kinetic, thermal,

electrical, chemical, nuclear or other various forms. Measured in joules or watt-hours.

Environment, social and governance (ESG)

ESG is a framework to assess companies on their environmental and social issues with a

corporate governance structure to encourage companies to act responsibly, often driven by

shifting regulations, prioritising long term sustainability or political agendas as opposed to

companies exclusively focusing on financial metrics.

ESG recommendations are designed to encourage companies to disclose their impact on

and risks from environmental and social issues, such as employee satisfaction, human rights

and environmental impact. How these impacts are managed are outlined in the company’s

government processes and structures.

Financial Conduct Authority (FCA)

The FCA is a financial regulatory body in the United Kingdom but operates independent of the

UK government and is financed by charging fees to members for the financial services industry.

It aims to protect consumers from bad conduct and financial services as well as ensuring financial

markets operate fairly.

Greenhouse gases (GHG)

GHG are gases in the Earth’s atmosphere that absorb infrared radiation energy and reflect it back

to Earth, trapping heat radiated by the Earth’s surface in the atmosphere. The most common

GHGs are water vapour (H

O), carbon dioxide (CO

), methane (CH

), nitrous oxide (N

O), ozone

) and various synthetic chemicals.

Excess GHGs produced by human activity, also known as anthropogenic GHG emissions, can

amplify the greenhouse gas warming effect in the atmosphere, which can lead to instability in the

Earth’s climate system.

Hard-to-abate industries

Industries that are responsible for a large portion of the world’s carbon emissions but are among

the most challenging to decarbonise. This may be due to a combination of technological and

financial challenges. Examples of hard-to-abate industries include:

• Manufacturing: steel, cement, chemicals, and petrochemicals

• Heavy-duty transportation: shipping, aviation, and long-distance trucking

Hydrogen (H

)

A highly abundant naturally occurring gas commonly cited as a fuel for the future as it has a

high chemical energy content for its mass and creates no harmful emissions when it is burned to

release energy. Hydrogen is currently used as a feedstock for a number of industrial processes,

such as metal smelting and fertiliser production, and is commercially defined by its method of

production and the treatment of the waste gases produced:

• Brown: produced using coal where the associated production emissions are released to the air.

• Grey: produced from natural gas where the associated production emissions are released to the air.

• Blue: produced from natural gas where the associated production emissions are captured using

carbon capture and storage.

• Pink: produced from electrolysis powered by nuclear energy, emitting no carbon emissions

during production.

• Green: produced from electrolysis powered by renewable electricity, emitting no carbon

emissions during production.

Intellectual property (IP)

An asset that is created by the innovative activities of people and businesses. IP can be in the

form of inventions, literary and artistic works, designs and symbols, names and images used in

commerce. In business, unique IP is often the basis of competitive advantage and is therefore

closely protected, for example by calling out a copyright, registering a table or filing a patent.

Intellectual Property Rights are protected by law and allow the holder to assert control over how

they are used through contracts and licences.

Key performance indicator (KPI)

KPIs are quantifiable measures of performance to gauge progress for a specific objective over

time.

Kilowatt hour (kWh)

A unit of energy (not power) representing one thousand watt hours. Kilowatt hours are often

used as a measure of domestic energy consumption. A kilowatt hour is equivalent to a steady

power of one kilowatt running for one hour and is equivalent to 3.6 million joules or 3.6 megajoules.

Manufacturing licence agreement (MLA)

An agreement between Ceres and a mass manufacturing partner allowing the partner to produce

Ceres-based cells and stacks for sale to its customers in the power or hydrogen electrolysis markets.

Microgrid

Microgrids are decentralized energy systems; they are small-scale power grids that generate

electricity for a localized area independently of the public electricity grid.

Glossary continued

145Ceres Annual Report 2025

Natural gas (NG)

A fossil fuel energy source that is formed deep beneath the Earth’s surface. The largest

component of natural gas is methane, composed of carbon and hydrogen. When natural gas is

burned or used in a fuel cell, it produces energy and waste carbon dioxide.

Original equipment manufacturer (OEM)

A company that manufactures and sells products or part of a product to another company.

Science based targets initiative (SBTi)

SBTi is a partnership between CDP, the United Nations Global Compact, World Resources

Institute and the World Wide Fund for Nature. SBTi defines and promotes best practise in

emissions reduction and net zero targets in line with climate science to meet the goals of the

Paris agreement – limiting global warming to well below 2°C above pre-industrial levels and

pursuing efforts to limit warming to 1.5°C. There are currently three verifiable, accountable

scopes of GHG emissions on which companies must report, as set out by the Greenhouse Gas

Protocol.

Scope 1 emissions

Direct GHG emissions from operations that are owned and or controlled by the organisation.

Scope 2 emissions

Indirect GHG emissions from energy imported from third parties, heating, cooling and steam

consumed by the organisation.

Scope 3 emissions

All GHG emissions that occur as a consequence of the operations of the organisation but are

not directly controlled or owned by the company, such as the production of upstream and

downstream activities and materials.

Solid oxide electrolysis cell (SOEC)

Solid oxide electrolysis cell (SOEC) a cell that uses water (at high temperature) and renewable

energy to produce green hydrogen. These cells have significantly higher efficiency and lower

operating costs than other technologies when integrated to use waste heat with existing

processes such as steel, ammonia and synthetic fuel production.

Solid oxide fuel cell (SOFC)

A highly efficient fuel cell that operates at a high temperature (up to 950°C), able to generate

electrical power from multiple fuel types including natural gas, biofuels, hydrogen blends and

pure hydrogen.

SOFC system

An assembly that is made up of the fuel cell, fuel input handling components and components

engineered to manage electrical power output and waste heat and gases.

Stack

An assembly of individual fuel cells into a device that can deliver a large amount of electrical

power. Ceres’ stacks are commonly manufactured in 5kW and 10kW units. These can be

connected in a modular manner to create higher power systems.

Stack array module (SAM)

A pressurised container contained Ceres’ SOEC stacks for hydrogen production

Sustainable Accounting Standards Board (SASB)

Founded in 2011, SASB is a non-profit organisation focused on independent standards setting.

Task force on Climate-Related Financial Disclosures (TCFD)

TCFD is an international framework of disclosure recommendations developed to improve and

increase reporting of climate-related financial impact of climate change. As of 2022, UK premium

listed companies are required to report using the TCFD framework in their annual report and

accounts.

Watt (W)

The unit by which power is measured. The amount of energy, measured in joules, delivered in a

fixed amount of time, for example joules per second. Values are typically expressed in kilowatts

(1kW equals 1000W); megawatts (1MW equals 1,000kW); gigawatts (1GW equals 1,000MW).

Zero emission

Refers to a vehicle, engine, motor, process or some other energy source, that emits no waste

products (such as carbon dioxide) that pollute the environment or disrupt the climate.

Ceres Power Holdings plc commitment to environmental issues is

reflected in this Annual Report, which has been printed on Respecta

Satin, an FSC® certified material. This document was printed by Opal X

using its environmental print technology, which minimises the impact

of printing on the environment, with 99% of dry waste diverted

from landfill.

Both the printer and the paper mill are registered to ISO 14001.

Produced by Design Portfolio

www.design-portfolio.co.uk

Strategic report Corporate governance Financial statements

Ceres Power Holdings plc

Viking House

Foundry Lane

Horsham

West Sussex

RH13 5PX

www.ceres.tech

Ceres Annual Report 2025