Shell PLC — Regulatory Filings 2014

Jul 4, 2014

This document comprises a prospectus (the "Prospectus") relating to Intelligent Energy Holdings plc (the "Company") and has been prepared in accordance with the Prospectus Rules of the UK Financial Conduct Authority ("FCA") made under section 73A of the Financial Services and Markets Act 2000 (as amended) ("FSMA"), this Prospectus has been approved by the FCA in accordance with section 87A of the FSMA and has been made available to the public in accordance with paragraph 3.2 of the Prospectus Rules. This document has been prepared in connection with the offer of Ordinary Shares to certain institutional investors described in Part VII "The Offer" of this Prospectus.

Application has been made to the FCA for all of the Ordinary Shares of the Company, issued and to be issued in connection with the Offer, to be admitted to the standard listing segment of the Official List of the FCA (the "Official List") and to the London Stock Exchange plc (the "London Stock Exchange") for such Ordinary Shares to be admitted to trading on the London Stock Exchange's main market for listed securities (together, "Admission"). Admission to trading on the London Stock Exchange's main market for listed securities constitutes admission to trading on a regulated market. Conditional dealings in the Ordinary Shares are expected to commence on the London Stock Exchange at 8.00 a.m. (London time) on 4 July 2014. It is expected that Admission will become effective, and that unconditional dealings will commence in the Ordinary Shares on the London Stock Exchange, at 8.00 a.m. (London time) on 9 July 2014. All dealings in the Ordinary Shares prior to the commencement of unconditional dealings will be on a "when issued" basis and will be of no effect if Admission does not take place and such dealings will be at the sole risk of the parties concerned. No application has been, or is currently intended to be, made for the Ordinary Shares to be admitted to listing or dealt with on any other exchange.

The Company and its Directors (whose names appear on page 32) accept responsibility for the information contained in this Prospectus. To the best of the knowledge and belief of the Company and the Directors (each of whom has taken all reasonable care to ensure that such is the case), the information contained in this Prospectus is in accordance with the facts and contains no omission likely to affect the import of such information.

Prospective investors should read the entire Prospectus, in particular, the section headed "Risk Factors" for a discussion of certain risks and other factors that should be considered in connection with an investment in the Ordinary Shares. Prospective investors should be aware that an investment in the Company involves a degree of risk and that, if some or all of the risks described in the "Risk Factors" occur, investors may find their investment materially adversely affected. Accordingly, an investment in the Ordinary Shares is only suitable for investors who are particularly knowledgeable in investment matters and who are able to bear the loss of the whole or part of their investment.

Intelligent Energy Holdings plc

(a company incorporated in England and Wales under the Companies Act 1985 with company number 05104429) Offer of 16,474,251 Ordinary Shares of 5 pence each at an Offer Price of 340 pence per Ordinary Share Admission to the standard listing segment of the Official List and to trading on the London Stock Exchange Joint Global Co-ordinators and Joint Bookrunners

Barclays Bank PLC Canaccord Genuity Limited

Co-Lead Manager Parva Capital Limited

Financial Adviser

NM Rothschild & Sons Limited

Issued ordinary share capital immediately following Admission

Issued and Fully Paid Ordinary Shares of 5 pence each Number Nominal Value 188,031,599 £9,401,579.95

The Ordinary Shares have not been, and will not be, registered under the US Securities Act of 1933 (the "Securities Act"), as amended. Prospective purchasers that are qualified institutional buyers are hereby notified that the sellers of the Ordinary Shares may be relying on the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A under the Securities Act. Ordinary Shares are being offered outside the United States in reliance on Regulation S under the Securities Act.

Barclays Bank PLC ("Barclays") and Canaccord Genuity Limited ("Canaccord") have been appointed as Joint Global Co-ordinators and Joint Bookrunners in connection with Admission and the Offer and Parva Capital Limited ("Parva Capital") has been appointed as Co-Lead Manager to the Offer. Barclays, Canaccord and Parva Capital are, together, the "Managers". N M Rothschild & Sons Limited ("Rothschild") has been appointed as Financial Adviser to the Company in connection with the Offer. Barclays and Rothschild, each of which is authorised in the United Kingdom by the Prudential Regulation Authority ("PRA") and regulated in the United Kingdom by the FCA and the PRA, Canaccord, which is authorised and regulated solely by the FCA in the United Kingdom, and Parva Capital, which is an appointed representative of Hanson Asset Management Limited which is authorised and regulated solely by the FCA in the United Kingdom, are acting exclusively for the Company and no one else in connection with the Offer and will not regard any other person (whether or not a recipient of this Prospectus) as a client in relation to the Offer and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients nor for giving advice in relation to the Offer or any transaction or arrangement referred to in this Prospectus.

Apart from the responsibilities and liabilities, if any, which may be imposed on the Managers and Rothschild by FSMA or the regulatory regime established thereunder, none of the Managers or Rothschild accepts any responsibility whatsoever, and makes no representation or warranty, express or implied, for the contents of this Prospectus, including its accuracy, completeness or for any other statement made or purported to be made by it or on behalf of it, the Company, the Directors or any other person, in connection with the Company, the Ordinary Shares or the Offer and nothing in this Prospectus shall be relied upon as a promise or representation in this respect, whether as to the past or the future. Each of the Managers and Rothschild accordingly disclaims all and any liability whatsoever, whether arising in tort, contract or otherwise (save as referred to above), which it might otherwise have in respect of this Prospectus or any such statement.

In connection with the Offer, each of the Managers and any of their respective affiliates, acting as an investor for its or their own account(s), may acquire Ordinary Shares, and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for its or their own account(s) in Ordinary Shares and other securities of the Company or related investments in connection with the Offer or otherwise. Accordingly, references in this Prospectus to the Ordinary Shares being offered, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, dealing or placing by, each of the Managers and any of their respective affiliates acting as an investor for its or their own account(s). None of the Managers intends to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

The Managers and Rothschild and their respective affiliates may have engaged in transactions with, and provided various investment banking, financial advisory and other services to, the Company, for which they would have received customary fees. The Managers and Rothschild and any of their respective affiliates may provide such services to the Company and any of its affiliates in the future.

The Ordinary Shares to be made available pursuant to the Offer will, on Admission, rank equally in all respects with all other Ordinary Shares, including for all dividends and other distributions declared, made or paid on the Ordinary Shares after Admission.

Notice to overseas investors

This Prospectus does not constitute an offer to sell, or the solicitation of an offer to buy or to subscribe for, Ordinary Shares to any person in any jurisdiction to whom or in which jurisdiction such offer or solicitation is unlawful and, in particular, is not for distribution in Australia, Canada, Japan or South Africa. None of the Company, the Selling Shareholder, Rothschild or any of the Managers accepts any legal responsibility for any violation by any person, whether or not a prospective investor, of any such restrictions. No action has been, or will be, taken in any jurisdiction other than the United Kingdom that would permit a public offering of the Ordinary Shares, or the possession, circulation or distribution of this Prospectus or any other material relating to the Company or the Ordinary Shares in any jurisdiction where action for that purpose is required.

The Ordinary Shares have not been, and will not be, registered under the Securities Act. Prospective purchasers that are qualified institutional buyers are hereby notified that the sellers of the Ordinary Shares may be relying on the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A under the Securities Act. Ordinary Shares are being offered outside the United States in reliance on Regulation S under the Securities Act.

The Ordinary Shares have not been approved or disapproved by the US Securities and Exchange Commission ("SEC"), any state securities commission in the United States or any US regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the offering of the Ordinary Shares or the accuracy or adequacy of this Prospectus. Any representation to the contrary is a criminal offence in the United States.

Until the expiry of 40 days after the commencement of the Offer, an offer or sale of Ordinary Shares within the United States by a dealer (whether or not it is participating in the Offer) may violate the registration requirements of the Securities Act.

This Prospectus is being furnished by the Company in connection with an offering exempt from the registration requirements of the Securities Act, solely for the purpose of enabling a prospective investor to consider the acquisition of Ordinary Shares described herein. The information contained in this Prospectus has been provided by the Company and other sources identified herein. This Prospectus is being furnished on a confidential basis only to persons in the United States reasonably believed to be "qualified institutional buyers" or "QIBs" and to other eligible persons outside of the United States. Any reproduction or distribution of this Prospectus, in whole or in part, in or into the United States and any disclosure of its contents or use of any information herein in the United States for any purpose, other than in considering an investment by the recipient in the Ordinary Shares offered hereby in accordance with the offer and sale restrictions described herein, is prohibited. Each prospective investor in the Ordinary Shares, by accepting delivery of this Prospectus, agrees to the foregoing.

The offer, sale and/or issue of the Ordinary Shares has not been, and will not be, qualified for sale under any applicable securities laws of Australia, Canada, Japan or South Africa. Subject to certain exceptions, the Ordinary Shares may not be offered, sold or delivered within Australia, Canada, Japan or South Africa, or to, or for the benefit of, any national, resident or citizen of Australia, Canada, Japan or South Africa.

Investors should rely only on the information contained in this Prospectus (and any supplementary prospectus produced to supplement the information contained in this Prospectus) when making a decision as to whether to purchase Ordinary Shares. No person has been authorised to give any information or to make any representations other than those contained in this Prospectus in connection with the Offer and, if given or made, such information or representations must not be relied upon as having been authorised by or on behalf of the Company, the Directors, Rothschild or the Managers. Without prejudice to any obligation of the Company to publish a supplementary prospectus pursuant to section 87G(1) of FSMA and Rule 3.4 of the Prospectus Rules, neither the delivery of this Prospectus nor any issue or sale made under this Prospectus shall, under any circumstances, create any implication that there has been no change in the business or affairs of the Company or of the Company and its subsidiaries taken as a whole (the "Group") since the date of this Prospectus or that the information contained herein is correct as at any time subsequent to the date of this Prospectus.

The contents of this Prospectus are not to be construed as legal, business or tax advice. Each prospective investor should consult its own lawyer, financial adviser or tax adviser for legal, financial or tax advice in relation to the purchase of Ordinary Shares.

Recipients of this Prospectus are authorised to use it solely for the purpose of considering the acquisition of Ordinary Shares and may not reproduce or distribute this Prospectus, in whole or in part, and may not disclose any of the contents of this Prospectus or use any information herein for any purpose other than considering an investment in Ordinary Shares. Such recipients of this Prospectus agree to the foregoing by accepting delivery of this Prospectus.

NOTICE TO NEW HAMPSHIRE RESIDENTS ONLY

NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENCE HAS BEEN FILED UNDER CHAPTER 421-B OF THE NEW HAMPSHIRE REVISED STATUTES ("RSA421-B") WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE OF THE STATE OF NEW HAMPSHIRE THAT ANY DOCUMENT FILED UNDER RSA421-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE OF THE STATE OF NEW HAMPSHIRE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.

No incorporation of website information

The contents of the Company's website or any website directly or indirectly linked to the Company's website do not form part of this Prospectus and investors should not rely on such contents.

Presentation of market and other information

For information on the presentation of market and other information in this Prospectus, see "Presentation of Information" on pages 34 to 38 of this Prospectus.

This Prospectus is dated 4 July 2014.

TABLE OF CONTENTS

		Page
SUMMARY		4
RISK FACTORS		17
	EXPECTED TIMETABLE FOR THE OFFER AND ADMISSION	31
OFFER STATISTICS		31
	DIRECTORS, OFFICERS AND ADVISERS	32
	PRESENTATION OF INFORMATION	34
	CONSEQUENCES OF A STANDARD LISTING	39
PART I	INFORMATION ON THE GROUP	40
PART II	SELECTED FINANCIAL INFORMATION	75
PART III	OPERATING AND FINANCIAL REVIEW	78
PART IV	CAPITALISATION AND INDEBTEDNESS	94
PART V	HISTORICAL FINANCIAL INFORMATION	96
PART VI	UNAUDITED PRO-FORMA FINANCIAL INFORMATION	141
PART VII	THE OFFER	145
PART VIII	ADDITIONAL INFORMATION	157
PART IX	DEFINITIONS AND GLOSSARY	202

SUMMARY

Summaries are made up of disclosure requirements known as "Elements". These Elements are numbered in Sections A.1 to E.7

This summary contains all of the Elements required to be included in a summary for this type of security and issuer. Some of the Elements are not required to be addressed and, as a result, there may be gaps in the numbering sequence of the Elements.

Even though an Element may be required to be inserted in this summary, it is possible that no relevant information can be given regarding that Element. In these instances, a short description of the Element is included, together with an appropriate 'not applicable' statement.

A		Introduction and warnings
A1	Introduction	This summary should be read as an introduction to this Prospectus.
		Any decision to invest in the securities of the Company should be based on consideration of the Prospectus as a whole by the investor. Where a claim relating to the information contained in this Prospectus is brought before a court, the plaintiff investor might, under the national legislation of Member States, have to bear the costs of translating this Prospectus before the legal proceedings are initiated.
		Civil liability attaches only to those persons who have tabled this summary including any translation thereof, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of this Prospectus or it does not provide, when read together with other parts of the Prospectus, key information in order to aid investors when considering whether to invest in such securities.
A2	Consent for intermediaries	Not applicable. The Company is not engaging any financial intermediaries for any resale of securities or final placement of securities.
B		Issuer
B1	Legal and commercial name	Intelligent Energy Holdings plc
B2	Domicile/legal form legislation/ country of incorporation	The Company is a public limited company incorporated and registered in the United Kingdom with company number 05104429 and its registered office is situated in England and Wales. The Company operates under the Act.
B3	Current operations and principal activities and markets	The Company is an energy technology group which has developed advanced, power dense hydrogen fuel cell technologies which provide an efficient and clean source of power generation. The Group is working towards its aim of embedding and using its technologies in mass market products (either of the Group or of its partners) to meet regulatory/legislative requirements, solve existing problems economically and/or create a new category of products and new product opportunities. The Group collaborates with large, blue-chip OEMs to develop and commercialise its technologies.
		The Group's intellectual property and expertise is based around its proprietary fuel cell technologies, which are the product of over 25 years of research and development. Its technology portfolio includes the wider components necessary in some cases to turn its fuel cell technologies into

	systems and products as well as the software capabilities to manage and
	optimise the performance and functionality of some of those systems and products. Its intellectual property portfolio extends beyond its core fuel cell technology to encompass patents, know-how and expertise in fuel cell related manufacture and the generation and supply of hydrogen fuel.
	The Group has also developed an important capability in remote asset monitoring through its Asset Management and Business Intelligence Service ("AMBIS") unit, which creates opportunities for the Group to improve product development, achieve cost efficiencies and generate additional revenue streams.
	Utilising its suite of technologies, the Group is able to deploy a range of business models in order to expand its participation in the value chain of the industries in which its technologies are, or will be, deployed. In particular, the Group intends to focus in the medium to longer term on licensing its technology and related intellectual property to its OEM partners and other third parties (including non-OEM manufacturers) to generate a combination of up-front licence fee payments and ongoing royalty income.
	The Group's strategy is based on a philosophy of "design once, deploy many times" so that its flexible and scalable design architecture can, in time, be applied to a wide range of power applications across a wide range of industries, which may include the aerospace industry and medical sector. Currently, the Group focuses its technology on three target industrial sectors: Automotive ("Motive"); Consumer Electronics ("CE"); and Distributed Power & Generation ("DP&G"). Historically, substantially all of the Group's revenues have come from the Motive Division. The Group has only recently commenced the full-scale commercialisation of the CE and DP&G Divisions.
	These industries are the Group's current focus because the Directors believe they offer mass market exposure to significant structural trends, namely reductions in emissions (Motive), the need for increased power, and energy storage, in consumer electronic devices (CE) and the growing need for decentralised (and preferably clean) power in emerging markets (DP&G).
	Furthermore, and critically, the Group has been working in these areas because of significant efforts by major industrial groups to solve some of these problems to enable them to provide the product attributes demanded by governments, regulators and customers in their key markets.
	Accordingly, the Group is focusing on:
	• Motive – the development and licensing of the Group's technology, intellectual property and know-how for use in automotive applications including as the principal motive power source (the vehicle 'engine'), as an indirect motive power source (the vehicle 'range extender', used to recharge the vehicle battery pack during driving) and as a secondary power source (for example, an auxiliary power unit);
	• CE – the development of compact energy solutions for mobile devices; and
	• DP&G – a power generation and management solution for off-grid, decentralised power applications initially focused on the provision of power to telecom towers in emerging markets that lack a reliable and/or comprehensive central power grid infrastructure.

B4a	Significant recent trends affecting the Company and the industries in which it operates	The Group has collaborated with blue chip OEMs to develop automotive power solutions and to provide opportunities for those jointly developed systems to be embedded into OEM products at the concept, demonstration and trial stages. The Directors believe that these successful projects and relationships mean that the Group is well positioned to capitalise on the considerable opportunities for the commercialisation of fuel cell technology which are expected to arise from:
		• the legislative and regulatory environment in developed economies (particularly within Europe and other G8 nations) which increasingly require the reduction of CO2 the automotive sector;			and particulate emissions, particularly in
		• the growth in both the number and functionality of consumer electronic devices, with the attendant need for increased power generating and energy storage capacities which incumbent technologies are struggling to meet, together with the need for truly mobile charging solutions (for convenience in developed economies and as a necessity in regions of the world with limited or no grid infrastructure); and
		• increasing demand for power supply in emerging markets where the electricity grid infrastructure is either unreliable or insufficient to meet demand.
B5	Group description	The Company is the holding company of the Group. The Group is an energy technology group that has developed power dense fuel cell technology that provides an efficient source of power generation. The Group operates three customer facing divisions: the Motive Division; the CE Division; and the DP&G Division. Core development activity and business services are provided centrally to the three customer facing divisions.
B6	Shareholders	All Shareholders have the same voting rights in respect of the existing share capital of the Company. As at 3 July 2014 (the latest practicable date prior to publication of this Prospectus) and insofar as is known to the Company, the following persons have, directly or indirectly, interests in 3 percent or more of the issued share capital of the Company, and will have the following interests immediately
		following Admission:				Interests immediately
				Interests at 3 July 2014	following Admission(1),(2),(3)
				Percentage of Issued		Percentage of Issued
			Number of	Ordinary	Number of	Ordinary
		Name of	Ordinary	Share	Ordinary	Share
		Shareholder	Shares	Capital	Shares	Capital
		Meditor European Master Fund Limited Evolution Placements	27,408,010	17.33	27,408,010	14.58
		Corporation	25,390,096	16.05	25,390,096	13.50
		GIC Private Limited Yukos International	21,784,928	13.77	21,784,928	11.59
		UK B.V.	12,002,650	7.59	12,002,650	6.38
		F&C Asset Management(4) 10,852,618		6.86	10,852,618	5.77
		Royalton Percy LLC	6,900,000	4.36	6,900,000	3.67
		(1) Taking into account the New Ordinary Shares

		(2) Taking into account 12,526,400 Ordinary Shares to be issued pursuant to the conversion of the Convertible Loan Notes of principal value £30,190,831 outstanding as at the date of this Prospectus which, together with accrued interest (net of applicable withholding taxes), will convert into Ordinary Shares automatically on Admission (3) Taking into account 1,147,487 Award Shares that vest on Admission under the 2013 Management Incentive Plan (4) Held by various funds and accounts managed by F&C Asset Management
B7	Selected	Consolidated Income Statement
	historical key		Six-month period to 31 March			Year to 30 September
	financial		2014	2013	2013	2012	2011
	information		£000	£000 (unaudited)	£000	£000	£000
		Revenue Trading (loss)/profit	3,505 (19,108)	12,660 (10,578)	20,846 (26,688)	43,852 618	11,869 (14,960)
		Operating loss	(19,948)	(11,919)	(29,202)	(408)	(15,304)
		Net finance cost	(3,162)	41	(548)	(954)	(1,165)
		Gain on disposal
		of subsidiary	983	—	—	420	—
		Income tax	4,909	2,985	8,798	8,740	1,232
		(Loss)/profit for year/period	(17,218)	(8,893)	(20,952)	7,798	(15,237)
		Consolidated Statement of Financial Position
				At 31 March		At 30 September
			2014 £000	2013 £000 (unaudited)	2013 £000	2012 £000	2011 £000
		Non-current assets Current assets	30,725 62,688	26,557 27,206	27,716 46,447	26,201 37,384	10,744 11,943
		Total assets Current liabilities Non-current liabilities	93,413 (8,863) (21,447)	53,763 (8,207) —	74,163 (8,614) (21,130)	63,585 (9,448) —	22,687 (16,931) —
		Net assets	63,103	45,556	44,419	54,137	5,756
		Total equity	63,103	45,556	44,419	54,137	5,756
		Consolidated Statement of Cash Flows
			Six-month period to 31 March			Year to 30 September
			2014 £000	2013 £000 (unaudited)	2013 £000	2012 £000	2011 £000
		Net cash flow from operating activities	(12,973)	(17,521)	(20,091)	10,571	(15,122)
		Net cash flow from investing activities	(1,121)	(2,551)	(5,009)	(12,018)	(1,682)
		Net cash flow from financing activities	36,653	344	26,821	24,656	18,762
		Increase/(decrease) in cash and cash equivalents Effect of foreign exchange rates on	22,559	(19,728)	1,721	23,209	1,958
		cash and cash equivalents	—	9	38	316	(153)

		Six-month period to 31 March Year to 30 September
			2014	2013	2013	2012	2011
			£000	£000	£000	£000	£000
				(unaudited)
		Cash and cash equivalents at
		beginning of period	31,626	29,867	29,867	6,342	4,537
		Cash and cash
		equivalents at end of period	54,185	10,148	31,626	29,867	6,342
		As at 31 May 2014, the Group had gross cash and cash equivalents of £45.7 million. On or around Admission, the Company intends to (a) use £3,640,640 to satisfy the tax liabilities of 2013 Management Incentive Plan Awardholders (other than John Maguire) arising in respect of Award Shares vesting under the 2013 Management Incentive Plan on Admission, in lieu of issuing a portion of the Award Shares to such awardholders; and (b) use £696,981 to settle in cash all Award Shares vesting in favour of John Maguire under the 2013 Management Incentive Plan on Admission (including to satisfy applicable tax liabilities), all of which will be funded from existing cash resources.
		Significant factors affecting the financial condition and results of operation: timing of licence revenue
		In the Motive Division, the Group's revenues during the period under review have been attributable primarily to joint development and licensing arrangements with a limited number of OEMs. Since 2006 the Group has been establishing a strong working relationship with Suzuki Motor Corporation ("Suzuki") including the development of a fuel cell scooter (known as the "Burgman" scooter) which has attained European Whole Vehicle Type Approval. As part of this collaboration, in 2011 the Company signed a licence agreement with Suzuki which included granting non-exclusive access to certain elements of the Company's technology. In November 2011 the Company and Suzuki established SMILE FC System Corporation, a 50:50 joint venture, to develop and manufacture air-cooled fuel cell power systems. Revenue recorded by the Company in respect of the licence agreement was £37.0 million in the financial year ended 30 September 2012 and £8.0 million in the financial year ended 30 September 2013. This led to a significant fluctuation in revenue from the financial year ended 30 September 2012 to the financial year ended 30 September 2013. All amounts under the licence agreement have been paid. Since 31 March 2014, being the date to which the historical financial information in this Prospectus was prepared, there has been no significant change in the financial or trading position of the Group.
B8	Key pro forma financial information	The unaudited pro forma statement of net assets of the Group set out below has been prepared to illustrate the effect of receipt of the net proceeds of the Offer (as detailed in Part VII "The Offer") on the net assets of the Group. It has been compiled using the Consolidated Statement of Financial Position as at 31 March 2014, adjusted to illustrate the pro forma effect of the Offer as if it had occurred on 31 March 2014. The unaudited pro forma statement of net assets has been prepared in a manner consistent with the accounting

		policies applied in preparing the Group's historical financial information as set out in Part V "Historical Financial Information", on the basis set out in the notes below.
		The unaudited pro forma statement of net assets has been prepared for illustrative purposes only and, because of its nature, addresses a hypothetical situation and therefore does not represent the Group's actual financial position or results. It may not, therefore, give a true picture of the Group's financial position or results nor is it indicative of the results that may or may not be expected to be achieved in the future.
			Net proceeds of the Offer as at receivable
			31 March 2014 £'000	by the Company £'000	Conversion of debt £'000	Proforma net assets £'000
		Non-current assets Current assets	30,725 62,688	— 48,599	— —	30,725 111,287
		Total assets Current liabilities Non-current liabilities	93,413 (8,863) (21,447)	48,599 — —	— — 21,417	142,012 (8,863) (30)
		Total liabilities Net assets	(30,310) 63,103	— 48,599	21,417 21,417	(8,893) 133,119
B9	Profit forecast	Notes: 1) The consolidated net assets of the Group as at 31 March 2014 have been extracted, without material adjustment, from the audited historical financial information of the Group for the six month period ended 31 March 2014, as set out in Part V "Historical Financial Information" 2) The total net proceeds receivable by the Company from the Offer are estimated to be approximately £48.6 million, after deduction of underwriting commissions and other estimated fees and expenses incurred by the Group in connection with the Offer (assuming the maximum amount of the Managers' incentive commission and the discretionary elements of the fees of the Group's other advisers will be paid and excluding VAT) of approximately £6.4 million 3) During August to September 2013, the Company issued 5 percent unsecured convertible loan notes, the terms of which are described in paragraph 11.8 of Part VIII "Additional Information". These unsecured convertible loan notes automatically convert into Ordinary Shares in the event of certain key liquidity events, including a stock market listing 4) The unaudited pro-forma statement of net assets does not constitute financial statements within the meaning of section 434 of the Companies Act 2006 5) The unaudited pro-forma statement of net assets does not reflect any trading results or other transactions undertaken by the Group since 31 March 2014, including GIC exercising their warrants, as disclosed in paragraph 11.9 of Part VIII "Additional Information" Not applicable. There are no profit forecasts or estimates contained in
		this document.
B10	Qualifications in the audit reports	Not applicable. There are no qualifications in the accountant's reports on the historical financial information.
B11	Insufficient working capital	Not applicable. The Company is of the opinion that, taking into account the net proceeds from the Offer receivable by the Company, the working capital of the Group is sufficient for its present requirements, that is, for at least 12 months from the date of this Prospectus.

C		Securities
C1	Description and class of securities	The Company intends to issue 16,174,251 New Ordinary Shares under the Offer. The New Ordinary Shares represent approximately 8.6 percent of the expected issued ordinary share capital of the Company immediately following Admission.
		300,000 Existing Ordinary Shares will be sold in the Offer by Philip Mitchell (a non-executive Director) for personal liquidity reasons. Dr. Mitchell was a founder in 1995 of Advanced Power Sources Ltd, a predecessor of the Group, and a member of the Group's original start-up team in 2001.
		When admitted to trading the Ordinary Shares will have an ISIN of GB00BNB7LQ31.
C2	Currency	The Offer Shares are denominated in Sterling.
C3	Shares in issue	The nominal value of issued share capital of the Company, as it is expected to be immediately following Admission, will be 9,401,579.95, divided into Ordinary Shares of 5 pence each (all of which are fully paid up or credited as fully paid up).
C4	Description of the rights attaching to the securities	The Ordinary Shares rank pari passu in all respects with each other, including for voting purposes and in full for all dividends and distributions on Ordinary Shares declared, made or paid after their issue and for any distributions made on a winding up of the Company.
		Subject to the provisions of the Act, any equity securities issued by the Company for cash must first be offered to Shareholders in proportion to their holdings of Ordinary Shares. The Act and the Listing Rules allow for the disapplication of pre-emption rights which may be waived by a special resolution of the Shareholders, either generally or specifically, for a maximum period not exceeding five years.
		Except in relation to dividends which have been declared and rights on a liquidation of the Company, the Shareholders have no rights to share in the profits of the Company.
		The Ordinary Shares are not redeemable. However, the Company may purchase or contract to purchase any of the Ordinary Shares on- or off-market, subject to the Act.
C5	Restrictions on transfer	Not applicable, the Ordinary Shares are freely transferable and there are no restrictions on transfer in the United Kingdom.
C6	Admission	Application will be made for the ordinary share capital of the Company to be admitted to the standard listing segment of the Official List of the FCA and to trading on the London Stock Exchange's main market for listed securities.
		No application has been made or is currently intended to be made for the Ordinary Shares to be admitted to trading on any other exchange.
C7	Dividend policy	The Company is primarily seeking to achieve capital growth for its Shareholders and it is the Board's intention during the current phase of the Group's development to retain distributable profits. Accordingly, the Directors do not anticipate paying a dividend in the foreseeable future.

		However, if the Group were to receive significant, up-front licensing payments from its customers and partners which were in excess of the projected capital requirements of the Group at such time, the Board would consider whether it would be appropriate to recommend a special dividend or another return of value to Shareholders. In the long term, the Directors intend to follow a progressive dividend policy in respect of excess profits over and above what is required to fund the development of the Group.
D		Risks
D1	Key information on the key risks that are specific to the issuer or its industry	The Group may face challenges in achieving its business plan. The Group recently separated its commercial operations into three divisions in order to focus on distinct opportunities to commercialise its fuel cell technologies in the Motive, CE and DP&G Divisions. In each of the Group's divisions, both the fuel cell technology and the market opportunity for such fuel cell technology are immature and, therefore, the Group faces the challenge of generating and growing revenues at the same time as the markets develop. Additionally, in the CE and DP&G Divisions, the Group has less market experience than it does in Motive and, therefore, may suffer from unforeseen difficulties or delays in achieving its business plan for those divisions which could have a material adverse effect on the Group's business, financial condition, results of operations or prospects.
		The Group may require further funding in the future, the availability of which is uncertain.
		The Group's longer term liquidity and capital requirements are difficult to predict because they depend on numerous factors, including the success of the Group's products, the Group's research and development activities, relationships with third-party business partners, the impact of competing technologies and market developments. The Group may need to incur additional capital or operating expenditure or accelerate planned capital expenditure, and may therefore incur net cash outflows in excess of those anticipated in its business plan such that it would be unable to meet its longer term working capital requirements, support additional research and development or take advantage of strategic market opportunities without raising additional financing. The Group may not be able to raise additional funds when needed and as a result its ability to successfully operate and grow its business and progress through further stages of development could be materially adversely affected.
		The Group has historically been loss-making and may continue to make losses.
		The Group has incurred losses in each financial year other than the financial year ended 30 September 2012 (when it made a trading profit of £0.6 million due to the £37.0 million of revenue generated as a result of the Suzuki licence agreement entered into in 2011). The Group will be required to incur further expenditure in coming years to develop its business. There can be no assurance that the Group will be successful in achieving a sustainable transition, whether at all or as planned, to large-scale commercial revenues which will enable the Group to become or to remain profitable.
		The Group depends on key personnel and the failure to retain key personnel or attract qualified employees could limit the Group's growth.
		The success of the Group and its business strategy are dependent on its ability to attract and retain key management, commercial and technical personnel, including those with engineering expertise. As a result of recent improvements

in economic sentiment and the relative scarcity of qualified engineers in the UK (where the Group has its principal research facilities), the level of competition for the services of qualified engineers is high which may hinder the Group's recruitment efforts, lead to higher than planned staff attrition and/or lead to increased personnel costs. As the Group's business grows, it will continue to recruit additional management, commercial and technical personnel with the appropriate skills to support the Group's development. In addition, as the Group continues to commercialise its technology and expand its partner relationships, the Group will seek to retain and incentivise existing key personnel in order to achieve its business objectives. It may, however, face difficulties in doing so because of factors such as the growth in the number of companies operating in the fuel cell industry, and in particular the risk of current or future competitors recruiting the Group's personnel, or the increasing requirements for personnel with the requisite skill sets in complementary industries. This could result in the Group losing personnel with material knowledge of its technology or the skills needed to commercialise this technology, or being unable to procure adequate replacements for such personnel. This could have a material adverse effect on the Group's business, financial condition, results of operations or prospects.

The Group may face challenges in relation to its planned expansion across three separate divisions.

The Group's anticipated expansion across its three separate divisions may place serious demands on its managerial, administrative and other resources. The Group may be required to make investments in its engineering and logistics systems and its financial and management information systems. Any failure by the Group to manage its anticipated growth effectively or to implement its strategy in a timely manner may have a material adverse effect on the Group's business, financial condition, results of operations or prospects.

The Group is developing complex, innovative technology products which require further technical development along with significant adoption by customers in order to become fully commercialised.

Because of the complex, innovative nature of the Group's technology, projects and programmes may not be delivered on time or on budget or may fail to achieve expected performance criteria. This could delay new product launches or result in deficiencies in the products that are launched. A delay in a product launch or the launch of a product that does not meet customer expectations could create an impression that fuel cell technology is not suitable for such products and is therefore likely to have a materially adverse effect on the adoption of fuel cell technology by customers at the pace and in the scale that is required for the Group's technology to be fully commercialised in mass market products.

The Group is reliant on a small number of customers.

The Group is currently reliant on revenue from a small number of customers and there can be no assurance that it will be able to obtain or retain additional customer relationships. Furthermore, there is no certainty that every customer relationship which the Group currently has or establishes in the future will be successful.

The Group is committed to contractual targets with its customers and failure to meet those targets could result in contracts not being renewed or termination of existing contracts.

The Group has a number of customer contracts that require adherence to milestones and performance targets. In the event that the Group fails to meet particular milestones or performance targets under its commercial contracts,

		collaborations, joint developments or joint venture arrangements, it would likely result in the failure of the project and possibly the termination of the commercial contract, collaboration, joint development or joint venture. The ability to meet the milestones and targets agreed by the Group in its commercial contracts, collaborations, joint developments or joint venture arrangements with OEMs and with its other customers is an important measurement of the Group's technical capabilities and for the prospects of the Group's technology being commercialised in the OEMs' and customers' mass market products. Failure to meet such milestones and targets could result in the OEM or customer not entering into further contracts for future stages of a collaboration which could also result in damage to the Group's reputation and hinder the Group in establishing relationships with other OEMs and customers which could have a material adverse effect on the Group's business, financial condition, results of operations or prospects.
D3	Key information on the risks	The price of the Ordinary Shares may fluctuate significantly and investors could lose all or part of their investment.
	specific to the securities	The share price of listed companies can be highly volatile. The market price for the Ordinary Shares could fluctuate significantly in response to many factors (including those referred to in this section), as well as stock market fluctuations unrelated to the trading performance of the Group, legislative changes and general economic, political or regulatory conditions. The Offer Price may not be indicative of prices that will prevail in the trading market and investors may not be able to resell the Ordinary Shares at or above the price they paid.
		The Ordinary Shares have not previously been publicly traded, and there can be no assurance that an active and liquid market for the Company's shares will develop.
		Prior to Admission, there has been no public market for the Ordinary Shares. Following Admission, an active trading market for the Ordinary Shares may not develop and become established. If an active trading market is not developed or maintained, the liquidity and trading price of the Ordinary Shares may be adversely affected.
E		Offer
E1	Offer net proceeds and expenses	The net proceeds from the Offer receivable by the Company are estimated to be £48.6 million. These net proceeds are calculated after deduction of underwriting commissions and other estimated fees and expenses of the Offer (assuming the maximum amount of the Managers' incentive commission and the discretionary elements of the fees of the Group's other advisers will be paid and excluding VAT) of £6.4 million in aggregate.
		The Company expects the Selling Shareholder to receive £1,020,000.
E2a	Reasons for the Offer and use of	The Directors believe that the Offer and Admission will:
	the proceeds	• significantly raise the public profile and status of the Company which is particularly important for the Company's existing and potential blue chip customers and partners;
		• provide access to the capital markets, so facilitating the raising of funds to aid future growth at a level that is unlikely to be achieved in the private funding arena;

		• provide a more flexible capital structure to help the Company to grow organically and be better placed to take advantage of future opportunities;
		• provide a liquid market in Ordinary Shares for Shareholders and allow the valuation of the Company to be determined in a transparent and public manner; and
		• assist in the incentivisation and retention of key management and employees.
		The Directors believe that the Offer will allow the Company to address the opportunities in its target industrial sectors with a view to increasing shareholder value over time. The Company intends to apply the net proceeds from the Offer receivable by the Company to provide funding for:
		• the commercial expansion of both the CE Division and the DP&G Division;
		• the continuation of core research and development activities; and
		• the Company's general working capital and corporate requirements.
		The Directors have not finally determined how the net proceeds from the Offer receivable by the Company will be allocated as the Directors consider it important to retain flexibility in order to be able to respond to commercial opportunities within the Group's target industries as they arise.
E3	Terms and	Under the Offer, all Offer Shares will be issued or sold at the Offer Price.
	conditions of the Offer	Ordinary Shares will be offered (a) to certain institutional investors in the United Kingdom and elsewhere, and (b) in the United States only to persons reasonably believed to be QIBs in reliance on an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.
		It is expected that Admission will take place and unconditional dealings in the Ordinary Shares will commence on the London Stock Exchange at 8.00 a.m. (London time) on 9 July 2014. Prior to Admission, it is expected that dealings in the Ordinary Shares will commence on a conditional basis on the London Stock Exchange at 8.00 a.m. (London time) on 4 July 2014. The earliest date for settlement of such dealings will be 9 July 2014.
		All dealings in Ordinary Shares prior to the commencement of unconditional dealings will be on a "conditional basis", will be of no effect if Admission does not take place, and will be at the sole risk of the parties concerned. These dates and times may be changed without further notice.
		The Offer is subject to the satisfaction of certain conditions contained in the Underwriting Agreement (which are customary in agreements of this nature), including Admission having occurred by no later than 8.00 a.m. on 9 July 2014 (or such later time or date as the Company may agree with the Joint Global Co-ordinators, being no later than 16 July 2014) and the Underwriting Agreement not having been terminated prior to Admission.
		Certain conditions are related to events which are outside the control of the Company, the Directors and the Joint Global Co-ordinators.
		None of the Ordinary Shares may be offered for subscription or sale, or be subscribed or sold, and this Prospectus and any other offering material in relation to the Ordinary Shares may not be circulated, in any jurisdiction

		where to do so would breach any securities laws or regulations of any such jurisdiction or give rise to an obligation to obtain any consent, approval or permission, or to make any application, filing or registration.
		Investors agreeing to purchase Ordinary Shares pursuant to the Offer agree with each of the Company, the Selling Shareholder and the Managers to be bound by certain terms and conditions upon which Ordinary Shares will be sold under the Offer. Upon being allocated Ordinary Shares in accordance with the Offer, each investor agrees to become a member of the Company, to acquire the Ordinary Shares allocated to it at the Offer Price and to pay the Offer Price for the Ordinary Shares allocated to it. Where an investor fails to pay as directed, the relevant investor shall remain liable to pay such amount and shall be deemed to have appointed the Joint Global Co-ordinators to sell any or all of the Ordinary Shares allocated to it at such price as the Joint Global Co-ordinators may be able to achieve at such time.
		Under the terms and conditions of the Offer, each investor makes certain representations, warranties and acknowledgements to the Company, the Selling Shareholder and the Managers customary for an offer of this type, including but not limited to: (i) in relation to certain characteristics of the investor; (ii) the investor's compliance with restrictions contained in the Offer and with specified laws and regulations; (iii) reliance, responsibility and liability in respect of this Prospectus, the Offer and information outside this Prospectus; (iv) compliance with laws; (v) jurisdiction; and (vi) liability for duties or taxes.
		On request, an investor may be required to disclose certain information, including any information about the agreement to purchase Ordinary Shares, the investor's nationality (if an individual) and jurisdiction in which the investor's funds are managed or owned (if a discretionary fund manager). The terms and conditions also provide for the following issues: the sending of documents to the investor; the investor being bound by the Articles upon transfer of Ordinary Shares; the application of English law to the contract to purchase Ordinary Shares; and the situation where there exists joint agreements to purchase Ordinary Shares.
E4	Description of any interest that is material to the Offer	Canaccord holds Convertible Loan Notes issued by the Company with a nominal value of £5,000,000. On Admisssion, all outstanding Convertible Loan Notes will automatically convert into Ordinary Shares at a conversion price which is the lower of 250 pence and the Offer Price.
		As at the date of this Prospectus, the directors of Parva Capital and other connected persons (directly or indirectly) hold 588,994 Ordinary Shares. The Company does not consider that these interests are conflicting interests or that there are any other interests, including conflicting interests, that are material to the Offer.
E5	Name of persons selling securities and lock-up arrangements	300,000 Existing Ordinary Shares will be sold in the Offer by Philip Mitchell (a non-executive Director) for personal liquidity reasons. Dr. Mitchell was a founder in 1995 of Advanced Power Sources Ltd, a predecessor of the Group, and a member of the Group's original start-up team in 2001.
		Lock-up arrangements Pursuant to the Underwriting Agreement, the Company has agreed that, subject to certain customary exceptions, during the period of 180 days from the date of Admission, it will not, without the prior written consent of the Joint Bookrunners (not to be unreasonably withheld or delayed), issue,

		offer, lend, mortgage, assign, charge, pledge, sell, contract to sell or issue, sell any option or contract to purchase, purchase any option or contract to sell or issue, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any Ordinary Shares or any interest in Ordinary Shares or any securities convertible into or exercisable or exchangeable for, or substantially similar to, Ordinary Shares or any interest in Ordinary Shares or enter into any transaction with the same economic effect as any of the foregoing. This undertaking shall not apply to the operation of any employee share scheme which is in existence at the date of Admission and is described in this Prospectus.
		Pursuant to separate lock-up agreements, Meditor European Master Fund Limited, Evolution Placements Corporation, GIC Private Limited, Yukos International UK B.V. and (for such time as it continues to hold the relevant investment mandates) F&C Asset Management, as major Shareholders, have each agreed that, subject to certain exceptions, during the period of 180 days from the date of Admission (in respect of 78 percent of the Ordinary Shares held by them) and 90 days from the date of Admission (in respect of the remaining 22 percent of the Ordinary Shares held by them), they will not, without the prior written consent of the Joint Bookrunners, offer, sell or contract to sell, or otherwise dispose of any Ordinary Shares (or any interest therein or in respect thereof) or enter into any transaction with the same economic effect as any of the foregoing. The exceptions to these undertakings include certain customary exceptions as well as exceptions permitting disposals of Ordinary Shares where the proceeds are reasonably required to alleviate the financial distress of the Shareholder (subject to the prior written consent of the Joint Bookrunners), disposals effected by the Shareholder following (or pursuant to the terms of) any change of control of the Shareholder and (in the case of F&C Asset Management only) disposals effected to enable ongoing compliance by F&C Asset Management with applicable regulatory (and/or constitutional) requirements of its collective investment structures.
		Pursuant to the Underwriting Agreement, each of the Directors with interests in Ordinary Shares following Admission has agreed that, subject to certain customary exceptions, during the period from Admission until the publication of the Company's consolidated annual results for the financial year ending on 30 September 2014, they will not, without the prior written consent of the Joint Bookrunners, offer, sell or contract to sell, or otherwise dispose of any Ordinary Shares (or any interest therein or in respect thereof) or enter into any transaction with the same economic effect as any of the foregoing.
E6	Amount and percentage of dilution resulting from the Offer	Shareholders immediately prior to Admission will be diluted by 9.3 percent as a result of the Offer.
E7	Expenses charged to the Investor	Not applicable. There are no commissions, fees or expenses to be charged to investors by the Company under the Offer.

RISK FACTORS

Any investment in the Ordinary Shares is subject to a number of risks. Before making any investment decision, prospective investors should carefully consider the factors and risks attaching to an investment in the Ordinary Shares, the Group's business and the industry in which it operates, together with all other information contained in this Prospectus including, in particular, the risk factors described below. Prospective investors should note that the risks relating to the Group, its industry and the Ordinary Shares summarised in the Summary of this Prospectus are the risks that the Directors believe to be the most essential to an assessment by a prospective investor of whether to consider an investment in the Ordinary Shares. However, as the risks which the Group faces relate to events and depend on circumstances that may or may not occur in the future, prospective investors should consider not only the information on the key risks summarised in the Summary of this Prospectus but also, among other things, the risks and uncertainties described below. The following is not an exhaustive list or explanation of all risks that prospective investors may face when making an investment in the Ordinary Shares and should be used as guidance only. These risks and uncertainties are not the only ones facing the Group. The order in which risks are presented is not necessarily an indication of the likelihood of the risks actually materialising, of the potential significance of the risks or of the scope of any potential harm to the Group's business, financial condition and results of operations. Additional risks and uncertainties not presently known to the Group, or that the Group currently deems immaterial, may individually or cumulatively also have a material adverse effect on its business, financial condition, results of operations or prospects. If any such risk should occur, the price of the Ordinary Shares may decline and investors could lose all or part of their investment. Investors should consider carefully whether an investment in the Ordinary Shares is suitable for them in light of the information in this document and their personal circumstances.

Risks Relating to the Group and its Business

The Group may face challenges in achieving its business plan.

Historically the Group's revenue has derived from joint development agreements and the licensing of intellectual property to, and technology transfer arrangements with, OEMs in the automotive sector with whom the Group has been working on collaborations or joint venture projects. The Group recently separated its commercial operations into three divisions in order to focus on distinct opportunities to commercialise its fuel cell technologies in the Motive, CE and DP&G Divisions. The routes to market for the Group's products in these three sectors, whilst similar, are not identical. Although the Group is targeting (across its divisions) a licensing and/or royalty led business model in the medium to long term, the Group also intends to engage in product sales to third party distributors and retailers for on-sale to consumers in the CE Division and in selling power and related maintenance services directly to owners and operators of infrastructure sites, such as telecom tower infrastructure providers in India, in the DP&G Division. These activities in the DP&G Division will include the running of non-fuel cell assets, an activity that the Group has not undertaken to date. In each of the Group's divisions, both the fuel cell technology and the market opportunity for such fuel cell technology are immature and, therefore, the Group faces the challenge of generating and growing revenues at the same time as the markets develop. Additionally, in consumer electronics and distributed power and generation, the Group has less market experience than it does in the automotive sector and, therefore, may suffer from unforeseen difficulties or delays in achieving its business plan for those divisions, which could have a material adverse effect on the Group's business, financial condition, results of operations or prospects.

The Group's business plan assumes achievement of certain pricing margins. However, as the Group's existing and target OEM partners and customers are substantial international businesses and accordingly have significant bargaining power when dealing with their suppliers there is a risk that the Group may be unable to secure advantageous prices and contractual terms for the supply of its technology. This may result in the Group being unable to achieve its financial targets which would adversely impact the Group's prospects, results of operations and financial condition.

The Group may require further funding in the future, the availability of which is uncertain.

Having analysed the Group's capital and operating expenditure requirements over the short to medium term, the Company is of the opinion that (taking into account the net proceeds receivable by the Company pursuant to the Offer) the working capital of the Group is sufficient for its present requirements, that is, for at least 12 months from the date of this Prospectus. The Group's longer term liquidity and capital requirements are difficult to predict because they depend on numerous factors, including the success of the Group's products, the Group's research and development activities, relationships with third-party business partners, the impact of competing technologies and market developments. Furthermore, the Group's business plan must account for differing revenue generating activities and capital investment programmes across its three divisions, whilst also seeking to ensure that the Group has the capability to respond to strategic opportunities that may arise within its target markets. In response to or as a result of any one of, or a combination of, these factors, the Group may need to incur additional capital or operating expenditure or accelerate planned capital expenditure, and may therefore incur net cash outflows in excess of those anticipated in its business plan such that it would be unable to meet its longer term working capital requirements, support additional research and development or take advantage of strategic market opportunities without raising additional financing.

The ability to secure any such additional financing will be subject to a number of factors, including the Group's operating performance and financial condition, as well as market conditions and other factors beyond the control of the Group. These factors could also make the terms and conditions of additional financing unattractive for the Group. The Group may not be able to raise additional funds when needed and as a result its ability to successfully operate and grow its business and progress through further stages of development could be materially adversely affected.

The Group has historically been loss-making and may continue to make losses.

The Group's business was launched in 2001. However, the commercial deployment of the Group's products and services to date has been limited and the Group's ongoing capital and operational funding requirements have historically been financed predominantly through equity investments by its existing shareholders. The Group has incurred losses in each financial year other than the financial year ended 30 September 2012 (when it made a trading profit of £0.6 million due to the £37.0 million of revenue generated as a result of the Suzuki licence agreement entered into in 2011). The Group will be required to incur further expenditure in coming years to develop its business. There can be no assurance that the Group will be successful in achieving a sustainable transition, whether at all or as planned, to large-scale commercial revenues which will enable the Group to become or to remain profitable. As the Group's commercial deployment of its products and services to date has been limited and its current business plan focuses on the commercialisation of these products and services, its historical financial and operating data may be of limited value in evaluating its ability to operate profitably or increase profitability in the future.

In order for the Group to achieve profitability, the following steps, among others, must be achieved: the Group must successfully introduce its products into the markets on which it is focused, the hydrogen infrastructure that is needed to support the Group's growth must be available and cost efficient, the Group must accurately evaluate the markets for, and react to, competitive threats in both fuel cell technology and other technologies, and the Group must ensure its products' build costs and lifetime service costs are competitive with comparable products. If the Group is unable to successfully take these steps, it may never operate profitably, and, even if it does achieve profitability, it may be unable to sustain or increase its profitability in the future.

The Group depends on key personnel and the failure to retain key personnel or attract qualified employees could limit the Group's growth.

The success of the Group and its business strategy are dependent on its ability to attract and retain key management, commercial and technical personnel, including those with engineering expertise. As a result of recent improvements in economic sentiment and the relative scarcity of qualified engineers in the UK (where the Group has its principal research facilities), the level of competition for the services of qualified engineers is high which may hinder the Group's recruitment efforts, lead to higher than planned staff attrition and/or lead to increased personnel costs. As the Group's business grows, it will continue to recruit additional management, commercial and technical personnel with the appropriate skills to support the Group's development. This is particularly relevant for the DP&G Division's operations where the Group will require the skills and expertise of individuals with operational experience in relation to Indian telecom towers. In addition, as the Group continues to commercialise its technology and expand its partner relationships, the Group will seek to retain and incentivise existing key personnel in order to achieve its business objectives. It may, however, face difficulties in doing so because of factors such as the growth in the number of companies operating in the fuel cell industry, and in particular the risk of current or future competitors recruiting the Group's personnel, or the increasing requirements for personnel with the requisite skill sets in complementary industries. This could result in the Group losing personnel with material knowledge of its technology or the skills needed to commercialise this technology, or being unable to procure adequate replacements for such personnel. This could have a material adverse effect on the Group's business, financial condition, results of operations or prospects.

The Group may face challenges in relation to its planned expansion across three separate divisions.

The Group's anticipated expansion across its three separate divisions will require increased levels of activity and could place serious demands on management, administration and corporate support, as a result of, for example, competing and/or conflicting support requirements from different divisions. In addition, in order to ensure that the Group is able to deliver its divisional business plans, the Group may be required to make investments in its engineering and logistics systems and its financial and management information systems. Failure to implement such changes effectively, or at all, may cause material disruption to, or delays in, the implementation of the Group's business plan and have adverse consequences to the Group's operational and financial performance.

In addition, the development of the DP&G and CE Divisions, as well as the existing Motive Division, will significantly increase the scope of the Directors' and senior management's responsibilities. For example, the Group will be required to determine the most appropriate investments across its three divisions, as well as ensuring that each division achieves its performance targets and delivers its business plan. There is a risk that the Group may not possess the requisite management skills and systems to allow it to implement its strategy effectively; this may include management being engaged in resolving issues in one division to the detriment of supporting another division. Further, following Admission, the Company will also be subject to additional legal and regulatory requirements as a public company, such as compliance with the Disclosure and Transparency Rules and the continuing obligations set out in Chapter 14 of the Listing Rules. Compliance with these rules and regulations will increase the Group's legal and financial compliance costs, making some activities more difficult, time-consuming or costly and increasing demand on its systems and resources, including management time. Any failure by the Group to manage its anticipated growth effectively or to implement its strategy in a timely manner may have a material adverse effect on the Group's business, financial condition, results of operations or prospects.

The Group is developing complex, innovative technology products which require further technical development along with significant adoption by customers in order to become fully commercialised.

The Group is developing complex, innovative technology derived from in-house intellectual property and research with the aim of deploying it, usually in conjunction with its OEM or manufacturing partners, in products intended for large-scale manufacture and distribution. Because of the complex, innovative nature of this technology, projects and programmes may not be delivered on time or on budget or may fail to achieve expected performance criteria. This could delay new product launches or result in deficiencies in the products that are launched. A delay in a product launch or the launch of a product that does not meet customer expectations could create an impression that fuel cell technology is not suitable for such products (or will not be suitable without further significant development over time) and is therefore likely to have a materially adverse effect on the adoption of fuel cell technology by customers at the pace and in the scale that is required for the Group's technology to be fully commercialised in mass market products.

The commercialisation of the Group's fuel cell products and technologies also depends upon its ability to achieve a suitable total cost of ownership of these products and the cost effective implementation of the technologies, since currently fuel cell products are more expensive when compared with products based on existing technologies, such as ICEs and batteries. The Company may not be able to sufficiently reduce the cost of these products without reducing their performance, reliability and durability, which would adversely affect the willingness of customers to buy the products.

The Group is reliant on a small number of customers.

The Group is currently reliant on revenue from a small number of customers and there can be no assurance that it will be able to obtain or retain additional customer relationships. For example, in the automotive sector, there are a limited number of both existing and potential customers as it is a concentrated industry in which a number of OEMs already have their own fuel cell programmes and so may be less receptive to the product offering of the Motive Division.

In addition, there are relatively few infrastructure providers in the Indian telecom tower market and these infrastructure providers are the DP&G Division's target customers. Although the Group has customer relationships with two such providers currently, if the Group were unable to secure relationships with even a small number of the other infrastructure providers this would limit the ability of the Group to further expand its share of the market in India for providing power to telecom towers, even if the number of towers grows.

In the CE Division, the Group has one existing relationship with a large, international OEM and a limited number of relationships in relation to its UppTM product. Whilst the Group's aim is to expand and diversify its customer portfolio (including expanding into new target markets through its CE Division and DP&G Division) there can be no assurances that the Group will be able to secure a sufficient level of new customer relationships to fully commercialise its technology in any of its target sectors.

As the Group's business model focuses on developing key strategic relationships with important customers in its target markets to assist in commercialising the Group's technology and its business to business model within those markets, the Group is likely to remain reliant on a relatively small number of customers during the next phase of development of its business.

Furthermore, there is no certainty that every customer relationship which the Group currently has or establishes in the future will be successful, will continue or will deliver anticipated revenue. Additionally, existing relationships may be subject to change as a result of customer priorities, external pressures or the deterioration of a customer's financial condition, any of which may alter the relationship, including by way of the customer seeking to renegotiate previously agreed terms.

The Group is committed to contractual targets with its customers and failure to meet those targets could result in contracts not being renewed or termination of existing contracts.

The Group has a number of customer contracts that require adherence to milestones and performance targets. In the event that the Group fails to meet particular milestones or performance targets under its commercial contracts, collaborations, joint developments or joint venture arrangements, it would likely result in the failure of the project and possibly the termination of the commercial contract, collaboration, joint development or joint venture. The ability to meet the milestones and targets agreed by the Group in its commercial contracts, collaborations, joint developments or joint venture arrangements with OEMs and with its other customers is an important measurement of the Group's technical capabilities and for the prospects of the Group's technology being commercialised in the OEM's and other customers' mass market products. Failure to meet such milestones and targets, even if it does not result in termination of the existing contract, could result in the OEM or other customer not entering into further contracts for future stages of a collaboration which were anticipated when the first contract was put in place and/or not engaging the Group in additional projects which the OEM or other customer might commission and would also result in damage to the Group's reputation which could hinder the Group in establishing relationships with other OEMs and other customers.

In power supply agreements with telecom tower operators, a failure to meet contractual targets could lead to loss of revenue or financial penalties, or in some cases provide the infrastructure provider the ability to terminate the contract leading to a potentially significant loss of future activity and could have a material adverse effect on the Group's business, financial condition, results of operations or prospects.

The Group faces strong competition and may not be able to compete successfully.

The Group is targeting a number of markets and in each of these markets it faces competition from various competitors. These include other fuel cell developers, OEMs with in-house fuel cell development programmes, manufacturers and developers of incumbent technology (such as internal combustion engines in the automotive sector, lithium ion batteries in the consumer electronics sector and diesel generators in the distributed power and generation sector) and, for certain applications, developers of competing new technologies (such as solar, wind and biomass power generation) or combinations of these technologies in hybrid systems.

The new energy market as a whole is rapidly developing and the Directors anticipate that the Group will face competition both from existing competitors, who may make significant improvements to their product offerings, and additional competitors entering the market. In particular, it is likely that largescale operators with significant investment budgets (such as major OEMs with large customer bases in the Group's target markets and who have existing products that are currently powered by incumbent technology) will seek to expand their product offering by bringing their own fuel cell powered products to market if adoption of fuel cell technologies and systems increases. These large-scale operators may choose to develop such technology in-house or in partnership with another of the Group's competitors, thereby reducing the Group's routes to market. If the Group's competitors establish a more prominent market position than it, the Group may be unable to increase its sales or market share, which could have a material adverse effect on the Group's business, financial condition, results of operations or prospects.

Many of the companies in the energy industry (including OEMs with separate business units involved in fuel cell technology) have substantially greater capital resources, research and development staff, facilities and experience available to them than the Group does. Such entities have developed, may be developing or could in the future develop products which are competitive with the Group's business. Additionally, they may be able to devote greater resources to the promotion and sale of such products. There can be no assurance that the Group's competitors will not succeed in developing or marketing technologies that are more effective or less expensive than those developed or marketed by the Group or that would render its technology or business model obsolete or non-competitive. The Group may need to invest significant financial resources in research and development to keep pace with technological advances and to compete effectively in the future, and there can be no assurances that it will be able to do so successfully.

Any inability to implement the Group's growth strategy by entering emerging markets may adversely affect its results of operations.

The Group expects fuel cell technology to be adopted in a number of geographical markets and the Group's growth strategy relies in part on the expansion of its businesses in parts of the world which are less developed. The costs associated with entering and establishing in such markets may be higher than expected, and the Group may face significant competition in such markets. In particular, based on the experience of certain of the Group's key senior managers and advice received from external advisors, the Group understands that its business may face a range of risks and challenges in its initial target markets in parts of Africa and India (which are being targeted by the CE Division and the DP&G Division, respectively), including:

• difficulties in managing overseas operations;
• difficulties and delays in contract enforcement and the collection of receivables under the legal systems of foreign countries;
• regulatory and legal requirements affecting its ability to enter new markets through joint ventures with local entities;
• changes in laws and regulations;
• inconsistent application of existing laws and regulations;
• unclear regulatory and taxation systems and divergent commercial and employment practices and procedures;

• difficulties in obtaining regulatory approvals;

• overcoming the logistical challenges of the supply and delivery of hydrogen;

• export and import restrictions;
• multiple tax regimes (including regulations relating to transfer pricing and withholding and other taxes on remittances and other payments from subsidiaries);
• foreign investment restrictions; and
• foreign exchange controls and restrictions on repatriation of funds.

It is expected that these (or similar) risks will also be encountered in other emerging markets that the Group may enter in due course.

If the Group is unable to manage the risks related to its expansion and growth in emerging markets and therefore fails to establish a strong presence in those markets, its business, results of operations and financial condition could be materially adversely affected.

The Group relies on specialised facilities for the development and testing of its technology and products which, if unavailable, would impact the Group's operations.

The Group requires specialised facilities such as laboratories with supplies of hydrogen gas and suitable gas extraction equipment in order to develop and test its technology and the absence of those facilities for any material period would adversely impact the Group's operations. The specialised nature of the facilities means that alternative or replacement facilities may not be available immediately or at all should the Group's facilities be unavailable. Additionally, the specialised nature of the facilities limit the extent to which the Group's disaster recovery and business continuity plans can mitigate the impact of any incident affecting facility availability. If the Group's facilities were unavailable for a significant period of time it could have a material adverse effect on the Group's business, financial condition, results of operations and prospects.

The Group relies on third parties to manufacture its products.

The Group contributes its design expertise to the development of products to be mass manufactured and undertakes limited joint venture manufacturing through its relationship with Suzuki but does not currently and does not intend to undertake the mass manufacture of any of its products itself. As such, it is, and will continue to be, dependent on third parties to successfully produce its products in the required numbers and to the required specification.

If a third party manufacturer were to breach its contractual commitments to supply the Group's products, the Group's only redress may be to pursue the manufacturer in the courts for damages and such an action could be time-consuming and costly, and, even if successful, may not adequately compensate the Group for any loss of profit or loss of business opportunity.

The Group's reliance on contract manufacturers means the Group is and will remain exposed to risks relating to the contract manufacturer's business. These include:

• the contract manufacturer's ability to employ and retain suitably qualified staff and to maintain good labour relations with its workforce;
• the level of investment the contract manufacturer makes in its factory premises, plant and equipment;
• the contract manufacturer's ability to create and effectively manage the supply chain in order to successfully and consistently manufacture the Group's products to the required standards; and
• reputational risks to the Group if the contract manufacturer fails to meet legal or regulatory standards or if the products it manufactures for another customer are materially deficient and such failure or deficiency becomes generally known.

In addition, many contract manufacturers are situated overseas, often in emerging markets, and the Group is therefore exposed to risks relating to the political and regulatory framework of those overseas jurisdictions as well as the need to ensure that manufactured products can be successfully distributed to the Group's sales territories.

There are relatively few contract manufacturers who have the necessary scale and skill set to produce commercially viable products in sufficient volumes for the Group's anticipated needs. Accordingly, if the Group needed to replace an existing contract manufacturer there may be a limited number of alternatives and the Group may not be able to secure commercially acceptable terms from an alternative manufacturer. The failure to engage an alternative manufacturer on commercially acceptable terms, or at all, could have a material adverse effect on the Group's business, financial condition, results of operations or prospects.

The Group is dependent on third party service providers and third party suppliers.

The Group relies, and will continue to rely, on third party service providers to deliver its business plan. Both the CE and DP&G Divisions will be reliant on third party service providers to provide logistics and distribution of products and equipment (for example, the transport of products from a contract manufacturer to a customer delivery point for the CE Division or the delivery of diesel, or in due course, hydrogen, to telecom tower sites in India for the DP&G Division). In addition, service providers will be used to provide field services for the assets in the DP&G Division and to support cartridge return and re-fill processes for the CE Division. If a service provider were to breach its contractual commitments, the Group's only redress may be to pursue the service provider in the courts for damages and such an action could be time-consuming and costly, and, even if successful, may not adequately compensate the Group, for example, in respect of any loss of profit or loss of business opportunity. Any failure by such third party service providers to meet their contractual obligations to the Group could have a material adverse effect on the Group's business, financial condition, results of operations or prospects.

Furthermore, whilst the Group's contract manufacturers will manage their own supply chains, the Group will continue to hold relationships with: (i) key component suppliers (which are likely to be used by contract manufacturers) and (ii) a more extensive supply chain to support its ongoing development activities, including those relating to joint development agreements with customers in the Motive Division. A supplier's failure to supply materials or components in a timely manner, or to supply materials and components that meet the Group's quality, quantity or cost requirements, or the Group's inability to obtain substitute sources for these materials and components in a timely manner or on terms acceptable to it, could harm its ability to meet its contractual obligations to its customers and OEMs. To the extent that the processes that the Group's suppliers use to manufacture the materials and components are proprietary, the Group may be unable to obtain comparable materials or components from alternative suppliers, which could adversely affect its ability to produce viable fuel cell products or significantly raise its cost of producing such products.

The Group is, and expects to continue to be, exposed to foreign currency exchange risk.

The Group's financial statements are prepared in Sterling but once material revenue is being generated from the Group's CE and DP&G Divisions, the majority of the Group's business is expected to be carried out in currencies other than Sterling. Historically, the Group's Motive business has carried out business in Sterling and expects to continue to do so; however the Group's CE Division has entered into, and is likely in the future to enter into, contracts pursuant to which payments are made or received in US dollars. The Group, through its DP&G Division, also conducts its business in India in Indian Rupees. As a result, the Group is exposed to both translational and transactional foreign currency exchange risk.

Translational foreign currency exchange risk arises when translating the value of the Group's non-UK assets and liabilities and the results of its non-UK subsidiaries into Sterling. To the extent that there are fluctuations in exchange rates in these currencies, this would have an impact on the figures consolidated in the Group's accounts, which could have a material impact on the Group's financial position or results of operations, as shown in the Group's accounts going forward. Transactional foreign currency exchange risk arises as a result of payments the Group makes or receives in local currencies and as a result of differences in exchange rates on the dates commercial transactions are entered into and the dates they are settled.

The Group does not currently hedge its foreign currency exposure. In the future the Group may enter into currency hedging arrangements, if the Directors believe it to be appropriate, which may expose the Group to further risk of actual loss, as well as the need to make adjustments for financial reporting purposes.

Changes in government policies and regulations could adversely affect the market for the Group's products.

The fuel cell industry is in its development phase and as such there are limited governmental policies and regulations regarding fuel cells. However, the Group expects this position to change as the fuel cell industry further develops and the Group expects it will encounter an evolving policy and regulatory position across its markets for a significant period of time. This evolution is likely to lead to uncertainty for the Group, its customers and its partners regarding the commercialisation of the Group's technology. For example, government policy and regulation of the location and operating parameters of hydrogen storage and transportation and refuelling sites may have an impact on the development of the hydrogen infrastructure required by the Group's technology and, therefore, affect the Group's business.

Interest in fuel cell technology has been driven in part by environmental policies, laws and regulations and there is no guarantee that those policies, laws and regulations will not change or be supplemented. The Group's business, financial condition, results of operations and prospects could be materially adversely affected if the result of any such changes is to no longer encourage the development and growth of clean power technologies or no longer drive their development and growth as quickly. As an example of changes to previously agreed legislation, European Union Regulation (EC) No 443/2009 set mandatory emission reduction targets for new cars which were initially required to be achieved by 2020, but this deadline has now been extended to 2021 by Regulation (EU) No 333/2014 as a result of industry lobbying. In addition, the Group's business model in the DP&G Division focusing on the telecoms market in India assumes that the Group will benefit from directives to increase the use of green power in telecoms infrastructure. Accordingly, changes to those directives that do not favour the Group's technology or business model may adversely impact the business of the DP&G Division in the Indian market.

If governments change their laws and regulations such that the development of alternative energy sources is no longer required or encouraged, the demand for alternative energy sources, such as fuel cell technology may be reduced or delayed and the Group's business, financial condition, results of operations and prospects could be materially adversely affected as a result.

The development of uniform codes and standards for hydrogen powered vehicles and related hydrogen refuelling infrastructure may not develop in a timely fashion, if at all.

In the automotive industry uniform codes and standards may need to be developed or refined for fuel cell systems, fuel cell components, hydrogen internal combustion engines or for the use of hydrogen as a vehicle fuel. Establishment of appropriate codes and standards is a critical element to allow fuel cell system developers, fuel cell component developers, hydrogen internal combustion engine developers, hydrogen infrastructure companies and hydrogen storage and handling companies to develop products that will be accepted in the marketplace.

The development of hydrogen standards is being undertaken by numerous organisations. Given the number of organisations pursuing hydrogen codes and standards, it is not clear whether universally accepted codes and standards will be adopted in a timely fashion, if at all and the Group's business and financial prospects could be materially adversely affected as a result.

The Group's ability to achieve its business plan may be adversely impacted by competition between its divisions for key technology resources or by a failure to effectively manage the allocation of technology resource.

The Group operates a 'design once, deploy many times' approach and, consequently, each of the Group's divisions is reliant on the Group's core technology team. The ability of this team to meet the demands of all divisions may be adversely impacted by unforeseen divisional requirements or by two or more divisions requiring results from the core technology team at the same time resulting in resource limitations. In addition, although the divisions have dedicated resources in a number of functions, each division remains reliant on wider group resources (such as the Group's marketing team) to support its activities. If the Group fails to adequately manage and predict requirements and deploy its available resources effectively, it may not be able to operate its business effectively and the ability of the Group to successfully capitalise on all opportunities available to it will be adversely affected, which could have a material adverse effect on the Group's performance and financial condition.

The Group is dependent on proprietary technology underpinned by intellectual property and the Group may not be able to obtain, maintain, defend or enforce those intellectual property rights.

The Group's success will depend in part on its ability to obtain, maintain, defend and enforce its patents and the other intellectual property rights that underpin its proprietary technologies and products.

There is no assurance that:

• any currently pending or future patent applications will be granted;
• that the Group's patent applications (and any subsequent or resulting granted patents) will not be challenged by third parties;
• where patents have been issued to the Group, that others will not be able to design around such patents to create a competing technology or product;
• that competitors will not develop similar products which are not within the scope of the Group's patents;
• that third parties' rights, including third party patents, will not have an adverse effect on the Group's ability to pursue some or all aspects of its business;
• that, where the Group relies on confidential and/or proprietary know-how, others will not gain access to it notwithstanding the Group's protocols for protecting that know-how; or
• that patent protection will be available in all the jurisdictions that the Group is targeting or in developing countries where the Group's third party manufacturers are located.

The Group may have to pursue court proceedings, potentially in more than one jurisdiction, to enforce its intellectual property rights. Intellectual property litigation is typically costly and time-consuming and its outcome is often unpredictable and, as such, even if the Group is successful in defending its intellectual property, the costs incurred and the diversion of management time and attention could have a materially adverse effect on the Group's business, results of operation or financial condition. Furthermore, the Group faces the risk that there may be patents issued to third parties that relate to its proposed product applications and technology of which the Group is not aware or that it must challenge in the courts to continue its operations as currently contemplated and this could have a material adverse effect on the Group's business, financial condition, results of operations or prospects.

The Group may be exposed to litigation in the future in respect of intellectual property infringement or product liability claims.

The business carried on by the Group means that it faces inherent risks in respect of intellectual property infringement and product liability claims, each of which could materially adversely affect the Group's business, results of operations or financial condition.

The Group's commercial success depends upon its ability, and the ability of any third party with which it may partner, to develop, manufacture, market and sell its products and use its patent-protected technologies without infringing the patents of third parties. The Group's products may infringe, or may be alleged to infringe, existing patents or patents that may be granted in the future. In addition, and particularly in its CE Division given the nature of patent disputes in the CE industry, the Group could be exposed to third parties who accumulate and utilise patents in order to commence infringement proceedings against alleged infringers of those patents. As a result, the Group may become party to, or threatened with, proceedings or litigation regarding patents. If the Group is found to infringe a third party's patent, the Group could be required to obtain a licence from such third party to continue developing and marketing its products and technology or the Group may elect to enter into such a licence in order to settle litigation or in order to resolve disputes prior to litigation. However, the Group may not be able to obtain any required licence on commercially reasonable terms or at all. The Group could also be forced, including by court order, to cease to develop or market products based on the infringing technology or product and/or pay financial penalties. Any of these results could have a material adverse effect on the Group's business, financial condition, results of operations or prospects.

The Group's products use hydrogen which is a flammable gas and therefore are potentially dangerous products. Additionally, many of the Group's products are intended to be manufactured for consumer mass markets or to be incorporated or embedded into products which will be widely available to consumers. Therefore, the Group faces the risk of product liability claims and associated adverse publicity should the products malfunction or cause injury or damage. Criminal or civil proceedings might be filed against the Group or the Group may be joined in litigation against its OEM or manufacturing partners including proceedings arising from acts by those OEM or manufacturing partners over which the Group has little or no control. Any such product liability claims may include allegations of defects in design or manufacture or a failure to warn of dangers inherent in the product and may involve negligence or strict liability offences. A malfunction or the inadequate design of the Group's products could result in contractual, tort or warranty claims. The cost and expenses of defending product liability claims or the amount of any settlement or damages resulting from an adverse judgement arising from such claims could be substantial. In addition, a well-publicised actual or perceived problem may damage the Group's reputation and could adversely affect the market's perception of the Group's products.

The Group may be adversely impacted by political instability, wars, terrorism, multinational conflicts, natural disasters, fuel shortages/prices, epidemics, strikes and other risks in the international markets in which it operates.

The Group may be subject to various risks associated with conducting its business and its operations in international markets and may face challenges including political instability, wars, terrorism, regional and/or multinational conflicts, natural disasters, epidemics and strikes. This risk is accentuated given the location of some of the Group's target markets, for example India and parts of Africa, and of its principal contract manufacturing partner in China. Any significant or prolonged disruptions or delays in the Group's operations related to these risks could adversely impact its results of operations.

The Group's DP&G Division is dependent on contractual arrangements with, and the cooperation of, telecom tower site owners for access to and operations on its sites as well as routine maintenance of power assets.

The Group's DP&G Division is focused initially on providing decentralised power to cellular telecom towers in India. It does not own any of the telecom tower sites at which it will be responsible for the supply of power and depends on its contractual arrangements with, and the cooperation of, the infrastructure providers and owners of the telecom tower sites in order to carry on its operations. A disruption in the relationship with the infrastructure providers and/or site owners may, notwithstanding any contractual rights the Group may have to access the sites, restrict the Group's access to the telecom tower sites or prevent the Group from accessing such sites which could have a material adverse effect on the Group's operations. In addition, since the majority of the assets used by the DP&G Division are located on third party sites, the Group does not have physical control over those assets and is dependent on i) service providers and infrastructure providers for the security of the assets; and ii) on third party field service providers for routine installation and maintenance of the assets. If those assets are damaged or stolen or fail as a result of poor maintenance standards, this would result in a disruption to the Group's operations and make it unable to supply power at the affected sites until those assets could be repaired or replaced, which could have a material adverse effect on the Group's business, financial condition, results of operations and prospects.

The Group may be liable for environmental damages resulting from its DP&G operations.

Part of the business plan for the DP&G Division is to manage (in the medium, and in relation to some sites, the long term) diesel generators in the Indian telecom towers market. As a result, the Group is exposed to the risk of harmful substances escaping into the environment, resulting in personal injury or loss of life, damage to or destruction of property and natural resource damage. Depending on the nature of a claim, the Group's current insurance policies may not adequately reimburse it for costs incurred in settling environmental damage claims and, in some instances, the Group may not be reimbursed at all.

In addition, the Group's business is subject to numerous laws and regulations that govern environmental protection and health and safety. The Group's operations may not comply with current or future laws and regulations and it may be required to make significant, unanticipated capital and operating expenditures to comply with such laws or regulations. Government authorities may seek to impose fines and penalties on the Group if it fails to comply with applicable environmental laws and regulations, or to revoke or deny the issuance or renewal of operating permits, for example those required to run diesel generators. Under such circumstances, the Group might be required to curtail or cease operations, conduct site remediation or other corrective action, or pay substantial damage claims.

Risks Relating to the Industry

Significant markets for fuel cell technology may never develop or may develop more slowly than the Group anticipates.

Fuel cell technology represents a new sector within the power generation market and significant markets for the technology may never develop or may develop more slowly than the Group anticipates. Whether or not customers will want to use fuel cell technology may be affected by many factors, some of which are beyond the Group's control, including: the emergence of more competitive technologies and products, including other environmentally clean technologies and products; the future cost of hydrogen or other fuels used by the Group's fuel cell technology; the future cost, and level of recycling, of platinum group metals, a key catalyst used in the Group's fuel cell; government support of fuel cell technology for the automotive industry by way of legislation, tax incentives, policies or otherwise; the manufacturing and supply costs for fuel cell components and systems; the perceptions of consumers regarding the safety of the Group's products; the willingness of consumers to try new technologies; the continued development and improvement of existing power technologies; and the future cost of fuels used in existing technologies.

If significant markets for fuel cell technology and the Group's products fail to develop, or develop more slowly than the Group anticipates the Group may never achieve profitability. In addition, the Group may be unable to continue to develop, manufacture or market its products if sales levels do not support continuation of the products. Such factors could have a material adverse effect on the Group's business, financial condition, results of operating or prospects.

Hydrogen may not be readily available on a cost-effective basis, in which case the Group's fuel cell products may be unable to compete with existing power sources and its revenues and results of operations would be materially adversely affected.

The Group's fuel cell products require hydrogen to operate. Significant growth in the use of hydrogenpowered devices in each of the Group's divisions requires the development of an appropriate refuelling infrastructure – on a cost-effective basis for Motive applications, and appropriate distribution of hydrogen for the DP&G Division's services for the refuelling cartridges for the CE Division's products. There is no guarantee that such logistical capabilities and infrastructure will be developed on a timely basis or at all and development will depend on the availability of public and private funding which may not reach the required levels or may be delayed. Although countries such as Germany, Japan, South Korea, the UK and the USA have begun developing the required infrastructure in the automotive industry, there is a risk acknowledged within the automotive industry that wide scale deployment and take-up of fuel cell vehicles will be reliant on the roll-out of refuelling infrastructure. Automotive manufacturers may delay or scale back the roll out of fuel cell vehicles, and customers may be less likely to buy fuel cell vehicles, if there is a lack or a perceived lack of infrastructure development. Whilst the Directors believe that the lack of infrastructure or logistical capabilities do not currently present a material problem, if they are not deployed or scaled up in tandem with the commercialisation of fuel cell products, it may have a material adverse effect on the Group's business, financial condition, results of operations or prospects. Moreover, even if hydrogen is easily accessible, if its price is such that electricity or power produced by the Group's systems would cost more than power provided by other means, the Group may be unable to compete successfully.

Technological changes in the energy industry could render the Group's technology obsolete.

The markets in which the Group operates are characterised by technological change and evolving industry standards. The future success of the Group will depend on its ability to adapt quickly to changing technologies, to adapt its products and technologies to evolving industry standards and to improve the performance and reliability of its products and technologies. To achieve market acceptance for its technologies, the Group must effectively anticipate and offer products that meet changing customer demands in a timely manner. If it fails to develop products that satisfy customer preferences in a timely and cost-effective manner, its ability to renew its contracts with existing customers and its ability to create or increase demand for its technologies and products will be harmed and this could have a material adverse effect on the Group's business, financial condition, results of operations or prospects.

Volatility or increases in raw material prices and energy costs as well as availability of materials and energy may affect profitability.

The Group, its contract manufacturers and the companies within its supply chain, purchase platinum and other rare earth metals typically used in electronic components such as the Group's fuel cells. Price increases with respect to raw materials, as well as energy and services, such as transport, used in developing and manufacturing the Group's products, that cannot be recovered by a corresponding price increase in the Group's products and/or licensing arrangements could have a material adverse effect on the Group's business, financial condition, results of operations and prospects. In addition, internal operating costs may increase for other reasons and there can be no assurance that the Group will be able to pass such increases to its customers or licencees in the future. In addition, there can be significant delays before any increase could be put into effect because of specific contractual provisions, competitive pressures or other factors. Platinum, rare earth metals and other raw material prices are subject to cyclical fluctuations, including the potential for increases which are beyond the Group's control. A substantial increase in such prices could have an adverse effect on the Group's operations, earnings and financial position.

The mid to long-term success of the Group's CE Division will be reliant on the development of fuel sources that have high energy density.

The mid to long-term success of the Group's smaller portable power generation technology used in products developed by the CE Division will, due to the growing demand for more energy dense solutions, become dependent on the ability to identify and commercialise fuels that have a significantly higher stored energy density than are currently available. The nature of high energy density chemical fuels is such that at present they are generally found in space, military or nuclear applications and thus may be difficult to commercialise due to restricted supply chains, export controls and their challenging properties. The Group cannot be certain that viable fuels of this type will become available by the time the Group expects them to be available and the Group may be constrained in its ability to develop or market its anticipated future generation products that are expected to rely on such fuel, which could have a material adverse effect on the Group's business, financial condition, results of operations or prospects.

Risks relating to the Offer and the Ordinary Shares

The price of the Ordinary Shares may fluctuate significantly and investors could lose all or part of their investment.

The share price of listed companies can be highly volatile. The market price for the Ordinary Shares could fluctuate significantly in response to many factors (including those referred to in this section), as well as stock market fluctuations unrelated to the trading performance of the Group, legislative changes and general economic, political or regulatory conditions. The Offer Price may not be indicative of prices that will prevail in the trading market and investors may not be able to resell the Ordinary Shares at or above the price they paid.

The Ordinary Shares have not previously been publicly traded, and there can be no assurance that an active and liquid market for the Company's shares will develop.

Prior to Admission, there has been no public market for the Ordinary Shares. Following Admission, an active trading market for the Ordinary Shares may not develop and become established. If an active trading market is not developed or maintained, the liquidity and trading price of the Ordinary Shares may be adversely affected.

The level of dividends payable to shareholders may fluctuate and the Company cannot guarantee that dividends will be declared in the future.

Any dividend on the Ordinary Shares will be limited by the underlying growth in the Group's businesses and, as a holding company, the ability of the Company to pay dividends will also be affected by the receipt of dividends from its subsidiaries. This is because, under English law, a company can only pay cash dividends to the extent that it has distributable reserves and cash available for this purpose. Furthermore, the Company might not pay dividends if the Board believes this would cause the Company to be less than adequately capitalised or if for any other reason the Board determines that it would not be in the best interests of the Company to pay a dividend (because, for example, the Board determines that profits could be better utilised by re-investing in the business). Future dividends will depend on, among other things, the Group's future profits, financial position, working capital requirements, general economic conditions and other factors that the Board deems significant from time to time.

The interests of current or potential significant minority Shareholders may conflict with those of other Shareholders and they may attempt to effect changes at the Company or acquire control over the Company.

Shareholders of the Company may from time to time engage in proxy solicitations, advance Shareholder proposals, attempt to acquire control over the Company or otherwise attempt to effect changes at the Company, including by directly voting their Ordinary Shares on Shareholder resolutions. The interests of significant minority Shareholders (of which there will be, so far as the Company is aware, immediately following Admission, 5 Shareholders, each holding 3 percent or more of the Ordinary Shares) may not coincide with the interests of the Group or the interests of other Shareholders and a significant minority Shareholder may attempt to exercise its influence in a manner that is not in the best interests of the Company and Shareholders as a whole. Campaigns by shareholders to effect changes at publicly traded companies are sometimes led by investors seeking to increase short-term shareholder value through actions such as financial restructuring, special dividends, share buy back programmes, demergers or sales of assets or even the entire company. The presence of significant minority Shareholders and any such campaigns may make future transactions more difficult or perhaps impossible to complete even if they are supported by other Shareholders. Responding to actions by activist Shareholders could be costly and time-consuming, disrupting the Group's operations and diverting the attention of the Directors and the Company's senior management from the pursuit of business strategies. Additionally, in such circumstances, uncertainty over the Company's direction and leadership may negatively impact the Company's relationship with its customers and make it more difficult to attract and retain qualified personnel and business partners. As a result, Shareholder campaigns could adversely affect the Company's results of operations and financial condition.

Substantial future issuances of Ordinary Shares could impact the market price of Ordinary Shares.

Other than in connection with Admission, the Company has no current plans for an offering of Ordinary Shares. However, it is possible that the Company may decide to offer additional Ordinary Shares in the future. Any substantial future issue of Ordinary Shares, or the perception that such issuance could occur, could adversely affect the market price of Ordinary Shares and make it more difficult for Shareholders to sell their Ordinary Shares at a time and price which they deem appropriate.

Future sales of Ordinary Shares by Shareholders may depress the price of the Ordinary Shares.

Future sales or the availability for sale of substantial amounts of the Ordinary Shares in the public market could adversely affect the prevailing market price of the Ordinary Shares and could also impair the Company's ability to raise capital through future issues of Ordinary Shares.

An investment in Ordinary Shares by an investor whose principal currency is not is not Sterling may be affected by exchange rate fluctuations.

The Ordinary Shares are, and any dividends to be paid on them will be, denominated in Sterling. An investment in Ordinary Shares by an investor whose principal currency is not Sterling exposes the investor to foreign currency exchange rate risk. Any depreciation in the value of Sterling in relation to such foreign currency will reduce the value of the investment in the Ordinary Shares or any dividends in relation to such foreign currency.

Pre-emption rights for US and other non-UK holders of Ordinary Shares may be unavailable.

In the case of certain increases in the Company's issued share capital, existing holders of Ordinary Shares are generally entitled to pre-emption rights to subscribe for such shares, unless shareholders waive such rights by a resolution at a shareholders' meeting. However, securities laws of certain jurisdictions may restrict the Company's ability to allow participation by shareholders in future offerings. In particular, US holders of ordinary shares in UK companies are customarily excluded from exercising any such preemption rights they may have, unless a registration statement under the Securities Act is effective with respect to those rights, or an exemption from the registration requirements thereunder is available. The Company does not intend to file any such registration statement, and the Company cannot assure prospective US investors that any exemption from the registration requirements of the Securities Act or applicable non-US securities law would be available to enable US or other non-UK holders to exercise such pre-emption rights or, if available, that the Company will utilise any such exemption.

The proposed Standard Listing of the Ordinary Shares will afford Investors a lower level of regulatory protection than a Premium Listing.

Application will be made for the Ordinary Shares to be admitted to a standard listing on the Official List. A standard listing will afford investors in the Company a lower level of regulatory protection than that afforded to investors in a company with a premium listing, which is subject to additional obligations under the Listing Rules. Further details regarding the differences in the protections afforded by a premium listing as against a standard listing are set out in the section entitled "Consequences of a Standard Listing" on page 39.

EXPECTED TIMETABLE FOR THE OFFER AND ADMISSION

Publication of Prospectus	4 July 2014
Results of Offer announced	4 July 2014
Conditional dealings in Ordinary Shares commence on the London Stock Exchange	8.00 a.m. on 4 July 2014
Admission becomes effective and unconditional dealings in Ordinary Shares commence on the London Stock Exchange	8.00 a.m. on 9 July 2014
Expected date for CREST accounts to be credited (where applicable)	9 July 2014
Despatch of definitive share certificates (where applicable)	14 July 2014

All references to a time of day are to London time. Each of the times and dates in the above timetable is indicative only and subject to change without further notice.

OFFER STATISTICS

Offer Price per Ordinary Share	340 pence
Number of Ordinary Shares in issue immediately prior to Admission	158,183,461
Number of New Ordinary Shares being issued under the Offer	16,174,251
Number of Existing Ordinary Shares being sold under the Offer	300,000
Number of Ordinary Shares in issue at Admission1	188,031,599
Percentage of Enlarged Share Capital represented by Offer Shares	8.8 percent
Gross proceeds of the Offer	54,992,453
Estimated net proceeds of the Offer receivable by the Company	48,599,408
Estimated net proceeds of the Offer receivable by the Selling Shareholder	1,020,000
Market capitalisation of the Company at the Offer Price at Admission	639,307,437

¹ Taking into account: (i) the New Ordinary Shares; (ii) 12,526,400 Ordinary Shares to be issued pursuant to the conversion of the Convertible Loan Notes of principal value £30,190,831 outstanding as at the date of this Prospectus which, together with accrued interest (net of applicable withholding taxes), will convert into Ordinary Shares automatically on Admission; and (iii) 1,147,487 Award Shares that vest on Admission under the 2013 Management Incentive Plan.

DIRECTORS, OFFICERS AND ADVISERS

Directors	Paul Heiden (Non-Executive Chairman) Dr. Henri Winand (Chief Executive Officer and Executive Director) John Maguire (Chief Financial Officer and Executive Director) Michael Muller (Non-Executive Director) Dr. Caroline Brown (Non-Executive Director) Martin Bloom (Non-Executive Director) Zarir J. Cama (Non-Executive Director) Flavio Guidotti (Non-Executive Director) Dr. Philip Mitchell (Non-Executive Director)
Company Secretary	Nicholas Heard
Registered Office	Charnwood Building Holywell Park Ashby Road Loughborough Leicestershire LE11 3GB
Joint Global Co-ordinator and Joint Bookrunner	Barclays Bank PLC 5 The North Colonnade Canary Wharf London E14 4BB
Joint Global Co-ordinator and Joint Bookrunner	Canaccord Genuity Limited 88 Wood Street London EC2V 7QR
Co-Lead Manager	Parva Capital Limited WSM Pinnacle House 17-25 Hartfield Road London SW19 3SE
Financial Adviser	NM Rothschild & Sons Limited New Court St Swithin's Lane London EC4N 8AL
Financial PR Adviser	Powerscourt 1 Tudor Street London EC4Y 0AH
Reporting Accountants and Auditors	KPMG LLP 31 Park Row Nottingham NG1 6FQ

Lawyers to the Company as to English law Pinsent Masons LLP

30 Crown Place London EC2A 4ES

Lawyers to the Company as to US law Proskauer Rose LLP

Lawyers to the Joint Global Co-ordinators and Ashurst LLP Joint Bookrunners as to English and US Law Broadwalk House

Ninth Floor Ten Bishops Square London E1 6EG

5 Appold Street London EC2A 2HA

Registrars Equiniti Limited Aspect House Spencer Road Lancing Business Park Lancing West Sussex BN99 6DA

PRESENTATION OF INFORMATION

1. Notice to Prospective Investors

Prospective investors should rely only on the information in this Prospectus when deciding whether to invest in the Ordinary Shares. No person has been authorised to give any information or to make any representations other than those contained in this Prospectus in connection with the Offer and, if given or made, such information or representations must not be relied upon as having been authorised by or on behalf of the Company, the Directors or any of the Managers or Rothschild. No representation or warranty, express or implied, is made by any of the Managers or Rothschild or selling agent as to the accuracy or completeness of such information, and nothing contained in this document is, or shall be relied upon as, a promise or representation by any of the Managers or Rothschild or selling agent as to the past, present or future. Without prejudice to any obligation of the Company to publish a supplementary prospectus pursuant to section 87G of the FSMA and PR 3.4.1 of the Prospectus Rules, neither the delivery of this document nor any subscription or sale made under this document shall, under any circumstances, create any implication that there has been no change in the business or affairs of the Company or of the Group taken as a whole since the date hereof or that the information contained herein is correct as of any time subsequent to its date.

The Company will update the information provided in this Prospectus by means of a supplement hereto if a significant new factor, material mistake or inaccuracy relating to this Prospectus occurs or arises prior to Admission that may affect the ability of prospective investors to make an informed assessment of the Offer. The Prospectus and any supplement thereto will be subject to approval by the FCA and will be made public in accordance with the Prospectus Rules. If a supplement to the Prospectus is published prior to Admission, investors shall have the right to withdraw their subscriptions made prior to the publication of such supplement. Such withdrawal must be done within the time limits set out in the supplement (if any) (which shall not be shorter than two clear Business Days after publication of such supplement).

The contents of this Prospectus are not to be construed as legal, financial, business or tax advice. Each prospective investor should consult his or her own lawyer, financial adviser or tax adviser for legal, financial or tax advice in relation to any purchase or proposed purchase of the Ordinary Shares. Each prospective investor should consult with such advisers as needed to make its investment decision and to determine whether it is legally permitted to hold Ordinary Shares under applicable legal, investment or similar laws or regulations. Investors should be aware that they may be required to bear the financial risks of any investment in Ordinary Shares for an indefinite period of time.

This Prospectus is not intended to provide the basis of any credit or other evaluation and should not be considered as a recommendation by any of the Company, the Directors, any of the Managers or Rothschild or any of their respective representatives that any recipient of this Prospectus should subscribe for or purchase the Ordinary Shares.

Prior to making any decision whether to purchase any Ordinary Shares, prospective investors should ensure that they have read this Prospectus in its entirety and, in particular, the section entitled "Risk Factors", and not just rely on key information or information summarised in it. In making an investment decision, prospective investors must rely upon their own examination of the Company and the terms of this Prospectus, including the merits and risks involved. Any decision to purchase Ordinary Shares should be based solely on this Prospectus.

Investors who purchase Ordinary Shares in the Offer will be deemed to have acknowledged that: (i) they have not relied on any of the Managers or Rothschild or any person affiliated with any of them in connection with any investigation of the accuracy of any information contained in this Prospectus or their investment decision; (ii) they have relied solely on the information contained in this Prospectus; and (iii) no person has been authorised to give any information or to make any representation concerning the Group or the Ordinary Shares (other than as contained in this Prospectus) and, if given or made, any such other information or representation should not be relied upon as having been authorised by the Company, the Directors, any of the Managers or Rothschild.

None of the Company, the Directors, any of the Managers or Rothschild or any of their representatives is making any representation to any offeree or purchaser of the Ordinary Shares regarding the legality of an investment by such offeree or purchaser.

Barclays and Canaccord have been appointed as Joint Global Co-ordinators and Joint Bookrunners in connection with Admission and the Offer and Parva Capital has been appointed as Co-Lead Manager to the Offer. Rothschild has been appointed as Financial Adviser to the Company in connection with the Offer. Barclays and Rothschild, each of which is authorised in the United Kingdom by the PRA and regulated in the United Kingdom by the FCA and the PRA, Canaccord, which is authorised and regulated solely by the FCA in the United Kingdom, and Parva Capital, which is an appointed representative of Hanson Asset Management Limited which is authorised and regulated solely by the FCA in the United Kingdom, are acting exclusively for the Company and no one else in connection with the Offer and will not regard any other person (whether or not a recipient of this Prospectus) as a client in relation to the Offer and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients nor for giving advice in relation to the Offer or any transaction or arrangement referred to in this Prospectus.

Apart from the responsibilities and liabilities, if any, which may be imposed on the Managers and Rothschild by FSMA or the regulatory regime established thereunder, none of the Managers and Rothschild accepts any responsibility whatsoever, and makes no representation or warranty, express or implied, for the contents of this Prospectus, including its accuracy, completeness or for any other statement made or purported to be made by it or on behalf of it, the Company, the Directors or any other person, in connection with the Company, the Ordinary Shares or the Offer and nothing in this Prospectus shall be relied upon as a promise or representation in this respect, whether as to the past or the future. Each of the Managers and Rothschild accordingly disclaims all and any liability whatsoever, whether arising in tort, contract or otherwise (save as referred to above), which it might otherwise have in respect of this Prospectus or any such statement.

In connection with the Offer, each of the Managers and any of their respective affiliates, acting as an investor for its or their own account(s), may acquire Ordinary Shares, and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for its or their own account(s) in Ordinary Shares and other securities of the Company or related investments in connection with the Offer or otherwise. Accordingly, references in this Prospectus to the Ordinary Shares being offered, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, dealing or placing by, each of the Managers and any of their respective affiliates acting as an investor for its or their own account(s). None of the Managers intends to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

The Managers and Rothschild and their respective affiliates may have engaged in transactions with, and provided various investment banking, financial advisory and other services to, the Company, for which they would have received customary fees. The Managers and Rothschild and any of their respective affiliates may provide such services to the Company and any of its affiliates in the future.

2. Interpretation

Certain terms used in this Prospectus, including all capitalised terms and certain technical and other items, are defined and explained in Part IX "Definitions and Glossary".

References to the singular in this Prospectus shall include the plural and vice versa, where the text requires. Any references to time in this Prospectus are to London times unless otherwise stated.

3. Presentation of financial information

The Group's consolidated historical financial information in Part V "Historical Financial Information" of this Prospectus has been prepared in accordance with the requirements of the PD Regulation and the Listing Rules and in accordance with IFRS as adopted by the EU (hereinafter such historical financial information shall be referred to as "prepared in accordance with IFRS", which should be read as described herein). The significant accounting policies of the Group are set out within note 6 of the Group's consolidated historical financial information in Part V "Historical Financial Information". The consolidated historical financial information of the Group in Part V "Historical Financial Information" has been reported on.

The historical financial information included in Part V "Historical Financial Information" of this Prospectus has not been audited in accordance with auditing standards generally accepted in the United States of America ("US GAAS") or auditing standards of the US Public Company Accounting Oversight Board ("PCAOB"). The financial information included in Part V "Historical Financial Information" and other financial information included throughout this Prospectus is not intended to comply with the reporting requirements of the SEC. Compliance with the reporting requirements of the SEC would require the modification, reformulation or exclusion of certain financial measures. Potential investors should consult their own professional advisers to gain an understanding of the financial information in Part V "Historical Financial Information" and the implications of differences between the reporting standards noted herein.

Unless otherwise stated in this Prospectus, financial information in relation to the Group referred to in this Prospectus has been extracted without material adjustment from the historical financial information in Part V "Historical Financial Information" (prepared in accordance with IFRS) or has been extracted from those of the Group's accounting records that have been used to prepare that historical financial information. Investors should ensure that they read the whole of this Prospectus and not only rely on the key information or information summarised within it.

EBITDA, as used in this document, represents earnings before interest, taxes, depreciation and amortisation. EBITDA is not defined under IFRS and other companies may calculate EBITDA differently or may use such measure for different purposes than the Group does.

4. Market, economic and industry data

Where third party information has been used in this Prospectus, the source of such information has been identified.

The Group confirms that all such data contained in this Prospectus has been accurately reproduced and, so far as the Group is aware and able to ascertain, no facts have been omitted that would render the reproduced information inaccurate or misleading.

5. Roundings

Certain data in this Prospectus, including financial, statistical, and operating information, has been rounded. As a result of the rounding, the totals of data presented in this Prospectus may vary slightly from the actual arithmetic totals of such data. Percentages in tables have been rounded and accordingly may not add up to 100 percent.

In addition, certain percentages presented in the tables in this Prospectus reflect calculations based upon the underlying information prior to rounding, and, accordingly, may not conform exactly to the percentages that would be derived if the relevant calculations were based upon the rounded numbers.

6. Currency presentation

Unless otherwise indicated, all references in this Prospectus to "Sterling", "Pounds Sterling", "GBP", "£", or "pence" are to the lawful currency of the United Kingdom. The Company prepares its financial statements in Pounds Sterling. All references to the "euro" or "€" are to the currency introduced at the start of the third stage of European economic and monetary union pursuant to the treaty establishing the European Community, as amended. All references to "US dollars" or "US\$" are to the lawful currency of the United States. All references to "Rupees" or "INR" are to the lawful currency of the Republic of India.

7. Information regarding forward-looking statements

This Prospectus includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "forecasts", "plans", "projects", "anticipates", "prepares", "expects", "intends", "may", "will", or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this Prospectus and include, but are not limited to, statements regarding the Group's intentions, beliefs or current expectations concerning, among other things, the Group's results of operations, financial position, prospects, growth, strategies and the industry in which it operates. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Forward-looking statements are not guarantees of future performance and the actual results of the Group's operations, financial position, and the development of the markets and the industries in which the Group operates, may differ materially from those described in, or suggested by, the forwardlooking statements contained in this Prospectus. In addition, even if the results of operations, financial position and the development of the markets and the industries in which the Group operates are consistent with the forward-looking statements contained in this Prospectus, those results or developments may not be indicative of results or developments in subsequent periods. A number of factors could cause results and developments to differ materially from those expressed or implied by the forward-looking statements including, without limitation, general economic and business conditions, industry trends, an inability of the Group to execute its business plan across three divisions (including the need to respond to strategic opportunities as they arise within its target markets), an inability to attract and maintain skilled employees, potential difficulties in translating innovative technology to large-scale manufactured products, the loss of customers, the loss of, or problems involving, third party suppliers and manufacturers, any failure or delay in the development of a hydrogen infrastructure that is adequate for the Group's needs in each of its divisions, an inability of the Group to obtain, maintain, defend or enforce intellectual property rights, competition, changes in regulation, currency fluctuations, political and economic uncertainty and other factors discussed in the sections of this Prospectus entitled "Summary", "Risk Factors", "Information on the Group" and "Operating and Financial Review".

Forward-looking statements may, and often do, differ materially from actual results. Any forward-looking statements in this Prospectus speak only as of their respective dates, reflect the Group's current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Group's operations, results of operations and growth strategy. Prospective investors should specifically consider the factors identified in this Prospectus which could cause actual results to differ before making an investment decision. Subject to the requirements of the Prospectus Rules, the Disclosure and Transparency Rules and the Listing Rules or applicable law, the Group explicitly disclaims any obligation or undertaking publicly to release the result of any revisions to any forwardlooking statements in this Prospectus that may occur due to any change in the Group's expectations or to reflect events or circumstances after the date of this Prospectus.

8. No incorporation of website information

The contents of the Company's websites and any other websites referred to in this Prospectus do not form part of this Prospectus.

9. US Considerations

Available information

The Company has agreed that, for so long as any of the Ordinary Shares are "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act, the Company will, during any period in which it is neither subject to Section 13 or 15(d) under the US Securities Exchange Act of 1934, as amended (the "Exchange Act"), nor exempt from reporting under the Exchange Act pursuant to Rule 12g3-2(b) thereunder, make available to any holder or beneficial owner of an Ordinary Share, or to any prospective purchaser of an Ordinary Share designated by such holder or beneficial owner, the information specified in, and meeting the requirements of, Rule 144A(d)(4) under the Securities Act upon the written request of such holder, beneficial owner or prospective purchaser.

Exchange rate considerations

The quoted price of the Ordinary Shares will be in Pounds Sterling. In addition, dividends, if any, that the Company pays in respect of its Ordinary Shares will be paid in Pounds Sterling. As a result, fluctuations in the value of Sterling can be expected to significantly affect the value of the Ordinary Shares and dividend payments upon conversion into other currencies, including the US dollar. See Part I "Information on the Group".

The following tables show, for the periods indicated, the exchange rate between the US dollar and the Pound Sterling.

The term "Noon Buying Rate" refers to the rate of exchange for Pound Sterling, expressed in US dollars per Pound Sterling, in the City of New York for cable transfers payable in foreign currencies as certified by the Federal Reserve Bank of New York for customs purposes. The Noon Buying Rate for the Pound Sterling on June 20, 2014 was \$1.7043 = £1.00. The following tables describe, for the periods and dates indicated, information concerning the Noon Buying Rate for the Pound Sterling. Amounts are expressed in US dollars per £1.00.

	Period	Average
Year (US dollar per Pound Sterling)	End	Rate(1)	High	Low
2009	1.6170	1.5670	1.6989	1.3753
2010	1.5612	1.5458	1.6362	1.4334
2011	1.5543	1.6041	1.6707	1.5343
2012	1.6153	1.5852	1.6279	1.5318
2013	1.6557	1.5649	1.6557	1.4867

(1) The average of the Noon Buying Rates for Pounds Sterling on the last day reported of each month during the relevant period.

	Period	Average
Month (US dollar per Pound Sterling)	End	Rate	High	Low
December 2013	1.6557	1.6382	1.6557	1.6264
January 2014	1.6439	1.6473	1.6637	1.6354
February 2014	1.6745	1.6566	1.6747	1.6305
March 2014	1.6662	1.6616	1.6740	1.6486
April 2014	1.6873	1.6748	1.6873	1.6575
May 2014	1.6755	1.6841	1.6975	1.6711
1 June to 20 June 2014	1.7013	1.6881	1.7039	1.6737

Enforceability of US judgments

The Company is a holding company organised as a public limited company incorporated under the laws of England and Wales with business operations conducted through various subsidiaries. None of the Directors or officers of the Company are citizens or residents of the United States. In addition, the majority of the Group's assets and all the assets of its Directors and officers are located outside the United States. As a result, it may not be possible for US investors to effect service of process within the United States upon the Company or its Directors and officers located outside the United States or to enforce in the US courts or outside the US judgments obtained against them in US courts or in courts outside the United States including judgments predicated upon the civil liability provisions of the US federal securities laws or the securities laws of any state or territory within the United States. There is also doubt as to the enforceability in England and Wales, whether by original actions or by seeking to enforce judgments of US courts, of claims based on the federal securities laws of the United States. In addition, punitive damages in actions brought in the United States or elsewhere may be unenforceable in England and Wales.

CONSEQUENCES OF A STANDARD LISTING

Application will be made for the Ordinary Shares to be admitted to listing on the Official List pursuant to Chapter 14 of the Listing Rules, which sets out the requirements for standard listings.

While the Company has a standard listing, it is not required to comply with the provisions of, among other things:

• Chapter 8 of the Listing Rules regarding the appointment of a listing sponsor to guide the Company in understanding and meeting its responsibilities under the Listing Rules in connection with certain matters. The Company has not and does not intend to appoint such a sponsor in connection with the Offer and Admission;
• Chapter 10 of the Listing Rules relating to significant transactions;
• Chapter 11 of the Listing Rules regarding related party transactions;
• Chapter 12 of the Listing Rules regarding purchases by the Company of its Ordinary Shares;
• Chapter 13 of the Listing Rules regarding the form and content of circulars to be sent to Shareholders; and
• the UK Corporate Governance Code.

The Company is seeking admission to the standard segment of the Official List because the Company does not believe it has a sufficient financial track record to satisfy the criteria for admission to the premium segment set out under LR 6.1.3BR of the Listing Rules. It is the current intention of the Directors that the Company will consider making an application for a listing on the premium segment of the Official List when it is able to meet the full criteria set out under LR 6.1.3BR. If the Company were to move to a premium listing in the future, the various Listing Rules highlighted above as rules with which the Company is not required to comply would become mandatory and the Company would comply with the continuing obligations contained within the Listing Rules (and the Disclosure and Transparency Rules) in the same manner as any other company with a premium listing. Furthermore, the Company would be required under the Listing Rules to explain in its annual report and accounts how it has applied the UK Corporate Governance Code throughout that financial year.

PART I

INFORMATION ON THE GROUP

1. Overview

The Company is an energy technology group which has developed advanced, power dense hydrogen fuel cell technologies which provide an efficient and clean source of power generation. The Group is working towards its aim of embedding and using its technologies in mass market products (either of the Group or of its partners) to meet regulatory/legislative requirements, solve existing problems economically and/or create a new category of products and new product opportunities. The Group collaborates with large, blue-chip OEMs to develop and commercialise its technologies.

The Group's intellectual property and expertise is based around its proprietary fuel cell technologies, which are the product of over 25 years of research and development. Its technology portfolio includes the wider components necessary in some cases to turn its fuel cell technologies into systems and products as well as the software capabilities to manage and optimise the performance and functionality of some of those systems and products. Its intellectual property portfolio extends beyond its core fuel cell technology to encompass patents, know-how and expertise in fuel cell related manufacture and the generation and supply of hydrogen fuel.

The Group has also developed an important capability in remote asset monitoring through its Asset Management and Business Intelligence Service ("AMBIS") unit, which creates opportunities for the Group to improve product development, achieve cost efficiencies and generate additional revenue streams.

Utilising its suite of technologies, the Group is able to deploy a range of business models in order to expand its participation in the value chain of the industries in which its technologies are, or will be, deployed. In particular, the Group intends to focus in the medium to longer term on licensing its technology and related intellectual property to its OEM partners and other third parties (including non-OEM manufacturers) to generate a combination of up-front licence fee payments and ongoing royalty income.

The Group's strategy is based on a philosophy of "design once, deploy many times" so that its flexible and scalable design architecture can, in time, be applied to a wide range of power applications across a wide range of industries, which may include the aerospace industry and medical sector. Currently, the Group focuses its technology on three target industrial sectors: Automotive ("Motive"); Consumer Electronics ("CE"); and Distributed Power & Generation ("DP&G"). Historically, substantially all of the Group's revenues have come from the Motive Division. The Group has only recently commenced the full-scale commercialisation of the CE and DP&G Divisions.

These industries are the Group's current focus because the Directors believe they offer mass market exposure to significant structural trends, namely reductions in emissions (Motive), the need for increased power, and energy storage, in consumer electronic devices (CE) and the growing need for decentralised (and preferably clean) power in emerging markets (DP&G).

Furthermore, and critically, the Group has been working in these areas because of significant efforts by major industrial groups to solve some of these problems to enable them to provide the product attributes demanded by governments, regulators and customers in their key markets.

The Group has collaborated with blue chip OEMs to develop automotive power solutions and to provide opportunities for those jointly developed systems to be embedded into OEM products at the concept, demonstration and trial stages. The Directors believe that these successful projects and relationships mean that the Group is well positioned to capitalise on the considerable opportunities for the commercialisation of fuel cell technology which are expected to arise from:

• the legislative and regulatory environment in developed economies (particularly within Europe and other G8 nations) which increasingly require the reduction of CO2 and particulate emissions, particularly in the automotive sector;

• the growth in both the number and functionality of consumer electronic devices, with the attendant need for increased power generating and energy storage capacities which incumbent technologies are struggling to meet, together with the need for truly mobile charging solutions (for convenience in developed economies and as a necessity in regions of the world with limited or no grid infrastructure); and
• increasing demand for power supply in emerging markets where the electricity grid infrastructure is either unreliable or insufficient to meet demand.

Accordingly, the Group is focusing on:

• Motive the development and licensing of the Group's technology, intellectual property and knowhow for use in automotive applications including as the principal motive power source (the vehicle 'engine'), as an indirect motive power source (the vehicle 'range extender', used to recharge the vehicle battery pack during driving) and as a secondary power source (for example, an auxiliary power unit);
• CE the development of compact energy solutions for mobile devices; and
• DP&G a power generation and management solution for off-grid, decentralised power applications initially focused on the provision of power to telecom towers in emerging markets that lack a reliable and/or comprehensive central power grid infrastructure.

Technology

An overview of the technical specifications and architecture of the Group's fuel cell technologies and a discussion of the key milestones achieved to date in the Group's programmes to develop those technologies so as to make them suitable for volume production and to embed them in mass market products is set out in paragraph 7 "Technology" of this Part I "Information on the Group".

Intellectual Property

The Group has over 350 patents granted (and over 450 patents pending) across more than 250 patent families. Whilst the Group's historic capability was centred around fuel cell power technologies, it now has an extensive intellectual property portfolio in relation to the additional components surrounding the fuel cell stack and the control technologies for the fuel cell stack (such as hardware and software that control and optimise the fuel cell stack including the ability of the Group's AMBIS unit to remotely monitor deployed systems). Further information on the Group's intellectual property portfolio and strategy is set out in paragraph 8 "Intellectual Property" of this Part I "Information on the Group".

Funding and Key Shareholders

To date, the Group has been funded primarily by equity (and debt convertible into equity) investment by predominantly institutional shareholders in the UK, Europe, the USA, South America and Asia amounting to approximately £160 million in aggregate. The Group secured its most recent institutional investment in March 2014 when it completed a private placement to Singapore's sovereign wealth fund, GIC, raising proceeds of approximately £37.8 million (before expenses) in consideration for 10 percent of the enlarged share capital of the Company on completion of the placing and issued warrants to GIC with the right to subscribe for up to (and including) 6,655,460 additional Ordinary Shares at an exercise price of 250 pence per Ordinary Share at any time on or prior to 30 June 2014. In addition, on 30 May 2014, SiGNa Chemistry Inc. agreed to subscribe for 100,000 Ordinary Shares at a price of 300 pence per Ordinary Share.

As at 3 July 2014 (the latest practicable date prior to publication of this Prospectus) and insofar as is known to the Company, the following persons have, directly or indirectly, interests in 3 percent or more of the issued share capital of the Company, and will have the following interests immediately following Admission:

	Interests at 3 July 2014		Interests immediately following Admission(1),(2),(3)
	Percentage			Percentage
		of Issued		of Issued
	Number of	Ordinary	Number of	Ordinary
	Ordinary	Share	Ordinary	Share
Name of Shareholder	Shares	Capital	Shares	Capital
Meditor European Master Fund Limited	27,408,010	17.33	27,408,010	14.58
Evolution Placements Corporation	25,390,096	16.05	25,390,096	13.50
GIC Private Limited	21,784,928	13.77	21,784,928	11.59
Yukos International UK B.V.	12,002,650	7.59	12,002,650	6.38
F&C Asset Management(4)	10,852,618	6.86	10,852,618	5.77
Royalton Percy LLC	6,900,000	4.36	6,900,000	3.67

(1) Taking into account the New Ordinary Shares

(2) Taking into account 12,526,400 Ordinary Shares to be issued pursuant to the conversion of the Convertible Loan Notes of principal value £30,190,831 outstanding as at the date of this Prospectus which, together with accrued interest (net of applicable withholding taxes), will convert into Ordinary Shares automatically on Admission

(3) Taking into account 1,147,487 Award Shares that vest on Admission under the 2013 Management Incentive Plan

(4) Held by various funds and accounts managed by F&C Asset Management

Headquarters and Staff

The Group is headquartered in the United Kingdom, with its main operating centre in Loughborough and an office in London. It also has offices in Japan, India and the USA.

The Group employs approximately 350 people (including more than 150 engineers). A breakdown of the Group's average number of employees by category of activity across the period covered by the historical financial information included in this Prospectus is set out in paragraph 4 of Part III "Operating and Financial Review" of this Prospectus.

A description of the payment by the Company of tax liabilities for awardholders under the 2013 Management Incentive Plan and the payment in cash to settle all Award Shares vesting in favour of John Maguire under the 2013 Management Incentive Plan is set out in paragraph 6 of Part III "Operating and Financial Review" of this Prospectus.

2. Key strengths

Leading Energy Technology Company Based on Disruptive Hydrogen Fuel Cell Product and Proprietary Manufacturing Process

The Group's intellectual property portfolio and expertise is based around its proprietary fuel cell technologies, which are the product of over 25 years of research and development. The Group's initial focus was to develop an energy system to meet the demanding cost, power and energy density requirements of the automotive industry. Using the know-how and expertise gained in the automotive sector, the Group is now pursuing a "design once, deploy many times" strategy to deploy its fuel cell technologies in other industry sectors where those cost, power and energy density requirements are less acute. The Group's design architecture is flexible and scalable and its proven, modular production capability allows the Group to apply its fuel cell technologies to a wide range of applications, typically in the 3W to 100kW power range with potential applications in the higher 100kW to 200kW power range. Furthermore, the Group's technologies have been designed for high-volume and low-cost manufacturing with the intention of providing a cost-effective route to market for the Group's OEM partners and other customers. The Directors believe that the combination of these attributes can be disruptive in a number of mass markets.

Executing in Multiple Large Markets

Unlike batteries, where range and run time are directly related to the physical size (and hence weight) of the battery, the size of a fuel cell power system does not increase with greater range and/or run time. To date, the Group's single fuel cell stack has been designed to be capable of providing up to 100kW and a fuel cell system can be scaled-up by using stacks in combination to produce higher power output. In addition, since the size and number of the additional components which accompany the Group's fuel cell stack are, by design, relatively small and few in number, the Group's technologies enable the manufacture of compact power systems that are capable of covering large power ranges. The Group is able to engage with OEM partners in a range of mass markets and interact directly with other customers. The Group's current focus is on the Motive, CE and DP&G industries which have wide product and service opportunities that are typically uncorrelated to each other and cover a range of geographies.

The Group has chosen to focus on these industries because they offer routes to mass markets, through partnership with established OEMs and other customers, manufacturers and suppliers who are subject to significant structural trends which may benefit from the Group's technology offering.

Competitive Advantage Based on Differentiated Technology Offering Underpinned by Proprietary IP With High Barriers to Entry

The Group has an extensive intellectual property portfolio and expertise developed over a period of more than 25 years which underpins its commercial offering and provides revenue generating opportunities. In the early stages of developing its fuel cell technologies, the Group made fundamental decisions on stack architecture and materials choices. The Directors believe that the decision to develop both air cooled ("AC") and evaporatively cooled ("EC") fuel cell stacks, and to use sheet stainless steel in its fuel cell construction, have proven to be particularly beneficial in developing a highly differentiated fuel cell architecture. Further detail on the Group's fuel cell stack architecture and materials are provided in paragraph 7 "Technology" of this Part I "Information on the Group". Furthermore, the Group protects its intellectual property portfolio and has over 350 patents granted (and over 450 patents pending) across more than 250 patent families. These factors together create high barriers to entry in terms of time, costs and expertise for potential competitors.

Go-to-market Strategy in Partnership With 'Blue Chip' Market Participants to Address Their Critical Market Needs

The Group works with OEMs and other partners to provide power solutions that address their critical market needs, including the requirement to reduce emissions in Motive, ever increasing demands on battery life and the need for very fast recharging in CE or the insufficient and unreliable electricity grids in many emerging markets. By partnering with a diverse range of OEMs and other partners, the Group benefits both financially (through revenue generated from its partners and/or from its partners applying their project development budgets to the Group's technologies) and technically (through a network effect where the Group gains access to the technical capabilities and expertise of its various partners) which helps the Group to better develop and enhance its own core technologies. Furthermore, in partnering with OEMs and other partners, the Group is not competing against incumbents, but rather is working with them collaboratively to produce solutions to their own product needs.

Experienced Management Team

The Group benefits from an experienced management team. A strong board of directors, with knowledge relevant to the industries and geographies in which the Group operates, is served by an executive group who have a strong and proven track record in the fields of technology development, power system design and implementation, consumer electronics, telecommunication, motive, distributed power, contract manufacturing and finance. The Board includes non-executive directors with significant experience in areas relevant to the Group.

A biography of each of the Directors is set out in paragraph 11 "Board of Directors" of this Part I "Information on the Group".

3. Strategy

The Group's strategy is based on a three-fold approach:

"Design Once, Deploy Many Times"

The key and continuing element of the Group's strategy is the "design once, deploy many times" philosophy. With a flexible and scalable design architecture and a proven, modular production capability, the Group's clean power technologies are suited to a wide range of applications in a typical 3W to 100kW power range. Designed for high-volume, low-cost manufacturing, the Group's technologies can be used in a broad range of applications across its three business divisions: Motive, CE and DP&G. The Directors believe that the Group's technologies could be deployed, in time, across a wide range of industries, including the aerospace industry and medical sector.

In addition to providing the benefit of technical and commercial leverage around a small core of platforms, the "design once, deploy many times" philosophy offers the possibility of converged supply chains and even shared manufacturing hubs for the core modules. This has the potential to reduce overall technology development costs when compared with an approach based on different engine core designs for each industry segment.

Mass Markets

The flexible and scalable design architecture of the Group's fuel cell technologies allows the Group to choose the sectors and markets on which it wishes to focus. The Motive, CE and DP&G markets are growing mass markets and are global in nature. The Group's Motive Division and CE Division have, from their inception, addressed international markets, whilst the initial focus for the DP&G Division is the Indian telecom sector where a significant number of telecom towers require dependable power against a backdrop of a limited and unreliable electricity grid infrastructure and expensive alternative solutions.

The Directors believe all three of the Group's target market segments are already large, have the potential to experience further significant growth and offer significant potential to generate revenue for the Group. In addition, none of the chosen opportunities is dependent on the performance of another segment, which results in a diversified business model.

Flexible Business Model

The Group operates under a flexible business model enabling it to adapt its business to the differing needs of potential customers in its target markets and to the macro-economic climate as a whole. Working closely with its OEM and other customers, manufacturing partners and suppliers in its three divisions, the Group can be responsive to their needs and flexible in the product specifications and services it provides. At the Group-wide level, the Group's business model is capable of encompassing the licensing of intellectual property, joint development and collaboration programmes with OEMs and manufacturers, and the provision of power generation and remote monitoring services. At a divisional level, or in a specific market, the balance of these activities that are being carried out at any particular time can vary. In CE and DP&G, the Group is targeting large, growing markets directly in order to commercialise its technologies with the aim of generating immediate revenues. In Motive, and in time over its other divisions, the Group intends to use the manufacturing capabilities and well-established routes to market of its OEM and other customers, manufacturing partners and suppliers to create efficient, low carbon solutions for mass markets by licensing the Group's technology and related intellectual property portfolio to those third-parties to generate both up-front licence fee payments and ongoing royalty income for the Group. The Group's technology is designed for high volume manufacture and so can offer its customers both reduced time-to-market and lower commercialisation scale-up risks than would be the case if they were to commence fuel cell design and development in-house.

AMBIS

The Group's strategy is reinforced by the potential to use the tools and skills within its AMBIS unit to monitor its fuel cells and other power generating assets (including diesel generators managed by the DP&G Division in India) remotely so as to identify efficiency and other important operational parameters. This capability can allow the Group to actively manage the efficiency of deployed DP&G assets in the field, offer engine health monitoring data for motive applications, and offer in-app fuel and energy related services to end users of CE products. The AMBIS unit capabilities are also able to support revenue generation opportunities across the Group. The AMBIS unit is located at the Group's main operating centre in Loughborough. It analyses, interprets and applies the information collected from the Group's deployed technologies.

4. History

The Company was incorporated on 16 April 2004 when it became the holding company of the Group and was subsequently re-registered as a public limited company on 28 May 2004. The Group was founded in 2001 when Intelligent Energy Limited was formed and shortly thereafter acquired Advanced Power Sources Limited (a spin out from Loughborough University) and its intellectual property. The Group's intellectual property portfolio and expertise is based on a core fuel cell competency created and developed in the late 1980s at Loughborough University, where the UK's first kW-level proton exchange membrane ("PEM") fuel cell stack was developed in 1995. In 2003, the Group entered into a partnership with Boeing to produce fuel cells for a prototype aircraft. These fuel cells were successfully integrated into a prototype aircraft in 2008, the first fuel cell powered manned aircraft of its kind. The Group entered into a partnership with Suzuki in 2007 to develop a prototype hydrogen fuel cell motorcycle and, in 2011, the Suzuki Burgman fuel cell scooter became the world's first fuel cell vehicle to earn Whole Vehicle Type Approval in the EU. Following on from the successes of the continuing Suzuki partnership, the Group commenced a cooperation with a European premium car maker ("EPCM") in 2012. In 2013, a prototype vehicle which incorporated the Group's fuel cells was successfully demonstrated to members of the EPCM's senior management, and the Group continues to support further development in 2014. The Group also unveiled its first consumer electronics product (the fuel cell powered UppTM mobile charger) in November 2013 at the Africom trade event, and product certification was completed in Spring 2014. An accompanying Upp™ app is available for the Apple iOS and Android operating system and the Upp™ device is certified under the "Made For iPhone" program operated by Apple, Inc. In early 2014, the Group's DP&G division entered into a framework agreement with Ascend Telecom Towers to provide efficient power for over 4,000 of Ascend's telecom towers across urban, sub-urban and rural areas of India, subject to completion of enabling contracts under the framework agreement.

5. Competition

The Group intends to continue to develop and deploy its fuel cell technologies across its three divisions. The Directors are not aware of any single competitor to the Group which offers fuel cell solutions across the power ranges of the Group's technologies in each of these three industrial sectors. Set out in paragraph 6 "Divisional Overview" of this Part I "Information on the Group" below, under the sub-paragraphs entitled "Competition", are brief descriptions of the principal known competitors to the Group within each of its three divisions.

6. Divisional overviews

6.1 Motive

Market Opportunity

According to the International Energy Agency, over 2 billion vehicles are expected to be on the roads in 2050, an increase from approximately 800 million vehicles today2 .

At the same time, air quality (including particulate emissions often associated with diesel engines) is becoming an increasingly important focus for governments and regulators. In September 2009, both the European Union ("EU") and G8 leaders agreed that CO2 emissions must be cut by 80 percent by 2050 if atmospheric CO2 is to stabilise at 450 parts per million and global warming is to stay within the EU target of a rise of no more than 2°C above the pre-industrial level. In order to achieve 80 per cent. decarbonisation overall by 2050, studies3 have estimated that a 95 percent decarbonisation (as compared with the CO2 emissions levels recorded in 2009) of the road transport sector may be required. As part of the growing international push for emissions legislation, the European Parliament in 2014 has enacted a regulation requiring automotive manufacturers reduce

² International Energy Agency, Energy Technology Perspectives (2012)

³ McKinsey, Global GH Abatement Cost Curve (2009); International Energy Agency, World Energy Outlook (2009)

CO2 emissions from new cars by almost 30 percent between 2015 and 2021. Governments and regulatory authorities are also taking steps to cut other types of emissions. For example, in February 2014, the European Commission began enforcement action against the UK for excessive nitrogen dioxide levels (produced mainly by diesel vehicles) in 16 zones across the UK, including London, the West Midlands and Glasgow. On 29 April 2014, the UK government's Office of Low Emission Vehicles published key elements of a proposed package of support for ultra low emission vehicles ("ULEVs") between 2015 and 2020. This follows the announcement in the UK government's 2013 spending review of £500 million being made available to support ULEVs in this period. On 1 May 2014, the California Energy Commission announced it will invest \$46.6 million to accelerate the development of publicly accessible hydrogen refuelling stations in California. The EU Parliament has also recently passed a regulation to provide new funding (expected to be up to €1.33 billion) for the Fuel Cell and Hydrogen Joint Undertaking project, a public private partnership established in May 2008 to support research, technological development and demonstration activities in fuel cell and hydrogen energy technologies in Europe.

According to a study co-authored by various companies (including the Group) and governmental and non-governmental organisations with interests in renewable power applications, and facilitated by McKinsey & Company (A portfolio of power-trains for Europe: a fact-based analysis. The role of Battery Electric Vehicles, Plug-in Hybrids and Fuel Cell Electric Vehicles, 2009), the combination of a rapidly expanding car parc, the increased scarcity of natural resources and the attempt to reduce global warming with emissions legislation has led to the rise of a "portfolio" approach to drivetrain technologies by automotive manufacturers. This portfolio of drivetrain technologies will include internal combustion engines ("ICE"), battery electric vehicles ("BEV"), hybrid electric vehicles ("HEV") and fuel cell electric vehicles ("FCEV") with the target of, over time, offering ultra-low and potentially zero emissions. ICEs will continue to play a significant role in the drivetrain portfolio, not only as a stand-alone offering with improved levels of efficiency, but also as a range extender in conjunction with a battery in a hybrid vehicle. In terms of non-ICE propulsion, the study concluded that:

• BEVs, FCEVs and HEVs have the potential to reduce CO2 emissions significantly and be made close to CO2 –free over time;
• owing to limits in battery capacity and driving range (currently typically 100-200 km for a medium-sized car) and a current recharging time of several hours, BEVs are suited to smaller cars and shorter trips, i.e. urban driving;
• with a driving range and performance comparable to ICEs, FCEVs are the lowest carbon solution for medium/larger cars and longer journeys. Longer journeys by medium/larger cars account for approximately 50 percent of all cars and 75 percent of CO2 emissions in the European car parc; and
• FCEVs offer the potential for acceptable driving ranges (approximately 600 km) and refuelling time (less than 5 minutes) making them a feasible low-carbon substitute for ICEs for medium/larger cars and therefore having the potential to achieve an 80 percent reduction in automotive CO2 emissions by 2030.

The modeling set out in the study shows that the growth of electric drivetrain technologies can be expected to accelerate from 2020.

To date, the adoption of fuel cell technology in the automotive sector has been limited by a number of factors including hydrogen storage capabilities, the limited ability of systems to cold start, system durability issues, the absence of suitable fuel cell/hydrogen standards and the lack of appropriate scale in the refuelling infrastructure. However, materially assisted by the efforts of automotive OEMs, these limitations are being addressed. The implementation of higher pressure storage technology has increased on-board hydrogen storage capacity, without sacrificing volume, resulting in driving ranges that are broadly equivalent to ICE powered vehicles. Cold start capability at temperatures down to or lower than –25°C has been confirmed. Improved understanding of the mechanisms affecting durability in automotive operating conditions has led to the development and implementation of effective counter-measures, increasing stack and system life through the improved use of materials and operating strategies. Common standards for hydrogen and FCEV equipment in automotive applications have also been agreed, reducing system complexity and costs. For example, standard connections, safety limits and performance requirements for hydrogen refuelling and electrical performance have been established under SAE International and International Organization for Standardization authorities.

Daimler, Ford, General Motors, Honda, Hyundai, Kia, Renault, Nissan and Toyota in 2009 together issued a memorandum of understanding stating their intention to commercialise FCEVs by 2015, with several hundred thousand FCEVs targeted to be rolled out worldwide thereafter assuming a sufficient hydrogen refuelling infrastructure is in place. Hyundai has already unveiled its FCEV sports utility vehicle. Both Honda and Toyota have announced that FCEVs will be unveiled in 2015 and Toyota has also publicly confirmed its 2015 focus on fuel cell powered vehicles. Daimler, Ford and Nissan have announced plans for joint development of an FCEV expected to be unveiled in 2017 or 2018. The McKinsey-facilitated study modelled the potential total cost of ownership of FCEVs and concluded that, by 2020, the cost of producing fuel cell systems is expected to decrease by 90 percent from 2010 cost levels due to economies of scale and incremental technological improvements, and that by 2025 the total cost of ownership of all four drivetrains (ICE, BEV, HEV and FCEV) are expected to converge. In light of these market growth expectations, technological developments and standardisation and total cost of ownership models, the focus for FCEV technology has now shifted from demonstration to commercial deployment.

Benefits of FCEV Over Conventional ICE Technology

The key benefit of the FCEV is the fact that, whilst offering a comparable operating range and a conventional refilling experience to ICEs, the FCEV has zero-CO2 and zero particulate tail pipe emissions. Additionally, the conversion of energy into propulsive power is typically around 30 percent (at peak efficiency) in an ICE (with lower efficiency seen in many typical driving conditions such as low speed urban driving), whereas a fuel cell system routinely exceeds 50 percent efficiency on a comparable basis (with improved efficiency in many typical driving conditions not requiring high engine performance).

Benefits of FCEV Over BEV

A fundamental difference between BEVs and FCEVs is that, whereas BEVs store a finite quantity of electrical energy (usually largely or fully generated off-board) which is then consumed as the vehicle is driven, in an FCEV the electrical energy needed to power the vehicle is generated on-board by the fuel cell system in line with demand and at the point of consumption. A BEV typically has limited operating range (of approximately 100 miles depending on temperature and operating conditions) and requires a lengthy recharging time (approximately 8 hours with standard recharging equipment). The operating range of a BEV can only be increased by increasing the size of the on-board battery packs, with the attendant increases in cost, size and weight. Accordingly the expense, size, weight and operating range of the batteries used to power a BEV are effectively a constraint on the commercial viability and the customer acceptability of these vehicles.

In contrast, the range of an FCEV is determined only by the capacity of the hydrogen fuel tank in the vehicle. Operating an FCEV is similar to operating an ICE powered vehicle. The hydrogen fuel tank in an FCEV is generally sized to carry sufficient fuel to allow for an operating range that is broadly equivalent to that of a current petrol or diesel fuelled car (approximately 600 km per refill). Moreover, the refilling process is conventional (with the hydrogen being dispensed from a pistol, pipe and 'pump' arrangement) and, depending on tank capacity, can be completed in less than 5 minutes.

Infrastructure

To ensure the successful commercialisation of FCEVs, an accompanying roll-out of hydrogen refuelling infrastructure is required. There are a number of public-private initiatives in different countries around the world to encourage the implementation of a hydrogen refuelling network. For example, a public-private partnership in Germany has lead to a joint venture evaluating options for investment in a hydrogen refuelling station network; the Danish government has announced an energy plan for 2020 that includes a range of initiatives for hydrogen infrastructure and FCEVs; the governments of Japan and South Korea have announced separate programmes for the construction of hydrogen refuelling stations by 2015 and 2020, respectively; and the State of California has a plan for the construction of 68 hydrogen refuelling stations by 2016 and on 1 May 2014 the California Energy Commission announced it will invest \$46.6 million to accelerate the development of publicly accessible hydrogen refuelling stations in the state. The Group is actively involved in a number of these programmes, including the H2 Mobility initiatives in the US and Germany, as they provide an opportunity for the Group to influence the pace of FCEV and infrastructure development, to raise the Group's profile alongside OEM and government participants and to facilitate commercial opportunities between the Group and project partners.

The Group's Strength in the Motive Sector

The Group has a number of strengths which the Directors believe make it well-positioned to take advantage of the opportunities in the Motive Sector:

• Power density leadership: The Group's technology uses patented, advanced, innovative design elements proven to operate at both stack and system level and exhibits class-leading levels of power density. This is a key attribute for automotive applications since high power densities are usually associated with compact, light-weight and low-cost system solutions. The Group's power density figures exceed published data for competitor technologies in both the AC class (see Figure 1 below) and EC class (see Figure 2 below):

Figure 1: AC Technology
Low power AC technology	Intelligent Energy	Illustrative competitor (1)
Power (kW)	2.7	2.5
Volume (l)	2.8	13.1
Weight (kg)	3.6	11.0
Volumetric power density (kW/l)	1.0	0.2
Gravimetric power density (kW/kg)	0.8	0.2

Source: Company information and public data (2014)

(1) A manufacturer of air cooled fuel cell products that has been chosen for illustrative comparison purposes due to its market position and the availability of comparative data.

Source: Company research and analysis based on publicly available data

• (1) A, B, C, D and E are competitors of the Group. "DoE Tech Targets" is a reference to targets set by the US Department of Energy. Honda's "FCEV Concept" and Toyota are not included given the lack of publicly available information on gravimetric power density. The Honda "FCEV Concept" and Toyota each have publicly stated volumetric power densities of 3.0kW/L.

• (2) "IEH Pressed Plate 2014" is a target rather than actual performance.

• Scalable technology: The Group's technology is suited to application across the automotive power range from 2kW for two- to three-wheeler vehicles up to multiples of 100kW on a modular basis for premium cars meaning the Group can offer fuel cell stacks with size, weight and cost tailored to meet the specific power requirements of different customer applications.

• Application diversity: The Group's technology can be readily configured for primary motive power, range extender or auxiliary power applications, with each type of system being tailored for the different operating conditions, duty cycles and lifetime requirements specific to the relevant application.
• Meeting OEM standards: The Group's technology is engineered, developed and applied in line with OEM standards and practices. The Group's technology design, development and application programmes are planned, structured, monitored, measured and managed in line with recognised automotive industry standards, and are executed in accordance with OEM expectations in terms of cost, quality and timing.
• Delivery track record: The Group has a track record of successful delivery of design, development, prototype supply, road certification and ready-to-scale manufacturing technology transfer for and with a number of automotive OEM clients. Examples include the execution of four significant engineering programmes for Suzuki, an FCEV prototype vehicle with a European premium car manufacturer, a collaborative project with PSA Peugeot Citroën (and other partners) that successfully designed and integrated a 10kW EC fuel cell range extender engine into a Peugeot Partner electric van, and a consortium project to produce zero emission FCEV London Taxis as part of the EU JTI initiative which operated during and following the London Olympic Games in 2012.
• Technology designed for cost-competitive high-volume production: The Group's technology is engineered specifically for cost-competitive high-volume production. The Group's partnership with Suzuki and shared ownership of the SMILE FC System Corporation ("SMILE") joint venture development and manufacturing business in Japan are focused on the supply of AC technology fuel cell engines at costs that are sufficiently low to support commercial deployment in low-powered two wheeler vehicles. Where high power density is needed, as it often is in the automotive industry, the Group's EC technology is particularly effective. This technology has been developed from a prototype configuration to the current stack design which is specifically engineered for automated high volume manufacture.

Offering by Type of Automotive OEM

The Motive Division's fuel cell technology is targeted at both:

• automotive OEMs that have no fuel cell technology; and
• automotive OEMs that are developing fuel cell technology.

For OEMs that do not have an in-house fuel cell technology, partnering with the Group means they can avoid both the lengthy product development cycle and the considerable cost of developing their own fuel cell technology.

For OEMs that are developing fuel cell capability in-house, the Motive Division targets its technology offering in three ways:

• Directly against first generation in-house technology initiatives: The Group can position its offering to demonstrate the competitive advantages of its fuel cell technology versus the OEM's existing technology. The Group's power density figures currently exceed published data for competitor technologies in their respective classes (see Figure 1 and Figure 2 above). As the industry moves towards the anticipated 2015 initial launch period for FCEV, and the planning for mass market launches to follow, there is an increasing focus on the need to move to architectures that can deliver commercially viable solutions and competitive cost structures.

• As a next generation fuel cell technology: Where the advantages provided by the Group's technology mean that it could be used as a second or next generation technology, the Group can position its offering to allow the OEM to take advantage of the performance and cost improvements as a next step in the development cycle of their FCEVs.
• As a complementary solution to the OEM's current product portfolio: A key differentiator of the Group's offering is its ability to cover almost the entire motive power range from its two fuel cell platforms. The Group can therefore position its offering to provide the OEM with a flexible and comprehensive set of fuel cell solutions where the OEM may not have a full portfolio. For example, where an OEM has a motive power solution but not a range extender option, the opportunity arises for the Group to offer a complementary solution.

Commercialisation Strategy

The Group's commercialisation strategy is to deploy high power density fuel cell technology and solutions across the automotive market through the various channels enabled by its flexible business model, namely: joint development and engineering services; commercial licensing; and joint venture manufacturing.

The Motive Division can use the Group's technology to focus on: (i) the principal motive power source (the vehicle 'engine'); (ii) an indirect motive power source (the vehicle 'range extender', used to recharge the vehicle battery pack during driving); and (iii) a secondary power source (for example, an auxiliary power unit). The strategy for the principal motive power source is to grant OEMs licences to embed and implement the Group's technologies into their vehicles as the primary source of power for the drivetrain. The strategy for the indirect motive power source range is to create a standard range extender product to allow the Motive Division to come to market and generate revenue earlier than may be otherwise likely for a series production principal motive power source application. The Group has a standard range extender in development and it intends to license this product, once available, to various OEMs to allow the OEMs to manufacture the product and incorporate it into their HEVs. Whilst the Motive Division is not actively focused on secondary power source applications, the Group's technologies for primary and indirect motive power applications can readily be deployed as a secondary power source if opportunities arise.

Flexible Business Model

The primary commercial objective of the Motive Division is to secure high value technology licensing deals that offer up-front as well as recurring royalty revenue in the medium to long term. To support this revenue generation model, the Group focuses on protecting and developing its underlying technology and intellectual property portfolio and intends to continue its policy of offering non-exclusive licences to its standard fuel cell technology. Currently, and often as a path to technology licensing deals, the Group enters into joint development agreements ("JDAs"), as well as engineering services and consultancy agreements, which build relationships, embed technology, deliver revenue and enhance the Motive Division's capabilities and offering in the industry. Joint venture arrangements, such as those with Suzuki (discussed further below in the sub-paragraph entitled "Selected Customers and Partnerships"), offer an effective commercialisation route, particularly as OEM engagements are usually highly collaborative and represent the Motive Division's key source of revenue in the short to medium term.

The automotive sector as a whole is expected to start production of FCEVs from 2015 but mass market penetration is not expected to occur until 2020, by which time the Directors believe that economies of scale and incremental technological improvements should have reduced the cost of fuel cell systems sufficiently to make them competitive with alternative drivetrain technologies. However, the Group has the ability to generate revenues ahead of mass market penetration of FCEVs through JDAs and the licensing of its technology to OEMs in exchange for the payment of up-front fees and through engineering programmes and consultancy. In the past three financial years, the Group has recorded aggregate revenue of £76.6 million from these activities.

The Directors believe there is potential for licensing revenues in the medium term and volumedriven recurring royalty revenues in the long term. Typically, the Group offers a joint development road map to its customers with short, medium and long term revenue opportunities for the Group as programmes of development and engineering support act as a precursor to commercial licensing agreements and appropriate training from the Group on its technologies. In addition, automotive development cycles mean that first, next and future generation technologies will require OEMs to engage in technology development programmes continually during market establishment and up to and beyond FCEVs achieving mass market status offering the Group multiple opportunities to engage with customers in their technology development.

Historically, the typical duration of a JDA has varied from 2 to 5 years and the Directors expect the tenure of future JDAs to remain within this range. The Group targets gaining one new JDA every year in the short- to medium-term, so that revenue from JDAs are expected to remain within a range of £5-15 million per annum. The Directors are targeting an average EBITDA margin of up to 10 percent of revenue under JDAs including Motive management team costs.

Successful JDA co-operations can lead to licence revenues and the Directors are targeting licensing agreements with equivalent or higher values than that previously entered into with Suzuki.

Volume-based royalty revenues, which can be generated as regular payments or as one up-front payment equivalent to the estimated net present value of the potential regular payments, represent further potential for additional revenues in the long term.

The Directors currently expect that, in the short- to medium-term, minimal capital expenditure will be required within the Motive Division in order for it to pursue these operational targets, excluding capital expenditure undertaken to support core development activities that might have a motive application.

Selected Customers and Partnerships

The Group enters into strategic collaborative partnerships and projects in order to identify and develop new opportunities for the application of the Group's technologies throughout the automotive industry.

The Group started its collaboration with Suzuki in 2007 with a first JDA which followed the Group's unveiling of the environmentally neutral vehicle prototype (known as the ENV), the world's first fuel cell purpose built motorcycle. At the 2007 Tokyo Motor Show, the Suzuki 'Crosscage' fuel cell motorbike concept was displayed, representing the first public demonstration of the results of the Intelligent Energy-Suzuki partnership. This was followed at the 2009 Tokyo Motor Show by the unveiling of the first Suzuki Burgman prototype fuel cell scooter which, in 2011, became the first fuel cell vehicle of any kind to achieve European Union Whole Vehicle Type Approval.

In February 2012, the Group and Suzuki announced the creation of the SMILE 50:50 joint venture company to develop and manufacture AC fuel cell systems. At the same time the Group entered into a non-exclusive licence agreement that grants Suzuki access to certain of the Group's fuel cell technology for its planned next generation of environmentally friendly fuel cell vehicles. Suzuki paid a licence and technology transfer fee of £45 million to the Group, and has also agreed to pay future royalties based on the cumulative power of the engines produced by Suzuki that use the Group's technology. This is in addition to previous and on-going development costs being funded by Suzuki. A summary of the SMILE joint venture agreement is set out in paragraph 11.3 of Part VIII "Additional Information" of this Prospectus.

Following the formation of SMILE, a ready-to-scale pilot production line was commissioned in February 2013 at SMILE premises in Japan. Further technology transfer and formal programmes of joint engineering and development activity are being confirmed and are expected to continue beyond 2014 to assist Suzuki and SMILE towards full production of fuel cell systems.

Since 2012, the Group has been working under contract and in partnership with a European premium car maker ("EPCM") that is a volume manufacturer of premium vehicles. The Group entered into a development agreement (the "Development Agreement") on 22 March 2012 with the EPCM. The Development Agreement governs the performance of certain sequential phases of work to be carried out by the Motive Division in respect of the development of a high powered EC fuel cell system which uses the Group's proprietary intellectual property. At the end of 2012 and as part of one of those phases of work, the Group won a competitive benchmarking process and was selected as the EPCM's fuel cell system partner to support the development of a state-of-the-art fuel cell demonstrator vehicle. The total aggregate consideration payable to the Group in respect of development services set out in the Development Agreement is £22.6 million (payable in instalments and subject to completion of the various phases of work.)

Under the Development Agreement, the Group granted the EPCM the right to enter into an option to take a licence of certain intellectual property rights of the Group subject to agreement between the parties. On 23 June 2014, the Group entered into an Option and Licence Agreement ("OLA") with the EPCM setting out in full the terms under which the EPCM can exercise an option to enter into a nonexclusive licence granting it the right to use the Group's selected patents, selected intellectual property and other selected trade secrets and copyright material (all relating to that in existence at a specified technology cut off point) across a range of high power fuel cell applications. The option is exercisable at the sole discretion of the EPCM at which time a licence fee would become payable by the EPCM. The licence fee must be satisfied by either the payment of (i) a significant one-off amount (with no royalty payments) or (ii) a reduced one-off amount together with ongoing royalty payments related to the volume of licensed products sold by the EPCM. The base licence is restricted to a defined field of use which the EPCM can extend upon payment of an additional extension fee to be agreed between the parties on the basis of parameters set out in the OLA. The option is exercisable until 31 December 2017 and can be extended by 12 months at the EPCM's election and upon payment of an additional fee. In the event that the EPCM were to exercise the option and extend the field of use to the greatest extent possible, then the maximum licence fee payable to the Group by the EPCM in accordance with the parameters set out in the OLA would be either a one off amount of £330 million or £170 million plus on-going royalties. The licence would be non-transferable except that the EPCM would be permitted to sub-licence to its defined development co-operation partners upon payment to the Group of additional licence extension fees. These fees are to be agreed between the parties on the basis of parameters set out in the OLA but, in all cases, the licence extension fee payable in respect of each additional partner would be equal to or greater than the equivalent amount payable by the EPCM.

In June 2014, the Group agreed to a framework JDA with a substantial Japanese car maker (in addition to and separate from Suzuki) to provide an EC fuel cell solution, including technology support, for a demonstration vehicle in 2015 as a first step in a development programme to produce and commercialise fuel cell vehicles in 2020. Consistent with its strategy, the Motive Division has provided a development road map to the Japanese car maker and the framework JDA will allow multiple development work phases to be implemented. The Directors believe that this new engagement has the potential to follow the JDA to licensing model that the Group implemented successfully with Suzuki.

The Group has also entered into other partnerships. Other partners include Ricardo, an automotive consultancy with a highly regarded reputation in the automotive industry and with whom the Group identifies opportunities to exploit combined expertise by collaborating with a view to delivering development projects for automotive OEMs, and Dyson Technology, with whom the Group collaborated to utilise Dyson's innovative motor technologies to help the Group achieve improved power density for the Group's technologies.

The Group participated in the Hydrogen Transport in European Cities demonstration project ("HyTEC") funded by the Fuel Cell and Hydrogen Joint Undertaking ("FCH JU"). As part of HyTEC the Group supplied and operated FCEV London taxis which commenced operation during the 2012 London Olympic Games.

The Group has previously taken advantage of the collaborative development and funding opportunities made available through the FCH JU to access development funding of approximately £2.5 million in aggregate. A second phase of the FCH JU has recently been agreed with an estimated enhanced budget of €665 million from 2014 to 2020 and the Group is considering whether to enter into strategic collaborations which may be eligible to apply for some of this funding. The Group has also previously taken advantage of other public funding programmes for its activities in the Motive Division, such as that offered by the UK's Technology Strategy Board, and has received over £2 million of such funding in aggregate since 2010.

Competition

The Motive Division faces competition across three categories:

• further improvements in emissions performance from today's incumbent ICE technology, albeit the Directors believe that this is likely to achieve only a 30 percent improvement in energy efficiency before significant development costs restrict the likelihood of further technological improvement;
• fuel cell systems developed by automotive OEMs and by independent fuel cell system providers; and
• other alternative engine and drivetrain technologies.

The existence of 'in-house' technologies developed by a number of global automotive OEMs and the increasing industry collaboration driving FCEV manufacturing and design efficiencies mean that OEMs such as Toyota, Hyundai, Honda, General Motors and Mercedes Benz are all competitors to the Group within the Motive Division.

Notable competitors in the independent (non-OEM) sector are listed below:

Competitor	Summary of business activities
Ballard Power Systems	A Canadian fuel cell designer and manufacturer with a focus on heavy vehicle (bus and truck) applications which provides engineering services, licenses intellectual property and sells fuel cell stacks and systems.
PlugPower	A US commercial integrator of fuel cell systems with a particular focus on the materials handling sector.
Hydrogenics	A Canadian manufacturer of electrolysers and fuel cell systems with a focus on hydrogen generation for industrial processes and freestanding electrical power plant. It has some automotive activities that are centred on urban transit buses, utility fleets and electric lift trucks.
Acal Energy	A UK fuel cell technology company currently at the research stage.
Horizon	A Singaporean developer of low power fuel cell systems (typically up to 5kW) with a publicly stated ambition to enter the car and commercial vehicle markets.

6.2 Consumer electronics ("CE")

Market Opportunity

The rise of mobile telephony in place of fixed line usage and increased customer preference for hand-held electronic devices has led to an explosive growth in mobile phone sales, accompanied by a continued move from desktop computing and laptops to smartphones, tablets and other mobile devices. The expanding capabilities of smartphones and other mobile devices continue to drive increasing processing requirements, data volumes, screen sizes and functionality and, as a direct consequence, energy consumption. Current mobile devices using traditional batteries (such as lithium-ion technology) are struggling to keep pace with user requirements. In particular, the average battery life of certain smartphones is as little as 8 hours when used for browsing. Consequently, the lack of power tends to limit the current performance and functionality of mobile devices. This is occurring at the same time as consumer usage and functionality expectations are increasing.

In developed markets the trends toward a greater number of "smart" and increasingly "connected" mobile devices which, by their very nature, have more demanding power requirements than their predecessor devices, and the subsequent impact on battery life and performance, mean that "downtime" is likely to be a more common consumer experience. This problem is likely to be exacerbated by the growth of cloud computing and the desire of consumers to frequently download and process information on mobile devices. Consequently, the need to re-charge mobile devices regularly by plugging them into the power grid could significantly compromise their functionality and consumer satisfaction.

In emerging markets the problems of battery longevity are compounded where power grids are unreliable and limited in coverage or, in some cases, non-existent. These problems are further increased by both the impact of major global brands seeking to increase the online services they offer and an increasingly mobile-based economy. This is seen, for example, in the proliferation of mobile money transfer and payment services (particularly in Africa and Asia where smartphone sales are expected to increase rapidly) where traditional branch focused banking systems are unable to keep pace with consumer needs and aspirations.

The New USB Standard

A growing number of devices are now powered (or are capable of being powered) through USB cables and the Directors believe that this market trend will continue. Historically, USB was designed primarily for information exchange between devices, but in 2012 the USB-PD specification was released and it is expected that during 2014 USB-PD specified devices and cables will become more widely available. The USB-PD standard allows the delivery of power through a USB cable of up to 100W, facilitating the charging of a much broader range of devices than previously. The increased power and information exchange capability of the new USB-PD makes it well suited for connecting more devices to one another, capitalising on the trend for USB charging as well as the trend for devices to be able to communicate intelligently and automatically with each other.

Consumer electronic devices are powered by direct current ("DC"). Fuel cell technology delivers DC as standard, whereas the grid requires an AC:DC converter in order to be compatible with USB charging. Fuel cells, therefore, are well placed to benefit from an increased use of USB charging. Importantly, the move to USB charging allows the development of the Group's "smart power" offering, whereby additional services to the user and additional services to the Group are facilitated by data exchange between the charger and the device, a facility not available to devices plugged into a socket.

Increasing Focus on Environmental Impact

The consumer electronics industry continues to explore ways to reduce the environmental impact of its products and services. Reducing the CO2 emissions linked to the regular charging of handheld devices through power grids supplied by fossil fuels is a particular focus, along with the desire for recyclability, ethical supply chains and 'greener' corporate operations. The Directors believe that this should result in a heightened search for technologies that are less reliant on power grids and that fuel cells are well placed to meet the demands of that search.

Fuel Cell Solution and the Group's Product Offering

The limitations of battery technologies are caused by the intrinsic link between power conversion and energy storage. Within an individual battery, power delivery capability is directly related to the physical size (and hence weight) of the battery. This means that physical measures, such as run time, are limited by the size (volumetric) and weight (gravimetric) constraints of the end product.

A fuel cell behaves more like an engine than a battery, and as such its run time is not dependent on its size, as more fuel can be added when needed rather than having to be stored in the device at the outset. The size of a fuel cell of a given power level does not, therefore, increase with longer run times. Hydrogen fuel sources (which provide the fuel cell with fuel) offer high stored energy densities. For a discussion of the differences between chemical and metal hydride technologies and the Group's plans to utilise them, see paragraph 7 "Technology" of this Part I "Information on the Group". The CE Division, through its compact and power dense fuel cell technology coupled with the ability to refuel instantly through cartridge replacement, therefore has a competitive advantage in the product category of portable power devices. The Group's Upp™ fuel cell charger device (discussed below) and future iterations of the device, and, in time, an embedded fuel cell solution, are expected to:

• provide power solutions for future power-hungry devices;

• provide extended run time for current mobile devices;

• allow consumers in emerging markets with little or no reliable grid infrastructure to make greater use of mobile technology and applications;

• provide truly mobile, grid-independent power;
• reduce the lifetime carbon footprint of mobile devices by using cleaner fuels; and
• through the UppTM App allow valuable data to be collected on user behaviour to improve future iterations of the product and allow the Group to understand consumer recharging behaviour.

The CE Division's product offering is based on the development of a lower power, distributed energy source capable of being deployed across a range of markets and opportunities. The Group plans to operate a two phase product development plan in its CE Division, where, at each phase, the need to plug into the power grid is removed:

• Phase 1: the development and sales distribution of the Upp™ portable fuel cell charger offering USB charging for a wide range of USB compatible mobile devices; and
• Phase 2: the embedding of fuel cell technology directly into consumer electronics devices.

The CE Division intends to initially focus on users of smartphones, tablets and other mobile devices who:

• are seeking to minimise downtime; and/or
• are located in countries that have an unreliable or unavailable power grid.

The Upp™ device

To this end, the Company unveiled its Upp™ fuel cell charger and accompanying Upp™ fuel cartridge in November 2013 at AfricaCom in Cape Town. The Upp™ device offers USB charging for a wide range of USB compatible mobile devices. Depending on usage and charging variables, a single Upp™ fuel cartridge offers approximately one week's worth of energy to a smartphone4 and can keep a feature phone powered for a longer period. Upp™ offers energy on demand independent from the power grid and, through its interface with the associated Upp™ App (discussed below), acts as an intelligent charger providing the user with data such as charging and fuel status. The Upp™ device receives its hydrogen supply from a solid state, metal hydride fuel cartridge connected to the device through a magnetic interface.

The design of the Upp™ device and separate fuel cartridge is based on a "razor/razor blade" model where revenue is generated from both the sale of the device itself and from repeated refilling of the cartridge (and, when available, sales of disposable cartridges). Since a fuel cartridge can typically provide approximately one week's worth of energy for a smartphone, multiple fuel cartridge refills will be required for the ongoing use of the Upp™ device. The CE Division is continuing to develop various different fuel cartridges based on a range of fuel technologies and cartridge capacities to address different consumer segments. The Upp™ device is based on a flexible architecture that contains the Group's proprietary fuel cell stack and system including logic boards and software controls, so that the correct power is delivered through a USB port to the connected device.

The Upp™ device has been certified to carry the European Union's CE mark and the Canadian CSA mark and meets the International Electrotechnical Commission standards applicable to the carriage and usage of devices on aircraft.

The Upp™ device offers:

• Grid independence: The Upp™ device provides grid independent USB charging meeting the need for mobility and convenience in developed markets and the need for power independent of poorly performing (or non-existent) grid networks in emerging markets.

⁴ Based on one charge per day for an Apple iPhone 5c from 20 percent to 80 percent charge to optimise battery life.

• Compatibility: The Upp™ device is compatible with most hand-held electronic devices with USB charging capabilities.
• Rapid Charging: The Upp™ device can deliver power to a device as fast as a wall socket.
• Extended mobile usage: A single fuel cartridge can, depending on usage and charging variables, provide approximately one week's worth of energy for a smartphone and can keep a feature phone powered for a longer period.
• Battery Protection Technology: The Upp™ device incorporates an intelligent automatic shut-off feature and its 'eco mode' conserves energy and protects the battery life of the device it is charging.
• Clean Power: Fuel cells produce no greenhouse gas emissions.
• Intelligent Power: The Upp™ device in combination with the Upp™ App will be able to monitor the electronic devices it is charging as well as its own hydrogen fuel supply whilst providing functionality such as fuel prediction capability and device energy usage statistics.

The Upp™ device is supported by the Upp™ App available from the Apple App Store for Apple iOS and Google Play for the Android operating system. The App enhances functionality by offering charging data and fuel status; it also has more advanced options such as the ability to locate nearby sources of fuel cartridges. During 2014 the Group intends to develop the App further to include a manual and an automatic option to order fuel. The App also allows the generation of feedback on deployed products and greater understanding of the device's power requirements. The CE Division intends to use the App and the data it generates as a platform for future monetisation of the technology, for example by enabling direct sales of replacement cartridges, when available, to customers. The Directors believe that revenue opportunities for the Group and its partners can also arise because of the ability of fuel sales to increase footfall in retail stores of the Group's partners.

Further Opportunities

The technology platform underlying the Upp™ device is scalable and with limited further development can be used in low power level distributed power applications, which are becoming increasingly common and which will not be restricted to the consumer electronics industry sector. By way of example, the roll-out of wi-fi hotspots, "metrocells" and "picocells" (compact and discrete mobile phone base stations) on a large scale will, in both developed and particularly developing markets, require small, scalable sources of power.

Business Model

The CE Division intends to generate revenue from the Upp™ device by targeting (i) smartphone business users in emerging markets where power grids do not support increased demand for mobile devices; (ii) sales of the Upp™ device through distributors, including telecom companies; and (iii) retailers across multiple markets (initially through a small number of retail launch partners in developed markets). The Group could also potentially generate revenue from royalties on manufacturing licences, recharge/fuel costs and usage data.

The CE Division intends to use various distribution channels, including third-party retailers, telecom companies, direct sales (including targeting large direct corporate accounts) and businessto-business distribution whilst the manufacturing of the Upp™ device and fuel cartridges is to be outsourced to specialist consumer electronics manufacturers.

The Group anticipates that the Upp™ App will prove particularly beneficial not only to the CE Division but also its third-party partners in sales, distribution and manufacturing. The data collected by the App has the potential to be used to assist in the delivery of replacement fuel cartridges, to assist telecom companies in interacting with their customers, and to identify potential product design improvements across the consumer electronics industry.

The ability to supply consumers with replacement fuel cartridges is a critical aspect of widespread adoption of the Upp™ device. The availability of fuel cartridges will differ by location during the initial roll-out phase. For example, in countries where the Group develops partnerships with incountry retailers, customers are expected to be able to purchase replacement fuel cartridges at the stores of those retailers. However, as subsequent versions of the Upp™ device are released (up to and including any embedded device) the App platform can be used to provide for automatic and predictive ordering of replacement cartridges. For example, in markets where the UppTM device is marketed primarily through telcom companies, it is intended that the App platform will enable consumers to be billed for replacement cartridges either as a bolt on to current mobile phone contracts or by in-App payment options.

Work towards an embedded fuel cell product

Whilst further product development of Upp™ devices is expected to be mainly through enhancing and improving current technology, the Group is also investing in the development and testing of new technology to produce a fuel cell power generation product capable of being embedded directly into consumer electronics devices produced by, amongst others, the world's largest consumer electronics OEMs.

Customers and Partnerships

The CE Division's anchor relationship for its embedded fuel cell project is with a leading international CE device OEM (the "IEC"). This relationship began in 2009 with a JDA and, on 19 December 2013, the Group and the IEC jointly acquired intellectual property of relevance to the current and future objectives of the CE Division under the terms of a patent purchase agreement ("PPA") with a battery manufacturer ("BM"). Pursuant to the PPA, Intelligent Energy Limited, Intelligent Energy, Inc. (each an indirect, wholly-owned subsidiary of the Company) and the IEC (as the "Buyers") acquired a significant patent portfolio and related intellectual property and prototypes relating to fuel cells and fuel cell systems, power systems and components, fuel cartridges and fuels for fuel cell systems from the BM. The IEC acquired a small proportion of the patent portfolio and the Group acquired the remainder together with its related intellectual property and prototypes. Each of the Buyers has secured rights to the entire portfolio pursuant to suitable cross-licensing arrangements.

The CE Division has been working with a number of telecom companies in Africa to demonstrate and trial the benefits of the Upp™ device. In particular, the Group has been engaged with Etisalat Nigeria since mid 2013 to trial the Upp™ device in the field. The trial supported the Company's hypothesis that increased use of voice and data minutes for both heavy and light phone users from increased power availability would result in an uplift in average revenue per customer for the network provider. Overall the Etisalat trial, together with other external and internal trials, have so far provided useful and positive feedback on the Upp™ system, for example that it is considered easy to use.

After unveiling the Upp™ device in Africa in November 2013, the CE Division began actively to pursue a range of opportunities which included a partnership with a US retailer to launch Upp™ in the US which was announced in January 2014. As part of this partnership, the Upp™ device was unveiled in the US at the Consumer Electronics Show ("CES") in Las Vegas in January 2014. Further leads were generated following CES and the attendance by representatives of the CE Division at the Mobile World Congress in Barcelona in February 2014.

The Company remains in active sales discussions with a number of telecom companies and consumer goods companies. It is also pursuing further trial opportunities which it hopes, over time, to convert to sales orders.

Key Milestones and Targeted Operational Roadmap for the CE Division

During 2014, the Group plans to expand its relationships with telecom operators by entering new geographic markets, initiating new relationships with retailers and launching business-to-business distribution initiatives. The Directors expect the initial roll-out of first generation UppTM devices in the financial year ending 30 September 2014 to result in 50,000 – 100,000 unit sales, with initial target revenue for the Group of approximately 55 – 60 percent of the retail price per unit sold. The Group expects the revenue per device to trend down year-over-year in the medium-term as is common in the consumer electronics industry.

The Group aims to expand sales of the Upp™ device into China in 2015. Further international roll-out will be dependent on the commencement of production of disposable fuel cartridges, which are expected to also facilitate the "in-App" direct fuel purchase programmes. All cartridge production is expected to be located in China by the end of the Group's 2014 financial year and disposable cartridge production is expected to be automated in 2015.

The immediate product development roadmap for the Upp™ device follows two complementary strands. The first is to reduce the size and cost of the existing product so that it can be offered at a price level acceptable for the mass market (expected by late 2014). The second is to increase the power available through the USB so that Upp™ devices can offer multiple charges to devices such as tablets and low power netbooks (expected in 2015). The Group expects peak annual sales volumes of 3-4 million units of Upp™ devices in the medium-term.

The Group's roll-out of the Upp™ device is based on a product development programme which anticipates a first generation refillable metal hydride cartridge being followed by a second generation disposable chemical hydride cartridge (expected to be available by the end of 2014). To ensure sufficient availability of fuel cartridges, the Directors believe that metal hydride cartridges will need to be manufactured at a unit ratio of 3 cartridges for each Upp™ fuel cell charger, with an expected initial target price per refill of between £2.00 and £2.50. The Directors further believe that this ratio will trend down to a ratio of 2:1 in the medium term with prices per refill expected to trend down over time.

The Group intends to continue to develop next generation fuel cartridges and, during the course of 2016, the Group expects to work on the development of even more energy dense fuel cartridges. Further details of the fuel cartridges that are intended to be used by the CE Division (including metal hydride and chemical hydride cartridges) are set out in paragraph 7 "Technology" of this Part I "Information on the Group".

In the medium term, the Directors expect disposable chemical hydride cartridges to be launched with an eventual peak target volume of 55 – 60 million fuel cartridge units per annum. The Directors expect the chemical hydride fuel cartridges to be initially priced at approximately £4.50 to £5.00 per unit, trending down over time as is common in the consumer electronics industry.

The Group intends that the Upp™ devices and fuel cartridges be manufactured by contract manufacturers. The Group currently has a contract manufacturing agreement in place with the large international contract manufacturer, Primax. Further details of this agreement are set out at paragraph 11.7 of Part VIII "Additional Information" of this Prospectus.

The Directors expect the Group to demonstrate a prototype embedded fuel cell in 2015 although full deployment of such a product will be dependent on a suitable fuel being available. The successful development of an embedded fuel cell should offer the Group significant opportunity to generate up-front licence fees as well as on-going royalty payments. The Directors do not anticipate that the manufacture of an embedded fuel cell will be carried out by the Group but, rather, that manufacturing would instead be carried out by the Group's OEM partners under intellectual property licensing arrangements.

Competition

A mobile fuel cell power generation device is a new product category and there are few market participants who are able to offer these products. The established industry alternatives which compete with the Group's offering include incumbent battery technology and battery based "extender" products. Each of these alternatives requires access to the grid for recharging. The table below summarises the key competitors to the CE Division within the mobile fuel cell charging category.

Competitor	Summary of business activities
Lilliputian Systems	A US fuel cell developer for consumer electronics applications.
(trading as Nectar)	Its fuel cell system will run on butane, with replaceable cartridges.
	Not yet commercially available.

Competitor	Summary of business activities
Horizon	A Singaporean fuel cell developer. Its fuel cells are fuelled by hydrogen using metal hydride fuel canisters. Horizon also produces low power fuel cells for toys and educational kits.
myFC	A Swedish fuel cell technology developer. Its product is a battery/fuel cell hybrid system, with hydrogen provided by a chemical hydride which is reacted with water, that provides 2.5W of power and is fuelled with replaceable reactors.
Neah Power Systems	A US fuel cell developer with product called Buzzcell in development. A limited number of trial devices have been shipped as of March 2014. Not yet commercially available.
Aquafairy	A Japanese fuel cell developer that has demonstrated two pre-commercial products at industry trade-shows. Not yet commercially available.

6.3 Distributed power and generation (DP&G)

Industry Overview and Market Opportunity

Economic growth is understood to be correlated to per capita energy consumption. Therefore, as emerging market economies strive to achieve developed economy levels of gross domestic product, per capita energy consumption is expected to increase. However, according to a United Nations Foundation study, over 1.2 billion people (predominantly in India, Africa and China) do not have access to grid electricity and over 2.6 billion are still cooking on solid fuels.

If the target set in 2010 by the United Nations Secretary General's Advisory Group on Energy and Climate Change for universal access to domestic electricity by 2030 is to be realised, it is estimated that over 50 percent of newly installed capacity will have to be provided by off-grid, decentralised technologies and it is estimated by the International Energy Agency that approximately US\$49 billion per annum of investment is required. If the requirement for off-grid power generation was met by diesel generated power (a typical off-grid solution in many emerging markets), this would typically cost up to 200 US cents per KWh compared to bulk rate grid electricity at a typical cost of 10 – 15 US cents per KWh (with grid electricity at such rates currently available to only one billion of the world's population).

Initial Target Market

The market for decentralised power is very large and exists across both developing and developed economies with strained and/or aged infrastructure. Initially, the DP&G Division is focused on one geography and sector: the cellular telecom tower market in India. There are also other decentralised power generation applications for the Group's fuel cell solutions across a range of geographies which the Group may be able to exploit in the near to medium term (one such application is the supply of electricity to operators of commercial scale electro-based water purification technology in India in relation to which the Group has recently entered into a collaboration with Hydro Industries).

The Cellular Operators Association of India expects the Indian mobile phone market to continue to grow rapidly, with mobile phone subscribers forecast to reach 1.24 billion in 2015. Subscribers are currently served by over 400,000 telecom towers and this is expected to grow to nearly 1 million by 2017. This order of magnitude can be compared to 54,500 telecom towers covering the whole of the United Kingdom. Given the unreliability of the electricity supply in India, at approximately 70 percent of Indian telecom tower sites the transmission equipment on site is without grid power for more than 8 hours per day. When power interruptions are short (i.e. less than one hour) and infrequent, back up power is provided by batteries that store electrical energy when power is available from the grid and provide power to the critical equipment when the grid electricity supply fails. Where power interruptions are of a longer duration and are more frequent, diesel generators are typically used in conjunction with batteries. If the telecom transmission equipment at a tower site is not available to transmit, then the lack of network coverage adversely impacts the revenue generated by the mobile network operator.

Using diesel generators to meet the power supply shortfall in the telecom industry generates demand for 2.6 billion litres of diesel per annum in India. The supply of diesel was until recently subsidised by the Indian government through price controls applied to the bulk purchase of diesel from state oil companies. However, these price controls are being phased out over approximately 24 months beginning in January 2013 so that, by early 2015, the bulk purchase price charged by state owned suppliers is expected to converge with the wider market price. Given that approximately 60 percent of telecom tower infrastructure companies' operating costs are for the provision of power, the removal of the subsidy is expected to cause significant budget pressure and cause telecom companies to explore alternative energy sourcing arrangements for back up power. It is this factor, coupled with the increasing capital needs caused by the continued roll out of telecom towers to meet increasing demand, that the Directors believe provides the Group with its opportunity.

Figure 3 below shows the increase in the price of a litre of diesel in India since 2004 and, in particular, shows the price increase since 2013 when the phasing out of government subsidy commenced.

Figure 3: Diesel Prices, 2004 to early 2015 (projected)

Source: Company information based on publicly available information

Alternative Technologies Used in the Indian Telecom Tower Sector

As the power requirements for telecom tower operation are significant in scale, and in light of diesel price rises discussed above, several options being are put forward by industry participants to satisfy demand. The traditional hybrid battery/diesel set up is now being challenged by fuel cell, solar panel, wind power and biomass technologies.

These alternative solutions are being offered through different business models ranging from a direct sale of assets to the Infrastructure Providers to a full operating cost model where the capital cost is spread across the life of the asset. The operating cost model has gained a significant amount of momentum and is now a common approach to replacing capital equipment.

Although additional investment is being allocated to grid reinforcement in India, the Directors believe that this investment will only be sufficient, at best, to match the increase in demand and therefore will not address the existing power generation deficit. It is therefore the Directors' expectation that grid reinforcement will not reduce the demand for back up power in the foreseeable future.

In order to transition to more efficient power, owners of power generating assets can either seek to increase the efficiency of their existing equipment or replace that plant with more efficient models. Technologies like solar photovoltaic, wind power, fuel cell and other renewable energy sources have been deployed in approximately 4,000 telecom sites in India. The Directors believe that these technologies will find niche applications, but that fuel cell solutions can be the dominant alternatives to diesel generators.

Solar Photovoltaic

In addition to the major drawback of not providing 'guaranteed' power availability, solar solutions require large amounts of land to mount panels and also offer little expansion flexibility as demand increases on the site. Whilst the cost of solar solutions is falling, they remain expensive relative to diesel generators at initial acquisition. Despite government policy in India incentivising the use of solar power technology for telecom towers, and substantial subsidies for deployment, solar can only be made to work in certain conditions and usually in combination with other technologies.

Wind Power

The strength and consistency of wind speeds in India are not optimal for wind generated power and are likely to be unreliable for the majority of telecom tower sites. Consequently wind power turbines are unlikely to form a stand-alone solution for telecom towers in India.

Biomass

About 32 percent of the total primary energy used in India is derived from biomass and more than 70 percent of the country's population depends on it for its energy needs. However, the scale of biomass plants mean that they must be tied to other energy users in the local area in order to be economically viable. This dramatically restricts the number of telecom sites which could benefit from biomass energy generation.

Business Model

Most Indian telecom companies have separated the ownership and operation of telecom towers (including the provision of power at those towers) into stand-alone infrastructure provider companies ("Infrastructure Providers"). Infrastructure Providers operate as real estate managers (rather than as providers of telecom services) by constructing towers and leasing space on those towers to one or several mobile network operators. Infrastructure Providers are typically highly leveraged and, with the forecast significant increase in the number of telecom towers in India over the next few years, have to balance their capital resources between, inter alia, expansion and investment in power generating assets. Unlike the Infrastructure Providers, the DP&G Division will focus solely on the technology of power generation.

The DP&G Division business model will be delivered through a phased approach:

Revenue generation through the provision of power at telecom tower sites across India as a managed offering

The DP&G Division's power generation and management offering to Infrastructure Providers provides power generation technology expertise as well as addressing the Infrastructure Providers' lack of capital resources needed to acquire power generating assets.

The Infrastructure Providers will pay the DP&G Division a composite charge comprised of: (i) a usage charge in respect of the amount of electricity used; and (ii) a standing charge in respect of the Group guaranteeing the supply of electricity on site which will be payable regardless of the amount of electricity used.

In order to fund the capital cost of deployed equipment, the Group intends to obtain asset based financing from the local Indian market for the majority of the funding required for equipment acquisition.

Where a customer requires alternative arrangements such as retention by them of the risks and rewards of asset ownership, the Group will not charge a standing availability charge or incur the costs of asset ownership but instead will earn revenue through the sourcing and initial provisioning of new equipment.

The DP&G Division expects to purchase fleets of existing power assets at telecom tower sites (but not the telecom towers themselves) at the same time as entering into long term energy supply contracts with the Infrastructure Providers for those same telecom tower sites. Alternatively, where a customer wishes to retain the risks and rewards of asset ownership, the Group will control, specify and direct the asset replacement cycle for the customer's power generation equipment and therefore the Group will generate revenues through providing operations and maintenance support for the customer's assets and by taking responsibility for fuel supply arrangements.

Initially, the DP&G Division intends to operate the existing power assets (principally diesel generators, batteries and ancillary equipment) at telecom tower sites and expects to increase its margin on electricity usage charges by managing those existing power assets more efficiently, for example through use of the capabilities of the AMBIS unit and through more effective procurement and supply chain policies. Initially, where power assets need replacing this is likely to be effected on a like-for-like basis (i.e. new diesel generators purchased by the DP&G Division will replace existing diesel generators) which will create a newer, more efficient power generation estate. The Directors believe that when existing power assets meet the end of their useful economic life they will generally have a residual value that can be used to offset disposal and recycling costs.

The Directors intend that the DP&G Division will sub-contract and manage the provision of field services such as maintaining and fuelling diesel generators and batteries and fuel cell systems where these are deployed. These services will be sub-contracted to suitable skilled and experienced service providers which in some instances are expected to be the in-house field services divisions of the Infrastructure Providers. The Directors believe that the DP&G Division, as the prime contractor, should be able to improve the performance of its sub-contractors and the delivery of power through the effective use of the Group's AMBIS capability which is capable of monitoring fuel cell systems as well as diesel generators and batteries.

To allow the Group to deliver contracted services in India, the operational capability of the DP&G Division has already been bolstered with the recruitment of employees with significant knowledge of the operation of telecom towers in India and with particular knowledge of the management of power on those sites. The Directors expect this expansion in operational capability to continue as required to support current and future customer requirements.

Deployment of fuel cell power generation assets across the managed estate

The DP&G Division is targeting an increase in the margin on its electricity usage charges by providing more efficient fuel cell generated power as a replacement to incumbent diesel generated power where fuel cells are economically appropriate. In India, the Directors estimate that fuel cells will be suitable for 60 to 70 percent of current telecom tower sites, taking into account such factors as the cost of deployment of fuel cells, the operational and maintenance costs of fuel cell assets and the nature of each site.

Commencing at the end of 2014, the DP&G Division intends to carry out a phased roll out of hydrogen fuel cells as existing diesel generators reach the end of their economic lives. The Directors believe that the scale generated by the DP&G Division from its acquisition of multiple sites (or, in the specification of replacement assets for a customer's own back-up power requirements) and the length of the contracts it intends to enter into to provide power at those sites should enable the DP&G Division: (i) to decide when and where to introduce fuel cells into its portfolio of power generation sites; and, at the same time, (ii) assist it in securing a more commercially attractive capital cost for the fuel cell systems compared to typical low volume orders for new technologies.

Once installed, the fuel cells are expected to lower overall operating and maintenance costs when compared to diesel generators which will more than offset initially higher capital costs on deployment. Where a fuel cell based solution is not the most appropriate economic or operational option for tower sites, other technologies will be employed for power generation in a manner that the Group determines best suits the operating parameters of the site in question. This may include other renewable power generation assets or the continued use of diesel generators.

Additional customers, different industries and additional geographies

The Directors believe that, in time, non-telecom opportunities in India as well as opportunities in other markets in geographies that have weak power grids or which lack power grids altogether (including markets in the Middle East and Africa) will result in additional customers for both the Group's power provision offering and for the Group's fuel cell systems.

Within India, the Directors believe that opportunities exist for additional power which can be generated by the power assets located at telecom tower sites (i.e. power generated when the fuel cells are not being used to provide back up power to the towers or from excess capacity inherent in the power assets installed at the towers) to be sold to other customers at a low incremental capital cost and a marginal increase in operating costs to the Group. For example, opportunities for this may arise where additional mobile operators become tenants on an existing site or if other power users (who are not mobile operators but need power for another reason) exist in locations close to the telecom towers on which the power assets are located.

Cost-effective fuel cell products

Fuel cell systems are expected to be sourced using either a licensed manufacturing or contract manufacturing model. In the case of the former, this will involve the Group making its technology available to manufacturers who will pay license fees and royalties to the Group but will themselves own and on-sell the manufactured products. In the case of the latter, the Group will pay a contract manufacturer to manufacture the products and the Group will then sell the products to its customers.

Initially, the Group intends to use the contract manufacturing model and to supply the fuel cell systems to its own Indian incorporated subsidiaries that will implement the initial roll out by the DP&G Division of fuel cells at the tower sites. However, the Directors believe that its business model could, in time, generate third party customers for the manufactured fuel cell systems. Furthermore, were appropriate exit opportunities to arise for the Group to sell its power generating subsidiaries to third party investors (although such an exit is not currently in contemplation), the Group would aim to retain those companies as third party fuel cell systems customers.

The Directors are targeting an increased proportion of the DP&G Division's revenues being generated from licence fees and royalties over time and the Directors believe that the ability to attract licence manufacturers will be increased through identifying and developing a network of third party customers for manufactured fuel cell systems within the DP&G industry.

The Group's Competitive Advantage

The Directors believe that the results from the Group's field trials undertaken in India demonstrate the drivers for the economic case for its fuel cell technologies and its business model. From July 2011 to July 2012, the Group's pre-production fuel cell systems provided site uptime in field trials of 99.95 percent which is consistent with or above the service levels typically required by likely telecom customers.

The DP&G Division currently assumes the cost of hydrogen at the time of fuel cell roll out is likely to be approximately US\$10/kg based on data from a number of hydrogen sources and production methodologies. Based on this assumed price and data collected in the field trials, the Company's fuel cell solution has the capability to provide operating cost savings compared to existing diesel powered systems of 15 percent on a total cost of ownership basis (i.e. across the whole operational lifetime and including the capital cost of the fuel cell system) and 29 percent on a monthly basis (i.e. monthby-month for the whole operational lifetime but excluding the capital cost of the fuel cell system).

In addition, the Group expects changes to the Indian regulations governing the storage of hydrogen which should enable a significant increase in the amount of hydrogen shipped per container by allowing a change in the design of hydrogen cylinders to accommodate an increase in storage pressure. Under these circumstances, the delivered cost for a kg of hydrogen could be less than US\$7/kg which has the potential to improve margins and offer additional pricing flexibility.

Hydrogen Sources and Distribution

The DP&G Division has identified a number of existing sources of hydrogen within India including facilities such as refineries and supplies from industrial gas suppliers. The Group continues to work with a number of parties to undertake preparatory planning for a future hydrogen fuel cell roll-out.

In October 2012, the Group signed a statement of intent with Indian Oil, India's largest oil and gas company, to initiate demonstration projects and work collaboratively to develop the use of hydrogen in a range of fuel cell power systems in the Indian market. This will include exploring applications such as materials handling, telecom towers and motive applications, with direct relevance to the growing need in India to adopt low-carbon and high air-quality power system technologies. This is a key relationship in securing access to a domestic source of hydrogen to allow the Group to refuel its fuel cells. Indian Oil has been involved in the hydrogen sector for a number of years, setting up India's first hydrogen dispensing station at its research and development centre in 2005 and a H2 /HCNG dispensing station for demonstration vehicles in New Delhi in 2008 to 2009.

The Directors believe that two models for hydrogen distribution are likely to be utilised: direct local distribution to the telecom towers from the hydrogen source (appropriate for towers that are within a 50km radius of that hydrogen source); and bulk transport to local distribution hubs for onward delivery to towers (effectively a hub and spoke model). To achieve this, the Group will target oil and gas and other industrial and logistical companies in India who are active in hydrogen supply. There are 22 oil refineries in India (10 of which are owned and operated by Indian Oil and its partners) and 36 chloralkalai plants. Oil refineries typically generate hydrogen as a by-product of other refining processes and 22 of the chloralkalai plants have existing hydrogen capacity.

Partnerships and Strategic Alliances

Ascend Telecom

On 13 January 2014, the Group signed a framework agreement with Ascend Telecom ("Ascend") to provide efficient power for Ascend's telecom towers across India subject to certain preparatory arrangements. The term of the underlying electricity supply agreement is for an initial 180 day proof of concept phase which, if successful, could lead to a continuous term in excess of eight years. Ascend's telecom tower portfolio comprises over 4,000 towers and has an installed power base of 40MW generating approximately 30GWh per annum.

Microqual

On 6 March 2014, Essential Energy (Operations) India Private Limited (a subsidiary of the Company) and Microqual Coverage Solutions Private Limited ("Microqual") signed a 15 year energy services agreement under which the Group will provide energy services to telecom transmission equipment installed by Microqual in India.

Microqual has exclusive rights from the Power Grid Corporation of India Limited and other state transmission companies to install telecoms transmitting equipment on more than 70,000 electricity transmission towers in Punjab, Rajasthan, Himachal Pradesh and Jammu and Kashmir. Fitting telecom equipment to electricity transmission towers is a practice already widely adopted in other parts of the world. Under the terms of the energy services agreement, the DP&G Division will be the exclusive provider of power to the equipment mounted on these electricity transmission towers as it is not feasible to draw power from the transmission towers directly. The Group anticipates that Microqual could be an important strategic customer in the Indian telecom market as it is expected, by the Directors, that Microqual will be able to deploy telecom equipment on 5 to 10 percent of those electricity transmission towers over which it has exclusive rights. This market opportunity is driven partly by the fact that the mounting of telecom equipment on existing electricity infrastructure dramatically reduces the capital costs with a much reduced deployment time when compared to conventional methods of installing telecom towers from the ground up and therefore offers a cost effective expansion opportunity for Microqual's potential customers, namely India's mobile network operators. The first Microqual site became operational at the end of March 2014.

Future Opportunities with Indian Infrastructure Providers

Discussions are on-going with several other Infrastructure Providers in India. The Directors believe that by demonstrating execution with Ascend and Microqual, and given that the backdrop and rationale for the DP&G Division's offering is common to all operators in the market, the DP&G Division is likely to add additional customers within the next 12 months.

Key Milestones and Targeted Operational Roadmap for the DP&G Division

The DP&G Division is at various stages of negotiation with a number of potential future customers. The Directors anticipate that revenue from telecom tower sites will grow as increasing numbers of power assets are taken under management. By the end of September 2014, the Directors expect that approximately 5,000 sites will be under contract, with a targeted number of 125,000 to 135,000 sites under contract in the medium-term, both inside and outside of India. The Directors are targeting average initial invoiced revenue per site of £4,000 to £5,000 on average per annum. Capital expenditure relating to the acquisition of existing power generation and management assets at telecom tower sites is estimated at £2,000 per site on average with annual capital expenditure on equipment replacement expected to be in the region of £900 to £1,300 per site, depending on the type of technology in use.

The Group has prioritised an asset improvement programme to be introduced during 2014 and 2015, which is based on using the capabilities of its AMBIS unit and is expected to result in cost savings by improving the efficiency of the existing power generating assets acquired by the Group.

At the earliest opportunity, the Directors intend that surplus power generated at the Group's sites be used to generate revenue from non-telecom customers. The Directors are targeting 35,000 to 45,000 sites being used in this way in the medium-term. The Directors expect that an increase in the number of sites serving second customers, and an entry into other geographic markets with longer average outage times (and hence higher revenues per site) will lead to the initial target average revenue range per site being approximately doubled in the long-term.

A fuel cell solution to replace diesel technology is forecast to be available in late 2014. The Directors intend that this solution be rolled out in India in a controlled manner when and where fuel cells are economically advantageous. In the medium-term, the Directors expect approximately 50–55 percent of sites under the Group's management to be operating with fuel cell technology, and have a long-term target of over 60 percent.

The Directors anticipate that EBITDA for the DP&G Division will be zero in the financial year ending 30 September 2014 and are targeting an EBITDA margin of 50–55 percent in the medium-term following the large-scale acquisition of diesel generators at telecom sites, the subsequent roll-out of fuel cell technologies, the addition of second customers as consumers of surplus power, and entry into additional geographic markets with the potential for longer run times.

During 2014 and 2015 the Directors intend for the Group to continue to work with its partners in India on development plans for hydrogen fuel supply and logistics, volume production capabilities and service and fleet management solutions.

Regions outside of India are currently being investigated with a plan for expansion to an additional geographic market in 2015 and a further one in 2016.

Competition

The table below summarises the key competitors of the DP&G Division in the fuel cell sector for back up power:

Competitor	Summary of business activities
Ballard Power Systems	A Canadian fuel cell fuel cell designer and manufacturer with a focus on heavy vehicle (bus and truck) applications and standby/back up power applications. Ballard provides engineering services, licenses intellectual property and sells fuel cell stacks and systems. Ballard has produced a back up power product for the telecom industry and units have been trialled in India. Ballard has also developed a methanol refuelling based system with on-site reformation of methanol into hydrogen. In July 2012, Ballard acquired a licence and certain assets from Ida Tech relating to its fuel cell product lines for back up power applications.
Electro Power Systems	An Italian developer of hydrogen fuel cells for back up power and energy storage applications. Electro Power Systems offers a solution incorporating electrolysis cells for on-site hydrogen generation and fuel cells for power generation.
Plug Power	In April 2014 Plug Power acquired ReliOn, a US hydrogen fuel cell company developing and marketing hydrogen fuel cell technology. It is focused on the stationary power market and provides a range of stationary fuel cells for emergency and back up power requirements, uninterruptible power supplies, and a variety of off-grid power requirements.
	ReliOn's fuel cells are commercially available today and ReliOn claims to have sold and delivered more than 5,475kW of fuel cells in the US and abroad.
Altergy	A US designer and manufacturer of fuel cell power systems. Altergy's systems have been replacing batteries and generators in various applications including telecom switching sites and wireless cell towers.

7. Technology

Introduction

Proton Exchange Membrane ("PEM") fuel cells deliver clean electrical energy, utilising hydrogen as a fuel and oxygen (from the air) and produce only pure water as a by-product. They are highly efficient in that they directly convert chemical energy to electrical energy with no intermediate combustion or mechanical step involved.

Since the hydrogen fuel is stored separately and externally to the fuel cell they can be quickly refuelled and are not subject to long recharging periods as with a battery. Like an engine, power is decoupled from energy and the fuel storage capacity can be sized appropriately to meet the run-time needs of the application.

The Group's technology is focused on PEM fuel cells which are robust, relatively low temperature (<100˚C) devices which have rapid start up and response times. They deliver the highest power densities of all the fuel cell types and are the most widely applicable fuel cell technology, spanning numerous market sectors with a power range of a few watts to hundreds of kilowatts.

Technology Evolution

As can be seen from Figure 4 above, the proton exchange membrane serves to separate the hydrogen from the oxygen. The membrane is sandwiched between two flow field plates and the gases are delivered to catalysts at the membrane surface via fine channels in the flow field plates. In the process of transferring protons from hydrogen to oxygen, electricity, heat and water are produced.

The Group has always developed its technology with an appreciation of materials suitable for high volume manufacturing. The focus has been, and remains, the development of PEM fuel cells and fuel cell systems that are cost effective when compared to competing technologies on both an operating cost and acquisition cost basis. This dual objective has been targeted through engineering solutions that enhance performance, efficiency and durability whilst ensuring that manufacturing simplicity is maintained.

An early stage assessment led to the decision that the most suitable flow field plate material consistent with the large scale fabrication, deployment and extended addressable market of PEM fuel cells would be sheet stainless steel. Steel was an abundant, stable commodity, well understood by mass manufacturers and could be readily formed into the advanced architectures required by the Group's differentiated design approach. Importantly, steel was compatible with the advanced cooling methods developed by the Group which required, thin, strong and precisely engineered flow field plates. The Group's ability to remove heat from the fuel cell (which can be a bottleneck to higher power densities), whilst keeping the cost and size of the ancillary equipment to a minimum, is one of its key technology differentiators. The Group's decision to use steel was a move away from the understanding at the time that graphite plates were the only proven stable material for the PEM environment. The Group's testing, carried out under an arduous simulated automotive application as defined by a major automotive OEM, found that certain stainless steels were appropriate for the duty. A number of large automotive OEMs have now adopted stainless steel.

Because of its early commitment to sheet steel, the Group now has 25 years of accumulated expertise in the design boundaries of manufacturing precision-engineered metallic components for PEM fuel cells. This has led the Group, in more recent years, to develop pressed plate architectures suitable for high volume production at low cost.

In the formative period of the Group's research it was recognised that two parallel stack design programmes would help to secure a PEM fuel cell capability that could address a wide range of market opportunities. As a result of these work streams, the Group is able to deliver fuel cell architectures that are differentiated primarily by cooling mechanism but share a number of common fabrication methodologies and base materials.

The AC technology demonstrates a broad applicability at the low end of the power spectrum (1W to 5kW), whilst the EC design addresses a larger power spectrum. These two fuel cell stack designs lie at the core of the Group's technology offering, with the AC technology being used in all three divisions and the EC technology in higher power motive where it is beneficial because of the need for enhanced cooling in higher output applications.

Air Cooled Stack Technology

The Group's AC technology offers one of the simplest possible constructs for a fuel cell. Its low component count leads to reduced assembly complexity and lower manufacturing cost.

The advantages offered by air cooling are particularly evident in lower power applications where additional components become major contributors to the total mass, volume and cost. A well designed AC fuel cell stack and system does not require any additional complex components to remove the heat. The Group has engineered its air cooled stacks to achieve high power densities and to ensure that the thermal load is effectively managed without the need for pre-humidification of air or fuel gases (another major source of additional components). Power density is critical in certain applications, typically where space is limited, and higher power density typically equates to lower material content and hence lower cost. The Group has demonstrated exceptional power densities for air-cooled stacks of 1.0kW per litre and 0.8kW per kg5 , which is approximately five times that of an illustrative competitor6 product on a volumetric basis and approximately four times that of the same illustrative competitor product on a gravimetric basis.

A key aspect of the Group's technologies is its operating flexibility. For example, peak power can be traded for efficiency by the use of adaptive control algorithms, allowing the device to be optimised for performance or operating cost.

The table below demonstrates the progression of the Group's AC stack technology in deployed systems in terms of its power density from 2005 to the present.

Progression in power density – The Group's AC stack technology

	2005	2011	2014
	ENV	Suzuki
	Concept	Burgman
	Bike	Scooter	Current
kW/L	0.30	0.57	0.70
kW/kg	0.22	0.48	0.62

In 2010, the Group designed, commissioned and validated a semi-automated cell assembly system at its facilities in the UK. Subsequently, a ready-to-scale pilot production line was built in Yokohama, Japan, at the joint venture facilities of the Group and Suzuki. The latest format AC stack, which incorporates improvements in manufacturability as a result of observations during manufacturing activities on the pilot production line, has now been validated through in-house trials and is the variant that has been provided under licence to Suzuki. Stacks for this variant are now being made in low volumes by SMILE and are expected to form the basis of vehicle platforms for Suzuki's first market introductions.

The Group's first fuel cell for consumer electronics devices is built around a central stack core that is a variant of the larger AC technology more commonly associated with low-power automotive and back up power applications. The cell structure of the fuel cell stack currently deployed in the Upp™ device has a cell surface area which is less than 20 percent the size of its parent AC technology. Current stack tests indicate this stack will have more than 1,000 operating hours over its lifetime which is more than the typical operating life of a hand-held device. This consumer electronics AC stack is already being manufactured in China by the Group's contract manufacturer.

⁵ Using the Group's 4.2vs stack operating at 0.6 volts per cell

⁶ The illustrative competitor is a manufacturer of AC fuel cell products and has been chosen for illustrative comparison purposes due to its market position and the availability of comparative data

The Group's fuel cell stack for use by the DP&G Division is based around the same stack architecture that the Group has used in its joint development projects with Suzuki and its SMILE FC Systems joint venture with Suzuki. The operating parameters of the fuel cell stack deployed in the Motive and DP&G systems will be controlled in order to meet the performance and durability requirements of the particular applications.

Evaporatively Cooled Stack Technology

The EC construct employs water injection into each cell, relying on evaporation rather than a separate cooling loop to remove heat from the system. The humidity remains very high around the membrane, potentially avoiding degradation mechanisms that can affect systems using more conventional designs. Water injection removes the need for cooling plates which, in some competing designs, add mass with no resulting increase in power and also eliminates the need for external humidifiers that increase costs and are generally unreliable.

The Group's EC fuel cell is flexible in its application and can be scaled up to 100 kW in a single stack. A combination of stack modules can allow hundreds of kilowatts to be delivered. EC stacks are inherently much more compact than AC stacks, as their flow field plate construct is much thinner and designed for higher pressure use and, therefore, EC stacks are particularly practical in systems where high power density is essential, such as in motive power.

The Group's technology uses a single piece, steel foil, flow field plate to deliver water, via a network of fine channels, to points that are in line with the gas channels in the flow field plate. This provides maximum efficacy of the evaporative effect. Proprietary control algorithms manage this process in real time and react to changes in power demand and hence the cooling requirement. This results in a stack that can respond rapidly to rising power requirements.

The Group's EC fuel cell stacks have completed over 8,000 hours of bench-durability testing under both steady-state and transient conditions. Translating the test results into automotive terms, for a vehicle that travels at an average speed of 40 miles per hour over a lifetime distance of 100,000 miles, under test conditions the degradation rates have shown less than 10 percent decrease from the fuel cell stack's "as new" rated power output.

The Group's EC stacks can be built in several size variants. This is not difficult to achieve, as essentially it requires only more individual cells to be added to increase the stack length. Examples include 10kW range extenders for primarily battery-powered vehicles, 30kW for smaller vehicles, and 50kW multiple stacks for larger vehicles providing a total vehicle power in excess of 100kW.

In 2013 the development work carried out on pressed flow field plates resulted in the demonstration of industry leading fuel cell performance at volumetric and gravimetric stack power densities of 3.7 kW/L and 2.5 kW/kg respectively. Single stacks were shown to be capable of delivering 60kW for a mass of 27kg. The table below demonstrates the progression of the Group's EC stack technology in terms of its power density from 2008 to the present.

Evolution of performance – The Group's EC stack technology.

	2008	2011	2014
	Peugeot Partner	London Taxi	Current7
kW/L	1.11	1.87	3.70
kW/kg	0.39	0.77	2.50

Next Generation and Advanced Technologies

Whilst the Group's AC and EC technologies are differentiated in their construction, they have both benefitted from the expanded knowledge generated by the Group having pursued both development pathways since certain performance benefits that are identified in one technology can often be transferred to the other. The Group is now drawing together the distinct merits of each of the two constructions to bring forward a new generation of stacks which potentially will boost performance, lower cost and expand even further the applicability of PEM technology.

⁷ Using the Group's 4.2c stack operating at 0.7 volts per cell

Planar Fuel Cells

Consumer electronics devices continue to get thinner. In order to address the opportunity for the use of fuel cells as embedded power source components in consumer devices, the Group has undertaken research in the area of planar (flat) fuel cell structures. This research has, following preliminary trials, shown that a planar stack is capable of demonstrating power densities suited to potential applications.

Fuel for CE Platforms

The Group has evaluated several fuels for use in fuel cartridges. Suitable fuels can be broken down into three broad categories which span a wide range of energy delivery opportunities: (1) Metal hydrides; (2) Chemical hydrides; and (3) "Super Fuels":

• Metal hydrides are formed from metal alloy powders that absorb and release hydrogen at relatively low pressures. They act like a hydrogen absorbing sponge that can be refilled and reused almost indefinitely, and whilst being extremely compact, their downside is the weight of the metal hydride powder itself. Metal hydrides are recharged by flowing hydrogen gas through the storage canister, requiring little specialist equipment to do so; in this way the decentralisation of refuelling is possible, which is especially important for emerging markets where experience with hydrogen is often limited. The gas is released in a controlled manner into the fuel cell by activating a pressure valve in the fuel canister. As such, hydrogen is only released when the fuel cartridge is connected to the fuel cell, allowing multi-use and stop-start capabilities. The first UppTM fuel cartridge will be a metal hydride cartridge.
• Chemical hydrides store hydrogen within their substrate through chemical bonds. The hydrogen is released upon breakdown of the chemical, typically with water (hydrolysis) or heat (thermolysis). Any hydrolysis fuel requires a water reservoir and increases the volume of the fuel cartridge which diminishes the energy density of the overall cartridge but chemical hydrides are significantly lighter (more energy dense) than metal hydrides. Thermolysis fuels require a means of providing the heat required for the reaction and therefore additional system equipment is required which diminishes the energy density of the overall system. Chemical hydrides can also be used to produce cartridges at costs that are appropriate for a disposable cartridge. The Group's in-house capability to develop chemical hydride cartridge designs and prototypes that are capable of mass manufacture is important to the Group in the short to medium term so as to provide a disposable fuel cartridge with lower capital expenditure requirements and because it should allow the Group to make a variety of fuel cell options available in the market.
• "Super Fuels" is a term utilised by the Group as a generic term to cover future generation fuels which are highly energy dense and often have a pedigree in the space programme, where volume and size constraints are of the upmost importance, or military applications. This category of fuel is not widely available outside of research laboratories but fuel evaluation is being conducted at the Group's facilities in Loughborough, UK and Florida, USA as well as in conjunction with various partners and research groups.

8. Intellectual property

The Group's commercial business models and technology platforms are underpinned by a large portfolio of intellectual property, both registered and unregistered. For that reason, the Group focuses on maintaining an intellectual property portfolio that supports the varied business models used in its three divisions. Much of the Group's intellectual property portfolio was created within the Group but elements have been acquired throughout the Group's history including at start-up. More recently, in May 2014, the Group acquired from SiGNa Chemistry Inc. ("SiGNa") and its subsidiary, Fuel Cell Power Inc, a patent portfolio and related intellectual property relating to fuel cells and fuel cell systems, fuel cartridges and fuels for fuel cell systems as well as related tangible assets. As part of the transaction, the parties have entered into a supply agreement pursuant to which the Group is able to purchase chemical supplies from SiGNa for use in fuel cartridges.

The Group's portfolio covers a range of aspects of the fuel cell stack and associated systems as well as a number of other rights related to the Group's proposed business models. The protection offered by the portfolio includes aspects of the fuel cell technology that are instrumental in achieving the Group's class-leading power densities.

The Group's patent portfolio includes more than 350 patents granted (and over 450 patents pending) across more than 250 patent families. The Group operates clear internal processes to collect, assess and prosecute suitable inventions. Those processes also cover on-going assessment of patent applications during the process and foreign filing decisions.

The Group's objective is to create a strong overall portfolio that minimises any reliance on individual patents. From time to time this may result in the addition of patents through acquisition. The Group also ensures that its intellectual property strategy and processes are focused on creating or acquiring rights to key individual patents, identifying inventions and taking necessary steps to protect its position.

The Group maintains a significant body of confidential know-how and trade secrets. It is this intellectual property that allows the Group to deploy its proprietary technology for the benefit of itself and its customers. For the Group's customers and potential customers, leveraging the Group's overall intellectual property portfolio offers the ability to accelerate development programmes, reduce developments costs and take advantage of several years of technology development. At the same time, the portfolio offers customers and partners the benefit of significant underlying patent protection.

For example, in the Motive Division, the Suzuki licensing deal involved a significant technology access arrangement to ensure Suzuki was able to use the Group's technology and at the same time was granted a licence to some of the underlying patents.

The Group believes that a strong, wide ranging intellectual property portfolio offers significant benefits both in generating revenues (for example, through technology based licensing in the Motive Division) and protecting the Group's competitive position (for example, by creating a barrier to entry).

9. Current trading and prospects

Since 31 March 2014, the Group has continued to trade in a similar manner to the first half of the 2014 financial year with the Motive Division being the determinant of trading performance. The remainder of the 2014 financial year is expected to see growth in the business compared to the first half. The Directors expect that this will be derived from the recent launch of the UppTM device following its certification and the DP&G Division taking on further telecom tower sites under power management contracts.

10. Dividend policy

The Company is primarily seeking to achieve capital growth for its Shareholders and it is the Board's intention during the current phase of the Group's development to retain distributable profits. Accordingly, the Directors do not anticipate paying a dividend in the foreseeable future. However, if the Group were to receive significant, up-front licensing payments from its customers and partners which were in excess of the projected capital requirements of the Group at such time, the Board would consider whether it would be appropriate to recommend a special dividend or another return of value to Shareholders. In the long term, the Directors intend to follow a progressive dividend policy in respect of excess profits over and above what is required to fund the development of the Group.

11. Board of Directors

Non-Executive Chairman: Paul Heiden (Age 57)

Appointed in September 2012, Mr. Heiden has extensive experience at the most senior levels of industry in a career which has spanned a range of leading engineering, manufacturing and technology companies. These include Rolls-Royce plc, where he was Group Finance Director, and, most recently, FKI plc, where he was Chief Executive Officer. He has extensive experience in the UK, USA and EU.

Mr. Heiden is currently a Non-Executive Director of the London Stock Exchange Group plc and Meggitt plc. Until recently he was also the Chairman of Talaris Topco plc, a company owned by the Carlyle Group, and United Utilities plc.

Chief Executive Officer and Executive Director: Dr. Henri Winand (Age 47)

Dr. Winand joined the Board as Chief Executive on 1 September 2006. He was previously Vice President of Corporate Venturing at Rolls-Royce plc. During his time with Rolls-Royce, Dr. Winand managed a power systems business, introduced new manufacturing technologies into the group and was responsible for defining and supervising the implementation of strategies for deriving additional value from the group's technology assets.

Dr. Winand has a PhD from the University of Cambridge, a Masters of Business Administration from the University of Warwick and a BEng from Imperial College, London. He is a Governing Board member of the European Union's Fuel Cell Hydrogen Joint Undertaking (FCH JU) and Treasurer of the FCH JU's New Industrial Grouping. He is a member of the UK Government's Green Economy Council, advising the Secretaries of State for DECC, DEFRA and BIS and also a member of the University of Cambridge's Alumni Advisory Board.

Chief Financial Officer and Executive Director: John Maguire (Age 48)

Mr. Maguire was appointed in January 2012 and has Board-level experience of listed and unlisted technology rich companies.

Mr. Maguire joined the Group from Etisalat Nigeria, where he was CFO of the mobile operator during its initial rapid growth phase. He was previously CFO at FTSE 250 THUS Group plc for eight years, and prior to that worked in a number of senior finance positions, including Vice President Finance Japan and Asia, Cable & Wireless, based in Tokyo.

Mr. Maguire is a Chartered Accountant, having trained with Ernst & Young, Mr. Maguire is also a Non-Executive Director of Jee Limited, a subsea engineering and training company.

Non-Executive Director: Michael Muller (Age 55)

Mr. Muller is the Chief Technology Officer of ARM Holdings plc, the British-based semiconductor and software design company. Mr. Muller was one of the founding members of ARM Limited when it was created as a joint venture in 1990 between Apple and Acorn. He occupied the post of Marketing Director and changed roles in 1996 to become Executive VP of Business Development before becoming Chief Technology Officer in 2000.

Mr. Muller brings unique experience in building a partnership-based business that has enabled a broad ecosystem of thousands of companies that collaborate together to create innovative technology solutions.

Non-Executive Director: Dr. Caroline Brown (Age 52)

Dr. Brown manages early stage companies and divisions of FTSE100 groups in the energy and technology sectors and has worked as a corporate finance adviser to governments and energy companies with banks including Merrill Lynch, UBS and HSBC. She is an experienced Non-Executive Director and has chaired the Audit Committees of WSP Group plc, Mirland Development Corporation plc and Bridge Energy ASA.

Dr. Brown holds a First Class degree and PhD in Chemistry from the University of Cambridge and a Masters of Business Administration from the Cass Business School, is a Fellow of the Chartered Institute of Management Accountants and is a Chartered Director.

Non-Executive Director: Zarir J.Cama (Age 67)

Mr. Cama is a former Chief Executive Officer of HSBC India and Malaysia, and was most recently Group General Manager of Group Management Office at HSBC Holdings plc prior to his retirement.

Mr. Cama's 44 year career at HSBC included a variety of senior management positions in Asia and the Middle East. He currently holds non-executive positions at HSBC Bank Bermuda Limited, The Saudi British Bank (SABB), HSBC Private Banking Holdings (Suisse) SA, and Tata Capital Pte Ltd Singapore.

Non-Executive Director: Flavio Guidotti (Age 58)

Mr. Guidotti is an independent business consultant with over 30 years business experience. He has worked in investment banking, first for the Banque Européenne pour l'Amérique Latine (at the time a Fortis affiliate) and then for the Royal Bank of Canada. He has also managed various business divisions at the Southern Cone headquarters of ExxonMobil in Buenos Aires. In 1997 Mr. Guidotti was appointed Senior Advisor to the President of the Central Bank of Argentina.

Mr. Guidotti is a CPA and holds a degree in Business Administration from the Universidad Católica Argentina, Buenos Aires, where he has also been Professor of General Management and Business Strategy for several years.

Non- Executive Director: Martin Bloom (Age 62)

Mr. Bloom is Chairman of Renesola, the global photovoltaic manufacturer that he helped list on AIM London and then on the New York Stock Exchange. Mr. Bloom has steered Renesola through rapid growth to become a \$1.5 billion plus turnover company in just a few years.

Mr. Bloom has significant experience in building high-growth technology companies across a range of sectors. He has strong connections in Asia, in particular with Chinese businesses, institutions and government organisations.

Non-Executive Director: Dr. Philip Mitchell (Age 56)

Dr. Mitchell has spent over a decade in senior management roles at the Group, acting at various times since 2005 both in the capacity of Chief Technology Officer and Chief Operating Officer. During his time as an Executive Director, Dr. Mitchell was instrumental in driving forward the Group's technology platform development, intellectual property value creation and key strategic engineering partnerships. He transitioned to his non-executive role in December 2013.

Prior to his employment with the Group, Dr. Mitchell was a founder in 1995 of Advanced Power Sources Ltd, a predecessor of the Group, and was a member of Intelligent Energy's original start-up team in 2001. At the time of his involvement with Advanced Power Sources he also held the position of Research and Development Manager at Innogy Technology Ventures Ltd (then part of the Innogy Group, and subsequently RWE npower plc). Prior to this, building on his early academic training in electrochemical systems, he established and managed a sizeable consulting team based at Loughborough University, providing research management services for clients in sectors as diverse as automotive, defence systems, battery manufacture, and power utilities.

Dr. Mitchell has a BSc and a PhD in Chemistry from Loughborough University.

12. Corporate governance

The Directors support high standards of corporate governance. The Company has not been required to comply with the UK Corporate Governance Code and compliance is not a requirement for a company whose shares are to be admitted to the standard listing segment of the Official List of the FCA. The Directors have nonetheless always taken note of the terms of the UK Corporate Governance Code and voluntarily complied whenever it has been appropriate to do so, and it is their intention to continue with that practice.

Audit and Risk Committee

The Board has established an Audit and Risk Committee with formally delegated duties and responsibilities. The Audit and Risk Committee is chaired by Dr. Caroline Brown and its other members are Martin Bloom, Zarir Cama and Michael Muller. The Audit and Risk Committee will meet at least four times a year and will be responsible for ensuring the financial performance of the Company is properly reported on and monitored, including reviews of the annual and interim accounts, results announcements, internal control systems and procedures and accounting policies, as well as keeping under review the categorisation, monitoring and overall effectiveness of the Company's risk assessment and internal control processes.

Remuneration Committee

The Remuneration Committee is chaired by Zarir Cama and its other members are Martin Bloom, Michael Muller and Dr. Caroline Brown. It is expected to meet not less than two times a year.

The Remuneration Committee has responsibility for determining, within agreed terms of reference, the Group's policy on the remuneration of senior executives and specific remuneration packages for executive directors and the Chairman, including pension rights and compensation payments. It is also responsible for making recommendations for grants of options under share-based schemes for Group employees.

The remuneration of non-executive directors is a matter for the Board. No director may be involved in any discussions as to their own remuneration.

Nomination Committee

The Nomination Committee is chaired by Martin Bloom and its other members are Zarir Cama, Michael Muller, Paul Heiden, Dr. Caroline Brown and Flavio Guidotti. The Nomination Committee is expected to meet at least once per year. The Nomination Committee is responsible for reviewing, within the agreed terms of reference, the structure, size and composition of the Board, undertaking succession planning, leading the process for new Board appointments and making recommendations to the Board on all new appointments and re-appointments of existing directors.

13. Share dealing code

The Company has adopted, with effect from Admission, a code of securities dealing in relation to securities of the Company which is based on the Model Code contained in Chapter 9 of the Listing Rules published by the FCA. The dealing code will apply to the Directors and other persons discharging managerial responsibilities within the Group.

PART II

SELECTED FINANCIAL INFORMATION

CONSOLIDATED INCOME STATEMENT

The table below sets out the Consolidated Income Statement reported under IFRS for: the six month period ended 31 March 2014 and, for comparative purposes, unaudited financial information for the six-month period ended 31 March 2013; and for the three years ended 30 September 2013, 30 September 2012 and 30 September 2011. The information has been extracted without material amendment from the Group's historical financial information included in Part V "Historical Financial Information" of this Prospectus.

	6 months to 31 March		Year to 30 September
	2014 £000	2013 £000 (unaudited)	2013 £000	2012 £000	2011 £000
Revenue	3,505	12,660	20,846	43,852	11,869
Cost of sales	(2,606)	(6,482)	(13,497)	(17,760)	(11,292)
Gross profit Research and	899	6,178	7,349	26,092	577
development expenses	(8,320)	(8,052)	(13,878)	(13,326)	(5,980)
Administration expenses	(11,687)	(8,704)	(20,159)	(12,148)	(9,557)
Trading (loss)/profit Share of loss of joint ventures accounted for using the equity	(19,108)	(10,578)	(26,688)	618	(14,960)
method – net of income tax	(840)	(1,341)	(2,514)	(1,026)	(344)
Operating loss	(19,948)	(11,919)	(29,202)	(408)	(15,304)
Finance income	55	44	116	77	23
Finance cost Gain on disposal of joint	(3,217)	(3)	(664)	(1,031)	(1,188)
venture/subsidiary	983	—	—	420	—
Loss before tax	(22,127)	(11,878)	(29,750)	(942)	(16,469)
Income tax	4,909	2,985	8,798	8,740	1,232
(Loss)/profit for period	(17,218)	(8,893)	(20,952)	7,798	(15,237)
Attributable to:
Owners of the parent	(17,218)	(8,893)	(20,952)	7,394	(14,833)
Non-controlling interests	—	—	—	404	(404)
	(17,218)	(8,893)	(20,952)	7,798	(15,237)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

The table below sets out the Consolidated Statement of Financial Position reported under IFRS: as at 31 March 2014 and, for comparative purposes, unaudited information as at 31 March 2013; and as at 30 September 2013, 30 September 2012 and 30 September 2011. The information has been extracted without material amendment from the Group's historical financial information included in Part V "Historical Financial Information" of this Prospectus.

	At 31 March			At 30 September
	2014 £000	2013 £000	2013 £000	2012 £000	2011 £000
		(unaudited)
Non-current assets
Property, plant and equipment	5,170	4,709	5,282	4,304	2,310
Intangible assets Investments accounted for	10,093	9,053	9,455	8,762	7,222
using the equity method	1,618	5,078	3,821	6,420	1,212
Other receivables	1,822	—	—	—	—
Deferred tax asset	12,022	7,717	9,158	6,715	—
	30,725	26,557	27,716	26,201	10,744
Current assets
Inventories	2,412	1,624	1,530	1,155	1,021
Trade and other receivables	6,091	15,434	13,291	6,362	4,580
Cash and cash equivalents	54,185	10,148	31,626	29,867	6,342
	62,688	27,206	46,447	37,384	11,943
Total assets	93,413	53,763	74,163	63,585	22,687
Current liabilities
Trade and other payables	(8,863)	(8,207)	(8,614)	(9,448)	(2,405)
Liability component of
convertible loan notes	—	—	—	—	(14,526)
	(8,863)	(8,207)	(8,614)	(9,448)	(16,931)
Non-current liabilities
Deferred tax liability	(2,239)	—	(2,600)	—	—
Liability component of
convertible
loan notes	(19,178)	—	(18,530)	—	—
Other non-current liabilities	(30)	—	—	—	—
	(21,447)	—	(21,130)	—	—
Total liabilities	(30,310)	(8,207)	(29,744)	(9,448)	(16,931)
Net assets	63,103	45,556	44,419	54,137	5,756
Capital and reserves
Equity share capital	7,566	6,658	6,807	6,639	5,316
Share premium	130,678	93,773	94,784	93,448	54,558
Equity component of
convertible loan notes	9,652	—	9,652	—	691
Merger reserve	29,277	29,277	29,277	29,277	29,277
Foreign currency translation reserve Retained earnings	(1,616) (112,454)	(354) (83,798)	(254) (95,847)	(313) (74,914)	(583) (83,099)
Equity attributable to owners
of the Company Non-controlling interests	63,103 —	45,556 —	44,419 —	54,137 —	6,160 (404)
Total equity	63,103	45,556	44,419	54,137	5,756

CONSOLIDATED STATEMENT OF CASH FLOWS

The table below sets out the Consolidated Statement of Cash Flows reported under IFRS for: the six month period ended 31 March 2014 and, for comparative purposes, unaudited financial information for the six month period ended 31 March 2013; and for the three years ended 30 September 2013, 30 September 2012 and 30 September 2011. The information has been extracted without material amendment from the Group's historical financial information included in Part V "Historical Financial Information" of this Prospectus.

	6 months to 31 March			Year to 30 September
	2014 £000	2013 £000 (unaudited)	2013 £000	2012 £000	2011 £000
Operating activities
(Loss)/profit for the year/period	(17,218)	(8,893)	(20,952)	7,798	(15,237)
Adjustment for taxation	(4,909)	(2,985)	(8,798)	(8,740)	(1,295)
Adjustment for net financing expense	3,162	(41)	548	954	1,165
Adjust non-cash items:	(18,965)	(11,919)	(29,202)	12	(15,367)
Depreciation and impairment of
property, plant and equipment	1,338	1,580	2,806	2,003	1,202
Amortisation of intangible assets	404	317	481	136	110
Gain on disposal of joint venture/subsidiary	(983)	—	—	(420)	—
Movement in investment in joint ventures	825	1,341	2,599	1,026	344
Loss on disposal of property,
plant and equipment	—	—	—	122	—
Share-based payments	611	9	19	100	109
Working capital adjustments:
Increase in inventories	(882)	(469)	(375)	(134)	(295)
Decrease/(increase) in trade and
other receivables	1,268	(6,699)	951	(931)	(2,805)
(Decrease)/increase in trade and
other payables	(383)	(1,665)	(631)	7,177	285
Taxation	3,794	(16)	3,261	1,480	1,295
Net cash flow from operating activities	(12,973)	(17,521)	(20,091)	10,571	(15,122)
Investing activities
Investment in joint ventures	—	—	—	(6,234)	—
Proceeds on disposal of joint venture	1,133	—	—	—	—
Net interest received/(paid)	36	42	(39)	77	23
Payments to acquire property,
plant and equipment	(1,228)	(1,985)	(3,791)	(5,438)	(1,340)
Payments to acquire intangible assets	(1,062)	(608)	(1,179)	(423)	(365)
Net cash flow from investing activities	(1,121)	(2,551)	(5,009)	(12,018)	(1,682)
Financing activities
Issue of ordinary share capital	36,653	344	1,504	24,656	18,762
Issue of convertible loan notes	—	—	25,317	—	—
Net cash flow from financing activities	36,653	344	26,821	24,656	18,762
Increase in cash and cash equivalents	22,559	(19,728)	1,721	23,209	1,958
Effect of foreign exchange rates on
cash and cash equivalents	—	9	38	316	(153)
Cash and cash equivalents at
beginning of period 21	31,626	29,867	29,867	6,342	4,537
Cash and cash equivalents
at period-end 21	54,185	10,148	31,626	29,867	6,342

PART III

OPERATING AND FINANCIAL REVIEW

The following is a review of the Group's results of operations in the periods set forth below. This Part IIII "Operating and Financial Review" should be read together with Part II "Selected Financial Information" and Part IV "Capitalisation and Indebtedness" as well as the consolidated financial statements and the related notes and information set out in Part V "Historical Financial Information" included in this Prospectus.

The consolidated financial data in this Part III "Operating and Financial Review" as of and for the six months ended 31 March 2014 and 31 March 2013 (unaudited) and for the years ended 30 September 2013, 30 September 2012 and 30 September 2011 have been extracted from Intelligent Energy Holdings plc's consolidated financial statements included in Part V "Historical Financial Information" of this Prospectus.

1. Overview

The Company is an energy technology group which has developed advanced, power dense hydrogen fuel cell technologies which provide an efficient and clean source of power generation. The Group is working towards its aim of embedding and using its technologies in mass market products (either of the Group or of its partners) to meet regulatory/legislative requirements, solve existing problems economically and/or create a new category of products and new product opportunities. The Group collaborates with large, blue-chip OEMs to develop and commercialise its technologies.

The Group is commercialising its technology in the three business divisions: Motive, Consumer Electronics ("CE") and Distributed Power & Generation ("DP&G"). These divisions are supported by a technology research and development function and a corporate headquarters, the latter comprising Group management and central functions which includes finance, legal and human resources.

Although the business is based upon three divisions, for financial reporting purposes the Group currently reports its results as a single segment because CE and DP&G have yet to commence substantial trading activities.

2. Significant factors affecting the financial condition and results of operations

The nature of the Group's business is changing. Historically, most of the Group's revenues have been generated by the Motive Division, while two new divisions, being CE and DP&G, are in the process of being launched. When they start generating revenues, the results of the two new divisions will be separately identified and, as required by IFRS 8, from that time certain segmental information for the three divisions will be reported.

Timing of licence revenue

In the Motive Division, the Group's revenues during the period under review have been attributable primarily to joint development and licensing arrangements with a limited number of OEMs. Since 2006 the Group has been establishing a strong working relationship with Suzuki Motor Corporation ("Suzuki"), including the development of a fuel cell scooter (known as the "Burgman" scooter) which has attained European Whole Vehicle Type Approval. As part of this collaboration, in 2011 the Company signed a licence agreement with Suzuki which included granting non-exclusive access to certain elements of the Company's technology. In November 2011 the Group and Suzuki established SMILE FC System Corporation, a 50:50 joint venture, to develop and manufacture air-cooled fuel cell power systems. Revenue recorded by the Company in respect of the licence agreement was £37.0 million in the financial year ended 30 September 2012 and £8.0 million in the financial year ended 30 September 2013. This led to a significant fluctuation in revenue from the financial year ended 30 September 2012 to the financial year ended 30 September 2013. All amounts under the licence agreement have been paid.

As the CE and DP&G Divisions develop and reach full-scale commercialisation, the Company expects that its revenue profile will change. For further detail, see "Part I – Information on the Group – 6.2 Consumer Electronics ("CE") – Business Model" and "Part I – Information on the Group – 6.3 Distributed Power and Generation (DP&G) – Business Model".

Increase in cost base

In the financial year ended 30 September 2011, the Group's cost of sales, research and development expenses and administration expenses were £26.8 million. For the financial year ended 30 September 2012, they were £43.2 million and for the financial year ended 30 September 2013, £47.5 million. This increase in the Group's cost base is a result of the Group gearing up to launch commercial operations for two new divisions and increased operations in the Motive Division.

Due in part to these increased funding needs, as described further in paragraph 6 (Liquidity and capital resources), the Company, in August and September 2013, issued 5 percent unsecured loan notes due 2017 to raise proceeds net of costs of £30.3 million. The loan notes will be converted into Ordinary Shares at Admission. As at 31 May 2014, £31.2 million was outstanding on the loan notes (including accrued interest). This amount does not include £2.0 million of irrevocable undertakings to subscribe that were not received. As at 31 March 2014, the Group recorded the liability component of the loan notes at £19.2 million in accordance with IFRS.

Seasonality

The Group's results of operations are not significantly affected by cyclical fluctuations during the year or from year to year.

3. Key performance indicators

Management uses certain financial measures to evaluate the Group's results of operations. The principal measures that management uses to evaluate the Group's financial performance include:

• Revenue
• EBITDA
• Profit/(loss) for the year
• Capital expenditure
• Net cash flow from operating activities less investing activities

EBITDA is earnings before interest, taxes, depreciation and amortisation and is a non-IFRS measure.

Even though the Company's management uses EBITDA as one of the key performance indicators to assess the Group's financial performance and liquidity and EBITDA is a measure commonly used by investors, it has important limitations as an analytical tool, and should not be considered in isolation or as a substitute for analysis of the Group's position or results as reported under IFRS.

4. Principal income statement items

Revenue

The Company has to date generated revenue principally from customers of its Motive Division through (i) technology licencing, (ii) technology consultancy and product advancement (rendering of services), and (iii) low-volume sales of hydrogen fuel cell and hydrogen generation products (sale of goods). Sale of goods comprise an immaterial amount of the Group's revenue. The Group has historically focused on a small number of Motive customers, and revenues have included amounts generated from development projects and licence agreements. This means that revenues can vary significantly from period to period.

The Group's policy is to retain ownership of core fuel cell IP and to use licensing models rather than transferring ownership of IP.

In the financial year ended 30 September 2012 and the financial year ended 30 September 2013, a significant proportion of the Group's revenue arose from a licence agreement with Suzuki.

Cost of sales

Cost of sales includes costs of labour, subcontractors, materials and consumables, travel and other miscellaneous expenses that are directly attributable to revenue earning projects. Projects typically last for a period of up to one year and therefore costs can fluctuate year-on-year depending on the complexity and number of projects being undertaken.

Gross margins vary as a result of the timing of revenue under the licence agreement with Suzuki, which has low incremental costs, and under the joint development agreements with Suzuki and a European premium car maker.

Research and development ("R&D") expenses

R&D expenses principally relate to technology research activities undertaken to develop the Group's platform based technologies. The Group's technology can be used for a range of applications under its "design once, deploy many times" philosophy meaning that costs may not be specific to individual operating divisions or products. Research and development costs have been disclosed separately below gross profit, as these costs are not directly related to sales activity.

Administration expenses

The Group's administration expenses include management and administration salaries, marketing costs, legal and professional costs, premises costs, depreciation of fixed assets, amortisation of intangible fixed assets and general overheads.

Depreciation of fixed assets

Depreciation is charged to the income statement as part of administration expenses in respect of all property, plant and equipment on a straight-line basis with no residual value over its expected useful life as follows:

•	plant, machinery and equipment:	between 2 and 5 years
•	office equipment, fixtures and fittings:	between 3 and 4 years

Amortisation of intangible fixed assets

Amortisation is charged to the income statement as part of administration expenses in respect of intangible assets on a straight-line basis with no residual value over their expected useful lives as follows:

•	patents:	15 years
•	development expenditure:	5 to 15 years
•	software:	4 years

Patents have been granted on intellectual property rights for a period of 15 years by relevant government agencies in countries where patents are applied for. Each patent application is carried at cost less accumulated amortisation and accumulated impairment losses. The carrying values of patents are reviewed for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. Patent renewal fees are reflected in the income statement in the year in which they are incurred.

Development expenditure on internally developed intangible assets, excluding development costs, is reflected in the income statement in the year in which it is incurred. Research costs are expensed as incurred. Expenditure relating to clearly defined and identifiable development projects is recognised as an intangible asset only after all the following criteria are met:

• the project's technical feasibility and commercial viability can be demonstrated
• the availability of adequate technical and financial resources and an intention to complete the project have been confirmed
• the correlation between development costs and future revenue has been established.

Development expenditure for a new product that represents an entry into a new market is only recognised as an intangible asset from the date that a first commercial customer order is received. Following the initial recognition of the development expenditure, the asset is tested for impairment annually during the period of development.

Staff costs

Staff costs are a component of cost of sales, research and development costs and administration expenses. Staff costs include recruitment expenses.

Total staff costs during the periods presented were as follows:

	Six-month period
	to 31 March			Year to 30 September
	2014	2013	2013	2012	2011
	£'000	£'000	£'000	£'000	£'000
		(unaudited)
Wages and salaries	8,877	7,325	15,978	13,002	8,812
Share based payments	611	8	19	100	109
Social security costs	836	815	2,235	1,285	760
Pension contributions	194	—	245	—	—
	10,518	8,148	18,477	14,387	9,681

The monthly average number of employees during the periods were as follows:

	number	number	number	number	number
Research and development	61	57	61	33	22
Operations and
applications engineering	208	184	238	164	116
Corporate and commercial	69	54	68	43	28
	338	295	367	240	166

Total staff costs amounted to £10.5 million for the six-month period ended 31 March 2014, a 30 percent increase from £8.1 million in the six-month period ended 31 March 2013. The monthly average number of employees increased by 15 percent over the same period from 295 to 338. The principal reason for the increase was that the Group was strengthening its management team and staff in connection with the increase in CE and DP&G activities.

Total staff costs amounted to £18.5 million for the year ended 30 September 2013, a 28 percent increase from £14.4 million in the previous year. The monthly average number of employees increased by 53 percent over the same period from 240 staff to 367 staff. The principal reason for the increase was that the Company was strengthening its management team and staff in connection with the increase in CE and DP&G activities.

Total staff costs for the Group amounted to £14.4 million for the year ended 30 September 2012, a 48 percent increase from £9.7 million in the previous year. The monthly average number of employees was 240, a 45 percent increase from 166 in the previous year. The increase reflected the higher levels of activity in connection with the start of the new CE and DP&G activities.

Share of loss of joint ventures

The share of loss of joint ventures represents the Group's share of the income statement of the respective joint ventures and the Group's write down, if any, in the carrying value of respective joint ventures using the equity method.

The joint ventures comprise the following:

• (i) IE CHP (UK & Eire) Limited. The Group has a 50 percent investment in this joint venture whose principal activity is the development of combined heat and power fuel cell units with integrated natural gas reformers. The other partners are Scottish Enterprise (as administrator for the Scottish Venture Fund) and SSE Venture Capital Limited.
• (ii) SMILE FC System Corporation. The principal activity is the manufacture, evaluation and improvement of air-cooled fuel cells to be supplied to Suzuki. The Group has a 50 percent investment in this joint venture with Suzuki. Suzuki holds the other 50 percent.

In February 2014 the Group sold its 50.5 percent interest in IE LEV Limited. The company was a joint venture between the Company and certain individuals, including members of the management. IE LEV Limited was established to develop a new, lightweight, low to zero emissions delivery van.

Finance income and cost

Finance income represents interest receivable on funds invested, such as interest received on cash deposits. Finance cost represents interest accrued on convertible loan notes and interest payable on bank overdrafts. Interest income and interest payable are recognised in the statement of income as they accrue, using the effective interest method.

Loss before tax

Loss before tax represents the result of the profit and loss account before any provision or credit for taxation.

Income tax

Income tax comprises current tax and deferred tax.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the statement of financial position date and any adjustment to tax payable in respect of previous years. It also includes Research and Development tax credits ("R&D tax credits") for corporation tax whereby the Company's tax liability is reduced or a cash sum is payable to the Company by HM Revenue & Customs.

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 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 statement of financial position 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 asset can be utilised.

5. Results of operations

(a) Six-month period ended 31 March 2014 compared to six-month period ended 31 March 2013

Revenue

Revenue for the six-month period ended 31 March 2014 was £3.5 million comprising the rendering of services. This is a decrease of 72 percent from revenue for the six-month period ended 31 March 2013 of £12.7 million, comprising revenue from licencing of £5.5 million and from the rendering of services of £7.2 million. The period-on-period decrease in revenue from the rendering of services is a result of the general variability of the timing of revenue from the Motive Division.

Cost of sales

The Group's cost of sales for the six-month period ended 31 March 2014 was £2.6 million, which compares with a cost of sales of £6.5 million (a 60 percent decrease) for the six-month period ended 31 March 2013. This drop is in line with reduced revenue from rendering of services.

Gross profit

The Group's gross profit for six-month period ended 31 March 2014 was £0.9 million, down from £6.2 million in the previous financial year. Gross profit was 26 percent of revenue in the six-month period ended 31 March 2014 as compared with 49 percent of revenue in the six-month period ended 31 March 2013. The reduction in the margin is principally a result of the absence of high-margin licence revenue.

Research and development expenses

The Group's research and development expenses for the six-month period ended 31 March 2014 amounted to £8.3 million, a 2 percent increase from £8.1 million in the six-month period ended 31 March 2013. This reflects the continued activity in developing products for sale by the CE and DP&G Divisions and ongoing development of technology.

Administration expenses

The Group's administration expenses amounted to £11.7 million for the six-month period ended 31 March 2014, a 34 percent increase from £8.7 million the six-month period ended 31 March 2013. The principal reason for this increase was the increase in headcount.

Trading (loss)/profit

For the six-month period ended 31 March 2014, the Group had a trading loss of £19.1 million. For the six-month period ended 31 March 2013, the Group had a trading loss of £10.6 million.

Share of loss of joint ventures

For the six-month period ended 31 March 2014, the Group's share of loss of joint ventures net of tax was £0.8 million, a 38 percent reduction over the £1.3 million loss during the six-month period ended 31 March 2013. The losses did not relate to trading activities but instead to the costs of developing joint venture activities.

Operating loss

The Group's operating loss in the six-month period ended 31 March 2014 was £19.9 million, which compares to a loss of £11.9 million the six-month period ended 31 March 2013 (a 67 percent increase).

Finance income

The Group's finance income for the six-month period ended 31 March 2014 was £0.1 million, unchanged from the six-month period ended 31 March 2013.

Finance cost

The Group's finance cost for the six-month period ended 31 March 2014 was £3.2 million compared to nil in the six-month period ended 31 March 2013. The finance cost of £3.2 million is a consequence of the 5 percent unsecured convertible loan notes issued in August and September 2013 and comprises: £1.9 million for the accrual for rolled up interest, £0.6 million of fundraising costs expensed and £0.7 million expensed for funds raised but not received.

Gain on disposal of subsidiary

In the six-month period ended 31 March 2014 the gain on disposal of joint venture/subsidiary was £1.0 million compared with nil in the six months ended 31 March 2013. The gain arose on the disposal of the Group's investment in IE LEV Limited on 28 February 2014 and is calculated as proceeds of £1.4 million less costs of £0.4 million. The carrying value of the investment on disposal was nil.

Loss before tax

In the six-month period ended 31 March 2014, the Group's loss before tax was £22.1 million, compared to a loss before tax of £11.9 million in the six-month period ended 31 March 2013 (an increase of 86 percent).

Income tax

In the six-month period ended 31 March 2014, the Group recorded an income tax net credit of £4.9 million, being 22.2 percent of loss before tax, which compares to an income tax net credit of £3.0 million in the six-month period ended 31 March 2013, being 25.2 percent of loss before tax. The reduction in the percentage of the net tax credit in the six-month period ended 31 March 2014 is principally as a result of expenses not deductible for tax purposes in that period, which relate to the raising of finance.

(Loss)/profit for the period

For the six-month period ended 31 March 2014, the Group made a loss of £17.2 million. For the six-month period ended 31 March 2013, the Group made a loss of £8.9 million.

(b) Year ended 30 September 2013 compared to year ended 30 September 2012

Revenue

Revenue for the year ended 30 September 2013 was £20.9 million, comprising revenue from licencing of £8.0 million and from the rendering of services of £12.8 million. This is a decrease of 52 percent from revenue for the year ended 30 September 2012 of £43.9 million, comprising revenue from licencing of £37.0 million and from the rendering of services of £6.9 million.

The year-on-year decrease in revenue reflects the planned lower level of Suzuki licence revenue in the year ended 30 September 2013 compared with the prior year, although joint development and engineering services revenue increased compared with the prior year. This reflected ongoing activity within the Motive Division and included joint development agreements with a number of major motor manufacturers, including Suzuki, as well as grant revenue from projects under the UK Government's Technology Strategy Board and the HyTEC programme funded by the Joint Technology Initiative of the European Union.

While commercialisation activity progressed in the CE and DP&G Divisions, revenue from these divisions was not material in either year.

Cost of sales

The Group's cost of sales for the year ended 30 September 2013 was £13.5 million, which was 24 percent lower than the previous year, when cost of sales was £17.8 million. Cost of sales in the period reflects labour costs and the costs of materials. This movement in the cost of sales was principally as a result of the overall reduction in revenue combined with the changing mix of revenues between revenue from licensing and revenue from the rendering of services.

Gross profit

The Group's gross profit for the year ended 30 September 2013 was £7.3 million, down from £26.1 million in the previous financial year and was 35 percent of revenue in the year ended 30 September 2013 as compared with 59 percent of revenue in the previous year. The reduction in the margin reflects the change in the mix of revenue, principally a reduction in the high margin licence revenue.

Research and development expenses

The Group's research and development expenses for the year ended 30 September 2013 amounted to £13.9 million, a 5 percent increase from £13.3 million the previous year. This reflected the continued activity in developing products for sale by the CE and DP&G Divisions and ongoing development of technology.

Administration expenses

The Group's administration expenses amounted to £20.2 million for the year ended 30 September 2013, a 67 percent increase from £12.1 million the previous year. The principal reason for this increase was the increase in headcount to gear up the new CE and DP&G activities prior to their respective commercial launches. The cost base also increased as a result of opening a representative office in Japan in 2012.

Trading (loss)/profit

For the financial year ended 30 September 2013, the Group had a trading loss of £26.7 million. The previous financial year, the Group had a trading profit of £0.6 million.

Share of loss of joint ventures

For the financial year ended 30 September 2013, the Group's share of loss of joint ventures net of tax was £2.5 million, a 150 percent increase over the £1.0 million loss the previous financial year. The losses did not relate to trading activities but instead to the costs of developing joint venture activities. The principal reasons for the increase were the net costs of the SMILE FC Corporation joint venture with Suzuki for activities in connection with ready-to-scale production and the cost of planning activities at IE-CHP (UK & Eire) Limited.

Operating loss

The Group's operating loss in the year ended 30 September 2013 was £29.2 million, which compares to a loss of £0.4 million the previous financial year.

Finance income

The Group's finance income for the year ended 30 September 2013 was £0.1 million, unchanged from the previous financial year.

Finance cost

The Group's finance cost for the year ended 30 September 2013 was £0.7 million, a 30 percent decrease from £1.0 million the previous financial year. Although the Group paid more in interest on bank overdrafts, this was more than off-set by the absence of accrued interest on convertible loan notes that were issued on 3 July 2009 and were converted to equity on 3 July 2012.

Gain on disposal of subsidiary

From 1 February 2012, the Group ceased to exert control over IE LEV Limited. As a result there was a gain upon deconsolidation of £0.4 million during the financial year ended 30 September 2012.

Loss before tax

In the financial year ended 30 September 2013, the Group's loss before tax was £29.8 million, compared to a loss before tax of £0.9 million the previous year.

Income tax

In the financial year ended 30 September 2013, the Group recorded an income tax net credit of £8.8 million, which compares to an £8.7 million tax net credit the previous financial year.

In the year ended 30 September 2013, this amount included a tax credit of £6.6 million in respect of current and prior year R&D tax credits, compared to a corresponding amount of £2.0 million for the year ended 30 September 2012. R&D tax credits are payable to the taxpayer in cash after filing and agreeing annual tax returns with UK HM Revenue and Customs.

The balance of the net income tax credit amounts related to a credit of £2.4 million in respect of deferred tax in the year ended 30 September 2013 and £6.7 million in the year ended 30 September 2012 and a foreign income tax charge of £0.2 million in the year ended 30 September 2013. In the year ended 30 September 2012, £6.7 million of previously unrecognised deferred tax assets were recognised as the Directors considered it probable that future taxable profits would be available against which they can be utilised. The Directors revised their estimates following the significant improvements in the results of the Group's main trading subsidiary, Intelligent Energy Limited.

The Directors did not recognise a deferred tax asset relating to losses of £1.6 million as at 30 September 2013 (£3.1 million as at 30 September 2012) as its recoverability was still in doubt because a trend of profitable growth in the relevant subsidiaries had not been fully established.

(Loss)/profit for the period

For the financial year ended 30 September 2013, the Group made a loss of £21.0 million. For the financial year ended 30 September 2012, the Group made a profit of £7.8 million.

(c) Year ended 30 September 2012 compared to year ended 30 September 2011

Revenue

For the year ended 30 September 2012, the Group's revenue was £43.9 million, an increase from £11.9 million in the previous financial year.

In the year ended 30 September 2012, £37.0 million (or 84 percent) of the Group's revenue came from the recognition of licencing income under the Group's arrangements with Suzuki. In the year ended 30 September 2011, none of the Group's revenue was from the Suzuki agreement or from licensing.

In the year ended 30 September 2012, £6.9 million (or 16 percent) of the Group's revenue came from rendering of services, a 42 percent decrease from the previous year, when revenue from rendering of services was £11.9 million (being 100 percent of revenue). This reflected ongoing activity within the Motive Division and included joint development agreements with a number of major motor manufacturers, including Suzuki, as well as grant revenue from projects under the UK Government's Technology Strategy Board and the HyTEC programme funded by the Joint Technology Initiative of the European Union.

Cost of sales

The Group's cost of sales for the year ended 30 September 2012 was £17.8 million, which was 58 percent higher than the previous year, when cost of sales was £11.3 million. This change was principally as a result of the increase in overall revenue and the change in the mix of revenues between revenue from licensing and revenue from the rendering of services.

Gross profit

The Group's gross profit for the year ended 30 September 2012 was £26.1 million, up from £0.6 million in the previous financial year. Gross profit was 59 percent of revenue in the year ended 30 September 2012 and 5 percent of revenue in the previous year. The increase in margin reflects a change in the mix of revenue to include high margin licence revenue.

Research and development expenses

The Group's research and development expenses for the year ended 30 September 2012 amounted to £13.3 million, a 122 percent increase from £6.0 million the previous year. The year-on-year increase reflects the commencement of product design in the Consumer Electronics Division and higher levels of activity in all other research and development areas.

Administration expenses

The Group's administration expenses for the financial year ended 30 September 2012 amounted to £12.1 million, a 26 percent increase from £9.6 million on the previous financial year. The principal reasons for the increase were the higher levels of activity to support the new business divisions, the opening of a representative office in Japan and increased depreciation.

Trading (loss)/profit

For the financial year ended 30 September 2012, the Group had a trading profit of £0.6 million. The previous financial year, the Group had a trading loss of £15.0 million.

Share of loss of joint ventures

For the financial year ended 30 September 2012, the Group's share of loss of joint ventures net of tax was £1.0 million, a significant increase over the £0.3 million loss the previous financial year. The losses did not relate to trading activities but instead to the costs of establishing and developing joint venture activities.

On 1 November 2011, the Group and Suzuki Motor Corporation set up a 50:50 joint venture, SMILE Systems Corporation. In the year ended 30 September 2012, the Group's share of these losses was £0.6 million; and in the prior year it was nil.

Operating loss

The Group's operating loss for the year ended 30 September 2012 was £0.4 million, which compares to a loss of £15.3 million the previous financial year.

Net finance cost

The Group's finance income for the year ended 30 September 2012 was £0.1 million compared to nil in the previous financial year.

The Group's finance cost for the year ended 30 September 2012 was £1.0 million, a 17 percent decrease from £1.2 million the previous financial year. These amounts in both years principally represent accrued interest on convertible loan notes issued in 3 July 2009, which were converted to Ordinary Shares on 3 July 2012.

Gain on disposal of subsidiary

From February 1, 2012, the Group ceased to exert control over IE LEV Limited. As a result there was a gain upon deconsolidation of £0.4 million during the financial year ended 30 September 2012.

Loss before tax

In the financial year ended 30 September 2012, the Group's loss before tax was £0.9 million, compared to a loss before tax of £16.5 million the previous year.

Income tax

In the financial year ended 30 September 2012, the Group recorded a net tax credit of £8.7 million. This comprised R&D tax credits of £2.0 million and a deferred tax credit of £6.7 million which arose because a deferred tax asset (principally in respect of tax losses) was recognised for the first time in the year.

In the financial year ended 30 September 2011, the Group reported a net tax credit of £1.2 million which related to R&D tax credits.

(Loss)/profit for the period

For the financial year ended 30 September 2012, the Group made a profit of £7.8 million. For the financial year ended 30 September 2011, the Group made a loss of £15.2 million.

6. Liquidity and capital resources

Overview

The Group's principal sources of liquidity are proceeds from the subscription of Ordinary Shares, including the Offer, and cashflows generated from operations (principally receipts in respect of licence revenue and grant income). In the past, a principal source of revenue has also been proceeds from the subscriptions of unsecured convertible loan notes.

In the period under review, the Group has received subscriptions in respect of Ordinary Shares and unsecured convertible loan notes as follows.

In the six months ended 31 March 2014, the Company issued new Ordinary Shares to the Government Investment Company of Singapore for 10 percent of the enlarged share capital in return for consideration before costs of £37.8 million (and £36.7 million after costs).

In the year ended 30 September 2013, the Company issued 5 percent unsecured convertible loan notes due 2017 for £32.5 million before costs and £30.3 million net of costs of £2.2 million. At 30 September 2013, £5.0 million of irrevocable subscriptions in respect of the loan notes had not been received and was included in debtors in the Group statement of financial position.

In the year ended 30 September 2013, the Group also issued new Ordinary Shares on the exercise of employee share options generating £1.5 million.

In the year ended 30 September 2012, the Company issued new Ordinary Shares to investors and on exercise of employee share options for consideration of £25.4 million before costs and £24.7 million after costs.

In the year ended 30 September 2011, the Company issued new Ordinary Shares for consideration of £19.4 million before costs and £19.0 million after costs.

The Group's ability to generate cash from its operations depends on its future operating performance, which will be affected by its ability to launch new products successfully, and, to some extent, general economic, financial, competitive, market, regulatory and other factors, as well as other factors discussed in the section of this Prospectus headed "Risk Factors".

As at 31 March 2014, the Group had gross cash and cash equivalents of £54.2 million. In addition, as at this date, the Group recorded the liability component of the 5 percent unsecured convertible loan notes as £19.2 million. In accordance with IFRS in respect of compound financial instruments, the convertible loan notes are accounted for by separately identifying the liability component and the equity component (in respect of the option to convert into Ordinary Shares). The liability element is less than the cash proceeds received by the Company on issue of the loan notes.

As at 31 May 2014, the Group had gross cash and cash equivalents of £45.7 million. In addition, as at this date, the principal value outstanding on the 5 percent unsecured convertible loan notes was £30,190,831. The Group recorded the liability component of the 5 percent unsecured convertible loan notes as £19.9 million. In accordance with IFRS in respect of compound financial instruments, the convertible loan notes are accounted for by separately identifying the liability component and the equity components (in respect of the option to convert into Ordinary Shares). The liability element is less than the cash proceeds received by the Company on issue of the loan notes.

On or around Admission, the Company intends to (a) use £3,640,640 to satisfy the tax liabilities of 2013 Management Incentive Plan Awardholders (other than John Maguire) arising in respect of Award Shares vesting under the 2013 Management Incentive Plan on Admission, in lieu of issuing a portion of the Award Shares to such awardholders; and (b) use £696,981 to settle in cash all Award Shares vesting in favour of John Maguire under the 2013 Management Incentive Plan on Admission (including to satisfy applicable tax liabilities), all of which will be funded from existing cash resources.

Borrowings

The Group has historically been funded predominantly from equity investments made primarily by institutional shareholders and from the cash receipts in respect of revenues generated by the Motive Division. Save for the 5 percent unsecured convertible loan notes due 2017 (details of which are set out in paragraph 11.8 of Part VIII "Additional Information" of this Prospectus), the Group has no financial indebtedness. Furthermore, the loan notes will convert into equity concurrently with Admission.

The Board keeps the Group's sources of finance under review. The Group does not intend to have any borrowings or committed borrowing facilities in place at Admission.

Historical cash flows

The following table sets out historical cash flows for the periods indicated:

2014	2013	2013	2012	2011
£'000	£'000	£'000	£'000	£'000
(12,973)	(17,521)	(20,091)	10,571	(15,122)
				(1,682)
36,653	344	26,821	24,656	18,762
				1,958
				(153)
31,626	29,867	29,867	6,342	4,537
54,185	10,148	31,626	29,867	6,342
	(1,121) 22,559 —	six months to 31 March (unaudited) (2,551) (19,728) 9	(5,009) 1,721 38	Year to 30 September (12,018) 23,209 316

Net cash flows from operating activities

In the six-month period ended 31 March 2014, net cash flows from operating activities increased to a net cash outflow of £13.0 million compared with a net cash outflow of £17.5 million in the six-month period ended 31 March 2013. The outflow in the six-month period ended 31 March 2014 increased as a result of the increase in loss for the period to £17.3 million from £8.9 million in the six-month period ended 31 March 2013. In the six months ended 31 March 2014, the cash outflow reduced in respect of the financing expense of £3.2 million. This resulted from an expense being recorded in the income statement for accrued and rolled up interest on the loan note issue in 2013 which expense was not paid in cash in the period.

In the year ended 30 September 2013, net cash flows from operating activities reduced by £30.7 million to an outflow of £20.1 million from an inflow of £10.6 million in the year ended 30 September 2012. The principal reason was the reduction in trading profit. As previously stated, licence revenue from Suzuki peaked in the year ended 30 September 2012 at £37.0 million compared with £8.0 million in the year ended 30 September 2013. In addition, a further component of the decrease in net cash flows from operating activities relates to the year-on-year cashflow impact of changes in trade and other payables of £7.8 million. This was partially offset by an increase in the net cash inflows from taxation of £3.3 million in the year ended 30 September 2013 compared with £1.5 million in the previous year. Tax credits are typically paid to the Company during the financial year following the year in which they are recognised in the income statement.

In the year ended 30 September 2012, net cash flows from operating activities increased by £25.7 million to an inflow of £10.6 million from an outflow of £15.1 million in the year ended 30 September 2011. The principal reason was the improvement in operational performance, including the income from Suzuki. In addition, the cash flow impact of the movement in trade and other payables resulted in a year-on-year cash increase of £6.9 million of which £4.2 million related to the changes in accruals and deferred income that arose as a consequence of the difference between revenue recognised in the Group income statement and cash receipts.

In the year ended 30 September 2011, net cash outflow from operating activities was £15.1 million, which is in line with the Group's loss of £15.2 million in that financial year.

Net cash flows used in investing activities

For the six months ended 31 March 2014, the Group's net cashflow used in investing activities was £1.1 million. The principal components were cash outflows of £1.2 million and £1.1 million for the acquisition of fixed assets and intangible assets (including the acquisition of a portfolio of patents), respectively, and a net cash inflow of £1.1 million on the disposal of the Group's investment in IE LEV Limited. For the six months ended 31 March 2013, the Group's net cashflow used in investing activities was £2.6 million. The principal components were cash outflows of £2.0 million and £0.6 million for the acquisition of fixed assets and intangible assets respectively.

For the financial year ended 30 September 2013, the Group's net cash flow used in investing activities was £5.0 million. The principal component of that amount was payments of £3.8 million to acquire tangible fixed assets (mainly plant, machinery and equipment) and £1.2 million to acquire intangible assets.

For the financial year ended 30 September 2012, the Group's net cash flow used in investing activities was £12.0 million. The main components of that amount were the Group's £6.2 million investment in the SMILE FC System Corporation joint venture and £5.4 million for tangible fixed assets (mainly plant, machinery and equipment).

For the financial year ended 30 September 2011, the Group's net cash flow used in investing activities was £1.7 million, principally in respect of fixed asset additions.

Net cash flows from financing activities

In the six-month period ended 31 March 2014, the Group's net cash inflow from financing activities was £36.7 million, comprising the issue of new Ordinary Shares. This was principally in respect of the issuance of new Ordinary Shares to the Government Investment Company of Singapore for ten percent of the enlarged share capital. In the six-month period ended 31 March 2013, the Group's net cash inflow from financing activities was £0.3 million.

In the financial year ended 30 September 2013, the Group's net cash inflow from financing activities was £26.8 million, comprising £1.5 million from the exercise of share options and £25.3 million in respect of the issuance of 5 percent unsecured convertible loan notes due 2017. A further £5.0 million in respect of irrevocable undertakings to subscribe for the unsecured convertible loan notes had not been received at 30 September 2013 and was, therefore, included in other receivables on the Group statement of financial position. (At 31 March 2014, £3.0 million of the £5.0 million had been received.)

In the financial year ended 30 September 2012, the Group's net cash inflow from financing activities was £24.7 million, which represented the proceeds from the issuance of Ordinary Shares.

In the financial year ended 30 September 2011, the Group's net cash inflow from financing activities was £18.8 million, which represented the proceeds from the issuance of Ordinary Shares.

Contractual obligations

The following table sets out as at 31 March 2014 a summary of the Group's key contractual commitments:

	less than		Greater than
	1 year	2–5 years	5 years	total
	£'000	£'000	£'000	£'000
Trade payables	2,161	—	—	2,161
Unsecured loan notes due 2017(1)	—	19,178(2)	—	19,178
Operating lease commitments	1,002	2,512	505	4,019

Notes:

(1) The convertible loan notes will be converted to equity concurrently with Admission.

(2) In accordance with IFRS in respect of compound financial instruments, the convertible loan notes are accounted for by separately identifying the liability component and the equity components (in respect of the option to convert into Ordinary Shares). The liability element is less than the cash proceeds received by the Company on issue of the loan notes.

The terms of the 5 percent unsecured convertible loan notes due 2017 are summarised in paragraph 11.8 of Part VIII "Additional Information". The loan notes will be converted to equity concurrently with Admission.

The Group has no material commitment for capital expenditure. One of the Group's principal uses of funds is to finance the roll-out of operations in the CE and DP&G Divisions. To fund the capital programme for the roll out of generating capacity in India by the DP&G Division, the Group will use existing cash resource, including proceeds of the Offer, and asset-backed finance facilities. To fund the CE product launch, the Group will use existing cash resources including proceeds of the Offer. The Group's business plan gives the Group flexibility in deploying its capital resources amongst its different divisions and projects and the amount and timing of such deployment.

Off-balance sheet arrangements

The Group has entered into commercial operating leases on several properties and items of office and laboratory equipment. There is no other off-balance sheet arrangement.

Qualitative and quantitative disclosure about financial risks

The Group's finance team is responsible for managing exposure to finance risks and operates policies set and approved by the board of Directors. The Directors monitor the Group's financial affairs through regular reviews of financial and cash flow results and forecasts. The main risks associated with the Group's financial assets and liabilities are set out below.

Credit risk

The Group's credit risk is predominantly with major multinational original equipment manufacturing companies, based in Europe and Japan, so the Group considers the risk to be low. There is no major concentration of credit risk, save for a significant amount of cash funds placed with one of the major UK clearing banks. The Group has not entered into any contract for derivative instruments.

Foreign currency risk

The Group has a translational exposure in respect of the net assets of overseas operations denominated in foreign currencies. Because the Group has historically transacted primarily in Sterling, the Group considers its exposure to foreign currency risk has been low. The Group does not currently hedge its foreign currency exposure. In the future, the Group may enter into currency hedging arrangements, if the Directors believe it to be appropriate.

As the Group's international business expands, the Group expects that its exposure to foreign currency risk will increase. The Company expects CE revenue to be mostly in US dollars. Because CE expenses (mostly contract manufacturing) are also expected to be in dollars, there is likely to be a natural hedge. Similarly, the Company expects DP&G revenues to be mostly in rupees, and because DP&G revenues are expected to be in rupees, there is also likely to be a natural hedge. In both cases, translational risk remains.

Interest rate risk

The Group has issued convertible loan notes. The interest rate is five percent annually. Interest is rolled up. Because this is a fixed rate, the Group consider the interest rate risk to be low.

Liquidity risk

The Group maintains adequate liquid funds to match contractual cash flows, with surplus funds being placed on short-term interest-bearing deposit.

7. Critical accounting policies, estimates and judgments

The Group's critical accounting policies, estimates and judgments are described in note 5 to the Historical Financial Information included in Part V "Historical Financial Information" of this Prospectus.

However, certain of the Group's accounting policies are particularly important to the presentation of its results of operations and require the application of significant judgment by its management. In applying these policies, management uses its judgment about future events to determine appropriate assumptions to be used in the determination of certain estimates used in the preparation of the Group's results of operations. Future events and their effects cannot be determined with certainty. These estimates are based on previous experience, the terms of existing contracts, information provided by customers, current and future expected economic conditions, information available from outside sources and other factors as appropriate.

The Directors believe that, amongst others, the following accounting policies that involve management judgments and estimates are the most critical to understanding and evaluating the Group's reported financial results.

The preparation of financial statements requires management to make estimates and assumptions that affect the amounts reported for assets and liabilities as at the statement of financial position date and the amounts reported for revenue and expenses during the year. The nature of estimation means that actual outcomes could differ from those estimates. The key sources of estimation uncertainty are as follows:

(a) Contract revenue

The Group measures revenue on contracts using the stage of completion method, to ascertain the appropriate revenue to recognise during a contract. Estimating the stage of completion is measured by reference to the cost of labour hours and materials incurred as a percentage of total estimated cost of labour hours and materials.

(b) Share-based payments

The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. Estimating fair value requires the determination of the most appropriate valuation model for a grant of equity instruments, which is dependent on the terms and conditions of the grant. This also requires determining the most appropriate inputs to the valuation model including the expected life of the option, volatility and dividend yield and making assumptions about them.

(c) Impairment of non-financial assets

The Group assesses whether there are any indicators of impairment for all non-financial assets at each reporting date. Goodwill is tested for impairment annually and at other times when such indicators exist. Other non-financial assets are tested for impairment when there are indicators that the carrying amounts may not be recoverable. When value in use calculations are undertaken, management must estimate the expected future cash flows from the asset or cash-generating unit and choose a suitable discount rate in order to calculate the present value of those cash flows.

(d) Deferred tax assets

The recognition of deferred tax assets relating to the carry forward of unused tax losses and unused tax credits requires the assessment of the extent to which it is probable that future taxable profits will be available against which the unused tax losses and tax credits can be utilised. Given the history of tax losses of the Group, it is required that there is convincing other evidence that sufficient taxable profits will be available against which the unused tax losses or unused tax credits can be utilised. This requires judgment on the part of the Directors.

The Directors have therefore assessed whether, in their opinion, the recovery of the deferred tax assets is probable, and whether convincing evidence exists to justify this assessment. This assessment is based on the forecasts for the business, which are in turn based in part on known advances in the commercial viability of the Group's businesses.

(e) Operating lease commitments

The Group has entered into commercial property leases; as a lessee it obtains the use of property, plant and equipment. The classification of such leases as operating or finance lease requires the Group to determine, based on an evaluation of the terms and conditions of the arrangements, whether it retains or acquires the significant risks and rewards of ownership of these assets and accordingly whether the lease requires an asset and liability to be recognised in the statement of financial position.

(f) Fair value of convertible loan notes

The Group has issued convertible loan notes. These convertible loan notes comprise both a liability and an equity element. The equity element is calculated as the net proceeds receivable after deducting the liability element of the convertible loan notes.

The liability element of the convertible loan notes is calculated by discounting the cash flows of the instruments at an interest rate that would be available in the market for an equivalent financial liability. The estimation of this interest rate requires judgment on the part of the Directors.

(g) Development costs

Development costs are capitalised in accordance with the accounting policy in Note 6.5 to the Historical Financial Information included in this Prospectus. Initial capitalisation of costs is based on management's judgment that technological and economic feasibility is confirmed. In determining the amounts to be capitalised, management makes assumptions regarding the expected future cash generation of the assets, discount rates to be applied and the expected period of benefits. To date, no development costs have been capitalised.

8. New accounting pronouncements

A description of changes to accounting policies and disclosures is set out in Note 3 of the Historical Financial Information included in Part V "Historical Financial Information" of this Prospectus. New and revised IFRS standards have not had a material effect on the Group's financial statements. IFRS standard amendments that will apply in the future are not expected to have a significant effect on financial statements.

PART IV

CAPITALISATION AND INDEBTEDNESS

The following tables show the Group's consolidated capitalisation as at 31 March 2014 and indebtedness as at 30 April 2014.

This section should be read together with Part III "Operating and Financial Review" and Part V "Historical Financial Information" of this Prospectus.

Indebtedness

	as at
	30 April
	2014
	£'000
Total current debt	—
Guaranteed	—
Secured	—
unsecured/unguaranteed	—
Total non-current debt	(19,524)
Guaranteed	—
Secured	—
unsecured/unguaranteed	(19, 524)
Total debt as at 30 April 2014	(19, 524)

Note:

The Company issued unsecured convertible loan notes in the period August to September 2013. In accordance with IFRS in respect of compound financial instruments, the convertible loan notes are accounted for by separately identifying the liability component and the equity components (in respect of the option to convert into Ordinary Shares). The liability element is less than the cash proceeds received by the Company on issue of the loan notes.

Capitalisation

	as at
	31 March
	2014
	£'000
Equity share capital	7,566
Share premium	130,678
Equity component of convertible loan notes	9,652
Merger reserve	29,277
Foreign currency translation reserve	(1,616)
Retained earnings	(112,454)
	63,103

There has been no material change to the Company's capitalisation since 31 March 2014.

Net financial indebtedness

The following table details the net financial indebtedness of the Group as at 30 April 2014.

		as at 30 April 2014 £'000
A	Cash	51,655
B C	Cash equivalent Trading securities	— —
D	Liquidity = (A) + (B) + (C)	51,655
E	Current Financial Receivable	—
F G H	Current bank debt Current portion of non-current debt Other current financial debt	— — —
I	Current Financial Debt = (F) + (G) + (H)	—
J	Net Current Financial Indebtedness = (I) - (E) - (D)	51,655
K L M	Non-current bank loans Bonds issued (see notes below) Other non-current loans	— (19,524) —
N	Non-Current Financial Indebtedness = (K) + (L) + (M)	(19,524)
O	Net Financial indebtedness = (J) + (N)	32,131

The Group had no indirect or contingent indebtedness as at 30 April 2014.

Notes:

The figures for shareholders' equity have been extracted without material adjustment from the Group audited financial statements for the period ended 31 March 2014.

The Company issued unsecured convertible loan notes in the period August to September 2013. In accordance with IFRS in respect of compound financial instruments, the convertible loan notes are accounted for by separately identifying the liability component and the equity components (in respect of the option to convert into Ordinary Shares). The liability element is less than the cash proceeds received by the Company on issue of the loan notes.

Interest compounds annually at 5 percent and is rolled up into the value of the loan notes held.

The unsecured convertible loan notes and accrued interest are, at the option of the holder at any time up to maturity, convertible into Ordinary Shares of the Company at a conversion price of 250 pence of nominal value of unsecured convertible loan notes for each new Ordinary Share in the Company. In the event of certain key liquidity events (such as a stock market listing or takeover offer) the unsecured convertible loan notes will automatically convert at the lower of 250 pence and the flotation or offer price, as the case may be.

PART V

HISTORICAL FINANCIAL INFORMATION

ACCOUNTANT'S REPORT ON HISTORICAL FINANCIAL INFORMATION

The Directors Intelligent Energy Holdings plc Charnwood Building Holywell Park Ashby Road Loughborough LE11 3GB

Dear Sirs

Intelligent Energy Holdings plc (the 'Company')

We report on the consolidated financial information set out on pages 98 to 104 for the three years to 30 September 2013 and the six month period to 31 March 2014. This financial information has been prepared for inclusion in the prospectus dated 4 July 2014 of Intelligent Energy Holdings plc on the basis of the accounting policies set out in Notes 1 to 6. This report is required by paragraph 20.1 of Annex I of the Prospectus Directive Regulation and is given for the purpose of complying with that paragraph and for no other purpose. We have not audited or reviewed the financial information for the six months ended 31 March 2013 which has been included for comparative purposes only, and accordingly do not express an opinion thereon.

Responsibilities

The Directors of the Company are responsible for preparing the financial information on the basis of preparation set out in Note 2 to the Historical Financial Information and in accordance with International Financial Reporting Standards as adopted by the European Union.

It is our responsibility to form an opinion on the financial information and to report our opinion to you.

Save for any responsibility arising under Prospectus Rule 5.5.3R (2)(f) to any person as and to the extent there provided, to the fullest extent permitted by law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with this report or our statement, required by and given solely for the purposes of complying with paragraph 23.1 of Annex I of the Prospectus Directive Regulation, consenting to its inclusion in the prospectus.

Basis of opinion

We conducted our work in accordance with Standards for Investment Reporting issued by the Auditing Practices Board in the United Kingdom. Our work included an assessment of evidence relevant to the amounts and disclosures in the financial information. It also included an assessment of the significant estimates and judgments made by those responsible for the preparation of the financial information and whether the accounting policies are appropriate to the entity's circumstances, consistently applied and adequately disclosed.

We planned and performed our work so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial information is free from material misstatement whether caused by fraud or other irregularity or error.

Opinion

In our opinion, the consolidated financial information gives, for the purposes of the prospectus dated 4 July 2014, a true and fair view of the state of affairs of Intelligent Energy Holdings plc as at 30 September 2011, 30 September 2012, 30 September 2013 and 31 March 2014 and of its Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated Statement of Financial Position, Consolidated Statement of Cash Flows and Consolidated Statement of Changes in Equity for the periods then ended in accordance with the basis of preparation set out in note 2 and in accordance with International Financial Reporting Standards as adopted by the European Union.

Declaration

For the purposes of Prospectus Rule 5.5.3R (2)(f) we are responsible for this report as part of the prospectus and declare that we have taken all reasonable care to ensure that the information contained in this report is, to the best of our knowledge, in accordance with the facts and contains no omission likely to affect its import. This declaration is included in the prospectus in compliance with paragraph 1.2 of Annex I of the Prospectus Directive Regulation.

KPMG LLP

Chartered Accountants 31 Park Row Nottingham NG1 6FQ 4 July 2014

CONSOLIDATED INCOME STATEMENT

	6 months to 31 March		Year to 30 September
	Notes	2014 £000	2013 £000 (unaudited)	2013 £000	2012 £000	2011 £000
Revenue	7	3,505	12,660	20,846	43,852	11,869
Cost of sales		(2,606)	(6,482)	(13,497)	(17,760)	(11,292)
Gross profit		899	6,178	7,349	26,092	577
Research and development expenses		(8,320)	(8,052)	(13,878)	(13,326)	(5,980)
Administration expenses		(11,687)	(8,704)	(20,159)	(12,148)	(9,557)
Trading (loss)/profit		(19,108)	(10,578)	(26,688)	618	(14,960)
Share of loss of joint ventures accounted for using the equity
method – net of income tax	18	(840)	(1,341)	(2,514)	(1,026)	(344)
Operating loss	8	(19,948)	(11,919)	(29,202)	(408)	(15,304)
Finance income	11a	55	44	116	77	23
Finance cost	11b	(3,217)	(3)	(664)	(1,031)	(1,188)
Gain on disposal of joint
venture/subsidiary	12	983	—	—	420	—
Loss before tax		(22,127)	(11,878)	(29,750)	(942)	(16,469)
Income tax	13	4,909	2,985	8,798	8,740	1,232
(Loss)/profit for period		(17,218)	(8,893)	(20,952)	7,798	(15,237)
Attributable to:
Owners of the parent		(17,218)	(8,893)	(20,952)	7,394	(14,833)
Non-controlling interests	14	—	—	—	404	(404)
		(17,218)	(8,893)	(20,952)	7,798	(15,237)

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

	6 months to 31 March		Year to 30 September
	2014 £000	2013 £000 (unaudited)	2013 £000	2012 £000	2011 £000
(Loss)/profit for the period Other comprehensive income; Items that are or may be subsequently reclassified to profit or loss Exchange (loss)/gain on retranslation	(17,218)	(8,893)	(20,952)	7,798	(15,237)
of foreign operations	(1,362)	(41)	59	270	(146)
Comprehensive (expense)/income for the period	(18,580)	(8,934)	(20,893)	8,068	(15,383)
Attributable to: Owners of the parent Non-controlling interests	(18,580) —	(8,934) —	(20,893) —	7,664 404	(14,979) (404)
	(18,580)	(8,934)	(20,893)	8,068	(15,383)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

		At 31 March At 30 September
	Notes	2014 £000	2013 £000 (unaudited)	2013 £000	2012 £000	2011 £000
Non-current assets
Property, plant and equipment	15	5,170	4,709	5,282	4,304	2,310
Intangible assets	16	10,093	9,053	9,455	8,762	7,222
Investments accounted for
using the equity method	18	1,618	5,078	3,821	6,420	1,212
Other receivables	20	1,822	—	—	—	—
Deferred tax asset	13	12,022	7,717	9,158	6,715	—
		30,725	26,557	27,716	26,201	10,744
Current assets
Inventories	19	2,412	1,624	1,530	1,155	1,021
Trade and other receivables	20	6,091	15,434	13,291	6,362	4,580
Cash and cash equivalents	21	54,185	10,148	31,626	29,867	6,342
		62,688	27,206	46,447	37,384	11,943
Total assets		93,413	53,763	74,163	63,585	22,687
Current liabilities
Trade and other payables	22	(8,863)	(8,207)	(8,614)	(9,448)	(2,405)
Liability component of
convertible loan notes	23	—	—	—	—	(14,526)
		(8,863)	(8,207)	(8,614)	(9,448)	(16,931)
Non-current liabilities
Deferred tax liability	13	(2,239)	—	(2,600)	—	—
Liability component of
convertible loan notes	23	(19,178)	—	(18,530)	—	—
Other non-current liabilities		(30)	—	—	—	—
		(21,447)	—	(21,130)	—	—
Total liabilities		(30,310)	(8,207)	(29,744)	(9,448)	(16,931)
Net assets		63,103	45,556	44,419	54,137	5,756
Capital and reserves
Equity share capital	25	7,566	6,658	6,807	6,639	5,316
Share premium		130,678	93,773	94,784	93,448	54,558
Equity component of
convertible loan notes		9,652	—	9,652	—	691
Merger reserve		29,277	29,277	29,277	29,277	29,277
Foreign currency
translation reserve		(1,616)	(354)	(254)	(313)	(583)
Retained earnings		(112,454)	(83,798)	(95,847)	(74,914)	(83,099)
Equity attributable to
owners of the Company		63,103	45,556	44,419	54,137	6,160
Non-controlling interests		—	—	—	—	(404)
Total equity		63,103	45,556	44,419	54,137	5,756

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

	Equity share capital £000	£000	Equity component of Share convertible premium loan notes £000	reserve £000	Foreign currency Merger translation reserve £000	Retained earnings £000	Equity attributable to owners Company £000	Non of the controlling interests £000	Total equity £000
Balance at 1 October 2010 Total comprehensive income for the year:	4,344	36,515	691	29,277	(437)	(68,375)	2,015	—	2,015
Loss for the year Total other	—	—	—	—	—		(14,833) (14,833)		(404) (15,237)
comprehensive income Transactions with owners of the Company, recognised directly in equity:	—	—	—	—	(146)	—	(146)		(146)
Shares issued Share issue costs Contributions by and distributions to owners of the Company: Share-based	972 —	18,380 (337)	— —	— —	— —	— —	19,352 (337)	— —	19,352 (337)
payment transactions	—	—	—	—	—	109	109	—	109
Balance at 30 September 2011	5,316	54,558	691	29,277	(583)	(83,099)	6,160	(404)	5,756
Balance at 1 October 2011 Total comprehensive income for the year:	5,316	54,558	691	29,277	(583)	(83,099)	6,160	(404)	5,756
Profit for the year Total other	—	—	—	—	—	7,394	7,394	404	7,798
comprehensive income Transactions with owners of the Company, recognised directly in equity:	—	—	—	—	270	—	270	—	270
Shares issued	647	24,746	—	—	—	—	25,393	—	25,393
Share issue costs Conversion of	—	(737)	—	—	—	—	(737)	—	(737)
convertible bond Contributions by and distributions to owners of the Company: Share-based	676	14,881	(691)	—	—	691	15,557	—	15,557
payment transactions	—	—	—	—	—	100	100	—	100
Balance at 30 September 2012	6,639	93,448	—	29,277	(313)	(74,914)	54,137	—	54,137

	Equity share capital £000	£000	Equity component of Share convertible premium loan notes £000	reserve £000	Foreign currency Merger translation reserve £000	Retained earnings £000	Equity attributable to owners Company £000	Non of the controlling interests £000	Total equity £000
Balance at 1 October 2012 Total comprehensive	6,639	93,448	—	29,277	(313)	(74,914)	54,137	—	54,137
income for the year: Loss for the year Total other	—	—	—	—	—		(20,952) (20,952)	—	(20,952)
comprehensive income Transactions with owners of the Company, recognised directly in equity:	—	—	—	—	59	—	59	—	59
Shares issued	168	1,336	—	—	—	—	1,504	—	1,504
Issue of convertible loan notes Contributions by and distributions to owners of the Company: Share-based	—	—	9,652	—	—	—	9,652	—	9,652
payment transactions	—	—	—	—	—	19	19	—	19
Balance at 30 September 2013	6,807	94,784	9,652	29,277	(254)	(95,847)	44,419	—	44,419
(Unaudited) Balance at 1 October 2012 Total comprehensive income for the period:	6,639	93,448	—	29,277	(313)	(74,914)	54,137	—	54,137
Loss for the period Total other	—	—	—	—	—	(8,893)	(8,893)	—	(8,893)
comprehensive income Transactions with owners of the Company, recognised directly in equity:	—	—	—	—	(41)	—	(41)	—	(41)
Shares issued Contributions by and distributions to owners of the Company: Share-based	19	325	—	—	—	—	344	—	344
payment transactions	—	—	—	—	—	9	9	—	9
Balance at 31 March 2013 (unaudited)	6,658	93,773	—	29,277	(354)	(83,798)	45,556	—	45,556

						Equity
								Total
								equity
								£000
								44,419
—	—	—	—	—			—	(17,218)
—	—	—	—	(1,362)	—	(1,362)	—	(1,362)
								36,653
								611
		9,652	29,277			63,103	—	63,103
	Equity share capital £000 6,807 759 —	£000 94,784 35,894 — 7,566 130,678	Equity component of Share convertible premium loan notes £000 9,652 — —	reserve £000 29,277 — —	Foreign currency Merger translation reserve £000 (254) — —	Retained earnings £000 (95,847) — 611 (1,616) (112,454)	attributable to owners of Company £000 44,419 (17,218) (17,218) 36,653 611	Non the controlling interests £000 — — —

Merger reserve

The balance classified as merger reserve relates to the acquisitions of Advanced Power Sources Limited and Intelligent Energy Limited.

Foreign currency translation reserve

The foreign currency translation reserve is used to record exchange differences arising from the translation of the non-statutory financial statements of foreign entities within the Group.

CONSOLIDATED STATEMENT OF CASH FLOWS

		6 months to 31 March			Year to 30 September
	Notes	2014	2013	2013	2012	2011
		£000	£000 (unaudited)	£000	£000	£000
Operating activities
(Loss)/profit for the year/period		(17,218)	(8,893)	(20,952)	7,798	(15,237)
Adjustment for taxation		(4,909)	(2,985)	(8,798)	(8,740)	(1,295)
Adjustment for net financing expense		3,162	(41)	548	954	1,165
		(18,965)	(11,919)	(29,202)	12	(15,367)
Adjust non-cash items:
Depreciation and impairment
of property, plant and equipment	15	1,338	1,580	2,806	2,003	1,202
Amortisation of intangible assets Gain on disposal of	16	404	317	481	136	110
joint venture/subsidiary	12	(983)	—	—	(420)	—
Movement in investment
in joint ventures	18	825	1,341	2,599	1,026	344
Loss on disposal of property,
plant and equipment		—	—	—	122	—
Share-based payments	27	611	9	19	100	109
Working capital adjustments:
Increase in inventories		(882)	(469)	(375)	(134)	(295)
Decrease/(increase) in trade
and other receivables		1,268	(6,699)	951	(931)	(2,805)
(Decrease)/increase in trade
and other payables		(383)	(1,665)	(631)	7,177	285
Taxation		3,794	(16)	3,261	1,480	1,295
Net cash flow from
operating activities		(12,973)	(17,521)	(20,091)	10,571	(15,122)
Investing activities
Investment in joint ventures Proceeds on disposal	18	—	—	—	(6,234)	—
of joint venture		1,133	—	—	—	—
Net interest received/(paid)		36	42	(39)	77	23
Payments to acquire property,
plant and equipment		(1,228)	(1,985)	(3,791)	(5,438)	(1,340)
Payments to acquire intangible assets		(1,062)	(608)	(1,179)	(423)	(365)
Net cash flow from
investing activities		(1,121)	(2,551)	(5,009)	(12,018)	(1,682)
Financing activities
Issue of ordinary share capital		36,653	344	1,504	24,656	18,762
Issue of convertible loan notes		—	—	25,317	—	—
Net cash flow from
financing activities		36,653	344	26,821	24,656	18,762
Increase in cash and
cash equivalents		22,559	(19,728)	1,721	23,209	1,958
Effect of foreign exchange rates
on cash and cash equivalents		—	9	38	316	(153)
Cash and cash equivalents at
beginning of period	21	31,626	29,867	29,867	6,342	4,537
Cash and cash equivalents
at period-end	21	54,185	10,148	31,626	29,867	6,342

NOTES

(forming part of the financial statements)

1. Accounting policies

Intelligent Energy Holdings plc (the Company) is an unlisted public limited company incorporated and domiciled in England and Wales. The historical financial statements consolidate those of the Company and its subsidiaries (together referred to as the ''Group'') and its jointly controlled entities and present the results of the Group and jointly controlled entities for the six month periods ended 31 March 2014 and 31 March 2013 (unaudited) as well as the years ended 30 September 2013, 30 September 2012 and 30 September 2011.

2. Basis of preparation

The historical financial statements have been extracted from the audited consolidated financial statements of the Group for the years ending 30 September 2013, 2012 and 2011. The financial information covering the six months periods ended 31 March 2014 and 2013 has been prepared using an equivalent process to that used to produce those financial statements The financial information in relation to the six months ended 31 March 2014 has been audited. The financial information in relation to the six months ended 31 March 2013 is unaudited and is included for comparative purposes.

Unaudited consolidated historical financial information of the Group for the six month period ended 31 March 2013 has been prepared and presented for comparative purposes on a basis consistent with the extracted audited information.

The historical financial statements have been prepared and approved by the directors in accordance with International Financial Reporting Standards as adopted by the EU (''Adopted IFRSs'').

The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in the historical financial statements.

Judgements made by the Directors, in the application of these accounting policies that have significant effect on the financial statements and estimates with a significant risk of material adjustment in the next year are discussed in note 5.

The historical financial statements have been prepared on a historical cost basis, except where measurement of balance at fair value is required, as explained below.

The historical financial statements are presented in Sterling and all values are rounded to the nearest thousand pounds (£000) except when otherwise indicated.

2.1 Going concern

The following note was included as note 2.1 to the audited accounts for the Company for the year ended 30 September 2013. The requirement for additional external funding referred to in this note will be satisfied on completion of the Offer. The inclusion of this note in this Part V does not (and is not intended to) qualify the statement as to working capital set out in paragraph 14 of Part VIII of this Prospectus.

The planned commercial launch of the Consumer Electronics and Distributed Power and Generation divisions, together with the development of remote asset monitoring capabilities, will require the Group to seek additional external funding in the next 12 months. Should funding not be forthcoming for this continued expansion of activities, the Group has the option to focus only on its Motive-related licensing and joint development activities. In such a scenario, and after making the relevant enquiries, the directors have a reasonable expectation that the Group has adequate resources to continue in existence for the foreseeable future. For this reason, they continue to adopt the "going concern" basis for the preparation of the financial statements.

3. Changes in accounting policy and disclosures

3.1. New and amended standards and interpretations

Adoption of new and revised standards and new standards and interpretations not yet adopted.

The Group has adopted the following new standards and interpretations in preparing the historical financial statements:

• IFRS 13 Fair Value Measurement replaces existing guidance on fair value measurement in different IFRSs with a single definition of fair value, a framework for measuring fair values and disclosures about fair value measurements. This standard applies to assets, liabilities and an entity's own equity instruments that, under other IFRSs, are required or permitted to be measured at fair value or when disclosure of fair value is provided.
• Amendments to IAS 1 Presentation of financial statements considers the presentation of comparative information beyond minimum requirements and presentation of the opening statement of financial position and related notes.
• Amendments to IAS 16 Property, plant and equipment relating to the classification of servicing equipment.
• Amendments to IAS 32 Financial instruments presentation regarding income tax consequences of distributions.

The adoption of these standards and amendments has not had a significant impact on the historical financial statements.

The following standards and amendments have been published, endorsed by the EU, and are available for early adoption but have not yet been applied by the Group in these historical financial statements:

• IFRS 10 Consolidated Financial Statements outlines the requirements for the preparation and presentation of consolidated financial statements, requiring entities to consolidate entities it controls. Control requires exposure or rights to variable returns and the ability to affect those returns through power over an investee.
• IFRS 11 Joint Arrangements outlines the accounting by entities that jointly control an arrangement. Joint control involves the contractual agreed sharing of control and arrangements subject to joint control are classified as either a joint venture (representing a share of net assets and equity accounted) or a joint operation (representing rights to assets and obligations for liabilities, accounted for accordingly).
• IFRS 12 Disclosure of Interests in Other Entities is a consolidated disclosure standard requiring a wide range of disclosures about an entity's interests in subsidiaries, joint arrangements, associates and unconsolidated "structured entities". Disclosures are presented as a series of objectives, with detailed guidance on satisfying those objectives.
• Amendments to IFRS 7 Disclosures Offsetting Financial Assets and Financial Liabilities sets out the disclosures required for financial assets and financial liabilities within the scope of the common disclosures.
• Amendments to IAS 28 Investments in Associates and Joint Ventures applies IFRS 5 to an investment or portion of an investment, in an associate or joint venture that meets the criteria to be classified as held for sale. It also does not require remeasurement of the retained interest in the investment upon cessation of significant influence or joint control.

The standard amendments that will apply in the future are not expected to have a significant effect on the Group financial statements.

4. Basis of consolidation

The historical financial statements consolidate the financial statements of Intelligent Energy Holdings plc and the entities it controls (its subsidiaries) and equity account the Group's interest in associate and jointly controlled entities. Subsidiaries are consolidated from the date of their acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. Control comprises the power to govern the financial and operating policies of the investee so as to obtain benefit from its activities and is achieved through direct or indirect ownership of voting rights; currently exercisable or convertible potential voting rights; or by way of contractual agreement. The historical financial statements of subsidiaries used in the preparation of the consolidated historical financial statements are prepared for the same reporting year as the parent Company and are based on consistent accounting policies. All inter-company balances and transactions, including unrealised profits arising from them, are eliminated.

4.1 Associates and jointly controlled entities (equity accounted investees)

Associates are those entities in which the Group has significant influence, but not control, over the financial and operating policies. Significant influence is presumed to exist when the Group holds between 20 percent and 50 percent of the voting power of another entity. Jointly controlled entities are those entities over whose activities the Group has joint control, established by contractual agreement and requiring the venturers' unanimous consent for strategic financial and operating decisions. Associates and jointly controlled entities are accounted for using the equity method (equity accounted investees) and are initially recognised at cost. The Group's investment includes goodwill identified on acquisition, net of any accumulated impairment losses. The consolidated historical financial statements include the Group's share of the total comprehensive income and equity movements of equity accounted investees, from the date that significant influence or joint control commences until the date that significant influence or joint control ceases. When the Group's share of losses exceeds its interest in an equity accounted investee, the Group's carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the Group has incurred legal or constructive obligations or made payment on behalf of an investee.

5. Significant accounting estimates and assumptions

The preparation of historical financial statements requires the Directors to make estimates and assumptions that affect the amounts reported for assets and liabilities as at the statement of financial position date and the amounts reported for revenues and expenses during the year. The nature of estimation means that actual outcomes could differ from those estimates. The key sources of estimation uncertainty are as follows:

5.1 Contract revenues

The Group measures revenues on contracts using the stage of completion method, to ascertain the appropriate revenue to recognise during a contract. Estimating the stage of completion is measured by reference to the cost of labour hours and materials incurred as a percentage of total estimated cost of labour hours and materials.

5.2 Share-based payments

The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. Estimating fair value requires the determination of the most appropriate valuation model for a grant of equity instruments, which is dependent on the terms and conditions of the grant. This also requires determining the most appropriate inputs to the valuation model including the expected life of the option, volatility and dividend yield and making assumptions about them. The assumptions and models used are disclosed in Note 27.

5.3 Impairment of non-financial assets

The Group assesses whether there are any indicators of impairment for all non-financial assets at each reporting date. Goodwill is tested for impairment annually and at other times when such indicators exist. Other non-financial assets are tested for impairment when there are indicators that the carrying amounts may not be recoverable. When value in use calculations are undertaken, management must estimate the expected future cash flows from the asset or cash-generating unit and choose a suitable discount rate in order to calculate the present value of those cash flows. Further details, including a sensitivity analysis of key assumptions, are given in Note 17.

5.4 Deferred tax assets

The recognition of deferred tax assets relating to the carry forward of unused tax losses and unused tax credits requires the assessment of the extent to which it is probable that future taxable profits will be available against which the unused tax losses and tax credits can be utilised. Given the history of tax losses of the Group, it is required that there is convincing other evidence that sufficient taxable profits will be available against which the unused tax losses or unused tax credits can be utilised. This requires judgement on the part of the directors.

The directors have therefore assessed whether, in their opinion, the recovery of the deferred tax assets is probable, and whether convincing evidence exists to justify this assessment. This assessment is based on the forecasts for the business, which are in turn based in part on known advances in the commercial viability of the Group's businesses. These forecasts indicate sufficient future UK taxable profits to utilise the accumulated tax losses. Accordingly the directors have concluded that the utilisation of the accumulated tax losses is both probable and supported by convincing evidence.

5.5 Operating lease commitments

The Group has entered into commercial property leases; as a lessee it obtains the use of property, plant and equipment. The classification of such leases as operating or finance lease requires the Group to determine, based on an evaluation of the terms and conditions of the arrangements, whether it retains or acquires the significant risks and rewards of ownership of these assets and accordingly whether the lease requires an asset and liability to be recognised in the statement of financial position.

5.6 Fair value of convertible loan notes

The Group has issued convertible loan notes. These convertible loan notes comprise both a liability and an equity element. The equity element is calculated as the net proceeds receivable after deducting the liability element of the convertible loan notes.

The liability element of the convertible loan notes is calculated by discounting the cash flows of the instruments at an interest rate that would be available in the market for an equivalent financial liability. The estimation of this interest rate requires judgement on the part of the directors.

5.7 Development costs

Development costs are capitalised in accordance with the accounting policy in Note 6. Initial capitalisation of costs is based on management's judgment that technological and economical feasibility is confirmed. In determining the amounts to be capitalised, management makes assumptions regarding the expected future cash generation of the assets, discount rates to be applied and the expected period of benefits. The value of the carried amount of capitalised development costs at 31 March 2014, 31 March 2013 (unaudited), 30 September 2013, 30 September 2012, and 30 September 2011 was £nil.

5.8 Disposals of joint ventures and associates

Any deferred consideration arising from the sale of a joint venture or associate, where dependent on unknown future events, will require significant judgement from management to estimate whether the conditions of the consideration will be met.

6. Summary of significant accounting policies

The accounting policies which follow set out the significant policies which apply in preparing the historical financial statements.

6.1 Interest in joint ventures

The Group has a contractual agreement with Scottish and Southern Energy plc, which represents a joint venture. This takes the form of an agreement to share control of another entity, IE-CHP (UK & Eire) Limited. The Group has a contractual agreement with Suzuki Motor Corporation, which represents a joint venture. This takes the form of an agreement share control of another entity SMILE FC System Corporation, a company incorporated in Japan. The Group had a contractual interest in IE-LEV Limited which took the form of a joint venture, this contractual interest was disposed of in February 2014.

Where a joint venture is established through an interest in a Company, the Group recognises its interest in the entity's assets and liabilities using the equity method of accounting. Under the equity method, the interest in the joint venture is carried in the statement of financial position at cost plus post-acquisition changes in the Group's share of its net assets, less distributions received and less any impairment in value of individual investments. The Group income statement reflects the share of the jointly controlled entity's results after tax. The consolidated statement of comprehensive income and expense reflects the Group's share of any income and expense recognised by the jointly controlled entity outside profit and loss. Any goodwill arising on the acquisition of a jointly controlled entity, representing the excess of the cost of the investment compared to the Group's share of the net fair value of the entity's identifiable assets, liabilities and contingent liabilities, is included in the carrying amount of the jointly controlled entity and is not amortised. To the extent that the net fair value of the entity's identifiable assets, liabilities and contingent liabilities is greater than the cost of the investment, a gain is recognised and added to the Group's share of the entity's profit or loss in the period in which the investment is acquired. The historical financial statements of the jointly controlled entities are prepared for the same reporting period as the Group. Where necessary, adjustments are made to bring the accounting policies used into line with those of the Group; to take into account fair values assigned at the date of acquisition and to reflect impairment losses where appropriate. Adjustments are also made in the Group's historical financial statements to eliminate the Group's share of unrealised gains and losses on transactions between the Group and its jointly controlled entities. The Group ceases to use the equity method on the date from which it no longer has joint control over or significant influence in the joint venture.

When the Group's share of losses exceeds its interest in an equity accounted investee, the Group's carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the Group has legal or constructive obligations or makes payments on behalf of an investee.

6.2 Business combinations and goodwill

Business combinations are accounted for using the purchase method of accounting. The cost of acquisition is the consideration given in exchange for the identifiable net assets. This consideration includes any cash paid plus the fair value at the date of exchange of assets given, liabilities incurred or assumed and equity instruments issued by the Group. The acquired net assets are initially recognised at fair value. Where the Group does not acquire 100 percent ownership of the acquired Company, a noncontrolling interest is recorded as the minority's proportion of the fair value of the acquired net assets.

Any adjustment to the fair values is recognised within 12 months of the acquisition date. Goodwill on acquisitions comprises the excess of the fair value of the consideration for investments in subsidiaries over the fair value of the identifiable net assets acquired. Any goodwill and fair value adjustments are recorded as assets and liabilities of the acquired Company for the purposes of consolidation and are recorded in the local currency of that Company. The costs of integrating and reorganising acquired businesses are charged to the post-acquisition income statement.

Goodwill is carried at cost less accumulated impairment losses. The Group's goodwill is reviewed at each statement of financial position date on an annual basis, or more frequently if there is an indication that the goodwill is impaired, to determine whether events or changes in circumstances exist that indicate that their carrying amount may not be recoverable. If such an indication exists, the asset's recoverable amount is estimated. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. An impairment loss is recognised in the income statement for the amount by which the asset's carrying amount exceeds its recoverable amount.

6.3 Property, plant and equipment

Plant and equipment is stated at cost less accumulated depreciation and accumulated impairment losses. Cost comprises the aggregate amount paid and the fair value of any other consideration given to acquire the asset and includes costs directly attributable to making the asset capable of operating as intended. Depreciation is provided on all property, plant and equipment, other than land, on a straight-line basis over its expected useful life as follows:

• plant, machinery and equipment: 2 5 years
• office equipment, fixtures and fittings: 3 5 years

Assets in the course of construction are not depreciated until they are fully constructed and are then transferred into the relevant property, plant and equipment category and depreciated.

The carrying values of property, plant and equipment are reviewed for impairment if events or changes in circumstances indicate the carrying value may not be recoverable and are written down immediately to their recoverable amount. Useful lives and residual values are reviewed annually and where adjustments are required these are made prospectively. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on derecognition of the asset is included in the income statement in the period of derecognition.

6.4 Impairment of assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset's recoverable amount. An asset's recoverable amount is the higher of an asset's or cash-generating unit's fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or Groups of assets.

Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or cash-generating unit. Impairment losses on continuing operations are recognised in the income statement. An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset's recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at re-valued amount, in which case the reversal is treated as a revaluation increase. After such a reversal the depreciation charge is adjusted in future periods to allocate the asset's revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.

6.5 Intangible assets

Intangible assets acquired separately from a business are carried initially at cost. An intangible asset acquired as part of a business combination is recognised outside goodwill if the asset is separable or arises from contractual or other legal rights and its fair value can be measured reliably. Intangible assets with a finite life have no residual value and are amortised on a straight-line basis over their expected useful lives as follows:

• patents: 15 20 years
• development expenditure: 5 15 years
• software: 4 years

assets in the course of construction are not amortised until they are fully constructed and are then transferred into the relevant category.

Patents

Patents have been granted on intellectual property rights for a period of 15-20 years by the relevant government agencies in countries where patents are applied for. Each patent application is carried at cost less accumulated amortisation and accumulated impairment losses. The carrying values of patents are reviewed for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. Patent renewal fees are taken to the income statement in the year in which they are incurred.

Development costs

Expenditure on internally developed intangible assets, excluding development costs, is taken to the income statement in the year in which it is incurred (research costs are expensed as incurred). Expenditure relating to clearly defined and identifiable development projects is recognised as an intangible asset only after all the following criteria are met: the project's technical feasibility and commercial viability can be demonstrated; the availability of adequate technical and financial resources and an intention to complete the project have been confirmed; and the correlation between development costs and future revenues has been established. Development expenditure for a new product which represents an entry into a new market is only recognised as an intangible asset from after the date that a first commercial customer order is received.

During the period of development, the asset is tested for impairment annually. Following the initial recognition of the development expenditure, the cost model is applied requiring the asset to be carried at cost less any accumulated amortisation and accumulated impairment losses. Amortisation of the asset begins when development is complete and the asset is available for use. It is amortised over the period of expected future sales. During the period in which the assets are not yet in use they are tested for impairment annually.

Research and development costs have been disclosed separately below gross profit, as these costs are not directly related to sales activity.

Computer software

Computer software comprises computer software purchased from third parties as well as the cost of internally developed software. Computer software licences are capitalised on the basis of the costs incurred to acquire and bring into use the specific software. Costs that are directly associated with the production of identifiable and unique software products controlled by the Group, and that are probable of producing future economic benefits are recognised as intangible assets.

Software integral to an item of hardware equipment is classified as property, plant and equipment. Costs associated with maintaining computer software programs are recognised as an expense when they are incurred.

Internally developed software is recognised as an intangible asset only if all of the following conditions are met:

• an asset is created that can be separately identified;
• it is possible that the asset created will generate future economic benefits; and
• the development cost of the asset can be measured reliably.

6.6 Inventories

Inventories are stated at the lower of cost and net realisable value. Cost includes all costs incurred in bringing each product to its present location and condition, as follows:

• Raw materials, consumables and goods for resale: purchase cost on a first-in, first-out basis.
• Work in progress and finished goods: cost of direct materials and labour plus attributable overheads based on a normal level of activity, excluding borrowing costs.

• Net realisable value is based on estimated selling price less any further costs expected to be incurred to completion and disposal. Prototypes developed for research and development purposes are not valued in the historical financial statements and are written off to the income statement.

6.7 Trade and other receivables

Trade receivables, which generally have 30 to 90 day terms, are recognised and carried at the lower of their original invoiced value and recoverable amount. Where the time value of money is material, receivables are carried at discounted cost. Provision is made when there is objective evidence that the Group will not be able to recover balances in full. Balances are written off when the probability of recovery is assessed as being less than likely.

6.8 Trade and other payables

Trade and other payables are stated at cost. Trade payables are non-interest bearing and are normally settled on 30 day terms.

6.9 Cash and cash equivalents

Cash and short-term deposits in the statement of financial position comprise cash at banks and in hand and short-term deposits with an original maturity of three months or less. For the purpose of the consolidated cash flow statement, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.

6.10 Provisions

A provision is recognised when the Group has a legal or constructive obligation as a result of a past event and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, expected future cash flows are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where the Group expects some or all of a provision to be reimbursed, the reimbursement is recognised as a separate asset, when recovery is virtually certain. At this time the expense relating to any provision is presented in the income statement net of any reimbursement. Where discounting is used, the increase in the provision due to unwinding the discount is recognised as a finance cost.

6.11 Financial liabilities

Initial recognition and measurement

Financial liabilities within the scope of IAS 39 are classified as financial liabilities at fair value through profit or loss, loans and borrowings, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The Group determines the classification of its financial liabilities at initial recognition. All financial liabilities are recognised initially at fair value and in the case of loans and borrowings, plus directly attributable transaction costs.

Subsequent measurement

After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in the income statement when the liabilities are derecognised as well as through the effective interest rate method (EIR) amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fee or costs that are an integral part of the EIR. The EIR amortisation is included in finance cost in the income statement.

De-recognition of financial assets and liabilities

A financial asset or liability is generally derecognised when the contract that gives rise to it is settled, sold, cancelled or expires.

Compound financial instruments

Compound financial instruments issued by the Group comprise convertible loan notes denominated in Sterling that can be converted to ordinary shares at the option of the holder, when the number of shares to be issued is fixed and does not vary with changes in fair value.

The liability component of compound financial instruments is initially recognised at the fair value of a similar liability that does not have an equity conversion option. The equity component is initially recognised at the difference between the fair value of the compound financial instruments as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts.

Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortised cost using the effective interest method. The equity component of a compound financial instrument is not remeasured.

Interest related to the financial liability is recognised in profit or loss. On conversion, the financial liability is reclassified to equity and no gain or loss is recognised.

6.12 Classification of shares as debt or equity

Financial instruments issued by the Company are treated as equity (i.e. forming part of shareholders' funds) only to the extent that they meet the following two conditions:

• they include no contractual obligations upon the Company to deliver cash or other financial assets or to exchange financial assets or financial liabilities with another party under conditions that are potentially unfavourable to the Company; and
• where the instrument will or may be settled in the Company's own equity instruments, it is either a non-derivative that includes no obligation to deliver a variable number of the Company's own equity instruments or is a derivative that will be settled by the Company exchanging a fixed amount of cash or other financial assets for a fixed number of its own equity instruments.

To the extent that this definition is not met, the proceeds of issue are classified as a financial liability. Where the instrument so classified takes the legal form of the Company's own shares, the amounts presented in these financial statements for called up share capital and share premium account exclude amounts in relation to those shares.

Finance payments associated with financial liabilities are dealt with as part of financial expenses. Finance payments associated with financial instruments that are classified in equity are dividends, and are recorded directly in equity.

6.13 Share-based payments

Employees (including senior executives) of the Group receive remuneration in the form of share-based payment transactions, whereby employees render services as consideration for equity instruments ("equity-settled transactions").

The cost of equity-settled transactions with employees is measured by reference to the fair value at the date on which they are granted, and is recognised as an expense over the vesting period, which ends on the date on which the relevant employees become fully entitled to the award. The fair value is determined using a Black-Scholes, Bi nominal, or Monte Carlo simulation model, further details of which are given in Note 27.

In valuing equity-settled transactions, no account is taken of any service and performance (vesting conditions), other than performance conditions linked to the price of the shares of the Company (market conditions). Any other conditions which are required to be met in order for an employee to become fully entitled to an award are considered to be non-vesting conditions like market performance conditions. Non-vesting conditions are taken into account in determining the grant date fair value.

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition or non-market condition, which are treated as vesting irrespective of whether or not the market or non-vesting condition is satisfied, provided that all other performance or service conditions are satisfied.

At each statement of financial position date before vesting, the cumulative expense is calculated, representing the extent to which the vesting period has expired and management's best estimate of the number of equity instruments that will ultimately vest. The movement in cumulative expense since the previous statement of financial position date is recognised in the income statement, with a corresponding entry in equity.

Where the terms of an equity-settled award are modified or a new award is designated as replacing a cancelled or settled award, the cost based on the original award terms continues to be recognised over the original vesting period. In addition, an expense is recognised over the remainder of the new vesting period for the incremental fair value of any modification, based on the original award and the fair value of the modified award, both as measured on the date of the modification. No reduction is recognised if this difference is negative.

6.14 Leases

Leases where the lessor retains a significant portion of the risks and benefits of ownership of the asset are classified as operating leases and rentals payable are charged in the income statement on a straight-line basis over the lease term.

6.15 Foreign currency translation

The historical financial statements are presented in Sterling, which is the Group's functional and presentation currency. Each entity in the Group determines its own functional currency and items included in the historical financial statements of each entity are measured using that functional currency. Transactions in foreign currencies are initially recorded in the functional currency at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency spot rate of exchange ruling at the statement of financial position date. All differences are taken to the income statement.

The assets and liabilities of foreign operations are translated into Sterling at the rate of exchange ruling at the statement of financial position date. Income and expense are translated at the date of transaction. The resulting exchange differences are taken directly to a separate component of equity. On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that particular foreign operation is recognised in the income statement. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition are treated as assets and liabilities of the foreign operation and translated at the closing rate.

6.16 Revenue recognition

The Group generates revenues principally through the sale of hydrogen fuel cell and hydrogen generation products (sale of goods) and consultancy for technology and product advancement (rendering of services). Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and receivable revenue can be reliably measured. Revenue is measured at the fair value of the consideration received, excluding discounts, rebates, VAT and other sales taxes or duty. The following criteria must also be met before revenue is recognised:

Sale of goods

Fuel cell and hydrogen generation product revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, usually on dispatch of the goods.

Licensing

Where elements of contract revenue can be separately identifiable, these revenues are spread across the substantive delivery period for those elements. Where multiple element contracts are entered into and the constituent parts do not stand alone, all revenues are spread over the period of the contract

Rendering of services

Consultancy for technology and product advancement revenue is recognised by reference to the stage of completion. Stage of completion is measured by reference to the cost of labour hours and materials incurred to date as a percentage of total estimated cost of labour hours and materials for each contract. Past experience has shown costs incurred to be the best measure of progress. The Group recognises materials revenue using the percentage-of-completion method over the contractual period. Where the contract outcome cannot be measured reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable. When contracts are extended or combined the total consideration received is merged, and the revenue recognised over the full revised contract.

Public body funded work

Project work is undertaken for public bodies where such work is of benefit to the Group's ongoing research and development activities. Where amounts receivable for these projects are less than the anticipated costs to complete the project, no provision is made for future losses.

Interest income

Interest income is recognised as it accrues using the effective interest rate basis.

Research and development tax credit

Claims for tax credits in respect of research and development expenditure incurred are recognised when amounts due can be reasonably assumed to be receivable from HMRC. This is based on the accumulated experience of submitting R&D claims.

6.17 Income taxes

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates and laws that are enacted or substantively enacted by the statement of financial position date. Deferred income tax is recognised on all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the historical financial statements, with the following exceptions: where the temporary difference arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss; in respect of taxable temporary differences associated with investments in subsidiaries where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future; and deferred income tax assets are recognised only to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, carried forward tax credits or tax losses can be utilised. Deferred income tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to apply when the related asset is realised or liability is settled, based on tax rates and laws enacted or substantively enacted at the balance sheet date. Income tax is charged or credited directly to equity if it relates to items that are credited or charged to equity. Otherwise income tax is recognised in the income statement.

6.18 Pensions and other post-retirement benefits

The Group operates a defined contribution scheme. This is a pension scheme that has an agreed contribution rate from the employee and employer. Contributions are known and agreed in advance. The scheme consists of a grouping of individual pension contracts. Each employee owns their own contract, which benefits from the discount available to the Group, in which they can plan and save towards an optimum pension income in their retirement.

7. Revenue

		6 months to 31 March		Year to 30 September
	2014	2013	2013	2012	2011
	£000	£000	£000	£000	£000
		(unaudited)
Licensing	—	5,500	8,000	37,000	—
Rendering of services	3,505	7,160	12,846	6,852	11,869
	3,505	12,660	20,846	43,852	11,869

The activity of the Group is the commercialisation of fuel cell and hydrogen generation technology.

The aggregate amount of costs incurred comprise £2,606,000 in the 6 months to 31 March 2014 (6 months to 31 March 2013: £6,482,000, year to 30 September 2013: £13,497,000, year to 30 September 2012: £17,660,000, year to 30 September 2011: £11,292,000) with recognised profits amounting to £899,000 in the 6 months to 31 March 2014 (6 months to 31 March: £6,178,000, year to 30 September 2013: £7,349,000, year to 30 September 2012: £26,092,000, year to 30 September 2011: £577,000). Amounts of advances are included in deferred revenue below. There are no retentions in respect of rendering of services.

Deferred revenue

	6 months to 31 March		Year to 30 September
	2014	2013	2013	2012	2011
	£000	£000	£000	£000	£000
		(unaudited)
At 1 October (Decrease)/increase in deferred	994	1,809	1,809	279	223
revenue during the year/period	(161)	(427)	(815)	1,530	56
At 31 March/30 September	833	1,382	994	1,809	279

Deferred revenue refers to customer prepayments received on long-term projects. It is included in accruals and deferred income (Note 22).

Accrued revenue

	6 months to 31 March		Year to 30 September
	2014	2013	2013	2012	2011
	£000	£000	£000	£000	£000
	(unaudited)
At 1 October	1,646	3,527	3,527	2,514	889
Increase/(decrease) in accrued
revenue during the period	350	6,061	(1,881)	1,013	1,625
At 31 March/30 September	1,996	9,588	1,646	3,527	2,514

Accrued revenue relates to payments not yet received on long-term projects. It is included in prepayments and accrued income (Note 20).

8. Operating loss

		6 months to 31 March		Year to 30 September
	2014	2013	2013	2012	2011
	£000	£000	£000	£000	£000
	(unaudited)
Operating loss is stated after charging:
Research and development
expenditure written off	8,320	8,052	13,878	13,326	5,980
Depreciation of property,
plant and equipment	1,338	1,580	2,806	2,003	1,202
Loss on disposal of property,
plant and equipment	—	—	—	122	—
Amortisation of intangible assets	404	317	481	136	110
Operating lease payments – minimum
lease payments	612	482	923	636	530

9. Operating segments

The Group is organised into three operating segments; Motive, CE and DP&G and the chief operating decision maker ('CODM'), which is identified as the Board, receives on a monthly basis a narrative report on segment operational activity from the segment head together with consolidated group financials for the purposes of resource allocation and assessment of performance. The CODM to date has not received any disaggregated financial information as the CE and DP&G segments are start up operations which up until the period ended 31 March 2014 had no meaningful sales and the R&D, operational and central functions are largely common to each segment.

The CE and DP&G segments are expected to commence trading in the six months ending 30 September 2014 and the CODM will then start to receive a segmental analysis of sales and gross profit.

For the six months ended 31 March 2014 and 31 March 2013 (unaudited) and years ended 30 September 2013, 2012 and 2011 all sales and gross profit of the Group are attributable to the Motive segment only with all costs and income below gross profit being unallocated central costs.

10. Staff costs and directors' emoluments

	6 months to 31 March		Year to 30 September
	2014	2013	2013	2012	2011
	£000	£000	£000	£000	£000
	(unaudited)
(a) Staff costs
Wages and salaries	8,877	7,325	15,978	13,002	8,812
Share-based payments (Note 27)	611	8	19	100	109
Social security costs	836	815	2,235	1,285	760
Pension contributions	194	—	245	—	—
	10,518	8,148	18,477	14,387	9,681

The monthly average number of employees, including directors, during the period was as follows:

	6 months to 31 March			Year to 30 September
	2014	2013 (unaudited)	2013	2012	2011
Research and development	61	57	61	33	22
Operations and application engineering	208	184	238	164	116
Corporate and commercial	69	54	68	43	28
	338	295	367	240	166

		6 months to 31 March		Year to 30 September
	2014	2013	2013	2012	2011
	£000	£000	£000	£000	£000
		(unaudited)
(b) Directors' emoluments
Emoluments	560	554	967	871	779
Share-based payments	198	9	19	100	76
	758	563	986	971	855
11(a). Finance income
		6 months to 31 March		Year to 30 September
	2014	2013	2013	2012	2011
	£000	£000 (unaudited)	£000	£000	£000
Interest receivable	55	44	116	77	23
11(b). Finance cost
		6 months to 31 March		Year to 30 September
	2014	2013	2013	2012	2011
	£000	£000 (unaudited)	£000	£000	£000
Non capitalisable fund raising costs	550	—	—	—	—
Interest payable on bank overdrafts	19	3	155	74	—
Interest payable on convertible loan notes	1,915	—	509	957	1,188
Funds raised not received	733	—	—	—	—
	3,217	3	664	1,031	1,188

12. Gain on disposal of joint venture

The Company disposed of its investment in IE LEV on 28 February 2014. The carrying value of the investment at that point was £nil. Proceeds of £1,407,000 were received and associated costs of sale were £424,000. The gain realised on the sale of the investment was £983,000 (6 months to 31 March 2013: £nil, year to 30 September 2013: £nil, year to 30 September 2012: £420,000, year to 30 September 2011: £nil)

13. Income tax

(a) Tax charged in the consolidated income statement

	6 months to 31 March		Year to 30 September
	2014 £000	2013 £000	2013 £000	2012 £000	2011 £000
		(unaudited)
Current income tax Research and development tax credit in respect of the current year Foreign income tax	(1,340) 7	(1,993) 10	(3,400) 273	(545) —	— 9
Research and development tax credit in respect of prior years	(351)	—	(3,228)	(1,480)	(1,241)
Total current income tax	(1,684)	(1,983)	(6,355)	(2,025)	(1,232)
Deferred tax Adjustments to prior years Origination and reversal	(400)	(874)	919	—	—
of temporary differences	(2,825)	(128)	(2,911)	—	—
Rate change on opening deferred tax Recognition of deferred tax assets	—	—	1,416	—	—
not previously recognised	—	—	(1,867)	(6,715)	—
Total deferred tax	(3,225)	(1,002)	(2,443)	(6,715)	—
Income tax income reported in the income statement	(4,909)	(2,985)	(8,798)	(8,740)	(1,232)

(b) Factors affecting current tax charge

The tax assessed on the loss before tax for the 6 months to 31 March 2014 is lower (6months to 31 March 2013: higher, year to 30 September 2013: higher, year to 30 September 2012: higher, year to 30 September 2011: lower) than the standard rate of corporation tax in the UK of 23 percent (6 months to 31 March 2013: 24 percent, year to 30 September 2013:23.5 percent, year to 30 September 2012: 25 percent, year to 30 September 2011: 27 per cent.). The differences are reconciled below:

	6 months to 31 March			Year to 30 September
	2014 £000	2013 £000 (unaudited)	2013 £000	2012 £000	2011 £000
Loss before tax	(22,127)	(11,878)	(29,750)	(942)	(16,469)
Loss before tax multiplied by standard rate of corporation tax in the UK of 23% (6 months to 31 March 2013: 24%, 2013: 23.5%,
2012: 25%, 2011: 27%) Expenses not deductible for	(5,089)	(2,851)	(6,991)	(235)	(4,447)
tax purposes	732	39	130	66	1,970
Non-taxable income	(261)	—	—	(224)	(16)
Accelerated allowances	—	—	—	(2,644)	252
Tax losses not recognized	216	—	—	2,492	2,250
R&D enhanced super deduction net of research and development tax
credit in respect of current year	(95)	(61)	(195)	—	—
Foreign income tax Effect of share of loss of	7	10	273	—
equity-accounted investees Joint venture consortium	190	322	549	—	—
relief payment Adjustments in respect of prior years/periods net of research and development tax credit in respect	(34)	—	(37)	—	—
of prior years	(751)	(874)	(2,309)	(1,480)	(1,241)
Rate changes on deferred tax assets Current year losses net of recognition of tax effect of previously	—	—	1,416	—	—
unrecognised tax losses	176	430	(1,634)	(6,715)	—
	(4,909)	(2,985)	(8,798)	(8,740)	(1,232)

(c) Deferred tax

Deferred tax assets and liabilities are attributable to the following:

	6 months to 31 March			Year to 30 September
	2014	2013	2013	2012	2011
	£000	£000	£000	£000	£000
		(unaudited)
Assets
Decelerated/(accelerated)
capital allowances	—	—	—	353	—
Other timing differences	143	—	—	—	—
Tax losses carried forward	12,624	8,849	9,862	6,362	—
	12,767	8,849	9,862	6,715	—
Offset	(745)	(1,132)	(704)	—	—
Net deferred tax asset	12,022	7,717	9,158	6,715	—
Liabilities
Decelerated/(accelerated)
capital allowances	(745)	(1,132)	(704)	—	—
Other timing differences	(2,239)	—	(2,600)	—	—
	(2,984)	(1,132)	(3,304)	—	—
Offset	745	1,132	704	—	—
Net deferred tax (liability)	(2,239)	—	(2,600)	—	—
	9,783	7,717	6,558	6,715	—

Movement in deferred tax balances during the period/year:

	Balance at beginning of year/period £000	Recognised in income statement £000	Recognised in equity £000	Balance at end of year/period £000
31 March 2014
Decelerated/(accelerated)
capital allowances	(704)	(41)	—	(745)
Other timing differences	(2,600)	504	—	(2096)
Tax losses carried forward	9,862	2,762	—	12,624
Net deferred tax asset	6,558	3,225	—	9,783
31 March 2013 (unaudited) Decelerated/(accelerated)
capital allowances	353	(1,485)	—	(1,132)
Tax losses carried forward	6,362	2,487	—	8,849
Net deferred tax asset (unaudited)	6,715	1,002	—	7,717
30 September 2013
Decelerated/(accelerated)
capital allowances	353	(1,057)	—	(704)
Other timing differences	—	—	(2,600)	(2,600)
Tax losses carried forward	6,362	3,500	—	9,862
Net deferred tax asset/(liability)	6,715	2,443	(2,600)	6,558

	Balance at beginning of year/period £000	Recognised in income statement £000	Recognised in equity £000	Balance at end of year/period £000
30 September 2012
Decelerated/(accelerated)
capital allowances	—	353	—	353
Tax losses carried forward	—	6,362	—	6,362
Net deferred tax asset	—	6,715	—	6,715
30 September 2011
Decelerated/(accelerated)
capital allowances	—	—	—	—
Tax losses carried forward	—	—	—	—
Net deferred tax asset	—	—	—	—

Deferred tax assets are recognised as the Directors consider it probable that future taxable profits will be available against which they can be utilised.

The unrecognised deferred tax asset comprises the following:

	6 months to 31 March			Year to 30 September
	2014	2013	2013	2012	2011
	£000	£000	£000	£000	£000
	(unaudited)
Decelerated capital allowances	—	—	—	—	558
Losses	1,717	1,693	1,609	2,715	10,548
Other timing differences	129	—	—	370	435
Unrecognised deferred tax asset	1,846	1,693	1,609	3,085	11,541

There are no temporary differences associated with unremitted earnings of foreign subsidiaries.

(d) Amounts recognised directly in equity

	6 months to 31 March			Year to 30 September
	2014	2013	2013	2012	2011
	£000	£000	£000	£000	£000
		(unaudited)
Before tax
Convertible loan notes	—	—	12,252	—	691
Tax
Convertible loan notes	—	—	(2,600)	—	—
Net of tax
Convertible loan notes	—	—	9,652	—	691

(e) Factors which may affect future tax charges

The trading losses referred to above will be available for offset against future profits of the same trade, assuming there is no major change in the trade's nature or conduct. The Group will continue to claim research and development tax relief where it is eligible to do so. Future tax charges will be affected by government changes to the standard rate of corporation tax in the UK.

Reductions in the rate to 21 percent (effective from 1 April 2014) and 20 percent (effective from 1 April 2015) were substantively enacted on 2 July 2013. A reduction in the rate to 25 per cent. was substantively enacted on 5 July 2011.

This will reduce the Group's future current tax charge accordingly; however, the deferred tax assets and liabilities as at 31 March 2014 and 30 September 2013 have already been recognised using the substantively enacted rate.

14. Movement in Non Controlling Interests

In the year to 30 September 2011 the Group recognised minority interests on the consolidation of IE LEV Limited due to its equity interest of 50.5 percent.

In the year to 30 September 2012, the Group ceased to exert control over IE LEV Limited due to the voting rights of minority shareholders. Consequently from 1 February 2012 IE LEV Limited ceased to be accounted for as a subsidiary.

15. Property, plant and equipment

	Office equipment Fixtures and fittings £000	Plant, machinery and equipment £000	Assets in the course of construction £000	Total £000
Cost:
At 1 October 2010	1,005	3,195	—	4,200
Additions	4	6	—	10
Disposals	583	757	—	1,340
At 30 September 2011	1,592	3,958	—	5,550
At 1 October 2011	1,592	3,958	—	5,550
Additions	1,546	3,387	505	5,438
Disposals	(18)	(301)	—	(319)
Foreign currency adjustment	(52)	(46)	—	(98)
Transfer to intangibles	(1,517)	—	(505)	(2,022)
At 30 September 2012	1,551	6,998	—	8,549
At 1 October 2012	1,551	6,998	—	8,549
Additions	373	3,418	—	3,791
Disposals	(60)	(5)	—	(65)
Foreign currency adjustment	(5)	6	—	1
At 30 September 2013	1,859	10,417	—	12,276
(Unaudited)
At 1 October 2012	1,551	6,998	—	8,549
Additions	203	1,782	—	1,985
At 31 March 2013 (unaudited)	1,754	8,780	—	10,534
At 1 October 2013	1,859	10,417	—	12,276
Additions	45	1,183	—	1,228
Disposals	—	(389)	—	(389)
Foreign currency adjustment	(5)	(14)	—	(19)
At 31 March 2014	1,899	11,197	—	13,096

	Office equipment Fixtures and fittings	Plant, machinery and equipment	Assets in the course of construction	Total
Depreciation and impairment:
At 1 October 2010	553	1,479	—	2,032
Depreciation charge for the year	316	886	—	1,202
Foreign currency adjustment	2	4	—	6
At 30 September 2011	871	2,369	—	3,240
At 1 October 2011	871	2,369	—	3,240
Depreciation charge for the year	633	1,370	—	2,003
Disposals	(10)	(187)	—	(197)
Foreign currency adjustment	(35)	(33)	—	(68)
Transfer to intangibles	(733)	—	—	(733)
At 30 September 2012	726	3,519	—	4,245
At 1 October 2012	726	3,519	—	4,245
Depreciation charge for the year	402	2,404	—	2,806
Disposals	(60)	(5)	—	(65)
Foreign currency adjustment	—	8	—	8
At 30 September 2013	1,068	5,926	—	6,994
(Unaudited)
At 1 October 2012	726	3,519	—	4,245
Depreciation charge for the period	206	1,374	—	1,580
At 31 March 2013 (unaudited)	932	4,893	—	5,825
At 1 October 2013	1,068	5,926	—	6,994
Depreciation charge for the period	267	1,071	—	1,338
Disposals	—	(389)	—	(389)
Foreign currency adjustment	(5)	(12)	—	(17)
At 31 March 2014	1,330	6,596	—	7,926
Net book value:
At 31 March 2014	569	4,601	—	5,170
At 31 March 2013 (unaudited)	822	3,887	—	4,709
At 30 September 2013	791	4,491	—	5,282
At 30 September 2012	825	3,479	—	4,304
At 30 September 2011	721	1,589	—	2,310

16. Intangible assets

	Software	Patents		Assets in the course of Goodwill construction	Total
	£000	£000	£000	£000	£000
Cost: At 1 October 2010	—	1,572	11,519	—	13,091
Foreign currency adjustment Additions	— —	3 365	— —	— —	3 365
At 30 September 2011	—	1,940	11,519	—	13,459
At 1 October 2011 Additions	— —	1,940 423	11,519 —	— —	13,459 423
Foreign currency adjustment Transfer from property,	—	(43)	—	—	(43)
plant and equipment	1,517	—	—	505	2,022
At 30 September 2012	1,517	2,320	11,519	505	15,861
At 1 October 2012 Additions Foreign currency adjustment	1,517 299 —	2,320 880 (6)	11,519 — —	505 — —	15,861 1,179 (6)
At 30 September 2013	1,816	3,194	11,519	505	17,034
(Unaudited) At 1 October 2012 Additions	1,517 240	2,320 368	11,519 —	505 —	15,861 608
At 31 March 2013 (unaudited)	1,757	2,688	11,519	505	16,469
At 1 October 2013 Additions	1,816 168	3,194 791	11,519 —	505 103	17,034 1,062
Gross book value adjustment Foreign currency adjustment	— (2)	(16) (24)	— —	— —	(16) (26)
At 31 March 2014	1,982	3,945	11,519	608	18,054

	Software £000	Patents £000	£000	Assets in the course of Goodwill construction £000	Total £000
Amortisation:
At 1 October 2010	—	490	5,637	—	6,127
Amortisation	—	110	—	—	110
At 30 September 2011	—	600	5,637	—	6,237
At 1 October 2011	—	600	5,637	—	6,237
Amortisation	—	136	—	—	136
Foreign currency adjustment Transfer from property,	—	(7)	—	—	(7)
plant and equipment	733	—	—	—	733
At 30 September 2012	733	729	5,637	—	7,099
At 1 October 2012	733	729	5,637	—	7,099
Amortisation	328	153	—	—	481
Foreign currency adjustment	—	(1)	—	—	(1)
At 30 September 2013	1,061	881	5,637	—	7,579
(Unaudited)
At 1 October 2012	733	729	5,637	—	7,099
Amortisation	235	82	—	—	317
At 31 March 2013 (unaudited)	968	811	5,637	—	7,416
At 1 October 2013	1,061	881	5,637	—	7,579
Amortisation	249	155	—	—	404
Gross book value adjustment	—	(16)	—	—	(16)
Foreign currency adjustment	(2)	(4)	—	—	(6)
At 31 March 2014	1,308	1,016	5,637	—	7,961
Net book value:
At 31 March 2014	674	2,929	5,882	608	10,093
At 31 March 2013 (unaudited)	789	1,877	5,882	505	9,053
At 30 September 2013	755	2,313	5,882	505	9,455
At 30 September 2012	784	1,591	5,882	505	8,762
At 30 September 2011	—	1,340	5,882	—	7,222

The Group continues to review the goodwill for impairment against the criteria set out in Note 17.

Goodwill acquired through business combinations is tested annually for impairment.

All other intangible assets have a defined life and are amortised over a fixed period. The carrying value of these intangible assets will be reviewed for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. No such events or changes have arisen in the periods covered by the historical financial statements.

Goodwill has been allocated for impairment testing purposes into a single cash-generating unit, as follows:

• Air-cooled and evaporatively-cooled fuel cells (Intelligent Energy Limited)

This represents the lowest level within the Group at which goodwill and other intangible assets are monitored for internal management purposes.

Air-cooled and evaporatively-cooled fuel cells (Intelligent Energy Limited) cash-generating unit

The recoverable amount of the fuel cells unit has been determined based on a value in use calculation.

To calculate this, cash flow projections are based on financial budgets approved by the Directors which cover five years. The discount rate applied to the cash flow projections is 18.8 percent. The long-term growth rate applied to the cash flow projections after the budgeted period is 4 percent.

The carrying amount of goodwill allocated to each of the cash-generating units:

	At 31 March			At 30 September
	2014	2013	2013	2012	2011
	£000	£000	£000	£000	£000
		(unaudited)
Intelligent Energy Limited
cash-generating unit	5,882	5,882	5,882	5,882	5,882

Key assumptions used in value in use calculations

The following describes each key assumption on which management has based its cash flow projections to undertake impairment testing of goodwill. The assumptions are consistent with prior years.

Research and development costs are based on the estimated investments required by the business to complete the research and development phases of each product line currently in progress. In each case senior management has estimated the total cost of labour, materials and capital expenditure necessary to start full production.

Market share assumptions have been estimated on a product application basis. The assumptions are based on forecast global demand trends. A view of the possible market share is then applied to the new technology introduction.

Raw material and production costs are based on estimated product cost curve structures. The cost curves are based on current raw material and production costs, synergies in mass production and the effect of learning during manufacture.

Discount rates reflect the estimated of the cost of capital. The estimated cost of capital is the benchmark used by the Directors to assess operating performance and to evaluate future capital investment proposals. The estimate is based on similar sized businesses in the industry sector with similar risk profiles.

Funding. As explained in the "going concern" section (Note 2.1) the planned commercial launch of the Consumer Electronics and Distributed Power and Generation divisions, together with the development of remote asset monitoring capabilities, will require the Group to seek additional external funding in the next financial year. Should funding not be forthcoming for this continued expansion of activities, the Group has the option to focus only on its Motive-related licensing and joint development activities. In such a scenario, the discounted cash flows expected still exceed the carrying value of non-current assets at the statement of financial position date.

Sensitivity to changes in assumptions. There are no reasonably possible changes in key assumptions which would cause the carrying value of this unit to exceed its recoverable amount.

17. Investments

		At 31 March		At 30 September
	2014	2013	2013	2012	2011
	£000	£000	£000	£000	£000
		(unaudited)
Joint ventures	1,618	5,078	3,821	6,420	1,212
	1,618	5,078	3,821	6,420	1,212

	£000
At 1 October 2010 Investment in IE-CHP (UK&Eire) Limited Joint venture losses	1,304 252 (344)
At 30 September 2011	1,212
At 1 October 2011 Investment in SMILE FC Corporation Joint venture losses	1,212 6,234 (1,026)
At 30 September 2012	6,420
At 1 October 2012 Provision to reflect losses in JVs Joint venture losses Unrealised profit adjustment on transactions with SMILE FC Corporation	6,420 (178) (2,336) (85)
At 30 September 2013	3,821
(Unaudited) At 1 October 2012 Joint venture losses At 31 March 2013 (unaudited)	6,420 (1,342) 5,078
At 1 October 2013 Joint venture losses Foreign exchange on translation Unrealised profit adjustment on transactions with SMILE FC Corporation	3,821 (840) (1,378) 15
At 31 March 2014	1,618

(a) Subsidiary undertakings

The companies listed below are those whose results or financial position principally affected the figures shown in the Group Financial Statements. A full list is filed in the Group's Annual Return. All investments are directly held unless otherwise stated:

Subsidiary	Country of incorporation	Proportion of voting rights and shares held	Nature of business
Intelligent Energy Limited	England and Wales	100%	Development and commercialisation of fuel cell based energy solutions
IE Japan Limited	Japan	100%	To represent Intelligent Energy Holdings plc and its Group companies by promoting technical/financial collaborations, partnerships and joint ventures between the Group and companies in Japan
Intelligent Energy India Private Limited	India	100%	To represent Intelligent Energy Holdings plc and its Group companies by promoting technical/financial collaborations, partnership and joint ventures between the Group and companies in India
Intelligent Energy Inc	USA	100%1	Fuel processing system development and partnering activities in the US including marketing the Group's fuel cell power systems in the USA

Subsidiary	Country of incorporation	Proportion of voting rights and shares held	Nature of business
Intelligent Energy Holdings Singapore (Singapore) PTE Limited		100%	Holding company to enter contracts on Asian supply chain.
Essential Energy (Operations) India Private Limited	India	100%2	Trading company providing distributed power supply and management in India with a primary focus on deployment and management of new assets
Essential Energy India Private Limited	India	100%2	Trading company providing distributed power supply and management in India with a primary focus on deployment and management of new assets
Intelligent Pure Water Technologies Private Limited	India	100%2	Proposed trading company to support the Company's collaboration with Hydro Industries Limited in India
Torteval Limited	Guernsey	100%	Non-trading
Intelligent Energy (Proprietary) Limited	South Africa	100%	Dormant
Advanced Power Sources Limited	UK	100%	Dormant
MESOFuel Inc	New Mexico, USA	100%	Dormant

1 Includes indirect holdings of 100% via Intelligent Energy Limited.

2 Includes indirect holdings of 100% via Intelligent Energy Holdings (Singapore) PTE Limited

(b) Joint ventures

IE-CHP (UK & Eire) Limited

On 24 March 2010, Intelligent Energy Holdings plc and SSE Venture Capital Limited provided interest-free loans totalling £2,699,889 to the joint venture, IE-CHP (UK & Eire) Limited. On the basis that Intelligent Energy Holdings plc has granted the joint venture a licence to exploit the technology developed by Intelligent Energy Holdings plc, Intelligent Energy Holdings plc has invested £1 for every £3 invested by SSE Venture Capital Limited. In prior periods, Intelligent Energy Holdings plc, increased its investment in IE-CHP (UK & Eire) Limited by £1,350,000 being a loan granted to IE-CHP (UK & Eire) Limited of £675,000 which is convertible into 155,768 B ordinary shares and the grant of a licence to exploit the technology developed by Intelligent Energy Holdings plc of £675,000. As at 31 March 2014, £337,500 of the loan has been converted into 77,884 B ordinary shares, following the first tranche of the investment from Scottish Enterprise Venture Fund on 16 June 2010. Intelligent Energy Holdings plc maintains 50 percent share in IE-CHP (UK & Eire) Limited. The joint venture is a jointly controlled entity whose principal activity is the development of combined heat and power fuel cell units with integrated natural gas reformers. The Group accounts for its interest in IE-CHP (UK & Eire) Limited using the equity method.

The Group's share of the assets, liabilities, income and expenses of the jointly controlled entity are as follows:

	At 31 March		At 30 September
	2014	2013	2013	2012	2011
	£000	£000	£000	£000	£000
		(unaudited)
Share of the joint venture's
balance sheet
Fixed assets	—	34	—	40	31
Current assets	55	437	184	833	1,242
Liabilities due within one year	(25)	(73)	(6)	(78)	(61)
Carrying value write down	(30)	—	(178)	—	—
Share of net assets	—	398	—	795	1,212
	At 31 March			At 30 September
	2014	2013	2013	2012	2011
	£000	£000	£000	£000	£000
		(unaudited)
Share of the joint venture's results
Revenue	—	20	84	34	289
Cost of sales	—	(150)	(199)	(99)	(476)
Administrative expenses	(216)	(267)	(540)	(354)	(222)
Operating loss for the period	(216)	(397)	(655)	(419)	(409)
Finance income	—	—	1	2	2
Tax	68	—	38	—	63
Loss for the period/year	(148)	(397)	(616)	(417)	(344)

Due to the on-going losses within this joint venture the investment remaining in the historical financial statements was impaired to £nil during the year to 30 September 2013.

SMILE FC System Corporation

On 1 November 2011, Intelligent Energy Holdings plc and Suzuki Motor Corporation subscribed for ¥750,000,000 (£6,234,000) each representing 1,875 shares in the joint venture.

Intelligent Energy Holdings plc maintains a 50 percent share in SMILE FC System Corporation. The joint venture is a jointly controlled entity whose principal activity is the manufacture, evaluation and improvement of air-cooled fuel cells, to be supplied to the Suzuki Motor Corporation. The Group accounts for its interest in SMILE FC System Corporation under the equity method.

The Group's share of assets, liabilities, income and expenses of the jointly controlled entity are as follows:

	At 31 March		At 30 September
	2014	2013	2013	2012	2011
	£000	£000	£000	£000	£000
		(unaudited)
Share of the joint venture's
balance sheet
Fixed assets	509	797	768	245	—
Current assets	1,389	3,352	2,045	5,342	—
Liabilities due within one year	(210)	(139)	(85)	(232)	—
Share of net assets	1,688	4,010	2,728	5,355	—

	At 31 March		At 30 September
	2014	2013	2013	2012	2011
	£000	£000	£000	£000	£000
		(unaudited)
Share of the joint venture's results
Revenue	—	—	—	—	—
Cost of sales	—	—	—	(515)	—
Administrative expenses	(843)	(826)	(1,713)	(89)	—
Operating loss for the year	(843)	(826)	(1,713)	(604)	—
Finance income	—	—	—	1	—
Tax	3	(3)	(7)	(6)	—
Loss for the period/year	(840)	(829)	(1,720)	(609)	—

IE LEV Limited

The Group's 50.5 percent interest in IE LEV limited was sold in its entirety on 28th February 2014. This generated a gain on disposal of £983,000 (see note 12). The Group received 50.5 percent of the net proceeds arising on disposal.

18. Inventories

	At 31 March		At 30 September
	2014	2013	2013	2012	2011
	£000	£000	£000	£000	£000
		(unaudited)
Raw materials and consumables	2,412	1,624	1,530	1,155	1,021

Inventories expensed during the 6 months to 31 March 2014 amounted to £2,596,000 (6 months to 31 March 2013: £2,144,000, year to 30 September 2013: £4,673,000, year to 30 September 2012: £2,729,000, year to 30 September 2011: £3,786,000). Inventory written down in period amounted to £57,000 (6 months to 31 March 2013: £147,000, 2013: £294,000, 2012: £55,000, 2011: £20,000).

The difference between purchase price or production cost of stocks and their replacement cost is not material.

19. Trade and other receivables

	At 31 March			At 30 September
	2014	2013	2013	2012	2011
	£000	£000	£000	£000	£000
		(unaudited)
Trade receivables	1,684	2,182	2,284	262	1,137
Amounts owed by joint ventures	42	436	115	628	—
Corporation tax recoverable	1,360	2,568	3,470	545	—
Other debtors	1,822	—	4,955	—	—
Prepayments and accrued income	3,005	10,248	2,467	4,927	3,443
	7,913	15,434	13,291	6,362	4,580
Non-current	1,822	—	—	—	—
Current	6,091	15,434	13,291	6,362	4,580
	7,913	15,434	13,291	6,362	4,580

All trade receivables are denominated in Sterling.

Trade receivables are non-interest bearing and are generally on 30 to 60 days' terms. Due to the nature of customers the directors believe the risk of impairment is low and therefore no provision has been made. Other debtors as at 31 March 2014 comprised a loan to a third party and as at 30 September 2013 comprised irrevocable undertakings from investors to subscribe for convertible loan notes where the cash had not been received at that date.

The analysis of trade receivables that were past due, but not impaired is as follows:

	Total £000	Not past due £000	Past due <30 days £000	Past due 30 to 60 days £000
31 March 2014	1,684	1,621	—	63
31 March 2013 (unaudited)	2,182	2,149	—	33
30 September 2013	2,284	2,190	—	94
30 September 2012	262	87	71	104
30 September 2011	1,137	90	909	138

The credit quality of trade receivables that are neither past due nor impaired is assessed by reference to historical information relating to counterparty default rates.

20. Cash and cash equivalents

	At 31 March		At 30 September
	2014	2013	2013	2012	2011
	£000	£000	£000	£000	£000
		(unaudited)
Bank current account	54,185	10,148	31,626	29,867	6,342

Cash at bank earns interest at floating rates based on bank deposit rates. Deposits are made for varying periods dependent on the immediate cash requirements of the Group. The Group only deposits cash surpluses with major banks of high quality credit standing.

21. Trade and other payables

	At 31 March		At 30 September
	2014	2013	2013	2012	2011
	£000	£000	£000	£000	£000
		(unaudited)
Trade payables	2,161	1,619	1,338	3,390	535
Accruals and deferred income	6,702	6,588	7,276	6,058	1,870
	8,863	8,207	8,614	9,448	2,405

Trade and other payables are stated at cost. Trade payables are non-interest bearing and are normally settled on 30 to 60 days' terms.

22. Liability component of convertible loan notes

	At 31 March		At 30 September
	2014	2013	2013	2012	2011
	£000	£000 (unaudited)	£000	£000	£000
Brought forward	18,530	—	—	14,526	13,338
Proceeds from issue of convertible notes
(30,492,000 notes at £1 par value)	—	—	32,492	—	—
Transaction costs	—	—	(2,219)	—	—
Net proceeds	—	—	30,273	—	—
Amount classified as equity
(net of transaction costs of £898,000)	—	—	(12,252)	—	—
Loan notes not converted	—	—	—	(14,526)	—
Cancelled loan note	(1,267)	—	—	—	—
Accrued interest	1,915	—	509	1,031	1,188
Converted to equity				(15,557)
Carrying amount of liability	19,178	—	18,530	—	14,526

These notes were issued across a period from August to September 2013. Interest compounds annually at 5 percent and is rolled up into the value of loan notes held. The loan notes and accrued interest are convertible into ordinary shares at £2.50 to a total value of 39,224,600 in June 2017 at the option of the holders and are also available to convert at any date up to maturity at the option of the holder. Any unconverted notes at maturity become payable on demand. Loan notes with a total value of £15,557,000 on 2 July 2012 were converted into 13,528,000 ordinary shares of 5p each on that date. At 31 March 2014 £2,000,000 of loan notes due from investors to the Company remained unpaid. Management have deemed these non-recoverable and the non-recoverability has been accounted for in the period to 31 March 2014.

23. Financial instruments

Capital management

The Directors consider the capital of the business to be the share capital and reserves of the Group. Due to the stage of development of the Group's technology, the Company manages capital requirements through raising equity share capital or convertible loan notes. The requirement to raise equity share capital or convertible loan notes is determined by reference to projected cash flows that are reviewed regularly.

Risks

Foreign currency risk. The Group has overseas operations and has translational risk arising on retranslation of inter-group balances. However, as the Group transacts primarily in Sterling, the exposure to foreign currency risk is considered to be low.

Interest rate risk. The Company and Group hold convertible loan notes. Interest is compounded at 5 percent annually. As this is a fixed rate the interest rate risk is considered to be low.

Credit risk. The carrying amount of the financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was as follows:

	At 31 March		At 30 September
	2014	2013	2013	2012	2011
	£000	£000	£000	£000	£000
		(unaudited)
Trade and other receivables	7,913	15,434	13,291	6,362	4,580
Cash and cash equivalents	54,185	10,148	31,626	29,867	6,342
	62,098	25,582	44,917	36,229	10,922

The Group's credit risk is predominantly with major multinational original equipment manufacturing companies, based in Europe and Japan and with a number of major UK clearing banks and hence the risk is considered to be low. There is no major concentration of credit risk, save for a significant amounts of cash funds placed with a number of the major UK clearing banks. Trade and other receivables includes a loan due from a third party of £1,822,000.

Liquidity risk. The Group maintains adequate liquid funds to match contractual cash flows, with any surplus funds being placed on short-term interest-bearing deposit.

Accounting classifications and fair values

When measuring the fair value of an asset or liability, the Group uses market observable data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
• Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The fair value of the liability element of the convertible loan notes is estimated on inception by discounting future cash flows using rates estimated to be those which were available for debt on similar terms and falls within Level 2 of the fair value hierarchy.

All other financial assets are recorded in the Consolidated Statement of Financial Position at amortised costs with carrying value being a reasonable approximation of fair value.

The following tables show the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy.

	Carrying amount
	Loans and	Other financial
	receivables	liabilities	Total
	£000	£000	£000
Financial assets not measured at fair value:
Trade and other receivables	4,908	—	4,908
Cash and cash equivalents	54,185	—	54,185
	59,093	—	59,093
Financial liabilities not measured at fair value:
Trade payables	—	(2,161)	(2,161)
Convertible notes – liability component	—	(19,178)	(19,178)
31 March 2014	—	(21,339)	(21,339)
	Carrying amount
	Loans and	Other financial
	receivables	liabilities	Total
	£000	£000	£000
Financial assets not measured at fair value:
Trade and other receivables	5,186	—	5,186
Cash and cash equivalents	10,148	—	10,148
	15,334	—	15,334
Financial liabilities not measured at fair value:
Trade payables	—	(1,619)	(1,619)
31 March 2013 (unaudited)	—	(1,619)	(1,619)

	Carrying amount
	Loans and	Other financial
	receivables	liabilities	Total
	£000	£000	£000
Financial assets not measured at fair value:
Trade and other receivables	10,824	—	10,824
Cash and cash equivalents	31,626	—	31,626
	42,450	—	42,450
Financial liabilities not measured at fair value:
Trade payables	—	(1,338)	(1,338)
Convertible notes – liability component	—	(18,530)	(18,530)
30 September 2013	—	(19,868)	(19,868)
	Loans and	Carrying amount Other financial
	receivables	liabilities	Total
	£000	£000	£000
Financial assets not measured at fair value:
Trade and other receivables	1,435	—	1,435
Cash and cash equivalents	29,867	—	29,867
	31,302	—	31,302
Financial liabilities not measured at fair value:
Trade payables	—	(3,390)	(3,390)
30 September 2012	—	(3,390)	(3,390)
		Carrying amount
	Loans and	Other financial
	receivables	liabilities	Total
	£000	£000	£000
Financial assets not measured at fair value:
Trade and other receivables	1,137	—	1,137
Cash and cash equivalents	6,342	—	6,342
	7,479	—	7,479
Financial liabilities not measured at fair value:
Trade payables	—	(535)	(535)
Convertible notes – liability component	—	(14,526)	(14,526)
30 September 2011	—	(15,061)	(15,061)

The book value of the financial assets and financial liabilities not measured at fair value is in all cases considered to be fair value.

(a) Liquidity risk

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include estimated interest payments and exclude the impact of netting agreements.

				Contractual cash flows
	Carrying	On	Less than	2 to 5
	amount	demand	1 year	years	Total
	£000	£000	£000	£000	£000
Trade payables	(2,161)	—	(2,161)	—	(2,161)
Convertible notes	(19,178)	—	—	(36,823)	(36,823)
31 March 2014	(21,339)	—	(2,161)	(36,823)	(38,984)

Contractual cash flows 2 to 5
years	Total
£000	£000
—	(1,619)
	(1,619)
Contractual cash flows
	Total
	£000
	(1,338)
(39,224)	(39,224)
(39,224)	(40,562)
Contractual cash flows
	Total
£000	£000
—	(3,390)
—	(3,390)
	Total
	£000
	(535)
—	(15,557)
—	(16,092)
	— 2 to 5 years £000 — 2 to 5 years Contractual cash flows 2 to 5 years £000 —

The book value of the financial assets and financial liabilities not measured at fair value is in all cases considered to be fair value.

24. Authorised and issued share capital

		At 31 March		At 30 September
	2014	2013 (unaudited)	2013	2012	2011
Issued, called up and fully paid
– number	151,325	133,160	136,129	132,779	106,325
– £000	7,566	6,658	6,807	6,639	5,316

Holders of the ordinary shares are entitled to receive dividends and other distributions and to attend and vote at any general meeting.

Shares were allotted during the 6 month period since 1 October 2013 as follows:

	Shares of 5p each 000
Issue of new share capital	15,129
Exercise of share options	67 15,196

This issue generated funds of £36,653,000 for the business. In addition warrants were issued for issue of 6,655,460 ordinary 5p shares at an exercise price of £2.50 for a consideration of £nil. These expire 30 June 2014.

Shares were allotted during the 6 month period since 1 October 2012 as follows:

	Shares of 5p each (unaudited) 000
Issue of new share capital	—
Exercise of share options	381
	381
This issue generated funds of £344,000 for the business.
Shares were allotted during the 12 months since 1 October 2012 as follows:	Shares of 5p each 000
Exercise of share options	3,350
	3,350
This issue generated funds of £1,504,000 for the business.
Shares were allotted during the 12 months since 1 October 2011 as follows:	Shares of 5p each 000
Issue of new share capital Conversion of convertible loan note Exercise of share options	10,220 13,528 2,706
	26,454
This issue generated funds of £24,656,000 for the business.
Shares were allotted during the 12 months since 1 October 2010 as follows:	Shares of 5p each 000
Issue of new share capital	4,252
Exercise of share options	15,203
	19,455

This issue generated funds of £19,015,000 for the business.

25. Reserves

Equity share capital

The balance classified as share capital relates to the nominal value of shares on issue of the Company's equity share capital, comprising ordinary shares of nominal value 5p each.

Share premium

The balance classified as share premium relates to the aggregate net proceeds less nominal value of shares on issue of the Company's equity share capital.

Merger reserve

The balance classified as merger reserve relates to the acquisitions of Advanced Power Sources Limited and Intelligent Energy Limited, as recommended by section 612 of the Companies Act 2006.

Foreign currency translation reserve

The foreign currency translation reserve is used to record exchange differences arising from the translation of the non-statutory financial statements of foreign subsidiaries.

Equity component of convertible loan notes

During the year ended 30 September 2013 the Group issued convertible loan notes (see Note 23). These loan notes have both equity and liability elements. The liability element has been calculated as described in Notes 23 and 24. The convertible loan note proceeds, after deducting the liability element, is deemed to be the equity element and has been accounted for in reserves.

26. Share-based payment plans

An expense of £611,000 in the 6 month period to 31 March 2014 (6 months to 31 March 2013: £9,000, year to 30 September 2013: £19,000, year to 30 September 2012: £100,000, year to 30 September 2011: £109,000), wholly relating to equity-settled share-based payment transactions, was recognised during the year. The Company has not undertaken any cash-settled share-based payment transactions.

The share-based payment plans are described below.

Type 1

The exercise price of the options are fixed and determined on the date of the grant. The option holders have the option to purchase ordinary shares at the option price between the exercise dates. The fair value of the options is estimated at the grant date using a Black-Scholes model, taking into account the terms and conditions upon which the options were granted. The contractual life of each option granted is varied. There are no cash settlement alternatives.

Type 2

The exercise price of the options are fixed and determined on the date of the grant. The option holders have the option to purchase ordinary shares at the option price between the exercise dates, subject to specified performance criteria being met. The fair value of the options is estimated at the grant date using a Black-Scholes model, taking into account the terms and conditions upon which the options were granted. The contractual life of each option granted is varied. There are no cash settlement alternatives.

On 7th of March 2014 HM Revenue & Customs approved the 2013 Management Incentive Plan (MIP) adopted by Intelligent Energy Holdings PLC on 20th of February 2014. Following the approval of MIP, the terms and conditions were communicated to scheme participants, including the vesting period and the percentage in the MIP Pool to be granted to each individual. There are 31 members of the scheme.

The MIP is effective for a period of ten years from the date of initial adoption. No Approved Option may be granted under the Plan after the tenth anniversary of its adoption. Benefits under the Plan are not pensionable. If a participant ceases to hold office with a Group Member, their Approved Option will lapse at that time. Shares issued or transferred from treasury under the Plan will rank equally in all respects with the Shares then in issue, except that they will not rank for any voting, dividend or other rights attaching to Shares.

The purpose of the MIP is to provide participants with an opportunity to participate directly in the growth of the value of the Company by receiving MIP award. This allows the participants to share in a pool of value, "the MIP Pool", which is linked to the growth in the value of the Company's shares.

The intention is that the MIP will pay out if the Company is sold, taken over or is floated on a stock exchange (the 'Exit Events').

The Company will transfer shares to participants under the Share Award once the MIP Award vests. The vesting period will depend on the type of Exit Event:

1. If the Company is sold or taken over and the performance condition has been met, all of the MIP Award will "Vest" straightaway.

2. 1. If the Company's shares are listed on a stock exchange the MIP provides for the MIP Award to "Vest" as follows:
3. a. One third on the date that the Company's shares are floated on the stock exchange;
4. b. One third on the first anniversary of the date of flotation; and
5. c. One third on the second anniversary of the date of flotation.

When an Exit Event occurs, the Remuneration Committee of the Company will calculate whether the performance target has been met:

• If the Company's share price has not grown by at least 19 percent per annum, your MIP Award will lapse;
• If the Company's share price has grown by 19 percent per annum or more, the MIP Award will vest.

The MIP Pool is based on the value that is realised by the existing shareholders in the Company. The MIP assumes 135,609,653 shares in issue and the MIP Pool will be composed of:

• A 16 percent share in the difference between the share price on the date of the Exit Event and base valuation point; and
• An extra 2 percent share in the difference between the share price on the date of the Exit Event and the higher valuation point (i.e. a total of 18 percent for values in excess of the higher valuation point).

Share based payments: (Type 1 & 2)

Movements in the year

The following table illustrates the number (No.) and weighted average exercise prices (WAEP) of, and movements in, share options during the period/year:

	At 31 March			At 30 September
Number	2014	2013 (unaudited)	2013	2012	2011
Outstanding at start of period/year	3,725,379	8,087,059	8,087,059	10,949,309	10,783,000
Granted during the period/year Exercised during the period/year	— (40,635)	—	— (556,400) (3,375,430) (2,576,000)	—	1,166,308 (200,000)
Expired during the period/year	(632,844)	(511,000)	(986,250)	(286,250)	(800,000)
Outstanding at period/year end	3,051,900	7,019,659	3,725,379	8,087,059	10,949,308
Exercisable at period/year end	2,936,900	6,733,409	3,610,379	7,500,809	9,560,500
	At 31 March			At 30 September
WAEP Pence	2014	2013 (unaudited)	2013	2012	2011
Outstanding at start of period/year	96	69	69	63	57
Granted during the period/year	—	—	—	—	131
Exercised during the period/year	96	70	45	45	40
Expired during the period/year	115	60	52	45	90
Outstanding at period/year end	92	70	96	69	63
Exercisable at period/year end	90	67	95	66	56

At 31 March 2014, the weighted average remaining contractual life for the share options outstanding was 1.80 years (31 March 2013: 1.20 years, 30 September 2013: 1.52 years, 30 September 2012: 1.48 years, 30 September 2011: 2.48 years).

At 31 March 2014, 3,051,900 (31 March 2013: 7,019,659, 30 September 2013: 3,725,379, 30 September 2012: 8,087,059, 30 September 2011: 10,949,308) options were outstanding at a weighted average share price of 92p (31 March 2013: 70p, 30 September 2013: 96p, 30 September 2012: 69p, 30 September 2011: 63p).

There were no options granted in the current or prior year. The range of exercise prices for options outstanding at the end of the year was 80p to 150p (31 March 2013: 40p to 150p, 30 September 2013: 80p to 150p, 30 September 2012: 40p to 150p, 30 September 2011: 40p to 150p).

Included within the outstanding balance are options of nil (31 March 2013: nil, 30 September 2013: nil, 30 September 2012: 5,643,700, 30 September 2011: 5,843,700) shares that have not been recognised in accordance with IFRS 2 share-based payment as the options were granted on or before 7 November 2002. The Group has taken advantage of the exemption in IFRS 1 in respect of equity-settled awards so as to apply IFRS 2 only to those equity-settled awards granted after 7 November 2002.

The following inputs were used in a Black-Scholes model to estimate the value of the options at grant date for type 1 and 2 share based payments:

Dividend yield (%)	—
Expected volatility (%)	40%
Risk–free interest rate (%)	0.77%
Expected life of option (years)	2 to 8.5
Weighted average share price (£)	1.00
Model used:	Black-Scholes

The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the actual outcome.

The share-based payment scheme is equity-settled and the fair value is measured at the grant date.

Share based payments: (Type 3)

Due to the structure of the MIP the exact number of options, which is determined by reference to the MIP pool, will fluctuate, it is therefore excluded from the Type 1 and 2 disclosure tables above. Under IFRS2 the Group recognises a charge to P&L equivalent to the fair value of the options. In the 6 month period to 31 March 2014 this has been calculated to be £600,000 determined using a Monte Carlo simulation model (6 months to 31 March 2013: £nil, year to 30 September 2013: £nil, year to 30 September 2012: £nil, year to 30 September 2011: £nil).

Key inputs into the Monte Carlo simulation model were as follows:

Dividend yield (%)	—
Grant date	7 March 2014
Expected volatility (%)	39.24%
Risk–free interest rate (%)	1.09%
Expected life of option (years)	3
Share price at grant date (£)	2.50
Model used:	Monte Carlo Algorithm

The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the actual outcome. The MIP scheme is equity-settled and the fair value is measured at the grant date.

27. Commitments and contingencies

Operating lease commitments – Group as lessee

The Group has entered into commercial leases on several properties, and items of office and laboratory equipment. These leases have an average duration of between less than 1 year and 5 years. The property leases all contain an option for renewal, with such options being exercisable before the expiry of the lease term at rentals based on market prices at the time of exercise. There are no restrictions placed upon the lessee by entering into these leases.

Future minimum rentals payable under non-cancellable operating leases are as follows:

	At 31 March			At 30 September
	2014	2013 (unaudited)	2013	2012	2011
Within one year After one year but not more than	1,002	901	902	58	30
five years	2,512	694	264	1,675	1,157
After more than 5 years	505	—	—	—	—
	4,019	1,595	1,166	1,733	1,187

During the 6 month period to 31 March 2014, £612,000 (6 months to 31 March: £482,000, year to 30 September 2013: £923,000, year to 30 September 2012: £636,000, year to 30 September 2011: £530,000) was recognised as a lease expense. This was made up of minimum lease payments for equipment of £118,000 (6 months to 31 March 2013: £127,000, year to 30 September 2013: £212,000, year to 30 September 2012: £17,000, year to 30 September 2011: £72,000) and for rent of £494,000 (6 months to 31 March: £355,000, year to 30 September 2013: £711,000, year to 30 September 2012: 619,000, year to 30 September 2011: £458,000).

28. Off-statement of financial position arrangements

The Group enters into operating lease arrangements for the hire of buildings and plant and equipment as the Directors believe these arrangements are a cost effective way of obtaining the short-term benefit of these assets. There are no other material off-statement of financial position arrangements.

29. Related-party transactions

During the period/year the Group entered into transactions, in the ordinary course of business, with other related parties being jointly controlled companies. Transactions entered into, and trading balances outstanding at period end with other related parties, are as follows:

	Sales to related party £000	Purchases from related party £000	Amounts owed by related party £000	Amounts owed to related party £000
Joint ventures
IE-CHP (UK & Eire) Limited, SMILE FC System
Corporation and IE-LEV Limited
31 March 2014	—	—	42	—
31 March 2013 (unaudited)	300	—	436	—
30 September 2013	300	—	115	—
30 September 2012	1,378	—	628	—
30 September 2011	950	—	—	—

The sales and amounts owed by related-party joint ventures refers to the development contract signed with IE-CHP (UK & Eire) Limited and SMILE FC System Corporation.

Terms and conditions of transactions with related parties

The related party transactions were made on terms equivalent to those that prevail in arm's length transactions. Key management personnel are deemed to be the Directors of the Company. The disclosure of transactions with the Directors consists solely of remuneration and can be seen in Note 10.

PART VI

UNAUDITED PRO-FORMA FINANCIAL INFORMATION

Accountant's report on unaudited pro-forma financial information

The Directors Intelligent Energy Holdings plc Charnwood Building Holywell Park Ashby Road Loughborough LE11 3GB

Date 4 July 2014

Dear Sirs

Intelligent Energy Holdings plc

We report on the pro forma financial information (the "Pro forma financial information") set out in Part VI of the prospectus dated 4 July 2014, which has been prepared on the basis described in paragraph 1 headed "Introduction" of page 143 of the prospectus, for illustrative purposes only, to provide information about how the transaction might have affected the financial information presented on the basis of the accounting policies to be adopted by Intelligent Energy Holdings plc in preparing the financial statements for the period ending 30 September 2014. This report is required by paragraph 7 of Annex II of the Prospectus Directive Regulation and is given for the purpose of complying with that paragraph and for no other purpose.

Responsibilities

It is the responsibility of the directors of Intelligent Energy Holdings plc to prepare the Pro forma financial information in accordance with Annex II of the Prospectus Directive Regulation.

It is our responsibility to form an opinion, as required by paragraph 7 of Annex II of the Prospectus Directive Regulation, as to the proper compilation of the Pro forma financial information and to report that opinion to you.

In providing this opinion we are not updating or refreshing any reports or opinions previously made by us on any financial information used in the compilation of the Pro forma financial information, nor do we accept responsibility for such reports or opinions beyond that owed to those to whom those reports or opinions were addressed by us at the dates of their issue.

Save for any responsibility arising under Prospectus Rule 5.5.3R (2)(f) to any person as and to the extent there provided, to the fullest extent permitted by law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with this report or our statement, required by and given solely for the purposes of complying with paragraph 23.1 of Annex I of the Prospectus Directive Regulation, consenting to its inclusion in the prospectus.

Basis of Opinion

We conducted our work in accordance with the Standards for Investment Reporting issued by the Auditing Practices Board in the United Kingdom. The work that we performed for the purpose of making this report, which involved no independent examination of any of the underlying financial information, consisted primarily of comparing the unadjusted financial information with the source documents, considering the evidence supporting the adjustments and discussing the Pro forma financial information with the directors of Intelligent Energy Holdings plc.

We planned and performed our work so as to obtain the information and explanations we considered necessary in order to provide us with reasonable assurance that the Pro forma financial information has been properly compiled on the basis stated and that such basis is consistent with the accounting policies of Intelligent Energy Holdings plc.

Our work has not been carried out in accordance with auditing or other standards and practices generally accepted in the United States of America or other jurisdictions and accordingly should not be relied upon as if it had been carried out in accordance with those standards and practices.

Opinion

In our opinion:

• the Pro forma financial information has been properly compiled on the basis stated; and
• such basis is consistent with the accounting policies of Intelligent Energy Holdings plc.

Declaration

For the purposes of Prospectus Rule 5.5.3R (2)(f) we are responsible for this report as part of the prospectus and declare that we have taken all reasonable care to ensure that the information contained in this report is, to the best of our knowledge, in accordance with the facts and contains no omission likely to affect its import. This declaration is included in the prospectus in compliance with paragraph 1.2 of Annex I of the Prospectus Directive Regulation.

Yours faithfully

KPMG LLP

Chartered Accountants 31 Park Row Nottingham NG1 6FQ 4 July 2014

1. Introduction

The unaudited pro forma statement of net assets of the Group set out below has been prepared to illustrate the effect of receipt of the net proceeds of the Offer (as detailed in Part VII "The Offer") on the net assets of the Group. It has been compiled using the Consolidated Statement of Financial Position as at 31 March 2014, adjusted to illustrate the pro forma effect of the Offer as if it had occurred on 31 March 2014. The unaudited pro forma statement of net assets has been prepared in a manner consistent with the accounting policies applied in preparing the Group's historical financial information as set out in Part V "Historical Financial Information", on the basis set out in the notes below.

The unaudited pro forma statement of net assets has been prepared for illustrative purposes only and, because of its nature, addresses a hypothetical situation and therefore does not represent the Group's actual financial position or results. It may not, therefore, give a true picture of the Group's financial position or results nor is it indicative of the results that may or may not be expected to be achieved in the future.

2. Unaudited pro forma statement of net assets

		net proceeds of the Offer
	as at 31 March 2014 £'000	receivable by the Company £'000	conversion of debt (note (3)) £'000	Proforma net assets £'000
Non-current assets
Property, plant and equipment	5,170	—	—	5,170
Intangible assets	10,093	—	—	10,093
Investments accounted for using the
equity method	1,618	—	—	1,618
Other receivables	1,822	—	—	1,822
Deferred tax assets	12,022	—	—	12,022
	30,725	—	—	30,725
Current assets
Inventories	2,412	—	—	2,412
Trade and other receivables	6,091	—	—	6,091
Cash and cash equivalents	54,185	48,599	—	102,784
	62,688	48,599	—	111,287
Total assets	93,413	48,599	—	142,012
Current liabilities
Trade and other payables	(8,863)	—	—	(8,863)
Non-current liabilities
Deferred tax liability	(2,239)	—	2,239	—
Liability component of convertible
loan notes	(19,178)	—	19,178	—
Other non-current liabilities	(30)	—	—	(30)
	(21,447)	—	21,417	(30)
Total liabilities	(30,310)	—	21,417	(8,893)
Net assets	63,103	48,599	21,417	133,119

Notes:

1) The consolidated net assets of the Group as at 31 March 2014 have been extracted, without material adjustment, from the audited historical financial information of the Group for the six month period ended 31 March 2014 as set out in Part V "Historical Financial Information".

2) The total net proceeds receivable by the Company from the Offer are estimated to be approximately £48.6 million, after deduction of underwriting commissions and other estimated fees and expenses incurred by the Group in connection with the Offer (assuming the maximum amount of the Managers' incentive commission and the discretionary elements of the fees of the Group's other advisers will be paid and excluding VAT) of approximately £6.4 million.

3) During August to September 2013 the Company issued 5 percent unsecured convertible loan notes, the terms of which are described in paragraph 11.8 of Part VIII "Additional Information" of this Prospectus. These unsecured convertible loan notes automatically convert into Ordinary Shares in the event of certain key liquidity events, including a stock market listing.

• 4) The unaudited pro-forma statement of net assets does not constitute financial statements within the meaning of section 434 of the Companies Act 2006.
• 5) The unaudited pro-forma statement of net assets does not reflect any trading results or other transactions undertaken by the Group since 31 March 2014, including GIC exercising their warrants, as disclosed in paragraph 11.9 of Part VIII "Additional Information".

PART VII

THE OFFER

1. Background

The Offer Shares comprise:

• 16,174,251 New Ordinary Shares to be issued by the Company raising gross proceeds for the Company of approximately £55.0 million; and
• 300,000 Existing Ordinary Shares to be sold in the Offer by Philip Mitchell (a non-executive Director) for personal liquidity reasons. Dr. Mitchell was a founder in 1995 of Advanced Power Sources Ltd, a predecessor of the Group, and a member of the Group's original start-up team in 2001.

After deducting underwriting commissions and other fees and expenses incurred in connection with the Offer, the Company expects to receive net proceeds of approximately £48.6 million (assuming the maximum amount of the Managers' incentive commission and the discretionary elements of the fees of the Group's other advisers will be paid and excluding VAT). The Company expects the Selling Shareholder to receive £1,020,000.

The Offer Shares will represent approximately 8.8 percent of the expected issued ordinary share capital of the Company immediately following Admission.

The shareholders immediately prior to the Offer will be diluted by 9.3 percent as a result of the Offer (and by a further 6.6 percent as a result of the conversion of the Convertible Loan Notes and the issue of Award Shares that vest on Admission under the 2013 Management Incentive Plan).

In the Offer, the Offer Shares will be offered (a) to certain institutional investors in the United Kingdom and elsewhere outside of the United States in reliance on Regulation S, and (b) in the United States to persons reasonably believed to be QIBs in reliance on Rule 144A or another exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.

Certain restrictions that apply to the distribution of this Prospectus and the offer, issue and sale of Ordinary Shares in jurisdictions outside the United Kingdom are described below.

When admitted to trading, the Offer Shares will be registered with ISIN (International Securities Identifying Number) GB00BNB7LQ31 and SEDOL (Stock Exchange Daily Official List) number BNB7LQ3 and it is expected that the Offer Shares will be traded under the ticker symbol IEH.

Immediately following Admission, it is expected that approximately 26 percent of the Company's issued ordinary share capital will be held in public hands (within the meaning of paragraph 6.1.19 of the Listing Rules).

The rights attaching to the Offer Shares will be uniform in all respects and they will form a single class for all purposes. The Offer Shares allocated under the Offer have been underwritten, subject to certain conditions, by the Joint Global Co-ordinators as described in the paragraph headed "Underwriting Arrangements". Allocations under the Offer will be finally determined by the Company after consultation with the Joint Global Co-ordinators. All Offer Shares issued or sold pursuant to the Offer will be issued or sold, payable in full, at the Offer Price. Liability for United Kingdom stamp duty and stamp duty reserve tax is described in paragraph 10 of Part VIII "Additional Information" of this Prospectus.

The Offer is subject to the satisfaction of certain conditions contained in the Underwriting Agreement, which are typical for agreements of this nature. Certain conditions are related to events which are outside the control of the Company, the Directors and the Joint Global Co-ordinators. Further details of the Underwriting Agreement are described in paragraph 11.2 of Part VIII "Additional Information" of this Prospectus.

The Company and the Joint Global Co-ordinators expressly reserve the right to determine, at any time prior to Admission, not to proceed with the Offer. If such right is exercised, the Offer will lapse and any monies received in respect of the Offer will be returned to investors without interest.

2. Reasons for the Offer and Use of Proceeds

The Directors believe that the Offer and Admission will:

• significantly raise the public profile and status of the Company which is particularly important for the Company's existing and potential blue chip customers and partners;
• provide access to the capital markets, so facilitating the raising of funds to aid future growth at a level that is unlikely to be achieved in the private funding arena;
• provide a more flexible capital structure to help the Company to grow organically and be better placed to take advantage of future opportunities;
• provide a liquid market in Ordinary Shares for Shareholders and allow the valuation of the Company to be determined in a transparent and public manner; and
• assist in the incentivisation and retention of key management and employees.

The Directors believe that the Offer will allow the Company to address the opportunities in its target industrial sectors with a view to increasing shareholder value over time. The Company intends to apply the net proceeds from the Offer receivable by the Company to provide funding for:

• the commercial expansion of both the CE Division and the DP&G Division;
• the continuation of core research and development activities; and
• the Company's general working capital and corporate requirements.

The Directors have not finally determined how the net proceeds from the Offer receivable by the Company will be allocated as the Directors consider it important to retain flexibility in order to be able to respond to commercial opportunities within the Group's target industries as they arise.

The strategies for the above divisions are included in paragraph 6 "Divisional Overviews" of Part I "Information on the Group" of this Prospectus.

Under the 2013 Management Incentive Plan, one third of the Award Shares shall vest on Admission. The terms of the 2013 Management Incentive Plan permit the Company (if it so decides) to satisfy (all or part of) Award Shares by the payment (to the applicable employee) of a cash sum equivalent to the market value of the Ordinary Shares the subject of the award (or of the relevant part thereof), instead of issuing the Ordinary Shares to the applicable employee.

It is sometimes the case (including on a flotation) that employee participants in share based incentive plans sell a proportion of their overall shares in order to fund their tax liability arising from that incentive plan. The Company has concluded that it would be in the interests of the Company (and of its shareholders as a whole) to satisfy the applicable number of Award Shares (being the number required to cover the tax liabilities of all participating employees) in cash (which will then be accounted for to the applicable tax authorities), instead of facilitating sales of Ordinary Shares (issued pursuant to vesting Award Shares) under the Offer. The total cost to the Company of satisfying these Award Shares in cash will be £4,013,017.

In addition, the Company has agreed with John Maguire (a Director) that it is appropriate, in his particular case that he be able to receive, in cash, the value of the balances of the Award Shares that vest in his favour on Admission. The Company has also concluded that, on the settlement of tax liabilities referred to above, it will be in the interests of the Company (and of the shareholders as a whole) to satisfy Mr. Maguire's Award Shares in cash, rather than arranging for Mr. Maguire to sell Ordinary Shares in the Offer. The cost to the Company of satisfying that balance in cash is £324,604. The total cost for the Company (including to satisfy applicable tax liabilities) in respect to Mr. Maguire is £696,981.

3. Allocation

Upon accepting any allocation, prospective investors will be contractually committed to acquire the number of Offer Shares allocated to them at the Offer Price and, to the fullest extent permitted by law, will be deemed to have agreed not to exercise any rights to rescind or terminate, or otherwise withdraw from such commitment. Dealing may not begin before notification of allocation is made. A number of factors have been considered in determining the Offer Price and the basis of allocation, including the prevailing market conditions, the level and nature of demand for the Offer Shares, the prices bid to acquire the Offer Shares and the objective of establishing an orderly and liquid after-market in the Ordinary Shares. The Offer Price and the number of Offer Shares have been established at a level determined in accordance with these arrangements, taking into account indications of interest received from prospective investors.

4. Financial Impact of the Offer

A pro forma statement illustrating the hypothetical effect of the Offer on the net assets of the Group as at 31 March 2014 as if the net proceeds of £48.6 million had been received by the Company at that date is set out in Part IV (Unaudited Pro Forma Financial Information). This information is unaudited and has been prepared for illustrative purposes only. It shows that the net proceeds from the Offer of £48.6 million would lead to an increase in net assets from £63.1 million to £133.1 million as at 31 March 2014, after adjusting for the impact of the conversion of the Convertible Loan Notes of £21.4 million.

5. Withdrawal Rights

If the Company is required to publish any supplementary prospectus, applicants who have applied for Offer Shares under the Offer shall have at least two clear Business Days following the publication of the relevant supplementary prospectus within which to withdraw their application to acquire Offer Shares in its entirety. The right to withdraw an application to acquire Offer Shares in these circumstances will be available to all investors under the Offer. If the application is not withdrawn within the stipulated period, any application to apply for Offer Shares under the Offer will remain valid and binding. Details of how to withdraw an application will be made available if a supplementary prospectus is published.

6. Dealing Arrangements

Application has been made and it is expected that Admission will take place and unconditional dealings in the Ordinary Shares will commence on the London Stock Exchange at 8.00 a.m. (London time) on 9 July 2014. Prior to Admission, it is expected that dealings in the Ordinary Shares will commence on a conditional basis on the London Stock Exchange at 8.00 a.m. (London time) on 4 July 2014. The earliest date for settlement of such dealings will be 9 July 2014.

All dealings in the Ordinary Shares prior to the commencement of unconditional dealings will be on a "conditional basis", will be of no effect if Admission does not take place and will be at the sole risk of the parties concerned. These dates and times may be changed without further notice.

Each investor will be required to undertake to pay the Offer Price for the Ordinary Shares sold or issued to such investor under the Offer in such manner as shall be directed by the Joint Global Co-ordinators.

It is intended that Ordinary Shares allocated to investors in the Offer will be delivered in uncertificated form and settlement will take place through CREST on Admission. No temporary documents of title will be issued. Dealings in advance of crediting of the relevant CREST stock account(s) shall be at the sole risk of the persons concerned.

7. CREST

CREST is a paperless settlement system enabling securities to be transferred from one person's CREST account to another person's CREST account without the need to use share certificates or written instruments of transfer. Furthermore, with effect from Admission, the Articles will permit the holding of Ordinary Shares in the CREST system.

The Company has applied for the Ordinary Shares to be admitted to CREST with effect from Admission. Accordingly, settlement of transactions in the Ordinary Shares following Admission may take place within the CREST system if any Shareholder so wishes. CREST is a voluntary system and holders of Ordinary Shares who wish to receive and retain share certificates will be able to do so.

8. Lock-Up Arrangements

Pursuant to the Underwriting Agreement, the Company has agreed that, subject to certain customary exceptions, during the period of 180 days from the date of Admission, it will not, without the prior written consent of the Joint Bookrunners (not to be unreasonably withheld or delayed), issue, offer, lend, mortgage, assign, charge, pledge, sell, contract to sell or issue, sell any option or contract to purchase, purchase any option or contract to sell or issue, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any Ordinary Shares or any interest in Ordinary Shares or any securities convertible into or exercisable or exchangeable for, or substantially similar to, Ordinary Shares or any interest in Ordinary Shares or enter into any transaction with the same economic effect as any of the foregoing. This undertaking shall not apply to the operation of any employee share scheme which is in existence at the date of Admission and is described in this Prospectus.

Pursuant to separate lock-up agreements, Meditor European Master Fund Limited, Evolution Placements Corporation, GIC Private Limited, Yukos International UK B.V. and (for such time as it continues to hold the relevant investment mandates) F&C Asset Management, as major Shareholders, have each agreed that, subject to certain exceptions, during the period of 180 days from the date of Admission (in respect of 78 percent of the Ordinary Shares held by them) and 90 days from the date of Admission (in respect of the remaining 22 percent of the Ordinary Shares held by them), they will not, without the prior written consent of the Joint Bookrunners, offer, sell or contract to sell, or otherwise dispose of any Ordinary Shares (or any interest therein or in respect thereof) or enter into any transaction with the same economic effect as any of the foregoing. The exceptions to these undertakings include certain customary exceptions as well as exceptions permitting disposals of Ordinary Shares where the proceeds are reasonably required to alleviate the financial distress of the Shareholder (subject to the prior written consent of the Joint Bookrunners), disposals effected by the Shareholder following (or pursuant to the terms of) any change of control of the Shareholder and (in the case of F&C Asset Management only) disposals effected to enable ongoing compliance by F&C Asset Management with applicable regulatory (and/or constitutional) requirements of its collective investment structures.

Pursuant to the Underwriting Agreement, each of the Directors with interests in Ordinary Shares following Admission has agreed that, subject to certain customary exceptions, during the period from Admission until the publication of the Company's consolidated annual results for the financial year ending on 30 September 2014, they will not, without the prior written consent of the Joint Bookrunners, offer, sell or contract to sell, or otherwise dispose of any Ordinary Shares (or any interest therein or in respect thereof) or enter into any transaction with the same economic effect as any of the foregoing.

9. Underwriting Arrangements

The Company, the Directors (including Philip Mitchell in his capacity both as a Director and a Selling Shareholder) and the Managers have entered into the Underwriting Agreement pursuant to which, on the terms and subject to certain conditions contained therein (which are customary in agreements of this nature), the Managers have agreed to use their reasonable endeavours to procure subscribers or purchasers for the Offer Shares, failing which the Joint Global Co-ordinators will subscribe for or purchase such Offer Shares.

The Offer is conditional upon, inter alia, Admission occurring not later than 8 a.m. on 9 July 2014 (or such later date and time as the Joint Global Co-ordinators and the Company may agree, being no later than 16 July 2014) and the Underwriting Agreement becoming unconditional in all respects and not having been terminated in accordance with its terms.

The Underwriting Agreement provides for the Managers to be paid a commission in respect of the Offer Shares issued. Any commissions received by the Managers may be retained and any Offer Shares acquired by them may be retained or dealt in, by them, for their own benefit.

All Offer Shares issued pursuant to the Offer will be issued at the Offer Price. Liability for UK stamp duty and SDRT is described in paragraph 10 of Part VIII "Additional Information" of this Prospectus.

Further details of the terms of the Underwriting Agreement are set out in paragraph 11.2 of Part VIII "Additional Information" of this Prospectus.

10. Selling and Transfer Restrictions

The distribution of this Prospectus and the offer of Ordinary Shares in certain jurisdictions may be restricted by law and therefore persons into whose possession this Prospectus comes should inform themselves about and observe any restrictions, including those set out in the paragraphs that follow. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

No action has been or will be taken in any jurisdiction that would permit a public offering of the Ordinary Shares, or possession or distribution of this Prospectus or any other offering material in any country or jurisdiction where action for that purpose is required. Accordingly, the Ordinary Shares may not be offered or sold, directly or indirectly, and neither this Prospectus nor any other offering material or advertisement in connection with the Ordinary Shares may be distributed or published in or from any country or jurisdiction except under circumstances that will result in compliance with any and all applicable rules and regulations of any such country or jurisdiction. Persons into whose possession this Prospectus comes should inform themselves about and observe any restrictions on the distribution of this Prospectus and the offer of Ordinary Shares contained in this Prospectus. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. This Prospectus does not constitute an offer to subscribe for or purchase any of the Ordinary Shares offered hereby to any person in any jurisdiction to whom it is unlawful to make such offer of solicitation in such jurisdiction.

European Economic Area

In relation to each member state of the European Economic Area which has implemented the Prospectus Directive, an offer to the public of any Ordinary Shares may not be made in that Relevant Member State, except that an offer to the public in that Relevant Member State of any Ordinary Shares may be made at any time under the following exemptions under the Prospectus Directive, if they have been implemented in that Relevant Member State:

• (a) to any legal entity which is a qualified investor as defined under the Prospectus Directive;
• (b) to fewer than 100, or, if the Relevant Member State has implemented the relevant provisions of the 2010 PD Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus Directive), subject to obtaining the prior consent of the Joint Global Coordinators; or
• (c) in any other circumstances falling within Article 3(2) of the Prospectus Directive,

provided that no such offer of Ordinary Shares shall result in a requirement for the Company or any Manager to publish a prospectus pursuant to Article 3 of the Prospectus Directive or Supplemental Prospectus pursuant to Article 16 of the Prospective Directive and each person who initially acquires any Ordinary Shares or to whom any offer is made will be deemed to have represented, warranted and agreed with each of the Managers, the Company and the Selling Shareholder that it is a qualified investor within the meaning of the law in that Relevant Member State implementing Article 2(1)(e) of the Prospectus Directive.

For the purposes of this provision, the expression an "offer to the public" in relation to any Ordinary Shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the Offer and any Ordinary Shares to be offered so as to enable an investor to decide to purchase any Ordinary Shares, as the same may be varied for that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State.

Hong Kong

(a) No Ordinary Shares have been offered or sold or will be offered or sold in Hong Kong, by means of any document, other than (i) to "professional investors" as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made under that Ordinance; or (ii) in other circumstances which do not result in the document being a "prospectus" as defined in the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong or which do not constitute an offer to the public within the meaning of that Ordinance; and

(b) No advertisement, invitation or document relating to the Ordinary Shares has been issued or has been in the possession of any person for the purposes of issue, nor will any such advertisement, invitation or document be issued or be in the possession of any person for the purpose of issue, whether in Hong Kong or elsewhere, which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to Ordinary Shares which are or are intended to be disposed of only to persons outside Hong Kong or only to "professional investors" as defined in the Securities and Futures Ordinance and any rules made under that Ordinance.

Japan

The Ordinary Shares have not been and will not be registered in Japan pursuant to Article 4, Paragraph 1 of the Financial Instruments and Exchange Act of Japan (Act No. 25 of 1948, as amended, the "FIEA"), and may not be offered or sold, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the FIEA and any other applicable laws, regulations and ministerial guidelines of Japan.

Saudi Arabia

This Prospectus may not be distributed in Saudi Arabia except to such persons as are permitted under the Offers of Securities Regulations issued by the Capital Market Authority of Saudi Arabia.

The Capital Market Authority of Saudi Arabia does not make any representation as to the accuracy or completeness of this Prospectus, and expressly disclaims any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this Prospectus. Prospective purchasers of the Ordinary Shares should conduct their own due diligence on the accuracy of the information relating to such securities. If you do not understand the contents of this document you should consult an authorised financial adviser.

Switzerland

The Ordinary Shares may not be and will not be publicly offered, sold or advertised, directly or indirectly, in or from Switzerland. Neither this Prospectus nor any other offering or marketing material relating to the Ordinary Shares constitutes a prospectus as such term is understood pursuant to article 652a of the Swiss Federal Code of Obligations or a listing prospectus within the meaning of the listing rules of SIX, and neither this Prospectus nor any other offering or marketing material relating to the Ordinary Shares may be publicly distributed or otherwise made publicly available in Switzerland. Neither this Prospectus nor any other offering or marketing material relating to the Offer, the Company or the Ordinary Shares have been or will be filed with or approved by any Swiss regulatory authority. In particular, this Prospectus will not be filed with, and the Offer of Ordinary Shares will not be supervised by, the Swiss Financial Market Supervisory Authority FINMA ("FINMA"), and the Offer has not been and will not be authorized under the Swiss Federal Act on Collective Investment Schemes ("CISA"). The investor protection afforded to acquirers of interests in collective investment schemes under the CISA does not extend to acquirers of Ordinary Shares.

US selling restrictions

The Ordinary Shares have not been, and will not be, registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States and, subject to certain exceptions, may not be offered or sold within the United States. Accordingly, the Ordinary Shares may only be offered and sold (1) in the United States to persons reasonably believed to be QIBs in reliance on the exemption from the registration requirements of the Securities Act provided by Rule 144A or another exemption from the registration requirements under the Securities Act or (2) outside the United States in reliance on Regulation S under the Securities Act.

In addition, until 40 days after the commencement of the Offer, an offer or sale of Ordinary Shares within the United States by any dealer (whether or not participating in the Offer) may violate the registration requirements of the Securities Act if such offer or sale is made otherwise than in accordance with Rule 144A or another exemption from, or transaction not subject to, the registration requirements under the Securities Act.

US transfer restrictions and purchaser representations

Rule 144A Ordinary Shares

Each purchaser of Ordinary Shares in the United States will be deemed to have represented, agreed and acknowledged that it has received a copy of this Prospectus and such other information as it deems necessary to make an investment decision and that:

• (a) it (i) is a QIB or a broker-dealer acting for the account of a QIB, (ii) is aware, and each beneficial owner of such Ordinary Shares has been advised, that the sale to it is in reliance on Rule 144A or another exemption from the registration requirements under the Securities Act, (iii) is acquiring such Ordinary Shares for its own account or for the account of one or more QIBs with respect to whom it has the authority to make, and does make, the representations and warranties set forth herein and (iv) is acquiring the Ordinary Shares for investment purposes and not with a view to further distribution of such Ordinary Shares;
• (b) it understands and agrees that the Ordinary Shares have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States and may not be offered, sold, pledged or otherwise transferred, except (i) to a person that the seller and any person acting on its behalf reasonably believes is a QIB purchasing for its own account or for the account of a QIB in a transaction meeting the requirements of Rule 144A, (ii) outside the United States in accordance with Regulation S under the Securities Act, (iii) pursuant to an exemption from registration under the Securities Act provided by Rule 144 thereunder (if available), or (iv) pursuant to an effective registration statement under the Securities Act, in each case in accordance with any applicable securities laws of any state or other jurisdiction of the United States;
• (c) it understands that any offer, sale, pledge or other transfer made other than in compliance with the above stated restrictions may not be recognised by the Company;
• (d) it understands that such Ordinary Shares (to the extent they are in certificated form), unless otherwise determined by the Company in accordance with applicable law, will bear a legend substantially to the following effect:

THIS SECURITY EVIDENCED HEREBY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE US SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) IN ACCORDANCE WITH RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON THAT THE HOLDER AND ANY PERSON ACTING ON ITS BEHALF REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER, (2) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT FOR RESALES OF THIS ORDINARY SHARE. NOTWITHSTANDING ANYTHING TO THE CONTRARY OR FOREGOING, THE ORDINARY SHARES REPRESENTED HEREBY ARE "RESTRICTED SHARES" WITHIN THE MEANING OF 144(A)(3) UNDER THE SECURITIES ACT AND FOR SO LONG AS SUCH SECURITIES ARE "RESTRICTED SECURITIES" (AS SO DEFINED) THE SECURITIES MAY NOT BE DEPOSITED INTO ANY UNRESTRICTED DEPOSITORY RECEIPT FACILITY IN RESPECT OF THE ORDINARY SHARES ESTABLISHED OR MAINTAINED BY A DEPOSITORY BANK. EACH HOLDER, BY ITS ACCEPTANCE OF THIS ORDINARY SHARE, REPRESENTS THAT IT UNDERSTANDS AND AGREES TO THE FOREGOING RESTRICTIONS.

• (e) notwithstanding anything to the contrary in the foregoing, it understands that Ordinary Shares may not be deposited into any unrestricted depositary receipt facility in respect of Ordinary Shares established or maintained by a depositary bank unless and until such time as such Ordinary Shares are no longer "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act;
• (f) it understands that the Company, the Managers, the Selling Shareholder, their affiliates and others will rely upon the truth and accuracy of the foregoing representations, agreements, acknowledgments and agrees that, if any of such representations, agreements or acknowledgments deemed to have been made by virtue of its acquiring any Ordinary Shares are no longer accurate, it will promptly notify the Company, and if it is acquiring any Ordinary Shares as a fiduciary or agent for one or more accounts, it represents that it has sole investment discretion with respect to each such account and that it has full power to make the foregoing representations, agreements and acknowledgments on behalf of each such account; and
• (g) it agrees that it will give to each person to whom it transfers Ordinary Shares notice of any restrictions on transfer of such Ordinary Shares.

Regulation S Ordinary Shares

Each purchaser of Ordinary Shares offered outside the United States pursuant to Regulation S will be deemed to have represented, agreed and acknowledged that it has received a copy of this Prospectus, and such other information as it deems necessary to make an investment decision and that:

• (a) it is authorised to consummate the purchase of the Ordinary Shares in compliance with all applicable laws and regulations;
• (b) it acknowledges (or if it is a broker-dealer acting on behalf of a customer, its customer has confirmed to it that such customer acknowledges) that the Ordinary Shares have not been, and will not be, registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States;
• (c) it is acquiring the Ordinary Shares in an offshore transaction outside the United States in a transaction which is in compliance with Regulation S and it is not an affiliate of the Company or a person acting on behalf of such an affiliate;
• (d) it will not offer, sell, pledge or transfer any Ordinary Shares, except in accordance with the Securities Act and any applicable laws of any state of the United States and any other jurisdiction; and
• (e) the Company, the Managers, the Selling Shareholder and others will rely upon the truth and accuracy of the foregoing representations, agreements and acknowledgments and agrees that, if any of such representations, agreements or acknowledgments deemed to have been made by virtue of its purchase of Ordinary Shares are no longer accurate, it will promptly notify the Company, and if it is acquiring any Ordinary Shares as a fiduciary or agent for one or more accounts, it represents that it has sole investment discretion with respect to each such account and that it has full power to make the foregoing acknowledgements, representations and agreements on behalf of each such account.

Other

Investors in jurisdictions other than the European Economic Area, Hong Kong, Japan, Saudi Arabia, Switzerland and the United States should consult their professional advisers as to whether they require any governmental or other consent or need to observe any formalities to enable them to purchase any Offer Shares under the Offer.

11. Terms and Conditions of the Offer

These terms and conditions apply to investors agreeing to subscribe for or purchase Offer Shares under the Offer. Each investor agrees with the Company, the Selling Shareholder and each of the Managers to be bound by these terms and conditions as being the terms and conditions upon which Offer Shares will be issued under the Offer. The Managers may require any investor to agree to such further terms and/or conditions and/or give such additional warranties and/or representations as they (in their absolute discretion) see fit.

Agreement to acquire Offer Shares

Conditional on: (i) Admission occurring on or prior to 9 July 2014 (or such later date as the Managers and the Company may agree, being no later than 16 July 2014); and (ii) the investor being allocated Offer Shares, each investor agrees to become a member of the Company and agrees to acquire Offer Shares at the Offer Price. The number of Offer Shares allocated to such investor under the Offer will be in accordance with the arrangements described in this Part VII "The Offer". To the fullest extent permitted by law, each investor acknowledges and agrees that it will not be entitled to exercise any rights to rescind or terminate or, subject to any statutory rights, to withdraw an application for Offer Shares in the Offer, or otherwise to withdraw from, such commitment.

Payment for Offer Shares

Each investor undertakes to pay the Offer Price for the Offer Shares acquired by such investor in such manner as shall be directed by the Managers. In the event of any failure by any investor to pay as so directed by the Managers, the relevant investor will be deemed thereby to have appointed the Managers or any nominee of the Managers to sell (in one or more transactions) any or all of the Offer Shares in respect of which payment will not have been made as directed by the Managers and indemnifies on demand the Managers and/or any relevant nominee of the Managers in respect of any liability for stamp duty and/or SDRT arising in respect of any such sale or sales. Liability for UK stamp duty and SDRT is described in paragraph 10.1 of Part VIII "Additional Information" of this Prospectus.

Representations and warranties

Each investor and, in the case of sub-paragraphs (j) and (p) below, any person confirming an agreement to subscribe for or purchase Offer Shares on behalf of an investor or authorising the Joint Global Co-ordinators (on behalf of the Managers) to notify the investor's name to the Registrar, irrevocably represents, warrants and acknowledges to the Company, the Selling Shareholder and each of the Managers that:

• (a) the content of this Prospectus is exclusively the responsibility of the Company and the Directors and that neither the Managers nor any person acting on their behalf is responsible for or will have any liability for any information, representation or statement contained in this Prospectus or any information previously published by or on behalf of the Company or any member of the Group and will not be liable for any decision by an investor to participate in the Offer based on any information, representation or statement contained in this Prospectus or otherwise;
• (b) in agreeing to subscribe for or purchase Offer Shares under the Offer, the investor is relying on this Prospectus and any supplementary prospectus that may be issued by the Company, and not on any other information or representation concerning the Group, the Offer Shares or the Offer. Such investor agrees that none of the Company, the Managers nor any of their respective officers, partners or directors, nor the Selling Shareholder will have any liability for any such other information or representation and irrevocably and unconditionally waives any rights it may have in respect of any such other information or representation. This paragraph Representations and warranties of this Part VII "The Offer" will not exclude any liability for fraudulent misrepresentation;
• (c) the Managers are not making any recommendations to investors or advising any of them regarding the suitability or merits of any transaction they may enter into in connection with the Offer, and each investor acknowledges that participation in the Offer is on the basis that it is not and will not be a client of any of the Managers and that the Managers are acting exclusively for the Company and no one else in connection with the Offer, and they will not be responsible to anyone else for the

protections afforded to their respective clients, and that the Managers will not be responsible to anyone other than the Company for providing advice in relation to the Offer, the contents of this Prospectus or any transaction, arrangements or other matters referred to herein, and the Managers will not be responsible to anyone other than the relevant party to the Underwriting Agreement in respect of any representations, warranties, undertakings or indemnities contained in the Underwriting Agreement or for the exercise or performance of the Managers' rights and obligations thereunder, including any right to waive or vary any condition or exercise any termination right contained therein;

• (d) if the laws of any place outside the United Kingdom are applicable to the investor's agreement to subscribe for or purchase Offer Shares, such investor has complied with all such laws and none of the Company or the Managers will infringe any laws outside the United Kingdom as a result of such investor's agreement to subscribe for or purchase Offer Shares or any actions arising from such investor's rights and obligations under the investor's agreement to subscribe for or purchase Offer Shares and under the Articles (and, in making this representation and warranty, the investor confirms that it is aware of the selling and transfer restrictions set out in this Part VII "The Offer";
• (e) the investor understands that no action has been or will be taken in any jurisdiction other than the United Kingdom by the Company or any other person that would permit a public offering of the Offer Shares, or possession or distribution of this Prospectus, in any country or jurisdiction where action for that purpose is required;
• (f) if the investor is in any Member State which has implemented the Prospectus Directive it is: (a) a legal entity which is a qualified investor as defined under the Prospectus Directive; or (b) otherwise permitted by law to be offered and sold Offer Shares in circumstances which do not require the publication by the Company of a prospectus pursuant to Article 3 of the Prospectus Directive or other applicable laws;
• (g) the Offer Shares have not been registered or otherwise qualified, and will not be registered or otherwise qualified, for offer and sale nor will a prospectus be cleared or approved in respect of any of the Offer Shares under the securities laws of the United States, Australia, Canada, the Republic of South Africa or Japan and, subject to certain exceptions, may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, into or within the United States, Australia, Canada, the Republic of South Africa or Japan or in any country or jurisdiction where any action for that purpose is required;
• (h) the investor is participating in the Offer in compliance with the selling and transfer restrictions set out in this Part VII "The Offer", including the representations and acknowledgements contained therein. The investor acknowledges that the Offer Shares have not been and will not be registered under the Securities Act, or qualified for sale under the laws of any state or other jurisdiction of the United States, and may not be offered, sold, resold or transferred in, into or within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. The Offer Shares are being offered and sold in the United States to persons reasonably believed to be QIBs in reliance on Rule 144A or pursuant to another exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and outside the United States in an "offshore transaction" as defined in, and in accordance with, Regulation S;
• (i) the investor is liable for any capital duty, stamp duty, stamp duty reserve tax and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the United Kingdom by it or any other person on the acquisition by it of any Offer Shares or the agreement by it to acquire any Offer Shares;

• (j) in the case of a person who confirms to any Manager, on behalf of an investor, an agreement to subscribe for or purchase Offer Shares and/or who authorises the Managers to notify the investor's name to the Registrar, that person represents and warrants that he, she or it has authority to do so on behalf of the investor;

• (k) the investor has complied with its obligations in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002, the Terrorism Act 2000 and the Money Laundering Regulations 2007 (the "UK Regulations") and, if it is making payment on behalf of a third party, it has obtained and recorded satisfactory evidence to verify the identity of the third party as required by the UK Regulations;

• (l) the investor is not, and is not applying as nominee or agent for, a person which is, or may be, mentioned in any of sections 67, 70, 93 and 96 of the Finance Act 1986 (depositary receipts and clearance services);
• (m) if the investor is in the United Kingdom, it is: (a) a person having professional experience in matters relating to investments who falls within the definition of "investment professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (the "Order"); or (b) a high net worth body corporate, unincorporated association or partnership or trustee of a high value trust as described in Article 49(2) of the Order, or is otherwise a person to whom an invitation or inducement to engage in investment activity may be communicated without contravening section 21 of FSMA;
• (n) if the investor is acquiring Offer Shares as a fiduciary or agent for one or more investor accounts, it represents that it has sole investment discretion with respect to each such account and it has full power to make the foregoing acknowledgements, representations and agreements on behalf of each such account;
• (o) each investor in a Member State who acquires any Offer Shares under the Offer contemplated hereby will be deemed to have represented, warranted and agreed with each of the Managers and the Company that: (i) it is a qualified investor within the meaning of the law in that relevant Member State implementing Article 2(1)(e) of the Prospectus Directive; and (ii) in the case of any Offer Shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive: (x) the Offer Shares acquired by it in the Offer have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any relevant member state other than qualified investors, as that term is defined in the Prospectus Directive, or in other circumstances falling within Article 3(2) of the Prospectus Directive and the prior consent of the Managers has been given to the offer or resale; or (y) where Offer Shares have been acquired by it on behalf of persons in any relevant Member State other than qualified investors, the offer of those Offer Shares to it is not treated under the Prospectus Directive as having been made to such persons. For the purposes of this provision, the expression an "offer" in relation to any of the Offer Shares in any relevant Member States means the communication in any form and by any means of sufficient information on the terms of the offer and any Offer Shares to be offered so as to enable an investor to decide to purchase the Offer Shares, as the same may be varied in that relevant Member State by any measure implementing the Prospectus Directive in that relevant Member State;
• (p) in the case of a person who confirms to any Manager, on behalf of an investor which is an entity other than a natural person, an agreement to purchase Offer Shares and/or who authorises the notification of such investor's name to the Registrar, that person warrants that he, she or it has authority to do so on behalf of the investor;
• (q) each investor accepts that the Offer Price and allocations of Offer Shares shall be determined by the Joint Bookrunners (following consultation with the Company) in their absolute discretion; and
• (r) time shall be of the essence as regards each investor's obligations to settle payment for the Offer Shares and to comply with such investor's obligations under the Offer.

The representations, undertakings and warranties contained in this Prospectus are irrevocable. The Company, the Selling Shareholder and the Managers and their respective affiliates will rely upon the truth and accuracy of the foregoing representations, warranties and undertakings and each investor agrees that if any of the representations or warranties made or deemed to have been made by its subscription or purchase of Offer Shares are no longer accurate, such investor shall promptly notify the Company and the Managers.

Supply and disclosure of information

If the Company, the Managers or any of their agents request any information about an investor's agreement to subscribe for or purchase Offer Shares, such investor must promptly disclose it to them and ensure that such information is complete and accurate in all respects.

Miscellaneous

• (a) The rights and remedies of the Company and the Managers under these terms and conditions are in addition to any rights and remedies which would otherwise be available to them, and the exercise or partial exercise of one will not prevent the exercise of others.
• (b) On application, each investor may be asked to disclose, in writing or orally, to the Managers:
• (i) if he or she is an individual, his or her nationality; or
• (ii) if he, she or it is a discretionary fund manager, the jurisdiction in which the funds are managed or owned.
• (c) All documents will be sent at the investor's risk. They may be sent by post to such investor at an address notified to the Managers.
• (d) Each investor agrees to be bound by the Articles (as amended from time to time) once the Offer Shares which such investor has agreed to subscribe for or purchase have been issued or transferred to such investor.
• (e) The Company and the Managers expressly reserve the right to modify the Offer (including without limitation, its timetable and settlement) at any time before the Offer Price and allocation are determined.
• (f) The contract to subscribe for and/or purchase Offer Shares and the appointments and authorities mentioned herein will be governed by, and construed in accordance with, English law. For the exclusive benefit of the Company and the Managers, each investor irrevocably submits to the exclusive jurisdiction of the English courts in respect of these matters. This does not prevent an action being taken against an investor in any other jurisdiction.
• (g) In the case of a joint agreement to subscribe for and/or purchase Offer Shares, references to a purchaser in these terms and conditions are to each of such investors and any investor's liability is joint and several.

PART VIII

ADDITIONAL INFORMATION

1. Responsibility Statement

The Directors, whose names, functions and addresses appear on page 32 of this Prospectus, and the Company, accept responsibility for the information contained in this Prospectus. To the best of the knowledge of the Directors and the Company (who have taken all reasonable care to ensure that such is the case) the information contained in this Prospectus is in accordance with the facts and does not omit anything likely to affect the import of such information.

2. The Company and the Group

• 2.1 The Company was incorporated and registered in England and Wales on 16 April 2004, under the Companies Act 1985, as an unlimited liability company with company number 05104429. On 28 May 2004, the Company was re-registered as a public limited company. The principal legislation under which the Company operates is the Act and regulations made under the Act. The Company's legal and commercial name is Intelligent Energy Holdings plc.
• 2.2 The registered office of the Company is at Charnwood Building, Holywell Park, Ashby Road, Loughborough, Leicester, LE11 3GB, United Kingdom, which is also the business address of the Directors. The Company's website is http://www.intelligent-energy.com and its telephone number is +44 (0)1509 271 271.
• 2.3 The Company is the holding company of the Group. The subsidiaries of the Company and other corporations in which the Company has a significant investment are set out in the following table and further detail is provided in paragraph 2.4:

Name	Principal activity	Country of incorporation or residence	Class and percentage of ownership interest and voting power
Intelligent Energy Limited	Development and commercialisation of fuel cell based energy solutions	England and Wales	100%
Intelligent Energy Inc.	To represent Intelligent Energy Holdings plc and its Group companies by promoting technical/financial collaborations, partnerships and joint ventures between the Group and companies in the USA and provide expertise to assist Intelligent Energy Limited in its R&D activities	California, USA	100%
Intelligent Energy India Private Limited	Representative office undertaking introductory services for Intelligent Energy Limited within India	India	100%
IE Japan Limited	To represent Intelligent Energy Holdings plc and its Group companies by promoting technical/financial collaborations, partnerships and joint ventures between the Group and companies in Japan	Japan	100%
Intelligent (Singapore) Private Limited	Intermediate holding company providing Energy Holdings operational support to the Group in Asia	Singapore	100%
Essential Energy India Private Limited	Trading company providing distributed power supply and management in India with a primary focus on management of existing assets	India	100%

Name	Principal activity	Country of incorporation or residence	Class and percentage of ownership interest and voting power
(Operations) India Private Limited	Essential Energy Trading company providing distributed power supply and management in India with a primary focus on deployment and management of new assets	India	100%
Intelligent Pure Water Technologies Private Limited	To support the Group's collaboration with Hydro Industries Limited in India	India	100%
Intelligent Energy (Proprietary) Limited	Dormant	Republic of South Africa	100%
Advanced Power Dormant Sources Limited		England and Wales	100%
MESOFuel, Inc. Dormant		New Mexico, USA	100%
	Torteval Limited Pending dissolution	Guernsey	100%
IE-CHP (UK & EIRE) Limited	Development and commercialisation of Combined Heat and Power solutions	Scotland	50%
SMILE FC System Corporation	Development and manufacture of air-cooled fuel cell systems for a range of industry sectors	Japan	50%

2.4 Further information is set out below regarding the companies listed above.

• (a) Intelligent Energy Limited was incorporated and registered in England and Wales under the Companies Act 1985, on 28 March 2000, with registered number 3958217 and with its registered office at Charnwood Building, Holywell Park, Ashby Road, Loughborough, Leicestershire, LE11 3GB.
• (b) Intelligent Energy, Inc. was incorporated and registered under the law of the State of California, United States of America (converted from a limited liability company to a corporation and its name changed from Element One Enterprises, LLC to Intelligent Energy, Inc. on 25 November 2003), with registered number C2567469 and with its registered office at 1731 Technology Drive, Suite No. 755, San Jose, CA 95110, USA.
• (c) IE India Private Limited was incorporated and registered in India on 24 August 2010 with registered number U74999KA2010FTCO54935 and its registered office at 1st Floor, #7 Gulmohar Enclave, Kundalahalli, Bangalore, Karnataka-560 037, India.
• (d) IE Japan Limited was incorporated and registered in Japan on 28 December 2011 with its registered office at 20F Hankyu Grand Building, 8047 Kakuda-cho, Kita-ku, Osaka, Japan 530-0017.
• (e) Intelligent Energy Holdings (Singapore) Private Limited was incorporated and registered in Singapore on 7 June 2013 with registered number 201315436R and its registered office at 80, Robinson Road, #02-00, Singapore (068898).

• (f) Essential Energy India Private Limited was incorporated and registered in India on 22 May 2013 with registered number U40107KA2013PTC069221 and with its registered office at 1st Floor, #7 Gulmohar Enclave, Kundalahalli, Bangalore, Karnataka-560 037, India.

• (g) Essential Energy (Operations) India Private Limited was incorporated and registered in India on 28 January 2014, with registered number U40104KA2014FTC073266, and with its registered office at 1st Floor, #7 Gulmohar Enclave, Kundalahalli, Bangalore, Karnataka-560 037, India.

• (h) Intelligent Pure Water Technologies Private Limited was incorporated and registered in India on March 04, 2014, with registered office number U41000KA2014FTC073922, and with its registered office at 310A, 4th Floor, GR Queens Amber, 1st & 2nd Cross, Omkar Nagar, Arekere Mico Layout, B G Road, Bangalore – 560 076, Karnataka, India.
• (i) Intelligent Energy (Proprietary) Limited was incorporated and registered in the Republic of South Africa under the South African Companies Act 1973, with company number 2003/019889/07, and with its registered office at 19 Corlin Court, 67-6th Street, Linden, 2195 Johannesburg, South Africa (name changed from Sage Wise (Pty) Limited to Intelligent Energy (Proprietary) Limited on 10 November 2003).
• (j) Advanced Power Sources Limited was incorporated and registered in England and Wales under the Companies Act 1985 on 21 June 1995, with registered number 3070915, and with its registered office at Charnwood Building, Holywell Park, Ashby Road, Loughborough, Leicestershire, LE11 3GB.
• (k) MESOFuel, Inc. was incorporated and registered under the laws of the State of New Mexico, with company number 2218428, and with its registered office at 9019-A Washington NE, Albuquerque, New Mexico, 87113 (merged with the Company's former subsidiary Intelligent Energy New Mexico, Inc. pursuant to an agreement dated 29 April 2004, following which Intelligent Energy New Mexico, Inc. ceased to exist as a separate entity).
• (l) Torteval Limited was incorporated and registered under the laws of Guernsey with company number 58050 and with its registered office at PO Box 472, St Julian's Court, St Julian's Avenue, St Peter Port, GY1 6AX.
• (m) IE-CHP (UK & EIRE) Limited is a joint venture between the Company, Scottish Enterprise (as administrator for the Scottish Venture Fund) and SSE Venture Capital Limited. IE-CHP (UK & Eire) Limited was incorporated and registered in Scotland under the Companies Act 2006 on 19 February 2008, with registered number SC338109, and with its registered office at 24 Great King Street, Edinburgh, EH3 6QN.
• (n) SMILE FC System Corporation is a joint venture between the Company and Suzuki and was incorporated and registered in Japan on 13 January 2012, with its registered office at 300 Takatsuka-cho, Minami-ku, Hamamatsu City, Shizouka, Japan.

3. Share and Loan Capital

3.1 The following table shows the issued and fully paid share capital of the Company as at 31 March 2014 (being the date of the most recent balance sheet of the Company included in Part V "Historical Financial Information" of this Prospectus) and the expected issued and fully paid share capital of the Company immediately following Admission:

		Issued (fully paid)	Issued (fully paid)
Class of shares	Nominal value	as at 31 March 2014	on Admission(1),(2),(3)
Ordinary Shares	5 pence each	151,324,686	188,031,599

• (1) Taking into account the New Ordinary Shares
• (2) Taking into account 12,526,400 Ordinary Shares to be issued pursuant to the conversion of the Convertible Loan Notes of principal value £30,190,831 outstanding as at the date of this Prospectus which, together with accrued interest (net of applicable withholding taxes), will convert into Ordinary Shares automatically on Admission
• (3) Taking into account 1,147,487 Award Shares that vest on Admission under the 2013 Management Incentive Plan

3.2 The following table shows the share capital of the Company as at 31 March 2013 and 31 March 2014:

Issued shares	As at 31 March 2013	As at 31 March 2014
Ordinary Shares	133,333,555	151,324,686

3.3 The following table summarises the changes in the issued share capital of the Company from 1 October 2010 to the date of this Prospectus:

	Number of Ordinary	Aggregate
Date	Shares issued	issue price (£)	Issue
02.12.10	200,000	£80,000	Option exercise at £0.40
02.12.10	5,699,724	£4,599,779.20	Warrant exercise at £0.80
16.12.10	84,378	£126,567	Warrant exercise at £1.50
20.12.10	4,629,353	£3,703,482.40	Warrant exercise at £0.80
09.03.11 – 15.03.11	3,967,630	£6,744,971	Option exercises at £1.70
17.03.11	84,378	£126,576	Warrant exercise at £1.50
30.03.11	200,000	£340,000	Option exercise at £1.70
17.06.11	4,588,748	£3,670,998.40	Warrant exercise at £0.80
29.09.11	1,190,000	£476,000	Option exercises at £0.40
03.11.11	666,000	£266,400	Option exercises at £0.40
16.12.11	100,000	£90,000	Option exercise at £0.90
20.01.12 – 09.02.12	10,220,189	£23,506,435	Share placing at £2.30
20.01.12	30,000	£12,000	Option exercise at £0.40
20.03.12	130,710	£300,633	Share placing at £2.30
22.05.12	200,000	£80,000	Option exercises £0.40
22.05.12	60,000	£54,000	Option exercises at £0.90
22.06.12	230,000	£92,000	Option exercise at £0.40
03.07.12	13,527,709	£15,556,865.35	Convertible bond exercise at £1.15
24.07.12	100,000	£80,000	Option exercise at £0.80
30.11.12	330,000	£297,000	Option exercises £0.90
20.01.13	156,000	£62,400	Option exercises at £0.40
03.02.13	70,400	£28,160	Option exercise at £0.40
06.04.13	390,400	£156,160	Option exercise at £0.40
07.04.13	616,000	£246,400	Option exercise at £0.40
09.04.13	294,000	£117,600	Option exercise at £0.40
17.04.13	82,137	£32,854.80	Option exercise at £0.40
29.04.13	688,727	£275,490.80	Option exercises at £0.40
30.04.13	94,199	£37,679.60	Option exercises at £0.40
03.05.13	1,562	£624	Option exercise at £0.40
10.05.13	30,757	£12,302.80	Option exercises at £0.40
18.07.13	520,000	£208,000	Option exercise at £0.40
27.09.13	2,930	£3,369.50	Option exercise at £1.15
27.09.13	2,000	£1,800	Option exercise at £0.90
25.10.13	20,000	£8,000	Option exercise at £0.40
08.11.13	100	£90	Option exercise at £0.90
29.11.13	10,535	£12,115.25	Option exercise at £1.15
31.01.14	30,000	£27,000	Option exercise at £0.90
17.03.14	15,129,468	£37,823,670	Share placing at £2.50
03.06.14	100,000	£300,000	Share placing at £3.00

3.4 The placing completed on 17 March 2014 referred to in the table above was effected by way of a placing structured so that, as a technical matter, Ordinary Shares were not issued for cash but rather in consideration for the acquisition of shares of a company incorporated in Guernsey for the purposes of the placing. This arrangement was carried out in accordance with the terms summarised in paragraph 11.9 of this Part VIII "Additional Information".

• 3.5 The Ordinary Shares have been created under the Act and in accordance with the Articles and are denominated in Sterling. Save for the Convertible Loan Notes, the Company does not have in issue any securities not representing share capital.
• 3.6 Since 1 August 2013, the Company has issued 5 per cent. unsecured convertible loan notes due 2017 with an aggregate nominal value of £30,440,831 (the "Convertible Loan Notes"). The Convertible Loan Notes are convertible at the option of the noteholder at any time into Ordinary Shares of the Company at a conversion price of 250 pence of nominal value of Convertible Loan Notes for each new Ordinary Share in the Company. On Admission, all Convertible Loan Notes which are outstanding will automatically convert into Ordinary Shares at the lower of 250 pence and the Offer Price. Immediately prior to Admission, the Convertible Loan Notes outstanding will have a principal value of £30,190,831 with accrued interest of £1,345,464.

Further detail of the instrument under which the Convertible Loan Notes were created is set out in paragraph 11.8 of this Part VIII "Additional Information".

• 3.7 Other than in respect of the Offer and Ordinary Shares to be issued on exercise of the share options as described in paragraph 6 and the conversion of the Convertible Loan Notes described in paragraph 11.8, the Company has no present intention to issue any further shares in the Company.
• 3.8 No shares of the Company are currently in issue with a fixed date on which entitlement to a dividend arises and there are no arrangements in force whereby future dividends are waived or agreed to be waived.
• 3.9 Save as disclosed in this paragraph 3, there has been no issue of share or loan capital of the Company in the three years immediately preceding the date of this Prospectus.
• 3.10 Save as disclosed in this paragraph 3 and paragraphs 6 and 11.2, as at the date of this Prospectus, no commissions, discounts, brokerages or other special terms have been granted by the Company or any other member of the Group in connection with the issue or sale of any share or loan capital of the Company or any other member of the Group.
• 3.11 Save as disclosed in this Part VIII, on Admission no share or loan capital of the Company or any other member of the Group will be under option or has been agreed conditionally or unconditionally to be put under option.
• 3.12 None of the Ordinary Shares in issue at the date of this Prospectus or which are to be issued as a result of the conversion of the Convertible Loan Notes have been sold or are available in whole or in part to the public in conjunction with the application for the Ordinary Shares to be admitted to listing on the Official List.

4. Authorities relating to the Ordinary Shares

• 4.1 At a general meeting of the Company held on 30 May 2014, the following resolutions relating to the share capital of the Company were passed:

• 4.2 THAT the Directors be and are hereby generally and unconditionally authorised in accordance with section 551 of the Companies Act 2006 (the "Act") (in addition and without prejudice to any existing authorities and powers granted to the directors prior to the date hereof) to exercise all the powers of the Company to allot ordinary shares of 5 pence each in the capital of the Company ("Ordinary Shares"), or to grant rights to subscribe for, or convert any security into, Ordinary Shares, up to a maximum aggregate nominal amount of £5,000,000, such authority to expire (unless previously revoked or renewed) on the earlier of 31 March 2015 and the conclusion of the next annual general meeting of the Company, save that the Directors may make an offer or agreement before the expiry of this authority which would or might require relevant securities to be allotted after expiry of this authority and the Directors may allot relevant securities in pursuance of that offer or agreement as if this authority had not expired.

• 4.3 THAT, subject to the passing of the resolution in paragraph 4.2 above, the Directors be empowered in accordance with sections 570 and 573 of the Act to allot equity securities (within the meaning of section 560 of the Act) of the Company for cash pursuant to the authority conferred by the resolution in paragraph 4.2 above as if section 561 of the Act did not apply to any such allotment, provided that:

• (a) the power granted shall be limited to the allotment of equity securities for cash up to a maximum aggregate nominal amount of £5,000,000;
• (b) the authority granted shall (unless previously revoked or renewed) expire on the earlier of 31 March 2015 and the conclusion of the next annual general meeting of the Company; and
• (c) the said power shall allow and enable the Directors to make an offer or agreement before the expiry of that power which would or might require equity securities to be allotted after such expiry and the Directors may allot equity securities in pursuance of such offer or agreement as if that power had not expired.

5. Memorandum and Articles of Association of the Company

Memorandum of Association

5.1 In accordance with section 31 of the Act and the Articles, the objects of the Company are unrestricted. The Memorandum and the Articles are available for inspection at the address specified in paragraph 2.2 of this Part VIII "Additional Information".

Articles of Association

5.2 The Articles (which have been adopted conditional on Admission) contain (amongst others) provisions to the following effect:

Share Rights

5.3 Pursuant to the Articles, the Company can issue shares with any rights or restrictions attached to them as long as this is not restricted by any rights attached to existing shares. These rights or restrictions can be decided either by an ordinary resolution passed by the Shareholders or by the Directors as long as there is no conflict with any resolution passed by the Shareholders. These rights and restrictions will apply to the relevant shares as if they were set out in the Articles. Subject to the Act, the Company can issue shares which can be redeemed. This can include shares which can be redeemed if the holders want to do so, as well as shares which the Company can insist on redeeming. The Directors can decide on the terms and conditions and the manner of redemption of any redeemable share. These terms and conditions will apply to the relevant shares as if they were set out in the articles. If new shares are created or issued which rank equally with any other existing shares, the rights of the existing shares will not be regarded as changed or abrogated unless the terms of the existing shares expressly say otherwise.

Variation of Class Rights

5.4 Subject to the Act, the rights attached to any class of shares can be changed if this is approved either in writing by Shareholders holding at least three quarters in nominal value of the issued shares of that class by amount (excluding any shares of that class held as treasury shares) or by a special resolution passed at a separate meeting of the holders of the relevant class of shares.

Uncertificated Shares

5.5 In accordance with the Uncertificated Securities Regulations 2001 (the "Regulations"), the Company can allow the ownership or issue of shares and other securities to be evidenced without share certificates and these shares may be transferred without an instrument of transfer. On a sale of uncertified shares the Company may require that the uncertified shares are converted into certified form or direct the holder of those shares to take such steps as may be necessary to sell or transfer the shares.

• 5.6 Uncertificated shares can be converted into certificated shares in accordance with regulations made by the Board from time to time and the Company may require the conversion of uncertificated shares into certificated form for the purpose of enforcing a right of disposal, sale or transfer of such shares in accordance with the Articles, the Act and the Regulations.
• 5.7 The Directors may also introduce regulations which govern the issue, holding and transfer and, where appropriate, the mechanics of conversion and redemption of shares held in uncertificated form and any other provisions which the Directors consider necessary to ensure that the Articles are consistent with the relevant rules and/or legislation.

Right to Share Certificates

5.8 When a Shareholder is first registered as the holder of any class of certificated shares, he is entitled, free of charge, to one certificate for all of the certificated shares of that class which he holds. If a Shareholder holds certificated shares of more than one class, he is entitled to a separate share certificate for each class. If a Shareholder receives more certificated shares of any class, he is entitled, without charge, to a certificate for the extra shares. If a Shareholder transfers some of the shares represented by a share certificate, he is entitled, free of charge, to a new certificate for the balance to the extent the balance is to be held in certificated form. Where a certificated share is held jointly, the Company does not have to issue more than one certificate for that share. When the Company delivers a share certificate to one joint Shareholder, this is treated as delivery to all of the joint Shareholders.

Transfer

• 5.9 The Ordinary Shares are in registered form.
• 5.10 A transfer of certificated shares must be made in writing and either in the usual standard form or in any other form approved by the Directors. A transfer of uncertificated shares must be made through a relevant system (as defined in the Regulations). The person making a transfer will continue to be treated as a Shareholder until the name of the person to whom the share is being transferred is put on the register for that share.
• 5.11 The Board may, in its absolute discretion, refuse to register the transfer of a certificated share which is not fully paid provided that such discretion may not be exercised in such a way as to prevent dealings in shares admitted to the Official List from taking place on an open and proper basis.
• 5.12 The Board may also refuse to register a transfer of shares held in certificated form unless:
• (i) the duly stamped or certified instrument of transfer is lodged at the place where the Company's register of members is kept together with the relevant share certificate(s) and such other evidence of the right to transfer as the Board may reasonable require;
• (ii) the instrument of transfer is in respect of only one class of share; and
• (iii) the instrument of transfer is in favour of not more than four transferees.
• 5.13 In the case of uncertificated shares, the Board may refuse to register a transfer if the Regulations allow it to do so and must do so where the Regulations so require.
• 5.14 The Board may also refuse to register a transfer of shares which are "restricted shares" in circumstances where the holder has failed to comply with a disclosure notice and the Board has consequently served a restriction notice (as referred to below). However, the Board may not refuse to register a transfer of "restricted shares" pursuant to a sale to an unconnected party:
• (i) on a recognised investment exchange;
• (ii) on any stock exchange outside the United Kingdom on which the Company's shares are nominally dealt; or
• (iii) on acceptance of a takeover offer (as defined in sections 974 to 976 and 991 of the Act).

Alteration of Share Capital

5.15 The Company may by ordinary resolution alter its share capital in accordance with the Act.

Disclosure of Interests in Shares

5.16 In accordance with section 793 of the Act, the Company may serve notice (a "disclosure notice") on anyone who knows, or has reasonable cause to believe, is interested in it shares or has been so interested in the previous three years. If the Company does not, within 14 days of serving a disclosure notice, receive the information it has requested then the Board may serve a further notice (a "restriction notice") designating the shares the subject of the restriction notice as "restricted shares". The restrictions which may be imposed on restricted shares include preventing the Shareholder from attending and voting at general meetings' from transferring restricted shares (subject to the exceptions set out above); and from receiving dividends. Any such restrictions shall cease to apply seven days after receipt by the Company of the information requested in the disclosure notice.

General Meetings

Quorum

• 5.17 A quorum for a general meeting is two people who are entitled to vote. They can be Shareholders who are personally present or proxies for Shareholders or a combination of both. If a quorum is not present, a chairman of the meeting can still be chosen and this will not be treated as part of the business of the meeting. If a quorum is not present within five minutes of the time fixed for a general meeting to start or within any longer period not exceeding one hour which the chairman of the meeting can decide or if a quorum ceases to be present during a general meeting, the meeting (if called by Shareholders) will be cancelled or (any other meeting) will be adjourned to a day which the Directors may determine (subject to the provisions of the Act).
• 5.18 The chairman of a general meeting at which a quorum is present may, with the consent of the meeting change the time and place of the meeting and may do so without consent if the meeting space can not accommodate the number of Shareholders wishing to attend or the behaviour of the Shareholders prevents the continuation of business at the meeting. Notice of the business of the meeting does not need to be given again unless no time and place for the adjourned meeting are fixed or the meeting is adjourned for 30 days or more in which case seven clear days' notice is required to be given in the same manner as for the original meeting.

Voting

• 5.19 Subject to the Act and to any rights or restrictions attached to any shares, on a show of hands every Shareholder (who is an individual) who is present in person or every Shareholder (who is a corporation) is present by a duly authorised representative and every proxy (regardless of the number of Shareholders for whom he is proxy) has one vote and on a poll each Shareholder present in person, by proxy or by representative has one vote for every share he holds.
• 5.20 A resolution put to the vote at any general meeting will be decided on a show of hands unless a poll is demanded when, or before, the chairman of the meeting declares the result of the show of hands. A poll can be demanded by the chairman of the meeting; at least three persons at the meeting who are entitled to vote; one or more Shareholders at the meeting who are entitled to vote (or their proxies) and who have between them at least ten per cent. of the total votes of all Shareholders who have the right to vote at the meeting; one or more Shareholders at the meeting who have shares which allow them to vote at the meeting (or their proxies) and on which the total amount which has been paid up is at least ten per cent. of the total sum paid up on all shares which give the right to vote at the meeting; or any Shareholder (or their proxies) in the case of a resolution to confer, vary, revoke or renew authority or approval for an off-market purchase by the Company of its own shares. Unless the Directors decide otherwise, a Shareholder cannot attend or vote shares at any general meeting of the Company or upon a poll or exercise any other right conferred by membership in relation to general meetings or polls if he has not paid all amounts relating to those shares which are due at the time of the meeting.

Directors

Directors meetings

• 5.21 Directors' meetings are called by giving notice to all the Directors. Notice is treated as properly given if it is given personally, by word of mouth or in writing to the Director's last known address or any other address given by him to the Company for this purpose. Any Director can waive his entitlement to notice of any Directors' meeting, including one which has already taken place.
• 5.22 If no other quorum is fixed by the Directors, two Directors are a quorum. Alternate Directors will count towards the quorum if their appointers are not present.
• 5.23 Matters to be decided at a Directors' meeting will be decided by a majority vote. If votes are equal, the chairman of the meeting has a second, casting vote.

Appointment

• 5.24 The Company must have a minimum of two Directors (unless otherwise determined by an ordinary resolution).
• 5.25 The Company can, by passing an ordinary resolution, appoint any willing person to be a Director, either as an extra Director or to fill a vacancy. The Directors can appoint any willing person to be a Director, either as an extra Director or to fill a vacancy. Any Director appointed in this way by the Board must retire from office at the first annual general meeting after his appointment and at such meeting he is eligible for re-appointment.

Retirement

• 5.26 At every annual general meeting any Director who has been appointed by the Directors since the last annual general meeting; and any Director who held office at the time of the two preceding annual general meetings and who did not retire at either of them shall retire. If the Company does not fill the vacancy at the meeting then the Director will be deemed to be reappointed unless it is resolved not to fill the vacancy at the meeting or a resolution to reappoint the Director is put to the meeting and lost.
• 5.27 At the general meeting at which a Director retires, Shareholders can pass an ordinary resolution to re-appoint the Director or to appoint some other eligible person in his place if such person is recommended by the board or a Shareholder qualified to vote at the meeting has given not more than 21 and not less than 7 days notice of his intention to propose that person for appointment. In addition to any power to remove Directors conferred by the Act, the Company can pass a special resolution to remove a Director from office even though his time in office has not ended.
• 5.28 Any Director automatically stops being a Director if he gives the Company notice of resignation; all of the other Directors pass a resolution requiring the Director to resign; he is suffering from mental or physical ill health rendering him incapable of acting as a Director for a period of more than three months; he has missed Directors'meetings for a continuous period of six months without permission from the Directors and the Directors pass a resolution removing the Director from office; he is convicted of a criminal offence and the Directors pass a resolution removing the Director from office; in the case of a Director who is also an employee of the Company, he ceases to be an employee; a bankruptcy order is made against him or a composition is made with his creditors generally; or he is prohibited from being a Director under applicable law (including the Act).

Alternate Directors

• 5.29 Any Director can appoint any person approved by a resolution of the Board or another Director to act in his place (called an "alternate Director"). A Director appoints an alternate Director by sending a signed written notice of appointment to the Company's registered office or to an address specified by the Company.
• 5.30 The appointment of an alternate Director ends on the happening of any event which, if he were a Director, would cause him to vacate that office. It also ends if the alternate Director resigns his office by written notice to the Company, if his appointor stops being a Director, unless that Director

retires at a general meeting at which he is re-appointed or, if he is not a Director, if the Board revokes its approval of him by resolution. A Director can also remove his alternate Director by a written notice sent to the Company's registered office or to an address specified by the Company.

• 5.31 An alternate Director is entitled to receive notices of meetings of the Directors. He is entitled to attend and vote as a Director at any meeting at which the Director appointing him is not personally present and generally at that meeting is entitled to perform all of the functions of his appointor as a Director. If he is himself a Director, or he attends any meeting as an alternate Director for more than one Director, he can vote cumulatively for himself and for each other Director he represents but he cannot be counted more than once for the purposes of the quorum.
• 5.32 An alternate Director is entitled to be repaid expenses, to receive such remuneration as the Board may determine and to be indemnified by the Company to the same extent as if he were a Director.

Executive Directors

• 5.33 The Directors can appoint one or more Directors to any executive position, on such terms and for such period as they think fit. The Directors will decide how much remuneration a Director appointed to an executive office will receive (whether as salary, percentage of profit or otherwise) and whether they should receive any further benefits of any description.
• 5.34 If the Directors terminate the appointment, the termination will not affect any right of the company or the Director in relation to any breach of any employment contract which may be involved in the termination.

Directors' Fees

5.35 The total fees paid to all of the Directors (other than the Executive Directors) must not exceed £600,000 a year; or any higher sum decided on by an ordinary resolution at a general meeting.

Additional Remuneration

5.36 The Directors can award extra fees to any Director who, in their view, performs any special or extra services for the Company. Extra fees can take the form of salary, commission, profit-sharing or other benefits (and can be paid partly in one way and partly in another).

Expenses

5.37 The Director may be paid all travel, hotel and other expenses incurred in attending and returning from general meetings, meetings of the Directors or committees of the Directors or any other meetings which as a Director he is entitled to attend or otherwise in connection with the discharge of their duties.

Pensions and Gratuities for Directors

5.38 The Directors can decide to provide benefits, whether by the payment of gratuities or pensions or by insurance or otherwise, for any former Director of the Company who held an executive office or employment with the Company or any of its subsidiary undertakings or former subsidiary undertakings or any predecessor in business of the Company, or any relation or dependant of such a person.

Directors' Interests

• 5.39 A Director who is in any way, directly or indirectly, interested in a proposed or existing transaction or arrangement with the Company must declare, either in writing or at a meeting of the Directors, the nature and extent of his interest to the other Directors in accordance with the Act. An interest of a person who is connected with a Director shall be treated as an interest of the Director.
• 5.40 Subject to certain exceptions, the relevant Director and any other Director with a similar interest will not count in the quorum and will not vote on any resolution concerning a matter in which he has, directly or indirectly, an interest which is material.

5.41 If a question comes up at a meeting of the Directors about whether a Director (other than the chairman of the meeting) can vote or be counted in the quorum and the Director does not agree to abstain from voting on the issue or not to be counted in the quorum, the question must be referred to the chairman of the meeting. The chairman of the meeting's ruling about any other Director is final and conclusive unless the nature or extent of the Director's interest (so far as it is known to him) has not been fairly disclosed to the Directors in which case the question shall be decided by a resolution of the majority of the directors. If the question comes up about the chairman of the meeting, the chairman must withdraw from the meeting and the Directors will elect a vice chairman to consider the question instead of the chairman.

Borrowing Powers

5.42 The Directors must limit the borrowings of the Company and exercise all voting and other rights or powers of control exercisable by the Company in relation to its subsidiary undertakings so as to ensure that no money is borrowed if the total amount of the Group's borrowings then exceeds, or would as a result of such borrowing exceed, the greater of £285,000,000 or if greater two times the Company's adjusted capital and reserves. This limit can be exceeded if the consent of the Shareholders has been given in advance by passing an ordinary resolution. This limit does not include any borrowings owing by one member of the Group to another member of the Group.

Dividends and Distributions to Shareholders

• 5.43 Subject to the Act, the Company can declare dividends in accordance with the rights of the Shareholders by passing an ordinary resolution. No such dividend can exceed the amount recommended by the Directors.
• 5.44 If the Directors consider that the financial position of the Company justifies such payments and subject to the Act, they can pay the fixed or other dividends on any class of shares on the dates prescribed for the payment of those dividends; and pay interim dividends on shares of any class of any amounts and on any dates and for any periods which they decide.
• 5.45 If the Directors act in good faith, they will not be liable for any loss that any Shareholders may suffer because a lawful dividend has been paid on other shares which rank equally with or behind their shares.
• 5.46 All dividends will be declared and paid in proportions based on the amounts paid up on the shares during any period for which the dividend is paid. Sums which have been paid up in advance of calls will not count as paid up for this purpose. If the terms of any share say that it will be entitled to a dividend as if it were a fully paid up, or partly paid up, share from a particular date (in the past or future), it will be entitled to a dividend on this basis.
• 5.47 If a Shareholder owes the Company any money for calls on shares or money in any other way relating to his shares, the Directors can deduct any of this money from any dividend or other money payable to the Shareholder on or in respect of any share held by him. Money deducted in this way can be used to pay amounts owed to the Company.
• 5.48 Unless the rights attached to any shares, or the terms of any shares, say otherwise, no dividend or other sum payable by the Company on or in respect of its shares carries a right to interest from the Company.
• 5.49 Where any dividends or other amounts payable on a share have not been claimed, the Directors can invest them or use them in any other way for the Company's benefit until they are claimed. The Company will not be a trustee of the money and will not be liable to pay interest on it. If a dividend or other money has not been claimed for 12 years after being declared or becoming due for payment, it will be forfeited and go back to the Company unless the Directors decide otherwise.

Scrip Dividends

5.50 The Directors can offer Shareholders the right to choose to receive extra shares, which are credited as fully paid up, instead of some or all of their cash dividend. Before they can do this, Shareholders must have passed an ordinary resolution authorising the Directors to make this offer. The Directors can also offer Shareholders the right to request new shares instead of cash for all future dividends (if a share alternative is available), within a specified period, as long as that period ends no later than the beginning of the annual general meeting held five years after the resolution is passed.

• 5.51 A Shareholder will be entitled to ordinary shares whose total "relevant value" is as near as possible to the cash dividend he would have received (disregarding any tax credit), but not more than it. The relevant value of a share is the average value of the Company's ordinary shares for five consecutive dealing days selected by the Directors starting on or after the day when the shares are first quoted "ex dividend."
• 5.52 The new shares will rank equally in all respects with the existing fully paid up ordinary shares of that class at the time when the new shares are allotted. But, they will not be entitled to share in the dividend from which they arose, or to have new shares instead of that dividend.

Distributions on a Winding Up

If the Company is wound up, a liquidator may, with the approval of a special resolution and any other sanction required by applicable law, divide among the members the whole or any part of the assets of the Company for distribution in kind. For that purpose, the liquidator may value any assets and determine how the division shall be carried out.

• 5.53 The Directors can decide that new shares will not be available in place of any cash dividend. They can decide this at any time before new shares are allotted in place of such dividend, whether before or after Shareholders have opted to receive new shares.
• 5.54 The Directors may not proceed with any election unless the Company has sufficient reserves or funds that may be capitalised, and the Directors have authority to allot sufficient shares, to give effect to it after the basis of allotment is determined.

Indemnity

5.55 Subject to the restrictions of the Act, the Company can indemnify any Director or former Director of the Company or of any associated company against any liability; and can purchase and maintain insurance against any liability for any Director or former Director of the Company or of any associated company.

6. Share Option Plans

6.1 Background

The Company adopted the Intelligent Energy Holdings plc Share Option Scheme on 29 November 2010 (entitled the "2009 Scheme", notwithstanding its adoption in 2010) and the Intelligent Energy Limited 2001 Share Option Scheme on 29 September 2001 (the "2001 Scheme"). Set out below is a summary of the principal rules of the 2009 Scheme and 2001 Scheme.

6.2 The 2009 Scheme

Eligibility

Eligible participants are any employees or directors of one or more Group companies who commit at least 25 hours per week or, if less, 75 per cent. of their working time to the relevant company and who have no material interests in any Group company.

Grant of options

Participants are granted options to acquire fully paid Ordinary Shares (an "Option").

Options may take the form of enterprise management incentive ("EMI") options or non-tax favoured "unapproved" options.

Options may be granted (a) during the period of 42 days following the announcement of the Group's full or half-year results in any year; (b) during the period of 28 days following the Company's annual general meeting; and (c) on 1 March, 1 June, 1 September and 1 December in relation to employees who have commenced employment with a Group company since the last grant date.

No Options may be granted more than ten years after the date of adoption of the 2009 Scheme.

Exercise price

The price at which a participant may exercise his Option (the "Exercise Price") is an amount per Ordinary Share as determined by the Board which will not be less than market value on the date of grant in respect of the relevant Option.

Scheme limits

The Board shall at its sole discretion have the authority to set a limit on the aggregate number of shares over which Options may be granted under the Scheme, and in doing so the Board shall be entitled to (but not required) to take account of any options over Ordinary Shares granted (or Ordinary Shares awarded) by the Company under any other employees' share scheme.

Individual limits

The Board shall at its sole discretion have the authority to set a limit on the aggregate number of Shares the subject of Options granted to any one eligible participant and in doing so the Board shall be entitled (but not required) to take account of any options over Shares granted (or Shares awarded) by the Company under any other employees' share scheme.

Vesting of options

Options may be exercised (in whole or in part) at any time during a period on grant (subject, if applicable, to the satisfaction of performance conditions) and if the Option is not exercised within such period, it shall lapse.

If set, performance conditions may be waived or amended if an event occurs which causes the Company to consider that such performance conditions could not fairly or reasonably be met, provided that any amended conditions shall not be more difficult to satisfy than the original conditions were intended to be at the time of their imposition.

Leaving employment

Employees who leave employment within the Group by reason of death, injury, ill-health, disability, redundancy, or because the company they work for ceases to be within the Group, retain their options and may exercise them at any time before the expiry of the normal period for exercise, or within 12 months of their death.

The vesting of an Option in the case of redundancy may be subject to a time pro-rata reduction. Options granted to employees who leave for any other reason will, if they have already become exercisable, remain exercisable until the expiry of the normal period for exercise, but otherwise will automatically lapse (unless determined otherwise by the Board).

Corporate events

In the event of a change of control of the Company or compromise or arrangement in connection with a scheme for the reconstruction of the Company or its amalgamation, or a voluntary winding-up, Options shall become exercisable within specified periods and shall lapse to the extent not exercised at the end of the applicable period.

Alternatively, on a change of control, by agreement with the acquiring company, participants may release their Options in consideration of the grant of equivalent options over shares in the acquiring company.

Dividends and other share rights

Shares allotted under the 2009 Scheme will rank pari passu in all respects with the shares in issue on the date on which the Option is exercised save that they will not rank for any dividend or other distribution declared or made prior to, or by reference to a record date prior to, the date on which the Option is exercised.

Variation of share capital

In the event of any variation in the share capital of the Company by way of capitalisation issue, rights issue, open offer, subdivision, consolidation, reduction of capital or otherwise the Exercise Price and/or the number or nominal amount or class of shares subject to any Option will be varied with effect from the record date for that variation or, if there is no record date, the date on which the variation takes effect (and, where necessary, retrospectively in respect of any Option which has been exercised since that date) and otherwise in such manner as the Board shall determine at its sole discretion.

Non-transferability of options

Options are neither transferable (except in the case of the death of the participant, to the participant's personal representatives) nor pensionable.

Administration and amendment of the 2009 Scheme

The Board may at any time amend the 2009 Scheme.

However, no amendments may be made which are to the benefit of participants of the 2009 Scheme, expect in respect of (a) minor amendments to benefit the administration of the 2009 Scheme (b) taking account of any change in legislation or (c) obtaining or maintaining favourable tax, exchange control or regulatory treatment for participants or the Group.

No amendment shall, however, be made which adversely effects the subsisting rights of the participants without their prior consent.

6.3 The 2001 Scheme

Eligibility

Eligible participants are any employees or directors (whether or not executives) of any company within the Group.

Grant of options

Participants are granted options to acquire fully paid Ordinary Shares (an "Option"). The 2001 Scheme is closed to grants of new options.

Dividends and other share rights

Shares allotted under the 2001 Scheme will rank equally in all respects with all other shares for the time being in issue (except for any rights attaching to shares by reference to a record date prior to the allotment or transfer of such shares).

Vesting of options

Options become exercisable on the third anniversary of the date of grant, on a listing, or on a change of control.

No Options may be exercised after the tenth anniversary of the date of grant.

In addition, the 2001 Scheme provides that the Board may make the exercise of any Option subject to the satisfaction of further conditions, as the Board determines in its absolute discretion, and which should have been notified to the employee on the date of grant.

Leaving employment

Employees who leave employment within the Group by reason of death, injury, ill-health, disability, redundancy, or because the company they work for ceases to be within the Group, retain their options and may exercise them at any time before the expiry of the normal period for exercise, or earlier if the Board determines.

Options belonging to employees who leave for any other reason automatically lapse, unless otherwise determined by the Board.

Corporate events

In the event of a change of control of the Company, Options shall become exercisable during the period which commences on the change of control and ends on such date as the Board determines. The Option shall lapse to the extent not exercised at the end of the applicable period.

Variation of share capital

If there is a rights or capitalisation issue, sub-division, consolidation, reduction or other variation of the Company's ordinary share capital, the Board may adjust the number of shares subject to an Option and/or the subscription price, in such manner as the Board may determine to be fair and reasonable.

Non-transferability of options

Options granted under the 2001 Scheme shall be personal to the participant and are not transferable.

Administration and amendment of the 2001 Scheme

The Board may at any time amend the 2001 Scheme. No amendment shall, however, be made to rule 3 of the 2001 Scheme (Subscription price) without prior approval of the Company by way of ordinary resolution.

6.4 The 2013 Management Incentive Plan

Background

On 7 March 2014, HMRC approved the Rules of the Intelligent Energy 2013 Management Incentive Plan which had been adopted by the Company on 20 February 2014 (the "2013 Management Incentive Plan"). Operation of the 2013 Management Incentive Plan is overseen by the Board. The Board does not intend to make any further awards under the 2013 Management Incentive Plan. Following Admission, the Board intends that incentive awards will be granted under the terms of the new share plans proposed to be adopted by the Company shortly following Admission, the terms of which are summarised in paragraphs 6.5 to 6.9 below.

The 2013 Management Incentive Plan enabled 31 selected employees (including Dr. Henri Winand and John Maguire) to receive Award Shares to the extent that relevant performance conditions are met. In the event of a listing of the Company's Ordinary Shares, the principal performance condition relates to the level of the Offer Price. With the Offer Price being 340 pence, the total number of Award Shares available under the 2013 Management Incentive Plan is 7,257,969.

Awards granted under the 2013 Management Incentive Plan are structured as options whereas awards granted under the Appendix to the 2013 Management Incentive Plan are structured as share awards. The Appendix has not been approved by HMRC and no award granted under the Appendix will benefit from tax relief.

The majority of awards granted under the 2013 Management Incentive Plan are structured as share awards under the Appendix. In order to take advantage of certain HMRC approved tax savings, a small proportion of the Award Shares will be issued pursuant to the exercise by the applicable employee of share options granted under the HMRC approved section of the 2013 Management Incentive Plan (at an option exercise price of £1.00 per Award Share).

Participation in the 2013 Management Incentive Plan is not a transferable right (except on death) and is not a pensionable benefit.

Vesting of Award Shares

Admission constitutes an 'Exit Event' which triggers vesting of the Award Shares (which, in the case of those structured as options, means that the option becomes exercisable). One third of the Award Shares shall vest on Admission (and, in the case of options, become exercisable), with a further one third vesting on the first anniversary of Admission and the remaining third vesting on the second anniversary of Admission.

Unless the Board determines otherwise, vesting of Award Shares following Admission will be subject to the relevant employee's continued employment with the Group unless such employee has ceased to be employed as a result of death or disability as set out below.

Ordinary Shares will be issued or transferred to the relevant employee within 30 days of vesting (in the case of share awards) or exercise (in the case of options), as the case may be.

Ability for the Company to pay cash instead of issuing Award Shares

The Company has the discretion to pay to a participating employee a cash amount in lieu of issuing some or all of the Award Shares otherwise due to that employee, with such cash amount being equal to the market value of the Award Shares that are foregone.

Each participant indemnifies the Group for any tax liability relating to the vesting of Award Shares and the Company is authorised to sell sufficient Ordinary Shares that would otherwise be acquired by a participant pursuant to the vesting of Award Shares to realise an amount equal to any such tax liability.

Leaving employment

If a participant leaves the Group for any reason other than death or disability, any unvested portion of his Award Shares will lapse. If the reason for leaving is death or disability, the number of Ordinary Shares in respect of which the Award Shares vest will be determined by the Board, taking into account the extent to which any performance condition has been satisfied and the time that has elapsed from the grant date to the date of cessation. To the extent the option does not vest in full, the remainder will lapse. In the case of an option, if the reason for leaving is death or disability, the option shall be exercisable 12 months from the date of cessation (in the event of death) and 6 months (or such longer period as the Board may determine) from the date of cessation (in the event of disability). If the option is not exercised in the applicable time periods, it shall lapse.

Corporate events

Award Shares will generally vest early on a takeover, merger, scheme of arrangement, voluntary winding up of the Company or other corporate reorganisation (not being an internal reorganisation). In the event of a change of control, employees may be able to exchange their Award Shares for awards over shares in the acquiring company. Vested options remain exercisable for one month.

Variation of capital

If there is a rights or capitalisation issue, sub-division, consolidation, reduction or other variation of the Company's ordinary share capital, or demerger or payment of a special dividend which would otherwise materially affect the value of an Award Share, the Board may adjust the number of Award Shares and exercise price (in the case of an option) or the terms of the Award Shares granted under the Appendix appropriately.

Rights attaching to shares

Award Shares, when issued, will rank alongside the other Ordinary Shares then in issue, except that they will not rank for any voting, dividend or other rights attaching to the Ordinary Shares by reference to a record date preceding the date of issue of the Award Share in question.

6.5 Proposed share incentive arrangements following Admission

The Company proposes to adopt the following employees' share plans shortly after Admission:

• (a) the Intelligent Energy 2014 Performance Share Plan (the "PSP");
• (b) the Intelligent Energy 2014 Deferred Bonus Plan (the "DBP"); and
• (c) the Intelligent Energy 2014 Save As You Earn Scheme (the "SAYE").

The operation of the Executive Plans will be supervised by the Board or any duly authorised committee of the Board. In practice it is intended that the operation of the Executive Plans will be supervised by the Remuneration Committee, who will exercise all relevant discretions in relation to them, and decisions in relation to participation by executive directors will always be taken by the Remuneration Committee.

6.6 The Intelligent Energy 2014 Performance Share Plan

The Board intends to grant to the Chief Executive Officer, the Chief Financial Officer and other members of management as soon as practicable after Admission awards under the PSP in respect of the Company's financial year ending in September 2015 (the "2015 PSP Awards").

The Board may also grant to the Chief Executive Officer, the Chief Financial Officer and other members of management as soon as practicable after Admission awards under the PSP to incentivise those people to deliver medium term growth in shareholder value (the "PSP Admission Awards")

Except in relation to any PSP Admission Awards, awards under the PSP (including the 2015 PSP Awards) will not ordinarily be granted to a participant in respect of any financial year of the Company over Ordinary Shares with a market value (as determined by the Board) in excess of 150 per cent. of salary. In exceptional circumstances, awards under the PSP may be granted to a participant in respect of a financial year of the Company over Ordinary Shares with a market value of up to 300 per cent. of salary. The final quantum of each award under the PSP will be determined by the Board.

The Board proposes that the PSP Admission Awards will not be subject to this limit and will not count towards this limit. Whilst the Board considers that, to incentivise and retain key employees, it needs flexibility, the Board will not issue shares under both the 2013 Plan and the PSP Admission Awards. The number of employees currently in the key employees pool of the PSP Admission Awards is 31. The maximum value of Ordinary Shares (calculated by reference to the Offer Price) over which the PSP Admission Awards may be granted will be £5.66 million.

Awards granted under the PSP will vest subject to the satisfaction of one or more performance conditions over a performance period, which will determine the proportion (if any) of the award to vest.

Any performance condition may be amended or substituted if one or more events occur which cause the Board to consider that an amended or substituted performance condition would be more appropriate. Any amended or substituted performance condition would not be materially less difficult to satisfy.

Awards under the PSP will normally vest as soon as practicable after the end of any performance period (or on such date as the Board shall determine) and then only to the extent that any performance condition has been satisfied. Awards in the form of options will then be exercisable until the tenth anniversary of the grant date.

The PSP Admission Awards will vest on the earlier of: (i) the third anniversary of the award date; and (ii) a fundraising by the Company or the occurrence of a liquidity event as determined by the Board. The PSP Admission Awards will vest on the third anniversary of the award date only if the market value of an Ordinary Share at that date is at least £5. If the PSP Admission Awards are to vest on the occurrence of a fund raising or liquidity event before the third anniversary of the award date, they will vest only if the market value of an Ordinary Share at the vesting date is at least equal to such value as is determined on a straight line basis between the Offer Price at the date of Admission and £5 on the third anniversary of the award date. The market value of an Ordinary Share for these purposes will be determined by the Board, which may take an average of the price of an Ordinary Share over a specified period for these purposes.

It is intended that the 2015 PSP Awards to be granted to the Chief Executive Officer and Chief Financial Officer will be subject to:

• a performance condition based on revenue as regards at least 50 per cent. of each 2015 PSP Award; and
• a performance condition based on key strategic measures as regards the balance of each 2015 PSP Award.

For instance, key strategic measures may include targets such as:

• (a) growth in additional car OEMs that have signed JDAs;
• (b) contracted forward order book of UppTM and derivative consumer electronic products;

• (c) annual growth in DP&G power generating sites under management;

• (d) increased utilisation of existing DP&G power generation assets generating incremental revenues;

• (e) the DP&G Division entering into new geographies and/or industries;
• (f) key technology and operational milestones:
• (i) a CE superfuel programme formalised;
• (ii) a CE embedded prototype proof of concept;
• (iii) the production of disposable cartridges with semi-automatic processes;
• (iv) development milestones on power density for the Company's EC technology; and
• (v) an increase in the number of fuel cell powered DP&G sites under management.

It is also intended that the performance conditions for the 2015 PSP Awards will be measured over the three financial years ending in September 2015, 2016 and 2017, with those awards vesting (to the extent the performance conditions are satisfied) on the later of the third anniversary of the grant date and the date on which the performance conditions are assessed.

6.7 The Intelligent Energy 2014 Deferred Bonus Plan

It is intended that a proportion of any bonus that an employee earns in respect of a financial year of the Company may, at the discretion of the Board, be deferred into an award over Ordinary Shares granted under the DBP, and the Board shall determine the market value of Ordinary Shares to be applied in determining the number of Ordinary Shares subject to an award.

Awards under the DBP are intended to be made to executive directors in respect of 50 per cent. of any bonus earned for the Company's financial year ending on 30 September 2015.

Awards under the DBP will normally vest on the second anniversary of the grant date (or on such later date as the Board determines). Once vested, awards granted in the form of options will be exercisable until the tenth anniversary of the grant date.

6.8 Common terms of the proposed Executive Plans

Eligibility

Any employee of the Company or any employee of its subsidiaries will be eligible to participate in the Executive Plans at the discretion of the Board.

Form of Award

Awards under the Executive Plans may be made in the form of:

• (a) a conditional right to acquire Ordinary Shares at no cost to the participant ("Conditional Award");
• (b) an option to acquire Ordinary Shares at no cost to the participant or with an exercise price per Ordinary Share equal to the nominal value of an Ordinary Share ("Nil-Cost Option"); or
• (c) in respect of the PSP, a right to acquire a cash amount which relates to the value of a certain number of notional Ordinary Shares ("Cash Award").

Conditional Awards, Nil-Cost Options and Cash Awards are together referred to as "Awards" and each an "Award", as appropriate.

Grant and terms of Awards

Awards may only be granted within the six week period following Admission, the announcement of the Company's results for any period, or on any day on which the Board determines that exceptional circumstances exist, unless the grant of Awards is restricted, in which case Awards will be granted within six weeks of the day on which a restriction on the grant of Awards is lifted.

The Board may determine that the number of Ordinary Shares to which a participant's Award relates will increase to take account of dividends paid on vested Ordinary Shares from the grant date until the date of vesting, on such terms as it determines (which may assume the reinvestment of dividends into Ordinary Shares). The Board may determine that the participant will receive the cash equivalent of the additional Ordinary Shares.

Awards are not transferable (other than on death). No payment will be required for the grant of an Award. Awards will not form part of pensionable earnings. Awards may be granted over newly issued Ordinary Shares, Ordinary Shares held in treasury and Ordinary Shares purchased in the market.

Overall Executive Plan limit

The Executive Plans will include a limit such that in any ten year period, the number of Ordinary Shares which may be issued under the Executive Plans and under any other employees' share plan adopted by the Company may not exceed 10 per cent. of the issued Ordinary Share capital of the Company from time to time. Ordinary Shares held in treasury will be treated as newly issued for the purposes of this limit until such time as guidelines published by institutional investor representative bodies determine otherwise. Ordinary Shares issued or committed to be issued to satisfy awards granted prior to Admission and the PSP Admission Awards will not count towards this limit.

Reduction of awards

It is intended that the Board may, in its absolute discretion, determine at any time prior to the vesting of an Award under an Executive Plan to:

• (a) reduce the number of Ordinary Shares to which the Award relates;
• (b) cancel the Award; or
• (c) impose further conditions on the Award,

in circumstances in which the Board considers such action is appropriate.

Cessation of employment as a "good leaver"

If a participant ceases to be employed by the Group by reason of death, ill-health, injury, disability, the sale of the entity that employs him out of the Group or for any other reason at the Board's discretion (except where a participant is summarily dismissed), unvested Awards under the Executive Plans will usually be retained until the normal vesting date, unless the Board determines that the Award will vest earlier. The extent to which an unvested Award under the PSP may vest following cessation in these circumstances will be determined by the Board, taking into account the extent to which any performance condition is satisfied at the end of the performance period or, as appropriate, at the date on which the participant ceases to be employed by the Group. Unless the Board in its discretion determines otherwise, it shall also take into account the period that has elapsed from the date of grant until the date of cessation of employment in determining the extent to which an Award under the PSP vests. Awards under DBP will vest in full in these circumstances at the applicable time, unless the Board decides that the extent of vesting should be reduced to take into account the period that has elapsed from the date of grant until the date of cessation.

Cessation of employment in other circumstances

If a participant ceases employment with the Group in any other circumstances, an Award (whether vested or not vested) will lapse on the date on which the participant ceases employment.

Change of control and variation of the Company's share capital

If there is a change of control of the Company, Awards will vest as soon as practicable after such event. The number of Ordinary Shares in respect of which a PSP Award will vest will be determined by the Board, taking into account the extent to which any performance condition has been satisfied and, unless the Board determines otherwise, the period of time from the grant date to the date of the relevant event. Awards under the DBP will vest in full. Nil-Cost Options will then be exercisable for a period of one month.

If other corporate events occur such as a demerger, delisting, special dividend or other event which, in the opinion of the Board may affect the current or future value of Ordinary Shares, the Board may determine that Awards will vest. PSP Awards will vest subject to the satisfaction of any performance condition and, unless the Board determines otherwise, the period of time from the grant date to the date of the relevant event. Awards under the DBP will vest in full. Nil-Cost Options will then be exercisable for a period of one month.

In the event of a variation of the Company's share capital or a demerger, delisting, special dividend, rights issue or other event, which may, in the Board's opinion, affect the current or future value of Ordinary Shares, the number of Ordinary Shares subject to an Award (and/or in respect of PSP Awards, any performance condition) may be adjusted.

Amendment and termination of the Executive Plans

The Board may amend any Executive Plan at any time.

Each Executive Plan will usually terminate on the tenth anniversary of its adoption but the rights of existing participants will not be affected by any termination.

6.9 The Intelligent Energy 2014 Save As You Earn Scheme

The proposed SAYE will be a tax-advantaged "all-employee" share option plan, under which all eligible employees (including executive directors) may be invited to apply for options over Ordinary Shares with a per share option price of not less than 80 per cent. of the market value of an Ordinary Share when the invitation is issued. As part of the application process, employees must enter into a savings contract under which they agree to save up to £500 per month (or such other limit as may be permitted by the tax legislation governing the SAYE from time to time) for three or five years (a "Sharesave Contract"). The number of Ordinary Shares over which an option is granted will be determined by the Board at the grant date by reference to the amount that the employee has agreed to save under his Sharesave Contract. Options must be granted on the same terms to all eligible employees.

In any ten year period, the number of Ordinary Shares which may be issued under the SAYE and under any other employees' share plan adopted by the Company may not exceed 10 per cent. of the issued ordinary share capital of the Company from time to time. Ordinary Shares held in treasury will be treated as newly issued for the purposes of this limit until such time as guidelines published by institutional investor representative bodies determined otherwise. Ordinary Shares issued or committed to be issued to satisfy awards granted prior to Admission and the PSP Admission Awards will not count towards this limit.

Ordinarily, an option may be exercised within six months of the maturity of the related Sharesave Contract. Earlier exercise is permitted if an employee ceases to be employed by the Group in certain circumstances.

If there is a change of control or a voluntary winding-up of the Company, options may be exercised within a period of up to six months of the occurrence of that event. In the event of a variation of the Company's share capital, the number of Ordinary Shares subject to an option and the option price may be adjusted by the Board.

The Board may amend the SAYE at any time.

The SAYE will usually terminate on the tenth anniversary of its adoption but the rights of existing participants will not be affected by any termination.

6.10 As at the date of this Prospectus, the following options to acquire new Ordinary Shares have been granted to directors, employees and former employees of the Group and remain outstanding:

Number of	Exercise price per
Ordinary Shares	Ordinary Share	Exercise Period
1,050,000	80p	10 March 2005 to 10 March 2015
950,000	80p	27 April 2007 to 12 May 2015
350,000	80p	15 July 2005 to 15 July 2015
50,000	80p	3 April 2010 to 3 April 2017
16,250	90p	11 July 2012 to 11 July 2014
16,250	90p	11 July 2013 to 11 July 2015
10,000	90p	11 July 2012 to 11 July 2014
10,000	90p	11 July 2013 to 11 July 2015
73,500	90p	1 August 2010 to 1 August 2017
6,000	90p	1 August 2010 to 1 August 2017
175,000	150p	30 March 2011 to 27 June 2015
115,000	150p	30 March 2011 to 27 June 2016
115,000	150p	28 June 2013 to 27 June 2015
115,000	150p	28 June 2014 to 27 June 2016
810,000	100p	9 July 2014 to 6 April 2017(1)

(1) One third of these options (awarded pursuant to the 2013 Management Incentive Plan) become exercisable on Admission, with a further third becoming exercisable on the first anniversary of Admission and the remaining third becoming exercisable on the second anniversary of Admission

7. Directors' interests and major Shareholders

7.1 The table below sets out the interests of the Directors (all of which are beneficial or are interests of a person connected with the Director) as at 3 July 2014 (being the latest practicable date prior to the publication of this Prospectus) and as they are expected to be on Admission:

			Percentage of
Ordinary	Ordinary	Ordinary	Ordinary
Shares	Shares	Shares	Shares(1),(2),(3)
40,000	0.03	40,000	0.02
25,000	0.02	333,431(4)	0.18
nil	0.00	nil(5)	0.00
1,545,834	0.98	1,245,834	0.66
25,450,096	16.09	25,450,096	13.54
20,000	0.01	20,000	0.01
	Number of	As at 3 July 2014 Percentage of	As at Admission Number of

(1) Taking into account the New Ordinary Shares

(2) Taking into account 12,526,400 Ordinary Shares to be issued pursuant to the conversion of the Convertible Loan Notes of principal value £30,190,831 outstanding as at the date of this Prospectus which, together with accrued interest (net of applicable withholding taxes), will convert into Ordinary Shares automatically on Admission

(3) Taking into account 1,147,487 Award Shares that vest on Admission under the 2013 Management Incentive Plan

(4) Includes 308,431 Award Shares to be issued to Dr. Winand on Admission

(5) All Award Shares vesting to John Maguire on Admission will be settled in cash by the Company at a value of 340 pence per Award Share, resulting in net proceeds for John Maguire of £324,604

• (6) The Ordinary Shares in which Mr. Guidotti is interested are comprised of 25,390,096 Ordinary Shares held by Evolution Placements Corporation (Mr. Guidotti is an investment and business adviser to the shareholders of Evolution Placements Corporation) and 60,000 Ordinary Shares held by Prismoy International S.A. (a nominee company of which Mr. Guidotti is the beneficial owner)
• 7.2 Save as disclosed in paragraph 7.1 above, no Director or any person connected with any Director within the meaning of section 252 of the Act has any interests (beneficial or otherwise) in the share capital of the company or any other member of the Group.

7.3 The Directors have the following outstanding options over Ordinary Shares (or rights to Award Shares) as at 3 July 2014 (being the latest practicable date prior to the publication of this Prospectus):

	Number of
	Ordinary	Exercise
Name of Director	Shares	price	Exercise period
Flavio Guidotti	350,000	80p	15 July 2005 to 15 July 2015
Flavio Guidotti	175,000	150p	30 March 2011 to 27 June 2015
Flavio Guidotti	115,000	150p	30 March 2011 to 27 June 2016
Dr. Henri Winand	1,763,769(1)(2)		As summarised at paragraph 6.4 above(3)
John Maguire	570,405(1)(4)(5)		As summarised at paragraph 6.4 above(3)

• (1) Includes 30,000 options granted over Ordinary Shares under the 2013 Management Incentive Plan, of which one third become exercisable on Admission (at an option price of £1.00 per Award Share) with a further third becoming exercisable on the first anniversary of Admission and the remaining third becoming exercisable on the second anniversary of Admission
• (2) Includes 1,733,769 Award Shares (that are not options) vesting in favour of Henri Winand, a third of which will vest on Admission, a further third of which will vest on the first anniversary of Admission and the remaining third of which will vest on the second anniversary of Admission. Of those Award Shares that vest on Admission, 269,492 Award Shares will be settled by way of satisfying in cash the tax liabilities arising in respect of Award Shares vesting in favour of Dr. Winand on Admission
• (3) Including as to vesting or exercise periods
• (4) Includes 540,405 Award Shares (that are not options) vesting in favour of John Maguire, a third of which will vest on Admission, a further third of which will vest on the first anniversary of Admission and the remaining third of which will vest on the second anniversary of Admission
• (5) All Award Shares vesting to John Maguire on Admission will be settled in cash by the Company at a value of 340 pence per Award Share.
• 7.4 As at 3 July 2014 (the latest practicable date prior to publication of this Prospectus) and insofar as is known to the Company, the following persons have, directly or indirectly, interests in 3 per cent. or more of the issued share capital of the Company, and will have the following interests immediately following Admission:

		Percentage of
	Issued		Issued
Number of	Ordinary	Number of	Ordinary
Ordinary	Share	Ordinary	Share
Shares	Capital	Shares	Capital
27,408,010	17.33	27,408,010	14.58
25,390,096	16.05	25,390,096	13.50
21,784,928	13.77	21,784,928	11.59
12,002,650	7.59	12,002,650	6.38
10,852,618	6.86	10,852,618	5.77
6,900,000	4.36	6,900,000	3.67
		Interests at 3 July 2014 Percentage of	Interests immediately following Admission(1),(2),(3)

• (1) Taking into account the New Ordinary Shares
• (2) Taking into account 12,526,400 Ordinary Shares to be issued pursuant to the conversion of the Convertible Loan Notes of principal value £30,190,831 outstanding as at the date of this Prospectus which, together with accrued interest (net of applicable withholding taxes), will convert into Ordinary Shares automatically on Admission
• (3) Taking into account 1,147,487 Award Shares that vest on Admission under the 2013 Management Incentive Plan
• (4) Held by various funds and accounts managed by F&C Asset Management
• 7.5 Save as disclosed in paragraph 7.4 above, the Company is not aware of any person who will, immediately following Admission, hold directly or indirectly, voting rights representing 3 per cent. or more of the issued share capital of the Company to which voting rights are attached or could directly or indirectly, jointly or severally, exercise control over the Company.

• 7.6 No Director nor any person connected with any Director within the meaning of section 252 of the Act has any interests (beneficial or otherwise) in the share capital of any of the shareholders listed in paragraph 7.4 above.

• 7.7 Other than as summarised in paragraph 7.8 below with respect to the right of each of Meditor European Master Fund Limited ("Meditor"), Evolution Placements Corporation ("EPC") and Yukos International UK B.V. ("Yukos") to make appointments to the Board, none of the major shareholders of the Company has voting rights in respect of the share capital of the Company which differ from any other shareholder of the Company.

• 7.8 In accordance with subscription agreements between the Company and each of Meditor, EPC and Yukos (each of which is dated 21 October 2005), Meditor, EPC and Yukos is each individually entitled to appoint one person to be a non-executive director of the Company, subject to that person satisfying any relevant requirements of the London Stock Exchange and so long as Meditor, EPC or Yukos (as applicable) holds shares and/or current options equal to 10 per cent. or more of the shares in the Company on a fully diluted basis. Meditor, EPC and Yukos is entitled to remove any person it so appoints and, in the event that a person it appointed ceases to be a director, to appoint another person in his place. Any appointment or removal will be effected by serving written notice on the Company. If Meditor, EPC or Yukos (as applicable) ceases to hold 10 per cent. or more of the shares in the Company on a fully diluted basis it will procure the resignation of any person it has appointed as a director of the Company within a reasonable period of receipt of written notice from the Company requiring it to do so.
• 7.9 Flavio Guidotti was appointed to the Board as a non-executive director by EPC under the appointment right summarised above. Neither Meditor nor Yukos has appointed a director to the Board (and Yukos does not currently hold the requisite number of shares in order to make an appointment).
• 7.10 Save as set out in paragraph 7.9 above, no Director was selected as a director of the Company pursuant to any arrangement or understanding with any major shareholder, customer, supplier or other person having a business connection with the Group or the Company.
• 7.11 The Company and the Directors are not aware of any arrangements, the operation of which may at a subsequent date result in a change of control of the Company.
• 7.12 No Director has any interest in any transactions which are or were unusual in their nature or conditions or which are or were significant to the business of the Group and which were effected by any member of the Group in the current or immediately preceding financial year or which were effected during an earlier financial year and which remain in any respect outstanding or unperformed.
• 7.13 Save as set out in paragraph 7.9 above, there are no potential conflicts of interest between any duties which the Directors owe to the Company and their private interests or other duties.
• 7.14 The Directors currently hold, and have during the five years preceding the date of this Prospectus held, the following directorships and partnerships (other than their directorships of the Company and other members of the Group):

Name	Current directorships/partnerships	Previous directorships/partnerships
Paul Heiden	London Stock Exchange PLC London Stock Exchange Group PLC Meggitt PLC	FKI Limited Bridon Limited Danks Holdings Limited Fisher-Karpark Holdings Limited FKI Engineering Limited FKI Nominees Limited Glory Global Solutions (Topco) Limited United Utilities PLC United Utilities Group PLC United Utilities Water PLC FKI Industries Limited
Dr. Henri Winand	None

Name	Current directorships/partnerships	Previous directorships/partnerships
John Maguire	Jee Limited	Emerald Automotive Design Limited
Michael Muller	ARM Ltd	Linaro Ltd
	ARM Holdings PLC
	Cambridge Innovation Capital PLC
Dr. Caroline Brown	Mirland Development Corporation plc The Penspen Group Limited	KBC Advanced Technologies plc KBC Advanced Technologies Sdn Bhd KBC Advanced Technologies SL KBC Process Technology Limited Bridge Energy ASA Enquest Dons Limited
Zarir Cama	Asia House	HSBC Global Operations Company Ltd
	KGVK UK Ltd Canopus Global Ltd	HFC Bank Ltd
	Tata Capital PLC
	HSBC Bank Bermuda Limited
	SABB Limited
	HSBC Private Banking Holdings
	(Suisse) SA I.B. Tauris & Co Limited
	National Youth Orchestra of
	Great Britain (The)
	Old Paulites Limited
	Tata Capital Pte Ltd Singapore
	Tata Capital Markets Pte Ltd Singapore
	Tata Capital Advisors Pte Ltd IL & FS Wind Power Management
	Pte Ltd
	IL & FS Wind Power Trust Pte Ltd
Flavio Guidotti	Explotación San Pedro S.H.	Prinex S.A.
		Tennis Club Argentino
		Estancia Cristina S.A.
Martin Bloom	Emblem Technology Partners Ltd	CAP Partners LLP
	Emblem Ventures Ltd	Oled Power Ltd
	Eton Court Ltd Enterprise Accelerator Ltd
	Bloom & TSE Ltd
	Lisa TSE Ventures Ltd
	Martin Bloom Photography Ltd
	CLC Ventures Ltd
	ReneSola Ltd
	Starcom Systems Ltd
Dr. Philip Mitchell	Root Ten Limited	None

• 7.15 Within the period of five years preceding the date of this Prospectus, no Director has:
• (a) had any convictions in relation to fraudulent offences;
• (b) been declared bankrupt or been a director or member of the administrative, management or supervisory body of a company or a senior manager of a company at the time of any bankruptcy, receivership or liquidation of such company;

• (c) been subject to any official public incrimination and/or sanctions by any statutory or regulatory authorities (including designated professional bodies); or

• (d) been disqualified by a court from acting as a member of the administrative, management or supervisory bodies of an issuer or from acting in the management or conduct of the affairs of any issuer.

• 7.16 There are no outstanding loans or guarantees provided by any member of the Group for the benefit of any of the Directors nor are there any loans or any guarantees provided by any of the Directors for any member of the Group.

8. Directors' Service Contracts/Letters of appointment and emoluments

• 8.1 Paul Heiden was appointed as non-executive Chairman of the Company on 28 September 2012. Pursuant to a non-executive Chairman letter of appointment dated 21 September 2012, Mr. Heiden is entitled to remuneration of £100,000 per annum. His appointment is for a period of three years and may be terminated at any time by either party giving to the other party three months' written notice. The Board has approved a resolution that, with effect from and conditional on Admission, his fees be increased to £150,000 per annum and that he receive a one-off cash bonus of £50,000.
• 8.2 Dr. Henri Winand entered into a service agreement with the Company dated 19 June 2014. Under this agreement, he is employed as Chief Executive Officer, a position he has held since 1 September 2006. The agreement may be terminated at any time by either party giving twelve months' written notice. The current salary payable to him is £200,000 per annum, which will increase to £350,000 upon Admission. In addition, he is entitled to receive the following benefits: (i) at the discretion of the Remuneration Committee, eligibility to participate in an annual and deferred bonus plan; (ii) a performance share plan subject to performance targets measured over a 3 year period; (iii) annual contributions into the group personal pension plan or alternatively a cash allowance at a rate equal to 4.5 per cent. of his gross annual basic salary; (iv) entitlement to participate in any private medical expenses insurance scheme (including his spouse or partner and any dependent children aged under 21) operated by the Company, subject to the terms of that scheme; and (v) entitlement to participate in the Company's group life insurance scheme, subject to the terms of that scheme. If the agreement is terminated by notice, the Company may put Dr. Winand on garden leave during all or part of his notice period. Alternatively, the Company is entitled to terminate the agreement with immediate effect by payment of an amount equal to one year's salary in lieu of notice (which sum may be paid in monthly instalments, in which case it is subject to deductions for any sums earned by the executive in the period between the date six months after the termination of employment and the date when notice would have expired).

• 8.3 John Maguire entered into a service agreement with the Company dated 19 June 2014. Under this agreement he is employed as Chief Financial Officer, a position he has held since 16 January 2012, with his appointment to the Board effective from 20 January 2012. His service agreement may be terminated at any time by either party giving twelve months' written notice. The current salary payable under the agreement is £180,000 per annum, which will increase to £275,000 upon Admission. In addition, he is entitled to receive the following benefits: (i) at the discretion of the Remuneration Committee, eligibility to participate in an annual and deferred bonus plan; (ii) a performance share plan subject to performance targets measured over a 3 year period; (iii) annual contributions into the group personal pension plan or alternatively a cash allowance at a rate equal to 3 per cent. of his gross annual basic salary; (iv) entitlement to participate in any private medical expenses insurance scheme (including his spouse or partner and any dependent children aged under 21) operated by the Company, subject to the terms of that scheme; and (v) entitlement to participate in the Company's group life insurance scheme, subject to the terms of that scheme. If the agreement is terminated by notice, the Company may put Mr. Maguire on garden leave during all or part of his notice period. Alternatively, the Company is entitled to terminate the agreement with immediate effect by payment of an amount equal to one year's salary in lieu of notice (which sum may be paid in monthly instalments, in which case it is subject to deductions for any sums earned by the executive in the period between the date six months after the termination of employment and the date when notice would have expired).

• 8.4 Michael Muller was appointed as a non-executive Director of the Company on 22 June 2012. Pursuant to a non-executive Director letter of appointment dated 12 April 2012, he receives remuneration of £40,000 per annum. In addition he receives £6,000 per annum in his capacity as Senior Independent Director pursuant to a non-executive director fees letter dated 5 February 2014. His appointment is for a period of three years and may be terminated at any time by either party giving to the other party three months' written notice. The Board has approved a resolution that, with effect from and conditional on Admission, his basic fees be increased to £45,000 per annum with an additional £8,000 per annum for acting as Senior Independent Director.

• 8.5 Dr. Caroline Brown was appointed as a non-executive Director of the Company on 2 May 2014. Pursuant to a non-executive Director letter of appointment dated 24 April 2014, she receives remuneration of £40,000 per annum. In addition she will receive £6,000 in respect of chairing any committee of the Board. Her appointment is for a period of three years and may be terminated at any time by either party giving to the other party three months' written notice. The Board has approved a resolution that, with effect from and conditional on Admission, her basic fees be increased to £45,000 per annum with an additional £8,000 per annum in respect of chairing any committee of the Board.
• 8.6 Zarir Cama was appointed as a non-executive director of the Company on 22 June 2012. Pursuant to a non-executive Director letter of appointment dated 12 April 2012, he receives remuneration of £40,000 per annum. In addition he also receives £6,000 per annum in his capacity as Chair of the Remuneration Committee pursuant to a non-executive director fees letter dated 16 January 2014. His appointment is for a period of three years and may be terminated at any time by either party giving to the other party three months' written notice. The Board has approved a resolution that, with effect from and conditional on Admission, his basic fees be increased to £45,000 per annum with an additional £8,000 per annum in respect of chairing the Remuneration Committee.
• 8.7 Flavio Guidotti entered into a non-executive director agreement with the Company upon his appointment on 15 July 2005. In consideration of the performance of his duties under this agreement he was awarded 350,000 options over Ordinary Shares with an exercise price of 80 pence. He was awarded a further 250,000 options over Ordinary Shares with an exercise price of £1.50 in 2011. Pursuant to a non-executive director letter of continued appointment dated April 2013, he receives remuneration of £40,000 per annum as a non-executive Director, and the Company will reimburse Mr. Guidotti for expenses of up to £3,000 per board meeting he attends in person for expenses. His appointment is for a period of three years and may be terminated at any time by either party giving to the other party three months' written notice. The Board has approved a resolution that, with effect from and conditional on Admission, his basic fees be increased to £45,000 per annum.
• 8.8 Martin Bloom was appointed as a non-executive Director of the Company on 22 June 2012. Pursuant to a non-executive Director letter of appointment dated 12 April 2012, he receives remuneration of £40,000 per annum. In addition he receives £6,000 per annum in his capacity as Chair of the Nominations Committee pursuant to a non-executive director fees letter dated 5 February 2014. His appointment is for a period of three years and may be terminated at any time by either party giving to the other party three months' written notice. The Board has approved a resolution that, with effect from and conditional on Admission, his basic fees be increased to £45,000 per annum with an additional £8,000 per annum in respect of chairing the Nominations Committee.
• 8.9 Dr. Philip Mitchell was appointed as a Director of the Company on 19 September 2005. Pursuant to a non-executive Director letter of appointment dated 29 November 2013, he receives remuneration of £40,000 per annum. His appointment is for a period of three years and may be terminated at any time by either party giving to the other party three months' written notice. The Board has approved a resolution that, with effect from and conditional on Admission, his basic fees be increased to £45,000 per annum.

8.10 The remuneration (including salary and other benefits and any contingent or deferred compensation) payable by the Group to the Directors for services to the Group for the financial year ended 30 September 2013 are set out below.

	Basic salary/fees	Bonus	Benefits in kind	Employer pension Contri-butions	Total
Director	(£)	(£)	(£)	(£)	(£)
Paul Heiden	100,000	nil	nil	nil	100,000
Dr. Henri Winand	200,000	150,000	540	9,000	359,540
John Maguire	180,000	145,000	3,000	nil	328,000
Michael Muller	40,000	nil	nil	nil	40,000
Dr. Caroline Brown	nil	nil	nil	nil	nil
Zarir Cama	40,000	nil	nil	nil	40,000
Flavio Guidotti	40,000	nil	nil	nil	40,000
Martin Bloom	40,000	nil	nil	nil	40,000
Dr. Philip Mitchell	150,000	60,000	647	nil	210,647

8.11 There are no amounts set aside or accrued by the Group to provide pension, retirement or similar benefits to the Directors. For the financial year ended 30 September 2013, the Company made contributions to the personal pension plan of Dr. Henri Winand in the amount shown in the table above.

9. Takeover Regulation

9.1 Mandatory bid

The Company is subject to the application of the City Code. Under Rule 9 of the City Code, any person who acquires an interest in shares which, taken together with shares in which he or persons acting in concert with him are interested, carry 30 per cent. or more of the voting rights in the Company will normally be required to make a general offer to all the remaining shareholders to acquire their shares. Similarly, when any person or persons acting in concert is interested in shares which in aggregate carry 30 per cent. of the voting rights of the Company but which do not carry more than 50 per cent. of the voting rights in the Company, a general offer will normally be required to be made if he or any person acting in concert with him acquires an interest in any other shares in the Company. An offer under Rule 9 must be in cash, normally at the highest price paid within the preceding 12 months for any interest in shares of the same class acquired in the Company by the person required to make the offer or any person acting in concert with him.

9.2 Squeeze-out

Under the Act, if an offeror were to make an offer to acquire all of the shares in the Company not already owned by it and were to acquire 90 per cent. of the shares to which such offer related it could then compulsorily acquire the remaining 10 percent. The offeror would do so by sending a notice to outstanding members telling them that it will compulsorily acquire their shares and then, six weeks later, it would deliver a transfer of the outstanding shares in its favour to the Company which would execute the transfers on behalf of the relevant members, and pay the consideration to the Company which would hold the consideration on trust for outstanding members. The consideration offered to the members whose shares are compulsorily acquired under this procedure must, in general, be the same as the consideration that was available under the original offer unless a member can show that the offer value is unfair.

9.3 Sell-out

The Act also gives minority members a right to be bought out in certain circumstances by an offeror who has made a takeover offer. If a takeover offer related to all the shares in the Company and, at any time before the end of the period within which the Offers could be accepted, the offeror held or had agreed to acquire not less than 90 per cent. of the shares, any holder of shares to which the offer related who had not accepted the offer could by a written communication to the offeror require it to acquire those shares. The offeror would be required to give any member notice of his/her right to be bought out within one month of that right arising. The offeror may impose a time limit on the rights of minority members to be bought out, but that period cannot end less than three months after the end of the acceptance period or, if later, three months from the date on which notice is served on members notifying them of their sell-out rights. If a member exercises his/her rights, the offeror is entitled and bound to acquire those shares on the terms of the offer or on such other terms as may be agreed.

10. Taxation

10.1 UK taxation

The comments set out below are based on existing law and current HM Revenue & Customs practice. They are intended as a general guide only and apply only to Shareholders who are resident in the United Kingdom for tax purposes (except to the extent that specific reference is made to Shareholders resident outside the United Kingdom), who hold the shares as investments and who are the absolute beneficial owners of those shares.

The tax position of certain categories of Shareholders who are subject to special rules, such as persons who acquire (or are deemed to acquire) their Ordinary Shares in connection with an office or their (or another person's) employment, traders, brokers, dealers in securities, insurance companies, banks, financial institutions, investment companies, tax-exempt organisations, persons connected with the Company or the Group, persons holding Ordinary Shares as part of hedging or conversion transactions, Shareholders who are not domiciled in the UK, collective investment schemes and those who hold 5 per cent. or more of the Ordinary Shares, is not considered.

Any person who is in any doubt as to their taxation position or who is subject to taxation in any jurisdiction other than the United Kingdom, should consult their own professional advisers immediately.

Taxation of Dividends

No taxation will be withheld from dividends paid by the Company. Dividends carry a tax credit equal to one ninth of the dividend.

United Kingdom resident individuals

Individual shareholders, who are resident in the United Kingdom for tax purposes, will generally be subject to income tax on the aggregate amount of the dividend and associated tax credit (the "gross dividend"). For example, on a cash dividend of £90 an individual would be treated as having received dividend income of £100 and as having paid income tax of £10 (the "associated tax credit"). The gross dividend will be regarded as the top slice of the shareholder's income.

Individual shareholders who (after taking account of the gross dividend) are liable to income tax at the basic rate, pay tax on dividends at the dividend ordinary rate of 10 percent. Such individuals will have no further tax to pay, as the tax liability will be fully extinguished by the associated tax credit. Individual shareholders who are not liable to income tax are not able to recover the tax credit.

Individual shareholders who (after taking account of the gross dividend) are subject to income tax at the higher rate (currently 40 percent) will be liable to tax at the dividend upper rate of 32.5 per cent. on the gross dividend. For example, a higher rate tax payer receiving a dividend of £90 would for income tax purposes be treated as receiving dividend income of £100 (the aggregate of the £90 dividend received and the associated tax credit of £10). The tax liability would be £32.50. However, the associated tax credit of £10 would be set against the tax liability, leaving the individual with net tax to pay of £22.50.

Individual shareholders who (after taking account of the gross dividend) are subject to income tax at the additional rate (currently 45 percent) will be liable to income tax at the dividend additional rate of 37.5 per cent. on the gross dividend. For example, a 45 per cent. tax payer receiving a dividend of £90 would for income tax purposes be treated as receiving dividend income of £100 (the aggregate of the £90 dividend received and the associated tax credit of £10). The tax liability would be £37.50. However the associated tax credit of £10 would be set against the tax liability, leaving the individual with net tax to pay of £27.50.

United Kingdom resident trustees

Trustees of discretionary trusts liable to account for income tax on the income of the trust will be treated as having received gross income equal to the aggregate amount of the dividend and associated tax credit. Trustees will pay tax on dividends received at the rate of 37.5 percent. As with the additional rate individual shareholders, the 10 per cent. tax credit will be set against the tax liability leaving further tax to pay of 27.5 per cent. of the gross dividend.

United Kingdom resident companies

Shareholders who are within the charge to UK corporation tax will be subject to corporation tax on dividends unless the dividends fall within an exempt class and certain other conditions are met. Whether an exempt class applies and whether other conditions are met will depend upon the circumstances of the particular shareholder, although it is expected that the dividends paid by the Company would normally be exempt.

United Kingdom resident gross funds/charities

There is no entitlement, for either a gross fund or charity, to a tax credit and consequently no claim to recover the tax credit will be possible.

Non-United Kingdom residents

Generally, non-United Kingdom residents will not be subject to any United Kingdom taxation in respect of United Kingdom dividend income nor will they be able to recover the associated tax credit, although this will depend upon the existence of and the terms of any double taxation convention between the United Kingdom and the country in which such shareholder is resident.

Non-United Kingdom resident shareholders may be subject to tax on United Kingdom dividend income under any law to which that person is subject outside the United Kingdom. Non-United Kingdom resident shareholders should consult their own tax advisers with regard to their liability to taxation in respect of any dividend.

Taxation of Capital Gains

A subsequent disposal of Offer Shares may result in a liability to United Kingdom taxation of chargeable gains, depending upon individual circumstances.

Stamp Duty and Stamp Duty Reserve Tax

No United Kingdom stamp duty or stamp duty reserve tax ("SDRT") is payable on the issue of New Ordinary Shares by the Company pursuant to the Offer.

The sale of Existing Ordinary Shares by the Selling Shareholder pursuant to the Offer will generally give rise to a liability to stamp duty and/or SDRT for the purchaser at a rate of 0.5 per cent. of the Offer Price (in the case of stamp duty, rounded to the nearest multiple of £5). In practice, only one of either stamp duty or SDRT would be paid. If, in connection with the Offer, Ordinary Shares are transferred into a clearance service or depositary receipt system, a liability to stamp duty or SDRT may be payable at the rate of 1.5 per cent. of the Offer Price, as further discussed below. While stamp duty and SDRT are generally the liability of the Purchaser, the Selling Shareholder has agreed in the Underwriting Agreement to bear the cost of stamp duty and SDRT liabilities which arise in respect of the transfer of or agreement to transfer Existing Ordinary Shares to persons acquiring such shares pursuant to the Offer but only at the rate of 0.5 percent. If the 1.5 per cent. rate of stamp duty or SDRT were to apply the excess over 0.5 per cent. would be borne by the Purchaser.

Any subsequent transfer on sale of New Ordinary Shares or Existing Ordinary Shares (in each case other than shares held in uncertificated form in the CREST system) will be liable to stamp duty at the rate of 0.5 per cent. of the consideration paid for the transfer. An exemption from stamp duty is available on an instrument transferring shares where the amount or value of the consideration is £1,000 or less, and it is certified on the instrument that the transaction effected by the instrument does not form part of a larger transaction or series of transactions for which the aggregate consideration exceeds £1,000.

An obligation to account for SDRT at the rate of 0.5 per cent. of the amount or value of the consideration will also arise if an unconditional agreement to transfer the shares is not completed by a duly stamped instrument of transfer before the "accountable date" for SDRT purposes. The accountable date is the seventh day of the month following the month in which the agreement for the transfer is made. However, if within 6 years of the date on which the liability to SDRT arises an instrument of transfer is executed pursuant to the agreement and is duly stamped, the stamping of the instrument will usually cancel the liability to account for the SDRT and any SDRT already paid will be repaid, generally with interest.

The transfer on sale of Offer Shares held in uncertified form in the CREST system will generally be liable to SDRT at the rate of 0.5 per cent. of the consideration paid for the transfer. The SDRT will generally be collected by CREST.

Under current UK legislation, where Ordinary Shares are transferred (i) to, or to a nominee for, a person whose business is or includes the provision of clearance services or (ii) to, or to a nominee or agent for, a person whose business is or includes issuing depositary receipts, stamp duty or SDRT will generally be payable at the higher rate of 1.5 per cent. of the amount or value of the consideration payable or, in certain circumstances, the value of the Ordinary Shares (rounded up to the nearest multiple of £5 in the case of stamp duty).

There is an exception from the 1.5 per cent. charge on the transfer to, or to a nominee or agent for, a clearance service where the clearance service has made and maintained an appropriate election which has been approved by HMRC. In these circumstances, the normal rates of stamp duty and SDRT (rather than the higher rate regime referred to above) will generally apply to any transfer of Ordinary Shares into the clearance service and to any transactions in Ordinary Shares held within the clearance service.

Any liability for stamp duty or SDRT in respect of the transfer into a clearance service or depositary receipt system, or in respect of a transfer of Ordinary Shares held within such a service or system, will strictly be payable by the operator of the clearance service or depositary receipt system or its nominee, as the case may be, but in practice will generally be reimbursed by participants in the clearance service or depositary receipt system.

However, following the ECJ decision in HSBC Holdings plc and Vidacos Nominees Ltd v The Commissioners of Her Majesty's Revenue & Customs (Case C-569/07) and the First-tier Tax Tribunal decision in HSBC Holdings Plc and the Bank of New York Mellon Corporation v The Commissioners of Her Majesty's Revenue & Customs HMRC has indicated that the overall effect of these decisions is that the 1.5 per cent. charge is no longer applicable to issues of UK shares to clearance services or depositary receipt issuers anywhere in the world. However, it is possible that HMRC might amend the UK stamp duty and/or SDRT regime in such a way as to alter the position outlined above. Accordingly, specific professional advice should be sought before paying the 1.5 per cent. stamp duty or SDRT charge.

The above statements are intended as a general guide to the current position. Certain categories of person are not liable to stamp duty or SDRT, and others may be liable at a higher rate or may, although not primarily liable for the tax, be required to notify and account for it under the Stamp Duty Reserve Tax Regulations 1986.

10.2 United States taxation

This section describes the material US federal income tax consequences of owning Ordinary Shares. It applies to any US Shareholder who acquires its Ordinary Shares in this offering if the Ordinary Shares are held as capital assets for US federal income tax purposes. This section does not describe the material US federal income tax consequences of owning Ordinary Shares for anyone who is a member of a special class of Shareholders subject to special rules, including:

• a dealer in securities,

• a trader in securities that elects to use a mark-to-market method of accounting for securities holdings,

• a tax-exempt organization,

• a life insurance company, a regulated investment company, real estate investment trust, S corporation or other entity taxed as a financial conduit for US federal income tax purposes,
• a person liable for alternative minimum tax,
• a person that actually or constructively owns 10 per cent. or more of the Company's voting stock,
• a person that holds Ordinary Shares as part of a straddle or a hedging or conversion transaction, or
• a US Shareholder (as defined below) whose functional currency is not the US dollar.

This section is based on the US Internal Revenue Code of 1986, as amended, its legislative history, existing and proposed regulations, published rulings and court decisions, as well as the Convention Between the Government of the United States of America and the Government of the United Kingdom of Great Britain and Northern Ireland for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and on Capital Gains, (together with the Protocol thereto, the "Treaty"). These laws are subject to change, possibly on a retroactive basis.

A Shareholder will be a "US Shareholder" if it is a beneficial owner of Ordinary Shares and if the Shareholder is:

• a citizen or resident of the United States,
• a domestic corporation,
• an estate whose income is subject to US federal income tax regardless of its source, or
• a trust if a United States court can exercise primary supervision over the trust's administration and one or more United States persons are authorized to control all substantial decisions of the trust.

A Shareholder will be an "eligible US Shareholder" if it is a US Shareholder that:

• is a resident of the United States for purposes of the Treaty;
• does not maintain a permanent establishment or fixed base in the United Kingdom to which Ordinary Shares are attributable and through which the US Shareholder carries on or has carried on business (or, in the case of an individual, performs or has performed independent personal services); and
• is otherwise eligible for benefits under the Treaty with respect to income and gain from the Ordinary Shares.

A Shareholder will be a "non-US Shareholder" if it is the beneficial owner of Ordinary Shares and it is not a United States person for US federal income tax purposes.

A partnership (including any entity treated as a partnership for US federal income tax purposes) which is the beneficial owner of Ordinary Shares, will be subject to different types of tax treatment depending upon the status of the partner and the activities of the partnership. A beneficial owner of Ordinary Shares that is a partnership (including the partners in such partnership), should consult its own tax advisors regarding the tax consequences of owning and disposing of the Ordinary Shares.

You should consult your own tax advisor regarding the US federal, state and local and other tax consequences of owning and disposing of Ordinary Shares in your particular circumstances. In particular, you should confirm your status as an eligible US Shareholder with your advisor and should discuss any possible consequences of failing to qualify as an eligible US Shareholder.

This discussion addresses only US federal income taxation. Shareholders should consult their own tax advisors as to potential application of US state and local tax laws, as well as any other US tax laws (such as the estate tax) or other US laws, as well as the laws of the United Kingdom and other non-US laws.

10.3 Taxation of US Shareholders

Taxation of Dividends

Subject to the passive foreign investment company ("PFIC") rules discussed below, the gross amount of any dividend the Company pays out of its current or accumulated earnings and profits (as determined for US federal income tax purposes) will be subject to US federal income taxation for US Shareholders. Dividends paid to a noncorporate US Shareholder that constitute "qualified dividend income" will be taxable to the noncorporate US Shareholder at a maximum tax rate of 20 per cent. provided that the Ordinary Shares are held for more than 60 days during the 121-day period beginning 60 days before the ex-dividend date and that the noncorporate US Shareholder meets other holding period requirements unless the noncorporate US Shareholder takes the dividend income into account as investment income.

In order for the dividends paid by the Company to be treated as qualified dividend income, the Company must be eligible for the benefits of a comprehensive income tax treaty with the United States which the IRS has determined is satisfactory and which includes an exchange of information program. The IRS has determined that the Treaty satisfies these requirements. The Company expects to be eligible for the benefits of the Treaty by virtue of the Ordinary Shares being traded on the London Stock Exchange, and as a result the Company expects that dividends paid will be treated as qualified dividend income for eligible noncorporate US Shareholders. However, if the Ordinary Shares cease to traded on the London Stock Exchange, the Company would have to qualify for the benefits of the Treaty under some other provision of the limitation on benefits article of the Treaty in order for dividends we pay to continue to be eligible for treatment as qualified dividend income. US Shareholders should consult their own tax advisors as to the qualification of dividends paid by the Company as qualified dividend income.

Any dividend paid to a US Shareholder, must include U.K. tax withheld from the dividend payment, if any, in the gross amount of such dividend even though the US Shareholder does not in fact receive it. Dividends are taxable to a US Shareholder when such dividend is received, actually or constructively. Such dividends will not be eligible for the deduction generally allowed to United States corporations in respect of dividends received from other United States corporations. The amount of a dividend distribution that a US Shareholder must include as income will be the US dollar value of the U.K. sterling payments made, determined at the spot sterling/US dollar rate on the date the dividend distribution is includible in US taxable income, regardless of whether the payment is in fact converted into US dollars at this time. Generally, any gain or loss resulting from currency exchange fluctuations during the period from the date a dividend is included in US taxable income to the date the sterling received is converted into US dollars will be treated as ordinary income or loss and will not be eligible for the special tax rate applicable to qualified dividend income. The gain or loss generally will be income or loss from sources within the United States for foreign tax credit limitation purposes. Distributions in excess of current and accumulated earnings and profits, as determined for US federal income tax purposes, generally will be treated as a non-taxable return of capital to the extent of the US Shareholder's basis in the Ordinary Shares and thereafter as capital gain; however, since the Company does not intend to maintain books and records in accordance with US tax principles, a US Shareholder will effectively be required to treat all amounts the Company distributes as dividends for US federal income tax purposes.

Subject to certain limitations, U.K. tax withheld in accordance with the Treaty and paid over to the United Kingdom generally will be creditable or deductible against the US Shareholder's US federal income tax liability, except to the extent refundable by the United Kingdom. Special rules apply in determining the foreign tax credit limitation with respect to dividends that are subject to the maximum 20 per cent. tax rate. To the extent a refund of the tax withheld is available to a US Shareholder under U.K. law or under the Treaty, the amount of tax withheld that is refundable will not be eligible for credit against its United States federal income tax liability. See "UK Taxation," above, for the procedures for obtaining a tax refund. The Treaty provides certain safe harbor time limits for US residents to obtain refunds. US Shareholders should consult their own tax advisors on the availability and claiming of refunds from the U.K. tax authorities in their individual circumstances.

Dividends will be income from sources outside the United States, and dividends paid will, depending on a US Shareholder's circumstances, be "passive" or "general" income which, in either case, is treated separately from other types of income for purposes of computing the allowable foreign tax credit.

A US Shareholder may make an election to treat all foreign taxes paid as deductible expenses in computing taxable income, rather than as a credit against tax, subject to generally applicable limitations. Such an election, once made, applies to all foreign taxes paid for the taxable year subject to the election. The rules governing foreign tax credits are complex and, therefore, US Shareholders are encouraged to consult their own tax advisors to determine whether they are subject to any special rules that may limit their ability to use foreign tax credits and whether or not an election to treat foreign taxes paid as deductions rather than credits would be appropriate based on their particular circumstances.

Taxation of Capital Gains

Subject to the PFIC rules discussed below, if a US Shareholder sells or otherwise disposes of its Ordinary Shares, it should recognize capital gain or loss for US federal income tax purposes equal to the difference between the US dollar value of the amount that it realises and its tax basis, determined in US dollars, in its Ordinary Shares. Capital gain of a noncorporate US Shareholder is generally taxed at a maximum rate of 20 per cent. where the US Shareholder has a holding period greater than one year. Such gain or loss will generally be income or loss from sources within the United States for foreign tax credit limitation purposes. The deductibility of capital losses is subject to certain limitations.

Passive Foreign Investment Company Considerations

The Company believes that its Ordinary Shares should not currently be treated as stock of a PFIC for US federal income tax purposes, but this conclusion is a factual determination that will depend in part on the amount of cash and other assets that produce "passive income" (defined below) on the Company's balance sheet. For this purpose, the Company would be required to take into account the cash it receives in this offering and how much of such cash the Company spends in the taxable year of the Company which includes the date of this offering. In addition, this determination must be made by the Company annually and thus may be subject to change.

In general, for US Shareholders, the Company will be a PFIC with respect to a US Shareholder if for any taxable year in which Ordinary Shares are held:

• at least 75 per cent. of the Company's gross income for the taxable year is passive income; or
• at least 50 per cent. of the value, determined on the basis of a quarterly average, of the Company's assets is attributable to assets that produce or are held for the production of passive income.

Passive income generally includes dividends, interest, royalties, rents (other than certain rents and royalties derived in the active conduct of a trade or business), annuities and gains from assets that produce passive income. If a foreign corporation owns at least 25 per cent. by value of the stock of another corporation, the foreign corporation is treated for purposes of the PFIC tests as owning its proportionate share of the assets of the other corporation, and as receiving directly its proportionate share of the other corporation's income.

If the Company is treated as a PFIC, and a US Shareholder does not make a mark-to-market election as described below, the US Shareholder will be subject to special rules with respect to:

• any gain realized on the sale or other disposition of its Ordinary Shares; and

• any excess distribution that the Company makes to the US Shareholder (generally, any distributions during a single taxable year that are greater than 125 per cent. of the average annual distributions received by a US Shareholder in respect of the Ordinary Shares during the three preceding taxable years or, if shorter, the US Shareholder's holding period for the Ordinary Shares).

Under these rules:

• the gain or excess distribution will be allocated ratably over the US Shareholder's holding period for the Ordinary Shares;
• the amount allocated to the taxable year in which the US Shareholders realize the gain or excess distribution will be taxed as ordinary income;
• the amount allocated to each prior year, with certain exceptions, will be taxed at the highest tax rate in effect for that year; and
• the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such prior year.

Special rules apply for calculating the amount of the foreign tax credit with respect to excess distributions by a PFIC.

If a US Shareholder owns Ordinary Shares in a PFIC that are treated as marketable stock, it may make a mark-to-market election. There is currently no guidance as to whether any particular foreign exchange should be treated as a "qualified exchange or other market," so there can be no certainty as to whether Ordinary Shares that trade only on foreign exchanges should be treated as "marketable stock." If a US Shareholder makes this election, it will not be subject to the PFIC rules described above. Instead, in general, it will include as ordinary income each year the excess, if any, of the fair market value of its Ordinary Shares at the end of the taxable year over its adjusted basis in its Ordinary Shares. These amounts of ordinary income will not be eligible for the favourable tax rates applicable to qualified dividend income or long-term capital gains. A US Shareholder will also be allowed to take an ordinary loss in respect of the excess, if any, of the adjusted basis of its Ordinary Shares over their fair market value at the end of the taxable year (but only to the extent of the net amount of previously included income as a result of the mark-to-market election). A US Shareholder's basis in the Ordinary Shares will be adjusted to reflect any such income or loss amounts. For purposes of this rule, if a US Shareholder makes a mark-to-market election with respect to its Ordinary Shares, it will be treated as having a new holding period in its Ordinary Shares beginning on the first day of the first taxable year beginning after the last taxable year for which the mark-to-market election applies.

In addition, notwithstanding any elections made with regard to the Ordinary Shares, dividends received from the Company will not constitute qualified dividend income if the Company is a PFIC either in the taxable year of the distribution or the preceding taxable year. Dividends received that do not constitute qualified dividend income are not eligible for taxation at the 20 per cent. maximum rate applicable to qualified dividend income. Instead, a US Shareholder must include the gross amount of any such dividend paid by the Company out of the Company's accumulated earnings and profits (as determined for US federal income tax purposes) in its gross income, and it will be subject to tax at rates applicable to ordinary income. Moreover, Ordinary Shares will be treated as stock in a PFIC if the Company is a PFIC at any time during the period in which Ordinary Shares are held, even if the Company is not currently a PFIC.

A US Shareholder must file an IRS Form 8621 "Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund" for any year in which the Company is a PFIC if that US Shareholder:

• recognizes a gain on a direct or indirect disposition of its Ordinary Shares;
• receives certain direct or indirect distributions from the Company; or

• makes an election with regard to its Ordinary Shares that is reportable on the IRS Form 8621.

Additionally, if the Company were to be treated as a PFIC for any taxable year, a US Shareholder would be required to file an annual report for that taxable year on IRS Form 8621. US Shareholders are urged to consult their own tax advisors concerning the filing of IRS Form 8621.

Net Investment Income Tax

An additional 3.8 per cent. tax is imposed on the "net investment income" of certain US Shareholders who are citizens and resident aliens, and on the undistributed "net investment income" of certain estates and trusts. Among other items, "net investment income" generally includes dividends paid on the Ordinary Shares and certain net gain from the sale or other taxable disposition of the Ordinary Shares, less certain deductions. This tax applies whether or not the Company is a PFIC. US Shareholders should consult their own tax advisors concerning the potential effect, if any, of this tax on holding its Ordinary Shares in its particular circumstances.

Backup Withholding and Information Reporting

For noncorporate US Shareholders, information reporting requirements, on Internal Revenue Service Form 1099, generally will apply to:

• dividend payments or other taxable distributions made to the noncorporate US Shareholder within the United States or by a US payor; and
• the payment of proceeds to the noncorporate US Shareholder from the sale of Ordinary Shares effected at a United States office of a broker.

Additionally, backup withholding may apply to such payments if a noncorporate US Shareholder:

• fails to provide an accurate taxpayer identification number;
• is notified by the Internal Revenue Service that it has failed to report all interest and dividends required to be shown on its federal income tax returns; or
• in certain circumstances, fails to comply with applicable certification requirements.

In addition, a sale of Ordinary Shares effected at a foreign office of a broker will be subject to information reporting if the broker is:

• a United States person;
• a controlled foreign corporation for US tax purposes;
• a foreign person 50 per cent. or more of whose gross income is effectively connected with the conduct of a United States trade or business for a specified three-year period; or
• a foreign partnership, if at any time during its tax year:
• one or more of its partners are "United States persons," as defined in US Treasury regulations, who in the aggregate hold more than 50 per cent. of the income or capital interest in the partnership, or
• such foreign partnership is engaged in the conduct of a United States trade or business,

unless the broker does not have actual knowledge or reason to know that the noncorporate US Shareholder is a United States person and the documentation requirements described above are met or the noncorporate US Shareholder otherwise establishes an exemption. Backup withholding will apply if the sale is subject to information reporting and the broker has actual knowledge that the noncorporate US Shareholder is a United States person.

Backup withholding is not an additional tax. Noncorporate US Shareholders generally may obtain a refund of any amounts withheld under the backup withholding rules that exceed their income tax liability by filing a refund claim with the United States Internal Revenue Service.

Disclosure of Information with respect to Foreign Financial Assets

Certain US Shareholders who hold any interest in "specified foreign financial assets," including the Ordinary Shares, during such Shareholder's taxable year must attach to the US federal income tax return for such year certain information with respect to each asset if the aggregate value of all of such assets exceeds \$50,000 (or a higher dollar amount prescribed by the Internal Revenue Service). For this purpose, a "specified foreign financial asset" includes any depositary, custodial or other financial account maintained by a foreign financial institution, and certain assets that are not held in an account maintained by a financial institution, including any stock or security issued by a person other than a United States person. A taxpayer subject to these rules who fails to furnish the required information is subject to a penalty of \$10,000, and an additional penalty may apply if the failure continues for more than 90 days after the taxpayer is notified of such failure by the Internal Revenue Service; however, these penalties may be avoided if the taxpayer demonstrates a reasonable cause for the failure to comply. An accuracy-related penalty of 40 per cent. is imposed for an underpayment of tax that is attributable to an "undisclosed foreign financial asset understatement," which for this purpose is the portion of the understatement for any taxable year that is attributable to any transaction involving an "undisclosed foreign financial asset," including any asset that is subject to the information reporting requirements of this legislation, which would include the Ordinary Shares if the dollar threshold described above were satisfied.

The applicable statute of limitations for assessment of US federal income taxes is extended to six years if there is an omission of gross income in excess of \$5,000 and the omission of gross income is attributable to a foreign financial asset as to which reporting is required as described above (or would be so required if the requirement for reporting specified foreign financial assets were applied without regard to the dollar threshold specified therein and without regard to certain exceptions that may be specified by the Internal Revenue Service). In addition, the statute of limitations will be suspended if a taxpayer fails to timely provide information with respect to specified foreign financial assets required to be reported or fails to timely provide the annual information reports required for holders of PFIC stock. The amendments to the applicable statute of limitations described in this paragraph apply to US federal income tax returns filed after March 18, 2010, as well as to such returns filed on or before such date if the applicable statute of limitations (determined without regard to these amendments) for assessment of taxes has not expired as of such date. Holders should consult their own tax advisors concerning any obligation that they may have to furnish information to the Internal Revenue Service as a result of holding the Ordinary Shares.

Circular 230 Disclosure: To ensure compliance with IRS Circular 230, prospective investors are hereby notified that any statement of tax matters set forth in this Prospectus was written in connection with the promotion or marketing of the transactions or matters addressed herein and was not intended or written to be used, and cannot be used by any prospective investor, for the purpose of avoiding tax-related penalties under federal, state or local tax law. Each prospective investor should seek advice based on their particular circumstances from an independent tax advisor.

11. Material contracts

11.1 The following contracts, not being contracts entered into in the ordinary course of business, have been entered into by the Group within the two years immediately preceding the date of this Prospectus and are, or may be, material, as well as contracts entered into by the Group which contain any provision under which any number of the Group has any obligation or entitlement which is material to the Group at the date of this Prospectus.

11.2 Underwriting Agreement

On 4 July 2014, the Company, the Directors (including Philip Mitchell in his capacity both as a Director and a Selling Shareholder) and the Managers entered into the Underwriting Agreement. Pursuant to the Underwriting Agreement:

• the Company has appointed Barclays and Canaccord as Joint Global Co-ordinators and Joint Bookrunners, and Parva Capital as Co-Lead Manager in connection with Admission and the Offer;
• subject to certain conditions that are typical for an agreement of this nature, the Company has agreed to issue the New Ordinary Shares at the Offer Price, and the Selling Shareholder has agreed to sell the Existing Ordinary Shares at the Offer Price, in connection with the Offer;
• the Managers have severally agreed, subject to certain conditions, to use reasonable endeavours to procure subscribers or purchasers for (or, failing which, the Joint Global Co-ordinators shall subscribe for or purchase themselves) the Ordinary Shares to be issued or sold pursuant to the Offer at the Offer Price;
• the Managers will deduct from the proceeds of the Offer payable to the Company a commission of 3 per cent. of the product of the Offer Price and the number of New Ordinary Shares issued by the Company pursuant to the Offer. In addition, at the sole and absolute discretion of the Company, an additional commission of up to 1 per cent. shall be payable by the Company to the Managers on the amount equal to the Offer Price multiplied by the number of New Ordinary Shares issued by the Company pursuant to the Offer;
• the obligations of the Managers to procure subscribers or purchasers for or, failing which, for the Joint Global Co-ordinators to themselves subscribe for or purchase the Ordinary Shares (as the case may be) on the terms of the Underwriting Agreement are subject to certain customary conditions. These conditions include the absence of any breach of representation or warranty under the Underwriting Agreement and Admission occurring on or before 8.00 a.m. on 9 July 2014 (or such later time and/or date as the Joint Global Co-ordinators (on behalf of the Managers) and the Company may agree, being no later than 16 July 2014). In addition, the Joint Global Co-ordinators (on behalf of the Managers) have the right to terminate the Underwriting Agreement, exercisable in certain circumstances, prior to Admission;
• each of the Company, the Directors and the Selling Shareholder has given certain representations, warranties and undertakings to the Managers. The liability of the Company is unlimited as to amount and time. The liability of the Directors and the Selling Shareholder is limited as to amount and time;
• the Company has given certain indemnities to the Managers and their respective affiliates;
• the parties to the Underwriting Agreement have given certain representations, warranties and undertakings regarding compliance with certain laws and regulations affecting the making of the Offer in relevant jurisdictions; and
• the Company has also undertaken, amongst other things, to each of the Managers that, subject to certain exceptions, during the period commencing on the date of the Underwriting Agreement and ending on the date 180 days from the Underwriting Agreement, it will not, without the prior written consent of the Joint Global Co-ordinators, issue, offer, lend, mortgage, assign, charge, pledge, sell, contract to sell or issue, sell any option or contract to purchase, purchase any option or contract to sell or issue, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of (or publicly announce any such issuance, offer, loan, mortgage, assignments, charge, pledge, sale, contract, purchase or disposal) directly or indirectly, any Ordinary Shares (or any interest therein or in respect thereof) or enter into any transaction with the same economic effect as any of the foregoing.

11.3 Suzuki Motor Corporation

Joint Venture Agreement: On 1 November 2011 the Company entered into a joint venture agreement (the "Joint Venture Agreement") with Suzuki for the primary purpose of manufacturing, evaluating and improving AC fuel cell stacks and supplying such fuel cell stacks to Suzuki for use in products manufactured by Suzuki using intellectual property rights licensed to the parties' joint venture company, SMILE FC System Corporation ("SMILE"), by both the Company and Suzuki. The Joint Venture Agreement governs matters related to the incorporation of SMILE and the investment of each of the Company and Suzuki (as shareholders) in SMILE, the ownership of intellectual property created by SMILE, and certain ongoing governance matters which are customary for agreements of this nature.

Under the terms of the Joint Venture Agreement, any intellectual property created by SMILE belong to SMILE and SMILE shall grant each of Suzuki and the Company a non-exclusive, world-wide licence to use such intellectual property in their own businesses.

The Joint Venture Agreement includes shareholder consent provisions requiring the consent of both shareholders in order for SMILE to enter into certain transactions and arrangements, or do certain things, which are material and/or outside the ordinary course of business (for example, acquiring another business or assets, or entering into transactions with one of the shareholders). The Joint Venture Agreement also includes other shareholder protection provisions, including the ability of each shareholder to appoint two directors to the SMILE board, requiring the board to prepare an annual business plan which must be ratified by shareholders, and making provision for the course of action to be taken should a deadlock occur at board level within SMILE. In the case of a deadlock which cannot be resolved by shareholder agreement within 14 days, either shareholder may (following a further 28 day period) serve a deadlock notice on the other. Within 30 days of receipt of a deadlock notice, the recipient shareholder must serve a transfer notice on the shareholder who served the deadlock notice stating a price at which the recipient shareholder would be prepared to either purchase the shares in SMILE held by the other shareholder or sell its own shares in SMILE to the other shareholder. The shareholder who receives the transfer notice must respond within 30 days setting out whether it intends to purchase the other shareholder's shares or sell its own shares in accordance with the transfer notice. If the shareholders cannot reach agreement on the terms of the transfer notice, either shareholder may elect (by serving a further written notice) to terminate the joint venture by placing SMILE into liquidation.

The Joint Venture Agreement will remain in force until: (i) terminated by written agreement of the shareholders; (ii) such time as all of the shares in SMILE are owned by one shareholder; (iii) such time as the shareholding of one of the shareholders falls below 20 percent; or (iv) terminated by either shareholder following a default by the other shareholder under the terms of the agreement. The intellectual property licensing arrangements are described below.

Licence Agreement: On 1 November 2011, Intelligent Energy Limited entered into a licence agreement with Suzuki under which Intelligent Energy Limited granted a non-exclusive, perpetual licence to Suzuki (sub-licensable to SMILE) in respect of the Group's AC technology in consideration of the payment of £45,000,000 (in four tranches, on the date of the agreement (£10,000,000); on 1 April 2012 (£15,000,000); on 1 September 2012 (£10,000,000) and 1 September 2013 (£10,000,000), together with royalty payments based on the total power value of licensed products supplied by or on behalf of any member of the Suzuki group. The licence agreement is non-exclusive, ongoing and there is no right to terminate for convenience (other than by mutual consent). The licence is, however, terminable in a case of material breach, insolvency or force majeure. Under the terms of the sub-licence between Intelligent Energy Limited, Suzuki and SMILE, Suzuki grants a sub-licence to SMILE to use the Intelligent Energy Limited's intellectual property rights in consideration of a royalty payment from SMILE to Suzuki at a rate to be agreed between them.

Joint Development Agreement: The relationship with Suzuki is underpinned by a number of development agreements ("JDA") with each new agreement building on the last. JDA 4 is the current JDA which was entered into in order to further develop the Group's fuel cell system for use in late stage Suzuki prototype vehicles. Suzuki is contracted to pay £4,859,480 over the course of the agreement. Intellectual property developed by the Group pursuant to the joint development agreements is not automatically included in the scope of the licence agreement described above and a further licence agreement would be required should Suzuki wish to obtain a licence for this intellectual property.

11.4 Scottish and Southern Energy plc (IE-CHP Joint Venture)

CHP Joint Venture Agreement: On 6 March 2008, the Company entered into a joint venture agreement (the "CHP Joint Venture Agreement") with SSE Venture Capital Limited ("SSE") (a subsidiary of Scottish and Southern Energy plc – an energy supplier in the UK) for the primary purpose of developing a prototype, and ultimately commercialising, combined heat and power units for use in both domestic and commercial buildings for the UK and Eire markets using intellectual property rights licensed to the parties' joint venture company, IE CHP (UK & EIRE) Limited ("IE-CHP"), by the Company. The CHP Joint Venture Agreement governs matters related to the incorporation of IE-CHP and the investment of each of the Company, SSE and, by way of a later amendment to the CHP Joint Venture Agreement, Scottish Enterprise (as shareholders) in IE-CHP, and certain ongoing governance matters which are customary for agreements of this nature.

The Company and IE-CHP also entered into a licence agreement dated 6 March 2008 in respect of the intellectual property to be licensed into and out of IE-CHP.

The CHP Joint Venture Agreement includes shareholder consent provisions requiring the consent of all shareholders in order for IE-CHP to enter into certain transactions and arrangements, or do certain things, which are material and/or outside the ordinary course of business (for example, acquiring another business or assets, or entering into any partnership or joint venture arrangements or making any material changes to the nature of the business). The CHP Joint Venture Agreement also includes other shareholder protection provisions, including the ability of each shareholder to appoint two directors to the board, requiring the board to prepare an annual business plan which must be adopted and approved by shareholders, and preventing the shareholders from transferring their shares to a third party (other than to a member of the relevant shareholder's group) without the consent of the other shareholder.

In the event that a deadlock occurs which cannot be resolved by shareholder agreement within 28 days, or by the chief executive officers of the shareholder, or in SSE's case, the executive director of its parent company following a further 30 day period, either shareholder may serve a deadlock notice on the other. Upon receipt of a deadlock notice, the shareholders must appoint a corporate finance advisor to procure a third party purchaser for the entire issued share capital of IE-CHP. If an offer is received from a third party the shareholders must unanimously decide whether to accept the offer. If no offer is received or the shareholders reject the offer or can not agree to accept the offer then the shareholders will take such steps as are necessary to ensure that IE-CHP is wound up and no shareholder may purchase all or part of its business or assets for less than any offer received from a third party.

The CHP Joint Venture Agreement will remain in force until IE-CHP has only one shareholder, when a resolution is passed by shareholders or creditors, or an order is made by the court or other competent body for IE-CHP to be dissolved or if the prototype does not reached a sufficient stage of development

11.5 Ascend Telecom Framework Agreement

On 13 January 2014, Ascend Telecom Infrastructure Private Limited ("Ascend") and Essential Energy Private Limited (a wholly-owned, indirect subsidiary of the Company) ("EE") entered into a framework agreement (the "Framework Agreement") in respect of the purchase of certain of Ascend's power plant and equipment by EE and, following the completion of that purchase, the supply by EE to Ascend of on-site electrical power, including back-up power, at Ascend's telecom tower sites. The Framework Agreement sets out a timetable for completion of the underlying enabling agreements (namely an asset purchase agreement, electricity supply agreement, field services agreement and ancillary services agreement). The electricity supply agreement ("ESA") was signed on 24 June 2014 and sets out the basis upon which Essential Energy India Private Limited (a wholly-owned, indirect subsidiary of the Company) ("EEI") will provide electricity supplies to Ascend including the applicable availability performance required and the parties respective obligations in respect of sites and assets. The initial phase of the ESA will be a 180 day proof of concept on approximately 50 sites to allow the parties to assimilate operational information. Ascend has the right to terminate the ESA at the end of this period but otherwise the ESA will remain in force and facilitate the provision of electricity supplies to each of Ascend's sites for which EEI takes responsibility. The Company expects that the asset purchase agreement (and the field services and ancillary services agreements which document the basis upon which Ascend will provide certain field services and other technical services to EE on a sub-contract basis) will be signed and take effect as part of the phased roll out of the electricity supplies to Ascend's sites following the proof of concept. At the same time as entering into the Framework Agreement, Ascend and EE also executed a non-binding letter setting out the principal commercial terms on which EE will EE will acquire the power plant and equipment and provide on-site electrical power (the "Commercial Letter").

The Commercial Letter states that the price payable by EE for the acquisition of the power plant and equipment will be a fair value price, the precise method of calculation of which is to be agreed, but which will be the higher of (i) net book value and (ii) a price to be based on net book value plus capital expenditure between 31 December 2013 and completion of the asset transfer minus depreciation or write-down occurring between 31 December 2013 and completion of the asset transfer. In addition, the Commercial Letter records the intention for EE to give Ascend an annual rebate on the availability charge as a result of EE's targeted increase in efficiency of the power plant and equipment. The rebate is anticipated to apply from year four of the agreement.

11.6 Microqual

DP&G Loan Agreement: On 6 March 2014, Essential Energy (Operations) India Private Limited ("Essential Energy India") entered into an enabling loan agreement (the "Facility Agreement") for INR 18,000,000,000 (Rupees 18 Crores or approximately £1.8 million) (the "Loan") with Microqual Coverage Solutions Private Limited ("Microqual") for the purposes of supporting Microqual's roll-out of telecommunications equipment which will be powered by Essential Energy India pursuant to an Energy Services Agreement. The Loan has an interest rate of 18 per cent. per annum which may reduce to 15 per cent. per annum if Microqual is not in default under the Facility Agreement and has met the projections of cashflow, revenues on each testing date but may increase back to 18 per cent. per annum following any failure of Microqual to meet the stated targets on any subsequent testing date.

The Loan is repayable over a three year period in eight equal quarterly instalments with the first instalment due on the last business day of the first quarter following the anniversary of the date the Loan was utilised.

Under the Facility Agreement, Essential Energy India received a comprehensive security package over (i) 50 per cent. of the shares in Microqual until final settlement of the Loan; (ii) Microqual's assets and interests in relation to the sites upon which equipment funded by the Loan are located; and (iii) three undated cheques of INR 6,000,000,000 each.

To effect the security, Essential Energy India entered into the following security documents:-

• (a) the trust and retention account agreement dated 6 March 2014 executed among Microqual, Essential Energy India, and Punjab National Bank;
• (b) the deed of guarantee dated 6 March 2014 executed by Microqual Techno Limited in favour of Essential Energy India;
• (c) the deed of guarantee dated 6 March 2014 executed by Mr. Mahesh Choudhary in favour of Essential Energy India;
• (d) the deed of hypothecation dated 6 March 2014 executed by Microqual in favour of Essential Energy India;
• (e) the share pledge agreement dated 6 March 2014 executed among Essential Energy India, Microqual Techno Limited and Microqual;
• (f) the power of attorney dated 6 March 2014 executed by Microqual Techno Limited in favour of Essential Energy India in relation to the Share Pledge Agreement;

and Essential Energy India also received the benefit of:

• (g) the demand promissory note dated 6 March 2014 executed by Microqual; and
• (h) the letter of continuity in relation to the demand promissory note dated 6 March 2014 executed by Microqual.

Microqual gave customary representations and undertakings to Essential Energy India under the terms of the Facility Agreement and agreed to indemnify Essential Energy India against any costs, loss or liability incurred by Essential Energy India a result of the occurrence of a default under the Facility Agreement.

Energy Services Agreement: On 6 March 2014, Microqual, a provider of end-to-end telecom infrastructure services in India, and the Group entered into an energy services agreement (the "Energy Services Agreement"). Pursuant to the Energy Services Agreement, the Group maintains and manages the energy infrastructure on mobile telecom network tower sites to deliver the telecom infrastructure requirements of mobile telecom network operators in India. The Energy Services Agreement has a term of 15 years. Microqual pays service fees to the Group in respect of the Group's provision of energy services on a monthly basis, calculated as the sum of (a) the availability charge, (b) the usage charge and (c) the fixed charge, applicable to the relevant site. The availability charge comprises of a maintenance charge of Rs4,000 per month and an equipment availability fee which ranges from Rs11,500 to Rs19,250 depending on whether it is an indoor or outdoor site and the number of MNOs (parties who use Microqual's sites for the purpose of operating their respective mobile telecom masts) utilised. The usage charge is Rs60/kW hour. The fixed charge is calculated based on the location of each site and ranges from zero to Rs1,000 depending on whether Essential Energy designates the site as normal, medium or difficult.

11.7 Primax Manufacturing Agreement

Intelligent Energy Limited and Primax Electronics Limited ("Primax"), a Taiwan-based manufacturer of consumer and business electronics, have entered into a non-exclusive manufacturing agreement (the "Manufacturing Agreement") whereby Primax has agreed to undertake the manufacturing, testing, packaging and packing of fuel cell stacks and chargers at its manufacturing and assembly site at Dongguan in China. The Manufacturing Agreement has an effective date of 1 October 2012.

In order to manufacture the products, Primax will source certain components directly from the Group and the remainder from a list of suppliers approved by Intelligent Energy Limited. Primax is given the benefit of a personal, non-transferable, non-exclusive, royalty-free licence to use certain of the Group's intellectual property for the purposes of manufacturing the fuel cell stacks and chargers (but not otherwise). Under the terms of the Manufacturing Agreement, Intelligent Energy Limited obtains ownership of any intellectual property that is developed in relation to any improvement or modification made to the fuel cell stacks and chargers.

Intelligent Energy Limited will pay Primax a price comprising of the sum of Primax's material costs and value add costs for each product delivered. The value add costs fall under a number of heads (some of which are to be agreed between Intelligent Energy Limited and Primax following a pilot production stage) such as labour costs, overhead costs and profit. For the first six months of sales, Primax is entitled to a profit margin of 4 per cent. of the price it includes in its quotation. The profit margin will be reviewed after that six month period has ended and from time to time thereafter. Quotations must be approved by Intelligent Energy Limited.

The Manufacturing Agreement has an initial three year term (expiring 30 September 2015) and is automatically renewed thereafter for successive periods of two years. Primax is entitled to terminate the Manufacturing Agreement at the end of the initial three year term by giving six months' written notice. Intelligent Energy Limited may terminate the Manufacturing Agreement at any time by giving six months' written notice or immediately if Primax: (i) fails to meet the implementation plan milestones set out in the Manufacturing Agreement; (ii) undergoes a change of control; (iii) suffers a critical failure; or (iv) fails to maintain appropriate insurance cover. The Manufacturing Agreement also includes customary material default and insolvency event termination rights which may be exercised by either party.

The Manufacturing Agreement is governed by Singapore law and any disputes must first be subject to a mediation exercise and, failing a successful outcome, can then be referred for either expert determination or arbitration by the Singapore International Arbitration Centre under the UNCITRAL Arbitration Rules.

11.8 Convertible Loan Note Instrument

On 1 August 2013, the Company executed a convertible loan note instrument constituting the Convertible Loan Notes (the "Convertible Loan Note Instrument"). The Convertible Loan Notes were offered at their face value of 100 pence each and carry simple gross interest of 5 percent, which will not be paid in cash but will instead accumulate (compounded annually) until the end of the 4 year term of the Convertible Loan Notes, and be payable in a single bullet payment. Convertible Loan Notes with an aggregate nominal value of £30,440,831 have been issued.

The Convertible Loan Notes are unsecured obligations of the Company, but the Company undertook in the Convertible Loan Note Instrument not to issue any debt ranking (by way of security over the whole or any material part of the undertaking or assets of the Company) ahead of the Convertible Loan Notes. The Convertible Loan Notes are convertible at the option of the holder (at any time up to 1 August 2017 (the "Maturity Date")) into Ordinary Shares of the Company at a conversion price of 250 pence of nominal value of Convertible Loan Notes for each new Ordinary Share in the Company. Any Convertible Loan Notes which have not been converted into Ordinary Shares by the Maturity Date will be redeemed in full by the Company at par on the Maturity Date. Furthermore, in there is an Event of Default (as defined in the Convertible Loan Note Instrument to mean, broadly, an insolvency event), noteholders could require the Company immediately to redeem the Convertible Loan Notes.

The Convertible Loan Notes will automatically convert upon Admission at the lower of 250 pence and the Offer Price.

11.9 Investment in the Group by GIC

On 21 February 2014, the Company and GIC Private Limited entered into a subscription agreement whereby GIC agreed to subscribe for 15,129,468 Ordinary Shares in the Company at a price of £2.50 per Ordinary Share. In addition, the Company agreed to issue warrants (with the right to subscribe for up to (and including) 6,655,460 Ordinary Shares at an exercise price of £2.50 per Ordinary Share) to GIC. The warrants were exercised by GIC prior to their expiry date of 30 June 2014.

Further to the subscription agreement dated 21 February 2014, on 5 March 2014, the Company, NM Rothschild & Sons Limited (as the "Settlement Bank") and Torteval Limited entered into a share subscription and transfer agreement whereby the Settlement Bank agreed to subscribe for 37,823,670 preference shares in the share capital of Torteval Limited. The Company agreed to issue the 15,129,468 Ordinary Shares to GIC in consideration for the Settlement Bank transferring to the Company its 37,823,670 preference shares, as well as its ordinary shareholding in Torteval Limited. Instead of receiving cash as consideration for the issue of Ordinary Shares, the Company agreed to acquire the entire share capital of Torteval Limited representing an amount equivalent to the gross proceeds of GIC's subscription in the Company.

12. Property

• 12.1 Neither the Company nor any Group Company owns any freehold land or property.
• 12.2 Group Companies have entered into the following leases:

• (a) Intelligent Energy Limited: lease of office at 88 Wood Street, London, England, EC2V 7RS on a 2 year term which expired on 30 September 2013 and thereafter rolls on successive 24 month periods at a rent of £4,800 plus VAT per month;

• (b) Intelligent Energy Limited: lease of office and laboratory space at Charnwood Building, Holywell Park, Loughborough on the following terms:

• (i) Units GK, GY, GM, GN, GP and GU on a term expiring 3 January 2020 at a rent of £29,021 plus VAT per month (plus insurance rent and service charges);
• (ii) Unit FG on a term expiring on 3 January 2015 at a rent of £2,513.25 plus VAT per month (plus insurance rent and service charges);
• (iii) Unit GA on a term expiring 3 January 2020 at a rent of £2,078.25 plus VAT per month (plus insurance rent and service charges);
• (iv) Unit GJ on a term expiring 3 January 2015 at a rent of £2,795 plus VAT per month (plus insurance rent and service charges);
• (v) Unit GS on a term expiring 3 January 2020 at a rent of £5,272.50 plus VAT per month (plus insurance rent and service charges);
• (vi) Unit FE on a term expiring 3 January 2015 at a rent of £5,525.50 plus VAT per month (plus insurance rent and service charges);
• (vii) Unit FF on a rolling monthly term at a rent of £3,794.75 plus VAT per month (plus insurance rent and service charges).
• 12.3 Intelligent Energy Inc: lease of office space at Suite 755, 1731 Technology Drive, San Jose, California for a term expiring 14 December 2015 at a rent of US\$5,013.16 per month (plus service charge).
• 12.4 Intelligent Energy Inc: lease of laboratory space at Suite 300, 505 Odyssey Way, Exploration Park, Florida 32953 for a term expiring 21 April 2015 at a rent of US\$3,193.17 per month (plus service charge).
• 12.5 Intelligent Energy Inc: lease of laboratory space at Suite 230, 5941 Optical Court, San Jose, California, 95138 for a rolling 90 day term a rent of US\$1,500 per month.
• 12.6 Intelligent Energy India Private Limited: lease of office space at 7 Gulmohar Enclave, Kundalahalli, Bangalore 560037 for a term expiring 30 September 2014 at a rent of INR 154,350 per month plus any applicable tax (plus service charges).
• 12.7 IE Japan Limited: lease of office at 20F Hankyu Grand Building, 8-47 Kakuda-cho, Kita-ku, Osaka, Japan 530-0017 on a one year term expiring 31 March 2013 at a rent of 600,000 Yen plus Consumption Tax per month.

13. Related party transactions

Save as described in note 30 to the Company's audited consolidated financial statements for the three years to 30 September 2013 and the six month period to 31 March 2014 as set out in Part V "Historical Financial Information" of this Prospectus, there are no related party transactions between the Company or members of the Group that were entered into during such period and between 1 October 2013 and 3 July 2014 (being the last practicable date prior to the publication of this Prospectus).

14. Working capital

The Company is of the opinion that, taking into account the net proceeds from the Offer receivable by the Company, the working capital of the Group is sufficient for its present requirements, that is, for at least the period of 12 months from the date of this Prospectus.

15. No significant change

Since 31 March 2014, being the date to which the historical financial information in this Prospectus was prepared, there has been no significant change in the financial or trading position of the Group.

16. Litigation

There are no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Company is aware) which may have, or have had, during the 12 months preceding the date of this Prospectus, a significant effect on the Group's financial position or profitability.

17. General

• 17.1 The estimated costs and expenses relating to Admission payable by the Company are estimated to amount to approximately £6,393,046 (excluding VAT).
• 17.2 The financial information set out in this Prospectus relating to the Group does not constitute statutory accounts. Ernst & Young LLP were the auditors of the Company for the financial year ended 30 September 2011 and have given an unqualified audit report on the accounts of the Company for that financial year. KPMG LLP were the auditors of the Company for the two financial years ended 30 September 2012 and 30 September 2013 and have given unqualified audit reports on the accounts of the Company for those financial years. Each of Ernst & Young LLP and KPMG LLP is a member of the Institute of Chartered Accountants in England and Wales.
• 17.3 KPMG LLP (a member of the Institute of Chartered Accountants in England and Wales) has given and has not withdrawn its written consent to the inclusion in this Prospectus of its Accountants' Report(s) and its letters set out in Part V "Historical Financial Information" and and Part VI "Unaudited Pro-forma Financial Information", in the form and context in which they appear and has authorised the contents of those parts of this Prospectus which comprise its reports for the purpose of Rule 5.5.3R(2)(f) of the Prospectus Rules. As the Ordinary Shares have not been and will not be registered under the Securities Act, KPMG LLP has not filed and will not file a consent under the Securities Act.
• 17.4 Barclays Bank PLC is registered in England and Wales under number 01026167 and its registered office is at 1 Churchill Place, London E14 5HP, UK. Barclays Bank PLC is regulated by the Financial Conduct Authority and is acting in the capacity of Joint Global Co-ordinator and Joint Bookrunner to the Company.
• 17.5 Canaccord Genuity Limited is registered in England and Wales under number 01774003 and its registered office is at 88 Wood Street, London EC2V 7QR, UK. Canaccord Genuity Limited is regulated by the Financial Conduct Authority and is acting in the capacity of Joint Global Co-ordinator and Joint Bookrunner to the Company. Canaccord Genuity Limited holds Convertible Loan Notes issued by the Company with a nominal value of £5,000,000. On Admisssion, all outstanding Convertible Loan Notes automatically convert into Ordinary Shares at a conversion price which is the lower of 250 pence and the Offer Price. The Company does not consider Canaccord Genuity Limited's interest in the Convertible Loan Notes to be an interest which conflicts with its interests in acting as Joint Global Co-ordinator and Joint Bookrunner to the Company.
• 17.6 Parva Capital Limited is registered in England and Wales under number 07825901 and its registered office is at WSM Pinnacle House, 17-25 Hartfield Road, London SW19 3SE. Parva Capital Limited is an appointed representative of Hanson Asset Management Limited which is authorised and regulated by the Financial Conduct Authority and is acting in the capacity of Co-Lead Manager to the Company. As at the date of this Prospectus, the directors of Parva Capital and other connected persons (directly or indirectly) hold 588,994 Ordinary Shares. The Company does not consider these interests to conflict with Parva Capital acting as Co-Lead Manager to the Company.

18. Documents available for inspection

• 18.1 Copies of the following documents will be available for inspection during normal business hours on any weekday (Saturdays, Sundays and public holidays excepted) at the registered office of the Company and at the offices of Pinsent Masons LLP at 30 Crown Place, London, EC2A 4ES for a period of 12 months following Admission:

• (a) the Articles of Association of the Company

• (b) KPMG report on the Company's financial information as at 31 March 2014; and

• (c) the Prospectus.
• 18.2 Copies of this Prospectus will also be available for download from http://www.intelligent-energy. com/about-us/investors, subject to certain access restrictions applicable to persons resident outside of the United Kingdom. The contents of the Company's website or any website directly or indirectly linked to the Company's website do not form part of this Prospectus and investors should not rely on such contents.

Dated 4 July 2014.

PART IX

DEFINITIONS

The following defined terms apply throughout this document, unless the context requires otherwise:

"2010 PD Amending Directive"	Directive 2010/73/EU
"2013 Management Incentive Plan"	the management incentive plan adopted by the Company, the details of which are summarised at paragraph 6.4 of Part VIII "Additional Information" of this Prospectus
"2013 Management Incentive Plan Awardholders"	holders of Award Shares under the 2013 ManagementIncentive Plan being selected employees (including Dr. Henri Winand and John Maguire)
"\$" or "USD"	US Dollar
"Act"	the Companies Act 2006 (as amended) of England and Wales
"Admission"	the admission of the Ordinary Shares to the standard listing segment of the Official List, and to trading on the London Stock Exchange's market for listed securities, becoming effective
"Articles"	the articles of association of the Company (as adopted with effect from Admission), a summary of which is set out in paragraph 5 of Part IV of this document
"Award Shares"	awards (or, where applicable, options) over Ordinary Shares under the 2013 Management Incentive Plan as more fully described at paragraph 6.4 of Part VIII "Additional Information" of this Prospectus (and so that, where the context so requires, references to Award Shares shall be deemed to include references to the Ordinary Shares issued pursuant to the aforementioned awards and options)
"Barclays"	Barclays Bank PLC
"Board"	the directors of the Company from time to time
"Business Day"	a day on which banks are open for business in London (excluding Saturdays, Sundays and public holidays in the UK)
"Canaccord"	Canaccord Genuity Limited
"CE Division"	the division of the Group that is focused on applying the Group's technology in the consumer electronics industry as described in this Prospectus
"certificated form" or "in certificated form"	not in uncertificated form (that is, not in CREST)
"Company"	Intelligent Energy Holdings plc
"connected person"	a person that is "connected" within the meaning of section 252 of the Act
"Convertible Loan Note Instrument"	the instrument constituting the Convertible Loan Notes, dated 1 August 2013, a summary of which is set out at paragraph 11.8 of Part VIII "Additional Information" of this Prospectus

"Convertible Loan Notes"	the 5 percent unsecured convertible loan notes due 2017, issued pursuant to the Convertible Loan Note Instrument
"CREST Regulations"	the UK Uncertificated Securities Regulations 2001 (as amended) (SI 2001/3755)
"CREST"	the computerised settlement system (as defined in the CREST Regulations) operated by Euroclear UK & Ireland which facilitates the transfer of title to shares in uncertificated form
"Directors"	the directors of the Company as at the date of this document, whose names are set out on page 32 of this document
"Disclosure and Transparency Rules"	the disclosure and transparency rules made by the FCA under FSMA
"DP&G Division"	the division of the Group that is focused on applying the Group's technology in the distributed supply and power generation industry as described in this Prospectus
"DBP"	the proposed Intelligent Energy 2014 Deferred Bonus Plan
"Enlarged Share Capital"	the share capital immediately following Admission
"Euroclear UK & Ireland"	Euroclear UK & Ireland Limited, a company incorporated under the laws of England and Wales and the operator of CREST
"European Economic Area"	the European Union, Iceland, Norway and Liechtenstein
"European Union"	an economic and political union of 28 Member States located in Europe
"Exchange Act"	the US Securities Exchange Act of 1934, as amended
"Executive Plans"	the PSP and the DBP
"Existing Ordinary Shares"	existing Ordinary Shares to be sold under the Offer
"FCA"	the UK Financial Conduct Authority
"FSMA"	the United Kingdom Financial Services and Markets Act 2000, as amended
"GIC"	GIC Private Limited, a company incorporated in Singapore with registration number 198102265N
"GIC Warrants"
	the warrants issued to GIC to subscribe for up to (and including) 6,655,460 Ordinary Shares at an exercise price of £2.50 per Ordinary Share
"Group"	the Company and its subsidiaries at Admission or at another time as the context requires
"IFRS"	International Financial Reporting Standards (including International Accounting Standards)
"JDA"	joint development agreement
"Joint Bookrunners" and "Joint Global Co-ordinators"	Barclays and Canaccord
"Listing Rules"	the listing rules made by the FCA under FSMA

"Managers"	Barclays, Canaccord and Parva Capital
"Member State"	a member state of the European Economic Area
"Motive Division"	the division of the Group that is focused on applying the group's technology in the automotive industry as described in this Prospectus
"New Ordinary Shares"	new Ordinary Shares to be allotted and issued under the Offer
"Offer"	the issue of Offer Shares to certain institutional investors in the UK and elsewhere described in Part VII "The Offer" of this Prospectus
"Offer Price"	the price at which each Ordinary Share is to be issued under the Offer
"Offer Shares"	the Ordinary Shares to be allotted and issued or sold under the Offer, comprising the Existing Ordinary Shares and the New Ordinary Shares
"Official List"	the Official List of the UKLA
"Ordinary Shares"	ordinary shares of 5 pence each in the capital of the Company
"Parva Capital"	Parva Capital Limited
"Prospectus Directive"	means Directive 2003/71/EC and includes any relevant implementing measures in each Relevant Member State that has implemented Directive 2003/71/EC
"PSP"	the proposed Intelligent Energy 2014 Performance Share Plan
"Prospectus Rules"	the Prospectus Rules published by the FCA
"qualified institutional buyers" or "QIBs"	means "qualified institutional buyers" as defined in Rule 144A under the Securities Act
"Registrar"	Equiniti Limited
"Regulation S"	Regulation S under the Securities Act
"Relevant Member State"	each member state of the European Economic Area which has implemented the Prospectus Directive
"Rothschild"	NM Rothschild & Sons Limited
"Rule 144A"	Rule 144A under the Securities Act
"SAYE"	the proposed Intelligent Energy 2014 Save As You Earn Scheme
"Securities Act"	the US Securities Act of 1933, as amended
"Selling Shareholder"	Philip Mitchell, a Director
"Shareholders"	holders of Ordinary Shares in the Company
"Sterling" or "£" or "pence"	respectively pounds and pence sterling, the lawful currency of the United Kingdom

	"UK Corporate Governance Code" the revised code on the principles of good corporate governance and best practice published in September 2012 by the Financial Reporting Council
"UK" or "United Kingdom"	United Kingdom of Great Britain and Northern Ireland
"UKLA"	the FCA acting in its capacity as the competent authority for the purposes of Part VII of FSMA
"uncertificated form" or "in uncertificated form"	recorded in the register as being held in uncertificated form in CREST and title to which, by virtue of the Uncertificated Securities Regulations 2001 (2001/3755), may be transferred by means of CREST
"Underwriting Agreement"	the conditional agreement dated 4 July 2014, between the Company, the Directors and the Managers relating to Admission, details of which are set out in paragraph 9 of Part VII "The Offer" and paragraph 11.2 of Part VIII "Additional Information" of this Prospectus
"US" or "USA" or "United States"	the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia
"VAT"	value added tax

GLOSSARY

The following technical terms when used throughout this document have the meanings given below, unless the context requires otherwise:

"AC"	air cooled; in respect of a fuel cell stack, cooling is provided by a flow of air across or through the cells of the stack allowing heat to be rejected in the exhaust stream
"app" or "App"	Software application designed to run on smartphones and other mobile devices
"BoM"	Bill of Materials; a full list of all components required to manufacture or assemble an item
"car parc"	number of cars and other vehicles in a region or market
"chloralkali"	an industrial process for the electrolysis of sodium chloride solution (brine). Depending on the method, several products besides hydrogen can be produced.
"CO2 "	carbon dioxide
"cold start"	the ability of an engine to commence operation in cold or freezing conditions
"direct methanol fuel cell"	a fuel cell that uses methanol as a fuel source (as opposed to hydrogen, for example)
"drivetrain"	the group of components that deliver power to the driving wheels in a motor vehicle
"etched flow fields"	flow fields that are formed by etching (as opposed to pressing) channels into a plate
"etched plate"	a means of manufacturing elements of a fuel cell stack by etching channels (flow fields) into the surface of a metal plate
"EC"	evaporatively cooled; in respect of a fuel cell stack, cooling is provided by the flow of water across or through the cells of the stack where a phase change from the liquid to the vapour state allows heat to be rejected in the exhaust stream
"FCEV"	fuel cell electric vehicle
"feature phone"	a mid-range multipurpose mobile phone with additional capabilities over and above voice calling and text messaging but with fewer capabilities than a smartphone
"flow fields"	the pattern of channels through which liquids and gases can pass
"gravimetric"	in relation to a measure of power density, is power per unit of weight
"HEV"	hybrid electric vehicle
"H2 /HCNG"	a mixture of compressed natural gas and 4–9 percent hydrogen by energy
"ICE"	internal combustion engine
"intellectual property portfolio"	patents, design rights, copyright, know-how, trade secrets and other registered and unregistered intellectual property rights

"JDA"	joint development agreement
"kg"	kilogram
"km"	kilometres
"kW"	kilowatt
"materials handling"	the movement and storage of materials, goods and products normally in industrial, manufacturing or warehouse sites (e.g. by forklift truck)
"OEM"	original equipment manufacturer
"Peak power"	the maximum electrical power that the stack is capable of delivering
"PEM"	proton exchange membrane
"pressed flow fields"	flow fields that are formed by pressing (as opposed to etching) channels into a plate
"pressed plate"	a means of manufacturing elements of a fuel cell stack by pressing channels (flow fields) into the surface of a metal plate
"power density"	means a measure of power per given weight and/or volume (e.g. kW per kg)
"range extender"	An indirect motive power source used to recharge the vehicle battery pack during driving providing greater driving range than were the vehicle to rely on initial battery charge alone
"roll-fed high-speed presses"	a manufacturing method for producing pressed flow fields from roll-stock sheet metal
"smartphone"	a mobile phone with advanced computing capability and connectivity
"solid oxide fuel cell"	a fuel cell in which the electrolyte is characterized by oxygen ions being the mobile conductive species
"total cost of ownership"	the cost of ownership across the lifetime of an asset (i.e. acquisition as well as running costs)
"volumetric"	in relation to a measure of power density, is power per unit of volume
"W"	watt
"Whole Vehicle Type Approval"	approval by a designated approval body of a vehicle's environmental, safety and security standards

Millnet Limited (9129-01)