TIDMIAF
RNS Number : 9933I
Iafyds PLC
06 June 2014
Iafyds plc
("Iafyds" or the "Company")
Final Results for the Year ended 31 December 2013 and Placing of
3,666,666,666 Ordinary Shares at 0.003pence
Chairman's Statement
Introduction
Unusually for a public company, most of what is in these
statutory accounts has little relevance to the future as the
business to which the accounts refer is discontinued and has not
traded since the interim results which were set out in the circular
to shareholders dated 22 January 2014.
What is of importance for the future is the progress made and
likely outcome of the search for a new direction.
Background
On 4 September 2013 the then board announced that it had been
unable to secure additional funding to continue trading as an
energy efficiency technology company. Accordingly the Company has
been through an Administration process being subject to a Creditors
Voluntary Agreement ("CVA"), while the Group's only trading
subsidiary, VPhase Smart Energy Limited ("VSEL"), remains in
Administration and will subsequently be liquidated. Although the
Company retains its 100% ownership of VSEL, the Administrators have
taken full control of VSEL and will maintain ownership of the final
CVA outcome. The Company no longer controls VSEL and the entity has
been treated as discontinued from the date of administration.
The administration process for VSEL is nearing completion at
which point a final creditor's dividend will be paid up from VSEL
to the Company. This dividend will be paid out to CVA Creditors of
the Company to satisfy the CVA.
Rather than see the Company fail, Henderson Global Investors
Limited ("Henderson") agreed to invest additional funds so that
once the liabilities of the various business had been removed the
Company might use its only remaining asset, the public quotation of
its shares, in a new venture. To that end Henderson invested
GBP150,000 of new money by way of the purchase of new shares on 7
February 2014 and accordingly came to own 83.9 per cent of the
Company subsequent to the balance sheet date.
Colin Hutchinson and I joined the board on 7 February 2014 to
help find and assess a suitable acquisition for the Group. The
Company's name was changed from VPhase plc to Iafyds plc subsequent
to year-end.
Search for an acquisition
The search for a new direction has coincided with a sharp
increase in the number of Initial Public Offerings ("IPO's") on
AIM. This has reduced the number of private companies looking for
an AIM listing for their shares via a reverse takeover as this
route is perceived to be less attractive when the conventional IPO
market is strong.
In recent weeks however, investor sentiment towards further IPO
activity in 2014 has cooled following the poor performance of some
recent IPO's in the aftermarket. It remains to be seen whether this
will reduce the number of conventional IPO's in the second half of
the year.
Under the AIM rules Iafyds has until 6 February 2015 to complete
a reverse takeover. Should it fail to do so it is likely that its
quotation on AIM would be cancelled permanently.
Financial position
The Company has no material cash balances and any acquisition
would almost certainly require an associated fund raising.
In order to meet the current running costs of the Group
Henderson, on 4 June 2014, agreed to invest a further GBP110,000 at
the same revised nominal price per share of 0.003 pence as on 7
February 2014. This is, under the AIM Rules, a related party
transaction by virtue of Henderson's existing 83.9 per cent
shareholding in the Group. The Directors consider, having consulted
with the Company's Nominated Adviser, that the terms of the
transaction are fair and reasonable insofar as the Company's
shareholders are concerned. Application has been made to the London
Stock Exchange for the new Ordinary Shares, which will rank pari
passu with the Company's existing Ordinary Shares, to be admitted
to trading on AIM. Admission is expected to occur at 8.00 a.m. on
12 June 2014.
Following this investment, Henderson now own 89.8 per cent of
the Group's shares.
Outlook
As the typical time to complete a reverse takeover is three
months, we recognise that the Group needs to identify and reach
agreement in principle with a suitable target by the autumn.
Failure to do so is likely to result in the Group's only asset, its
quotation, being lost.
Strategic Report
Section 414C of the Companies Act ('the Act') requires that the
Company inform its members as to how the Directors have performed
their duty to promote the success of the Company by way of a
Strategic Report.
The Chairman's Statement also forms a fundamental part of the
Strategic Report.
Business model
Until 4 September 2013 Iafyds plc (then VPhase plc) was an
energy efficiency technology company focused on the provision of
home energy efficiency products and services designed to reduce
energy consumption for domestic and small commercial properties.
The disposal of the intellectual property and business assets of
VSEL to Southern Fox Investments Limited and Bristol Bluegreen
Limited, for GBP200,000 on 24 September 2013, represented a
fundamental change to the business and has resulted in the Company
disposing of all of its tangible operating assets and business.
The restructuring of the business has led to a fundamental
change in the Company's business as it no longer engages in any
trading activities. Consequently, the Company now constitutes an
Investing Company, as provided for by Rule 15 of the AIM Rules for
Companies issued by the London Stock Exchange.
Investing Policy
The Company's Investing Policy is to invest in businesses that
typically have attributed to them some or all of the following
criteria and characteristics:
-- Strong management;
-- An established entity or product in growth mode;
-- A differentiated product or offering;
-- A significant potential market opportunity; and
-- The ability to generate strong cash flows in the future.
The Company will initially focus on projects located in the
United Kingdom but will also consider investments in other
geographical regions in the future. The Company will consider all
sectors; however, the Directors recognise that there are sectors
which are unlikely to meet its investment criteria.
The Directors believe that their collective experience, together
with their extensive network of contacts will assist it in the
identification, evaluation and funding of suitable investment
opportunities. When necessary, other external professionals will be
engaged to assist in the due diligence of prospective
opportunities. The Directors will also consider appointing
additional directors with relevant experience if the need
arises.
The objective of the Directors is to generate capital
appreciation and any income generated by the Company will be
applied to cover costs or will be added to the funds available to
further implement the investment policy. In view of this, it is
unlikely that the Directors will recommend a dividend in the early
years. However, they may recommend or declare dividends at some
future date depending on the financial position of the Company.
Any proposed investment to be made by the Company is likely to
be in just one investment which may be deemed to be a reverse
takeover under the AIM Rules, in which case shareholder approval
will be required. Investments will be made with a view to yielding
returns over the medium to long term.
Review of the business
The loss for the year was GBP2,220,000 (2012: GBP1,658,000).
VPhase Smart Energy Limited began 2013 in a disappointing
fashion. The Company had raised GBP519,000 of new funds and signed
the BG contract and expected continued growth. However, the
introduction of the Green Deal and the Energy Company Obligation
had a detrimental impact on the demand for energy efficiency
products including voltage optimisation. In addition the welfare
reforms led to a reduction in budgets available for refurbishment
and energy efficiency measures. This had a damaging impact on sales
which dropped dramatically in the second quarter.
It became apparent that, given downturn in performance and funds
available, additional funding would be required to ensure that the
Group could continue to trade. An approach was made to our existing
institutional investors; however given the deterioration in trading
performance and the uncertainty surrounding the wider market for
energy efficiency products the existing institutional investors
were unwilling to commit funds and new institutions were also
deterred by that stance.
The Board explored other sources of funding but it became
apparent that funds were either not available in sufficient quantum
or as timely as required and on 20 June 2013 we requested the
suspension of our shares from trading on the AIM Market of the
London Stock Exchange. During this period advice was sought from
BDO LLP in relation to the options available. Given the Group's
financial position the Directors filed notices of intention to
appoint Administrators for the Group on 12 July 2013.
Between 12 July 2013 and 22 August 2013, the business and its
assets were marketed and a solvent solution was identified whereby
the trading subsidiary would be sold as a going concern and the
holding company VPhase plc converted into an investment shell.
During this period the Directors took legal advice on the extension
to the Intention to Appoint Administrators each time it lapsed and
maintained the protection for the Group by extending the notice. On
22 August 2013, the third notice lapsed and it was not deemed
appropriate to extend the Notice as the solvent solution for the
subsidiary was progressing well. The terms of the restructuring of
VPhase plc could not be agreed and on 4 September 2013, the
Directors made an application for the appointment of Joint
Administrators and Dermot Justin Power and Patrick Alexander
Lannagan were appointed.
On 6 September 2013, 9 out of 17 employees were made redundant
and the remainder by the 30 September 2013. During this period the
Administrators sold the intellectual property and tooling for
GBP200,000 and commenced the disposal of the remaining business
assets. On 20 September 2013, Vanda Murray OBE and Duncan Sedgwick
both resigned from the Board.
VPhase Smart Energy Limited has been treated as a discontinued
operation and deemed disposed of from the date it entered
administration. A loss for the year on discontinued operation of
GBP2,118,000 has been recognised (2012: GBP1,548,000).
On 12 November 2013, at a meeting of creditors the Joint
Administrators' proposals were approved, including that the Joint
Administrators proposed a Company Voluntary Arrangement ("CVA"). At
subsequent meetings of creditors and members, also held on 12
November 2013, the CVA was approved. The CVA commenced on 12
November 2013. The terms of the CVA were discussed in the documents
issued to Creditors and Members. Broadly the Supervisors will
receive any dividend from Vphase Smart Energy Limited, along with a
contribution from a third party, and will distribute these funds to
Creditors. Upon the funds being distributed the CVA will be
completed.
On 7 January 2014 the Company announced that it had exited
administration effective from 27 December 2013. The Company entered
into a CVA with its creditors and members, and raised approximately
GBP150,000 through a conditional placing to Henderson of
5,000,000,000 New Ordinary Shares at 0.003 pence per New Ordinary
Share. Following shareholder approval of the placing on 7 February
2014, Henderson's total shareholding gave it a controlling stake in
the Company at 83.9%. Henderson's acquisition of New Ordinary
Shares would normally, without a waiver by the Panel of the
obligations under Rule 9 of the Takeover Code, have resulted in
Henderson being required to make a general offer for the remaining
New Ordinary Shares of the Company. The Panel agreed to such a
waiver, following written confirmations, consenting to such waiver
being granted, being received from the Consenting Independent
Shareholders who held in excess of 50 per cent of the Company's
existing voting shares.
Immediately prior to the placing there was a Capital
Reorganisation as the subscription price proposed was lower than
the nominal value of existing ordinary shares. The shareholders
approved a Capital Reorganisation on the basis that each of the
Existing Ordinary Shares of 0.25 pence each will be subdivided into
and reclassified as:
(a) One Redenominated Share (being an ordinary share in the
capital of the Company with a nominal value of 0.003 pence each);
and
(b) One Deferred Share (being a deferred share in the capital of
the Company with a nominal value of 0.247 pence each).
The Deferred Shares will not be admitted to trading on AIM (or
any other investment exchange). The Deferred Shares will have
limited rights, and will be subject to the restrictions, as set out
in the Company's New Articles, proposed to be adopted at the
General Meeting, and as summarised below.
The Deferred Shares will be transferable only with the consent
of the Company and will not be admitted to trading on AIM (or any
other investment exchange). The holders of the Deferred Shares
shall not, by virtue or in respect of their holdings of Deferred
Shares, have the right to receive notice of any general meeting of
the Company nor the right to attend, speak or vote at any such
general meeting.
On 7 February 2014 Richard Smith and Colin Black resigned from
the Board and were replaced by Colin Hutchinson and myself.
Key performance indicators
The Directors will review a range of financial and non-financial
key performance indicators of any potential investment target.
Principal Risks and Uncertainties
In order to avoid suspension of its securities from trading, AIM
Rule 15 requires an investing company to make an acquisition which
constitutes a reverse takeover under AIM Rule 14 or otherwise
implement its investing policy to the satisfaction of the London
Stock Exchange within twelve months of the disposal occurring. This
period will expire on the 6 February 2015.
Future developments
As required by the AIM Rules, until the Investment Policy is
substantially implemented, at each Annual General Meeting of the
Company shareholder approval of its Investing Policy will be
sought.
Going Concern
Due to the events occurring in the year, the Group no longer
conducts its original trading activities and as a result of this
cessation of trade the Financial Statements of the Group are
prepared on a basis other than going concern.
As stated above, the Company has reached an agreement with its
creditors and members to execute a CVA. The Directors acknowledge
the net liabilities position of the Group and Company at the
balance sheet date, however as stated above an injection of funds
of GBP150,000 was made by Henderson by way of a share placing
subsequent to year-end end and a further placing of GBP110,000 was
agreed on 4 June 2014. Following finalisation of the CVA, the
Company is forecast to have sufficient funds to continue as an
investment shell in the short-term. The Directors have considered
the Company's new investment policy strategy and remain confident
an acquisition can be made over the forthcoming period. As stated
above, in order to avoid suspension of its securities from trading,
AIM Rule 15 requires an investing company to make an acquisition
which constitutes a reverse takeover under AIM Rule 14 or otherwise
implement its investing policy to the satisfaction of the London
Stock Exchange within twelve months of the disposal occurring. As a
consequence there is a material uncertainty as to whether the
investing policy will be executed within the prescribed timeframe,
which may cast significant doubt on the Company's ability to
continue as a going concern.
Clive Carver
Chairman
4(th) June 2014
For further information please contact:
Iafdys plc: Clive Carver, Chairman iafydsplc@gmail.com
Panmure Gordon: Hugh Morgan / Callum Stewart +44 (0) 20 7886 2500
About Iafyds plc
Iafyds plc is an Investing Company under AIM rules and the
Company does not trade at present. Iafyds plc's shares are listed
on the AIM Market of the London Stock Exchange.
The results given below are extracted from the Iafyds full
Annual Report which is available from the Company's website
www.vphases.co.uk
Directors' Report
The Directors present their annual report and financial
statements for the year ended 31 December 2013.
Under section 414C(11) of the Act, the Directors have included
information relating to the Going Concern of the Company in the
Strategic Report, otherwise required by regulations made under
section 416(4) to be disclosed in the Directors' report, given its
strategic importance to the Company.
Results and dividends
The loss for the year after taxation was GBP2.2 million (2012:
GBP1.7 million). The Directors cannot recommend the payment of a
dividend.
Directors
The Directors of the Company that served during the year, and
subsequently, were as follows:
Richard Smith (resigned 7 February 2014)
Vanda Murray (resigned 20 September 2013)
Colin Black (resigned 7 February 2014)
Duncan Sedgewick (resigned 20 September 2013)
Clive Carver (appointed 7 February 2014)
Colin Hutchinson (appointed 7 February 2014)
Relevant details of the current Directors are set out on page
10.
Directors Interests
The beneficial and non-beneficial interests in the issued share
capital of the Company were as follows:
31 December 31 December
2013 2012
No. of % No. of %
Ordinary Ordinary
Shares Shares
Richard Smith 26,744,149 1.9% 13,944,149 1.1%
Vanda Murray 8,703,700 0.6% 5,917,951 0.5%
Colin Black 3,164,896 0.2% 2,278,129 0.2%
Duncan Sedgewick 2,443,330 0.2% 1,643,452 0.1%
Clive Carver - - -
Colin Hutchinson - - -
Directors' emoluments
2013 Salary/fees Benefits Share 2013
based Total
payment
GBP GBP GBP GBP
Executive Directors
Richard Smith 125,359 - - 125,359
Non-executive
Directors `
Vanda Murray 40,000 - - 40,000
Duncan Sedgewick 12,500 - - 12,500
Colin Black 18,500 - - 18,500
------------ --------- --------- --------
Total 181,667 - - 181,667
2012 Salary/fees Benefits Share 2012
based Total
payment
GBP GBP GBP GBP
Executive Directors
Richard Smith 175,000 1,500 44,903 221,403
Non-executive
Directors
Vanda Murray 60,000 - 13,077 73,077
Duncan Sedgewick 25,000 - - 25,000
Colin Black
(a) 14,583 - - 14,583
Nick Moss (b) 10,417 - - 10,417
------------ --------- --------- --------
Total 274,583 1,500 57,980 334,063
(a) Colin Black was appointed 21 May 2012
(b) Nick Moss resigned 21 May 2012
2013 As at Granted/ As at Exercise Exercise Period
01-Jan-13 (Lapsed) 31-Dec-13 Price Start End
Richard
Smith 10,507,944 (10,507,944) - 2.38 07/07/2010 06/07/2020
15,000,000 (15,000,000) - 0.80 19/03/2012 18/03/2022
Vanda
Murray 10,507,944 (10,507,944) - 2.38 07/07/2010 06/07/2020
2012 As at Granted/ As at Exercise Exercise Period
01-Jan-12 (Lapsed) 31-Dec-12 Price Start End
Richard
Smith 10,507,944 10,507,944 2.38 07/07/2010 06/07/2020
15,000,000 15,000,000 0.80 19/03/2012 18/03/2022
Vanda
Murray 10,507,944 10,507,944 2.38 07/07/2010 06/07/2020
Third party indemnity provision
The Company has provided liability insurance for its Directors.
The annual cost of the cover is not material to the Group. The
Company's Articles of Association allow it to provide an indemnity
for the benefit of its Directors which is a qualifying indemnity
provision for the purposes of the Companies Act 2006.
Share capital
Details of changes to share capital in the year are set out in
Note 17 to the Financial Statements.
As at 2 April 2014 the Company has been notified of the
following significant interests in its ordinary shares, being a
holding of 3% and above:
Henderson Global Investors Limited 83.9%
Flowgroup plc (previously Energetix Group plc) 5.6%
Shareholder communications
The Company has a website, www.vphase.co.uk, for the purposes of
improving information flow to shareholders, as well as potential
investors. The domain name is the former name of the Company and
will be considered to be changed at an appropriate point in
time.
Employees
The Company's Board composition provides the platform for sound
corporate governance and robust leadership in implementing the
Company's strategies to meet its stated goals and objectives.
The Group no longer has any employees following the restructure
of the business. The Group held its employees and consultants at
all levels to high standards and expects the conduct of its
employees to reflect mutual respect, tolerance of cultural
differences, adherence to the corporate code of conduct and an
ambition to excel in their various disciplines. The Group aims to
continue to apply these standards for any new employees.
Disclosure of information to the auditor
In the case of each person who was a Director at the time this
report was approved:
-- so far as that Director was aware there was no relevant
available information of which the Company's auditors was unaware;
and
-- that Director had taken all steps that the Director ought to
have taken as a Director to make himself aware of any relevant
audit information and to establish that the Company's auditor is
aware of that information.
This information is given and should be interpreted in
accordance with the provisions of Section 418 of the Companies Act
2006.
Auditor
In accordance with Section 489 of the Companies Act 2006, a
resolution for the reappointment of Deloitte as auditors of the
Company is to be proposed at the forthcoming Annual General
Meeting.
Approved for issue by the Board of Directors and signed on its
behalf:
Clive Carver
Chairman
4th June 2014
Board of Directors
Clive Carver
Non-executive Director
Clive Carver qualified as a chartered accountant in 1986 before
spending 8 years in the corporate finance departments of Kleinwort
Benson, Price Waterhouse and Shire Trust. He then spent 17 years in
the corporate broking arena becoming successively head of corporate
finance at Seymour Pierce, Williams de Broë and finnCap.
Since 2006 Clive has been chairman of AIM listed Roxi Petroleum,
a Kazakh based oil & gas exploration and production company,
becoming Executive Chairman in June 2012. He is also Non-Executive
Chairman of Ascent Resources, an AIM listed company with gas
interests in Slovenia and a non-executive director of fastjet PLC,
an airline focused on Africa.
Colin Hutchinson
Non-executive Director
Colin is a chartered accountant and holds an MBA from Warwick
Business School. He has 15 years of international experience gained
in commercially orientated finance roles with high growth
organisations and start-ups. He has experience across a range of
different sectors including telecoms, technology & energy. His
most recent role has been as Group Financial Controller &
Company Secretary of Ascent Resources plc.
Directors and Advisers
Directors Clive Carver
Colin Hutchinson
Company secretary Barbara Spurrier
Registered Office 39 Long Acre,
London,
WC2E 9LG
Nominated Adviser and Panmure Gordon
Broker One New Change
London
EC4M 9AF
Auditor Deloitte LLP
Chartered Accountants
and Statutory Auditor
Manchester
United Kingdom
Bankers Barclays Corporate Bank
1 Churchill Place
London
E14 5HP
Share Registry Neville Registrars Limited
Neville House
18 Laurel Lane
Halesowen
West Midlands
B63 3DA
Company's registered
number 04958332
Corporate Responsibility
Ethics We are committed to ensuring that our
business is conducted to the highest
ethical and professional standards.
We recognise that trust and reputation
are key elements in our business and
make every effort to protect them.
People We recognise that our reputation is
dependent on the skill and professionalism
of everyone within our business. We
aim to achieve sustainable growth through
attracting, developing and retaining
skilled and motivated people. We promote
equality in all areas of our operation.
Health We are committed to the highest standards
& Safety of Health and Safety in all areas of
our business, to minimise the risk to
our previous and prospective future
employees, our customers and the general
public.
Environment We take our environmental responsibilities
seriously and aim to minimise our environmental
impact.
Suppliers We regard suppliers as partners and
seek to work closely with them to achieve
our objectives. We work with our suppliers
to seek to ensure that they meet our
own standards of Corporate Responsibility.
Directors' Responsibilities Statement
The Directors are responsible for preparing the Annual Report
and the Financial Statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
have elected to prepare the Group and Company financial statements
in accordance with International Financial Reporting Standards
('IFRSs') as adopted by the European Union and have elected to
prepared the parent company financial statements in accordance with
United Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards and applicable law). Under company law
the Directors must not approve the financial statements unless they
are satisfied that they give a true and fair view of the state of
affairs of the Group and Company and of the profit or loss of the
Group for that period. The Directors are also required to prepare
financial statements in accordance with the rules of the London
Stock Exchange for companies trading securities on the AIM
Market.
In preparing the parent company financial statements, the
directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgments and accounting estimates that are reasonable and prudent;
-- state whether applicable UK Accounting Standards have been
followed, subject to any material departures disclosed and
explained in the financial statements; and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the company will
continue in business.
In preparing the Group financial statements, International
Accounting Standard 1 requires that directors:
-- properly select and apply accounting policies;
-- present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
-- provide additional disclosures when compliance with the
specific requirements in IFRSs are insufficient to enable users to
understand the impact of particular transactions, other events and
conditions on the entity's financial position and financial
performance; and
-- make an assessment of the company's ability to continue as a going concern.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the company's
transactions and disclose with reasonable accuracy at any time the
financial position of the company and enable them to ensure that
the financial statements comply with the Companies Act 2006. They
are also responsible for safeguarding the assets of the company and
hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
The directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
company's website. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
Responsibility statement
We confirm that to the best of our knowledge:
-- the financial statements, prepared in accordance with the
relevant financial reporting framework, give a true and fair view
of the assets, liabilities, financial position and profit or loss
of the company and the undertakings included in the consolidation
taken as a whole;
-- the strategic report includes a fair review of the
development and performance of the business and the position of the
company and the undertakings included in the consolidation taken as
a whole, together with a description of the principal risks and
uncertainties that they face; and
-- the annual report and financial statements, taken as a whole,
are fair, balanced and understandable and provide the information
necessary for shareholders to assess the company's performance,
business model and strategy.
Independent Auditor's Report to the Members of Iafyds plc
We have audited the financial statements of Iafyds plc for the
year ended 31 December 2013 which comprise the Consolidated Income
Statement, the Consolidated Statement of Comprehensive Loss, the
Consolidated Statement of Changes in Equity, the Consolidated
Statement of Financial Position, the Consolidated Cash Flow
Statement, the Company Balance Sheet, and the related notes 1 to
21. The financial reporting framework that has been applied in the
preparation of the Group financial statements is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by
the European Union. The financial reporting framework that has been
applied in the preparation of the parent company financial
statements is applicable law and United Kingdom Accounting
Standards (United Kingdom Generally Accepted Accounting
Practice).
This report is made solely to the Company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
Company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the Company and the Company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Respective Responsibilities of Directors and Auditor
As explained more fully in the Directors' Responsibilities
Statement, the Directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true
and fair view. Our responsibility is to audit and express an
opinion on the financial statements in accordance with applicable
law and International Standards on Auditing (UK and Ireland). Those
standards require us to comply with the Auditing Practices Board's
Ethical Standards for Auditors.
Scope of the Audit of the Financial Statements
An audit involves obtaining evidence about the amounts and
disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free from
material misstatement, whether caused by fraud or error. This
includes an assessment of: whether the accounting policies are
appropriate to the Group's and the parent company's circumstances
and have been consistently applied and adequately disclosed; the
reasonableness of significant accounting estimates made by the
Directors; and the overall presentation of the financial
statements. In addition, we read all the financial and
non-financial information in the Annual Report to identify material
inconsistencies with the audited financial statements and to
identify any information that is apparently materially incorrect
based on, or materially inconsistent with, the knowledge acquired
by us in the course of performing the audit. If we become aware of
any apparent material misstatements or inconsistencies we consider
the implications for our report.
Opinion on Financial Statements
In our opinion:
-- the financial statements give a true and fair view of the
state of the Group's and of the parent company's affairs as at 31
December 2013 and of the Group's loss for the year then ended;
-- the Group financial statements have been properly prepared in
accordance with IFRSs as adopted by the European Union;
-- the parent company financial statements have been properly
prepared in accordance with United Kingdom Generally Accepted
Accounting Practice; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
Emphasis of matter - Going concern
In forming our opinion on the financial statements, which is not
modified, we have considered the adequacy of the disclosure made in
note 1 to the financial statements concerning the Company's ability
to continue as a going concern. The Group's previous trade ceased
during the year and the Company became an investing company under
the AIM rules. AIM Rule 15 requires an investing company to make an
acquisition which constitutes a reverse takeover under AIM Rule 14
or otherwise implement its investing policy to the satisfaction of
the London Stock Exchange within twelve months of the disposal
occurring, and hence the Company now has until 6 February 2015 to
make an acquisition and recommence trading. As a consequence there
is a material uncertainty as to whether the investing policy will
be executed within the prescribed timeframe, which may cast
significant doubt on the Company's ability to continue as a going
concern.
Opinion on Other Matters Prescribed by the Companies Act
2006
In our opinion the information given in the Directors' Report
and the Strategic Report for the financial year for which the
financial statements are prepared is consistent with the financial
statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters
where the Companies Act 2006 requires us to report to you if, in
our opinion:
-- adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the parent company financial statements are not in agreement
with the accounting records and returns; or
-- certain disclosures of Directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Jane Boardman Bsc ACA (Senior Statutory Auditor)
for and on behalf of Deloitte LLP
Chartered Accountants and Statutory Auditor
Manchester, United Kingdom
4 June 2014
Consolidated Income Statement
For the year ended 31 December 2013
Restated
*
Year Year
ended ended
31 December 31 December
2013 2012
Notes GBP '000s GBP '000s
Revenue - -
Cost of sales - -
------------ ------------
Gross profit - -
Administrative expenses 3 (102) (110)
------------ ------------
Loss from operating
activities (102) (110)
Net finance costs - -
------------ ------------
Loss before taxation (102) (110)
Income tax expense 6 - -
------------ ------------
Loss for the year from
continuing operations (102) (110)
Loss for the year from
discontinued operations 2 (2,118) (1,548)
Loss for the year (2,220) (1,658)
Loss per share
Basic & fully diluted
loss per share (Pence) 7 (0.16) (0.13)
* The comparatives have been restated to reflect the
requirements of IFRS 5 'Non-current Assets Held for Sale and
Discontinued Operations. See accounting policies for details.
The loss for each year is also the total comprehensive loss for
that year and consequently no separate statement of comprehensive
loss is presented.
The notes on pages 22 to 38 are an integral part of these
Financial Statements.
Consolidated Statement of Changes in Equity
For the year ended 31 December 2013
Share Share Merger Capital Retained Reverse Warrant Other Total
capital premium relief redemption earnings acquisition reserve reserves equity
reserve reserve reserve
GBP GBP GBP GBP '000s GBP GBP '000s GBP GBP
'000s '000s '000s '000s '000s '000s
Balance at 1
January 2012 3,180 7,188 1,150 994 (5,956) (3,682) - 250 3,124
Loss for the
year - - - - (1,658) - - - (1,658)
Total
comprehensive
loss - - - - (1,658) - - - (1,658)
Share-based
payments - - - - - - - 82 82
Shares issued
in the period 22 35 57
Balance at 31
December 2012 3,202 7,223 1,150 994 (7,614) (3,682) - 332 1,605
--------------- --------- --------- --------- ----------- --------- ------------ --------- --------- --------
Balance at 1
January 2013 3,202 7,223 1,150 994 (7,614) (3,682) - 332 1,605
Loss for the
year - - - - (2,220) - - - (2,220)
Total
comprehensive
loss - - - - (2,220) - - - (2,220)
Other reserves
written off 332 (332) -
Shares issued
in the period 272 267 - - - - - - 539
Balance at 31
December 2013 3,474 7,490 1,150 994 (9,502) (3,682) - - (76)
--------------- --------- --------- --------- ----------- --------- ------------ --------- --------- --------
Consolidated Statement of Financial Position
As at 31 December 2013
31 December 31 December
2013 2012
Assets Notes GBP '000s GBP '000s
Non-current assets
Intangible assets 8 - 481
Property plant & equipment 9 - 193
------------ ------------
Total non-current assets - 674
Current assets
Inventories 11 - 1,058
Trade and other receivables 12 181 236
Cash and cash equivalents - 359
------------ ------------
Total current assets 181 1,653
Total assets 181 2,327
============ ============
Equity and liabilities
Attributable to the equity
holders of the Parent
Company
Share capital 17 3,474 3,202
Share premium 7,490 7,223
Merger relief reserve 1,150 1,150
Capital redemption reserve 994 994
Retained earnings (9,502) (7,614)
Reverse acquisition reserve (3,682) (3,682)
Other reserves - 332
------------ ------------
Total equity (76) 1,605
------------ ------------
Current liabilities
Trade and other payables 15 257 567
Provisions 14 - 101
Borrowings - 54
Total liabilities 257 722
------------ ------------
Total equity and liabilities 181 2,327
============ ============
The financial statements of Iafyds plc (registered number
04958332) were approved and authorised for issue on 4 June 2014 and
were signed on its behalf by:
Clive Carver
Chairman
Consolidated Cash Flow Statement
For the year ended 31 December 2013
Year ended Year ended
31 December 31 December
2013 2012
GBP '000s GBP '000s
Cash flows from operating
activities
Cash consumed by operating
activities 18 (655) (1,468)
Net cash used in operating
activities (655) (1,468)
------------- -------------
Cash flows from investing
activities
Expenditure on intangible
assets (15) (250)
Purchases of property, plant
& equipment (14) (181)
Disposal of subsidiary (187) -
Net finance income / (expense) - (1)
Net cash used in investing
activities (216) (432)
------------- -------------
Cash flows from financing
activities
Proceeds from issue of shares 519 57
Share issue costs (7) -
Increase in debt factoring
facility - 54
Net cash generated from
financing activities 512 111
------------- -------------
Net decrease in cash and
cash equivalents for the
year (359) (1,789)
Cash and cash equivalents
at beginning of the year 359 2,148
Cash and cash equivalents
at end of the year - 359
============= =============
Company Balance Sheet
As at 31 December 2013
31 December 31 December
2013 2012
Notes GBP '000s GBP '000s
Fixed assets
Investments 10 - 2,483
Current assets
Debtors 13 181 7,434
Cash and cash equivalents - 139
------------ ------------
Total current assets 181 7,573
Creditors: amounts falling
due within one year 16 (257) (1,895)
Net current (liabilities)/assets (76) 5,678
Total assets less current
liabilities (76) 8,161
Net (liabilities)/assets (76) 8,161
============ ============
Capital and reserves
Called up share capital 17 3,474 3,201
Share premium 7,490 7,223
Merger relief reserve 1,150 1,150
Capital redemption reserve 994 994
Profit and loss account (13,184) (4,739)
Other reserves - 332
------------ ------------
Shareholders' (deficit)/funds (76) 8,161
============ ============
The financial statements of Iafyds plc (registered number
04958332) were approved and authorised for issue on 4 June 2014 and
were signed on its behalf by:
Clive Carver
Chairman
Notes to the Financial Statements
1. Accounting Policies
Reporting entity
Iafyds plc ("the Company") and its subsidiaries (together 'the
Group') previously developed products that provide energy
efficiency solutions to certain identified problems in the energy
market. The Company is now an investment company. The addresses of
its registered office and principal place of business are disclosed
on page 11 of the Group Financial Statements. Iafyds plc is a
public limited company incorporated in England and Wales under the
Companies Act 2006.
Basis of Preparation
The Group Financial Statements of Iafyds plc have been prepared
in accordance with International Financial Reporting Standards
(IFRS) as adopted by the European Union. The Group Financial
Statements have been prepared under the historical cost
convention.
The comparatives for the consolidated income statement and
consolidated statement of cash flows for the year ended 31 December
2012 have been restated to reflect the disclosure of the results of
discontinued operations (see note 2).
The Company Financial Statements have been prepared under the
historical cost convention and in accordance with the Companies Act
2006 and applicable UK accounting standards (United Kingdom
Generally Accepted Accounting Practice).
Going concern
Due to the events occurring in the year, the Group no longer
conducts its original trading activities and as a result of this
cessation of trade the Financial Statements of the Group are
prepared on a basis other than going concern.
As stated above, the Company has reached an agreement with its
creditors and members to execute a CVA. The Directors acknowledge
the net liabilities position of the Group and Company at the
balance sheet date, however as stated above an injection of funds
of GBP150,000 was made by Henderson by way of a share placing
subsequent to year-end. Following finalisation of the CVA, and the
injection of a further GBP110,000 the Company is forecast to have
sufficient funds to continue as an investment shell in the
short-term. The Directors have considered the Company's new
investment policy strategy and remain confident an acquisition can
be made over the forthcoming period. As stated above, in order to
avoid suspension of its securities from trading, AIM Rule 15
requires an investing company to make an acquisition which
constitutes a reverse takeover under AIM Rule 14 or otherwise
implement its investing policy to the satisfaction of the London
Stock Exchange within twelve months of the disposal occurring. As a
consequence there is a material uncertainty as to whether the
investing policy will be executed within the prescribed timeframe,
which may cast significant doubt on the Company's ability to
continue as a going concern.
Critical Accounting Estimates and Judgments
The preparation of the Group Financial Statements in conformity
with IFRS as adopted by the European Union requires the use of
certain critical accounting estimates. It also requires management
to exercise its judgment in the process of applying the Group's
accounting policies.
Estimates and judgments are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
present circumstances.
The areas involving a higher degree of judgment or complexity,
or areas where assumptions and estimates are significant to the
Group Financial Statements are disclosed below.
Critical accounting judgements and policies
Going concern
The policy, and the basis of preparation, is contained on page
22.
Discontinued operations
The Company's principal subsidiary, VPhase Smart Energy Limited,
ceased trading operations prior to the balance sheet date and
entered into Administration resulting in loss of control.
Accordingly the results of that company have been presented as
discontinued operations in the financial statements.
Taxation
The Directors have not recognised a deferred tax asset in
relation to unrelieved tax losses as the recoverability is
currently uncertain due to the ability to generate sufficient
profits in the future to utilise the tax losses available.
Basis of Consolidation
Reverse acquisition
On 26 September 2007, the Company changed its name to VPhase plc
and the Company became the legal holding company of VPhase Smart
Energy Limited via a share for share exchange. The share for share
exchange has been accounted for as a reverse acquisition.
The Group Financial Statements also incorporate the Financial
Statements of the Company and entities controlled by the Company
(its subsidiaries). Control is achieved where the Company has power
to govern the financial and operating policies of an entity so as
to obtain benefits from its activities.
Subsidiaries
The results of subsidiaries acquired or disposed of during the
year are included in the Group Income Statement from the effective
date of acquisition or up to the effective date of disposal, as
appropriate. The Company continues to hold 100% of the share
capital of VPhase Smart Energy Limited ("VSEL"), a former
subsidiary of the Group. The Company however no longer has control
of that company following VSEL entering Administration on 4
September 2013 resulting in a deemed disposal and VSEL is therefore
no longer a subsidiary of the Company. The results of VSEL are
consolidated only up to the date that company entered
Administration.
In accordance with Section 408 of the Companies Act 2006, no
profit and loss account is presented for the Company. The Company
made a loss for the year of GBP8,777,000 (2012: GBP404,000).
Intangible Assets
The carrying values of intangible assets are tested when events
or changes in circumstances indicate that the carrying amount may
not be recoverable.
Intangible assets are reviewed annually for impairment, and if
necessary an impairment loss is recognised in the Group Income
Statement within administrative expenses for the amount by which
the asset's carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of fair value, reflecting market
conditions less costs to sell, and value in use based on an
internal discounted cash flow evaluation. Intangible assets are
subsequently reassessed for indications that an impairment loss
previously recognised may no longer exist.
Property, Plant and Equipment
Property, plant and equipment are stated at historical cost less
depreciation. Depreciation of assets is calculated using the
straight line method to allocate their cost over their estimated
useful lives as follows:
Property, plant and equipment 3 years
Material residual value estimates are updated as required, but
at least annually, whether or not the asset is revalued. Gains and
losses on disposal are determined by comparing net proceeds with
the carrying amount. These are included in the Group Income
Statement. Provision is made for any impairment.
Financial Assets
Financial assets are classified into the following specified
categories: financial assets 'at fair value through profit or loss'
("FVTPL"), 'held to maturity' investments, 'available for sale'
("AFS") financial assets and 'loans and receivables'. The
classification depends on the nature and purpose of the financial
assets and is determined at the time of initial recognition. The
Group currently has only loans and receivables.
Effective interest method
The effective interest method is a method of calculating the
amortised cost of a financial asset/liability and of allocating
interest income/expense over the relevant period. The effective
interest rate is the rate that exactly discounts estimated future
cash receipts/payments through the expected life of the financial
asset/liability, or, where appropriate, a shorter period.
Loans and receivables
Trade and other receivables that have fixed or determinable
payments that are not quoted in an active market are classified as
loans and receivables as is cash and cash equivalents. Loans and
receivables are measured initially at fair value and thereafter at
amortised cost using the effective interest method, less any
impairment. Interest income is applied by applying the effective
interest rate, except for short-term receivables when the
recognition of interest would be immaterial.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at
each reporting date. Financial assets are impaired where there is
objective evidence that as a result of one or more events that
occurred after initial recognition of the financial asset, the
estimated cash flows of the investment have been impacted.
For financial assets carried at amortised cost, the amount of
the impairment is the difference between the asset's carrying
amount and the present value of estimated future cash flows,
discounted at the financial asset's original effective interest
rate.
The carrying amount of the financial asset is reduced by the
impairment loss directly for all financial assets with the
exception of trade receivables, where the carrying amount is
reduced through the use of an allowance account.
Cash and Cash Equivalents
Cash and cash equivalents comprise cash in hand and demand
deposits together with other short term highly liquid investments
that are readily convertible into known amounts of cash and which
are subject to an insignificant risk of changes in value.
Trade Payables
Trade payables are recognised initially at fair value and
subsequently measured at amortised cost using the effective
interest method.
Other Financial Liabilities
Other financial liabilities including borrowings are recognised
initially at fair value, net of transaction costs incurred. These
are subsequently recorded at amortised cost using the effective
interest method, with interest related charges recognised as an
expense in finance costs in the income statement.
Revenue Recognition
Revenue comprises the fair value of the consideration received
or receivable for the sale of goods and services in the ordinary
course of the Group's activities excluding VAT and trade discounts.
Revenue is recognised as follows:
Sales of goods
Revenue from the sales of goods is recognised when all the
following conditions have been satisfied:
-- the Group has transferred to the buyer the significant risks
and rewards of ownership of the goods which is when the goods have
been delivered to, or collected by the buyer;
-- the Group retains neither continuing managerial involvement
to the degree usually associated with ownership nor effective
control over the goods sold which is when the goods have been
delivered to, or collected by the buyer;
-- the amount of revenue can be measured reliably;
-- it is probable that the economic benefits associated with the
transaction will flow to the Group; and
-- the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Operating leases
Assets leased under operating leases are not recorded on the
balance sheet and rental payments are charged directly to the
income statement on a straight line basis over the term of the
lease.
Research and Development
Research costs are charged against income as incurred. Certain
development costs are capitalised once it can be demonstrated that
the product is clearly identifiable, technically and commercially
feasible, will generate future economic benefits, and the Group has
sufficient resources to complete development. Such intangible
assets are amortised on a straight line basis from the point at
which the asset is ready for use over the period of the expected
benefit, and are reviewed for impairment when events or changes in
circumstances indicate that the carrying value may not be
recoverable. Other development costs are charged against income as
incurred since the criteria for their recognition as an asset are
not met.
Current Tax
The tax currently payable is based on taxable profit for the
year. Taxable profit differs from profit as reported in the Group
Income Statement because it excludes/includes items of income and
expense that are taxable or deductible in other years and it
further excludes items that are never taxable or deductible. The
Group's liability for current tax is calculated using tax rates
that have been enacted or substantively enacted by the reporting
date.
Deferred Tax
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in
the computation of taxable profit and is accounted for using the
balance sheet liability method. Deferred tax liabilities that are
recognised are provided in full, with no discounting. Deferred tax
assets are recognised to the extent that it is probable that the
underlying deductible temporary differences will be able to be
offset against future taxable income. Current and deferred tax
assets and liabilities are calculated at tax rates that are
expected to apply to their respective period of realisation,
provided they are enacted or substantively enacted at the reporting
date.
Changes in deferred tax assets or liabilities are recognised as
a component of tax expense in the Income Statement, except where
they relate to items that are charged or credited directly to other
comprehensive income or equity in which case the related deferred
tax is also charged or credited directly to other comprehensive
income or equity as appropriate.
Employee Benefits
Pensions
The Group operated a money purchase pension scheme for its
former employees and directors. The assets of the scheme are held
separately from those of the Group in an independently administered
fund. The amount charged to the income statement represents the
contributions payable to the scheme in respect of the accounting
period. There were no amounts payable outstanding to the pension
scheme at 31 December 2013 (2012: GBPnil).
Share-based payments
All share-based payment arrangements granted after 7 November
2002 that had not vested prior to 1 January 2005 are recognised in
the Group Financial Statements.
All goods and services received in exchange for the grant of any
share-based payment are measured at their fair values. Where
employees are rewarded using share-based payments the fair values
of employees' services are determined indirectly by reference to
the fair value of the instrument granted to the employee. This fair
value is appraised at the grant date. All share options in issue
lapsed during the year.
Share options were valued at the date of grant using the
Black-Scholes option pricing model for options with non-market
vesting conditions attached and the simulation model for options
with market vesting conditions attached, and are charged to
operating profit over the vesting period of the award with a
corresponding credit to the 'other reserves'.
If vesting periods or other non-market vesting conditions apply,
the expense was allocated over the vesting period based on the best
available estimate of the number of share options expected to vest.
Any cumulative adjustment prior to vesting is recognised in the
current period. No adjustment is made to any expense recognised in
prior periods if share options ultimately exercised are different
to that estimated on vesting.
New Accounting Standards and IFRIC Interpretations
The following new standards and amendments to standards are
mandatory for the first time for the Group for financial year
beginning 1 January 2013. The adoption of these standards and
amendments has had no material effect on the Group's accounting
policies.
Standard Effective date Impact
on initial
application
--------- ---------------------------------- -------------
IAS Presentation of items of other 1 July
1 comprehensive income (amendments 2012
to IAS 1)
--------- ---------------------------------- -------------
IFRS Disclosures-Offsetting Financial 1 January
7 Assets and Financial Liabilities 2013
--------- ---------------------------------- -------------
IFRS Fair Value Measurement 1 January
13 2013
--------- ---------------------------------- -------------
IAS Employee Benefits 1 January
19 2013
--------- ---------------------------------- -------------
Improvements to IFRS (2009-2011 1 January
cycle) 2013
--------- ---------------------------------- -------------
Standards, amendments and interpretations, which are effective
for reporting periods beginning after the date of these financial
statements which have not been adopted early:
Standard Description Effective
date
--------- ---------------------------------- ----------
IAS Amendment - Offsetting Financial 1 January
32 Assets and Financial Liabilities 2014
--------- ---------------------------------- ----------
IFRS Consolidated Financial Statements 1 January
10 2014
--------- ---------------------------------- ----------
IFRS Joint Arrangements 1 January
11 2014
--------- ---------------------------------- ----------
IFRS Disclosure of Interests in Other 1 January
12 Entities 2014
--------- ---------------------------------- ----------
IAS Separate Financial Statements 1 January
27 2014
--------- ---------------------------------- ----------
IAS Investments in Associates and 1 January
28 Joint Ventures 2014
--------- ---------------------------------- ----------
IAS Recoverable amounts disclosures 1 January
36 for non-financial assets 2014
--------- ---------------------------------- ----------
IFRS Amendment - Transition guidance 1 January
10, 2014
IFRS
11 and
IFRS
12
--------- ---------------------------------- ----------
IFRS Investment Entities 1 January
10, 2014
IFRS
12,
and
IAS
27
--------- ---------------------------------- ----------
IAS Defined Benefit Plans: Employee 1 July
19 Contributions 2014
--------- ---------------------------------- ----------
Annual Improvements to IFRSs 1 July
2010-2012 Cycle 2014
--------- ---------------------------------- ----------
Annual Improvements to IFRSs 1 July
2011-2013 Cycle 2014
--------- ---------------------------------- ----------
IFRS Financial instruments n/a
9
--------- ---------------------------------- ----------
2. Discontinued Operations
The Company's principal subsidiary, VPhase Smart Energy Limited,
ceased trading operations prior to the balance sheet date and
entered into Administration resulting in loss of control.
Accordingly the results of that company have been presented as
discontinued operations in the financial statements.
The net assets and liabilities at disposal and the profit on
disposal were as follows:
31 December 31 December
2013 2012
GBP '000s GBP '000s
Cash consideration received -
Selling expenses -
------------
Net cash consideration -
Cash disposed of (187)
Net cash outflow on disposal
of discontinued operations (187)
------------
Net assets disposed of
other than cash
Intangibles (200)
Inventory (399)
Trade & other receivables (50)
Trade & other payables 987
Gain on disposal of discontinued
operations 151
------------
The results of the discontinued operations
up until the point of deemed disposal during
the year ended 31 December 2013 and the
comparative year, which have been disclosed
separately in the consolidated income statement,
as required by IFRS 5, are as follows:
2013 2012
GBP'000 GBP'000
Result of discontinued
operations
Revenue 420 1,378
Expenses other than finance
costs (2,746) (2,925)
Finance costs 11 (1)
Tax credit 46 -
Gain on disposal of discontinued
operations 151 -
Loss on discontinued operations
for the year (2,118) (1,548)
------------ ------------
During the year VPhase Smart Energy Limited paid GBP553,000
(2012: paid GBP1,358,000) to the group's net operating cash flows,
paid GBP29,000 (2012: GBP432,000) in respect of investing
activities and paid GBPnil (2012: GBP54,000) in respect of
financing activities.
3. Administrative expenses
Year Year
ended ended
31 December 31 December
2013 2012
GBP '000s GBP '000s
Cost of inventories recognised
as an expense 314 973
Write downs of inventories 1,014 -
recognised as an expense
Depreciation of property,
plant & equipment 47 71
Amortisation of development
costs 78 80
Operating lease rentals
- land and buildings - 5
Expensed research & development - 5
Staff costs 587 1,218
The analysis of auditor's
remuneration is as follows
Fees payable to the Company's
auditor and their associates
for the audit of the Company's
annual accounts 12 6
Fees payable to the Company's
auditor and their associates
for other services to the
Group - 14
------------- -------------
Total audit fees 12 20
------------- -------------
Taxation compliance services - 7
------------- -------------
Total non-audit fees - 7
------------- -------------
4. Staff costs
The average number of Year Year
employees in the year ended ended
was 31 December 31 December
2013 2012
Finance & administration 8 17
Research & Development 2 4
10 21
============= =============
GBP '000s GBP '000s
Wages and salaries 522 1,028
Social security costs 65 108
Share-based payments - 82
587 1,218
============= =============
5. Directors' remuneration
Year Year
ended ended
31 December 31 December
2013 2012
GBP '000s GBP '000s
Fees and emoluments 196 275
Share-based payments - 58
Taxable benefits - 1
196 334
============= =============
6. Taxation
Year Year
ended ended
31-Dec-13 31-Dec-12
GBP '000s GBP '000s
Current tax expense - -
Deferred tax expense - -
Total tax expense for - -
the year
========== ==========
Year Year
ended ended
31-Dec-13 31-Dec-12
GBP '000s GBP '000s
Loss for the year from
continuing operations (102) (110)
Income tax using the Company's
domestic tax rate at 23.25%
(2012: 24.50%) (24) (27)
Adjustments for non-deductible
expenses - 14
Movement in deferred tax
not provided for 24 13
Total tax expense for - -
the year
========== ==========
7. Loss per share
31 December 31 December
2013 2012
GBP '000s GBP '000s
Result for the year
Loss from continuing operations (102) (110)
Loss from discontinued
operations (2,118) (1,548)
Total loss for the year
attributable to equity
shareholders (2,220) (1,658)
Weighted average number Number Number
of ordinary shares
For basic earnings per
share 1,389,756,800 1,280,794,706
Loss per share (Pence)
Loss per share from continuing
operations (0.01) (0.01)
Loss per share from discontinued
operations (0.15) (0.12)
Total loss per share (0.16) (0.13)
8. Intangible fixed assets - Group
VX1 VX2/5 Total
Cost
At 1 January 2012 398 110 508
Additions - 250 250
At 31 December 2012 398 360 758
------ ------ ------
At 1 January 2013 398 360 758
Additions - 15 15
Disposals (398) (375) (773)
At 31 December 2013 - - -
------ ------ ------
Depreciation & Impairment
At 1 January 2012 197 - 197
Depreciation for the year 80 - 80
At 31 December 2012 277 - 277
------ ------ ------
At 1 January 2012 277 - 277
Depreciation for the year 40 38 78
Impairment 81 137 218
Disposals (398) (175) (573)
At 31 December 2013 - - -
------ ------ ------
Carrying amounts
At 31 December 2013 - - -
------ ------ ------
At 31 December 2012 121 360 481
------ ------ ------
At 1 January 2012 201 110 311
------ ------ ------
9. Tangible fixed assets - Group
GBP '000s
Cost
At 1 January 2012 205
Additions 181
At 31 December 2012 386
----------
At 1 January 2013 386
Additions 14
Disposals (400)
At 31 December 2013 -
----------
Depreciation & Impairment
At 1 January 2012 122
Depreciation for the year 71
At 31 December 2012 193
----------
At 1 January 2013 193
Depreciation for the year 47
Impairment 160
Disposals (400)
At 31 December 2013 -
----------
Carrying amounts
At 31 December 2013 -
At 31 December 2012 193
----------
At 1 January 2012 83
----------
10. Investments - Company
GBP '000s
On 1st January 2012 2,427
Additions 56
----------
On 31st December 2012 2,483
On 1st January 2013 2,483
Impairment (2,483)
----------
On 31st December 2013 -
==========
The Company holds 100% of the share capital of VPhase Smart
Energy Limited ("VSEL"). The Company however no longer has control
of VSEL following VSEL entering administration on 4 September 2013.
VSEL is therefore no longer a subsidiary of the Company.
Accordingly the carrying value of the investment was fully impaired
during the year.
11. Inventory - Group
2013 2012
GBP '000s GBP '000s
Components - 709
Finished goods - 349
- 1,058
============================ ==========
12. Trade & Other receivables - Group
2013 2012
GBP '000s GBP '000s
Trade receivables - 175
Prepayments & accrued
income - 46
Other receivables 16 15
Expected dividend from 165 -
administrators of VSEL
181 236
========== ==========
None of the Group's trade receivables held at 31 December 2012
were past due at the reporting date.
13. Debtors - Company
2013 2012
GBP '000s GBP '000s
Owed by subsidiary companies - 7,424
Other debtors 16 9
Expected dividend from 165 -
administrators
181 7,433
========== ==========
14. Provisions - Group
GBP000s
At 1 January 2012 33
Provisions made during
the year 68
At 31 December 2012 101
--------
At 1 January 2013 101
Disposal (101)
At 31 December 2013 -
--------
Provisions represented management's best estimates of
liabilities under 5 year warranties extended by VPhase Smart Energy
Limited.
15. Trade & Other payables - Group
2013 2012
GBP '000s GBP '000s
Trade payables - 414
Amounts owed by related
parties - 28
Tax and social security
payable - 34
Accruals and deferred
income 11 91
Preferential CVA Creditors 9 -
Non Preferential CVA Creditors 237 -
257 567
========== ==========
16. Creditors less than one year - Company
2013 2012
GBP '000s GBP '000s
Trade creditors - 62
Amounts owed to subsidiary
companies - 1,792
Accruals and deferred
income 11 41
Preferential CVA Creditors 9 -
Non Preferential CVA Creditors 237 -
257 1,895
========== ==========
17. Share Capital & Reserves
2013 2012
GBP '000s GBP '000s
Allotted, issued and fully
paid
1,389,756,800 (2012: 1,280,794,706)
ordinary shares of 0.25p
each 3,474 3,202
Reconciliation of share
capital movement (millions)
At 1 January 1,281 1,272
Share based payments 5 9
Placing of Ordinary shares 104 -
At 31 December 1,390 1,281
========== ==========
On 14 January 2013 the Company placed 103,800,000 Ordinary
shares at 0.50 pence raising gross proceeds of GBP519,000. During
2013, the Company issued 5,162,094 Ordinary shares at various
prices per share set out below by way of settlement of net fees to
the then Non-executive Directors.
Number Issue
of Ordinary price
shares (pence)
January 2013 971,249 0.725
February 2013 781,969 0.600
March 2013 893,676 0.525
April 2013 1,287,556 0.450
May 2013 1,227,664 0.450
5,162,114
============= =========
18. Cash consumed by operations
2013 2012
GBP '000s GBP '000s
Loss before tax (2,220) (1,658)
Adjustments for:
Loss on discontinued operations (57) -
net of tax
Depreciation 45 71
Amortisation 78 80
Impairment of intangible 218 -
fixed assets
Impairment of tangible 162 -
fixed assets
Finance income - 1
Share based payments - 82
Other share based payments 26 -
Changes in working capital
(Increase)/Decrease in
inventory 659 (388)
(Increase)/Decrease in
receivables 7 27
Increase/(Decrease) in
payables 427 317
Cash consumed by operations (655) (1,468)
---------- ----------
19. Events after the balance sheet date
On 7 February 2014, the Company issued 5,000,000,000 New
Ordinary Shares at 0.003 pence per New Ordinary Share to Henderson
Global Investors Limited ("Henderson"). Further details of the
placing and impact upon the existing Ordinary Shares of the Company
are contained on page 5.
On 4 June 2014 the Company announced that in order to meet the
current running costs of the Group Henderson had agreed to invest a
further GBP110,000 at the same nominal price per share of 0.003
pence they did on 7 February 2014.
20. Related party transactions
The Directors have taken advantage of the exemption within FRS 8
and have not disclosed transactions with wholly owned subsidiaries.
No transactions occurred with other related parties in 2013. In
2012, the Company incurred fees of GBP154,000 payable to Flowgroup
plc (formerly Energetix Group plc, a company that controlled 25.57%
of Iafyds plc at 31 December 2013, for administrative services
(2013: GBPnil). At 31 December 2012, the Company owed Flowgroup plc
GBP28,000.
21. Share-based payments
All share options have lapsed in the year. The share options
existing at the beginning of the year, including vesting conditions
were:
As at As at
1 January 31 December Exercise Exercise
2013 Lapsed 2013 price period
------------------- ---------- ---------- ------------ ---------- -----------
7 Jul 10 -
Richard Smith(1) 10,507,944 10,507,944 - 2.380 6 Jul 20
20 Mar 12 -
Richard Smith(1) 15,000,000 15,000,000 - 0.800 19 Mar 22
Vanda Murray 7 Jul 10 -
OBE(2) 10,507,944 10,507,944 - 2.380 6 Jul 20
22 Sep 12 -
Other(3) 340,426 340,426 - 5.880 6 Sep 19
27 Jun 11 -
Other(4) 2,100,000 2,100,000 - 1.170 26 Jun 21
4 Jul 11 -
Other(4) 4,100,000 4,100,000 - 1.240 3 Jul 21
14 May 12 -
Other(4) 8,500,000 8,500,000 - 0.850 13 May 22
19 Dec 12 -
Other(4) 1,739,130 1,739,130 - 0.575 18 Dec 22
------------------- ---------- ---------- ------------ ---------- -----------
52,795,444 52,795,444 -
------------------- ---------- ---------- ------------ ---------- -----------
(1) Options were exercisable in tranches of a third on
achievement of: breakeven: GBP100 million market valuation; and
GBP300 million market valuation.
(2) Half of the options were exercisable in tranches of a third
on achievement of: breakeven; GBP100 million market valuation; and
GBP300 million market valuation. The other half were exercisable in
tranches of a third after year one, two and three from grant
date.
(3) No performance criteria were attached.
(4) Options were exercisable immediately following the first
period of three consecutive calendar months the Group did not make
a loss (prepared under UKGAAP).
Share options were valued at the date of grant using the
Black-Scholes option pricing model for options with non-market
vesting conditions attached and the simulation model for options
with market vesting conditions attached, and were charged to
operating profit over the vesting period of the award with a
corresponding credit to 'other reserves'. This resulted in a fair
value charge of GBP82,000 in 2012 and a corresponding credit to
other reserves. The weighted average exercise price of share
options granted in the 2012 was 0.804 pence. No options were
granted in 2013.
Assumptions
The following assumptions were used to determine the fair value
of share options at the respective date of grant:
Share
Exercise Ordinary price
price shares at date Interest Option
Date of (pence) under option of grant Volatility rate (years) Dividends
grant (pence)
------------- ---------- -------------- --------- ------------ ---------- --------- -----------
7 Sep 2009 5.880 340,426 5.88 49.0% 4.50% 3 Nil
7 Jul 2010 2.380 21,015,888 2.12 49.5% 4.50% 3 Nil
27 Jun
2011 1.170 2,100,000 1.18 54.7% 4.50% 3 Nil
4 Jul 2011 1.240 4,100,000 1.24 49.6% 4.50% 3 Nil
20 Mar
2012 0.800 15,000,000 0.800 54.9% 4.50% 3 Nil
14 May
2012 0.850 8,500,000 0.850 54.9% 4.50% 3 Nil
19 Dec
2012 0.575 1,739,130 0.575 54.9% 4.50% 3 Nil
------------- ---------- -------------- --------- ------------ ---------- --------- -----------
Expected volatility was derived from observation of the
volatility of the Company's shares. The expected life used in the
model had been adjusted based on management's best estimate, for
the effects of non-transferability, exercise restrictions and
behavioural conditions.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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