365.L Regulatory News (365)

Iafyds plc

("Iafyds" or the "Company")

Audited Results for the Year Ended 31 December 2014

The Board of Iafyds is pleased to announce its financial results for the year ended 31 December 2014.

Review of the year

The year began with the decision, in February 2014, by shareholders for the Company to become an Investment Company under the AIM Rules. This required the Company to make an investment in accordance with the Investing Policy within 12 months to avoid the suspension in trading of the Company's shares for a period of six months after which, without an appropriate transaction, the Company's listing on AIM would be permanently cancelled.

Adopted Investing Policy summary

In summary, the investing policy adopted at the General Meeting on 7 February 2014 was as follows:

"The Company's adopted 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 cashflows 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."

Search for a qualifying investment

As reported in the interim statement in September 2014, in the first half of 2014 the IPO market was strong and the supply of suitable businesses prepared to list by way of a reverse takeover was limited. After the summer break the position improved as the number of IPO's fell although the price expectations of the owners of some of the available businesses were, in the opinion of the Iafyds Board, unrealistic.

Towards the end of the period under review and subsequently the level of interest in Iafyds as an investment vehicle improved with the further deterioration of the IPO market.

During the period under review we considered investments in a number of sectors, including transportation, industrial coatings, software, medical devices and the leisure industry. For differing reasons these discussions all failed to result in a transaction to put before shareholders for approval

Current position

CVA

Iafyds exited from administration on 27 December 2013 and entered into a Company Voluntary Arrangement (CVA) with its creditors. The CVA process was under the authority of BDO LLP who acted as Supervisors of the CVA, ensuring adherence to the agreed terms. 

In February 2015, the Joint Supervisor, Patrick Alexander Lannagan of BDO, confirmed to the Company that the liquidation is complete in all respects and the final payments due to creditors have been made.

Trading in the Company's shares

Under the AIM Rules Iafyds had 12 months to complete a qualifying investment in accordance with the Company's investment policy to avoid a suspension in the trading of the Company's shares. That 12 month period ended on 6 February 2015, accordingly trading of the Company's shares were suspended pending completion of a qualifying investment.

Outlook

The listing of the Company's shares on AIM will be cancelled on 6 August 2015 if a qualifying transaction has not by then been completed. The Directors have concluded that, given the time and expense involved in completing a Reverse Takeover transaction the Directors believe that if a suitable transaction has not been agreed by the end of April 2015, it would be in the best interests of the Company to use the remaining funds to achieve an orderly wind down of the Companies activities. Accordingly, in the absence of a potential qualifying transaction which has the support of the Company's controlling shareholder, the Directors intend to commence a liquidation of the Company from the beginning of May 2015.

Going concern

Following the Administration and the CVA, the Group no longer conducts its original trading activities, the CVA was finalised and settled in January 2015. The Directors have considered the Company's new investment policy strategy. 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 by 6 August 2015. The Directors have prepared the financial statement on a basis other than going concern as a result of their conclusion that a qualifying investment is now unlikely to be made and their intention is to lay a resultant proposal before shareholders to commence liquidation of the Company from May 2015.

Funding

An injection of funds of £150,000 was made by Henderson by way of a share placing in February 2014. On 30 June 2014 the Company raised a further £110,000 by the issue of 3,666,666,666 Ordinary Shares of 0.003 pence to Henderson. Following this issue, Henderson's interest in the share capital of the Company increased to 89.8 per cent.

The funds raised were to cover the anticipated running costs of the Company in the event no qualifying investment was made before the deadline. Following finalisation of the CVA, the Company has and is forecast to have sufficient funds to execute the liquidation plans appropriately.

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 £200,000 on 24 September 2013, represented a fundamental change to the business and resulted in the Company disposing of all of its tangible operating assets and business.

This restructuring led to a fundamental change in the Company's business as it was no longer engaged 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 has focussed on projects located in the United Kingdom but also has considered investments in other geographical regions. The Company has considered a number of sectors; however, the Directors recognised that there were sectors which are unlikely to meet its investment criteria. Proposed investments sought were to be made by the Company in just one investment which would have been deemed to be a reverse takeover under the AIM Rules.

Given the time and expense involved in completing a Reverse Takeover transaction the Directors believe that given a suitable transaction has not been agreed at the date of this report, it would be in the best interests of the Company to use the remaining funds to achieve an orderly wind down of the Companies activities. Accordingly, the Directors intend to commence a liquidation of the Company from the beginning of May 2015.

Review of the business

The loss for the year was £83,000 (2013: £2,220,000). 

The year began with the decision by shareholders for the Company to become an Investment Company under the AIM Rules. This requires the Company to make an investment in accordance with the Investing Policy within 12 months to avoid the suspension in trading of the Company's shares for a period of six months after which, without an appropriate transaction, the Company's listing on AIM would be permanently cancelled.

As reported in the interim statement in September 2014, in the first half of 2014 the IPO market was strong and the supply of suitable businesses prepared to list by way of a reverse takeover was limited. After the summer break the position improved as the number of IPO's fell although the price expectations of the owners of some of the available businesses were, in the opinion of the Iafyds Board, unrealistic.

During the period under review we considered investments in a number of sectors, including transportation, industrial coatings, software, medical devices and the leisure industry.

On 6 February 2015, Iafyds entered in a Memorandum of Understanding ("MOU") to invest £2.1 million by way of convertible loan into a retail business operating in a clearly defined sub-sector of the leisure industry. On 19 March 2015, following the collapse of an acquisition contemplated by the target company, Iafyds announced this transaction would not proceed.

Going Concern

As noted in the Chairman's Statement, the Directors have prepared the financial statement on a basis other than going concern as a result of their intention to plan to liquidate the Company in May 2015. Further details are included within Note 1 of the financial statements.

Principal Risks and Uncertainties

Given the Directors intention to commence liquidation of the Company from May 2015 the principle risks facing the Company are those of an orderly closedown. The Directors intend to put in place appropriate plans to achieve this following shareholder approval.

Clive Carver

Chairman

21st April 2015

For further information please contact:

Iafdys plc: Clive Carver, Chairman iafydsplc@gmail.com

Panmure Gordon: Hugh Morgan  +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 http://www.iafyds.co.uk/

Consolidated Income Statement

For the year ended 31 December 2014

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 37 are an integral part of these Financial Statements.

Consolidated Statement of Changes in Equity

For the year ended 31 December 2014

1 During the year the Company issued two tranches of Ordinary Shares (see Note 16) resulting in £49,000 of issue costs being capitalised.

Consolidated Statement of Financial Position

As at 31 December 2014

The financial statements of Iafyds plc (registered number 04958332) were approved and authorised for issue on 20 April 2015 and were signed on its behalf by:

Clive Carver

Chairman

Consolidated Cash Flow Statement

For the year ended 31 December 2014

Company Balance Sheet

As at 31 December 2014

The financial statements of Iafyds plc (registered number 04958332) were approved and authorised for issue on 20 April 2015 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 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

Following the Administration and the CVA, the Group no longer conducts its original trading activities, the CVA was finalised and settled in January 2015. The Directors have considered the Company's new investment policy strategy. In order to avoid cancellation 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 by 6 August 2015. An appropriate investment has not been identified as at the date of this report and hence the Directors intend to commence liquidation of the company in May 2015 in the absence of a qualifying transaction. The Directors have prepared the financial statements on a basis other than going concern as a result of their conclusion that a proposal be laid before shareholders to commence liquidation of the Company from May 2015.

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

The policy, and the basis of preparation, is contained on page 22.

The Directors have not recognised a deferred tax asset in relation to unrealised tax losses as there are no future profits available to utilise the tax losses available as the Directors intend to liquidate the Company. 

Basis of Consolidation

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.

The results of subsidiaries acquired or disposed of 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 continued to hold 100% of the share capital of VPhase Smart Energy Limited ("VSEL"), a former subsidiary of the Group which is now in liquidation. 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 £83,000 (2013: £2,220,000).

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 2014 (2013: £nil).

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 2014. The adoption of these standards and amendments has had no material effect on the Group's accounting policies. 

Standards, amendments and interpretations, which are effective for reporting periods beginning after the date of these financial statements which have not been adopted early:

2. Discontinued Operations

The net assets and liabilities at disposal and the profit on disposal were as follows:

During 2013 VPhase Smart Energy Limited paid £553,000 to the group's net operating cash flows, paid £29,000 in respect of investing activities and paid £nil in respect of financing activities.

3. Administrative expenses

4. Staff costs

5. Directors' remuneration

6. Taxation

The deferred tax asset not recognised as at 31 December 2014 is £56,000.

7. Loss per share

8. Intangible fixed assets - Group

9. Tangible fixed assets - Group

10. Investments - Company

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 prior year. The Company also holds 100% of the share capital of FG Employee Trust Limited and Flightstore Inflight Retailing Limited, both of which were dormant in the current year (2013: same).

11. Trade & Other receivables - Group

Other receivables relates to amounts held in escrow for the purposes of paying the fees and expenses of the Company Voluntary Arrangement. All amounts were received on 22 January 2015.

12. Debtors - Company

Other debtors relates to amounts held in escrow for the purposes of paying the fees and expenses of the Company Voluntary Arrangement. All amounts were receivedon 22 January 2015.

13. Provisions - Group

Provisions represented management's best estimates of liabilities under 5 year warranties extended by VPhase Smart Energy Limited.

14. Trade & Other payables - Group

The amounts disclosed above for Preferential and Non Preferential CVA Creditors were paid in full on 22 January 2015.

15. Creditors less than one year - Company

The amounts disclosed above for Preferential and Non Preferential CVA Creditors were paid in full on 22 January 2015.

16. Share Capital & Reserves

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") by way of a placing.

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 30 June 2014 the Company issued 3,666,666,666 New Ordinary Shares at 0.003 pence per share to Henderson Global Investors Limited.

On 14 January 2013 the Company placed 103,800,000 Ordinary shares at 0.50 pence raising gross proceeds of £519,000. 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.

17. Cash consumed by operations

18. Events after the balance sheet date

On 8 February 2015, trading in the Company's shares on AIM was suspended for a period of up to 6 months for failing to complete a qualifying transaction under AIM Rule 14

19. Related party transactions

The Directors have taken advantage of the exemption within FRS 8 and have not disclosed transactions with wholly owned subsidiaries.

The Company paid £9,104 to Culmore Limited for consultancy services of Colin Hutchinson during the year. There were no related party transactions during 2013.

20. Share-based payments

All share options have lapsed during the prior year.