21st Apr 2015 07:00
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 [email protected]
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
Year ended | Year ended | ||
31 December | 31 December | ||
2014 | 2013 | ||
Notes | £ '000s | £ '000s | |
Revenue | - | - | |
Cost of sales | - | - | |
Gross profit | - | - | |
Administrative expenses | 3 | (83) | (102) |
Loss from operating activities | (83) | (102) | |
Net finance costs | - | - | |
Loss before taxation | (83) | (102) | |
Income tax expense | 6 | - | - |
Loss for the year from continuing operations | (83) | (102) | |
Loss for the year from discontinued operations | 2 | - | (2,118) |
Loss for the year | (83) | (2,220) | |
Loss per share | |||
Basic & fully diluted loss per share (Pence) | 7 | (0.001) | (0.16) |
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
Share capital | Share premium | Merger relief reserve | Capital redemption reserve | Retained earnings | Reverse acquisition reserve | Other reserves | Total equity | |
£ '000s | £ '000s | £ '000s | £ '000s | £ '000s | £ '000s | £ '000s | ||
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 income | - | - | - | - | (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) |
Balance at 1 January 2014 | 3,474 | 7,490 | 1,150 | 994 | (9,502) | (3,682) | - | (76) |
Loss for the year | - | - | - | - | (83) | - | - | (83) |
Total comprehensive income | - | - | - | - | (83) | - | - | (83) |
Shares issued in the period | 260 | (49)1 | - | - | - | - | - | 211 |
Balance at 31 December 2014 | 3,734 | 7,441 | 1,150 | 994 | (9,585) | (3,682) | - | 52 |
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
31 December | 31 December | ||
2014 | 2013 | ||
Assets | Notes | £ '000s | £ '000s |
Current assets | |||
Trade and other receivables | 11 | 237 | 181 |
Cash and cash equivalents | 70 | - | |
Total current assets | 307 | 181 | |
Total assets | 307 | 181 | |
Equity and liabilities | |||
Attributable to the equity holders of the Parent Company | |||
Share capital | 16 | 3,734 | 3,474 |
Share premium | 7,441 | 7,490 | |
Merger relief reserve | 1,150 | 1,150 | |
Capital redemption reserve | 994 | 994 | |
Retained earnings | (9,585) | (9,502) | |
Reverse acquisition reserve | (3,682) | (3,682) | |
Total equity | 52 | (76) | |
Current liabilities | |||
Trade and other payables | 15 | 255 | 257 |
Total liabilities | 255 | 257 | |
Total equity and liabilities | 307 | 181 |
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
Year ended 31 December 2014 | Year ended 31 December 2013 | ||
£ '000s | £ '000s | ||
Cash flows from operating activities | |||
Cash consumed by operating activities | 18 | (141) | (655) |
Net cash used in operating activities | (141) | (655) | |
Cash flows from investing activities | |||
Expenditure on intangible assets | - | (15) | |
Purchases of property, plant & equipment | - | (14) | |
Disposal of subsidiary | - | (187) | |
Net cash used in investing activities | - | (216) | |
Cash flows from financing activities | |||
Proceeds from issue of shares | 260 | 519 | |
Share issue costs | (49) | (7) | |
Net cash generated from financing activities | 211 | 512 | |
Net decrease in cash and cash equivalents for the year | 70 | (359) | |
Cash and cash equivalents at beginning of the year | - | 359 | |
Cash and cash equivalents at end of the year | 70 | - |
Company Balance Sheet
As at 31 December 2014
31 December | 31 December | ||
2014 | 2013 | ||
Notes | £ '000s | £ '000s | |
Fixed Assets | |||
Investments | 10 | - | - |
|
| ||
Current assets | |||
Debtors | 12 | 237 | 181 |
Cash and cash equivalents | 70 | - | |
Total current assets | 307 | 181 | |
Creditors: amounts falling due within one year | 15 | (255) | (257) |
Net current assets / (liabilities) | 52 | (76) | |
Net assets / (liabilities) | 52 | (76) | |
|
| ||
Capital & Reserves | |||
Share capital | 21 | 3,734 | 3,474 |
Share premium | 7,441 | 7,490 | |
Merger relief reserve | 1,150 | 1,150 | |
Capital redemption reserve | 994 | 994 | |
Retained earnings | (13,267) | (13,184) | |
Other reserves | - | - | |
Shareholders' funds / (deficit) | 52 | (76) |
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
Going concernThe policy, and the basis of preparation, is contained on page 22.
Discontinued operationsThe Company's principal subsidiary, VPhase Smart Energy Limited, ceased trading operations and entered into Administration resulting in loss of control in the prior year. Accordingly the results of that company were presented as discontinued operations in the financial statements in the prior year. TaxationThe 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
Reverse acquisitionOn 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.
SubsidiariesThe 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).
Share-based paymentsAll 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.
Standard |
IFRS 10 Consolidated Financial Statements |
IFRS 11 Joint Arrangements |
IAS 28 Investments in Associates and Joint Ventures (2011) |
IFRS 12 Disclosure of Interests in Other Entities |
IAS 27 Separate Financial Statements (2011) |
IAS 32 Amendments to IFRS 7 and IAS 32 |
Amendments to IAS 36 Impairment of Assets |
Amendments to IAS 39 Financial Instruments: recognition and measurement |
Amendments to IFRS 10, IFRS12 and IAS 27. |
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 |
Amendments to IAS 19 | Defined Benefit Plans: Employee Contributions |
Amendments to IFRS 11 | Accounting for Acquisitions of Interests in Joint Operations (Amendments to IFRS 11) |
Amendments to IAS 16 and IAS 38 | Clarification of Acceptable Methods of Depreciation and Amortisation |
IFRS 15 | Revenue from Contracts with Customers |
Amendments to IAS 16 and IAS 41) | Agriculture: Bearer Plants (Amendments to IAS 16 and IAS 41) |
Amendments to IAS 27 | Equity Method in Separate Financial Statements (Amendments to IAS 27) |
Amendments to IFRS 10/IAS 28 | Sale or Contribution of Assets between an Investor and its Associate or Joint Venture |
Improvements 2014 | Annual Improvements to IFRSs: 2012-2014 |
2. Discontinued Operations
The Company's principal subsidiary, VPhase Smart Energy Limited, ceased trading operations in 2013 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:
2013 |
| |||
£ '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 |
| ||
Loss 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, which have been disclosed separately in the consolidated income statement, as required by IFRS 5, are as follows: | ||||
Result of discontinued operations | ||||
Revenue | 420 |
| ||
Expenses other than finance costs | (2,746) |
| ||
Finance costs | 11 |
| ||
Tax (expense) / credit | 46 |
| ||
Loss from selling discontinued operations after tax | 151 |
| ||
Loss on discontinued operations for the year | (2,118) |
|
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
Year ended 31 December 2014 | Year ended 31 December 2013 | ||
£ '000s | £ '000s | ||
Cost of inventories recognised as an expense | - | 314 | |
Write downs of inventories recognised as an expense | - | 1,014 | |
Depreciation of property, plant & equipment | - | 47 | |
Amortisation of development costs | - | 78 | |
Staff costs | 20 | 587 | |
Other office costs | 63 | - | |
83 | 2,040 | ||
Included within Admin Expenses | |||
Audit Fees | 6 | 12 | |
6 | 12 |
4. Staff costs
The average number of employees and directors in the year was | Year ended 31 December 2014 | Year ended 31 December 2013 | |
Finance & administration | 2 | 8 | |
Research & Development | - | 2 | |
2 | 10 | ||
£ '000s | £ '000s | ||
Wages and salaries | 20 | 522 | |
Social security costs | - | 65 | |
20 | 587 |
5. Directors' remuneration
Year ended 31 December 2014 | Year ended 31 December 2014 | ||
£ '000s | £ '000s | ||
Fees and emoluments | 20 | 196 | |
20 | 196 |
6. Taxation
Year ended | Year ended | ||
31-Dec-14 | 31-Dec-13 | ||
£ '000s | £ '000s | ||
Current tax expense | - | - | |
Deferred tax expense | - | - | |
Total tax expense for the year | - | - | |
Year ended | Year ended | ||
31-Dec-14 | 31-Dec-13 | ||
£ '000s | £ '000s | ||
Loss for the year from continuing operations | (83) | (102) | |
Income tax using the Company's domestic tax rate at 23.25% (2012: 24.49%) | (19) | (24) | |
Movement in deferred tax not provided for | 19 | 13 | |
Total tax expense for the year | - | (11) |
The deferred tax asset not recognised as at 31 December 2014 is £56,000.
7. Loss per share
31 December 2014 | 31 December 2013 | ||
£ '000s | £ '000s | ||
Result for the year | |||
Loss from continuing operations | (83) | (102) | |
Loss from discontinued operations | - | (2,118) | |
Total loss for the year attributable to equity shareholders | (83) | (2,220) | |
Weighted average number of ordinary shares | Number | Number | |
For basic earnings per share | 7,734,994,895 | 1,389,756,800 | |
Loss per share (Pence) | |||
Loss per share from continuing operations | (0.001) | (0.01) | |
Loss per share from discontinued operations | - | (0.15) | |
Total loss per share | (0.001) | (0.16) |
8. Intangible fixed assets - Group
VX1 | VX2/5 | Total | |
Cost | |||
At 1 January 2013 | 398 | 360 | 758 |
Additions | - | 15 | 15 |
Disposals | (398) | (375) | (773) |
At 31 December 2013 | - | - | - |
At 31 December 2014 | - | - | - |
Depreciation & Impairment | |||
At 1 January 2013 | 277 | - | 277 |
Depreciation for the year | 40 | 38 | 78 |
Impairment | 81 | 137 | 218 |
Disposals | (398) | (175) | (573) |
At 31 December 2013 | - | - | - |
At 1 January 2013 | - | - | - |
At 31 December 2014 | - | - | - |
Carrying amounts | |||
At 31 December 2014 | - | - | - |
At 31 December 2013 | - | - | - |
At 1 January 2013 | 121 | 360 | 481 |
9. Tangible fixed assets - Group
£ '000s | |
Cost | |
At 1 January 2013 | 386 |
Additions | 14 |
Discontinued Operations | (400) |
At 31 December 2013 | - |
At 1 January 2014 | - |
At 31 December 2014 | - |
Depreciation & Impairment | |
At 1 January 2013 | 193 |
Depreciation for the year | 47 |
Impairment | 160 |
Discontinued Operations | (400) |
At 31 December 2013 | - |
At 1 January 2014 | - |
At 31 December 2014 | - |
Carrying amounts | |
At 31 December 2014 | - |
At 31 December 2013 | - |
At 1 January 2013 | 193 |
10. Investments - Company
£ '000s | ||
On 1st January 2013 | 2,483 | |
Disposals | (2,483) | |
On 31st December 2013 | - | |
On 1st January 2014 | - | |
On 31st December 2014 | - |
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
2014 | 2013 | ||
£ '000s | £ '000s | ||
Other receivables | 77 | 16 | |
Expected dividend from administrators of VSEL | 160 | 165 | |
237 | 181 |
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
2014 | 2013 | ||
£ '000s | £ '000s | ||
Other debtors | 77 | 16 | |
Expected dividend from administrators | 160 | 165 | |
237 | 181 |
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
£000s | ||
At 1 January 2013 | 101 | |
Disposal | (101) | |
At 31 December 2013 | - | |
At 1 January 2014 | - | |
At 31 December 2014 | - |
Provisions represented management's best estimates of liabilities under 5 year warranties extended by VPhase Smart Energy Limited.
14. Trade & Other payables - Group
2014 | 2013 | ||
£ '000s | £ '000s | ||
Trade payables | 7 | - | |
Accruals and deferred income | 11 | 11 | |
Preferential CVA Creditors | 9 | 9 | |
Non Preferential CVA Creditors | 228 | 237 | |
255 | 257 |
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
2014 | 2013 | ||
£ '000s | £ '000s | ||
Trade creditors | 7 | - | |
Accruals and deferred income | 11 | 11 | |
Preferential CVA Creditors | 9 | 9 | |
Non Preferential CVA Creditors | 228 | 237 | |
255 | 257 |
The amounts disclosed above for Preferential and Non Preferential CVA Creditors were paid in full on 22 January 2015.
16. Share Capital & Reserves
2014 | 2013 | ||
£ '000s | £ '000s | ||
Allotted, called up and fully paid | |||
10,056,423,466 (2013: 1,389,666,890) ordinary shares of 0.003p each (2013: 0.25p each) | 301 | 3,474 | |
1,389,777,890 (2013: nil) deferred shares at 0.247p each | 3,433 | - | |
Reconciliation of share capital movement (millions) | |||
At 1 January | 1,390 | 1,281 | |
Share based payments | 0 | 5 | |
Placing of Ordinary shares | 8,667 | 104 | |
At 31 December | 10,057 | 1,390 |
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.
Number of Ordinary shares | Issue price (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 |
17. Cash consumed by operations
2014 | 2013 | ||
£ '000s | £ '000s | ||
Loss before tax | (83) | (2,220) | |
Adjustments for: | |||
Loss on discontinued operations net of tax | - | (57) | |
Depreciation | - | 45 | |
Amortisation | - | 78 | |
Impairment of intangible fixed assets | - | 218 | |
Impairment of tangible fixed assets | - | 162 | |
Other share based payments | - | 26 | |
Changes in working capital | |||
(Increase)/Decrease in inventory | - | 659 | |
(Increase)/Decrease in receivables | (56) | 7 | |
Increase/(Decrease) in payables | (2) | 427 | |
Cash consumed by operations | (141) | (655) |
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.
Related Shares:
365.L