Half Yearly Report

Iafyds plc

("Iafyds" or the "Company")

Interim financial statements

For the six months ended 30 June 2014

Introduction

The Company was renamed and readmitted to AIM at the beginning of the year as an Investment Company and since that time has sought investment opportunities consistent with it Investment Policy, which is set out below.

Despite a number of interesting opportunities none have yet resulted in a transaction. The Directors remain hopeful that a suitable opportunity will be identified before the listing is suspended in February 2015.

Review of the business

Following the exit from administration at the end of 2013 and the subsequent readmission of the shares to AIM on 7 February 2014, Iafyds plc (formerly VPhase plc) no longer engages in any trading activities and 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.

The focus of the company since the new board was appointed on 7 February 2014 has been to help find and assess a suitable acquisition for the Company, however the search for a new direction coincided with a sharp increase in the number of Initial Public Offerings on AIM which has reduced the number of private companies looking for an AIM listing for their shares via a reverse takeover.

Under AIM rules the Company has until 6 February 2015 to complete a reverse takeover and should it fail to do so it is likely that its quotation on AIM would be suspended for a further six month period before the listing would then be cancelled.

Completion of CVA

Iafyds plc (previously VPhase plc) exited from administration on 27 December 2013 and entered into a Company Voluntary Arrangement (CVA) with its creditors. The CVA process is under the authority of BDO LLP who act as Supervisors of the CVA, ensuring that it adheres to the agreed terms. Under the terms of the CVA, the Supervisors will receive any dividend from VPhase Smart Energy Limited ("VSEL"), along with the agreed contribution from the February 2014 placing. These funds are ring-fenced for the CVA creditors and once the Supervisors distribute these funds the CVA will be completed. The dividend from VSEL is expected to be paid in the coming months which will allow the CVA to be completed before the end of the year. The completion of this process is in the hands of the Supervisors and does not impact the Company's plans for any reverse takeover.

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 the Company 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.

Funding

On 30 June 2014 3,666,666,666 Ordinary Shares of 0.003pence were issued to Henderson Global Investors ("Henderson") for consideration of £110,000; this will cover the expected running costs of the business to February 2015. Following this issue, Henderson's interest in the share capital of the Company increased to 89.8 per cent.

In the event Iafyds identifies a suitable acquisition further funding would be required. In the event no such opportunity is identified the available funding is expected to be required in full to manage an orderly wind down of the Company's affairs.

Going concern

Due to the events occurring in 2013, the Group no longer conducts its original trading activities and as a result of this cessation of trade the condensed financial statements of the Group are prepared on a basis other than going concern. Further details are contained in Note 2.

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 end of autumn. Failure to do so is likely to result in the Group's only asset, its quotation, being lost.

Nevertheless the Directors remain hopeful a deal will happen.

Clive Carver

Chairman

17 September 2014

For further information please contact:

Iafyds plc: Clive Carver / Colin Hutchinson +44 (0) 20 3763 5909

Panmure Gordon: Hugh Morgan +44 (0) 20 7886 2500

Unaudited consolidated income statement

* 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.

Unaudited consolidated statement of financial position

Unaudited consolidated statement of changes in equity

Unaudited consolidated statement of cash flows

Notes to the consolidated interim 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 information for the year ended 31 December 2013 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditor reported on those accounts; their report was modified but not qualified, drawing attention to the material uncertainties disclosed by the Directors regarding the ability of the Company to continue as a going concern in reference to the timeframe available under AIM Rule 15.

The same accounting policies, presentations and methods of computation are followed in the condensed set of financial statements as applied in the Group's latest annual audited financial statements. The unaudited condensed set of financial statements included in this half-yearly financial report have been prepared in accordance with the International Accounting Standard 34 'Interim Financial Reporting', as adopted by the European Union. These condensed interim accounts should be read in conjunction with the annual accounts of the Group for the year ended 31 December 2013. The annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards as adopted by the European Union.

The Company's principal subsidiary, VPhase Smart Energy Limited, ceased trading operations and entered into Administration, in September 2013, resulting in loss of control. The comparatives for the consolidated income statement and consolidated statement of cash flows for the six month period ended 30 June 2013 have been restated to reflect the disclosure of the results of discontinued operations.

2. Going concern

Due to the events occurring in 2013, the Group no longer conducts its original trading activities and as a result of this cessation of trade the condensed financial statements of the Group are prepared on a basis other than going concern.

As stated, the Company reached an agreement with its creditors and members to execute a CVA. This process is nearing completion and the funds required to satisfy the CVA are under the control of the Supervisors.

The Company raised sufficient funds during the last six months to complete the CVA, through a share placing of £150,000 by Henderson in February 2014, and fund the company's existence as an investment shell, through a further placing by Henderson £110,000 in June 2014. Following the June 2014 investment, Henderson now own 89.8 per cent of the Company's shares. 

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.

3. Loss per share

4. Share capital & reserves