VPhase plc Group Financial Statements
for the year ended 31 December 2009 
VPhase plc Group Financial Statements for the year ended  31 December 2009 
VPhase plc
Capenhurst Technology Park
Chester
CH1 6EH
T. 0151 348 2100
F. 0151 348 2101
E: info@vphaseplc.com
www.vphaseplc.com VPhase plc is a subsidiary of 
Energetix Group plc and was 
admitted to AIM in 2007.
VPhase plc specialises in Domestic Voltage 
Optimisation and is selling the first product 
developed from its technology platform, 
with further plans for a range of products  
to reduce energy used in homes and  
small businesses. 
Welcome to VPhase
Contents
01 Highlights 
02 Case Studies 
04 Chairman’s Statement 
06 Chief Executive’s Review 
08 Finance Review 
09 Corporate Responsibility
10 Board of Directors 
11 Group Directors’ Report 
15 Independent Auditor’s Report 
16 Group Income Statement 
17 Group Statement of Changes in Equity 
18 Group Statement of Financial Position 
19 Group Statement of Cash Flows 
20 Notes to the Group Financial Statements
36 Company Balance Sheet 
37 Notes to the Company Balance Sheet 
44 Directors, Secretary and Advisors to the Group
FSC logo  
to go here 1 VPhase plc
Group Financial Statements for the year ended 31 December 2009
Post year end:
Commenced field trials with  •	
a Northwest-based social  
housing provider
VPhase staff home trials show •	
savings of £75 – £135 per annum 
(depending on the level of incoming 
voltage and load profile)*
Delay in SSE installations likely  •	
to defer CERT approval until  
quarter 2, 2010
*The small size of the sample means it may not be indicative of 
savings available across the whole of the UK housing stock.
2009 Highlights:
Revenues of £124,000 from first •	
commercial sales (2008: £nil)
Operating losses of £992,000  •	
(2008: £853,000) 
–  higher than previous period due  
to increased sales and marketing 
activities 
 –  significantly lower than the Group’s 
expectations
Cash reserves at £1.7 million  •	
(2008: £3.20 million) 
Board continues to exercise tight •	
cost control 
CE certification achieved, enabling •	
sales to be made in the UK and 
mainland Europe
Commercial sales commenced,  •	
with units shipped to Scottish and 
Southern Energy, British Gas, 
electrical distributors and electricians 
plus direct to consumers
Initiated transition from development •	
to commercial sales with associated 
supply chain, sales channel 
development and marketing activities 2 VPhase plc
Group Financial Statements for the year ended 31 December 2009
Case Studies
Case Studies
VPhase has begun receiving results from the 
trials with SSE, British Gas, a Northwest-
based social housing provider and in staff 
homes, and the data has been independently 
analysed.
In the case of the staff home trials, VPhase 
supplied recorded data from several 
properties that had been fitted with a VPhase 
unit. EA Technology, a well established power 
management consultancy and a regular 
assessor of energy technologies, has 
analysed the electricity consumption data for 
these properties, for the period between 
December 2009 and February 2010. The 
energy savings over this period ranged, for 
these properties, from 6% to 12%. Energy 
savings of this magnitude, provided they are 
sustained over a whole year, would result in 
annual savings of between £75 and £135 at 
these properties. For example:
One test home is a 5-bedroom detached 
house that has between 3 and 5 people living 
in it. The property is gas centrally heated with 
a gas hob and an electric oven. The typical 
voltage reduction that VPhase is delivering is 
8.9%. This is a property with a voltage supply 
of 232V, which is lower than the national 
average of 245V. The annualised saving from 
VPhase is £75 per year.
Another property is a 4-bedroom detached 
house with a family of 5 in occupation. It is 
gas centrally heated and has an electric 
cooker. The average incoming voltage of 247V 
is marginally higher than the national average 
and VPhase is delivering a typical voltage 
reduction of 10.3% giving projected savings 
of £135 per annum.
In addition, VPhase has been carrying out 
back-to-back testing on a range of 
appliances. The typical energy savings 
demonstrated are:
17% on fridges and freezers; •	
15% on lighting; •	
10% on new energy saving light bulbs; •	
30% on cordless phones; •	
13% on hi-fi’s. •	
Whilst actual results may vary depending on 
the type and age of appliance and the level of 
incoming voltage, VPhase is consistently 
demonstrating savings. 3 VPhase plc
Group Financial Statements for the year ended 31 December 2009
“VPhase is the smart new 
way to cut your energy 
costs immediately without 
changing your supplier or 
your lifestyle.” 4 VPhase plc
Group Financial Statements for the year ended 31 December 2009
Chairman’s Statement
“2009 was the year when VPhase 
moved from a development 
company to a commercial business 
with turnover from sales. Following 
CE marking of our VPhase product 
unit we have achieved initial revenue 
and further increased our direct and 
channel sales and marketing efforts. 
We have also continued to keep our 
costs down by exercising strong 
cash management. In 2010 we are 
focusing on growing sales and 
transitioning the Group into a 
product and service-led business.”
“We are now in the 
growth phase of 
commercial sales”
2009 was a good year for the Group during which we progressed 
from technology development to having a commercial product and 
delivering initial sales. 2010 is a significant year for the Group, where 
we have a further transition to become a product sales and  
services-led business. To achieve this we are currently putting in 
place the necessary people and processes. 
The Group has continued to deliver tight cost controls during  
our development phase, ensuring that we have sufficient funds  
for the transition period we are now in, through to volume  
sales, sustainability and commercial growth. This accelerated 
commercial activity has resulted in an operating loss £0.14 million 
higher than last year, in line with the Board’s expectations, to 
establish the basis for commercial sales in 2010. The Group finished 
the year with cash reserves of £1.7 million.
Whilst sales were modest at £0.12 million, due to the timing of 
product availability following CE certification and the establishment 
of a supply chain, the Group is putting in place the resources to 
grow sales.
During 2009 we saw increasing awareness of, and support for, 
cleaner and energy efficient technologies around the world. This is 
epitomised by one of the first points that US President Barack 
Obama made in his speech to the Copenhagen Summit: “That is 
why we have taken bold action at home – by making historic 
investments in renewable energy; by putting our people to  
work increasing efficiency in our homes and buildings; and  
by pursuing comprehensive legislation to transform to a clean 
energy economy”. 
In the UK, the government published a consultation document 
proposing to extend the Carbon Emissions Reduction Target 
(“CERT”) to 2012 and introduced the Community Energy Savings 
Programme (“CESP”). Whilst the Group’s products present a 
compelling economic case to users in their own right, the CERT 
scheme has been instrumental in encouraging household emissions 
reduction and the adoption of energy-saving devices like VPhase. 
During the year we appointed Ambrian Partners as our Broker and 
Nomad. This has consolidated our markets advisory from two firms 
to one, improving the coordination of our communications, and 
providing us with direct access to a specialist advisor in the 
cleantech sector.
I would also like to extend the thanks of the Board to all our 
employees who, through their hard work and effort, have enabled 
the Group to achieve another successful year. We look forward to a 
challenging and successful 2010 as the Group continues its 
commercial growth and development.
Adrian C Hutchings
Executive Chairman
23 March 2010
Adrian C Hutchings
Executive Chairman 5 VPhase plc
Group Financial Statements for the year ended 31 December 2009
…the Government will 
legislate to channel  
£910 million from energy 
companies into energy-
saving initiatives…
Gordon Brown, September 2009
“We have taken bold 
action at home - by 
making historic 
investments in renewable 
energy; by putting our 
people to work increasing 
efficiency in our homes 
and buildings; and by 
pursuing comprehensive 
legislation to transform to 
a clean energy economy”
US President Barrack Obama at the Copenhagen 
Summit, December 2009 6 VPhase plc
Group Financial Statements for the year ended 31 December 2009
Chief Executive’s Review
Dr Lee Juby
Chief Executive Officer
  
Our Objective
To provide long term shareholder value through •	
the commercial growth of our business leading 
to growing earnings per share. We aim to do 
this with our cost effective products designed 
to meet the growing global demand for 
domestic and light commercial energy 
efficiency technologies.
Our Strategy
To pursue identified market opportunities in the •	
Group’s target sector of energy efficiency for 
domestic and light commercial applications
To produce products based on robust •	
engineering principles, regularly utilising existing 
mass produced components configured in a 
novel and patentable way
To avoid cutting edge science enabling us to •	
de-risk the new product development process
To provide exceptional levels of customer •	
service
To generate an environment which attracts •	
highly skilled and motivated people that can 
provide the Group with a sustainable 
competitive advantage
To manage the Group in a controlled •	
governance environment with due regard  
to financial and other business risks
“Our 2009 target of 
creating a platform for 
revenue generation and 
growth has been 
achieved”
I am pleased to present this review of progress over the last twelve 
months and I am confident that we are now in a position to drive 
forward the Group’s continuing commercial growth. We are 
particularly pleased to see VPhase products being shipped to our 
customers as they save both energy and money by optimising the 
voltage supplied to their homes.
Whilst VPhase has achieved initial sales, we do recognise that  
it has taken longer than originally anticipated to have products 
available commercially due to the delay in achieving CE marking. 
Now that VPhase is a certified product, we are putting in place the 
necessary measures to capitalise on the order pipeline that we’ve 
built over the past two years. To deliver on our sales targets we 
have established the associated supply chain and sales channels, 
and have increased our marketing activities.
The strict management of our cost base and cash resources has 
allowed us to deliver an operating loss that, whilst higher than last 
year by £0.14 million due to the increased commercial activity, is still 
significantly lower than the Board’s expectations. We end the year 
with £1.7 million cash in the bank, giving us comfort that our current 
plans can be delivered from our existing resources. 
General market review
Continual concerns about the high costs of energy and the 
tightening of budgets across homes and businesses in the downturn 
have called for an ever greater need for cost-effective ways to 
conserve energy and reduce household bills. In the  
UK, our home ground and launch market, the government has also 
recognised the need to support energy efficiency and conservation 
in the household sector, which is responsible for roughly one-
quarter of the country’s emissions. Indeed, the UK Government 
announced a raft of initiatives in 2009 to promote carbon reduction 
and smart energy management in the household sector. 
A key development has been the proposal to extend CERT to 2012. 
CERT obligates energy suppliers to deliver measures to limit carbon 
emissions from UK homes. The current phase runs from 2008 to 
2011 and covers carbon savings equivalent to the emissions from 
700,000 homes per year. In early 2009 the government further 
raised the CERT target by an additional 20%, and late in the year 
proposed to extend the scheme to December 2012 with a higher 
carbon reduction target.  7 VPhase plc
Group Financial Statements for the year ended 31 December 2009
CESP was introduced which further requires energy suppliers and 
generators to provide domestic energy efficiency measures via 
community schemes, with a particular focus on serving households 
in low-income areas. 
The government rolled out a programme late last year to install 
smart meters across all 26 million UK homes by 2020, as part  
of a roadmap towards a more efficient energy system. We believe 
that this will pave the way for the integration of smart energy 
management technologies such as VPhase. 
More recently, the government has announced plans for eco home 
loans. These are designed to fund both the initial purchase of 
energy-efficient technologies, such as our VPhase units, and also to 
create an ongoing price differential between energy-efficient and 
inefficient homes.
Whilst government initiatives, in particular CERT, have been 
instrumental in driving the adoption of energy-saving technologies 
such as VPhase and in focusing public opinion on energy 
conservation and carbon reduction, the Group’s position on  
such initiatives is clear. Whether provided through eco-loans  
or household efficiency programmes (such as CERT and smart 
metering), they are useful in focusing public opinion on energy 
conservation and carbon reduction. We prefer, however, to focus on 
developing products that deliver a compelling economic case 
without artificial subsidies from current or future governments and 
to use such subsidies as an additional benefit for our customers. 
Our VPhase product, by saving household bills while offering a 
quick payback, offers a compelling proposition. 
Operational Review
The Group has put in place a wide range of new processes and 
procedures to enable the consistent supply and delivery of quality 
products to our customers. I would like to thank the teams who, 
amongst other things, rapidly put in place the full range of procedures 
and controls to enable the Group to start selling VPhase products, 
not only to our commercial customers but also direct to the general 
public through our website, www.vphase.com. The electronic sales 
procedures entailed putting in place all procedures to comply with 
the Distance Selling Regulations. The whole process was undertaken 
over a very short period of time and has been operating successfully 
for the past 6 months.
The Group has been increasing the profile of VPhase and promoting 
the VPhase message:
“VPhase is the smart new way to cut your energy costs 
immediately without changing your supplier or your lifestyle.  
By reducing and managing the voltage coming into your home, 
a VPhase device will ensure many of your electrical appliances 
use less electricity and cost less to run. It will also lower your 
carbon emissions. The device is simple to install by a qualified 
electrician and requires no maintenance. It’s simply a matter 
of fit, forget and save instantly!” 
In the first half of 2009 VPhase completed the development of its 
first domestic energy saving device. This achieved CE marking in 
June, which means that the product complies with the essential 
requirements of the relevant European health, safety and 
environmental protection legislation and, therefore, permitting sales 
across the UK and continental Europe. Initially sales have been 
focused in the UK.
Achieving the CE marking milestone also enabled Ofgem’s formal 
Demonstration Action of the VPhase unit to commence, in 
conjunction with Scottish and Southern Energy (SSE), for the UK 
government’s CERT scheme. The results from this trial will indicate 
the level of lifetime carbon dioxide savings that utility companies 
can claim through the CERT scheme from the sale of the VPhase 
product. These trials are expected to conclude in the second 
quarter of 2010, which is later than we anticipated due to delays  
in the SSE customer selection and installation programme. These 
trials are now fully installed.
Trials are also being conducted with a major Northwest-based 
social housing provider, British Gas, and in VPhase staff homes for 
both product performance and marketing opportunities. 
Independently analysed results from staff homes have shown 
annualised savings of between £75 to £135 per home, dependent 
upon the level of incoming voltage and load profile of the property. 
These homes are all detached properties, and therefore smaller 
homes are likely to have lower levels of savings.
During the year we have increased our sales and marketing activities 
and have promoted the VPhase device at: Ecobuild, the world’s 
biggest trade and consumer event for sustainable design, 
construction and the built environment; on the BBC’s Working 
Lunch television programme; and in the national press. We recruited 
a head of sales and have established training sessions with the 
National Association of Professional Inspectors and Testers (NAPIT). 
These training sessions allow VPhase to train electrical contractors 
in the benefits and installation of VPhase whilst also introducing 
them to the additional revenue opportunity that VPhase offers. We 
have established a programme of these training sessions for 2010, 
and are organising product familiarisation days with electrical 
distributors for their customers along with a series of training days 
for electricians at VPhase’s premises in Capenhurst.
People
We have delivered excellent performance with a team of eight 
people. In 2010 we plan to expand this team with the further 
recruitment of sales and marketing professionals. 
Financial position and outlook
We finished the year with cash levels ahead of the Directors’ 
expectations and a business well placed to capitalise on growing 
sales and margins during 2010.
Dr Lee Juby
Chief Executive Officer
23 March 2010
“One quarter of the UK’s total 
emissions come from homes, so 
householders have to be a part of the 
solution to climate change. Increasing 
the energy efficiency of homes not 
only helps reduce emissions, but will 
also help reduce fuel bills”
Ed Miliband, Energy and Climate Change Secretary, December 2009 8 VPhase plc
Group Financial Statements for the year ended 31 December 2009
Finance Review
“Home energy efficiency has 
never been so important in 
achieving our long term goals on 
climate change and to making a 
real difference to householders’ 
energy bills.”
Joan Ruddock, Energy Minister, July 2009
Richard H Smith
Chief Financial Officer
Key highlights
Operating results
  2009 2008 
Continuing operations   £’000 £’000
Revenue  124 –
Gross profit  28 –
Operating loss  (992) (853)
Cash  1,677 3,203
Revenue was £124,000 higher than 2008 through first product sales. 
Overheads
Overheads of £1,020,000 were incurred in the year  
(2008: £853,000), an increase of £167,000, mainly through the 
increased commercialisation activity carried out since achieving CE 
marking. Consistent with the stage of development of the business 
the largest single cost relates to the employment of staff £341,000 
(2008: £567,000). 
Depreciation of fixed assets and Intangible amortisation
Depreciation of property, plant and equipment totalled £26,000 
(2008: £5,000), reflecting the full year charge of expenditure incurred 
largely in 2008.
Amortisation of intangible assets increased during the year as  
the Group has transitioned from the development phase into  
the commercial phase and the intangible R&D asset that was 
generated is now being amortised over its useful life. This has 
resulted in an amortisation charge of £27,000 (2008: £Nil).
Finance income
Interest earned on money held on deposit totalled £11,000  
(2008: £84,000). The reduced amount reflects the lower interest 
rates that have prevailed throughout 2009 as compared to 2008, 
the lower quantum of cash held and the Group’s policy of giving 
priority to security, then liquidity and finally yield in its choice of 
where to invest surplus cash.
Loss before tax
The loss before tax of £981,000 (2008: £769,000) is larger than  
last year’s reported loss due to the increased expenditure on 
commercial activities. This expenditure has laid the foundation for 
increased sales in 2010.
Tax
During the period the Group received a tax credit of £5,000  
(2008: £Nil) in relation to research and development expenditure in 
2006/07 . We are preparing claims for 2008 and 2009 although, in 
accordance with the Group’s accounting policies, no further 
amounts have been accrued for subsequent accounting  
periods as the amount expected to be recovered cannot be  
reliably measured.
Loss per share
The loss per share, basic and diluted, was 0.14 pence  
(2008: 0.11 pence) with the change reflecting the increased 
commercial activity during the year.
Investment in property plant and equipment
During the year £15,000 (2008: £76,000) was invested in property 
plant and equipment and is consistent with the Group’s low 
requirement for capital investment.
Investment in intangible assets
The Group undertakes a significant amount of research and 
development to address opportunities in the alternative energy 
market. In 2009, the Group incurred research and development 
costs of £191,000 (2008: £247,000) of which £176,000 of 
development costs (2008: £222,000) has been capitalised under 
IAS 38 “Intangible Assets”. Development expenditure of £15,000 
(2008: £25,000) has been recognised in the Income Statement as 
incurred following the commencement of mainstream sales. 
Intangible assets are set out in note 12. 
Cash and cash equivalents
At 31 December 2009, the Group had cash and cash equivalent 
reserves of £1,677,000 (2008: £3,203,000).
Richard H Smith
Chief Financial Officer
23 March 2010 9 VPhase plc
Group Financial Statements for the year ended 31 December 2009
Corporate Responsibility
Overview
As we expand as a business, we are developing policies and 
procedures to ensure that we manage our growth responsibly. 
These focus on taking care of our staff, being aware of our 
environmental impact and building strong, long-term relationships 
with our suppliers.
Employees
As an entrepreneurial, fast growing organisation, we appreciate 
that attracting and retaining high calibre staff is critical to our future 
development. We have developed a comprehensive, competitive 
package for employees including free medical care for staff and 
their families and the Group holding company is planning to 
introduce a share save scheme in which employees of the Group 
are able to participate. 
Intellectual capital is one of our key strengths and we encourage 
our staff to continuously develop their skills. We offer sponsorship 
for professional qualifications – right up to MBA level – and allow 
study leave for exams. We also participate in a Knowledge Transfer 
Programme with our local university, sharing the costs  
of employing technical post-doctoral students and giving them 
business experience, whilst they contribute to our product 
development initiatives. This is a two year programme and both  
of the students who have participated so far have joined us at the 
end of the period.
Maintaining a safe working environment is an important part of  
the way we operate and we have an excellent health and safety 
record. We have no Reporting of Injuries, Disease and Dangerous 
Occurrences Regulations (RIDDOR) or Lost Time Injury Frequency 
Rates (LTIFR) incidents to report and work hard  
to maintain our high standards. We monitor our operations carefully, 
promote health and safety training and hold regular  
safety meetings.
Environment
Our products are focused on delivering energy savings that reduce 
our customers’ costs and their carbon footprint. As our products 
move into commercial use, we have been able to set up a number 
of 3rd party trials to verify these savings in the working  
environment; for example, recent certified trials of our VPhase 
Smart Voltage Management unit have generated carbon savings of 
between 400kg – 700g per annum, reducing electricity bills by 
between £75 – £135 a year.
As we develop our supply chain, we are building in environmentally 
friendly processes and standards from the start; for example, our 
VPhase device is fully Waste Electrical and Electronic Equipment 
(WEEE) directive compliant.
Supplier relationships
Much of our manufacturing requirement will be outsourced  
so we are seeking to build long-term supplier relationships,  
with contracts based on a number of important factors in addition 
to price and ability to supply. These include product quality 
processes, plans for waste reduction, health and safety records 
and geographic location.
Business continuity is equally important so we will be following a 
multi-sourcing policy to mitigate the risk of being dependent on a 
single supplier. 10 VPhase plc
Group Financial Statements for the year ended 31 December 2009
Board of Directors
Adrian C Hutchings
Executive Chairman
Adrian is the Chief Executive of 
Energetix Group plc, the largest 
shareholder in VPhase plc. Prior to 
founding Energetix Group in 1997, 
Adrian was the Managing Director 
of International Energy Systems 
Limited (IES), a subsidiary of BNFL 
which developed, manufactured, 
and marketed a high technology 
flywheel for storing electrical 
energy, for the UPS and distributed 
generation markets.
Before this, Adrian was a 
Commercial Manager with BNFL 
New Business Ventures. His role 
was identifying technologies and 
business opportunities based on 
internal intellectual property, for 
non-nuclear applications, as part 
of a diversification program. Prior to 
this he was the project manager for 
a £50 million capital, £500 million 
life cycle, design and construction 
project for a major facility at the 
Sellafield site. Adrian has a degree 
in Chemical Engineering.
Dr Lee Juby
Chief Executive Officer
A Chartered Engineer with a 
doctorate in electronics and over  
ten years’ experience in the 
development and commercialisation 
of advanced technology gained 
within a variety of different roles.  
Lee joined VPhase from Rolls-Royce 
Distributed Generation Systems 
(RRDGS) where he had been Head 
of Product Planning and transitioned 
the RRDGS business unit from a 
capability provider to a product 
provider. Other recent positions 
include Commercialisation Manager 
at Energetix Group Limited where he 
developed the original VPhase 
technology, Director of Energetix Pnu 
Power Limited where he developed 
the initial technology and Senior 
Consultant at EA Technology where, 
amongst other roles, he acted as 
Lead Technical Expert for a number 
of banking clients for investment Due 
Diligence activities.
 
Richard H Smith
Chief Financial Officer
Richard is the Chief Financial 
Officer of Energetix Group plc, the 
largest shareholder in VPhase plc. 
A Fellow of the Chartered Institute 
of Management Accountants with 
an MBA from Warwick University, 
Richard was previously Finance 
Director for Ultraframe (UK) Limited 
(2001 to 2004), and Finance 
Director for Norcros Adhesives 
Limited (1997 to 2001) which 
comprised subsidiary, joint venture 
and licensee operations in the UK, 
Europe, the Middle East and India. 
From 1995 to 1997 Richard worked 
with Adrian Hutchings as the 
Finance Director for IES and prior 
to this was the Financial Controller 
for Robinson Healthcare, a division 
of Robinson Limited that 
manufactured consumables for the 
healthcare industry.
Nick A Moss
Non-Executive Director
Nick has a BSc (1st Class) 
Chemistry with Business 
Administration and is a Fellow of 
The Chartered Institute of 
Marketing. He is the Managing 
Director of Walnut Management 
(UK) Limited, a strategic marketing 
consultancy with a portfolio of 
clients in the building products  
and engineering sectors. Prior to 
establishing Walnut Management 
(UK) Limited, Nick held various 
senior management positions 
within Caradon plc including 
Divisional Marketing and Product 
Development Director for leading 
brands including Everest, Catnic, 
Garador and Terrain, Director and 
General Manager Caradon ASL 
and Caradon Alpine. Prior to this, 
he was Product Manager for MK 
Electric/Gent with particular 
responsibility for electrical 
components, fire systems and 
building management. 
 
 
Executive Directors 11 V P hase plc
Group Financial Statements for the year ended 31 December 2009
11 V P hase plc
Group Financial Statements for the year ended 31 December 2009
The Directors present their report and the audited Financial 
Statements for the year ended 31 December 2009.
Basis of preparation of the Financial Statements
The Financial Statements have been prepared in accordance with 
International Financial Reporting Standards (IFRS) as adopted by 
the European Union. In accordance with IFRS, the Financial 
Statements reflect the results of VPhase plc and its subsidiaries for 
the year ended 31 December 2009 and for the corresponding 
period in 2008. Further details are provided in note 2 to the  
Financial Statements.
Principal activities
VPhase plc is focused on the creation of shareholder value through 
the provision of home energy efficiency products and services 
designed to reduce energy consumption for domestic and small 
commercial properties.
Results and dividends
The loss for the year after taxation, amounted to £976,000 
(2008: £769,000). The Directors do not recommend the payment of 
a dividend.
Review of business and future developments
The business completed the development of its first core product 
and the Directors are pleased to report that commercial sales have 
commenced.
A more detailed appraisal of business developments is given in the 
Chairman’s Statement, Chief Executive’s Review and Finance 
Review on pages 4 to 8 and future developments as set out in the 
Chief Executive’s Review on pages 6 and 7.
Risk review
The Directors have monitored the progress of the overall Group 
strategy and a review of the Key Performance Indicators (KPIs) is 
contained in the Chairman’s Statement, Chief Executive’s Review 
and Finance Review on pages 4 to 8. The Directors believe that, 
given the Group’s transition from the early stage of development to 
the sales and supply of product, that the relevant KPIs are; creation 
of shareholder value, revenue, product margins, warranty claims, 
research and development costs, administrative expenses, capital 
expenditure and cash management. 
The key business risks affecting the Group are set out below:
Funding requirements
The Group has sufficient financial resources to continue to operate 
for the foreseeable future and as a result is not currently seeking 
external finance or borrowing facilities. Further details are disclosed 
in note 2.2 to the Financial Statements.
Strength of the Group’s bankers
The Group has reviewed and updated its treasury policy and, in 
accordance with this, funds are only lodged with UK and Irish 
based financial institutions with an ‘A’ rating or better.
Failure of suppliers of essential goods and services
Wherever practical the Group seeks to dual source its key 
components and services. Each supplier is assessed and where 
necessary strategies to manage and protect supply to the Group are 
put in place.
Value creation
The Group’s success will depend on its ability to develop a portfolio 
of products and services which address identified market needs, 
establish appropriate assembly and supply chain capabilities, and 
capture value from business opportunities.
The Group’s business model involves focusing development on 
identified market needs and seeking revenue generation from 
project sales, product sales and licensing, and the building of a 
supply chain around multiple suppliers. These activities are all 
undertaken within appropriate commercial arrangements.
Attraction and retention of key employees
The Group depends on its Directors and other key employees and 
whilst it has entered into contractual arrangements with these 
individuals with the aim of securing the services of each of them, 
retention of these services cannot be guaranteed.
The Group has attempted to reduce this risk by offering competitive 
remuneration packages including the opportunity to participate in 
a share option scheme and investment in training, development 
and succession planning.
The Group’s ultimate Parent Company Energetix Group plc is 
establishing an employee share save scheme in which employees 
of VPase plc may participate to encourage greater share 
participation, retention of employees and improved goal 
congruence.
Intellectual property
A significant part of the Group’s future depends on its intellectual 
property for future development and growth. If intellectual property 
is inadequately protected, the Group’s future success could 
become adversely affected.
The Group continues to invest in the protection and expansion of 
its intellectual property portfolio. In addition, the Group has 
established internal procedures and controls to capture new 
intellectual property, to prevent unauthorised disclosure to third 
parties and to protect the Group’s rights when dealing with supply 
chain partners.
Market acceptance
The Group’s technologies are either stand alone products or will be 
incorporated into the products or processes of third parties. There 
can be no assurance that such products or processes will achieve 
commercial success or be an attractive alternative to conventional 
products or processes. If a mass market for any product or process 
fails to develop, or develops more slowly than anticipated, the 
Group may fail to achieve profitability in respect of the technology 
associated with such product or processes.
The Group’s strategy of producing products from existing 
components enabling lower costs for early products plus seeking 
specific channel partnerships which cover defined market 
applications and geographical focus, is designed to facilitate 
adoption of the products and to drive mass market uptake. 
Group Directors’ Report
for the year ended 31 December 2009 Notes to the Group Financial Statements
for the year ended 31 December 2009
12 V P hase plc
Group Financial Statements for the year ended 31 December 2009
12 V P hase plc
Group Financial Statements for the year ended 31 December 2009
Research and development 
The Group undertakes a significant amount of research and 
development to address opportunities in the alternative energy 
market. In 2009, the Group incurred research and development 
costs of £191,000 (2008: £247,000) of which £176,000 of 
development costs (2008: £222,000) has been capitalised under 
IAS 38 “Intangible Assets”. Development expenditure of £15,000 
(2008: £25,000) has been recognised in the Income Statement as 
incurred following the commencement of mainstream sales. 
Intangible assets are set out in note 12.
Directors
The Directors who held office in the year are shown below. Each 
Director served throughout the period unless otherwise indicated: 
A C Hutchings (Executive Chairman)
Dr L Juby (Chief Executive Officer)
R H Smith (Chief Financial Officer)
N A Moss (Non-Executive Director)
Employees 
Throughout the year, Directors of the Group provide relevant 
information to employees and engage in consultation with them to 
ensure that their views are considered.
Applications for employment by disabled persons are given full and 
fair consideration for all vacancies in accordance with their 
particular aptitudes and abilities. In the event of employees 
becoming disabled, every effort is given to retrain them in order 
that their employment with the Group may continue.
It is the policy of the Group that training, career development and 
promotion opportunities should be available to all employees. 
Financial risk management objectives and policies 
Other than the proceeds from the issue of shares, the Group uses 
various financial instruments that include cash and various items, 
such as other receivables and trade payables arising directly from 
its operations. The main purpose of these financial instruments is 
to finance the Group’s operations.
The existence of these financial instruments exposes the Group to 
a number of financial risks which are described in more detail on 
the page opposite. 
The main risks arising from the Group’s financial instruments  
are credit risk and liquidity risk. The Directors review and  
agree policies for managing risk and determining these risk 
management policies. 
Liquidity risk
The Group seeks to manage financial risk by ensuring sufficient 
liquidity is available to meet foreseeable needs and to invest cash 
assets safely and profitably. The Group had net cash balances of 
£1,677,000 as at 31 December 2009 (2008: £3,203,000).
The maturity of contractual undiscounted cash flows is set out in 
note 18.4 to the Financial Statements.
The Directors have assessed the Group’s currency risk. Presently, 
the Directors do not believe that the Group’s currency risk requires 
hedging, however this situation will be monitored and amended  
if appropriate.
Credit risk
The Company’s principal financial asset is cash. Although the 
credit risk associated with cash is limited, the Group’s treasury 
policy remains the same as in the prior year.
Supplier payment policy
It is the Group’s policy, in respect of all suppliers, to agree payment 
terms in advance of the supply of goods and services and to adhere 
to those payment terms. Trade payables of the Group at the year 
end as a proportion of amounts invoiced by suppliers during the 
year represent 37 days (2008: 33 days) and for the Company 
represent 17 days (2008: 29 days).
Going concern
Having made reasonable enquiries, the Directors are of the opinion 
that the Group has sufficient resources to continue in operational 
existence for the foreseeable future and hence these Financial 
Statements have been prepared on a going concern basis. Further 
details are disclosed within note 2.2 to the Financial Statements.
Major shareholdings
As at 23 March 2010 the Company had been notified of the 
following interests in 3% or more of the Company’s issued share 
capital, pursuant to the Disclosure and Transparency Rules of the 
Financial Services Authority:
  %
Energetix Group plc  49.09
Ora Capital Partners Limited  17.67
BlackRock Inv Mgmt  8.56
Close Asset Management Ltd  5.84
Novum Securities Limited*  4.53
GAM UK Hedge Investments  4.20
*  Novum Securities Limited is a 47.7% owned subsidiary of Ora 
Capital Partners Limited
Corporate Governance Statement
The Directors are committed to maintaining high standards of 
Corporate Governance. This statement sets out how the Board 
has applied the principles of good corporate governance in its 
management of the business in the period ended 31 December 
2009, relevant to the Group’s size and complexity.
Board of Directors
During the period under review the Board comprised of one Non-
Executive and three Executive Directors. Biographies of the Directors 
are provided on page 10 and set out the broad range of commercial, 
technical and financial expertise possessed by Board members. The 
combination of skills and talents ensures that strategic focus and 
sound commercial stewardship is available to the Group. The Non-
Executive Director is highly experienced, exercises independent 
judgement on issues arising and is able to challenge constructively 
the decisions of the Executive Directors. The roles of Chairman and 
Chief Executive are separate, ensuring an appropriate division of 
responsibilities at the head of the Group. 
Group Directors’ Report continued
for the year ended 31 December 2009 13 V P hase plc
Group Financial Statements for the year ended 31 December 2009
13 V P hase plc
Group Financial Statements for the year ended 31 December 2009
All Directors are subject to election by shareholders and re-election 
thereafter is by rotation at intervals of not more than three years. All 
Directors are offered an opportunity to request information and 
training relevant to their legal and other duties as a Director. They 
are also given written rules and guidelines setting out their 
responsibilities within an AIM listed company. All Directors are able 
to take independent legal and professional advice, if required, at 
the expense of the Company. Directors have access at all times to 
the services of the Company Secretary who is responsible to the 
Board for ensuring that all agreed policies and procedures are 
followed and all relevant rules and guidelines are complied with.
Meetings of the Board
The Board, which meets regularly, has overall responsibility for the 
strategic direction and management of the business. All key 
decisions affecting the Group are considered by the Board as a 
whole. The annual Group budget and business plan, trading and 
cash flow forecasts, major items of capital expenditure and any 
other significant strategic actions all require Board approval. Board 
meetings are subject to a formal agenda and receive reports on the 
performance of the Group’s business. Monthly management 
accounts, that compare actual results with budget, are subject to 
detailed review. Other strategic and commercial issues are 
considered as required. Board decisions are communicated on a 
timely basis to management to ensure that operational 
implementation occurs without delay.
Committees
The Company has not established Audit or Remuneration 
committees and relies on the support of its parent undertaking, 
Energetix Group plc, to discuss issues that would normally be 
taken to these committees.
Communication with shareholders
The Board is committed to constructive dialogue with its 
shareholders. The Company uses the AGM as an opportunity  
to communicate with its shareholders. The AGM will be held at 
11.00am on Thursday 20 May 2010 at the Company’s trading 
address, Unit 1 Capenhurst Technology Park, Capenhurst,  
Chester, CH1 6EH.
The Company’s website (www.vphaseplc.com) is the primary 
source of information on the Company. This includes an  
overview of the activities of the Company and details of all recent 
Group announcements.
Internal control
The Board has overall responsibility for ensuring that the Company 
maintains a system of internal control to provide them with 
reasonable assurance regarding the reliability of financial information 
used within the business and for publication. The Board is also 
responsible for ensuring that assets are safeguarded and risk is 
identified as early as practically possible. The internal control 
systems established are designed to manage rather than completely 
eliminate risk and can only provide reasonable, but not absolute, 
assurance against misstatement or loss. The Group does not 
currently have an internal audit function and this is kept under 
review as the Group progresses from the technology development 
phase to the commercial supply phase.
The Board reviews the effectiveness of the systems of internal 
control and its reporting procedures, and augments and develops 
these procedures as required to ensure that an appropriate control 
framework is maintained at all times.
The principal control mechanisms deployed by the Company are:
Board approval for all strategic and commercially significant •	
transactions;
detailed scrutiny of the monthly management accounts with all •	
material variances investigated;
executive review and monitoring of key decision-making •	
processes at subsidiary board level;
Board reports on business performance and commercial •	
developments;
periodic risk assessments involving senior executive •	
management;
standard accounting controls and reporting procedures; and •	
regular liaison with the Company’s auditors and other •	
professionals as required.
Statement of Directors’ responsibilities
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 financial statements for the Group in accordance with 
International Financial Reporting Standards as adopted by the 
European Union (IFRSs) and for the parent company in accordance 
with United Kingdom Accounting Standards (United Kingdom 
Generally Accepted Accounting Practice). The financial statements 
are required by law to give a true and fair view of the state of affairs 
of the Company and of the profit or loss of the Company for that 
period. The financial statements are required by law to give a true 
and fair view of the state of affairs of the Group and parent company 
and of the profit or loss of the Group for that period. In preparing 
these financial statements, the Directors are required to:
select suitable accounting policies and then apply them •	
consistently; 
make judgments and estimates that are reasonable and •	
prudent; 
state whether applicable IFRSs 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. 
The Directors are responsible for keeping adequate accounting 
records that 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. Notes to the Group Financial Statements
for the year ended 31 December 2009
14 V P hase plc
Group Financial Statements for the year ended 31 December 2009
14 V P hase plc
Group Financial Statements for the year ended 31 December 2009
In so far as each of the Directors is aware: 
there is no relevant audit information of which the Company’s •	
auditors are unaware; and 
the Directors have taken all steps that they ought to have taken •	
to make themselves aware of any relevant audit information and 
to establish that the auditors are aware of that information. 
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.
Auditors
Grant Thornton UK LLP, having expressed their willingness to 
continue in office, will be deemed reappointed for the next financial 
year in accordance with section 489 of the Companies Act 2006.
On behalf of the Board
Dr L Juby
Chief Executive Officer
23 March 2010
Group Directors’ Report continued
for the year ended 31 December 2009 15 V P hase plc
Group Financial Statements for the year ended 31 December 2009
15 V P hase plc
Group Financial Statements for the year ended 31 December 2009
We have audited the financial statements of VPhase plc for the year 
ended 31 December 2009 which comprise the Group Income 
Statement, the Group Statement of Changes in Equity, the Group 
Statement of Financial Position, the Parent Company Balance 
Sheet, the Group Statement of Cash Flows and the related notes. 
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 auditors
As explained more fully in the Statement of Directors’ responsibilities 
set out in the Group Directors’ Report on page 13, 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 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 (APB’s) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements  
is provided on the APB’s website at www.frc.org.uk/apb/scope/
UKNP .
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 2009 and of the Group’s loss for the year then 
ended; 
the Group financial statements have been properly prepared in •	
accordance with IFRS 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.
Opinion on other matter prescribed by the Companies  
Act 2006
In our opinion the information given in the Group Directors’ 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.
Joanne Kearns 
Senior Statutory Auditor 
for and on behalf of Grant Thornton UK LLP 
Statutory Auditor, Chartered Accountants 
Manchester 
23 March 2010
Independent Auditor’s Report
to the Members of VPhase PLC 16 V P hase plc
Group Financial Statements for the year ended 31 December 2009
Group Income Statement
for the year ended 31 December 2009
       Year ended Year ended 
       31 December   31 December 
       2009 2008 
      Note £’000 £’000
Revenue       124 –
Cost of sales       (96) –
Gross profit       28 –
Administrative expenses       (1,020) (853)
Operating loss       (992) (853)
Finance income      5 11 84
Loss before income tax      4 (981) (769)
Income tax      9 5 –
Loss for the year       (976) (769)
Attributable to: 
Non-controlling interest       (497) (390)
Owners of the parent       (479) (379)
Loss per ordinary share attributable to the equity holders of the Company during the year
Total and continuing: 
– Basic and diluted      11 (0.14)p (0.11)p
The Group has no items to be recognised in the “Group statement of comprehensive income” and consequently this statement has not 
been shown.
All revenue and costs originate from continuing activities. 
The notes on pages 20 to 35 are an integral part of these Group Financial Statements.  17 V P hase plc
Group Financial Statements for the year ended 31 December 2009
Group Statement of Changes in Equity
for the year ended 31 December 2009
 Attributable to equity holders of the Company 
   Merger Capital  Reverse  
 Share Share relief redemption Retained acquisition Warrant Other Total 
 capital premium reserve reserve earnings reserve reserve  reserves equity 
 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000  £’000
Balance at 1 January 2008 1,563 1,369  1,150 994 (784) (3,682) – (27) 583
Share based payments – – – – – – – 107 107
Proceeds from placing 175 3,325 – – – – – – 3,500
Share issue expenses:
– cash – (195) – – – – – – (195)
– warrants – (105) – – – – 105 – –
Shares issued by legal
parent in consideration
for services: 
– 13 February 2008 3 17 – – – – – (20) –
– 12 June 2008 3 17 – – – – – – 20
– 14 August 2008 3 17 – – – – – – 20
– 8 October 2008 3 17 – – – – – – 20
Other share based payments – – – – – – – 20 20
Transactions with owners 1,750 4,462 1,150 994 (784) (3,682) 105 80 4,075
Loss for the year and total
comprehensive income – – – – (769) – – – (769)
Balance at 31 December 2008 1,750 4,462 1,150 994 (1,553) (3,682) 105 80 3,306
Share based payments – – – – – – – 49 49
Shares issued by legal 
parent in consideration for services: 
– 5 June 2009 1 24 – –  – – – – 25
Transactions with owners 1,751  4,486 1,150  994 (1,553) (3,682) 105 129 3,380
Loss for the year and total 
comprehensive income – – –  – (976) – – – (976)
Balance at 31 December 2009 1,751 4,486 1,150 994  (2,529) (3,682) 105  129  2,404
Total recognised income and expense recognised directly to equity amounts to £Nil (2008: £Nil). 
Merger relief reserve 
Merger relief reserve represents the premium on the shares issued to acquire Energetix Voltage Control Limited. 
Capital redemption reserve 
Capital redemption reserve represents the cancellation of 100,376,460 deferred shares at 0.99 pence each on 24 September 2007. 
Reverse acquisition reserve 
As noted in note 2.4, the reverse acquisition reserve relates to the reverse acquisition between Energetix Voltage Control Limited and  
VPhase plc on 26 September 2007 . 
Warrant reserve 
As disclosed in note 19.2, in May 2008 the Company granted 3,500,000 warrants to its then broker in relation to the placing of 70,000,000 
shares as part of the agreed placing costs. The fair value of warrants is calculated using the Black-Scholes model at the time of grant and 
is charged to the share premium account. Further costs in relation to this placing of shares, £195,000, were settled in cash. 
Other reserves 
Other reserves comprise of share based payments for the cost of options granted, £49,000 (2008: £107 ,000); £Nil (2008: £20,000) for other share 
based payments to the Company’s broker, and an investment in own shares amounting to £Nil (2008: £47 ,000) which comprises the shares held 
by FG Employee Trustee Company Limited. These shares were originally purchased to satisfy options under Flightstore Group plc’s 
Employee Share Option Trust. At 31 December 2009, 179,653 (2008: 179,653) shares in Flightstore Group plc were held by FG Employee 
Trustee Company Limited. The market value of these shares at 31 December 2009 was £7 ,000 (2008: £12,000). 
The notes on pages 20 to 35 are an integral part of these Group Financial Statements.  18 V P hase plc
Group Financial Statements for the year ended 31 December 2009
Group Statement of Financial Position
as at 31 December 2009
       As at As at 
       31 December 31 December 
       2009 2008 
      Note £’000 £’000
ASSETS
Non-current assets
Intangible assets      12 371 222
Property, plant and equipment      13 61 72
       432 294
Current assets
Inventories      14 375 –
Trade and other receivables      15 186 144
Cash and cash equivalents      16 1,677 3,203
       2,238 3,347
Total assets       2,670 3,641
LIABILITIES
Current liabilities
Trade and other payables      17 266 335
Total liabilities       266 335
Equ ITY
Equity attributable to equity holders of the Company
Share capital      19 1,751 1,750
Share premium       4,486 4,462
Merger relief reserve       1,150 1,150
Capital redemption reserve       994 994
Retained earnings       (2,529) (1,553)
Reverse acquisition reserve       (3,682) (3,682)
Warrant reserve       105 105
Other reserves        129 80
Total equity       2,404 3,306
Total equity and liabilities       2,670 3,641
The notes on pages 20 to 35 are an integral part of these Group Financial Statements.
These Financial Statements were approved by the Board of Directors and authorised for issue on 23 March 2010 and were signed on
its behalf by:
Dr Lee Juby Richard H Smith
Chief Executive Officer Chief Financial Officer
Company number: 4958332 19 V P hase plc
Group Financial Statements for the year ended 31 December 2009
Group Statement of Cash Flows
for the year ended 31 December 2009
       Year ended Year ended 
       31 December 31 December 
        2009 2008 
      Note £’000 £’000
Cash flows from operating activities
Net cash consumed by operating activities      20 (1,351) (440)
Taxation
Tax received      9 5 –
Cash flows from investing activities
Expenditure on intangible fixed assets      12 (176) (222)
Purchases of property, plant and equipment      13 (15) (76)
Interest received      5 11 84
        (180) (214)
Cash flows from financing activities
Net proceeds from the issue of ordinary shares       – 3,305
Net (decrease)/increase in cash and cash equivalents      (1,526) 2,651
Cash and cash equivalents at the beginning of the year       3,203 552
Cash and cash equivalents at the end of the year     16 1,677 3,203
The notes on pages 20 to 35 are an integral part of these Group Financial Statements. Notes to the Group Financial Statements
for the year ended 31 December 2009
20 V P hase plc
Group Financial Statements for the year ended 31 December 2009
Notes to the Group Financial Statements
for the year ended 31 December 2009
1. General information 
VPhase plc (‘the Company’) and its subsidiaries (together ‘the Group’) develop products that provide energy efficiency solutions to certain 
identified problems in the energy market. The addresses of its registered office and principal place of business are disclosed  
on page 44 of the Group Financial Statements. VPhase plc is a limited company incorporated in England and Wales. 
2. Summary of significant accounting policies 
The principal accounting policies applied in the preparation of these Group Financial Statements are set out below. 
2.1 Standards and interpretations effective in the current period 
Adoption of new accounting standards
The Group has adopted the following new interpretations, revisions and amendments to IFRS issued by the International Accounting 
Standards Board, which are relevant to and effective for the Group’s financial statements for the annual period beginning 1 January 2009:
IAS 1 Presentation of Financial Statements (Revised 2007); •	
IFRS 8 Operating Segments; and •	
Amendments to IFRS 7 Financial Instruments: Disclosures – improving disclosures about financial instruments. •	
Significant effects on current, prior or future periods arising from the first time application of these new requirements in respect of 
presentation, recognition and measurement are described below. An overview of standards, amendments and interpretations to IFRSs 
issued but not yet effective is given in note 2.17.
Adoption of IAS 1 Presentation of Financial Statements (Revised 2007)
The Group has adopted IAS 1 Presentation of Financial Statements (Revised 2007) in its Group Financial Statements. This standard has 
been applied retrospectively. The adoption of the standard does not affect the financial position or profits of the Group but affects the 
presentation of the financial statements.
IAS 1 (Revised 2007) affects the presentation of owner changes in equity and introduces an option to present a single ‘Statement of 
comprehensive income’ or two statements the ‘Income statement’ and a ‘Statement of comprehensive income’. The Group has elected 
to present the ‘Statement of Comprehensive Income’ in two statements: 
The measurement and recognition of the Group’s assets, liabilities, income and expenses is unchanged. 
Two comparative periods are presented for the statement of financial position when the Group:
(i) applies an accounting policy retrospectively; or
(ii) makes a retrospective restatement of items in its financial statements.
IFRS 7 Financial Instruments: Disclosures – improving disclosures about financial instruments
The Group has adopted IFRS 7 Financial instruments: Disclosures – improving disclosures about financial instruments.
The amendments require additional disclosures for financial instruments that are measured at fair value in the statement of financial 
position. These fair value measurements are categorised into a three-level fair value hierarchy, which reflects the extent to which they  
are based on observable market data.
The adoption of this standard has not affected the Group’s level of disclosure as the Group has no financial instruments.
Adoption of IFRS 8 Operating Segments
The adoption of this standard has not affected the identified operating segments for the Group. However, the accounting policy  
for identifying segments is now based on internal management reporting information that is regularly reviewed by the chief operating 
decision maker.
In contrast, IAS 14 required the Group to identify two sets of segments (business and geographical) based on risks and rewards of the 
operating segments.
Although the Group has applied IAS 1, IFRS 8 and the amendment to IFRS 7 retrospectively there has been no retrospective restatement 
of items in its financial statements. Consequently, the Statement of Financial Position includes only one comparative period.
2.2 Basis of preparation 
The Group Financial Statements of VPhase plc have been prepared in accordance with International Financial Reporting Standards (IFRS). 
The Group Financial Statements have been prepared under the historical cost convention.  21 V P hase plc
Group Financial Statements for the year ended 31 December 2009
Going concern 
The Group’s business activities, together with the factors likely to affect its future development, performance and position are set out  
in the Group Directors’ Report on pages 11 to 14. The financial position of the Group, its cash flows and liquidity position are described  
in the Finance Review on page 8. In addition, this note 2 to the Financial Statements includes the Group’s objectives, policies and 
processes for managing its capital; its financial risk management objectives; details of its financial instruments and hedging activities; and 
its exposures to credit risk and liquidity risk. 
The Group, together with its ultimate Parent Company, has sufficient financial resources to continue to operate for the foreseeable future 
and with the commencement of sales in 2009 the Group has a sound platform for launching its products and generating future sales. As 
a consequence, the Directors believe that the Group is well placed to manage its business risks successfully despite the current uncertain 
economic outlook. 
The Group’s forecasts and projections, which have been prepared for the period to 31 December 2012 and taking account of reasonably 
possible changes in performance, show that the Group should be able to operate within the level of its current cash resources. 
After making enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to 
continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the 
Group Financial Statements. 
2.3 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 estimates 
Research and development activities 
Management have reviewed the Group’s research and development activities and have made estimates and judgments on the amount  
of development expenditure it is appropriate to capitalise. The criteria about which management have to make judgments are set out  
in note 2.12. 
Impairment of intangible assets 
Determining whether goodwill is impaired requires an estimation of future cash flows expected to arise and the selection of a suitable 
discount rate in order to calculate the present value of these cash flows. In support of the assumptions, management uses a variety of 
sources including third party published reports and knowledge from discussions with partners and potential partners in both the supply 
and distribution channels as set out in note 12.
Discount rate on intangible assets 
Management have exercised judgment in selecting the appropriate discount rate for application against intangible assets, in particular in 
relation to the exclusion of market returns between 2008 and 2009 due to economic conditions, and have selected 8.80% to represent 
the best estimate of the current cost of capital for the Group, see note 12.
Share based incentive arrangements and warrants 
Share based incentive arrangements are provided to management and certain employees. These are valued at the date of grant using the 
Black-Scholes option pricing model and management have to exercise judgment over the likely exercise period, interest rate and share 
price volatility. Management uses various sources of information including its own share price performance, or where there is insufficient 
history the performance of comparable listed entities, experience from the historical exercise of options and published data on bank  
base rates. 
During the year the Group has issued shares to its former broker for services rendered up to June 2009. These share based payments 
have been valued at the fair value of the services received and are charged to the Income Statement with a corresponding credit to equity. 
The Group appointed Ambrian Partners Limited as broker and Nominated Advisor from 6 July 2009 and associated fees will be settled  
in cash.  22 V P hase plc
Group Financial Statements for the year ended 31 December 2009
Notes to the Group Financial Statements continued
for the year ended 31 December 2009
2. Summary of significant accounting policies continued
In 2008, the Group issued warrants to its then broker as part of agreed placing costs. These warrants have been valued at the fair  
value of the services received based upon the Black-Scholes option pricing model and are charged against the share premium account 
(as set out in note 19.2). 
Taxation 
Management have not provided for deferred tax in relation to unrelieved tax losses as the recoverability is currently uncertain. 
Critical accounting judgments 
Amortisation of development assets 
Development costs capitalised, which form part of the Group’s intangible assets, are amortised on a straight line basis over 60 months 
starting from the point that those products resulting from the development activity commence mainstream sales. Mainstream sales 
commenced in September 2009 and consequently, amortisation of these development costs began from this date.
2.4 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 Energetix Voltage Control 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. 
Where necessary, adjustments are made to the Financial Statements of subsidiaries to bring their accounting policies into line with those 
used by other members of the Group. 
Inter-company 
Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Accounting 
policies of the subsidiaries have been established to ensure consistency with the policies adopted by the Group. 
2.5 Intangible assets 
The carrying values of intangible assets, including those which are not yet available for use, are tested for impairment at least annually  
or when events or changes in circumstances indicate that the carrying amount may not be recoverable. 
Development costs capitalised (note 2.12), which form part of the Group’s intangible assets, are amortised on a straight line basis  
over a period not exceeding 15 years starting from the point that those products resulting from the development activity commence 
mainstream sales. Mainstream sales commenced in September 2009 and consequently, amortisation of these development costs began 
from this date. Amortisation charges are recognised in the Group Income Statement within administrative expenses.
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. The impairment review of intangible assets is analysed  
in note 12. 
2.6 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: 
– 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.  23 V P hase plc
Group Financial Statements for the year ended 31 December 2009
2.7 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 
recognised in these Group Financial Statements. 
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 
Amounts owed by the parent undertaking and other receivables that have fixed or determinable payments that are not quoted in an active 
market are classified as loans and receivables. Loans and receivables are measured 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 Balance Sheet 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. 
2.8 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. 
2.9 Trade payables 
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. 
2.10 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.
2.11 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 are 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. •	 24 V P hase plc
Group Financial Statements for the year ended 31 December 2009
Notes to the Group Financial Statements continued
for the year ended 31 December 2009
2. Summary of significant accounting policies continued
2.12 Research and development 
Research costs are charged against income as incurred. Certain development costs are capitalised when they meet the criteria discussed 
below. 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 at each Balance Sheet date or 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.
The criteria for recognising expenditure as an asset are: 
completion of the intangible asset is technically feasible so that it will be available for use or sale; •	
the Group intends to complete the intangible asset and use or sell it; •	
the Group has the ability to use or sell the intangible asset; •	
the intangible asset will generate probable future economic benefits. Among other things, this requires that there is a market for the •	
output from the intangible asset or for the intangible asset itself, or, if it is to be used internally, the asset will be used in generating such 
benefits;
that the Group has available to it adequate technical, financial and other resources to complete the development and to use or sell the •	
intangible asset; and
that the Group can reliably measure the expenditure attributable to the intangible asset during its development. •	
The cost of an internally generated intangible asset comprises all directly attributable costs necessary to create, produce, and prepare the 
asset to be capable of operating in the manner intended by management. Directly attributable costs include employee (other than 
Directors) costs incurred on technical development, testing and certification, materials consumed and any relevant third party costs. 
However, until completion of the development project, the assets are subject to impairment testing only. 
Careful judgment by the Directors is applied when deciding whether the recognition requirements for development costs have been met. 
The Group have commenced mainstream product sales and any further development expenditure relating to these products will be 
expensed in the Income Statement. Development expenditure relating to future VPhase products will be capitalised/expensed as 
appropriate following careful judgment by the Directors. This is necessary as the economic success of any product development is 
uncertain and may be subject to future technical problems at the time of recognition. Judgments are based on the information available 
at each Balance Sheet date which includes progress with field trials, testing and certification and progress on, for example, establishment 
of commercial arrangements with third parties. In addition, all internal activities related to research and development of new products are 
continuously monitored by the Directors. 
2.13 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 Balance Sheet date. 
2.14 Deferred tax 
Deferred income taxes are calculated using the liability method on temporary differences. Deferred tax is generally provided on  
the difference between the carrying amounts of assets and liabilities and their tax bases. Deferred tax is not provided on the initial 
recognition of goodwill, or on the initial recognition of an asset or liability unless the related transaction is a business combination  
or affects tax or accounting profit. Tax losses available to be carried forward as well as other income tax credits to the Group are assessed 
for recognition as deferred tax assets. 
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 Balance Sheet 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 equity (such as the revaluation of land) in which case the related deferred tax is also 
charged or credited directly to equity.  25 V P hase plc
Group Financial Statements for the year ended 31 December 2009
2.15 Employee benefits 
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 with the Group issues equity-settled share-based payments to certain employees (including Directors).
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 and excludes the impact of non-market vesting 
conditions (for example profitability and sales growth targets). 
Share options are valued at the date of grant using the Black-Scholes option pricing model 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 is allocated over the vesting period based on the best 
available estimate of the number of share options expected to vest. Estimates are subsequently revised if there is any indication that the 
number of share options expected to vest differs from previous estimates. 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. 
Upon exercise of share options the proceeds received net of attributable transaction costs are credited to share capital and where 
appropriate share premium account. 
Bonus plans 
The Group operates discretionary staff bonus schemes for its employees and Directors paid in cash. The maximum annual bonus payable 
under the scheme is 100% of the relevant employee’s basic annual salary (plus social security costs). Payments in excess of 10% of an 
employee’s basic salary can be settled by the allocation of equity at the Company’s discretion. 
2.16 Other share based payments 
Warrants relating to the Company’s placing and admission to AIM have been provided to certain third parties. Warrants are fair valued  
at the date of grant using the Black-Scholes option pricing model and are charged to share premium with a corresponding credit to 
‘warrant reserve’. 
During the year the Group has issued shares to its former broker for services rendered up to June 2009. These share based payments 
have been valued at the fair value of the services received and are charged to the Income Statement with a corresponding credit to equity. 
The Group appointed Ambrian Partners Limited as broker and Nominated Advisor from 6 July 2009 and associated fees will be settled  
in cash. 
2.17 Adopted IFRS not yet applied 
IAS 27 Consolidated and Separate Financial Statements (Revised 2008) (effective from 1 July 2009)
The revised standard introduces changes to the accounting requirements for the loss of control of a subsidiary and for changes in the 
Group’s interest in subsidiaries. These changes will be applied prospectively in accordance with the transitional provisions and so do not 
have an immediate effect on the Group’s financial statements.
IFRS 3 Business Combinations (Revised 2008) (effective from 1 July 2009)
The standard is applicable for business combinations occurring in reporting periods beginning on or after 1 July 2009 and will be applied 
prospectively. The new standard introduces changes to the accounting requirements for business combinations, but still requires use of 
the purchase method, and will have a significant effect on business combinations occurring in future reporting periods.
2.18 Inventories
Inventories are stated at the lower of cost and net realisable value. Costs of ordinarily interchangeable items are assigned using the first 
in, first out cost formula. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion 
and costs necessary to make the sale.  26 V P hase plc
Group Financial Statements for the year ended 31 December 2009
Notes to the Group Financial Statements continued
for the year ended 31 December 2009
3. Segmental information 
In identifying its operating segments, management generally follows the Group’s service lines, which represent the main products provided 
by the Group. There is only one product sold by the Group being a voltage control device. Consequently, management have identified one 
segment; energy efficiency, and as such no segmental information is provided.
The Group currently operates entirely within the United Kingdom, consequently the Group does not report information about geographical 
areas to its chief operating decision maker.
During the year ended 31 December 2009, £97,000 or 78% of the Group’s revenues depended on a single customer. Management note 
that as commercial operations develop this concentration will diminish.
4. Loss before income tax 
Loss before income tax is attributable to the principal activity of the Group, which is carried on entirely in the United Kingdom. All costs 
originate from continuing operations. 
       2009 2008 
       £’000 £’000
Depreciation (note 13)       26 5
Amortisation (note 12)       27 –
Employee benefit expense (note 7)       341 567
Research costs       15 25
Inventories recognised as an expense       20 –
Other share based payments expense       25 80
Audit remuneration:
– fees payable to Company auditors for the audit of Parent Company and Group Financial Statements  11 11
Non-audit services:
– other services pursuant to legislation       3 3
– tax services       3 –
Other services pursuant to legislation relate to the interim review (2008: £3,000). 
During the year, the Group has issued shares to its former broker for services rendered up to June 2009. These shares have been valued 
at the fair value of the services received and are charged to the Income Statement with a corresponding credit to equity. The Group 
appointed Ambrian Partners Limited as broker and Nominated Advisor from 6 July 2009 and associated fees will be settled in cash.
5. Finance income 
       2009 2008 
       £’000 £’000
Loans and receivables (including cash and cash equivalents)      11 84
6. Directors’ remuneration
       2009 2008 
       £’000 £’000
Directors’ emoluments
Aggregate emoluments       220 360
Paid as follows:
Emoluments       171 243
Share based payments       49 107
Payments made to third parties       – 10
       220 360 27 V P hase plc
Group Financial Statements for the year ended 31 December 2009
Highest paid Director
The above includes remuneration of the highest paid Director as follows:
       2009 2008 
       £’000 £’000
Emoluments       110 117
Share based payments       49 107
       159 224
The key management of the Group is the same as the Board of Directors. 
7. Employee benefit expense 
       2009 2008 
       £’000 £’000
Wages and salaries       258 412
Social security costs       34 48
Share based payments       49 107
       341 567
Average number of persons employed:
       2009 2008 
       No No
Finance and administration       5 3
Research and development       3 3
       8 6
8. Share based payments 
The Group grants options over the ordinary shares of the Company at not less than the market value of the Company’s ordinary shares 
on the date of grant. The vesting period is generally three to four years. If the option remains unexercised after a period of ten years from 
the date of grant, the options expire. The Group has no legal or constructive obligation to repurchase or settle the options in cash. The 
movement in the number of share options is set out below: 
       2009 2008 
       No No
Number of outstanding share options at 1 January       15,603,001 –
Granted during the year       – 15,603,001
Number of outstanding share options at 31 December       15,603,001 15,603,001
As at 31 December 2009, no share options were capable of being exercised. The weighted average exercise price of share options 
outstanding at 31 December 2009 was 1.88 pence (2008: 1.88 pence). No options were exercised, forfeited, expired or lapsed during  
the year. 
The Group uses the Black-Scholes model to fair value the Group’s share options which resulted in a fair value charge of £49,000  
(2008: £107,000) and a corresponding credit to other reserves.  28 V P hase plc
Group Financial Statements for the year ended 31 December 2009
Notes to the Group Financial Statements continued
for the year ended 31 December 2009
8. Share based payments continued 
Assumptions 
The following assumptions are used to determine the fair value of share options at the respective date of grant: 
    Share price    
  Exercise Ordinary at date   Life of Expected 
  price shares of grant Expected Interest option dividends 
Date of grant  (pence) under option (pence) volatility rate (years) (pence)
1 January 2008  1.88 15,603,001 1.88 42.3% 5.50% 3 Nil
The middle market price of ordinary shares on 31 December 2009 was 4.00 pence. The high and low market prices during the year were 
8.50 pence and 3.75 pence respectively. 
Expected volatility is derived from observation of the volatility of the Company’s shares. 
The expected life used in the model has been adjusted based on management’s best estimate, for the effects of non-transferability, 
exercise restrictions and behavioural conditions. 
National insurance is payable on gains made by employees on exercise of share options granted to them. 
Other share based payments 
During the year, the Group has issued shares to its former broker for annual services rendered up to June 2009. These share based 
payments have been valued at the fair value of the services received using the Black-Scholes model, and are charged to the Group 
Income Statement with a corresponding credit to equity. The Group appointed Ambrian Partners Limited as broker and Nominated 
Advisor from 6 July 2009 and fees payable will be settled in cash.
9. Income tax 
       2009 2008 
       £’000 £’000
Current tax:
Prior year adjustment       5 –
The prior year adjustment originates from a tax credit received in cash arising from research and development activities during the financial 
years ended 31 December 2006 and 2007.
The tax on the Group’s loss before tax differs from the theoretical amount that would arise using the weighted average rate applicable
to profits of the consolidated entities as follows:
       2009 2008 
       £’000 £’000
Loss before income tax       (981) (769)
Loss before income tax multiplied by rate of corporation tax in the UK of 28.0% (2008: 28.49%)   (275) (219)
Adjustment for tax rate differences       – 3
Adjustments in respect of prior periods for current tax       (5) –
Adjustment for non-deductible expenses       45 50
Movement in deferred tax not provided       230 166
Current tax       (5) –
Unrelieved tax losses relating to the current trade of £2,003,000 (2008: £993,000) remain available to offset against future taxable trading 
profits. No deferred tax asset has been recognised in respect of the losses, as recoverability is uncertain.  29 V P hase plc
Group Financial Statements for the year ended 31 December 2009
10. Deferred tax 
The unprovided deferred taxation asset calculated at a tax rate of 28% (2008: 28%) is set out below: 
       2009 2008 
       £’000 £’000
Accelerated capital allowances       (3) (1)
Other short-term temporary differences       104 –
Share based payments       (62) (75)
Trade losses       (561) (229)
       (522) (305)
11. Loss per ordinary share 
The loss per ordinary share is based on the loss of £976,000 (2008: loss £769,000) and 700,351,607 (2008: 670,317,974) ordinary shares 
of 0.25 pence each, being the weighted average number of shares in issue during the year. All shares have been included in the computation 
based on the weighted average number of days since issuance. 
       2009 2008
Loss attributable to equity holders of the Company (£‘000)      (976) (769)
Weighted average number of ordinary shares in issue (‘000)      700,352 670,318
Basic and diluted loss per share (pence)       (0.14) (0.11)
The share options and warrants in issue are anti-dilutive in respect of the basic loss per share calculation and have therefore not been 
included. 
12. Intangible assets 
         £’000
Year ended 31 December 2008
Opening net book value        –
Additions        222
Closing net book value        222
Year ended 31 December 2009
Opening net book value        222
Additions        176
Amortisation        (27)
Closing net book value        371
At 31 December 2009
Cost or valuation        398
Accumulated depreciation        (27)
Closing net book value        371
At 31 December 2008
Cost or valuation        222
Accumulated depreciation        –
Closing net book value        222
All additions during the year arise from internal development.
The Group commenced amortisation of the intangible asset in September 2009 as management considered mainstream sales to have 
begun. The asset will be written off over 60 months as the Directors believe that this is a prudent approach given continuing changes in 
market dynamics despite the product having a 20 year life. 30 V P hase plc
Group Financial Statements for the year ended 31 December 2009
Notes to the Group Financial Statements continued
for the year ended 31 December 2009
12. Intangible assets continued
Impairment review
In accordance with IAS 36, the Group has undertaken an impairment review by cash generating unit. The Group determines that there exists 
one cash generating unit and that its cost of capital is: 
Technology    Cost of capital Total intangible carrying value £
Smart Voltage Management unit     8.80%   371,000
Following a review of the business, the Directors do not believe that the carrying value of the intangible asset in VPhase is impaired and, 
hence, no charge has been made. 
Key assumptions 
In determining value in use, forecasts have been prepared for the five years following the Balance Sheet date. These forecasts were 
constructed with: 
the most recent approved forecasts and, where forecasts have not been approved; and •	
prudent extrapolations of the above. •	
Revenues were computed using:
signed commercial agreements; •	
memoranda of understanding with commercial partners; and •	
management’s assertions following discussion with various potential customers. •	
Costs have been calculated using existing cost bases adjusted for achievement of the above revenues. 
Growth rates contained within forecasts are based on management’s assertions following discussions with potential customers and increase 
by various rates throughout the forecasted period. The forecasted value in use period is five years and is based on the Board approved 
forecasts for the period to 31 December 2012 and reasonably possible extrapolations thereon for the following two years. 
The sales growth rate used beyond the forecast period is in excess of GDP. Management asserts that such a growth rate is appropriate  
as the VPhase products are the only products that are presently available to service the domestic energy efficiency market in this way. 
Consequently, once customer adoption begins in earnest, a growth rate significantly in excess of UK GDP is to be expected.
Cost of capital
The Capital Asset Pricing Model (CAPM) has been used to arrive at the cost of capital previously stated.
The components of this calculation were determined as follows:
Risk-free rate: lower range of UK Gilts as provided by the website of the Debt Management Office website (http://www.dmo.gov.uk/).
Market-return rate: taken as the annual return on the ‘Electronics and Electrical Equipment’ sector within AIM for each year from 2 January 
2004 to 31 December 2007. Returns for the 12 months to 31 December 2008 and 2009 have been excluded from the analysis as 
management do not believe the returns generated in these years are representative of the return demanded by investors. Beta: taken from 
MoneyAM (http://www.moneyam.com).
Effect of reasonably possible changes 
Management have undertaken scenario analyses, including a reduction in sales, and in no scenario does the value in use of the cash 
generating unit approach the carrying value. 31 V P hase plc
Group Financial Statements for the year ended 31 December 2009
13. Property, plant and equipment 
        £‘000 
Year ended 31 December 2008 
Opening net book value         1
Additions        76
Depreciation charge        (5)
Closing net book value        72
Year ended 31 December 2009
Opening net book value         72
Additions        15
Depreciation charge        (26)
Closing net book value        61
At 31 December 2009
Cost or valuation        93
Accumulated depreciation        (32)
Closing net book value        61
At 31 December 2008
Cost or valuation        78
Accumulated depreciation        (6)
Closing net book value        72
14. Inventories
       2009 2008 
       £’000 £’000
Components       175  –
Finished goods        200  –
       375  –
In 2009, a total of £20,000 of inventories was included in the Group Income Statement as an expense (2008: £Nil). No write downs have 
incurred during the year and no inventories are pledged as securities for liabilities.
15. Trade and other receivables
       2009 2008 
       £’000 £’000
Trade receivables       4 –
Prepayments        6  –
Amounts owed by the ultimate controlling party       115 74
Other receivables        61 70
        186 144
All amounts are short term. The net carrying value of the above receivables are considered a reasonable approximation of fair value.
The average credit period on sales of goods is 4 days (2008: N/a). No interest is charged on trade receivables.  32 V P hase plc
Group Financial Statements for the year ended 31 December 2009
Notes to the Group Financial Statements continued
for the year ended 31 December 2009
15. Trade and other receivables continued
Before accepting any new customer, the Group uses published credit information to assess the potential customer’s credit quality and 
defines credit limits by customer. 
Included in the Group’s trade receivables balance are receivables with a carrying amount of £Nil (2008: £Nil) which are past due at the 
reporting date. None of the other receivables are past due. 
In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of the trade receivable from 
the date credit was initially granted up to the reporting date. The concentration of credit risk is significant given the low numbers of 
customers that the Group has however although the quantum is not currently considered material credit exposure to the financial 
statements. The Directors do not believe that any credit provision is required at 31 December 2009 (2008: £Nil). 
No impairment loss has been recognised on trade receivables and no other gains or losses have been recognised in respect of loans and 
receivables. The Group does not hold any collateral as security. 
16. Cash and Cash equivalents
       2009 2008 
       £’000 £’000
Cash at bank and in hand       1,677 3,203
17. Trade and other payables 
       2009  2008 
       £’000 £’000
Trade payables        143 39
Amounts owed to the ultimate controlling party        58  57 
Social security and other taxes       16  8
Accrued expenses       49 231
        266  335
All amounts are short term. The carrying values of all payables are considered to be a reasonable approximation of fair value.
18. Financial instruments 
18.1 Capital risk management
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return 
to stakeholders. The Group’s overall strategy remains unchanged from 2008 to minimise costs and liquidity risk. 
At the beginning of 2009, in light of recent bank failures the Group adopted a new treasury policy which sets out to optimise the value from 
surplus cash balances giving priority to security then to liquidity and then to yield; and to preserve the principal value of the investment by 
investing surplus funds only with institutions of a high credit standing. 
The capital structure of the Group consists of cash and cash equivalents of £1,677,000 (2008: £3,203,000) and equity attributable to 
equity holders of the parent comprising issued capital, reserves and retained earnings as disclosed in note 19 and in the Group Statement 
of Changes in Equity. 
The Group manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk 
characteristics of the underlying assets. In order to maintain or adjust the capital structure the Group may in future adjust the amount  
of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets and reduce debt. 33 V P hase plc
Group Financial Statements for the year ended 31 December 2009
18.2 Categories of financial instrument
       2009  2008 
       £’000  £’000
Financial assets 
Loans and receivables (including cash and cash equivalents)      1,792  3,277
Financial Liabilities 
Amortised cost       249  327
The carrying amount reflected above represents the Group’s maximum exposure to credit risk for such loans and receivables. 
For commentary on interest rate risk, credit risk, and liquidity risk please see the financial risk management objectives and policies 
disclosed in the Group Directors’ Report on pages 11 to 14, and the disclosures within this note. 
18.3 Interest rate sensitivity 
The following table illustrates the sensitivity of the loss for the year and equity to a reasonably possible change in interest rates of 1%  
(2008: 2%) with effect from the beginning of the year. These changes are considered to be reasonably possible based on observation of 
current market conditions. The calculations are based on the Group’s cash and cash equivalents held in cash on the Balance Sheet date. 
All other variables are held constant. 
     2009 
|||
 2008
     £’000 £’000 £’000  £’000 
     +1% -1% +2%  -2%
Loss for the year     18 (18) 66  (66)
Equity     18 (18) 66  (66)
18.4 Liquidity risk
Liquidity risk is the risk arising from the Group not being able to meet its obligations. The Group manages its liquidity needs by monitoring 
forecast cash inflows and outflows due in day-to-day business.The data used for analysing these cash flows is consistent with that used 
in the contractual maturity analysis below. Liquidity needs are monitored in various time bands, on a day-to-day and week-to-week basis, 
as well as on the basis of a rolling 30-day projection. Long-term liquidity needs for a 180-day and a 360-day lookout period are identified 
monthly. Net cash requirements are compared to available borrowing facilities in order to determine headroom or any shortfalls. This 
analysis shows that available borrowing facilities are expected to be sufficient over the lookout period.
The Group’s objective is to maintain cash and marketable securities to meet its liquidity requirements for 30-day periods at a minimum. 
Funding for long-term liquidity needs is additionally secured by an adequate amount of committed credit facilities and the ability to sell
long-term financial assets. The Group does not have instruments that include accelerated repayment terms (for example in the event of a 
downgrade in credit rating). 
Contractual maturity analysis 
Contractual undiscounted cash flows in respect of financial liabilities (or outflows in respect of financial assets) are as follows:
     Current 
|||
 Non-current
     Within 6 to 1 to Later than 
     6 months 12 months 5 years 5 years 
     £’000 £’000 £’000 £’000
31 December 2009       
Trade and other payables     266 – – –
31 December 2008    
Trade and other payables     335 – – –
The above amounts correspond to the carrying value of the liabilities at the reporting date.
The Group has no derivative financial liabilities. 34 V P hase plc
Group Financial Statements for the year ended 31 December 2009
Notes to the Group Financial Statements continued
for the year ended 31 December 2009
19. Share capital and reserves 
19.1 Share capital 
 Ordinary
       Number Share 
       of shares capital 
       No. £’000
Authorised  
At 1 January 2008 and 31 December 2009      1,600,000,000 4,000
Issued and fully paid up 
At 1 January 2008      625,120,063 1,563
Shares issued 13 February 2008      1,248,240 3
Shares issued 14 May 2008      70,000,000 175
Shares issued 12 June 2008      1,248,240 3
Shares issued 14 August 2008      1,248,240 3
Shares issued 8 October 2008      1,248,240 3
At 31 December 2008      700,113,023 1,750
Shares issued 5 June 2009       416,666 1
At 31 December 2009      700,529,689 1,751
Issue of shares 
On 13 February 2008, the Company issued 1,248,240 ordinary share of 0.25 pence each at 1.602 pence per share to Novum Securities 
Limited in settlement of broker services received.
On 14 May 2008, the Company issued 70,000,000 ordinary shares of 0.25 pence each via a placing at 5 pence per share. 
On 12 June 2008, the Company issued 1,248,240 ordinary shares of 0.25 pence each at 1.602 pence per share to Novum Securities 
Limited in settlement of broker services received. 
On 14 August 2008, the Company issued 1,248,240 ordinary shares of 0.25 pence each at 1.602 pence per share to Novum Securities 
Limited in settlement of broker services received. 
On 8 October 2008, the Company issued 1,248,240 ordinary shares of 0.25 pence each at 1.602 pence per share to Novum Securities 
Limited in settlement of broker services received. 
On 5 June 2009, the Company issued 416,666 ordinary shares of 0.25 pence each at 1.602 pence per share to Novum Securities Limited 
in settlement of broker services received. 
19.2 Warrants 
On 22 May 2008, the Company granted 3,500,000 warrants with an exercise price of 5 pence to its then broker, as part of the agreed 
placing costs. The warrants outstanding at 31 December 2009 were: 
 Number of warrants   
Date granted  Exercise price (pence) Exercise period
22 May 2008 3,500,000 5 3 years
These warrants are exercisable during a three year period from the date of grant. On exercise each warrant entitles the holder to one  
0.25 pence ordinary share in the Company. 
No warrants were issued during the financial year ended 31 December 2009.
The Group uses the Black-Scholes model to fair value the Group’s warrants which resulted in a total fair value charge of £Nil  
(2008: £105,000). This has been charged against the share premium account and credited to warrant reserve in the period. 
As at 31 December 2009, 3,500,000 warrants were capable of being exercised (2008: 3,500,000). The warrants outstanding at  
31 December 2008 had a weighted average exercise price of 5 pence (2008: 5 pence) and a weighted average remaining contractual life 
of one year and five months. No warrants were exercised during the year.  35 V P hase plc
Group Financial Statements for the year ended 31 December 2009
35 V P hase plc
Group Financial Statements for the year ended 31 December 2009
Assumptions 
The following assumptions are used to determine the fair value of warrants at the respective date of grant: 
     
   Ordinary Share price    
  Exercise shares at date   Life of  
  price under of grant Expected Interest option  Expected 
Date of grant  (pence) warrant (pence) volatility rate (years) dividends
22 May 2008  5.00 3,500,000 6.25 43.2% 5.5% 3 –
The share price at date of grant is the closing price on the day that the warrants were granted. Expected volatility is derived from 
observation of the volatility of the Company’s shares. 
The expected life used in the model has been adjusted based on management’s best estimate, for the effects of non-transferability, 
exercise restrictions and behavioural conditions.
20. Cash consumed by operations
       2009 2008 
       £’000 £’000
Loss before income tax       (981) (769)
Adjustments for:
– Depreciation       26 5
– Amortisation       27 –
– Other income       (11) (84)
– Share based payments (note 7)       49 107
– Other share based payments       25  80
Changes in working capital:
– Increase in inventories       (375) –
– Increase in trade and other receivables       (42) (82)
– (Decrease)/increase in trade and other payables        (69) 303
Cash consumed by operations       (1,351) (440)
21. Related party transactions 
The immediate and ultimate controlling party of the Group is Energetix Group plc. Transactions between the Company and its subsidiaries, 
which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. Details of the 
transactions between the Group and other related parties are disclosed below: 
At 31 December 2009, the net amount owed from Energetix Group plc, its parent undertaking, was £20,000 (2008: amounts owed from 
Energetix Group plc £17,000). 
Within the year, the Group incurred management fees of £218,000 (2008: £60,000) payable to Energetix Group plc. 
The above amounts are unsecured and are repayable on demand. 
Walnut Management (UK) Limited, a company of which Nick Moss is Managing Director, invoiced £65,000 (2008: £42,000)  
including expenses for Non-Executive Director services and marketing consultancy. At 31 December 2009, £5,000 remained outstanding 
(2008: £10,000).  36 V P hase plc
Group Financial Statements for the year ended 31 December 2009
Company Balance Sheet
as at 31 December 2009
   2009 
||||||||||||||||
 2008
    Note £’000 £’000 £’000 £’000
Fixed assets
Investments    25  2,427  2,427
Current assets
Debtors    26 3,384  3,382
Cash at bank and in hand    27 5  1
     3,389  3,383
Creditors: amounts falling due within one year    29 (723)  (384)
Net current assets      2,665  2,999
Total assets less current liabilities      5,092  5,426
Net assets      5,093  5,426
Capital and reserves
Called up share capital    30  1,751  1,750
Share premium account    33  4,486  4,462
Merger relief reserve    34  1,150  1,150
Capital redemption reserve    35  994  994
Warrant reserve    32  105  105
Other reserves    36  129  80
Profit and loss account    37  (3,522)  (3,115)
Shareholders’ funds    38  5,093  5,426
The notes on pages 37 to 43 are an integral part of the Company’s Financial Statements.
These Financial Statements were approved by the Board of Directors and authorised for issue on 23 March 2010 and were signed on its 
behalf by:
Dr Lee Juby   Richard H Smith
Chief Executive Officer  Chief Financial Officer
Company number: 4958332 37 V P hase plc
Group Financial Statements for the year ended 31 December 2009
Notes to the Company Balance Sheet 
22. Principal accounting policies – u K GAAP 
Basis of preparation 
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). 
The principal accounting policies of the Company have remained unchanged from the previous year and are set out below. 
On 25 September 2007, the Company acquired the entire share capital of Energetix Voltage Control Limited. The Company is carrying an 
investment in Energetix Voltage Control Limited of £2,427,000 yet the subsidiary has net liabilities. Management believe that it would not 
show a true and fair view in the Parent Company’s profit and loss account if it were to recognise a provision against the carrying value of 
the investment, since the value of the investment is supported by value in use calculations. Thus, it would not be true and fair to show a 
loss by making an impairment provision.
If a full provision was recognised against the carrying value of the investment, the loss for the year in the Company would increase by 
£2,427,000 to £2,834,000. 
Cash 
Cash comprises cash in hand and deposits repayable on demand, less overdrafts repayable on demand. 
Investments 
Investments are included at cost, subject to any provisions required for a permanent impairment of their value. 
Current tax 
The current tax charge is based on the profit for the year and is measured at the amounts to be paid based on the tax rates and laws 
substantively enacted by the Balance Sheet date. Current and deferred tax is recognised in the profit and loss account. 
Deferred taxation 
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the Balance Sheet date where 
transactions or events have occurred at that date that will result in an obligation to pay more, or a right to pay less or to receive more tax, 
with the following exception; deferred tax assets are recognised only to the extent that the Directors consider that it is more likely than not 
that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted. Deferred tax 
is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which timing differences reverse, based 
on tax rates and laws enacted or substantively enacted at the Balance Sheet date. 
Equity-settled share based payments 
All share based payment arrangements are recognised in the Financial Statements in accordance with FRS 20. 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 payment, 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 and excludes the impact of non-market vesting conditions  
(for example, profitability and sales growth targets).
All equity-settled share based payments are ultimately recognised as an expense in the profit and loss account with a corresponding 
credit to ‘other reserves’. 
If vesting periods or other non-market vesting conditions apply, the expense is allocated over the vesting period, based on the best 
available estimate of the number of share options expected to vest. Estimates are revised subsequently if there is any indication that 
the number of share options expected to vest differs from previous estimates. 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 that have vested are  
not exercised. 
Upon exercise of share options, the proceeds received net of attributable transaction costs are credited to share capital, and where 
appropriate share premium. 38 V P hase plc
Group Financial Statements for the year ended 31 December 2009
Notes to the Company Balance Sheet continued
22. Principal accounting policies – u K GAAP continued 
Other share based payments 
Warrants relating to the Company’s placing and admission to AIM have been provided to certain third parties for services rendered. 
Warrants are valued at the date of grant using the Black-Scholes option pricing model and are charged to share premium with a 
corresponding credit to ‘warrant reserve’. 
In addition, during the year the Company has issued shares to its former broker for services rendered up to June 2009. These share based 
payments have been valued at the fair value of the services received and are charged to the profit and loss account with a corresponding 
credit to equity. The Company appointed Ambrian Partners Limited as brokers and Nominated Advisor from 6 July 2009 and its fees will 
be settled in cash. 
23. Directors’ remuneration
       2009 2008 
       £’000 £’000
Directors’ emoluments
Aggregate emoluments       50 218
Paid as follows:
Emoluments       1 102
Share based payments       49 107
Payments made to third parties       – 10
       50 218
24. Staff numbers and costs
The average number of persons employed by the Company (including Directors) during the period, analysed by category, was 
as follows:
       2009 2008 
       No No
Finance, administration and management       3 3
The aggregate payroll costs of these persons were as follows:
       2009 2008 
       £’000 £’000
Wages and salaries       1 90
Share based payments (including National Insurance)        49 107
Social security costs       – 11
Payments made to third parties       – 10
       50 218
25. Investments 
        £’000
Cost and net book value at 31 December 2009 and 31 December 2008      2,427
The principal investment comprises of shares at cost in the following companies all of whom are registered in England and Wales:
Percentage held     Nominal Value Ordinary Shares
Energetix Voltage Control Limited
1
    100% 1 pence each 13,334
Flightstore Inflight Retailing Limited
1
    100% 1 pence each 2,115,170
FG Employee Trust Company Limited
1
    100% 100 pence each  2
1
 Directly owned subsidiaries  39 V P hase plc
Group Financial Statements for the year ended 31 December 2009
At 31 December the companies had the following capital and reserves:
  2009 
||||||||||
 2008
     Capital and (loss) for Capital and Profit/(loss)  
     reserves the year reserves for the year 
     £’000 £’000 £’000 £’000
Energetix Voltage Control Limited     (698) (717) 19 (460)
Flightstore Inflight Retail Limited     (1,496) – (1,496) (2)
FG Employee Trust Company Limited     (99) – (99) –
26. Debtors
       2009 2008 
       £’000 £’000
Amounts owed by subsidiary companies       3,369 3,365
Other debtors       15 17
       3,384 3,382
27. Cash at bank and in hand
       2009 2008 
       £’000 £’000
Cash at bank and in hand       5 1
Cash raised from the placing of 70,000,000 shares in May 2008 is held within the operating company, Energetix Voltage Control Limited, 
which is a wholly owned subsidiary of VPhase plc. 
28. Deferred taxation
The unprovided deferred taxation asset calculated at a tax rate of 28% (2008: 28%) is set out below: 
       2009 2008 
       £’000 £’000
Trade losses       171 84
Share based payments       62 75
       233  159
Unrelieved tax losses of £611,000 (2008: £302,000) remain available to offset against future taxable trading profits. No deferred tax asset 
has been recognised in respect of the losses as recoverability is uncertain.
29. Creditors – amounts falling due within one year
       2009 2008  
       £’000 £’000
Trade creditors       8 14
Amounts owed to subsidiary undertakings       687 226
Accruals       28 144
       723 384 40 V P hase plc
Group Financial Statements for the year ended 31 December 2009
Notes to the Company Balance Sheet continued
30. Share Capital 
     Ordinary
       Number  Share 
       of shares capital 
       No. £’000
Authorised  
At 1 January 2008 and 31 December 2009       1,600,000,000 4,000
Issued and fully paid up 
At 1 January 2008       625,120,063 1,563
Shares issued 13 February 2008       1,248,240 3
Shares issued 14 May 2008       70,000,000 175
Shares issued 12 June 2008       1,248,240 3
Shares issued 14 August 2008       1,248,240 3
Shares issued 8 October 2008       1,248,240 3
At 31 December 2008       700,113,023 1,750
Shares issued 5 June 2009       416,666 1
At 31 December 2009       700,529,689 1,751
Issue of shares 
On 13 February 2008, the Company issued 1,248,240 ordinary shares of 0.25 pence each at 1.602 pence per share to Novum Securities 
Limited in settlement of broker services received. 
On 14 May 2008, the Company issued 70,000,000 ordinary shares of 0.25 pence each via a placing at 5 pence per share.
On 12 June 2008, the Company issued 1,248,240 ordinary shares of 0.25 pence each at 1.602 pence per share to Novum Securities 
Limited in settlement of broker services received.
On 14 August 2008, the Company issued 1,248,240 ordinary shares of 0.25 pence each at 1.602 pence per share to Novum Securities 
Limited in settlement of broker services received. 
On 8 October 2008, the Company issued 1,248,240 ordinary shares of 0.25 pence each at 1.602 pence per share to Novum Securities 
Limited in settlement of broker services received. 
On 5 June 2009, the Company issued 416,666 ordinary shares of 0.25 pence each at 1.602 pence per share to Novum Securities Limited 
in final settlement of broker services received. 
The Company appointed Ambrian Partners Limited as broker and Nominated Advisor from 6 July 2009 and its fees will be settled  
in cash.
31. Share based payments 
The Company grants options over the ordinary shares of the Company at not less than the market value of the Company’s ordinary shares 
on the date of grant. The vesting period is generally three to four years. If the option remains unexercised after a period of ten years  
from the date of grant, the option expires. The Group has no legal or constructive obligation to repurchase or settle the option in cash.  
The movement in the number of share options is set out below: 
       2009 2008 
       No No
Number of outstanding share options at 1 January       15,603,001 –
Granted during the year       – 15,603,001
Number of outstanding share options at 31 December       15,603,001 15,603,001
As at 31 December 2009, no share options were capable of being exercised (2008: Nil). The weighted average exercise price of share 
options granted during the year was Nil pence (2008: 1.88 pence). No options were exercised during the year. 
The Group uses the Black-Scholes model to fair value the Group’s share options which resulted in a fair value charge of £49,000  
(2008: £107,000) and a corresponding credit to other reserves.  41 V P hase plc
Group Financial Statements for the year ended 31 December 2009
Assumptions 
The following assumptions were used to determine the fair value of share options at the respective date of grant: 
    Share price    
  Exercise Ordinary at date   Life of 
  price shares of grant Expected Interest option Expected 
Date of grant  (pence) under option (pence) volatility rate (years) dividends
1 January 2009  1.88 15,603,001 1.88 42.3% 5.50% 3 Nil
The middle market price of ordinary shares on 31 December 2009 was 4.00 (2008: 6.50) pence. The high and low market prices during 
the year were 8.50 (2008: 9.38) pence and 3.75 (2008: 3.00) pence respectively. 
Expected volatility is derived from observation of the volatility of the Company’s shares. 
The expected life used in the model has been adjusted based on management’s best estimate for the effects of non-transferability, 
exercise restrictions and behavioural conditions. 
National insurance is payable on gains made by employees on exercise of share options granted to them. 
Other share based payments 
In addition, during the year the Company has issued shares to its former broker for annual services rendered up to June 2009. These 
share based payments have been valued at the fair value of the services received and are charged to the profit and loss account with a 
corresponding credit to equity. The Company appointed Ambrian Partners Limited as brokers and Nominated Advisor from 6 July 2009 
and its fees will be settled in cash.  
32. Warrants 
On 22 May 2008, the Company granted 3,500,000 warrants with an exercise price of 5 pence to its then broker, as part of the agreed 
placing costs. The warrants outstanding at 31 December 2008 were: 
      Number of Exercise Exercise 
Date granted      warrants price (pence) period
22 May 2008      3,500,000 5 3 years
These warrants are exercisable during a three year period from the date of grant. On exercise each warrant entitles the holder to one  
0.25 pence ordinary share in the Company. 
The Company used the Black-Scholes model to fair value the Company’s warrants which resulted in a total fair value charge of £Nil  
(2008: £105,000), this has been charged against the share premium account and credited to warrant reserve in the period. 
As at 31 December 2009, 3,500,000 warrants were capable of being exercised (2008: 3,500,000). The options outstanding at 31 December 
2008 had a weighted average exercise price of 5 pence (2008: 5 pence) and a weighted average remaining contractual life of one year and 
seven months. No warrants were exercised during the year. 
Assumptions 
The following assumptions were used to determine the fair value of warrants at the respective date of grant: 
   Ordinary Share price 
  Exercise shares at date   Life of 
  price under of grant Expected Interest option Expected 
Date of grant  (pence) warrant (pence) volatility rate (years) dividends
22 May 2008  5.00 3,500,000 6.25 43.2% 5.5% 3 –
The share price at date of grant was the closing price on the day that the warrants were granted. Expected volatility was derived from 
observation of the volatility of the Company’s shares. 
The expected life used in the model has been adjusted based on management’s best estimate, for the effects of non-transferability, 
exercise restrictions and behavioural conditions.  42 V P hase plc
Group Financial Statements for the year ended 31 December 2009
Notes to the Company Balance Sheet continued
33. Share premium account 
       2009 2008 
       £’000 £’000
At 1 January       4,462 1,369
Shares issued       – 3,325
Shares issued in consideration for services received (note 30)      24 68
Issue of warrants       – (105)
Share issue expenses       – (195)
At 31 December       4,486 4,462
34. Merger relief reserve
       2009 2008 
       £’000 £’000
At 1 January and 31 December       1,150 1,150
Merger relief reserve represents the premium on the shares issued to acquire Energetix Voltage Control Limited.
35. Capital redemption reserve 
       2009 2008 
       £’000 £’000
At 1 January and 31 December       994 994
36. Other reserves
       2009 2008 
       £’000 £’000
At 1 January       80 (27)
Share based payments       49 107
At 31 December       129 80
Employee share ownership plan 
Flightstore Group plc established an employee share ownership trust under a trust deed dated 3 December 2003. FG Employee Trust 
Company Limited is a trustee of the trust. 
The purpose of the FG Employee Trust Company Limited is to hold shares in the Company on behalf of the trust for the benefit of the 
employees, including Executive Directors, in satisfaction of their options under the Flightstore Group plc’s Employees Share Option 
Scheme. All rights to dividends have been waived. 
Following the capital reorganisation the nominal value of the shares held by the FG Employee Trustee Company Limited is £2,000, 
representing less than one per cent of called up share capital at 31 December 2006. The maximum number of shares held by FG Employee 
Trustee Company Limited during 2009 was 179,653  (2008: 179,653). 
At 31 December 2009, 179,653  (2008: 179,653) shares in Flightstore Group plc were held by FG Employee Trustee Company Limited. 
The market value of these shares at 31 December 2009 was £7,000 (2008: £12,000). 
In compliance with UITF 38 Accounting for ESOP Trusts, Company shares at a cost of £47,000 (2008: £47,000) held by FG Employee 
Trustee Company Limited have been included in the Group and Company Balance Sheets as a reduction in shareholders’ funds. A cash 
balance held by FG Employee Trustee Company £2,000 (2008: £2,000) has also been aggregated into the Group and Company 
Balance Sheet. Flightstore Group plc’s £2 investment in FG Employee Trustee Company Limited has been eliminated on consolidation. 
The Flightstore Group plc Employees Share Option Scheme was approved by the shareholders on 7 September 2004 and no options 
have been granted under the scheme.  43 V P hase plc
Group Financial Statements for the year ended 31 December 2009
37. Profit and loss account 
The Company has taken advantage of section 408 of the Companies Act 2006 and has not included its own profit and loss account in 
these Financial Statements. The Parent Company’s loss for the year was £407,000 (2008: loss £502,000). 
       2009 2008 
       £’000 £’000
At 1 January       (3,115) (2,613)
Loss for the year       (407) (502)
At 31 December       (3,522) (3,115)
38. Shareholders’ funds
       2009 2008 
       £’000 £’000
Loss for the year       (407) (502)
Shares issued in the year, net of expenses       25 3,280
Issue of warrants        – 105
Share based payments       49 107
(Decrease)/Increase in shareholders’ funds        (333) 2,990
Shareholders’ funds at 1 January       5,426 2,436
Shareholders’ funds at 31 December       5,093 5,426
39. Related party transactions 
The immediate and ultimate controlling party of the Company is Energetix Group plc. 
At 31 December 2009, the net amount owed from Energetix Group plc, its parent undertaking, was £20,000 (2008: amounts owed from 
Energetix Group plc £17,000). 
Within the year, the Group incurred management fees of £218,000 (2008: £60,000) payable to Energetix Group plc. 
The above amounts are unsecured and are repayable on demand. 
Walnut Management (UK) Limited, a company of which Nick Moss is Managing Director, invoiced £65,000 (2008: £42,000) including 
expenses for Non-Executive Director services and marketing consultancy. At 31 December 2009, £5,000 remained outstanding 
(2008: £10,000).  44 V P hase plc
Group Financial Statements for the year ended 31 December 2009
Directors, Secretary and Advisors to the Group
Company registration number
4958332 
Registered office
Steam Packet House
76 Cross Street
Manchester
M2 4JU 
Principal place of business
Capenhurst Technology Park
Capenhurst
Chester 
CH1 6EH 
Directors
A C Hutchings (Executive Chairman)
Dr L Juby (Chief Executive Officer)
R H Smith (Chief Financial Officer)
N A Moss (Non-Executive Director)
Company Secretary
P M Barry 
Steam Packet House
76 Cross Street
Manchester
M2 4JU
Nomad and Broker
Ambrian Partners Limited
Old Change House 
128 Queen Victoria Street 
London
EC4V 4BJ
Bankers
HSBC Bank plc
Chester & Deeside Commercial Centre
Vista
St David’s Park
Ewloe
Flintshire
CH5 3RX
Solicitors
Atticus Legal LLP
Steam Packet House
76 Cross Street
Manchester
M2 4JU
Independent Auditors
Grant Thornton UK LLP
Registered Auditors
Chartered Accountants
4 Hardman Square
Spinningfields
Manchester
M3 3EB
Public Relations Advisors
Abchurch Communications Limited
100 Cannon Street
London
EC4N 6EU
Registrars
Neville Registrars Limited
Neville House
18 Laurel Lane
Halesowen
West Midlands
B63 3DA VPhase plc is a subsidiary of 
Energetix Group plc and was 
admitted to AIM in 2007.
VPhase plc specialises in Domestic Voltage 
Optimisation and is selling the first product 
developed from its technology platform, 
with further plans for a range of products  
to reduce energy used in homes and  
small businesses. 
Welcome to VPhase
Contents
01 Highlights 
02 Case Studies 
04 Chairman’s Statement 
06 Chief Executive’s Review 
08 Finance Review 
09 Corporate Responsibility
10 Board of Directors 
11 Group Directors’ Report 
15 Independent Auditor’s Report 
16 Group Income Statement 
17 Group Statement of Changes in Equity 
18 Group Statement of Financial Position 
19 Group Statement of Cash Flows 
20 Notes to the Group Financial Statements
36 Company Balance Sheet 
37 Notes to the Company Balance Sheet 
44 Directors, Secretary and Advisors to the Group VPhase plc Group Financial Statements
for the year ended 31 December 2009 
VPhase plc Group Financial Statements for the year ended  31 December 2009 
VPhase plc
Capenhurst Technology Park
Chester
CH1 6EH
T. 0151 348 2100
F. 0151 348 2101
E: info@vphaseplc.com
www.vphaseplc.com