Variable frequency transformer (VFT), introduced recently is a flexible asynchronous ac link which is used in power transferal process between asynchronous power system grids. VFT was first installed at Langlois substation, which interconnects the Hydro-Québec (Canada) and New York (USA) systems. The torque of the rotary transformer is externally altered in order to control the direction and magnitude of power transfer. MATLAB Simulink model of VFT is designed, which is used to indicate power transmission between two asynchronous grids and also to control the power flow direction. MATLAB Simulink model of VFT along with its control system is developed and result has been studied thoroughly. Simulation results for different torque and frequency conditions have been discussed. Moving further, power transfer and torque graphical representations are also obtained and results are compared. Thus, the working concept of VFT and its power flow conditions are verified by MATLAB simulation results.