Fiske Regulatory News (FKE)

31 August 2018

Fiske Plc 

('Fiske' or 'the Company')

Final Results and Notice of AGM

Fiske is pleased to announce its final results for the twelve months ended 31 May 2018. Copies of the 2018 Annual Report and Accounts, including the Notice of AGM and Proxy Voting form will be posted to shareholders next week.

In accordance with rule 26 of the AIM Rules for Companies, this information is also available under the Investor Relations section of the Company's website, http://www.fiskeplc.com.

The Annual General Meeting of the Company will be held at Salisbury House, London Wall, London EC2M 5QS on 4 October 2018 at 12.30 pm.

For further information please contact:

• Samantha Harrison, Harrison Clarke Grant Thornton UK LLP (Nominated Adviser)

(tel: 020 7383 5100)

• Gerard Luchini, Fiske Plc - Compliance Officer

(tel: 020 7448 4700)

Chairman's Statement

Trading

We are pleased to report an increase in revenues of 30% to £4.38m (2017: £3.37m) following what has been a significant year of progress with the acquisition of Fieldings Investment Management ('Fieldings') in August 2017. The clients of Fieldings are being migrated onto the Fiske plc platform.

In recent years, investment management fees have formed a steadily increasing proportion of our total revenues. In the year to May 2018 there has been a step change with an 89% increase from 2017 in investment management fees which now comprise 42% of our total revenues (2017: 29%). A large proportion of the increase has come from the acquisition of Fieldings which contributed to the Group results for three quarters of the year. In addition there was a general market appreciation of our assets under management and the continued migration of clients to a fee based charging structure. In parallel our commission revenues rose by 10% to £2.45m (2017: £2.23m).

The Fieldings personnel have been integrated into our offices and this has enabled much better utilisation of fixed overheads. This has resulted in a further improvement in our profitability for the year to May 2018 with a rise in our pre-tax profits to £464,000 (2017: £31,000).

In line with current accounting policies relating to the amortisation of intangible assets attributed to customer relationships, in this case Fielding's clients, we have taken a charge of £131,000 (2017: nil) in the year.

Asset Management

During the year we invested in the launch, in May 2018, of our first UCITS fund 'Ocean UK Equity'. The fund will invest predominantly in shares of companies in the UK although has scope, which will be actively used, to invest outside the UK for up to 20% of the fund. Its objective is to achieve a balance of capital and income growth predominantly in a portfolio of high quality companies offering strong and sustainable cash-flows. The dividend yield is estimated to be around 2.75%.

In March 2018 we won an investment management mandate for The Investment Company plc, an investment trust established in 1868. Although this company has an annual continuation vote we are working with the new directors to optimise the prospects for the company.

Investment Managers

In addition to the Fieldings team during the year we welcomed two other investment managers with their clients. We believe that with our traditional values, modern systems and up to date regulatory outlook we provide an attractive place to work for aspiring, independently minded private client investment managers.

Euroclear

We received total dividends from Euroclear of £103,000 (2017: £168,000) during the year. This comprised the main part of the dividend for 2018 along with the withholding tax reclaim on the dividend for 2017. Currency movements over the year have led to a modest appreciation in the carrying value of our Euro denominated holding in Euroclear. We have left the underlying valuation of our holding unchanged. It is currently valued at £2.47 million (2017:£2.44 million) which is a 30% discount to the prevailing Net Asset Value as published by Euroclear.

Balance Sheet

We maintain our strong financial position with a further improvement in our cash balances to £2.45m as at 31 May 2018. This is up from £2.25m as at 30 November 2017 and £1.04m as at 31 May 2017.

Strategy

Following the successful acquisition of Fieldings we continue to implement our ongoing strategy to welcome new portfolio managers with established client relationships to increase our assets under management and advice.

Dividend

The Board has resolved not to pay a second interim dividend for the year ended 31 May 2018.

Regulation

As referred to in the Interim statement, significant time and effort has been and continues to be devoted across the company to the implementation of new regulations. This has focussed in particular on Markets in Financial Instruments Directive II ('MiFID II') which came into force in January 2018 and General Data Protection Regulation (GDPR) which became effective in May 2018. We have upgraded our systems and our staff members have received appropriate training during the year. Most of these software and training related costs, which have been absorbed by the business, are non-recurring. However we will be required to implement the new Senior Managers Certification Regime in 2019 which will require further exceptional costs to be incurred.

Directors

During the year one of our longest standing directors, Alan Meech, retired after 33 years with the company and 29 years as a director. Alan spent nearly 50 years in the market beginning his career as a Blue Button on the London Stock Exchange floor. We wish him a long and happy retirement.

Staff

Following a very busy few years, including the integration of the Fieldings team and their clients into our business, I would like to extend my thanks to all the team for their hard work and commitment to the future success of the Company.

Markets

Since our interim report at the end of February 2018 the FTSE 100 Index has appreciated by a little over 4%. This has been in spite of much over hyped doom and gloom surrounding the Brexit negotiations. However the turmoil in emerging markets sparked off by the problems in Turkey, but ultimately caused by the strength of the US$, is a more serious cause for concern. Substantial US$ debt has accumulated in emerging market economies during an elongated period of easy US monetary policy. This has now reached an all-time peak and with President Trump's aggressive trade policy could be the catalyst that leads to a correction in US, UK and European markets.

In previous reports we have expressed concerns about market levels as we approach the final quarter of the calendar year. We have also highlighted the longevity of the current bull market which we have enjoyed since the financial crisis of 2008/9. These concerns remain very much in the forefront of our present thinking. Whilst a market correction would appear overdue, such events are inherently difficult to time with any precision. However we do feel a growing caution is likely to serve our clients well over the coming months.

Outlook

We anticipate continuing operational and financial efficiencies from the migration of Fieldings clients onto the Fiske platform along with further improvements in the quality of our revenues through the conversion of clients to fee based investment management services. The first quarter of our current financial year to May 2019 has begun in a positive fashion with business levels in line with the year just reported.

Clive Fiske Harrison

Chairman

31 August 2018

Strategic Report

The Directors set out below their Strategic Report on the Company for the year ended 31 May 2018.

Activities and business Strategy

The principal activity of Fiske plc and its subsidiary undertakings is the provision of financial intermediation which consists of private client and institutional stockbroking, and private client investment management. Fiske plc is the trading entity of the Group and is authorised and regulated by the Financial Conduct Authority and is a member of The London Stock Exchange.

The firm's core strategy is to focus on delivering a high quality service to clients. This entails giving both private and institutional clients a personalised service delivered by experienced individuals. The Board intends to maintain a strong balance sheet and to provide clear, unbiased advice to clients.

The firm is capitalised with equity capital, with no debt and does not use financial instruments except its intra-day Crest cap.

Business Review

A combination of market conditions and higher trading volumes resulted in an increase in commissions receivable. The significant increase in investment management fees has materialised as expected as a result of the investment in the firm's IT infrastructure and the acquisition of Fieldings Investment Management.

This increase in revenues combined with the return of operational expenses to normal levels has led to a positive result for the financial year to 31 May 2018.

Financial review and key performance indicators

The firm's activities resulted in a profit before tax of £464,000 compared to a profit of £31,000 in the prior year. No dividends were paid to shareholders in the year.

The results of the Group for the year are set out on page 18 and the Consolidated Statement of Financial Position on page 19.

Future developments

As we have expressed before, the focus of our future growth will be in the area of private client investment management. We believe that we have the expertise to expand in this area and we expect that this will be achieved both organically and by very selective and probably small acquisitions which our strong balance sheet can readily support. This will not only increase our recurring fee income but also our commissions.

Risk management

The Group is exposed to a number of business risks. The risk appetite of the Group is determined by the Board, members of whom are also the principal shareholders. Monitoring of risks applicable to the business is delegated to the Risk Committee whose principal function is to identify and evaluate the key risk areas of the business and ensure those risks can be managed at a level acceptable to the Board.

The Group has identified the following as the key risks and their mitigation:

· Credit risk

Credit risk refers to the risk that a third party will default on its contractual obligations resulting in financial loss to the Group.

Third party receivables consist of customer balances, spread across institutional and private clients. Ongoing credit evaluation is performed on the financial condition of accounts receivable and stock is held until settlement is effected.

The Group does not have any significant credit risk exposure to any group of third parties having similar characteristics.

· Market risk

The Group is mainly exposed to market risk in respect of its trading as agent in equities and debt instruments and in its exposure to counterparties in the market. Market exposure arising from unsettled trades is closely monitored and managed during each trading day.

Market risk also gives rise to variations in asset values and thus management fees, and variations in the value of investments held by Fiske, acting as principal.

· Loss of staff

Staff are a key asset in the business and retaining the services of key staff is essential to ongoing revenue generation and development of the business. All Directors are shareholders in the business with longstanding commitment to its prosperity.

· Operational risk

There is a whole range of operational risks to which the Group is exposed, including reputational risks and the Group seeks to mitigate operational risk to acceptable residual levels, in accordance with its risk appetite policy, by maintenance of its control environment, which is managed through the Group's operational risk management framework. The Group's controls include appropriate segregation of duties and supervision of employees; ensuring the suitability and capability of the employees; relevant training programmes that enable employees to attain and maintain competence, and identifying risks that arise from inadequacies or failures in processes and systems.

The Group has a business continuity and disaster recovery plan which provides, inter alia, back-up premises and back-office systems and which is regularly reviewed.

Pillar 3 disclosures are published on the Company's website at www.fiskeplc.com.

This Strategic Report was approved by the Board of Directors and authorised for issue on 31 August 2018.

Signed on behalf of the Board of Directors

Clive Fiske Harrison

Chairman

Directors' Report

The Directors present their report together with the audited financial statements for the year ended 31 May 2018. The Corporate Governance Statement on page 8 forms part of this report.

Directors' interests - Shares

The Directors who served during the year and to the date of this report and their beneficial interests, including those of their spouses, at the end of the year in the shares of the Company were as follows:

* Including 218,000 (2017: 218,000) shares held by Mrs B Harrison, wife of Mr C F Harrison at the date of this report.

† Including 2,133,802 (2017: 2,133,802) shares held by LongSand Limited, a company controlled by JPQ Harrison and 7,000 (2017: 7,000) shares held by Mrs A Harrison wife of Mr J P Q Harrison at the date of this report.

Directors' interests - Share options

Details of Directors' options over ordinary shares are as follows:

The closing mid-market price of the Company's ordinary 25p shares at 31 May 2018 was 82.5p (2017: 50.0p).

Major shareholdings

Shareholders holding more than 3% of the shares of the Company at the date of this report were:

* Including 15,000 (2017: 15,000) shares held by Mrs J A Cockburn, wife of Mr S J Cockburn at the date of this report

Capital Structure

Details of the authorised and issued share capital, together with details of the movements in the Company's issued share capital during the year are shown in note 22.

The holders of Ordinary Shares are entitled to receive notice of and to attend and vote at any General Meeting of the Company. Every member present at such a meeting shall, upon a show of hands, have one vote. Upon a poll, holders of all shares shall have one vote for every share held. All ordinary shares are entitled to participate in any distributions of the Company's profits or assets.

There are no restrictions on the transfer of the Company's ordinary shares. Fiske plc's ordinary 25p shares are traded solely on the AIM market.

Going Concern

After making due and careful enquiry, the Directors have formed a judgement at the time of approving the financial statements, that there is a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason the Directors continue to adopt the going concern basis in preparing the financial statements as set out in note 1 to the accounts.

Directors' indemnities

The Company has made qualifying third party indemnity provisions for the benefit of its Directors which were renewed during the year and remain in force at the date of this report.

Disclosure of information to auditor

Each of the persons who is a Director at the date of approval of this annual report confirms that:

(i) so far as the Director is aware, there is no relevant audit information of which the Company's auditor is unaware; and

(ii) the Director has taken all the steps that he/she ought to have taken as a Director to make himself/herself aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

This confirmation is given and should be interpreted in accordance with the provisions of Section s418 of the Companies Act 2006.

Auditor

The Directors review the terms of reference for the auditor and obtain written confirmation that the firm has complied with its relevant ethical guidance on ensuring independence. Deloitte LLP provide audit services to the Company and Group as well as tax compliance and advisory services. The Board reviews the level of their fees to ensure they remain competitive and to ensure no conflicts of interest arise.

Deloitte LLP has expressed a willingness to continue in office as auditor and a resolution to reappoint them will be proposed at the forthcoming Annual General Meeting.

Corporate Governance

The Board has given consideration to the code provisions set out in the UK Corporate Governance Code issued, from time to time, by the Financial Reporting Council. Following the revisions to the AIM Rules for Companies in March 2018 pursuant to which all AIM companies will be required to comply with a recognised corporate governance code, the decision has been made by the Company that by 28 September 2018 it will adopt the QCA Code which is believed to be the most appropriate recognised governance code for the Company.

Board Composition

The Board currently comprises five people. The non-executive directors are Martin Perrin and Alexander Fiske-Harrison. The Board considers each non-executive director to be independent in character and judgement. Notwithstanding that Martin Perrin has been non-executive director of Fiske plc for over ten years the Board believes that he takes an independent view of issues concerning the Company and is expected to, and does, challenge executive directors as and when necessary. It is believed that no individual or small group of individuals can determine the Board's decisions.

Biographies of directors are set out at the back of these Report and Accounts immediately prior to the Notice of Annual General Meeting. In proposing retiring directors for re-election at the Annual General Meeting, the Board has considered the skills, experience and contribution of each, as part of an ongoing process.

Board Duties

It is the responsibility of Board members to discharge their duties in the best interests of the Company and to accept their collective responsibility for the long-term success of the Company. The Board, under the leadership of the Chairman, decides the strategic aims of the Company, ensures that the necessary financial and human resources are in place in order to meet the Company's objectives and ensures that obligations to shareholders are met.

Management is responsible for the day-to-day running of the Company, including the terms and conditions of employment; interviewing and hiring of staff; the systems and controls in place to provide a suitable service to our clients (as required by the regulator), and ensuring the firm has sound administrative and accounting procedures in place.

Whilst much of their work is either executed formally within full board metings, or in informal working parties, in line with the provisions of the Corporate Governance Code, the Board has formally established three committees namely the Remuneration and Nomination Committee, Audit Committee and the Risk Committee as described below. The terms of reference of these committees can be viewed on our website at www.fiskeplc.com.

Remuneration and Nomination Committee 

The principal function of this committee is to determine the policy on key executives' remuneration in order to attract, retain and motivate high calibre individuals with a competitive remuneration package. It evaluates the skills, experience, independence and knowledge of current and prospective board members and makes recommendations to the Board as to the composition thereof. The Committee consists of C F Harrison (Chairman), A R Fiske-Harrison and M H W Perrin.

Fiske has not used any external search consultancy nor open advertising in the past appointments of directors. This has been deemed unnecessary as the executive directors are promoted from existing staff members. The non-executive directors are well known to the Company and fulfil the criteria set down by the Nomination Committee.

Remuneration for executives comprises basic salary, a performance-related bonus, share options and other benefits in kind. Full details of Directors' remuneration and share options granted are given in the notes to the financial statements and the Directors' Report.

Audit Committee

The Audit Committee, comprises M H W Perrin (Chairman), C F Harrison and A R Fiske-Harrison. The Committee meets at least twice a year. The committee reviews the Company's external audit arrangements, including the cost-effectiveness of the audit and the independence and objectivity of the external auditor. It also reviews the interim and full year financial statements prior to their submission to the Board, the application of the Group's accounting

policies, any changes to financial reporting requirements and such other related matters as the Board may direct. The external auditor and executive Directors may be invited to attend the meetings.

Given the size of the Company, Fiske does not have an internal audit function.

Risk Committee

The Risk Committee, comprising M H W Perrin (Chairman), C F Harrison and J P Q Harrison, meets at least twice a year. The committee identifies and evaluates the key risk areas of the business and ensures those risks can be managed at a level acceptable to the Board. It makes recommendations to the Board in relation to capital adequacy matters.

Attendance at meetings

 In the year to 31 May 2018, attendance at meetings can be quantified as:

Included in the 12 scheduled Board meetings were 4 special meetings related to formal administration of the acquisition of Fieldings Investment Management Limited where the non-executive directors were not required to attend.

Internal Control

The Board of Directors recognises that it is responsible for the Group's systems of internal control and for reviewing their effectiveness. Such systems, which include financial, operational and compliance controls and risk management, have been designed to provide reasonable, but not absolute, assurance against material misstatement or loss. They include:

· the ongoing identification, evaluation and management of the significant risks faced by the Group;

· regular consideration by the Board of actual financial results;

· compliance with operating procedures and policies;

· annual review of the Group's insurance cover;

· defined procedures for the appraisal and authorisation of capital expenditure and capital disposals; and

· regular consideration of the Group's liquidity position.

When reviewing the effectiveness of the systems of internal control, the Board has regard to:

· a quarterly report from the Compliance Director covering FCA regulatory matters and conduct of business rules;

· the level of customer complaints;

· the prompt review of daily management reports including previous days' bargains, unsettled trades and outstanding debtors;

· the regular reconciliation of all bank accounts, internal accounts and stock positions; and

· Management Committee meetings of Executive Directors for the day-to-day running of the business.

Customers

The Directors set it as a priority that customers and their affairs are well looked after, and customers and their treatment is specifically reviewed at each Board meeting. The Board believes that building good relationships with clients over a sustained period of time creates a better investment environment and basis for the Company's future.

Further information

Shareholders may review more detail on Fiske's Corporate Governance on our website at www.fiskeplc.com.

Directors' Responsibilities Statement

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 are required to prepare the Group financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and have also chosen to prepare the parent company financial statements under IFRSs as adopted by the EU. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. In preparing these financial statements, International Accounting Standard 1 requires that Directors:

· properly select and apply accounting policies;

· present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;

· provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and

· make an assessment of the Company's ability to continue as a going concern.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to 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.

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.

Responsibility statement

We confirm that to the best of our knowledge:

· the financial statements, prepared in accordance with International Financial Reporting Standards as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit or loss of the company and the undertakings included in the consolidation taken as a whole;

· the strategic report includes a fair review of the development and performance of the business and the position of the company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face; and

· the annual report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the company's performance, business model and strategy.

This responsibility statement was approved by the board of directors on 31 August 2018 and is signed on its behalf by:

We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of £4,300, as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We also report to the Committee on disclosure matters that we identified when assessing the overall presentation of the financial statements.

Report on other legal and regulatory requirements

Atif Yusuf FCA (Senior Statutory Auditor)

For and on behalf of Deloitte LLP

Statutory Auditor

London, United Kingdom

31 August 2018

Consolidated Statement of Total Comprehensive Income

For the year ended 31 May 2018

All results are from continuing operations.

Consolidated Statement of Financial Position

31 May 2018

These financial statements were approved by the Board of Directors and authorised for issue on 31 August 2018.

Signed on behalf of the Board of Directors

J P Q Harrison

Chief Executive Officer

Parent Company Statement of Financial Position

31 May 2018

These financial statements were approved by the Board of Directors and authorised for issue on 31 August 2018.

Signed on behalf of the Board of Directors

J P Q Harrison

Chief Executive Officer

Group and Parent Company Statement of Changes in Equity

For the year ended 31 May 2018

Group and Parent Company Statement of Cash Flows

For the year ended 31 May 2018

1

Notes to the Accounts

For the year ended 31 May 2018

1 Accounting policies

General information

Fiske plc is a public limited company incorporated in the United Kingdom and registered in England and Wales, company number 02248663. The address of its registered office and principal place of business are disclosed in the Company Information page of the Financial Statements.

The principal activities of the Company are described in the Strategic Report.

New and revised IFRSs in issue but not yet effective

At the date of authorisation of these financial statements, The Group has not applied the following new and revised IFRSs that have been issued but are not yet effective and had not yet been adopted by the EU:

The directors do not expect that the adoption of the Standards listed above will have a material impact on the financial statements of the Group in future periods, except that IFRS 9 will impact both the measurement and disclosures of financial instruments and IFRS 16 will have an impact on the reported assets, liabilities, income statement and cash flows of the Group. Furthermore, extensive disclosures will be required by IFRS 16. Beyond the information above, it is not practicable to provide a reasonable estimate of the effect of IFRS 9 and IFRS 15 until a detailed review has been completed.

(a) Basis of preparation

These financial statements have been prepared in accordance with the requirements of IFRS implemented by the Group for the year ended 31 May 2018 as adopted by the European Union and International Financial Reporting Interpretations Committee and with the Companies Act 2006. The Group financial statements have been prepared under the historical cost convention, with the exception of financial instruments, which are stated in accordance with IAS 39 Financial Instruments: recognition and measurement. The principal accounting policies are set out below.

(b) Going concern basis

The Group's activities, together with the factors likely to affect its future development, performance and position are set out in the Strategic Report on pages 4 and 5. It also includes the Group's objectives, policies and processes for managing its business risk objectives, which includes its exposure to credit, market and operational risks. The Group continues to hold a substantial cash resource. After making enquiries, the Directors have formed a judgement, at the time of approving the financial statements, that there is a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason the Directors continue to adopt the going concern basis in preparing the financial statements.

(c) Basis of consolidation

The Group financial statements incorporate the financial statements of the Company and subsidiary entities controlled by the Company made up to 31 May each year. Control is achieved where the Company is exposed, or has rights, to variable returns from its involvement with an investee company and has the ability to affect those returns through its power over the other entity; power generally arises from holding a majority of voting rights.

(d) Revenue recognition

The Group follows the principles of IAS 18, 'Revenue Recognition', in determining appropriate revenue recognition policies. In principle, therefore, revenue is recognised to the extent that the economic benefits associated with the transaction will flow into the Group.

· Commission: Commission income and expenses are recognised on a trade date basis.

· Fees: Investment management, administration and corporate finance fees are recognised when earned with retainer fees being recognised over the length of time of the agreement.

· Dividend income: Dividend income is recognised when the right to receive payment is established.

(e) Segment reporting

IFRS 8 requires that an entity disclose financial and descriptive information about its reportable segments, which are operating segments or aggregations of operating segments. Operating segments are identified on the basis of internal reports that are regularly reviewed by the Chief Executive Officer to allocate resources and to assess performance. Using the Group's internal management reporting as a starting point the single reporting segment set out in note 3 has been identified.

(f) Business combinations

The acquisition of subsidiaries is accounted for using the purchase method. The cost of acquisition is measured as the aggregate of the fair values, at the date of exchange, of the assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree's identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 are recognised at their fair value at the acquisition date. As permitted by IFRS 1, the Group has chosen not to restate, under IFRS, business combinations that took place prior to 1 June 2006, the date of transition to IFRS.

(g) Goodwill

Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group's interest in the fair value of the identifiable assets and liabilities of a subsidiary, associate or jointly controlled entity at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any impairment. Goodwill which is recognised as an asset is reviewed for impairment at least annually. Any impairment is recognised immediately and is not subsequently reversed.

For the purpose of impairment testing, goodwill is allocated to each of the Group's cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently where there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying value of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata on the basis of the carrying value of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period.

On disposal of a subsidiary, associate or jointly controlled entity, the attributable amount of goodwill is included in the determination of the profit or loss on disposal. Goodwill arising on acquisitions before the date of transition to IFRSs has been retained at the previous UK GAAP amounts subject to being tested for impairment at that date.

(h) Software and software licences

The direct cost of acquisition of software licences is capitalised (if in relation to a significant installation) and, upon being brought into use, amortised as noted below. The cost of minor licenses, and the cost of deployment and associated costs to implement significant installations are expensed as incurred.

(i) Property, plant and equipment

All property, plant and equipment are shown at cost less subsequent depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of items. Depreciation is charged so as to write off the cost or valuation of assets over their useful economic lives, using the straight-line method, which is considered to be as follows:

Office refurbishment - 5 years

Office furniture and fittings - 4 years

Computer equipment - 3 years

Software - 6 years

The assets' residual values and useful lives are reviewed and, if appropriate, asset values are written down to their estimated recoverable amounts, at each balance sheet date. Gains and losses on disposals are determined by comparing proceeds with the carrying amounts, and are included in the income statement.

(j) Impairment of intangible assets

The Group's policy is to amortise the intangible assets over the life of the contract.

At each balance sheet date, the Group reviews the carrying amounts of its intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value, using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately.

Value attributed to customer base of Fieldings is amortised over 10 years, being the assessed economic life thereof. In line with Group policy, a whole year is charged on initial acquisition.

(k) Available-for-sale investments

Available-for-sale investments are recognised and derecognised on a trade date where a purchase or sale of an investment is effected under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at cost.

At subsequent reporting dates, available-for-sale investments are measured at fair value. Gains or losses arising from changes in fair value are recognised directly in equity, until the security is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously recognised in equity is included in the net profit or loss for the period. Impairment losses recognised in profit or loss are not subsequently reversed through profit or loss.

The fair values of available-for-sale investments quoted in active markets are determined by reference to the current quoted bid price. Where independent market prices are not available, fair values may be determined using valuation techniques with reference to observable market data.

(l) Trade and other receivables

Trade and other receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. The allowance recognised is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.

(m) Investments held for trading

Investments held for trading are measured at market value.

(n) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are readily convertible to known amounts of cash and are subject to insignificant risk of changes in value. Such investments are those with original maturities of three months or less.

(o) Client money

The Company holds money on behalf of clients in accordance with the Client Money Rules of the Financial Conduct Authority. With the exception of money arising in the course of clients' transactions, as disclosed in note 19, such monies and the corresponding liability to clients are not shown on the face of the balance sheet. The amount so held on behalf of clients at the year-end is stated in note 25.

(p) Trade and other payables

Trade and other payables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest rate method. The Group accrues for all goods and services consumed but as yet unbilled at amounts representing management's best estimate of fair value.

(q) Equity instruments

Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.

(r) Dividends

Equity dividends are recognised when paid.

(s) Share-based payments

Where share options are awarded to employees, the fair value of the options at the date of grant is charged to the income statement over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each balance sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. As long as all other vesting conditions are satisfied, a charge is made irrespective of whether the market vesting conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition.

When the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to the income statement over the remaining vesting period. Where equity instruments are granted to persons other than employees, the income statement is charged with the fair value of the goods and services received. There has been no material share options charge to the income statement to date and therefore no disclosure appears in these financial statements.

(t) Taxation

The tax expense represents the sum of the tax currently payable and the deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or 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.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset where there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

(u) Foreign currencies

The individual financial statements of each Group company are presented in the currency of the primary economic environment in which it operates (its functional currency). For the purpose of the Group Financial Statements, the results and financial position of each Group Company are expressed in pounds sterling, which is the functional currency of the Company, and the presentation currency for the Group Financial Statements.

In preparing the financial statements of the individual companies, transactions in currencies other than the entity's functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical costs in a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in profit or loss for the period. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in profit or loss for the period except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised directly in equity. For such non-monetary items, any exchange component of that gain or loss is also recognised directly in equity.

(v) Leases

Rentals payable under operating leases are charged to income on a straight-line basis over the term of the relevant lease. Benefits received and receivable as an incentive to enter into an operating lease are also spread on a straight-line basis over the lease term.

2 Critical accounting judgements and key uncertainties of estimation uncertainty

In the application of the Group's accounting policies, which are described in note 1, the Directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period.

a) Critical judgement - Allowance for bad debts

The Group makes provision for the element of client receivables where and to the extent it believes will not be recovered from clients. This judgement is based on past experience and detailed analysis of the outstanding position particularly with regard to the value of customers' portfolios relative to the amounts owed.

b) Key source of estimation uncertainty - Fair value of investments

The Group currently holds an investment in Euroclear Plc, which is held as an available-for-sale financial asset and measured at fair value at the balance sheet date. The Euroclear Plc shares do not trade in an active market, and therefore fair value is calculated with reference to the most recently published Euroclear Plc financial statements and share buyback information, using a Directors' valuation.

c) Key source of estimation uncertainty - Impairment

The Group tests goodwill and other intangible assets annually for impairment or more frequently if there are indicators that they might be impaired. This requires an estimation of the value in use of the goodwill and other intangible assets. The percentage used to calculate the value for VOR and Ionian was 2.5% of funds under management. Estimating the value in use requires management to make an estimate of the expected future cash flows from the entities from which the goodwill arose and for the intangible assets and to choose a suitable discount rate in order to calculate the present value of cash flows.

The carrying value of intangible assets arising on consolidation at 31 May 2018 was £1,576k (2017: £395k) being made up of £395k (2017:£395k) goodwill and £1,181k (2017: nil) the Fieldings client relationships. No impairment was recognised in the year (2017: nil). The carrying value of other intangible assets at 31 May 2018 was £130k (2017: £144k). Further detail is set out in notes 12 and 13. The directors have concluded that no impairment charge is necessary over and above the amortisation already provided for.

3 Total revenue and segmental analysis

IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by management to allocate resources to the segments and to assess their performance. Following the acquisition of Fieldings Investment Management Limited, their staff and operations have been integrated into the management team of Fiske. Pursuant to this, the Group continues to identify a single reportable segment, being UK-based financial intermediation. Within this single reportable segment, total revenue comprises:

Substantially all revenue in the current and prior year is generated in the UK and derives solely from the provision of financial intermediation.

4 Staff remuneration and costs

Remuneration policies are recommended to the Board by the Remuneration Committee. The Committee consists of C F Harrison (Chairman), A R Fiske-Harrison and M H W Perrin.

Remuneration for executives comprises basic salary, a performance-related bonus, and other benefits in kind, and may include share options. This remuneration takes into account:

· market rates;

· the need to attract, retain and motivate high calibre individuals with a competitive remuneration package;

· comparability across different functions within the firm;

· loyalty and effort; and

· effectiveness.

The FCA's Remuneration Code applies to certain of the firm's staff. As set out in note 5 below Alan Meech received a commission element generated by him and this is usually less than 33% of the total remuneration earned by him though it is not capped as such. All other Code Staff have salaries that are in the main fixed and any performance-related pay reflects a share of a bonus pool available to all employees. This bonus pool reflects the profitability of the firm in that year and is allotted according to merit.

The average number of employees, including Directors, employed by the Company within each category of persons, and their aggregate remuneration was:

Employees', including Directors', costs comprise:

5 Directors' remuneration

(a) Directors' emoluments comprise:

Information regarding Directors' share options is shown under Directors' Interests in the Directors' Report.

The emoluments of the Directors for the current and previous year are as follows:

6 Operating profit

As permitted by Section 408 of the Companies Act 2006, no separate income statement is presented in respect of the parent Company.

7 Finance income

8 Finance costs

9 Tax

Analysis of tax on ordinary activities:

Factors affecting the tax charge for the year

The standard rate of tax for the year, based on the United Kingdom standard rate of corporation tax, is 19.00% (2017: 19.83%).

The charge/(credit) for the year can be reconciled to the profit per the Statement of Comprehensive Income as follows:

10 Share Option Scheme

The Employee Share Option Scheme, which is controlled by Fiske plc held shares to the benefit of employees, waived the entitlement to any dividend on its holding of 9,490 ordinary shares of 25p each (2017: 9,490 ordinary shares of 25p each).

11 Earnings / (loss) per share

Basic earnings per share has been calculated by dividing the profit on ordinary activities after taxation by the weighted average number of shares in issue during the year. Diluted earnings per share is basic earnings per share adjusted for the effect of conversion into fully paid shares of the weighted average number of share options during the year.

12 Intangible assets arising on consolidation

Goodwill arising through business combinations is allocated to individual cash-generating units ('CGUs') being acquired subsidiaries, reflecting the lowest level at which the Group monitors and test goodwill for impairment purposes. The CGUs to which goodwill is attributed are as follows:

Determining whether goodwill is impaired requires an estimation of the recoverable amount of each CGU. The recoverable amount is the higher of its value in use ('VIU') or its fair value less cost of disposal ('FVLCD').

As at 31 May 2018 none of the Group's CGUs are impaired with the recoverable amount for each CGU having been based on its FVLCD. The fair value has been calculated as 2.5 % of assets under management.

Under the above valuation approach each CGU had a FVLCD in excess of its carrying value by £62k at Vor (2017: £67k) and £53k at Ionian (2017: £7k).

An 18% reduction in funds under management for Ionian from £11.3m to £9.2m would result in a potential impairment trigger. Vor is less sensitive to such an impairment trigger requiring a fall of 27% of funds under management from £9.1m to £6.6m.

If fair value was calculated using 2% as opposed to 2.5% of funds under management for Ionian then, all other things being equal, there would be a potential impairment trigger. Vor would require a decrease to 1.8% of funds under management to trigger a potential impairment.

13 Other intangible assets

14 Business Combinations

On 17 August 2017, the Group acquired 100% of the share capital of Fieldings Investment Management Limited for £3,075,000. £2,092,000 of the consideration was paid in cash and £258,000 was discharged through the issue of new ordinary shares in the company. Further consideration is payable depending on the achievements of certain objectives. £725,000 has been provided in the accounts.

As a result of the acquisition, the Group has augmented its investment management team.

The following table summarises the consideration paid for Fieldings and the fair value of assets acquired and liabilities assumed at the acquisition date:

Recognised amounts of identifiable assets acquired and liabilities assumed

Following acquisition a dividend of £1.7m was paid by Fieldings Investment Management Limited to Fiske plc.

Acquisition-related costs of £101,588 have been charged to administrative expenses in the Group Statement of Comprehensive Income for the year ended 31 May 2018.

15 Property, plant and equipment

16 Investment in subsidiary undertakings

The following are the subsidiaries of the Company at 31 May 2018 and at the date of these financial statements.

17 Available-for-sale investments

The investments included above are represented by holdings of equity securities. These shares are not held for trading and are accordingly classified as available-for-sale.

18 Trade and other receivables

Counterparty receivables

Included in the Group's counterparty receivables are debtors with a carrying amount of £55,000 (2017: £90,000) which are past due at the reporting date for which the Group has not provided as there has not been a significant change in credit quality and the amounts were still considered recoverable, and were subsequently recovered.

Ageing of past due but not impaired counterparty receivables:

Trade receivables

Included in the Group's trade receivables balance are debtors with a carrying amount of £318,000 (2017: £278,000) which are past due at the reporting date for which the Group has not provided as there has not been a significant change in credit quality and the amounts were still considered recoverable, and were subsequently recovered.

Ageing of past due but not impaired trade receivables:

19 Investments held for trading

The investments included above are represented by holdings of listed equity securities.

20 Trade and other payables

21 Deferred taxation

Deferred tax assets and liabilities are recognised at a rate which is substantively enacted at the balance sheet date. The rate to be taken in this case is 19%, being the anticipated rate of taxation applicable to the Company in the future.

22 Called up share capital

Included within the allotted and fully paid share capital were 9,490 ordinary shares of 25p each (2017: 9,490 ordinary shares of 25p each) held for the benefit of employees.

At 31 May 2018 there were 325,000 outstanding options to subscribe for ordinary shares at a weighted average exercise price of 60p.

23 Contingent liabilities

In the ordinary course of business, the Company has given letters of indemnity in respect of lost certified stock transfers and share certificates. While the contingent liability arising thereon is not quantifiable, it is not believed that any material liability will arise under these indemnities.

24 Financial commitments

Operating leases

At 31 May 2018 the Group had outstanding commitments for future minimum lease payments under non-cancellable operating leases which fall due as follows: