b"Chief Financial Officers review continuedPlacing of 120,000,000 shares raising 30.0million gross proceeds (Placing)On 3 December 2019 Mercia announced a conditional placing of, in aggregate, 120,000,000 Placing shares at 25.0 pence per Placing share. Shareholders overwhelmingly approved the Placing at a General Meeting held on 20 December 2019 and the new shares were admitted to trading on AIM on 23 December 2019. Placing commission and related expenses totalled 1.9million gross.The net proceeds of the Placing were used to fund the cash component of the initial consideration and related transaction expenses in respect of the acquisition of NVM's VCT fund management business. In addition, the proceeds provide further balance sheet capital to enable the Group to continue to selectively invest in its existing balance sheet direct investments, as well as new direct investments which currently sit within its third-party managed funds, that are expected to deliver attractive returns in the future.Acquisition of the VCT fund management business of NVM Private Equity LLPOn 23 December 2019 Mercia completed the acquisition of the VCT fund management business of NVM Private Equity LLP, which consisted of the acquisition of three fund management contracts ('the Northern VCT contracts') and the transfer of NVM's VCT investment team, for a total maximum consideration of 25.0million, comprising a combination of cash and new Ordinary Mercia shares. The initial consideration was 16.6million, comprising 12.4million in cash which was satisfied on completion and 4.2million which was satisfied by the issue of 16,800,000 initial consideration shares at a price of 25.0 pence per share, being the same as the Placing price. The initial consideration shares were admitted to trading on AIM on 27 December 2019.Deferred consideration of up to 8.4million will also be payable, contingent upon certain conditions being met. The deferred consideration comprises 6.3million in cash, payable in three equal instalments on the first, second and third anniversaries of completion, provided that no termination notice has been served by any of the three Northern VCTs before each respective anniversary payment date, and 2.1million payable in new Ordinary Mercia shares. 50% of the deferred consideration shares will be payable if the Group has received at least 16.0million of fees in respect of the VCT fund management contracts during the three years post completion. The remaining 50% of the deferred consideration shares will be allotted and issued if, during the same three-year period, the three Northern VCTs collectively raise at least 60.0million in new capital. If either or both of these conditions are met, the number of new Ordinary shares to be issued to satisfy the deferred share consideration will be calculated based on the average of the daily closing mid-market price for an Ordinary Mercia share, for each of the five days immediately preceding the date of issue.Summarised consolidated financial statementsThe consolidated financial statements for the year ended 31 March 2020 summarised below include just over three months of trading for the acquired business, which has been integrated within Mercia during the first 100 days of ownership. Summarised consolidated statement of comprehensive incomeYear ended Year ended31 March 31 March2020 2019000 000Revenue 12,747 10,675Other administrative expenses (12,661) (12,115)Net revenues/(expenses) 86 (1,440)Fair value movements in investments (15,844) 3,916Share-based payments charge (528) (171)Amortisation of intangible assets (852) (301)Operating (loss)/profit before exceptional items (17,138) 2,004Exceptional items (695) Net finance income 220 562Taxation 159 54(Loss)/profit and total comprehensive (loss)/income for the financial year (17,454) 2,620Basic and diluted (loss)/earnings per Ordinary share (pence) (5.11) 0.86Notwithstanding the near-term impact of COVID-19 on direct portfolio fair values, Mercia continues to have strong liquidity, is now operating profitably (before fair value movements, realised gains and all non-cash charges) and has a direct investment portfolio from which to drive future increases in both earnings per share and net asset value per share.Revenue increased 19.4% to 12.7million (2019: 10.7million). The Groups revenue increase was largely due to the post-acquisition contribution of the acquired VCT fund management business.Staff and administrative expenses increased by 4.5% to 12.7million (2019: 12.1million). The overall increase in these costs was due to the inclusion of the post-acquisition operating costs of the acquired VCT fund management business.Net revenues increased by 1.5million compared with 2019 (net expenses) largely, although not exclusively, as a result of theoverall post-acquisition contribution of the VCT fund management business.During the year, the Group invested 17.5million (2019: 19.4million) into 17 existing and one new direct investment (2019: 15 and two respectively). It also received investee company loan repayments totalling 1.8million (2019: 1.7million). Direct investment momentum has been positive at the start of the new financial year and is expected to selectively continue into both existing and new direct investments.48 Mercia Asset Management PLCAnnual Report and Accounts 2020"