b'48 Mercia asset Management PLc Annual Report and Accounts 2021Chief Financial Officers review continuedrevenue Revenue 1increased 50.5% to 19,186,000 (2020: 12,747,000) and comprised fund management related fees, initial management fees from investment rounds, investment director monitoring fees and sundry business services income. The majority of the increase was due to the first full-year contribution from the Northern Venture Capital Trust (VCT) fund management business, which was acquired in December 2019.administrative expensesAdministrative expenses 1 , excluding depreciation, increased 25.6% to 15,897,000 (2020: 12,661,000) and comprised predominantly staff-related, office, marketing and professional adviser costs. The majority of the increase was also due to the first full-year incremental operating costs of the acquired VCT fund management business. The increase was lower than might otherwise have been expected due to the pandemics impact on the time taken to recruit additional budgeted staff across the Groups activities, as well as travel-related and other cost savings arising from the prolonged working from home requirements.As Mercias assets under management grow and the financial benefits of operational leverage continue to be realised, the Group will ensure that an appropriate balance is kept between its investment expertise and its support functions capacity and capability, to maintain its control environment and corporate governance culture.net finance incomeGross finance income of 68,000 (2020: 246,000) comprised interest earned on the Groups cash and short-term liquidity investments, in addition to interest received on loans to direct portfolio companies which converted into equity instruments during the year. Finance costs of 20,000 (2020: 26,000) comprised interest payable on office leases. Performance fees and attributable variable compensationPerformance fees and house carried interest can become receivable from certain of the Groups fund management mandates, when pre-determined performance hurdles are exceeded. In the case of the Groups EIS funds, where performance hurdles are exceeded and a performance fee is receivable, a bonus scheme is in place predominantly for those staff involved in the raising, investment and administration of each EIS fund. Performance fees totalling 635,000 (2020: nil) became receivable from four of the Groups EIS funds during the year, as the investment returns each exceeded their performance hurdle. Attributable staff bonuses (including employers National Insurance) totalled 325,000 (2020: nil).During the year, a performance fee totalling 284,000 (2020: nil) was received from Northern Venture Trust PLC based upon the growth in its net asset value per share above a hurdle for the year to 30 September 2020. As at 31 March 2021, performance fees totalling 3,305,000 (2020: nil) became payable from Northern 2 VCT PLC and Northern 3 VCT PLC. Incremental VCT investment team bonuses (including employers National Insurance) totalling 120,000 have also been accrued (2020: nil).Adjusted operating profit excluding net performance fees increased by 2,819,000 to 3,337,000 (2020: 518,000) largely, although not exclusively, as a result of the overall first full year contribution of the acquired VCT fund management business.realised gains on disposal of investmentsDuring the year, realised gains totalling 20,251,000 (2020: nil) arose on the disposal of The Native Antigen Company, Clear Review and OXGENE. On 9 July 2020, Mercia announced the profitable sale of The Native Antigen Company followed by, on 19 October 2020, the profitable sale of Clear Review. The Group recognised realised gains of 1,755,000 and 543,000 respectively.On 1 March 2021, Mercia successfully delivered the strategic objective of evergreening its balance sheet through the profitable sale of OXGENE realising 30,696,000, crystallising a total realised gain for the year as a whole of 17,953,000. This realisation generated a 5x return on Mercias direct investment cost of 6,129,000 and a 51% internal rate of return.The Group also disposed of its investment in Crowd Reactive during the year, recovering its 150,000 holding value.Fair value movements in investmentsYear ended Year ended31 March 31 March2021 2020000 000Investment movements excluding cash invested and realisations:Unrealised gains on the revaluation of investments 10,773 3,351Unrealised losses on the revaluation of investments (685) (19,195)net fair value movement 10,088 (15,844)'