b'Annual Report & Accounts 2022 Mercia Asset Management PLC 45Strategic reportRisk Possible consequences MitigationThe continuing risk ofStaff welfare issues, due to directMercias existing investment in IT systems and the COVID-19 pandemicillness, family illness and/orconnectivity allowed staff to move seamlessly to remote affecting staff,bereavement. Potential mentalworking and for operational activities to continue.operational services tohealth impacts, due to isolation,Staff welfare is kept high on the agenda of the Executive portfolio companies andlack of available support fromTeam with morale being maintained using Zoom and business development.friends and family. Slack for meetings, social interaction and to support Market falls and risks toResultant impact on the operationalinformation sharing. Staff have been provided with portfolio companies affectefficiency of the Group. opportunities for antibody and virus testing prior to valuations and net assetmore widespread testing being in place and have been values, which impactRisk to the valuation of funds andoffered free counselling for any mental health issues asset price-related fundVCT portfolios managed by Merciaarising during lockdown. Mercia has recognised the management revenues. regulated entities, as well as generalimpact of staff juggling work and childcare, including Potential impact onmarket pressures impacting onhome-schooling, and has supported staff with a culture portfolio companiesdirect investment fair values. of trust and flexibility, to which our staff have responded individually, leadingIncreased risk of portfolio valuationby continuing to deliver our priorities and objectives. The to failures and loss ofreductions and/or failures, and theGroup has recently moved to three days in the office for all revenues and shareholderconsequent reduction in revenuesoperational staff. Investment staff are now resuming face-value as a consequence. from fund management contractsto-face meetings and attending investee board meetings, and portfolio companies. investment conferences and networking events in person.Opportunity loss, where remotePortfolio valuations have remained under regular review working reduces the abilityand fair values amended where required. We have to source and assess neworganised briefings and webinars to assist portfolio opportunities for investment. companies and have made use of existing forums such as a Mercia Slack channel, exclusively for portfolio company CEOs. We have assisted firms through our Mercia Nucleus-led non-executive director network to strengthen boards and increase resilience to difficult trading conditions. In general, investee company valuations are continuing to recover and asset price linked revenues have stabilised as a result.'