b'Notes to the consolidated financial statements continuedFor the year ended 31 March 202029. Financial risk managementIn its normal course of business, the Group uses certain financial instruments including cash, trade and other receivables and equity investments. The Group is exposed to a number of risks through the performance of its normal operations. These are discussed in more detail in the Strategic Report on pages 52 to 55 of this Annual Report.Categories of financial instrumentsThe Group recognises financial instruments in its financial statements when it enters into a binding agreement to receive cash or other economic benefits and derecognises them once all parties to the agreements have discharged all of their obligations. The description of each category of financial asset and financial liability and the related accounting policies are shown below. Prior to the adoption of IFRS 9 and in accordance with IAS 39, the financial assets and liabilities were classified as FVTPL or as loans and receivables. The carrying amounts have not changed on adoption of IFRS 9. The carrying amounts of financial assets and financial liabilities in each category are as follows:Amortised FVTPL cost Total000 000 000As at 31 March 2020Financial assetsLong-term financial assets 87,47187,471Trade and other receivables383 383Cash and cash equivalents24,438 24,438Short-term liquidity investments6,125 6,125Short-term financial assets30,946 30,946Total financial assets 87,471 30,946 118,417Financial liabilitiesTrade and other payables(1,637) (1,637)Lease liabilities(591) (591)Total financial liabilities(2,228) (2,228)FVTPL Amortised cost Total000 000 000As at 31 March 2019Financial assetsLong-term financial assets 87,65987,659Trade and other receivables389 389Cash and cash equivalents25,210 25,210Short-term liquidity investments5,188 5,188Short-term financial assets30,787 30,787Total financial assets 87,659 30,787 118,446Financial liabilitiesTrade and other payables(1,000) (1,000)Total financial liabilities(1,000) (1,000)Financial risk management objectivesThe Groups main objective in using financial instruments is to create, fund and develop technology businesses through the raising and investing of capital for this purpose. The Groups policies in calculating the nature, amount and timing of investments are determined by forecast future investment activity. Financial risks are usually grouped by risk type, being: market, liquidity and credit risk. These risks are identified more fully below.Market riskPrice riskThe Group is exposed to price risk in respect of equity rights and equity investments held by the Group and classified on the balance sheet at fair value through profit or loss. The Group seeks to manage this risk exposure, while optimising the return on risk, by routinely monitoring the performance of these investments, employing stringent investment appraisal processes. Unquoted equity investments are valued in line with the Groups accounting policy as outlined in note 1 to these consolidated financial statements. Regular reviews of the financial results, combined with close contact with the management of these investments, provide sufficient information to support these valuations, and regular reports are made to the Board on the status and valuation of investments.Interest rate riskThe Group holds no interest-bearing borrowing and, as such, has fully mitigated such a risk.Liquidity riskCash and cash equivalents include cash in hand and deposits held with UK banks with original maturities of less than three months.Short-term liquidity investments comprise deposits with a maturity of over three months but less than 12 months, also with UK banks.Ultimate responsibility for liquidity risk management rests with the Directors, who have established an appropriate liquidity risk management framework for the management of the Groups short, medium and long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate cash reserves, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.98 Mercia Asset Management PLCAnnual Report and Accounts 2020'