b'Notes to the consolidated financial statementsFor the year ended 31 March 20201. Accounting policiesThe principal accounting policies applied in the presentation of these consolidated financial statements are set out below. These policies have been consistently applied throughout the year unless otherwise stated.General informationMercia Asset Management PLC (the Group, Mercia) is a public limited company, incorporated and domiciled in England, United Kingdom, and registered in England and Wales with registered number 09223445. Its Ordinary shares are admitted to trading on the AIM market of the London Stock Exchange. The registered office address is Mercia Asset Management PLC, Forward House, 17 High Street, Henley-in-Arden, B95 5AA. Mercia Asset Management PLCs Ordinary shares were admitted to trading on AIM on 18 December 2014.Details of the Groups activities and strategy are given in the Strategic Report which begins on page 1 of this Annual Report.For the financial year ended 31 March 2020 the following subsidiaries of Mercia were entitled to exemption from audit under section 479A of the Companies Act 2006 relating to subsidiary companies:Name Company numberMercia Investments Limited 09108131Mercia Fund 1 General Partner Limited 03676974Mercia (General Partner) Limited 09705072Mercia Investment Plan LP LP016783Mercia Special Limited Partner LP LP016780Mercia VCT Nominee Limited 10552972Enterprise Ventures (General Partner EVF/LEV) Limited 02487876Enterprise Ventures (General Partner HSBC UK Enterprise Fund) Limited 02816740Enterprise Ventures (General Partner HSBC UK European Fund) Limited 03909893Enterprise Ventures (General Partner Coalfields) Limited04585313Enterprise Ventures (General Partner Coalfields Growth) Limited 06354288Enterprise Ventures (General Partner EV Growth) Limited 06354293Enterprise Ventures (General Partner EV Growth II) Limited 10202807Enterprise Ventures (General Partner EVG II North West) Limited 11101233Enterprise Ventures (General Partner FY Seedcorn) Limited 07227779Enterprise Ventures (General Partner Midlands POC) Limited10553329Enterprise Ventures (General Partner NE Venture) Limited 10514693Enterprise Ventures (General Partner NPIF YHTV Equity) Limited 10514398Enterprise Ventures (General Partner NW Development Capital) Limited 07398809Enterprise Ventures (General Partner NW Mezzanine) Limited 08357666Enterprise Ventures (General Partner NW Venture) Limited07397841Enterprise Ventures (General Partner RisingStars) Limited04322437Enterprise Ventures (General Partner RisingStars II) Limited 05713861Enterprise Ventures (General Partner RSGF MPF) Limited08379651EVBL (General Partner SYIF SBF) Limited 05566745EVBL (General Partner FY Small Loans) Limited 07222495EVBL (General Partner EV SME Loans) Limited 08901773EVBL (General Partner NPIF Y&H Debt) Limited 10514387In accordance with section 479C of the Companies Act 2006, Mercia Asset Management PLC will guarantee the debts and liabilities of the above subsidiary undertakings.Basis of preparationThe consolidated financial statements of Mercia Asset Management PLC have been prepared in accordance with European Union (EU) endorsed International Financial Reporting Standards (IFRSs), the IFRS Interpretations Committee (formerly the International Financial Reporting Interpretations Committee (IFRIC)) interpretations, and the Companies Act 2006 applicable to companies reporting under IFRS.The preparation of financial statements in conformity with IFRSs as endorsed by the EU requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Groups accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 2 to these consolidated financial statements.The financial statements have been prepared on an historical cost basis, as modified by the revaluation of certain financial assets and financial liabilities in accordance with IFRS 9, Financial Instruments, and explained further in the accounting policies below.In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable. These are described more fully below:Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly orindirectly Level 3 inputs are unobservable inputs for the asset or liability78 Mercia Asset Management PLCAnnual Report and Accounts 2020'