b'104 Mercia Asset Management PLC Annual Report and Accounts 2021Notes to the consolidated financial statements continued23. Lease liabilitiesThe Group holds leases for use of office premises. In calculating the present value of the obligation to make lease payments, the Groups incremental borrowing rate has been used as the discount rate as the rates implicit in the leases are not evident. The weighted average lessees incremental borrowing rate applied to lease liabilities recognised in the Groups consolidated balance sheet as at 31 March 2021 is 3.25%. As at 31 March 2021 and 31 March 2020, the Group had no lease liabilities in respect of leases committed to but not yet commenced. The table below summarises the annual lease costs.Year ended Year ended31 March 31 March2021 2020000 000Depreciation expense 142 139Interest expense 20 26Low-value lease expense 239 173Short-term lease expense 44 45The maturity profile of the Groups IFRS 16 leases is set out in the table below.as at As at31 March 31 March2021 2020000 000Due within one year 122 118Due between one and five years 351 473473 59124. Deferred considerationas at As at31 March 31 March2021 2020000 000Payable within one year 1,578 1,736Payable within two to five years 2,869 4,4464,447 6,182On 23 December 2019 Mercia completed the acquisition of the VCT fund management business for a total maximum consideration of 25,000,000 comprising a combination of cash and new Ordinary Mercia shares. The initial consideration was 16,600,000, with deferred consideration of up to 8,400,000 also being payable, contingent upon certain conditions being met.The deferred consideration comprises 6,300,000 in cash, payable in three equal instalments following the first, second and third anniversaries of completion, provided that no termination notice has been served by any of the Northern VCTs before each respective anniversary payment date, in addition to 2,100,000 payable in new Ordinary Mercia shares. In December 2020, the first cash instalment of 2,100,000 was paid in cash by the Group.Half of the deferred consideration shares will be payable if the Group has received at least 16,000,000 of fees in respect of the Northern VCT contracts (excluding performance fees) in 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 Northern VCTs collectively raise at least 60,000,000 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. The fair value of the deferred consideration is based on a weighted probability of outcomes over the remaining period discounted by 10%. The fair value movement in deferred consideration during the year resulted in a charge to the income statement of 365,000 (2020: nil).'