b'Mercia Asset Management PLC109Annual Report and Accounts 2021as at As at31 March 31 March2021 2020000 000Liabilities:Financial liabilities at amortised costdeferred considerationLevel 1Level 2Level 3 4,447 6,1824,447 6,182The Directors consider that the carrying amounts of financial assets and financial liabilities recorded at amortised cost in the financial statements approximate to their fair values.Financial instruments in Level 1The Group had one direct investment listed on AIM, MyHealthChecked plc, which is valued using the closing bid price as at 31 March 2021.Financial instruments in Level 3If one or more of the significant inputs required to fair value an instrument is not based on observable market data, the instrument isStrategic report Governanceincluded in Level 3. Apart from the one investment classified in Level 1, all other investments held in the Groups direct investment portfolio have been classified in Level 3 of the fair value hierarchy and the individual valuations for each of the companies have been arrived at using appropriate valuation techniques.The Group has adopted the International Private Equity and Venture Capital Valuation Guidelines (IPEVCVG) for determining its valuation techniques, which specify that the price of a recent investment represents one of a number of inputs used to arrive at fair value, and uses a single classification for all Level 3 investments.Note 2 to these consolidated financial statements provides further information on the Groups valuation methodology, including aFinancial statementsdetailed explanation of the valuation techniques used for Level 3 financial instruments. A reconciliation of the movement in Level 1 and 3 financial assets from 1 April to 31 March is disclosed, in totality, in note 19 of theseconsolidated financial statements, and on an individual direct investment basis within the Chief Financial Officers review onpage 50.31. Related party transactionsTransactions with DirectorsThe Group considers all members of the Board to be key management and their remuneration is disclosed in the Remuneration Report on page 70. Directors shareholdings in the Group are disclosed on page 72 of the Remuneration Report.32. Ultimate controlling partyThe Group has no single ultimate controlling party.33. Post balance sheet eventsOther than the continuing completion of approved direct investments and the reporting of performance fees payable to Mercia as at 31 March 2021 by the two Northern VCTs, there have been no material events since the balance sheetdate.'