b'74 Mercia Asset Management PLC Annual Report and Accounts 2021Independent auditors report to the membersof Mercia Asset Management PLC continuedOverviewcoverage97% of Group profit after tax96% of Group revenue99% of Group total assetsKey audit matters 2021Valuation of Unquoted Investments Revenue Recognition Valuation of Goodwill and Intangible Assets MaterialityThe materiality for the Group was set at 4,300,000 based on 2.5% of net assets.An overview of the scope of our auditOur Group audit was scoped by obtaining an understanding of the Group and its environment, including the Groups system of internal control, and assessing the risks of material misstatement in the financial statements.The scope of our Group audit included those Group entities which were deemed to be significant components as a result of their contribution to the material balances in the consolidated statement of comprehensive income and consolidated balance sheet of the Group. The significant components included Mercia Asset Management PLC (stand-alone); Mercia Fund Management Limited, Enterprise Ventures Limited and EV Business Loans Limited. The financial information of all significant components were subject to full scope audits with Mercia Investments Limited subject to specific procedures. All procedures were performed by the Group engagement team. Key audit mattersKey audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit, and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.'