The Company measured its short-term investments,

available-for-sale

investments, equity securities with readily determinable fair values and derivative liabilities at fair value on a recurring basis. Equity securities classified within Level 1 are valued using quoted market prices that currently available on a securities exchange registered on NYSE American. Short-term investments classified within Level 2 are valued using directly or indirectly observable inputs in the marketplace. As the Company’s

available-for-sale

investments and derivative liabilities are not traded in an active market with readily observable prices, the Company uses significant unobservable inputs to measure the fair value of

available-for-sale

investments and derivative liabilities. These instruments are categorized in the Level 3 valuation hierarchy based on the significance of unobservable factors in the overall fair value measurement. The Company did not transfer any assets or liabilities in or out of level 3 during the years ended March 31, 2020, 2021, and 2022.

The following table summarizes the Company’s financial assets and liabilities measured and recorded at fair value on recurring basis as of March 31, 2021 and 2022:


			Fair value measurement at reporting date using
Description	Fair value as of March 31, 2021		Quoted price in active markets for identical assets (Level 1)		Significant other observable Inputs (Level 2)		Significant unobservable Inputs (Level 3)
	RMB		RMB		RMB		RMB
Assets:
Short-term investments		168,546		—		168,546		—
Available-for-sale debt investments		71,357		—		—		71,357

Total assets		239,903		—		168,546		71,357

Liabilities:
Derivative liabilities		9,996		—		190		9,806


			Fair value measurement at reporting date using
Description	Fair value as of March 31, 2022		Quoted price in active markets for identical assets (Level 1)		Significant other observable Inputs (Level 2)		Significant unobservable Inputs (Level 3)
	RMB		RMB		RMB		RMB
Assets:
Short-term investments		128,084		—		128,084		—
Available-for-sale debt investments		74,866		—		—		74,866
Equity securities with readily determinable fair values		670		670		—		—

Total assets		203,620		670		128,084		74,866

Liabilities:
Derivative liabilities		9,086		—		—		9,086

The roll forward of major Level 3 investments are as following:


	Derivative liabilities			Available-for-sale debt investments
Fair value of Level 3 investments as at March 31, 2019		35,524			16,050
New addition		13,487			50,000
Conversion of Series D-1 Notes (Note 20)		(10,701	)		—
Conversion of Series D-2 Notes (Note 20)		(10,614	)		—
Unrealized fair value change of the derivative liabilities		(13,345	)		—
Unrealized fair value change of the available-for-sale debt investments		—			4,278

Fair value of Level 3 investments as at March 31, 2020		14,351			70,328

New addition		9,581			—
Disposal of Series D-3 Notes (Note 20)		(2,377	)		—
Unrealized fair value change of the derivative liabilities		(11,559	)		—
Unrealized fair value change of the available-for-sale debt investments		—			1,029

Fair value of Level 3 investments as at March 31, 2021		9,996			71,357

New addition		—			16,000
Reclassification of forward exchange contracts		746			—
Unrealized fair value change of the derivative liabilities		(1,656	)		—
Unrealized fair value change of the available-for-sale debt investments		—			(12,491	)

Fair value of Level 3 investments as at March 31, 2022		9,086			74,866

The Company determined the fair value of their investments by using income approach and equity allocation model. The determination of the fair value was based on estimates, judgments and information of other comparable public companies. The significant unobservable inputs adopted in the valuation as of March 31, 2021 and 2022:


	As of March 31, 2021	As of March 31, 2022
Weighted average cost of capital	15%,16.5%	15%,16.5,18%
Lack of marketability discount	17%,23%	17%,23%,29%
Risk-free rate	2.88%,2.87%	1.95% , ,2.23% , ,2.34% , ,2.36%
Expected volatility	41.79%,42.26%	39.88%,42.17%,42.48%,47.34%
Probability	Liquidation scenario: 40% Redemption scenario: 40% IPO scenario: 20%	Liquidation scenario: 20% Redemption scenario: 40% IPO scenario: 40%

The significant unobservable inputs used in the fair value measurement of the fair value of the investments include weighted average cost of capital, lack of marketability discount, risk-free rate, expected volatility and probabilities of different scenarios. Significant increases in weighted average cost of capital, lack of marketability discount and risk-free rate would result in a significantly lower fair value measurement. Significant decreases in expected volatility would result in a significantly lower fair value measurement. If the probabilities of redemption and liquidation scenarios are assumed to keep equal, significant increases in the probability of IPO scenario would result in a significantly lower fair value measurement.

The Company determined the fair value of their derivative liabilities by using binominal model. The determination of the fair value was based on estimates, judgments and information of other comparable public companies. The significant unobservable inputs adopted in the valuation as of March 31, 2021 and 2022 are as follows:


	As of March 31, 2021	As of March 31, 2022
Spot price (US$)	5.57, 7.19	0.44, 6.93
Risk-free rate	0.00%, 0.9%	1.25%, 2.5%
Expected volatility	41.05%, 52.33%,	57.95%, 48.15%
Expected expiry years (in years)	0.50, 4.56	0.50, 3.56

The significant unobservable inputs used in the fair value measurement of the derivative liabilities include spot price, risk-free rate, expected volatility and expected expiry years. Significant decreases in spot price, risk-free rate, expected volatility and expected expiry years would result in a significantly lower fair value measurement.