Fair value measurements

12 Months Ended

Mar. 31, 2023

26.	Fair value measurements

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, 2021, 2022, and 2023.

The following table summarizes the Company’s financial assets and liabilities measured and recorded at fair value on recurring basis as of March 31, 2022 and 2023:


			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


			Fair value measurement at reporting date using
Description	Fair value as of March 31, 2023		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		69,797		—		69,797		—
Available-for-sale debt investments		68,011		—		—		68,011
Equity securities with readily determinable fair values		102		102		—		—

Total assets		137,910		102		69,797		68,011

Liabilities:
Derivative liabilities		10,701		—		—		10,701

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, 2020		14,351			70,328
New addition		9,581			—
Disposal of Series D-3 Notes		(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

Reclassification of forward exchange contracts		(651	)		—
Unrealized fair value change of the derivative liabilities		2,266			—
Unrealized fair value change of the available-for-sale debt investments		—			(6,427	)
Disposal of available-for-sale debt investments		—			(428	)

Fair value of Level 3 investments as at March 31, 2023		10,701			68,011

The Company determined the fair value of their investments by using equity allocation model, market approach and binomial 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, 2022 and 2023:



	As of March 31, 2022	As of March 31, 2023
Implied price to sales after discount for lack of marketability	n.a.	1.04x
Weighted average cost of capital	15 %, 16.5 %, 18 %	n.a.
Lack of marketability discount	17 %, 23 %, 29 %	20%
Risk-free rate	1.95 %, 2.23 %, 2.34 %, 2.36 %	2.60 %, 2.31 %, 2.19%
Expected volatility	39.88 %, 42.17 %, 42.48 %, 47.34 %	47.19 %, 43.65 %, 32.08%
Probability	Liquidation scenario: 20% Redemption scenario: 40% IPO scenario: 40%	Liquidation scenario: 35 %, 40% Redemption scenario: 35 %, 40% IPO scenario: 30 %, 20%

The significant unobservable inputs used in the fair value measurement of the fair value of the investments include weighted average cost of capital, implied price to sales after discount for lack of marketability, lack of marketability discount, risk-free rate, expected volatility and probabilities of different scenarios. Significant increases in 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, 2022 and 2023 are as follows:


	As of March 31, 2022	As of March 31, 2023
Spot price (US$)	0.44, 6.93	5.90
Risk-free rate	1.25%, 2.5%	3.83%
Expected volatility	57.95%, 48.15%	61.13%
Expected expiry years (in years)	0.50, 3.56	2.60

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.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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