Cover
Cover - shares | 6 Months Ended | |
Sep. 30, 2021 | Nov. 04, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | FREEDOM HOLDING CORP. | |
Entity Central Index Key | 0000924805 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --03-31 | |
Entity Small Business | false | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Sep. 30, 2021 | |
Entity Filer Category | Accelerated Filer | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2022 | |
Entity Common Stock Shares Outstanding | 59,534,712 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-33034 | |
Entity Incorporation State Country Code | NV | |
Entity Tax Identification Number | 30-0233726 | |
Entity Address Address Line 1 | Esentai Tower” BC, Floor 7 | |
Entity Address Address Line 2 | 77/7 Al Farabi Ave | |
Entity Address City Or Town | Almaty | |
Entity Address Country | KZ | |
Entity Address Postal Zip Code | 050040 | |
City Area Code | 7 727 | |
Local Phone Number | 311 10 64 | |
Security 12b Title | Common | |
Trading Symbol | FRHC | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2021 | Mar. 31, 2021 |
ASSETS | ||
Cash and cash equivalents | $ 740,425,000 | $ 698,828,000 |
Restricted cash | 359,828,000 | 437,958,000 |
Trading securities | 974,481,000 | 736,188,000 |
Available-for-sale securities, at fair value | 1,000 | 1,000 |
Brokerage and other receivables, net | 317,124,000 | 64,801,000 |
Loans issued | 32,647,000 | 11,667,000 |
Fixed assets, net | 20,506,000 | 18,385,000 |
Intangible assets, net | 9,016,000 | 9,785,000 |
Goodwill | 7,894,000 | 7,868,000 |
Right-of-use asset | 16,471,000 | 13,262,000 |
Other assets, net | 22,066,000 | 19,902,000 |
TOTAL ASSETS | 2,500,459,000 | 2,018,645,000 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||
Securities repurchase agreement obligations | 537,277,000 | 426,715,000 |
Customer liabilities | 1,219,364,000 | 1,163,697,000 |
Trade payables | 51,071,000 | 22,304,000 |
Current income tax liability | 33,964,000 | 14,843,000 |
Securities sold, not yet purchased - at fair value | 14,867,000 | 8,592,000 |
Loans received | 3,456,000 | 3,373,000 |
Debt securities issued | 58,246,000 | 68,443,000 |
Lease liability | 16,298,000 | 13,249,000 |
Deferred income tax liabilities | 5,896,000 | 4,385,000 |
Deferred distribution payments | 8,534,000 | 8,534,000 |
Other liabilities | 8,107,000 | 8,839,000 |
TOTAL LIABILITIES | 1,957,080,000 | 1,742,974,000 |
Commitments and Contingent Liabilities (Note 20) | 0 | 0 |
SHAREHOLDERS' EQUITY | ||
Common stock - $0.001 par value; 500,000,000 shares authorized; 59,534,712 and 58,443,212 shares issued and outstanding as of September 30, 2021 and March 31, 2021, respectively | 59,000 | 58,000 |
Additional paid in capital | 110,717,000 | 104,672,000 |
Retained earnings | 464,920,000 | 208,628,000 |
Accumulated other comprehensive loss | (31,816,000) | (36,046,000) |
TOTAL EQUITY ATTRIBUTABLE TO THE COMPANY | 543,880,000 | 277,312,000 |
Non-controlling interest | (501,000) | (1,641,000) |
TOTAL SHAREHOLDERS' EQUITY | 543,379,000 | 275,671,000 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 2,500,459,000 | $ 2,018,645,000 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2021 | Mar. 31, 2021 |
SHAREHOLDERS' EQUITY | ||
Common stock, shares par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 59,534,712 | 58,443,212 |
Common stock, shares outstanding | 59,534,712 | 58,443,212 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND STATEMENTS OF OTHER COMPREHENSIVE INCOME (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenue: | ||||
Fee and commission income | $ 116,534,000 | $ 54,277,000 | $ 213,940,000 | $ 97,616,000 |
Net gain on trading securities | 175,252,000 | 8,302,000 | 185,152,000 | 17,386,000 |
Interest income | 20,063,000 | 4,948,000 | 38,140,000 | 9,197,000 |
Net gain on foreign exchange operations | 1,622,000 | 3,020,000 | 434,000 | 2,772,000 |
Net loss on derivative assets | (656,000) | (837,000) | (715,000) | (846,000) |
TOTAL REVENUE, NET | 312,815,000 | 69,710,000 | 436,951,000 | 126,125,000 |
Expense: | ||||
Fee and commission expense | 22,968,000 | 20,021,000 | 44,832,000 | 29,790,000 |
Interest expense | 16,185,000 | 4,699,000 | 30,457,000 | 8,443,000 |
Operating expense | 36,569,000 | 15,867,000 | 66,888,000 | 30,293,000 |
Provision for impairment losses | 366,000 | 1,044,000 | 659,000 | 666,000 |
Other expense/(income) , net | 653,000 | (68,000) | 664,000 | (95,000) |
TOTAL EXPENSE | 76,741,000 | 41,563,000 | 143,500,000 | 69,097,000 |
NET INCOME BEFORE INCOME TAX | 236,074,000 | 28,147,000 | 293,451,000 | 57,028,000 |
Income tax expense | (31,562,000) | (4,584,000) | (37,231,000) | (9,189,000) |
NET INCOME | 204,512,000 | 23,563,000 | 256,220,000 | 47,839,000 |
Less: Net (loss)/income attributable to non-controlling interest in subsidiary | (20,000) | (127,000) | (72,000) | 296,000 |
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS | 204,532,000 | 23,690,000 | 256,292,000 | 47,543,000 |
OTHER COMPREHENSIVE INCOME/(LOSS) | ||||
Reclassification adjustment relating to available-for-sale securities disposed of in the period, net of tax effect | 0 | 0 | 0 | 71,000 |
Foreign currency translation adjustments, net of tax effect | 930,000 | (10,919,000) | 4,230,000 | (2,286,000) |
COMPREHENSIVE INCOME BEFORE NON-CONTROLLING INTERESTS | 205,442,000 | 12,644,000 | 260,450,000 | 45,624,000 |
Less: Comprehensive income/(loss) attributable to non-controlling interest in subsidiary | (20,000) | (127,000) | (72,000) | 296,000 |
COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ 205,462,000 | $ 12,771,000 | $ 260,522,000 | $ 45,328,000 |
BASIC NET INCOME PER COMMON SHARE | $ 3.44 | $ 0.40 | $ 4.33 | $ 0.82 |
DILUTED NET INCOME PER COMMON SHARE | $ 3.44 | $ 0.40 | $ 4.33 | $ 0.82 |
Weighted average number of shares (basic) | 59,510,976 | 58,358,212 | 59,220,800 | 58,358,212 |
Weighted average number of shares (diluted) | 59,510,976 | 58,462,138,000 | 59,220,800 | 58,460,058 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 6 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash Flows (Used In)/From Operating Activities | ||
Net income | $ 256,220,000 | $ 47,839,000 |
Adjustments to reconcile net income from operating activities: | ||
Depreciation and amortization | 2,634,000 | 1,655,000 |
Noncash lease expense | 2,221,000 | 3,302,000 |
Change in deferred taxes | 1,458,000 | 1,465,000 |
Stock compensation expense | 6,722,000 | 1,055,000 |
Unrealized gain on trading securities | (35,616,000) | (263,000) |
Net loss on derivatives | 0 | 885,000 |
Net change in accrued interest | (18,187,000) | (328,000) |
Allowances for receivables | 659,000 | 666,000 |
Changes in operating assets and liabilities: | ||
Lease liabilities | (2,355,000) | (3,188,000) |
Derivative assets | 0 | (2,311,000) |
Trading securities | (174,133,000) | (156,896,000) |
Brokerage and other receivables | (249,416,000) | (48,257,000) |
Loans purchased from MFO | (19,474,000) | 0 |
Loans sold to MFO | 2,860,000 | 0 |
Loans issued | (4,259,000) | 501,000 |
Other assets | (863,000) | (804,000) |
Customer liabilities | 30,493,000 | 361,634,000 |
Current income tax liability | 19,101,000 | 3,847,000 |
Trade payables | 29,316,000 | 84,777,000 |
Securities sold, not yet purchased - at fair value | 6,695,000 | 0 |
Other liabilities | (217,000) | 1,457,000 |
Net cash flows (used in)/from operating activities | (146,141,000) | 297,036,000 |
Cash Flows (Used In)/From Investing Activities | ||
Purchase of fixed assets | (3,903,000) | (2,129,000) |
Proceeds from sale of fixed assets | 160,000 | 271,000 |
Proceeds from sale of available-for-sale securities, at fair value | 0 | 6,437,000 |
Prepayment on acquisition | (3,341) | (4,170,000) |
Consideration paid for Zerich Capital Management | 0 | (7,110,000) |
Cash, cash equivalents and restricted cash received from acquisitions | 0 | 27,991,000 |
Net cash flows (used in)/from investing activities | (7,084,000) | 21,290,000 |
Cash Flows From/(Used In) Financing Activities | ||
Proceeds from securities repurchase agreement obligations | 109,016,000 | 138,149,000 |
Proceeds from issuance of debt securities | 0 | 1,991,000 |
Repurchase of debt securities | (10,134,000) | (8,196,000) |
Repayment of loans received | 69,000 | 0 |
Exercise of options | 119,000 | 0 |
Net cash flows from/(used in) financing activities | 99,070,000 | 131,944,000 |
Effect of changes in foreign exchange rates on cash and cash equivalents | 17,622,000 | (28,451,000) |
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (36,533,000) | 421,819,000 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD | 1,136,786,000 | 129,805,000 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD | 1,100,253,000 | 551,624,000 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 7,823,000 | 6,498,000 |
Income tax paid | 23,719,000 | 3,389,000 |
Supplemental non-cash disclosures: | ||
Operating lease right-of-use assets obtained/disposed of in exchange for operating lease obligations during the period, net | 6,263,000 | 1,406,000 |
Cash and cash equivalents | 740,425,000 | 443,439,000 |
Restrict cash | 359,828,000 | 108,185,000 |
Total cash, cash equivalents and restricted cash shown as in the statement of cash flows | $ 1,100,253,000 | $ 551,624,000 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY (Unaudited) - USD ($) | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated other comprehensive loss | Noncontrolling Interest |
Balance, shares at Mar. 31, 2020 | 58,358,212 | |||||
Balance, amount at Mar. 31, 2020 | $ 129,037,000 | $ 58,000 | $ 102,890,000 | $ 66,335,000 | $ (37,974,000) | $ (2,272,000) |
Stock based compensation | 1,055,000 | 0 | 1,055,000 | 0 | 0 | 0 |
Reclassification adjustment relating to available-for-sale investments disposed of in the period, net of tax effect | 71,000 | 0 | 0 | 0 | 71,000 | 0 |
Translation difference | (2,286,000) | 0 | 0 | 0 | (2,286,000) | 0 |
Net income | 47,839,000 | $ 0 | 0 | 47,543,000 | 0 | 296,000 |
Balance, shares at Sep. 30, 2020 | 58,358,212 | |||||
Balance, amount at Sep. 30, 2020 | 175,716,000 | $ 58,000 | 103,945,000 | 113,878,000 | (40,189,000) | (1,976,000) |
Balance, shares at Jun. 30, 2020 | 58,358,212 | |||||
Balance, amount at Jun. 30, 2020 | 162,542,000 | $ 58,000 | 103,415,000 | 90,188,000 | (29,270,000) | (1,849,000) |
Stock based compensation | 530,000 | 0 | 530,000 | 0 | 0 | 0 |
Translation difference | (10,919,000) | 0 | 0 | 0 | (10,919,000) | 0 |
Net income | 23,563,000 | $ 0 | 0 | 23,690,000 | 0 | (127,000) |
Balance, shares at Sep. 30, 2020 | 58,358,212 | |||||
Balance, amount at Sep. 30, 2020 | 175,716,000 | $ 58,000 | 103,945,000 | 113,878,000 | (40,189,000) | (1,976,000) |
Balance, shares at Mar. 31, 2021 | 58,443,212 | |||||
Balance, amount at Mar. 31, 2021 | 275,671,000 | $ 58,000 | 104,672,000 | 208,628,000 | (36,046,000) | (1,641,000) |
Translation difference | 4,230,000 | 0 | 0 | 0 | 4,230,000 | 0 |
Net income | 256,220,000 | $ 0 | 0 | 256,292,000 | 0 | (72,000) |
Stock based compensation, shares | 1,031,500 | |||||
Stock based compensation, amount | 6,723,000 | $ 1,000 | 6,722,000 | 0 | 0 | 0 |
Sale of Freedom UA shares | 416,000 | $ 0 | (796,000) | 0 | 0 | 1,212,000 |
Exercise of options, shares | 60,000 | |||||
Exercise of options, amount | 119,000 | $ 0 | 119,000 | 0 | 0 | 0 |
Balance, shares at Sep. 30, 2021 | 59,534,712 | |||||
Balance, amount at Sep. 30, 2021 | 543,379,000 | $ 59,000 | 110,717,000 | 464,920,000 | (31,816,000) | (501,000) |
Balance, shares at Jun. 30, 2021 | 59,474,712 | |||||
Balance, amount at Jun. 30, 2021 | 332,841,000 | $ 59,000 | 106,833,000 | 260,388,000 | (32,746,000) | (1,693,000) |
Stock based compensation | 4,561,000 | 0 | 4,561,000 | 0 | 0 | 0 |
Translation difference | 930,000 | 0 | 0 | 0 | 930,000 | 0 |
Net income | 204,512,000 | 0 | 0 | 204,532,000 | 0 | (20,000) |
Sale of Freedom UA shares | 416,000 | $ 0 | (796,000) | 0 | 0 | 1,212,000 |
Exercise of options, shares | 60,000 | |||||
Exercise of options, amount | 119,000 | $ 0 | 119,000 | 0 | 0 | 0 |
Balance, shares at Sep. 30, 2021 | 59,534,712 | |||||
Balance, amount at Sep. 30, 2021 | $ 543,379,000 | $ 59,000 | $ 110,717,000 | $ 464,920,000 | $ (31,816,000) | $ (501,000) |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 6 Months Ended |
Sep. 30, 2021 | |
DESCRIPTION OF BUSINESS | |
NOTE 1 - DESCRIPTION OF BUSINESS | NOTE 1 – DESCRIPTION OF BUSINESS Overview Freedom Holding Corp. (the “Company” or “FRHC”) is a corporation organized in the United States under the laws of the State of Nevada that through its operating subsidiaries provides financial services including retail securities brokerage, research, investment counseling, securities trading, market making, retail banking, corporate investment banking and underwriting services in Eurasia. The Company is headquartered in Almaty, Kazakhstan, with supporting administrative office locations in Russia, Cyprus and the United States. The Company has retail locations in Russia, Kazakhstan, Ukraine, Uzbekistan, Kyrgyzstan, Azerbaijan and Germany. The Company also owns an agency only institutional broker dealer registered with the U.S. Securities and Exchange Commission (“SEC”). The Company’s common stock trades on the Nasdaq Capital Market. The Company owns directly, or through subsidiaries, the following companies: · LLC Investment Company Freedom Finance, a Moscow, Russia-based securities broker-dealer (“Freedom RU”); · LLC FFIN Bank, a Moscow, Russia-based bank (“Freedom Bank RU”); · JSC Freedom Finance, an Almaty, Kazakhstan-based securities broker-dealer (“Freedom KZ”); · Freedom Finance Global, PLC, an Astana International Financial Centre-based securities broker-dealer, (“Freedom Global”); · Bank Freedom Finance Kazakhstan JSC, an Almaty, Kazakhstan-based bank (“Freedom Bank KZ”); · Freedom Finance Special Purpose Company LTD, a Nur-Sultan, Kazakhstan-based company (“Freedom SPC”); · Freedom Finance Commercial LLP, a Kazakhstan-based company (“Freedom Commercial”); · Freedom Finance Europe Limited, a Limassol, Cyprus-based broker-dealer (“Freedom EU”); · Freedom Finance Technologies Ltd, a Limassol, Cyprus-based IT development company (“Freedom Technologies”); · Freedom Finance Germany GmbH, a Berlin, Germany-based tied agent of Freedom EU (“Freedom GE”) · UK Prime Limited, a London, United Kingdom-based company tied agent of Freedom EU (“Prime UK”); · LLC Freedom Finance Uzbekistan, a Tashkent, Uzbekistan-based broker-dealer (“Freedom UZ”); · LLC Freedom Finance Azerbaijan, an Azerbaijan-based financial educational center (“Freedom AZ”); · Prime Executions, Inc., a New York City, New York-based agency only institutional brokerage (“PrimeEx”); and · FFIN Securities, Inc., a Nevada corporation (“FFIN”). As of September 30, 2021, the Company owned a 9% interest in LLC Freedom Finance Ukraine, a Kiev, Ukraine-based broker-dealer (“Freedom UA”). The remaining 91% interest in Freedom UA is owned by Askar Tashtitov, the Company’s president. Due to recent changes to Ukrainian regulations to further restrict foreign ownership of registered Ukrainian broker-dealers, in July 2021 the Company was required to sell 23.88% of its equity interest in Freedom UA to Mr. Tashtitov, reducing the Company’s direct ownership interest in Freedom UA to 9%. In April 2019 the Company entered into a series of contractual arrangements with Freedom UA and Mr. Tashtitov that obligate the Company to guarantee the performance of all Freedom UA obligations and provide Freedom UA sufficient funding to cover all operating losses and net capital requirements, enable the Company to receive 90% of the net profits of Freedom UA after tax, and require the Company to provide Freedom UA the management competence, operational support, and ongoing access to the Company’s significant assets, necessary technology resources and expertise to conduct the business of Freedom UA. The Company accounts for Freedom UA as a variable interest entity (“VIE”) under the accounting standards of the Financial Accounting Standards Board (“FASB”). Accordingly, the financial statements of Freedom UA are consolidated into the financial statements of the Company. The Company’s subsidiaries are participants on the Kazakhstan Stock Exchange (KASE), Astana Stock Exchange (AIX), Moscow Exchange (MOEX), Saint-Petersburg Exchange (SPBX), the Ukrainian Exchange (UX), the Republican Stock Exchange of Tashkent (UZSE), the Uzbek Republican Currency Exchange (UZCE) and are members of the New York Stock Exchange (NYSE) and Nasdaq Stock Exchange (Nasdaq). Unless otherwise specifically indicated or as is otherwise contextually required, FRHC, Freedom RU, Freedom Bank RU, Freedom KZ, Freedom Global, Freedom Bank KZ, Freedom SPC, Freedom Commercial, Freedom EU, Freedom Technologies, Freedom GE, Prime UK, Freedom UZ, Freedom AZ, PrimeEx, and FFIN are collectively referred to herein as the “Company”. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Sep. 30, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting principles The Company’s accounting policies and accompanying condensed consolidated financial statements conform to accounting principles generally accepted in the United States of America (U.S. GAAP). These financial statements have been prepared on the accrual basis of accounting. Basis of presentation and principles of consolidation The Company’s consolidated financial statements present the consolidated accounts of FRHC, Freedom RU, Freedom Bank RU, Freedom KZ, Freedom Global, Freedom Bank KZ, Freedom SPC, Freedom Commercial, Freedom EU, Freedom Technologies, Freedom GE, Prime UK, Freedom UZ, Freedom AZ, PrimeEx, and FFIN. All significant inter-company balances and transactions have been eliminated from the consolidated financial statements. Consolidation of variable interest entities In accordance with accounting standards regarding consolidation of variable interest entities (“VIEs”), VIEs are generally entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision-making ability. VIEs must be evaluated to determine the primary beneficiary of the risks and rewards of the VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes. Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management believes that the estimates utilized in preparing its financial statements are reasonable and prudent. Actual results could differ from those estimates. Revenue recognition Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC Topic 606”), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services promised to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. A significant portion of the Company’s revenue-generating transactions are not subject to ASC Topic 606, including revenue generated from financial instruments, such as loans and investment securities, as these activities are subject to other U.S. GAAP guidance discussed elsewhere within these disclosures. Descriptions of the Company’s revenue-generating activities that are within the scope of ASC Topic 606, which are presented in the Condensed Consolidated Statements of Operations and Statements of Other Comprehensive Income as components of non-interest income are as follows: · Commissions on brokerage services; · Commissions on banking services (money transfers, foreign exchange operations and other); and · Commissions on investment banking services (underwriting, market making, and bondholders’ representation services). Under Topic 606, the Company is required to recognize commission fees when they are probable and there is not a significant chance of reversal in the future. The Company recognizes revenue in accordance with this core principle by applying the following steps: · Step 1: Identify the contract(s) with a customer - A contract is an agreement between two or more parties that creates enforceable rights and obligations. · Step 2: Identify the performance obligations in the contract - A contract includes promises to transfer goods or services to a customer. If those goods or services are distinct, the promises are performance obligations and are accounted for separately. · Step 3: Determine the transaction price - The transaction price is the amount of consideration in a contract to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The transaction price can be a fixed amount of customer consideration, but it may sometimes include variable consideration or consideration in a form other than cash. The transaction price also is adjusted for the effects of the time value of money if the contract includes a significant financing component and for any consideration payable to the customer. If the consideration is variable, an entity estimates the amount of consideration to which it will be entitled in exchange for the promised goods or services. The estimated amount of variable consideration will be included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. · Step 4: Allocate the transaction price to the performance obligations in the contract - An entity typically allocates the transaction price to each performance obligation on the basis of the relative standalone selling prices of each distinct good or service promised in the contract. If a standalone selling price is not observable, an entity estimates it. Sometimes, the transaction price includes a discount or a variable amount of consideration that relates entirely to a part of the contract. · Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation - An entity recognizes revenue when (or as) it satisfies a performance obligation by transferring a promised good or service to a customer (which is when the customer obtains control of that good or service). The amount of revenue recognized is the amount allocated to the satisfied performance obligation. A performance obligation may be satisfied at a point in time (typically for promises to transfer goods to a customer) or over time (typically for promises to transfer services to a customer). For performance obligations satisfied over time, an entity recognizes revenue over time by selecting an appropriate method for measuring the entity’s progress toward complete satisfaction of that performance obligation. Interest income Interest income on loans issued, trading securities and reverse repurchase agreement obligations are recognized based on the contractual provisions of the underlying arrangements. Loan premiums and discounts are deferred and generally amortized into interest income as yield adjustments over the contractual life and/or commitment period using the effective interest method. Unamortized premiums, discounts and other basis adjustments on trading securities are generally recognized in interest income over the contractual lives of the securities using the effective interest method. Derivative financial instruments In the normal course of business, the Company invests in various derivative financial contracts including futures. Derivatives are initially recognized at fair value at the date a derivative contract is entered into and are subsequently re-measured to their fair value at each reporting date. The fair values are estimated based on quoted market prices or pricing models that take into account the current market and contractual prices of the underlying instruments and other factors. Derivatives are carried as assets when their fair value is positive and as liabilities when it is negative. Loans The Company’s loan portfolio is divided into three portfolio segments: credit card, mortgages and retail banking loans. Credit card consists of loans provided to individuals and businesses through the cards. Mortgage loans consist of loans provided to individuals to purchase real estate, which is used as collateral for the loan. Retail banking loans consist of unsecured loans provided to individuals. Loans Acquired All purchased loans are initially recorded at fair value, which includes consideration of expected future losses, at the date of the loan acquisition. To determine the fair value of loans at the date of acquisition, the Company estimates the discounted contractual cash flows due using an observable market rate of interest, adjusted for factors such as probable default rates of the borrowers, and the loan terms that a market participant would consider in determining fair value. In determining fair value, contractual cash flows are adjusted to include prepayment estimates based upon historical payment trends, forecasted default rates and loss severities and other relevant factors. The difference between the fair value and the contractual cash flows is recorded as a loan premium or discount, which may relate to either credit or non-credit factors, at acquisition. The Company accounts for purchased loans under the accounting guidance for purchased financial assets with credit deterioration when, at the time of purchase, the loans have experienced a more-than-insignificant deterioration in credit quality since origination. The Company recognizes an allowance for credit losses on purchased loans that have not experienced a more-than-insignificant deterioration in credit quality since origination at the time of purchase through earnings in a manner that is consistent with originated loans. The policies relating to the allowance for credit losses on loans is described below in the “Estimate of Incurred Loan Losses” section of this Note. Estimate of Incurred Loan Losses. The allowance represented management’s current estimate of incurred loan losses inherent in the Company’s loan portfolio as of each balance sheet date. The provision for credit losses reflected credit losses the Company believed had been incurred and would eventually be recognized over time through charge-offs. Management performed a quarterly analysis of the Company’s loan portfolio to determine if impairment had occurred and to assess the adequacy of the allowance based on historical and current trends as well as other factors affecting credit losses. The Company applied separate calculations of the allowance for its credit cards, mortgages and retail loan portfolios. Based on the adopted methodology, the Company estimated the probability of default based on historical default rates, adjusted for certain macro indicators, such as GDP, average exchange rates, unemployment rate and real wage index. Loss given default is calculated based on the collateral coverage of the loans. The Company’s allowance for loan losses consisted of two components that were allocated to cover the estimated probable losses in each loan portfolio based on the results of the Company’s detailed review and loan impairment assessment process: (i) a component for loans collectively evaluated for impairment; and (ii) an asset-specific component for individually impaired loans. The component of the allowance related to credit card, mortgages and retail banking loans that the Company collectively evaluated for impairment was based on a statistical calculation and on its historical loss experience for loans with similar risk characteristics and consideration of the current credit quality of the portfolio. The asset-specific component of the allowance includes smaller-balance homogeneous credit card and retail banking loans whose terms have been modified in a troubled debt restructuring and larger-balance nonperforming, non-homogeneous commercial banking loans. The Company generally measured the asset-specific component of the allowance based on the difference between the recorded investment of individually impaired loans and the present value of expected future cash flows. In addition to the allowance, the Company also estimated probable losses related to contractually binding unfunded lending commitments. Functional currency Management has adopted ASC 830, Foreign Currency Translation Matters as it pertains to its foreign currency translation. The Company’s functional currencies are the Russian ruble, European euro, U.S. dollar, Ukrainian hryvnia, Uzbekistani som, Kazakhstani tenge, Kyrgyzstani som, UK pound sterling and the Azerbaijani manat, and its reporting currency is the U.S. dollar. For financial reporting purposes, foreign currencies are translated into U.S. dollars as the reporting currency. Monetary assets and liabilities denominated in foreign currencies are translated into U.S. dollars using the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Average monthly rates are used to translate revenues and expenses. Translation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders’ equity as “Accumulated other comprehensive loss”. Cash and cash equivalents Cash and cash equivalents are generally comprised of certain highly liquid investments with maturities of three months or less at the date of purchase. Cash and cash equivalents include reverse repurchase agreements which are recorded at the amounts at which the securities were acquired or sold plus accrued interest. Securities reverse repurchase and repurchase agreements A reverse repurchase agreement is a transaction in which the Company purchases financial instruments from a seller, typically in exchange for cash, and simultaneously enters into an agreement to resell the same or substantially the same financial instruments to the seller for an amount equal to the cash or other consideration exchanged plus interest at a future date. Securities purchased under reverse repurchase agreements are accounted for as collateralized financing transactions and are recorded at the contractual amount for which the securities will be resold, including accrued interest. Financial instruments purchased under reverse repurchase agreements are recorded in the financial statements as cash placed on deposit collateralized by securities and classified as cash and cash equivalents in the Condensed Consolidated Balance Sheets. A repurchase agreement is a transaction in which the Company sells financial instruments to another party, typically in exchange for cash, and simultaneously enters into an agreement to reacquire the same or substantially the same financial instruments from the buyer for an amount equal to the cash or other consideration exchanged plus interest at a future date. These agreements are accounted for as collateralized financing transactions. The Company retains the financial instruments sold under repurchase agreements and classifies them as trading securities in the Condensed Consolidated Balance Sheets. The consideration received under repurchase agreements is classified as securities repurchase agreement obligations in the Condensed Consolidated Balance Sheets. The Company enters into reverse repurchase, repurchase, securities borrowed and securities loaned transactions to, among other things, acquire securities to leverage and grow its proprietary trading portfolio, cover short positions and settle other securities obligations, to accommodate customers’ needs and to finance its inventory positions. The Company enters into these transactions in accordance with normal market practice. Under standard terms for repurchase transactions, the recipient of collateral has the right to sell or repledge the collateral, subject to returning equivalent securities on settlement of the transaction. Available-for-sale securities Financial assets categorized as available-for-sale (“AFS”) are non-derivatives that are either designated as available-for-sale or not classified as (a) loans and receivables, (b) held-to-maturity securities or (c) trading securities. Listed shares and listed redeemable notes held by the Company that are traded in an active market are classified as AFS and are stated at fair value. The Company has investments in unlisted shares that are not traded in an active market that are also classified as investments AFS and stated at fair value (because Company management considers that fair value can be reliably measured). Gains and losses arising from changes in fair value are recognized in other comprehensive income and are included in accumulated other comprehensive loss, with the exception of other-than-temporary impairment losses, interest calculated using the effective interest method, dividend income and foreign exchange gains and losses, which are recognized in the Condensed Consolidated Statements of Operations and Statements of other Comprehensive Income. When the investment is disposed of or is determined to be impaired, the cumulative gain or loss previously accumulated in the investments’ revaluation reserve is then reclassified to Condensed Consolidated Statements of Operations and Statements of Other Comprehensive Income. Trading securities Financial assets are classified as trading securities if the financial asset has been acquired principally for the purpose of selling it in the near term. Trading securities are stated at fair value, with any gains or losses arising on remeasurement recognized in revenue. Changes in fair value are recognized in the Condensed Consolidated Statements of Operations and Statements of Other Comprehensive Income and included in net gain on trading securities. Interest earned and dividend income are recognized in the Condensed Consolidated Statements of Operations and Statements of Other Comprehensive Income and are included in interest income, according to the terms of the contract and when the right to receive the payment has been established. Investments in nonconsolidated managed funds are accounted for at fair value based on the net asset value (“NAV”) of the funds provided by the fund managers with gains or losses included in net gain on trading securities in the Condensed Consolidated Statements of Operations and Statements of Other Comprehensive Income. Debt securities issued Debt securities issued are initially recognized at the fair value of the consideration received, less directly attributable transaction costs. Subsequently, amounts due are stated at amortized cost and any difference between net proceeds and the redemption value is recognized over the period of the borrowings using the effective interest method. If the Company purchases its own debt, it is removed from the Condensed Consolidated Balance Sheets and the difference between the carrying amount of the liability and the consideration paid is recognized in the Condensed Consolidated Statements of Operations and Statements of Other Comprehensive Income. Brokerage and other receivables Brokerage and other receivables are comprised of commissions and receivables related to the securities brokerage and banking activity of the Company. At initial recognition, brokerage and other receivables are recognized at fair value. Subsequently, brokerage and other receivables are carried at cost net of any allowance for impairment losses. Derecognition of financial assets A financial asset (or, where applicable a part of a financial asset or a part of a group of similar financial assets) is derecognized when all of the following conditions are met: · The transferred financial assets have been isolated from the Company - put presumptively beyond the reach of the Company and its creditors, even in bankruptcy or other receivership. · The transferee has rights to pledge or exchange financial assets. · The Company or its agents do not maintain effective control over the transferred financial assets or third-party beneficial interests related to those transferred assets. Where the Company has not met the asset derecognition conditions above, it continues to recognize the asset to the extent of its continuing involvement. Impairment of long-lived assets In accordance with the accounting guidance for the impairment or disposal of long-lived assets, the Company periodically evaluates the carrying value of long-lived assets to be held and used when events and circumstances warrant such a review. The carrying value of a long-lived asset is considered impaired when the fair value from such asset is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. Fair value is determined primarily using the anticipated cash flows, discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair values are reduced for the cost of disposal. Impairment of goodwill As of September 30, 2021, and March 31, 2021, goodwill recorded in the Company’s Consolidated Balance Sheets totaled $7,894 and $7,868, respectively. The Company performs an impairment review at least annually unless indicators of impairment exist in interim periods. The impairment test for goodwill uses a two-step approach. Step one compares the estimated fair value of a reporting unit with goodwill to its carrying value. If the carrying value exceeds the estimated fair value, step two must be performed. Step two compares the carrying value of the reporting unit to the fair value of all of the assets and liabilities of the reporting unit as if the reporting unit was acquired in a business combination. If the carrying amount of a reporting unit’s goodwill exceeds the implied fair value of its goodwill, an impairment loss is recognized in an amount equal to the excess. In its annual goodwill impairment test, the Company estimated the fair value of the reporting unit based on the income approach (also known as the discounted cash flow method) and determined the fair value of the Company’s goodwill exceeded the carrying amount of the Company’s goodwill. The goodwill value as of September 30, 2021, increased compared to March 31, 2021, due to foreign exchange currency translation. The changes in the carrying amount of goodwill as of March 31, 2021, and for the quarter September 30, 2021, were as follows: Balance as of March 31, 2021 $ 7,868 Foreign currency translation 26 Balance as of September 30, 2021 $ 7,894 Income taxes The Company recognizes deferred tax liabilities and assets based on the difference between the financial statements and tax basis of assets and liabilities using the enacted tax rates in effect for the year in which the differences are expected to reverse. The measurement of deferred tax assets is reduced, if necessary, by the amount of any tax benefits that, based on available evidence, are not expected to be realized. Current income tax expenses are provided for in accordance with the laws of the relevant taxing authorities. As part of the process of preparing financial statements, the Company is required to estimate its income taxes in each of the jurisdictions in which it operates. The Company accounts for income taxes using the asset and liability approach. Under this method, deferred income taxes are recognized for tax consequences in future years based on differences between the tax bases of assets and liabilities and their reported amounts in the financial statements at each year-end and tax loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates applicable for the differences that are expected to affect taxable income. The Company will include interest and penalties arising from the underpayment of income taxes in the provision for income taxes (if anticipated). As of September 30, 2021, and March 31, 2021, the Company had no accrued interest or penalties related to uncertain tax positions. Financial instruments Financial instruments are carried at fair value as described below. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market for the asset or liability. Fair value is the current bid price for financial assets, current ask price for financial liabilities and the average of current bid and ask prices when the Company is both in short and long positions for the financial instrument. A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly available from an exchange or other institution and those prices represent actual and regularly occurring market transactions on an arm’s length basis. Leases The Company adopted ASU No. 2016-02, “Leases (Topic 842)”, which requires leases with durations greater than twelve months to be recognized on the balance sheet. Operating lease assets and corresponding lease liabilities are recognized on the Company’s Consolidated Balance Sheets. Refer to Note 19 - Leases, within the notes to condensed consolidated financial statements for additional disclosure and significant accounting policies affecting leases. Fixed assets Fixed assets are carried at cost, net of accumulated depreciation. Maintenance, repairs, and minor renewals are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which range between three and seven years. Segment information The Company operates in a single operating segment offering financial services to its customers in a single geographic region covering Eurasia. The Company’s financial services business provides retail securities brokerage, research, investment counseling, securities trading, market making, corporate investment banking, underwriting, complementary banking services and retail banking services to its customers. The Company generates revenue from customers primarily from fee and commission income and interest income. The Company does not use profitability reports or other information disaggregated on a regional, country or divisional basis for making business decisions. Recent accounting pronouncements In June 2016 the FASB issued Accounting Standards Update No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, which introduced an expected credit loss methodology for the impairment of financial assets measured at amortized cost basis. That methodology replaces the probable, incurred loss model for those assets. In November 2019, the FASB issued ASU 2019-10 “Financial Instruments-Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842)”. The FASB developed a philosophy to extend and simplify how effective dates are staggered between larger public companies (bucket one) and all other entities (bucket two). Those other entities include private companies, smaller public companies, not-for-profit organizations, and employee benefit plans. Under this philosophy, a major update would first be effective for bucket-one entities, that is, public business entities that are SEC filers, excluding entities eligible to be smaller reporting companies (SRCs) under the SEC’s definition. The Master Glossary of the Codification defines public business entities and SEC filers. All other entities, including SRCs, other public business entities, and nonpublic business entities (private companies, not-for-profit organizations, and employee benefit plans) would compose bucket two. For those entities, it is anticipated that the FASB will consider requiring an effective date staggered at least two years after bucket one for major updates. At the date when ASU 2016-13 was issued, the Company was an SRC and according to ASU 2019-10, qualifies for bucket two. Accordingly, ASU 2016-13 and ASU 2017-12 are effective for fiscal years beginning after December 15, 2022. The Company is currently evaluating the impact that ASU 2016-13 and 2017-12 will have on its consolidated financial statements and related disclosures. In January 2021 the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope, which clarifies that certain optional expedients and exceptions in Table of Contents link FASB Accounting Standards Codification (ASC) Topic 848, Reference Rate Reform, for contract modifications and hedge accounting apply as well to derivatives that are affected by the changes in interest rates used for margining, discounting or contract price alignment (i.e., the discounting transition). Examples of such use include (1) rates used in interest rate swaps to compute the cash flows for the swap’s variable leg, (2) interest rate indexes used to discount the future cash flows of a derivative instrument to determine its fair value, and (3) the compensation or the interest amount earned on margin payments (i.e., contract price alignment). The amended guidance in ASU No. 2021-01 is effective immediately for all entities. The guidance may be applied on (1) a full retrospective basis as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or (2) a prospective basis to new modifications from any date within an interim period that includes or is subsequent to the date of the issuance of ASU No. 2021-01 through the date that financial statements are available to be issued. If any of the amendments are applied for an eligible hedging relationship, adjustments resulting therefrom must be reflected as of the date that the election is applied. The Company’s adoption of the provisions of ASU No. 2021-01 had no significant impact on the Company’s consolidated financial statements. In May 2021 the FASB issued Accounting Standards Update No. 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options, a consensus of the Emerging Issues Task Force (EITF) , which amends the FASB Accounting Standards Codification (ASC or the “Codification”) to provide explicit guidance, and, thus, reduce diversity in practice, on accounting by issuers for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after the modification or exchange. This amendment provides that for an entity that presents earnings per share (EPS) in accordance with Topic 260, the effects of a modification or an exchange of a freestanding equity-classified written call option that is recognized as a dividend should be an adjustment to net income (or net loss) in the basic EPS calculation. The amended guidance becomes mandatorily effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years, and should be applied prospectively to modifications or exchanges occurring on or after the effective date. The Company is currently evaluating the impact that ASU 2021-04 will have on its consolidated financial statements and related disclosures. In August 2021 the FASB issued Accounting Standard Update No 2021-06 “Presentation of Financial Statements (Topic 205), Financial Services — Depository and Lending (Topic 942), and Financial Services — Investment Companies (Topic 946)” which amends various SEC paragraphs pursuant to the issuance of SEC Release No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses. SEC issued Final Rulemaking Release No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, which modified the disclosure and presentation requirements concerning acquisitions and disposals of businesses. Primarily, the new rules amended (1) Rule 1-02(w) of Regulation S-X, Definition of Terms Used in Regulation S-X, Significant Subsidiary, (2) Rule 3-05 of Regulation S-X, Financial Statements of Businesses Acquired or to Be Acquired, (3) Rule 8-05 of Regulation S-X, Pro Forma Financial Information (which covers smaller reporting companies), and (4) Article 11 of Regulation S-X, Pro Forma Financial Information. In addition, new Rule 6-11 of Regulation S-X, Financial Statements of Funds Acquired or to Be Acquired, covering acquisitions specific to investment companies, was added. Corresponding changes were made to other Regulation S-X rules, various Securities Act and Se |
CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS | 6 Months Ended |
Sep. 30, 2021 | |
CASH AND CASH EQUIVALENTS | |
NOTE 3 - CASH AND CASH EQUIVALENTS | NOTE 3 – CASH AND CASH EQUIVALENTS As of September 30, 2021, and March 31, 2021, cash and cash equivalents consisted of the following: September 30, 2021 March 31, 2021 Current accounts with brokers $ 190,385 $ 94,494 Securities purchased under reverse repurchase agreements 164,240 248,946 Accounts with stock exchanges 149,361 98,521 Current accounts with commercial banks 90,886 75,903 Current accounts in clearing organizations 50,312 83,194 Current account with National Bank (Kazakhstan) 37,628 36,726 Current account with National Settlement Depository (Russia) 26,496 28,215 Petty cash in bank vault and on hand 22,970 25,830 Current account with Central Bank (Russia) 7,975 6,930 Current account with Central Depository (Kazakhstan) 172 69 Total cash and cash equivalents $ 740,425 $ 698,828 As of September 30, 2021, and March 31, 2021, with the exception of funds deposited with banks in the United States which may qualify for FDIC insurance up to $250,000, cash and cash equivalents were not insured. As of September 30, 2021, and March 31, 2021, the cash and cash equivalents balance included collateralized securities received under reverse repurchase agreements on the terms presented below: September 30, 2021 Interest rates and remaining contractual maturity of the agreements Average interest rate Up to 30 days 30-90 days Total Securities purchased under reverse repurchase agreements Corporate equity 0.39 % 141,873 - 141,873 Non-US sovereign debt 1.20 % 11,582 10 11,592 Corporate debt 3.16 % 10,775 - 10,775 Total securities sold under repurchase agreements $ 164,230 $ 10 $ 164,240 March 31, 2021 Interest rates and remaining contractual maturity of the agreements Average interest rate Up to 30 days 30-90 days Total Securities purchased under reverse repurchase agreements Non-US sovereign debt 1.07 % $ 101,258 $ - 101,258 Corporate debt 4.42 % 94,562 - 94,562 Corporate equity 2.76 % 51,564 - 51,564 US sovereign debt 0.50 % 1,562 - 1,562 Total securities sold under repurchase agreements $ 248,946 $ - $ 248,946 The securities received by the Company as collateral under reverse repurchase agreements are liquid trading securities with market quotes and significant trading volume. The fair value of collateral received by the Company under reverse repurchase agreements as of September 30, 2021, and March 31, 2021, was $181,330 and $272,586, respectively. |
RESTRICTED CASH
RESTRICTED CASH | 6 Months Ended |
Sep. 30, 2021 | |
RESTRICTED CASH | |
NOTE 4 - RESTRICTED CASH | NOTE 4 – RESTRICTED CASH Restricted cash for the periods ended September 30, 2021, and March 31, 2021, consisted of: September 30, 2021 March 31, 2021 Brokerage customers’ cash $ 349,097 $ 427,233 Deferred distribution payments 8,534 8,534 Reserve with Central Bank of Russia 2,109 1,758 Guarantee deposits 88 433 Total restricted cash $ 359,828 $ 437,958 As of September 30, 2021, and March 31, 2021, the Company’s restricted cash included the cash portion of the funds segregated in a special custody account for the exclusive benefit of its brokerage customers, as well as required reserves with the Central Bank of the Russian Federation which represents cash on hand balance requirements. Restricted cash also included a deferred distribution payment amount, which is a reserve held for distribution to shareholders who have not yet claimed their distributions from the 2011 sale of the Company’s oil and gas exploration and production operations of $8,534. This distribution is currently payable, subject to the entitled shareholders completing and submitting to the Company the necessary documentation to claim his, her or its distribution payments. The Company has no control over when, or if, an entitled shareholder will submit the necessary documentation to claim their distribution payment. The entire deferred distribution payment amount was held in cash at September 30, 2021, and March 31, 2021. A Company shareholder entitled to a portion of the distribution amount died before claiming the distribution. As a result of disputes between the individual’s putative heirs and potential owners of an entity that also claimed through the shareholder, the Company has been unable to determine who is legally entitled to receive the distribution payment. The putative estate asserted claims in Utah state court seeking payment of the distribution. The Company counterclaimed for interpleader and other claims and seeking a determination from the court as to who is rightfully entitled to receive the distribution payment. On October 5, 2021, the court granted the Company’s motion to dismiss, dismissing all claims by both parties without prejudice because plaintiffs failed to follow proper procedures and therefore the court lacked jurisdiction. For additional information regarding this matter see Part II, Item 1 Legal Proceedings of this quarterly report on Form 10-Q. |
TRADING AND AVAILABLEFORSALE SE
TRADING AND AVAILABLEFORSALE SECURITIES AT FAIR VALUE | 6 Months Ended |
Sep. 30, 2021 | |
TRADING AND AVAILABLEFORSALE SECURITIES AT FAIR VALUE | |
NOTE 5 - TRADING AND AVAILABLE-FOR-SALE SECURITIES AT FAIR VALUE | NOTE 5 – TRADING AND AVAILABLE-FOR-SALE SECURITIES AT FAIR VALUE As of September 30, 2021, and March 31, 2021, trading and available-for-sale securities consisted of: September 30, 2021 March 31, 2021 Corporate debt $ 618,428 $ 334,763 Non-US sovereign debt 261,442 333,619 Corporate equity 70,377 47,340 Exchange traded notes 17,028 9,638 US sovereign debt 7,206 10,828 Total trading securities $ 974,481 $ 736,188 Equity securities $ 1 $ 1 Total available-for-sale securities, at fair value $ 1 $ 1 As of September 30, 2021, the Company held debt securities of two issuers which individually exceeded 10% of the Company’s total trading securities - the Kazakhstan Sustainability Fund JSC (BBB credit rating) in the amount of $417,450 and Ministry of Finance of the Republic of Kazakhstan (BBB- credit rating) in the amount of $199,070. As of March 31, 2021, the Company held debt securities of two issuers which individually exceeded 10% of the Company’s total trading securities - the Ministry of Finance of the Republic of Kazakhstan and the Kazakhstan Sustainability Fund JSC in the amounts of $293,451 and $193,677, respectively. The Company recognized no other-than-temporary impairment in accumulated other comprehensive income. The fair value of assets and liabilities is determined using observable market data based on recent trading activity. Where observable market data is unavailable due to a lack of trading activity, the Company utilizes internally developed models to estimate fair value and independent third parties to validate assumptions, when appropriate. Estimating fair value requires significant management judgment, including benchmarking to similar instruments with observable market data and applying appropriate discounts that reflect differences between the securities that the Company is valuing and the selected benchmark. Depending on the type of securities owned by the Company, other valuation methodologies may be required. Measurement of fair value is classified within a hierarchy based upon the transparency of inputs used in the valuation of an asset or liability. Classification within the hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The valuation hierarchy contains three levels: · Level 1 - Valuation inputs are unadjusted quoted market prices for identical assets or liabilities in active markets. · Level 2 - Valuation inputs are quoted market prices for identical assets or liabilities in markets that are not active, quoted market prices for similar assets and liabilities in active markets, and other observable inputs directly or indirectly related to the asset or liability being measured. · Level 3 - Valuation inputs are unobservable and significant to the fair value measurement. The following tables present securities assets in the Condensed Consolidated Financial Statements or disclosed in the Notes to the Condensed Consolidated Financial Statements at fair value on a recurring basis as of September 30, 2021, and March 31, 2021: Fair Value Measurements at September 30, 2021 using Weighted Average Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Units Interest Rate Total (Level 1) (Level 2) (Level 3) Corporate debt 8.3 % $ 618,428 $ 618,050 $ - $ 378 Non-U.S. sovereign debt 7.88 % 261,442 259,480 - 1,962 Corporate equity - 70,377 19,710 50,291 376 Exchange traded notes - 17,028 17,028 - - U.S. sovereign debt 1.6 % 7,206 7,206 - - Total trading securities $ 974,481 $ 921,474 $ 50,291 $ 2,716 Equity securities $ 1 $ - $ - $ 1 Total available-for-sale securities, at fair value $ 1 $ - $ - $ 1 Fair Value Measurements at March 31, 2021 using Weighted Average Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Units Interest Rate Total (Level 1) (Level 2) (Level 3) Corporate debt 9.22 % $ 334,763 $ 334,403 $ - $ 360 Non-U.S. sovereign debt 8.06 % 333,619 333,619 - - Corporate equity - 47,340 28,630 1 18,709 U.S. sovereign debt 1.68 % 10,828 10,828 - - Exchange traded notes - 9,638 9,638 - - Total trading securities $ 736,188 $ 717,118 $ 1 $ 19,069 Equity securities - $ 1 $ - $ - $ 1 Total available-for-sale securities, at fair value $ 1 $ - $ - $ 1 The table below presents the valuation techniques and significant level 3 inputs used in the valuation as of September 30, 2021, and March 31, 2021. The table is not intended to be all inclusive, but instead captures the significant unobservable inputs relevant to the determination of fair value. Type Valuation Technique FV as of September 30, 2021 FV as of March 31, 2021 Significant Unobservable Inputs % Corporate equity DCF $ - $ 18,408 Discount rate 10.6 % Estimated number of years 9 years Corporate debt DCF $ 374 $ 360 Discount rate 16.5 % Estimated number of years 9 years Corporate equity DCF $ 380 $ 301 Discount rate 18.5 % Estimated number of years 9 years Non-US sovereign debt DCF $ 1,030 - Discount rate 13.3 % Estimated number of years 6 months Non-US sovereign debt DCF $ 932 - Discount rate 13.8 % Estimated number of years 1 year Total $ 2,716 $ 19,069 As of September 30, 2021, shares of SPBX held by the Company were transferred from level 3 to level 2. During the six months ended September 30, 2021, market trades of SPBX shares were executed in the market, and market data for these shares became available. The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the six months ended September 30, 2021, and the year ended March 31, 2021: Trading securities Available-for-sale securities Balance as of March 31, 2021 $ 19,069 $ 1 Reclassification to level 2 (18,408 ) - Purchase of investments that use Level 3 inputs 1,965 - Revaluation of investments that use Level 3 inputs 90 - Balance as of September 30, 2021 $ 2,716 $ 1 Trading securities Available-for-sale securities Balance as of March 31, 2020 $ 11,259 $ 1 Sale of investments that use Level 3 inputs (2 ) - Purchase of investments that use Level 3 inputs 834 - Revaluation of investments that use Level 3 inputs 6,978 - Balance as of March 31, 2021 $ 19,069 $ 1 The table below presents the amortized cost, unrealized gains and losses accumulated in other comprehensive income, and fair value of available-for-sale securities as of September 30, 2021, and March 31, 2021: September 30, 2021 Assets measured at amortized cost Unrealized loss accumulated in other comprehensive income/(loss) Assets measured at fair value Equity securities $ 1 $ - $ 1 Balance as of September 30, 2021 $ 1 $ - $ 1 March 31, 2021 Assets measured at amortized cost Unrealized loss accumulated in other comprehensive income/(loss) Assets measured at fair value Equity securities $ 1 $ - $ 1 Balance as of March 31, 2021 $ 1 $ - $ 1 |
BROKERAGE AND OTHER RECEIVABLES
BROKERAGE AND OTHER RECEIVABLES NET | 6 Months Ended |
Sep. 30, 2021 | |
BROKERAGE AND OTHER RECEIVABLES NET | |
NOTE 6 - BROKERAGE AND OTHER RECEIVABLES, NET | NOTE 6 – BROKERAGE AND OTHER RECEIVABLES, NET Brokerage and other receivables as of September 30, 2021, and March 31, 2021, consisted of: September 30, 2021 March 31, 2021 Margin lending receivables $ 308,256 $ 58,095 Receivables from brokerage clients 4,134 4,199 Long-term installments receivables 1,210 1,280 Receivable from sale of securities 910 484 Receivable for underwriting and market-making services 887 564 Bank commissions receivable 443 767 Dividends accrued 23 1,392 Bonds coupon receivable 3 - Other receivables 2,702 56 Allowance for receivables (1,441 ) (2,036 ) Total brokerage and other receivables, net $ 317,124 $ 64,801 On September 30, 2021, and March 31, 2021, amounts due from a single related party customer were $215,342 and $8,948, respectively or 69% and 14% respectively, of total brokerage and other receivables, net. Based on historical data, the Company considers receivables due from related parties fully collectible. As of September 30, 2021, and March 31, 2021, using historical and statistical data, the Company recorded an allowance for brokerage receivables in the amounts of $1,441 and $2,036, respectively. |
LOANS ISSUED
LOANS ISSUED | 6 Months Ended |
Sep. 30, 2021 | |
LOANS ISSUED | |
NOTE 7 - LOANS ISSUED | NOTE 7 – LOANS ISSUED Loans issued as of September 30, 2021, consisted of the following: Amount Outstanding, net of allowance Due Dates Average Interest Rate Fair Value of Collateral Loan Currency Uncollateralized bank customer loans 13,428 October 2021 - September 2025 12.10 % - KZT Mortgage loans 11,190 October 2021 – September 2036 14.83 % 11,089 KZT Subordinated loan 5,099 December 2022 - April 2024 4.89 % - USD Bank customer loans 1,520 November 2021-September 2045 12.00 % 1,000 RUB Subordinated loan 1,392 September 2029 7.00 % - UAH Uncollateralized non-bank loan 18 December 2021 2.00 % - EUR $ 32,647 During the six months ended September 30, 2021, the Company entered into agreements with a related party microfinance organization to purchase uncollateralized consumer retail loans. The agreements provide the Company the ability to sell back to the microfinance organization up to $3,000 of the total loans purchased if such loans become delinquent for more than 20 days. The Company has determined that it has assumed substantially all of the risks and rewards from the transferor of the loans, with the exception of the amount it has the right to sell back to the transferor, accordingly the Company has received control of the loans and has recognized the loans on its Condensed Consolidated Balance Sheets. During the six months ended September 30, 2021, the Company purchased loans in the aggregate amount of $19,474 and sold back loans totaling $2,860 to the microfinance organization. As of September 30, 2021, the Company held outstanding loans purchased from the microfinance organization totaling $14,615 net of an allowance of $1,187. Loans issued as of March 31, 2021, consisted of the following: Amount Outstanding Due Dates Average Interest Rate Fair Value of Collateral Loan Currency Subordinated loan $ 5,033 December 2022-April 2024 3.69 % - USD Uncollateralized non-bank loan 2,382 January 2022 – February 2022 3.00 % - USD Uncollateralized non-bank loan 1,384 May 2021 13.00 % - RUB Subordinated loan 1,331 September 2029 7.00 % - UAH Bank customer loans 880 March 2024 15.41 % 729 KZT Bank customer loans 657 July 2021- September 2045 11.27 % 611 RUB $ 11,667 |
DEFERRED TAX LIABILITIES
DEFERRED TAX LIABILITIES | 6 Months Ended |
Sep. 30, 2021 | |
DEFERRED TAX LIABILITIES | |
NOTE 8 - DEFERRED TAX LIABILITIES | NOTE 8 – DEFFERED TAXES LIABILITIES The Company is subject to taxation in the Russian Federation, Kazakhstan, Kyrgyzstan, Cyprus, Ukraine, Uzbekistan, Germany, Azerbaijan and the United States of America. The tax rates used for deferred tax assets and liabilities as of September 30, 2021, and March 31, 2021, were 21% for the U.S., 20% for the Russian Federation, Kazakhstan, and Kyrgyzstan, 31% for Germany, 12.5% for Cyprus, 18% for Ukraine, 2% for Azerbaijan and 15% for Uzbekistan. Deferred tax assets and liabilities of the Company are comprised of the following: September 30, 2021 March 31, 2021 Deferred tax assets: Tax losses carryforward $ 310 $ 316 Accrued liabilities 520 236 Depreciation - 16 Revaluation on trading securities 415 - Valuation allowance (310 ) (316 ) Deferred tax assets $ 935 $ 252 Deferred tax liabilities: Revaluation on trading securities $ 4,560 $ 2,546 Fixed and Intangible Assets 1,769 1,568 Subordinated debt 502 523 Deferred tax liabilities $ 6,831 $ 4,637 Net deferred tax liabilities $ (5,896 ) $ (4,385 ) During the six months ended September 30, 2021, and 2020, the effective tax rate was equal to 13.4% and 16.1%, respectively. Tax loss carryforwards as of September 30, 2021, and March 31, 2021, were $310 and $316, respectively, and are subject to income tax in the Ukraine and Uzbekistan. |
SECURITIES REPURCHASE AGREEMENT
SECURITIES REPURCHASE AGREEMENT OBLIGATIONS | 6 Months Ended |
Sep. 30, 2021 | |
SECURITIES REPURCHASE AGREEMENT OBLIGATIONS | |
NOTE 9 - SECURITIES REPURCHASE AGREEMENT OBLIGATIONS | NOTE 9 – SECURITIES REPURCHASE AGREEMENT OBLIGATIONS As of September 30, 2021, and March 31, 2021, trading securities included collateralized securities subject to repurchase agreements as described in the following table: September 30, 2021 Interest rates and remaining contractual maturity of the agreements Average interest rate Up to 30 days 30-90 days Total Securities sold under repurchase agreements Corporate debt 9.21 % $ 376,018 $ 5,921 $ 381,939 Non-U.S. sovereign debt 8.92 % 153,124 - 153,124 US sovereign debt 0.35 % 2,214 - 2,214 Total $ 531,356 $ 5,921 $ 537,277 March 31, 2021 Interest rate and remaining contractual maturity of the agreements Average interest rate Up to 30 days 30-90 days Total Securities sold under repurchase agreements Non-US sovereign debt 9.28 % $ 229,812 $ - $ 229,812 Corporate debt 9.27 % 189,337 - 189,337 Corporate equity 3.78 % 5,757 - 5,757 US sovereign debt 0.40 % 1,809 - 1,809 Total securities sold under repurchase agreements $ 426,715 $ - $ 426,715 The fair value of collateral pledged under repurchase agreements as of September 30, 2021, and March 31, 2021, was $550,297 and $426,669, respectively. Securities pledged as collateral by the Company under repurchase agreements are liquid trading securities with market quotes and significant trading volume. |
CUSTOMER LIABILITIES
CUSTOMER LIABILITIES | 6 Months Ended |
Sep. 30, 2021 | |
CUSTOMER LIABILITIES | |
NOTE 10 - CUSTOMER LIABILITIES | NOTE 10 – CUSTOMER LIABILITIES The Company recognizes customer liabilities associated with funds held by our brokerage and bank customers. Customer liabilities consist of: September 30, 2021 March 31, 2021 Brokerage customers $ 1,005,653 $ 938,086 Banking customers 213,711 225,611 Total $ 1,219,364 $ 1,163,697 As of September 30, 2021, banking customer liabilities consisted of current accounts and deposits of $106,800 and $106,911 respectively. As of March 31, 2021, banking customer liabilities consisted of current accounts and deposits of $133,493 and $92,118, respectively. |
TRADE PAYABLES
TRADE PAYABLES | 6 Months Ended |
Sep. 30, 2021 | |
TRADE PAYABLES | |
NOTE 11 - TRADE PAYABLES | NOTE 11 – TRADE PAYABLES Trade payables of the Company is comprised of the following: September 30, 2021 March 31, 2021 Margin lending payable $ 44,668 $ 20,120 Payables to suppliers of goods and services 3,604 1,708 Coupon payable 2,226 - Trade payable for securities purchased 295 264 Guarantee fee received 30 - Advances received 1 - Other 247 212 Total $ 51,071 $ 22,304 |
SECURITIES SOLD NOT YET PURCHAS
SECURITIES SOLD NOT YET PURCHASED AT FAIR VALUE | 6 Months Ended |
Sep. 30, 2021 | |
SECURITIES SOLD NOT YET PURCHASED AT FAIR VALUE | |
NOTE 12- SECURITIES SOLD, NOT YET PURCHASED - AT FAIR VALUE | NOTE 12 – SECURITIES SOLD, NOT YET PURCHASED – AT FAIR VALUE As of September 30, 2021, and March 31, 2021, the Company’s securities sold, not yet purchased at fair value was $14,867 and $8,592, respectively. During the six months ended September 30, 2021, the Company sold shares that were not owned by it in the amount of $5,878 and closed short positions in the amount of $23. During the six months ended September 30, 2021, the Company recognized a loss on the change in the fair value of financial liabilities in the amount of $420 in the Condensed Consolidated Statements of Operations and Statements of Other Comprehensive Income. A short sale involves the sale of a security that is not owned with the expectation of purchasing the same security (or a security exchangeable) at a later date at a lower price. A short sale involves the risk of a theoretically unlimited increase in the market price of the security that would result in a theoretically unlimited loss. |
LOANS RECEIVED
LOANS RECEIVED | 6 Months Ended |
Sep. 30, 2021 | |
LOANS RECEIVED | |
NOTE 13 - LOANS RECEIVED | NOTE 13 – LOANS RECEIVED Loans received by the Company includes: Company Lender September 30, 2021 March 31, 2021 Interest Rate Term Maturity dates Freedom Holding Corp. Non-Bank $ 3,456 $ 3,373 5.00 % 14 months 12/31/21 Total $ 3,456 $ 3,373 As of September 30, 2021, non-bank loans received were unsecured. As of September 30, 2021, and March 31, 2021, accrued interest on the loans totaled $156 and $73, respectively. |
DEBT SECURITIES ISSUED
DEBT SECURITIES ISSUED | 6 Months Ended |
Sep. 30, 2021 | |
DEBT SECURITIES ISSUED | |
NOTE 14 - DEBT SECURITIES ISSUED | NOTE 14 – DEBT SECURITIES ISSUED Outstanding debt securities of the Company include the following: September 30, 2021 March 31, 2021 Debt securities issued denominated in USD $ 50,541 $ 60,743 Debt securities issued denominated in RUB 6,872 6,605 Accrued interest 833 1,095 Total $ 58,246 $ 68,443 As of September 30, 2021 and March 31, 2021, the Company’s outstanding debt securities had fixed annual coupon rates ranging from 6.5% to 12% and maturity dates ranging from February 2022 to January 2023. The Company’s debt securities include bonds of Freedom RU issued under Russian Federation law, which trade on the MOEX. The Company’s debt securities also include $20,498 of FRHC notes issued from December 2019 to February 2020. The FRHC notes, denominated in U.S. dollars, bear interest at an annual rate of 7.00% and are due in December 2022. The FRHC notes were issued under Astana International Financial Centre law and trade on the AIX. On May 29, 2021, the Company retired U.S. dollar denominated 8% Freedom KZ bonds that had a carrying value of $10,477 including interest accrued of $274 as of March 31, 2021. Debt securities issued are initially recognized at the fair value of the consideration received, less directly attributable transaction costs. |
NET GAIN ON TRADING SECURITIES
NET GAIN ON TRADING SECURITIES | 6 Months Ended |
Sep. 30, 2021 | |
NET GAIN ON TRADING SECURITIES | |
NOTE 15 - NET GAIN ON TRADING SECURITIES | NOTE 15 – NET GAIN ON TRADING SECURITIES Net gain on trading securities is comprised of: Three months ended September 30, 2021 Three months ended September 30, 2020 Net gain recognized during the period on trading securities sold during the period $ 143,724 $ 5,883 Net unrealized gain/(loss) recognized during the reporting period on trading securities still held at the reporting date 31,528 2,419 Net gain recognized during the period on trading securities $ 175,252 $ 8,302 Six months ended September 30, 2021 Six months ended September 30, 2020 Net gain recognized during the period on trading securities sold during the period $ 149,536 $ 17,123 Net unrealized gain/(loss) recognized during the reporting period on trading securities still held at the reporting date 35,616 263 Net gain recognized during the period on trading securities $ 185,152 $ 17,386 As of September 30, 2021, and March 31, 2021, the Company held in its proprietary trading portfolio shares of stock of SPBX at fair value of $50,083 and $18,408, respectively. During the three months ended September 30, 2021, the Company exchanged approximately 11,500 shares of its stock of SPBX for units in the closed-end unit investment combined fund “SPB fund” (the “SPBX ETF”). In September 2021, the Company sold its SPBX ETF units to approximately 15,000 investors through placement agents for net proceeds of $155,673. As a result, during the three months ended September 30, 2021, the Company recognized gains on trading securities of $179,015, which included $141,067 of realized gain and $37,948 of net unrealized gain from revaluation of the SPBX shares the Company still held at September 30, 2021. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Sep. 30, 2021 | |
RELATED PARTY TRANSACTIONS | |
NOTE 16 - RELATED PARTY TRANSACTIONS | NOTE 16 – RELATED PARTY TRANSACTIONS During the three months ended September 30, 2021, and 2020, the Company earned commission income from related parties in the amounts of $84,444 and $41,167, respectively. During the six months ended September 30, 2021, and 2020, the Company earned commission income from related parties in the amounts of $150,416 and $71,957, respectively. Commission income earned from related parties is comprised primarily of brokerage commissions and commissions for money transfers by brokerage clients. During the three months ended September 30, 2021, and 2020, the Company recorded stock-based compensation expense for restricted stock grants to related parties in the amount of $385 and $0, respectively. During the six months ended September 30, 2021, and 2020, the Company recorded stock-based compensation expense for restricted stock grants to related parties in the amount of $566 and $0, respectively. As of September 30, 2021, and March 31, 2021, the Company had cash and cash equivalents held in brokerage accounts of related parties totaling $22,890 and $12,256, respectively. As of September 30, 2021, and March 31, 2021, the Company had bank commission receivables and receivables from brokerage clients from related parties totaling $268 and $962, respectively. Brokerage and other receivables from related parties result principally from commissions receivable on the brokerage operations of related parties. As of September 30, 2021, and March 31, 2021, the Company had margin lending receivables with related parties totaling $216,171 and $9,886, respectively. As of September 30, 2021, and March 31, 2021, the Company had margin lending payables to related parties, totaling $44,327 and $13,810, respectively. As of September 30, 2021, and March 31, 2021, the Company had accounts payable due to a related party totaling $240 and $339, respectively. As of September 30, 2021, and March 31, 2021, the Company had financial liability with related parties totaling $1,876 and $1,707, respectively. As of September 30, 2021, and March 31, 2021, the Company had customer liabilities to related parties totaling $359,384 and $327,610, respectively. As of September 30, 2021, and March 31, 2021, the Company had restricted customer cash deposited in current and brokerage accounts with related parties in the amounts of $248,371 and $156,878. During the six months ended September 30, 2021, the Company purchased loans from a related party microfinance organization in the aggregate amount of $19,474 and sold back loans totaling $2,860. As of September 30, 2021, and March 31, 2021, the Company held loans purchased from related parties, net of alloances in the amounts of $13,428 and $0. In July 2021, to comply with certain foreign ownership restrictions relating to registered Ukrainian broker-dealers, the Company sold 23.88% of the outstanding equity interest of Freedom UA to Askar Tashtitov, the Company’s president, for $416. For additional information regarding this transaction, see Note 1 – Description of Business. Brokerage and related banking services, including margin lending, were provided to related parties pursuant to standard client account agreements and at standard market rates. |
STOCKHOLDERS EQUITY
STOCKHOLDERS EQUITY | 6 Months Ended |
Sep. 30, 2021 | |
STOCKHOLDERS EQUITY | |
NOTE 17 - STOCKHOLDERS' EQUITY | NOTE 17 – STOCKHOLDERS’ EQUITY During the six months ended September 30, 2021, non-qualified stock options to purchase 60,000 shares were exercised at a strike price of $1.98 per share for total proceeds of $119. During the six months ended September 30, 2020, no outstanding nonqualified stock options were exercised. On May 18, 2021, the Company awarded restricted stock grants totalling 1,031,500 shares of its common stock to employees and consultants of the Company, including two executive officers of the Company. Of the 1,031,500 shares awarded pursuant to the restricted stock grant awards, 200,942 shares are subject to one-year vesting, 211,658 shares are subject to two-year vesting and 206,300 shares per year are subject to three, four and five-year vesting, respectively. On December 30, 2020, the Company awarded restricted stock grants in the amount of 15,000 shares of its common stock to three employees. Of the 15,000 shares awarded pursuant to the restricted stock grant awards, 4,500 shares are subject to one-year vesting conditions, 4,500 shares are subject to two-year vesting conditions and 6,000 shares are subject to three-year vesting conditions. The Company recorded stock-based compensation expense for restricted stock grants in the amount of $4,561 and $6,722 during the three months and six months ended September 30, 2021, respectively. During the three and six months ended September 30, 2020, the Company recorded stock-based compensation expense for restricted stock grants and stock options in the amount of $530 and $1,055, respectively. |
STOCKBASED COMPENSATION
STOCKBASED COMPENSATION | 6 Months Ended |
Sep. 30, 2021 | |
STOCKBASED COMPENSATION | |
NOTE 18 - STOCK-BASED COMPENSATION | NOTE 18 – STOCK BASED COMPENSATION During the six months ended September 30, 2021, a total of 1,031,500 restricted shares were awarded to key employees. The compensation expense related to restricted stock grants was $4,561 during the three months ended September 30, 2021, and $476 during three months ended September 30, 2020. The compensation expense related to restricted stock grants was $6,722 during the six months ended September 30, 2021, and $947 during six months ended September 30, 2020. As of September 30, 2021, there was $33,459 of total unrecognized compensation cost related to non-vested shares of common stock granted. The cost is expected to be recognized over a weighted average period of 4.62 years. The Company has determined the fair value of restricted shares awarded during the six months ended September 30, 2021 using the Monte Carlo valuation model based on the following key assumptions: Term (years) 5 Volatility 41.5 % Risk-free rate 0.06 % The table below summarizes the activity for the Company’s restricted stock outstanding during the six months ended September 30, 2021: Shares Weighted Average Fair Value Outstanding, at March 31, 2021 15,000 $ 775 Granted 1,031,500 39,465 Vested - - Forfeited/cancelled/expired - - Outstanding, at September 30, 2021 1,046,500 $ 40,240 During the six months ended September 30, 2021 and 2020, no stock options were awarded. Total compensation expense related to outstanding options was $0 for the three months ended September 30, 2021, and $54 for the three months ended September 30, 2020. During the six months ended September 30, 2021, options to purchase a total of 60,000 shares were exercised. The Company has determined the fair value of such stock options using the Black Scholes option valuation model based on the following key assumptions: Term (years) 3 Volatility 165.33 % Risk-free rate 1.66 Stock-based compensation expense for the cost of the awards granted is based on the grant-date fair value. For stock option awards, the fair value is estimated at the date of grant using the Black-Scholes option-pricing model. This model requires the input of highly subjective assumptions, changes to which can materially affect the fair value estimate. Additionally, there may be other factors that would otherwise have a significant effect on the value of employee stock options granted but are not considered by the model. Accordingly, while management believes that the Black-Scholes option-pricing model provides a reasonable estimate of fair value, the model does not necessarily provide the best single measure of fair value for the Company’s employee stock options. The following is a summary of stock option activity for the six months ended September 30, 2021: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (In Years) Aggregate Intrinsic Value Outstanding, March 31, 2021 60,000 $ 1.98 6.52 $ 3,083 Granted - - - - Exercised (60,000 ) 1.98 - 3,742 Forfeited/cancelled/expired - - - - Outstanding, at September 30, 2021 - - - $ - Exercisable, at September 30, 2021 - $ - - $ - |
LEASES
LEASES | 6 Months Ended |
Sep. 30, 2021 | |
LEASES | |
NOTE 19 - LEASES | NOTE 19 – LEASES The Company determines whether a contract contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company must discount lease payments based on an estimate of its incremental borrowing rate. The table below presents the lease related assets and liabilities recorded on the Company’s consolidated balance sheets as of September 30, 2021: Classification on Balance Sheet September 30, 2021 Assets Operating lease assets Right-of-use assets $ 16,471 Total lease assets $ 16,471 Liabilities Operating lease liability Operating lease obligations $ 16,298 Total lease liability $ 16,298 Lease obligations at September 30, 2021, consisted of the following: Twelve months ending March 31, 2022 - remaining after September 30 $ 4,291 2023 7,618 2024 3,511 2025 2,110 2026 1,327 Thereafter 330 Total payments 19,187 Less: amounts representing interest (2,889 ) Lease liability, net $ 16,298 Weighted average remaining lease term (in months) 26 Weighted average discount rate 12 % Lease commitments for short term operating leases as of September 30, 2021, are approximately $626. The Company’s rent expense for office space was $653 and $769 for the three and six months ended September 30, 2021, and $70 and $171 for the three and six months ended September 30, 2020, respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Sep. 30, 2021 | |
COMMITMENTS AND CONTINGENCIES | |
NOTE 20 - COMMITMENTS AND CONTINGENCIES | NOTE 20 – COMMITMENTS AND CONTINGENCIES Freedom Bank KZ is a party to certain off-balance sheet financial instruments. These financial instruments include guarantees and unfunded commitments under existing lines of credit. These commitments expose the Company to varying degrees of credit and market risk which are essentially the same as those involved in extending loans to customers and are subject to the same credit policies used in underwriting loans. Collateral may be obtained based on the Company’s credit evaluation of the counterparty. The Company’s maximum exposure to credit loss is represented by the contractual amount of these commitments. Unfunded commitments under lines of credit Unfunded commitments under lines of credit include commercial, commercial real estate, home equity and consumer lines of credit to existing customers. These commitments may mature without being fully funded. Bank guarantees Bank guarantees are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. These guarantees are primarily issued to support trade transactions or guarantee arrangements. The credit risk involved in issuing guarantees is essentially the same as that involved in extending loan facilities to customers. A significant portion of the issued guarantees are collateralized by cash. Total lending related commitments outstanding at September 30, 2021, were as follows: As of September 30, 2021 Bank guarantees $ 7,089 Unfunded commitments under lines of credit 6,250 Total $ 13,339 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Sep. 30, 2021 | |
SUBSEQUENT EVENTS | |
NOTE 21 - SUBSEQUENT EVENTS | NOTE 21 – SUBSEQUENT EVENTS The Company has performed an evaluation of subsequent events through the time of filing this quarterly report on Form 10-Q with the SEC. During this period the Company did not have any additional material recognizable subsequent events. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Sep. 30, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Accounting principles | The Company’s accounting policies and accompanying condensed consolidated financial statements conform to accounting principles generally accepted in the United States of America (U.S. GAAP). These financial statements have been prepared on the accrual basis of accounting. |
Basis of presentation and principles of consolidation | The Company’s consolidated financial statements present the consolidated accounts of FRHC, Freedom RU, Freedom Bank RU, Freedom KZ, Freedom Global, Freedom Bank KZ, Freedom SPC, Freedom Commercial, Freedom EU, Freedom Technologies, Freedom GE, Prime UK, Freedom UZ, Freedom AZ, PrimeEx, and FFIN. All significant inter-company balances and transactions have been eliminated from the consolidated financial statements. |
Consolidation of variable interest entities | In accordance with accounting standards regarding consolidation of variable interest entities (“VIEs”), VIEs are generally entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision-making ability. VIEs must be evaluated to determine the primary beneficiary of the risks and rewards of the VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes. |
Use of estimates | The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management believes that the estimates utilized in preparing its financial statements are reasonable and prudent. Actual results could differ from those estimates. |
Revenue and expense recognition | Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC Topic 606”), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services promised to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. A significant portion of the Company’s revenue-generating transactions are not subject to ASC Topic 606, including revenue generated from financial instruments, such as loans and investment securities, as these activities are subject to other U.S. GAAP guidance discussed elsewhere within these disclosures. Descriptions of the Company’s revenue-generating activities that are within the scope of ASC Topic 606, which are presented in the Condensed Consolidated Statements of Operations and Statements of Other Comprehensive Income as components of non-interest income are as follows: · Commissions on brokerage services; · Commissions on banking services (money transfers, foreign exchange operations and other); and · Commissions on investment banking services (underwriting, market making, and bondholders’ representation services). Under Topic 606, the Company is required to recognize commission fees when they are probable and there is not a significant chance of reversal in the future. The Company recognizes revenue in accordance with this core principle by applying the following steps: · Step 1: Identify the contract(s) with a customer - A contract is an agreement between two or more parties that creates enforceable rights and obligations. · Step 2: Identify the performance obligations in the contract - A contract includes promises to transfer goods or services to a customer. If those goods or services are distinct, the promises are performance obligations and are accounted for separately. · Step 3: Determine the transaction price - The transaction price is the amount of consideration in a contract to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The transaction price can be a fixed amount of customer consideration, but it may sometimes include variable consideration or consideration in a form other than cash. The transaction price also is adjusted for the effects of the time value of money if the contract includes a significant financing component and for any consideration payable to the customer. If the consideration is variable, an entity estimates the amount of consideration to which it will be entitled in exchange for the promised goods or services. The estimated amount of variable consideration will be included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. · Step 4: Allocate the transaction price to the performance obligations in the contract - An entity typically allocates the transaction price to each performance obligation on the basis of the relative standalone selling prices of each distinct good or service promised in the contract. If a standalone selling price is not observable, an entity estimates it. Sometimes, the transaction price includes a discount or a variable amount of consideration that relates entirely to a part of the contract. · Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation - An entity recognizes revenue when (or as) it satisfies a performance obligation by transferring a promised good or service to a customer (which is when the customer obtains control of that good or service). The amount of revenue recognized is the amount allocated to the satisfied performance obligation. A performance obligation may be satisfied at a point in time (typically for promises to transfer goods to a customer) or over time (typically for promises to transfer services to a customer). For performance obligations satisfied over time, an entity recognizes revenue over time by selecting an appropriate method for measuring the entity’s progress toward complete satisfaction of that performance obligation. |
Interest income | Interest income on loans issued, trading securities and reverse repurchase agreement obligations are recognized based on the contractual provisions of the underlying arrangements. Loan premiums and discounts are deferred and generally amortized into interest income as yield adjustments over the contractual life and/or commitment period using the effective interest method. Unamortized premiums, discounts and other basis adjustments on trading securities are generally recognized in interest income over the contractual lives of the securities using the effective interest method. |
Derivative financial instruments | In the normal course of business, the Company invests in various derivative financial contracts including futures. Derivatives are initially recognized at fair value at the date a derivative contract is entered into and are subsequently re-measured to their fair value at each reporting date. The fair values are estimated based on quoted market prices or pricing models that take into account the current market and contractual prices of the underlying instruments and other factors. Derivatives are carried as assets when their fair value is positive and as liabilities when it is negative. |
Loans | The Company’s loan portfolio is divided into three portfolio segments: credit card, mortgages and retail banking loans. Credit card consists of loans provided to individuals and businesses through the cards. Mortgage loans consist of loans provided to individuals to purchase real estate, which is used as collateral for the loan. Retail banking loans consist of unsecured loans provided to individuals. |
Loans Acquired | All purchased loans are initially recorded at fair value, which includes consideration of expected future losses, at the date of the loan acquisition. To determine the fair value of loans at the date of acquisition, the Company estimates the discounted contractual cash flows due using an observable market rate of interest, adjusted for factors such as probable default rates of the borrowers, and the loan terms that a market participant would consider in determining fair value. In determining fair value, contractual cash flows are adjusted to include prepayment estimates based upon historical payment trends, forecasted default rates and loss severities and other relevant factors. The difference between the fair value and the contractual cash flows is recorded as a loan premium or discount, which may relate to either credit or non-credit factors, at acquisition. The Company accounts for purchased loans under the accounting guidance for purchased financial assets with credit deterioration when, at the time of purchase, the loans have experienced a more-than-insignificant deterioration in credit quality since origination. The Company recognizes an allowance for credit losses on purchased loans that have not experienced a more-than-insignificant deterioration in credit quality since origination at the time of purchase through earnings in a manner that is consistent with originated loans. The policies relating to the allowance for credit losses on loans is described below in the “Estimate of Incurred Loan Losses” section of this Note. Estimate of Incurred Loan Losses. The allowance represented management’s current estimate of incurred loan losses inherent in the Company’s loan portfolio as of each balance sheet date. The provision for credit losses reflected credit losses the Company believed had been incurred and would eventually be recognized over time through charge-offs. Management performed a quarterly analysis of the Company’s loan portfolio to determine if impairment had occurred and to assess the adequacy of the allowance based on historical and current trends as well as other factors affecting credit losses. The Company applied separate calculations of the allowance for its credit cards, mortgages and retail loan portfolios. Based on the adopted methodology, the Company estimated the probability of default based on historical default rates, adjusted for certain macro indicators, such as GDP, average exchange rates, unemployment rate and real wage index. Loss given default is calculated based on the collateral coverage of the loans. The Company’s allowance for loan losses consisted of two components that were allocated to cover the estimated probable losses in each loan portfolio based on the results of the Company’s detailed review and loan impairment assessment process: (i) a component for loans collectively evaluated for impairment; and (ii) an asset-specific component for individually impaired loans. The component of the allowance related to credit card, mortgages and retail banking loans that the Company collectively evaluated for impairment was based on a statistical calculation and on its historical loss experience for loans with similar risk characteristics and consideration of the current credit quality of the portfolio. The asset-specific component of the allowance includes smaller-balance homogeneous credit card and retail banking loans whose terms have been modified in a troubled debt restructuring and larger-balance nonperforming, non-homogeneous commercial banking loans. The Company generally measured the asset-specific component of the allowance based on the difference between the recorded investment of individually impaired loans and the present value of expected future cash flows. In addition to the allowance, the Company also estimated probable losses related to contractually binding unfunded lending commitments. |
Functional currency | Management has adopted ASC 830, Foreign Currency Translation Matters as it pertains to its foreign currency translation. The Company’s functional currencies are the Russian ruble, European euro, U.S. dollar, Ukrainian hryvnia, Uzbekistani som, Kazakhstani tenge, Kyrgyzstani som, UK pound sterling and the Azerbaijani manat, and its reporting currency is the U.S. dollar. For financial reporting purposes, foreign currencies are translated into U.S. dollars as the reporting currency. Monetary assets and liabilities denominated in foreign currencies are translated into U.S. dollars using the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Average monthly rates are used to translate revenues and expenses. Translation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders’ equity as “Accumulated other comprehensive loss”. |
Cash and cash equivalents | Cash and cash equivalents are generally comprised of certain highly liquid investments with maturities of three months or less at the date of purchase. Cash and cash equivalents include reverse repurchase agreements which are recorded at the amounts at which the securities were acquired or sold plus accrued interest. |
Securities reverse repurchase and repurchase agreements | A reverse repurchase agreement is a transaction in which the Company purchases financial instruments from a seller, typically in exchange for cash, and simultaneously enters into an agreement to resell the same or substantially the same financial instruments to the seller for an amount equal to the cash or other consideration exchanged plus interest at a future date. Securities purchased under reverse repurchase agreements are accounted for as collateralized financing transactions and are recorded at the contractual amount for which the securities will be resold, including accrued interest. Financial instruments purchased under reverse repurchase agreements are recorded in the financial statements as cash placed on deposit collateralized by securities and classified as cash and cash equivalents in the Condensed Consolidated Balance Sheets. A repurchase agreement is a transaction in which the Company sells financial instruments to another party, typically in exchange for cash, and simultaneously enters into an agreement to reacquire the same or substantially the same financial instruments from the buyer for an amount equal to the cash or other consideration exchanged plus interest at a future date. These agreements are accounted for as collateralized financing transactions. The Company retains the financial instruments sold under repurchase agreements and classifies them as trading securities in the Condensed Consolidated Balance Sheets. The consideration received under repurchase agreements is classified as securities repurchase agreement obligations in the Condensed Consolidated Balance Sheets. The Company enters into reverse repurchase, repurchase, securities borrowed and securities loaned transactions to, among other things, acquire securities to leverage and grow its proprietary trading portfolio, cover short positions and settle other securities obligations, to accommodate customers’ needs and to finance its inventory positions. The Company enters into these transactions in accordance with normal market practice. Under standard terms for repurchase transactions, the recipient of collateral has the right to sell or repledge the collateral, subject to returning equivalent securities on settlement of the transaction. |
Available-for-sale securities | Financial assets categorized as available-for-sale (“AFS”) are non-derivatives that are either designated as available-for-sale or not classified as (a) loans and receivables, (b) held-to-maturity securities or (c) trading securities. Listed shares and listed redeemable notes held by the Company that are traded in an active market are classified as AFS and are stated at fair value. The Company has investments in unlisted shares that are not traded in an active market that are also classified as investments AFS and stated at fair value (because Company management considers that fair value can be reliably measured). Gains and losses arising from changes in fair value are recognized in other comprehensive income and are included in accumulated other comprehensive loss, with the exception of other-than-temporary impairment losses, interest calculated using the effective interest method, dividend income and foreign exchange gains and losses, which are recognized in the Condensed Consolidated Statements of Operations and Statements of other Comprehensive Income. When the investment is disposed of or is determined to be impaired, the cumulative gain or loss previously accumulated in the investments’ revaluation reserve is then reclassified to Condensed Consolidated Statements of Operations and Statements of Other Comprehensive Income. |
Trading securities | Financial assets are classified as trading securities if the financial asset has been acquired principally for the purpose of selling it in the near term. Trading securities are stated at fair value, with any gains or losses arising on remeasurement recognized in revenue. Changes in fair value are recognized in the Condensed Consolidated Statements of Operations and Statements of Other Comprehensive Income and included in net gain on trading securities. Interest earned and dividend income are recognized in the Condensed Consolidated Statements of Operations and Statements of Other Comprehensive Income and are included in interest income, according to the terms of the contract and when the right to receive the payment has been established. Investments in nonconsolidated managed funds are accounted for at fair value based on the net asset value (“NAV”) of the funds provided by the fund managers with gains or losses included in net gain on trading securities in the Condensed Consolidated Statements of Operations and Statements of Other Comprehensive Income. |
Debt securities issued | Debt securities issued are initially recognized at the fair value of the consideration received, less directly attributable transaction costs. Subsequently, amounts due are stated at amortized cost and any difference between net proceeds and the redemption value is recognized over the period of the borrowings using the effective interest method. If the Company purchases its own debt, it is removed from the Condensed Consolidated Balance Sheets and the difference between the carrying amount of the liability and the consideration paid is recognized in the Condensed Consolidated Statements of Operations and Statements of Other Comprehensive Income. |
Brokerage and other receivables | Brokerage and other receivables are comprised of commissions and receivables related to the securities brokerage and banking activity of the Company. At initial recognition, brokerage and other receivables are recognized at fair value. Subsequently, brokerage and other receivables are carried at cost net of any allowance for impairment losses. |
Derecognition of financial assets | A financial asset (or, where applicable a part of a financial asset or a part of a group of similar financial assets) is derecognized when all of the following conditions are met: · The transferred financial assets have been isolated from the Company - put presumptively beyond the reach of the Company and its creditors, even in bankruptcy or other receivership. · The transferee has rights to pledge or exchange financial assets. · The Company or its agents do not maintain effective control over the transferred financial assets or third-party beneficial interests related to those transferred assets. Where the Company has not met the asset derecognition conditions above, it continues to recognize the asset to the extent of its continuing involvement. |
Impairment of long lived assets | In accordance with the accounting guidance for the impairment or disposal of long-lived assets, the Company periodically evaluates the carrying value of long-lived assets to be held and used when events and circumstances warrant such a review. The carrying value of a long-lived asset is considered impaired when the fair value from such asset is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. Fair value is determined primarily using the anticipated cash flows, discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair values are reduced for the cost of disposal. |
Impairment of goodwill | As of September 30, 2021, and March 31, 2021, goodwill recorded in the Company’s Consolidated Balance Sheets totaled $7,894 and $7,868, respectively. The Company performs an impairment review at least annually unless indicators of impairment exist in interim periods. The impairment test for goodwill uses a two-step approach. Step one compares the estimated fair value of a reporting unit with goodwill to its carrying value. If the carrying value exceeds the estimated fair value, step two must be performed. Step two compares the carrying value of the reporting unit to the fair value of all of the assets and liabilities of the reporting unit as if the reporting unit was acquired in a business combination. If the carrying amount of a reporting unit’s goodwill exceeds the implied fair value of its goodwill, an impairment loss is recognized in an amount equal to the excess. In its annual goodwill impairment test, the Company estimated the fair value of the reporting unit based on the income approach (also known as the discounted cash flow method) and determined the fair value of the Company’s goodwill exceeded the carrying amount of the Company’s goodwill. The goodwill value as of September 30, 2021, increased compared to March 31, 2021, due to foreign exchange currency translation. The changes in the carrying amount of goodwill as of March 31, 2021, and for the quarter September 30, 2021, were as follows: Balance as of March 31, 2021 $ 7,868 Foreign currency translation 26 Balance as of September 30, 2021 $ 7,894 |
Income taxes | The Company recognizes deferred tax liabilities and assets based on the difference between the financial statements and tax basis of assets and liabilities using the enacted tax rates in effect for the year in which the differences are expected to reverse. The measurement of deferred tax assets is reduced, if necessary, by the amount of any tax benefits that, based on available evidence, are not expected to be realized. Current income tax expenses are provided for in accordance with the laws of the relevant taxing authorities. As part of the process of preparing financial statements, the Company is required to estimate its income taxes in each of the jurisdictions in which it operates. The Company accounts for income taxes using the asset and liability approach. Under this method, deferred income taxes are recognized for tax consequences in future years based on differences between the tax bases of assets and liabilities and their reported amounts in the financial statements at each year-end and tax loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates applicable for the differences that are expected to affect taxable income. The Company will include interest and penalties arising from the underpayment of income taxes in the provision for income taxes (if anticipated). As of September 30, 2021, and March 31, 2021, the Company had no accrued interest or penalties related to uncertain tax positions. |
Financial instruments | Financial instruments are carried at fair value as described below. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market for the asset or liability. Fair value is the current bid price for financial assets, current ask price for financial liabilities and the average of current bid and ask prices when the Company is both in short and long positions for the financial instrument. A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly available from an exchange or other institution and those prices represent actual and regularly occurring market transactions on an arm’s length basis. |
Leases | The Company adopted ASU No. 2016-02, “Leases (Topic 842)”, which requires leases with durations greater than twelve months to be recognized on the balance sheet. Operating lease assets and corresponding lease liabilities are recognized on the Company’s Consolidated Balance Sheets. Refer to Note 19 - Leases, within the notes to condensed consolidated financial statements for additional disclosure and significant accounting policies affecting leases. |
Fixed assets | Fixed assets are carried at cost, net of accumulated depreciation. Maintenance, repairs, and minor renewals are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which range between three and seven years. |
Segment information | The Company operates in a single operating segment offering financial services to its customers in a single geographic region covering Eurasia. The Company’s financial services business provides retail securities brokerage, research, investment counseling, securities trading, market making, corporate investment banking, underwriting, complementary banking services and retail banking services to its customers. The Company generates revenue from customers primarily from fee and commission income and interest income. The Company does not use profitability reports or other information disaggregated on a regional, country or divisional basis for making business decisions. |
Recent accounting pronouncements | In June 2016 the FASB issued Accounting Standards Update No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, which introduced an expected credit loss methodology for the impairment of financial assets measured at amortized cost basis. That methodology replaces the probable, incurred loss model for those assets. In November 2019, the FASB issued ASU 2019-10 “Financial Instruments-Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842)”. The FASB developed a philosophy to extend and simplify how effective dates are staggered between larger public companies (bucket one) and all other entities (bucket two). Those other entities include private companies, smaller public companies, not-for-profit organizations, and employee benefit plans. Under this philosophy, a major update would first be effective for bucket-one entities, that is, public business entities that are SEC filers, excluding entities eligible to be smaller reporting companies (SRCs) under the SEC’s definition. The Master Glossary of the Codification defines public business entities and SEC filers. All other entities, including SRCs, other public business entities, and nonpublic business entities (private companies, not-for-profit organizations, and employee benefit plans) would compose bucket two. For those entities, it is anticipated that the FASB will consider requiring an effective date staggered at least two years after bucket one for major updates. At the date when ASU 2016-13 was issued, the Company was an SRC and according to ASU 2019-10, qualifies for bucket two. Accordingly, ASU 2016-13 and ASU 2017-12 are effective for fiscal years beginning after December 15, 2022. The Company is currently evaluating the impact that ASU 2016-13 and 2017-12 will have on its consolidated financial statements and related disclosures. In January 2021 the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope, which clarifies that certain optional expedients and exceptions in Table of Contents link FASB Accounting Standards Codification (ASC) Topic 848, Reference Rate Reform, for contract modifications and hedge accounting apply as well to derivatives that are affected by the changes in interest rates used for margining, discounting or contract price alignment (i.e., the discounting transition). Examples of such use include (1) rates used in interest rate swaps to compute the cash flows for the swap’s variable leg, (2) interest rate indexes used to discount the future cash flows of a derivative instrument to determine its fair value, and (3) the compensation or the interest amount earned on margin payments (i.e., contract price alignment). The amended guidance in ASU No. 2021-01 is effective immediately for all entities. The guidance may be applied on (1) a full retrospective basis as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or (2) a prospective basis to new modifications from any date within an interim period that includes or is subsequent to the date of the issuance of ASU No. 2021-01 through the date that financial statements are available to be issued. If any of the amendments are applied for an eligible hedging relationship, adjustments resulting therefrom must be reflected as of the date that the election is applied. The Company’s adoption of the provisions of ASU No. 2021-01 had no significant impact on the Company’s consolidated financial statements. In May 2021 the FASB issued Accounting Standards Update No. 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options, a consensus of the Emerging Issues Task Force (EITF) , which amends the FASB Accounting Standards Codification (ASC or the “Codification”) to provide explicit guidance, and, thus, reduce diversity in practice, on accounting by issuers for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after the modification or exchange. This amendment provides that for an entity that presents earnings per share (EPS) in accordance with Topic 260, the effects of a modification or an exchange of a freestanding equity-classified written call option that is recognized as a dividend should be an adjustment to net income (or net loss) in the basic EPS calculation. The amended guidance becomes mandatorily effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years, and should be applied prospectively to modifications or exchanges occurring on or after the effective date. The Company is currently evaluating the impact that ASU 2021-04 will have on its consolidated financial statements and related disclosures. In August 2021 the FASB issued Accounting Standard Update No 2021-06 “Presentation of Financial Statements (Topic 205), Financial Services — Depository and Lending (Topic 942), and Financial Services — Investment Companies (Topic 946)” which amends various SEC paragraphs pursuant to the issuance of SEC Release No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses. SEC issued Final Rulemaking Release No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, which modified the disclosure and presentation requirements concerning acquisitions and disposals of businesses. Primarily, the new rules amended (1) Rule 1-02(w) of Regulation S-X, Definition of Terms Used in Regulation S-X, Significant Subsidiary, (2) Rule 3-05 of Regulation S-X, Financial Statements of Businesses Acquired or to Be Acquired, (3) Rule 8-05 of Regulation S-X, Pro Forma Financial Information (which covers smaller reporting companies), and (4) Article 11 of Regulation S-X, Pro Forma Financial Information. In addition, new Rule 6-11 of Regulation S-X, Financial Statements of Funds Acquired or to Be Acquired, covering acquisitions specific to investment companies, was added. Corresponding changes were made to other Regulation S-X rules, various Securities Act and Securities Exchange Act rules, and Forms 8-K and 10-K. Compliance with the amended rules is required from the beginning of a registrant’s fiscal year commencing after December 31, 2020 (i.e., the mandatory compliance date). Acquisitions and dispositions that are probable or consummated after the mandatory compliance date are required to be evaluated for significance pursuant to the amended rules. Early compliance is permitted, provided that all the amended rules are applied in their entirety from the early compliance date. ASU No. 2021-06 amends SEC material in the Codification to give effect to Release No. 33-10786. The new rules apply to fiscal years ending on or after December 15, 2021 (i.e., calendar-year 2021). Early voluntary compliance is allowed. Note that the rescission of Industry Guide 3 is effective on January 1, 2023. ASU No. 2021-06 amends SEC material in the Codification to give effect to Release No. 33-10835. The Company is currently evaluating the impact that ASU 2021-06 will have on its consolidated financial statements and related disclosures. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Sep. 30, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of Goodwill | Balance as of March 31, 2021 $ 7,868 Foreign currency translation 26 Balance as of September 30, 2021 $ 7,894 |
CASH AND CASH EQUIVALENTS (Tabl
CASH AND CASH EQUIVALENTS (Tables) | 6 Months Ended |
Sep. 30, 2021 | |
CASH AND CASH EQUIVALENTS | |
Schedule of Cash and cash equivalents | September 30, 2021 March 31, 2021 Current accounts with brokers $ 190,385 $ 94,494 Securities purchased under reverse repurchase agreements 164,240 248,946 Accounts with stock exchanges 149,361 98,521 Current accounts with commercial banks 90,886 75,903 Current accounts in clearing organizations 50,312 83,194 Current account with National Bank (Kazakhstan) 37,628 36,726 Current account with National Settlement Depository (Russia) 26,496 28,215 Petty cash in bank vault and on hand 22,970 25,830 Current account with Central Bank (Russia) 7,975 6,930 Current account with Central Depository (Kazakhstan) 172 69 Total cash and cash equivalents $ 740,425 $ 698,828 |
Schedule of securities received under reverse repurchase agreements | September 30, 2021 Interest rates and remaining contractual maturity of the agreements Average interest rate Up to 30 days 30-90 days Total Securities purchased under reverse repurchase agreements Corporate equity 0.39 % 141,873 - 141,873 Non-US sovereign debt 1.20 % 11,582 10 11,592 Corporate debt 3.16 % 10,775 - 10,775 Total securities sold under repurchase agreements $ 164,230 $ 10 $ 164,240 March 31, 2021 Interest rates and remaining contractual maturity of the agreements Average interest rate Up to 30 days 30-90 days Total Securities purchased under reverse repurchase agreements Non-US sovereign debt 1.07 % $ 101,258 $ - 101,258 Corporate debt 4.42 % 94,562 - 94,562 Corporate equity 2.76 % 51,564 - 51,564 US sovereign debt 0.50 % 1,562 - 1,562 Total securities sold under repurchase agreements $ 248,946 $ - $ 248,946 |
RESTRICTED CASH (Tables)
RESTRICTED CASH (Tables) | 6 Months Ended |
Sep. 30, 2021 | |
RESTRICTED CASH | |
Schedule of restricted cash | September 30, 2021 March 31, 2021 Brokerage customers’ cash $ 349,097 $ 427,233 Deferred distribution payments 8,534 8,534 Reserve with Central Bank of Russia 2,109 1,758 Guarantee deposits 88 433 Total restricted cash $ 359,828 $ 437,958 |
TRADING AND AVAILABLEFORSALE _2
TRADING AND AVAILABLEFORSALE SECURITIES AT FAIR VALUE (Tables) | 6 Months Ended |
Sep. 30, 2021 | |
TRADING AND AVAILABLEFORSALE SECURITIES AT FAIR VALUE | |
Schedule of trading securities | September 30, 2021 March 31, 2021 Corporate debt $ 618,428 $ 334,763 Non-US sovereign debt 261,442 333,619 Corporate equity 70,377 47,340 Exchange traded notes 17,028 9,638 US sovereign debt 7,206 10,828 Total trading securities $ 974,481 $ 736,188 Equity securities $ 1 $ 1 Total available-for-sale securities, at fair value $ 1 $ 1 Fair Value Measurements at September 30, 2021 using Weighted Average Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Units Interest Rate Total (Level 1) (Level 2) (Level 3) Corporate debt 8.3 % $ 618,428 $ 618,050 $ - $ 378 Non-U.S. sovereign debt 7.88 % 261,442 259,480 - 1,962 Corporate equity - 70,377 19,710 50,291 376 Exchange traded notes - 17,028 17,028 - - U.S. sovereign debt 1.6 % 7,206 7,206 - - Total trading securities $ 974,481 $ 921,474 $ 50,291 $ 2,716 Equity securities $ 1 $ - $ - $ 1 Total available-for-sale securities, at fair value $ 1 $ - $ - $ 1 Fair Value Measurements at March 31, 2021 using Weighted Average Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Units Interest Rate Total (Level 1) (Level 2) (Level 3) Corporate debt 9.22 % $ 334,763 $ 334,403 $ - $ 360 Non-U.S. sovereign debt 8.06 % 333,619 333,619 - - Corporate equity - 47,340 28,630 1 18,709 U.S. sovereign debt 1.68 % 10,828 10,828 - - Exchange traded notes - 9,638 9,638 - - Total trading securities $ 736,188 $ 717,118 $ 1 $ 19,069 Equity securities - $ 1 $ - $ - $ 1 Total available-for-sale securities, at fair value $ 1 $ - $ - $ 1 |
Schedule of Significant unobservable inputs relevant to determination of fair value | Type Valuation Technique FV as of September 30, 2021 FV as of March 31, 2021 Significant Unobservable Inputs % Corporate equity DCF $ - $ 18,408 Discount rate 10.6 % Estimated number of years 9 years Corporate debt DCF $ 374 $ 360 Discount rate 16.5 % Estimated number of years 9 years Corporate equity DCF $ 380 $ 301 Discount rate 18.5 % Estimated number of years 9 years Non-US sovereign debt DCF $ 1,030 - Discount rate 13.3 % Estimated number of years 6 months Non-US sovereign debt DCF $ 932 - Discount rate 13.8 % Estimated number of years 1 year Total $ 2,716 $ 19,069 |
Schedule of investments | Trading securities Available-for-sale securities Balance as of March 31, 2021 $ 19,069 $ 1 Reclassification to level 2 (18,408 ) - Purchase of investments that use Level 3 inputs 1,965 - Revaluation of investments that use Level 3 inputs 90 - Balance as of September 30, 2021 $ 2,716 $ 1 Trading securities Available-for-sale securities Balance as of March 31, 2020 $ 11,259 $ 1 Sale of investments that use Level 3 inputs (2 ) - Purchase of investments that use Level 3 inputs 834 - Revaluation of investments that use Level 3 inputs 6,978 - Balance as of March 31, 2021 $ 19,069 $ 1 |
Fair value of available for sale securities | September 30, 2021 Assets measured at amortized cost Unrealized loss accumulated in other comprehensive income/(loss) Assets measured at fair value Equity securities $ 1 $ - $ 1 Balance as of September 30, 2021 $ 1 $ - $ 1 March 31, 2021 Assets measured at amortized cost Unrealized loss accumulated in other comprehensive income/(loss) Assets measured at fair value Equity securities $ 1 $ - $ 1 Balance as of March 31, 2021 $ 1 $ - $ 1 |
BROKERAGE AND OTHER RECEIVABL_2
BROKERAGE AND OTHER RECEIVABLES NET (Tables) | 6 Months Ended |
Sep. 30, 2021 | |
BROKERAGE AND OTHER RECEIVABLES NET | |
Schedule of Brokerage and other receivables | September 30, 2021 March 31, 2021 Margin lending receivables $ 308,256 $ 58,095 Receivables from brokerage clients 4,134 4,199 Long-term installments receivables 1,210 1,280 Receivable from sale of securities 910 484 Receivable for underwriting and market-making services 887 564 Bank commissions receivable 443 767 Dividends accrued 23 1,392 Bonds coupon receivable 3 - Other receivables 2,702 56 Allowance for receivables (1,441 ) (2,036 ) Total brokerage and other receivables, net $ 317,124 $ 64,801 |
LOAN ISSUED (Tables)
LOAN ISSUED (Tables) | 6 Months Ended |
Sep. 30, 2021 | |
LOANS ISSUED | |
Schedule of Loans issued | Amount Outstanding, net of allowance Due Dates Average Interest Rate Fair Value of Collateral Loan Currency Uncollateralized bank customer loans 13,428 October 2021 - September 2025 12.10 % - KZT Mortgage loans 11,190 October 2021 – September 2036 14.83 % 11,089 KZT Subordinated loan 5,099 December 2022 - April 2024 4.89 % - USD Bank customer loans 1,520 November 2021-September 2045 12.00 % 1,000 RUB Subordinated loan 1,392 September 2029 7.00 % - UAH Uncollateralized non-bank loan 18 December 2021 2.00 % - EUR $ 32,647 Amount Outstanding Due Dates Average Interest Rate Fair Value of Collateral Loan Currency Subordinated loan $ 5,033 December 2022-April 2024 3.69 % - USD Uncollateralized non-bank loan 2,382 January 2022 – February 2022 3.00 % - USD Uncollateralized non-bank loan 1,384 May 2021 13.00 % - RUB Subordinated loan 1,331 September 2029 7.00 % - UAH Bank customer loans 880 March 2024 15.41 % 729 KZT Bank customer loans 657 July 2021- September 2045 11.27 % 611 RUB $ 11,667 |
DEFERRED TAX LIABILITIES ASSETS
DEFERRED TAX LIABILITIES ASSETS (Tables) | 6 Months Ended |
Sep. 30, 2021 | |
DEFERRED TAX LIABILITIES ASSETS (Tables) | |
Schedule of Deferred tax assets and liabilities | September 30, 2021 March 31, 2021 Deferred tax assets: Tax losses carryforward $ 310 $ 316 Accrued liabilities 520 236 Depreciation - 16 Revaluation on trading securities 415 - Valuation allowance (310 ) (316 ) Deferred tax assets $ 935 $ 252 Deferred tax liabilities: Revaluation on trading securities $ 4,560 $ 2,546 Fixed and Intangible Assets 1,769 1,568 Subordinated debt 502 523 Deferred tax liabilities $ 6,831 $ 4,637 Net deferred tax liabilities $ (5,896 ) $ (4,385 ) |
SECURITIES REPURCHASE AGREEME_2
SECURITIES REPURCHASE AGREEMENT OBLIGATIONS (Tables) | 6 Months Ended |
Sep. 30, 2021 | |
SECURITIES REPURCHASE AGREEMENT OBLIGATIONS | |
Schedule of Securities under repurchase agreement obligations | September 30, 2021 Interest rates and remaining contractual maturity of the agreements Average interest rate Up to 30 days 30-90 days Total Securities sold under repurchase agreements Corporate debt 9.21 % $ 376,018 $ 5,921 $ 381,939 Non-U.S. sovereign debt 8.92 % 153,124 - 153,124 US sovereign debt 0.35 % 2,214 - 2,214 Total $ 531,356 $ 5,921 $ 537,277 March 31, 2021 Interest rate and remaining contractual maturity of the agreements Average interest rate Up to 30 days 30-90 days Total Securities sold under repurchase agreements Non-US sovereign debt 9.28 % $ 229,812 $ - $ 229,812 Corporate debt 9.27 % 189,337 - 189,337 Corporate equity 3.78 % 5,757 - 5,757 US sovereign debt 0.40 % 1,809 - 1,809 Total securities sold under repurchase agreements $ 426,715 $ - $ 426,715 |
CUSTOMER LIABILITIES (Tables)
CUSTOMER LIABILITIES (Tables) | 6 Months Ended |
Sep. 30, 2021 | |
CUSTOMER LIABILITIES | |
Schedule of Customer liabilities | September 30, 2021 March 31, 2021 Brokerage customers $ 1,005,653 $ 938,086 Banking customers 213,711 225,611 Total $ 1,219,364 $ 1,163,697 |
TRADE PAYABLES (Tables)
TRADE PAYABLES (Tables) | 6 Months Ended |
Sep. 30, 2021 | |
TRADE PAYABLES | |
Schedule of trade payables | September 30, 2021 March 31, 2021 Margin lending payable $ 44,668 $ 20,120 Payables to suppliers of goods and services 3,604 1,708 Coupon payable 2,226 - Trade payable for securities purchased 295 264 Guarantee fee received 30 - Advances received 1 - Other 247 212 Total $ 51,071 $ 22,304 |
LOANS RECEIVED (Tables)
LOANS RECEIVED (Tables) | 6 Months Ended |
Sep. 30, 2021 | |
LOANS RECEIVED | |
Schedule of loans received | Company Lender September 30, 2021 March 31, 2021 Interest Rate Term Maturity dates Freedom Holding Corp. Non-Bank $ 3,456 $ 3,373 5.00 % 14 months 12/31/21 Total $ 3,456 $ 3,373 |
DEBT SECURITIES ISSUED (Tables)
DEBT SECURITIES ISSUED (Tables) | 6 Months Ended |
Sep. 30, 2021 | |
DEBT SECURITIES ISSUED | |
Schedule of Debt securities issued | September 30, 2021 March 31, 2021 Debt securities issued denominated in USD $ 50,541 $ 60,743 Debt securities issued denominated in RUB 6,872 6,605 Accrued interest 833 1,095 Total $ 58,246 $ 68,443 |
NET GAIN ON TRADING SECURITIES
NET GAIN ON TRADING SECURITIES (Tables) | 6 Months Ended |
Sep. 30, 2021 | |
NET GAIN ON TRADING SECURITIES | |
Schedule of Net gain on trading securities |
STOCKBASEDCOMPENSATION (Tables)
STOCKBASEDCOMPENSATION (Tables) | 6 Months Ended |
Sep. 30, 2021 | |
STOCKBASED COMPENSATION | |
Schedule of Assumptions used | Term (years) 5 Volatility 41.5 % Risk-free rate 0.06 % |
Summary of restricted stock outstanding | Shares Weighted Average Fair Value Outstanding, at March 31, 2021 15,000 $ 775 Granted 1,031,500 39,465 Vested - - Forfeited/cancelled/expired - - Outstanding, at September 30, 2021 1,046,500 $ 40,240 |
Schedule of stock options using the Black Scholes option | Term (years) 3 Volatility 165.33 % Risk-free rate 1.66 |
Summary of stock option activity | Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (In Years) Aggregate Intrinsic Value Outstanding, March 31, 2021 60,000 $ 1.98 6.52 $ 3,083 Granted - - - - Exercised (60,000 ) 1.98 - 3,742 Forfeited/cancelled/expired - - - - Outstanding, at September 30, 2021 - - - $ - Exercisable, at September 30, 2021 - $ - - $ - |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Sep. 30, 2021 | |
LEASES | |
Summary of operating lease obligations | Classification on Balance Sheet September 30, 2021 Assets Operating lease assets Right-of-use assets $ 16,471 Total lease assets $ 16,471 Liabilities Operating lease liability Operating lease obligations $ 16,298 Total lease liability $ 16,298 |
Summary of lease obligations | Twelve months ending March 31, 2022 - remaining after September 30 $ 4,291 2023 7,618 2024 3,511 2025 2,110 2026 1,327 Thereafter 330 Total payments 19,187 Less: amounts representing interest (2,889 ) Lease liability, net $ 16,298 Weighted average remaining lease term (in months) 26 Weighted average discount rate 12 % |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Sep. 30, 2021 | |
COMMITMENTS AND CONTINGENCIES | |
Schedule of bank guarantees | As of September 30, 2021 Bank guarantees $ 7,089 Unfunded commitments under lines of credit 6,250 Total $ 13,339 |
DESCRIPTION OF BUSINESS (Detail
DESCRIPTION OF BUSINESS (Details Narrative) - Askar Tashtitov [Member] | 1 Months Ended | |
Jul. 31, 2021 | Sep. 30, 2021 | |
Interest rate | 23.88% | |
Ownership interest rate | 9.00% |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Thousands | 6 Months Ended |
Sep. 30, 2021USD ($) | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Goodwill, beginning | $ 7,868 |
Foreign currency translation | 26 |
Goodwill, ending | $ 7,894 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) $ in Thousands | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Goodwill | $ 7,894 | $ 7,894 | $ 7,868 |
CASH AND CASH EQUIVALENTS (Deta
CASH AND CASH EQUIVALENTS (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Mar. 31, 2021 |
Total cash and cash equivalents | $ 740,425 | $ 698,828 |
Securities purchased under reverse repurchase agreements [Member] | ||
Total cash and cash equivalents | 164,240 | 248,946 |
Accounts with stock exchanges [Member] | ||
Total cash and cash equivalents | 149,361 | 98,521 |
Current accounts with brokers [Member] | ||
Total cash and cash equivalents | 190,385 | 94,494 |
Current account with National Bank (Kazakhstan) [Member] | ||
Total cash and cash equivalents | 37,628 | 36,726 |
Current accounts with commercial banks [Member] | ||
Total cash and cash equivalents | 90,886 | 75,903 |
Current account with National Settlement Depository (Russia) One [Member] | ||
Total cash and cash equivalents | 26,496 | 28,215 |
Current account in clearing organizations [Member] | ||
Total cash and cash equivalents | 50,312 | 83,194 |
Petty cash in bank vault and on hand [Member] | ||
Total cash and cash equivalents | 22,970 | 25,830 |
Current account with Central Bank (Russia) [Member] | ||
Total cash and cash equivalents | 7,975 | 6,930 |
Current account with Central Depository (Kazakhstan) [Member] | ||
Total cash and cash equivalents | $ 172 | $ 69 |
CASH AND CASH EQUIVALENTS (De_2
CASH AND CASH EQUIVALENTS (Details 1) - USD ($) | Sep. 30, 2021 | Mar. 31, 2021 |
Remaining contractual maturity: up to 30 days | $ 164,230,000 | $ 248,946,000 |
Remaining contractual maturity: 30 - 90 days | 10,000 | 0 |
Total contractual maturity | 164,240,000 | 248,946,000 |
Corporate equity | ||
Remaining contractual maturity: up to 30 days | 141,873,000 | 51,564,000 |
Remaining contractual maturity: 30 - 90 days | 0 | 0 |
Total contractual maturity | $ 141,873,000 | $ 51,564,000 |
Average interest rate | 0.39% | 2.76% |
Non-U.S. sovereign debt | ||
Remaining contractual maturity: up to 30 days | $ 11,582,000 | $ 101,258,000 |
Remaining contractual maturity: 30 - 90 days | 10,000 | 0 |
Total contractual maturity | $ 11,592,000 | $ 101,258,000 |
Average interest rate | 1.20% | 1.07% |
Corporate debt [Member] | ||
Remaining contractual maturity: up to 30 days | $ 10,775,000 | $ 94,562,000 |
Remaining contractual maturity: 30 - 90 days | 0 | 0 |
Total contractual maturity | $ 10,775,000 | $ 94,562,000 |
Average interest rate | 3.16% | 4.42% |
U.S. sovereign debt | ||
Remaining contractual maturity: up to 30 days | $ 1,562,000 | |
Remaining contractual maturity: 30 - 90 days | 0 | |
Total contractual maturity | $ 1,562,000 | |
Average interest rate | 0.50% |
CASH AND CASH EQUIVALENTS (De_3
CASH AND CASH EQUIVALENTS (Details Narrative) - USD ($) | Sep. 30, 2021 | Mar. 31, 2021 |
CASH AND CASH EQUIVALENTS (Details Narrative) | ||
Cash FDIC insured amount | $ 250,000,000 | $ 250,000 |
Fair value of collateral received | $ 181,330,000 | $ 272,586,000 |
RESTRICTED CASH (Details)
RESTRICTED CASH (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Mar. 31, 2021 |
Restricted cash | $ 359,828 | $ 437,958 |
Brokerage customers' cash | ||
Restricted cash | 349,097 | 427,233 |
Deferred distribution payments | ||
Restricted cash | 8,534 | 8,534 |
Reserve with Central Bank of Russia | ||
Restricted cash | 2,109 | 1,758 |
Guaranty deposits | ||
Restricted cash | $ 88 | $ 433 |
RESTRICTED CASH (Details Narrat
RESTRICTED CASH (Details Narrative) - USD ($) $ in Thousands | Sep. 30, 2021 | Mar. 31, 2021 |
Restricted cash | $ 359,828 | $ 437,958 |
Deferred distribution payments | ||
Restricted cash | $ 8,534 | $ 8,534 |
TRADING AND AVAILABLE FOR SALE
TRADING AND AVAILABLE FOR SALE SECURITIES AT FAIR VALUE (Details) - USD ($) | Sep. 30, 2021 | Mar. 31, 2021 |
Trading securities | $ 974,481,000 | $ 736,188,000 |
Total Available-for-sale securities, at fair value | 1,000 | 1,000 |
Level 1 | ||
Trading securities | 921,474,000 | 717,118,000 |
Total Available-for-sale securities, at fair value | 0 | 0 |
Level 2 | ||
Trading securities | 50,291,000 | 1,000 |
Total Available-for-sale securities, at fair value | 0 | 0 |
Level 3 | ||
Trading securities | 2,716,000 | 19,069,000 |
Total Available-for-sale securities, at fair value | 1,000 | 1,000 |
Corporate equity | ||
Trading securities | 70,377,000 | 47,340,000 |
Corporate equity | Level 1 | ||
Trading securities | 19,710,000 | 28,630,000 |
Corporate equity | Level 2 | ||
Trading securities | 50,291,000 | 1,000 |
Corporate equity | Level 3 | ||
Trading securities | 376,000 | 18,709,000 |
Non-U.S. sovereign debt | ||
Trading securities | 261,442,000 | 333,619,000 |
Non-U.S. sovereign debt | Level 1 | ||
Trading securities | 259,480,000 | 333,619,000 |
Non-U.S. sovereign debt | Level 2 | ||
Trading securities | 0 | 0 |
Non-U.S. sovereign debt | Level 3 | ||
Trading securities | 1,962 | 0 |
Total Available-for-sale securities, at fair value | 0 | |
Corporate debt [Member] | ||
Trading securities | 618,428,000 | 334,763,000 |
U.S. sovereign debt | ||
Trading securities | 7,206,000 | 10,828,000 |
U.S. sovereign debt | Level 1 | ||
Trading securities | 7,206,000 | 10,828,000 |
U.S. sovereign debt | Level 2 | ||
Trading securities | 0 | 0 |
U.S. sovereign debt | Level 3 | ||
Trading securities | 0 | 0 |
Exchange traded notes | ||
Trading securities | 17,028,000 | 9,638,000 |
Exchange traded notes | Level 1 | ||
Trading securities | 17,028,000 | 9,638,000 |
Exchange traded notes | Level 2 | ||
Trading securities | 0 | 0 |
Exchange traded notes | Level 3 | ||
Trading securities | 0 | 0 |
Preferred Shares | ||
Total Available-for-sale securities, at fair value | 0 | 1,000 |
Equity securities | ||
Total Available-for-sale securities, at fair value | 1,000 | 1,000 |
Total Available-for-sale securities, at fair values | $ 1 | $ 1 |
TRADING AND AVAILABLEFORSALE _3
TRADING AND AVAILABLEFORSALE SECURITIES AT FAIR VALUE (Details 1) - USD ($) | Sep. 30, 2021 | Mar. 31, 2021 |
Total Trading securities | $ 974,481,000 | $ 736,188,000 |
Total Available-for-sale securities, at fair value | 1,000 | 1,000 |
Trading securities | 974,481,000 | 736,188,000 |
Level 1 | ||
Total Available-for-sale securities, at fair value | 0 | 0 |
Trading securities | 921,474,000 | 717,118,000 |
Level 2 | ||
Total Available-for-sale securities, at fair value | 0 | 0 |
Trading securities | 50,291,000 | 1,000 |
Level 3 | ||
Total Available-for-sale securities, at fair value | 1,000 | 1,000 |
Trading securities | 2,716,000 | 19,069,000 |
Corporate equity | ||
Trading securities | $ 70,377,000 | $ 47,340,000 |
Trading securities, Weighted average interest rate | 0.00% | 0.00% |
Corporate equity | Level 1 | ||
Trading securities | $ 19,710,000 | $ 28,630,000 |
Corporate equity | Level 2 | ||
Trading securities | 50,291,000 | 1,000 |
Corporate equity | Level 3 | ||
Trading securities | 376,000 | 18,709,000 |
Non-U.S. sovereign debt | ||
Trading securities | $ 261,442,000 | $ 333,619,000 |
Trading securities, Weighted average interest rate | 7.88% | 8.06% |
Non-U.S. sovereign debt | Level 1 | ||
Trading securities | $ 259,480,000 | $ 333,619,000 |
Non-U.S. sovereign debt | Level 2 | ||
Trading securities | 0 | 0 |
Non-U.S. sovereign debt | Level 3 | ||
Total Available-for-sale securities, at fair value | 0 | |
Trading securities | 1,962 | 0 |
U.S. sovereign debt | ||
Trading securities | $ 7,206,000 | $ 10,828,000 |
Trading securities, Weighted average interest rate | 1.60% | 1.68% |
U.S. sovereign debt | Level 1 | ||
Trading securities | $ 7,206,000 | $ 10,828,000 |
U.S. sovereign debt | Level 2 | ||
Trading securities | 0 | 0 |
U.S. sovereign debt | Level 3 | ||
Trading securities | 0 | 0 |
Exchange traded notes | ||
Trading securities | $ 17,028,000 | $ 9,638,000 |
Trading securities, Weighted average interest rate | 0.00% | 0.00% |
Exchange traded notes | Level 1 | ||
Trading securities | $ 17,028,000 | $ 9,638,000 |
Exchange traded notes | Level 2 | ||
Trading securities | 0 | 0 |
Exchange traded notes | Level 3 | ||
Trading securities | 0 | 0 |
Equity securities | ||
Total Available-for-sale securities, at fair value | 1,000 | $ 1,000 |
Trading securities, Weighted average interest rate | 0.00% | |
Equity securities | Level 1 | ||
Total Available-for-sale securities, at fair value | 0 | $ 0 |
Equity securities | Level 2 | ||
Total Available-for-sale securities, at fair value | 0 | 0 |
Equity securities | Level 3 | ||
Total Available-for-sale securities, at fair value | 1 | 1,000 |
Corporate debt | ||
Trading securities | $ 618,428,000 | $ 334,763,000 |
Trading securities, Weighted average interest rate | 8.30% | 9.22% |
Total available-for-sale securities, Weighted average interest rate | 0.00% | 0.00% |
Corporate debt | Level 1 | ||
Trading securities | $ 618,050,000 | $ 334,403,000 |
Corporate debt | Level 2 | ||
Trading securities | 0 | 0 |
Corporate debt | Level 3 | ||
Trading securities | $ 378,000 | $ 360,000 |
TRADING AND AVAILABLE FOR SAL_2
TRADING AND AVAILABLE FOR SALE SECURITIES AT FAIR VALUE (Details 2) - USD ($) | 6 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Mar. 31, 2021 | |
Fair Value | $ 2,716,000 | $ 19,069,000 |
Corporate equity | ||
Fair Value | $ 2,000 | $ 18,408,000 |
Valuation Technique | DCF | |
Discount Rate | 10.60% | 10.60% |
Estimated number of years | 9 | 9 |
Significant Unobservable Inputs | Discount rate | Discount rate |
Significant Unobservable Inputs1 | Estimated number of years | |
Non-U.S. sovereign debt | ||
Fair Value | $ 1,030,000 | $ 0 |
Valuation Technique | DCF | |
Discount Rate | 13.30% | 13.30% |
Estimated number of years | 6 | 6 |
Significant Unobservable Inputs | Discount rate | Discount rate |
Significant Unobservable Inputs1 | Estimated number of years | Estimated number of years |
Corporate debt | ||
Fair Value | $ 374,000 | $ 360,000 |
Valuation Technique | DCF | |
Discount Rate | 16.50% | 16.50% |
Estimated number of years | 9 | 9 |
Significant Unobservable Inputs | Discount rate | Discount rate |
Significant Unobservable Inputs1 | Estimated number of years | |
Corporate equity two | ||
Fair Value | $ 380,000 | $ 301,000 |
Valuation Technique | DCF | |
Discount Rate | 18.50% | 18.50% |
Estimated number of years | 9 | Estimated number of years |
Significant Unobservable Inputs | Discount rate | Discount rate |
Significant Unobservable Inputs1 | Estimated number of years | |
Non-US sovereign debt one | ||
Fair Value | $ 932,000 | $ 0 |
Valuation Technique | DCF | |
Discount Rate | 13.80% | 13.80% |
Estimated number of years | 1 | 1 |
Significant Unobservable Inputs | Discount rate | Discount rate |
Significant Unobservable Inputs1 | Estimated number of years |
TRADING AND AVAILABLE FOR SAL_3
TRADING AND AVAILABLE FOR SALE SECURITIES AT FAIR VALUE (Details 3) - USD ($) | 6 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Mar. 31, 2021 | |
Available-for-sale Securities [Member] | ||
Reclassification to level 2 | $ 0 | |
Sale of investments that use Level 3 inputs | $ 0 | |
Purchase of investments that use Level 3 inputs | 0 | 0 |
Revaluation of investments that use Level 3 inputs | 0 | 0 |
Available-for-sale securities, Beginning balance | 1,000 | 1,000 |
Available-for-sale securities, Ending balance | 1,000 | 1,000 |
Trading Securities | ||
Investments Beginning | 19,069,000 | 11,259,000 |
Reclassification to level 2 | (18,408) | |
Sale of investments that use Level 3 inputs | (2,000) | |
Purchase of investments that use Level 3 inputs | 1,965,000 | 834,000 |
Revaluation of investments that use Level 3 inputs | 90 | 6,978,000 |
Investments ending | $ 2,716,000 | $ 19,069,000 |
TRADING AND AVAILABLE FOR SAL_4
TRADING AND AVAILABLE FOR SALE SECURITIES AT FAIR VALUE (Details 4) - USD ($) | 6 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Mar. 31, 2021 | |
Assets measured at amortized cost | $ 1,000 | $ 1,000 |
Unrealized gain accumulated in other comprehensive income | 0 | 0 |
Assets measured at fair value | 1,000 | 1,000 |
Equity securities | ||
Assets measured at amortized cost | 1,000 | 1,000 |
Unrealized gain accumulated in other comprehensive income | 0 | 0 |
Assets measured at fair value | $ 1,000 | $ 1,000 |
TRADING AND AVAILABLE FOR SAL_5
TRADING AND AVAILABLE FOR SALE SECURITIES AT FAIR VALUE (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Mar. 31, 2021 | |
Kazakhstan Sustainability Fund JSC | ||
Debt securities held | $ 293,451 | $ 193,677 |
Rate of interest | 10.00% | 10.00% |
Ministry of Finance of the Republic of Kazakhstan | ||
Debt securities held | $ 417,450 | $ 199,070 |
Rate of interest | 10.00% | 10.00% |
BROKERAGE AND OTHER RECEIVABL_3
BROKERAGE AND OTHER RECEIVABLES NET (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Mar. 31, 2021 |
Brokerage and other receivables, net | $ 317,124 | $ 64,801 |
Margin lending receivables [Member] | ||
Brokerage and other receivables, net | 308,256 | 58,095 |
Receivables from brokerage clients [Member] | ||
Brokerage and other receivables, net | 4,134 | 4,199 |
Long-term installments receivables [Member] | ||
Brokerage and other receivables, net | 1,210 | 1,280 |
Receivable for underwriting market-making services [Member] | ||
Brokerage and other receivables, net | 887 | 564 |
Receivable from sale of securities [Member] | ||
Brokerage and other receivables, net | 910 | 484 |
Dividends accrued [Member] | ||
Brokerage and other receivables, net | 23 | 1,392 |
Bank commissions receivable [Member] | ||
Brokerage and other receivables, net | 443 | 767 |
Other receivables [Member] | ||
Brokerage and other receivables, net | 2,702 | 56 |
Allowance for receivables [Member] | ||
Brokerage and other receivables, net | $ 1,441 | $ 2,036 |
BROKERAGE AND OTHER RECEIVABL_4
BROKERAGE AND OTHER RECEIVABLES NET (Details Narrative) - USD ($) $ in Thousands | Sep. 30, 2021 | Mar. 31, 2021 |
BROKERAGE AND OTHER RECEIVABLES NET (Details Narrative) | ||
Due from related party customer | $ 215,342 | $ 8,948 |
Due from related party customer percentage | 69.00% | 14.00% |
Allowance for brokerage receivables | $ 1,441 | $ 2,036 |
LOANS ISSUED (Details)
LOANS ISSUED (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Sep. 30, 2021 | Mar. 30, 2021 | Mar. 31, 2021 | |
Loans issued | $ 32,647,000 | $ 11,667,000 | |
Loan Currency | USD | ||
Bank customer loans loan [Member] | |||
Loans issued | $ 1,520,000 | 880,000 | |
Loan Currency | RUB | KZT | |
Fair value of collateral | $ 1,000,000 | $ 729,000 | |
Due dates | November 2021-September 2045 | March 2024 | |
Weighted average interest rate | 12.00% | 15.41% | |
Subordinated loan [Member] | |||
Loans issued | $ 5,099,000 | $ 5,033,000 | |
Loan Currency | USD | USD | |
Fair value of collateral | $ 0 | $ 0 | |
Due dates | December 2022 - April 2024 | December 2022-April 2024 | |
Weighted average interest rate | 4.89% | 3.69% | |
Subordinated loan 1 [Member] | |||
Loans issued | $ 1,392,000 | $ 1,331,000 | |
Loan Currency | UAH | UAH | |
Fair value of collateral | $ 0 | $ 0 | |
Due dates | September 2029 | September 2029 | |
Weighted average interest rate | 7.00% | 7.00% | |
Bank customer loans 1 [Member] | |||
Loans issued | $ 657,000 | ||
Loan Currency | RUB | ||
Fair value of collateral | $ 611,000 | ||
Due dates | July 2021- September 2045 | ||
Weighted average interest rate | 11.27% | ||
Uncollateralized non-bank loan [Member] | |||
Loans issued | $ 18,000 | $ 2,382,000 | |
Loan Currency | EUR | USD | |
Fair value of collateral | $ 0 | $ 0 | |
Due dates | December 2021 | January 2022 – February 2022 | |
Weighted average interest rate | 2.00% | 3.00% | |
Uncollateralized non-bank loan 1 [Member] | |||
Loans issued | $ 1,384,000 | ||
Loan Currency | RUB | ||
Fair value of collateral | $ 0 | ||
Due dates | May 2021 | ||
Weighted average interest rate | 13.00% | ||
Mortgage Loan loans [Member] | |||
Loans issued | $ 11,190,000 | ||
Loan Currency | KZT | ||
Fair value of collateral | $ 0 | ||
Due dates | October 2021 – September 2036 | ||
Weighted average interest rate | 14.83% | ||
Uncollateralized Bank Customer Loans [Member] | |||
Loans issued | $ 13,428,000 | ||
Loan Currency | KZT | ||
Fair value of collateral | $ 11,089,000 | ||
Due dates | October 2021 - September 2025 | ||
Weighted average interest rate | 12.10% |
LOANS ISSUED (Details Narrative
LOANS ISSUED (Details Narrative) | 6 Months Ended |
Sep. 30, 2021USD ($) | |
LOANS ISSUED | |
Description of loan issued | the Company the ability to sell back to the microfinance organization up to $3,000 of the total loans purchased if such loans become delinquent for more than 20 days. |
Related party microfinance organization allowance | $ 1,187 |
Related party loan | 14,615 |
Purchase of loan | 19,474 |
Sold of loan | $ 2,860 |
DEFFERED TAXES LIABILITIES (Det
DEFFERED TAXES LIABILITIES (Details) - USD ($) | Sep. 30, 2021 | Mar. 31, 2021 |
Deferred tax asset: | ||
Tax losses carryforward | $ 310,000 | $ 316,000 |
Accrued liabilities | 520,000 | 236,000 |
Depreciation | 0 | 16,000 |
Revaluation on trading securities | 415,000 | 0 |
Valuation allowance | (310,000) | (316,000) |
Deferred tax assets | 935,000 | 252,000 |
Deferred tax liabilities: | ||
Revaluation on trading securities | 4,560,000 | 2,546,000 |
Fixed and Intangible Assets | 1,769,000 | 1,568,000 |
Subordinated debt | 502,000 | 523,000 |
Deferred tax liabilities | 6,831,000 | 4,637,000 |
Net deferred tax assets | $ (5,896,000) | $ (4,385,000) |
DEFFERED TAXES LIABILITIES (D_2
DEFFERED TAXES LIABILITIES (Details Narrative) - USD ($) $ in Thousands | 6 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Mar. 31, 2021 | |
Tax losses carryforward | $ 310 | $ 316 | |
Income tax description | the effective tax rate was equal to 13.4% and 16.1%, respectively | The effective tax rate was equal to 13.4% and 16.1%, respectively | |
United States | |||
Income tax rates used for deferred tax assets and liabilities | 21.00% | 21.00% | |
Russian Federation | |||
Income tax rates used for deferred tax assets and liabilities | 20.00% | 20.00% | |
Kazakhstan | |||
Income tax rates used for deferred tax assets and liabilities | 31.00% | 31.00% | |
Kyrgyzstan | |||
Income tax rates used for deferred tax assets and liabilities | 31.00% | 31.00% | |
Germany | |||
Income tax rates used for deferred tax assets and liabilities | 31.00% | 31.00% | |
Cyprus | |||
Income tax rates used for deferred tax assets and liabilities | 12.50% | 12.50% | |
Ukraine | |||
Income tax rates used for deferred tax assets and liabilities | 18.00% | 18.00% | |
Azerbaijan | |||
Income tax rates used for deferred tax assets and liabilities | 2.00% | 2.00% | |
Uzbekistan | |||
Income tax rates used for deferred tax assets and liabilities | 15.00% | 15.00% |
SECURITIES REPURCHASE AGREEME_3
SECURITIES REPURCHASE AGREEMENT OBLIGATIONS (Details) - USD ($) | Sep. 30, 2021 | Mar. 31, 2021 |
Remaining contractual maturity: up to 30 days | $ 531,356,000 | $ 426,715,000 |
Remaining contractual maturity: 30 - 90 days | 5,921,000 | 0 |
Total contractual maturity | 537,277,000 | 426,715,000 |
Corporate equity | ||
Remaining contractual maturity: up to 30 days | 5,757,000 | |
Remaining contractual maturity: 30 - 90 days | 0 | |
Total contractual maturity | $ 5,757,000 | |
Average interest rate | 3.78% | |
U.S. sovereign debt | ||
Remaining contractual maturity: up to 30 days | 2,214,000 | $ 1,809,000 |
Remaining contractual maturity: 30 - 90 days | 0 | 0 |
Total contractual maturity | $ 2,214,000 | $ 1,809,000 |
Average interest rate | 0.35% | 0.40% |
Corporate debt | ||
Remaining contractual maturity: up to 30 days | $ 376,018,000 | $ 189,337,000 |
Remaining contractual maturity: 30 - 90 days | 5,921,000 | 0 |
Total contractual maturity | $ 381,939,000 | $ 189,337,000 |
Average interest rate | 9.21% | 9.27% |
Non-US sovereign debt one | ||
Remaining contractual maturity: up to 30 days | $ 153,124,000 | $ 229,812,000 |
Remaining contractual maturity: 30 - 90 days | 0 | 0 |
Total contractual maturity | $ 153,124,000 | $ 229,812,000 |
Average interest rate | 8.92% | 9.28% |
SECURITIES REPURCHASE AGREEME_4
SECURITIES REPURCHASE AGREEMENT OBLIGATIONS (Details Narrative) - USD ($) $ in Thousands | Sep. 30, 2021 | Mar. 31, 2021 |
SECURITIES REPURCHASE AGREEMENT OBLIGATIONS | ||
Fair value of collateral pledged | $ 550,297 | $ 426,669 |
CUSTOMER LIABILITIES (Details)
CUSTOMER LIABILITIES (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Mar. 31, 2021 |
Customer liabilities | $ 1,219,364 | $ 1,163,697 |
Brokerage customers | ||
Customer liabilities | 1,005,653 | 938,086 |
Banking customers | ||
Customer liabilities | $ 213,711 | $ 225,611 |
CUSTOMER LIABILITIES (Details N
CUSTOMER LIABILITIES (Details Narrative) - USD ($) $ in Thousands | Sep. 30, 2021 | Mar. 31, 2021 |
CUSTOMER LIABILITIES | ||
Current accounts | $ 106,800 | $ 133,493 |
Deposits | $ 106,911 | $ 92,118 |
TRADE PAYABLES (Details)
TRADE PAYABLES (Details) - USD ($) | Sep. 30, 2021 | Mar. 31, 2021 |
Trade payables | $ 51,071,000 | $ 22,304,000 |
Margin lending payable [Member] | ||
Trade payables | 44,668,000 | 20,120,000 |
Coupon payable [Member] | ||
Trade payables | 2,226,000 | 0 |
Payables to suppliers of goods and services [Member] | ||
Trade payables | 3,604,000 | 1,708,000 |
Trade payable for securities purchased [Member] | ||
Trade payables | 295,000 | 264,000 |
Other Liabilities [Member] | ||
Trade payables | 247,000 | 212,000 |
Guarantee Fee Received [Member] | ||
Trade payables | 30,000 | 0 |
Advances Received [Member] | ||
Trade payables | $ 1,000 | $ 0 |
TRADE PAYABLES (Details Narrati
TRADE PAYABLES (Details Narrative) - USD ($) $ in Thousands | Sep. 30, 2021 | Mar. 31, 2021 |
Trade payables | $ 106,800 | $ 133,493 |
Related Party [Member] | ||
Related party due percentage | 87.00% | 62.00% |
Trade payables | $ 44,330 | $ 13,810 |
SECURITIES SOLD NOT YET PURCH_2
SECURITIES SOLD NOT YET PURCHASED AT FAIR VALUE (Details Narrative) - USD ($) $ in Thousands | 6 Months Ended | |
Sep. 30, 2021 | Mar. 31, 2021 | |
SECURITIES SOLD NOT YET PURCHASED AT FAIR VALUE (Details Narrative) | ||
Loss on the change in the fair value | $ 420 | |
Short position amount | 23 | |
Securities sold, not yet purchased at fair value | 14,867 | $ 8,592 |
Proceeds from sale of shares, other | $ 5,878 |
LOANS RECEIVED (Details)
LOANS RECEIVED (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Mar. 31, 2021 | |
LOANS RECEIVED | ||
Borrower | Freedom Holding Corp | |
Lender | Non-Bank | |
Total amount outstanding | $ 3,456 | $ 3,373 |
Amount Outstanding | $ 3,456 | $ 3,373 |
Average Interest Rate | 5.00% | |
Term | 14 months | |
Maturity date | 12/31/21 |
LOANS RECEIVED (Details Narrati
LOANS RECEIVED (Details Narrative) - USD ($) $ in Thousands | Sep. 30, 2021 | Mar. 31, 2021 |
LOANS RECEIVED | ||
Accrued interest | $ 156 | $ 73 |
DEBT SECURITIES ISSUED (Details
DEBT SECURITIES ISSUED (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Mar. 31, 2021 |
DEBT SECURITIES ISSUED | ||
Debt securities issued denominated in USD | $ 50,541 | $ 60,743 |
Debt securities issued denominated in RUB | 6,872 | 6,605 |
Accrued interest | 833 | 1,095 |
Total | $ 58,246 | $ 68,443 |
DEBT SECURITIES ISSUED (Detai_2
DEBT SECURITIES ISSUED (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
May 31, 2021 | Feb. 29, 2020 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | |
Bond carrying value amount | $ 10,477 | ||||
Accrued interest | $ 274 | ||||
Minimum [Member] | |||||
Maturity dates | February 2022 | ||||
Coupon rates | 6.50% | 12.00% | |||
Maximum [Member] | |||||
Maturity dates | January 2023 | ||||
Coupon rates | 12.00% | ||||
FRHC notes [Member] | |||||
Debt securities | $ 20,498 | ||||
Rate of interest | 7.00% |
NET GAIN ON TRADING SECURITIE_2
NET GAIN ON TRADING SECURITIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
NET GAIN ON TRADING SECURITIES | ||||
Net gain recognized during the period on trading securities sold during the period | 143,724 | 5,883 | 149,536 | 17,123 |
Net unrealized gain/(loss) recognized during the reporting period on trading securities still held at the reporting date | $ 31,528 | $ 2,419 | $ 35,616 | $ 263 |
Net gain recognized during the period on trading securities | $ 175,252 | $ 8,302 | $ 185,152 | $ 17,386 |
NET GAIN ON TRADING SECURITIE_3
NET GAIN ON TRADING SECURITIES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Mar. 31, 2021 | |
Trading portfolio fair value | $ 50,083 | $ 50,083 | $ 18,408 | |
Realized gain | 141,067 | |||
Net proceeds from investors | 155,673 | |||
Trading securities | $ 974,481,000 | 974,481,000 | $ 736,188,000 | |
Net gain on trading securities | 179,015 | |||
Unrealized gains | (35,616,000) | $ (263,000) | ||
Saint Petersburg [Member] | ||||
Common shares issued | 11,500 | |||
Unrealized gains | $ 37,948,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Jul. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Mar. 31, 2021 | |
Commission income | $ 84,444,000 | $ 41,167,000 | $ 150,416,000 | $ 71,957,000 | ||
Receivables from brokerage | 268,000 | 962,000 | ||||
Margin lending receivables | 216,171,000 | 216,171,000 | $ 9,886,000 | |||
Lending payables | 44,327,000 | 44,327,000 | 13,810,000 | |||
Accounts payable | 240,000 | 240,000 | 339,000 | |||
Customer liabilities | 359,384,000 | 359,384,000 | 327,610,000 | |||
Restricted stock based compensation expense | 385,000 | 0 | 566,000 | 0 | ||
Loans amount | 13,428 | 13,428 | 0 | |||
Percentages of outstanding equity interest | 23.88% | |||||
Sale of Freedom UA shares | $ 416,000 | 416,000 | 416,000 | |||
Commission expenses | 5,245,000 | $ 7,936,000 | 10,527,000 | $ 10,381,000 | ||
Sold of loan | 2,860 | |||||
Purchase of loan | 19,474 | |||||
Brokerage Accounts [Member] | ||||||
Restricted customer cash | 248,371,000 | 248,371,000 | 156,878,000 | |||
Financial liabilities | 1,876,000 | 1,876,000 | 1,707,000 | |||
Cash and cash equivalents | $ 22,890,000 | $ 22,890,000 | $ 12,256,000 |
STOCKHOLDERS EQUITY (Details Na
STOCKHOLDERS EQUITY (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
May 18, 2021 | Dec. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Stock-based compensation expense | $ 4,561,000 | $ 530,000 | $ 6,722,000 | $ 1,055,000 | ||
Non-qualified stock options to purchase | $ 60,000 | |||||
Non-qualified stock options exercise price | $ 1.98 | |||||
Total proceeds | $ 119 | |||||
One year vesting conditions [Member] | ||||||
Ristricted stock granted, shares | 200,942 | |||||
Two year vesting conditions [Member] | ||||||
Ristricted stock granted, shares | 211,658 | |||||
Three year vesting conditions [Member] | ||||||
Ristricted stock granted, shares | 206,300 | |||||
56 employees [Member] | ||||||
Ristricted stock granted, shares | 1,031,500 | |||||
Three employees [Member] | ||||||
Ristricted stock granted, shares | 15,000 | |||||
Three employees [Member] | One year vesting conditions [Member] | ||||||
Ristricted stock granted, shares | 4,500 | |||||
Three employees [Member] | Two year vesting conditions [Member] | ||||||
Ristricted stock granted, shares | 4,500 | |||||
Three employees [Member] | Three year vesting conditions [Member] | ||||||
Ristricted stock granted, shares | 6,000 |
STOCK BASED COMPENSATIONS (Deta
STOCK BASED COMPENSATIONS (Details) | 6 Months Ended |
Sep. 30, 2021 | |
Monte Carlo [Member] | |
Term (years) | 5 years |
Volatility | 41.50% |
Risk-free rate | 0.06% |
Black Scholes [Member] | |
Term (years) | 3 years |
Volatility | 165.33% |
Risk-free rate | 1.66% |
STOCK BASED COMPENSATIONS (De_2
STOCK BASED COMPENSATIONS (Details 1) $ in Thousands | 6 Months Ended |
Sep. 30, 2021USD ($)shares | |
STOCKBASED COMPENSATION | |
Restricted stock outstanding, beginning balance | shares | 15,000 |
Restricted stock granted | shares | 1,031,500 |
Restricted stock Vested | shares | 0 |
Restricted stock Forfeited/cancelled/expired | shares | 0 |
Restricted stock outstanding, ending balance | shares | 1,046,500 |
Weighted average fair value, beginning balance | $ | $ 775 |
Weighted average exercise price granted | $ | 39,465 |
Weighted average exercise price vested | $ | 0 |
Weighted average exercise price forfeited/cancelled/expired | $ | 0 |
Weighted average fair value, ending balance | $ | $ 40,240 |
STOCK BASED COMPENSATIONS (De_3
STOCK BASED COMPENSATIONS (Details 2) | 6 Months Ended |
Sep. 30, 2021USD ($)$ / sharesshares | |
STOCKBASED COMPENSATION | |
Number of options outstanding, beginning | shares | 60,000 |
Number of options Granted | shares | 0 |
Number of options Exercised | shares | (60,000) |
Number of options forfeited/cancelled/expired | shares | 0 |
Number of options outstanding, ending | shares | 0 |
Number of options exercisable | shares | 0 |
Weighted average exercise price outstanding, beginning | $ 1.98 |
Weighted average exercise price granted | 0 |
Weighted average exercise price exercised | 1.98 |
Weighted average exercise price forfeited/cancelled/expired | 0 |
Weighted average exercise price outstanding, ending | 0 |
Weighted average exercise price, exercisable | $ 0 |
Weighted average remaining contractual term outstanding, beginning | 6 years 6 months 7 days |
Weighted average remaining contractual term outstanding, ending | 0 years |
Weighted average remaining contractual term exercisable, ending | 0 years |
Aggregate intrinsic value outstanding, beginning | $ | $ 3,083,000 |
Aggregate intrinsic value granted | $ 0 |
Aggregate intrinsic value exercised | $ | $ 0 |
Aggregate intrinsic value forfeited/cancelled/expired | $ 0 |
Aggregate intrinsic value outstanding, ending | $ | $ 0 |
Aggregate intrinsic value exercisable | $ | $ 3,742,000 |
STOCK BASED COMPENSATIONS (De_4
STOCK BASED COMPENSATIONS (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
STOCKBASED COMPENSATION | ||||
Compensation expense | $ 4,561,000 | $ 476,000 | ||
Weighted average period | The cost is expected to be recognized over a weighted average period of 4.62 years | |||
Restricted shares awarded | 1,031,500 | |||
Compensation expense related to restricted stock | $ 6,722,000 | $ 947,000 | ||
Unrecognized compensation cost | 33,459,000 | |||
Outstanding option | $ 0 | $ 54 | ||
Purchase of stock option total | $ 60,000 |
LEASES (Details)
LEASES (Details) $ in Thousands | Sep. 30, 2021USD ($) |
LEASES | |
Operating lease assets - Right-of-use assets | $ 16,471 |
Total lease assets | 16,471 |
Operating lease liability | 16,298 |
Total lease liability | $ 16,298 |
LEASES (Details 1)
LEASES (Details 1) $ in Thousands | 6 Months Ended |
Sep. 30, 2021USD ($) | |
Twelve months ending March 31, | |
2022 | $ 4,291 |
2023 | 7,618 |
2024 | 3,511 |
2025 | 2,110 |
2026 | 1,327 |
Thereafter | 330 |
Total Payment | 19,187 |
Less: amounts representing interest | (2,889) |
Lease liability, net | $ 16,298 |
Weighted average remaining leas term (in months) | 26 |
Weighted average discount rate | 12.00% |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
LEASES | ||||
Short term operating lease | $ 626 | |||
Rent expenses | $ 653 | $ 70 | $ 769 | $ 171 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands | Sep. 30, 2021USD ($) |
COMMITMENTS AND CONTINGENCIES | |
Bank guarantees | $ 7,089 |
Unfunded commitments under lines of credit | 6,250 |
Total | $ 13,339 |