Annual report pursuant to Section 13 and 15(d)

SEGMENT REPORTING

v3.22.1
SEGMENT REPORTING
 12 Months Ended
Mar. 31, 2022
Segment Reporting [Abstract]  
SEGMENT REPORTING SEGMENT REPORTING
The Company historically operated as a single operating segment. With the planned restructuring of the Company's operations and divestiture of Russian subsidiaries, coupled with the continued expansion, there was an election to reorganize operations geographically into five regional segments: Central Asia, Europe, United States, Middle East/Caucasus, and Russia (until completion of the planned divestiture). Moving forward after completion of the divestiture of the Company's Russian subsidiaries, the Company will manage its operations in the remaining four regional segments. These operating segments are based on how our CODM will be making decisions about allocating resources and assessing performance.
The following tables summarize the Company's Statement of operation by its geographic segments. Intercompany balances were eliminated for separate disclosure:
Year ended March 31, 2022
STATEMENTS OF OPERATIONS
 Central Asia Europe US Russia Middle East/Caucasus Total
Fee and commission income(1)
$ 25,253  $ 319,810  $ 4,545  $ 82,330  —  $ 431,938 
Net gain/(loss) on trading securities 11,604  122,238  2,546  (58,717) —  77,671 
Interest income 74,251  1,256  483  15,811  —  91,801 
Net gain/(loss) on foreign exchange operations 6,012  (5,598) 1,565  (39,672) —  (37,693)
Net gain/(loss) on derivative 947  —  —  (1) —  946 
TOTAL REVENUE, NET 118,067  437,706  9,139  (249) —  564,663 
Interest expense $ 54,894  $ 8,747  $ 1,808  $ 10,450  —  $ 75,899 
Fee and commission expense 7,945  64,518  780  7,988  —  81,231 
Operating expense 46,807  27,746  13,727  73,030  283  161,593 
Provision for impairment losses/(recoveries) 2,180  60  —  745  —  2,985 
Other expense/(income), net 490  7  819  4,748  (3) 6,061 
TOTAL EXPENSE 112,316  101,078  17,134  96,961  280  327,769 
NET INCOME BEFORE INCOME TAX $ 5,751  $ 336,628  $ (7,995) $ (97,210) (280) $ 236,894 
Income tax (expense)/benefit 1,237  (26,785) (12,989) 13,003  9  (25,525)
NET PROFIT/(LOSS) $ 6,988  $ 309,843  $ (20,984) $ (84,207) (271) $ 211,369 
Year ended March 31, 2021
STATEMENTS OF OPERATIONS
 Central Asia Europe US Russia Middle East Caucasus Total
Fee and commission income(1)
$ 17,088  $ 200,975  $ 1,130  $ 52,746  —  $ 271,939 
Net gain on financial instruments through profit and loss 18,414  8  7,489  20,275  —  46,186 
Interest income 18,465  505  682  11,221  —  30,873 
Net gain/(loss) on foreign exchange operations 1,669  (300) (215) 2,274  —  3,428 
Net gain on derivative 86  —  —  39  —  125 
TOTAL REVENUE, NET $ 55,722  $ 201,188  $ 9,086  $ 86,555  —  $ 352,551 
Interest expense $ 12,770  $ 3,663  $ 2,173  $ 8,760  —  $ 27,366 
Fee and commission expense 1,211  64,487  246  7,156  —  73,100 
Operating expense 19,677  10,921  4,843  41,978  15  77,434 
Provision for impairment losses 1,013  108  395  45  —  1,561 
Other (expense)/income, net (39) (3) (15) 125  —  68 
TOTAL EXPENSE $ 34,632  $ 79,176  $ 7,642  $ 58,064  15  $ 179,529 
NET INCOME BEFORE INCOME TAX $ 21,090  $ 122,012  $ 1,444  $ 28,491  (15) $ 173,022 
Income tax (expense)/benefit 56  (14,013) (9,559) (6,582) —  (30,098)
NET PROFIT/(LOSS) $ 21,146  $ 107,999  $ (8,115) $ 21,909  (15) $ 142,924 
Year ended March 31, 2020
STATEMENTS OF OPERATIONS
 Central Asia Europe US Russia Middle East Caucasus Total
Fee and commission income(1)
$ 2,689  $ 63,577  $ —  $ 26,402  —  $ 92,668 
Net gain/(loss) on financial instruments through profit and loss 8,121  257  (46) 6,591  —  14,923 
Interest income 7,932  260  198  3,744  —  12,134 
Net gain/(loss) on foreign exchange operations 479  (313) 84  2,065  —  2,315 
Net gain/(loss) on derivative —  —  —  (138) —  (138)
TOTAL REVENUE, NET $ 19,221  $ 63,781  $ 236  $ 38,664  —  $ 121,902 
Interest expense $ 8,889  $ 343  $ 324  $ 2,843  —  $ 12,399 
Fee and commission expense 750  18,600  186  2,400  —  21,936 
Operating expense 18,262  3,500  3,921  34,307  —  59,990 
Provision for impairment losses (1,254) —  —  90  —  (1,164)
Other (expense)/income, net 280  (11) (8) 348  —  609 
TOTAL EXPENSE $ 26,927  $ 22,432  $ 4,423  $ 39,988  —  $ 93,770 
NET INCOME BEFORE INCOME TAX $ (7,706) $ 41,349  $ (4,187) $ (1,324) —  $ 28,132 
Income tax (expense)/benefit (15) (4,467) (450) (1,070) —  (6,002)
NET PROFIT/(LOSS) $ (7,721) $ 36,882  $ (4,637) $ (2,394) —  $ 22,130 
(1) All trading of U.S. and European exchange traded and OTC securities by all Freedom securities brokerage firms, excluding PrimeEx, are routed to and executed through Freedom EU and all fee and commission income for those transactions is recognized at Freedom EU.
During fiscal 2022 total revenue, net in our Russia region decreased by $86,804, or 100%, to ($249) generating a negative net revenues for fiscal year 2022, as compared to total revenue, net of $86,555 during fiscal year 2021.
The decrease in fiscal 2022 was driven by an increase in net loss on trading securities as a result of the negative revaluation of certain securities held by Freedom RU, and a net loss on foreign currency exchange operations resulting from the depreciation of the Russian ruble against U.S. dollar by 11%. the decreases were only partially offset by increased fee and commission income resulting from growth of Freedom RU's customer base, coupled with greater customer transaction volume.
During fiscal 2021, total revenue, net in our Russian region increased by $47,891, or 124%, to $86,555, as compared to $38,664 during fiscal year 2020. The increase in total revenue, net during fiscal 2021 compared to fiscal 2020 was the result of overall expansion of our business in our Russian region, both in terms of size of our customer base and trading volume.
The following tables summarize the Company's total asset and total liabilities by its geographic segments. Intercompany balances were eliminated for separate disclosure:
March 31, 2022
Central Asia Europe US Russia Middle East Caucasus Total
Total assets $ 1,166,428  $ 777,117  $ 170,149  $ 806,960  $ 355  $ 2,921,009 
Total liabilities $ 985,936  $ 471,435  $ 175,136  $ 780,655  $ 172  $ 2,413,334 
Net assets $ 180,492  $ 305,682  $ (4,987) $ 26,305  $ 183  $ 507,675 
March 31, 2021
Central Asia Europe US Russia Middle East Caucasus Total
Total assets 714,117  511,366  46,100  746,922  140  2,018,645 
Total liabilities 557,713  462,616  60,043  662,598  3  1,742,974 
Net assets 156,404  48,750  (13,943) 84,324  137  275,671