| 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 |
|
|