Company: FRHC
Filing Date: 2025-07-29
Form Type: ARS
Source: 0000924805-25-000027
Chunk: 140

Company: Freedom Holding Corp.
Filing Date: 2025-07-29
Form: ARS
Chunk 140
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 Because Kazakhstan's economy is highly dependent on oil exports, any significant decrease in oil prices lead to a devaluation of local currency, which can lose up to 17% quarterly (during COVID-19 outbreak) of its value relative to the U.S. dollar. In addition to its dependence on oil, the Kazakhstani economy is influenced by the economic conditions in Russia due to historically strong trade ties, which manifests in a correlation between the exchange rate of the local currency to the US dollar and that of the Russian ruble to the US dollar. As of March 31, 2025 and 2024, based on our analyses, we estimate that a 10% adverse change in the value of the U.S. dollar relative to all other currencies would result in the following: • A total loss of $90.0 million in 2025 and $76.5 million in 2024. • A loss of $131.3 million on trading securities in 2025 and $342.5 million in 2024. • A gain of $41.3 million, excluding trading securities, in 2025 and a gain of $266.0 million in 2024. Equity Price Risk Our equity investments are susceptible to market price risk arising from uncertainties about future values of such investment securities. Equity price risk results from fluctuations in price and level of the equity securities or instruments we hold. We also have equity investments in entities where the investment is denominated in a foreign currency, or where the investment is denominated in U.S. dollars but the investee primarily makes investments in foreign currencies. The fair values of these investments are subject to change at the spot foreign exchange rate between these currencies and our functional currency fluctuates. We attempt to manage the risk of loss inherent in our equity securities portfolio through diversification and by placing limits on individual and total equity instruments we hold. Reports on our equity portfolio are submitted to our management on a regular basis. As of March 31, 2025, and 2024, our exposure to equity investments at fair value was $111.1 million and $126.1 million, respectively. Based on an analysis of the March 31, 2025 and 2024 (not including trading portfolio) balance sheets we estimate that a decrease of 10% in the equity price would have reduced the value of the equity securities or instruments we held by approximately $11.1 million and $12.6 million, respectively. Credit Risk Credit risk refers to the risk of loss