Company: FRHC
Filing Date: 2025-07-29
Form Type: ARS
Source: 0000924805-25-000027
Chunk: 106

Company: Freedom Holding Corp.
Filing Date: 2025-07-29
Form: ARS
Chunk 106
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 through targeted acquisitions as part of our broader strategy to develop and expand our integrated digital fintech ecosystem. These acquisitions enable us to quickly enhance existing services, enter complementary markets and gain new technological capabilities, significantly influencing our business and financial performance. Additionally, consistent with our strategic vision, we have in recent years initiated expansion into new business sectors, including telecommunications and media content in Kazakhstan. Our telecom business, Freedom Telecom, will require significant capital investments in network infrastructure, licenses, and targeted acquisitions, and is expected to incur operating losses in its initial years, transitioning to profitability over the medium term. Similarly, our newly established subsidiary, Freedom Media, will deliver a broad portfolio of digital media content to our customers, also incurring initial losses before becoming profitable within the next several years. While these new ventures are anticipated to enhance long-term growth prospects, they will initially increase capital expenditures, elevate our debt service obligations, and negatively impact consolidated net income during the early stages of implementation. Related Party Transactions During fiscal years 2025 and 2024, we entered into various transactions with the Company's related parties. Historically, a significant portion of these transactions involved FST Belize, an entity wholly owned by our CEO, Chairman, and majority shareholder, Mr. Timur Turlov, but not part of our consolidated Group. We have wound down our arrangements with FST Belize prior to the end of fiscal 2024, resulting in a substantial reduction in the volume and total amount of related-party transactions in fiscal 2025 compared to prior years. While such transactions have decreased, we anticipate continuing to engage in related-party transactions as part of our business. Our related party transactions in the fiscal years 2025 and 2024 primarily include margin lending receivables from brokerage services, deposits held at Freedom Bank KZ, prepayments related to our potential acquisitions and certain consumer loans purchased from FFIN Credit, an entity controlled by Mr. Turlov. Additionally, we have continued to financially support the Kazakhstan Chess Federation - an organization in which Mr. Turlov holds a management position - as part of our community engagement initiatives. For additional information regarding our related party transactions see Note 23 "Related Party Transactions" in the notes to our consolidated financial statements contained in Part II Item 8 of this annual report. Market Maker Customer Arrangements Table of Contents 65

We have derived a significant portion of our fee and commission income and interest income from margin loans to customers from trading activity of certain institutional non-US market maker customers with whom we internalize the execution of trades of