STATUTORY CAPITAL REQUIREMENTS

6 Months Ended

Sep. 30, 2024

The Company has two insurance subsidiaries operating in Kazakhstan: Freedom Life (a regulated life insurer) and Freedom Insurance (a regulated property and casualty insurance entity). The Law of the Republic of Kazakhstan No. 126-II "On Insurance Activities" (the "Insurance Law") is the main law regulating the insurance sector in Kazakhstan. It establishes a framework for insurance activities, registration and licensing of insurance companies and regulation of insurance activities by the Agency of the Republic of Kazakhstan for Regulation and Development of Financial Market (“ARDFM”).

Freedom Life and Freedom Insurance are required to notify and coordinate with the ARDFM any proposals to declare or pay a dividend on their share capital. The amount of dividends these subsidiaries are permitted to declare is limited to the relevant subsidiary’s realized retained earnings and dividends can only be paid to the extent they will not cause a breach to the minimum solvency and capital requirements of the relevant subsidiary. As of September 30, 2024 and March 31, 2024, Freedom Life and Freedom Insurance were in compliance with the ARDFM dividend, minimum solvency and minimum capital requirements. Freedom KZ in its capacity of an insurance holding is also limited in declaration and payment of dividends if such payment leads to breach of capital ratios applicable to insurance companies Freedom Life and Freedom Insurance.

There are no significant differences between the statutory accounting practices and statements prepared in accordance with U.S. GAAP for the insurance subsidiaries.

In addition, the Company's subsidiaries operate under various securities brokerage, banking and financial services regulations and must maintain such licenses in order to conduct their operations. As of September 30, 2024 and March 31, 2024, the Company, through its subsidiaries, held: (a) brokerage licenses (i) in Kazakhstan issued by ARDFM and the Astana Financial Services Authority (the "AFSA"), (ii) in Cyprus issued by the Cyprus Securities and Exchange Commission ("CySEC"), (iii) in the United States issued by FINRA, (iv) in Armenia issued by the Central Bank of Armenia, and (v) in Uzbekistan issued by the Ministry of Finance of the Republic of Uzbekistan; (b) a banking license for foreign currency operations license in Kazakhstan issued by the ARDFM; (c) a banking license for corporate and retail banking services in Kazakhstan issued by the ARDFM (including for currency exchange operations); and (d) special registration as a payment service provider in Kazakhstan with the National Bank of the Republic of Kazakhstan, and licenses in Uzbekistan and Kyrgyzstan for payments services from the National Bank of the Kyrgyz Republic and the Central Bank of Uzbekistan, respectively.

The table below presents net capital/eligible equity, required minimum capital, excess regulatory capital and retained earnings as of September 30, 2024 for each of the regulated entities that is material for our condensed consolidated financial statements.


(amounts in thousands)	Regulated activities	Net Capital/Eligible Equity		Required Minimum capital/solvency		Excess regulatory capital		Retained earnings

Freedom Bank KZ	Banking	$	328,142	$	174,887	$	153,255	$	235,976
Freedom EU	Brokerage	269,027		10,971		258,056		367,702
Freedom KZ	Brokerage	103,039		384		102,655		138,805
Freedom Global	Brokerage	67,277		22,325		44,952		143,695
Freedom Life	Life Insurance	44,614		11,509		33,105		75,193
Freedom Insurance	Property and Casual Insurance	44,451		11,509		32,942		39,278
Freedom Armenia ("Freedom AR")	Brokerage	22,927		781		22,146		22,015
Other regulated operating subsidiaries	Other	11,034		159		10,875		(18,426)
		$	890,511	$	232,525	$	657,986	$	1,004,238

According to the requirements of National Bank of the Republic of Kazakhstan, the regulator of Freedom KZ and Freedom Life, capital is adjusted through subtraction of non-liquid assets. Consequently, it may result that net capital for regulatory purposes may be lower than retained earnings balances. As per capital requirements applicable to Freedom EU regulated by The Cyprus Securities and Exchange Commission and Freedom Global regulated by Astana Financial Services Authority, current year profit is not included within net capital for regulatory purposes, as profits can only be included in net capital after a statutory audit is completed.

The table below presents net capital/eligible equity, required minimum capital, excess regulatory capital and retained earnings as of March 31, 2024 for each of the regulated entities that is material for our condensed consolidated financial statements.


(amounts in thousands)	Regulated activities	Net Capital/Eligible Equity		Required Minimum capital/solvency		Excess regulatory capital		Retained earnings

Freedom Bank KZ	Banking	$	329,738	$	196,594	$	133,144	$	193,376
Freedom EU	Brokerage	269,424		10,868		258,556		319,484
Freedom KZ	Brokerage	107,064		413		106,651		122,416
Freedom Life	Life Insurance	50,757		12,395		38,362		57,085
Freedom Insurance	Property and Casual Insurance	30,011		12,395		17,616		19,773
Freedom Global	Brokerage	16,428		12,352		4,076		117,468
Freedom Armenia ("Freedom AR")	Brokerage	7,317		763		6,554		6,447
Other regulated operating subsidiaries	Other	8,533		155		8,378		(11,665)
		$	819,272	$	245,935	$	573,337	$	824,384

- Definition

The entire disclosure for regulatory capital requirement for depository and lending institutions. Institutions include, but not are not limited to, finance company, insured depository institution, bank holding company, savings and loan association holding company, bank and savings institution not federally insured, mortgage company, foreign financial institution and credit union.

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