Company: TOP
Filing Date: 2025-08-13
Form Type: 20-F
Source: 0001213900-25-075728
Chunk: 69

Company: TOP Financial Group Ltd
Filing Date: 2025-08-13
Form: 20-F
Item: Item 11
Chunk 69
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Item
11. Quantitative and Qualitative Disclosures About Market Risk

Foreign Exchange Risk

Substantially all of our revenues and expenses
are denominated in U. S. dollars and Hong Kong dollars and our expenses are denominated in U. S. dollars, Hong Kong dollars and Euro. We
have not used any derivative financial instruments to hedge exposure to such risk. Financial instruments held for proprietary trading
are denominated in Hong Kong dollars, U. S. dollars and EURO. Although in general our exposure to foreign exchange risks should be limited,
the value of your investment in our Class A Ordinary Shares will be affected by the exchange rate between the U. S. dollar and Hong Kong
dollar as well as between U. S. dollar and EURO because a substantial portion of our operating costs and expenses is effectively denominated
in EURO, while our Class A Ordinary Shares will be traded in U. S. dollars. We may seek to reduce the currency risk by entering into foreign
currency instruments. We did not have any currency hedging instruments as of March 31, 2025, 2024 and 2023, however management monitors
movements in exchange rates closely.

To the extent we need to convert U. S. dollars
into Hong Kong dollars for our operations, appreciation of Hong Kong dollar against the U. S. dollar would reduce the amount in Hong Kong
dollars we receive from the conversion. Conversely, if we decide to convert Hong Kong dollars into U. S. dollars for the purpose of making
payments for dividends on our Ordinary Shares, or for other business purposes, appreciation of the U. S. dollar against the Hong Kong dollar
would reduce the U. S. dollar amounts available to us.

Interest Rate Risk

Our exposure to interest rate risk relates primarily
from our bank deposits and receivables from brokers and dealers. We have not used any derivative financial instruments to manage our interest
risk exposure. Although these interest earning instruments carry a degree of interest rate risk, we have not been exposed to, nor do we
anticipate being exposed to, material risks due to changes in market interest rates. However, our future interest income may fall short
of expectations due to changes in market interest rates.

Credit Risk

Our exposure to credit risk, which will cause
a financial loss to us due to failure to discharge an obligation by the counterparties, relates primarily to our bank deposits (including
our own cash at banks as well as the segregated clients account balances), rece