Company: TOP
Filing Date: 2025-08-13
Form Type: 20-F
Source: 0001213900-25-075728
Chunk: 104

Company: TOP Financial Group Ltd
Filing Date: 2025-08-13
Form: 20-F
Item: Item 19
Chunk 104
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 the scope of ASC Topic 825, Financial
Instruments, which is excluded from the scope of ASC Topic 606. Trading gains and losses mainly consist of realized and unrealized
gains and losses from the (1) investment in OTC derivative business, (2) US common stocks, which are included in Securities owned,
at fair value, and (3) foreign exchange forward purchased on the investment accounts in JP Morgan. Regarding the investment in
OTC derivative business, the Company subscribed for 50% of the structured note portfolio. According to the agreements among the
Company and other holders of structured notes, company gains and losses mainly from (i) in the event the portfolio makes gains and
declares distribution of dividends from the portfolio, the Company is entitled to 20% of dividends, (ii) in the event the portfolio
suffers losses, the other 50% holders of structured notes shall bear the losses until the net assets of the portfolio reached 55% of
total subscription amount, and (iii) in the event the net assets of portfolio is below 55% of subscription amount, the portfolio is
terminated.

The
Company launched the loan business in 2024. For the years ended March 31, 2025 and 2024, the Company provided the loan business
to third party customers. The business was approved by Hong Kong Licensing Court under the Money Lenders Ordinance. The Company disbursed
loans to customers for a fixed period and charged interests from the customers. The principal and interest are repayable upon the maturity
of the loans.

Interest
and other income primarily consist of interest earned on bank deposits.

Commission
expenses

Commission
expenses related to futures and other financial service transactions are primarily transaction costs paid to broker-dealers. These costs
are expensed as incurred.

F-16

TOP
Financial Group Limited

Notes
to Consolidated Financial Statements

For
the Years Ended March 31, 2025, 2024 and 2023

2.
Summary of Significant Accounting Policies (Continued)

Income
taxes

The
Company accounts for income taxes in accordance with the U. S. GAAP. Under the asset and liability method as required by this accounting
standard, the recognition of deferred income tax liabilities and assets for the expected future tax consequences of temporary differences
between the income tax basis and financial reporting basis of assets and liabilities. Provision for income taxes consists of taxes currently
due plus deferred taxes.

The
charge for taxation