The financial statements of CHC-Limited are prepared under the historical cost convention in accordance with the guidelines issued by the NBC, accounting principle generally accepted in the Kingdom of Cambodia and practice within the micro finance industry. Those principles require that financial instruments be carried at cost less provision for impairment. This practice differs from the International Financial Reporting Standards which require that loans and receivables be carried at amortised cost using the effective interest method of any difference between the initial amount and the maturity amount, and minus any reduction for impairment or uncollectability.

The presentation of financial statements in conformity with accounting principles generally accepted in the Kingdom of Cambodia requires the Management to make the best estimates and reasonable assumptions that affet the reported amount of assets and liabilities and dislosures of contingent assets and liabilities as of the date of the financial statements and their reported amounts of revenues and expenses during the reporting period. These estimates and assumptios are based on the information available as of the date of the financial statements. Actual results, therefore, could deffer from those estimates.

The accompanying financial statements are prepared for jurisdiction of Cambodia and are not intended to present the finanial position and results of operations and cash flows in accordance with generally accepted accounting principles and practice in other countries and those who are not informed about Cambodia's produres and practises.

The national currency of Cambodia is the Khmer Riel ("KHR"). However, as the Company transacts essentially an US Dollar ("USD") and maintains its books of accounts primarity in USD, the Management hasdetermined the USD to be the Company's measurement and functional currency as it reflects the economic substance of the underlying events and curcumstances of the Company.

Currently, CHC-Limited is engaged in the provision of micro finance activities in four branches located in Phnom Penh, Kep city, Kampot province, and Sihanouk Ville.