Assets Valuation Report 1.doc

Assets Valuation ReportYangtong Appraisal (2008)Document No. 040(The English Version of this report is only for the clients reference. In the event of any inconsistency between the Chinese and the English versions, the Chinese version shall prevail.)Entrusted by Jiang Yingchun, the owner of the real estate consulting its value , Yangzhou Tongxin Assets Appraisal Office made an objective, independent, impartial and scientific valuation in accordance with the government regulations concerned. Following the necessary valuation procedures, our valuator carried on a series of work including spot investigating, market researching and inquiring, which objectively provided the market value of the entrusted assets on on August 30,2008. The whole assets valuation conclusions are summarized as follows:1. An brief introduction to the entrustor- the assets occupant Jiang Yingchun, the entrustor and assets occupant, whose ID card number is entrusted us with the valuation work of his personal real estate, the Room 105 of Building 16, Oudu Housing Estate, for the information of its market value.2. Valuation PurposeThisvaluationisconductedtoprovidethe client with reference guidance on the market valueofthe assets3. Valuation objectThe object of the valuation is Room 105 of building 16 in Oudu Housing Estate, which is 147.86 square meters in size.It was written clearly in the Certificate of Ownership that the house was mortgaged on June,13, 2007 to the Agricultural Bank of China, Yangzhou Xingxu Subbranch for ￥424000. The agreed mortgage period is 240 months.4. Valuation dateThe valuation date is August 30, 2008. During the period of valuation, the valuation object, the exact valuated price and the choosing of valuation parameters are all determined on the basis of the economic and the market conditions on that day. Therefore, the prices adopted in the valuation are the standard ones on the valuation date. 5. Valuation principlesObserving the working principles of independence, objectivity and scientificalness, the valuation operation is executed strictly according to the laws, regulations and related stipulations of the state to ensure that the assets valuation shall be carried out reasonably and scientifically without being disturbed externally or affected by the valuator party. At the same time, the principle of contribution, principle of substitution and principle of anticipation are also followed as per the type and actual conditions of assets. 6. Valuation basis 1) Laws and regulations concerneda. (1991) Document No. 1 Adminitrative Procedures of Stated-owned Assets Valuation issued by the State Council ;b.(1992) Document No. 36 Detailed Rules of Valuation and Management of Stated-owned Assets issued by the State-Owned Assets Administration Bureau;c. (1996) Document No. 23 Opinions on Standard of Assets Valuation Operation (trial) issued by the former State-owned Assets Office of the State-Owned Assets Administration Bureau;d. Finance Appraisal (1999)Document No. 91 Provisional Rules of Basic Contents and Formats of Assets Valuation Report issued by the Ministry of Finance;e. Fincacial Accounting (2001) Document No.1051 Criteria on Assets Valuation- the Fundamental Criteria issued by Ministry of Finance.2) Economic behaviour basis The Agreement on the Assets Valuation signed between Jiang Yingchun and the Office3) Evidential certificates a. the copy of the Certificate of Ownership provided by Jiang Yingchun b. other materials offered by Jiang Yingchun4) Pricing basisa. Manual of Frequently-Used Data and Parameters of Assets valuation;b. Imformation supplied on prices of construction and decoration materials;c. Records of spot investigation obtained by the valuator;d. Materials offered by the entrusting party;e. Price-inquiring and parameter documents; f. Documents issued by state departments concerned;g. Other relevant materials collected by the Office.7. Valuation methodConsidering the valuation purpose, the specific classification of the asset in combination with its economic and technical features, Market Method is adopted. Market method, which is also known as Market Comparision Method or Current Market Value Method,etc., is the commonly used and internationally accepted assets valuation method. Based on the active and fair market, the asset which is the same or the similar with the valuated object is chosen to have its price compared and modified so as to get the final appraisal value of the object. The basic equation is as follows:The market price = the price of comparision casemodifying parameter of transaction conditionmodifying parameter of transaction datemodifying parameter of locationparticular modifying parameterBecause the real estate transacted in the market is generally sold together with the two cetificates, the Certificate of Ownership and the Certificate of Land Use ( in China, land is state-owned). So the market price the valuator obtained in this valuation operation is based on the premise that the appraied assets shall be sold together with the above-mentioned two proper certificates without taking consideration of the possible impact the unavailabilityof the Certificate of Land Use made on ourvaluation.8. Valuation stepsThe whole valuation period experienced the following five steps: 1). Commission accepting: Firstly, we listened to the introduction made by the entrusting party on the valuation object, classifications, purpose and the required date of progressing. At the same time, we came to the spot to make a pre-survey so as to get a brief understanding of the entrusted assets. After taking a careful consideration of our personnels experience and ability together with the information we got from the pre-survey, we deceided to accept the entrusting. According to the particular valuation purpose, we discussed with the entrusting party on the Valuation Date and signed The Agreement on the Assets Valuation. Secondly, based on contents of the agreement, we determined the valuation working plan, valuation methodology, valuators and progress arrangement. Meanwhile, we notified the clients of all the preparation work which should be done before the valuation so as to facilitate the operation. These preparation work includes verifying assets, fulling in the Assets Declaration Form as well as preparing all the economic and technical documents needed in the valuation. 2). Assets verifying: According to the specific conditions of the entrusted assets, appropriateapproacheswereadopted. a. We arranged professional personnels to help the assets occupant to fill in the Assets Valuation List and prepare documents needed in the work.b. Valuators verified item by item for confirming the agreement of title and size written on the Assets Valuation List and the documents offered by the entrusting party.c. A spot investigation was made with the company of the entrusting party.d. Valuators examined all the documents item by item extended by entrusting party for confirming the objective existence and its validity. 3). Appraising and calculating: a. The relative price information on the valuated assets was collected first.b. In accordance with valuation purpose, the collected information, together with the appraisal verificaiton results, the valuators executed the valuation and estimation as per the determined valuation method. 4). Valuation summarizing : a. It was the designated project principal who did the summarization, analysis, adjusting and correction work.b. Three major documents including the Valuation Report, the Valuation Illustration of Individual Asset and the Valuation Case Analysis were made. The Verification Work Sheet internally used was prepared for the approval of the leader checker.c. The report finally was revised based on the checkers advice. 5) Issuing the formal valuation report and submitting to the client9. Valuation conclusionFollowing the foregoing appraisal procedures and methods, theappraisedvalue of Room 105 in building 16 in Oudu Housing Estate, which is 147.86 square meters, together with its two certificates (The Certificate of Ownership and the Certificate of Land Use)is Nine Hundred and Eighty Thousand Three Hundred and Ten Yuan(￥980，310)Please refer to the Valuation Technical Illustration for detailed conclusion. 10. Directions for special items in valuation report:a. The Appraised Value this report mentioned here is referred to the current fair market price of appraised object ,which is supposed to be further used without changing its function. The setting of the current fair market price is based on economic conditions on the valuation date with the purpose of listed in this report. The market price refers to the estimated price of the assets which should be sold in the fair transaction on the valuation date at both parties will. The buyer and sellor should make the transaction cautiously without being forced.b. The appraised price includes the cost of decoration, garage and the attached facilities which can not be separated with the object.c. Taxing deductions and additions obtained in this valuation is excluded from the appraised price. d. It was written clearly in the Certificate of Ownership that the house is mortgaged to the Agricultural Bank of China, Yangzhou Xingqu Subbranch for ￥424000. The agreed mortgage period is 240 months. The Certificate of Land Use concerned, which was said being applied for at that time, was not provided by the entrusting pary. Therefore, it was not taken consideration in this valuation. e. The entrusting party and assets occupant should take the full legal responsibility for the information submitted such as the economic behaviour documents and the evidential certificates. The legal liability of any inaccuracy and mistake due to untrueness and incompleteness of documents the entrusting party provided will not be undertaken by the valuators and the Office.f. Instead of confirming, ensuring and judging the ownership of the object, what the Certified Public Valuator did here is just to appraise the value of object and give a professional idea. Theimpactofthe possibilities of mortgage, rent or ownershipisexcludedinourvaluation. The obtained appraised value is the market price of the object in its perfect condition with two certificates.g. Attached to this report, there are some documents, which constitute parts of the report so are legally of the same importance with the main text. Please read carefully together with the report.Special attention should be paid to the influence of all above special items made on the valuation conclusion.11. Appraising and reporting important affairs happened after the valuation dateIf there was any assets alteration to the valuation conclusion after the valuation date but within the date of validity, the assets value should be adjusted accordingly as per the former valuation method. A revaluation should be made in time by the appraisal institutions if the the price sandard changed and had a obvious effect on the appraised value. The entrusting party should take a thorough consideration of the assets alteration as well as the price sandard changing, then make the adjustment accodingly.12. Leagal effect of valuation reporta. The entrusting party take the full legal responsibility for the information submitted, undertake the legal liability for the integrity, legality and trueness of declared assets. b.Ourvaluationhasbeenmadeonthepremiseofgoingconcernandopenmarket. That is to say, the appraised assets will be further used and the valuation is made according to the fair price of the open market. c. The valuated price is the current fair market price of appraisal object determined according to public market principle and the valuation purpose, without considering the price inquiry, guarantee matters possibly undertaken in the