.REAL ESTATE APPRAISAL REPORTNameof Project:Room1234, unit 1, F/11, building 7, xuefushu homeland, haidian district, Beijing CityEntrusting Party: rrff ffhhgAppraising Institution: Beijing huaxin real estimate appraisal CO., LTD Appraisers : Ma Haiming Chenjiangbo nizhonghaiAppraisal Working Date：from April, 2, 2014 to April, 2, 2014Appraisal Report No.: [2014]huaxin appraisal G-040051.Contents1. Letter to the entrustingparty ⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯..32. Statement by theappraisers........................................................ (4)3. Presumption and restrictiveconditions⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯..54. Appraisal resultreport ⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯65. Appraisal technicalreport ⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯..116. Appendix ⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯⋯19.Letter to the Entrusting PartyDear Ms. Tian Haiying ,We accepted your appointment to conduct the appraisal on your realestate that you have entrusted us. The appraised object is the real estate located athe appraisal date is July 08, 2010.Purpose of Appraisal: Supplying the reference basis of real estatemarket price for the entrusting party’s knowledgeAppraisal Result:The appraisers have assessed the value of the above-mentioned real estate on the basis of independence,impersonality, equity, legitimacy and cautiousness, adhering to on-spot inspection ofthe real estate as well as comprehensive collection of related marketinformation and appraised object information, in the light of generalanalysis the elements which will influence the market value of the realestate, comply with state regulations on real estate appraisal, realestate appraisal rules and given appraisal purpose as well as by utilizing logical appraisal processes and methods. The appraisal result of theappraised object on July 08, 2010 is as follows (currency: RMB):Unit Price of the appraised object：RMB7623 Yuan/Square MeterTotal Price of the appraised object: RMB1,080,200.00 YuanCapitalization(the capital form of Chinese numerals):RMBone million nine eighty thousand and two hundred Yuan)For detailed appraisal results, process and related explanation,please refer to the ‘ Appraisal Result Report ’and‘Appraisal Technical Report ’.Taiyuan Wuyuetong Real Estate Appraisal Co.,LtdJuly 13, 2010Taiyuan Wuyuetong Real Estate Appraisal CO., LTD（seal）Statement by the AppraisersWe hereby solemnly declare the following:1. All of the information which has been shown in this report is authentic andaccurate.2.All of the analyses, comments and conclusions which have been shownin this report have been presented, given and drawn through our impartialanalysis and professional knowledge. However, all of themhave been restricted by the presumptions and restrictiveconditions which have been explained in this report.3.We have not had the interest conflict with the appraised object, norhave commoninterests with or prejudice against the entrusting party.4.According to Real Estate Appraisal Rules which is the State Standardof the People's Republic of China, we presented analyses, given comments, drawn conclusions and compose the report eventually.5.The on-site inspection of the appraised object has been done by ourappraisers through which they are responsible for the objectivity,authenticity and impartiality of the inspection results. However,unless otherwise agreed, the scope of on-site inspection is restricted to appearance and use status of the appraised object. The appraisersdo not shoulder the responsibility for investigating the structure and quality of the building as well as for examining other overlaid,unexposed and unreachable parts of the appraised object.The appraisers who take charge of on-site inspection are Duan Zhihong and Chai Hongbin.6.Not any important and professional assistance has been offered to theappraisal report.7. The appraisal is based on the relevant documents supplied by theentrusting party who shall be held liable for the authenticity, completeness and consequences incurred. The appraisers shall be onlyheld liable for the operation process and fairness of the appraisalmethod adopted.8.The registered real estate appraisers who take charge of t he appraisal:Duan ZhihongRegistered Public Real Estate Appraiser of P. R. China (RegistrationNo.: 1420020030) Date of expiration：September 2010 (seal)Chai HongbinRegistered Public Real Estate Appraiser of P. R. China (RegistrationNo.: 1420070031) Date of expiration：September 2010(seal)Presumption and Restrictive Conditions1.The entrusting party obtained the appraised object legally andthe appraised object is in sound condition at the appraisal timeand is used legally, safely and normally at its optimal status.2.The real estate market at the appraisal time operates publicly,equally and voluntarily.3.Any operation mode and procedure relating to the appraised objectshall comply with the relevant national and local laws and regulations.4.The owner,the location,the category of property,the building areaand the function of the appraised object in this report shall besubject to what have been recorded in the House Proprietorship Certificate provided by the entrusting party.5.The appraisal result in this report is the market value of the realestate at the appraisal time of 5th , July, 2010 and meets all thepresumption and restrictive conditions. The real estate price shallbe reappraised in case the conditions and purpose set in this report vary.6.The appraisal price in this report is objective and impartial marketprice, without considering the influence on the appraisal result byother rights such as mortgage and leasing right, risk of the futurechange of the real estate market, short-term disciplinary measuresand relevant taxation, etc.7.The appraisal result shall remain effective within one year since thefinalization of the report. If during the period, there is major changein national macroeconomic policy, the real estate market or thephysical status of the appraised object which has major effects onthe appraisal result, we shall be appointed again to perform theappraisal.8. The report shall only be used for the purpose of appraisal by theentrusting party, that is, to supply referential basis for the entrusting party to determine the market value of the real estate. The report shall not be used for other economic activities.9.The report shall be used as a whole and we shall not be heldliable for the relevant losses resulted from the use of the part ofthe report.Appraisal Result ReportBing Wu Yue Tong Gu Zi [2010] No. 0706The Entrusting Party:Name: ————————Home Address: ————————The Entrusted Appraising Party:Company name：———————— Co., LtdClass:————————Legal representative:————————Address:————————Telephone: (————————————————CO., LTD （seal ）Appraised ObjectThe appraised object : the appraised object is located at———————— .The building have 7 floots and was built in 2004 . Buildingwith steel reinforced concrete structure , the outside wall wastile fixing . The doors of Unites are intelligent security doors ,the ground inside the building is waterstone , iron railings andwooden arms , inside wall is emulsion paint, The appraised object located at Room02 , Unit11 ,third floor of the building . It isa residence .Decoration status of the appraised object:High-grade decoration , the floor of the room is covered by import granite ,the wall is painted by latex, and the flooring angular line is madeof clad plate as well as the suspended ceiling is decorated byfluorescent lamp. Parlour is very artistic, the wall is black marble , integral ambry .The outer window of the room is decorated by top-grade insulating glass with aluminum alloy, stainless steelguard bar and marble windowsill. What’s more, the door of the room consists of security door and wooden door , and the flooring angular line is made of ceramic tile,the suspended ceiling is decorated by fluorescent lamp as well.marble wash stand ,sanitary fittings are complete;there are water,electricity,central heating,gas, television, internet in the house .Status of Proprietorship:Fang Quan Zheng Bing Zi“House Proprietary Certificate” which has been provided by theentrusting party shows: Owner: Sun Zhiyu Yang Fang ;Location:———————— d ; Category of Property: Private; Building No.: 1;RoomNo.0302;Structure:Steel reinforced concrete;Total Building Floors: 7; Floor No. of the Appraised Object: 3; Building Area：141.70 square meters; Use of Design: Residence .Purpose of Appraisal: Supplying the reference basis of real estatemarket price for the entrusting party’s knowledge .The appraisal date: July 08, 2010.Definition of Price: The appraisal adopts the market price standardof the real estate,that is, the appraisal is complying with the market price on July 08, 2010 which is the appraisal date.Appraisal Basis:1.“Administration Rule of Urban Real Estate of P. R. China”2.“Administration Rule of Land Use of P. R. China”3.National Standard “ Regulations for Real Estate Appraisal” of P.R. China4.“Property Law of P. R. China”5.“House Proprietorship Certificate”6.The relevant documents supplied by the entrusting partyrmation of the on-site inspection of the appraised objectby the appraisers8.Relevant documents concerning the real estate market mastered andcollected by the appraising party.Appraisal Principles:1. Principle of legalityThe real estate appraisal shall be conducted on the basis of thelegal proprietorship of the real estate, which contains the legalobtainment, legal use, legal transaction or disposition, etc.2. Principle of Maximal and Optimal UseThe appraisal of the real estate shall be based on the maximal and optimal use.The maximal and optimal use means enabling the appraised objectto generate the maximal value legally allowed,technically possible, economically feasible and after reasonable argument.3. Principle of ReplacementThe appraisal result shall not deviate from the normal price ofsimilar property under similar conditions obviously.Similar property refers to real estate in comparable search area and equalor similar to the appraised object concerning the function, scope,grade and building parable search area means the regional range where the real estate may replace the appraised object or affect the price of the appraised object.4. Principle of Appraisal TimeThis principle emphasizes that the appraisal result is time dependent and time effective.As the real estate market is ever-changing, the same real estate always has different prices atdifferent appraisal time. The appraisal result is the objective andreasonable price or value of the appraised object at the appraisaltime.5. Principle of Objectiveness and FairnessThe appraisal is based on sufficient investigation,comprehension and analysis of the actual conditions of the appraised object, strictly obeys the relevant laws and decrees of the state, ShanxiProvince and Taiyuan Municipality,considers the interests of correlative parties fully,follows scientific appraisal procedures, adopts reasonable and suitable appraisal methods and through careful and accurate calculation.6. Principle of PrudenceWe shall not overestimate benefits and costs, and shall not choose cases with higher deal price; we shall not underestimate cost rateand choose lower relative parameters either. Prudence is necessarybefore making professional judgment under uncertain situations.Anyway,in the process of the appraisal,we shall obey the relevant national and local laws and decrees, adheres to such principles as objectiveness,fairness,science and legitimacy so as to ensure rational appraisal procedure,scientific appraisal method, accurate.appraisal result and the secret of the appraisal.Appraisal Method:According to the appraisal purpose, the development degree ofTaiyuan Real Estate market and the appraisal maneuverability,on the basis of analyze the relevant data and investigate appraised objecton-site. In view of the real estate of the same kind has a highfrequency of leasing, as a result of this, the appraisers calculatethe price of the appraised object by market comparison method. Consequently,according to the characteristics of the appraised object and the actual situation,as well as comply with the doctrine of real estate appraisal method, the method has been adopted todetermine the market value of the appraised object.The method is to anticipate the normal net profit of the appraised object in the future and choose suitable capitalization rate todiscount such profit to the appraisal time for accumulation,in order to estimate the objective and reasonable price or value of the appraised object .Appraisal ResultThe appraisers have assessed the value of the above-mentioned real estate on the basis of independence, impersonality,equity, legitimacy and cautiousness, adhering to on-spot inspection of thereal estate as well as comprehensive collection of related marketinformation and appraisal object information,in the light of general analysis the elements which will influence the market value of thereal estate,comply with state regulations on real estate appraisal, real estate appraisal rules and given appraisal purpose as well asby utilizing logical appraisal processes and methods. The appraisalresult of the appraised object on July 08,2010 is as follows(currency: RMB):Unit Price of the appraised object： RMB7623 Yuan/Square Meter Total Price of the appraised object: RMB1,080,200.00 YuanCapitalization(the capital form of Chinese numerals): RMB one million nine eighty thousand and two hundred Yuan)Appraisers :Duan ZhihongRegistered Public Real Estate Appraiser of P. R. China (Registration No.: 1420020030) Date of expiration：September 2010 (seal).Chai HongbinRegistered Public Real Estate Appraiser of P. R. China (Registration No.: 1420070031) Date of expiration：September 2010(seal)Appraisal Working Date:From July 08, 2010 to July 13, 2010Validity Term of the Appraisal ReportThe appraisal result shall be valid within one year from the finalization of the report.Application Range of the Appraisal ReportThe report supplies the basis for the reference price for the entrustingparty ’s knowledge of the market price of the real estate. It is ineffective for other economic activities.Taiyuan Wuyuetong Real Estate Appraisal CO., LTD（seal）Appraisal Technical ReportClause 1 General Situation of the Appraised Real Estate1.Individual Elements Analysis(1) Status of ProprietorshipFang Quan Zheng Bing Zi No.S0906546 “House Proprietary Certificate ”which has been provided by the entrusting partyshows: Owner: Sun Zhiyu Yang Fang ; Location:————————;Category of Property: Private; Building No.: 1; Room No.0302;Structure: Steel reinforced concrete; Total Building Floors: 7;Floor No. of the Appraised Object: 3; Building Area：141.70 square meters; Use of Design: Residence(2) Substance Entity Condition(3) The appraised object : the appraised object is located at———————— .The building have 7 floots and was built in 2004 .Building with steel reinforced concrete structure , the outside wall was tile fixing . The doors of Unites are intelligent security doors , the ground inside the building is waterstone ,iron railings and wooden arms , inside wall is emulsion paint, Theappraised object located at Room02 , Unit11 ,third floor of thebuilding . It is a residence .Decoration status of the appraised object:High-grade decoration , the floor of the room is covered by import granite, the wall is painted by latex, and the flooring angular line ismade of clad plate as well as the suspended ceiling is decorated by fluorescent lamp. Parlour is very artistic, the wall is black marble , integral ambry . The outer window of the room is decorated by top-grade insulating glass with aluminum alloy, stainlesssteel guard bar and marble windowsill.What’s more, the door of the room consists of security door and wooden door , and theflooring angular line is made of ceramic tile, the suspendedceiling is decorated by fluorescent lamp as well. marble washstand , sanitary fittings are complete ; there are water, electricity, central heating, gas, television, internet inthe house .2.Regional Effects Analysis(1) District General ConditionXiaodian District is located at the southeast part of Taiyuan,and is the north of the Jinzhong Basin . Qingxu Town is at its sourth , Nanneihuan District and Yingze District are at north , Yuci Cityis at east , Fen River is at west .The transportation of thisdistrict is well developed.The concentrated communication network radiates in all directions to let the residents enjoy convenienttransportation.The economic strength of Xiaodian District is abundant. It ownsmany existing business enterprises, including commerce, diet,service and transportation, etc. Since it was established, theDistrict Committee and Government vigorously implement the strategy of prosperity in virtue of business development by investing .(2) Location and Transportation ConditionMany bus routes have been distributed at surroundings,for instance, bus 39, 824, 838, 840, 849, 864, and 877. The location of the appraised object is in Level I-B commercial land range which enjoysgeographical advantage and convenient transportation.(3)Surroundings and Peripheral FacilitiesSituated at the area where is equipped with a complete set ofsupporting facilities and advanced business service facilities,hospital, bank, school, hotel, supermarket and bus station, etccan all be found easily.Numbers of commercial mansions,such as, Huachen Mansion,Shanmei International Mansion,Changfeng Shopping Mall , Orient Home , Wholesale Market of Tee , SangyouElectrical Equipment , Suning Electrical Equipment , QiannianChamber , Qinxian Hotel , Tianshuihua Hotel , Jinshengyuan Hoteland Furong Town Restaurant .In addition,many financial institutions, including China Citic Bank, China Merchants Bank,China Ever bright Bank,Huaxia Bank and Industrial and Commercial Bank are also scattered around here. The educational facilitiesand medical treatment facilities in this area are all in readiness, the former incorporates Yujie Kindergarten,Lele Art Kindergarten, Affiliated School of Taiyuan Normal College, Taiyuan No.38 Middle School ,Taiyuan No.38 Middle School and WenhuaMiddle School, the latter consists of Shanxi Meitan Central Hospital and KangmingOphthalmologic Hospital and Changcheng Dental Specialist . Thearea endures sheer pedestrian volume,and enjoys business prosperity as well as graceful environment.(4)Infrastructural Facilities ConditionThe area has connected to the seven mains outside the red line,which is as follows:①Connect to water supplying line: The water is supplied byTaiyuan Running-Water Company which is highly reliable.②Connect to sewer pipe: The area possesses underground drainagenetwork to separate rain from sewage.③Connect to electrical line: The electricity is supplied byTaiyuan Power Supply Bureau which is highly reliable.④Connect to communication cable: The communication cable hasbeen spread out in the area which is highly reliable.⑤Connect to gas line: The gas pipe network has beenconnected into this area which is highly reliable.⑥Connect to flue gas duct: The area enjoys centralheating supply which is highly reliable.⑦Access to roads: The appraised object adjacent to Fuxi Street in thesouth.3. Market Background AnalysisTaiyuan municipality is the capital of Shanxi province which serves as the political, cultural, educational, scientific andtechnological, communication and information centers in Shanxiprovince.It is one of the twenty-two megalopolis in China. Taiyuan is situated at the combing site of the eastern,central and western economic belts which connects the west with the east, the northwith the south of China and plays a two-way supporting role under the strategy of opening the country to the outside world and ineconomic development layout.According to the general requirement of‘ Moving southward,marching into the east ’ , ‘ Northward enlargement,eastward expansion ’,‘prompt quality’and ‘reinvent image’ as well as the construction guidance‘ Rebuild old city, construct new town,exploit ancient city’ and take action simultaneously.Taiyuan erected the image of ‘Brand-new Taiyuan ’, all-sided speeded up the steps towards the construction of the city and enhanced the radiometric force, influence power and leadingpower as a city of provincial capital gradually.In recent years, remarkable results were achieved in term of transportation, communication,municipal administration and ecological environment.Due to a quintuple-level transportation network consisting of air routes,railways and highways have been completed, Taiyuan takes on a new look with each passing day. Agood socioeconomic foundation can be laid for the further development of the Real Estate Market in Taiyuan with the continuous improvement in supporting facilities and infrastructure.In recent years, Taiyuan office building real estate market hasexperienced a process from emergence to instant development. Atpresent,Taiyuan office building real estate market has presented the trend of stable development marked by increased volume oftransaction and slowly increased price. We hold the opinion thatTaiyuan office building real estate market will keep the trend of stable development continuously for quite a long time. In otherwords, the market prospect for the appraised object is optimistic.4.The Analysis of Maximal and Optimal UseReal estate estimate should be based on the best use of the appraised object, the analysis of maximal and optimal use reallyembodythe objectivity of estimate, whether measuring, judging theappraised object is at best use or not should be judged from the following aspects:①Law permitting, not limited by the condition of current use, butbased on law, the direction of the plan development, andestimated by the possible best use.②In technology, that is, estimate according to thetechnical requirement in house construction engineering.③In economy, estimated price should use the result of gettingthe best profits from limited put-in at all kinds of methods④Land and building, that is, judge its best condition or notbased on the combination of real estate internalcomposing factors.⑤ Coordination between real estate and environmentalsurroundings, that is, if real estate and environmental surroundingsare coordinated or balanced.⑥ Sustainability,that is, the appraisers should study not onlythe past and the current price, but also the current real estate market situation, the development trend and the effects ofvaried political and economic situation as well as policy shift in order to predict the future price trend and the changetendency of profit.According to these aspects mentioned above, the current use of the appraised real estate is at the best status.Clause II Analysis and Calculation of the Appraisal Price1.Choice of the Appraisal MethodAccording to the appraisal purpose, the development degree of Taiyuan Real Estate market and the appraisal maneuverability, onthe basis of analyze the relevant data and investigate appraisedobject on-site. In view of the real estate of the same kind hasa high frequency of leasing, as a result of this, the appraiserscalculate the price of the appraised object by market comparison method. Consequently, according to the characteristics of theappraised object and the actual situation,as well as comply with the doctrine of real estate appraisal method, the method has been adopted to determine the market value of the appraised object.The method is to anticipate the normal net profit of the appraised object in the future and choose suitable capitalization rate todiscount such profit to the appraisal time for accumulation, inorder to estimate the objective and reasonable price or valueof the appraised object.2.Process of the Appraisal Price CalculationFormula for the market comparison method:1.Calculation Formula :CaseEstimate dABC.Market Price of the Appraised Object=Price of ComparativeObject ×Transaction Rectification×Rectification of Trade Date×Rectification of Regional Factor ×Rectification of IndividualFactor2. Choose the Trade Case :A : WenhuayuanHousing District, which is located at ChangfengStreet , Building with Steel reinforced concrete structure ,7 floors and was built in 1998 . the house is in the third floor,110 square meter , common decoration , water , electricity ,gas , television , the transaction price in June 2010 isRMB7,000.00 Yuan .B : Xinyuan Housing District,which is located at North Streetof Wucheng , 6 floors and was built in 2000 . Building withreinforced concrete brick structure , the house is in thesecond floor , 101 square meter , high-grade decoration ,water ,electricity,gas ,television, the transaction pricein May 2010 is RMB6,500.00 Yuan .C : Shangjie Housing District , which is located at ChangzhiRoad , 7 floors and was built in 2004 . Building with Steelreinforced concrete structure , the house is in the fifthfloor,112square meter,common decoration, water,electricity,gas , television, the transaction price in June2010 is RMB7,100.00 Yuan .Sheet 1 ,Name Structure交 Trade Time Purpose Square Floors/Level Price(Yuan/M 2)MetersSteel—————reinforced08/07/2017/3Estimated ———Residenceconcrete0structureSteel06/2010WenhuayuanHousingreinforcedResidence1107/37000concreteDistrictstructurereinforced05/2010Xinyuan Housing concreteResidence1016/26500District brickstructureShangjieSteel06/2010reinforcedHousing Residence1127/57100concreteDistrictstructure.3. Choose The Comparative FactorsSheet 2Item Estimated A B C ProperytUnit Price (Yuan/ M2)Wait for700065007100 EstimatedTransaction SituationWait for Normal Normal Normal EstimatedTrade Date08/07/201006/201005/201006/2010Level of Aggregation Well Well Well WellTraffic Condition Convenient Convenient Convenient Convenient Bus Routes Many Many Many Many Level of Prosperity Prosperous Prosperous Prosperous Prosperous Landscape of Well Well Well Well EnvironHumanitymentalFactor Transport Facility Perfect Perfect Perfect Perfect Infrastructure Perfect Perfect Perfect Perfect Limitation Residence Residence Residence ResidenceofPragammingConvenient Level of Convenient Convenient Convenient Convenient TrafficFrontage Road Changzhi Road Cangfeng Road Wucheng Road Changzhi RoadSituation of Away from Away from Away from Away fromFrontage Street Street Street Street Neighbourhood Well Well Common WellDate of Complete2004199820002004 IndiviAwareness Yes Yes Yes Tes--dulaFactorLandscape of Well Well Common Well sHumanityArtificial Well Well Common WellEnvironmentFacility Perfect Perfect Perfect PerfectAera110101112Decoration High-grade Common High-grade Common Decoration Decoration Decoration Decoration。
