Asset evaluation report

A client

Company name: XXXXXXXX Company's legal representative: XXXXXXXX

Company's registered capital: RMB 5,612,000 yuan. Business license registration number: XXXXXXXX Type of enterprise: limited liability company Registered address: XXXXXXXX Zip code: 214244 Second corporate profile:

XXXXXXX is based on the "Chinese People's *** and the State Company Law" and other relevant laws and regulations, and by the Jiangsu Provincial People's Government, Su Zhengfu No. 160 approved on November 8, 1999 to initiate the establishment of limited liability company. The establishment of the joint stock limited company.

The company's scope of business: licensed items: biodiesel production, sales; general business items:

petroleum products, chemical products, daily-use chemicals production, sales production, self-management and chemical import and export business of all kinds of goods and technology.

The company now produces insulation oil, special lubricants, special oils and other fine chemical products more than 20 series, up to more than 200 varieties, is a collection of research and development, production, sales, service in one of the private science and technology enterprises. The company now covers an area of more than 200 acres, has the most advanced esterification, distillation, distillation, automatic blending, automatic canning, sulfonation, dewaxing and other sets of production equipment, inventory capacity of more than 50,000 tons. The company's leading product is insulating oil (low-viscosity transformer oil), production and sales volume of more than 65% of the total products.

Second, the compliance of the assessment report

1, XXXXXXXX and XXXXXXXX's economic behavior to carry out the overall restructuring into a joint-stock limited company were obtained by the Yixing City, "on the establishment of XXXXXXXX's instructions," Yizhengfa 147, "Wuxi Municipal People's Government on the establishment of the XXXXXXXX's Please indicate" Xizhengfa No. 157 and Jiangsu Provincial People's Government Su Zhengfu No. 160 of the approval of the confirmation;

2, XXXXXXXX in accordance with the People's Government of Jiangsu Province, Rural Collective Assets Management Office of the Su Nongjie No. 16 document on the issuance of the "Interim Measures for the Management of Rural Collective Asset Evaluation in Jiangsu Province," the notice of the provisions of the record registration for the asset evaluation project;

3, Jiangsu International Consulting and Appraisal Company is an intermediary organization approved by the relevant state departments and granted the qualification for appraisal in the non-securities industry, with a legal qualification certificate for asset appraisal, qualification certificate No. 11002, approval number: Agricultural and Rural Enterprises and Resources No. 96, No. 02, issuing authority: Leading Group of the Ministry of Agriculture for Management of the Appraisal of Collective Assets in Rural Areas and Townships; the persons signing the report: Yan Weixin, Pan Rongxiang, and Guo Xiuhui, which is in line with the base date of the report Provisions. It has the qualifications recognized by the state, and the report issued is compliant.

4. XXXXXXXX has issued a letter of commitment in accordance with the relevant provisions; and provided legal documents and certificates such as proof of property rights of assets in accordance with the relevant provisions.

Third, the validity of the valuation report

Jiangsu International Consulting & Appraisal Company, in accordance with the purpose of XXXXXXXX to carry out the enterprise shareholding system transformation, assessed the overall assets involved in the shareholding system transformation of XXXXXXXXXX, and signed the Asset Appraisal Entrustment Agreement with XXXXXXXX. The base date of the appraisal was determined as April 30, 1998 in accordance with the process of the shareholding reform of the enterprise, and an asset appraisal report No. 281 of Su Guo Zi was issued on June 10, 1998. The appraisal report has been filed and registered with the relevant authorities in accordance with the regulations, and the appraisal report is valid.

Fourth, the reasonableness of the appraisal method

Jiangsu International Consulting & Appraisal Company has selected the asset appraisal method matching the type of assets entrusted for appraisal. Since the signatory asset appraisers have left the company and the company has been canceled in 20xx, we were unable to access the working drafts of the company's asset appraisal.

After we have implemented the alternative procedures of reviewing the financial information of the company and conducting a retrospective appraisal of the original appraisal value of the physical assets that are still in existence at the original appraisal reference date, we are of the view that the asset appraisers have appropriately selected the appraisal methodology and matching appraisal price criteria in accordance with the purpose of the asset appraisal and that the appraisal methodology and matching appraisal price criteria are appropriate. We are of the opinion that the asset appraisers, in accordance with the purpose of the asset appraisal, have appropriately selected the appraisal methodology and matching appraisal price criteria, and that the selection of the appraisal methodology is in compliance with the relevant provisions of the appraisal reference date.

V. Appropriateness of the appraisal procedures

Jiangsu International Consulting & Appraisal Company has performed different appraisal procedures in the course of the asset appraisal process according to the types and characteristics of the commissioned assets. Upon our re-examination of the audit report and the Description of Asset Appraisal expressed in the appraisal report and the appraisal procedures revealed therein, we are of the opinion that the practicing asset appraisers have performed the necessary and appropriate appraisal procedures in the course of the asset appraisal process so as to ensure that the appraisal conclusions are objective and fair.

VI. Fairness of the valuation conclusions

The scope of the asset valuation of the XXXXXXXX enterprise shareholding reform appraisal project conducted by Jiangsu International Consulting and Appraisal Company was the overall assets of XXXXXXXX. After assessment, as of April 30, 1998, the book value of total assets included in the scope of assessment was RMB 40,290,816.92 yuan, and the adjusted book value was RMB 40,290,816.92 yuan, with an assessed value of RMB 44,727,164 yuan, and an impairment rate of 11.02%; the book value of total liabilities was RMB 36,347,518.35 yuan.

The adjusted book value is $36,347,518.35, and the appraised value is $35,556,571; the book value of net assets is $3,943,298.57, and the adjusted book value is $3,943,298.57, and the appraised value is $9,170,593, with an increase in value of $5,227,295, or an increase in value of 132.56%.

1. Determination of the appraisal reference date

Determination of the reference date of April 30, 1998, mainly based on the needs of the enterprise for the purpose of this appraisal, and at the same time, the mid-year data is accurate.

2. Basis of appraisal and selection of parameters

The basis of appraisal is more than sufficient, the selection of appraisal parameters is basically reasonable, and the appraisal of assets basically complies with the requirements of appraisal practice. However, there are the following problems:

(1) A small number of items in the inventory - auxiliary materials are not subdivided;

(2) Some of the current accounts are not reclassified for negative adjustments;

(3) Fixed assets - machinery and equipment in the lack of specifications for individual small items. However, it does not affect the overall appraisal conclusion. However, it does not affect the overall assessment conclusion.

3, the assessment of the conclusion of the analysis

1) current assets impaired 75.29 million yuan, the impairment rate of 2.25%, the reason for the impairment is mainly for the accounts receivable in the actual can not be recovered for the assessment of the impairment of the current payment.

2) fixed assets value-added 5.1893 million yuan, value-added rate of 82.86%, of which 1.573 million yuan, value-added rate of 74.83%, value-added mainly due to the replacement cost of housing is higher than the original value of the book due to the machine

equipment value-added 327.72 million yuan, value-added rate of 87.21%, value-added mainly due to the following: the main equipment for homemade oil depot, the construction of which is 87.21%, value-added.

In view of the above, we believe that the appraisal of the increase and decrease in value is reasonable, and the appraisal conclusion is fair as of the appraisal reference date.

VII. Explanation of post-period matters

After the valuation reference date, the enterprise operates normally and there are no significant post-period matters.

VIII. Review conclusion

After our review of the asset appraisal report on the overall assets of XXXXXXXX and the appraisal results (Su Guo Consulting No. 281) made by Jiangsu International Consulting & Appraisal Company, the appraisal report is in compliance and valid, the appraisal methodology is reasonable, the appraisal procedures are appropriate and the appraisal conclusion is fair. The report was reviewed.

Asset Appraisal Report

One of the most important things to do when reading an asset appraisal report

In fact, there is no need to be too serious about the numerical value of the results of the asset appraisal report, and the specific value of the report is not that important because the information between the producer and the reader of the report must be different. The information between the producer of the report and the reader must be asymmetric, as the reader of the report, no matter how you rack your brains to adjust the basic data and parameters may not be able to get the response to the "real" number.

However, it is necessary to read the report carefully, because you can only analyze the assumptions, logic, and valuation tendency of the report to have a clearer understanding of the appraisal value, the purpose of the parties to the transaction, and the interests of the parties to the transaction.

When opening an asset appraisal report, the key elements that the reader should understand include: the client, the purpose of the appraisal, the subject of the appraisal, the scope of the appraisal, the appraisal reference date, the type of value, the appraisal methodology, the conclusion of the appraisal, and the validity period.

In addition to the above, there is often a paragraph in the report that roughly states, "Users of the appraisal report should give full consideration to the assumptions, qualifications, and statements of particulars set forth in the appraisal report and their effect on the appraisal conclusion." Don't underestimate this last sentence, the secret that can't be told is often hidden here.

In order to understand the above key elements, we need to start from a larger perspective, which requires us to start from the understanding of what is "enterprise value assessment", because it is the act of enterprise value assessment that leads to the result of the asset valuation report.

What is enterprise value appraisal

Enterprise value appraisal refers to the behavior and process of analyzing, estimating, and expressing professional opinions on the overall value of an enterprise, the value of all the shareholders' equity, or the value of some of the shareholders' equity for a specific purpose on the appraisal reference date by a certified appraiser in accordance with the relevant laws, regulations, and asset valuation standards. Process. In other words, the object of enterprise value appraisal can have three categories, one is the overall value of the enterprise, the second is the value of all shareholders' interests, and the third is the value of some shareholders' interests.

In understanding the conclusion of the valuation, there are two places to pay attention to, one is that the value of partial shareholders' equity is not necessarily equal to the product of the value of the total shareholders' equity and the proportion of the equity ratio, which is mainly due to the control of the enterprise compared to the minority shareholders' equity there is a premium.

Secondly, attention should be paid to the impact of the liquidity of the assessed equity on its value. I believe that you are not unfamiliar with the term "liquidity premium", and if you compare the price performance of A shares and H shares of A+H listed companies with large/small market capitalization, I believe that you will have an intuitive understanding of what a liquidity premium is.

Three enterprise value assessment methods and cases

At present, China's appraisal institutions mainly use three methods to assess the value of an enterprise, namely: the income approach, the market approach and the cost approach (also known as the "asset-based approach"). Appraisal organizations will assess the applicability of these three methods according to the purpose of the appraisal, the object of appraisal, the type of value, the collection of information and other relevant conditions, and then choose to use one or more of the asset appraisal methods.

Income Approach

The income approach refers to an appraisal method that capitalizes or discounts expected earnings to determine the value of the appraised object. Specific methods commonly used in the income approach include the dividend discount method (i.e., the DividendDiscountModel, or DDM for short) and the discounted cash flow method (i.e., the ( DiscountedCashFlowMethod, referred to as DCF).

Among them, the discounted cash flow method can be divided into discounted corporate free cash flow model (i.e., FreeCashFlowfortheFirm, or FCFF) and discounted equity free cash flow model (i.e., FreeCashFlowtoEquity, or FCFE).

Here we need to do a good job of distinguishing between the value of the enterprise based on the discounted free cash flow model, and the value of all shareholders' equity based on the discounted free cash flow model, they belong to the value of the two different nature of their relationship can be done as follows: the value of all shareholders' equity = the overall value of the enterprise - interest-bearing debt

DDM and DCF model is not difficult to understand, the difficulty lies in judging the model parameters and the reasonableness of its assumptions, these are the most important details that you should pay attention to when reading the report, these contents are summarized in five aspects, respectively:

(1) whether the future expected earnings are reasonable

The object of discounting is the future expected earnings, so whether this earnings are reasonable is crucial to the valuation results. In thinking about this issue, that we should first know who is the subject of the forecast. According to the current regulations, the registered asset appraiser should make the necessary analysis, judgment and adjustments to the projections of the future earnings of the enterprise provided by the client or the relevant parties.

The appraisal assumptions are reasonably determined based on the consideration of various future possibilities and their impacts to form a forecast of future earnings. According to the above provisions, the principal or the relevant parties are the main parties providing the forecasts of the future earnings of the enterprise, and their attitudes and interests are reflected in the forecasts provided by them.

There are many factors that affect expected earnings, and to be honest, it's really hard to reason how much of the expected future earnings are reasonable when there are so many variables. So is it okay to not think seriously about this question? I think it's important to think about it seriously, although under the current norms there is a system of compensation for profit forecasts that can be used as a layer of protection for investors.

But the China Securities Regulatory Commission issued on July 11, "listed companies major asset reorganization management approach (draft)" has no longer require listed companies to provide profit forecasting report, and canceled to the non-affiliated third party to issue shares to buy assets profit compensation requirements, taking into account the future is likely to lose the profitability of compensation for this protection.

(2) Determination of the earning period

When analyzing the earning period, the asset appraisal report should determine the earning period in conjunction with the current status and development prospects of the industry in which the enterprise is located, the relevant agreements and charter agreements, the enterprise's operating conditions, the characteristics of the assets, and the conditions of the resources. Here I would like to share with you an interesting case, there is a valuation report which reads: "The duration of the cash flow depends on the life of the asset, the life of the enterprise is uncertain, it can be assumed that the enterprise will continue to operate indefinitely, i.e., the income period is the unlimited operating period under the assumption of going concern ... ...

(3) Determination of the forecast period

There are some valuation reports that will use the segmentation method to determine the forecast period of the appraisal object, which divides the future cash flows of the enterprise into the cash flows during the explicit forecast period (the detailed forecast period) and the cash flows after the explicit forecast period (the perpetual period). During the detailed forecast period, the valuation report will explicitly forecast the net cash flows generated by the subject of valuation for a future period (e.g. 5 years) on a year-by-year basis.

(4) Discount rate

At this point, it is felt that a test can be done with a value of the discount rate within the range of the interval that you think is appropriate, so that the upper and lower limits of the test results are naturally clear.

Asset Appraisal Report 3

Asset Appraisal Report