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Enterprise Value Revaluation Report - Simplified Version

- designed by Tehong

 

1. Overview

 

(I) For conducting Enterprise Value (EV) revaluation, an EV revaluation report need to be written and submitted to the entrusting party and the supervisory authority for approval of its content and format.

 

(II) Content and format of the report

1) Cover and table of contents

2) Executive summary

3) Main body

4) References

5) Report binding

 

2. Cover and Table of Contents

 

(I) Cover shall include:

1) Name of the revaluation item

2) Report number issued by the evaluation institution (marked by the year released and sequence number)

3) Full name of the evaluation institution

4) Submission date

5) Logo of Tehong

 

(II) Contents are printed on the second page including titles of each chapter and its corresponding code page.

 

(III) Report binding shall be split into three volumes –report, description and detailed statements, with contents printed in respective volume (total number of volumes marked)

 

3. Executive Summary

 

(I) Condensation of a report followed by the main body of a report

 

(II) Executive summary has the same legal effect as the main body of a report and is written in a unified form, signed and marked the date, submitted by the certified EV valuer and the authorized person of Tehong

 

(III) Result indicated in the executive summary shall remain the same in the report without any misleading content, followed by this sentence - the content above is extracted from the enterprise EV revaluation report, please read the whole report carefully if you want to have a comprehensive insight into this enterprise EV revaluation

 

4. Main body

 

(I) Main body shall be written in a unified form including the following content:

1) Opening part

2) Introduction

3) Overview of entrusting party and asset-owning party

4) Objectives

5) Scope and targets

6) Base date

7) Principles

8) Evidences

9) Measure method

10) Procedure

11) Result

12) Description of special item or event

13) Significant events after the base date

14) Legal effect of the report

15) Submission date

16) Ending part

 

(II) Opening part

1) Title shall be clear and simplified including the project name of the EV revaluation (e.g. XX Enterprise Value Revaluation Report)

2) Report sequence number shall comply with the formal written requirements

 

(III) Introduction shall indicate full name of the entrusting party, revaluation items and review of the study in a unified form

 

(IV) Overview of entrusting party and asset-owning party

1) To describe the detail situations of the entrusting party and the asset-owning party respectively (for the same entity acting as both parties, regarded as the latter one), and main points include:

a) Names of the parties, their registered addresses, primary business addresses, authorized persons and historical background overview

b) Enterprise assets, financial and operational situations, industry, regional attributes, status, and relevant industrial policy

2) To clarify the subordination relationship and economic relationship between the entrusting party and the asset-owning party and the reason for EV revaluation if neither of these relationships exists

3) When there is more than one enterprise possessing assets, introduction of each asset-owning party shall be included

 

(V) Objectives

1) To clarify the purpose for conducting the EV revaluation and its corresponding type of economic behavior

2) To briefly describe whether this economic behavior is approved or not, if it has been approved, approval documents including the name of documents, approval entity, approval number and date shall be provided

 

(VI) Revaluation scope and targets

1) To briefly describe the book value and type of assets involved in the EV revaluation process before it starts

2) If the assets involved in the EV revaluation are possessed by more than one entity, the respective possessing proportion and its corresponding asset type shall be clarified

3) To clarify whether the scope of assets remains the same throughout the whole process of revaluation or not and explain why if it is different

 

(VII) Base date

1) Written form of base date – base date of the EV revaluation is day/month/year.

2) To clarify reasons and conditions for setting the base date

3) To clarify how base date affects the result of the EV revaluation

4) To declare whether the measure of EV revaluation remains the same as the one used on base date and to explain why if it is not

5) Base date is established by Tehong based on the economic behavior type of the entrusting party and shall be as closed as possible to the finishing date of the revaluation

 

(VIII) Principles

1) To clarify various principles being complied with throughout the revaluation process

2) To clarify the generally accepted principle formulated by administrative authorities

3) To clarify the exceptional principle that is complied with

 

(IX) References of EV revaluation

1) References of EV revaluation can be generally categorized into behavior references, law references, property references and pricing references.

2) Behavior references shall include application of EV revaluation from the entrusting partydecision made by the board of directors from the stock enterprise and the revaluation project establishment approval

3) Law references shall include relevant articles and documents referred to in the EV revaluation

4) Property references should include property registered certificate, land usage right certificate and property ownership certificate  

5) Pricing references shall include information being used directly or indirectly, referring to financial and operational information provided by the enterprise, statistics and technical information published by relevant government authorities, and pricing and statistics information collected by Tehong

6) To declare the special references applied in the EV revaluation project

 

(X) Measure method of EV revaluation

1) To simply describe the measure method applied in the EV revaluation

2) To simply describe the reasons and references for choosing the measure method

3) To describe the reason and the process of selecting methods if more than one method is applied in the EV revaluation

4) To introduce the principle and scope in choosing an exceptional EV revaluation method

 

(XI) Procedure of EV Revaluation

1) To comprehensively reveal the whole revaluation process including agreement of being entrusted to conduct the revaluation project, liquidation, measurement and valuation, results collection and submission of the revaluation report

2) During the agreement process of being entrusted - to clearly reveal the objectives, targets and scope, base date and draft the process of the EV revaluation

3) During liquidation process– to reveal the process of guiding asset-owning party in liquidation and information collection, assets verification and information verification

4) During measurement and valuation process– to reveal the process of inspection and verification, selecting the measuring methods, collecting information from market research and calculation in details

5) During the results collection – to reveal the revaluation results and make analysis, describe the process of writing the report and content review

 

(XII) Conclusion of the EV Revaluation

1) Conclusion shall include the result consolidated statement, proportion of assets possessed by each asset-owning party and the EV revaluation conclusion published by Tehong

2) To comprehensively describe the book value of assets, liabilities and net assets, the adjusted book value and the difference represented in the revaluation results

3) To reveal the revaluation result in the statement provided in a unified form

4) To describe the revaluation result respectively for each asset-owning party

5) To separately list result that is not shown in the consolidated statement

6) To comprehensively reveal the actual situation and notify the entrusted party if we have suspicion considering the revaluation result

7) To adjust the value considering the different revaluation result caused by bad debts, write-off and so on. We shall notify the enterprise to undertake its asset verification in compliance with the required procedure for the asset without approval from the relevant government authority

8) To separately describe the revaluation result for rented asset and indicate whether it is shown in the result consolidated statement or not

 

(XIII) Description of Special Item and Event

1) Special item and event refers to an item or event regarded as a possible factor which may affect the revaluation result but cannot be measured by the valuer after the conclusion has been made

2) To notify the entrusting party the effect of a special item or event on the revaluation report

3) To explain other problems regarded as necessary by valuers

 

(XIV) Significant Event after the Base Date

1) To reveal significant event happened after the base date

2) To specifically notify the effect of the significant event on the revaluation result

3) To describe significant event happened from the base date to the submission date.

4) To describe an event happened after the base date which cannot be included in the revaluation

 

(XV) Legal effect of the EV revaluation report

1) To particularly describe the prerequisite and hypothetical condition

2) To clarify the legal effect of the revaluation report

3) To indicate the valid period of the revaluation result

4) To clarify the result is only for the entrusting party and the supervisory authority to use considering the EV revaluation and declare that the usage right belongs to the entrusting party and we shall not allow any third party to use the report without the permission given by the entrusting party

 

(XVI) Submission date of the EV revaluation report

1) To indicate the submission date

2) In principle, report shall be submitted in three months after the base date

 

(XVII) Ending part

1) Company name of the report provider and company stamp

2) Name and signature of authorized person

3) Signatures and stamps of at least two certified EV valuers

 

 Appendix shall include the following content:

1) Documents of economic behavior

2) Approval documents for the EV revaluation project establishment

3) Accounting statements of the revaluated enterprise for the last three years (including at least balance sheet and income statement)

4) Business license copies of the entrusting party and the asset-owning party

5) Approval document copies of the property right

6) Commitment letters from the entrusting party and the asset-owning party

7) Commitment letters from the valuers and Tehong

8) Qualification certificate copy of the valuation institute

9) Business license of Tehong

10) List of revaluation project participants and their qualification certificate copies

11) Contract of the EV revaluation

12) Other important contracts

13) Supplementary documents

 

 

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Email: tehong@tehong.com

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