VALUATION OF MACHINERY VISIT ON 20.02.2015 GOVT. REGD. VALUERS LT.COL.(Retd.) JAYANT DANKE MUKUND V. PURANIK BANK OFFICIALS – 2 REPRESENTATIVES PLANT & MACHINERY IS HYPOTHICATED TO BANK. COMPANY OFFICIALS – 2 REPRESENTATIVES FROM MIDDLE MANAGEMENT TO ADDRESS SOME QUERIES THE PLANT IS CLOSED OVER 2 YEARS & ELECTRICITY IS BEING CUT OFF.
Company Background. This company was closed because of cancellation of license for excavation of Bauxite ore for past couple of years. Since the plant was hypothecated to the Bank, objective was to arrive at fair market value of the security for the information of the bank. Client is interested for alternative buyer to run the plant.
Basis of Valuation Valuation is done with the consideration of as is where is basis. Feedback of company representatives was somewhat useful for various assessments. Valuation is based on physical inspection of Plant & Machinery at site and also various invoices received from clients. Consideration with present condition, current replacement value, discounted for value of life used. Valuation is based on engg. Norms and valuer’s assessment.
Important considerations & Clauses. Valuation is carried out at the request of the client. Any liability out of this report is limited to 50% of the professional fees received by us. Any appearance before court of law/statutory authority/committee/Govt. officials etc. is chargeable for actual expenses incurred and professional time spent. Valuation is our opinion based on documents provided, site visit, general inspection. Hence NO 3rd party interest, pecuniary losses, liquidity damage will be considered for liability if applied for any purpose. Accuracy of the report is limited to the extent of information supplied by client. All the documents given by client are returned in the same condition and NO liability whatsoever is applicable in this regard.
Limitations faced during valuation Since the plant was closed for more than 2 years, electricity was cut off and no electrical gadgets could be inspected in live conditions. The condition of electrical motors, transformers etc. were based on external observation and name plates and overall condition. The company staff who were present during inspection, were not technical experts and could not answer some of the queries leaving to value's self judgement. No documents were available from client on what basis the project was sanctioned and given huge loan under hypothecation. This would have helped us to know any disparity between considerations on which the loan is sanctioned and actual situation as well as whether the equipment's listed during sanction were over invoiced for more loan or substituted by local or alternative make of cheap quality or any big item/equipment missing from the list or also any addition not covered under sanction. Company’s additional financial liabilities other than bank hypothecation like lien, court order, 2nd mortgage, attachment, IT order, litigations etc. are not known.
Listing of Data NO
Description
Invoice #
Years
Qty.
Acqn. cost
Excise
Total
Above list is based on invoices forwarded by the bank as per their available data.
Calculations Item
Total
A.V/W.Fdn
IEC
Life
Age
IR
RV
Dep.
Total – As per invoice after clubbing. A.V/W Fdn – Acquisition Value Including Foundation Cost. (Total + Foundation) I.E.C. – Installation, necessary fabrication, erection and commissioning expenses etc. I.R. – Incremental Ratio. (From RBI wholesale price index) R.V. – Reinstatement Value. (A.V/W.Fdn + IEC) X IR = RV DEP – Depreciation charged. REP – Repair charges. C.M.V. – Computed Market value. [R.V. – (DEP + REP)] = CMV.
REP
C.M.V
Summary of Valuation Report 1
Name of the client
ICICI Bank
Address of machinery location
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Intended user
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Purpose of valuation
Value of movable property to determine fair market value, realizable value & distress value
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Date of inspection
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Date of valuation
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Persons present during valuation
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VALUATION CERTIFICATE It is certified that present valuation of immovable asset mentioned above is arrived as below. Asset
