VALUATION REPORT

ON THE

STUDENT’S INDUSTRIAL WORK EXPERIENCE SCHEME

UNDERTAKEN AT

CAPPA AND D’ALBERTO LIMITED

BUILDING AND CIVIL CONTRACTORS

72 CAMPBELL STREET, LAGOS

PREPARED BY

LAWSON OLUWAFEMI JULIUS

EEG/2017/121

Submitted to the Coordinator, Engineering Valuation,

Department of Electronic and Electrical

Engineering, Obafemi Awolowo University,

Ile-Ife

IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR EEE 400 (SIWES II)

March, 20
 Department of Electronic and Electrical Engineering,
Faculty of Technology,
Obafemi Awolowo University,
Ile-Ife,
Osun state.
March, 2020.

The SIWES Co-ordinator,

Department of Electronic and Electrical Engineering,

Obafemi Awolowo University,
Ile-Ife,
Osun state.

Dear Sir,

LETTER OF TRANSMITTAL
In partial fulfilment of the requirements for the award of B.Sc. (Hons) in Electronic and

Electrical Engineering, I hereby submit for grading, the valuation report of the Student Industrial

Work Experience Scheme- EEE 400 undertaken at Julius Berger Nigeria Plc.

Thanks in anticipation of the appraisal of this report.

Yours faithfully,

____________________

LAWSON OLUWAFEMI JULIUS

EEG/2017/121
ii
 ACKNOWLEDGEMENT
I would like to express my immense gratitude to God for keeping me in good health of mind and

body throughout the six months of my SIWES program.

I also want to express my gratitude to those who contributed to the success of this report. Firstly,

to my parents and siblings for their support, both financially and otherwise. I also want to thank

my supervisors Mr. Fashuwape and Engr. Adeyemi for their mentorship and support.

And finally, I want to appreciate the entire facility management team of Cappa and D’alberto

limited for the support and encouragement.

iii
 TABLE OF CONTENTS
Title Page...................................................................................................................i
Letter of Transmittal................................................................................................ii
Acknowledgement.....................................................................................................iii
Table of Contents.....................................................................................................iv
List of Figures...........................................................................................................vi
List of Tables...........................................................................................................vii
CHAPTER ONE….................................................................................................1
INTRODUCTION..................................................................................................1
1.1 Introduction to the Company..................................................................1

1.1.1 Company profile...............................................................................1

1.1.2 Cappa and D’alberto organizational structure............................3

1.2 The Nature of the Company’s Business.................................................3

1.3 The Engineering Equipment Asset Management Approach in the

Company....................................................................................................6

1.4 Objectives of this Study............................................................................8

CHAPTER TWO...................................................................................................9
LITERATURE REVIEW.....................................................................................9
2.1 Introduction to Engineering Valuation....................................................9
2.2 Depreciation................................................................................................9
2.2.1. Why do we consider depreciation?..................................................10
2.3 Methods of Engineering Valuation..........................................................11
2.3.1. Open Market Valuation or Disposal Method.................................11
2.3.2. Replacement Cost Method................................................................11
2.3.3. Depreciated Replacement Cost Method...........................................12
2.4 Method of Valuation specific to the engineering equipment assets of the
company under study ................................................................................13
iv
 2.5 The current market supply and demand of the equipment under study
from Internet sources................................................................................13

CHAPTER THREE..............................................................................................15
METHODOLOGY...............................................................................................15
3.1. Identification of Assets to be evaluated....................................................15
3.2. The Procurement History and Costs........................................................16
3.3 Valuation Analysis......................................................................................19
CHAPTER FOUR.................................................................................................21
4.1 Results..........................................................................................................21
4.2 Discussion of Results...................................................................................24
CHAPTER FIVE...................................................................................................25
CONCLUSION AND RECOMMENDATION....................................................25
REFERENCES........................................................................................................26

v
 LIST OF FIGURES

Fig.1.1. Cappa and D’alberto Limited Structure ................................................................4

vi
 LIST OF TABLES
Table 2.1. Equipment Manufacturer with Their Rates of Purchase in Nigeria................14

Table 3.1. The Procurement History and Cost.....................................................................17

Table 4.1. The Valuation of Asset of Cappa and D’alberto Limited..................................22

vii
 CHAPTER ONE

INTRODUCTION

1.1 Introduction to the Company

1.1.1 Company profile: Cappa and D’alberto Limited

Cappa & D’alberto is a leading and building and civil engineering contracting firm in Nigeria.

Established in 1932, it is nearing a century of unparalleled expertise, making it the oldest and one

of the most prominent companies in the Nigerian construction industry today. Thanks to a team of

qualified professionals, coupled with state-of-the-art equipment and technologies, the company has

built a solid reputation based on its history, professionalism and commitment to service excellence.

Throughout the years, Cappa and D’alberto has diversified the organisation’s activities by

providing also Facility Management services as well as highly specialised expertise in the fields of

aluminium windows and curtain walling, all of which have been operating for over 25 years.

Nearly 90 years since its inception, Cappa and D’alberto has worked on different types of

commercial, residential, retail and mixed-used developments as well as places of worship and

more, and we are proud to have built some of Nigeria’s most influential and iconic buildings.

The company's pre-independence projects in Lagos included Holy Cross Cathedral and Humoani

Mosque which were built in the 1930s and later Kingsway Stores, Maternity Hospital, Lagos

Island, Bristol Hotel and Western House.  In Ibadan, it built Cocoa House. In the 1950s, the firm

delved into the property development sector with the establishment of Igbobi Development

Company.

In the post-independence period, the firm built supporting housing facilities for construction

workers at Kainji dam, NEPA office, Marina, Tafawa Balewa Square and was involved in the

8
construction of the National Stadium at Surulere. The company also built factories including

Dunlop in Ikeja and Arewa Textile, Kaduna. The firm's work at Kainji also included New Bussa

township and resettlement of residents affected by the dam. By the 1970s, the company was self-

supporting with its own equipment, cranes and vehicles. The firm is one of the leading

construction companies in Lagos Island, with works that include: Civic Center Towers, Mobil

House, Zenon House, Union Marble building and Wings complex, Victoria Island.

1.1.2 Julius berger Nigeria Plc organisational structure

Cappa and D’alberto Board of Directors reflects professionals from various industry, providing a

diversity of experience and expertise. Comprised of eight (8) members, five (5) Non-Executive

Directors, and four (3) Executive Directors. Figure 1.1 shows the organization structure.

1.2 The Nature of the Company’s Business

Cappa and D’alberto delivers high value and high-performance solutions for building,

infrastructure and industry projects with services covering all project phases, from planning and

procurement, to design, engineering and construction through to maintenance and operation. The

company has successfully constructed some of the country’s most significant infrastructure,

industrial facilities and buildings, combining tried-and-true engineering principles with the latest

methodologies and building innovations. The core competencies and businesses is given below:

a. Building Construction: The company design, engineer, construct and maintain

buildings of various scopes and functions, from single homes to high-rise

buildings, residential complexes, sport facilities, hotels, hospitals, transportation

terminals and manufacturing facilities.

9
 BOARD OF
DIRECTORS

EXECUTIVE
MANAGING
DIRECTOR
DIRECTOR
FINANCE

EXECUTIVE
PAYROLL
DIRECTOR
MANAGER
PROJECTS

MANAGER
GENERAL SENIOR PROCUREMEN PAYROLL
HUMAN IT SPECIALIST
MANAGER ACCOUNT T OFFICER CLERK
RESOURCES

LOGISTICS MANAGER
MANAGER QS FACILITY
MANAGER YARD PROJECTS ADMIN
MANAGER HSE DEPARTMENT MAINTENANC ACCOUNT
ENGINEERING PROCUREMEN MANAGERS JUNIOR STAFF
& TENDERS E
T MANAGERS

SUPERVISORS
CHIEF
SAFETY SECTION SITE FACILITY ACCOUNTSCLE
SITE ENGINEER QUANTITY
SUPERVISOR MANAGERS SUPERVISORS MAINTENANC RK
SURVEYOR
E

FOREMAN
JUNIOR SENIOR
JUNIOR SITE SECTION FACILITY
SAFETY FOREMEN QAUNTITY
ENGINEER SUPERVISORS MAINTENANC
OFFICER SURVEYOR
E

ARTISAN
SECTION QUANTITY FACILITY
HEADMEN
FOREMEN SURVEYOR MAINTENANA
CE

SECTION COSTING UNSKILLED

ARTISANS
ARTICANS OFFICER WORKERS

JUNIOR
UNSKILLED UNSKILLED
QUANTITY
WORKERS WORKERS
SURVEYOR

Fig. 1.1. Cappa and D’alberto Limited Organization Structure.

10
b. Industrial Construction: Julius Berger has successfully contributed to enabling the

growth of industries through the provision of comprehensive civil works including design,

engineering and procurement, site preparation works, steel works as well as mechanical

and electrical works for the construction of plants, factories, auxiliary buildings, oil and

gas installation and power stations. The company offer clients decisive advantages based

on its vast Nigeria-specific knowhow and technical expertise, as well as its fundamental

health, safety and environmental management systems, which meet international industry

standards and guidelines.

c. Infrastructure Development: Julius Berger has a long history of delivery lasting

solutions for infrastructure projects in Nigeria. Starting with a single bridge in Lagos,

today, countless bridges and road systems across the country illustrate the company

dedication to delivering durable high-value solutions for the greater infrastructure

development of Nigeria. The company continue to play a role in the development of

Federal Capital Territory Abuja, while contributing to the rehabilitation, expansion and

new construction of essential infrastructure through the country. To support the provision

of sustainable solutions, the company pioneer new methodologies and the use of efficient

technologies, most recently including the introduction of cold-recycling methodology for

road reconstruction.

d. Facility Services: Julius Berger offers quality operation and maintenance services to

provide clients preventive and proactive facility services from a single source.

11
This multiservice operational structure simplifies the often complex process of asset maintenance.

The company have the capacity to handle operation of building and office infrastructure, act on

behalf of industry clients, provide warehouse and supply chain management and refurbish

facilities as required- to preserve the sustained availability and high value of assets

Furthermore, maintenance of equipment, optimization of utilities and related technical solutions

improve resource management and reduce operating costs.

1.3 The Engineering Equipment Asset Management Approach in the Company

Asset Management is used to identify how an industrial organization deals with the management

of its physical assets through their life cycle to achieve its strategy. It could be defined as the

system that plans and controls the asset-related activities and their relationships to ensure the asset

performance that meets the intended competitive strategy of the organization. (El-Akruti and

Dwight 2013).

In Cappa and D’alberto, the engineering equipment asset management approach used is the

total productive maintenance (TPM) which is a system of maintaining and improving the integrity

of production and quality systems through the machines, equipment, processes and employees

that add business value to an organization. TPM focuses on keeping all equipment in top working

condition to avoid breakdowns and delays in manufacturing processes. (Gubata 2014).

One of the main objectives of TPM is to increase the productivity of plant and equipment with a

modest investment in maintenance.

12
This should result in accomplishing the goal of TPM: “Enhance the volume of the production,

employee morale and job satisfaction.”

The main objective of TPM is to increase the overall equipment effectiveness (OEE) of plant

equipment. TPM addresses the causes for accelerated deterioration while creating the correct

environment between operators and equipment to create ownership. OEE has three factors which

are multiplied to give one measure called OEE

Performance x Availability x Quality = OEE

Each factor has two associated losses making six in total, these 6 losses are as follows:

Performance = (1) Running at reduced speed – (2) Minor stops

Availability = (3) Breakdowns – (4) Product changeover

Quality = (5) Start-up rejects – (6) Running rejects

The objective finally is to identify then prioritize and eliminate the causes of the losses. This is

done by self-managing teams that solve problem. Employing consultants to create this culture is

common practice.

The eight pillars of TPM are mostly focused on proactive and preventive techniques for

improving equipment reliability:

1. Focused improvement

2. Autonomous maintenance

3. Planned maintenance

4. Quality maintenance

5. Cost deployment
13
 6. Early equipment management

7. Training and education

8. Safety health environment

With the help of these pillars, productivity is increased. (Nicholas 1998)

1.4 Objectives of this Study

a. To determine the current market value of assets of Julius Berger Nigeria Plc, in the

department of Electrical Engineering where I was attached.

b. To provide useful record that can help in decision making for future company

requirement and familiarize the student with the art of engineering valuation.

14
 CHAPTER TWO

LITERATURE REVIEW

2.1 Introduction to Engineering Valuation

From the definition of valuation as the professional estimation of a thing’s worth, engineering

valuation can be summarily described as the worth placed on a project or activity (proposed,

existing, or decommissioned) by the engineer to allow for full implementation within the limits of

all relevant factors, among which is the environment. The estimation of the monetary measure of

the desirability of ownership of commodities and small properties is accomplished daily in the

commercial word, often in the informal and intuitive manner. However, the complex society of the

present demands systematic and theoretically correct procedures when consideration is given to

the appraisal of enterprises and properties not regularly acquired on the market. Today, man`s

industrial and business property is so extensive that its value can be established only by careful

study of each factor that gives that property value. Engineering, economics, finance, and business

management are each involved in the process of estimating the value of enterprises and industrial

properties. The value of property is a highly complicated quality and that, in the end, value is a

judgement quantity.

2.2 Depreciation

Depreciation is the decrease in value of physical properties with the passage of time and use.

Annual depreciation deductions are intended to “match” the yearly fraction of value used by an

15
asset in the production of income over the asset’s actual economic value. Baum (1991)

defines depreciation as a loss in the existing value of property and attributes the causes to

physical deterioration, functional obsolescence or aesthetic obsolescence. Mansfield (2000)

also notes that property-based depreciation is the result of two negatives processes; physical

deterioration and obsolescence. Barreca (1999) classifies depreciation into three classes viz.

i. Physical depreciation

ii. Functional depreciation

iii. Economic losses.

The actual amount of depreciation can never be established until the asset is retired from service.

For a property to be depreciable, it has to meet the following basic requirements:

i. It must NOT be an investment.

ii. It must have a determinable useful life and the life must be longer than one year.

iii. It must be used in business or held to produce income.

iv. It must be something that wears out, decays, gets used up, becomes obsolete or loses

value from natural causes.

2.2.1. Why do we consider depreciation?

The value of a property decreases with time so it is advisable to consider the effect that this

depreciation has on engineering projects. With the knowledge of the depreciation of a company,

we can determine the worth of the asset or property in the company.

a. To provide for the recovery of capital that has been invested in physical property.

16
 b. To enable the cost of depreciation to be charged to the cost of producing products or

services that result from the use of the property. Depreciation cost is deductible in

computing profits on which income taxes are paid.

c. To determine the worth of the asset or property.

2.3 Methods of Engineering Valuation

2.3.1 Open Market Valuation or Disposal Method

The change of hands in the disposal of a facility may happen in two ways:

a. The change of hands may not involve change of position or location and the plant remains

in-situ. Here, the plant is handed over to the new operator, whose competence would

affect the useful life of the plant. If may be four years later you are called in to determine

the value the plant, and you found that due to poor handling by the new operator the PW

of the equipment is less than expected, the new owner /operator will not claim

incompetence.

b. The sale may require a relocation of the plant to another town or country.

Engineering professional etiquette demands that you should not disclose that the loss in value is

due to poor handling.

2.3.2 Replacement Cost Method

The valuation for insurance purpose involves the establishment of the current cost of replacing the

asset as new. This total sum is the current Replacement cost of that asset. It is necessary to know

the current exchange rate and government tariff for the imported machinery. If the asset is

imported the replacement cost is estimated from the sum of:

17
 i. The current Ex-Works Price

ii. The freight cost to the nation

iii. Cost of transit insurance

iv. Freight charges

v. Port charges (including demurrage if not cleared quickly)

vi. Custom charges

vii. Clearing agent charges

viii. Inland transit insurance charges

ix. Port –to-factory site transport cost

x. Installation charges at factory site.

2.3.2 Depreciated Replacement Cost Method

This involves a 2-stage operation of first estimating the equipment as new and then depreciating

the value obtained to make allowance for wear and tear, age and obsolescence. The rate of

depreciation is determined from the unexpired economic life of the plant and the gross current

replacement cost. The value obtained is known as the Existing Use Value (EUV). EUVs are

economic values, which must reflect the economical production or service capacity of the

machine rather than the cost of replacing the physical entity as in the case of valuation for

insurance. In situations where equipment or a factory is working at less than optimum capacity

one needs to use experience and wisdom in deciding what the depreciation value would be. So the

economic working life is different from the physical working life.

18
2.4 Method of Valuation specific to the engineering Company

The method of valuation specific to the engineering equipment assets of Cappa and D’alberto A

prospective sale is the most common purpose for requesting a valuation. Valuation for sale involves a

prediction of the likely exchange price in the open market at a future date after the property has been

fully marketed. The purpose is to assist a prospective buyer in setting an offering or to assist a

prospective seller in establishing an acceptable asking price.

19
Table 2.1. Equipment Manufacturer with their rates of purchase in Nigeria

EQUIPMENT MAJOR RATE OF PURCHASE IN

MANUFACTURER NIGERIA

Network Switch Japan Very high (75%)

Wireless Radio USA Very high (68%)

Desktop Computer USA Very high (85%)

Laptop Computer USA Intermediate (80%)

Trolley China Very high (80%)

Blower China High (73%)

IP Phone China Very high (60%)

Drilling Machine Germany Very high (60%)

20
 CHAPTER THREE

METHODOLOGY

3.1. Identification of Assets to be evaluated

Cappa and D’alberto which has its Headquarters at 72 Campbell street Lagos, with its facility

management team where I was attached at 72 Campbell Street Lagos will be evaluated with

performance of appraisal on individual pieces of equipment, machinery, furniture etc. The assets

include the following;

i. Forty Desktop Computers

ii. Thirty Printers

iii. Five Plotter Printers

iv. Seven Multi-function Printers

v. Two Screen Projectors

vi. Four Distribution Fuse Board

vii. Two Switch Over Box

viii. Ten IP Telephones

ix. Thirty Network Switches

x. Twenty Wireless Routers

xi. Thirty Network Cables

xii. Thirty-One Uninterrupted Power Supply

xiii. Thirty-two Wall Sockets

xiv. Twenty-eight Extension Boxes

21
 xv. Twenty-Two fire Extinguishers

xvi. Forty Air Conditioning

xvii.Six Televisions

xviii. Three Decoders

xix. One Cable Scanners

xx. Three Mega Meters

xxi. Five Vacuum Cleaners

xxii.Eleven Drilling Machines

xxiii. Fifteen Grinding Machines

xxiv. Eight Cutting Machines

xxv. Twenty-five Industrial Extension Socket Outlets

xxvi. Fifty-one Ladders

xxvii. Forty-four Diggers

xxviii. Thirty-five Shovel

3.2. The Procurement History and Costs

The procurement history and cost of the assets in Cappa and D’alberto Limited are summarized in

the table below

22
Table.3.1.The Procurement History and Cost
S/N Asset Manufacturer Year of Quantity Initial Cost
Description Purchase (#)
1 Desktop Hp 2015 10 100,000
Computer
2 Printers Hp 2015 6 70,000
3 Plotter Printer Hp 2016 2 288,000
4 Multifunction Hp 2016 7 2,500,000
Printer
5 Screen Hp 2017 2 45,000
Projector
6 Distribution ABB 2015 1 200,000
Fuse Board
7 Switch Over ABB 2015 2 160,000
Box
8 IP Telephones Cisco 2015 4 50,000
9 Network Cisco 2015 15 35,000
Switches
10 Wireless Cisco 2017 6 220,000
Routers
11 Network MEMs 2015 26 1,500
Cables (3 yards
each)
12 Uninterrupted APC 2015 4 150,000
Power Supply
13 Wall Socket APC 2015 32 1,200
14 Extension Box APC 2016 28 1,000
15 Fire 2015 6 120,000
Extinguisher
16 Air Samsung 2015 10 70,000
Conditioning
17 Television LG 2015 6 120,000
18 Decoder DSTV 2016 3 25,000
19 Cable Scanner Wire Xpert 2018 2 250,000
20 Megger Meter Metriso 2016 3 55,000
21 Vacuum Bosh 2016 5 70,000
Cleaner
22 Drilling Bosh 2016 11 50,000
Machine

23
Table. 3.1. The Procurement History and Cost Cont’d
S/N Asset Manufacturer Year of Quantity Initial Cost
Description Purchase (#)
23 Grinding Bosh 2016 15 65,000
Machine

23 Cutting Bosh 2016 8 45,000

Machine
24 Industrial Bosh 2016 25 25,000
Extension
Socket
25 Ladders Unielektro 2016 51 15,000

26 Diggers Unielektro 2016 44 8,000

27 Shovels Unielektro 2016 35 5,500

24
3.3 Valuation Analysis

The value of the assets is calculated using the straight line depreciation method. Straight-

line depreciation is the simplest and most often used technique, in which the company

estimates the “salvage value” of the asset after the length of a time over which is

depreciated, and assumes the drop in the asset’s value is in equal, yearly increments over

that amount of time. The salvage value is an estimate of the value of the asset at the time

it will be sold or disposed of; it may be zero.

The depreciation expense is given by:

(B−S)
Dt =
n

For t years, the book value is then given by:

BVt = B - tDt

BVt = book value after t years

B = Original cost of the equipment

S = Salvage value

n = Useful life of the equipment

t = Years since Purchase

25
Dt = Depreciation expense

Computation of the depreciation for the Desktop Computer

Year of purchase = 2015

Useful life n = 15 years
Salvage value S = ₦ 4,500
Original cost B = ₦ 100,000
Years since Purchase t = 5
Depreciation expense per year will be:

(100,000−4,500)
Dt = 15
Dt = ₦6,366.67
This is equal to ₦6,366.67 /year depreciation

The book value after 5 years is then calculated as shown:

BVt = B - tDt
BV3 = 100,000 – 5 * (6,366.67)
` = ₦ 68,166.65

As shown, the fair value of the Desktop Computer is ₦68,166.65.

The computations as shown above were carried out for every other asset in the

department.

26
 CHAPTER FOUR

4.1 Results

Having critically examined the above mentioned procedure of compilation, the tables

below show the applications of the straight line depreciation method in the computation

of the Book value of the assets in the company since the year of purchase.

27
Table 4.1. The Valuation of Assets Cappa and D’alberto Limited
S/ Asset Year of Qt Initial t n Salva Depreciati tDt (#) Book Value
N Description Purcha y Cost (#) (yrs (yrs ge on Dt (#) Bvt (#)
se ) ) Value
(#)
1 Desktop 2015 10 100,000 5 15 4,500 6,366.67 31,833.35 68,166.65
Computer
2 Printers 2015 6 70,000 5 10 2,500 6,750 33,750 36,250
3 Plotter 2016 2 288,000 4 15 15,00 18,200 72,800 215,200
Printer 0
4 Multifuncti 2016 7 2,500,0 4 7 75,00 346,428. 1,385,714. 1,114,285.
on Printer 00 0 57 29 71
5 Screen 2017 2 45,000 3 7 3,000 6,000 18,000 27,000
Projector
6 Distributio 2015 1 200,000 5 15 8,000 12,800 64,000 136,000
n Fuse
Board
7 Switch 2015 2 160,000 5 8 15,00 18,125 90,625 69,375
Over Box 0
8 IP 2015 4 50,000 5 10 3,000 4,700 23,500 45,300
Telephones
9 Network 2015 15 35,000 5 10 2,500 3,250 16,250 18,750
Switches
10 Wireless 2017 6 220,000 3 5 25,00 39,000 117,000 103,000
Routers 0
11 Network 2015 26 1,500 5 8 150 168.75 843.75 656.25
Cables
12 Uninterrupt 2015 4 150,000 5 10 12,00 13,800 69,000 81,000
ed Power 0
Supply
13 Wall 2015 32 1,200 5 5 185 203 1015 185
Socket
14 Extension 2016 28 1,000 4 5 100 180 720 280
Box
15 Fire 2015 6 120,000 5 5 10,50 21,900 109,500 10,500
Extinguish 0
er

28
S/ Asset Year of Qt Initial t n Salvag Depreciatio tDt (#) Book
N Description Purchas y Cost (#) (yrs (yrs e Value n Dt (#) Value
e ) ) (#) Bvt (#)
16 Air 2015 10 70,000 5 10 12,000 5,800 29,00 41,000
Conditionin 0
g
17 Television 2015 6 120,00 5 10 14,500 10,550 52,75 67,250
0 0
18 Decoder 2016 3 25,000 4 8 2,000 2,875 11,50 13,500
0
19 Cable 2018 2 250,00 2 10 23,500 22,650 45,30 204,70
Scanner 0 0 0
20 Megger 2016 3 55,000 4 8 3,200 6,475 25,90 29,100
Meter 0
21 Vacuum 2016 5 70,000 4 8 3000 8,375 33,50 36,500
Cleaner 0
22 Drilling 2016 11 50,000 4 10 2,800 4,720 18,88 31,120
Machine 0
23 Grinding 2016 15 65,000 4 10 2,950 6,205 24,82 40,180
Machine 0
24 Industrial 2016 25 25,000 4 7 1200 3,400 13,60 11,400
Extension 0
Socket
25 Ladders 2016 51 15,000 4 5 850 2,830 11,32 3,680
0
26 Diggers 2016 44 8,000 4 5 500 1,500 6,000 2,000
27 Shovels 2016 35 5,500 4 5 350 1,030 4,120 1,380

29
4.2 Discussion of Results

From the above information, it can be inferred that the Fair value of the Cappa and D’alberto

Limited is about Two million, Four hundred and Seven thousand, Seven hundred and Fifty-Eight

naira Sixty-One kobo. From the result obtained, we can observe that Depreciation Replacement

Cost Method (DRCM) is an effective method of valuation for asset as it takes into consideration

the number of years the asset has depreciated as well as calculating the book value of the asset.

Depreciation Replacement Cost Method was used as a basis for this valuation. The depreciation

rate was first calculated using the straight line method, which was later, used to calculate the

existing use of value. The estimated useful life of the plant and its equipment has been

determined by the company valuator as 15 years. The Gross replacement cost and date of

purchase was acquired from the company’s financial department. The scrap value of each of the

asset is zero for the purpose of this valuation. Also owing to the open market value of the Cappa

and D’alberto Limited it can be inferred that the division has a viable financial status.

30
 CHAPTER FIVE

CONCLUSION AND RECOMMENDATION

It is therefore recommended that a better maintenance culture be cultivated to keep the equipment

and assets in the best possible condition at every time.

31
 REFERENCES

Baum, A. (1991) Barreca, S.L., (1999) ’Assessing Functional Obsolescence in a Rapidly

Changing Marketplace’, Barreca Consulting and Research Inc., Birmingham, US.

Baum, A. (1991) ’Property Investment, Depreciation and Obsolescence’, Routledge, London.

El-Akruti K. And Dwight R. (2013). ‘A framework for the engineering asset management

system’. Journal of Quality Management System. 19, 398-412.

Gubata J. (2014). ‘Just-in-time Manufacturing’. Research Starters Business.

Mansfield, J. (2000), ‘Much discussed, Much misunderstood: a critical evaluation of the term

obsolescence‘, the Cutting Edge 2000.

Nicholas J. (1998). Competitive manufacturing management. Europe: McGraw-Hill.

32