Yunnan Copper Co.Ltd(000878) : explanation of the board of directors on the independence of the evaluation institution of this transaction, the rationality of evaluation assumptions, the correlation between evaluation methods and evaluation purposes, and the fairness of evaluation pricing

Yunnan Copper Co.Ltd(000878) explanation of the board of directors on the independence of the evaluation institution of the transaction, the rationality of the evaluation assumptions, the correlation between the evaluation method and the evaluation purpose, and the fairness of the evaluation pricing

Yunnan Copper Co.Ltd(000878) (hereinafter referred to as “the company”) intends to acquire 38.23% equity of Yunnan Diqing Nonferrous Metals Co., Ltd. (hereinafter referred to as “Diqing nonferrous metals” and “the target company”) held by Yunnan Copper Co.Ltd(000878) (Group) Co., Ltd. (hereinafter referred to as “the acquisition” or “the transaction”). After the completion of the acquisition, The company will hold 88.24% equity of Diqing nonferrous metals. The board of directors of the company, after detailed verification of relevant appraisal matters in accordance with relevant laws and regulations, hereby explains the independence of the appraisal institution, the rationality of appraisal assumptions, the correlation between appraisal methods and appraisal purposes, and the fairness of appraisal pricing as follows:

1、 Independence of the evaluation organization

As the appraisal institution of this transaction, Zoomlion asset appraisal group Co., Ltd. (hereinafter referred to as “Zoomlion appraisal” and “appraisal institution”) has the appraisal qualification and securities and futures related business qualification. In addition to the business relationship of providing asset appraisal services for this transaction, the appraisal institution and its handling appraisers have no affiliated relationship with the company, the target company, the counterparty and its actual controller, and there are no actual and expected interests or conflicts affecting their provision of services, so they are independent.

2、 Evaluate the reasonableness of assumptions

The appraisal assumptions of the relevant asset appraisal report issued by Zoomlion appraisal for this transaction are in accordance with relevant national laws and regulations, follow the prevailing market practices or standards, comply with the actual situation of the appraised object, and no facts contrary to the appraisal assumptions are found. The appraisal assumptions are reasonable.

3、 Correlation between evaluation method and evaluation purpose

The purpose of this appraisal is to determine the value of the subject asset on the benchmark date of appraisal and provide value reference for this transaction. Zoomlion adopts the income method and asset-based method to evaluate the subject assets of this transaction respectively, and finally selects the evaluation value of the asset-based method as the evaluation result of the subject assets. In accordance with the requirements of relevant national laws and regulations and industry norms, following the principles of independence, objectivity, impartiality and science, and in accordance with the recognized asset appraisal methods, the necessary appraisal procedures have been implemented to evaluate the value of the subject asset on the benchmark date. The selected appraisal methods are reasonable and the appraisal conclusions are objective It fairly reflects the actual situation of the appraisal object on the benchmark date, the appraisal conclusion is reasonable, and the appraisal method is consistent with the appraisal purpose.

4、 Evaluate the fairness of pricing

This transaction is based on the evaluation results of the evaluation report issued by the evaluation institution with relevant securities and futures business qualifications, and the transaction pricing method is reasonable. The appraisal institution employed in this transaction meets the requirements of independence, has corresponding business qualification and competence, has sufficient reasons for the selection of appraisal methods, has carried out on-site verification in accordance with the requirements of asset appraisal standards and other laws and regulations, has obtained corresponding evidence, and the appraisal pricing is fair. The appraisal report takes reasonable values of the asset discount rate, income distribution in the forecast period and other appraisal parameters used in the appraisal of the subject assets of the transaction. The appraisal result objectively and fairly reflects the actual situation of the appraisal object on the benchmark date, and the appraisal result is fair.

To sum up, the board of directors of the company believes that the appraisal institution selected by the company for the exchange is independent, the premise of appraisal assumptions is reasonable, the correlation between appraisal methods and appraisal purposes is consistent, the appraisal conclusion of the asset appraisal report issued is reasonable and the appraisal price is fair.

Yunnan Copper Co.Ltd(000878) board of directors January 14, 2022

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