Appraisal letter, being a letter in nature, do not require another covering letter.... waste of stationery. Appraisal letter can encompass, among other things, past performance of the employee, whether it met the targets or above or below. How his people-related skills were assessed. Next paragraph talks about how he has been evaluated numerically , in case your organisation adopts Bell Curve for force-fitting. Third and last paragraph gives positive and motivating words to encourage the person to perform better in the ensuring year and wish him all the best from the Management in his efforts. Close the letter simply "With Best Wishes"... This is more than enough.