NOTES TO AND FORMING P<strong>AR</strong>T OF THE FINANCIAL STATEMENTS FOR THE YE<strong>AR</strong> ENDED JUNE 30, <strong>2018</strong> 7.1 Reconciliation of carrying amounts of tangible fixed assets at the beginning and end of the year are as follows: Description Freehold Factory building Plant and Coal Power Weighing Office Grid station Furniture and Vehicles Arms and Computers Office building Total land on freehold machinery gasification plant machine equipment & electric fittings ammunitions on leasehold land plant installation land Gross carrying value basis As at June 30, 2016 Cost 63,325,863 81,031,978 3,462,380,961 30,463,089 258,281,114 218,434 1,966,921 117,701,604 3,947,902 203,287,786 260,693 7,246,195 30,400,000 4,260,512,540 Accumulated depreciation - 10,763,516 204,844,308 4,293,214 48,650,813 25,018 314,066 21,424,421 812,860 53,637,640 92,129 3,935,051 12,241,067 361,034,103 Net book Value 63,325,863 70,268,462 3,257,536,653 26,169,875 209,630,301 193,416 1,652,855 96,277,183 3,135,042 149,650,146 168,564 3,311,144 18,158,933 3,899,478,437 Rupees Net carrying value basis Year ended June 30, 2017 Opening net book value 63,325,863 70,268,462 3,257,536,653 26,169,875 209,630,301 193,416 1,652,855 96,277,183 3,135,042 149,650,146 168,564 3,311,144 18,158,933 3,899,478,437 Additions - - 64,494,469 - - - 4,580,075 - - 39,121,957 - 993,649 - 109,190,150 Transfers from capital work-in-progress Disposals: Cost - - - - - - - - - (3,500,000) - - - (3,500,000) Accumulated depreciation - - - - - - - - - 1,143,609 - - - 1,143,609 Net book value - - - - - - - - - (2,356,391) - - - (2,356,391) Depreciation charge - (2,810,738) (82,054,035) (654,247) (7,337,061) (4,835) (251,391) (4,813,859) (313,504) (25,917,966) (16,856) (1,100,077) (3,631,787) (128,906,356) Balance as at June 30, 2017 63,325,863 67,457,724 3,239,977,087 25,515,628 202,293,240 188,581 5,981,539 91,463,324 2,821,538 160,497,746 151,708 3,204,716 14,527,146 3,877,405,840 Depreciation Rate (%) - 4 2.50 2.50 3.50 2.50 10 5 10 15 10 30 20 Gross carrying value basis As at June 30, 2017 Cost 63,325,863 81,031,978 3,526,875,430 30,463,089 258,281,114 218,434 6,546,996 117,701,604 3,947,902 238,909,743 260,693 8,239,844 30,400,000 4,366,202,690 Accumulated depreciation - 13,574,254 286,898,343 4,947,461 55,987,874 29,853 565,457 26,238,280 1,126,364 78,411,997 108,985 5,035,128 15,872,854 488,796,850 Net book Value 63,325,863 67,457,724 3,239,977,087 25,515,628 202,293,240 188,581 5,981,539 91,463,324 2,821,538 160,497,746 151,708 3,204,716 14,527,146 3,877,405,840 Net carrying value basis Year ended June 30, <strong>2018</strong> Opening net book value 63,325,863 67,457,724 3,239,977,087 25,515,628 202,293,240 188,581 5,981,539 91,463,324 2,821,538 160,497,746 151,708 3,204,716 14,527,146 3,877,405,840 Additions - - 12,430,226 - - - 2,905,394 149,093,472 452,250 33,349,162 - 3,724,599 - 201,955,103 Transfers from capital work-in-progress - - - - 434,288,568 - - - - - - - - 434,288,568 Disposals: Cost - - - - - - - - - (2,632,040) - - - (2,632,040) Accumulated depreciation - - - - - - - - - 697,287 - - - 697,287 Net book value - - - - - - - - - (1,934,753) - - - (1,934,753) Depreciation charge - (2,698,309) (81,241,599) (637,891) (12,165,607) (4,715) (824,108) (6,444,931) (310,465) (26,123,713) (15,171) (1,487,467) (2,905,429) (134,859,405) Balance as at June 30, <strong>2018</strong> 63,325,863 64,759,415 3,171,165,714 24,877,737 624,416,201 183,866 8,062,825 234,111,865 2,963,323 165,788,442 136,537 5,441,848 11,621,717 4,376,855,353 Depreciation Rate (%) - 4 2.50 2.50 3.50 2.50 10 5 10 15 10 30 20 Gross carrying value basis As at June 30, <strong>2018</strong> Cost 63,325,863 81,031,978 3,539,305,656 30,463,089 692,569,682 218,434 9,452,390 266,795,076 4,400,152 269,626,865 260,693 11,964,443 30,400,000 4,999,814,321 Accumulated depreciation - 16,272,563 368,139,942 5,585,352 68,153,481 34,568 1,389,565 32,683,211 1,436,829 103,838,423 124,156 6,522,595 18,778,283 622,958,968 Net book Value 63,325,863 64,759,415 3,171,165,714 24,877,737 624,416,201 183,866 8,062,825 234,111,865 2,963,323 165,788,442 136,537 5,441,848 11,621,717 4,376,855,353 106 MUGHAL IRON & STEEL INDUSTRIES LIMITED
7.1.1 The depreciation for the year has been allocated as follows: Rupees <strong>2018</strong> 2017 Cost of sales 103,208,223 97,691,631 Administrative expenses 31,651,182 31,214,725 134,859,405 128,906,356 7.1.2 The Company has temporarily leased out its ferro plant with aggregate cost of Rs. 28.466 million (2017: Rs. 28.466 million) to Mughal Steel Metallurgies Corporation Limited - (related party). The said plant is not currently in possession and control of the Company. 7.1.3 The aggregate fair value of freehold land, factory building on freehold land and plant and machinery is not less than its carrying value. Company’s immovable assets comprise of freehold land measuring 118 kannal and 4 marlas and factory building on freehold land measuring approximately 21,780 square foot, both located at 17-Km Sheikhupura Road, Lahore. 7.1.4 The details of tangible fixed assets disposed off during the year, having aggregate book value in excess of Rs. 500,000 each are as follows: Vehicles Buyer Relation Mode of Cost Accumulated Net book Sales Gain Rupees disposal depreciation value proceeds Usman pervez Employee Company policy 1,575,040 161,819 1,413,221 1,630,000 216,779 Abrar ahmed -do- -do- 1,057,000 535,467 521,533 528,500 6,967 June 30, <strong>2018</strong> 2,632,040 697,287 1,934,753 2,158,500 223,747 June 30, 2017 3,500,000 1,143,609 2,356,391 2,641,480 285,089 7.2 Following is the movement in capital work-in-progress: Opening Additions Transfers Closing Rupees balance balance Tangible: - Plant and machinery 66,373,673 1,861,519,256 – 1,927,892,929 - Power plant 124,766,368 309,522,200 (434,288,568) – - Others 7,349,536 – (7,349,536) – 198,489,577 2,171,041,456 (441,638,104) 1,927,892,929 Intangible: - ERP software 12,705,110 1,728,000 (14,433,110) – June 30, <strong>2018</strong> 211,194,687 2,172,769,456 (456,071,214) 1,927,892,929 June 30, 2017 8,784,000 202,410,687 – 211,194,687 Annual Report <strong>2018</strong> 107
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