ZAMIL STEEL INDUSTRIES

Prcedures and Guidelines for the Fixed Asset System

A . Capital Investment Form
1 This Form is used for getting an approval for the Capital Investment.
All Items of the nature of Asset, which is going to provide services for more than one year needs to be capitalized.
The cost of using that asset will be charged as depreciation to the user Cost Center as depreciation in the Operating
Statement. If the cost is less than SAR 1000 , then the question of capitalization depends on the nature of the item,
it's useful life, tracking of the asset through the asset system etc.
2 The following informations are to be filled in this form before submission to Finance :-
a) The details of the Cost Center where the asset will be installed and where the depreciation is to be charged
(This is not the home cost center of the Requisitioner.)
b) Details of the Requisitioner.
c) The justification for this new asset in specific terms.
d) Major Category & Minor category of the asset, which will decide the grouping of the asset in the Asset Register
A list of Major Categories and Minor Categories is attached herewith, for ready reference
e) If any freight, duties and installation cost is to be incurred in addition to the purchase cost, the same (expected
cost) need to be mentioned in order to get Management Approval for the total amount which is budgetted.
f) The budget No and the Bugetted amount for this asset .
g) It is very important to specify when the requested asset need to be received at Zamil steel and the break up of the
Payments with respect to Month. Please make sure that the receipt must fall within the budget year.
h) Please mention the payment term under the Cash flow timing .
i) Also mention the advantage of buying the new asset in terms of Cost reduction and / or increase in production.
Please attach the details to support your calculations.
j) It is presumed that the Capital Expenditure budget is evolved through thorough study by the department about
it's requirement. This investment is going to increase the operating cost of the department for a period of many
years. So if any deviation from the budget is required, then it should be supported by proper reasoning and need
to be highlighted to Executive Management for their consideration and approvals
3 Capital Investment Forms are to be processed well in advance before fabricating any asset by using
In house resources like Raw Material, Machines and / or Labour etc. (Such practices before Management
approval is a violation of Company Policy)
The assets of the company are to be used for the normal business activities of the company, which is known to the
Management. If any deviation to this is required, it should be with the knowledge and approval of the Executive
Management.
B . Asset Retirement Form
1) Retiring of any assets should be with the prior approval of the Top Management.
Please mention Asst No and Tag No for identifying the asset in the Asset register.
Finance will be providing the asset reports on quarterly basis or against requirement.
Book Value will be mentioned by Finance Dept, before forwarding to Exec. Management
2) Cost of Spares / Tools / Accessories available in the store to be mentioned separately
Also cost of any software attached to the CNC Machines, need to be mentioned.
Please attach a list such spares & accessories which are no more required and are obsolete
3) Some assets like vehicles & computers which are having a resale value, should be retired only after getting the
sale value.
C . Asset Transfer Form
1) Now finance is storing the name of the custodian and the physical location of the asset in the asset register.
It is the responsibility of the custodian to make a transfer form as and when an asset is transferred to
another custodian or to another cost center, for which this form is to be used.
This will help us to maintain the asset system and to charge depreciation to the correct cost center.
 Routing : Div. General Manager / Costing / I.T Dept (For Computer items) / Finance Manager / Executive Mngt / Costing

Saudi Arabia C.E.A No :

Capital Investment (C.I) Form

Division : P.E.B Cost Center: 740 Product: Department : Industrial Engineering

Requisitioner
Information Note : The depreciation will be charged to the Cost Center mentioned above
Name : Alexander de souza Employee No : 098 Position : Supervisor
✘ Additional Capacity ✘ Increased Efficiency ✘ Safety
Required for ✘ Replacement ✘ Technical improvement ✘ Modification
Other (Explain)
IE WORK SHOP ACCESSORIES
Project
Description &
Justification

Asset ACQUISITION COST

ITEM
Actual Budget
Major Minor
Cate- Cate- Curr Total
No. Description Qty Rate No. Amount in SAR
gory gory ency Value

1 IE work shop accessories local oder 1set USD 15,870 1,250.00

Description & Acquisition Cost of Asset

###

Subtotal : 1,250.00
Add : Expected Freight
: Custom Duty
: In-house Installation Cost ( Including Sub-Contract Installation)
Deduct : Equipment Trade-in Value (if applicable)
Net Acquisition Cost 1,000.00
Month Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec Total
Delivery at Z.S ✘ -
Cash Flow Timing -

Payback _____Yrs ____Months Basis : Cost Reduction by SAR ……………. / Month or Overall Increase in Prodn by ………. MTS / Month
Period Other Remarks (if any) :
Budget Approved Balance Reason for any deviation from the Budget (Need
Asset approved under this Budget
No Amount Amount special approval from Ex. Mngt)
Budgetary
Control

Requisitioner : Date : I.T Dept. : Date :

Supervisor : Date : Finance (Costing) : Date :

Prepared &
Approved By Dept. Head : Date : Finance manager : Date :

General Manager : Date : Executive Mngt : Date :

Not Approved with reason

Date :
(if any)

Note : Cost of the Asset should be indicated before submission to Finance

Routing : Div. General Manager / Costing / I.T Dept (For Computer items) / Finance Manager / Executive Mngt / Costing

Retired Date
Saudi Arabia

Asset Retirement Form

Division : Cost Center : Product : Department :

Name : Employee No : Position :

Initiator
Information Current Physical Location of Asset :

Details of Assets Retired Date of Acquisition Cost

Acquisitio Book Sale
No. Asset No Tag No MEL No Description n Qty Rate Total Value
Value Value
Description of Retired Asset

Subtotal : 0.00 0.00 0.00

Cost of Spare Parts available in the Store (which is required exclusively for this assset and will be obsolete) 0.00

( Please attach a list of the spares)

Cost of Disposal (If Any) 0.00

Sell capital asset. Method of Sale :

Method
of Store capital asset until further instruction . Storage Location :

Retirement
Total Profit / (Loss) on Sale of Assets Nil -

Justification
for

Retiring
Assets

Initiator : Date : I.T Dept. : Date :

Supervisor : Date : Finance (Costing) : Date :

Dept. Head : Date : Finance manager : Date :

Prepared &
Approved By
General Manager : Date : Executive Mngt : Date :

Posted By : Date :

Not Approved with

Reason (if any)

Note : Asset No / tag No should be indicated before submission to Finance

Routing : Div. General Manager / Receiving Dept / Div General Manager / I.T Dept (For Computer items) Costing / Finance Manager

Transfer Date
Saudi Arabia

Asset Transfer Form

Division : Cost Center : Product : Department :

Name : Employee No : Position :

Initiator
Information Current Physical Location of Asset :

Division : Cost Center : Product : Department :

Name : Employee No : Position :

Receiver
Information New Physical Location of Asset :

Details of Asset Transferred Date of Acquisition Cost

Acquisi- Total Book
No. Asset No Tag No MEL No Description tion Qty Rate
Value Value New Custodian Name
Description of Transferred Asset

Subtotal : 0.00

Cost of Transferring the Assets 0.00

Subtotal : 0.00

Justification
for

Transfer
of
Assets

Initiator : Date : Receiver : Date :

Dept Head. : Date : Dept Head : Date :

Prepared
& Division Head : Date : Division Head : Date :
Approved By

Costing Section : Date : Finance Manager : Date :

Not Approved
with reason Posted By : Date :
(if any)

Note : Asset No / tag No should be indicated before submission to Finance

FIXED ASSETS Categories (ERP)

Description Code No
Major Categories
LAND - General LANDG
LAND - PEB LANDP
LAND - SSD LANDS
LAND - T&g LANDT
BUILDING - General BLDGG
BUILDING - PEB BLDGP
BUILDING - SSD BLDGS
BUILDING - T&G BLDGT
PLANT & MACHINERY - General PLNTG
PLANT & MACHINERY - PEB PLNTP
PLANT & MACHINERY - SSD PLNTS
PLANT & MACHINERY - T&G PLNTT
TOOLS & INSTRUMENTS - General TOOLG
TOOLS & INSTRUMENTS - PEB TOOLP
TOOLS & INSTRUMENTS - SSD TOOLS
TOOLS & INSTRUMENTS - T&G TOOLT
OFFICE EQUIPMENTS - General OFEQG
OFFICE EQUIPMENTS - PEB OFEQP
OFFICE EQUIPMENTS - SSD OFEQS
OFFICE EQUIPMENTS - T&G OFEQT
COMPUTERS - General COMPG
COMPUTERS - PEB COMPP
COMPUTERS - SSD COMPS
COMPUTERS - T&G COMPT
FURNITURE & FIXTURES - General FURNG
FURNITURE & FIXTURES - PEB FURNP
FURNITURE & FIXTURES - SSD FURNS
FURNITURE & FIXTURES - T&G FURNT
VEHICLES - General VEHLG
VEHICLES - PEB VEHLP
VEHICLES - SSD VEHLS
VEHICLES - T&G VEHLT
FIXED ASSETS Categories (ERP)
Minor Categories
Description Code No
1) LAND
Lease Hold LHOLD
Free Hold FHOLD
2) BUILDING
Factory FACTR
Office OFFCE
Warehouse WRHSE
Renovation - Factory REFAC
Renovation - Office REOFF
Renovation - Warehouse REWRH
3) PLANT & MACHINERY

A) DIRECT MACHINERIES
Bending M/C BENDG
Compressor COMPR
Cutting M/C CUTNG
Cutting M/C-Portable CUNNP
Drilling M/C DRILL
Drilling M/C-Portable DRILP
Foaming M/C FOAMG
Grinding M/C GRIND
Grinding M/C-Portable GRINP
Kettle for Galvanization KETLE
Lathe LATHE
Milling M/C MILLG
Painting Line PNTNG
Painting-Portable PNTNP
Press PRESS
Roll Foaming M/C RLFMG
Shearing & Punching M/C SHRNG
Shot Blasting M/C SHBLS
Welding Line - Auto WLDGA
Welding M/C - Manual WLDGM

B) INDIRECT MACHINERIES
FIXED ASSETS Categories (ERP)
Minor Categories
Description Code No
Conveyor System CONVR
Crane - Gantry CRNGA
Crane - Jib CRNJB
Crane - Mobile CRNMO
Crane - Overhead CRNOH
Fans FANS.
Fork Lift FLIFT
Manlift MLIFT
Other Lifting Equipments OLIFT
Other Machineries OMACH
Pumps PUMPS
Side Loaders SLODR
Storage Tanks STANK
4) TOOLS & INSTRUMENTS
Dies & Punches DI&PU
Hand Tools HTOOL
Measuring Instruments INSTR
Testing Equipments TESEQ
Miscellaneous Tools MTOOL
5) OFFICE EQUIPMENTS
Air Conditioner (Central) ACCEN
Air Conditioner (Split / Window) ACWIN
Audio & Vedio Equipments AVEQP
Camera CAMRA
Fax Machine FAXMC
Photo Copier PHCPR
Refrigerators & Coolers REFRG
Telephone TELPH
Type Writer TYWTR
Other Equipments OTEQP
Vacuum Cleaner VACUM
6) COMPUTRES
FIXED ASSETS Categories (ERP)
Minor Categories
Description Code No
Networking Equipments NWEQP
Personnel Computers PCOMP
Printers-Dot Matrix PRDOT
Printers-Laser PRLAS
Printer-Inkjet PRINK
Printer-Vax PRVAX
Scanners SCANR
Servers SERVR
Software SOFTR
Other I.T Equipments OTCOM
7) FURNITURE & FIXTURES
Apartment F & F APFUR
Cabinets - Steel CABST
Cabinets - Wooden CABWD
Chair CHAIR
Furnishings - Decorative FURNG
Table TABLE
Other F & F OTFUR
8) VEHICLES
Ambulance AMBUL
Bi Cycle BICYC
Bus BUSES
Car CARS.
Pick Up PCKUP
Tractor TRACT
Trailer TRALR
Truck TRUCK
Two Wheeler TWOWH