On 1 March 2010, Granite Corporation (GC) started the construction of a new plant to meet the growing demand for its products. The new plant was completed at a cost of Rs. 100 million on 31 May 2011. GC financed the cost of the project from the following sources:

 (i) On 1 March 2010, a 7-year loan of Rs. 70 million was obtained specifically for the construction of the plant. The loan carried mark up @ 13% per annum payable semiannually. An arrangement fee @ 1% of the loan amount was paid to the bank. Two installments, each comprising of repayment of principal of Rs. 5 million with interest, were paid on 31 August 2010 and 28 February 2011.

 (ii) GC also has a running finance facility of Rs. 100 million carrying mark-up @ 14% per annum. Average utilization of this facility, prior to commencement of construction was Rs. 10 million. Any additional amount required for the project was provided through this facility. 

(iii) Surplus funds were used to reduce the running finance utilization or invested in savings account @ 8% per annum. 

Payments made to the contractor were as follows: Payment date Rs. in million 

01 March 2010 25 

31 January 2011 65

30 September 2011 10 

The construction work was suspended from 1 February 2011 to 28 February 2011. The suspension was caused due to delay in shipment of essential components for the installation of the plant.

REQUIRED:

Calculate the amount of borrowing costs that may be capitalized during the years ended 30 June 2010 and 2011 in accordance with the requirements of International Financial Reporting Standards.