Consolidated financial statement of JSW S.A. Capital Group for 2012

2.11. Inventories

Inventories are shown at purchase price or production cost which, however, is not higher than net sales prices. The value of material and merchandise consumption is determined using the “first in first out” (FIFO) method. The consumption of finished goods, semi-finished products and production in progress is determined using the weighted average method. The cost of finished goods and production in progress comprises direct labor, auxiliary materials, other direct costs and pertinent general production costs (based on normal production capacity). The net sales price is the estimate sales price in normal course of business, minus pertinent variable costs of sales.