Inventory valuation method and revenue recognition method of 5 Indian Companies:

1) ITC Limited

Inventory Valuation Method (IVM)

Inventories are stated at lower of cost and net realisable value. The cost is calculated on weighted
average method.

Revenue recognition method

Revenue is measured at the fair value of the consideration received or receivable for goods supplied
and services rendered, net of returns and discounts to customers.

2) Apollo Tyre

Revenue recognition method

Revenues for services are recognised when the service rendered has been completed.

IVM

Valued at lower of cost and net realisable value

3) Ashok Leyland

Revenue recognition method

Revenue is measured at the fair value of the consideration received or receivable.

Sale of goods: Revenue from the sale of goods is recognised when the goods are despatched or
appropriated in accordance with the terms of sale at which time the title and significant risks and
rewards of ownership pass to the customer. Revenue is recognised when collectability of the resulting
receivable is reasonably assured.

IVM

Cost of inventories are determined as follows:

• Raw materials and components, stores, spares, consumable tools, stock in trade: on moving
weighted average basis; and

• Work-in-progress, works-made components and finished goods: on moving weighted average basis
plus appropriate share of overheads. Cost of surplus/ obsolete/ slow moving inventories are
adequately provided for

4) TATA MOTORS

Revenue recognition method

Revenue is measured at fair value of consideration received or receivable.

Sale of products

The Company recognises revenues on the sale of products, net of discounts, sales incentives, customer
bonuses and rebates granted, when products are delivered to dealers or when delivered to a carrier
for export sales, which is when title and risks and rewards of ownership pass to the customer.
Revenues are recognised when collectability of the resulting receivable is reasonably assured.

IVM

Inventories are valued at the lower of cost and net realisable value. Cost of raw materials, components
and consumables are ascertained on a moving weighted average basis. Cost, including fixed and
variable production overheads, are allocated to work-in-progress and finished goods determined on
a full absorption cost basis. Net realisable value is the estimated selling price in the ordinary course of
business less estimated cost of completion and selling expenses.

5) Larsen & Toubro

Revenue recognition method

Revenue is measured at the fair value of the consideration received or receivable and is reduced for
estimated customer returns, rebates and other similar allowances. Revenue from sale of
manufactured and traded goods is recognised when the goods are delivered and titles have been
passed

IVM

Inventories are valued after providing for obsolescence, as under:

(i) Raw materials, components, construction materials, stores, spares and loose tools at
lower of weighted average cost or net realisable value.
(ii) Manufacturing work-in-progress at lower of weighted average cost including related
overheads or net realisable value.
(iii) Finished goods and stock-in-trade (in respect of goods acquired for trading) at lower of
weighted average cost or net realisable value.
(iv) Completed property/work-in-progress (including land) in respect of property
development activity at lower of specifically identifiable cost or net realisable value.