a) Accounting Convention:
 
 The financial statements are prepared under the historical cost
 convention, on accrual basis, in accordance with the generally accepted
 accounting principles in India, the Accounting Standards issued by the
 Institute of Chartered Accountants of India and the provisions of the
 Companies Act, 1956.
 
 b) Use of Estimates:
 
 The preparation of financial statements in conformity with generally
 accepted accounting principles requires the management to make
 estimates and assumptions that affect the reported balances of assets
 and liabilities as of the date of the financial statements and reported
 amounts of income and expenses during the period.  Management believes
 that the estimates used in the preparation of financial statements are
 prudent and reasonable. Actual results could differ from the estimates.
 
 c) Fixed Assets:
 
 Fixed Assets are stated at cost of acquisition or construction, less
 accumulated depreciation. Cost includes all expenses related to
 acquisition and installation of the concerned assets.
 
 Direct fnancing cost incurred during the construction period on major
 projects is also capitalised.
 
 Fixed assets acquired under fnance lease are capitalised at the lower
 of their fair value and the present value of the minimum lease
 payments.
 
 d) Asset Impairment:
 
 Management periodically assesses using, external and internal sources,
 whether there is an indication that an asset may be impaired. An
 impairment occurs where the carrying value exceeds its recoverable
 amount. An impairment loss, if any, is recognised in the period in
 which the impairment takes place.
 
 e) Leases:
 
 Leases of assets under which all the risks and rewards of ownership are
 effectively retained by the lessor are classifed as operating leases.
 Lease payments under operating leases are recognised as an expense on a
 straight-line basis over the lease term.
 
 f) Investments:
 
 Investments are classifed into current and long term investments. Long
 term investments are carried at cost. Cost of acquisition includes all
 costs directly incurred on the acquisition of the investment. Provision
 for diminution, if any, in the value of long term investments is made
 to recognise a decline, other than of a temporary nature. Current
 investments are stated at lower of cost and net realisable value.
 
 g) Inventories:
 
 Inventories are valued at lower of cost and net realisable value. Cost
 is computed on the weighted average basis and is net of Cenvat.
 Finished goods and work-in-progress include cost of conversion and
 other costs incurred in bringing the inventories to their present
 location and condition. Finished goods valuation also includes excise
 duty. Provision is made for cost of obsolescence and other anticipated
 losses, whenever considered necessary.
 
 h) Provisions and Contingent Liabilities:
 
 Provisions are recognised when the Company has a present obligation as
 a result of a past event, it is probable that an outfow of resources
 embodying economic benefits will be required to settle the obligation
 and when a reliable estimate of the amount of the obligation can be
 made.
 
 No Provision is recognised for –
 
 A.  Any possible obligation that arises from past events and the
 existence of which will be confrmed only by the occurrence or
 non-occurrence of one or more uncertain future events not wholly within
 the control of the Company; or
 
 B.  Any present obligation that arises from past events but is not
 recognised because.
 
 a) It is not probable that an outfow of resources embodying economic
 benefits will be required to settle the obligation; or
 
 b) A reliable estimate of the amount of obligation cannot be made.
 
 Such obligations are recorded as Contingent Liabilities. These are
 assessed periodically and only that part of the obligation for which an
 outfow of resources embodying economic benefits is probable, is provided
 for, except in the extremely rare circumstances where no reliable
 estimate can be made.
 
 Contingent Assets are not recognized in the financial statements since
 this may result in the recognition of income that may never be
 realised.
 
 i) Revenue Recognition:
 
 Sales are recognised when goods are supplied and are recorded net of
 returns, trade discounts, rebates, sales taxes and excise duties.
 
 Income from processing operations is recognised on completion of
 production/dispatch of the goods, as per the terms of contract.
 
 Export incentives are accounted on accrual basis and include the
 estimated value of export incentives receivable under the Duty
 Entitlement Pass Book Scheme.
 
 Dividend income is recognised when the right to receive the same is
 established.
 
 Interest income is recognised on a time proportion basis.
 
 Insurance claims and transport and power subsidies from the Government
 are accounted on cash basis when received.
 
 j) Borrowing Costs:
 
 Borrowing costs that are directly attributable to the acquisition of an
 asset that necessarily takes a substantial period of time to get ready
 for its intended use are capitalised as part of the cost of that asset
 till the date it is put to use. Other borrowing costs are recognised as
 an expense in the period in which they are incurred.
 
 k) Foreign Currency Transactions:
 
 i) Transactions in foreign currency are recorded at the exchange rates
 prevailing on the date of the transaction. Monetary assets and
 liabilities denominated in foreign currency remaining unsettled at the
 period end are translated at the period end exchange rates. The
 difference in translation of monetary assets and liabilities and
 realised gains and losses on foreign currency transactions are
 recognised in the Proft and Loss Account.
 
 ii) Forward exchange contracts, remaining unsettled at the period end,
 backed by underlying assets or liabilities are also translated at
 period end exchange rates. Premium or discount on forward foreign
 exchange contracts is amortised over the period of the contract and
 recognised as income or expense for the period. Realised gain or losses
 on cancellation of forward exchange contracts are recognised in the
 Proft and Loss Account of the period in which they are cancelled.
 
 iii) Non Monetary foreign currency items like investments in foreign
 subsidiaries are carried at cost and expressed in Indian currency at
 the rate of exchange prevailing at the time of making the original
 investment.
 
 l) Research and Development Expenditure:
 
 Revenue expenditure on research and development is charged to the Proft
 and Loss Account of the year in which it is incurred. Capital
 expenditure incurred during the year on research and development is
 shown as addition to fxed assets.
 
 m) Employee benefits:
 
 Short term Employee benefits:
 
 Al employee benefits payable wholly within twelve months of rendering
 the service are classifed as short term employee benefits. benefits such
 as salaries, performance incentives, etc., are recognized as an expense
 at the undiscounted amount in the Proft and Loss Account of the year in
 which the employee renders the related service.
 
 Post Employment benefits:
 
 Defned Contribution Plans:
 
 Payments made to a defned contribution plan such as Provident Fund and
 Superannuation fund are charged as an expense in the Proft and Loss
 Account as they fall due.
 
 Defned benefit Plans:
 
 Companys liability towards gratuity to past employees is determined
 using the projected unit credit method which considers each period of
 service as giving rise to an additional unit of benefit entitlement and
 measures each unit separately to build up the fnal obligation. Past
 services are recognised on a straight line basis over the average
 period until the amended benefits become vested. Actuarial gain and
 losses are recognised immediately in the statement of Proft and Loss
 Account as income or expense. Obligation is measured at the present
 value of estimated future cash flows using a discounted rate that is
 determined by reference to market
 
 yields at the Balance Sheet date on Government Securities where the
 currency and terms of the Government Securities are consistent with the
 currency and estimate terms of the defned benefit obligations.
 
 Other Long Term Employee benefits:
 
 Other Long Term Employee benefits viz., leave encashment and long
 service bonus are recognised as an expense in the Proft and Loss
 Account as and when it accrues. The Company determines the liability
 using the Projected Unit Credit Method, with the actuarial valuation
 carried out as at the Balance Sheet date.  Actuarial gains and losses
 in respect of such benefits are charged to the Proft and Loss Account.
 
 n) Incentive Plans:
 
 The Company has a scheme of Performance Linked Variable Remuneration
 (PLVR) which rewards its employees based on Economic Value Addition
 (EVA). The PLVR amount is related to actual improvements made in EVA
 over the previous year when compared with expected improvements.
 
 Up to March 31, 2009 the EVA awards would fow through a notional bank
 whereby only the prescribed portion of the bank is distributed each
 year and the balance is carried forward. The amount distributed out of
 the notional bank is charged to Proft and Loss Account. The notional
 bank was held at risk and charged to EVA of future years and was
 payable at that time, if future performance so warranted. The opening
 notional bank balance accumulated till March 31, 2009, is being paid @
 33% every year on reducing balance.
 
 The entire EVA award for the year has been charged to the Proft and
 Loss Account.
 
 o) Depreciation:
 
 Leasehold land is amortised equally over the lease period.
 
 Leasehold Improvements are depreciated over the shorter of the
 unexpired period of the lease and the estimated useful life of the
 assets.
 
 Depreciation is provided pro rata to the period of use, under the
 Straight Line Method at the rates specifed in Schedule XIV to the
 Companies Act, 1956, except for computer hardware which is depreciated
 over four years.
 
 Pursuant to the Scheme of Amalgamation, the Company has acquired
 certain SAP licenses and Trademarks.  These SAP licenses acquired are
 amortised over a period of four years. Tradmarks acquired are amortised
 equally over the best estimate of their useful life not exceeding a
 period of ten years, except in the case of Goodknight and Hit brands
 where the brands are amortised equally over a period of twenty years.
 The major infuencing factors behind amortising these brands over a
 period of twenty years are that Goodknight has been in existence since
 the last twenty seven years and been growing at a fast pace. Goodknight
 has grown by 29% and HIT by 35% during the period under review.
 Goodwill is amortised over a period of fve years.  Tools, dies and
 moulds acquired are depreciated over a period of three and half years.
 Technical Knowhow is depreciated over a period of ten years.
 
 In accordance with the Court order approving the Scheme of Amalgamation
 of the erstwhile Godrej Household Products Limited, an amount
 equivalent to the amortisation of the Goodknight and Hit brands at the
 end of each financial year is directly debited to the balance in the
 General Reserve Account.
 
 Assets costing less than Rs. 5,000 are depreciated at 100% in the year of
 acquisition.
 
 p) Hedging:
 
 The Company uses forward exchange contracts to hedge its foreign
 exchange exposures and commodity futures contracts to hedge the
 exposure to oil price risks. Gains or losses on settled contracts are
 recognised in the Proft and Loss Account. Gains or losses on the
 commodity futures contracts are recorded in the Proft and Loss Account
 under Cost of Materials Consumed.
 
 q) Taxes on Income:
 
 Current tax is the amount of tax payable on the taxable income for the
 year determined in accordance with the provisions of the Income-tax
 Act, 1961.
 
 Deferred tax is recognised on timing differences; being the difference
 between taxable income and accounting income that originate in one
 period and are capable of reversal in one or more subsequent periods.
 Deferred tax assets on unabsorbed tax losses and tax depreciation are
 recognised only when there is a virtual certainty of their realisation
 and on other items when there is reasonable certainty of realisation.
 The tax effect is calculated on the accumulated timing differences at
 the year end based on the tax rates and laws enacted or substantially
 enacted on the balance sheet date.
 
 r) Segment Reporting
 
 The Company is considered to be a single segment company – engaged in
 the manufacture of Personal and Household Care products. Consequently,
 the Company has in its primary segment only one reportable business
 segment. As per AS-17 ‘Segment Reporting if a single financial report
 contains both consolidated financial statements and the separate
 financial statement of the parent, segment information need be presented
 only on the basis of the consolidated financial statements. Accordingly,
 information required to be presented under AS-17 Segment Reporting has
 been given in the consolidated financial statements.