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 applicable Accounting Standards
 notified under Section 211(3c) of the Companies Act, 1956 and specified
 in the Companies (Accounting Standard) Rules, pronouncements of 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 financing cost incurred during the construction period on major
 projects is also capitalised.
 
 Fixed assets acquired under finance 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 of the Asset exceeds its
 recoverable amount. Recoverable amount is higher of an asset''s net
 selling price and its value in use. Value in use is the present value
 of estimated future cash flows expected to arise from the continuing
 use of an asset and from its disposal at the end of its useful life. An
 impairment loss, if any, is recognised in the period in which the
 impairment takes place.
 
 e.  Operating Leases
 
 Leases of assets under which all the risks and rewards of ownership are
 effectively retained by the lessor are classified 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 classified 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 estimated 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 outflow 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 recognized for -
 
 A.  Any possible obligation that arises from past events and the
 existence of which will be confirmed 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 outflow 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
 outflow 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
 realized.
 
 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. Expenditure
 
 - Expenses are accounted for on accrual basis and provision is made for
 all known losses and liabilities.
 
 - Revenue expenditure on research and development is charged to the
 Statement of Profit and Loss of the year in which it is incurred.
 Capital expenditure incurred during the year on research and
 development is shown as addition to fixed assets.
 
 k. 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.
 
 l. 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 Statement of Profit and Loss.
 
 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
 Statement of Profit and Loss 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.
 
 iv) The Government of India, Ministry of Corporate Affairs has during
 the year amended the Companies (Accounting Standards) Rules, 2006, in
 respect of Accounting Standard (AS) 11 relating to The Effects of
 Changes in Foreign Exchange Rates, wherein enterprises have been given
 an option to accumulate exchange differences in a Foreign Currency
 Monetary Item Translation Difference Account subject to the conditions
 specified in the Notification. Accordingly, the Company has exercised
 the option to accumulate the foreign currency gain/losses in the
 Foreign Currency Monetary Item Translation Difference Account.
 
 m. 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 Statement of Profit and Loss. Gains or losses on the
 commodity futures contracts are recorded in the Statement of Profit and
 Loss under Cost of Materials Consumed.
 
 n. Employee Benefits
 
 i) Short-term Employee benefits
 
 All employee benefits payable wholly within twelve months of rendering
 the service are classified as short-term employee benefits. Benefits
 such as salaries, performance incentives, etc., are recognised as an
 expense at the undiscounted amount in the Statement of Profit and Loss
 of the year in which the employee renders the related service.
 
 ii) Post Employment Benefits
 
 a) Defined Contribution Plans
 
 Payments made to a defined contribution plan such as Provident Fund
 maintained with Regional Provident Fund Office and Superannuation Fund
 are charged as an expense in the Statement of Profit and Loss as they
 fall due.
 
 Upto the previous year all provident fund contributions, whether made
 to the Regional Provident Fund Office or to the Provident Fund Trust
 administered by the Company were considered as Defined Contribution
 Plans.
 
 b) Defined Benefit Plans Gratuity Fund
 
 Company''s 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 final 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 Profit and Loss
 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 defined
 benefit obligations.
 
 Provident Fund
 
 Provident Fund Contributions other than those made to the Regional
 Provident Fund Office of the Government which are made to the Trust
 administered by the Company are considered as Defined Benefit Plans.
 The interest rate payable to the members of the Trust shall not be
 lower than the statutory rate of interest declared by the Central
 Government under the Employees Provident Funds and Miscellaneous
 Provisions Act, 1952 and shortfall, if any, shall be made good by the
 Company.
 
 c) Other Long Term Employee Benefits
 
 Other Long Term Employee Benefits viz., leave encashment and long
 service bonus are recognised as an expense in the Statement of Profit
 and Loss 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 Statement of Profit and
 Loss.
 
 o.  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 flow 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 Statement of Profit and Loss. 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
 notional bank balance accumulated till March 31, 2009, as at the
 beginning of the current year is being paid @ 33% every year on the
 reducing balance.  The entire EVA award for the year has been charged
 to the Statement of Profit and Loss.
 
 p. Depreciation and Amortisation
 
 i) Leasehold land is amortised equally over the lease period.
 
 ii) Leasehold Improvements are depreciated over the shorter of the
 unexpired period of the lease and the estimated useful life of the
 assets.
 
 iii) Depreciation is provided, pro rata to the period of use, under the
 Straight Line Method at the rates specified in Schedule XIV to the
 Companies Act, 1956, except:
 
 a) In case of computer hardware which is depreciated over 4 years.
 
 b) SAP licenses acquired pursuant to the Scheme of the Amalgamation of
 the erstwhile Godrej Household Products Limited (GHPL) with the Company
 are amortised over a period of 4 years and Trademarks acquired are
 amortised equally over the best estimate of their useful life not
 exceeding a period of 10 years, except in the case of Goodknight and
 Hit brands where the brands are amortised equally over a period of 20
 years.
 
 c) Goodwill is amortised over a period of 5 years.
 
 d) Tools, dies and moulds acquired are depreciated over a period of
 31/2 years.
 
 e) Technical Knowhow is depreciated over a period of 10 years.
 
 f) In accordance with the Court order approving the Scheme of
 Amalgamation of the erstwhile GHPL with the Company, 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.
 
 iv) Assets costing less than Rs. 5,000 are depreciated at 100% in the
 year of acquisition.
 
 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 subject to consideration of prudence,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 asset /
 liabilities in respect of on timing differences which originate and
 reverse during the tax holiday period are not recognised. Deferred tax
 asset / liabilities in respect of timing differences that originate
 during the tax holiday period but reverse after the tax holiday period
 are recognised. 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.