MYCLOTH INDIA ARMY : OFFICIAL ANNUAL LOYALTY NET PROFIT SHARE CALCULATION & ACCOUNTING POLICY

 

MYCLOTH INDIA ARMY LONG-TERM SOCIAL MEDIA ACCOUNT OWNER & BRAND PARTNER PROGRAM

ANNUAL LOYALTY NET PROFIT SHARE CALCULATION & ACCOUNTING POLICY


Program: MYCLOTH INDIA ARMY — LONG-TERM SOCIAL MEDIA ACCOUNT OWNER & BRAND PARTNER PROGRAM

Commercial Model: 10% LOYALTY ANNUAL NET PROFIT SHARE

Brand: MYCLOTH INDIA

Official Website: MyCloth.in

Document Type: Official Annual Loyalty Net Profit Share Calculation & Accounting Policy

Policy Version: 1.0

Effective Date: 18 September 2026

Last Updated: 18 September 2026

IMPORTANT POLICY NOTICE

This Official Annual Loyalty Net Profit Share Calculation & Accounting Policy (“Policy”) establishes the financial, accounting, attribution, qualification, contribution-score, reconciliation, adjustment and allocation methodology used for calculating the annual Partner Pool and the individual allocation of eligible participants under:

MYCLOTH INDIA ARMY — LONG-TERM SOCIAL MEDIA ACCOUNT OWNER & BRAND PARTNER PROGRAM

The Program's current commercial model is:

10% LOYALTY ANNUAL NET PROFIT SHARE

The 10% is one collective annual Partner Pool.

It is not 10% for every participant.

It is not : 10% × number of participants.

This Policy must be read together with:

  1. the Master Program Terms & Conditions;

  2. the participant-specific MyCloth India Social Media Account Owner & Brand Partnership Agreement — Annual Loyalty Net Profit Share;

  3. the applicable Product Contribution Schedule;

  4. the Attribution & Tracking Policy;

  5. the Advertising & Content Policy;

  6. the Fraud Prevention & Disqualification Policy;

  7. the Tax / Withholding & Payment Policy;

  8. the Privacy Policy; and

  9. any other written Program schedule expressly incorporated into the applicable agreement.

Nothing in this Policy overrides mandatory applicable law or any contractual right, protection or liability that cannot lawfully be excluded or modified.

Where a participant-specific definitive agreement expressly provides a different participant-specific provision, that agreement shall govern to the extent specified by the applicable order-of-precedence rules.

PART 1 — PURPOSE OF THIS POLICY

1. PURPOSE

The purpose of this Policy is to create a structured and auditable methodology for determining:

  1. Annual Distributable Net Profit (“ADNP”);

  2. Applicable Percentage;

  3. Annual Partner Pool (“APP”);

  4. Qualifying Net Revenue (“QNR”);

  5. Product Contribution Factor (“PCF”);

  6. Attributable Contribution Score (“ACS”);

  7. Total Attributable Contribution Score (“TACS”);

  8. each eligible participant's allocation percentage;

  9. each participant's calculated annual allocation;

  10. post-period adjustments;

  11. rounding;

  12. accounting records;

  13. reconciliation; and

  14. payment-ready amounts.

The objective is to make the calculation understandable, consistent, documented and capable of professional review.

PART 2 — CORE FINANCIAL PRINCIPLE

2. COLLECTIVE 10% MODEL

The Current Program Applicable Percentage is: 10%

The Program receives one collective allocation calculated from the applicable Annual Distributable Net Profit.

The structure is:

Company Annual Distributable Net Profit

↓

× Applicable Percentage

↓

Annual Partner Pool

↓

Participant Verified Contribution Scores

↓

Participant's Share of Total Contribution Score

↓

Individual Annual Loyalty Net Profit Share

PART 3 — DEFINITIONS

3. ANNUAL DISTRIBUTABLE NET PROFIT

“Annual Distributable Net Profit” or “ADNP” means the amount determined for the applicable annual accounting period after applying the Company's applicable accounting policies and taking into account legitimate business expenses, applicable taxes, statutory obligations, provisions, losses, returns, refunds, chargebacks, accounting corrections and other amounts properly required to determine the amount available for the Program.

ADNP is a Program-defined contractual calculation concept based upon the Company's accounting records.

ADNP is not automatically synonymous with every possible accounting or tax definition of “net profit” under every legal or accounting context.

The final methodology shall be applied consistently with the Company's applicable accounting records, applicable accounting requirements and professional accounting/tax advice where required.

4. ADNP DOES NOT MEAN

ADNP shall not be treated as:

  • gross sales;

  • gross turnover;

  • gross revenue before expenses;

  • total order value;

  • cash balance;

  • bank balance;

  • total assets;

  • inventory value;

  • EBITDA;

  • customer collections;

  • gross margin;

  • or any other gross financial figure.

The Program shall not calculate the Partner Pool merely by taking gross sales and multiplying them by 10%.

5. APPLICABLE PERCENTAGE

The current Applicable Percentage is: 10%

The Applicable Percentage represents the percentage of ADNP allocated collectively to the Program for the relevant calculation period.

A future period may have a different Applicable Percentage where properly established through applicable Program documentation.

A future change does not automatically rewrite a completed and finalised calculation period.

6. ANNUAL PARTNER POOL

The Annual Partner Pool (“APP”) is:

APP = ADNP × Applicable Percentage

For the current Program:

APP = ADNP × 10%

7. QUALIFYING NET REVENUE

“Qualifying Net Revenue” or “QNR” means attributable revenue that remains eligible after application of the applicable written qualification rules, exclusions, deductions, returns, refunds, cancellations, chargebacks, fraud adjustments, applicable discounts, applicable tax treatment and other expressly defined adjustments.

QNR is determined at the qualifying transaction level before the contribution methodology is applied.

8. PRODUCT CONTRIBUTION FACTOR

“Product Contribution Factor” or “PCF” means the approved factor applicable to a product, SKU, category or product group for calculating its contribution to the Program.

The PCF is intended to recognise that the commercial contribution of products may differ.

A product's selling price alone does not necessarily represent its contribution to the Company's business.

9. ATTRIBUTABLE CONTRIBUTION SCORE

“ACS” means the verified contribution score attributable to a particular eligible participant.

The general formula is:

ACSᵢ = Σ (QNR × PCF)

where:

  • ACSᵢ = contribution score of participant i;

  • QNR = qualifying net revenue attributable to the participant; and

  • PCF = applicable Product Contribution Factor.

A detailed approved schedule may provide additional objectively measurable factors where necessary.

10. TOTAL ATTRIBUTABLE CONTRIBUTION SCORE

“TACS” means the combined eligible contribution score of all participants included in the applicable calculation period.

The general formula is:

TACS = ACS₁ + ACS₂ + ACS₃ + ... + ACSₙ

Only eligible, verified and qualifying contribution shall be included.

11. INDIVIDUAL PARTNER SHARE

The general formula is:

Individual Partner Share = APP × (ACSᵢ ÷ TACS)

Therefore:

Annual Partner Pool × Participant Contribution Percentage = Participant Allocation

PART 4 — ADNP CALCULATION FRAMEWORK

12. ACCOUNTING PERIOD

The Company shall determine the applicable annual accounting period for the Program.

The relevant period shall be communicated through the applicable Program documentation.

The Company may use an accounting year consistent with its books and applicable accounting/tax requirements.

13. STARTING FINANCIAL INFORMATION

The ADNP calculation shall begin with the Company's applicable accounting records for the relevant period.

Depending upon the Company's accounting structure, the calculation may take into account:

  • recognised revenue;

  • sales;

  • returns;

  • refunds;

  • cancellations;

  • cost of goods;

  • inventory-related costs;

  • operating expenses;

  • employee/personnel costs;

  • manufacturing/procurement costs;

  • logistics;

  • technology costs;

  • platform charges;

  • payment-processing costs;

  • professional fees;

  • advertising and marketing;

  • statutory dues;

  • applicable taxes;

  • provisions;

  • depreciation/amortisation where applicable;

  • bad debts where appropriately recognised;

  • accounting adjustments;

  • prior-period corrections; and

  • other legitimate business expenses.

14. LEGITIMATE BUSINESS EXPENSES

Legitimate business expenses may be reflected in determining ADNP where they are properly recognised in the Company's accounting records and are applicable to the relevant accounting period.

Examples may include:

  • manufacturing;

  • procurement;

  • inventory;

  • employee costs;

  • warehouse costs;

  • logistics;

  • technology;

  • software;

  • platform fees;

  • payment processing;

  • professional services;

  • legal services;

  • accounting services;

  • tax compliance;

  • advertising;

  • marketing;

  • utilities;

  • operating expenses;

  • depreciation/amortisation where applicable; and

  • other legitimate business expenses.

The Company shall not create an arbitrary expense solely for the purpose of reducing a participant's allocation.

15. TAXES AND STATUTORY AMOUNTS

Applicable taxes, statutory dues and legally required amounts may be reflected in the determination of ADNP according to the Company's applicable accounting and tax treatment.

This Policy does not independently determine the Company's tax liability.

Tax treatment shall be determined according to applicable law and professional tax/accounting advice where required.

16. RETURNS, REFUNDS AND CHARGEBACKS

Returns, refunds and chargebacks may affect:

  1. Company financial results;

  2. ADNP;

  3. QNR;

  4. ACS;

  5. TACS; and

  6. a participant's final allocation.

The same transaction shall not be treated as permanently qualifying merely because it was initially attributed.

17. ACCOUNTING CORRECTIONS

Where a material accounting error is identified, the Company may correct the relevant accounting record in accordance with applicable accounting practices.

A correction may result in:

  • an increase in ADNP;

  • a decrease in ADNP;

  • an increase in APP;

  • a decrease in APP;

  • an increase in a participant's calculated allocation;

  • a decrease in a participant's calculated allocation; or

  • another necessary reconciliation.

PART 5 — ZERO OR NEGATIVE ADNP

18. ZERO ADNP

If: ADNP = ₹0

then: APP = ₹0

No Program allocation shall be generated from the zero ADNP.

19. NEGATIVE ADNP

If the applicable annual result produces a negative ADNP: APP = ₹0

The Program does not create a negative amount automatically payable by participants.

A participant does not become personally liable merely because the Company's annual result is negative.

This does not prevent lawful recovery of an amount independently owed because of:

  • fraud;

  • breach;

  • unlawful conduct;

  • mistaken payment;

  • tax adjustment;

  • contractual debt; or

  • another lawful basis.

PART 6 — ATTRIBUTION ARCHITECTURE

20. ATTRIBUTION PRINCIPLE

Participant performance must be attributable through an approved tracking method.

The intended architecture is:

Specific Account Owner

↓

Unique Participant ID

↓

Shopify Collabs / Approved Tracking System

↓

Affiliate Link / Discount Code / Approved Attribution Method

↓

Customer Order

↓

Order Attribution

↓

Product / SKU / Quantity / Selling Value

↓

Return / Refund / Cancellation / Chargeback Verification

↓

Fraud and Qualification Review

↓

QNR

↓

PCF

↓

ACS

21. SHOPIFY COLLABS

MyCloth India may use Shopify Collabs as an operational attribution and tracking system.

Shopify Collabs may be used to assist with:

  • creator identification;

  • participant connection;

  • affiliate links;

  • discount codes;

  • order attribution;

  • sales tracking;

  • reporting;

  • order-level information; and

  • attribution records.

Shopify Collabs does not independently determine:

  • ADNP;

  • Company net profit;

  • APP;

  • PCF;

  • contractual entitlement;

  • tax treatment; or

  • final participant payment.

The final contractual calculation remains governed by the Company's written Program methodology and accounting records.

22. UNIQUE PARTICIPANT ID

Each participant may be assigned a unique identifier.

Examples:

MYC-A001

MYC-A002

MYC-A003

The identifier may connect:

Participant → Account → Tracking Profile → Code/Link → Order → Product → Qualification → Contribution → Payment

PART 7 — ORDER QUALIFICATION

23. QUALIFYING ORDER

A Qualifying Order must satisfy the applicable requirements for:

  1. valid customer purchase;

  2. approved attribution;

  3. valid payment;

  4. absence of prohibited conduct;

  5. absence of required return/refund exclusion;

  6. absence of chargeback;

  7. absence of fraud;

  8. absence of artificial manipulation;

  9. compliance with applicable Program rules; and

  10. any additional written qualification requirements.

24. INVALID OR EXCLUDED ORDERS

An order may be excluded where applicable because it is:

  • cancelled;

  • refunded;

  • returned;

  • charged back;

  • fraudulent;

  • artificially generated;

  • participant-funded;

  • participant-reimbursed;

  • self-funded;

  • improperly attributed;

  • prohibited;

  • unauthorised;

  • manipulated;

  • generated through invalid discount activity;

  • otherwise disqualified under the Fraud Prevention Policy; or

  • otherwise excluded under an applicable written schedule.

25. FAMILY, FRIEND AND RELATED ORDERS

A customer relationship alone shall not automatically determine whether an order qualifies.

However, an order may be excluded where the transaction is:

  • participant-funded;

  • participant-reimbursed;

  • artificially generated;

  • fraudulent;

  • manipulated;

  • created primarily to inflate performance;

  • otherwise prohibited; or

  • otherwise disqualified under the applicable Program rules.

The qualification test shall focus on the actual transaction and applicable written rules.

PART 8 — QUALIFYING NET REVENUE (QNR)

26. QNR CALCULATION

QNR shall be determined according to the then-effective written methodology.

The methodology may take into account:

  • actual selling price;

  • approved discount;

  • applicable tax treatment;

  • refunds;

  • returns;

  • cancellations;

  • chargebacks;

  • invalid transactions;

  • fraud;

  • participant-funded purchases;

  • participant reimbursement;

  • prohibited transactions; and

  • other documented exclusions.

27. CONSISTENCY

The same QNR exclusion methodology should be applied consistently to similarly situated transactions and participants.

A participant shall not be arbitrarily treated differently from another participant without an objective written basis.

PART 9 — PRODUCT CONTRIBUTION FACTOR

28. PRODUCT CONTRIBUTION SCHEDULE

The Company shall maintain, where applicable, an approved Product Contribution Schedule.

The schedule may contain:

Field Description
SKU/Product ID Unique product identifier
Category Product category
Listed Price Published/listed price
Actual Selling Price Actual transaction selling price
Discount Applicable discount
QNR Qualifying Net Revenue
Product Cost Applicable product cost
Direct/Variable Costs Approved applicable costs
Contribution Amount Relevant contribution
PCF Product Contribution Factor
Effective Date Date from which the methodology applies

29. PRODUCT ECONOMICS

The Company may consider objective commercial factors such as:

  • product cost;

  • manufacturing cost;

  • procurement cost;

  • category economics;

  • selling price;

  • discounts;

  • product mix;

  • quantity;

  • direct variable costs; and

  • other objectively measurable factors.

30. SELLING PRICE IS NOT AUTOMATICALLY CONTRIBUTION

A higher selling price does not automatically create proportionately higher Program contribution.

Likewise, a lower-priced product may have a different contribution profile.

The applicable PCF shall be determined under the approved methodology.

31. FUTURE PCF CHANGES

The Company may change PCFs for future transactions or future calculation periods because of:

  • supplier changes;

  • manufacturing costs;

  • procurement costs;

  • logistics;

  • product pricing;

  • discounts;

  • taxes;

  • product category;

  • business economics;

  • product strategy; or

  • other legitimate commercial factors.

A future PCF change shall not automatically rewrite a completed and finalised transaction or calculation period.

PART 10 — CONTRIBUTION SCORE CALCULATION

32. GENERAL ACS FORMULA

The general calculation is:

ACSᵢ = Σ(QNR × PCF)

For each eligible transaction:

Contribution = Qualifying Net Revenue × Applicable PCF

The participant's ACS is the aggregate of eligible transaction contributions.

33. DETAILED CONTRIBUTION METHODOLOGY

Where an approved schedule provides additional factors, the calculation may incorporate objectively measurable variables such as:

  • product;

  • SKU;

  • product category;

  • quantity;

  • QNR;

  • product contribution;

  • selling price;

  • discount;

  • applicable direct costs;

  • approved product factor; and

  • other written measurable factors.

No undisclosed subjective factor shall be inserted merely to change an individual's allocation.

PART 11 — TOTAL CONTRIBUTION SCORE

34. TACS

The Total Attributable Contribution Score is:

TACS = Σ ACS of all eligible participants

Only participants included in the applicable calculation period shall be included.

Participants whose contribution is fully disqualified shall not have invalid contribution included in TACS.

35. ZERO TACS

If:

TACS = 0

there is no performance contribution base upon which to allocate the Partner Pool under the performance formula.

The applicable amount shall be handled according to the then-effective Program schedule and applicable contractual/legal requirements.

No participant shall automatically receive the entire APP merely because TACS is zero unless a written applicable rule expressly provides such treatment.

PART 12 — INDIVIDUAL ALLOCATION

36. PARTICIPANT PERCENTAGE

The participant's allocation percentage is:

Participant Percentage = ACSᵢ ÷ TACS

37. INDIVIDUAL PARTNER SHARE

The individual allocation is:

Individual Partner Share = APP × (ACSᵢ ÷ TACS)

38. FULL EXAMPLE

Assume:

ADNP = ₹1,00,00,000

Applicable Percentage: 10%

Therefore:

APP = ₹10,00,000

Assume:

Participant ACS
Partner A 40,000
Partner B 25,000
Partner C 35,000
TACS 1,00,000

Therefore:

Partner A

40,000 ÷ 1,00,000 = 40%

₹10,00,000 × 40%

= ₹4,00,000

Partner B

25,000 ÷ 1,00,000 = 25%

₹10,00,000 × 25%

= ₹2,50,000

Partner C

35,000 ÷ 1,00,000 = 35%

₹10,00,000 × 35%

= ₹3,50,000

Total :

₹4,00,000 + ₹2,50,000 + ₹3,50,000

= ₹10,00,000

The total equals the applicable Partner Pool, subject to permitted rounding.

PART 13 — ROUNDING

39. ROUNDING PRINCIPLE

Calculations may produce fractional currency amounts.

The Company may apply an approved rounding methodology consistent with accounting and payment requirements.

Rounding shall be applied consistently.

40. AGGREGATE ROUNDING

Where individual rounded amounts do not mathematically sum to the exact APP because of rounding, the Company may apply a documented reconciliation method to ensure that the final participant allocation ledger reconciles appropriately.

The method shall not be used arbitrarily to favour a participant.

PART 14 — FOUR-LEDGER SYSTEM

41. SALES LEDGER

The Sales Ledger records attributable commercial activity.

It may include:

  • order ID;

  • date;

  • participant ID;

  • tracking source;

  • product/SKU;

  • quantity;

  • selling price;

  • discount;

  • customer order status;

  • return status;

  • refund status; and

  • attribution status.

42. QUALIFICATION LEDGER

The Qualification Ledger records whether each transaction qualifies.

It may record:

  • qualifying;

  • excluded;

  • pending review;

  • returned;

  • refunded;

  • cancelled;

  • charged back;

  • fraudulent;

  • artificially generated;

  • participant-funded;

  • participant-reimbursed;

  • improperly attributed; or

  • another documented exclusion.

Where practicable, an exclusion reason shall be recorded.

43. PROFIT LEDGER

The Profit Ledger records the financial methodology used to determine ADNP.

It may include:

  • applicable revenue;

  • expenses;

  • cost of goods;

  • operating expenses;

  • statutory amounts;

  • taxes;

  • adjustments;

  • provisions;

  • returns;

  • refunds;

  • chargebacks;

  • corrections; and

  • final ADNP.

44. PARTNER DISTRIBUTION LEDGER

The Partner Distribution Ledger records:

  • participant ID;

  • ACS;

  • TACS;

  • participant percentage;

  • APP;

  • gross calculated share;

  • applicable adjustments;

  • withholding;

  • net payable amount; and

  • payment status.

PART 15 — RECONCILIATION

45. RECORD RECONCILIATION

The Company shall seek to reconcile:

Sales Ledger with Qualification Ledger with Profit Ledger with Partner Distribution Ledger

The purpose is to ensure that the final allocation is supported by the underlying records.

46. RECONCILIATION PRINCIPLE

A participant's final allocation should be capable of being traced through the following chain:

    1. Participant ID
    2. Tracking Method
    3. Order ID
    4. SKU
    5. Quantity
    6. Selling Price
    7. Discount
    8. Return/Refund Status
    9. Qualifying Status
    10. QNR
    11. PCF
    12. ACS
    13. TACS
    14. Participant Percentage
    15. APP
    16. Calculated Allocation
    17. Applicable Tax/Withholding
    18. Net Payment

PART 16 — POST-PERIOD ADJUSTMENTS

47. PURPOSE

A transaction may appear valid when initially recorded and later become invalid because of a later:

  • return;

  • refund;

  • chargeback;

  • fraud finding;

  • accounting correction; or

  • other qualifying adjustment.

The Program therefore permits documented post-period adjustments.

48. POST-PERIOD ADJUSTMENT MECHANISM

Where a previous allocation has been affected by a later adjustment, the Company may, where legally permitted:

  1. adjust the next applicable participant allocation;

  2. adjust the relevant contribution score;

  3. recover an overpayment;

  4. offset the amount against a future payment;

  5. issue a corrected calculation statement; or

  6. apply another documented lawful mechanism.

49. NO ARBITRARY RETROACTIVE CHANGE

Post-period adjustments must have an identifiable basis.

The Company shall not use the post-period adjustment mechanism merely to arbitrarily reduce a participant's properly calculated allocation.

PART 17 — ADJUSTMENT EXAMPLES

50. RETURN EXAMPLE

Suppose a participant was initially credited with: ₹20,000 QNR

The order is later returned and the applicable methodology requires exclusion.

The ₹20,000 shall be removed or adjusted according to the applicable calculation schedule.

The corresponding ACS may therefore decrease.

51. CHARGEBACK EXAMPLE

If a previously qualifying transaction is later charged back, the transaction may cease to qualify.

The associated QNR and ACS may be corrected.

52. FRAUD EXAMPLE

If a transaction is later determined to have been fraudulently generated, the Company may:

  • remove the transaction;

  • remove associated QNR;

  • remove associated ACS;

  • recalculate TACS;

  • recalculate participant allocations; and

  • take further action under the Fraud Prevention Policy.

PART 18 — ADVERTISING AND PROMOTIONAL COSTS

53. PARTICIPANT PROMOTION COSTS

Unless expressly agreed otherwise in writing, the Company does not automatically bear a participant's:

  • advertising cost;

  • paid-media cost;

  • production cost;

  • photography cost;

  • video cost;

  • editing cost;

  • internet cost;

  • equipment cost;

  • promotional-material cost; or

  • other account-owner operating expense.

54. COMPANY SUPPORT

The Company may provide promotional or advertising support where it determines that such support is genuinely necessary for a particular commercial situation.

Such support:

  • is not automatic;

  • is not guaranteed;

  • is not an entitlement merely from participation;

  • should be documented;

  • should be approved by an authorised person; and

  • should be recorded appropriately where relevant.

Company support shall not be secretly charged against another participant's allocation.

PART 19 — NO PREFERENTIAL ACCOUNTING

55. OBJECTIVE METHODOLOGY

The calculation methodology shall be based on objective written criteria.

A participant's allocation shall not be increased merely because of:

  • friendship;

  • family relationship;

  • personal relationship;

  • popularity;

  • follower count;

  • social status;

  • management preference;

  • personal influence; or

  • other subjective preference.

56. EQUAL APPLICATION OF RULES

Similarly situated transactions should be subject to the same applicable methodology.

Different treatment must have an identifiable objective basis under the written Program framework.

PART 20 — MANAGEMENT DISCRETION

57. PERMITTED MANAGEMENT DISCRETION

Management may exercise reasonable discretion concerning:

  • accounting administration;

  • fraud investigation;

  • technical systems;

  • product classification;

  • operational procedures;

  • verification;

  • compliance;

  • correction of demonstrable errors;

  • future product methodology; and

  • future Program administration.

58. FORMULA OVER DISCRETION

Management discretion operates:

WITHIN THE WRITTEN FORMULA

and does not operate:

IN PLACE OF THE WRITTEN FORMULA.

No individual manager should arbitrarily determine a participant's final allocation outside the applicable methodology.

PART 21 — ACCOUNTING REVIEW

59. INTERNAL REVIEW

Before finalising an annual Partner Pool, the Company may perform an internal review of:

  1. annual financial records;

  2. ADNP;

  3. returns;

  4. refunds;

  5. chargebacks;

  6. accounting corrections;

  7. participant attribution;

  8. qualification records;

  9. ACS;

  10. TACS;

  11. tax/withholding requirements; and

  12. payment records.

60. PROFESSIONAL ACCOUNTING REVIEW

The Company may appoint a qualified professional, including a Chartered Accountant or other appropriate professional adviser, to review:

  • ADNP;

  • accounting treatment;

  • tax treatment;

  • statutory obligations;

  • Partner Pool calculation;

  • reconciliation;

  • participant distribution; or

  • other Program financial matters.

61. PROFESSIONAL REVIEW DOES NOT CHANGE THE FORMULA

A professional review is intended to verify or assist with proper application of the methodology.

It does not authorise an arbitrary change to the written formula.

PART 22 — PARTICIPANT CALCULATION INFORMATION

62. PARTICIPANT STATEMENT

Where appropriate, the Company may provide an annual or periodic participant calculation statement.

The statement may include:

    1. Participant ID
    2. Calculation Period
    3. Attributed Orders
    4. Qualifying Orders
    5. Excluded Orders
    6. Qualifying Net Revenue
    7. ACS
    8. TACS
    9. Participant Percentage
    10. Annual Partner Pool
    11. Calculated Gross Allocation
    12. Applicable Withholding
    13. Net Payable Amount

63. CONFIDENTIALITY OF OTHER PARTICIPANTS

A participant's calculation information does not create an automatic right to obtain:

  • another participant's personal information;

  • another participant's private account details;

  • another participant's tax information;

  • another participant's bank information;

  • another participant's confidential commercial information; or

  • other protected information.

The Company may provide sufficient information to explain the participant's own calculation while protecting confidential information.

PART 23 — TAX AND WITHHOLDING

64. TAX STATUS

The amount calculated under this Policy may be subject to applicable tax treatment.

The actual treatment may depend upon:

  • participant status;

  • residency;

  • nature of the payment;

  • applicable law;

  • GST treatment where applicable;

  • TDS/withholding requirements;

  • documentation; and

  • professional tax advice.

65. WITHHOLDING

Where applicable law requires withholding, the Company may deduct the required amount before payment.

The participant shall receive the applicable payment/tax documentation required under law.

66. TAX IS NOT AN ADDITIONAL PARTNER POOL EXPENSE

Tax withholding from a participant's payment shall be treated according to applicable law and the applicable payment/tax policy.

The Company shall not arbitrarily redefine tax treatment merely to change the contractual allocation formula.

PART 24 — PAYMENT READINESS

67. CONDITIONS BEFORE PAYMENT

A calculated amount shall become payment-ready only after applicable:

  1. financial finalisation;

  2. transaction verification;

  3. fraud review;

  4. return/refund review;

  5. accounting reconciliation;

  6. tax/withholding review;

  7. identity verification where required;

  8. payment-detail verification; and

  9. other contractual requirements.

68. PAYMENT RECORD

The Company should maintain a payment record containing, where applicable:

  • participant ID;

  • approved amount;

  • deductions/withholding;

  • net amount;

  • payment date;

  • payment method;

  • transaction/reference number; and

  • payment status.

PART 25 — FRAUD AND MANIPULATION CONTROLS

69. PROHIBITED MANIPULATION

The following may result in exclusion or further action:

  • fake orders;

  • fake customers;

  • participant-funded purchases;

  • participant reimbursement;

  • fraudulent traffic;

  • stolen payment instruments;

  • artificial transactions;

  • attribution manipulation;

  • coupon manipulation;

  • affiliate manipulation;

  • automated fraudulent activity;

  • false customer identities;

  • coordinated inflation of performance; or

  • other conduct intended to improperly increase Program allocation.

70. FRAUD REVIEW

The Company may review:

  • order records;

  • payment status;

  • customer patterns;

  • account patterns;

  • attribution records;

  • tracking records;

  • refunds;

  • chargebacks;

  • device/system indicators where lawfully available;

  • participant explanations; and

  • other relevant evidence.

71. PENDING INVESTIGATION

Where reasonably necessary, a disputed amount may be placed on temporary hold while a genuine fraud, accounting or compliance investigation is completed.

The Company shall seek to complete investigations reasonably and shall not use an investigation as a pretext for arbitrary withholding.

PART 26 — ERRORS AND CORRECTIONS

72. COMPANY ERROR

If the Company identifies a demonstrable calculation error, the Company may correct it.

The correction may affect:

  • QNR;

  • PCF;

  • ACS;

  • TACS;

  • APP;

  • participant allocation;

  • withholding; or

  • payment.

73. OVERPAYMENT

If a participant receives an amount greater than the amount lawfully due because of a demonstrable error, fraud, incorrect attribution or another lawful basis, the Company may seek correction or recovery in accordance with the applicable agreement and law.

74. UNDERPAYMENT

If a participant was underpaid because of a demonstrable calculation or payment error, the Company may correct the amount and make the applicable additional payment, subject to verification and applicable law.

PART 27 — FINANCIAL GOVERNANCE

75. NO SECRET ALLOCATION

The Company shall not create an undisclosed participant allocation mechanism that contradicts the written Program formula.

76. NO SECRET DEDUCTIONS

A participant's allocation shall not be reduced through an undisclosed deduction.

Any deduction affecting the calculation shall have a documented basis in:

  • the applicable accounting methodology;

  • the applicable financial schedule;

  • the participant agreement;

  • tax/statutory requirements; or

  • another expressly applicable written rule.

77. COMPANY-LEVEL EXPENSES

Company-level expenses relevant to ADNP may affect the collective Partner Pool because ADNP is calculated after applicable business expenses and other required accounting adjustments.

However, a Company-level expense shall not automatically be deducted directly from an individual participant's attributable sales unless the written methodology expressly provides for that treatment.

PART 28 — PRODUCT-LEVEL COSTS

78. PRODUCT CONTRIBUTION VERSUS COMPANY PROFIT

Product contribution methodology and ADNP are separate calculation stages.

The structure is:

Participant Attribution

→ QNR

→ PCF

→ ACS

while:

Company Financial Records

→ ADNP

→ APP

The two calculation systems interact only through the final allocation formula.

79. NO DOUBLE COUNTING

The Company shall seek to avoid counting the same adjustment twice.

For example, an amount already excluded at the QNR stage should not automatically be excluded again from ACS without an applicable methodological basis.

Likewise, an expense reflected in ADNP should not automatically be deducted again from an individual's QNR unless expressly required by the written methodology.

PART 29 — ANNUAL CALCULATION WORKFLOW

80. OFFICIAL WORKFLOW

The annual calculation should generally follow:

STEP 1 — CLOSE THE ACCOUNTING PERIOD

Determine the applicable annual accounting period.

STEP 2 — CLOSE SALES DATA

Compile attributable transaction records.

STEP 3 — VERIFY ATTRIBUTION

Match orders to participant identifiers, links, codes or approved tracking methods.

STEP 4 — APPLY ORDER QUALIFICATION

Remove or flag invalid, cancelled, refunded, returned, charged-back, fraudulent or otherwise excluded transactions.

STEP 5 — CALCULATE QNR

Determine Qualifying Net Revenue.

STEP 6 — APPLY PCF

Apply the applicable Product Contribution Factor.

STEP 7 — CALCULATE ACS

Calculate each participant's contribution score.

STEP 8 — CALCULATE TACS

Aggregate eligible participant contribution scores.

STEP 9 — FINALISE ADNP

Determine Annual Distributable Net Profit from the Company's accounting records.

STEP 10 — CALCULATE APP

Apply:

APP = ADNP × 10%

STEP 11 — CALCULATE INDIVIDUAL ALLOCATIONS

Apply:

Individual Partner Share = APP × (ACSᵢ ÷ TACS)

STEP 12 — APPLY ROUNDING

Apply the approved rounding methodology.

STEP 13 — TAX / WITHHOLDING REVIEW

Apply legally required withholding and statutory treatment.

STEP 14 — FINAL RECONCILIATION

Reconcile the four principal ledgers.

STEP 15 — PAYMENT AUTHORISATION

Authorise payment after applicable verification.

STEP 16 — PAYMENT

Make payment through the approved payment method.

STEP 17 — RETAIN RECORDS

Maintain the required accounting and Program records.

PART 30 — ILLUSTRATIVE FULL EXAMPLE

81. EXAMPLE

Assume the following annual financial position:

Annual Distributable Net Profit:

₹2,00,00,000

Applicable Percentage: 10%

Therefore:

APP = ₹2,00,00,000 × 10%

APP = ₹20,00,000

Suppose three participants have the following verified contribution scores:

Participant ACS
A 50,000
B 30,000
C 20,000
TACS 1,00,000

 

Participant A:

50,000 ÷ 1,00,000 = 50%

₹20,00,000 × 50%

= ₹10,00,000

Participant B:

30,000 ÷ 1,00,000 = 30%

₹20,00,000 × 30%

= ₹6,00,000

Participant C:

20,000 ÷ 1,00,000 = 20%

₹20,00,000 × 20%

= ₹4,00,000

Total: ₹20,00,000

This example demonstrates the methodology only and does not constitute a guarantee of any particular participant payment.

PART 31 — IMPORTANT DISTINCTION BETWEEN SALES AND PROFIT SHARE

82. ATTRIBUTED SALES DO NOT EQUAL PROFIT SHARE

A participant may generate substantial attributable sales and still receive a lower amount than expected because:

  • ADNP may be lower;

  • product contribution may differ;

  • returns may reduce QNR;

  • refunds may reduce QNR;

  • chargebacks may reduce QNR;

  • invalid transactions may be excluded;

  • other participants may have higher ACS;

  • applicable taxes/withholding may apply; or

  • the Company may have a zero or negative ADNP.

The Program is therefore a profit-share allocation model, not a fixed commission model unless a separate written agreement expressly creates a different arrangement.

PART 32 — NO GUARANTEE

83. NO GUARANTEED PAYMENT

This Policy does not guarantee:

  • sales;

  • orders;

  • customers;

  • ACS;

  • APP;

  • profit;

  • annual allocation;

  • minimum payment;

  • continued participation; or

  • any particular financial outcome.

A participant may receive: ₹0

PART 33 — ACCOUNTING AND LEGAL SAFEGUARDS

84. APPLICABLE LAW

This Policy shall be administered subject to applicable Indian law and any other mandatory law applicable to the relevant transaction, participant or activity.

85. PROFESSIONAL ADVICE

The Company may obtain advice from:

  • Chartered Accountants;

  • tax professionals;

  • lawyers;

  • auditors;

  • financial professionals;

  • technology professionals;

  • cybersecurity professionals; and

  • other qualified advisers.

Where applicable law requires professional treatment, the Company shall follow the relevant legal/accounting requirements.

86. NO CONTRACTUAL OVERRIDE OF LAW

Nothing in this Policy shall be interpreted as permitting the Company or a participant to:

  • avoid tax unlawfully;

  • conceal income;

  • falsify accounting records;

  • manipulate statutory records;

  • evade regulatory requirements;

  • misrepresent financial information; or

  • otherwise violate applicable law.

PART 34 — RECORD RETENTION

87. PROGRAM RECORDS

The Company may maintain relevant records including:

  • participant records;

  • attribution records;

  • order records;

  • qualification records;

  • product schedules;

  • PCF records;

  • accounting records;

  • ADNP calculations;

  • APP calculations;

  • ACS calculations;

  • TACS calculations;

  • distribution records;

  • tax records;

  • payment records;

  • adjustment records; and

  • dispute records.

88. RETENTION PERIOD

Records shall be retained for the period required by:

  • applicable law;

  • accounting requirements;

  • tax requirements;

  • contractual obligations;

  • dispute requirements;

  • fraud-prevention requirements; or

  • the Company's documented record-retention policy.

PART 35 — PARTICIPANT CALCULATION REVIEW

89. CALCULATION QUERY

A participant who believes their calculation contains an error may submit a written calculation query.

The query should include:

  1. Participant ID;

  2. applicable calculation period;

  3. relevant order ID(s), if available;

  4. disputed amount;

  5. reason for dispute;

  6. supporting evidence; and

  7. requested correction.

90. REVIEW PROCESS

The Company may review:

  • attribution;

  • qualification;

  • QNR;

  • PCF;

  • ACS;

  • TACS;

  • APP;

  • withholding;

  • payment records; and

  • applicable accounting adjustments.

The Company may correct a demonstrable error.

PART 36 — NO AUTOMATIC ACCESS TO OTHER PARTICIPANTS' DATA

91. CONFIDENTIALITY

A calculation review does not entitle a participant to receive another participant's:

  • identity information;

  • private account information;

  • customer information;

  • tax information;

  • bank details;

  • private performance records; or

  • confidential business information.

The Company may provide sufficient information to explain the participant's own calculation while preserving lawful confidentiality.

PART 37 — FUTURE POLICY CHANGES

92. FUTURE PERIODS

The Company may modify this Policy for future calculation periods because of:

  • changes in accounting requirements;

  • tax requirements;

  • statutory changes;

  • product economics;

  • technology;

  • fraud controls;

  • platform changes;

  • business restructuring;

  • changes in the Program; or

  • other legitimate commercial requirements.

93. COMPLETED PERIODS

A future Policy amendment shall not automatically rewrite a completed and finalised calculation period.

Any retrospective correction must have an identifiable contractual, accounting, legal or factual basis.

PART 38 — POLICY GOVERNANCE

94. POLICY OWNER

The Policy is administered by:

KRISHNA CREATOR VENTURE

in connection with the:

MYCLOTH INDIA brand.

95. ACCOUNTING RESPONSIBILITY

The Company shall maintain responsibility for:

  • accounting administration;

  • calculation records;

  • financial reconciliation;

  • applicable tax/statutory compliance;

  • payment records; and

  • Program financial governance.

The Company may delegate operational tasks to authorised personnel or professional advisers.

96. NO INDIVIDUAL DISCRETION TO ALTER FINAL FORMULA

No individual employee, manager, representative, creator manager or other person may privately alter the contractual calculation formula for a participant without proper authority and documented basis.

PART 39 — ORDER OF PRECEDENCE

97. DOCUMENT PRECEDENCE

Where this Policy conflicts with another Program document, the following general hierarchy shall apply:

  1. mandatory applicable law;

  2. participant-specific definitive agreement;

  3. expressly incorporated participant-specific financial schedule;

  4. expressly incorporated financial/accounting schedule;

  5. applicable Program policy;

  6. Master Program Terms & Conditions;

  7. general promotional or informational material.

Where a conflict concerns accounting methodology that is expressly incorporated into a participant-specific agreement, the participant-specific provision shall apply to the extent legally valid.

PART 40 — CORE FORMULA SUMMARY

98. OFFICIAL FORMULA

STEP 1

ADNP

Annual Distributable Net Profit

↓

STEP 2

APP = ADNP × 10%

Annual Partner Pool

↓

STEP 3

ACSᵢ = Σ(QNR × PCF)

Individual Contribution Score

↓

STEP 4

TACS = Σ ACS

Total Contribution Score

↓

STEP 5

Individual Partner Share = APP × (ACSᵢ ÷ TACS)

Final calculated allocation before applicable withholding/tax treatment.

PART 41 — OFFICIAL AUDIT TRAIL

99. MINIMUM TRACEABILITY CHAIN

The Program's financial calculation should be capable of tracing:

    1. Participant
    2. Participant ID
    3. Social Media Account
    4. Shopify Collabs / Approved Attribution
    5. Affiliate Link / Discount Code
    6. Order ID
    7. SKU
    8. Quantity
    9. Actual Selling Price
    10. Discount
    11. Return/Refund/Chargeback Status
    12. Qualification Status
    13. QNR
    14. PCF
    15. ACS
    16. TACS
    17. APP
    18. Individual Allocation
    19. Tax / Withholding
    20. Net Payment

This chain is intended to reduce calculation disputes and improve transparency.

PART 42 — PROGRAM PHILOSOPHY

The financial model is designed around the principle:

BUILD WITH US. GROW WITH US.

The Program seeks to connect long-term participant contribution with a documented collective annual allocation mechanism.

The objective is not merely to count social-media activity.

The objective is to recognise verified commercial contribution within the Company's actual annual financial performance and the applicable written methodology.

PART 43 — FINAL ACCOUNTING POLICY STATEMENT

101. FINAL POLICY STATEMENT

The Parties acknowledge that:

    1. the Program's current Applicable Percentage is 10%;

    2. the 10% is one collective annual Partner Pool;

    3. the Partner Pool is calculated from ADNP;

    4. ADNP is determined from the Company's applicable accounting records and methodology;

    5. gross sales are not automatically equal to ADNP;

    6. participant attribution is determined through approved tracking methods;

    7. Shopify Collabs may be used as an operational tracking system;

    8. Shopify Collabs does not independently determine ADNP or contractual profit share;

    9. qualifying transactions are determined under written rules;

    10. QNR is determined after applicable exclusions and adjustments;

    11. PCF is applied according to the approved Product Contribution Schedule;

    12. ACS is generally calculated as Σ(QNR × PCF);

    13. TACS is the combined eligible ACS;

    14. an individual's allocation is generally APP × (ACSᵢ ÷ TACS);

    15. returns, refunds, chargebacks and fraud may require post-period adjustments;

    16. accounting errors may be corrected;

    17. applicable tax and withholding requirements may affect payment;

    18. participant allocations shall not be determined by arbitrary personal preference;

    19. management discretion operates within the written methodology;

    20. the Program does not guarantee any particular payment; and

    21. all calculations remain subject to applicable law.

PART 44 — OFFICIAL ACKNOWLEDGEMENT

102. ACKNOWLEDGEMENT

By participating in the Program, the Participant acknowledges that they understand:

  1. The MYCLOTH INDIA ARMY — LONG-TERM SOCIAL MEDIA ACCOUNT OWNER & BRAND PARTNER PROGRAM operates a collective 10% LOYALTY ANNUAL NET PROFIT SHARE model.
  2. The 10% is calculated as a collective annual Partner Pool from the applicable Annual Distributable Net Profit.
  3. My individual allocation, if any, is determined through verified attributable performance, Qualifying Net Revenue, Product Contribution Factors, Contribution Scores, the Total Contribution Score and the applicable Partner Pool.
  4. I understand that attributable sales do not automatically equal my profit-share amount.
  5. I understand that returns, refunds, cancellations, chargebacks, fraud, accounting adjustments, taxes and other applicable factors may affect the calculation.
  6. I understand that Shopify Collabs may be used to track attribution but does not itself determine MyCloth India's annual profit or my final contractual allocation.
  7. I understand that I may receive ₹0.
  8. I understand that this Policy does not provide equity, ownership, employment, partnership ownership, a guaranteed return or guaranteed income.
  9. I agree that the Program shall be administered according to the applicable written methodology, accounting records, contractual documents, statutory requirements and applicable law.

PART 45 — OFFICIAL DOCUMENT CONTROL

Document Name:

MYCLOTH INDIA ARMY — OFFICIAL ANNUAL LOYALTY NET PROFIT SHARE CALCULATION & ACCOUNTING POLICY

Program:

MYCLOTH INDIA ARMY — LONG-TERM SOCIAL MEDIA ACCOUNT OWNER & BRAND PARTNER PROGRAM

Commercial Model:

10% LOYALTY ANNUAL NET PROFIT SHARE

Brand: MYCLOTH INDIA

Website:  MyCloth.in

Version: 1.0

Effective Date: 18 September 2026

Last Updated: 18 September 2026

Policy Status:

Official Program Policy

FINAL STATEMENT

This Policy forms part of the financial and operational framework of:

MYCLOTH INDIA ARMY

LONG-TERM SOCIAL MEDIA ACCOUNT OWNER & BRAND PARTNER PROGRAM

The Program's current commercial model is:

10% LOYALTY ANNUAL NET PROFIT SHARE

The 10% is a single collective annual allocation pool, not 10% for every participant.

The allocation methodology is based upon:

ADNP → APP → QNR → PCF → ACS → TACS → INDIVIDUAL SHARE

The intended governance principle is:

VERIFIED PERFORMANCE + OBJECTIVE CONTRIBUTION + ACCOUNTING TRANSPARENCY + CONSISTENT APPLICATION

The Company shall administer this Policy together with the Master Terms, participant-specific agreement, applicable schedules, accounting records, tax/statutory requirements, fraud-prevention controls and applicable law.

Nothing in this Policy shall be interpreted as excluding any right, remedy, liability or statutory protection that cannot lawfully be excluded.

END OF OFFICIAL ANNUAL LOYALTY NET PROFIT SHARE CALCULATION & ACCOUNTING POLICY