2A. Material accounting policies

(a) Revenue recognition

(i) Revenue from Services

The Company recognises revenue primarily from skin and hair related services.

Revenue is recognised upon transfer of control of promised products or services to customers in an amount that
reflects the consideration which the Company expects to receive in exchange for those products or services.

Revenue is measured based on the transaction price, which is the consideration, adjusted for discounts,
and incentives, if any, as specified in the contract with the customer. Revenue also excludes taxes collected
from customers.

Revenue from subsidiaries is recognised based on transaction price which is at arm's length.

Deferred revenue (“contract liability”) is the obligation to transfer services to a customer for which the Company
has received consideration from the customer. If a customer pays consideration before the Company transfers
goods or services to the customer, a contract liability is recognised when the payment is made. Contract
liabilities are recognised as revenue when the Company complete its performance obligation under the contract.

Provision for breakage is recognised when the Company expects to be entitled to a breakage amount in a
contract liability. The Company recognises the expected breakage amount as revenue in proportion to the
pattern of rights exercised by the customer. If the Company does not expect to be entitled to a breakage
amount, it recognises the expected breakage amount as revenue when the likelihood of the customer exercising
its remaining rights becomes remote.

Use of significant judgements in revenue recognition

• The Company's contracts with customers could include promises to transfer multiple products and services
to a customer. The Company assesses the products / services promised in a contract and identifies distinct
performance obligations in the contract. Identification of distinct performance obligation involves judgement
to determine the deliverables and the ability of the customer to benefit independently from such deliverables.

• Judgement is also required to determine the transaction price for the contract. The transaction price
could be either a fixed amount of customer consideration or variable consideration with elements such as
discounts, etc. Any consideration payable to the customer is adjusted to the transaction price, unless it is a
payment for a distinct product or service from the customer.

• The Company exercises judgement in determining whether the performance obligation is satisfied at a
point in time or over a period of time. The Company considers indicators such as how customer consumes
benefits as services are rendered or who controls the asset as it is being created or existence of enforceable
right to payment for performance to date and alternate use of such product or service, transfer of significant
risks and rewards to the customer, acceptance of delivery by the customer, etc.

(ii) Revenue from products

Revenue from sale of products is recognised upon transfer of control to buyers (i.e. on delivery) and when
no uncertainty exists regarding the amount of consideration that will be derived from sale of products and is
recorded net of trade discounts and indirect tax (Goods and Services tax).

(iii) Point award schemes

The fair value of the consideration on sale of goods and services that result in award credits for customers,
under the Company's Point award schemes, is allocated between the goods supplied and services sold, and
the awards credits granted. These award credits have a predetermined life.

The consideration allocated to the award credits is measured by reference to fair value from the standpoint of
the holder and is recognised as revenue on redemption and/or expected redemption after expiration period.

The Company at the end of each reporting period estimates the number of points redeemed and that it expects
will be further redeemed, based on empirical data of redemption /lapse, and revenue is accordingly recognized.

(iv) Interest income or expense

Interest income or expense is accounted basis effective interest rate. The effective interest rate is the rate
that exactly discounts estimated future cash payments or receipts through the expected life of the financial
instrument to the gross carrying amount of the financial assets, or the amortised cost of the financial liability.

However, for financial assets that have become credit-impaired subsequent to initial recognition, interest income
is calculated by applying the effective interest rate to the amortised cost of the financial asset. If the asset is no
longer credit impaired, then the calculation of interest income reverts to the gross basis.

(v) Dividend income

Dividend income is recognised when the right to receive payment is established.

(b) Leases

The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a
lease if the contract conveys the right to control the use of an identified asset for a defined period of time in exchange
for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the
Company assesses whether: (i) the contact involves the use of an identified asset (ii) the Company has substantially
all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right
to direct the use of the asset.

As a lessee, the Company recognises a right of use asset and a lease liability at the lease commencement date. The
cost of the right-of-use asset measured at inception shall comprise of the amount of the initial measurement of the
lease liability adjusted for any lease payments made at or before the commencement date less any lease incentives
received, plus any initial direct costs incurred and an estimate of costs to be incurred by the lessee in dismantling and
removing the underlying asset or restoring the underlying asset or site on which it is located.

The right of use asset is subsequently depreciated using the straight-line method from the commencement date to
the earlier of the end of the useful life of the right of use asset or the end of the lease term. The estimated useful lives
of right of use assets are determined on the same basis as those of property and equipment. In addition, the right of
use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease
liability. Right-of-use assets are tested for impairment whenever there is any indication that their carrying amounts
may not be recoverable. Impairment loss, if any, is recognised in the statement of profit and loss.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company's
incremental borrowing rate. For leases with reasonably similar characteristics, the Company, on a lease by lease
basis, may adopt either the incremental borrowing rate specific to the lease or the incremental borrowing rate for the
portfolio as a whole.

After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and
reduced for lease payments made. In addition, the carrying amount of lease liabilities is re-measured if there is a
modification, a change in the lease term, a change in the ‘in-substance fixed' lease payments or as a result of a rent
review or change in the relevant index or rate.

Lease payments included in the measurement of the lease liability comprise the fixed payments, including in¬
substance fixed payments and lease payments in an optional renewal period if the Company is reasonably certain to
exercise an extension option.

The lease liability is measured at amortised cost using the effective interest method.

The Company has elected not to recognise right of use assets and lease liabilities for short-term leases that have
a lease term of 12 months or less and leases of low-value assets. The Company recognises the lease payments
associated with these leases as an expense on a straight-line basis over the lease term.

(c) Inventories

Raw materials, packing materials, stores, spares and consumables are valued at lower of cost and net realisable
value. However, these items are realisable at cost if the finished products in which they will be used are expected to
be sold at or above cost.

Finished goods, stock-in-trade and work-in-progress are valued at lower of cost and net realisable value.

Cost is ascertained on weighted average method. Cost include the fair value of consideration paid including duties
and taxes (other than those refundable), inward freight, and other expenditure directly attributable to the purchase
and in case of finished products and work-in-progress, it includes appropriate production overheads and duties.

(d) 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, wages etc. and the expected cost of ex-gratia/ bonus are
recognised in the period in which the employee renders the related service. A liability is recognised for the
amount expected to be paid when there is a present legal or constructive obligation to pay this amount as a
result of past service provided by the employee and the obligation can be estimated reliably. The liabilities are
presented as current employee benefit obligations in the balance sheet.

ii) Compensated absences

Compensated absences which are expected to occur within twelve months after the end of the period in which
the employee renders the related services are recognised as undiscounted liability at the balance sheet date.
Compensated absences which are not expected to occur within twelve months after the end of the period in
which the employee renders the related services are recognised as an actuarially determined liability at the
present value of the defined benefit obligation at the balance sheet date.

The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional
right to defer settlement for at least twelve months after the reporting period, regardless of when the actual
settlement is expected to occur.

iii) Post-employment benefits

The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plan is the present value
of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined
benefit obligation is calculated annually by an independent actuary using the projected unit credit method.

Gratuity liability is covered by payment thereof to Gratuity fund. The present value of the defined benefit obligation
is determined by discounting the estimated future cash outflows by reference to market yields at the end of the
reporting period on government bonds that have terms approximating to the terms of the related obligation.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit
obligation and the fair value of plan assets. This cost is included in employee benefit expense in the statement
of profit and loss.

Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions
are recognised in the period in which they occur, directly in other comprehensive income. They are included in
retained earnings in the statement of changes in equity and in the balance sheet.

Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments
are recognised immediately in profit or loss as past service cost.

Defined contribution plans

The Company pays provident fund contributions to publicly administered provident fund as per local regulations.
The Company also makes contribution towards ESIC for eligible employees. The Company has no further
payment obligations once the contributions have been paid. These contributions are accounted for as defined
contribution plans and recognised as employee benefit expense when they are due. Prepaid contributions are
recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.

Employee stock options

The fair value of options granted under the Company's Employee Stock Option Plan is recognised as an employee
benefits expense with a corresponding increase in equity. The total amount to be expensed is determined by
reference to the fair value of the options granted:

• including the impact of any service and nonmarket performance vesting conditions (e.g. profitability, sales
growth targets and remaining an employee of the entity over a specified time period), and

• including the impact of any non-vesting conditions (e.g. the requirement for employees to save or holding
shares for a specific period).

The total expense is recognised over the vesting period, which is the period over which all the specified vesting
conditions are to be satisfied. At the end of each period, the entity revises its estimates of the number of options
that are expected to vest based on the non-market vesting and service conditions. It recognises the impact of
the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity.

iv) Termination benefits

Termination benefits are payable when employment is terminated by the Company before the normal retirement
date, or when an employee accepts voluntary redundancy in exchange for these benefits. The Company
recognises termination benefits at the earlier of the following dates:

(a) when the Company can no longer withdraw the offer of those benefits; and

(b) when the entity recognises costs for a restructuring that is made to encourage voluntary redundancy, the
termination benefits are measured based on the number of employees expected to accept the offer.

Benefits falling due more than 12 months after the end of the reporting period are discounted to present value.