Sustainable Governance

Integrity Management Promotion Team 

To establish sound integrity management, an Integrity Management Promotion Team has been established, equipped with sufficient resources and appropriate personnel. This team is responsible for formulating and implementing relevant prevention plans, and reporting regularly to the Board of Directors. The Integrity Management Principles and Regulations pertinent to the Promotion Team are disclosed on Merry's corporate website and employee website. Furthermore, the audit department shall supervise or audit the outcomes and measures of the Integrity Management initiative to ensure its effectiveness.

Integrity Management Implementation Outcomes

All senior management, supervisors, and employees across the Taiwan Headquarters and all plant locations are required to sign "MERRY's Business Conduct and Ethics Code". Additionally, new employees at the Taiwan headquarters and all plant locations receive in-person training courses related to Integrity Management upon onboarding, ensuring their full understanding of MERRY's commitment to promoting Integrity Management, preventing dishonest conduct, and steadfastly upholding the highest standards of legal and ethical behavior. 

Merry's new employees are required to participate in foundational regulatory training courses pertaining to Integrity Management, designed to ensure their comprehensive understanding of the company's unwavering commitment and established policies regarding Integrity Management, and to proactively prevent the occurrence of dishonest conduct. In 2024, five distinct training sessions addressing Integrity Management topics were conducted for personnel stationed at the Taiwan Headquarters. The curriculum encompassed "Discrimination and Harassment," "Political Conduct and Donations/ Charitable Contributions and Sponsorships," "Guidance on Gift Acceptance," "Insider Trading," and "Anti-Corruption, Anti-Bribery, and Anti-Money Laundering Awareness."Furthermore, the company's responsible departments and Corporate Governance Units will periodically disseminate information pertaining to Integrity Management to all personnel and directors via electronic mail. For detailed annual implementation results of the Integrity Management Promotion Team, please refer to the Company Website.

Integrity Management Training

Corruption 0 Tolerance

The Integrity Management Promotion Team consistently promotes the company's Anti-Corruption and Anti-Bribery regulations. Merry has established its Anti-Corruption, Anti-Bribery, and Anti-Money Laundering Policy, constructing corporate governance standards and risk management mechanisms. Merry officially declares a zero-tolerance principle towards corruption and bribery. Furthermore, in response to the increasing international emphasis on anti-money laundering, and to prevent risks associated with money laundering, tax evasion, and sanctions violations, Merry has formulated an Anti-Money Laundering Policy. This policy safeguards Merry from losses incurred due to involvement in money laundering crimes and prevents potential harm to public welfare, demonstrating Merry's determination to prevent money laundering crimes, uphold the core value of sustainable operation, and fulfilling its responsibilities as a global corporate citizen.

Whistleblowing and Protection Mechanism

Regarding dishonest conduct, such as violations of ethical behavior or illegal acts, MERRY has established relevant measures within its "Integrity Management Operating Procedures." These procedures explicitly stipulate anti-bribery, anti-corruption, and the prohibition of facilitation payments. The company provides reporting channels for whistleblowing on dishonest or improper conduct, with members of the Integrity Management Promotion Team responsible for receiving reports from relevant interested parties. Concurrently, a written statement is issued committing to protect whistleblowers from inappropriate treatment as a result of their reports. As of the end of 2024, Merry received a total of 2 reports via its independent Whistleblowing Platform, internal website's independent whistleblowing mailbox, and dedicated hotline. Following investigation by relevant departments, the contents of these reports were determined not to be violations of ethical conduct; therefore, no reports concerning violations of Integrity Management were received.

Group Regulatory Compliance

To ensure that Merry's operations comply with govern[1]mental regulations in all operating locations and the requirements of all clients, the Legal and Patent Department, referencing ISO 19600:2014 Compliance Management Systems, has established relevant compliance management mechanisms for the collection, evaluation, implementation, and monitoring of compliance matters. These matters encompass 282 regulations across 11 major categories: occupational safety and health, labor/social responsibility, information security, energy, environment, medical devices, commercial/Anti-Bribery, finance and taxation, intellectual property, fair trade/anti-trust, and product. Department heads are responsible for ensuring that their internal operational processes comply with these regulations. In 2024, there were no significant violations of relevant regulations resulting in penalties.The definition of a material event references the definition outlined in the 'Taiwan Stock Exchange Corporation Procedures for the Verification and Public Disclosure of Material Information by Listed Securities Companies'. Should an event be identified as a material event and result in a penalty, it must also be disclosed in accordance with applicable regulations on the Market Observation System.

2024 Annual Implementation of Integrity Management Policy: Specific Measures and Plan for Preventing Dishonest Conduct

1. Implement integrity management training courses, structured as thematic recurrent training across 5 sessions, covering: "Discrimination and Harassment", "Political Activities and Donations/ Charitable Contributions and Sponsorships", "Gifts, Meals, Services, and Entertainment", "The Importance of Enterprise Internal Anti-Money Laundering", and "Insider Trading", for a total of 50 minutes. ( Execute 2-5 of these items as geographically required ).
2. To promote and implement integrity management policies, cultivating a corporate culture of integrity among employees. Through internal communications, disseminate anti-corruption, anti-bribery, and anti-money laundering policies, and guidelines for transparent reporting of gift acceptance to all personnel. Additionally, conduct in-person training at general company meetings to raise awareness regarding insider trading and share relevant case studies.
3. Finalize the Integrity Management risk assessment form.
4. The Integrity Management Promotion Team reports its achievements to the Board of Directors at the end of each year. The most recent reporting date was 202 4/12/26, and the Audit Department oversees the implementation results.
5. Suppliers are required to sign a Social Responsibility Commitment, which encompasses integrity conduct clauses such as ethical business
   practices and fair dealing; Periodically review and audit suppliers, requiring them to also conduct integrity conduct audits and establish related requirements for their sub suppliers.
6. Merry's "Code of Business Conduct and Professional Ethics" explicitly defines a conflict of interest prevention policy and provides appropriate channels for disclosure. As of 2024, allnew employees at Taiwan Headquarters, MECL, and MSCS have 100% signed the aforementioned regulations.

Whistleblowing Mechanism Process

1.      Report Intake and Triage

Reported incidents are triaged based on the identity of the subject of the report: cases involving general employees are escalated to their department head; cases involving directors or senior management are escalated 1 to independent directors or supervisors.

2.      Fact-Finding Investigation

The Integrity Management Unit and the receiving supervisor shall immediately ascertain the facts, with assistance from the Compliance Unit when necessary. For anonymous reports, an investigation will also be initiated if there is conclusive evidence; if the evidence is insufficient and the reporter cannot be contacted, the case may be closed.

3.      Resolution and Improvement

Should a violation be confirmed, immediate cessation of the relevant conduct and appropriate disciplinary measures are required. If necessary, the company's rights and interests will be safeguarded through legal procedures. Concurrently, relevant units are tasked with reviewing internal control systems and proposing corrective actions to prevent recurrence of similar incidents.

4.      Document Retention and Reporting

All written documents shall be retained throughout the entire process and preserved for five years (in the event of related litigation, preservation shall continue until the litigation concludes). The Integrity Management Unit shall report whistleblowing incidents, handling procedures, and subsequent improvement measures to the Sustain[1]able Development and Nominating Committee.