When MERRY selects new suppliers, an evaluation team comprising representatives from procurement, quality, R&D, and engineering departments conducts assessments. The evaluation scope encompasses not only basic company information, quality systems, and intellectual property rights as commercial indicators but also thoroughly examines suppliers’ performance in chemical restricted substances management systems, social and environmental sustainability initiatives, labor rights protection, prohibition of conflict minerals, and corporate governance within ESG dimensions. This process identifies risks specific to certain industries or product suppliers. Suppliers must undergo evaluation and receive approval to be included in the qualified supplier list.

MERRY adheres to the RBA Code of Conduct requirements and has formulated the''Supplier Code of Conduct'' based on this standard. It covers regulations related to labor,health and safety, environment, business ethics, and management systems. Suppliers are required not only to comply with the Code but also to observe the laws and regulations of their operating jurisdictions. MERRY also encourages suppliers to require their upstream suppliers to adopt this Code. In 2024, MERRY established the ''Conflict Minerals Policy'' to enforce procurement responsibility. Suppliers must utilize smelters certified by the Responsible Minerals Initiative (RMI) to comply with conflict minerals regulations,uphold corporate responsibility for human rights protection, manage suppliers' due diligence programs on conflict minerals, enhance transparency of supplier information,and ensure the company complies with regulatory and customer requirements.

To fulfill commitments to social and environmental protection responsibilities and to enhance responsible procurement management, the ''Supplier Operational and Environmental Sustainability Commitment'' has been implemented. This document encompasses three key areas: labor conditions, ethical standards,and environmental protection. Suppliers are required to adhere to relevant social responsibilities and prioritize environmental protection, working collaboratively with MERRY to promote a green supply chain.

MERRY declares and commits to not accepting metals sourced from smelters in conflict-affected regions that have not passed responsible sourcing verification. The company also requires suppliers to sign a “Conflict-Free Metal Declaration.ˮ Furthermore, in accordance with the OECD Due Diligence Guidance, we have established conflict minerals management procedures. Using the latest versions of the Conflict Minerals Reporting Templates (CMRT, EMRT) and the MERRY GPMS+MMAP platform system, we conduct investigations into the mineral sources of suppliersʼ materials. By 2025, we aim to complete investigations of 740 suppliers whose products contain minerals such as gold (Au), tantalum (Ta), tin (Sn), and tungsten (W), ensuring 100% traceability to RMI-certified metal smelters.

In 2025, supply will fully meet customer demand with no abnormalities.

MERRY has implemented a third-party financial analysis system—the Rapid Ratings platform—to conduct professional analysis and manage supplier financial risk . In 2025, we expanded third-party supplier outreach risk management to 45 additional suppliers, performing financial health checks (classified into Very Low Risk, Low Risk, Medium Risk, High Risk, and Very High Risk categories) to mitigate operational risks in our partnerships. Survey results indicate that 89% are classified as low risk, 9% as medium risk, and only 2% as high risk (one supplier designated by a client). The one high-risk supplier has been reported to the client, and plans for alternative sourcing are underway. Based on a comprehensive assessment of 2025 financial transactions and service quality, the review concluded that the survey results do not indicate any abnormalities in production or operations.

Conducted by the Information security promotion team in accordance with ISO 27001 standards, establishing five key dimensions (Information Security Policy, Network Architecture, Authority Management/Data Protection, Virus and Vulnerability Protection, and Fundamental Cybersecurity Measures) as assessment criteria. This includes a comprehensive evaluation of industry cybersecurity risks and supply chain disruption risks, effectively identifying and preventing information security incidents originating from suppliers, thereby mitigating the capacity risk impact assumed by MERRY. In 2025, a tiered evaluation (Grades A, B, C) was conducted on 40 Key Suppliers regarding risks associated with access to organizational assets; no anomalies were identified.

MERRY enhances supply chain flexibility and resilience while reducing the carbon footprint impact of transportation. The company actively develops suppliers in the regions where its operational sites are located, maintains supply chain diversity,and implements a localized procurement strategy. Additionally, MERRY continuously monitors whether climate change or unexpected natural disasters in supplier locations might affect production or transportation, ensuring stable supply through short-chain sourcing and local services. In 2025, MERRY will implement a procurement risk diversification strategy to enhance regional responsiveness, expand its plants in Thailand and Vietnam, and provide diverse manufacturing solutions.

MERRYʼs client base consists primarily of major international manufacturers, with electronic components for international brands accounting for as much as 95% of its total. Consequently, electronic materials are predominantly imported. By 2025, the proportion of local procurement at its Chinese facilities had risen to 55%, representing a 7% increase from 2024, while local procurement of non-electronic components reached 99%; at its Southeast Asian facilities, the proportion of local procurement stood at 8.8%. Regarding the supply chain, the company has actively implemented the “China+ˮ policy since 2023, collaborating with strategic suppliers to develop production plans outside of China and accelerate the goal of local procurement. Specifically, local procurement of key mechanical components—plastic parts—at the Thailand facility has increased by more than 10%, while local procurement of wiring harnesses at the Vietnam plant has increased by more than 5%.

Looking ahead, MERRY will assist more structural component suppliers in establishing factories in Southeast Asia, taking supply resilience into consideration. It is anticipated that by 2028, a structural component industrial cluster will begin to take shape, enabling short supply chains and diversified configurations, and establishing a supply chain system that respects the environment and supports sustainable development.

 

During the product project development phase,MERRY's R&D unit, procurement unit, customers, and suppliers collaborate to discuss issues and share technologies,resolving bottlenecks at each stage and assisting suppliers in process and quality optimization.

Furthermore, to collaboratively advance sustainability initiatives,we strengthen connections and interactions with supplier partners through strategic supplier meetings, the Green Academy, and the SCM supplier information exchange platform. This facilitates bidirectional communication and dialogue with supplier partners, enhancing mutual cooperation, tacit understanding, and consensus, thereby continuously progressing towards sustainable development.

In recent years, issues such as environmental protection and carbon reduction have garnered significant attention.MERRY has also been actively collaborating with its key suppliers to work together for a greener planet. For example, we have partnered with suppliers to develop “high-performance recycled engineering plasticsˮ and“general-purpose recycled plastics,ˮ ensuring that even when using recycled plastic materials, we can still provide customers with the exceptional structural strength and durability they require.