Merchant House International : Amended Corporate Governance Statement

ensuring that the Company reports on its measurable objectives in relation to board diversity and assess annually both the objectives and progress in achieving board diversity.

the establishment of the long-termgoals of the Group and strategic plans to achieve those goals; monitoring the achievement of these goals;

the review of management accounts and reports to monitor the progress of the Group;

the review and adoption of budgets for the financial performance of the Group and monitoring the results on a regular basis to assess performance;

the review and approval of the annual and interim financial reports; nominating and evaluating the external auditor;

approving all significant business transactions; appointing and monitoring senior management;

all remuneration, development and succession issues;

ensuring that the Group has implemented adequate systems of risk management and internal control together with appropriate monitoring of compliance activities;

overseeing the process for making timely and balanced disclosure of all material information that a reasonable person would expect to have a material effect on the price or value of the Company's securities;

ensuring that the Company has a suitably qualified Company Secretary who shall be accountable directly to the Board, through the Chair, on all matters to do with the proper functioning of the Board; and

MERCHANT HOUSE INTERNATIONAL LIMITED

CORPORATE GOVERNANCE STATEMENT

Corporate Governance

The Board of Directors (the Board) of Merchant House International Limited (the Company) is responsible for the corporate governance of the Group. The Board guides and monitors the business and affairs of the Company on behalf onlyof the shareholders by whom they are elected and to whom they are accountable. This statement outlines the main corporate governance practices in place throughout the financial year, which comply with the Australia Securities

Exchange (ASX) Corporate Governance Principles and Recommendations (Fourth Edition), unless otherwise stated.

As required under ASX Listing Rule 4.10.3, the Group makes the following disclosures in relation to each of the Recommendations.

1. Board of Directors

1. Role of the Board and responsibilities

useThe primary role of the Board is to oversee and approve the Group's strategic direction, to oversee the Group's management and business activities and to report to shareholders. The roles and responsibilities of the Board are formalised in written policies.

The Board evaluates these policies on an ongoing basis.

In addition to matters required by law to be approved by the Board, the responsibilities include, but are not limited to:

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ForResponsibility for management of the Group's day to day business activities is delegated to the Executive Chairperson who is accountable to the Board.

(b) Board composition and expertise

The names of the Directors of the Company in office at the date of this statement are set out in the Directors' Report contained within the 2022 Annual Report. The Directors' Report also contains details of each Director's skill, experience and education. The Board seeks to ensure it consists of directors with an appropriate range of experience, skill, knowledge and vision to enable it to operate the Group's business with excellence.

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MERCHANT HOUSE INTERNATIONAL LIMITED

CORPORATE GOVERNANCE STATEMENT

1. Board of Directors (continued)

1. Board composition and expertise (continued)

The Board currently comprises five directors, one executive Chairperson, and four independent non-executive directors.
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A letter of appointment is executed with each Director and Senior Executive of the Company setting out the terms of their
employment.
The specific skills that the Board collectively bring to the Company include:
	•	Industrial expertise
	•	Commercial experience
use	•	Public company experience
•	Analytical
•	Financial
	•	Risk management
	• Strategic planning and leadership
	•	Corporate governance
	•	Communications
	•	Interpersonal
personalthe Managing Director, to retire from office at each AGM. Directors who have been appointed by the Board after the last

The Board reviews its composition as required to ensure that the Board has the appropriate mix of commercial and financial skills, technical expertise, industry experience, and diversity (including, but not limited to gender and age) in its membership. The Board is primarily responsible for identifying potential new directors, however has the option to use an external consulting firm to identify and approach possible new candidates for directorship. When a vacancy exists, or where it is considered that the Board would benefit from the services of a new director with particular skills, candidates with the appropriate experience, expertise and diversity are considered. Each incumbent director is given the opportunity to meet with each candidate on a one to one basis. The full Board then appoints the most suitable candidate who must stand for election at the next annual general meeting (AGM) of shareholders.

The Board undertakes appropriate checks before appointing a person as a Director or putting forward to shareholders a candidate for election as a Director.

The Board ensures that shareholders are provided with all relevant information for considering the election and re-election of a Director.

(c) Retirement and re-election of directors

The Constitution of the Company requires one-third of directors (or the number nearest one third, rounded up), other than

AGM are required to retire from office at the next AGM and are not taken into account in determining the number of directors to retire at that AGM. Retiring directors are eligible for re-election by shareholders.

ForNo Directors shall hold office for a period of three years without seeking re-election.

(d) Independence of directors

The Board has reviewed the position and association of each of the five directors in office during the year and considers that four directors are independent. In considering whether a director is independent, the Board has regard to the independence criteria in ASX Corporate Governance Principles and Recommendations Principle 2 and other facts, information and circumstances that the Board considers relevant. The Board assesses the independence of new directors upon appointment and reviews their independence, and the independence of the other directors, as appropriate. A director is considered to be independent where they receive no material financial or contractual benefits with the company over and above their director's fee and entitlements.

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MERCHANT HOUSE INTERNATIONAL LIMITED

CORPORATE GOVERNANCE STATEMENT

1. Board of Directors (continued)

1. Independence of directors (continued)

The Board considers that Ms Peggy Liao, Mr Ian Burton, Ms Xiao Lan Wu and Mr Oliver Hein meet the criteria in onlyPrinciple 2. They have no material business or contractual relationship with the Company, other than as a Director, and

no conflicts of interest which could interfere with the exercise of independent judgement. Accordingly, they are considered to be independent.

The Chairperson of the Company, Ms Loretta Lee, founded the Company and has held the role of Chairperson since the Company was established. Ms Lee is an integral part of the Company and also a major shareholder and due to her detailed knowledge of the business and the specialised skills that she brings to the Company, it is not practical for her role as Chairperson to be carried out by other directors, nor for the roles of Chairperson and Chief Executive Officer to be segregated.

use	Verification of periodic reports
(e)

Periodic reports are provided on a minimum of a quarterly basis for the Company via the submission of quarterly activities reports and quarterly cash flow reports as requested by the ASX, in the form of an Appendix 4C. Activities reports are prepared by management and circulated to the full Board for review and comment to ensure accuracy with the Directors' knowledge and understanding of operations during the quarter. Financial data is prepared and sent to the Board for review against the Directors' knowledge and understanding of operations for each quarter before approval for release to the market. No other periodic reports are currently prepared.

(f)	Director education
personalmeetings, their performance and other matters identified by the Board or other Directors. Significant issues are actioned

All new Directors complete an induction process. The non-executive directors are given every opportunity to gain a better understanding of the business, the industry, and the environment within which the Group operates, and are given access to continuing education opportunities to update and enhance their skills and knowledge.

The Board are specifically provided the opportunity to enhance their financial and compliance skills in relation to public companies through external courses.

(g) Independent professional advice

Each Director has the right of access to all relevant Company information and to the Company's executives and, subject to prior approval of the Chairperson, each director has the right to seek independent legal and other professional advice at the Company's expense concerning any aspect of the Company's operations or undertakings in order to fulfil their duties and responsibilities as directors.

(h) Board performance review

There is no formal appraisal system in place for Board performance on a director-by-director basis. The performance of all Directors is assessed through review by the Board as a whole of a Director's attendance at, and involvement in, Board

by the Board. Due to the Board's assessment of the effectiveness of these processes, the Board has not otherwise formalised measures of a Director's performance.

ForThe Company has not conducted a formal performance evaluation of the individual members of the Board during the reporting year. However, the Board conducts a review of the performance of the Company against budgeted targets and strategic objectives on an ongoing basis.

The Board does assess the performance of senior executives on an annual basis. An assessment was carried out during the current financial year.

1. Conflict of interest

Directors must keep the Board advised of any interest that could potentially conflict with those of the Company.

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insurance and risk management programmes which are reviewed by the Board.

corporate strategy guidelines and procedures to review and approve the Company's strategic plans; and

the Company's business plan;

procedures and controls to manage financial exposures and operational risks;

regular budgeting and financial reporting;

MERCHANT HOUSE INTERNATIONAL LIMITED

CORPORATE GOVERNANCE STATEMENT

1. Board of Directors (continued)

1. Remuneration of Directors and senior management

Details of remuneration of the Company's Directors and the Group's senior management are disclosed in note 27 to the onlyAnnual Report on page 53.

Executive Directors may be remunerated by fixed cash remuneration, performance-based bonus and share-based compensation. No termination payment is agreed other than a reasonable period of notice of termination will be required as detailed in the executive's employment contract.

Non-executive Directors will be remunerated by cash benefits alone (including statutory superannuation) and will not be provided with any benefits for ceasing to be a Director.

As Merchant House International Limited is a foreign company registered in Bermuda, it is not required to comply with the Corporations Act 2001. As such, a remuneration report is not shown.

useThe functions to be performed by sub-committees under the ASX Corporate Governance Principles and Recommendations (being the Audit, Risk, Remuneration and Nomination Committees) are currently being performed by the full Board and this is reflected in the written policy setting out the responsibilities of the Board. Having regard to the number of members currently comprising the Company's Board, the Board does not consider it appropriate to delegate

2. Board committees

Board committees and membership

these responsibilities to a sub-committee of the Board. However, meetings are held throughout the year between the Company Secretary, Mr David McArthur, the Board and/or Board members as appropriate and the Company's auditors to personaldiscuss the Company's ongoing activities and to discuss any proposed changes prior to their implementation and to seek

dvice in relation thereto.

As the Board comprises the members that would perform the duties of each of the committees under the Corporate Governance Recommendations, it is has assessed the requirements for the committees and has determined the Board can perform the requisite function a sub-committee would perform for each of recommendations 2.1, 4.1, 7.1 and 8.1. This is also identified in the Board Charter that the full Board will perform the functions of the sub-committees until the Company reaches a level of operations that would show need for separate sub-committees.

3. Managing business risk

The Board believes that risk management and compliance are fundamental to sound management and that oversight of such matters is an important responsibility of the Board. The Group maintains policies and practices designed to identify and manage significant business risks, including:

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ForThe Board reviews these systems and the effectiveness of their implementation annually and considers the management f risk at its meetings. The Company's risk profile is reviewed annually and was reviewed during the financial year. The Board may consult with the Company's external auditors on external risk matters or other appropriately qualified external

consultants on risk generally, as required.

The Board has not established a separate Risk Committee. The Board as a whole assesses and monitors risk management.

The Company does not have an internal audit unit.

The Company assesses its exposure to economic, environmental and social sustainability risks. The Board assesses the possible impact of changes and implements strategies to minimise exposure to these risks. The Board does not consider that the Company currently has any material exposure to environmental or social risks.

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ensure appropriate follow-upof significant audit findings and risk areas identified; review the scope of the external audit to align it with the Board's requirements; and conduct a detailed review of published accounts.

Corporate financial and operational reporting

MERCHANT HOUSE INTERNATIONAL LIMITED

CORPORATE GOVERNANCE STATEMENT

3. Managing business risk (continued)

1. Internal controls

Procedures are established at the Board and executive management levels that are designed to safeguard the assets and onlyinterests of the Company, and to ensure the integrity of reporting. These include accounting and financial reporting and

internal control policies and procedures. To ensure these established procedures are being followed, the Directors:

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(b)

useThe Board receives monthly management reports for the financial condition and operational results of the Group. The Company is not required to comply with the Corporations Act 2001 as it is a foreign company registered in Bermuda.

(c) Environmental regulation

The Group has a policy of at least complying, but in most cases exceeding, its environmental performance obligations. The Group has complied with all applicable environmental regulations.

4.	Ethical Standards
personal
All directors and executives are expected to act with the utmost integrity and objectivity, striving at all times to enhance
the performance and reputation of the Company and its controlled entities.
(a)	Code of conduct

In pursuit of the highest ethical standards, the Company has adopted a Code of Conduct which establishes the standards f behaviour required of directors and employees in the conduct of the Company's affairs. This Code is provided to all directors and employees. The Board monitors implementation of this Code and unethical behaviour will be duly reported

to the Chairperson.

The Code of Conduct is based on respect for the law, and acting accordingly, dealing with conflicts of interest appropriately, using the consolidated entity's assets responsibly and in the best interests of the Company, acting with integrity, being fair and honest in dealings, treating other people with dignity and being responsible for actions and accountable for the consequences.

The Group has advised each director, manager and employee that they must comply with the Group's Ethical Standards.

(b) Trading in Company's securities by Directors and Employees

The Board has adopted a policy in relation to dealings in the securities of the Company which applies to all directors and employees. Under the policy, directors are prohibited from short term or "active" trading in the Company's securities and Fordirectors and employees are prohibited from dealing in the Company's securities whilst in possession of price sensitive

information. The Chairperson must also be notified of any proposed transaction.

This policy is provided to all directors and employees. Compliance with such policy is reviewed on an ongoing basis in accordance with the Company's risk management systems.

(c) Whistleblower Policy

The Group has in place a Whistleblower policy, a copy of which is provided to all Group officers, employees and contractors to encourage all parties to report conduct that they reasonably believe may be misconduct or an improper state of affairs or circumstances. The policy provides a framework for individuals to be able to report matters in a confidential manner without fear of punishment, disciplinary action or retaliation. A copy is available on the Company's website.

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