Related institutional norms and revisions

Compliance with current laws and regulations
 and their establishment and revision

Code of Corporate Governance Practices

2022/03/08  Revision

Code of Integrity

2020/12/24  Revision

Integrity Management Procedures and Behavior Guidelines

2020/12/24  Revision

Code of Practice for Sustainable Development

2022/03/08  Revision

Code of Ethical Behavior

2020/07/30  Revision

Prosecution  system method

2020/07/30  Revision

Execution status report

To report regularly to the Board of Directors on performance on an annual basis

On  March 3, 2023, we submitted a report to the board of directors on the company's integrity management performance for the year 2021. We are pleased to report that there have been no instances of breach of integrity in the  company.

Education and training

In each course, we plan to follow the laws and regulations of honest management, study the legal knowledge, service rules and codes of conduct, and conduct education to strengthen the awareness of common management and prevention of  dishonest behavior.

For information on training in 2022, please refer to the company's website:  Implementation of Internal Regulations.

Compliance and disclosure

Promote the education of all employees and educate them on the points to note when  performing business.

On November 9, 2023, our company hired an external lawyer to give a training session on "Legal Awareness Training for Employees in the Technology Industry." Through case studies, the session aimed to promote awareness  among our colleagues about the things to be mindful of when conducting  business.

Communication channel

Employees can respond to each management and the management department through channels such as hotline/letter/email.

We proactively announce the policy of honest management and the implementation of honest management in our website, annual reports and other external  documents.

Whistleblowing system and whistleblower protection

Under Article 23 of our company's "Code of Business Conduct" and Article  21 of the "Code of Conduct and Operating Procedures for Business  Integrity," we have established a reporting system. The company is  required to keep written records of the process of accepting and investigating reports, as well as the results of investigations.The identity  of the reporter and the content of the report will be kept confidential and  anonymous reporting is allowed.

The Company handles grievances confidentially and appropriately protects  whistleblowers from improper treatment as a result of their complaints.

Report channels: (1) Reporting  hotline 0965-728-905, (2) Online form on the official website under  "Report System for Violation of Professional Ethics," (3) Reporting  email integrity@microcosm.com.tw.

There  were no incidents involving dishonest acts in 2023.

Yes

No

Abstract  Description

I.  Establishing an integrity management policy and plan.

(1) Has  the company established an honest management policy approved by the board of directors, and has the policy and practice of honest management been stated  in the bylaws and external documents, as well as the commitment of the board of directors and the senior management to actively implement the management policy?

V

(a) The Company has formulated a "Code of Conduct for Integrity Management" and "Operating Procedures and Conduct Guidelines for Integrity  Management", which are posted on the Company's website. The Company's  policies on integrity management are clearly stated in the work rules and the  integrity contract with suppliers, and "Notice of Integrity Pledge"  is sent to upstream and downstream suppliers from time to time; suppliers are required to sign the "Integrity Pledge"; the Board of Directors and  senior management have signed the "Declaration of No Violation of  Integrity Principles" as the basis for implementing integrity  management.

All of  these are carried out in accordance with the "Practice Guidelines for Governance of Listed and OTC Companies."

(2) Has  the company established a mechanism for assessing the risk of dishonest  conduct, regularly analyzed and evaluated the business activities within the  scope of business that have a higher risk of dishonest conduct, and  formulated a plan to prevent dishonest conduct based on such a plan, which at  least covers the preventive measures for the conducts mentioned in paragraph  2 of Article 7 of the "Code of Conduct for Listed Companies with  Integrity"?

V

(b) In order to prevent dishonest behavior, the Company has established a management  system that specifies the ethical standards that employees should follow when engaging in any business activities.

(3) Does  the company specify the operating procedures, conduct guidelines,  disciplinary and grievance systems for non-compliance in its dishonesty  prevention program, and implement them, and regularly review and revise the  previously disclosed program?

V

(c) The company has established internal integrity management rules to regulate corporate behavior and provide relevant education and training to employees in accordance with the rules. At the same time, the company establishes risk  prevention procedures and regularly reports on the implementation status.

II. The implementation of integrity management

(a) Does the company evaluate the integrity records of its counterparties and specify  the integrity terms in the contracts it signs with them?

V

(a) Before conducting formal business activities with business partners, the  Company conducts various assessments including integrity behaviors, and after  confirming the cooperation, requires the other party to sign an undertaking to  comply with all integrity-related regulations set by the Company.

All of these are carried out in accordance with the "Practice Guidelines for  Governance of Listed and OTC Companies."

(b) Has  the company set up a special unit under the board of directors to promote  honest corporate management and report regularly (at least once a year) to  the board of directors on its policies on honest management and plans to  prevent dishonest practices and monitor their implementation?

V

(b) In December 2020, the Board of Directors resolved to change the President's  Office to a dedicated unit under the Board of Directors and established the  "Integrity Management Working Group" to handle the revision,  implementation, explanation, consultation services and documentation of the  integrity management procedures and conduct guidelines and supervise their  implementation, and to report to the Board of Directors once a year. On March 3, 2023, a report on the implementation of the Company's integrity  management for the year 2022 was submitted to the Board of Directors.

(c) Does  the company have a policy to prevent conflict of interest, provide  appropriate channels for presentation, and implement it?

V

(c) The  company has a preventive policy and provides various channels for employees  to provide information at any time.

(d) Has  the company established an effective accounting system and internal control  system for the implementation of honest management, and has the internal  audit unit prepared an audit plan based on the results of the risk assessment  of dishonesty, and checked the compliance of the dishonesty prevention plan  accordingly, or has the company appointed an accountant to perform the audit?

V

(d) The  Company conducts self-inspection once a year, and the internal audit unit  reviews the self-inspection reports of each unit and subsidiary, including  the control environment, risk assessment, control operations, information and  communication, and supervision, etc., together with the improvement of  internal control deficiencies and irregularities identified by the audit  unit, as the main basis for the Board of Directors and the President to  evaluate the effectiveness of the overall internal control system and to  issue a statement on the internal control system.

(e) Does the Company regularly conduct internal and external education and training on  integrity management?

V

(5) During  the training of new employees, the Company conducts education and training on  work rules, ethics and code of conduct. On November 9, 2023, the Company  hired an outside attorney to give a lecture on "Case Studies on Honest  Management and Insider Trading".

III. Operation of the company's reporting system

(1) Has the company established a specific reporting and reward system, set up a  channel to facilitate reporting, and assigned appropriate staff to receive  reports on the subject?

V

(a)  Article 23 of our company's "Integrity Management Code of Conduct" and Article 21 of the "Integrity Management Operating Procedures and  Behavior Guidelines" are the relevant regulations for the reporting  system. Convenient reporting channels have been established, including the  reporting hotline 0965-728-905, the online form "Violation of  Professional Ethics Reporting System" on the Miscrocosm website, and the  reporting email address integrity@microcosm.com.tw, and appropriate personnel  have been assigned to handle the reports.

All of  these are carried out in accordance with the "Practice Guidelines for  Governance of Listed and OTC Companies."

(2) Has the Company established standard operating procedures for investigation of reported matters, follow-up measures to be taken after the completion of the investigation, and related confidentiality mechanisms?

V

(b)  According to Article 23 of the "Integrity Management Code of Conduct" and Article 21 of the "Integrity Management Operating Procedures  and Behavior Guidelines" of our company, the relevant regulations of the  reporting system, the acceptance, investigation process, and results of the  reporting cases should be retained in written form and kept. The identity and  contents of the reporting person are kept confidential and anonymous  reporting is allowed.

(3) Does the Company take measures to protect whistleblowers from improper disposal as a result of whistleblowing?

V

(c) The  company handles complaint cases in a confidential manner and properly  protects the reporting person from being subjected to improper treatment as a  result of the report.

IV. strengthen the disclosure of information

Does the company disclose the contents and effectiveness of its established integrity management code of conduct on its website and public information observation  station?

V

Our  company discloses information related to integrity management on the internal  website, and the management department is responsible for collecting and  disclosing such information.

All of  these are carried out in accordance with the "Practice Guidelines for Governance of Listed and OTC Companies."

V. If  the company has its own integrity management code of conduct in accordance  with the "Integrity Management Code of Conduct for Listed and OTC Companies," please specify the differences between the operation and the  established code of conduct:
 
 There are no major differences. Our company has established this operational  code of conduct in accordance with the "Integrity Management Code of  Conduct for Listed and OTC Companies," which specifically regulates the  matters that our personnel should pay attention to when carrying out their  duties, and announces it to all employees.

VI. Other important information that helps to understand the company's integrity  management operation (such as the company's review and revision of its  established integrity management code of conduct, etc.):
 
 The company has a Supplier Ethics Commitment Letter, which is required to be  signed by the other party at the time of formal signing with the  manufacturer, and clearly expresses the spirit of the company's integrity  management.