• World Precision seeks to develop a culture that encourages the challenge of inappropriate behaviour at all levels.
• To achieve this aim, the Company encourages workers and any other persons to report genuine concerns about malpractice, fraudulent activities, improprieties, illegal acts, sexual harassment or failures to comply with recognised standards of work without fear of reprisal or victimisation.
• To strengthen the Company’s internal control for proper operations of purchasing, production and sales functions; establish a competitive structure with equality, preventing making personal gains at the expense of the interest of the Company for a healthy growth of the Company.
• This policy is applicable to all employees of the Company and its subsidiary.
• The Company reserves the rights to amend the policy, guidelines and procedures as and when necessary to meet changes.

It is recognised that employees, from time to time, have concerns about what is happening at work but are afraid to report those concerns. In order to provide protection to those individuals who do report concerns, laws, regulations and codes have been prepared.

Whistle blowing is specific and means a disclosure of information made by a worker to the Company or any other persons where he or she reasonably believes that one or more of the following matters is happening now, took place in the past or is likely to happen in the future:

• a criminal offence;
• a failure to comply with a legal obligation (e.g. breach of a contractual or other common law obligation, statutory duty or requirement or administrative requirement, including suspected fraud, malpractice or breach of a code of conduct);
• a miscarriage of justice;
• a danger to the health and safety of any individual;
• sexual harassment;
• damage to the environment; or
• a deliberate concealment of information tending to show any of the above.

The above list is not exhaustive.

In pursuit of these objectives, the Company adopts as its best practices the Code of Corporate Governance issued by the Council on Corporate Disclosure and Governance, as may from time to time be amended.

This procedure applies to all employees of companies and joint ventures controlled by World Precision Machinery Limited.

The Company’s Whistle Blowing Procedure does not replace in any way and is in addition to the procedures established or to be established relating to grievances regarding employment, customer service complaints or any other matter covered by another more specific Company policy or procedure.

If you know or believe that an unintentional or deliberate violation of applicable laws, rules, regulations or Company policy has occurred, you must immediately submit a report to the Chief Executive Officer (“CEO”)’s office or directly to the Audit Committee (excluding the Non-Executive and Non-Independent Director) (the “AC”) and the AC is responsible for oversight and monitoring of whistleblowing. The report should describe one or more of the following, as applicable:

• A violation or a failure to comply with law, rule, and regulation or Company policy, including any violations or failures relating to accounting, internal accounting controls or auditing matters.
• A concern that questionable accounting, internal accounting controls or auditing practices have taken place or are taking place.
• An allegation or concern that an employee, officer or director who, in accordance with this Whistle Blowing Policy, reported an alleged violation or concern was retaliated against.

You may choose to submit a report openly, confidentially or anonymously. When reporting a violation or concern, please provide the time, location and nature of the matter, the names of people involved and other details so it can be investigated. You have the option to submit a report by any of the following avenues:

• CEO’s office CEO
• AC

When submitting a report, you are encouraged to use your genuine name. The Company will ensure that the identity of the reporting person is kept confidential and commits to ensure the protection of the reporting person against detrimental or unfair treatment. Such commitment will be disclosed in the Company’s annual report.

The reporting person will be provided with feedback on the results of investigation via appropriate means.

If the reporting matter does not pertain to “Whistle blowing” as defined in Section 2.0, it would be suggested to the reporting person to bring up the matter directly to the department concerned. Alternatively, the matter will be conveyed to the relevant department.

The department will standardise the documentation and recording of reported matters received. The AC will respond to all reports where sufficient contact details have been provided. When a whistleblowing report is received:

• The AC will assess all concerns raised independently to ensure they are fairly and properly considered.
• The AC may request more information from the reporting person and/or request a meeting to discuss further details or the nature of allegation, and decide if investigation is required (e.g. if third-party professionals should be engaged for the investigation). It is important that relevant, actionable information is provided in order for allegations to be substantiated and to aid in investigations.
• Meeting requests made to the AC will be assessed on a case-by-case basis.
• The time needed for investigations to be closed will depend heavily on the nature of the allegation and the supporting information that is provided. All investigations conducted by the AC (or third-party professionals, if involved) are confidential in nature.
• The AC and the Company expect each Director, officer and employee to make every reasonable effort to assist persons involved in reviewing and investigating any report, including making himself or herself available for interviewing, responding to requests for documentation or other information, etc.
• The AC will retain all records and keep them strictly confidential. In no event will information concerning the report be released to persons without a specific need to know about it.
• The AC shall have the authority to engage external auditors, counsel, or other experts to assist in the investigation and analysis of any report.
• While the AC takes all allegations seriously and decides if investigation is required, the AC does not take action on correspondence:
  • which are clearly frivolous, vexatious or meant solely for abuse;
  • which deal with matters upon which the Company’s position has already been fully given and no further update is necessary; or
  • where the Company is not the addressee of correspondence but clearly copied for information purpose.

Reports Regarding Accounting Matters

When whistle blowing is received with regards to accounting matters, a written report has to be made promptly to the AC. The AC will call for a meeting with the auditors to decide if investigation is to be carried out.

Reports Regarding Legal Matters, Retaliation or Other Matters

If the report involves potential violations of applicable laws, rules, regulation or Company policy, retaliation against a reporting individual or other matters, the AC will call for a meeting with the CEO (provided that the CEO is not involved in the whistleblowing report) to determine the further action, if any, will be taken. The AC and/or CEO shall have the authority to engage outside independent auditors, counsel, or other experts to assist in the investigation and analysis of any report.

Regular Presentation to the AC

The Audit Committee will report to the Board of Directors quarterly, a compilation of problems and solutions which have been raised through the whistle blowing mechanism. Major problems are to be reported promptly to the Audit Committee and the Board of Directors. On a regular basis, the AC is to re-examine reports which have yet to be verified and any suspicious matters. Findings Reports are to be made on quarterly.

Conflicts of Interest

If at any time, the CEO has reason to believe that an investigation he or she has undertaken as a result of a report raises a potential or real conflict of interest, the CEO will immediately notify the Chairman of the AC and cease his or her investigation. The AC will determine what further action, if any, will be taken as to the report, such as the hiring of outside counsel to conduct the review or investigation of the report. Any AC member having a conflict of interest as to a report must recuse himself or herself from consideration of the report. In the event that no members of the AC are available to consider the issue as a result of a conflict of interest, the Company’s Board of Directors will consider the report or designate an independent committee to consider the report.

Retention of Reports and Documents

The AC will retain for a minimum period of 3 years all records relating to any report and to the investigation of any report.

Anonymity

The Company encourages employees to report any breach directly. The AC and the Company will ensure that the identity of the reporting person is kept confidential.

Confidentiality

All reports of a breach will be handled in a confidential manner. Confidentiality will be maintained to the fullest extent possible, consistent with the need to conduct an adequate investigation of the report and to perform subsequent remedial measures.

Employees or any other persons shall avoid any form of external or internal publicity concerning any breach they might want to report or have reported, unless required to do so by law.

Protection

Any employee or any other person who reports a breach, which he or she reasonably believes, or may reasonably believe, to be true, will be given protection for such reporting.

This protection means that the Company will not discharge, demote, suspend, threaten, harass or in any manner discriminate against any employee in the terms and conditions of employment. The Company does not tolerate any form of threat, retaliation or other action against an employee who has made or assisted in the making of a report of breach. Any such threat, retaliation or other action must immediately be reported to the AC.

False reporting

The Company will not tolerate false reports of a breach.

If an employee or any other person makes a report of breach which he or she knows or reasonably should know to be false, he or she will be subject to disciplinary action which may involve termination of employment in the case of the employees. False reporting could also lead to civil or criminal prosecution.

The employee or any other person may be liable for damages towards anyone who has suffered from a false report. The Company does not indemnify or reimburse any employee who has made a false report for costs or other consequences related to such false reporting.

Investigation

The following procedure is put in place to ensure that evidence of a breach is secured in an appropriate manner and that the possibilities for recovery of funds or damages by the Company and/or local entities are protected as much as possible.

Management
Neither Management nor employees are allowed to conduct or initiate otherwise any investigation (independent or other) or to take any action against a breach or the suspected persons without the authorisation of the AC.

Evidence
Evidence, documentation and safekeeping shall be preserved by a delegated personnel as per the instructions of the AC in accordance with divisional reporting instructions/requirements, disciplinary procedures and applicable local legislation.

Co-operation
Management and the Board of Directors are obligated to fully co-operate with and assist the independent investigators and other parties engaged to investigate a breach. The Company expects personnel at all levels to handle all matters concerning a breach seriously, confidentially and promptly.

Feedback

If requested, any employee or any other person making a whistle blowing report may receive general information on the progress and closing of the investigation and its outcome, unless giving such feedback would be detrimental to the investigation.

Disciplinary action

Employees suspected of a Breach will not be considered guilty unless the allegations or suspicions have been proven and they have been given the opportunity to defend themselves. It is the responsibility of Management to implement any measures (disciplinary or otherwise) deemed necessary as a result of established breach incidents in conjunction with the recommendations of the AC. If and when such measures deviate from those recommended by the AC, they will require the prior approval of the Board of Directors.

List of Key Contacts

CEO’s Office:
Picheng Town, Danyang City, Jiangsu Province
Tel: (86) 511 634 2598 email: [email protected]

AC:
Ms Yap Ming Choo
c/o Rajah & Tann Singapore LLP, 9 Straits View #06-07 Marina One West Tower, Singapore 018937
Tel: (65) 9763 5023 email: [email protected]