LETTER TO STOCKHOLDERS AND BONDHOLDERS FROM THE … · 5/22/2013 · Mr Lai Teck Poh...

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WBL CORPORATION LIMITED(Incorporated in Singapore)

(Company Registration No. 191200028Z)

LETTER TO STOCKHOLDERS AND BONDHOLDERS FROM THE BOARD

Board of Directors: Registered Offi ce:

Mr Norman Ip Ka Cheung (Chairman, Independent and Non-Executive Director)Mr Benjamin C. Duster, IV (Non-Independent and Non-Executive Director)Dr Peter Eng Hsi Ko (Non-Independent and Non-Executive Director) Mr Mark C. Greaves (Non-Independent and Non-Executive Director)Mr Lai Teck Poh (Non-Independent and Non-Executive Director)Mr Kyle Lee Khai Fatt (Independent and Non-Executive Director)

801 Lorong 7 Toa Payoh,#07-00 Wearnes Building,Singapore 319319

22 May 2013

To : The Stockholders and Bondholders of WBL

Dear Sir/Madam

REVISION OF MANDATORY CONDITIONAL CASH OFFERS BY THE UE OFFEROR

1. BACKGROUND

1.1 Revision of UE Offers

On 9 May 2013, J.P. Morgan (S.E.A.) Limited (“J.P. Morgan”), for and on behalf of UE Centennial Venture Pte. Ltd. (the “UE Offeror”), a wholly-owned subsidiary of United Engineers Limited, issued an announcement (the “UE Offers Revision Announcement”) on the revision of the mandatory conditional cash offers (as defi ned in this supplemental letter as the “UE Offers” or the “Revised UE Offers”) by J.P. Morgan, for and on behalf of the UE Offeror, to acquire:

(a) all the issued ordinary stock units in the capital of WBL (“Stock Units”); and

(b) all the outstanding convertible bonds due 10 June 2014 issued by WBL on 10 June 2009 (“Convertible Bonds”),

other than those already owned, controlled or agreed to be acquired by the UE Offeror and the Concert Party Group.

As stated in the UE Offers Revision Announcement, (i) the UE Offeror has increased the Stock Unit Offer Price and the Convertible Bonds Offer Price and (ii) the Closing Date for the UE Offers has been extended to 5.30 p.m. (Singapore time) on 29 May 2013 (the “Final Closing Date”).

A copy of the UE Offers Revision Announcement is available on the website of the SGX-ST at www.sgx.com.

This supplemental letter (“Supplemental Letter”) is important as it contains the recommendation of the directors of WBL (the “Directors”) who are considered independent for the purpose of the UE Offers (the “Independent Directors”) and the advice of KPMG Corporate Finance Pte Ltd (“KPMG”) to the Independent Directors in relation to the UE Offers. This Supplemental Letter requires the immediate attention of stockholders (“Stockholders”) and bondholders (“Bondholders”) of WBL who are advised to read it carefully.

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If you are in any doubt in relation to this Supplemental Letter or as to the action you should take, you should consult your stockbroker, bank manager, solicitor, accountant, tax adviser or other professional adviser immediately. The Singapore Exchange Securities Trading Limited (“SGX-ST”) assumes no responsibility for the correctness of any of the statements made, reports contained, opinions expressed or advice given in this Supplemental Letter.

1.2 Defi nitions

Unless otherwise stated, all terms and expressions used in this Supplemental Letter shall have the meanings given to them in the circular to Stockholders and Bondholders dated 9 April 2013 issued by WBL in relation to the UE Offers (the “UE Offeree Circular”).

1.3 Revision notifi cation

Stockholders and Bondholders should have by now received a copy of the written notifi cation dated 14 May 2013 (the “Revision Notifi cation”) issued by J.P. Morgan, for and on behalf of the UE Offeror, setting out, inter alia, the revisions to the UE Offers. Stockholders and Bondholders are advised to read the revised terms and conditions of the UE Offers set out in the UE Offers Revision Announcement and the Revision Notifi cation carefully.

A copy of the Revision Notifi cation is available on the website of the SGX-ST at www.sgx.com.

1.4 UE Offers declared unconditional in all respects

On 13 May 2013, J.P. Morgan announced, for and on behalf of the UE Offeror, that as at 5.00 p.m. on 13 May 2013, the UE Offeror had received valid acceptances of the UE Stock Unit Offer in respect of such number of Offer Stock Units which, when taken together with the Stock Units owned, controlled or agreed to be acquired by the UE Offeror and its Concert Parties (either before or during the UE Stock Unit Offer and pursuant to the UE Stock Unit Offer or otherwise), resulted in the UE Offeror and its Concert Parties holding such number of Stock Units carrying more than 50% of the voting rights attributable to the maximum potential stock capital of WBL. Accordingly, J.P. Morgan announced, for and on behalf of the UE Offeror, that the minimum acceptance condition of the UE Stock Unit Offer had been satisfi ed and the UE Offers became and were declared unconditional in all respects on 13 May 2013.

1.5 Purpose of this Supplemental Letter

The purpose of this Supplemental Letter is to provide Stockholders and Bondholders with relevant information pertaining to the UE Offers and to set out the recommendation of the Independent Directors and the advice of KPMG to the Independent Directors in respect of the UE Offers.

Stockholders and Bondholders should consider carefully the recommendation of the Independent Directors and the advice of KPMG to the Independent Directors in respect of the UE Offers as set out in this Supplemental Letter before deciding whether or not to accept the UE Offers.

2. REVISION OF THE UE STOCK UNIT OFFER

2.1 Final Stock Unit Offer Price

As stated in Section 3.1 of the UE Offers Revision Announcement, pursuant to Rule 21.1 of the Code, the UE Offeror is revising the Stock Unit Offer Price as follows:

For each Offer Stock Unit: S$4.50 in cash (the “Final Stock Unit Offer Price”).

Section 3.1 of the UE Offers Revision Announcement further states that the UE Offeror does not intend to further revise the Final Stock Unit Offer Price.

Stockholders who have earlier accepted the UE Stock Unit Offer are entitled to receive the Final Stock Unit Offer Price, subject to the UE Stock Unit Offer becoming unconditional in all respects in accordance with its terms. Accordingly, no further action in respect of the UE Stock Unit Offer is required to be taken by Stockholders who have already accepted the UE Stock Unit Offer.

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2.2 No Encumbrances

As stated in Section 3.2 of the UE Offers Revision Announcement, the Offer Stock Units will be acquired fully paid and free from all Encumbrances and together with all rights, benefi ts, entitlements and advantages attached thereto as at 30 January 2013 (the “Pre-Conditional UE Offers Announcement Date”) and thereafter attaching thereto, including the right to all Distributions (if any), the Stock Units Record Date for which falls on or after the Pre-Conditional UE Offers Announcement Date.

2.3 Adjustments for Distributions

Section 3.3 of the UE Offers Revision Announcement states that, without prejudice to the generality of the foregoing, the Final Stock Unit Offer Price has been determined on the basis that the Offer Stock Units will be acquired with the right to receive any Distributions, the Stock Units Record Date for which falls on or after the Pre-Conditional UE Offers Announcement Date. In the event of any such Distribution, the Final Stock Unit Offer Price payable to a Stockholder who validly accepts or has validly accepted the UE Stock Unit Offer shall be reduced by an amount which is equal to the amount of such Distribution as follows, depending on when the Offer Settlement Date falls:

(a) if the Offer Settlement Date falls on or before the Stock Units Record Date, the UE Offeror will pay the relevant accepting Stockholders the Final Stock Unit Offer Price of S$4.50 in cash for each Offer Stock Unit, as the UE Offeror will receive the Distribution in respect of such Offer Stock Units from WBL; and

(b) if the Offer Settlement Date falls after the Stock Units Record Date, the Final Stock Unit Offer Price payable for such Offer Stock Units tendered in acceptance shall be reduced by an amount which is equal to the Distribution in respect of such Offer Stock Units, as the UE Offeror will not receive such Distribution from WBL.

2.4 No adjustment for Interim Dividend

Section 3.4 of the UE Offers Revision Announcement sets out that, as stated in the announcement by WBL dated 8 May 2013, WBL has declared an interim tax-exempt (one-tier) dividend of S$0.05 per Stock Unit (the “Interim Dividend”) payable on 1 August 2013 to Stockholders on the Register of Members of WBL on 11 July 2013 (the “Interim Dividend Record Date”). Based on the foregoing and the Final Closing Date, subject to the UE Stock Unit Offer becoming unconditional as to acceptances, the Offer Settlement Date will fall before the Interim Dividend Record Date and accordingly, the Final Stock Unit Offer Price of S$4.50 in cash for each Offer Stock Unit will not be adjusted for the Interim Dividend.

3. REVISION OF UE CONVERTIBLE BONDS OFFER

3.1 Final Convertible Bonds Offer Price

As stated in Section 4.1 of the UE Offers Revision Announcement, as a consequence of the revision of the Stock Unit Offer Price, the offer price for the relevant principal amount of Offer Convertible Bonds (the “Final Convertible Bonds Offer Price”) tendered in acceptance of the UE Convertible Bonds Offer is accordingly revised, in accordance with Rule 19 of the Code, to be the ‘see-through’ price which is equal to the Final Stock Unit Offer Price multiplied by the number of Conversion Stock Units into which such principal amount of Offer Convertible Bonds may be converted (rounded down to the nearest Conversion Stock Unit).

For purely illustrative purposes only, the Final Convertible Bonds Offer Price will be as follows:

For every S$1,000 in principal amount of Offer Convertible Bonds: S$1,962 in cash.

Bondholders who have earlier accepted the UE Convertible Bonds Offer are entitled to receive the Final Convertible Bonds Offer Price, subject to the UE Stock Unit Offer becoming unconditional in all respects in accordance with its terms. Accordingly, no further action in respect of the UE Convertible Bonds Offer is required to be taken by Bondholders who have already accepted the UE Convertible Bonds Offer.

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3.2 No Encumbrances

Section 4.2 of the UE Offers Revision Announcement sets out that the Offer Convertible Bonds will be acquired fully paid and free from all Encumbrances and together with all rights, interests, benefi ts, entitlements and advantages attached thereto as at the Pre-Conditional UE Offers Announcement Date and thereafter attaching thereto, including the right to all Distributions (if any), the Bonds Record Date for which falls on or after the Pre-Conditional UE Offers Announcement Date but excluding the Excluded Interest Payment.

In the event of any such Distribution or if any right arises for any reason whatsoever (other than the Excluded Interest Payment) on or after the Pre-Conditional UE Offers Announcement Date for the benefi t of a Bondholder who validly accepts or who has validly accepted the UE Convertible Bonds Offer, the UE Offeror reserves the right to reduce the Final Convertible Bonds Offer Price payable to such Accepting Bondholder by the amount of such Distribution, subject to consultation with the Securities Industry Council (“SIC”).

4. FINAL CLOSING DATE AND SHUT-OFF NOTICE

Section 7 of the UE Offers Revision Announcement states that pursuant to Rule 20.1 of the Code, the UE Offers must be kept open for at least 14 days from the date of posting of the Revision Notifi cation to Stockholders and Bondholders. Accordingly, the Closing Date for the UE Offers will be extended from 5.30 p.m. (Singapore time) on 10 May 2013 to 5.30 p.m. (Singapore time) on 29 May 2013.

Section 7 of the UE Offers Revision Announcement further states that the UE Offeror has no intention of extending the UE Offers beyond 5.30 p.m. (Singapore time) on the Final Closing Date.

As set out in Section 7 of the UE Offers Revision Announcement, the UE Offeror has given notice in the UE Offers Revision Announcement pursuant to Rule 22.6 of the Code that the UE Offers will not be open for acceptances beyond 5.30 p.m. (Singapore time) on the Final Closing Date, notwithstanding that the UE Stock Unit Offer may have become or been declared unconditional as to acceptances by then (the “Shut-off Notice”). This means that if the UE Stock Unit Offer becomes unconditional as to acceptances before the Final Closing Date or even if the UE Stock Unit Offer becomes unconditional as to acceptances on the Final Closing Date itself, there will NOT be any further extension of the Final Closing Date and Stockholders and Bondholders who do not accept the UE Offers by the Final Closing Date will not be able to do so after the Final Closing Date. Acceptances of the UE Offers received after 5.30 p.m. (Singapore time) on the Final Closing Date will be rejected.

5. OTHER TERMS OF THE UE OFFERS

As set out in Sections 3.5 and 4.3 of UE Offers Revision Announcement, save for (a) the revision of the Stock Unit Offer Price to the Final Stock Unit Offer Price, (b) the revision of the offer price for the Convertible Bonds Offer to the Final Convertible Bonds Offer Price, (c) the extension of the Closing Date to the Final Closing Date and (d) the inclusion of the Shut-off Notice, all other terms and conditions of the UE Offers as set out in the UE Offer Document remain unchanged.

6. DIRECTORS’ INTERESTS

Details of the Directors including, inter alia, the Directors’ direct and deemed interests in the WBL Securities and the UE Offeror Securities as at 17 May 2013, being the latest practicable date prior to the printing of this Supplemental Letter (the “Latest Practicable Date”), are set out in Appendix II of this Supplemental Letter.

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7. ADVICE AND RECOMMENDATIONS

7.1 Independent Directors

Mr Kyle Lee Khai Fatt and Mr Benjamin C. Duster, IV are independent for the purposes of the UE Offers and are required to make a recommendation to the Stockholders and Bondholders in respect of the UE Stock Unit Offer and the UE Convertible Bonds Offer (as the case may be). The SIC has ruled on 4 February 2013 and 1 April 2013 that Mr Norman Ip Ka Cheung, Mr Lai Teck Poh, Dr Peter Eng Hsi Ko and Mr Mark C. Greaves will be exempt from the requirement of making a recommendation to the Stockholders and Bondholders on the UE Offers as they face irreconcilable confl icts of interests in relation to the UE Offers for the reasons set out in Section 9.2 of the UE Offeree Circular.

All the Directors (including, for the avoidance of doubt, Mr Norman Ip Ka Cheung, Mr Lai Teck Poh, Dr Peter Eng Hsi Ko and Mr Mark C. Greaves) are jointly and severally responsible for the accuracy of facts stated and completeness of the information given by WBL to the Stockholders and the Bondholders on the UE Offers, including information contained in announcements and documents issued by or on behalf of WBL in connection with the UE Offers.

7.2 KPMG’s advice to the Independent Directors

The advice of KPMG to the Independent Directors on the Revised UE Offers is set out in the letter dated 22 May 2013 annexed as Appendix I of this Supplemental Letter (the “IFA Letter”). The key considerations relied upon by KPMG in arriving at its advice to the Independent Directors are set out in Section 11 of the IFA Letter.

The advice of KPMG to the Independent Directors in respect of the Revised UE Offers has been extracted from the IFA Letter and is reproduced in italics below:

“ In arriving at our opinion to the Independent Directors, we have carefully considered the information that has been made available to us and the above factors set forth in this Letter including, inter alia, the following:

Liquidity of the Stock Units. Prior to the Last Unaffected Share Price Date, the average daily traded value of the Company’s Stock Units was within the range of the comparable companies by market capitalisation, albeit at the lower end of the range. Additionally, the Offeror has increased its equity stake in the Company by 52.6% during the Offer Period (as defi ned in the Offer Document), which has substantially reduced the free fl oat of the Company. Should the listing status of the Company be preserved, the reduction in the free fl oat is likely to reduce the trading liquidity of the Stock Units.

Comparison of the Stock Unit Consideration with VWAPs of the Stock Units. The Stock Unit Consideration is at premiums to the VWAPs of the Stock Units for various periods leading up to, and including, the Last Unaffected Share Price Date and at modest premiums to the VWAPs of the Stock Units for various periods following the Last Unaffected Share Price Date.

Historical multiples analysis. The Stock Unit Consideration is at an implied 139.4% premium to the median of the Company’s T12M EV/EBITDA multiple of 6.6x for the three (3) years prior to the Last Unaffected Share Price Date, a premium of approximately 297.9%, to the median of the Company’s T12M P/E ratio of 11.6x for the three (3) years prior to the Last Unaffected Share Price Date and a premium of approximately 19.1%, to the median of the Company’s P/NAV ratio of 1.1x for the three (3) years prior to the Last Unaffected Share Price Date.

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Comparison of the premiums/(discounts) implied by the Stock Unit Consideration with Precedent Take-over Transactions and the Precedent Minority Transactions. The premiums of varying historical period VWAPs of the Stock Units, relative to the Stock Unit Consideration, are within the range of, although lower than the corresponding mean and median premiums of the Precedent Take-over Transactions. The premiums of varying historical period VWAPs of the Stock Units, relative to the Stock Unit Consideration, are within the range and above the median premiums of the Precedent Minority Transactions.

Change of control of the Company. We note that, as at the Latest Practicable Date, the Offeror and its Concert Parties had owned, controlled or have agreed to acquire an aggregate of 90.2% of the total number of issued Stock Units and approximately 89.3% of the maximum potential stock capital of WBL Corporation. We further note that STC and its concert parties have accepted the Revised UE Offers. As such, the Offeror and its Concert Parties are now in a position to signifi cantly infl uence, inter alia, the Management and operating and fi nancial policies of the Company and have gained statutory control of the Company which entitles them to pass all ordinary resolutions on matters in which the Offeror and its Concert Parties do not have an interest, at general meetings of Stockholders.

Sum-of-the-parts valuation. The Stock Unit Consideration is within the sum-of-the-parts estimated valuation range of S$4.50 to S$5.40 per Stock Unit, albeit at the lower end of the estimated range. We note that, in arriving at this estimated valuation range, we have not applied any conglomerate discount, nor have we applied a discount for a potential reduction in marketability of the Stock Units or Convertible Bonds due to a lower public fl oat.

No alternative offers from third parties. At the Latest Practicable Date, the Directors and the Company have not been approached with a higher competing offer.

No intention to further revise the Stock Unit Consideration or Convertible Bonds Consideration. We note that the Offeror does not intend to further revise the fi nancial terms of the Stock Unit Offer and Convertible Bonds Offer.

Revised UE Offers being declared unconditional in all respects and the Offeror’s intentions relating to the listing status of the Company. We note that the Revised UE Offers have become unconditional in all respects and that, the Offeror has stated that if trading in the Stock Units and Convertible Bonds is subsequently suspended pursuant to Rule 724 or Rule 1105 of the Listing Manual, the Offeror has no intention to undertake or support any action for such listing suspension by the SGX-ST to be lifted. It should also be noted that, even if the Stock Units are not delisted, the increase in the Offeror’s stockholding in the Company has substantially reduced the free fl oat of the Company, which is likely to reduce the future liquidity of the Stock Units in the market.

Having carefully considered the information available to us as at the Latest Practicable Date, and based on our review of the fi nancial terms of the Revised UE Offers, we are of the opinion that the Revised UE Offers are fair, from a fi nancial point of view. Accordingly, the Independent Directors may wish to consider advising the Stockholders and Bondholders to ACCEPT the Revised UE Offers.

The Independent Directors may also wish to consider advising Stockholders and Bondholders who are considering rejecting the Revised UE Offers, the following:

(i) There is no certainty that following the close of the Revised UE Offers, that the Company will meet the minimum public fl oat requirements under the rules of the Listing Manual of the SGX-ST. The Offeror has stated that in the event that the trading of the Stock Units and the Convertible Bonds on the SGX-ST is suspended pursuant to Rule 724 or Rule 1105 of the Listing Manual, the Offeror has no intention to undertake or support any action for any such listing suspension to be lifted. Stockholders or Bondholders would then hold unlisted Stock Units or Convertible Bonds which would be substantially less marketable.

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(ii) Recent regulatory changes may impact the operating performance of Wearnes Automotive as well as the Property Division. While the potential impact of these changes has been considered to an extent in this Letter, a sustained adverse impact on the operating performance of these business divisions may lead to a reduction in intrinsic value.

(iii) In the absence of a higher offer, the realisation of the intrinsic value of the Company may take signifi cant effort and time. Additionally, the realised value may differ signifi cantly from the current estimates due to changed circumstances prevailing at the time of such realisation.

(iv) The Stock Units have historically been relatively illiquid and trading liquidity may decline following the Offer Period. Additionally, the Revised UE Offers have become unconditional and even if the listing status of the Stock Units and Convertible Bonds is retained, it is possible that the prices of the Stock Units and the Convertible Bonds may decline from current levels following the close of the Revised UE Offers.

(v) Except with SIC’s consent the Offeror and any person acting in concert with the Offeror may not within six (6) months from the close of the Revised UE Offers make a second offer to, or acquire any Stock Units from, any Stockholder on terms better than those made available under the Revised UE Offers. The Offeror and any person acting in concert with the Offeror may also not enter into any special deals (as defi ned in the Code) with any Stockholder.”

Stockholders and Bondholders should read and consider carefully the key considerations relied upon by KPMG, in arriving at its advice to the Independent Directors, in conjunction with and in the context of the full text of the IFA Letter.

7.3 Recommendation of the Independent Directors

The Independent Directors, having considered carefully the terms of the Revised UE Offers and the advice given by KPMG to the Independent Directors in the IFA Letter, concur with KPMG’s assessment of the fi nancial terms of the Revised UE Offers and its recommendation thereon. Accordingly, the Independent Directors recommend that Stockholders and/or Bondholders should ACCEPT the Revised UE Offers.

In making the above recommendation, the Independent Directors wish to highlight to Stockholders

and Bondholders who are considering accepting the Revised UE Offers the factors highlighted by KPMG in Section 7.2 above.

Stockholders and/or Bondholders who are considering rejecting the Revised UE Offers should note the following factors highlighted by KPMG in Section 7.2 above:

“(i) There is no certainty that following the close of the Revised UE Offers, that the Company will meet the minimum public fl oat requirements under the rules of the Listing Manual of the SGX-ST. The Offeror has stated that in the event that the trading of the Stock Units and the Convertible Bonds on the SGX-ST is suspended pursuant to Rule 724 or Rule 1105 of the Listing Manual, the Offeror has no intention to undertake or support any action for any such listing suspension to be lifted. Stockholders or Bondholders would then hold unlisted Stock Units or Convertible Bonds which would be substantially less marketable.



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(v) Except with SIC’s consent the Offeror and any person acting in concert with the Offeror may not within six (6) months from the close of the Revised UE Offers make a second offer to, or acquire any Stock Units from, any Stockholder on terms better than those made available under the Revised UE Offers. The Offeror and any person acting in concert with the Offeror may also not enter into any special deals (as defi ned in the Code) with any Stockholder.”

Stockholders and Bondholders should read and consider carefully the recommendation of the Independent Directors and the advice of KPMG to the Independent Directors in respect of the Revised UE Offers in their entirety before deciding whether to accept or reject the Revised UE Offers. Stockholders and Bondholders are also urged to read the UE Offer Document, the UE Offers Revision Announcement and the Revision Notifi cation carefully.

8. ACTION TO BE TAKEN BY STOCKHOLDERS AND BONDHOLDERS

Stockholders and Bondholders who wish to accept the Revised UE Offers must do so not later than 5.30 p.m. on the Final Closing Date. Stockholders and Bondholders should refer to Section 4.3 of the UE Offeree Circular for the procedures for acceptance of the Revised UE Offers.

Stockholders and Bondholders who do not wish to accept the Revised UE Offers need not take any further action.

9. DIRECTORS’ RESPONSIBILITY STATEMENT

Th e Directors (including any Director who may have delegated detailed supervision of this Supplemental Letter) have taken all reasonable care to ensure that the facts stated and all opinions expressed in this Supplemental Letter (other than those relating to the UE Offeror and Appendices I, IV , V and VI) are fair and accurate and confi rm, having made all reasonable inquiries, that to the best of their knowledge, opinions expressed in this Supplemental Letter have been arrived at after due and careful consideration and there are no other facts not contained in this Supplemental Letter, the omission of which would make any statement in this Supplemental Letter misleading, and they jointly and severally accept full responsibility accordingly. In respect of the IFA Letter, the sole responsibility of the Directors has been to ensure that the facts stated therein with respect to WBL are fair and accurate.

Where any information in this Supplemental Letter has been extracted or reproduced from published or otherwise publicly available sources or obtained from the UE Offeror, the sole responsibility of the Directors has been to ensure that such information has been accurately and correctly extracted from such sources or, as the case may be, accurately refl ected or reproduced in this Supplemental Letter.

Yours faithfullyFor and on behalf of the Board

Kyle Lee Khai Fatt Benjamin C. Duster, IVDirector Director

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APPENDIX I

LETTER FROM KPMG TO THE INDEPENDENT DIRECTORS

The Independent DirectorsWBL Corporation Limited801, Lorong 7 Toa Payoh#07-00 Wearnes BuildingSingapore 319319 22 May 2013

Dear Sirs

Mandatory conditional cash offers to acquire all the issued ordinary stock units in the capital of, and all the outstanding convertible bonds due 10 June 2014 issued by, WBL Corporation Limited Unless otherwise defi ned in this letter (this “Letter”) to the Independent Directors (as defi ned below) or where the context otherwise requires, all terms defi ned in the supplemental letter to the stockholders (the “Stockholders”) and convertible bondholders (the “Bondholders”) of WBL Corporation Limited dated 2 2 May 2013 (the “Supplemental Letter”) shall have the same meaning when used in this Letter.

1. INTRODUCTION

On 30 January 2013 (the “UE Pre-conditional Offer Announcement Date”), J.P. Morgan (S.E.A.) Limited (“JPM”) announced, for and on behalf of UE Centennial Venture Pte. Ltd. (the “Offeror”), a wholly-owned subsidiary of United Engineers Limited (“UE”), the pre-conditional voluntary offers (the “UE Pre-conditional Offers”) for all the issued and paid-up ordinary stock units (the “Stock Units”) in the capital of, and all the outstanding convertible bonds due 10 June 2014 (the “Convertible Bonds”) issued by, WBL Corporation Limited (“WBL Corporation” or the “Company”), other than those already owned, controlled or agreed to be acquired by the Offeror and parties acting or presumed to be acting in concert with it (the “Concert Parties”). On 12 March 2013 (the “UE Formal Offer Announcement Date”), JPM announced, for and on behalf of the Offeror, the Stock Unit Offer and the Convertible Bonds Offer (as defi ned in the Offer Document (as defi ned below)) (together, the “Initial UE Offers”). On 9 May 2013 (the “ Revised UE Offers Announcement Date”), JPM announced (the “Revised UE Offers Announcement”), for and on behalf of the Offeror, that the Offeror had revised the Stock Unit offer price from S$4.15 to S$4.50 in cash per Stock Unit.

The Revised UE Offers (as defi ned below) are made subject to the terms and conditions set out in the offer document dated 27 March 2013 (the “Offer Document”), the FAA, FAT, the Bonds FAA, Bonds FAT (each as defi ned in the Offer Document) and the Revised UE Offers Announcement as the case may be.

As announced by the Company on 12 March 2013 and 15 May 2013, KPMG Corporate Finance Pte Ltd (“KPMG”) has been appointed and retained by the directors of the Company who are considered to be independent for the purposes of the Stock Unit Offer and the Convertible Bonds Offer (the “Independent Directors”), namely Mr. Kyle Lee Khai Fatt and Mr. Benjamin C. Duster, IV, to be their independent fi nancial adviser (“IFA”). This Letter sets out our views arising from our evaluation of the revised Stock Unit Offer and the revised Convertible Bonds Offer (collectively, the “Revised UE Offers”) from a fi nancial point of view, for inclusion in the Supplemental Letter, in connection with the Revised UE Offers.

2. TERMS OF REFERENCE

In the course of our evaluation of the Revised UE Offers, from a fi nancial point of view, we have, amongst other things:

(i ) reviewed certain publicly available fi nancial statements and other information relating to the WBL Group, as defi ned below, as well as certain information provided, and representations made, to us by the Directors (as defi ned below), senior executives, professional advisers and other authorised offi cers of the Company;

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(ii ) discussed the past and current business operations and fi nancial condition of WBL and its subsidiaries (the “WBL Group”) with senior executives and authorised offi cers of the Company;

(iii ) reviewed the reported prices, trading multiples and trading activity of the Stock Units and the shares of those publicly-listed companies in the WBL Group’s technology division;

(iv ) reviewed the fi nancial terms, to the extent publicly available, of certain comparable acquisition transactions and certain comparable companies;

(v ) participated in discussions with the Directors, senior executives and authorised offi cers of the Company with respect to the Revised UE Offers;

(vi ) reviewed and relied on certain internal fi nancial analyses prepared by, or at the direction of, the management of the Company relating to its business operations;

(vii ) reviewed the Offer Document, the Revised UE Offers Announcement, the Supplemental Letter and the Revision Notifi cation; and

(viii ) performed such other analyses, reviewed such other information and considered such other matters as we have deemed appropriate for the purposes of this Letter.

We were not a party to any negotiations in relation to the Revised UE Offers or related transactions. We were not requested to, and did not provide advice or opinion concerning the structure, the specifi c amounts of the Revised UE Offers or any other aspects of the Revised UE Offers, or to provide services other than the delivery of this opinion. We were not authorised to, and did not solicit, any expressions of interest from other parties with respect to the sale of all or any part of the Company or any other alternative transaction.

It is not within our terms of reference to comment on the merits of the Revised UE Offers, or evaluate or comment on the legal, strategic, and/or commercial merits and risks of the Revised UE Offers. We do not address the relative merits of the Revised UE Offers as compared to any alternative transaction or other alternatives, whether such alternatives are available or achievable.

For the purpose of our evaluation of the Revised UE Offers, from a fi nancial point of view, we have not relied on any fi nancial projections or forecasts in respect of the Company, its subsidiaries or associated companies, save for an estimate of the annual normalised corporate headquarter expenses and their proportionate allocation amongst the business divisions of the WBL Group, which were provided by the Directors.

Our terms of reference do not require us to express and we do not express, an opinion on the growth prospects or earnings potential of the WBL Group. We are therefore not expressing any opinion as to the price at which the Stock Units may trade upon completion of the Revised UE Offers or on the fi nancial performance of the WBL Group.

Such evaluations or comments are, and remain, the sole responsibility of the directors and the management of the Company (respectively, the “Directors” and the “Management”), although we may draw upon their views or make such comments in respect thereof (to the extent deemed necessary or appropriate by us) in arriving at our opinion.

The Directors have confi rmed to us that, having made all reasonable enquiries and to the best of their knowledge, information and belief, all material information available to them in connection with the WBL Group, the Revised UE Offers and the Supplemental Letter has been disclosed to us, and that such information is true, complete and accurate in all material respects and there are no omissions which may cause any information disclosed to us to be inaccurate, incomplete or misleading. The Directors have jointly and severally accepted the responsibility for the accuracy and completeness of such information. We have relied upon such confi rmation given by the Directors and the accuracy and completeness of all publicly available information and information given to us and have not independently verifi ed such information, whether written or verbal, and accordingly cannot and do not represent or warrant, expressly or impliedly, and do not accept any responsibility for, the accuracy, completeness or adequacy of such information.

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We have relied upon the assurances of the Directors that the Supplemental Letter has been approved by the Directors (including those who have delegated detailed supervision of the Supplemental Letter) who have taken all reasonable care to ensure that the facts stated with respect to the Company and opinions expressed (excluding those expressed in this Letter and excluding, in the case of the relevant Directors, the Independent Directors’ recommendation) in the Supplemental Letter are fair and accurate and that no material facts have been omitted. The Directors jointly and severally accept responsibility accordingly.

Where information relating to the Revised UE Offers, the Offeror, UE and its Concert Parties has been extracted from published or otherwise publicly available sources, the responsibility of the Directors has been to ensure that, having made reasonable enquiries, such information has been accurately and correctly extracted from the relevant sources.

We have held discussions with the Directors and the Management and have examined publicly available information as well as information, written and verbal, provided to us by the Directors, the Management and the other professional advisers of the Company. We have not independently verifi ed such information, whether written or verbal, and accordingly cannot and do not warrant or make any representation (whether express or implied) regarding, or accept any responsibility for, or liability for, independently verifying the accuracy, completeness or adequacy of such information.

Unless as otherwise stated, the opinion set forth herein is based solely on publicly available information and information provided by the Directors and the Management, and is predicated upon the economic and market conditions prevailing as at the Latest Practicable Date.

We have not conducted any valuation or appraisal of any assets or liabilities, nor have we evaluated the solvency of the Company, the Offeror or UE under applicable laws relating to bankruptcy, insolvency or other similar matters. We are not legal, regulatory or tax experts. We are fi nancial advisers only, and have relied on, without independent verifi cation, the assessments made by the advisers to the Company with respect to such issues.

In addition, we have assumed that the Revised UE Offers will be consummated in accordance with the terms set forth in the Offer Document without any waiver, amendment or delay of any terms or conditions or the imposition of any terms or conditions. We have assumed that all governmental, regulatory or other approvals and consents required for the Revised UE Offers will be obtained and that no delays, limitations, conditions or restrictions will be imposed that would have a material adverse effect on the contemplated benefi ts expected to be derived from the Revised UE Offers.

Our evaluation of the Revised UE Offers, from a fi nancial point of view, is based upon market, economic, industry, monetary, and other conditions in effect on, and the information made available to us as at the Latest Practicable Date. Events occurring after the date hereof may affect the contents of this Letter and the assumptions used in preparing it. We assume no responsibility to update, revise or reaffi rm our opinion in the light of any subsequent development after the Latest Practicable Date even if it might affect our opinion contained herein. Furthermore, we express no opinion with respect to the amount or nature of any compensation to any offi cers, directors, or employees of any party to the Revised UE Offers, or any class of such persons relative to the Revised UE Offers to be received by Stockholders or Bondholders in the Revised UE Offers or with respect to the fairness of any such compensation.

We have acted as IFA to the Independent Directors for the purposes of the Revised UE Offers and will receive a fee for our services in connection with the delivery of this Letter. KPMG may also seek to provide services to the Company or the Offeror and parties acting in concert with it in the future and expect to receive fees for rendering such services.

In expressing our opinion, we did not have regard to general or specifi c investment objectives, fi nancial situation, risk profi le, tax position or particular needs and constraints or other particular circumstances of any Stockholder, nor hold ourselves out as advisers to, any person other than the Independent Directors. As different Stockholders would have different investment profi les and objectives, we advise the Independent Directors to advise any individual Stockholder or Bondholder who may require specifi c advice in relation to their investment portfolio to consult their stockbroker, bank manager, solicitor, accountant, tax adviser or other professional adviser.

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For the avoidance of doubt, our opinion should not be relied on as a recommendation to any Stockholders as to whether they should accept or reject the Revised UE Offers, or any matters related thereto.

The Company has been separately advised by its own professional advisers in the preparation of the Supplemental Letter (other than this Letter and our letter in Appendix IV of the Supplemental Letter (the “2QFY2013 Letter”)). We have no role or involvement, and will not provide any opinion (fi nancial or otherwise) in the preparation, review and verifi cation of the Supplemental Letter (other than this Letter and the 2QFY2013 Letter). Accordingly, we take no responsibility for, and express no views (express or implied) on, the contents of the Supplemental Letter (except for this Letter and the 2QFY2013 Letter).

This Letter is for the information of the Independent Directors only and only in connection with the Revised UE Offers and may not be used for any other purpose. This Letter is not addressed to and may not be relied upon by any third party, including without limitation, Stockholders, employees or creditors of the Company. We do not assume responsibility to advise the Independent Directors and express no opinion on any decision they may take, and the actions (including recommendations made by the Independent Directors) shall remain the responsibility of the Independent Directors.

We would like to highlight that the analyses performed in this Letter have been conducted in accordance with the methods and subject to limitations described in Section 7 of this Letter. The Independent Directors may wish to advise Stockholders and Bondholders to read Section 7 of this Letter carefully, as it describes the basis and assumptions of our analyses, the analytical methods we have applied and limitations of the analyses performed in the course of our evaluation of the Revised UE Offers.

This Letter is governed by, and construed in accordance with, the laws of Singapore, and is strictly limited to the matters stated herein and does not apply by implication to any other matter. No other person may reproduce, disseminate or quote this Letter (or any part thereof) for any other purpose at any time and in any manner except with our prior written consent in each specifi c case.

Our opinion in relation to the Revised UE Offers should be considered in the context of the entirety of this Letter and the Supplemental Letter.

Statements which are reproduced in their entirety from the Offer Document and/or the Revised UE Offers Announcement are set out in this Letter within quotes and in italics and capitalised terms used within these reproduced statements bear the meanings ascribed to them in the Offer Document and/or the Revised UE Offers Announcement.

3. TERMS AND CONDITIONS OF THE REVISED UE OFFERS

Stockholders and Bondholders should by now have received or have access to a copy of the Revised UE Offers Announcement, the Offer Document and the Revis ion Notifi cation which, inter alia, set out the terms of the Revised UE Offers. The principal terms of the Stock Unit Offer and the Convertible Bonds Offer, as extracted from the Revised UE Offers Announcement and the Offer Document, are set out below.

3.1 The Stock Unit Offer

The Stock Unit Offer is being made for all the Stock Units not already owned, controlled or agreed to be acquired by the Offeror and the Concert Party Group (as defi ned in the Offer Document) (the “Offer Stock Units”), in accordance with Rule 14.1 of the Singapore Code on Take-overs and Mergers (“the Code”) and on the terms and subject to the conditions set out in the Offer Document, the FAA and the FAT.

The Stock Unit Offer is described in paragraph 2 of the Offer Document and paragraph 3 of the Revised UE Offers Announcement, excerpts of which are reproduced below.

“2.3 Offer Stock Units

The Stock Unit Offer is extended, on the same terms and conditions, to:

(a) all the Conversion Stock Units; and

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(b) all the issued Stock Units owned, controlled or agreed to be acquired by the Concert Parties (other than the Concert Party Group).

For the purposes of the Stock Unit Offer, the expression “Offer Stock Units” shall include the aforesaid Stock Units.

...

2.9 Warranty

A Stockholder who tenders his Offer Stock Units in acceptance of the Stock Unit Offer will be deemed to unconditionally and irrevocably represent, warrant and undertake to the Offeror that he sells such Offer Stock Units as or on behalf of the benefi cial owner(s) thereof, fully paid and free from all Encumbrances and together with all rights, benefi ts, entitlements and advantages attached thereto as at the Pre-Conditional Offers Announcement Date and thereafter attaching thereto, including the right to all Distributions (if any), the Stock Units Record Date for which falls on or after the Pre-Conditional Offers Announcement Date.

...

3.1 Final Stock Unit Offer Price

Pursuant to Rule 21.1 of the Code, J.P. Morgan wishes to announce, for and on behalf of the Offeror, that the Offeror is revising the Original Stock Unit Offer Price as follows:

For each Offer Stock Unit: S$4.50 in cash (the “Final Stock Unit Offer Price”).

The Offeror does not intend to further revise the Final Stock Unit Offer Price.

Stockholders who have earlier accepted the Stock Unit Offer are entitled to receive the Final Stock Unit Offer Price, subject to the Stock Unit Offer becoming unconditional in all respects in accordance with its terms. Accordingly, no further action in respect of the Stock Unit Offer is required to be taken by Stockholders who have already accepted the Stock Unit Offer.

...

3.3 Adjustments for Distributions

Without prejudice to the generality of the foregoing, the Final Stock Unit Offer Price has been determined on the basis that the Offer Stock Units will be acquired with the right to receive any Distributions, the Stock Units Record Date for which falls on or after the Pre-Conditional Offers Announcement Date. In the event of any such Distribution, the Final Stock Unit Offer Price payable to a Stockholder who validly accepts or has validly accepted the Stock Unit Offer shall be reduced by an amount which is equal to the amount of such Distribution as follows, depending on when the Offer Settlement Date falls:

(a) if the Offer Settlement Date falls on or before the Stock Units Record Date, the Offeror will pay the relevant accepting Stockholders the Final Stock Unit Offer Price of S$4.50 in cash for each Offer Stock Unit, as the Offeror will receive the Distribution in respect of such Offer Stock Units from WBL; and

(b) if the Offer Settlement Date falls after the Stock Units Record Date, the Final Stock Unit Offer Price payable for such Offer Stock Units tendered in acceptance shall be reduced by an amount which is equal to the Distribution in respect of such Offer Stock Units, as the Offeror will not receive such Distribution from WBL.

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3.4 No Adjustment for Interim Dividend

As stated in the announcement by the Company dated 8 May 2013, the Company has declared an interim tax-exempt (one-tier) dividend of S$0.05 per Stock Unit (the “Interim Dividend”) payable on 1 August 2013 to Stockholders on the Register of Members of WBL on 11 July 2013 (the “Interim Dividend Record Date”). Based on the foregoing and the Final Closing Date, subject to the Stock Unit Offer becoming unconditional as to acceptances, the Offer Settlement Date will fall before the Interim Dividend Record Date and accordingly, the Final Stock Unit Offer Price of S$4.50 in cash for each Offer Stock Unit will not be adjusted for the Interim Dividend.”

3.2 The Convertible Bonds Offer

The Convertible Bonds Offer is being made for all the Convertible Bonds other than those already owned, controlled or agreed to be acquired by the Offeror and the Concert Party Group (the “Offer Convertible Bonds”) in accordance with Rule 19 of the Code and on the terms and subject to the conditions set out in the Offer Document, the Bonds FAA and the Bonds FAT.

The Convertible Bonds Offer is described in paragraph 3 of the Offer Document and paragraph 4 of the Revised UE Offers Announcement, excerpts of which are reproduced below.

“3.5 Offer Convertible Bonds

The Convertible Bonds Offer is extended, on the same terms and conditions, to all the Convertible Bonds owned, controlled or agreed to be acquired by the Concert Parties (other than the Concert Party Group).

3.6 Minimum Denomination

Pursuant to the Convertible Bonds Conditions, the Convertible Bonds are issued in registered form in the denomination of S$1.00 or integral multiples thereof. Accordingly, a Bondholder should accept the Offer Convertible Bonds in integral multiples of S$1.00 in principal amount of Offer Convertible Bonds and in any case not less than S$3.00 in principal amount of Offer Convertible Bonds, given that the Conversion Price is S$2.29 for a single Conversion Stock Unit and no fractions of a Conversion Stock Unit will be issued on conversion of the Offer Convertible Bonds.

3.7 No Encumbrances

The Offer Convertible Bonds will be acquired fully paid and free from all Encumbrances and together with all rights, interests, benefi ts, entitlements and advantages attached thereto as at the Pre-Conditional Offers Announcement Date and thereafter attaching thereto, including the right to all Distributions (if any), the Bonds Record Date for which falls on or after the Pre-Conditional Offers Announcement Date but excluding the Excluded Interest Payment.

In the event of any such Distribution or if any right arises for any reason whatsoever (other than the Excluded Interest Payment) on or after the Pre-Conditional Offers Announcement Date for the benefi t of a Bondholder who validly accepts or has validly accepted the Convertible Bonds Offer, the Offeror reserves the right to reduce the Convertible Bonds Offer Price payable to such Accepting Bondholder by the amount of such Distribution, subject to consultation with the SIC.

3.8 Revision of Terms of the Convertible Bonds Offer

The Offeror reserves the right to revise the terms of the Convertible Bonds Offer in accordance with the Code, including a revision of the Convertible Bonds Offer Price in accordance with Rule 19 of the Code in the event the Stock Unit Offer Price is revised by the Offeror.

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3.9 Warranty

A Bondholder who tenders his Offer Convertible Bonds in acceptance of the Convertible Bonds Offer will be deemed to unconditionally and irrevocably represent, warrant and undertake to the Offeror:

(a) that he sells such Offer Convertible Bonds as or on behalf of the benefi cial owner(s) thereof, free from all Encumbrances together with all rights, interests, benefi ts and entitlements attached thereto as at the Pre-Conditional Offers Announcement Date and thereafter attaching thereto, including the right to all Distributions (if any), the Bonds Record Date for which falls on or after the Pre-Conditional Offers Announcement Date but excluding the Excluded Interest Payment; and

(b) on the terms set out in Appendix 5 to this Offer Document.

3.10 Stock Unit Offer and Convertible Bonds Offer Mutually Exclusive

For the avoidance of doubt, whilst the Convertible Bonds Offer is conditional upon the Stock Unit Offer becoming or being declared unconditional, the Stock Unit Offer is not conditional upon acceptances received in relation to the Convertible Bonds Offer. The Stock Unit Offer and the Convertible Bonds Offer are separate and mutually exclusive. The Convertible Bonds Offer does not form part of the Stock Unit Offer and vice versa.

Without prejudice to the foregoing, if a Bondholder converts his Convertible Bonds in order to accept the Stock Unit Offer in respect of the Conversion Stock Units arising pursuant to such conversion, he may not accept the Convertible Bonds Offer in respect of such Convertible Bonds. Conversely, if a Bondholder wishes to accept the Convertible Bonds Offer in respect of his Convertible Bonds, he may not convert those Convertible Bonds in order to accept the Stock Unit Offer in respect of such Conversion Stock Units arising pursuant to such conversion.

...

4.1 Final Convertible Bonds Offer Price

As a consequence of the Stock Unit Offer Price Revision, the offer price for the relevant principal amount of Offer Convertible Bonds (the “Final Convertible Bonds Offer Price”) tendered in acceptance of the Convertible Bonds Offer is accordingly revised, in accordance with Rule 19 of the Code, to be the “see-through” price which is equal to the Final Stock Unit Offer Price multiplied by the number of Conversion Stock Units into which such principal amount of Offer Convertible Bonds may be converted (rounded down to the nearest Conversion Stock Unit).

For purely illustrative purposes only, the Final Convertible Bonds Offer Price will be as follows:

For every S$1,000 in principal amount of Offer Convertible Bonds: S$1,962 in cash.

Bondholders who have earlier accepted the Convertible Bonds Offer are entitled to receive the Final Convertible Bonds Offer Price, subject to the Stock Unit Offer becoming unconditional in all respects in accordance with its terms. Accordingly, no further action in respect of the Convertible Bonds Offer is required to be taken by Bondholders who have already accepted the Convertible Bonds Offer.”

4. INFORMATION ON THE COMPANY

Information on the Company is set out in paragraph 9 of the Offer Document.

5. INFORMATION ON THE OFFEROR AND UE

Information on the Offeror and UE is set out in paragraph 8, Appendix 6 and Appendix 7 of the Offer Document.

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6. RATIONALE FOR THE INITIAL UE OFFERS, REVISED UE OFFERS AND THE OFFEROR’S INTENTIONS RELATING TO THE COMPANY AND ITS LISTING STATUS

The rationale for the Revised UE Offers and the Offeror’s intentions relating to the Company and its listing status are provided in paragraphs 10 and 11 of the Offer Document, excerpts of which are reproduced below.

“10.1 Rationale for the Offers

UE and the Offeror believe that the Offers would enable the UE Group to:

(a) expand and diversify the UE Group’s development property portfolio and to a lesser extent, its investment property portfolio by acquiring an interest in an attractive mix of properties under development;

(b) gain exposure to long-term growth opportunities in the property market of PRC;

(c) harness synergies, particularly between properties, construction and engineering, which should strengthen the UE Group’s presence across the infrastructure value chain;

(d) acquire an interest in WBL’s automotive business which can be another potential engine of growth for the UE Group as well as an additional source of recurring income; and

(e) explore opportunities to enhance value across WBL’s diverse portfolio of businesses.

10.2 The Offeror’s Intentions relating to WBL

If the Offeror succeeds in the Offers, it plans to participate in a review of WBL’s businesses together with the WBL Board and management with a view to ascertaining the viability of the above rationale before actual implementation.

Save as disclosed above, the Offeror presently has no intention to (i) introduce any major changes to the existing businesses of the WBL Group, (ii) redeploy the fi xed assets of the WBL Group or (iii) discontinue the employment of existing employees of the WBL Group, in each case, other than in the ordinary course of business. However, the Offeror retains the fl exibility at any time to consider any options or opportunities in relation to the WBL Group which may present themselves and which it may regard to be in the interest of WBL.

…

11.2 Listing Status

Pursuant to Rule 1105 of the Listing Manual, upon an announcement by the Offeror that acceptances have been received pursuant to the Stock Unit Offer that bring the holdings owned by the Offeror and its Concert Parties to above 90% of the total number of issued Stock Units (excluding Stock Units held in treasury), the SGX-ST may suspend the trading of the Stock Units and the Convertible Bonds on the SGX-ST until such time it is satisfi ed that at least 10% of the total number of issued Stock Units (excluding Stock Units held in treasury) are held by at least 500 Stockholders who are members of the public. Under Rule 1303(1) of the Listing Manual, if the Offeror succeeds in garnering suffi cient acceptances, thus causing the percentage of the total number of issued Stock Units (excluding Stock Units held in treasury) held in public hands to fall below 10%, the SGX-ST will suspend trading of the Stock Units and the Convertible Bonds at the close of the Stock Unit Offer.

In addition, under Rule 724 of the Listing Manual, if the percentage of the total number of issued Stock Units (excluding Stock Units held in treasury) held in public hands falls below 10%, WBL must, as soon as practicable, announce that fact and the SGX-ST may suspend the trading of all the Stock Units and the Convertible Bonds. Rule 725 of the Listing Manual states that the SGX-ST may allow WBL a period of three months, or such longer period as the SGX-ST may agree, to raise the percentage of Stock Units (excluding Stock Units held in treasury) in public hands to at least 10%, failing which WBL may be delisted from the SGX-ST.

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It is not the intention of the Offeror to preserve the listing status of WBL. In the event that the trading of Stock Units and the Convertible Bonds on the SGX-ST is suspended pursuant to Rule 724 or Rule 1105 of the Listing Manual, the Offeror has no intention to undertake or support any action for any such listing suspension by the SGX-ST to be lifted. If trading in the Stock Units and Convertible Bonds on the SGX-ST is suspended and/or WBL is delisted, Stockholders and Bondholders who do not accept the Offers are likely to fi nd it diffi cult to sell their Stock Units and/ or Convertible Bonds (as the case may be). This may have a negative impact on the market value of their investments. Even if trading in the Stock Units and Convertible Bonds on the SGX-ST is not suspended and WBL is not delisted, Stockholders and Bondholders should consider the risk that the market price of the Stock Units may fall back to levels before the Unaffected Date due to absence of a takeover offer at a premium to such levels and further reduced trading liquidity.”

7. FINANCIAL EVALUATION OF THE STOCK UNIT OFFER AND THE CONVERTIBLE BONDS OFFER

We have confi ned our evaluation to the fi nancial terms of the Stock Unit Offer and the Convertible Bonds Offer. Our analysis of the Stock Unit Offer is set out in Section 8 of this Letter and our analysis of the Convertible Bonds Offer is set out in Section 9 of this Letter. In evaluating the Stock Unit Offer and Convertible Bonds Offer, from a fi nancial point of view, we have performed our analyses based on publicly available information or information made available to us by the Company as at the Latest Practicable Date and the fi gures and underlying fi nancial data used in our analyses in this Letter have been extracted from various sources as noted herein. We have not independently verifi ed (nor have we assumed responsibility or liability for independently verifying) or ascertained and make no representation or warranty, expressed or implied, on the accuracy or completeness of such information.

7.1 Evaluation of the fi nancial terms of the revised Stock Unit Offer

We note that the revised consideration for each Offer Stock Unit will be in cash as follows:

For each Offer Stock Unit:

S$4.50 in cash (the “Stock Unit Consideration”).

7.2 Evaluation of the fi nancial terms of the revised Convertible Bonds Offer

We note that the revised Convertible Bonds consideration (the “Convertible Bonds Consideration”) for the relevant principal amount of the Convertible Bonds tendered in acceptance of the Convertible Bonds Offer is the “see-through” price, which is equal to the Stock Unit Consideration multiplied by the number of Conversion Stock Units into which such principal amount of Offer Convertible Bonds may be converted (rounded down to the nearest Conversion Stock Unit).

7.3 General bases and assumptions underlying our analyses

The fi gures and underlying fi nancial data used in our analyses in Section 8 of this Letter have been extracted from, inter alia, Bloomberg, Capital IQ, Thomson One Banker, Mergermarket, the Singapore Exchange Securities Trading Limited (“SGX-ST”), management information provided by the Company, fi nancial statements of the Company’s subsidiaries, fi nancial information relating to associated companies of the WBL Group and relevant public documents of those respective companies covered by those sources as at the Latest Practicable Date. In the course of our evaluation, we have relied upon this information and it has formed a substantial basis of our opinion. We have not independently verifi ed (nor have we assumed responsibility or liability for independently verifying) or ascertained and make no representations or warranties, express or implied, on the accuracy or completeness or adequacy of such information. We note that the generally accepted accountancy principles (“GAAP”) used by the respective comparable companies may be different. The differences between Singapore GAAP used by the Company and the respective GAAP used by the comparable companies or targets of the comparable transactions may therefore render comparisons between these companies less useful than if they all used the same GAAP.

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After trading hours on 26 November 2012, Standard Chartered Bank announced, for and on behalf of The Straits Trading Company Limited (“STC”), the possible mandatory conditional offer for all the Stock Units of WBL Corporation, other than all Stock Units already owned, controlled or agreed to be acquired by STC and parties acting or presumed to be acting in concert with STC (the “STC Offer”). In the course of our evaluation we have assumed that the share price of WBL Corporation leading up to, and including this date to be unaffected by the STC Offer, Initial UE Offers and the Revised UE Offers and accordingly, we have considered 26 November 2012 to be the last trading date on which the Stock Units were unaffected by the STC Offer, the Initial UE Offers or the Revised UE Offers (the “Last Unaffected Share Price Date”).

In the course of our work, we have reviewed the balance sheets as at 31 March 2013 prepared by Management for all of the subsidiaries and joint ventures (collectively, the “WBL Entities”) of the Company, as well as the reconciliation adjustments that have been made to arrive at WBL Corporation’s reported consolidated fi nancial statements. We note that WBL Corporation does not prepare consolidated accounts at the intermediate holding company levels and accordingly, we have made reconciliation adjustments to certain WBL Entities to arrive at estimates of the net asset values for each of the WBL Entities.

In the course of our analysis, we have relied on the basis that the share capital of the Company as of the Latest Practicable Date comprises 277,278,035 Stock Units excluding treasury stock units. We have also relied on the basis that as at the Latest Practicable Date, there are no outstanding Options granted under the Company’s share option scheme. Given that the conversion price for the Convertible Bonds of S$2.29 for each Stock Unit is signifi cantly less than the Stock Unit Offer, we have assumed that all the Convertible Bonds in issue would be converted to Stock Units, which would result in an increase of 4,095,958 Stock Units in the Company. Therefore, we have applied the fully diluted share capital of 281,373,993 Stock Units in performing our analyses.

We have applied the following exchange rates, taken from Bloomberg as at the Latest Practicable Date, in our analyses.

SGD/CNY: 4.887;

SGD/MYR: 2.4053;

SGD/THB: 23.7154;

SGD/USD: 0.7942;

SGD/EUR: 0.6186; and

SGD/IDR: 7,765.04.

Unless otherwise stated, all monetary values in this Letter are denominated in Singapore Dollars (SGD).

7.4 Relative valuation metrics

We have considered the following valuation metrics in our application of relative valuation approaches provided in Sections 8 and 9 of this Letter:

(i) EV/Revenue – The “Enterprise Value” or “EV” is the sum of a company’s market capitalisation, preferred equity, minority interests, pension deficits, short and long term debt less its investments in associated companies, other long term investments and cash and cash equivalents. “Revenue” is income that a company receives from its normal business activities, typically from the sale of goods or provision of services to its customers. The EV/Revenue multiple provides a measure of corporate value for each dollar of revenue.

(ii) EV/EBITDA – “EBITDA” stands for historical earnings before interest, tax, depreciation and amortisation expenses. The EV/EBITDA multiple illustrates the market value of a company’s business relative to its historical pre-tax operating cashfl ow performance, without regard to the company’s capital structure.

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(iii) P/E – The “Price to Earnings” multiple illustrates the ratio of the market price of a company’s shares relative to its earnings per share. The P/E ratio is affected by, inter alia, the capital structure of a company, its tax position as well as its accounting policies relating to depreciation and intangible assets.

(iv) P/NAV – The “Price to Net Asset Value” multiple illustrates the ratio of the market capitalisation of a company relative to its net asset value. The P/NAV multiple is affected by differences in accounting policies, in particular depreciation and asset valuation policies.

It should be noted that any comparisons made for a particular business with respect to the comparable companies or targets of precedent transactions that we have selected for that business may not necessarily reflect the perceived market valuation of that business, as the comparable companies or targets of precedent transactions would not be identical to that business in terms of their commercial activities, scale of operations, market capitalisation, capital structure, risk profi le, geographical spread of activities, fi nancial condition, track record, future prospects and other relevant criteria. Further, the analyses we have performed in identifying and selecting comparable companies or precedent transactions may not result in an exhaustive list of such companies or transactions. As such, any comparisons made merely serves as an illustrative guide and any conclusions drawn from such comparisons made may not necessarily refl ect the possible market valuation for a particular business.

For each set of comparable companies or precedent transaction analysis we have performed in this Letter, we may not have applied all the above valuation metrics. In each case, we have applied our professional judgment in selecting appropriate valuation metrics based on the nature of the business being analysed or the industry in which the business operates in, and our understanding of the value drivers for that business.

The valuation statistics of the comparable companies provided in this Letter are based on their last transacted share prices as at the Latest Practicable Date. Unless otherwise stated, all earnings bases (or balance sheet fi gures) referenced in comparable companies analysis are based on trailing 12-month (or latest published balance sheet, irrespective of whether they have been audited) fi gures. It should be noted that we have adjusted the trailing 12-month (“T12M”) fi nancial earnings fi gures of each of the businesses to exclude share of results of associated companies and non-recurring items.

Multiples for precedent transactions have been extracted from Thomson One Banker, Mergermarket, Capital IQ and company fi lings. Where possible, we have attempted to make the same adjustments in the calculation of these multiples as we have made in the calculation of the comparable companies (as described above). However, as the majority of targets in the precedent transactions that have been identifi ed are private entities and, due to the lack of publicly available information on the majority of such entities, it was not possible to ensure that all the relevant adjustments (as described above) have been made in the calculation of the multiples for precedent transactions.

Where we have estimated the Enterprise Value of a majority-owned or wholly-owned business by reference to the current valuation metrics of the comparable companies we have identifi ed for that business, we have not applied any control premium or a discount for lack of marketability as the quantifi cation of such a premium or discount is highly subjective for a private enterprise. It is also not uncommon for professional valuers to tailor the implied valuation metrics of the selected comparable companies to account for differences in the business’ scale of operations, geographical markets, fi nancial condition, competitive position and track record, amongst other things. We note that such adjustments are highly subjective as they require the application of a valuer’s professional judgment and therefore, we have not attempted to attribute any discounts or premiums to the valuation metrics we have derived from our comparable companies or precedent transaction analyses.

We further note that the implied EV/Revenue, EV/EBITDA, P/E and P/NAV multiples are and will continue to be affected to varying extents by changes in, inter alia, market, economic, political, industry, monetary and other general macroeconomic conditions as well as company-specifi c factors. Accordingly, the historical EV/Revenue, EV/EBITDA, P/E and P/NAV multiples should not be relied upon as a guide of future trading performance.

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For those businesses for which we have estimated Enterprise Value, we have subtracted the net debt of the relevant entity to arrive at an estimate of equity value. For each of the WBL Entities, we have calculated net debt as the sum of post employment benefi ts and other long term benefi ts, the short and long term debt and hire purchase creditors less cash and cash equivalents, as of 31 March 2013. As our estimated Enterprise Values for each of the businesses do not account for investment in associated companies and other long term investments, we have added a value for such associated companies and long term investments based on their carrying values as of 31 March 2013 or their current market values.

7.5 Net asset value (“NAV”) and revalued net asset value (“RNAV”)

7.5.1 NAV

There are a number of subsidiaries, joint ventures and associated companies within the WBL Corporation group of companies, some of whose fi nancials are not publicly available. Although a number of these subsidiaries, joint ventures and associated companies are classifi ed as being dormant, under liquidation or engaged in investment holding, these entities continue to hold tangible assets and liabilities which are material when aggregated on a divisional or group basis. For those subsidiaries, joint ventures and associated companies which the Management has indicated are not operational, we have estimated the equity value for those entities on the basis of their NAV.

We have calculated the NAV for each of the aforementioned WBL Entities based on their balance sheets as at 31 March 2013 and the related group reconciliation adjustments which have been prepared by the Management. As these management accounts are not prepared on a consolidated basis but on an individual entity basis, we have adjusted the NAV for each of the entities for intercompany transactions, investments in subsidiaries, associated companies and joint ventures, goodwill, dividends payable and dividends receivable and other group level adjustments.

Where relevant fi nancial information has been provided to us by the Management, we have also attributed a value to the associated companies within, and equity investments held by, the WBL Group. The estimates of value for each of the associated companies or equity investments has been based as at 31 March 2013 on information provided by the Management, and market values as at the Latest Practicable Date.

7.5.2 RNAV

The WBL Group owns a large portfolio of property investments. These investment properties are carried at cost less accumulated depreciation and accumulated impairment losses. Additionally, WBL Corporation’s property division (the “Property Division”) holds a substantial number of property assets in the People’s Republic of China (the “PRC Properties” and each a “PRC Property”) including properties which are in various stages of development. The costs of the properties under development are capitalised and any expected losses are provided for. Unsold development properties are carried at the lower of cost and net realisable value.

In order to ascertain the RNAV for certain investment holding entities within the WBL Group, we have relied on the revaluation estimates of certain development and investment properties as provided by the Company and valuation reports by Shanghai Lixin Appraisal Ltd (“Shanghai Lixin”), Knight Frank Pte Ltd, CBRE Pte Ltd and Henry Butcher Malaysia (Pontian) Sdn Bhd (collectively, the “Independent Valuers”). The full valuation reports (the “Valuation Reports”), which are described in Appendix II of the Supplemental Letter, have been made available for inspection. Additionally, we have considered Shanghai Lixin’s supplementary report (the “Supplementary Report”) on the PRC Properties, which can be found in Appendix VI of the Supplemental Letter. We have also held discussions with Shanghai Lixin and have relied on further assumptions provided to us by the Management in the course of our evaluation of the PRC Properties.

We have placed sole reliance on such information provided to us by the Management and do not assume any responsibility about the bases of such valuations or if the contents thereof have been prepared in accordance with all applicable regulatory requirements including Rule 26 of the Code. In relying on fi nancial analyses and estimates provided to us by the Management, we have assumed, inter alia, that they have been reasonably prepared based on assumptions refl ecting the best currently available estimates and judgments by the Management as to the estimated future cash fl ows referred to above.

21

We express no view as to such analyses or estimates or the assumptions on which they were based. We have not independently verifi ed (nor have we assumed responsibility or liability for independently verifying) or ascertained and make no representations or warranties, express or implied, on the accuracy or completeness or adequacy of such information.

7.6 Valuation of shares in publicly-listed entities

The stakes held by the WBL Group in publicly listed entities have been valued at their market prices as at the Latest Practicable Date. Where the WBL Group owns a controlling stake in a publicly-listed entity, we have also considered a control premium of 15% to the prevailing market values of the shares in the entity to calculate the upper range of the estimated value for these particular investments.

7.7 Conglomerate corporate structure

The Independent Directors should note that a discount may be applied on the sum-of-the-parts valuation of a conglomerate such as the Company for various reasons. In an effi cient capital market, investors can generally diversify more effectively by purchasing a portfolio of stocks of focused fi rms as compared to purchasing stocks of a conglomerate investing in a range of diverse businesses. A valuation discount may also be applied as conglomerates are generally believed to use capital less effi ciently. In arriving at the sum-of-the-parts valuation of the WBL Group, we have not applied any conglomerate discount as (i) the objective is to derive an intrinsic value rather than the value that the stock market would place on a conglomerate, and (ii) the quantifi cation of such discount is in any case highly subjective. The conglomerate discount is dependent on, inter alia, the size of the conglomerate, the extent of business diversifi cation or synergies (if any) within the conglomerate and the requirement for additional management as compared to standalone businesses.

8. FINANCIAL EVALUATION OF THE STOCK UNIT OFFER

In evaluating the Stock Unit Offer, from a fi nancial point of view, we have performed our analyses based on publicly available information or information made available to us by the Company as at the Latest Practicable Date. The fi gures and underlying fi nancial data used in our analyses in this section of this Letter have been extracted from various sources as noted herein. We have not independently verifi ed (nor have we assumed responsibility or liability for independently verifying) or ascertained and make no representation or warranty, expressed or implied, on the accuracy or completeness of such information.

8.1 Methodology

For the purposes of assessing the Stock Unit Consideration, we have taken into consideration the following factors:

(i) market quotation and trading activity of the Stock Units;

(ii) historical multiples analysis;

(iii) comparison with recently completed take-overs in Singapore; and,

(iv) sum-of-the-parts valuation of the WBL Group.

8.2 Market quotation and trading activity of the Stock Units

The market valuation of the shares of a company (traded on a recognised stock exchange) provides a possible perspective on its fi nancial value. Accordingly, we have considered the current and historical price performance of the Stock Units.

We wish to highlight that under ordinary circumstances the market valuation of the shares of a company (traded on a recognised stock exchange) may be affected by, inter alia, the relative liquidity, the size of the free fl oat, the extent of applicable research coverage and investor interest, and the general market sentiment at a given point in time. Accordingly, this analysis serves as an illustrative guide only.

22

Comparison against the rebased Straits Times Index (the “Rebased STI”)

We have analysed the historical price of the Stock Units. We have also compared the market price performance of the Stock Units against the Rebased STI, which is a composite of the top 30 companies listed on the Mainboard of the SGX-ST selected by full market capitalisation over the three (3) year period preceding the Last Unaffected Share Price Date through to the Latest Practicable Date.

Figure 1

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

S$2.0

S$2.5

S$3.0

S$3.5

S$4.0

S$4.5

S$5.0

S$5.5

S$6.0

S$6.5

Nov 09 Feb 10 May 10 Aug 10 Nov 10 Feb 11 May 11 Aug 11 Nov 11 Feb 12 May 12 Aug 12 Nov 12 Feb 13

Trading volume (000) WBL (S$) Rebased STI

1

Stock Unit Consideration: S$4.50

2 3 4 6 7 9 10 11 12 13 14 15 16 1817 19 205 8 21 22

23/24

25/26

27 28/29

Source: Capital IQ

23

Table 1

Selected Company announcements

Pt. Date Announcement Pt. Date Announcement

1 30 Nov 09 Announcement of FY2009 results 16 28 Sep 12 Announcement of cessation of CFO, Tan Choon Han due to health reasons, and the appointment of Wong Heang Tuck as Group CFO

2 11 Feb 10 Announcement of fi rst quarter 2010 results

17 07 Nov 12 Announcement of cessation of Tan Choon Seng as Group Chief Executive Offi cer (“CEO”)

3 05 May 10 Acquisition of a 78% interest in Suzhou Industrial Park Jia Wu Heng Ye Property Development Co. Ltd (a joint venture) by injecting RMB 400m in capital

18 14 Nov 12 Announcement of FY2012 results

4 13 May 10 Announcement of second quarter 2010 results

19 26 Nov 12 Announcement of the possible mandatory conditional offer by STC

5 07 Aug 10 Announcement of third quarter 2010 results

20 16 Jan 13 Announcement of approval of STC’s Proposed Acquisitions by STC’s shareholders

6 09 Nov 10 Announcement of FY2010 results 21 30 Jan 13 UE Pre-Condi t iona l Of fer Announcement Date

7 10 Feb 11 Announcement of cessation of Group Chief Financial Officer (“CFO”), Victoria Ko Miu Ha

22 04 Mar 13 Announcement of close and lapse of the STC Offer

8 14 Feb 11 Announcement of fi rst quarter 2011 results

23 11 Mar 13 Announcement of fi rst quarter 2013 results


24 12 Mar 13 UE Formal Offer Announcement Date


25 24 Apr 13 Announcement of extension of UE Offers till 10 May 2013

11 19 Oct 11 Entered into a strategic partnership with Samsung China Investment in relation to property development projects in China

26 26 Apr 13 Profi t guidance for second quarter 2013 results, announcing that WBL Corporation expected to incur a net loss for the period

12 11 Nov 11 Announcement of FY2011 results 27 08 May 13 Announcement of second quarter 2013 results

13 10 Jan 12 Announcement that Norman Ip Ka Cheung will assume Chairman position from Ng Ser Miang

28 09 May 13 Revised UE Offers Announcement Date


29 13 May 13 STC accepted the Revised UE Offers and the Revised UE Offers declared unconditional


Source: Company Filings, Factiva

Having benchmarked the Stock Unit price movement against the Rebased STI, we observe that the Stock Unit price of the Company underperformed against the Rebased STI for the period commencing November 2009 and ending on the Latest Practicable Date.

Liquidity analysis of the Stock Units

Ordinarily, share prices may be affected by different factors including relative liquidity, free fl oat and investor interest or market sentiment at a given point in time. In considering the Stock Unit Consideration relative to the Company’s historical share price, we have considered the relative liquidity of the Company in comparison with companies listed on the SGX-ST of comparable market capitalisation. This analysis is to check whether historical trading prices provide a meaningful reference point for comparison against the Stock Unit Consideration.

24

Table 2

Liquidity analysis of WBL Corporation’s Stock Units relative to SGX-ST listed entities of comparable market capitalisation(1)

Company

Market capitalisation (S$ million)

Average daily value traded

for the past 12 months

(S$ million)(2)

Average daily volume for the past 12 months (million)(3)

Shares outstanding

(million)

Average daily value as % of market

capitalisation(4)

Avg daily volume as

% of shares outstanding(5)

CapitaRetail China Trust 1,159.74 0.852 0.615 748.22 0.073% 0.082%

UOB-Kay Hian Holdings Limited

1,152.29 0.294 0.180 724.71 0.026% 0.025%

HO Bee Investment Ltd. 1,114.43 0.597 0.454 696.52 0.054% 0.065%

Hong Leong Finance Limited 1,080.99 0.303 0.126 441.22 0.028% 0.029%

Hyfl ux Ltd. 1,068.48 2.697 1.420 825.08 0.252% 0.172%

The Straits Trading Company Limited

1,042.87 0.012 0.004 325.90 0.001% 0.001%

Lippo Malls Indonesia Retail Trust

1,015.48 1.395 3.407 2,183.82 0.137% 0.156%

Ezra Holdings Ltd. 1,012.47 8.643 7.823 973.53 0.854% 0.804%

LionGold Corp Ltd 977.79 17.296 15.937 913.83 1.769% 1.744%

Silverlake Axis Ltd. 975.73 0.407 1.111 2,098.35 0.042% 0.053%

GMG Global Ltd. 942.20 2.684 20.126 7,660.20 0.285% 0.263%

Tat Hong Holdings Ltd. 844.82 0.669 0.590 640.01 0.079% 0.092%

Cache Logistics Trust 842.90 1.281 1.189 702.42 0.152% 0.169%

Sinarmas Land Limited 836.54 0.056 0.175 3,041.96 0.007% 0.006%

Frasers Commercial Trust 804.14 0.887 0.877 645.90 0.110% 0.136%

GuocoLeisure Limited. 798.90 0.482 0.781 1,320.50 0.060% 0.059%

Ying Li International Real Estate Ltd.

789.48 1.886 5.524 2,162.95 0.239% 0.255%

Cambridge Industrial Trust 779.27 0.513 0.347 1,208.17 0.066% 0.029%

United Engineers Ltd. 743.15 0.736 0.314 303.33 0.099% 0.103%

CWT Limited 731.98 0.571 0.468 590.30 0.078% 0.079%

Min 731.98 0.012 0.004 303.33 0.001% 0.001%

Mean 935.68 2.113 3.073 1,410.34 0.221% 0.216%

Median 958.97 0.702 0.698 786.65 0.079% 0.087%

Max 1,159.74 17.296 20.126 7,660.20 1.769% 1.744% WBL Corporation 946.32 0.150 0.046 27 1.62 0.016% 0.017%

Source: Capital IQ, KPMG Analysis

Notes:

1. Unless otherwise stated, all fi gures are as at 26 November 2012, being the Last Unaffected Share Price Date.

2. Total value of shares traded over the 12-month period leading up to and including the Last Unaffected Share Price Date, divided by the number of market trading days.

3. Total volume of shares traded over the 12-month period leading up to and including the Last Unaffected Share Price Date,

divided by the number of market trading days. 4. 12-month average daily value traded leading up to and including the Last Unaffected Share Price Date, divided by the

company’s market capitalisation as at the Last Unaffected Share Price Date. 5. 12-month average daily volume traded leading up to and including the Last Unaffected Share Price Date, divided by the total

number of shares outstanding.

25

We note that for the 12 months leading up to the Last Unaffected Share Price Date, the Company had an average daily traded volume of 45,781 Stock Units. Further, we note that the Company’s Stock Units were not traded on 35 of the 251 market days during this 12-month period. When calculated as a percentage of total stock units outstanding, the average daily trading volume of the Company’s Stock Units is only 0.017% of total Stock Units outstanding, which is within the range of 0.001% to 1.744% of the comparable companies by market capitalisation, albeit at the lower end of the range. When calculated as a percentage of the Company’s market capitalisation as at the Last Unaffected Share Price Date, the average daily value traded of the Company’s Stock Units was 0.016%, which is within the range of 0.001% to 1.769% of the comparable companies by market capitalisation, albeit at the lower end of the range.

Comparison against the historical pricing of the Stock Units

We set out in Table 3 below the volume-weighted average price of the Stock Units (“VWAP”) for varying time periods before and after the Last Unaffected Share Price Date, compared to the Stock Unit Consideration.

Table 3

VWAP analysis in relation to the UE Stock Unit Consideration

Cash consideration Share price (S$)

Average daily

volume (’000)

Average daily volume as %

of shares outstandingReference period

VWAP (S$)

Premium / (Discount) to VWAP

(%)

Lowest price (S$)(2)

Highest price (S$)(2)

Prior to and including the Last Unaffected Share Price Date(1)

Two years prior 3.430 31.20% 2.750 4.330 33.39 0.0126%

One year prior 3.281 37.15% 2.750 3.850 45.60 0.0171%

6 months prior 3.490 28.94% 3.200 3.850 20.60 0.0077%

3 months prior 3.585 25.52% 3.350 3.850 22.41 0.0083%

1 month prior 3.527 27.59% 3.440 3.610 24.90 0.0092%

Last traded price 3.490 28.94% 3.490 3.500 35.00 0.0129% Post Last Unaffected Share Price Date

Between the Last Unaffected Share Price Date and UE Pre-Conditional Offer Announcement Date

3.955 13.78% 3.640 4.200 63.36 0.0233%

Betw een UE Pre-Conditional Offer Announcement Date and the UE Formal Offer Announcement Date

4.454 1.03% 4.100 4.730 247.73 0.0878%

Between the UE Formal Offer Announcement Date and the Revised UE Offers Announcement Date

4.223 6.56% 4.100 4.500 149.53 0.0541%

Between the Revised UE Offers Announcement Date and the Latest Practicable Date

4.493 0.16% 4.480 4.510 540.33 0.1949%

UE Stock Unit Consideration 4.500

Source: Capital IQ, KPMG Analysis

Notes:

(1) Calculations of the respective periods of VWAP are up to and including 26 November 2012. (2) The lowest and highest prices of each period refl ect the lowest and highest intraday prices during that period.

26

Having benchmarked the Stock Unit Consideration against the VWAP of the Stock Units for varying periods prior to and following the Last Unaffected Share Price Date, we observe the following:

(i) the Stock Unit Consideration is at a premium of approximately 28.94% to the closing price of the Stock Units on the Last Unaffected Share Price Date;

(ii) the Stock Unit Consideration is at a premium of approximately 27.59%, 25.52%, 28.94%, 37.15% and 31.20% to the one-month VWAP, the three-month VWAP, the six-month VWAP, one-year VWAP, and two-year VWAP of the Stock Units leading up to the Last Unaffected Share Price Date, respectively; and

(iii) since the Last Unaffected Share Price Date, the Stock Units have generally traded at modest discounts to the Stock Unit Consideration. We note that, throughout these periods, the STC Offer, the Initial UE Offers and the Revised UE Offers may have had a possible impact of providing a fl oor on the current market price of the Stock Units.

We note that there is no assurance that the price of the Stock Units will remain at current levels after the close of the Revised UE Offers. In addition, we note that our analysis of the past price performance of the Stock Units is not indicative of the future price levels of the Stock Units.

We wish to highlight that the historical trading patterns or performance of the Stock Units should not, in any way, be relied upon as an indication of its future trading patterns or performance, which will be affected by, inter alia, the performance and prospects of the WBL Group, prevailing economic conditions, economic outlook, stock market conditions and sentiments.

8.3 Historical multiples analysis

We have analysed the historical trading multiples of the Company for the three (3) years preceding the Last Unaffected Share Price Date. Historical trading multiples are related to how the Company is perceived by the stock market and subject to market effi ciency and rationality, refl ect the information relevant to a company such as its business directions, plans and strategies, expected financial performance, future prospects and potential growth and susceptible to, inter alia, the degree of broker coverage of the company, trading liquidity, investor sentiment and market speculation.

We set out below in Figure 2 the Company’s EV/EBITDA multiple based on the Company’s historical Enterprise Value and trailing 12-month EBITDA, P/E ratio based on the Company’s historical market capitalisation and trailing 12-month net earnings and P/NAV ratio based on the Company’s historical market capitalisation and trailing net asset value.

Figure 2

0.0x1.0x2.0x3.0x4.0x5.0x6.0x7.0x8.0x9.0x

Nov

-09

Dec

-09

Jan-

10F

eb-1

0

Mar

-10

Apr

-10

May

-10

Jun-

10

Jul-1

0

Aug

-10

Sep

-10

Oct

-10

Nov

-10

Dec

-10

Jan-

11F

eb-1

1

Mar

-11

Apr

-11

May

-11

Jun-

11

Jul-1

1

Aug

-11

Sep

-11

Oct

-11

Nov

-11

Dec

-11

Jan-

12F

eb-1

2

Mar

-12

Apr

-12

May

-12

Jun-

12

Jul-1

2

Aug

-12

Sep

-12

Oct

-12

EV/ EBITDA

Median: 6.6x

27

-

5.0x

10.0x

15.0x

20.0x

25.0x

30.0xN

ov-0

9

Dec

-09

Jan-

10F

eb-1

0

Mar

-10

Apr

-10

May

-10

Jun-

10

Jul-1

0

Aug

-10

Sep

-10

Oct

-10

Nov

-10

Dec

-10

Jan-

11F

eb-1

1

Mar

-11

Apr

-11

May

-11

Jun-

11

Jul-1

1

Aug

-11

Sep

-11

Oct

-11

Nov

-11

Dec

-11

Jan-

12F

eb-1

2

Mar

-12

Apr

-12

May

-12

Jun-

12

Jul-1

2

Aug

-12

Sep

-12

Oct

-12

P/E

Median: 11.6x

- 0.2x 0.4x 0.6x 0.8x 1.0x 1.2x 1.4x 1.6x 1.8x

Nov

-09

Dec

-09

Jan-

10F

eb-1

0

Mar

-10

Apr

-10

May

-10

Jun-

10

Jul-1

0

Aug

-10

Sep

-10

Oct

-10

Nov

-10

Dec

-10

Jan-

11F

eb-1

1

Mar

-11

Apr

-11

May

-11

Jun-

11

Jul-1

1

Aug

-11

Sep

-11

Oct

-11

Nov

-11

Dec

-11

Jan-

12F

eb-1

2

Mar

-12

Apr

-12

May

-12

Jun-

12

Jul-1

2

Aug

-12

Sep

-12

Oct

-12

P/NAV

Median: 1.1x

Source: Capital IQ

We note the following:

(i) the Stock Unit Consideration represents a premium1 of approximately 139.4%, to the median of the Company’s T12M EV/EBITDA multiple of 6.6x for the three (3) years leading up to the Last Unaffected Share Price Date;

(ii) the Stock Unit Consideration represents a premium1 of approximately 297.9%, to the median of the Company’s T12M P/E ratio of 11.6x for the three (3) years leading up to the Last Unaffected Share Price Date; and

(iii) the Stock Unit Consideration represents a premium1 of approximately 19.1%, to the median of the Company’s P/NAV ratio of 1.1x for the three (3) years leading up to the Last Unaffected Share Price Date.

We wish to highlight that the historical trading multiples implied by the prices of the Stock Units should not, in any way, be relied upon as an indication of its future trading multiples, which will be affected by, inter alia, the performance and prospects of the WBL Group, prevailing economic conditions, economic outlook, stock market conditions and sentiments.

1 Based on Capital IQ measures of T12M EBITDA, T12M earnings per share, book value per share as at 31 December 2012 and Enterprise Values and equity values implied by the Stock Unit Consideration.

28

8.4 Comparison with Recently Completed Take-overs in Singapore

We have considered selected precedent take-over transactions for companies listed on the Mainboard of the SGX-ST, which were announced after January 2011 and with the acquirer gaining effective control of the target (the “Precedent Take-over Transactions”).

For the purposes of comparison with the Precedent Take-over Transactions, we have set out below the premiums/(discounts) implied by the offer prices compared to the VWAP of the respective targets for the one-day, one-month, three-month, six-month, nine-month and 12-month periods prior to the respective offer announcements.

It should be noted, however, that the level of premiums/(discounts) represented by the Precedent Take-over Transactions varies in different circumstances depending on, inter alia, the attractiveness of the underlying business to be acquired, the potential synergies to be gained from integration with an existing business to be acquired, the possibility of signifi cant revaluation of the assets to be acquired, the availability of cash reserves, the liquidity of the target company’s traded shares, the presence of competing bids for the target company, the form of consideration offered by an acquirer, the extent of control the acquirer already had in the target company and the prevailing market expectations. Accordingly, any comparison made with respect to the Precedent Take-over Transactions merely serves as an illustrative guide and conclusions drawn from the comparison may not provide a meaningful basis for valuation comparison.

The Independent Directors should also note that the comparison is made without taking into consideration the relative effi ciency of information, or the underlying liquidity of the shares of the relevant companies, the performance of the shares of the companies, or the quality of earnings prior to the relevant announcement, the market conditions or sentiments when the announcements were made or the desire or relative need for control leading to compulsory acquisition. Moreover, as the Company is not in the same industry and does not conduct the same businesses as the other target companies in the table below, it may not, therefore, be directly comparable to the target companies in terms of composition of business activities, product lines, scale of operations, risk profi le, geographical spread of activities, client base, accounting policies, track record, prospects and other relevant criteria.

The Precedent Take-over Transactions and relevant information relating to them are set out in Table 4.

29

Table 4

Selected Precedent Take-over Transactions

Premium of offer price over(2)

CompanyAnnouncement

dateOffer price

(S$)(1)

last transacted

price prior to announcement

1-monthVWAP

prior to announcement

3-month VWAP


6-month VWAP


9-month VWAP


12-month VWAP


Kim Eng Holdings Limited(3) 06 Jan 11 3.100 14.81% 28.08% 33.28% 42.40% 50.85% 51.07%

Passion Holdings Limited 09 Mar 11 0.260 23.80% 28.10% 27.40% 30.00% 32.65% 33.33%

Allgreen Properties Limited 23 May 11 1.600 39.13% 40.60% 45.32% 42.73% 41.72% 43.11%

Portek International Limited(4) 01 Jun 11 1.200 97.18% 95.49% 116.60% 131.40% 160.71% 167.18%

Hsu Fu Chi International Ltd 11 Jul 11 4.350 8.75% 8.86% 9.41% 12.49% 16.97% 21.64%

C & O Pharmaceutical Technology (Holdings) Ltd

01 Aug 11 0.500 11.11% 15.74% 21.65% 23.46% 11.11% 4.82%

Asia-Environment Holdings Ltd 23 Aug 11 0.300 33.33% 25.00% 21.95% 25.00% 29.87% 35.75%

Juken Technology Limited(5) 14 Sep 11 0.180 28.57% 25.87% 22.45% 16.88% 7.14% 9.09%

Beyonics Technology Ltd 05 Oct 11 0.260 38.30% 45.25% 28.71% 31.31% 30.00% 26.83%

Unidux Electronics Ltd 28 Oct 11 0.143 104.29% 180.39% 98.61% 48.96% 53.76% 60.67%

SMB United Ltd 31 Oct 11 0.400 45.45% 47.06% 52.67% 54.44% 56.25% 57.48%

Meiban Group Ltd 15 Mar 12 0.400 42.86% 42.35% 36.05% 37.93% 37.46% 35.14%

Adampak Limited 02 Apr 12 0.420 21.74% 32.49% 38.16% 50.54% 54.98% 50.00%

Brothers (Holdings) Limited 30 May 12 0.260 44.44% 43.65% 39.04% 44.44% 45.25% 42.08%

Fraser & Neave Limited(6) 16 Jul 12 9.550 20.89% 30.98% 38.35% 41.57% 45.56% 51.56%

Sakari Resources Limited 27 Aug 12 1.900 27.52% 34.47% 39.19% 23.30% 13.57% 7.53%

Kian Ann Engineering Limited(7) 15 Oct 12 0.440 46.67% 60.00% 67.94% 78.14% 94.69% 95.56%

Harry Holdings Ltd 10 Nov 12 0.230 53.33% 57.53% 69.12% 82.54% 86.99% 91.67%

Asia Pacifi c Breweries Limited(8) 15 Nov 12 53.000 46.67% 53.66% 55.05% 64.20% 82.32% 85.41%

Rokko Holdings Ltd 17 Dec 12 0.110 57.14% 54.93% 46.67% 44.74% 37.50% 32.53% Min 8.75% 8.86% 9.41% 12.49% 7.14% 4.82%

Mean 40.30% 47.53% 45.38% 46.32% 49.47% 50.12%

Median 38.71% 41.47% 38.69% 42.56% 43.48% 42.59%

Max 104.29% 180.39% 116.60% 131.40% 160.71% 167.18%

WBL Corporation Limited

Stock Unit Consideration(9) 9 May 13(10) 4.500 28.94% 27.59% 25.52% 28.94% 29.20% 37.15%

Source: Capital IQ, Thomson One Banker, Company fi lings, KPMG Analysis

Notes:

(1) Offer price based on the fi nal bid price per share.

(2) The premia analysis is based upon the VWAP of shares traded during the specifi ed market trading date range prior to the announcement date of the transaction.

(3) The market premia over the last transacted price and VWAP for the one-month , three-month, six-month, nine-month and 12-month periods prior to the announcement date were based on a reference date of 6 January 2011.

(4) The market premia over the last transacted price and VWAP for one-month , three-month, six-month, nine-month and 12-month periods prior to announcement for Portek International Limited were calculated based on the announcement date prior to the takeover announcement of Portek International Limited by ICTSI Far East Pte Ltd.

(5) The offer for Juken Technology Limited (“Juken”) was made on the basis of either S$0.18 in cash per Juken share or 1.8 Juken shares for one new share in Frencken Group based on an issue price of S$0.324 per Frencken share. As the cash consideration and the share consideration for Juken are similar, the premia over the VWAP is calculated based on the cash consideration.

(6) The offer price for Fraser and Neave, Limited represents the revised offer price by TCC Assets Limited, announced on 18 January 2013.

(7) The premia analysis is based upon the VWAP of shares traded during the specifi ed market trading date range prior to the holding announcement of Kian Ann Engineering Ltd on 17 August 2012.

30

(8) The premia analysis is based upon the VWAP of shares traded during the specifi ed market trading date range prior to the announcement on 16 July 2012 that OCBC and Great Eastern Holdings Limited had been approached with an offer to purchase their combined stakes in Asia Pacifi c Breweries, and that they were in discussions on this.

(9) The premia analysis is based upon the VWAP of shares traded during the specifi ed market trading date range prior to the Last Unaffected Share Price Date.

(10) The Revised UE Offers Announcement Date.

Having benchmarked the premia implied by the Stock Unit Consideration against the Precedent Take-over Transactions, we observe that the premiums or discounts for various VWAPs of the Stock Units, as implied by the Stock Unit Consideration, are lower than the observed median and mean multiples in all the Precedent Take-over Transactions.

Based on the above table, it should be noted that the Stock Unit Consideration represents:

(i) a premium of approximately 28.94% to the closing price of the Stock Units on the Last Unaffected Share Price Date. This is within the range of the observed premiums for the Precedent Take-over Transactions, but below the mean and median observed premiums of 40.30% and 38.71%, respectively, to the last trading prices for the Precedent Take-over Transactions;

(ii) a premium of approximately 27.59% to the one-month VWAP of the Stock Units leading up to the Last Unaffected Share Price Date. This is within the range of the observed premiums for the Precedent Take-over Transactions, but below the mean and median observed premiums of 47.53% and 41.47%, respectively, to the one-month VWAPs for the Precedent Take-over Transactions;

(iii) a premium of approximately 25.52% to the three-month VWAP of the Stock Units leading up to the Last Unaffected Share Price Date. This is within the range of the observed premiums for the Precedent Take-over Transactions, but below the mean and median observed premiums of 45.38% and 38.69%, respectively, to the three-month VWAPs for the Precedent Take-over Transactions;

(iv) a premium of approximately 28.94% to the six-month VWAP of the Stock Units leading up to the Last Unaffected Share Price Date. This is within the range of the observed premiums for the Precedent Take-over Transactions, but below the mean and median observed premiums of 46.32% and 42.56%, respectively, to the six-month VWAPs for the Precedent Take-over Transactions;

(v) a premium of approximately 29.20% to the nine-month VWAP of the Stock Units leading up to the Last Unaffected Share Price Date. This is within the range of the observed premiums for the Precedent Take-over Transactions, but below the mean and median observed premiums of 49.47% and 43.48%, respectively, to the nine-month VWAPs for the Precedent Take-over Transactions; and

(vi) a premium of approximately 37.15% to the 12-month VWAP of the Stock Units leading up to the Last Unaffected Share Price Date. This is within the range of the observed premiums for the Precedent Take-over Transactions, but below the mean and median observed premiums of 50.12% and 42.59%, respectively, to the 12-month VWAPs for the Precedent Take-over Transactions.

We further note that as at the Latest Practicable Date, the Revised UE Offers have been declared unconditional due to the Offeror and its Concert Parties owning, controlling or having agreed to acquire an aggregate of 90.2% of the total number of issued Stock Units. The Offeror and its Concert Parties have therefore gained effective control of the Company as at the Latest Practicable Date and the remaining 9.8% of the Stock Units of the Company constitutes a minority interest. Accordingly, we have also considered selected precedent take-over transactions for companies listed on the Mainboard of the SGX-ST, which were announced after January 2011, in which the offeree company was privatised or delisted, for which the acquirer had effective control of the offeree company prior to the announcement of the offer, and as such had acquired a minority stake in the respective offeree company (“Precedent Minority Transactions”).

31

For the purposes of comparison with the Precedent Minority Transactions, we have set out below the premiums/(discounts) implied by the offer prices compared to the VWAP of the respective targets for the one-day, one-month, three-month, six-month, nine-month and 12-month periods prior to the respective offer announcements.

It should be noted, however, that the level of premiums/(discounts) represented by the Precedent Minority Transactions varies in different circumstances depending on, inter alia, the attractiveness of the underlying business to be acquired, the potential synergies to be gained from integration with an existing business to be acquired, the possibility of signifi cant revaluation of the assets to be acquired, the availability of cash reserves, the liquidity of the target company’s traded shares, the presence of competing bids for the target company, the form of consideration offered by an acquirer, the extent of control the acquirer already had in the target company and the prevailing market expectations. Accordingly, any comparison made with respect to the Precedent Minority Transactions merely serves as an illustrative guide and conclusions drawn from the comparison may not provide a meaningful basis for valuation comparison.

The Independent Directors should also note that the comparison is made without taking into consideration the relative effi ciency of information, or the underlying liquidity of the shares of the relevant companies, the performance of the shares of the companies, or the quality of earnings prior to the relevant announcement, the market conditions or sentiments when the announcements were made or the desire or relative need for control leading to compulsory acquisition. Moreover, as the Company is not in the same industry and does not conduct the same businesses as the other target companies in the table below, it may not, therefore, be directly comparable to the target companies in terms of composition of business activities, product lines, scale of operations, risk profi le, geographical spread of activities, client base, accounting policies, track record, prospects and other relevant criteria.

The Precedent Minority Transactions and relevant information relating to them are set out in Table 5.

Table 5

Selected Precedent Minority Transactions

Premium of offer price over(2)

CompanyAnnouncement

dateOffer price

(S$)(1)

last transacted

price prior to announcement

1-monthVWAP


3-month VWAP


6-month VWAP


9-month VWAP


12-month VWAP


Time Watch Investments Limited 19 Jan 11 0.270 14.89% 26.32% 34.29% 39.18% 42.11% 39.90%

Sinomem Technology Limited 05 Mar 11 0.700 28.44% 33.12% 34.36% 36.45% 37.80% 31.09%

EDMI Limited(3) 28 Mar 11 0.365 16.80% 26.89% 23.47% 19.28% 20.07% 21.26%

CMZ Holdings Ltd 03 Aug 11 0.190 22.58% 31.94% 25.83% 27.52% 24.18% 25.00%

CentraLand Limited(4) 12 Aug 11 0.400 11.11% NA 11.11% 11.11% 8.11% (8.26)%

Pacifi c Shipping Trust 04 Oct 11 US$ 0.43 14.67% 18.13% 21.13% 20.79% 20.45% 21.13%

Heng Long International Ltd. 07 Oct 11 0.600 7.14% 6.76% 17.42% 29.87% 32.16% 36.05%

Wanxiang International Ltd 11 Oct 11 0.200 43.88% 62.60% 57.48% 48.15% 28.21% 8.11%

Cerebos Pacifi c Limited 01 Aug 12 6.600 22.68% 22.81% 22.91% 20.00% 20.00% 20.00%

Hersing Corporation Limited 08 Aug 12 0.230 21.05% 21.05% 17.95% 12.20% 7.98% 5.99%

Luye Pharma Group Limited 28 Aug 12 1.300 16.07% 20.15% 20.82% 36.41% 37.28% 37.71%

Gul Technologies Singapore Ltd(5) 13 Sep 12 0.162 38.46% 55.77% 68.75% 74.19% 82.02% 84.09%

China Farm Equipment Limited 03 Dec 12 0.280 7.69% 2.19% 4.48% 7.69% 8.11% 8.53%

SC Global Developments Ltd 05 Dec 12 1.800 49.38% 56.93% 57.48% 62.45% 65.44% 66.36% Min 7.14% 2.19% 4.48% 7.69% 7.98% -8.26%

Mean 22.49% 29.59% 29.82% 31.81% 30.99% 28.35%

Median 18.93% 26.32% 23.19% 28.69% 26.19% 23.13%

Max 49.38% 62.60% 68.75% 74.19% 82.02% 84.09%


Stock Unit Consideration( 6) 9 May 13( 7) 4.500 28.94% 27.59% 25.52% 28.94% 29.20% 37.15%

Source: Capital IQ, Thomson One Banker, Company fi lings, KPMG Analysis

32

Notes:

(1) Offer price based on the fi nal bid price per share.

(2) The premia analysis is based upon the VWAP of shares traded during the specifi ed market trading date range prior to the announcement date of the transaction.

(3) The market premia over the last transacted price and VWAP for the one-month and three-month periods prior to the announcement date excludes a dividend of S$0.075 from 28 February 2011 (being the next trading day upon post announcement of the dividends) to 23 March 2011 (being the dividend record date). Shareholders of EDMI Ltd were entitled to their share of dividends even though the company made an exit offer announcement on 28 March 2011.

(4) The market premia over the VWAP for one-month prior to announcement for Centraland Limited in the table was not available as there was no trading in the shares during this period.

(5) The premia analysis is based upon the VWAP of shares traded during the specifi ed market trading date range prior to the holding announcement of Gul Technologies Singapore Ltd.

(6) The premia analysis is based upon the VWAP of shares traded during the specifi ed market trading date range prior to the Last Unaffected Share Price Date.

(7) The Revised UE Offers Announcement Date.

Having benchmarked the premia implied by the Stock Unit Consideration against the Precedent Minority Transactions, we observe that the premiums for various VWAPs of the Stock Units, as implied by the Stock Unit Consideration, are within the range of, and above the median premiums of, those premiums or discounts observed in the Precedent Minority Transactions.

Based on the above table, it should be noted that the Stock Unit Consideration represents:

(i) a premium of approximately 28.94% to the closing price of the Stock Units on the Last Unaffected Share Price Date. This is within the range of the observed premiums for the Precedent Minority Transactions, and above the mean and median observed premiums of 22.49% and 18.93%, respectively, to the last trading prices for the Precedent Minority Transactions;

(ii) a premium of approximately 27.59% to the one-month VWAP of the Stock Units leading up to the Last Unaffected Share Price Date. This is within the range of the observed premiums for the Precedent Minority Transactions, below the mean observed premium of 29.59%, and above the median observed premium of 26.32% to the one-month VWAPs for the Precedent Minority Transactions;

(iii) a premium of approximately 25.52% to the three-month VWAP of the Stock Units leading up to the Last Unaffected Share Price Date. This is within the range of the observed premiums for the Precedent Minority Transactions, below the mean observed premium of 29.82%, and above the median observed premium of 23.19% to the three-month VWAPs for the Precedent Minority Transactions;

(iv) a premium of approximately 28.94% to the six-month VWAP of the Stock Units leading up to the Last Unaffected Share Price Date. This is within the range of the observed premiums for the Precedent Minority Transactions, below the mean observed premium of 31.81%, and above the median observed premium of 28.69% to the six-month VWAPs for the Precedent Minority Transactions;

(v) a premium of approximately 29.20% to the nine-month VWAP of the Stock Units leading up to the Last Unaffected Share Price Date. This is within the range of the observed premiums for the Precedent Minority Transactions, below the mean observed premium of 30.99%, and above median observed premium of 26.19% to the nine-month VWAPs for the Precedent Minority Transactions; and

(vi) a premium of approximately 37.15% to the 12-month VWAP of the Stock Units leading up to the Last Unaffected Share Price Date. This is within the range of the observed premiums for the Precedent Minority Transactions, and above the mean and median observed premiums of 28.35% and 23.13%, respectively, to the 12-month VWAPs for the Precedent Minority Transactions.

33

8.5 Sum-of-the-parts valuation

The Company is a conglomerate which owns and operates several distinct businesses and has majority and minority interests in three (3) independently managed, publicly-listed companies. Given that the Company is structured as a holding company with operations and investments in a variety of disparate industries, we consider it appropriate to value each of the businesses separately to arrive at an aggregate value of the WBL Group on a sum-of-the-parts basis. We have arrived at a valuation range for the WBL Group rather than a point estimate as we believe a range will provide a more objective and useful measure of corporate value taking into account, inter alia, market price volatility of shares in the WBL Group’s listed investee companies, the WBL Group’s signifi cant portfolio of real estate development and investment properties and other factors which may impact the intrinsic or net realisable values of the businesses and investments held by the WBL Group, each of which are subject to changing market and economic conditions.

We have utilised a number of valuation approaches to value each of the businesses and investments. The valuation approaches that we have employed in each case are based on the nature of each business, each business’ stage of development, and the information available to us at the Latest Practicable Date. In arriving at a valuation range for an individual business or investment, we may have utilised more than one valuation approach or applied different parameters to the same valuation approach.

We note that there are a number of subsidiaries, joint ventures and associated companies within the WBL Corporation group of companies whose individual fi nancial statements have not been publicly disclosed. Some of these subsidiaries, joint ventures and associated companies are classifi ed as being dormant, under liquidation or engaged in investment holding. We have not attempted to estimate the intrinsic value for these subsidiaries, joint ventures and associated companies (and other such companies that the Management have indicated are currently being restructured or wound down). Rather we have considered the net asset value of these investments in our sum-of-the-parts valuation.

The sum-of-the-parts valuation has been conducted on the bases set out in Section 7 of this Letter.

We set out in Table 6 below a summary of our sum-of-the-parts valuation by business division. Further information on the valuation approaches we have employed for each of the WBL Group’s businesses and their application are provided in Sections 8.5.1 to 8.5.5 of this Letter.

Table 6

Sum-of-the-parts valuation summary

Estimated equity value (S$ million)(1)

Division Business activities Lower(2) Upper(3)

Automotive Leading regional automotive distributor and dealer 429.0 533.9

Property Property development, property management and property investment in China

390.1 424.3

Technology Controlling interests in two publicly-listed companies which manufacture fl exible printed circuits

338.9 390.7

Engineering, Manufacturing and Distribution

Businesses engaged in engineering, manufacturing and distribution activities

220.7 240.1

Corporate Services and Others (excl. WBL Corporation)

Non-core portfolio of businesses engaged in a variety of commercial activities, and passive investments

111.5 150.5


Group level debt(4) Group level debt (247.7) (247.7)

Other assets and liabilities(5) Other NAV of WBL Corporation 96.5 96.5

Capitalised headquarter cost allocation Unallocated corporate headquarter expenses (73.5) (68.7)

Estimated equity value (S$ million) 1,265.5 1,519.6

Estimated valuation for each Stock Unit (S$)(6) 4.50 5.40

Source: Company fi lings, Company’s management accounts, Valuation Reports, information provided by the Management, Bloomberg, Capital IQ, KPMG Analysis

34

Notes:

(1) For businesses for which we have estimated Enterprise Value we have made relevant net debt adjustments to arrive at an estimate of equity value. The Company’s debt has been carried at the book value as of 31 March 2013 and we have not attempted to revalue it.

(2) Estimated equity values for each business division have been adjusted for an estimate of the present value of WBL Corporation’s headquarter costs. These estimates have been provided by the Management and based on actual headquarter costs of S$13.2 million for FY2012, the Company’s median three-year historical P/E multiple leading up to the Last Unaffected Share Price Date and the Management’s proposed allocation measure. Divisional allocations are as follows: Automotive (S$20.0 million); Property (S$35.9 million); Technology (S$4.0 million); and Engineering, Manufacturing and Distribution (S$20.0 million).

(3) Estimated equity values for each business division have been adjusted for an estimate of the present value of WBL

Corporation’s headquarter costs. This has been calculated based on the Management’s normalised estimate of headquarter costs of S$12.2 million, the Company’s median three-year historical P/E multiple leading up to the Last Unaffected Share Price Date and the Management’s proposed allocation measure. Divisional allocations are as follows: Automotive (S$18.2 million); Property (S$32.7 million); Technology (S$3.6 million); and Engineering, Manufacturing and Distribution (S$18.2 million).

(4) We have assumed that all the Convertible Bonds in issue would be converted to shares and excluded the Convertible Bonds from calculation of group level debt. The group level debt is inclusive of long-term loans, post-employee benefi ts & other long-term benefi ts, and amounts due to bankers.

(5) Other assets and liabilities primarily comprises of group level cash and cash equivalents of approximately S$100 million and other creditors of S$5 million.

(6) Based on the fully diluted number of Stock Units of 281,373,993 as at the Latest Practicable Date.

We note that the Stock Unit Consideration of S$4.50 per Stock Unit is at the bottom of the range of the estimated sum-of-the-parts value for each Stock Unit.

Provided in Figure 3 below is a diagrammatic representation of the relative contribution of equity value for each of the business divisions. We note that we have excluded the Company from the calculation of this chart as it functions as a cost centre within the WBL Group and holds a substantial proportion of the WBL Group’s debt.

Figure 3

Automotive29%

Property26%

Technology23%

Engineering, Manufacturing and

Distribution15%

Corporate Services and Others

excluding WBL Corp Ltd

7%

Estimated Equity Values by division (Lower)(1)

Automotive31%

Property24%

Technology22%

Engineering, Manufacturing and

Distribution14%

Corporate Services and Others

excluding WBL Corp Ltd

9%

Estimated Equity Values by division (Upper)(1)

Note:

(1) The charts above are calculated excluding the estimated equity value of WBL Corporation, which is negative as it holds a

substantial amount of the WBL Group’s debt, and includes certain unallocated capitalised headquarter costs allocation.

35

Table 7

Sum-of-the-parts valuation - by valuation approach

Estimated Equity Value (S$ million)

Estimated Equity Value (%)

Valuation approach Lower Upper Lower Upper

Marked-to-Market 406.1 457.5 32.1% 30.1%

Earnings based valuation or Relative valuation 476.5 526.7 37.7% 34.7%

NAV (Carried at book) 94.1 53.1 7.4% 3.5%

Revalued NAV (RNAV) 593.4 774.8 46.9% 51.0%

Carrying value(1) 347.8 373.7 58.6% 48.2%

Revaluation surplus(1) 245.6 401.1 41.4% 51.8%

Group(2) (304.6) (292.5) (24.1%) (19.3%)

Total 1,265.5 1,519.6 100.0% 100.0%

Notes:

(1) Represents the relative carrying value and revaluation surplus amounts for the entities for which we have applied RNAV.

(2) Comprises the WBL Corporation holding company net assets, inclusive of debt held at the group level, and the estimated present value of the Company’s headquarter expenses.

Of the total sum-of-the-parts valuation of S$1,265.5 million to S$1,519.6 million, S$245.6 million to S$401.1 million comes from the revaluation surplus of the properties and intangible assets, which represents 19.4% or 26.4% of the total estimated equity value.

While the sum-of-the-parts valuation is useful as a cross-check, the Independent Directors should note that it would not be appropriate to solely rely on the sum-of-the-parts valuation in assessing the Revised UE Offers and they should also consider the analyses in the other sections of this Letter.

8. 5.1 Automotive division

WBL Corporation’s automotive division (“Wearnes Automotive”) is a leading luxury automotive retailer in Southeast Asia and is an importer, distributor and dealer for a range of premium passenger vehicles in the region. Operating in fi ve markets with 28 sites, Wearnes Automotive specialises in the retailing and distribution of luxury car brands including Bentley, Bugatti, McLaren, Jaguar, Land Rover, Infi niti, BMW and Volvo. Wearnes Automotive also retails other brands, such as Volkswagon, Renault and Mazda, in certain markets.

8.5.1(a) Valuation approach

The approach we have applied to value Wearnes Automotive is a combination of methodologies. We have calculated the Enterprise Value of the Wearnes Automotive business by applying an EV/EBITDA multiple. In calculating the EBITDA to which the multiple has been applied, we have deducted the estimated annual lease expenses relating to properties which form a part of Wearnes Automotive since these properties have been separately valued. We have cross-checked this value using a capitalised earnings approach.

To arrive at equity value of Wearnes Automotive, we have adjusted the Enterprise Value for interest-bearing debt, minority interests, and cash and cash equivalents.

We have added back the carrying value, as at 31 March 2013, of the associated companies within Wearnes Automotive. We have also added the revalued property amount of Wearnes Automotive, as provided by the Independent Valuers, to arrive at the fi nal equity value of the division.

36

8.5.1(b) Valuation results

Based on the valuation approach we have taken, we have estimated an equity value of S$429.0 million to S$533.9 million for Wearnes Automotive.

We considered the valuation metrics of selected listed companies (the “Automotive Comparable Companies”) principally engaged in automotive distribution and which are, in our opinion, broadly comparable to Wearnes Automotive. In selecting the Automotive Comparable Companies, we conducted a global search of operators of automobile distributorships and dealerships with T12M revenue of between S$200 million and S$2,000 million. We arrived at a set of nine (9) broadly comparable companies upon which we have based our valuation. A summary profi le of the Automotive Comparable Companies is set out below.

Table 8

Summary profi le - Automotive Comparable Companies

Name DescriptionT12M Revenue

(S$ million)

Delek Automotive Systems Ltd.

Delek Automotive Systems Ltd., through its subsidiaries, operates as an importer, distributor, and marketer of vehicles and spare parts in Israel. The company primarily distributes Mazda, Ford, Lincoln, and BMW vehicles. It operates showrooms in 16 locations in Israel. The company is based in Israel.

1, 261.0

Tunas Ridean PT PT Tunas Ridean Tbk and its subsidiaries operate automotive dealerships in Indonesia. The company distributes new and used motor vehicles, as well as spare parts. It sells Toyota, BMW, Daihatsu, and Peugeot vehicles in Jakarta, West Java, Banten, and South Sumatera, as well as Honda motorcycles in Lampung. The company also provides fi nance for the purchase of new and used automobiles. PT Tunas Ridean Tbk and is headquartered in Indonesia.

1,302.0

MBM Resources Bhd MBM Resources Berhad engages in the marketing and distribution of motor vehicles and spare parts, and provision of related motor repair services primarily in Malaysia. It also manufactures automotive parts and components, seat belts, car airbag modules, steel wheels and discs, noise and heat reduction material, and insulator parts for motor vehicles, as well as provides tire assembly services. The Company is based in Malaysia.

906.1

AutoCanada Inc. AutoCanada Inc., operates franchised automobile dealerships in Canada. The company offers various automotive products and services, including new and used vehicles, vehicle parts, vehicle maintenance and collision repair services, vehicle protection products, and other after-market products. It sells various new vehicle brands, including Chrysler, Dodge, Jeep, Ram, Fiat, Hyundai, Nissan, Infi niti, Volkswagen, Mitsubishi, and Subaru. The company is headquartered in Canada.

1,390.4

Wuhu Yaxia Automobile Company Limited

Wuhu Yaxia Automobile Company Limited engages in sales and servicing of passenger cars. Wuhu Yaxia Automobile Company Limited is based in China.

851.9

ENNAKL Automobiles S.A. ENNAKL Automobiles S.A. operates as an automobile distributor and dealer in Tunisia. The company offers various brands of vehicles, such as Volkswagen, Volkswagen Commercial, Audi, Seat, and Porsche. It also provides after sales service; and markets spare parts. The company is based in Tunisia.

208.5

37

Summary profi le - Automotive Comparable Companies

Name DescriptionT12M Revenue

(S$ million)

Stern Groep NV Stern Groep NV engages in the automotive distribution activities in the Netherlands. The company also provides fi nancial and technical services, including car hire, car insurance, private fi nancing, business funding, and car rental and leasing. The company is based in the Netherlands.

1,508.2

Cycle & Carriage Bintang Bhd

Cycle & Carriage Bintang Berhad engages in the retail sale of motor vehicles in Malaysia. It is also involved in the sale of spare parts; servicing of vehicles; and renting of premises.The company is based in Malaysia.

269.5

HR Owen plc H.R. Owen Plc operates as a franchised motor dealer in the United Kingdom. The company sells new and used motor vehicles of various brands. It also engages in the after sales operations, including servicing vehicles; sale of parts and accessories; and body shop repair services. The company markets brands such as Bugatti, Ferrari, Lamborghini, Lotus, and Maserati; Bentley, Rolls-Royce, Audi, BMW and Mini. HR Owen is based in the UK.

483.7

Source: Capital IQ, Company fi lings

The relative valuation ratios of the Automotive Comparable Companies are set out in Table 9 below.

Table 9

Automotive Comparable Companies

Name

Headquarter

Enterprise value

(S$ million)Market cap (S$million)

% of 52wk High

Enterprise value/T12M

T12MP/E

Historical 3yr median EV/EBITDARevenue EBITDA

Delek Automotive Systems Ltd. Israel 1,464.4 1,124.8 89% 1.2x 13.7x 17.9x 9.8x

Tunas Ridean PT Indonesia 763.1 704.2 93% 0.6x 11.1x 13.2x 9.9x

MBM Resources Bhd Malaysia 557.2 683.6 100% 0.6x 22.7x 11.3x 4.4x

AutoCanada Inc. Canada 944.2 680.4 99% 0.7x 15.8x 20.7x 9.6x

Wuhu Yaxia Automobile Company Limited(1)

China 412.4 341.4 76% 0.5x n.a.(2) 16.3x 12.4x

ENNAKL Automobiles S.A.(3) Tunisia 138.0 205.0 63% 0.7x 14.6x n.m.(4) 10.9x

Stern Groep NV Netherlands 652.1 109.6 62% 0.4x 10.1x n.m.(4) 8.7x

Cycle & Carriage Bintang Bhd Malaysia 103.2 110.1 80% 0.4x n.m.(4) 33.7x 11.3x

HR Owen plc United Kingdom

100.8 54.2 97% 0.2x 9.6x 20.2x 6.8x

Low 0.2x 9.6x 11.3x 4.4x

1st Quartile 0.4x 10.6x 14.7x 8.7x

Mean 0.6x 13.9x 19.0x 9.3x

Median 0.6x 13.7x 17.9x 9.8x

3rd Quartile 0.7x 15.2x 20.5x 10.9x

High 1.2x 22.7x 33.7x 12.4x

Source: Company fi lings, Company’s management accounts, information provided by the Management, Bloomberg, Capital IQ, KPMG Analysis

Notes:

(1) The fi rst pricing date of Wuhu Yaxia Automobile Company Limited was 10 August 2011. The historical median EV/EBITDA has been calculated from this date.

(2) The latest published fi nancial statements of Wuhu Yaxia Automobile Company Limited as at the Latest Practicable Date do not contain suffi cient information to calculate the T12M EBITDA.

38

(3) The fi rst pricing date of ENNAKL Automobiles S.A. was 16 July 2010. The historical median EV/EBITDA has been calculated from this date.

(4) “n.m.” denotes “not meaningful”.

When comparing companies operating in different jurisdictions, we believe the EV/EBITDA multiple to be the most appropriate multiple to use as it avoids the distortionary effects of different depreciation and interest rates and different taxation regimes which are inherent when using earnings before interest and tax multiples or profit after tax multiples. We note that the current median EV/EBITDA multiple is 13.7x and the median of the historical three-year median EV/EBITDA multiples is 9.8x.

We note that this median multiple is derived from a set of comparable companies that are based in different jurisdictions, none of which, according to the best of our knowledge, have had any material announcements in the last six (6) months which could adversely impact their respective motor vehicle distribution industries. Singapore, however, has announced measures that are likely to impact the motor vehicle distribution industry.

Analysis of the recent regulatory changes to the Singapore automotive industry

With effect from 26 February 2013, the Monetary Authority of Singapore (“MAS”) introduced fi nancing restrictions on motor vehicle loans in Singapore granted by fi nancial institutions. It was also announced in the Singapore 2013 budget on 25 February 2013 that a new tiered tax rate structure would be introduced for the Additional Registration Fees (“ARF”) for automotives. This new ARF ruling came into effect from the fi rst Certifi cate of Entitlement (“COE”) bidding exercise in March 2013.

On 5 April 2013, the MAS further announced that, with effect from 6 April 2013, the fi nancing restrictions w ould be temporarily lifted for a period of 60 days for the purchase of the limited pool of used cars registered under the Land Transport Authority’s Temporary Transfer Scheme as of 4 March 2013. We note that this temporary lift of the fi nancing restrictions will no longer apply from 5 June 2013.

Based on discussions with the Management and information provided by them, we note that Wearnes Automotive’s deliveries and new sales orders for new passenger vehicles in Singapore for March 2013 and April 2013 have not been adversely impacted as a result of the above-mentioned regulatory measures, despite these measures being in effect. We have also analysed certain automotive industry data in Singapore over the period January 2008 to December 2012, and over the past fi ve (5) years it is apparent that, as the total number of new registrations of passenger cars in Singapore have declined and COE prices have increased, the sales volumes (as measured by number of new passenger car registrations) of the passenger vehicles distributed by Wearnes Automotive in Singapore has increased. This is illustrated in the graph below:

Figure 4

0

500

1,000

1,500

2,000

2,500

2008 2009 2010 2011 2012

No.

of n

ew c

ar r

egis

trat

ions

Volvo Jaguar Land Rover Renault Bentley Mclaren Infiniti

97,348

68,862

42,002

28,270 27,899

1 2 3 4 5

Total new annual registrations in Singapore

$12,871$12,006

$35,119

$56,572

$74,164$83,057

1 2 3 4 5 6

Average COE Prices

Source: Land Transport Authority, Motor Trading Association, KPMG Analysis

39

Notes:

(1) Sales volumes are represented by registrations for new passenger vehicles, which are distributed by Wearnes Automotive in Singapore.

(2) Average COE prices represent the simple average of Category A and Category B COE prices of each bidding exercise held in that year.

Since these measures have been brought into effect relatively recently, it is diffi cult to assess the likely impact on the industry with any degree of confi dence. Additionally, these measures may impact different distributors in different ways. For example, the analysis shown in Figure 4 above appears to suggest that as the costs of purchasing a passenger vehicle increase, it is the sales volumes of the premium or luxury vehicles that benefi t. It should be noted, however, that there are a number of other factors other than COE prices including, inter alia, the supply of COEs, loan restrictions, interest rates on automobile loans, the recent introduction of a tiered ARF taxation structure, support provided by manufacturers to distributors, the popularity of specifi c models of automobiles that have been released, the personal wealth of Singaporean residents and general economic conditions, that will also have an impact of the sales volumes of new premium or luxury brands of passenger vehicles. We further note that, while Singapore contributes a signifi cant proportion of the business division’s total revenue and EBITDA, Wearnes Automotive also operates in a number of other markets including Thailand, Malaysia, Indonesia, Hong Kong and China, all of which will not be impacted by the regulatory changes in Singapore.

We further note that on 17 May 2013, it was reported that the Singapore Transport Minister, Lui Tuck Yew, is considering further regulatory changes to the Singapore automotive industry; amongst the changes being considered are proposals for (i) surcharges on multiple car ownership and (ii) the re-categorisation of COEs to better separate luxury vehicles from mass-market vehicles. Mr Lui also called for the Land Transport Authority of Singapore to conduct a public and industry consultation on these potential regulatory changes. We note that, should such regulatory changes be implemented, they may adversely impact Singapore’s luxury automotive segment.2

Estimated equity value of Wearnes Automotive

Considering all of the above, we are of the view that an EV/EBITDA multiple of 9.0x to 9.5x, rather than the three-year historical median multiple of 9.8x, may be more appropriate to use for the purposes of valuing Wearnes Automotive.

2 Source: Tan, C. 2013, ‘Govt seeks ‘more equitable’ COE system’ and ‘Comprehensive review of quota system needed’, The Straits Times, 17 May, p. 1, A6.

40

The calculation of the estimated equity values of Wearnes Automotive are set out in Table 10 below.

Table 10

Estimated equity value - based on Automotive Comparable Companies and Valuation Reports

S$ million Lower Upper T12M EBITDA(1) 40.1 40.1

EV/EBITDA multiple 9.0x 9. 5x

Implied enterprise value 360.6 3 80.7

Adjusted for:

Revalued property amount(2) 100.3 183.4

Carrying value of associates 4.3 4.3 Adjusted implied enterprise value 465.2 568.3

Adjusted for:

Less: Interest-bearing debt (52.0) (52.0)

Add: Cash & Cash equivalents 36.4 36.4

Less: Minority interest (0.9) (0.9)

Add: Renown Heritage NAV (excluding development property)(3) 0.3 0.3

Less: Capitalised headquarter costs allocation(4) (20.0) ( 18.2) Estimated equity value range 429.0 533.9

Source: Company fi lings, Company’s management accounts, information provided by the Management, Bloomberg, Capital IQ, KPMG Analysis

Notes:

(1) The T12M EBITDA fi gure has been adjusted to remove the estimated market value of the annual lease expense associated with the revalued properties. This adjusted T12M EBITDA fi gure also includes 100% of the Rank PT O’Connor’s Co Ltd’s relevant fi nancial fi gures.

(2) The basis of valuation of the property for the lower range is market value based on existing use and condition. The basis of valuation of the property for the upper range is market value of the property as a redevelopment site for the 45 Leng Kee Road and 249 Alexandra Road properties and market value based on existing use and condition for the Sungei Besi property.

(3) Renown Heritage is typically classifi ed under the Property Division, however, the building for the Renown Heritage property is classifi ed under Wearnes Automotive. As the Renown Heritage property and building have been revalued together, for the purposes of this valuation, we have reclassifi ed the remaining assets and liabilities of Renown Heritage into Wearnes Automotive and the revalued amount of the WBL Group’s proportion of the development property of Renown Heritage has been included in the total revalued property amount in the Wearnes Automotive valuation.

(4) Capitalised corporate headquarter costs have been allocated to Wearnes Automotive based on the Management’s proposed allocation measures.

41

We have cross-checked the resultant Enterprise Value range of S$360.6 million to S$380.7 million, based on the EV/EBITDA multiple of 9.0x to 9.5x, using a simple capitalised earnings approach as below.

Table 11

Estimated Enterprise Value - based on capitalised earnings approach

S$ million 201 2(1) 201 3(2) Average

T12M EBITDA(3) 34.4 46.7 40.6

Less: estimited rental expense (6.7) (6.7) (6.7)

Adjusted EBITDA 27.8 40.1 33.9

Capitalisation rate 10% to 11%

Range of Enterprise Value 308.3 - 400.7

Source: Company’s management accounts, information provided by the Management, KPMG Analysis

Notes:

(1) For the 12-month period ending 31 March 2012.

(2) For the 12-month period ending 31 March 2013.

(3) The T12M EBITDA fi gure has been adjusted to include 100% of the Rank PT O’Connor’s Co Ltd’s relevant fi nancial fi gures.

We note that the Enterprise Value range of S$360.6 million to S$380.7 million falls within the range of values using the capitalised earnings approach.

We would like to highlight that the analyses performed in this Section 8.5.1 have been conducted in accordance with the methods and subject to limitations described in Section 7 of this Letter. The Independent Directors may wish to advise Stockholders and Bondholders to read Section 7 of this Letter carefully.

8.5.2 Property Division

WBL Corporation holds a number of property assets through its subsidiaries, associated companies and joint ventures. Some of these properties are held under foreign subsidiaries. A signifi cant proportion of the property assets are held within the WBL Group’s Chinese property development arm, which has been engaged in property development, property management and property investment in the People’s Republic of China (the “PRC”) since 1990. The WBL Group’s property development activities are focused on high-quality, high-end residential and commercial projects in Chengdu, Chongqing, Shanghai, Shenyang and Suzhou.

As the property assets held by the Property Division are based largely upon a measure of historical value or cost, we have adopted a historical book NAV-based valuation approach and where possible, we have revalued the book values of the property assets based on recent valuation reports for the respective properties in order to calculate the RNAV of a particular asset or entity. Property-related companies are often valued using a historical NAV-based approach as their asset backings are perceived as providing support for the value of their equity.


We have relied on the balance sheets as at 31 March 2013 which have been prepared by the Management of the entities under the Property Division. The entities of the Property Division have an aggregate NAV of approximately S$231.6 million, which refl ects adjustments for intercompany transactions, investments in subsidiaries, associated companies and joint ventures, goodwill, dividends payable, dividends receivable and other group adjustments. These adjustments have been made at an individual entity level to account for certain items which are eliminated upon group consolidation or, in the case of goodwill, are only recognised at the group level.

42

In connection with the Revised UE Offers, we have relied on the valuation estimates of certain properties which are held under PRC-based entities of the Property Division. These valuation estimates are provided by the Company and the Independent Valuers to ascertain the RNAV of the Property Division. The Valuation Reports, which are described in Appendix II of the Supplementa l Letter, have been made available for inspection. Shanghai Lixin has also provided a Supplementary Report which states that they believe that the results of their assessment of the PRC Properties provided in their valuation report dated 6 February 2013 are still valid.

We note that there has been a recent round of property cooling measures and policies introduced by the central government of the PRC. Accordingly, in calculating a lower value estimate for the Property Division, we have adjusted Shanghai Lixin’s assessed values for selected PRC Properties, in accordance with the Management’s guidance.

While a majority of the valuation estimates are provided by the Independent Valuers, the Management has advised that a certain PRC Property is in the course of being disposed (the “Disposed Property”). As the disposal has not been completed, the Disposed Property remains on the WBL Group’s balance sheet as at the Latest Practicable Date and has been revalued based on its disposal price net of taxes and administrative expenses relating to the disposal.

By deducting the PRC Properties’ carrying values as at 31 March 2013 from their respective valuation fi gures, we arrive at the net revaluation surplus for the PRC Properties. The net revaluation surplus is then added to the aggregate NAV of the Property Division to arrive at the RNAV for the Property Division.

It should be noted that the Company has not sought nor commissioned external property valuations for a number of investment properties that it owns and we have not made any attempt to estimate the current fair value or market value of those properties. Instead, our valuation estimate for these properties is based on the carrying values for those properties as at 31 March 2013. We further note that the Company accounts for these investment properties at cost less accumulated depreciation and impairment losses, and that these properties may have appreciated signifi cantly since the Company’s acquisition.


Analysis of the recent regulatory changes to the residential property sector in the PRC

The central government of the PRC had on 1 March 2013 announced further policy tightening measures on the property market in the PRC. This includes stricter implementation of a 20% capital gains tax on the resale of residential property units by individuals within the fi rst fi ve (5) years of ownership (the “20% Capital Gains Tax”), stricter residential property purchase restrictions, and increased down payment requirements and higher mortgage rates for individuals who acquire a second or subsequent residential property (the “Property Tightening Measures”). Full implementation details will be made available by each local authority. We note that these Property Tightening Measures have been implemented by a number of local governments, including those of Beijing, Shanghai, Guangdong, Chengdu, Chongqing and Shenyang.

Figure 5 shows the impact of the announcement of the Property Tightening Measures on the stocks of publicly-listed property development companies with property portfolios in the PRC. The chart represents a value-weighted share price index comprised of 63 publicly-listed property development companies with property portfolios in the PRC (the “Property Price Index”) and we note that the Property Price Index fell by 12.87% to reach its lowest value on 15 March 2013 after the announcement of the Property Tightening Measures. The Property Price Index then appreciated by 16.91% from 15 March 2013 to the Latest Practicable Date and overall has appreciated by 3.62% from 1 March 2013 to the Latest Practicable Date. While the Property Price Index has recovered signifi cantly since 15 March 2013, the Management has considered it appropriate to maintain a discount to Shanghai Lixin’s assessed values of certain PRC Properties based on Shanghai Lixin’s Supplementary Report which states that the Property Tightening Measures will help to control the growth of real estate prices in the PRC. The difference between the lower and upper values of the RNAV in Table 12 below, which is S$30.9 million, represents this discount.

43

Figure 5

80.00

85.00

90.00

95.00

100.00

105.00

110.00

115.00

120.00

125.00

May 12 Jun 12 Jul 12 Aug 12 Sep 12 Oct 12 Nov 12 Dec 12 Jan 13 Feb 13 Mar 13 Apr 13 May 13

Inde

x V

alue

1 2

Source: Capital IQ, Factiva

Notes:

(1) The Central Government of the PRC announced the Property Tightening Measures on 1 March 2013.

(2) The Property Price Index fell by 12.87% from 1 March 2013 to 15 March 2013.

(3) Constituents of the Property Price Index include Agile Property Holdings Limited, AVIC Real Estate Holding Company Limited, BEIH-Property Company Limited, Beijing Capital Development Company Limited, Beijing Capital Land Limited, Beijing Vantone Real Estate Company Limited, China Aoyuan Property Group Limited, China Enterprise Company Limited, China HGS Real Estate Incorporated, China Housing and Land Development Incorporated, China Mining International Limited, China Properties Developments Incorporated, China World Trade Center Company Limited, China Yuanbang Property Holdings Limited, CIFI Holdings (Group) Company Limited, Cinda Real Estate Company Limited, Classic Dream Properties Limited, Cosmos Group Company Limited, CRED Holding Company Limited, Franshion Properties (China) Limited, Gemdale Corporation, Golden Wheel Tiandi Holdings Company Limited, Great China International Holdings Incorporated, Gree Real Estate Company Limited, Guoxing Rongda Real Estate Company Limited, Hainan Haide Industry Company Limited, Hangzhou Binjiang Real Estate Group Company Limited, Heilongjiang Tianlun Real Estate Development Company Limited, Henan Oriental Silver Star Investment Company Limited, Hua Yuan Property Company Limited, Huafa Industrial Company Limited Zhuhai, Jiangsu Future Land Company Limited, Jilin Guanghua Holding Group Company Limited, Join-In (Holding) Company Limited, KWG Property Holdings Limited, Langfang Development Company Limited, Lushang Property Company Limited, Macrolink Real Estate Company Limited, Milord Real Estate Development Group Company Limited, Nanjing Chixia Development Company Limited, Oceanwide Real Estate Group Company Limited, Poly Real Estate Group Company Limited, Risesun Real Estate Development Company Limited, Rongan Property Company Limited, Shanghai Duolun Industry Company Limited, Shanghai Fenghwa Group Company Limited, Shanghai Industrial Development Company Limited, Shanghai Jinfeng Investment Company Limited, Shanghai Lujiazui Finance & Trade Zone Development Company Limited, Shanghai Xinmei Real Estate Company Limited, Shenzhen Zhenye (Group) Company Limited, Soho China Limited, Sun Century Group Limited, Sundy Land Investment Company Limited, Tande Company Limited, Tianbao Holdings Limited, Winsan (Shanghai) Industrial Corporation Limited, Wolong Real Estate Group Company Limited, Xiamen Insight Investment Company Limited, YangGuang Company Limited, Yeland Group Company Limited, Zhejiang WHWH Industry Company Limited and Zhonghong Holding Company Limited.

Estimated equity value of the Property Division

We set out in Table 12 below the valuation fi gures for the revalued properties and the Property Division’s effective share of the net revaluation surplus net of potential tax liabilities and minority interests.

44

Table 12

RNAV Analysis for the Property Division S$ million

Lower Upper

Aggregate NAV of Property Division as of 31 March 2013(1) 231.6 231.6

(a) Net revaluation surplus for PRC Properties after-tax(2) 192.2 223.1

(b) Net revaluation surplus for Disposed Property(3) 2.3 2.3

Total adjustment to NAV 194.5 225.4 RNAV 426.0 456.9 Lower Upper

less: Capitalised headquarter cost allocation(4) (35.9) (32.7) Adjusted RNAV 390.1 424.3

Source: Company fi lings, Valuation Reports, Management’s estimates, Bloomberg Notes:

(1) NAV adjusted for intercompany transactions, investments in subsidiaries, associated companies and joint ventures, goodwill, dividends payable, dividends receivable, and other group adjustments as at 31 March 2013.

(2) The revaluation surpluses for the lower value estimate includes the Management’s estimated potential reduction in Shanghai Lixin’s total assessed values for certain PRC Properties, to account for the potential effects of the Property Tightening Measures.

(3) For a property in the course of being disposed as advised by the Management. Revaluation surplus is the difference between the agreed sale price net of taxes and the property’s book value as at 31 March 2013.

(4) An estimate of the present value of WBL Corporation’s headquarter costs has been allocated based on the Management’s

proposed allocation measures.

We set out in Table 13 below the detailed attributable net revaluation surplus after-tax for each of the revalued PRC Properties based on valuation estimates provided by Shanghai Lixin and further estimates provided by the Management.

Table 13

Net revaluation surplus for PRC Properties after-tax(1)

Properties held under the following entitiesRevaluation Surplus

(S$ million)(2)(3)

Lower Upper

Chengdu Huaxin International Realty Co Ltd 35.7 41.2

Chongqing Huaxin International Urban Development Co Ltd 1.1 1.1

Shanghai Olympic Garden Property Development Co Ltd 17.9 19.4

Shenyang Huaxin International City Development Co Ltd 7.3 7.9

Shenyang Huaxin International Realty Co Ltd 13.0 13.0

Shenyang Summer Palace Property Development Co Ltd 81.3 98.8

Suzhou Future Agriworld Co Ltd 11.7 11.7

Suzhou Huaxin International Real Estate Co Ltd 11.2 11.2

Suzhou Industrial Park Jian Wu Heng Ye Property Development Property Development Co Ltd 4.3 10.2

Wearnes Technology (Shenyang) Ltd 8.7 8.7

Net revaluation surplus from PRC Properties after-tax 192.2 223.1

Source: Company fi lings, Valuation Reports, Management’s estimates, Bloomberg

45

Notes:

(1) The values stated in Shanghai Lixin’s valuation report dated 6 February 2013 are net of deed tax, business tax and additional tax, land value-added tax and income tax, cost of sales and profi t reduction.

(2) An exchange rate of S$1 to RMB4.887 from Bloomberg as at the Latest Practicable Date is used to convert values of the PRC Properties from Chinese Yuan to Singapore Dollars.

(3) The revaluation surpluses for the lower value estimate includes the Management’s estimated potential reduction in Shanghai Lixin’s total assessed values for certain PRC Properties, to account for the potential effects of the Property Tightening Measures.

We would like to highlight that the analyses performed in this Section 8.5.2 have been conducted in accordance with the methods and subject to the limitations described in Section 7 of this Letter. The Independent Directors may wish to advise Stockholders and Bondholders to read Section 7 of this Letter carefully.

8.5.3 Technology division

The Company’s technology division (the “Technology Division”) comprises two key subsidiaries, (i) Multi-Fineline Electronix, Inc. (“MFLEX”) which is listed on the National Association of Securities Dealers Automated Quotations (NASDAQ), and (ii) MFS Technology Ltd (“MFS”) which is listed on the Mainboard of the SGX-ST, both of which are primarily engaged in manufacturing fl exible printed circuits and providing integrated high technology content solutions and services to customers. These include Apple, Research in Motion, Motorola and Nokia.


We have applied a marked-to-market approach to estimate the lower values of the WBL Group’s controlling interests in MFLEX and MFS. Additionally, in order to estimate the upper range of our valuation for these investments, we have added a control premium to the lower value estimates (which is based on marked-to-market prices) so as to account for the WBL Group’s controlling stakes in these entities.


Based on the valuation approach, we have estimated an equity value range for the WBL Group’s stake in MFLEX of between S$268.2 million and S$308.4 million and an estimated equity value range for the WBL Group’s stake in MFS of between S$74.8 million and S$86.0 million. The WBL Group’s headquarter capitalised expense allocation, the basis of which has been provided by the Management, is estimated to be between S$4.0 million (for the lower valuation range) and S$3.6 million (for the upper valuation range) for the Technology Division.


8.5.4 Engineering, manufacturing and distribution division

The WBL Group’s engineering, manufacturing and distribution division (the “EMD Division”) comprises a number of distinct businesses operating in a variety of industries such as manufacturing, information technology, automotive, mining, construction, utilities and capital goods. Within the EMD Division, businesses are further categorised as being either involved in engineering (“Engineering Companies”), manufacturing (“Manufacturing Companies”) or distribution (“Distribution Companies”).


We set out below a summary of the valuation approaches that have been applied to arrive at the estimated equity valuations of the businesses within the EMD Division. We have selected an appropriate valuation approach after due consideration of the value drivers for each of the businesses within this division.

46

Table 14

EMD Division - valuation approach

Segment / Business Unit Description

Basis of valuationapproach (lower/upper)

Engineering

O’Connor’s Holdings Pte Ltd Investment holding NAV

O’Connor’s (B) Sdn Bhd Investment holding NAV

O’Connor’s Malaysia Engages in installation of communication equipments primarily for Oil & Gas industry

Earnings based valuation or Relative valuation

O’Connor’s Singapore Engages in system integration of security, telecommunication and technical systems


O’Connor’s Technology Pte Ltd Developes and manufacture systems for tracking surgical equipments and consumables in hospitals

NAV/RNAV

Puffersoft Labs Pte Ltd Provides software for desktop mangement and virtualisation solutions

NAV/RNAV

Manufacturing

Wearnes Cambion Ltd Engages in manufacture of electronic connectors NAV/Earnings based valuation or Relative valuation

Wearnes Precision (Shenyang) Ltd

Engages in diecasting and precision engineering NAV

Wearnes Components Shenyang Ltd

Engages in manufacture of electronic components NAV/Earnings based valuation or Relative valuation

Wearnes Electronics (Malaysia) Sdn Bhd

Assembly and manufacture of electronic components (ceased operations on 31 March 2012)

RNAV

Distribution

Far East Motors Engages in sale of automotive parts, motorcar workshop equipments, and fuel storage and delivery services

NAV

Wealco Equipment Engages in the supply and servicing of marine propulsion system and construction equipments


Welmate Supplies architectural ceiling and partition systems, fi re protection systems and wall panelling and cladding systems for the construction industry


Polytek Engineering Engages in the supply, installation and maintenance of laundry equipment, steam boilers, hot water systems and washroom accessories

NAV

SPC Wearnes Distributes mainly bottled and some bulk Liquefi ed Petroleum Gas to commerical ventures, households and for industrial use in Singapore


Pacifi c Silica(1) Produces silica sands for commercial and industrial use and supplies sands to golf courses and the construction industry

NAV

Others

Other miscellaneous entities(2) Entities that are dormant, dissolved or under liquidation.

NAV


47

Notes:

(1) We note that the WBL Group has plans to redevelop the land upon which Pacifi c Silica currently mines for sand. However, due to the absence of a recent property valuation report, and the uncertainty as to when Pacifi c Silica may be able to use the land for the purpose of property development, we were not able to estimate the potential value of Pacifi c Silica based upon this redevelopment venture. As such, we have applied the NAV approach to our valuation of Pacifi c Silica, although we note there may be considerable upside potential to this value.

(2) Miscellaneous entities include Wearnes Electronics (Shenyang) Ltd, Wearnes Hollingworth (Shenyang) Ltd, Wearnes

Electronics Zhongshan Ltd, Wearnes Precision (Malaysia) Sdn Bhd, WTS USA, and Windigo Systems Inc.


Presented in Table 15 below is a summary of the estimated equity values of each of the business segments within the EMD Division, being the Engineering Companies, the Manufacturing Companies and the Distribution Companies. Within the EMD Division, there are also a number of other dormant entities or entities undergoing liquidation, for which we have provided aggregate net asset values.

Table 15

EMD Division - estimated equity values

Estimated Equity Value

(S$ million)

Segment / Business Unit Lower Upper

Engineering 73.1 81.3

Manufacturing 47.5 52.2

Distribution 109.9 114.5

Other entities 10.3 10.3

Capitalised headquarter cost allocation(1) (20.0) (18.2)

Total 220.7 240.1

Source: Company fi lings, Company’s management accounts, Valuation Reports, information provided by the Management, Bloomberg, Capital IQ, KPMG Analysis Note:

(1) Estimate of the present value of WBL Corporation’s headquarter costs is allocated based on the Management’s proposed allocation measures.

We would like to highlight that the analyses performed in this Section 8.5.4 have been conducted in accordance with the methods and subject to limitations described in Section 7 of this Letter. The Independent Directors may wish to advise Stockholders and Bondholders to read Section 7 of this Letter carefully.

8.5.5 Corporate services and others division

The WBL Group’s corporate services and others division (the “CSO Division”) comprises a number of disparate businesses that are not managed at a divisional level, but rather on an individual business level. These businesses span a broad range of industries, from the production of young plants to the manufacturing of power adapters and medical equipment.

A number of passive investments in managed funds and associated companies are also classifi ed within this division, as are a number of investment holding companies and dormant entities, which may continue to hold tangible assets or liabilities. Additionally, certain other group level assets and liabilities are accounted for under this division such as those relating to the WBL Group’s corporate headquarters or centralised offi ce functions.


Provided in Table 16 below is a summary of the valuation approaches that have been applied to arrive at the estimated equity valuations of the businesses within the CSO Division. We have selected an appropriate valuation approach after due consideration of the value drivers for each of the businesses within this division.

48

Table 16

CSO Division - valuation approach

Entity/Business unit Description

Basis of valuationapproach(lower/upper)

WBL Corporation Limited Investment holding NAV

Speedling Inc Provides transplant technology and production of seedlings

NAV/RNAV

Suzhou Speedling Co Ltd Engages in production and distribution of agricultural seedlings

NAV

Chengdu Wearnes UEST Co Ltd

Engages in production of bio-electronic products NAV

Chrontel, Inc Development of integrated circuits NAV

Global Investment Holdings Co. Ltd

Investment holding and fi nancial services NAV

RFNet Technologies Pte Ltd Provides wireless, surveillance and networking solutions for transportation, fi xed wireless telecommunication and industrial telemetry application

NAV

Wearne Brothers Services (Pte) Ltd

Provides management and fi nancial services NAV

Associated Motor Industries (Pte) Ltd

Leasing of premises to related companies NAV

Wearnes Global Co. Ltd Trading of electronic components

United Engineers Ltd Engages in engineering, construction, and integrated facility management businesses

Marked-to-Market

Other miscellaneous entities(1) Entities that are dormant or under liquidation & Investment holding companies

NAV/RNAV


Notes:

(1) Other miscellaneous entities include Wearne Brothers (HK) Ltd, Wearnes (USA) Inc, Kunming Speedling Inc, Speedling Investment Pte Ltd, Wearnes International (1994) Ltd, Wearnes Technology Pte Ltd, Shenzhen Weko Biotechnology Limited, Shenzhen Technology Development Corporation, Wearnes Precision (Private) Ltd, Wearnes Technology (Hong Kong) Ltd, Sunique Co Ltd, United Wearnes Technology Pte Ltd, Wearnes Hollingsworth S’pore Pte Ltd, NCD Wearnes (M) Sdn Bhd, and United Circuits (HK) Limited.


We set out in the table below a summary of the estimated equity valuations of the businesses or entities within the CSO Division.

49

Table 17

CSO Division - estimated equity values

Equity Value (S$ million)

Segment / Business Unit Lower Upper

Speedling Inc 21.9 61.0

United Engineers Ltd 63.2 63.2

Other entities 26.3 26.3

Subtotal 111.5 150.5


Group level debt (247.7) (247.7)

Other net asset value 96.5 96.5

Capitalised headquarter cost allocation(1) (73.5) (68.7)

Total (113.3) (69.4)


Note:

(1) Estimate of the present value of the Company’s headquarter costs is allocated based on the Management’s proposed allocation measures.


9. FINANCIAL EVALUATION OF THE CONVERTIBLE BONDS OFFER

In analysing the Convertible Bonds Offer, we assessed the consideration being offered to the Bondholders.

The Convertible Bonds Consideration is the “see-through” price, which in this case is a cash sum equal to S$4.50 multiplied by the number of Conversion Stock Units into which the principal amount of the Convertible Bonds may be converted (rounded down to the nearest Conversion Stock Unit).

As an example, a holder of S$1 million worth of Convertible Bonds will be offered a cash sum of:

(S$1,000,000 ÷ S$2.29) = 436,681.22 Conversion Stock Units

436,681 Conversion Stock Units x S$4.50 = S$1,965,064.50;

(where S$2.29 is the conversion price and S$4.50 is the cash sum offered for each Conversion Stock Unit)

We note that, as the Convertible Bonds Offer Price is calculated on the basis of a “see-through” price, the consideration a Bondholder would receive from accepting the Convertible Bonds Offer would be the same as if the Bondholder were to convert the Convertible Bonds held to Conversion Stock Units and accept the Stock Unit Offer. Accordingly, in the absence of a Distribution to Stockholders during the Offer Period (as defi ned in the Offer Document), our conclusion in relation to the Convertible Bonds Offer would be the same as our conclusion in relation to the Stock Unit Offer.

50

10. OTHER CONSIDERATIONS IN RELATION TO THE REVISED UE OFFERS

10.1 Recent fi nancial performance of WBL Corporation

We note that WBL Corporation recorded a consolidated net loss of approximately S$24.7 million for the three month period ending 31 March 2013, of which S$11.4 million was attributable to the equity holders of the Company. This net loss is largely due to the poor fi nancial performance of MFLEX, which reported a consolidated net loss of approximately US$23.9 million in the same period (of which S$18.0 million was attributable to equity holders of the Company).

10.2 Alternative offers from third parties

The Directors have informed us that as at the Latest Practicable Date, the Directors and the Company have not been approached with a higher competing offer.

10.3 No intention to further revise the terms of the Revised UE Offers

We note that the Offeror has stated in the Revised UE Offers Announcement that it does not intend to further revise the terms of the Stock Unit Offer and Convertible Bonds Offer.

10.4 Revised UE Offers being declared unconditional in all respects

We note that, following the acceptances of the Revised UE Offers by STC, its concert parties and other Stockholders on 13 May 2013, the Revised UE Offers have become unconditional in all respects.

10.5 Control of the Company

As at the Latest Practicable Date, the Offeror and its Concert Parties had owned, controlled or ha d agreed to acquire an aggregate of 90.2% of the total number of issued Stock Units and approximately 89.3% of the maximum potential stock capital of WBL Corporation. As such, the Offeror and its Concert Parties are now in a position to signifi cantly infl uence, inter alia, the Management and operating and fi nancial policies of the Company and have gained statutory control of the Company which entitles them to pass all ordinary resolutions on matters in which the Offeror and its Concert Parties do not have an interest, at general meetings of Stockholders.

10.6 The Offeror’s intentions relating to the listing status of the Company

The Offeror’s intentions relating to the Company and its listing status are provided in paragraph 11.2 of the Offer Document, an excerpt of which is reproduced below:

“11.2 Listing Status

Pursuant to Rule 1105 of the Listing Manual, upon an announcement by the Offeror that acceptances have been received pursuant to the Stock Unit Offer that bring the holdings owned by the Offeror and its Concert Parties to above 90% of the total number of issued Stock Units (excluding Stock Units held in treasury), the SGX-ST may suspend the trading of the Stock Units and the Convertible Bonds on the SGX-ST until such time it is satisfi ed that at least 10% of the total number of issued Stock Units (excluding Stock Units held in treasury) are held by at least 500 Stockholders who are members of the public. Under Rule 1303(1) of the Listing Manual, if the Offeror succeeds in garnering suffi cient acceptances, thus causing the percentage of the total number of issued Stock Units (excluding Stock Units held in treasury) held in public hands to fall below 10%, the SGX-ST will suspend trading of the Stock Units and the Convertible Bonds at the close of the Stock Unit Offer.

In addition, under Rule 724 of the Listing Manual, if the percentage of the total number of issued Stock Units (excluding Stock Units held in treasury) held in public hands falls below 10%, WBL must, as soon as practicable, announce that fact and the SGX-ST may suspend the trading of all the Stock Units and the Convertible Bonds. Rule 725 of the Listing Manual states that the SGX-ST may allow WBL a period of three months, or such longer period as the SGX-ST may agree, to raise the percentage of Stock Units (excluding Stock Units held in treasury) in public hands to at least 10%, failing which WBL may be delisted from the SGX-ST.

51

It is not the intention of the Offeror to preserve the listing status of WBL. In the event that the trading of Stock Units and the Convertible Bonds on the SGX-ST is suspended pursuant to Rule 724 or Rule 1105 of the Listing Manual, the Offeror has no intention to undertake or support any action for any such listing suspension by the SGX-ST to be lifted.

…”

10.7 Trading liquidity of the Stock Units

Stockholders should note that, even if the listing status of the Company is preserved, the Offeror has increased its equity stake in the Company by 52.6% during the UE offer period by way of conversion of convertible bonds, open-market acquisitions and valid acceptances of the Stock Unit Offer. This has substantially reduced the free fl oat of the Company, which is likely to reduce the trading liquidity of the Stock Units.

10.8 Compulsory acquisition

An excerpt of paragraph 11.1 of the Offer Document is reproduced below:

“11.1 Compulsory Acquisition

Pursuant to Section 215(1) of the Companies Act, if the Offeror receives valid acceptances pursuant to the Stock Unit Offer (or otherwise acquires Stock Units during the period when the Stock Unit Offer is open for acceptance) in respect of not less than 90% of the total number of issued Stock Units (other than those already held by the Offeror, its related corporations or their respective nominees as at the date of the Stock Unit Offer and excluding any Stock Units held in treasury), the Offeror would have the right to compulsorily acquire all the Stock Units of Stockholders who have not accepted the Stock Unit Offer (the “Dissenting Stockholders”), at a price equal to the Stock Unit Offer Price.

Dissenting Stockholders have the right under and subject to Section 215(3) of the Companies Act, to require the Offeror to acquire their Stock Units in the event that the Offeror, its related corporations or their respective nominees acquire, pursuant to the Stock Unit Offer, such number of Stock Units which, together with the Stock Units held by the Offeror, its related corporations or their respective nominees, comprise 90% or more of the total number of issued Stock Units (excluding Stock Units held in treasury). Dissenting Stockholders who wish to exercise such right are advised to seek their own independent legal advice.

Under the Concert Party Group Confi rmations, the Concert Party Group has confi rmed that they will not sell, during the Offer Period, any of their Stock Units amounting to approximately 39.53 %2 of the total number of issued Stock Units, whether pursuant to the Offers or otherwise. As the Concert Party Group will not accept the Stock Unit Offer in respect of their Stock Units, it is envisaged that the Offeror would not become entitled to exercise the right of compulsory acquisition under Section 215(1) of the Companies Act pursuant to acceptances of the Stock Unit Offer. In relation to Section 215(3) of the Companies Act, Dissenting Stockholders are advised to seek their own independent legal advice.”

10.9 Material litigation

The Directors have confi rmed that, as at the Latest Practicable Date, none of the Company or its subsidiaries is engaged in any material litigation, either as plaintiff or defendant, which might materially and adversely affect the fi nancial position of the Company or the WBL Group, taken as a whole, and the Directors are not aware of any litigation, claims or proceedings pending or threatened against the Company or any of its subsidiaries or any facts likely to give rise to any litigation, claims or proceedings which might materially and adversely affect the fi nancial position of the Company or any entities within the WBL Group, taken as a whole.

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11. CONCLUSION

In arriving at our opinion to the Independent Directors, we have carefully considered the information that has been made available to us and the above factors set forth in this Letter including, inter alia, the following:

Liquidity of the Stock Units. Prior to the Last Unaffected Share Price Date, the average daily traded value of the Company’s Stock Units was within the range of the comparable companies by market capitalisation, albeit at the lower end of the range. Additionally, the Offeror has increased its equity stake in the Company by 52.6% during the Offer Period (as defi ned in the Offer Document), which has substantially reduced the free fl oat of the Company. Should the listing status of the Company be preserved, the reduction in the free fl oat is likely to reduce the trading liquidity of the Stock Units.

Comparison of the Stock Unit Consideration with VWAPs of the Stock Units. The Stock Unit Consideration is at premiums to the VWAPs of the Stock Units for various periods leading up to, and including, the Last Unaffected Share Price Date and at modest premiums to the VWAPs of the Stock Units for various periods following the Last Unaffected Share Price Date.

Historical multiples analysis. The Stock Unit Consideration is at an implied 139.4% premium to the median of the Company’s T12M EV/EBITDA multiple of 6.6x for the three (3) years prior to the Last Unaffected Share Price Date, a premium of approximately 297.9%, to the median of the Company’s T12M P/E ratio of 11.6x for the three (3) years prior to the Last Unaffected Share Price Date and a premium of approximately 19.1%, to the median of the Company’s P/NAV ratio of 1.1x for the three (3) years prior to the Last Unaffected Share Price Date.

Comparison of the premiums/(discounts) implied by the Stock Unit Consideration with Precedent Take-over Transactions and the Precedent Minority Transactions. The premiums of varying historical period VWAPs of the Stock Units, relative to the Stock Unit Consideration, are within the range of, although lower than the corresponding mean and median premiums of the Precedent Take-over Transactions. The premiums of varying historical period VWAPs of the Stock Units, relative to the Stock Unit Consideration, are within the range and above the median premiums of the Precedent Minority Transactions.

Change of control of the Company. We note that, as at the Latest Practicable Date, the Offeror and its Concert Parties had owned, controlled or have agreed to acquire an aggregate of 90.2% of the total number of issued Stock Units and approximately 89.3% of the maximum potential stock capital of WBL Corporation. We further note that STC and its concert parties have accepted the Revised UE Offers. As such, the Offeror and its Concert Parties are now in a position to signifi cantly infl uence, inter alia, the Management and operating and fi nancial policies of the Company and have gained statutory control of the Company which entitles them to pass all ordinary resolutions on matters in which the Offeror and its Concert Parties do not have an interest, at general meetings of Stockholders.

Sum-of-the-parts valuation. The Stock Unit Consideration is within the sum-of-the-parts estimated valuation range of S$4.50 to S$5.40 per Stock Unit, albeit at the lower end of the estimated range. We note that, in arriving at this estimated valuation range, we have not applied any conglomerate discount, nor have we applied a discount for a potential reduction in marketability of the Stock Units or Convertible Bonds due to a lower public fl oat.

No alternative offers from third parties. At the Latest Practicable Date, the Directors and the Company have not been approached with a higher competing offer.

No intention to further revise the Stock Unit Consideration or Convertible Bonds Consideration. We note that the Offeror does not intend to further revise the fi nancial terms of the Stock Unit Offer and Convertible Bonds Offer.

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Revised UE Offers being declared unconditional in all respects and the Offeror’s intentions relating to the listing status of the Company. We note that the Revised UE Offers have become unconditional in all respects and that, the Offeror has stated that if trading in the Stock Units and Convertible Bonds is subsequently suspended pursuant to Rule 724 or Rule 1105 of the Listing Manual, the Offeror has no intention to undertake or support any action for such listing suspension by the SGX-ST to be lifted. It should also be noted that, even if the Stock Units are not delisted, the increase in the Offeror’s stockholding in the Company has substantially reduced the free fl oat of the Company, which is likely to reduce the future liquidity of the Stock Units in the market.

Having carefully considered the information available to us as at the Latest Practicable Date, and based on our review of the fi nancial terms of the Revised UE Offers, we are of the opinion that the Revised UE Offers are fair, from a fi nancial point of view. Accordingly, the Independent Directors may wish to consider advising the Stockholders and Bondholders to ACCEPT the Revised UE Offers.

The Independent Directors may also wish to consider advising Stockholders and Bondholders who are considering rejecting the Revised UE Offers, the following:

(i) There is no certainty that following the close of the Revised UE Offers, that the Company will meet the minimum public fl oat requirements under the rules of the Listing Manual of the SGX-ST. The Offeror has stated that in the event that the trading of the Stock Units and the Convertible Bonds on the SGX-ST is suspended pursuant to Rule 724 or Rule 1105 of the Listing Manual, the Offeror has no intention to undertake or support any action for any such listing suspension to be lifted. Stockholders or Bondholders would then hold unlisted Stock Units or Convertible Bonds which would be substantially less marketable.




(v) Except with SIC’s consent the Offeror and any person acting in concert with the Offeror may not within six (6) months from the close of the Revised UE Offers make a second offer to, or acquire any Stock Units from, any Stockholder on terms better than those made available under the Revised UE Offers. The Offeror and any person acting in concert with the Offeror may also not enter into any special deals (as defi ned in the Code) with any Stockholder.

We would like to highlight that the analyses performed in this Section 11 have been conducted in accordance with the methods and subject to limitations described in Sections 7 through 9 of this Letter. The Independent Directors may wish to advise Stockholders and Bondholders to read Section 2 and Sections 7 through 9 of this Letter carefully.

In rendering the above opinion, we have not taken into consideration any general or specifi c investment objectives, fi nancial situation, risk profi le, tax position or particular needs and constraints of any individual Stockholder or Bondholder. We advise the Independent Directors to advise any individual Stockholder or Bondholder who may require specifi c advice in relation to their investment portfolio to consult their stockbroker, bank manager, solicitor, accountant, tax adviser, or other professional adviser immediately.

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Our opinion is only based on a fi nancial analysis and does not incorporate any assessment of commercial, legal, tax, regulatory or other matters. Our opinion also does not incorporate an assessment of the price at which the Stock Units or Convertible Bonds may trade following the close of the Revised UE Offers. Such factors (including the aforesaid illustrations) are beyond the ambit of our review and do not fall within our terms of reference in connection with the Stock Unit Offer or the Convertible Bonds Offer.

We wish to emphasise that we have been appointed to render our opinion as at the Latest Practicable Date. Our terms of reference do not require us to express, and we do not express, an opinion on the future growth prospects of the Company or the WBL Group. This opinion is addressed to the Independent Directors solely for their benefi t in connection with and for the purposes of their consideration of the Stock Unit Offer and the Convertible Bonds Offer and should not be relied on by any other party or used for any other purpose. This Letter does not constitute, and should not be relied on, as opinion or a recommendation to, or confer any rights or remedies upon, any Stockholder or Bondholder. Nothing herein shall confer or be deemed or is intended to confer any right or benefi t to any third party and the Contracts (Rights of Third Parties) Act (Chapter 53B) of Singapore shall not apply. The recommendation made by the Independent Directors to the Stockholders and Bondholders in relation to the Stock Unit Offer and Convertible Bonds Offer remains the sole responsibility of the Independent Directors.

This Letter is governed by, and construed in accordance with the laws of Singapore, and is strictly limited to the matters stated herein and does not apply by implication to any other matter. No other person may use, reproduce, disseminate, refer to or quote this Letter (or any part thereof) for any purpose at any time and in any manner except with the prior written approval of KPMG Corporate Finance Pte Ltd in each specifi c case.

Yours faithfullyFor and on behalf ofKPMG Corporate Finance Pte Ltd

Vishal Sharma Jason YongExecutive Director Manager

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APPENDIX II

ADDITIONAL GENERAL INFORMATION

1. DIRECTORS

The names, addresses and appointments of the Directors as at the Latest Practicable Date are set out below:

Name Address Appointment

Mr Norman Ip Ka Cheung 38 Merryn RoadDunearn EstateSingapore 298487

Chairman, Independent and Non-Executive Director

Mr Benjamin C. Duster, IV 1351 High Falls CourtAtlanta, Georgia, USA 30311

Non-Independent and Non-Executive Director

Dr Peter Eng Hsi Ko 787 Mountbatten RoadSingapore 437785


Mr Mark C. Greaves 31 One Tree Hill Singapore 248689


Mr Lai Teck Poh 35 Merryn RoadDunearn EstateSingapore 298484


Mr Kyle Lee Khai Fatt 37 Mount Sinai Rise#09-02 LeighwoodsSingapore 276956

Independent and Non-Executive Director

2. HISTORY AND PRINCIPAL ACTIVITIES

WBL was incorporated in Singapore on 26 November 1912 and is listed on the Main Board of the SGX-ST. The key activities of WBL and its subsidiaries (the “WBL Group”) include automotive, property, technology, engineering, manufacturing and distribution.

(a) In automotive, the WBL Group represents 11 world-renowned brands with operations throughout the region: BMW, Bentley, Bugatti, Infi niti, Jaguar, Land Rover, Mazda, McLaren, Renault, Volkswagen and Volvo.

(b) WBL Group’s property business is mainly in China with a focus on Chengdu, Chongqing, Shanghai, Shenyang and Suzhou.

(c) WBL Group’s technology business comprises primarily of its investments in majority-owned NASDAQ-listed Multi-Fineline Electronix, Inc. and SGX-listed MFS Technology Ltd.

(d) The engineering, manufacturing and distribution division consists of systems integrator O’Connor’s, precision engineering and electronic manufacturing companies, as well as the WBL Group’s sand mining, building materials, LPG and equipment distribution businesses.

3. SHARE CAPITAL

3.1 Issued share capital

The issued and paid-up share capital of WBL as at the Latest Practicable Date is S$490,531,034.17 comprising 277,278,035 issued Stock Units.

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3.2 Capital, dividends and voting rights

The rights of Stockholders in respect of capital, dividends and voting are contained in the Articles, which are available for inspection at WBL’s registered offi ce at 801 Lorong 7 Toa Payoh, #07-00 Wearnes Building, Singapore 319319. The relevant provisions in the Articles relating to the rights of Stockholders in respect of capital, dividends and voting have been extracted and reproduced in Appendix VI of the UE Offeree Circular.

3.3 Number of Stock Units issued since the end of the last fi nancial year

As at the Latest Practicable Date, 6,376,049 new Stock Units have been issued since the end of FY2012, being the last fi nancial year of WBL.

As part of the equity component of the fees of the directors of WBL for the fi nancial year ended 30 September 2012, the Stockholders had, at the annual general meeting of WBL on 18 January 2013, approved the allotment and issuance of an aggregate of 32,000 ordinary shares of WBL to past and present directors of WBL as bonus shares for which no consideration is payable (collectively, the “Remuneration Shares”) as follows:

Director Number of Remuneration Shares

Mr Norman Ip Ka Cheung 8,000

Mr Benjamin C. Duster, IV 4,000

Dr Peter Eng Hsi Ko 4,000

Mr Mark C. Greaves 4,000

Mr Lai Teck Poh 4,000

Mr Fong Kwok Jen (Resigned) 4,000

Mr Yeap Lam Yang (Resigned) 4,000

As the UE Offers have been declared unconditional in all respects, the Remuneration Shares were allotted and issued to the respective past and present directors of WBL on 17 May 2013. The Remuneration Shares, upon issue, were converted into a corresponding number of Stock Units.

3.4 Options and convertible instruments

As at the Latest Practicable Date, there is S$9,379,743 worth of Convertible Bonds outstanding. The Convertible Bonds are convertible at the option of the Bondholders, at any time after the date of issue, into new ordinary shares of WBL at a conversion price of S$2.29, subject to adjustments under certain circumstances.

Save as disclosed above, there are no other outstanding instruments convertible into, rights to subscribe for, and options in respect of, the Stock Units, as at the Latest Practicable Date.

4. DISCLOSURE OF INTERESTS

4.1 Interests of WBL in UE Offeror Securities

WBL does not have any direct or deemed interests in the UE Offeror Securities as at the Latest Practicable Date.

4.2 Dealings in UE Offeror Securities by WBL

WBL has not dealt for value in the UE Offeror Securities during the period commencing six (6) months prior to the Pre-Conditional UE Offers Announcement Date and ending on the Latest Practicable Date.

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4.3 Interests of the Directors in UE Offeror Securities

None of the Directors has any direct or deemed interests in the UE Offeror Securities as at the Latest Practicable Date.

4.4 Dealings in UE Offeror Securities by the Directors

None of the Directors has dealt for value in the UE Offeror Securities during the period commencing six (6) months prior to the Pre-Conditional UE Offers Announcement Date and ending on the Latest Practicable Date.

4.5 Interests of the Directors in WBL Securities

Save as disclosed below, as at the Latest Practicable Date, none of the Directors has any direct or deemed interests in the WBL Securities:

Name

Direct Interest Deemed InterestNumber of Stock Units %

Number of Stock Units %

Mr Norman Ip Ka Cheung 22,655 0.0082 – –

Mr Benjamin C. Duster, IV 8,000 0.0029 – –

Dr Peter Eng Hsi Ko 883,261 0.32 3,818,060 1.38

Mr Mark C. Greaves 4,000 0.0014 – –

Mr Lai Teck Poh 4,000(1) 0.0014 – – 4.6 Dealings in WBL Securities by the Directors

Save as disclosed below, none of the Directors has dealt for value in the WBL Securities during the period commencing six (6) months prior to the Pre-Conditional UE Offers Announcement Date and ending on the Latest Practicable Date.

Name Date of Transaction Price per Stock Unit

Total number of Stock

Units acquired

Dr Peter Eng Hsi Ko 14 December 2012 Conversion of S$149,850 Convertible Bonds at the conversion price of S$2.29 per share. Such shares were, upon issue, immediately converted into Stock Units. No further capital outlay is required for such conversion.

65,436

4.7 WBL Securities owned or controlled by KPMG

None of KPMG, its related corporations or any of the funds whose investments are managed by KPMG on a discretionary basis owns or controls any WBL Securities as at the Latest Practicable Date.

4.8 Dealings in WBL Securities by KPMG

None of KPMG, its related corporations or any of the funds whose investments are managed by KPMG on a discretionary basis has dealt for value in any WBL Securities during the period commencing six (6) months prior to the Pre-Conditional UE Offers Announcement Date and ending on the Latest Practicable Date.

(1) Mr Lai Teck Poh has disposed of 8,000 Stock Units pursuant to his acceptance of the UE Stock Unit Offer, which became unconditional in all respects on 13 May 2013.

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4.9 Intentions of the Directors in respect of their Stock Units

The Directors who hold Stock Units have indicated their intention to accept or reject the UE Stock Unit Offer in respect of their Stock Units as follows:

(a) Mr Norman Ip Ka Cheung holds 22,655 Stock Units (representing approximately 0.0082% of the total number of issued Stock Units) as at the Latest Practicable Date. As at the Latest Practicable Date, Mr Norman Ip Ka Cheung has informed WBL that he intends to accept the UE Stock Unit Offer in respect of all the Stock Units held by him;

(b) Mr Benjamin C. Duster, IV holds 8,000 Stock Units (representing approximately 0.0029% of the total number of issued Stock Units) as at the Latest Practicable Date. As at the Latest Practicable Date, Mr Benjamin C. Duster, IV has informed WBL that he intends to accept the UE Stock Unit Offer in respect of all the Stock Units held by him;

(c) Dr Peter Eng Hsi Ko has a direct and deemed interest in an aggregate of 4,701,321 Stock Units (representing approximately 1.70% of the total number of issued Stock Units) as at the Latest Practicable Date. As Dr Peter Eng Hsi Ko is part of the Concert Party Group, he will not be tendering any of the Stock Units held by him in acceptance of the UE Stock Unit Offer as set out in Section 6 of the UE Offeree Circular;

(d) Mr Lai Teck Poh holds 4,000 Stock Units (representing approximately 0.0014% of the total number of issued Stock Units) as at the Latest Practicable Date. As at the Latest Practicable Date, Mr Lai Teck Poh has informed WBL that he intends to accept the UE Stock Unit Offer in respect of all the Stock Units held by him; and

(e) Mr Mark C. Greaves holds 4,000 Stock Units (representing approximately 0.0014% of the total number of issued Stock Units) as at the Latest Practicable Date. As at the Latest Practicable Date, Mr Mark C. Greaves has informed WBL that he intends to accept the UE Stock Unit Offer in respect of all the Stock Units held by him.

5. OTHER DISCLOSURES

5.1 Directors’ service contracts

As at the Latest Practicable Date:

(a) there are no service contracts between any of the Directors or proposed directors with WBL or any of its subsidiaries which have more than 12 months to run and which are not terminable by the employing company within the next 12 months without paying any compensation; and

(b) there are no such contracts entered into or amended during the period commencing six (6) months prior to the Pre-Conditional UE Offers Announcement Date and ending on the Latest Practicable Date.

5.2 Arrangements affecting Directors

As at the Latest Practicable Date:

(a) it is not proposed that any payment or other benefi t shall be made or given to any Director or director of any other corporation which is by virtue of Section 6 of the Act deemed to be related to WBL, as compensation for loss of offi ce or otherwise in connection with the UE Offers;

59

(b) there are no agreements or arrangements made between any Director and any other person in connection with or conditional upon the outcome of the UE Offers; and

(c) none of the Directors has a material personal interest, whether direct or indirect, in any material contract entered into by the UE Offeror.

6. MATERIAL CONTRACTS WITH INTERESTED PERSONS

As at the Latest Practicable Date, neither WBL nor any of its subsidiaries has entered into material contracts with persons who are Interested Persons (other than those entered into in the ordinary course of business) during the period beginning three (3) years before the Pre-Conditional UE Offers Announcement Date.

7. MATERIAL LITIGATION

As at the Latest Practicable Date, the Directors are not aware of any material litigation, claims or proceedings pending or threatened against, or made by, WBL or any of its subsidiaries or any facts likely to give rise to any such material litigation, claims or proceedings, which might materially and adversely affect the fi nancial position of WBL and any of its subsidiaries, taken as a whole.

8. FINANCIAL INFORMATION

8.1 Consolidated Income Statements

The audited consolidated income statements of the WBL Group for the last three (3) fi nancial years (ended 30 September 2012, 2011 and 2010) and the unaudited consolidated income statements of the WBL Group for 1QFY2013 and the second quarter of FY2013 ended 31 March 2013 (“2QFY2013”) are summarised below. The summary set out below should be read together with the annual reports, the audited consolidated fi nancial statements of the WBL Group for the relevant fi nancial periods, the unaudited consolidated fi nancial statements of the WBL Group for 1QFY2013 and 2QFY2013 and their respective accompanying notes. Copies of all of the above are available for inspection at the registered address of WBL at 801 Lorong 7 Toa Payoh, #07-00 Wearnes Building, Singapore 319319 during normal business hours for the period during which the UE Offers remain open for acceptance.

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Unaudited Audited Restated2QFY2013

S$’0001QFY2013

S$’000FY2012S$’000

FY2011S$’000

FY2010S$’000

Revenue 600,360 683,279 2,463,969 2,177,676 2,125,270

Cost of sales (572,646) (613,070) (2,168,840) (1,894,754) (1,824,029)

Gross profi t 27,714 70,209 295,129 282,922 301,241

Other income 2,461 3,675 19,592 21,765 23,660

Other(losses)/ gains – net (512) 2,835 12,457 28,706 79,822

Distribution costs (26,109) (27,055) (104,468) (92,964) (90,381)

General and administrative expenses

(23,643) (29,801) (95,009) (88,116) (111,691)

Other operating expenses (2,519) (3,201) (15,240) (27,180) (46,955)

Finance expenses (1,854) (1,724) (3,836) (4,440) (6,787)

Share of profi t of associated companies

203 38 762 1,812 (1,606)

(Loss)/Profi t before income tax

(24,259) 14,976 109,387 122,505 147,303

Income tax expense (426) (4,174) (16,840) (17,380) (36,234)

Net (loss)/profi t (24,685) 10,802 92,547 105,125 111,069

Attributable to: Equity holders of WBL (11,438) 6,080 75,256 86,556 96,488

Non-controlling interests (13,247) 4,722 17,291 18,569 14,581

(24,685) 10,802 92,547 105,125 111,069

Cents Cents Cents Cents Cents

Earnings per share – Basic (4.2) 2.2 28.2 33.3 39.2

– Diluted (4.2) 2.2 27.0 31.2 34.9

Net dividend per share 5.0 – 10.0 10.0 10.0

8.2 Consolidated Balance Sheet

The audited consolidated balance sheet of the WBL Group as at 30 September 2012 and the unaudited consolidated balance sheet of the WBL Group as at 31 December 2012 and 31 March 2013 are summarised below. The summary set out below should be read together with the annual report for FY2012, the audited consolidated fi nancial statements of the WBL Group for FY2012, the unaudited consolidated fi nancial statements of the WBL Group for 1QFY2013 and 2QFY2013 and their respective accompanying notes. Copies of all of the above are available for inspection at the registered address of WBL at 801 Lorong 7 Toa Payoh, #07-00 Wearnes Building, Singapore 319319 during normal business hours for the period during which the UE Offers remain open for acceptance.

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As at 31 March 2013

S$’000

As at 31 December 2012

S$’000

As at 30 September 2012

S$’000

EQUITY Capital and reserves attributable to WBL’s equity holdersShare capital 490,555 477,849 476,526Reserves 473,157 489,586 467,520

963,712 967,435 944,046Non-controlling interests 319,436 325,487 320,897Total equity 1,283,148 1,292,922 1,264,943

ASSETSCurrent assetsBank balances and deposits 486,982 436,493 418,914Trade and other receivables 303,070 439,033 380,118Tax recoverable 1,402 1,693 1,333Other current assets 45,263 49,485 45,442Inventories 253,720 319,093 309,265Development properties 508,075 485,740 459,965Derivative fi nancial instruments 22 64 155

1,598,534 1,731,601 1,615,192

Non-current assets/disposal group classifi ed as held for sale 4,605 4,441 4,447

1,603,139 1,736,042 1,619,639

Non-current assetsAvailable-for-sale fi nancial assets 71,017 75,142 56,253Investments in associated companies 29,992 28,409 28,612Other receivables 11,368 10,978 12,639Property, plant and equipment 600,682 602,857 609,966Investment properties 11,579 11,594 11,709Intangible assets 58,591 58,447 58,556Deferred tax assets 52,810 51,414 53,323

836,039 838,841 831,058Total assets 2,439,178 2,574,883 2,450,697

LIABILITIESCurrent liabilities Trade and other payables 491,968 619,824 573,043Current income tax liabilities 25,444 29,156 30,147Borrowings 255,484 361,771 224,884Derivative fi nancial instruments 531 102 200

773,427 1,010,853 828,274

Non-current liabilities Borrowings 357,976 246,246 333,379Other long-term liabilities 1,851 1,851 2,003Deferred tax liabilities 22,776 23,011 22,098

382,603 271,108 357,480Total liabilities 1,156,030 1,281,961 1,185,754Net assets 1,283,148 1,292,922 1,264,943

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8.3 Signifi cant accounting policies

A summary of the signifi cant accounting policies of the WBL Group is set out in the notes to the audited consolidated fi nancial statements of the WBL Group for FY2012 and the unaudited consolidated fi nancial statements of the WBL Group for 1QFY2013 and 2QFY2013, a copy of each is available for inspection at the registered address of WBL at 801 Lorong 7 Toa Payoh, #07-00 Wearnes Building, Singapore 319319 during normal offi ce hours for the period during which the UE Offers remain open for acceptance.

As set out in the notes to the audited consolidated fi nancial statements of the WBL Group for FY2012, on 1 October 2011, the WBL Group adopted the following new or amended FRS and INT FRS that are mandatory for application from that date:

(a) Amendments to FRS 24 – Related party disclosures;

(b) Amendments to FRS 107 Disclosures – Transfers of fi nancial assets; and

(c) Interpretations to FRS 115 - Agreements for the construction of real estate (“INT FRS 115”).

Changes to the WBL Group’s accounting policies have been made as required, in accordance with the transitional provisions in the respective FRS and INT FRS. Save for the adoption of INT FRS 115, the adoption of the amended FRS and INT FRS did not result in substantial changes to the WBL Group’s and WBL’s accounting policies and had no material effect on the amounts reported for FY2012 or prior fi nancial years. Please refer to the notes to the audited consolidated fi nancial statements of the WBL Group for FY2012 for a full description of the effects of the adoption of INT FRS 115. In addition, the consolidated income statements for FY2011 and FY2010 in Paragraph 8.1 above were restated due to the retrospective application of INT FRS 115.

As set out in the unaudited consolidated fi nancial statements of the WBL Group for 1QFY2013, the accounting policies adopted are consistent with those of the previous FY except for changes made to comply with the following new or revised FRS and INT FRS that became effective in FY2013:

(i) Amendments to FRS 1- Presentation of Items of Other Comprehensive Income; and

(ii) Amendments to FRS 12- Deferred Tax: Recovery of Underlying Assets.

The effect of the adoption of the new or revised FRS and INT FRS does not have a material impact on the WBL Group’s fi nancial statements.

Save as disclosed above and in the notes to the audited consolidated fi nancial statements of the WBL Group for FY2012 and the unaudited consolidated fi nancial statements of the WBL Group for 1QFY2013 and 2QFY2013:

(A) there were no signifi cant accounting policies or any matter from the notes of the fi nancial statements of WBL which are of any major relevance for the interpretation of the fi nancial statements of WBL; and

(B) as at the Latest Practicable Date, there is no change in the accounting policy of WBL which will cause the fi gures disclosed in this Supplemental Letter not to be comparable to a material extent.

8.4 Material changes in fi nancial position

Save as disclosed in publicly available information on the WBL Group (including but not limited to the unaudited consolidated fi nancial statements of the WBL Group for 1QFY2013 and 2QFY2013) as at the Latest Practicable Date, there has been no known material change in the fi nancial position of WBL since 30 September 2012, being the date of WBL’s last published audited fi nancial statements.

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8.5 Material change in information

Save as disclosed in this Supplemental Letter and save for the information relating to WBL and the UE Offers that is publicly available, there has been no material change in any information previously published by or on behalf of WBL during the period commencing from the Pre-Conditional UE Offers Announcement Date and ending on the Latest Practicable Date.

9. VALUATION OF SUBJECT PROPERTIES

WBL has commissioned independent valuations of the Subject Properties, extracts of which have been set out in Appendix VIII of the UE Offeree Circular and Appendix IV of the STC Offeree Circular. In addition, Shanghai Lixin Appraisal Ltd has issued a letter in respect of its valuation report of the Subject Properties in China, a copy of which is annexed hereto as Appendix VI (this letter and the valuation reports set out in Appendix VIII of the UE Offeree Circular and Appendix IV of the STC Offeree Circular collectively, the “Valuation Reports”). Under Rule 26.3 of the Code, WBL is required, inter alia, to make an assessment of any potential tax liability which would arise if the assets, which are the subject of a valuation given in connection with an offer, were to be sold at the amount of the valuation. Details of the potential tax liabilities that may be incurred by the WBL Group on the hypothetical disposal of the Subject Properties is set out in Paragraph 10 of Appendix II of the UE Offeree Circular.

10. GENERAL

10.1 All expenses and costs incurred by WBL in relation to the UE Offers will be borne by WBL.

10.2 KPMG has given and has not withdrawn its written consent to the issue of this Supplemental Letter with the inclusion of its name in this Supplemental Letter, its advice to the Independent Directors set out in Section 7.2 of this Supplemental Letter, the IFA Letter set out in Appendix I of this Supplemental Letter, its letter dated 22 May 2013 in relation to the unaudited consolidated fi nancial statements of the WBL Group for the six (6) months ended 31 March 2013 annexed hereto as Appendix IV, and all references thereto, in the form and context in which they appear in this Supplemental Letter.

10.3 The auditors of WBL, PWC, has given and has not withdrawn its written consent to the issue of this Supplemental Letter with the inclusion of its name in this Supplemental Letter, its letter dated 8 May 2013 in relation to the unaudited consolidated fi nancial statements of the WBL Group for the six (6) months ended 31 March 2013 annexed hereto as Appendix V and all references thereto, in the form and context in which they appear in this Supplemental Letter.

10.4 Shanghai Lixin Appraisal Ltd has given and has not withdrawn its written consent to the issue of this Supplemental Letter with the inclusion of its name in this Supplemental Letter, its letter dated 16 May 2013 in relation to its valuation report of the Subject Properties in China annexed hereto as Appendix VI and all references thereto, in the form and context in which they appear in this Supplemental Letter.

11. DOCUMENTS FOR INSPECTION

Copies of the following documents are available for inspection at the registered address of WBL at 801 Lorong 7 Toa Payoh, #07-00 Wearnes Building, Singapore 319319 during normal business hours for the period during which the UE Offers remain open for acceptance:

(a) the memorandum and articles of association of WBL;

(b) the annual reports of WBL for FY2010, FY2011 and FY2012;

(c) the unaudited consolidated fi nancial statements of the WBL Group for 1QFY2013 and 2QFY2013;

(d) the IFA Letter as set out in Appendix I of this Supplemental Letter;

64

(e) the Valuation Reports on the Subject Properties referred to in Paragraph 9 of this Appendix II above;

(f) the letter dated 22 May 2013 from KPMG in relation to the unaudited consolidated fi nancial statements of the WBL Group for the six (6) months ended 31 March 2013 as set out in Appendix IV;

(g) the letter dated 8 May 2013 from PWC in relation to the unaudited consolidated fi nancial statements of the WBL Group for the six (6) months ended 31 March 2013 as set out in Appendix V; and

(h) the letters of consent from KPMG, PWC and Shanghai Lixin Appraisal Ltd referred to in Paragraphs 10.2, 10.3 and 10.4 of this Appendix II above.

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APPENDIX III

UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE WBL GROUP FOR 2QFY2013

1

Second Quarter Financial Statement and Dividend Announcement for the period ended 31 March 2013

PART I - INFORMATION REQUIRED FOR ANNOUNCEMENTS OF QUARTERLY (Q1, Q2 & Q3), HALF-YEAR AND FULL YEAR RESULTS

1(a)(i) An income statement and statement of comprehensive income, or a statement of comprehensive income (for the group) together with a comparative statement for the corresponding period of the immediately preceding financial year.

GROUP GROUP 3 months 3 months 6 months 6 months

ended ended ended ended 31.03.2013 31.03.2012 +/(-) 31.03.2013 31.03.2012 +/(-)

$’ 000 $’ 000 % $’ 000 $’ 000 %

Revenue 600,360 598,491 0.3 1,283,639 1,264,690 1.5 Cost of sales (572,646) (525,418) 9.0 (1,185,716) (1,098,460) 7.9 Gross profit 27,714 73,073 (62.1) 97,923 166,230 (41.1)

Other income 2,461 5,101 (51.8) 6,136 7,472 (17.9) Other (losses)/gain - net (512) 1,513 n.m. 2,323 1,769 31.3 Distribution costs (26,109) (26,108) 0.0 (53,164) (51,367) 3.5 General and administrative expenses (23,643) (21,444) 10.3 (53,444) (44,981) 18.8 Other operating expenses (2,519) (1,395) 80.6 (5,720) (5,870) (2.6) Finance expenses (1,854) (802) 131.2 (3,578) (1,300) 175.2 Share of profit of associated companies 203 808 (74.9) 241 157 53.5 (Loss)/profit before income tax (24,259) 30,746 n.m. (9,283) 72,110 n.m.

Income tax expense (426) (3,015) (85.9) (4,600) (13,043) (64.7) Net (loss)/profit (24,685) 27,731 n.m. (13,883) 59,067 n.m.

Attributable to: Equity holders of the Company (11,438) 20,055 n.m. (5,358) 43,732 n.m. Non-controlling interests (13,247) 7,676 n.m. (8,525) 15,335 n.m.

(24,685) 27,731 n.m. (13,883) 59,067 n.m.

n.m. : not meaningful

WBL Corporation Limitedco reg no. 191200028Z

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2

1(a)(ii) Consolidated Statement of Comprehensive Income


ended ended ended ended 31.03.2013 31.03.2012 +/(-) 31.03.2013 31.03.2012 +/(-)

$’ 000 $’ 000 % $’ 000 $’ 000 %

Net (loss)/profit for the period (24,685) 27,731 n.m. (13,883) 59,067 n.m.

Other comprehensive income/(expense): Items that may be reclassified subsequently to profit or loss:

Available-for-sale financial assets - Fair value (losses)/gain (3,015) 15,116 n.m. 15,582 17,577 (11.4) Currency translation differences arising from consolidation - Gains/(losses) 16,851 (31,206) n.m. 19,344 (20,143) n.m. - Reclassification 438 (179) n.m. (2,404) 81 n.m. Other comprehensive income/ (expense), net of tax 14,274 (16,269) n.m. 32,522 (2,485) n.m. Total comprehensive (expense)/ income (10,411) 11,462 n.m. 18,639 56,582 (67.1)

Attributable to: Equity holders of the Company (2,370) 13,346 n.m. 21,323 47,712 (55.3) Non-controlling interests (8,041) (1,884) 326.8 (2,684) 8,870 n.m.

(10,411) 11,462 n.m. 18,639 56,582 (67.1)

n.m. : not meaningful

67

3

1(a)(iii) Notes to consolidated income statement


ended ended ended ended 31.03.2013 31.03.2012 31.03.2013 31.03.2012

$’ 000 $’ 000 $’ 000 $’ 000

Net (loss)/profit is after (charging)/crediting:-

Investment income 167 235 188 338

Interest income 1,089 1,134 2,003 2,475

Interest on borrowings (1,854) (802) (3,578) (1,300)

Depreciation and amortisation (25,875) (24,908) (50,922) (48,501)

Write-back of receivables 175 339 69 290

Write-down of inventories (13,911) (3,784) (15,482) (3,867)

Foreign exchange gain/(loss) 137 (249) 37 273

(Impairment loss)/reversal of impairment loss on property,

plant and equipment (41) - (41) 159

Adjustments for (under)/over provision of tax in respect

of prior years (325) 544 749 941

Gain on disposal of available-for-sale financial assets and

property, plant and equipment 206 1,808 292 2,560

(Loss)/gain on disposal of subsidiaries, a joint venture

and an associated company (385) (418) 2,457 (1,134)

Share-based compensation expenses (2,756) (2,407) (5,828) (5,014)

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4

1(b)(i) A statement of financial position (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year.

GROUP COMPANY As at As at As at As at

31.03.2013 30.09.2012 31.03.2013 30.09.2012 $’ 000 $’ 000 $’ 000 $’ 000

EQUITY Capital and reserves attributable to the Company’s equity holders Share capital (Note 1) 490,555 476,526 490,555 476,526 Reserves 473,157 467,520 169,100 167,007

963,712 944,046 659,655 643,533 Non-controlling interests 319,436 320,897 - - TOTAL EQUITY 1,283,148 1,264,943 659,655 643,533

ASSETS Current assets Bank balances and deposits 486,982 418,914 100,378 101,326 Trade and other receivables 303,070 380,118 513 516 Tax recoverable 1,402 1,333 - - Other current assets 45,263 45,442 100 398 Inventories 253,720 309,265 - - Development properties 508,075 459,965 - - Derivative financial instruments 22 155 - -

1,598,534 1,615,192 100,991 102,240 Non-current assets/disposal group classified as held for sale (Note 2) 4,605 4,447 - -

1,603,139 1,619,639 100,991 102,240

Non-current assets Available-for-sale financial assets 71,017 56,253 69,438 54,674 Investments in associated companies 29,992 28,612 20,944 20,944 Investments in subsidiaries - - 637,438 448,197 Other receivables 11,368 12,639 317,173 611,873 Property, plant and equipment 600,682 609,966 335 390 Investment properties 11,579 11,709 - - Intangible assets 58,591 58,556 - - Deferred tax assets 52,810 53,323 - -

836,039 831,058 1,045,328 1,136,078 Total assets 2,439,178 2,450,697 1,146,319 1,238,318

LIABILITIES Current liabilities Trade and other payables 491,968 573,043 5,388 10,364 Current income tax liabilities 25,444 30,147 - -Borrowings 255,484 224,884 173,965 173,912 Derivative financial instruments 531 200 2 3

773,427 828,274 179,355 184,279

Non-current liabilities Borrowings 357,976 333,379 85,588 198,278 Other long-term liabilities 1,851 2,003 221,721 212,228 Deferred tax liabilities 22,776 22,098 - -

382,603 357,480 307,309 410,506 Total liabilities 1,156,030 1,185,754 486,664 594,785 NET ASSETS 1,283,148 1,264,943 659,655 643,533

69

5

Note 1

The Company’s issued share capital consists of 277,239,370 ordinary stock units as at 31 March 2013 and 270,901,986 ordinary stock units as at 30 September 2012.

Note 2 Under Financial Reporting Standard 105 (FRS 105), the carrying value of assets has to be classified as “non-current assets/disposal

group classified as held for sale” when its carrying value will be principally recovered through a sale transaction rather than through continuing use.

The non-current assets/disposal group classified as held for sale as at 31 March 2013 are triggered by the following event, apart from event triggered in 2012 below.

(i) On 4 February 2013, the Group has entered into a Conditional Agreement for Sale and Purchase with Chen Li Juan, to dispose its property at Orchard Manor, Renhe Town, New Northern District, Chongqing City, Sichuan Province, China. 20% of the sale proceeds amounting to RMB3 million was received by the Group as at 31 March 2013.

The non-current assets/disposal group classified as held for sale as at 30 September 2012 relates to the following event:

(i) In September 2012, the Group has committed to a plan to sell its properties at Lot Nos. 9694, 19533 and 19534, Pontian, State of Johor Darul Takzim, Malaysia by an appointed agent.

1(b)(ii) Aggregate amount of group’s borrowings and debt securities.

Amount repayable in one year or less, or on demand

As at 31.03.2013 As at 30.09.2012 Secured Unsecured Secured Unsecured $26,262,000 $229,222,000 $21,061,000 $203,823,000

Amount repayable after one year

As at 31.03.2013 As at 30.09.2012 Secured Unsecured Secured Unsecured $160,007,000 $197,969,000 $123,577,000 $209,802,000

Details of any collateral

The borrowings are secured by fixed and floating charges over certain assets of some of the subsidiaries.

70

6

1(c) A statement of cash flows (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year.

3 months 3 months 6 months 6 months ended ended ended ended

31.03.2013 31.03.2012 31.03.2013 31.03.2012 $’ 000 $’ 000 $’ 000 $’ 000

CASH FLOWS FROM OPERATING ACTIVITIES (Loss)/profit before income tax and share of results of associated companies (24,462) 29,938 (9,524) 71,953

Adjustments for: Amortisation of intangible assets 51 56 201 120 Depreciation of property, plant and equipment 25,665 24,674 50,409 48,014 Depreciation of investment properties 159 178 312 367 Loss/(gain) on disposal of subsidiaries, a joint venture and an associated company 385 418 (2,457) 1,134 Interest income (1,089) (1,134) (2,003) (2,475) Interest expense 1,854 802 3,578 1,300 Dividend income from available-for-sale financial assets (167) (235) (188) (338) Gain on disposal of property, plant and equipment (206) (1,808) (292) (2,600) Impairment loss/(reversal of impairment loss) on property, plant and equipment 41 - 41 (159) Property, plant and equipment written off 16 38 38 204 Loss on disposal of available-for-sale financial assets - - - 40 Share-based compensation expenses 2,756 2,407 5,828 5,014 Unrealised translation (gain)/loss (3,406) 4,820 (5,965) 3,993 Operating profit before working capital changes 1,597 60,154 39,978 126,567

Changes in operating assets and liabilities: Inventories 67,122 (24,159) 58,477 (35,844) Trade and other receivables 139,817 57,685 84,343 7,600 Other current assets 4,041 9,487 (873) 8,662 Development properties (17,316) 3,877 (37,179) 26,886 Trade and other payables (112,828) (71,166) (54,987) (100,978) Net amount due from associated companies - 5 2 472 Cash generated from operations 82,433 35,883 89,761 33,365

Share-based payments (147) (3) (1,230) (3) Income taxes paid (4,596) (3,956) (7,709) (3,370) Net cash from operating activities 77,690 31,924 80,822 29,992

CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of available-for-sale financial assets - - - 162 Proceeds from sale of property, plant and equipment 663 10,107 942 12,613 Dividend received from available-for-sale financial assets 167 235 188 338 Interest received 887 1,340 1,993 2,787 Net cash used in business acquisition - - - (2,235) Net cash arising from disposal of subsidiaries, a joint venture and an associated company - (1,595) - (5,221) Purchase of property, plant and equipment (21,698) (17,444) (52,272) (74,862) Additions of intangible assets (3) (406) (80) (808) Receipt of proceeds from disposal of a subsidiary in prior year - 1,871 - 1,871 Settlement of amount outstanding for purchase of additional interest in a subsidiary in prior year - - - (2,039) Net cash used in investing activities (19,984) (5,892) (49,229) (67,394)

71

7

3 months 3 months 6 months 6 months ended ended ended ended

31.03.2013 31.03.2012 31.03.2013 31.03.2012 $’ 000 $’ 000 $’ 000 $’ 000

CASH FLOWS FROM FINANCING ACTIVITIES Loan (to)/from associated companies (429) 389 (501) (1,386) Long-term loans obtained 14,543 30,410 39,163 47,720 Long-term loans repaid (1,584) (1,436) (2,086) (2,513) Finance lease liabilities repaid (1,042) (509) (1,920) (1,085) Capital contributed by non-controlling interests 737 115 737 187 Payment of dividends (13,581) (13,315) (13,581) (13,315) Payment of dividends to non-controlling interests - - (332) - Short-term loans obtained 150,500 14,343 191,907 19,608 Short-term loans repaid (142,600) (9,614) (184,388) (26,300) Interest paid (8,603) (5,851) (12,441) (7,937) Purchase of additional interest in a subsidiary (340) (1,423) (2,745) (12,628) Net cash (used in)/from financing activities (2,399) 13,109 13,813 2,351

Net change in cash and cash equivalents 55,307 39,141 45,406 (35,051) Cash and cash equivalents at the beginning of period 409,235 334,067 418,914 408,045 Effect of currency translation on cash and cash equivalents 4,166 (7,635) 4,388 (7,421) Cash and cash equivalents at end of period 468,708 365,573 468,708 365,573

Cash and cash equivalents at end of period consists of: Bank balances and deposits 486,982 377,520 486,982 377,520 Bank overdrafts (unsecured) (18,274) (11,947) (18,274) (11,947) Cash and cash equivalents at end of period 468,708 365,573 468,708 365,573

Summary of net assets effect resulting from the business acquisition:

Inventories - - - 209 Property, plant and equipment - - - 800 Net assets - - - 1,009 Intangible assets - - - 1,226 Purchase consideration - - - 2,235 Bank balances and deposits - - - - Net cash outflow on business acquisition - - - 2,235

Summary of net assets effect resulting from the disposal of subsidiaries, a joint venture and an associated company:

Bank balances and deposits 715 1,682 715 5,288 Trade and other receivables - 334 - 2,837 Other current assets - 10 - 29 Inventories - 1 - 5 Property, plant and equipment - 34 - 66 Trade and other payables - (1,419) - (6,991) Current income tax liabilities - - - (102) Currency translation 401 (105) (2,441) 158 Non-controlling interests (16) (32) (16) (89)

1,100 505 (1,742) 1,201 (Loss)/gain on disposal (385) (418) 2,457 (1,134) Proceeds from disposal 715 87 715 67 Bank balances and deposits (715) (1,682) (715) (5,288) Net cash outflow on disposal, net of cash disposed - (1,595) - (5,221)

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8

1(d)(i) A statement (for the issuer and group) showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalisation issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year.

Attributable to equity holders of the Company Foreign Asset Share Fair currency Non- Share Capital revaluation option value translation Retained controlling Total capital reserve reserve reserve reserve reserve earnings Other Total interests equity $’ 000 $’ 000 $’ 000 $’ 000 $’ 000 $’ 000 $’ 000 $’ 000 $’ 000 $’ 000 $’ 000

GROUP

Consolidated Statement of Changes in Equity for the 3 months ended

Balance at 1 January 2013 477,849 1,717 32,674 6,887 50,822 (80,411) 478,583 (686) 967,435 325,487 1,292,922 Income tax benefits arising from share-based compensation - - - - - - - 19 19 12 31 Employee share option scheme/ Share appreciation rights: - value of employee services - - - 684 - - - 584 1,268 960 2,228 Issue of shares pursuant to convertible bonds # 12,706 (1,002) - - - - - - 11,704 - 11,704 Disposal of a subsidiary - - - (28) - - - - (28) (16) (44) Capital contribution by non- controlling interests - - - - - - - - - 737 737 Dilution of interest in a subsidiary - - - - - - - (847) (847) 749 (98) Additional interest in a subsidiary - - - - - - - 112 112 (452) (340) Final dividend for FY2012 - - - - - - (13,581) - (13,581) - (13,581) Total comprehensive (expense)/ income for the period - - - - (3,015) 12,083 (11,438) - (2,370) (8,041) (10,411) Balance at 31 March 2013 490,555 715 32,674 7,543 47,807 (68,328) 453,564 (818) 963,712 319,436 1,283,148

Balance at 1 January 2012 462,651 2,907 32,674 5,319 18,823 (36,083) 447,671 (640) 933,322 326,414 1,259,736 Income tax benefits arising from share-based compensation - - - - - - - 821 821 615 1,436 Employee share option scheme/ Share appreciation rights: - value of employee services - - - 562 - - - 710 1,272 947 2,219 - issue of shares to Directors 114 - - - - - - - 114 - 114 Issue of shares pursuant to convertible bonds # 4,769 (376) - - - - - - 4,393 - 4,393 Disposal of a subsidiary - - - - - - - - - (32) (32) Capital contribution by non- controlling interests - - - - - - - - - 115 115 Dilution of interest in a subsidiary - - - - - - - (1,481) (1,481) 1,418 (63) Additional interest in a subsidiary - - - - - - - 770 770 (2,193) (1,423) Final dividend for FY2011 - - - - - - (13,315) - (13,315) - (13,315) Total comprehensive income/ (expense) for the period - - - - 15,116 (21,825) 20,055 - 13,346 (1,884) 11,462 Balance at 31 March 2012 467,534 2,531 32,674 5,881 33,939 (57,908) 454,411 180 939,242 325,400 1,264,642

# In 2Q FY2013, the Company issued 5,739,619 (2Q FY2012: 2,153,864) ordinary shares pursuant to conversion of convertible bonds.

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9

Attributable to equity holders of the Company Share Fair Share Capital option value Retained capital reserve reserve reserve earnings Total $’ 000 $’ 000 $’ 000 $’ 000 $’ 000 $’ 000

COMPANY

Statement of Changes in Equity for the 3 months ended

Balance at 1 January 2013 477,849 1,717 (3,404) 39,400 141,803 657,365

Issue of shares pursuant to convertible bonds # 12,706 (1,002) - - - 11,704 Final dividend for FY 2012 - - - - (13,581) (13,581) Total comprehensive (expense)/income for the period - - - (4,125) 8,292 4,167

Balance at 31 March 2013 490,555 715 (3,404) 35,275 136,514 659,655

Balance at 1 January 2012 462,651 2,907 (3,404) 7,063 176,838 646,055

Employee share option scheme/ share appreciation rights: - issue of shares to Directors 114 - - - - 114 Issue of shares pursuant to convertible bonds # 4,769 (376) - - - 4,393 Final dividend for FY 2011 - - - - (13,315) (13,315) Total comprehensive income/(expense) for the period - - - 14,113 (1,429) 12,684

Balance at 31 March 2012 467,534 2,531 (3,404) 21,176 162,094 649,931

# In 2Q FY2013, the Company issued 5,739,619 (2Q FY2012: 2,153,864) ordinary shares pursuant to conversion of convertible bonds.

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10

Attributable to equity holders of the Company Foreign

Asset Share Fair currency Non-

Share Capital revaluation option value translation Retained controlling Total

capital reserve reserve reserve reserve reserve earnings Other Total interests equity

$’ 000 $’ 000 $’ 000 $’ 000 $’ 000 $’ 000 $’ 000 $’ 000 $’ 000 $’ 000 $’ 000

GROUP

Consolidated Statement of Changes in Equity for the 6 months ended

Balance at 1 October 2012 476,526 1,821 32,674 7,859 32,225 (79,427) 472,503 (135) 944,046 320,897 1,264,943

Income tax benefits arising from

share-based compensation - - - - - - - (668) (668) (499) (1,167)

Employee share option scheme/

Share appreciation rights:

- value of employee services - - - 53 - - - 2,511 2,564 1,954 4,518

Transfer to cash-settled liability

of a subsidiary - - - (341) - - - - (341) (100) (441)

Issue of shares pursuant to

convertible bonds # 14,029 (1,106) - - - - - - 12,923 - 12,923

Disposal of a subsidiary - - - (28) - - - - (28) (16) (44)

Capital contribution by non-

controlling interest - - - - - - - - - 737 737

Dividend to non-controlling

interests of a subsidiary - - - - - - - - - (334) (334)

Dilution of interest in a subsidiary - - - - - - - (4,144) (4,144) 3,844 (300)

Additional interest in a subsidiary - - - - - - - 1,618 1,618 (4,363) (2,745)

Final dividend for FY2012 - - - - - - (13,581) - (13,581) - (13,581)

Total comprehensive income/

(expense) for the period - - - - 15,582 11,099 (5,358) - 21,323 (2,684) 18,639

Balance at 31 March 2013 490,555 715 32,674 7,543 47,807 (68,328) 453,564 (818) 963,712 319,436 1,283,148

Balance at 1 October 2011 457,861 3,284 32,674 6,000 16,362 (44,311) 423,994 617 896,481 323,870 1,220,351

Income tax benefits arising from

share-based compensation - - - - - - - 159 159 123 282

Employee share option scheme/

Share appreciation rights:

- value of employee services - - - (119) - - - 2,695 2,576 1,964 4,540

- issue of shares to Directors 114 - - - - - - - 114 - 114

Issue of shares pursuant to

convertible bonds # 9,559 (753) - - - - - - 8,806 - 8,806

Disposal of subsidiaries - - - - - - - - - (89) (89)

Capital contribution by non-

controlling interests - - - - - - - - - 187 187

Dilution of interest in a subsidiary - - - - - - - (9,813) (9,813) 9,625 (188)

Additional interest in a subsidiary - - - - - - - 6,522 6,522 (19,150) (12,628)

Final dividend for FY2011 - - - - - - (13,315) - (13,315) - (13,315)

Total comprehensive income/

(expense) for the period - - - - 17,577 (13,597) 43,732 - 47,712 8,870 56,582

Balance at 31 March 2012 467,534 2,531 32,674 5,881 33,939 (57,908) 454,411 180 939,242 325,400 1,264,642

# For 6 months ended 31 March 2013, the Company issued 6,337,384 (31 March 2012: 4,317,671) ordinary shares pursuant to conversion of convertible bonds.

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11

Attributable to equity holders of the Company Share Fair Share Capital option value Retained capital reserve reserve reserve earnings Total $’ 000 $’ 000 $’ 000 $’ 000 $’ 000 $’ 000

COMPANY

Statement of Changes in Equity for the 6 months ended

Balance at 1 October 2012 476,526 1,821 (3,404) 20,510 148,080 643,533

Employee share option scheme/ share appreciation rights: - issue of shares to Directors Issue of shares pursuant to convertible bonds # 14,029 (1,106) - - - 12,923 Final dividend for FY 2012 - - - - (13,581) (13,581) Total comprehensive income for the period - - - 14,765 2,015 16,780

Balance at 31 March 2013 490,555 715 (3,404) 35,275 136,514 659,655

Balance at 1 October 2011 457,861 3,284 (3,404) 4,458 177,972 640,171

Employee share option scheme/ share appreciation rights: - issue of shares to Directors 114 - - - - 114 Issue of shares pursuant to convertible bonds # 9,559 (753) - - - 8,806 Final dividend for FY 2011 - - - - (13,315) (13,315) Total comprehensive income/(expense) for the period - - - 16,718 (2,563) 14,155

Balance at 31 March 2012 467,534 2,531 (3,404) 21,176 162,094 649,931

# For 6 months ended 31 March 2013, the Company issued 6,337,384 (31 March 2012: 4,317,671) ordinary shares pursuant to conversion of convertible bonds.

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1(d)(ii) Details of any changes in the company’s share capital arising from rights issue, bonus issue, share buy-backs, exercise of share options or warrants, conversion of other issues of equity securities, issue of shares for cash or as consideration for acquisition or for any other purpose since the end of the previous period reported on. State also the number of shares that may be issued on conversion of all the outstanding convertibles, as well as the number of shares held as treasury shares, if, any, against the total number of issued shares excluding treasury shares of the issuer, as at the end of the current financial period reported on and as at the end of the corresponding period of the immediately preceding financial year.

1(d)(iii) To show the total number of issued shares excluding treasury shares as at the end of the current financial period and as at the end of the immediately preceding year.

For the period 1 January 2013 till 31 March 2013, 5,739,619 shares were issued pursuant to the conversion of 13,143,768 Convertible Bonds due 2014.

Other details required under Paragraphs (1)(d)(ii) and (iii) are as follows:

As at 31 Mar 2013 As at 31 Mar 2012

Number of unissued shares on conversion of outstanding Convertible Bonds due 2014

4,102,624 14,502,056

Total number of issued shares excluding Treasury Shares

277,239,370 266,839,975

As at 31 Mar 2013 As at 30 Sep 2012

Total number of issued shares excluding Treasury Shares

277,239,370 270,901,986

1(d)(iv) A statement showing all sales, transfers, disposal, cancellation and/or use of treasury shares as at the end of the current financial period reported on.

Not applicable. There were no treasury shares during and as at the end of the current financial period reported on.

2. Whether the figures have been audited or reviewed and in accordance with which auditing standard

or practice.

The consolidated financial information of the Group for the 6 months ended 31 March 2013 as set out in Sections 1(a), 1(b)(i) and 1(c) to 1(d)(i) of this announcement have been extracted from the condensed interim financial statements that has been prepared in accordance with Singapore Financial Reporting Standard 34 Interim Financial Reporting, which has been reviewed by the independent auditor in accordance with Singapore Standard on Review Engagements 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity (“SSRE 2410”). The results for the 2nd

quarter ended 31 Mar 2013, the 2nd quarter ended 31 March 2012 and the 6 months ended 31 March 2012 have not been audited or reviewed.

3. Where the figures have been audited or reviewed, the auditors’ report (including any qualifications or emphasis of a matter).

Please refer to the independent auditor’s review report dated 8 May 2013 appended to this announcement.

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4. Whether the same accounting policies and methods of computation as in the issuer’s most recently audited annual financial statements have been applied.

The accounting policies and methods of computation applied by the Group are consistent with those used in its most recently audited financial statements, except for changes made to comply with the new or revised Singapore Financial Reporting Standards (FRS) and Interpretations that became effective in this financial year. They are:

Amendments to FRS 1 Presentation of Items of Other Comprehensive Income Amendments to FRS 12 Deferred Tax: Recovery of Underlying Assets

5. If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard, what has changed, as well as the reasons for, and the effect of, the change.

The effect on the adoption of the new or revised FRS and Interpretations does not have a material impact on the Group’s financial statements.

6. Earnings per ordinary share of the group for the current financial period reported on and the corresponding period of the immediately preceding financial year, after deducting any provision for preference dividends.

3 months ended 3 months ended 6 months ended 6 months ended 31.03.2013 31.03.2012 31.03.2013 31.03.2012

(a) Based on the weighted average number of ordinary shares on issue (4.2) cts 7.5 cts (2.0) cts 16.5 cts

(b) On a fully diluted basis (4.2) cts 7.2 cts (1.9) cts 15.7 cts

7. Net asset value (for the issuer and group) per ordinary share based on the total number of issued shares excluding treasury shares of the issuer at the end of the:-

(a) current financial period reported on; and (b) immediately preceding financial year.

GROUP COMPANY As at As at As at As at

31.03.2013 30.09.2012 31.03.2013 30.09.2012

Net asset value per ordinary stock unit $3.48 $3.48 $2.38 $2.38

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8. A review of the performance of the group, to the extent necessary for a reasonable understanding of the group’s business. It must include a discussion of the following:-

(a) any significant factors that affected the turnover, costs and earnings of the group for the current financial period reported on, including (where applicable) seasonal or cyclical factors; and

(b) any material factors that affected the cash flow, working capital, assets or liabilities of the group during the current financial period reported on.

Group Overview

Highlights of 1HFY13

S$ M Revenue Pre-tax Profit/(Loss) Net AttributableProfit/(Loss)

1H FY13

1HFY12

+/(-) %

1H FY13

1H FY12

+/(-)%

1H FY13

1H FY12

+/(-) %

Automotive 509.9 402.4 26.7 15.8 13.4 17.9 13.7 11.5 19.1 Property 7.7 95.6 (91.9) (4.6) 12.7 n.m. (4.9) 7.8 n.m. Technology* 646.5 638.2 1.3 (17.9) 37.8 n.m. (10.6) 20.0 n.m. Engrg, Mfg & Distn# 95.1 100.9 (5.7) 7.1 7.0 1.4 6.1 6.1 0.0 Others 24.4 27.6 (11.6) (1.4) (0.5) n.m. (1.1) (0.4) n.m. Corporate expenses - - - (7.6) (5.6) n.m. (7.8) (6.2) n.m. Operational Profit/ (Loss) - - - (8.6) 64.8 n.m. (4.6) 38.8 n.m.Non-recurring items - - - (0.7) 7.3 n.m. (0.8) 4.9 n.m. Group Total 1,283.6 1,264.7 1.5 (9.3) 72.1 n.m. (5.4) 43.7 n.m.

* Includes only MFLEX and MFS # Includes Manufacturing Services n.m. – not meaningful

For the six months ended 31 March 2013 (“1HFY13”), Group revenue increased 1.5% year-on-year (“yoy”) from S$1.26 billion to S$1.28 billion. The Group incurred a net attributable loss of S$5.4 million. Operational net attributable loss for 1HFY13 was S$4.6 million. This is mainly due to losses incurred by the Group’s US-listed subsidiary, Multi-Fineline Electronix, Inc. (“MFLEX”) in the second quarter.

2QFY13 vs. 2QFY12

S$ M Revenue Pre-tax Profit/ (Loss) Net Attributable Profit/(Loss)

Business Divisions 2QFY13

2QFY12

+/(-)%

2QFY13

2QFY12

+/(-)%

2QFY13

2QFY12

+/(-)%

Automotive 276.0 230.1 19.9 8.5 7.3 16.4 7.2 6.7 7.5 Property 2.8 3.8 (26.3) (3.4) (2.3) n.m. (3.4) (2.3) n.m. Technology* 255.2 297.1 (14.1) (31.1) 16.9 n.m. (17.1) 9.3 n.m. Engrg, Mfg & Distn# 52.9 52.7 0.4 3.9 4.1 (4.9) 4.2 4.4 (4.5) Others 13.5 14.8 (8.8) 0.3 0.8 (62.5) 0.6 0.8 (25.0) Corporate Expenses - - - (3.3) (4.1) n.m. (3.6) (4.5) n.m. Operational Profit/(Loss) - - - (25.1) 22.7 n.m. (12.1) 14.4 n.m.Non-recurring Items - - - 0.8 8.0 (90.0) 0.7 5.7 (87.7) Group Total 600.4 598.5 0.3 (24.3) 30.7 n.m. (11.4) 20.1 n.m.

* Includes only MFLEX and MFS # Includes Manufacturing Services n.m. – not meaningful

For the second quarter ended 31 March 2013 (“2QFY13”), the Group recorded revenue of S$600.4 million. The Group recorded a pre-tax loss of S$24.3 million and net attributable loss of S$11.4 million, mainly due to losses incurred by one of its listed Technology subsidiaries, MFLEX. This is in line with the profit guidance issued on 26 April 2013.

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Performance by Division

Automotive Division

In 2QFY13, revenue for the Automotive division increased 19.9% to S$276.0 million, mainly due to higher COE premiums and higher sales of premium brands in Singapore, as well as higher volume sold in Malaysia and China. Sales in Singapore continued to be strong, despite the Government’s recent announcement of a tiered system for the Additional Registration Fee (ARF), as well as revisions to the quantum and tenure of car loans. Operational net attributable profit increased 7.5% to S$7.2 million, compared to S$6.7 million in the previous corresponding period.

Property Division

Sales from the Property division declined by 26.3% yoy to S$2.8 million in 2QFY13, mainly due to lower recognition of sales for its various developments, based on the completion-of-construction accounting method. The division incurred an operational net attributable loss of S$3.4 million. In end March 2013, Huaxin International launched for sale, its strata-titled serviced apartments in Shenyang Orchard Summer Palace.

Technology Division

Net sales of MFLEX in 2QFY13 were US$173.7 million, a 16.5% decrease from net sales of US$208.0 million in the same quarter last year. Translated to Singapore dollars, sales were S$215.9 million, a yoy decrease of 17.8%. MFLEX recorded a US$10.9 million inventory write-down as a result of unusable components, as well as a small portion that was written-down as a result of uncertainty in near-term demand forecasts. The Group’s operational net attributable loss from MFLEX was S$18.0 million, compared to an operational net attributable profit of S$8.1 million in 2QFY12.

Net sales of MFS in 2QFY13 were S$39.3 million, a 13.6% increase from S$34.6 million in 2QFY12, largely contributed by the Flexible Printed Circuits business. The Group’s operational net attributable profit from MFS was S$0.9 million, compared to S$1.2 million in 2QFY12.

Engineering, Manufacturing & Distribution Division

In 2QFY13, the Engineering, Manufacturing & Distribution division registered a 0.4% increase in revenue to S$52.9 million, mainly due to higher sales recognised for its systems integration unit, O’Connor’s, which recorded higher sales from its Security and Surveillance business. Operational net attributable profit declined 4.5% to S$4.2 million, due to lower gross margins from the building materials business.

Balance Sheet and Cash Flow Statement Position

Balance Sheet Review

Total assets decreased by S$11.5 million, mainly due to lower trade and other receivables (by S$77.0 million), inventories (by S$55.5 million) and property, plant and equipment (by S$9.3 million). These were partially offset by higher bank balances and deposits (by S$68.1 million), development properties (by S$48.1 million) and available-for-sale financial assets (by S$14.8 million).

The decrease in trade and other receivables and inventories was largely driven by the Technology division, due to a planned scale-back of production as well as an inventory write-down. The increase in development properties arose from development costs incurred for three key projects: Shenyang Orchard Summer Palace, Suzhou Horizon Manor and Chengdu Orchard Villa. Available-for-sale financial assets increased due to marked-to-market adjustment of a quoted investment.

Total liabilities decreased by S$29.7 million, mainly due to lower trade and other payables (by S$81.1 million), which was partially offset by higher borrowings (by S$55.2 million).

The decrease in trade and other payables was mainly driven by the Technology division, as a result of lower inventories balances.

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Borrowings increased mainly due to loans drawn down for the construction of development properties in China and automotive facilities. This was offset by S$12.9 million from the conversion of convertible bonds to equity.

Cash Flow Review

1HFY13

The Group recorded a net operating cash inflow of S$80.8 million in 1HFY13 (please refer to 1(c), pg. 6). Contributing to the inflow were S$58.5 million lower inventories and S$84.3 million lower trade and other receivables. These were offset by an outflow of S$37.2 million for development properties and S$55.0 million for trade and other payables.

In 1HFY13, net cash of S$49.2 million was used in investing activities, which was largely driven by capital expenditure incurred by the Technology and Automotive divisions.

The net cash generated from financing activities was S$13.8 million, primarily due to an increase in net drawdown of loans of S$44.6 million, mainly for development projects in China and facilities expansion in the Automotive division. This was partially offset by the dividend payment of S$13.6 million and interest payment of S$12.4 million in 1HFY13.

Overall, cash and cash equivalents increased by S$45.4 million to S$468.7 million as at 31 March 2013.

2QFY13

The Group recorded a net operating cash inflow of S$77.7 million in 2QFY13 (please refer to 1(c), pg. 6). Included in the inflow was a S$67.1 million decrease in inventories and a S$139.8 million decrease in trade and other receivables. These were offset by an outflow of S$17.3 million for development properties and S$112.8 million for trade and other payables.

Net cash of S$20.0 million was used in investing activities, which was primarily related to capital expenditure incurred by the Technology and Automotive divisions.

The net cash used in financing activities was S$2.4 million, primarily due to the dividend payment of S$13.6 million and interest payment of S$8.6 million in 2QFY13. This was partially offset by an increase in net drawdown of loans of S$20.9 million, mainly for development projects in China.

Overall, cash and cash equivalents increased by S$55.3 million to S$468.7 million as at 31 March 2013.

9. Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and the actual results.

The results for 2QFY13 were in line with commentaries made in the announcements of 11 March 2013 and 26 April 2013 and the related announcement made by MFLEX on 2 May 2013.

10. A commentary at the date of the announcement of the significant trends and competitive conditions of the industry in which the group operates and any known factors or events that may affect the group in the next reporting period and the next 12 months.

Automotive The recent introduction of a tiered system of ARF and the revisions to the quantum and tenure of car loans may have a dampening effect on the Singapore car market. The Group is hopeful that its portfolio of diverse brands and products may mitigate demand downside risks in certain segments of the Singapore car market. Concurrently, the Group will continue to focus on increasing its market share and building its position as a leading premium car distributor in the Asia Pacific region.

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Property The Chinese Government’s continued cooling measures to curb speculative demand and stabilise property prices have further dampened home buying activities. While interest for the Group’s development projects remains stable, the Group will continue to monitor the situation. Based on the completion-of-construction accounting method, the Group expects the performance for its Property division to continue to be uneven. The Group will continue to focus on completing and delivering its quality developments - Shenyang Orchard Summer Palace, Suzhou Horizon Manor and Chengdu Orchard Villa, and seek out opportunities as and when they arise.

Technology Due to continued soft market conditions, MFLEX plans to continue to focus on reducing inventory levels during the third quarter.

MFS will continue to stay nimble to meet customer needs and continue its drive for higher operational excellence.

Engineering, Manufacturing & Distribution The division’s focus on the timely execution and delivery of existing contracts and securing new contracts and orders has yielded stability in its financial performance and this will continue to be its primary focus.

11. Dividend

(a) Current Financial Period Reported On

Any dividend declared for the current financial period reported on? Yes

Name of Dividend Interim Dividend Type Cash Dividend Rate 5 cents per ordinary stock unit Tax Rate Tax-exempt (1-Tier)

(b) Corresponding Period of the Immediately Preceding Financial Year

Any dividend declared for the corresponding period of the immediately preceding financial year? Yes

Name of Dividend Interim Dividend Type Cash Dividend Rate 5 cents per ordinary stock unit Tax Rate Tax-exempt (1-Tier)

(c) Date payable

The interim tax-exempt (1-tier) dividend of 5 cents (2012 : tax exempt (1-tier) of 5 cents) per ordinary stock unit will be payable on 1 August 2013 to Stockholders on the Register of Members on 11 July 2013.

(d) Books closure date

NOTICE IS HEREBY GIVEN that the Transfer Books and Register of Members of the Company will be closed on 12 July 2013 for the preparation of dividend warrants. Duly completed transfers received by the Company’s Share Registrars, Tricor Barbinder Share Registration Services (A division of Tricor Singapore Pte. Ltd.), 80 Robinson Road, #02-00, Singapore 068898, up to 5.00 p.m. on 11 July 2013 will be registered to determine Stockholders’ entitlement to the dividend.

Stockholders (being depositors) whose securities accounts with The Central Depository (Pte) Limited are credited with ordinary stock units of the Company as at 5.00 p.m. on 11 July 2013 will be entitled to the dividend.

12. If no dividend has been declared/recommended, a statement to that effect.

Not applicable.

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13. If the Group has obtained a general mandate from shareholders for Interested Party Transactions (“IPTs”), the aggregate value of such transactions as required under Rule 920(1)(a)(ii). If no IPT mandate has been obtained, a statement to that effect.

Not applicable as the Group has not obtained a general mandate from shareholders for IPTs.

14. Subsequent events On 12 March 2013, JP Morgan (S.E.A.) Limited, for and on behalf of UE Centennial Venture Pte. Ltd. (“UECVPL”), a wholly-owned subsidiary of United Engineers Limited, announced its mandatory conditional offers to acquire all the issued stock units and convertible bonds of the Company, other than those already owned, controlled or agreed to be acquired by UECVPL and certain parties acting in concert with it, at S$4.15 in cash per stock unit (the “UE Offers”). The Company despatched a circular dated 9 April 2013 to stockholders and bondholders of the Company in connection with the UE Offers. On 24 April 2013, JP Morgan (S.E.A.) Limited, for and on behalf of UECVPL, announced that the closing date of the UE Offers will be extended to 5.30 p.m. on 10 May 2013 or such later date(s) as may be announced from time to time by or on behalf of UECVPL.

BY ORDER OF THE BOARD

Tan Swee Hong Secretary Singapore 8/5/2013

STATEMENT PURSUANT TO RULE 705(5) OF THE LISTING MANUAL

We confirm on behalf of the Board of Directors that, to the best of our knowledge, nothing has come to the attention of the Board of Directors which may render the interim financial results of the Group and Company (comprising the balance sheet, consolidated income statement, statement of comprehensive income, statement of changes in equity and consolidated cash flow statements, together with their accompanying notes) as at 31 March 2013 and the results of the business, changes in equity and cash flows of the Group for the 6 months ended on that date, to be false or misleading in any material respect.

ON BEHALF OF THE DIRECTORS

Norman Ip Ka Cheung Kyle Lee Khai Fatt Chairman Director

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APPENDIX IV

LETTER FROM KPMG IN RELATION TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE WBL GROUP FOR THE SIX MONTHS

ENDED 31 MARCH 2013

The Board of DirectorsWBL Corporation Limited801, Lorong 7 Toa Payoh#07-00 Wearnes BuildingSingapore 319319

22 May 2013

Dear Sirs

Revision of the Mandatory Conditional Cash Offers to acquire all the issued ordinary stock units in the capital of and all the outstanding convertible bonds due 10 June 2014 issued by WBL Corporation Limited (the “Company”)

On 8 May 2013, the board of directors of the Company (the “Board of Directors”) announced the unaudited consolidated fi nancial statements of the Company for the six-month period ended 31 March 2013 (the “2Q13 Results”). We have examined the 2Q13 Results and have discussed the same with the management of the Company who are responsible for their preparation. We have also considered the report by PricewaterhouseCoopers LLP (the Company’s auditor) dated 8 May 2013 on their review of the 2Q13 Results.

For the purpose of this letter, we have relied on and assumed the accuracy and completeness of all information provided to us by the Company. Save as provided in this letter, we do not express any other opinion or views on the 2Q13 Results. The Board of Directors remains solely responsible for the 2Q13 Results.

Based on the above, we are of the opinion that the 2Q13 Results have been prepared by the Company after due and careful enquiry.

This letter is provided to the Board of Directors solely for the purpose of complying with Rule 25 of the Singapore Code on Take-overs and Mergers and not for any other purpose. We do not accept any responsibility to any person(s), other than the Board of Directors, in respect of, arising out of, or in connection with this letter.

Yours faithfullyFor and on behalf ofKPMG Corporate Finance Pte Ltd

Vishal Sharma Jason YongExecutive Director Manager

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APPENDIX V

LETTER FROM PWC IN RELATION TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE WBL GROUP FOR THE SIX MONTHS

ENDED 31 MARCH 2013

The extract of the review report dated 8 May 2013, on the condensed interim financial statements of the Company and its subsidiaries for the period ended 31 March 2013 which has been prepared in accordance with Singapore Financial Reporting Standards 34 Interim Financial Reporting, is as follows:

PricewaterhouseCoopers LLP Public Accountants and Certified Public Accountants Singapore, 8 May 2013

PricewaterhouseCoopers LLP (Registration No. T09LL0001D) is an accounting limited liability partnership registered in Singapore under the Limited Liability Partnership Act (Chapter 163A). PricewaterhouseCoopers LLP is part of the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.

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APPENDIX VI

LETTER FROM SHANGHAI LIXIN APPRAISAL LTD

LETTER TO STOCKHOLDERS AND BONDHOLDERS FROM THE … · 5/22/2013 · Mr Lai Teck Poh...

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