National Electronics Holdings Limited — Proxy Solicitation & Information Statement 2008

Sep 4, 2008

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Chinese Estates Holdings Limited, you should at once hand this circular to the purchaser(s) or transferee(s) or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or transferee(s).

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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(Incorporated in Bermuda with limited liability)

(Stock Code: 127)

SCRIP DIVIDEND SCHEME IN RELATION TO THE INTERIM DIVIDEND FOR THE SIX MONTHS ENDED 30TH JUNE, 2008

5th September, 2008

DEFINITIONS

In this circular, unless the context otherwise requires, the following expressions have the following meanings:

“Board”	the board of Directors
“Company”	Chinese Estates Holdings Limited, an exempted company
	incorporated in Bermuda with limited liability, the shares
	of which are listed on the main board of the Stock Exchange
“Directors”	the directors of the Company
“Interim Dividend”	the interim dividend of HK$0.135 per Share for the six
	months ended 30th June, 2008 payable on or about 8th
	October, 2008 to the Shareholders whose names were
	recorded on the register of members of the Company on
	27th August, 2008
“Hong Kong”	the Hong Kong Special Administrative Region of the
	People’s Republic of China
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“Overseas Shareholders”	the Shareholders who are resident in jurisdictions outside
	Hong Kong
“Scrip Dividend Scheme”	the scrip dividend alternative announced by the Company
	on 7th August, 2008 which offers Shareholders a scrip
	alternative whereby Shareholders may elect to receive their
	Interim Dividend wholly or partly by the allotment of Scrip
	Shares credited as fully paid in lieu of cash
“Scrip Share(s)”	new Share(s) to be issued under the Scrip Dividend Scheme
“Shareholders”	the holders of the Shares
“Share(s)”	ordinary share(s) of HK$0.10 each in the share capital of
	the Company
“Stock Exchange”	The Stock Exchange of Hong Kong Limited

Should there be any discrepancy between English and Chinese versions of this circular, the English version shall prevail.

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LETTER FROM THE BOARD

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(Incorporated in Bermuda with limited liability)

(Stock Code: 127)

Executive Directors: Joseph Lau, Luen-hung (Chairman and Chief Executive Officer) Lau, Ming-wai

Non-executive Director: Amy Lau, Yuk-wai Independent Non-executive Directors: Chan, Kwok-wai Cheng, Kwee Phillis Loh, Lai-ping

Registered Office: Canon’s Court 22 Victoria Street Hamilton HM 12 Bermuda

Principal Office in Hong Kong: 26th Floor MassMutual Tower 38 Gloucester Road Wanchai Hong Kong

5th September, 2008

To the Shareholders

Dear Sir or Madam,

SCRIP DIVIDEND SCHEME IN RELATION TO THE INTERIM DIVIDEND FOR THE SIX MONTHS ENDED 30TH JUNE, 2008

INTRODUCTION

On 7th August, 2008, it was announced that the Board has declared the payment of the Interim Dividend which would be paid to the Shareholders whose names were recorded on the register of members on 27th August, 2008. Such Shareholders may elect to receive the Interim Dividend in the form of Scrip Shares in lieu of cash. The last day on which transfers were accepted for registration for participation in the Scrip Dividend Scheme was 21st August, 2008.

The purpose of this circular is to set out the procedures and conditions which apply in relation to the Scrip Dividend Scheme and the action which should be taken by Shareholders if they wish to participate in the Scrip Dividend Scheme.

PARTICULARS OF THE SCRIP DIVIDEND SCHEME

Under the Scrip Dividend Scheme, each Shareholder has the choice of receiving:

• (a) HK$0.135 in cash for each Share held on 27th August, 2008; or

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LETTER FROM THE BOARD

• (b) an allotment of Scrip Shares credited as fully paid and having an aggregate market value (as determined below), save for adjustment for fractions, equal to the total amount of the Interim Dividend which such Shareholder could elect to receive in cash; or

• (c) a combination of partly in (a) and partly in (b) above.

The market value for calculating the number of Scrip Shares to be allotted to the Shareholders pursuant to the Scrip Dividend Scheme was HK$10.952 per Scrip Share, which is the average of the closing prices of one Share on the Stock Exchange for the 5 consecutive trading days commencing on 20th August, 2008, the first day on which the Shares were traded ex dividend. Accordingly, the number of Scrip Shares which Shareholders will receive in respect of their shareholdings on 27th August, 2008 under the Scrip Dividend Scheme will be calculated as follows:

Number of existing Shares Number of Scrip Shares = held on 27th August, 2008 X HK$0.135 to be allotted for which election for HK$10.952 Scrip Shares is made

If all Shareholders elect to receive their Interim Dividend entitlements in Scrip Shares, based on 2,268,052,624 Shares in issue on 27th August, 2008, not more than 27,957,186 Scrip Shares will be issued under the Scrip Dividend Scheme. The number of Scrip Shares to be issued to each Shareholder will be rounded down to the nearest whole number. Fractional entitlements to Scrip Shares will not be allotted but will be aggregated and sold for the benefit of the Company.

The Scrip Shares will rank pari passu in all respects with the existing issued Shares save that they will not be entitled to the Interim Dividend.

Shareholders should note that the Scrip Shares may give rise to notification requirements under Part XV of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong). Shareholders who are in any doubt as to how these provisions may affect them are recommended to seek their own professional advice. Shareholders who are in any doubt as to their taxation position are also recommended to seek their own professional advice.

ADVANTAGES OF THE SCRIP DIVIDEND SCHEME

The Scrip Dividend Scheme will give Shareholders the opportunity to increase their investment in the Company at market value without incurring brokerage fees, stamp duty and related dealing costs. The Scrip Dividend Scheme will also be to the advantage of the Company because, to the extent that Shareholders do not elect to receive cash, in whole or in part, such cash as would otherwise have been paid to Shareholders will be retained for use as working capital by the Company.

FORM OF ELECTION

A form of election for Shareholders to elect to receive the Interim Dividend in Scrip Shares is enclosed with this circular.

If you wish to receive the Interim Dividend wholly in cash, you do not need to take any action.

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LETTER FROM THE BOARD

If you elect to receive the Interim Dividend wholly in Scrip Shares, or partly in cash and partly in Scrip Shares, you should use the enclosed election form. If you sign the election form but do not specify the number of Shares in respect of which you wish to receive Scrip Shares, or if you elect to receive Scrip Shares in respect of a greater number of Shares than your registered holding on 27th August, 2008, you will be deemed to have exercised your election to receive Scrip Shares in respect of all the Shares of which you were then registered as the holder.

Any Shareholder who wishes to elect to receive Scrip Shares in lieu of cash in respect of the Interim Dividend entitlement, either in whole or in part, must complete the enclosed election form and return it to the Company’s Branch Registrar and Transfer Office in Hong Kong, Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not later than 4:30 p.m. on Tuesday, 23rd September, 2008. Elections in respect of the Interim Dividend cannot be in any way withdrawn, revoked, superseded or altered after the relevant forms of election are signed and lodged with the Company’s Branch Registrar and Transfer Office in Hong Kong. No acknowledgement of receipt of the election form will be issued.

SHAREHOLDERS RESIDENT OUTSIDE HONG KONG

The participation in the Scrip Dividend Scheme by Overseas Shareholders may be affected by the laws of their relevant jurisdictions.

Overseas Shareholders receiving this circular and/or election form outside Hong Kong may not treat the same as an invitation to participate in the Scrip Dividend Scheme unless such invitation could lawfully be made to them without having to comply with any registration or other legal requirements in the relevant territory. In such circumstances, this circular and/or the election form will be deemed to have been sent for information purposes only.

The Company had made legal enquiries in the relevant jurisdictions regarding the legal restrictions and requirements of regulatory body or stock exchange of extending the Scrip Dividend Scheme to the Overseas Shareholders. Since registration or filing or other procedures or formalities, subject to certain exceptions, would need to be carried out in relation to the Scrip Dividend Scheme to comply with the relevant securities legislation or regulation in the United States of America and Malaysia, the Directors considered that it would be necessary or expedient for the Company to exclude Overseas Shareholders with registered addresses in the United States of America and Malaysia (the “Excluded Shareholders”) from the Scrip Dividend Scheme pursuant to Rule 13.36(2) of the Rules Governing the Listing of Securities on the Stock Exchange. Accordingly, the Excluded Shareholders will receive the Interim Dividend wholly in cash. This circular has been sent to the Excluded Shareholders for information only and no election form is being sent to them.

This circular and the election form do not constitute or form part of an offer or solicitation of any offer to buy securities of the Company, and the election form is non transferable. Accordingly, the Scrip Dividend Scheme will not be made available directly or indirectly, and neither this circular nor any other material or advertisements in connection with the Scrip Dividend Scheme may be distributed or published, in or from any country or jurisdiction except under circumstances that will result in compliance with any applicable rules and regulations of any such country or jurisdiction.

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LETTER FROM THE BOARD

Notwithstanding the legal enquiries made by the Company, it is the responsibility of anyone wishing to participate in the Scrip Dividend Scheme to consult their professional advisers and satisfy themselves as to whether any governmental or other consents are required or other formalities need to be observed to enable them to participate in the Scrip Dividend Scheme. Overseas Shareholders who are in any doubt as to their position should consult their own appropriately authorized professional advisers without delay.

STOCK EXCHANGE LISTING AND DESPATCH OF CERTIFICATES FOR SCRIP SHARES

The Scrip Dividend Scheme is conditional upon listing approval being granted by the Stock Exchange in respect of the Scrip Shares to be issued pursuant thereto. Application will be made to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Scrip Shares.

It is expected that the certificates for the Scrip Shares, and cheques for cash entitlements, will be posted to Shareholders at the risk of those entitled thereto on or about 8th October, 2008 on which date dealings in the Scrip Shares are expected to commence. Subject to the granting of listing of, and permission to deal in, Scrip Shares issued pursuant to the Scrip Dividend Scheme on the Stock Exchange, such Scrip Shares will be accepted as eligible securities by Hong Kong Securities Clearing Company Limited for deposit, clearance and settlement in the Central Clearing and Settlement System. Shareholders should seek the advice of their licensed securities dealer or other professional adviser for details of these settlement arrangements and how such arrangements will affect their rights and interests.

The Shares are only listed on the Stock Exchange. No part of the share capital of the Company is listed or dealt in on any other stock exchange and the Company is not currently seeking to list its Shares on any other stock exchange.

RECOMMENDATION AND ADVICE

Whether or not it is to your advantage to elect to receive cash or Scrip Shares, in whole or in part, depends upon your own individual circumstances and the decision in this regard, and all effects resulting therefrom, must be solely the responsibility of you. No financial product advice is given in this circular (or any other material) in relation to the Scrip Dividend Scheme and that nothing in this circular (or any other material) should be taken to constitute a recommendation or opinion that is intended to influence any Shareholders in making a decision to participate in the Scrip Dividend Scheme.

If any Shareholder is in any doubt as to any aspect of this circular, you should consult your stockbroker or other licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

Yours faithfully, On behalf of the Board Joseph Lau, Luen-hung Chairman

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