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 Sunrise (China) Technology Group Limited , you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or the transfer was effected for onward transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim 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 the Cayman Islands with limited liability) (Stock Code: 8226)

VERY SUBSTANTIAL DISPOSAL AND CONNECTED TRANSACTION IN RELATION TO THE DISPOSAL OF THE ENTIRE INTERESTS OF A WHOLLY-OWNED SUBSIDIARY AND NOTICE OF EXTRAORDINARY GENERAL MEETING

Financial Adviser

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

Grand Vinco Capital Limited Wholly owned subsidiary of Vinco Financial Group Limited

Capitalised terms used in this cover page shall have the same meanings as those defined in the section headed “Definitions” of this circular.

A letter from the Board is set out on pages 5 to 19 of this circular. A letter from the Independent Board Committee is set out on page 20 of this circular. A letter from Vinco Capital containing its advice and recommendation to the Independent Board Committee and the Independent Shareholders is set out on pages 21 to 35 of this circular.

A notice convening the EGM to be held at Units 01-03, 28th Floor, Shui On Centre, 6-8 Harbour Road, Wanchai, Hong Kong on Thursday, 18 July 2013 at 10:00 a.m. is set out on pages 82 to 83 of this circular. A form of proxy for the EGM is enclosed with this circular. Whether or not you are able to attend the EGM, please complete the enclosed form of proxy in accordance with the instructions printed thereon and return the same to the Company’s Hong Kong branch share registrar and transfer office, Union Registrars Limited, at 18th Floor, Fook Lee Commercial Centre, Town Place, 33 Lockhart Road, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the EGM or any adjourned meeting. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or at any adjourned meeting thereof should you so wish.

28 June 2013

CHARACTERISTICS OF GEM

GEM has been positioned as a market designed to accommodate companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors.

Given the emerging nature of companies listed on GEM, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board and no assurance is given that there will be a liquid market in the securities traded on GEM.

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Letter from Vinco Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Appendix I – Financial information of the Disposal Group . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Appendix II – Unaudited pro forma financial information on the Remaining Group . . . . . . . . . 44
Appendix III – Financial information on the Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Appendix IV – Property valuation report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Appendix V – General information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Notice of EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

DEFINITIONS

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

“Announcement” the announcement of the Company dated 9 May 2013 in relation to the Disposal “associate(s)” has the meaning ascribed thereto under the GEM Listing Rules

“Board” the board of Directors
“Business Day(s)” a day/days (other than a Saturday, Sunday or public holiday) on which licensed banks are generally open for business in Hong Kong throughout their normal business hours
“BVI”

the British Virgin Islands

“Company” Sunrise (China) Technology Group Limited, a company incorporated in the Cayman Islands whose shares are listed and traded on GEM
“Completion” completion of the sale and purchase of the Sale Shares and the Sale Loan in accordance with the terms and conditions of the Sale and Purchase Agreement
“Completion Date” the date of falling third Business Days after the fulfillment (or waiver) of the conditions set out in the Sale and Purchase Agreement
“connected person(s)” has the meaning ascribed thereto under the GEM Listing Rules “Consideration” the aggregate consideration of HK$122,000,000 for the Disposal “Detroit Sonavox” Detroit Sonavox Inc., a company incorporated in USA with limited liability
“Director(s)” the director(s) of the Company “Disposal” the disposal of the Sale Shares and the Sale Loan pursuant to the Sale and Purchase Agreement
“Disposal Group” the Disposed Company and its subsidiaries
“Disposed Company” Taraki Inc., a company incorporated in BVI with limited liability

“EGM” the extraordinary general meeting to be convened and held by the Company to consider and, if thought fit, approve the Sale and Purchase Agreement and the transactions contemplated thereunder

DEFINITIONS

“GEM”

the Growth Enterprise Market of the Stock Exchange

“GEM Listing Rules”

the Rules Governing the Listing of Securities on GEM

“Group”

the Company and its subsidiaries

“Heilongjiang Shengyan”
黑龍江省盛炎新能源開發有限公司 (Heilongjiang Province Shengyan New Energy Development Limited*), a company incorporated in the PRC with limited liability
“Hong Kong”

the Hong Kong Special Administrative Region of the PRC

“Independent Board Committee”
the independent board committee comprising all the independent non-executive Directors established to advise the Independent Shareholders in relation to the terms of the Sale and Purchase Agreement and the transactions contemplated thereunder
“Independent Financial Adviser” or “Vinco Capital”
Grand Vinco Capital Limited, a wholly-owned subsidiary of Vinco Financial Group Limited (stock code: 8340), a corporation licensed to carry out type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activities as defined under the SFO, and being the independent financial adviser to the Independent Board Committee and the Independent Shareholders to advise the terms of the Sale and Purchase Agreement and the transactions contemplated thereunder
“Independent Shareholders”
Shareholders other than Mr. Yang and his associates who are required by the GEM Listing Rules to abstain from voting on the resolution approving the Sale and Purchase Agreement and the transactions contemplated thereunder
“Independent Third Party(ies)” third party(ies) who is/are independent from the Company and its connected person(s)
“Jiangsu Shengyi”
江蘇晟宜環保科技有限公司 (Jiangsu Shengyi Environmental Technology Co., Ltd.*), a company incorporated in the PRC with limited liability
“Latest Practicable Date”
26 June 2013, being the latest practicable date before the printing of this circular for ascertaining certain information for inclusion in this circular
“Long Stop Date” 31 July 2013, or such later date as the Company and the Purchaser may agree
“Mr. Yang”
Mr. Yang Ching Yau, a former director of the Company within the preceding 12 months

DEFINITIONS

“ODM”	original design manufacturing, a type of manufacturing under
	which the manufacturer owns the design of the products and the
	products are marketed under the customer’s brand name
“OEM”	original equipment manufacturing, a type of manufacturing
	under which products are manufactured, in whole or in part, in
	accordance with specifications of the customer and are marketed
	under the customer’s brand name
“Paradise Holdings”	Paradise Holdings Limited, a company incorporated in Hong Kong
	with limited liability
“PRC”	the People’s Republic of China, which for the purpose of
	this announcement excludes Hong Kong, the Macau Special
	Administrative Region of the PRC and Taiwan
“Purchaser”	Buena Holdings Limited, a company incorporated in BVI with
	limited liability
“Remaining Group”	the Group other than the Disposal Group
“Sale and Purchase Agreement”	the conditional sale and purchase agreement dated 2 May 2013
	entered into between the Company and the Purchaser for the sale
	and purchase of the Sale Shares and the Sale Loan
“Sale Loan”	all obligations, liabilities and debts owing or incurred by the
	Disposed Company to the Company on or at any time prior
	to the Completion whether actual, contingent or deferred and
	irrespective of whether or not the same is due and payable
	on Completion which as at 31 December 2012, amounted to
	HK$34,795,000
“Sale Shares”	2 shares of US$1.00 each in the issued share capital of the
	Disposed Company, representing the entire issued share capital of
	the Disposed Company
“SFO”	Securities and Futures Ordinance (Chapter 571 of the Laws of
	Hong Kong)
“Share(s)”	ordinary share(s) of HK$0.01 each in the share capital of the
	Company
“Shareholder(s)”	holder(s) of the Share(s)
“Sonavox Electronics”	Sonavox Electronics Company Limited, a company incorporated
	in Somoa with limited liability

DEFINITIONS

“Sonavox Europe” Sonavox Europe GmbH, a company incorporated in Germany with limited liability
“Stock Exchange” The Stock Exchange of Hong Kong Limited “Suzhou Hesheng Industrial” 蘇州和盛實業有限公司 (Suzhou Hesheng Industrial Co., Ltd.*), a company incorporated in the PRC with limited liability
“Suzhou Shangsheng Electrics” 蘇州上聲電子有限公司 (Suzhou Shangsheng Electrics Co., Ltd.*), a company incorporated in the PRC with limited liability
“Suzhou Shangsheng Electronic” 蘇州尚聲電子有限公司 (Suzhou Shangsheng Electronic Co., Ltd.*), a company incorporated in the PRC with limited liability
“Suzhou Shangsheng Technology” 蘇州上聲科技有限公司 (Suzhou Shangsheng Technology Co., Ltd.*), a company incorporated in the PRC with limited liability
“Suzhou Shangsheng Trading” 蘇州上聲國際貿易有限公司 (Suzhou Shangsheng International Trading Co., Ltd.*), a company incorporated in the PRC with limited liability
“Suzhou Sonavox Acoustics” 蘇州上昇音響有限公司 (Suzhou Sonavox Acoustics Co., Ltd.*), a company incorporated in the PRC with limited liability
“Suzhou Yanlong Electronic” 蘇州延龍電子有限公司 (Suzhou Yanlong Electronic Product Co. Ltd.*), a company incorporated in the PRC with limited liability
“USA” the United States of America “Wise Point” Wise Point Holdings Limited, a company incorporated in Hong Kong with limited liability
“EUR” Euro, the lawful currency of the euro area “HK$” Hong Kong dollars, the lawful currency of Hong Kong “RMB” Renminbi, the lawful currency of the PRC “THB” Thai Bahts, the lawful currency of Thailand “US$” United Stated dollars, the lawful currency of USA “%” per cent.
denotes English translation of the name of a Chinese company and is provided for identification purposes only

LETTER FROM THE BOARD

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(incorporated in the Cayman Islands with limited liability) (Stock Code: 8226)

Executive Directors:

Mr. Shan Xiaochang (Chairman) Ms. Shan Zhuojun

Mr. Ma Arthur On-hing

Independent non-executive Directors:

Mr. Wang Jialian Mr. Wang Zhihua Ms. Chan Sze Man

Registered office: Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman, KY1-1111 Cayman Islands

Head office and principal place of business in Hong Kong: Units 01-03, 28th Floor Shui On Centre 6-8 Harbour Road Wan Chai, Hong Kong

28 June 2013

To the Shareholders

Dear Sir or Madam,

VERY SUBSTANTIAL DISPOSAL AND CONNECTED TRANSACTION IN RELATION TO THE DISPOSAL OF THE ENTIRE INTERESTS OF A WHOLLY-OWNED SUBSIDIARY

AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

Reference is made to the Announcement that on 2 May 2013 (after trading hours of the Stock Exchange), the Company and the Purchaser entered into the Sale and Purchase Agreement, pursuant to which the Company conditionally agreed to dispose of the Sale Shares and the Sale Loan to the Purchaser and the Purchaser conditionally agreed to acquire the Sale Shares and the Sale Loan from the Company at an aggregate consideration of HK$122,000,000.

The Disposal as contemplated under the Sale and Purchase Agreement constitutes both a very substantial disposal and connected transaction for the Company under Chapters 19 and 20 of the GEM Listing Rules and is subject to, among other matters, the Independent Shareholders’ approval at the EGM.

LETTER FROM THE BOARD

The purpose of this circular is to provide you with, among other things, details of the Sale and Purchase Agreement and the Disposal, the recommendation of the Independent Board Committee to the Independent Shareholders, a letter of advice from Vinco Capital to the Independent Board Committee and the Independent Shareholders in respect of the transactions contemplated under the Sale and Purchase Agreement and a notice of the EGM.

THE SALE AND PURCHASE AGREEMENT

The principal terms of the Sale and Purchase Agreement are set out below:

Date: 2 May 2013 Parties: (1) Buena Holdings Limited, as purchaser; and

(2) the Company, as vendor

To the best of the Directors’ knowledge, information and belief, the Purchaser is an investment holding company incorporated in BVI and is wholly-owned by Mr. Yang. As the Purchaser is an associate of Mr. Yang who is a former director of the Company within the preceding 12 months, the Purchaser is a connected person of the Company under the GEM Listing Rules.

Assets to be disposed of

Pursuant to the Sale and Purchase Agreement, the Purchaser has conditionally agreed to acquire, and the Company has conditionally agreed to sell, the Sale Shares and the Sale Loan. The Sale Shares represent the entire issued share capital of the Disposed Company. The Sale Loan represents the amount owing by the Disposed Company to the Company as at Completion. As at 31 December 2012, the Sale Loan amounted to HK$34,795,000 and such loan is unsecured, carries no interest and has no fixed term of repayment. Upon Completion, the Company will no longer have any interest in the equity capital of the Disposed Company. The Disposed Company and its subsidiaries will cease to be subsidiaries of the Company and their financial results will no longer be consolidated into the Group’s financial statements.

Consideration

The Consideration for the Sale Shares and the Sale Loan is approximately HK$122,000,000 which shall be payable by the Purchaser in the following manner:

(a) a sum of HK$5,000,000, being the refundable deposit and part of the Consideration, shall be paid by the Purchaser to the Company on or before 31 May 2013;
(b) a sum of HK$40,000,000, being the refundable deposit and part of the Consideration, shall be paid by the Purchaser to the Company on or before 14 June 2013;
(c) a sum of HK$50,000,000, being the refundable deposit and part of the Consideration, shall be paid by the Purchaser to the Company within 10 Business Days after the despatch of this circular; and

LETTER FROM THE BOARD

(d) the remaining HK$27,000,000 shall be payable by the Purchaser to the Company upon Completion.

As advised by the Directors, the first two payments of the Consideration in an aggregate sum of HK$45,000,000 had been paid by the Purchaser to the Company on 26 June 2013.

If (i) the conditions of the Sale and Purchase Agreement (which are outlined below) have not been fulfilled on or before the Long Stop Date; or (ii) the Completion does not take place for whatsoever reason, the Company shall refund to the Purchaser all the refundable deposits (without interest) that have been paid by the Purchaser to the Company on the next Business Day following the Long Stop Date or the day when the Company and the Purchaser have mutually confirmed in writing that Completion does not take place in accordance with the terms and conditions of the Sale and Purchase Agreement (whichever is earlier), and neither party shall have any obligations and liabilities thereunder and neither party shall take any action to claim for damages or to enforce specific performance or any other rights and remedies save for any antecedent breaches of the terms thereof.

The Consideration was determined after arm’s length negotiations between the Purchaser and the Company with reference to (i) the equity interests attributable to the unaudited consolidated net asset value of the Disposal Group of approximately HK$100,262,000 (which is calculated based on the unaudited net asset value of the Disposal Group of approximately HK$244,569,000 less minority interests of approximately HK$144,307,000) as at 31 December 2012; (ii) the unaudited amount of the Sale Loan of approximately HK$34,795,000 as at 31 December 2012; and (iii) approximately 9.7% discount to the sum of the equity interests attributable to the unaudited consolidated net asset value of the Disposal Group and the unaudited amount of the Sale Loan as at 31 December 2012 amounting to approximately HK$135,057,000 in aggregate. The Directors (excluding the independent non-executive Directors who have expressed their views on the transactions contemplated under the Sale and Purchase Agreement under the section headed “Letter from the Independent Board Committee” of this circular) consider that it is fair and reasonable to set the Consideration at a discount to the sum of the equity interests attributable to the unaudited consolidated net asset value of the Disposal Group and the unaudited amount of the Sale Loan as at 31 December 2012 after taken into account the followings: (i) the recent historical financial performance of the Disposal Group and in particular the Disposal Group recorded an unaudited net loss attributable to shareholders for the year ended 31 December 2012; (ii) the net current liabilities position of the Disposal Group as at 31 December 2012 which arises mainly from short-term bank borrowings and other payables due within one year; and (iii) the uncertainty the Group faces in its manufacturing and sales of loudspeaker systems business in light of the slow US economic recovery, the continuous Euro area debt crisis and the weakening PRC economic growth which have affected market demands as well as the historical high level of raw material and labour costs in the PRC. In view of the above, the Directors (excluding the independent non-executive Directors who have expressed their views on the transactions contemplated under the Sale and Purchase Agreement under the section headed “Letter from the Independent Board Committee” of this circular) are of the view that the Consideration is fair and reasonable.

Conditions of the Sale and Purchase Agreement

Completion of the Sale and Purchase Agreement shall be conditional upon and subject to:

(a) the Purchaser being satisfied with the results of the due diligence review to be conducted on the Disposal Group;

LETTER FROM THE BOARD

(b) all necessary consents and approvals required to be obtained on the part of the Company in respect of the Sale and Purchase Agreement and the transactions contemplated thereby having been obtained;
(c) all necessary consents and approvals required to be obtained on the part of the Purchaser in respect of the Sale and Purchase Agreement and the transactions contemplated thereby having been obtained;
(d) the passing by the Independent Shareholders at the EGM approving the Sale and Purchase Agreement and the transactions contemplated thereunder;
(e) if applicable, all the net debts due from the Disposal Group to the Remaining Group and vice versa, other than the Sale Loan which will be assigned by the Company at Completion, having been settled or waived in full;
(f) the representations, warranties and undertakings given under the Sale and Purchase Agreement remain true and accurate in all respects.

Conditions (a), (b) and (f) can be waived by the Purchaser in writing and condition (c) can be waived by the Company in writing. The necessary consents and approvals required to be obtained on the part of the Company as provided in condition (b) above mainly refer to board approval and other third parties’ consents and approvals (if any) in addition to the Independent Shareholders’ approval as provided in condition (d) above. If the above conditions have not been satisfied (or waived as the case may be) on or before 4:00 p.m. on the Long Stop Date, the Sale and Purchase Agreement shall cease and determine (save as otherwise provided therein), and thereafter neither party shall have any obligations and liabilities towards each other thereunder save for any antecedent breaches of the terms thereof. As at the Latest Practicable Date, none of the conditions had been fulfilled.

Completion

Completion shall take place at 4:00 p.m. on the Completion Date, or such later date as the Company and the Purchaser may agree.

Upon Completion, the Company will cease to hold any issued share capital in the Disposed Company and the Disposed Company and its subsidiaries will cease to be subsidiaries of the Group.

INFORMATION ON THE DISPOSAL GROUP

The Disposed Company, which was incorporated in BVI, is an investment holding company and a wholly-owned subsidiary of the Company. The Disposal Group is principally engaged in the manufacture and sale of loudspeaker systems used in both automobiles and home theatres and the provision of after-sales service. The Disposal Group has manufactured different types of loudspeaker systems for automobiles and home theatres on an OEM and ODM basis, all of which have different quality, sizes, designs and/or functions or are tailor-made for different customers.

LETTER FROM THE BOARD

To the best of the knowledge, information and belief of the Directors, the following diagram sets out the shareholding structure of the Group before and after Completion:

Before Completion

==> picture [455 x 289] intentionally omitted <==

----- Start of picture text -----

The Company
100% 100% 100% 51% 100% 100%
Ever Wealth Confident
A-Plus Glory Capital World Group Modern Capital Echo Rich Share Global The Disposed
Limited Limited Holdings Holdings Limited Company
Limited Limited (BVI)
(BVI) (BVI) (BVI)
(BVI) (BVI)
100% 100% 100% 100% 100% 100% 100%
Wealth Great Era Smart Honest Smart Faith King Rise Joy Sonavox
Corporation Trading Investment Investment Investment Electronics Wise Point
Limited Limited Limited Limited Limited (Hong Kong)
(Samoa)
(Hong Kong) (BVI) (Hong Kong) (Hong Kong) (Hong Kong)
100% 100% 51% 100% 51% 51% 51% 51%
宜興瑞添能源技術諮詢 Jiangsu Heilongjiang Paradise Shangsheng Suzhou Shangsheng Suzhou Hesheng Suzhou Sonavox Suzhou
有限公司 Shengyi Shengyan Holdings Technology Electrics Industrial Acoustics
(PRC) (PRC) (Hong Kong)
(PRC) (PRC) (PRC) (PRC) (PRC)
80% 100% 100% 60% 100% 100%
陝西晟宜環 Suzhou Suzhou Suzhou
有限公司保科技 Sonavox Detroit SonavoxEurope Electronic Yanlong ShangshengElectronic Shangsheng Trading
(PRC) (USA) (Germany) (PRC) (PRC) (PRC)
----- End of picture text -----

LETTER FROM THE BOARD

After Completion

The Remaining Group

==> picture [377 x 388] intentionally omitted <==

----- Start of picture text -----

The Company
100% 100% 100% 51% 100%
Ever Wealth Confident
A-Plus Glory Modern World Rich Share
Capital Holdings Echo Holdings
Capital Limited Group Limited Global Limited
Limited Limited
(BVI) (BVI) (BVI)
(BVI) (BVI)
100% 100% 100% 100% 100%
Wealth Great Honest Smart Faith King Rise Joy
Era Smart
Corporation Investment Investment Investment
Trading Limited
Limited Limited Limited Limited
(BVI)
(Hong Kong) (Hong Kong) (Hong Kong) (Hong Kong)
100% 100% 51%
宜興瑞添能源
Heilongjiang
技術諮詢有限 Jiangsu Shengyi
Shengyan
公司 (PRC)
(PRC)
(PRC)
80%
陝西晟宜環保
科技有限公司
(PRC)
----- End of picture text -----

LETTER FROM THE BOARD

The Disposal Group

==> picture [418 x 330] intentionally omitted <==

----- Start of picture text -----

The Purchaser
(BVI)
100%
The Disposed
Company
100% 100%
Sonavox
Wise Point
Electronics
(Hong Kong)
(Somoa)
100% 51% 51% 51% 51%
Suzhou Suzhou Suzhou Suzhou
Paradise
Shangsheng Shangsheng Hesheng Sonavox
Holdings
Technology Electrics Industrial Acoustics
(Hong Kong)
(PRC) (PRC) (PRC) (PRC)
100% 100% 60% 100% 100%
Suzhou Suzhou Suzhou
Detroit Sonavox
Yanlong Shangsheng Shangsheng
Sonavox Europe
Electronic Electronic Trading
(USA) (Germany)
(PRC) (PRC) (PRC)
----- End of picture text -----

As at the Latest Practicable Date, the Disposed Company directly holds 100% interest in Sonavox Electronics and Wise Point respectively. Sonavox Electronics was incorporated in Samoa and is currently a dormant company with no business operation. Wise Point was incorporated in Hong Kong and is an investment holding company.

Paradise Holdings, incorporated in Hong Kong and a wholly-owned subsidiary of Wise Point, is currently a dormant company with no business operation.

Suzhou Shangsheng Technology was incorporated in the PRC and is principally engaged in the manufacture and sales of loudspeaker systems. As at the Latest Practicable Date, Suzhou Shangsheng Technology is owned as to 51% by Wise Point and 49% by 蘇州市相城區元和鎮集體資產經營公司 (Suzhou City Xiangcheng District Yuanhe Town Collective Assets Operation Company), an Independent Third Party which is wholly-owned by 蘇州市相城區元和鎮人民政府 (Suzhou City Xiangcheng District Yuanhe Town People’s Government).

LETTER FROM THE BOARD

Suzhou Shangsheng Electrics was incorporated in the PRC and is principally engaged in the manufacture and sales of loudspeaker systems for automobiles. As at the Latest Practicable Date, Suzhou Shangsheng Electrics is owned as to 51% by Wise Point and 49% by 蘇州市相城區無線電組件一廠 (Suzhou City Xiangcheng District Radio Components Factory), an Independent Third Party which is wholly-owned by 蘇州市相城區元和鎮人民政府 (Suzhou City Xiangcheng District Yuanhe Town People’s Government).

Suzhou Hesheng Industrial was incorporated in the PRC and is principally engaged in the provision of rental services. As at the Latest Practicable Date, Suzhou Hesheng Industrial is owned as to 51% by Wise Point and 49% by 蘇州市相城區無線電組件一廠 (Suzhou City Xiangcheng District Radio Components Factory), an Independent Third Party which is wholly-owned by 蘇州市相城區元和鎮人民政府 (Suzhou City Xiangcheng District Yuanhe Town People’s Government).

Suzhou Sonavox Acoustics was incorporated in the PRC and is principally engaged in the manufacture and sales of loudspeaker systems for home theatres. As at the Latest Practicable Date, Suzhou Sonavox Acoustics is owned as to 51% by Wise Point and 49% by 吳縣市蠡口鎮集體資產經營公司 (Wuxian City Likou Town Collective Assets Operation Company), an Independent Third Party which is wholly-owned by 蘇州市相城區元和鎮人民政府 (Suzhou City Xiangcheng District Yuanhe Town People’s Government).

Detroit Sonavox was incorporated in USA and is principally engaged in the provision of after-sales services for customers in USA. As at the Latest Practicable Date, Detroit Sonavox is a wholly-owned subsidiary of Suzhou Shangsheng Electrics.

Sonavox Europe was incorporated in Germany and is principally engaged in the provision of aftersales services for customers in Europe. As at the Latest Practicable Date, Sonavox Europe is a whollyowned subsidiary of Suzhou Shangsheng Electrics.

Suzhou Yanlong Electronic was incorporated in the PRC and is principally engaged in the manufacture and sales of loudspeaker systems. As at the Latest Practicable Date, Suzhou Yanlong Electronic is owned as to 60% by Suzhou Shangsheng Electrics and 40% by 延同有限公司 (Yantong Limited*), an Independent Third Party.

Suzhou Shangsheng Electronic was incorporated in the PRC and is principally engaged in the manufacture and sales of loudspeaker systems. As at the Latest Practicable Date, Suzhou Shangsheng Electronic is a wholly-owned subsidiary of Suzhou Shangsheng Electrics.

Suzhou Shangsheng Trading was incorporated in the PRC and is principally engaged in the trading of loudspeaker systems. As at the Latest Practicable Date, Suzhou Shangsheng Trading is a wholly-owned subsidiary of Suzhou Shangsheng Electrics.

LETTER FROM THE BOARD

Set out below is a summary of the unaudited consolidated financial information of the Disposal Group, which has been reviewed by an independent audit firm CCTH CPA Limited, as set out in Appendix I to this circular:

	For the year ended	For the year ended
	31 December 2011	31 December 2012
	(unaudited)	(unaudited)
	HK$’000	HK$’000
Turnover	724,008	825,054
Net profit before taxation	25,248	10,939
Net profit after taxation	15,697	3,805
Net profit/(loss) attributable to shareholders	7,499	(4,444)

The unaudited net asset value of the Disposal Group was approximately HK$244,569,000 as at 31 December 2012. The deficit of the Consideration over the unaudited net asset value of the Disposal Group amounted to approximately HK$122,569,000. Further details of the financial information of the Disposal Group are set out in Appendix I of this circular.

PROPERTY INTERESTS OF THE DISPOSAL GROUP

Property interests of the Disposal Group include land and various buildings located at Suzhou City in Jiangsu Province in the PRC. The properties have been valued by an independent valuer as at 30 April 2013. The text of the letter and the valuation report issued by the independent valuer are set out in Appendix IV to this circular.

Reconciliation

A reconciliation of the carrying value of the Disposal Group’s property interests as at 31 December 2012 to their market value as at 30 April 2013 as stated in “Appendix IV – Property Valuation Report” to this circular is as follows:

Carrying value of the property interests as at 31 December 2012_(Note)_ Valuation of the property interests as at 30 April 2013 as set out in the valuation report in Appendix IV Valuation surplus	RMB’000 (100% interest) 118,908 244,100
	125,192

Note: The carrying value excludes the values of (i) four non-domestic buildings with a total gross floor area of approximately 67,469.28 sq.m. of the property no.2; and (ii) three 3-storey industrial buildings and a 1-storey warehouse building with a total gross floor area of approximately 17,910 sq.m. of the property no.3.

LETTER FROM THE BOARD

INFORMATION ON THE REMAINING GROUP

Upon Completion, the Remaining Group will be principally engaged in environmental protection related businesses mainly through its two subsidiaries, namely Heilongjiang Shengyan and Jiangsu Shengyi. The Group completed the acquisition of its respective 51% interest in Jiangsu Shengyi and Heilongjiang Shengyan in September 2011 and December 2012 respectively, further details of which are disclosed in the announcements of the Company dated 5 January 2011 and 30 October 2012.

Heilongjiang Shengyan was incorporated in the PRC in July 2010 with a registered capital of RMB30 million and is principally engaged in the production and sale of straw fuel briquettes, which is a type of biofuels and a substitute for coal, in the Northeast region of the PRC. The business model of Heilongjiang Shengyan is briefly summarised as follows:

Straw collection – purchase, collect and strap raw straw from farmers and transport to the warehouses for storage;
Straw chopping – the collected straw is then crushed into fine powder through crushing equipments;
Straw briquetting – the powdered straw is then put into the briquetting press machines from where it is compressed and processed before straw fuel briquettes are made; and
Sale of finished products – upon receiving sales orders, the straw fuel briquettes are then sold to customers.

The customers of Heilongjiang Shengyan mainly consist of companies, which are engaged in agricultural and manufacturing industries and use the straw fuel briquettes for different usage such as heat generation, located mostly at the Baiquan County of Heilongjiang Province. Revenue of Heilongjiang Shengyan is mainly derived from the sale of straw fuel briquettes by sales orders from customers and Heilongjiang Shengyan generates more revenue in winter seasons out of a year due to its usage mainly as heat generation by its customers. Heilongjian Shengyan purchases raw straw mainly from many different local farmers located at Heilongjian Province in the PRC. It entered into sales agreements with customers and purchase agreements with local farmers.

The production of Heilongjiang Shengyan is mainly conducted in one main plant and 30 sub-plants located at the Baiquan County of Heilongjiang Province with a production capacity of approximately 200,000 tonnes per year. The major assets of Heilongjiang Shengyan consist of land and buildings, 52 sets of straw briquette manufacturing devices and inventories. Heilongjiang Shengyan also owns technology patents in the production of straw fuel briquettes. Heilongjiang Shengyan is currently the largest company engaged in the manufacturing and sale of straw fuel briquettes in Heilongjiang Province. It has built 10 more sub-plants and increased its production capacity by 40,000 tonnes in the previous year. It is expected that Heilongjiang Shengyan will continue to increase its production capacity by building more sub-plants in Heilongjiang Province and neighbourhood provinces such as Jilin and Hebei Provinces as well as expand its product usage as fertilizers or animal feed though the Group has no exact future detailed plans of the scale of target production capacity or timing of the development plan. Due to its strong market position in Heilongjiang Province, Heilongjiang Shengyan has stable straw supplies and product demand and receives support from the local government.

LETTER FROM THE BOARD

In addition, the PRC government also promulgated several supporting policies and measures to support the straw industry. The State Council of the PRC has promulgated the 《「十二五」農作物秸稈綜合利用實施方案》 (12th Five Year Plan – Implementation Plan for Straw Integrated Utilization) at the end of 2011 to determine the development directions and security measures for related industries regarding the straw integrated utilization. The Ministry of Finance of the PRC published in October 2008 《秸稈能源化利用補助資金管理暫行辦法》(Interim Measures for Straw Energy Utilization Subsidies) to support the development of the straw industry by providing subsidy from the government. Under the 《秸稈能源化利用補助資金管理暫行辦法》(Interim Measures for Straw Energy Utilization Subsidies*), the qualifications of companies entitling to receive subsidy include (i) the registered capital of the company should be at least RMB10 million; (ii) the straw utilization business of the company should be in accordance with the general plan made by local government; (iii) the total volume of raw material used for production by the company should be not less than 10,000 tonnes; and (iv) the company has stable customers and sales revenue. Since established in 2010, Heilongjiang Shengyan has been granted annual subsidy amounting to approximately RMB3.2 million and RMB18.8 million for the year ended 31 December 2010 and 2011 respectively based on its annual volume of sales in 2010 and 2011 respectively, offered by the Ministry of Finance of the State Council of the PRC. According to the website of the Ministry of Finance of the PRC publishing the list of companies who had been granted straw energy utilization subsidy, Heilongjiang Shengyan is the largest straw utilization manufacturer in Heilongjiang Province in terms of annual sales in 2011. Heilongjiang Shengyan only recorded the subsidy income as other revenue below gross profit item in its accounts when it received the subsidy income. The annual subsidy of RMB3.2 million was received during the year ended 31 December 2011. Heilongjian Shengyan recorded turnover, gross profit and net profits of approximately RMB46.6 million, RMB60,499 and RMB673,722 respectively for the year ended 31 December 2011. The annual subsidy of RMB18.8 million was received in March 2013 and therefore was not booked in the accounts of Heilongjiang Shengyan for the year ended 31 December 2012. Heilongjiang Shengyan recorded turnover, gross profit and net profits of approximately RMB77.4 million, RMB12.4 million and RMB9.0 million respectively for the year ended 31 December 2012. The subsidy granted is significant to the net profits of Heilongjiang Shengyan but has no effects on the turnover and gross profit of Heilongjiang Shengyan. Since the Group completed the acquisition of Heilongjiang Shengyan in December 2012 and Heilongjiang Shengyan had been able to generate net profits of RMB9.0 million for the year ended 31 December 2012 without recognising the subsidy income in its accounts, the Directors are of the view that the extent of the reliance on subsidy income by Heilongjiang Shengyan has weakened in 2012 as compared to 2011 and it is expected that the reliance on subsidy income by Heilongjiang Shengyan will continue to decrease as Heilongjiang Shengyan will expand its production capacity and gradually raise the product price year by year. Based on the historical average subsidy granted per tonne of products produced in 2011 and the annual volume of sales in 2012, it is expected that Heilongjiang Shengyan will be granted subsidy of approximately RMB25 million for the year ended 31 December 2012 and there will be no material adverse impact to the Group if the subsidy for the year ended 31 December 2012 is not granted.

Jiangsu Shengyi was incorporated in the PRC in April 2007 with a registered capital of RMB16 million and is principally engaged in the provision of technological desulphurization service, which can effectively reduce sulfur dioxide and hydrogen sulfide emissions generated from burning of fossil fuels such as coal, natural gas and oil products. Jiangsu Shengyi is situated at the Yixing Environmental Protection Science and Technology Industrial Park, a national hi-tech industrial development zone in the PRC, which has been uniquely and professionally implementing the technology research, development and application of sulphur recycling. The provision of technological desulphurization service includes sulphur recovery, desulphurization and waste water treatment. Jiangsu Shengyi mainly derives desulphurization engineering and construction contracts from customers and the contracts normally last for 1-2 years. It is also one of a few companies in Jiangsu Province which owns technology patents and engages in the technology development and application of desulphurization in the chemical industry. The major assets of Jiangsu Shengyi include inventories, cash and receivables. The operation of Jiangsu Shengyi remains relative stable with approximately 100 staffs and generates annual income of approximately RMB15 to 20 million. Revenue of Jiangsu Shengyi is mainly derived from contracts from customers which are engaged in the chemical industry located in the PRC and Jiangsu Shengyi only recognises revenue when

LETTER FROM THE BOARD

the contracts are completed. As at the Latest Practicable Date, there are seven outstanding uncompleted orders on hand not yet recognized, with total contract sum of approximately RMB124.1 million which is expected to be received by installments before 2015. Jiangsu Shengyi will continuously build on its technical research, improve its service quality and enter into new project contracts with enterprises to position itself as one of the most famous companies engaged in desulphurization business in Jiangsu Province. Jiangsu Shengyi also benefits from PRC government support through implementing policies to develop the environmental protection related businesses such as the《十二五節能環保產業發展規劃》 (12th Five Year Plan Energy Saving Environment Protection Industry Development Plan*) and《燃煤發電機組脫硫電價及脫硫設施運行管理辦法》(Coal Electricity Generating Desulphurization Units and Facilities Management Measures).

REASONS FOR THE DISPOSAL AND USE OF PROCEEDS

The Company is an investment holding company. The Group is principally engaged in the manufacture and sales of loudspeaker systems and environmental protection related businesses.

The manufacture and sale of loudspeaker systems of the Group is carried out by the Disposal Group. As mentioned in the interim report of the Company for the six months ended 30 June 2012, the Group faces challenges in its manufacturing and sales of loudspeaker systems business in 2012 in light of the slow US economic recovery, the continuous Euro area debt crisis and the weakening PRC economic growth which have affected market demands as well as the historical high level of raw material and labour costs in the PRC. Based on the unaudited consolidated accounts of the Disposal Group, although the turnover recorded by the Disposal Group has gradually increased from approximately HK$587.6 million for the year ended 31 December 2010 to approximately HK$724.0 million and HK$825.1 million for each of the two years ended 31 December 2012 respectively, the Disposal Group has been suffering decreases in both the gross profit margin and net profits. The net profit after taxation of the Disposal Group has decreased from approximately HK$39.4 million for the year ended 31 December 2010 to approximately HK$15.7 million and HK$3.8 million for each of the two years ended 31 December 2012 respectively. The Disposal Group recorded a net loss attributable to shareholders of approximately HK$4.4 million for the year ended 31 December 2012 as opposed to a net profit attributable to shareholders of approximately HK$16.6 million and HK$7.5 million for each of the two years ended 31 December 2011 respectively. Furthermore, the Disposal Group recorded net current liabilities of approximately HK$3.3 million, HK$32.0 million and HK$81.1 million as at 31 December 2010, 2011 and 2012 respectively which was mainly due to the Sale Loan and short-term bank borrowings.

The PRC government announced in 2011 to support the development of the environmental related industries during China’s 12th Five-Year Plan (2011-2015). With heightened environmental concerns among the PRC government and its citizens, the relevant PRC authorities have promulgated policies with a view to encourage the development of environmental protection related industry. Benefited from the enormous support given by the PRC government towards environmental protection related industry, the Directors are of the view that there are enormous growth opportunities for the environmental protection related businesses of the Group in the future.

In light of the deteriorating financial performance and position of the Disposal Group as described above, the Directors consider that the Disposal allows the Group to devote its resources to the operation of its environmental protection related businesses and to improve the working capital and gearing position of the Group. Upon Completion, the Remaining Group will be principally engaged in environmental protection related businesses. The Directors (excluding the independent non-executive Directors who have expressed their views on the transactions contemplated under the Sale and Purchase Agreement under the section headed “Letter from the Independent Board Committee” of this circular) consider that the terms of the Sale and Purchase Agreement are fair and reasonable and the Disposal is in the interests of the Company and the Shareholders as a whole.

LETTER FROM THE BOARD

The net proceeds from the Disposal (net of expenses) are estimated to be approximately HK$121.3 million. It is intended that out of the net proceeds of the Disposal, (i) approximately HK$29.3 million will be used for repayment of outstanding loans and payables of the Company; (ii) approximately HK$52 million will be used for the development and expansion of the environmental protection related businesses of the Remaining Group as well as investment in relevant environmental protection related businesses should such opportunities arise; and (iii) approximately HK$40 million will be used for general working capital of the Remaining Group. As at the Latest Practicable Date, the Board has not identified any acquisition or investment target or commenced any negotiation or arrangement in this regard.

FINANCIAL EFFECT ON THE DISPOSAL

Upon Completion, the Company will cease to hold any equity interest in the Disposed Company. The Disposed Company and its subsidiaries will cease to be subsidiaries of the Company and the financial information of the Disposal Group will not be consolidated in the accounts of the Company upon Completion.

According to note 3 to the unaudited pro forma financial information of the Remaining Group as set out in Appendix III to this circular, it is estimated that the Group will realize a gain of approximately HK$9.6 million from the Disposal, which is calculated based on the net consideration for disposing the Sale Shares and Sale Loan of approximately HK$121.2 million (after netting off the transaction costs attributable to the Disposal) deducting the equity interests attributable to the unaudited consolidated net asset value of the Disposal Group of approximately HK$100.3 million (which is calculated based on the unaudited net asset value of the Disposal Group of approximately HK$244.6 million less minority interests of approximately HK$144.3 million) as at 31 December 2012 and the unaudited amount of the Sale Loan of approximately HK$34.8 million as at 31 December 2012 and adding back the realisation of reserves upon the Disposal of approximately HK$23.5 million. Shareholders should note that the actual amount of the gain/loss of the Disposal to be recognised in the consolidated financial statements of the Company depends on the net asset value of the Disposal Group as at the Completion Date and therefore may be different from the amount mentioned above.

According to the unaudited pro forma financial information of the Remaining Group as set out in Appendix III to this circular, assuming the Disposal had been completed on 31 December 2012, the Group’s total assets as at 31 December 2012 would decrease from approximately HK$1,060.0 million to approximately HK$415.1 million and total liabilities of the Group as at 31 December 2012 would decrease from approximately HK$758.9 million to approximately HK$272.2 million. The net assets of the Group as at 31 December 2012 would decrease from approximately HK$301.1 million to approximately HK$142.9 million.

According to the unaudited pro forma financial information of the Remaining Group as set out in Appendix III to this circular, assuming the Disposal had been completed on 1 January 2012, the Group’s profit after tax for the year ended 31 December 2012 would decrease from approximately HK$3.9 million to approximately HK$3.3 million.

LETTER FROM THE BOARD

IMPLICATION UNDER THE GEM LISTING RULES

As the applicable percentage ratio (as defined under the GEM Listing Rules) in respect of the Disposal under Rule 19.07 of the GEM Listing Rules exceeds 75%, the Disposal constitutes a very substantial disposal for the Company under Chapter 19 of the GEM Listing Rules which is subject to the reporting, announcement and shareholders’ approval requirements.

As the Purchaser is a company wholly-owned by Mr. Yang who is a former director of the Company within the preceding 12 months, the Purchaser is an associate of Mr. Yang and therefore a connected person of the Company under the GEM Listing Rules. Therefore, the Disposal also constitutes a connected transaction for the Company which is subject to reporting, announcement and independent shareholders’ approval requirements under Chapter 20 of the GEM Listing Rules. Accordingly, Mr. Yang and his associates will be required to abstain from voting in respect of the ordinary resolution approving the Sale and Purchase Agreement and the transactions contemplated thereunder at the EGM. To the best of the Directors’ knowledge, information and belief and having made all reasonable enquiries, save for Mr. Yang and his associates, no Shareholder is required to abstain from voting on the ordinary resolution approving the Sale and Purchase Agreement and the transactions contemplated thereunder at the EGM. None of the Directors have a material interest in the Disposal and have abstained from voting on the board resolution approving the Sale and Purchase Agreement and the transactions contemplated thereunder.

As at the Latest Practicable Date, to the best of the Directors’ knowledge, information and belief and having made all reasonable enquiries, Mr. Yang and his associates did not hold any Shares. If Mr. Yang and his associates (to the extent where they are Shareholders) hold any shares as at the date of the EGM, they are required to abstain from voting in respect of the ordinary resolution approving the Sale and Purchase Agreement and the transactions contemplated thereunder at the EGM.

GENERAL

The Independent Board Committee, comprising all the independent non-executive Directors, has been established to consider the terms of the Sale and Purchase Agreement and advise the Independent Shareholders as to whether the terms of the Sale and Purchase Agreement are fair and reasonable and the Disposal is in the interests of the Company and the Shareholders as a whole. Vinco Capital has been appointed to advise the Independent Board Committee and the Independent Shareholders in this regard.

EGM

The EGM will be held at Units 01-03, 28th Floor, Shui On Centre, 6-8 Harbour Road, Wanchai, Hong Kong on Thursday, 18 July 2013 at 10:00 a.m.. The notice of the EGM is set out on pages 82 to 83 of this circular. The purpose of the EGM is to consider and, if thought fit, to approve the Sale and Purchase Agreement and the transactions contemplated thereunder. Any vote exercised by the Independent Shareholders at the EGM shall be taken by way of poll.

LETTER FROM THE BOARD

A form of proxy for the EGM is enclosed with this circular. Whether or not you are able to attend the EGM, please complete the enclosed form of proxy in accordance with the instructions printed thereon and return the same to the Company’s Hong Kong branch share registrar and transfer office, Union Registrars Limited, at 18th Floor, Fook Lee Commercial Centre, Town Place, 33 Lockhart Road, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the EGM or any adjourned meeting. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or at any adjourned meeting thereof should you so wish.

RECOMMENDATION

Your attention is drawn to the letter from the Independent Board Committee set out on page 20 of this circular which contains its recommendation to the Independent Shareholders on the terms of the Sale and Purchase Agreement and the transactions contemplated thereunder. Your attention is also drawn to the letter of advice from Vinco Capital set out on pages 21 to 35 of this circular which contains, amongst other matters, its advices to the Independent Board Committee and the Independent Shareholders in relation to the terms of the Sale and Purchase Agreement and the transactions contemplated thereunder.

The Directors (other than the independent non-executive Directors who have expressed their views on the transactions contemplated under the Sale and Purchase Agreement in this circular after receiving advice from Vinco Capital) consider that the terms of the Sale and Purchase Agreement are fair and reasonable and the Disposal is in the interests of the Company and the Shareholders as a whole, and accordingly recommend the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM to approve the Sale and Purchase Agreement and the transactions contemplated thereunder.

ADDITIONAL INFORMATION

Your attention is also drawn to the additional information set out in the appendices to this circular.

Yours faithfully, By Order of the Board Sunrise (China) Technology Group Limited Shan Xiaochang Chairman

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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(incorporated in the Cayman Islands with limited liability) (Stock Code: 8226)

28 June 2013

To the Independent Shareholders

Dear Sir or Madam,

VERY SUBSTANTIAL DISPOSAL AND CONNECTED TRANSACTION IN RELATION TO THE DISPOSAL OF THE ENTIRE INTERESTS OF A WHOLLY-OWNED SUBSIDIARY

We refer to the circular (the “ Circular ”) dated 28 June 2013 issued by the Company of which this letter forms part. Capitalised terms used in this letter shall have the same meanings as those defined in the Circular unless the context requires otherwise.

We have been formed to advise you in connection with the Sale and Purchase Agreement and the transactions contemplated thereunder and to advise you as to whether, in our opinion, the terms of the Sale and Purchase Agreement and the transactions contemplated thereunder are fair and reasonable so far as the Independent Shareholders are concerned. Details of the Sale and Purchase Agreement and the transactions contemplated thereunder are set out in the ‘‘Letter from the Board’’ contained in the Circular. Vinco Capital has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the terms of the Sale and Purchase Agreement and the transactions contemplated thereunder. Details of its advice and the principal factors taken into consideration in arriving at its recommendations are set out in the ‘‘Letter from Vinco Capital’’ contained in the Circular.

Having considered the terms of the Sale and Purchase Agreement and taking into account the advice from Vinco Capital , we are of the opinion that the terms of the Sale and Purchase Agreement are on normal commercial terms, fair and reasonable so far as the Independent Shareholders are concerned and the Disposal is in the interest of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM to approve the Sale and Purchase Agreement and the transactions contemplated thereunder.

Yours faithfully

Independent Board Committee of

Sunrise (China) Technology Group Limited

Mr. Wang Jialian Independent non-executive Director

Mr. Wang Zhihua Ms. Chan Sze Man Independent non-executive Independent non-executive Director Director

LETTER FROM VINCO CAPITAL

The following is the text of a letter of advice from Vinco Capital to the Independent Board Committee and the Independent Shareholders in connection with the terms of the Sale and Purchase Agreement and the transactions contemplated thereunder which has been prepared for the purpose of incorporation in this circular.

Grand Vinco Capital Limited Units 4909-4910, 49/F, The Center 99 Queen’s Road Central, Hong Kong

28 June 2013

To the Independent Board Committee and the Independent Shareholders of Sunrise (China) Technology Group Limited

Dear Sirs,

VERY SUBSTANTIAL DISPOSAL AND CONNECTED TRANSACTION IN RELATION TO THE DISPOSAL OF THE ENTIRE INTERESTS OF A WHOLLY-OWNED SUBSIDIARY

A. INTRODUCTION

We refer to our engagement as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in connection with the terms of the Sale and Purchase Agreement and the transactions contemplated thereunder, details of which are set out in the section headed “Letter from the Board” in the circular (“Circular”) issued by the Company to the Shareholders dated 28 June 2013 of which this letter forms part. Capitalized terms used in this letter shall have the same meanings ascribed to them in the Circular unless the context otherwise requires.

On 2 May 2013 (after trading hours of the Stock Exchange), the Company and the Purchaser entered into the Sale and Purchase Agreement, pursuant to which the Company conditionally agreed to dispose of the Sale Shares and the Sale Loan to the Purchaser and the Purchaser conditionally agreed to acquire the Sale Shares and the Sale Loan from the Company at an aggregate consideration of HK$122,000,000 which are satisfied in cash.

As the Purchaser is a company wholly owned by Mr. Yang who is a former director of the Company within the preceding 12 months, the Purchaser is an associate of Mr. Yang and therefore a connected person of the Company under the GEM Listing Rules. Therefore, the Disposal also constitutes a connected transaction for the Company which is subject to reporting, announcement and independent shareholders’ approval requirements under Chapter 20 of the GEM Listing Rules. Accordingly, Mr. Yang and his associates will be required to abstain from voting in respect of the resolution(s) approving the Sale and Purchase Agreement and the transactions contemplated thereunder at the EGM.

LETTER FROM VINCO CAPITAL

The Independent Board Committee, comprising Mr. Wang Jialian, Mr. Wang Zhihua and Ms. Chan Sze Man, all being the independent non-executive Directors, has been formed to advise the Independent Shareholders on the terms of the Sale and Purchase Agreement and the transactions contemplated thereunder. We have been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the terms of the Sale and Purchase Agreement and the transactions contemplated thereunder. In our capacity as the independent financial adviser to the Independent Board Committee and the Independent Shareholders for the purposes of the GEM Listing Rules, our role is to give you an independent opinion as to whether the terms of the Sale and Purchase Agreement and the transactions contemplated thereunder are on normal commercial terms, in the ordinary and usual course of business, fair and reasonable and in the interests of the Company and the Shareholders as a whole and whether the Independent Shareholders should vote in favour of the resolution to be proposed at the EGM to approve the Sale and Purchase Agreement and the transactions contemplated thereunder.

B. BASIS OF OUR OPINION AND RECOMMENDATION

In forming our opinion and recommendation, we have relied on the information, facts and representations contained or referred to in the Circular and the information, facts and representations provided by, and the opinions expressed by the Directors, management of the Company and its subsidiaries. We have assumed that all information, facts, opinions and representations made or referred to in the Circular were true, accurate and complete at the time they were made and continued to be true, accurate and complete as at the date of the Circular and that all expectations and intentions of the Directors, management of the Company and its subsidiaries, will be met or carried out as the case may be. We have no reason to doubt the truth, accuracy and completeness of the information, facts, opinions and representations provided to us by the Directors, management of the Company and its subsidiaries. The Directors have confirmed to us that no material facts have been omitted from the information supplied and opinions expressed. We have no reason to doubt that any relevant material facts have been withheld or omitted from the information provided and referred to in the Circular or the reasonableness of the opinions and representations provided to us by the Directors, management of the Company and its subsidiaries.

The Directors jointly and severally accept full responsibility for the accuracy of the information contained in the Circular and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in the Circular have been arrived at after due and careful consideration and there are no other facts not contained in the Circular, the omission of which would make any statement in the Circular misleading.

We have relied on such information and opinions and have not, however, conducted any independent verification of the information provided, nor have we carried out any independent investigation into the business, financial conditions and affairs of the Group or its future prospects.

LETTER FROM VINCO CAPITAL

Based on the foregoing, we confirm that we have taken all reasonable steps, which are applicable to the Sale and Purchase Agreement and the transactions contemplated thereunder, as referred to in Rule 17.92 of the GEM Listing Rules (including the notes thereto).

This letter is issued for the information for the Independent Board Committee and the Independent Shareholders solely in connection with their consideration of the terms of the Sale and Purchase Agreement and the transactions contemplated thereunder, except for its inclusion in the Circular, is not to be quoted or referred to, in whole or in part, nor shall this letter be used for any other purposes, without our prior written consent.

C. PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion and recommendation to the Independent Board Committee and the Independent Shareholders in relation to the terms of the Sale and Purchase Agreement and the transactions contemplated thereunder, we have considered the principal factors and reasons set out below:

1. Historical financial performance of the Group

The Company is an investment holding company. The principal business activities of the Group are manufacture and sales of loudspeaker systems to customers in the PRC and overseas markets, and environmental technology related businesses.

Set out below is a summary of the financial information on the Group as extracted from the annual reports of the Company for each of the three years ended 31 December 2012:

	For the year	For the year
	ended 31	December
	2012	2011	2010
	HK$’000	HK$’000	HK$’000
	(Audited)	(Audited)	(Audited)
Turnover	875,577	724,008	587,562
Loss attributable to owners of the
Company	(2,971)	(49,780)	(77,907)
	As at 31 December
	2012	2011	2010
	HK$’000	HK$’000	HK$’000
	(Audited)	(Audited)	(Audited)
Total assets	1,059,978	844,032	639,741
Total liabilities	758,924	562,529	361,463
Equity attributable to owners of the
Company	128,109	128,106	151,170
Cash and cash equivalents	93,822	121,505	74,788

LETTER FROM VINCO CAPITAL

Audited consolidated results for the year ended 31 December 2011

As disclosed in the annual report of the Company for the year ended 31 December 2011 (the “Annual Report 2011”), the Group recorded an increase in turnover of approximately HK$724 million for the year ended 31 December 2011 from approximately HK$587.6 million for the year ended 31 December 2010, representing an increase of approximately 23.2%. The increase in overall sales is primarily attributable to the continual growth of the automobile market. During the year ended 31 December 2011, sales of loudspeaker systems for automobiles increased by 24.2% to approximately HK$701.7 million (2010: HK$565.2 million), while the Group recorded sales of loudspeaker systems for home theatres of approximately HK$22.3 million (2010: HK$22.4 million). As shown in the Annual Report 2011, the Group’s environmental technology related business had yet to generate revenue for the Group.

The loss attributable to owners of the Company decreased by approximately 36.1%, from approximately HK$77.9 million for the year ended 31 December 2010 to approximately HK$49.8 million for the year ended 31 December 2011. Such decrease in loss was mainly due to the decrease in loss in fair value losses on derivative financial instruments from approximately HK$74.3 million in financial year 2010 to approximately HK$13.2 million in financial year 2011.

Audited consolidated results for the year ended 31 December 2012

As disclosed in the annual report of the Company for the year ended 31 December 2012 (the “Annual Report 2012”), the Group recorded a turnover of approximately HK$875.6 million, representing an increase of approximately 20.9% as compared to that of the previous year. The increase in Group’s turnover was mainly attributable to the increase in revenue in both loudspeaker systems and environmental protection related segments. For the year ended 31 December 2012, the sales of loudspeaker systems increased by approximately 14.0% to approximately HK$825.1 million. The environmental protection related business has started to contribute to the Group’s revenue, amounting to approximately HK$50.5 million for the year ended 31 December 2012.

According to the Annual Report 2012, the loss attributable to owners of the Company decreased from approximately HK$49.8 million for the year ended 31 December 2011 to approximately HK$3.0 million for the year ended 31 December 2012, representing a decrease of approximately 94.0%. Such significant decrease in loss of the Group was mainly due to the fact that (i) the Group’s gross profit ratio has increased to approximately 21.2% for the year ended 31 December 2012 from approximately 20.5% in the financial year 2011 and (ii) the fair value gain of derivative financial instrument of approximately HK$22.5 million recognised by the Company in respect of the convertible loan notes and the unlisted warrants issued by the Company as compared to a fair value loss recognised of approximately of HK$13.2 million last financial year.

LETTER FROM VINCO CAPITAL

2. Information on and the historical financial performance of the Disposal Group

Set out below is a summary of the unaudited consolidated financial information of the Disposal Group prepared in accordance with Hong Kong financial Reporting Standards for the three years ended 31 December 2012 as extracted from Appendix I of the Circular:

	For the year	For the year
	ended 31	December
	2012	2011	2010
	HK$’000	HK$’000	HK$’000
	(Unaudited)	(Unaudited)	(Unaudited)
Turnover	825,054	724,008	587,562
Profit/(Loss) attributable to owners
of the Company	(4,444)	7,499	16,604
	As at 31	December
	2012	2011	2010
	HK$’000	HK$’000	HK$’000
	(Unaudited)	(Unaudited)	(Unaudited)
Total assets	766,132	759,670	613,281
Total liabilities	521,563	512,396	394,096
Net Current Liabilities	(81,107)	(31,985)	(3,283)
Equity attributable to owners of the Company	100,262	101,781	92,077
Cash and cash equivalents	90,092	116,208	49,940

Audited consolidated results for the year ended 31 December 2011

From the table above, the Disposal Group recorded an increase in turnover of approximately HK$724 million for the year ended 31 December 2011 from approximately HK$587.6 million for the year ended 31 December 2010, representing an increase of approximately 23.2%. The increase in overall sales is primarily attributable to the continual growth of the automobile market. During the year ended 31 December 2011, sales of loudspeaker systems for automobiles increased by 24.2% to approximately HK$701.7 million (2010: HK$565.2 million), while the Group recorded sales of loudspeaker systems for home theatres of approximately HK$22.3 million (2010: HK$22.4 million).

LETTER FROM VINCO CAPITAL

However, the profit attributable to owners of the Company decreased by approximately 54.8%, from approximately HK$16.6 million for the year ended 31 December 2010 to approximately HK$7.5 million for the year ended 31 December 2011. Such decrease in loss was mainly due to (i) decrease in gross profit margin by approximately 5.5% to approximately 20.4% for the year ended 31 December 2011 and (ii) the increase in finance costs.

Audited consolidated results for the year ended 31 December 2012

From the table above, the Disposal Group recorded a turnover of approximately HK$825.1 million, representing an increase of approximately 14.0% as compared to that of the previous year. The increase in Group’s turnover was mainly attributable to the continual growth of automobile market which increase the demand for loudspeaker systems used in automobiles.

Despite the increase in revenue, the Disposal Group recorded loss of approximately HK$4.4 million for the year ended 31 December 2012. The turning from profit to loss making for the Disposal Group was mainly due to the increase in administrative expenses, raw materials price and technical development costs of approximately 48.6% for the year ended 31 December 2012 as compared with the respective period in 2011.

3. Reasons for the Disposal and use of proceeds

As advised by the Directors, around 97% of the revenue of the Disposal Group are derived from the sales of loudspeaker systems for automobiles in China, which are therefore largely dependent on the prospect of automobiles manufacturing industry in China. However, the growth rate on automobiles productions experienced a downward trend. According to annual surveys conducted by Organisation Internationale des. Constructeurs d’Automobiles (“OICA”), an organisation which comprises of 35 national trade associations around the world, including all major automobile manufacturing countries in Europe, America and Asia, the growth rate on production of automobiles in China in 2011 and 2012 were approximately 0.8% and 4.6% respectively, of which had experienced a slowdown of production of automobiles when compared to a growth rate of approximately 32.4% in 2010. The slowing down of the automobiles manufacturing in China may lead to the decrease in the demand for loud speaker systems for automobiles. In addition, as stated in the Letter from the Board, the Group faces challenges in manufacturing and sales of loudspeaker systems business in light of the slow US economic recovery, the continuous Euro area debt crisis and the weakening PRC economic growth which have affected market demands as well as the historical high level of raw material and labour costs in the PRC.

As discussed in the above section headed “Information on and the historical financial performance of the Disposal Group”, the financial performance of the Disposal Group is deteriorating. The Disposal Group recorded a net loss attributable to shareholders of approximately HK$4.4 million for the year ended 31 December 2012 as opposed to a net profit attributable to shareholders of approximately HK$16.6 million and HK$7.5 million for each of the two years ended 31 December 2011 respectively. Furthermore, the Disposal Group recorded net current liabilities of approximately HK$3.3 million, HK$32.0 million and HK$81.1 million as at 31 December 2010, 2011 and 2012 respectively which was mainly due to the Sale Loan and short-term bank borrowings.

LETTER FROM VINCO CAPITAL

As stated in the Letter from the Board, the net proceeds from the Disposal (net of expenses) are estimated to be approximately HK$121.3 million. It is intended that out of the net proceeds of the Disposal, (i) approximately HK$29.3 million will be used for repayment of outstanding loans and payables of the Company; (ii) approximately HK$52 million will be used for the development and expansion of the environmental protection related businesses of the Remaining Group as well as investment in suitable investment opportunities should such opportunities arise; and (iii) approximately HK$40 million will be used for general working capital of the Remaining Group. As at the Latest Practicable Date, the Board has not identified any acquisition or investment target or commenced any negotiation or arrangement in this regard.

We noted that approximately 42.9% of the net proceeds will be used as development and expansion of the environmental protection related businesses. Through our discussion with the Directors, we are given to understand that they are of the view that the prospect of environmental protection related businesses in China is positive as the PRC government will support the development of the environmental related industries as announced in the 12th Five-Year Plan in 2011.

According to chapter 24 of the 12th Five-Year Plan, the PRC government plans to enhance environmental protection intensity by prioritising solutions to air and land contamination which adversely affect people’s health, promoting the governance of emission of sulfur dioxide and nitrogen oxides and strengthening desulfurisation and denitrification facilities. Further, the PRC government will develop new strategic industries energetically such as energy conservation and environmental protection industries and new energy industry by promoting the industrialization of efficient energy conservation, advanced environmental protection and implementing exemplary large-scale application projects on biomass energy according to chapter 10 of the 12th FiveYear Plan. Based on the above, we and the Directors are of the view that the prospect of the environmental protection related business in China is positive.

As stated in the Letter from the Board, the Remaining Group has been granted annual subsidy based on its annual sales offered by Ministry of Finance of the State Council of the PRC to support the Heilongjiang Shengyan’s straw integrated utilization business. Based on our discussion with the Directors, and the audited profit and loss account of the Heilongjiang Shengyan for the year ended 31 December 2011 and the settlement record of the government subsidy reviewed by us, we noted that the operating profit of Heilongjiang Shengyan would record a loss of approximately RMB2.5 million without the subsidy income granted by the PRC government of approximately RMB3.2 million. However, according to the management accounts of the Heilongjiang Shengyan for the year ended 31 December 2012, approximately RMB9 million profit was recorded and the subsidy income for the financial year 2011 of approximately RMB18.8 million was not booked into the profits of the Heilongjiang Shengyan for the year ended 31 December 2012. Based on the aforesaid, we are of the view that, despite the short operating history since establishment in 2010, the Heilongjiang Shengyan is able to generate profit without receiving any subsidy income in 2012. Therefore, we are of the view that Heilongjiang Shengyan’s reliance on the annual subsidy is reducing and is able to generate profits under its usual course of business.

LETTER FROM VINCO CAPITAL

After our discussion with the Directors, we understand that the Helilongjiang Shengyan is the largest manufacturer of straw fuel briquettes in Heilongjiang Province while Heilonjiang Province has the largest straw fuel briquettes supplies in the PRC. In addition, according to 12th Five Year Plan–Implementation Plan for Straw Integrated Utilization, the PRC government intends to improve the straw integrated utilization rate to 80% by 2015. Using straw as an energy resources is one of the strategies to improve the straw integrated utilization rate. Given that (i) the PRC government intends to improve straw integrated utilization and (ii) Heilongjiang Province is the largest supplier of straw fuel briquettes, we are of the view that straw fuel briquettes business in Heilongjiang Province is positive. As Heilongjiang Shengyan is the largest straw briquettes manufacturer in Heilongjiang Province, therefore we and the Directors are of the view that with the support from the PRC government, the prospect of the Heilongjiang Shengyan is positive.

As stated in the Letter from the Board, Jiangsu Shengyi was established in 2007 and was acquired in September 2011. The Jiangsu Shengyi has started to contribute revenue in financial year 2012 and have seven outstanding contracts with total contract sum of approximately RMB124.1 million on hand to be completed. After our discussion with the Directors and performed desktop research regarding air contamination in China, we noted that China especially in Beijing and Shanghai has serious air contamination recently. Such air contamination has become a political issues for the PRC government. It is widely accepted that the PRC government may aim to reduce the air pollution levels. As Jiangsu Shengyi is engaged in providing technological desulphurization services which can reduce the air contaminants to be emitted for the customers in chemical industry, we are of the view that Jiangsu Shengyi may benefit from it. Based on the aforesaid, we and the Directors are of the view that the Jiangsu Shengyi may has stable demand for its provision of technological desulphurization services.

We noted that, upon the completion of the Disposal, the Remaining Group would result in a change in business focus of the Company. However, given that the financial performance and position of the Disposal Group is deteriorating and would no longer consolidated into the Remaining Group which affect the profitability and financial position of the Remaining Group and the proceeds from the Disposal enable the Remaining Group to focus on environmental protection business that are more promising than automobiles loudspeaker systems business as the automobiles manufacturing in the PRC experienced slowdown in recent years, we are of the view that the Disposal is in the interest of Shareholders and the Company as a whole.

Given that the (i) slowdown of the automobiles production industry and the economic growth in PRC will affect the demand for loudspeaker systems, (ii) historical high level of raw materials and labour costs in PRC which will affect the profit margins of the loudspeakers systems business, (iii) the deteriorating financial performance and position of the Disposal Group, (iv) the Disposal can allow the Group to devote more resources to its environmental protection related business and (v) the positive outlook on the prospect of the environmental protection industry in China which will be the major business focus of the Remaining Group, we are of the view that the Disposal is in the interest of the Company and the Shareholders as a whole.

LETTER FROM VINCO CAPITAL

4. Terms and conditions of the Sale and Purchase Agreement

Asset to be disposed of

Pursuant to the Sale and Purchase Agreement, the Purchaser has conditionally agreed to acquire, and the Company has conditionally agreed to sell, the Sale Shares and the Sale Loan. The Sale Shares represents the entire issued share capital of the Disposed Company. The Sale Loan represents the amount owing by the Disposed Company to the Company as at Completion. As at 31 December 2012, the Sale Loan amounted to HK$34,795,000 and such loan is unsecured, carries no interest and has no fixed term of repayment. Upon Completion, the Disposal Group will cease to be subsidiaries of the Company.

The Consideration & payment method

The Consideration for the Sale Shares and the Sale Loan is approximately HK$122,000,000 which shall be payable by the Purchaser in cash in the following manner:

(a) a sum of HK$5,000,000, being the refundable deposit and part of the Consideration, which shall be paid by the Purchaser to the Company on or before 31 May 2013;
(b) a sum of HK$40,000,000, being the refundable deposit and part of the Consideration, which shall be paid by the Purchaser to the Company on or before 14 June 2013;
(c) a sum of HK$50,000,000, being the refundable deposit and part of the Consideration, which shall be paid by the Purchaser to the Company within 10 Business Days after the despatch of the Circular; and
(d) the remaining HK$27,000,000 shall be payable by the Purchaser to the Company upon Completion.

LETTER FROM VINCO CAPITAL

Conditions of the Sale and Purchase Agreement

Completion of the Sale and Purchase Agreement shall be conditional upon and subject

to:

(a) the Purchaser being satisfied with the results of the due diligence review to be conducted on the Disposal Group;
(b) all necessary consents and approvals required to be obtained on the part of the Company in respect of the Sale and Purchase Agreement and the transactions contemplated thereby having been obtained;
(c) all necessary consents and approvals required to be obtained on the part of the Purchaser in respect of the Sale and Purchase Agreement and the transactions contemplated thereby having been obtained;
(d) the passing by the Independent Shareholders at the EGM approving the Sale and Purchase Agreement and the transactions contemplated thereunder;
(e) if applicable, all the net debts due from the Disposal Group to the Remaining Group and vice versa, other than the Sale Loan which will be assigned by the Company at Completion, having been settled or waived in full;
(f) the representations, warranties and undertakings given under the Sale and Purchase Agreement remain true and accurate in all respects.

Basis on the Consideration

As stated in the Letter from the Board, the Consideration was determined after arm’s length negotiations between the Purchaser and the Company with reference to (i) the equity interests attributable to the unaudited consolidated net asset value of the Disposal Group of approximately HK$100,262,000 (which is calculated based on the unaudited net asset value of the Disposal Group of approximately HK$244,569,000 less minority interests of approximately HK$144,307,000) as at 31 December 2012; (ii) the unaudited amount of the Sale Loan of approximately HK$34,795,000 as at 31 December 2012; and (iii) approximately 9.7% discount to the sum of the equity interests attributable to the unaudited consolidated net asset value of the Disposal Group and the unaudited amount of the Sale Loan as at 31 December 2012 amounting to approximately HK$135,057,000 in aggregate.

LETTER FROM VINCO CAPITAL

Comparables analysis

In assessing the fairness and reasonableness of the Consideration, it is a general practice to apply commonly used benchmarks for evaluating the value of companies. We have considered applying the price-to-earnings ratios (the “P/E ratio(s)”) and the price-to book ratios (the “P/B ratio(s)”) in our analysis. Given that the Disposal Group recorded loss attributable to shareholders for the financial year ended 31 December 2012, we consider the analysis of P/E ratio not applicable. We have searched for comparable companies listed on the Stock Exchange which are primary engaged in businesses similar to those of the Disposal Group. We identified 3 comparable companies (the “Comparables”), all of which are (i) listed on the Stock Exchange and (ii) principally engaged in the manufacture or sale of electronic products which include, among others, loudspeakers or acoustic products. The list is exhaustive and we consider the Comparables are fair and representative comparables to the Company. Shareholders should note that the business, operation and prospect of the Company are not exactly the same as the Comparables and we have not conducted any in-depth investigation into the business and operations of the Comparables save for the aforesaid selection criteria. Nevertheless, the Comparables can still be a meaningful reference in assessing the fairness and reasonableness of the Consideration. The market capitalisations and hence the P/B ratios of the Comparables are based on the respective share prices and the total issued shares of the Comparables on 30 April 2012, being the last trading day prior to the date of entering the Sale and Purchase Agreement (the “Last Trading Day”). Our relevant finding is summarised in the table below.

LETTER FROM VINCO CAPITAL

				Net assets
			Market	value
			Capitalisation	attributable
	Stock		as at Last	to the
Company	code	Principal activities	Trading Day	shareholders	P/B ratio
			(HK$’000)	(HK$’000)
				(Note 1)	(Note 2)
Gold Peak	40	Development,manufacture and distribution	674,836	1,546,050	0.44
Industries		of batteries, electrical installation
(Holdings)		products, automotive electronics,
Limited		specialty electronics, parts and
		components, wire harness and
		cables, loudspeakers and LED display
Fujikon	927	Design, manufature, marketing and trading	1,225,580	773,190	1.59
Industrial		of electro-acoustic products and
Holdings		accessories, and other electronic products
Limited
Shinhint	2728	Sale of communication products, multimedia	125,403	255,574	0.49
Acoustic		products, entertainment products and
Link		others which mainly consists of unit
Holdings		speaker drivers, complete acoustics
Limited		solutions and open models
				Min	0.44
				Max	1.59
				Average	0.84
		The Disposal Group	122,000	100,262	1.22
			(Note 3)		(Note 4)

Sources: The Stock Exchange

Notes:

(1) Based on the latest financial data as published in the respective annual/interim results by the Last Trading Day.

(2) P/B ratios of the Comparables are calculated based on their respective market capitalisation as at the Last Trading Day divided by the net asset value attributable to owners of the Comparables as extracted from their respective latest annual/interim reports. (3) The Consideration has been used as the implied market capitalisation of the Disposal Group.

(4) The implied P/B ratio of the Company is calculated as the Consideration divided by the net asset value attributable to the shareholders of the Disposal Group.

LETTER FROM VINCO CAPITAL

As illustrated in the above, the P/B ratios of the Comparables ranged from approximately 0.44 times to approximately 1.59 times. The average of the P/B ratios of the Comparables is approximately 0.84 times. The implied P/B ratio of the Disposed Group, based on the Consideration, are approximately 1.22 times, which are within the range of the Comparables’ P/B ratios and higher than the average of the P/B ratios of the Comparables. As such, we consider the Consideration, with reference to the above implied P/B ratio, is fair and reasonable given the current market valuation and pricing of shares on the other listed companies in the industry.

We note that the Consideration represents approximately 9.7% discount to the sum of the equity interests attributable to the unaudited consolidated net asset value of the Disposal Group and the unaudited amount of the Sale Loan as at 31 December 2012 amounting to approximately HK$135,057,000 in aggregate. Given that (i) the deteriorating financial performance of the Disposal Group, (ii) the challenges faced by the Disposal Group on the rising raw materials costs and labour costs and (iii) the implied P/B ratio on the Consideration is higher than that of the Comparables, we are of the view that the Consideration is fair and reasonable and in the interest of the Company and its Shareholders as a whole.

5. Financial Effect on the Disposal

The following analysis is based on the audited consolidated financial statements of the Company for the financial year ended 31 December 2012 and the unaudited pro forma consolidated statements of the Remaining Group as set out in Appendix II to this Circular.

The unaudited pro forma consolidated statement of financial position of the Remaining Group after the Disposal has been prepared based on the audited consolidated statement of financial position of the Group as at 31 December 2012, as extracted from the published annual report of the Company for the year ended 31 December 2012, after making pro forma adjustments relating to the Disposal, as if the Disposal had been completed on 31 December 2012.

The unaudited pro forma consolidated statement of comprehensive income and the unaudited pro forma consolidated statement of cash flows of the Remaining Group after the Disposal have been prepared based on the audited consolidated statement of comprehensive income and the audited consolidated statement of cash flows of the Group for the year ended 31 December 2012, as extracted from the published annual report of the Company for the year ended 31 December 2012, after making pro forma adjustments relating to the Disposal, as if the Disposal had been completed on 1 January 2012.

Independent Shareholders should note that the unaudited pro forma financial information of the Remaining Group has been prepared for illustrative purposes only and it may not give a true picture of the results, cash flow and financial position of the Group upon Disposal or at any future date.

LETTER FROM VINCO CAPITAL

Unaudited pro forma consolidated financial information of the Remaining Group

Tabularised below is a summary of the unaudited pro forma consolidated financial information of the Remaining Group as extracted from the unaudited pro forma consolidated statements of the Remaining Group as set out in Appendix II to this Circular:

(HK$’000)	For the year ended 31 December 2012
Revenue	50,523
Profit for the year	3,292
(HK$’000)	As at 31 December 2012
Total assets	415,094
Cash and cash equivalents	124,978
Total Liabilities	272,156
Net Current Assets	47,679
Total equity	142,938
Equity attributable to equity holders
of the Company	114,300

Effects on revenues and earnings

For the year ended 31 December 2012, the Group recorded an audited revenue and profit for the year of approximately HK$875.6 million and approximately HK$3.9 million respectively. As shown above, had the Disposal been completed on 1 January 2012, the revenue and the profit for the year would have been approximately HK$50.5 million and approximately HK$3.3 million respectively. The revenue represents a decrease of approximately 94.2% which was mainly due to the decreased income base of the Remaining Group from the Disposal. The profit for the year represents a decrease of approximately 15.7%.

Effects on asset to liabilities ratio and liquidity

As at 31 December 2012, the audited total assets and total liabilities of the Group amounted to approximately HK$1,060.0 million and approximately HK$758.9 million respectively. As shown above, had the Disposal been completed on 31 December 2012, the total assets and total liabilities of the Remaining Group under the Disposal would have been HK$415.1 million and HK$272.2 million, respectively, representing an increase in the assets to liabilities ratio from approximately 139.7% to approximately 152.5% with an increase of approximately 12.8%. The increasing asset to liabilities ratio after the Disposal would also lead to the improvement of liquidity on the Remaining Group. Had the Disposal been completed on 31 December 2012, the working capital of the Remaining Group would be approximately HK$47.7 million, representing an increase of approximately HK$167.6 million from the negative working capital for the Group as at 31 December 2012. Such improvement in liquidity was due to (i) the substantial decrease in short term bank borrowings bared by the Disposal Group and (ii) the Consideration received was recorded as current assets which led to the increase cash and cash equivalents.

LETTER FROM VINCO CAPITAL

Although the Disposal reduced the revenue and hence net profit of the Remaining Group, the financial position of the Remaining Group has improved with the improving assets to liabilities ratio and working capital based on the unaudited pro forma financial information of the Remaining Group.

We observed that the revenue and net assets of the Remaining Group accounted for approximately 5.8% and 47.5% of those of the Group based on the unaudited pro forma financial information for the year ended 31 December 2012. Despite the drop in revenue for the year ended 31 December 2012 upon the completion of the Disposal, the net profit after tax of Remaining Group accounted for approximately 84.3% of those of the Group with the gain on Disposal of approximately HK$3.2 million. Therefore, we consider that the drop in revenue may not seriously affect the profitability of the Remaining Group based on unaudited pro forma financial information for the year ended 31 December 2012. Despite the decrease in net assets values after the Disposal, the Remaining Group has better financial position than those of the Group as the assets to liabilities ratio improved and net current assets was recorded based on unaudited pro forma financial information for the year ended 31 December 2012. Based on the aforesaid, we consider that the decrease in net assets values is justifiable.

D. CONCLUSION

Having taken into account the above principal factors and reasons, we are of the view that the Sale and Purchase Agreement and the transactions contemplated thereunder is on normal commercial terms, is in the ordinary and usual course of business of the Company. The terms of the Sale and Purchase Agreement and the transactions contemplated thereunder are fair and reasonable and are in the interest of the Company and Shareholders as a whole. Therefore, we advise (i) the Independent Shareholders and, (ii) the Independent Board Committee to recommend the Independent Shareholders, to vote in favour of the ordinary resolution to be proposed at the EGM to approve the Sale and Purchase Agreement and the transactions contemplated thereunder.

Yours faithfully, For and on behalf of Grand Vinco Capital Limited Alister Chung Managing Director

FINANCIAL INFORMATION OF THE DISPOSAL GROUP

APPENDIX I

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REPORT ON REVIEW OF UNAUDITED CONSOLIDATED FINANCIAL INFORMATION

TO THE BOARD OF DIRECTORS OF SUNRISE (CHINA) TECHNOLOGY GROUP LIMITED

Introduction

We have reviewed the unaudited consolidated financial information of Taraki Inc., (the “Disposed Company”) and its subsidiaries (collectively referred to as the “Disposal Group”) set out on pages 38 to 43, which comprises the unaudited consolidated statements of financial position as at 31 December 2010, 2011, 2012, and the related unaudited consolidated statements of comprehensive income, unaudited consolidated statements of changes in equity and unaudited consolidated statements of cash flows for each of the years then ended and certain explanatory notes (altogether the “Unaudited Consolidated Financial Information”). The Unaudited Consolidated Financial Information has been prepared solely for the purpose of inclusion in the circular to be issued by Sunrise (China) Technology Group Limited (the “Company”) in connection with disposal of the entire interest in the Disposed Company and the loans owing by the Disposal Group to the Company in accordance with paragraph 68(2)(a)(i)(A) of Chapter 19 of the Rules Governing the Listing of Securities on the Growth-Enterprise Market of The Stock Exchange of Hong Kong Limited (“the GEM Listing Rules”).

The directors of the Company are responsible for the preparation and presentation of the Unaudited Consolidated Financial Information of the Disposal Group in accordance with the basis of preparation set out in note 2 to the Unaudited Consolidated Financial Information and paragraph 68(2)(a)(i) of Chapter 19 of the GEM Listing Rules. The Unaudited Consolidated Financial Information does not contain sufficient information to constitute a complete set of financial statements as defined in Hong Kong Accounting Standard 1 “Presentation of Financial Statements” issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”). Our responsibility is to express a conclusion on the Unaudited Consolidated Financial Information based on our review, and to report our conclusion solely to you, as a body, in accordance with our agreed terms of engagement, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report.

Scope of Review

We conducted our review in accordance with Hong Kong Standard on Review Engagements 2400 “Engagements to Review Financial Statements” and with reference to Practice Note 750 “Review of Financial Information under the Hong Kong Listing Rules for a Very Substantial Disposal” issued by the HKICPA. These require that we plan and perform the review to obtain moderate assurance as to whether the financial information is free of material misstatement. A review is limited primarily to inquiries of entity personnel and analytical procedures applied to financial data and thus provides less assurance than an audit. We have not performed an audit and, accordingly, we do not express an audit opinion.

FINANCIAL INFORMATION OF THE DISPOSAL GROUP

APPENDIX I

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the Unaudited Consolidated Financial Information of the Disposal Group is not prepared, in all material respects, in accordance with the basis of preparation set out in note 2 to the Unaudited Consolidated Financial Information.

Emphasis of matters

Without qualifying our conclusion, we draw attention to note 2 to the Unaudited Consolidated Financial Information regarding the adoption of going concern basis on which the Unaudited Consolidated Financial Information has been prepared. At 31 December 2012, the Disposal Group had sustained net current liabilities of HK$81,107,000.

The conditions set out in note 2 to the Unaudited Consolidated Financial Information indicate the existence of a material uncertainty which may cast significant doubt on the ability of the Disposal Group to continue as a going concern. The Unaudited Consolidated Financial Information do not include any adjustments that would result from a failure to obtain fundings as referred to in note 2 to meet in full the financial obligations of the Disposal Group for the foreseeable future.

Yours faithfully,

CCTH CPA Limited

Certified Public Accountants Hong Kong 28 June 2013

Kwong Tin Lap

Practising Certificate Number P01953 Unit 5-6, 7/F, Greenfield Tower, Concordia Plaza,

1 Science Museum Road, Tsim Sha Tsui, Kowloon, Hong Kong

APPENDIX I FINANCIAL INFORMATION OF THE DISPOSAL GROUP

UNAUDITED FINANCIAL INFORMATION OF THE DISPOSAL GROUP

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012

Continuing Operations Turnover Cost of sales Gross profit Other income, gains and losses (net) Selling and distribution expenses Administrative expenses Finance costs Profit before tax Income tax Profit for the year from continuing operations Discontinued Operations Profit for the year from discontinued operations Profit for the year Other comprehensive income Gain on revaluation of properties Income tax relating to revaluation of properties Exchange differences on translation of foreign operations Total comprehensive income for the year Profit to the year attributable to: Owners of the Disposed Company Non-controlling interests Total comprehensive income attributable to: Owners of the Disposed Company Non-controlling interests	2010 HK$’000 587,562 (435,318) 152,244 8,082 (16,829) (89,025) (4,915) 49,557 (10,207) 39,350 – 39,350 6,395 (1,130) 9,426 54,041 16,604 22,746 39,350 25,627 28,414 54,041	2011 HK$’000 724,008 (576,142) 147,866 (2,551) (23,473) (89,124) (7,470) 25,248 (9,551) 15,697 – 15,697 – – 1,875 17,572 7,499 8,198 15,697 10,500 7,072 17,572	2012 HK$’000 825,054 (651,463) 173,591 11,709 (32,147) (132,436) (9,778) 10,939 (7,134) 3,805 – 3,805 – – 3,742 7,547 (4,444) 8,249 3,805 (1,519) 9,066 7,547

APPENDIX I FINANCIAL INFORMATION OF THE DISPOSAL GROUP

UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

AS AT 31 DECEMBER 2010, 2011 AND 2012

NON-CURRENT ASSETS Property, plant and equipment Investment properties Prepaid land lease payments Intangible assets Goodwill Deferred tax assets Total non-current assets CURRENT ASSETS Inventories Trade receivables Prepayments, deposits and other receivables Amounts due from non-controlling interests of subsidiaries Restricted bank deposits Cash and cash equivalents Total current assets CURRENT LIABILITIES Trade payables Other payables and accruals Interest-bearing bank and other borrowings Amount due to a holding company Amount due to a director Amounts due to non-controlling interests of subsidiaries Tax payable Total current liabilities NET CURRENT LIABILITIES TOTAL ASSETS LESS CURRENT LIABILITIES NON-CURRENT LIABILITIES Deferred tax liabilities NET ASSETS EQUITY Issued capital Reserves Equity attributable to owners of the Disposed Company Non-controlling interests TOTAL EQUITY	2010 HK$’000 178,876 30,170 16,173 – – 233 225,452 57,220 234,999 30,736 2,934 12,000 49,940 387,829 169,640 86,598 80,287 34,777 2,110 12,346 5,354 391,112 (3,283) 222,169 (2,984) 219,185 – 92,077 92,077 127,108 219,185	2011 HK$’000 234,252 31,340 19,618 – 1,149 324 286,683 89,537 221,089 17,708 – 28,445 116,208 472,987 229,878 67,295 121,186 36,800 2,110 46,927 776 504,972 (31,985) 254,698 (7,424) 247,274 – 101,781 101,781 145,493 247,274	2012 HK$’000 276,937 34,569 19,327 311 – 3,303 334,447 73,523 203,595 22,159 – 42,316 90,092 431,685 215,717 88,541 104,567 34,795 2,110 65,121 1,941 512,792 (81,107) 253,340 (8,771) 244,569 – 100,262 100,262 144,307 244,569

APPENDIX I FINANCIAL INFORMATION OF THE DISPOSAL GROUP

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012

At 1 January 2010 Profit for the year Other comprehensive income for the year Gain on revaluation of properties Income tax relating to revaluation of properties Exchange difference on translation of foreign operations Total comprehensive income for the year Transfer from retained earnings Disposal of subsidiaries Dividend paid At 31 December 2010 Profit for the year Other comprehensive income for the year Exchange difference on translation of foreign operations Total comprehensive income for the year Transfer from retained earnings Acquisition of subsidiaries At 31 December 2011 (Loss)/profit for the year Other comprehensive income for the year Exchange difference on translation of foreign operations Total comprehensive income for the year Transfer from retained earnings Dividend paid to non-controlling interest of a subsidiary At 31 December 2012	Asset Issued revaluation Statutory capital reserve reserve HK$’000 HK$’000 HK$’000 – 11,680 6,812 – – – – 4,172 – – (737) – – – – – 3,435 – – – 764 – (3,822) – – – – – 11,293 7,576 – – – – – – – – – – – 4,315 – – – – 11,293 11,891 – – – – – – – – – – – 121 – – – – 11,293 12,012	Exchange Merger fluctuation reserve reserve HK$’000 HK$’000 2,441 11,936 – – – – – – – 5,588 – 5,588 – – – – – – 2,441 17,524 – – – 3,001 – 3,001 – – – – 2,441 20,525 – – – 2,925 – 2,925 – – – – 2,441 23,450	Retained earnings HK$’000 37,110 16,604 – – – 16,604 (893) 3,822 (3,400) 53,243 7,499 – 7,499 (5,111) – 55,631 (4,444) – (4,444) (121) – 51,066	Non- controlling Sub-total interests HK$’000 HK$’000 69,979 98,817 16,604 22,746 4,172 2,223 (737) (393) 5,588 3,838 25,627 28,414 (129) (123) – – (3,400) – 92,077 127,108 7,499 8,198 3,001 (1,126) 10,500 7,072 (796) (765) – 12,078 101,781 145,493 (4,444) 8,249 2,925 817 (1,519) 9,066 – – – (10,252) 100,262 144,307	Total HK$’000 168,796 39,350 6,395 (1,130) 9,426
					54,041 (252) – (3,400)
					219,185 15,697 1,875
					17,572 (1,561) 12,078
					247,274 3,805 3,742
					7,547 – (10,252)
					244,569

FINANCIAL INFORMATION OF THE DISPOSAL GROUP

APPENDIX I

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED 31 DECEMBER 2010, 2011 AND 2012

Cash flows from operating activities Profit before tax Adjustments for: Bank interest income Finance costs Depreciation and amortisation (Reversal of)/impairment loss on trade receivables Impairment loss on property, plant and equipment Impairment loss on goodwill Loss on disposal of property, plant and equipment (Reversal of)/write down on inventories Fair value (gain)/loss of investment properties Gain on disposal of subsidiaries (Increase)/decrease in inventories (Increase)/decrease in trade receivables (Increase)/decrease in prepayments, deposits and other receivables Increase in amount due to a director Increase/(decrease) in trade payables Increase/(decrease) in accruals and other payables Cash generated from operations PRC tax paid Net cash from operating activities	2010 HK$’000 49,557 (309) 4,915 16,965 (3,426) – – 47 (1,308) (3,267) (445) 62,729 (8,317) (95,891) (12,732) 2,110 51,001 45,904 44,804 (8,469) 36,335	2011 HK$’000 25,248 (639) 7,470 19,752 (808) – – 96 (602) 1,979 – 52,496 (27,702) 26,575 13,775 – 56,587 (21,984) 99,747 (10,928) 88,819	2012 HK$’000 10,939 (1,240) 9,778 20,368 6,474 1,761 1,149 – 2,552 (3,045) – 48,736 13,463 11,020 (4,450) – (14,161) 19,545 74,153 (7,925) 66,228

APPENDIX I FINANCIAL INFORMATION OF THE DISPOSAL GROUP

Cash flows used in investing activities Purchases of items of property, plant and equipment Additions of investment properties Acquisition of subsidiaries Decrease in prepayments for acquisition of property, plant and equipment Proceeds from disposals of items of property, plant and equipment Decrease/(increase) in restricted bank deposits Interest received Net cash used in investing activities Cash flows (used in)/from financing activities Interest paid New bank loans Repayment of bank loans Advances from non-controlling interests of subsidiaries Net cash (used in)/from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the year Effect on foreign exchange rate changes, net Cash and cash equivalents at end of the year	2010 HK$’000 (27,586) – – – 163 3,766 309 (23,348) (4,915) 80,037 (83,386) 863 (7,401) 5,586 46,728 (2,374) 49,940	2011 HK$’000 (53,920) (2,067) (17,508) – 442 (16,445) 639 (88,859) (7,470) 121,186 (80,287) 37,515 70,944 70,904 49,940 (4,636) 116,208	2012 HK$’000 (63,874) – – 324 49 (13,871) 1,240 (76,132) (8,077) – (16,619) 7,942 (16,754) (26,658) 116,208 542 90,092

APPENDIX I FINANCIAL INFORMATION OF THE DISPOSAL GROUP

NOTES TO THE UNAUDITED FINANCIAL INFORMATION

1. GENERAL INFORMATION

On 2 May 2013, Sunrise (China) Technology Group Limited (the “Company”) entered into a sale and purchase agreement with Buena Holdings Limited (the “Purchaser”), pursuant to which the Company has conditionally agreed to sell, and the Purchaser has conditionally agreed to acquire the entire issued share capital of the Disposed Company together with the loans owing by the Disposal Group to the Company (the “Disposal”). Upon the completion of the Disposal, the Disposal Group will cease to be the subsidiaries of the Company.

2. BASIS OF PREPARATION OF UNAUDITED CONSOLIDATED FINANCIAL INFORMATION

The unaudited consolidated financial information of the Disposal Group for the three years ended 31 December 2010, 2011 and 2012 (“Unaudited Consolidated Financial Information”) has been prepared in accordance with paragraph 68(2)(a)(i) of Chapter 19 of the Rules Governing the Listing of Securities on the Growth-Enterprise Market of The Stock Exchange of Hong Kong Limited, and solely for the purpose of inclusion in the circular to be issued by the Company in connection with the Disposal.

The Unaudited Consolidated Financial Information has been prepared in accordance with the relevant accounting policies adopted by the Company in the preparation of the consolidated financial statements of the Company for the relevant years. The Unaudited Consolidated Financial Information does not contain sufficient information to constitute a complete set of financial statements as defined in Hong Kong Accounting Standard 1 “Presentation of Financial Statements” issued by the Hong Kong Institute of Certified Public Accountants.

The Disposal Group recorded net current liabilities of HK$81,107,000 as at 31 December 2012. In view of this circumstance, the directors of the Company have given consideration to the future liquidity of the Disposal Group in assessing whether the Disposal Group will have sufficient financial resources to continue as a going concern. The Unaudited Consolidated Financial Information has been prepared on a going concern basis because the Company has agreed to provide adequate funds to enable the Disposal Group to meet its financial obligations as and when they fall due for the foreseeable future until the Disposal is completed. Upon the completion of the Disposal, the loans owing by the Disposal Group to the Company will be taken up by the Purchaser and the Purchaser has agreed to provide adequate funds to enable the Disposal Group to meet its financial obligations as and when they fall due for the foreseeable future.

Should the Disposal Group be unable to operate as a going concern, adjustments would have to be made to adjust the value of its assets to their recoverable amounts, to reclassify its non-current assets and non-current liabilities into current assets and current liabilities respectively, and to provide for any further liabilities which might arise. The effect of these adjustments has not been reflected in the Unaudited Consolidated Financial Information.

APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE REMAINING GROUP

A. INTRODUCTION TO THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

Basis of preparation of the unaudited pro forma financial information of the Remaining Group after the Disposal

The unaudited pro forma financial information of the Remaining Group has been prepared in accordance with paragraph 31 of Chapter 7 of the Rules Governing the Listing of Securities on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited (the “GEM Listing Rules”) for the purpose of illustrating the effects of the Disposal on the Remaining Group.

The unaudited pro forma financial information is based on the aforesaid historical data after giving effect to the pro forma adjustments described in the accompanying notes. Narrative description of the pro forma adjustments that are (i) directly attributable to the transaction and (ii) factually supportable, is summarised in the accompanying notes.

The unaudited pro forma financial information of the Remaining Group has been prepared by the Directors for illustrative purpose only and is based on a number of assumptions, estimates, uncertainties and currently available information. Because of its hypothetical nature, the unaudited pro forma financial information may not give a true picture of the results, cash flows and financial position of the Group upon completion of the Disposal or at any future date.

APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE REMAINING GROUP

B. UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

Unaudited pro forma consolidated statement of financial position

				The
	The Group			Remaining
	as at			Group as at
	31 December			31 December
	2012	Pro forma	adjustments	2012
	HK$’000	HK$’000	HK$’000	HK$’000
	(Audited)
	(Note 1)	(Note 2)	(Note 3)
NON-CURRENT ASSETS
Property, plant and equipment	361,330	(276,937)		84,393
Investment properties	34,569	(34,569)		–
Prepaid land lease payments	25,600	(19,327)		6,273
Intangible assets	8,508	(311)		8,197
Prepayment for acquisition of
property, plant and equipment	5,167			5,167
Deferred tax assets	3,303	(3,303)		–
Total non-current assets	438,477			104,030
CURRENT ASSETS
Inventories	104,773	(73,523)		31,250
Construction contracts	9,735			9,735
Trade receivables	290,464	(203,595)		86,869
Prepayments, deposits and
other receivables	73,590	(22,159)		51,431
Amount due from the
Disposal Group	–	34,795	(34,795)	–
Restricted bank deposits	49,117	(42,316)		6,801
Cash and cash equivalents	93,822	(90,092)	121,248	124,978
Total current assets	621,501			311,064

UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE REMAINING GROUP

APPENDIX II

				The
	The Group			Remaining
	as at			Group as at
	31 December			31 December
	2012	Pro forma	adjustments	2012
	HK$’000	HK$’000	HK$’000	HK$’000
	(Audited)
	(Note 1)	(Note 2)	(Note 3)
CURRENT LIABILITIES
Trade payables	273,547	(215,717)		57,830
Other payables and accruals	229,131	(88,541)		140,590
Interest-bearing bank and
other borrowings	134,567	(104,567)		30,000
Convertible loan notes and
embedded derivatives	30,926			30,926
Amounts due to directors	3,310	(2,110)		1,200
Amounts due to non-controlling
interests of subsidiaries	65,121	(65,121)		–
Tax payable	4,780	(1,941)		2,839
Total current liabilities	741,382			263,385
NET CURRENT (LIABILITIES)/
ASSETS	(119,881)			47,679
TOTAL ASSETS LESS
CURRENT LIABILITIES	318,596			151,709
NON-CURRENT LIABILITIES
Unlisted warrants	5,151			5,151
Deferred tax liabilities	12,391	(8,771)		3,620
Total non-current liabilities	(17,542)			(8,771)
NET ASSETS	301,054			142,938
EQUITY
Issued capital	4,318			4,318
Reserves	123,791	(23,450)	9,641	109,982
Equity attributable to owners
of the Company	128,109			114,300
Non-controlling interests	172,945	(144,307)		28,638
TOTAL EQUITY	301,054			142,938

UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE REMAINING GROUP

APPENDIX II

Unaudited pro forma consolidated statement of comprehensive income

Revenue Cost of sales Gross profit Other income and gains Selling and distribution expenses Administrative expenses Other operating expenses Finance costs Fair value gains on derivative financial instruments Profit before tax Income tax Profit for the year Other comprehensive income Exchange differences on translation of foreign operations Release of reserves upon disposal of subsidiaries – Exchange fluctuation reserve Total comprehensive income for the year	The Group for the year ended 31 December 2012 Pro forma adjustments HK$’000 HK$’000 HK$’000 (Audited) (Note 1) (Note 5) (Note 6) 875,577 (825,054) (689,999) 651,463 185,578 33,088 (23,646) 3,192 (32,879) 32,147 (156,962) 132,436 (14,116) 11,937 (25,820) 9,778 22,512 11,401 (7,496) 7,134 3,905 3,733 (3,742) – (20,525) 7,638	The Remaining Group for the year ended 31 December 2012 HK$’000 50,523 (38,536) 11,987 12,634 (732) (24,526) (2,179) (16,042) 22,512 3,654 (362) 3,292 (9) (20,525) (17,242)

UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE REMAINING GROUP

APPENDIX II

Unaudited pro forma consolidated statement of cash flows

						The
						Remaining
		The Group				Group
	for the year					for the year
		ended				ended
31 December						31 December
		2012	Pro	forma adjustments		2012
		HK$’000	HK$’000	HK$’000	HK$’000	HK$’000
		(Audited)
		(Note 1)	(Note 7)	(Note 6)	(Note 8)
Cash flows from/(used in)
operating activities
Profit before tax		11,401	(10,939)	3,192		3,654
Adjustments for:
Bank interest income		(1,262)	1,240			(22)
Finance costs		25,820	(9,778)			16,042
Depreciation		19,951	(19,951)			–
Amortisation of intangible
assets		8,247				8,247
Amortisation of prepaid land
lease payments		417	(417)			–
Fair value gain of an derivative
financial instruments		(22,511)				(22,511)
Impairment of trade receivables		10,923	(6,474)			4,449
Impairment of property, plant
and equipment		1,761	(1,761)			–
Impairment of goodwill		1,417	(1,149)			268
Write-down of inventories		2,552	(2,552)			–
Fair value gain of investment
properties		(3,045)	3,045			–
Gain on disposal of subsidiaries		(5,715)		3,192		(8,907)
Gain on bargain purchase		(3,942)				(3,942)
		46,014				(2,722)
Decrease/(increase) in inventories		1,585	(13,463)			(11,878)
Increase in construction contracts		(2,586)				(2,586)
Increase in trade receivables		(31,280)	(11,020)			(42,300)
Increase in prepayments, deposits
and other receivables		(12,256)	4,450			(7,806)
Increase in amounts due to directors		2,157				2,157
(Decrease)/increase in trade payables		(155)	14,161			14,006
Increase in accruals and
other payables		41,215	(19,545)			21,670
Cash from/(used in) operations		44,694				(29,459)
PRC tax (paid)/refunded		(7,667)	7,925			258
Net cash from/(used in) operating
activities		37,027				(29,201)

UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE REMAINING GROUP

APPENDIX II

						The
						Remaining
	The Group					Group
	for the year					for the year
		ended				ended
31		December			31 December
		2012	Pro	forma adjustments		2012
		HK$’000	HK$’000	HK$’000	HK$’000	HK$’000
		(Audited)
		(Note 1)	(Note 7)	(Note 6)	(Note 8)
Cash flows (used in)/from
investing activities
Purchases of items of property,
plant and equipment		(63,874)	63,874			–
Proceeds from disposals of items
of property, plant and equipment		49	(49)			–
Acquisition of subsidiaries		880				880
Decrease in prepayments for
acquisition of property, plant
and equipment		14,480	(324)			14,156
Increase in restricted bank deposits		(20,672)	13,871			(6,801)
Interest received		1,262	(1,240)			22
Proceeds from disposal of
subsidiaries		1,765			5,040	6,805
Net cash (used in)/from
investing activities		(66,110)				15,062
Cash flows from financing
activities
Interest paid		(20,879)	8,077			(12,802)
New short term loan		30,000				30,000
Repayment of bank loans		(16,619)	16,619			–
Advance from non-controlling
interest of subsidiaries		7,942	(7,942)			–
Net cash from financing activities		444				17,198
Net (decrease)/increase in cash
and cash equivalents		(28,639)				3,059
Cash and cash equivalents at
beginning of the year		121,505				121,505
Effect on foreign exchange
rate changes, net		956	(542)			414
Cash and cash equivalents at
end of the year		93,822				124,978

UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE REMAINING GROUP

APPENDIX II

Notes:

(1) The figures are extracted from the audited consolidated financial statements of the Group as set out in the published annual report of the Company for the year ended 31 December 2012.
(2) The adjustment reflects the effect of exclusion of assets, liabilities and exchange fluctuation reserve attributable to the Disposal Group (net of non-controlling interests) from the consolidated statement of financial position of the Group as at 31 December 2012 and the inclusion of the amount due by the Disposed Company to the Company, assuming that the Disposal had taken place on 31 December 2012. The items of assets, liabilities and reserves of the Disposal Group are extracted from the unaudited consolidated statement of financial position of the Disposal Group as at 31 December 2012 as set out in Appendix I to this circular.
(3) The adjustment reflects the recognition of the cash consideration for and the gain on the Disposal in the unaudited pro forma consolidated statements of financial position of the Remaining Group as at 31 December 2012. Assuming that the Disposal had taken place on 31 December 2012, the net cash consideration to be received and the gain on the Disposal amounting to HK$121,248,000 and HK$9,641,000 respectively, which are calculated as follows:

Cash consideration for the Disposal Payment for transaction costs attributable to the Disposal_(Note 4)_ Net cash consideration to be received Carrying amounts of the net assets of the Disposal Group as at 31 December 2012 Non-controlling interests derecognised Release of reserves of the Disposal Group as at 31 December 2012 – Exchange fluctuation reserve Adjusted net assets of the Disposal Group at 31 December 2012 attributable to the Group Carrying amount of the Sale Loan as at 31 December 2012 Gain on the Disposal	HK$’000 244,569 (144,307) 100,262 (23,450)	HK$’000 122,000 (752) 121,248 (76,812) (34,795) 9,641

(4) The transaction costs (including but not limited to legal and professional fees) directly attributable to the Disposal are estimated to be HK$752,000 by the directors of the Company.
(5) The adjustment reflects the exclusion of income and expenses attributable to the Disposal Group (net of noncontrolling interests) from the consolidated statement of comprehensive income of the Group for the year ended 31 December 2012, assuming that the Disposal had taken place on 1 January 2012. The items of income and expenses of the Disposal Group are extracted from the unaudited consolidated statement of comprehensive income for the year ended 31 December 2012 as set out in Appendix I to this circular.

UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE REMAINING GROUP

APPENDIX II

(6) The adjustment reflects the recognition of the gain on the Disposal, assuming that the Disposal had taken place on 1 January 2012. The gain on the Disposal amounting to HK$3,192,000 is calculated as follows:

Cash consideration for the Disposal Payment for transaction costs attributable to the Disposal_(Note 4)_ Net cash consideration to be received Carrying amount of the net assets of the Disposal Group as at 1 January 2012 Non-controlling interests derecognised Release of reserves of the Disposal Group as at 1 January 2012 – Exchange fluctuation reserve Adjusted net assets of the Disposal Group at 1 January 2012 attributable to the Group Carrying amount of the Sale Loan as at 1 January 2012 Gain on the Disposal	HK$’000 247,274 (145,493) 101,781 (20,525)	HK$’000 122,000 (752) 121,248 (81,256) (36,800) 3,192

The carrying amounts of assets and liabilities and reserves of the Disposal Group as at 1 January 2012 are extracted from the unaudited consolidated statement of financial position as at 31 December 2011 and the unaudited consolidated statement of changes in equity for the year ended 31 December 2011 as set out in Appendix I to this circular.

(7) The adjustment reflects the exclusion of items of cash flows attributable to the Disposal Group (net of noncontrolling interests) from the consolidated statement of cash flows of the Group for the year ended 31 December 2012 assuming that the Disposal had taken place on 1 January 2012. The items of cash flows of the Disposal Group are extracted from the unaudited consolidated statements of cash flows for the year ended 31 December 2012 as set out in Appendix I to this circular.
(8) The adjustment reflects the cash inflows from the net receipt of the consideration assuming that the Disposal had taken place on 1 January 2012.

Cash consideration for the Disposal Payment for transaction costs attributable to the Disposal_(Note 4)_ Net cash consideration to be received Cash and cash equivalents of the Disposal Group at 1 January 2012 Net cash inflows from the Disposal	HK$’000 122,000 (752) 121,248 (116,208) 5,040

(9) The above pro forma adjustments will have no continuing effect on the Remaining Group in subsequent reporting periods.

APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE REMAINING GROUP

C. ACCOUNTANTS’ REPORT ON UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

The following is the text of an accountants’ report, prepared for the sole purpose of inclusion in this circular, received from the independent reporting accountants, CCTH CPA Limited, Certified Public Accountants, Hong Kong, in respect of the unaudited pro forma financial information as set out in Section A of Appendix II to this circular.

==> picture [255 x 46] intentionally omitted <==

ACCOUNTANTS’ REPORT ON UNAUDITED PRO FORMA FINANCIAL INFORMATION TO THE DIRECTORS OF SUNRISE (CHINA) TECHNOLOGY GROUP LIMITED

We report on the unaudited pro forma financial information of Sunrise (China) Technology Group Limited (the “Company”) and its subsidiaries (hereinafter collectively referred to as the Group”) (the “Unaudited Pro Forma Financial Information”) set out in section B of Appendix II of the Company’s circular dated 28 June 2013 (the “Circular”) in connection with the proposed disposal of the entire issued share capital of Taraki Inc., (the “Disposed Company”) by the Group and the proposed sale of the loans owing to the Company by the Disposed Company to Buena Holdings Limited (the “Disposal”). The Unaudited Pro Forma Financial Information has been prepared by the directors of the Company, for illustrative purposes only, to provide information about how the Disposal might have affected the financial information presented, for inclusion in section B of Appendix II of the Circular. The basis of preparation of the Unaudited Pro Forma Financial Information is set out in section A of Appendix II of the Circular.

Respective responsibilities of directors of the Company and reporting accountants

It is the responsibility solely of the directors of the Company to prepare the Unaudited Pro Forma Financial Information in accordance with paragraph 31 of Chapter 7 of the Rules Governing the Listing of Securities on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited (the “GEM Listing Rules”) and with reference to Accounting Guideline 7 “Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars” issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”).

It is our responsibility to form an opinion, as required by paragraph 31(7) of Chapter 7 of the GEM Listing Rules, on the Unaudited Pro Forma Financial Information and to report our opinion to you. We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the Unaudited Pro Forma Financial Information beyond that owed to those to whom those reports were addressed by us at the dates of their issue.

UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE REMAINING GROUP

APPENDIX II

Basis of opinion

We conducted our engagement in accordance with Hong Kong Standard on Investment Circular Reporting Engagements 300 “Accountants’ Reports on Pro Forma Financial Information in Investment Circulars” issued by the HKICPA. Our work consisted primarily of comparing the unadjusted financial information with the source documents, considering the evidence supporting the adjustments and discussing the unaudited pro forma financial information with the directors of the Company. This engagement did not involve independent examination of any of the underlying financial information.

Our work did not constitute an audit or a review made in accordance with Hong Kong Standards on Auditing or Hong Kong Standards on Review Engagements issued by the HKICPA, and accordingly, we do not express any such audit or review assurance on the Unaudited Pro Forma Financial Information.

We planned and performed our work so as to obtain the information and explanations we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the Unaudited Pro Forma Financial Information has been properly compiled by the directors of the Company on the basis stated, that such basis is consistent with the accounting policies of the Group and that the adjustments are appropriate for the purposes of the Unaudited Pro Forma Financial Information as disclosed pursuant to paragraph 31(1) of Chapter 7 of the GEM Listing Rules.

The Unaudited Pro Forma Financial Information is for illustrative purposes only, based on the judgments and assumptions of the directors of the Company, and, because of its hypothetical nature, does not provide any assurance or indication that any event will take place in future and may not be indicative of:

the financial position of the Group as at 31 December 2012 or any future date; or
the results and cash flows of the Group for the year ended 31 December 2012 or any future period.

Opinion

In our opinion:

(a) the Unaudited Pro Forma Financial Information has been properly compiled by the directors of the Company on the basis stated;
(b) such basis is consistent with the accounting policies of the Group; and

APPENDIX II

UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE REMAINING GROUP

(c) the adjustments are appropriate for the purposes of the Unaudited Pro Forma Financial Information as disclosed pursuant to paragraph 31(1) of Chapter 7 of the GEM Listing Rules.

Yours faithfully,

CCTH CPA Limited

Certified Public Accountants

Hong Kong 28 June 2013

Kwong Tin Lap

Practising Certificate Number P01953 Unit 5-6, 7/F, Greenfield Tower, Concordia Plaza,

1 Science Museum Road, Tsim Sha Tsui, Kowloon, Hong Kong

FINANCIAL INFORMATION OF THE GROUP

APPENDIX III

1. FINANCIAL SUMMARY OF THE GROUP

The financial information of the Group for (i) the year ended 31 December 2012 is disclosed in the annual report of the Company for the year ended 31 December 2012 from pages 26 to 90; (ii) the year ended 31 December 2011 is disclosed in the annual report of the Company for the year ended 31 December 2011 from pages 27 to 92; (iii) the year ended 31 December 2010 is disclosed in the annual report of the Company for the year ended 31 December 2010 from pages 25 to 92, all of which have been published on the GEM website of the Stock Exchange (www.hkgem.com) and the website of the Company (www.sunrisechina-tech.com).

2. MANAGEMENT DISCUSSION AND ANALYSIS OF THE REMAINING GROUP

Set out below is the management discussion and analysis of the Remaining Group’s business and performance for each of the past two financial years ended 31 December 2012 as the Group commenced in the Remaining Group’s environmental protection related businesses only after the completion of the acquisitions by the Group of its respective 51% interest in Jiangsu Shengyi and Heilongjiang Shengyan in September 2011 and December 2012 respectively. Thus, the management discussion and analysis of the Remaining Group’s business and performance for the year ended 31 December 2011 only includes the results of Jiangsu Shengyi while for the year ended 31 December 2012, both the results of Jiangsu Shengyi and Heilongjiang Shengyan are included.

For the financial year ended 31 December 2011

Financial and business review

For the year ended 31 December 2011, no revenue was recorded in the Remaining Group as Jiangsu Shengyi did not complete any contracts during the period from September to December 2011 since the completion of the acquisition of Jiangsu Shengyi in September 2011. Therefore, there was no income generated from Jiangsu Shengyi which could be attributed to the revenue of the Remaining Group. Although no income was generated from Jiangsu Shengyi, Jiangsu Shengyi kept fulfilling its construction and engineering contracts entered into with 新疆慶華投資控股有限公司 (Xinjiang Qinghua Investment Holdings Company Ltd.), 寧夏捷美豐友化工公司 (Ningxia Jiemei Fengyou Chemical Company) and 東莞市中科煤氣化公司 (Dongguan City Zhongke Gasification Company) with the total amounts of approximately RMB12.3 million, RMB7.2 million and RMB20.8 million respectively. In addition, Jiangsu Shengyi entered into new contracts with 河南龍宇煤化工公司 (Henan Longyu Coal Chemical Company), 河南省煤氣集團有限責任公司 (Henan Province Coalgas Group Company Ltd.) and 陝西中化益業能源公司 (Shanxi Zhonghua Yiye Energy Company) with total amounts of approximately RMB28.8 million, RMB27.4 million and RMB2.8 million respectively. A net loss of approximately HK$58.3 million was incurred by the Remaining Group for the year ended 31 December 2011, which was mainly due to the share-based payment, staff salaries and welfare expenses and other benefits.

Significant investments, material acquisitions and disposals

Save as the acquisition of Jiangsu Shengyi as mentioned above, there were no significant investments, material acquisitions or disposals during the year ended 31 December 2011.

APPENDIX III

FINANCIAL INFORMATION OF THE GROUP

Liquidity, financial resources and capital structure

As at 31 December 2011, the Remaining Group had cash and cash equivalents together with restricted bank deposits of approximately HK$5.3 million. As at 31 December 2011, the Remaining Group’s net current assets amounted to approximately HK$40.2 million and the Remaining Group had no bank borrowings. As at 31 December 2011, the Remaining Group’s total indebtedness comprised liability portion of outstanding convertible loan notes amounting to approximately HK$24.8 million. The convertible loan notes, if not converted nor early redeemed, would be due for repayment in August 2016. The convertible loan notes were denominated in Renminbi and bore coupon rate at 12% per annum and yield to maturity rate at 15% per annum compounded annually. The total equity of the Remaining Group was approximately HK$34.2 million as at 31 December 2011. The Remaining Group’s gearing ratio, as a percentage of total indebtedness over total indebtedness and total equity, was approximately 42.0% as at 31 December 2011.

The Remaining Group financed its operation with internally generated cash flow and funds from the issuance of 12% coupon convertible loan notes with principal amount of RMB33 million (equivalent to approximately HK$40 million) and 40 unlisted warrants at subscription proceeds of HK$800,000 on 9 August 2011 with maturity date of 9 August 2016. No Shares were issued by the Remaining Group during the year under review.

Foreign exchange exposure

During the year under review, the Remaining Group’s transactions were mainly denominated in Renminbi and it had no foreign exchange contracts, interest or currency swaps or other financial derivatives for hedging purposes as the Remaining Group’s exposure to exchange rate fluctuations was minimal.

Contingent liabilities and capital commitment

As at 31 December 2011, the Remaining Group did not have any material contingent liabilities and capital commitment.

Pledge of assets

At 31 December 2011, no assets were pledged to secure general banking facilities granted to the Remaining Group.

Employee and remuneration policies

At 31 December 2011, the Remaining Group had approximately 53 employees. The employees’ salary level was adjusted in closed association with performance, qualifications and experience of individual staff as well as labor market conditions. In addition to the regular remuneration, discretionary bonus and share options could be awarded to eligible employees with reference to individual performance and the Remaining Group’s business performance. The Remaining Group was also committed to providing appropriate on-going training to staff members to equip them for future career development. For the year ended 31 December 2011, the remuneration of employees was approximately HK$26.6 million.

FINANCIAL INFORMATION OF THE GROUP

APPENDIX III

Future plans for material investments and acquisition of capital assets

There was no specific plan for material investments and acquisition of material capital assets as at 31 December 2011.

For the financial year ended 31 December 2012

Financial and Business review

For the ended 31 December 2012, the Remaining Group recorded a turnover of approximately HK$50.5 million and a gross profit of approximately HK$12.0 million. During the year under review, Jiangsu Shengyi has started to contribute revenue to the Remaining Group since March 2012. During the year under review, Jiangsu Shengyi completed the contracts entered into with 新疆慶華投資控股有限公司 (Xinjiang Qinghua Investment Holdings Company Ltd.) and 寧夏捷美豐友化工公司 (Ningxia Jiemei Fengyou Chemical Company) and kept fulfilling the other contracts. In addition, Jiangsu Shengyi entered into new contracts with 四川煤氣化有限責任公司 (Sichuan Gasification Company Ltd.*) with a total amount of approximately RMB4.4 million. Heilongjiang Shengyan also contributed revenue to the Remaining Group after the completion of its acquisition in December 2012. A net profit of approximately HK$0.1 million was recorded for the year ended 31 December 2012, which was mainly contributed by the profit generated from the production and sale of straw fuel briquettes business of Heilongjiang Shengyan.

Significant investments, material acquisitions and disposals

Save as the acquisition of Heilongjiang Shengyan as mentioned above, there were no significant investments, material acquisitions or disposals during the year ended 31 December 2012.

Liquidity, financial resources and capital structure

As at 31 December 2012, the Remaining Group had cash and cash equivalents together with restricted bank deposits of approximately HK$10.5 million. As at 31 December 2012, the Remaining Group’s net current liabilities amounted to approximately HK$38.8 million and the Remaining Group had no bank borrowings. As at 31 December 2012, the Remaining Group’s total indebtedness comprised liability portion of outstanding convertible loan notes and other loan with aggregate amount of approximately HK$58.0 million. The convertible loan notes, if not converted nor early redeemed, would be due for repayment in August 2016. The convertible loan notes were denominated in Renminbi and bore coupon rate at 12% per annum and yield to maturity rate at 15% per annum compounded annually whereas the other loan was denominated in Hong Kong dollars and was unsecured, beaning interest and administrative fee at an aggregate of 27.6% per annum and repayable within one year. The total equity of the Remaining Group was approximately HK$56.5 million as at 31 December 2012. The Remaining Group’s gearing ratio, as a percentage of total indebtedness over total indebtedness and total equity, was approximately 50.7% as at 31 December 2012. No Shares were issued by the Remaining Group during the year under review.

Foreign exchange exposure

FINANCIAL INFORMATION OF THE GROUP

APPENDIX III

Contingent liabilities and capital commitment

As at 31 December 2012, the Remaining Group did not have any material contingent liabilities and capital commitment.

Pledge of assets

At 31 December 2012, no assets were pledged to secure banking facilities granted to the Remaining Group.

Employee and remuneration policies

At 31 December 2012, the Remaining Group had approximately 130 employees. The employees’ salary level was adjusted in closed association with performance, qualifications and experience of individual staff as well as labor market conditions. In addition to the regular remuneration, discretionary bonus and share options could be awarded to eligible employees with reference to individual performance and the Remaining Group’s business performance. The Remaining Group was also committed to providing appropriate on-going training to staff members to equip them for future career development. For the year ended 31 December 2012, the remuneration of employees was approximately HK$6.7 million.

Future plans for material investments and acquisition of capital assets

There was no specific plan for material investments and acquisition of material capital assets as at 31 December 2012.

3. FINANCIAL AND TRADING PROSPECTS OF THE REMAINING GROUP

After completion of the Disposal, the Remaining Group will carry on the environmental protection related businesses mainly through its two subsidiaries, namely Heilongjiang Shengyan and Jiangsu Shengyi. Further details of Heilongjiang Shengyan and Jiangsu Shengyi are set out under the section headed “Information of the Remaining Group” in the letter from the Board of this circular.

The proceeds from the Disposal will provide the Remaining Group with enough cash to repay the current loan and payables of the Group, and to develop and expand the environmental protection related businesses of the Remaining Group as well as investment in relevant environmental protection related businesses should such opportunities arise. As at the Latest Practicable Date, the Remaining Group had not identified any acquisition or investment target or commenced any negotiation or arrangement in this regard. The Company will utilize part of the consideration to Heilongjiang Shengyan for the expansion of the production and sale of straw fuel briquettes business by building more sub-plants in Heilongjiang Province and the surrounding areas. Jiangsu Shengyi is actively seeking other feasible opportunities to enter into new contracts with its potential clients. Because of the heavy air pollution in north of the PRC, the Company expects that the PRC government will issue new regulations related to waste gas emission, and such action may obviously enlarge the market demands of the desulphurization industry. Thus the Company expects that the development of such industry will have a rapid growth.

FINANCIAL INFORMATION OF THE GROUP

APPENDIX III

4. STATEMENT OF INDEBTEDNESS

As at the close of business on 30 April 2013, being the latest practicable date for the purpose of this indebtedness statement prior to the publication of this circular, the Group had outstanding (i) unsecured convertible loan notes with an aggregate outstanding principal amounts of RMB33 million due on 8 August 2016, bearing interest at 12% per annum and convertible at the price of HK$0.6 per Share; (ii) unsecured advances from shareholders of subsidiaries of the Company amounting to an aggregate of RMB62.1 million which are interest free and repayable on demand; (iii) unsecured advances from Directors amounting to an aggregate of HK$7.9 million which are interest free and repayable on demand; (iv) an unsecured other borrowing amounting to HK$23.3 million bearing interest and administrative fee at an aggregate of 27.6% per annum and due on 17 June 2013; and (v) bank borrowings amounting to an aggregate of RMB57.5 million which are secured by the Group’s leasehold land and buildings and investment properties. As at 30 April 2013, bank deposits of the Group amounting to RMB17.3 million and EUR2.9 million were restricted by the banks for the issue of letters of credits to certain suppliers of the Group.

Save as disclosed above and apart from intra-group liabilities, the Group did not have any loan capital issued and outstanding or agreed to be issued, bank overdrafts or other similar indebtedness, liabilities under acceptances (other than normal trade bills), acceptance credits, debentures, mortgages, charges, finance lease or hire purchase commitments, guarantee or other material contingent liabilities at the close of business on 30 April 2013.

Save as disclosed above, the Directors confirm that there has been no material change in the indebtedness and contingent liabilities of the Group since 30 April 2013.

5. WORKING CAPITAL STATEMENT

The Directors are of the opinion that, taking into account the banking facilities and financial resources available to the Remaining Group, its internally generated funds and the estimated cash proceeds from the Disposal, the Remaining Group has sufficient working capital to satisfy its requirements for at least 12 months from the date of publication of this circular in the absence of unforeseen circumstances.

6. MATERIAL ADVERSE CHANGES

The Directors are not aware, as at the Latest Practicable Date, of any material adverse change in the financial or trading position of the Group since 31 December 2012, the date to which the latest published audited financial statements of the Company were made up.

PROPERTY VALUATION REPORT

APPENDIX IV

The following is the text of a letter, summary of values and valuation certificates, prepared for the purpose of incorporation in this circular received from Ascent Partners Valuation Service Limited, an independent valuer, in connection with its valuation as at 30 April 2013 of the property interests of the Disposal Group.

==> picture [18 x 44] intentionally omitted <==

Suite 2102, Hong Kong Trade Centre 161-167 Des Voeux Road Central Hong Kong Tel: 3679-3890 Fax: 3579-0884

Date: 28 June 2013

The Board of Directors

Sunrise (China) Technology Group Limited Units 01-03, 28/F, Shui On Centre 6-8 Harbour Road, Wanchai Hong Kong

Dear Sirs,

INSTRUCTIONS

In accordance with the instructions of Sunrise (China) Technology Group Limited (the “Company”) for us to value various properties held and occupied by Taraki Inc. and its subsidiaries (hereinafter together referred to as the “Disposal Group”) in the People’s Republic of China (the “PRC”), we confirm that we have carried out property inspections, made relevant enquiries and obtained such further information as we consider necessary for the purpose of providing you with our opinion of the market values of the property interests as at 30 April 2013 (referred to as the “Valuation Date”).

This letter which forms part of our valuation report explains the basis and methodologies of valuation, clarifying assumptions, valuation considerations, title investigation and limiting conditions of this valuation.

BASIS OF VALUATION

Our valuation of the property interests represents the market value which we would define as intended to mean “the estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s – length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion”.

PROPERTY VALUATION REPORT

APPENDIX IV

VALUATION METHODOLOGY

In valuing the property interests, we have adopted a combination of the open market and depreciated replacement cost approaches in assessing the land portions of the properties and the buildings and structures standing on the land respectively. Hence, the sum of the two results represents the value of the properties as a whole. In the valuation of the land portions, reference has been made to the comparables asking and/or sales transactions as available in the subject localities as well as the relevant benchmark land prices.

As the nature of the buildings and structures cannot be valued on the basis of market value, they have therefore been valued on the basis of their depreciated replacement cost. The depreciated replacement cost approach considers the cost to reproduce or replace in new condition the property appraised in accordance with current construction costs for similar buildings and structures in the locality, with allowance for accrued depreciation as evidenced by observed condition or obsolescence present, whether arising from physical, functional or economic causes. The depreciated replacement cost approach generally furnished the most reliable indication of value for the property in the absence of a known market based on comparable sales. The approach is subject to adequate potential profitability of the business.

VALUATION CONSIDERATIONS

In valuing the property interests, we have complied with all the requirements contained in Chapter 8 of the Rules Governing the Listing of Securities on the Growth Enterprise Market issued by The Stock Exchange of Hong Kong Limited and the HKIS Valuation Standards 2012 Edition published by The Hong Kong Institute of Surveyors.

VALUATION ASSUMPTIONS

Our valuations have been made on the assumption that the seller sells the property interests on the open market in their existing states without the benefit of a deferred term contracts, leasebacks, joint ventures, management agreements or any similar arrangements, which could serve to affect the values of the property interests.

In undertaking our valuation, we have assumed that, unless otherwise stated, transferable land use rights in respect of the property interests for specific terms at nominal annual land use fees have been granted and that any premium payable has already been fully paid. We have also assumed that the owners of the properties have enforceable titles to the properties and have free and uninterrupted rights to use, occupy or assign the properties for the whole of the respective unexpired terms as granted.

No allowance has been made in our report for any outstanding or additional land premium, charges, mortgages or amounts owing on the property interests valued nor for any expenses or taxation which may be incurred in effecting a sale. Unless otherwise stated, it is assumed that the property interests are free from encumbrances, restrictions and outgoings of an onerous nature, which could affect their values.

Other special assumptions of the property interests, if any, have been stated out in the footnotes of the valuation certificates attached herewith.

PROPERTY VALUATION REPORT

APPENDIX IV

TITLE INVESTIGATION

We have been, in some instances, shown copies of various title documents and other documents relating to the property interests and have made relevant enquiries. We have not examined the original documents to verify the existing title to the property interests and any material encumbrances that might be attached to the property interests or any lease amendments. However, we have relied considerably on the information given by the Company’s PRC legal adviser, Jiangsu Lixin Law Firm (江蘇力信律師事務所), concerning the validity of the Disposal Group’s title to the property interests located in the PRC.

All legal documents provided by the Disposal Group have been used for reference only. No responsibility regarding legal title to the property interests is assumed in this valuation report.

LIMITING CONDITIONS

We have inspected the exterior, and wherever possible, the interior of the properties but no structural survey had been made. In the course of our inspection, we did not note any serious defects. We are not, however, able to report that the properties are free from rot, infestation or any other structural defects. Further, no test has been carried out on any of the building services. All dimensions, measurements and areas are only approximates. We have not been able to carry out detailed on-site measurements to verify the site and floor areas of the properties and we have assumed that the areas shown on the copies of documents handed to us are correct.

The properties were inspected by Mr. Charles Choi, ASc (Estate Surveying), on 31 May 2013.

We have relied to a considerable extent on information provided by the Disposal Group and have accepted advice given to us on such matters, in particular, but not limited to, the sales records, tenure, planning approvals, statutory notices, easements, particulars of occupancy, site and floor areas and all other relevant matters in the identification of the property interests.

We have had no reason to doubt the truth and accuracy of the information provided to us by the Disposal Group. We have also been advised by the Disposal Group that no material factors have been omitted from the information supplied. We consider that we have been provided with sufficient information to reach an informed view, and we have no reason to suspect that any material information has been withheld.

Liability in connection with this valuation report is limited to the client to whom this report is addressed and for the purpose for which it is carried out only. We will accept no liability to any other parties or any other purposes.

This report is to be used only for the purpose stated herein, any use or reliance for any other purpose, by you or third parties, is invalid. No reference to our name or our report in whole or in part, in any document you prepare and/or distribute to third parties may be made without written consent.

PROPERTY VALUATION REPORT

APPENDIX IV

EXCHANGE RATE

Unless otherwise stated, all monetary amounts stated in this report are in Renminbi (RMB).

Our summary of values and valuation certificates are herewith attached.

Yours faithfully, For and on behalf of

Ascent Partners Valuation Service Limited Ian K. F. Ng MBA BSc(EstMan) BSc MHKIS MRICS RPS(GP) Principal

Mr. Ian K. F. Ng is a Registered Professional Surveyor with over 9 years’ experience in valuation of properties in HKSAR, Macau SAR and mainland China. Mr. Ng is a Professional Member of The Hong Kong Institute of Surveyors as well as a chartered surveyor of The Royal Institution of Chartered Surveyors.

PROPERTY VALUATION REPORT

APPENDIX IV

SUMMARY OF VALUES

Interest Market Value in Attributable Existing State as at to the Property 30 April 2013 Disposal Group RMB (%) Property interests held and occupied by the Disposal Group in the PRC 1 Land and Various Buildings Located at 41,600,000 51.0 No. 88, Wanli Road, Yuanhe Jiedao, Xiangcheng District, Suzhou City, Jiangsu Province, the People’s Republic of China 2 Land and Various Buildings located at 154,000,000 51.0 No. 333, Zhongchang Road, Yuanhe Kejiyuan, Yuanhe Town, Xiangcheng District, Suzhou City, Jiangsu Province, the People’s Republic of China 3 Land and Various Buildings Located at 37,700,000 51.0 Lingfeng Village, Beiqiao Jiedao, Xiangcheng District, Suzhou City, Jiangsu Province, the People’s Republic of China 4 Land and Various Buildings located at 10,800,000 30.6 No. 119 Shihu Road West, Wuzhong District, Suzhou City, Jiangsu Province, the People’s Republic of China Total: 244,100,000	Value Attributable to the Disposal Group 30 April 2013 RMB 21,200,000 78,500,000 19,200,000 3,300,000
	122,200,000

Interest
Market Value in
Attributable
Existing State as at
to the
Property
30 April 2013 Disposal Group
RMB
(%)
Property interests held and occupied
by the Disposal Group in the PRC
1
Land and Various Buildings Located at
41,600,000
51.0
No. 88, Wanli Road, Yuanhe Jiedao,
Xiangcheng District,
Suzhou City, Jiangsu Province,
the People’s Republic of China
2
Land and Various Buildings located at
154,000,000
51.0
No. 333, Zhongchang Road, Yuanhe Kejiyuan,
Yuanhe Town, Xiangcheng District,
Suzhou City, Jiangsu Province,
the People’s Republic of China
3
Land and Various Buildings Located at
37,700,000
51.0
Lingfeng Village, Beiqiao Jiedao,
Xiangcheng District,
Suzhou City, Jiangsu Province,
the People’s Republic of China
4
Land and Various Buildings located at
10,800,000
30.6
No. 119 Shihu Road West, Wuzhong District,
Suzhou City, Jiangsu Province,
the People’s Republic of China
Total:
244,100,000

Value
Attributable
to the
Disposal Group
30 April 2013
RMB
21,200,000
78,500,000
19,200,000
3,300,000

122,200,000

PROPERTY VALUATION REPORT

APPENDIX IV

VALUATION CERTIFICATE

Property interests held and occupied by the Disposal Group in the PRC

Property

Description and Tenure

Particular of Occupancy

Market Value in Existing State as at 30 April 2013

The property comprises two parcels of land with a total area of approximately 41,372.2 sq.m. erected upon fourteen industrial/warehouse buildings completed in various stages between 1993 and 2000.

1 Land and Various The property comprises Buildings Located at two parcels of land with a No. 88, Wanli Road, total area of approximately Yuanhe Jiedao, 41,372.2 sq.m. erected upon Xiangcheng District, fourteen industrial/warehouse Suzhou City, buildings completed in various Jiangsu Province, stages between 1993 and 2000. the People’s Republic of China The total gross floor area of the buildings is approximately
(位於中華人民共和國江 34,509.64 sq.m. 蘇省蘇州市相城區元和街道萬里路88號之土地 The land use rights of the 和房屋) property were granted for

The land use rights of the property were granted for terms with expiry dates between 12 September 2050 or 29 December 2051 for industrial use.

The property is currently RMB41,600,000 occupied by the Disposal (Renminbi Group for industrial Forty One Million purposes. Six Hundred Thousand)

51.0% Interest Attributable to the Disposal Group: RMB21,200,000

Notes:

(1) Pursuant to a State-owned Land Use Rights Certificate – Xiang Guo Yong (2009) Di No. 00237 issued by Suzhou City Land Resources Bureau – Xiangcheng Branch dated 11 August 2009, the land use rights of a parcel of land with a site area of approximately 24,038.9 sq.m. were granted to Suzhou Sonavox Acoustics Co., Ltd. (蘇州上昇音響有限公司) for a term expiring on 12 September 2050 for industrial use.
(2) Pursuant to a State-owned Land Use Rights Certificate – Xiang Guo Yong (2009) Di No. 00236 issued by Suzhou City Land Resources Bureau – Xiangcheng Branch dated 11 August 2009, the land use rights of a parcel of land with a site area of approximately 17,333.3 sq.m. were granted to Suzhou Shangsheng Electrics Co., Ltd. (蘇州上聲電子有限公司) for a term expiring on 29 December 2051 for industrial use.
(3) Pursuant to a Building Ownership Certificate – Su Fang Quan Zheng Xiangcheng Zi Di No. 30004147 issued by Suzhou City Housing Administration Bureau dated 20 May 2007, the building ownership rights of six non-domestic buildings with a total gross floor area of approximately 14,483.99 sq.m. are owned by Suzhou Sonavox Acoustics Co., Ltd. The details of these buildings are as follows:

		Gross Floor Area
Block	No. of Storey	Approx.(sq.m.)
1	2	6,576.57
2	2	5,943.17
3	1	326.11
4	1	217.60
5	1	1,395.60
6	1	24.94
		14,483.99

PROPERTY VALUATION REPORT

APPENDIX IV

(4) Pursuant to a Building Ownership Certificate – Su Fang Quan Zheng Xiangcheng Zi Di No. 30004397 issued by Suzhou City Housing Administration Bureau dated 31 May 2007, the building ownership rights of eight non-domestic buildings with a total gross floor area of approximately 20,025.65 sq.m. are owned by Suzhou Shangsheng Electrics Co., Ltd.. The details of these buildings are as follows:

		Gross Floor Area
Block	No. of Storey	Approx.(sq.m.)
1	1	91.84
2	1	69.38
3	2	615.87
4	3	7,940.19
5	3	5,076.87
6	3	5,201.07
7	2	535.84
8	2	494.59
		20,025.65

(5) Pursuant to a Mortgage Contract dated 25 July 2012 entered into between Suzhou Sonavox Acoustics Co., Ltd. and Bank of China – Xiangcheng Branch (中國銀行相城支行), land use rights with an area of approximately 24,038.9 sq.m. and building ownership rights with a total gross floor area of approximately 14,483.99 sq.m. is pledged for a loan to an extent of RMB27,230,000.
(6) Pursuant to a Mortgage Contract dated 25 July 2012 entered into between Suzhou Shangsheng Electrics Co., Ltd. and Bank of China – Xiangcheng Branch (中國銀行相城支行), land use rights with an area of approximately 17,333.3 sq.m. and building ownership rights with a total gross floor area of approximately 20,025.65 sq.m. is pledged for a loan to an extent of RMB35,510,000.
(7) Suzhou Sonavox Acoustics Co., Ltd. and Suzhou Shangsheng Electrics Co., Ltd. are each 51% interest-owned by the Company.
(8) The major certificates and permits of the property are summarized as follows:

(i)	State-owned Land Use Rights Certificate	Yes
(ii)	Building Ownership Certificate	Yes

(9) We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal adviser, which contains, inter alia , the following:
(i) Suzhou Shangsheng Electrics Co., Ltd. legally owns the land use rights with an area of approximately 17,333.3 sq.m. and building ownership rights with a total gross floor area of approximately 20,025.65 sq.m. and is entitled to lease, use, transfer, mortgage and dispose of them in accordance with the law;
(ii) Suzhou Sonavox Acoustics Co., Ltd. legally owns the land use rights with an area of approximately 24,038.9 sq.m. and building ownership rights with a total gross floor area of approximately 14,483.99 sq.m. and is entitled to lease, use, transfer, mortgage and dispose of them in accordance with the law. and
(iii) The land use rights and building ownership rights of the property are pledged for a loan in favour of Bank of China – Xiangcheng Branch (中國銀行相城支行).

PROPERTY VALUATION REPORT

APPENDIX IV

VALUATION CERTIFICATE

Property

Description and Tenure

Particular of Occupancy

Market Value in Existing State as at 30 April 2013

2 Land and Various The property comprises a Buildings located at parcel of land with an area of No. 333, Zhongchang approximately 71,934 sq.m. Road, Yuanhe Kejiyuan, erected upon an industrial/ Yuanhe Town, office composite building, Xiangcheng District, three industrial buildings, Suzhou City, a canteen building and a Jiangsu Province, warehouse building completed the People’s Republic of in various stages between 2006 China and 2012.

The property is currently RMB154,000,000 mainly occupied by (Renminbi the Disposal Group for One Hundred industrial purposes. Fifty Four Million) 51.0% Interest Attributable to the Disposal Group: RMB78,500,000

(位於中華人民共和國江 The total gross floor area of 蘇省蘇州市相城區元和 the buildings is approximately 鎮元和科技園中創路333 105,274.2 sq.m. 號之土地和房屋)

The land use rights of the property were granted for a term expiring on 17 June 2054 for industrial use.

Notes:

(1) Pursuant to a State-owned Land Use Rights Certificate – Xiang Guo Yong (2009) Di No. 00235 issued by Suzhou City Land Resources Bureau – Xiangcheng Branch dated 11 August 2009, the land use rights of a parcel of land with a site area of approximately 71,934 sq.m. were granted to Suzhou Shangsheng Technology Co., Ltd. (蘇州上聲科技有限公司) for a term expiring on 17 June 2054 for industrial use.
(2) Pursuant to a Building Ownership Certificate – Su Fang Quan Zheng Xiangcheng Zi Di No. 30002141 issued by Suzhou City Housing Administration Bureau dated 15 January 2007, the building ownership rights of two 3-storey non-domestic buildings with a total gross floor area of approximately 37,804.92 sq.m. are owned by Suzhou Shangsheng Technology Co., Ltd.
(3) Pursuant to a Building Ownership Certificate – Su Fang Quan Zheng Xiangcheng Zi Di No. 30138126 issued by Suzhou City Xiangcheng District Housing and Urban-Rural Construction Bureau registered on 24 August 2012, the building ownership rights of a 4-storey non-domestic building with a gross floor area of approximately 22,519.75 sq.m. are owned by Suzhou Shangsheng Technology Co., Ltd.
(4) Pursuant to a Building Ownership Certificate – Su Fang Quan Zheng Xiangcheng Zi Di No. 30138127 issued by Suzhou City Xiangcheng District Housing and Urban-Rural Construction Bureau registered on 24 August 2012, the building ownership rights of a 4-storey non-domestic buildings with a gross floor area of approximately 39,210.88 sq.m. are owned by Suzhou Shangsheng Technology Co., Ltd.
(5) Pursuant to a Building Ownership Certificate – Su Fang Quan Zheng Xiangcheng Zi Di No. 30138125 issued by Suzhou City Xiangcheng District Housing and Urban-Rural Construction Bureau registered on 24 August 2012, the building ownership rights of a 4-storey non-domestic buildings with a gross floor area of approximately 5,442.16 sq.m. are owned by Suzhou Shangsheng Technology Co., Ltd.

APPENDIX IV

PROPERTY VALUATION REPORT

(6) Pursuant to a Building Ownership Certificate –Su Fang Quan Zheng Xiangcheng Zi Di No. 30138124 issued by Suzhou City Xiangcheng District Housing and Urban-Rural Construction Bureau registered on 24 August 2012, the building ownership rights of an 1-storey non-domestic buildings with a gross floor area of approximately 296.49 sq.m. are owned by Suzhou Shangsheng Technology Co., Ltd.
(7) As per our inspection, we noted that a 2-storey carport building, an 1-storey transformer room and an 1-storey warehouse building with a total gross floor area of approximately 3,945.82 sq.m. were also erected on the subject land. As advised by the Disposal Group, the relevant building ownership certificates have not yet obtained. We have not taken into account these buildings in the course of our valuation.
(8) Pursuant to a tenancy agreement entered into between Suzhou Shangsheng Technology Co., Ltd. and Suzhou Shangsheng International Trading Co., Ltd. (蘇州上聲國際貿易有限公司), a portion of the property with a gross floor area of approximately 100 sq.m. was leased to Suzhou Shangsheng International Trading Co., Ltd. for a term commencing on 20 March 2012 and expiring on 19 March 2015 at a monthly rental of RMB1,200.
(9) Pursuant to a Mortgage Contract dated 10 October 2012 entered into between Suzhou Shangsheng Technology Co., Ltd. and Bank of China – Xiangcheng Branch (中國銀行相城支行), land use rights and building ownership rights with a total gross floor area of approximately 37,804.92 sq.m. is pledged for a loan to an extent of RMB60,000,000.
(10) Suzhou Shangsheng Technology Co., Ltd. is 51% interest-owned by the Company.
(11) The major certificates and permits of the property are summarized as follows:
(i) State-owned Land Use Rights Certificate Yes (ii) Building Ownership Certificate Yes
(12) We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal adviser, which contains, inter alia , the following:
(i) Suzhou Shangsheng Technology Co., Ltd. legally owns the property and is entitled to lease, use, transfer, mortgage and dispose of the property in accordance with the law;
(ii) The land use rights and a portion of the property with a gross floor area of approximately 37,804.92 sq.m. are pledged for a loan in favour of Bank of China – Xiangcheng Branch (中國銀行相城支行); and
(iii) A portion of the property with a gross floor area of approximately 100 sq.m. is subject to a tenancy agreement which is legal and valid although the tenancy agreement has not been registered.

PROPERTY VALUATION REPORT

APPENDIX IV

VALUATION CERTIFICATE

Property

Description and Tenure

Particular of Occupancy

Market Value in Existing State as at 30 April 2013

3 Land and Various Buildings Located at Lingfeng Village, Beiqiao Jiedao, Xiangcheng District, Suzhou City, Jiangsu Province, the People’s Republic of China
(位於中華人民共和國江蘇省蘇州市相城區北橋街道靈峰村之土地和房屋)
The property comprises two parcels of land with a total area of approximately 52,915 sq.m. erected upon eight industrial/warehouse buildings and a guardhouse completed in various stages between 2007 and 2010.

The total gross floor area of the buildings is approximately 15,690.22 sq.m.

The land use rights of the property were granted for terms with expiry dates between 13 September 2054 and 23 January 2058 for industrial use.

Portions of the property RMB37,700,000 with a total gross floor (Renminbi area of approximately Thirty Seven Million 11,579.25 sq.m. are Seven Hundred currently subject to various Thousand) tenancies with the latest expiring on 31 December 51.0% Interest 2015 at a total monthly Attributable to the rental of RMB104,213.25. Disposal Group: RMB19,200,000

The remaining portions of the property are occupied by the Disposal Group for industrial purposes.

Notes:

(1) Pursuant to a State-owned Land Use Rights Certificate – Xiang Guo Yong (2004) Di No. 00483 issued by Suzhou City Land Resources Bureau – Xiangcheng Branch dated 13 October 2004, the land use rights of a parcel of land with a site area of limately 39,666.7 sq.m. were granted to Suzhou Hesheng Industrial Co., Ltd. (蘇州和盛實業有限公司) for a term expiring on 13 September 2054 for industrial use.
(2) Pursuant to a State-owned Land Use Rights Certificate – Xiang Guo Yong (2008) Di No. 00324 issued by Suzhou City Land Resources Bureau – Xiangcheng Branch dated 16 September 2008, the land use rights of a parcel of land with a site area of approximately 13,248.3 sq.m. were granted to Suzhou Hesheng Industrial Co., Ltd. for a term expiring on 23 January 2058 for industrial use.
(3) Pursuant to a State-owned Land Use Rights Transfer Contract dated 2 September 2008 entered into between Suzhou City Xiangcheng District Beiqiao Town Lingfeng Village Hezuo She (蘇州市相城區北橋鎮靈峰村合作社) and Suzhou Hesheng Industrial Co., Ltd., the land use rights of a land parcel with an area of approximately 13,248.3 sq.m. were contracted to be transferred to Suzhou Hesheng Industrial Co., Ltd. for a consideration of RMB4,481,369.9.

APPENDIX IV

PROPERTY VALUATION REPORT

(4) Pursuant to a Building Ownership Certificate – Su Fang Quan Zheng Xiangcheng Zi Di No. 30011013 issued by Suzhou City Housing Administration Bureau- Xiangcheng Branch dated 5 December 2007, the building ownership rights of nine non-domestic buildings with a gross floor area of approximately 15,690.22 sq.m. are owned by Suzhou Hesheng Industrial Co., Ltd.. The details of these buildings are as follows:

			Gross Floor Area
Block		No. of Storey	Approx.(sq.m.)
1		1	63.90
2		2	4,872.47
3	1	plus a mezzanine level	3,823.01
4		2	1,032.99
5		1	2,758.05
6		1	2,758.05
7		1	185.92
8		1	27.01
9		1	168.82
			15,690.22

(5) As per our inspection, we noted that three 3-storey industrial buildings and a 1-storey warehouse building with a total gross floor area of approximately 17,910 sq.m. were also erected on the subject land. As advised by the Disposal Group, the relevant building ownership certificates have not yet obtained. We have not taken into account these buildings in the course of our valuation.
(6) Pursuant to a tenancy agreement entered into between Suzhou Hesheng Industrial Co., Ltd. and Suzhou Shangsheng Electronic Co., Ltd. (蘇州尚聲電子有限公司), a portion of the property with a gross floor area of approximately 7,619.25 sq.m. was leased to Suzhou Shangsheng Electronic Co., Ltd. for a term commencing on 1 January 2011 and expiring on 31 December 2015 at a monthly rental of RMB68,573.25.
(7) Pursuant to a tenancy agreement entered into between Suzhou Hesheng Industrial Co., Ltd. and Suzhou City Xiangcheng District Shangsheng Rijiu Dianduchang (蘇州市相城區尚聲日久電鍍廠), a portion of the property with a gross floor area of approximately 3,960 sq.m. was leased to Suzhou City Xiangcheng District Shangsheng Rijiu Dianduchang for a term commencing on 1 October 2009 and expiring on 30 September 2014 at a monthly rental of RMB35,640.
(8) Suzhou Hesheng Industrial Co., Ltd. is 51.0% interest-owned by the Company.
(9) The major certificates and permits of the property are summarized as follows:
(i) State-owned Land Use Rights Certificate Yes (ii) Building Ownership Certificate Yes
(10) We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal adviser, which contains, inter alia , the following:
(i) Suzhou Hesheng Industrial Co., Ltd. legally owns the property and is entitled to lease, use, transfer, mortgage and dispose of the property in accordance with the law;
(ii) The property is not subject to any mortgage; and
(iii) A portion of the property with a gross floor area of approximately 11,579.25 sq.m. are subject to various tenancy agreements which are legal and valid although the tenancy agreements have not been registered.

PROPERTY VALUATION REPORT

APPENDIX IV

VALUATION CERTIFICATE

Property

Description and Tenure

Particular of Occupancy

Market Value in Existing State as at 30 April 2013

4 Land and Various Buildings located at No. 119 Shihu Road West, Wuzhong District, Suzhou City, Jiangsu Province, the People’s Republic of China (位於中華人民共和國江蘇省蘇州市蘇州市吳中區石湖西路119號之土地和房屋)

The property comprises two parcels of land with a total area of approximately 8,124.4 sq.m. erected upon a 2-storey industrial/office composite building and a 2-storey industrial building completed in various stages between 2003 and 2006.

The total gross floor area of the buildings is approximately 7,392.65 sq.m.

The property is currently RMB10,800,000 occupied by the Disposal (Renminbi Group for industrial Ten Million purposes. Eight Hundred Thousand)

30.6% Interest Attributable to the Disposal Group: RMB3,300,000

The land use rights of the property were granted for terms with expiry dates between 21 May 2051 and 11 August 2052 for industrial use.

Notes:

(1) Pursuant to a State-owned Land Use Rights Certificate – Wu Guo Yong (2003) Di No. 20395 issued by Suzhou City Land Resources Bureau – Wuzhong Branch dated 20 May 2003, the land use rights of a parcel of land with a site area of approximately 3,434.9 sq.m. were granted to Suzhou Yanlong Electronic Product Co. Ltd. (蘇州延龍電子有限公司) for a term expiring on 21 May 2051 for industrial use.
(2) Pursuant to a State-owned Land Use Rights Certificate –Wu Guo Yong (2003) Di No. 20396 issued by Suzhou City Land Resources Bureau – Wuzhong Branch dated 20 May 2003, the land use rights of a parcel of land with a site area of approximately 4,689.5 sq.m. were granted to Suzhou Yanlong Electronic Product Co. Ltd. for a term expiring on 11 August 2052 for industrial use.
(3) Pursuant to a Building Ownership Certificate – Su Fang Quan Zheng Wuzhong Zi Di No. 00242851 issued by Suzhou City Wuzhong District Housing and Urban-Rural Construction Bureau registered on 8 October 2011, the building ownership rights of a non-domestic building with a gross floor area of approximately 2,058.24 sq.m. are owned by Suzhou Yanlong Electronic Product Co. Ltd.
(4) Pursuant to a Building Ownership Certificate – Su Fang Quan Zheng Wuzhong Zi Di No. 00088833 issued by Suzhou City Housing Administration Bureau dated 22 January 2008, the building ownership rights of a non-domestic building with a gross floor area of approximately 5,334.41 sq.m. are owned by Suzhou Yanlong Electronic Product Co. Ltd.
(5) Suzhou Yanlong Electronic Product Co. Ltd. is 30.6% interest-owned by the Company.

APPENDIX IV

PROPERTY VALUATION REPORT

(6) The major certificates and permits of the property are summarized as follows:
(i) State-owned Land Use Rights Certificate Yes

(ii) Building Ownership Certificate Yes

(7) We have been provided with a legal opinion regarding the property interests by the Company’s PRC legal adviser, which contains, inter alia , the following:
(i) Suzhou Yanlong Electronic Product Co. Ltd. legally owns the property and is entitled to lease, use, transfer, mortgage and dispose of the property in accordance with the law;
(ii) The property is not subject to any mortgage.

GENERAL INFORMATION

APPENDIX V

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM Listing Rules for the purpose of giving information with regard to the Group. The Directors, having made all reasonable inquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

2. DISCLOSURE OF INTERESTS

(a) Directors’ and chief executives’ interests and short positions in shares, underlying shares and debentures of the Company

As at the Latest Practicable Date, the interests of the Directors and chief executives of the Company in the Shares, underlying Shares or debentures of the Company o any of its associated corporations (within the meaning of Part XV of the SFO), which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO), or which were required to be entered in the register maintained by the Company pursuant to Section 352 of the SFO, or which were required to be notified to the Company and the Stock Exchange pursuant to Rules 5.46 to 5.67 of the GEM Listing Rules were as follows:

Long positions

			Approximate
		Number of	percentage of
		Shares or	issued share
		underlying	capital of
Name	Capacity	Shares held	the Company
Mr. Shan Xiaochang	Interest of a	239,556,536	55.48%
	controlled corporation	(Note 1)
	Beneficial owner	35,000,000	8.11%
		(Note 2)

Notes:

(1) These shares are held by Zhongyu Group Holdings Limited. The entire issued share capital of Zhongyu Group Holdings Limited is beneficially owned by Mr. Shan Xiaochang, the Chairman, the Chief Executive Officer and the executive Director, who is therefore deemed to be interested in the shares held by Zhongyu Group Holdings Limited.

GENERAL INFORMATION

APPENDIX V

(2) Total number of shares to be alloted and issued upon exercise in full of options under share option scheme adopted by the Company on 8 July 2002. These share options were conditionally granted to Mr. Shan Xiaochang, the Chairman, the Chief Executive Officer and the executive Director on 2 September 2011. Such grants were approved by independent shareholders of the Company at the extraordinary general meeting of the Company on 20 October 2011.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or chief executives of the Company had any interests and short positions in the Shares, underlying Shares and debentures of the Company or any associated corporation (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they are taken or deemed to have under such provisions of the SFO), or which were required to be entered in the register maintained by the Company pursuant to Section 352 of the SFO, or which were required to be notified to the Company and the Stock Exchange pursuant to Rules 5.46 to 5.67 of the GEM Listing Rules.

(b) Substantial shareholders’ and other person’s interests and short positions in shares, underlying shares and debentures of the Company

As at the Latest Practicable Date, save as disclosed below, so far as is known to the Directors and the chief executives of the Company, no person (other than a Director or a chief executive of the Company) has an interest or short position in the Shares or underlying Shares of the Company which will fall to be disclosed to the Company under the provisions of Part XV of the SFO and no person (other than the Directors or chief executives of the Company), has an interest or short position in the Shares or underlying Shares, who is expected, directly or indirectly, to be interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group or has any options in respect of such capital.

Long positions

			Approximate
		Number of	percentage of
		Shares or	issued share
		underlying	capital of
Name	Capacity	Shares held	the Company
Zhongyu Group Holdings	Beneficial owner	239,556,536	55.48%
Limited_(Note 1)_
Mr. Shan Xiaochang	Interest of a	239,556,536	55.48%
(Note 1)	controlled corporation
	Beneficial owner	35,000,000	8.11%
		(Note 2)

GENERAL INFORMATION

APPENDIX V

			Approximate
		Number of	percentage of
		Shares or	issued share
		underlying	capital of
Name	Capacity	Shares held	the Company
Ms. Wu Shuhua_(Note 3)_	Interest of spouse	274,556,536	63.59%
Mr. Chan Ping Yee	Beneficial owner	73,675,000	17.06%
Ms. Liu Sau Wan_(Note 4)_	Interest of spouse	73,675,000	17.06%
Concept Capital	Beneficial owner	146,163,814	33.85%
Management Limited

Notes:

(1) The entire issued share capital of Zhongyu Group Holdings Limited was solely and beneficially owned by Mr. Shan Xiaochang, the Chairman and the Chief Executive Officer and the executive Director, who is therefore deemed to be interested in the shares held by Zhongyu Group Holdings Limited.
(2) Total number of shares to be alloted and issued upon exercise in full of options under share scheme adopted by the Company on 8 July 2002. These share options were conditionally granted for Mr. Shan Xiaochang, the Chairman, the Chief Executive Officer and the executive Director on 2 September 2011. Such grants were approved by independent shareholders of the Company at the extraordinary general meeting of the Company on 20 October 2011.
(3) Ms. Wu Shuhua is the spouse of Mr. Shan Xiaochang and, under section 316 of the SFO, is therefore deemed to be interested in all 274,556,536 shares in which Mr. Shan Xiaochang is interested.
(4) Ms. Liu Sau Wan is the spouse of Mr. Chan Ping Yee and, under section 316 of the SFO, is therefore deemed to be interested in all 73,675,000 shares in which Mr. Chan Ping Yee is interested.
(5) The latest disclosure of interest notice filed by Concept Capital Management Limited has not taken into account the reset adjustment to the conversion and exercise prices on 9 May 2012.

3. DIRECTORS’ SERVICE CONTRACTS

Each of Mr. Shan Xiaochang, Ms. Shan Zhuojun and Mr. Ma Arthur On-hing entered into an appointment letter with the Company on 10 September 2010. They have no fixed term of service with the Company save that they are subject to retirement by rotation in accordance with the articles of association of the Company.

Each of Mr. Wang Jialian, Mr. Wang Zhihua and Ms. Chan Sze Man entered into a 2-year service contract with the Company and they are subject to retirement by rotation in accordance with the articles of association of the Company.

GENERAL INFORMATION

APPENDIX V

Save as disclosed above, as at the Latest Practicable Date, none of the Directors had any existing or proposed service contract with any member of the Group which does not expire or is not terminable by such member of the Company within one year without payment of any compensation (other than statutory compensation).

4. DIRECTORS’ INTERESTS IN COMPETING BUSINESS

As at the Latest Practicable Date, so far as the Directors were aware, none of the Directors or their respective associates were considered to have interest in any business which competes or may compete, either directly or indirectly, with the business of the Group or have or may have any other conflicts of interest with the Group pursuant to the GEM Listing Rules.

5. INTEREST OF DIRECTORS IN ASSETS OR CONTRACT ON ARRANGEMENT

As at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any assets which had been acquired or disposed of by or leased to any member of the Group, or were proposed to be acquired or disposed of by or leased to any member of the Group since 31 December 2012, the date to which the latest published audited consolidated financial statements of the Company were made up.

As at the Latest Practicable Date, there was no contract or arrangement subsisting in which any Director was materially interested and which was significant in relation to the business of the Group.

6. LITIGATION

As at the Latest Practicable Date, so far as the Directors are aware, no member of the Group was engaged in any litigation or arbitration of material importance and no litigation or claim of material importance pending or threatened by or against any member of the Group.

7. MATERIAL CONTRACTS

Within the two years immediately preceding the date of this circular, the following agreements, being contracts not entered into in the ordinary course of business, have been entered into by members of the Company and are or may be material:

(a) the supplemental deed dated 30 June 2011 entered into between the Company, Glad Phoenix Holdings Limited and Mr. Tong Chi Keung Jose in relation to the further extension of the long stop date of the sale and purchase agreement dated 5 January 2011 in respect of the acquisition of 51% interest in Confident Echo Holdings Limited;
(b) the supplemental deed dated 31 August 2011 entered into between the Company, Glad Phoenix Holdings Limited and Mr. Tong Chi Keung Jose in relation to the further extension of the long stop date of the sale and purchase agreement dated 5 January 2011 in respect of the acquisition of 51% interest in Confident Echo Holdings Limited;

GENERAL INFORMATION

APPENDIX V

(c) the contract dated 1 September 2011 (the “ Machines Contract ”) entered into between Time Pro International Company Limited (a then indirect wholly-owned subsidiary of the Company at that time) and 宜興市興遠物貿有限公司 (Yixing Xingyuan Materials Trade Co., Ltd.*) for the purchase of 2 sets of gasifier machines for a total consideration of US$4,000,000;
(d) the contract dated 9 September 2011 entered into between Time Pro International Company Limited (a then indirect wholly-owned subsidiary of the Company at that time) and Eco Tech New Energy Company Limited for the construction work for the construction of a heat production plant employing biomass gasification system in Thailand at an aggregate consideration of THB174,700,000;
(e) the loan agreement dated 18 January 2012 (the “ Loan Agreement ”) entered into between Tong Heng Company Limited, the Company and Mr. Shan Xiaochang (an executive Director) in respect of an unsecured and interest bearing loan of HK$30,000,000 granted by Tong Heng Company Limited to the Company;
(f) a supplemental agreement dated 1 March 2012 entered into between Time Pro International Company Limited (a then indirect wholly-owned subsidiary of the Company at that time) and 宜興市興遠物貿有限公司 (Yixing Xingyuan Materials Trade Co., Ltd.*) to extend the expected delivery date of the 2 sets of gasifier machines under the Machines Contract;
(g) the termination agreement dated 31 August 2012 entered into between Time Pro International Company Limited (a then indirect wholly-owned subsidiary of the Company at that time) and 宜興市興遠物貿有限公司 (Yixing Xingyuan Materials Trade Co., Ltd.*) to terminate the Machines Contract;
(h) the supplemental agreement dated 31 August 2012 entered into between Time Pro International Company Limited (a then indirect wholly-owned subsidiary of the Company at that time) and 宜興市興遠物貿有限公司 (Yixing Xingyuan Materials Trade Co., Ltd.*) to extend the repayment date of the part payment in the amount of US$2,000,000;
(i) the sale and purchase agreement dated 30 October 2012 (the “ SP Agreement ”) entered into between the Company, Risen Talent Limited and Ms. Wong Yan Lan in respect of the acquisition of 51% interests in Pro-Worth Limited at a consideration of RMB21,840,000 (subject to adjustment) and a loan in the amount of RMB8,160,000 at a consideration equal to the principal amount;
(j) the sale and purchase agreement dated 29 November 2012 entered into between the Company and Mr. Pan Jun in respect of the disposal of the entire issued share capital of Time Pro International Company Limited (a then indirect wholly-owned subsidiary of the Company at that time) at a consideration of HK$2,000,000;
(k) the sale and purchase agreement dated 10 December 2012 entered into between Rise Joy Investment Limited (an indirect wholly-owned subsidiary of the Company) and Mr. Wu Qin Min in respect of the acquisition of 51% interest in Heilongjiang Shengyan (the “ Sale Interest ”) at a consideration of RMB15,500,000;

GENERAL INFORMATION

APPENDIX V

(l) a trust agreement dated 10 December 2012 entered into between Rise Joy Investment Limited (an indirect wholly-owned subsidiary of the Company) and Mr. Wu Qin Min pursuant to which Mr. Wu shall hold the Sale Interest upon trust for Rise Joy Investment Limited pending completion of all necessary procedures for completion of the transfer of the Sale Interest;
(m) the cancellation agreement dated 10 December 2012 entered into between the Company, Risen Talent Limited and Ms. Wong Yan Lan to rescind and terminate the SP Agreement;
(n) the supplemental agreement dated 22 January 2013 entered into between Tong Heng Company Limited, the Company and Mr. Shan Xiaochang (an executive Director) to extend the repayment date of the loan in the amount of HK$30,000,000 under the Loan Agreement;
(o) the supplemental agreement dated 11 March 2013 entered into between Tong Heng Company Limited, the Company and Mr. Shan Xiaochang (an executive Director) to extend the repayment date of the loan in the amount of HK$30,000,000 under the Loan Agreement;
(p) the supplemental agreement dated 3 April 2013 entered into between Tong Heng Company Limited, the Company and Mr. Shan Xiaochang (an executive Director) to extend the repayment date of the remaining loan in the amount of HK$20,000,000 under the Loan Agreement;
(q) the Sale and Purchase Agreement; and
(r) the supplemental agreement dated 16 May 2013 entered into between Tong Heng Company Limited, the Company and Mr. Shan Xiaochang (an executive Director) to extend the repayment date of the remaining loan in the amount of HK$20,000,000 under the Loan Agreement.

8. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position of the Group since 31 December 2012, the date to which the latest published audited financial statements of the Company were made up.

GENERAL INFORMATION

APPENDIX V

9. EXPERTS AND CONSENTS

The following are the qualifications of the expert who has been named in the circular and has given opinion or letter contained in this circular:

Name Qualification Grand Vinco Capital Limited a corporation licensed to carry out type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activities as defined under the SFO CCTH CPA Limited Certified Public Accountants Ascent Partners Independent professional property valuer Valuation Service Limited 江蘇力信律師事務所 PRC legal adviser (Jiangsu Lixin Law Firm*)

As at the Latest Practicable Date, each of the experts mentioned above:

(a) had given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter/report and reference to its name in the form and context in which it appears;
(b) did not have any direct or indirect interest in any asset which had been acquired, disposed of by, or leased to any member of the Group, or was proposed to be acquired, disposed of by, or leased to any member of the Group since 31 December 2012, the date to which the latest audited financial statements of the Group were made up; and
(c) did not have any shareholding in any member of the Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

10. MISCELLANEOUS

(a) The principal share registrar and transfer office of the Company is Royal Bank of Canada Trust Company (Cayman) Limited, the address of which is 4th Floor, Royal Bank House, 24 Shedden Road, George Town, Grand Cayman KY1-1110, Cayman Islands. The branch share registrar and transfer office of the Company in Hong Kong is Union Registrars Limited, the address of which is 18th Floor, Fook Lee Commercial Centre, Town Place, 33 Lockhart Road, Wanchai, Hong Kong.
(b) The company secretary of the Company is Mr. Tam Chak Chi, who is an associate member of the Hong Kong Institute of Certified Public Accountants and a member of the American Institute of Certified Public Accountants.
(c) The compliance officer of the Company is Mr. Shan Xiaochang, an executive Director and one of the authorised representatives of the Company.

GENERAL INFORMATION

APPENDIX V

(d) The Company has established an audit committee, comprising of three independent nonexecutive Directors, namely Ms. Chan Sze Man (Chairman of the audit committee), Mr. Wang Jialian and Mr. Wang Zhihua, in compliance with the GEM Listing Rules. The primary role and function of the audit committee of the Company are to oversee the relationship with the external auditors, to review the Group’s preliminary quarterly results, interim results and annual financial statements and to monitor compliance with statutory and listing requirements, to engage independent legal or other advisers as it determines is necessary and to perform any investigations. Please refer to the annual report of the Company for the year ended 31 December 2012 for the background and directorships of the audit committee members.
(e) This circular is prepared in both English and Chinese. In the event of inconsistency, the English text shall prevail.

11. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection during normal business hours from 9:00 a.m. to 6:00 p.m. (except Saturdays and public holidays) at the head office and principal place of business of the Company in Hong Kong at Units 01-03, 28th Floor, Shui On Centre, 6-8 Harbour Road, Wanchai, Hong Kong, from the date of this circular up to and including 18 July 2013, being the date of the EGM:

(a) the memorandum and articles of association of the Company;
(b) the annual reports of the Company for each of the financial years ended 31 December 2011 and 2012;
(c) the material contracts referred to under the paragraph headed “Material contracts” in this appendix;
(d) the Directors’ service contracts referred to in the section headed “Directors’ service contracts in this appendix;
(e) the report on review of the financial information of the Disposal Group from CCTH CPA Limited, the text of which set out in appendix I to this circular;
(f) the accountants’ report on unaudited pro forma financial information of the Remaining Group from CCTH CPA Limited, the text of which is set out in Appendix II of this circular;
(g) the valuation report from Ascent Partners Valuation Service Limited, the text of which is set out in Appendix IV of this circular;
(h) the letter from the Independent Board Committee, the text of which is set out in the section headed ‘‘Letter from the Independent Board Committee’’ in this circular;

GENERAL INFORMATION

APPENDIX V

(i) the letter from Grand Vinco Capital Limited, the text of which is set out in the section headed ‘‘Letter from the Vinco Capital’’ in this circular;
(j) the written consents of the experts as referred to in the paragraph headed “Experts and Consents” in this appendix;
(k) the Sale and Purchase Agreement; and
(l) this circular.

NOTICE OF EGM

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==> picture [267 x 40] intentionally omitted <==

(incorporated in the Cayman Islands with limited liability) (Stock Code: 8226)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of Sunrise (China) Technology Group Limited (the “ Company ”) will be held at Units 01-03, 28th Floor, Shui On Centre, 6-8 Harbour Road, Wanchai, Hong Kong on Thursday, 18 July 2013 at 10:00 a.m. for the purpose of considering and, if thought fit, passing with or without amendments, the following resolution as an ordinary resolution of the Company:

ORDINARY RESOLUTION

“ THAT

(a) the conditional sale and purchase agreement dated 2 May 2013 (the “ Sale and Purchase Agreement ”) (a copy of which has been produced at the meeting marked “A” and signed by the chairman of the meeting for the purpose of identification) entered into between the Company as vendor and Buena Holdings Limited (the “ Purchaser ”) as purchaser in relation to the sale and purchase of (i) 2 shares of US$1.00 each in the issued share capital of Taraki Inc. (representing its entire issued share capital) and (ii) all obligations, liabilities and debts owing or incurred by Taraki Inc. to the Company on or at any time prior to completion of the Sale and Purchase Agreement (“ Completion ”) whether actual, contingent or deferred and irrespective of whether or not the same is due and payable on Completion at an aggregate consideration of HK$122,000,000 and the transactions contemplated thereunder be and are hereby approved, confirmed and ratified; and
(b) any one or more director(s) of the Company be and are hereby authorised on behalf of the Company to do all such things and sign, seal, execute, perfect and deliver all such documents as he/she/they may in his/her/their discretion consider necessary, desirable or expedient, for the purposes of or in connection with the implementation and/or give effect to any matters relating to the Sale and Purchase Agreement (including but not limited to entering into any supplemental or variation agreement thereto) and the transactions contemplated thereunder.”

Yours faithfully,

For and on behalf of the Board of Directors of Sunrise (China) Technology Group Limited Shan Xiaochang

Chairman

Hong Kong, 28 June 2013

NOTICE OF EGM

Registered office: Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman, KY1-1111 Cayman Islands

Head office and principal place of business in Hong Kong: Units 01-03, 28th Floor Shui On Centre 6-8 Harbour Road Wan Chai, Hong Kong

Notes:

Any member entitled to attend and vote at the above meeting is entitled to appoint one or more than one proxy to attend and to vote in his stead in accordance with the articles of association of the Company. A proxy need not to be a member of the Company.
Whether there are joint registered holders of any share, any one of such persons may vote at the meeting, either personally or by proxy, in respect of such share as if he were solely entitled thereto; but if more than one of such joint holders be present at the meeting personally or by proxy, then one of the said holders so present whose name stands first on the register of members of the Company in respect of such share shall alone be entitled to vote in respect thereof.
To be valid, the form of proxy and the power of attorney or other authority, if any, under which it is signed or a notarially certified copy of such power of attorney or authority must be deposited at the Company’s Hong Kong branch share registrar, Union Registrars Limited at 18th Floor, Fook Lee Commercial Centre, Town Place, 33 Lockhart Road, Wanchai, Hong Kong not less than 48 hours before the time for holding the above meeting or any adjournment thereof.
Delivery of a form of proxy shall not preclude a member from attending and voting in person at the above meeting and in such event, the form of proxy shall be deemed to be revoked.

AI assistant

KOALA Financial Group Limited — Proxy Solicitation & Information Statement 2013

51341_rns_2013-06-28_6e1cff17-e9c9-4921-b468-a13e3f1c248a.pdf

VERY SUBSTANTIAL DISPOSAL AND CONNECTED TRANSACTION IN RELATION TO THE DISPOSAL OF THE ENTIRE INTERESTS OF A WHOLLY-OWNED SUBSIDIARY AND NOTICE OF EXTRAORDINARY GENERAL MEETING

Financial Adviser

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

CHARACTERISTICS OF GEM

CONTENTS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

VERY SUBSTANTIAL DISPOSAL AND CONNECTED TRANSACTION IN RELATION TO THE DISPOSAL OF THE ENTIRE INTERESTS OF A WHOLLY-OWNED SUBSIDIARY

AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

LETTER FROM THE BOARD

THE SALE AND PURCHASE AGREEMENT

Assets to be disposed of

Consideration

LETTER FROM THE BOARD

Conditions of the Sale and Purchase Agreement

LETTER FROM THE BOARD

Completion

INFORMATION ON THE DISPOSAL GROUP

Before Completion

LETTER FROM THE BOARD

After Completion

LETTER FROM THE BOARD

LETTER FROM THE BOARD

LETTER FROM THE BOARD

PROPERTY INTERESTS OF THE DISPOSAL GROUP

Reconciliation

LETTER FROM THE BOARD

INFORMATION ON THE REMAINING GROUP

LETTER FROM THE BOARD

LETTER FROM THE BOARD

REASONS FOR THE DISPOSAL AND USE OF PROCEEDS

LETTER FROM THE BOARD

FINANCIAL EFFECT ON THE DISPOSAL

LETTER FROM THE BOARD

IMPLICATION UNDER THE GEM LISTING RULES

GENERAL

EGM

LETTER FROM THE BOARD

RECOMMENDATION

ADDITIONAL INFORMATION

VERY SUBSTANTIAL DISPOSAL AND CONNECTED TRANSACTION IN RELATION TO THE DISPOSAL OF THE ENTIRE INTERESTS OF A WHOLLY-OWNED SUBSIDIARY

Yours faithfully

Independent Board Committee of

Sunrise (China) Technology Group Limited

VERY SUBSTANTIAL DISPOSAL AND CONNECTED TRANSACTION IN RELATION TO THE DISPOSAL OF THE ENTIRE INTERESTS OF A WHOLLY-OWNED SUBSIDIARY

A. INTRODUCTION

LETTER FROM VINCO CAPITAL

B. BASIS OF OUR OPINION AND RECOMMENDATION

C. PRINCIPAL FACTORS AND REASONS CONSIDERED

1. Historical financial performance of the Group

LETTER FROM VINCO CAPITAL

2. Information on and the historical financial performance of the Disposal Group

LETTER FROM VINCO CAPITAL

3. Reasons for the Disposal and use of proceeds

LETTER FROM VINCO CAPITAL

LETTER FROM VINCO CAPITAL

LETTER FROM VINCO CAPITAL

4. Terms and conditions of the Sale and Purchase Agreement

The Consideration & payment method

Basis on the Consideration

LETTER FROM VINCO CAPITAL

Comparables analysis

LETTER FROM VINCO CAPITAL

LETTER FROM VINCO CAPITAL

5. Financial Effect on the Disposal

LETTER FROM VINCO CAPITAL

D. CONCLUSION

REPORT ON REVIEW OF UNAUDITED CONSOLIDATED FINANCIAL INFORMATION

TO THE BOARD OF DIRECTORS OF SUNRISE (CHINA) TECHNOLOGY GROUP LIMITED

Introduction

Scope of Review

Conclusion

Emphasis of matters

KOALA Financial Group Limited Proxy Solicitation & Information Statement 2013