Announcement of Yahua Group on Investment in "Blasting Synthetic New Materials Project"

Announcement of Sichuan Yahua Industrial Group Co., Ltd. on Investment in Blasting Synthetic New Materials Project The Company and all members of the Board of Directors guarantee the truthfulness, accuracy and completeness of the information disclosure, and there are no false records, misleading statements or major omissions. I. Investment Overview Sichuan Zhonghua Industrial Group Co., Ltd. (hereinafter referred to as the Company) is a wholly-owned subsidiary of Sichuan Zhongding Blasting Engineering Co., Ltd. (hereinafter referred to as Zhongding Blasting) and Sichuan Jiuna New Material Co., Ltd. (hereinafter referred to as Jiuna New) Materials), Sichuan Hanyuan Lixing Materials Co., Ltd. (hereinafter referred to as Hanyuan Lixing) signed an agreement on September 9, 2011 to establish Sichuan Keteng New Materials Co., Ltd. in Hanyuan County, Ya'an City, Sichuan Province (to Approved as the quasi-standard, hereinafter referred to as Kraton new materials), engaged in the production and operation of explosive synthetic new materials and processing of incoming materials. Explosive processing is the use of explosives as an energy source. The use of instantaneous high temperature and high pressure generated by explosive explosion to modify, optimize, shape design and synthesize plastic metal, powder and other materials, mainly explosive new synthetic materials, explosive welding, explosion welding, explosion Hardening, explosion molding, etc. As an emerging high-tech industry, explosive processing is widely used in various fields such as chemical industry, shipbuilding, aerospace, mining, metallurgy, and pressure vessels, and has good development prospects. The funds required for the investment of Zhongding Blasting Company are all self-owned funds. The investment involves related party transactions. II. Basic information of all parties to the investment (1) Zhongding Blasting (a wholly-owned subsidiary of Sichuan Yahua Industrial Group Engineering Blasting Co., Ltd., a wholly-owned subsidiary of the Company). Registered capital: RMB 10,000 yuan. Company type: limited liability company. Registered address: No. 20, West Road, Ya'an City, Sichuan Province. Business Scope: Contracting for blasting demolition, earth and stone works, blasting technology consulting services, on-site mixed explosives and other related businesses, general contracting of mining projects (operating with qualification certificates), and sales of mineral products (except coal). (2) Jiuna New Materials (a holding subsidiary of Sichuan Jiuyuan Investment Holding Group Co., Ltd., a subsidiary of China Academy of Engineering Physics). Registered capital: RMB 10,000 yuan. Company type: limited liability company. Registered address: No. 64, Mianyangshan Road, Mianyang City (the second floor of M-10 Building, Science City). Legal representative: Zhang Hai. Business scope: R&D, production and sales of nanostructured synthetic diamond, fine powder and products of common synthetic diamond and other new materials. (3) Hanyuan Lixing. Registered capital: RMB is worth 10,000 yuan. Company type: limited liability company. Registered address: Shiyan Road, Xinxian City, Hanyuan County. Legal representative: Yang Rufei. Business scope: metal materials and products, institutional electrical equipment (including motorcycles), chemical light industrial materials and products, building materials, etc. III. Basic contents of the agreement (1) All parties to the Kraton New Materials Association: Party A: Zhongding Blasting; Party B: Jiuna New Materials; Party C: Hanyuan Lixing (2) Basics of Kraton New Materials Co., Ltd. Case 1, the company hangs: Sichuan Keteng New Materials Co., Ltd. (according to the industrial and commercial approval slogan) 2, the place of registration: Hanyuan County, Sichuan Province 3, registered capital: 5 million yuan, of which Zhongding blasting is funded by cash 2.75 million yuan, accounting for 55% of the registered capital; Jiuna New Materials contributed 1.75 million yuan in cash, accounting for 35% of the registered capital; Hanyuan Lixing invested 500,000 yuan in cash, accounting for 10% of the registered capital). 4. Scope of business: Production and operation of new materials for explosive synthesis and processing of incoming materials (finally subject to the registration of industrial and commercial registration authorities). (III) Corporate Governance Body of Kraton New Materials Company The board of directors and the board of supervisors are set up on Kraton New Materials, and 1 executive director and 1 supervisor are set up. The executive director shall be appointed by Party A and the supervisor shall be appointed by Party B. Ke Teng new materials set up the general manager 1 crane, appointed by Party A; set up the deputy general manager two cranes, Party B and Party C each appointed a hang; the financial controller is appointed by Party A. IV. Purpose of the investment, existing risks and impact on the company The company invested in the “Blasting Synthetic New Materials Project” to expand new business and extend the company's industrial chain. Because of the various factors that may be faced in the establishment process, and also the operational risks caused by changes in the market, investors are reminded to pay attention to investment risks. The company will fulfill the relevant relevant approval procedures and information disclosure obligations according to the progress of the project. Special announcement. Sichuan Yahua Industrial Group Co., Ltd. Board of Directors September 13, 2011

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