Stock Code: 000055, 200055 Stock ID: Fangda Group, Fangda B Announcement No. 2010-44

    China Fangda Group Co., Ltd.

    Announcement of Related Transactions

    The members of the Board and the Company acknowledge being responsible for the truthfulness, accuracy, and completeness of the announcement. Not any false record, misleading statement or significant omission carried in this announcement.

    I. Profile of the related transaction

    1. In April 2007, the Company entered the “Debt Restructuring Agreement” with Shenzhen Fangda Special Structure Co., Ltd. (“Fangda Special Structure”). According to the agreement, Fangda Special Structure will collect the receivable accounts remained from previous business operations amounted to RMB11.8647 million on the Company’s behalf, and the Company will pay 8% of the amount whatever collected (including project warrant fees) to Fangda Special Structure as commission.

    2. In 2008, 2009, and 2010, the Company entered the purchasing and subcontracting contracts with Fangda Special Structure with amounts of RMB11.5071 million, RMB11.7363 million, and RMB12.0444 million respectively.

    3. In May 2008, the Company subcontracted the outer wall decoration project to Song Wenqing, with amount of RMB7.7394 million.

    The above mentioned trades have formed related transactions.

    II. Profiles of related parties

    1. Fangda Special Structure

    Legal representative: Ding Rongcai

    Registered capital: 50 million

    Registered address: Huangfengling Industrial Zone, Shiyan, Bao’an, Shenzhen

    Main businesses: manufacturing and trading of new-type construction materials, environment protection equipments; manufacturing of light steel structures, curtain walls; designing, producing, and installation of metal project and structures; pre-shaped doors and windows, aluminum doors and windows. Construction curtain wall engineering, metal door engineering; import and export of goods and technologies.

    2. Song Wenqing has been the Supervisor of the Company since 1995. This is complying with article 10.1.5 (II) of “Share Listing Rules of Shenzhen Stock Exchange”, and Song Wenqing is a related natural person of the Company. Song Wenqing had been the director of Fangda Sepcial Structure from 1996 to August 2010. This is complying with article 10.1.3 (III) of “Share Listing Rules of Shenzhen Stock Exchange”, and Fangda Special Structure is a related legal person of the Company.

    III. Basis and policies of pricingThe above trades were priced on the principle of free will, fairness, double win, and fair market prices. These trades form neither negative influence on the Company nor harming the interests of the related parties.

    Pricing was on the prices of similar businesses of the Company.

    IV. Purpose of the transactions and influences on the Company

    Fangda Special Structure is certified for installation engineering of curtain walls, doors and windows, which has certain reputation in the industry. The Company conducted this related transaction to well use the marketing resources. Prices of the above transactions were decided fairly and reasonable, harmed no interests of the Company or the shareholders. It will not cause dependence of the Company on these transactions.

    V. Examination procedures

    (I) This was examined and adopted by the Board at the 25th meeting of the 5th term of Board.

    (II) The independent directors participated in the voting and provided independent opinions: These related transactions are closely related to the Company’s daily business operations, which may benefit the Company by rational use of marketing resources. They are complying with the principle of maximum the shareholders’ interests, and make no harm on the Company or the investors.

    VI. Documents for reference

    1. Resolutions of the 25th meeting of the 5th term of Board;

    2. Independent opinions with the signatures of the independent directors;

    The above is for the attention of the shareholders.

    China Fangda Group Co., Ltd.

    The Board of Directors

    December 25, 2010