Xiangyang Changyuan Donggu Industrial Co., Ltd.

2020 Annual Report on the Performance of Duties by the Board of Directors Audit Committee

According to the relevant provisions of the "Operating Guidelines for Audit Committees of Listed Companies on the Shanghai Stock Exchange", the "Guidelines on Corporate Governance of Listed Companies", and the Company's "Implementation Rules for the Board of Directors Audit Committee", the Company's Board of Directors Audit Committee, adhering to the principle of diligence and responsibility, conscientiously fulfilled its duties, and hereby reports on its work for the year 2020 as follows:

I. Basic Information of the Audit Committee

The Company's Third Board of Directors Audit Committee is composed of three directors: Independent Director Mr. Yu Jingzhong, Independent Director Mr. Wang Hong, and Director Mr. Li Zuoyuan. The Chairman of the Audit Committee is held by Independent Director Mr. Yu Jingzhong, who possesses professional accounting qualifications.

II. Meeting Convening Status of the Audit Committee in 2020

During the reporting period, the Audit Committee held a total of 5 meetings. The details are as follows:

1.2020 On February 18, the Third Board of Directors Audit Committee held its seventh meeting, reviewing and approving the Proposal on the Audit Report of Xiangyang Changyuan Donggu Industrial Co., Ltd., the Proposal on the Company's Internal Control Self-Assessment Report, the Proposal on the Company's 2019 Annual Financial Final Accounts Report, the Proposal on the Company's 2020 Annual Financial Budget Report, the Proposal on the Company's 2019 Annual Profit Distribution, the Proposal on Reappointing Zhong Shen Zhong Huan Certified Public Accountants (Special General Partnership) as the Company's Auditor for 2020, and the Proposal on the Company Establishing a Special Storage Account for Raised Funds, and agreed to submit them to the Board of Directors for deliberation.

    2.2020 On May 19, the Third Board of Directors Audit Committee held its eighth meeting, reviewing and approving the Proposal on the Review Report for the First Quarter of 2020 of Xiangyang Changyuan Donggu Industrial Co., Ltd., and agreed to submit it to the Board of Directors for deliberation.

3.2020 On June 18, the Third Board of Directors Audit Committee held its ninth meeting, reviewing and approving the Proposal on Using Raised Funds to Replace Self-Raised Funds Previously Invested in Fund-Raising Projects, and agreed to submit it to the Board of Directors for deliberation.

4.2020 On August 9, the Third Board of Directors Audit Committee held its tenth meeting, reviewing and approving the Proposal on the Company's 2020 Semi-Annual Financial Report, the Proposal on the Company's 2020 Semi-Annual Report and Abstract, the Proposal on the Company's 2020 Semi-Annual Profit Distribution Pre-plan, and the Special Report on the Deposit and Actual Use of the Company's Raised Funds for the First Half of 2020, and agreed to submit them to the Board of Directors for deliberation.

5.2020 On October 28, the Third Board of Directors Audit Committee held its eleventh meeting, reviewing and approving the Proposal on the Company's 2020 Third Quarter Report, and agreed to submit it to the Board of Directors for deliberation.

III. Main Work of the Audit Committee in 2020

(I) Supervision and Evaluation of External Audit Institutions' Work

1. Proposing the engagement of external audit institutions

To ensure the smooth completion of the company's 2020 annual audit, according to relevant laws, regulations, and the Company's Articles of Association, after deliberation and voting by the Audit Committee, it proposed to the Board of Directors to reappoint Zhong Shen Zhong Huan Certified Public Accountants (Special General Partnership) as the company's auditor for 2020 for a term of one year. 2. Evaluation of the independence and professionalism of external audit institutions

Upon review, Zhong Shen Zhong Huan Certified Public Accountants (Special General Partnership), as the audit firm, was able to satisfactorily complete various tasks entrusted by the company and is qualified to engage in securities-related businesses. Since its appointment as the company's annual audit firm, it has been diligent and responsible, adhering to independent, objective, and impartial professional standards, and issued fair and reasonable independent audit opinions.

3. Discussion and communication on audit work and significant matters

During the reporting period, the Audit Committee and the external audit firm had full discussions and communications regarding audit scope, audit plan, audit methods, and other matters. No other significant matters were found during the audit period.

(II) Guidance on Internal Audit Work

During the reporting period, the Audit Committee had full communication with the company's internal audit personnel and offered guiding opinions on issues found during internal audits. Upon reviewing the internal audit work report, the Audit Committee did not find any major problems in the company's financial management and internal control.

(III) Reviewing the Company's Financial Reports and Expressing Opinions Thereon

During the reporting period, the Third Board of Directors Audit Committee carefully reviewed the Company's 2019 Annual Report, the 2020 First Quarter Financial Report, the 2020 Semi-Annual Financial Report, and the 2020 Third Quarter Financial Report, and believes that the content of the company's financial reports truthfully, accurately, completely, and fairly reflects the company's financial condition and operating results.

(IV) Assessment of Internal Control Effectiveness

The Company, in accordance with the requirements of relevant laws and regulations such as the "Company Law" and "Securities Law", and the relevant provisions of the China Securities Regulatory Commission and the Shanghai Stock Exchange, has established a relatively sound corporate governance structure and governance system. During the reporting period, the Company strictly implemented various laws, regulations, rules, its Articles of Association, and internal management systems. The Shareholders' Meeting, Board of Directors, Supervisory Board, and management operated in a standardized manner, effectively safeguarding the legitimate rights and interests of the Company and its shareholders. Therefore, the Audit Committee believes that the actual operation of the company's internal control complies with the requirements of relevant corporate governance standards for listed companies issued by the China Securities Regulatory Commission.

(V) Coordination of Communication among Management, Internal Audit Department, Relevant Departments, and External Audit Institutions

During the reporting period, the Audit Committee actively coordinated effective cooperation and full communication among management, the internal audit department, relevant departments, and external audit institutions, which ensured the smooth progress of the audit work and urged the completion of audit work as per regulations.

IV. Summary of Performance of Duties in 2020

During the reporting period, the Audit Committee strictly performed its duties in accordance with laws, regulations, and relevant provisions. Each member demonstrated diligence and responsibility in their work, playing an active role in supervising and evaluating external audit institutions' work, guiding the company's internal audit work, reviewing the company's financial reports, and assessing internal controls. In 2021, the Audit Committee will continue to standardize its performance, be diligent and responsible, and safeguard the interests of the company and all shareholders.

Hereby reported.

Yu Jingzhong Wang Hong Li Zuoyuan

March 22, 2021