Xiangyang Changyuan Donggu Industrial Co., Ltd.

2020 Annual Performance Report of Independent Directors

2020 In the year, all independent directors of the Company strictly abided by the provisions of relevant laws and regulations such as the Company Law and the Securities Law, as well as the requirements of the Articles of Association and the Independent Director Work System conscientiously performed their duties and diligently carried out their responsibilities conscientiously exercised the rights granted by law, timely understood the Company's production and operation information, paid full attention to the Company's development status, actively attended relevant meetings convened by the Company, conscientiously reviewed board meeting proposals, prudently expressed independent opinions, effectively ensuring the rationality and fairness of the Company's operations, and effectively safeguarded the overall interests of the Company and the legitimate rights and interests of all shareholders, especially minority shareholders. Meanwhile, the Company also provided strong support for the work of independent directors, and there was no situation that hindered the independence of independent directors. We hereby report on our performance as independent directors for the year 2020 as follows:

I. Basic Information of Independent Directors

The current independent directors of the Company's third board of directors are Mr. Wang Hong, Mr. Peng Quanchun, Mr. Yu Jingzhong, and Ms. Pan Hong. Mr. Wang Hong serves as a member of the Board's Strategy Committee and Audit Committee, Mr. Peng Quanchun serves as a member of the Board's Nomination Committee, Strategy Committee, and Remuneration and Appraisal Committee, Mr. Yu Jingzhong serves as a member of the Board's Audit Committee, and Ms. Pan Hong serves as a member of the Board's Nomination Committee and Remuneration and Appraisal Committee.

As independent directors of the Company, we do not hold any positions in the Company other than independent director, nor do we hold positions in the Company's shareholder entities, and there are no circumstances that would affect our independence.

II. Overview of Independent Directors' Annual Performance

As independent directors of the Company, we strictly complied with the requirements of relevant laws and regulations, participating in the Company's major decision-making. We conscientiously reviewed board meeting proposals and materials, actively communicated with management to understand industry development trends and the Company's operating conditions, actively participated in discussions and offered reasonable suggestions and opinions on board meeting proposals from our respective professional perspectives, and paid close attention to important matters related to the Company's production and operation, and management decisions. We cast affirmative votes on all relevant proposals reviewed by the Board of Directors and its special committees, and there were no situations where independent directors were unable to express opinions.

During the reporting period, we all fulfilled our respective duties in accordance with the Articles of Association and relevant work rules, with a diligent, responsible, and honest attitude, operating in a standardized manner, and played our due role. To better fulfill our duties, the Company's independent directors, in addition to actively attending all board meetings and special committee meetings to understand the Company's operations and management, also timely obtained information on the Company's operating and management status and other relevant industry information; maintained daily contact with the Company through various means such as email, phone, and the internet, and occasionally raised questions and requested relevant information. By understanding the Company's operating and management status through multiple channels and methods, we gained a more intuitive understanding of the implementation of board decisions, providing a basis for subsequent major decision-making by the board, avoidance of major operating risks, and better performance of independent directors' duties.

During the reporting period, the Company held a total of 5 board meetings, including 2 regular meetings and 3 extraordinary meetings. A total of 3 general meetings of shareholders were held, 5 audit committee meetings, 1 strategy committee meeting, and 1 remuneration and appraisal committee meeting. There were no unexcused absences. Important matters reviewed at the above meetings included: periodic reports, re-appointment of accounting firms, profit distribution, and implementation of information disclosure, among other relevant matters. We believe that the convening and holding of the meetings complied with statutory procedures, major decisions fulfilled necessary approval procedures, and conformed to the provisions of laws and regulations and the Company's Articles of Association.

III. Key Matters of Concern for Independent Directors' Annual Performance

(I) Related Party Transactions

During the reporting period, the Company had no related party transactions.

(II) External Guarantees and Fund Occupation

During the reporting period, the Company had no external guarantees. Upon verification, as of December 31, 2020, no guarantees were provided to shareholders, actual controllers, or other related parties. There was no occupation of funds by controlling shareholders or related parties of the Company.

(III) Use of Raised Funds

During the reporting period, the Company used the raised funds in accordance with the provisions and requirements of relevant laws, regulations, and normative documents, and timely disclosed the use of raised funds. There were no violations in the use and management of raised funds.

(IV) Appointment or Replacement of Accounting Firm

During the reporting period, the Company did not replace its accounting firm. ZhongShen ZhongHuan Certified Public Accountants (Special General Partnership), in providing audit services to the Company, was able to adhere to the 'China Independent Auditing Standards for Certified Public Accountants', diligently completed all audit work, and objectively and fairly expressed independent audit opinions. All our independent directors unanimously agreed to re-appoint the firm as the Company's annual audit institution.

(V) Cash Dividends and Other Investor Returns

During the reporting period, we reviewed the Company's Board of Directors' proposal for the 2020 semi-annual profit distribution plan, believing that the proposal complied with the Articles of Association and the actual situation, and agreed to submit this proposal to the general meeting of shareholders for deliberation. This proposal was approved by the Company's general meeting of shareholders on August 25, 2020.

(VI) Fulfillment of Commitments by the Company and Shareholders

During the reporting period, all commitments made by the Company and its shareholders were strictly adhered to, and there were no instances of the Company, actual controllers, or senior management violating relevant commitments.

(VII) Implementation of Information Disclosure

We supervised the Company's information disclosure for the year 2020, and we believe that the Company's information disclosure work complied with the provisions of the Articles of Association and the Company's Information Disclosure Management System, fulfilled necessary approval and submission procedures, and the information disclosed was true, accurate, complete, and timely. There were no false records, misleading statements, or major omissions.

(VIII) Implementation of Internal Control

During the reporting period, the Company's internal control work was effectively promoted with the full support of the Company's Board of Directors and Supervisory Committee, continuously accumulating management experience, and continuously improving the internal control system in accordance with internal control standards and disclosure requirements.

(IX) Operation of the Board of Directors and its Special Committees

During the reporting period, the Company's Board of Directors established four special committees: the Strategy Committee, Audit Committee, Remuneration and Appraisal Committee, and Nomination Committee, and at least one independent director served as a member of each special committee. Each special committee of the Company, in accordance with the provisions of its respective work rules, reviewed matters such as the Company's operating strategy, financial reports, and employee remuneration, and actively provided suggestions and opinions to the Company, fully leveraging their professional roles in the Company's operation and management.

IV. Overall Assessment and Recommendations

As independent directors of the company, in 2020, we, in the spirit of diligence and conscientiousness, fulfilled our obligations as independent directors in accordance with the requirements of various laws and regulations. We played the role of independent directors in areas such as the company's standardized operation, sound corporate governance structure, improved internal control system, prevention of operational risks, and major project decision-making, effectively safeguarding the legitimate rights and interests of all shareholders, especially small and medium-sized shareholders.

2021 In the year, we will, as always, diligently and conscientiously fulfill our duties as independent directors, safeguarding the legitimate rights and interests of the vast number of investors, especially small and medium-sized investors. We will strengthen our professional knowledge and pay attention to the company's actual operations, especially the legitimate rights and interests of small and medium-sized investors. We will strengthen our professional knowledge and pay attention to the company's actual operations, continuously improving our performance capabilities, providing more constructive suggestions for the company's development, offering reference opinions for the board's decisions, and enhancing the company's decision-making level and operational efficiency.

The above is the performance report of the company's independent directors for 2020, submitted for review by the company's shareholders.

Independent Directors: Wang Hong, Peng Quanchun, Yu Jingzhong, Pan Hong

March 22, 2021