AVIC (Chengdu) Unmanned Aerial Systems Co., Ltd

2024 Annual Report of Independent Directors (Chen Liancheng)

As an independent director of AVIC (Chengdu) Unmanned Aerial Systems Co., Ltd. (hereinafter referred to as the "Company"), in 2024, I will strictly comply with the provisions and requirements of laws, regulations, rules and normative documents such as the Company Law of the People's Republic of China, the Rules for the Listing of Stocks on the Science and Technology Innovation Board of the Shanghai Stock Exchange, the Self-Regulatory Guidelines for Listed Companies on the Science and Technology Innovation Board of the Shanghai Stock Exchange No. 1 - Standardized Operation, and the Measures for the Administration of Independent Directors of Listed Companies, as well as the Articles of Association and the Working System for Independent Directors. During the performance of duties, we will uphold an objective, independent and impartial position, have a timely, comprehensive and in-depth understanding of the company's operation, and fulfill our duties and responsibilities diligently. Actively attend the board of directors and special committees, shareholders' meetings, and special meetings of independent directors, carefully deliberate on various proposals, and effectively play the role of "participating in decision-making, supervision, checks and balances, and professional consultation", effectively improve the level of corporate governance, and safeguard the overall interests of the company and the legitimate rights and interests of small and medium-sized shareholders. The performance of duties in 2024 is reported as follows:

1. Basic information of independent directors

(1) The status of independent directors

The fifth board of directors of the company completed the general election in September 2022, with a total of 9 directors, including 3 independent directors, namely me, Mr. Chen Liang and Ms. Zhao Yin, accounting for one-third of the board of directors, in line with relevant laws and regulations and the provisions of the company's system.

(2) The appointment of independent directors to special committees of the board of directors

I serve as the chairman of the Audit and Risk Control Committee of the Board of Directors.

(3) Personal work history, professional background, and part-time employment

Mr. Chen Liancheng, the current independent director of the company, born in 1955, Chinese nationality, no right of permanent residence abroad, graduated from Zhengzhou Institute of Aeronautical Industry Management with a bachelor's degree in financial accounting, and graduated from Southwest University of Science and Technology with a bachelor's degree in law, and is a certified public accountant and a senior accountant. From December 1978 to October 1998, he successively served as accountant, office director, section chief, deputy division chief, division director, division director, deputy chief economist, director of the Economic Management Committee, deputy chief auditor and chairman of the board of supervisors of the state-owned 420 factory (now "AECC Chengdu Engine Co., Ltd."); October 1998 to

Director of Accounting Firm LLC; From May 2004 to May 2010, he served as an independent director of Chengfei Integration; Since May 2023, he has served as a director of Sichuan Zhihe Finance and Taxation Consulting Co., Ltd.; Since March 2021, he has served as an independent director of AVIC UAV.

(4) An explanation of whether there are circumstances affecting independence

As an independent director of the Company, I do not hold any position in the Company other than that of an independent director, and there is no relationship with the Company and major shareholders of the Company that hinders my independent and objective judgment, and there is no circumstance that affects the independence of independent directors.

2. Overview of the annual performance of duties by independent directors

(1) The participation of independent directors in the board of directors and the general meeting of shareholders

In 2024, the company held a total of 11 board meetings and 2 general meetings of shareholders. As an independent director, I have maintained close communication with the Company and relevant parties, carefully studied the relevant materials, voted in favor of all the proposals deliberated, and made full use of my professional knowledge to exercise the powers of independent directors objectively, independently and prudently in combination with the actual operation of the Company, so as to ensure the scientific decision-making of the Board of Directors of the Company. During the reporting period, there were no unexcused absences or two consecutive non-attendances in person. During the reporting period, the details of my attendance at the company's board of directors meetings and shareholders' meetings are as follows:

Table 1: Attendance of independent directors at the company's board of directors and shareholders' meetings in 2024

Attendance at Board of Directors Shareholders Attending

Independent Board of Directors General Assembly

Name of event Should be present In person Commissioned by correspondence Absent Whether there are two consecutive non-attendances

Number of seats Number of attendances Number of seats Number of times Number of in-person attendances

Chen Liancheng 11 11 7 0 0 No 2

(2) Participation in special committees

In 2024, as the chairman of the Audit and Risk Control Committee of the Board of Directors, I actively convened special committee meetings, attended meetings, presided over and organized deliberations on relevant matters, and did not have any unexcused absences. It has played an important role in deliberating and making decisions on major matters related to the board of directors, and has effectively improved the decision-making efficiency of the board of directors of the company. In FY2024, the Audit and Risk Control Committee of the Board of Directors held 7 meetings, deliberated 19 proposals, and heard 6 agenda items. The convening and convening of the meetings of the special committees are in accordance with the legal procedures, and the decision-making of relevant matters has fulfilled the necessary deliberation procedures and disclosure obligations, and complies with the relevant provisions of laws and regulations and the articles of association of the company.

During the reporting period, I actively studied a series of documents such as listing regulations, stock listing rules and corporate governance standards, paid attention to policy trends and regulatory developments, and actively participated in relevant training organized by the company and regulators. During the year, he successively participated in the training on the spirit of the New National Nine Articles, the special training on the reform of the independent director system of listed companies, the training on the standardized operation of listed companies, the training on the key minority of listed companies, the market value management of listed companies controlled by central enterprises, and the training on quality improvement of listed companies from the perspective of the capital market, so as to effectively improve the ability to perform duties as independent directors of listed companies.

(4) On-site inspection and the company's cooperation with independent directors

During the reporting period, I conducted many on-site inspections of the company and the Zigong UAV industrial base, and strengthened my understanding of the company's production capacity layout, operation and market prospects. During the year, I had a comprehensive and in-depth understanding of the company's business development through participating in meetings and pre-conference communication, using professional knowledge and corporate management experience to put forward constructive opinions and suggestions on the relevant proposals of the company's board of directors, and giving full play to the role of supervision and guidance. When I exercised my powers, the company's management actively cooperated and strengthened communication to ensure that I enjoyed the same right to know as other directors, and was able to respond and implement my concerns in a timely manner, which provided me with the necessary conditions and sufficient support for performing my duties.

(5) Communicate with internal audit institutions and accounting firms

In February 2024, I communicated with the company's internal audit institution and Dahua Certified Public Accountants (Special General Partnership), which is responsible for the audit of the listed company in 2023, on the company's audit results in 2023 and the progress of the audit completion stage, and confirmed the basic situation, main indicators and key matters of the annual audit. In December 2024, I communicated with the company's internal audit institution and Daxin Certified Public Accountants (Special General Partnership), which is responsible for the audit of the listed company in 2024, on the audit plan of the company's 2024 annual report, and determined the audit work schedule, audit scope and audit focus.

(6) Communication with small and medium-sized shareholders

During the year, I attended the company's 2023 annual performance briefing, the 2023 collective performance briefing of the aerospace sector of the Science and Technology Innovation Board, the 2024 semi-annual collective performance briefing of Sichuan jurisdiction, the 2024 semi-annual results briefing and the third quarter of 2024 performance briefing, and communicated with small and medium-sized investors on the company's operation and financial status. Attended the general meeting of shareholders of the company, and communicated with the small and medium-sized investors who participated in the meeting on the deliberations of the meeting and the company's operation of the company.

(7) Other communication situations

As the Chairman of the Audit and Risk Control Committee of the Board of Directors and an accounting professional, I am very concerned about corporate regulations

Efficient operation. During the reporting period, I attached great importance to the construction and operation of the Sichuan UAV Industry Innovation Center approved by the company, and had an in-depth understanding of the organizational structure, use of funds and scientific research cooperation of the innovation center, and suggested that the innovation center should establish and improve the internal management system, clarify the division of responsibilities, pay attention to the improvement of intellectual property protection and technological achievement transformation mechanism, help the innovation center to operate in a standardized and efficient manner, and better play its role as a platform in scientific and technological innovation and industrial drive. At the same time, from the perspective of scientific research project audit, I communicated with the company's project management department and audit department many times, and made suggestions and guidance on key links such as project budget implementation, fund use efficiency, procurement process compliance, R&D progress and quality control, so as to ensure the compliance and smooth progress of relevant R&D projects. In addition, I conducted special communication with the company's managers and relevant business departments on cost control matters, fully discussed the relevant reasons and measures, and suggested that the company reduce costs and increase efficiency by strengthening supply chain management, refined management, digital production, etc.

3. Key issues for independent directors in the performance of their duties during the year

In 2024, in accordance with the relevant laws, regulations, and the requirements of the Company Rules, the Working System for Independent Directors, the Working System for Special Meetings of Independent Directors and other rules and regulations on the duties and requirements of independent directors, I actively practiced the requirements of the reform of the independent director system, and focused on and reviewed the company's profit distribution, management of raised funds, related party transactions and other matters by participating in special meetings of independent directors and special committees of the board of directors, which played a positive role in enhancing the standardization of the operation of the board of directors and the effectiveness of decision-making.

(1) Related party transactions

During the reporting period, the Company's approval procedures for related party transactions complied with the relevant provisions of relevant laws, regulations and rules; The price of related party transactions is fair, the financial services business such as related party deposits and loans are fair and reasonable, and the interests of the company's shareholders and creditors are not harmed, and the necessity of the transaction and the fairness of pricing are in line with the relevant principles and requirements of related party transactions.

(2) External guarantees and capital occupation

During the reporting period, the company was not involved in external guarantees and capital occupation.

(3) The use of raised funds

During the reporting period, the company's approval procedures for the use of raised funds complied with the relevant provisions of relevant laws, regulations and rules; The company's use of raised funds does not affect the normal implementation of the investment projects of raised funds, and there is no disguised change in the investment direction of raised funds and damage to the interests of the company's shareholders, especially the interests of small and medium-sized shareholders, nor does the use of raised funds violate relevant laws and regulations.

(4) Nomination of directors and senior management

During the reporting period, the nomination procedures of the company's senior management personnel complied with the provisions of laws and regulations and the articles of association, and the qualifications of the elected and hired personnel met the requirements of the company law and the articles of association.

(5) Performance forecasts and performance reports

There is no material difference between the company's actual annual operating results and the information disclosed in the performance report. During the reporting period, the company was not involved in the disclosure of performance forecasts.

(6) Hiring or changing accounting firms

During the reporting period, the company's procedures for changing accounting firms were adequate and appropriate, and met the requirements of relevant laws and regulations; Daxin Certified Public Accountants (Special General Partnership) has the qualifications to serve as a financial audit and internal control audit institution, and has the corresponding professional knowledge and performance ability, which can meet the requirements of the company's annual audit work.

As the chairman of the Audit and Risk Control Committee of the Board of Directors and an accounting professional, during the change of accounting firm in the company, based on my professional experience, I reminded the company to do a good job in communicating with the previous and former audit institutions in accordance with laws and regulations, coordinate to ensure the smooth progress of the annual audit work, and at the same time take relevant compliance control measures.

(7) Cash dividends and other investor returns

During the reporting period, the company's profit distribution plan was formulated based on the actual situation of the company, in line with the relevant provisions on profit distribution in the "Company Law" and "Articles of Association", and the deliberation and decision-making procedures of this matter were legal and effective. There is no harm to the legitimate rights and interests of all shareholders, especially small and medium-sized shareholders.

(8) The fulfillment of the commitments of the company and its shareholders

During the reporting period, the company and its shareholders strictly complied with their commitments, and there was no violation of relevant commitments such as share restriction, intra-industry competition, and related party transactions.

(9) The implementation of information disclosure

During the reporting period, the company fulfilled its information disclosure obligations in strict accordance with the relevant laws and regulations such as the Rules for the Listing of Stocks on the Science and Technology Innovation Board of the Shanghai Stock Exchange, and the content of the announcement was true, accurate and complete, without any false records, misleading statements or major omissions, ensuring the timeliness and fairness of information disclosure and effectively safeguarding the legitimate rights and interests of the company's shareholders.

Based on the experience of participating in the company's performance briefing, I recommend that the company prepare a regular report on matters such as the company's core capacity building, the status of the company's research projects, the company's business risks and countermeasures, etc., which investors are concerned about

and pay attention to improving the accuracy and legibility of the content of the report to meet the information needs of investors.

(10) Implementation of internal control

During the reporting period, the Company continued to improve the internal control management system in strict accordance with the relevant provisions of laws and regulations such as the Basic Standards for Enterprise Internal Control, and supported the compliance and effective operation of various businesses. The company ensures the standardized operation of the company's shareholders' meeting, board of directors, board of supervisors and other institutions and the effectiveness of the internal control system, and can reasonably ensure the authenticity, legitimacy and integrity of the company's financial and accounting information; It can disclose information in a true, accurate, complete and timely manner, which effectively protects the interests of investors and the company.

(11) The operation of the board of directors and its subordinate committees

The board of directors of the company has set up three special committees: the audit and risk control committee, the nomination and remuneration assessment committee, and the strategy committee, and all the directors of the board of directors of the company, the special committees and the senior management of the company can abide by the principle of loyalty and diligence to the company, and make full use of their professional experience according to the relevant requirements of the China Securities Regulatory Commission and the Shanghai Stock Exchange, so as to promote the continuous improvement of the company's standardized operation level and the scientific decision-making level of the board of directors, and effectively play an important role in the corporate governance structure of the company.

(12) Other matters that the independent directors believe need to be improved or focused on by the listed company

I think the company's operation is standardized and effective, and the system is relatively sound. On this basis, in the event that the annual performance does not meet expectations, the company needs to identify the root causes, formulate a practical performance improvement plan, focus on the core business and high-growth areas to invest resources, and continue to reduce costs and increase efficiency, and continuously improve profitability. The company also needs to further strengthen internal controls to ensure the accuracy and transparency of financial data and prevent potential operational and financial risks. In addition, the company also needs to pay special attention to the progress of the use of raised funds, accelerate the construction of fundraising and investment projects, and improve the efficiency of the management of raised funds on the basis of legal compliance.

Fourth, the overall evaluation and recommendations

In 2024, as an independent director of the Company, I will always adhere to an independent, objective and impartial position, actively participate in corporate governance and business decision-making, and conscientiously fulfill my decision-making and supervision responsibilities. In the research and decision-making of the company's major issues, planning and implementation, information disclosure and protection of investors' rights and interests, I make full use of my own knowledge, put forward constructive suggestions, and make independent and objective judgments on matters that require decision-making by the board of directors, which further promotes the standardized operation and scientific decision-making of the company's board of directors, and promotes the continuous improvement of corporate governance level and operation quality.

In 2025, I will continue to strictly follow the relevant regulations and requirements such as laws and regulations, with a high sense of responsibility and

With a more rigorous attitude and pragmatic style, we will implement the requirements of the reform of the independent director system, continuously strengthen our own learning, improve the level of performance of duties, and actively and conscientiously perform the duties of independent directors. Further strengthen communication and cooperation with the board of directors, the board of supervisors and the management, provide more forward-looking and professional advice for the company's operation and management, business development, risk management, etc., help the company improve the efficiency and quality of decision-making, contribute to the company's steady development, and effectively safeguard the overall interests of the company and the legitimate rights and interests of investors.

It is hereby reported.

AVIC (Chengdu) Unmanned Aerial Systems Co., Ltd

Independent Director: Chen Liancheng

March 28, 2025