Audit Report
Hua Xing Accounting Firm (Special General Partnership)
Fujian Yuanli Activated Carbon Co., Ltd. Audit Report
Hua Xing Audit No. [2026] 25016440032
To all shareholders of Fujian Yuanli Activated Carbon Co., Ltd.:
1. Audit Opinion
We have audited the financial statements of Fujian Yuanli Activated Carbon Co., Ltd. (hereinafter referred to as Yuanli Co.), including the consolidated and parent company balance sheets as of December 31, 2025, the consolidated and parent company income statements, consolidated and parent company cash flow statements, and consolidated and parent company statements of changes in equity, along with the accompanying notes to the financial statements. In our opinion, the attached financial statements have been prepared in all material respects in accordance with the provisions of the Accounting Standards for Business Enterprises and fairly present the consolidated and parent company financial position of Yuanli Co. as of December 31, 2025, as well as the consolidated and parent company operating results and cash flows for the year 2025.
2. Basis for Audit Opinion
We conducted our audit in accordance with the auditing standards for certified public accountants in China. The section "Responsibilities of Certified Public Accountants for the Audit of Financial Statements" in the audit report further elaborates on our responsibilities under these standards. In accordance with the independence standards for certified public accountants and the Code of Ethics for Certified Public Accountants in China, we are independent of Yuanli Co. and have fulfilled our other ethical responsibilities. We have adhered to the independence requirements for auditing public interest entities. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
3. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the current period. Our responses to these matters are in the context of our audit of the financial statements as a whole and in forming our audit opinion, and we do not express a separate opinion on these matters.
Revenue Recognition
- Description of the Matter Refer to Note 3 (31) and Note 5 (35) of the financial statements. Yuanli Co. is primarily engaged in the production and sales of activated carbon series products, sodium silicate products, and silica products. The operating revenue for the current period was 1.904 billion RMB. The occurrence and completeness of revenue recognition have a significant impact on Yuanli Co.'s operating results, and since operating revenue is one of the company's key performance indicators, we identified revenue recognition as a key audit matter.