/Gansu Nenghua: Audit report of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd.

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Gansu Nenghua: Audit report of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd.

Shenzhen Stock Exchange

2026/09/03

Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd.

Audit report

Daxin Shenzi [2026] No. 9-00997

Daxin Accounting Firm (Special General Partnership)

WUYIGE CERTIFIED PUBLIC ACCOUNTANTS LLP.

Daxin Accounting Firm WUYIGE Certified Public Accountants.LLP Telephone: +86 (10) 82330558 Room 2206 22/F, Xueyuan International Tower, No. 1 Zhichun Road, Haidian District, Beijing Fax: +86 (10) 82327668 2206 No.1 Zhichun Road, Haidian Dist., 22nd Floor, Xueyuan International Building. Website: Internet: www.daxincpa.com.cnPostcode 100083 Beijing, China, 100083

Audit report

Daxin Shenzi [2026] No. 9-00997 All shareholders of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd.:

1. Audit opinions

We have audited the financial statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd. (hereinafter referred to as "your company"), including the balance sheets on March 31, 2026, December 31, 2025, and December 31, 2024, the income statement, cash flow statement, owner's equity change statement, and notes to the financial statements from January to March 2026, 2025, and 2024.

We believe that the attached financial statements have been prepared in accordance with the Accounting Standards for Business Enterprises in all material respects and fairly reflect your company's financial position as of March 31, 2026, December 31, 2025, and December 31, 2024, as well as its operating results and cash flows from January to March 2026, 2025, and 2024.

2. The basis for forming audit opinions

We performed the audit work in accordance with the Chinese Certified Public Accountants Auditing Standards. Our responsibilities under these standards are further described in the "CPA's Responsibilities for the Audit of Financial Statements" section of the auditor's report. In accordance with the Chinese Code of Ethics for Certified Public Accountants and the Chinese Code of Independence for Certified Public Accountants, we are independent of your company and have fulfilled our other responsibilities in professional ethics.

We believe that the audit evidence we obtained is sufficient and appropriate and provides a basis for issuing an audit opinion.

3. Key audit matters

Key audit matters are those matters that we, based on our professional judgment, consider to be most important in the audit of the financial statements for the period. The response to these matters is based on the audit of the financial statements as a whole and the formation of audit opinions. We do not express opinions on these matters individually.

(1) Revenue recognition

Description of the matter

Postal code 100083 Beijing, China, 100083

Relevant information disclosure can be found in "Note 3, (23) Revenue" and "Note 5, (31) Operating income and operating costs" of the financial statements. Your company's operating income from January to March 2026 is 252.2081 million yuan, the operating income in 2025 is 395.5693 million yuan, and the operating income in 2024 is 51,600 yuan. Revenue is the main source of profit and affects one of the key performance indicators. Therefore, there is an inherent risk that management can manipulate the timing of revenue recognition in order to achieve specific goals. We identify revenue recognition as a key audit matter.

Audit response

During the audit of revenue recognition, the main audit procedures we performed include:

(1) Understand and test the rationality of design and operational effectiveness of internal controls related to operating income;

(2) Understand the company's revenue recognition policy, check the sales contracts of major customers, and combine the sales policy, revenue recognition certification documents, etc., identify the risk and reward transfer terms related to product ownership, and evaluate whether the company's revenue recognition policy complies with the relevant provisions of the "Accounting Standards for Business Enterprises";

(3) Perform analytical procedures on revenue and costs based on revenue types, analyze changes in gross profit margin, and review the rationality of revenue changes;

(4) Select samples and check supporting documents related to revenue recognition, including sales contracts or orders, invoices, receipts, etc.;

(5) Perform confirmation procedures on revenue based on accounts receivable and contract liabilities to verify whether the amounts of revenue, accounts receivable and contract liabilities are accurate; conduct on-site visits to important customers during the reporting period to inquire and verify the authenticity and accuracy of sales revenue; (6) Select revenue before and after the balance sheet date to perform cut-off testing to evaluate whether sales revenue is recorded in the appropriate accounting period;

(7) Check whether the information related to revenue recognition has been appropriately presented in the financial statements.

(2) Projects under construction are transferred to fixed assets

Description of the matter

The high-efficiency utilization of low-rank coal for hydrogen production and the 500,000 tons/year high-concentration urea-based compound fertilizer project has a long construction period, high project costs, and a long time for completion and final settlement. For fixed assets such as machinery and equipment and related buildings and buildings that have reached the intended usable state, they are still in use.

Postal code 100083 Beijing, China, 100083

Before the final settlement of the project is completed, the accounting policy stipulates that the project shall be tentatively estimated and recorded based on the project estimate, project cost or actual cost of the project under construction. After the final settlement procedures for the completion of the project are completed, the original tentative estimated value shall be adjusted based on the actual cost.

As of March 31, 2026, your company's machinery and equipment and related buildings have reached a state of completion and use, and the final accounts for completion have not been processed during the reporting period. The transfer process involves management's estimation of the estimated amount. If there is a large difference between the estimated value and the actual cost, the value of the fixed assets may need to be adjusted accordingly, which may affect the integrity of the fixed assets and the accuracy of depreciation. Therefore, we consider this matter to be a key audit matter.

Audit response

During the audit process of fixed assets carried forward from projects under construction, the main audit procedures we performed include:

(1) Understand and test the internal controls related to engineering construction projects;

(2) Review the completion status of the project investment plan, and understand the implementation of national guidelines, policies, regulations, etc. related to project construction during the project management process;

(3) Obtain project budget, budget estimates and other information, and verify whether the infrastructure project has been approved by the relevant national departments;

(4) Sampling inspection of construction investment, equipment investment and project payment (equipment payment) records of major projects under construction, checking monthly statements and supervision reports of projects under construction, project construction contracts and other information, verifying whether project expenditure costs are collected in a timely manner and whether various expenditures are true;

(5) Obtain the enterprise's interest amortization table and relevant loan contracts, identify the amount of special loans, calculate the capitalized interest, and evaluate the rationality and accuracy of the enterprise's provision based on the calculation results;

(6) Obtain the temporary estimate transfer documents and management approval documents, check whether the temporary estimate transfer policy is consistent with industry policies, and evaluate the accuracy of the temporary estimate transfer time;

(7) Verify the accuracy of the tentative estimated amount of fixed assets carried forward for completed projects;

(8) On-site observation of the construction status of projects under construction;

(9) According to the fixed assets depreciation policy, conduct depreciation calculations on fixed assets and check the accuracy of accumulated depreciation; (10) Check whether fixed assets and projects under construction have been properly presented in financial statements.

4. Responsibility of management and those charged with governance for financial statements

The management is responsible for preparing financial statements in accordance with the provisions of the Accounting Standards for Business Enterprises to achieve fair reflection, and to design, implement and maintain necessary internal controls so that the financial statements are free of material misstatements due to fraud or errors.

In preparing financial statements, management is responsible for assessing the company's ability to continue as a going concern, disclosing matters related to going concern (if applicable), and applying the going concern assumption, unless management plans to liquidate the company, cease operations or has no other realistic alternative.

Those charged with governance are responsible for overseeing your company’s financial reporting process.

5. Responsibility of certified public accountants for auditing financial statements

Our goal is to obtain reasonable assurance as to whether the financial statements as a whole are free of material misstatements due to fraud or error, and to issue an audit report containing an audit opinion. Reasonable assurance is a high level of assurance, but it does not guarantee that an audit performed in accordance with auditing standards will always detect a material misstatement when it exists. Misstatements may be due to fraud or error and are generally considered material if the misstatements, individually or in aggregate, are reasonably expected to affect the economic decisions made by users of financial statements based on the financial statements.

In the process of performing audit work in accordance with the auditing standards, we use professional judgment and maintain professional skepticism. At the same time, we also perform the following tasks:

(1) Identify and assess the risks of material misstatement of financial statements due to fraud or errors, design and implement audit procedures to respond to these risks, and obtain sufficient and appropriate audit evidence as the basis for issuing audit opinions. Because fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls, the risk of failing to detect a material misstatement resulting from fraud is higher than the risk of failing to detect a material misstatement resulting from error.

(2) Understand the internal controls related to auditing in order to design appropriate audit procedures, but the purpose is not to express an opinion on the effectiveness of internal controls.

(3) Evaluate the appropriateness of the accounting policies adopted by the management and the reasonableness of the accounting estimates and related disclosures made.

(4) Draw conclusions on the appropriateness of management’s use of the going concern assumption. At the same time, based on the audit evidence obtained, a conclusion is drawn as to whether there is a significant uncertainty about events or conditions that may cause significant doubts about your company's ability to continue as a going concern. If we conclude that significant uncertainty exists, auditing standards require us to advise users of the statements in our audit report

Postal code 100083 Beijing, China, 100083

Pay attention to the relevant disclosures in the financial statements; if the disclosures are insufficient, we should express a qualified opinion. Our conclusions are based on information available as of the date of the auditor's report. However, future events or conditions may cause your company to cease to continue as a going concern.

(5) Evaluate the overall presentation, structure and content of the financial statements, and evaluate whether the financial statements fairly reflect relevant transactions and events.

We communicate with those charged with governance regarding, among other matters, the planned audit scope, timing and significant audit findings, including communication of significant internal control deficiencies identified during our audit.

We also provide those charged with governance with a statement regarding our compliance with ethical requirements related to our independence and communicate with those charged with governance all relationships and other matters that may reasonably be considered to affect our independence, and related safeguards, if applicable.

From the matters communicated with those charged with governance, we determine which matters are most significant to the audit of the financial statements for the period and therefore constitute key audit matters. We describe these matters in our auditor's report unless laws or regulations prohibit public disclosure of the matter or, in rare circumstances, we determine that the matter should not be communicated in our auditor's report if the adverse consequences of communicating the matter in the auditor's report are reasonably expected to outweigh the benefits in the public interest.

Daxin Accounting Firm (Special General Partnership) Chinese Certified Public Accountants:

(Project Partner)

Beijing, China Chinese Certified Public Accountant:

September 1, 2026

Notes to the Financial Statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd. January 1, 2024 - March 31, 2026

Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd.

Notes to Financial Statements

(Unless otherwise specified, the amounts in this note are in RMB)

1. Basic situation of the enterprise

(1) Company registration place and headquarters address

Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd. (hereinafter referred to as the "Company") was founded on September 25, 2020 and registered with the Gansu Provincial Market Supervision Administration with a registered capital of 753 million yuan. The company's unified social credit code is 91620000MA71FC128G; the company's legal representative is Li Deyong; the company type is a limited liability company (a sole proprietorship of a legal person that is not invested or controlled by a natural person); the registered address is No. 9 Minhe Road, Hexibao Industrial Park, Yongchang County, Jinchang City, Gansu Province.

The parent company of the company is Gansu Energy and Chemical Investment Group Co., Ltd., and the ultimate actual controller of the group is the State-owned Assets Supervision and Administration Commission of the People's Government of Gansu Province.

(2) The main business activities actually engaged in by the enterprise

The company is a chemical raw material and chemical product manufacturing enterprise, currently mainly engaged in the production and sales of urea and synthetic ammonia.

2. Basis for preparation of financial statements

(1) Basis for compilation

The Company's financial statements are based on going concern, based on actual transactions and events, in accordance with the "Accounting Standards for Business Enterprises - Basic Standards" and specific accounting standards promulgated by the Ministry of Finance (hereinafter referred to as "Accounting Standards for Business Enterprises"), and are prepared based on the important accounting policies and accounting estimates formulated.

(2) Going concern

Going concern: The Company has evaluated its ability to continue operating in the 12 months since the reporting date, and has found no matters or circumstances that cast any significant doubt on its ability to continue operating. Therefore, these financial statements have been prepared on the basis of going concern assumption.

3. Important accounting policies and accounting estimates

(1) Statement on compliance with accounting standards for enterprises

The financial statements prepared by the company comply with the requirements of the "Accounting Standards for Business Enterprises" and truly and completely reflect the company's financial status as of March 31, 2026, December 31, 2025, and December 31, 2024, as well as from January to March 2026 and 2025.

Notes to the financial statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd.

Operating results, cash flow and other relevant information for the year from January 1, 2024 to March 31, 2026 and 2024.

(2) Accounting period

The company's fiscal year is the Gregorian calendar year, that is, from January 1 to December 31 of each year.

(3) Business cycle

The company uses 12 months a year as its normal operating cycle, and uses the operating cycle as the liquidity classification standard for assets and liabilities.

(4) Accounting standard currency

The Company uses RMB as its functional accounting currency.

(5) Methods and selection basis for determining materiality standards

The Company prepares and discloses financial statements in compliance with the materiality principle. The matters disclosed in the notes to the financial statements involve the judgment of materiality standards and the determination methods and selection basis of the materiality standards are as follows:

Project Materiality Criteria

A single amount accounts for more than 5% of the accounts receivable or bad debt provisions, and the amount exceeds 1 million yuan, or an important single item of receivables with bad debt provisions

The provision for bad debts in the current period affects changes in profits and losses

If the single amount accounts for more than 5% of the current period's bad debt provisions, and the amount exceeds 1 million yuan, the bad debt provisions for important accounts receivable are recovered or reversed.

or affect changes in profits and losses for the current period

Important accounts receivable are actually written off. The individual amount accounts for more than 5% of the accounts receivable or bad debt provisions, and the amount exceeds 1 million yuan. Important prepayments with an age of more than 1 year. The individual amount accounts for more than 5% of the total prepayments, and the amount exceeds 1 million yuan.

The investment budget accounts for more than 5% of the amount of fixed assets, and the amount incurred in the current period accounts for the total amount of construction in progress in the current period. Important construction projects in progress

More than 10% of the balance (or more than 10% of the ending balance)

Important accounts payable for more than one year, the individual amount accounts for more than 5% of the total accounts payable, and the amount exceeds 1 million yuan

Important other payables for more than one year, the individual amount accounts for more than 5% of the total other payables, and the amount exceeds 1 million yuan

A single investment accounts for more than 10% of the total cash inflows or outflows received or paid from investing activities, and the cash flow from investing activities is important

The amount exceeds 10 million yuan

(6) Determination standards for cash and cash equivalents

The cash determined when the company prepares the cash flow statement refers to cash on hand and deposits that can be used for payment at any time. The cash equivalents determined when preparing the cash flow statement refer to investments held with short term, strong liquidity, easy to convert into known amounts of cash, and with little risk of value changes.

(7) Financial instruments

Financial instruments include financial assets, financial liabilities and equity instruments.

Classification of financial instruments

Based on the company's business model for managing financial assets and the contractual cash flow characteristics of financial assets, financial assets are divided into: financial assets measured at amortized cost; financial assets measured at fair value with changes included in other comprehensive income; financial assets measured at fair value with changes included in current profits and losses. For investments in non-trading equity instruments, the Company

Notes to the financial statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd.

From January 1, 2024 to March 31, 2026, determine whether to designate it as a financial asset (equity instrument) measured at fair value and whose changes are included in other comprehensive income upon initial recognition.

Financial liabilities are classified upon initial recognition into: financial liabilities measured at fair value through profit or loss and financial liabilities measured at amortized cost.

Recognition basis and measurement method of financial instruments

(1) Financial assets measured at amortized cost

The Company's business model for managing financial assets measured at amortized cost is to collect contractual cash flows as the goal, and the contractual cash flow characteristics of such financial assets are consistent with the basic lending arrangements, that is, the cash flows generated on a specific date are only payments of principal and interest based on the outstanding principal amount. For such financial assets, the Company adopts the actual interest rate method and conducts subsequent measurement at amortized cost. Gains or losses arising from amortization or impairment are included in the current profits and losses. Such financial assets mainly include monetary funds, accounts receivable, other receivables and long-term receivables. The company lists long-term receivables due within one year (including one year) from the balance sheet date as non-current assets due within one year; debt investments with a maturity period of within one year (including one year) are listed as other current assets.

(2) Financial assets measured at fair value and changes included in other comprehensive income

The Company's business model for managing such financial assets aims at both collecting contractual cash flows and selling them, and the contractual cash flow characteristics of such financial assets are consistent with the basic lending arrangements. The Company measures such financial assets at fair value and changes in them are included in other comprehensive income, but impairment losses or gains, exchange gains and losses and interest income calculated according to the effective interest method are included in the current profit and loss.

In addition, the Company designates certain investments in non-trading equity instruments as financial assets measured at fair value through other comprehensive income. The company includes the relevant dividend income of this type of financial assets in the current profit and loss, and the changes in fair value are included in other comprehensive income. When the financial asset is derecognised, the accumulated gains or losses previously included in other comprehensive income will be transferred from other comprehensive income to retained earnings and will not be included in the current profit or loss.

(3) Financial assets measured at fair value and changes included in current profits and losses

The Company classifies financial assets other than the above-mentioned financial assets measured at amortized cost and financial assets measured at fair value through other comprehensive income as financial assets measured at fair value through profit or loss for the current period. In addition, at the time of initial recognition, in order to eliminate or significantly reduce accounting mismatches, the Company designated some financial assets as financial assets measured at fair value and whose changes are included in current profits and losses. The Company will measure equity instrument investments over which it has no control, joint control or significant influence at fair value and include changes in current profits and losses, and list them as trading financial assets; if they are expected to be held for more than one year from the balance sheet date, they will be listed as other non-current assets.

(4) Financial liabilities measured at fair value and changes included in current profits and losses

Notes to the Financial Statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd. January 1, 2024 - March 31, 2026

Financial liabilities measured at fair value and whose changes are included in the current profit and loss include trading financial liabilities, derivative financial liabilities, etc., which are initially measured at fair value, and related transaction costs are included in the current profit and loss. The financial liability is subsequently measured at fair value, and changes in fair value are included in current profits and losses.

When derecognition is terminated, the difference between its fair value and the initial recorded amount is recognized as investment income, and the gains and losses from changes in fair value are adjusted at the same time.

(5) Financial liabilities measured at amortized cost

Financial liabilities measured at amortized cost include short-term borrowings, notes and accounts payable, other payables, long-term borrowings, bonds payable, and long-term payables. They are initially measured at fair value, and related transaction costs are included in the initial recognition amount. Interest calculated using the actual interest rate method during the holding period is included in the current profit and loss.

When the recognition is terminated, the difference between the consideration paid and the book value of the financial liability will be included in the current profit and loss.

Recognition basis and measurement method of financial asset transfer

Financial assets that meet one of the following conditions are derecognised: (1) The contractual right to receive cash flows from the financial asset terminates; (2) The financial asset has been transferred, and almost all the risks and rewards of ownership of the financial asset are transferred to the transferee; (3) The financial asset has been transferred, and although the enterprise neither transfers nor retains almost all the risks and rewards of ownership of the financial asset, it has given up control of the financial asset.

If an enterprise neither transfers nor retains substantially all the risks and rewards of ownership of a financial asset, and does not give up control of the financial asset, the relevant financial assets will be recognized to the extent of its continued involvement in the transferred financial assets, and the relevant liabilities will be recognized accordingly. The degree of continued involvement in the transferred financial assets refers to the level of risk faced by the enterprise due to changes in the value of the financial assets.

If the overall transfer of financial assets meets the conditions for derecognition, the difference between the book value of the transferred financial assets and the sum of the consideration received for the transfer and the cumulative amount of changes in fair value originally included in other comprehensive income will be included in the current profit and loss.

If the partial transfer of financial assets meets the conditions for derecognition, the book value of the transferred financial assets will be apportioned between the derecognized and non-deactivated parts according to their relative fair values, and the difference between the sum of the consideration received due to the transfer and the cumulative amount of changes in fair value originally included in other comprehensive income that should be apportioned to the derecognized part and the apportioned aforementioned book amount shall be included in the current profit and loss.

When the company sells financial assets with recourse, or endorses and transfers financial assets it holds, it needs to determine whether substantially all the risks and rewards of ownership of the financial assets have been transferred. If almost all the risks and rewards of the ownership of the financial asset have been transferred to the transferee, the financial asset shall be derecognised; if almost all the risks and rewards of the ownership of the financial asset have been retained, the recognition of the financial asset shall not be terminated; if substantially all the risks and rewards of the ownership of the financial asset have been transferred to the transferee, the recognition of the financial asset shall not be terminated;

Notes to the financial statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd.

For the risks and rewards from January 1, 2024 to March 31, 2026, continue to determine whether the enterprise retains control over the asset, and perform accounting treatment according to the principles described in the previous paragraphs.

Conditions for derecognition of financial liabilities

If the current obligation of a financial liability (or part thereof) has been discharged, the Company shall terminate the recognition of the financial liability (or part thereof). The company (borrower) signs an agreement with the lender to replace the original financial liability by assuming a new financial liability, and if the contract terms of the new financial liability are substantially different from the original financial liability, the original financial liability will be terminated and a new financial liability will be recognized at the same time. If the company makes substantial modifications to the contract terms of the original financial liability (or part thereof), it will terminate the recognition of the original financial liability and recognize a new financial liability in accordance with the modified terms.

If a financial liability (or part thereof) is derecognised, the Company will include the difference between its book value and the consideration paid (including non-cash assets transferred out or liabilities assumed) into the current profit and loss.

Offset of financial assets and financial liabilities

When the company has the legal right to offset the recognized amount of financial assets and financial liabilities, and the legal right is currently enforceable, and the company plans to settle on a net basis or realize the financial assets and pay off the financial liabilities at the same time, the financial assets and financial liabilities will be listed in the balance sheet as the net amount after offsetting each other. Otherwise, financial assets and financial liabilities are presented separately in the balance sheet and are not offset against each other.

Determination method of fair value of financial assets and financial liabilities

Please refer to “Note 3. (9) Fair Value Measurement” for the method of determining the fair value of financial assets and financial liabilities.

(8) Impairment of financial assets

Based on expected credit losses, the Company carries out impairment treatment and recognizes loss provisions for financial assets measured at amortized cost, debt investments measured at fair value with changes included in other comprehensive income, contract assets, lease receivables, loan commitments and financial guarantee contracts.

Expected credit losses refer to the weighted average of the credit losses of financial instruments with the risk of default as the weight. Credit loss refers to the difference between all contractual cash flows receivable under the contract and all cash flows expected to be received by the company, discounted at the original actual interest rate, that is, the present value of all cash shortfalls. When the company considers the expected credit loss measurement method, it reflects the following elements: ① The unbiased probability weighted average amount determined by evaluating a series of possible outcomes; ② The time value of money; ③ Reasonable and well-founded information about past events, current conditions and forecasts of future economic conditions that can be obtained without unnecessary additional costs or at the balance sheet date.

The Company assesses the expected credit losses of financial instruments on an individual and combined basis. When assessing on a combined basis, the Company divides financial instruments into different groups based on common credit risk characteristics. The common credit risk characteristics used by the company include: type of financial instrument, credit risk rating, geographical location of the debtor, industry of the debtor, overdue information, receivables

Notes to the financial statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd.

Item aging, etc. from January 1, 2024 to March 31, 2026.

The Company's use of the expected credit loss model to assess the impairment of financial instruments and contract assets requires significant judgments and estimates, and all reasonable and evidence-based information, including forward-looking information, must be considered. When making these judgments and estimates, the Company infers the expected changes in the debtor's credit risk based on historical repayment data combined with economic policies, macroeconomic indicators, industry risks and other factors. Different estimates may affect the provision of impairment provisions, and the impairment provisions that have been provided may not be equal to the actual amount of future impairment losses.

Impairment testing methods for receivables and contract assets

For receivables such as accounts receivable, notes receivable, financing receivables, contract assets and other receivables that do not contain significant financing components due to daily operating activities such as selling goods and providing services, the company uses simplified measurement methods and measures loss provisions based on an amount equivalent to the expected credit losses during the entire duration.

For lease receivables, other receivables that do not contain significant financing components, receivables that contain significant financing components, and contract assets, the Company chooses to use simplified measurement methods and measure loss provisions based on an amount equivalent to the expected credit losses during the entire duration.

The company recognizes receivables with an amount of more than 5% of the asset balance and an amount greater than 1 million yuan as individually significant receivables. The Company conducts separate impairment testing on receivables with individually significant amounts.

For accounts receivable, in addition to individually determining credit losses for accounts that are individually significant and have suffered credit impairment, the expected credit losses are usually calculated based on a combination of common credit risk characteristics, taking into account the elements that should be reflected in the expected credit loss measurement method, and referring to historical credit loss experience, preparing a comparison table between the aging of accounts receivable and the default loss rate. If the credit risk characteristics of a certain customer are significantly different from those of other customers in the portfolio, or the credit risk characteristics of the customer change significantly, for example, if the customer encounters serious financial difficulties and the expected credit loss rate of the amount receivable from the customer is significantly higher than the expected credit loss rate of the account receivable and overdue range, etc., the company will make a separate provision for losses on the amount receivable from the customer.

(1) Combination categories of accounts receivable (and contract assets) and basis for determination

The company groups accounts receivable (and contract assets) based on the similarity and correlation of credit risk characteristics based on information such as age, nature of payment, credit risk exposure, and historical payment collection. For accounts receivable (and contract assets), the Company determines that aging/overdue accounts are the main factors affecting credit risk. Therefore, the Company assesses its expected credit losses based on the aging portfolio. The company determines the aging of accounts based on the date of invoicing.

(2) Combination categories of notes receivable and basis for determination

Based on the common risk characteristics of the credit risk of the acceptor of notes receivable, the company divides them into different combinations and determines the accounting estimation policy for expected credit losses: ① Bank acceptance bills where the acceptor is a listed commercial bank, the company evaluates that this type of payment has low credit risk and does not recognize expected credit losses; ② Bank acceptance bills where the acceptor is an unlisted commercial bank

Notes to the financial statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd.

For bills of exchange and commercial acceptance bills from January 1, 2024 to March 31, 2026, loss provisions are made based on the company's accounts receivable policy to confirm the expected loss rate, which is the same as the combination of accounts receivable.

Impairment testing methods for debt investments, other debt investments, loan commitments and financial guarantee contracts

In addition to the above-mentioned financial assets (such as debt investments, other debt investments), loan commitments and financial guarantee contracts that adopt the simplified measurement method, the company adopts the general method (three-stage method) to calculate expected credit losses. At each balance sheet date, the company evaluates whether its credit risk has increased significantly since initial recognition. If the credit risk has not increased significantly since initial recognition, it is in the first stage. Loss provisions are measured based on the amount of expected credit losses within a month, and interest income is calculated based on the book balance and actual interest rate; if the credit risk has increased significantly since initial recognition but no credit impairment has occurred, it is in the second stage, and the company shall calculate the amount equivalent to the expected credit losses during the entire duration. Measure loss reserves and calculate interest income based on the book balance and actual interest rate; if credit impairment occurs after initial recognition, it is in the third stage. The company measures loss reserves based on an amount equivalent to the expected credit losses during the entire duration, and calculates interest income based on amortized costs and actual interest rates. For financial instruments with only low credit risk on the balance sheet date, the Company assumes that their credit risk has not increased significantly since initial recognition.

Lifetime expected credit losses refer to the expected credit losses caused by all possible default events that may occur during the entire expected life of a financial instrument. Expected credit losses in the next 12 months refer to the expected credit losses caused by default events on financial instruments that may occur within 12 months after the balance sheet date (if the expected duration of the financial instrument is less than 12 months, the expected duration), and are part of the expected credit losses throughout the duration.

(9) Fair value measurement

The Company measures investment real estate, derivative financial instruments and equity instrument investments at fair value on each balance sheet date. Fair value refers to the price that can be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date.

For assets and liabilities measured or disclosed at fair value in financial statements, the fair value level to which they belong is determined based on the lowest level input value that is significant to the overall fair value measurement: the first level input value is the unadjusted quoted price in the active market for the same asset or liability that can be obtained on the measurement date; the second level input value is the directly or indirectly observable input value of the relevant assets or liabilities in addition to the first level input value; the third level input value is the unobservable input value of the relevant asset or liability.

For financial instruments traded in active markets, the Company determines their fair value based on active market quotations; for financial instruments not traded in active markets, the Company uses valuation techniques to determine its fair value, and the valuation model used is mainly a discounted cash flow model. The input values of valuation technology mainly include: risk-free interest rate, credit premium and liquidity premium for debt type; valuation multiplier and liquidity discount for equity type.

Notes to the Financial Statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd. January 1, 2024 - March 31, 2026

Level 3 fair values are determined based on the Company's valuation models, such as discounted cash flow models. The Company also considers the initial transaction price, recent transactions of the same or similar financial instruments, or entirely third-party transactions of comparable financial instruments. As of March 31, 2026, Level 3 financial assets measured at fair value were valued using significant unobservable inputs such as discount rates, but their fair values were not significantly sensitive to reasonable changes in these significant unobservable inputs.

The Company adopts the market approach to determine the fair value of unlisted equity investments. The Company determines the fair value of unlisted equity investments based on expected future cash flows discounted at the current discount rate of other financial instruments with similar contract terms and risk characteristics. This requires the Company to estimate expected future cash flows, credit risk, volatility and discount rates, and is therefore subject to uncertainty.

At each balance sheet date, the Company reassesses the assets and liabilities recognized in the financial statements that continue to be measured at fair value to determine whether there is a transition between fair value measurement levels.

(10) Inventory

Classification of inventory

The company's inventory mainly includes raw materials, low-value consumables, packaging, inventory goods, etc.

Pricing method for inventory acquisition and issue

Inventories are valued at actual cost when acquired and based on the weighted average method when received and shipped.

Recognition of net realizable value of inventories and method of accruing depreciation provisions

For inventory of goods that are directly for sale, such as finished goods, inventory, and materials for sale, during the normal production and operation process, the net realizable value is determined by the estimated selling price of the inventory minus the estimated sales expenses and related taxes; for material inventories that need to be processed, during the normal production and operation process, the estimated selling price of the finished goods produced is deducted to the time of completion. The net realizable value is determined based on the estimated costs, estimated sales expenses and relevant taxes. For inventories held for the execution of sales contracts or labor contracts, the net realizable value is calculated based on the contract price. If the quantity of inventory held is greater than the quantity ordered in the sales contract, the net realizable value of the excess inventory is calculated based on the general sales price.

At the end of the period, inventory depreciation provisions are made based on individual inventory items; however, for inventories with large quantities and low unit prices, inventory depreciation provisions are made based on inventory categories; inventory depreciation provisions are made on a consolidated basis for inventories that are related to product series produced and sold in the same region, have the same or similar end use or purpose, and are difficult to measure separately from other items.

Unless there is clear evidence that the market price on the balance sheet date is abnormal, the net realizable value of inventory items is determined based on the market price on the balance sheet date.

The net realizable value of inventory items at the end of the period is determined based on the market price on the balance sheet date.

The inventory inventory system is a perpetual inventory system
Amortization method for low-value consumables and packaging materials

Notes to the financial statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd. January 1, 2024 - March 31, 2026 Low-value consumables are amortized according to the one-time amortization method when they are used; packaging materials are amortized according to the one-time amortization method when they are used.

(11) Contract assets and contract liabilities

1.Contract assets

Contract assets refer to the right to receive consideration for which the Company has transferred goods to the customer, and this right depends on factors other than the passage of time. If the Company sells two clearly distinguishable goods to a customer and has the right to receive payment because one of the goods has been delivered, but the payment depends on the delivery of the other product, the Company will treat the right to receive payment as a contract asset.

For the determination method and accounting treatment method of expected credit losses of contract assets, please refer to the relevant content of "Note 3. (8) Impairment of Financial Assets" for details.

2.Contract liabilities

Contract liabilities reflect the Company's obligation to transfer goods to customers for consideration received or receivable from customers. Before the company transfers the goods to the customer, if the customer has paid the contract consideration or the company has obtained the unconditional right to receive the contract consideration, the contract liability shall be recognized based on the amount received or receivable at the earlier of the actual payment by the customer and the amount due. 3. Assets related to contract costs

(1) Method for determining the amount of assets related to contract costs

The Company's assets related to contract costs include contract performance costs and contract acquisition costs. Based on their liquidity, contract performance costs are presented in inventories and other non-current assets respectively, and contract acquisition costs are presented in other current assets and other non-current assets respectively.

Contract performance costs, that is, the costs incurred by the company to perform the contract, are recognized as an asset as contract performance costs if they do not fall within the scope of relevant accounting standards such as inventories, fixed assets or intangible assets and meet the following conditions at the same time: The costs are directly related to a current or expected contract, including direct labor, direct materials, manufacturing expenses (or similar expenses), costs clearly borne by the customer, and other costs incurred solely because of the contract; this cost increases the company's future resources for fulfilling performance obligations; this cost is expected to be recovered.

Contract acquisition costs, that is, the incremental costs incurred by the company to acquire the contract that are expected to be recovered, are recognized as contract acquisition costs and are recognized as an asset. If the amortization period of the asset does not exceed one year, the company chooses the simplified treatment of recording it into the current profit and loss when incurred. Incremental costs refer to costs that would not be incurred without obtaining the contract (such as sales commissions, etc.). Other expenses incurred by the company to obtain the contract, other than the incremental costs expected to be recovered (such as travel expenses that will be incurred regardless of whether the contract is obtained, etc.), are included in the current profit and loss when incurred, except for those that are clearly borne by the customer.

(2) Amortization of assets related to contract costs

The company's assets related to contract costs are amortized on the same basis as the commodity revenue recognition related to the assets.

Notes to the financial statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd.

The period from January 1, 2024 to March 31, 2026 will be included in the current profit and loss.

(3) Impairment of assets related to contract costs

If the book value of the company's assets related to contract costs is higher than the difference between the following two items, the company will make an impairment provision for the excess and recognize it as an asset impairment loss: ① The remaining consideration that the company expects to obtain for the transfer of the goods related to the asset; ② The estimated cost to be incurred for the transfer of the related goods.

(12) Investment real estate

Investment property is property held to earn rentals or for capital appreciation, or both. Including leased land use rights, land use rights held and prepared to be transferred after appreciation, leased buildings, etc. In addition, for vacant buildings held by the company for operating leasing, if the board of directors (or similar organization) makes a written resolution clearly stating that the building will be used for operating leasing and the holding intention will not change in the short term, it will also be reported as investment real estate.

Investment properties are initially measured at cost. Subsequent expenditures related to investment real estate will be included in the cost of investment real estate if the economic benefits related to the asset are likely to flow in and its cost can be measured reliably. Other subsequent expenditures shall be included in the current profits and losses when incurred.

The Company adopts the cost model for subsequent measurement of investment real estate, and conducts depreciation or amortization in accordance with policies consistent with buildings or land use rights.

Please refer to “Note 3. (19) Impairment of long-term assets” for details on the impairment testing method and impairment provision method for investment real estate.

When self-use real estate or inventory is converted into investment real estate or investment real estate is converted into self-use real estate, the book value before conversion shall be used as the entry value after conversion.

When an investment real estate is disposed of, or is permanently withdrawn from use and no economic benefits are expected to be obtained from its disposal, the investment real estate shall be derecognised. Income from the sale, transfer, scrapping or damage of investment real estate is included in the current profit and loss after deducting its book value and relevant taxes.

(13) Fixed assets

The company's fixed assets are tangible assets held for the purpose of producing goods, providing labor services, leasing or operating management, and with a useful life of more than one year.

Fixed assets are recognized when the economic benefits related to them are likely to flow into the company and their costs can be measured reliably. The company's fixed assets include houses and buildings, machinery and equipment, transportation equipment, and other assets.

Except for fixed assets that have been fully depreciated and are still in use and land that is separately valued and accounted for, the Company accrues depreciation for all fixed assets. The straight-line method is used when calculating depreciation.

Asset category Depreciation life (years) Residual value rate (%) Annual depreciation rate (%)

Notes to the Financial Statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd. January 1, 2024 - March 31, 2026

Asset category Depreciation life (years) Residual value rate (%) Annual depreciation rate (%) Houses and buildings 20-40 5.00 4.75-2.375

Machinery and equipment 5-20 5.00 19.40-4.75

Transportation equipment 5-10 5.00 19.40-9.50

Other assets 5-10 5.00 19.40-9.50

At the end of each year, the Company reviews the estimated service life, estimated net residual value and depreciation method of fixed assets. If any changes occur, they will be treated as changes in accounting estimates.

(14) Projects under construction

The cost of construction in progress is determined based on actual project expenditures, including various necessary project expenditures incurred during the construction period, borrowing costs that should be capitalized before the project reaches its intended usable state, and other related expenses.

From the date when a project under construction reaches its intended usable state, the estimated value will be transferred to fixed assets based on the project budget, cost or actual project cost, etc., and depreciation will be accrued from the next month. The difference in the original value of the fixed assets will be adjusted after the completion settlement procedures are completed.

Projects under construction will be transferred to fixed assets when they reach the intended usable state. The standards are as follows:

Item Standards for carrying forward fixed assets

Houses and buildings actually come into use

Machinery and equipment Complete installation and debugging/Meet design requirements and complete trial production

Transport Equipment Obtain Vehicle Registration Certificate

Other equipment actually started to be used

(15) Borrowing costs

Recognition principles for capitalization of borrowing costs

Borrowing costs include borrowing interest, amortization of discounts or premiums, auxiliary expenses, and exchange differences arising from foreign currency borrowings, etc.

If the borrowing costs incurred by the company can be directly attributed to the purchase, construction or production of assets that meet the capitalization conditions, they shall be capitalized and included in the cost of the relevant assets; other borrowing costs shall be recognized as expenses based on the amount incurred when incurred and included in the current profits and losses.

Assets that meet the conditions for capitalization refer to fixed assets, investment real estate, inventories and other assets that require a considerable period of acquisition, construction or production activities to reach the intended usable or salable state.

Capitalization of borrowing costs begins when the following conditions are met at the same time: (1) Asset expenditures have occurred, and asset expenditures include expenditures in the form of cash payments, transfers of non-cash assets, or interest-bearing debts for the acquisition, construction or production of assets that meet the capitalization conditions; (2) Borrowing costs have occurred; (3) The acquisition, construction or production activities necessary to bring the assets to the intended usable or salable state have begun.

Notes to the financial statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd.

January 1, 2024 - March 31, 2026 2. Capitalization period of borrowing costs

The capitalization period refers to the period from the time when borrowing costs start to be capitalized to the time when capitalization stops. The period during which the capitalization of borrowing costs is suspended is not included.

When the acquisition, construction or production of assets that meet the capitalization conditions reaches the intended usable or salable state, the capitalization of borrowing costs ceases.

When part of the projects in the acquisition, construction or production of assets that meet the capitalization conditions are completed and can be used independently, the capitalization of the borrowing costs of this part of the assets will cease.

If each part of an asset purchased, constructed or produced is completed separately, but it cannot be used or sold until the overall completion, the capitalization of borrowing costs will stop when the entire asset is completed.

Suspension period of capitalization

If an abnormal interruption occurs during the acquisition, construction or production of assets that qualify for capitalization, and the interruption lasts for more than 3 months, the capitalization of borrowing costs will be suspended; if the interruption is a necessary procedure for the acquisition, construction or production of assets that qualify for capitalization to reach the intended usable or salable state, the borrowing costs will continue to be capitalized. Borrowing costs incurred during the interruption period are recognized as current profits and losses, and the borrowing costs continue to be capitalized until the acquisition, construction or production activities of the assets restart. 4. Calculation method of capitalization rate and capitalization amount of borrowing costs

For special borrowings borrowed for the purpose of purchasing, constructing or producing assets that qualify for capitalization, the capitalized amount of borrowing costs is determined based on the amount of borrowing costs actually incurred for the special borrowing in the current period, minus the interest income from unused borrowed funds deposited in the bank or the investment income from temporary investments.

For general borrowings used for the purchase, construction or production of assets that qualify for capitalization, the amount of borrowing costs that should be capitalized on the general borrowings is calculated and determined based on the weighted average of the asset disbursements that exceed the portion of the special borrowings multiplied by the capitalization rate of the general borrowings occupied. The capitalization rate is calculated and determined based on the weighted average interest rate of general borrowings.

(16) Right-of-use assets

The company's right-of-use assets mainly include buildings and buildings.

The Company recognizes right-of-use assets for leases on the start date of the lease period, except for short-term leases and low-value asset leases that adopt simplified treatment. The start date of the lease term refers to the date on which the lessor provides the leased assets and makes them available for use by the Company.

Right-of-use assets are initially measured at cost. This cost includes:

The initial measurement amount of the lease liability;
For lease payments paid on or before the start date of the lease period, if there are lease incentives, the amount related to the lease incentives already enjoyed will be deducted;
Initial direct costs incurred by the company;

Notes to the Financial Statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd. January 1, 2024 - March 31, 2026

The costs that the company expects to incur to dismantle and remove the leased assets, restore the site where the leased assets are located, or restore the leased assets to the state agreed upon in the lease terms, do not include costs incurred for the production of inventories.

If the company can reasonably determine that it will obtain ownership of the leased asset when the lease term expires, the right-of-use asset will be depreciated over the remaining useful life of the leased asset. If it is not reasonably certain that the ownership of the leased asset will be obtained at the expiration of the lease term, depreciation will be accrued during the shorter of the lease term and the remaining useful life of the leased asset.

The company determines whether the right-of-use assets have been impaired and performs accounting treatment as described in "Note 3. (19) Impairment of long-term assets".

After the start date of the lease period, if the following circumstances occur, the company will re-measure the lease liabilities and adjust the corresponding right-of-use assets. If the book value of the right-of-use assets has been reduced to zero, but the lease liabilities still need to be further reduced, the difference will be included in the current profit and loss:

When the evaluation results or actual exercise of the purchase option, lease renewal option or termination option change, the company remeasures the lease liability based on the present value calculated by the changed lease payment and the revised discount rate;
When the actual fixed payment changes, the expected amount payable of the guaranteed residual value changes, or the index or ratio used to determine the lease payment changes, the company remeasures the lease liability based on the changed lease payment and the present value calculated at the original discount rate. However, where changes in lease payments result from changes in floating interest rates, the present value is calculated using a revised discount rate.

(17) Intangible assets

The company's intangible assets include land use rights, technology use rights, computer software and urea production capacity indicators, etc., which are measured at the actual cost when acquired. Among them, purchased intangible assets are based on the actual price paid and other related expenses as the actual cost; for intangible assets invested by investors, the actual cost is determined based on the value stipulated in the investment contract or agreement. However, if the value stipulated in the contract or agreement is unfair, the actual cost is determined based on the fair value.

Useful life and its determination basis, estimation, amortization method or review procedure

Land use rights are amortized on an even basis over the transfer period from the date of transfer; technology use rights, computer software and urea production capacity indicators are amortized on average in installments based on the shortest of the expected use years, the beneficial years stipulated in the contract and the effective years stipulated by law. The amortization amount is included in the relevant asset cost and current profit and loss according to its beneficiary objects. The estimated useful life and amortization method of intangible assets with limited service life are reviewed at the end of each year. If there are changes, they will be treated as changes in accounting estimates.

The Company does not have intangible assets with indefinite useful lives.

Scope of aggregation of R&D expenditures and related accounting treatment methods

The scope of the company's R&D expenditures includes employee salaries of R&D personnel, direct investment expenses, depreciation and amortization expenses, design expenses, equipment commissioning expenses, commissioned external research and development expenses, and other expenses, etc.

Notes to the Financial Statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd. January 1, 2024 - March 31, 2026

The Company divides the expenditures on internal research and development projects into expenditures in the research stage and expenditures in the development stage based on the nature of the expenditures on internal research and development projects and whether there is great uncertainty in whether the intangible assets will eventually be formed from the R&D activities. Expenditures in the research phase are included in the current profit and loss when incurred. Expenditures in the development phase are capitalized when the following conditions are met at the same time: the company assesses that it is technically feasible to complete the intangible asset so that it can be used or sold; the company has the ability to complete the intangible asset and use or sell it. Intention; the intangible assets are expected to bring economic benefits to the company; the company has sufficient technical, financial and other resource support to complete the development of the intangible assets and has the ability to use or sell the intangible assets; the expenditures attributable to the development stage of the intangible assets can be measured reliably. Expenditures in the development phase that do not meet the capitalization conditions are included in the current profits and losses when incurred.

(18) Long-term deferred expenses

The company's long-term deferred expenses include renovation costs and other expenses that the company has paid but should be amortized in this period and subsequent periods for more than one year. These expenses are amortized evenly during the benefit period. If the long-term deferred expense item cannot benefit future accounting periods, all the amortized value of the item that has not been amortized will be transferred to the current profit and loss.

(19) Impairment of long-term assets

The Company examines long-term equity investments, fixed assets, projects under construction, right-of-use assets, investment real estate measured using the cost model, intangible assets with limited useful lives and other items on each balance sheet date. When there are signs of impairment, the Company conducts an impairment test. Goodwill, intangible assets with indefinite useful lives, and development expenditures that have not yet reached their intended usable state are subject to impairment testing at the end of each year regardless of whether there are signs of impairment.

Impairment of non-current assets other than financial assets (except goodwill)

When the Company conducts impairment testing, it determines its recoverable amount based on the higher of the net amount of the asset's fair value minus disposal costs and the present value of the asset's expected future cash flows. After impairment testing, if the book value of the asset exceeds its recoverable amount, the difference is recognized as impairment loss.

The Company estimates the recoverable amount on the basis of a single asset. If it is difficult to estimate the recoverable amount of an individual asset, the recoverable amount of the asset group to which the asset belongs is determined based on the asset group. The identification of an asset group is based on whether the main cash inflow generated by the asset group is independent of the cash inflows of other assets or asset groups.

The net amount of fair value less disposal expenses is determined by referring to the sales agreement price or observable market price of similar assets in an arm's length transaction, less the incremental costs directly attributable to the disposal of the asset. When estimating the present value of future cash flows, management must estimate the expected future cash flows of the asset or asset group and select an appropriate discount rate to determine the present value of future cash flows.

Impairment of goodwill

The Company will allocate the book value of the goodwill formed from business combinations to the relevant asset groups in a reasonable manner from the date of purchase. If it is difficult to apportion it to the relevant asset group, it will apportion it to the relevant asset group combination. In relation to related asset groups containing goodwill

Notes to the financial statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd.

From January 1, 2024 to March 31, 2026, or when an asset group combination is tested for impairment, if there are signs of impairment in the asset group or asset group combination related to goodwill, first conduct an impairment test on the asset group or asset group combination that does not contain goodwill, calculate the recoverable amount, and compare it with the relevant book value to confirm the corresponding impairment loss; then conduct an impairment test on the asset group or asset group combination that does not contain goodwill. Or the asset group combination is subjected to an impairment test and the book value and recoverable amount are compared. If the recoverable amount is lower than the book value, the impairment loss is first deducted from the book value of the goodwill allocated to the asset group or asset group combination, and then is deducted from the book value of other assets in proportion to the proportion of the book value of other assets in the asset group or asset group combination except goodwill.

Once the impairment loss of the above assets is recognized, it will not be reversed in subsequent accounting periods.

(20) Employee compensation

Accounting treatment method for short-term compensation

During the accounting period when employees provide services to the company, the company recognizes the actual short-term compensation as a liability and includes it in the current profit and loss or related asset costs.

The company pays social insurance premiums and housing provident funds for its employees, as well as labor union funds and employee education funds withdrawn in accordance with regulations. During the accounting period when employees provide services to the company, the corresponding employee remuneration amounts are calculated and determined based on the prescribed accrual basis and accrual ratio.

If employee benefits are non-monetary benefits and can be measured reliably, they are measured at fair value.

Accounting treatment of post-employment benefits

(1) Set up a withdrawal plan

The company pays basic pension insurance and unemployment insurance for its employees in accordance with relevant regulations of the local government. During the accounting period when employees provide services to the company, the amount payable is calculated based on the payment base and proportion specified by the local government, is recognized as a liability, and is included in the current profit and loss or related asset costs.

(2) Defined benefit plan

The company attributes the welfare obligations arising from the defined benefit plan to the period in which employees provide services based on the formula determined by the expected cumulative welfare unit method, and includes them in the current profit and loss or related asset costs.

The deficit or surplus formed by deducting the present value of the defined benefit plan obligations from the fair value of the defined benefit plan assets is recognized as the net liability or net assets of a defined benefit plan. If there is a surplus in the defined benefit plan, the company shall measure the net assets of the defined benefit plan at the lower of the surplus of the defined benefit plan and the upper asset limit. All defined benefit plan obligations, including obligations expected to be paid within twelve months after the end of the annual reporting period in which employees provide services, are discounted based on the market rate of return on Treasury bonds or high-quality corporate bonds in active markets on the balance sheet date that match the term and currency of the defined benefit plan obligation.

The service costs generated by the defined benefit plan and the net interest on the net liabilities or net assets of the defined benefit plan are included in the current profit and loss or related asset costs; the changes caused by the remeasurement of the net liabilities or net assets of the defined benefit plan are included in other comprehensive income.

Notes to the financial statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd.

From January 1, 2024 to March 31, 2026, and will not be transferred back to profit or loss in subsequent accounting periods, when the original defined benefit plan is terminated, all the portion originally included in other comprehensive income will be carried forward to undistributed profits within the scope of equity.

When the defined benefit plan is settled, the settlement gain or loss is recognized based on the difference between the present value of the defined benefit plan obligations determined on the settlement date and the settlement price.

(3) Accounting treatment method for dismissal benefits

When the company cannot unilaterally withdraw the dismissal benefits provided by the termination of labor relations plan or layoff proposal, or when it recognizes the costs or expenses related to the restructuring involving the payment of dismissal benefits (whichever is earlier), the employee compensation liabilities arising from the dismissal benefits are recognized and included in the current profit and loss.

(4) Accounting treatment methods for other long-term employee benefits

The company has no other long-term employee benefits.

(21) Estimated liabilities

When business related to external guarantees, commercial acceptance bill discounting, pending litigation or arbitration, product quality assurance and other contingencies simultaneously meet the following conditions, the company will recognize it as a liability: the obligation is a current obligation assumed by the company; the performance of the obligation is likely to cause economic benefits to flow out of the enterprise; and the amount of the obligation can be measured reliably.

Estimated liabilities are initially measured based on the best estimate of the expenditure required to fulfill the relevant current obligations, and factors such as risks, uncertainties, and time value of money related to contingencies are comprehensively considered. The Company reviews the current best estimates and adjusts the book value of estimated liabilities on the balance sheet date.

(22) Special reserves

The company's special reserve is production safety expenses.

In accordance with the relevant provisions of the Ministry of Finance's "Administrative Measures for the Collection and Use of Enterprise Safety Production Expenses" (Caizi [2022] No. 136), the company accrues safety production expenses according to the following standards:

The operating income of the previous year is used as the basis for accrual, and the excess regressive method is adopted on an average monthly basis. If the operating income does not exceed 10 million yuan, it will be withdrawn at 4.5%; if the operating income exceeds 10 million yuan to 100 million yuan, it will be withdrawn at 2.25%; if the operating income exceeds 100 million yuan to 1 billion yuan, it will be withdrawn at 0.55%; if the operating income exceeds 1 billion yuan, it will be withdrawn at 0.2%.

When production safety expenses are withdrawn, they will be included in the cost of related products and also included in the "special reserve" account. When the extracted safety production expenses are used within the specified range, if they are expense expenditures, they will be directly offset against special reserves; if they form fixed assets, the expenditures incurred will be collected through the "construction in progress" account, and will be recognized as fixed assets when the safety projects are completed and reach the intended usable state; at the same time, the special reserves will be offset according to the cost of forming fixed assets, and the accumulated depreciation of the same amount will be recognized. This fixed asset will no longer be depreciated in future periods.

(23) Income

Notes to the Financial Statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd. January 1, 2024 - March 31, 2026

When the company fulfills its performance obligations in the contract, that is, when the customer obtains control of the relevant goods or services, revenue is recognized based on the transaction price allocated to the performance obligation. Obtaining control over relevant goods means being able to direct the use of the goods and obtain almost all economic benefits from them. Performance obligations refer to the company's commitment in the contract to transfer clearly distinguishable goods to the customer. The transaction price refers to the amount of consideration that the Company expects to be entitled to receive for transferring goods to customers, excluding amounts collected on behalf of third parties and amounts that the Company expects to return to customers.

Whether the performance obligation is performed within a certain period of time or at a certain point in time depends on the terms of the contract and relevant legal provisions. If the performance obligation is performed within a certain period of time, the Company recognizes revenue based on the performance progress. Otherwise, the Company recognizes revenue at a point when the customer obtains control of the relevant assets.

The company determines whether the company is the principal responsible person or agent when engaging in transactions based on whether it has control over the goods or services before transferring them to the customer. If the company is able to control the goods or services before transferring them to the customer, the company is the principal responsible person and recognizes revenue based on the total consideration received or receivable; otherwise, the company acts as the agent and recognizes revenue based on the amount of commissions or fees that it is expected to be entitled to receive. The amount is determined based on the net amount of the total consideration received or receivable after deducting the price payable to other related parties, or based on the established commission amount or ratio.

The specific recognition standards for various types of business income of the Company are as follows:

Coal trade: Sales revenue is recognized when the goods are delivered to the end customer and the customer accepts them correctly.

Chemical products such as urea and ammonia: sales revenue for goods picked up by customers themselves will be recognized when the products leave the warehouse and the customer picks up the goods and signs for them; if the contract stipulates that the goods will be delivered to the customer or the customer's designated location, sales revenue will be recognized when the customer picks up the goods and signs for them after the goods are delivered to the designated location.

(24) Government subsidies

Government subsidies are recognized when the conditions attached to them can be met and received. If the government subsidy is a monetary asset, it shall be measured according to the actual amount received. For a subsidy allocated according to a fixed quota standard, or when there is conclusive evidence at the end of the year that it can meet the relevant conditions stipulated in the fiscal support policy and it is expected to receive fiscal support funds, it shall be measured according to the amount receivable; if the government subsidy is a non-monetary asset, it shall be measured according to the fair value. If the fair value cannot be obtained reliably, it shall be measured according to the nominal amount (1 yuan).

The company's government subsidies include asset-related and income-related. Among them, asset-related government subsidies refer to government subsidies obtained by the company and used to purchase, construct or otherwise form long-term assets; income-related government subsidies refer to government subsidies other than asset-related government subsidies. If the subsidy objects are not clearly specified in government documents, the Company will make judgments based on the above-mentioned distinction principles. If it is difficult to distinguish, the overall classification will be classified as income-related government subsidies.

Government subsidies related to assets are recognized as deferred income. Government subsidies related to assets recognized as deferred income are included in the current profit and loss in installments according to the straight-line method within the useful life of the relevant assets. The relevant assets are sold before the end of their useful life,

Notes to the financial statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd.

If it is transferred, scrapped or damaged from January 1, 2024 to March 31, 2026, the balance of relevant deferred income that has not yet been distributed will be transferred to the profit and loss of the current period of asset disposal.

Government subsidies related to income that are used to compensate for relevant costs, expenses or losses in subsequent periods are recognized as deferred income, and are included in the current profit and loss or offset related costs in the period in which the relevant costs, expenses or losses are recognized. Government subsidies related to daily activities shall be included in other income or offset related costs and expenses according to the economic business essence. Government subsidies unrelated to daily activities are included in non-operating income and expenses.

If the company obtains a policy-based preferential loan interest subsidy, it shall distinguish between the case where the finance department allocates the interest-subsidy funds to the lending bank and the finance department directly allocates the interest-rate discount funds to the company. The accounting treatment shall be in accordance with the following principles: (1) If the finance department allocates interest-subsidy funds to the lending bank, and the lending bank provides loans to the company at policy-based preferential interest rates, the company shall use the actual loan amount received as the accounting treatment. It is the entry value of the loan, and the relevant borrowing costs are calculated based on the loan principal and the policy preferential interest rate (or the fair value of the loan is used as the entry value of the loan and the borrowing costs are calculated according to the actual interest rate method, and the difference between the actual amount received and the fair value of the loan is recognized as deferred income. The deferred income is amortized using the actual interest rate method during the duration of the loan to offset the relevant borrowing costs). (2) The finance department will directly allocate interest discount funds to the company, and the company will use the corresponding interest discount to offset related borrowing costs.

(25) Deferred income tax assets and deferred income tax liabilities

The Company's deferred income tax assets and deferred income tax liabilities are calculated and recognized based on the difference between the tax basis of assets and liabilities and their book value, as well as the difference between the tax basis and their book value of items that are not recognized as assets and liabilities but whose tax basis can be determined in accordance with tax laws (temporary differences).

The Company recognizes deferred income tax liabilities for all taxable temporary differences except in the following situations: (1) Temporary differences arise from the initial recognition of goodwill or the initial recognition of assets or liabilities arising from non-business merger transactions that affect neither accounting profits nor taxable income (or deductible losses); (2) Taxable temporary differences related to investments in subsidiaries, associates and joint ventures, the Company is able to control the timing of the reversal of the temporary differences and the temporary differences are likely not to be reversed in the foreseeable future.

To the extent that the company is likely to obtain future taxable income that can be used to offset the deductible temporary differences, deductible losses and tax credits, the company recognizes deferred income tax assets for deductible temporary differences, deductible losses and tax credits that occur except in the following situations: (1) Temporary differences arise from situations that neither affect accounting profits nor taxable income (or are deductible). (2) The deductible temporary differences related to investments in subsidiaries, associates and joint ventures cannot meet the following conditions at the same time: the temporary differences are likely to be reversed in the foreseeable future, and the taxable income that can be used to offset the deductible temporary differences is likely to be obtained in the future.

The Company recognizes deferred income tax assets for all unused deductible losses to the extent that it is probable that sufficient taxable income will be available to offset the deductible losses. Management uses considerable judgment to estimate future taxable income.

Notes to the financial statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd.

The time and amount from January 1, 2024 to March 31, 2026, combined with the tax planning strategy, determine the amount of deferred income tax assets that should be recognized, so there is uncertainty.

On the balance sheet date, deferred income tax assets and deferred income tax liabilities are measured according to the applicable tax rate during the period when the asset is expected to be recovered or the liability is settled.

(26) Leasing

Identification of leases

On the contract inception date, the Company evaluates whether the contract is a lease or contains a lease. A contract is or contains a lease if one party to the contract transfers the right to control the use of one or more identified assets for a certain period in exchange for consideration.

If the contract contains multiple separate leases at the same time, the company will split the contract and conduct accounting treatment for each separate lease. If the contract contains both lease and non-lease parts, the company, as the lessor, will separate the lease and non-lease parts and conduct accounting treatment separately. Each lease part shall be accounted for in accordance with the leasing standards, and the non-lease part shall be accounted for in accordance with other applicable accounting standards for enterprises. As a lessee, the Company chooses not to separate the lease and non-lease parts, and combines each lease part and its related non-lease parts into leases respectively, and conducts accounting treatment in accordance with the lease standards; however, if the contract includes embedded derivatives that should be separated, the Company does not combine them with the lease part for accounting treatment. 1. The company serves as the lessee

(1) Lease confirmation

In addition to short-term leases and low-value asset leases, the company recognizes right-of-use assets and lease liabilities for leases on the start date of the lease period.

Right-of-use assets refer to the company's right as a lessee to use the leased assets during the lease period, and are initially measured at cost. The cost includes: ① the initial measurement amount of the lease liability; ② the lease payment amount paid on or before the start date of the lease term minus the amount related to the lease incentive that has been enjoyed; ③ the initial direct costs incurred; ④ the costs expected to be incurred to dismantle and remove the leased asset, restore the site where the leased asset is located, or restore the leased asset to the state agreed upon in the lease terms (except for those incurred for the production of inventory). If the company remeasures lease liabilities in accordance with the relevant provisions of the lease standards, the book value of the right-of-use assets will be adjusted accordingly.

The Company depreciates right-of-use assets on a straight-line basis based on the expected consumption pattern of the economic benefits related to the right-of-use assets. If it is reasonably certain that the ownership of the leased asset will be obtained at the expiration of the lease term, depreciation will be accrued over the remaining useful life of the leased asset; if it is not reasonably certain that the ownership of the leased asset will be obtained at the expiration of the lease term, depreciation will be accrued during the shorter of the lease term and the remaining useful life of the leased asset. The depreciation amount accrued shall be included in the cost of the relevant assets or the current profits and losses according to the purpose of the right-of-use assets.

The Company initially measures lease liabilities based on the present value of the unpaid lease payments at the beginning of the lease period. Lease payments include: ① Fixed payments and substantive fixed payments, net of lease incentive related amounts; ② Depends on the index or ratio

Notes to the financial statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd.

Variable lease payments at the rate from January 1, 2024 to March 31, 2026; ③ The exercise price of the purchase option when the company reasonably determines that it will exercise the purchase option; ④ The lease period reflects the amount to be paid to exercise the lease termination option when the company will exercise the lease termination option; ⑤ The amount expected to be paid based on the residual value of the guarantee provided by the company.

When calculating the present value of lease payments, the Company uses the interest rate implicit in the lease as the discount rate. /If the company cannot determine the interest rate implicit in the lease, it uses the incremental borrowing rate as the discount rate. The company calculates the interest expense of the lease liability in each period during the lease term based on a fixed periodic interest rate, and includes it in the current profit and loss, except for those that should be capitalized.

After the start date of the lease period, when the company recognizes the interest on the lease liability, it increases the carrying amount of the lease liability; when it pays the lease payment, it reduces the carrying amount of the lease liability. When the actual fixed payment amount changes, the expected amount payable of the guaranteed residual value changes, the index or ratio used to determine the lease payment changes, the evaluation results or actual exercise of the purchase option, lease renewal option or termination option change, the company remeasures the lease liability based on the present value of the changed lease payment.

(2) Short-term leasing and low-value asset leasing

For short-term leases with a lease period of no more than 12 months and low-value asset leases with a low value (less than RMB 50,000.00) when the individual leased assets are new assets, the company chooses not to recognize right-of-use assets and lease liabilities. The company will include the lease payments for short-term leases and low-value asset leases into the relevant asset costs or current profits and losses in each period during the lease term using the straight-line method or other systematic and reasonable methods.

The company is the lessor

As a lessor, if a lease transfers substantially all the risks and rewards related to the ownership of the leased asset, the Company classifies the lease as a finance lease, otherwise it is classified as an operating lease.

(1) Financial leasing

On the start date of the lease period, the Company recognizes finance lease receivables for finance leases and terminates the recognition of finance lease assets. When the Company initially measures the financial lease receivables, the net lease investment is used as the entry value of the financial lease receivables.

The net investment in a lease is the sum of the unguaranteed residual value and the present value of the lease payments that have not yet been received at the start of the lease term, discounted at the interest rate implicit in the lease. The Company calculates and recognizes interest income in each period during the lease term based on fixed periodic interest rates. Variable lease payments obtained by the Company that are not included in the measurement of net lease investment are included in the current profit and loss when actually incurred.

(2) Operating lease

During each period during the lease period, the Company uses the straight-line method to recognize the lease receipts from operating leases as rental income.

The company's initial direct expenses related to operating leases are capitalized into the cost of the leased asset, and are included in the current profit and loss in installments during the lease term based on the same recognition basis as rental income. Variable lease payments obtained by the company related to operating leases that are not included in the lease receipts are included in the current profit and loss when they actually occur.

Notes to the Financial Statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd. January 1, 2024 - March 31, 2026

If an operating lease changes, the Company will account for it as a new lease starting from the effective date of the change, and the amount of lease receipts received in advance or receivable related to the lease before the change is regarded as the amount of receipts from the new lease.

(3) Sale and leaseback

As the company is the buyer and lessor in the sale and leaseback transaction, the control rights of the relevant subject assets have not been transferred to the company. The company does not recognize the transferred assets, but recognizes a financial asset equal to the transfer income; the control rights of the relevant subject assets have been transferred to the company, and the asset transfer constitutes a sale. The company performs accounting treatment on the purchase of assets, and performs accounting treatment on the leasing of assets in accordance with the aforementioned policies.

(27) Changes in important accounting policies and changes in accounting estimates

Changes in important accounting policies

During the reporting period, the Company had no significant changes in accounting policies.

Changes in important accounting estimates

During the reporting period, the Company had no significant changes in accounting estimates.

4. Taxes

(1) Main tax types and tax rates

Tax Type Tax Calculation Basis Tax Rate

The output tax is calculated based on the income from the sale of goods and taxable services calculated according to the tax law.

Value-added tax 13%, 9%, 6%

After deducting the input tax allowed to be deducted in the current period, the difference is the value-added tax payable.

Urban maintenance and construction tax is calculated and paid based on the value-added tax payable at 7%

Education surcharge is calculated and paid based on the value-added tax payable at 3%

Local education surcharge is calculated and paid based on the value-added tax payable at 2%

Corporate income tax: 25% based on taxable income

5. Notes on important items in financial statements

(1) Monetary funds

Item March 31, 2026 December 31, 2025 Cash on hand as of December 31, 2024 3,000.00 Bank deposits 223,461,364.91 233,173,639.05 43,852,458.91 Other monetary funds 113,253,298.39 94,912,387.90 80,000,000.00

Total 336,714,663.30 328,086,026.95 123,855,458.91 Including: Amounts deposited abroad

total amount

(2) Accounts receivable

Disclosure by age

Notes to the Financial Statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd. January 1, 2024 - March 31, 2026

Aging March 31, 2026 December 31, 2025 Within 1 year (including 1 year) on December 31, 2024 36,753,555.53 18,355,889.69

1 to 2 years

2 to 3 years

3 to 4 years 932,272.36 4 to 5 years 482,272.36 482,272.36

More than 5 years

Subtotal 37,235,827.89 18,838,162.05 932,272.36 Less: Bad debt provision 849,807.92 663,644.26 932,272.36 Total 36,386,019.97 18,174,517.79

Classified disclosure according to bad debt accrual method

March 31, 2026

Category Book balance Bad debt provision

book value

Amount Proportion (%) Amount Provision Proportion (%)

Bad debt provision should be made on an individual basis

482,272.36 1.30 482,272.36 100.00

Collect accounts

The provision for bad debts should be made on a group basis

36,753,555.53 98.70 367,535.56 1.00 36,386,019.97Account collection

Among them: Portfolio 1: Aging portfolio 36,753,555.53 100.00 367,535.56 1.00 36,386,019.97 Portfolio 2: Related party portfolio

Total 37,235,827.89 100.00 849,807.92 —— 36,386,019.97

December 31, 2025

Category Book balance Bad debt provision

book value

Amount Proportion (%) Amount Provision Proportion (%)

Bad debt provision should be made on an individual basis

482,272.36 2.56 482,272.36 100.00

Collect accounts

The provision for bad debts should be made on a group basis

18,355,889.69 97.44 181,371.90 0.99 18,174,517.79Account collection

Among them: Portfolio 1: Aging portfolio 18,137,189.69 98.81 181,371.90 1.00 17,955,817.79 Portfolio 2: Related party portfolio 218,700.00 1.19 218,700.00Total 18,838,162.05 100.00 663,644.26 —— 18,174,517.79

December 31, 2024

Category Book balance Bad debt provision

book value

Amount Proportion (%) Amount Provision Proportion (%)

Bad debt provision should be made on an individual basis

932,272.36 100.00 932,272.36 100.00

Collect accounts

The provision for bad debts should be made on a group basis

Collect accounts

Among them: Combination 1: Aging combination

Combination 2: Related party combination

Notes to the Financial Statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd. January 1, 2024 - March 31, 2026 December 31, 2024

Category Book balance Bad debt provision

Book value amount Proportion (%) Amount Provision proportion (%)

Total 932,272.36 100.00 932,272.36 ——

(1) There are no important single accounts receivable for bad debt provision during the reporting period.

(2) Accounts receivable with provision for bad debts on a group basis

① Combination 1: Aging combination

March 31, 2026

Aging

Book balance Expected credit loss rate (%) Bad debt provision within 1 year (including 1 year) 36,753,555.53 1.00 367,535.56

December 31, 2025

Aging

Book balance Expected credit loss rate (%) Bad debt provision within 1 year (including 1 year) 18,137,189.69 1.00 181,371.90

② Combination 2: Related party combination

December 31, 2025

Aging

Book balance Expected credit loss rate (%) Bad debt provision within 1 year (including 1 year) 218,700.00

Bad debt provisions

Amount of changes in the current period

Category January 1, 2024 December 31, 2024

Provision Recovery or transfer Write-off Other changes

Provision based on individual items

947,272.36 15,000.00 932,272.36 Bad debt provision

Provision based on combination

2,783,514.44 2,783,514.44

Provision for bad debts

Among them: combination 1:

2,783,514.44 2,783,514.44

Aging combination

Total 3,730,786.80 2,798,514.44 932,272.36

Amount of changes in the current period

Category January 1, 2025 December 31, 2025

Provision Recovery or transfer Write-off Other changes

Provision based on individual items

932,272.36 450,000.00 482,272.36 Bad debt provision

Provision based on combination

181,371.90 181,371.90 Bad debt provision

Among them: combination

181,371.90 181,371.90 1: Aging combination

Total 932,272.36 181,371.90 450,000.00 663,644.26

Amount of changes in the current period

Category January 1, 2026 March 31, 2026

Provision Recovery or transfer Write-off Other changes

Notes to the financial statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd. Changes in the period from January 1, 2024 to March 31, 2026

Category January 1, 2026 March 31, 2026

Provision Recovery or transfer Write-off Other changes

Provision based on individual items

482,272.36 482,272.36 Bad debt provision

Provision based on combination

181,371.90 367,535.56 181,371.90 367,535.56 Bad debt provision

Among them: combination

181,371.90 367,535.56 181,371.90 367,535.56 1: Aging combination

Total 663,644.26 367,535.56 181,371.90 849,807.92

The top five accounts receivable at the end of the period based on debtors

As of March 31, 2026, the top five accounts receivable by debtor party at the end of the period.

Accounts receivable account for the balance of accounts receivable at the end of the period

Unit name Ending balance of bad debt provision

Ending balance Proportion of total amount (%)

Gansu Wengfu Chemical Co., Ltd. 21,225,650.23 57.00 212,256.51 Zhengyu Chemical (Ningxia) Co., Ltd. 11,092,500.00 29.79 110,925.00 Gansu Shi Kefeng Ecological Technology Co., Ltd. 4,435,405.30 11.91 44,354.05 Gansu Jiuli New Energy Environmental Protection Technology Co., Ltd. 482,272.36 1.30 482,272.36 Total 37,235,827.89 100.00 849,807.92

As of December 31, 2025, the top five accounts receivable by debtor party at the end of the period.

Accounts receivable account for the balance of accounts receivable at the end of the period

Unit name Ending balance of bad debt provision

Ending balance Proportion of total amount (%)

Gansu Shi Kefeng Ecological Technology Co., Ltd. 13,978,866.75 74.21 139,788.67 Jinchang Zhengyu Chemical Co., Ltd. 1,905,120.00 10.11 19,051.20 Ningxia Huizheng Trading Co., Ltd. 1,865,842.93 9.90 18,658.43 Gansu Jiuli New Energy Environmental Protection Technology Co., Ltd. 482,272.36 2.56 482,272.36 Gannenghua (Lanzhou New District) Thermal Power Co., Ltd. 218,700.00 1.16

Total 18,450,802.04 97.94 659,770.66

As of December 31, 2024, the top five accounts receivable by debtor party at the end of the period.

Accounts receivable account for the balance of accounts receivable at the end of the period

Unit name Ending balance of bad debt provision

Ending balance Proportion of total amount (%)

Gansu Jiuli New Energy Environmental Protection Technology Co., Ltd. 932,272.36 100.00 932,272.36

(3) Advance payments

Prepayments are listed based on aging

March 31, 2026 December 31, 2025 Aging on December 31, 2024

Amount Proportion (%) Amount Proportion (%) Amount Proportion (%) Within 1 year 6,762,236.63 100.00 4,297,396.37 100.00 3,266.41 100.00

Prepayments of the top five ending balances by prepayment objects

As of March 31, 2026, the prepayments of the top five closing balances by prepayment objects

Unit name accounting for the closing balance of prepayments Closing balance

Proportion of total (%)

Notes to the financial statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd. January 1, 2024 - March 31, 2026 Accounting for the closing balance of prepayments Unit name Closing balance

Proportion of the total (%) State Grid Gansu Electric Power Company Jinchang Power Supply Company 5,191,044.83 76.77 China Railway Lanzhou Bureau Group Co., Ltd. 1,247,637.60 18.45 China National Petroleum Corporation Gansu Jinchang Sales Branch 279,112.00 4.13 State Grid Huitong Jincai (Beijing) Information Technology Co., Ltd. 22,534.20 0.33 Gansu Te'an Special Equipment Technical Service Co., Ltd. 14,700.00 0.22 Total 6,755,028.63 99.90

As of December 31, 2025, the prepayments of the top five closing balances by prepayment objects

Unit name accounting for the closing balance of prepayments Closing balance

Proportion of the total (%) State Grid Gansu Electric Power Company Jinchang Power Supply Company 3,966,780.65 92.31 China National Petroleum Corporation Gansu Jinchang Sales Branch 178,404.67 4.15 State Grid Huitong Jincai (Beijing) Information Technology Co., Ltd. 60,731.24 1.41 China Railway Lanzhou Bureau Group Co., Ltd. 53,469.81 1.24 Jinchang Dongteng Safety Technology Consulting and Training Co., Ltd. 23,310.00 0.54 Total 4,282,696.37 99.65

As of December 31, 2024, the prepayments of the top five closing balances by prepayment objects

Unit name accounting for the closing balance of prepayments Closing balance

Proportion of the total (%) China National Petroleum Corporation Gansu Jinchang Sales Branch 3,266.41 100.00

(4) Other receivables

Item March 31, 2026 December 31, 2025 Other receivables on December 31, 2024 100,214,200.00 3,200.00 81,300.00

Other receivables

(1) Disclosure based on aging

Aging March 31, 2026 December 31, 2025 Within 1 year (including 1 year) on December 31, 2024 100,211,000.00

1 to 2 years

2 to 3 years

3 to 4 years 271,000.00 4 to 5 years 16,000.00 16,000.00

More than 5 years

Subtotal 100,227,000.00 16,000.00 271,000.00Less: Bad debt provision 12,800.00 12,800.00 189,700.00Total 100,214,200.00 3,200.00 81,300.00

(2) Disclosure according to the nature of the payment

Nature of payment March 31, 2026 December 31, 2025 December 31, 2024

Notes to the Financial Statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd. January 1, 2024 - March 31, 2026

Nature of payment March 31, 2026 December 31, 2025 Related party borrowings on December 31, 2024 100,211,000.00

Security deposit 16,000.00 16,000.00 271,000.00

Subtotal 100,227,000.00 16,000.00 271,000.00Less: Bad debt provision 12,800.00 12,800.00 189,700.00Total 100,214,200.00 3,200.00 81,300.00

(3) Classified disclosure according to bad debt accrual method

March 31, 2026

Book balance Bad debt provision

1. Original book value

January 1, 2024 763,706.54 1,223,963.65 1,987,670.19 2. Increase in the current period 70,049.86 367,470.54 437,520.40 (1) Purchase 70,049.86 367,470.54 437,520.40 (2) Transfer of projects under construction
Reduction amount in this period

(1) Disposal or scrapping

(2) Others

December 31, 2024 833,756.40 1,591,434.19 2,425,190.59

2. Accumulated depreciation

January 1, 2024 145,399.09 255,826.72 401,225.81 2. Increase in the current period 90,170.76 263,713.30 353,884.06 (1) Provision 90,170.76 263,713.30 353,884.06 (2) Others
Reduction amount in this period

(1) Disposal or scrapping

(2) Others

December 31, 2024 235,569.85 519,540.02 755,109.87

3. Impairment provision

January 1, 2024
Increase amount in this period

(1) Provision

Reduction amount in this period

(1) Disposal or scrapping

December 31, 2024

IV. December 31, 2024

598,186.55 1,071,894.17 1,670,080.72 Book value

Items Houses and buildings Machinery and equipment Transportation equipment Other assets Total

1. Original book value

January 1, 2025 833,756.40 1,591,434.19 2,425,190.59 2. Increase in the current period 685,940,462.23 2,012,164,277.89 264,381.24 1,111,408.97 2,699,480,530.33 (1) Purchase 309,715.34 264,381.24 1,111,408.97 1,685,505.55 (2) Transfer of construction in progress 685,940,462.23 2,011,854,562.55 2,697,795,024.78

Notes to the Financial Statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd. January 1, 2024 - March 31, 2026

Items Houses and buildings Machinery and equipment Transportation equipment Other assets Total 3. Decrease amount in this period

(1) Disposal or scrapping

(2) Others

December 31, 2025 685,940,462.23 2,012,164,277.89 1,098,137.64 2,702,843.16 2,701,905,720.92

2. Accumulated depreciation

January 1, 2025 235,569.85 519,540.02 755,109.87 2. Increase in the current period 5,740,963.59 31,896,201.25 109,868.01 375,886.87 38,122,919.72 (1) Provision 5,740,963.59 31,896,201.25 109,868.01 375,886.87 38,122,919.72 (2) Others
Reduction amount in this period

(1) Disposal or scrapping

(2) Others

December 31, 2025 5,740,963.59 31,896,201.25 345,437.86 895,426.89 38,878,029.59

3. Impairment provision

January 1, 2025
Increase amount in this period

(1) Provision

Reduction amount in this period

(1) Disposal or scrapping

December 31, 2025

IV. December 31, 2025

680,199,498.64 1,980,268,076.64 752,699.78 1,807,416.27 2,663,027,691.33 Book value

Items Houses and buildings Machinery and equipment Transportation equipment Other assets Total

1. Original book value

January 1, 2026 685,940,462.23 2,012,164,277.89 1,098,137.64 2,702,843.16 2,701,905,720.92 2. Increase in the current period 18,603.54 18,603.54 (1) Purchase 18,603.54 18,603.54 (2) Transfer of construction in progress
Reduction amount in this period 221,454.11 221,454.11 (1) Disposal or scrapping

(2) Others 221,454.11 221,454.11 4. March 31, 2026 685,719,008.12 2,012,182,881.43 1,098,137.64 2,702,843.16 2,701,702,870.35

2. Accumulated depreciation

January 1, 2026 5,740,963.59 31,896,201.25 345,437.86 895,426.89 38,878,029.59 2. Increase in the current period 4,072,428.48 23,903,765.47 30,101.52 115,085.13 28,121,380.60 (1) Provision 4,072,428.48 23,903,765.47 30,101.52 115,085.13 28,121,380.60 (2) Others
Reduction amount in this period

Notes to the Financial Statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd. January 1, 2024 - March 31, 2026

Items Houses and buildings Machinery and equipment Transportation equipment Other assets Total (1) Disposal or scrapping

(2) Others

March 31, 2026 9,813,392.07 55,799,966.72 375,539.38 1,010,512.02 66,999,410.19

3. Impairment provision

January 1, 2026
Increase amount in this period

(1) Provision

Reduction amount in this period

(1) Disposal or scrapping

March 31, 2026

IV. Accounts as of March 31, 2026

675,905,616.05 1,956,382,914.71 722,598.26 1,692,331.14 2,634,703,460.16 Face value

(2) Failure to obtain the property rights certificate

Item Book value on March 31, 2026 Reasons for not completing the property ownership certificate Houses and buildings 303,988,648.08 In process

(8) Projects under construction

Project March 31, 2026 December 31, 2025 Construction in progress on December 31, 2024 2,410,492,001.78

1.Construction in progress

(1) Basic situation of projects under construction

December 31, 2024

Project

Book balance Impairment provision Book value High efficiency utilization of low-rank coal for hydrogen production and 500,000 tons/year

2,410,492,001.78 2,410,492,001.78 Concentration urine-based compound fertilizer project

Notes to the Financial Statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd. January 1, 2024 - March 31, 2026

(2) Changes in major construction projects under construction

Accumulation of projects including: interest for this period and interest for this period

January 1, 2024 Transferred to fixed assets in this period Others in this period December 2024 Project progress Interest capitalization

Project name Budget number Increase amount in this period Investment accounted for Pre-interest capitalization Capitalization rate Fund source date Fixed asset amount Decrease amount 31 days (%) Cumulative amount

Calculation proportion (%) Amount (%)

low rank coal high

Utility control

Hydrogen and 500,000 self-owned funds+

3,009,460,800.00 855,338,684.24 1,555,153,317.54 2,410,492,001.78 80.10 80.10 27,282,575.80 26,212,326.20 3.32

tons/year high concentration bank loan

Hefei project

Accumulation of projects including: current period profit for this period

January 1, 2025 Transferred to fixed in this period Others in this period December 2025 Project progress Interest capitalization

Project name Budget number Increase amount in this period Investment accounted for Pre-interest capitalization Interest capital Fund source date Asset amount Decrease amount 31 days (%) Cumulative amount

Calculation proportion (%) Amount Conversion rate (%)

low rank coal high

Utility control

Hydrogen and 500,000 self-owned funds +

3,009,460,800.00 2,410,492,001.78 287,303,023.00 2,697,795,024.78 89.64 100.00 60,091,796.09 32,809,220.29 2.92

tons/year high concentration bank loan

Hefei project

Notes to the Financial Statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd. January 1, 2024 - March 31, 2026

(9) Right-of-use assets

Right-of-use assets

Project Houses and Buildings Total

1. Original book value

January 1, 2024 2,620,350.99 2,620,350.99 2. Increase in the current period 298,998.21 298,998.21 (1) New leases 298,998.21 298,998.21 3. Decrease in the current period

(1) Disposal

December 31, 2024 2,919,349.20 2,919,349.20

2. Accumulated depreciation

January 1, 2024 480,397.72 480,397.72 2. Increase in the current period 548,986.77 548,986.77 (1) Provision 548,986.77 548,986.77 3. Decrease in the current period

(1) Disposal

December 31, 2024 1,029,384.49 1,029,384.49

3. Impairment provision

January 1, 2024
Increase amount in this period

(1) Provision

Reduction amount in this period

(1) Disposal

December 31, 2024
Book value as of December 31, 2024 1,889,964.71 1,889,964.71

Project Houses and Buildings Total

1. Original book value

January 1, 2025 2,919,349.20 2,919,349.20 2. Increase in this period

(1) New lease

Reduction amount in the current period 363,837.87 363,837.87 (1) Disposal 363,837.87 363,837.87
December 31, 2025 2,555,511.33 2,555,511.33

2. Accumulated depreciation

January 1, 2025 1,029,384.49 1,029,384.49 2. Increase in the current period 587,352.54 587,352.54 (1) Provision 587,352.54 587,352.54

Notes to the Financial Statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd. January 1, 2024 - March 31, 2026

Project Houses and Buildings Total

Reduction amount in the current period 175,855.13 175,855.13 (1) Disposal 175,855.13 175,855.13
December 31, 2025 1,440,881.90 1,440,881.90

3. Impairment provision

January 1, 2025
Increase amount in this period

(1) Provision

Reduction amount in this period

(1) Disposal

December 31, 2025
Book value as of December 31, 2025 1,114,629.43 1,114,629.43

Project Houses and Buildings Total

1. Original book value

January 1, 2026 2,555,511.33 2,555,511.33 2. Increase in this period

(1) New lease

Reduction amount in this period

(1) Disposal

March 31, 2026 2,555,511.33 2,555,511.33

2. Accumulated depreciation

January 1, 2026 1,440,881.90 1,440,881.90 2. Increase in the current period 137,742.18 137,742.18 (1) Provision 137,742.18 137,742.18 3. Decrease in the current period

(1) Disposal

March 31, 2026 1,578,624.08 1,578,624.08

3. Impairment provision

January 1, 2026
Increase amount in this period

(1) Provision

Reduction amount in this period

(1) Disposal

March 31, 2026
Book value on March 31, 2026 976,887.25 976,887.25

(10) Intangible assets

Intangible assets

Notes to the Financial Statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd. Urea Production Capacity Index from January 1, 2024 to March 31, 2026

Project Land use rights Software use rights Technology use rights Total

mark

1. Original book value

January 1, 2024 27,842,710.58 53,451.28 8,960,000.00 36,856,161.86 2. Increase in the current period 91,000.13 91,000.13 (1) Purchase 91,000.13 91,000.13 3. Reduction amount in this period

(1)Disposal

December 31, 2024 27,933,710.71 53,451.28 8,960,000.00 36,947,161.99

2. Accumulated amortization

January 1, 2024 371,236.14 24,636.97 395,873.11 2. Increase in the current period 558,547.93 10,690.20 569,238.13 (1) Provision 558,547.93 10,690.20 569,238.13 3. Reduction amount in this period

(1)Disposal

December 31, 2024 929,784.07 35,327.17 965,111.24

3. Impairment provision

January 1, 2024
Increase amount in this period

(1) Provision

Reduction amount in this period

(1)Disposal

December 31, 2024
Book value as of December 31, 2024 27,003,926.64 18,124.11 8,960,000.00 35,982,050.75

Software usage Urea production capacity index

Project Land use rights Technology use rights Total

token

1. Original book value

January 1, 2025 27,933,710.71 53,451.28 8,960,000.00 36,947,161.99 2. Increase in the current period 39,523,773.58 11,126,037.74 50,649,811.32 (1) Purchase 39,523,773.58 11,126,037.74 50,649,811.32 3. Decrease amount in the current period

(1)Disposal

December 31, 2025 27,933,710.71 53,451.28 39,523,773.58 20,086,037.74 87,596,973.31

2. Accumulated amortization

January 1, 2025 929,784.07 35,327.17 965,111.24 2. Increase in the current period 558,701.88 9,885.16 878,306.08 781,123.73 2,228,016.85 (1) Provision 558,701.88 9,885.16 878,306.08 781,123.73 2,228,016.85 3. Decrease amount in the current period

(1)Disposal

Notes to the financial statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd. January 1, 2024 - March 31, 2026 Software usage Urea production capacity index

Project Land use rights Technology use rights Total

token

December 31, 2025 1,488,485.95 45,212.33 878,306.08 781,123.73 3,193,128.09

3. Impairment provision

January 1, 2025
Increase amount in this period

(1)Provision

Reduction amount in this period

(1)Disposal

December 31, 2025
Book value as of December 31, 2025 26,445,224.76 8,238.95 38,645,467.50 19,304,914.01 84,403,845.22

Urea production capacity index

Project Land use rights Software use rights Technology use rights Total

mark

1. Original book value

January 1, 2026 27,933,710.71 53,451.28 39,523,773.58 20,086,037.74 87,596,973.31 2. Increase in the current period

(1) Purchase

Reduction amount in this period

(1)Disposal

March 31, 2026 27,933,710.71 53,451.28 39,523,773.58 20,086,037.74 87,596,973.31

2. Accumulated amortization

January 1, 2026 1,488,485.95 45,212.33 878,306.08 781,123.73 3,193,128.09 2. Increase in the current period 139,675.47 1,176.99 658,729.56 334,767.36 1,134,349.38 (1) Provision 139,675.47 1,176.99 658,729.56 334,767.36 1,134,349.38 3. Decrease amount in the current period

(1)Disposal

March 31, 2026 1,628,161.42 46,389.32 1,537,035.64 1,115,891.09 4,327,477.47

3. Impairment provision

January 1, 2026
Increase amount in this period

(1)Provision

Reduction amount in this period

(1)Disposal

March 31, 2026
Book value on March 31, 2026 26,305,549.29 7,061.96 37,986,737.94 18,970,146.65 83,269,495.84

(11) Long-term deferred expenses

Category Increase in the current period on January 1, 2024 Amortization in the current period Other decreases Changes in leased fixed assets on December 31, 2024

2,501,870.65 147,105.04 650,163.17 1,998,812.52 Good expenses

Notes to the Financial Statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd. January 1, 2024 - March 31, 2026

Category Increase in the current period on January 1, 2025 Amortization in the current period Other decreases Changes in leased fixed assets on December 31, 2025

1,998,812.52 648,263.52 1,350,549.00 Good expenses

Category Increase in the current period on January 1, 2026 Amortization in the current period Other decreases Changes in leased fixed assets on March 31, 2026

1,350,549.00 162,065.88 1,188,483.12 Good expenses

(12) Deferred income tax assets and deferred income tax liabilities

Deferred income tax assets and deferred income tax liabilities without offset

Project March 31, 2026

Deferred income tax assets/liabilities Deductible/taxable temporary differences Deferred income tax assets:

Asset impairment provision 215,651.98 862,607.92 Lease liabilities 295,933.85 1,183,735.41

Subtotal 511,585.83 2,046,343.33 Deferred income tax liabilities:

Right-of-use assets 244,221.81 976,887.25 Subtotal 244,221.81 976,887.25

December 31, 2025

Project

Deferred income tax assets/liabilities Deductible/taxable temporary differences Deferred income tax assets:

Asset impairment provision 169,111.07 676,444.26 Lease liabilities 321,112.67 1,284,450.67

Subtotal 490,223.74 1,960,894.93 Deferred income tax liabilities:

Right-of-use assets 278,657.36 1,114,629.43 Subtotal 278,657.36 1,114,629.43

Details of deferred income tax assets not recognized

Item March 31, 2026 December 31, 2025 Deductible temporary differences on December 31, 2024 1,121,972.36 Deductible losses 778,316.53 Total 1,900,288.89

Deductible losses that have not been recognized as deferred income tax assets will expire in the following years

Year March 31, 2026 December 31, 2025 December 31, 2024 Note: 2025

2026

2027

2028

Notes to the Financial Statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd. January 1, 2024 - March 31, 2026

Year March 31, 2026 December 31, 2025 December 31, 2024 Note 2029 778,316.53

Total 778,316.53

(13) Other non-current assets

December 31, 2024

Project

Book balance Impairment provision Book value

Prepayment for long-term asset acquisition 5,563,018.87 5,563,018.87

(14) Assets with restricted ownership or use rights

March 31, 2026

Project

Book balance Book value Restricted type Restricted situation Monetary funds 113,253,298.39 113,253,298.39 Security deposit Monetary funds of bank acceptance bill margin 10,000,000.00 10,000,000.00 Freeze Total litigation freeze 123,253,298.39 123,253,298.39

December 31, 2025

Project

Book balance Book value Restricted type Restricted situation Monetary funds 94,912,387.90 94,912,387.90 Security deposit Bank acceptance bill security deposit

December 31, 2024

Project

Book balance Book value Restricted type Restricted situation Monetary funds 80,000,000.00 80,000,000.00 Security deposit Bank acceptance bill security deposit

(15) Notes payable

Item March 31, 2026 December 31, 2025 Bank acceptance bill on December 31, 2024 113,253,298.39 94,912,387.90 80,000,000.00

(16) Accounts payable

Classification by age

Project March 31, 2026 December 31, 2025 December 31, 2024 Within 1 year (including 1 year) 287,760,496.01 265,425,778.63 572,955,691.16 More than 1 year 275,650,578.97 276,940,762.99 343,440.02Total 563,411,074.98 542,366,541.62 573,299,131.18

As of March 31, 2026, important accounts payable that are aged more than 1 year or are overdue

Name of the creditor Ending balance Reasons for outstanding repayment or non-carryover Aerospace Changzheng Chemical Engineering Co., Ltd. 149,832,537.12 The settlement period has not yet expired

China Wuhuan Engineering Co., Ltd. 116,262,740.72 Not yet due settlement period

Lanzhou Coal Mine Design and Research Institute Co., Ltd. 6,660,852.48 Not yet due in settlement period

Lanzhou Oriental Pearl System Engineering Co., Ltd. 2,771,655.00 Not yet due in settlement period

Notes to the financial statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd.

Name of creditor unit from January 1, 2024 to March 31, 2026 Ending balance Reasons for non-repayment or non-carryover

Total 275,527,785.32

(17) Contract liabilities

Classification of contract liabilities

Item March 31, 2026 December 31, 2025 Advance payment for goods received on December 31, 2024 32,952,112.04 26,567,534.54

As of March 31, 2026, there were no important contract liabilities with an aging of more than 1 year.

(18) Employee benefits payable

Classified presentation of employee benefits payable

Item January 1, 2024 Increase in the current period Decrease in the current period Short-term compensation on December 31, 2024 2,959,800.18 34,147,966.90 35,006,819.26 2,100,947.82 Post-employment benefits - defined contribution plan 213,769.00 3,420,468.98 3,634,237.98

Termination benefits

Other benefits due within one year

Total 3,173,569.18 37,568,435.88 38,641,057.24 2,100,947.82

Item January 1, 2025 Increase in the current period Decrease in the current period Short-term compensation on December 31, 2025 2,100,947.82 80,223,773.78 74,662,453.75 7,662,267.85 Post-employment benefits - defined contribution plan 10,292,056.74 10,292,056.74

Termination benefits

Other benefits due within one year

Total 2,100,947.82 90,515,830.52 84,954,510.49 7,662,267.85

Item January 1, 2026 Increase in the current period Decrease in the current period Short-term compensation on March 31, 2026 7,662,267.85 15,134,894.99 17,595,842.41 5,201,320.43 Post-employment benefits - defined contribution plan 3,391,871.68 3,391,871.68

Termination benefits

Other benefits due within one year

Total 7,662,267.85 18,526,766.67 20,987,714.09 5,201,320.43

Short-term employee compensation situation

Item January 1, 2024 Increase in the current period Decrease in the current period Salaries, bonuses, allowances and subsidies on December 31, 2024 2,631,984.57 27,145,611.21 28,328,501.78 1,449,094.00 Employee welfare fees 2,096,282.13 2,096,282.13

Social insurance premiums 1,526,982.70 1,526,982.70

Including: medical and maternity insurance premiums 1,317,162.14 1,317,162.14

Work injury insurance premium 209,820.56 209,820.56

Housing provident fund 1,988,086.00 1,988,086.00

Notes to the financial statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd.

Projects from January 1, 2024 to March 31, 2026 January 1, 2024 Increase in this period Decrease in this period Union funds and employee education funds on December 31, 2024 280,349.30 950,096.40 602,280.57 628,165.13 Other short-term compensation 47,466.31 440,908.46 464,686.08 23,688.69Total 2,959,800.18 34,147,966.90 35,006,819.26 2,100,947.82

Item January 1, 2025 Increase in the current period Decrease in the current period Salaries, bonuses, allowances and subsidies on December 31, 2025 1,449,094.00 59,110,158.97 54,064,017.13 6,495,235.84 Employee welfare fees 8,929,770.10 8,929,770.10

Social insurance premiums 4,004,180.09 4,004,180.09

Including: medical and maternity insurance premiums 3,447,025.77 3,447,025.77

Work injury insurance premium 557,154.32 557,154.32

Housing provident fund 5,250,475.00 5,250,475.00

Union funds and employee education funds 628,165.13 2,068,855.75 1,529,988.87 1,167,032.01 Other short-term compensation 23,688.69 860,333.87 884,022.56

Total 2,100,947.82 80,223,773.78 74,662,453.75 7,662,267.85

Item January 1, 2026 Increase in the current period Decrease in the current period Salaries, bonuses, allowances and subsidies on March 31, 2026 6,495,235.84 9,802,772.23 12,029,304.14 4,268,703.93 Employee welfare fees 1,668,625.50 1,668,625.50

Social insurance premium 1,255,228.77 1,255,228.77

Including: medical and maternity insurance premiums 1,080,236.84 1,080,236.84

Work injury insurance premium 174,991.93 174,991.93

Housing provident fund 1,651,272.00 1,651,272.00

Union funds and employee education funds 1,167,032.01 343,097.19 577,512.70 932,616.50 Other short-term compensation 413,899.30 413,899.30

Total 7,662,267.85 15,134,894.99 17,595,842.41 5,201,320.43

Set up the withdrawal plan

Item January 1, 2024 Increase in the current period Decrease in the current period Basic pension insurance on December 31, 2024 2,655,290.82 2,655,290.82

Unemployment insurance premium 116,169.03 116,169.03

Enterprise annuity payment 213,769.00 649,009.13 862,778.13

Total 213,769.00 3,420,468.98 3,634,237.98

Item January 1, 2025 Increase in the current period Decrease in the current period Basic pension insurance on December 31, 2025 6,953,559.63 6,953,559.63

Unemployment insurance premium 304,220.48 304,220.48

Enterprise annuity payment 3,034,276.63 3,034,276.63

Total 10,292,056.74 10,292,056.74

Notes to the Financial Statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd. January 1, 2024 - March 31, 2026

Item January 1, 2026 Increase in the current period Decrease in the current period Basic pension insurance on March 31, 2026 2,176,414.57 2,176,414.57

Unemployment insurance premium 95,218.24 95,218.24

Enterprise annuity payment 1,120,238.87 1,120,238.87

Total 3,391,871.68 3,391,871.68

(19) Taxes payable

Item March 31, 2026 December 31, 2025 Corporate income tax on December 31, 2024 6,645,524.89 11,391.39 Personal income tax 4,786.95 667,001.83 616,526.80 Real estate tax 960,000.00

Land use tax 321,650.49

Stamp duty 134,924.36 250,261.25 62,374.64 Other taxes and fees 199,154.12 246,599.53

Total 8,266,040.81 1,163,862.61 690,292.83

(20) Other payables

Item March 31, 2026 December 31, 2025 Other payables on December 31, 2024 5,407,303.26 4,953,698.53 1,112,846.74

Other payables

(1) Classification by nature of payment

Item March 31, 2026 December 31, 2025 Current account on December 31, 2024 1,032,788.74 884,545.95 601,242.46 Security deposit 3,017,397.00 3,025,397.00 16,860.60 Withholding amount 1,461.33

Party work funds 971,334.48 873,706.75 304,520.48 Others 385,783.04 168,587.50 190,223.20Total 5,407,303.26 4,953,698.53 1,112,846.74

(2) As of March 31, 2026, there were no important other payables aged more than 1 year or overdue.

(21) Non-current liabilities due within one year

Item March 31, 2026 December 31, 2025 Lease liabilities due within one year on December 31, 2024 598,437.60 598,437.60 677,457.60

(22) Other current liabilities

Item March 31, 2026 December 31, 2025 Output tax to be transferred on December 31, 2024 2,909,587.04 2,571,328.94

(23) Long-term loans

Project March 31, 2026 December 31, 2025 December 31, 2024

Notes to the Financial Statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd. Interest Rate Zone from January 1, 2024 to March 31, 2026

Ending balance Interest rate range Ending balance Ending balance Interest rate range

room

Guaranteed borrowings 1,950,525,744.74 2.75-2.89 1,950,525,744.74 2.75-3.10 1,613,184,416.40 2.85-3.59 Undue interest payable 1,594,294.18 1,632,826.61 1,399,845.65

Total 1,952,120,038.92 1,952,158,571.35 1,614,584,262.05

(24) Lease liabilities

Item March 31, 2026 December 31, 2025 Lease payment on December 31, 2024 1,210,625.80 1,318,983.40 2,601,472.80 Less: Unrecognized financing costs 26,890.39 34,532.73 97,907.43 Less: Lease liabilities due within one year 598,437.60 598,437.60 677,457.60 Total 585,297.81 686,013.07 1,826,107.77

(25) Deferred income

Project January 1, 2024 Increase in the current period Decrease in the current period December 31, 2024 Causes Government subsidies 6,000,000.00 6,000,000.00

Project January 1, 2025 Increase in the current period Decrease in the current period December 31, 2025 Causes Government subsidies 6,000,000.00 100,000.00 5,900,000.00

Project January 1, 2026 Increase in the current period Decrease in the current period March 31, 2026 Causes Government subsidies 5,900,000.00 75,000.00 5,825,000.00

(26) Paid-in capital

Investor name January 1, 2024 Increase in this period Decrease in this period December 31, 2024 Gansu Energy and Chemical Investment Group Co., Ltd. 397,600,000.00 156,900,000.00 554,500,000.00

Investor name January 1, 2025 Increase in this period Decrease in this period December 31, 2025 Gansu Energy and Chemical Investment Group Co., Ltd. 554,500,000.00 198,500,000.00 753,000,000.00

Investor name January 1, 2026 Increase in this period Decrease in this period March 31, 2026 Gansu Energy and Chemical Investment Group Co., Ltd. 753,000,000.00 753,000,000.00

(27) Capital reserve

Item January 1, 2024 Increase in the current period Decrease in the current period Capital premium on December 31, 2024 2,159.20 2,159.20

Item January 1, 2025 Increase in the current period Decrease in the current period Capital premium on December 31, 2025 2,159.20 2,159.20

Item January 1, 2026 Increase in the current period Decrease in the current period Capital premium on March 31, 2026 2,159.20 2,159.20

Notes to the Financial Statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd. January 1, 2024 - March 31, 2026

(28) Special reserves

Item January 1, 2025 Increase in the current period Decrease in the current period Production safety expenses on December 31, 2025 4,645,851.64 262,516.94 4,383,334.70

Item January 1, 2026 Increase in the current period Decrease in the current period Production safety expenses on March 31, 2026 4,383,334.70 1,161,462.91 519,195.96 5,025,601.65

(29) Surplus reserve

Item January 1, 2025 Increase in the current period Decrease in the current period Statutory surplus reserve on December 31, 2025 1,470,157.92 1,470,157.92

Item January 1, 2026 Increase in the current period Decrease in the current period Statutory surplus reserve on March 31, 2026 1,470,157.92 1,470,157.92

(30) Undistributed profits

Item January to March 2026 2025 Year 2024 Undistributed profit at the end of the previous period before adjustment 13,231,421.26 -8,471,119.89 -10,254,218.21 Total undistributed profit at the beginning of the adjustment period (adjustment +, decrease -)

Undistributed profit at the beginning of the adjusted period 13,231,421.26 -8,471,119.89 -10,254,218.21 Plus: Transfer of net profit for the period 32,183,291.24 23,172,699.07 1,783,098.32 Less: Withdrawal of statutory surplus reserve 1,470,157.92

Withdraw discretionary surplus reserve

Dividends payable on common shares

Common stock dividends converted into capital

Undistributed profit at the end of the period 45,414,712.50 13,231,421.26 -8,471,119.89

(31) Operating income and operating costs

Operating income and operating costs

January-March 2026

Project

revenue cost

Main business 252,208,140.16 190,398,499.55

2025

Project

revenue cost

Main business 395,495,598.19 334,384,596.85 Other businesses 73,744.24

Total 395,569,342.43 334,384,596.85

2024

Project

revenue cost

Notes to the Financial Statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd. January 1, 2024 - March 31, 2026, 2024

Project

revenue cost

Main business 51,599.46

Note: The company's coal trading business belongs to the agency model based on the business essence, and the net amount method is used to recognize revenue during the reporting period.

Breakdown information of operating income and operating costs

January-March 2026

Project

Operating income Operating costs

By business type

Urea 136,578,508.29 95,825,641.36 Synthetic ammonia 108,069,905.92 87,056,218.50 Others 7,559,725.95 7,516,639.69 Total 252,208,140.16 190,398,499.55

2025

Project

Operating income Operating costs

By business type

Urea 230,147,992.96 184,541,687.32 Synthetic ammonia 154,954,914.82 139,465,697.99 Others 10,466,434.65 10,377,211.54 Total 395,569,342.43 334,384,596.85

2024

Project

Operating income Operating costs

By business type

Mixed coal 50,790.88

Lantan 808.58

Total 51,599.46

(32) Taxes and surcharges

Project January-March 2026 2025 2024

Property tax 960,000.00 3,115,409.08

Land use tax 321,650.49 643,301.00

Stamp tax 135,196.36 353,675.22 13,833.37 Environmental protection tax 199,154.12 417,859.22

Total 1,616,000.97 4,530,244.52 13,833.37

(33) Sales expenses

Project January-March 2026 2025 2024

Notes to the financial statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd.

Project from January 1, 2024 to March 31, 2026 January to March 2026 2025 Employee compensation in 2024 315,958.16 1,030,804.15

Depreciation and amortization expenses 3,994.86 14,538.36

Office travel and conference expenses 2,024.16 54,154.39

Business entertainment expenses 1,592.00 15,568.00

Materials and low-consumables 2,039.92

Vehicle usage fee 818.00

Other expense items 6,301.00

Total 323,569.18 1,124,223.82

(34) Management expenses

Project January to March 2026 2025 2024 Employee compensation 2,512,118.12 10,410,778.97

Depreciation expense 442,207.24 920,306.35

Consulting fee 270,600.00 1,033,274.85

Disability security fund 210,000.00 348,128.22

Amortization of intangible assets 139,675.47 846,745.22

Office expenses 73,732.71 186,691.75

Utilities 66,576.99 126,038.28

Travel expenses 54,895.98 132,783.28

Freight 21,766.26 38,066.33

Business entertainment expenses 10,009.00 52,735.00

Amortization of low-value consumables 926,041.88

Fees for hiring intermediaries 208,783.01 157,595.74 Other expenses 18,655.72 430,575.80

Total 3,820,237.49 15,660,948.94 157,595.74

(35) Financial expenses

Project January to March 2026 2025 Year 2024 Interest expense 13,558,006.08 17,501,908.20 752,596.89 Less: Interest income 1,035,692.65 425,295.92

Handling fee expenses 9,548.44 30,608.81

Total 12,531,861.87 17,107,221.09 752,596.89

(36) Other income

Project January to March 2026 2025 2024 Asset-related/income-related government subsidies (asset-related) 75,000.00 100,000.00 Asset-related government subsidies (income-related) 165,438.82 Income-related individual tax fee refund 16,120.07 2,964.63 1,367.68

Total 91,120.07 268,403.45 1,367.68

Notes to the Financial Statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd. January 1, 2024 - March 31, 2026

(37) Credit impairment losses

Item January to March 2026 2025 Credit impairment losses on accounts receivable in 2024 -186,163.66 268,628.10 2,798,514.44 Credit impairment losses on other receivables 76,900.00 -103,000.00 Total -186,163.66 345,528.10 2,695,514.44

(38) Income from asset disposal

Project January to March 2026 2025 Early lease withdrawal of right-of-use assets in 2024 9,172.08

(39) Non-operating income

January to March 2026 2025 2024

Items included in non-occurring amounts of the current period included in non-occurring amounts of the current period included in the non-occurring amounts of the current period Recurring gains and losses Occurrence amount Recurring gains and losses Occurrence amount Recurring gains and losses

Amount Amount Amount Liquidated damages and penalty income 200.00 200.00 8,870.00 8,870.00 14,000.00 14,000.00Others 0.18 0.18 0.63 0.63

Total 200.18 200.18 8,870.63 8,870.63 14,000.00 14,000.00

(40) Non-operating expenses

January to March 2026 2025 2024

Amount Amount Amount External donation 10,000.00 10,000.00 9,000.00 9,000.00 Late payment fee 34,615.95 34,615.95 1,857.57 1,857.57Total 44,615.95 44,615.95 10,857.57 10,857.57

(41) Income tax expenses

Details of income tax expenses

Project January to March 2026 2025 Current income tax expense in 2024 11,295,634.09 388,332.83 44,499.69 Deferred income tax expense -55,797.64 -211,566.38

Total 11,239,836.45 176,766.45 44,499.69

Adjustment process of accounting profits and income tax expenses

Project January to March 2026 2025 Total profit in 2024 43,423,127.69 23,349,465.52 1,827,598.01 Income tax expense calculated according to statutory/applicable tax rates 10,855,781.92 5,837,366.38 456,899.50 Impact of different tax rates applicable to subsidiaries

Effect of adjusting income tax in previous periods 44,499.69 Effect of non-taxable income

Effect of non-deductible costs, expenses and losses 384,054.53 1,822,633.55 22,399.98

Notes to the Financial Statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd. January 1, 2024 - March 31, 2026

Item January to March 2026 2025 Use the deductible deferred income tax assets unrecognized in the previous period in 2024

-475,072.22 -704,003.61 Impact of temporary differences or deductible losses

Deductible temporary deductible deferred income tax assets not recognized in the current period

224,704.13 Impact of sexual differences or deductible losses

Other impacts -7,008,161.26

Income tax expenses 11,239,836.45 176,766.45 44,499.69

Note: Other impacts in 2025 -7,008,161.26 yuan are special equipment credits.

(42) Cash flow statement

Cash related to operating activities

(1) Other cash received related to operating activities

Project January to March 2026 2025 Year 2024 Interest income 836,636.05 425,295.92

Security deposit 3,000,000.00 8,100,000.00 650,000.00 Current account 1,450,000.00 2,914,590.90 Others 710,495.26 802,780.84 486,809.22Total 4,547,131.31 10,778,076.76 4,051,400.12

(2) Other cash paid related to operating activities

Project January to March 2026 2025 Year 2024 Security deposit 3,000,000.00 5,000,000.00 1,550,000.00 Current accounts 18,288.58 1,951,369.42 Restricted monetary funds at the end of the period 10,000,000.00

Other expenses 1,393,017.04 757,005.68 497,691.47Total 14,393,017.04 5,775,294.26 3,999,060.89

Cash related to investing activities

(1) Cash payments related to important investment activities

Project January-March 2026 2025 2024 High-efficiency utilization of low-rank coal for hydrogen production and 500,000 tons/year high-concentration

1,859,484.02 364,640,758.63 1,291,150,191.74 Urine-based compound fertilizer project

(2) Other cash paid related to investment activities

Project January-March 2026 2025 Funds paid for inter-enterprise borrowings in 2024 100,000,000.00

Cash related to financing activities

(1) Other cash received related to financing activities

Project January-March 2026 2025 Funds received from inter-enterprise borrowings in 2024 369,000,000.00

(2) Other cash paid related to financing activities

Notes to the Financial Statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd. January 1, 2024 - March 31, 2026

Project January-March 2026 2025 2024

Funds returned from inter-enterprise loans 369,000,000.00 40,751,555.53

Cash paid for lease liabilities 108,357.60 1,078,354.40 569,100.00

Total 108,357.60 370,078,354.40 41,320,655.53

(3) Changes in various liabilities arising from financing activities

January 1, 2024 Increase in this period Decrease in this period December 31, 2024 Items

Day Cash change Non-cash change Cash change Non-cash change Day

Short-term borrowings 66,746,628.10 1,716,029.94 68,462,658.04

long term borrowing

(Including within one year

323,661,133.91 1,289,869,353.40 24,496,296.26 23,442,521.52 1,614,584,262.05 Maturity long-term

borrowing)

Lease liability

(Including within one year

2,701,204.46 397,535.50 569,100.00 26,074.59 2,503,565.37 Expired leases

Liabilities)

Other payables 40,000,000.00 751,555.53 40,751,555.53

Total 433,108,966.47 1,289,869,353.40 27,361,417.23 133,225,835.09 26,074.59 1,617,087,827.42

Increase in this period Decrease in this period Project on December 31, 2025 January 1, 2025

Cash changes Non-cash changes Cash changes Non-cash changes Daily long-term borrowings

(including one year

Due within 1,614,584,262.05 337,341,328.34 50,098,840.97 49,865,860.01 1,952,158,571.35 Long-term loans

payment)

Lease liability

(including one year

Due within 2,503,565.37 63,374.70 1,078,354.40 204,135.00 1,284,450.67 Lease liabilities

debt)

Other expenses

369,000,000.00 183,750.00 369,000,000.00 183,750.00

Total 1,617,087,827.42 706,341,328.34 50,345,965.67 419,944,214.41 204,135.00 1,953,626,772.02

Increase in this period Decrease in this period

Project January 1, 2026 March 31, 2026

Cash changes Non-cash changes Cash changes Non-cash changes

Long-term borrowings (including

Long-term borrowings due within one year 1,952,158,571.35 13,550,363.74 13,588,896.17 1,952,120,038.92)

Lease liabilities (including

Lease liabilities due within one year 1,284,450.67 7,642.34 108,357.60 1,183,735.41)

Other payables 183,750.00 183,750.00

Total 1,953,626,772.02 13,558,006.08 13,697,253.77 1,953,487,524.33

Present cash flow in net amount during the reporting period

Item Relevant facts and circumstances Basis for net presentation Financial impact

Notes to the Financial Statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd. January 1, 2024 - March 31, 2026

2025 2024

Other receipts and operations

200,000,000.00 200,000,000.00 Fund collection None

event-related cash

Payment and other operations

200,000,000.00 200,000,000.00 Fund collection None

event-related cash

(43) Supplementary information for cash flow statement

Supplementary information to the cash flow statement

Project January-March 2026 2025 2024

Adjust net profit to cash flow from operating activities:

Net profit 32,183,291.24 23,172,699.07 1,783,098.32 plus: asset impairment provision

Credit impairment loss 186,163.66 -345,528.10 -2,695,514.44 Depreciation of fixed assets, depletion of oil and gas assets, productive biological materials

28,121,380.60 38,122,919.72 353,884.06Depreciation on production

Amortization of intangible assets 1,134,349.38 2,228,016.85 569,238.13 Amortization of long-term prepaid expenses 162,065.88 648,263.52 650,163.17 Loss on disposal of fixed assets, intangible assets and other long-term assets

-9,172.08

Loss (income is listed with "-")

Loss from scrapping of fixed assets (income is listed with "-")

Depreciation of right-of-use assets 137,742.18 587,352.54 548,986.77 Loss from change in fair value (income is listed with "-")

Financial expenses (income is listed with "-") 13,558,006.08 17,501,908.20 752,596.89 Investment losses (income is listed with "-")

Decrease in deferred income tax assets (increases are indicated with "-") -21,362.09 -490,223.74

Increase in deferred income tax liabilities (decreases are indicated with "-") -34,435.55 278,657.36

Decrease in inventory (increases are indicated by "-") -750,539.90 -31,997,636.19 -53,578.14 Decrease in operating receivables (increases are indicated by "-") -4,324,003.84 -50,556,528.58 -75,067,567.11 Increase in operating payables (decreases are listed with "-") 53,190,449.55 82,135,655.02 134,010,067.49 Others -27,698,643.54 -10,529,053.20 -80,000,000.00 Net cash flow from operating activities 95,844,463.65 70,747,330.39 -19,148,624.86

Major investments and financing activities that do not involve cash receipts and payments:

debt to capital

Convertible corporate bonds due within one year

Financing leased fixed assets

Net changes in cash and cash equivalents:

Closing balance of cash 213,461,364.91 233,173,639.05 43,855,458.91 Less: Opening balance of cash 233,173,639.05 43,855,458.91 40,705,146.90 Plus: Closing balance of cash equivalents

Less: Opening balance of cash equivalents

Net increase in cash and cash equivalents -19,712,274.14 189,318,180.14 3,150,312.01

Cash and cash equivalents

Notes to the Financial Statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd. January 1, 2024 - March 31, 2026

Project March 31, 2026 December 31, 2025 December 31, 2024

Cash 213,461,364.91 233,173,639.05 43,855,458.91 Including: Cash on hand 3,000.00 Bank deposits that can be used for payment at any time 213,461,364.91 233,173,639.05 43,852,458.91

2. Cash equivalents

Balance of cash and cash equivalents at the end of the period 213,461,364.91 233,173,639.05 43,855,458.91
Monetary funds that are not cash and cash equivalents

Project March 31, 2026 December 31, 2025 December 31, 2024 Reason

Restricted monetary funds 123,253,298.39 94,912,387.90 80,000,000.00 Margin, frozen

(44) Leasing

As a lessee

Item January to March 2026 2025 Unaccounted amount included in relevant asset costs or current profits and losses in 2024

Variable lease payments included in the measurement of the lease liability

Including: part generated from sale and leaseback transactions

Simplification of including related asset cost or current profit and loss

11,896.56 47,586.24 47,586.24 Short-term rental expenses processed

Simplification of including related asset cost or current profit and loss

Low-value asset leasing expenses processed (low-value assets

(Excluding short-term rental fees for the property)

Total cash outflow related to leasing 108,357.60 1,125,940.64 616,686.24

6. Government subsidies

(1) Liability items involving government subsidies

Included in this period

Financial statements January 2024 New in this period Transferred in this period Others December 2024 Related to assets/non-operating income

Item 1st day Subsidy amount Other income changes 31st day Increasingly relevant

Deposit amount

Deferred income 6,000,000.00 6,000,000.00 Related to assets

Included in this period

Financial Statements January 2025 New in this period Transferred in this period December 2025 and assets/non-operating income

Item 1st day Subsidy amount Other income Other changes 31st day Increasingly relevant

Deposit amount

Deferred income 6,000,000.00 100,000.00 5,900,000.00 Related to assets

Included in this period

Financial Statements January 2026 New in this period Transferred in this period March 2026 and assets/non-operating income

Item 1st day Subsidy amount Other income Other changes 31st day Increasingly relevant

Deposit amount

Deferred income 5,900,000.00 75,000.00 5,825,000.00 Related to assets

(2) Government subsidies included in current profits and losses

Type January-March 2026 2025 2024 High-efficiency utilization of low-rank coal for hydrogen production and urea-based compound fertilizer project 75,000.00 100,000.00

Notes to the Financial Statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd. January 1, 2024 - March 31, 2026

Type January to March 2026, 2025, 2024, job stabilization return 165,438.82

Total 75,000.00 265,438.82

7. Risks related to financial instruments

(1) Risks of financial instruments

The Company faces various financial instrument risks in daily activities, mainly including loans, receivables, payables, etc. The risks associated with these financial instruments, and the risk management policies adopted by the Company to mitigate these risks, are described below. The company's management manages and monitors these risk exposures to ensure that the above risks are controlled within limited limits.

The company's goal in risk management is to achieve an appropriate balance between risks and returns, reduce the negative impact of risks on the company's operating performance to a minimum, and maximize the interests of shareholders and other equity investors. Based on this risk management objective, the company's basic risk management strategy is to determine and analyze the various risks faced by the company, establish an appropriate risk tolerance bottom line and conduct risk management, and supervise various risks in a timely and reliable manner to control risks within a limited range.

Market risk

(1) Exchange rate risk

Foreign exchange risk refers to the risk of loss due to exchange rate changes. The Company has no exchange rate risk caused by foreign exchange.

(2) Interest rate risk

The Company's interest rate risk arises from interest-bearing assets and liabilities such as bank deposits and bank borrowings. Financial liabilities with floating interest rates expose the Company to cash flow interest rate risk, while financial liabilities with fixed interest rates expose the Company to fair value interest rate risk. The Company determines the relative proportion of fixed-rate and floating-rate contracts based on the prevailing market environment. As of March 31, 2026, the company's interest-bearing debts were mainly RMB-denominated floating-rate loan contracts, with a total amount of 1,950,525,744.74 yuan (December 31, 2025: 1,950,525,744.74 yuan, December 31, 2024: 1,613,184,416.40 yuan).

The Company's risk of changes in cash flows of financial instruments due to changes in interest rates is mainly related to floating rate bank borrowings. The Company's policy is to maintain floating interest rates on these borrowings to eliminate fair value risk from interest rate changes.

(3) Price risk

The Company sells chemical products at market prices and is therefore affected by such price fluctuations. The Company does not conduct any hedging business against price fluctuations.

Credit risk

As of March 31, 2026, the largest credit risk exposure that may cause financial losses to the Company mainly comes from the failure of the other party to the contract.

Notes to the financial statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd.

Loss on the company's financial assets caused by the inability to perform obligations from January 1, 2024 to March 31, 2026. The company is a chemical product manufacturer, and its product sales basically adopt the payment-before-delivery model, which ensures the company's debt recovery. Under normal economic circumstances, the Company believes that it does not have significant credit risks and will not incur significant losses due to default by counterparties.

In addition, the Company generates some other receivables in the course of its operations. Regarding the credit risk of other receivables, the company mainly ensures that the balance and credit risk of the company's other receivables are controlled within a reasonable range through measures such as strengthening contract performance tracking, item-by-item authorization, regular aging analysis, and timely settlement when due.

The Company's working capital is deposited in banks with higher credit ratings, so the credit risk of working capital is lower.

Liquidity risk

Liquidity risk is the risk that the company will be unable to meet its financial obligations on the due date. The Company's approach to managing liquidity risk is to ensure that there is sufficient liquidity to meet maturing debts without causing unacceptable losses or damage to corporate reputation. The Company regularly analyzes the structure and maturity of liabilities to ensure sufficient funds. The Company's management monitors the use of bank borrowings and ensures compliance with borrowing agreements. At the same time, we conduct financing negotiations with financial institutions to maintain a certain credit limit and reduce liquidity risks.

8. Related party relationships and transactions

(1) The parent company of the company

Parent company's registered capital Parent company's registered capital

Name of parent company Registration place Nature of business Shareholding of the company Ratio of voting rights of the company (10,000 yuan)

Proportion (%) Example (%) Gansu Energy and Chemical Industry Investment Exploration and Development of Coal Resources

Lanzhou, Gansu 500,000.00 100.00 100.00 Investment and operation of Mining Rights Group Co., Ltd.

The ultimate controller of the company is the State-owned Assets Supervision and Administration Commission of the People's Government of Gansu Province.

(2) Other related parties

Names of other related parties Relationship with the Company

Jingyuan Coal Industry Group Co., Ltd. Under the same control

Gansu Ruiseke Circular Economy Industry Group Co., Ltd. is under the same control

Gansu Nenghua Co., Ltd. Under the same control

Gansu Coal Resources Development Investment Co., Ltd. Under the same control

Lanzhou Coal Mine Design and Research Institute Co., Ltd. Under the same control

Gansu Coal Trading Center Co., Ltd. Under the same control

Gansu Energy and Chemical Trading Co., Ltd. Under the same control

Gansu Nenghua Group Bangxin Small Loan Co., Ltd. Under the same control

Gansu Nenghua Green Energy Investment and Development Co., Ltd. Under the same control

Gansu Liuhua Energy Engineering Co., Ltd. Under the same control

Gansu Huayang Mining Development Co., Ltd. Under the same control

Notes to the Financial Statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd. January 1, 2024 - March 31, 2026

Names of other related parties Relationship with the Company Gansu Nenghua Electricity Sales Co., Ltd. Under the same control Gansu Nenghua Power Generation Co., Ltd. Under the same control Gansu Jingmei Energy Co., Ltd. Under the same control Yaojie Coal and Electricity Group Co., Ltd. Under the same control Gansu Liuhua (Group) Co., Ltd. Under the same control Gansu Jingmei Jinghong Real Estate Co., Ltd. Under the same control Jingyuan Coal Mining Yili Resource Development Co., Ltd. Under the same control Gansu Energy Group Co., Ltd. Under the same control Gansu Shandan Damaying New Energy Co., Ltd. Under the same control Gansu Paiside Mine Filling Technology Co., Ltd. Under the same control Gansu Green Jin Environmental Protection Functional Materials Technology Co., Ltd. Under the same control Gansu Ruilin Nongyuan Ecological Technology Co., Ltd. Under the same control Gansu Ruisai Ke Xingyuan Ferroalloy Co., Ltd. Under the same control Gansu Jinneng Keyuan Industry and Trade Co., Ltd. Under the same control Gansu Nenghua Coal Storage and Transportation Co., Ltd. Gansu Nenghua Jinghong New Energy Co., Ltd. Under the same control Gansu Nenghua Lianhai New Energy Development Co., Ltd. Under the same control Gansu Jingzheng Real Estate Development Co., Ltd. Under the same control Zhangye Qingyang Coal Industry Co., Ltd. Under the same control Gansu Tianzhu Huasheng Coal Industry Co., Ltd. Under the same control Gansu Huaneng Engineering Construction Co., Ltd. Under the same control Gansu Coal No. 1 Engineering Co., Ltd. Under the same control Gansu Nenghua Rundian New Energy Co., Ltd. Under the same control Jingmei Group Jingtai Coal Industry Co., Ltd. Under the same control Gansu Liuhua Wanhe Property Management Co., Ltd. Under the same control Gansu Qianfan Agricultural Production Materials Co., Ltd. Under the same control Gansu Liuhua (Group) Yicheng Chemical Co., Ltd. Under the same control Gansu Liuhua Ruisheng Agricultural Production Materials Co., Ltd. Under the same control Gansu Jingmei Real Estate Development Co., Ltd. Under the same control Gansu Tianwei Real Estate Development Co., Ltd. Under the same control Gansu Jingmei Jinghong Real Estate Co., Ltd. Under the same control Lanzhou Yongdeng Caizishan Quartz Mining Co., Ltd. Under the same control Wuwei Anyi Property Services Co., Ltd. Under the same control Jingmei (Baiyin) Thermal Power Co., Ltd. Under the same control Jingyuan Coal Group Baiyin Jie Neng Thermal Power Co., Ltd. Under the same control Jingyuan Coal Engineering Survey and Design Co., Ltd. Under the same control Baiyin Galaxy Machinery Manufacturing Co., Ltd. Under the same control Baiyin Xing'an Mining Products Testing and Inspection Co., Ltd. Under the same control

Notes to the Financial Statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd. January 1, 2024 - March 31, 2026

Names of other related parties Relationship with the Company Jingyuan Coal Industry Group Liu Hua Chemical Co., Ltd. Under the same control Gansu Jingmei Jinghong Coal Development Co., Ltd. Under the same control Gansu Jinghong Storage and Transportation Co., Ltd. Under the same control Gansu Jingmei Jinghong Energy Co., Ltd. Gannenghua (Qingyang) Power Generation Co., Ltd. Under the same control Yaojie Coal and Electricity Group Jiuquan Tianbao Coal Industry Co., Ltd. Under the same control Gansu Yaojie Solid Waste Utilization Thermal Power Co., Ltd. Under the same control Gansu Jinkai Machinery Manufacturing Co., Ltd. of Yaojie Coal and Electricity Group Under the same control Gansu Anjiatai Engineering Design Consulting Co., Ltd. Under the same control Gansu Kebede Coal and Coalbed Methane Development Technology Co., Ltd. Gannenghua (Lanzhou New District) Thermal Power Co., Ltd. Under the same control Lanzhou Jintai Testing and Inspection Technology Co., Ltd. Under the same control Yaojie Coal and Electricity Group Tianzhu Coal Industry Co., Ltd. Under the same control Gansu Yaojie Oil Shale Comprehensive Utilization Co., Ltd. Under the same control Yaojie Coal and Electricity Group Gansu Ronghe Coal Development Co., Ltd. Under the same control Yaojie Coal and Electricity Group Tianhe Coal Development Co., Ltd. Under the same control Gansu Energy Qingyang Coal and Electricity Co., Ltd. Under the same control Baiyin Weisheng Property Services Co., Ltd. Under the same control Jingtai Baiyanzi Coal Development Co., Ltd. Under the same control Gansu Jingmei Huaneng Building Materials Co., Ltd. Under the same control Gansu Jingmei Jiema Mining Technology Co., Ltd. Under the same control

(3) Related transactions

Related transactions related to the purchase and sale of goods, provision and receipt of services

(1) Purchasing goods/receiving services

Name of related party Content of related transactions January to March 2026 2025 2024 Lanzhou Coal Mine Design and Research Institute Co., Ltd. Receiving labor services 1,252,958.96 33,842,620.23 Gansu Nenghua Coal Storage and Transportation Co., Ltd. Procuring goods 45,788,397.35 94,232,128.95 Gansu Jinneng Keyuan Industry and Trade Co., Ltd. Purchase goods 341,522.13 Gansu Liuhua Energy Engineering Co., Ltd. Accept labor services 1,246,812.39

Gansu Jinneng Keyuan Industry and Trade Co., Ltd.

Purchase of goods 7,584.16

Report Graphics Branch

(2) Sales of goods/provision of services

Name of related party Related transaction content January to March 2026 2025 Year 2024 Gannenghua (Lanzhou New District) Thermal Power Co., Ltd. Sales of goods 401,284.39 459,805.04 Jingyuan Coal Mining Group Liuhua Chemical Co., Ltd. Sales of goods 2,154,018.34 1,772,672.57

Related guarantees

(1) The company as the guaranteed party

Notes to the financial statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd. January 1, 2024 - March 31, 2026 Whether the guarantee has been guaranteed by the guarantor Amount of guarantee Start date of guarantee Expiration date of guarantee

Completion of performance from January to March 2026

Gansu Energy and Chemical Investment Group Co., Ltd. 219,733,045.00 2024/9/6 2042/9/5 No Gansu Energy and Chemical Investment Group Co., Ltd. 92,498,030.00 2039/9/26 2042/9/25 No Gansu Energy and Chemical Investment Group Co., Ltd. 371,651,874.40 2035/10/28 2038/10/27 No Gansu Energy and Chemical Investment Group Co., Ltd. 1,152,390,576.34 2038/12/21 2041/12/20 No Gansu Energy and Chemical Investment Group Co., Ltd. 114,252,219.00 2037/11/22 2040/11/21 No 2025

Gansu Energy and Chemical Investment Group Co., Ltd. 199,733,045.00 2024/9/6 2029/9/5 No Gansu Energy and Chemical Investment Group Co., Ltd. 70,711,278.00 2039/09/26 2042/09/25 No Gansu Energy and Chemical Investment Group Co., Ltd. 371,651,874.40 2035/10/28 2038/10/27 No Gansu Energy and Chemical Investment Group Co., Ltd. 862,836,000.00 2038/12/21 2041/12/20 No Gansu Energy and Chemical Investment Group Co., Ltd. 108,252,219.00 2037/11/22 2040/11/21 No

Fund lending situation of related parties

Related parties Lending amount Start date Maturity date Description January-March 2026

Remove:

April 17, 2026 Gansu Energy and Chemical Investment Group Co., Ltd. 100,000,000.00 2026/2/24 2027/2/24

The date has been returned to 2025

Removed:

December 24, 2025 Gansu Energy and Chemical Investment Group Co., Ltd. 100,000,000.00 2025/12/17 2028/12/17

repaid

December 30, 2025 Gansu Energy and Chemical Investment Group Co., Ltd. 269,000,000.00 2025/12/21 2026/12/21

repaid

Lending funds and interest income to related parties

Related parties March 31, 2026 Interest income from January to March 2026 Gansu Energy and Chemical Investment Group Co., Ltd. 100,000,000.00 199,056.60

Obtain borrowings and interest payments from related parties

Related party Borrowing party December 31, 2025 Interest expense in 2025

Gansu Nenghua Jinchang Energy and Chemical Industry opens

Gansu Energy and Chemical Investment Group Co., Ltd. 183,750.00 Development Co., Ltd.

Remuneration of key management personnel

Project January to March 2026 2025 Salary of key management personnel in 2024 434,480.00 3,864,418.30 3,811,014.51

Notes to the Financial Statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd. January 1, 2024 - March 31, 2026

Other related-party transactions involving key management personnel

From 2024 to September 2025, the company’s Chairman Li Deyong, Secretary of the Discipline Inspection Commission Li Jiying, Financial Director Zhao Ping, Supply and Marketing Department

Minister Gao Xinghai’s social security and part of his salary will be borne by our company, and Gansu Energy and Chemical Investment Group Co., Ltd. is entrusted to do so on his behalf.

Payment and distribution; in October 2025, Li Jiying, the former Secretary of the Discipline Inspection Commission, was transferred and Bai Yulong took over in the same month. From then until March 2026,

The social security of Chairman Li Deyong, Secretary of the Discipline Inspection Commission Bai Yulong, Chief Financial Officer Zhao Ping, and Minister of Supply and Marketing Department Gao Xinghai will be borne by the company.

Entrust Gansu Energy and Chemical Investment Group Co., Ltd. to pay on your behalf.

Related parties Contents of related transactions January to March 2026 2025 2024 Gansu Energy and Chemical Investment Group Co., Ltd. Payment of wages and social security 186,439.83 712,443.73 677,177.72

8.Others

There is a pool of funds between the Company and Gansu Energy and Chemical Investment Group Co., Ltd. The details are as follows:

Year Beginning balance Amount collected in the current period Amount allocated in the current period Ending balance 2024 200,000,000.00 200,000,000.00

2025 200,000,000.00 200,000,000.00

(4) Unsettled items such as receivables and payables from related parties

Items receivable

March 31, 2026 December 31, 2025 December 31, 2024 Project name Related parties

Book balance Bad debt provision Book balance Bad debt provision Book balance Bad debt provision

Gan Nenghua (Lanzhou New

Accounts receivable 218,700.00

District) Thermal Power Co., Ltd.

Gansu Energy and Chemical Investment

Other receivables 100,211,000.00

Capital Group Co., Ltd.

Payable items

Project name Related parties March 31, 2026 December 31, 2025 December 31, 2024

Lanzhou Coal Mine Design and Research Institute Co., Ltd.

Accounts payable 8,002,763.66 8,002,763.66 10,634,941.48

Division

Accounts payable Gansu Nenghua Coal Storage and Transportation Co., Ltd. 32,350,364.53 14,841,575.40

Gansu Jinneng Keyuan Industry and Trade Co., Ltd.

Accounts payable 35,920.00 335,920.00

company

Gansu Liuhua Energy Engineering Co., Ltd.

Accounts payable 1,246,812.39

company

Gansu Jinneng Keyuan Industry and Trade Co., Ltd.

Accounts payable 7,660.00

Company Advertising Graphics Branch

Total 41,643,520.58 23,180,259.06 10,634,941.48

Jingyuan Coal Industry Group Liuhua Chemical Co., Ltd.

Contract liabilities 745,064.23

company

Total 745,064.23

Yaojie Coal and Electricity Group Gansu Ronghe Coal

Other payables 500,000.00

Development Co., Ltd.

Gansu Energy and Chemical Investment Group Co., Ltd.

Other payables 365,691.54 179,251.71

company

Other payables Lanzhou Coal Mine Design and Research Institute Co., Ltd. 9,345.76

Notes to the financial statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd.

January 1, 2024 - March 31, 2026 Project name Related parties March 31, 2026 December 31, 2025 December 31, 2024 Division

Total 865,691.54 179,251.71 9,345.76

9. Commitments and contingencies

(1) Commitments

As of March 31, 2026, the Company has no major commitments that need to be disclosed.

(2) Contingencies

Disputes over the construction contract between our company and Xingsheng (Beijing) Construction Engineering Co., Ltd.

In 2023, the company signed a contract with Lanzhou Coal Mine Design and Research Institute Co., Ltd. (lead unit) and Baye Construction Group Co., Ltd. (member unit) for the EPC general contracting project of Jinchang Chemical's high-efficiency utilization of low-rank coal for hydrogen production and the 500,000 tons/year high-concentration urea-based compound fertilizer project in the front plant area. Baye Construction Group Co., Ltd. is responsible for the material procurement and construction parts of the project. Houbaye Construction Group Co., Ltd. subcontracted all the construction engineering and material procurement of the project to Xingxing Sheng (Beijing) Construction Engineering Co., Ltd. As of March 31, 2026, the project construction has been completed. The company's total project contract payment due to Lanzhou Coal Mine Design and Research Institute Co., Ltd. (including Baye Construction Group Co., Ltd.) is 46.6623 million yuan, of which 38.6595 million yuan has been paid, and the unpaid 8.0028 million yuan has been accounted for in accounts payable. Baye Construction Group Co., Ltd. owes RMB 41.6079 million to its subcontracting unit Xingsheng (Beijing) Construction Engineering Co., Ltd., has paid RMB 30.6909 million for the project, and still owes RMB 10.917 million for the project. Xingshengsheng (Beijing) Construction Engineering Co., Ltd. sued Baye Construction Group Co., Ltd. and the company to the court together, requesting payment of the remaining project payment and interest. On October 28, 2025, the construction contract dispute case of the construction project was accepted by the Yongchang County People's Court. As of the approval date of this financial report, the case is in the first instance procedure. The company estimates that except for the project payment payable to Baye Construction Group Co., Ltd. in the contract, it has no other payment obligations and no estimated liabilities have been recognized.

Disputes over the construction contract between our company and Jinchang Yibaisheng Color Plate Steel Structure Products Co., Ltd.

In April 2023, the company provided EPC for Jinchang Chemical's efficient utilization of low-rank coal for hydrogen production and 500,000 tons/year high-concentration urea-based compound fertilizer project (Second Bid Section) The general contracting project signed a contract with China Wuhuan Engineering Co., Ltd., and China Wuhuan Engineering Co., Ltd. later subcontracted part of the project to Sinochem Second Construction Group Co., Ltd., and Sinochem Second Construction Group Co., Ltd. then subcontracted the temporary construction project to Lanzhou Lishui Electric Power Equipment Co., Ltd., Gansu Guangguang Energy Technology Co., Ltd. and Gansu Times Innovation Installation Engineering Co., Ltd., which are actually controlled by Li Minghao. Finally, Jinchang Yibaisheng Color Plate Steel Structure Products Co., Ltd. actually constructed the project and completed the acceptance in December 2023. As of March 31, 2026, the company's total project contract payment due to China Wuhuan Engineering Co., Ltd. was RMB 1,206,394,300, of which RMB 995,080,400 has been paid. Of the unpaid RMB 211,313,900, RMB 207,608,500 has been accounted for in accounts payable, and RMB 3,705,400 has not been temporarily estimated due to the failure to obtain a value-added tax invoice. As of November 7, 2025, Li Minghao

Notes to the financial statements of Gansu Nenghua Jinchang Energy and Chemical Development Co., Ltd.

From January 1, 2024 to March 31, 2026, 2.7871 million yuan is payable to the subcontracting unit Jinchang Yibaisheng Color Plate Steel Structure Products Co., Ltd., and 1.700 million yuan has been paid for the project.

There is still arrears of 1.0871 million yuan in project payment. Due to arrears in project payment, Jinchang Yibaisheng Color Plate Steel Structure Products Co., Ltd. transferred China Fifth Ring

Engineering Co., Ltd., Sinochem Second Construction Group Co., Ltd., Li Minghao, Lanzhou Lishui Electric Power Equipment Co., Ltd., Gansu Guangguang Energy

Yuan Technology Co., Ltd., Gansu Times Innovation Installation Engineering Co., Ltd., Tian Zhengfeng and the company sued the Yongchang County People's Court.

The construction contract dispute case was filed by the Yongchang County People's Court on May 6, 2026. As of the date of this financial report

As of the date of publication, the case is in the first instance procedure. The company expects that in addition to the project payment payable to China Wuhuan Engineering Co., Ltd. in the contract

Except for this, there are no other payment obligations and no estimated liabilities have been recognized.

10. Events after the balance sheet date

The company has completed the building ownership certificate on July 24, 2026.

11. Other important matters

The company has no other important matters that need to be disclosed.

12. Supplementary information

(1) Detailed statement of non-recurring profits and losses for the current period

Item January-March 2026 2025 2024 1. Profit and loss from the disposal of non-current assets, including the write-off of asset impairment provisions 9,172.08 2. Government subsidies included in the current profit and loss, but closely related to the company's normal operating business,

Except for government subsidies that comply with national policies and regulations, are enjoyed in accordance with determined standards, and have a lasting impact on the company's profits and losses.

Except for effective hedging business related to the company’s normal business operations, non-financial enterprises

Gains and losses from changes in fair value and disposal of financial assets and financial liabilities held by the enterprise

Gains and losses arising from financial assets and financial liabilities

Fund occupation fees charged to non-financial enterprises included in current profits and losses
Profit and loss from entrusting others to invest or manage assets
Profit and loss from external entrusted loans
Loss of various assets due to force majeure factors, such as natural disasters
Reversal of impairment provision for accounts receivable that have been separately tested for impairment
The investment cost for an enterprise to acquire subsidiaries, associates and joint ventures is less than the investment cost.

The investor should enjoy the income generated from the fair value of the identifiable net assets of the investee.

Net loss for the current period from the beginning of the period to the date of merger of subsidiaries resulting from business mergers under common control

benefit

Profit and loss from non-monetary asset exchange
Gains and losses from debt restructuring
One-time expenses incurred by the enterprise due to the cessation of relevant business activities, such as resettlement

Employee expenses, etc.

One-time adjustments to current profits and losses due to adjustments to tax, accounting and other laws and regulations

influence

Share-based payment expenses recognized one-time due to cancellation or modification of equity incentive plan