Company: GURE
Filing Date: 2025-04-11
Form Type: 10-K
Source: 0001193805-25-000461
Chunk: 78

Company: GULF RESOURCES, INC.
Filing Date: 2025-04-11
Form: 10-K
Item: Item 1B
Chunk 78
---
 over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing
procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures
in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates
made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit
provides a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated
below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to
be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial
statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matters
does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the
critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they
relate.

Property, plant and equipment, net

As described in Note 1 to the
consolidated financial statements, property, plant and equipment consisted of facilities for products, mineral rights, constructions in
process and producing oil and gas properties. The Company reviews the economic benefits associated with the item purchased periodically.
Once the Company determine the likelihood of economic benefits associated is probable, the item would be recognized as an asset.

We identified determining carrying
amount of property, plant and equipment as a critical audit matter due to the material balance on the balance sheet and significant judgement
and assumptions were used by the Management regarding the timing and ability to contribute to the generation of cash flows, which in turn
led to a high degree of auditor judgement, subjectivity and effort in performing procedures and evaluating audit evidence relating to
Management’s assessment of the carrying amount.

The primary procedures we performed to address this critical
audit matter included the following:

-Reviewed the Company’s accounting policies, assumptions and estimates.

-Physical inspection.

-Examined contracts.

-Performed independent analysis for impairment testing.

/s/ GGF CPA LTD

We have served as the Company’s auditor since
2024.

Gu