Wencan(SH:603348) Zheng Quan Zhi Xing·2025-07-04 16:12Core Viewpoint - The company is involved in a legal dispute regarding VAT overpayment with the Mexican tax authority, with recent developments indicating a need to pay a specific amount due to court rulings [1][5]. Summary by Sections Litigation Background - LBQ Foundry, a subsidiary of the company, faced VAT overpayment disputes from 2015 to 2019 related to aluminum purchases from foreign suppliers [1]. - The Mexican tax authority issued a notice on November 26, 2019, demanding a total of 7,527,242.41 pesos for VAT, penalties, and interest [2]. - A subsequent notice on September 27, 2021, demanded 124,173,015.53 pesos, which LBQ contested and won in court, leading to the cancellation of this demand [2]. - Additional notices were issued in January and February 2022, with amounts of 14,738,117.62 pesos and 106,336,540.04 pesos respectively, both of which were also contested [3][4]. - A final notice on June 17, 2022, demanded 98,380,089.41 pesos, which is currently under appeal [4]. Recent Developments - The constitutional court upheld the federal tax court's ruling, requiring LBQ to pay the updated amount of 7,767,731 pesos related to the first notice [5]. - The company had previously accounted for this potential liability, indicating that the recent ruling will not significantly impact its current or future profits [5]. Financial Impact - The total amount LBQ is required to pay includes taxes, penalties, and interest, which has been accounted for in the company's financial statements [5][6]. - The final financial impact will be confirmed after the annual audit by the company's accountants [6]. Future Actions - The company plans to continue legal proceedings for ongoing cases and negotiate with the Mexican tax authority to minimize penalties and interest [6]. - The company will keep investors informed about the progress of these legal matters and any potential impacts on financial performance [6].