Wencan(SH:603348) Xin Lang Cai Jing·2025-12-23 20:11Core Viewpoint - The announcement details the progress of a lawsuit involving LBQ Foundry, a subsidiary of the company, regarding a dispute over VAT payments with the Mexican tax authorities, highlighting various administrative actions and court rulings that have impacted the company's financial obligations. Group 1: Lawsuit Background - LBQ is engaged in the production and sale of gravity casting products and has faced VAT disputes with the Mexican tax authorities from 2015 to 2019 due to repeated VAT payments on aluminum purchases [1][2] - The tax authority initially demanded a total of 7,527,242.41 pesos for the years 2015 and 2016, which LBQ contested through administrative and judicial channels, ultimately leading to a favorable ruling from the constitutional court [1] - For the years 2017 and 2018, the tax authority demanded 124,173,015.53 pesos, but LBQ won the case in federal court, resulting in the cancellation of the tax demand [2] Group 2: Recent Developments - LBQ has recently negotiated the final execution amount for a VAT assessment from 2019, settling at 93,061,409 pesos, which includes 58,602,897 pesos in VAT and 34,458,512 pesos in penalties and interest, with all fines waived [7] - The company is still in discussions with the tax authority regarding the potential for VAT refunds or offsets against future VAT liabilities [7] Group 3: Financial Impact - As of September 2025, the company had previously accrued a provision of 97,777,810 pesos for the disputed VAT assessments, and the recent negotiations have resulted in a reduction of the financial burden [8] - The overall impact of the VAT dispute on the company's financial statements will be determined based on future communications with the tax authority and will be finalized in accordance with the annual audit [8]