SUNART RETAIL(06808): A certain independent supplier is being investigated. It is expected that approximately 58 million tax provisions will be set aside in the 2025 annual financial statements.

SunArt Retail (06808) announced that the group has recently received notification from the authorities regarding an investigation into a certain independent supplier. The supplier is being investigated for their invoicing behavior towards several subsidiaries of the group. According to the company's directors, the group itself is not the subject of this investigation. Upon receiving the notification of the investigation, the group has sought advice from legal and tax advisors and conducted a tax compliance review of all transactions with the supplier to assess the potential impact of the investigation results on the group. As some of the company's subsidiaries are the recipients of the relevant VAT invoices, a negative outcome of the investigation regarding the supplier may result in the invoices not being recognized by the company, leading to additional tax payments and corresponding penalties for the group. Based on prudence and preliminary assessment, the company expects to provision for approximately RMB 58 million in tax expenses reserve in the comprehensive financial statements for the year ending March 31, 2025.