China ACM Announces Reduction in Corporate Tax Rate to 15% from 25% and Receives Two-Year Extension on 6% Value Added Tax Credit
14 July 2009 - 9:30PM
PR Newswire (US)
NEW YORK and BEIJING, July 14 /PRNewswire-FirstCall/ -- China
Advanced Construction Materials Group, Inc. ("China ACM")
(OTC:CADC) (BULLETIN BOARD: CADC) , a leading provider of ready-mix
concrete and related services in China, today announced that it has
been issued the Enterprise High-Tech Certificate within the
People's Republic of China (PRC). The issuing parties include the
Beijing City Committee of Science and Technology, the Beijing City
Department of Finance, the Beijing City Department of Taxation, and
the Beijing City Department of Land. The certificate was awarded
based on the company's involvement in producing high-tech products,
its research and development, as well as its technical services. As
a result of this certification, the company's effective income tax
rate has been reduced to 15% from 25%. The new tax rate will be
retroactive to January 1, 2009 and will be effective for three
years, through December 31, 2011. The company expects the tax
reduction will result in savings of more than $1 million per year,
beginning in calendar 2009. The company also announced that it has
been approved for a 6% value added tax (VAT) credit by the State
Administration of Taxation, extending its prior credit for an
additional two years. Enterprises or individuals who sell
commodities, engage in repair and maintenance or import and export
goods in the PRC are subject to a value added tax. The standard VAT
rate is 6% of gross sales within the concrete industry. Due to the
fact that China ACM uses recycled raw materials to manufacture its
products, the State Administration of Taxation had previously
granted the company a VAT exemption from August 2005 through August
2009. The two year extension provides China ACM an exemption from
the VAT through August 2011. The company records the VAT credit as
"Other Subsidy Income" on its income statement, which accounted for
approximately $1.2 million in fiscal 2008 and $1.3 million through
the third quarter of fiscal 2009. Mr. Xianfu Han, Chairman and
Chief Executive Officer, stated, "We are extremely pleased with the
tax advantaged status that China ACM has received from the PRC
government as a result of developing our environmentally friendly
concrete production methods and products. In particular, we have
two patents that played an important role in this certification:
(1) a high-performance pumping concrete containing mineral
admixtures, and (2) C100 high-performance concrete and its
formulations. This certification will have a significant and
immediate effect on our net income." "China ACM was awarded the VAT
credit based on our effective utilization of natural resources.
Specifically, our concrete mixtures utilize high quantities of fly
ash and waste rock. As a result, we have transformed common
industrial byproduct to useful manufacturing materials. Our usage
of recycled materials has improved the technical quality
performance of products, decreased the usage of cement and other
resources, and, in turn, we achieved the country's highest
environmental standards for both economic and social benefit. We
currently use at least 30% recycled components in our mixtures and
we continue to innovate and find ways to increase this percentage."
Mr. Han concluded, "In addition to our use of recycled waste
materials, we are also at the forefront of the industry due to our
efficient production of concrete materials with minimal energy
usage, our ability to reduce dust and air pollution, as well as our
innovative and high quality products. We commend the government's
commitment to improving the environment, while increasing and
ensuring the highest standards across the industry." About China
ACM China ACM, founded in 2002 and based in Beijing, China, is a
leading producer of advanced construction materials for large scale
commercial, residential, and infrastructure developments. The
company is primarily focused on producing and supplying a wide
range of advanced ready-mix concrete materials for highly
technical, large scale, and environmental construction projects.
The company also aims to develop and produce new and innovative
environmentally conscious construction materials. China ACM
provides materials and services through its seven ready-mix
concrete plant network covering Beijing metropolitan area. China
ACM owns one plant, leases two plants and has technical services
and preferred procurement agreements with four other
independently-owned plants. China ACM is ISO 9001 (product
quality), ISO 14001 (environmental safety), and ISO 18001
(employment environment safety) certified. Additional information
about the company is available at http://www.china-acm.com/. This
press release contains "forward-looking statements" within the
meaning of the "safe-harbor" provisions of the Private Securities
Litigation Reform Act of 1995. Such statements involve known and
unknown risks, uncertainties and other factors that could cause the
actual results of the Company to differ materially from the results
expressed or implied by such statements, including changes from
anticipated levels of sales, future national or regional economic
and competitive and regulatory conditions, changes in relationships
with customers, access to capital, difficulties in developing and
marketing new products, marketing existing products, customer
acceptance of existing and new products, and other factors.
Additional Information regarding risks can be found in the
Company's Annual Report on Form 10K and in the Company's recent
report on Form 8K filed with the SEC. Accordingly, although the
Company believes that the expectations reflected in such
forward-looking statements are reasonable, there can be no
assurance that such expectations will prove to be correct. The
Company has no obligation to update the forward-looking information
contained in this press release. Contact: On-line Investor Contact:
Crescendo Communications, LLC AGORACOM Investor Relations David
Waldman or Klea Theoharis http://www.agoracom.com/IR/chinaacm Tel:
(212) 671-1020 Email: Web: http://www.china-acm.com/ DATASOURCE:
China Advanced Construction Materials Group, Inc. CONTACT: David
Waldman or Klea Theoharis of Crescendo Communications, LLC,
+1-212-671-1020, , or AGORACOM Investor Relations,
http://www.agoracom.com/IR/chinaacm Web Site:
http://www.china-acm.com/
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