China ACM Announces Reduction in Corporate Tax Rate to 15% from 25% and Receives Two-Year Extension on 6% Value Added Tax Credit

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: [phone]
  Email: 
  Web: http://www.china-acm.com/

DATASOURCE: China Advanced Construction Materials Group, Inc.



CONTACT:  David Waldman or Klea Theoharis of Crescendo Communications,

LLC, [phone], , or AGORACOM Investor Relations,

http://www.agoracom.com/IR/chinaacm



Web Site:  http://www.china-acm.com/ 

Copyright