China ACM Announces Reduction in Corporate Tax Rate to 15% from 25%

China Advanced Construction Materials Group, Inc. ("China ACM"), 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."