Longwei Petroleum Announces Completion of Tax Reconciliation Report by Independent Auditors
TAIYUAN CITY, China, July 2, 2012 /PRNewswire-Asia-FirstCall/ — Longwei Petroleum Investment Holding Ltd. (NYSE Amex: LPH) (“Longwei” or the “Company”), an energy company engaged in the storage and distribution of finished petroleum products in the People’s Republic of China (“PRC”), today announced it has received the report (the “Tax Reconciliation Report” or the “Report”) from Child, Van Wagoner & Bradshaw, PLLC, Certified Public Accountants (“CVB”), commissioned by the Company’s Audit Committee. The Tax Reconciliation Report reviewed the Company’s management reports compared to taxes paid and financial statements filed in the PRC with the Company’s publicly reported filings with the Securities and Exchange Commission (the “SEC”). CVB is the Company’s independent Public Company Accounting Oversight Board qualified audit firm.
CVB performed certain agreed-upon procedures as enumerated in the Tax Reconciliation Report with respect to the Company’s PRC operating subsidiary corporate income tax (“CIT”) and value added tax (“VAT”) filings for the periods beginning July 1, 2009 to March 31, 2012 as filed with the State Administration of Taxation (“SAT”), and its State Administration for Industry and Commerce (“SAIC”) filings for the years ended December 31, 2010 and 2011. These procedures, which were agreed upon by the Company, were performed by CVB solely to assist the Company in its comparison of the PRC subsidiary tax filings to its reports filed with the SEC in the United States (“US”) under US Generally Accepted Accounting Principles (“US GAAP”).
Tax Reconciliation Report – Summary Findings:
- SAT (CIT and VAT) Filings – No variance in revenues reported under US GAAP.
- SAIC Income Statement Filings – On a consolidated income statement basis, there is no difference in revenues, and net income has a 1.1% or less difference between the US GAAP and the PRC financial statements and tax filings.
- SAIC Balance Sheet Filings – On a consolidated balance sheet basis, there is a less than 1% difference in total assets, total liabilities and total stockholders’ equity between the US GAAP and the PRC financial statements and tax filings.
Generally, CVB’s field work involved independently verifying reported tax payments and filings with tax authorities in the PRC, including direct online access to the SAT secure database to verify CIT and VAT payments and an on-site meeting at the provincial capital’s SAIC office in Taiyuan City to observe and obtain stamped copies of the SAIC filings.
The Audit Committee has advised the board that in its view, the findings of the Report further support the integrity of the Company’s accounting system and financial reporting in the PRC and the US. The review was detailed, and it is also the view of the board that the Company’s processes were shown to be in accordance with good accounting practices.
“We are pleased the findings in the Report confirm our continued efforts to deliver good financial reporting and transparency for our shareholders,” stated Mr. Cai Yongjun, Chairman and CEO of Longwei. “We look forward to reporting strong fiscal 2012 results and completing the acquisition of the Huajie Petroleum assets as a further catalyst for our growth in fiscal 2013.”
The procedures and findings of the Tax Reconciliation Report can be found on the Company’s website at www.longweipetroleum.com under the “Investors” section. The report includes the following schedules as exhibits:
- Schedule A – Sales Revenue Compared between PRC SAT (CIT and VAT) filings to SEC filings
- Schedule B – List of Quarterly SAT – CIT Paid, Including Date, Amount, Voucher No. and Invoice No.
- Schedule C – List of Monthly SAT – VAT Paid, Including Date, Amount, Voucher No. and Invoice No.
- Schedule D – Comparison of December 31, 2011 SAIC filings to SEC filings for the same period of Calendar 2011
- Schedule E – Comparison of December 31, 2010 SAIC filings to SEC filings for the same period of Calendar 2010
About Longwei Petroleum Investment Holding Limited
Longwei Petroleum Investment Holding Limited is an energy company engaged in the storage and distribution of finished petroleum products in the People’s Republic of China. The Company’s oil and gas operations consist of transporting, storage and selling finished petroleum products, entirely in the PRC. The Company’s headquarters are located in Taiyuan City, Shanxi Province. The Company has a storage capacity for its products of 120,000 metric tons located at storage facilities in Taiyuan and Gujiao, Shanxi. The Company’s Taiyuan and Gujiao facilities can store 50,000 metric tons and 70,000 metric tons, respectively. The Company has the necessary licenses to operate and sell petroleum products not only in Shanxi but throughout the entire PRC. The Company’s storage tanks have the largest storage capacity of any non-government operated entity in Shanxi.
The Company seeks to earn profits by selling its products at competitive prices with timely delivery to coal mining operations, power supply customers, large-scale gas stations and small, independent gas stations. The Company also earns revenue under an agency fee by acting as a purchasing agent for other intermediaries in Shanxi, and through limited sales of diesel and gasoline at two retail gas stations, each located at the Company’s facilities. The Company seeks to continue to expand its customer base and distribution platform through the utilization of its large storage capacity, which allows the Company the flexibility to take advantage of pricing, supply and demand fluctuations in the marketplace.
For further information on Longwei Petroleum Investment Holding Limited, please visit http://www.longweipetroleum.com. You may register to receive Longwei Petroleum Investment Holding Limited’s future press releases or request to be added to the Company’s distribution list by contacting Dave Gentry at email@example.com.
Certain statements contained herein constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations, estimates and projections about Longwei’s industry, management’s beliefs and certain assumptions made by management. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Because such statements involve risks and uncertainties, the actual results and performance of the Company may differ materially from the results expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Longwei’s operations are conducted in the PRC and, accordingly, are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation. Other potential risks and uncertainties include but are not limited to the ability to procure, properly price, retain and successfully complete projects, and changes in products and competition. Unless otherwise required by law, the Company also disclaims any obligation to update its view of any such risks or uncertainties or to announce publicly the result of any revisions to the forward-looking statements made here. Readers should review carefully reports or documents the Company files periodically with the Securities and Exchange Commission.
SOURCE Longwei Petroleum Investment Holding Ltd.