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Longwei Petroleum Announces Completion Of Tax Reconciliation Report By Independent Auditors

Stocks in this article: LPH

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:

  1. SAT (CIT and VAT) Filings - No variance in revenues reported under US GAAP.
  2. 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.
  3. 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.

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