China Medical Technologies Reports Third Quarter Financi...( General and administrative expenses w...),Health

General and administrative expenses were RMB24.2 million (US$3.3 million) for 3Q FY2007, representing a 78.4% year-over-year increase. The increase was primarily due to an increase in the number of employees to accommodate the Company's rapid growth, annual incremental adjustment of salary in June 2007 and stock compensation expense arising from an incentive stock grant in June 2007.

Interest income was RMB7.1 million (US$1.0 million) for 3Q FY2007, representing a 35.8% decrease from the corresponding period of FY2006. The decrease was primarily due to the payment for FISH acquisition and a decrease in interest rate for US dollar bank deposits.

Interest expense of convertible notes was RMB9.8 million (US$1.3 million) for 3Q FY2007. The notes bear interest at 3.5% per annum.

Interest expense of amortization of convertible notes issuance cost of RMB2.0 million (US$0.3 million) for 3Q FY2007 was due to the US$150 million convertible notes issued in November 2006. The issuance cost is amortized over the five year term of the convertible notes.

Other interest expense of RMB1.2 million (US$0.2 million) for 3Q FY2007 was due to the present value discounting of long term other payable of US$10 million for the final payment of FISH acquisition due in February 2009.

Income tax expense was RMB22.7 million (US$3.1 million) for 3Q FY2007. The effective tax rate for 3Q FY2007 was 18.9%.

The China Unified Corporate Income Tax Law (the "New Law") became effective on January 1, 2008. The New Law established a single unified 25% income tax rate for most companies with some preferential income tax rates including 15% income tax rate to be applicable to qualified hi-tech enterprises. The related detailed implementation rules and regulations on the definition of various terms and the interpretation and application of the provisions of the New Law were promulgated by the State Council in December 2007. However, the application for hi-tech ent
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