INCOME TAXES (Tables)

9 Months Ended

Sep. 30, 2012

Income Tax Disclosure [Abstract]

Provision for Income Tax

The Company’s provision for income taxes consisted of:

	For the Three Months					For the Nine Months
	Ended September 30,					Ended September 30,
	2012			2011		2012			2011
PRC income tax:
Current	$	5,863,804		$	4,363,916	$	14,997,311		$	12,907,872
Deferred		(4,973	)		54,896		(11,525	)		25,541
	$	5,858,831		$	4,418,812	$	14,985,786		$	12,933,413

Reconciliation of Provision For Income Taxes Determined at Local Income Tax Rate to Effective Income Tax Rate

A reconciliation of the provision for income taxes determined at the local income tax rate to the Company’s effective income tax rate is as follows:

	For the Three Months						For the Nine Months
	Ended September 30,						Ended September 30,
	2012			2011			2012			2011
Pre-tax income	$	23,085,469		$	17,946,895		$	57,134,102		$	53,339,558
United States federal corporate income tax rate		34	%		34	%		34	%		34	%
Income tax computed at United States statutory corporate income tax rate		7,849,060			6,101,943			19,425,595			18,135,450
Reconciling items:
Loss not recognized as deferred tax assets		237,951			140,242			838,138			566,151
Change in fair value of warrants		(153,340	)		(189,455	)		(17,099	)		(1,087,568	)
Rate differential for PRC earnings		(2,103,517	)		(1,593,293	)		(5,370,521	)		(4,649,092	)
Other		28,677			(40,625	)		109,673			(31,528	)
Effective tax expense	$	5,858,831		$	4,418,812		$	14,985,786		$	12,933,413

Significant Components of Deferred Income Tax Assets

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of deferred income tax assets are as follows:

	September 30,			December 31,
	2012			2011
Deferred income tax assets:
Net operating loss carry forward	$	4,469,232		$	3,631,132
Unrealized intercompany profit in inventory		24,540			13,142
Accrued R&D expenses		-			187,446
Less: Valuation allowance		(4,469,232	)		(3,631,132	)
	$	24,540		$	200,588