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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 o
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2010
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to .
 Asia Electrical Power International Group Inc.
  NEVADA
    
    0-51787
    
    98-0522960(State or other 
jurisdiction of 
incorporation or 
organization)
    
    (Commission File No.)
    
    (IRS Employee
Identification No.)
 E-4, Floor 3, Haijin Square
Taizi Road, Nanshan District, Shenzhen, PRC 518067
 
 86 755 2823 1993
 
 þ o
 o o
  Large Accelerated Filer o
Accelerated Filer o
Non-Accelerated Filer o(Do not check if a smaller reporting company)
Smaller Reporting Company þ o þ




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TABLE OF CONTENTS  PART I  FINANCIAL INFORMATIONItem 1. Financial Statements.Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.Item 3. Quantitative and Qualitative Disclosures about Market RisksItem 4. Controls and ProceduresPART II  OTHER INFORMATIONItem 1. Legal Proceedings.Item 1A. Risk Factors.Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.Item 3. Defaults Upon Senior Securities.Item 5. Other Information.Item 6. ExhibitsSIGNATURESEX-31.1EX-31.2EX-32    Table of Contents  
 PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements.
 ASIA ELECTRICAL POWER INTERNATIONAL GROUP INC.  CONSOLIDATED BALANCE SHEETS
 March 31, 2010
    
    
    December 31, 2009(Unaudited)
    
    
    (Audited)ASSETSCurrent Assets:Cash
    
    $
    2,893,551
    
    
    $
    3,013,027Accounts receivables
    
    
    4,898,291
    
    
    
    5,381,315Other receivables
    
    
    154,576
    
    
    
    161,290Advances to suppliers
    
    
    54,101
    
    
    
    81,340Inventory
    
    
    3,027,837
    
    
    
    2,851,726Total current assets
    
    
    11,028,356
    
    
    
    11,488,698Fixed Assets:Land use right
    
    
    2,711,375
    
    
    
    2,727,123Property plant & Equipment
    
    
    7,937,991
    
    
    
    4,945,09610,649,366
    
    
    
    10,540,107Less accumulated depreciation
    
    
    1,558,822
    
    
    
    1,449,790Net fixed assets
    
    
    9,090,544
    
    
    
    9,090,317Other Assets:Deposits
    
    
    657,619
    
    
    
    554,345Total other assets
    
    
    657,619
    
    
    
    554,345Total Assets
    
    $
    20,776,519
    
    
    $
    21,133,360LIABILITIES AND STOCKHOLDERS EQUITYCurrent Liabilities:Accounts payable
    
    $
    5,611,987
    
    
    $
    5,935,828Advances from customers
    
    
    664,934
    
    
    
    545,739Accrued liabilities
    
    
    270,978
    
    
    
    713,579Other liabilities
    
    
    553,503
    
    
    
    195,643Convertible Note Payable
    
    
    1,436,996
    
    
    
    1,400,833Total current liabilities
    
    
    8,538,398
    
    
    
    8,791,622Stockholders Equity:Common stock: authorized 150,000,000 shares of
$0.001 par value; issued and outstanding
51,959,693 shares
    
    
    51,960
    
    
    
    51,960Preferred stock: authorized 5,000,000 shares of $0.001 par
value; issued and outstanding 5,000,000 shares
    
    
    5,000
    
    
    
    5,000Capital in excess of par value
    
    
    11,154,789
    
    
    
    11,154,789Accumulated deficit
    
    
    11,119
    
    
    
    94,546Earnings appropriated for statutory reserves
    
    
    183,749
    
    
    
    183,749Accumulated other comprehensive income
    
    
    853,742
    
    
    
    851,694Total Stockholders equity
    
    
    12,238,121
    
    
    
    12,341,738Total Liabilities and Stockholders Equity
    
    $
    20,776,519
    
    
    $
    21,133,360
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ASIA ELECTRICAL POWER INTERNATIONAL GROUP INC.  CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Month Periods Ended March 31, 2010 and 2009
(Unaudited)
 2010
    
    
    2009Revenue
    
    $
    3,536,923
    
    
    $
    2,079,282Cost of Sales
    
    
    2,830,142
    
    
    
    1,702,321Gross Profit
    
    
    706,781
    
    
    
    376,961Selling and Administrative Expenses
    
    
    773,216
    
    
    
    495,160Operating Loss
    
    
    (66,435
    )
    
    
    (118,199
    )Other Income( Expense):Interest Expense
    
    
    (37,433
    )
    
    
    (38,006
    )Interest Income
    
    
    1,468
    
    
    
    2,310Other Expense
    
    
    (1,463
    )
    
    
    (5,831
    )Other Income
    
    
    33,830
    
    
    
    31,993Net other
income (expense)
    
    
    (3,598
    )
    
    
    (9,534
    )Income before Income Taxes
    
    
    (70,033
    )
    
    
    (127,733
    )Provision for Income Taxes:
    
    
    35,632Net Loss for the Period
    
    
    (105,665
    )
    
    
    (127,733
    )Other Comprehensive Income: Foreign Currency Translation Adjustments
    
    
    2,048
    
    
    
    13,032Total Comprehensive Loss
    
    $
    (103,617
    )
    
    $
    (114,701
    )Income Per Common Share Basic and Diluted
    
    
    ($0.00
    )
    
    
    ($0.00
    )Weighted Average Number of Shares
Outstanding
    
    
    51,959,693
    
    
    
    51,959,693
  3




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ASIA ELECTRICAL POWER INTERNATIONAL GROUP INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Month Periods Ended March 31, 2010 and 2009
 (Unaudited)
 2010
    
    
    2009CASH FLOWS FROM OPERATIONS:Net loss
    
    $
    (105,665
    )
    
    $
    (127,733
    )Adjustments to reconcile net loss to cash flows
provided by operating activities:Charges not requiring the outlay of cash:Depreciation and amortization
    
    
    147,151
    
    
    
    109,909Amortization of discount on convertible note
    
    
    (36,163
    )
    
    
    (36,163
    )Changes in assets and liabilities:Decreases in accounts receivable
    
    
    483,895
    
    
    
    20,753Decrease(increase) in other receivables
    
    
    6,740
    
    
    
    (10,858
    )Decrease in advances to suppliers
    
    
    27,253
    
    
    
    24,282(Increase)decrease in inventory
    
    
    (175,654
    )
    
    
    468,257Decreases in accounts payable
    
    
    (324,670
    )
    
    
    (206,195
    )Increase (decrease) in advances from customers
    
    
    119,109
    
    
    
    (5,238
    )Increase( decrease) in other payable
    
    
    357,537
    
    
    
    (30,504
    )(Decrease)increase in accrued liabilities
    
    
    (442,720
    )
    
    
    11,523Net Cash Provided by Operating Activities
    
    
    129,139
    
    
    
    290,359CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of fixed assets
    
    
    (145,915
    )
    
    
    (8,150
    )Return of guarantee deposit
    
    
    0
    
    
    
    203,029Increases in deposits
    
    
    (103,186
    )
    
    
    (213,642
    )Net Cash Consumed By Investing Activities
    
    
    (249,101
    )
    
    
    (18,763
    )CASH FLOWS FROM FINANCING ACTIVITIES:Repayments of loans
    
    
    
    
    
    
    (201,346
    )Net Cash Consumed by Financing Activities
    
    
    
    
    
    
    (201,346
    )Effect of exchange rates on cash
    
    
    486
    
    
    
    3,981Net change in cash
    
    
    (119,476
    )
    
    
    74,231Cash balance, beginning of period
    
    
    3,013,027
    
    
    
    3,013,900Cash balance, end of period
    
    $
    2,893,551
    
    
    $
    3,088,131
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ASIA ELECTRICAL POWER INTERNATIONAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2010
(Unaudited)
 1. BASIS OF PRESENTATION
   2. INCOME TAXES
  3. SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION
   5




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations.
 Cautionary Notice Regarding Forward Looking Statements.
  Background
 (AEPW) Berita International Corporation. Keiji International Group Inc. Asia Electrical
Power International Group Inc.
 Agreement Naiji
    6




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Recent Events
   Results of Operations
 March 31, 2010, compared to March 31, 2009
 Revenues
 Three months ended
    
    
    
    
    
    
    Three months endedMarch 31, 2010
    
    
    % Sales
    
    
    March 31, 2009
    
    
    % SalesRevenue
    
    $
    3,536,923
    
    
    
    100
    %
    
    $
    2,079,282
    
    
    
    100
    %Cost of Sales
    
    
    2,830,142
    
    
    
    80
    %
    
    
    1,702,321
    
    
    
    82
    %Gross Profit
    
    $
    706,781
    
    
    
    20
    %
    
    $
    376,961
    
    
    
    18
    %
   Selling and Administrative Expenses
  7




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Operating
Loss
  Other Income (Expense)
  Income Taxes
  Income before Income Taxes, Net Income for the Period, Total Comprehensive Income, and Loss Per
Common Share
   8




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Current Trends in the Industry
  Liquidity and Capital Resources
   Materials, Labor, Overhead
    
    $
    2,460,000Selling Expenses and Administrative Expenses
    
    $
    620,000Total
    
    $
    3,080,000
 Sources of Capital
   Material Commitments
  Seasonal Aspects.
  Off Balance Sheet Arrangements.
  9




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CRITICAL ACCOUNTING POLICIES, JUDGMENTS AND ESTIMATES.
 Critical Accounting Estimates.
  
    
    Assumptions are required to be made, and
    
    Changes in estimates could have a material adverse effect on our financial statements.
  Balance Sheet
    
    There is a risk of
    
    How did we arrive
    
    How accurate have
    
    How likely toAccount
    
    change because?
    
    at these Estimates?
    
    we been in the past?
    
    change in the future?Accounts 
Receivable
    
    We provide an
Allowance For
Doubtful Accounts
(AFDA) based on the
age of each
account.
Uncollectible
accounts are also
written off,
particularly when
bankruptcy occurs.
    
    AFDA provisions are
made by analyzing
agings of the
accounts
receivable.
    
    These estimates of
AFDA have been
accurate in the
past.
    
    This method of
determining AFDA
will likely not
change as the
method used has
provided accurate
results.Inventory
    
    We review the net
realizable value of
our inventory to
ensure that it is
recorded at a lower
of cost or market
value. At this
time, any obsolete
inventory is
written off. The
market value could
change due to the
success of
technical
innovation on our
part or by
competitors within
the switchgear
Market.
    
    The cost of our
inventory
(including
manufacturing
Overhead) is
compared to net
realizable value in
the market.
    
    Our procedure has
produced reliable
results.
    
    We do not expect
any change in
procedure.Fixed Assets
    
    We calculate our
depreciation using
the straight line
method based on
useful lives of the
assets. The useful
lives of the asset
could change due to
technical
innovation and or
other factors and
we may write off or
write down obsolete
assets.
    
    The estimated lives
of fixed assets are
based on guidelines
provided by Chinese
tax authorities.
    
    We believe our
depreciation method
has produced
accurate results.
    
    We do not foresee
any changes.Accrued Liabilities
(Income Tax)
    
    We are subject to
income taxes in
China. The
determination of
the tax liability
is based on
calculations which
are further based
on estimates such
as, for example,
allowances for bad
debt. These
estimates may
change from time to
time and the final
tax outcome may
increase or
decrease our income
tax expense
provision made.
    
    Income tax
provision is
calculated based on
the statutory tax
rate and level of
operating income.
Operating income is
partially based on
various estimates.
These estimates may
differ from actual
results. This
calculation is made
monthly and
installments are
made toward the tax
liability.
    
    Our estimates
currently have been
in line with the
actual assessment
in our tax
liability. Income
tax provisions are
calculated monthly.
    
    Our estimates may
change from time to
time and this may
affect the income
tax provision. We
may under or over
remit our
installments based
on how our
estimates differ
from actual
results.
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Revenue Recognition.
  
 Item 3. Quantitative and Qualitative Disclosures about Market Risks
  
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures.
  Changes in Internal Controls over Financial Reporting.
   11




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Limitations on Effectiveness of Controls and Procedures.
  12




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PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings.
 None.
 
 Item 1A. Risk Factors.
 Not applicable to small reporting companies.
 
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
 None.
 
 Item 3. Defaults Upon Senior Securities.
 None.
 
 Item 5. Other Information.
 None.
 
 Item 6. Exhibits
 31.1
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.
    
    Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
 (Signatures appear on following page)
 13




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SIGNATURES
  ASIA ELECTRICAL POWER INTERNATIONAL GROUP INC.
Date: June 15, 2010By:
    /s/ Yunlong GuoYulong GuoPresident and Chief Executive OfficerBy:
    /s/ Yunbin LiYunbin LiChief Financial Officer 14